Lords Sitting of 25 November 1981

Preamble
The House met at a quarter-past two of the clock: The Chairman of Committees on the Woolsack.
Prayers—Read by the Lord Bishop of Liverpool.

The Lord Bishop of Gloucester
John, Lord Bishop of Gloucester—Was (in the usual manner) introduced between the Lord Bishop of Southwark and the Lord Bishop of Hereford.
The Lord Bishop of Bath and Wells
John Monier, Lord Bishop of Bath and Wells—Was (in the usual manner) introduced between the Lord Bishop of Rochester and the Lord Bishop of Carlisle.

Yasser Arafat: Meeting
2.33 p.m.
Lord Molloy Lord Molloy had given notice of his intention to ask the following Question:
To ask Her Majesty's Government what steps they are considering in response to the statement made in Tokyo by Mr. Arafat, the PLO leader—that he is prepared to accept the offer of Britain's Foreign Secretary to meet him for talks—defined by the Foreign Secretary, that might pave the way to a peaceful settlement of the Palestinian question.
Lord Brockway: My Lords, my noble friend has asked me whether in his unavoidable absence I would seek permission for this Question to be asked.
Lord Denham: My Lords, in the absence of my noble friend I will, if I may, repeat the Answer that he would have given:
I am not aware of such a statement. Since becoming President of the Ten, I have made clear on several occasions that I would be ready to meet Mr. Arafat if such a meeting would further the cause of peace. We continue to urge the PLO to make clear their readiness to accept Israel's right to live in peace as part of a negotiated settlement in which legitimate Palestinian political rights will also be met.
Lord Brockway: My Lords, if I may, I should like to ask a supplementary question on behalf of my absent friend. Would not such a meeting, which has been reported in the press from Tokyo, help to clarify the attitude of the PLO to the recognition of Israel if the Saudi Arabian plan for peace were accepted?
The Secretary of State for Foreign and Commonwealth Affairs (Lord Carrington): My Lords, I must apologise profusely for being late. I had no idea that the House did not have a considerable amount of business before
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Starred Questions. I have never before done this, and I apologise very much to your Lordships for not having been here.
If I may answer the supplementary question of the noble Lord, Lord Brockway, I would say that I know of no statement of that kind that has been made by Mr. Arafat. It has been the wish, and we have been trying over the last few months, to get the PLO to do precisely what the noble Lord has said. At the moment we have not succeeded in doing that. There is an opportunity for it to do so at Fez, where the Arab summit opens today and will go on for three days. There will then be an opportunity for the PLO to make clear its position on the seventh principle of the Fahd eight principles.
Lord Wells-Pestell: My Lords, can the noble Lord the Foreign Secretary tell the House whether he would insist on the PLO, or the Saudis for that matter, giving an undertaking to recognise the existence of Israel before talks take place?
Lord Carrington: My Lords, I think that the ideal situation would be—and this is repeating the Venice Declaration—for both parties to recognise one another conditionally on the basis of a negotiated settlement.
Lord Shinwell: My Lords, is the Foreign Secretary aware that recent manoeuvres, instead of being likely to promote peace, are likely to produce another war? Is it not necessary to be a little cautious? Is the noble Lord aware—of course he is aware—that not a single prominent representative of the Palestine Liberation Organisation has declared its readiness to recognise Israel, and that even the Saudi Arabian peace proposals do not recognise Israel? They do not refer to it at all, except to say that they want peace in the Middle East. We all want peace in the Middle East. Is it necessary to proceed with these manoeuvres? Should we not recognise that Israel will not allow Syria, or Saudi Arabia, or any of the Arab countries, to interfere with the Camp David proposals? Even if they appear to be innocuous, the proposals at any rate provide an opportunity to negotiate the possibility of peace.
Lord Carrington: My Lords, I do not think that the noble Lord is quite right about the five principles. The seventh principle says that all states in the area shall have the right to live in peace. The Israelis have, understandably, pointed out that since the Saudis do not recognise Israel, it might very well be that Israel is not considered a state. But at a press conference which he gave in Riyadh when I was there, Prince Saud, in answer to a question, made it quite clear that he actually meant, after a negotiated settlement, the state of Israel. I think that that is a considerable move forward. With regard to the last part of the noble Lord's supplementary question, I tend to think, and Her Majesty's Government tend to think, that in the end there must be a negotiated settlement and there really will have to be conversations.
Lord Mayhew: My Lords, will the noble Lord agree that it is quite unrealistic to expect either side to recognise the other unilaterally? Was not the phrase

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used by the late President Sadat very apposite?—namely, that what we ought to aim at is mutual and simultaneous recognition of both parties.
Lord Carrington: That would be much the best, my Lords; but I do not think that either side would have much to lose by saying, "I am prepared to recognise you if you recognise me".
Lord Paget of Northampton: My Lords, is it right to equate Mr. Arafat with the state of Israel in these circumstances? One is a state. It emerged by a revolutionary process, of which we were the victims. But the other is a representative of an association, which has proclaimed assassination as its principal instrument. Can the noble Lord really point to a single instance in history in which negotiation with assassins has promoted peace?
Lord Carrington: I could, my Lords; but the trouble with the PLO is that so often it makes a statement which sounds very moderate, but then, two or three days later, it seems to contradict it by saying something which is immoderate. The noble Lord is of course quite right when he says that there is the state of Israel, which we recognise, while the PLO is an organisation, and we do not recognise organisations. Her Majesty's Government have always said that the PLO represents a great many Palestinians. Indeed, there are some who think that there is no other recognised organisation which represents the Palestinians, and therefore it will have to be taken into account. It seems to me that if that organisation was to say in effect that it would recognise the state of Israel on condition that its own rights—the Palestinian rights—were recognised, that would be a step forward, and something which the Israelis ought to welcome.
Lord Paget of Northampton: But, my noble Lords, if the noble Lord will permit me to put just one more point, I would say that I object not to the fact that the PLO is an association and not a state, but to the fact that it has formed and pursued the principle that its instrument is assassination. It is this principle of assassination which is building itself right through the Middle East and through the world.
Lord Carrington: My Lords, that is precisely what we are seeking to get them to renounce.
Lord Brockway: My Lords, may I ask the Minister whether he would agree that quite responsible people who have met Mr. Arafat take the view that he is withholding any public statement about recognising Israel as a bargaining counter? Might not a statement by Her Majesty's Government that they support the United Nations resolution on this subject, and the Saudi Arabia plan, lead to a position where Mr. Arafat might say that publicly?
Lord Carrington: My Lords, I do not think Mr. Arafat, the PLO or anybody else can be under any misapprehension about Her Majesty's Government's policy. We have made perfectly clear what we feel about the situation in the Middle East, and have set it out in a number of documents.

Nuclear Weapons: Soviet Proposal
2.41 p.m.
Lord Brockway: My Lords, I apologise to the House for rising so often. 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 what is their attitude towards the proposal of the Soviet Union that the present General Assembly of the United Nations should adopt a declaration that the state which first uses nuclear weapons would be committing the gravest crime against mankind, that it is the duty of the leaders of nuclear states to reverse the arms race by equitable negotiations, and that nuclear energy must be used only for peaceful purposes.
Lord Carrington: My Lords, the Government are committed to the negotiation of realistic, equitable and verifiable arms control and disarmament agreements on nuclear and conventional weapons. As President Reagan made clear in his speech on 18th November, no NATO weapons, conventional or nuclear, will ever be used except in response to attack. The Government do not believe that a declaration of the kind proposed by the Soviet Union would be a serious contribution to genuine arms control and disarmament, since it would not be a substitute for negotiated agreement.
Lord Brockway: My Lords, while welcoming part of that Answer, may I ask the Government this question: Are they really going to decline to accept a declaration against the first use of nuclear weapons? Is the noble Lord aware that when he says they might be used against a conventional attack, inevitably such use would lead to an all-scale nuclear war?
Lord Carrington: My Lords, the first object of Western defence policy is to deter a war, not to fight one, and I am not at all sure that the proposal which the noble Lord is making would have that effect. It would seem to me that in a time of crisis it would really be of no use to rely upon the words of somebody having said that they would not use such-and-such a weapon first.
Lord Gladwyn: My Lords, while I hardly expect the Foreign Secretary to agree that the Soviet Union is the state best qualified to denounce crimes against humanity, would he not agree that the first use in war of nuclear weapons on either side would be likely to be entirely counter-productive?
Lord Carrington: My Lords, this is the sort of question which it is almost impossible to answer. If there were circumstances in which the whole of the western world seemed to be overrun and we were in danger of complete annihilation as a society and as a civilisation, I think one would have to think very carefully about what action one took.
Lord Gisborough: My Lords, would my noble friend agree that all these questions about doing away with nuclear war are extremely dangerous as they give the impression that conventional warfare is acceptable, whereas it is utterly unacceptable? Furthermore, would my noble friend agree that it also gives an impression of pacifism alike to the Oxford debate of 1936?
Lord Carrington: Yes, my Lords, I agree with my noble friend; I found conventional warfare extremely disagreeable at first-hand. I think that perhaps some of those who ask these sort of questions misunderstand the reasons why we have had peace in Europe for the unprecedented period of 36 years. I believe that it has very largely been due to the deterrent policy of the NATO Alliance.
Lord Avebury: My Lords, in relation to nuclear weapons within the European theatre in particular, is the noble Lord aware that the public are very confused by the apparent conflict between the figures given by President Reagan in his television appearance the other day, which appeared to show a vast superiority by the Soviet Union in theatre nuclear weapons, and the denial by President Brezhnev that the Soviet Union has any such advantage? Is it not possible to get an agreement at least on the facts between the superpowers as to how many of these weapons there are on each side?
Lord Carrington: My Lords, I think that would be a very good start to the negotiations. The problem—and the noble Lord will know this—is that in relation to the mutual and balanced force reduction agreements there is still argument going on after a number of years about what are the statistics and the facts. I think that what is essential in the negotiation which starts in Vienna on Monday is that there should be a real will on the part of both parties to these negotiations to come to an agreement and to get some results; and the first thing that they must do is to decide on the facts and what they are.
Lord Peart: My Lords, may I say to the noble Lord that certainly we on this side will support his attitude and his view in relation to this issue.
Lord Carrington: My Lords, I am much obliged to the noble Lord.
Lord Underhill: My Lords, would not the noble Lord agree that there are many occasions on which declarations and communiqués on international gatherings seem not to have a great deal of relevance to any settlement? Can he really say that there is any objection to a declaration of this kind being adopted by the United Nations?
Lord Carrington: Yes, my Lords; I thought I made clear in my supplementary answers exactly why I thought there was an objection.
Lord Jenkins of Putney: My Lords, would the noble Lord agree that in giving support to his tactics no one on this side of the House, I think, is seeking to take
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away from my noble friend Lord Brockway the view that there is a great and useful purpose in international agreements of various sorts? Would not the noble Lord agree that we have international agreements outlawing various kinds of war, and that therefore the outlawing of this type of war and the laying down of international agreements about the nature of war and the limitations of war is a useful step? Will he not therefore take a little more seriously what my noble friend suggests?
Lord Carrington: My Lords, I think that when the chips are down declarations really are not of much use. It seems to me in circumstances of this kind that what one wants to do is to take an area of weapons, as the United States and the Soviet Union have done, and negotiate to see whether you can limit them down to nothing. That seems to me the practical way of doing it, because the real difficulty between East and West is a lack of trust and confidence. So why do we not start by trying to get arms limitation talks, which in the end will build up the confidence which I hope will bring down the levels of all arms?
Lord Shinwell: My Lords, would the noble Lord not agree that the only reasonable and rational declaration that the West can make in the present international circumstances is to be strong?
Lord Carrington: My Lords, I like the noble Lord's supplementary on this Question better than his supplementary on the other one.
Lord Brockway: My Lords, is the Minister aware that many of us are just as much opposed, or are as equally opposed, to conventional weapons as to nuclear weapons, and are aware of the fact that 50 million people were killed by conventional weapons in the last war? Would the noble Lord print in the Official Report the very short declaration which is now before the United Nations so that Members of this House may be aware of it?
Lord Carrington: My Lords, I do not know what the rules are about that but I will certainly look at it. The only thing I would say about the first part of the noble Lord's supplementary question is that I think we must be very careful, as Lord Shinwell has said, not to allow this country to be defenceless.
Lord Kennet: My Lords, would the Government join with us on this Bench in welcoming the declaration of support for the principle of multilateral disarmament which we have just heard from the Labour Front Bench?
Lord Carrington: Indeed, my Lords, and from the Bench at the back.

Cable and Wireless: Conversion to Public Ownership
2.49 p.m.
Lord Beswick: 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 were the total costs to the company and to the Treasury involved in the conversion to private ownership of Cable and Wireless; what amount of the money realised by the sale of shares went to the Treasury, and to what use has that money been put.
The Minister of State, Treasury (Lord Cockfield): My Lords, gross receipts from the sale of shares amounted to about £224 million. Net Government expenses were about £4½ million apart from stamp duty and VAT, which are regarded as transfer payments. Expenses of some £550,000 were incurred by the company, and £35 million was reinvested in the company by way of a subscription for new shares. Otherwise, the sale proceeds have not been hypothecated to a particular use.
Lord Beswick: My Lords, do I understand from what the noble Lord has said that the net proceeds to the Exchequer were of the order of some £35 million? The noble Lord will probably correct me if I am wrong. If it were around that figure, is not £5 million an excessive cost for raising that amount? Since we are talking about how much went to whom, may I ask the noble Lord whether he will comment on the report that because the shares were undervalued when quoted the "stags" made £15 million in the first day's trading? Finally, may I ask the noble Lord, whose financial experience I deeply respect, whether he really thinks it sound management to sell off a gross national asset and then use the proceeds, as he said, "unhypothecated"?—by which he means for current household expenses.
Lord Cockfield: My Lords, so far as the noble Lord's first supplementary question is concerned, the gross receipts were £224 million. From that, one has to deduct £4½ million which leaves us with £219½ million. Of that, £35 million was then used in the purchase of new shares; which meant that the net proceeds would have been approximately £184 million. That, I think, is the correct figure. As far as the second supplementary question is concerned, it is true that when the shares first opened for trading they were traded at a substantial premium; but the number of shares traded represented only a small proportion of the total and it would be quite wrong to gross up from that figure in order to obtain a profit made by the people who had "stagged" this issue. "Stagging", unfortunately, is something which no one hitherto has found a way of avoiding; although, in this instance, obviously duplicated applications were rejected.
As far as the final supplementary question is concerned, it is the long established practice of all Governments that receipts are not hypothecated to a particular purpose; but I gather from what the noble Lord says that he disapproves of much of Government expenditure.
Lord Glenamara: My Lords, does the noble Lord recollect that these shares were put on the market at 168, but that on the first day of trading they rose by almost 20 per cent, and, therefore, those investors fortunate enough to get any made potential profits
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of £40 million? Is it not highly inflationary to conjure £40 million worth of purchasing power out of the air in this way?—as the noble Lord never ceased to point out when talking about wage claims in the exchange that we had yesterday about the "free gift", so-called, of £50 to London Transport workers. Will the noble Lord comment on the suspicions voiced in the correspondence columns of The Times in the last fortnight, that the Government deliberately grossly under-price these shares in order to make a free gift for their friend in the City?
Lord Cockfield: My Lords, if I may start with the last point first, there is no substance of any sort in that allegation. As far as the facts are concerned, they are perfectly simple and on the record. The offer for sale was made on 21st October. The price has to be fixed at that date. Between the time the offer for sale was made and the time the shares were first dealt with, there was a rise in share prices generally. After a few days in which the shares were sold at quite high prices, they have now been traded in the range of 190p to 194p. If the noble Lord looks at the movement of share prices over the whole of this period—that is, from the date when the price was fixed until today—then the relationship that the current prices pays to the issue price is not all that much out of line with the movement in share prices generally.
Lord Morris: My Lords, in the light of the previous supplementary question, would not my noble friend agree that there is no such thing as a profit until it is realised?
Lord Cockfield: My Lords, my noble friend raises an important and valuable point. When people invest money, including bodies such as pension funds and insurance companies, they do so in the hope and expectation of those investments appreciating in value. That appreciation does not go directly into consumption.
Lord Davies of Leek: My Lords, is the noble Lord aware that, despite the knowledgeable answer that he has given, the City itself said that the Government had underestimated the price of these shares when they closed on 31st October; and that no colourful expression like "hypothecating" will cover that fact? Do the Government, before they enter into this ideological obsession of privatising profits and socialising the losses, discuss with the Ministry of Defence the effect of sharing out and selling off of such shares as Aerospace and Cable and Wireless—which are not remote from defence—and that, with defence, there should be discussions before the action of selling the shares is taken?
Lord Cockfield: My Lords, the noble Lord raises a whole series of points. May I remind him that rather less than 50 per cent. of these shares were sold, so that what we have established is an equal partnership between the private and public sectors in this company. This is the sort of development that I should have thought the noble Lord would welcome—and I will make no more of it than that. If one comes to press comment, one can find in the press a very wide variety

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of views expressed. The Standard newspaper on the day of issue said that it was:
"an ambitious price".
They said that the shares were not cheap. The Financial Times, a reputable authority in this field, the following morning said:
"priced tightly enough to discourage stags".
The Financial Weekly, another authority in this field, said:
"After the market shake out, the rating showed boldness".
One can quote a large number of newspapers expressing different views, as one always can; but at the time the offer was made there was no consensus of opinion at all that it was in any way underpriced.
Lord Davies of Leek: My Lords, I am grateful to the noble Lord for that reply, but the fact is that the shares in those 10 days were over-subscribed to the amount of £1,260,000 for £224 million worth of shares. That is the fact; and that is what was done with the public money.
Lord Cockfield: My Lords, I am aware of the fact that the shares were over-subscribed. The noble Lord's complaint is that the shares were under-priced. I gather that his real complaint is that the issue was a success instead of a failure.
Lord Jacques: My Lords, is the Minister aware that a well conducted family never has to sell the furniture to pay the grocery bill?
Lord Cockfield: My Lords, there is no question here of selling the furniture to pay any grocery bills. What has happened is that half the shares in a company (where there is no strong case for it being in the public sector) are now in the private sector; and we believe that this is a more satisfactory arrangement.
Lord Denham: My Lords, if the noble Lord, Lord Beswick, will forgive me, we have been 26 minutes on three Questions. The House might think that after he has asked his supplementary question and my noble friend has replied we should move on.
Lord Beswick: My Lords, may I say to the Chief Whip and to the House generally that there is a case to be made for curtailing the replies on the first one or two Questions. Sometimes the time is used up on the first—
A noble Lord: Then get on with it!
Lord Beswick: My Lords, may I ask the noble Lord the Minister whether he will explain to his noble friends at the back that if one buys at 196 and sells at 235, one is realising a profit? While accepting from the Minister that a judgment must be made when floating a company on the market, nevertheless a pattern is beginning to emerge, that the underwriters are getting their 1½ per cent. without an element of risk.
Lord Cockfield: My Lords, I am not aware that anybody sold at 235; in fact the highest price, to the best of my knowledge, was 205. This is an important
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difference. I realise that criticism is commonly directed against underwriters, and it is a point that one needs to keep in mind. Nevertheless, it is the accepted position that issues of this sort are underwritten, and this guarantees that even if the market moves against the issuing body, nevertheless the money is received.

The Prison System: Reform
3.1 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 when the reforms introduced in the prison system in Northern Ireland are to be extended to England, Wales and Scotland.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, we have no plans at present for introducing in England and Wales or in Scotland the changes recently made in the prison system in Northern Ireland.
Lord Brockway: My Lords, without wishing to repeat matters that were raised in last night's debate (from which I regret I was absent), may I ask the Minister this question? Is he aware of the very serious disturbance in our prisons not only among the prisoners but among prison officers because of the intolerable conditions which are now there? May I ask the noble Lord this in particular: in view of the overcrowding of the prisons, could there not be an amnesty for non-violent prisoners as carried out in many European countries on historical occasions? If this cannot be done at the New Year, could it not be done at the time of the birth of a child to the Princess of Wales?
Lord Belstead: My Lords, those are both interesting supplementaries but neither arises from the Question.
Lord Avebury: My Lords, may I take the opportunity of ascertaining an answer to the question I asked during the course of yesterday's proceedings—namely, what would be the reduction in the number of prisoners in England and Wales if the 50 per cent. remission which applies in Northern Ireland were extended to the mainland?
Lord Belstead: No, my Lords.
The Earl of Longford: My Lords, am I right in thinking that in Northern Ireland male prisoners as well as female prisoners are now allowed to wear their own clothes? Am I right in thinking that that at present is refused to all male prisoners in Britain? Will the noble Lord explain why there should be this difference?
Lord Belstead: My Lords, it is the case that, under the changes made in Northern Ireland, all convicted prisoners in Northern Ireland may now wear their own clothes. The situation in England and Wales

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is that all unconvicted and civilian prisoners, and convicted women prisoners, can wear their own clothes, and some items of personal clothing can be worn in dispersal prisons.
I would just point out to the noble Earl that there are more unsentenced prisoners on remand in England and Wales than there are prisoners of all kinds in Northern Ireland, and of course in England and Wales all unconvicted and civilian prisoners can wear their own clothes.
Lord Brockway: My Lords, is the Minister aware that the reply that he has given is a little disappointing after the earlier reply to a similar Question which I asked some months ago? The Government replied then that they would be considering the application to England, Scotland and Wales of these conditions. May I ask the noble Lord this: is there not a great danger that the precedent that these reforms in Northern Ireland were brought about by deplorable methods may encourage prisoners in this country to take similar action to gain relief from the impossible conditions which are now in our prisons?
Lord Belstead: My Lords, changes were made in Northern Ireland on four different grounds. If the noble Lord, Lord Brockway, who is always habitually fair, looks at those four different grounds he will see that there is really very little difference between England and Wales—and indeed I think Scotland—and Northern Ireland except on two counts: one is in what is called association between the H blocks in the Maze Prison in Northern Ireland, which of course is a matter entirely for Northern Ireland; and the other is a matter concerning the wearing of prisoners' own clothes.
Prison uniform is an aid to security and control in view of the very large number of prisoners and the very large number of prisons in England, Scotland and Wales against the comparatively small number of prisoners in Northern Ireland. Therefore, on grounds of security and control, the Government do not at the moment feel that it would he right to change the rules about clothing.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Belstead will, with the leave of the House, repeat a Statement that is to be made in another place on the Scarman Report.
With the leave of the House, I should like to say a word about today's two short debates. Noble Lords will see from the list of speakers that both debates have a very large number of speakers. The debate in the name of my noble friend Lord Kimberley has 20 speakers and that in the name of my noble kinsman Lord Spens has 15. Both debates are of course strictly limited to two and a half hours. In the normal way, the opener of the debate should be entitled to approximately 15 minutes for his speech, and 20 minutes should be reserved for the Government reply at the conclusion of the debate. In addition, I suggest that one Front Bench speaker from the Benches
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opposite should be entitled to a little more than the other general Members of the House.
I have asked the noble Lords, Lord Kimberley and Lord Spens, to indicate at the beginning of their speeches the time which can be allowed for each of the remaining speakers. I would stress to the House that if noble Lords speak for longer than the allocated time, they will deprive later speakers of some of their time or even of the opportunity to speak at all.
Perhaps I may remind the House of Rule 13 for the conduct of short debates which can be found on page 241 of the Companion to the Standing Orders. This reads:
"Pursuant to S.O. 34, on the expiry of the time limit, if the debate is still continuing, the Clerk at the Table rises and the Lord Chancellor brings the debate to an end by inquiring whether the mover of the Motion wishes to withdraw his Motion; or by putting the Question".

Personal Bills: Select Committee
3.8 p.m.
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 a Select Committee on Personal Bills be appointed, to which all Petitions for Personal Bills shall stand referred; and that, as proposed by the Committee of Selection, the Lords following, with the Chairman of Committees, be named of the Committee:—

Cross of Chelsea, L.

Greenwood of Rossendale, L.

Hampton, L.

Nugent of Guildford, L.

Teviot, L.

Wilberforce, L.

—(Lord Aberdare.)
Lord Houghton of Sowerby: My Lords, I wish to raise a matter on this Motion. It is with some diffidence that I offer one or two comments upon the Motion before the House. Three years ago I was asked whether I would serve on the Select Committee on Personal Bills and I consented to do so. I was assured that it would meet only rarely because Personal Bills were few in number. In fact, it met once during the period of my three years of membership. That was on an application by a man to marry his stepdaughter, which was forbidden by statute law and for which a Personal Bill had to be promoted. I sat zealously through the whole of one Session in order to reach a unanimous and sensible conclusion on that application.
I am sure that there must be some reason for a noble Lord to find that his name is omitted from the list recommended by the Committee of Selection, without warning, without reference, and without anything except the surprise of finding that a list is included in the Order Paper which omits the name of a noble Lord who has served previously. I fully accept that no noble Lord should be asked to accept the onerous burden of membership of a Select Committee that sits rarely and to do it indefinitely; but the courtesies of this House are well renowned both in Parliament and outside and there must surely be some more

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courteous way of telling a noble Lord that he has been displaced on a Select Committee than his discovery that his name is omitted from the list of members proposed in a Motion of this kind. I leave it there. I have no undue complaint to make about it, but I do think there is a better way of doing it than this.
Lord Aberdare: My Lords, I am sorry the noble Lord feels like that. I can only draw his attention to the Companion to Standing Orders where it is perfectly clear that in nearly all Select Committees the members retire after three years' service. This is part of the rotation rule in order to allow all Members of your Lordships' House to take part in various committees. It is the normal procedure that after three years a member retires from the committee. That is the reason why the noble Lord's name does not appear on this particular committee; but of course, having been off the committee for a year or so, he certainly will be eligible to rejoin it. That is the reason for his name not appearing, and of course this is all decided by the Committee of Selection. That committee has only met recently, as it does at the beginning of every Session. I am afraid I cannot offer the noble Lord any more comfort than that.
Lord Houghton of Sowerby: My Lords, if I may be permitted to say so, I fully accept the explanation. As I said, I have no grievances about it and I apologise for not being familiar with the Standing Order to which the noble Lord has referred. It may be that I expect rather more courtesy than is available in your Lordships' House on a matter of this kind. A word to the effect that I retired under Standing Orders would have set my mind at rest. However, this is rather an embarrassing subject to raise. I tried to raise it in some other way. However, I have no more to say and I thank the noble Lord for his explanation.
On Question, Motion agreed to.

