Lords Sitting of 19 November 1981

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Exeter): The LORD CHANCELLOR on the Woolsack.
The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, before the commencement o business I take the opportunity to inform the House that, with the approval of Her Majesty the Queen, I have accepted an invitation from the President of the Italian Senate to visit Rome and address the Senate on Wednesday, 25th November. This will involve my being out of the country on Wednesday, 25th and Thursday, 26th November, and I trust that the House will agree to grant me leave of absence for those two days.

Taxation Levels
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will comment on the OECD report which states that taxes rose more sharply in Britain last year than in any other leading industrial country and, further, that only the very highest paid are taxed less than when the present Government came into office and the poorest paid have suffered the biggest rises.
The Minister of State, Treasury (Lord Cockfield): My Lords, the increase in the total tax burden last year was needed to meet the higher level of Government expenditure which was due, in the main, to the effects of the recession. In terms of the overall tax burden, the OECD report shows the United Kingdom at the centre of the range occupying the eleventh place out of 23 countries. The OECD report does not comment on the burden of tax at different income levels. But in making comparisons of this kind it is necessary to bear in mind the big increases in wages and salaries which took place in the years in question.
Lord Molloy: My Lords, although I appreciate the need for the fantasy in the noble Lord's very brave reply, does he not really appreciate that, among other things, it is this report that is causing many people of all political opinions on both sides of industry and commerce to think that it is time that the Government acknowledged that there should be a relaxation of their tough attitude? The people, of all political shades, who are protesting do not wish to see the British economy, through strict adherence, sacrificed on the altar of a disastrous and unjust political dogma.
Lord Cockfield: My Lords, no; the noble Lord is entirely mistaken. The OECD report contains no comment of any description other than on technical statistical matters, which I imagine are of limited interest to the noble Lord. As regards his criticism of the increase in the proportion of the gross national product taken in taxation, as I say, this is a reflection of the increase in the proportion of the GNP taken by expenditure; and if the noble Lord wishes to see a reduction in the proportion of taxation, presumably he supports a reduction in the level of Government expenditure.
Lord Oram: My Lords, on the question of statistical information to which the noble Lord has just referred, does he recall that soon after this Government took office they introduced the tax and prices index in the expectation that taxes would go down and that the combined index would show a more favourable image than the retail prices index? In fact, that new index has risen more steeply than the RPI. Would it be helpful, therefore, if I were to suggest that the Government might now stop publishing the tax and prices index, as it has failed to meet the cosmetic purpose for which it was introduced?
Lord Cockfield: My Lords, the index was never introduced for a cosmetic purpose. However, I note the noble Lord's suggestion that information that he does not like should be suppressed.
Lord Oram: My Lords, does the noble Lord recognise that I very much welcome the revelation of the truth through that index? I was only trying to be helpful to the Government in their usual efforts to disguise the truth.
Lord Cockfield: My Lords, the Government are more than capable of looking after themselves without the assistance of the noble Lord. The fact that levels of taxation increased this year is a matter for regret. I have explained the reason for it in the House on many an occasion. The noble Lord simply has to make up his own mind whether he wishes the present level of expenditure to be maintained, despite the effect it has on the level of taxation, or whether he is pressing the Government to reduce the level of Government expenditure.
Lord Kilmarnock: My Lords, will the noble Lord not agree that the raising of the employee's national insurance contribution on the average wage from 6·5 per cent. to 7·75 per cent. is simply another form of disguised taxation? Will he not further agree that the only way in which to put our tax and social security system in order is by the introduction of a tax credits scheme along the lines proposed by his own party in 1972 and 1973?
Lord Cockfield: My Lords, if I may say so, I had a considerable measure of personal responsibility for the introduction of that scheme, and, therefore, I am as familiar with it as is the noble Lord. As regards the national insurance contribution, it is not a tax; it is a payment for benefits, and the amount of the contribution is linked to the amount of the benefits.

565
Nor is it disguised, otherwise the noble Lord would not have spotted it.
Lord Beswick: My Lords, without in any way wishing to contest the proposition that the noble Lord the Minister is capable of looking after himself, I should like to ask him the following question. Is it or is it not a fact that during the lifetime of this Government the general burden of taxation has moved from the higher paid to the lower paid?
Lord Cockfield: My Lords, in 1979 we reduced the absurdly high rates of tax on the top incomes. Tax rates of 83 per cent. on earned and 98 per cent. on investment income were completely unsupportable on any basis. As regards the last Budget, the fact that we were unable either to revalue personal allowances or to revalorise the bands meant that the increase in taxation on the higher income groups was proportionately greater than the increase on the lower income groups.
Lord Beloff: My Lords, will my noble friend the Minister agree that the election of a socialist Government in France is likely to mean that at least one of our major competitors will be having a very much higher tax burden than ourselves?
Lord Cockfield: My Lords, I am most grateful to my noble friend for drawing attention to the problems associated with socialist Governments. I can assure him that a socialist Government in this country would be even worse.
Lord Bruce of Donington: My Lords, is the noble Lord aware that my noble friend Lord Molloy, of Ealing, is just as interested in the technical aspects of the OECD report as is the noble Lord, and is probably more knowledgeable about them than the noble Lord, as he would modestly be prepared to admit? Is the noble Lord further aware that, despite all the verbal dexterity that he exhibits from time to time in this House, the fact of the matter is that both direct and indirect taxes have risen very considerably and are in complete contradiction to the election pledges of the party opposite, which proposed to reduce taxation in order to release incentives among our people? Their performance suggests—
Several noble Lords: Speech!
Lord Bruce of Donington: My Lords, their performance suggests that the people who require more incentives are the higher paid in this country.
Lord Cockfield: My Lords, I am most grateful to the noble Lord for drawing attention to the statistical expertise of his noble friend Lord Molloy. I trust therefore that he will gain great interest from reading the statistical introduction to the OECD report. If the noble Lord does so he will find that it lends no support whatever to the long, and totally misleading, dissertation he gave about the policy of Her Majesty's Government.
Lord Beswick: My Lords, would the noble Lord be kind enough to return to the question that I asked and give me a simple answer, Yes or No? Is it or is it not a fact that from the lower paid there is a greater proportion of revenue now than there was at the time the Government took office?
Lord Cockfield: My Lords, I have already answered the noble Lord's question in detail, but in dealing with complex matters one can never give a simple Yes or No. This is the fallacy known to the logicians as plurales questiones, and I suggest that the noble Lord turns his attention to that matter.
Lord Morris: My Lords, is my noble friend aware how much a great parliamentary performance is appreciated by noble Lords at least on this side of the House?
Lord Cockfield: My Lords, I am most grateful to my noble friend for his assistance.
Lord Kaldor: My Lords, would the noble Lord not agree that, if the Government tried to increase the gross national product instead of doing everything to reduce it, this would be the best way of reducing taxation as a percentage of the GNP?
Lord Cockfield: My Lords, the noble Lord's assumptions are entirely unwarranted. An increase in the gross national product is obviously the best way of improving our fortunes. This is why the Government's policy has been directed to providing incentives, to removing controls, and to pressing for improvements in manning levels and in productivity practice.
Lord Kaldor: My Lords, why have the noble Lord's Government reduced the gross national product by 7½ per cent. since they came into office?
Lord Cockfield: My Lords, this is where I say that the noble Lord is totally mistaken in his prior assumption. The reduction in the gross national product was not the result of Government policies. It flowed partly from the world recession; and it flowed partly from the uncompetitiveness of the British economy, which, as the noble Lord himself has pointed out on many an occasion, has built up over a long period of years.
Lord Molloy: My Lords, is the noble Lord aware that he is quite correct when he says that Britain is halfway on that table of 22, but the fact still remains that, although that is our position, the rich are taxed least, at the expense of the poor, and because of adherence to this policy of monetarism—
Noble Lords: Question!
Lord Molloy: I hope the noble Lord and his colleagues behind him will not find anything humorous in 3 million colleagues who are on the dole. My question is this: Will he please be good enough to look very hard at the report, and ensure that people are requested that the policies involved are at least looked at? That is not an unreasonable request.
Lord Cockfield: My Lords, if the noble Lord studies the report he will find that the proportion of the GNP taken in taxation in this country is not exceptional compared with that of other countries, and he will also find that in countries such as Germany and the United States, which over the years have had a much better performance in economic terms than this country has, there are much greater inequalities of income both before and after tax than exist here. We all deplore the present level of unemployment. The Government feels that it is a tragedy for the British people. We have pointed out many directions in which the situation could be improved.

Central London: Traffic Regulation
3.14 p.m.
Lord Boyd-Carpenter: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they propose to take in the light of the failure of the Greater London Council to deal with traffic congestion caused by the entry into and passage through Central London of very large commercial vehicles.
The Earl of Avon: My Lords, traffic regulation in London is the responsibility of the Greater London Council which has powers under the Road Traffic Regulation Act 1967 to regulate the movement of lorries and other heavy vehicles. Lorries of more than 40 feet in length, not requiring access, are already banned from the central area of London. I understand that the Greater London Council has appointed an independent panel of inquiry into the effects of bans on heavy lorries within London: we await with interest the outcome of this inquiry.
For the Government's part, my right honourable friend the Secretary of State for Transport continues to press ahead as fast as possible towards the completion of the London outer orbital road, the M25, which will provide a means whereby large vehicles with business elsewhere may by-pass the London area.
Lord Boyd-Carpenter: My Lords, while thanking my noble friend for that reply, may I ask him whether he is aware that the situation is becoming increasingly acute? That if, as is stated in the press, the Government permit the operation of larger vehicles than at present, it will become even more acute? Is he also aware that the Greater London Council, with whom, as he said, primary responsibility lies, is withdrawing the safeguarding of the routes which are required to provide proper diversionary roads round London? In those circumstances, in view of the fact that the national capital is involved, can my noble friend assure me that in default of early effective action by the GLC the Government will take powers, if necessary by legislation, and do it themselves?
The Earl of Avon: My Lords, I am grateful for my noble friend's battery of supplementaries. May I start with the last one. There is a power for my right
568
honourable friend under the Road Traffic Act 1967 to take overriding powers. With regard to the Armitage Report, these are at the moment rumours we are reading in the press. My right honourable friend hopes to make a statement on this in the near future. The noble Lord also raised a question of what the Greater London Council is doing. It has just started this panel of inquiry, with very good terms of reference, which is due to report in the spring, and I think we should wait for this.
Lord Underhill: My Lords, is the noble Earl aware that there is considerable disappointment among noble Lords that this House has not been able to debate the Armitage Report? Does he also recall that in the debate on the gracious Speech I asked whether it was the intention of the Government to do anything in the present legislative Session regarding the Armitage Report, and at this moment I am still awaiting a reply? Can he confirm what is the position?
The Earl of Avon: My Lords, concerning whether this House debates it or not, I am sure that is for the usual channels to negotiate. So far as the matter stands at the moment, the Government are still considering the issue of heavy lorries. We are certainly moving towards decisions, and my right honourable friend the Secretary of State for Transport has made it clear that he expects to announce the Government's intentions fairly soon.
Lord Mowbray and Stourton: My Lords, while welcoming what the noble Earl said about the M25 being still Government priority, can he tell me, referring to Lord Boyd-Carpenter's question, is the 11-ton axle weight still being applied in regard to the heavier allowances for commercial vehicles?
The Earl of Avon: My Lords, there is no change at the moment. We are, as I said, awaiting my right honourable friend's statement.
Baroness Denington: My Lords, I too welcome the noble Earl's reference to the M25. Can the noble Earl now give the House a date for the completion of the M25, which is not the responsibility, as he is aware, of the Greater London Council but of the Ministry of Transport and the Government? Is the noble Earl aware that the Greater London Council for many years, irrespective of party, has been pressing for this orbital road which will take the heavy traffic out of London, and that until that road is completed and built, which is the responsibility of the Government, it is not able to direct heavy lorries to suitable routes for them?
The Earl of Avon: My Lords, I am grateful for the noble Baroness's question. Subject to the availability of adequate funds and the satisfactory outcome of statutory procedures, my right honourable friend expects the M25 to be completed as an orbital road in 1986. It has the highest priority in the national trunk road programme. Perhaps the noble Baroness may have seen that even yesterday a new section was opened between the Egham and Yeoveney sections.
Baroness Gardner of Parkes: My Lords, is the noble Earl aware that the previous administration of the Greater London Council passed plans for a lorry ban in the northern part of London? That all costs to implement this ban had already been met, and all notices were ready to be unveiled, and that this experimental lorry ban, which would have been of great benefit in establishing whether lorries and heavy vehicles could be kept to major roads only, was cancelled by the present administration with the loss of those funds?
The Earl of Avon: My Lords, I was not aware of my noble friend's assertion, and I am grateful to her for drawing it to the attention of the House.

Chile: Sale of Cruiser and Tanker
3.20 p.m.
Lord Brockway: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the cruiser HMS "Norfolk" and the naval tanker "Tidepole" have been delivered to Chile, and if not, whether the sale will be cancelled in view of the evidence that 600 persons have been abducted and often tortured by the security forces in that country and that 1,500 persons have disappeared, including the British businessman, Mr. William Beausire.
The Earl of Avon: My Lords, both HMS "Norfolk" and RFA "Tidepool" will be delivered to Chile during 1982. This sale was agreed only after full consideration of all relevant factors, and we are content that it should proceed.
Lord Brockway: My Lords, will the Government reconsider this decision in view of the latest evidence of torture and disappearances in Chile? Would the noble Earl agree that these have grown worse since the British ambassador was withdrawn because of the torture of Dr. Cassidy, and is this not now indicated in the disappearances which include a British citizen who is charged because his sister had some association with the son of the late President Allende? Have the Government noted the new constitution for Chile which stabilises this denial of human rights, including detention and house arrest without charge, without trial and without any right of appeal?
The Earl of Avon: My Lords, we share the noble Lord's concern about abuses of human rights in Chile as elsewhere, and we shall continue to take every appropriate opportunity in our bilateral contacts as well as in the United Nations and other international fora to apply constructive and effective pressure on the Chilean Government in this respect. Her Majesty's Government are fortunate to have an ambassador there to give our points more force.
Lord Campbell of Alloway: My Lords, would the Minister agree that it is not appropriate that the livelihood of those who work in our shipyards and of
570
those who work to supply those shipyards should be put to the hazard of the type of consideration which is adumbrated in the noble Lord's Question?
The Earl of Avon: My Lords, while repeating that of course we share the concern about the abuses of human rights, I take my noble friend's point. Of course when we had the embargo, such countries as Germany, France and Israel did not have an embargo and benefited accordingly.
Baroness Llewelyn-Davies of Hastoe: My Lords, is the Minister aware that we on this side are glad that the Government have expressed their disapproval of the Chilean Government's attitude to human rights and are glad indeed that the Minister of State mentioned that to the visiting Chilean Minister, who I think is the Minister for Mines? Would it not be even more effective if the question of handing over these two warships had been put into the argument as a possible quid pro quo?
The Earl of Avon: My Lords, it is always difficult to balance the two, but it is the view of Government that applications for export licences for the supply of defence equipment to Chile should be treated on their individual merits. All relevant factors, including human rights considerations, are taken into account in each case, and in this context we agree to the sale of defence equipment only which in our judgment is not likely to be used for internal repression.

Cambodia: Pol Pot Régime
3.24 p.m.
Lord Brockway: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will continue to support United Nations recognition of the deposed Pol Pot Khmer Rouge Government in Kampuchea in view of the increasing evidence of its policy of genocide, including the uncovering of a grave in the south of the country containing the remains of 66,000 people, and the acknowledgement by Jeng Sary, the Khmer Rouge Foreign Minister, that 15,000 persons were tortured and executed at the Tuol Sleng interrogation centre.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, we need to make it clear to Vietnam that her attempt to occupy Cambodia and impose an unrepresentative Government on that country is not acceptable to the international community. Accordingly, and in common with a growing majority of member states of the United Nations, we have felt it necessary to maintain the existing position on the Cambodian seat at the United Nations. Our own position is of course clear. We withdrew recognition from the Pol Pot régime in December 1979.
Lord Brockway: Yes, my Lords, but do the reasons which the Minister has urged justify the recognition of the Pol Pot régime? Would he not agree that it has been the most barbarous since the time of Hitler? Is it not quite extraordinary that recognition should be given to a régime which has no control of the territory and has the support of only 30,000 soldiers and their dependants who are in rebellion against the de facto Government? Is not this an amazing decision to reach?
Lord Trefgarne: My Lords, I agree with the noble Lord that the history of the Pol Pot régime is quite appalling, but, frankly, the position we have to adopt in connection with the United Nations seat, which is the subject of the noble Lord's Question, is the lesser of two evils.
Lord Jenkins of Putney: Is that really the case, my Lords? Would the Minister not agree that the Government's position in this matter is very inconsistent indeed? On the one hand, they do not recognise the Government individually, while on the other they support a completely incongruous decision by the United Nations. Will they look at this again?
Lord Trefgarne: My Lords, we do not recognise Governments at all nowadays; we recognise the existence of states, so the question of recognising one Government or another in Cambodia does not arise.
Lord Jenkins of Putney: My Lords, the word "recognition" was just used by the Minister himself.
Lord Trefgarne: No, my Lords; it was used by the noble Lord opposite.
Lord Jenkins of Putney: No, it was used by the Minister.
Several noble Lords: Order!
Lord Brockway: My Lords, reverting to the Minister's first Answer, may I ask if he has read, as I am sure he has, the documents in the Foreign Office of the exchanges between the Vietnam Government and the Pol Pot Government? If he has, as I have, may I ask if he would agree that those exchanges showed the most conciliatory attitude by the Vietnam Government and left no doubt that it was the Pol Pot Government which first invaded Vietnam and which has led to the present situation?
Lord Trefgarne: My Lords, the fact remains that the Vietnamese puppet Government in Cambodia—which is what it is—arrived there at the tail of a column of troops, and that is not the sort of thing to which we can give any kind of approval.

Procedure of the House: Select Committee
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Select Committee on Procedure of the House be appointed; and that, as proposed by the Committee of Selection, the Lords following, with the Chairman of Committees, be named of the Committee:—

Airedale, L.

Ampthill, L.

Aylestone, L.

Boyd-Carpenter, L.

Byers, L.

David, B.

Denham, L.

Drumalbyn, L.

Edmund-Davies, L.

Ferrers, E.

Hailsham of Saint Marylebone, L. (L. Chancellor)

Hill-Norton, L.

Hylton-Foster, B.

Irving of Dartford, L.

Llewelyn-Davies of Hastoe, B.

Maybray-King, L.

Mishcon, L.

Mowbray and Stourton, L.

Nugent of Guildford, L.

Peart, L.

Ponsonby of Shulbrede, L.

Rugby, L.

Shackleton, L.

Skelmersdale, L.

Underhill, L.

Wigoder, L.

Young, B.—(Lord Aberdare.)

On Question, Motion agreed to.

House of Lords Offices: Select Committee
Lord Aberdare: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Select Committee on the House of Lords Offices be appointed and that as proposed by the Committee of Selection the Lords following, with the Chairman of Committees, be named of the Committee:—

Ampthill, L.

Ardwick, L.

Aylestone, L.

Bessborough, E.

Bishopston, L.

Boyd-Carpenter, L.

Brandon of Oakbrook, L.

Bruce of Donington, L.

Byers, L.

Campbell of Croy, L.

Cathcart, E.

Cholmondeley, M.

Collison, L.

Darling of Hillsborough, L.

Davies of Leek, L.

De La Warr, E.

Denham, L.

Drumalbyn, L.

Eccles, V.

Evans of Claughton, L.

Ferrers, E

573

Fisher of Rednal, B.

Gosford, E.

Greenwood of Rossendale, L.

Grey, E.

Hailsham of Saint Marylebone, L. (L. Chancellor)

Hale, L.

Hampton, L.

Hayter, L.

Hill-Norton, L.

Hylton-Foster, B.

Ilchester, E.

Kennet, L.

Kimberley, E.

Kinnaird, L.

Kinnoull, E.

Lee of Newton, L.

Llewelyn-Davies of Hastoe, B.

Lovell-Davies, L.

Lucas of Chilworth, L.

Lyell, L.

Mowbray and Stourton, L.

Nugent of Guildford, L.

Orr-Ewing, L.

Peart, L.

Ponsonby of Shulbrede, L.

Reilly, L.

Rochester, Bp.

St. Aldwyn, E.

Seebohm, L.

Sempill, Ly.

Shackleton, L.

Sherfield, L.

Soames, L.

Soper, L.

Strabolgi, L.

Trefgarne, L.

Tryon, L.

White, B.

Wigoder, L.

Young, B.—(Lord Aberdare.)

Lord Beswick: My Lords, while congratulating the noble Lord, the Lord Chairman of Committees, on the distinguished list he has here, may I ask him to assure the House that it is still necessary to have so formidable a size of committee? To have 61 members on a Select Committee seems rather on the large side. May I ask the noble Lord to say how that figure is arrived at?
Lord Aberdare: This has always been a large committee, my Lords, because there are a number of very important sub-committees like the Refreshment Committee, the Administration Committee, the Finance Committee and the Library Committee, and for that reason it tends to be very large.
On Question, Motion agreed to.

Beverage Containers Bill [H.L.]
3.29 p.m.
Lord Beaumont of Whitley: My Lords, I beg to move that this Bill be now read a second time. I am delighted to see that so many noble Lords are interested in the Bill and have put their names down to speak. In particular, I am sure we are all looking forward to
574
the maiden speech of the noble Earl, Lord Winchilsea, which I do not least because I know he supports the Bill.
I have received a note from the Chief Whip suggesting that I might at this stage appeal to your Lordships for short speeches during the progress of the Bill. There are two important matters of business after this Second Reading debate, and I gladly agreed to the Chief Whip's request, particularly perhaps for the shortening of the speech of anyone who happens to be opposed to the Bill. I shall do my best to keep my remarks as brief as possible, but from the amount of paper that has flowed into your Lordships' letterboxes as a result of the Bill, you will have seen that a large number of matters arise and that there are a large number of points to answer. I fear that I have myself contributed to the waste paper by circulating a number of your Lordships on some of the inaccuracies in the propaganda to which you have been subjected. Obviously I must deal with some of the matters, and all I can do is to promise the Chief Whip and your Lordships' House that I shall be as brief as possible.
It is a good thing that so many noble Lords are joining in today's debate, because I believe that this is the first of a number of measures which will increasingly become necessary if we are to have the kind of conservation that we need and are to move towards a sustainable society. I think that one more apology is due to your Lordships in that at the moment the whole matter is being dealt with by the EEC under a draft directive which is at present under consideration by Sub-Committee G. In many ways it would have been more convenient had we been able to debate these matters together and have waited until Sub-Committee G had reported, but I am told that Sub-Commitee G will not report for some considerable time. The sub-committee's report cannot be in your Lordships' hands before the new year, and it might be even later, and your Lordships know only too well how full the parliamentary programme becomes as the year wears on.
This Bill has already been about for some considerable time amd I am lucky to have had the co-operation of your Lordships and the authorities of your Lordships' House in order to get this prime time. So, although I am sorry that we have not been able to wait for the report of Sub-Committee G, I do not think that any particular harm has been done. I say that because, if your Lordships pass the Bill, as I hope you will, there is absolutely no way in which it can contradict what might or might not be said in the EEC directive. The two are in harmony. In some ways one is narrower than the other, in some ways one goes further than the other. But there is no way in which passing the Bill will mean that our hands will in any way be tied when it comes to considering any directive that might appear from the EEC. We ought to be aware of the point that in fact no directive might appear from the EEC, in particular if our Government show resistance to some of the ideas in the draft directive, which at the moment appears to be the case, but which I hope will not eventuate in the long run.
Before turning to my main remarks, I should like to say that I am sure that your Lordships will be very sorry that the noble Lord, Lord Wynne-Jones, is not here to move the Bill or even to speak to it. As your

575
Lordships know, he was to have moved the Bill last Session, but then, sadly, illness intervened and I took it over from him. Unfortunately, he has today a longstanding engagement in the North and I am the poorer for not having his support. But the noble Lord was not the first proponent of the Bill. In another place a similar Bill was introduced under the Ten-Minute Rule by Dr. David Clark, supported by a prestigious all-party group, including Mr. Patrick Cormack, Mr. Selwyn Gummer, Mr. Peter Hardy, and Mr. David Alton. If the Bill gets through your Lordships' House, there is a strong all-party group prepared to sponsor it in another place.
I now turn to a brief description of the Bill. It covers beer, cider and carbonated soft drinks as bottled or contained in glass, metal or plastic containers. It does not include wine, jam, medicines, paper cartons or other kinds of cartons. It is a fairly limited Bill. Clause 1 lays down that every container shall have a refund value and shall be marked to that effect. Clause 3 provides for regulations for standardising the size and shape of bottles, so that they are widely interchangeable between bottles.
Clause 2 provides for standardised containers to have a lower deposit value than those not standardised, so that the initial price is lower and the public is encouraged to buy drinks in standardised bottles. There is a misprint in this clause, for which I apologise. The reference to "section 4(1)" should read "section 3(1)". If your Lordships give the Bill a Second Reading, we can amend that in Committee.
Clause 6 lays down that retailers and wholesalers shall accept containers and repay deposits. Clause 7 gives wholesalers and manufacturers the right to use a container returned to them, whether or not it was theirs in the first place. Clauses 4, 8 and 10 deal with penalties for infringement of the Bill when it becomes an Act, and of course these are matters suitable for amendment in Committee, should your Lordships so desire. Clauses 5 and 9 provide defences under the Bill. In particular, Clause 9(3) deals with a matter that has caused some worry: the prospect of the retailer who receives back many more bottles than he sells. In effect it gives him the right of refusal. Clause 11 is the definitions clause, and Clause 12 lays down the title and the jurisdiction of the Bill, and gives a year's grace before it comes into force. That, too, could be a matter for discussion in Committee, if your Lordships so wish.
The Bill will have beneficial results in three areas. It will considerably diminish the amount of dangerous litter in our towns and countryside. It will shift a part of the burden of dealing with waste from the public at large and public authorities to those who cause it, those who make, sell and buy the products. It will slow down the consumption of scarce resources. It is only the last of those three aims which generates serious opposition, and therefore I believe it is right that I should deal with it first. The objective is clear. In making bottles and tins we are using scarce resources, in terms of both the materials themselves and the energy used in manufacture. If we throw away the bottles and tins, the resources that went into them are lost, lost forever, unless in some future time, as is not entirely improbable, metal becomes so valuable that
576
our descendants go out and dig up the pits that we have so laboriously filled with what we call rubbish.
We can—and we now do to a small extent—try to save the basic materials by the use of bottle banks and proposed similar schemes for tins. But such schemes are as yet few in this country and are late. Only four or five years ago the industry which now opposes the Bill was saying that they were as financially impossible as they are now saying returnable containers are. But bottle banks are better than nothing, and we are indeed grateful to those who run and organise them.
However, even if spread very widely, they are only a minor palliative. They save some raw materials, but they save very little energy compared with the returnable bottle. The mandatory returnable bottle is by far the most economical container. Doubt has been thrown on some of the figures of the Friends of the Earth, and indeed some of the figures in its evidence and in the circulars that have gone to your Lordships might not be entirely accurate. That is merely because it is very difficult to arrive at accurate figures. But on the whole they are not far out, and the basic fact that the mandatory returnable bottle is the most economical container is included in the majority report of the Waste Management Advisory Council Packaging and Containers Working Party Study of Returnable and Non-returnable Containers, which from now on I shall call the WMAC report. It is from that report that I am going to quote.
Where in this speech and, I hope, in my reply at the end of the debate I refer to "the report", I am referring to the majority report accepted by the manufacturers and accepted by the consumers' representatives—unanimously accepted by the whole of the working party. I am doing this, not because I distrust the evidence produced by the Friends of the Earth, through their representatives, in the minority report—I do not distrust it at all—but because I believe my case can be completely made out of the report which is accepted by everyone.
The report says, in dealing with the particular matter of cheapness (I refer to chapter 3, paragraph 101):
"Returnable bottles achieve their relative cheapness despite higher labour costs on the filling line, higher delivery costs, the additional collection costs and higher retailing costs. The main reason for this relative cheapness is the trippage achieved by the bottle".
That is the main point; there is relative cheapness. This is the cheapest way.
The second argument which has been deployed against returnables is that this Bill will cause unemployment. It is said that it will cause unemployment in manufacturing industry. That is very regrettably true. But it is equally true that at least as many jobs will be created in distribution. The net result of passing this Bill, if American experience is anything to go by, will be a net growth in employment. In Michigan, after the passing of a similar Bill, there was a net gain of nearly 5,000 in employment.
The third argument comes from the supermarkets, which make great play with consumer choice. That comes ill, I think, from a set of traders of whom WMAC says, in chapter 3, paragraph 29:
"It does not appear that consumer attitudes have a great deal of influence on the decisions of retailers on the type of packs to be stocked".

