Lords Sitting of 5 May 1982

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

Stubble Burning: Penalties for Offences
Lord Monson: 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 when they intend to implement the National Farmers' Union's recommendations for increasing the penalties for offences under the straw and stubble burning by-laws.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, we shall bring forward an amendment to the Criminal Justice Bill, which is at present in another place, which will increase the maximum fine for such offences to £500.
Lord Monson: My Lords, I thank the noble Lord, Lord Elton, for that reply, which certainly indicates a step in the right direction. If the proposed £500 maximum fine proves this year to be inadequate as a deterrent, will the Government undertake, before the 1983 harvest, to implement the higher penalties recommended in such a public-spirited fashion by the NFU, bearing in mind that irresponsible stubble burning causes not only acute distress to sufferers from bronchial complaints but can also be a cause of serious road traffic accidents?
Lord Elton: My Lords, the maximum of £500 should be seen in the context of the fact that £1,000 is, generally speaking, the maximum fine that magistrates can exact for any offence, and therefore the maximum must be seen in relation to that and not destroy the deterrent effect of other penalties. As to a greater deterrent, I know that the National Farmers' Union has considered a three-year ban on straw burning rather in the manner of the loss of a licence. That would be given further consideration, not least by my noble friend Lord Ferrers, if circumstances showed that that was necessary; but that is by no means certain.

Law of the Sea Conference
2.38 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the conclusions of the Law of the Sea Conference.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, the conference adopted the draft Convention on the Law of the Sea and related documents at the end of its Eleventh Session in New York on 30th April. Unfortunately, it was not possible, despite intensive efforts in which the United Kingdom participated, to reach a consensus on the deep sea mining provisions and the texts were therefore put to a vote. One hundred and thirty countries voted in favour of the convention, four opposed it and 17 abstained, including six members of the European Community and most members of the Eastern European Group. The United Kingdom delegation abstained, in keeping with our long-held view that, to be of maximum value, the convention should be generally accepted.
Lord Brockway: My Lords, would not the Minister agree that this is a disastrous outcome? Is it not the case that in March 1981 all Governments agreed to finalise the convention, including the United Kingdom and the United States of America when it was under the Carter Administration? Is it not the fact that under the Reagan Administration there have now been introduced the amendments which have caused this decision? Why on the final convention did the United Kingdom not take the attitude it took in March 1981?
Lord Belstead: My Lords, I do not agree with the noble Lord, Lord Brockway, that this is a disastrous outcome. We are now in the position where a text has been adopted. The convention will be open for signature in the autumn, and then for ratification afterwards. We shall be looking very carefully at the texts to see what line the United Kingdom should follow in the future. So far as the merits of the convention are concerned, although consensus could not be achieved on the deep sea mining texts, the convention does contain a number of provisions which could be of benefit to us.
Lord Caradon: My Lords, would the Minister not agree that the reactionary attitude taken by the present Administration in the United States has led to this breakdown after more than a decade of consistent and agreed negotiations? Is it not therefore particularly distressing to us in this country that our delegation should in the end have abstained on a matter in which we should have been taking a positive and constructive part throughout?
Lord Belstead: My Lords, I have explained why we have abstained. So far as the attitude of Her Majesty's Government is concerned for the future, that is to say signature and ratification, the attitude of the United States and indeed of other Governments will be an important factor which we shall have to take into account in reaching our decisions.
Lord Elwyn-Jones: My Lords, in the meantime, will compliance with the convention be expected from the diverse countries concerned, or is it to be a free-for-all?
Lord Belstead: My Lords, in the meantime, the convention does not come into effect until it is ratified.
Lord Elwyn-Jones: Is it to be a jungle, my Lords, a free-for-all, with exploitation of the seabed by whoever gets to it first? Is that the state of affairs with which we are landed?
Lord Belstead: Not entirely, my Lords. Among the texts adopted on 30th April was a resolution to protect the preliminary investments made by Western and other countries in the period before the coming into force of the convention. We shall be examining our future policy on deep sea mining in the light of that resolution.
Lord Wynne-Jones: My Lords, does the Minister agree that the position in regard to this convention resembles the position in regard to an earlier convention about endangered species? Was it not our failure to ratify that earlier convention that made it extremely difficult for this country to take action on endangered species? This country should be taking a lead, because the whole of the development of the oceans is something in which we are vitally interested. Would the Minister agree that it should be done—in fact, it must be done—under proper international control?
Lord Belstead: My Lords, I agree with the noble Lord that there are aspects of the convention as it stands which are very much of interest to Her Majesty's Government. In addition to provisions about the continental shelf and the right of navigation, there are indeed environmental provisions relating, for instance, to the rights of coastal states to take action against people who pollute, and provisions for the conduct of marine scientific research. I repeat, however, that we must now look very carefully at the texts, which are not yet in a composite form—when they are, they will be put in the Libraries of both Houses—before we decide what our policy should now be.
Earl De La Warr: My Lords, does my noble friend agree that the long-term wealth of the world will depend on the existing mining companies, who have all the expertise, being given sufficient protection to encourage them to invest their money? Does he agree that there may be no other way of exploiting that wealth unless this protection is given to these great companies?
Lord Belstead: It is important, my Lords, because of the point raised in my noble friend's question, that the resolution to which I referred was adopted as part of the texts on 30th April, to protect preliminary investments made by Western and other countries in the period before the coming into force of the convention.
Lord Brockway: My Lords, is it not a fact that the Governments of the United States, United Kingdom and West Germany all passed legislation some time ago for their own deep sea mining? Is the noble Lord aware that the Soviet Union has now done the same? Is there not a great danger, unless the convention is signed, that there will be confrontation between the West and the East regarding the oceans of the world? Does that not deny the United Nations commitment, supported so eloquently by the Bishops'
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Bench in this House, that the oceans should be the common heritage of mankind?
Lord Belstead: My Lords, I am aware that the countries which the noble Lord mentioned have passed legislation, as have we; we have passed the Deep Sea Mining (Temporary Provisions) Act 1981. Having said that, we do not accept that interim national legislation or any agreements concerning interim arrangements made with other countries having similar legislation are contrary to international law. I am advised that the legislation we have enacted and any agreement which is reached with other countries also having deep sea mining legislation would not challenge the principle that the mineral resources of the deep seabed are the common heritage of mankind.

Council Housing: Measures to Maximise Use
2.48 p.m.
Baroness Elliot of Harwood: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they are taking to ensure that better use is made of the existing stock of council houses and that the number of empty dwellings is reduced.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, the Government have put forward a wide range of measures to encourage local authorities to make better use of their existing stock of houses and flats. Empty properties can be sold at a discount; the subsidy system penalises a high level of voids; and the report, Reducing the Number of Empty Dwellings, published last year, detailed a large number of methods authorities could adopt for the purpose. Our priority estates project and community refurbishment schemes are demonstrating how run-down estates can be turned round and once more made attractive places in which to live. Those are but a few of the steps we are taking in this field, to which my right honourable friend the Secretary of State for the Environment attaches great importance.
Baroness Elliot of Harwood: My Lords, while I thank my noble friend very much for that admirable reply, which said a great many of the things I hoped the Minister would say, may I ask whether he would also agree that the demand for housing has changed in the last 10 years or more, in that the demand today is for the modernisation of older houses, making them fit for living in, and then the opportunity given to the people wanting houses to buy them rather than rent them?
Lord Bellwin: Yes, my Lords, I agree with my noble friend. There have been changes of the kind that she mentions, just as there is also a very great need for many one-and two-bedroomed units.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that the noble Baroness said that he gave a very fine reply? It sounds very nice, but the legislation coming before this House and measures taken by the Government on local government finance inhibit local authorities in making progress in housing. The Government's obsession with selling council houses is having a reverse effect when it comes to finding accommodation for people who need it.
Lord Bellwin: My Lords, I do not on this occasion want to move too far from the Question, as we did the other day when we were talking about housing; but I would not agree with the noble Lord, because the fact is that, if they wish to make this matter a priority, local authorities now have great access to funds from capital receipts. These will enable them to do anything that they may wish to do in this case.
Baroness David: My Lords, will the Minister agree that, at 2·1 per cent., local authorities have proportionately the lowest percentage of empty dwellings of all the tenure sectors? Those figures came from the first report of the Environment Committee
Lord Bellwin: My Lords, I think the problem is that there is such wide variation. There are very many authorities which have the kind of percentage to which the noble Baroness refers, but there are some authorities where the proportion is just short of 10 per cent. of their housing stock, and that is where the great problem arises.
Lord Davies of Leek: My Lords, is the noble Lord aware of an excellent article in Lloyds Bank Review on the deindustrialisation of Britain, and is he also aware that this deindustrialisation, too, is having an effect? Council houses as well as private houses stand empty because there is no employment in an area. What grants are given for council houses that have remained empty for a long time and which often are vandalised by the type of people who seem to be around these days?
Lord Bellwin: My Lords, I hear what the noble Lord says, and I am quite sure that what he describes is a contribution to the situation, though it is not by any means the major contribution. I strongly commend anyone who is interested in the question of how to reduce the number of empty dwellings to read the publication Reducing the Number of Empty Dwellings which was issued recently. When I read it, I was most fascinated by the constructive suggestions that were being made, and I commend the publication to anyone who is really interested in this matter.
Baroness Fisher of Rednal: My Lords, does the noble Lord the Minister agree that local authorities have great difficulties regarding the improvement and modernisation of what we call the inter-wars stock? Does he also agree that many local authorities are facing grave difficulties regarding post-war stock?—that is, those properties built in the late 1960s, involving system building and concrete structures. These local authorities have a very serious problem, which is not at present adequately covered by Government grants.
Lord Bellwin: My Lords, the noble Baroness raises a very fair point: that the type of dwellings built under the systems to which she refers are a very real headache. However, it is surprising that, in the main, and so far as I am aware, such dwellings do not comprise the majority of houses that are empty. What we ought to be concerned about are the houses that are more run down and which have been empty for over a year. In some areas several hundred dwellings have been empty and in the case of seven authorities there have been over 1,000 dwellings empty for over a year. Such dwellings are not usually the type to which the noble Baroness refers. The houses that I have mentioned form the major part of the problem, but I do not deny that what the noble Baroness says is in itself correct.
Baroness Faithfull: My Lords, can my noble friend the Minister say which local authorities are going back on their policy of buying old property with a view to building new estates, but have not now the money to do so? Are such authorities reversing their policy to any great extent, putting the houses in order, and shelving their old plans?
Lord Bellwin: My Lords, it is very difficult to be specific, and I should prefer not to be so now. I know that there are some authorities that adopt the attitude to which my noble friend refers, but, in regard to the situation as a whole, the latest figure is 92,000. It was 100,000; so there has been some improvement, in that it has come down to 92,000, though that is bad enough. It is a question of the policy that individual authorities want to adopt. The point that my noble friend raised and the point that the noble Baroness, Lady Fisher of Rednal, raised are right in themselves as part of the overall problem, but one has to go beyond that to see where the situation lies. There is much scope for doing more, not least in terms of selling some of the properties at low prices to people who want to make homesteads and themselves improve them. I think that there is a lot of scope there.

South Africa and International Sporting Bodies
2.55 p.m.
Lord Orr-Ewing: 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 eight of the 11 Motions which have been moved in various international sports bodies during the years 1966 to 1980 to prevent South Africa taking part in international sport were moved by the Soviet Union or Soviet bloc states.
Lord Belstead: My Lords, I regret that the information requested by my noble friend is not available. The international sports federations are independent. Indeed, we are committed to doing what we can to uphold their autonomy. Our knowledge of what

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resolutions have been passed, and of the details, is therefore necessarily incomplete.
Lord Orr-Ewing: My Lords, do not these facts, which appeared in The Times on 19th April, show clearly that the Soviet Union is using these well-meaning sporting bodies to propagate its own strategic plans to disrupt relationships within the free world?
Lord Belstead: My Lords, I would hold no brief for Russian motives in pursuing their policy. For ourselves, we adhere to the provisions of the Gleneagles Agreement.
Lord Molloy: My Lords, does the noble Lord agree —and this is a vital, important question to Government and Parliament alike—that we all know what goes on in the Soviet Union, in Poland, and in South Africa? In the Government's view, is South Africa regarded as a free country?
Lord Belstead: My Lords, I repeat that so far as sporting contacts are concerned—which are the subject of the Question of my noble friend Lord Orr-Ewing—we adhere to the provisions of the Gleneagles Agreement, which requires us to take every practical step to discourage sporting contacts with South Africa, because South Africa is the only country where racial discrimination is institutionalised by law.
Lord Wynne-Jones: My Lords, can the noble Lord tell the House which country tried to prevent participation in the Moscow Olympic Games?
Lord Belstead: My Lords, the position of Her Majesty's Government is I think relevant to the supplementary question of the noble Lord, Lord Wynne-Jones. In the special circumstances of the Russian invasion of Afghanistan two years ago, we advised sportsmen and sporting bodies not to participate in the Moscow Olympics.
Lord Paget of Northampton: My Lords, can the noble Lord tell us whether there are any Jews to be found in the Russian sports teams?
Lord Belstead: That is a question that I cannot answer, my Lords.
Lord Elwyn-Jones: Does anti-semitism in the Soviet Union justify apartheid in South Africa?
Lord Belstead: My Lords, on behalf of the Government, I deplore both policies.

The Falkland Islands
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Trenchard will, with the leave of the House, repeat a Statement on the Falkland Islands which is to be made in another place. This will be followed by my noble friend Lord Belstead repeating a second Statement on the Falkland Islands.

Inland Transport
2.58 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to call attention to the problems in inland transport, with particular reference to the economic and social consequences of traffic congestion on the roads and in big cities, and to the need for balanced, efficient and economically viable rail and road transport systems which do not place excessive burdens on taxpayers or ratepayers; and to move for Papers. The noble Lord said: My Lords, in moving the Motion standing in my name on the Order Paper, I should like to extend a welcome to my noble friend Lord Cayzer, whom we are pleased to see included in this afternoon's list of speakers. I am sure that your Lordships look forward to hearing his contribution to our debate.
From time to time we have had debates on various aspects of transport, and I hope that this afternoon we shall not be seduced too far along the line of lorry weights contained in the Armitage Report, which we discussed just one month ago under an Unstarred Question put down by the noble Lord, Lord Underhill. I accept, of course, that much in Armitage is very germane to the subject-matter, but I think we could very well leave lorry weights out of our debate. I also hope that in the discussion that is going to follow we will not be tempted to pre-empt any discussion which we might have in a very few weeks' time on the content of the 1982 Transport Bill.
Transport always evokes emotion in the breasts of most people, and I think that this is really quite understandable since transport costs form the third largest portion of the average family's expenditure—third only to food and housing. In the 1980 Family Expenditure Survey the proportion of total expenditure devoted to transport rose from 12.2 per cent. in 1960 to 14.6 per cent. in 1980. That is £16.15 weekly. Housing is at £16.50, and food at £25.15. Of that amount—that is, that £16.15–81 per cent., £13 worth, is spent on the purchase of motor vehicles, spare parts, maintenance and the running costs; whereas of the total on transportation, only about 0.7 per cent., 79p, goes on rail fares, and 1 per cent., £1.10, is spent on bus and coach fares. So the scenario of transportation costs in a family budget is fairly large.
The survey reveals quite easily that spending on transport rises steadily with income, and public transport spending is related directly to the income of the households. About £1 a week is spent on bus and rail fares in households on half the average income, while those households with twice the average spend £3.50 or more. It is revealed in those statistics that it is in fact the richest households which spend more on rail than on buses. At all income levels to twice the national average, bus fares are about double those of rail.
Since the poorest families use the less well subsidised services, the bus services (subsidised last year to about £430 million), and the richer use the rail services (subsidised to about £800 million) one is tempted to suggest that the subsidy policies currently operating need some kind of rethink. It might be argued—and I believe there is in fact a case for such an argument—that if transport subsidies are necessary to assist poorer families and others (such as old-age pensioners, the

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disabled and others in that category) a greater part of such subsidy might be found from what one might call the social element of the budget, rather than the transport share. There is, I believe, a direct relationship between transport needs and social habits. If in fact we saw a dramatic change in either, then I believe we would have most serious problems which it would be difficult to find solutions to this afternoon, anyway.
In an ideal situation, transport might well be considered to be the most universally needed of all services—that is, taking people to work, to school, to play; goods to be moved, and so on. In our society we depend absolutely on this transport element. Without it we would grind to a halt. So what one then suggests is that there should be adequate resources to meet the transport needs—transport by whatever mode we employ.
My noble friend the Minister will almost undoubtedly say, "Yes, that is so, and that is exactly what is being done now". He could say that there are other pressing needs, such as education, health, defence and so on, that all must take their share and a balance has to be struck. I am suggesting this afternoon that the balance is not fairly struck.
Perhaps I may turn first to the road situation. There is no doubt that with some 20 million-plus vehicles on the road, rising to some 25 to 27 million over the next five years, if traffic flows are to be improved, congestion reduced and the environmental effects of traffic made better, it does not matter from whatever source that intrusion is (whether it is car, lorry or motor-bike) the road system has to be improved. To an extent—and a comparatively small extent, really—the system must be enlarged as well as improved, and, of course, the two are not quite the same. Unhappily, for a variety of reasons—mostly that there are not sufficient funds available—new road construction budgets have been consistently cut over the past 10 years. Nevertheless, the same does not apply to the road-user. The road-users are now paying, in the year 1982–83, some £9,250 million in taxation terms, while the forecasted expenditure on road construction and maintenance amounts only to some £2,600 million. I am suggesting that this is not a fair balance, not a fair return.
When we discussed Armitage last month we talked about some aspects of the roads and my noble friend Lord Bellwin described the Government's proposals contained in the White Paper Policy for Roads (Cmnd. 8496); and he particularly emphasised the by-pass programme. He then said that by-passes make a significant contribution to the general environment where this is affected by motor traffic. It would be unrealistic not to congratulate the Government on having some 225 by-pass schemes currently in preparation and construction. There are 100 new ones this year. In fact, I believe the department have announced a further 22 on top of the 100; and there are another 125 to be started by 1985. One has to hope that this forecast will at least be maintained. Where the White Paper in fact says that these 125 schemes are to be started by 1985, I am tempted to ask my noble friend whether he means before or in that year.
There is, on the larger scale, a slowly improving network of motorways and major trunk roads, and I
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believe that any neglect in speeding that road building and road improvement programme will prove to be an almost insurmountable obstacle in the years ahead, when we are looking for a recovery in our manufacturing industries. Whether or not we like it, currently the bulk of freight is carried by road, and it is essential that the major routes from manufacturing centres to the ports be completed. Welcome as the by-pass programme is, this cannot be any substitute for the major programme; and in that programme now there are so many gaps that it almost negates the value of the whole potential of the network. In particular, one has to look at the A.1/M.1 eastern link, the M.40 Oxford—Birmingham, the M.20 through to the Ashford-Maidstone road and (near, I must confess to my own heart), the M.3/M.27 Basingstoke-Southampton link which must replace the outdated Winchester Bypass.
To those who suggest that cutting concrete driveways through the country is detrimental to the environment, I can only suggest that there must be a balance between the environment and the commercial needs of the country. I do not think it is fair to suggest that motorways are necessarily detrimental. They can open up the way for people to enjoy what we term the environment, the countryside. Without such major road construction, without the opening and completion of motorways, some people—and I have described in my earlier remarks that the bulk of people move around in private motor-cars—would be denied the opportunity to reach those places. Certainly I think that road construction could be dealt with in a manner more sympathetic to the environment. I do not believe that motorways need be quite as detrimental to the eye as are some of them.
In this connection, the White Paper in paragraph 24 briefly describes the possibility of introducing new financing methods for construction. It is my understanding that a number of private enterprise companies have put forward projects in principle to the department and that these would be projects largely in addition to anything that may be in the governmental building programme which may be aided by European fund contributions. Yet after some five months—and I am thinking particularly of the M.25—there is still no firm decision from the department on whether the principle of that policy is going to be acceptable. Even were it decided this afternoon, another 18 months could very well pass by before implementation, and private capital can find an avenue for its resources quickly and the opportunities could be lost. I believe that there is a need for the department to exert greater urgency in looking at these rather different and perhaps somewhat radical methods of financing roads.
I wonder also whether, in fact, in the whole area of road construction we have the planning procedures right. It seems to me that they take an inordinate time and raise the ultimate cost of the roads out of all proportion to their value. One asks oneself particularly: is it really necessary or profitable—I am not talking in monetary terms—to allow what I call the professional objectors to move from public inquiry to public inquiry posing precisely the same arguments area after area and, at the end of the day, representing only the minority?—because it is essentially only the minority groups who attend public inquiries. From that, no one should infer that I am suggesting

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that minority groups should not have a fair say. But I think that we might look at who takes advantage of the system and what great value there is in the system.
There is just one other aspect on roads that I should like to touch on and to bring up to date the position since the 1980 Act, when there was deregularisation of the licensing laws with regards to the coach and coach operating. I believe that there has been a significant improvement in passenger travel by coach. Although there were at that time opponents to the scheme, and it is fair to say that only the best of the operators have stayed in the business—notably the National Bus Company have done extremely well—that is not to deny that liberalisation has been worthwhile. Nevertheless, I believe that public transport in rural areas remains an unsolved problem to which we should direct our energies at an appropriate time.
I turn now to the railways. Here I am sad to say that there is an altogether different and perhaps less happy situation. I have no doubt in my mind that the railway industry is a continuing business of great importance to this country. I believe that it has to be sustained and nurtured. I have never sought to suggest in any of our earlier debates that rail should not carry freight. I believe that rail should carry freight. There is an immense amount of freight which is only transportable through the railway system and I believe that a good deal more could be carried by rail. I hope that in the reorganisation plans that British Rail have in hand further and much greater effort will be made to secure on competitive terms a proper share of the freight business so that those assets which represent the strength of the railway system are not left idle. I do not believe that any encouragement toward the greater use of rail by either passenger or freight operator should be secured by punitive taxation on other forms of transport. It seems to me that a far better way to attract that business is by being better than the alternatives and notably the best selling feature is the rate per tonne or the fare.
British Rail made a loss of some £37 million last year, and the chairman describes the year as "good". He says in the chairman's commentary at the beginning of the annual report:
"The achievements of 1981 reflect our determination to reshape the railway in the recession. A year of quickening productivity and of hardening priorities for change. … We have maintained business control with sound financial management under the most difficult trading conditions. British Rail can indeed show a track record of meeting its overall financial targets over the last five years".
I think that that is an encouraging statement from the chairman. However, he then says that there is a forecast loss of some £165 million for the current year, almost half of which, £70 million, is the result of disputes and strikes.
The Government in their turn have agreed in principle to some £680 million worth of investment funding for electrification and modernisation. One can understand some Government hesitancy while modernisation of working practices remains an outstanding issue. As we have said before in so many areas of industry, it is the customer who meets the wage bill, nobody else.
Both the rail policy statement which the British Rail
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Board published in March 1981 and the annual report set out clearly the options open to British Rail. While there cannot be total agreement over the whole range, it is not unreasonable to remind your Lordships of the opening paragraph of that policy statement:
"A crucial decision has to be taken soon about the future of British Rail. British Rail must prepare to take either the path of progress by re-equipment and modernisation or that of decline through a gradual but deliberate rundown of the system. We cannot continue as we have in the past. We are reaching the dividing of the ways".
I believe that to be absolutely true. They talk about modernisation, but it has to be a modernisation of equipment and working practice.
I turn—because it is contained in the British Railways report and it is part of inland transport—to the current discussion regarding the Channel fixed link. Your Lordships are well aware of the history going back to the 1980s and the re-emergence in 1975 of proposals which were set aside by the then Labour Government. It was in 1978 or early 1979 that new proposals came about. We are talking here of something approaching a £1½ billion investment programme. Notwithstanding the Government's view on this, I fail to see how the Government will not be attracted into some kind of funding.
I have come to the conclusion that I would not be in favour of a fixed link. If there were one there is no doubt it has to accommodate both road and rail traffic without which I believe that there would be a total imbalance. Having got so far as the Channel, I feel obliged to say something briefly about the port service. I am disturbed to read reports of a possible dispute here over the current working practices which are enshrined in the 35 year-old dock labour scheme. I cannot feel—as I do with some of the agreements in the railway system—that a 35 year-old agreement is such a sacred cow, is so sacrosanct, that it cannot be changed, that it cannot be altered, to meet the needs of today's society.
Having got therefore to the ports, perhaps I could say a brief word on the inland waterways. With now some 1,000 miles of cruising waterways and some 350/ 400 miles of commercial waterways, there is undoubtedly a significant contribution that the inland waterways system can make in the whole of what we so often call an integrated transport system.
I also want to speak on public transport systems and congestion in our major cities. The obvious example is London Transport. I believe that London Transport is only that much more important in that its problem is that much bigger than in many of our other major cities. I have to say in the background of the recent court cases that one is tempted to suggest that in a professional business such as transport, transport might well be thought to come outside the realms of a political football. Rather than describe to your Lordships in whole the various schemes that have been put forward, I commend to you the evidence given by the chairman and chief executive of London Transport to the Transport Committee in the other House on 3rd February of this year. There is a very good case for leaving the politician to decide the general policy to be obtained through a transport system and then leave it to the professional to get on with it, ensuring that that political element does not enter into the day-to-day running.
There is no doubt that if we take a bird's eye view of the whole financing of public transport, be it London Transport, the railways or the Natioanl Bus Company, all of which receive subsidies, there should be a case made for a one-for-one type subsidy. That is, one unit of income is provided by the operating company, half a unit is provided by the central Government and the other half by the authority which is served by the undertaking.
We have one of the most expensive public transport systems in the Western world in London and that cannot be right. It discourages people from coming here and it discourages our own people from using it. Eventually we will find that much of the commercial and business activity of our major cities will decline because of the lack of public transport and the expense of it.
I feel that I have outlined in the four major areas the general scene as I see it. I hope that we will have a most interesting debate and I shall look forward to hearing what my noble friend the Minister has to say about the many topics which are undoubtedly going to arise. I beg to move my Motion for Papers.
3.27 p.m.
Lord Underhill: My Lords, the House will be grateful to the noble Lord, Lord Lucas of Chilworth, for opening this debate. He has opened it in a very comprehensive manner and I am certain that he will understand if, through lack of time, I do not follow him on many of the points that he has raised. As he has said, the subject is very wide. A number of the issues were dealt with in debates over the past 12 months. We have debated the transport policy, congestion in Greater London, and the Armitage Report. The points that the noble Lord raises do to a great extent open up the whole question of transport policy.
All noble Lords will have experienced congestion and the problems that it brings; not only in tailbacks of traffic on roads but the problems in our towns and cities. We all realise that congestion causes delays. There are increased transport costs and waste of energy resources. This has a great effect on the environment and the lives of people and frustration is caused. I agree completely with the noble Lord that we must have a balance between the economic advantages, the convenience of road transport and environmental needs.
I should like to pose the question which I put in the debate on Armitage: it would be interesting to know whether or not the Department of Transport has an environmental section which is able to look at all aspects from an environment angle and, if so, the size and nature of that department. As I said in the debate on Armitage—and I agree with the noble Lord—I am not opening up the question of heavy lorry weights in this debate this afternoon.
The lorry is with us. The private car with its flexible means of travel is with us, and we all recognise that road traffic is indispensable for the movement of both people and goods. There is need for an adequate road system which will meet the needs of the private car and of road haulage; but we must keep in mind that, no matter how many by-passes are constructed, at some point vehicles have to come off the
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motorways and major roads into the conurbations. That is where tailbacks form. We have lorries which have to deliver and pick up goods in narrow streets, often with very poor access. There is obviously a need for the improvement of our roads in many towns, but I believe your Lordships will agree that there must be a limit to road development in our urban areas.
First, there is the question of the cost involved and, secondly—I was going to use the word "inconvenience" but that is putting it rather mildly—there is the upheaval in people's lives and the need for rehousing people if there are schemes for great massive urban roadways. Therefore, while there must be some development, there must be some sense of balance. Also, travelling around in the last few months, one realises the cutbacks in expenditure and grants for local authorities and the need for maintenance of our roads, particularly in urban areas. Potholes are a danger not only for two-wheeled vehicles but for motorists, and we should not have to face that problem in addition to congestion. Maximum attention must be given to traffic management schemes such as special bus lanes, parking facilities, parking controls, urban clearways, one-way systems, temporary flyovers and so on. All these things have their benefits in our urban areas.
In the debate on the congestion in Inner London considerable stress was laid by many speakers on illegal parking and inadequate enforcement. That problem is still with us and has to be dealt with. Since that debate I attended a Greater London Council seminar on the question of wheel clamps, and I noted that the Metropolitan Police were 100 per cent. in favour of the introduction of wheel clamps on an experimental basis in certain parts of Greater London. I was pleased to note that in the other place the Under-Secretary of State for Transport, Mrs. Lynda Chalker, said that a very good case was made out and that she will have further consultations to see whether an experiment can be conducted in one area. I shall be interested to learn whether those consultations have been carried out or whether we shall hear something when the Transport Bill comes before your Lordships.
Traffic restraint measures, however, are not the complete answer. Many towns need adequate parking, particularly the larger ones, but parking provision ties up very costly land and, even more seriously, encourages additional car traffic, which adds still further to the congestion.
There are two other aspects I should like to touch on. There have been some very interesting developments in the provision of shopping precincts in many of our towns, where streets are closed to all traffic. These are encouraging and are appreciated by everyone. Many shopkeepers at first disliked them but soon realised that they are a great advantage to them. But if we are to develop shopping precincts there must be adequate public transport facilities nearby or provision for nearby parking.
Provision must also be made in our towns, to an extent which very few have at the moment, for cyclists. Very few stores and public buildings have facilities for cycle parking but there have been some very encouraging developments on cycle routes in some towns which I hope will be considered. I do not cycle now but for many years I was a very active cyclist; and when I