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

Ardwick, L.

Cathcart, E.

Orr-Ewing, L.

Phillips, B.

Winstanley, L.

That the Committee have power to adjourn from place to place and to report from time to time;
That two be the Quorum of the Committee;
That the Committee have power to appoint Specialist Advisers;
That the Committee have power to join with any Select Committee on Sound Broadcasting that may be appointed by the Commons;
That the Committee have power to agree with the Commons in the appointment of a Chairman for any joint meeting.—(Lord Aberdare.)
On Question, Motion agreed to: and a Message ordered to be sent to the Commons to acquaint them therewith.

NATO: Europe/USA Relationship
3.13 p.m.
The Earl of Kimberley The Earl of Kimberley rose to call attention to the relationship between the European NATO countries and the United States of America; and to move for Papers.
The noble Earl said: My Lords, my noble friend went into the long list of speakers that we have, and I will endeavour to make my own speech shorter than I normally would have done. I would warn noble Lords that I think the average should be about six minutes per person.
I do not believe there is any noble Lord in this Chamber who would not agree that the whole security and peace of the world depends on amenable and trusting European/American relations. The essence of this relationship is NATO and at the moment NATO is beset by grave danger. We must ask ourselves why relations between Europe and America have deteriorated. The key question is: who benefits from this deterioration? There is just one answer—I am sure your Lordships all know it—and that is the Soviet Union.
So how have the Soviets engineered this position? They have done so by extremely clever propaganda, now directed throughout Europe, whereby they have exploited all the fears and frailties of the human race. In particular they have utilised the World Peace Council and, in many instances, the Campaign for Nuclear Disarmament. They have been abetted, perhaps, in the past by the inept defence policy of former President Carter and recently may have been helped by hawkish announcements and apparently conflicting statements by certain members of the Reagan Administration. To counteract such fertile seedbeds for Russian propaganda, we must have closer collaboration and co-operation between America and her European allies.
The Christian Science Monitor said the other day, just after Mr. Brezhnev gave his interview to Der Spiegel, that he was a wolf in sheep's clothing; and I am not certain that I do not agree. But whatever he said in Der Spiegel I think we must take it with a pinch of salt rather than say that it was a complete lot of lies. If anybody wants to read that interview, it is in the Library here and it is well worth reading. He made no new offer for an imminent European nuclear arms control talk, and in that interview his target of course was West Germany, which he has just left today. Besides the target being West Germany, it was also the rest of us—the other Western Europeans. Let us not forget that his sole object is to try to make us reject these new American counter nuclear missiles so that he does not have to dismantle and remove his SS20s.
There is ample evidence of the KGB's hand in fostering unilateral disarmament. It is available and easy to find by anybody who cares to look for it. Last April, for example, the Dutch expelled a supposed correspondent from Tass, the news agency. He had

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been identified as having taken part in espionage and covert operations. His primary role was with leaders of the Ban the Bomb movement. In fact, Vassilivech Leonor (for that is his name) stated that if Moscow wanted 50,000 demonstrators on the streets in Holland they would be there at very short notice. He should know, he said, because he was one of those who transmitted the orders from Moscow. His successor seems to have done rather better, because he produced over 100,000 the other day in Amsterdam. In America a similar role is fulfilled by a Mr. Uri Kapralov, who is a counsellor at the Soviet Embassy in Washington.
Last month in Denmark the peace activists of that country were given a rude shock when Vladimir Merkoulov, a second secretary at the Soviet Embassy, was expelled for bribing Arne Pedersen and his wife Inger over a nuclear-free peace advertisement. The Pedersens were subsequently arrested for aiding and abetting an agent of the KGB. One hundred and fifty Danish artists and writers signed that advertisement, but many of them said afterwards that they would not have done so if they had realised it had been financed by the Soviets.
I am now going to talk briefly about the CND, and I would hope that the noble Lord, Lord Jenkins of Putney, would let me finish because if he wants to shoot me down or have a go at me his turn to speak will be coming very shortly. Let us look at the activities of Monsignor Bruce Kent, General Secretary of the Campaign for Nuclear Disarmament. He admitted in a newspaper article dated 27th July working with communists. Although he has denied getting money from the World Peace Council, he has acknowledged that that council is a Soviet front and he even cabled congratulations to its meeting in Bulgaria in 1950. He attacked cruise missiles in a broadcast from East Berlin on 17th December last year. One year previously he praised Mr. Brezhnev's cosmetic withdrawal of troops from Europe, which was just before Afghanistan was invaded.
Monsignor Kent insists that all political views are represented in the CND, and so they may be. But the extreme political Left are more than adequately represented. There are at least nine card-carrying communists or sympathisers who are officials. Leading communists use the CND platform to attack United States militarism while praising so-called Soviet peacemaking initiatives. CND officials with communist leanings include: Sally Davison, Duncan Rees, Ian Davison, Michael Pentz, Christopher Horrie, CND press officer and member of the editorial board of Challenge, the paper of the Young Communist League, and Dan Smith who lectures at communist meetings and writes for the Morning Star but says he is outside the party. The Communist Party of Great Britain's industrial organiser, Mick Costello, has led a campaign at trade union conferences this year to win union support for the CND. In fact, top communists believe that the success of their CND selling campaign played a big part in this year's Labour Party conference's support for unilateral disarmament. Last, but not least—
Lord Jenkins of Putney: My Lords, would the noble Earl give way?
Several noble Lords: Order!
The Earl of Kimberley: My Lords, I said that the noble Lord, Lord Jenkins, will have his say in a minute and he may shoot me down when I have finished my speech.
Lord Jenkins of Putney: My Lords, I want only one moment—
Several noble Lords: No!
The Earl of Kimberley: So, my Lords, the Campaign for Nuclear Disarmament is one of the Kremlin's most useful and potent weapons. No one doubts the integrity of the genuine pacifist. But to find the genuine article one must ask the following questions. Is the unilaterist a pacifist or a political animal? How does he differentiate morally between one weapon and another—whether it be nuclear, chemical, biological or high explosive? Was Dresden less evil than Hiroshima? What defence policy does the unilateralist want for Europe? If his country were out-manoeuvred and attacked, would he just surrender or would he start screaming for help from the Americans? The largest peace movement in the world today is NATO, but it is losing ground every day as propaganda drives a wedge further and further between Europe and the United States.
In considering the undeniable need for arms reduction, I should like to remind noble Lords of some comments made in this Chamber last week in the foreign affairs debate on 10th November. The right reverend Prelate the Bishop of Durham, referred to his growing disbelief in arms negotiations today, and said that in the '60s he thought there was more hope of disarmament. But, since then, who has been the major proliferator of arms?—the Soviet Union.
The noble Lord, Lord Stewart of Fulham, who I know is to speak in a moment, said that the Soviets understood that they could not invade a NATO country, but could, with impunity, invade one outside NATO, as they did. There was a body of people, he stated, who seemed hell bent on encouraging us to disarm, while the Soviets waited for this to take place. He went on at column 140 of Hansard:
"There is no doubt at all that propaganda for unilateral disarmament is the actual enemy of multilateral disarmament",
and I am one of many who agree with him. In the same debate, my noble friend Lord Beloff stated that getting rid of cruise and Pershing missiles was not the CND's primary objective; rather it was to undermine NATO—a policy which the Soviets have consistently adopted throughout the postwar period.
It was also pointed out by the noble Lord, Lord Houghton of Sowerby, that the Soviets have no peace movement in Russia. The one demonstration that they had in East Germany the other day was entirely directed against the United States. And the noble Lord, Lord Weidenfeld, warned of the present danger, when he urged European Governments to give the task of political enlightenment and information top priority, and drew attention to the way in which the Soviets fanned the flames of unilateral disarmament.
The noble Lord said that the Marshall Plan had guaranteed a new generation of Germans with material

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wealth and, as I have said before, it is these young people, this new generation—whether they be Germans, whether they be English, whether they be Dutch or from any of the European countries—who have lived in peace throughout the whole of their lives and are played upon by Soviet propaganda. That is what led to the demonstrations which were held in Berlin the other day within sight of the wall, and also in Bonn.
Perhaps it is interesting briefly to mention that a poll that was held by the Observer the other day stated that 53 per cent. of those questioned wanted "Yanks go home". Nevertheless, 63 per cent. wished us to retain our own independent nuclear deterrent and 73 per cent. wished us to remain in NATO. The figure that is interesting is the 53 per cent., because the majority of those people were in the age group 18 to 24.
Therefore, we must somehow explain to this generation how they are being misled. But it is very difficult. They have grown up with peace and, because they have never had any other experience, they think in a way that is different from most of us. But that does not mean that they cannot be encouraged to take a close look at what they have gained through being brought up in an era of peace. Further, the cause of peace is not helped when men of stature lend their weight to decrying our own nuclear deterrent, or imply that even if we have one we will never use it. I consider that that is almost treason, because such utterances seek to destroy the whole object of the deterrent and they, therefore, strike at the very foundation of peace.
I shall be only one more minute. Arms control is not the exclusive province of unilateralists. We all want to see limitation of arms, but only by parity in weaponry shall we preserve the state of peace that has existed in Europe for 36 years. President Reagan's offer to cancel the deployment of cruise and Pershing II missiles, in exchange for a comparable withdrawal of Soviet strike power, is a most heartening opening towards that goal. We must hope that the Soviets will abandon their policy of subversive propaganda and respond in the same spirit. A poor harvest, and the ever-increasing sums required for their defence expenditure, may start influencing the Russians to negotiate. But withdrawal of their SS20s behind the Urals is not good enough, because they can still reach everywhere except Portugal
The recent tensions between the United States and her European allies must not be allowed to undermine the promise that President Reagan's initiative holds out, in spite of Mr. Brezhnev's immediate lack of concern about it. In Geneva on 30th November, and for as long as it takes afterwards to achieve a much reduced military balance, we allies must work together in mutual trust and harmony. The Americans are not only ours but Europe's allies, and none of us must ever forget it. My Lords, I beg to move for Papers.
3.27 p.m.
Lord Stewart of Fulham: My Lords, we are indebted to the noble Earl, Lord Kimberley, for raising this question and he is to be congratulated on the fact that he has been able to do it at a time when it is peculiarly
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relevant to the destinies of Europe and of mankind. We have always maintained from these Benches, at any rate, that NATO should be an instrument not only of defence but of detente and of understanding, and at the present time it is particularly called upon to do so. We are on the eve—in fact, they have already begun—of very great discussions about the possibilities of agreed disarmament all round in Europe and in the world. It is going to be of great importance that the different members of NATO keep in close touch with each other, understand what others are doing and pursue common council.
Let us notice one of the things that has happened so far. When Mr. Michael Foot visited the Soviet Union a little while ago, Mr. Brezhnev made an offer that, if the deployment of the cruise missiles and other similar weapons was not proceeded with, he for his part would consider some reduction in the number of SS20s. I think a number of people felt that what Mr. Brezhnev offered on that occasion was not really adequate. Now, on the other hand, President Reagan has suggested that the deployment of the missiles on our side of Europe could be avoided, if similar weapons disappeared from the other side of Europe as well. He has proposed what is called the "zero option". May I say that I was glad to see that the leader of my own party welcomed that suggestion, and I was sorry to see that Monsignor Bruce Kent was quick to imply that President Reagan had an unworthy motive for making it.
Surely, what we are up against here are the opening moves in a bargaining situation, and it is quite natural for one side to say—one hopes without too much rudeness—"That is not a fair offer" and to put in one of its own. As the noble Earl, Lord Kimberley, said, we must take these offers with a pinch of salt, but still recognising that they are something that can be built on. And it will be a long process, affecting not only cruise missiles and their counterparts in eastern Europe, but many other kinds of weapons. That is why, because it is such a long and complicated process, the nations of NATO must be in close contact with each other. One really wonders why they should need to be. The advantage to all the members of NATO of the existence of the alliance is so obvious and so enormous that one wonders why, every now and again, some of them are pernickety about it. For heavens' sake! I wish we had had an alliance like this in 1938 or, some would say, even earlier—in 1912. Now we have actually in alliance a country that is, like ourselves, a democracy and that is also the most powerful country on earth. Surely this is something that one cannot dispute the advantage of unless one is generally ill-intentioned.
I hope that I shall not try to approach this subject with too much rigid hostility towards the Soviet Union and her allies, but I do not think that we can avoid this fact: we for our part—and our allies—do believe in democracy. We do not always practise it perfectly, or 100 per cent., and there are plenty of faults in our political and social system that anyone could point out. But we do genuinely try to be democratic, and all of us in the alliance can come out of it at any moment we want. That is simply not true on the other side of Europe. They do not believe in that kind of freedom. In Poland, Solidarity has been told very

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plainly that it had better stop talking about whether Poland remains a member of their alliance or not. These are important differences that they have to remember. They are not reasons why we should remain in a state of permanent hatred towards eastern Europe, but they are reasons why we should keep our defences up. And that is what NATO is about.
What on earth is it that causes there to be any difficulties between the NATO nations? To put it crudely, quite a lot of Americans think that we in Europe are an effete lot, probably made effete by too much welfare state, and that they can never be quite sure how far we will go in standing up for ourselves. Some people in Europe tend to take the view that they over there in America are a brash lot, always telling us how strong they are and how many weapons they have got, and we look upon them therefore as rather dangerous partners. These are perhaps quite natural reactions, but they are also very silly reactions. We in Europe have in fact played a good and useful part in the strength of the alliance, more than many American commentators sometimes realise. The United States has shown on many occasions in the history of events since the war that for all its strength it can act, and often has acted, with wisdom, patience and generosity.
What is needed, then, on both sides of the Atlantic is simply a better understanding among ordinary people in each country of what the other side of the Atlantic is like. This is partly a job for embassies and partly a job for various cultural organisations. However, I believe that it has not been studied sufficiently comprehensively.
I have made one point, the main point I wanted to make. It would be highly imprudent, as the clock is now showing six minutes, for me to embark upon another.

The Scarman Report
3.34 p.m.
Lord Belstead: My Lords, with the leave of your Lordships, I will now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"Mr. Speaker, with permission, I should like to make a Statement on the report of Lord Scarman's inquiry into the disorders in Brixton in April of this year, which I have published today.
"Lord Scarman's report has, at its centre, the disorders themselves. He describes these as riots—initially spontaneous and, throughout, inexcusable in their violence. He measures the immediate response to that disorder in these words:
'Those who were privileged, as I was, to hear the evidence during the inquiry, will have had many opportunities to marvel at, and be thankful for, the courage and dedication which was displayed by members of the police and emergency services in Brixton over that terrible week-end'.
"The report ranges more widely, and goes on to discuss those factors which, in Lord Scarman's view, led to the disorders. He sees then as stemming from a breakdown in confidence between the police and the coloured community, against a background of urban deprivation, racial disadvantage and a rising level of
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street crime. The report acknowledges the good work which has been done, and is being done, by the police, and others, to prevent such events recurring but emphasises that all those concerned have important lessons to learn for the future.
"Lord Scarman's detailed recommendations on policing policy and policing arrangements add up to a statement of philosophy and direction for the future which rests on the need for the police to carry out their duty with the consent and support of the community. The report rightly leads discussion away from simple concepts of 'hard' and 'soft' policing, and focuses on issues which reflect the real variety of policing, and the duty of the police to apply the law firmly and sensitively without differing standards. Lord Scarman emphasises that the consent and support of the community depend on good two-way communications between the police and the public. The operational judgment of the police will be informed, and not undermined, by consultation with the community it serves. At the same time, the community has a duty to maintain discussion with the police, and respond to their initiatives. Without consultation of this kind there will not be accountability, and the necessary balance between preserving the peace and enforcing the law will be distorted.
"I accept and endorse this statement of philosophy. It will be my responsibility, and that of my right honourable friend the Secretary of State for Scotland in his area of responsibility, in consultation with all concerned, to see that it is carried into practice.
"In particular, I accept the need to develop formal arrangements in every police force area for consultation between police and community at different levels, and for the involvement of chief officers of police in local social and economic decisions affecting policing. Similarly, I endorse the need for regular and systematic consultation at borough level in the Metropolitan Police district, where Lord Scarman recommends that the Home Secretary should remain police authority. I shall set up early discussions on the arrangements for consultation in Lambeth.
"I accept the need for more effort to be put into training with a new emphasis on the problems of policing a multiracial society, and on the prevention and handling of disorder. We must concentrate on those now in the service as well as on recruits, especially in the area of supervision and management.
"I accept that the procedure for handling complaints against the police must be substantially reformed if it is to command public confidence. I have already given this matter a great deal of consideration, and I shall bring forward proposals to the House as soon as I can.
"Mr. Speaker, as I have indicated, the rest of Lord Scarman's report is concerned with racial disadvantage, the law in the field of public order and social and economic conditions. All of these affect the problems of policing in a multiracial inner city environment.
"The report emphasises that despite the efforts of successive Governments, the problems of inner cities persist. Lord Scarman's recommendations point to

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the need to seek ways in which better co-ordination and better value for money can be achieved. That is this Government's purpose, through the Merseyside task force in particular. Equally, the report—like the study I recently presented into racial attacks—illustrates the consequences of failure fully to understand the ethnically diverse society of our inner cities, and the response it demands. We shall need to pursue that response not only in relation to Lord Scarman's report but also in reply to the valuable report of the Select Committee of this House on Racial Disadvantage.
"The police have a right to look for action by society as a whole; they must not become scapegoats. As far as the Government are concerned, we accept the responsibility, in which we must all share, to make our multi racial society work more justly.
"Mr. Speaker, my right honourable friend the Leader of the House is ready to provide time for a debate in which we can examine this important report more thoroughly than will be possible today. The House, and the country, owe to Lord Scarman a considerable debt. I welcome the report and I thank him for it".
That, my Lords, is my right honourable friend's Statement.
3.40 p.m.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble Lord, Lord Belstead, for reading the important Statement made by the Home Secretary on what one can only describe as the historic report from the noble and learned Lord. Lord Scarman, to whom we are indeed greatly indebted, not only on this occasion but on other occasions too, for the public service he renders outside his ordinary judicial duties.
Noble Lords: Hear, hear!
Lord Elwyn-Jones: My Lords, the House will have noted, I am sure with approval, some of the closing words of the Home Secretary's Statement; namely,
"As far as the Government are concerned, we accept the responsibility, in which we must all share, to make our multi racial society work more justly".
The gist of the statement has been directed, quite properly, to what is involved in the experience of Brixton and in the conclusions of the report for the relationships between the police and the public—a crucial element in the stability of our society. Not only is the report a cold, analytical, dramatic account of the dreadful events of last April, which are deplorable, but it is a pointer to the future.
We can make a new beginning based upon the recommendations of Lord Scarman. It is good to note in the Statement that not only is there support of the philosophy behind the report of Lord Scarman—and supports of philosophy can go here and there; philosophical attitudes can change—but what is significant here is the commitment that the Home Secretary will see to it that the statement of policy will be carried into practice. Its basis, as I understand it, is the greater accountability of the police and greater consultation between the police and the relevant local authorities. The need for consultation between police and community at different levels is emphasised in
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the report and accepted by the Home Secretary, and he endorses, also, the need for regular and systematic consultation at borough level in the Metropolitan Police district. We are glad to know that there are to be early discussions on the arrangements for consultation in Lambeth.
On the proposals with regard to training, that also is a part of the report which is accepted. How soon does the Minister think that the proposed new procedure for handling complaints against the police will be introduced? The Home Secretary permits himself to refer—and not surprisingly, as there has been almost universal demand for this and indeed a recognition of the need for it by the police themelves at the end of the day—to the need for substantial reform of the procedure for handling complaints against the police.
The most sombre part of Lord Scarman's report is his warning that urgent action is needed if racial disadvantage is not to become:
"an endemic, ineradicable disease threatening the very survival of our society and that if the police neglect consultation and co-operation with the local community unrest is certain and riot becomes probable".
In regard to this aspect of the report I should like to ask the Minister what is the Government's response to Lord Scarman's view that the attack on racial disadvantage must be more direct than it has been and that it must be co-ordinated by central Government who, with local authorities, must ensure that the funds made available are directed to specific areas of racial disadvantage, and he refers particularly to education and employment. Have the Government any proposals in regard to those fields, the source of a great deal of the tragedies of the inner areas of our great city?
The conculsion of Lord Scarman is that the social conditions in Brixton do not provide an excuse for disorder—that is made clear throughout the report—but they cannot be fully understood unless they are seen in the context of complex political, social and economic factors which together create a predisposition towards violent protest. This is a critical moment in our social history. We should respond positively, quickly and actively; and what I detect in this report and the whole attitude of Lord Scarman is not the conclusion of Mr. Enoch Powell—"You have seen nothing yet "—but a firm belief that it is still not too late to repair the fences in our society.
3.47 p.m.
Lord Avebury: My Lords, we also are very grateful to the noble Lord, Lord Belstead, for repeating the Statement made in another place. The report which is before your Lordships is in fact a profoundly important document for which Parliament and, indeed, the whole nation must be tremendously grateful to the noble and learned Lord, Lord Scarman, who has done his work so thoroughly and so competently in the short span of time that has been available to him since he was asked to undertake this work by the Secretary of State in April, and with that concern for justice and humanity for which the noble and learned Lord is so rightly renowned.
We warmly welcome the Statement by the Secretary of State for what is contains and particularly (if I may mention this) the emphasis on the in-service training

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of the police which the noble Lord says should be compulsory. May I ask the Minister what steps have to be taken before this recommendation can be implemented? It implies (does it not?) that police officers will have to be taken off their normal duties for the additional training which they will be receiving.
The Government's acceptance of the responsibility to make our society work more justly for the racial minorities is also warmly to be welcomed. I should like to ask the noble Lord what the Government are going to do in their rÔle as employer to see that black people get a fairer deal and, in particular, also whether they have reconsidered their refusal to incorporate equal opportunity clauses in the contracts which they have as a Government. What resources are to be made available by the Government to ensure that deprived black people do get their fair share, particularly, as the noble and learned Lord says, of jobs and education—and also I should add of training and housing, where deprivation is equally important?
There are two matters which the Statement does not mention and I should like to ask the noble Lord to touch on them. The noble and learned Lord, Lord Scarman, has said that there is evidence of racial prejudice among the police, and indeed of harassment as well. Will the noble Lord make it absolutely clear that this will not be tolerated and that new and vigorous measures will be taken to eradicate any signs of racial prejudice or harassment of minorities by the police?
Finally, would he care to say anything about Lord Scarman's recommendation that there should be amendments to the Public Order Act, first, to require advance notice of processions so that we know when fascists are going to take to the streets, but, more important, to ban racist marches in sensitive areas?
Lord Kennet: My Lords, will the noble Lord take our questions now or would he rather answer those two speeches first?
3.50 p.m.
Lord Belstead: My Lords, I am advised that I should answer the noble and learned Lord and the noble Lord, Lord Avebury, and this I will do by first thanking the noble and learned Lord, and the noble Lord, Lord Avebury, for their response to the report of the noble and learned Lord, Lord Scarman. I should, if I may, like to reinforce the thanks given at the end of my right honourable friend's Statement. This is indeed a remarkable report of very great importance to everyone and we are deeply indebted to the noble and learned Lord, Lord Scarman, for it.
I would not wish to add anything to what the noble and learned Lord, Lord Elwyn-Jones, has said about the very kernel of the report, which, so far as the policing side is concerned, is to do with accountability and consultation; except perhaps one sentence, which is that I think it is important to take on board that Lord Scarman recommends no change in the basic statutory arrangements in the Police Act 1964, and indeed endorses the position of the Home Secretary as the police authority for the Metropolitan Police district. But, of course, he then goes on to make this very important emphasis about consultation and accountability needing to go even wider and deeper, and it is this which my right honourable friend the
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Home Secretary has gone out of his way to say he accepts without reservation.
The noble and learned Lord asked about the police complaints procedure. The specific question was: How soon will the Home Secretary bring forward recommendations for alterations, which the Statement says is accepted by the Government for the complaints procedure? I am afraid that I am not in a position to give a direct answer to that question today. Consultation will need to go on in the Police Advisory Board, chaired by my right honourable friend, and I apprehend that there will be a meeting of that board fairly soon. But I am at liberty to say today that I know that my right honourable friend will wish to bring forward proposals as speedily as he can.
The noble and learned Lord asked about racial disadvantage, and this question was raised by both noble Lords. The Government have repeatedly emphasised their commitment to eliminating racial discrimination and promoting equality of opportunity. Lord Scarman has emphasised that where special needs exist special measures may be required. We have supported and we do support special programmes. We are urgently studying the report of the Select Committee on Home Affairs of another place on racial disadvantage to see what more can be done to combat racial disadvantage.
Finally, the noble and learned Lord spoke about consultation and accountability, and I have answered on that. If I may turn to the noble Lord, Lord Avebury, he asks me a specific question about training. The vehicle for changing the arrangements for training is, of course, the Police Training Council, which is chaired by the Home Office, but upon which the representatives of the police and local authority associations are to be found. I would not wish to add to what is said in the Statement, which is in essence that my right honourable friend accepts that there must now be more effort put into training, with a new emphasis on the problems of policing a multiracial society and on the prevention and handling of disorder.
The noble Lord, Lord Avebury, asked me a second question, about the employment of people from the ethnic minorities, and particularly black people. It was, of course, precisely for this reason that what has been called the Merseyside task force was set up on the recommendation of my right honourable friend the Secretary of State for the Environment. Within that there was the effort which was made by my right honourable friend to attract leading financial institutions, to try to bring into Merseyside more money in order to generate more employment; and not only in Merseyside but also in other inner city areas of the country.
3.54 p.m.
Lord Kennet: My Lords, we on the SDP Bench welcome the announcement that proposals are to be made about a new procedure for dealing with complaints against the police, and we shall look at those proposals in a constructive spirit when they are available. My Lords, it strikes the eye, even on a short examination, that about three-quarters of Lord Scarman's recommendations are about the social background and what he calls racial disadvantage; whereas, would the Government not confirm, in the