577
According to the most recent survey, 40 per cent. of shoppers prefer to buy returnables against 35 per cent. who do not, and they cannot find that choice in the supermarkets. It is cant and humbug. What we are talking about is not consumer choice but costs and profits.
We are all in favour of profits—at least most of us are; I am not certain about some Members on the Labour Benches, but I think that on the whole most of us are in favour of profits—but only if the people making the profits pay their just costs. Mr. Taylor, of Tesco, is reported to have said that "supermarkets should not have to do society's dirty work for it". But it is the supermarkets' dirty work that society is having to do now. When the world and your Lordships were young, virtually all bottles were returnable, your Lordships may remember. But now more and more are not—and why? It is because supermarkets have realised that they can save space and labour by passing the disposal of their packaging on to society.
I have nothing against profits. Under this particular Tory capitalist Government they are rather rare, and certainly are to be encouraged. Nor have I anything against supermarkets. The noble Lord, Lord Sainsbury, makes a packet out of me every Friday as I buy the week's liquid refreshment—and very good it is. His French Red is the best "plonk" on the market, and I give him the benefit of that commercial now. But I do object to supermarkets not shouldering their own responsibilities. It is not, as the noble Lord, Lord Sainsbury, would know, as if they could not afford to do so, because the refuse to be collected by local authorities should in fact be drastically reduced. Not only does the throwing away of bottles and tins increase the work and expense of local councils; one of the problems is pressure on dumping space, which gets more and more expensive.
The post your Lordships have received and the time that I have given to these arguments—which your Lordships will be glad to hear is the main part of what I have to say on the Bill—might lead your Lordships to suppose that opinion in the country on this Bill was divided between, on the one hand, the Friends of the Earth and, on the other hand, industry. This is not so. The industry is far from united. The National Union of Licensed Victuallers support this Bill. I have had most valuable advice and information from one of the leading brewers in this country, who has given considerable assistance on this Bill. Also supporting this Bill, for reasons which will be obvious from the arguments that I am going to deploy in the next couple of minutes, are, for instance, the National Federation of Women's Institutes, who in fact run a voluntary returnable bottle scheme of their own of very high efficiency but are still in favour of a mandatory one; the Council for the Protection of Rural England; the National Association of Local Councils; the RSPCA, the British Paediatric Association; the National Playing Fields Association and numerous cycling bodies, local government bodies and very many individuals. Your Lordships may have had a large postbag on this matter; I have had a very large one indeed.
That leads me, finally, to come to the safety aspect. Bottles cause fires and injuries to man and beast. Tins, too, left about the countryside, as some of your Lordships will know, are capable of wounding; and
578
even plastics are a far from beneficial part of the diet of animals in our countryside. It is in this field that the Bill will do the most clearcut and incontestable good, for, here, bottle banks are no alleviation. The people who leave bottles and cans about our streets and bridleways are not going to take them to bottle banks, but they may return them for cash. It is here that the Oregon experiment was most successful, with its reduction of container litter by 84 per cent. In Michigan that was repeated, with 83 per cent. in the country and a staggering 95 per cent. in residential areas.
Many people hoped that all this might he done voluntarily. As a Liberal, I dislike compulsion heartily. But it cannot be done that way. The objects of this Bill, all of them worthwhile, can be achieved only if our habits are changed back to what they used to be before the advent of the throwaway society. As long as the situation is muddled, with no one knowing which bottles are returnable and who to take them to, returnable bottles will be largely ineffectual, as their opponents never cease from pointing out. But a Bill like this will increase the trippage of bottles from a measly four to a minimum of ten—and that is a very conservative figure—and that will be a great step forward. The plain fact is that the voluntary system does not really work. As so often, the good is the enemy of the best.
In closing, I would commend to your Lordships' attention the evidence submitted to Sub-committee G only last month by the Convention of Scottish Local Authorities on the subject of the proposed EEC directive.
"There will be difficulty",
they said,
"in getting the various interests to agree, and resistance is likely from the packaging industry in particular. The voluntary approach has not proved very successful and there are few grounds for expecting education to produce the desired results. Legislation will be necessary to overcome resistance and apathy".
This, my Lords, is the legislation. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Beaumont of Whitley.)
3.49 p.m.
Baroness Birk: My Lords, I want first to thank the noble Lord, Lord Beaumont, for explaining the Bill so clearly and so briefly. I should also like to say how much I am looking forward to hearing the maiden speech of the noble Earl, Lord Winchilsea and Nottingham. We are all aware that often a great deal of passion is engendered by imbibing the contents of many of these containers, but today we seem to be seeing—and I think we shall see it further during the course of this long debate—a lot of passion engendered by the containers themselves, which is rather a new departure. Unfortunately—and it has nothing to do with the passion—I shall be unable to stay for the whole debate, for which I ask the forgiveness of the House. I have a longstanding engagement and did not realise that such a number of speakers would be attracted to this debate. I think that I should say that, so far as these Benches are concerned, there will be a free vote, if there is a vote, on this measure so

579
that each one on this side will be speaking for himself or herself.
Whatever one thinks about the Bill, it is directed to the real problems that exist, the litter problem and the tremendous waste. We are an over-packaged, over-littered, over-careless society. People do not even use the baskets provided for them. When I was Minister at the Department of the Environment we had attractive baskets scattered throughout the Royal parks with beautifully designed notices in 12 different languages, only to find that people had distributed their empty bottles and other litter around the baskets as though that were another form of modern sculpture in the parks—which was not the objective. In a debate in this House on November 13th 1974 on the subject of war on waste—a debate to which I replied as Minister for the Department of the Environment—we discussed the setting up of the Waste Management Advisory Council. My noble friend Lady White will, I know, be referring to that when she comes to speak. I should like to quote something of what I then said in reply:
"The pollution that is man-made is something with which we should refuse to live. The health hazards of unrecovered waste are far-reaching and quite unacceptable. In fact, the whole moral, social and aesthetic reasons for protecting our country from the ravages of waste make the ecological case as important as the economic one in treating the war on waste as a high priority".—[Official Report, Vol. 354, col. 850; 13/11/74.]
Unfortunately, that was in 1974, but I think that those words, even if one restricts them to the specific area that we are discussing today, are just as relevant.
The noble Lord, Lord Beaumont, referred to the question of bottle banks. It is true that these are on the increase. I agree that they are an excellent idea but there are two problems. One is that, again, people do not always use them and, secondly, they would be used far more if they were situated in the car parks of the supermarkets. One of the answers to this, I know, will be that this means more use of cars; but since so many families now have a car, and often two cars, and people help one another with shopping, this should not be a great problem. Where there is the gap of the old people or those without vehicles, the voluntary effort will be able to fill that gap.
An even worse problem seems to me to be cans, which are worse than bottles. The mess and also the danger that they frequently create is enormous. Since large numbers need to be collected to make it economical to recycle, there must be a way found to get these containers back to be recycled; or—and here the Friends of the Earth made out a strong case on the economy and saving in energy—to get refilled those bottles that can be refilled. To do that, one needs a financial incentive, which is one of the good points that this Bill gives. Some bottles are not returnable; but it always puzzled me that one gets glass bottles that seem to he of identical quality, and we spend our time squinting to see whether this or that bottle is returnable. In that area, certainly, there could be much greater consistency. So far as plastic bottles are concerned, that is a problem. They are cheaper to produce and lighter, but there is no end product at all. I think this ought to be thrown back on to the industry, on to the manufacturers.
580
My Lords, it would be wrong not to look at the problems in the Bill. First, the time of one year to go over to any changes as drastic as these is unrealistic. Secondly, the economics need careful consideration. The consumer would probably have to pay a little more, but one must be sure that the customer does not pay much more. A small amount would be justifiable as a sort of tax in order to get a better looking and healthier environment. Another criticism brought up is the question of increased unemployment in the industries if the different clauses in this Bill were enacted. The answer is that there will be more employment in the reclamation industry, but again this needs careful timing and phasing, particularly when we are in a period of very high unemployment.
Under the Bill, no responsibility is put on the manufacturers of containers: the retailers and the wholesalers alone must accept responsibility. This seems to be wrong. The manufacturers surely must take their share of accountability for environmental damage created by containers. The other day in this House we were discussing hazardous waste and the recommendations on that by a Select Committee of your Lordships' House. One of the recommendations was that the polluter must pay. This is an area which has been left out of the Bill and which needs careful examination, financial examination, because local authorities cannot afford to undertake any work of this sort in a climate of local authority cuts. Imagine a referendum held by a local authority on whether to impose extra rates to deal with the costs of disposal of waste or empty bottles! I can guess immediately how the majority of people would vote. Voluntary effort cannot be expected to shoulder the growing burden.
The Earl of Onslow: My Lords, surely what happens now is that it is the local authorities who are clearing up. This Bill aims to get somebody else in to do the clearing up so that there will be no extra local authority unemployment.
Baroness Birk: My Lords, yes, but, first, I am not sure how it will work out. Secondly, my point is that it should be put back to the manufacturers rather than to the wholesalers and retailers; or to the manufacturers and then to the wholesalers and the retailers, who would not feel, as they now do, that they had to bear the whole brunt. This is where the main responsibility lies. The local authorities would have to come in in some way, because if there is neglect in their area then, in the same way that the waste disposal authority would have a function on hazardous waste, local authorities would have to have some sort of concern with this, even if it were only a watching brief.
In its present form, I do not think the Bill is the answer unless it has a certain amount of major surgery. If it is discussed in Committee, we might get the beginnings of a strategy to encourage reclamation on a proper, practical, economic basis. The noble Lord, Lord Beaumont, referred to the discussions on the EEC directive. I agree with him—and my noble friend Lady White no doubt will be referring to this—that it would have been better if the Bill had come after that Select Committee's report, but I do not believe that this extra challenge to the status quo is out of place. Anything that brings forward this subject and the

581
interest in it that has been raised today must be a good thing in the general theme that I hope all of us are concerned about.
I see discussion on this Bill as a vehicle to get much firmer and more positive agreed measures, with a legislative framework eventually to back them up. I also dislike compulsion where it is not necessary, or compulsion where you can get arrangements by voluntary means. In an area such as this, it seems to me to be imperative that something should be done. We have tried for years and years to work this on a voluntary method. Whether this Bill is the right method is for consideration, but something has to be done about the main problem.
In The Times today—I am sure most noble Lords will have seen it—in quite a long column on the Bill, they say:
"Yet the issue is serious, and Britain's laissez-faire approach is increasingly out of tune with the attitudes of other countries as they adopt measures against throwaway containers. In 1979, the British threw away 6,000 million glass containers, and 9,000 million cans".
What we need first of all is a code that would change practice over a period of time, and, whatever happens to this Bill, even with all its imperfections, it has attracted so much interest that it should be seen as a trigger to get some of the real action that is urgently needed in this field.
4.2 p.m.
The Duke of Portland: My Lords, the definition of "container" which is in the Bill now before your Lordships includes plastic bottles. The use of these is less advanced here than in many other countries and will certainly increase. Will the customer who has to pay more for his beverage by making a deposit on a plastic container not curse at having, in addition, to return useless receptacles which cannot be employed again? Will he or she show gratitude to the protagonists of this measure at the next election?
No one dislikes more than I do seeing the countryside strewn with squalid tins, glass and plastic bottles; but I wonder whether serious calculations have been made as to the extra cost to the nation which will be entailed if this Bill should become law. I would suggest to your Lordships that the objective of this Bill would be better attained by serious enforcement of anti-litter measures. If anti-litter notices were accompanied by details of fines that had been imposed for contravention, this might prove an effective deterrent. And let these fines take into account the depreciation of our currency and the cost of their enforcement.
4.3 p.m.
The Earl of Winchilsea and Nottingham: My Lords, in rising to support this Bill, introduced by my noble friend Lord Beaumont of Whitley, I crave the indulgence of the House. Briefly, I should like to bring to the attention of your Lordships similar legislation passed 10 years ago in the state of Oregon in the United States, and touch on the consequences of their bottle Bill on the environment, on manufacturers and on consumers. Oregon is approximately the same size as West Germany, with a resident population of about 2½ million but with an annual tourist influx of roughly 10 million. It contains some of the most
582
splendid scenery in the whole of that country.
Oregon may seem too remote to concern us here. But I have driven there and back twice from New York—once in 1963 and again earlier this year—and I believe their work in this field is conspicuously relevant. It may also seem a less important matter in the light of our fight against inflation, world recession and inner city decay. However, I believe attitudes about wastefulness and the environment are quite crucially basic in making human life worthwhile. The problems of litter were no worse in Oregon than anywhere else, but with limited resources local authorities were quite unable to cope with costs of collection, treatment and acquisition of land for disposal. In consequence, the beaches, parks, roads and all public places became intolerably littered. The state had always been sensitive to the environmental aspect for its own sake as well as for the importance of its tourist trade.
Action became imperative. The state began a reeducation programme for the general public. It was emphasised how expensive disposal was in cash, manpower and land, how wasteful non-returnable containers were and how appalling the ruination of Oregon's natural beauty had become. The public responded, and support grew rapidly, encouraged by the passing of laws in nearby British Columbia in 1970 prohibiting the sale of non-returnable bottles there.
Opposition came from the aluminium can manufacturers, breweries and the soft drink companies. The predictions were: a slump in beverage sales, rising prices, which would be passed on to the consumer, and further unemployemnt. What in fact happened was quite different. Oregon's bottle Bill was introduced 10 years ago. The Bill made the sale of non-returnable aluminium cans, glass and plastic beverage containers illegal, as well as those cans with a pull-off opening tab. The Bill also required returnable glass bottles to be of a uniform shape and size so as to be universally acceptable upon return. Two exceptions were allowed: those with a distinctive shape as an integral part of their advertising, and those which had brand names engraved or embossed on the glass. These two exceptions had to be returnable to their own companies.
To discourage littering, the Bill imposed a refundable deposit of 5 cents (2p) on beverage cans, and a 2 cents (1p) deposit on glass drink bottles, to be clearly marked on every one. In the Bill the state readily granted licences to anyone wishing to establish what they called redemption centres, providing they were placed conveniently, and displayed prominently the brands that they handled. During the passage of the Bill, citizens gave evidence at committee hearings. A move to delay the Bill was defeated. In neighbouring Washington State a company manufacturing drink cans had been successful in blocking the Bill. In October 1979, in the BBC Horizon programme, "Tracks on the Oregon Trail", the contrast was evident. Oregon's bottle Bill was passed comfortably in May, 1971, and came into effect in October, 1972.
In an independent survey carried out by Oregon State University one full year after the Bill came into effect, it was found that solid waste in the state had been reduced by an amazing 88 per cent., potentially reducing costs by 657,000 dollars. When this

583
figure was added to savings of 632,000 dollars for litter clean-up, a total of 1,289,000 dollars of Oregon public revenues had been saved. Profits of all industries directly affected by the bottle Bill were up collectively by 3,944,000 dollars. All related industries reported insignificant or no capital losses. Far from there being an increase in the unemployed, as was feared, the effects of the Bill showed an increase of 365 jobs. The total number of beverage containers littered along stretches of Oregon highways had been reduced by at least 92 per cent. In short, their conclusion was that the bottle Bill had worked in Oregon because it was economically practical to the beer and soft drink industries and because it was convenient to customers.
In conclusion, I should like to quote from the unsuccessful law suit brought by the American Can Company against the 56th Legislative Assembly in 1971. This is the summing-up from the presiding judge:
"This bold and forceful action taken by the 56th Legislative Assembly in 1971 reflects the concern that the citizens of Oregon feel about their environment and its pollution, the problems presented by roadside litter and the disposal of solid waste. The court would be ill-advised to interfere in any manner in this timely and necessary endeavour".
4.11 p.m.
Lord Sainsbury: My Lords, it is my privilege and very great pleasure to be the first to congratulate the noble Earl, Lord Winchilsea, on his maiden speech. I do not agree, and I do not expect he expected me to agree, with all the contents, but his manner and the way he presented his case I think we would all consider to be admirable. What is more—I know it is always said but it is really meant on this occasion—I hope the House will have the opportunity to hear him many times in the future.
I start by declaring an interest, due to the fact that the firm that bears my name would be considerably and adversely affected by this Bill were it to become law. I should like to say also that I speak with the full support of the retail consortium, which represents the whole field of retail distribution. Therefore, in opposing this Bill I am speaking for the small retailer as well as the large, and for the specialist off-licence as well as the multiple grocer. I believe that what I say is in the interest of the most important person, namely, the customer.
The underlying concern of this Bill is for the protection of the environment and the conservation of energy and raw materials—a concern which I share, as I am sure do all your Lordships, for this is not a party matter. What we must ask is whether this Bill will achieve anything worth while in view of the great restriction consumer choice would suffer and the commercial and industrial dislocation which would result.
The Bill is aimed at a particular aspect of the much wider problem of conservation. The subject of returnable beverage containers has attracted much attention over the past years in the United States and in Europe. The bottle Bills which have been introduced into certain states in America have raised a great deal of controversy. Incidentally, only a handful of states,
584
representing only 9 per cent. of the United States population, have introduced such Bills: the vast majority have not done so. These Bills have caused many distortions which have affected both consumers and commerce.
There may be some debate about the impact of such legislation, but in my opinion it would be quite wrong to presume that such laws could be transferred to the United Kingdom with any success, in view of our very different environment and consumption patterns. In tackling our own problems we should use the experience of other countries to develop solutions most suited to our particular circumstances, and thus hope to avoid most of the confusion and pitfalls encountered by others. One of the main reasons for the introduction of these Bills was to reduce litter, but in this country at least that is not such a major problem, due partly to the success of the "Keep Britain Tidy" campaign.
In the United Kingdom returnable bottle systems have been the subject of detailed study by the Waste Management Advisory Council, which has already been referred to and which produced a series of very sensible and practical recommendations. I think it would be very useful for this House to have a debate on the issues raised in that report and on its conclusions. I am much less happy having a debate on this particular Bill since to a large extent it ignores the conclusions of that report.
It is also unfortunate, as has already been mentioned, that the debate is taking place before the report by the Select Committee of the European Communities on a Commission proposal for a Council directive on containers of liquids for human consumption. Although this draft directive still has certain undesirable features, even in its latest revised form it does not go as far as this Bill. This Bill is partial and restrictive: it is described as a "Beverage Containers Bill" but it discriminates against a narrow product range. It is restrictive because it will inevitably limit consumer choice; it is restrictive because it will hamper the development of ever more economic and energy-efficient packaging materials; it is restrictive because it would cause enormous upheaval in the current distribution system and would run counter to the progress made in the distribution methods and the marketing of beverages in recent years.
I will leave it to others to deal with the energy equation. The Waste Management Advisory Council concluded that even with a completely returnable system the benefit would be relatively small and, to quote—
"insufficient justification for a measure which would have adverse effects on the industries concerned, particularly in the short term, and which would seriously restrict consumer choice".
I should now like to dwell on a few of the practical problems which the retail trade would face. Neither the supermarket nor the off-licence trade have the ability to receive back as many containers as they sell. The consequence of having to do so would mean reducing the range of products available to the consumer. In recent years, the range and variety of all kinds of beverages has increased considerably, to the benefit of the consumer. Why should consumer choice be restricted to provide space for returnable containers? There would be real problems in the handling of vast amounts of containers that would be returned.

585
A number of your Lordships were shown a film—a rather different film from the one referred to by the noble Earl—showing how United States retailers were having to cope with the mountains of cans and bottles, causing problems for the health and safety of workers; for example, broken glass. There would also be the practical problems of loading, access to stores and increased transportation. These are factors that would affect every shopper and they should not be dismissed as merely the viewpoint of a vested interest. The trade is in no way opposed to returnable bottles as such. Where there is a demand, that demand is being met. For a variety of social and economic reasons, there has been a move to non-returnable containers over the last few years. I do not see why this process, and the benefits that it has brought to customers, should be arbitrarily restricted.
Finally, may I say how I think this subject should be tackled? If there are advantages to be found in recycling materials for beverage containers, how much greater would that advantage be if all cans and bottles were involved? A deposit system is not an essential element of the recovery of waste materials. Nobody is suggesting that there should be a deposit on a can of soup or a bottle of pickles, yet these also can be recovered. Voluntary measures for collection and recycling are being developed, with the direct encouragement of retailers, local authorities and glass and can manufacturers. Our experience in recycling is increasing, and the techniques for the separation of waste are improving to allow the recovery of an ever-greater proportion of waste.
I believe that this is the way forward, not just for the beverage sector but for industry in general. Let the sponsors of this Bill concentrate on more practical and worthwhile solutions to energy and environmental problems. Then they can be assured of the support of all of us. Meanwhile, I ask your Lordships to oppose this Bill.
4.25 p.m.
Lord Strabolgi: My Lords, as the first speaker from these Benches to follow the noble Earl, Lord Winchilsea and Nottingham, I should like to congratulate him most warmly on his maiden speech. I am sorry that on this occasion I cannot be in agreement with him. Nevertheless, I listened to his speech with interest and congratulate him on the moderate way in which he advanced his case. I hope that the next time he speaks in your Lordships' House—which I trust will he soon—we shall be on the same side.
I must say that I agree very strongly with what was said by my noble friend Lord Sainsbury, with all his great wealth of experience, because, although the Bill is, no doubt, well meaning—and we are grateful to the noble Lord, Lord Beaumont of Whitley, for explaining its provisions—in my judgment it is quite unworkable. It is strongly opposed, as has been said, by many trade and industrial organisations, by the Consumers' Association and by the General and Municipal Workers' Union, who are particularly worried about its effect on employment. I shall not go into that in any detail, because my noble friend Lord Cooper of Stockton Heath will describe the Bill's effects on employment in industries where there is already heavy unemployment.
586
In addition, the Waste Management Advisory Council, in their report, recommended against Government intervention in this market, although their report was in favour of a voluntary effort, and this I support. The WMAC study showed that the energy saving that would be achieved by a switch to an all-returnable system would be very small, since the total energy used by all the beverage systems represents only about 0·6 per cent. of national consumption. The council considered that the small benefits of such a ban are not sufficient justification for a far-reaching measure such as this Bill—a measure which would have adverse effects on the industries concerned and would seriously restrict consumer choice, as my noble friend Lord Sainsbury has said—
Lord Melchett: My Lords, I wonder whether I may just ask my noble friend something? He quoted that as being the view of the Waste Management Advisory Council. I think I am right in saying that it was a report of a working group of the council and was not actually considered by the council itself. I am sure that my noble friend would not want to mislead the House by suggesting that it had been.
Lord Strabolgi: My Lords, I am grateful to my noble friend for his correction. I do not think that it in any way invalidates the argument I was putting—
Viscount Caldecote: My Lords, may I raise a point on the same subject? Is it not a fact that the membership of that working party was composed entirely of members from industry, except one? Is the noble Lord not aware, also, that most measures which are intended to prevent pollution are opposed by industry, however desirable they may be? It was not surprising, therefore, that the conclusions of the WMAC came out as they did.
Lord Strabolgi: My Lords, I take note of what the noble Viscount has said. Under Clause 6—and this has not been mentioned before—the retailer would be obliged, under threat of severe penalties under Clause 4, to accept back and pay the refund value of any empty container of a type sold by him as defined in Clause 11—not the actual container sold by him, but any container of a type sold by him. Small local traders would be obliged to take back all containers, even ones purchased from distant supermarkets. How are some of the smaller shops to find the storage space? My noble friend Lord Sainsbury mentioned the film that has been seen by some of your Lordships in the EEC Committee, showing the effects of such legislation in the State of Michigan.
The supermarkets would be compelled to use valuable selling space to store empties and, unless there are to be long delays to shoppers, more tills and staff to man them would be required at check-outs to cope with returnables. There is also the hygiene problem of storing dirty empties in food stores. Also, why should beverage containers be singled out from packaging as a whole for special mandatory control? I must remind your Lordships that, since a returnable bottle uses more resources as it is heavier, more resources are consumed by using a returnable type bottle that does not get returned than would be consumed if a

587
non-returnable bottle were used instead. There is also a disproportionately high energy cost of having to run a returnable system in unsuitable outlets.
The advocates of the Bill presuppose a fundamental change in consumer habits and that, for example, returnable bottles would gain some 80 per cent. of the market almost overnight as a result of the noble Lord's Bill. But in the United States (this was mentioned by the noble Earl, Lord Winchilsea and Nottingham, and I am sorry that he is not in his place) in the six states that run a mandatory deposit system it has been found that prices increased from 10 to 20 per cent.—and 38 per cent. if the deposit is included—but that sales were reduced and that there was a smaller consumer choice of brands. Is it surprising that 44 states have rejected deposit legislation, 31 of these states as recently as 1980? The noble Earl mentioned Oregon. However, it has been found that Washington State's voluntary recycling and education programme has been in effect as long as Oregon's law, and that after four years the total litter was reduced by 66 per cent. In the United States I believe that it has been proved cheaper, more effective and less discriminatory to control litter through education and voluntary recycling than through forced container deposit legislation.
Lord Melchett: My Lords, I am sorry to interrupt my noble friend again. However, he said that it has been found that it is more effective to contain litter and he quoted a reduction of around 60 per cent. in Washington compared with the over 80 per cent. figure mentioned by the noble Earl. Is he suggesting that a 60 per cent. reduction is better than an 80 per cent. reduction?
Lord Strabolgi: My Lords, one can always make figures mean what one wants them to mean. However, I am not sure that the extra amount really justifies the kind of mandatory and draconian legislation advocated by the supporters of this Bill. It was because of the bad effect on prices and employment that a couple of years ago the President's Resources Conservation Committee decided not to recommend a federal deposit law for the United States. I may say in passing that Clause 10, which requires a conviction against an off-licence retailer to be entered on the register of licences, under the provisions of the Licensing Act, is, to my mind, utterly unacceptable.
Under Clause 3, the Secretary of State shall make regulations for the standardisation of containers. But an agreement on common standards would be difficult to reach and would have a great effect on production lines, particularly for the losers. Bottle shapes and embossed symbols are often part of a product's trade mark—for example, with Scotch whisky. Scotch whisky, one of our leading exports, has, I believe, about 150 brands. Why should all have to be supplied in the same shaped bottle? The bottle's shape is surely part of the brand image and is used for recognition purposes.
Baroness White: My Lords, I apologise for interrupting the noble Lord, but I think he will appreciate that this Bill does not deal with the drinks to which he has referred.
Lord Strabolgi: My Lords, the noble Lord, Lord Beaumont of Whitley, said that his Bill was only the beginning of what he would like to see as an all-embracing system. Clause 11, the definition clause, says:
"'beverage' means beer, ale or other drink produced by fermenting malt, cider, perry or carbonated soft drinks …".
Malt whisky, of course, is a very important type of whisky.
I must make clear that I am not against all returnable systems. The returnable system works well when the bottle has to travel a direct journey between the supplier and the point of consumption—for example, the journey between a public house and the brewer. And, of course, in the case of doorstep milk deliveries the system works very well. But for most other situations I believe that the glass recycling system through bottle banks is much the most practicable. Here I must declare an interest since I am associated in a professional capacity with the Glass Manufacturers' Federation, and I am very proud to say so. But no one has asked me to speak. I speak only for myself.
Bottle banks collect all glass containers, not just those beverage containers covered by the Bill. I understand that beverage containers represent only one-sixth of all the food and drink containers returned through bottle banks. By 1984, the British glass container industry will have spent £5 million on developing the scheme and aims by then to be recycling at the rate of 250,000 tonnes of glass a year. The scheme already operates in about 250 towns and cities and it is used by approximately 2 million people.
I am glad to note that the Association of County Councils supports recycling and has asked the Government to take a more positive approach to this. The report of the Waste Management Advisory Council Working Party concluded that recycling bottles rather than manufacturing them from raw materials reduces energy consumption by 40 per cent: 20 per cent. is saved in the furnaces, because old glass is easier to melt than raw materials, and 20 per cent. is saved on the supply of the raw materials themselves.
What we need to do, I suggest, is to increase the recycling system for glass and also for other containers, such as cans, the recycling of which is also being expanded. I must mention here one point that was raised by the noble Lord, Lord Beaumont of Whitley. He said that the glass industry has been very reluctant to enter into the bottle bank scheme because of the expense involved. My information is that any delay was caused by technical problems and that it was not a question of expense. It is a great advantage to the glass manufacturer to get back as much cullet as he can. I am sure that recycling, combined with the voluntary returnable system—here I am at one with the noble Lord—where practicable is the answer to the problem of conserving our resources. In a recent survey by the GMF, carried out by an independent market research company, it was found that 72 per cent. of the adult population prefer non-returnable containers and that 85 per cent. want the right to exercise consumer choice.
As I said at the outset, I think that this Bill is well meaning. However, some of its implications do not appear to have been understood by its advocates. Surely voluntary agreements are preferable to this