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paid a visit again this Easter I was, as I always am, impressed by the provision of the Netherlands. Not only do they have special cycle paths in their towns and along main roads but they also have them on cross-country routes.
As to the development of cycle paths in this country, which I believe we ought to look at, I would remind your Lordships that I took part in a protest ride against cycle paths in the mid-1930s, and I would do so again if they are not of the proper width, if they contain concrete joins which hump every few yards, if there are weeds all over them, if dogs are allowed to be walked on them and if mothers are allowed to wheel babies in prams along them or if they run into garage forecourts. Cycle paths, yes; but they must be of a proper kind. When new roads or improvements are being undertaken it would be worthwhile if the department would consult with the cycling bodies to see if a start can be made on provision of cycle paths. It is something we rarely discuss in this House, and I am glad to have the opportunity to mention it.
Most of us are car drivers and we all recognise that the private car provides a flexible means of travel, but its usefulness is often dictated by traffic conditions. I would suggest that it is not realistic to proceed on the basics of completely unrestricted road traffic growth, which could reach the total of 25 million vehicles or more as time goes on.
The 1980 Census figures showed that 50 per cent. of the households in this country have no car; and that is not the whole problem. In most of the households which have a car there is only one car and only one member of the household has access to it during the working day. Half the population still hold no driving licence, and those who are affected are mainly women, children, the elderly and those less well-off. This is bad enough in the towns, but for many in the rural areas it means that they are stranded and their lives are very restricted.
We cannot ignore this. The noble Lord, Lord Lucas, said that we must direct our attention to the problem of public transport and the bus in rural areas at some other time. I believe we must direct our attention to it in this debate, because so many people are affected by it. The noble Lord urges the need for a balanced, efficient and economically viable road transport system. I would go much further and say that we must have a safe, efficient and comprehensive transport system to move people and goods, and which ensures the best use of resources, provides a network of services throughout the country, meets social needs at fares which people can afford and safeguards the environment and the quality of life.
Such a transport system cannot be based on market forces. To do so would mean that many people would have an inadequate service and others would be bereft of any transport at all. Reliance on market forces would inevitably mean an unco-ordinated system which would not make the best use of energy resources and would not meet social needs. I must ask: have the Government a transport policy? Very shortly we shall have another Transport Bill—the third since this Government have been in office—but is there a transport policy other than one of privatisation based on political dogma? There seems to be no indication of a transport policy.
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We cannot look at one mode of transport in isolation from another. We often talk of an integrated transport system, but I believe the time has come when this should become a reality and not just a slogan, not just words. That means there is a case for a national transport authority—not to be a bureaucratic set-up, but an authority that will exert the maximum influence over the co-ordination and development of all transport, passenger and freight, including local transport services.
All noble Lords will recognise that rail is more economic of energy than road, and is the safest means of transport. I hope that in this debate we shall not get involved in the rail versus road argument, because that is a sterile one. What we need to do is to look at this subject on a national and co-ordinated basis. We want efficiency, but I suggest that if passenger transport has to be run on purely commercial lines the result will be chaos. There will be restriction of services, pricing will push even more people onto the roads and that will aggravate still more the problem of congestion, which the noble Lord mentioned, which will be harmful not only to transport users but to the community as a whole. I make the assertion that the only possible way to make the maximum provision is by public transport.
The noble Lord, Lord Lucas, has urged that no excessive burden must be placed on taxpayers and ratepayers. This depends on what one means by the word "excessive". We find that some countries do this much better than we do. The noble Lord said that we have the most expensive public transport system. What we know is that we have a transport system which receives less public financial support for its rail system, or for its transport systems in the capital and in the major towns, than any other country in Europe. That has been stated time and time again in this House. So a viable system of public transport must receive grants from central and local government.
There is need for a national network of bus services, because only a network can provide cross-subsidisation so that the better and more remunerative routes help to finance the less remunerative routes. That is the only way to get transport into the sparsely populated and rural areas. That is the only way to ensure that people with no access to a car have a means of transport in those areas.
The noble Lord referred to the 1980 Act, with its provision for a relaxation of licensing. I believe that that will make things more difficult. Agreed—there has been a development in express coach services, which I readily admit, and it was stated by the noble Lord that, to a great extent, the National Express services led the way. Let us keep in mind, because there is a Transport Bill coming before your Lordships, that that development was made possible because of the flexible position which the National Bus Company could adopt in the development of its coach services, which enabled cross-subsidisation by other parts of its network. Take that away from the National Bus Company, and you spoil their opportunity of having a network of bus services.
Very few new operators are operating normal stage routes under the 1980 Act. Those that have come in have come where we said they would, which is on the remunerative routes. There are examples, which the Minister knows only too well, of where, because

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of the intervention of other operators on the best routes, the network has had to cut out some of its routes in the more sparsely populated areas.
There is a need for the introduction of a sensible system of route licensing, and the basis for local authorities to be able to give financial assistance to their public transport systems must be clearly laid down. That is why I repeat that the law, and the ability of local communities to do what they want in order to help their people with public transport, must be made absolutely clear.
Before I close, may I refer to the position of the railways, to which the noble Lord, Lord Lucas, paid a considerable amount of attention. I accept that most passengers and freight are conveyed by road, but does anybody visualise Great Britain without a railway system? If it is agreed that we cannot visualise it, then, for Heaven's sake!, we must surely have a railway system which is an efficient and proper one. A railway system which is dithering around is of no use to anyone.
We must also keep in mind that, although the majority of passengers are conveyed by road, the railways carry some 2 million passengers each day in 18,000 trains, and that without the railways in the South-East, London commuters would be in a desperate position. Many noble Lords will know of the great benefit from the Inter-City trains. If I have any criticism, it is—and I agree with the noble Lord—that many people are priced out of travelling on Inter-City trains. They would like to do it, and I hope that British Rail may be able to take a look at this aspect.
I am as concerned as the noble Lord about industrial relations on British Rail. But I prefer to say nothing about that subject, except that the co-operation between the unions and British Rail has been of vital importance in the last 18 months. I hope that both sides appreciate that the future of British Rail depends, to a great extent, on both the unions and British Rail securing an understanding.
I understand that the Secretary of State is likely to authorise a review of British Rail. I hope that we may hear from the Minister about that. I trust that it is to ensure adequate investment for British Rail, because if we believe that there must be a railway system in Great Britain, and that it must be efficient, it must be realised that we cannot continue with a situation where some 60 per cent. of the electric and diesel units are between 20 and 30 years old. But despite that, in the last year, 90 per cent. of trains arrived at their destination not more than five minutes late. If we want track renewal, if we want electrification and if we want the development of lightweight units, there must be adequate investment in British Rail.
Most freight will continue to go by road, but we need to develop as much as we can both our waterways and our railways for the maximum transfer of freight. The railways are particularly suited to the long-haul bulk traffic, and also to the movement of containers by their Freightliner system. I believe that the encouragement given to industry by the Section 8 grants for rail sidings should be developed on the lines that Armitage suggested, even extending grants to 60 or 80 per cent.
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where that is desirable. There should be a development of trans-shipment depots to link trunk roads with railways, as well as a development of break bulk depots, in order to avoid the biggest lorries adding to the congestion by delivering or picking up in many of our narrow roads.
May I conclude by saying that over the last 20 years there have been the Geddes Committee, the Foster Committee, the Armitage inquiry, various consultation papers and White Papers, as well as numerous Transport Acts. I believe that all the information we want is available. What we now need is action, with imaginative schemes of traffic management and enforcement; adequate investment for road construction programmes, with by-passes of towns and villages made a priority; adequate investment in the railways; effective co-ordination of road, rail and all other transport modes and the maximum development of efficient public passenger transport.

The Falkland Islands
3.48 p.m.
The Minister of State for Defence Procurement (Viscount Trenchard): My Lords, with the leave of the House, I will now repeat a Statement which is being made in the other place by my right honourable friend the Secretary of State for Defence. The Statement runs:
"With permission, Mr. Speaker, I should like to make a further statement about the Argentine attack on HMS "Sheffield".
"In the Statement I made to the House late last night I provided an outline of the attack on HMS "Sheffield" and of the loss of one of our Sea Harriers and its pilot. The pilot was Lieutenant Nicholas Taylor. His next-of-kin have been informed—and the whole House will I know wish to join me in expressing sorrow and deepest sympathy with his family.
"It is entirely right that the House should now have as full an account of the attack on HMS "Sheffield" as I am able to give today. The House will understand why it will be necessary for me to repeat some of the details I provided last night.
"At about 3.30 London time yesterday afternoon HMS "Sheffield" was attacked by Argentine Super Etendard aircraft which launched Exocet missiles. HMS "Sheffield" was some 70 miles off the Falklands enforcing the total exclusion zone, together with other elements of the task force. One missile missed the ship; the other hit her amidships. The resulting explosion caused a major fire. Although attempts were made to extinguish the fire for nearly four hours, with the assistance of firefighting teams from other ships in the area, it eventually spread out of control. At about 7 p.m. London time, the order was given to abandon ship. Ships of the task force in the area picked up survivors, and the latest information I have is that about 30 men are still missing. A further number sustained injuries, and they are being well cared for under medical supervision. We have no further details of casualties at the present time. The ships are still engaged on

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operations and I know that the Force Commander will provide further information just as soon as he is able to do so. All the next-of-kin of the ship's company are being informed. The thoughts of the whole House are with them at this sad time."
My Lords, that is the end of the Statement.
Lord Peart: My Lords, I thank the noble Viscount for repeating the Statement which has been made by his right honourable friend. The whole House deplores the tragic loss of life on HMS "Sheffield" and also the loss of Lieutenant Taylor. Our thoughts and prayers are with our troops and their families. May I ask the Minister whether he agrees that, with this escalation, the conflict has entered a new and more serious phase? Would he further agree that more urgent steps to achieve, first, a cease-fire and, secondly, a diplomatic settlement must be taken urgently? Will the Minister also indicate whether the Government have responded constructively to the United Nations Secretary-General's initiative and whether this will include support for a good offices committee? Will the Minister further confirm that the use of minimum force remains the firm policy of the Government and that we adhere to the terms of Resolution 502 in every particular?
Lord Mayhew: My Lords, may I associate my noble friends and myself with the expressions of sympathy for next-of-kin, so well expressed by the noble Lord, Lord Peart, and by the noble Viscount? Is the noble Viscount aware that the admiration of my noble friends and myself for the Navy is entirely undiminished at this time? May I ask the noble Viscount whether he agrees that if HMS "Sheffield" had been equipped with the stretched version of Sea Dart, with the new radar tracker, it might well have survived this attack? May I ask him why it was not so equipped? May I also ask the noble Viscount whether he is entirely satisfied that the Exocet was fired from a high level by a Mirage, and not from a low level, which might perhaps explain the failure to intercept the missile? Finally, may I ask the noble Viscount to restate the circumstances in which Her Majesty's Government have authorised attacks on Argentine ships and aircraft and to confirm that the policy of minimum force remains absolutely valid and that no attacks will be authorised in Argentine waters or on the Argentine mainland?
Viscount Trenchard: My Lords, I thank both noble Lords for their observations, for their sympathy, which Her Majesty's Government share, and for their admiration of the Royal Navy. I do not think that Lord Peart's description of the conflict entering a new and more serious phase is the complete picture. My right honourable friend has never underestimated what a formidable task lay in front of the task force. When an aggressor has already committed aggression, it is not easy to put matters right by the military route.
That takes me straight to the point raised by both noble Lords. There will of course be no diminution of our efforts down the route to try to obtain peace. In a little while my noble friend will be repeating a
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short Statement by my right honourable friend the Foreign Secretary in the other place. If, therefore, I could leave the questions put by the noble Lord the Leader of the Opposition on the state of the peace moves, both in relation to the United Nations and elsewhere, until my noble friend repeats the Statement, I should be grateful.
Both noble Lords have asked that we should continue to use the minimum force necessary. As on previous occasions, both I and my right honourable friend have given that assurance. But we have also said that our first duty in the face of Argentine aggression must be to protect our own task force which is engaged on objectives for which your Lordships have given us support. We shall be guided not just by Resolution 502 but by Article 51 and our clear communications to the Argentine Government in relation to the action which we shall find it necessary to take if there are any threats to our task force.
The noble Lord, Lord Mayhew, asked me a number of technical questions which I do not think it would be your Lordships' wish that I should go into in detail today. However, I am prepared to say that the ships of the task force are equipped with complementary antiaircraft weapon systems—including, importantly, Sea Wolf and Sea Dart on different ships. It is in fact believed at this stage of reporting—and reporting is restricted at the moment due to the necessity for both wireless silence and priority for other military messages—that a reconnaissance Neptune aircraft from the Argentine, which was sighted earlier in the day, must have given the Etendard aircraft—not the Mirages but the Etendard aircraft—more or less the position of the task force, because the attack was a low level, not a high level, one. Thus, the radar on our ships was not able to pick up the aircraft early enough for the use of the Sea Dart system, the range of the air-launched Exocet missiles being in excess of 35 miles. That is the information which we have. I would also mention, for the information of the House, that our belief is that the Argentines only have five of these aircraft which are capable of delivering the Exocet air-launched missile.
Lord Kennet: My Lords, today we lament our dead, as yesterday we lamented theirs. Would the House be about right in thinking that the number of dead on both sides is now approaching one-quarter of the number of the Falkland Islanders and that the number of fighting men down there whose lives are at risk is about ten times the number of the Falkland Islanders?
Viscount Trenchard: My Lords, I do not know whether the House would want me to debate the theme behind the two supplementaries of the noble Lord, Lord Kennet, but aggressors very often start with relatively small aggressions. Surely history shows us that, if aggressions are not resisted, they are likely to continue both there and in other parts of the world. So I want to say to the noble Lord that the number of the Falkland Islanders—which is, of course, relatively small, though I have not had the time or the mental agility to check his statistics—who did not want to be occupied by a foreign power has, I think, only very small relevance in relation to the resistance to aggression.
4 p.m.
The Lord Bishop of Norwich: My Lords, is the noble Viscount the Minister aware that on these Benches there is also agreement with the statement made by the Leader of the Opposition concerning deep sympathy for the relatives of those of our men who were killed yesterday? Is the Minister also aware that on these Benches there is a strong sense of support in prayer for all that the Government are seeking to do both to maintain justice and to work for peace in this area? We are engaged in principles which are real ones and are in opposition to aggression. Is the Minister further aware that there is strong Church prayer support for all that Her Majesty's Government are seeking to do in these very difficult days?
Viscount Trenchard: My Lords, I thank my noble friend the right reverend Prelate for those most noble sentiments. The House will have noted the sentiments expressed from my noble friend's Benches, including those by the most reverend Primate, on the importance of the two principles which we are upholding.
Lord Renton: My Lords, while joining in the hope that there will one day be a permanent cease-fire on honourable terms, may I ask my noble friend Viscount Trenchard whether there is not a danger that a temporary cease-fire will enable the Argentinians to repair runways and redeploy their forces to their advantage, and that therefore a temporary cease-fire would be to the temporary advantage of the Argentinians and to our disadvantage?
Viscount Trenchard: My Lords, I thank my noble friend for those questions. I believe that the right honourable gentleman the Shadow Foreign Secretary made remarks on the radio this morning, if I heard him correctly, which were very much in line with my noble friend's sentiments. Any cease-fire at the current time, with the Argentinians still in occupation and without a guarantee that they will remove themselves, would amount to game, set and match to the Argentinians.
Lord Jenkins of Putney: My Lords, may I add—
Lord Chalfont: My Lords, may I ask the Minister—
Several Noble Lords: Order!
Lord Chalfont: My Lords, may I ask the noble Viscount the Minister can he say whether the attack on HMS "Sheffield" was an isolated incident or whether it was part of a general naval military engagement which was going on at the time? In that context, will he assure the House that there will not be too obsessive a concern with the principle of minimum force? If we are at war with Argentina—whether declared or otherwise—perhaps it is time for some of the more time-honoured principles of military engagement to come into operation. Does the noble Viscount not agree that the principle of minimum force is more appropriate to internal policing that to a war with a foreign power? Finally, will he assure the House that this one military reverse, tragic through
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it may be, will not result in the failure of nerve or of national will?
Viscount Trenchard: My Lords, I thank the noble Lord, Lord Chalfont, for those observations and questions. The incident on the day in question was isolated in that area of the total exclusion zone, although the shooting down of the Harrier over the Falkland Islands was going on more or less at the same time. But there can be no doubt whatever that in recent days there has been a sustained offensive, and it has been quite clear from the movement of their forces that Argentinian commanders have been under orders to attack our task force in every appropriate way.
I take the noble Lord's point in relation to the balance necessary when it comes to the question of using minimum force. I assure him, as I have assured the House before, that the guides and rules of engagement which the commander has do really allow a balance to be struck. As the noble Lord, Lord Hill-Norton, said yesterday, they take account of the massive power and range of modern weaponry, where chances cannot be taken. I take the noble Lord's third point in its entirety.
Lord Jenkins of Putney: My Lords, may I say something—
Lord Davies of Leek: My Lords, can the noble Viscount the Minister—
Lord Morris: My Lords,—
The Lord Privy Seal (Baroness Young): My Lords, I do not think that we can have two noble Lords from the Opposition on their feet at the same time. I believe that the noble Lord, Lord Jenkins of Putney, was first. Perhaps we can then hear from my noble friend and then from the noble Lord, Lord Davies of Leek.
Lord Jenkins of Putney: My Lords, I am grateful to the noble Baroness for settling a minor dispute between two Members from this side of the House. Is the noble Viscount aware that all of us, whatever view we may take of this lamentable affair, share the expressions of sympathy which have been given by my noble friend on the Front Bench on this matter, in all three respects? First, I believe we all share his regret and sincere sympathy for those who have suffered; those who have died, those who have been wounded, and the relatives of both. His other two important requests were for a cease-fire and for simultaneous peace negotiations. These two issues seem to go together. There is a growing feeling, not only in this House but outside this House and throughout the world generally, that we should proceed along these lines. May I ask the noble Viscount specifically, is it not the case that there these two tragic affairs demonstrate what weapons experts all over the world have been telling us: that we have now reached the point where offensive weapons are so severe that there is no effective defence against them? If this goes on, shall we not have further casualties on both sides, and is it not time to call a halt?
Viscount Trenchard: My Lords, I will not repeat the sentiments which have been expressed on all sides of

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the House. I will leave to my noble friend, after he has repeated my right honourable friend's Statement, the question of the follow-up of the peaceful route and the cease-fire. I have already made a note in relation to the problems of the cease-fire at a moment when the Argentinian aggression has succeeded, and does occupy the Falkland Islands. So far as the general point about armaments made by the noble Lord, Lord Jenkins of Putney, is concerned, the lesson that I draw is that we must make more sure in the future that potential aggressors do not think they can get away with it.
Lord Morris: My Lords, may I ask my noble friend whether Her Majesty's Government will do everything in their power to rebut the unfortunate suggestion that somehow Her Majesty's Government or indeed Her Majesty's loyal forces are unnecessarily and wilfully escalating military conflict?
Viscount Trenchard: My Lords, we are redoubling our efforts to get the situation properly understood and to get the interpretation of our sinking of the Argentinian cruiser in a threatening attack force into perspective. It is regrettable that the world as a whole, not reading the detail of all our Statements, has given undue attention to our declaration of the exclusion zones and has failed to observe the absolutely clear warnings that we gave the Argentinian Government, on more than one occasion, that any threat to our task force would be met with the appropriate action. We are redoubling our efforts to get that understood abroad as well as at home.
Lord Davies of Leek: My Lords, is the noble Viscount—
Several noble Lords: Order!
Lord Davies of Leek: My Lords, I thought that the Leader of the House said that I was to speak next.
Baroness Young: My Lords, I did in fact suggest that. There are so many noble Lords who wish to intervene in this debate, but if the noble Lord, Lord Davies of Leek, who I believe was next, will give way to the noble Lord, Lord Hill-Norton—and I know that the noble Lord, Lord Shackleton, also wants to get in—I think there will be time for everyone else, provided they confine their remarks to question form.
Lord Hill-Norton: My Lords, I am grateful to the noble Baroness, the Leader of the House. I respect the Minister's wishes not to become technical. However, there is one point of a technical nature about which I feel obliged to enquire of the Minister. Can the noble Viscount say (and I am not seeking operational information which should not be disclosed) whether decoys were used which should, if used, have seduced the Exocet missile from its target? May I ask him a question of a quite different nature? In order to preserve a sense of proportion, both in the public debate and in the debate in your Lordships' House and in another place, will he confirm that the Government weighed up the risks of ships being sunk and aircraft being shot down—and these will not be the last
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—and deemed them acceptable before sailing the task force, in the light of the aim they seek to achieve.?
Viscount Trenchard: My Lords, with regard to the noble and gallant Lord's first question, at this stage we have no information as to whether HMS "Sheffield" used the chaff decoy system; that is one of the unanswered questions at this stage. As far as the weighing of the risks is concerned, I can assure the noble and gallant Lord that the Chiefs of Staff and Ministers debated these long and very carefully. We did not underestimate the problems that exist; nor did we underestimate the air power of the Argentine, which is the particular item in question at the moment.
The noble and gallant Lord gives me the opportunity to say that after this event it is the view of all concerned that the objectives of the task force, if peace moves do not overtake them, can be achieved. We have always made clear that there may well be casualties and sacrifices in achieving this aim.
Lord Davies of Leek: My Lords, I should like to ask the noble Viscount if the nation is going to be told whether under international law we are now at war or not at war. Secondly, it is not fair to commanders on the spot unless we come under international law in incidents like those that are now happening. We must give the Government unity of approach at the moment, but the Government owe it to us, the Opposition, and to the public to state where we stand now under international law. We cannot go on pussyfooting by means of little announcements by civil servants and others. The Government are responsible, and they should make any particular announcement.
Viscount Trenchard: My Lords, neither side has in the old-fashioned way declared war on the other. I am not a lawyer, but I understand that the majority of lawyers today take the view that we are not at war but that hostilities are being carried out under Article No. 51 in self-defence, which has been described many times before.
So far as the effect on those taking part in the actions is concerned, I can assure the noble Lord that the principles of the Geneva Convention have been and will be adhered to in every respect.
Lord Shackleton: My Lords, I am grateful to the noble Baroness for her conduct of a difficult situation with the acquiescence of the House. If I may ask the noble Viscount one or two questions, first of all, has he any information—I do not know if it has been published—as to whether HMS "Sheffield" is still afloat and whether there is any prospect of towing her back? I may say that this is infinitely less important than the loss of life, on which the views of the House are identical.
I thank the noble Viscount for giving rather more information than we have sometimes had; this is very valuable indeed. He has made a statement that the ships are still engaged on operations. I do not expect him to say what is involved, but would he agree that we ought to understand that this may mean that there will be further operations of a kind which lead to loss of life? Would he also accept that, operating as we are, strictly within the terms of the United Nations, in

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self-defence, under both Resolution 502 and Article 51, we are not there simply to defend the Falklands, important though that is, but to uphold international law, and that there are much wider issues than simply this particular exchange?
Would he agree with me, therefore, that, tempting though it is, it is quite futile to equate the numbers of people who live in the Falkland Islands with our losses? This is not a numerical exercise. I hope, therefore, that the noble Viscount will continue to give all the information he can. The noble and gallant Lord yesterday referred to the range of missiles. We have always been aware that Exocet was a very dangerous weapon. Would the noble Viscount agree that it is not really very possible to answer questions about the defences of "Sheffield", since it is apparent that she was not equipped with the latest Sea Wolf and other equipment of that kind. Would he also confirm that this makes clear that the "Belgrano" incident was part of a wider operation against the task force and that those who believed—and the Government must carry some responsibility for somehow allowing it to be thought—that sending the task force down there would lead to a bloodless solution of the problem were not living in the real world?
Viscount Trenchard: My Lords, the latest information I have is that the "Sheffield" is still afloat. I cannot say more than that. But she has been very badly burnt and almost certainly burnt out. So far as future operations are concerned, I think I have already made clear that the Government do see the possibility—we shall try to make sure that casualties are the minimum on both sides—of further casualties taking place.
I entirely take the noble Lord's point about international law. I have tried to leave those questions until my noble friend makes his Statement. On the question of the Exocet, I must say again that our ships do have a combination of defences; they cannot all be on each ship; they should be able to deal with both aircraft and missiles, but that does not mean that they will do so on every occasion, particularly if a low-flying aircraft has by some means or another already learned where the target is.
With regard to the noble Lord's point about making clear that the Argentinian operations have been part of a wider operation, I hope that the Government have done that, but I thank the noble Lord for making it clearer still. It must be abundantly clear that the operations over recent days are all part of a major Argentinian offensive, the alleged results of which they have taken great pleasure in announcing on their television and in their media, including the claim of the destruction of 11 Harriers and the claim of serious damage to "Hermes" and other major ships. This surely cannot leave in any doubt, by their own words apart from their own deeds, that the orders of the Argentine commanders are quite clear, and that is that they are to do as much damage as is possible to the British task force.
Baroness Young: My Lords, there are so many noble Lords who wish to ask questions, may I suggest that we take my noble friend Lord Glenkinglas, who has
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been trying to make his point for some time? Then the noble Lord, Lord Soper, then perhaps my noble friend and the noble Lord, Lord Molloy, would ask their questions. Then I suggest we move on to the next Statement.
Lord Glenkinglas: My Lords, would my noble friend not agree, while it is nearly 40 years since we were at war or in some state rather like it, that perhaps it is unfair both to himself and to his right honourable friend if this House, while it enjoys the opportunity of having immediate contact with the Ministers concerned, does not impose on itself a self-denying ordinance by letting the Ministers get on with their jobs and not expecting them to make Statements to this House on every possible occasion? Would my noble friend perhaps also agree that there is a risk—and I have seen it twice already today, and I am not going to go further—of his giving some operational information away which could be very damaging to our interests?
Viscount Trenchard: My Lords, a heartfelt "brief-free", "Thank you" for the first part of my noble friend's supplementary. I can assure him that the information that I have given to this House and that my right honourable friend has given to the other House has, on every occasion, been checked and cross-checked with the Services to make sure that we do not give more information than is helpful to the position of our task force.
Lord Soper: My Lords, is the Minister aware that the Free Churches would want to be associated with the words of condolence and sympathy that have already been offered to those who have suffered in the present conflict? Is he further aware that there is widespread disagreement within the Churches, and that it would be totally wrong to assume that the concept of the "just war" is generally held by those who profess the Christian faith? Finally, is he aware that there is unanimity, so far as a person such as I am can try to discover it, as regards the peremptory need for a temporary cease-fire, if nothing more profitable than that, in order that the principles that have invigorated much of the discussion, and the principles which have underlaid many of the attitudes towatds this concept can, in fact, have freer play than is possible within the general environment of armed violence? Therefore will he press forward with some kind of attempt to prepare a cease-fire, a moratorium even for the shortest of time, in order to give licence and opportunity for other principles to take their place within the solution of this problem?
Viscount Trenchard: My Lords, I shall leave the noble Lord, Lord Soper, to continue the debate within the Church on moral grounds; on that I would not claim to be an authority. But I have noted the many statements from a number of right reverend Prelates which do not entirely agree with the noble Lord. So far as a temporary cease-fire is concerned, I think that I have covered this question on more than one occasion. But the difficulties of a temporary halt in operations have been made very clear by my right honourable friend the Prime Minister in the other place a week