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Home Secretary's Statement about these recommendations the proportion is the other way round; it is three-quarters about the police and only one-quarter about the social background? Will the Government give at an early opportunity an indication of their approach to the very constructive recommendations on Government policy on the social side towards racial disadvantage contained in the Scarman Report? The Home Secretary having promised an early debate in the House of Commons on this report, can the Government undertake to let us have one here as soon as possible, and if possible before Christmas?
Lord Belstead: My Lords, the noble Lord criticises the balance of my right honourable friend's Statement. The terms of reference which were given to the noble and learned Lord, Lord Scarman, were an inquiry into policing as a result of the severe disturbances in Brixton, but deliberately the terms of reference were made wide by my right honourable friend; indeed, it was made clear that Lord Scarman would look into matters which had occurred in other parts of Great Britain in order that we could have the benefit of his advice on problems in inner city areas generally. I think those terms of reference are reflected in the sort of Statement which I have repeated in your Lordships' House today.
So far as a debate is concerned, this is a matter for the usual channels, but I know that my noble friend the Leader of the House will be considering this matter urgently with the Chief Whip.
Lord Inglewood: My Lords, may I ask my noble friend a question about consultation, which is something which professional policemen do not happily accept. May I ask my noble friend to give us an assurance that he does intend these consultations to be real? Where they happen in other countries, where they have been in existence since the war, there is considerable disappointment, and in England at present there are virtually none.
May I ask him one further question. How is it that when, during debates over about 10 years, a number of us have spoken about police training, about the lack of imagination among many senior officers, about consultation, and about the spread of knowledge of policing among far wider sections of the public, we have at the end of those debates had either no answer at all or the briefest reference, but when all these are put together in one report by Lord Scarman, the Government immediately adopt the lot?
Lord Belstead: My Lords, my noble friend asks me about consultation. My right honourable friend the Secretary of State endorses the need for more formal and systematic arrangements. My right honourable friend will want to hear the views of your Lordships and of another place before deciding whether legislation may be desirable. He will consult a full range of national bodies as well as taking account of the reactions of local organisations. To show that my right honourable friend's intentions are absolutely genuine in this matter, so far as the area for which he as the police authority is concerned he is setting up early discussions on the arrangements for consultations in Lambeth.
Baroness Jeger: My Lords, while recognising the remarks of Lord Scarman about the need for greater sensitivity on the part of the police in these difficult areas, can we be assured that the Government Will not put financial obstacles in the way of enlarged training of officers? I have in mind the question of sending police officers to the countries of origin of many of the people who are now living in our cities. Is the noble Lord aware that a small group of officers, including a police officer from my previous constituency, which was very cosmopolitan, spent some time in Trinidad, where they were able to see how the carnival worked and were able to get some sense of the culture and feelings of the people in their own country? it seems to me that this is the kind of enlarged police training which would be very valuable, and I hope the Minister can assure us that money will not stand in the way of that kind of programme.
Lord Belstead: My Lords, money must always be a factor in deciding on training programmes. But I would agree with the noble Baroness that there are other factors which are very important. I should like to add two to the ones which the noble Baroness, Lady Jeger, has put to the House. I think that one factor is that to prepare in the fields which the noble and learned Lord, Lord Scarman, emphasises—public order, community relations, and supervision and management—precise proposals on what is actually taught is something which must be given careful thought, and the Police Training Council is the vehicle for that. Secondly, there is the need to ensure an appropriate balance in training between training in the classroom, as it were, and training on the job, and between training centrally and training at an in-force level. That has got to be looked at as well and it will be looked at urgently in the Police Training Council.
Baroness Seear: My Lords, will the Minister comment on a point raised by my noble friend Lord Avebury about the Government's role as employer? There have been questions raised about this matter both in your Lordships' House and in the Select Committee report in another place. It would be reassuring to know that the Government were reviewing their own policy as an employer, a matter which has been open to criticism on a number of occasions.
Lord Belstead: My Lords, I do not want to be discourteous to the noble Baroness, but I did reply to a debate which the noble Baroness raised in your Lordships' House and I have nothing to add to what I said on that occasion.
Lord Pitt of Hampstead: My Lords, I am sorry that the noble Lord has nothing to add to his previous remarks. If I understood the noble Lord, Lord Avebury, correctly, and certainly if I were asking the question, I would be asking the Government whether, as the largest employer of labour in the country, they will be taking steps to ensure that their employment policy is non-discriminatory and whether the Government, as the provider of the largest number of contracts in the country, will take steps to ensure that the people with whom they enter into contracts have

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employment policies which are non-discriminatory. So far the noble Lord has not answered that particular question, and I hope that he will apply his mind to it.
I should also like to raise two other matters. The question of a debate here is, of course, for the noble Lord's noble friend the Leader of the House and the usual channels. But there are other matters that would need to be debated by this House. Indeed, at this point I should like to thank the noble and learned Lord, Lord Scarman, for his report and congratulate him on the marvellous job that he has done, particularly on the way in which he changed the whole atmosphere of the inquiry through his approach to the matter. As most noble Lords know, before he went to Brixton there was a big campaign to boycott the inquiry. The noble and learned Lord converted everybody and needs to be congratulated for that.
In fact, that is a diversion, although a very important one. What I want to ask the Minister is the following. The noble Lord in speaking about accountability said that it would not work unless it were statutory. I noticed that in anwer to the questions that have been put to the noble Lord so far, there is talk about exploring in discussions the possibility of establishing appropriate machinery in Lambeth. There was voluntary machinery in Lambeth before but it broke down. The noble and learned Lord, Lord Scarman, said we need to have statutory—
The Chancellor of the Duchy of Lancaster (Baroness Young): My Lords, I am very sorry to interrupt the noble Lord, but perhaps he would he kind enough to put his remarks in the form of a question.
Lord Pitt of Hampstead: My Lords, as the noble Baroness rose I was putting the question. The question which I was putting to the noble Lord was as follows: When are we going to discuss the question of the statutory responsibility for these discussions, because that will need to be discussed by Parliament? That was the point that I wanted to make.
Lord Belstead: My Lords, the noble and learned Lord, Lord Scarman, emphasises that consultation and accountability need to go wider and deeper than consultation between the police and the police authority. He wants the involvement of other community leaders and the community as a whole, and not just locally elected representatives. He wants consultation to take place at a local level below that of the police authority and the police area. Hence his recommendations for formal arrangements for consultation at the borough or police district level in the Metropolitan Police district and for local consultative or liaison committees in the provinces. I want to make it clear without peradventure that my right honourable friend accepts this need for wider and deeper consultations.
Lord Denham: My Lords, before your Lordships resume the debate on my noble friend Lord Kimberley's Motion, in accordance with the advice of the Companion to Standing Orders I have to inform your Lordships that there is now one hour and 50 minutes left until my noble friend Lord Trefgarne is due to begin his reply. I repeat, one hour and 50 minutes and that
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begins from the moment that the next speaker, the noble Lord, Lord Gladwyn, rises to his feet.
Baroness Llewelyn-Davies of Hastoe: My Lords, before the noble Lord sits down, may I ask him to work out the arithmetic of each speech?
Lord Denham: My Lords, I make it six minutes.

NATO: Europe/USA Relationship
4.6 p.m.
Debate resumed.
Lord Gladwyn: My Lords, I shall do my best to confine my remarks to six minutes. I believe that this debate has arisen largely by reason of the recent contradictory remarks made by various American leaders, notably President Reagan's rather unhappy observation that a nuclear war might in certain circumstances, be confined to Europe and possibly also by increasing doubts on this side of the Atlantic, about the continuing validity of the doctrine of "flexible response", to say nothing of fear arising from the possible installation of cruise missiles and Pershing Its in Europe, the whole resulting in a great increase in and demand for unilateral disarmament—a fatal proposal for surrender to the Soviet Union. To combat and reverse this mood and to stabilise our relationship with America, I should like to make the following short suggestions.
It must be frankly recognised that, while the maintenance of the North Atlantic Alliance under the general leadership of America, is obviously essential if we are not, in Europe, to come under the influence of the Soviet Union, there is necessarily some difference in the outlook of European members from the outlook of Americans if only because if war should come, whether conventional or nuclear, Europe might well bear the brunt of the fearful damage that would in any case result.
Fear of nuclear war is consequently, greater in Europe than in America and if it could in some way be mitigated there would be more chance of rallying popular support in Europe for what might be called an effective defensive effort that could certainly raise the nuclear threshold. Enormous importance consequently attaches, in European eyes, to the coming negotiations over long range tactical nuclear missiles and it is hoped, of course, for a renewal of SALT. It is also probable that European opinion, in the, I am afraid, likely event of the "zero option" not being accepted by the Russians, will be more in favour of some compromise solution than will our major ally.
That being so, the European members might perhaps be more nearly associated than seems likely at the moment with the negotiations which would probably be greatly assisted if, during the course of them and contrary, I think, to the opinion expressed by the noble Lord the Foreign Secretary this afternoon, there were first some joint declaration renouncing the first use of nuclear weapons and, secondly, the constitution of a zone on either side of the dividing line in Germany from which all "battlefield" and other nuclear weapons were to be withdrawn. I personally believe that, seeing that the Russians are probably just as

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frightened of the possibility of war as we are, both those objectives might be achieved in the comparatively near future.
In support of these vital negotiations, and, indeed, largely irrespective of their outcome, we should not necessarily increase our conventional defences, but most certainly modernise them, which could be done without very much additional expense if we on this side of the Atlantic devoted to this purpose the sums or part of the sums which it is now proposed to spend on Trident—which I now believe will in all probability come to some £10 billion—and the Americans similarly diverted some portion of the present gigantic allocations for strategic nuclear missiles when they have at the moment more than enough already to counter any possible Soviet threat.
As it would, therefore, appear that there is a specific "European" interest and attitude towards defence, it might well be formulated in some meetings held in the general framework of the new Genscher/Colombo plan, which all of those who believe in European unity trust will shortly be approved by the Council of Ministers. The argument that this is impossible because Ireland, though in the Community, is not in NATO, makes little sense, as the meetings would not take place under the auspices of the treaty, but under the general aegis of the European Council, which is quite capable of adopting any procedure which it pleases, and it is questionable whether the Irish would object to the proposal anyway.
There are, naturally, other important aspects of the European-American relationship: namely, differences over economics, over policy towards the third world, over so-called "liberation" movements, to say nothing of the great overshadowing problem of the Middle East. On all these important issues there is, however, a forum in which a joint European policy can be hammered out with a view to arguing the toss with our great ally; namely, the forum of the Council of Ministers and the European Council. But there does not seem, as yet, to have been quite the same effort devoted towards arriving at a common European policy on the overriding issue of security and, more especially, the nuclear issue. The object of my short intervention is consequently to suggest that there should be, and to indicate the broad lines on which such a policy could conceivably rest.
4.12 p.m.
Lord Saint Brides: My Lords, misconceptions and misunderstandings arise even in the best regulated alliances, and there are two at the moment in our transatlantic alliance which I should like to mention. The first and the less grave of them has already been touched on by the noble Lord, Lord Stewart of Fulham, and it is widespread in America. It is that we, the European members of NATO, are ourselves contributing scandalously little to the common defence while leaving the main burden to be shouldered by the United States.
This is a travesty of the truth, and to state the facts fully and firmly is all that is needed to refute it. But it keeps cropping up, as it did, for example, in Secretary Haig's confirmation hearings before the Senate last February, when he was asked by one senator whether
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it was not the case that America's allies were failing to do their full share of the common defence. Mr. Haig vigorously and trenchantly replied that, if war occurred tomorrow, as a NATO commander he would have got 90 per cent. of his ground forces, 80 per cent. of his naval forces and 75 per cent. of his air forces from the European nations. Our Prime Minister, Mrs. Thatcher, spoke in the same vigorous vein when she was in the United States earlier this year.
On this side of the Atlantic, there is a much graver misconception. As we all know, it is being put about in some quarters, that, for sinister motives, the Americans seek to give the ascending spiral of the nuclear arms race between the super-powers a new twist by introducing a new generation of theatre nuclear missiles and perhaps later the neutron bomb into Western Europe, by so doing greatly enhancing the risk that Europe will become the main battle-ground between the two super-powers.
Many—indeed, most—of your Lordships will share my view that these statements amount to a gross distortion of the truth; and that, on the contrary, the introduction into western Europe of theatre nuclear weapons in the numbers and according to the programme which was agreed by the whole of NATO in December 1979, failing an agreement with Russia for a reciprocal limitation on the deployment of such weapons, would be an essential means of restoring the balance of strength which has been changed so profoundly to our western European detriment. If America is seeking, by these and other means, to improve the military posture of the Atlantic Alliance, it is not at all for warmongering motives, but because the Soviet Union used the years of détente to build up both its nuclear strength and also the unprecedented array of conventional weaponry, far exceeding any imaginable defensive purposes, which stands there in central Europe today.
It is in consequence of these Soviet actions that the West has become relatively weak and now needs to catch up if it is to negotiate with the Soviet Union from a position of strength. As has often been said, it is only by negotiating from such a position that one stands a chance of achieving satisfactory results.
What I find so odd and so bizarre is that it is this process of catching up by the West to which the nuclear disarmers object, which they regard as immoral, and apparently not the overwhelming Soviet build-up of up-to-date nuclear and other weapons which has occasioned it. It was not during the years of the Soviet build-up, not during the deadly new twist which the Russians gave to the arms spiral during the years of détente, that the CND movement was revived in this country and its comparable organisations on the Continent grew to their present size; but latterly, in opposition to the counter-measures which the West has belatedly set on foot in the 23 months which have elapsed since the Soviet invasion of Afghanistan.
In France President Mitterrand and his Foreign Minister have said firmly and with emphasis that there is an urgent need to restore the nuclear balance in Europe. The French Government have announced that they intend to take steps to strengthen France's own nuclear deterrent, the force de frappe. It is significant that in taking these steps and in making

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these pronouncements the French Government undoubtedly have the support of the overwhelming mass of the French people.
My Lords, I do not fully understand and cannot explain why the Russian threat to Britain and its European partners should be underestimated in some quarters in this country. Perhaps the desire to minimise the Russian threat is the result of wishful thinking; perhaps it comes from a belief in the possibility of appeasing Russia if we take a sufficiently complaisant attitude; or perhaps it comes from a failure to grasp the profound difference in ethos between the two super-powers, between the ethos which applies in Russia—one of a basic belief in coercion—and the ethos of America where there apply the principles of freedom under law which were inherited from Britain. But, my Lords, the British people have a long history of reacting appropriately to the full facts when they are laid before them. I believe that they will do so on this occasion. Therefore, I have no fear of the long-term outcome. It is a major step forward that our great ally, the United States, should at long last have proclaimed a co-ordinated and constructive arms control policy behind which we can put our weight and our support.
4.18 p.m.
Lord Home of the Hirsel: My Lords, the anxiety which prompted my noble friend Lord Kimberley to put his Motion on the Order Paper is certainly soundly based in history. Twice in this century it has been proved that faced with a powerful and offensive enemy it required the combined strength of Europe and America to contain and defeat aggression; one or the other could not have done it, and one or the other could not do it now. That is why NATO was formed and the joint obligation was underwritten to defend the Continent and the Atlantic Ocean. Defence on that scale cannot be improvised.
Therefore, it is necessary—whether we are thinking in terms of organising the deterrent or whether we are thinking in terms of the reality of war—that the Europeans, the Americans and the NATO Council should keep in step all the time. Is that alliance still necessary? The answer must be an unequivocal Yes for two reasons, because no one has yet been able to think of a better way of keeping the peace than the balance of power. It may be man's fault, but no better way has been found.
The second reason is that the Soviet Union—and in this the Soviet is alone among the nations—openly proclaims that there are circumstances in which force may be used to achieve a political aim. Following the examples of Czechoslovakia and the more recent one of Afghanistan, and the squeeze on Poland, no one can say for certain that a country of Western Europe could not be a political aim.
Is there any faltering of will among the European allies of the United States? If there is, I think the hesitation lies in the nuclear dimension in the balance of power. The fear in Europe that if the philosophy of deterrence breaks down then the democracies of Western Europe would bear the brunt of the nuclear exchange, which breeds a corresponding fear in the United States that having accepted the responsibility—and it is an awful and awesome responsibility—of
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defending Europe (the United States has undertaken to do no less than that) the Europeans themselves might deprive the United States of the means by which they could fulfil their commitment. One understands then a certain fear on both sides, but fear is a notoriously bad counsellor, and the answer for the alliance must be to make the deterrence work.
In weighing the response of the Western democracies to the problems posed by Russia's mobilisation of fire power facts must be faced. It is demonstrable that weakness tempts to aggression. Czechoslovakia and Afghanistan are witnesses to that. While doubtless it is true that the Russian leaders will not contemplate a pre-emptive nuclear strike, nevertheless 40,000 tanks are offensively deployed in the Warsaw Pact area and relative to that the NATO strength is weak.
There are only two ways in which such a force could be neutralised. The first is if the Russians know that the NATO alliance has the defensive weaponry to make the risk of aggression too high. The second is mutual and balanced disarmament. I believe that the fear among the young, particularly in Europe, recently expressed in marches and demonstrations is not because they are convinced of the virtue or security of unilateral disarmament, but because the emphasis lately seemed to be concentrated on rearmament to the exclusion of disarmament. The speech of President Reagan has begun to correct that imbalance.
Obviously I cannot speak for other countries, but I believe that the people of the United Kingdom will accept the defensive missiles as necessary, provided urgency is given to negotiation on concrete measures of disarmament. I hope we are entering into a period of more rational and less emotional assessment in negotiations in which people will be able to judge the facts. It is necessary to give a word of caution. When I last negotiated with the Russians they would not sit down at the table unless the words "mutual and balanced" were taken out of the formula. That is some measure of the difficulty we will face. The Russians have never yet agreed to verification of obligations undertaken. I hope we have all learned something since then.
This is a short debate. I shall not prolong it. But I hope that we shall have less loose talk in the context of nuclear and conventional arms. All that needs to be said is that if the Russians were to launch an aggression NATO would use those weapons which are required to defeat it. We need not say more, and we ought not to say less. In Europe we could do more to recognise what I have called the awesome commitment of the defence of Europe undertaken by the United States. We are lucky to have such an ally. With a little more comprehension and understanding, I believe the alliance will remain united and will succeed in its double task of deterring aggression and guarding the peace.
4.24 p.m.
Lord Kennet: My Lords, it is only a fortnight since the House last discussed NATO, but during that fortnight the deadly blockage of the last two years has begun visibly to loosen up. It is now understood in Washington that if Russia is wrongfully occupying Afghanistan that is not a reason to refuse contact; it may even be a reason to accelerate contact so long as nothing is done which condones that occupation.

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If we are to wait for a virtuous Russia before talking about disarmament, we shall see no disarmament. We live in a world of sinners: and sin, by definition, is not the monopoly of other people.
President Reagan's opening bid for the coming negotiations was a reasonable one, and we in Europe should certainly close ranks behind it. It included four things in a comprehensive framework: the European nuclear missile balance; strategic arms reduction talks, the new formulation, START; conventional reductions, and confidence building measures; and lastly the European disarmament conference beloved of France. It is good to know that this package was welcomed, though in measured terms, by Professor E. P. Thompson, the brains of CND. And within a few days of this Mr. Brezhnev had gone to Bonn and unveiled his own opening bid.
True enough, they are far apart: America wants Russia to dismantle all its IRBMs, or presumably all of those on the western front, including not only the SS20s but also the ancient SS4s and 5s, in return for NATO cancelling the intended deployment of cruise and Pershing II missiles. The Soviet Union, on the other hand, offers a reduction of IRBMs, without saying which type, and I quote, "not by dozens, but by hundreds". Nor does it specify the quid pro quo. But I think in context we must read this to mean in return for the same quid pro quo; namely, the zero option on the Western side. As bids in a still completely public negotiation go, these are not too far apart. One can already foresee quite a few possible compromise outcomes. But let us leave the negotiators to their work.
Hope has returned, and we should record the outstanding part played in its return by Chancellor Schmidt, the leader of the German Social Democrat Party. Let us remember his extremely eloquent and skilful speech to the Labour Party Conference in 1974 when he begged that party to maintain its European Community allegiance. What a pity it did not listen to him. Let us remember his Alastair Buchan memorial lecture of 1977 when he expressed here in London, and in English, the principle which his country has followed since; the "two possible ways".
"There are two possible ways"—
he said—
"of establishing a conventional balance with the Warsaw Pact states".
And the remark is equally true of the nuclear balance.
"One would he for the Western Alliance to undertake a massive build-up of forces and weapons systems: the other for both NATO and the Warsaw Pact to reduce their force strength and achieve an overall balance at a lower level. I prefer the latter",
said Chancellor Schmidt. So do we all. Let us also remember the fortitude with which Chancellor Schmidt recently, despite alarming ill health, stood his ground against a big unilateralist swing in the SPD, and unilateralist demonstrations in Bonn of unexampled size, and succeeded at last in bringing all the horses to the water. We should now pray that they will drink.
A new tone was set in Washington by President Reagan's speech last week. In it he at last, at long last, became the first American leader to avoid the shameful designations, "theatre nuclear weapons"
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and "tactical nuclear weapons". He called the things throughout by their right name; intermediate range nuclear forces. We should be very grateful for that. With any luck, the stories about the Reagan Administration's supposed willingness to fight a nuclear war to the last European can now be laid to rest. Let us file them under the labels "canards" and "Aunt Sallies". The first great point about deterrence is, and always has been, that it should look as doubtful and as horrible as possible. That is how you deter. The other great point about it is, and always has been, that it is the second most dangerous way of getting through the nuclear age. The most dangerous way would be unilateral disarmament. The least dangerous is multilateral disarmament. Nobody in their senses would prolong a high level deterrent policy for a moment after they had the opportunity of establishing a lower level one by multilateral disarmament.
The next move, therefore, has to be towards minimum deterrent forces. At present the two sides face each other with nuclear stockpiles a thousand times what would be needed to deter either from attacking the other. Let them get that down to say, 10 times, or even five; the deterrence will still be complete. Let us then all draw a deep breath and see if we can go further.
At a certain point in the procedure the British and French independent nuclear forces become relevant. It must be the purpose of all nuclear powers to possess only that minimum of nuclear forces needed to achieve deterrence in a world where nuclear weapons still exist. This is the key to the whole matter. It is the doctrine of minimum deterrence: the French and Chinese Governments act in accordance with it. It is also implicit in what Secretaries Haig and Weinberger and Mr. Eugene Rostow, the Director of the Arms Control Disarmament Agency in Washington, have been recently saying. Lord Mountbatten espoused it. It is favoured in Pugwash.
Britain and France have in fact always been at the minimum level, but when the super-powers have reduced their nuclear weapons enough for our minimum forces to become relevant, then Britain and France must become directly interested and, if their own forces are to be discussed, they must of course be full parties at the negotiating table. That is some time ahead. In the meantime, we must salute not only Chancellor Schmidt's achievement, but also the new attempt by the super-powers to resume nuclear disarmament negotiations after a gap of 15 years or more. We must use words according to their meanings, and "disarmament" does not mean refraining from building weapons nor moving existing weapons around; it means dismantling and destroying weapons. That is why the present moment is so hopeful.
4.31 p.m.
Lord Lucas of Chilworth: My Lords, I do not dissent from anything that has been said today, but I draw your Lordships' attention to the fact that all speakers have so far concerned themselves with what I might call the military aspects of the alliance. I do not think anybody would doubt the value of the alliance and the need for free and independent people to defend that freedom. On the other hand, I believe the main quarrel at present between us and our allies, the

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Americans, is that there appears to be a total concentration of effort on this military aspect, whereas I believe there is another arm which should be examined.
At the North Atlantic Assembly meeting earlier this year, Mr. Eagleburger, the Assistant Secretary of State for European Affairs, said the United States were concerned about pressures in Europe to change a policy which had prevented war for over 30 years. I do not know why there should be concern that the policy should be challenged. It should be challenged and it is certainly challenged. It is challenged by a new generation of people born in times of world peace. in an era of comparative freedom. That generation points an accusing finger at NATO, at what it sees as an association of ageing World War II veterans who are pursuing much the same policies, those of arms and deterrence, as were formulated 35 years ago. They ask, through conferences, demonstrations and so on, a number of questions which are difficult to answer. Indeed, we as parliamentarians have totally failed in the alliance to answer those questions, and we leave it to the newspapers and indeed to our enemies to put answers into those questioning mouths.
In the summer there was a meeting in Oxford of the Atlantic Association of Young Political Leaders. I attended it with colleagues from the Education, Cultural Affairs and Information Committee of the Assembly and we were greatly distressed by the ill-preparedness of the delegates who came to discuss matters such as we are discussing this afternoon. They were totally unaware of any of the achievements of the alliance, either through the Assembly or through the military alliance, and at the end they said, "Surely there must be a way to teach history, civic education and ethics, all developed one with another, through the curricula of schools. There should be an opportunity to expose young people to the realities of international affairs".
We in this country do not do that very well, nor do we do it very well in Europe. Indeed, at the Assembly's meeting in Munich in October, one speaker after another, unconcerned with the Education, Cultural Affairs and Information Committee, called for educational programmes so that the questioning and challenging generation could be made aware of what was being done, and why. M. Aumont of France, Snr. Falluchi of Italy and Herr Hupka of the Federal Republic of Germany, among others, all called, in their separate ways, for a wider educational process. The Education, Cultural Affairs and Information Committee adopted a text calling on the Assembly to provide the facilities, but the reality is that there are no funds available. The Secretary-General himself said: "We publish reports of the Assembly's deliberations, but we do not have the resources to disseminate that information".
Until such time as proper resources are provided for what one might call the talking or parliamentary arm of the alliance to do their kind of work, and they are ready to do it, there can be little change in this questioning attitude and the relationship between ourselves, particularly in Europe, and the North Americans, where there is a gulf of misunderstanding, suspicion and distrust. That gulf can be healed only by a greater knowledge of each other's way of thinking, our attitude towards current political and military problems and a realisation of what is being done.
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I urge all members of the alliance to provide those kind of funds for this peaceful occupation of energies concerned with NATO and its relationships.
4.37 p.m.
Lord Jenkins of Putney: My Lords, the last two speakers have done something to rescue the debate from disrepute as a result of the manner in which the noble Earl, Lord Kimberley, introduced the matter. He did a disservice to his own cause and to this House. It is not for me to assist his cause, but I am concerned about the reputation of your Lordships' House and Parliament. The purpose of Parliamentary privilege is not to enable noble Lords to slander and attack people in a manner which they would not be prepared to do outside this House.
It is extremely damaging for a member of the Labour Party to be declared to be a communist. Some years ago the Daily Mirror had to pay £10,000 to George Elvin, General Secretary of the ACCT, because they said he was a member of the Communist Party, a communist or was sympathetic to communism, or something of that sort. I suggest that if the noble Earl were outside this Chamber and accused Monsignor Bruce Kent or Professor Michael Pentz in the terms he used inside this Chamber, it would cost him about £100,000. If the noble Earl disagrees with that, let him put the matter to the test; let him have the courage to say outside this Chamber what he said inside it, and then we shall see what substance there is in what he had to say. I believe the law would demonstrate to him that there was no substance in it whatsoever.
As for the nature of the campaign, the CND is an organisation of protest and it is obvious that it has members of the Communist Party in it; it would be impossible for that not to be the case. But because of that, is it right for the noble Earl to try to denigrate the entire organisation? Is everybody who supports unilateral disarmament to be accused, as another noble Lord put it, of wittingly or unwittingly playing the Russian game? Are noble Lords here who support this cause to be accused of that? Is the new Shadow Defence Spokesman, Mr. John Silkin, to be accused of disloyalty because he does not believe in the present policy of the Government?
What are the Government beginning to say? They are getting themselves into very deep water if they are saying that everybody who fails to agree with them is disloyal to this country. That is the position they are getting themselves into, and they are beginning to say it about some people about whom they have no right to say it. If any kind of dissent with Government policy, if disagreement with the development of nuclear war, is to be regarded as disloyal and in some way incapable of being uttered by anyone with the real interests of this country at heart, then that is a position about which the Government had better think again.
I believe that the Government are beginning to think again about it. We have not heard from the Front Bench recently the kind of McCarthyite business which we were hearing a few months ago. I believe that the Government have realised that this kind of thing does not pay, and I am rather inclined to wonder whether they will regard the noble Earl as having performed a

