Lords Sitting of 6 May 1982

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Portsmouth): The LORD CHANCELLOR on the Woolsack.

The Construction Industry: Stimulus
Lord Gainford: 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 measures they are taking to stimulate activity in the construction industry.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, we have taken a great number of measures to assist the construction industry, particularly in the fields of planning, land, taxation and low cost home ownership, and in his Budget statement on 9th March, which was well received by the industry, my right honourable and learned friend the Chancellor of the Exchequer announced a £240 million package of measures specifically aimed at stimulating construction activity. Those included an extra £100 million for home improvement grants and home insulation, a substantial increase in the level of stamp duty thresholds, and a brand new capital allowance for houses built under the assured tenancies scheme. He also announced on that occasion the Government's plans to spend £10·3 billion on construction in the public sector in 1982–83, which represents a 14 per cent. cash increase on what was spent last year.
Lord Gainford: My Lords, I thank my noble friend for that very encouraging reply. Is he able to give any information on the figures of housing starts, which I understand are being published today?
Lord Bellwin: My Lords, in the first quarter of 1982, total starts, on a seasonally adjusted basis, were up 45 per cent. on the fourth quarter of 1981 and 33 per cent. higher than the first quarter of 1981. In the public sector, making similar comparisons, starts were up 40 per cent. on the previous quarter and 67 per cent. higher than a year ago. Private sector starts were up 47 per cent. on the previous quarter and 24 per cent. higher than a year earlier. I hope my noble friend and the House will be as pleased with that news as I am.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that the greatest stimulant would be a reduction of interest rates? Is he further aware that if some of the schemes, which sounded very attractive as he presented them, have the effect of increasing inflation and not encouraging a reduction of interest rates, that might have the opposite effect? The priority should be that if we want to stimulate the construction industry or indeed any other industry.
Lord Bellwin: My Lords, a key part of the thrust of Government policies is indeed towards seeing that interest rates come down, so I certainly take the point my noble friend makes.
Lord Cledwyn of Penrhos: While welcoming that information, my Lords, may I ask whether the Minister can confirm that the starts are evenly spread throughout the country? Can he give the House an estimate of the additional number of men who will be employed in the building industry as a result of the acceleration in building?
Lord Bellwin: I do not have those details today, my Lords—the statement has only just been released—but I gladly undertake to obtain it and write to the noble Lord. As for the way in which it is spread throughout the country, again, it is hard to say. I am not sure whether that information will be so readily available but I shall endeavour to ascertain it and send it to the noble Lord.
Lord Cledwyn of Penrhos: My Lords, the Minister will agree that that information is important. Does he agree that it is vital that there should be an even spread, otherwise the increases in building are likely to be in the more prosperous parts of the country, whereas those areas which really need new housing and jobs will not be able to benefit?
Lord Bellwin: Yes, my Lords, and I would in no way quarrel with that. It is just a question of my getting the information so that I am able to give it to the noble Lord, and that I undertake to do.
Lord Orr-Ewing: My Lords, would my noble friend make arrangements to appear on television to give that excellent news on a very special day for most voters?
Lord Bellwin: I fear that that is not within my gift to do, my Lords.
Baroness David: My Lords, may I ask the Minister whether, in the statement, are given the number of houses as well as the percentage increase? If, for example, it is twice as many as one, it does not make all that much difference.
Lord Bellwin: The noble Baroness makes a fair point, my Lords, and of course the numbers are important. Any information which is not in the statement would readily be available to her if she wished to press for it.
Viscount Eccles: My Lords, could the Minister give any information about do-it-yourself building? Is that increasing and do the Government favour it?
Lord Bellwin: My Lords, I touched on that when answering a Question yesterday. I assume by his supplementary that my noble friend is referring to homesteading. We are doing everything we can to encourage it. There are some encouraging signs and I hope that all local authorities—because it is, after all, they who have to make the decisions about it—will

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look at some of the houses that are empty and require work of that kind and will perhaps make them available, on any kind of price basis, to people who are willing to do what my noble friend calls do-it-yourself building: "homesteading" is the term we use and we want very much to encourage it.
Lord Bowden: My Lords, as there are nearly half a million unemployed workers in the structural and civil engineering industry, may I ask whether the figures which the Minister gave for total expenditure have made appropriate allowance for the savings which would flow were those people no longer on the dole but properly in work? It seems to me that if the figures were so adjusted, they would dramatically decline. Secondly, the Minister will recall the last time I discussed in this House the question of the main sewage system, in fact the whole infrastructure, of the city of Manchester, which is fast decaying. He may recall that when I told him of the enormous expense, he said it was a mind-boggling situation. Does he not realise that to the average motorist—
Several noble Lords: Speech!
Lord Bowden: I was about to ask the noble Lord—
Several noble Lords: Order!
The Lord Privy Seal (Baroness Young): My Lords, would the noble Lord be good enough to ask a question and not make a short statement about a former speech of his?
Lord Bowden: I was just coming to the question, my Lords. Does the noble Lord realise that to the average motorist the thought that the Minister's mind has been boggled is, of itself, of no very great importance?
Lord Bellwin: My Lords, I can make no comment on what motorists think of my statements. I understand very much what the noble Lord is saying and his concern, which we share. In fact, we are specifically making available a figure of, coincidentally, some £240 million, for the kind of work to which he referred, because there is undoubtedly a problem in terms of what is under the surface as well as what is above it. As to his point about workers on the dole perhaps doing some of the work, I understand the short-term attraction of the option, but the fact is that the average wage of a construction worker is, as he will know, substantially higher than the level of unemployment benefit, and the difference becomes even greater when non-wage factors are brought into account. Thus, the extra borrowing that would then be involved would, in the longer term, lead to higher inflation, higher interest rates and higher taxes, and that is a direction away from which we want to go.
Lord Glenamara: My Lords, is the Minister aware that we are delighted with the increase he has announced today but that a 40 per cent. increase on the lowest levels for over 60 years is still not very much to crow about?
Lord Bellwin: I did not make the statement in order to crow, my Lords, but in response to a question that was put to me. What the noble Lord says is correct, but I am sure that he, too, will be as pleased as I am that there has been an upward trend of some significance.

Housebuilding: Publicly-owned Land
3.9 p.m.
Baroness Trumpington: 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 they have done to encourage the release of publicly-owned land for private housebuilding.
Lord Bellwin: My Lords, the Government have taken several initiatives in this field. First, they have introduced in England registers of publicly-owned unused and underused land more than one acre in size. Those now cover 350 districts in which has been identified a total acreage of over 83,000. Many sites are suitable for housing development. Secondly, at the Government's instance, the House Builders' Federation have made regional presentations to local authorities on low-cost starter homes with a view to getting land released for low-cost housing in partnership ventures. In structure plans, the aim is to provide for a five-year supply of land that is genuinely available.
Baroness Trumpington: My Lords, in thanking my noble friend the Minister for his very informative reply, may I ask him how much land has been sold and how much remains on the registers, since the registers' introduction?
Lord Bellwin: My Lords, within the first 35 authorities with land registers, over 3,000 acres of land have been identified for housebuilding, and I understand that so far 700 acres have been disposed of, albeit for a variety of purposes. The other registers have been published only recently: 270 on the 1st April, and 45 last Tuesday, 4th May. So we shall have to wait and see what is forthcoming.
Baroness Fisher of Rednall: My Lords, is the Minister satisfied that the new derelict land regulations are not hindering those local authorities which are looking very seriously at derelict industrial land to develop, but feel that they are hampered by the regulations? Is this not in opposition to the Government's policy of trying to get the land on the market for potential housebuilders?
Lord Bellwin: My Lords, I am not aware of the problem to which the noble Baroness refers, and I should be very glad to discuss it with her later. We are in fact making available £45 million—I think that is the figure—for derelict land grant this year, and that is the highest such figure ever. We are extremely anxious to ensure that it is spent, since in the past amounts intended for the purpose have not always been spent. We will gladly work together with

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authorities who want to bring forth land that can be brought back into use.
Lord Wallace of Coslany: My Lords, will the noble Lord please advise the House whether he will persuade local authorities not to increase allotment rents to such a level that plot-holders are forced out, in order that the council can sell the land for housing? Secondly, since so much land is available, will the Minister encourage local authorities to acquire it for allotment gardens and gardening activity generally? This is an activity which, with all due respect to the House, I would suggest would he good for the health of noble Lords.
Lord Bellwin: My Lords, I am well aware of the interest of the noble Lord, Lord Wallace of Coslany, in allotments, and I am quite sure that he knows a darned sight more about them than I do. On this point I would say only that I should not have thought that authorities were at all short of land, and the information coming from the registers supports that view. Whether or not authorities wish to make land available for allotments is for them to decide. I am sure that they will all read carefully what noble Lords have said today.
Lord Taylor of Gryfe: My Lords, in view of the rather small, limited amount of land that is disclosed in the registers, is it the intention of the Minister to provide a local authority register of privately-held land which might be suitable for development?
Lord Bellwin: My Lords, I should have thought that the amount of land to which I have been referring—83,000 acres—was anything but small. I should have thought that your Lordships would have considered that to be an enormous amount; I certainly do. The great "trick" (if I may use the word) is to see how we can bring it back into use, whereas hitherto it has not been used. If we were to achieve that even in part, it would make an enormous difference throughout the whole country. I rather feel that that puts into perspective the point that the noble Lord makes about the private sector. If we can get the public sector right, everything will flow.

The Middle East: Peace Settlement Negotiations
3.14 p.m.
Lord Chelwood: 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, now that the Camp David process is exhausted, they will take the lead in the European Community aimed at a joint initiative with the United States to achieve Israeli security and recognition by her Arab neighbours within the pre-1967 armistice lines, as well as Palestinian self-determination.
Lord Skelmersdale: My Lords, while the Israeli withdrawal from Sinai has been successfully completed,
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the autonomy talks based on the Camp David Agreements continue. The United States clearly have an important role to play in the next stage of the search for peace. We and our partners in the Ten are ready to work with the United States, and all the parties concerned, towards a comprehensive settlement, which we believe should be founded on the Venice principles.
Lord Chelwood: My Lords, has my noble friend had an opportunity to study two interesting American reports recently produced? I refer, first, to The Path to Peace, whose four signatories include Mr. Philip Klutznik, President Emeritus of the World Jewish Congress, which flatly stated that until the Palestinian right to statehood has been fairly faced there is no prospect of peace. Secondly an equally important report, which reached similar conclusions, was written by Senator Charles Percy, the chairman of the Senate Foreign Relations Committee, who, after visiting 14 Arab countries, including Syria—and of course going to Israel—found a widespread willingness to recognise Israel's right to exist behind secure and recognised borders, which in his opinion would have to exclude all land occupied or annexed in 1967, or since then.
Lord Skelmersdale: My Lords, I must confess that I have not seen in the flesh the two reports to which my noble friend refers. However I have read synopses of both of them, and in the main the Government agree with them, with of course the everlasting proviso that both sides recognise one another in this dispute.
Baroness Llewelyn-Davies of Hastoe: My Lords, is the noble Lord aware that the House will very much welcome his statement that Camp David is not exhausted and that negotiations are proceeding between Egypt and Israel about Palestinian autonomy? Is the noble Lord also aware that in all parts of the House there will be great sadness that this particular subject should be discussed on the day, and at the time, of the funeral of Lord Janner, who contributed so much to our knowledge of the Middle East?
Lord Skelmersdale: Yes, my Lords, we on these Benches would certainly like to echo the sentiments of the noble Baroness opposite. For my part I find it very strange to be discussing this subject without the benefit of the noble Lord's advice.
Baroness Gaitskell: My Lords, is the Minister aware that the Camp David agreement is not exhausted and that negotiations are continuing between Israel and Egypt regarding Palestinian autonomy? In fact, the negotiations that are going on are very healthy and very strong.
Lord Skelmersdale: My Lords, I am sorry if I have been misunderstood. I did not mean to give the impression that Camp David was not continuing. It is by no means finished, it is still going on.
Lord Paget of Northampton: My Lords, is the noble Lord aware that we are not any longer a Middle Eastern power, that the European Community are not any longer a Middle Eastern power, and that

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we shall earn the gratitude of the Middle East and of our American ally if we mind our own business and leave them to mind theirs?
Lord Skelmersdale: I would not agree with that, my Lords.
Lord Mayhew: My Lords, is the noble Lord aware that the Camp David autonomy talks have been going on for several years and that no progress whatever has been made? Is he also aware that the Foreign Ministers of the Community will be meeting this weekend to discuss the report of their president on his return from a visit to the Middle East? Will he give the House the assurance that the British Government will take an initiative, so that peace can be achieved in the Middle East?
Lord Skelmersdale: My Lords, as I think I have already made clear, we and the Ten stick very firmly to the Venice principles, and fresh ideas from all the parties concerned are, I would agree, now needed if progress is to be made towards a comprehensive peace settlement. We and our European partners are ready to play our part in this, and we keep our policy constantly under review in the light of developments. However, as I said at the beginning of the Question, we continue to believe that the principles of the Venice declaration provide the best option at the moment.
Lord Molloy: My Lords, bearing in mind the remarks of my noble friend on the Front Bench, is the noble Lord aware that in all the lands of the Middle East that are involved there are very many people who would welcome, and indeed support, the submission made in his supplementary question by the noble Lord, Lord Chelwood? If we can get this point on the agenda for talks between the Government and the EEC, and if the endeavours of all people who think along these lines, in all the countries involved, and in Europe, can be combined, that would help us to move towards the ultimate achievement, which is peace for all in the Middle East.
Lord Skelmersdale: Yes, my Lords, I would agree with that, but of course the great problem is that politics and people all over the world do not necessarily go together.
The Earl of Onslow: My Lords, could my noble friend give some encouragement to a revival of the Prince Fahad proposals? It appears possible that they could be revised and that seems to me an implicit recognition by the Arab side of the State of Israel provided that Israel, in turn, recognises some rights of the Palestinians.
Lord Skelmersdale: My Lords, yes. We are delighted that the Fahad principles ever came about. As a Government, we are very pleased that diplomatic activity should come from the area concerned; and this is right. I would say to my noble friend that any reconvening of, for example, the Fahad Conference is a matter for the Arab States themselves.
Lord Brockway: My Lords, would not the noble Lord agree that, while we have had our minds on the Falkland Islands, serious dangers to peace have arisen in the Middle East? While welcoming any action by the European Community to secure the double object of security for the Israel frontiers and self-determination for the Palestinian people, would the Government now consider whether it is not desirable to recall an international conference on this subject where world pressure, both West and East, could be exerted to reach a solution on these lines?
Lord Skelmersdale: My Lords, I am not sure that the time is yet ripe to call a world conference in the conditions the world is in at the moment. I will take advice on the point raised by the noble Lord.
Baroness Gaitskell: My Lords, is the Minister aware that under Article A.I, Israel, Jordan and the representatives of the Palestinian people should participate in negotiations on the resolution of the Palestinian problem in all its aspects? The current negotiations between Israel and Egypt are clearly in line with this arrangement and are aimed at negotiating the details. Is the noble Lord aware that these negotiations—
Several noble Lords: Reading!
Baroness Gaitskell: My Lords, am I going to be allowed to speak at all?
Lord Peart: Carry on.
Baroness Gaitskell: The current negotiations between Israel and Egypt are clearly in line with the arrangement and are aimed at negotiating the details for a transitional arrangement on the West Bank for a period not exceeding five years.
Lord Skelmersdale: Yes, my Lords, I am aware of that; but I think the noble Baroness has come to rather greater conclusions than the facts warrant in this matter.

The Barrowmore Village Settlement Hospital
3.24 p.m.
Lord Mowbray and Stourton: 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 are their plans with regard to the disposal of the 170-bed hospital in the Barrowmore Village Settlement near Chester.
Lord Cullen of Ashbourne: My Lords, this hospital will be surplus to NHS requirements following the opening of a new hospital in Chester later this year. The normal rules governing disposal of surplus NHS land would require that the property is disposed of on the open market for the highest possible price. However, we are conscious of the Barrowmore Village Settlement's historic interest in the hospital and my

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officials will be meeting the trustees shortly to discuss the situation.
Lord Mowbray and Stourton: My Lords, I thank the noble Lord for his reply. Does the noble Lord appreciate the fact that this hospital was built by a small charity, the Barrowmore Village Trust, with help from the Order of St. John and the Red Cross and that they had it removed from them without compensation in 1948 and that now, because it is not wanted, they are being asked to buy it back at an inflated price? Does this not leave the noble Lord with an ugly taste in his mouth?
Lord Cullen of Ashbourne: My Lords, that was a surprising finish to the supplementary question. I do not feel that I have a bad taste in the mouth nor, I hope, an ugly one. It is true that this hospital was taken over without compensation by the NHS under the 1946 Act, but this Government were not responsible for that Act which applied to a very great many hospitals, either taken from local authorities or from charities. As I have said, we are aware of the historic interest of the Barrowmore settlement in this hospital.
Lord Wells-Pestell: My Lords, is it not true that there is an agreed procedure which must be followed in matters of this kind as outlined by the noble Lord? Is it not desirable that we should keep to those procedures; for, otherwise, if we are going to make an exception in one case, we may have to make exceptions in others?
Lord Cullen of Ashbourne: My Lords, the noble Lord is right. If it is not possible for the Government to sell surplus properties after more modern hospitals have been built, that would very much inhibit the growth of the National Health Service—which we support as well as does any party.
Baroness Hylton-Foster: My Lords, is the noble Lord aware that it was the funds of the joint committee of St. John and the Red Cross and that they used their capital to rebuild and extend the hospital which was knocked down by a land mine in 1940? Is he further aware that they now need those buildings for sheltered workshops and to expand the craft employment which is now being done there in collaboration with the local authority? Would the Minister agree that the Government save a great deal of money when voluntary organisations work for the disabled and do work which otherwise the Government would have to do and to pay for?
Lord Cullen of Ashbourne: Yes, my Lords, I am aware of the background and the money spent by the settlement in repairing the hospital in 1943. We, too, are very much in favour of the development of this craft village. My right honourable friend has a duty to try to get the full market value for any properties which become surplus. The valuation placed on this property for use as a private hospital or an educational establishment is £500,000. It may be that we will not succeed in getting that sum. In that case we shall be pleased to have further discussions with the settlement with a view to making some concessionary arrangements.
Lord Elwyn-Jones: My Lords, in view of the proposed use of these premises as sheltered workshops and for craft employment—which is a valuable public service at this time—should not that weigh heavily in the negotiations by way of effecting a considerable reduction in what is asked for in respect of this property, which was originally purchased with the charitable funds of the Barrowmore Village Settlement, with the help of the Red Cross and St. John? Surely there is room for a most generous approach to this matter?
Lord Cullen of Ashbourne: My Lords, the noble and learned Lord always has a persuasive way of making his point. I am sure that he would be the first to agree that, if this £500,000 could be obtained, it would be extremely valuable in enabling the local regional health authority to deal with many matters with which they should like to press forward for the benefit of NHS patients.
Lord Paget of Northampton: My Lords, but surely when the National Health Service took this over without compensation it was under an implied obligation to use what it took over without compensation for National Health purposes—that is, a hospital? If it ceases to do so, surely it is under a moral obligation to hand it back to somebody who will use it for health purposes as a hospital? To do otherwise is dishonest.
Lord Cullen of Ashbourne: My Lords, the reason why the hospital is being closed—there has been virtually no local opposition to its closure—is because a larger, more modern hospital is being built in Chester at a cost of over£11 million. That is going to take over the job which is being done in this hospital and one or two other similar health activities in the area.
Lord Mowbray and Stourton: But, my Lords, does not the Minister realise that while he says that the new hospital will take precedence over this one—which I accept—the Cheshire County Council and all the local people have no sympathy with the Government in their obdurate views on not being willing to give concessionary terms—as the noble and learned Lord, Lord Elwyn-Jones, pointed out—to this small charity? Is the Minister not aware that this charity and the Order of St. John and the Red Cross are doing enormous good to a small number of people? I find it quite extraordinary that there is no measure of compassion in the noble Lord's voice.
Lord Cullen of Ashbourne: My Lords, the noble Lord is being rather difficult, is he not? First, he says I have a rather nasty, ugly, taste in my mouth and then that I have no compassion in my voice. I have no ugly taste in my mouth, I do not think—and I certainly feel thoroughly compassionate. I also think that there are two difficult choices to make here: one is the duty that the Secretary of State has to get the best possible price for surplus property; and, secondly, if he cannot get it—and I have said quite clearly, "if he cannot get it "—he will certainly consider making concessionary arrangements with this hospital. I cannot say more than that.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that I fully appreciate the difficult position

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in which he is placed as I was in a similar position when I was on those Benches? My noble friend Lord Wells-Pestell pointed out that there were certain procedures to be gone through. Could the noble Lord advise the House whether those procedures have been gone through? Secondly, in view of the feeling of the House—and there is obviously a great deal of feeling—would he advise his right honourable friend of the strong feeling here and at least pass the message on to be a little more generous and understanding?
Lord Cullen of Ashbourne: My Lords, of course my right honourable friend will read with great interest all that is being said today. I cannot obviously go any further than I have on this point.

Business
Lord Denham: My Lords, I hope that the House will not take it amiss if I point out that we have a great deal of business before us this afternoon, and perhaps noble Lords may bear this in mind when they come to speak. It may be for the convenience of the House if I say that it is proposed that the debate on the Motion standing in the name of the noble Lord, Lord Cledwyn of Penrhos, will begin no later than 7.30 this evening. If the Report stage of the Administration of Justice Bill should not be completed by that time, it will be continued on Thursday, 13th May.

Business of the House: Short Debates
Baroness Young: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, that Standing Order 34 and paragraphs 10, 11, 12 and 13 of the Rules for the Conduct of Short Debates set out in Appendix D to the Companion to the Standing Orders shall apply to the Motions in the names of the Lord Davies of Leek and the Baroness Ewart-Biggs set down for debate on Wednesday, 12th May.—(Baroness Young.)
On Question, Motion agreed to.