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or more ago. The objections are still the same—namely that to leave the aggressor in possession of his prize, as he sees it, and to call a cease-fire while he is in possession, is probably not to push forward a final settlement which ensures that aggression does not pay and that his troops withdraw. Having said that, I leave it to my noble friend to make it entirely clear that this does not mean that at all times we are not taking every opportunity to push forward the peace movement. But when you are dealing with a dictator and an aggessor I believe that the chances of getting peace on terms where aggression is not seen to pay, are very much higher if our will is not deflected.
The Earl of Dudley: My Lords, I should like to ask the Minister a question. However, before I ask the question, because of its nature I should like briefly to say that as a father of three half-Argentine children with an Argentine mother, including my son and heir, I naturally deplore the loss of life on both sides. Nevertheless, I should like to ask the Minister whether he would seriously consider that, if the Argentine air capability does pose a more serious threat to our task force than his earlier reply appeared to indicate, if it does pose a serious threat to our servicemen and to possible loss of life—which I believe it does—will he undertake that this capability will be reduced by all possible means even if that means taking some risks with public opinion?
Viscount Trenchard: My Lords, I thank my noble friend for making those points. I do not think that we have underestimated the air capability and I would point out to my noble friend that previous air attacks which continued throughout a whole day were very effectively repulsed and Argentine aircraft were shot down and they were unable to press home their attacks. Nevertheless, we must not underestimate the particular capabilities of these five aircraft that they possess and we shall not do so. I have temporarily lost the last point that my noble friend made; I do not know whether he wants to make it again?
The Earl of Dudley: My Lords, the point was that, whatever action should be taken, it should be taken without regard to public opinion.
Viscount Trenchard: My Lords, I think that I have said enough on the delicate balance which we are trying to achieve.
Lord Molloy: My Lords, is the noble Viscount aware that there is another dimension that we must always keep in front of us—namely, that the Argentine aggressors now occupying the Falkland Islands have a political and social way of behaving which is as totally alien to the Falkland islanders as it is to these British islands? Is he also aware that the grave dilemma that we face is how to see to it that freedom and right as we understand them are established without the massive use of force and the horrid loss of life? Would it, therefore, not be possible for Her Majesty's Government to consider asking the United Nations that, if the Argentinians withdraw and go back to their country, we will not occupy but that a United Nations force and administrators should occupy the Falkland Islands
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and the issue can be decided by the people who live there—namely, the Falkland islanders?
Viscount Trenchard: My Lords, if I may, I shall leave my noble friend to deal with Lord Molloy's point which can be dealt with better after his Statement. I would merely say that my noble friend will be aware of the need to be sure of enforcement of any settlement of the kind, or near the kind, that he suggests.
Lord Belstead: My Lords, with the permission of the House I shall repeat a Statement being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement reads as follows:
"My right honourable friend the Defence Secretary has just spoken about military aspects of the situation. I must, however, add my own tribute to the courage of the crew of HMS "Sheffield" and of the Harrier pilot and my sympathy to the families.
"The military losses which have now occurred on both sides in this unhappy conflict emphasise all the more the urgent need to find a diplomatic solution.
"The House will wish to know that since my return from the United States on Monday I have remained in the closest possible touch with Mr. Haig.
"As I reported to the House yesterday, we are working very actively on ideas put to us by Mr. Haig, including some advanced by the President of Peru. Yesterday afternoon, after my Statement, I sent a constructive contribution of our own to Mr. Haig. He is taking this fully into account. I shall be in touch with him again later on today.
"I want to tell the House that a vital ingredient of the ideas on which we are working is an early cease-fire and the prompt withdrawal of Argentine forces. I can assure the House that we are sparing no efforts in the search for an acceptable solution in line with the principles which we have stated on several occasions.
"The points which were put to me in New York by the Secretary-General of the United Nations are also receiving our very careful attention. I have been in touch with Sr. Perez de Cuellar about this since my return from New York and will continue to keep in close contact with him.
"There are many points of similarity between the Secretary-General's thinking and the points we are pursuing with Mr. Haig. Indeed, Sr Perez de Cuellar's helpful ideas seem certain to be reflected in the basis of any solution which we may be able to achieve.
"I can assure the House that any obstructionism there may be will not come from our side. Although it is we who have been the victims of aggression, it is also we who are working tirelessly and constructively for a peaceful solution".
My Lords, that is the Statement of my right honourable friend.
Lord Stewart of Fulham: My Lords, the House will be grateful to the noble Lord for repeating the Statement, which we have followed with interest and with

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hope. Those of us on this side of the House will very much want to be associated with the opening phrases of the Statement which pay tribute to the courage of the crew of HMS "Sheffield" and of the Harrier pilot, and with the expressions of sympathy with their families.
I think that the noble Lord, and indeed the Government as a whole, will agree that we on this side of the House have given our support to the Government's conduct of affairs in this unhappy and terrible business. But the noble Lord will also know that there is one aspect of the Government's conduct about which we have felt disquiet and to which I think it would be right for me to draw attention now and on which to put one or two questions to the noble Lord. It is whether the Government are giving full weight to the need to involve the United Nations in this business. For example, I notice that the Foreign Secretary says in his Statement, after mentioning Mr. Haig's proposals and those of the President of Peru:
"I sent a constructive contribution of our own to Mr. Haig";
whereas, in reference to the Secretary-General of the United Nations he says no more than:
"I have been in touch with him … and will continue to keep in close contact with him".
There does not seem to be the same positive and constructive approach towards any help that might be obtained from the Secretary-General as towards Mr. Haig's proposals. I am not sure that that emphasis is quite the right one.
I should like to refer to two other phrases in the Statement:
"an early cease-fire and the prompt withdrawal of Argentine forces".
Perhaps my own experience in office makes me unduly sensitive about the use of words, but I take it that there is no substantial difference between "early cease-fire" and "prompt withdrawal". We have generally assumed that the two go together. I can appreciate that there might be technical difficulties about withdrawal, particularly after what has happened to the airstrip. But I take it that the Government are clear that they will not be tricked in any way on this and that any settlement must involve the certain, complete withdrawal of the Argentine forces.
With regard to a cease-fire, I take it that the Government have given some thought to what our task force would do in the circumstances of a cease-fire, and what it would mean for them. It may be possible for the Government to tell us something of their thinking about that.
The noble Lord may remember that yesterday I asked whether we had made any approach to the Secretary-General of the United Nations for him to set up a good offices commission. I believe—I am not certain of this—that the Argentine Government have made such an approach. I think it is most important that we do not get outrun in approaches to the United Nations by other nations which are not necessarily all too well disposed towards our interests. The Government must watch this. In conclusion, may I remind the noble Lord of the points raised in the recent question by my noble friend Lord Molloy, which his noble colleague in effect referred to him.
Lord Mayhew: My Lords, this Statement appears to my noble friends and myself to be rather more positive and hopeful than earlier Statements of the same kind made recently by Her Majesty's Government. It is informative about the machinery of negotiations, but it is not informative as to what those negotiations are about. It tells us that there is similarity between the Secretary-General's thinking and the points that the Government are pursuing with Mr. Haig. If we knew one of them, we would have some clue about the other. But as we know neither, it does not really inform us very much more about what we know already.
I note that the Statement says that a solution to be acceptable must be:
"in line with the principles which we"—
Her Majesty's Government—
"have stated on several occasions".
The House will be aware that on one or two of these principles—for example, the principle that the wishes of the Falklanders should be not merely extremely important but actually paramount—my noble friends and I have questions, and we have questioned this in this House. We note the word "cease-fire" and note that an early cease-fire and the prompt withdrawal of Argentine forces is something the Government are working on. I suspect that the Government will be very strongly pressed internationally for a cease-fire without the prompt withdrawal of Argentine forces, and I should like to make it clear that my noble friends and I would regard a cease-fire which allowed the resupply and reinforcement of the islands as totally unacceptable.
On the other hand, it may be that a temporary ceasefire, with a ban on resupply and reinforcement, would not be so obviously contrary to the interests of what we are attempting. My noble friends and I have given support to the Government in their search for a peaceful solution. We are glad to note this catalogue of, I think, increased activities in the search for a peaceful solution, and we wish the Government every success in that endeavour.
Lord Belstead: My Lords, I am grateful to both noble Lords for their response to my right honourable friend's Statement. The noble Lord, Lord Stewart, asked whether the Government are giving full weight to the need to involve the United Nations. We told the Secretary-General last night that the Government are considering the ideas that came up when my right honourable friend saw Senor Perez de Cuellar on 2nd May. The United Nations Secretary-General has not described these ideas as being formal proposals or a United Nations plan. This is what distinguishes the Secretary-General's initiative from the initiative which is also being taken by the President of Peru and Mr. Haig.
It would be wrong—I have to say this with regret to the noble Lord, Lord Mayhew—for my right honourable friend, or others on his behalf, to say what these ideas are of the United Nations Secretary-General. But I should like to make it clear to the noble Lord, Lord Stewart, that my right honourable friend welcomes the Secretary-General's concern and intends to keep in close touch with him. We must consider carefully the

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relationship between the United Nations Secretary-General's ideas and those put forward by Peru, on which we are also working urgently. My right honourable friend will very shortly be giving the Secretary-General a fuller indication of our thinking.
The noble Lord, Lord Stewart, asked me about the juxtaposition in the Statement of "an early cease-fire" and "a prompt withdrawal of the Argentinians", and adjured the Government not to be tricked in a matter of this sort. Although we deeply regret the tragic losses on both sides, our basic objective remains unaltered. This is to secure the withdrawal from the Falkland Islands of the occupying Argentine forces, as called for by Security Council Resolution 502. Our operations will be suspended as soon as this objective is secured.
The noble Lord reminded me that the Argentines had, so it is said, called for the setting up of a good offices committee in the person of the United Nations Secretary-General. I would simply say that for a country which has shown no regard whatever for a mandatory resolution of the United Nations then to turn to the Secretary-General of the United Nations and say that it wishes to see in his body a good offices committee set up, is almost an insult to the organisation of the United Nations. For our part our view about this—and we absolutely agree with Her Majesty's Opposition and others of your Lordships in this matter—is that what is important is that the United Nations Secretary-General is very active in this matter, and we are keeping, as I have said, in very close touch with him.
Finally, may I just say that the noble Lord, Lord Mayhew, made the point that an international ceasefire without withdrawal would be unacceptable. Yes, I have said on behalf of the Government that that is the case, and so also, if I may add it, is the precondition which is still being put by the Argentines that for any negotiations to take place the result of those negotiations would already have been decided in the Argentines' favour. That will not do either if a just solution is to be reached.
4.41 p.m.
Lord Aylestone: My Lords, is the noble Lord aware that from these Benches, while firmly continuing our support for Her Majesty's Government, we agree with the Foreign Secretary's Statement when he says that a diplomatic solution is now so very urgent? May I say to the noble Lord, also, despite what was said by an earlier speaker on the previous Statement, that in our view world opinion is extremely important. While every detail of any negotiations cannot perhaps be divulged, it would nevertheless be of great value to world opinion and to ourselves if it was made clear what is, or is not, negotiable at the moment by both the Argentine junta and by our own Government.
Lord Belstead: My Lords, we can on our side only make clear what is, and what is not, negotiable. We would be ready, as we have said many times, to enter into negotiations, but on the lines of Security Council Resolution 502.
The Earl of Halsbury: My Lords, my question is based on the proposition that our performance in
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shooting wars is rather more distinguished than in shouting wars. We too easily allow ourselves to get bawled out. What steps are Her Majesty's Government taking to implement the request made previously by the noble Lord, Lord Shackleton, that we should give some publicity to the legality of our own case for sovereignty over the Falkland Islands? There is a case—I am only an amateur; I will not say how strong it is—and what are Her Majesty's Government doing to let the world know that we have a strong legal case for sovereignty over the Falkland Islands?
Lord Belstead: My Lords broadcasts by the BBC to Latin America in Spanish have been increased, but, as I reported to your Lordships' House yesterday, there is a problem with jamming by the Argentines so far as that is concerned. However, broadcasts by the World Service of the BBC in English are, I am advised, unaffected in this respect. It is also relevant to the noble Earl's question that as from 30th April the telegraph and telex links to the Falkland Islands have simply been severed by the Argentines. We are making it our business to ensure that despite this the islanders still receive truthful accounts of what is happening. We are making full use of the facilities of the BBC to this end.
Lord Brockway: My Lords, may I ask the Minister whether he is aware how much we all welcome the concern which the Government have shown to secure a diplomatic solution of this issue? In the Minister's speech detailed reference was made to the negotiations with Secretary Haig and with the head of state of Peru. Is the Minister aware that all of us welcome those negotiations? But was not the reference to the United Nations much less definite? Is not the United Nations the international authority to which we should look for a solution of this problem?
Is it not the case that when the Secretary-General met our Foreign Secretary he detailed to him proposals for a solution of this problem? First, a cease-fire; secondly, a withdrawal of the forces on both sides; and, thirdly, as I mentioned yesterday, a United Nations presence in the Falklands and negotiations. Has the Foreign Secretary made a response to those actual proposals which have been made by the Secretary-General of the United Nations?
Lord Belstead: My Lords, I have made it clear in supplementaries that the United Nations Secretary-General has not described his ideas as being formal proposals or a United Nations' plan, although he is clearly now very active in this matter and we are in very close touch with him. But there really is a problem which I would ask the noble Lord, Lord Brockway, to face, and that is that for the Secretary-General to make headway in this matter it is necessary for him to take the Argentine Government and the United Kingdom Government with him in spirit and in fact, and it is extremely difficult for the United Nations Secretary-General to do that when the Argentine Government is simply flouting a mandatory resolution of the organisation of which the United Nations Secretary-General is the secretary.
Lord Hankey: My Lords, are the Government aware that a very great number of people admire the efforts

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which the Secretary of State for Foreign Affairs is making to achieve a diplomatic solution? But have the Government any reason to think that the Argentine Government is going to withdraw from the Falklands as a result of the efforts which are being made? The ordinary man only has the press and the radio to go on, and there does not seem to be any indication that that is likely to happen. Is it not necessary to regard diplomatic and military pressure as a whole, and is it desirable that we should hold back our efforts around the Falklands in military, naval, and air terms, letting the weather get steadily worse and perhaps the diplomatic weather, looking around all the nations of Europe and elsewhere, getting no better? Should we perhaps not be having grave philosophical doubts about the doctrine of using minimum force? Might there not be very soon a case for taking the maximum force on this and settling the question jolly quickly?
Lord Belstead: My Lords, I think that we must continue to take military, economic, and diplomatic action in this matter, but that we must do one more thing—and I hope that both my noble friend Lord Trenchard and I have made it clear this afternoon in our Statements on behalf of our Secretaries of State—and that is that we are ready at all times to enter into proper negotiations on this matter. We are ready to use the good offices of the President of Peru and Mr. Haig, and also the United Nations Secretary-General, but it has got to be for fair and just negotiations.
Lord Raglan: My Lords, it appears that not the least of the difficulties which is faced by the Government and Mr. Haig and the Secretary-General of the United Nations is that it is not clear who is in charge of the Argentine Government. Would the Minister kindly say how much of an obstacle this characteristic of the Argentine Government is to a negotiated solution?
Lord Belstead: My Lords, the United Nations Secretary-General, as I made clear, is in contact with the Argentine Government, as indeed he is in contact with us, and also the Peruvian proposals were put to the Argentine Government, as they have been put to us. The Peruvian proposals of course were turned down by the Argentine Government. There is a Government there all right; it is just that their policies are not policies at the moment which are leading towards a just and peaceful negotiation and solution of this problem.
Lord Monson: My Lords, despite the commendable efforts of the Secretary-General, would the noble Lord not agree that the United Nations is not in the last resort an objective or impartial body? Too many of its component nations have their own axes to grind, and it would therefore be extremely unwise to place excessive reliance upon that organisation.
Lord Belstead: My Lords, I do not think that the Statement I have made today shows excessive reliance. It shows that the United Nations Secretary-General is very active in this matter, and we are, as I believe is proper, in close touch with him.
Lord Kaldor: My Lords, is the noble Lord aware—
Baroness Young: My Lords, I think we have had a very long time on both Statements. We are also conducting an important debate this afternoon, so perhaps it would be right just to take the noble Lord, Lord Kaldor, but after his question to move on and for Lord Tordoff to continue with the debate.
Lord Kaldor: My Lords, is the Minister aware that the BBC News Service announced at 9 o'clock last night that at 10.45 they would transmit on the programme Newsnight an interview given to the BBC by the Foreign Minister of the Argentine? In the event, that interview did not form part of the programme. I should like to know, first, whether the noble Lord was aware of that, and, secondly, whether he knows of any reason why it did not form part of the programme.
Lord Belstead: My Lords, I understand from the noble Lord, Lord Kaldor, that it was thought by those watching television that there would be a transmission of the Foreign Minister of the Argentine on television in this country, and then the Foreign Minister of the Argentine did not appear. I should think that was a very appropriate solution.

Inland Transport
Debate resumed.
4.51 p.m.
Lord Tordoff: My Lords, as perhaps the only Member of your Lordships' House not to have taken part in that discussion on the Falkland Islands—
The Lord Chancellor (Lord Hailsham of Saint Marylebone): Oh?
Lord Tordoff:—together with the noble and learned Lord the Lord Chancellor, as he reminds me, perhaps we may now resume the debate on the Motion moved by the noble Lord, Lord Lucas. I welcome this opportunity to take part in a broad and wide-ranging debate on the subject of transport in the United Kingdom. It is a difficult subject, primarily because it is one about which everybody knows something.
It is easy to discuss specific items—we could spend a long time discussing the merits of seat belts and probably an even longer time discussing the merits of the M.25—but to tackle the question of transport on a wide-ranging scale, as the noble Lord has invited us to do (almost on the basis of political philosophy) is exceedingly difficult. The reason for that is that we can talk of planning, integration and co-ordination—the noble Lord, Lord Underhill, took us somewhat down that track—but when we think about those matters, what we mean is having an integrated, co-ordinated and planned transport system which will take us personally from our homes to anywhere in the country at any time of the day or night, and preferably free.
I regret that the noble Lord, Lord Mottistone, is not in his place at the moment. I remember that

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during the debate on the situation of London Transport, raised on a Bill in the name of the noble Lord, Lord Underhill, a few weeks ago, Lord Mottistone, very rightly, in reply to something I had said, pointed out that the cost of private motoring was very high. It is indeed a very expensive way of getting around, if one is prepared to cost one's motor-car travel in a proper way, and I am sure that if we all had a cost accountant at our elbow we should put in the cost of borrowing the money to buy the car, taxes, maintenance and so on.
In practice, we do not look at it that way; we tend to look at the cost of an individual journey based on the variable costs of the petrol we use for that journey. That is at the heart of many of the problems of passenger transport in this country; we always think of the marginal cost of an individual journey. In other words, we think of the price per gallon of the amount of gasoline we shall use to go from A to B, and we tend to compare that with the cost of any other form of transport that is available to us, setting aside the convenience factor, which is always there, in being able to get into your own motor-car outside your own house and go to wherever you want to go.
I should perhaps declare an interest. As many of your Lordships know, I work for a subsidiary of a multinational oil company. What I have explained is also a problem in terms of the pricing of gasoline in this country. Because it appears to be the major cost in any journey, any increase in the price of gasoline appears to be very significant in terms of one's cost of living, whereas in fact an increase of 2p or 3p in the price of gasoline represents a very small proportion of the total cost of running a motor-car.
There is no doubt that to run an efficient transport system is essential for a developed, civilised and industrial society. It is also true that it is the duty of the Government to ensure the provision of that sort of transport system. I submit, however, that it is not necessary for them to provide that directly, and I shall develop that point as I go along because it is in contradistinction to some of the remarks of the noble Lord, Lord Underhill.
Transport is important for the other things which depend on it, not transport for its own sake. It is important in terms of our ability to travel to work and to go shopping. I nearly fell into the trap into which the noble Lord, Lord Underhill, fell earlier in that I almost referred to our wives going shopping. When he was talking about cycle tracks, he said something about the need to stop women wheeling prams. I caution him that certain ladies inside and outside this House will have his guts for garters if he goes on saying that sort of thing, and properly so. It is important, as I was saying, to get our children to school, to enable us to go on holiday; and it is important that we have transport to keep in touch with our friends and relatives. It is interesting, having gone through that list, to note that all those things refer to passenger requirements. I shall refer to freight later.
Even on the passenger basis, it is an incredibly complex network and there are no simple solutions. Indeed, there is no global solution, in my view, which will answer all the problems of transport in Britain. The noble Lord, Lord Underhill, went too far down that track; I do not think the possibility of the total planning of the system is available to us. It is too
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complex for that. In the '50s and '60s many of us—not thinking just about transport but many other factors too—had the vision of a great computer being constructed into which one could feed information, and all the answers, about the future and planning requirements, would come out by pressing the right knobs. We went through a period when people talked about garbage in and garbage out, and it was said that what was wrong with the great computer was that we were not putting in the right sort of information.
Many of us in industry today recognise that that sort of planning is a fantasy. However good the information, however good the model and however large the computer, one cannot predict the future, and that applies to transport as well as to many other facets of our industrial life. One need only look at the discontinuities that can be caused from time to time. The one which stands out in everybody's mind is the increase in crude oil prices in 1973 as a result of the activities of OPEC. Who now would dare predict what the price of crude oil will be a year from now, let alone in five years from now? That is the sort of basic data one would need to have to make that sort of planning and in predicting a reality.
We have moved, certainly in industry—and I believe the Government are now moving that way—into what we describe as scenario planning, where we postulate a certain range of possibilities and try to ensure that we optimise the possibilities within that range. When we try to do that in something as complex as the transport system of this country we must be a little more humble than we have been in the past; and the idea of having a great, planned transport system begins to go out of the window. At the same time I do not believe that we can have total freedom in the system, because that leads to anarchy and indeed to a disruption of the road services in particular through the kind of chaos that we find in many of our inner cities.
The point that I am getting round to, if your Lordships follow me, is that many of the solutions to the problems must be found locally. This is a dimension which perhaps has not entered into the debate so far. The more that we can push down the problems to the lowest level of local government, the more that we can involve within the local government context a variety of private enterprises, the better the chance we have of producing some kind of answers to the great questions that beset us.
Clearly there are some things which central Government must look after. I have in mind, for instance, the main trunk road network, the motorway network—and I dissent from few of the things said so far on that subject—and the rail network in terms of the Inter-City traffic. Certainly the Liberal Party has been in the forefront of those who have been pressing for increased investment in the electrification of the major rail network.
There are all kinds of separate items that must come into a debate such as this, and many of them have already been mentioned. We must think in terms of the future cost of transport, the scarcity of fuel, and the question of whether we are using the available fuel in the best possible way. I do not think that we now expect transport fuel to run out by the 1990s, but the amount of oil that we can obtain from the North Sea is finite. It is interesting to note that in the past few

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days a number of projects in Canada have finally collapsed because of the cost of producing oil from shale and from tar sands. This is connected not with any physical reason, but with economic reasons, though the time will come when it is economically attractive to undertake such extractions. That instance demonstrates the difficulty of predicting what will be the future in terms of the resources that we can put into our transport system.
I do not want to become involved in the road versus rail argument. I felt that at the beginning of his remarks the noble Lord, Lord Lucas of Chilworth, perhaps put forward rather too strong a road lobby view, though he modified that later in his speech. We must be careful to recognise that there is a matrix here, that road and rail both have their parts to play, and we must all clear our minds as to what part various assets of the country have to play in producing a true national transport system.
We have to look at the environmental impact, and again the public must understand that there are no simple solutions to environmental questions. It is a matter of finding the best solution, not of finding the perfect solution. How much land is one prepared to lose? How much agricultural land is one prepared to let go in order to avoid the danger that would arise to children's lives by building a by-pass around a primary school?
There are no simple solutions, and somehow or other we must help the people of this country to understand that the balance of risk is the best that can be achieved in transport questions. There is no doubt that today mobility is an important part of life not only in this country, but throughout the world. We are perhaps the most mobile society that the world has ever known. For us and for our children the chances of travelling to the ends of the earth are now much greater than they have ever been. Indeed, even in the third world the chances of travelling far abroad are much greater than they have ever been. This is a situation which from these Benches we would in no way criticise. Mobility is liberty, and liberty is the great touchstone of liberalism. But we must recognise that if we abuse that liberty, we are a menace to society, and if the motor-car is the epitome of that mobility, it is also the major threat to life and to liberty itself.
Nowhere is that situation more apparent than in the great conurbations, and in particular in London. I do not again want to get into the long debates that we have had in your Lordships' House in the past few weeks on the problems of London Transport, save to say that in considering the whole subject of transport, there is no question but that the commuter is the person who suffers most—and this is not a party question—from our inability to solve transport problems in the great urban conurbations.
As I think I said in the last debate, so far as London is concerned—and I shall not today go beyond this point—the answer must lie not specifically with the Government, not specifically with the GLC, but in setting up some kind of Greater London passenger transport executive that is capable of looking at the totality of passenger transport problems within the conurbation.
But I repeat that outside that area the answers are better found through the smaller local authorities
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tackling the problems, together with the kind of innovation that can come from using private enterprise, as is being done in various parts of the Far East, such as Hong Kong and Bangkok, which have enormous traffic problems. There is there a degree of innovation which, if it were used in tackling the problems of this country, might help us considerably.
There are many other aspects of this subject which one could deal with. There is the question of the way in which the road fund tax is taken from the motorist. There is the belief that we hold on these Benches that this tax should be graduated according to engine size, and that for ecological and other reasons there should be emphasis on encouraging people to have more efficient and smaller car engines in the future. There is also the whole question of lorry weights. We support the Armitage proposals and believe that common standards are important for the European Community, and that such an approach would remove much of the aggravation from the problem of inter-European heavy freight traffic. There is a need for a degree of further road building in this country, but we use up a great deal of agricultural land, and so we must be quite specific and target our needs onto those areas that are desperately in need. Clearly the M.25 is a specific need, and I would not quibble with some of the other projects that the noble Lord, Lord Lucas, mentioned.
However, at the end of the day we must try to get away from dogmatism on the subject, and we must together look at each problem pragmatically. We must look at the opportunities which exist today within our inland waterways; and if the Humber waterway experiment is successful, we must look at the idea positively with a view to extending it to other areas of the country. I hope that in looking at such ideas we shall not be inhibited by the present aggravation within dockland. The whole question of dock labour relations goes back a long way, and it would not be right to raise it on too detailed a scale in this debate. People understandably have fears based on what has happened in the past on the railways and in the docks. They have fears about loss of jobs. Such fears stand in the way of genuine progress and genuine increases in efficiency, which in the end will improve the job prospects for the country as a whole. It is tragic, as I say, that these fears should be allowed to stand in the way of genuine experiment within this country.
My Lords, I am conscious of the fact that I must not go on too long because this debate has been considerably interrupted and I feel very greatly for the noble Lord who is to follow me, who has been, I am sure, sitting on the edge of his seat for some considerable time. But again I say I am grateful to the noble Lord, Lord Lucas, for introducing this debate, and I am sure we now all look forward with great interest to the maiden speech of the noble Lord, Lord Cayzer.
5.11 p.m.
Lord Cayzer: My Lords, as has been said by several speakers, this is a very difficult problem altogether, and it is a subject on which one could speak for a very long time. I cannot claim to be able to do that because my knowledge of inland transport does not equate with that of other speakers, particularly the mover of this Motion, the noble Lord, Lord Lucas of Chilworth.