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service on their behalf this afternoon. I am somewhat inclined to doubt it.
In a recent debate in which I took part at Bristol University the case for the NATO proposition, full-scale nuclear arming, was put by Mr. Peter Blaker, and Colonel Alford of the Institute of Strategic Studies, in a manner which commanded respect. They did not attempt to denigrate their opponents. They put their case straight, and we put our case straight. We won, but by a fairly small margin, and it is my belief that this was precisely because they did not attempt to denigrate the cause that we represented, but tried to face the facts of the position.
Since I have had to spend my time in defending our integrity—I have spent four minutes in that—I have left myself with only one minute in which to try to put our case. Clearly I simply cannot do that, and I shall have to leave it to other speakers. However, I would say to your Lordships that I hope that when, on another occasion, we return to this subject, we shall do so on a different basis, because there is a reasonable argument to be put and to be heard on both sides, and that is what I was told this House was for when I came into it.
4.41 p.m.
The Earl of Cork and Orrery: My Lords, perhaps it is as well that due to lack of time I am prevented from replying to the noble Lord, Lord Jenkins of Putney. At the risk of striking a slightly discordant note, I should like to refer to two recent happenings, both on the other side of the Atlantic, one of which at least your Lordships will already have heard of, perhaps almost too often. I refer to the recent exchange between Mr. Haig and Mr. Weinberger. As your Lordships will remember, Mr. Haig, as the Secretary of State, is reported as referring to the fact that NATO had a contingency plan for firing a demonstrative nuclear weapon across the bows (as it were) of the Russians in time of war, if they thought that they were going too far. That was contradicted by Mr. Weinberger, the Minister of Defence, who said that there was no such contingency plan and—I think I am right in saying this—there never has been.
Now, the question is, who was right? At this point there enters into the discussion a third authority, for whose existence I personally can vouch, but whom I cannot identify, who said that in fact they were both right, because Mr. Weinberger had been referring to contingency planning—he said that there had not been such a contingency plan—while Mr. Haig, on the other hand, was referring to options; and it was clear that the firing of a nuclear shot in certain circumstances was a possible option, or might become so. Therefore there was no connection between the two.
Then, within a few hours of that happening, I turned on my television set, and what did I see? I saw Mr. Haig, with whom I am acquainted, and whom therefore I can recognise, and I heard him say that NATO has contingency plans for the firing of a nuclear shot across the bows of the Russians. So where are we now? One is saying one thing, one is saying the other, and the third apparently is disagreeing with them both. Where are we? Well, I hope that we are in the same position of loyalty towards and trust of our friends, the allies, as we were previously. But that does not make it very
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much easier, and in my opinion it has three effects.
The first effect is to cast doubts on the truth or otherwise of what is actually said. The second effect is to raise doubts concerning the responsibility (if that is the right word) of those who make these statements. What reliance are we to place upon them? I shall mention the third effect in a moment when I have said something about the CBS reports.
Some of your Lordships, perhaps most of you, will have seen these reports. They were transmitted on British television a few weeks ago, and they dealt with the defence of the United States. I think there were five of them, but at any rate the last one (which is the one I am thinking of) dealt with what is known as the notion of the integrated battlefield. The idea of this is, roughly, if I understand it properly, that one cannot shift from non-nuclear warfare—I refuse to use the word "conventional"—to nuclear warfare without a lot of logistical upsets, movements, and running about which would draw the attention of the enemy, and so forefeit surprise. Therefore there is the expedient known as the integrated battlefield, in which one starts with all the weapons readily deployed, and so one is enabled to shift from one to the other, from non-nuclear to nuclear, and back again—in my opinion a crazily dangerous idea, if ever I heard one.
That point came out in the programme. Again, we had another authority coming in, and, when he was asked a question about this point, in the course of his answer he produced a statement to the effect that American strategic policy is not made by the CBS cameras. No, it is not made by CBS cameras, and the programme was not made by them, either. It was made by American officers in uniform, talking and training in front of the CBS cameras, by which it was recorded, and through which it was broadcast presumably to the rest of the world.
That is a very alarming state of affairs, and it brings me straight to the third effect that I mentioned a few moments ago. It amounts to this. Such a programme might have been written deliberately as a recruiting programme for the CND. In saying that, I imply no criticism at all of the CND; I merely state this fact—and I believe that it is a fact.
When one member of the alliance, any alliance, speaks, or seems to speak, with what I would describe as a bewildering or uncertain voice, I believe that other members, or individual citizens of other member countries, have a duty not to maintain a discreet and tactful silence, but to speak up, and say so. I hope your Lordships will agree.
4.47 p.m.
Lord Gore-Booth: My Lords, I hope that I might make the shortest speech of the debate, which has been full of very important and very encouraging speeches on this extremely critical situation, which might become worse before it gets better—and that means a very great deal. I wish to allude very briefly to two items which seem to me to be working against us and which we need to be aware of, even if they are not susceptible of improving by legislation. One of them, quite frankly, is a feeling which hangs like a shroud over many people. It is that for some reason or another which they do not quite know, they do not like Americans.

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I agreed very much with the noble Lord—two speakers ago, I think—who said that the educational process would play a very important part in the immediate and near future in strengthening our own affairs and keeping our morale straight. We live in an age which is only gradually recovering from what one might call the era of decadence in much of British literature. I want very much to underline the point that in so far as people who write can get out of that era, that will improve in every other way our capacity to give a good account of ourselves if the worst should happen. Of course, one must not forget what the worst would be like if it did happen. Not only is it our duty to arm ourselves sensibly and efficiently; I am quite sure that we need to arm our psychological side, too. I think that this really refers to all parts of our country's activities. I think this also applies to the writing of literature. Not only that—this is a purely human thing, but, after all, the most important thing in the world is the survival of human beings—but we need to have more consciousness of what can be done by false information and by aggressively pessimistic views of our own country and our own society. I believe this to be a very important aspect of our whole civilisation and its preservation.
As I said, this is not a thing you can do by legislation or by making a law about this, that or the other; it is simply that there is a need in our society for a consciousness that we have been through a period in which many great things have been done and have been invented, and that it will continue. But it is really very important, to my mind, that the backward-looking and pessimistic view of our society that so many people indulge in by way of careless talking—and I do not mean this about armaments or any such thing, but simply the talking down of our own society, its abilities and its potentialities—can create more of a pessimistic feeling throughout the country, even if not intended, than should ever be the case.
One thing that perhaps increases our vulnerability (and this has been alluded to already) is the lamentable ignorance in our country of what Americans are like—what they do, whether they are for us or against us, and so on. I think that our educational side, whether it be the private sector or otherwise, has been very much lacking in informing our people of the nature, the talents and everything else of our absolutely vital allies; because if things did go badly then I think it is common understanding that if we did not have the Americans as our trusting allies our prospects would indeed be very poor.
I hope that this rather short and perhaps not very eloquent account of this danger has at least shown that there is a problem on the psychological side in our present society of which we must be conscious, and that there must be a conscious effort by our Government, by our rulers, and by those of our people who do not feel like this to make quite sure that this kind of psychology does not grow.
4.53 p.m.
Lord Beloff: My Lords, the 30 and more years of peace and growing prosperity that Europe has enjoyed has been due to two innovations in the post-war world, both of which we owe largely to American inspiration and leadership. One is the North Atlantic Alliance, which is our proper subject today, and the
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other is the movement for European integration, particularly economic integration, with which it is closely connected and of which it is an important support. Both these are now simultaneously, as we know, under criticism and under attack.
One of these has been mentioned; indeed, it was mentioned at the beginning of this debate by the noble Earl, Lord Kimberley, when he spoke about the CND. I am not perhaps over-worried about the impact of the CND and that type of thinking in this country. We have had that sort of thing with us for a very long time. Noble Lords from north of the border will remember that Robert Burns wrote an ode to a member of the CND:
"Wee, sleekit, cow'rin', tim'rous beastie,
O what a panic's in thy breastie!".
But it is the effect on others; it is the effect on the young; it is the effect on other countries. In a broadcast yesterday morning Mr. Michael Binyon, The Times correspondent in Moscow who has done a great deal, I think, in the past few years to explain to us the nature of Soviet society, its aims and its fears, pointed out from Bonn that the Russians had clearly arrived there vastly over-estimating the impact that these peace demonstrations had made, and therefore believing, quite wrongly, that they would find Chancellor Schmidt very ready to give way. Equally on the other side of the Atlantic these reports are bound to create some questioning.
But the important thing is not, I think, even now, these movements, however large they are: the important thing is Governments, present and future. The noble Earl, Lord Cork and Orrery, has pointed to the fact (and no one could deny it) that in the presentation of American policy there is from time to time a good deal of confusion and disarray. It is the nature of the American governmental system that it should be so. But at the same time we have to admit that not only within this Administration but as between succeeding American Administrations there has been no departure from the fundamental belief that it is in their interests to preserve the freedom of Western Europe and to promote its further integration.
It is when they look at this country, for instance, that they find a Government which is united but a Government which could be replaced by an opposition party which denies both the foundations of this 30 years of peace. As the noble Lord, Lord Jenkins, pointed out, the Opposition is now represented on defence matters by a self-confessed unilateralist. They are represented on European matters by Mr. Eric Heifer, one of whose main points in his political career in recent years has been to denigrate any value to be got out of our association with Europe. It is true that the right honourable Denis Healey still figures on that Front Bench, but what he is doing there it is difficult to say, unless he believes in the medical adage that every gouty foot needs a foot-stool.
I think it is up to those who represent that party in this House to say whether they accept the policy of their party or whether they reject it. In the case of Back-Bench Members like Lord Stewart of Fulham, we know precisely where he stands; but he is not, I think, in the position of the Leader of the Opposition, Lord Peart, who in the debate on the Address declared,

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"I am not a unilateralist".—[Official Report, 10/11/81; col. 220.].
And he repeated that declaration today. I must say that I have some sympathy with the erstwhile noble Lord, the erstwhile Lord Stansgate, when he says it is odd to have people representing a party in a formal capacity and denying its party policy; and I can see that across the Atlantic, or even across the Channel, there must be grave confusion. What credibility can be given to a British Government today if it could be replaced by a Government taking precisely the opposite view? That, I think, is the question to which the noble Baroness, Lady Llewelyn-Davies, will have to address herself when she replies to this debate from the other side of the House.
In the debate on 10th November, in which she took part, she said—and I quote from Hansard, column 117:
"We do not have to be rigid militarists, multilateralists, unilateralists or to belong to any one particular category".
I do not know whether, if she seeks spiritual consolation from the right reverend Prelates, she says, "Do I have to be a Christian, a Jew or a Moslem, or would some combination of these do?" It is our contention on this side of the House that unilateralism and multi-lateralism are not one and the same thing: one is deeply and totally opposed to the other.
5 P.m.
Lord Shinwell: My Lords, in the last 31 years since the United States agreed to an association with the other countries of the West in the North Atlantic Alliance and President Truman agreed, provided conditions were satisfactory and that we would meet our obligations, that the then General Eisenhower would be sent over to Europe to act as Supreme Commander, relations have been strained; but they have been of a minor character. After all, we must take note that even among the Americans relations are strained. General Haig does not always agree with Defence Secretary Weinberger; and sometimes we do not know who President Reagan agrees with. Sometimes the Americans doubted our sincerity and whether we meant business or whether we would provide the manpower, equipment and expenditure and sometimes we were a little doubtful about the Americans because they tried to indulge in domination and occasionally insisted that we must purchase weapons that we did not think necessary.
But in spite of these minor difficulties the fact remains (there is no escape from it) that for the last 30 years the maintenance of peace and the prevention of another war has been due to the association of the United States with other Western countries; and so it must remain, whether we like it or not. I like it. It does not bother me a bit and I hope that other noble Lords will like it. But we have to accept that there are exceptions. But whether we like it or not, we have to rely on the strength, the influence, the military power and the financial resources of the United States in the Atlantic alliance in order to maintain peace and, in the event of a conflict of a conventional character, to resist aggression. There is no escape from it. All this talk about demonstrations and unilateralism and multilateralism is quite irrelevant.
I am speaking in terms not of the possibility of
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nuclear war but of conventional war. Now dealing with nuclear war, I do not believe for a moment that the Russians want a nuclear war. Indeed, I am pleased, to some extent, with what happened the other day at Bonn between Chancellor Schmidt and President Brezhnev. They did not completely agree, but I think they are on the right road in having discussions and consultations. The Russians do not want a nuclear war. What will they gain by it? Supposing that they destroy London and Glasgow and Edinburgh; supposing that they annihilate millions of people in this country, with a scorched earth policy, do you think they will send their parachutists over and take possession of it? No. They are not looking for that. Neither do we want nuclear war. But there is always the possibility of a conventional conflict.
Now I come down to brass tacks. What I wanted to know from this debate is this: Are we satisfied with the strength, the influence, the equipment and the strategy of the North American alliance? That is the important consideration. Are we satisfied about the manpower, about the equipment, about the training, about the forces that will be available in the event of conflict? Are we satisfied about the mobility of transport, about the provision of foodstuffs for the civilian population in the event of conflict; and also what is required for the forces themselves? These are the considerations that ought to be entertained by Members of your Lordships' House and by all those concerned.
The fact is that we do not know about these things. We get very little information about these matters—partly on grounds of security; and I do not understand why security should enter into the argument at all. These are matters upon which the public are entitled to be informed and, at any rate, we are entitled to be informed. I wonder whether we will get information tonight. I doubt it. Perhaps we ought not to expect it, but we ought to be saying this. Are we satisfied with our strength or are we dismayed at our weakness? These are primary considerations. I make no bones about it. I do not believe in anything unilateral. I do not think that the unilateralists could achieve any objective of any advantage. I can understand people believing in that. Why not? It is a free country. We have eccentric people. Some think they are insane. I do not go as far as that. I sometimes think they are obscene; but they are entitled to express their opinion. I reject their views.
I rely on what I have said in previous debates. We must maintain the Altantic Alliance. It is unity that we want. The strength we have got, not for purposes of using it, but for a deterrent to begin with. But, in circumstances which we cannot control, we must act in unity in order to provide security for our people and to provide security for the people of the West. That is our purpose. I hope we will have no nonsense about that. Whether the unilateralists become powerful or weak or whether we decide on unilateral discussion, whether anything of that sort happens, let us make it a primary consideration, along with the United States of America, that, despite the occasional differences, we will maintain the alliance in order to promote peace—and that is the first consideration—and, in the event of a conventional conflict, to resist aggression.
5.8 p.m.
Lord Orr-Ewing: My Lords, in attempting to speak for only six minutes one must cut out some of the niceties of debate. The public and parliamentarians alike must have been surprised by the seeming spontaneity with which large crowds gathered in almost every Western European NATO capital in recent weeks and weekends to shout anti-American slogans, to urge unilateral nuclear disarmament and to call for peace. In calling for peace, they are only echoing what every one of us wants. For many years, it has been Moscow's ambition to drive a wedge of hostility and misunderstanding between the USA and Europe. The Soviets see more clearly than perhaps the 250 million of us living in Western Europe that if the USA become disenchanted and withdraw their 350,000 troops from Western Europe, their aircraft, their tanks, ships and their nuclear shield, the alliance will collapse. That is why the Soviets devote so much effort to NATO's disruption.
I saw a BBC programme called "World Tonight" on November 12th where Don Milner interviewed Dr. Joseph Luns who has been the Secretary General of NATO for over 10 years. In reply to Don Milner, Dr. Luns gave three instances. He said
"In all the reports I see from agents of the KGB, or other security services, who defect to the West, all mention the fact that the Soviet Union is paying for the Peace Movements".
He went on, secondly:
"On the 19th October, a KGB defector before the German wireless declared that the Soviet Union was paying for the Peace Movement in Western Europe".
Thirdly, he said:
"At the end of October a Soviet diplomat was expelled from Denmark and some days later one of the leaders of the Peace Movement in Denmark and his wife were arrested for having received chunks of money from the Soviet Union to promote the Movement and for having been in constant connection with those spies".
We saw well-meaning people collecting in numbers of 150,000 or even 250,000 (depending upon whose figures you believe) in Hyde Park recently to demonstrate. Special trains and special buses were provided for all and these were quite free of charge. At the annual meeting of the United Kingdom CND recently, the chairman—and I think the noble Lord, Lord Jenkins, was in the chair at the time; and I am sorry he is not here at the moment—was asked where the money came from. No one was able to get a reply. The Labour Party and the TUC have both said that they did not finance these gatherings. Who paid for the special trains and for the special buses? Who paid for them to go all over Europe, across frontiers, to gather huge crowds demonstrating on similar lines in all the capitals?
I think this is an incredibly well organised campaign and it is nurtured, as we have heard from fundamentally honest people of great integrity, by Moscow and the Soviets. They have achieved outstanding success. When, in 1976, they mounted a campaign to dissuade President Carter in his early days from building the neutron bomb, they had the first of these great successes. I saw recently published in the American Bar Association intelligence report for April 1981 the following figures: The Soviets launched a major propaganda campaign against the neutron bomb. It is officially estimated that this specific campaign cost £100 million
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dollars. It was part of a Soviet general campaign aimed at preventing NATO from modernising its theatre nuclear forces.
Such was the success of that campaign that they are following on now to try and prevent the deployment of theatre nuclear forces to match the SS20s now being deployed every two weeks across the Iron Curtain and in Europe. Fortunately—and I think I have to say this—if you read the MORI report in The Times today, this country is much more staunch than perhaps some of our allies realise. The report published in The Times says that 69 per cent. of our population oppose unilateralism, that 23 per cent. are in favour.
It is somewhat disturbing that in the younger element who knew nothing of the last war, the 15 to 24-year-olds, there is a bigger percentage; 29 per cent. of those favour unilateralism. I picked up today—the CND are working feverishly in the schools—a phamphlet being circulated in the schools called Schools against the Bomb. It is put out by Monseignor Bruce Kent and other members of the nuclear disarmament campaign. We have to counter this, because if they indoctrinate the young they will grow up and they may influence our allies into believing that we are rotten at the core. We are not. We are solid, honest and reasonably well armed, and we must say so wide and handsome.
The noble Lord, Lord Chalfont, in a recent speech in this House, said that Her Majesty's Government have documented evidence of the extent to which alien political influences are exploiting the peace movements in western Europe and the USA. If this is true, I would say to my noble friend who is to wind up that surely we must publish these facts. The intelligence people in all countries like to keep the cards so close to their chests that they never actually expose them and help our cause.
Has not the time come to say where the money is coming from, who is providing the money, what are the routes? It must be known who paid for the trains and who paid for the buses all over western Europe. Cannot our intelligence service publish these facts and go on the radio and tell the population about it? I would urge my noble friend to be more forthcoming. We are going to lose this battle unless we publish the facts high and wide.
5.14 p.m.
The Earl of Bessborough: My Lords, I thank my noble friend for giving us the opportunity to put a European Community point of view in regard to relations between European members of NATO and the United States. Having been for many years president and chairman of the European Atlantic Group and later vice-president of the European Parliament, I think we should welcome President Reagan's American concept of peace, and we must all recognise and emphasise the value of deterrent nuclear weapons as tools of peace in a world where one political leader does not know the potential for good or evil in another. In the non-communist world the people can democratically dismiss one Government for another. Not so in the USSR. In non-communist societies mankind has a spiritual end—love thy neighbour as thyself—and not the purely material ends of marxism. I feel, therefore, that we should challenge the Soviet Union to abandon its self

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appointed role as propagator of communist revolution and allow people to choose and evolve their own political systems.
This is the kernel of the conflict in Poland and Afghanistan. If the USSR withdrew from Afghanistan and allowed Poland to develop its own political institutions, the whole international climate would change. The European Community is a practical example of the recognition of common interests in political co-operation: of feeding our indigenous populations and promoting relations with less developed countries. I believe we should invite the US Administration and US firms to assist in these developments in order to strengthen Europe as a bastion of basic human freedom.
In a short speech let me also salute the US decision to purchase trainer aircraft manufactured by British Aerospace and the co-operation between US and British firms in developing the Harrier aircraft which I have looked at closely in St. Louis, Missouri. I should also take up the call of my honourable friend the Secretary of State for Defence in his lecture on the 17th November for specialisation among the European members of NATO. The United States can certainly assist this process through consistent purchasing policies.
I think we should also remind the United States that the Community has unique treaty obligations to the African, Caribbean and Pacific states, designed to help their own internal social and economic growth; and I hope that following the Cancun summit the United States Government will co-operate with Community institutions in developing these new relationships.
I believe that the proposals of Herr Genscher and Signor Colombo should be supported by Her Majesty's Government—that is, proposals for a joint analysis of worldwide and regional threats to the Community, the United States and other nations, and proposals for the development of common policies to counter such threats with the aim of improving the Community's collective capacity to react in consultation with the United States and NATO. I believe, too, that such consultation should be extended to include China and Japan, and that we should all jointly develop policies for stability based on an equilibrium of forces.
I would end by challenging the Soviet Union to abandon revolution and disarm unilaterally in nuclear weapons. I often ask, since the USSR supports unilateralists in western Europe, why do they not set an example by unilaterally disarming themselves? Having regard to their vast lebensraum and rich resources within their own territories and the existence of large buffer zones between themselves and the states of a different ideology, I think they could safely do so.
We may welcome President Brezhnev's offer to withdraw some SS20 missiles behind the Urals. But in my view, nothing less than an offer of total unilateral nuclear disarmament will really make us in the West feel that the Soviet Union is genuine in its desire for peace.
I have a few seconds left and I want to mention the Diligent Report to the European Parliament on the protection and surveillance of shipping routes for oil and raw materials which was approved recently
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by the European Parliament. I should like to draw that to the attention of my noble friend Lord Trefgarne. Finally, I think that we should say to the United States that an effective challenge to Soviet Marxism depends not only on social and economic progress in the West, but also on a new European-North American Marshall Plan designed to bring the peoples of the less developed countries to what some describe as the banquet of life.
5.20 p.m.
Lord Hunt of Tanworth: My Lords, a lot has been said this afternoon about the pacifists, whose views I respect, and about the fellow travellers, with whom I disagree. But rather less has been said about a section of our communities which I think is more disturbing—that is, the number of sensible, moderate, ordinary, intelligent people who have always felt a loyalty to the alliance but who now feel that things are getting out of control, that we do not know what we are doing and that war in Europe is more likely.
In one way, it is not surprising that sensible people are worried. For 36 years we have sheltered under the American nuclear umbrella, and now people have been allowed to get the impression that, because of Soviet military strength, the American deterrent may only deter an attack against the United States itself and that plans are being made to fight a limited nuclear war in Europe. This is a travesty of the situation. It is partly the penalty of a free press and a free society, and I am afraid it is partly the fault of the Governments in the alliance, which until recently—and I emphasise that word "recently"—have either been coy about their defence policies or have even been confused about them.
I do not myself believe that the danger of war in Europe is any greater than it has ever been since the war, and, indeed, if you look at it from Soviet Union's point of view, with China on one flank and with supply lines going through Poland on another, they would be very foolish to run risks at the present time. The risk is not one of war: it is one of intimidation or collapse of determination, and that is why the European leaders in 1978—and let us remember it was the European leaders and not the United States who took the initiative—felt that something had to be done to counter the menace of the SS20s and thus to avoid decoupling Europe from the United States. The aim of modernisation of the theatre nuclear forces was, as we all know, to show the USSR that it could not risk an attack in Europe or a threat to Europe without exposing its own territory to attack from Europe, and thus for Europe to avoid nuclear blackmail—in other words to extend the concept of deterrence by showing that there is a way of defending Europe other than through the use of long-range strategic weapons.
To the unilateralists, this is seen as the United States preparing to fight the USSR on European soil. The truth is that it is demonstrating a continuing United States commitment to Europe to deter the USSR from calculation in Europe: in other words to show that there is a continuing third choice between the alternatives of being "red or dead". It seems to me that the real risk would come if we ever got to the stage of doing so little ourselves as either to drive the United States back into concern to defend itself alone or to let the Soviets think that the only alternative which we had was submission. It is that situation which I suggest to your