Epsom and Walton Downs Regulation Bill [H.L.]
3.35 p.m.
Lord Henley: My Lords, I beg to move that this Bill be now read a second time. This Bill has been promoted by the Epsom and Ewell District Council, which is the local authority which covers Epsom and Walton Downs. This Bill deals with those Downs and it is necessary owing to the provisions of Section 262(9) of the Local Government Act 1972, which causes the existing legislation—the Epsom and Walton Downs Regulation Act 1936—to lapse at the end of 1984.
Epsom and Walton Downs cover an area of approximately 600 acres. Epsom Downs and part of Walton Downs belong to a company named Metropolitan and Country Racecourse Management and Holding Limited
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and are subject to a lease in favour of United Racecourses. The remainder of Walton Downs is owned by Mr. Stanley Wootton and subject to a lease between him and the Horserace Betting Levy Board.
Before the 1936 Act, which is the existing legislation, the Downs were subject to conflicting interests. The interests of the public were represented by the council (that is, the predecessor of the Epsom and Walton Downs District Council), and the interests of the predecessors of United Racecourses and Mr. Wootton lay in the use of the Downs for racing and training. The council's problem was that it had only limited powers to safeguard public interests. They could make representations and resist any permanent enclosures. Generally they were dependent on the goodwill of the others.
The 1936 Act therefore set out to do the following: first, to give statutory recognition to the rights of the public to air and exercise over the Downs. Secondly, to set up a body known as the conservators. The conservators are 10 in number and at present they consist of six appointees of the local authority; three appointees of United Racecourses; and one appointed by Mr. Stanley Wootton. The conservators were charged with the duty of preserving the Downs in their natural state of beauty, and were armed with the necessary powers. Thirdly, the 1936 Act was to define the rights of predecessors of United Racecourses and Mr. Wootton over parts of the Downs essential to the continuance of the racing industry, and to safeguard other users.
As I have already said, the 1936 Act will expire at the end of 1984 unless extended by the Secretary of State for the Environment under the powers he has in the Local Government Act 1972. Because it is expiring, the council set up a working party to consider the replacement of the 1936 Act. It was felt on the whole that the 1936 Act has stood the test of time quite well and that the new Bill should be on more or less the same lines, making changes deemed necessary only by the passing of time and what might be necessary in future. This I think the new Bill attempts to do.
Since the 1936 Act, there has been a considerable increase in the local population, with, I would have thought, a resulting increase in the ownership of cars and horses for hack riding. People also now have more time for recreation. The proximity of the Downs to the Metropolitan area has led to greatly increased pressure on their use. It is obvious therefore that some balance must be struck between the various different and conflicting users of the Downs, and it should be pointed out that during the consultative process the working party consulted all interested parties and, with one significant exception, all reached a considerable level of agreement. I shall come to that exception later.
The Bill seeks some new powers to make by-laws to prevent nuisance and damage and to preserve order so as to ensure that the visitors to the Downs behave themselves and do not interfere with the rights of others in their enjoyment of the Downs. In addition to the existing by-laws the Bill covers metal detectors, noise from radios and musical instruments, model aircraft, hang-gliding and dogs. A power to charge for parking is also sought, and also various regulations to control residential caravans at the Derby meeting.

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About all these there is really no dispute. All the appropriate bodies have been consulted. For example, with regard to the caravans, the National Gypsy Council and the police have been consulted, and on these matters no petitions have been lodged.
Epsom has a worldwide reputation as a training and racing centre. Epsom and Ewell District Council regard racing as their most famous industry. But it is not only that: it also provides considerable local employment. I think there are some 14 licensed trainers and one permit-holder operating on the Downs, with something in the region of 400 horses in training: the figure can vary from day to day.
Training on the Downs at present, although fairly satisfactory, is not nearly as convenient as at, say, Newmarket, where there is considerably greater space; and with this in mind and remembering the importance of the employment question, the promoters are seeking powers to regulate hack riding. Failing that, the continuation of training at Epsom would be in considerable jeopardy; and with the demise of training one could possibly argue that racing at Epsom would be threatened. I do not argue this point very strongly, but it is arguable and I imagine that some later speakers will be referring to it. Racing has existed at Epsom since at least the reign of Charles II and I do not think anyone would be prepared to see it go. Certainly the local authority consulted all the local residents and they all agreed that racing at Epsom should survive.
All I would say for the moment is that the promoters are most anxious that training and racing, and in particular the Derby—probably the most celebrated race in the world—should be preserved. This is not merely in the interests of the racing industry but in the interests of the rest of the community in Epsom and round about. It is with that in mind that the promoters seek power to regulate hacks on the Downs. I should mention that the 1936 Act was defective in that it left this matter unclear. It has worked tolerably well in the past, but the increased pressure on the Downs makes this less easy. Further powers are also being sought to erect temporary stands principally for the Derby meeting, to re-develop the present grandstand when necessary—at present it has only possibly 10 years of life—and to impose a limit of 16 days' racing a year. At present there is no limit, though in fact only nine days' racing takes place. Evening and Sunday racing has been anticipated, but only if there should be a change in the general law. Even then safeguards have been added to tighten up the existing regulations in the interests of the conservators and the council, whose consent would be required.
Turning to the question of hacks, concerning whom the noble Lord, Lord Melchett, has tabled an Instruction, and concerning whom a petition has been lodged by the British Horse Society and the Epsom Downs Riders' Protection Society, due to increased pressure on the Downs the promoters feel it is necessary for there to be some greater control over hack riding. Obviously the exact details and the evidence needed must be left to the Select Committee, to whom this Bill would be committed should it be given a Second Reading.
I should like to make only three points. First, this is not, as I think some would like to see it, a dispute purely between the liberties of the hack riders
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and the alleged privileges of the racing industry. There are a great many other users of the Downs whose rights ought to be considered. People walk there; they go on cross-country runs; they have picnics there and the Downs are used for charitable events. Model aircraft flying takes place there and the local school cadet force meets there for its field day events. Obviously some balance must be struck between all those different users. The hacks are not the only users other than the racing and training industry.
Secondly, I cannot really emphasise too much the importance of the training at Epsom in terms of employment. This is of benefit to the area, and nobody wants to see training disappear if that would result in considerable loss of jobs. Thirdly, it is fair to point out that the trainers pay large sums for maintaining the various gallops and training areas on the Downs, while the other users do not. I do not know how many there are, but certainly some of the other users are not necessarily local residents or ratepayers.
Lastly, I turn to the Instruction in the name of the noble Lord, Lord Melchett, which will be moved should this Bill be given a Second Reading. I am not terribly happy with it; I do not particularly like the wording, but I shall leave it at that. I do not myself oppose it. If the noble Lord, Lord Wigg, moves his amendment to that Instruction, I feel I should have to support him, as I would prefer the Instruction of the noble Lord, Lord Melchett, as amended by the noble Lord, Lord Wigg. I beg to move that this Bill be now read a second time.
The Earl of Onslow: My Lords, before the noble Lord sits down, and while I realise I shall be speaking later, could he say how many jobs would be involved? This would be very helpful to those who are going to speak in the debate later.
Lord Henley: My Lords, I do not think I can say how many jobs would be involved. I certainly do not have the exact figure. There are about 400 horses in training and that will give some idea, because quite a lot of people are needed to look after that number of horses. Again, this is a matter of detailed evidence and I think it is the job of the Select Committee to look into that rather than for it to be dealt with on Second Reading.
Moved, That the Bill be now read a second time. —(Lord Henley.)
3.48 p.m.
Lord Melchett: My Lords, the noble Lord, Lord Henley, has given your Lordships an admirable introduction to this Bill and I should like to say at the outset that I entirely support a Second Reading being given to the Bill and for it to go to a Select Committee. I entirely agree with him that it is the Committee's job and not one for your Lordships this afternoon to look into the merits and the arguments on one side or the other.
Before I make my speech, may I apologise profusely to your Lordships for the fact that I have to leave the Chamber at 5 o'clock to attend a meeting of your Lordships' Select Committee on unemployment. This is the last meeting of that Committee, which has been sitting for nearly three years now, and it is

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impossible for me to miss even a minute of its final meeting. Unfortunately, the timing of this debate was changed without providing any opportunity for me to comment on it. I believe it was altered to suit, in particular, my noble friend Lord Wigg and others of your Lordships who wished to speak this afternoon. As your Lordships will know, it was originally on the Order Paper for the end of Business yesterday when it would have been fairly late; but I am afraid it means that I shall not be able to stay until the end of the debate. The noble Earl, Lord Onslow, has very kindly agreed to move my Instruction formally when the time comes, and I hope I can save time by speaking to it now and therefore shall not need to speak for a second time, even if I were in a position to do so.
If I may add very briefly to a couple of points on the history which the noble Lord, Lord Henley, so admirably sketched out, before the 1936 Act the Downs were common land and were used for a wide variety of activities—as indeed they still are—racing, training racehorses, hacking, the grazing of sheep, golf, walking and so on. As the noble Lord said, more recently there have been more modern pursuits, such as model aircraft flying, added to the list. But in 1936 the number of horses in training had risen to over 1,000 and, due to the pressure which that and other activities were putting on the Downs, there was dissension between trainers and representatives of other users. The object of the 1936 Act was to maintain the Downs in a state as near as possible to the natural one, to their natural beauty, and to ensure that no particular interest group, no particular set of users, obtained more than their fair share of access to the Downs and use of them, and certainly that they did not do so to the detriment of other interests or members of the public.
The number of racehorses being trained has declined somewhat since 1936. As I said, then there were about 1,000; I understand that in the 1950s there were about 850 and that now the figure is around 350. The noble Lord, Lord Henley, quite rightly said that a number of jobs are tied up in this, but I do not think anybody who objects to the part of the Bill which changes the rights of hack riders would wish in any way, or even to suggest, that training should be limited or should disappear from Epsom. Quite the contrary—the argument is whether the changes in the Bill are needed to ensure that training continues. Just as a first point, it seems to me that if the numbers have declined from around 1,000 to around 350, while the area available for training has certainly not decreased, and has in fact increased, there are at least some prima facie arguments for saying that a change in legislation of the sort that this Bill would introduce is not needed.
But there are other economic interests and employment interests involved. For example, six local riding schools and their clients, together with a large number of private riders, use the Downs and employment will be involved in those riding schools, just as there is in the training. It is estimated that the Downs are used by about 40 hacks per day on a weekday and 100 per day at the weekend. Of course, those figures are subject to considerable seasonal variation, but I think they illustrate the degree of public interest among a large number of people in the use of the Downs for the purpose of hacking.
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As the noble Lord, Lord Henley, said, the Act needs to be brought up to date and, as I said, I certainly support the Second Reading of this Bill, but changes have been taking place in advance of a change in legislation. Over recent years, hacks on the Downs have been more and more confined to certain limited tracks and paths, by signs and barriers which have been erected across traditional riding grounds. These tracks are also used by racehorses going to and from the gallops, and by tractors and other vehicles of the racing interests. The result of this has been that the tracks have become very badly churned up in wet weather, even impassable, and one or two are completely unusable in any safety in bad weather. This has caused considerable problems for the hacks, but also considerable damage to the Downs themselves, and it illustrates the dangers of confining people to particular tracks when they are riding on horseback, particularly if those tracks are also used by tractors in bad weather.
For example, a sand track was constructed on the area at the top of Walton Downs where hacks used to ride. That soon became churned up and unsuitable, and a further track was built on the uphill side of the first. That track drained into the first one, which has become completely impassable, and worsened its already poor condition, and when the upper track was rebuilt all the unwanted material was spread on the lower track, making that into nothing more than a bog in wet weather.
I do not think I want to go any further into the arguments on either side. On that point, I simply want to emphasise that the petitioners to this Bill certainly have absolutely no intention of threatening racing or the training of racehorses on Epsom Downs. They would suggest that the 1936 Act has worked well and that it would be wrong, without serious consideration, to change its provisions. In addition, I wanted in the first few remarks that I made to illustrate that there is a very considerable public interest on both sides. I agree entirely with what the noble Lord, Lord Henley, said about the importance of racing and training racehorses at Epsom, but I hope that others of your Lordships, and he indeed, will agree that there is considerable public interest in the general recreational use of this area, particularly given, as he said, the increasing population and the decreasing amount of green space that is available, especially for people living near Epsom.
To turn to the legal position very briefly, the 1936 Act substituted for rights to ride over the Downs at will, which were claimed under common law, statutory rights to ride at will, but restricted in the sense that the public were not allowed to ride on the golf course, the racecourse or the training gallops. So the 1936 Act removed, of itself, very widely claimed and held common law rights, and substituted more restricted rights in order to balance, as the noble Lord said, the different interests involved. Section 4 of the Act, to which my Instruction draws attention, gives this right of access for air and exercise on the Downs, subject to a provision that nothing in that section shall authorise any interference with racing or the training of racehorses—that is quite clear in the existing Act—or, of course, the general right of access on foot or on horses, which is confirmed in later sections of the Act.

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The problem with this Bill and the point of public importance, and the reason why I suggest your Lordships agree to the Instruction which I have put down, is that the Bill before your Lordships this afternoon amends Section 4 of the Act, because it would restrict the general right of access to the Downs to those on foot only. It would therefore remove the general right of access, subject as I have said to the safeguards for racing and training, from those on horseback. I suggest to your Lordships that that is an important matter, a matter of public interest, and one to which it would be useful for the Committee to give particular attention.
To sum up the arguments of those who object to the change which is in the Bill, they would say that it is unacceptable that the public's statutory right to ride at will over the Downs should be exchanged for permission to ride on certain tracks and areas only. They would say that it is unnecessary to restrict the public's use of the Downs, because the Act limits this general right, as I have said, to the extent that it was necessary originally to train 1,000 racehorses on the Downs to provide a sufficient area of training gallops for that purpose; that now there are only 300 or 350 horses in training and it should not, therefore, be necessary to increase the size of the training gallops at this point in time. But the third argument against the change which is in the Bill would be that it is detrimental to the conservation of the Downs to restrict and channel riders in very narrow tracks used by a large number of horses, including racehorses and vehicles, because that damages the surface of the Downs and is in nobody's interest at all.
Finally, those who object to this change in the Bill would say that there is no evidence in the official report, which was published in 1981 by the borough council, of any conflict between riders and members of the public exercising their rights of access on the Downs. As I understand it, those with considerable experience of training racehorses—indeed, one trainer recently wrote to the Horse and Hound to this effect—say that there has not been a single accident in all the years of training racehorses on the Downs. That, I hope, is sufficient to suggest that there is a matter of public importance and public interest here, and I should now like to turn very briefly to the effect of my Instruction and to the amendment of my noble friend Lord Wigg.
First, the effect of an Instruction is not to settle the matter under debate; as the noble Lord, Lord Henley, said, and I strongly agree with him, that is a matter for the Committee. The effect of an Instruction is twofold: first, to underline the importance of a point. I suggest to your Lordships that the number of people who put their names down to speak this afternoon does not allow anyone to argue that this is not a matter of general interest and importance. Therefore, on that ground alone, it seems to me right that your Lordships should agree to my Instruction and ensure that the Committee gives particular attention to this point.
The second thing which an Instruction ensures is that the Committee gives reasons if it disagrees with what is said in the Instruction or agrees with what is said in the Bill—either way. It seems to me, given the public interest in this subject, the number of interests involved and the degree of interest in your Lordships' House, that it would be advisable to ask the Com-
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mittee, by way of agreeing to my Instruction, to give its reasons for either agreeing with what is in the Bill, or deleting what is in the Bill and remaining with the provisions of the 1936 Act. That again will be the effect of passing the Instruction. It does not determine the outcome of the Committee's deliberations one way or the other. I would suggest to your Lordships that on those grounds the case for an Instruction is overwhelming. I was delighted to hear the noble Lord, Lord Henley, say that he would not object, although he was not entirely happy with my wording, to this Instruction being agreed to, and I hope that that will be the view which your Lordships will take generally.
Finally, as I shall not be speaking again, may I deal with Lord Wigg's amendment. It seems to me that it does not make a great deal of difference in practice which version of the Instruction is agreed to, because both will have these two effects: that the Committee will give particular attention to this point and, if they follow their normal practice, will give their reasons for either agreeing or disagreeing to the change made to the Bill. My only quarrel with my noble friend is that my wording is, I think, rather clearer and simpler than his and, secondly, addresses itself to the point in the Bill which is the focus of public concern. For that reason, it is a preferable form of words.
I say that because the reason for the concern which I have mentioned to your Lordships is that the 1936 Act is being amended in one important respect: to make it a criminal offence for people on horses to ride at will over the Downs where previously they had a statutory and before that a common law right to do so. That is the change which is causing concern. I suggest that logically this is the change to which the Committee's attention should be drawn and that they should give their reasons for either agreeing or disagreeing to that change. This is what my Instruction quite specifically does. If one reads it very carefully, Lord Wigg's does much the same thing, but not nearly so explicitly. It does not seem to me that my noble friend gains very much by his words, but it does seem to me that the Committee will gain something from the greater degree of clarity of my drafting.
Therefore, I hope that your Lordships will agree to this Instruction being passed to the Committee, taking into account the very considerable degree of public interest and concern. This very small change—the inclusion of the words "on foot"—which will make, as members of the British Horse Society, local riders, local riding schools and so on believe, criminal offenders out of people who previously had a general right at law to ride over the Downs, so long as they did not interfere with the racing and training interests, is a matter of considerable importance. On that basis, when it comes to the Bill—as I hope it will—being given a Second Reading, I hope that my Instruction can also be moved formally and will be accepted by your Lordships.
4.3 p.m.
Lord Wigg: My Lords, may I begin by congratulating the noble Lord, Lord Henley, on the excellent way in which he introduced the Second Reading. He saved me a great deal of trouble and I think that perhaps he saved your Lordships some boredom, because much

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of what he had to say is what I intended to say—although I do not think that I should have said it as ably as did he.
Naturally I listened with great care to what the noble Lord, Lord Melchett, had to say. The great difference between us is that obviously he is interested in preserving the rights of those on horseback to go where they like, when they like and how they like, whereas I, for my sins, became involved in this problem in a practical way. My interest arises in the first instance from the work of the late Lord Chuter-Ede—my old friend Jim with whom I was closely associated in another place in connection with the legislation which the then Home Secretary, the late Lord Butler, placed on the statute book. The late Miss Ellen Ede and the Mayor and Corporation of Epsom did me the honour of asking me to deliver the address at his funeral service. I remember very well that The Times paid tribute to him by saying that he was among the most sensible men of his generation. He was essentially a sensible man and a man who commanded wide respect. Although a lifelong Socialist and a member of the Labour Party, he became Charter Mayor of Epsom and the chairman of Surrey County Council. I do not think that the political opponents of anybody could pay a greater tribute than was paid to Chuter Ede.
It was Jim Chuter Ede who was the author of the 1936 Act. I sat, as it were, at his knee and listened to him dealing with some of the problems and some of the chaos that existed before the 1936 Act. Of course there were many more horses in training then, but training then was very different from training today. The situation in Epsom before the 1936 Act was passed was as about near chaos as anybody can imagine. May I remind your Lordships that when I became chairman of the Levy Board in 1967, at the Derby one had the unique spectacle, by the Downs Hotel, of racehorses which were worth hundreds of thousands of pounds being mixed up with motor-cars, the public, ice-cream cars, bicycles, motor-cycles. Of course it is generally accepted that the winner of the Derby in 1970 was worth £1 million. When it pulled up, it could have pulled up in conditions which might have involved the end of the horse.
We had to tackle a problem which had been left over. Nothing had been done about it. We had to find the money to put in an underpass and tackle the problem. Between the 1970 Derby and the next Derby the Langley underpass was built. It is perfectly true that great quantities of chalk had to be excavated, that this was put on the Downs and that it made some parts of the Downs soggy. But there are problems all the time, which either can be left or can be controlled. What Chuter Ede set out to do, sensible man that he was, was to compromise. The 1936 Act, which has lasted from then until today, was based upon a compromise which worked very well.
The noble Lord, Lord Melchett, was very kind and very fair in what he said, but I do not think that he could have read his own Instruction because what he is asserting there is that there is an explicit right at all times, which should be continued, for hack riders to go, as I say, where they like, when they like and how they like. What Chuter Ede set out to do by setting up the conservators was to bring into practice a compromise which has, basically, worked. If the Bill is
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given a Second Reading and the amendment which I am going to move is accepted, to establish here the right of the trainers, under properly controlled conditions, I believe that training will continue, that racing will continue and that money will be available for the development and conservation of the Downs, free of any charge upon the public. May I remind your Lordships that one of the things which we managed to do was to take Epsom and Walton Downs out of private ownership, leaving the kind of problem I have mentioned at the Downs Hotel, and bring them into public ownership in order that they could be developed in the interests of the community as a whole: pedestrians, hack riders, trainers, the continuation of the Derby, and the family who want to go there for a picnic. It is not only Epsom that is involved. This is an open area available to the metropolis as a whole. If this can be developed then it will be a very important public asset, which I am proud to say that I helped to bring into public ownership so that it could be developed in that way.
Can I just tell a story? There was a difference of opinion concerning Mr. Stanley Wootton, the owner, as he is described in the Act, of Walton Downs. The future of Epsom came into doubt because the Grandstand Association, as it then was, under the chairmanship of the late Sir Brian Mountain assisted by Mr. Evelyn de Rothschild, was quarrelling with Mr. Wootton. It got almost to the point of litigation. Stanley Wootton asked me to meet him on Walton Downs on a lovely June morning in 1969. He said, "Look, over there is Headley Church. Wouldn't it be wonderful if we could come to an arrangement whereby, 200 years from today, someone standing on this spot could see what we can see today while enjoying the glorious sunshine of a June morning?" I replied, "Two hundred years? Why not a thousand years?" He responded, "Why not? "So he agreed to give a lease to United Racecourses. In that lease he did not lay down the law or impose stringent conditions, and I know that because I have a copy of it here. He merely expressed the hope that in granting the lease he would guarantee the future of the Downs as a training centre for racehorses and for the continuation of the Derby. That is my interest.
I was committed in honour to do what I could to undertake what Stanley Wootton had asked me to do. A few days ago he wrote to me from Australia. Like me, he is now getting near the end of the journey and spends much of his time in his native Australia. He writes:
"Dear Lord Wigg, I understand that a petition has been lodged for hack riders to be given official authority to use some portion of Walton Downs. I am entirely opposed to this suggestion and trust that the Levy Board are of the same opinion. When I handed over the management of Walton Downs to the Levy Board, I did so upon their agreeing that the training of racehorses should always have priority over all other uses of the Downs. We must on no account give away the rights of the owners of the Downs to manage these within their authority. I am not opposed to a continuation of the friendly arrangement with the Hack Riders' Association, whereby they have somewhere to ride on the Downs".
He goes on to tell me how I may get in touch with his solicitor.
It is not only Mr. Stanley Wootton who is worried. I have received a letter from Mr. Benstead, the chairman