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But my interest in inland transport stems from the fact that my company has been engaged in British shipping for over a hundred years, and I have been engaged for most of my life in that context.
There are four ways of moving goods and people around the country—air, rail, road and sea. What interested me very much to see was what vehicles they used, how they travelled. I believe that within these islands, in 1980, 7 per cent. of the people were carried by rail and 92·5 per cent. by road. As far as freight is concerned, the figures were 9·2 per cent. by rail and 82 per cent. by road. Of course, sea, air and rail have this in common, that they all depend on road connections. But I would say that one of the factors in a democracy is choice. Once you get rid of choice you get rid of democracy. Therefore, to a very large degree people will have an influence on the type of development that has been so eloquently debated so far.
The relationship between these modes of transport which I have referred to must change over the years, as it has throughout our island's long history. The change nearly always comes about by economics and by effectiveness and efficiency; and it is nearly always, in the initial stages, a painful process. I want to give an example of this which was a very personal one to myself and to my company. About 20 years ago we owned over 100 ships—passenger liners, cargo liners and other types of ships. Then Nemesis approached and overtook us. It took the form of the airlines, and especially these large jumbo jets. This put an end to our passenger liners, which we had to withdraw from service, and, very sadly, yet thankfully in the circumstances of today, only great liners like the "Queen Elizabeth" ride the seas.
The development of the container ship made the traditional cargo ship redundant, too, and your Lordships can imagine what these changes meant to us, especially when we began to think of employment. But we could not oppose change, nor could we fall back on the taxpayer. We adapted. We moved into a container consortium; we reallocated our resources; and we redeployed as many as possible of the people we had employed. It was hard and it was painful, but two facts emerged which I think are of some interest. First, our turnover increased from £56 million in 1968 to £335 million in 1980. Secondly, and I think even more important, the number of people we employed in this country, albeit in different jobs, rose from 3,500 to 9,000—and that does not count, through the diversification which was forced on us, the large number of people that we also employ through foreign contracts.
Change, properly managed, can therefore bring benefits to both society as a whole and to those who work in it; but I know that in a conservative country like this one (and I use that word with a small "c") change is very hard. None of us likes change; we all fear it. But it is something that we have to face; otherwise, we shall have a stagnant society and probably less employment and a lower standard of living for all the people in these islands. I know that both sides of this House desire to see more employment and the better use of employment. We must identify what changes need to be made dispassionately and on purely economic grounds, I myself think, because, in the end, economics catch up with you. You cannot
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spend more money than you create. We must administer these changes with humanity—that, I think, is absolutely vital—because you cannot take people with you unless you can persuade them that the way you are going to lead them will be for the better.
Returning to the subject of this debate, I think we were slow off the mark in creating motorways. One thinks of the autobahns in Germany; one thinks of the unemployment, which many of your Lordships remember (I do, vividly, because I worked in Glasgow in those days), between the wars. We could have got on with the job then, and done something about it. Of course, there is debate about the heavy lorries, and I think we must get round this, if possible, by bypassing towns and villages. I am very much in sympathy with people who feel that these mammoth container lorries, and so on, passing through their villages, sear their lives. But this is not beyond our ability, and we shall have to give very careful thought to parking space in our towns and cities. To a small degree this is being thought about when people put up new buildings, but, of course, this is a very small part of the matter.
Turning to railways, the noble Lord, Lord Beeching, began the process of dismantling uneconomic railway lines, and this is another area which I think we must look at again. There is no use in running trains unless people are going to travel in them. The question of whether redundant railway tracks—and there are a lot of them throughout the country—can be turned into roads with advantage should be carefully considered. I have great hopes of the fast inter-city trains because they are extremely convenient for those who travel and have to travel a lot between various parts of the country and the metropolis; and the advanced technology which is proceeding, with some difficulty, I believe, means that they are both speedy and comfortable. It may, and I think does, make sense to move certain major bulk commodities such as coal and ore by freight train.
I have no desire to be dogmatic. I believe that this is a serious problem that should not divide us but unite us in trying to find the right solutions. I hope that objectivity will win the day. I, myself, believe that we need more and better roads for the obvious reason that it is cheaper to carry goods by road. Although it has been pointed out that the cost of motoring is expensive, life is made up of choices and quite often one chooses the most expensive thing to do because one likes it best. Therefore I think we must have more roads.
I am very worried about the very large losses which have been suffered by British Rail. I believe it is true to say that since nationalisation British Rail—and I am not being critical; I am merely stating the facts—up until the end of March 1981 absorbed £13 billion, at 1979 prices, of taxpayers' money. This is more than any other nationalised industry and nearly twice as much as British Steel. This cannot be allowed to continue. No privately-owned company would have allowed it to do so. They would have had to change. We who work in the private sector of industry have the discipline of knowing that if we fail we suffer. No rescue service is available. My plea therefore is that where the nation provides the service it should look at

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the matter from the point of view of economics rather than politics.
I hope that I may have said something that at least makes people think a bit about this problem for I am convinced that it is of first importance. We in this country will count for nothing if we cannot put our own affairs in order. If we are going to create more employment, and, hopefully, a good standard of living, it will depend on the ingenuity with which we seek to change the operation of some of the industries which since the war have cost the taxpayer so dearly. Change must come; change will come. We must face it clear-eyed, and we must implement it with conviction and with purpose, and meet its consequences with care and compassion.
5.25 p.m.
Lord Taylor of Gryfe: My Lords, it is a pleasure to congratulate the noble Lord, Lord Cayzer, on his maiden speech. I am sure that the House is indebted to him for bringing to our consideration of this problem of transport his wide knowledge and great experience particularly in shipping. The noble Lord will perhaps forgive me if I do not endorse some of the strictures and criticisms that were offered of the railway system. This is a matter to which I may perhaps return. I should like to apologise to the House. I put down my name for this debate assuming that there would be no major interruption in the course of this afternoon's proceedings. I must leave the House at 7.30. I sought an alternative speaker from these Benches at the last moment, but it was not possible. Perhaps the Minister and the House will accept my apology.
I welcome in the speeches so far delivered in this debate the balanced view and the consensus which seems to be emerging regarding a sensible and balanced transport policy. I think it is right, as the noble Lord, Lord Tordoff, has said, to approach this matter quite pragmatically. When we are assessing the claims on the nation's attention and on the nation's purse for the relative modes of transport, we ought to make comparisons which are reasonable and equal. For example, it is frequently said that road transport is so much cheaper than rail transport in handling freight. You must assess the costs which rail freight must carry in the cost of railway tracks and maintenance and all the other infrastructure of the railway system—the bridges and so on. Heavy lorries do not face the same kind of charges for their use of the main roads.
In comparing modes of transport, we ought to try to get a balanced view of the social costs of transport. I do not think that it would be right in developing a national strategy for transport to rely exclusively on economic factors, because we believe in a good society and in a civilised society which takes into account the environmental implications of any policy. Perhaps I may mention one or two of the environmental implications of road and rail transport—and I am not trying to take this debate down the line of road versus rail, but rather to establish the balance. If I may say so to the noble Lord, Lord Cayzer, who commented on the performance of British Rail, there is no railway in the world which is making a profit and every railway in the world is subsidised by the state and, as far as Europe is concerned, in the context
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of strict comparison, British Rail's subsidy is substantially less than that of any other railway system in the whole of the EEC. I think that that should be said. And I do not believe that the noble Lord, Lord Cayzer, would find many takers in the market for a private enterprise railway system.
My Lords, may I mention one or two environmental factors which ought to be taken into account? Intercity electric trains are around four times more energy-efficient than scheduled airliners and almost 50 per cent. more efficient than a well-loaded car cruising along a motorway. Electric trains are uniquely flexible in their use of primary energy sources. Commuter trains are up to 10 times more energy-efficient than commuting by car. When we see the long queues of cars running into London day in and day out; we should remember that we are using up the nation's resources. These are limited resources. So remember that commuter trains are up to 10 times more efficient than the car that is driven into London.
Studies undertaken have indicated that 4·5 million people were dissatisfied about noise from motorways and principal roads, and 3·4 million people were dissatisfied about aircraft noise, whereas only a very small percentage of people are disturbed by noise from the railway system. That is important. May I say this in relation to the economics of the railways in this country? Most countries have accepted the social obligations of a railway system, and most countries try to encourage the use of public transport. Anyone who visits the United States and sees the excessive demand on land resources—and we are a small island compared to the United States—of the great motorways, and the using up of fuel and energy by the excessive use of motor-cars, will accept that to allow our railway system to deteriorate would be a very serious matter for the future of this country.
If you discuss this matter with the average citizen in the United States he deplores the fact that public transport has been allowed to disappear in many areas. I believe that a sensible transport policy must provide a railway system network which is used by the public. If you allow purely economic terms to be considered in your transport policy, you will end up, as the noble Lord, Lord Underhill, indicated, with no rural transport whatsoever, because it is totally uneconomic to provide transport in areas of small population around the country. In addition, if you simply tailored your transport policy to economic terms, you would probably end up with no railway system.
It is interesting, when we are holding this debate today, that the Financial Times should publish an article which is headed: "Railways unveil plan to lure the French away from the motor-car". This article tells of substantial state investment in making the whole railway system much more attractive for the public, in brightening up the railway stations, putting in all kinds of investment which will ensure that railways will be efficiently run and well used.
By the same token, the French—with complete disregard, I suspect, for the PSBR or EFL—have laid down a completely new line between Paris and Lyon, and on that line put their showpiece of the high speed train, well ahead of our APT in this country. So the French experiment ought to be looked at. They are concentrating on a greater use of the railway system

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as an essential element in sound public transport policy.
What is wrong in this country? We shall not keep a railway system going without additional investment. May I give one or two figures in relation to the rolling stock of British Rail? No replacements are being built at the moment for the whole fleet of over 3,000 diesel multiple units which were built more than 20 years ago. The present rate of renewal for locomotives is under 20 new locomotives per annum to keep the railway system going, although the total requirement is over 1,000 locomotives. About half of the resignalling system is still controlled by mechanical signalling, most of which is over 60 years old.
The great age of railway development in this country was 100 years ago, more or less, which means that a good part of the railway infrastructure, including the bridges and track, are now substantially deteriorating and, in many cases, in danger of collapsing. If one is going to accept that a good and sound railway system is essential for a reasonably balanced transport system nationally, then we shall require to step up the investment, otherwise the whole railway system is crumbling before our eyes. It would be a national tragedy if this were permitted to continue.
Some people will say to me, "It is all right you calling for more investment in British Railways, but are British Railways efficient? Are they doing a good job?" The annual report of British Railways has just been published and is available in the Printed Paper Office. Despite the difficulties of the economic recession of last year, passenger receipts passed the billion mark for the first time in the history of railways in this country. The annual passenger volume was down only 3 per cent., despite the recession. Freight losses were halved. Considerable improvements in productivity were achieved. Transmark, which is the consultancy service for British Rail, is now being used in 27 countries. These are countries which have come to British Rail to invite them to provide their expertise in improving or building their railway systems. This indicates that British railways are not as bad as we all like to complain.
I welcome the Minister's statement recently that he was setting up a new review of railway objectives, that we should set the British Rail Board clear objectives for the commercial and socially necessary railway system and that we should establish a reasonable financial framework to encourage managerial efficiency in meeting these objectives. In the debate on nationalised industries quite recently in this House, I tried to make some comparison between how we run our nationalised industries and the private sector. It is this area of giving a board clear objectives of what it is to attain and making financial resources available to achieve those objectives that the main purpose of the Government should lie, and then let the board get on with it.
I very much welcome the suggestion by the Minister that this is going to be examined. I warn the Minister not to become too bogged down in the numerous controls and checks which are the plague of the nationalised industries. We are inclined to build upon our nationalised industries a great bureaucratic maze which makes decision-making and operations extremely difficult. I suggest to the Minister that, if he establishes
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these new objectives, he backs them with financial support.
May I also encourage him? We on these Benches believe in a mixed economy, and we have said that frequently. It might be possible to inject private capital into some parts of the railway system if it was felt that the financial requirements of British Rail were going to be constrained by the current EFL. There is no reason why the new railway line about to be set down between Victoria and Gatwick should not be financed from private sources with throughput agreements. We should consider that possibility. There is no reason why the level crossing investments, which would make a return in two or three years in terms of economic operation, should not be an object for private investment, provided one made a throughput agreement with British Rail. If it is possible, as in some countries, to finance a road system by a toll system which is privately run there is no reason why some of this philosophy should not be considered in relation to some operations of British Rail.
All I want to say is that there is a strong case for maintaining the railway system. I believe that, in the difficult conditions of today and under the constraints of the external finance limit, the British Rail Board is doing a good job, and I hope that it will command the Minister's support.
5.40 p.m.
Lord Orr-Ewing: My Lords, I should like to add my congratulations and gratitude to the noble Lord, Lord Lucas, for having initiated what I think is a very timely debate on road and rail. I should like particularly to congratulate my noble friend Lord Cayzer on his maiden speech. In this House we are unique in having experts on so many subjects, better-informed people with up-to-date knowledge and personal experience sometimes going back over a lifetime, as he has in the shipping world. I think we all appreciated what he said about the need for flexibility and the flexibility which his company has achieved in totally reorienting the whole product and changing the direction of the company. I think we all have to rethink this, not only in our businesses but in connection with such things as roads and railways.
This debate has been timely, apart from the over-riding interest of the Falkland Islands which must demand much of our time and much of our thought, in that only last week British Rail published their annual report, so that there has been the opportunity over the weekend to study the report. I also think it is an important subject to so many households, as my noble friend said in introducing the debate. Looking at household expenditure, it is quite staggering to see that, apart from rent and food, transport is the biggest expenditure for all the households in this country. So transport and its cheapness is of paramount importance.
I think it is also important that we should set time aside to discuss the biggest user of Government grants. The Government's expenditure Blue Paper sets out all these grants and gives the total expenditure for the current year, which will be £2·7 billion—and this all comes from the taxpayers—of which £950 million will go to British Rail. I know that a good proportion goes into what British Rail call "social railways" and perhaps we ought to be considering whether this is

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money well spent or whether there are other ways of running our rural railways more efficiently and providing the service which is needed.
Also we can reflect on the fact that an additional £250 million of grant goes to London Transport and is paid for to some extent by the ratepayers. In London the GLC have actually increased their precept—and many of us will be voting on this tomorrow—by 90 per cent. Had they gone ahead with their schemes, the precept might have been increased not by 90 per cent. but by 1,000 per cent. and the ratepayers would have been very sore if that had happened; so we have to thank the House of Lords judges for their ruling in that case.
What is also a very important part of British Rail is the commuter traffic. Anyone who has struggled to get to their work punctually knows the conditions under which the commuters have to travel. It is a vitally important part of British Rail. In fact, without British Rail the centres of our cities would decay faster and more disastrously then they are doing now. I read recently that, partly because of the high fares and partly because of high rates, many industrial companies are moving their head offices out of London. It is sad to see British Steel, International Harvester, Blue Circle Cement, Unilever, Tube Investments, W. H. Smith, GKN and many, many others—big, important international companies—all moving out because of the costs of keeping their headquarters in London; and that must affect jobs.
British Rail have been very helpful in providing data, and I should like to express my gratitude to them. It is interesting to see in the 1981 figures for London just how many people commute daily between 7 a.m. and 10 a.m.—the peak period. In rounded figures, 400,000 travel by British Rail, 350,000 travel by Underground, and about 100,000 travel by bus to work, while 175,000 travel by car and 17,000 travel by motor-bike, and they generally jump the queues. I believe only 9,000 travel by cycle. Curiously enough, there has been a 50 per cent. increase in bicycles in the last five years, because they get through the traffic. From these figures it would appear that British Rail has not changed much in the last six years. The number travelling by Underground has gone up by 12 per cent. since 1976 and the figure for buses has gone down from 150,000 every day to 100,000. That is a remarkable 30 per cent. cut in bus travellers.
But it is British Rail who carry the bulk of travellers and it is very important, therefore, that they should be efficient and well supported. The commuter services must continue, otherwise we should have a tragic depopulation of all our cities and thereby of the services which our cities provide to the nation.
A good comment has already been made about inter-city services. I think there are the best of British Rail: they have modernised. The Mark III carriages are quiet, comfortable, air-conditioned and very pleasant to travel in. One of the great glories is that you can get away from the telephone, so you can work if you have a mind to, or you can sleep if you want to do that. Certainly I think our BR inter-city services are remarkably good and I only wish that other services in certain ways could match them.
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One can criticise state monoploies but there is a very difficult way of measuring their efficiency. I give full marks to British Rail in that they initiated with Leeds University a study of the comparative efficiency of 10 European railways. I only wish that the figures were a little more up to date. The latest actually relate to 1977 and were published in 1981. When I pressed them for reasons why they did not publish more up-to-date figures they told me that they were under some pressure from their European colleagues because British Rail show up so well in this comparison with their rivals on the Continent that their fellow railwaymen there are not too anxious to give up-to-date figures which might show them in an unfavourable light.
Of course, there are good and bad things about British Rail in this comparison. As between firms, I always find that comparative figures are very helpful. I know that no one set of figures is perfect because you are not always comparing like with like; but if you are at the bottom of every league then something is wrong with your organisation. Here there are strengths and there are weaknesses, and I should just like to draw attention to some of them. First, our fares are far and away the highest in Europe; they are twice or more than twice the fares in Italy, France, Belgium and Finland. Surely British Rail have something to learn here.
Sweden gave an example by a very low fixed fare, and they have enormously increased their passenger traffic. British Rail tried an experiment—I believe it was one pound to go anywhere on one occasion last year—and there was a surge of traffic. Surely, when you have standing overheads which are very high, you should do everything conceivable to attract more passengers and spread those overheads over a greater number, get the fares down and get more people back on to the railways.
Secondly, I have to say that the manpower inflexibility of British Rail is a disadvantage in connection with productivity. This problem particularly effects ASLEF and flexible rostering. At the moment the tribunal of the noble Lord, Lord McCarthy, is sitting, and we are always being told that his report will be coming next week. I am sure that he is being very conscientious, but I can only say that, compared with other nations, we do not have flexibility of manning. Wherever one goes on the Continent, there is seven-day railway working. You do not see only one-third of the trains on Sundays and half the trains on Saturdays. It is the same format. I find myself wondering what makes our Post Office and British Rail believe that fewer people want to use their services at weekends. If the question was ever fairly put, you would find that more people wanted to travel at weekends. They then have time off and want to visit relations, and a lot of traffic could be attracted with more flexible working.
I have to say to the noble Lord. Lord McCarthy—I am sorry that he is not here at the moment, but perhaps one of his colleagues would agree with this—that he is so deeply ingrained, in all our beliefs, as being connected with trade unions, that it must be very difficult for him to sit in objective judgment on this aspect of the railways. We believe, rightly or wrongly, that he was the architect of much of the legislation when Mr. Foot was Minister of Employment. We have also seen him on the Front

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Bench very ably conducting debates on all the legislation which has come on trade union matters.
However objective he is—and I am sure that he will do his best—can the outside world really believe that, after eight years as chairman of the railway arbitration tribunal, he is the best man to give an objective and neutral judgment? I know that he has been elected back into office for two-year periods over a span of eight years, but perhaps he will reflect before he accepts for another two years. He is elected by the trade unions and by the management—incidentally, the taxpayers do not have a say in it—and he is doing it for very modest pay, which is not motivating. But I just wonder if he would like to think about whether he can be considered as objective as he should be on this great issue, which is so important to the future of British Rail.
I should have liked to say something about the service which we have to enjoy on British Rail. We all have stories about the buffet car not being there or, if it is there, not being manned, or about the restaurant car not being there or, if it is there, not being manned. I remember vividly one experience concerning a number of parliamentarians and how they were looked after by Swiss Railways when they had a crisis. After ski-ing against our parliamentary colleagues in Switzerland, we were going down on the branch line from Davos to Landquart where we were to catch the main line train. A poor child slipped under the engine and a leg was crushed, so the train stopped and they sent for hydraulic jacks to lift it up.
Along came the guard and asked whether anyone was trying to connect with an aeroplane. He collected the numbers, made a telephone call and got several taxis up to the nearest road. He then telephoned down, stopped the main line train and, after a wait of half an hour, we were pushed into taxis, taken down to the main line train, on to Zurich airport and back to London. I wonder how many people would have taken that trouble and given that service on British Rail. It is the small things that one remembers and I hope that the good in British Rail will spread more widely in providing a smaller and better service. There are other points to be made from these international comparative figures.
The Government have shown by their large financial grants that they believe in the future of British Rail to generate half their current investment needs, but that is not enough. They are the lowest investors of all European railways. What is sad is that they are not generating enough money to do their research and development. With a turnover of £2,000 million, they are devoting only £13 million to future research and development and that is almost farcical. You cannot keep up with the world and with the competition from road, coach and car if you are not investing more than that in future generations of technology and equipment.
They need to attract more customers, and I believe that they can do that with lower fares. As the noble Lord, Lord Underhill, said, if they are to genreate more cash, everything depends upon getting better industrial relations. I hope that when this furore about flexible rostering is over, they will set their minds to improving industrial relations so that they can provide more efficient railways, a better service, better
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punctuality and a better future, with adequate investment in research and development.
5.55 p.m.
Lord Ferrier: My Lords, before I turn to my prepared speech, I am tempted by something which was said by my noble friend Lord Orr-Ewing and the noble Lord, Lord Taylor of Gryfe, about the cost of rail travel to commuters. My noble friend said that the commuter services are absolutely essential and are part of our way of life, certainly in the metropolitan areas. The noble Lord, Lord Taylor of Gryfe, said that motoring is more expensive than the train. I have occasion, when I fly down from Scotland, to come into London at the middle of the day and I see line upon line of expensive railway rolling stock lying idle from 10 o'clock till 4 o'clock. I should like to know—we can talk about it afterwards, and perhaps there is something in British Rail's figures—whether, although they say that the Highland lines are very expensive, they are anything like as expensive as the commuter lines in London. I want to know whether that factor of capital lying idle has been taken into account in some of these figures.
I shall not say anything more about the railways, because I know that my noble friend Lady Elliot will he devoting most of her speech to them. She knows a great deal about the subject and, like myself, travels a lot by train. So I want, first, to thank my noble friend Lord Lucas for tabling this Motion. It is just as well to rememebr that, over the years, this House has made a tremendous contribution to solving the problems of transport, particularly road transport, in every respect—not only road construction and the like, but also road safety. Looking back over the many years that I have been at it, I have always been associated with the noble Lord, Lord Lucas, and with his father before him, on the same sort of line.
I have a vivid recollection of the late Lord Stonham and of the efforts he made in the middle sixties to develop a fully integrated transport system, such as my noble friend Lord Lucas and the noble Lord, Lord Underhill, have spoken about. We have been at it for years and years, but nothing has really happened. The noble Lord, Lord Underhill, asked whether we can start. We must address ourselves to problems such as the one at Didcot, where rail and road container traffic was to be concentrated. It would have been a marvellous contribution to an integrated system, but the grass is growing up through the sidings because of what the noble Lord, Lord Underhill, spoke of—the failure of industrial relations.
I wonder whether people realise how disheartened many of us are about the question of trade union leadership. Transport has recently been dislocated by the action of ASLEF and a dock strike is on the horizon, as my noble friend Lord Cayzer said. The wording of the Motion narrows down what we can discuss, because my noble friend has concentrated on the economic and social problems rather than on the wider aspects of the whole transport system.
I feel that the problem of trade union power affects the country's economy. The facts are that railway strikes, dock strikes, blacking and the like bear heavily upon the country's economy. I well remember that

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when the noble Lord, Lord Scanlon, spoke on 12th November he said that there is much wrong with the trade union movement. He went on to say that it is time we all co-operated on this issue and gave the TUC the assistance it needs in bringing about new arrangements. It is very interesting that on that occasion this was the motto on both sides of the House.
I am sorry that my noble friend's Motion says nothing about water transport so far as freight is concerned. My noble friend Lord Cayzer—whom congratulate on his maiden speech—spoke about the sea, but he did not mention inland water transport. I shall not say much about water transport because I. see that the noble Viscount, Lord St. Davids, is to speak in this debate. I know I can rely upon him absolutely to let fly on the subject of water transport. He is concerned in particular with internal transport. I am also concerned about the problems of the Highlands and Islands, the ferries and the piers.
The noble Lord, Lord Underhill, said that the railways are not important in terms of the urban areas and concentrations of population. However, we must remember—I am sure that my noble friend Lady Elliot of Harwood will bring out this point—that it is all very well talking about going by car if you are travelling 20 miles, but it is no fun if you have to do 400. And some of us do 400 miles twice a week. In many respects, therefore, the railways are essential to a great number of people, particularly in the rural areas. The noble Lord, Lord Underhill, pleaded for a long-term view of the railways. He said that what we need now is action. Let us hope that we shall soon have it.
With regard to water transport—I shall risk treading on the toes of the noble Viscount, Lord St. Davids—we must remember that, because of the trade unions, it is quite impossible in this country, under the present system, to make use of the barge-carrying ship. To my mind, the barge-carrying ship is the answer to the Channel tunnel. I am against the Channel tunnel for various reasons. The main reason is that it is not sufficiently flexible. Our flexibility in crossing the North Sea and the Channel is greatly interfered with because we have been unable to develop the barge-carrying ship. The Russians have such ships which are driven by atomic power. This is because the dockers here will not handle barges which are to he put into barge-carrying ships. A potential contribution to our transport system has therefore been frustrated by the unions.
It is a pity that our debate is under a certain amount of pressure after the more important discussions about the Falkland Islands. However, so far as labour relations are concerned, I for one—and I think others—look forward to the forthcoming legislative proposals with the greatest of interest. Something must be done to prevent our economy from being interfered with by bad industrial relations.
Your Lordships will know, from experience of my habits, that I cannot be expected to sit down without talking about by-passes. I have in mind, of course, the by-pass round Edinburgh. However, by-passes in general have been mentioned today by several speakers, and they have been referred to in the Armitage Report. One or two points about by-passes
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have not been made in that report. There is an economic aspect to by-passes: that they should be designed to provide places for the proper security and rest of vehicles and their drivers at suitable, well chosen intervals, not only so that loads are secure and the drivers able to get nourishment and rest but also so that provision can be made for the breaking down of loads in order to keep the heaviest of the transport trucks off city streets.
One association said to me that the one thing which we must insist on in relation to the larger, heavier vehicles is that they are not introduced until the by-passes are finished. That is easy enough to say. But there is an economic point about by-passes which merges into the social side, and it is this. The experience, certainly in Edinburgh, has been that fiddling about and indecision about a by-pass has led to the greatest delay in internal planning. It seems to me that it would be good for us to say today, as the White Paper indicates that 13 by-passes should be built in order to save historic cities, that they should be built quickly, because if they are not built and if traffic does not know where access is going to be, local authorities (Lord Tordoff said that it is very important that local authorities should be given ample opportunity to take part in the discussion of transport problems) will be unable to plan their internal transport.
What is more, if they fiddle about over it they will get, as happened in Edinburgh, large areas of planning blight, because people will say, "You must not build here" or, "You must not build there; there may be a road". It is an economic item of the utmost importance that if there is to be a by-pass it should be built as soon as possible. I sincerely hope that the Government (by the Government I include the Secretary of State for Scotland, because when I asked the noble Lord, Lord Bellwin, whether the outlook with regard to by-passes applied to Scotland he replied that he thought that it did) will put capital into roads, for this seems to me to be the best means by which to start the upward surge for which we all wait and hope.
I cut a letter out of the Scotsman the other day. It is from a person who lives in Dundee. He said:
"On leaving Ipswich I stoked my elderly and battered Peugeot up to 60 mph and, with the exception of replenishment stops for car and crew, held it at that speed, by-passing Bury St. Edmunds, Newmarket, Cambridge, Huntingdon, Stamford, Grantham, Newark-on-Trent, Doncaster, Wetherby, Darlington, Durham, Newcastle and Morpeth…".
And then he came to Edinburgh, where there was no by-pass. This is a matter of interest. It is a real problem, in particular for air travellers. It would be of great benefit to air travellers if it were not such a problem to get there from the East and the South of Scotland. As I am sure my noble friend Lady Elliot of Harwood will tell the House, you cannot do it. This is one of the social consequences. I appeal to the Government to do what they can to help the Lothian Region, no matter how much they hate them, to get on with it.
I need not embellish or go over the obvious factors in favour of by-passes generally, which are set out in paragraphs 206 and 207 of the Armitage Report. However, there is one point which the report does not mention and that is the one about delay which I have

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touched upon; delay is going to be expensive if one is going to build a by-pass at all.
From that flows another point which has not been touched upon, nor is likely to be. It is that the absence of a by-pass means that a lot of traffic—particularly commuter traffic—goes dodging about the backstreets in trying to overtake traffic jams. This is a serious matter in many ways. In the good old days the streets were places where children could play. The driver of a hired-car of mine said to me the other day, "When I was a boy I played football in the street, but my kiddies cannot do that now". Of course, there are areas where sensible local authorities have closed streets where children can play for a certain number of hours each day.
We had a debate in this House the other day about road humps. This is a matter which concerns internal planning and transport. It relates to a point made by the noble Lord, Lord Underhill, when he talked about women with prams. I am vice-president of the Pedestrians' Association, and it is as well to remember that in terms of traffic congestion and its bearing on economic and social factors the pedestrian must be remembered. I am so glad that the noble Lord, Lord Underhill, mentioned cyclists. These people are users of transport. It is of social importance to them that they should get about.
On this question of making the streets better for children to play in, I was struck the other day, when we were discussing inner cities, that three Conservative Back-Benchers, without any collusion, all said in their speeches, that city centres should include accommodation for children to play. This is why I like the idea of encouraging the building of road humps or what are called "sleeping policemen". The question of road humps is not a simple one because there are problems in respect of ambulances and fire engines and the matter has to be thought out. In terms of women with prams they are a great help because they enable mothers with prams or carrycots in getting across streets, because road humps are brought close to the pavements. Let us remember that the pedestrian has a rightful place for consideration when it comes to traffic congestion. As to the railways' contribution, I begrudge the expense of the APT (but this has been touched upon by others) because I believe that more money could be spent on renewing the existing rolling stock. Again, I wish to thank the noble Lord for promoting this debate and I look forward to hearing the Minister's reply.
6.14 p.m.
Viscount Sidmouth: My Lords, in rising to speak tonight I should declare an interest in that I am president of the National Council of Inland Transport. It might be worth mentioning in view of what was said earlier by the noble Lord, Lord Tordoff, that a great number of local authorities, in both England and Scotland, are corporate members of that body. I can confirm that their views on transport are of very great interest.
The council concerns itself with all modes of inland transport and recognises the importance of each. Nonetheless—and I see one of my predecessors, the noble Lord, Lord Gainford, in the House tonight—it came into being in 1962, in what might be called the Beeching/Marples era, when the railways first came
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under concerted attack. At that time the "Beeching axe" reduced the railway network from about 20,000 route miles to 14,000 route miles. The figure has since stabilised at about 12,000 route miles. The railways have more or less managed to retain their share of passenger traffic—which was not very high even then—because of their commitment to commuter travel and the success of Inter-City. But by 1980 British Railways carried only 10 per cent. of all freight traffic as measured in tonne miles. I make no excuse, therefore, for concentrating my short remarks on the railways situation only.
I believe there is ample evidence, and it has been acknowledged by several speakers tonight, that a significant contribution by rail is, and will be needed for preventing congestion on roads, reducing environmental damage, and making the most efficient use of energy in the future. Yet, as I see it, that future is under greater threat than it was even in 1962. Basically, this appears to be due to a loss of confidence by the Government—or, should I say, by the Treasury? Certainly, if British Rail are denied the opportunity to make appropriate investments, they will eventually wither on the vine. The British Rail Board itself has identified electrification as the investment priority. The situation there seems to be far from satisfactory.
Reference has already been made in previous debates to the joint Ministry of Transport/British Rail review of electrification carried out in 1981, which found that what was called "Option 5" of the electrification proposals offered a return on expenditure of 11 per cent., cash discounted. Although this inquiry was probably one of the most exhaustive and far reaching of its kind ever attempted, the board has been required to go over the ground once again and it is at present engaged in that exercise. I believe that the board's replies to the queries that have been raised will be ready by early next month.
I have no doubt at all that the board will be able to present a cogent case to the Government, with regard to both the viability of traffic prospects and the financial return expected. The latter should be well in excess of the 5 per cent. real rate of return specified in the 1978 White Paper on nationalised industries, and in excess of the 7 per cent. set by the Treasury for this particular project. British Rail—this is another of its conditions—is also well on course for shedding 38,300 jobs, which was the target set in its corporate plan 1981–85. So the trouble area for all parties concerned in this exercise comes down to a so-called political one, which is all about productivity. Speaking from these Benches, I do not regard this as a political issue and the only interest I will declare is an intense caring for the future of the industry.
It is worth referring again to the joint review carried out by British Railways some years ago in conjunction with Leeds University, which was an intensive comparative study of European rail performances, in which BR's operating, commercial and financial performance was compared with that of nine other European railway systems. I believe that the noble Lord, Lord Orr-Ewing, was somewhat surprised to find that many of the figures show BR to be extremely efficient as compared with the European performance, but I think that to anyone who is familiar with British Rail this is by no means surprising.