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Lordships would make war in Europe more likely than the present situation.
While no one can pretend that the present situation is other than making the best, or perhaps I should say the safest, of a bad job in a world where absolutes no longer prevail, it is a policy which is designed never to let the Soviets, who are by nature cautious, think that the only alternative we have is surrender. But of course it is very important to avoid a new arms race and to ensure stability at the lowest level of military balance possible. That is where the new arms control negotiations come in and why we must pray that there is a positive response to President Reagan's proposals.
We should do everything we can to assist those negotiations, but I suggest to your Lordships that we must remember one thing. The negotiations are bound to be long and difficult, not just because neither side will want to make concessions which are not matched by the other side and not just because of the technical complexities and the problems of verification, but also because one of the Soviet Union's weapons in the negotiations will be the propaganda one, which, because they have a controlled press and a controlled people, they are well placed to wage. We must therefore go on encouraging the United States to negotiate for success, as I believe they intend to do, and try to convince our own people accordingly. But we must also remember where our true interests lie and the great danger that would face us if ever there was a collapse of resolve in Europe.
5.25 p.m.
Lord Thomas of Swynnerton: My Lords, I should like to add my thanks and congratulations to my noble friend Lord Kimberley, who has initiated this important debate today. I think my noble friend Lord Home is the only speaker during the course of this debate so far who has pointed out that it is not only since 1945 that the democracies in western Europe have depended upon the assistance and support of the United States, but throughout the century. That is indeed the main fact of the 20th century. We should not have survived the threat from German military despotism in the First World War, any more than we should have survived the threat from the Nazi totalitarian tyranny during the Second World War, without the arrival—late, as we took pains to point out then, but in time—of the United States as our ally.
Furthermore, the United States has given, not only since 1945, substantial economic assistance to Western Europe: in the 1920s, for example, the Dawes and the Young Plans were rehearsals for the Marshall Plan of 1948. That main fact of the 20th century is one that is not fully appreciated by public opinion in this country or in western Europe as a whole. It is certainly something which would have surprised previous generations. The great Gibbon, in his The Decline and Fall of the Roman Empire, assumed that the barbarians in future would never triumph in Europe, since, before they could conquer, they would cease to be barbarians. That has not been the case, and we have seen, particularly in central Europe between 1939 and 1945, and in other parts of Europe
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since, that barbarism such as would not have been dreamed of before has taken over free countries.
In these circumstances, it would be very foolish indeed to do otherwise than support most vigorously the efforts now being most patiently made by President Reagan's Administration to revive the alliance and recover the initiative psychologically and strategically, and in respect of propaganda as well, against the Soviet threat.
Of course we are likely to have nuances of difference with the United States' Administration particularly after a period when, as my noble friend, Lord Kimberley, pointed out, as happened during the Carter Administration, many of us had severe doubts about the will of the United States' Administration. But of course the Reagan Administration would not have won the election last year had it not been that the Americans themselves had doubts about the capacity of the Carter Administration. We have to consider the Reagan Administration against that background and also against the increase in Soviet power—an increase over the last 10 years which, as one noble Lord pointed out, passed remarkably unnoticed during the 'Seventies by the still surviving Campaign for Nuclear Disarmament.
It is easy to understand (and I think this accounts for some of those who support the Campaign for Nuclear Disarmament) those who feel that this permanent dependence upon the United States alliance is an irritant and a challenge to our national tradition. The late Lord Dalton thought the Campaign for Nuclear Disarmament in the 1950s was the last fling of British nationalism. It may be that the recovery of CND in the 1980s owes a certain amount to a similar illusion that Britain can independently take actions which will have moral effects on others.
When we talk about our undertakings or attitudes being a change from British national traditions, we might also recall that this permanent alliance which the United States has assumed in relation to us is also a very great change from their national traditions. The main speech which governed American foreign policy between the 1790s and, indeed, the 1940s was George Washington's farewell address, which warned Americans very specifically to avoid permanent alliances with foreign countries and to avoid being entangled in European caprices. Should Europeans show a continuing ingratitude for the magnanimity and generosity of American support over so many years, it is only too likely that there may be some in the United States who will take another and close and perhaps even ill-inspired look at that speech by the first President of the United States.
When speaking of American traditions, I agreed very much with the remarks made by the noble Lord, Lord Lucas of Chilworth, and the noble Lord, Lord Gore-Booth, who pointed out that we in this country do not know enough about the United States. Study of United States literature and history is, very largely, neglected in our schools, which is surprising considering the attitudes of North Americans to ourselves. Perhaps, if nothing else, some recognition of that may be recorded as a useful memorial of this debate.
5.32 p.m.
The Earl of Longford: My Lords, time does not permit me to comment on the interesting speech of the noble Lord, Lord Thomas, who has just addressed us. He represents a new species in this House—the Conservative intellectual. We now have half a dozen of them. When I came to this House, any kind of intellectual was a rarity. But we now have half a dozen of them—and very good speakers they are—such as the noble Lord, Lord Beloff, and the noble Lord, Lord Hunt. But I am afraid that time does not permit me to say more about their speeches.
I ought to make it plain in self-defence that it was no fault of mine that my name was left off the list, and it was no fault of my revered Chief Whip, either. These things happen veryrarely in this House, but just occasionally a machine turns out to be human. However, I am under the usual restrictions. If I had even less time, I would be inclined to say "Ditto" to the speeches of my noble friends Lord Shinwell and Lord Stewart. They are eminent socialists and I support them entirely in their attitude towards multilateral disarmament. Like them, I feel that there is no middle way between multilateral and unilateral disarmament, so I support them faithfully.
But if I have two or three minutes more, I should like to follow a line of thought suggested to me—though I admit that I prepared these remarks earlier—by the noble Lord, Lord Hunt. How are we to keep our public here—it will be a long struggle—loyal over the years, not only in thought but in deed, to the very strenuous and rather complicated policy that we have to follow of maintaining, so far as we can, the strength of the West and of seeking arms control? How is this to be achieved in British psychological terms? I am entirely in favour of strengthening the armaments of the western alliance, in order to achieve at least parity with Russia, and also of seeking arms control. Those are two large objectives. They are not incompatible, but they appeal to rather different emotional sides of the national character and we must pursue them both.
The point I am making is rather different. Arms control and rearmament are not, in themselves, very inspiring policies. People recognise the rational necessity for those courses if we are to survive and bring about some hope of peace. But something else is necessary if we are to appeal to the young people who were mentioned by the noble Lord, Lord Orr-Ewing, and others; something of the inspiration that was produced in my generation by the League of Nations in the old days. Is it quite out of the question that any such ideal can be pursued?
Twenty years ago, here and elsewhere, many of us, under the leadership of the aged Lord Attlee, found that ideal in the cause of world government and I still believe that that is a cause which could inspire everyone, if people thought it was in the least likely to be achieved. But for a good many years now, entirely owing to the attitude of the Soviet Union, that attitude does not seem to be practical politics, and therefore it does not figure in any of these discussions, as it did 20 years ago.
Therefore—and I shall be well behaved because I shall be down in well under the five minutes—I want to lay before the House the thought that, in addition to strong western defences and a policy of arms control,
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we have to seek something nobler, more inspiring, and I would myself describe it as world government.
5.36 p.m.
Lord Mayhew: My Lords, like every previous speaker in this debate my noble friends and I most warmly welcome the proposals of President Reagan on disarmament and arms control. I think we probably all agree that a major positive statement of this kind was very badly needed from the United States, in order to bring NATO together and to hearten the multilateralists and those who are resisting the challenge of Soviet communism.
This morning I read in the papers that, according to a BBC poll, only 14 per cent. of the British people consider that President Reagan has sound judgment. This, I am afraid, is a reflection of the early statements on foreign policy and defence which he made at the beginning of his administration—statements which called for a vast increase in weaponry for the United States, at one stage for nuclear superiority, and which disparaged disarmament and arms control. These statements divided NATO and were a godsend to Soviet propaganda and to the western unilateralist movement.
Though President Reagan has many admirable qualities, I find it a mystery how the leader of a great country, with access to a vast network of policy advisers, intelligence analysts, diplomats, speech writers and so on, can yet come up with such patently unhelpful public statements on vital and sensitive questions. That, thank goodness, seems to be over and, with this new initiative from President Reagan, a new unity and purpose has been injected into NATO.
I agreed so much with the noble Earl, Lord Longford, whom I still acknowledge as a tutor of 45 years' standing since pre-war days—and I can still learn from him today—because he said not only that he is a multilateralist but that you cannot be both a multilateralist and a unilateralist. Many of us welcomed the statement of the leader of the Labour Party which was warmly in favour of these East-West negotiations on disarmament, because, of course, one cannot at the same time call on the nations of East and West to disarm by agreement together, and call on the nations of the West to disarm, without agreement, by themselves. One cannot do that. If it is possible, perhaps the noble Baroness who follows me will explain how one can take both those points of view.
But, obviously, as many noble Lords have pointed out, these negotiations are bound to be difficult and long-drawn-out. I am afraid we have to face the fact that we cannot isolate the cruise missiles, the Pershings, the SS.20s, the SS.4s and the SS.5s from all the other weaponry, not even from the other theatre nuclear weapons. I do not think you can isolate this problem and deal with it separately from the strategic weapons, or even from the battlefield nuclear weapons. Therefore, these negotiations are bound to be difficult and prolonged. However, my noble friends and I most warmly hope that a sincere, determined and sustained effort will be made to make them successful.
May I ask the noble Lord who will be winding up for the Government whether he can give us a little more information about the role which the European countries can continue to play in the course of these

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negotiations? It does still seem to be a little anomalous that there should be no participation by any of the European countries. I know that the Government take the view that it is the Soviet Union and the United States who have provided the nuclear weapons, but that is not altogether true. The Americans certainly have not provided all the weapons for the West. If the British and the French nuclear deterrents come into the equation—which they may—certainly the British and the French must participate in the disarmament negotiations.
May I also ask the Government what input, from now on, from Europe will go into these negotiations? Is the NATO consultative group to go on? When is it meeting next? What rights of access does it have to the proceedings? Can an agreement be reached without the agreement of the European countries? These are important matters. It seems to us that the European nations have shown good judgment and a consistent line on arms control and on disarmament. Therefore, we hope profoundly that they will have an opportunity again to display those qualities.
In the meantime, we hope that these countries of Europe, with the Russians and the Americans, can make a real effort to win success from these negotiations. We hope that they will not be blinded by their military advisers. Surely the first step is not to be blinded by science by their military advisers and always to remember that, though there may be risks in a particular agreement on disarmament or arms control, those risks are likely to be far less than the risk of continuing the lunacy of the nuclear arms race as at present.
5.42 p.m.
Baroness Llewelyn-Davies of Hastoe: My Lords, I must briefly praise the self-discipline of the House for the way in which this debate has been carried through. There have been excellent speeches, mostly, which have been very well argued, and we have kept completely within the time limit. We owe a debt of gratitude to the noble Earl, Lord Kimberley, for raising this extremely important subject. Of course, NATO and our relations with the United States is a matter of fundamental importance. However, I must also tell the noble Earl that I profoundly disagree with his arguments about propaganda. The peace movements do not need propaganda from Russia or from anywhere else. The whole world can see the danger that we are in. As the House knows, the noble Lord, Lord Jenkins of Putney, looks after himself very well indeed, but I say with some sorrow that I very much regret that the noble Earl took the opportunity of a serious foreign policy and defence debate to vilify sincere and legitimate peace movements. Indeed, I feel it is unworthy of the standards of this House.
As to the noble Lord, Lord Beloff—in so short a time I want to make my own argument and not to change the direction of my speech, but I will just observe that in schools now our children are all taught about most of the major religions of the world. I am sure that the right reverend Prelates to whom he referred strongly approve of that. Similarly, your Lordships' House will be, and always has been, strengthened by the expression of widely different views on all subjects from all sides—whether informed militarism, multilateralism (to which I believe most
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noble Lords subscribe) or unilateralism, which is a perfectly tenable argument.
Lord Beloff: My Lords, would the noble Baroness give way?
Baroness Llewelyn-Davies of Hastoe: My Lords, in the time I have got I would rather not. The noble Earl did not give way, either. It is not necessary for noble Lords to respond to the wilder expressions of Tory intolerance. The subject which we are discussing is much too important.
We live in very sombre times, more dangerous, I believe, than for very many years. However, we must find, as the noble Lord, Lord Mayhew, said, as did many other noble Lords, President Reagan's speech last week, and the meeting of President Brezhnev and Chancellor Schmidt this week, hopeful signs of the beginning of a thaw in the frozen foreign policies of East and West. I am sure that President Reagan has been influenced not only by Governments but also by the astonishing peace gatherings all over the world, in Europe particularly. And not by any means only young people but people of all ages are at those gatherings. So we must not dismiss the President's speech as mere propanganda, as some people do. I believe that it shows n new, perhaps overdue, change of attitude by the American Administration to European opinion. We must hope that it shows now a real crystallisation of ideas inside the Administration instead of the contradictory statements which have so alarmed the world.
In a recent fascinating article, Ambassador George Kennan, whom we know to be a man of wide experience and wisdom, described the Russians' historical,
"congenital sense of insecurity: the distrust of the foreigner and the foreigner's word, the neurotic fear of penetration by other powers"
—all too often justified historically—
"and a persistent tendency, resulting from all this, to overdo the creation of military strength".
But, as with the Americans', the Russian policies seem to be moving, too. From that point of view I thought also that the noble Earl's speech was unhelpful. The Russian visit to Bonn was of very great importance not only to the West but to the Russians, too. The newspaper Pravda said the other day:
"In the present complicated international situation, the significance of this visit goes beyond bilateral relations between Germany and the Soviet Union".
However dangerous, and in our view wholly immoral, the Russians' actions in, for instance, Afghanistan are, as my noble friend Lord Stewart of Fulham and I both said last week, there is no doubt whatever that Russia needs peace as desperately as do the NATO nations. Leaving aside the unimaginable horrors of a nuclear war even for so huge a country as the USSR, the Russian economy is in as serious a condition as the recession has made the West. They need peace to build it up. They need Western technology. They need credits. They need foreign currency. We all know that they need grain. Therefore, I do not believe that the article in Der Spiegel was simply propaganda. And their recent agreement to construct the gas pipeline with Germany, despite efforts by the Americans to prevent it, is I believe evidence that they

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are trying to overcome their historical and cultural suspicion of entanglement with foreigners. And this we must and do welcome.
As the Financial Times says today, the discussions in Bonn have brought no break-through on nuclear disarmament but they have been very far from a waste of breath. They have to some extent cleared the ground before the vitally important Geneva Conference next week which we on this side believe to be of prime importance and on which we profoundly regret the absence of a NATO presence. The House understands, as the noble Lord the Foreign Secretary pointed out, that we cannot expect quick results but something concrete must emerge before the autumn of 1983—before, that is, cruise and Pershing can be deployed at all, as Chancellor Schmidt himself has said. That gives us only two years.
The zero option is a start, though there are many versions of it. And no versions of it are agreeable to all the participants as, indeed, the noble Lord, Lord Kennet, pointed out. The West thinks that all medium range missiles in Europe on both sides should be abolished or not installed. The Russians will wish to include United States bombers and submarines as well as the French and the British nuclear capabilities. Chancellor Schmidt has also made it clear that he feels that these would have to be taken into consideration at some point. All this is very difficult, but a start must be made somewhere. We on this side of the House are glad that, like the Labour Party, the right honourable lady the Prime Minister has now welcomed the zero option.
Important as Bonn has been and as we hope Geneva will become, it is essential that the Russians and the Americans should talk together at top level. There are more hopeful signs that Presidents Reagan and Brezhnev are thinking more positively on these lines and we should like to ask the Government to urge on both sides that they should meet soon.
The most vital truth is that the world must accept that it is impossible to negotiate without trust. Of course, there is mistrust on both sides. There is the whole vexed question of verification, to which the noble Lord, Lord Home, referred, but even on that subject President Reagan has called for more openness and creativity and this is a welcome addition to the present dependence on satellite monitoring and spying. Mr. Brezhnev, in his article in Der Speigel said:
"Some other forms of control might be worked out, given confidence".
All these movements, however slight and however, in some senses, contradictory, are of basic importance. I believe that the world is still in serious danger, if only from inadvertence if not from wickedness. The very existence of weapons, nuclear or conventional but particularly nuclear, is the greatest danger of all. There is the deep Russian suspicion of the West's plans; as President Brezhnev said:,
"All Western weapons could hit Russian soil but Soviet weapons could not reach the United States";
and the ingrained American fear and hatred of Communism is still very present. But, when one-third of the world is existing in dreadful poverty, the world is still wasting an appalling amount of its resources
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on building up defence spending, one wonders how sane we really are. As Ambassador Kennan has pointed out:
"We are heaping up fancy and expensive new equipment that we do not have the manpower to operate or the money to maintain".
On this side of the House we deeply regret that NATO is not to be represented at Geneva, but we appeal to the Government to do everything in their power, to bring every possible influence to bear, and to state publicly that only by working positively towards world disarmament can we hope to survive the worst crisis that the world has yet seen.
5.53 p.m.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, it is hard to remember a time when it has not been claimed that the accord between Europe and the United States is drifting on to the rocks. Late in 1956, a former and most distinguished British Prime Minister wrote to President Eisenhower from his retirement—it was his last intervention in world affairs—and I quote the late right honourable gentleman Sir Winston Churchill with diffidence. He wrote as follows:
"There is not much left for me to do in this world and I have neither the wish nor the strength to involve myself in the present political stress and turmoil. But I do believe, with unfaltering conviction, that the theme of the Anglo-American alliance is more important today than at any time since the war …
There seems to be growing misunderstanding and frustration on both sides of the Atlantic. If they be allowed to develop, the skies will darken and it is the Soviet Union that will ride the storm".
I quote these words first in order to remind your Lordships that, whatever the differences of perception between Europe and the United States today, to which almost every noble Lord has drawn attention this afternoon, the problems we face are as nothing compared with those following Suez 25 years ago. And, secondly, to point out that the U.S-European relationship is one which has been tested in the past by very real divergences but which has always survived. It is stronger for this, not weaker.
Before moving to the specific issues raised this afternoon, let me try to put the subject as a whole into perspective. The fundamental aims and interests of the European NATO countries and the US have always been close and will remain so. These links have been forged by history, especially the pattern of emigration from Europe to the United States and have been bonded by the pattern and growth of trans-Atlantic trade and commerce. The cement of this relationship is the military threat to the West from the Soviet Union and its allies. The simple fact of the matter is that it is in the common interest of all the free world to resist any encroachment of the Warsaw Pact on to Western European territory.
To suggest that the United States would allow Western Europe to be submerged while they hid behind their own barricades is simply not part of the American character, and flies in the face of the history of trans-Atlantic relations in this century. Such an appalling scenario would no more be in their interest than in ours.
This said, it is inevitable in a close and well-tried friendship of this kind that there should be differences of

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emphasis or of opinion. The very openness of the democratic forms of government which we have espoused on either side of the Atlantic makes it inevitable that we should not fear to air such differences. Doubtless if there were any suggestion of such freedom of expression among the allies of the Warsaw Pact we should hear such a jarring cacophony as to make us find the concept of concerted action by them almost unthinkable. It is always going to be one of the products of our system, based on free expression and freedom of the individual, that dissenting voices and opinions will be heard. It should be a source of pride both to your Lordships and elsewhere that this is the case. But it would be utterly wrong to suggest that such differences as do exist threaten the Atlantic Alliance and all that it stands for. As I have said, there is a fundamental shared body of interests which run far deeper than the differences of emphasis which have been mentioned during the course of this afternoon.
Perhaps one reason why the rumour of a rift has been going round just now is that there is a new Administration in the United States whose policies are still taking shape. The Reagan Administration is active and vigorous: it looks at the problems facing it with new energy and considers new options and new ideas. And new ideas are always liable to lead to controversy. But there is nothing wrong in that. Indeed, it is constructive, provided, of course, that there is consultation among those concerned. I am glad to say that consultation among the allies has recently been intensive; in fact it has become a growth industry since Mr. Reagan became President.
I have mentioned that there are bound to be differences even between the closest of friends. It is these differences which hit the headlines. Headlines are designed to catch the eye and they and many of the analyses one reads below them often say nothing about the multifarious threads of constructive co-operation between the United States and Europe which make up the essential fabric of the alliance. There is not time for me to go into detail about the daily consultation between ourselves, our European friends and the Americans on a host of subjects in the political, defence, commercial and other fields. But it is this daily interchange which sets the tone of the relationship and makes any passing differences look like ripples on the surface.
Let me give just one example—and there are many others—which illustrates the co-operation I have been mentioning, and show how wrong it is to assume that the Administration reaches its foreign policy decisions too hastily. A year ago it looked as though efforts to bring Namibia to independence might soon bear fruit. But difficulties appeared. When the new Administration took over they made a careful appraisal and a detailed exploration of the views of their western partners and of African Governments. Efforts to find a solution are now back on course, with America setting the pace. The fact is that Europe and America are fundamentally interdependent. The United States knows that a strong and self-confident Europe pursuing coherent policies will strengthen democracy in the world and will contribute a potent voice to the Councils of the West. But we in Europe need America's strength to guarantee our security, just as America without Europe would be isolated in its resistance to the international
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ambitions of the Soviet Union.
Let me now, focus for a moment on the subjects which are currently of much concern to all of us, defence issues, East-West relations and the Middle East. On defence issues, as fellow members of the Alliance the United States and the United Kingdom share a common approach to the protection of western freedom. We regard it as our first duty to preserve our democratic way of life, in ways that will ensure that nuclear weapons will never be used against us, or by us. The policy of this Government and the Governments of our western allies is based on deterring any aggression against us, and at the same time pursuing, through international negotiations, agreed limits and reductions to the present high level of arms.
Let me explain what I mean by deterrence. I mean that we have to ensure that the Soviet leaders, present and future, understand beyond peradventure that any attack upon us will provoke from within the alliance a response which will render their aggression pointless. To achieve this comprehension in the mind of the Kremlin we need, therefore, to demonstrate both the political will and the military capability to react firmly and quickly. All members of the North Atlantic Alliance are firmly convinced that nuclear weapons are for preventing wars, not for fighting them. Talk of nuclear warfighting is dangerous nonsense, because their would be no winners in a nuclear war at any level. Despite the public concern, we do not think nuclear war is likely today. We are not on the brink, precisely because the policy of deterrence is working. It has kept the peace in Europe for over 30 years. That is why we support the recent American decisions to improve the effectiveness of their strategic forces.
But that is not the end of the story. Otherwise we would be condemning ourselves to an endless arms race. We must try to prevent this. Hence NATO'S commitment to negotiated arms control and disarmament—a commitment stated in the plainest terms in President Reagan's recent message to President Brezhnev. By seeking arms control agreements we attempt to make the military balance more stable; by seeking multilateral disarmament we attempt to bring down the appallingly high level of armaments on both sides. We see deterrence and disarmament as necessary and complementary ways of achieving our overall objectives of peace and security.
We in Europe have, therefore, strongly supported the efforts of the United States and the Soviet Union to reach agreement on the limitation of strategic arms, and we have welcomed the American emphasis on moving towards substantial reductions in present levels when the Strategic Arms Reduction talks get under way in 1982. We have also given our strong support to the negotiations between the United States and the Soviet Union on limiting long-range theatre nuclear forces. These negotiations will begin on 30th November, and we have taken a full part in the close consultations which have been held within the alliance to establish the American negotiating position. As the Prime Minister said in another place on 19th March, we have noted with pleasure the emphasis given in President Reagan's speech on 18th November to arms control as an important element in United States foreign policy, and we particularly welcome the President's intention to seek massive nuclear dis-

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armament in Europe. The negotiations opening on 30th November will offer the Soviet Union the opportunity to demonstrate that they share the western objectives of achieving substantial reductions in nuclear weaponry based in Europe.
The noble Lord, Lord Mayhew, and indeed the noble Baroness, Lady Llewelyn-Davies, referred to the absence of Europe from the TNF talks which will be starting next week. These negotiations are, of course, concerned with American and Soviet weapons. That is why they are conducted bilaterally. But the Special Consultative Group, to which the noble Lord, Lord Mayhew, referred, which is the NATO body responsible for TNF matters, has met regularly to concert the US negotiating position, which has the full support, of course, of all members of the alliance. The SCG will continue to meet as necessary after the negotiations have begun. I understand that it held its last meeting on 20th November.
In Europe, nuclear disarmament must, of course, be accompanied by steps to reduce tension and conventional armaments. At the Madrid CSCE meeting we and our allies have backed the French proposal for a conference on disarmament in Europe to negotiate militarily significant, politically binding and verifiable confidence and security building measures applicable to the whole of Europe up to the Urals. We continue to work for agreement between NATO and the Warsaw Pact on Mutual and Balanced Force Reductions (MBFR) in central Europe. In all of these fora we work closely and effectively with our American allies.
We and the Americans are of course at one in recognising the horrors of nuclear war. But as my noble friend the Foreign Secretary said recently in Luxembourg,
"abhorrence of war is no substitute for realistic plans to prevent it".
Against this background the Government do not accept that unilateral disarmament is a safe or a sensible policy. Even talk of unilateral moves may well encourage the Russians to block negotiations—in the belief that if they wait long enough the West will disarm on its own, damaging our security interests without seeking Soviet reductions in return. Thus, any one-sided reduction by the West would weaken our ability to deter aggression and could, therefore, make war more likely, not less likely. It would open us to the threat of intimidation and political blackmail. Nor would Britain be safer without nuclear weapons: our industrial and strategic importance would still make us a tempting target in any conflict. A related and most important area, and one in which there is the closest co-ordination between the Europeans and the US, is that of the wider East/West relations.
The current strains in East/West relations are the direct consequence of Soviet behaviour. Soviet expansionism during the 1970s, culminating in the invasion of Afghanistan, destroyed the climate of trust which is essential if East/West relations are to prosper. We fully share American determination to bring home to the Russians that restraint in the conduct of international affairs is the sine qua non of our generating any long-term warmth in our mutual affairs. But we also support President Reagan's commitment to a dialogue with the Soviet Union, of which arms control
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negotiations which I have already mentioned form an important part. And we welcome the decision by the Foreign Ministers of the United States and the Soviet Union to follow up their recent discussions in New York with a further round of talks in January.
The Government have repeatedly made clear the importance they attach to East/West communication, particularly at a time of increased international tension. We therefore welcome the talks that Chancellor Schmidt has been having with President Brezhnev in the past two days and the opportunity these have provided for the Chancellor to give an exposition of the full range of shared Western policies.
Meanwhile, events in Poland remain of great concern to all her friends. It is important that the Polish Government and Solidarity should avoid confrontation and continue to seek agreement through peaceful negotiations. Above all, Poland's problems must be solved by the Polish people themselves. Outside interference would mean the end of detente. On the economic side, both the US and ourselves, together with a number of our European NATO allies and others, are members of the Committee which discusses concerted action to help Poland out of her present severe economic problems. This is a matter on which there is the closest transAtlantic co-operation.
We continue to attach great importance to working with the United States in the Middle East. We share the common objective of a comprehensive peace settlement negotiated between the parties and ensuring security for Israel and a future for the Palestinians. We are in no doubt that the U.S. must continue to play a central role in Middle East peace efforts. Whatever differences of emphasis there may be between us, we shall not lose sight of this central fact.
Both we and the Americans have taken a close interest in the eight points put forward in August by Crown Prince Fahd of Saudi Arabia. We agree with President Reagan's view that these points contain positive elements and can be a beginning point for negotiations. There is, of course, considerable common ground between the eight points of Crown Prince Fahd and the Venice Principles, to which we remain committed as a framework on which we believe Middle East peace can eventually be built. My noble friend Lord Carrington was encouraged by his recent visit to Riyadh to discuss these questions with the Saudis. We believe that the Camp David process has important achievements to its credit, not least the establishment of peace between Egypt and Israel and Israel's agreement to withdraw from Sinai next year. Something more may be needed, and that is why we are exploring further ways forward towards a basis for negotiations to which all can agree.
Our commitment to peace in the Middle East has recently been demonstrated in a practical way by our agreement, together with that of three of our European partners, to a United States request to provide a contribution to the proposed peacekeeping force in Sinai. There is little I can add to the statement made on this matter in the other place by my right honourable friend the Lord Privy Seal on Monday. But I would stress that our agreement to participate shows how we in Europe can co-operate successfully with the United States in the Middle East. We very much hope that the Government of Israel will be able to accept the

