Lords Sitting of 24 February 1982

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

Developing Countries: Aid
Lord Oram: 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 initiatives they propose to follow up the discussion at Cancun last October.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, following the Cancun Summit we have been working to achieve a consensus on the launching of global negotiations at the United Nations. We have also ratified the Common Fund Agreement and, with our Community partners, are taking action to alleviate world hunger and to improve food production in developing countries.
Lord Oram: My Lords, I thank the Minister for that reply, but does he not realise that, apart from what he has just indicated to the House, the Government are completely failing to take essential initiatives in relation to developing countries? Instead, are not the Government really putting things in reverse by, for instance, refusing to restore the cuts in the aid programme and, more recently, drastically reducing the contribution to the International Development Association following the American decision in this matter; and has this not produced the mood of frustration and despair which is evident in the meeting now going on in Delhi of third world countries?
Lord Trefgarne: My Lords, I think it is too early to draw conclusions from the meeting in Delhi, to which the noble Lord refers. I think that meeting was taking place yesterday and today, and, naturally, I have not yet had any reports on what has transpired. It is strictly a meeting of the Group of 77, as they are called; and one of the things to which I hope they will apply themselves is a response to the recent American proposals for moving forward the global negotiations. But on the more general problem of our aid budget generally, we have nothing to be ashamed of in connection with the sums of money that we make available for this purpose. In 1982–83 they still exceed £1,000 million, which in our straitened circumstances is a very considerable achievement.
Lord Brockway: My Lords, in view of the fact that for nine years now there has been deadlock in the negotiations between the industrialised countries and the developing countries and there has been no agreement except the delayed agreement about the Common
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Fund, is it not time that we looked at this matter in a much more fundamental way in relation to the Brandt Report and the new international economic order which has been proposed by the Committee of 77, now a committee of 130?
Lord Trefgarne: My Lords, I do not agree at all that there is deadlock between North and South, as the noble Lord suggests. Many of the nations of the so-called North have substantial aid programmes, not least ours, to which I have already referred. A number of negotiations and discussions in various fora have made significant progress over the years, and all in all I think we have nothing of which to be ashamed.
Lord Brockway: But, my Lords, is it not the case that during this period literally hundreds of thousands of people have died from hunger in the third world countries, and that something much more fundamental than aid is necessary to solve the problem?
Lord Trefgarne: My Lords, the problem is not as simple, I think, as the noble Lord would have us believe. It was not long ago that the noble Lord was referring to, for example, the recent UNICEF report, which he drew to your Lordships' attention and which made one or two rather simplistic proposals to which the noble Lord referred. The problems are not by any means as simple as people would have us believe, and I think that the efforts which have been made by most, if not all, of the members of the so-called North bear close scrutiny.
Lord Cledwyn of Penrhos: My Lords, in view of what the noble Lord has just said about United Nations initiatives, will he say to what extent Her Majesty's Government support a policy of transferring third world problems, especially those involving trade and money, from United Nations agencies such as UNCTAD to other agencies such as the World Bank and the IMF? If in fact the Government support that policy, can the noble Lord say what the consequences would be for the poorer countries? For example, would he not agree that substantial loans to third world countries, which have no other source to go to but the IMF, might have very harsh conditions attached to them?
Lord Trefgarne: My Lords, all the specialised agencies have their role to play. There has been a good deal of discussion recently about the World Bank and the IMF, for example, to which the noble Lord referred. We think it would be a mistake to detract from the expertise which is available within those organisations by, for example, weighting the voting procedure in some way. It is important that the conditions which the IMF, for example, sometimes see fit to attach—in fact, always see fit to attach—to the facilities that they make available are carefully considered. Although I know there are sometimes moves by some of the third world countries to draw money from the IMF, for example, on less stringent conditions, I believe that the conditions they would seek to avoid are sometimes in their own interests.
Lord Oram: My Lords, of the institutions to which the Minister has referred, is not the International Development Association the one that is most helpful in offering soft loans to developing countries, and is it not therefore reprehensible that it is that organisation's funds which have so recently been savagely cut?
Lord Trefgarne: My Lords, I have not the precise figures in front of me in respect of the International Development Association, but it is of course the case that when money is made available through any medium on concessional terms the costs of providing those concessional terms have to fall on somebody.
Lord Hankey: My Lords, does the noble Lord agree that almost the best form of help to the third world is to hasten the recovery from the recession in the developed countries and to bring about an increase in world trade from which they would benefit? May we take it that the Government will continue to resist moves towards greater protectionism?
Lord Trefgarne: My Lords, the Government's views about free trade in the world are well known. I agree with the opinion of the noble Lord and also with his earlier view, that in the long term the future for these third world countries lies in the restoration of prosperity among the remainder of the world.
Baroness Gaitskell: My Lords, is it not true to say that it is not money that is the first principle to go for and that what the third world needs—and I have discovered this at various conferences I have attended—is the know-how, the scientific know-how, and information? That is what these countries need more than anything else. They usually pooh-pooh the idea of money alone.
Lord Trefgarne: I think, my Lords, that probably the truth lies somewhere between the two of those assertions. It is true that these countries can and do benefit from transfers of technology, but in some cases money is needed to exploit that technology.
Lord Glenamara: My Lords, will the noble Lord not agree that the best and the most immediate way of helping the underdeveloped countries would be to improve the efficiency and productivity of their agriculture? If they could achieve a quarter of the increases in productivity achieved in this country in recent years the problem of poverty in the underdeveloped countries would disappear.
Lord Trefgarne: My Lords, the noble Lord is quite right. An improvement in the efficiency of agriculture in the third world would go a long way to solving some of their problems. For that reason, an important part of our aid programme is directed towards that end.

The Spurstowe Terrace Assessment Centre
2.45 p.m.
Lord Gisborough: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
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In so doing, may I point out that where it reads "Springfield Terrace", it should read "Spurstowe Terrace"?
The Question was as follows:
To ask Her Majesty's Government what is the estimated weekly cost of keeping each girl in the Springfield Terrace Hackney Council home for girls.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton): My Lords, the Spurstowe Terrace Regional Assessment Centre is not yet in full operation but I am informed by the London Borough of Hackney that the cost of maintaining each girl accommodated there is likely to be in the region of £875 per week.
Lord Gisborough: My Lords, I thank my noble friend for that Answer, which works out at about ten times the cost of keeping a girl at the most expensive girls' school. Can my noble friend tell the House the proportion of cost attributed to salaries and employer's contributions and the proportion which is likely to contribute to central administration; that is, staff recruiting, training and so on?
Lord Elton: My Lords, as to the second part of the noble Lord's supplementary question, 55 per cent. of the estimated charge represents staff salaries and wages. A high staffing ratio is necessary in order to care for difficult and disturbed adolescents; 14 per cent. represents running costs; 5 per cent. represents administrative charges; a further 23 per cent. represents loan charges. These are particular to a newly-built home. Discounting these charges, the running costs for Spurstowe Terrace are very much in line with similar establishments in London.
Lord Wells-Pestell: My Lords, is the noble Lord in a position to tell the House what is the staff ratio? Is it 2:1, 3:1, or what?
Lord Elton: My Lords, I was there yesterday morning, but I regret that the number escapes me. It is around the norm; it is not exceptionally high. It may be as well to remind the House that this home is not simply for delinquent young people but also for young people in the care of the local authority who are in a very disturbed state, who are in danger of exploitation or incest, who have been abandoned by their families, who are disturbed and disruptive, although not delinquent and whose disturbance may manifest itself in suicidal tendencies. As to how much it is proper to spend on such cases, that is for consideration. In my view, it is not unreasonable to spend at least a little more on those who have reached such extremities of misfortune than on the generality of young people who are better placed in life. If we save their lives or keep them out of prison or borstal, the money is well spent.
Lord Kaldor: My Lords, would it not be more economical to send these Hackney girls to a type of institution like the Cheltenham Ladies' College?
Lord Elton: My Lords, I think that I would leave the governors and principal of Cheltenham Ladies' College to answer that supplementary question.
Baroness Platt of Writtle: My Lords, may I ask my noble friend if full advantage is being taken of such newer trends as intermediate treatment or a fostering unit such as that which has recently opened in Essex which might allow some girls—and I realise they are difficult girls—to have the opportunity of a proper family life and to have more chance to succeed, and which might be more economical'?
Lord Elton: My Lords, there is a place for fostering and for intermediate treatment, for family therapy and for other types of provision for disturbed or delinquent children. These facilities are directed towards children who cannot be catered for within that system. I should like to take the opportunity of saying that the borough takes advantage of a good relationship with voluntary agencies who also provide a range of facilities; but there are some people in a desperate plight who must be put into accommodation. The more recent accommodation carries a heavy debt charge; and that is why the London Children's Regional Planning Committee operates a pooling system whereby the charge to authorities placing a child there will be only £400 a week—because it is averaged out over the whole range of provisions.
Lord Avebury: My Lords, is it not a contravention of this House to ask Questions about matters that fall within the province of the local authorities? If it is now permissible for noble Lords to put Questions to Ministers, and to require answers about details of local authority expenditure in this manner, will there be an amendment to the Standing Orders so that we all know precisely where we stand on the matter?
Lord Elton: My Lords, while I take the drift of the noble Lord's question, I think it is perhaps misdirected. The Question is directed at an establishment of which the whole of the cost originally was subject to loan sanction from central Government and on which a proportion is subject to 100 per cent. grant. I am referring to the secure accommodation within it. I have taken the opportunity—and I hope your Lordships will forgive me for so doing—of trying to throw a little light on the general problem faced by all authorities over which this Government presides, and to show that what is being done is not quite so "scatter cash"as people would sometimes think it was.
Lord Davies of Leek: My Lords, is the noble Lord aware that some of us believe that the distress, the psychological and mental disturbance of many of these young people, like these girls at this school, is one of the factors of the society in which we live, and therefore none of us object to Government expenditure in trying to restore these poor creatures to a modern kind of life where they can live as decent citizens in society? Finally, would he realise that this gang of kiddies eight and nine years old are creatures of the circumstances of this world today, and money spent on restoring these people is money well spent?
Lord Elton: My Lords, I am grateful to the noble Lord for his intervention. At the same time, I should say that my noble friend is quite right to see that the money is properly spent and it is a proper Question to ask.
The Earl of Onslow: My Lords, is my noble friend aware that many of us have been very impressed by the obvious feeling that he has given to his Answer? But it seems very odd when he said—
Several noble Lords: "Is the noble Lord aware?"
The Earl of Onslow: When he said £120 a week is spent on looking after these children, excluding staff fees, it does seem a very high—
Several noble Lords: Order!
The Earl of Onslow: If the noble Lord reads my question in Hansard he will find that there is a question mark at the end of it. My Lords, is the noble Lord the Minister not aware that some of us find £120 a week per person, excluding staff fees, is a very high amount to be spent? Nobody is querying—is he not aware?—that the care is quite right and absolutely correct, but is the administration as sound as the care?
Lord Elton: My Lords, I am now placed in the difficulty that the noble Lord, Lord Avebury, pointed out. My impression from a visit, from reading the papers connected with the case, seeing some of the children in the classroom there and talking to the staff is that the work is invaluable. It is not merely assessment but also treatment. It will benefit society. Also, my impression is that the local authority is very well aware of the shortage of resources and of the need to administer its functions as efficiently and cheaply as possible.
Baroness Faithfull: My Lords, would the Minister not agree that it is very sad that these children should be as they are at this age? Should we not look at our preventive services and help these children at a much earlier age so that this situation does not arise in adolescence?
Lord Elton: Indeed, my Lords; and we are so doing.
Lord Gisborough: My Lords, will my noble friend answer one more question? Will he explain the anomaly that apparently exists when this centre is being opened and at least one other is being closed, and that the places available have been apparently under-used throughout the past year to the extent of 51 places being taken up when 97 places are available?
Lord Elton: My Lords, the overall provision is, notwithstanding what the noble Lord has said, below what is regarded as the level of need. Individual institutions may fall out-of-date and need replacement. If all of them were to operate at 100 per cent. occupancy, there would be no accommodation at all for the emergency cases which so frequently characterise the work being done by the people in the institutions.

Industry: Manufacturing Advisory Service
2.55 p.m.
Lord Monk Bretton: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the operation of the manufacturing advisory service of the Department of Industry.
Lord Cullen of Ashbourne: My Lords, the manufacturing advisory service for small and medium sized engineering firms has been operating for four and a half years. Over this period Her Majesty's Government have been very satisfied with the operation and achievements of the service. Its continuation for a further four years from 1982 was recently announced.
Lord Monk Bretton: My Lords, I thank my noble friend for that reply. May I ask him for a few figures. First, what is the present size of the establishment of the service? What is its current annual gross cost and its net cost after recovery of consultancy fees? I should also like to ask: What attempts have been made to estimate the benefit of the service, and by whom?
Lord Cullen of Ashbourne: My Lords, the manufacturing advisory service is operated on behalf of the Department of Industry by the Production Engineering Research Association. Five PERA staff are employed full-time on MAS and there are about 20 retired industrialists working part-time to introduce the service. The expenditure on MAS is about £3 million a year. I think I have answered all my noble friend's questions.
Lord Davies of Leek: My Lords, is the noble Lord aware of the figures that I was given, that some 2,000 small firms have been helped by this organisation, which was established in 1977, and that some £90 million has thereby been saved or helped along through this small businesses organisation? Will the noble Lord tell me whether this organisation, whose work from Melton Mowbray is increasing, will be now kept in being? Finally, as a crack, I see that one of its scientific helps for small firms is tribology, which is the friction of moving things on surfaces, giving luminescence but not very illuminating.
Lord Cullen of Ashbourne: My Lords, I confirm the figures that the noble Lord has mentioned. During the course of the time that MAS has been operating, the cost has been about £9 million and the benefits are understood to be between £80 million and £90 million.
Lord Inglewood: My Lords, could my noble friend tell us approximately what is a "small firm" and what is a "medium sized firm" under consideration here?
Lord Cullen of Ashbourne: My Lords, I do not think I need tell the noble Lord what a small firm is; but the
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firms which apply for this service are employees of from 60 to 1,000 people.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the true role of the production engineer in the United Kingdom is not as well appreciated as it is on the Continent? Will he seek all possible means to promote the use of production engineers, not merely within the limited sphere envisaged in the Question but also by larger firms as well?
Lord Cullen of Ashbourne: My Lords, I shall certainly pass on the noble Lord's continents to my right honourable friend. Very good work is done by this service. I understand that 94 per cent. of the 2,600 firms that have used the service are fairly satisfied and 75 per cent. are well satisfied.
The Earl of Lauderdale: My Lords, can my noble friend say what is the proportion of the gross cost which is recovered in consultancy fees?
Lord Cullen of Ashbourne: My Lords, to quote my noble friend Lord Cockfield, "it does not work that way". What happens in this case is that the applicant can get 15 man days' free service. After that, he can get another 15 man days' service. The applicant will pay half the cost and the other cost will be subsidised.
Earl De La Warr: My Lords, can my noble friend say what criteria are used, if any, to check that an applicant company is admissible for this assistance, in view of the fact that, as he has said, it is subsidised by the Government?
Lord Cullen of Ashbourne: My Lords, I do not think I can say that. So far as I know, this subsidised service is available to all engineering companies whose employees number from 60 to 1,000.
Lord Reilly: My Lords, if this MAS is offered free of cost to small firms, may I ask why the Design Council's design advisory service is charged for? In other words, is the product not as important as its production?
Lord Cullen of Ashbourne: My Lords, I apologise to the noble Lord: I could not quite hear what he said.
Lord Reilly: My Lords, may I say that the Design Council's design advisory service, as the Minister will be aware, is also a dependency of the Department of Industry? Why is that service charged for whereas the manufacturing advisory service is not charged for?
Lord Cullen of Ashbourne: My Lords, I wish I could answer the noble Lord, but I am afraid I cannot.
Lord Gridley: My Lords, may I ask my noble friend whether he can confirm that in 1980–81 870 companies were visited by the advisory service and 700 projects where advice was given were completed?
Lord Cullen of Ashbourne: My Lords, the noble Lord has sonic figures which I do not have; I am sorry.

Gatwick: Runways
3.2 p.m.
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the evidence given by the civil aviation policy division of the Department of Trade to the Stansted Airport Inquiry that there are considerable environmental advantages for local communities in a "two-runway situation" they are prepared to reconsider the desirability of installing a second runway at Gatwick airport.
Lord Trefgarne: My Lords, the Government took account of all the relevant factors, including environmental considerations, in reaching their decision not to pursue the possibility of a second runway at Gatwick.
Baroness Burton of Coventry: My Lords, may I ask the noble Lord whether he is aware that it was the assistant secretary of the airports branch who gave this evidence? May I ask the Minister whether he has in his brief a copy of that day's proceedings at the inquiry now being held over the matter of Stansted? If so, is he aware that, referring to the second runway, the assistant secretary said:
"… this was one of the few advantages that Heathrow had over Gatwick as the local residents were given relief by the alteration of runway movements"?
Whatever the Government have decided, is the Minister not aware that the airlines have wanted for some long time, and want at present, the establishment of a second runway? We are really wondering what is the use of making protestations to the Government and to the British Airports Authority when the actual users of what would be the second runway are completely ignored.
Lord Trefgarne: My Lords, the noble Baroness has quoted very selectively from the evidence. I would refer her to the sentence before the one that she read out.
Baroness Burton of Coventry: My Lords, is the Minister aware that I resent that? I have the whole of the evidence in front of me, but I will not weary the House with it. May I ask the Minister whether he will answer my question? Is he aware that, quite apart from the second runway, there is real disquiet in the civil aviation industry over what I would term, perhaps hesitatingly, the arrogance of the British Airports Authority, which refuses to take into consideration the views of the airlines who themselves are the users of the airport?
Lord Trefgarne: My Lords, of course we have taken into account the views of the airlines in this matter. I was myself at one time an airline operator out of Gatwick and am well aware of the operational advantages that might flow from a second runway there. I am, however, persuaded by the arguments that lead
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in the other direction. A second runway at Gatwick, if constructed, would have to be 2½ kilometres or thereabouts to the north of the existing runway and the take-off path to the east would be right over the town of Horley.
Lord Nugent of Guildford: My Lords, is my noble friend aware that there are very solid commitments to the neighbouring county councils that there will not be a second runway at Gatwick?
Lord Trefgarne: My Lords, I am aware of the commitments to which the noble Lord refers. Indeed, I remember discussing that matter in some detail in your Lordships' House at the time the undertakings were given, I think, by the British Airports Authority to the neighbouring authorities. The Government in fact were not a party to those undertakings, but they nonetheless came to the view that a second runway at Gatwick would not mean the best use of the funds available.
Baroness Burton of Coventry: My Lords, while not claiming to be a former pilot, but only a nuisance, may I pursue this matter? May I ask the noble Lord whether, while I appreciate the interest and knowledge of the noble Lord, Lord Nugent of Guildford, in environmental matters, there is another aspect? Is it of the slightest use people who feel differently from this trying to pursue the matter in the hope that the Government might change their minds? Referring to the guarantees given previously, is the Minister aware that, as I understand it, these were given to the Members of Parliament whose constituencies surrounded Gatwick Airport? Is it not time that we had another look at it in the light of present-day conditions?
Lord Trefgarne: My Lords, I think that my noble friend was referring to the undertakings given at one time by the British Airports Authority to the local planning authorities who are responsible for the country surrounding Gatwick Airport in connection with a second runway. As I said, the Government were not a party to those undertakings but were aware of them. It was other matters that drew us to the conclusion that a second runway at Gatwick would not be appropriate. As to not taking into account the views of people who take a contrary position, it seems to me that people get particularly incensed when their view does not prevail, but they do not always have right entirely on their side.
Lord Harvey of Prestbury: My Lords, if it were agreed to build a second runway at Gatwick, would it not mean demolishing the cargo buildings which were put up only five years ago? Further, is my noble friend aware it is generally thought that these buildings were constructed so that a second runway could not be made?
Lord Trefgarne: My Lords, that is an interesting thought, but the fact is that a second runway at Gatwick to be of any value would have to be constructed, as I said, about 2½ kilometres north of the existing runway, and that would mean that the easterly take-off path was right over the centre of the town of

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Horley while the westerly take-off path would be right over the village of Charlwood. In addition, it would necessitate many thousands of acres being acquired by the British Airports Authority for that purpose and doubtless would involve the destruction of a large number of buildings.
Lord Beswick: My Lords, is the noble Lord aware, as one who had something to do with the original choice of Gatwick, that the solid commitments given to the local community at Gatwick caused one of the biggest single mistakes that have been made in aviation? It was sensible to have two runways at Gatwick, and it would be a great achievement if we could still go back to the original two-runway conception.
Lord Trefgarne: My Lords, the Government have to take decisions in these matters, as the noble Lord well knows, in the light of all the arguments advanced. Certainly there would be some operational advantages to Gatwick if a second runway could be made. As I said, it would need to be made a minimum distance from the existing runway, and the cost, for example, in terms of the environment, not to mention money, would be very substantial. We came to the conclusion, which I believe was the right one, that the balance of advantage lay in other directions.
Lord Denham: My Lords, I know that the noble Lord, Lord Jenkins of Putney, has been trying to speak on this Question for some time. As we have now spent 32 minutes on four Starred Questions, your Lordships may feel that, after the noble Lord, Lord Jenkins of Putney, has put his question and my noble friend has answered it, we should pass on.
Lord Jenkins of Putney: My Lords, I am grateful to the noble Lord. Is the Minister aware that, whether by a second runway at Gatwick or by the development of Stansted, some relief is needed by the millions of people under the flight paths at Heathrow? The degree of nuisance which is suffered by those who live under the flight paths at Heathrow is so great that some relief of one sort or another is urgently necessary.
Lord Trefgarne: My Lords, the Government take the view that there is a maximum environmental price to be paid at Heathrow which should not be exceeded. It was for that reason that my right honourable friends, when they granted permission for the fourth terminal at Heathrow, imposed a total maximum number of air transport movements at Heathrow of 275,000.