589
kind of unworkable and draconian legislation. I hope that the House, if it comes to a Division, will reject it. I shall certainly vote against it.
4.38 p.m.
Lord Craigton: My Lords, I, too, must add my congratulations to the noble Earl on his maiden speech. He gave your Lordships the facts, which your Lordships always like, though I do not think I could agree—as, indeed, the noble Lord, Lord Sainsbury, could not—with the conclusions which he drew from them.
I applaud the intentions of this Bill in so far as it helps to reduce pollution. My noble friend the Duke of Portland referred to littering the countryside with squalid tins, glass and plastic bottles. That is what this Bill attempts to deal with. I live on the banks of the Thames. Day after day the subjects to which this Bill is directed sail proudly by, holding their heads high. But I also have a backwater. So many of these containers arrive in my backwater that I have a special wire scoop on the end of a stick to pick them out and put in my own dustbins. Therefore I have personal experience of the need for a Bill and the value that this Bill would have if it had greater scope.
It is limited to beverages. I presume that it does not include cooking oil and vinegar. But why not? They are in my backwater, too, and other kitchen supplies as well—detergents, bleach, disinfectant, bathroom shampoo. All these are there and still, as the last speaker said, it is only a fraction of the pollution that we endure. There are plastic bags and plastic sacks. Later on this year the river will rise and when it rises there will be in the flow a large number of plastic bags and plastic sacks of all colours and shapes, and containers will be caught on the branches. When the river goes down and the public use the river again one will be faced all along, on both sides, with the new green shoots coming out amid a litter of plastic bags. Surely there is something we must do to help.
I have received representations from 26 trade associations. They are all aware that their packaging pollutes to a greater or lesser extent. They are all trying to do something about it, and some with greater success than others. All are in favour of the principles of the Bill and all are opposed to helping these principles in this way. All are opposed to the need for this Bill at this time, primarily in view of the recommendations of the Waste Management Advisory Committee, which, after three years of study, has, as many of your Lordships have already said, rejected mandatory deposits.
I have read the minority report of the Friends of the Earth. It is impressive. I disagree with it in so far as I can. I under stand that the figures in that report were not given to the Waste Management Advisory Committee for consideration. I do not quarrel with the conclusion that they drew from the figures; I just do not agree with it. I am not satisfied that the prices would not go up and that the purchaser would not have to pay for this. I quote in aid Point 9 of the circular of the noble Lord, Lord Beaumont, where he says, "It is expensive for the supermarket", and then he replies, "Yes, the costs are being allocated to those who cause them". That means that the housewife will have to pay more; it can mean nothing less. So I am satisfied
590
for these reasons that this Beverage Containers Bill should not single out one type of packaging. It is a far wider range that should be dealt with.
So, one criticises the Bill: what is the answer? The plastic containers will not go away until we find an answer. There is an example in the voluntary control of pesticides. There, we have an industry that, instead of legislation, took voluntary action to control the pesticides, with the result that the wild animals—the moles and the voles—are coming back and the predators too are coming back, and are we not glad to see them? If 26 trade associations—and how many firms that represents I can hardly begin to think—can combine to fight the Bill, could they perhaps combine to reduce pollution? I give them a suggestion: if they were all to get together, could they not have a joint attempt, on the labels or elsewhere, to give the empty container a —shall we say?—"personality" of its own with various slogans, such as, "I am worth saving"; "Save me for scrap"; "I belong to your dustbin"; "Finished? Then bank me"; "I am ugly as litter, I am beautiful as scrap". I give those suggestions to the 26 trade associations at no fee at all. There is much that they could do.
So there are three things that could be done: the first is public education, as the noble Lord, Lord Strabolgi, said, and the industry should consider that it has a far greater obligation than it considers itself to have now. Secondly, the Government themselves should bring into force Section 24 of the Control of Pollution Act 1974. I quote Hansard of last Tuesday, in which the noble Lord, Lord Ashby, in the debate on Hazardous Waste Disposal, said:
"We are already being criticised by our Common Market partners for failure to implement parts of the Control of Pollution Act".—(Official Report, 17/11/81; col. 443.)
So there is something that the Government can do to help, and I hope that the Minister will tell your Lordships whether anything is being done about it. The matter has now been brought up in this House twice in the same week, and perhaps the noble Earl will tell us whether anything can be done. Secondly, all concerned can improve the collection and recycling. I agree that much is being done, but I am sure that more could be done. Thirdly, the trade itself should continue with greater keenness the technical work that they are already doing on bringing in lighter and more easily destroyed containers. It is only when that is done and when the public begin to understand and appreciate the value to themselves and to the countryside of the proper disposal of litter that we shall start to see any results.
So, I congratulate the noble Lord on his Bill for two reasons: first, because I see it as a lever to force the Government to activate Section 24, which, like the plastic containers, has itself been lying untouched for eight years, and, secondly, in the hope that this Bill and this debate will persuade the industry to do more for itself in educating the public.
4.47 p.m.
Lord Cooper of Stockton Heath: My Lords, may I first share in the privilege of congratulating the noble Earl, Lord Winchilsea and Nottingham, on his maiden speech. I am sorry he is not at the moment in his

591
place but I am sure that we all found it a most interesting maiden speech. He had taken great trouble in its preparation and I think we can safely say that we look forward to hearing from him on future occasions.
My remarks in this debate will be very brief indeed. The discussion so far has already indicated that the Bill has serious limitations. While understanding the need for conservation of resources and the aim of general tidiness in our nation, we ask, is this the best way? I feel that it is not. Much has already been done by experimentation, especially by the glass container industry. The organisation has been mentioned several times but the bottle bank scheme only started in 1977 and there are now 256 towns and cities currently operating this scheme and 545 special bottle bank sites are in use. It is expected that by 1984 the glass container section of the glass industry will have spent £5 million on developing the scheme, and as has already been said, recycling will he running at the rate of 250,000 tonnes a year.
The sponsors of this scheme, the Glass Manufacturers' Association, say that in their experience recycling, even on its limited development so far, saves energy, raw materials and money and has none of the adverse effects on employment, prices and consumer choice that the proposed measure would bring.
My particular concern is the effect of the provisions of this Bill on employment. The majority of the workers in the glass bottle section of the industry are members of the General and Municipal Workers' Union, and I know that over a lifetime our relationships, with one or two exceptions, have been extremely good. We have a substantial membership in this industry and also in metal containers, and in the supply industries of steel and aluminium. The union is utterly opposed to the Bill, believing it to be misguided, impractical and highly damaging to the job security of its members.
On the question of the employment effects of the Bill there is general agreement that it will lead to a loss of jobs. That has been said this afternoon by those supporting the Bill. Disagreement exists only on the numbers likely to be involved.
Lord Beaumont of Whitley: My Lords, I am sure the noble Lord would not want to give a wrong impression. There is general agreement that it will cause some unemployment in the manufacturing industry, but over all there is absolutely no doubt that it causes no unemployment whatever. It balances out; if anything, it causes more employment. That is the experience in America and is shown in the figures which are accepted in England.
Lord Cooper of Stockton Heath: My Lords, these points are arguable. We do not have the data in front of us. Even what was said in the maiden speech about Oregon drew a picture which differs from pictures I have seen. But the promoters of the Bill estimate a loss of about 5,000 jobs.
Lord Melchett: My Lords, my noble friend has just repeated, if I heard him correctly, that the proponents of the Bill suggest a loss of 5,000 jobs. That simply is not the case. The proponents of the Bill—and I am one of them—suggest that the Bill will lead to an increase in the total number of jobs.
Lord Cooper of Stockton Heath: My Lords, it is this tortuous language which has been used. It has been said that there will be a loss on the manufacturing side, and the argument is that compensatory labour will be needed on the other side. That is what I say is a question to be argued about. I repeat, the Waste Management Advisory Council estimate the number of jobs at risk to be almost 9,000. These are highly skilled workers. The beverage container industry, a very sensitive industry, has been seriously hit by the recent industrial recession. This is a very worrying picture. In the last two years 4,000 jobs of skilled men have gone out of this industry, and a further 1,000 are threatened. Not only would jobs be put at risk, but because of the geographical distribution of the glass manufacturing industry the impact would take place where unemployment is already extremely heavy. For example, all these towns are glass bottle towns: St. Helens, 17 per cent. unemployment; Barnsley, 14·6 per cent., Castleford, 12·9 per cent.; Doncaster, 16·4 per cent.; Mexborough, 21·5 per cent.; Chatham, 14·5 per cent., and the Lowlands of Scotland, 15 per cent. All those are double figures. I suggest that the fears expressed about this Bill are well-founded, and I hope the Bill will be rejected.
4.54 p.m.
Baroness White: My Lords, for reasons which I shall make plain in a moment, I am very much restricted in my comments on this Bill, but I think I should say a few words because I believe I am the only Member of your Lordships' House who was a member of the late lamented Waste Management Advisory Council. I would confirm what my noble friend Lord Melchett has said; to the best of my recollection the report which has been referred to by so many of your Lordships already, and no doubt will be referred to subsequently, never came before the full council. It was a working group set up by the council. I felt that it was perhaps slightly reprehensible that, so far as I can find in this report, there is no indication that the report never came before the full council. The full council, as the noble Earl, Lord Avon, may know, was of course in limbo for a very long period before it was ultimately executed.
Lord Craigton: My Lords, the noble Baroness is bringing up a point of which I am quite unaware. I always took it that it was the working party because the heading here is "Waste Management Advisory Council; Packaging and Containers Working Party".
Baroness White: My Lords, with respect, we regarded the working party when it was established as a subsidiary of the main council. Normally when a subcommittee or a working group is set up its report is submitted to the body responsible for its establishment. The main council never had any opportunity of commenting on this report. One could envisage circumstances in which one might have suggested that parts of the report be referred back for further consideration. I am not saying they would have been; all I am saying is that there was no opportunity so to do. As a member of the full council, I felt that it was only proper that I should make this position clear. There was one quite admirable member of the full council,

593
Mrs. Graham, who was the chairman of the working party
Lord Craigton: My Lords—
Baroness White: If the noble Lord—I was almost going to call him "my noble friend" but he obviously is not—
Lord Craigton: The appendix gives the members of the working party. When I saw the noble Baroness's name on the list I said to myself, "Why is she interested?" I looked at the appendix and her name was not there, so I took it that she was not interested in this report.
Baroness White: Not at all, my Lords; I was most interested. I had no opportunity of making that interest effective, as I might very well have done had the opportunity been offered. Those who are perhaps a little better informed than the noble Lord, Lord Craigton, of what really happened about the Waste Management Advisory Council will appreciate that, under the current Administration, we were left with no communication whatever for nearly two years, not knowing whether we were still active or had been abolished. As the noble Earl may know, I complained to some of his ministerial colleagues. Ultimately, after very long period of complete inactivity in which we had no explanation at all, we had the usual polite note telling us that our services were no longer required and that the Waste Management Advisory Council had ceased to exist. I think it is only right that the House and the public should have their attention drawn to that position.
As those who have obviously studied the text so closely as the noble Lord, Lord Craigton, will be aware, this report was published in 1981; and the last meeting of the council—which, as it happened, I chaired because the two Ministers concerned were not able to be present—was held in the summer of 1979. This report was published in 1981 by Her Majesty's Stationery Office for the Departments of Environment and Industry as part of the national anti-waste programme. Possibly the noble Earl will take this opportunity of telling us what has happened to the anti-waste programme.
The noble Lord, Lord Craigton, mentioned the appropriate section of the Control of Pollution Act 1974, which refers to litter, which has never been implemented. That might have been regarded as part of the anti-waste programme. I would be very interested to know exactly how the Government are at present conducting the national anti-waste programme, of which the matter dealt with in the Bill presented by the noble Lord, Lord Beaumont of Whitley, could be regarded as part. I am not at the moment commenting on the merits or demerits of the Bill before us, but that it has something to do with anti-waste I think is clear to anyone. So I am offering the noble Earl the opportunity to inform the public, whether or not they agree with this particular measure before us today, and what progress is being made with the general anti-waste programme, for which we had supposed the Waste Management Advisory Council had some minor responsibility.
594
I have quite a different reason for feeling that it would be improper for me to take part in a debate on the merits of the Bill: namely, that I am the Chairman of the Select Committee on the European Communities and, as such, feel that I have certain inhibitions. The noble Earl, Lord Cranbrook, is unable to be present today. However, he is chairman of the sub-committee to which the relevant draft directive from the European Communities has been referred. That deals, in not precisely the same terms as the Bill before us today but in very similar terms, with the problem of returnable beverage containers. It would seem to me, therefore, that it would not be proper for me, much thwarted as I feel, to comment on the merits of the Bill while we are yet awaiting the full examination of the draft directive and the report which no doubt in due course we shall he presenting to your Lordships' House. That is the only reason why I am not proposing to enter into a debate on the merits of the case.
We have not been dilatory in this matter and the noble Lord, Lord Beaumont of Whitley, knows that we did, in fact, seek to persuade him further to postpone his own endeavours. For reasons which I think we can entirely appreciate, even if we do not perhaps agree with them, the noble Lord has felt it necessary to proceed with his own propositions. However, it is unfortunate, I think one might fairly say, that we are being asked to consider this Bill without having a report available from your Lordships' Select Committee on a matter which is very much germane to the subject which we are discussing. It is for that reason, and that reason only, that I shall have to draw my remarks to a close, although I cannot resist saying to my, in other respects, dear friend Lord Sainsbury, that he really should not allow himself to be deluded on the matter of litter in this country.
5.2 p.m.
Lord Somers: My Lords, I support this Bill with certain reservations because I feel that it will do a definite job in reducing litter, which is one of the greatest evils in our country. I am sorry that the noble Baroness, Lady Birk, is not here and I hope that she will forgive me—I am sure that she will—if I quote what she said. When the noble Baroness said that we are an extremely untidy and litter-producing nation I thought that she was making a great understatement. When we get into public places I would describe us as a downright filthy and disgusting nation. The revolting amount of litter that one sees in public places nowadays is gradually becoming almost unbearable and I think that possibly this has chiefly been the case since children have ceased to be taught that tidiness is a virtue; that, of course, is unfashionable nowadays.
I rather disagree with the noble Baroness, Lady Birk, about the question of manufacturers and retailers being made responsible for the application or for the enforcement of litter regulations, because that does not enter this Bill at all. This Bill is not dealing specifically with litter, although it is certainly producing one means of abating it; it is dealing principally just with the return of containers.
One of the first questions which arises is what containers shall be returned. I think that those listed in Clause 11 are a little limited. Although I have never

595
tasted it, I understand that Coca-Cola would count as a carbonated soft drink. I am very glad indeed about that because, although one cannot say that it is a harmful drink, I should have thought that it certainly produced more litter, especially on station platforms, than anything else.
As to the question of the types of container, I would point out that plastic is of course a very serious source of litter. It is cheap for the manufacturers to produce, but it is not soluble, and therefore it does not disappear when it is thrown into the countryside, as we have heard from the noble Lord, Lord Craigton. I should like to know whether a mug with a top and a straw sticking through it constitutes a bottle. One sees innumerable specimens of that type of thing particularly littered about railway stations. I should have thought that the word "containers" should be slightly enlarged. On the other hand, if we are going to put a charge on a container like that, it seems to me that it is really rather absurd for any child buying a mug of Coca-Cola to feel that he must take it back in order to receive tuppence in exchange. Quite frankly, I do not think that he would bother; he would rather go without the tuppence. Therefore, how is one to enforce that sort of proposal?
I come now to the question of returning altogether. I see that the Bill provides that containers shall be returned to any retailer who provides containers of a similar type. That does not necessarily mean that they shall be returned to the retailer from whom one bought the container; it simply means a retailer who sells containers of that kind. But a busy housewife really has not the time to go round looking for various places which will accept her returns. I should have thought that a much more practical way would be for the local council to provide a depot which would receive all returnable containers and make the appropriate refunds. Such depots could be situated in a central part or several central parts of the shopping area, where they would be much more accessible and much more practical for the average housewife.
It is not surprising, of course, that the Glass Manufacturers' Federation should be among the chief opponents of the Bill. Obviously they feel that it will trike against their interests. However, I think thats they are worrying unduly because, after all, bottles for beverages—to use that horrible word—are not the only items made of glass. I feel sure that the recycling which the noble Lord, Lord Strabolgi, mentioned will make up for any loss which they may sustain in the actual sale of bottles made from raw materials. There are so many other items that are made of glass—for example, glass jars which are not used for beverages at all but merely for other forms of food. I have two of them standing on my table every morning at breakfast time. There are hundreds of foods that are sold in glass jars. I should have thought that those would certainly make up for any loss that the federation might sustain through this Bill.
Therefore, I do not think that there is anything in the Bill whatever that cannot be put right at the Committee stage. There are a few items that may come up for alteration but until then I sincerely hope that your Lordships will give this Bill a Second Reading.
5.9 p.m.
The Earl of Onslow: My Lords, I would refer your Lordships to an article in the New York Times of May this year headed:
"Returnable-container laws cost thousands of jobs".
I see that other noble Lords have been given the same piece of paper as I have. It says:
"While there has been a relatively small number of jobs lost in factories that make bottles and cans, these have been greatly offset by new employment in transportation, recycling, and warehousing. Michigan had a net gain of 4,600 jobs. Maine, sparsely populated, gained 626 jobs, many in the recycling business, whose growth has surprised even the bottle-bill proponents".
I am sure that that one paragraph sets at rest the very justifiable doubts of the noble Lord, Lord Cooper, about unemployment. It is something which, whenever we legislate or debate, we should always have in the forefront of our minds. I have no reason to believe that that piece of information was invented by the editor of the New York Times; they have other things to invent, and I suspect they do, but that is another story altogether.
I suspect very strongly that the Government may be tempted to say that we should wait for Sub-Committee G and the EEC directive. I hope that they will not. So much is known on the subject. The OECD report, which I have, cites in evidence the following papers: two Australian, five Canadian, one each from Denmark, Finland, Japan and Norway, four French, four German, 10 Dutch, seven Swedish, six Swiss, 36 United Kingdom, and the Americans have beaten the lot with 38 pieces of paper on this subject—we hope that it is all printed on recycled paper, but I doubt it—plus four EEC reports to go with it. In the words of Professor Pearce, who is an expert from Aberdeen University, there is an immense amount of United States literature. Jonathan Fisher—who used to be a research fellow at Leicester University and who is now an administrator in OECD—who helped to write the report, wrote to me saying:
"I sorted out a limited selection for you but it came to a foot high".
So he just enclosed a list. Mrs. Susan Spence, who did a great deal of work on this report, said to me only this morning that all the information is known; that it is time economists found something else to do, like measuring the public sector borrowing requirement.
Could it be that the Metal Box Company and the Glass Manufacturers' Federation and all those trade associations—all 36 of them—which have approached the noble Lord, Lord Craigton, have been bending the ears of Ministers? When probably the best known carbonated beverage manufacturer—is not the cliché lovely? there are many more in the reports too—introduced the no-deposit bottle, one of their senior executives admitted that it was a hidden price rise.
The OECD and all the authoritative reports that I have seen have shown that energy is saved, and that costs are lowered. In a consumer survey in Leicester it has been shown that the English are inclined to return fewer bottles than most others. On analysis the reasons became very clear. Fifty per cent. of customers who did not return their bottles said that the bottles were not clearly labelled "returnable", so they did not know that they were returnable. Some

597
of the retail shops who had sold children bottles of whatever it was that went fizz and did something bad to their teeth, told the children that they were only allowed to buy something else with the deposit; in other words, the children were not given the money back, it was only credit towards other goods. Ninety-three point five per cent. of the people in the survey did not know what the deposit was.
All of this will be changed by the Bill. Jonathan Fisher, who I quoted earlier and who is a great expert in this field, has shown that in 1977 519,400 tonnes of solid waste were generated by carbonated beverage containers. In 1977 these containers constituted a horrifying 27 to 29 per cent. of the volume of litter, and that figure was forecast to rise. It is calculated that the implementation of mandatory deposit legislation would save £3·8 million a year. I know that £3·8 million a year is not very much in a total public spend of £70,000 million, but judging by how much my right honourable friend the Prime Minister is trying to squeeze tiny savings out of every spending department, surely even £3·8 million is worth saving.
The noble Earl, Lord Winchilsea, in his excellent discourse on the Oregon bottle law, has shown what happens; namely, a significant reduction in the number of littered bottles and cans. He also pointed out the other beneficial effects. Yes, there are considerable savings to be made from the returnable bottles—savings from litter waste disposal and waste of energy and resources, which are variable according to energy costs and the estimated value of the resource concerned.
But it all depends on the number of times the bottle is refilled. This, in the words of the beverage container industry, is called "trippage"—that is another of these lovely words that appear in these reports. In England the present trippage rate is fairly low because of the reasons I outlined earlier on the Leicester survey. The higher the trippage, the cheaper it becomes; but the trippage rate depends on the ease with which the consumer can return the bottle and the incentive—that is, the size of deposit. This means that retailers of these drinks shall be bound to accept any bottle, not just those that they have sold, and that the deposit must be high enough to be an incentive.
If it is said that this will increase the price to the consumer, I shall now return to this lovely piece of paper, which is so simple to read, unlike all those other reports on trippage and aerated beverage containers, et cetera. It says:
"Returnable-container laws significantly raise beer and soda prices. While opponents claim that prices will rise by 25 per cent. or more, the best available data from states with returnable-container laws show that an increase of one or two cents, if that much, per 12-ounce bottle is the actual cost to consumers. After Vermont passed a bottle bill, the price spread between beer bought there and in neighbouring New Hampshire, which doesn't require a deposit, decreased. A quart of soda went from costing a nickel more in Vermont to a nickel less. Furthermore, any increase in the price of beverages that may result is offset by a drop in municipal costs of collecting solid waste".
I heartily support this Bill, which should make our countryside, parks and streets a cleaner and safer place. Incidentally, the damage that can be caused by broken glass to children, dogs, horses and other animals is very marked indeed and very nasty. According to the senior executive from that beverage company the name of which one is not quoting, the Bill should provide the consumer with cheaper drinks and raise
598
from off the shoulders of local authorities the task of cleaning up the mess which can be directly attributed to others who are well able to look after it themselves.
5.17 p.m.
Lord Jacques: My Lords, I rise to oppose the Second Reading of this Bill. The Bill seeks to make it an offence to sell a beverage which is not contained in a refundable container, and it obliges the retailer to make the refund. It applies not only to glass but to plastics and to metal containers, although the latter two cannot be re-used and there are known problems in regard to re-cycling.
First, I should like to deal with trippage, because trippage is a subject on which I have had long experience at first hand. Trippage is simply the number of trips that is made by a returnable container; or, to put it another way, the number of times that the bottle or other kind of container is used. My experience is that a deposit is not a material factor in whether or not you get a high or low trippage. By far the most influential factor in determining the trippage of containers is the distance between the seller and the place of consumption. That is almost the only determining factor—it is not quite the only one, but it is almost the only determining factor.
For example, in the large dairy which came under my management when I was working, at the present time they are getting a trippage of 65 on milk which is sold at the doorstep. But on milk which is sold in the shops they can get a trippage of only five. That is 65 against five. That measures the difference you get when you get a short distance between the seller and the place of consumption.
The soft drinks manufacturers and the brewers have exactly the same experience. They find that with their containers on which there is a deposit they can get a trippage of 10 to 12 on the on-licences but only four on the off-licences, there again depending entirely on the distance between the seller and the place of consumption. The second most powerful factor in determining trippage is the frequency with which the customer goes to the place where the goods are sold. The average customer goes more frequently to the grocers than she does to the off-licence. Consequently, you can get a higher trippage with a non-deposit milk bottle in the grocer's shop than you can with a deposit beer bottle at the off-licence. The comparative figures are that there is a trippage of four for milk bottles and a trippage of five for beer bottles because the housewife goes more frequently to the grocer's shop from which she gets the milk.
The third factor which determines trippage is the weight and stoutness of the bottle. Twenty years ago when I was a bit closer to the trade than I am now we had heavier milk bottles, and we could get a trip-page on the milk round of over 100 because we had less breakages and less splintering. But, of course, if you have heavy bottles then you have more raw material and more enegy used in the manufacture of those bottles, and you use more energy in the carrying of those bottles in the dairy or the soft drinks factory, or what have you. Those are the three factors which determine the trippage. The trippage is not determined by deposit.