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offer to participate which we have made in response to a request which had their support. We attach considerable importance to maintaining and strengthening the peace which has been achieved between Egypt and Israel with such great effort on both sides so that it can be used as a basis for further progress towards a comprehensive peace. At the same time, as my right honourable friend the Lord Privy Seal has made clear, we remain committed to European policy in the area as set out in the Venice Declaration. We continue to believe that the key to progress lies in mutual acceptance of the two principles at the heart of the Venice Declaration: the right of existence and security of all states in the area, including Israel, and the right of the Palestinians to exercise fully their right to self-determination.
I think that I have covered most of the important points that were raised during the course of this debate. Therefore, I shall not delay the House further by dealing with some of the specific matters.
Lord Gladwyn: My Lords, will the noble Lord make some reference to the possibility of some conversations on security and the general aegis of the forthcoming Genscher-Colombo plan?
Lord Trefgarne: My Lords, I could detain your Lordships for a considerable time with a dissertation on that topic. Suffice it to say that, in the context of political co-operation among the Council of Ministers with which the noble Lord will be familiar, there is now some discussion on the political aspects of security which I hope go some way to meet the anxieties of the noble Lord.
At the opening of my remarks, I reminded your Lordships that the history of the United Kingdom's relations with the United States (and this applies as much to our other European allies) has not been without the occasional strain. Perhaps I may end by quoting again from history, from a document which issued less than a year after the Churchill letter to which I earlier referred. It is the Declaration of Common Purpose of October 1957. Agreed during Mr. MacMillan's visit to Washington for discussions with President Eisenhower, it said:
"These two countries have close and historic ties, just as each has intimate and unbreakable ties with other free countries.
"Recognising that only in the establishment of a just peace can the deepest aspirations of free peoples be realised, the guiding purpose of our deliberations has been the determination of how best to utilise the moral, intellectual and material strength of our two nations in the performance of our full share of those tasks that will more surely and promptly bring about conditions in which peace can prosper. One of these tasks is to provide adequate security for the free world".
Well, take away a bit of the 1950s verbiage and I do not think that would require much redrafting for today.
6.14 p.m.
The Earl of Kimberley: My Lords, in the brief moment left to me I should like to thank very sincerely all those noble Lords who have taken part in the debate this afternoon and to thank them for the very short, succinct and to-the-point speeches that they have made. I obviously cannot answer all the points raised; I can make very few comments. I should
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like to mention in particular my noble friend Lord Lucas of Chilworth and the noble Lord, Lord Gore-Booth, who spoke about the education of the young. I thought that that was an extremely good point.
But basically all noble Lords this afternoon agreed that the only way to achieve peace is to pursue the policy which most of us have discussed this afternoon even though we may have gone about it on different roads. I thought that the noble Lord, Lord Jenkins of Putney, was slightly unfair in attacking me because I did not actually call anybody a communist by name—I said that they had leanings towards it, which is patently obvious and true. One thing that always puzzles me is why communists think that they have this divine right to sue anybody for libel if they are called communists whereas if someone calls me a Tory I do not sue him for libel or anything else.
Lord Jenkins of Putney: My Lords, will the noble Lord give way?
Several noble Lords: Order!
The Deputy Speaker (The Earl of Listowel): My Lords, I understand that we have come to the conclusion of the two and a half hour debate, and therefore I express the wish of the House that the noble Earl should withdraw his Motion.
The Earl of Kimberley: My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Workforce Expansion Policies
6.15 p.m.
Lord Spens Lord Spens rose to call attention to the urgent need for Her Majesty's Government to take positive steps to encourage employers to expand their workforces; and to move for Papers.
The noble Lord said: My Lords, I beg leave to call attention to the urgent need for Her Majesty's Government to take positive steps to encourage employers to expand their workforces. I am extremely pleased to see that all Benches in this House are to be represented in this debate, and I am very proud of that fact. However, I must tell your Lordships that the time limit again is not all that large and I am advised that it should not be more than eight minutes per speaker. In fact, I think that your Lordships may be able to get a little more time than that because I do not believe that I shall take up the full 15 minutes that has been allotted to me.
I put down this Motion on the day after Her Majesty made her gracious Speech because I was very disappointed in the only reference to unemployment which appeared in that speech; namely:
"My Government share the nation's concern at the growth of unemployment and will continue to direct help to those groups and individuals most hard-pressed by the recession".
It seemed to me that that was taking a very negative attitude about what should he done for unemployment and I felt that I ought to put down a Motion of this sort, and I was lucky in the ballot.
But, unless Her Majesty's Government believe in fairies—and I do not believe that they do—it is no use expecting the new industries to arise out of the blue to solve the unemployment problem. There are, however, some immediate steps which can be taken in order to reduce the numbers of unemployed. The first one, of course, is artificial—reducing the pension age and/or increasing the age at which young people come on to the labour market. That could be done at any moment. The second is to create new businesses. We had a debate about that last May, so there is no need to touch on it again except for one very small aspect which I shall mention later. The third is to spend billions on promoting jobs in the public sector, and to hell with inflation! The fourth is what I hope we shall debate this evening—to encourage existing businesses to expand their labour forces.
I was interested to see that the Economist on 13th November included an article which is very close to my own thinking on this subject. It was headed "Seven winter suggestions". Looking through them I was thinking of four and a half, and the other two and a half I shall leave to other noble Lords perhaps to use. However, the suggestions that I want to make I put into two categories: first, those that will not cost the Government anything; and secondly, those that will cost the Government something if they are to be adopted.
My first suggestion is to set employers free from the restrictions of the Employment Protection Acts. I have to say "Acts" because although the 1958 Act is called an Employment Protection and Consolidation Act, it has not cancelled various other Acts which all employers still have to take into account. Employees are now so over-protected that employers are refusing to create new jobs. Therefore, I think that something must be done about this. You cannot get rid of an unsatisfactory employee, nor make someone redundant without having to pay through the nose.
Of course, there are temporary reliefs. No claim for unfair dismissal can be made during the first year of employment and, in the case of very small firms of 20 people and under, I think that that period goes up to two years; no redundancy pay can be claimed during the first two years. However, I do not think that those reliefs are nearly enough. I should like to quote a couple of sentences from a paper which I do not usually use as authoritative but which, in this case, I think is. It is the Sunday Express of 1st November. First:
"Job protection has been so heavily written into the law of the land that employees now virtually 'own' their jobs".
Secondly:
"Who is going to risk his capital and hire men and women for a new venture if he has to pick up a big redundancy bill should new technology make his venture unprofitable?"
Time and time again I hear people say that if only they did not have to pay redundancy money, they would take on new people. That is particularly the case in industries like the construction industry which are labour intensive and which could use more labour very easily. Just the other day I spoke to a contractor and asked him how he was doing. He said that things were looking up and that he was getting more opportunities. So I said: "Will you expand your labour force?" and he said: "No, not at all. I cannot because I have to
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plan ahead for 18 months at least, but I might have to lay off people after two years, and at that stage the redundancy law comes into effect".
I should like to suggest that at the moment these periods in the Employment Protection Acts are too short; I should like to see the conditions altered to five years and also increasing the numbers which would qualify as small firms, say, from 20 people to 50 people. An opportunity is coming to do just that, when the new Employment Bill comes before us. That is just the sort of provision that could be put into that Bill.
The second suggestion, which will cost nothing, I shall leave to the noble Lord, Lord Boyd-Carpenter. It is about wages councils. I should like to see them disappear and I hope that the noble Lord, Lord Boyd-Carpenter, will say something along those lines.
I turn to suggestions which will cost a little money, and come to one point which I want to pick up, new businesses. The Business Start-Up Scheme is beginning very well but it is limited to new business companies. It does not cater for partnerships and sole traders. I know that it might be difficult to get them into the scheme, but if something could be done to give them a similar amount of help, I believe that more new businesses would be able to be started.
Secondly, I should like to see the VAT threshold raised quite extensively. I should like to see it go up to at least £50,000 of turnover, and preferably to £100,000. I am not quite certain what the present limit is—whether it is £15,000 or £17,500—but if it is £15,000 of turnover, it means a turnover of less than £300 a week, which means that almost every business that is now involved in trade is caught by the VAT operation. It is very costly and it stops those businesses from expanding.
I should like to see abolished the national insurance surcharge of 3½ per cent. on every employee's earnings. I know that this is a ticklish subject at the moment because of the financial situation, but I want to point out that this charge is a charge on costs and not on profits. It is a charge on costs because it is built into the cost of labour and, therefore, it increases the price of the product, and thus it increases inflation artificially. I believe that something should be done to lower that surcharge.
I should like to see direct subsidies given to employers rather than to spend so much money, as is being done at present, on these temporary schemes. If there could be some combination of this, it would be very useful. Again, I was talking to a friend who has just made use of the YOP scheme, but at the end of six months he had to get rid of the girl who was working very well as a secretary; he wanted to take her on, but he could not afford to do so because the minimum wage limit for a secretary was too much; she also wanted to be kept on. I should like to suggest that even if no direct subsidies are given, some arrangement should be made whereby young people could be allowed to contract out of these minimum wages limitations, which are so high that they are not able to get their first jobs. Of course, they would have to contract out voluntarily and it would have to be a mutual contract on both sides.
Finally, I want to draw your Lordships' attention to the powers which local authorities have and which I do not believe are being used sufficiently extensively. Section 137 of the Local Government Act 1972 reads:

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"(1) A local authority may, subject to the provisions of this section, incur expenditure which in their opinion is in the interests of their area or any part of it, or all or some of its inhabitants…"
Subsection (2) says:
"It is hereby declared that the power of a local authority to incur expenditure under subsection (1) above includes power to do so by contributing towards the defraying of expenditure by another local authority in or in connection with the exercise of that other authority's functions".
Subsection (4) says:
"The expenditure of a local authority under this section in any financial year shall not exceed the product of a rate of 2p in the pound for their area for that year or if some other amount, whether higher or lower, is fixed by an order made by the Secretary of State shall not exceed the product of"
such an order.
My Lords, I should like to see the Secretary of State make such an order and increase the right to spend money locally by doubling the present levy, by raising the limit from 2p to 4p. I should also like to see the new local authorities, the district councils, made aware of the possibilities of this section of the Local Government Act. A lot of them are still too new to realise what they can do under this section, and I believe it is something which would bring them into solving the problem of their unemployment locally. I have reached the limit of my time, and I therefore beg to move for Papers.
6.31 p.m.
Lord McCarthy: My Lords, I should like to begin by thanking the noble Lord, Lord Spens, for initiating what I am sure will be an interesting debate on an unexceptionable Motion. I am afraid I cannot say that all the arguments he has deployed in support of his Motion are new, but that is because I have had the fortune of listening to him with his usual force and clarity deploying them in the Select Committee on Unemployment. I am afraid I cannot say that I have been persuaded by them, but at least I have been persuaded to think rather more about why I do not find myself persuaded by them. Secondly, I should like to apologise to the House for the fact that, due to the fact that this debate has been called at somewhat short notice, I am afraid I shall have to leave during some period of it, and indeed because of the Statement we heard from the Government earlier this afternoon I shall have to leave quite soon after I sit down. I apologise for that in advance.
Let me turn to the Motion. We should be pleased to see such a Motion because at least it suggests that the Government should take some positive steps to expand employment. The general position of the Government is that they are not responsible; that they do not require to take any positive steps to expand employment, to deal with inflation, to lower interest rates, for the balance of payments, and all they have to do is to carry forward with their monetary policies and if anything goes wrong, or it takes rather a long time for the level of employment to rise or to stop going down, well then that is our fault. At least, it is someone's fault; it is not the Government's fault, and you cannot ask the Government to do anything positive about it.
From that point of view I think we can all welcome this Motion which says that the Government should take positive steps to encourage employers to expand
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their workforce. Nevertheless, it is not much good taking positive steps unless the steps you take are in the right direction. In this respect I should like to disagree with the noble Lord in respect of, I think, three, and possibly, if I have time, four, of the suggestions that he put forward. I want to refer to the remission of the national insurance surcharge, which I think is the best of his ideas; the employment protection legislation, which is possibly the worst of his ideas; abolition of wages councils, and what he says about direct subsidies for employers.
It is true that the national insurance surcharge was introduced on a temporary basis. It is true that the Government now raise something like £3 billion in a full year from the national insurance surcharge. It is true that it is a tax on industry. It is true that the remission of the national insurance surcharge could possibly increase jobs. It is true, as the CBI says, that it hits exports and excludes imports. The problem is that no one can tell us, if we remitted one half, or all, of the national insurance surcharge, what effect that would have on jobs, and especially what effect that would have on jobs at the present time. Everything depends on the elasticity of demand. Everything depends on whether, if we remitted the national insurance surcharge, the employers kept the money or reduced prices, or made it up in profits, or whether in fact they increased their labour supply. Since we do not know, and since the effect of this would be very significant and the economy would lose something like £3 billion in a full year, it seems to me that now is not the time to spend this money on a total remission of the national insurance surcharge.
I would think that far more could be done in positive job creation by expanding and extending the present job creation programme, and in particular by turning the present job creation programme from a short-term measure into a long-term measure. I hope at another time—indeed when we have a debate in the House next week—to say something about how that should be done. My point about the national insurance surcharge is, yes, of course it is an impost on industry, but whether at this moment the best way to increase employment is to remit the whole of the NIS I have reason to doubt.
Secondly, let me turn to employment protection. It is quite impossible to get some noble Lords in this House and others elsewhere to face the facts about the present employment protection legislation. Of course, just to take a few random facts that the noble Lord, Lord Spens, mentioned, most workers in construction who are dismissed on grounds of redundancy get no redundancy pay at all. They have not been working long enough. Of course, the great majority who get dismissed for redundancy in the construction industry, and indeed in most industries, will be lucky if they get more than three or four weeks' pay. Of course, the employers do not pay the great majority of that because it comes out of the redundancy fund. These things are paid for by general taxation and by general imposts on industry, and they do not affect particular employers, and therefore they should not affect them in not taking on labour.
Lord Spens: My Lords, would the noble Lord give way for a moment on that? The redundancy fund

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pays only 50 per cent. of the sum and it pays it in arrears, so that there is quite a substantial pressure on the wage flow of the employer before he gets half of the redundancy money back.
Lord McCarthy: My Lords, I did not say that the employer did not have to pay. I said that in the overwhelming majority of redundancies in the industry which the noble Lord took particularly as an example, no redundancy pay is available. Let me turn to the other aspects of employment protection. There is a wealth of evidence, most of which we put before the House at the time of the Employment Protection Bill, to show that the overwhelming majority of employers do not give employment protection legislation in respect of unfair dismissal, or equal pay, or equal opportunity, or maternity rights, as anything like the most important reason why they do not take people on for work.
In some surveys these things come 23rd; in some surveys 24th; in some surveys 2 per cent. say they are important, and in some surveys 1 per cent, say they are important. In a recent survey produced by the Department of Employment on the impact of employment legislation on small firms—another area which I know is dear to the heart of the noble Lord—it was revealed that 50 per cent. of those interviewed said they had no experience of this employment legislation at all. Only 2 per cent. said that employment legislation was their main difficulty. Only 6 per cent. said it was among their main difficulties. All kinds of other difficulties, including, I must say, the depressed state of the economy were given as the more important reasons for not taking on labour. Most employers most of the time, when asked about it by sample surveys, do not give employment legislation as the reason. Nevertheless, from time to time we have these complaints about the effect of employment legislation on employment.
Now let me say a word about wages councils. If one is to believe that wages councils are a significant cause of unemployment one has to believe that the labour market works in a perfect way. One has to believe that the wage council rate imposes a universally statutory ceiling and floor on the wage system. One has to believe that if one changed that by abolishing the wages councils the elasticity of demand would be such that there would be a relatively immediate increase in employment. One has to believe, in other words, that a relatively small change in price would come about, and that relatively small change in price would bring about an improvement in demand. All the evidence—and there is a considerable amount both from academic surveys and from surveys, I am afraid, conducted by the Department of Employment—goes against that.
We have now abolished a considerable number of wages councils; in jute, cutlery, paper box and so on. Detailed surveys have been done and one thing which is clear is that the employment in those industries after the abolition of wages councils continues to decline at much the same rate as before. Some groups get more pay, some less, and those at the bottom get lower pay than they were getting before. There is no evidence that the abolition of wages councils over
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the last 10 years or so has had any effect at all on employment levels. All it has done is to make things more difficult for those who previously were getting wages council rates, and those who were getting something less than those rates, because most surveys show that about 20 per cent. of workers in this country in wages council industries do not get the wages council rate because of the shortage of insectors. All it does is ensure that those people slip further down the pay scales to become more and more unemployed.
I do not have time to go into the aspects of the other measures the noble Lord put forward. The fact is that all these suggestions are what might be called supply-side solutions; they are all attempts to argue that there is no general deficiency of demand in this economy, that one does not really need in any way to create the conditions in which more jobs are available and that by operating on the supply side of the labour market, and in particular by doing things that are intended (although I do not believe they will) to cut workers' wages, one will somehow price the country back into full employment. There is no evidence for this and therefore I cannot support the arguments put forward by the noble Lord.
6.42 p.m.
Baroness Seear: My Lords, I shall resist the temptation, which is not very strong, to enter into the Punch and Judy show between the noble Lords, Lord McCarthy and Lord Spens.
Lord Boyd-Carpenter: Which is which?
Baroness Seear: It has a very familiar ring to me, my Lords. I seem to have heard somewhat similar arguments advanced in the Select Committee on Unemployment and it is less than exhilarating to hear them rehearsed once again on the Floor of the House.
This afternoon in the Statement we were given another compelling reason why it is necessary to do something, and to do it now, to alleviate the appalling unemployment figures. Although we are told by the official figures that they are below 3 million, we all know that that is an understatement, that there are increasing numbers of people who are unable to find jobs and that in some parts of the country the situation has reached disaster proportions. In one area of Liverpool—I say this with hesitation in the presence of the right reverend Prelate the Bishop of Liverpool. but I think he will confirm it—over 40 per cent. of the people out of work have been out of work for over 12 months. And, when we find that something like 25 per cent. of all the unemployed people in that area are under 20, it is not surprising that we are getting social difficulties there.
I shall concentrate this evening in the short time available on a couple of practical things the Government might do now to deal with this cancer in our midst. We must resist the temptation to do things which would help immediately but would in the long run make the employment position more difficult. It is at the heart of the problem that so much that would help in the short run would make the position worse in the long run. I do not mean that only in terms of checking inflation for its own sake. It would make the unemployment position worse in that people could

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be put back into employment now, but only at the price of making the chance of sustained near full employment even less likely in the future.
The heart of the unemployment problem lies in the uncompetitiveness of British industry, and, if we accept that, then it is vital to do nothing that would increase that uncompetitiveness. Instead, we must do everything we can to enhance the competitiveness of British industry. That must be the starting point of any action that can be taken. Nevertheless, in doing that we must still find ways of getting people back into employment because the price we are paying—there is not time to go into that now—in a whole variety of ways as a result of this continuing unemployment is something we cannot sustain. I am therefore against any measures which encourage employers to take on more people than they need—to over-man—when so many of our problems in the past arose from over-manning. I do not want us to take that path because along it lies no permanent cure.
I wish to discuss one practical step which the Government could take, and take now, which would quickly make a difference. I do not believe in the cutting of working hours. Already we have reports from the PSI and the Anglo-German Foundation which show that a reduction in working hours does not lead to an increase in jobs. It simply means that the existing people, those left in employment, cope with the work. In other words, the evidence is all against the argument that a reduction in working hours will increase the number of people in employment. What it is more likely to do is to put up unit costs, and that only reduces the competitiveness of British industry.
There is, however, a world of difference between cutting working hours and sharing jobs. Will the Government look at the possibility of the positive encouragement of job-sharing? By that I mean using two people for one job. It would have to be done on a voluntary basis. I realise that at first sight this may sound somewhat fanciful to some of your Lordships, but let us consider certain groups of people to whom this could quickly be applied. There is the obvious group of the young, the school-leavers. What is there to prevent us having two youngsters for each job—sharing the job and sharing the money—and spending part at any rate of the time they are not in employment in further training and education? I know the noble Earl, Lord Ferrers, will tell me that they will not train unless they know there is a job at the end of the training. Time is too short to argue that point, though it can be effectively argued.
If they do not wish to be given training, these young people could continue with their education. The Engineering Employers' Federation told me when I discussed this with them that they needed a larger number of people with the educational ability to adjust quickly to new technology. So many of our youngsters leaving school have not acquired that ability. But, once they are employment-based, then, going from employment into training and education, linking those two together, they will he able to see some connection between what they are being taught and what opportunities there are in the world of work. Then, I believe, the incentive to learn will be there
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for at least a majority of them. If we could do that, it would at once reduce the number of unemployed youngsters. By definition, if employers would take on two youngsters for every job, that would reduce the number of youngsters kicking their heels and, because they are tired of kicking their heels, kicking other things around the streets.
Then we come to people who are within five years of retirement. It is suggested that there should be a lowering of the pension age. It is a popular idea that people should retire at 60. Instead, why not encourage job-sharing within five years of retirement? Average earnings are now £140 a week—about £7,000 a year—and half of that is £70. For a man who has paid off his mortgage, and whose family is off his hands, to work half time and spend the other half perhaps in some job on the side or on a hobby must be an attractive proposition. Surely that would be far more satisfactory than condemning people at the age of 60 to old-age pension levels of pay, and no job to do in which they have any particular place. On the other hand, the sharing of employment at that age has a great many attractions, in that it is in effect gradual retirement.
My Lords, your Lordships' House is full of people in a state of gradual retirement. I happen to be one of them. It is a very attractive position to be in, and I believe that it is a situation which would appeal to a great many people. If it were done voluntarily, there would be no need for the Government to pay such people anything in addition. The average of £70 a week, which is what the average man working half-time would earn, is not intolerably low.
Similarly, it is a proposition which would appeal to a very considerable number of women, married women in particular; and, for that matter, why not to a certain number of men? This is not the debate in which to raise the point, but we speak of the possibility of younger men sharing domestic chores. There are situations in which the wife is earning more than the husband, and in which if he went on a shared job basis while the wife continued in full-time work, that would suit much better the family budget and the way in which the family runs its affairs.
This would cost extremely little. The Government would not have to supplement it. I suggest that the incentive to carry out such a scheme should be that the employer should not have to pay any national insurance contributions for people who were on a twinning basis and that people who shared jobs should also not have to pay national insurance contributions, but should have their cards franked so that their social security entitlement would be maintained. As I see it, all it would cost the Government would be the forgoing of the national insurance contributions which would be a very small amount compared with what is paid out to an unemployed adult male, where the loss to the Government is in the region of £5,000 a year per person.
I ask the Minister to think very seriously whether there is no way in which a scheme of this kind could be introduced, at least on an experimental basis, in the areas in which unemployment is at its highest, to see how it could work. It would have positive social advantages. It would cost very little and, as I see it, it would be the quickest way to reduce the actual number of human beings wasting in unemployment.
6.53 p.m.
Lord Boyd-Carpenter: My Lords, in accordance with the custom of the House I should at this stage declare an interest as chairman of a company which employs a substantial number of workers and which might well stand to benefit from a number of the proposals which are being put forward in the debate. Having said that, I am sure that the House is indebted to the noble Lord, Lord Spens, for raising this immensely important and significant subject, though I part company with him, I am sorry to say, in respect of the phraseology that he has used. His Motion could be construed as suggesting that all employers should be encouraged to increase their workforces. I fear that that must not be so. Certainly there are a number of employers, in particular in the public sector, who are still grossly overmanned and whose competitiveness—if I may pick up the argument of the noble Baroness—is weakened by their overmanning; for example, British Steel or British Airways. However, so far as the private sector is concerned, and some parts of the public sector that are operating reasonably profitably, it must make sense to facilitate the expansion of their labour forces.
I most emphatically agree with the noble Baroness who has just spoken. The type of employment that we want to create must not be of a temporary or artificial nature. It must be proper employment, in work which has a reasonable chance of producing a product for which people are prepared to pay a reasonable price. Simply to put a great deal of public money into work creation schemes, however admirable in the short term their social effect, must, as the noble Baroness so well said, in the long term aggravate the problem of unemployment, which is the biggest social problem of our time.
It is profitable employment that we should make easier for employers to provide. I was in the United States last month, and in a factory there I saw displayed a great notice which I think makes the point better than anything I can say. The notice in that American works read: "Customers make pay day possible". There, in one succinct trans-atlantic sentence, is the real key to this problem.
One comes then to the question of what the Government should do—because it is the Government whom we are urging in this debate to take particular action. I pick up quickly the question of the national insurance employers' surcharge. I agree wholly with the noble Lord, Lord Spens, that it should be drastically reduced. I agree with the noble Lord, Lord McCarthy, that one cannot here and now quantify its effect in stimulating employment. But surely it is elementary that if one wishes to encourage something, in this case employment, it is really nonsense to impose a specific tax on it. It does not answer the case that the noble Lord, Lord Spens, has made to say, "Oh well, we can't assess exactly how much employment you would get". You would undoubtedly get some employment, and surely it is wrong in principle to impose this tax.
Here I should like to say one thing in parenthesis. As some of your Lordshps know, many years ago I was responsible for the national insurance system, and I am bound to say that neither I, nor my immediate predecessors or successors, would have agreed to any Chancellor of the Exchequer imposing by way of
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revenue tax a surcharge on national insurance contributions. In those days national insurance contributions went to the national insurance fund, and indeed we took a substantial additional subsidy from the Exchequer. I am sorry that some of my successors, in both parties, have allowed Chancellors of the Exchequer to use this particular contribution as a vehicle for taxation.
In a time of high employment it might not be particularly vicious, but in a time of massive unemployment a tax on employment, a tax on the British product which does not fall on its competing foreign one, must be a nonsense. I know that there is a lot of revenue involved, but I say to my noble friend the Minister that it is essential to reduce this particular impost, even if that sacred cow the PSBR is enlarged a little. Undoubtedly the obsession with the PSBR is tied up with the feeling, for which there is much to be said, that it is relevant to inflation. But, my Lords, nothing could be more inflationary than a tax on the labour costs of British industry. To convince oneself that because the PSBR is being kept down by this revenue contribution, one is dealing with inflation, when in fact one is putting up inflation as a result of this impost, is, with all respect to my noble friend, self-defeating.
I should like to make a specific suggestion which would have a dramatic effect upon youth employment. Let us suppose that the Government were to say that on young employees below a certain age the employer's surcharge would be wholly remitted. I believe that that would give a very great stimulus to employers to take on young people coming from school, and the social benefits of that would be enormous.
The only other point that I want to make is the one that the noble Lord, Lord Spens, indicated I would make. It concerns the question of wages councils. The Minister, my noble friend Lord Ferrers, knows that I really asked him two questions about the Government's attitude to the wages councils, and if he will allow me to say so, his replies to the questions were superb examples of masterly ambiguity. The wages councils were set up over 70 years ago, at a time when there were real sweatshops in certain industries and when they were very much needed to protect workers who otherwise would be grossly underpaid. But today, with a substantial level of unemployment benefit as a floor, that is not a serious risk. But what these wages councils do, in the limited number of industries in which they still operate, is to impose a legal floor, which means that an employer cannot take on a worker, who would be willing to be taken on, at a rate below the wages council level.
Of course, the effect of that is particularly vicious on those who are not particularly strong candidates in the labour market—again, the young people and (dare I mention it?) certain of the people in the ethnic minorities—because they tend to come late in the queue in the ideas of many employers as to who they are going to take on; and if you force up by force of law what must be paid to them to a level which may be well above the value they are or could be to their employers, then you are simply dooming them to unnecessary unemployment.
My Lords, if my noble friend cannot indicate that the Government intend to do away with the remaining