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of the Epsom Racehorse Trainers Association, in which he writes:
"Dear Lord Wigg, I am writing on behalf of all trainers in the Epsom area to ask if you will render assistance in preserving the training grounds on Epsom and Walton Downs for the training of racehorses. As chairman of the Levy Board when Mr. Wootton leased Walton Downs and other parts to the Levy Board, you are best qualified to understand Mr. Wootton's intentions. During the preparation of this new Act, we were under the impression that the interests of United Racecourses and the trainers were one and the same. Recent events have indicated that this may not be so".
The point is this. Here are these Downs and there are, I would suggest, some 400 racehorses. What the noble Lord, Lord Melchett, does not understand is that a considerable capital outlay has been undertaken to improve the quality of the gallops. I would like to pay tribute to Mr. J. S. Hall, who for many years was responsible for those gallops and for putting in all-weather gallops. These are maximum capital outlays and they are bringing their reward. Only last Saturday, the third and fourth in the 2,000 Guineas were horses trained at Epsom. The number may have gone down but the quality has increased. If Epsom is to continue as a racing centre, it will continue to provide employment not just for those who work in the stables; because it is like a brick being dropped into a pond, sending ripples out wide. There are also secretaries, saddlers, people who provide refreshments and all sorts of other people whose numbers must run into hundreds.
However, I would not base my argument on the question of employment, important though that may be. My argument concerns an event of world importance. It is the most important race in the world. If Epsom ceases to be a training centre it will be the end of the Derby. The training of racehorses and the continuation of the Derby are the heads and tails of the same penny. Others may not agree, but that is my firm view. I struggled to find the money to buy United Racecourses at a time when there was a restriction on credit. But I did so with the support of a very able board—and I pay tribute to my colleagues on the Levy Board at that time, particularly the noble Lord, Lord Kilmany, and certainly the late Lord Crathorne, who backed me up in buying United Racecourses with Deutschmarks.
Why did we do so? Because it was not only Epsom that we were concerned about. We were concerned about rebuilding the stand at Sandown Park, which was in danger of falling down. That was done, and the idea was to roll over part of the cost against gravel extraction at Kempton, and then to develop the 1¼ mile down to the 7 furlong start at Kempton and then to sell it. Negotiations were in progress which would have produced very large sums of money. But times change and those policies were not carried through. Nevertheless I believe that they were soundly conceived. But one cannot legislate for posterity. One can only do the best one can today, in the hope that it will hear fruit for tomorrow. That is what has happened.
It is also of tremendous importance that one should understand the part played by the local authorities. It was the view of my board, and certainly my own view, that we should bring the local authorities—Epsom Council, Esher Council and Sunbury Council—into
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association for the development of these racecourses. That was done; but in March 1974, without a word of warning, the local authorities got slung off. Notice was given by the late Sir Brian Mountain that they had served their purpose and must go. I was not very happy about that, and I am not very happy about it now. But with regard to Epsom Council, to whom I pay tribute because it has been a pleasure to meet Councillor Newton and the Chief Executive, Mr. Grimes, who are very pleasant colleagues, I have every confidence in their ability to sustain policies in the interests not only of Epsom but also of the continuation of the Derby.
I intended to put down an Instruction which would secure the appointment of Epsom Council on to the board of United Racecourses, but Epsom Council are satisfied with something less than that. They have sent me copies of correspondence with the Levy Board in which they say that the Levy Board are prepared to give an assurance to this House (although I do not know what the value of an assurance given to this House is, except that it is a way of expressing intent to follow policies through) to ensure that Epsom and Ewell Borough Council will be represented on the grandstand company and will be kept informed of all activities which involve Epsom.
That is a matter between the Levy Board and Epsom. I hope it works out. It has not worked out very well so far as the Grand National is concerned, because, although I have done my best to secure continuance of the Grand National, in my judgment unless something is done very quickly to put the stands right at Aintree there is not going to be another Grand National. If it is left to next November, when the option that the Racecourse Holdings Trust have with Mr. Davis will expire, and the money is not available, then I am afraid the 1982 Grand National is curtains.
I was afraid about the same thing happening at Epsom. The original stand was built in 1830. It is interesting to notice that the cost was £13,000. The present stands were built in 1927, and it is estimated that they have 10 years' life. But of course if you wait till the stands are about to fall down, and if you have had a policy of spending all your money on prize money or interest free loans to the Jockey Club, there will not be any money available to rebuild the stands. In my view, a survey ought to be undertaken now, getting the best advice available as to how rebuilding should take place, because of course, even today, the existing stands are not really up to modern standards. These problems have to be tackled in advance. If they are left, at the end of the day you can say, "Well, of course we are wholeheartedly in favour, we would do it all if we could, but we have no money."
I now come, under the pressure of time, to the point of Lord Melchett's amendment. What he does in his amendment is to give the right to the public on horseback to exercise the powers which he says they have always had. Well, I am not going to argue about whether they have always had them. All I would say is that they have not practised them. It has been done on the basis of co-operation. I believe the Epsom Council and the Epsom trainers have leant over backwards to do everything they can to meet the hacking interests, but you cannot have all-

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weather gallops being used by valuable racehorses running within a few inches, or a yard or so, of people on hacks. To do that is to invite disaster.
Lord Melchett: My Lords, I am sorry to interrupt the noble Lord and I do not want to prolong the proceedings, but he has now said twice that I have an amendment down. In fact it is an Instruction. My noble friend has also said twice that the effect of the Instruction would he to continue a generally and totally unrestricted right of access by hacks to the downs. Neither of those statements is correct. My Instruction asks the Committee to make sure that they are satisfied that it is in the public interest that the rights available under the 1936 Act should be removed. It does no more than that. The Instruction does not tell the Committee what decision to reach; it simply asks them to make sure that it is in the public interest that the rights given under the 1936 Act should be removed by this Bill—no more than that.
Lord Wigg: My Lords, may I say this, with great respect: that is a lawyer's argument. It has no validity in fact at all. What the noble Lord is saying is that under the 1936 Act there was this right. I am saying it was an academic right and it was never put into practice. When it was, it brought the conflict between Mr. Wootton and United Racecourses which led Mr. Wootton, first, to threaten litigation, and then to say, "Look, I am prepared to give Walton Downs provided the training of racehorses should continue". I am saying to your Lordships that if you go and look at these gallops, these hack rides, they have 14 miles of hack rides. The trainers have leant over backwards. They offered not to use their gallops after midday. They have done everything they can. They offered to put in another strip to the top of Six Mile Hill.
This was all thought to be accepted, and then they found this. The trainers suddenly woke up to find that the Levy Board representative and the conservators representative, without a word from them, were going out measuring strips for hack riders within a yard or so of the gallops. At the end of the day, either you have the hack riders or you have the gallops; you cannot have the two. I am obliged to the noble Lord, Lord Melchett. He says he wants to leave it to the Select Committee. So be it. I think this matter of such importance that your Lordships should say to the Select Committee, "Yes, be fair-minded, listen to the evidence, come back and say what you like; but in our view it is of prime importance that all users of the Downs—hack riders, trainers, pedestrians, picnickers—all have a right and somebody has got to balance those rights, and that should be the Epsom Council, the elected representatives." That is what I am saying.
If that is done, you will then get, in our peculiarly British way, in the tradition set out for us in the past by Lord Chuter-Ede, a working compromise. But if your Lordships accept Lord Melchett's advice, and if the Select Committee then come down and say that there is the inherent right here, as a legal right, for the hack riders to go where they like, or, as he puts it, the public on horseback have a right to go where they like without any restriction being imposed, without any restriction that the council in the interests of the users
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of the Downs may impose, then you have said goodbye to training at Epsom and you have said goodbye to the Derby. That is my view. I have put it to your Lordships as fairly as I can, and I would ask your Lordships to give the Bill a Second Reading and to support my amendment as against the original Instruction moved by Lord Melchett.
4.27 p.m.
Lord Crawshaw: My Lords, I want to say a few words in support of my noble friend Lord Henley, who so ably moved this Bill, and of the Bill itself. First of all, I am extremely pleased to see that the local council, the Epsom Council, and the racing authorities are in pretty well total agreement over this Bill, because I think that augurs very well for the future of racing and training at Epsom. As I understand it, in point of fact all this Bill is doing is to put on to the statute book practices which are going on at present. We have had many instances of this sort of thing in the past; we had one last summer on the Bill to do with bookmakers' contributions, simply to put what is a current practice on to the statute book. That is how I understand it.
On the whole I have found that the mutual respect among those engaged in equestrian pursuits is very fundamental. It seems to me this is especially the case when it comes to, so to speak, leaving the floor. There is a great camaraderie between those engaged in steeplechasing, point-to-point, show jumping, hunting and so on; perhaps it is the common extra risk which is the unifying factor. This was all exemplified in the result of this year's Grand National. That was what sport, or steeplechasing or racing, is all about. Therefore, I regret that there is some conflict here between the equestrian interests. Fundamentally, there appears to be a need for the extension of the mutual respect about which I have just been talking.
As we have heard, there are 417 horses in training at Epsom which form a very important and welcome local industry. That must put Epsom in the top five or six training centres in this country. Such centres as New-market, Lambourn, Malton, Epsom, et cetera, can only be established over very many years—old turf has to come simply by age as well as the even ground, freedom from rabbit holes and ruts and hoof prints, particularly hoof marks which are, so to speak, going in the wrong direction. There is also the question of loose horses. Seeing my noble friend Lord Onslow here today I cannot help being reminded of an occasion when he rode one of my horses on a hack and I am afraid it came back with an empty saddle. However, that was a few years ago and I am sure that he is much better at it now.
In any event, those are all factors which are essential for highly-trained and corned-up horses travelling on very fragile limbs at speeds of anything up to 40 miles an hour. After all, to use a parallel, we would not expect Sebastian Coe to do his training for his running around Trafalgar Square or Piccadilly Circus. I think that that is a genuine parallel because the training of horses is a very precise science and it is practised as well at Epsom as anywhere else in the country. As the noble Lord, Lord Wigg, has said, we did witness that the third and fourth in the 2,000 Guineas were trained at Epsom and came in front, if I may say so, of all the Newmarket horses on their own ground. So it seems

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obvious to me that those people who ride any other sort of horse ought to be prepared to accept some restraints on their movements.
That is why I want to support the noble Lord, Lord Wigg, and his Instruction—a fact which gives me considerable satisfaction this afternoon, because in the past on Bills and debates to do with racing in which we have both been engaged I have not found it possible to be in total agreement with the noble Lord, but at the same time I have always realised that he has a passionate interest and concern for the welfare of the sport and industry in this country. The same sentiments about the importance of training at Epsom were echoed to me also last Saturday by none other than Mr. Scobie Breasley—no finer or more fair-minded a sportsman ever sat astride the pigskin, in my opinion.
I must also stress, and this has again been mentioned by other noble Lords, that in this country there are about 100,000 people directly or indirectly employed in racing and its ancillary industries. There are approximately—and this is only an approximate figure—10,000 horses in training in this country and probably rather more if we talk about the point-to-pointers and so on. If we divide 100,000 by 10,000 we can see that each horse in a way represents employment for 10 people. That is a significant factor and I hope that it may help my noble friend Lord Onslow as regards his query about the employment situation.
I now wish to say a few words about the admirable British Horse Society, which on this occasion represents the hack riders. One of the few explosions that I have welcomed recently has been in the number of people who have been deriving great pleasure and recreation from riding horses. I have witnessed this at first hand in my part of the country, in the Midlands, and where I can I try to help to provide for it. Any purely obstructive treatment of these people by the racing fraternity at Epsom is bound to be counter-productive. In any case, they are all potential racing enthusiasts and I imagine that they would love to be associated, however remotely, with the successes of the Epsom trainers, or at least that is how they ought to view it.
However, as I have said, training grounds are extremely rare, scarce and valuable. On the other hand, it is possible to hack or ride in all sorts of other places. One extremely good outlet for this is to follow the local hounds—considering that I live in Leicestershire I was almost going to say, "even in Surrey", but the noble Earl, Lord Onslow, might not take that too kindly although I think that he will understand what I mean.
Without drawing your Lordships into a totally different argument, I would like to say how much I regret the recent actions and attempts by the Co-operative Society and various local councils to ban hunting on their land. That, in fact, includes at least one council in Surrey. It is an extremely unhelpful attitude, because it is, as I have said, a wonderful outlet for people who want to go riding. In view of the shortage of outlets which has been expressed this afternoon, I very much hope that these misguided councils and the Co-operative Society will change their minds.
Finally, I wish to welcome very much the control over caravans which is provided for under the Bill.
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I drove across Epsom Downs on last Derby Day and was appalled by the amount of rubbish which was lying around and which had been left all over the place. Not only does it constitute an eyesore, but it must be extremely expensive—and I imagine that it is a charge on the rates—for somebody to clear it up afterwards. Therefore, I very much welcome this part of the Bill. That is all that I wish to say. I wish to support the Bill and the Instruction of the noble Lord, Lord Wigg.
4.38 p.m.
Lord Kilmany: My Lords, in following my noble friend Lord Crawshaw I find myself in very great general agreement with what he has said, if there was one part of it that gave me particular pleasure it was to hear my noble friend's reference to the noble Lord, Lord Wigg, with whom he admitted he had sometimes had differences of opinion, but to whom he paid tribute, and I would also like to pay tribute, for the tremendous amount of work that he has put into the preservation of those two great British races the Derby and the Grand National. I believe that this Bill makes it possible to look forward with every good reason to a continuance of the Derby being held at Epsom.
In my view there is no doubt that the Bill was needed. The fact that the noble Lord, Lord Melchett, has seen fit to propose to move his Instruction shows how very necessary it is to have a better Instruction. For my part, I am prepared to support the amendment to Lord Melchett's Instruction because I feel that, in the amendment, the noble Lord, Lord Wigg, is expressing what we really require to make Epsom safe for the great race and safe for trainers, too. I should like to read the relevant words. I shall not weary the House; I shall not talk for long. It says that the Instruction will ensure:
"…the continuance of racing at Epsom and in particular the maintenance of the Derby and the preservation of Epsom as a training centre of race horses is safeguarded".
I think that that is about as far as I want to go in controversy.
I have no particular local connection. I appreciate that the noble Lord, Lord Melchett, has a great deal of local knowledge. Very often I have been to the Derby at Epsom, and I am sorry to say that quite often I have lost a small sum of money. But I think that our point of view should be the national importance of horseracing in general, of the excellence of British horse breeding and of the tremendous status, background and history of the Derby at Epsom.
4.41 p.m.
Lord Robertson of Oakridge: My Lords, I should like to support the Bill so ably introduced by the noble Lord, Lord Henley. I shall not be entering into the argument between the respective claims of cracks and hacks. There are many other noble Lords who have far more experience and knowledge of these two very important national interests. But I should like to pick up the remark that the noble Lord, Lord Henley, made on Sunday racing, when he said that the Bill gave provision for Sunday racing subject to a change in the general law and the approval of the conservators and the council.
On page 9 of the Bill there is a new Section 13A. It says:

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"Race meetings on the Downs shall be held on such days not exceeding sixteen days in any one year, as may be authorised by the stewards of the Jockey Club and may include Sundays".
Then it goes on to say that such racing on Sundays must have the consent of the council and of the conservators.
Those words "and may include Sundays" have caused a certain amount of consternation in and around Epsom, and I have heard from more than 100 people, individually and collectively, on this subject, who have written expressing some alarm and some disapproval at the thought that there might be racing on Sundays. Quite apart from the effects on Epsom Downs and the amenities of the surrounding areas, it seems to me that for Parliament to say specifically that racing might take place at Epsom on Sundays, albeit subject to the approval of the council and the conservators, might well set a precedent, with possibly wide consequences.
Noble Lords will, of course, have their own views on the desirability of racing in general on Sundays, and I do not wish to enter into those arguments. But I think it would be wrong to take some action in this Bill which might affect the general position, this Bill being such a local one. Therefore, it was my intention to move for an act of Instruction to the Committee to study this aspect of the Bill. However, I am glad to say that I have received a firm assurance from the promoters that they agree to the deletion of the words "and may include Sundays", and will therefore ask the Committee to delete these words. On that basis, I am happy to let the matter rest there.
4.45 p.m.
Lord Rawlinson of Ewell: My Lords, I declare an interest, but it is an interest of sentiment, affection and knowledge, because for some 23 years I represented Epsom and Ewell in another place and I have family connections which go back many years, when one was a small country town and the other a small village. I know the area well. I recollect being told by an ancient great-aunt, back in the 1920s, of herself on her pony watching the crowds come down from London for the Derby. In those days the banks shut on Derby Day and Parliament rose on Derby Day; it was a great holiday. The "Pearlies" used to come down in their wagons, brakes and carriages. It was a great national occasion throughout the whole of the sporting calendar.
As I also believe that the whole point of advocacy is to persuade people to do what you want them to do, as has been quite clear from what has been said so far—at least, I strongly suspect that your Lordships will give this Bill a Second Reading—I shall not spend a great deal of time on the Bill. Having, as I said, represented this area for some 23 years, I know the importance of the racehorse training industry to the area. I know the importance that is attached to it, quite apart from the tradition which is attached to it. I know that a great many people are employed in the industry. The noble Lord, Lord Wigg, is perfectly correct, because not only are people directly employed by the industry, but the industry spreads beyond into different interests which arise from the fact that the racing stables are in the area. Indeed, I had a son-in-law who learnt as an assistant trainer in Epsom,
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and I was also glad to see what happened at the Guineas only a few days ago.
The real importance of Epsom remaining as a centre of racehorse training in this country is quite clear to me. That the great race, that great race—which I suppose, much more than any other single race in the world and certainly in this country, represents the interests of every section of our population—should be sure of being able to continue, is something which is very important in the heart of every Englishman and Englishwoman.
The Epsom and Ewell Borough Council has played an extremely responsible part in promoting this Bill and getting the balance right in the Bill. I assure your Lordships that this is believed to be an adequate balance between the different interests. The Epsom and Ewell Borough Council will continue to play its part, which is much accepted and much admired by many people throughout the whole of the borough. Therefore, I can only think that the balance is right and I am glad that the council has, indeed, played the part it has. I am wholeheartedly in favour of the Bill. I do not believe that the Instruction of the noble Lord, Lord Melchett, is necessary. I shall certainly support the amendment which has been proposed by the noble Lord, Lord Wigg.
4.49 p.m.
Lord Plummer of St. Marylebone: My Lords, I too have to declare an interest. I am chairman of the Horserace Betting Levy Board, which is the freeholder of Epsom Downs and the leaseholder of Walton Downs. Secondly, I am chairman of the Epsom and Walton Downs Training Grounds Management Board, which is responsible for the gallops on the Downs. That the Levy Board is directly involved in Epsom and Walton Downs is due in very great measure to my predecessor, the noble Lord, Lord Wigg, who, when chairman of the Levy Board, of course did so much to assist the development of the Downs. The racing and training industries really owe him a very great debt of gratitude. I should like, as others have done, to pay tribute and to record how much the present Levy Board appreciates the contribution that he has made in the past. Therefore, I support the amendment, which I think is crucial to racing and training at Epsom. But I think I must content myself by saying that the noble Lord, Lord Wigg, perhaps strayed rather further from the facts in regard to what he said about Aintree and some other irrelevant matters.
A number of noble Lords have already referred to the way in which the promoters of the Bill, the Epsom and Ewell Borough Council, have at all stages of its preparation gone out of their way to accommodate the many and varying interests and demands of the users of the Downs. T would like to add my appreciation of the way in which the council have, with great skill, tact and diplomacy, discharged this difficult task. The officials of the Levy Board and those of United Racecourses have nothing but admiration for the manner in which the Town Clerk and Chief Executive of the Epsom Council, Mr. Douglas Grimes, has co-ordinated the Bill's preparation.
It is of course a matter of very great regret to me and to the Levy Board, to the United Racecourses and