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All the more reason, therefore, to be concerned, and I think the British Rail Board were, at what appeared to be two outstanding points where our results did not square with those obtained abroad, with one exception to which I will return. The two points were that, so far as operating staff were concerned, it emerged that the average hours worked by BR staff were almost 25 per cent. higher than those of any other railway without equivalent higher levels of output per man. When it came to train crews, the finding was as follows:
"It is in the freight and parcels sector that the biggest differences arise. The performance of BR and FS (that is the Italian railways) is very much worse than any other railway, requiring more than twice as many staff to run a freight train as the more efficient railways".
So I think it is perfectly correct for British Rail to have picked that up—it was one of the outstanding points arising from the inquiry—to see what could be done to improve it.
To my mind—and I have had experience of operating road transport—there is considerable contrast here with lorry drivers. Let me say at once—and I have worked with them—that British rail drivers are probably the best trained and most efficient and reliable anywhere in the world. It is all the more surprising, therefore, that, as I understand it, these extremely good drivers spend only three and a half hours out of an eight-hour day driving a train. I was making the point about road transport, and after all this is where a lot of onetime railway freight has now gone and is carried. Anyone familiar with recent legislation on the subject of drivers' hours will know that on the grounds of safety the main thrust of the legislation has been concerned with preventing lorry drivers driving nine, 10 or even more hours per eight-hour day, if I may he forgiven an Irishism.
Therefore, I think that it is perfectly right to try to find ways of allowing British Railways drivers to exercise their skill for more of the time during the day. Naturally, I will not get on to the question of flexible rostering, which is under consideration by the noble Lord, Lord McCarthy, and we look forward to his report, I believe later this week. But the danger I see there is that, irrespective of what the hours prove to be, nothing will he settled because both sides are so entrenched in confrontation. It is absolutely vital that this long-standing controversy should be resolved, or the industry, while arguing fruitlessly about what are in many cases outmoded principles, may well end up emulating Sampson and bringing down the whole structure about its ears.
In the debate in this House on 21st April on efficiency in the public sector, the noble Lord, Lord Boyd-Carpenter, speaking, I am sure, from experience, said this:
"Let us analyse the basic problems of the nationalised industries. I think the first and most difficult problem that those who run them have to face is the knowledge—or the thought—on the part of their workforce that they cannot be bankrupt".—[Official Report], 21/4/82; Col. 563.]
I suggest that really one can go further than this, because, in so many of our declining but still vital industries, most of which are to be found in the public sector, one finds a form of conservatism—speaking of course with a small "c"—whereby all sides of the
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industry become locked into attitudes and practices which prevailed and were very successful in the days when they were at their peak but which are no longer relevant.
So I think that, faced with this problem, it is perhaps inevitable that the Government, particularly one holding the present political and economic convictions, should seek some other criteria in determining the level of support to be given to each sector of each industry, including wages and salaries. I believe that this is right and that the policy of strict cash limits has been successful in bringing some discipline to this difficult area. I would submit, however, that that policy applies in principle mainly to the current account, where it can be adjusted within reason from year to year to take account of need and the general economic position of the country, as it would be in private industry. But different criteria must surely apply to investment policy, especially in dealing with programmes which may take a decade to carry out and will affect the economy of the country well into the next century. To borrow money to balance current account may well be to mortgage the future of our grandchildren, but successful long-term investment in the infrastructure of the public sector would surely be to secure that future.
Before I sit down, I should like to mention the advanced passenger train, to which reference was made, I think possibly confusing it with the high-speed train. There is a useful comparison with the French experience with their TGV, in that they have got it into service very much more quickly, whereas the APT is still in great difficulties. I think there are two points to be made here, both financial. First of all, as the noble Lord, Lord Orr-Ewing, pointed out, the amount available to British Rail for research and development is absolutely ridiculous in relation to the size of the business. It looks as though this very clever and promising invention has run into the classic problem of not having enough funds to carry out the development part of the project, which often costs very much more than the initial research work on which it is based. The second point I want to make is that the French TVG is running on a special track, and therefore it is a perfectly conventional type of technology, an electric locomotive with carriages, such as the Japanese introduced about 20 or 25 years ago with their bullet trains. Therefore, the whole thing comes down not to a great French triumph of technology, but simply to the fact that their Government have more faith in their railways and were prepared to invest more in them than ours were.
Baroness Phillips: My Lords, before the noble Viscount sits down, he appears to be extremely knowledgeable; as a great commuter and customer of British Rail, can he explain why they found it necessary to invest in pulling down a perfectly good station at Victoria when they cannot find the money to invest in research?
Viscount Sidmouth: My Lords, I am very sorry; I should be very glad to oblige the noble Baroness, but I do not think I can answer that one without notice.
6.29 p.m.
Lord Teviot: My Lords, I must thank my noble friend for putting down this very important Motion, and also for wording it in such a constructive way, so that one knows precisely what one is debating. Also, I would like to join with other noble Lords in congratulating the noble Lord who made his maiden speech; he gave us a very clear, interesting speech, and we hope he will speak again soon.
My Lords, as I think your Lordships would expect, my own brief intervention will be concerned mainly with the carriage of persons by public transport. Above all, it should give us the opportunity to discuss the problem with a fresh look and to adopt, as has been done this afternoon, an entirely apolitical approach. This is helped by the fact that in the past few weeks there have been valuable reports on public transport by the National Consumer Council and the National Consumer Council for Wales. The NCC has identified the consumer's problems under three headings: the cost of services; their availability and frequency; and their quality. The latter points come back, in a high degree, to reliability, and that reflects the theme of the Motion, because in urban areas the major stumbling block to maintaining timetables is traffic congestion. At this stage I shall leave what I had planned to say because it has been covered by the opening speakers. Nevertheless, there is still a great deal for all of us to talk about and, therefore, your Lordships will forgive me if I speak from a few notes.
The first matter that I should like to deal with is cost of services, their availability and frequency and their quality. Indeed, this is very much the theme of everybody's speech. There is a great advantage if people travel by public transport. My noble friend and others mentioned that only half the population have driving licences and a high proportion of people do not have regular access to motor-cars. That is fine. However, even half that population in their motor-cars can cause appalling congestion compared to the great number of people who are carried by public transport, either by road or by rail. Also, on the question of cost, travelling by public transport is not as flexible or as personal as driving about in one's own car. Nevertheless, it is easier—one can read one's newspaper and so on—and as a free nation I think that everyone likes to do his or her own thing. Therefore, cost is very important. Unfortunately, successive Governments have always increased fares, and every time fares have gone up—and they have gone up even ahead of inflation—the number of people travelling has fallen and, therefore, the availability of services, their frequency and their quality have also fallen. So all these matters are very much interrelated and they show the importance of subsidies.
I noticed that in my noble friend's speech mention was made of the cost to the ratepayers. Be that as it may, I think that in order to maintain a good public transport system subsidies are important as regards the wider issues. I shall not go into the "whys" and "wherefores" of London Transport. But I do think that lessons should be learnt, and figures should be studied very carefully of people travelling in the Great Wen between October and March, and whether the traffic flowed easier, whether more people were travelling and so on. As I have said, we are being apolitical.
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Unfortunately, when the GLC presented this to us—in my view, if I am allowed to be political, it was very clumsily done—I think that quite rightly the people of Bromley who were not affected but who still had to pay high British Rail fares, had every ground to complain. In the end, there should be many lessons to be learnt from London and other cities—indeed from everywhere. If we are to benefit from low cost transport, let us study the matter. I believe that such studies are carried out in many countries. Another point to mention is that within the Common Market countries only ourselves and Greece show a declining number of people travelling by public transport. This is a pity.
Mention has been made of costs, and that affects availability of routes. As regards the railways, we have more or less the same number of routes. The railways have done great things to persuade people to travel on trains, by their "bargain breaks", family rail cards and so on. Whether their costing is warranted, one does not know. However, they have conducted a fairly aggressive marketing policy for people to travel on trains and I think that people are doing so. That could also apply to express coaches.
It has also been mentioned that since the 1980 Act there has been a great increase in the number of people travelling by coach. There has been more flexibility, which is absolutely splendid. Travel by coach is generally for long distances, and quite often for social needs and not for basic essential needs. As a result, I do not think that the stage carriage has benefited at all. What we are really talking about are the essential needs of transport—people going to work, people going to shop, people going out in the evening; and another aspect which I do not think has been mentioned this afternoon is that of safety against road accidents. Many road accidents are, I believe the term is, "drink related", resulting from people going to parties and so on. If the possibility of not necessarily hiring a huge coach but, for example, a minibus, were explored even further and encouraged, and people could get together and hire such transport and have a jolly good evening out yet not needing to worry about accident, it would be a great advantage.
Another matter that I should like to mention as regards cost is the one-man operation. It might he cost effective but it quite often deters people from travelling if they have to sit on a bus while the poor driver collects the fares from everybody boarding it. It is all right if there is one fare covering all journeys, or a coin in the slot would be quicker. But if there is a fare stage structure, it takes hours, and it is frustrating for the motorist and causes congestion. It might be economical and I am sure that in rural areas it can work very well and be an advantage. However, it can be a disadvantage in cities, and that is something that we need to consider.
I shall not go on for very much longer. I think that perhaps I may not have covered the quality of service. I think that there is some comfort to be drawn here, and I suppose that in some ways we are getting better at it. Long distance trains are being made more comfortable. One would like to see them cleaner, but quite often, public habit influences that aspect. It is quite interesting to find that, if one travels on certain suburban trains in certain areas, the standard

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of graffiti differs. It is very difficult for operators always to keep buses clean.
Mention has been made of investment. Noble Lords have talked with great authority and from prepared speeches on investment. I should like to concentrate entirely:on public road transport and the maintenance of vehicles. This has very much declined. When I was in the industry some 15 to 20 years ago, one had the advantage when one drove one's bus on to the pump at night, that one could submit a defect card and there would be people who would be able to give you more clutch stop, more on the brakes or generally maintain the vehicle. Unfortunately, this service has somewhat declined. Also, pits for renovating buses were designed for forward engines or under-floor engines. Now buses have engines at the rear and so these pits are largely obsolete. One should like to see some emphasis put on that matter.
I could mention many other things. We have the Transport Bill before us and we shall go into the question of buses again. Anyway, this has been a most interesting debate. I again thank my noble friend for initiating it and I await with interest to hear my noble friend who is to reply.
6.40 p.m.
Baroness Macleod of Borve: My Lords, like other noble Lords, I am very grateful to my noble friend Lord Lucas of Chilworth for initiating this debate this evening; and congratulate the noble Lord, Lord Cayzer, on his expert maiden speech. The debate has been wide-ranging, and indeed noble Lords who have already spoken have covered practically all the points upon which initially I had thought of speaking. So I shall concentrate tonight on only two small aspects. We have heard of the M roads, the big roads, the rails and the autobahns. I do not think your Lordships will mind if I lead you down a little country lane.
The various systems of inland transport have already been discussed. But people have to use those systems, and it is the people about whom I want to speak briefly this evening. I have been a car driver since I was 17 years old—a long time ago. Being disabled, I cannot use the buses, so I cannot travel on the transport referred to by my noble friend Lord Teviot. However, I know a certain amount about motor-cycles and cyclists. So it is a form of two-wheeled transport about which I wish to say a very few words this evening.
The noble Lord, Lord Underhill, and indeed my noble friend Lord Orr-Ewing spoke about pedal cycles, but motor-cyclists and the safety of motor-cyclists on our roads today are what have concerned me for a very long time. Today I have had the opportunity of finding out the latest figures of those killed on our roads using the two forms of two-wheeled transport and those who have been seriously injured. I am pleased to say that from the figures I have received it seems that in 1981 fewer people riding motor-cycles were killed—though only marginally fewer—than in 1980. The total in 1980 was 1,163, whereas in 1981—the last figures available—in the first quarter 205 were killed, in the second quarter 296, and in the third quarter 356, and in that quarter there was a drop of 7 per cent. However, the seriously injured in those quarters amounted to 3,378
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in the first quarter, 5,567 in the second quarter and 6,679 in the third quarter, which was up by 5 per cent.
It seems to me that cyclists—perhaps the old-fashioned variety of non-mechanised transport—must be taken into our considerations when we are talking about the users of our roads. In 1980 302 were killed, but in the first quarter of 1981 54 were killed, in the second quarter 89, and in the third quarter 85, and 3,005 were seriously injured during the first three quarters of 1981. I believe that we must do something for these people, who are mostly young.
Safety seems to me to be part of training. During one of our recent debates the Minister said—and it is, indeed, in an Act—that motor-cyclists shall receive two-part training. I am very sorry to have discovered that, whereas when we discussed this Bill it was thought that the RAC and the ACU would undertake the two-part training of our motor-cyclists, unfortunately—it is a voluntary scheme—the people involved are not now able to give the time that is necessary to fulfil their obligations under the new Act. Therefore, the RAC has had to give up its part of the training.
I should like to ask the Minister what will happen to this, to me, vitally important aspect of educating the young people in our country to use their motorcycles wisely and safely. I was also told when I raised the subject of good manners, which also seems to me to be part of safety, that there was no time to teach the young people anything except a rudimentary knowledge of the Highway Code and how to use their motorcycles on the roads. Therefore, good manners have been left out of the curriculum.
Conspicuity—a word which has been brought into our language recently when we have discussed the safety problems of these people—is also very essential, not only for motor-cycle users but also for the other two-wheeled riders of the pedal cycles. Those of us who drive, as I do, round London every day and in and out of London every day will have noticed that pedal cyclists come very fast from every angle and are almost impossible to see. I think that it is amazing that there are so few accidents, but to my mind every accident is very important, and when it leads to a death it is extremely important.
I am also informed that the state of our roads leads to a great many accidents for those people about whom I am talking because, as most of us know, the local authorities do not maintain the roads to the standards that we would like to see. There are potholes and pitfalls in the roads—and I do not include the humps on which my noble friend is so keen, and on which I am not. Motor-cyclists come along and go into the great holes and fall off their machines; they are run over by a car and killed. That is my information, which I have gleaned from several hours' work, but it is also my view that far more should be done for these two-wheeled people who use our roads.
In conclusion—and I promised that I would be the shortest speaker—I should like to pay one very quick tribute to Motorail. I prefer not to travel by rail for all sorts of reasons—the platforms are too long for me —but when I take my car to Scotland, as I try to do every year—Motorail is excessively helpful in getting me and my car on the train and getting us off. So I should like to pay a small tribute to Motorail. I am

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also very grateful to my noble friend for initiating this debate.
Lord Ferrier: My Lords, before my noble friend sits down, is there not a new regulation that motor-cycle learners shall not ride machines of greater horsepower than 2½?
Broness Macleod of Borve: My Lords, yes, that is true.
6.50 p.m.
The Countess of Loudoun: My Lords, like my noble kinsman Lord St. Davids, I should like to say a few words about water transport. In the United Kingdom the various modes of inland transport—road, rail, waterway and pipeline—have developed separately. Waterway transport was the first method of moving goods on a large scale, but, with the advent of rail and good roads, little further investment was made in waterways to enable them to compete. As a result, the potential of waterway transport has been virtually ignored. The past few years have shown a welcome change of approach by Government. In 1978 the first major improvement to a waterway for freight transport purposes since 1905 was authorised. The scheme for the Sheffield and South Yorkshire Navigation is due for completion early in 1983 and will facilitate the passage of craft to Rotherham in the heart of the South Yorkshire industrial conurbation.
Another welcome development is the provision under Section 36 of the Transport Act 1981 for grants to the private sector towards the cost of waterway infrastructure projects which will result, we hope, in a reduction of traffic on roads, thus easing the congestion on these roads and in the cities, albeit in a very small way. Nevertheless, there is still a need to rectify the imbalance in investment criteria for the various transport modes. Unlike the roads, improvements to a waterway for freight transport purposes carry a heavy financial burden in interest charges for which the customer has to pay. Competition between transport modes should be based on rules which are clearly equitable and fair.
Now why am I in favour of the greater use of water transport. What arc some of the benefits, as I see them? The introduction of push tow techniques has reinforced the fact that waterway transport is cost-effective. Operating costs per ton are low, and the serviceable life of a barge is 25 to 30 years—much in excess of that of a road vehicle. Studies carried out in Europe, the United States of America, and the United Kingdom have shown that water transport is more energy efficient than rail and, on average, between four and five-times more so than road transport.
Waterways are friendly to the environment. There is little noise, vibration, pollution or visual intrusion—all matters on the credit side. Waterways are already used extensively for the removal of household waste and sewage and industrial sludges. They are also eminently suitable for the movement of hazardous and dangerous goods. Substantial quantities of petroleum products, caustic soda, sulphuric acid and chlorine are already moved by inland waterways. There has been growing public concern over the danger of transporting such goods by road. The inherent safety of
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water transport makes it ideal for the movement of substances with explosive, radioactive, toxic, corrosive, and inflammable properties.
Other opportunities for water transport arise in the movement of heavy lifts. In 1981 a large water processing unit was moved by water from Gloucester to Avonmouth for export to Abu Dhabi. The movement of such loads by rail can present problems because of loading gauge restrictions, and transport by road involves disruption of traffic and the risk of damage to bridges. There is increasing evidence of opportunities for growth in the commercial waterways with regard to the carriage of freight, but the co-operation of the local authorities concerned must be secured to provide suitable industry alongside the waterways.
Inland waterway transport in the United Kingdom appears to have reached a turning point. The decline in tonnages moved in recent years has been arrested. With a fairer distribution of transport resources, and bearing in mind the changing traffic patterns and present-day needs, the commercial waterways can play a bigger part in the transport needs of the United Kingdom.
6.54 p.m.
Baroness Elliot of Harwood: My Lords, we have heard most interesting speeches and we are indebted to the noble Lord, Lord Lucas, for having introduced this debate. It shows also how much agreement there is in your Lordships' House on a subject of this kind. I have listened to all the speeches and I have agreed with everything that the noble Lord, Lord Underhill, had to say, and I admired the way he put it; I have agreed with everything that the noble Lord, Lord Taylor, said, he having had great experience on the board of a Scottish railway; and I have also agreed with many other people. I was interested in Lady Loudoun's description of waterways, of which I am afraid I know absolutely nothing but which I am quite sure are very important.
I should like to join those who are supporters of, and users of, the railways. I am a great supporter of the railways, and always have been, for several reasons. First, the railways are a much safer way of travelling than any other. Accidents on railways arc far fewer than accidents on the roads. For the travelling public —and I am one of them—rail travel is far less tiring than driving either on roads or motorways, though one has to drive a certain amount on the roads, of course. Distances are more quickly covered. The night sleepers, which I use twice a week, save hours of time. You arrive in the morning at breakfast time and you have the whole day for your work, and it is a good method of saving time.
The more traffic increases on the roads, the more vast sums have to be spent on motorways and paid for by the taxpayers. The noble Lord, Lord Taylor, pointed out that much of the debt which appears on the railways appears because they have to pay for their track and for their expenses, whereas the roads are in a more fortunate position. It all comes back to us in the end, but the fact is that roads have more public money. For British Rail there is every advantage. Long distances can be covered faster every year and in great comfort, and commuters, who only use the

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railways for short distances, get up and down into the big cities far more easily by rail than by road.
I hope your Lordships will read the annual report of British Rail. It is a fascinating document, and it puts the case for the railways very succinctly. Passenger receipts have passed the billion mark in this new report. The volume of passenger traffic alone is 8 per cent. up in the last five years. Freight losses have halved due to improved productivity, and I believe that that could be increased if more freight went on the railways, excluding of course perishable goods, for which lorry traffic is much more convenient and better.
Freight traffic is increasing all the time. Ninety per cent of all the passenger trains arrive within five minutes of scheduled time. I think it was said by the noble Lord, Lord Orr-Ewing, that international comparison shows that British Rail is the most cost-effective railway in the world. What is it, then, that we need to improve our railway system? It is quite simple. We must provide more capital for investment. In a policy document published in 1981, British Rail put forward excellent plans to replace the worn out rolling stock, to electrify the railways, and the diesel engines, and to try to improve the railway equipment which is extremely old. I think again it was the noble Lord, Lord Taylor, who said that the diesel engines are between 20 and 30 years old, and new rolling stock is badly needed. Travelling, as I do, twice a week to Scotland and back, I realise how old the rolling stock is. I have been sleeping in the same berths since the war. Renewal is vital if the whole thing is not to come to a stop.
Most important of all, as the noble Lord, Lord Underhill, said, is to electrify the railways. Not only is it absolutely vital, but it has every advantage, including speed, economy in running costs, comfort and savings in oil. The Government are committed to a 10-year plan, and that is the basis of the future economy of the railway business. One of our great companies, Balfour Beatty, have new contracts to electrify lines in the United Kingdom—some of them have been mentioned, including Manchester, Liverpool and London—and they have contracts for India and elsewhere. Unless electrification goes on in the United Kingdom, their field team of skilled men will be reduced, as I learnt from attending a meeting called by the noble Viscount, Lord Sidmouth, to discuss the railways. That company had a skilled team of 252 men, but in August 1981 the number was reduced to 190 and, if any scheme is halted, the team will be further reduced to 52 and then to 35, all because of the slowdown in the rate of electrification. Unless electrification goes ahead, skilled teams like that will come to and end, and that will mean an enormous increase in expenditure when electrification takes place, by which time the teams will have been disbanded. To allow that to happen would be a false economy because it must mean increased expenditure when it is finally done, and at the same time our railways will be falling behind those of other countries.
At that meeting, a member of the European Parliament said that European countries invested more in their railways than we did. For example, in France, new investment worth £830 million had gained 40 per cent. new passengers and was already earning 20 per cent.
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more in returns. Countries in Europe generally have flexible rostering. Though it is a controversial subject, it is standard practice in Europe. What we need is a definite commitment by the Government to long-term investment without interruption. Skilled teams must be kept together because that way the work is done more quickly and economically.
I congratulate British Rail on the many new ways they are helping their customers, including the rail card for disabled people, the old age pension card, which I use continually, and the £2 ticket for a month's travel. All those items encourage people to travel by train. In addition, I can say from long experience that BR are to be congratulated on the efficient and courteous way in which the staff serve their customers.
In the current annual report, Sir Peter Parker defines the objects of British Rail now as, first, to modernise the services; secondly, to give better value for money; and, thirdly, to be a competing railway. BR must compete efficiently with their existing assets, which are many. Investment in capital equipment will give a valuable return to the nation and of course to the customers who use the railways. Competing through efficient, new-style management and attracting new customers is another of Sir Peter Parker's definitions for the future.
In the policy document to which I referred, all the plans point to 1983 being a crucial year. Unless we are then replacing worn-out engines, rolling stock and other vital equipment, the railways will be beyond repair. If we do not do what is recommended in that report, endless closures will take place. Already in some areas there are no railways. I live in such an area. If you want to get to a train you must drive 50 miles, making 100 miles for the return journey to the station. There are threats to North Scotland's railways—north of Aberdeen, possibly up to Inverness —people cannot afford to fly (it is three times as expensive as travelling by rail) and cars and petrol are much more expensive than the railways, and of course call for more roads.
Now is our chance to modernise and electrify, and that is vital. The trade unions know it, for their interest is the same as ours, and the management and customers hope very much that the co-operation which we all want to see between unions, management and customers will now really take place. I appeal to them all to help in every way so that the whole nation may benefit.
7.6 p.m.
Viscount St. Davids: My Lords, I thank the noble Lord, Lord Lucas, for initiating this debate and for asking me to speak in it about waterways. I will not disappoint him. Nor will I disappoint the noble Lord, Lord Ferrier, with every word of whose speech on waterways I thoroughly agreed. I am glad I have one more convert to the idea of the barge-carrying ship.
In talking about the waterways in connection with transport, let us first consider what they cannot do. There is absolutely no sense in trying to make our narrow waterways—our little old waterways with 7ft. wide locks—into cargo-carrying waterways. That could not be done economically, and any attempt to do so would merely cause larger financial losses. As