599
We have had the Waste Management Council's Study Group, and I am not going to enter into the arguments we heard a few minutes ago. All I know is that there has been a study group, and it has worked on this problem for three years. Let us look at the findings and the conclusions. It found that there was a saving in energy of less than one-tenth of 1 per cent. if the provisions set out in this Bill were put into effect. The savings in the nation's energy would be less than one-tenth of 1 per cent.
It went on to these conclusions. First, that the savings in energy and in raw materials are not sufficiently substantial to justify the considerable adjustment that would be needed in industry and employment. That was the first conclusion. In connection with that conclusion it said that there would be a loss of 7,000 to 9,000 jobs and they would be mainly in South Wales, because if this Bill came into effect there would be a transfer from cans to the refillable glass bottles. Can anybody think of a worse time in which we could have 7,000 to 9,000 fewer jobs in South Wales?
There has been a reply that we would have more employment up and down the country because the fillers of the bottles would have to clean them and so on, and consequently there would be more people employed in the soft drinks and filling factories for beer. But, against that, I am sure that you would have other adverse effects. For example, if you have beverages contained only in refillable bottles it is quite certain that the hypermarkets and supermarkets will not carry the variety of beverages they carry now. They could not afford to do it. They would have to clear some of them out to make space for empties. Consequently, you would have smaller sales of beverages because of the curtailment of the consumer choice. I think that would militate wholly against the possibility of more people being employed in cleaning bottles in the factories throughout the country.
The Earl of Onslow: My Lords, can the noble Lord justify that, because it has not happened in any place where a bottle law has taken place?
Lord Jacques: My Lords, you are making a lot of fuss about America, but only 9 per cent. of the citizens of the United States have this kind of law. Less than 10 per cent. The second conclusion was that a restriction on consumer choice was not justified, nor was there any justification for beverage containers being singled out from the packaging problem as a whole. The third conclusion was that a mandatory system of returnable beverage containers was not desirable, was not practicable, and instead efforts should be made to improve the trippage and recycling which had already commenced.
Those are the conclusions. Those conclusions came from a study group on which there were five representing industry, four representing the consumers, and one representing Friends of the Earth. The five who represented industry, the four who represented consumers, agreed with this report. The one representative who represented Friends of the Earth disagreed. What is happening now? The promoters of this Bill are going to inflict upon the nation that minority opinion of one in the study group. That is not good enough, and I
600
hope that when your Lordships go into the Division Lobbies you will show it as not good enough and not acceptable. On recycling, the glass manufacturers made their move some years ago. In 1977 they committed themselves to an expenditure of £5 million to develop recycling of glass. Today there are 550 bottle banks in 250 towns, and the country is covered by a network of recycling depots throughout the country.
Baroness White: My Lords, would my noble friend allow me? I am sure he does not want to exaggerate. Really, 250 is hardly a network. How does he compare it with West Germany, for example, where there are some 20,000 disposal points?
Lord Jacques: My Lords, I regret that the noble Baroness has misunderstood what I said. I did not say that 250 was a network. I said there were 250 towns which were covered by the bottle banks, and that the country was covered by a network of depots for re-cycling of glass.
Baroness White: I beg the noble Lord's pardon.
Lord Jacques: The glass manufacturers expect that they will be able to recycle 150,000 metric tonnes by April of next year, and by April 1984 they expect to be able to recycle 250,000 metric tonnes. That is the kind of progress which is being made in recycling which was recommended by the study group. Now the Friends of the Earth make a great deal of song about what is happening in America. But, as I pointed out, only 9 per cent. of the Americans are covered by this kind of legislation. They make a song about Oregon, but they have little to say about Michigan. I understand that in Michigan they have had this law for upwards of five years and that their prices for beverages are 10 per cent. higher than they are in the neighbouring States, and that their sales are down 20 per cent. since the introduction of this kind of legislation.
If this Bill went into law it would for a long time create chaos in the retail trade. The first people to get the shock would be the small retailers. The small retailer would be obliged by this Bill to take back bottles which were bought from him or from anybody else, providing they were of a type that he sold. He would be required to provide reasonable accommodation for empties, and required by this Bill to continue taking empties back, no matter where they were bought, until his provision was full.
When his "reasonable provision" for empties is full, he can then refuse them, according to the Bill. What will then happen when his own customers bring containers back after he has filled his provision with somebody else's customers' containers? What will his own customers say? "Why will you not take my empties? I bought them here", they will say, and he is bound to he under an obligation to them which is far more important than any other obligation he might have under the Bill. Thus the Bill will create great problems for the small retailer.
It will create even greater problems for the large supermarket or hypermarket. The problems of storage will be terrific. Indeed, the only way it could be done would be by having a temporary shelter in some place such as the car park, because the quantities

601
that will have to be handled will be enormous. And remember, these containers will have to be sorted out. They must be kept separate from the beginning, each manufacturer's bottles kept separately, otherwise there will be a terrific job afterwards sorting them all out. All of that will have to be done somewhere in the car park. There will therefore be these problems of storage and labour, but there will also be a security question; how on earth will it be possible to check the returned empties against the amount of money paid out? This is a theoretical Bill prepared by people who have no experience of the handling of beverages and empties.
Lord Melchett: My Lords, if my noble friend is leaving the question of security and so on, may I ask whether he would, with his great experience, explain to the House how all these problems were coped with when virtually all beverages were sold in bottles with deposits on them, which was the case in this country until quite recently?
Lord Jacques: The quantities then were exceedingly small, my Lords, whereas nowadays they are enormous. It is not only the greater quantity; quantity would not matter so much if there were not the much greater variety. In the last 20 years the increase in variety has made a big difference to the problem. My noble friend can take it from me that if we had only refillable glass bottles, the variety that would have to be available in the bigger shops would have to be reduced drastically because of the problems of handling and storing the empties.
We have been told that consumers favour this change, but a recent poll showed that nothing of the kind was the case. It showed that 72 per cent. of consumers favoured the non-deposit bottle and 85 per cent. insisted that they should at least have a choice. It is unreasonable to inflict on the whole nation the minority report of a study group when that minority report was backed by only one member of that study group. I therefore ask your Lordships to show in the Division Lobby that the House is just not having it.
5.34 p.m.
Lord Vernon: My Lords, I support the noble Lord, Lord Beaumont, and, before explaining my reasons for supporting the Bill, I wish to apologise to the noble Earl, Lord Avon, if, because of another engagement, I cannot be present at the end of the debate. I have read all the literature that has been sent to your Lordships, I have read the arguments adduced by the Friends of the Earth and I have read the arguments of the glass manufacturers. Having done all that and having listened to the speeches made in this debate, including the impassioned plea of the noble Lord, Lord Jacques, my mind has in no way been altered and I remain strongly of the view that the Bill should receive a Second Reading.
The factor which has influenced me most is that the Bill raises a very important principle—that of whether we are to continue as a wasteful, throwaway society or turn over a new leaf and set an example to other countries. Much has been said about litter, and I would only suggest to noble Lords who believe there is not much litter in this country that they should
602
pay a short visit to Switzerland, West Germany or Belgium. They will soon conclude that we are a filthy country in comparison with those.
The arguments against the Bill have been canvassed backwards and forwards all afternoon, and I shall not rehearse them all now. The question whether there would be more unemployment if the Bill were passed has been raised, and that is obviously one which we must note carefully, but I believe that argument has been totally demolished by the experience of Michigan. The noble Lord, Lord Jacques, may ask why we are quoting American figures, but it must be remembered that, while the states concerned represent only 9 per cent. of America as a whole, they are a very important 9 per cent. Who would suggest that the states of Michigan, Connecticut and Maine are not important? They are all important and some of them are highly industrialised. We are not talking about Nebraska, Montana and states of the Middle West. It is therefore unfair to say that the American experience is not of value to this country. Obviously there are differences, but on the whole there are lessons to be learnt.
The only serious argument which seems to have been advanced against the Bill—one must recognise it as valid—is that there would be a certain increase in cost in respect of the drinks concerned. One could argue the extent of that increase, whether it would be 10 per cent. or infinitely less than that or, as I have even seen it suggested, as high as 25 per cent. The answer is that we do not have enough information to be sure. There would probably be a marginal increase in cost, but, in my view, that would be well worth paying to achieve an improvement in the litter situation and change our attitude to waste.
Lord Somers: My Lords, is it not a fact that the increase in cost would be the charge on the container, which would be returned when the container was returned?
Lord Vernon: My Lords, I do not think I am qualified to answer that question. I cannot say whether the cost would be greater than that for the distribution trades. I accept that there would be a certain additional cost but, as the noble Baroness, Lady Birk, said, we must regard that as a small tax which the community has to pay to make the country a more worthwhile place in which to live. If therefore the noble Lord, Lord Beaumont, forces a Division, I shall support him in the Lobby.
5.39 p.m.
Baroness Phillips: My Lords, I shall make but a brief speech in the hope that I am allowed to do so without any noble Lord intervening, which rather prolongs the debate. I wish to suggest straight away that the mere fact that one opposes the Bill does not automatically place one against the anti-litter and anti-waste campaign. I have been a campaigner in that regard for as long as I can remember, but equally I have worked in the consumer movement, too. Quite recently I was invited to speak to the Institute of Packaging on what the consumer wants. I have never attempted merely to give my own personal point of view on any subject on which I have been invited

603
to speak; to do that is all too easy. So in this instance I went around inquiring of fairly large consumer groups to find out their feelings on packaging and on this particular point with which we are concerned. It was very interesting to find that the consumers realised that in a sense the whole matter has gone full circle; I could have said, "full cycle", but I think "full circle" is more appropriate. We must remember that the packaging lobby did not originate with the manufacturers. I remember that 20 years ago it was the consumer who pressed for more packaging, and at each stage the consumer was warned that he would have to pay for it. In each case the consumer said that he did not mind. I think it is true that people do not mind paying for the cleanliness, the hygiene, and the availability of the product.
But in the case of the proposal before us there is a mandatory element which provides that each bottle must be charged for, irrespective of whether or not the individual is going to return it. I note that the brewers are supposed to be in support of the proposal. This is very interesting, since on the whole, unless I am very much mistaken, more of the brewers' products are consumed on licensed premises rather than taken away in bottles, which must represent only a minor part of their trade.
I spoke to a small wine merchant who gave me some very illuminating facts about what people had put in bottles before returning them. I do not want to put your Lordships off your supper, but the wine merchant said that he would not want to return to the old days when he had to accept very unpleasant smelling bottles, which he had to keep in his shop until they were collected.
We know full well that any change of this kind will be reflected in the price to the customer. It would be nonsense even to suggest that one can estimate what the cost would be. I have been most fascinated by the figures that have been thrown around today. I think that it was the noble Lord who introduced the Bill who gave us the precise number of bottles and cans that have been wasted. That was very interesting. One wonders who was engaged in counting all the bottles and cans. and what process was used. He gave the figure in millions, I recall—
Lord Beaumont of Whitley: It was not me, my Lords.
Baroness Phillips: But the figure was given to us. Despite the declaration of the noble Baroness, I feel that we shall be forced to quote the report that has been mentioned, since it was officially printed and must in some sense have been a report from the Waste Management Council, whether or not it involved a working party. Consumer representatives, including Mrs. Graham, with whom I had discussion, made the point that they were not in favour of the mandatory principle which might be included in a Bill of this kind. We should be kidding ourselves if we thought that no jobs would be lost as a result of such a proposal. Of course jobs would be lost, and the loss would not automatically be made up by those who would be dealing with the recycling process.
I have had the pleasure of helping to launch some bottle banks. That is the way that we should be going
604
—to encourage the community voluntarily to deal with waste. Certainly our cities are a disgrace, but on the other hand there are successes in this field. My office is in Trafalgar Square, and bearing in mind that I helped with the "clean up Westminster" campaign, I must say that it is very significant how much cleaner the area is when there are no tourists about. People who no doubt are so clean in their own country bring bottles and cans which they leave in our country. One is forced to that conclusion. The area is certainly much cleaner in the winter. The difference is most noticeable. I would commend your Lordships to look at Trafalgar Square today as compared to Trafalgar Square in the middle of the summer.
I noted that the Women's Institutes were in support of the proposal. That puzzles me a little, since very recently I was at a large Women's Institute federation which certainly did not seem to be in support of it.
The Bill will simply mean increased costs for the customer. To quote a very famous Londoner, I would say, "You get nothing for nothing, mate". Any change in retailing will ultimately fall back on the customer. I do not want to see the shop to which I go filled with a lot of bottles which would lie there for a long time. Empty Coca-Cola cans are pretty sticky. People will not really clean them out before they take them back. So while I want to work towards more voluntary waste disposal, I am sorry to say that I do not think that in this Bill we have the answer.
5.46 p.m.
Lord Irving of Dartford: My Lords, I regret that the Bill has been introduced, since it forces some of us to vote against it who are every bit as concerned with the protection of the environment as the noble Lord. I have spent 30 years in local government and I am still the chairman of the finance committee of a borough, a borough in which there has been more severe dereliction than in almost any other part of the country, due to chalk extraction taking place over 150 years. As a member of a local authority I have also been involved in a number of recycling schemes. So in opposing the Bill I shall take second place to no one in my concern for the environment.
I believe that the Bill, in seeking to ban non-returnable beverage containers and impose mandatory deposits, attempts to deal with an urgent and important problem in the wrong way. The first thing to be said is that there was a report, and, despite the attempts by the noble Lords, Lord Melchett and Lord Beaumont of Whitley, to disparage it, clearly it was an official report, presented to the Minister. If the noble Lord does not have a copy, I can show him a copy, which contains a note indicating that the Minister actually received it. The fact that a group was involved is quite irrelevant. The group went into the matter very carefully indeed. They discussed matters regarding raw materials and energy requirements, costs associated with the filling of beverage containers, costs associated with retailing beverages in different forms of containers, "external costs", such as litter, final disposal in waste and pollution, the energy and raw material effects of recycling, and the retail availability of various beverages in the different container types. There could not have been a more through examination of the problem.

605
In the view of the group, an intervention such as is proposed in the Bill could not be justified, because the claimed environmental gains would be minimal and hypothetical, while the effects on industry, trade, employment and the consumer would be severe. The group concluded:
"We do not believe that the effects [of mandatory deposits] are sufficiently substantial in national terms to justify the considerable adjustment required of industry and the consequent effects on employment. The beverage container should not therefore be singled out from packaging as a whole for special attention".
There has been an attempt to present this issue as a clash between industry and the consumer. The Consumers' Association, which supports the opposition to the Bill, has indicated in its own brief that the working party included five industrialists, as well as four consumers, and in the end, after an exhaustive examination of the problem, the consumers appended their names to the final report. So it cannot be held up as being merely an attempt by the industry to feather its own nest and preserve its own interest.
Britain is not the only country to reject this approach. Although the promoters of the Bill have laid great store on precedents set elsewhere, in particular in America, as the noble Lord, Lord Jacques, said, less than 10 per cent. of the whole American system is covered by deposit legislation. What is more, since 1970 over 2,000 Bills of this kind have been rejected by state legislatures. In addition, five states have rejected measures as a result of referenda.
A great deal has been made of Oregon. I understand that it is very difficult to get true information about Oregon, but, if it were possible, who believes that Oregon is comparable with this country in population or in any other respect? It has been estimated that mandatory deposits would increase prices by about 10 per cent. The noble Lord, Lord Vernon, alternated between something less than 10 per cent. and 25 per cent., so I will assume that 10 per cent. is a fair figure, and this is in line with what information we can get about Oregon. The report itself says that there will be a loss, as the noble Lord, Lord Jacques, said, of between 7,000 and 9,000 jobs. At this moment in time I cannot believe that we ought to ignore these facts which have been given to us by the working party.
It is also said that they would reduce sales by 20 per cent. This, again, I understand, is in line with the information that we get from Oregon; and it would certainly reduce, as the noble Lord, Lord Jacques, said—
Several noble Lords: No!
Lord Irving of Dartford: I am bound to say, my Lords, that there are several reports about Oregon. I would rather quote from the report that I am interested in than the one that seeks to present the case in the light of the attitude of the noble Lord, Lord Beaumont.
Lord Beaumont of Whitley: My Lords, if the noble Lord will allow me to interrupt him, quoting again from the New York Times report, that says:
"Immediately following the implementation of bottle Bills in six States there was a small drop in total beer and soda sales.
606
The declines lasted no more than a year, except in Connecticut, where it is too soon to tell, and were followed by normal annual gains in consumption".
Lord Irving of Dartford: My Lords, the report itself is indeterminate, in that it seeks to prove no point other than to leave the matter open. Beverage cans constitute 4 per cent. of litter. Some reduction might be expected following deposit legislation, but it is estimated that it would be small. The Keep Britain Tidy group does not follow this type of legislation but is pressing for the adoption of its Clean Community System, which is based on Washington's litter control programme, which has been shown to be very much more effective in reducing street and highway litter at far less cost to the consumer.
Like the group, the can-makers believe that the introduction of mandatory deposits could put at risk many jobs in the industry, restrict consumer choice, reduce competition and possibly increase prices for, at best, little environmental gain. They point to the fact that over 7,000 people, a substantial proportion of them highly-skilled people, are directly or indirectly employed in the manufacture of around 3,000 million cans each year, and a significant concentration of these jobs—approximately 3,000—are in Wales.
The Earl of Onslow: My Lords, did the noble Lord say that 3 per cent. of litter was bottles? Why is it that the Glass Manufacturers' Association, in four surveys in 1972, 1973, 1977 and 1978, said it was 27 per cent.?
Lord Irving of Dartford: I am sorry, my Lords; I was, I thought, quoting from the glass manufacturers' brief, so we shall have to argue the issue on another occasion.
Much has been made of the idea that you can get rid of people in the can-making and other industries and find other work for them. Anyone who knows about can-making knows that it involves some of the highest technology that we have. To believe that a man can come off a high-technology can line and go and collect bottles in storage, and that there will be no difference in the economy as a result, I think is not to understand the problem. The industry uses nearly 170,000 tonnes of tinplate and aluminium per year in the manufacture of beverage cans, of which all production scrap is automatically recovered and recycled.
Cans, I understand, represent only a very small fraction of the collective municipal waste of the United Kingdom. When set against a national level of 13.3 million tonnes of refuse a year, it is self-evident that even the total abolition of beverage cans would make little discernible difference to waste disposal costs. The industry recently showed its interest in resource management by announcing its intention of increasing its efforts to recover and recycle cans. The can-makers and their suppliers expect to spend an additional £2 million over the next three years on a number of recycling projects, including the expansion of consumer schemes to over 20 towns and cities.
However, disposal does not mean waste, for currently around 70,000 tonnes of scrap, primarily cans, is recovered every year from municipal waste, the majority by local authorities but also by Government and private enterprise schemes. At least three years ago I visited Benwell, near Newcastle, to see the transit recovery scheme, involving recovery from household refuse,

607
which was financed by Metal Box, Batchelor Robinson and British Steel—a very successful experiment—and later the Minister actually gave Tyne and Wear Council £2 million to engage in the same kind of work on Tyneside. There is a similar scheme in Greater Manchester that has been sponsored in the same way as the Benwell scheme.
But, of course, it is not just the can-makers who are opposed to the Bill; so are the glass manufacturers. It might be believed that the glass manufacturers would have welcomed this, because if there was a loss in the can-making industry it might be of benefit to the glass-makers. But that is not so. They recognise the need to conserve resources, and this recognition led them to launch the bottle bank scheme in 1977. The scheme currently operates in 256 towns and cities, and there are now 545 special bottle bank sites in use. As a member of a local authority and as a vice-president of the ADC and a number of other local authority organisations, I am aware of the tremendous pressure that there is behind this effort to get recycling off the ground. I believe this is the direction in which we ought to go; and by 1984 the glass container industry will be spending a further £5 million on development schemes, according to an announcement made in April. The industry has now established a network of plants to cover the whole of the United Kingdom, and the aim is that by 1984 there will be recycling at the rate of 250,000 tonnes of glass a year—a very considerable quantity.
Recycling certainly saves energy, raw materials and money; but there are the further problems to which the noble Lord, Lord Sainsbury, alluded. My Lords, 48·8 per cent. of these cans and non-returnable bottles are handled by supermarkets, and it is fairly clear, as he said and as many others believe, I think, that they would be unwilling to handle mandatory deposits because they have not the storage and other facilities to be able to process them.
My Lords, this measure does not address itself to the problem of reducing waste. Non-returnable bottles for the categories covered by the Bill represent 3 per cent. of solid waste. The policy of improving the existing returnable systems and recycling all non-returnable systems is a far more effective way of reducing waste without creating more bureaucracy, more unemployment and higher prices. It is clear to me that conservation can best be achieved by these means rather than by mandatory deposits. These are the ways to success in conservation in which all manufacturers, consumers, the Government and local authorities alike can co-operate to secure an improvement in our environment.
5.59 p.m.
Lord Melchett: My Lords, I should like to support the noble Lord, Lord Beaumont, in the introduction of this Bill, and to take issue, if I may, with some of the things that some of my noble friends who have not supported the Bill have said in the course of the debate. Some time ago, I was involved as a junior Minister in the last Government with the Waste Management Advisory Committee. My noble friend Lord Irving has said that it is quite wrong to cast doubt on the
608
validity of the working group's report, but as one of the Government Ministers involved I must tell him, as to when the Waste Management Advisory Committee started to look at this problem, I entirely agree with everything that my noble friend Lady White had to say.
The expectation was that this working group would report to the main committee, as is normally the case with working groups; and the composition of the working group was decided, as I understand it, with that in mind—that they were simply a working group which would report to the main committee. I think it is highly regrettable, not to say somewhat suspicious, that for two years while the Waste Management Advisory Committee was under sentence of death—a slow and lingering death—by the present Government, this working group's report was not considered by the main committee; and I think it is a shame that my noble friends have not at least seen that some skulduggery was going on while the Government were busy winding up this excellent organisation.
My noble friends and others who oppose the Bill have placed differing emphasis on the American experience. They have said that 9 per cent. of Americans is an insignificant proportion of people and therefore should not be taken notice of. They have said that Oregon is not the state to look at but that Michigan is; and that we should learn from the experience of Michigan, rather less than 9 per cent. of all Americans. America is one of the countries where there is practical experience of putting into effect the sort of provisions which the noble Lord, Lord Beaumont, would like the House to support. That is why everyone has quoted it. It is important to look at it. Nine per cent. of all the Americans is a lot of people. And there are other countries in the world also with experience of this. One of them is Denmark which has all beer and soft drinks bottles returnable. Norway and Sweden have a very high proportion of beverage containers returnable.
One issue raised by those who have quoted the American experience is the very large number of Bills that have been rejected on numbers of referenda which have decided against the introduction of these Bills. Perhaps I may quote two examples of where this has happened: in Washington State (which has been mentioned several times) and in Ohio. In Washington, 43 per cent. were in favour of the introduction of a Bill and 57 per cent. were against. In Ohio 28 per cent. were for and 72 per cent. against. As my noble friends have said, the referenda came out against the introduction of this sort of Bill. But they did not mention the fact that in the campaign leading up to the votes being taken, the proponents of the law (that is, those in favour of bottle Bills) in Washington, spent 70,000 dollars in a one and a half year campaign and, in Ohio, 80,000 dollars supporting the campaign, while the opponents, the industry involved, spent 1 million dollars in Washington State and no less than 2 million dollars in a four-month period in Ohio.
I think that my noble friends, when quoting the results of these democratic decisions, might have quoted the sort of figures I have quoted about the money spent. Also, they might have mentioned the referendum in Maine, where there is a bottle Bill. There has been a referendum there with—no doubt—similar expenditure on propaganda from the industry.

609
In Maine, the people had practical experience of how it works. The consumers of Maine voted overwhelmingly against repeal—some 84 per cent. That goes to show that when people have had experience of this rather than just the propaganda financed by huge sums of money, then they vote in favour of the sort of measure that we are discussing today. The law works and people like it.
Lord Strabolgi: My Lords, I am sorry to interrupt my noble friend, but he interrupted me several times. Is my noble friend aware that in Maine the price of beer has increased by 22 per cent. and by 38 per cent. if the deposit is included? Furthermore, is he aware that 44 states have turned against the legislation after having seen what happened as the effect of the legislation in the six states concerned? However those decisions have been arrived at in those states, it was the working of the legislation which persuaded the 44 other states to turn against it.
Lord Melchett: My Lords, let us look to see how the experience of the states which had bottle Bills was transmitted. My noble friend Lord Sainsbury mentioned the film that was shown to your Lordships' sub-committee. But he did not mention one of the things which no doubt influenced the referendum in California, which is one of the states where they did not want the Bill. This film was produced by the Californian Brewers' Association and it gave, I am told, a one-sided and inaccurate view of what had happened in Michigan. I hope that noble Lords when they go into the debate, will go into it with a little more scepticism of the sort of information which was given by the industry interests involved.
We have already heard some criticism on the question of jobs. The noble Earl, Lord Onslow, answered that concisely; but then the argument went that even if there are more jobs created in the experience of the American states—and he quoted figures on the American experience—that does not mean anything because the consumption will fall. That is not the case. The American experience shows that consumption does not fall. My noble friend Lord Irving said: "You cannot find out about Oregon; I do not believe that information". Perhaps I can quote something from the State of Oregon's Department of Environmental Policy. The produced a good report on the Oregon bottle Bill, and the heading of the part I want to quote reads:
"The economy. Sales up, Prices down".
It goes on to say that the net economic effect of the bottle Bill on the Oregon consumers and beverage-related industry has been positive.
Noble Lords can ignore this evidence if they wish by saying that it is impossible to get hold of it; but in looking at the briefs that they have had from the industry in this country, they could have asked for more official information from the USA and they would have got very different answers.
Lord Irving of Dartford: My Lords, may I ask the noble Lord whether he accepts the fact that I qualified my statement by saying that there was no comparable situation in Oregon to that in this country? I would
610
ask also whether he quotes American experience in all other walks of life as enthusiastically as in this instance.
Lord Melchett: No, my Lords; but I would respond by asking whether it is believed that large numbers of measures that all my noble friends supported under the last Labour Government would have been passed if we had listened to the argument which said that large numbers of American states did not agree with those measures and therefore we should not legislate. If that had been so, we should not have passed a single Act of Parliament in the last Labour Government or in any Labour Government since the last war. Oregon may not be very typical of this country but Michigan, I suggest, is. In Michigan, in contradiction of what my noble friend Lord Strabolgi has said, the New York Times article says that three in-state breweries recorded a 1 per cent. sales gain in the year after the Bottle Bill was implemented and two out-of-state breweries reported sales increased from 10 per cent. to 42 per cent. Again the figures that he quoted are not accurate, I would suggest.
The next item, as far as the United States experience is concerned, is energy. As far as this country's experience will be concerned it is energy.
Lord Strabolgi: My Lords, before my noble friend leaves the other question, is he aware (and I do not know whether he heard it in my speech) that I said that the President's Conservation Committee recommended against a federal law because of the experience in the six states who had this mandatory system, and because of the uncertainty of the impact on prices and labour if such a system as he and the noble Lord, Lord Beaumont, would like to see brought in for the whole of the United States? The US turned against it.
Lord Melchett: My Lords, the federal report that my noble friend refers to may have come out against it. The consumers in the states where they have the Bills have come out in favour by an overwhelming majority—84 per cent. in one of the states I mentioned. That is something which members of my party should place some reliance upon.
Going on to say a word about energy, the Waste Management Advisory Committee Working Group said that they thought the energy savings involved in the introduction of a bottle Bill would be insignificant The reason why a number of us feel unhappy that this working group report did not go to the full committee is because the working group sensibly got a team of independent consultants to produce some information for them. My reading of the working group report is that they ignored the independent findings of those consultants. Energy consumption is a good example. The independent consultants who are not associated with any interest group said that 35 per cent. of the total energy used in the whole system—that is, extraction, manufacture, retail and disposal—would be saved by an all-refillable bottle system. Nobody is suggesting in the noble Lord's Bill that we would have an all-refillable system because there would still be some use of cans. But the suggestion that we might have a 25 per cent. energy saving, on the reading of the independent consultant's report, seems eminently reasonable and modest.