1283
the Epsom Council, that it has not been possible to reconcile the interests of the trainers and the hacks. I can testify personally to the fact that there have been endless meetings and discussions in an effort to bring about a mutually acceptable solution. I can testify too to the fact that the trainers have bent over backwards to accommodate the hacks' legitimate interests, and with their agreement the council offered to make many worthwhile amendments to the designated areas. I must emphasise, therefore, that any further amendments would seriously damage the training facilities which it is in the interests, I submit, of the whole of the local community to safeguard.
It should also not be forgotten that the lease between Mr. Stanley Wootton and the board, whose generosity will be appreciated by so many people now and in the future, makes it clear that it was Mr. Wootton's expectation and hope that Walton Downs would continue to be used for the training of racehorses, and that of course he has confirmed in his recent letter to the noble Lord, Lord Wigg. The noble Lord, Lord Crawshaw, referred in his speech to the rubbish which is left by the caravans after the Derby, and I support him in his protest about this and the need to control them, because it is not the ratepayers who pick up the bill, but unfortunately it is United Racecourses.
I must refer to another matter. The noble Lord, Lord Wigg, referred to the question of local representation on the board of United Racecourses, which was reconstituted without any such representation over eight years ago. But I think it should be pointed out that no request concerning such representation was received from the council to have the matter reconsidered until very recently. When such a request was made, the Levy Board and United Racecourses responded positively to the Epsom Council by offering them two seats, not on the main UR Board, which we both feel would be inappropriate bearing in mind the fact that it controls three racecourses in three different local authority areas, but on the board of Epsom Grandstand Association, a subsidiary of which specifically deals with Epsom alone.
The council have accepted this offer and discussions are continuing between the parties to tie up one or two loose ends. We all look forward to continuing the close co-operation and collaboration with the council, who themselves are committed to the future of racing and training at Epsom, and the Derby in particular. Although it has been suggested that the Bill might contain some reference to this matter, I feel that it must be inappropriate in the circumstances, not least because it would alter unacceptably the scope of the Bill. I assure your Lordships that both the Levy Board and the United Racecourses will act with the same good faith as I will, and as I am sure will the council. With those words, I have much pleasure in supporting the amendment moved by the noble Lord, Lord Wigg.
4.56 p.m.
Lord Auckland: My Lords, I should first like to thank my noble friend and relative, Lord Henley, for his clear exposition of this Bill. I should state that am not a horse rider, or at least I have not been since
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the end of the last war. Therefore, I am not one of those who have particularly fanatical arguments vis-à-vis the racecourse riders and the hack riders. I shall have a word or two to say about that in a moment. My main purpose in taking part in the discussion on this Bill is that since 1954 I have lived with my family within four or five miles of the Epsom racecourse and I have known, and still know, many of the councillors, the present chief executive and his predecessor extremely well. It is important to point out to your Lordships that the Epsom and Ewell Council are unanimous in their promotion of this Bill. That is something which is not always the case in regard to local Bills. Careful study has been given to producing a Bill which gives a fairer crack of the whip, if I may use that expression, to all concerned.
My wife and children when they were younger, and I have spent many Sundays on Epsom Downs walking with our dog and occasionally picnicking, and I think it ought to be borne in mind that many people come from long distances to use Epsom Downs for these purposes. Of course, it is a paramount fact that Epsom without the Derby would be like Samson without his hair. The Derby and Epsom have grown up together in a tremendous mutual friendship, and even those, like myself, who have no particularly keen interest in horseracing recognise the great value of the Derby in the employment which it gives not only to those who look after the horses but to those employed on conservation of the Common as well. Indeed, last Friday, together with the chief executive, one of the councillors who has a major part to play in regard to this Bill and the conservation officer, I spent two hours going over almost the entire area to see for myself what was involved in this Bill.
I am not necessarily opposed to hack riding. In fact, riding is, I believe, an extremely healthy occupation particularly for children. But one of the problems on a place like Epsom Downs is that the hack riders are not necessarily skilled riders. One of the real difficulties here is that there have been, to my knowledge, one or two near misses when hack riders and trainers have nearly come into physical conflict. That could be extremely dangerous. Moreover, in recent years the local council has given hack riders more use of the land in the area, so it is important to get the matter in perspective.
I might add as an aside that in the area in which I live there is a great deal of riding. Almost on our doorstep is Ashtead Common, where there are many riders. There are properly laid out tracks but alas many of the riders, particularly the young ones, do not keep to the tracks, with the result that in bad weather particularly the common is in an infernal mess, and there is nothing more dangerous in an area such as a common than inexperienced riders and a mount which panics.
However, we are concerned with Epsom Downs. It is clearly for the Select Committee to look into the points made by the noble Lord, Lord Melchett, and others, in his Instruction. But, in the last analysis, Epsom Downs—which I and all who use the Downs have grown to love—is a popular and very much frequented area. It is important to remember that the Epsom Derby is not only a great national institution but that it brings in people from many countries and

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has therefore, particularly from the point of view of the balance of payments, an enormous export potential. I believe the Bill will go a long way to giving a fair share not only to those who take part in the Derby and horseracing but to all those who use Epsom and Walton Downs for recreation. The noble Lord, Lord Wigg, who has done so much for racing, put his case very convincingly. In my view, the Bill should be given a Second Reading and should be carefully studied by the Select Committee.
5.3 p.m.
The Earl of Onslow: My Lords, it looks as if I am in a very small minority today in your Lordships' House. The racing community has rallied its ranks with vigour and intelligence, as it always does. I am not in any way suggesting that the Bill should not have a Second Reading: it is a legal necessity, if we are not to go back to the pre-1925 situation, which would be totally unacceptable. The racing fraternity is well represented here, whereas the hack fraternity seems to be represented only by myself, whose ability to fall off horses, I can promise the noble Lord, Lord Crawshaw, has, if anything, increased since I last fell off his more than 20 years ago.
The racing industry is a sport which attracts enormous public interest. It is a sport which attracts the very rich and it is a sport which, were it not for gambling and the gambling instinct, would be a different sport indeed. It is the only sport with the power to tax; it has the power to tax through the Horserace Betting Levy Board, which is given that power by Parliament, whereas hack riders have none of those benefits. They have had to resist the encroachment of the racing fraternity on Epsom Downs for perhaps 100 years. Mr. Buckwell, QC, who was then a Member of Parliament, is quoted as saying:
"If the Grandstand Association do not take care, they will raise questions about their own use of the Downs which it is in their interest to let sleep".
He went on to say that no one could stop him riding or treat him as a trespasser, and added:
"The Epsom Grandstand Association solicitor sent to Mr. Applegarth a letter saying they had no intention of doing anything to prevent anyone using Walton Downs or Epsom Downs for reasonable exercise, but they did object to a person using the Gallops to exercise a horse up and down".
There has been some, I believe totally justified, criticism of people bringing in point-to-pointers or eventers from long distances to train on the Gallops, and that is, of course, an abuse of the privilege of ordinary hacking people to ride gently around Epsom Downs.
The racing industry has on two occasions attempted to change the 1936 Act, but on both it failed. There were two reports which said that the Act was perfectly all right, and the 1981 report by Epsom and Ewell District Council also said that the arrangements had worked perfectly satisfactorily up till now. No one is saying, or even trying to suggest, that racing and training at Epsom should cease. The noble Lord, Lord Wigg, and others have said that if hacking is not regulated it will cease. That flies in the face of all reality; there is no evidence to that effect. In 1936 there were 1,000 horses in training. Surprisingly, there were more livery stables at Epsom then than there are now. There was a dealers' yard on Epsom Downs. At present the number of people thought to be using
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Epsom Downs on a Sunday is about 40, which is not many. On Easter Day, 152 hack riders were counted.
Much has been made, rightly, of the number of people having their horses boxed. Somebody went to the trouble to count the number of horse boxes that came in on the three weekends of the Easter children's holidays. They counted all of seven horse boxes, carrying 15 horses. If Epsom Downs cannot take 2·133 recurring horses per day over a week-end, they should not be allowed to be used for anything. Certainly that is not very many. I am sure that the racing industry is making an enormous fuss over a problem which does not exist. People have had these rights and people's rights should not be taken from them unless there is a very valid case for so doing. The rights were curtailed in 1936, and up till now the Act has worked perfectly well.
The Instruction of the noble Lord, Lord Melchett, is not designed to amend the law but to say that the restricted access by hackers should continue; it says only that the Committee should satisfy themselves whether or not it is in the public interest that the present qualified right of access on horseback should be removed. That is all it says. It is not saying the Bill should be amended. It is not the custom in your Lordships' House to write in instructions to amend a Bill in Committee; at least, that is what I have been told on several occasions when I have been involved in private legislation. We have heard a lot recently about the paramountcy of the wishes of certain inhabitants. Nobody is claiming paramountcy for the hack riders. I am simply suggesting that the Committee should look very carefully at whether it is in the public interest that those rights should be curtailed when the present arrangements seem to be working perfectly satisfactorily.
5.10 p.m.
Lord Westbury: My Lords, I am grateful for the opportunity to congratulate my noble friend Lord Henley on introducing the Epsom and Walton Downs Regulation Bill and on explaining so clearly the intentions of the Bill. I should also like to congratulate the noble Lord, Lord Wigg, on his amendment. The last time that I spoke on the same side as him was over the Green Howards' band, and we won, so perhaps we might win again.
As a member of the Jockey Club, I am deeply concerned to see the future of racing and training at Epsom secured for the long term and, in particular, of course Derby Day, which is so much part of our heritage. I am most encouraged to find that the people of Epsom, as represented by the borough council, share my wishes and those of the Jockey Club to see racing retained at Epsom, and to see that the training of racehorses there remains a commercial proposition. The Bill contains a number of clauses connected with the viability of these enterprises, and I welcome them.
The promoters of the Bill have gone to considerable length in trying to preserve and protect the interests of the many people who use the downs for so many different purposes. Clearly, they have tried to balance fairly these diverse interests, but in the end the Bill must be something of a compromise. The hacking interests are obviously disappointed, but I doubt whether any of the factions have obtained exactly what they wanted from the Bill. I think that my noble

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friend Lord Henley has already adequately explained the need for some restrictions on free hacking, but it is my understanding that the trainers have offered concessions which go a long way to meet the claims of the hackers. Further major concessions to the hackers would not only damage the training grounds and thus threaten the viability of training at Epsom, to the long-term detriment of the local community, but would also constitute a hazard to safety. From my own point of view I should perhaps have liked to see more done for the racing and training fraternity, but I recognise that there has been the need for compromise.
I should like to say a few words on the subject of Sunday racing, as mentioned by the noble Lord, Lord Robertson of Oakridge. Having watched the successful passage through the House of the Shops Bill of my noble friend Lady Trumpington, I have detected that the climate of opinion against activities on Sunday is beginning to change, although actual change may not come for some time. Therefore I think it absolutely right that the possibility of Sunday racing at Epsom in the future should not be excluded by the Bill.
I believe that the Bill will make a considerable contribution to preserving racing and training at Epsom, which I look on as part of our national heritage. I know that I speak for all members of the Jockey Club in supporting the Bill wholeheartedly, and I wish it well in its passage through the House.
The Earl of Avon: My Lords, I join in the general appreciation of the House for the way in which my noble kinsman Lord Henley introduced the Second Reading of the Bill and explained it to us. I shall speak very briefly, to give an indication of the Government's views. Being surrounded by so many distinguished experts, whom I am delighted to find in agreement on this occasion, I should not dare to intervene on the subject of horseracing, nor for that matter to expound on the charms of Epsom and Walton Downs, or Ewell, when other noble Lords have such first-hand knowledge. However, it might be helpful if I confirm and endorse what a number of noble Lords have said: that, so far as the Government are aware, racing at Epsom and, in particular the Derby, will continue as it has always done, and that we know of no intention to abandon or disrupt Epsom as a training centre for racehorses.
The noble Lord, Lord Henley, and other noble Lords, mentioned the Bill's proposals to control caravans. These controls will bite mainly on the caravans of gypsies, who visit the Downs in large numbers each year for the Derby meeting, as my noble friend Lord Plummer of St. Marylebone mentioned. The Government are concerned that the proposals in the Bill conflict with the principles embodied in the Caravan Sites Act 1968. Under the 1968 Act local authorities are given powers to control unauthorised parking of caravans only after they have achieved "designation" under the Act by satisfying the Secretary of State that there is adequate accommodation for gypsies in the area. My right honourable friend the Secretary of State will pursue his objections to this aspect of the Bill in the usual way, by means of
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submitting to Parliament a report which can be considered at the Committee stage.
The Government have no objection in principle to the proposals set out in the Bill to control access for horseriders. We are content for matters concerning the management of the Downs to be considered in Committee, when the promoters and the petitioners can put forward their views in detail and the case can be considered fully.
5.15 p.m.
Lord Henley: My Lords, we have spent almost two hours discussing Epsom Downs, which I think is quite a good run for a Private Bill of this nature. In view of the fact that everyone is in agreement that the Bill should be given a Second Reading, I feel that it is unnecessary for me again to go over any of the ground. Therefore I commend the Bill to the House.
On Question, Bill read a second time and referred to the Examiners.
The Earl of Onslow: My Lords, I beg to move the Instruction standing in the name of the noble Lord, Lord Melchett, on the Order Paper.
Moved, That it be an Instruction to the Committee to whom the Bill is committed that they should satisfy themselves that it is in the public interest that the right of the public to have access on horseback to the Downs for air and exercise which was conferred by the Epsom and Walton Downs Regulation Act 1936 should be curtailed as proposed by the Bill bearing in mind the provisions of Section 4 of that Act safeguarding the interests of the racing and training industries.—(The Earl of Onslow.)
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, the Question is, That the Instruction standing in the name of the noble Lord, Lord Melchett, be agreed to.
Lord Wigg: My Lords, I beg to move the amendment standing in my name on the Order Paper to the Instruction of the noble Lord, Lord Melchett.
Moved, as an amendment to the above Instruction, to leave out all the words after "themselves" and insert "that the requirements of Section 4 of the Epsom and Walton Downs Regulation Act 1936, dealing with the Rights of Public over Downs, to preserve and control the use of the Downs for all users are recognised, but that, at the same time, the continuance of racing at Epsom and in particular the maintenance of the Derby and the preservation of Epsom as a training centre for racehorses is safeguarded".—(Lord Wigg.)
The Lord Chancellor: My Lords, the original Question was that there be an Instruction to the Committee to whom the Bill is committed in the terms set out on the Order Paper. Since then an amendment to the Instruction has been moved in the terms also set out on the Order Paper. Therefore, the Question that I now have to put is, That the amendment to the Instruction be agreed to.
5.17 p.m.
On Question, Whether the amendment to the Instruction be agreed to?
Their Lordships divided: Contents, 92; Not-Contents, 33.

DIVISION NO. 1

CONTENTS

Abercorn, D.

Manton, L.

Abinger, L.

Marley, L.

Ailesbury, M.

Melville, V.

Airey of Abingdon, B.

Merrivale, L.

Alexander of Tunis, E.

Mishcon, L.

Allen of Abbeydale, L.

Mottistone, L.

Atholl, D.

Murton of Lindisfarne, L.

Auckland, L.

Newall, L.

Banks, L.

Northchurch, B.

Bolton, L.

Nugent of Guildford, L.

Byers, L.

Ogmore, L.

Caccia, L.

Orkney, E.

Campbell of Alloway, L.

Orr-Ewing, L.

Chelwood, L.

Peart, L.

Colwyn, L.

Peel, E.

Cooper of Stockton Heath, L.

Pender, L.

Crawshaw, L.

Penrhyn, L.

Davidson, V.

Plummer of St. Marylebone, L.

Davies of Leek, L.

De L'Isle, V.

Rawlinson of Ewell, L.

Derwent, L.

Renton, L.

Drumalbyn, L.

Robertson of Oakridge, L.

Elliot of Harwood, B.

St. Aldwyn, E.

Enniskillen, E.

Sandford, L.

Ferrier, L.

Scarbrough, E.

Foot, L.

Sefton of Garston, L.

Fraser of Kilmorack, L.

Selborne, E.

Gainford, L.

Sempill, Ly.

Gormanston, V.

Soames, L.

Granville of Eye, L.

Spens, L.

Gridley, L.

Stanley of Alderley, L.

Hayter, L.

Stewart of Fulham, L.

Hemphill, L.

Stone, L.

Henley, L.

Strathcarron, L.

Hives, L.

Strathspey, L.

Holderness, L.

Strauss, L.

Hornsby-Smith, B.

Swansea, L.

Hunt of Fawley, L.

Terrington, L.

Hylton-Foster, B.

Teynham, L.

Jacques, L.

Trevethin and Oaksey, L.

Kilmany, L. [Teller]

Tweedsmuir, L.

Lane-Fox, B.

Vaux of Harrowden, L.

Lindsey and Abingdon, E.

Vivian, L.

Lucas of Chilworth, L.

Westbury, L.

McFadzean, L.

Wigg, L. [Teller]

Macleod of Borve, B.

Wigoder, L.

Mancroft, L.

NOT-CONTENTS

Beloff, L.

Longford, E.

Boston of Faversham, L.

McCarthy, L.

Brockway, L.

Melchett, L. [Teller]

Brookeborough, V.

Milverton, L.

Bruce of Donington, L.

Monson, L.

Cledwyn of Penrhos, L.

Moyne, L.

Collison, L.

Onslow, E. [Teller]

David, B.

Oram, L.

Elwyn-Jones, L.

Ross of Marnock, L.

Ewart-Biggs, B.

Rugby, L.

George-Brown, L.

Sainsbury, L.

Gosford, E.

Saltoun, Ly.

Hanworth, V.

Stewart of Alvechurch, B.

Hunt, L.

Swinfen, L.

Jacobson, L.

Wallace of Coslany, L.

Leatherland, L.

White, B.

Llewelyn-Davies of Hastoe, B.

Resolved in the affirmative and amendment to the Instruction agreed to accordingly.
On Question, Motion, as amended, agreed to.

Administration of Justice Bill [H.L.]
Further considered on Report.
5.27.p.m.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 7:
After Clause 6, insert the following new clause:
("Non-applicability of s. 2 of Unfair Contract Terms Act 1977
. Section 2 of the Unfair Contract Terms Act 1977 shall not apply to any contract term or to any notice given to persons generally or to particular persons, where the term or notice relates to entry to, or presence on, land for recreational purposes.").
The noble Lord said: My Lords, we discussed this amendment in Committee. Its purpose is to encourage greater access to the countryside and it is supported by the Central Council for Physical Recreation, by the County Landowners' Association and the National Farmers' Union. Both the latter, despite cries to the contrary, wish to encourage as much access as possible to the countryside. I hope that my noble and learned friend, who said that he would give some consideration to this matter, has something to add on what progress has been made. I beg to move.
The Lord Chancellor: My Lords, I beg my noble friend's pardon for having been distracted momentarily. If he noticed the source of the distraction he will realise that I had no alternative but to be distracted. As I said to my noble friend, and on Committee, I promised to make such consultation as I could and I wrote to him, at any rate, as at that stage, on 19th April. But I think that my noble friend is perhaps underestimating the difficulties which are raised by this amendment. To begin with, if one looks at it, it is an attempt to disapply the Unfair Contract Terms Act 1977 to anybody who approaches land or enters on land for recreational purposes. In parenthesis, I notice that the noble and learned Lord, Lord Elwyn-Jones, has just joined the Liberal Party!
My Lords, we all remember that a Labour Government passed the Unfair Contract Terms Act in 1977 and I very much doubt whether the Labour Party would be particularly keen on emasculating one of the clauses of their Bill after so short a period of time, As I have said repeatedly, I promised the Labour lawyers in both Houses that I would not allow this Bill to be introduced for the purpose of introducing controversial matter—in return for which they promised me that they would facilitate its appearing on the Second Reading and Committee in another place. I must be true to my word; I must deliver the goods which I promised to deliver. Unless they say that this would meet with their full approval, I am bound to tell my noble friend that it is something which is more than I can honourably do.
There are two suggestions which were made by him and I have made such inquiries as I can make in the time. I would ask the House to remember the history of this matter. The duty to trespassers has been the subject of judicial controversy throughout my professional lifetime and, on the whole, the most recent pronouncement of the House of Lords on the subject has been more generous to trespassers in the Herrington