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for passengers, the narrow waterways have a small and limited purpose; they can be used to decoy people on holiday away from the horribly noisy roads on to the peaceful, quiet waterways. There, the narrow waterways have a limited use.
Their real use in transport is in respect of the major waterways which lead inland from the seaports. Seaports are places which positively generate traffic jams. There is no better way of producing a traffic jam than taking a very large object and loading or unloading its contents into and out of a large number of small objects. When you do that in a limited area, you not only create a fine traffic jam but you also have the problem of people wanting to live in the vicinity and therefore needing houses, shops, public transport, their own motor-cars and all sorts of other things, the result being that every major seaport creates a bad case of traffic jams.
There is only one way to overcome that difficulty; it is to spread the traffic out, and here I would make a point which will interest the noble Lord, Lord Underhill. The Dock Regulation Acts have done a great deal of good, possibly not intentionally, in that they have spread our seaports all along the coast instead of concentrating them in a few long-established spots. The result has been to spread the traffic out. I am sure that was not meant, but the result has been wholly good, and it has also caused a large outbreak of private enterprise, in praise of which I feel sure the noble Lord, Lord Cayzer—I thank him for his speech, of which I greatly approved—would join me.
How does one spread out these ports? One of the best ways is to spread them further inland, as far as possible along natural or artificial waterways. It can be done in several ways. One way is further to develop the low profile, short seas ship, which can go up into the great European waterways—in many cases right up into the interior of Europe—which can cross the seas, and can come up our major rivers, such as the Thames, the Trent, the Severn, and so on. There is a great possibility of doing that. There is also the self-propelled motor barge which can be used on our own inland waterways; in particular, as my noble relative said, on the major waterways of the Yorkshire area, which have recently been enlarged and which will soon be complete. That is another way of doing it.
But undoubtedly the best way of all in the future will be the barge which can be carried aboard a ship. I have talked about this before, and I shall go on talking about it until it happens. Much of the traffic of today is in containers, but one cannot make a road container of more than a certain size, because otherwise it could not be moved along a road. But one can make the container waterproof and float it. Once one can float it, one can have a very much larger container. The containers can be carried aboard ships. When they get to a waterway they can all be dropped into the waterway and, as my noble relative said, a pusher tug can be used to push them in rafts. I am informed that in parts of Europe they are now pushing rafts of these containers of up to 11,000 tonnes at a time. That is a major operation in anybody's estimation.
Those container ships are very valuable in our days. They are especially valuable to us because much of our traffic is now with Europe, and the European waterways are very far developed indeed. But it is not only to
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Europe that the barge-carrying ships can go; they can go anywhere in the world, and the waterways of the world are everywhere being developed. The Americans are very busy at the moment making brand new waterways, and American container ships are coming here loaded with barges, but at the moment they are not getting as far up our rivers as they should be.
The whole process needs much more developing and we ought to have container ships. I was glad to hear that British Waterways is going into a consortium with private enterprise to build barge-carrying ships which it is hoped to use in the near future in this country. This is the great development because in this way we can take goods off the roads, not just in small quantities, but in really large quantities. It is all very well talking about small developments, and it is perfectly true that a large number of small developments will produce a bigger effect, but here is a really large effect than can be achieved comparatively simply.
If I had just one major point to make in a speech on the subject of waterways and if I were to put that point alone, I would echo the noble Lord, Lord Ferrier. I would say that what we really need in this country to make our inland transport and our cross-seas transport easier, cheaper, more pleasant, less polluting, and more cost effective, with less consumption of valuable fuel, is more barge-carrying ships. Let us expand our waterways until they can take the container barges, which can then be pushed right up into the centre of our country, wherever our industry needs them.
7.16 p.m.
Lord Renton: My Lords, I doubt whether when he tabled his Motion my noble friend Lord Lucas of Chilworth expected that we would have such fascinating discussions on inland waterways and container ships. Before I go any further I should like to join in the chorus of welcome for the maiden speech of my noble friend Lord Cayzer. His mention of container ships has started something terribly important, because it prompts us to realise that our future economic prosperity is so much linked with Europe.
If I may follow up what the noble Viscount, Lord St. Davids, said, I would say that the link between Europe and the East Coast ports through the container ships is essential to our prosperity, and it follows that the link between the East Coast ports and the manufacturing towns of the Midlands is also essential. Successive Governments have not done too badly up to a point (something to which my noble friend Lord Ferrier referred) in improving the road system by means of dual carriageways, especially on the A.604 between the East Coast ports and the Midlands. But the dual carriageway system westwards ceases when we get to the A.1, and there is a vital, long overdue need for the link between the A.1 and the M.1. to be completed. I pay tribute to what has so far been done, as far as Huntingdon. T am referring to matters with which lam so familiar, because I was the Member for Huntingdonshire for a third of a century, and in those days I started agitating for the A.1-M.1 link to he completed, but work on the completion has still not been started.
Perhaps I am being a little unfair to my noble friend Lord Avon in not having given him notice, and I do not suppose that he is in a position to discuss this

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particular point, but I hope that he will take it on board, as we now say. It is essential that the link should be completed. It is planned, but not as a dual carriageway, and the idea of an A.1-M.1 link which is not planned as a dual carriageway is just plain shortsighted.
Of course there is a need for various by-passes, too, in that part of the world. As my noble friend said, Huntingdon has its by-pass, but Thrapston needs a by-pass. The A.45, which is also an east-west route, is not planned to become a dual carriageway in the foreseeable future, so far as I know, but it is nevertheless a very important route. Further by-passes are badly needed at St. Neots, Kimbolton and Kettering. I mention those factors in the debate because they seem to me to complete the saga which has been so vividly described by my noble friend Lord Cayzer, the noble Viscount, Lord St. Davids, and others.
I am one of those old-fashioned people who is always grateful for an excuse for nostalgia. That is one of the reasons why I am grateful to my noble friend Lord Lucas, because, when I came down from Oxford, I started life in Paddington Station, where I was a pupil of the Great Western Railway, and that has given me a lifelong sympathy towards the case for the railways. May I say straight away that I agree with the noble Lord, Lord Underhill, when he says that we must have an effective railway system. He thinks that, in order to achieve that, it must be part of a fully planned and integrated system; but very early in the debate the noble Lord, Lord Tordoff, disagreed with him—I think rightly—and I disagree with him, too. It is not merely the complexity that Lord Tordoff mentioned, which makes planning on this kind of scale and in this kind of detail extremely difficult. The trouble is that consumer demand changes. If consumer demand were a constant, you could do a great deal of planning; but, in the very nature of our rapidly evolving economic and social life, you have to have more flexibility than a planned and integrated system will allow.
Lord Underhill fairly asked: do the Government have a transport policy? The Government certainly have a transport policy for the railways, and I suggest that this Government have done more than any other Administration in the last 20 to 30 years to ensure that the railways have a successful future. May I just mention four important points of their policy for the railways. First, the Government have put more money into the railways, by raising the external financial provision in each of the last two years—this is in real terms—more than has been done before and by putting the Exchequer grant for passenger services in 1981 to the formidable sum of £755 million.
Secondly, they have ruled out any further substantial cuts in the passenger network. Thirdly, they have endorsed the principle of a programme of mainline electrification, on which good progress had been made over a good many years under all Governments; and it is worth mentioning in passing as we were talking about the East Coast ports, that in December the Secretary of State for Transport approved plans for electrifying the railway services into Harwich, Norwich and Ipswich. Fourth, but by no means last, this Government have avoided any reduction in the ceiling on investment in British Railways.
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That is not bad; but it is surely common ground between us all that the Government, the taxpayer and the travelling public are all united, as we are in your Lordships' House, to see an efficient, cost-effective and well-invested railway system. However, I fear that they will never get it if the unions insist on more men being employed than the railways require, or on their being paid ever-increasing wages with no regard to productivity. These are fundamental facts which need to be stated. We should not be squeamish about stating these facts, because they are fundamental to what everybody wants to achieve.
One could go much further on this question of the railways, but I wish to make only a very short speech in this interesting debate. All I would say in conclusion is that I wish the Government well in a continuation of their regard for priorities so far as our transport system is concerned, but hope that they will not long delay the completion of the link between the East Coast ports and the Midlands.
7.25 p.m.
Lord Ponsonby of Shulbrede: My Lords, as did other noble Lords, may I start by thanking the noble Lord, Lord Lucas of Chilworth, for initiating the debate this afternoon. Indeed, as was underlined by the noble Lord, Lord Renton, who has just sat down, the debate has been far more wide-ranging, I am sure, than the noble Lord, Lord Lucas, would have guessed. In fact, we seem to have discussed a very wide range of subjects. I was particularly impressed with the maiden speaker, Lord Cayzer, and should like to congratulate him. He was pointing to the changes in the modes of transport which had taken place over the past few decades—the switch from ship to air for long-distance travel; and this, of course, has had very far-reaching effects on the whole economic fabric of many of the British seaside resorts, and of resorts overseas. So it has been a very important switch.
The question which the noble Lord, Lord Lucas, has raised this afternoon is directed at the economic and social consequences of traffic congestion on the roads and in the big cities. Many speakers have spoken, and have indeed concentrated their words, on the broad problems of movement around the country—the building of by-passes, and the position of the British Rail network. The noble Lord, Lord Lucas, in his opening remarks, very rightly underlined the emotional aspects of transportation and the amounts spent by the average householder on it, drawing comparisons between each component of that spending; and he pointed out to us that the more income people had the more money they tended to spend on transport.
He led us to the fact that there was a direct relationship between personal incomes and transport needs, and that higher income groups tended to use more of the transport services. He also stressed that adequate resources should be made available for transport services as a whole, but felt that the balance was not fairly prescribed at the present time. The noble Lord then proceeded to outline his roads policy, and told us how many particular improvements were under construction at the present time. Other noble Lords questioned the amount of land needed for road building. I think the point I want to come to on this is

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that we do have a slowly improving network of major roads, and a large amount of the freight is carried by road.
Another point which was mentioned by the noble Lord, Lord Lucas, was that public transport in rural areas was an unsolved problem which he did not wish to discuss further this evening, but my noble friend Lord Underhill, however, outlined the importance of retaining a national network to support transport in rural areas. So far as London is concerned, the noble Lord, Lord Lucas, made a case for a political structure for London Transport and for a professional day-to-day running of the transport system. He even supported the idea of a one-for-one subsidy for London Transport, but he underlined the high expense of transport in London. I know that nobody would disagree with that. Indeed, many noble Lords have underlined the point that transport in London is among the most expensive in Europe and that it is one of the least subsidised. But what we need in London and in our major conurbations is a balanced and co-ordinated system with each part of the transport system contributing to the total what it is best able to contribute.
For example, many noble Lords have made the point that certain goods such as coal and oil are best carried by road, whereas it is more convenient for others to be carried by rail. I think it was the noble Lord, Lord Orr-Ewing, who made the point of the massive losses of British Rail since nationalisation. If he were in his place, I would remind him that losses by the railway had been going on for many years before they were nationalised, other than for the short period during the war years when they were used heavily by the Government for troop movements and movements of supplies.
Surely, this must be the criteria by which we judge our public transport system. Surely, our aim must be to ensure the vitality and competitiveness of our major urban conurbations and, coupled with that, the improvement of the environment and the convenience of the users, including pedestrians.
Not many noble Lords have concentrated their remarks on the problems of the big cities. The sheer numbers of pedestrians in central areas have of themselves created hazardous problems and led to the building of pedestrian precincts. However, the problem of the old cities in tackling these are very great. In London we have created traffic-free areas. There has been a great advance in pedestrianisation; areas at Leicester Square, Carnaby Street and South Molton Street are entirely pedestrianised.
I would have been a joy if one had been able to extend that idea and to have created that pedestrian environment in an area such as Oxford Street, but unfortunately the road system in London is such that that particular idea was not possible. But I am glad to say that, for safety reasons, the pavements in Oxford Street are much wider than they used to be. This has made it slightly less hazardous than it was for pedestrians. We also have a situation in Oxford Street where the pedestrian feels that he has almost more importance than the taxis and the buses, which are the only vehicles now allowed in that street.
If one thinks about other European cities such as Munich, Copenhagen, Gothenburg, Cologne, Vienna and Amsterdam—all of these have tried to make im-
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provements in their city centres to better conditions for the pedestrians. Over the years, talking to civic leaders in these cities, one has found how often particular ideas concerning pedestrians have come about by accident. For example, in Munich it was the building of a subway to join the two low-level rail stations in the main street which led to the creation of a "pedestrianised" street right through the centre of that ancient city and something which is a joy for all who use it. In Gothenburg it was the police concern about the congestion at Christmas time which led to the closing of a particular street to traffic. People then realised that it as quite possible to operate in the city without allowing traffic to use this particular street. People, once having tried the scheme, found it was something which could be extended.
I know that one of the major problems when one is developing schemes of this sort is that one often meets objections from the police. Sometimes it is possible to overrule those objections. But so often it happens that when one creates a pedestrian area one finds that one can manage quite well without that particular artery. I think that a transportation policy in the conurbations in the big cities is inevitably a carrot and stick policy. The carrot is the cheap fare and the stick is the enforcement of parking restrictions. But we must also accept that there are certain aspects of the stick which the public will not accept—such as a cordon to stop cars from going into the whole of a central area. The carrot encourages people to use public transport, which is socially beneficial.
The noble Lord, Lord Orr-Ewing, pointed to the very large number of people who travel to work by public transport and particularly singled out the fact that the number of people who use the bus as their means of travel to work had dropped very substantially in recent years. I think it is important that we should encourage a further switch back to public transport. The noble Lord advocated cheaper fares by British Rail. He felt that British Rail should be more imaginative if they want to see their traffic grow. In fact, British Rail have been very imaginative in a lot of the ideas and fare packages they have introduced in recent years. I am sure that, if their financial position made it possible, they would like to extend the ideas they have been carrying out in recent years.
To return to the question that the noble Lord raised about the drop in the number of people using buses in the inner areas, of course one of the reasons is that people find the bus service more unreliable than Tube transport. They find also that their journey time often tends to be longer. What is needed is to reverse that situation and to encourage people to switch to the use of the bus. I think that the short experiment that we had of cheap fares in London showed that it was possible, given certain conditions, to encourage that switch.
The noble Lord, Lord Teviot, thought that one good thing might be to have more one-man operated buses in London. We found in London that this only works if you have a bus operating on a simple flat-fare system. If you have a multi-fare system the journey time is longer because it takes so long for the driver to collect the fares. The effect of this is that, in order to maintain the same bus service, you have to have more buses operating on a particular route, so

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the saving you at first thought you had made quickly disappears. As we all know, if one increases the average speed of a bus by something of the order of 2 miles an hour one suddenly has a very improved service indeed. The problem of unclogging the roads is very important, and one of the ways to do this is by the carrot.
Several noble Lords raised the question of the control of London Transport. This is a thorny problem and not one that I want to discuss at length this evening. What is important is the question of the co-ordination between London Transport and Birtish Rail, the question of the ease of moving from one mode of transport to another. Over recent years we have seen vastly improved interchange facilities in London in this field. I am thinking particularly of the interchange facilities between British Rail and London buses at Euston and Victoria. There have been very great steps in this direction there. In conclusion, I should like to say that this has been a very useful debate. A number of useful ideas have been stimulated and I shall be very interested to hear what the noble Earl has to say.
7.41 p.m.
The Earl of Avon: My Lords, we have had a wide-ranging and well-informed debate and, as I have found is usual when this House discusses transport problems, it has produced a lot of original ideas. I join with other noble Lords in saying how grateful I am to my noble friend Lord Lucas for raising and introducing this subject, and also to other noble Lords for their contributions. It is a topic on which it is particularly useful to have such an exchange of ideas. I should also like to congratulate my noble friend Lord Cayzer on his modest and most informative speech. He seemed to cover a great deal of ground in his speech of some 12 minutes. I am sure that the whole House looks forward to hearing him often in the future.
Transport has probably never before been the subject of such acute political controversy. In some ways, political differences about transport policy are inevitable and, indeed, proper, as both the noble Lords, Lord Underhill and Lord Tordoff, said in their opening remarks. Many may find some things which I say are a little bit Conservative—this time with a capital "C". We can legitimately take different views about levels of fares and subsidies, or the extent to which private cars should be controlled in city centres. The big problems arise when transport is deliberately made into a political issue, and when dogma is pursued without regard to consequences and costs.
If I may take traffic congestion first, as that is the first subject raised in my noble friend's Motion. we should look at traffic congestion in its historical context. It is not new. Traffic jams in our cities pre-date the invention of the internal combustion engine. The building of the first underground railways in London was partly a response to the difficulty of moving through streets congested by horse-drawn vehicles.
But of course the major problems have arisen with the growth of motor transport, particularly private cars. The number of cars and the use made of them has increased dramatically. Over the past 30 years, the number of cars and the miles travelled in them has
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increased by a factor of six. Now, as we have heard, over 80 per cent. of all passenger travel is by car, and over 80 per cent. of freight goes by road. This is a major social and economic shift which was described very well by my noble friend Lord Cayzer.
Inevitably, we tend to dwell on the problems which this immense growth in road transport has brought. But it would give a false picture if we did not also remember the big advantages and benefits. The fact is that where people have the choice they usually prefer to own and use cars. This is a universal phenomenon. The reason is that cars are so convenient in providing door-to-door transport under people's individual control.
Customers have increasingly chosen lorries because of their inherent advantages for most—though certainly not all—kinds of freight traffic in our relatively small country, where average hauls are so short. For many journeys where goods carried by rail would have to be loaded onto lorries at either end, it makes more sense and is more economic for them to go by road the whole distance.
But the growth of traffic has of course brought problems, many of which have been touched on this afternoon. The Government recognise these problems. Congestion is one of them. It wastes time and fuel; it is inefficient; it is frustrating to drivers; it damages the environment; and it causes great annoyance to people who live in streets continually blocked by lines of vehicles.
The problem of congestion has not been solved. Far from it. But let us not underestimate what has been done. The remarkable thing is that we have coped relatively well with the vast increase in traffic. For example, the worst fears of transport planners 20 years ago were that the forecast increase in car ownership would lead to paralysis of our city centres. This has not happened. Indeed, the general trend—there are exceptions—appears to have been for urban traffic speeds to increase slightly over the years.
How has this been done? What are the lessons for the future? Road building can help greatly, though it is not a universal panacea. The motorway network carries a large volume of traffic swiftly and efficiently between the major industrial centres. We have also invested a great deal in other strategic routes, for example by providing by-passes to take traffic out of narrow streets. Imagine what traffic conditions would be like in many towns if we had not built these roads. Imagine, for instance, what conditions would be like in towns such as Marlborough if the M.4 had not been built.
This work continues. The Government are investing about £700 million this year on maintaining and improving trunk roads in England, and local authorities will be spending about £1,200 million on their roads. We have proposals to deal with the worst bottlenecks—for example the two-lane section of the M.1 near Watford, and the Barton Bridge carrying the M.62 over the Manchester Ship Canal. Our top priority is the M.25 round London. This will provide a vital route for traffic from, for example, the Midlands and North trying to get to the Channel ports, avoiding the centre of London. It will save a considerable amount of time for drivers, and will reduce congestion in many communities on the outskirts of London.

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The decentralisation of employment and population has also helped because it has meant less traffic in city centres than there would otherwise have been. In urban areas, there are several ways in which we have tried to cope with traffic. I have already covered in some detail in the debate we had on Wednesday, 27th January, what we are doing about traffic control and management, and about parking and enforcement. With your Lordships' permission, I do not intend to go over that ground again. I spoke then about a new generation of traffic control equipment which is coming into use called SCOOT.
The noble Lord, Lord Underhill, talked a little bit about traffic management. I should like to bring to the attention of the House the fact that the traffic management authorities have wide powers to regulate traffic. They can direct heavy traffic to the roads best adapted to take it. They can prohibit the manoeuvres most likely to delay other traffic. They can give priority to buses. They can exclude all traffic—especially from play streets, which another noble Lord mentioned—or some kinds of traffic, from residential or pedestrianised areas. This can make conditions in towns much more civilised. These powers can be exercised by local authorities.
We also came back to our old subject of road humps. I confess that I could not remember whether prams were a good thing or a bad thing on the grounds that you can push a pram over the bridge made by a road hump or alternatively if you are pushing a pram in the road it is rather difficult. No doubt I can refresh my memory on that afterwards.
The noble Lord, Lord Lucas, asked about progress on a number of road schemes, and I am glad to say that on the Winchester section of the M.3 the challenge in the High Court to statutory orders for the Popham-Bar End section has been withdrawn and we should be able to start construction later this year. A consultant study considering all the options south of Bar End is under way and we expect a report by the end of the year. As for the M.1-A.1 link, which was also mentioned by the noble Lord, Lord Renton, preparation has taken longer than expected but we hope to publish draft orders soon.
I have also taken note of my noble friend's other suggestions. He is right when he says that I am not in a position to comment on the by-passes he mentioned. The public inquiry into the M.40 from Oxford to Birmingham will open before the end of this year and we expect to announce the date very soon. The remaining scheme mentioned by my noble friend was the section of the M.20 between Maidstone and Ashford, which duplicates the existing A.20. The A.20 here, although far from ideal, is in better condition than many other older trunk roads, and though it touches two or three villages the environmental problems are not as bad as in many other places. The Government therefore decided in 1980 that design work should be halted for the time being while scarce resources were concentrated on more urgent schemes elsewhere; but the scheme is still in the programme and we shall pick it up again as soon as there is a prospect of finding the money to build it.
My noble friend Lord Ferrier, in a lively speech containing some intriguing suggestions on transport, referred to the question of the Edinburgh outer city
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by-pass. As my noble friend will recall from previous discussions of this road scheme in which he has taken such an interest, this is not a trunk road and thus not a Government responsibility. The responsible highway authority is the Lothian Region and this important road scheme is their top priority. They are proceeding with it as quickly as they can, and I note what he has said about delay. The Government are involved in providing finance for the scheme and I am happy to be able to say that, despite the difficult decisions which have had to be made about public expenditure, we have managed to give Lothian more money over the next few years in order to allow them to make progress as fast as they can.
My noble friend Lord Lucas also asked about proposals for using private funds for road building. The Government firmly believe that increasing the diversity of funding could have many advantages. As the noble Lord said, a number of construction companies have expressed an interest in schemes based on a royalty system, and the Economic Development Committee for Civil Engineering have also been looking into this. The use of private finance raises a number of fundamental questions which the Government have had to consider. This has taken some time, but I am glad to say that the Department of Transport will shortly be inviting the construction industry to discuss whether a scheme can be found which meets the needs of both the Government and the industry.
The noble Lord, Lord Underhill, mentioned bicycles and my noble friend Lady Macleod mentioned pedal cycles. The Government are encouraging local authorities to put forward schemes in this field, and there is a general awareness about these matters. I believe the first lights are shortly to be turned on in London at a cycle crossing out of Hyde Park. There is to be an expansion and improvement of the national cycling proficiency scheme which RoSPA plan for this year, and we now give encouragement to cyclists to be conspicuous and to motorists to look out for cyclists. In fact, a TV publicity campaign took place in London last summer. A high priority is being given to road maintenance expenditure by local authorities and the majority of counties in the last round had their bids accepted in full. I agree with my noble friend Lady Macleod about cycling, and I should like to say that I personally believe that one of the major ways of cutting down the loss of life would be to obey the Highway Code. That would be the quickest way to reduce casualties.
To come on to motor-cycle safety, as the House will recall, in the Transport Act 1981 we took some measures geared towards this. There was a reduction in the size of the learner machine; there was a limit on the duration of the motor-cycle provisional licence and there was a two-part test. The object has been to give encouragement to learners to take training and pass these tests. Also, as my noble friend Lord Ferrier mentioned, new learner machines have been introduced because the present 250 cc machine is too powerful for the average learner-driver.
Finally, my noble friend Lady Macleod asked about the withdrawal of the RAC-ACU from motor-cycle rider training. This is regrettable but we do not believe it will seriously affect the new scheme. The RAC-ACU grant will now be made available to the

1227
Motor Cycle Safety Foundation and this will help defray the initial costs of the training organisations, including the former RAC and ACU centres which wish to join this scheme.
Turning to the special traffic problems in London—and I am grateful to the noble Lord, Lord Ponsonby of Shulbrede, for taking us on a walkabout of some of the new spots—I believe that, contrary to general experience, the average speeds in London have not improved, and of course there is no easy solution. Sadly, in London the GLC's roads programme has been a political football over a number of years and the present GLC has a declared bias towards a purely public transport solution to London's problem. It was decided against proceeding with all but a few major road schemes. This lack of balance—the theme of my noble friend's Motion—does nothing to help the problems of London.
So far as the Government's direct responsibilities are concerned, a great deal is being done to improve the road network in and around London. Plans for the current trunk road programme within and bordering the GLC area will cost about £1 billion over the next 10 years. I have already mentioned the M.25. Other projects include further improvements to the North Circular Road, with dual carriageways and improvements to junctions; the East London River Crossing plus connecting routes, which will form strategic links for the Docklands; and the improvement of other key radial routes into London, including the A.20 and the A40.
This major programme has three main aims. The first aim is to help the economy of London, notably with the revival of the Docklands. The second aim is to meet London's environmental needs by providing routes which will relieve badly congested other roads; a good example is the M.11-Hackney link which will relieve Leytonstone High Road. The third aim is to improve safety; and this point was made by several noble Lords. One example is the improvement of the junctions on the North Circular to separate pedestrians and traffic. This will deal with some notorious accident black-spots.
I now turn to the other main part of my noble friend's Motion:
"the need for balanced, efficient and economically viable rail and road transport systems which do not place excessive burdens on taxpayers or ratepayers".
The Government agree with every word of that proposition. I should like to explain why, and what we are doing about it. Before doing so, I should like to say that the Government do not treat traffic congestion in isolation from these other aspects of transport policy. Obviously there are most important connections between the two. In particular, the large numbers of people who travel to work in our city centres could not possibly all get to work by private car. Over a million people travel into central London each working day and 80 per cent. come by public transport. If they all tried to come by car, they simply would not get to work, or if they did, there would be nowhere for them to park.
The noble Lord, Lord Underhill, asked whether there was a separate sub-department within the department which dealt with the environment. In
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point of fact there is not, and I think there are two reasons. One is its close involvement with the Department of the Environment itself. As the noble Lord is well aware, they have been part of each other; then they separated and later became part of each other again. Secondly, they do involve themselves very much with the environment and, if I might give an example, the transport department is actually involved with landscaping.
Another noble Lord produced the theory that trains and buses are more fuel efficient than cars. In practice their fuel efficiency depends on their load factor, and a car carrying four people can be more fuel efficient than an almost empty train. It does not make economic or energy sense to run more trains or buses than are needed, as that would not save fuel.
There are obvious lessons here. A balanced transport policy is one which recognises, first, the proper role of each mode and the need for a reasonable level of subsidy for public transport and, secondly, that resources for transport, as for everything else, are limited. So the more efficient the transport operators are the more both passengers and taxpayers will benefit. The third point is the recognition that we get nothing free in transport. There is no pot of gold. Most clearly, higher subsidies mean higher taxation. The Government believe that subsidies are necessary to run an adequate public transport system. But it is important to be sure that we are getting something worthwhile for the subsidies that are paid.
Consider, my Lords, the example of subsidies for buses. This year we are grant aiding through Transport Supplementary Grant £260 million of local authorities' spending on bus subsidies in England. The bus industry as a whole receives more than £1 billion a year in support from the public purse. These are large sums of money. The Government are bound to be concerned to see that we get good value. It is easy, as we have seen, to increase the cost of subsidies very quickly indeed, if fares are cut or allowed to get out of line with changes in costs. Deliberately low fares, unrelated to costs, will not change the long-term downward trend in the use of bus services. They may postpone a decline temporarily, and at great cost, but, in themselves, these policies are not going to reverse the slow decline in public transport use.
But the bus industry is, and will continue to be, a large and essential part of our transport system. Even if there were to be no subsidies at all, the Transport and Road Research Laboratory have estimated that by the year 2000 the use of buses would be between a half and four-fifths of present-day levels, depending on the rate of economic growth. The Government have no intention of accepting even that level of decline in bus services. On the contrary, we have made it clear that we foresee a continuing need for bus subsidies in future years. But they will be at levels that strike a fair balance between the travelling public and the taxpayers and ratepayers who meet the cost.
The levels of public expenditure on subsidies for which we are providing will allow an adequate standard of bus services to be maintained, provided that services are tailored to demands, that fare levels are kept in reasonable line with inflation and that services are operated efficiently. That puts a responsibility on operators and local authorities to look closely at