611
We are talking about very large sums of money. The working group said that this was insignificant but the drinks industry uses as much electricity as is used to light all the homes in England and Wales, equivalent to a quarter of all the delivered energy from nuclear power stations in this country. There are very real major savings to be made by the introduction of a Bill of this sort.
The noble Lord, Lord Craigton, spoke against compulsion. A number of other noble Lords have said that this is not right. The noble Lord, Lord Craigton, pointed to an oft-quoted example of a voluntary system which all those speaking in support of the industry's view have also taken in favour of recycling.
May I, as an aside, express surprise at the enthusiasm with which the industry has grasped recycling and the bottle bank concept while being critical of the Friends of the Earth who pioneered this. If anyone were taking an honest and objective view of the history of this saga, they would readily admit that there would not be any recycling being done by the industry now if it had not been for pressure from the Friends of the Earth many years ago in ways that many will remember. It is regrettable that having seized on that, pioneered by the Friends of the Earth, who had the first bottle bank in this country—it was not the industrial interests—that they should now be criticised in what they have said.
Lord Craigton: My Lords, the noble Lord will also agree that I criticised the industry for not doing nearly enough.
Lord Melchett: Yes, my Lords. I was delighted to hear the noble Lord say that. The noble Lord did however say that the voluntary scheme on the control of persistent organo-chlorines was an example of how industry could successfully and voluntarily control something which was extremely harmful to the environment. I recently asked a Question for written Answer in your Lordships' House about the level of continued use of persistent organo-chlorines in this country. I was very disturbed to see first of all that the Government had totally inadequate figures to monitor the use of this; and, secondly, what figures they had showed a continuing very high level of use of persistent organo-chlorines in this country. There is considerable evidence to show that the voluntary approach there has been an abject failure. I suggest to the noble Lord, Lord Craigton, that the voluntary approach in this field will similarly fail.
There has been a survey quoted about what consumers want, although the questions that were put to people to produce those figures have not been spelt out. One does not know whether this is based on what consumers are currently buying or what consumers feel is available to them, because of course consumers have virtually no choice in places where prices are lowest, in supermarkets, because it is almost impossible to find returnable bottles in large stores, hypermarkets and supermarkets. One has to go to the corner shop or small shop.
Incidentally, it is my view that those shops, rural and village shops, would benefit a very great deal from this
612
Bill. They are on the whole already handling a fair number of returnable bottles, and on the whole would be quite easily geared up to handle 100 per cent. returnable bottles. The problems would come in the large stores, where consumers currently have very little choice. The survey which I have been shown indicates that when consumers were asked not what is happening now, but what they would like to happen, they express an overwhelming preference for returnable bottles which this Bill would give them, and I hope that your Lordships will support it.
6.14 p.m.
Lord Mottistone: My Lords, I must start by offering my congratulations to the noble Earl, Lord Winchilsea and Nottingham, for his splendid maiden speech. He probably did not think that what he was saying was controversial, but I found it so. For all that, I hope that we shall hear much from him in the future. He spoke most fluently and it was interesting to hear what he had to say.
I must also declare an interest, as certain other noble Lords have done, for I speak with the advice of the Food and Drinks Industries Council. I hope that that does not discredit totally what I have to say in the eyes of those who oppose me or do not agree with me. The FDIC and associated trade associations entirely agree with the noble Lord, Lord Beaumont, and his Friends of the Earth regarding the need to conserve energy and raw materials, to reduce waste, to effect economic recycling, to minimise litter and protect the environment.
What they do not agree about is either this Bill will achieve that to any great extent or indeed that this Bill is a right way of directing our fellow citizens towards a compulsory type of system. Indeed, I am very puzzled, notwithstanding the explanations that the noble Lord, Lord Beaumont, gave us, as to why this Bill has been brought forward at this time. It seems to me that quite apart from the fact that Sub-Committee G are studying a directive, there is also the question of the directive itself. The directive sets out the major points which I have already told your Lordships the FDIC council view favourably, and it would seem to me that the proper time to bring forward a Bill is not before we get a directive but afterwards. The way to attack a directive is surely not to try and launch an almost indigestible Bill on the poor suffering British public. We get too much legislation and it is as well that we withdraw until we have to have it.
Regarding the detail, I have lots that I could say, but most of it has been said very ably by many noble Lords, particularly noble Lords opposite. Without wishing in any way to detract from what the others said, I think that the noble Lord, Lord Jacques, put his professional finger more firmly on each and every one of the points than anybody else. That does not mean to say that the noble Lords, Lord Irving, Lord Strabolgi and Lord Sainsbury did not all make very excellent contributions as well. Now I should like to refer to the report of the working party of the WAMAC. I am not going to bother at this stage with its parentage; if one wants to discredit something one has to dig up practically everything one can find with which to discredit it, and I was not impressed with the arguments produced. It seemed to me that they were a bit of dredging up.

613
The fact is that it is a very thorough report by people who are evenly balanced between consumers and manufacturers. They tried to go as deeply as they could into the matter. Maybe they should have done something more; maybe they did not listen or refer to all the reports that were made available to them. However, they did this job extremely thoroughly and agreed on it. We will not go into the question of what happened to the minority report. That is again a bit of skulduggery, if you like it—we were told about skulduggery earlier—and we had better pass over that. The fact is that it is a thorough report. It does not agree with the solution which the Bill puts forward. It does agree that a lot should be done.
I was impressed by what my noble friend Lord Craigton had to say, and I hope that my industrial colleagues will take note of that. There is a lot of room for further initiative. I suggest that the working party report, which has been so much under discussion, points the way to a lot of those initiatives. It is just a matter of picking them up. For heaven's sake! let us do it in a free society and not have it directed by some narrowly-based Act of Parliament.
I want to refer to one point which did not seem to come out about consumers. First, I am sorry that the noble Lord, Lord Melchett, has found it necessary to leave the Chamber because I wanted to make it clear to him that I was going to say what I am going to say even if he had not devoted the major part of his speech to trying to justify the news from America. It is in fact that whatever else people may say about America—and there are different views as to what the American message conveys to us—the consumers in this country are very different.
Even if I have forgotten that, I had the good fortune just over a month ago to stay with my daughter in Atlanta, Georgia, and it is quite remarkable how different it is. Unlike the consumer who has to walk through the town or park cars, if they have them, quite some way from where the shops are, in most parts of this country where we have not got great, big out-of-town hypermarkets—we have a few but they are very few, as your Lordships know—quite apart from that, those without motorcars (and there are far more of them here than there are in the United States) have to go in buses and they have to carry the goods which they buy. I know that my own wife grumbles like mad if she has to walk up the stairs because someone has occupied the lift, or it is bust. It is so different from the United States, where you drive from door to door, park outside the supermarket and return goods, if that is what you want to do. But in Georgia it is against the law to buy liquor on sale or return, which is what I advised my son-in-law to do when he was kindly throwing a party for us. So he was not able to return his bottles even if he had wanted to. He had to put them with the litter. Some people, of course, might say that the noble state of Georgia is not as far advanced as some other places which have been mentioned. For heaven's sake! let us remember what consumers we are talking about and do not bother too much about other types of consumers. Indeed, it has been said that our consumers at this point in time on the whole are against it, as the noble Baroness, Lady Phillips, remarked.
614
To sum up, I would remind your Lordships of something that was mentioned by my noble friend Lord Craigton, namely, the report of the Select Committee on Science and Technology on the handling of hazardous waste. In paragraph 74 of that report, which we debated last Tuesday, it says this:
"False incentives to encourage recycling are taxes on production".
I do not think you could put it more succinctly than that. The fact is that if this Bill became law the consumers would have to pay, and I think it is a bit hard that those who are so keen on protecting the environment should wish once again to strike at the pockets of the consumers in these hard times. I hope that your Lordships will join with me in rejecting a Second Reading for this Bill.
6.23 p.m.
The Earl of Shannon: My Lords, I must apologise to your Lordships that my name is not on the official list of runners in this race. I did intend to speak in this debate but I knew I would have to miss the earlier part of it, although I have listened with great pleasure to many of the impassioned pleas from your Lordships on all sides of the House on both aspects of this Bill.
The debate appears to have resolved itself into the admirable romantic idealism of one side versus the pragmatic practicability of the other. I will detain your Lordships only for one or two minutes; that I promise. My point has already been touched on by the noble Baroness, Lady Phillips, and it is this: Do the supporters of this Bill realise that they are only attempting to legislate to outlaw what is in fact merely one of very many symptoms, and not a cause? It is litter and waste that we are talking about. It is a bit like having a common cold and saying, "Thy nose shall not run and thou shalt not sneeze." What you should really say is, "You should not have a cold". That is the root of the problem.
Should we not go to the root of this problem, which is basically untidiness rather than beverage containers? I must declare what might possibly appear to be a totally irrelevant interest. I am very interested in the magnificent canal system we have in this country. Therefore, with the same idealism as the supporters of this Bill, may I please ask for deposits on motorcar tyres, bedsteads, old cars, bicycles, old boots—these are what you will find in the canals. Let us outlaw them by deposit too. Let us make it refundable to bring your old boots back: do not put them in the canals. And what about paper bags, washing-up liquid containers, cardboard boxes and polythene bags? If you have one of those wrapped round your propeller you really do have a problem: you have to strip off, get into the water get out a knife and cut the beastly thing off. No, my Lords, let us turn our attention to doing something about the real cause, and that is untidiness, not just only one of the very many symptoms.
6.26 p.m.
Lord Kennet: My Lords, like other noble Lords I have heard the briefings from both side and listened to a great deal of the debate. I think the proposers of the Bill have the best of the argument. It seems to me that the Bill is cast in a form which would not be very

615
practicable, but that can be put right in Committee. Do let us at least vote to put it to a Committee.
There are two points I should like to pick up which have so far gone unanswered: one point was made by the noble Earl who has just sat down. Perhaps he can tell the House whether he has ever come across a pair of old boots which could be re-used if they were returned and, if not, admit the distinction between tyres and boots on the one hand and bottles on the other. Secondly, on the United States Federal Report which came down against adding an analogous tax in the United States, it is possible that judgment may have been based on the American predilection of doing these things by states. It is just the sort of thing which in America is left to state decision. We must watch those decisions and see how they go. We must hope that this Bill will not prove to be the first of 2,000 Bills on the subject which could be rejected in this country. I fear that it may. Nevertheless I say again: let us vote it into Committee; and in saying that I would emphasise that the SDP, we on this Bench, have a free vote on this subject and it is an individual choice that I make.
6.28 p.m.
The Earl of Avon: My Lords, if I may echo the last remark made by the noble Lord, Lord Kennet, judging by this debate I think that everybody is going to have a free vote at the end of it! The noble Lord, Lord Beaumont, in moving the Second Reading of his Bill today, has shown his concern for the environment, for resources and for waste. I personally am grateful to him for his clear exposition at the beginning. These are concerns which the Government share. Protection of the environment, avoidance of waste, the responsible use of energy and materials and the economic recycling of waste materials are all important objectives for the nation. It is important for our society to have a sense of self-discipline in all these subjects, since the supply of goods and services in our economy is essentially free of state direction. Under our system the state does not have a major role in deciding what shall be put on the market.
At this stage I should like to congratulate the noble Earl, Lord Winchilsea and Nottingham, for his excellent maiden speech, and add my voice to those who have said they hope to hear him often in the future. He took us on a seductive and educative ride on an "Oregon trail", which I found most interesting and, unlike my noble friend Lord Mottistone, I did not find it particularly controversial. But, my goodness! it led to a lot of controversy afterwards.
The noble Lord's Bill is concerned with the containers in which certain beverages are sold and I can readily understand why many people feel that a container which can be returned and refilled should be preferred over one which has to be discarded. People hold this view sincerely and I am aware that some have written to their Members of Parliament urging that the Government should introduce legislation, such as that we have before us today. But the issue is more complex than it might appear at first sight.
The aim of the Bill is to promote the use of standardised refillable glass bottles over any other type of container used for the sale of a wide range of beverages for human consumption. The underlying justification for the Bill is that greater use of refillable glass bottles
616
would secure raw material and energy savings, together with environmental benefits in the area of waste disposal and litter.
The provisions through which the Bill seeks to promote use of standardised refillable glass bottles have three main elements. Standard shapes and capacities for glass containers would be established by regulation. All containers, whether refillable or not, would have to bear a refundable deposit and this would be a lower amount for glass containers meeting the standard specifications. Retailers and wholesalers would be obliged to accept and refund the deposit on any containers of a type they sold which were returned to them.
The belief must be that consumers, faced with having to pay a deposit on all containers, would choose those bearing the lowest deposit; as a consequence, sales of beverages in standardised glass bottles would rise at the expense of other containers and industry would be encouraged to extend refillable systems. There is, after all, no point in standardising a one trip bottle. May I say how grateful I was to the noble Lord, Lord Jacques, for taking us through the courses of trippage which I thought I might have to do myself. At the same time, non-refillable containers which continued to be sold would be collected and be available for recycling.
In examining the Bill, we need to consider four points: first, whether the Bill would be likely to work out as intended and achieve its objectives; secondly, how significant its benefits might be; thirdly, whether it would have adverse consequences and, fourthly, whether progress towards securing the underlying aims of the Bill can be made without such legislation. In considering these factors, we are fortunate to have available to us the report of the study of returnable and non-returnable beverage containers carried out by the Packaging and Containers Working Party of the Waste Management Advisory Council. If I may, I should like to refer to this in future as WasteMAC.
The noble Baroness, Lady Birk, in her opening remarks, the noble Baroness, Lady White, and the noble Lord, Lord Melchett, have all referred to the Waste Management Advisory Council. I should like to pay tribute to them and say that the council made a valuable contribution in identifying the main problems and priorities. However, having reviewed the activities and achievements of the council and the work which remained to be done, the Secretaries of State for Industry and for the Environment concluded that further progress could best be achieved in this important area by more direct and informal co-operation between central and local government and other interests concerned.
The council was therefore abolished in January 1981 and, as the noble Baroness, Lady White, cleverly pointed out, as the report was not published until April 1981 they could not, of course, have seen it. However, the report was by a working party set up by them and I believe that the present Government are right to have produced it. The noble Lord, Lord Melchett, said that he could see skulduggery. I assure him that, really, none exists here and it is no intention of this Government to be at all underhand in this matter. I am sure that it was not when he was in the department either—
Lord Melchett: My Lords, before the noble Earl leaves that point, may I ask him to explain why the working group's report was not considered by the council in the considerable period for which it was available, and before the council was actually wound up?
The Earl of Avon: My Lords, far from being skullduggery, I suspect that it was because no decision was made on what would happen to the council. The noble Baroness, Lady White, also asked me a follow-up question about the national anti-waste programme. This, I am informed, was a team of officials which was really the secretariat for the council. It does not exist any more, because the council itself does not exist. But both the Department of Industry and the Department of the Environment continue to have units with responsibility for reclamation and recycling. But the Governent look principally to industry to take steps to ensure that waste materials are recycled, where it is economic to do so.
Before leaving the subject, my noble friend Lord Mottistone also had some idea of skulduggery in regard to the minority report. If he will look at the last page of the report, he will see a statement in lieu of a minority report and where it is possible to obtain the minority report from. Once again, no skulduggery. The report—
Lord Mottistone: My Lords, before we leave that subject, may I say that the skulduggery to which I referred was the fact that the minority report was published before the main report.
The Earl of Avon: My Lords, my noble friend may be right. But I have 16th June for one and April for the other. However, I shall not press him on the point.
The report was the result of over three years' work. It provides a valuable assessment of the issues at the heart of this Bill and its conclusions were endorsed by all of the consumer and industry representatives on the working party. As we have heard only the Friends of the Earth representative chose to dissent. The WasteMAC study considered the case for intervening in the market to increase the use of refillable bottles, and looked at the part which mandatory deposits and standardisation of refillable bottles might play.
Regarding mandatory deposits on all beverage containers, the report pointed out that, from the consumers' point of view, there is no inherent quality in refillable bottles to encourage their selection. Some other containers have attributes such as lightness and convenience for which the consumer has been, and may continue to be, willing to pay. The size of the mandatory deposit on one trip containers compared to that on refillables, and the comparison in net price, would clearly be important.
It was felt that, as the deposit payable on non-refillables rose above the level of that on refillables, consumers might become more reluctant to buy one trip containers, but the extent to which they would change to refillable bottles or decide not to buy them was open to question. If they did switch to refillables at the lower deposit level, it is still uncertain to what extent present bottle return rates, and therefore trip
618
page, would be improved upon. The biggest incentive for return would attach to the non-refillable—or, under the provisions of this Bill, containers other than standardised bottles.
The WasteMAC report accepted that the return of one trip containers for recycling might thus be encouraged by the imposition of deposits on them. But it was mentioned that, in the case of cans, this could lead to greater use of those made from aluminium, which is more easily recycled, at the expense of tinplate, with consequent increase in the energy requirements for the system. However, the main purpose of this Bill is to promote the use of refillables rather than one trips.
The Bill does not specify the levels at which deposits should be set, only that those for standardised glass bottles should be lower. It has been pointed out that present deposits are roughly equivalent to the replacement cost of the refillable bottle. The provisions of the Bill would seem to imply higher deposits than this for containers other than standard glass bottles. The problem would then arise of these empty containers being worth more in deposit than their scrap value. Industry has warned of the risk that this would encourage dishonest handling and WasteMAC referred to the initiator of the deposit having considerable advantage; for example, from retaining unclaimed deposits.
If, on tile other hand, deposits on one trip containers were set at about the scrap value of the returned container, the British Soft Drinks Council believes that the Bill would have no effect since the deposit would be less than the price differences between shops. It would also appear that in this case, under the Bill, deposits on the standardised bottles would need to be even less and industry would therefore be less likely to get back from consumers the bottles it needed for refilling.
WasteMAC concluded that a system of mandatory deposits on all beverage containers to encourage a move towards refillables would have unpredictable effects. Some move towards refillables would be expected, if deposits on other containers were higher than those on refillable bottles, but they did not expect that advantages would outweigh disadvantages.
I believe that there is some reason to doubt whether the introduction of mandatory deposits, as proposed in this Bill, would work out in practice as intended. The WasteMAC working group concluded in their report that they could not recommend a system of mandatory deposits on all beverage containers, nor, indeed, certain other forms of intervention in the market which they had considered. But the report was, of course, by no means all negative. It made a number of positive recommendations.
In its recommendation that efforts should continue within the beverage industries to reach agreement on a greater measure of standardisation of returnable bottes there was support for one of the aspects of this Bill. But the report noted the substantial measure of standardisation which already exists in beer and cider bottles and in the smallest carbonated soft drinks bottles, together with the move towards a standard one litre bottle. It also noted that standardisation could hamper technical advances which could produce

619
energy savings. The attitudes of retailers and fillers were recognised to have a major influence on whether standardisation would lead to better return rates. The soft drink manufacturers have pointed to the cost and waste which would arise if fillers had to either sort returned standard and old proprietary bottles so that they could be filled on different lines or scrap all of their existing bottles and start again. WasteMAC considered that the potential advantages of standardisation were insufficiently clear-cut to justify imposition of standardisation by Government but, as I have indicated, favoured progress by voluntary agreement.
Some people have felt that the recommendations did not go far enough and that, left to voluntary action, those with vested interests in the present mixed system of beverage container usage would block any progress along the lines recommended. This, I am glad to say, has not been the case. Those concerned have maintained contact with Government departments and have given attention to how the recommendations might best be followed up.
Of course, the beverage industries already make substantial use of refillable bottles. I do not think I need now go into the point of the popular bottle banks, as the noble Lord, Lord Cooper of Stockton Heath, the noble Lord, Lord Irving of Dartford, and the noble Lord, Lord Strabolgi, have all produced the statistics. But this is progress, and it is progress which has been achieved with no little help from those local authorities involved. And the soft drink manufactures have contributed funds to the scheme.
There have also been recent technical advantages. Smaller, brightly-coloured collecting points have joined the traditional skips. These can go in places where the big skips could not, can attract more users, including more commercial users, and be collected and emptied in other ways. They are even attracting the interest of private contractors who are designing schemes which can be run with less, or even no, involvement by public authorities.
The beverage can manufacturers announced only last month plans of their own on a similar line to that of bottle banks. It is a nationwide scheme in which they have committed £2 million to increasing their can recovery capacity from the present 1,700 million to an expected 2,600 million cans by 1984–85. The initiative includes expansion of consumer schemes to over 20 towns and cities and encouragement for local authorities and other organisations concerned with waste disposal to extract used cans from the waste stream Aluminium and tinplate suppliers and companies specialising in metal separation and extraction are also involved.
Besides their recycling initiative, the can makers have always been under pressure to reduce their use of raw materials, tinplate and aluminium, which are the highest cost elements in a can. There has been progressive reduction in average can weights through innovation. For example, the weight of a 12 ounce can has been cut by 40p per cent. in 10 years.
The plastics industry have also been willing to respond. They have initiated a pilot scheme for the recovery and recycling of plastic PET bottles to test its economic viability with a view to expansion. These
620
plastic bottles are a growing factor in the soft drink market. The returnable symbol designed by the National Association of Soft Drinks Manufacturers which received favourable comment in the WasteMAC report has now gained widespread acceptance and is being introduced through the soft drinks, cider and brewing industires as new bottles become necessary. There is no merit in scrapping perfectly good old bottles which do not carry the symbol. The soft drink manufacturers have reported that some are putting the symbol on the label and the industry is trying to persuade retailers to show the value of the deposit separately from the product price so that consumers are more aware of the money they lose by failing to return empties. Discussions within industry and involving Government, local authorities and interested parties are continuing.
In a number of the considerations which are relevant to this Bill it is not possible to be dogmatic. We have seen today how figures can be bandied about. It has to be admitted that one is speculating as to what might happen. The WasteMAC packaging and containers working party was able to reach a substantial measure of agreement on the possible consequences of certain actions, including mandatory deposits and bottle standardisation. The Friends of the Earth and supporters of the Bill hold different views. But the Bill provides that the Government should intervene very substantially in the package beverage market, singling this business out from others. The Bill would require the extension of the Department of Trade's activities to implement the standardisation of glass bottles. It would also place extra burdens on the consumer protection services of local authorities, on whom enforcement and the investigation of complaints would fall.
This Government's general approach—and it seemed to me to resemble very much that of the noble Baroness, Lady Phillips—is to cut hack on interference with industry, and the case for doing otherwise needs to be strong. The Government do not believe that such a case has been made on environmental grounds. They accept the WasteMAC study findings that the savings in external costs, such as waste collection, disposal and litter, resulting from a change to an all returnable system for beverage containers would be small in relation to the number of beverage containers produced each year. The environmental savings which might be forthcoming should more appropriately be pursued through establishing an effective recycling system rather than by relying on restriction. In the case of litter, the Government support the Keep Britain Tidy group who campaign against litter on many fronts. They do not favour legislation which deals only with beverage containers but believe that the answers lie in local authorities adopting their community litter abatement programme.
My noble friend Lord Craigton, who I thought for one moment was going to demand a marine nature reserve at the bottom of his garden on the Thames, asked me about Section 24 of the Control of Pollution Act 1974 which will require county councils to draw up and publicise litter abatement plans. It will be implemented as soon as circumstances permit. It has not been implemented because of the continuing need for restraint on public expenditure. However,

621
the Government review the position every year. The Keep Britain Tidy group have introduced a community litter abatement system for local authorities. By adopting this system on a voluntary basis, local authorities will be anticipating at least part of a duty that they would have had under Section 24. The Government have commended the Keep Britain Tidy system to local authorities, with the proviso that in current circumstances widespread introduction may have to take a little time.
The Government believe that there is substantial doubt about the way that this Bill would work out in practice and about the benefits which might be expected from it. On the other hand, it is certain that a number of industries, from manufacturing to retailing, would need to make considerable and costly adjustments which would be against their advice and commercial judgment. Food and drink retailers are opposed to the idea of all beverage containers bearing a deposit and being returnable. They consider that it would be too costly in terms of manpower, shop space and administrative and transport costs. They fear that the small shopkeeper in particular would not be able to cope. Might I remind noble Lords how very much concerned this House always is to encourage small business. In addition, there would be a very real probability of losses of jobs. I do not want to enter into numbers, but at the outset there is bound to be, as the noble Lord, Lord Cooper of Stockton Heath, so ably explained, particularly in the area of Wales, job losses. But later—I fully admit that this is a figure which we can bandy about because nobody knows the answer—other jobs may be forthcoming in the distribution and the recycling industry. However, we must be warned that there would be an initial loss of jobs, including the country of South Wales.
The Earl of Onslow: My noble friend has said that it will be very difficult for retailers to adjust to a 100 per cent. returnable bottle system. May I ask him why it is going to be so difficult? In 1970, 84 per cent. of all beer and carbonated soft drinks in the United Kingdom were sold in returnable bottles, whereas in 1980 the figure was only 47 per cent.
The Earl of Avon: My Lords, my noble friend's question has been answered during the course of the debate. I think it was the noble Lord, Lord Jacques, who went through the differences over the past 10 years. The noble Lord, Lord Sainsbury, described the tremendous progress that a firm which I hesitate to mention in this House any more has also made on this very point. There is also the probability that as a result of the Bill consumers will suffer reduced choice. This point has already been spoken about.
I should mention, as many noble Lords have referred to it—and also the noble Baroness, Lady White—the Community directive. We have to bear in mind that this closely related draft Community directive is now to be considered. The noble Baroness was kind enough to say that for her it is sub judice. In view of this, it would be more appropriate to wait before considering that step forward. I equally take the point made by the noble Lord, Lord Beaumont of Whitley, in his opening remarks: When you get an opportunity to push a Bill like this you have to push it, because the
622
opportunity may not come again. It might be of interest to note that the authors of the Community directive incorporated provisions for mandatory deposits in earlier versions, but later decided that this introduction would not be appropriate, and I understand that the present draft does not include it. But of course the noble Lady may well tell me that there could be a change when she gets to grips with it.
I have demonstrated ways in which the industries and others concerned are making progress voluntarily in some of the areas recommended for action by the WasteMAC Report. That is very much to their credit, but I would not wish to encourage any sense of complacency. Industry does have a social responsibility and is challenged to find ways of meeting it which are acceptable and preferably beneficial, both to enterprises and their customers. The Government look to industry, in co-operation with other interested parties, to build further on the progress which it has already achieved and plans to achieve with regard to beverage containers. As I think I have indicated in this speech, the Government, while supporting the underlying objectives, could not, for the reasons I have described, support the Bill as legislation.
6.51 p.m.
Lord Beaumont of Whitley: My Lords, at this hour of the night I shall be very brief. Your Lordships have responded well to the plea made by the Chief Whip and I think we have gained about an hour on the standard time for the number of speakers. None the less it has been a good debate with fascinating contributions from several noble Lords. I was particularly pleased to welcome the maiden speech of my noble friend Lord Winchilsea and Nottingham, partly because it is good to have him now, having opened his batting, on these Benches and to know that we can look to him in future for other speeches of that calibre, and particularly because I was grateful for an extremely trenchant speech on the side that I was putting forward, coming from real experience.
A number of matters have been raised which can be dealt with at Committee stage. The problem of whether there should be one year for this Bill to come into force is clearly and obviously negotiable. The noble Lord, Lord Somers, made an interesting speech with a number of points which I think can be dealt with at Committee stage, and I hope he will forgive me if I do not deal with them now, just as I am going to pass over a number of interesting points made by various other noble Lords. One other possibility which could be dealt with in Committee is that this is too limited a Bill. I was surprised to hear that criticism coming from, among others, the noble Lord, Lord Sainsbury, and, if we do get to Committee, no doubt he would like to move an amendment to expand the reaches of the Bill.
Briefly, my Lords, there have been half a dozen major points which have arisen in the course of this debate. The question of hygiene was mentioned once or twice. I am glad that it was not mentioned more because it was thoroughly dealt with in the WasteMAC Report. The question of consumer preference was dealt with, but again conflicting figures were given and a lot of them were quoted from an old and very tendentious survey done by the industry. The most recent thing

623
which I think can stand up to examination seems to show quite a large majority of customers in favour of the returnable bottles.
With regard to unemployment figures, there is no reputable basis whatsoever for thinking that the net result of this Bill will be more unemployment. Some people will be out of work, but there will also be more jobs, and where we have records there will always be more jobs gained than there have been jobs lost.
The fourth point, which was made often, was that the savings that we are talking about with all the machinery of this Bill are minuscule. That has been pointed out to your Lordships in terms whereby you take a global sum as big as you can possibly get and say that the percentage is minimal. The percentages in terms of what are the actual costs in the industry are not minimal and, even if they were, I would remind your Lordships of the old motto, "Many a mickle makes a muckle". I suppose that was coined by WasteMAC on one of his better days!
The voluntary system has been praised and to a certain extent it has done a great deal of good, but it does not really begin to touch the problem. The problem will only be touched if we, as a nation, decide that we are going to touch it. One noble Lord apparently wished on me the job of withdrawing this Bill and producing another to make Britain tidier. I am not that ambitious but how one can make people tidy is by inculcating the habits and the tradition of tidiness and of recycling and of not wasting, and if I sound like an old-fashioned nanny I do not apologise because to a large degree it is old-fashioned virtues that this Bill is about.
Finally, there is the point of the cost. WasteMAC again put it quite clearly. If you produce a bottle and you use it ten times or more you save money, and they said categorically that more money is saved than is spent on the returning, on the fuel, on dealing with it, and everything else. WasteMAC is quite clear: the cost argument does not stand up.
My Lords, my plea to you tonight is to give this Bill a chance. Let it go through to Committee stage. Let us see if we can iron out some of the wrinkles. I suppose if your Lordships decide not to give the Bill a Second Reading you will have other opportunities with the report of Sub-Committee G before you, and the response of the Government. I hope that your Lordships will vote for it now. I am myself quite convinced that, whatever your Lordships decide tonight, a Bill like this will be on the statute book within five years. I say that without any doubt whatsoever. I think it would be good if we were ahead of the European directive, if we were to take our place with Denmark and the pioneers in Europe and if we were to start on this job now.
6.58 p.m.
On Question, Whether the Bill shall be now read a second time?
Their Lordships divided: Contents, 30; Not-Contents, 69.

DIVISION NO. 1

CONTENTS

Airedale, L.

Beaumont of Whitley, L. [Teller.]

Ardwick, L.