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case than was my father when he presided over the House of Lords in the Addie v. Dumbreck case in 1929.
Again, I very much doubt whether the change which my noble friend suggests would meet with the kind of universal approval which alone is appropriate as the criterion for getting into this Act. It may be something which is desirable. I understand that those who are responsible for land, the landowners and the farmers—and I was both a landowner and farmer for about 14 years of my life, so I sympathise with their point of view—are of course concerned with the standard of care imposed on landowners as a result of the case of British Railways Board v. Herrington by the exercise of the judicial powers of this House.
One of the troubles is, of course, that neither of the two suggestions excludes urban land, nor could that be so if one was going to do it at all. The difficulties, both for urban land and urban consumers, are very much greater than for country land and country consumers. The state of play as a result of my inquiries appears to be something like this: I consulted about 40 bodies and individuals, and comments have been received already from a number of these. They are a very diverse group. They include the judiciary, local authority organisations, consumer groups, leisure groups and Government departments.
The state of play I think has varied to date. The consumer bodies, the Consumers' Association and the National Consumer Council—which are of no mean authority—and some water authorities, for instance the Welsh and the Yorkshire water authorities, are strongly against the suggested amendment to the 1977 Act. The noble and learned Lord the Lord Chief Justice thinks the Act could be amended but not in the sense proposed in the amendment, and only in a very limited and specific way. The Thames Water Authority was in favour of an amendment to the 1977 Act but I am not sure in what terms. The Council of Circuit Judges, the GLC and the National Caving Association—which I thought was only peripherally interested—did not comment.
On the statutory duty towards trespassers, nearly all those who commented on the suggestion agreed that a statutory formulation of the duty owed to trespassers would be helpful but they did not all say what it should be. Those who thought it would be helpful included the GLC, the Council of Circuit Judges, the water authorities and a number of Government departments. The noble and learned Lord the Lord Chief Justice thought that the common law position, as disclosed by Herrington is more favourable to occupiers than would be the suggested change in the law. Some of those who think that a statutory formulation of the duty owed to trespassers is needed do not think that criminal trespassers should be excluded from this and they of course form nowadays quite an important group. They include at least one Government department and the Lord Chief Justice. Having said that, I have tried to carry out my obligations to my noble friend; but I hope that, having regard to the peculiar character of this Bill, he will not feel it necessary to press his amendment in the light of the points I have chosen to put to him.
Lord Elwyn-Jones: My Lords, I apologise to the noble and learned Lord and to the House for adding to
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the "Department of Confusion", first of all by interfering with the noble and learned Lord on the Woolsack, which is a most regrettable error on my part, and then adding to the confusion by appearing to join the Liberal ranks by sitting upon their Benches in order to hope to avoid further confusion to the noble and learned Lord. My apologies, my Lords.
Lord Rawlinson of Ewell: My Lords, those of us who might be attracted to my noble friend's proposal I hope will appreciate that what the noble and learned Lord has said is overwhelming and therefore I hope my noble friend will not press this matter although there is much sympathy in many quarters for it.
May I take this opportunity, which is the first one for me of speaking again on this Bill, of withdrawing something that I said on the Committee stage? I say that because I heard what the Chief Whip said about discussion on this Bill ending tonight at half past seven and we may not have reached the subject upon which I wish to direct my apology. Secondly, I have to leave for Strasbourg for a professional engagement.
When I spoke on the Committee stage it was with reference to the new clause moved by the noble Lord, Lord Gifford. He referred to the case of the Home Office v. Harman. I spoke of the conduct of the trial out of which the contempt arose. I referred to the case of Williams v. Home Office. In referring to the circumstances of that case I said that it led me to have grave misgivings about the conduct of counsel in that case. What I said could be taken as a reflection upon counsel for that plaintiff. Since the Committee stage, I have had a private meeting with that counsel. He has shown me his notes and explained the case to me. He gave me his assurance that nothing he did was designed in any way to create a situation wherein the documents could later be made public for another purpose.
I fully accept that assurance. I told counsel that I would make this clear at this stage of the Bill at the first opportunity I had. So I unreservedly withdraw any reflection on the conduct of counsel and I regret that I should have dealt with the points I wished to make by causing a reflection upon him which I wholly accept as being unjustified.
Lord Sandford: My Lord, may I return to the matter of this amendment? I had always thought that the Labour Party were particularly keen to see access to private land increased. If that is so, could not the noble and learned Lord, Lord Elwyn-Jones, say as much and confirm that for those reasons and in this case this amendment in this Bill would be acceptable to the Labour Party? If he could say so, would the amendment therefore be the more acceptable to my noble and learned friend on the Woolsack?
Lord Elwyn-Jones: My Lords, I am invited to intervene in this controversy. I venture to think that it is an additional controversial matter outwith the general purposes of the Bill. I sympathise with the observations of the noble and learned Lord the Lord Chancellor to try to limit, so far as we reasonably can, the content of what goes on under what is admittedly a large umbrella.
Lord Hylton: My Lords, before the noble Lord Lord Stanley, replies, may I say that I feel that this subject is one which needs the very greatest possible care. I say that as being associated with the ownership of a labyrinth of underground caves, not very far away from a large, metropolitan area. I hope that if the law is to be changed we shall make the greatest effort to get it absolutely right.
Lord Stanley of Alderley: My Lords, I thank noble Lords for the remarks that they have made on this amendment. I accept that it has become a controversial matter though, in my opinion there was no need for it to be so. I find it rather difficult to say and if I use the word, "idle" I hope that my noble and learned friend—when I refer to his department as possibly being idle—will treat it in the way that it is treated in the army—in a fairly good humoured way. What happened was that there was a conference nearly a year ago to try to discuss these matters, and the three main parties which I have mentioned—the Central Council and the two main organisations that are responsible for or have affairs with land—agreed. Since then it seems to me that not a great deal was done until these last three or four weeks or so, but perhaps I am being unfair. All I am asking my noble friend, which I think I have got from him, is that he will keep a watching brief on this matter in case things do go wrong. So far they have not gone wrong, I am glad to say, and he will make some progress, which obviously he has, by the large detail he gave to me, in which case I beg leave to withdraw this amendment.
Amendment, by leave withdrawn.
5.42 p.m.
Lord Wigoder Lord Wigoder moved Amendment No. 8:
After Clause 6, insert the following new clause:
("Assessment of damages

ACTIONS FOR DEFAMATION
.—(1)Damages recoverable in actions for defamation shall be by way of compensation only.
(2) As from the commencement of this Act it shall not be competent for a court to make an award of punitive or exemplary damages in an action for libel or an action for slander or an action for defamation, whether any such action was brought before or after the commencement of this Act.
(3) Nothing in this section shall affect the award of aggravated compensatory damages.").
The noble Lord said: My Lords, Amendments Nos. 8, 9, 10 and 11 are for new clauses which deal with certain aspects of the law on defamation. I venture to think they are clearly germane to this Bill and its Long Title. They undoubtedly refer to the administration of justice and matters connected thereto, and actions for defamation are not entirely dissimilar to actions for damages for personal injuries, which are of course covered specifically by various clauses in the Bill.
These four new clauses are somewhat more felicitously drafted than my normal attempts, the reason being that they are in fact extracted verbatim from the draft Bill which was appended to the report of the Faulks Committee on defamation, a distinguished body which reported in 1975 after some three years' hard labour, in the course of which I do not think they were granted parole! Having reported in 1975, their report has been in fact consistently ignored by
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Governments of both parties ever since. What I have endeavoured to do with these four amendments has been to extract four clauses which are important and which are, I hope, the least likely to arouse opposition and which I believe to be of particular importance to the press, who are very susceptible if the law of defamation appears to be bearing somewhat oppressively upon defendants in such actions.
I entirely accept that, with this Bill in its present state in your Lordships' House at this time in the parliamentary Session, if these are matters of controversy I should be placing the Bill as a whole in a difficulty if I were to endeavour to press these matters. I have ventured to indicate to the noble and learned Lord on the Woolsack that I hope one or more of those proposed new clauses might be acceptable and will not be regarded as too controversial. But I have also ventured to indicate to him that, if he takes the view that they are controversial and might therefore imperil this Bill as a whole, I will appreciate that position. I would be very grateful, if that were so, if the Government could give some indicaton of their current thinking on the matters raised by the four new clauses so that they can go back on the agenda for active political discussion. If in due course the noble and learned Lord takes that line, then perhaps I might say now that I shall most certainly ask leave to withdraw the various amendments. As I have said, there are four amendments and I hope it will be convenient if I deal with Amendment No. 8 separately and then, with your Lordships' leave, take Amendments Nos. 9 and 10 together and finally deal with Amendment No. 11 separately.
Amendment No. 8 deals with the award of damages in actions for defamation. Your Lordships will know, of course, that at the present time damages may be by way of compensation, and also in addition may be punitive. Compensatory damages arise under two headings, I think. First, where there is an award made to the plaintiff for injury to his reputation and, secondly, where there are what I think are usually known as aggravated compensatory damages and an award is made to the plaintiff because of injury to his feelings which has been caused by the high-handed and oppressive conduct of the defendant.
This new clause safeguards the award both of compensatory damages and of aggravated compensatory damages, but what it also seems to do is to abolish the present situation in which punitive damages may be awarded. It is perhaps tautologous to say that punitive damages are awarded by way of a punishment. It is clear, I think—although not everything is clear from the decisions of noble and learned Lords—in the case of Cassell v. Broome that these punitive damages may be awarded either where Government servants have somehow behaved in some outrageous way or—which is perhaps rather more frequent—where it appears that the defendants might make a profit on their defamation if all the defendants had to do as a result of the action was to compensate the plaintiff for the loss which he himself had sustained. That means in effect that punitive damages are really a fine, a financial penalty, which does not arise out of the plaintiff's loss in any way but which is ordered, unlike other fines, to be paid not to the state but to the plaintiff.
I do not think I need argue the equity of that matter any further than simply by citing the words in the Cassell v. Broome case of the late noble and learned Lord, Lord Reid, with whose observations very few of your Lordships in this House would ever at any time have wished to disagree. In that case the noble and learned Lord said:
"I think that the objections to allowing juries to do beyond compensatory damage are overwhelming. To allow pure punishment in this way contravenes almost every principle which has been evolved for the protection of offenders".
I should like, if I may, simply to extract one or two phrases from the rest of the judgment:
"there is no definition of the offence…there is no limit to the punishment … it is inflicted by jury without experience of law or punishment and there is no effective appeal against sentence".
The reason for that, as the noble Lord said, is that the Court of Appeal cannot substitute its own award. I venture to think that the arguments in that passage from the noble and learned Lord are irresistible and I hope that the noble and learned Lord on the Woolsack may find it possible to say that this amendment, No. 8, is one which might be included in this Bill as not giving grounds for real controversy. I beg to move.
Lord Rawlinson of Ewell: My Lords, while, on a Bill such as this, some of the comments which the noble and learned Lord has already made—and which I think the noble Lord who moved this amendment anticipated—must be an answer, and while no one is keener than I to see the law of defamation enacted in a proper form, I fear, much as I appreciate the views expressed by the noble Lord, that to introduce just one clause into this Bill would not be wholly appropriate. There is an argument on the other side. The trouble, always, is that juries in libel actions will give these vast damages and even, oddly enough, when the party is not a newspaper. They seem to get into their minds the belief that damages should be greater for an attack upon a person's reputation, because, I suppose, they are offended by it, than almost anything else.
While the control of damages is one of the great problems in the law of defamation, one must also say that the damage which can be done to a human being by calumny is sometimes quite incredible. It is only those people who have experienced it who realise how deep and how grave can be the harm which calumny can do. If your Lordships remember, Beaumarchais said:
"Calumny, calumny, leave me calumny",
and Marie Antoinette said,
My enemies will destroy me, if I calumny".
In a sense, it has a very grave and immensely damaging consequence.
On the other hand, as regards damages which are punitive or exemplary, which have been recommended against by the Faulks Committee, there have been occasions when there has been such conduct and such behaviour purely for the publisher's own profit. He has sought to tell lies, knowing that they are lies, about other people. There are occasions when, perhaps, it is very useful to have this protection. But it is a matter for grave debate and I would say that, interesting as the matter raised by the noble Lord is, I would prefer to see a proper debate about the law
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of defamation, rather than introduce it into this useful Bill, and perhaps jeopardise all the other useful things which we are trying to do in it.
Lord Campbell of Alloway: My Lords, if consideration is to be given to this amendment, then consideration might also be given to one aspect of damage, although, of course, I take aboard the observations which my noble and learned friend Lord Rawlinson has just made. But your Lordships may think that this aspect is rather special, rather odd and extremely unsatisfactory. It arises in the context of subsection (1) of the proposed new clause, which is Amendment No. 8.
I hope it is not out of older—if it is, I hope that I shall be so informed and I shall resume my seat at once—to suggest that in defamation cases, where the only issue on appeal is the quantum of damage, the Court of Appeal should be able to substitute its own assessment for that of the judge or the jury, instead of ordering a new trial with the attendant delay and the attendant expense which, in the case of some private litigants, can defeat justice. This power of substitution should be applicable in cases of misdirection, non-direction, wrongful admission of evidence, wrongful exclusion of evidence and, indeed, where the verdict is unreasonable; such power, of course, being always discretionary for the Court of Appeal and never mandatory. It is so unsatisfactory that I respectfully ask—I hope that it is not controversial; if it is, let it be discarded—that when consideration is given to this aspect, if it is felt that this raises a serious problem, it might nonetheless be right to seek to deal with it on its merits or, as I prefer to put it, on its want of merits.
The Lord Chancellor: My Lords, I should like to thank all three noble Lords who have played their part in this debate. I should also like to thank the noble Lord, Lord Wigoder, for the way in which he introduced the amendment, because I appreciate very much indeed consideration for the personal difficulties in which I stand in the conduct of this Bill.
But I am bound to start by saying this. In my experience—and I shall try to justify what I am about to say—everything to do with defamation is controversial and most things to do with damages are controversial. I can only illustrate that by telling the House what some Members of it present already know very well, which is the history of this issue of punitive damages during my lifetime.
When my father was first called to the Bar, almost every issue in civil cases in the King's Bench division, as it then was, was tried by a jury. The very wide range of cases was such that a judge, in directing the jury, would direct them that it was open to them to find punitive or exemplary damages, which meant just what the noble Lord, Lord Wigoder, said. There came a time, of course, when the civil jury was virtually abolished, in practice, except for a very narrow range of actions, of which libel and slander, the defamation cases, were one and of course fraud was another. The effect of that was very largely to exclude punitive damages in a very wide range of cases, although a judge alone sometimes awarded them on a fairly modest scale.
Then came the case of Rookes v. Barnard in 1963 or

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1964—I cannot remember the exact date. Then a united House of Lords almost entirely restricted the application of punitive damages to two cases. That was not of course a defamation case but it applies equally to defamation in particular. The two cases come from the judgment of the noble and learned Lord, Lord Devlin, when he said:
"The first category is oppressive, arbitrary or unconstitutional action by the servants of the Government".
I do not believe that to abolish that at this present stage would be uncontroversial. On the contrary, I think that oppression by persons in an official position under the Government is very much in the mind of the ordinary person on the Clapham omnibus, and I do not think that the straightaway abolition of that category would prove uncontroversial. I shall come back to libel in a moment, because I have a little to develop on this argument. The second category was cases where the defendant's conduct has been calculated by him to make a profit for himself which might well exceed the compensation payable to the plaintiff.
Of course, the first case does not affect the press at all; it affects servants of the Government. The second case can affect the press and, in particular, it did affect a publisher, though not the press, in the subsequent case of Broome v. Cassell, to which I shall come in a second. I think that juries believe—and they are, after all, supposed to be the man or woman on the Clapham omnibus—that there are cases when people will deliberately commit defamation, in order to make a profit for which mere compensation would not be a sufficient deterrent. Although I agree with much of what Lord Reid said—and I think he was backing up the decision of the noble and learned Lord, Lord Devlin, in that case, in spite of his devotion to his own discipline of Scottish law to which he was more accustomed by upbringing—I do not think that the man and woman who are concerned with oppression by publication of this kind (Broome v. Cassell was such a case) would treat the abolition of the second category as uncontroversial. I must say to the noble Lord, Lord Wigoder, that I very much doubt whether the issue of defamation is so different from the other rather narrow ranges of cases where punitive damages are still applicable that it deserves special treatment. I find that to be a very strong argument the other way.
I now come to Broome v. Cassell which I had the traumatic experience of presiding over in the House of Lords. To illustrate how everything to do with defamation or damages is controversial, I should like to recount the nature of the trauma to which I was then subjected. In Broome v. Cassell there was an action for defamation arising out of the operation of the PQ17 convoy in the Northern Waters. The publisher and the author had attacked the honour of a naval officer who was plaintiff in the action. At all events, the jury, pursuing their line under Rookes v. Barnard—that is the restricted line of cases—were directed by the judge that they could bring in punitive damages. In fact, they brought in £40,000, which may or may not have been a good thing. But that is what they did.
When the case reached the Court of Appeal, a united and enthusiastic Court of Appeal, led by the formidable figure of the noble and learned Lord the Master of the Rolls himself, decided not merely that the jury were entitled to bring in £40,000 on the restricted
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grounds given by Lord Devlin but that the House of Lords had been entirely wrong to restrict them in any way. So Lord Denning, with two members of the Court of Appeal, overruled the House of Lords on the ground—which obviously, if I may say so firmly, was wrong—that the House of Lords had done it by mistake, per incuriam. Lord Devlin then came to me privately and, as perhaps he would permit me to say, complained of his treatment by the Court of Appeal. He said that this would not do. So, greatly assuming —I was then a young and enthusiastic Lord Chancellor—I summoned a House of Lords, consisting of no fewer than seven Law Lords, over which I presided because I realised that matters of great constitutional importance arose. We divided on every issue in that case: 4 to 3 and 3 to 4. In every instance I was happily one of the majority. Otherwise they were quite differently constituted majorities. But whatever else was true, all of us said that Rookes v. Barnard was a valid authority, and so it has remained ever since.
To show how differently people approach this problem—I am only illustrating the point because it is rather controversial—Lord Dilhorne agreed in effect with Lord Denning that we ought never to have gone down the restricted line in Rookes v. Barnard. Lord Reid, being brought up as a Scotsman where damages are called solatium, which is a word not known to English law, did not like punitive damages, although he was prepared to go along with his English colleagues, it being English law. Others took different views about different degrees of it. So the original award of the jury stood. Having described how seven Law Lords divided on about five questions, each with a differently composed majority except that in each case the majority included the Lord Chancellor, I can only say that I think I have established the point that anything to do with defamation partakes of controversy.
This brings me to the interesting suggestion which has been made by my noble friend Lord Campbell of Alloway about the powers of the Court of Appeal to substitute their own award of damages for that of a jury. This again will arouse the ire of Lord Devlin. I do not know whether it will be accepted or not, but he has written a book saying that in criminal cases, at any rate, juries should be respected and never interfered with by the Court of Appeal. I am not particularly in favour of jury trials for defamation. I will tell the House, frankly, that that is my private opinion. But to try to take away the right of trial by jury for defamation, which would be one of the most constructive things one could do with it, would create a parliamentary furore. So there we are. Everything is controversial in this field. That is why I must say to the noble Lord, Lord Wigoder, that I cannot accept this as a mild, uncontroversial amendment.
There is only one other point I ought to make. I am rather in dust and ashes. To the late Sir Neville Faulks, whom I appointed to the disagreeable task of reforming the law of defamation, I owe a public apology, despite his sad and premature demise. Not only did I appoint him to that task but when I was in Opposition I promised him that I would try to draft a Bill which gave effect to some of the provisions of his defamation report. This was a very difficult thing to do because there were five minority reports on different

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topics—again illustrating the difficulty of legislating on defamation without controversy. In the end I did not redeem my promise. I became Lord Chancellor again before I had had the opportunity to do so. When I sat down to try to draft (because there was no draft Bill attached to his report, so far as I remember) and put together a Bill which gave the meat of the law on defamation in its revised form, I found that it was beyond my powers to do it.
Having said this and having made my own apology in my own way, I agree that the law of defamation and the law of damages probably need to be reformed. However, I am quite sure that I cannot take it on board in this Bill. I welcome very much both the subsequent debates which will take place and the debate which has taken place because these are very important topics. I am very glad that your Lordships' House has had the opportunity to hear three such valuable speeches from noble and learned friends and from the noble Lord, Lord Wigoder, but I must ask the noble Lord not to press the matter at the present time. I am so sorry.
Lord Wigoder: My Lords, I am grateful for the observations which have been made on the amendment: the interesting suggestion of the noble Lord, Lord Campbell of Alloway, the very helpful observations of the noble and learned Lord, Lord Rawlinson, who has very wide professional experience of litigation of this nature, and of course the most interesting and helpful observations of the noble and learned Lord on the Woolsack. I think that a draft Bill was in fact appended to the Faulks Committee's report. If not, I am wondering where I got the four draft clauses from which are the subject of these various amendments. I am persuaded by the noble and learned Lord on the Woolsack that perhaps there is just the slightest element of controversy about this amendment and, in accordance with the indications I gave when I tabled it, I ask for your Lordships' leave to withdraw it.
Amendment, by leave, withdrawn.
6.9 p.m.
Lord Wigoder Lord Wigoder moved Amendment No. 9:
After Clause 6, insert the following new clause:
("Limitations of actions. 1939 c. 21.
.—(1) At the end of the proviso to subsection (1) of section 2 of the Limitation Act 1939 (which subsection provides, among other things, that there shall be a limitation period of six years for actions founded on simple contract or on tort) the following proviso shall be inserted:—
"Provided further that in the case of actions for defamation, this subsection shall have effect as if for the reference to six years there were substituted a reference to three years".
(2) In the case of actions for defamation, section 22(1) of the said Act of 1939 (which extends the period of limitation in certain cases of disability) shall—

(a) have effect as if for the words "six years" there were substituted the words "three years"; and

(b) not apply unless the plaintiff proves that the person under the disability was not, at the time when the right of action accrued to him, in the custody of a parent.