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what these subsidies are buying, whether they are buying the right services and whether there are ways of providing those services at lower cost.
These themes have been vividly illustrated recently in London. The GLC took a decisive step to try to solve London's traffic problems at a stroke by introducing a massive reduction in London Transport fares. This was misguided and, as we learned, illegal. Since the judgment of the Law Lords, the GLC have mounted a publicity campaign—at a cost to their ratepayers of £¼ million—aimed at forcing the Government to introduce emergency legislation to enable them to return to their extravagant low fares policy.
Lord Teviot: My Lords, I do not think I even apologise for interrupting. Is my noble friend aware that he is giving us the most appalling bromide about Government costs and everything else? In this debate we have tried to suggest something to enliven public transport and to give a bit of initiative. My noble friend is going back over the same old ground about cost effectiveness, but what we are trying to do is to suggest something to avoid congestion. We are only going through what successive Governments have tried to do about costs and other things. What we are trying to do is to look at a much wider policy. I wish that my noble friend would slightly develop his theme on that. I have probably not been concise or constructive, and I am sure that other people could interrupt him and do rather better than I have done.
The Earl of Avon: My Lords, if I understood my noble friend aright, I think he will discover, if he reads the report of my remarks, that I have been stating a reasoned and general policy. If I may continue from where I was, we are not prepared to legislate to turn back the clock. But the Government have taken urgent action to resolve the immediate problems. We introduced the Travel Concessions (London) Act to enable the GLC to support concessionary fares. And we offered legislation—which the GLC declined—to enable the £125 million deficit from the low fares policy to be spread over five years, cushioning the impact on fares. I must make it clear that the Government support the payment of a reasonable level of subsidy to maintain essential transport services. Last year some £250 million was paid to London Transport in various grants, and a similar level of subsidy will he available in 1982. About £100 million of this support comes from the national taxpayer.
I can quite understand that many people see advantages in low fares. But the GLC has not owned up to the enormous cost to the ratepayers of their way of achieving this. Over the next four years, it would have cost about an extra £1,200 million. Many people, such as pensioners or those living in some outer boroughs, stood to gain nothing from it. Many ratepayers could ill afford to finance the policy. By its impact on industrial and commercial ratepayers it would have damaged the prospects for jobs in London. The tragedy is that, even on the GLC's own estimates, their low fares policy would have had only a marginal effect on private car journeys, while at the same time cutting back on the scope for financing much needed road improvements.
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A truly fair fares policy must balance the interests of the traveller, the ratepayer and the taxpayer. The GLC policy failed to do this. Nor did it consider the possibility of achieving savings through increases in efficiency and productivity. If London Transport had achieved the productivity levels of other major cities in this country, about £80 million a year would be available to reduce fares. Instead, the policy was to increase services and wage costs at the ratepayer's expense. This did not give good value for money. The Government are not prepared to legislate merely to enable the GLC to return to its old extravagant policies.
Lord Tordoff: My Lords, I must apologise to the noble Lord for interrupting again, but I really take the point of his noble friend that we have carefully stayed away from this rather polemical subject this afternoon. So I wonder whether the noble Earl could draw that part of his remarks to a close, lest people on other Benches of this House may get rather over-excited at this late hour of the night.
The Earl of Avon: My Lords, I am grateful to the noble Lord for his advice. I had come to the end on that point. Noble Lords have mentioned the levels of subsidy paid to the public transport systems in various European cities, and we feel that such comparisons are often made on a rather selective basis. For one thing, the comparisons are invariably over-simplified and misleading, because it is virtually impossible to transpose the accounts of foreign transport undertakings so as to permit a thorough and accurate comparison. For example, the figures quoted often omit capital grants, which obviously make a difference.
If I may now turn to the railways, similar general principles—efficiency, economy, balance, proper regard to the interest of taxpayers—apply to the railways. The railways have an essential role to play in our transport system, and I assure the noble Viscount, Lord Sidmouth, that the Government's support for them has been strong. We have shown flexibility towards their financial difficulties. Recent investment, which has included the introduction of the High Speed Train—much praised this afternoon—major infrastructure schemes and rolling stock replacement programmes, gives the lie to criticisms that investment provision has been inadequate. We shall continue our support to ensure that the railways have a healthy future.
Some British Rail activities should stand on their own feet. For freight, we believe that the railways should operate in the market place to attract that traffic which is most suitable for rail, and that this business should be operated commercially, without public subsidy. There is one exception, to which I shall return later. Similarly, all the British Railways Board's other business, except the socially necessary passenger services, should be run on fully commercial lines. The board have recently submitted new business plans for Inter-City and freight to achieve this aim.
The socially necessary rail passenger services do require subsidy. At the same time, we are anxious that taxpayers should not suffer as a result of having to support them. These considerations have been taken into account when fixing the grant level for British Rail in 1982. The figure which we have announced of £804 million is less than the board have

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sought, and represents a cut in real terms on the exceptional grant allowed in 1981. Nevertheless, the figure remains some £100 million higher than grant in 1980, allowing for inflation.
For the first time since the Public Service Obligation Grant was introduced in 1975, a portion of the grant has been earmarked for necessary maintenance and renewal. Other steps are also being taken to improve economy and efficiency. The noble Lord, Lord Taylor of Gryfe, may be interested in this. Mr. P. J. Butler, of the accountants Peat, Marwick, Mitchell and Company, has been asked to make a report on the board's trading position, and this report will form an important part of the review of railway finances which the Government have initiated today. Sir David Serpell, former Permanent Secretary of the Ministry of Transport, and until today a member of the British Railways Board, will chair this independent review, with Mr. Butler, Mr. Goldstein, a senior partner of a firm of consulting engineers, and Mr. Leslie Bond, a director of the Rank Organisation. The terms of reference of the inquiry are:
"To examine the finances of the railway and associated operations, in the light of all relevant considerations, and to report on options for alternative policies, and their related objectives, designed to secure improved financial results in an efficiently run railway in Great Britain over the next 20 years".
The committee's report is expected to illustrate the options open to provide a firm foundation on which the Government can establish clear objectives and make justifiable financial provision for the future of the railways. If we are to invest in the railways, we must look to the railways for achievements in return.
The review of main line electrification, about which a number of noble Lords have spoken, demonstrated a sound financial case for a programme of electrification, based on favourable assumptions about the financial performance of British Rail's freight and Inter-City businesses, which will be the main beneficiaries. The Government were not prepared to make an unconditional commitment to the electrification of an extensive network because the performance of these businesses was deteriorating. We therefore invited the board to draw up a 10-year programme of electrification where the benefits could clearly justify the investment based on new commercial plans for the Inter-City and freight businesses for those potentially profitable main lines.
Lord Underhill: My Lords, I wonder whether the noble Earl could give the House an indication of when decisions will be taken, bearing in mind the fact that the chairman of the British Railways Board has made it quite clear that the investment rate for last year could not be used, due to the EFL, and to the fact that there is a badly needed programme of track and rolling stock renewals.
The Earl of Avon: My Lords, the board are currently preparing this programme and will consider it as soon as it is available. The approval of individual electrification projects within the programme depends not only on the profitability of the investment in question
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but also on the board's ability to generate the resources necessary to finance the investment.
Improvements in productivity and performance do not all have to depend on costly investment. Some of them will generate resources to allow the investment elsewhere which is essential to the future of the railways. The board have already had much success here, and we pay tribute to them. My right honourable friend the Secretary of State for Transport drew attention to this success when he approved electrification to Norwich, Ipswich and Harwich last December. The board, and the majority of their employees, recognise that continuous progress is essential.
If I may digress, I should like to join with other noble Lords, particularly the noble Lord, Lord Taylor of Gryfe, and my noble friend Lady Elliot of Harwood in their tribute to the great strides which British Rail have made during the last two decades. While in this House we make a lot of suggestions, not criticisms, this should not obscure our own appreciation of them. I should like to say to my noble friend Lady Elliot of Harwood that I hope that in her long, extended journeys in sleeping cars the old rolling stock rocks her to sleep.
If I may say a word about rail privatisation, we also believe that this will help by freeing the subsidies from the restrictions which apply to the public sector and making more resources available to the railways. I am afraid that I have "gone on" for rather a long time, but there was no opener for this side. Therefore, perhaps I may be excused if I just finish off my remarks. There is further room, too, for the disposal of non-operational assets. We are considering with the board how private capital may be introduced into parts of the main railway businesses, or into particular schemes. And we are keen to see pursued such initiatives as low cost operations and the rationalisation of services and infrastructure. In these ways we can seek to ensure that the railways are offering the services that their customers want as efficiently as possible and at the lowest cost to the taxpayer. That is the best way to ensure that they survive as a viable and competitive alternative to other modes of transport.
I should like to touch on fare increases, a point which was raised by my noble friend Lord Orr-Ewing. It is, of course, for the British Railways Board to decide on the size and timing of rail fare increases. This is not a matter in which the department intervenes. British Rail are having to consider measures to repair the financial damage caused by the strike, and I know that they will seek as far as possible to avoid measures which will cause harm. I am sure that the noble Lord will be aware of some of the schemes which British Rail have recently produced and which were accentuated both by the noble Lord, Lord Ponsonby of Shulbrede, and by my noble friend Lady Elliot of Harwood.
The question of rail research has been raised, The British Railways Board's technical centre at Derby is a world leader in the field of technological innovation and the application of scientific techniques to railway systems. I hope that this will continue to be so, and I have no reason to think that it will not. Incidentally, of their £13 million research budget, some £7½ million to a joint research programme is funded

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on a 50:50 basis between British Rail and the Department of Transport.
In pursuit of a balanced transport system, we have to see that each mode plays its proper part. That part will largely be determined by customers. I hope, and I believe, that we are all agreed that the preferences of customers should be paramount. But Government can legitimately influence those decisions where there is a good, demonstrable case for doing so.
I should say just a word about the inland waterways. However, as both the noble Countess, Lady Loudoun, and the noble Viscount, Lord St. Davids, took us on such a quick and glorious trip, it may not be all that necessary. The Government recognise that there is a considerable backlog of maintenance work on our inland waterways. The British Waterways Board have said that they would propose to tackle it over a 10 to 15-year period. We think that this is a sensible plan, which will allow the maintenance programme to keep pace with the board's resources. In the current year, we will be giving them grant aid of £37·7 million. Most of this will be spent on the continuing programme of regular repair and maintenance undertaken by the board, but million has been specifically set aside to help with the backlog, by funding specific projects and the replacement of essential equipment. Grants for waterways were introduced last summer and there has been considerable interest, though no formal applications have yet been lodged. Money is available and we should welcome some worthwhile applications from industry.
I hope that what I have said gives a clear indication of the Government's general approach. We start, with both freight and passenger transport, from the essential point that the needs of transport users and customers must predominate. Their preferences are in general best expressed through the market, with regulation concentrating on safety and other standards, which only Government can control or supervise. But this is not sufficient to produce a properly balanced transport system. Subsidy is needed to maintain a reasonable level of public passenger transport, or to influence freight transport so that it does less damage to the environment. But levels of subsidy must also have regard to the interests of the taxpayer.
This is a complex subject. There are no simple answers. I have not, I am afraid, had time to deal with some of the important subjects, such as better services for customers from the removal of licences for express coaches, a matter which noble Lords have touched on. But I hope I have said enough to show that the Government are determined to pursue a policy which meets my noble friend's prescription of balance, economy, efficiency and regard to the interests of ratepayers and taxpayers. I close by thanking all those who have contributed this afternoon, in particular for their imaginative ideas and constructive criticism. It has been a very worthwhile debate.
Lord Underhill: My Lords, before the noble Earl sits down, may I ask him one question. I appreciate that he has endeavoured to deal with many points, but there was one very important question, concerning
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transport facilities in rural areas, about which he has said nothing at all in his speech.
The Earl of Avon: My Lords, I am grateful to the noble Lord. We do think that this is important. I cut out the last four pages of my speech because I thought that 36 minutes was enough. if I may, I will go into that question on another occasion.
8.19 p.m.
Lord Lucas of Chilworth: My Lords, it remains for me first to thank my noble friend the Minister for his galloping wind-up and for his great ability in having discussed and answered a number of the points and questions which have been raised. That there may have been a preponderance of speakers on the subject of rail does not, I believe, in any way invalidate any kind of argument which the other modes have sought to represent. It must in fact only go to show British Rail the very great, real and deep concern which your Lordships' House has for the railway industry. If electrification is required, I suggest that perhaps the kind of support which they have received here this afternoon will electrify their board to get on with the task in front of them.
I have to confess that I am not over-happy at hearing my noble friend the Minister suggest that yet another inquiry is to be put in hand. I should have thought that all the inquiries, all the reports had been made. It is a decision of principle which has to be made, and managment has to be charged with the job. Failure, on an efficiency audit in two or three years' time, will mean the sack—at least, it always does in ordinary commercial terms. Let me at this stage thank all noble Lords who have made such wide, varied and interesting contributions.
Two points have emerged from this debate. The first was that made by the noble Lord, Lord Ponsonby of Shulbrede, when he talked about London and the co-ordination of modes. Again, I just want to draw attention to the report of the transport committee in the other place which is to be published, I believe, in about a month. I think we might well have a look at that report. The other point—and I so often have to raise a point with the noble Lord, Lord Underhill—was that raised by the noble Lord opposite when he spoke of wanting a transport authority. I always understood that it was the Department of Transport which represented that kind of interest; that it was the transport authority. If the noble Lord, Lord Underhill, is suggesting for a short while that that authority is not necessarily performing the more exciting task that might be thought appropriate—that of foreseeing the needs before they arise—then I would agree with him. It seems to me that perhaps in that department a long-term section might be set up to try to evaluate the fast-changing needs, which are not going to be met by a continuation of the existing systems.
I should like to conclude by joining with my noble friends and other noble Lords in offering congratulations to the noble Lord, Lord Cayzer, and by thanking all noble Lords for their contributions. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Supply of Goods and Services Bill
8.23 p.m.
Lord Mishcon: My Lords, I beg to move that this Bill be now read a second time. I do so with a sense of privilege. This Private Member's Bill has come to your Lordships' House after having passed through all its stages in another place, where it was sponsored by my right honourable friend the Member for Sunderland, North, who was fortunate enough to win the first place in the ballot. The present Minister for Consumer Affairs, Dr. Vaughan, recently referred to the Bill as having received—and I quote his words,
"a chorus of praise from all sides".
I am personally gratified that the noble Lord, Lord Cockfield, will be speaking on this Bill from the Government Front Bench in his new and deservedly elevated position of Secretary of State for Trade. I believe it will be the first Bill with which he has dealt in this House in his new office. Using, if I may, the phraseology of the Bill itself, I pay tribute, having suffered from it in debate, to the extensive merchantable quality of his ability and the uncanny fitness of his repartee for the purpose for which it was intended, especially during Questions.
The consumer—indeed, the whole public—is very much in the debt of the Law Commission. Their first report in this field on exemption clauses led to the Supply of Goods (Implied Terms) Act 1973. Their second report led to the Unfair Contract Terms Act 1977. A Consolidation Act, the Sale of Goods Act 1979, consolidated the statutory law relating to the sale of goods as contained in the famous Act of 1893 —which, incidentally, was a model of clarity in legislation—and amended the 1973 Act and some other legislation. But there are contracts for the supply of goods which do not amount legally to a sale of goods as covered by that Act.
May I mention some categories of such transactions which will be quite familiar to your Lordships? There is barter and exchange, covering for example the purchase of a car in part exchange; goods obtained with coupons or vouchers, covering for example goods supplied with cereal packet tops sent in or "10p off" coupons; goods supplied as a bonus with another product; contracts of works and materials of which common examples are car parks supplied by a garage, or a central heating system installed by a builder.
There is also the hire transaction, a very common example of which is the hire of a television set. In such transactions only possession passes to the consumer and not title or membership. Such a transaction would therefore not be covered either by hire-purchase legislation or by the Sale of Goods Act because in both cases title of the goods will or can pass.
It was with this type of transaction, not covered by any statutory provisions, that the third report of the Law Commission dealt. It found that the common law on the subject—the case law—was in a confused state, sometimes hidden away in the recesses of law reports from a bygone era, and sometimes actually contradictory. Wisely, your Lordships may think, the Law Commission recommended that the law relating to these matters should be set out clearly in a
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statute. Logically, your Lordships may think, the Law Commission recommended that the obligations of a supplier to a consumer, whether or not this amounted to a sale of goods as defined by the Sale of Goods Act, should as nearly as possible be the same; providing for quality, fitness for purpose, title and suchlike. Considerately, your Lordships may think, the Law Commission prepared a draft Bill modelled on the sale of goods legislation. That draft Bill, for which I express my gratitude as I said as well as making proper copyright acknowledgment, is Part I of this Bill.
Part III of the Bill has some supplementary provisions amending the 1973 and 1977 Acts and providing for the interpretation, commencement and extent of the Bill.
That brings me to Part II. Part II of the Bill deals—and your Lordships may think not before time—with contracts for services. Which one of us would not want to pay tribute to those people—and there are many —who supply services, often very essential services, and who keep up standards of efficiency both in terms of quality and the time taken in rendering those services, and who also with integrity do not take advantage of the urgency of the service required by taking the consumer, if I may use the inelegant but descriptive phrase, "for a ride"?
How many of us have, however, suffered from another kind of supplier of services, however much in a minority, be it a garage or be it a plumber, or a firm where a piece of work is performed or a facility provided such as laundering or holidays? Statistics as to consumer complaints reported to the Office of Fair Trading for 1979–80 make interesting reading in this context. They are to be found in the annual report of the Director General published in 1980. In relation to what could be broadly termed services, those complaints number 123,759. Even more illuminating and more eloquent are the findings of a survey carried out for the National Consumer Council by Research Services Limited between November 1979 and November 1980. Of consumers who had had various items serviced or repaired in the previous 12 months, one in 10 motorists or motor-cyclists was dissatisfied with the quality of work done: with grumbles about quality of repairs and servicing of rented television topping the list, 20 per cent. were dissatisfied. And these were closely followed in the customers' complaints league by complaints about the quality of repairs or servicing of gas cookers: 19 per cent. expressed themselves as being dissatisfied. Runners up were the servicing of household appliances of various kinds.
The National Consumer Council, to whom I am indebted for their effective briefing and assistance in connection with this Bill, realised the urgency of doing something in the light of this situation, having regard to the uncertainties of the present law and the absolute jungle of precedents at common law through which the practitioner, and certainly the layman and the man or woman in the Citizens' Advice Bureau, would have to tread a wearisome and confused way to find out what were the legal rights. The National Consumer Council performed a great public service. They produced a report called Service Please, which, again in line with the rights and duties set out in the Sale of Goods Act, researched what the common law is, or is

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believed to be, and their recommendations are the basis of Part II of this Bill.
Some have sought to say that it is not what the law should be, and I am delighted to say that the Law Commission will, at the Government's request, be studying what reforms, if any, there should be in the law in this area. That, of course, is bound to take some considerable time. Legislation following upon it may either never take place, or on past records, as the noble and learned Lord the Lord Chancellor, to his sorrow, knows only too well, may take a very long time before it can be slotted into a legislative programme, especially if the recommendations are somewhat controversial. In any event, those recommendations are scarcely likely to lessen consumer rights as against the present legal position. Therefore, it must be right, and I understand that the Government fully agree with this view, at least to put the existing law as it is believed to be into a statute, to have it consistent so far as possible with the supply of goods legislation and to do so now, so that the customer and the supplier of services and their advisers will at least know where they stand now by referring to a comparatively short Act of Parliament. That is Part II of the Bill, as I have said.
To ensure that speed of legislation does not operate to affect certain services unjustly or inappropriately by covering them in Part II when they should not be so covered, there is a clause in this Bill, which is Clause 12, which gives the Secretary of State the power to exclude by order the application of the provisions of Part II to specified kinds of contracts. Part II, as drawn, puts into statutory form the existing law on three main aspects—the quality of services, the time for carrying them out and the price to be charged.
Finally, my Lords, may I briefly and in lightning form—
Lord Lloyd of Kilgerran: My Lords, I am so sorry to interrupt the noble Lord, and with his usual courtesy he has given way. May I ask him, before he passes from Part II, to assist me and several others? We have received a note from the Law Society, of which he is a member, indicating quite clearly that Part II of the Bill is unsatisfactory and that therefore it should be deleted, as the Law Commission is now seized of this matter. The noble Lord himself extolled the work of the Law Commission, though I agree about the delay. May I ask him, as a member of the Law Society, what attention am I to pay to this very strong note from the Law Society about Part II of the Bill?
Lord Mishcon: My Lords, I am grateful for the intervention. My recommendation in regard to the Law Society or any document emanating from it would always be, as I am a faithful member of that society, that it should be treated with respect. I happen to believe, however, that the reaction should be limited to respect on this occasion, and not agreement, and I say so for the reasons that I endeavoured to give—namely, that Part II sets out in a way which is urgently necessary what is the present law, and the Law Society in its document in no way says that that is done inaccurately.
What the Law Society says, so far as I understand it, is, first of all, wait for the Law Commission to see what reforms there may be. I have already said that this could mean waiting for years, as we all know. Secondly,
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it says that there are some things covered—and I remember that it points out through its Company Law Reform Committee the position of non-executive directors—and that that should of course be looked at in regard to Part II. That is why I referred to the clause which enables the Secretary of State to except certain services, certain contracts for services, from Part II of the Act. I therefore feel on this occasion, although I speak with the respect that I advocated, that the Law Society is not correct in advocating that Part II should not be in this Bill. I repeat my gratitude to the noble Lord for that intervention because it has enabled me to elucidate something that I was very keen to make plain.
Lord Lloyd of Kilgerran: My Lords, may I reciprocate that gratitude to the noble Lord for his courtesy?
Lord Mishcon: My Lords, happily in that tone continuing with my remarks, I was about, as I said, to take your Lordships through the clauses of the Bill in lightning form, and I promise that it will be in lightning form.
Clauses 1 to 5 lay down in regard to the supply of goods the terms to be implied into non-sale transactions and make clear the circumstances in which they are to be implied. In regard to the hire of goods, Clauses 7 to 10 lay down the terms which are to be implied into contracts of hire as defined by Clause 6, and make clear again the circumstances in which they are to be implied. Part II does this in the same way for the supply of services. All these are in line, so far as possible, with the Sale of Goods Act.
I should perhaps mention at this stage that the Bill as it now stands does not include Scotland. At the Committee stage provisions were added so that it did, but at the request of the Scottish Law Officer in another place they were removed at the Report stage, much to the disappointment, if I may say so, of the Scottish Consumer Council. However, it is true that the relevant law in Scotland is different in many ways from English law, and it was thought better that their Law Commission should delve into those differences, and generally, before legislation is passed affecting Scotland.
I feel that this Bill fills a serious void in consumer law.
"Small wonder",
said The Times on 20th December 1981,
"with the need to rely upon old case law, that aggrieved customers often feel powerless to complain".
A provincial newspaper in October 1981 said:
"It is right that we all know where we stand".
I hope that your Lordships will agree with those on all sides in another place and with so many bodies outside Parliament—consumer and trade alike—that this is a good Bill, and that your Lordships will give it, as they did, a general welcome. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Mishcon.)
8.43 p.m.
Baroness Seear: My Lords, the hour is late, the list of speakers relatively long and I shall be extremely brief.

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It is easy to be brief because this Bill, as was made clear in another place, is one that commands very wide general agreement. The most remarkable thing about the Bill is that it is necessary to have it at all. The Bill relieves uncertainty, and uncertainty which a great many of us did not really know existed. It is, for me at any rate, a matter of very considerable surprise to discover as regards the Sale of Goods Act—although I suppose if one had thought about it in detail it would not be a surprise—the many exceptions as regards hire, services and so on which do not come under the same legislation already. Once that has been made clear there can surely be very little doubt that legislation to tidy up the position, to remove the uncertainty, is long overdue. Of course, by the time one has put together a contract for services, hiring and barter, all those different transactions added together cover a very considerable amount of economic activity.
While of course it is true that in common law there is protection, although it is not very clear always what that protection is, I am sure that the great mass of people like myself believed that these transactions were covered in the way in which sales were covered. Once it has been made clear that this is not so, there surely can be no argument that legislation is required to bring this kind of transaction into line with the protection that is given to ordinary sales. So one can surely only give this legislation a very general welcome.
There are one or two points that I should like to raise. It seems to me that not only is this useful and helpful to consumers—a vast group covering everybody in the community, however badly organised groups in relation to other interest groups; not only does it give them protection which is plainly needed, but it must surely also do something to improve the quality of goods and services because there is more extensive coverage requiring better quality. When one thinks how much of the trade of this country is connected with activities of this kind and how widespread are complaints—sometimes no doubt unjustified but often, as we all know and as report after report has shown, all too justified—it can only be good for the general trade of the country, for the economic position of the country generally, if steps are taken to ensure that the standards in these areas are of a higher level than they have been heretofore.
With regard to the apparently slightly controversial Part II and the question raised by my noble friend, prompted—if that is the correct word—by correspondence from the Law Society, I can only say that, listening to the noble Lord, Lord Mishcon, I was persuaded that, even if there are doubts in the minds of the learned members of the Law Society, there surely is a great deal to be said for having Part II included in the Bill. If it is the case that it is necessary for a further investigation to take place, then I am convinced —perhaps too easily, but I am convinced—that Clause 12 gives sufficient coverage to deal with any uncertainties that may arise from further examination, so that we get services, a vast and very important area, on to the statute book while taking action to see that particular cases which may need further investigation can be dealt with.
There is also the question of Scotland. Far be it from any Saxon Act to say what should go on in Scot
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land. But if it is true, as the noble Lord has said, that the Scottish Consumer Council is unhappy because Scotland is being omitted from the Bill, then would it not be possible—and I ask this with no idea of the answer—to include Scotland in the Bill, but to include also a clause saying that it will not become operative for Scotland until the Secretary of State is satisfied that the doubts that had been raised as regards certain matters connected with Scottish law had been satisfactorily dealt with? I understand that the objection is that Scottish law is different, and therefore to impose this law on to Scottish law might create certain anomalies and difficulties.
The advantage of such a course would be that any such investigation will take a certain amount of time. But we all know that getting a new Act through (which is what would be required) if we have to wait for those investigations, and then be satisfied that a law of this kind can, in fact, be introduced for Scotland, would involve a very long delay before it was made available to the Scots. Whereas if it were now included, but were not to become operative until the Secretary of State so decided, following investigations, then there need be no delay once those investigations had been undertaken. I should like to suggest that this would be worth while looking at if it is seriously considered, as I understand the Scottish Consumer Council believes, that some legislation of this kind is also required for Scotland. With that query I would very much like to give the support of these Benches to the Bill.
8.49 p.m.
Baroness Burton of Coventry: My Lords, I am glad that the Bill seems to be receiving such wholehearted support. I began on this matter very early. Towards the end of October, which seems a long time ago now, I was looking at various aspects of consumer affairs and I was studying in detail a report which was mentioned by the noble Lord, Lord Mishcon; and that was, of course, the report published by the National Consumer Council called Service Please with a subtitle Services and the Law: A Consumer View. I expect that many of us will be referring to that report tonight.
I should like to say a word or two about it because of the effect it had on my thinking. It seemed to me, so long ago as last October, a most excellent piece of work and, as any other student of consumer affairs would have done, I set to work to make detailed notes about it, having no idea that we would have any chance of discussing the points in it as soon as this in both Houses of Parliament.
I thought it was sensible and fundamental of that report to decide that a preliminary necessity was to identify the principles of existing law which cover the problem areas and which are common to all services without exception. Those who read the report will note that three main types of service problems emerged: the first was the quality of the service; the second was problems with delays; and the third was problems over cost. The writers of the report found that those three types of problems covered all categories of service.
This had a particular relevance for me because many years ago I tried to have this done by the Citizens' Advice Bureaux because I believed that if one could identify common problems surfacing throughout the

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country, then these could be studied centrally by Citizens' Advice Bureaux; they would bring real benefit to all bureaux and to the people who went to them for advice.
The National Consumer Council report, Service Please, went on to suggest that we should all benefit from that if the principles of existing law could be restated as part of an Act of Parliament. The report listed these basic principles as:

"1. A service should be carried out with reasonable care and skill:

2. The supplier should perform the service within a reasonable time;

3. The supplier should be entitled to claim only a reasonable price where no price was fixed; and

4. Where the customer is a private consumer, the supplier should not be able to avoid these provisions".

As I understand it, only the fourth point would create new law, and I think it is important to state that these proposals put forward did not change the balance of responsibility between the supplier and the consumer. It was thought in the report that the best way of doing this would be by Act of Parliament, possibly a Goods and Services Act 1982. This is what appeared in the report last October, 1981.
The more I studied the report, the more enthusiastic I became. Then, of course, on 22nd January last we had Mr. Fred Willey's Supply of Goods and Services Bill, which seemed to cover all the points raised in the report of the National Consumer Council. I hope that these few introductory remarks will help to explain my enthusiasm for the Bill, and also at the outset to convey my congratulations to the National Consumer Council for the service that I think they have rendered to every consumer.
I turn now to the Supply of Goods and Services Bill which is before us today. I hope, as both previous speakers have hoped, that we shall not only give this Bill an unopposed Second Reading, but an enthusiastic one. My noble friend Lord Mishcon, with his legal training, was able to give a legal presentation of the Bill. I would not aim to do that, but perhaps I could give a more general one for those consumers who are not legally trained.
The Bill has two objectives. The first is to implement the 1979 Report of the Law Commission on the Sale of Goods. Most important, the Bill will cover goods that are provided under work and materials contracts. My noble friend—and I am sure that he does not mind my calling him my noble friend—did mention this—
Lord Mishcon: My Lords, may I tell the noble Baroness that I am honoured, and will continue to be honoured, every time she refers to me in that way.
Baroness Burton of Coventry: My Lords, old habits die hard, even if we have moved Benches. The Bill will cover goods that are provided under work and materials contracts. Mr. Willey gave as an example that if a plumber provides and fits taps, the protection will be the same as though the taps were bought in a shop. That will cover many goods. Emphasising what I said earlier, this is not an attempt to write new law, but an effort to remove doubts and uncertainties. As the Law Commission said, uncertainty is undesir-
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able. It is especially undesirable in relation to consumer goods, and these matters are dealt with in Clauses 1 to 5.
We should note, as has been stated, that similar protection for hire transactions is provided—not hirepurchase, which has been dealt with in previous legislation. Hire transactions are outside the provisions of the Sale of Goods Act 1893 because there is no transfer of ownership. It is possession that is transferred. It is getting late and to avoid going into too much detail on Second Reading, may I just say that the problem entitled contracts for the hire of goods is contained in Clauses 6 to 10. Clause 11 deals with the exclusion of implied terms and is in support of the provisions made.
When the Bill arrived back on the Floor of another place following amendments made during the Committee stage, Part II had become the Scottish law of supply of goods. During Report and Third Reading in another place much attention was given to the Scottish aspect. Many points of considerable interest and importance were raised. I know that the noble Baroness, Lady Seear, has mentioned those and I think that they should be commented on in Second Reading, although the Bill, as now before us, does not extend to Scotland. I am particularly glad that my noble and learned friend Lord Wilson of Langside has said that he will do this. As a former Solicitor-General for Scotland and a former Lord Advocate, we obviously could not have anyone better qualified on that subject.
Part I deals with the supply of goods. Part II of the Bill deals with the provision of some statutory protection in the case of contracts for service. The first, already referred to, is the implementation of the 1979 Report of the Law Commission. Anyone who has studied the debate in another place or the Committee stage in another place will have noted the universal congratulations given to the National Consumer Council and to its report. It was recognised that Part II of the Bill that we are discussing today was inspired by this work and I would like, once more, to add my recognition. In fact, I think that we could not do better here than echo what was said by the former Minister for Consumer Affairs, Mrs. Oppenheim, at column 535 on 22nd January, when speaking of the
"excellent and widely welcomed National Consumer Council Report, Service Please".
She went on to say:
"Indeed, it seemed to be the answer to a cri-de-coeur from many thousands of consumers throughout the country".
The help given by the National Consumer Council in its study of the problem of services has been invaluable for the preparation of Part II. If accepted by Parliament, Part II of the Bill will codify for consumers the quality of service that they have a right to expect. Indeed, Mrs. Oppenheim warmly welcomed the attempt made here to codify this existing common law. She herself said that she would like to see wider codification of the common law in this field.
The Minister, as she then was, went on to speak of the problem in Clause 16 which, for Second Reading, was headed "Restriction on exclusion of implied terms". She felt that this might well prejudice what is known as the "two-tier service" system operated by many traders. Mrs. Oppenheim believed that the

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position of consumers in relation to exclusion clauses had been greatly strengthened following the proceedings on the Unfair Contract Terms Act 1977. Furthermore, the noble and learned Lord the Lord Chancellor had agreed to refer the question of services to the Law Commission, and the Law Commission would review the matters presently covered by Clause 16 of the Bill then being discussed. Upon this, Mr. Willey said that he was willing to withdraw Clause 16 at the Committee stage to allow the Law Commission inquiry to proceed, and this was done.
In conclusion, I believe that all consumers and consumer organisations will be grateful for what is before us now. Obviously it would have been more satisfactory, or easier for discussion, if the present Part II had been drafted by the Law Commission following a review by it and all the consultations with interested parties that would have been inherent in such a review. That was the problem arising from the proposed Clause 16. But for once speed was of the essence. We do not usually get a chance to have legislation through as quickly as this.
If we think back on the dates, the National Consumer Council report was published only three months before the Second Reading in another place. The Bill itself was published only 10 days before. There would have been more time for deliberation had Mr. Fred Willey not come first in the ballot and seized the initiative by selecting this Bill. We are glad that he did so, and in paying tribute to him I would like to pay tribute to the welcome and co-operation offered by the Government through Mrs Oppenheim, and of course once more to the National Consumer Council. I hope that we shall be as speedy in our House, and I also hope that having the Secretary of State for Trade among us will mean that we shall be able to bring more parliamentary weight and influence in future to the whole area of consumer affairs. I hope that everyone will welcome this Bill.
9.2 p.m.
Baroness Elliot of Harwood: My Lords, I should like to add my contribution to this debate entirely agreeing with everything that the noble Baroness, Lady Burton, has just said. I will, if I may, congratulate the noble Lord, Lord Mishcon, on the manner in which he introduced this Bill, which made it simple to understand although in some ways it is a rather complicated Bill.
This Bill is excellent reading, and it responds to so many of the problems connected with consumer needs and consumer queries. It explains the law and how it should be interpreted. It introduces clarity into complicated legal questions. I should like to add my congratulations to the National Consumer Council on the admirable document which they wrote and about which the noble Baroness, Lady Burton, has spoken, and which provides first-class and interesting reading.
If one had been in any doubt as to whether or not this Bill was necessary, there are some statistics which, notwitstanding my quite extensive experience of consumer affairs, surprised me. One of the documents points out that at 879 Citizens' Advice Bureaux in England and Wales, 4·1 million inquiries were made,
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of which 758,000 related to consumers, trade, or business matters. That surely is a good example of the kind of problems that beset a great many consumers in a great many different fields.
Although the Citizens' Advice Bureaux have trained and skilled advisers they are not necessarily lawyers. There may be many problems which are difficult to answer when legal interpretation is required. Therefore, in Part I of this Bill, which deals with contracts for the supply of goods, hire-purchase can now be explained and clarified to serve both supplier and consumer. The accounts given of the failure of contractors of any kind to fulfil their obligations are also alarming and convincing.
Another point is the cost of work rising far above the contract price, which seems to be quite normal, and consumers, uncertain of their rights, do not like to prosecute. This Bill now explains the problems so definitively that it will enable them to see whether or not they have the right, and indeed the necessity, to try to rectify some of these matters. The Bill seems to me to be in every way excellent, and it is one which I hope everyone will support.
There is one point which has been mentioned by previous speakers, and that is the reception which the Bill had in another place in connection with Scotland. As your Lordships know, I live and work there and I think know as much about Scotland as almost anybody else; and I read with interest on Friday, 2nd April, the Report stage of the Bill. I have it here in my hand. I found it most disappointing.
I am glad that we have the noble and learned Lord, Lord Wilson of Langside, speaking on this because he is one of the great experts, while I am not. Although I know that Scottish law is very different from English law, I was not convinced by the Solicitor General for Scotland arguing that this Bill could not, in its present form, apply to Scotland. He did not indicate that it would never apply, but that in order that it should apply there should be an inquiry by the Law Commission for Scotland.
I do not dispute that. This is a legal point and I have no doubt that the Procurator was quite right, but it is disappointing because all that is described in the Bill, all that is described in the reports of the Consumers' Association, apply to Scotland just as much. I am not in the least surprised that the Consumer Council for Scotland took a dim view of the reception which this Bill had from the Solicitor General. I hope that we shall be able to get round this in some way, or that the Scottish legal people will undertake to make this inquiry in time so that it can be used in, and applied to, Scotland.
I do not know whether Lady Seear's idea is possible—I was quite attracted by it—that Scotland should be included on the understanding that it does not come into effect until the Scottish legal people agree. I slightly doubt whether they would agree to that, but it is certainly an idea. I am disappointed that this Bill should not be able to be applied to Scotland, and I hope that we in this House will support the Bill as it stands, and that it will go through this House and become the law of the land; and then I hope that Scotland will see to it that it follows as quickly as possible in England's footsteps.
9.8 p.m.
Lord Wilson of Langside: My Lords, I wish to add my congratulations to those of the noble Baroness, Lady Elliot, to the noble Lord, Lord Mishcon, for his admirable presentation, and clarity of explanation, of the Bill. The only point on which I wish to touch is that of the circumstances by which Scotland came to be excluded from the terms of measure, and I ask Lord Mischon to believe me when I say that I do it with the greatest of reluctance. I say that because I am one of those peculiar Scotsmen who think that the Scots, on the whole, are at their best when in partnership with the English in terms of the Treaty of Union. I cannot speak for the other side of the partnership. I am always conscious—I was conscious of it when I was in Government and I am equally conscious of it out of Government—that if one puts a strain on that partnership, at however simple a level, that is undesirable, and the Scottish dimension is in danger of becoming a bore to the English, which is bad for the relationship.
I have told the noble and learned Lord the Lord Advocate that I would be raising this matter. I hope that the Government will look at the subject afresh and anew and will consider whether indeed they were right to exclude Scotland from the terms of the measure. I do not wish to argue that they were wrong. However, the circumstances are most unfortunate, and I hope the Secretary of State, for his interest, will look at the matter and take note of these circumstances with a view to the future where legislation of interest to both countries in the Union is involved.
I say that because, when I read the Official Report of the debates in the other place and the whole background to the exclusion of Scotland from the Bill, I could not help thinking that there was something which the sociologists, somewhat pretentiously, call "institutional malfunctioning". That is something, of course, which is always with us, like birth, death and other things. It is something which it is an important function of Government to minimise, to take note of and have regard to for the future. It is something which most of us who have been in Government have probably contributed to. I am sure the noble Lord the Secretary of State will not yet have done that, and is unlikely to do so in the future, but most of us would probably concede that we have. It is also something which results from a wide range of causes, from gross incompetence to mere human inadvertence, sometimes even bad luck. It is also something the consequences of which cover an equally wide range.
I say all that because the short point I wish to make—there is, I believe, great validity in it—is that the functioning of the machinery of Government in relation to Scotland's place in this Bill was somewhat less than adequate. The report on which the Bill is based was printed by order of the House of Commons in July 1979. I do not know when the Law Commission started work on it, but certainly they were at work on it in the middle of 1977, over five years ago. It was not a joint report, as some of the reports of the Law Commission have been, and I make no complaint about that. There were good reasons for that.
I am as jealous as anyone of the independence of the Scottish system, but the point is that there are many areas where it is undesirable that the provisions of the law in the two countries should be out of step. I
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should have thought—and I do not think that the Government dispute it—that the area of the law concerned with consumer protection was one such area.
Surely common sense requires that, quite apart from those areas where joint reports of the two Law Commissions are undertaken, the Scottish Law Commission should keep under review the programme of the other Law Commission, in order to avoid the danger of the law in two countries of the Union getting out of step, where that is contrary to common sense, or is damaging to matters of importance, matters of public policy.
But, of course, it is not the Scottish Law Commission's job to see that that kind of situation is avoided; it is the Government's job, and they, too, should be alert to the need for it. I ask the noble Lord the Minister whether any time before or after 1979 the Government and the Scottish Law Commission took note of the possibility that, in view of the report on which the English Commission was embarked, the law would get out of step? Whether they did or not, in January 1980—and, after all, that was two and a half years ago—the Scottish Consumer Council wrote to the Scottish Law Commission pointing to the report and asking whether they would review the position and consider whether legislation for Scotland would be appropriate. The reply was to the effect that they could not give the matter priority because it would make too great a demand on their resources.
It is some years since I was involved in such matters, so I speak with a certain reservation, and I might be wrong, but frankly, as a former Lord Advocate and a former civil servant who was responsible for the department which was answerable for the Scottish Law Commission, I am a little sceptical about the plea regarding lack of resources. As for priority, since the letter was written more than two and a half years ago, I find it quite irrelevant to the circumstances of today.
In any event, Scotland has been excluded from the Bill on the ground that a more considered review of the law by the Law Commission is essential. I might concede that this may be so today; I cannot be absolutely sure; the position is quite complex, and I have no resources other than my own on which to depend. But I would ask the Government to look at this matter again and consider whether they are right, and consider, too, what the noble Baroness, Lady Seear, said. I would ask the Government in particular to consider the letter, dated 29th April 1982, which the chairman of the Scottish Consumer Council wrote to the Solicitor General for Scotland, who in the other place had justified the Government's stand. I find it a most impressive and forceful letter. It might be that it is too late to overcome the damage that has been done, but I venture to hope that someone will point out to the Scottish Law Commission—because it is not for them to decide how the law should be reformed; it is for the Government to decide—that these are matters that they should try to anticipate. But, in any event, I think that the Government should anticipate them, and I leave the matter there.
9.19 p.m.
Lord Young of Dartington: My Lords, I should like to follow other noble Lords in thanking Mr. Willey for introducing the Bill in the first place and the noble

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Lord, Lord Mishcon, for the skill with which he has presented it this evening. I should like also, if I may, to couple with both of them the name of someone not so well known, Rosemary Delbridge, who was mentioned by several speakers in the other place. After leaving the Consumers' Association, she joined the staff of the National Consumer Council, and was indeed one of the first members of the staff of that council when I was the chairman. Intelligent, humane, humorous and attractive, she was also a doughty campaigner and lobbyist for this Bill, and saw it launched, and well launched, before, most unfortunately and tragically, she died at the early age of 32. One of the many reasons why I shall be glad if this Bill gets on to the statute book is that in its own way it will be a memorial to the work of a rather remarkable young person.
An excellent case has already been made out for this Bill, and I do not want to go over that ground again, especially in view of the time. But I would, if I may, like to broaden the context in order to explain why it is that the consumer movement is so deeply in support of this Bill, and would be in support of any further measures that may be taken along the same lines, only more ambitiously, in the future. The fact is that as far as services are concerned—I am referring particularly to Part II of this Bill—the field of concern is continually expanding, and this for three reasons.
The first reason is that the size of the service sector is expanding all the time. It is expanding in this country, and has done so and is doing so in all industrialised countries. As people's incomes increase the proportion going on services increases and the proportion going on goods relatively decreases—a fact first pointed out in a classic work of economics by Colin Clarke as long ago as, I think, 1941—and partly because of this the service sector is bound to baulk larger in the concern of consumers.
The second reason is that consumers can so much more readily be "done down" over services than they can over goods. They can more easily be kept ignorant about what it is that is being supplied to them. It is much more difficult for them to find out, for instance in the case of repairs, whether the work in question has been well and responsibly done. How is the consumer to know (as the report which has been mentioned several times this evening says in very forceful terms) whether his car or the complex piece of equipment which has been repaired has in fact been properly repaired in his interests? In view of this, it is not at all surprising that the statistics (referred to, again, by other noble Lords before me) collected by the Office of Fair Trading should show how enormous are the numbers of consumer complaints about services—about their quality, about the delays and about the excessive cost.
The third reason is that it has been, and still is, more difficult for the law to give consumers protection against unscrupulous traders and tradesmen, or pseudo-tradesmen—people who pass themselves off as tradesmen when in fact they have not the necessary qualifications. But at any rate in this Bill we have a modest but useful contribution to strengthening the law by means of codification which will increase the certainty of the law, the clarity, the ease of reference and the intelligibility of the law, all of which is so
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important to consumers. There is clearly a great deal more to do, and we can all hope that when the Law Commission has reported again there will be further and, we could hope, much more ambitious legislation to follow up this particular Willey Bill.
The only point of controversy, I think, is about the question raised by the noble and learned Lord, Lord Wilson of Langside, and that concerns Scotland. He spoke about it with authority. I want only to add to what he said by underlining one particular point, and that is the advantage of having a uniform body of commercial law in the two countries unless there is strong reason to the contrary. There may be two nations and there are certainly two systems of law, but there is one economy. That being so, consumers in Scotland, unless there are very strong reasons to the contrary, should not be deprived of the degree of protection given to consumers in England.
Moreover, the Sale of Goods Act 1979, which was the direct progenitor of the Bill before us, was applied to the whole country. Scotland was not excepted. In my view, as in the view powerfully put by the Scottish Consumer Council, this successor Bill should be applied to the whole country. I hope that the Government will be persuaded of this, will be prepared to look anew at this question of Scotland and will be prepared to have Scotland reinserted in the Bill as one of the territories to which this new law is going to apply.
9.28 p.m.
Lord Drumalbyn: My Lords, I have not put down my name to speak, but there is one matter to which I should like to refer and which I was confident would be referred to in the course of the debate. I should like to make brief mention of it, but before I do so, I might say that it would seem almost appropriate that as I am the only person present today, apart from one other, who has not made a speech, I should say a word at this stage. I should like to congratulate the noble Lord, Lord Mishcon, very greatly on the manner in which he has introduced this Bill. He always does things so suavely and acceptably that he has added lustre to what already was a very promising Bill.
The point that I wish to refer to I think I can most easily put to the House by quoting directly from the National Consumer Council's excellent paper called Service Please, at the bottom of page 31. It is talking about the exclusion clauses and says:
"We have argued that these obligations should attach to a supplier whether or not the customer is a private consumer. In one respect in relation to the exclusion clauses, we are convinced that something slightly more than codification is required. Accordingly, we have further recommended that the Unfair Contracts Terms Act 1977 be amended to prohibit the exclusion of the supplier's obligation to perform his services with reasonable care and skill where the services are supplied to a private consumer".
As I understand it, Clause 16 in the Bill—which deals with the possibility of varying or negativing a right, duty or liability arising under a contract for the supply of a service—does not seem to reflect the recommendation of the National Consumer Council. I would only like to ask, if my noble friend would refer to this matter, whether he can briefly indicate why it does not reflect that recommendation of the NCC, and to draw attention to the possibility that we might

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well discuss it at greater length on the next stage of the Bill.
May I add also a quick reference to the last subsection of that clause which says:
"This Part of this Act has effect to any other enactment which defines or restricts the rights, duties or liabilities arising in connection with a service of any description".
It seems to me that there are quite a number of such provisions in nationalisation Acts and in the practices of nationalised boards, including British Railways, where a great many exclusions of that sort or limitations and restrictions arise either in the statute law itself as it now exists at present or else in orders and regulations made under that law. Can it be that this refers to regulations and orders as well as to the principal enactment? If so, will this not be something worth discussing also? I hope I have not detained your Lordships too long. I thought it right to raise what seems to me to be an important matter.
9.32 p.m.
Lord Ponsonby of Shulbrede: My Lords, my noble friend Lord Mishcon, in moving the Second Reading of this Bill most eloquently, told your Lordships of its purpose. I do not think it necessary for me to repeat what he said. As the noble Baroness, Lady Seear, said, it is surprising that Part I of the Bill concerning the supply of goods should be necessary at all. This Bill has enjoyed widespread support from all sides of the House and from a multiplicity of organisations, as has been mentioned: the National Consumer Council, the Consumers' Association, the Scottish Consumer Council, the Welsh Consumer Council, the National Federation of Consumer Groups, the Citizens' Advice Bureaux and the Institute of Trading Standards Administration. It has now been blessed by the noble Lord, Lord Young of Dartington, who can be regarded as the father of the consumer movement.
The basic purpose of the Bill is to clarify the law as it exists between the supplier of goods and services and the receiver of those goods and services. It should succeed in its purpose so far as the supply of goods is concerned, but we must acknowledge that, so far as it applies to services, it is only a step in the right direction. As we have been told this evening, the Law Commission is, as my noble friend reminded us, undertaking a more comprehensive reform of the law than that attempted by this Bill.
It is an area of great concern to consumers and tends, after housing and social security problems, to be the largest area of concern voiced by those seeking advice from the Citizens' Advice Bureaux. It is also an area of concern to the EEC, who I know are hoping to carry out research in this particular field.
The solution which the Bill adopts is the term of reasonableness. Services should be provided with reasonable care and skill in a reasonable time and at a reasonable charge. The National Consumer Council takes the view that most cases will be black or white and there will be little doubt about reasonableness. But, of course, it will be up to the courts to decide whether a service which has been provided has been provided in a reasonable way. An individual consumer may feel that a charge of £40 for a five-minute job repairing an electrical appliance is unreasonable. On investigation it may be found to be quite reasonable, but will
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the consumer accept that such a charge is reasonable?
I accept the difficulty of laying down a more definite standard other than that of referring to industry codes of practice; but I do believe that the Bill as it stands is an important step forward and one to which your Lordships should give a Second Reading this evening. I hope that the noble Lord in his reply will look at the question of whether it should also apply to Scotland, as a number of noble Lords have suggested.
9.36 p.m.
The Secretary of State for Trade (Lord Cockfield): My Lords, may I first of all express my great appreciation of the very kind remarks which the noble Lord, Lord Mishcon, made about me in the introductory part of his speech? I am quite sure that what he said is not covered by the maxim, "timeo Danaos et dona ferentes".
This is an important Bill; it has been widely welcomed on all sides of the House, and the Government join in the general welcome. It is of course, as the noble Lord, Lord Mishcon, has said, a Private Member's Bill, and the responsibility for securing its passage rests primarily with its sponsors, although, if I may be forgiven for saying so, with so powerful and persuasive an advocate as the noble Lord, Lord Mishcon, in charge of the Bill, support by the Government would seem hardly necessary.
The noble Baroness, Lady Seear, made the point that the provisions of the Bill would encourage improvements in the quality of goods and services. This is an attractive and important argument. My noble friend Lady Elliot of Harwood quoted the experience of the Citizens' Advice Bureaux and stressed how important it was that the law should be understandable by the people. Part I of the Bill and indeed much of Part III closely follow the draft Bill prepared by the Law Commission and attached to their report on Implied Terms in Contracts for the Supply of Goods. This Law Commission report, like its predecessors, was based on wide consultation and detailed study of the existing law.
Nevertheless, despite the general support, a number of criticisms have been made of specific parts, and I will return to those in more detail later. I do need to emphasise that the onus of satisfying the critics rests not so much with the Government as with the sponsors of the Bill. I am sure that they will do all in their power to secure a unanimity of approach on these matters.
I should like at this stage, if I may, to pay tribute to the work of the Law Commission in the field of the law relating to the sale of goods and related sectors. The increasing imbalance which has emerged over the years between traders on the one hand and individual consumers on the other was upsetting the balance originally established by the Sale of Goods Act 1893. The Law Commission has undertaken a series of detailed studies in this field, as a result of which three new Acts have reached the Statute Book over the last 10 years, each of them seeking to clarify or strengthen the existing law in a particular part of the field. The first of these, the Supply of Goods (Implied Terms) Act 1973, dealt with an abuse which was developing, under which consumers were deprived of their basic rights by "small print". It provided that, when buying goods or

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acquiring them by hire purchase, consumers could not be deprived of the benefit of the implied terms about title, merchantability, fitness for purpose and being true to description.
The Unfair Contract Terms Act 1977 dealt with two separate problems. First, it provided additional protection for consumers who acquired goods other than by purchase or hire-purchase, by providing that they could not be deprived of the benefit of any terms implied by common law that goods were merchantable, fit for their purpose or true to a description applied to them. Secondly, it sought to deal with traders who had been escaping liability for negligence as a result of small print in contracts. It prevented traders from escaping liability for death or injury arising from negligence, and allowed them to exclude liability for other negligence only if they could show that such an exclusion was reasonable. The Sale of Goods Act 1979 consolidated the 1893 Act and the subsequent amendments. Although it did not add to the law, it provided a clear statement of the existing law in a single document.
Part I of the present Bill is therefore the fourth piece of legislation in this field for which we are indebted to the Law Commission. It carries forward the work of the 1977 Act by defining the terms which are implied by law in contracts for the transfer or hire of goods (other than contracts of sale or hire-purchase). The Law Commission found that the terms implied by common law in such contracts were close to, but not exactly the same as, the terms prescribed by the Sale of Goods Act. They propose that these should be set out in clear simple terms. Once the Bill is in force, consumers who enter such contracts will have the same rights set out in the same clear statutory terms as those who buy goods in normal straightforward transactions. Indeed, the consumer who hires goods will have the additional right to enjoy what the lawyers call "quiet possession of the goods". The 1977 Act ensures that a consumer cannot be deprived of the benefit of these implied terms. It is a tribute to the thoroughness of the Law Commission's study that few anxieties have been expressed about Part I of the Bill.
Part II deals with a different sector and has a different origin. It stems from the National Consumer Council's report Service Please, which was published last October. This clearly identified the problems which consumers faced when services proved unsatisfactory. It urged that the existing common law on services should be codified in a statute. It suggested, therefore, that the Government should ask the Law Commission to study the law on services. In the meantime, pending that study, it suggested that three terms should be implied by statute into contracts for services, unless the parties agree to the contrary.
The Government accept that the present position is unsatisfactory. My noble and learned friend the Lord Chancellor has therefore agreed to ask the Law Commission to study the law on services. Meanwhile, the sponsors of this Bill suggest that, in general, and unless the parties agree to the contrary, there should be implied terms that a person providing services will do so with reasonable care and skill, do so within a reasonable time and be entitled to make a reasonable charge.
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Part II of the Bill is intended to codify the existing common law. I am sure your Lordships will appreciate that the Government would not wish to impose new obligations on important sectors of the service industry without full and proper consideration.
It is clear from what has been said this evening that some noble Lords believe that the Bill would impose new obligations on important sectors of the service industry. The noble Lord, Lord Lloyd of Kilgerran, in an intervention, referred in particular to the representations made by the Law Society. The noble Baroness, Lady Seear, touched on the same point. I hope that the sponsors of the Bill will give very careful consideration to the points which have been raised and will consider whether these make it necessary or desirable to amend the Bill in any way.
The Government will naturally also consider the points which have been made during the debate. I should, however, at this stage like to give some reassurance to those who have expressed anxiety about the problems which particular service industries would face if the Bill were enacted in its present form. I should not make an order bringing Part II into effect until there had been a reasonable opportunity for service industries to study the position and draw my attention to problems which they would face. If a case could be established on a full examination of the facts that the Bill would impose new obligations on a particular sector, I should be prepared to consider using my power under Clause 12 to exclude those services from those provisions of the Bill. I hope this statement will give reassurance to people who have expressed concern regarding a number of these points.
The noble Baroness, Lady Seear, raised the question of the application—or perhaps I ought to say the nonapplication—of the Bill to Scotland. The same point was made by the noble Baroness, Lady Burton of Coventry, by my noble friend Lady Elliot of Harwood, by the noble Lord, Lord Wilson of Langside, and by the noble Lord, Lord Young of Dartington. The application of the Bill to Scotland was opposed in another place essentially because it was considered that it was inappropriate to legislate in relation to the supply of goods in Scotland until there had been separate consideration of this area of law by the Scottish Law Commission. The provisions relating to the supply of goods which apply in England and Wales are, of course, based on the recommendations of the Law Commission, made after widespread consultation. An examination of the law on the buyers' remedies and the standard of quality and fitness in contracts of sale has been started by the Scottish Law Commission.
The law in Scotland, as has been said, is significantly different from what it is in England. There are obvious dangers in trying to apply what is suitable for one jurisdiction to the other without due and full consideration. Similar arguments apply to the supply of services. Indeed, the legal position is even more uncertain, and I understand that the Scottish Law Officers and, indeed, most informed legal opinion in Scotland take the view that legislation on the supply of services for Scotland would be both risky and premature. I am sure, however, that my noble and learned friend the Lord Advocate will consider the suggestions of the noble Lord, Lord Wilson of Langside, in the light of priorities which my noble and learned friend

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and the Scottish Law Commission need to set for their future work.
My noble friend Lord Drumalbyn raised the question of Clause 16, which was deleted in Committee in the other place. This was done because it would have prevented traders from offering a two-tier service. It was agreed to leave it to the Law Commission to consider whether such an important change in the law was desirable.
Having dealt with these particular points, perhaps I may say in conclusion that even those who have expressed reservations on particular aspects of the Bill nevertheless clearly welcome the Bill as a whole. I welcome it on the same basis and in the same spirit. I hope that the House will give it a Second Reading.
Lord Mishcon: My Lords, I ask your Lordships to give this Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.