Banks, L.

Beswick, L.

624

Brockway, L.

Lovell-Davis, L.

Caldecote, V.

Mayhew, L.

Craigavon, V.

Melchett, L. [Teller.]

Denington, B.

Monson, L.

Gladwyn, L.

Mountevans, L.

Gormanston, V.

Noel-Baker, L.

Gosford, E.

Onslow, E.

Henley, L.

Somers, L.

Houghton of Sowerby, L.

Strathcarron, L.

Kaldor, L.

Tordoff, L.

Kennet, L.

Vernon, L.

Killearn, L.

Winchilsea and Nottingham, E.

Lockwood, B.

NOT-CONTENTS

Airey of Abingdon, B.

Lane-Fox, B.

Alexander of Tunis, E.

Lucas of Chilworth, L.

Alport, L.

Mancroft, L.

Avon, E.

Marley, L.

Belhaven and Stenton, L.

Mersey, V.

Bellwin, L.

Mishcon, L.

Birdwood, L.

Mottistone, L. [Teller.]

Bishopston, L.

Northchurch, B.

Cathcart, E.

Orkney, E.

Colwyn, L.

Peart, L.

Cooper of Stockton Heath, L.

Portland, D.

Cork and Orrery, E.

Rankeillour, L.

Cottesloe, L.

Redmayne, L.

Craigton, L.

Rhodes, L.

Crathorne, L.

Rochdale, V.

Cullen of Ashbourne, L.

Ross of Marnock, L.

Daventry, V.

Sainsbury, L.

de Clifford, L.

Shannon, E.

Denham, L.

Sidmouth, V.

Elliot of Harwood, B.

Skelmersdale, L.

Elton, L.

Spens, L.

Erroll, E.

Stamp, L.

Ewart-Biggs, B.

Stewart of Alvechurch, B.

Gardner of Parks, B.

Stewart of Fulham, L.

Geddes, L.

Stone, L.

Gridley, L.

Strabolgi, L.

Hailsham of Saint Marylebone, L.

Swansea, L.

Swinfen, L.

Holderness, L.

Trefgarne, L.

Hunt of Fawley, L.

Underhill, L.

Hylton-Foster, B.

Vaux of Harrowden, L.

Irving of Dartford, L.

Vickers, B.

Jacques, L. [Teller.]

Vivian, L.

Kearton, L.

Wallace of Coslany, L.

Kirkhill, L.

Whaddon, L.

Resolved in the negative, and Motion for Second Reading disagreed to accordingly.

Midlothian District Council Order Confirmation Bill
Brought from the Commons; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.

ECC 41st Report: Outward Processing of Textiles and Clothing
7.5 p.m.
Viscount Rochdale Viscount Rochdale rose to move, That this House takes note of the Report of the European Communities Committee on Outward Processing of Textiles and Clothing (41st Report, 1980–81 H.L. 269).
The noble Viscount said: My Lords, outward processing is, I am afraid, rather a forbidding term, but

625
nevertheless I beg to move that this House takes note of the Report of the European Communities Committee on Outward Processing of Textiles and Clothing. Early in the summer I was asked by the Select Committee if I would take the chair of a small subcommittee, an offshoot of Sub-committee B, to go into this problem, which was raised by two draft regulations of the Commission. I accepted to do so, Subcommittee B itself at that time being otherwise very heavily committed on another issue.
Outward processing, although perhaps basically simple I believe in commercial concept, raises some complicated technical questions of procedure. We were also as a sub-committee under some pressure of time, a not unimportant point which I shall come back to later. Outward processing can be regarded as a perfectly legitimate and sensible practice. It is nothing less than the shipping of Community material, whether it be yarn or cloth, woven or knitwear, to low cost manufacturing countries overseas for further processing, and then they are returned either in the form of cloth or more usually in the form of garments for final attention. In fact, it is little more than a form of subcontracting which we all know so well. Outward processing can be regarded by different people in different ways. By some it is feared; by others it is regarded as an opportunity to be taken advantage of, the opportunity of averaging prices at home. I noticed in a very valuable paper that the Commission produced the other day it referred to it as
"…a valuable form of industrial co-operation mutually advantageous both to the Community and the processing countries overseas".
One would only be able to accept that provided always that the extent of the practice was kept under review and control; but you cannot control unless there is first of all an adequate degree of knowing what exactly is going on; in other words, to use words which came up frequently in our inquiry, an adequate degree of transparency. That is an important part of the two draft regulations and therefore an important part of our report.
The draft regulations also provide for total or partial relief for import duties on outward processed goods where duties would otherwise be applicable, provided again that certain conditions or rules are fulfilled. The question of procedures, rules and conditions is another important aspect of our report.
Our report, therefore, deals basically not with the wider aspects of protection which, of course, very strongly influence the two industries of textiles and clothing. In other words, it is not about major issues of tariff, duty free entrants, preferences, quotas and so on. Those are important issues, of course, but they come within the Multi-Fibre Arrangement—MFA, if I may use the shortened term. This report and our debate this evening deal mainly with statistical returns for outward processing—and again I shall use the shortened term "OP" throughout my remarks, as it will save time—and harmonisation between member states of OP procedures, all aimed at making OP activities in the Community, when practised, more transparent and therefore more acceptable.
I mentioned a moment ago the question of the time factor. The overall protective arrangements for the community textile and clothing industries come under
626
the MFA—a very much wider matter altogether—which in turn stems from procedures laid down by GATT, and the current span of MFA 2, as it is called, ends on 31st December 1981. Therefore, it ends in a few weeks' time. The negotiations for MFA 2's renewal started only yesterday, 18th November, in Geneva.
We have seen in recent days, as late as Tuesday night in Brussels—or perhaps I would be more correct in saying very early Wednesday morning because it was after midnight—how difficult member states found it to arrive at what might be regarded as a common negotiating position. Fortunately, they did arrive at that position. So it is surely extremely timely that we should be considering OP today, because in my view it is bound to come up in the negotiations. If one looks at the reference to those negotiations in today's edition of The Times, it may well be that it will be a very important part of those negotiations. It is, therefore, very important that any arrangements reached on the MFA negotiations in Geneva do not lend themselves to being bypassed or undermined by inadequate rules for OP. In other words, rules should be established so that OP is under reasonable control and does not undermine the MFA.
I turn to another matter. I have the feeling—and I hope that this applies to no one in your Lordships' House at the moment—that outside the two industries of textile and clothing there will be those who will feel like throwing up their hands in disgust at any suggestion of further, as they might regard it, protection for these two industries. One can almost hear them saying, "Ah, here they go again. The textile and clothing lobbies are urging for more protection, more help—perhaps help down the drain. They are old-fashioned industries that could well be allowed to die to the advantage of some of our own more modern industries at home". One can almost hear some people say that sort of lie. But while I am not one to like setting up a row of ninepins and then knocking them down again, I feel very strongly that that point of view would be totally ill-informed and totally misconceived. I wish briefly to say why I take that view because I think this is an important part of our discussions this evening. I want to get OP into its right perspective.
It may come as a surprise to some if I say—and I say this without any hesitation at all—that the United Kingdom's textile and clothing industries are not only among the largest employers in United Kingdom manufacturing industry today—over 600,000 still—but they are also still one of the largest contributors to our national wealth. In 1979, which is the latest year for which census of production figures are available, their net value—and by "net" I am referring to value added—was about £4,500 million, or as large, if we try to get this into perspective, as the whole of the motor vehicle manufacturing industry; twice as large as the iron and steel industry and twice as large as the coal mining industry. If people say that we are only talking about the older industries, then let us take a very modern, advanced technology industry—the computer industry. It is seven times as large as today's computer industry. In the years 1978, 1979 and 1980 the exports of these two great old industries exceeded £2,000 million. Against that background we have excellent industrial relations. Investments between 1970

627
and 1979 at 1975 prices have totalled £2,000 million. Productivity has increased substantially higher than in most of British industry as a whole.
Those figures are by any account impressive. They give an impressive, broad picture and that is absolutely right. I am sure that one could point to individual real success stories. But, sadly, there is another side, a much more serious side, which has manifested itself during 1980. I am referring to the fact that 400 mills have had to close down, and there have of course been further corresponding redundancies of the order of six figures.
Today it is difficult to assess exactly what is the present picture, and it has not been made any easier by delay in getting important statistics following the Civil Service strike. However, what I think stands out very, very clearly is that these two industries—textile and clothing—are of immense importance to our national economy and certainly not expendable, as some people feel. But, like their counterparts in other member states of the Community, they are at considerable risk, and that makes the current negotiations now taking place in Geneva over the MFA so desperately important. It is against this general background that we have tried to report and make recommendations on the Commission's two draft regulations, the one of 1979 and the other of 1981. In so doing we have had very much in mind the two main interests: the interest of the maintenance of employment and the interest of the consumers, and, with them, the retail trade.
At this point I should like to go, as it were, further afield on the Continent and to consider the situation there as I have considered it at home. In so doing, may I point out that in our report there emerged a certain number of conflicting issues. I should like to mention a few of them. They are discussed in much greater detail in the report itself, but I think that they need to be highlighted. The first is that the Community is the second largest world market for textiles and clothing—second only to the United States, and forgetting for a moment Hong Kong, to which I shall return a little later on. But it is also the least protected textile market. In addition, its exports overseas meet with the minimum degree of reciprocity from most of our customers round the world. It incurs, particularly in the United Kingdom, the greatest degree of penetration—a degree which, if present MFA negotiations do not decide otherwise, could again make it open to an automatic yearly increase regardless of current market demand, regardless of recession, and regardless of any possible so-called surge of imports from new producers. That is the first very important point to emerge.
The second is that the growing impact and relevance of OP in the Community is very evident. This OP work is largely with low-cost, Mediterranean basin and state trading nations, but of course it could also be with far-distant countries such as Taiwan, South Korea, and Hong Kong, although so far as I can ascertain, commercial viability with these far-distant countries is, for geographical reasons, perhaps open to question. At the moment, as I see it, the volume of this trade with far-distant countries is not very great. None the less, there are possibilities here which
628
have to be borne in mind, and these negotiations must surely provide something for them.
I come to the third point that emerged—namely, the varying OP trading practices that the different member states of the Community employ, resulting in a lack of harmonisation of OP procedures. Indeed, in this context we found some very strong opposition to harmonisation from certain member states. The fourth point is the fact that some countries—for example, Germany, France and the Benelux countries—have specific quotas for OP outside the main textile and clothing quotas, with different rules; whereas, in the United Kingdom we have no specific OP quotas, and consequently have virtually no statistics or administrative rules.
Fifthly, we recognised the need for flexibility in any rules so as at best to cater for variations in member states' current practice without at the same time encouraging distortions of trade, such as, regrettably, we also found was practised in some countries—and I have a note here suggesting Belgium and Italy.
Sixthly, there was the difficulty—and this was a real difficulty—of equating any import quota system which was aimed at giving fair shares as between member states with the Community's recognised policy of non-discrimination and free circulation. This was a real difficulty. Finally, the last point that emerged was the uncertain effect of Community enlargement.
It was against these difficult and, as your Lordships will see, often conflicting considerations—the difficulty compounded by lack of information—that we came to our main recommendations. I would emphasise that these main recommendations were made on the very important assumption that MFA in some form continues.
The first recommendation that we made was that in principle the two draft regulations of the Commission should be supported, though perhaps subject to detailed further consideration and certainly to some clarification. I should like to give your Lordships one particular case where clarification seemed most important, and this was a point that was brought to our attention by the TUC. It was the doubts as to the position of multinational companies in this whole affair.
Our second main recommendation was that British industries would be best protected by the introduction of special or specific OP quotas in the United Kingdom. We realise that this recommendation would mean a change in Government policy. It could add some administrative costs. But we regarded it as most important and we would urge its adoption. However, I want to underline a point here; lest there be any doubt at all, these special quotas should come within—that is to say, should come as part of—the ordinary quotas and should not be additional to the normal, overall textile and clothing quotas. On reading our report, I recognise that perhaps we did not make that sufficiently clear, but it is a very important point. We assumed that these specific quotas or sub-quotas—or whatever one likes to call them—should be reserved for manufacturers, the size of allocation to any one manufacturer to be limited to some accepted percentage of his own domestic manufacture, to be decided by each member state. A moment ago I mentioned that one of the points that emerged was the need for flexibility. This last point—that of the percentage to be decided

629
by each member state—would be an example of possible flexibility in the operation of these rules.
Before I come to the third major recommendation that we make, I should like to say a few words about our friends in Hong Kong. The present negotiations taking place in Geneva are, of course, worldwide. A large number of different countries are taking part. Many of those countries will have different points of view to varying degrees; some agreeing with us, many perhaps not. It seems to me that in such cases it would always be useful to hear an opposite point of view, especially if it comes from friends. So a little while ago I wrote a letter to the noble Lord, Lord Kadoorie of Kowloon, who made his maiden speech in your Lordships' House just the other day, and asked him if there was any chance of his being with us this evening. Regrettably, he said no, but he took a great deal of trouble, with great courtesy, to give me three points that I could pass on and which I think are helpful.
First, he wondered whether there was a possibility of trying to put OP within the framework of existing bilateral textile restraint arrangements, or whether in the event that might prove to be self-defeating. Secondly he wondered whether it might be contrary to the United Kingdom's GATT obligations to confer most favoured nation treatment to all contracting parties. I will not pursue that except that my own personal feeling is that, as the MFA itself comes under GATT, I should have thought it would have overridden the other obligation to which he referred, but other noble Lords—perhaps my noble friend Lord Bellwin—may like to comment on that. I am not an expert on the interpretation of that.
Thirdly, the noble Lord reminded me that Hong Kong is the world's largest importer of textiles. It is a free market, and the United Kingdom accounts for only the tiniest little percentage of that market, despite the fact that, as I have already told your Lordships, we have a very large export trade indeed. I thought it was worth just mentioning those points to your Lordships in order to give a fuller picture to the whole matter.
My third main recommendation, which is an important one, was that the Commission should use its powers under Article 115 of the Treaty of Rome to the fullest possible amount to protect industry. We urged this having very much in mind what we said in paragraph 43 of the report, where we referred to the potential conflict between the Community's principle of free circulation and non-discrimination on the one hand, and a background of national quotas on the other, especially when some of those national quotas may not be fully taken up.
There are other important recommendations in paragraph 42. I am not going into any detail on those, except that I would just mention one. That is the one mentioned in paragrah 42(c), where we urge the criterion of volume rather than value added for determining each manufacturer's share of OP quotas. We were persuaded that that would be very much clearer and less open to abuse. We have directed our attention for the most part to matters likely to concern United Kingdom industries. But, speaking for myself—and I hope my noble colleagues who were on the subcommittee with me will agree; I feel they will—issues
630
raised have their counterparts very much, though in varying degrees, in all the textile member states of the Community. Indeed, they are bound to have their effect far wider in international trade.
I suggest that efforts to solve them will be far more likely to succeed on a Community basis than when approached by individual member states. That was why I was so pleased, as I mentioned earlier, that at the eleventh hour member states agreed on some sort of common negotiating position for the discussions in Geneva. We certainly did not claim to have all the answers in these abstruse, difficult and complicated matters, but I very much hope that our report will have helped to concentrate thought to the advantage of ourselves in this country, and I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on Outward Processing of Textiles and Clothing (41st Report, 1980–81 H.L. 269).—(Viscount Rochdale.)
7.35 p.m.
Lord Rhodes: My Lords, when I came this morning I had no idea that I was going to make a Front Bench speech. May I say that I am very pleased indeed to have the opportunity to support the noble Viscount, Lord Rochdale, who was the chairman of this committee, in what he has had to say about it. It says in our report that the second proposal that we are discussing was made earlier this year as part of the preparations for the MFA negotiations. Therefore, in a way it is tied into the MFA negotiations which are taking place. They had a meeting on 27th October, they had a meeting in Geneva on 10th November, and they had one yesterday. I wonder whether the Minister when he replies would give the House some indication as to what has happened up to date. Are they still "argy-bargying", or what is happening?
Outward processing, as the noble Viscount, Lord Rochdale, has said is not new. It has been going on for hundreds of years. Indeed, in 1955 I attended a celebration in Prato, Italy, commemorating the six hundredth anniversary of a character called Francesco Datini, who straddled the wool trade of the world. He bought his wool in the Cotswolds and Spain, and he had it spun by the deft fingers of Andalusian women. He wove the yarn in Prato. He did it to exploit the best craft skills and the cheapest labour in the world.
He himself wrote 150,000 letters; 48 account books were on exhibition at Prato University. The work of one man, who was probably the forerunner of what we know to be outward processing. But the modern version is something quite different. It aims at averaging prices to remain competitive. The two draft regulations are the EEC Commission's answer to the clamour from the clothing and textile industries about imports, which include outward processed goods.
It is funny that it coincides with what we are discussing, but may I say that this week is one of the most poignant for me that I have ever had in my life. It is just 60 years since I started my own textile factory, after two and a half years in hospital after the war was over, with my wound gratuity. It was in a wooden hut with looms that I bagged off a tip. Every year for 40 years there was not a year where I did not extend it to something. Never working a minute's

631
short time. And to protect the continuation of the factory I sold it in 1961, but this week all the work-people have received their notices, some of them having worked there for 40 to 50 years.
Not all closures are due to imports, but from our industry we have lost scores of thousands of wage earners. Nothing makes me more cross than when I see a TV announcer referring to this as "getting rid of surplus labour". Getting rid indeed! The cynics say that the slimming process which has been going on will produce a more streamlined and efficient industry. That may be so, but we should not forget that while industry can shake out surplus labour to improve its balance sheet, a country cannot do that. The result is that the United Kingdon is now like a company which needs extra production to absorb its fixed labour assets. That is what outward processing is about and what our report is about.
We live in a turbulent world and the only likely alternative to the sensible development of any Multi-Fibre arrangement is not free trade, however desirable, but an even greater closing of frontiers as governments react to their domestic forces. We must therefore shape a system by which we can retain as many of the advantages of market decisions as possible, and as few as possible of the disadvantages of partial or one-sided restrictions. The system we adopt must be simple, with clear rules, and in our report we have attempted to suggest what some of those rules should be. The present MFA system towards which the world has groped its way has been a good attempt to solve the problem, but it is far from ideal and perhaps some of the suggestions we make will not fall on deaf ears.
The first proposal really begins in 1979, but it has since become out of date because of the change which has taken place as a result of the enlargement of the Community. Incidentally, the first proposal ran into the sand. The second proposal was made earlier this year as part of the preparations for the Multi-Fibre Agreement negotiations, and from the dilatory way in which the Commission handled the first proposal, I got the impression that the Commission had no heart in it and that it was a perfunctory gesture. However, I want to correct that now because something happened this week which has changed my opinion. The Commission has come up with an appraisal of the present situation in textiles and clothing in Europe which is the best I have seen come out of the Common Market for many a long day; it is absolutely first class and I recommend the industry to study it. At long last they are appreciating what the situation really and truly is on a worldwide basis.
We must remember, however, that the proposals we are looking at tonight are non-starters so far as we are concerned because they apply only to countries which at present have outward processing quotas. So although we in our committee have been examining and discussing the suggested outward processing regulations, as a point of fact they have no relevance unless a country has an outward processing quota. The countries which have specific quotas are Germany, France and the Benelux countries. But their monitoring systems are far in advance of ours. Moreover, the
632
ones with quotas resolutely refuse to divulge the size of them. It is about time they were asked to do so.
A question on that point might not go amiss: If we adopt a quota system for outward processing in the United Kingdom inside the total ceiling of existing quotas for textiles, as we recommend in our report, would the proposed rules then apply to us as well? I hope the Minister understands what I mean; if we as a country adopt a system whereby we have quotas for outward processing inside the ceiling which we have, would we come under the rules as suggested in accordance with what we are discussing?
A word on quotas might be apposite. At the moment, United Kingdom outward processed goods are treated no differently from the other exports from an exporting country and are subject to the same quotas. The Multi-Fibre Agreement, and bilateral agreements, with state trading nations, contain textile quotas as a whole. These are broken down to quotas for individual member states and they are fairly well monitored because, for those imports, there is a dual licencing system. Let us be sure on this question of quotas that we understand what is meant. Licences are issued by the exporting countries, and matching licences are issued by the importing countries so that the risk of abuse might be minimised. But it is from the Mediterranean countries that the threat comes because only one licence is issued there, and that is by the exporting country itself. That is very important. It is ineffective, it is abused and it should be stopped, and the dual licensing system should be adopted forthwith.
Another abuse arises from the principle of the free circulation of goods within the Community, and this is not implicitly understood even by members of the trade. I will try to clarify the point. Supposing France and the United Kingdom are each given a member state quota, and then France finds she does not want the stuff. There is then nothing to prevent France from exporting those goods here. The only remedy we have is under Article 115 of the Treaty of Rome, and then only when we find that our quota has been exceeded by a minimum of 20 per cent. Only then can we apply to the Commission for permission to stop any more coming in, and by then the damage has been done.
If noble Lords go to the trouble to read through our report they will see that one of the departments—I think it was the Department of Trade—was represented by experienced people and that when the question arose as to the application of Article 115 and the ability to stop imports which we were not entitled to receive, we were told that even the Commission itself did not believe that the application of Article 115 to those imports was legal. I should like that to be confirmed or denied because it may have been a slip. I do not know, but certainly the suggestion was that even the Commission did not believe in the validity of Article 115 when applied to Mediterranean countries.
I have said before that the United Kingdom has no separate quotas for outward processing goods. Now listen, my Lords, to this recital of what we have not got. No record is kept of the proportion of textile and clothing imports represented by OP. There is no record of OP goods which enter this country duty-free under one of the Community's preferential agreements. No information is available about the levels of OP goods entering this country from other member

633
states under the Community's free circulation provisions, and there is no information of the amount of OP carried out by retailers and traders as compared with manufacturers. What we need are better communications, better statistics, better information all round.
The Government departments hazarded a guess as to the importance and the relative size of the outward processing trade, and they said that £3½ million out of a total of £2,000 million can be attributed to OP. I think that this lack of information leaves us in a very weak position. It is really time that it was tackled seriously. The opinion of the Committee is set out in paragraphs 39 to 43 of the report and, by and large the noble Viscount, Lord Rochdale, has enumerated some of the points. We have of course had reactions from pretty well all the elements in either the textile or clothing industry. So far as I can make out the only recommendation that has had any doubt thrown upon it was that contained in paragraph 41, where we said that we should introduce specific quotas for OP. The British Textile Federation had second thoughts about that, and it might he that the interpretation of what we had in mind has not been adequately conveyed in paragraph 41. However, I would ask those noble Lords who are in possession of the report to look at page 21, where I asked:
"Is not the nub of all this that in the absence of agreement in Europe to get common rules that everybody understands and can be carried out, we in this country need rules of our own?"
The answer was, Yes, indeed, that was right. I specifically said that
"in the absence of agreement in Europe"
we should do what we say in paragraph 41. That is only one small point on which there has been any kind of difference between the recommendations that we have made and the opinions of the people in the trade
The trade is faced with the most critical period that I have ever seen facing it during the whole of my lifetime, and I began in the industry at 12 years of age. I do not believe, for instance, that we have reached rock bottom in terms of numbers employed in the industry, and in many ways what is happening shows up the weakness and the dilemma that the whole industrialised world is in at the present time. I believe that there will be many more redundancies, and they will be caused on two accounts, apart from cheap imports. The human form has baffled the automatic experts for a generation, but my information is that with the introduction of the microchip this is likely to be overcome. It is now partially in operation in Finland, and is wholly in operation in one large factory in Japan. If that is so, there is going to be an absolute revolution in terms not only of textiles, but of clothing. We have noticed that during the last 20 years there has been a revolution. We have had jeans. Perhaps it was the desire of those who wear jeans to be anonymous—like the beard. The period of austerity that we are entering will step up this desire for anonymity, and extend it to the older people. So we are in a dilemma there.
Because of automation by microchips we shall lose operatives, or if not through microchips it will be due to lack of competitiveness, because we have not got microchips. We are at a serious juncture. In the Committee we have made an attempt to be constructive,
634
to help to tide over until better times emerge.
7.57 p.m.
Lord Tordoff: My Lords, it is difficult to follow someone with the experience of the noble Lord, Lord Rhodes, in particular when I can claim so little knowledge or experience of the textile industry. Apart from having been born in Lancashire, and having been a supplier to the noble Lord, Lord Kearton, at some stage in my career in the chemical industry, I have no detailed knowledge of the textile industry. Indeed, I agreed to serve on the Committee largely as a matter of serving my apprenticeship as a newcomer to your Lordships' House. I must say that I welcome that experience, and I have certainly benefited from it by listening to the comments of such experienced noble Lords, and through the chairmanship of the noble Viscount, Lord Rochdale, who took us through this extremely complex matter with great care and skill. I am grateful to him for that.
Speaking as I do from these Benches, it will not surprise your Lordships that whenever there is the slightest whiff of protectionism in the air I become gravely suspicious and perhaps even hostile. I do not need to tell your Lordships the dangers of protectionism: the ultimate loss of competitiveness, the lack of investment, leading I believe eventually to even greater unemployment than we have at the moment. I was pleased to hear what the right honourable lady the Prime Minister said in her Mansion House speech the other night on this general subject. We cannot afford to allow ourselves to become hidden behind the whole barrier of import controls. The dreams of some Marxists in the country that somehow they can set up a fantasy state, surrounded by import controls and high tariff barriers, is total anathema to my colleagues on these Benches, and equally it seems to me hypocritical to welcome the Brandt Commission report, while at the same time exporting unemployment to the third world.
Having said all that, I say the textile industry is clearly in a totally different category from many other industries in this county. It is a great strategic industry. It is an industry that really must be preserved in some form or other in this country if we are to survive at all as an industrial nation. It has, after all, done all that was asked of it over the last 30 years. The noble Lord, Lord Rhodes, says that there may still be some slimming down to do, there may still be jobs to go, and I fear that he is right. But the textile industry has reinvested, it has gone for new technology, it has gone through the painful process of redundancies, and yet it still finds itself in a position where, I agree entirely, in spite of my inhibitions on protectionism, it needs Government intervention, it needs to be sustained and supported.
I find it interesting that outward processing seems to be a system whereby, although not everybody could get the best of all worlds, at least the best could be shared equitably among the people involved; that the modern technology and the skills of the United Kingdom textile industry could be brought to hear on certain parts of the process; that the more labour-intensive areas of the process could be dealt with in the less developed countries; and that at the end of the day the consumer in this country, by averaging the prices, also got a better deal than he would otherwise have got.