Dinner
Lord Denham: My Lords, it may be for the convenience of the House, and perhaps for the relief of your Lordships, if I now announce that dinner will be available tomorrow evening.

Housing in Rural Areas
3.10 p.m.
Lord Hyltonrose to call attention to the Report on Rural Housing published by the National Federation of Housing Associations, and to possible solutions for the grave housing difficulties of many villages; and to move for Papers.
The noble Lord said: My Lords, today is a day of penance, when perhaps we should be fasting, if not wearing sackcloth and ashes. However, I rejoice in the luck of the ballot and I feel it is a privilege to open this debate in your Lordships' House, which has such a very great fund of experience on all rural matters. The report that we are discussing today was commissioned by the National Federation of Housing Associations, when that body became aware that the great bulk of its work had taken place in towns, and that the rural housing associations were, one might say, almost the Cinderellas of the movement. The federation, and I am sure your Lordships, too, will be extremely grateful to His Royal Highness the Duke of Edinburgh, who not only consented to be chairman of the working party which produced the report, but also wrote the foreword to it and presided at the launching meeting last November at the Royal Society of Arts.
The working party of 12 included representatives of the Housing Corporation, the National Council for Voluntary Organisations, the Country Landowners' Association and the Dorset County Council. It heard evidence from many organisations and individuals, including the National Farmers' Union, the National Union of Agricultural Workers and the National Federation of Women's Institutes.
I should perhaps declare some slight personal interest, in that I was a member of the working party and that I am still chairman of a rural housing association—one of those quoted in Chapter 5 of the report. I do not, however, wish to speak on a personal or a local note. I shall try instead to sketch in the national scene for England, in the hope that subsequent speakers will fill in the detail with graphic instances from their various and widely scattered counties.
The report touches on the national background and on the rural context. It describes rural housing problems and their resulting unfortunate human consequences. It concludes by suggesting four possible lines of remedy. The national background covers, of course, the housing and planning legislation since 1914, and it highlights the many current anomalies due in part, I know, to inflation and high interest rates. The chapter on the rural context points out very clearly how housing cannot be seen in isolation. Employment, transport and services are so closely bound together, and so intimately connected with it, that they must be seen with it.
Whether or not people wish to live in a particular village depends, I believe, in very large measure on the survival of what have been described as the "five Ps". These are the parson, the pub, the post office, the primary school and the petrol pump. If there are too few houses in a particular village, or only luxury houses, these five essential Ps will crumble away for lack of custom.

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What, then, are the specific rural housing problems? Several are, I think, quite common. Planning controls are more restrictive in the countryside than in towns, and therefore one is faced with the problem of scarcity value, both for existing sites and for existing houses. Private renting has declined dramatically and the supply of tied houses in the country has decreased in parallel with fewer jobs in agriculture. In the countryside, there are proportionately fewer council houses than in towns, and the high cost of providing houses in small batches has made it more difficult both for local authorities and for housing associations to provide extra houses for rent. Private development has tended to make provision mainly for retired and richer people, who are usually in a position to outbid local workers. In many villages, no new development has been possible, because water authorities have not been able to provide sewers or mains water supplies.
These difficulties lead, as I indicated, to consequences that can be very serious and sometimes even tragic. In some rural areas, there is a floating population of adults, engaged and married couples, cramped up with their parents or parents-in-law. They sometimes find refuge in caravans or in temporary holiday lettings. In all these cases, they have no security of tenure. Other young couples, even those with jobs, who wish to live in villages can find no council house or they cannot afford to buy at the current level of village house prices. Meanwhile, at the other end of the age range, there is an ageing population often living in houses too large for them, who need smaller and more manageable premises with, if possible, a warden service or some other form of help in case of emergency.
Against this gloomy background, what possibilities can we see? The report identifies four in particular. There is, first, the role of the statutory authorities; secondly, there is the need to preserve the existing rented housing; thirdly, there is a great need, I suggest, to harness all the available local human resources; and, finally, there is the question of finance. I should like to spend a moment on each of these.
I think it is true to say that rural housing problems are much less obvious than urban ones. It is, therefore, of vital importance that central Government should recognise the need of villages and ensure that these have a proper priority. It is equally desirable that county councils, as planning authorities, should positively favour well-designed new building in villages, and should co-ordinate planning with their other roles in support of schools and employment. District councils should bring together all the necessary local services, especially those of the water authorities. Districts should build some new houses outside towns and, with the Housing Corporation should join in providing loans for housing associations.
As I mentioned, the pool of private rented houses has shrunk considerably and it is of prime importance that we should keep what is left. Housing associations sometimes provide a means of doing this. The admirable North Wiltshire scheme has shown how district councils can provide effective help. This scheme has been mentioned before in your Lordships' House, and I have today put down a Question for Written Answer to ask about its progress.
At this point, I should like to try to enlarge our
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conventional thinking. It seems to me that big resources exist in the countryside which are more or less untapped. I mean by that, resources of human energy lying in such bodies as parish councils and other local voluntary organisations, and in individuals who are concerned with the vitality and continuity of villages and local communities. These are the kind of people who should be studying the local situation. They should be urging on the authorities. They should be taking initiatives themselves. These are the kind of leaders who should form local housing associations, and secure the help of regional and national housing associations for building schemes in villages. This will, of course, be hard work, but surely it is better than sitting by the television and merely grumbling.
I want to digress for a moment at this point to mention a very useful folder entitled Rural Housing Initiatives, by Mr. David Clark and published by the National Council for Voluntary Organisations. There is another kit, entitled Village Action, which includes a section on housing, published by the National Extension College. I hope that both of these documents will soon be placed in your Lordships' Library. I suggest that they will be very useful for stimulating local initiative.
I come now to the inescapable question of money: how can new houses and improved older buildings be financed? The rural homeless, the unemployed and the aged poor have already been mentioned. These people cannot possibly buy their own homes. They are therefore compelled to rent. It seems to me therefore that housing authorities and housing associations must provide for them by conventional methods. Many people in these categories have very strong roots in the country and it would be quite wrong, in my view, that they should be willy-nilly herded into the towns.
Young couples with jobs and elderly owner-occupiers, on the other hand, are in a quite different situation. The old person with a house to sell is an obvious candidate for a new form of ownership known as leasehold for the elderly. Already I believe that some 300 flats and bungalows have been produced by this means. Young couples and first-time buyers may have a good income but not a sufficient one to buy at the current price of houses in villages.
How can the house and the finance be tailored to suit their requirements? The report clearly outlines the concept of shared ownership. I will not describe this in detail. It is proposed that it should use a mixture of building society finance and other institutional funds. Similar methods have already been tested in some 500 publicly-funded equity sharing houses. The new method proposed by the National Federation of Housing Associations uses little or no public money, but the federation is extremely grateful to the Development Commission for agreeing to prime the pump on the first 100 houses of this sort. The federation hopes to launch a new investment vehicle, with pension funds and other organisations, during the coming year. To sum up on finance, we propose a combination of new and traditional methods.
I conclude by asking Her Majesty's Government a number of questions, of which I have given notice. Will the Government modify their priority guidelines for housing which they lay down both for local authori-

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ties and for the Housing Corporation? Will they recognise the urgency of rural housing problems and will they put some strong emphasis on their solution? What plans have the Government in mind for the 28 per cent. of all unfit houses in Britain which are to be found in the rural areas? Am I right in thinking that something like one-half of the existing agricultural workers are now aged 50 or more and that some 50,000 of them are likely to retire within the next 12 years? What thought is being given to this kind of problem? And is the Department of the Environment in consultation with the Department of Health and Social Security? Is Marsham Street in correspondence with the Elephant and Castle?
These are important questions, and I am sure that the noble Lord who is to reply will give me helpful answers. I should like if possible, however, to draw him out a little further and ask whether the Government are sympathetic to the report; do they welcome it and will they go further and act upon it? I very much hope that this will be the case. I commend the report to your Lordships' House and beg to move for Papers.
3.25 p.m.
Lord Beaumont of Whitley: My Lords, the whole House will be genuinely grateful to the noble Lord, Lord Hylton, for having raised this matter today in the House. It is a matter upon which, between them, noble Lords have a large amount of expertise. We certainly look forward to some of the contributions which we shall hear in the course of the next couple of hours. The noble Lord, Lord Hylton, was extremely careful in his use of the time available in a limited debate such as this. For that we are partly grateful to him—for leaving us more time—and partly sorry for not having heard him at rather greater length.
That there is a need for rural housing is, I think, no longer seriously in doubt. The need is made up of several strands. First, there is the need for housing for those who live there. Some of this need is apparent (it is on the surface) while some of it is not all that easy to see and is not necessarily noticeable until you start looking. Some people, and some local councils, have not looked as deeply as they may. The problem, quite often, is that there is over-housing and under-housing and that, because of the lack of fluidity in the housing market in rural areas, it is not always easy to adjust the amount of demand to the amount of supply.
May I give one example. It is the only part of my speech where I shall be reading from a brief. I shall read from the admirable series of briefings prepared by David Clark of the NCVO. They have already been alluded to, and they are particularly interesting on the question of concealed demand. In 1976, the council of Uldale responded to a request from one parish, Caldbeck, on the edge of the national park to build council houses there. There were no names on the list, since there were no council houses, but the council agreed to build new units without a list. This news produced for the first time a waiting list. Immediately the supply was announced the list appeared. In the event, the council allocated all the tenancies to people from Caldbeck. There was no need to let them to incomers, and four of the applicants were the most deserving the council had had for some time. There is now a waiting list at Caldbeck. With four
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houses filled a waiting list appears—and all in a village where there was no record of a demand for housing.
I have no doubt that that experience can be repeated in various places all over Britain. So there is a very real demand. There is also a growing demand, I am glad to say, from people who want to live in the countryside. There is the beginning of a return to the countryside. All of us who want there to be a thriving rural economy, with the basic services to which the noble Lord, Lord Hylton, referred, and villages of a size and of a thriving nature which can support those services, will be delighted that there is an incoming element into the countryside.
One of the factors involved, and something which puts pressure on the market, is the demand for second homes. This is a problem. My party has very strong views about this particular problem. It does suggest that there should be planning permission introduced for people intending to use a house as a second home. I do not believe there would be very much difficulty in doing this; a change of use would be counted as a change of use if one wanted to live in a place when one already had a house of one's own elsewhere. There are, of course, other ways of dealing with that. We were discussing the other day devolution to the countryside, where one paid for the services of local councils. I can think of few better sources of tax than a fairly high tax on second homes, which would finance the money needed to build other houses.
All these pressures are on the not very large housing stock. They are healthy pressures; they are pressures which we should be pleased are there and not deplore them, because as I have already said, it is essential that we have a thriving countryside and communities which can support the services which are needed. Many different schemes have been produced, some of which have already been quoted in this debate by the noble Lord, Lord Hylton; no doubt other schemes will be quoted by other Lords. Great ingenuity has been shown in finding ways of producing housing of the kind needed for the people who are there, at prices which they can afford. There have been admirable self-build schemes in different parts of the country and, through Section 52 restrictive covenants, there are efforts to restrict the occupancy of certain houses to people who genuinely live and work in the country. There are also the very ingenious and good schemes of short lets through local councils, which are not long-term solutions but which lift the pressure that exists on housing stocks. The point that I want to make from this Front Bench this afternoon is that many of the schemes are, or should be, unnecessary ways of trying to get around obstacles which ought not to be there in the first place. There are two real problems about rural housing and neither of them has a deep seat in the countryside, but both have a deep seat in No. 10 Downing Street.
The first is the Government's financial policy, which has led to the undesirable situation that almost all housing in the countryside and elsewhere has been frozen. This must be a nonsense. It is appalling how often one gets led back to the Government's financial policy in practically every debate that comes before this House. It is no accident that one gets led back because the policy is one that does not allow us to put our resources into the creation of new wealth

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(and housing is new wealth) and the maintenance of old wealth (and the houses which are already there are old wealth). It must be a terrible policy and one that does harm in every single facet of the nation's life.
Secondly, and lastly, I should like to stress the importance that my party places on the concept of devolution. A great deal of what we see being done by councils in order to get round problems is something that they ought to be able to do absolutely freely and off their own bat. We must give local government a very great deal more power than it has at the moment. A local government which is responsible to its electorate should not be shackled in the way that it is. I do not have time to go into detail, but one particular example I must mention is the option as to whether to sell council houses. It is monstrous that local councils which can provide houses and housing for people living locally at prices which they can afford are being forced to sell houses to sitting occupants, often at very low—not to mention ridiculous—rates. There certainly ought to be local option in that area, and that is only one of the many areas, I believe, where we ought to set the local government of this country free.
I believe we are going to see a revival of the countryside. That revival is already beginning. What must we do to ensure that that happens? There are signs that it is happening. There is this debate this afternoon, for which many noble Lords have put down their names to speak. There are various bodies, such as those mentioned by the noble Lord, Lord Hylton, which have produced schemes and got themselves involved. There are signs everywhere that there is a movement back to the country and towards the re-establishment of true wealth in the countryside. We must not let that be in any way stopped or shackled by a primarily urban Government. When I use the term "urban Government" I am not getting at the present Conservative Government, because any Government in this country, by the very nature of our population and the make-up of our constituencies, is primarily an urban Government. It is up to urban Governments to care for minority interests, and the minority interests in the countryside in particular, because it is there so often that we will find a great deal of the real help and background that we need for our national life.
3.37 p.m.
Lord Swinfen: My Lords, I too should like to join the noble Lord, Lord Beaumont of Whitley, in thanking the noble Lord, Lord Hylton, for introducing this debate. Rural housing is, and has been for some time, an extremely important subject. However, I would take issue with the noble Lord, Lord Beaumont of Whitley, in that I personally do not believe that the present Government's financial policy has caused the problem; the problem was there a long time before the Conservatives came to power, and I am glad to see that the noble Lord is nodding his head in agreement with me. The noble Lord also mentioned the great shortage in the country of houses to rent. I believe that is primarily caused, as in the towns and cities, by the rent Acts of previous socialist Governments.
In my view, the rural housing problem could be show-
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ing just the tip of the iceberg at the moment. In the not too distant future, although possibly not immediately foreseeable, the very rapid change in modern communications will mean that vast numbers of people who have to work in the cities today will be able to live and work in the country, which is a very much more pleasant place. This will increase demand on country houses and cottages, and also on the services which have to be provided. As a result, the price of buying a house in the country will be put even higher in comparison with buying a house in town, at today's figures. With the technology we have already, I believe that the whole of the Stock Exchange, the insurance business and possibly the Baltic Exchange could quite easily work outside London, connected by telephone lines and teleprinters and various forms of telecommunications.
I think at this stage it is up to the Department of the Environment and the local authorities to look at the planning position in a very positive manner. I always get the impression that when someone applies for planning permission in the country or in a village he receives an almost automatic refusal in the first instance. What I should like to see is the local authorities going round their villages and earmarking space for future development, possibly over a timed period, such and such a piece of land within the next five years, others within 10 to 15 years, but doing it in very much greater detail than is being done at the moment.
I think we also have a reserve of land available for housing in the country that is outside the villages, not necessarily in the open spaces but in and around the farm buildings and farmyards that already exist. There are amalgamations taking place throughout the country of agricultural holdings, leaving a surplus of farm buildings that are not required for the economic running of the holding. Sometimes it is too expensive for the freeholder physically to move his buildings or to erect sufficient new buildings at a central position to give a set of farm buildings that happens to be relatively central to his holding. If he could move his centre of operations to one point this would very often make for an economically more profitable holding. It would also leave areas or pockets in the countryside currently covered by buildings that could be converted, and where there are spaces in between the buildings, not just for conversion but for what in a village or town would be known as in-fill.
If you have a building in the country that is of architectural merit and is not being used for any purpose, you can get permission with some difficulty to get a change of use to residential. But I think that we must also look at those buildings that are not of architectural merit, because they can be used. As far as the problem of water and sewage is concerned, very often farms have their own method of disposing of sewage laid on. It may need improvement, but that is not too difficult to do, and they have of course got water there already.
With regard to finance, which is not really my subject, I was very interested to see the North Wiltshire scheme in the report, and hope this will spread to more areas of the country and that a number of local authorities will take it up. One of the major problems in rural areas is that incomes are very often considerably

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lower than in the urban areas. It is, therefore, a great deal more difficult for young married couples starting out on life to get a mortgage that they can afford to pay for. I should therefore like to see an increase in the shared ownership and deferred purchase schemes.
3.44 p.m.
The Lord Bishop of Hereford: My Lords, I welcome this report and hope that it will be very widely read and studied. There are just two points that I would like to make. The first is to bring to your Lordships' notice the difficulties that the small rural housing associations are experiencing in attracting grants and support for their projects. Here I must declare an interest, as my diocesan council for social action set up our own housing association some years ago.
Your Lordships will be aware that human need is relative. The effect of unemployment on six school-leavers living in a small close community of 300 people is likely to be greater than that on their counterparts living in an urban situation. The effect of being homeless or unable to rent or buy your first home in a community in which you have been born and bred, where you are related to almost everybody in it, and which you have no wish to leave, is likely to be devastating both on an early marriage and also on the life of the community which you are about to leave. It is the departure of our young married couples who cannot get housed which is one of the greatest concerns to us in rural dioceses and rural areas at the present time.
"Rural deprivation" is a somewhat hackneyed term, but it is nonetheless real. Most of our villages have large properties, such as parsonage houses, which are too large for the incumbent these days. These could be converted into sheltered housing or flats to accommodate the single homeless. In Hereford itself at the moment such groups—namely, the elderly and the single homeless—have to wait something in excess of three years before they can be housed, but their situation could be greatly relieved if it were possible for the small rural housing association to operate.
Land is also available, for most of these large parsonage houses have glebe attached to them or glebe situated within or just outside the village. The Church Commissioners give very sympathetic consideration to applications from housing associations who wish to use that property or that land for developments of this kind. But the housing associations are so often frustrated by the powerful conservationist lobby, who, in seeking to preserve the past, actually work against the needs of the rural communities in the present, and who at the same time are leaving, I believe, little hope for the quality of rural life in the future. In the face of such powerful lobbies local authorities are very reluctant to make grants. As the noble Lord, Lord Swinfen, said, the first application is almost always automatically turned down. I am glad to see that in the report this particular point of conservation and the difficulties experienced in trying to get projects off the ground is brought out early, on page 2 at paragraph b.
As a result, it seems certain that the smaller housing associations will have to merge with the larger bodies. Although it may bring increased efficiency in some areas, it will be at the expense of voluntary housing involvement which forms a great feature of our local housing associations. Local involvement and local
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interest is one of the marks of the small housing associations, where much of the help given is voluntary, although it is often given by those who have great expertise in their various areas. The great fear of small associations merging with larger associations is that there will be a greater emphasis on projects in the larger centres of population. No elderly person, nor indeed a newly married couple, wishes to move away from the community in which they have been born and bred, to whom they are related, where they have lived all their lives, or where their work may actually be. In Hereford and the border country, as in most really rural areas—and we are not a commuter area—to move five miles from your village, or even 10 miles, is to move into foreign country, and it is not acceptable to those who are looking for housing at the present time.
I am grateful for some of the possible solutions that the report gives which I believe will be very relevant in helping in the situation in which we find ourselves at present. There is, however, one omission in the report which I greatly regret. No mention is made of the needs of the gypsy population, who are perhaps the most misunderstood and deprived of all ethnic minorities in our country at present and who are resident in all our rural areas.
Your Lordships will be aware that it is important to differentiate between the gypsies and other itinerant groups such as tinkers, the Midland Irish or showmen. As in all rural areas, we have a number of gypsy families who were born in the country and whose families have lived there for generations. In Hereford there are some 58 such families who are continually harassed, moved on and ostracised, to the great harm of their family life, the education of their children and their distinctive culture. It was, for instance, to some of those families who lived on Weobley Common that Vaughan Williams turned when he went to find the traditional folk tunes and songs of England.
The provision of permanent sites for this underprivileged minority in our rural communities is urgent. Efforts to obtain them are frustrated, for many of the reasons that I have indicated, in the provision of housing in our rural areas. I hope that in any future report on rural housing or rural communities the needs of the gypsies, this underprivileged community, will not be overlooked.
3.52 p.m.
Lord John-Mackie: My Lords, 21 years ago in another place I initiated a debate on urban housing and took the then Government to task about their lack of a programme. The then Minister of Housing, now Lord Hill of Luton, very kindly came down on a Friday to reply to the debate, but he was slightly taken aback when I suggested to him that he might do better driving a bulldozer pushing Cable Street into the Thames. Here I am, 21 years later, taking part in a debate on rural housing in which I, of course, have a great interest.
I am very much obliged, as I am sure we all are, to the noble Lord, Lord Hylton, for initiating this debate, and I must congratulate him not only on what he said and on what is in the report, but on the delightful way in which it is laid out—the printing, the photographs and so on. It is a very good report indeed, and we are most grateful to the noble Lord. Unfortunately,