(3) Where, because the plaintiff did not know the relevant facts, an action for defamation has not been brought within the period of three years mentioned in subsection (1) or (2) of this section, such an action may with the leave of the court and on notice to the proposed defendant be brought within the period
1300
of 12 months from the date on which the plaintiff acquired knowledge of such facts; and the court shall have absolute discretion in deciding whether or not to grant leave under this subsection.
(4) Nothing in this section shall affect any cause or right of action which accrued before the commencement of this Act.").
The noble Lord said: My Lords, may I try again, in the hope that this is even less controversial than the previous amendment, and ask for your Lordships' leave to move Amendment No. 9 and with it to speak to Amendment No. 10. I hope very much that that leave will be granted, because if I am compelled to speak to Amendment No. 10 separately I shall find myself having to talk about various terms of art in Scottish law which are wholly unintelligible to me personally.
The position is that the two clauses—Amendment No. 9 relating to the situation outside Scotland and Amendment No. 10 relating to the situation in Scotland —are an attempt to reduce the limitation period which at present exists for defamation actions of six years to a period of three years. The position is that the six-year period within which actions must be commenced was imposed by the Limitation Act 1939. In 1975 that period was reduced to three years for actions for personal injury but, perhaps for some rather strange reason, was still left at six years for actions for defamation. I leave aside the slightly technical matters which do not concern the principle with which I am involved.
There is dealt with in subsection (2) of the first new clause a situation where the plaintiff may be under a disability at the relevant time. There is dealt with in subsection (3) a situation where relevant facts may come to the notice of the plaintiff only after the relevant period has expired. The real issue is whether the limitation period ought not to be reduced from six years to three years to bring it into line with actions for personal injury.
This again was the proposal of the Faulks Committee and indeed it might perhaps be arguable that three years, if anything, is still on the long side. The arguments in favour of halving the present period from six years to three years in line with personal injury actions are, I would have thought, self-evident to your Lordships. There is the first proposition that if a plaintiff is concerned about the damage done to his reputation, he should seek to vindicate it as quickly as possible, or at any rate within a reasonable period of time, and not wait until almost six years have elapsed before beginning proceedings affirming that his reputation has been seriously damaged.
Secondly, justice may perhaps require that the defendants should not be prejudiced, as they are at the moment, by what is an excessively long period. I accept that the situation was at one time somewhat worse, when any writ for defamation was regarded as having a "gagging" effect and prevented all comment by the press for the full period during which the writ was in existence. The situation is still that where a writ has been issued, the press in particular have to be extremely careful about such comments as they may make on matters which are subject to the writ.
The real problem, which not only the press but all defendants face where the period is as long as six years, is that in that time witnesses and journalists may move away, or may change from one newspaper

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to another; records may not be kept for the whole of that time; copy might be destroyed; notes might be lost and memories might fade. It becomes extremely difficult for the defence to conduct a case properly, fairly and competently if the events which are complained of are not in fact complaned of for a period of almost six years from the date of the particular incident. I hope that in those circumstances the noble and learned Lord might find this amendment a shade more acceptable than the previous one. I beg to move.
6.13 p.m.
Lord Rawlinson of Ewell: My Lords, I react to this amendment in a very similar way as to the last amendment, attractively as the noble Lord, Lord Wigoder, presents it. I think that there is a very strong case for the substance of what he said and the substance of this particular amendment. But again, would it not look a little strange to make this alteration in the law of defamation in the middle of this Administration of Justice Bill? The noble Lord may say that this Bill deals with damages for personal injuries and so we can include too a little bit about defamation. However, I believe it would look odd and strange, and I think it merits much fuller consideration.
May I also say to the noble Lord that he always uses journalists in his illustrations, whereas a great deal of defamation has nothing to do with newspapers. It often concerns individuals, neighbours and other people who are not journalists. Therefore, one has to look at the subject of defamation not only from the point of view of the press—either as a defendant or plaintiff—but also from the point of two individuals where an alleged tort has been committed by one of them. I personally would like to see in a defamation Bill the period of three years substituted for the period of six years, but I do not feel that this is the right time and the right Bill.
Lord Elwyn-Jones: My Lords, I feel that I should join with the noble and learned Lord in what he said, while remembering fondly the memory of the noble and learned Lord, Lord Justice Faulks. The sense of wearing sackcloth and ashes that I have arises because during my years on the Woolsack, owing to various reasons which it would not be appropriate for me to go into now but mainly a failure to reach an agreed position, we did very little about this. I believe it is right that this whole problem of the law on defamation and all its complications should be reconsidered legislatively, and the noble Lord, Lord Wigoder, has rendered a service in opening the matter again in this clause—subject, however, to my view that perhaps this is not the appropriate vehicle. Whether he thinks that the matter would be furthered by putting down a Motion to draw attention to the Faulks Report is a matter for him to consider, but it ill becomes me to make any suggestions in view of my own inaction. I am very sorry.
The Lord Chancellor: My Lords, again I think that the noble Lord, Lord Wigoder, has performed a public service by ventilating this particular recommendation. I am grateful to him, although I tend to take the view of the two noble and learned Lords who have contributed to the debate on this amendment. The noble Lord, Lord Wigoder, could have said that not only did
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the Faulks Committee decide in favour of a three-year period of limitation but so did the Law Reform Committee in effect, because although it made no precise recommendation, it did point out the analogy which the noble Lord, Lord Wigoder, himself used, between personal injury cases and defamation cases.
I believe there is a case for this change, although I also believe that we would be making a mistake by inserting it into this Bill. Incidentally, if the noble Lord, Lord Wigoder, wanted to put down a Private Member's Bill to test opinion, I will just point out that he will have to substitute references to the Limitation Act 1980 to the Limitation Act 1939 contained in his draft clause, because that is in fact the correct vehicle for amendments at the present time.
In addition, I should like to apologise to the noble Lord, Lord Wigoder, for my stupid mistake in saying that there was no draft Bill attached to the Faulks Report; It was a stupid mistake and there was really no justification for my lapse. Since the noble Lord has reproduced parts of that draft Bill in his three draft clauses, I can only thank him for treating me so tenderly.
Oh the whole, I am not at all sure whether this amendment would make the Limitation Act 1980 even more complicated than it is at the moment. But, at any rate, I cannot say that I have any strong objections at some stage to a reform of limitations law, although I think this is unlikely as the Act was passed so recently as 1980. I cannot say that I have any violent objections to such a change in the law, but I would rather the noble Lord did not try to insert such a change in the present Bill, for reasons I have given already. Almost anything connected with defamation, and a good many things connected with the law of limitations, tend to be controversial. It may very well be that if this thing was launched, either by the noble Lord or by someone else, as a Private Member's Bill one could see whether one could give it a fairer wind than one has been able to give this particular amendment. That really is my answer to the noble Lord.
Lord Wigoder: My Lords, I am much encouraged by the consensus of opinion expressed by three very distinguished lawyers who have spoken on the subject of this amendment. I would like, if I may, to express my particular gratitude to the noble and learned Lord on the Woolsack for his helpful suggestion that it might be possible to proceed in another way in order to secure an amendment which is clearly regarded in all parts of the House as desirable. I would like to reflect on that, and in the meantime I ask your Lordships' leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 10 not moved.]
Lord Wigoder Lord Wigoder moved Amendment No. 11:
After Clause 6, insert the following new clause:
("Striking out and dismissal of actions
.—(1) If an action for defamation has been struck out or dismissed, no further writ in respect of the same cause of action shall he issued without the leave of the court.
(2) Where at any time the plaintiff in an action for defamation has not taken any step in the action for a period of 12 months, the action shall, on the application of the defendant, be dismissed for want of prosecution, unless the court on cause shown otherwise orders.").
The noble Lord said: My Lords, this is a matter I can take, if I may, with even more brevity. The present position, as I understand it, is that if a writ is issued in an action for defamation the decision in Birkett and James leads to the conclusion that whatever delay then follows the issue of the writ it is not possible for the defendant to move to strike the action out until the limitation period has expired, whether it be three years as I was proposing in a previous amendment or six years as it is now. This would appear to be a quite intolerable situation so far as defendants are concerned. Therefore, all this proposed new clause provides is, first, if the plaintiff goes to sleep, as it were, for a period of at least 12 months between any of the stages of an action, then the defendant shall have the right to have the action struck out, unless there are special circumstances in which the court may decide to the contrary. Secondly, because it must be complementary to that right, if an action is thus struck out it cannot simply be set down again the next day, as I believe it can at the moment, unless leave of the court is given that a writ should be issued for the same cause of action. I hope that the proposals in Amendment No. 11 are self-explanatory. I beg to move.
The Lord Chancellor: My Lords, there being no great enthusiasm to speak on either side, may I say to the noble Lord, Lord Wigoder, again thanking him for what he has done in raising this subject, that here I am a little less favourable to what he has said, on its merits. I do not see that, as regards striking out or dismissal for want of prosecution, a defamation case is entitled to any preferential treatment over any other kind of proceeding. That tends to be my opinion. There was a time, certainly when my father was practising at the Bar, when the practice at the Bar was practically never to apply to strike out or to dismiss for want of prosecution. I think that has had a salutary effect on gave me when I went to the bar; he said, "You will only succeed in resurrecting the action".
Since then the Court of Appeal has taken a rather more robust view and has said in effect that where there has been an inordinate and inexcusable delay the action shall be struck out or dismissed for want of prosecution. I think that has had a salutory effect on dilatory plaintiffs. I suspect that that is the right line, to leave it not on a statutory basis but subject to the discipline imposed by the court, which takes into account the interests of the defendant and the interests of justice on behalf of the plaintiff before it exercises the rule. I do not see what the case is for taking the law of defamation out of the general principles relating to striking out or dismissal for want of prosecution and giving it preferential treatment. So I am rather less favourable to this amendment on its merits than I have been to the other two amendments.
Lord Wigoder: My Lords, I am grateful for those observations. I think, if I may say so, the problem largely with defamation writs which does not arise with writs in other causes of action is the, now rather more limited, gagging effect, but nevertheless the gagging effect which the issue of the writ may in certain circumstances have. However, I would like to reflect on what the noble and learned Lord has said. Clearly
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this is again not a matter which it is the feeling of the House would be appropriate to proceed to include in this Bill. I ask your Lordships' leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Award of provisional damages for personal injuries: Scotland]:
The Lord Advocate (Lord Mackay of Clashfern)The Lord Advocate (Lord Mackay of Clashfern) moved Amendment No. 12:
Leave out Clause 12 and insert the following new clause:
("Award of provisional damages for personal injuries: Scotland.
12.—(1) This section applies to an action for damages for personal injuries in which—

(a) there is proved or admitted to be a risk that at some definite or indefinite time in the future the injured person will, as a result of the act or omission which gave rise to the cause of the action, develop some serious disease or suffer some serious deterioration in his physical or mental condition; and

(b) the responsible person was, at the time of the act or omission giving rise to the cause of the action,

(i) a public authority or public corporation; or

(ii) insured or otherwise indemnified in respect of the claim.

(2) In any case to which this section applies, the court may, on the application of the injured person, order—

(a) that the damages referred to in subsection (4)(a) below be awarded to the injured person; and

(b) that the injured person may apply for the further award of damages referred to in subsection (4)(b) below,

and the court may, if it considers it appropriate, order that an application under paragraph (b) above may be made only within a specified period.
(3) Where an injured person in respect of whom an award has been made under subsection (2)(a) above applies to the court for an award under subsection (2)(b) above, the court may award to the injured person the further damages referred to in subsection (4)(b) below.
(4) The damages referred to in subsections (2) and (3) above are—

(a) damages assessed on the assumption that the injured person will not develop the disease or suffer the deterioration in his condition; and

(b) further damages if he develops the disease or suffers the deterioration.

(5) Nothing in this section shall be construed—

(a) as affecting the exercise of any power relating to expenses including a power to make rules of court relating to expenses; or

(b) as prejudicing any duty of the court under any enactment or rule of law to reduce or limit the total damages which would have been recoverable apart from any such duty.

(6) The Secretary of State may, by order, provide that categories of defenders shall, for the purposes of paragraph (b) of subsection (1) above, become or cease to be responsible persons, and may make such modifications of that paragraph as appear to him to be necessary for the purpose.
And an order under this subsection shall be made by statutory instrument subject to annulment in pursuant of a resolution of either House of Parliament.").
The noble and learned Lord said: My Lords, this amendment seeks to leave out the existing Clause 12 and substitute a new clause for it. The actual effect of the amendment is not perhaps as drastic as might appear at first sight. We sought the view of the Lord President of the Court of Session on the form of this provision, and this amendment is proposed in the light of the views which he very kindly supplied to us, and we have also taken the opportunity to make some drafting improvements.
Perhaps the principal change that has been made can be characterised as putting on the face of the primary legislation what had been intended to be left for rules of court. The amendment substitutes the word, "risk", for the word, "chance", in the first line of subsection (1)(a); the categories of responsible person to which Clause 12 applies are specified; "on the application of the injured person" is inserted, so that it is entirely up to the pursuer whether he goes for a final settlement of his claim or chooses to apply for provisional damages in the first instance with the possibility of a second instalment later. There is also provision for the court to stipulate a time limit. Redrafting of subsections (2) and (3) has been made in order to bring out the sequence of events and to make it clear that the two amounts of damages are not to be determined at the time of the original inquiry, but that at the original inquiry it is only the first award which is quantified and an application made to postpone the balance, the balance to be assessed when that application is made. There is also provision for the list of categories of responsible persons to be changed by the Secretary of State. These thoughts, as I said, were intended to be given effect to in any event, but it was thought by the Lord President advisable that they should be made on the face of the legislation. I beg to move.
On Question, amendment agreed to.
Clause 14 [Amendment and repeal of enactments]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 13:
Page 11, line 1, leave out ("the Damages (Scotland) Act 1976") and insert ("that Act").
The noble and learned Lord said: My Lords, Amendment No. 13 is a purely drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 14:
Page 11, line 18, at end insert—
("(3) Notwithstanding section 66(5) of this Act, where an action to which section 5 of that Act applies has been raised and has not, prior to the commencement of subsection (2) above been disposed of, the court shall not dismiss the action on the ground only that the pursuer has failed to serve notice of the action as required by subsection (6) of the said section 5.").
The noble and learned Lord said: My Lords, this is a technical amendment to ensure that actions which have been raised can benefit from the repeal of Section 5 of the Damages (Scotland) Act 1976 immediately this Bill comes into force. It means that the burden of notifying all the relatives imposed by Section 5 need not be pursued to the bitter end in such a case in view of the change in the law. I beg to move.
On Question, amendment agreed to.
6.29 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 15:
After Clause 16, insert the following new clause:
("Certain contract debts to carry interest.

STATUTORY INTEREST ON CERTAIN CONTRACT DEBTS
.—(1) A relevant contract debt shall carry simple interest by virtue of this section and in accordance with sections
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(Relevant contract debts etc.) to (Assignments etc.) below.
(2) In this Act "statutory interest" means interest carried by virtue of this section.").
The noble Lord said: My Lords, with the permission of the House, I will speak to Amendments Nos. 15 to 23 inclusive. Your Lordships discussed and gave support, except for the Government, to a similar amendment in Committee. I am therefore moving this slightly different amendment today hoping for similar approval, and maybe just some sympathy from my noble and learned friend the Lord Chancellor. I shall not repeat what I said in Committee for I know that those interested will have studied Hansard. But I would like to draw the attention of the House to the following points that have caused me or perhaps the House concern; most of them were kindly pointed out to me in a massive letter from my noble and learned friend the Lord Chancellor and, indeed, in his reply to me in Committee.
The first point that I noted was the concern that my original amendment would still allow the large firm to opt out of paying interest. I hope that this amendment has put that right, and, in particular, subsections (2) and (3) of my Amendment No. 16.
The second point is that there has been concern that this amendment would make the consumer more liable to pressure in two particular ways—and, of course, I look at my noble friend Lady Trumpington as regards this matter: first, by keeping interest on a consumer unable to settle, say, his or her gas bill or electricity bill, and secondly by depriving the right of nonpayment if the product is unsatisfactory to the consumer—a well known, I shall not say "trick", but a justifiable method of getting the product up to standard. The last point about bad products appearing on the counter is taken care of by subsection (2) of Amendment No. 21, and the first point, I suggest, could be covered very easily by delaying the commencement date of this part of the Bill until suitable consumer protection is arranged.
Thirdly, it has been said that statutory interest would put firms that are in financial problems into a worse position. If a firm cannot honour its debts, then in my opinion the sooner it goes to the wall the better because it will, in the end, cause less damage to those with whom it trades.
Fourthly, it has been said that my amendment will cause more paperwork. There is no need for any more paperwork at all because, as I must remind your Lordships, my amendment does not insist on a firm claiming interest.
Fifthly, my noble and learned friend the Lord Chancellor said in Committee that my amendment is controversial and would endanger his Bill. All I can say is that as far as the small trader, or indeed, the farmer is concerned, the Bill in its present form is controversial. It is not only noble and learned Lords who find things controversial: I find things controversial also.
I must repeat that it is the taking of just half of the Law Commission's suggestions that I dislike so much and, despite my noble and learned friend's appeal to the contrary, I really would rather have the whole of Clause 15 out than this, if I can call it, abortion of half of it. Although I appreciate that Clause 15 appears to give the small trader exactly the same advantage as the large one, it does not do so, because the Government I think have failed to understand what the small

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trader or farmer thinks. As a result of this—although his method of thought may be somewhat cussed, I suppose—Clause 15 will in practice mean that only the large trader will use the powers in this clause. Blackmail will enter into it, sadly maybe, but then I suppose most of life has an element of blackmail in it. But there is no need to encourage any more, which I believe Clause 15 does.
I therefore hope that the Government will accept my amendment or, if they cannot do that, then at some stage they will remove the whole of Clause 15. I beg to move.
Lord Mottistone: My Lords, I am advised in commenting upon this amendment by the CBI. It seems to us, as a basic point, that these amendments seek to reverse the decison of the Government which my noble and learned friend who sits on the Woolsack gave in a Written Answer to a Question by my noble friend Lord Chelwood on 18th December 1980, at column 1278.
In 1980 the CBI considered the question in depth, taking particular care to consult the smaller firms—the ones to which my noble friend Lord Stanley of Alderley referred. It was agreed that the proposal should not be supported. It would be ineffective unless contracting out were prohibited, but it would then be necessary for the Government to set the interest rate at a very high level; otherwise those seeking loans would find their trade creditors the easiest, possibly the cheapest, an entirely involuntary sources. It would in practice prove necessary to standardise payment terms throughout business, cutting across many traditional arrangements. The argument that the interest payment need not be enforced can be countered by the argument that there is nothing to prevent interest terms being included in a contract, or discounts allowed for proper payment. The CBI deprecates the practice of extending credit beyond the period provided for by contract and has made this view clear on several occasions.
It seems strange to me that my noble friend Lord Stanley proposes these amendments because the interests of small farmers, for whom I imagine he mainly speaks, are probably similar to those of small businessmen. Indeed, in his speech he seemed to say that he was talking for small traders, although the CBI would question whether that was so. However, we do consider that the subject requires further study. But we think that it is wrong in principle to introduce at a late stage in a miscellaneous provisions Bill a reform which has been rejected after extensive consultation and careful consideration in the relatively recent past, particularly when the consequences could be far-reaching. Thus I hope that my noble friend will not pursue this amendment. But, equally, I hope that the Government will agree that this is a matter which should not be allowed to drop but should be further studied by those who are most interested.
Baroness Trumpington: My Lords, my noble friend Lord Stanley of Alderley was indeed right when he said that I would wish to speak on behalf of consumers, and I wish to speak against these proposals because I certainly can foresee difficulties, particularly in distinguishing between the genuine and the fraudulent defaulter. A scheme such as that envisaged in this new clause would particularly discriminate against
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poor consumers, especially those already suffering from debt problems often arising from unexpected sickness or unemployment—and the unemployment aspect is very important. Creditors who seek interest already have the freedom to make this a term of the contract. This should continue to be the case without the need for statutory intervention.
Prices, which often already include an element in respect of anticipated late payment, would be unlikely to fall on the introduction of such a scheme. Even in the longer term there would be no guarantee that prices would be restrained. The statutory interest would simply represent an extra cost to some consumers with no guarantee that the benefit would be passed on to prompt payers. As I have said before, a statutory scheme cannot distinguish between the wilful defaulter and the debtor who is unable to pay. Statutory interest will represent an additional burden on the latter, for whom it will certainly not be an incentive for prompt payment.
Some of the practical problems which would be faced by consumers in calculating and paying interest are formidable. Consumers involved in a genuine dispute about the goods or service in question, may be dissuaded from pursuing complaints by the self-help remedy of withholding payments. Comparable problems may result where there is a dispute about the amount payable. A statutory interest scheme would benefit inefficient traders who do not stipulate for contractual interest and who are slow at pursuing debts; and it would be inequitable that consumers should not receive interest when payment is required in advance and that, for example, state benefits would not bear interest when paid late.
Therefore, on balance, I believe that a statutory scheme would have extremely undesirable implications for consumers. It would not be effective in those cases where there is genuine difficulty in paying. Existing court procedures, particularly with a wider discretion for courts to award interest on debts, should be used to deal with wilful defaulters. Moreover, the most effective method for achieving prompt payment would be to encourage the use of cash discounts for those who pay promptly. I hope that my noble friend Lord Stanley of Alderley and the other movers of this proposed new clause will take it back, have further discussions of the whole matter, and will not press it to a Division today.
Lord Wise: My Lords, in a Bill such as this it is with some considerable trepidation that I put my name to any amendments. But I do so to these amendments because I am certain that a scheme for statutory interest undoubtedly has great attractions for the smaller firms. As I understand them, these amendments would implement a scheme and, therefore, the smaller firms would be placed in a more beneficial position.
Although Clause 15 introduces changes of considerable benefit to creditors, enabling them to obtain judgment for interest in respect of any debt at date of commencement of proceedings, as my noble friend Lord Stanley has said, it is by itself not a very real help to small firms. There are a number of reasons why they could be reluctant to involve themselves in litigation. So obviously the right to obtain interest on overdue debts without undergoing the process of