635
So, to come to the committee's recommendations, if those three things are going to be kept in balance it seems to me to be axiomatic that the OP quotas must be restricted to genuine manufacturers; otherwise, we shall be losing part of the benefit which can come to this country, and that, I think, would be a mistake. Furthermore, if we accept that this is going to be an important part of sustaining the textile industry in this country, I think that, as the noble Viscount and the noble Lord have said, we really must have more facts at our fingertips to deal with the problem. I am very cautious of increasing form-filling in this country. I am very conscious of the fact that the Civil Service has enough statistics to play with to keep it busy for quite a long time; but I think that in this particular area there is a need for more information. We found it very difficult, I think, to find our way through this jungle, having no real facts at our disposal, no real numbers to play with.
Of course, the problem is not just one of the collation of statistics centrally; it is also the problem of manufacturers having to extract the statistics and fill the forms in, which is where the cost lies. Too many of our industries today find themselves having to bear unproductive overheads in filling in forms. We all know that. I suspect that we have slightly ducked the issue in the report, and in paragraph 40 we make some slightly sanguine comments. We say, talking about statistic-gathering:
"Indeed the task may be both cheapened and simplified by modern information technology".
So it might; but I would not honestly put all my faith in computers at the moment. My noble friends in the Social Democratic Party have put quite a lot of faith in computers so far as membership lists are concerned, and I think the situation is that they do not know how many members they have.
I happen to believe that in the long run it provides an opening for Government, and it may be that in some years' time we shall find ourselves not receiving forms to fill in but receiving a programme from a Government department to fit into our micro-computer, which will extract the facts and figures that are needed. But, of course, the problems of compatibility of computers are far from being resolved, and I think that is a long way away. So I think, as I have said, we are being a little sanguine about expecting modern information technology to solve the problem of form-filling, but at the end of the day we must have the information if this sytem is to be properly monitored.
I also agree with the recommendation in the report that it is simpler to work on the basis of volume rather than value-added. It seems to me that once we get into the area of value-added it will become the bureaucrats' dreamland. All sorts of hesitations and qualifications will be hedged round the definition of what is value-added. Volume seems to me to be a fairly straightforward way of looking at it. I also agree with the other recommendations, which talk about flexibility. As the noble Lord, Lord Rhodes, has said, we are moving into an established area in terms of Benelux and Germany, and it is unlikely that that situation could be significantly restructured. I therefore think we have to live with it as it is, and therefore there has to be flexibility.
636
But if there is going to be flexibility then clearly something must be done about free circulation. It is very worrying, as the noble Lord pointed out, that Article 115 may be seen to be an inadequate protection. I hope that this is something that the Government will be able to respond to, because it is crucial, it seems to me, to the whole system. Because if there is free circulation without any control at all, then our industry could easily be swamped by countries, particularly Germany, which rely much more heavily then we do at the moment on outward processing.
Finally, there is just one matter in the report on which I am slightly uncertain, and that is the matter to which the noble Viscount referred. It is the question of whether the OP quota should be inside or outside the total quota. There is no doubt that the evidence we received indicated very strongly that it should be inside the total quota. The only hesitation I have is that if we are going to take a view in the multi-fibre negotiations which is too stringent, then I hope that some flexibility can be allowed at the borderline, as it were, between the total quota and the OP quota. I was worried by the reports that I saw in the press last week that the Government were taking a very stringent line on the Multi-Fibre Agreement, and I hope that they will be a little more flexible than they appeared to be at that stage. I am glad to hear, although I have not read it myself, that the European negotiators have now got their package together and have an agreed stance in the negotiating process.
Having said all that, my Lords, I thank the other members of the committee for being patient with me in my first attempt as a member of a sub-committee, and I thank your Lordships for listening to me tonight. I ask your Lordships to support the recommendations of the committee.
8.7 p.m.
Lord Kearton: My Lords, it was a privilege to sit on this committee, under the chairmanship of my noble friend Lord Rochdale. As he said, it is a complex subject. He guided the committee through it brilliantly and I think his exposition tonight has been a model of lucidity. The very complex questions have been put fairly before your Lordships, and the reasons for the recommendations of the committee have been very clearly and concisely explained. The support he has had from my noble friends Lord Rhodes and Lord Tordoff make it, I think, unnecessary for me to do more than to say that I warmly commend the conclusions of the report, expressed as they are in the form of opinions.
Outward processing is already an important part of the European textile industry. It has played a comparatively little part in the United Kingdom textile industry until now, but outward processing will undoubtedly grow as a factor in United Kingdom trade. There are ways of using and regulating this development to give support to the United Kingdom textile industry, and these are the ways to follow. They are outlined in the recommendations of the report.
The point I want to stress is how important it is, in my view, that outward processing be regarded as a replacement for some of the existing import trade, and not as an addition to it. The textile import

637
penetration into the United Kingdom market is over 30 per cent. by value and over 60 per cent. and nearly 70 per cent. by volume. Two-thirds of the volume comes from outside the Common Market itself and about half is from the low-cost countries. It is worth stressing that the record of the Common Market and of the United Kingdom in taking imports from the low cost countries is better than that of the rest of the developed western world, and particularly better than the record of the United States and Japan. It has been said by the noble Viscount, Lord Rochdale, that the textile and clothing industries of the country are still the most important creators of our national wealth and most important providers of jobs. About 10 per cent. of the jobs in manufacturing industry are in textiles and clothing.
There has been in the last few years a great job loss; 400,000 in the period 1970 to 1980; 120,000 in 1980 alone and, as Lord Rhodes reminded us, the process is continuing in 1981. This job loss of 400,000 is half the total job loss in textile and clothing in the whole Common Market area. We have taken a disproportionate share in the period—40 per cent. of our labour lost their jobs and 20 per cent. of the rest of the Common Market lost their jobs.
The textile industry of the United Kingdom with which I was associated for 30 years has changed enormously in the post-war years. It has been a dynamic industry. One has had the rise of man-made fibres which, coming from a small base, now account for more than half the total fibre usage of our country and of the world. There has been a relative decline in cotton, as Lord Rhodes and the noble Viscount hinted. The decline of cotton has caused a Brest deal of lobbying from Lancashire but at the same time as Lancashire was declining other branches of the textile industry were growing strongly. We have had the growth of knitting; we have had new fabrics with new properties, new finishes, new dyes, new styles of clothing, new fashions in home furnishings, new industrial end uses. There have been great advances in technology. Spinning has been revolutionised by the open end processes which increased productivity by a factor of four to five. In weaving, the advent of wide width looms, airjet and waterjet looms, and so on, which have revolutionised productivity, flexibility and versatility. Development in knitwear machines has been spectacular. Similarly in dyeing, in finishing, and in printing, there have been advances leading to better quality, greater range of end products, and better value.
We have now reached the stage, as Lord Rhodes has said, of getting some automation on the garment side. It began on the cutting side and it is beginning to take effect in some areas of garment production. I should like to draw the attention of the House to the fact that the rate of productivity increase in the textile and clothing industries has been better than in nearly every other branch of our manufacturing industry. This picture of the textile industry as a sorry and declining industry could not be more wrong; it has been vigorous and dynamic and the processes are continuing.
For most of the period since the end of the war job changes and job losses could be accommodated. We had high employment. I sat on a "Neddy" in the 1960s when we were worried about unemployment
638
going to about 400,000, but as people were displaced they could find other jobs. From my own experience, Courtaulds rationalised production in the 1950s and 1960s and more than 10,000 jobs were lost; but all the people concerned were absorbed. In the late 1960s and early 1970s, Courtaulds were engaged in some partial rationalisation with Lancashire Spinning and some 12,000 jobs were lost; but all the people were absorbed. As part of that rationalisation, the productive capacity was increased by 50 per cent. and the people employed in producing it were reduced by 50 per cent., which is an indication of the great increase in productivity which has characterised the industry. Courtaulds became engaged in the rationalisation of some parts of the garment trade, and several thousands of jobs were lost. In my 10 years as chief executive there have been rather more than 30,000 jobs lost, but the people have been absorbed. When Courtaulds shut down on Merseyside strenuous efforts were made to find employment for the people on those sites.
Now it is a different situation. When people lose jobs now, they are not absorbed, and in my view, they are not going to be absorbed. I gave a paper to the London Business School four years ago, when unemployment was at 1·4 million. I forecast the inevitable rise to between three million and four million as we got rid of overmanning and became more efficient, and I made the melancholy forecast that, with radical changes in attitude, our unemployment rate was likely to rise to 20 per cent. or more—in other words, that there would be unemployment figures of five to six million. That was some four years ago, and events have not led me to change my views. My opinions have been strengthened.
It has been claimed that we may have reached the bottom of the current recession. That may be true. Also, Government Ministers say that the climb-out will be slow. In this House, the noble Lord, Lord Cockfield, in the debate on the Address, said that he thought the country would be fortunate to get a growth of between 1 per cent. and 2 per cent. per annum for the rest of the century. If that forecast is true, nothing will stop unemployment from rising very sharply. Mr. Ivor Richard, the European Commissioner, in an interview recently indicated that he was beginning to be alarmed by the thought that unemployment in the Community will rise from over 9 million (the present figure) to between 12 million and 14 million by 1984–85.
In the wider grouping of Western nations, the OECD, unemployment has already reached 24 million and many observers believe that it will inevitably climb to 30 million. We have a situation of low growth, of static, and in many cases mature, markets. The fact that so many markets are mature is only slowly beginning to dawn on people. The great growth in productivity worldwide after the war depended upon the appearance of new products, new wants. The rate at which new products appear now is very much slower than in the past, so that the dynamism of new products which helped to give the great postwar growth seems to be coming to an end. The corollary is that competition for jobs between the industrialised nations of the world will get more and more severe.
There is talk nowadays about how we should get out of the "sunset" industries—and the noble Viscount, Lord Rochdale, indicated that some people think

639
the textile industry is one of these—and enter into the "sunrise" countries. This is a mirage. For Japan, textiles and clothing were very much a sunrise industry for nearly the first 20 years of their growth. Whatever their achievements since in other areas, the Japanese have kept a large, dynamic textile industry. It is still a most important part of the Japanese wealth-creating process. None of the so-called sunrise industries that I have looked at in the last few years, whether it be the development of microelectronics or telecommunications or more technological and biological processes, is labour intensive. The new processes which are making their appearance are not going to absorb a great deal of labour. We all very much welcome the evidence which has been given to set up small ventures. But I think that the idea that a great number of small ventures are going to provide a real great chunk of new employment is like the sunrise industry thesis—a mirage. So, in my view, industrialised countries may have to make jobs just for jobs' sake, not wealth-creating jobs, to keep their people employed.
Turning to Japan, it is very striking that Japan has monumental inefficiencies in certain parts of its internal structure. It has efficiencies which threaten the rest of the world in certain narrow-band and major industries and is most efficient in those industries. There are all sorts of other areas where Japan is grossly inefficient. This is one of the reasons why their unemployment ratio is low. However, because they can run a positive balance of payments, even when they have to spend half their export earnings to import energy, they can still get back, as they have done, to a positive balance of payments because they control their industries very closely and do not permit access to their market very readily. Again, while I am talking of mirages, I think that the idea that the Japanese can be talked into opening their markets to Western production to any great extent is wishful thinking. The only way that they can keep their own economy going, their own country stable, is to make sure that their domestic market is to all intents and purposes protected when it comes to manufactured goods.
I should like to stress that when it conies to textiles and clothing, where we have rather more than 600,000 jobs, we should take every step to protect the jobs that we have. One sees in Northern Ireland and other places vast sums of Government money going to promote the creation of a relative handful of new jobs, while at the same time vast employing enterprises are shut down through lack for a little time, of Government support. This seems absolute nonsense. In the textile industry, if we are going to have a static world market—and my noble friend Lord Rhodes referred to the report —in the recent EEC Commission report their own view of the growth of the textile trade of the developed countries for the next few years ran at 1 per cent. to 2 per cent. per annum.
The inevitable increase in efficiency and productivity in all the different textile processes is bound to mean less employment in the textile industries of the Common Market. If we are going to maintain our own employment in this country at present levels, we shall have to get back some of the production that
640
we have lost. That is not going to be easy. The production of man-made fibres dropped 15 per cent. in the first nine months of this year as compared with the first nine months of 1980. Wherever one looks, the task is very difficult. In its overseas trade the country has quickly become too dependent—frighteningly dependent—on the oil and gas of the North Sea. The value of the production and current money is about £17 billion per annum. If we did not have it we would have to increase manufacturing exports by 40 per cent. to pay for energy imports, a task which in the present state of our manufacturing industry is clearly absolutely beyond us.
While it is so marvellous to have the North Sea oil resources, they are finite, they are not going to last more than two or three decades. If we finish up at the end of that period with a manufacturing industry which is not fully competitive with the Japanese or Americans—and in fact is better than the rest of the world—we are going to have a very unfortunate century for our country from the year 2000 onwards.
It is because of all this that I feel, regarding the directives from the Commission, we should do everything we can to sustain our manufacturing industry, including textiles, and take every step that we can to increase it. In this connection, I should like to say how encouraging I have found the recent speeches of some of Her Majesty's Ministers. In the debate on the Multi-Fibre Arrangement in the other place in the summer, I thought that the Secretary of State for Trade was extremely robust in his general attitude. This was very much welcomed by everyone in the textile trade. The events of the past two years have reduced morale dramatically. I trust that the actions of Her Majesty's Government in the next few months will live up to the encouraging words which have been used in speeches.
To conclude, my Lords, the adoption of the recommendations and opinions of the Select Committee which deal with outward processing would greatly strengthen the confidence of the industry and be very well received.
8.25 p.m.
Baroness Lane-Fox: My Lords, most of us who were born and brought up in the West Riding of Yorkshire feel very close to the textile and clothing industries and their impact on the community. It is not only management and employees and their families who are so closely affected but also the voluntary organisations which have in the past received munificent support from generous and inspired industrialists and from the charitable funds of the trades over many years. The real romance of these industries is that they have so often relied on enterprise and dashing initiative to reach success, and on cool courage to get through the troughs. Their manufactured products traditionally are the envy of the world. This is part of the very life fabric of many people in the United Kingdom.
Of course there are recessional and other causes for the current faltering uncertainty as to the future of these industries: but, for about 25 years, the terms "country of origin" and now "outward processing" have hung like a threatening fog over the whole area. The report now debated, which proves to be so topical and in step with what is happening in the EEC, draws attention to the need for more statistical information

641
to be given to the Commission to achieve more transparency—in other words, to try and clear the fog.
I was interested to read in the report some of the evidence given to the sub-committee. The evidence showed that the British Clothing Industry Association considered advice as to the levels and patterns of OP trade from and within the EEC to be sadly lacking. Nevertheless, it is their belief that the outward processing system is growing and here to stay, and that if we do not take part we will be left behind.
The British Textile Confederation has fears of OP and seeks specific provisions to particular problems. But they recommend this report for debate which itself surely is encouraging. Throughout, there is attention drawn to the need for more facts and information. The committee consider that with the effective use of computers, the cost of the extra staff needed should not be excessive. I say this despite the remarks to the contrary of the noble Lord, Lord Tordoff. I say this with hope.
Certainly this progress is essential in terms of helping employment prospects in these industries and too of preserving the skill and marvel of, for instance, the Yorkshire textile industry. I add my support to the report and I ask the noble Lord the Minister to forgive me for being unable to stay for his summing up, which I shall take great pleasure in reading in Hansard.
8.29 p.m.
Lord Arcwick: My Lords, I rise with unaccustomed humility because I do not share the expertness on the textile industries of my colleagues on the sub-committee, and particularly those people who have spoken tonight. Indeed, I am humbled by the vast experience of my noble friend Lord Rhodes, who began when he was a boy of 12 almost eight decades ago. This experience was expanded by his spell as a Minister, and has recently been extended by his trips to China and the United States. I was drafted on to this sub-committee like the noble Lord, Lord Tordoff, because I, too, am a Mancunian. We might have had a rich debate if we had had more Mancunians: for example, if we could have had the noble Lord, Lord Lever, to talk to us about the finance of the industry, or the noble Lord, Lord Sieff, to talk to us about the retail aspects. However, we must make do with what we have got. I think that perhaps a more substantial reason why I was drafted is that I was once editor of a Manchester newspaper and, as such, had to learn something of the industrial, trading and political problems of the cotton trade. Of course, that trade has no longer the central importance that it once had. There is a splendid Welsh entertainer, Max Boyce, who sings a haunting song about the pit closures in South Wales with the chorus:
"The pithead bath is a supermarket now".
I always feel that Manchester should have its equivalent:
"The Royal Exchange is a city theatre now".
It is a very strange thing, but I may say that it is a very good city theatre.
All my experience of the textile world is long past, but in the European Parliament, as I became concerned with the Multi-Fibre Arrangement and other problems, my interest in the vicissitudes and the sparkling achievements of the industry was revived. Indeed, the industry posed one of the most fundamental problems
642
of the Community—a fundamental dilemma not yet resolved. The heart of the current dilemma is that we seem to have developed a chronic imbalance between the number of jobs and the number of people who want to do them: a growing number of workers and a diminishing number of jobs. But we still have a number of industries which employ large numbers of people—labour-intensive industries, as they are called in the jargon of the day—and the clothing and textile industries belong to this class.
In spite of the recession and the lean years since the oil price increases in 1973, as has been pointed out by more than one speaker in the debate tonight, they still employ 600,000 people in the United Kingdom and provide a tenth of all manufacturing employment. The figure for Europe is very similar—about 10 per cent. of the industrial jobs are in textiles. The figure I have for job losses from 1973 onwards is slightly different from that which the noble Lord, Lord Kearton, gave. The figure given to me was 30 per cent. and I think the noble Lord said 20 per cent. However, my figures are figures that were given to me and I did not make the count myself.
In these difficult conditions the industry has had to meet competition not only from the developed but also from the developing nations. Yet the idea of giving textile industries more substantial protection goes against the philosophy and perhaps the material interest of the Community and of this country, for we are world traders, heavily dependent on world trade remaining relatively free—but of course the emphasis is on the word "relatively". Of course there are a few ideologues who would have everything subjected to remorseless competition and trust to our ingenuity to take us into new industries outside the scope of the developing world. But this is a theoretical position which cannot be held by those in the threatened industries, either as workers or owners, because the time lag between the abandonment of old industries and the achievement of the new industries is too long and the cost is too high in terms of wasted human and material resources.
Somewhere between these theoretical extremes of the siege economy—there can be no such thing as that, but there is a concept of it—and classical free trade we have to find a compromise which keeps people at work and leaves room for innovation, while acknowledging our duty and material interest in encouraging the developing countries to industrialise. I may say that I will not reproach a member of the Government for the difference between the words of the Prime Minister the other day and what has actually been going on in Europe. It seems to me that we trust in God at the Mansion House, but we take a more robust view of our interests in Geneva.
It seemed to me when I first went into the European Parliament that the Multi-Fibre Arrangement was a model which other industries could follow by increasing the quotas of low-cost producers as the European economies expanded. That seemed to me a civilised and decent thing to do; but that was conceived in a world which was still full of economic hope, compared with the bleak future which has been making it so difficult during the last few days for the Community to evolve a collective view on what I think is now called MFA 3.
I am very glad to hear that it looks as though that

643
particular problem has been solved, but it is in the context of all that we have been saying, and all that the noble Lord, Lord Kearton, has said with such eloquence and expertise today, that we have to consider the report on outward processing. Of course, it is only an extension abroad of the most ancient practices of the textile industries and indeed of the clothing industries. It is not very different, I suppose, from sending waistcoats for button-holing from Savile Row to the East End of London, except that the East End is now perhaps the Far East or the Middle East, shall we say? This processing is sometimes carried out abroad in countries where the cost of labour is lower than it is here. The question that has to be decided is not whether this is to be done at all but how much of it is to be done and how the abuses it makes possible are to be checked.
Of course OP confers some immediate benefits on people in this country who are able to provide consumers with goods cheaper than those produced in Britain, and firms which have used OP are said to have been able to compete more effectively in world markets because the system enables them to reduce their costs of production. To some extent it may save some British jobs which might otherwise be lost. So much for the benefits, but there is one immediate penalty, too, because work is being done by people in other countries which could be done by people here, and at a time when unemployment is at an unacceptably high level and shows little sign of being reduced. A Germany whose industrial success has produced a more robust psychology looks upon OP as an opportunity. Here we have more concern about the effect of it on employment. But how many jobs are being lost in Britain we do not know. There is an impression that OP is increasing. How much effect it is having in this country we really do not know, because only a minority of such goods are subject to a tariff and it is only when a rebate of a tariff can be claimed for the proportion of work done in this country that we get an OP statistic. Other OP goods come in under the quota of the country where they have been processed and so are indistinguishable from goods produced wholly abroad.
The Government seem to have a peculiar reluctance to collect the statistics, seemingly because of the cost of such an exercise; but our committee, as has been said earlier, came unanimously to the conclusion that the Government should reconsider their policy. Perhaps they would find that the exercise would be less onerous and less costly in these days of new information technology. The evidence we received suggested that we should have specific quotas for OP goods, just like fellow members of the Community. Again, there was a strong feeling, which was very strongly supported by the industry, that this should not be a means of allowing more imports to enter the British domestic market; rather should it be used to keep the system within reasonable bounds. It must not be a loophole through which goods from low wage and state trading countries can pass and avoid the EEC restraints upon them.
And there should be a check to the abuses. The noble Baroness, Lady Hornsby-Smith, who regrets very much that she is unable to take part in today's debate, gave me the other day one or two examples of
644
the kind of abuse that she has come across, contrasted with legitimate use of the system. The kind of justifiable co-operation occurs when valid manufacturers provide cloth from the country of origin and have it made up abroad. Some German firms, for example, co-operate with firms in East Germany to such an extent that they actually go across and supervise the quality of the work on the spot. That seems to be quite reasonable. Or there may be well-made dresses in the United Kingdom, which can be sent to Tunisia or Morocco for individual embroidery.
But there is abuse when garments are made outside the EEC—90 per cent. of them are made outside the EEC—and are imported by agents with a minute workroom, who simply add buttons and bows and a local label, and then circulate them freely across the EEC frontiers. There are dark stories, too, about suits being imported from a state trading country at prices below any economic cost. Then the vital labels are added—say, perhaps, "Italy"—with a few additions to the garments, and then they can circulate as Italian-made goods. That is the kind of abuse—how much of it exists, I really do not know—which could surely be prevented.
It seems that the Government's policy remains unchanged; that they still believe that outward processing must simply be subjected to the overall quotas for textiles and clothing from the countries concerned. I hope that the Government will think again and consider the advantages of specific quotas, in the light of the draft instruments and the Commission's recently declared belief that it is essential to ensure that the development of outward processing converges from one member state of the Community to another.
8.43 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, I should first like to thank my noble friend Lord Rochdale, and I so very much agree with what the noble Lord, Lord Kearton, said as to the clear and concise way in which my noble friend has tonight drawn the attention of the House to the committee's report on outward processing of textiles and clothing. This is particularly opportune, given the present stage of the discussions on renewal of the Multi-Fibre Arrangement and the European Community's position, to which I shall return in a few moments.
The committee's report is a valuable contribution to consideration of the right approach to outward processing and I have listened to views expressed in this debate with great interest, not least because I, too, come from the West Riding of Yorkshire and am not without some knowledge of the textile and clothing industry. Indeed, my own family business, in which I spent at least 35 years, was in manufacturing and distributing machinery for certain sections of that industry. So it is not without some irony that my first appearance at the Dispatch Box, as a spokesman on industry matters, should be in a field with which I am not entirely unfamiliar.
My noble friend Lord Rochdale was so right in stressing, as did other noble Lords tonight, the importance of the clothing and textiles industry to this country. Too often, the full significance of textiles and clothing to the United Kingdom is not appreciated.

645
With, as the noble Lord, Lord Kearton, said, some 600,000 jobs now and a turnover of around £9 billion, it is one of our major manufacturing industries exporting—again, as my noble friend Lord Rochdale said—about £2½ billion worth of goods in 1980. The Government cannot be, and I assure your Lordships are not, indifferent to its fortunes and do not for a moment consider that it is expendable. At the same time, we are deeply conscious of the serious difficulties which the industry has been, and still is, facing. And we understand, too, the concern that is felt about the problem of imports from low cost suppliers. The Government—I say again—are fully committed to providing a trading climate in which the textiles and clothing industry can work to secure a viable future.
It is for these reasons that the Government have sought to ensure that the EEC's policy under the current Multi-Fibre Arrangement is implemented as effectively as possible—we have approximately 600 quotas and other restraints on textiles and clothing imports from low cost countries—and we have been stoutly defending the United Kingdom's interests in the Community's discussions on renewal of the current MFA when it runs out at the end of this year. We are committed to the negotiation of a tough and enforceable successor to the current MFA, with growth in quotas in line, as far as possible, with the expected low growth in consumption over the next few years.
It is, of course, in the context of the Community's arrangements under the MFA and associated measures, that we and other member states have been considering the Commission's proposals to regulate the administration of outward processing. The committee's report raises the central problems, including the internal differences within the EEC which led to difficulties in agreeing a harmonised Community approach. So far as the United Kingdom is concerned, outward processing in textiles and clothing has not, I think it is reasonable to say—I take the point made by some of your Lordships about the need to know more than we do know, and that is something which we shall, perhaps, have to take away and think about—been undertaken in this country on a very large scale. Your Lordships might ask: How large is large? That is why I would reply that that is something we need to know more about.
Some OP is carried out here, but on nothing like the scale undertaken by, for example, the Germans. We do not have the same geographical proximity and historic economic links with low labour cost countries. And it is open to question to what extent OP with distant countries in, say, the Far East, is an economic proposition for United Kingdom firms. Nevertheless, we can, and do, understand the concern of United Kingdom firms who see their competitors in other member states gaining an advantage from carrying out this kind of operation in nearby East European and Mediterranean countries.
Officials at the Departments of Trade and Industry are keeping in close touch with the United Kingdom's textiles and clothing industry on the outward processing issue, and there is general agreement on the lines that we are pursuing. Our fundamental position is that any outward processing should be done within normal restraint levels and should not create additional clothing
646
imports from low cost countries.
The various industry sectors and the Government are, I think, at one on this. We do not consider that a special régime for outward processing quotas is necessarily good in itself. But if it is necessary for negotiating purposes with the Community's low cost suppliers to have outward processing quotas, then, as my noble friend Lord Rochdale said, they should be within the Community limits that are set for "normal"—non-outward processed—imports.
We recognise, too, that the industry has a strong case in pressing for manufacturers to be the main beneficiaries of any OP quotas, although there are other considerations which we have to take into account. The draft EEC regulations which led to the committee's report are, of course, designed to harmonise the administration of outward processing arrangements within the Community. We see the need for this and we have participated fully in the Community discussions in the attempt to achieve an agreed position.
The regulations in themselves do not set limits for the total amount of outward processing which might be undertaken by member states under a special OP régime. These would be fixed separately and are one of the matters which have been exercising the Council of Ministers in the recent MFA discussions.
The Commission's proposals, as set out in the draft outward processing regulations, including provision for manufacturers to benefit from any future OP régime, have been making progress in the Community but no final decisions have yet been taken. We had hoped that the extent to which individual manufacturers might be able to benefit would be defined in the final regulation, but this has not proved possible. It will be left to member states to decide how much outward processing an individual manufacturer could undertake within any future OP régime. We are generally in sympathy with the industry idea but again, as both my noble friend Lord Rochdale and the noble Lord, Lord Tordoff, mentioned, the amount should be related to the individual manufacturer's output on a volume rather than on an value-added basis. But further discussion with the industry on this will be necessary, if and when the regulation is adopted.
We do not consider that limiting the benefit of any future special EEC/OP régime to manufacturers need create difficulties for other United Kingdom trading interests, which could, if the Commission's proposals were approved, still continue to operate, as at present, within the normal import régime.
We hope, too, that the regulation would prove useful in enabling us to monitor outward processing done in the United Kingdom and elsewhere in the Community. This point was referred to by both my noble friend Lord Rochdale and the noble Lord, Lord Rhodes. If, of course, in the future we have specific outward processing quotas covered by the regulation, we would gain a better overall view of the extent of UK/OP as well.
The committee's report also stresses the need for the Commission to use its powers under Article 115 of the Treaty of Rome, which constitutes a derogation from the Community's normal free circulation rules, to protect industry to the full. We agree that Article 115 must, wherever possible, continue to apply to outward processing traffic, otherwise there could be a serious erosion of the protective value of national quotas. In