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I have been away for a fortnight and I only managed to get hold of a copy at lunchtime—the only copy in the Library today—and I have had to scan it rather quickly. Nevertheless, I thought that it was first class.
I was interested in the noble Lord's "five Ps" which he said were essential for village life. I would not like to be invidious and choose which of them is the most important, but we all know that the post office in the village is usually in the general merchant shop. The late Gordon Selfridge was shooting in Tomintoul and while in the hotel he began talking to a local shopkeeper. The local shopkeeper, discovering that he sold the same goods as he did, said to him, "Of course you will have the post office". Gordon Selfridge said, "Good Lord, what would I do with a post office?" The man said, "Oh, it is no use without a post office". One of the essential things about a village is the noble Lord's "five Ps", including the post office, although I am, perhaps, not putting it first.
The noble Lord made a very strong point when he said that we could not consider rural housing in isolation: it is tied up with many other rural matters. That was a good point. The noble Lord mentioned the high cost of small groups of houses. I was surprised that the noble Lord made this point because I would have thought that with local tradesmen, self-employed tradesmen, in rural areas one could build houses cheaper than one can in a town, with the enormous expense involved there. But perhaps the noble Lord has some proof that that is not the case. Anyway, I thought that it was a point which would be difficult to prove.
Over the last 50 years I have built, on the farms which I have farmed, 17 new houses and I have renovated 26—that is, putting in bathrooms, electricity and all the necessary modern things. I thought that I had finished when my youngest son came to me the other day and said: "Dad, we shall need to start putting central heating into all our houses". We started to do that to one of the houses and I discovered that to put central heating into a three-bedroomed house cost twice as much as it cost to build the first two houses which I built 40 years ago. Therefore, I am afraid that I shall be starting all over again.
I should like to make two points, one of which has already been mentioned by the noble Lord, Lord Swinfen, and it concerns the gap sites in villages and the lack of planning that local authorities give to using those gap sites which, in my opinion, would not do any harm to villages. This happens very much in the green belt, and I happen to live in the green belt. There are a lot of gap sites that could be filled in without doing any harm to the green belt. In many villages there are any amount of these gap sites which could be filled in without loss at all to the amenities.
The second point concerns the Rent (Agriculture) Act 1976, which is mentioned in the report and which has also been mentioned in this debate. I think that the Act was a very good compromise indeed to giving complete security to farm workers in tied farm cottages. You could not possibly give them complete security because that would have nullified the mobility of labour and, after all, a farm worker cannot really improve his conditions without moving quite long distances. If there were complete security it would
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certainly reduce the mobility of labour which takes place when a farm worker wants to improve his conditions, his job or anything else. Tied houses provided this. But there were undoubtedly evils in the tied house system; the NUAW has fought against it for many, many years and succeeded four or five years ago.
I think that the new Act is very good indeed. It still leaves us mobility and it gives this considerable security for which farm workers have fought so long. But the new Act will not work unless council houses are available. Indeed, there is a section in the Act stating that councils must "make their best endeavours". That is a very woolly statement because if a council does not want to help, then it can say that it does not have a house for the particular occasion. I have nothing against the sale of council houses—a lot are being sold —provided that the money is used to build more council houses. But when I was the Member for Enfield I approached the then chairman of the housing committee of the council about the sale of houses and asked her what she was going to do with the money. She said that she was going to put it into the revenue account. I said that that was a huge mistake and that it must go into the capital account and be spent on more houses. Unless that is done, and unless we have these council houses or some sort of housing in rural areas, then the 1976 Act simply will not work.
My second point has also been made by another noble Lord in this debate; namely, that it is no use putting people who have worked in the country all their lives and who have stayed in a village or in a house on a farm, into a flat in the town. In the towns around the village where we stay, there are a lot of flats which are run by the council. There was one occasion when a man who was retiring was offered a flat in a tower block. You just cannot do that to people. I would like to think that there will be plenty of houses in the villages to make the Rent Act work properly.
I do not wish to say any more except that more rural housing and larger villages that will support the noble Lord's "five Ps" are essential. It would solve a great many social problems if we had larger villages and a dilution of the big towns into the villages, where the people would get a better life altogether. Again, I thank the noble Lord for raising this interesting debate. I hope the Government will take some notice of what is said, but they are sometimes guilty of not doing so.
4 p.m.
Lord Sandford: My Lords, I should like to congratulate the noble Lord, Lord Hylton, on his good fortune in succeeding in the ballot in being able to introduce this debate and in bringing before us this valuable report. I should like to pay a tribute to him and to his illustrious colleagues for producing it. In fact, the report itself is so illustrious that one is hesitant to introduce any note of criticism at all. However, there is one small mistake in the report which I should like to correct—and the noble Lord himself has made the same mistake. It is rather material. A year before this report was published—that is, in 1980—in the Local Government, Planning and Land Act, the planning functions that are relevant to what we are discussing were transferred from the counties to the

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districts, and in all the matters with which this report is concerned it is the district councils who are the planning authorities as well as the housing authorities.
Lord Hylton: My Lords, if the noble Lord will kindly give way, perhaps I may point out that I was referring to strategic plans when I referred to county councils.
Lord Sandford: My Lords, the report does not make that distinction clear, but the noble Lord is perfectly correct. The county councils retain their structure planning powers, but the local planning powers—which are the more relevant to housing matters—are now with the districts. This is important because the matter to which the right reverend Prelate drew attention—the splitting of the powers which had existed in the past—had undoubtedly made things more difficult because the county councils have applied particularly stringent planning powers to conservation areas, and so on, and this has made the work of the housing authorities more difficult. Now that both those functions are held by the same authority it will be easier to reconcile them.
However, I must point out that in the national parks, which represent a pretty large chunk of all the remoter rural areas, the planning powers are still with the national parks authorities, which are, in fact, the county council committees, and the housing powers are with the districts; though that same piece of legislation did provide for the districts to be represented on the national parks authorities, and the liaison between the two is achieved in that way. The recently published report by the tourism, recreation and research unit of Edinburgh University makes a further recommendation in this field; namely, that the districts and the national parks authorities ought to be associated together in the preparation of housing investment programmes in the remote rural areas. That is a good point. I do not think that a statutory change is called for, but liaison certainly is.
But I must return to more general points. A debate on housing is always welcome, but one specially concentrated on rural housing is particularly welcome because, with only a small proportion of the population living in the countryside as compared with the towns, housing policies for rural areas are apt to get swamped or overwhelmed by the higher priorities that are very properly given to the urban areas. Therefore, it is good from time to time to concentrate our attention on the rural scene.
The rural scene has been the subject of quite a number of reports in the past decade, and I think it is true to say that it is the remote rural areas which have been the main focus of attention. We have been perceiving that those areas have been suffering from depopulation, as the right reverend Prelate has just said. There is the damaging effect of an over-exclusive attention to agricultural productivity—a loss of jobs leading to a run-down of services—the elimination one by one of these "five Ps" of the noble Lord, Lord Hylton, closure of rural institutions, too many people who own expensive housing in the countryside for retirement, for holidays and for weekend use, to the exclusion of the indigenous population.
But the 1981 Census returns are now coming in and
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I think that it is important to look carefully at them because they indicate a need to change our assumptions about these remote rural areas. The 1981 Census returns indicate that over the past decade the remote rural areas are now the only areas which show a higher rate of growth in the 1970s than in the 1960s. That is to say, it is the remote rural areas, which we thought were suffering from depopulation, which have been growing in the 1970s as compared with a decline in the 1960s. This means that our assumptions will now have to be changed.
In the remote rural district of Radnor a rather more detailed piece of research is being conducted by the Rural Planning Research Trust on behalf of the EEC. A closer study, using the census returns but probing them rather more deeply, indicates that in that very remote area over the past 10 years the rural population so far from declining has increased by 18 per cent. In addition, the proportion of that population in the elderly bracket is declining and the proportion of the population economically active is increasing. This again indicates that many of the assumptions that we have made about rural areas in the past 10 years are due for review. That review many considerably affect our housing policy for those areas.
I should like to hang the rest of my speech, which will be quite short, on the last document which the Association of District Councils produced in the field of rural housing in 1978. It was called Rural Recovery, and it was published in response to a request from the Countryside Review Committee. This document indicates fairly well what was being sought then in the way of changes in housing policy and we can now review the degree to which the Government have responded to them.
The association starts off by making the point, which I have already made and which other speakers have already made, that rural housing has a number of very distinctive elements about it which tend to get swamped and overlooked in a preoccupation with urban problems. That is why it is so valuable to have a debate like this and why we need to go on reminding Government departments of the special character of rural housing problems. We asked particularly in 1978 that special consideration should be given in the housing allocations to areas which have a small stock of council housing in areas where the incomes that can be earned locally are low but the cost of housing is high. In these days of financial stringency it is unreasonable to expect much response to that, but it is a point that has to be made over and over again.
In addition, and on top of that factor, there is the extra cost to the builder of transporting his labour force and his materials into remote areas, the cost of rehabilitating historic houses, which are not easy to work in and require considerable skill and craftsmanship, and the extra cost of making additions and alterations in village conservation areas—the very point that the right reverend Prelate made.
In all those connections the association asked that there should be a single block allocation to replace the three separate blocks. The Government responded to that in 1980. The advantages of having a single block under the housing investment programme are now apparent and very welcome. We have also asked that there should be four-year rolling programmes.

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That is something which the Treasury will always resist, but I do not hestitate to ask it again, without any great expectation that I shall receive a very satisfactory answer, if any at all. In 1978 the ADC went on to ask for the cost yardstick to be eased, and are very glad that it has now been abandoned. We went on to ask that the Parker Morris standards should be advisory and not mandatory, and we are very glad that they have been abolished.
Turning to improvement of houses—the point that my noble friend Lord Swinfen was making—the ADC asked four years ago for a relaxation and an easing of the limitations and constraints on improvement grants. That has been granted and the chances now make the improvement of unfit housing in the rural areas, particularly what were originally tied agricultural cottages, very much easier. My noble friend Lord Swinfen also made the point that there are a whole lot of outlying buildings in the countryside the bringing into use of which would help considerably, but that it is difficult to do this under existing housing legislation. The association have asked in the past for rural housing improvement areas to be considered—a designation equivalent to the general improvement areas and the housing action areas in the towns—and that is something that we should like to see pursued.
Turning to resources, there is no doubt that the demand that has to be catered for is from those people who are able to rent houses, but very much wanting to own them, on the brink of ownership but not quite capable of raising the necessary finance for it. It is for that purpose that the shared ownership scheme, which the noble Lord, Lord Hylton, was the first to mention, has proved so useful. I am glad to say that there are 35 housing authorities now using this. The Development Commission, to which he also alluded, are prepared to allocate half a million pounds in the next two years to these schemes, and there are 11 building societies prepared to provide mortgages for this activity. So that point has been well met and is developing well.
Four years ago the ADC were asking that district councils should be able to encourage young married couples in council houses, or on their waiting lists, to buy their own homes. The Government have gone rather further than that and Parliament has agreed that they should have the right to buy their homes. That is welcome too, although I agree that the special exemptions for certain designated rural areas were necessary as well, and we were glad that the Government met us on that point during the passage of the Bill a year or so ago.
The ADC urged that the Government should take more active steps to release houses in the hands of Government departments and Government agencies. That has been acted upon with commendable speed. In the last two years, the regional water authorities have released 350 houses in rural areas, the health authorities 200, the Forestry Commission 300, and, best of all, the Ministry of Defence 5,000. That is good progress.
The ADC stressed the need for the further expansion of short-term leasing and various kinds of agency schemes. The report we are debating expresses the hope, which I think is rather unrealistic, that the
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private owners of houses that they do not need might give them for nothing to charitable organisations. I do not think that that is going to happen on any great scale, but the North Wiltshire scheme is certainly welcome, and I am glad to say that a number of other housing authorities are operating it. As your Lordships know, this enables privately owned housing to be leased in the first instance to the housing authority and then let on by them to people of their own choosing from their waiting lists but without security of tenure. The fact that the private owner can get that house back for his own use when he wants it has the effect of bringing a great deal more housing onto the market.
I am not sure that I can agree with the noble Lord, Lord John-Mackie, that the latest legislation on agricultural tied cottages is the best possible. What I should like to see would be agreement between the parties to introduce legislation giving effect to the recent agreement between the CLA and the NFU, which would I think lead to an improvement in the situation. Another point that I might make to the party opposite—and perhaps the noble Lord, Lord Bishopston, could reply to it—is that it would make an enormous difference in bringing more private housing onto the market if the party opposite would reconsider their avowed intentions to repeal the legislation on shorthold.
Lord John-Mackie: My Lords, will the noble Lord give way? There is nothing in the CLA-NFU plan that has anything to do with tied housing or agricultural housing. It relates only to the rents of farms.
Lord Sandford: My Lords, perhaps the noble Lord and I could have a word about that afterwards. I should like to say that this debate has been very useful in throwing light on one area of housing which tends to get overlooked, and I am most grateful to the noble Lord for introducing the debate to us today.
4.16 p.m.
Lord Walston: My Lords, this is a useful and a timely report, and a useful and a timely debate. I am personally most grateful to the noble Lord, Lord Hylton, for the part he played in the preparation of the report and in allowing us to debate it today. There are just four points that I should like to make. Some of them have already been touched on by other speakers. The first is that when cottages in most rural areas and villages today become vacant the usual practice of the owner, whether the owner be an individual or a landowner owning several or many cottages, is to sell that house because it is empty.
Of course if he needs it for his own operations as a farmer he may leave it empty until somebody else comes into it as a tenant, but the majority of these vacant rural houses are now sold. The reason is a simple one; if you let it regardless of the security of tenure to the tenant, the most you can hope to get in the way of rent is perhaps £500 a year—I am speaking of my own part of the world, and the figures vary in different parts of the world—whereas you may well be able to get £15,000 or £20,000 for it if you sell it. So financial prudence leads you to the sale rather than the renting of the house, quite apart from the fact that the noble Lord, Lord John-Mackie, so rightly mentioned, that the cost of modernisation and maintenance

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is such that it cannot be covered by any rent.
The reason why there is this disparity between the purchase price and the rent which can be obtained is not, I would suggest, primarily to be laid at the door of any legislation concerning security of tenure. It is perfectly true that that has some effect, but in my view it does not have a major effect. There are many reasons for it. There is our whole fiscal system; the incentives, the advantages given in income tax by way of mortgage relief, and various other matters of that kind which make it desirable for people, if they can do so, to buy houses rather than to rent them and make it possible for them to do so. Inflation is of course another factor which has a big effect on this. The result of this is that the supply of rented houses in rural areas, even more, I believe, than in urban areas, is fast drying up.
That leads me to my second point; what happens because of this? What happens is that those houses are now sold to people who can afford these relatively inflated prices and who can afford to modernise their house and make it attractive for present-day living, and they are no longer available to the young people just married who have lived in that particular village all their life. They cannot possibly afford the mortgage interest on the high prices that such houses command. In other words, we have a movement in rural areas and villages in the opposite direction; not a flight from the land but a movement towards rural areas of people formerly living in towns. They find it more attractive to live in these areas because transport is easy, they can get to their place of work easily and therefore the pressure on villages is increasing the whole time.
That has two effects. This movement towards the rural areas and the purchase of houses—as opposed to the letting of them, which was the habit of the past—has effects on individuals and on the community. The effect on the individuals is sad. It means that young people who have lived in a village or rural area all their lives—people born and brought up there who are used to going to the local pub, the Women's Institute, the Young Farmer's Clubs, who are members of the cricket and football clubs and who take part in village activities —are forced to move away from their friends and families and seek homes in housing estates in urban areas where for a variety of reasons they can acquire houses much cheaper than they can in their own villages and where there are far more houses to rent.
Thus, there is a hardship on the individual, in having to move away, but there is also the effect on the community as a whole. My strongly held belief is that one of the great assets of rutal life, as opposed to urban life, is that a wide mix of people is to be found in a very small population; some old, some young, some intellectual, some purely physical, some rich, some poor, some well educated, some not so well educated and so on. They all live close to each other, meeting in the village shop and post office—not so often in the village church, I am afraid; I should like to think that the church is as important a factor in village life as it was, but I am afraid it is declining—and because they meet together in all sorts of activities they get to understand each other, help each other and gain knowledge of the way other people live.
In urban life, on the other hand, although there may be neighbourhood communities which give people
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contacts, they are less good than the contacts which occur in rural areas. In any case, invariably the urban community will be much of a muchness, with people of the same sort of backgrounds and ages and with the same sort of interests and incomes. One does not find in urban communities the vital factor which leads to an understanding of what others need and the problems they have. Indeed, I believe that one of the reasons for the problems are we facing in our social life today is that lack of understanding, and what is happening in our villages today is accentuating and accelerating that decline. It is in the national interest that that decline should be arrested.
That brings me to the final point, which is how we can arrest it. The noble Lords, Lord Hylton and Lord Beaumont, made some suggestions and I go along with them. However, I believe that basically there is only one way to overcome the problem, and that is by the provision of more houses to rent in rural areas; in other words, mainly council housing should be stepped up. There is a crying shortage throughout our rural areas of houses to rent at rents which young people can afford. More accommodation could be made available for them if more old people's homes and bungalows were built, so that people would move out of their council houses into old people's bungalows and so on, leaving room for youngsters to come along and take their place. But whatever the mix may be, the problem can be solved only by an increased supply of houses.
I am not suggesting that fresh housing estates should be built in every village throughout rural England. That would be neither realistic nor necessary. Nevertheless, planners, district councils and others should look into the matter and I support what the noble Lord, Lord Beaumont, said about the need for more authority to be given in all these matters to the locally elected people in rural areas, because they know what is wanted, rather than all these matters being absorbed into the sphere of central Government.
I am not referring to enormous housing estates but to estates of perhaps five, 10 or even 20 houses sited in selected villages, nucleus villages serving smaller ones in the vicinity. That would have certain economies of scale and services. It would not be absolutely ideal in that some villages would suffer and decline and perhaps become dormitory or areas for retired people, while others would grow faster. But provided they were properly sited, the effcts would spread out, and, while the local community might not be in one specific village, it would be in a group of villages. That is something which not only could but must be done very rapidly if we are to arrest the present slow but very sure and devastating decline of rural life which is going on today.
4.27 p.m.
Earl Bathurst: My Lords, I too join in congratulating my noble friend Lord Hylton on initiating this debate. I congratulate him and his colleagues for producing the report, more copies of which I hope are available in the Library. I must declare a small interest, being the chairman of a small housing association, a charitable organisation of the sort my noble friend mentions in the report. Through the good offices of the housing corporation, this tiny association now houses eight

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couples and, with a little bit of luck, it will house another six couples in the course of the next year or so. Small beer, one might say, but not to those couples, almost all of whom in the housing association property, helped by national supplementary benefit of one sort or another, could not possibly have got on the local council housing list. Those people are therefore able to continue to live more or less in the areas in which they have always lived. The value of a housing association such as this—as I say, as described by my noble friend Lord Hylton—is brought out all the way through the report.
On the back cover of the report is an interesting map to which I draw, in particular, the attention of the Minister. It shows a typical village with 536 inhabitants in 1981, compared, surprisingly, with 624 in 1921. It is, of course, a hypothetical village. The figures given on the back page of the report clearly show that letting to tenants by the private house owner is going out, and has almost gone out. Whereas rented property comprised 31 per cent. of all the dwellings in the village in 1921—rented from private owners and farmers; and I imagine that that includes service accommodation—in 1981 it comprised only 18 per cent. But the owner-occupied property in the village was 64 per cent. in 1981, compared with only 11 per cent. in 1921. The noble Lord, Lord Walston, has made that point himself, showing that today people want to be owner-occupiers, if they can afford it.
I now turn to page 2 of the report, to deal with a point that the noble Lord, Lord Walston, did not make, for I suppose a great many reasons. The reason for private ownership is stated very clearly on page 2:
"Despite a few legislative efforts to improve the lot of the private landlord, governments more or less abandoned the private sector"—
that is since the 1930s—
"and thereby the housing which it had supplied"—
that is the 31 per cent. of let houses that I have mentioned—
"and recognised that privately-rented accommodation was on the way out for ordinary housing purposes"—
and that must be so. I believe that that is due not only to legislation and taxation factors, but also to the fact that it does not pay. The noble Lords, Lord John-Mackie and Lord Walston, showed exactly why it does not pay.
The right reverend Prelate the Bishop of Hereford (who is now back in his seat) brought out the point that there are many other people in the countryside, besides those employed in agriculture, who require housing that they can afford. In fact, it is stated in the report that of all the people living in the countryside, only about 10 per cent. nowadays are directly employed in agriculture, and in these times we think in particular of those people who are perhaps out of work, or who have jobs that are not entirely agreeable to them in that they do not produce the kind of wages that they hope for. Where in the future are these people to obtain houses that they can afford? There is, for instance, the kind of house that the noble Lord, Lord John-Mackie, was going to put on the market, and has put on the market. Perhaps it is almost a ruin, but my bet is that it would cost at least £17,000 to buy—and the report states £20,000, depending on the area. If we add to that
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another £15,000 to £20,000, including Lord John-Mackie's central heating at, say, £2,000, then there is a £40,000 house before you have even got into it.
One has to be very rich if one wishes to live in the countryside, whether to retire there, or even work there, and I firmly believe that some form of housing association—there are many detailed in the report—could replace the stock of houses now fast drying up, if indeed they are there at all, owned by the private landlord.
The noble Lord, Lord Swinfen, has suggested that there are possible sites here and there, on farms, in-fill in the villages, owned by farmers, landowners or perfectly ordinary people who might be living near or in the local village. These might make sites for one or two houses, or even a little group of houses, from which would be formed the basis of a modest housing association of the kind that the right reverend Prelate the Bishop of Hereford mentioned his diocese is already running. Perhaps it would be possible for owners of such sites to join a housing association, or even form a housing association, possibly assisted by the local council, to make the sites available free of charge. The noble Lord, Lord Walston, doubted that, but I believe that some people might make sites, or even houses, available free to an association if they could have the right to nominate tenants to go into the properties. That can be done, but it is a very grey area, and I would beg my noble friend who is to reply and his colleagues to look into the question of nominating all, if possible, or a proportion, of those people who would go into housing association properties.
Of course, we are talking here only of the charitable association properties. The non-charitable association schemes, such as those of my noble friend Lord Lonsdale, which are mentioned in the report—unfortunately he is not in his place today—are quite different. They provide housing for those who can afford to buy at a later date, or who are already in good jobs which require housing in certain places. I am talking not of those who can afford such houses, but those who can afford only to rent, probably with the aid of social security benefit of one kind or another, and who should come from the local area, or be part of the agricultural industry. Perhaps it ought to be possible for the previous owner of the property to nominate them, so that they can go into charitable housing association property. That point is brought out in paragraph 2, Chapter 4, on page 12 of the report. I hope that the noble Earl and his colleagues will consider that point to see whether something can be done to make the situation somewhat easier.
We are talking not about huge units, that are working most satisfactorily around the countryside, but about small groups, such as the right reverend Prelate the Bishop of Hereford mentioned. In villages and other suitable places, such as the noble Lord, Lord Swinfen, suggested, around farms, or in hamlets, perhaps land which is not used for anything else could be made available by a beneficent owner, and the houses could be used to accommodate people, not only to their benefit, but to the general benefit of the whole of the community.
4.37 p.m.
Lord Bishopston: My Lords, I am sure that we are