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wages councils altogether—and I suspect he cannot, because certainly at official level the Department of Employment has a great affection for these bodies—then I hope he will try to give to the House a simple reason as to why it is necessary to retain them. At a time when it is desperately important to increase the number of jobs, artificially to peg wages at a specific level again really does not seem to make sense; and if one studies the history one sees that in fact in wages council industries in the last decade they have forced up wages considerably further than the rate of inflation by itself would justify, and they have therefore undoubtedly deprived a certain number of people of jobs which employers could otherwise have given them.
My Lords, we have far too little time in this debate to deal properly with this enormous subject, but I have put to my noble friend two specific suggestions which it seems to me, and I suspect it seems to some of your Lordships, could really help—a reduction of the national insurance surcharge, with perhaps an absolute remission in respect of young workers, and the abolition as speedily as possible of the wages councils, which are now nothing more than an incubus on industry and a handicap to the provision of employment.
7.3 p.m.
Lord Roberthall: My Lords, I, too, welcome the initiative taken by the noble Lord, Lord Spens, in discussing various aspects of the most important economic subject of today, that of unemployment. I very much agree with several of his suggestions, which I think one could describe as making the labour market rather more free—and the noble Lord, Lord Boyd-Carpenter, has made the same point. There is no doubt that the labour market is now far too cluttered up with all sorts of difficulties and regulations which are helping to make the whole economy more paralysed than it ought to be at a time when we are moving into a period when we need to be as flexible as we can possibly be.
I must be as brief as possible. I have only two points that I wish to raise. The first is that I agree very much with what a number of speakers have already said, that it is a pity to create, as it were, artificial jobs that spin out the work or to pay workers for not doing anything. The best way to induce employers to provide more work is to see that they get more orders, and to that extent I feel quite strongly, as I said in the debate on the Address, that the Government must alter the stance or the push of their policies away from the present deflationary attitude towards at least some movement in the other direction; for instance, as has already been suggested by both the noble Lords to whom I have referred, the removal of the insurance surcharge. That is the sort of thing that is likely to create genuine work.
This is no place to go into a discussion of the whole matter, but I suggest that those interested in this might read the article by Mr. Maurice Green in today's Daily Telegraph. The Daily Telegraph is the strongest supporter of the Government, and Maurice Green has an impeccable record, both as an economist and as to the colour of his tie, shall I say. I think he goes extremely well into the difference between a general budget-balancing policy and one in a deep recession.
The other suggestion that I want to make is both
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a current and a long-term one. I touched slightly on this in the debate on the Address, but I think it is important enough to be worth expanding a little. This recession, because it is so deep and because it has gone on so long, besides producing the beneficial effects that we know it has had at least in the private sector, has done a good deal of damage to the economic structure, both in capital formation and, particularly, in the effect on the labour force, because the push on all employers produced by the reduction in aggregate demand has forced them to dispense with labour. Quite often they have tried, wherever they possibly could, to encourage the older people to take early retirement or redundancy pay; but to a very large extent the flow out of the labour force of skilled and experienced people has not been remedied, as it normally is, by the inflow at the other end of the younger people.
Here, I think things like the Youth Opportunities Programme are not constructive enough. When the economy begins to expand again—and we all hope (and some of us are determined about this) that it shall expand—the limit on expansion of employment is created when the economic structure will not support any further expansion of output beyond the point at which it pays for itself. The bottlenecks set in, exports are held back and imports are encouraged. When you come to this point of expansion, if there is a shortage of skilled labour the expansion will be cut off too quickly.
There is also the capital side of it; and, of course, I feel strongly that if there is any money going it ought to be spent on capital formation projects. But on the labour side it seems to me—and I think the noble Lord, Lord McCarthy, who is not in his place, hinted at this—that we want something that will not give people just a little bit of casual experience but will train them properly for the time when they are going to be needed. I feel that if the Government are going to spend money, if they can be induced to spend it at all, it would be a very good thing if they could do it in some way which would encourage employers everywhere to take on apprentices and to pay them, if necessary, the whole cost of the apprenticeship, and to do this for a considerable period.
That would not run into the present difficulties because we know that young people are complaining that what they get now does not help them to get a job later on. We know that some employers are using the people they take on to do more or less unskilled work and that they get rid of people, so you do not gain anything there. But if the money was directed much more to apprenticeships and training schemes, it would give hope and encouragement to those who were given the jobs, but, much more important, it would help to create the economic structure which will be absolutely essential when we come to the expansion period and which, I am afraid, as a result of the recession, is being undermined now.
7.10 p.m.
The Lord Bishop of Liverpool: My Lords, I am somewhat nervous lest these propositions that the noble Lord, Lord Spens, has been suggesting to us put in front of us a belief that employers can do more than lies within their capacity; although I believe that some of the ideas that we have heard, especially those

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about work sharing which the noble Baroness, Lady Seear, put before us—work sharing by both young people and older people—would help. It was a bold and wise move of the Government to send the Secretary of State for the Environment to come and spend three weeks in Liverpool this late summer and now to have particular responsibility for Merseyside for a further year. We have a powerful and vigorous Secretary of State who is putting repeated challenges to employers; and in a number of situations employers have not responded, often because they feel they are not able to do so.
Let me give an example of one area in which there has been some willing response, just in that area which the noble Lord, Lord Roberthall, has been mentioning about proper training. The Secretary of State challenged the biggest firms in Merseyside to produce between them 3,000 places for training. Let me tell your Lordships that the score at the moment stands at 700. If everything goes very, very well we may reach 1,000. It is a reminder that the actual ability of industry and commerce to respond to such challenges is sometimes limited. And that has been the area in which there has been the most willing response to his different challenges. Let us not put too much hope on what private employers can do without major encouragement, or we may do no more than tinker with the vast problem which many of us believe needs fundamental changes to tackle it.
The present situation is the result of at least five sets of causes: first, structural changes caused by new technology and by changes in the world economy; secondly, social changes such as the role of women; thirdly, individual employers' priorities; fourthly, cyclical recession and, fifthly, Government policies of the day. This Motion focuses only on No. 3 of those five, when, in the face of the other factors, many firms are in a survival struggle. Ignoring structural change will lead us to short-term policies. An upturn in the economy will not necessarily bring more jobs. Industry is slimmer and leaner because it believes it needs to be. It has a good deal of unused capacity against that upturn.
I feel that the noble Lord, Lord Boyd-Carpenter, and others who have spoken are calling upon us to believe that market, efficiently run, will bring back full employment. I believe that to be untrue and to be misleading the country. A sea-change is going on. There are structural changes caused by new technologies and changes in the world economy which mean that the market, as I believe, will not produce full employment or anything like it in the foreseeable future.
For many years of my life, the initials "MCC" had a certain magic to them. I now have the experience of initials crossing from one world to another. Nowadays I have to bow in a different way when the Merseyside County Council tell me something. The Merseyside County Council's sector-by-sector report in May of this year forecast that Merseyside, already at the bottom of the league, is going to have a continuing net job loss of 80,000 further jobs from 1981 to 1986. The point I want to make is that we must face the fact that there is a sea-change in employment patterns and that can be met only by fundamental
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changes in attitude. I would ask whether the Government and whether every party would not acknowledge that this is the case. Repeatedly, I am told, most politicians behind closed doors believe it but it is not the acceptable thing to say in public. If a Government reduced unemployment in the next five years, say, to 1·5 million, they would be regarded as having achieved marvels. I want to say that it would not be good enough; for reducing unemployment to 1·5 million, relying on the operations of the market, if it were possible, would probably wipe out serious unemployment in the more affluent parts of the country. But it would scarcely alter anything in Northern Ireland, Glasgow, the North-East or Merseyside.
The noble Baroness, Lady Seear, reminded us of some of the massive unemployment in some areas of Merseyside. I was having my first glimpse of the Scarman Report and it reminds us that Leece Street Employment Office, between 1976 and 1980, fluctuated between 17,000 and 18,000 unemployed. Between 1980 and 1981 the figure went up to 21,000. If we come down to 1·5 million nationally, I suppose we might get back to 17,000 or 18,000. It would change very little of what we have been facing and of what the other priority areas face. When people say that 5 per cent. is an acceptable figure that we must get used to in a nation, that means 10 per cent. in Merseyside, 20 per cent. in Kirby and every area like it; and has done for years.
If we could admit that the market will not produce anything like full employment it would lead us not to wring our hands in hopelessness or to bland statements about how pleasant it would be to have endless leisure; it could lead us to a healthy positive debate about how a country could best use the resources of the very large numbers of people that the market will not require. There are genuine jobs, not make-believe jobs, which are crying out to be done in the community. Each unemployed person costs the state at least £4,500 per annum. Those who are lucky enough to have a demanding, high-earning job, should stop wingeing about taxes and be glad to pay more so that the most precious resources of the nation, our people, may be given work which truly needs doing. It is true that such public spending needs a profitable, slimmed-down industry; but we need to stop setting public and private against each other. Industry and commerce also need good standards of health, education, transport and the rule of law. I hope that, as we look at some of the very modest and proper calls that should be made to industry and that responsible industry is trying hard to respond to, we shall not slide away from the much more fundamental debate that we need.
7.18 p.m.
Lord Harris of High Cross: My Lords, I join others in congratulating my noble friend Lord Spens in bringing this Motion before us and for moving it so forcefully. I agree with the kind of approach that he adopted. I should like to have said to the noble Lord, Lord McCarthy, that I would join him in deploring the present levels of unemployment if he would join me in deploring the rising trend of unemployment before 1979. What I think is most deplorable about this saga is the extent to which unemployment has been aggravated over a long period of time by politicians of both parties, animated by nothing more

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lethal than good intentions. It seems to me that diagnosis must start by acknowledging there has been a steeply rising trend in unemployment, along the lines that the right reverend Prelate spoke of, since 1965. If we look back to before 1960, the total unemployment in one year seldom rose above 300,000. After 1965 the average unemployment has never fallen below half a million. Since 1976 it has not fallen in the best year below 1¼ million. Yet the whole of that period was not marked by savage deflation; the whole of that period was marked by unparalleled expansion in budget deficits and monetary aggregates however one measures them. We need not be reminded that the result has been a massive and continuing inflation in labour costs per unit of output.
Labour costs per unit of output doubled first in 17 years from 1950 to 1967; and they doubled again in seven years, 1967 to 1974; and they doubled yet again in only five years, 1975 to 1980. It seems to me that this dismal record should direct our search for remedies away from repeated talk of so-called reflation at which the noble Lord, Lord McCarthy, hinted. Instead we should consider the micro-economic effects of increased labour costs on the demand for labour in the market place.
To assist your Lordships, I offer for your consideration a little more precisely than the noble Lord, Lord Boyd-Carpenter, the following proposition from the textbooks that it is difficult to confute. Other things being equal, fewer people will be employed at a higher than at a lower cost. If the noble Lord, Lord Kaldor, were in his place I would appeal to him for support since his own ingenious if somewhat shortlived selective employment tax sought to revive the demand for labour in manufacturing by the process of reducing its cost. All Government job subsidies work on precisely the same assumption.
It follows that all those well-intentioned policies from both parties over the years which have raised labour costs have inadvertently tended to increase unemployment. Why should we lack the candour, or the courage, to assert that many workers have been priced out of work by the operation of coercive trade unionism, the compulsory wages council mentioned by several noble Lords and costly measures of employment protection?
During the past decade or so the burden of excessive wages has been intensified by rising national insurance and other statutory charges which now add 25 per cent. to the wages bills of the employer.
At the same time, the value of these higher wages has been eroded in the hands of the worker by national insurance and taxation which he starts paying at a marginal rate of 37.75 per cent. on earnings as modest as about one-third of average earnings. The damage to incentives is even worse if we allow that much of this high taxation goes to provide social benefits that are often more enticing than net take-home pay from employment.
A particular example: a married man with two children earning £95 per week from November 1980 would have been £3 a week better off if he had deliberately chosen to be unemployed for six months of the year. That does not allow for the possibility that he might do some work for cash in what is sometimes delicately called the "unobserved economy".
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The right reverend Prelate had some hard things to say about the market and created the impression that the figures of unemployment were a great immovable, growing mountain of discarded people. I want to put this to him: despite all the distortions and discouragements to which the market has been subjected, it is surely astonishing that beneath this well-advertised figure of 3 million unemployed we have a very lively labour market, a "dynamic" labour market, in the words of the Manpower Services Commission, in which about half a million new jobs are taken up each month, and in which the Manpower Services Commission estimated that in 1980 there were 7 million changes of jobs in that 12 months.
Unlike my former noble friend the noble Lord, Lord Roberthall, I remain a medium-term optimist. I believe that in the longer run there are improvements in productivity, which companies are already achieving in this severe recession, that will enable the rise in real wages to be resumed without this haunting risk we have faced of pricing our people out of their jobs. Meanwhile if we are truly concerned with hastening the decline in the unemployment figures, it is crucial that wages and salaries are held back—that is to say, held down—not least so that profits can be rebuilt as the only sure guarantee of expanding future jobs.
But more immediately we are faced with less alluring choices. I believe that the most promising positive steps would be to combine a cut in taxes on earnings with a freeing of impediments in both the labour and housing markets. A radical approach would include not only reducing trade union privileges on the lines now proposed by the Government, but the repeal of wages councils, where I follow other noble Lords, and the misnamed "employment protection". I would go further, at the same time I would start moving to phase out rent restriction and council house tenantry as two of the most damaging obstacles to the mobility of labour.
I agree with the noble Lord, Lord Boyd-Carpenter, who said that so long as social benefits stand above the net earnings of so many families in jobs it is no longer plausible to argue that minimum statutory wage protection remains necessary to keep workers out of indigent penury. Above all, I think that the reduction in Government spending still holds the key to cutting rates and taxes which I believe would do more than any other single measure—in the words of the Motion—
"to encourage employers to expand their workforces";
and, I would add, to encourage employees to expand their own efforts to price themselves back into work.
7.27 p.m.
Viscount Massereene and Ferrard: My Lords, I should like to add my thanks to the noble Lord, Lord Spens, for putting down this debate. I also ought to declare an interest as a small private employer. One aspect that has not been broached in this debate is high interest rates. In order to start or to expand a business the average employer has to go to a bank for money, unless he has a lot of cash in the bank, which is rather rare these days and, with inflation, is foolish. People wanting to start businesses or to expand business, if they are viable, ought to be able to borrow

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money at a lower interest rate than at present prevails. If money has to be borrowed at 18 per cent. or 20 per cent. it is very difficult to expand a business.
I agree that in the old days monetary supply was controlled completely by high interest rates. That situation does not apply today. After all, public expenditure is over 60 per cent. of the gross national product, and therefore high interest rates do not really control the economy as they used to do. I should like to make that plea for small businessmen who wish to expand their business or for someone responsible who wishes to start a business. They ought to have access to cheaper money.
A point which has been raised by the noble Lord, Lord Spens, concerns the Protection of Employment Act. It is important, but perhaps is not quite so important as has been made out in the penalisation of employers. Of course it is important, but why chiefly I object to it is that it is a complete reversal of British law. The employer is adjudged guilty before he is proved not guilty. The employee may perhaps have been drunk and been an extremely bad employee: the employer gets rid of him and then the employee is able to go to an industrial tribunal. Provided that the employer can prove that the employee has been a bad employee, he will be found not guilty; but I think it is extremely wrong that he should be adjudged guilty before he can prove his innocence.
I am glad to see the noble Lord, Lord McCarthy, is in his place, because the other thing I should like to draw attention to concerns the wages councils. I have often wondered whether people on those councils have ever paid wages out of their own pockets, because the noble Lord, Lord McCarthy, if I understood him aright, appeared to think that very high wages had no effect on the economy. He thought it did not actually make us non-productive; but, as I said during the debate on the Queen's Speech—and I hate repeating myself—between 1970 and 1980 wages increased by nearly 400 per cent. and productivity by barely 15 per cent.—so of course high wages affect productivity and also, therefore, our competitiveness. I think that my noble friend Lord Boyd-Carpenter had something to say about wages councils. I am just trying to remember what it was: it was very good—
Lord Boyd-Carpenter: My Lords, does my noble friend wish me to assist him?
Viscount Massereene and Ferrard: My Lords, my noble friend said that we ought to abolish wages councils. I quite agree with that, because the point is that there is no fear of sweated labour today, with the welfare state. I have actually met employees who have said to me: "We are quite prepared to take less, but of course the employer cannot give less under the law". If you abolished wages councils, you could have more inspectors who could go round and see whether there were employees who were taking lower wages than has been laid down and whether they were doing it completely of their own accord, and that the employer was not taking advantage of them.
The other thing I should like to say is that I support my noble friend Lord Boyd-Carpenter 100 per cent. regarding the national insurance surcharge. It is a great
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drag on industry. I also think that my noble friend's suggestion that there should be no national insurance surcharge for employment below a certain age is a good one. I do not know what the age would be; I do not really know when a youth becomes a man, but I think the law lays down that an adult wage must be paid from 20 years old: I think that is right. I believe that would be a great help, because youth employment is the most important factor and has the greatest effect on the whole of unemployment. While I welcome what the Government have done regarding the youth opportunity schemes, anything else that can be done to alleviate youth unemployment will be of immense benefit socially.
I was rather surprised to hear the right reverend Prelate the Bishop of Liverpool say that we ought to take unemployment down instantly to one and half million: of course that is quite impossible. You can only do that by borrowing more or printing more money. As I pointed out in the debate on the Queen's Speech, between 1974 and 1979 the then Government borrowed or printed more money than had been borrowed by all British Governments in the last 200 years. We cannot go on like that. You cannot borrow money to create artificial employment: it is the road to perdition: it is the way of the Gadarene swine; and it is crazy economics.
My Lords, I have almost come to the end of my time limit, but I should just like to say that I favour the idea of lowering the pension age. It has been suggested in this House on previous occasions. It will cost the welfare state more money, but it would be a good idea. I should like, if I may, also to refer to job-sharing, which I have referred to once or twice before. I think it is a sound suggestion for older people, and perhaps for the young also, but it is of course quite difficult too organise. For example, obviously both people could not be paid full wages. One cannot pay two men full wages for doing the one job, but, if it could be organised in some reasonable way, it would be helpful.
I do not want to say very much more, except to reiterate that I should like the Government to do everything they possibly can, as they are doing, to help youth employment, since it is so important for social reasons.
7.37 p.m.
Lord Reilly: My Lords, I am grateful to my noble friend Lord Spens for suggesting that I might take part in this debate, for it gives me an opportunity to air for six minutes just two topics; namely, design and craftsmanship. The role and status of design in British industry are to my mind subjects which deserve a debate to themselves, but I think design is also relevant to the Motion before us this evening. Surely the most important question facing British industry is what to make—not how much, how cheaply or how quickly, but simply what?—and that cannot properly be answered without the designer. So pursuing the plea of the noble Lord, Lord Spens, for positive steps, I would urge the Government to do all in their power to stimulate and enhance design in British industry through better education of designers and manufacturers alike, through intelligent promotion and propaganda and, most effectively of all perhaps, through

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deliberate, discriminating patronage, though there is surely no excuse whatsoever for public money, whether central or local, to be spent on any but the highest available standards of design, provided the price is right. On that point, let us not forget the old saying that, "Good design is always cheap at the price".
In any event, is it not time that we began shedding our "lowest tender" mentalities? If it were to become known throughout British industry that the public purse, the biggest purchaser and the biggest customer of all, would not only demand the best but would also eagerly buy British whenever British was the best, I believe (as does this week's Economist) that our standards would soon rise, to the exclusion of much foreign competition; and in our craft-based industries the new business thus generated or diverted from imports would certainly encourage employers to expand their workforces. I heard a manufacturer of some excellent British furniture say in the Design Centre only last week: "In my company we are very proud of our technology, for our technology is people". It is surely in such labour-intensive areas that work forces can most sensibly be expanded.
May I now turn to the most labour-intensive area of all—that of the craftsman? Here successive Governments have had a reasonably good record, following the lead given by the noble Viscount, Lord Eccles, when he was Minister for the Arts. But I still doubt whether it is widely enough recognised in official circles what a success story attaches to the internationally acclaimed work of our Crafts Council, of which I was proud to be a member until released last month. It has been a success story in terms not only of skill and vision but also of turnover and employment. It has been a wise and imaginative investment of public money and, to my mind, an investment which should be increased, since the Crafts Council maintenance grant of just over £33 a week enables its recipient both to create new artefacts and to earn an income, rather than to join a dole queue at a still higher cost to the state.
Once established via a Crafts Council grant, most such carefully chosen craftsmen develop into small businesses employing three, four or even 10 skilled apprentices while several such master craftsmen have actually opened small factories. The numbers so benefiting are, of course, still very small—indeed, the total employment of creative craftsmen is only a drop in the ocean of unemployment—but a caring Government counts persons as well as people.
There is one other area of labour intensity that no Government can afford to overlook; namely, those crafts associated with the building trades. Here also the Crafts Council is active, having recently set up the first national register of conservation skills in the building industry—an activity which should well complement the Building Conservation Trust at Hampton Court, in which I must declare an interest as its chairman, while thanking two Members of your Lordships' House, the noble Lords, Lord Kennet and Lord Sandford, for serving as joint honorary treasurers.
This is not the occasion for marshalling the many social, political and economic arguments for building conservation. All I would say, in the context of the Motion of the noble Lord, Lord Spens, is that conservation can be done only by hand. It is, therefore,
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an ideal area in which to take positive steps to encourage workforce expansion, without running into the danger or folly of over-manning.
7.44 p.m.
Lord Glenarthur: My Lords, I, too, should like to thank the noble Lord, Lord Spens, for providing the opportunity to discuss employment in this way this evening. Charges are sometimes made against the Government that they are uncaring in their attitude towards the number of unemployed. It seems only too clear and logical to me, however, and, I am sure, to others in your Lordships' House, that there can be little validity whatever in this view. In national, economic and even party terms, it is, of course, tragic to have unemployment on the scale which, sadly, exists today, unless, as is the case, it is the temporary, unfortunate side effect of a policy that is designed ultimately to increase industrial output, improve competitiveness in world markets, stimulate more orders and lead to the expansion that is necessary to achieve them, and hence to more jobs.
The broad thrust of the noble Lord's argument in proposing his Motion was directed towards the ways in which existing bodies might be encouraged to take on more employees. He and other noble Lords have suggested ways in which the Government might further stimulate opportunities in this direction. I agree with many of them, but I should like to develop the theme in a slightly different way, directed more towards opportunities for employment which could be created by increased numbers of businesses.
One of the considerable advantages to industry of the Government's policies over the last two and a half years, coupled to some extent with the effects of the recession, has been the opportunity given to businesses to shed their manpower excesses. It has left them with an increased level of productivity per employee, and on the whole, industry is leaner and more competitive because of it. The disadvantages of carrying unproductive manpower in any organisation are enormous and obvious. Coupled with this, the Government have introduced, and are developing, a string of measures designed to assist small firms both to start up and to develop. Indeed, I have here a list of some 73 different measures designed specifically to assist the development of small firms and hence to increase employment.
In starting any new business, there are two significant elements which the entrepreneur must consider. One is personal financial risk and the difficulties of persuading others to share the financial risk. To a very great extent, the Government have acknowledged and mitigated the effects of this with their introduction in June this year of the loan guarantee scheme. I am particularly glad to see that this scheme has been so widely taken up.
I understand that the value of guarantees available has been raised recently from £50 million to £100 million, that over half the guarantees have gone to firms in the manufacturing sector and that a total of 1,172 guarantees, representing £41 million, were issued up to 31st October. My guess is that there will continue to be a considerable run on this scheme. I hope that my noble friend who is to reply may be able to indicate that the Government would consider a further