647
fact, the Commission's proposals as they now stand would not change the existing arrangements, although we have to recognise that the Commission consider that there is no legal power for them to use Article 115 in the case of imports, outward processing or otherwise, from the Community's Mediterranean associates or other preferential suppliers. In other words, as the noble Lord, Lord Rhodes, said, at present outward processing is covered by Article 115 in the same way as normal MFA quotas, but imports from Mediterranean countries cannot, in the opinion of the Commission, have Article 115 used against them once they are in the Community country.
Detailed work remains to be done in the Community on other aspects of the draft regulations, including some of those mentioned in the Select Committee's report, which noble Lords have touched on:
"We agree, for example, that under any OP régime, only limited manufacture should be undertaken abroad, and that the draft Commission proposals should be amended in this respect We agree, too, that there should be some flexibility in the requirement that goods sent for outward processing must be of EEC origin. There is already flexibility in the Commission's proposals for cases where EEC production is insufficient. And as requested by the textile industry, we have been seeking an amendment for woollen cloth exported from the Community for outward processing abroad, under any special régime, whereby it would have to be woven in the Community rather than simply have acquired Community origin (for example, by being dyed or printed in the Community)."
In conclusion, and at the risk of repetition, before I comment on one or two of the observations which have been made, again may I emphasise that while so far there have been no special outward processing quotas for the United Kingdom, there is no barrier under existing arrangements which prevents anyone from carrying out outward processing, if they wish to, as part of the normal import régime. It is not our objective to stop United Kindgom firms doing outward processing, but we do not want to see any special EEC outward processing régime resulting in imports front low cost sources being higher than would otherwise be the case. We are aware of the overriding importance which the United Kingdom industry attaches to the need to keep total low cost imports at as low a level as possible.
Meanwhile, we are continuing to play our part in the Community discussions on the Commission's proposals for regulations to harmonise the administrative arrangements for outward processing in the EEC. Such arrangements will be appropriate in the United Kingdom only if and when any new import régimes involving outward processing come into force. This would involve negotiations with supplying countries which have not yet started.
The noble Lord, Lord Rhodes, asked whether I knew the position regarding the MFA negotiations. "Were they", he asked, "still argey-bargeying about them?" I cannot think of a better way of putting it than that. I can tell the noble Lord—he must decide if it is still "argey bargeying", (I would have my own view but I am less able to express it as easily)—that the Lord Privy Seal made a Statement in another place yesterday, and I understand that the Minister for Trade will be making a more detailed Statement there next week. The position, I understand, at the moment is that no decisions were taken on the levels of outward processing, nor on the levels of non-outward processing
648
goods for any future EEC régime. The Commission will be exploring with major low cost suppliers the possibilities of converting part of existing quotas into special outward processing quotas. The Council has agreed that the Community must define global ceiling figures for outward processing and other imports from low cost countries before it can take a final decision on its participation in the new MFA, and it will be looking again at the overall position next month. I am sure that the noble Lord, Lord Rhodes, will have his views about that.
May I also answer the point made by my noble friend Lord Rochdale about the compatibility between the MFA and OP with GATT and most-favoured-nation status. The Multi-Fibre Arrangement is a specific derogation from the GATT rules and I do not believe that the problem which my noble friend mentioned is a substantive one. I have touched on the point which was made by the noble Lord, Lord Ardwick, about the need for more information. I would not quarrel with that. I would say to the noble Lord, Lord Kearton, who is so qualified to speak (as he did) on this subject that I thought—and I am sure he would agree with me—that he painted a gloomy prospect for employment in the future, with some of which it is very hard to argue. All I would say to him is that while nobody can know what can be done in terms of real numbers to help the position, through small businesses, the fact is that what is being achieved in some countries is quite impressive. While I do not for a moment seek to say, "Eureka, we have it. This is the solution", I know that the noble Lord would be the first to agree with me that we must certainly do all we can to try to make sure, through that route, that we get the maximum additional employment. I assure him that that we shall continue to do.
In the EEC discussions we shall continue to take full account of the valuable points made in the committee's report and of the views expressed by your Lordships tonight. Again may I sincerely thank my noble friend Lord Rochdale and all noble Lords who have contributed so constructively to this most serious, important and, some would say, most urgent matter.
8.59 p.m.
Viscount Rochdale: My Lords, before I ask your Lordships to approve the Motion, I should like to say a few words, more by way of thanks than anything else, to all those who have spoken and who have contributed their profound wisdom and experience, in particular the noble Lord, Lord Rhodes, my noble friend Lord Kearton and others. It has been a valuable debate and I am grateful to them.
Turning to my noble friend Lord Bellwin, I get great encouragement from what he said. Obviously many of the things in the report, and what has been said today, need to have a great deal further examination and thought by his department, but on the other hand I was encouraged when he made one or two points so emphatically. He said emphatically that the Government were committed to providing a good trading climate for the industry. He said emphatically that they recognised the importance of the need to know more of what was going on—and that was a point that everyone has made this evening. He said emphatically that in

649
considering OP it should be within the normal limits laid down by the MFA, and other things. I am glad also that he confirmed the point raised on Article 115 of the Treaty of Rome and also that I need have no fear about the point he made on "most favoured nation". I am most grateful to him and I feel certain that the industries as a whole, when they study what he has said, will also feel that. I merely wish good luck to all the further efforts he is going to make along the lines suggested. Finally, I wish to thank all the members of the committee who worked so hard in producing this report and also express my thanks for the efforts of our hardworking clerk.
On Question, Motion agreed to.

The Cowal Peninsular Ferry Service
9.2 p.m.
Lord Banks Lord Banks rose to ask Her Majesty's Government whether they will explain why they believe that a satisfactory ferry service for the Cowal Peninsula will he ensured by splitting the existing Gourock-Dunoon ferry service between Caledonian MacBrayne and Western Ferries on the basis of the former catering for foot passengers and the latter for vehicles.
The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. The Question asks the Government whether they will explain why they believe that a satisfactory ferry service for the Cowal Peninsula will be ensured by splitting the existing Gourock-Dunoon ferry service between Caledonian MacBrayne and Western Ferries on the basis of the former catering for foot passengers and the latter for vehicles.
Perhaps I may explain the background to this Question. One of my earliest childhood memories is a rough passage between Gourock and Dunoon on that sturdy little paddle steamer the old "Glen Rosa", and many times since then I have travelled on that route in a variety of vessels, including vessels of both services which are now available.
At one time that route from Glasgow by rail to Gourock and then by steamer to Dunoon was in competition with a similar route via Princes Pier Greenock and another route on the other side of the Clyde to Craigendoran. But eventually only one route remained—the route from Glasgow Central to Gourock Pier and then by steamer from there to Dunoon Pier. In 1954 the development of car transport led to the introduction of car ferries, and by 1973 the Gourock-Dunoon route was operated by a nationalised concern, Caledonian MacBrayne, incorporating two famous Clyde steamer companies. In that year, 1973, Western Ferries introduced an alternative service operating from McInroy's Point, two miles down the firth from Gourock on the one side to Hunter's Quay on the Cowal side of the estuary, two miles up the firth from Dunoon. There is no doubt that the Western Ferries alternative service was much appreciated by car owners, partly because it was cheaper and partly because it ran until much later in the evening than the Caledonian-MacBrayne service. The ships in use by Western Ferries were small, and as a consequence they required small crews and it was possible for them
650
to run a more flexible service.
By 1980 the division of traffic was this: Western Ferries had 67 per cent. of the car traffic, 41 per cent. of the commercial vehicle traffic and Caledonian-MacBrayne had 89 per cent. of the foot passengers. Caledonian-MacBrayne were subsidised by the Government and the subsidy in 1980 amounted to £800,000. It is believed that in the current year this will be reduced to somewhere round about £540,000. It is being reduced by putting into reserve one of the vessels used by Caledonian-MacBrayne and operating an hourly service with the other, instead of the half-hourly service which had previously been in operation.
The Government took the view that since Western Ferries had taken some 70 per cent. of the private car traffic without subsidy a continuation of the subsidy to Caledonian-MacBrayne would not be justified. It may be that ideological considerations played a part in that—I do not know—but the Government proposed to withdraw the subsidy from Caledonian-MacBrayne and to give a lower subsidy to Western Ferries. Caledonian-MacBrayne then indicated that in those circumstances they would apply to withdraw their passenger vehicle service between Gourock Pier and Dunoon Pier. The Government's plan and the Caledonian-MacBrayne reaction to it caused much alarm in Dunoon and throughout the Cowal district, for a variety of reasons. The catamaran vessel "Highland Seabird", which it was envisaged that Western Ferries would use for the passenger service between Gourock Pier and Dunoon Pier, it was argued, was not large enough and not suitable to cope with the weather that can be expected at certain times during the winter.
Dunoon Pier is in fact one of the most exposed on the Clyde. It was argued that the vessel, being a very light vessel, would have great difficulty in taking that pier and indeed that at certain tides it would be difficult for passengers to embark and disembark from it. The subsidy for its operation was only guaranteed for a year, and if that service proved unprofitable it was feared t hat subsidy might be withdrawn. Then there would be no passenger or vehicle services between Gourock Pier and Dunoon Pier; in other words, the front door service would be gone, the main tourist approach to Dunoon would have been closed.
The Dunoon Pier without a vehicle or passenger service would inevitably close, and this would have had other consequences, because the paddle steamer "Waverley", which runs cruises during the summer and is a very great tourist attraction, uses Dunoon Pier as an important picking up point. If there were no service from Dunoon Pier to Gourock Pier foot passengers would have to be bussed to Hunter's Quay and then across to the other side, and bussed from McInroy's Point to Gourock Station, making the whole operation very much longer.
Gourock Pier, of course, belongs to Caledonian-MacBrayne, and there was speculation as to who was going to maintain it, what was going to happen to it. The capacity of the Western Ferries fleet was thought not to be sufficient, even with an additional ferry which the Government proposed to help them to purchase. The Western Ferries vessels are old, about 40 years old, and the two Caledonian-MacBrayne vessels were built one in 1973 and one in 1974. There is really no comparison between the Caledonian-MacBrayne vessels and

651
the Western Ferries vessels. The Western Ferries is a very basic service, very acceptable for many purposes and obviously attracting a good deal of traffic, but not competing in the provision, for example, of protection against the weather, in the question of refreshments and so on during the voyage. The Caledonian MacBrayne vessels are very much larger vessels. Then it was argued that there would be traffic problems at Hunter's Quay and at MacInroy's Point if all the vehicle ferry services had to go through those two places.
There was alarm also further down the Clyde in Bute and Arran, because these places do rely to some extent on the services between Dunoon and Gourock; they are operated by single vessels belonging to Caledonian MacBrayne, one operating between Wemyss Bay and Rothesay and one between Ardrossan and Brodick, and if they are out of service they fall back on one of the vessels from Gourock as a standby vessel. Similarly, in very rough weather, Ardrossan and Wemyss Bay are not accessible to the vessels and they have to make for Gourock, and so Gourock was used in that capacity. So people further down the Clyde are worried about what would happen. There was concern, too, about the provision for the carriage of mail and goods which travel by the Caledonian MacBrayne service but for which the Western Ferries vessels are not equipped.
The withdrawal of the service was referred, as was a statutory requirement, to the Scottish Transport Users' Consultative Committee and they arranged a public inquiry. The degree of local interest was evidenced by the fact that 400 people attended this inquiry in Dunoon, and many of them had to stand for several hours. They did do so, so great was the interest while this inquiry went on. It became clear that when all the factors I have described were taken into account the problem was not so simple as had at first appeared. A powerful case against the closure of the Caledonian MacBrayne service and against the Government proposal was developed. The strength of the argument was evidenced by the fact that the Conservative Member of Parliament for the Argyll Division, in which Dunoon is, Mr. John Mackay, changed his mind. Having originally been in favour of the Government proposal, he changed his mind and was convinced by these arguments.
It was not surprising, therefore, when the consultative committee were unanimous in their recommendation, that Caledonian MacBrayne should in no circumstances be permitted to withdraw from this route in view of the serious hardship, inconvenience, difficulty and knock-on effect that would be caused to users of the service. The report of the consultative committee emphasised that Western Ferries had been a helpful and caring operator, and indeed they suggested that Caledonian MacBrayne might learn from them with regard to willing service and marketing.
It has been my opinion for a long time that Caledonian MacBrayne have been very weak in the marketing sphere. But the consultative committee were clear that Western Ferries had failed to make a case to be the sole operator and they emphasised, as I have already stated, that there is no comparison of quality in the service provided. They insisted that the disabled, the elderly, tourists, commuters who go
652
to work on the other side of the firth or who travel across the firth for educational purposes, had all to be considered. So had the businesses in the centre of Dunoon which would have been greatly deprived if the service between Gourock Pier and Dunoon Pier no longer existed.
In my opinion the consultative committee were absolutely right in the recommendation which they made. There was considerable local optimism after that inquiry that the Government would be persuaded to withdraw their proposals. There was consequently astonishment and concern when the Government announced that they were not going to accept the recommendation of the committee, but that they were going to split the service and make Western Ferries the sole vehicle operator and give the passenger service to Caledonian MacBrayne.
That leaves many problems unresolved, and in the view of a good many people that solution is worse even than the first. "Neither practical nor cost-efficient" was the way in which one local newspaper described it. First, Caledonian MacBrayne have no passenger vessel of their own and they were bound to make a heavy loss in any case on a passenger only service—that is the least profitable type of service—and it would seem that their losses would become heavier. They would presumably have to sell their better vehicle ferries "Juno" and "Jupiter", which are vehicle and passenger ferries, as I have explained, and which were comparatively recently built, even while they looked around for a passenger only vessel. Western Ferries have added an old vessel to their fleet to make up their numbers. The revenue for Dunoon Pier is bound to be substantially cut if there are no pier dues to be exacted on vehicle traffic, and the possible closure of Dunoon Pier is raised again.
There would be insufficient ferry capacity if the vehicle service were left entirely to Western Ferries. The consultative committee emphasised that they would not be suitable as a sole operator. The traffic problems, which I mentioned, at Hunter's Quay and McInroy's Point would arise. There would be no back-up vessels from Caledonian MacBrayne at Gourock for their services further down the Clyde. The future of Gourock Pier must he in question, and no solution has been put forward to the question of who will carry the freight and mail at present carried adequately in the Caledonian MacBrayne vessels.
Therefore, I have put down this Question to allow the Government the opportunity to explain how they envisage these problems being overcome. In recent weeks a possible compromise solution has been discussed and seems to be gaining in support; that is, that the subsidy should be continued to Caledonian MacBrayne, but for passenger operation only, and that the two vehicle ferry services should both continue and compete without a subsidy. I should like to ask whether the Government have considered that matter and what their view is about it. I shall certainly listen with interest to the Government's reply to the serious questions which I have posed to them tonight.
9.18 p.m.
Lord Underhill: My Lords, I had hoped that my noble friend Lord Ross of Marnock would have been able to find it possible to take part in this debate on the

653
Question tabled by the noble Lord, Lord Banks, but unfortunately he cannot do so. Because we want to indicate the importance of the Question that has been raised and which has been put forward so admirably by the noble Lord, Lord Banks, I was asked whether I would deal with this matter as it comes under transport policies. It may be thought that I know nothing at all about the subject. I certainly have not the intimate knowledge of the noble Lord, Lord Banks, but I have been a passenger on many occasions from Gourock to Dunoon for conference purposes, and I also had the unfortunate experience on one occasion—despite 99 per cent. of the scheduled services being carried out in 1980—when, because of the severe weather, no ferries were running and I accepted a lift to make the long car journey right the way round to Glasgow.
I have also made the journey by car on Western Ferries. Your Lordships might be interested to know how I first came to do that. I was coming from the Highlands in the North. It was the first ferry that I encountered and I wanted to get down to the South. I did not travel on Western Ferries because it was the better service. It just happened to be the first one that I encountered as I drove down from the North towards Dunoon, and on I went. It may be that many other tourists found themselves in the same position. Any tourist who wants to get to the mainland and to go down by the coast will go from Hunter's Quay because it saves him going North to Gourock when he does not want to go that way at all. Therefore, there are some good points in the service.
There is no doubt that in all its services—whether it be by road or the ferry services—the Scottish Transport Group has suffered in the last couple of years because of the recession, a decline in traffic, a decline in tourism, and also because of unemployment. It is understood that the original proposal to cut out the CalMac service would have meant 60 jobs being lost. I know that one does not keep a service going just for the purpose of maintaining jobs, or not only for that purpose; but even if we took just a £4,000 loss in Government revenue—it would be much more than that if one took the national average, due to taxation and all the other things involved that national revenue would secure—and offset that by benefits to be paid, that would be nearly a quarter of a million pounds a year, so that would go a long way towards meeting the subsidy.
I shall not ask all the questions that I intended to ask because the noble Lord, Lord Banks, has put these points so admirably. I should like to know why the Government first put forward their proposal in the light of the wholesale opposition that this has met from all the interests, not only in Dunoon but those on the other side as well. Not only the Member of Parliament for Argyll, but the Members of Parliament involved on the Strathclyde side have also made strong complaints. Why did the Government put forward this proposal? One is given the impression that they have not really thought out the matter. When one looks at the Questions and supplementary questions which were raised on this issue in the other place only recently, one gets the impression that the Government have not thought out the proposal and that because of the opposition, as the noble Lord has said, they have jumped at a possible alternative, which has also led to
654
considerable opposition.
I know that one does not necessarily always accept what consumer councils and consultative committees say, but in the light of a public inquiry that was held one finds it very difficult to understand why the Government do not accept the recommendation of that public inquiry. It seems that one goes through the machinery to endeavour to ascertain the facts in a case such as this and, despite the strong decision that was made, the Government put it on one side.
I hope that the Government will also take note of the strong point made by the noble Lord, Lord Banks, on the comparison of the vessels used by CalMac and those used by Western Ferries, and what would be the financial position of CalMac if the service that they are running was discontinued and they have to dispose of those two excellent vessels—because they could not run those on many of their other services.
The pier facilities run by CalMac at Dunoon and Gourock are excellent compared to the other services. I think that one would generally say that the facilities that Western Ferries can offer are inadequate compared with those of CalMac. The figures that were given by the noble Lord, Lord Banks, are also very telling and one notes in particular, apart from the foot passengers, the high proportion of commercial vehicles that still travel by CalMac. Why? Because their size is such that many of them would find it impossible to have a convenient journey by Western Ferries. Therefore, that matter must be considered. On the surface it seems ridiculous that a service which can operate with good pier facilities and excellent vessels should be discarded by the Government in their first decision; and I do not think that the alternative proposal bears water.
One does not want to bring a political issue into this, but it seems that the Government jump very quickly at reducing the possibility of a publicly-owned service in order to assist a private undertaking, because CalMac is a publicly-owned service. While one realises that funds have to be watched very carefully it seems that in this case the Government made a hasty decision. They retracted a little in the light of wholesale opposition, which they should have expected, and now the alternatives have been put forward, but we hope that it will be possible for the Government to say that the CalMac service shall continue in some form, and the best possible form in which it can. Therefore, we have complete support for the Question raised by the noble Lord, Lord Banks, and I hope that the Government will give a satisfactory answer.
9.26 p.m.
Lord Lyell: My Lords, I am sure that your Lordships' House will be particularly grateful for the interesting Question that has been raised by the noble Lord, Lord Banks, this evening on the question of ferry services between the mainland, as I would call it, and the Cowal Peninsula. I am sure we were all interested in the forceful speech of the noble Lord, Lord Underhill. The national football team was playing away in Portugal yesterday, and we all know that the noble Lord, Lord Ross, is an ardent supporter, but I do not think that would have kept the noble Lord, Lord Ross, from his duty this evening.
Of course, all of us know and understand the anxieties

655
and strong feelings which the Question raised this evening by the noble Lord, Lord Banks, have raised among both the employees and the clients and customers of Caledonian MacBrayne and also among the residents of Cowal, all of whom are so dependent on the Gourock-Dunoon ferry services, and who have been so well served both by Caledonian MacBrayne and, I believe, by Western Ferries over recent years. I should hope that I can reassure your Lordships this evening on two special points. First, my right honourable friend the Secretary of State made his original proposal to withdraw subsidy from the Caledonian MacBrayne service for perfectly reasonable and sound reasons of cost, and above all of local preference for the Western Ferries service. His decision was not, as might have been suggested, one of political dogma. Certainly it was taken for, we believe, sound reasons.
Secondly, there is every intention that the matter will finally be resolved in a way which will still leave Dunoon with a perfectly satisfactory ferry service providing adequately for the needs of all those who use it, both car and commercial vehicle drivers and of course passengers travelling by foot.
I would hope to be able to put the particular issue of the Gourock-Dunoon ferry services in context if I said something briefly about the policy of the Government generally about all ferry services in Scotland. Of course, the Firth of Clyde is an especially important part of those services. The Government are committed to the survival and prosperity of all those communities—mainly island communities but including Dunoon and the inhabitants of the Cowal—who are dependent on sea transport services.
Since taking office, this Government have increased the total assistance to Scottish shipping services from £4.3 million in 1979–80 to around £9.5 million in 1981–82, the current financial year. This has the great effect of restricting the increase in charges which would otherwise have been necessary on Caledonian MacBrayne services and the services of the Orkney Island Shipping Company. It has also enabled the introduction of substantial rebates on charges on the main P & O services to Orkney and Shetland, and also on almost all the bulk cargoes to the Scottish islands. These arrangements have been widely welcomed by local industry and by commercial interests; and the increase in financial assistance at a time of general economic difficulties has been substantial.
I think that both the noble Lord, Lord Banks, and the noble Lord, Lord Underhill, would admit and agree that the people of Dunoon have seen dramatic improvements in their ferry services in recent years. Many of the inhabitants of Dunoon will remember that until as recently as 1974 they depended on the Caledonian MacBrayne service operating with the traditional side-loading vessels. Although I never took a car across, I understand that until that time cars had to be winched on and off the ship. By modern standards it must have been a somewhat slow service. But in 1974 Caledonian MacBrayne introduced their two new ships, the "Juno" and the "Jupiter". These were purpose-built for this route, being capable of end-loading at Gourock and side-loading—I am afraid by the use of a small ramp—at Dunoon. Thus, loading and unloading was quick and efficient, turn-round time
656
was considerably improved and the boats could take larger commercial vehicles.
As we heard from the noble Lord, Lord Banks, it was at that time that Western Ferries opened their competing service. Both noble Lords pointed out that this operates with much more modest vessels, which are designed simply for taking cars and other vehicles. As the noble Lord, Lord Banks, said, this service operates over the much shorter sea crossing between McInroy's Point on the Gourock side and Hunter's Quay on the Dunoon side. I would stress that all the boats which sail with Western Ferries have to be surveyed by the Department of Trade annually. We admit that one was built in 1938, but the other two were built in 1960 and 1962, and all three are more than adequate for their purpose. Clearly, from the figures which have emerged, local people think that this service of Western Ferries is more than adequate for their needs.
Since 1974, with both Western Ferries and Caldeonian MacBrayne, the people of Cowal were offered an embarrassment of riches and of course it is hardly surprising that they should resist any attempt, however mild, to suggest that they might make do with less. There is however one problem which the Government must face with regard to the service of Caledonian MacBrayne between Gourock and Dunoon as it now operates. The problem is that, while the service generates a substantial amount of money, it also generates a substantial loss, and that has to be reimbursed by the taxpayer, at a time of considerable economic stringency. During the last financial year the service lost over £800,000 and, as the noble Lord, Lord Banks, suggested, the loss is expected to be about £500,000 this year; the noble Lord mentioned the figure of £540,000 but I think he was pinning a considerable degree of accuracy on the subsidy for this year. I am sure noble Lords will believe that that might be a reasonable price to pay for the quality of service that Caledonian MacBrayne attempt to provide. However, I hope your Lordships will forgive me if I urge a little caution at this point.
I wish of course to pay considerable tribute to Caledonian MacBrayne. They are the butt of frequent criticisms around the west coast of Scotland, but for many years they have provided the essential lifeline of our west coast island communities, whom they have served with great dedication, especially in the conditions which were expressed so graphically by the noble Lord, Lord Underhill. At some stage, apparently not even Caledonian MacBrayne could ferry him across to keep his rendezvous, and he had to come all the way back by road.
I hope the proposals of the Government over the Gourock-Dunoon service will not be taken as an attack or indeed overt criticism of Caledonian MacBrayne, for whom we have great respect. The caution I would urge on your Lordships, and the difficulty we have, is that, notwithstanding the substantial subsidies which the Caledonian MacBrayne company has received on this route, it has, since 1973, steadily lost business to Western Ferries, to the extent that, so far as we can gather, in 1981 over 70 per cent. of private car drivers and over 40 per cent. of commercial vehicle drivers have chosen, where possible, to use the Western Ferries service.
We believe that those figures offer a very clear mirror of local preferences; indeed far more so than do the

657
views expressed at the recent hearing of the Scottish Transport Users' Consultative Committee. The figures of 70 per cent. of private car drivers and 40 per cent. of commercial vehicle drivers wishing to use Western Ferries persuaded the Government that, against the background of general economic constraint and the need to make the best use of those resources which were available for ferry services, the continued high level of subsidy to Caledonian MacBrayne in respect of this route was not justified. It was for those reasons that my right honourable friend the Secretary of State proposed to withdraw his subsidy from the Caledonian MacBrayne service, and to provide a once-and-for-all capital subsidy to Western Ferries to assist them in acquiring a further vessel. Western Ferries would continue to operate their vehicle ferries between McInroy's Point and Hunter's Quay, but, using their catamaran, the "Highland Seabird", Western Ferries would provide an hourly service between Gourock and Dunoon Piers, for the benefit of foot passengers. An operating subsidy would be available for the first year of this particular service.
The case that was cogently presented by the noble Lord, Lord Banks, I believe reflected to a large extent the views that were also expressed by the Scottish Transport Users' Consultative Committee. Once my right honourable friend had decided to withdraw the subsidy, Caledonian MacBrayne had to announce the withdrawal of their service. The proposed withdrawal was considered by the Transport Users' Consultative Committee at the public hearing that was held in Dunoon. The noble Lord, Lord Banks, mentioned this. The committee's conclusions reflected the very substantial local objections to the withdrawal. It is of paramount importance to note in your Lordships' House that it was not within the committee's remit to consider the financial aspects of this particular matter. The main criticism of the consultative committee concerned what it regarded as the inadequacy of the proposed passenger service which was to use the catamaran, the "Highland Seabird", between Gourock and Dunoon Piers.
My right honourable friend the Secretary of State has accepted those criticisms, and has concluded that this part of the proposal should not proceed. Therefore he has now asked Caledonian MacBrayne to consider, and indeed to advise him on, alternative ways of providing for foot passengers.
At the meeting in Dunoon mentioned by the noble Lord, Lord Banks, fears were expressed about the effects of the closure of the Gourock-Dunoon Ferry upon tourism in Dunoon. The Government hope that Dunoon will not underestimate its attraction as a tourist destination. Indeed, we hope that the inhabitants of Dunoon will not underestimate the degree of planning that people put into their holidays. But this is a point that needs further consideration, and the Government will hear fully in mind this aspect of tourism in Dunoon.
Fears have been expressed since the public meeting, and indeed were expressed earlier this month to my honourable friend the Minister, who, I understand, went to Dunoon or Gourock on, I think, Guy Fawkes' Day, 5th November. I believe that there was a particular problem about the safe handling and the
658
transmission and onward forwarding of valuable cargoes, such as pharmaceutical goods, which were sent to Dunoon. The Government are very conscious of this issue, and they hope that it can be dealt with satisfactorily in whatever solution is reached for dealing with foot passengers.
We have heard of various other solutions which have been suggested and, indeed, requested by both the noble Lord, Lord Banks, and the noble Lord, Lord Underhill, this evening. Other solutions have mentioned the possibility that Caledonian MacBrayne could be allowed to continue their present service between Gourock and Dunoon piers; but the Government believe that they should restrict the subsidy so that it would be in respect of foot passengers only. This suggestion was made by several local interests to my honourable friend the Minister for Home Affairs and the Environment at the Scottish Office when he visited Dunoon on 5th November, and the Government will give this particular suggestion the most careful consideration. It will be very carefully considered, so that an adequate service for pedestrian passengers between Gourock and Dunoon may be continued.
The present position therefore is that the Government have accepted the Scottish Transport Users' Consultative Committee's criticisms of the proposed "Highland Seabird" services for foot passengers, and are very urgently considering how best the passengers can he provided for in future. But, in the meantime and until we can reach definite conclusions, the present services of Caledonian MacBrayne and Western Ferries will continue to operate. The Government hope that all those concerned will be prepared to reserve their judgment on this difficult matter until a final solution emerges. The Government are committed to ensuring that there will be a fully satisfactory ferry service on the Gourock-Dunoon route, but they are confident that this can be provided at a much lower cost to the taxpayer than the present arrangements.

Humberside Bill [H.L.]
The Chairman of Committees The Chairman of Committees acquainted the House that (pursuant to the Resolution of 17th November last) the Bill had been deposited in the Private Bill Office, together with the declaration of the agent; the Bill was presented, read a first time, then passed through all its remaining stages pro forma, and the Bill was sent to the Commons.