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all indebted to the noble Lord, Lord Hylton, for initiating this debate on what is a most important subject, especially since it affects many millions of people who live in our countryside. I think we are helped by the fact that the noble Lord is a member of the working party, and we are aided, too, by the speech of the noble Earl, Lord Bathurst, who was a contributor to the working party's deliberations. In passing I must say that I am in considerable agreement with my noble friend Lord John-Mackie, and the noble Lord, Lord Walston, who covered many of the points that I have in mind. But I think it might be helpful if I were to emphasise some of the points that I consider to be of special interest. The fact that the Duke of Edinburgh has shown a special interest in this matter, as indicated by his foreword to the report, has been most encouraging.
We are considering the report of the National Federation of Housing Associations' working party, and we should express our appreciation of the initiative of the federation's officers and staff. Our thanks are also due to those who comprised the working party and to all who contributed towards the findings. Their work is not over, for they have a continuing concern. But it is for those of us who have power and influence to study the report and to do what we can to bring about urgent action, since the matter is most urgent and affects so many families in our countryside.
I am personally pleased to be taking part in the debate, because for 15 years in the other place I was honoured to represent an area of over 400 square miles, covering about 80 villages and hamlets. During that time I was also a vice-president of the Rural District Councils Association. The fact that I am a Church Commissioner, too, shows that I have some link with the views expressed by the right reverend Prelate the Bishop of Hereford, in particular when he speaks of the problems of over-large vicarages in our villages. He will know, of course, that the commissioners have in mind selling some of the properties there and producing, wherever possible, houses more relevant to the needs of the clergy, no matter where they live.
The area I was honoured to represent also included Sherwood Forest, with its association with Robin Hood. I think he might have set us an example in that, if the resources cannot be increased, then more of them should be transferred from the richer areas to be allocated in greater measure to the poorer areas. I think there is a kind of response in this report in regard to that, because its conclusions begin with the claim that the working party were,
"struck by the anomalies and apparent inequities of the current arrangements",
when they analysed the national background to rural housing problems.
They go on to suggest, of course, that the relative subsidies going into home ownership and housing to rent, to local authorities and to housing associations, are in need of fundamental overhaul. This is followed by the assertion, also expressed by the noble Lord, Lord Hylton, that housing cannot be seen in isolation and is intimately linked with employment, transport, shops, post offices, health facilities and schools. We know, of course, that the absence of adequate housing results in there being fewer employment opportunities. There is also the inadequate public transport, and often
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few facilities, so that rural residents are trapped. Younger people, who should stay and continue the traditions and the characteristics of our villages, often leave to set up home elsewhere. The present national policies, based mainly on the cash criteria, are, I believe, most destructive to our rural life. The criteria are based less than they should be on social and human need.
I liked the points made in the review in Annex IV, entitled "Portrait of an English Village" and dealing with a mythical place called Lower Middleton between 1921 and 1981, to which the noble Earl, Lord Bathurst, has made reference. There we can see the decline of the village. It mentions that the ironmonger, the cobbler, the baker and the saddler have gone; the draper's premises have become an antique shop; one grocer has closed, the other is now a teashop; the post office is now the village shop; and other business premises have closed or have been converted to other uses. This, in many ways, has not only been the change but has been the decline of our villages and the loss of some of the historic characteristics with which they have been identified over the centuries.
Apart from that list, it is likely that the village school has closed and that the children (after a fight in your Lordships' House for them not to have to pay their own bus fares) now go to the neighbouring village. I believe that, if extended, this new principle which is coming into our language, the principle of privatisation in rural villages, will destroy village life. If we look at one or two of the aspects and consequences, we shall see that if the profitable parts of our bus services are sold off to private bus operators we shall destroy public bus services, which, having to satisfy the less profitable areas, will make bigger losses, either requiring bigger subsidies or being terminated; and, of course, we know that higher fares mean that there will be less use of the services, and so the losses will mount.
Then, if our Government encourage or indeed force people to belong to private health services for which they have to pay, then of course the National Health Service in town and countryside alike will suffer, and so many patients will have no alternative but to rely on the National Health Service, which will become a run-down service. Further, if more people in our villages opt for the private sector in education (now being financed by the Government with public money) then the state schools will be deprived and many more closures will result. We all know that many schools have closed in the past because children have been taken into other areas for private education and so the schools have not been viable units. This is not only a loss of the school: it is another vital element of the village which is being seen to disappear.
So the order of the day is whether a service pays. As I say, buses are few and far between; and very soon we may find that the branch lines of British Rail will have a further scrutiny of costs, making the situation much worse and with more closures. It will bring about a greater isolation of our villages if these vital links in transport are lessened or disappear.
The report in the annex reminds us that the section of the community which has grown the most are the retired, which is up from 11 per cent. in 1921 to 39 per cent. in 1981. I am not sure that these figures are

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exactly in line with what the noble Lord, Lord Sandford, had to say, but they indicate the trend of that section of our community comprising the elderly and retired people to grow even larger in the next few years. Of course, that presents a challenge to us, not only in the urban areas but in the countryside as well, with the added difficulties of supplying the need there. So there will be a special need for the elderly, possibly with wardens to keep an eye on them.
All these factors, and many others, are part of the analysis required in dealing with rural housing problems. If we have unwittingly destroyed the community spirit, it is the price we have paid for demanding that our rural services, like others elsewhere, must pay their way in financial terms, ignoring, as so often, the vital social service role in satisfying human and family need. The report makes reference to what it calls the "up-market private development", and says that it responds, of course, to market factors. The building of homes for sale has been almost exclusively for the higher end of the market, and, in many villages, almost entirely for the retired. In many cases local villagers cannot afford to buy, particularly in competition with the more wealthy bidders. I think this was one of the points made by the noble Lord, Lord Walston. At a time when there are hundreds of thousands of building workers out of work, when the country needs many more houses and when housing standards need to be raised, it is interesting to look at the policies which are being pursued by the Government in relation to accommodation and to council houses in particular.
Turning to the ratio of rents to earnings, the figures based on male manual earnings show this rising in one year, 1980–81, from 6.9 per cent. to 9.3 per cent., and perhaps reaching 10.5 per cent. next April. It is of course true that the 6.9 figure may have been an historically low figure, but the new figure of 9.3 per cent., never mind the 10.5 per cent., is the highest figure recorded since 1945.
So there are even fewer resources nationally for our housing, and we know that the rural areas do not get the top priority. Indeed, the subsidies in the year 1980–81 were estimated to be £1,690 million and the subsidies for this April are estimated to be as low as £320 million. This is a very sad story— indeed, a tragic one—for housing prospects everywhere, not only in the provision of houses but also in the rents policy and the ability of people to pay the rents desired. As several noble Lords have pointed out, in rural areas, and especially in the agricultural sector, the earnings are less than they might be and certainly do not pay tribute to the most productive industry in the country at the present time, which is the agricultural industry.
There have been many other changes, too. As we know, the 1980 Act has led to the sale of houses, and so fewer alternative houses are available for let in our countryside. So it will be seen from the figures that I have quoted that in real terms the subsidies did not fall or the rents begin to rise until 1981–82, when they did so considerably, made possible by the new legislation.
The situation is particularly difficult and unfair to those in rural areas, where, as I say, the earnings are correspondingly less than those in the towns and
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cities; and, of course, in the countryside, as we know, people are dependent on a more restricted range of local services. They have shops where they have little competition or little choice, and if they want to seek lower prices they have to travel to neighbouring areas for their shopping. These are factors of real concern.
Planning authorities and, indeed, all who are concerned with rural areas might ponder on the changes here now, and indeed yet to come with the effects of microchips and computers. The report goes quite nicely and interestingly into the history of change in our rural villages, and the saga of Lower Middleton is very interesting indeed; but we are living now in an age of micro-processors and micro-technology, where new changes can he anticipated.
These aspects must be taken into account by planners when they are planning our villages and looking at housing needs, because these new scientific marvels can link remoter areas to new scientific and technological developments further afield. They could include better library services linked to more comprehensive libraries in this country and abroad; village doctors linked with diagnostic and refined research facilities such as those enjoyed by Harley Street, with agriculture linked to ADAS and advisory services nationally, and with the possibility of sharing other public services beyond the village boundaries. All this needs careful planning.
But it is in real contrast to the fact that there are hundreds of thousands of homes in our countryside lacking the essential amenities of sanitation, of water, and all the other improvements which many of us take for granted in our towns and cities. Yet we are moving into the space age and so we shall get this very real contrast and contradiction: on the one hand, conditions which are reminiscent of the last century and, on the other hand, the possibility of linking up with the new discoveries which can make life better for everyone. This is a kind of jet lag which will provide some discomfort until we tackle the problem in a more planned and comprehensive way.
The report mentions many facilities and these have been touched upon by your Lordships this afternoon. The Housing Corporation does excellent work even with more limited funds. The corporation and housing associations must consider the advantages of earmarking a specific sum of money to help those in the villages that need finance just as much as those in rural areas. I think this point is made in the report.
I was interested in the section concerning the use of human resources. This section of the report says that everyone has something to offer, including landowners, clergy, parish councillors, shopkeepers, publicans and retired people and many others.
I was particularly interested in the reference to the National Agricultural Centre, situated as it is at the site of the Royal Show Ground at Stoneleigh and linked with the Royal Agricultural Society of England. Having been associated with the work of the National Agricultural Centre and aware of the work of the NAC Housing Association, I note the efforts of Mr. Smith-Ryland (a member of the report's working party) and Canon Peter Buckler of the NAC Housing Association who also gave evidence. I believe there would be

965
advantages in promoting rural housing throughout the country through a national co-ordinated organisation backing the official efforts.
As the report suggests, this would publicise the issue, be a source of reference to those interested, and be an organisation to whom landowners could refer sites and could mastermind actual development in villages all over the country. The pioneer development of the National Agricultural Centre Housing Association has shown up some of the difficulties. There are important points here. The noble Earl touched on them in relation to trusts. It depends how money and resources are handed over, whether direct to trusts or to housing associations. There are tax and other financial aspects involved in that.
We are indebted to the National Federation of Housing Associations for the excellent work they continue to do in helping those in rural areas, and not least for this timely report. There have been many reports over the years, including a recent report of the Labour Party called, Out of Town, out of Mind, which I think neatly sums up the problems and advocates policies to deal with the situation. That report had as many as 69 proposals. I know that many other organisations connected with the countryside have made similar surveys.
One aspect of village life on which I think there is agreement locally is the use of the word "community". It must not be taken for granted that the word "community" means there is a common interest between everybody who lives in our villages. You have people from different backgrounds and places and working at different levels. There have been many changes. The need is to try to knit all the various social strands into a sense of unity. One has only to look at the census returns. I think the noble Lord, Lord Sandford, made the point about the census. Looking at some of the census returns from the last century, the 1841, 1851, 1861 and up to 1881 returns now available, one sees the same families identified with our villages year after year, decade after decade, and, indeed, going back many centuries as parish records indicate. Indeed, in many of our villages, people who came in at the turn of the century are still regarded as foreigners.
The agricultural sector, which has a great stake in the local community, covers a range of people who, perform many tasks involved in our greatest industry. Their housing and social needs vary. Although the last Government made some change in the former tied cottage system, workers are very much dependent on local authority housing and often lack a sense of security and the kind of rights which other tenants take for granted. The figures I have mentioned about the cuts in spending nationally in regard to council housing programmes will make it even more difficult to pursue the newer legilsation which is replacing the tied cottage practice we knew in former years. There are many problems, still. One is that a worker coming up for retirement, instead of staying on, as was the practice, is often encouraged to get a council house. If the tied cottage is vacant, it is sold and the retiring worker seeks a local authority house. Sometimes workers are put in unsatisfactory accommodation or temporary accommodation, which all too often becomes permanent. We recognise some of the problems outlined by the NFU and the National Union
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of Agricultural Workers. I think the evidence of these organisations is worth studying.
My Lords, all have a part to play, but we must realise that housing people in need is not doing them a good turn; it is not being charitable. It is a human right which all citizens are entitled to respect. When it comes to housing or, indeed, to the provision of any other essential social service, we should realise we are obliged to give people what is their right, not least because they are people—apart from the fact that if we do not, then not only do they suffer injustice but the later consequences to the community can be costly indeed. Sometimes, when one thinks about bad housing in the countryside and inadequate and overcrowded housing, and the problems of marriage and family life, one should also be estimating what may be the saving in money terms in connection with what we are going to pay out later because of the problems created by these quite inadequate conditions.
The basic need of everyone is an adequate supply of appropriate housing, tailored to suit the needs of those accommodated, at rents which people can afford and, most important, giving all the people, no matter whether they live in public or private accommodation, a sense of security. It has rightly been said on other occasions that family life is the foundation of our nation; and good housing, of course, is a basic and essential need for the foundation of our families.
4.59 p.m.
The Earl of Avon: My Lords, there has been an increasing awareness of the problems and needs of rural areas and communities over the past few years—even to the extent that the term "rural deprivation" used by Lord Bishopston has been coined to describe the various factors which have combined to put pressure on the social and economic basis of village life. This was ably illustrated by the right reverend Prelate the Bishop of Hereford in his lucid and far-seeing speech. These trends are familiar and have been debated before now in this House. Above all, there has been the steady loss of jobs in agriculture resulting from the major advances in productivity which have been acheived in farming since the second world war which was mentioned by my noble friend Lord Sandford in his knowledgeable and constructive remarks. Village life is no longer, as it once was, centred on the land. In turn, this has changed the social structure of many rural communities. For example, often the young people of a village have had to leave to seek employment elsewhere, and in some cases this has been accompanied by a reverse influx of those wanting to retire in the countryside, or purchasing second homes for weekend and holiday use.
Nearer the conurbations, a different pattern emerges. In the commuter belt—which can sometimes extend surprisingly widely—villages become attractive as dormitory suburbs. This pushes up house prices and again makes it difficult for young people as first-time home buyers to stay in their local community.
Added to these problems are those caused by the loss of local services and facilities. The long-term trend—I do not wish to enter into a political argument but I should like to call this a long-term trend—has been to centralise services—health and education provision, for instance. As we are all well aware,

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village shops face intense pressure from the cheaper prices which town supermarkets can offer. This was charmingly described in the opening remarks of my noble friend Lord Hylton as the "five Ps".
These changes in living patterns are not so much a problem for those with cars—indeed, the rise in car ownership has been a major factor in this process; but such ownership has also, of course, undermined the viability of rural bus services and created serious difficulties for those who remain without access to private transport.
This, then, is the overall context within which this more specific debate takes place, and, before turning to the particular matter of rural housing, I would wish only to assure noble Lords that the Government are fully aware of these wider problems of rural areas, though I was pleased to hear from the noble Lord, Lord Beaumont of Whitley, regarding the optimistic trends with which he started and closed his remarks. My right honourable friend the Secretary of State for the Environment will shortly be discussing these matters with representatives of the organisation "Rural Voice"—which, as noble Lords will be aware, is an umbrella group set up some 18 months ago and includes in its membership those bodies and groups principally concerned with rural affairs.
The House is indebted to my noble friend Lord Hylton, not only for raising the subject today, but for his service on the National Federation of Housing Associations' working party which produced the report we are debating. I should like to add my tributes to the noble Duke, the Duke of Edinburgh, for acting as president of this body. I hope that, in the course of my remarks, the noble Lord, Lord Hylton, will find a satisfactory answer to the questions he asked and a warm response to the assurances which he required.
At a conference organised by the Royal Society of Arts in November my honourable Friend the Minister for Housing and Construction welcomed the report as a perceptive and objective assessment of the housing problems of the rural areas. Its value lies in the fact that, having clearly identified the problems, it then takes a positive and constructive approach to how they might be overcome.
The report identified six factors which, it concluded, created special difficulties for the provision of housing in rural areas. I should like to take each of these in turn. First, it suggested that planning controls are enforced more strictly in rural areas and that this inhibits the provision of housing. Decisions about individual planning applications, however, are of course a matter for the district council concerned. The Government have made it clear that they attach great importance to the preservation of the countryside, areas of outstanding and natural beauty and national parks. Green belts must be preserved, and loss of agricultural land kept to the absolute minimum. It follows that new housing development in rural areas should in most cases be in or around existing towns and villages rather than on "green field "sites. To this extent, I was very much with the noble Lord, Lord John-Mackie, when he referred to filling in the gaps.
My Lords, I had prepared some remarks on structure
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plans but, as my noble friend Lord Sandford has already spoken to this, I shall omit them.
The Government have pointed out that economic activity, particularly small businesses, can do a great deal to preserve rural communities. Planning authorities have been asked to show a sensible and sympathetic attitude here. We are aware that problems can occur where the local planning authority insists on the use of special and expensive building materials. We have made it clear that controls over external appearance should only be exercised when there is a fully justified reason for doing so. Aesthetics is a very subjective matter—as we well know in this House—and local authorities should not seek to impose their tastes without good reasons. I hope that this approach will he appreciated by my noble friend Lord Swinfen.
The second and third factors which the report identifies concern the pressures on rented accommodation. So far as the private rented sector is concerned, it mentions the potential use of short-term letting arrangements to help preserve the private rented stock in good condition and advocates the use of what is known as the North Wiltshire scheme. Once again, noble Lords have spoken to this.
The Government certainly have no objections to the North Wiltshire scheme. We are as keen as the National Federation of Housing Associations to see better use made of the housing stock. But we think we have provided a better way to achieve a similar aim—that is, by encouraging the owners of empty accommodation to make it available for letting without granting lifetime security of tenure—hence the opportunities for shorthold tenancies brought about by the Housing Act 1980. Under shorthold, non-resident landlords are able to let for a fixed term of between one and five years with the certainty of regaining the possession at the end of the term if they so wish. During the term the tenants have full Rent Act protection.
We hope that more owners of empty houses in rural areas will make these available for letting on shorthold. The Labour Party's commitment to repeal shorthold can only serve to undermine confidence in the scheme and to deny accommodation to those who need it. The Government believe that shorthold can make a valuable contribution to the supply of rented accommodation in both rural and urban areas.
In the publicly rented sector, the report calls on local authorities to increase their activities in rural areas and to complement the Housing Corporation's lending programme by providing loans to housing associations. I am pleased to say that gross provision for local authority capital is being increased by some 3 per cent. for the coming financial year.
The noble Lord, Lord Hylton, asked whether guidelines can be issued to local authorities and the Housing Corporation giving greater emphasis to the solution of rural housing problems. I shall come to the Housing Corporation in a moment. Local authorities are asked to concentrate their available expenditure on those for whom it is really vital. This will include those in rural areas. However, it is a central feature of the system under which capital resources are allocated to local authorities that each authority should then be able to manage those resources in accordance with its own view of local priorities.
I would not agree with the report's conclusion that

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council housing in rural areas is inhibited by cost control systems which are more appropriate to urban areas. Centrally prescribed standards and cost limits were dispensed with when a new system of project control was introduced in April last year. This gave local authorities much greater freedom to provide the sort of housing which would meet their individual local needs, and there is no reason why the new system should discriminate against rural housing schemes.
The housing associations' primary source of funding is the Housing Corporation. We have agreed that the gross provision for the corporation for 1982–83 should, at £556 million, be the same in real terms as this year. This means that we shall have maintained the corporation's programme at the same real level for three consecutive years, despite the pressure of public expenditure. I hope that this will go some way to alleviate Lord Beaumont's pessimism and answer Lord Bishopston's mention of limited response. It indicates the importance the Government attach to the work of housing associations.
Of this gross provision of £556 million, less will be required than in the current year to meet commitments on existing projects, so it will be possible to make some significant increases in individual parts of the programme. Returning to Lord Hylton's point, the Secretary of State determines the broad composition of the programme. But it is essentially a matter for the Housing Corporation to decide priorities between particular projects. Although the corporation has concentrated on funding associations working to relieve housing stress in urban areas, it has always tried to maintain a programme of support for rural schemes.
The fourth conclusion the report reaches is that private housing development in rural areas tends to cater mainly for the better off. It cannot be denied that young people who wish to live and work in the areas where they grew up have often found that they cannot afford to buy a new home there. Local authorities can change all that, by working in partnership with the housebuilding industry.
A recent series of presentations by the Housebuilders Federation showed how modest "starter homes" can be built under licence on local authority land and sold to people nominated by the authority—often its tenants and people on the council waiting list. I hope this plan will be welcomed by my noble friend Lord Bathurst. In this way, people from the waiting list are housed and council housing is freed for those who really need it. This is already happening in a number of rural areas and the Government hope that other authorities will capitalise on the willingness of housebuilders to undertake such schemes and follow suit. There is no reason why only young people should benefit from such schemes. At the Rural Society of Arts Conference last November, my honourable friend referred to a local authority building for sale scheme specially for the elderly in the country.
Low-cost home ownership can also be achieved through the improvement of older property for sale, or else by selling the property for "homesteading"— improvement by the purchaser. We believe that these initiatives are as relevant to the small towns and villages as to the big urban areas and we want to see as many local authorities and housing associations as possible involved in them.
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Perhaps I could draw particular attention to the potential of "shared ownership", which my noble friend Lord Sandford mentioned—the arrangement whereby the householder buys an initial percentage share in a property and continues to pay rent on the rest, with the option later of increasing his share and ultimately becoming the full owner. I believe this arrangement has great potential for helping those who could not initially afford outright home ownership. It is certainly as relevant to the rural areas as to the cities. Housing associations have an important role in providing homes for sale on a shared ownership basis. Finance for the share retained by the Housing Association can be provided through public funds. But interest is also growing among the financial institutions for the use of private finance for these schemes. This will give much greater impetus to the growth in shared ownership projects and help many young couples towards owning their house. I think this is a scheme which will please the noble Lord, Lord Walston.
Some housing associations have even gone so far as to devise a variation of shared ownership—the deferred purchase scheme—under which the entire funding for the scheme comes from private sources. The Government warmly welcome such initiatives, and both these schemes go a long way towards some of the proposals of my noble friend Lord Bathurst.
I was pleased to note the attention and support which the working party's report gave to shared ownership. The report referred in particular to the Development Commission's involvement in housing associations' shared ownership schemes. Over the next two years the commission intends to make half a million pounds available for such schemes.
The Development Commission is helping rural housing in a number of other ways. It is involved in an experiment to provide a few craft homes—these are houses that incorporate workshop space, thus enabling the one-man business to set up and operate from home. The idea behind the experiment is to demonstrate to private developers that there is a market for this type of building and that it can be a financially attractive proposition to undertake. If this can be proved, it is hoped that the private sector will then step in and carry on with the good work.
In addition to providing these workshops the commission is also going ahead with a partnership scheme with the Housing Corporation under which it will finance workshop space attached to some houses sponsored by the corporation. On top of this, the commission is investigating ways of helping district councils with the cost of acquiring and servicing sites in villages that might otherwise be too expensive to develop for low-cost private housing. The intention here is to sell the sites under licence to a private developer to encourage more starter homes to be built.
I now want to turn to the fifth problem identified in the report, housing for the elderly in rural areas. The noble Lord, Lord Hylton, was particularly concerned about the number of elderly people coming out of tied accommodation over the next 12 years. I am sure that in drawing up and reviewing their local housing strategies local authorities will pay close attention to particular problems which may arise in their areas.
Sheltered accommodation provided by local authorities and by housing associations has an important part