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court proceedings must be a great benefit to all small businesses, particularly those engaged in agriculture, of which I have most knowledge.
I understand that there is concern that a scheme for statutory interest could place creditors in a position whereby debts owing to them would be ever increasing with no hope of recovery. But obviously this happens now and cases have to be dealt with as best they can; for the inability to pay arises from any number of reasons, entirely unrelated to the payment or not of statutory interest. I cannot envisage the new clauses creating any new problems in this respect.
My noble and learned friend the Lord Chancellor has said that these amendments could create controversy and they are controversial. I must admit that even as a layman I have one or two small reservations. For example, Amendment No. 22, dealing with the rate of statutory interest, would surely seem to be much simplified by declaring that the rate of interest should be made X per cent. above the bank base rate standing at the relevant date. Perhaps my noble and learned friend would be kind enough to clarify this for me when he replies.
Nevertheless, now that he has further considered them, I hope that these amendments will commend themselves to my noble and learned friend on the Woolsack and I hope that, to use his own words, he will be able to take these amendments on board in this Bill.
Lord Bruce of Donington: My Lords, these amendments will attract varying views among the party opposite, as we have already heard, and indeed my own views. They are, of course, completely non-party questions that are raised by this. This is fundamentally concerned, as the noble Lord explained in introducing his amendment, with putting into effect the draft legislation that was incorporated in the Law Commission Report on the Law of Contract, a report on interest. So far as I can see, the amendments that have been put forward by the noble Lord correspond almost exactly to the recommendations of the Law Commission.
I shall make this comment, which is indeed in no way intended to imply any disrespect to the members of the Law Commission who considered this. I regret to say that they did not include any accountants. Accountants, of course, are marginally concerned with matters of this kind, because fundamentally interest is also a matter of account and in my profession we have an opportunity of observing its effects at all levels, whether they be the effects on the debtor or on the creditor.
I am bound to say, and I speak for myself personally —and there are other views on the Benches behind me which are of equal validity—that I incline to the views of the noble Baroness, Lady Trumpington. At the lower end of the scale, the lower end of the income groups, there will be no doubt as to who suffers by the imposition of this particular piece of legislation which the noble Lord seeks to enshrine in this particular Bill.
However, I pass from that for just a moment to consider the whole impact of interest on our society. Interest now appears to be a dominant consideration. By the mere possession and deposit of funds, inert
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capital can now earn money at a far greater rate than anybody who is concerned in productive industry. If productive industry could earn a rate of some 15 per cent. of the capital employed in its business, it would indeed at the present time, under the present Administration, consider itself to be extremely fortunate. In this day and age we are becoming so interest obsessed that the mere possession of inanimate funds is a guarantee of income which then makes demands upon diminishing resources. This is a tragic commentary on our times: the fact that the mere possession of funds can now attract to its owners a far greater accretion of money than can be earned by people in the ordinary and honest exercise of their occupations and professions. I put this forward purely as a marginal comment, but it is, indeed, one which we at this time should certainly bear in mind.
Speaking on behalf of the Consultative Committee of Accountancy Bodies—with whose views I broadly concur, and this represents the accountancy profession in the United Kingdom—that committee takes the view, which I would commend to the House, that there should be no legislation of this kind unless there is a general public demand for it. This is a solution that may not commend itself to members of the legal profession because members of the legal profession, by training and by inclination, like to have a tidy solution to all the legal problems that arise. But my profession takes the view that such a change should not be embarked upon unless there is some widespread general public demand for it.
We note that of the 42 respondents listed as having commented on the Law Commission's working paper, 14 appear to be individuals, five firms, and the remainder from trade and other organisations. The CCAB say:
"We have some reservations as to whether this amounts to the substantial general public demand to which they have already referred".
Moreover, there is the firm view held within the accountancy profession, which is not wholly isolated from what happens in industry and commerce, that a scheme of statutory interest could have the effect of institutionalising slow payment of debts rather than accelerating their discharge. They say that, given that under the proposals it is open to the parties concerned to contract out of statutory interest, it seems that the cost of borrowing will not necessarily be placed on those that are enjoying credit.
I would commend to the noble Lord the following further observation that has been made by the consultative committee. They say this:
"We doubt that small firms would find the scheme of much assistance in practice. A small firm dealing with a large supplier of raw materials, and a large customer for its finished goods, might well find itself at a disadvantage. On the one hand the supplier may insist that his contract with the small firm should include a statutory interest, while on the other the customer may insist that his contract should exclude a statutory interest".
For these reasons, I trust that the noble Lord will withdraw his amendment so that it may receive further and possibly wider consideration than that which has been given by the Law Commission which, as I have shown, received representations from only a limited number of people and bodies. In general at this time we should refrain from adding further to the difficulties of the noble Lord, Lord Cockfield, or his successor at the Treasury. It has been demonstrably proved that

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the extremely high interest rates over the last three years have not subtracted from, but have contributed to inflation. I do not think that this House at this time should take any steps to aggravate the position beyond the appalling situation which exists now.
Lord Mishcon: My Lords, I promise your Lordships looking at the clock as I do, that I wish to speak briefly. Your Lordships will have noticed that I receded in regard at all events to the place where I was sitting only a few moments ago. I did so because, as my noble friend Lord Bruce has said, there is a difference of view here within parties, as this is very much a non-political point. On the previous occasion, speaking from a row in front of the one from which I speak now, I supported the amendment. Personally, I still wish to do so. I did so because, in spite of all that has been said this afternoon, my chief regard was for the small trader who is paying the very interest to which my noble friend Lord Bruce referred, at a very high rate, lacking capital, and shutting down his business. We read week after week of liquidations and bankruptcies assuming a figure which is quite alarming.
I say briefly that I think it is so unfair for the big firm so often to hold that little man to ransom, and merely say to him, looking at the Bill as it now stands, "If you care to sue us you of course would get interest from the court. But if you haven't got the pluck to sue us because you want to keep our custom, you won't be able to serve a notice and get statutory interest." I stay where I was last time in my opinion on this amendment, and I warmly support it.
The Lord Chancellor: My Lords, we have only a few moments, but I must beg the House to believe me when I say that this is a highly controversial amendment, and on that ground alone I cannot accept it at all. I know that there are those in the Law Society who favour it, and so there are in the British chambers of commerce, the National Farmers' Union, the Association of District Councillors, the Union of Independent Companies, the Agricultural Suppliers Trade Association, the Institute of Credit Management, the Consumer Credit Association and the Finance Houses Association; but ranged on the other side are the consumers, as we have heard from my noble friend Lady Trumpington, the Confederation of British Industry, the Consultative Committee of Accountancy Bodies, the National Chamber of Trade, the Federation of Civil Engineering Contractors, the Greater London Council, the Local Authorities Management Services Committee, the Association of Independent Businesses, the National Water Council, the Law Society of Scotland, the Institute of Chartered Accountants of Scotland, and, I have no doubt, the Labour Party as well.
I really hope that my noble friend will take some pity on a poor Lord Chancellor who is trying to get through a piece of uncontroversial legislation. I have been here provided with a long speech in which I was going to point out the various defects in this particular amendment even from the point of view of the small trader. But I will not at this hour. I simply confine myself to two observations. The
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first is that I simply do not understand why my noble friend should have said that with Clause 15 in it, it is less favourable to the small trader than without it. It is simply not true, from the soundings I have taken, that there is any opposition to Clause 15 as it stands, which gives the court the right in its discretion to award interest. I hope that my noble friend will at last come to see that he has at least got half a loaf, and that what he is asking for is no bread.
Having said that, I make only one other point. The noble Lord has made matters much worse by the change which he has effected in the Law Commission's recommendation. The Law Commission's recommendation was that there should be an opting out clause. This has been effectively emasculated from their recommendation in the series of clauses which my noble friend has introduced. There are an infinitely large number of arguments here which would bear against even the advantages which he claims to exist in the amendment, but I hope he will at least have some pity on me when I tell him that it is controversial and therefore I cannot take it on board.
Lord Stanley of Alderley: My Lords, I hope that my noble and learned friend will have some pity on me, rather than that I should on him. I make one or two points before we leave the matter. One of the remarks that my noble friend Lord Mottistone made was that traditional terms would be upset. It is the traditional terms, many of them, that we dislike so much, because there are, unfortunately, unscrupulous traders—and the noble Lord, Lord Mishcon, brought this out—who keep us out of our money. It is those that we are going for.
Here I come to my noble friend Lady Trumpington. I am not getting at her and her consumers; the whole purpose of the amendment has nothing to do with consumers. We are getting at the, perhaps I may call them, evil people who are keeping me or my small trader away from our money, money at which we are trying to get, and 1 am sure there are ways to avoid us making the consumers' problems any more difficult. Indeed, the fact that there could be interest added on for somebody who cannot pay does not make it any more difficult; there are terms in the courts in relation to how to pay a sum off, and no doubt the terms are, as usual, very generous.
The noble Lord, Lord Bruce, made some interesting points. Like the noble Lord, Lord Mishcon, I took a totally different view from his argument. I take the point that it is better for me to sit on my backside and invest my money than try to work, because I should find it difficult to earn the same as I could get in interest. That is exactly why I want the amendment. I do not want the large firms keeping my money away from me when it could be put into productive work, I hope, albeit I cannot earn the rate of interest which Lord Bruce says I cannot and which, indeed, sometimes I cannot.
My noble and learned friend listed a large number of firms on my side and a large number on the other side. I hope he understands that, so far as I am concerned, all those on the other side are wrong. I take the view of the noble Lord, Lord Mishcon, particularly in relation to Clause 15. He pointed out to my noble and learned friend why we do not like that clause, and I dealt with that in my original speech. I do not want to

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repeat why I would rather have Clause 15 removed.
It appears that tonight, as opposed to the last occasion, I do not have the same amount of support among noble Lords, and I said on that occasion that I would probably miss the boat, and obviously I have. Nevertheless, I would strongly make the point to my noble and learned friend that everybody is agreed that the matter needs further thought. I accept that it is controversial. I hope the Government will give it further thought so that it may be possible for an acceptable amendment, possibly in the other place, to be tabled. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 16 to 23 not moved.]
Clause 17 [Relaxation of formal requirements for making wills]:
7.3 p.m.
The Lord Chancellor The Lord Chancellor moved Amendment No. 24:
Page 12, leave out lines 31 to 33 and insert—
("(d) each witness either—

(i) attests and signs the will; or

(ii) acknowledges his signature,

in the presence of the testator (but not necessarily in the presence of any other witness),").
The noble and learned Lord said: My Lords, I hope we can get through one or two more amendments before my noble friend Lord Denham moves me out of business, as it were. This amendment replaces the existing paragraph (d) and makes it clear that the two witnesses do not both have to carry out the same action, either signature or acknowledgment, at the same time for the will to be validly attested. This carries out an undertaking I gave to the noble Lord, Lord Mishcon, in Committee and I hope is an improvement in parliamentary draftsmanship, for which I modestly claim credit which I do not deserve.
Lord Mishcon: My Lords, I am most grateful to the noble and learned Lord.
On Question, amendment agreed to.
Clause 18 [Effect of marriage or its termination on wills]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 25:
Page 13, line 42, at end insert (" and if it was contingent upon the termination of the life interest, as if it had not been so contingent.").
The noble and learned Lord said: My Lords, this is highly technical, but I can explain it in great detail if called upon to do so, and I think it is the right solution to a highly technical problem. It deals with the situation where a life interest is terminated by divorce. The amendment makes it clear that where the life interest of a divorced spouse lapses by virtue of the earlier provisions of the clause, then any interest in remainder which is contingent on the termination of the life interest is to be treated as if it had not been so contingent at all. The main clause provides that it shall be treated as if the person with the life interest has died, but there is the possibility, which has been pointed out to me by the Law Commission and the Holborn Law Society, that supposing the gift were to my wife for life and then to such of our children as are alive at her
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death; if she was divorced while she was still alive, that might have a startling and improper effect. The amendment, which has been seen by the Law Commission and the Holborn Law Society, is designed to put that right.
Lord Mishcon: My Lords: I am happy to agree that the Holborn Law Society, as a result of the courtesy of the department of the noble and learned Lord, is completely satisfied with the amendment. My expression of gratitude continues.
On Question, amendment agreed to.
Lord Denham: My Lords, I beg to move that further consideration of the B ill on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

ECC 7th Report: State Aids to Agriculture
7.7 p.m.
Lord Cledwyn of Penrhos Lord Cledwyn of Penrhos rose to move, That this House takes note of the report of the European Communities Committee on State Aids to Agriculture (7th Report, 1981–82, H.L. 90).
The noble Lord said: My Lords, the subject of state aids to agriculture is one of the most important our committee—that is, Sub-Committee D—have examined and, given the obvious limitations imposed on us, I think we have produced the useful report. It may also be thought that we have performed a practical service, if only in providing a readable guide which explains the way in which the system works, with its complexities and defects. That is discussed in the report under the heading "Evidence and Analysis" in paragraphs 17 to 95.
I must thank all those who have co-operated to produce the report. I refer to my colleagues on the sub-committee, who devoted a great deal of time to it and who are all expert in some aspect of agriculture. It is a splendid committee. We are grateful to our clerk and specialist adviser for their invaluable contribution and of course to all the witnesses on whose thoughtful evidence the report is based.
Some of us visited the Commission in Brussels and we much appreciated the help we received there from DG IV, DG VI, the United Kingdom delegation and COPA, as well as the legal division of the Commission. We had the impression that officials there were glad that we were undertaking the task. But why did we undertake it? At the start, we wondered whether we would be able to accumulate sufficient material to justify the exercise. There was an element of the unknown about the scene as we surveyed it. But we were encouraged to take the plunge not only because of the importance of the subject but also because we hoped to dissipate some of the mystery which surrounds it. We know of course that many farmers in our country harbour a deep suspicion that their counterparts in other countries are more favourably treated, and when we were examining fruit and vegetables in the last session we came to the conclusion that aids in that sector might confer a competitive advantage upon the countries concerned.
It was at that time also that we experienced some frustration when it was brought home to us that the register of national aids, which Article 93 of the treaty enjoins the Commission to prepare and keep up to date, is unavailable to all save Commission officials. Our concern became more acute when we were studying the common agricultural policy and discovered that member states were providing in the aggregate more funds for national aids than the whole cost of the CAP. That is something to be pondered. How, we asked ourselves, can people be satisfied that the system is equitable, that competition is fair, as laid down in the treaty, if the information about national aids is not made publicly available? It was in that spirit that we embarked upon our study.
Perhaps at this point I should deal with the Commission's inventory because we achieved some success in our efforts to penetrate this inner sanctum. This voyage of discovery is dealt with in paragraphs 43 to 52. In the course of our inquiries, during our visit in Brussels, we discussed the inventory. It was clear to senior officials there that it was of central importance to us, and it was agreed that it should be made available to the Committee. We felt that that was a significant breakthrough, and we are very grateful for that gesture. The inventory is available in a certain form in the Ministry of Agriculture here in London and it is, as may be imagined, a formidable document. It comprises nine volumes dated September 1977, and covers state aid to agriculture and fisheries granted in 1974.
The volumes in respect of Denmark, France, Germany, Ireland and Luxembourg are supplemented by the latest available updating, while four in respect of Belgium, Italy, the Netherlands and the United Kingdom have been superseded by more recent, self-contained "own language" inventories. I must refer the House to our criticisms in paragraph 50 and our comments in paragraphs 101 and 102. We strongly urge a policy of greater openness and the availability of the inventory for public scrutiny.
As the House will note in the report, state aids can be divided into different categories, but I want to look briefly at a fairly basic division—namely, and in the first instance, aids which are both legal and reasonable; secondly, aids which are legal, but which, for one reason or another, are distortive; and, thirdly, and lastly, aids which are illegal and in contravention of the treaty.
On the first point, there are allowable aids, some of which have continued since the Community came into existence; they meet special circumstances, conditions, or hardships. In an ideal world total harmonisation would be possible, but this is not an ideal world, and although there are some who point out that all aid is distortive, there is no practical possibility that all aid can be abolished. We state in our report that the formal position under the Treaty of Rome, whereby any aid granted to a member state
"which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods",
is incompatible with the Common Market. This is why there are a range of exceptions to the rule. What we say, and what we believe, is that all steps must be taken to ensure that the exceptions are absolutely necessary and absolutely fair; that no country moves
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stealthily to give an aid which will place the farmers of another country at a disadvantage. We know that there are political pressures, but if the system is to work, then Governments must try to be fair.
The House will also note that in paragraph 97 the committee stresses that, even in the improbable position that total harmonisation were to be achieved, distortions to competition would still arise from,
"national differences in such matters as taxation, credit facilities, wage and other input costs and land ownership systems".
Those are differences which can be expected to change only over a very long period.
The report further remarks that:
"an aura of suspicion, characterised by much emotive and uninformed comment, surrounds the whole area of state aids".
It attributes this in part to the,
"ambiguity in the provisions of the Treaty of Rome relating to the rules of competition and their application to agriculture".
Paragraph 98 poses the problem clearly, and ends by saying that,
"a balance has to be struck between the distortive effect of a particular aid on the one hand and its … furtherance of the objectives of the common agricultural policy on the other".
We found this to be difficult territory to traverse.
I come to my second point; namely, that there are aids which are perfectly legal, but which are also distortive. The Guiscriff turkey plant case, referred to in paragraph 95, is relevant in this context. It raises issues of wide-ranging significance in that, while each individual aid to the plant is probably admissible under the treaty, taken together they could have a serious distortive effect on competition. If the Guiscriff case were to be copied in other sectors of agriculture, you would have an impossible situation. We urge the Commission most strongly to consider how this type of distortive effect can be contained and avoided.
The Ministry memorandum on page 125 of our report is very interesting, especially in its comparison between French aids and British aids, and I hope that if noble Lords have not studied this part of the report, they will do so. Although the Ministry states that it is difficult to make comparisons, it adds, on page 127, that French aids are,
"considerably higher than those normally likely to be available to turkey processors in the UK".
When he replies, the Minister may wish to comment on that, and tell the House whether there has yet been a response from the Commission itself on the problem.
The other main national aids brought to our attention include the package of aid to farmers granted by the French Government at the end of 1980, a similar package of measures announced in December 1981 by the French Government, and the preferential tariff for heating fuel available to hot house growers in the Netherlands. Paragraphs 86 and 87 describe the action taken by the Commission and the reaction of the French Government to the action of the Commission. I am bound to say that one has to admire the ingenuity of the French from time to time.
As to the Dutch hothouse case—a highly contentious one—I understand that it is still sub judice, and perhaps when he replies, the Minister can inform us of the latest position.
At this point 1 should say to the House that notwithstanding the general concern at the alleged proliferation

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of national aids, the only cases brought to our attention were the four cases that I have dealt with, and there is dubiety about the alleged illegality of two of them. Of course, other cases may exist, and we should not overlook the aids given by regional Governments, which are rather more difficult to trace, as noble Lords may imagine.
In our judgment the disquiet is due in the main, however, to state aids which are not regarded as illegal, but which are nevertheless distortive in their effect. We are also aware that some Governments react more sensitively to the pressure of farming lobbies than do our own—or they certainly give the impression that they do. The French packages are illustrative of this.
All these things taken together, as well as the deficiencies of the common agricultural policy, create suspicion that matters are not as they should be. As paragraph 29 shows, it is a complex area. But the hard evidence of numerous illegal state aids is just not there, and we must accept this in all fairness; we have no alternative. I say again that more frankness and openness would go a very long way to allay the fears which do exist.
I must pass rapidly over several points of substance, and I apologise for doing so, but time is against me. For example, "aids through taxation and social security systems" as well as "interest rate subsidies and capital grants" are of particular interest and importance. I hope that my colleagues on the Committee and other noble Lords will fill the gaps in my speech.
What should be done? The House will note our recommendations. We welcome the upgrading of the unit in Brussels which deals with state aids but we also think that the Commission's manpower resources need to be strengthened to enable them to do their job properly. The monitoring investigation and en-enforcement of new or altered aids is a huge task, as we confirmed when we met the legal division during our visit to the Commission. During that visit I was greatly impressed with the Commission's legal service although one felt that these very able people were being stretched to the limit of their capacity. Again, we suggest that the possibility of establishing inspectorates in member states might be considered carefully. A great deal could be done fairly quickly and without undue expense to create a much better atmosphere.
The NFU have issued their observations on our report and I should like to thank them for their generous remarks that our "recommendations are valuable and constructive". There are also some criticisms—life would be very dull without them—but I do not propose to go into much detail at this stage. I understand that my noble friend Lord Sainsbury, a member of our committee, will be addressing himself to the question of marketing aid raised by the NFU. I have received a letter of apology from representatives of the Liberal Party who because of prior engagements are unable to be present at this debate but, certainly, the noble Lord, Lord Mackie of Benshie, and others are very distressed at their missing the opportunity to participate in the debate.
Finally, I come to the Ministry of Agriculture itself. The Minister, Mr. Peter Walker, has emphasised the
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need for greater effort to bring state aid under more effective control. We welcome and support his initiative and hope that the Minister can tell us what further steps are now proposed to make progress. The committee propose that our agricultural attaches in the Community might play a bigger role in identifying and publicising the emergence of aids in the Community. They are in a position to do so. My experience of them is that they are very able and competent officers. I think that they can play a bigger part than they do at present.
We rely on our Government to maintain constant pressure on the Commission to maintain its current concern with state aids. I believe that there is a lively interest and concern in this subject throughout the Community and now is the time to take action. The representatives of other countries whom we met were on the whole, interested and pleased that we had undertaken this task. I think they are ready to receive these recommendations and to co-operate with us. The members of the committee hope that this report will help bring about the changes that are necessary to this end. I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on State Aids to Agriculture (7th Report, 1981–82, H.L. 90).—(Lord Cledwyn of Penrhos.)
7.24 p.m.
Lord Mottistone: My Lords, I welcome this debate and wish to thank our chairman, the noble Lord, Lord Cledwyn, for leading us so well during the preparation of this report. It is a great honour to succeed him in the batting order in this debate. The only thing that worries me is that he sits on the Front Bench opposite and I cannot really tackle him because I am in agreement with everything that he has said. It is so disappointing! I must declare an interest, of which, I think, noble Lords will be aware, in my being employed within the food processing industry; and this will have a slight bearing on what I have to say. I hope to concentrate on a fairly narrow front because of the time factor.
We must start by saying that the report reveals that state aids are an entrenched and extensive feature of European agriculture. I think that, in accepting that, we must welcome it because if properly controlled—this is the key feature—state aids can be a useful way of supplementing the common agricultural policy financing methods to meet real local needs within the member states. I think it is most disappointing that, although adequately provided for in the Treaty of Rome (as is seen in the report), after all these years the Commission's information on this subject is so patchy and inadequate. It is quite remarkable. I think that they have got to admit to a grave dereliction of duty in this area. Every effort must be made to see that they make this good.
As our chairman has said, it is helpful to see the Commission setting up a more powerful unit to look after this particular function; but I think that they must give special thought to this for I believe that it needs to be one of their more important duties. Whether it needs always to be so is another matter. They have to make up for a lot of lost ground. The evidence that we got from them was three or four years out of date.