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extension of it, should the demand continue, and that he might also be able to say whether a reduction in the Government's 3 per cent. premium could have a beneficial effect on the number of applications made under the scheme.
There is, I believe, a vast amount of enterprise and talent, a host of good ideas and the enthusiasm to develop them available within the country. The loan guarantee scheme has helped the entrepreneur enormously, by lessening the financial risks which pursuing his good idea entails and, in turn, has led to increased opportunities of employment. But there is another element, and that is in the acquisition of the financial skills which are necessary to put the good ideas into practice. After all, the success of any commercial enterprise boils down, in the end, to management of finance. Abundance of skills and ideas there may be, but the people with them do not, in many cases, possess the financial skills which are needed to implement them.
I should like to suggest that the Government develop their magnificent theme of encouragement further in this area. I should like them to consider introducing a scheme to help the entrepreneur obtain advice and limited training as to how to arrange the financial aspects of his projects, on topics such as financial modelling, sensitivity analysis and all the other measures which should be used to test the continuing financial integrity of a project. I believe that this could be done through special financial advice bureaux, not unlike Citizens' Advice Bureaux, in selected parts of the country, where the prime mover could obtain advice and training on how to organise the finance of what he wanted to do.
I believe that this could be financed by the Government, or by the agency which gives the advice, taking a slice of the action—5 or 10 per cent. of the profits of the project over a negotiated period. Additionally, the Government might consider sub-contracting a scheme such as this to existing centres of financial expertise, such as the ICFC. But the important point is that the scheme must, in the end, finance itself; the Government, directly or indirectly, recovering their costs over a period of time through the success of the business which they have advised. The Government have done much to help the entrepreneur set up new business and to mitigate the risks the individual takes in doing so. It would be impossible, if not wrong, to remove all the risk. Anyway, an element of risk is a considerable incentive to success. I hope that this suggestion in relation to financial advice might be considered sympathetically as a useful addition to the provision of other counselling services which are designed to help start-ups and prevent failures.
7.51 p.m.
Lord Kilmarnock: My Lords, we are all agreed that we should be grateful to the noble Lord, Lord Spens, for having introduced this Motion. We all know the noble Lord's interest—I was going to say passionate interest—in the subject. Certainly he was one of the prime movers in the setting up of your Lordships' own Select Committee on Employment. We are very grateful to him for having introduced the topic this evening.
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The noble Lord set out a number of proposals which were designed to encourage employers to increase their labour force. The party of those of us who sit on this Bench also put forward six proposals. They were put forward by Mr. Roy Jenkins in the Warrington by-election campaign and I outlined them in some detail to your Lordships during the debate on the gracious Speech, so I will not go through all that again. However, there is one aspect of those proposals which I should like to take up because it was not mentioned by the noble Lord, Lord Spens, though I am delighted that it was touched on by the noble Lord, Lord Reilly, when he referred to the building trades in relation to conservation. I want to go a little wider than that and have a brief look at the whole of the construction industry, where again my right honourable friend Mr. Jenkins made some positive proposals at Warrington.
Everybody knows that the construction industry is labour intensive. I think it is calculated that something like 300,000 building workers are on the dole. At the same time, our national housing situation is deteriorating to a quite alarming degree. The total expenditure on housing fell from £6,072 million in 1975–76 to £4,256 million in 1980–81. The number of flats and houses—dwellings on one, two or more floors—in Great Britain which are now unfit, lacking in basic amenities, or in need of substantial repair was recently estimated by Shelter at 3,300,000 dwellings. Our suggestion is that those receiving unemployment or supplementary benefit should be given the opportunity of working in this field at, say, an additional £15 or £20 a week above their benefit levels. The initial cost to Government would be simply this additional sum and there would be a direct and indirect tax feedback. Social, community and individual needs would be served at no vast cost. Mr. Jenkins estimated the cost of getting 250,000 people back to work at no more than £250 million in a given year, which is a very great deal cheaper than most job creation schemes and would also go a long way towards providing us with the habitable dwellings that we so desperately need.
Here I should like to advance for the second time (I apologise for the fact that it is the second time I mention it; I mentioned it on 12th November in the economic debate) my own variant of this scheme. I should say that it is not yet party policy, even in draft form, so I am not committing anybody but myself to it. However, I cannot for the life of me see why this modest sum, at whatever level it is agreed on, whether at £15 or £20 a week, should not be available to unemployed people wishing to improve their own homes, whether rented or owned, if it could be shown that the dwelling lacked amenities or was in need of substantial repair. We are, after all, a nation of handymen now, with a few regrettable exceptions such as myself, and "do it yourself" flourishes, or was flourishing when people could afford the tools and materials to get on with the job. A grant for the materials would also be necessary, of course, but the cost to local authorities would be greatly less than was the case with improvement grants, now mostly abandoned, because the labour element would be provided. The noble Lord, Lord Spens, spoke about stimulating employers to expand their workforces. I am talking about stimulating self-employment at no great cost and with great benefit not only to the housing

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stock but to builders merchants, tool manufacturers and various other branches of manufacturing industry.
I come now to my final and more general point. The noble Lord, Lord Spens, has concentrated on measures to encourage employers to take on more labour. But we are facing a crisis in demand. This was the main burden of the remarks made by the noble Lord, Lord McCarthy. There is no employer in the world, with or without subsidy, who is going to increase his labour force on any considerable scale if he can see no outlet for his product or service. The noble Lord, Lord Boyd-Carpenter, referred to "profitable employment". He also gave us the neat little phrase, "It is the customers who make pay-day possible". The present Government have attempted to create an atmosphere in which enterprise and initiative can flourish—it was the noble Lord, Lord Glenarthur, who made the orthodox case for this—in the hope that this will revitalise the whole economy and engender new employment. I think (one has to say more in sorrow than in anger) that this has failed. Despite the flickering dials of some economic indicators, there is really no strong sign of a spontaneous revival of economic activity. The trickle-down theory, according to which butter and jam spread lavishly at the top will seep down and lubricate every level of the economy, is coming increasingly under fire, even in that bastion of enterprise, the United States. Mr. Stockman blew the gaff on that the other day.
The recession is widely blamed, but this is simply the best scapegoat we ever had, for the recession is not God-given but man-made and could, with patience and determination, be reversed. The noble Baroness, Lady Seear, talked quite rightly about competitiveness, but if world trade is throttled owing to the strangulation of third world economies by their burden of debt to us and to the institutions we have set up, there will be no net growth of export opportunities, and such as there are will be gobbled up by countries only too eager to work in the sweated labour market. My view is that it looks, sadly, as if the West, despite a discernible shift in the position of our own Government, missed an important opportunity at Cancun. If wealth is not constantly redistributed, it chokes itself.
And what is true on the international scene is no less true on the domestic scene. Perhaps it is even more true. How can employers be expected to increase their workforces to any significant extent with present prospects? The production-consumption balance is out of joint and this imbalance will not be helped by the real cuts we are promised, and which we on this Bench will resist, in social security benefits. The Government say, "Let industry improve its performance and then we will spread the jam more widely". The opposite must also take place. Only a wide and fair distribution of wealth, not least to those who are sick or out of work through no fault of their own, can prime the pump of demand.
Here I am afraid that with some trepidation I take issue with the noble Lord, Lord Harris of High Cross, who is an expert. I do not go along with the general burden of his remarks on social security payments. I noted that he also referred to the noble Lord, Lord Kaldor. This morning, re-reading the debate of 12th November, I picked out from the speech made by the noble Lord, Lord Kaldor, the following quotation:
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"our neighbours who have been so much more successful … had a bigger dose of Keynes and Beveridge since the war, not a smaller one. Social security and full employment were more consistently pursued in post-war Germany, Austria, France, Sweden, Denmark and Norway than they were in Britain. Yet they have not been enfeebled but very much enriched by those policies".—[Official Report; col. 359.]
Any Government that neglect or belittle social policy these days or treat it reluctantly as charity are in for very big economic trouble.
I hope I have not strayed too far from the mark. My point is that, though I respect the concern expressed by the noble Lord, Lord Spens, and would agree with him on one or two of his suggestions, notably that on the national insurance surcharge, I cannot, frankly, see employers flocking in their thousands to embrace them unless they also see a reasonable chance of selling what they make or the services they provide. In the meantime, I submit that the modest proposals for the construction industry which I have made are an uncostly step in the right direction while, as we must, we come to grips with these wider issues.
8 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, the House will be grateful to the noble Lord, Lord Spens, for giving your Lordships the opportunity of discussing a matter which is of great concern not only to all of your Lordships but also to every man, woman and child in the country. Unemployment is a real anxiety and it is a personal tragedy. The fact that we have been able to have a debate today which has been totally devoid of partisanship, and which has been wholly constructive, I think is a cause for great satisfaction, and I can assure your Lordships that what has been said today will be studied with very great care.
Unemployment itself not only causes financial hardship to people but, worse than that, it eats at a person's pride and self-respect and for those reasons, if none other—and there are plenty—the Government would wish to see unemployment lowered. There is no denying the serious nature of the problem of unemployment itself, as yesterday's figures have reminded us. It is a waste of the nation's resources and it is a waste of men and women.
If I may say so, I thought the right reverend Prelate the Bishop of Liverpool in a most graphic manner brought to the debate a realisation of the problems which affect Merseyside. I approve of all his diagnosis of the reasons for their coming about, other than when he came to the fifth reason, when he said that inflation or recession was the fault of the Government, but I shall come to that a little later. He said that there was a sea change going on. I think there is, but I would take issue with him on one thing. I hope, but of course it is only conjecture, that his prognosis that there will always be a perpetual level of unemployment will not prove to be right. It is rather like when people say that because we are entering the era of the computer we must always expect unemployment. If we take that attitude we are saying that this generation of all generations has come to the end of the frontiers of science and knowledge and therefore we shall not be able to progress. I should not be able to accept that.
But, my Lords, as we try to overcome this problem

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we must recognise it for what it is. It is a symptom of a far deeper problem which faces not only us but practically every other western country. The recession and unemployment is the outward manifestation of the worst recession which has hit the world in the last 50 years. The noble Lord, Lord Kilmarnock, said that it was all our fault. Well, maybe it is our fault, but nobody succeeds—
Lord Kilmarnock: My Lords, I did not say it was all our fault: all I said was that it was man-made and not God-given.
Earl Ferrers: Well, my Lords, that seems to me to be rather similar. However, I will accept that and, even if it is man-made, it is man's business to try to overcome it; and that is not a very easy task. That is the background which we have to accept, whether we like it or not—and we do not—before we consider what effect our own peculiar national circumstances may have in contributing to the problem.
We are not alone in suffering from unemployment; other countries in the world are also affected. The continuing world recession has raised unemployment levels, for instance, in France to 2 million, so that unemployment there stands now at 10·6 per cent. Unemployment in Germany rose by 100,000 last month alone. Belgium has an unemployment rate of nearly 15 per cent. So we are not alone in these difficulties. In a number of industrialised countries unemployment is now rising even more quickly than it is here. Although there are 10 million people unemployed in the European Community as a whole, the fact is that we have a higher percentage of our population in employment in this country than any other member state in the European Community except Denmark. These high levels of unemployment in our partners in the Community are a cause of great concern to us as well because we have to trade with those countries, as they do with us. The international recession itself, therefore, delays our own recovery. If that is so, it merely emphasises the vital importance of our being able to get ourselves into a competitive position as we come out of the recession.
The recession comes on top of the underlying problems from which we in the United Kingdom have suffered and which, at least up to now, have left us in a worse position than our competitors. I agreed so much with the noble Baroness, Lady Seear, when she said that the heart of the problem is uncompetitiveness. I agree; I think she is right. The hard facts are that for 20 years or more we as a country have been falling behind in competitiveness as wages have outstripped production and as we have failed to modernise and make our industry more efficient.
The noble Lord, Lord McCarthy, said that if you cut wages you will not necessarily price yourself into employment. That may be so, but the converse is that if wages and costs rise, you price yourself out of employment. The results of this period of 20 years have been inflation and lost markets and ever-increasing unemployment. But if one looks at the effect on wages and output over the last three years for which one has full figures, the figures themselves tell a horrifying story.
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Between 1977 and 1980 the average hourly rate of pay went up in West Germany by 17 per cent., in Japan by 23 per cent., in the United States by 27 per cent., in France by 46 per cent., and in the United Kingdom by 59 per cent. If one looks at the other side of the coin—the average output per hour over the same period—in West Germany the average output went up by 6 per cent., in the United States it went up by 6 per cent., in France it went up by 14 per cent., in Japan it went up by 23 per cent. and in the United Kingdom it went up by 1 per cent. So, my Lords, we have been top of the list for paying ourselves more and bottom of the list for producing more.
No one can say that those facts, which we as a country have imposed upon ourselves, irrespective of the existence or otherwise of any worldwide recession, have not made their own contribution to unemployment. Management and unions must share the responsibility for that because usually in collective bargaining it is they who are responsible for what is demanded and for what is offered and for what is finally agreed. No one can divest himself of the responsibility for a state of affairs to which he has contributed. We all have to accept responsibility for our actions. The result is that we have delayed too long in making changes which our competitors have taken for granted. An unwillingness to take tough decisions and the difficulties of overcoming entrenched attitudes and restrictive practices have led to overmanning, uncompetitive prices and failure to adapt to the needs and the requirements of the market. The truth is that employment can only be sustained if the goods and services which are produced can be sold in the market.
The Government cannot halt the recession. If we tried to mask inflation by relaxing fiscal controls, it might have short-term attractions and short-term effects but it would throw the economy into even worse confusion and make inflation even greater. What we can do, and what we are doing, is to create conditions in which employers and workers can themselves, by their own efforts, make existing jobs secure and try to create the new jobs which we need. Only industry—not Government—can do this. Government can set the guidelines but it is only industry—the men and women involved—who can take the initiative and create the opportunities.
The main instrument by which the Government can help is through our fiscal and monetary policies, which set the framework for holding down public spending and inflation. We can trade only by being competitive. We can be competitive only by keeping prices down. Inflation runs counter to all this. It makes people lose confidence in the present and in the future. It undermines stability and it undermines investment; and it is upon investment that the future is determined, and it is by investment that jobs are created. That is the reason the Government see the attack on inflation as one of the highest priorities, irrespective of the unpleasantness of the methods by which this has to come about. We cannot control unemployment without controlling inflation. The short-term attraction of relaxing our grip on inflation would only lead to greater and cumulative long-term problems. This means that inevitably we are strictly limited in the other measures which we can operate,

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however attractive they may appear, because they can only add to costs which are already too high.
Nevertheless, we are doing a great deal to encourage the economy by removing unnecessary barriers and by giving incentives to change. In particular, we have a wide range of measures to help the new small firms which will provide future jobs. We have reduced bureaucracy and we have encouraged the flow of new finance, particularly to small firms, and we are encouraging new technology. I was glad that my noble friend Lord Glenarthur referred to what the Government have done for small businesses, because he spoke, if I may say so, in a most constructive and informed way, and I will certainly see that the suggestions which he has made for the further encouragement of small businesses are taken into account.
We are encouraging private enterprise to take over from the state. But above all, our aid to industry is designed to stimulate investment and efficiency, because a sound industrial base is essential to achieve economic growth and a real increase in jobs. Your Lordships have made several suggestions as to how this should be done. The noble Lord, Lord Spens, and the noble Lord, Lord Boyd-Carpenter, said that they wished to see the national insurance surcharge removed. I fully realise the strength of feeling in some quarters in favour of reductions. My noble friend Lord Boyd-Carpenter said that if you want to encourage employment you do not tax it; he would not have done it 20 years ago. I accept that, but of course things have changed in 20 years and we have a level of inflation, and regrettably of recession, which we did not have 20 years ago. But the other side of that argument is, that although one does not want to tax employment, if wages are a high cost it may be that the national insurance surcharge can be a way of encouraging competitiveness, because it is a cost and not a tax on profits. Of course I accept that £3·8 billion comes from this tax this year, and it certainly remains a possible candidate for reduction if the resources are available, but the scope for tax measures is very much dependent upon public spending decisions.
Lord Boyd-Carpenter: My Lords, would the noble Earl allow me to intervene? He said, so rightly, that this surcharge was a cost, but does he appreciate that it is a cost not borne by our foreign competitors?
Earl Ferrers: My Lords, that may be perfectly true, but what I am telling my noble friend is that nevertheless it does produce a vast sum of money, and if that sum of money has to be produced from elsewhere one has to shift the burden of tax. That may be possible; it may be desirable. Certainly my noble friend's suggestions will not go unheeded.
The noble Lord, Lord Spens, said that he would like to see alterations in the employment protection legislation. Well, the Government are conscious that the employment protection legislation has been inhibiting employers, and particularly the smaller employer, from recruiting. We have made a number of amendments to these provisions which have been specifically designed to ease the position of employers and to encourage them to expand, and so progress has been made there.
Then the noble Lord, Lord Spens, referred to wages
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councils. He said he was not going to say much because he knew that my noble friend Lord Boyd-Carpenter was going to refer to that matter. I could not help but be amused when my noble friend Lord Massereene said he could not remember what Lord Boyd-Carpenter had said, because I thought what he had said was most trenchant. What he said was that he wanted wages councils to be abolished. He did refer to the fact that he had put down a couple of Parliamentary Questions to which I had the privilege of replying. I am not certain whether it was a compliment or a cause of displeasure, but he said my replies were "masterly ambiguity". I thought he really meant that they were a source of total clarity but they did not happen to agree with what the noble Lord was saying.
Lord Boyd-Carpenter: My Lords, if my noble friend will allow me, he has very nearly got it right. What I was really trying to suggest was that the noble Earl, with his habitual ability, was making the best possible defence of the wholly indefensible.
Earl Ferrers: My Lords, that, if I may say so, is totally different, and it could very well even be true. I would say this to my noble friend, that there is a case which can be made—and the noble Lord, Lord Spens, did make it the other day at Question Time, and my noble friend Lord Boyd-Carpenter has made it before—for abolishing the wages councils. If you did that you would of course lower the rates which they set. If you lower the rates which they set, the inference is that more people will be employed. The danger of that is that there could be pressures on those people who are already employed, who would have the wages council rate fixing removed, to do the same work for less money. That may be desirable—it may be; I am not saying it is. The reason why the wages councils were set up in the first place was to stop just that. The only places where they are kept are where there is no other system of collective bargaining, and in places where the people involved are fairly diverse; they are also the lower forms of income group. Few of the adult rates exceed £58 per week, and that should be seen in the context of national average weekly earnings of £140 for men and £91 for women. They do refer to those who are at the lower end of the wage scale.
All I would say, as I said the other day to Lord Spens, is that there is an argument both ways, and the Government are not at present convinced that the argument for the abolition of wages councils is greater than the argument for their retention. There are at the moment very few wages councils in practice; they have been reduced a very great deal.
The noble Lord, Lord Spens, said that he wanted to see local authorities spend a 4p rate and not a 2p rate. Section 137 of the Local Government Act 1972 provides that a local authority may spend up to the product of a rate of 2p in any financial year for purposes which, in their opinion, are in the interests of their area or any part of it or all or some of its inhabitants. It does not exist to enable money to be spent by an authority where other statutory powers already exist. Apart from this restriction the power is a discretionary one, and it is up to each local authority to decide for

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itself how to use its power, subject of course to the need to justify its actions to the district auditor. The Government have no power to intervene in those decisions.
My Lords, in what, if I may say so, was a most interesting speech, the noble Baroness, Lady Seear, referred particularly to job sharing. I welcome the recognition that in general any action which is taken should not remove our competitive ability. The noble Baroness suggested that the sharing of jobs could provide a helpful way of reducing unemployment. It is certainly an interesting idea and I have no doubt that for some groups, such as young people, it could be useful. There are already examples of firms—and I think that GEC is one of them—which have taken on young people in this very way. It might also appeal to other workers who are near retirement, but I rather fancy that there may be problems over pension rights if that happens. However, there may be the possibility of those people being able to share work and where this can be done voluntarily and those involved are ready and prepared to live on lower wages it could prove attractive.
We should have to be very careful about waiving national insurance contributions in such cases given the public expenditure costs involved. I think that there must be some doubts about the scale of the potential for these arrangements. The Government's programme of special employment measures is kept under review and I assure your Lordships that this and any other suggestions from the Select Committee will be most carefully considered.
The noble Lord, Lord Roberthall, suggested that more money should be spent on apprenticeships. We are already providing £9.6 million in 1981–82 and £11 million in 1982–83. This will bring the total support to industry's long-term training needs in the current year to about £50 million. It would be wrong if we were to manoeuvre ourselves into taking steps which would damage our chances of recovery. It is absolutely vital to secure a future reduction in wage costs and inflation, which have shown a marked reduction over the last year. It is a long haul, but the encouraging signs cannot he denied. Unit wage costs have stabilised after the steep rises of the last few years. Manufacturing output rose by 1.5 per cent. in the third quarter of this year. Short-time working has fallen and overtime has increased. Unemployment has gone down marginally over the last two months, but I would make no great case over that—I merely state the fact. How soon real recovery comes will be bound to depend on world economic conditions. And unemployment will not come down properly until that recovery is established.
Of course, we should all like to see more jobs created now. But we need to have permanent viable jobs sustained by profits. There is no point in encouraging employers to take on workers whom they do not need. This merely adds to their costs and makes them uncompetitive. We must not, for sympathetic reasons, permit a return to overmanning and low productivity.
The startling fact is that by and large those countries who have adopted new technologies in the past and who have the most robots in their factories are the countries which have the lowest levels of unemployment.
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Why?—because they are competitive. That makes their goods required and when their goods are required that creates employment. The way to create the permanent, viable jobs which we need is not simply to encourage employers to take on more workers now, but rather to help them become more efficient, to help create the opportunities for profitable expansion and the opportunities for new businesses as recovery develops.
My noble friend Lord Massereene and Ferrard virtually clouted the right reverend Prelate the Bishop of Liverpool verbally for suggesting that he would like to see unemployment down to 1½ million. I thought that that was a very acceptable suggestion. Then my noble friend Lord Massereene and Ferrard went on to say that he would like to see interest rates lower. The very factors for which he was castigating the right reverend Prelate apply to his own arguments. Of course, everyone would like to see lower interest rates, but once you do that you then run into other fiscal problems. There must be a balance. While we need to make our industries more competitive, we also need to help, so far as we can, those who are worse affected by the ravages of recession, and to do so in a way which will better enable industry to exploit economic recovery. Training for both young people and adults is a high priority among our measures to encourage industry to become more competitive. The response to the Manpower Services Commission's consultative document A New Training Initiative indicated that there is considerable support for the objectives.
The noble Lord, Lord Spens, in his Motion calls on the Government to take positive steps. The noble Lord, Lord McCarthy, said that the Government always say that they are not responsible for unemployment or inflation and can do nothing about it. The Government can do things about it. I have explained some of the things that they have done. I shall also explain what we have done in the positive steps that we have taken, because they are positive. We have initiated the Business Start-up Scheme, to which my noble friend Lord Glenarthur so correctly referred, to encourage small businesses. That is only one, as he rightly said, of over 70 measures which the Government have taken since May 1979 to help small businesses. We started the Community Enterprise Programme for the long-term unemployed. That is taking £99 million of Government money this year. Then there is the Job Release Scheme to help people retire early in order to make way for the unemployed. That is costing £167 million this year. There is the Youth Opportunities Programme for the young unemployed, costing £414 million this year. On 4th January we are starting the Young Workers' Scheme which is expected to cost £60 million in the next financial year. There are other schemes too. So when the noble Lord, Lord McCarthy, says that the Government say that they cannot do anything about it, all I would tell your Lordships is that we shall be spending even more next year, a total of no less than £1.5 thousand million on these and other measures.
The Government are doing a great deal to help through temporary measures of support. But the long-term answer can only be to restore a sound economy which will give real and viable jobs—jobs which are there because the goods are wanted; jobs which are there because the goods are good; jobs which are

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there because the goods are available at the right time, at the right place and at the right price; and jobs which are there because the companies are successful and profitable. That is not political dogma: it is sheer basic commercial common sense. We have seen our competitors overtake us and take over our markets. It is this which we have to reverse. This commercial competitiveness is fundamental to the success of any company and fundamental to the success of the economy. The Government's policies are designed to achieve this, and I think that they will do so if we hold the course which we have set.
I merely thank your Lordships for the way in which we have had a debate on a highly sensitive subject which has been totally devoid of partisanship and which has been immensely constructive and helpful. I can assure your Lordships that we shall take note of all that has been said.
8.28 p.m.
Lord Spens: My Lords, it only remains for me to thank all of your Lordships who took part in this debate, which I believe has been extremely interesting. I should particularly like to thank the Minister for his remarks. He has obviously listened very carefully to what we have said and I am quite certain that he will get the Government to think again on some of the points and the very interesting new suggestions which have been put to him this evening. I do not wish to say much more, except to point out that I did not wish to imply in my own suggestions that I wanted to see employers getting into an overmanning situation again. No; what I am afraid of is that, as the recession turns—and I think it is about to turn—employers will not have the encouragement to carry out the expansion which will then be necessary for the increased demand which I hope will come along.
I should like to direct a few words to the noble Lord, Lord Glenarthur. He made a point about the Loan Guarantee Scheme, and I agree with him that it is being very successful. I am very glad to see that the Government have doubled the amount of money that they are putting into it. But I believe that the banks, which are now responsible for only 20 per cent. of the loan, are still applying their normal banking practice in deciding which businesses should be recommended to the Department of Industry to go ahead with using the guarantee scheme. I have in my possession some letters, which I do not propose to produce this evening, which tend to make me think that, unfortunately, that is still happening.
Finally, I must come back at the Minister about something he said concerning wages councils. He said that pressures might be put on employees to do the same work for less money. Surely, if that is going to happen, that is economic common sense. We must remember that the wages councils were set tip a long time before the welfare state came into existence, and that now there is no need for anyone to do any work for less money than they could receive by doing no work at all. Therefore, I do not believe that those pressures are important. My Lords, with that, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.