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to play here, but it is as well to remember that many elderly people prefer to stay in their present homes, even though those homes may have become difficult to manage. To help them, the home improvement grant system has been made more flexible so that local authorities can, for example, give grants for small improvements such as an improved heating appliance. The rates of grants have been increased in priority cases, and more generous adaptation grants for disabled people are now available. Repair grants, at priority rates, have been introduced for older dwellings, many of which are occupied by elderly people; and priority rates of grant have also been introduced for elderly people to insulate their homes. Grants are also now available to tenants in both the public and private sectors, including tenants in tied accommodation. These, and other measures provided for in the Housing Act 1980, will help to make home improvement grants more effective in tackling the problems of substandard housing.
The noble Lord, Lord Hylton, expressed concern about the extent of the problem in rural areas. The figures he quoted, however, are taken from the English House Condition Survey of 1976. A further house condition survey was conducted on a similar basis in England in 1981, the results of which we hope will be available later this year. In particular we shall be looking at the figures for the rural areas to see how they compare. The noble Lord may rest assured that the Government will take the results of the 1981 survey into account when the opportunity occurs.
The starter home and shared ownership initiatives which I referred to earlier are also very relevant to the needs of the elderly. One variant of shared ownership which is particularly suitable for elderly people who find that their existing home has become too large for their present needs but who still want to remain home owners, is Leasehold for the Elderly. The benefits of such schemes are recognised in the National Federation of Housing Associations report and the Government are giving them every encouragement.
I come now to the problem of ensuring that new development in rural areas is not held up for lack of water and sewerage supplies. Connections to the water and sewerage systems are more expensive for rural areas, and this can pose problems for water authorities, who have to accommodate other pressing demands within their capital programmes. However, it is always open to a developer to requisition a public sewer or public water supply in advance of a water authority's capital programme, and to contribute towards the cost if he is satisfied that this would not affect the overall viability of his development.
The right reverend Prelate the Bishop of Hereford mentioned gipsies. Perhaps I could just say to him that the 1968 Caravan Sites Act lays a duty on local authorities to provide adequate gipsy accommodation in their areas. To this end the Government provide from Exchequer funds 100 per cent. reimbursement of the costs incurred for this purpose. In the present financial year £2·7 million have been spent on this and the Government intend that this programme of assistance should be continued in future years.
The noble Lord, Lord Beaumont, mentioned as part of Liberal policy the matter of second homes. Perhaps
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I might just say that the Government do not consider the acquisition of houses in rural areas as second homes to be such a severe problem as to warrant the return to the days when authorities were free to buy properties without central Government control, thus denying potential house owners the opportunity to buy their own homes. It has been argued that planning control should be introduced over second homes, but we do not believe that this is a national problem. The Government recognise that problems can arise in certain localities, but they are not convinced that local authorities' existing powers are insufficient to deal with the situation.
To conclude, I am afraid I have taken up a great deal of your Lordships' time but other noble Lords have spoken with such brevity that they have left me ample time. As we have heard, and as 1 have tried to stress, the housing problems of rural areas take on a variety of forms. The working party's report has helped to point the way forward by demonstrating that the solutions available are no less varied. They will test the ingenuity of all those involved in the housing market: central Government—and I hope that my remarks will have underlined the real interest which central Government have in this—local government, housing associations, private sector landlords, the house-building industry, the financial institutions, the occupants of the houses and the statutory undertakers. On the evidence so far available, I am sure that ingenuity is not lacking in any of these quarters. I am equally sure that all concerned will have been stimulated by this debate this afternoon.
5.20 p.m.
Lord Hylton: My Lords, I am extremely grateful to all noble Lords who have taken part in this debate. It was very encouraging to notice the general welcome that seemed to be given to the report, and I am sure that the National Federation will be delighted about that. May I say a particular word of thanks to the noble Lord, Lord John-Mackie, who was so pleased with the format and presentation of the report. The noble Lord, Lord Beaumont of Whitley, was entirely right to emphasise the question of second homes and the option of self-build schemes, which is available in some places. The noble Lord, Lord Swinfen, drew our attention to the impact of new technology on the location of jobs. I only hope that the rather alarming, speculative view of the noble Lord, Lord Bishopston, on the combination of high technology and rural squalor will not be borne out in practice.
I am grateful to the noble Earl, Lord Avon, for his very comprehensive reply and, in particular, for repeating the welcome to the report which was originally given by the Minister of Housing. I am very glad to hear that there will be further conversations between the DoE and the umbrella organisation, which is known as Rural Voice. We were all most interested to hear what the Government had to say on the question of starter homes and shared ownership and, indeed, on some of the points that were brought out concerning the elderly.
My only regret is that the Government may not yet have taken on board the urgent need for quite a lot more rented housing for those who have no prospect of buying and who will not, at the end of the day, be

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benefited by any of these special hybrid, self-build, cost-sharing or shared ownership schemes, valuable as they are. The noble Lord, Lord Walston, brought this out particularly well. So with those words, my Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Scotland: Transport and Agriculture Problems
5.23 p.m.
Baroness Elliot of Harwoodrose to call attention to the problems arising in Scotland, in particular in relation to transport in the Highlands, agriculture and hill farming; and to move for Papers.
The noble Baroness said: My Lords, I have waited fairly patiently for more than a year for the luck of the draw, to be able to discuss this matter with your Lordships. I had nearly given up all hope, until one day I was suddenly offered this evening and I naturally jumped at it. I should like this debate to be a constructive debate, not based on party politics but based on what those of us who live in Scotland, in the areas which we are going to discuss, can suggest to help agriculture in what is termed—I think erroneously—the less favoured areas. To me, they are the most favoured areas. They are the areas that I love best—the Highlands and the Borders. I live in the Borders, but I know the Highlands very well, too.
I am grateful to the many noble Lords who have responded to this debate by putting down their names to speak. I shall talk of my own experience in agriculture, but I hope that other speakers will discuss, in whatever way they feel is best, the many subjects which have a bearing on what we are to discuss this evening.
For some years, the returns from farming and agriculture in the Highlands and Border areas have been getting worse. Ironically, land values have risen, but the return on stock and crops has continued to fall. The land was there, but the cash flow was not. I have just a few figures from the Scottish National Farmer's Union to prove my case. Between 1976 and 1980 income returns fell from £201·4 million to £33·1 million—a drop of 84 per cent. In the same period, bank overdrafts and loans increased from £204 million to £618 million, and in 1981 they rose further to £709 million—three and a half times the 1976 figure. To halt this decline and to save the industry is essential for everybody. Agriculture is the largest industry in Scotland and investment in agriculture will repay any Government, of any political party, in the real use of the land and of the people who live on it.
These facts are depressing, but there are signs of change. The EEC sheep régime has begun, and it has begun to show increased returns with lamb prices rising, although it is early days for lambs since they will not appear in the Highlands and the Borders until March and April. But the suckle calf prices are going up and, hopefully, store cattle prices are better this year than last. But, as I say, it is early days yet.
The first thing that would help farmers is a reduction in the bank rate. This applies to many industries. Anything the Government can do to urge the banks to
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lower their interest rates would be really helpful to the industry. Another cost which affects hill farming and the Highland areas is transport. The cost of diesel oil and petrol in remote areas can mean an extra 20p a gallon in the Highlands or Border areas compared, with the price in the urban areas. I know that, among noble Lords who will be speaking today, there are one or two who are very expert on transport problems and I should particularly like them to deal with this aspect. These transport costs affect so much of the farming industry, because in our areas we have to carry lime and fertiliser for miles and miles, as well as having to carry animals long distances to markets.
If we want to improve the land, so that we can get more sheep and cattle in those areas which are termed less favoured, we must be able to provide more lime and fertiliser and so on, to develop both the Highland and Lowland areas. There is a strong link between the Highlands and Border areas, which are producing store cattle and sheep, and those areas lower down which buy the cattle and sheep, and fatten them up so as to sell them to the abattoirs for meat. So one of our immediate needs is to increase lime application throughout Scotland. The lime subsidy has been very helpful and it should be continued.
We welcome the continuation of the compensating allowances for sheep and, also, the increase in the annual premium for ewes. I want to say these things, because I wish to encourage my noble friend Lord Mansfield, and to show that I am not only critical, but grateful. I regret that there are to be changes in the suckle calf improvement scheme. I read that a few days ago. The present rate of grant in the green pound, which is paid for by FEOGA funds, is 20 European currency units, or £12·37. According to the present ruling from the EEC, this is to be reduced to 15 ECUs, which equals only £97·30. Therefore, the contribution from national funds will have to rise. That is a small point but it is something which the Government ought to consider.
The continuation of the United Kingdom's variable premium scheme for beef is much to be welcomed. Considerable help has been given to farmers through the EEC and also through the Farm and Horticultural Development Scheme. May I say a word about the CAP and other matters relating to the European Community. I recommend critics to find out what we receive in return for our contributions to the CAP. It is not just a question of money being paid out and nothing being received in return. It is also a question of grants being received for important farm improvements.
My criticism of the EEC is that they take such a long time to make up their minds about what is going to happen next year or the year after that. These delays, these arguments, are very frustrating for farmers. We want to know one year or two years in advance (personally, I should like there to be a policy which lasted over a period of five years) what the needs of agriculture will be, and therefore whether one should encourage the production of more animals or of some other agricultural product. We want to know whether there is going to be a shortage or a surplus of sheep, cattle, pigs, poultry or whatever it may be. We should like the EEC to think not in terms of year to year but in terms of, say, three years or five years at a time.

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The problem is that once discussions finish it is too late for us to do anything in that year, because we have to plan nine months ahead. I realise that this is very difficult for our Minister of Agriculture. I should like to congratulate our Minister. He is a most active and persuasive person who is doing a fine job by standing up for us in the European Community. His stand against the devaluation of the green pound is excellent and I very much hope that he will be successful.
Finally, there is one vital policy which I should like our Government to support; namely, the agricultural development programme for the Highlands and Islands. We all know that this is a vast area. The distance from Argyll to the Shetlands is, I believe, 700 kilometres. The land area, I am told, is as big as Belgium while the total population is only 300,000. The people there, in particular the shepherds, are thought of as being tied up with oil production at Sullom Voe and all the other places that we read of. It is thought that that is the main employment. It may be so now, but agriculture is still the basis of employment in those areas. I believe that agriculture will last far longer than oil, for it is the mainstay of the economy of the Highlands and Islands. The development board has introduced many new schemes and many new plans with great success, but at the heart of the work and development of the area lies agriculture and forestry and the subsidiary industries which are so important to the area.
The EEC has encouraged assistance for less favoured areas in one or two parts of Europe. The Community has established agricultural development programmes in Ireland and a small development in the Western Hebrides, but it is a full-scale development programme which we seek for the whole area of the Highlands and Islands. I understand that the CAP is prepared to look favourably on such a scheme. Our Government need to press more strongly for this development. The CAP will grant-aid such a scheme. The Government can look upon this as capital investment from which the returns will be very good and of lasting value.
Only last week a deputation from the Highlands and Islands and the Scottish National Farmers' Union went to meet members of the European Parliament about this scheme. I believe that they had a very favourable reception and received much encouragement. Unless, however, our Secretary of State and the Ministers at the Scottish Office back the scheme wholeheartedly it will simply die of inertia. Any agricultural scheme ranks for grant aid from the CAP. This is investment, part of the capital for which is put up by the EEC. Do not let us miss this chance.
There is much more which I could say about the general needs of agriculture, but I shall leave it to the other noble Lords who are to contribute to the debate. We have the most efficient agricultural industry in Europe. We produce what the consumer wants, but we cannot go on producing at a loss. On the other hand, we realise that there is a difficult financial situation. Therefore, we do not want to ask for more than our fair share. But we do want our fair share. The area about which I have spoken will repay investment. The returns will benefit everyone. The Government have helped in many ways. All I ask is
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that the Government should continue to invest money in these difficult areas which I have described. Then the farmers and the others who live in those communities will respond wholeheartedly. I beg to move for Papers.
5.37 p.m.
Lord Mackie of Benshie: My Lords, the House is extremely grateful to the noble Baroness for raising this subject. She always raises relevant matters and always speaks about them with great commonsense. I want to deny the rumour that the large attendance of Scottish Peers is due to fear. It is entirely due to the respect and liking for both the noble Baroness and her subject.
May I speak about agriculture. My noble friend will talk about the related problems of transport and other subjects. It is true that every Government, even this one, are greatly concerned with the problems of the Highlands and the Borders—the upland areas of Scotland. That they have been a problem is obvious from the immense drain of people away from the Borders and the Highlands. The Highlands and Islands Development Board and many other bodies—such as the Crofters' Commission—the hill cow subsidy, the hill ewe subsidy and a whole host of matters have been put forward by various Governments with an immense amount of goodwill and have had a certain effect. It is true that factors like the Highlands and Islands Development Board, Government attitudes and the luck of the discovery of oil have largely arrested the depopulation of the Highlands. But immense problems remain. What the noble Baroness said in her speech is absolutely true: agriculture is still the main factor which is keeping 30 per cent. of the people (and more if you include the other associated industries) in the Highlands and the upland areas generally.
We are all interested in conservation. I am rather more interested in the conservation of people in the Highlands than I am in the fate of the "lesser blue crested swallow tailed tit", to say nothing of the sedge daisy which only grows in some peculiar form of peat which is to be found only in the middle of the domains of the noble Viscount, Lord Thurso. I would much rather see green spears end the desolation of which we have plenty in Scotland than the sedge daisy, or anything else. That is a much more beautiful sight for the visitor and for the farmer—and certainly a much more pleasing sight for the people who want to live, and for those who do live and work in the area. Therefore, we must accept that farming is the basis of the population of the Highlands and Islands and the uplands of Scotland, and that people will be kept there if farming is well done. As I said, we have had a lot of help, but that help has been very badly eroded.
I have just received this week the Farm Management Review from the economics division of the North of Scotland College for Agriculture, and it has some fascinating figures on the actual profitability over the years 1975–76 to 1979–80—a period of five years. It shows figures for the hill sheep farms. There were 23 hill sheep farms in the sample, and the people who co-operate and who are recorded in the sample are often the best. They have done relatively well, but only relatively against the others in the sample. On average they held £1,039 in the bank in 1975 and five

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years later they had £972 in the bank. So they have lost a few pounds and through inflation the money has become worth only about one-third of its former value. This is the best of the sample.
There were 33 upland farms in the sample. Certainly they made a profit, consisting largely of a rise in valuation. On paper, their capital nearly doubled, but the overdrafts for these 33 farms increased from £3,000 to £11,500 on average. That was hardly a prosperous five years. Then the sample showed 11 rearing with arable farms. Their overdrafts increased from £8,700 each to £26,300—not a picture of immense prosperity, which some of the inhabitants of our towns still imagine obtains in the countryside. In the case of dairy farms, which are often thought of as the most prosperous section of our industry in Scotland, the eight samples showed an average overdraft increasing from £8,700 in 1975 to £26,300 in 1979–80.
The only people who held their own were the part-time crofts, of whom 10 were in the sample costed. They had £1,000 in the bank in 1975 and in 1979–80 they each claimed to have £3,400 in the bank. So they held their own with inflation but there was not one penny return on capital, and the profit each year was only equivalent to the work put in by the part-time crofter and his wife. That is hardly a picture of tremendous prosperity, and it is one that we need to look at very closely purely in terms of inflation. Certainly no industry can prosper in that sort of situation unless it starts to make some profit. At the present time what we are getting is in fact a fall in farmers' incomes. It is a very severe fall and the fact is that, in real terms, incomes have halved over the past five years.
The Government have to be extremely courageous in doing something about this situation. A whole lot of things need to be done. Transport needs to be assisted in the Highlands and Islands. It is already assisted, I know, but we want to keep the price down. Co-operatives need to be helped to store winter food. We must have schemes of co-operation between forestry and farming. The farmers themselves ought to take up a certain amount of forestry whether they are tenants or owners because this is a system that works extraordinarily well in Scandinavia and other countries. We have to keep up the advisory services. In particular, our Scottish colleges have done an immense amount of good to agriculture and to the whole of the countryside. This was a point that the noble Baroness was making: without agriculture the countryside will further decline.
We also have to spend money on research and development. Above all, I believe that the country's general financial policy is also enormously important. One can see that the rise in overdrafts is self-generating, simply because of the enormous and ludicrous rates of interest which farmers have to pay on businesses which have never been high profit businesses and which are practically in a loss position. The Government may well be helped in their fight—and I agree that the Minister of Agriculture has done well. I obtained from the Ministry for our committee some figures which were extraordinarily interesting about the price of food. If I may, I should like to quote from those figures.
Since the end of 1978, retail food prices have risen
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37 per cent. compared with 51 per cent. for all items in the retail price index. The interesting point is that of the 37 per cent. rise, roughly two-thirds—that is, 24 percentage points—was attributable to the rise in the costs of processing, packaging, distribution and retailing. Only one-third was related to the rise in the cost of basic food raw materials of all kinds and from all sources. When we hear of the terrible surpluses and of the appalling demands made by farmers, the Government might well use the agrument that two-thirds of price rises are due to the rising costs of the wholesale, retail and packaging trades.
I hope that the Government will follow the attitude taken by the French Government, although perhaps not in an illegal manner. The French Government looked at their farmers in the Massif Central and the other disadvantaged areas of France and they produced a subsidy for them last year of £400 million. They probably paid that entirely illegally, but I applaud their attitude and think it is sensible. If we are going to do what the noble Baroness wants and keep people in the countryside, then we have to pay a reasonable price. All we ask is a reasonable price for the food they produce; the production of food is what keeps people in the countryside and I trust that the noble Lord the Minister will make a great name for himself by backing the uplands as hard as he can.
5.47 p.m.
Lord Margadale: My Lords, I welcome the opportunity of taking part very briefly in this debate. I should like to congratulate the noble Baroness, Lady Elliot, for putting this Motion before the House. I must declare an interest in that I am responsible for farming affairs on an island in the Outer Hebrides. I should just like to say a word or two about farming. In fact, the noble Baroness has said very clearly what I was going to say in regard to the position of a great deal of farming in Scotland, particularly in the West Highlands, which is considerably indebted to the bank at the present time. That is one of the troubles with the recession. I am glad that the noble Baroness mentioned the subject of lime, which is an elementary but important matter. I agree with everything that the noble Baroness said and would like to support her very warmly.
I would also like to say a word or two about transport. Agricultural interests are concerned very greatly in transport. Evre since I was small enough to be put in a basket I have travelled on various ships owned by Messrs. MacBrayne, now Caledonian MacBrayne. The early ones, which were paddle wheel, were much easier to sleep on on a rough day than the present ones, because the early ones were not subject to rather loud canned music. But that is by the way. As I see it, that section of the community, the public as a whole, agriculture, and the distillery trade—with which I am in no way connected, except by having a casual nip occasionally, possibly like other noble Lords in this House—would be helped very considerably if the fares came down.
I have an idea of my own which has never yet been tried by the Scottish Office, though I have no doubt it has been considered: when granting a route to what-ever shipping company it may be, nearly always Caledonian MacBrayne's, the whole project could be put out to tender, either as a whole or in groups, with

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specified numbers of sailings per day at different times of the year. Though it sounds complicated, it might get a better result from the point of view of the tax-payer, and particularly those who want to travel by ship, and those who must travel by ship because they cannot afford air. Air transport is getting even more expensive than it has been through the years. It is just an idea.
Perhaps I could quote what boat transport means at the present time. I was on the telephone last night and somebody got short of winter feed for their cattle in the island of Jura, which is entirely dependent on the island of Islay for its transport; the roll-off roll-on ferries go from West Loch Tarbert to Islay, across the Sound of Islay to Jura. The cost of the lorry without the straw, which is the stable feed for cattle at this time of the year in that part of the world—though it is burned in other places, I am sorry to say—was £450. It makes one think. He had to have it to keep his cattle going for the rest of the winter. It is a small example, but I think an important one.
There is one other thing I would briefly like to mention. That is the damage done by geese. It is a small point but it affects quite a lot of the islands. When I see in the middle of The Times newspaper a picture of a couple of hundred Brent geese not far from the shore in Essex, and read that something is going to be done about it the next day by the Government, I think that some of the people who arrange that ought to come and see 5,000 geese; the top score is 27,000, though not at the moment. It is extraordinary how much damage can be done by them. I hope all concerned will take that to heart. I do not want to weary the House any longer as we are short for time, and I will conclude by thanking your Lordships for listening.
5.53 p.m.
Lord Taylor of Gryfe: My Lords, the House is indebted to the chairman of the Scottish Peers for introducing this debate on a Scottish theme. Perhaps I may offer two general comments. For a short debate the range of the discussion is rather widely spread; I would suggest that Scottish transport and Scottish agriculture, which are not necessarily related subjects, might have separate days. Indeed I might go further, and keeping in mind the excellent attendance of Scottish Peers here tonight, we might even copy the Members of another place who recently held a debate in Edinburgh on the affairs of Scotland. This attracted a good deal of press publicity and a great deal of interest. There were queues outside the Public Galleries hoping to listen to Members of Parliament debating Scottish affairs. Perhaps Scottish Peers might consider in future changing the venue for this kind of debate. This might bring great credit to Scottish Peers and even to the House of Lords.
I will resist the temptation of discussing the relative claims of sheep farming and forestry for good land use in the Scottish uplands. I am content simply to refer to the conclusion of the very excellent document prepared by the Centre for Agricultural Strategy, Strategy for the UK Forestry Industry, in which they argued, I think quite conclusively, that there was no real conflict between an expanding forestry programme and the
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reasonable maintenance of existing sheep stock. In fact it has been demonstrated on a number of occasions that you can support an increasing sheep stock with intelligent land use, some areas being utilised for forestry purposes, with shelter belts and better roads and so on. So I hope in future when we are looking at this subject we can assume, and I hope the Government assume, that forestry and sheep farming are not necessarily in conflict and in fact they can live happily together and be mutually beneficial.
I want to say a word or two about transport. Like the noble Lord, Lord Mackie, I have always believed that the Highlands should not be treated as interesting wilderness areas and that there should be opportunities for people to work and earn a living. That depends on proper communications between the people in the isolated areas and the main centres. Indeed, the whole economy depends on some reasonable communications between the Highlands and the centres of population and industry. I was encouraged in discussing with British Rail in Scotland the other day how they viewed the future of the Highlands in terms of their particular role in maintaining the Thurso-Inverness line and also the Highland railway. Your Lordships may be interested to know that if you look at the total network of British railways 30 per cent. of the rural railway lines are situated in Scotland.
I was delighted to learn from British Rail in Scotland that they are presently in discussions with the Highlands and Islands Development Board and the Highland Regional Council concerning integration of transport, and their whole discussion is based on the assumption that there is a strong financial, economic and social case for maintaining the present network. That is very reassuring in the light of publicity recently about the consequences of the strike on the finances of British Rail. There is a feeling, at least in the Scottish region of British Rail, that they have a continued commitment to maintain that service. It would be interesting if the Minister in winding up would also confirm his support for that proposition.
I was also interested the other day to receive from the Highlands and Islands Development Board their submissions to the Scottish Affairs Committee in the other place, which is presently discussing rural transport. It may be that once their deliberations are complete we might return to this subject. I was encouraged by the Highlands and Islands Development Board's endeavour to adjust their rural transport perspectives to the changing situation in transport. The growth of the private car, for example, means that you have a changed situation in planning transport needs, the car in the Highlands being no longer a luxury but a necessity, and that has implications for road programmes and so on.
I was also interested in their submission in connection with the tariffs for the ferries which, as the noble Lord, Lord Margadale, has just mentioned, are so important to the economy of some of the islands. The Highlands and Islands Development Board take the view that ferries are simply an extension of the highway and that the fares should be calculated on the same basis as you would calculate charges on the roads, on the basis of what is called a road equivalent tariff. They did suggest that the Secretary of State for Scotland had given some support to that idea in a Statement in July 1981 when he accepted the board's contention that an

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RET system of charges should be based on the running costs of vehicles.
It would be very interesting to hear the Minister's further comment on this contention, keeping in mind that the Scottish Transport Group who are, after all, responsible for running the ferries, take an entirely different view. The Group has
" voiced its misgivings about charging systems determined by reference to external factors (road vehicle operating costs) and therefore divorced from the costs of operating the shipping services. The Group also expressed concern, echoed by others, that least benefit and some disbenefit would result for the most distant islands",
in the event of a change in the system such as is suggested by the HIDB. I would be very interested to hear the Minister's comment on the relative advantages of the STG pricing system and the tariff system proposed by the HIDB.
The Scottish Transport Group tries to operate efficiently. Inevitably, it requires subsidies and negotiates with local authorities the extent of local authority support particularly for the bus services. But the Scottish Transport Group operates as a business, with the inevitable cross-subsidisation from profitable routes to unprofitable routes and with advantages from some of its subsidiary operations in attracting revenue. This enables it to give a cheaper service than might normally be given based on the strict economics of a particular route being analysed. I think that this is a sensible idea and I would say to the noble Lord, Lord Margadale, who has suggested that certain routes should be put out to tender, that inevitably a few routes would attract private investment and would inevitably lead to the Scottish Transport Group being left with uneconomic routes. They would have to carry the burden of uneconomic services and there would be a danger of profitable services being hived off. Indeed, I go so far as to say that as regards school contract bus services in the Highlands sonic preference should be given to operators like the Scottish Transport Group which operate an entire system rather than simply giving contracts to the lowest tender.
I also want to compliment the Scottish Transport Group on the steps which it has taken in the last few years, in conjunction with the Post Office, in setting up the post bus service. It is always encouraging in the Highlands—as you can see it in Switzerland and Austria—to see the post bus taking parcels and people into the glens. In the Highlands there are now 126 routes served by the post bus service. That is a good thing and it has been encouraged by the existence of a special bus grant which I gather will disappear in 1984. I would like the Minister to comment on the consequences for the growth of this very economic and sensible service when the withdrawal of the new bus grant takes place in 1984.
The Scottish Transport Group suffers, like all nationalised industries, from two problems. First, it has local authority constraints on expenditure at present, with which we are all familiar. At the same time, in its capital development programme it is subject to the external financing limits laid down by the Government for all nationalised industries. It might be possible in this case to look at the possibility of the Scottish Transport Group, as a special case,
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having access to the market for financing some of its necessary capital expenditure in the construction of new ships, new piers, and so on. Indeed, the possibilities of leasing as a device for injecting private capital seems to me to be much more sensible than the proposition that you should sell off the nationalised industries to private enterprise. That would only result in the profitable services being sold off and the remainder would remain with the taxpayer.
In preparing for this debate I had a look at the annual accounts of the Scottish Transport Group and some of its reports. I must say that I am impressed by its increased efficiency. Flexible rostering is a subject much in people's minds at present. It has achieved flexible rostering in many of its ships and consequently has reduced the cost quite substantially. There is the question of double manning. There again it has set an example to British Railways in so far as it has achieved single manning on all of its bus services with consequent substantial saving on costs. This debate enables us not only to draw attention to some of the difficulties of the Highlands, but, I hope, to pay compliment to some of the services which are provided there.
6.8 p.m.
Earl Haig: My Lords, this short debate initiated by my noble friend Lady Elliot of Harwood is very welcome at this time of stagnation in the rural areas of the Highlands and the Borders. The noble Baroness and other noble Lords have mentioned the urgent need for farmers and for foresters to be able to increase their profits so that production can grow. In this way the rural economies will grow, the local contractors and tradesmen will find trade, the number of unemployed will decrease and the rural communities will start to flourish again.
I should like to refer to the problems and difficulties of some of the smaller estates in our area, particularly to estates who have no farms in hand and whose income is treated as unearned income. Many of these estates—of which I own one, and therefore I must declare an interest—have a long history and if nothing is done to help them we shall lose an important human element which is part of our Scottish heritage. The laird living on his property is able to care for and to understand his estate and the people connected with it in a way which is different from the visiting representative of some large investment company. It would be wrong to ask for privileges for anyone who is not motivated by a sense of duty towards his estate and to his community, and preferably landowners should learn their trade like anyone else and undergo some form of college training.
On many of these estates there is an ancestral home to keep up and no income is available for the proper painting of the house and buildings, nor even for the wage of an estate worker who is needed to repair stone dykes and other fences and to do odd jobs. These small estates need more income to provide at least one job for a general estate worker, and if the income from let farms was taxed as earned income as opposed to unearned income more money would be available for extra wage-earners. There would be a benefit to the unemployed as well as to the estates, which are hope-

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lessly understaffed and unable to cope with day-to-day work.
Let us take, for instance, a 1200-acre estate with two miles of stone dyke which needs rebuilding. Is it any wonder that the tenant farmer will want to replace it with a wire fence? The landowner's decision to rebuilt it might well have to be at his own expense. Let us take, for instance, the same estate with 80 acres of shelter belts which need thinning—the softwoods shading the hardwoods. Is he to call in an expensive contractor who will drive rackways through the narrow strips, or is he to ask his gardener—if he has one—to do the job in a proper manner; or is he just to neglect the woods so that he is left with a lot of whips and stunted hardwoods?
Let us take for instance a 400-acre farm with 8,000 yards of hedge to maintain. This maintenance is generally attended to annually on a half-and-half cost basis between landlord and tenant. I have heard it said that it now costs £1 per yard per year to maintain a good hedge. Is it any wonder that the tenant farmer will wish to root out as many hedges as he can to cut his half share of this £8,000 a year expenditure, gain extra acres and save tractor time?
What is the landlord to do, faced with such despoliation of the countryside which is contrary to all his instincts of conservation? The tenant's share of the expense is at least allowed against an earned income; the landlord's is costed against unearned income. Thus, the temptation to which the landlord is subjected is doubly strong. He will probably agree to the uprooting of the hedges because he cannot possibly continue to pay his share of the cost of upkeep out of the rent received for the farm. On a small estate he cannot afford the wage of the extra man, the cost of his house and the necessary mechanical equipment.
In spite of the temptations and because of their love of the landscape and a strong sense of responsibility to preserve the beautiful contryside that they have inherited, members of the CLA have conserved an estimated 100,000 miles of hedgerows at a cost which one can only describe as frightening. One wonders, as the private landowners are killed off by taxation, how many of the succeeding institutional landowners will be willing to continue this tradition of conservation at such a cost.
Legislation is needed to amend the present security of tenure laws which would make it possible, where there is a justifiable reason, for a farm to be taken back into the hands of an estate. In raising this matter I realise that I am touching on a controversial matter, but I do so with the best interests of farming at heart. It is because of the present security of tenure laws that so few landlords feel it safe to relet farms.
One of the recent recommendations in the Northfield Report was that temporary lets should be legal so that more farms would become available for letting. If the landowners' income problem and the shortage of vacant farm tenancies are—as I think they are—fairly widespread, then my remarks have a bearing on the farming, housing and employment prospects of many people and, indeed, on the future of the landlord-tenant system. Therefore, I ask my noble friend Lord Mansfield, when he replies at the end of the debate, whether the Government will respond to the recom-
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mendation in the Northfield Report about temporary letting of farms and whether they will consider tax concessions for landowners.
6.14 p.m.
Lord Stodart of Leaston: My Lords, I recall, when I first had the honour of addressing your Lordships' House, telling your Lordships why an episode in my youth had caused me to make a vow to speak only on subjects with which I was fairly well acquainted. Therefore, as all other noble Lords have said, I am most grateful to the noble Baroness for allowing us to have this debate. Noble Lords will, I am sure, forgive me if I, like one or two others, concentrate on agriculture.
I am bound to say that I find it extraordinarily difficult to paint a picture of the state of agriculture in Scotland that is credible. I would say that this year Scottish farmers have probably enjoyed the best harvest that they have ever had. I would not have believed it possible that on my own farm—which is an upland farm and, like every other farm, the most difficult farm in the country—I could have sold, at 14 per cent moisture content, 57 cwt. an acre of wheat grown at over 700 feet. if that has happened on my type of farm, it goes without saying that in the real arable areas the harvest has been immense. Prices of grain and stock are riding high, and yet I believe that this is in fact makeup on the face of farming which causes most people to think that everything in the garden is lovely. If you take off that makeup, I think that somewhat different features are revealed.
Some of your Lordships may remember a letter that was circulated last autumn by Mr. Duff Pennington, who is the convenor of the hill farming committee of the National Farmers' Union of Scotland. Many figures have been given today; but the example that appeared in his brief was perhaps even more sensational than some of the figures that have been mentioned today. The example was Upland Farm No. 3, as it was described, and it gave the audited accounts of a farm which had particular interest and reliability because of the almost static numbers of stock and acreage of grain grown within five years. In 1976 that farm had a gross output of £85,000; in 1980 the output had risen to £94,000. The costs of running it—and this does not have anything to do with capital expenditure—were £57,000 in 1976 and £103,000 in 1980. The overdraft in 1976 was £36,000 and by 1980 it was £97,000. That is very much in line—a multiplication of three—with many of the slightly smaller figures which the noble Lord, Lord Mackie, gave. The interest on overdraft charged through those farm accounts was £6,000 in 1976 and £17,000 in 1980.
The Agricultural Credit Corporation has for nearly 20 years been doing for farmers what the Small Loans Guarantee Scheme has just started doing for other industries. The experience of that corporation mirrors to a very accurate extent conditions under which farmers, and expecially tenant farmers, are operating. I have been chairman of that corporation for the last six years and I could quote many cases which confirm the story of that upland farm.
We then have the global figures from the recent White Paper. Twenty, or even 10, years ago I clearly remember that the output and the overdrafts in Scotland were a pretty steady and reliable 10 per cent. of those

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for the United Kingdom as a whole—not quite the Goschen formula of seven-eightieths, but not far away. Today, Scottish overdrafts, as the noble Baroness quoted, at £700 million, are one-fifth of the borrowings of the United Kingdom. The ratio has doubled. The reason is clear enough. The national farm income in Scotland was over 10 per cent, of that of the United Kingdom in 1977. It fell steadily through 1978–79 until it was only 2 per cent. of the United Kingdom income in 1980, and it has just started to recover in the last year. Why, one may ask, are farmers borrowing so much? With what I know from the credit corporation I could probably go further than my noble friend Lord Ferrers in a reply he gave last week, but I agree absolutely with him when he said that some of it may be in order just to keep going.
Hill farming has two particular burdens. The first one is that there is no alternative to it. When I took over my upland farm some 20 years ago it was almost solely a grass farm. It is now an arable farm. The bulk of its income comes from grain. This has been due largely to the new varieties of seed and mechanisation, and so on, which have made it possible to do that, but on the true hill farm there is no such alternative. Secondly, as many noble Lords have remarked, transport costs affect them most. I am bound to say that I shuddered this morning when I heard one of the many Budget forecasters who speak on the radio every morning, suggesting that the present drop in the price of petrol should give the Chancellor good grounds for putting up his duty.
Once you get a large overdraft like the one that I quoted for the upland farm, it really is almost impossible at present interest rates to make enough profit to get the overdraft down. You need first-class management and absolutely no bad luck at all. I believe that the solution to the problem—and it is a long-term one—is basically to conquer inflation and to get interest rates down. I believe that one wants to tackle with relentless vigour the closing of that time old gap, which has existed ever since I have been farming, between the results of the average farmer and of the best farmer. It is a very wide gap to this day. Thirdly, I am not at all sure that the time has not come when perhaps an examination ought to be made into whether it would not be of greater advantage now, when capital is so short, to substitute farm capital grants for the European system of cheaper credit in agriculture.
I know that my noble friend is very well aware of what I have suggested. I have noticed with the greatest pleasure his emphasis on urging the colleges to do what I have just suggested doing, and that is to concentrate on attempting to improve the efficiency and businesslike approach of the average farmer. It often astonishes me at ACC, when we ask our clients what interest they are paying at the bank, that hardly any of them know. They know what the cost of fertiliser is to a pound a tonne. They know the cost of feedingstuff. But they have not the least idea what interest they are paying. I get the impression that they would feel that to ask their bank manager what he was going to charge would be something as distasteful as asking the undertaker what it was going to cost to bury their wife. At any rate, I come back to wishing my noble friend good luck.
6.25 p.m.
Lady Saltoun: My Lords, like so many of your Lordships, I have been waiting for a year for the noble Baroness's debate, and I am very glad that she has been lucky in the lucky dip at last. I should like to say a few words about transport of people which will rather dovetail with what the noble Lord, Lord Taylor of Gryfe, has already said. Before the Beeching axe started to chop there were few places in Aberdeenshire and North-East Scotland which were more than about seven miles from the railway, because a network of railway lines spread north and west from Aberdeen like the sticks of a fan.
The services, however, were very slow and not very well timed. They missed every connection. Therefore, after the war, as soon as cars and petrol became readily available, people ceased to use the railway services and used their own wheels instead. The railways were axed on the grounds that nobody wanted them. We were told that we would never miss them because we were going to have such a wonderful bus service. Well, we did not get it. Now, to make matters worse, the bus company, which has a virtual monopoly of the bus services, has suddenly announced new timetables to rationalise the service.
This means that the more profitable routes are going to have faster services at the expense of the less profitable country routes. The regional council, although consulted about this almost a year ago, failed to consult the community councils and other interested parties, as other regional councils have done in a similar situation. Therefore, now, at a fortnight's notice, people in rural areas are faced with cuts in the bus service, and in some cases with loss of it altogether.
There are still in Scotland people who, for one reason or another, do not have a car or cannot drive. The high cost of petrol and maintenance has driven a number of cars off the road, and you frequently get a situation where the family has a car but the husband does not let the wife drive it, or the wife does not drive. What are they to do?—because some people rely on buses to get to work and some people rely on them for essential household shopping, particularly now that the price of petrol has driven many mobile shops and vans off the road. What will happen? I am afraid that what will happen is that people will leave the villages and the countryside and drift to the towns, and rural communities will die. Schools, pubs, churches, village shops will close and as a result farmers will be unable to get labour because there are no facilities for the families.
We really need some kind of overall transport policy. I feel strongly that we need co-ordination between bus services and our remaining train services, which I am most relieved to hear the noble Lord, Lord Taylor of Gryfe, tell us are probably not going to be done away with in the near future. For example, on the new bus timetable the last bus from Aberdeen to Fraserburgh will leave Aberdeen at 6.45 in the evening. The London day train arrives in Aberdeen at 7.30. Therefore, any-body who has not got a car will have to walk, or stay the night in Aberdeen, or take a taxi, which is very expensive.
Co-ordination between bus services in different regions is important, especially where they are run by different bus companies. More imagination is needed

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when considering how to provide services in rural areas more economically. I was glad to hear the noble Lord, Lord Taylor, mention postal buses, and they can be a great help in an up-and-down-the-glen situation. The use of smaller and mini-buses might be the answer in some rural areas where the demand is not big. It is not everywhere that a 50-seater bus is needed; there are places where a 20-seater or a smaller vehicle would do quite well. We desperately need more and better transport, not less and less. Who is to do the coordinating? I hope the Government will help in that connection, otherwise the outlook is very depressing, especially for those who cannot afford to travel by taxi.
Although the principal subject of the debate was, I think, intended by the noble Baroness to be agriculture and transport, I wish to comment on forestry, which is one of Scotland's most vital industries. According to my newspaper of a week or so ago, the Government announced that the Forestry Commisssion would take overall responsibility for forestry research but would not appoint a chief scientist to co-ordinate activities, as the Sherfield Report had recommended, nor would they be putting more cash into forestry research. That is sad news because this country desperately needs to produce more of its own timber and there are large areas of Scotland where forestry is one of the few industries and possible sources of employment. More money for research, better grants to encourage planting, and pulp mills to take thinnings are urgently required. I implore the Government to give those matters a very high priority.
6.33 p.m.
Lord Belhaven and Stenton: My Lords, I am grateful to my noble friend Lady Elliot for initiating this debate. It is certainly timely and I am sorry it has taken her so long to get the subject discussed in the House; but better late than never. I hope your Lordships will forgive me if I do not follow most noble Lords into the realms of agriculture. I was a farmer for 20 years, but that was some time ago, and my main interest for the last seven years has been as a hotel keeper in the Island of Islay. I hope noble Lords will forgive me if, in a limited debate, I confine myself to that small part of the Highlands, and I hope that a brief exposure of the difficulties being encountered in the Island of Islay may be helpful, as Islay's problems are not Islay's alone but reflect in miniature the very serious economic state of the many small and isolated communities in the Highlands and Islands of Scotland.
No one can live in an island for longer than a few days without discovering that the principal topic of conversation, which rivals even the weather, is transport by sea and air and its cost and availability. Most consumer goods cross the sea and most goods produced on the island have to do so as well; thus, both as consumers and producers, the inhabitants of an island, including farmers (who we hear are in difficulty, anyway, on the mainland) tend to operate at a double disadvantage, as what one buys is more expensive than it is on the mainland and what one sells has to take into account the added cost of transport.
In a recession such as the one we are now going through, it tends to mean that profit margins may not be just cut to the bone but frequently cease to exist
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at all. And to make matters worse, property tends to fall, and is falling, in value and may even become unsaleable, and I have come across cases of that. If your Lordships doubt me, I suggest you do a tour of the hotels in Islay, when you will find out which one of them is not for sale. They have long since given up advertising because they cannot afford it.
On the subject of transport by sea, the suggestion of my noble friend Lord Margadale was very good, but I will explain to the House why we are now saddled with Caledonian MacBrayne having a monopoly once more on the Islay route, which they lost for something in the region of 10 years. Until the mid '60s, David MacBrayne, as it then was, was the only sea carrier to Islay. It operated a side-loading boat which did the crossing in about three hours once a day. It took a long time to load and unload at each end, as your Lordships may imagine. It had a monopoly, was able to charge what it liked, and did so.
The intervention of a private company, Western Ferries, changed things dramatically. They came in with a drive-on drive-off boat and a quicker and more frequent service. They also cut the fares for freight and passengers by about half, and MacBrayne's was forced to follow suit and to convert its boats to drive-on drive-off. So far as I know, it cut its fares only on the Islay route, charging the same high rates on the routes on which it continued to have a monopoly. Western Ferries, having transformed the transport situation, proceeded to find themselves in difficulty. That was solely because MacBrayne's still continued to receive the whole subsidy for operating the Islay route. It is interesting to note that, even then, MacBrayne's failed to break even, whereas Western Ferries either broke even or made a profit, as indeed they were obliged to do.
In 1975 Western Ferries applied for a share of the subsidy for the Islay route, to which they were entitled by natural justice. The then Labour Government did not agree, their argument being that it would be uneconomic to split the subsidy, though how they arrived at that conclusion escapes me. Western Ferries then convincingly demonstrated that, with the amount of subsidy MacBrayne's was receiving, it could operate the route without charging passengers at all. No one in authority took the slightest notice. So the last and present Government have continued to pay the whole subsidy to MacBrayne's, with the result that Western Ferries have been forced off the route and MacBrayne's once more have the monopoly. I gather from reading the local paper today that MacBrayne's have undertaken not to raise their fares until the end of the year, which at least is optimistic, though I must say it surprises me.
The other method of crossing the sea is by air transport. The route was taken over four years ago from British Airways by Loganair, who run an excellent service with small aeroplanes, providing two flights a day and, in the height of summer, sometimes three flights a day. Loganair endeavour to arrange their flights so that people who wish to spend several hours at either end, in Glasgow or Islay, can do so and return on the same day. This worthy objective seems to be being obstructed at present by the Civil Airports Authority, and I will quote from a letter I have received from Captain McIntosh, managing director of Loganair:

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"We timetable our flights to land at Islay as soon as the airfield opens in the morning, and to take off again at the last possible moment before it closes, in order to give our passengers the longest possible working day at either end. The CAA have a rule that they do not close the airfield immediately after the aircraft takes off but keep it open and fully staffed for 15 minutes. If the flight is held up by weather, air traffic delays or other circumstances totally outwith our control, and takes off only 14 minutes before their official closing time, we are then charged for a quarter of an hour's extension of airfield hours. This charge, when added to navigational service charges at Glasgow, landing fees, apron charges at Glasgow, passenger handling charges and Eurocontrol charges, can quite often absorb the whole passenger income from the flight".
Surely something could be done about this absurd situation. I do not know why the Civil Airports Authority is doing what it is doing; perhaps it is union pressure, perhaps it is something else. But in a small community we really cannot afford it.
The facilities for tourists on the island have improved dramatically over the last seven years. There is now on the island one first-class hotel, with cottages attached, and up to international standards—something quite new for Islay. The smaller hotels have mostly been improved. But in spite of that, and in spite of considerable assistance by the HIDB, the tourist situation is very bad. In fact I was told last May by an official of the HIDB that not a single hotel in Islay had made a profit in 1980—and that was certainly true of my very small establishment. That kind of thing can be carried on for a year or two, but it cannot go on indefinitely. Ironically, Laker's collapse might help, since it had become so much cheaper to go abroad. The return air fare from London to Islay is now £162. I went on holiday from London to the Canary Islands (Las Palmas) in January for £135. Well, my Lords, which one are you going to choose?—and that is the kind of fact that Islay hotels have to struggle with. Frankly, I cannot see any answer.
Islay's principal claim to fame is its distilleries. Blended Scotch whisky is made up of varying amounts of Highland, Lowland and Islay whisky, and Islay whisky is an essential ingredient in all blends. The amount of revenue which the island brings in to the Excise is a continual cause of speculation and confusion—a situation which I suspect is very satisfactory to the Excise. Suffice it to say that the direct and indirect revenue which the Excise receives from Islay must be very considerable, as also must be Islay's contribution to exports and the balance of payments.
Despite that, the distilleries have been hit hard by the recession. One has closed down, one is, I believe, on the verge of closing down, and all of them put their workers on the dole for eight weeks last summer. They are also all on short-term working. Regrettably, the Government contribution to the situation has been swingeing increases in whisky tax in two successive Budgets. I understand that the Excise revenue actually dropped by some £60 million as a result of the first increase, and I imagine that something similar has happened in 1981. One is left speechless at the pointlessness of the whole exercise.
To sum up, I think one must conclude that the situation in Islay, and, by implication, in the other Hebridean islands, is serious, if not yet desperate. Let us hope that by sensible and constructive policies—which have often been absent in the past—the worst can be avoided and Islay can become the happy and prosperous island which it ought to be and which it deserves to be.
6.44 p.m.
Viscount Thurso: My Lords, I join in the general gratitude expressed to the noble Baroness, Lady Elliot of Harwood, for securing this debate for us and for setting its range so widely. As my noble colleague Lord Mackie of Benshie has already said, without farming the economy of the upland areas would collapse completely. But without everything else, the community life of the upland areas becomes hard even for the farmers to put up with, and I should like to take full advantage of the width and range which is given to us in the debate to talk about one or two things which have not so far been touched upon.
Two hundred years ago this year the last of the repressive measures designed to break the spirit of the Highlanders and to wreck the economy of the Highlands after the '54 was repealed. At no time in the two centuries which have passed since then have the Government at Westminster presided over such whole-sale devastation of the Highland economy as is taking place today. Two hundred years ago the destruction was deliberate. It was the cold, calculated repression of a rebellious subject nation by a distant, but nervous, Government. But today, in my view, Westminster is causing the destruction by carelessness, resulting from blindness and bigotry. Today Westminster is presiding over the scrapping of a quarter of a century of effort to solve once and for all the "Highland problem", and is throwing away the hard-won successes of those who, like myself, have devoted their lives to the development of the Highland economy. The destruction is beginning to gather the momentum of a falling line of dominoes. One by one the great milestones of success are crumbling to the dust.
The pulp mill at Corpach lies still, while piles of timber grow on the quayside at Inverness awaiting export to Scandinavia, there to be pulped and turned into newsprint, only to be sold back again to us in return for a profit on the value added. Meanwhile, the heart has been cut from the community at Fort William, with much the same result as the like process had on the victims of the Incas' sacrifices.
Another sacrifice has just taken place on the shores of the Beauly Firth to satisfy the bloodlust of the high priests of monetarism, and the death cries of the victims are still echoing through the glens of Ross and Sutherland. The smelter at Invergordon, hailed in 1968 by no less a person than the noble Lord, Lord Ross of Marnock, as
"a tremendous step which is really redressing the balance of history",
has closed with little warning and indecent haste. Once again a carefully built up industrial community lies devasted. A dozen years of development lie wasted.
Even as the bloodstream of that victim congeals upon the altar, other victims are being prepared for sacrifice. The loss of traffic on the railway north of Inverness caused by the smelter closure brings threat of closure to the whole Highland line. In spite of what the noble Lord, Lord Taylor of Gryfe, has told us, it might be that British Rail does not want to lose the Highland line, but it might very well be forced to lose it if the traffic is not there to justify it. Indeed, with the added excuse of losses arising from the recent rail

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strike we are even having our minds prepared for the loss of the line from Perth northwards. The domino effect is starting to show.
"No matter", cry the high priests, "these sacrifices will propitiate the gods who dwell in their Olympian fastnesses around Threadneedle Street. It is good for you miserable peasants if a few of you get sacrificed and it will keep the rest of you out of mischief and busy with your traditional industries of farming and fishing, of cottage crafts and tourism ". But, my Lords, what has happened to the "traditional" pursuits? Our farming is now so highly modernised and mechanised and boasts such a high degree of productivity that it is incapable of supporting community life. All over Scotland rural schools and rural bus services are closing. Village halls, village shops and even village police stations are closing down because of the increased efficiency of Scottish farming. There are more sheep and cattle per acre, more tons of barley and potatoes grown per acre by fewer and fewer people per acre every year in response to the call from the rest of the country for more and cheaper food.
What then about our fishing industry? Indeed, my Lords, what then! I live a mere 20 yards from an ocean out of which my great great great grandfather boasted could be taken over 30 varieties of fish and seafood to grace his table, an ocean on which sailed and fished the great herring drifter fleets of my youth, an ocean on which sailed the inshore white fishing fleets which caught the haddock, cod and whiting in the 1950s and 1960s. What is there now? If I go down to Thurso Harbour to buy fish for my supper from the fish shop which occupies a corner of the great echoing empty fish market which was built just after the war, the chances are that the filleted haddock which I shall be offered will come out of a frozen box brought up from Aberdeen, 200-odd miles away. The fish market itself long since ceased to buy catches from Thurso fishermen, and even the market across the bay at Scrabster now buys only from stranger boats. The 'teens of seine netters which once fished out of Thurso and Scrabster fish no more.
"All right", you cry, "but there is tourism. Surely tourism can keep you all going. After all, look how beautiful your bens and glens are without any nasty people in them "; to which I would reply that a very quick way of going bust would be to set up an hotel in the Highlands and hope that the glens and the bens would fill it for you. Tourism is suffering both from its own in-built problem of a short season and from the modern problem of a diminishing rail and air service saddled with ever-increasing fares. You can add to that the rising cost of petrol and the fact that four-star petrol in Thurso costs 173p per gallon when in London it can be bought as low as 144p per gallon. Air travel is no better. You can fly to Miami for a holiday for less than you can fly to Wick. Going home, partly by train and partly by air, will cost me £120, which would give me a week's holiday in some places, air fare and all.
Then, if you do decide to holiday with us in the Highlands, what are you to do after the sun sets behind the ben and the darkness creeps over the clachan in the glen? What nightclubs and cinemas, restaurants and discos can afford to exist on a season consisting of half
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July and August? None, of course; so there are none, and you take quietly and gloomily to the bottle, like many a highlander does all the year round.
So there remains this Arcadian ideal of the little cottage industry—the loom clattering in the wee lean-to behind the picturesque but and ben; the potter at his wheel; the turner at his lathe. But what does the poor devil do about selling his product? There are no tourists to buy for three-quarters of the year, and how is he to find time for marketing his product, always assuming that he has the expertise, in between times of manufacturing it? No, my Lords; smaller industries stand no better chance intrinsically of success in the Highlands than do large ones. The mistaken idea that they do derives largely from the fact that a self-employed craftsman can usually be relied on to work longer hours for less pay than the same chap in a properly organised manufacturing firm. Once his bank manager discovers that he can no longer sell his goods for what it costs him to run the business and to live, that is the end of the matter and another potter lies broken on his wheel.
I paint a gloomy picture, but the scene which I survey is gloomy. There is no real ray of hope that I can see coming from the Government. That is the gloomy part about it: the apparent inability or else unwillingness on the part of Her Majesty's Government to support the Highlands and to support through temporarily difficult times the growth areas that have been carefully built up by their predecessors and by other dedicated people in the Highlands over the last 25 years. This fills me with gloom.
For instance, the Highlands are energy-rich. There is hydro-electricity, atomic electricity, oil and gas all available; and, indeed, now that the smelter is no more, there is a surplus of electrical power in the Highlands. There is wave power to be exploited and there is wind power to be exploited. Both the making of wood pulp for paper and the smelting of aluminium are highly appropriate industries for the Highland area. In the case of pulp, large forests have been and are being established which can supply the raw material for a pulp mill, and this raw material plus energy is what is needed for such an industry.
In the case of aluminium, the raw material in the shape of alumina is not present but the energy is, and my information is that the smelter design at Invergordon was excellent for its purpose. The medium and long-term outlook for an aluminum smelter is good. The problem is only in the short term, and in the complicated and possibly unsuitable deal which had been made about the supply and cost of electricity. It should still be possible to save the Invergordon smelter, and Sir Kenneth Alexander, late of the Highland Board, is on record as saying, "The aim of restarting the smelter is the right, indeed the only aim that can prevent 'the major disaster' to which the Secretary of State referred becoming an enduring feature of the area around Invergordon, with social blight compounding economic hardship".
The Government may have put themselves into a very difficult position by allowing British Aluminium to keep the land and buildings when they negotiated the settlement which allowed the closure. Certainly if they attempt to re-open the smelter in the hands of

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British Aluminium or of any other company a better arrangement over the sale of electrical power will need to be worked out. Possibly the addition of two hydro-schemes which have been shelved could help to provide a solution, or perhaps the intriguing solution of using Dounreay, which not only has a designed output equal to the smelter's designed demands but also has a transmission line from Caithness to Beauly.
Finally, Her Majesty's Government must really address themselves to a long-term solution of the Highland transport problem. We cannot live and develop with constant and recurring threats to our rail system. Not only should it be made secure but its services should be improved to meet the transport needs which exist. We in the Highlands are willing to use the rail, and for the tourist industry it is doubtful whether it would be possible to think of doing without it.
I therefore make what is intended to be a helpful suggestion. Why not treat the railway as though it was a trunk road? The main line up the centre of Scotland is an important trunk route which must not be placed under constantly recurring threat. The Government should therefore guarantee its upkeep and maintenance. I feel sure that such a guarantee would allow British Rail to offer a satisfactory and reliable service upon it.
Then, lastly under transport, it is quite wrong that, in a scattered area ill-served by public transport, petrol should cost nearly 20 per cent. more than it does in an area where there are masses of buses, tubes and trains. Especially does it seem unfair to us who look out upon the flares burning off the surplus gas from Beatrice and the Flotta terminal.
I am most grateful for the opportunity which the noble Baroness, Lady Elliot, has given us to debate in your Lordships' House these problems which face us in the upland areas of Scotland. In drawing the attention of your Lordships to those which particularly affect the Highlands, I seek no advantage over other areas and other parts; I seek only an equal chance with other parts of Scotland for that area in which I am particularly interested, that area where I live and that area which has so much to offer in return.
6.57 p.m.
Lord Burton: My Lords, I apologise to the two or three noble Lords whose speeches I missed when I was called out of the Chamber for a few minutes. I shall certainly read their speeches with interest. I, too, should like to add my very sincere thanks to my noble friend Lady Elliot for initiating this interesting debate; but unlike some of my noble friends, who said they regretted the delay, I should like to say that I rather welcome it at this time because I think this is a particularly opportune moment at which this debate should be held. So often different speakers talk on the same subject in these debates as they happen to be topical or perhaps because there has been a lobby document sent round to a number of your Lordships. As a result, I am trying to refrain from talking on the NFU circulars, but this does not mean that I do not agree with them. I think I agree with them in their entirety.
I have just given up after my two-year stint as a branch chairman of the Scottish National Farmers' Union, so
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I have had my thoughts fixed on the overall agricultural situation in Scotland. The first thing that has struck me is the failure to keep social aid separate from agricultural aid. Might it not help to settle the difficult problem of agricultural support in the EEC if these two different aspects were separated?
After all, my Lords, possibly the biggest problem is the milk surplus in Europe, and this appears to be entirely for the subsidising of what can perhaps be called "European crofters", to permit them to continue to exist in rural areas. In the Highlands, of course, we heavily subsidise crofters, and apart from pampering this small section of the community we pay out substantial sums each year to a Quango to look after them, in the shape of the Crofters' Commission. I am not arguing here the rights or wrongs of such payments, for it may well be socially right to do this and to retain the population in the rural areas.
There is no doubt that a magnificent piece of work has been done over the years by those who work the land, and I say that advisedly, for not only is it so of the farmers themselves but also of those who work for them. There is such a marked contrast between the factory worker knocking off when the hooter goes and the ploughman who will often stay on to finish a field. What a benefit it would be to the country as a whole if one had flexible rostering in other industries as we have in agriculture. I refer to the train drivers, guards and the baggage handlers at Heathrow. It therefore comes as a particularly bitter pill to the agricultural community that it has constantly increasing prices of commodities completely outwith its control: transport which cannot be modernised because of restrictive practices; electricity prices increased by Government policies and the 20 per cent. plus annual increases in rates which, in many cases, are subsidising the urban dweller.
We have a small caravan site we use to try to subsidise our farming enterprise. Last year, we had to pay £3,150 in rates on that caravan site—for which we get absolutely nothing. We have to provide our own water supply, drainage and we do all the scavenging ourselves, although five miles down the road the borough's own caravan site gets scavenged daily, has water and drainage laid on. I think it is important that this sort of thing is brought home to those who are advocating rating of agricultural ground. It should be borne in mind that we already pay very substantial rates and they are ever increasing at a terrifying rate.
In this respect, I should like to compliment my honourable friend the Secretary of State for Scotland who only last week turned down a planning application where our district council wanted to waste £1 million on building a golf course on good agricultural ground. The £1 million made no allowance for the annual maintenance outlay, which would also have to come off the rates. Another example of lack of regard by our local authorities for expenditure arose recently when a Dutch firm approached the Highland Region to consider reclaiming the Beauly Firth for agriculture. The cost of the sea walls and the pumping would be £33 million, which would be at least eight times the price per hectare for which you could buy land in the open market; and that was before one put in the farm buildings, internal drains, levelled the land and fenced it and all the other many costs of re-

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clamation. The total cost would probably be twice the total net profit of all the farms in Scotland in 1980. Despite this, the Highland Region have allocated £40,000 for further investigation of this project. The Government really
must clamp down on this waste of public money. It may be possible to afford it in the South, but not in the North.
My Lords, we then had the question of fuel prices. As other noble Lords have said, surely something can be done to avoid the enormous discrepancy between the prices at which our rural garages are supplied by the petrol companies and those in the urban areas. Not only does this discrepancy hit those who wish to live in the country but it reduces the amount of fuel sold by rural garages, making their pricing extremely difficult. If they are left with full tanks, they must sell at a substantial loss, which only brings further hardship to the rural areas if these stations have to close. I know there are problems attached, and it may be that abuses would be found, but one of the biggest boosts the Government could give to rural areas would be to have various tax bands on fuel prices.
This would not only benefit those resident in the rural areas, who depend so much on their own transport (as there is no public transport) but also mean that there would be far greater incentive to those wishing to holiday in those areas. We have heard several noble Lords say what a desperate state tourism now is in. To put a further tax on petrol and diesel—and my noble friend suggested that this might happen—would be disastrous. It seems that a holiday for a fortnight in Greece or Tenerife, as several noble Lords have said, can be had at the same price as the London-Inverness air fare. A fortnight in the Aegean, with return flight and full board costs £163. The air fare London-Inverness return is £161. It just does not seem to add up. How can we expect anybody to holiday in the North when they can go off to guaranteed sun rather than coming perhaps to wind and rain in our part of the world? The Islay air services may have difficulties, but the Inverness-London service must be the Cinderella of all the British Airways services.
The collapse of the pulp mill at Fort William and of the smelter at Invergordon were not unexpected. The objectors to the smelter before it was built forecast the probability that it would not be viable; but then we had Professor Grieve, chairman of the Highland Development Board, talking about his "string of pearls" around the Moray Firth—and now the biggest pearl has broken the string. We hope that the Government have picked the right chairman on this occasion. At least, they have picked a businessman and I am sure we all wish well to Mr. Cowan and that he will be able to do something about revitalising the Highlands.
However, it must be borne in mind that agriculture is the backbone of all activity. It is one which will survive, it must do so; others, like oil, will go, or they will be exhausted. Our agricultural and forestry workers are paid far less than the most menial workers in either the pulp mill or the smelter. It may be of interest to note that car firms in the Invergordon area have their order books full at the moment as the smelter workers plan to "blow" their redundancy
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money so that their capital can be reduced to the level at which they can start drawing unemployment benefit. Why should the primary industry be kept on such a low level of subsistence when it has done so well for the country?
It would be churlish not to thank the Government for the help which we got last year—and my noble friend Lady Elliot has done so to some extent this evening—and, in particular, for the sheep compensatory allowances and the suckler cow premium and, indeed, for securing last year's price review settlement expeditiously early in the year. But suckler cow numbers are still falling and it is to be hoped that the Government (who are permitted to do this by the EEC) will further help this section of the industry. Further, it is important for us to know what prices we are to get for our products in 1982; and there is a real worry that this year's review is being used as a political pawn and that there will be long delay in reaching a settlement.
As my noble friend Lady Elliot has said, bank overdrafts are still rising at an alarming rate, probably 50 per cent. higher than in 1979. This has resulted in a massive drop in capital investment which bodes ill for the future. My noble friend Lord Ferrers recently told your Lordships that between May 1979 and December 1981 the retail price index rose by 43 per cent. Farm-gate prices rose by only 19 per cent. How can the farming industry meet that sort of competition? Many of our problems arise from the long distances over which we have to transport our materials and products to and from the area, as was forcefully brought out by the noble Lord, Lord Taylor of Gryfe.
I hope that the Government will bear in mind that it is vital to the Highlands that our infrastructure is maintained and, indeed, improved and that, when there is an opportunity of getting a large proportion of this paid by Europe in the form of an ADP, surely we should not miss the opportunity, even though Government money is tight at the present time.
I will end with an encouraging story. The north of Scotland can produce good malting barley. There is a limited home market for this and our market on the Continent was somewhat spolied by some merchants putting in bad barley two years ago. This autumn, a local grain co-operative and one of the merchants sent representatives out to meet German brewers. The co-operative representative spoke fluent German and they had considerable success. This sort of enterprise is to be highly commended, but I fear there is not enough of it. The noble Viscount, Lord Thurso, referred to the "rebellious subjects" from the North. I hope that my noble friend on the Front Bench will not consider that he and I are rebellious subjects requiring financial strangulation. Agriculture has done well, my Lords. Surely, we should invest in success.
7.10 p.m.
Lord Home of the Hirsel: My Lords, all of us have shared in the luck of my noble friend Lady Elliot in being successful in the draw for this debate and we are grateful for it. The only trouble when one follows my noble friend in her own pet subject of agriculture, is that there is virtually nothing left to be said. The noble Viscount, Lord Thurso, said it all with almost

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Churchillian rhetoric, only descending every now and again to a homely phrase like "going bust". The rest of your Lordships who spoke were able to make some points which I hope will be of use to the Minister of State when he considers future policy.
If I had to choose in the context of those measures which could best assist Scottish farmers in their business of the production of food, I have no doubt at all as to the priority. It is the same as that which was chosen by my noble friend Lady Elliot: it is the reduction of the rate of bank interest. That overall can do more good to the farming community than anything else. One noble Lord after another has made the point that the gap between prices and costs over the past 10 years has left the average farmer with too much leeway to make up and he cannot conceivably cover his expenses by the sale of his crops.
Borrowings of late—and the noble Lord, Lord Mackie of Benshie, and my noble friend Lord Stodart have both given figures which carry absolute conviction in this respect—by the farmer have not, I regret to say, been made in order to plough back capital into the land, but to cover the interest rates on previous loans. That is a very unhealthy situation indeed in which Scottish agriculture finds itself.
The point is well known to the Chancellor of the Exchequer and I shall not "flog" it. Although agriculture is a very large industry, very often its voice sounds small against the general industrial clamour. Although the price of livestock has improved this year—and that is good—it is important that this question of interest rates and their impact on food production in Scotland should be made plain again and again to the Government of the day.
My second point relates to the impact of Common Market policies on the stock rearing areas in Scotland—a point again made by my noble friend Lady Elliot. There can be no doubt that the sheep régime has come to the rescue of the lowland sheep farmer—and just in time. But there are other schemes of great merit. I personally, with a good many of my neighbours in the Borders of Scotland, have had experience of the Farm and Horticultural Development Scheme. It has certainly resulted in the injection of fresh capital into those funds to which it has been applied and it has significantly improved their productivity. It is a good scheme.
I have not had first hand experience of the agricultural development scheme which my noble friend suggested might be applied to the Highlands and about which some other noble Lords have spoken, but I have heard of its being well spoken of in Ireland, in areas comparable to the West of Scotland, the Western Highlands and other places. I have been told that there are procedural difficulties in its application to the Scottish Highlands, in that the European Commission will not disclose the details of their proposals until they know that the Secretary of State for Scotland will approve the scheme. The Scottish Office feel that they cannot give approval before it is officially given the relevant facts by the Commission. No doubt by my noble friend at some point, if not this evening, will be able to clear up that matter. To approve of the agricultural development schemes or to turn it down on its merits is one thing, but it should not be held up by some protocol procedural
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wrangle. If that is a fact I hope my noble friend will be able to cut through this red tape for the scheme should not be delayed in this way.
My final point has not so far been referred to by anybody. It is a minor one but I think that it is important. Now that the prospects for sheep are beginning to look better, it is more important than ever that our sheep flocks should be free of disease. There exist a good deal of scab and a lot of ticks. The clean areas in Scotland are getting very concerned that these diseases will spread to them. I think that there is a very strong case for the reintroduction of compulsory dipping. I hope that the Scottish Office will consider that.
I hope that my noble friend will be able to consider all the suggestions that have been made tonight. Perhaps particularly the noble Lord, Lord Ross of Marnock, will give some attention to the points which have been made about the Common Market and its impact on Scottish agriculture. I do not imagine that he has ever in his life been bound by a party manifesto mandate—he is far too wise a man. However, if his noble friends or those in another place attempted to pursue the policy of withdrawing Britain from the Common Market, I hope that he will give them some facts as to how the Market policy applies to Scotland in the context of agriculture. I echo what my noble friend Lady Elliot said about the Government having done well. It is one of the happy aspects of life, however, that it is always possible to do better.
7.17 p.m.
Lord Ross of Marnock: My Lords, this is the first general type of debate that we have had on Scotland since I arrived in this House about two and a half years ago. We have to congratulate the noble Baroness in having been fortunate enough to bring it to us. Her patience was not always that evident but her persistence certainly had to be admired. She certainly set the tone when she suggested that we should forget all about party politics; let us get down to the question of these matters. That is a very good idea. But occasionally when you have somebody like Lord Burton, party politics will out. I could hardly believe my ears when I was more or less being challenged by the noble Lord, Lord Home of the Hirsel, to forget something about some manifesto.
I was not going to quote very much from the National Farmers' Union; but for his benefit I shall quote this:
"Entry into the Community has exacerbated the problems of
remoteness from the markets".
This is one of the basic points that we have been talking about today. Scotland was remote from Westminster, but we are much more remote from Brussels.
I have not heard anything here to convince me that this gleam of hope that we have in the sheep régime clears the path. One person mentioned lime and the lime subsidy. Of course that was withdrawn because of the EEC and that was an important matter that I hope to come back to later. But I was very glad to hear that bloodthirsty speech of the noble Viscount, Lord Thurso. What poetic prose we had as he bludgeoned everyone and visioned Westminster looking upon these people in the Highlands as lowly peasants. It would be far better to quote Burns—the address of

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Beelzebub when he welcomed a Highland nobleman forward into Hell:
"… What right hae they,
Tae meat or sleep or light o' day?
Far less to riches, pow'r, or freedom,
But what your Lordship likes to gie them."
I was glad he broadened it out because I want to start with problems arising in Scotland. There is one particular problem at the present time and that is the background to everything that has been said: the problem of unemployment. Who would have thought we would see the day when there were 345,000 unemployed in Scotland? We have 22,000 school-leavers still on the register and about 40,000 doing what those on the other side of the House used to call "not real jobs", in training and youth opportunities. I shall not decry the youth opportunities—the position would be very much worse without them—but here we have a position where the Secretary of State is saying that we are going to have 100,000 places for young people in about two years' time; but when you look behind that fact you see that a few years ago, after they had finished the youth opportunities programme, 78 per cent. of them walked into jobs. The figure today is down to 29 per cent.
I am concerned about this. I am sure the noble Baroness read a report the other day in respect of careers in the Borders. There are fewer jobs in agriculture for the young, fewer jobs in textiles and, if that was not bad enough, the position is even worse when it comes to clerical jobs and jobs in electronics and engineering.
As regards the Highlands, questions have been raised time and time again. It is true that both parties have every reason to feel satisfied with what was created and established at Corpach, at the Moray Firth, at Invergordon and at Dounreay. Perhaps we should have had a few words from the noble Lord on that subject. It was said that the work of the Highlands and Islands Development Board had helped to turn the tide of depopulation. During the first 60 years of this century the Highlands lost a quarter of its population. We stopped the tide, and the tide was going the other way, but we have now got this growing resentment in the Highlands about what has happened.
Anyone who read the Scotsman today could see how cheaper power could wreck the smelter rescue—and I pay tribute to the civil servants who are now working hard to get a new operator in there. Now we discover that if they do get this formula for new powers we should get one equal to the other two power stations that were built about the same time. However, that very fact may allow BA to put a virtual veto on that new operator coming in because they own the smelter and the land, and whereas its break-up value was estimated at £5 million, by not striking the proper negotiating position at the time, officials have created the position that if a new operator is coming in it is suggested that the price will go up to even as high as £30 million, which would torpedo the whole operation. I will not quote the whole of that situation, but it is the kind of thing that rouses my anger, and which will raise anger in the Highlands areas.
What does that mean? It is all very well the noble Lord, Lord Taylor, saying that all is well in the railway
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field. I do not know when he talked to them, but the loss of £3 million worth of freight to the smelter frustrates all the capital expenditure they have been involved in.
Lord Taylor of Gryfe: My Lords, I am sorry to interrupt—
Lord Ross of Marnock: My Lords, I am sorry I have not got time. It is a short debate and I want to race on. That is a very serious point from the point of view of British Rail. That is one of the costs of the loss of the smelter. But it is not the only one. There is a cost in jobs, in benefits, in loss of taxation: that is about £9 million—and that is only the smelter jobs. If you take the knock-on effect which the noble Viscount, Lord Thurso, spoke about, it is very much higher than that. Then there is the loss to the local authority. I am sure the noble Lord, Lord Burton, will be very worried about his rates and how they are going to be affected. The loss of the smelter means a loss of £700,000 in rates to the local authority. These are serious matters, and in fact it has come back to what I and others have said before: that it is easier and cheaper to save jobs than it is to create new ones.
From the morale point of view, just think of Stirling University: there are 7,000 young people wanting to go to university and there are only 600 places. That is a problem arising in Scotland. We are going to have our best qualified and equipped young people with nothing to do; and from a social and morale point of view, that it is a serious thing. In respect of how we tackle this problem we should be thinking not about the next election but about the next generation. We should not grudge the money it would cost to get us out of this difficulty. I am very much concerned about the whole social position, the whole attitude and character of the Scotland of the future, if this kind of thing goes on.
It is true that the land will prevail—the land will still be there—but will the people be on it? That was a question raised by the noble Lord, Lord Mackie of Benshie. The figures are really staggering: the figures of borrowing, of income, of interest rates and debt. The debt is bad enough, but meeting it by borrowing is worse. There is no future in that, and yet here is an area which every Scot values, and not just for the Highlands and the scenery. May I say there are probably more Highland votes at stake in Hillhead than there are in Ross and Cromarty? Just look at the lists of policemen, teachers and other people—you have just got to look at me, where the Rosses came from. We still have that attachment and concern not just about places but to people in them. They demand a decent standard of life, and if they do not get that they will not stay there. The noble Lady, Lady Saltoun, suggested there will be a drift away from the villages if we do not face up to the problem.
The problem of transport is intractable. It has been put forward by the Highlands and Islands Development Board that there should be a road equivalent tariff. But that does not suit every area in the Highlands. We shall need to face up to the question of the actual cost of fuel. I wonder how many of your Lordships were in this House in the 1950s, when we had something called resale price maintenance, which was

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abandoned by the party opposite. The only thing we have left in the resale price maintenance field is the cost of a stamp: whether you are sending a letter from Glasgow to Edinburgh, Glasgow to London or Glasgow to the Highlands, it costs the same amount. So it has evened out in relation to the people who use it most. They pay for the remoteness in areas where density is so low. Resale price maintenance made sense from the point of view of the areas that we are talking about today. We shall need to return to something like that, if we are to make life possible.
The hill farmer in the less favoured areas, especially in the remote Highlands—this applies equally to the Borders—needs roads, but he does not have them. Much of his own farm road is his responsibility. By the way, I hope that the local authority maintain that road for which the noble Lord, Lord Burton, does not like to pay rates. I hope that they police it, too, for which he pays rates, and that they also provide an educational service for the people in the area. He simplified the rates problem no end. But the inputs have gone up in price, and they are further upped in price by transport.
I was very pleased to read in the paper about the need to try to increase the dairy numbers, particularly in the Islands. Fancy milk going from the mainland to the Islands, which used to have pride in their independence! You have no independence when you are dependent upon Glasgow for your milk, bread and so on, which is the position of some of the Islands, and we must have a little rethink in respect of that.
There is no doubt at all that the Highlands and Islands Development Board, the Highlands area and the Highlands farmers themselves, through their Farmers' Union, are quite right to draw attention to what is being done in the EEC in respect of Western Ireland, where they have an agricultural development programme worth £167·8 million. In Italy, they have £283·9 million for a beef project. If ever there was an area that fitted into the category of places that should he helped, it is the Highlands of Scotland and I am right behind the demands that this should be done.
I agree with the noble Lord that this is a silly wrangle, procedurally. The EEC say that the initiative must come from our Government here, and our Government say, "We cannot say whether we are for it, until we see what it will cost, and that depends on the programme." I think that the matter has now been accepted by the Agricultural Committee of the European Parliament, and I hope that from there we will get progress and will get something done in respect of a vital agricultural area. It may be that they will also look at transport, to ensure that some chance is given to retain a healthy agriculture in this area which means so much to men and to women. It is people who count and, from that point of view, this is the gloomy part of the debate. Depopulation may be with us again, if we ignore the challenge and the demands.
7.34 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, I should like to add my word of congratulation to my noble friend Lady Elliot for initiating a debate of very considerable importance and interest. If I have a complaint, it is that the Motion has been drawn in terms which are so wide that noble
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Lords have been tempted, and have succumbed to the temptation, to go a great deal broader than I think my noble friend intended the course of the debate to take. My second complaint is that in the time available I cannot possibly reply to this debate. I shall do my best, and I shall then have to write on individual points to those noble Lords whom I do not answer directly.
Of course, there is an enormous wealth of experience and expertise in this House on farming and related matters and, naturally, I have listened with considerable care to the contributions of all noble Lords, even when those contributions have consisted, sometimes in very elegant language, of more of a long catalogue of complaints and suggestions for spending of resources than actual practical and constructive suggestions by which the Government could help to ease the lot of the people living in the rural parts of Scotland.
I agree at once with those noble Lords who have stressed the importance of a healthy and viable agricultural industry to the social and economic well-being of a very large part of our country. The evidence of recent happenings shows that, as we seek to streamline and improve the efficiency of our manufacturing and service industries, agriculture assumes an even greater importance in the national economy. It has been a matter of considerable concern to me personally as a farmer—and I declare my interest—that, despite considerable efforts on the part of the Government, it has taken rather a long time to reverse the downward trend in farming incomes in Scotland, which was apparent when we came to office.
I cannot in the time available, and within the confines of this debate, hope to answer the points which the noble Viscount, Lord Thurso, made. All I do say to him is that I will not accept his strictures that this Government are in any way acting out of callousness. In all the matters for which my right honourable friend the Secretary of State is ultimately responsible, and all the matters which I see by virtue of my ministerial responsibility—which includes the co-ordination of Government policies towards the Highlands and Islands—whatever else we can be accused of, callousness is certainly not part of the charge sheet, if I may use that expression.
More effort and more money in real terms have gone into farming, fisheries and such statutory boards as the Highlands and Islands Development Board, the Scottish Tourist Board and the Scottish Development Agency than ever before. More efforts have been made by my department and by Ministers than ever before to deal with problems which the noble Lord, Lord Ross, himself described as intractable and which he found intractable when he was the distinguished holder of the office of Secretary of State for Scotland—and I pay him tribute for doing a lot to try to remedy them. The setting up of the Highlands and Islands Development Board was an imaginative gesture and, much more than that, it has contributed a tremendous amount to the well-being of the Highlands.
If we are to talk for a moment about depopulation, it should be acknowledged that, in the past few years—certainly in the last three—the downward drift of the population in the Highlands and Islands has been arrested and the number has gone up slightly. I should not like it to be thought that I am in any way complacent about it, but to say, in the midst of this extraordinarily

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severe and deep recession, that anything akin to the ancient clearances is going on is a gross exaggeration of the position.
I now turn back to agriculture. The annual review which has just been completed indicates that in farming terms we have turned the corner. Aggregate net farming income went up from £26 million in 1980 to £85 million in 1981, and, while I readily acknowledge that this is by no means satisfactory, I claim that the prospects look a little brighter then they have done for some time. We have to look for the reasons behind this. The rate of increase in farmers' input costs has fallen as we have got to grips with inflation—and I was very grateful indeed to my noble friend Lord Stodart of Leaston, who came to the rescue of the Government and, almost alone among your Lordships tonight, pointed out that the real problem which this Government are having to deal with is the problem of inflation. To the farmer and to the estate owner, if I may say so to my noble friend Lord Haig, and to the rural economy generally, inflation is the greatest enemy which can befall us. With better weather last year, the volume of feed purchases was down, and that helped farmers. On the input side, we had better crop yields and improved market prices. For instance, calf and lamb sales at the autumn sales showed a great improvement over 1980.
One should consider what the Government have done over the last three years. Almost three years ago when we came to office, producers were concerned, more than anything else, about the effect of negative MCAs so far as trade with other member states was concerned. These have been eliminated. We now have positive MCAs and a substantial improvement in our competitive position.
My noble friend Lord Home of the Hirsel made mention of the sheepmeat régime, which has been of very considerable benefit to Scottish farmers—and not only in the Lowlands. The farmers in the Highlands and Islands in particular have benefited from a new confidence. And the Highlands and Islands, so far as sheep are concerned, are of particular importance because that is where a substantial proportion of our breeding flock is to be found. The confidence among the finishers in the Lowlands has spread to the breeders in the hills and the uplands. We have a European Community suckler cow premium scheme which has helped our beef producers, and we have substantially improved the level of support for hill farmers through increases in hill livestock compensatory allowances. Between 1979 and the current year, the hill cow rate, may I remind your Lordships, has been increased from £29 to £44.50 and the hill sheep rate from £4.10 to £6.25.
Direct income support to Scottish livestock producers in 1979 amounted to about £24 million. In 1981, the combination of the suckler cow premium, the sheepmeat annual premium and the higher rates of hill livestock compensatory allowances has raised that support to £47 million. Aid for producers in the Highlands and Islands accounts for about £16 million, which again is very nearly double the sum paid in 1979. So on the production side, the provisional results of the December census give us some cause for cautious
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optimism. There is some evidence of stability in dairy cow and pig numbers after seven years of decline. The sheep flock is expanding. The decline in beef cow numbers is levelling off and there is a welcome increase in the number of beef heifers retained for breeding.
This is just a start. The level of farm income is still too low and is insufficient to generate the investment needed to maintain or, better still, to improve the level of home production or to make significant inroads into the high level of bank borrowing. But we are moving in the right direction, and that is to be welcomed. I also particularly welcomed what my noble friend Lord Stodart of Leaston said about the performance of farms and farmers. In the last two years or so since I have been going around Scotland, I have noticed the tremendous difference which there is between the efforts of the best farms and, much more importantly, the efforts of what I might call the bottom quarter so far as production and efficiency are concerned. That is where considerable efforts can be made by Government and by their agencies—and also by, for instance, the colleges of agriculture and the advisory services in general—to bring up the performance of farmers who, through no fault of their own in many cases, are unable to take advantage of the various grants and income aids which I have mentioned to give themselves a reasonable standard of living.
I have said enough about the Government's attempts to defeat inflation, which will, as success is achieved, bring down the rate of interest. That will benefit all farmers.
I was asked a question or two about taxation, in particular by my noble friend Lord Haig. I hope he has taken into account the effects of the Budgets which my right honourable friend the Chancellor of the Ex-chequer has introduced since this Government came to power. But even last year the measures introduced included for the first time relief on let land for capital transfer tax purposes, with the facility to pay the tax by interest-free instalments and with the previous upper limit on payment by instalments removed. I appreciate that the last budget made no significant changes to the income tax position of landowners, but I should remind my noble friend that tax concessions have to be considered as a whole. I cannot say any more tonight. However, I can assure my noble friend that the various representations which have been made, and which in many cases I have seen, by farming and land-owning interests in Scotland will be considered
Mention was made very briefly of the price proposals in Brussels and related issues. All I want to do—and that in a sentence—is to echo my right honourable friend the Minister of Agriculture. We as a Government are going to go into the negotiations with the firm objective of attaining a settlement which meets the legitimate needs of our producers, and any measures which discriminate unfairly against them will be opposed very strongly indeed. That includes the proposal for a 4 per cent. revaluation of the green pound which would result in farmers in this country obtaining price increases which would be thoroughly inadequate.
I want to say a word about the agricultural development programme for the Highlands and Islands which has been receiving quite a lot of publicity recently, in particular since the integrated development programme

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for the Western Isles has come near to fruition. A good case can be made for special assistance for the Highlands and Islands. That point was made in the discussions leading up to the agreement to proceed with agricultural development programmes in Italy and in the north and south of Ireland, and the integrated programmes, for the Lozére, the Luxembourg province of Belgium and, as I have mentioned, for the Western Isles of Scotland. I would not claim that that is the only area in the United Kingdom for which such a case could be made.
It is really a matter of priorities, because it is not only the Highlands and Islands which have their problems to face. Farming income in general has been declining for a number of years, particularly in the livestock sector. That started long before we took office. We have had to take measures to restrict public expenditure in our efforts to get the economy moving along the right lines. In the circumstances, therefore, we have had to apply such additional resources as we have been able to allocate to the farming industry—from what I have said I hope your Lordships will agree that they have not been inconsiderable—in a way which would do the most good. Most of the money has been spent on direct income aids for livestock production which is, after all, the agricultural activity which predominates in the Highlands and Islands.
There have been statements, some wilder than others, attributed to members of a delegation which recently went to the European Parliament. It was rumoured that the Community might be prepared to provide up to £100 million or so for a development programme for the Highlands and Islands. The point which has been made by more than one speaker tonight, and by my noble friend Lord Home of the Hirsel, is that the United Kingdom Government should not look such a gift horse in the face, if I may use that expression. But it does not need me to tell the House that it is not really as simple as that. It never is, so far as Europe is concerned. Offers of this nature always have strings attached to them.
May I just illustrate it in this way. The Community contribution to such schemes seldom exceeds 40 per cent. of the member state's costs. So it would require a development programme with a gross cost to the United Kingdom Government of £250 million to attract Community funding in the region of £100 million. The net cost to the United Kingdom Government would be well in excess of £150 million, and taking into account our contribution to the budget we could finish up net losers if the development programme for the Highlands and Islands led, as it might, to a proliferation of such measures for other areas in the Community.
I pointed out the difficulties of the substantial cost to the United Kingdom Exchequer, but I do not want to give any impression that there is no possibility at some time of an ADP for the Highlands and Islands. I have to remind your Lordships once again that we are in a difficult economic situation and we are unable to do what we would like to do. I have taken a careful note of what has been said and we shall give careful consideration to any proposals which are made to us.
I see that I have two minutes in which to cover
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forestry, transport, and a good many other things which I am not going to be able to embrace. I have concentrated on agriculture because I have regarded this debate, rightly or wrongly, as being in reality an agricultural debate. We have some way to go if we are to get profitability in farming to a satisfactory level. I consider that the Government have made a commendable start. Support for agriculture is not the end of the story. I could have told noble Lords, such as the noble Lord, Lord Belhaven and Stenton, of the efforts we have been making, and continue to make, to encourage and regenerate the tourist industry, particularly in the Highlands and Islands. I could have said a good deal on transport, not least on air transport, and why large numbers of tourists prefer to come to Scotland than go to the Canary Islands which is, perhaps, unbelievable to those who live in the Highlands. Those are matters which I shall have to deal with on another day.
Our objective is, and will continue to be, the maintenance of a healthy rural community. Naturally we shall consider very carefully when framing our future policies those matters which have been raised by noble Lords tonight. As I said at the beginning, I will write letters to all those who have raised specific points, and I only apologise for not being able to deal with them in the course of this debate.
7.52 p.m.
Baroness Elliot of Harwood: My Lords, in the half minute I have left, I should like to thank all noble Lords very much indeed for the part they have played in this debate. Whatever else one may say about it, the debate has been enormously constructive. I have learnt a great deal, as I am sure did the Minister, from the reactions which people have exhibited and the stories they have told. The experience has been very valuable indeed and I hope that the Government will pay attention. I am sorry that the debate could not have gone on longer because I enjoyed every moment of it. I want to thank all noble Lords very much indeed for taking part and I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.