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There was a big gap there and there seems to be no meaningful way of accelerating the filling of the gap and taking us through to the future. I believe that they must analyse and categorise all the information they have, following the line suggested in paragraph 102 of the report. I have been giving a lot of thought to how we might get it more accelerated. It seems to me that one of the problems is in getting the member states to report. In some cases this may be because they are genuinely wicked; but, on the whole, I do not think they are. I think that the member states are dilatory and, because they do not get pressure from the Commission on this point, they do not bother to put high-priced bodies to collecting information and passing it on to the Commission.
I should like to suggest to the Government and to the House that, as a stopgap to supplement the old information, the Commission might give thought to having a press cuttings account in each of the member states to produce cuttings of all the press, and, in particular, the local press, which give announcements of financial aids of all sorts to farmers and processors. If there is a new aid—as, for instance, the turkey one—that probably will come to light first in some announcement in a local paper which it will be boasting about in order to keep the farmers in that part of the country happy, because they are usually grumbling about something. Although this would not be authoritative information, one could get a permanent pointer from such a press service which would enable one to provide incentives for member states' own Governments to accelerate the provision of what might be called the real information. It is a means of "putting a bomb" under the member states which should not cost the Commission very much money, particularly in view of the amount of money that it wastes on food surpluses which they are encouraging even more, day by day.
This would have the effect, I hope, of accelerating the official reports and, if it were successful, it could be discontinued after two or three years, but with a threat of reintroducing it, so that it need not be a tremendous burden. I would suggest that the cuttings when produced within the Commission should be circulated immediately to the national delegations of the EEC in Brussels so that they, too, have all the information. This is to meet the other main need, which is to allay the suspicion that is aroused because, as the report makes clear, the information is lacking. If we have the information there for all the countries, they need not have that suspicion.
Further—I suggest this particularly to my noble friend Lord Ferrers—if the Commission, having had this point suggested to them, are dilatory in setting up the press cuttings service, the United Kingdom Government are not as "broke" as all that, they can do it for themselves. Whether they then circulate that information to the other member states is another matter. But they would have a bargaining counter. The important aspect is that the Commission could be threatened with it. There it would have all this information as up-to-date as maybe as a background to get some type of circulatory details which can be used to solve this problem. To divert slightly on to a special point: in a brief, which I imagine has been circulated to most of those speaking by the NFU, they have called for more United Kingdom aids
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comparable with other member states. They criticise the Select Committee for not making this point in the report.
Although I do not always find myself sympathetic to the National Farmers' Union, on this occasion I do; but I suggest that if we are to have comparable aids in this country, they should be extended to food and drink processors as well as to the farmers. However, without the information to know what is being provided in the other countries, how can we possibly expect our own Government to dole out these aids even if they wanted to and had the money to do it? You cannot give comparable aids when you do not know with what you are comparing it. It comes back to the fact that what we must have is up-to-date information and we must find a trigger to make the Commission realise that this is important. Every effort should be made by our own Government to accelerate action by the Commission.
I should like to conclude as I found myself concluding in the debate on the price proposals and the guidance. There is a great danger that a cynicism is creeping in in relation to the CAP which spreads further into the Community because of the fact that there are so many difficulties that are not tackled or that things are tackled, rather as the price proposals seem to be, on a convenience basis rather than a practical one to help the Community forward. Because of this cynicism, of which the suspicion of state aids in other countries is but an example, the CAP—and indeed the Community—are at risk. I hope very much that our own Government can make this point most clearly to the Commission and to the Council of Ministers because if they do not start doing something soon we shall find that it will collapse about our ears and governments and countries—not just ours—will get out of the EEC as being "a no-good thing".
7.34 p.m.
Lord Walston: My Lords, I too join in the thanks and congratulations to the noble Lord, Lord Cledwyn of Penrhos, for his chairmanship of our sub-committee, for the able way in which he has always conducted our investigations and also for his introductory speech this evening.
I shall deal with only three points tonight. The first is to remind your Lordships of one of the main objectives of the common agricultural policy. We frequently hear about one of its objectives being to improve the lot of the farmers of the Community, to bring their living standards up to those equivalent to people working in industry, and also to ensure the food supplies of the Community. We also frequently hear criticisms of the surpluses.
We hear less frequently—and it is important to remember—that one of its objectives is to ensure that over the years agricultural production within the Community is directed to those areas where a particular product can most efficiently be produced, where the soil, climate and labour is most suitable for producing a particular commodity. That, to my mind, is the main reason why it is very important that we should not have an undue quantity of aids to agriculture, whether community aids or national aids, that distort the natural pattern of agriculture.
Undoubtedly, the national aids are more distortive

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than are those which come from the Community itself. But I suggest that ideally our aim should be for a CAP where there are no national aids of any kind whatsoever and, what is more, where there are no specific production aids designed to single out particularly disadvantaged areas. Of course we have to give help of one kind or another to disadvantaged areas. But, as has been said from time to time in the House and elsewhere, that is primarily a matter for social expenditure rather than for economic expenditure.
The ultimate aim must be for an agriculture where those areas which are most suited to a particular type of production produce that without being impeded in any way by artificial aids, whether they stem from the Community or from specific national aids. One has to admit that we in this country have a good many of such national aids for special areas such as, for instance, the hill farming subsidy, something admirable and necessary to have at the present time but which undoubtedly distorts the pattern of agriculture both in this country and throughout the Community. I suggest this should be our ultimate objective; to abolish all forms of artificial stimulation of agriculture in different areas. It will be a very long time before we get there. That is an ideal to be aimed at and certainly not to be forgotten.
At the present time we are dealing, quite rightly, with the narrower subject of national aids to agriculture, and particularly those which are not officially approved by the Community itself. During the course of our investigations we came across many examples. As is mentioned in the report, and as was touched upon by the noble Lords, Lord Cledwyn and Lord Mottistone, we also came across a lack of knowledge and misinformation about these aids. This is only natural, particularly when there is an aura of secrecy surrounding these aids. We have heard of the vast volume—some 3,000 pages—which the Community has in Brussels, which is not allowed to be seen by the public at large and is indeed very difficult for your sub-committee to see. Naturally, when there is this secrecy surrounding these aids there is a great deal of suspicion and misapprehension.
English farmers—and, as your Lordships know, I am one of them—all believe that other countries have far more aids than we do. The French, I happen to know, and the Germans believe that in this country we have far more aids than they have. That suspicion does no good to anyone: it engenders distrust and engenders a form of competition and an increase of this form of pressure on Governments to give these national aids. I believe it is extremely important that these aids should be far more widely known, and 1 very strongly support the recommendation in the report that an abbreviated form of an updated list of aids should be published, and speedily every year there should be a supplement to that publication, showing the fresh national aids which have been adopted in each member state.
The noble Lord, Lord Cledwyn, referred to the role that our agricultural attaches should play. I am glad he did so because I believe there is a large and useful role for them in this respect. I have to say that my impression from the evidence that we listened to from the Ministry of Agriculture was that the forcefulness within the Ministry on this particular point was not all that I would like it to be. I will not read the evidence
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to your Lordships, but if you turn to pages 11 and 12 and read questions and answers Nos. 11, 12 and 13, 1 think you will receive confirmation of the general attitude within the Ministry. They do not give any overall directions to the agricultural attaches, saying, "We want you to tell us every month of every new national aid that has taken place in your country". They simply ask them specific ad hoc questions from time to time, and as long as there is that attitude at the centre you cannot expect the agricultural attachés to go out of their way in order to collect this information. I hope that is something which the noble Earl will look into in due course.
I turn now to the third point I want to make, which is a much more general one concerning the importance of national aids and the abolition of distortions to competition between the member countries of the Community. National aids are of some importance, although I suspect that if they were all added up in a completely accurate and objective fashion we would find that the distortion caused by them as between different member countries was not all that significant. That does not mean to say that they should persist. I do not believe that they should; and I support the recommendations of this report very strongly in that respect as in others.
But there are so many other factors which distort competition between the countries in a very much greater way than any of these we have been studying here. For instance, there have been considerable differences in the cost of inputs into agriculture. That is not a very big problem but it is still significant. At one time not so very long ago it was clear that the cost of agro-chemicals, for instance, in Belgium was over 30 per cent, cheaper than for identical chemicals in this country. The cost of tractors was 20 per cent. cheaper, the cost of combine harvesters 30 per cent. cheaper and so on. Nothing can be done about that. No governmental action can alter these prices. It is up to the farmers and, as they become conscious of this, they are beginning to buy these inputs, if they can, in other countries. Some farmers are better placed than others to do this, but I understand there is now quite a trade between Belgium and this country for tractors. They can be bought in Belgium cheaply and resold in this country. That is a factor of considerable importance which affects farmers' costs and distorts competition.
Secondly, there is the question of currencies—green currencies, fluctuations of currencies, rates of inflation and so on, which vary greatly from one country to another. In an ideal world, a country with a higher inflation rate than a neighbouring country would have a lowering of its currency, and eventually everything would equalise itself out. Because of the prevalencies of green currencies now, that does not exist at present and so we have a grave distortion of competition as a result of currency movements.
Then we have the question of land ownership, which even in our own country has a very considerable influence on distortions. Take three farmers: one of them will have bought his land or inherited it many years ago and such mortgages as there may have been have been paid off. He has no rent charges to pay. The second farmer is a tenant and he pays the going rate—£20, £30, £40 or £50 per acre maybe. The

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third farmer has fairly recently bought his land with a substantial mortgage, with the very high mortgage repayments that he has to pay, well over the normal rate, even on high rents. So in this country, because of the structure of our rents and rent charges, we have enormous variations in profitability. And when you look at the whole of the Community, with its different forms of land ownership, its peasant occupancy, sharecropping and so on, you have a very wide range of costs which inevitably distort competition.
Finally—and Governments eventually can do something about this—there is the very vexed question of taxation. Those of your Lordships who have read the report carefully will have noticed on pages 100 and 101 or 102 some very interesting evidence given to us by Mr. Ian Reid, who is the director of the Centre for European Agricultural Studies at Wye College.
I must make it perfectly clear that he very freely admitted that his calculations were open to a great deal of argument and discussion, and indeed subsequently in the report there is an assessment on them from the Inland Revenue, which casts a great deal of doubt on the detailed accuracy of the figures. But the differences that he puts forward are so great that I believe it is worth drawing attention to them. His calculations, inaccurate though they may be on his own admission, show that the Danish and British farmer may have to pay anything up to 70 per cent. of his total income in various forms of taxes—capital taxes, income taxes and other forms of taxes, direct and indirect—whereas on average the French farmer on the same-sized farm pays something of the order of 20 per cent.
Even if those figures are extremely inaccurate, I put it to your Lordships that there is still a very wide divergence in the actual cost of production, in the amount of retained profit, in the ability to invest and in the standard of living solely as a result of differences in taxation. We need to progress—and this also will take a very long time—to a far more unified system of taxation between all the countries of the Community. Regarding the relatively smaller differences which occur as a result of certain national aids, even if those were to disappear the problem would not be solved.
I do not want to give the impression that this report is not a useful one or that it does not deal with a very important problem. It does that very fairly and with a great deal of accuracy. My only reason for mentioning these final points is that we must not go away with the idea that if only we can solve the problem of national aids to agriculture there will be perfect competition as between all member states of the Community. That is far from the case, but it is still worth making every effort we can to ensure that these national aids are minimised. I believe that the recommendations contained in this document are a valuable contribution to that problem.
7.50 p.m.
Baroness Elliot of Harwood: My Lords, I must apologise to your Lordships for the fact that this is the third speech that I have made in two days in the House. I promise that I will be brief. But I could not possibly not take part in this debate, because I want to express my thanks to the noble Lord, Lord
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Cledwyn, for the splendid way in which he chairs this committee, for the enormously interesting subjects that we consider and for the way in which those subjects are handled by the chairman and the committee. This report is of great importance, and is one which nobody else could have produced as skilfully as he and our committee have produced it.
I must declare an interest, in that I am a recipient of state aid, because I farm in what is technically known as a less-favoured area. I do not find it in any way unfavourable, but the fact is that that is how the area is described in official documents. I shall say one word about something which the noble Lord, Lord Walston, said, but I will wait a minute or two before doing so.
I should like to quote from the governing text of the report. It states:
"State aids are an entrenched and extensive feature of European agriculture".
As such, they will not be given up by any nation. We must accept that, and I am sure that it is true. But the point is that these aids should be known to other EEC countries—that point was stressed by the noble Lord, Lord Cledwyn—they should be restricted and governed by EEC agreement and kept to a minimum. I am sure that that is right, and that that is one of the recommendations which will be strongly pressed as a result of this debate.
I may be wrong, but I think that the main influence over the amount of state aid in European countries is the proportion of voting strength of the agriculture industry. Your Lordships may think that that is a little cynical, but I do not believe it is. We see pictures in the papers of tractors being driven down the Champs Elysées, in order to stop the traffic and to protest against the policy of the French Government. We have never reached that point here. I have been told that someone has seen a tractor in Trafalgar Square, although I never have. But that shows how powerful and strong the French agriculture industry is.
The many thousands of farmers, farmworkers, people employed on the manufacturing side of farming and people supplying machinery and other agricultural needs, such as fertilisers, seeds and so on, which go into agricultural production, all have votes and the Government of the country concerned is greatly influenced by their numbers. The voting strengths of the agriculture industries in other European countries is between 8 and 18 per cent. But, as we all know, the number of people engaged in the agriculture industry in the United Kingdom varies between 2½and 3 per cent. of the voting population. So our political influence—I am speaking now as a farmer—is much less in this country than in any other European country, but our efficiency in production and our trading powers put us very high in the membership of the EEC's farming industry.
If I remember rightly, nearly all the people and organisations whom we interviewed were in favour of state aids, so long as they were fair and above board and not used to destroy anyone else's agriculture industry. Our committee would press the Commission to publish the new regulations, which we believe they are drawing up, so that the EEC countries may have some guidelines as to what aids are considered appropriate and legal. At the same time, we thought it

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important that information about the aids being given in EEC countries should be made public, and that the Commission should publish a short report at the end of each year listing the new aids in each country. That would complement the fuller inventory which is known to the Commission, but which is not necessarily known to the other nations; hence our recommendation that there should be no secrecy about state aids.
The noble Lord, Lord Walston, made some suggestions about state aids in this country, and he thought that the state aids for hill farmers—of which, as your Lordships know all too well, I am one-could very easily be reduced. I can only tell your Lordships from long experience that, if state aids were refused on some parts of our agricultural production, the price of mutton and so on would instantly rise. It has been known for a great many years that state aids keep down the price of food in the shops of this country. That is one reason why I am in favour of state aids, although I agree that they should not be exaggerated. But I should like to put in a little protest—
Lord Walston: My Lords, may I interrupt the noble Baroness for one moment? I certainly did not say that the hill farming subsidy could very easily be reduced. I know that it would be extremely difficult to reduce it. I said that there should be substituted some other form of aid, to keep the noble Baroness and her friends in the style of life to which they have become accustomed.
Baroness Elliot of Harwood: My Lords, I can tell your Lordships, quite honestly, that if, in Scotland, where 42 per cent. of our land is designated as less favoured, anything were done to reduce the assistance which goes to farming in those areas, it would be very unpopular. That land cannot be used for anything else and it would become derelict which, in itself, would be a disaster. Also, I take some pride in the fact that in Scotland we have a very efficient sheep and hill cattle industry. That is a great help to farmers who want to buy store animals and fatten them on rich land, which, as I know from my delightful experiences, the noble Lord, Lord Walston, farms in England. However, that is by the way and I hope that your Lordships will forgive me for making that slight digression.
In our report, we mentioned the French Government's enormous subsidies, particularly in connection with the production of turkeys. The concession is being inquired into at this moment, and it will be interesting to learn the result of that inquiry when the report is published. I should like to draw attention to the subsidies given in Holland to the suppliers of cheap gas for the glasshouse industry. If the Dutch Government are brought before a court on this matter, it will be very interesting to know whether they are cleared of giving this heavy subsidy or whether they are prosecuted. Our glasshouse industry has been badly affected by the increase in oil prices and in Scotland—in the Clyde Valley and elsewhere, where the glasshouse industry is extensive—enormous increases in heating costs have crippled the producers who do not, of course, get subsidies. I do not suppose that the position can be altered, but it has been a great blow to that part of Scotland.
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I should like to say one word about the memorandum circulated by the NFU. There is a comment about the working party on competition in agriculture recommending that this should be revived and made more effective. We had many meetings and took much evidence, but I do not recollect that any witness spoke about this. Nobody had much enthusiasm for this particular committee, and we did not feel that it could play a very important part. Whether we were right or whether the National Farmers' Union were right, I do not know. However, I do not remember any particularly strong demand from the witnesses who gave evidence to us that this committee should be revived.
I have said enough. Once again I should like to thank our chairman for the way he conducts our investigations. I hope that this report will be considered favourably by the Agriculture Commission in Brussels and that the noble Earl, Lord Ferrers, will feel that we have done an adequate and, I hope, a good job.
8.1 p.m.
Lord Dunleath: My Lords, I must start by making an apology. I am already late for another engagement. I did not realise that the business of your Lordships' House today would extend to this length. Unfortunately, therefore, I shall be unable, with permission, to stay for the winding-up speeches.
Reference is made in this report to the less favoured areas. They have also been referred to by speakers in our debate. I would suggest that there are two types of less favoured area. I am now talking in the context of Northern Ireland, which is the boring context in which I tend to speak. The first type is the obvious one: the moorlands, the hillsides, the mountain sides, the wetlands which can only be grazed during the summer months. Though these are less productive than the arable lands, and less capital is invested in them, they provide a most useful source of supply for maintaining the Province-wide beef herd. I used to single suckle on my farm, but I cannot bend the arithmetic to make it a viable operation now.
The same applies to people in the non-arable areas. In 1973 there were 325,000 beef cows in Northern Ireland, but by 1981 this figure had gone down to 205,000—a reduction of 37 per cent. in a Province where unemployment is at a disastrous level. The people who were breeding beef in these less favoured areas are living in districts where virtually no job opportunity is available. Agriculture accounts for 13 per cent. of the total employment in Northern Ireland and is our biggest single industry. So it is a calamity that this is the case.
Turning to unemployment, I adhere to the rather simplistic view that it is better to pay people for doing something than to pay them for doing nothing. If more of these people are put out of work they will have to sell their land. If they cannot make their business viable, this is going to be a drain on national resources, quite apart from being a human tragedy.
The second category of less favoured area is, I would say, the intensive farm, whether it be arable or whether it relies on poultry and beef production. A considerable amount of capital is involved. For the most part, that capital can no longer be serviced. I must declare

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an indirect interest. I am a director of a bank and know that in almost every case either the farmer has to sell land, which makes his enterprise less viable, or, if the bank still has sufficient confidence in him, the interest accrued is added to the existing overdraft. As an example, the total indebtedness of farmers in Northern Ireland to the banks was £98 million in 1978. The interest paid was £13·5 million. In 1981, their indebtedness had gone up to £186 million and the interest had doubled to £26·5 million. Another indicator is that the number of new tractors registered in 1978 was 2,421. In 1981, that figure was down to 970. This shows the extent to which the industry has declined —this our biggest and most important industry.
With regard to the more intensive farms to which I referred where a considerable amount of capital is entailed, the fact that they are experiencing this difficulty is not due to inefficiency. Various indices show that particularly with grassland management and the utilisation of grass for livestock production and milk, we are as efficient as anybody. In fact, in many instances, we are more efficient. The indices to which I refer quote gross margins and the efficient utilisation of capital. Indeed, for the last two years running we in Northern Ireland have won the premier award for silage-making throughout the entire United Kingdom. This takes into account not only the quality of the silage as analysed but its utilisation, the efficiency of its handling and the deployment of the capital involved. Modesty precludes me from saying who was the winner this year, but as an innovative cook I can say that I am working on new recipes: silage au gratin, silage flambé au poivre and things like that.
In comparison with France, which the noble Baroness, Lady Elliot of Harwood, mentioned, we are very much more efficient. I went to France on a mineral water study tour—to the Lyon area. I could not help noticing the deplorable inefficiency of the farming. People were driving herds of goats along narrow roads, and there was one horse in a five-acre field which was growing more thistles than grass. I am very interested in horses, but I am interested in them for an entirely different reason from the noble Viscount, Lord Brooke-borough, who is not listening at the moment. I am interested in keeping out of the way of horses. They kick at one end and bite at the other, and they smell and are incontinent. But even I could recognise that these were the most loutish horses I had ever seen. When we inquired, in broken French, for what purpose they were being bred the answer was, looking at us as though we were stupid, "Pour l'abattoir". They were just being bred for meat. So I cannot help thinking that the common agricultural policy is subsidising inefficient farming at the expense of those of us who are more efficient. In my view, as the noble Lord, Lord Walston, said, the purpose of the CAP ought to be to encourage enterprises which can best be undertaken according to the climatic conditions, the attitude of the farmers in that particular area, and the nature of the soil—rather than subsidising the inefficient at the expense of the efficient.
In Northern Ireland, we have to run faster than anyone else to stay in the same place, because we have to pay more for our supplies and we receive less for our products. In the old days the remoteness which
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causes this imbalance was recognised because there was a "remoteness grant" but that is no longer the case. This is the sort of thing that the CAP ought to be doing. A promise was made that this problem would be looked at, and we shall welcome such help when it comes. Farmers in Northern Ireland are efficient and, unlike the subsidiaries of multinational corporations which can close down just like that because of a boardroom decision in America or Europe, they carry on. Farmers do not go on strike. They have a stake in the land. They are tenacious and will work a 15-hour day if necessary to tide themselves over a rough period. If the common agricultural policy is going to do any good at all, it must recognise where enterprises are efficient and then encourage those enterprises to flourish, rather than prop up inefficient operations elsewhere.
8.12 p.m.
Lord Stanley of Alderley: My Lords, of all the papers I have read emanating from Sub-Committee D I must say that I found this one on national aids by far the most interesting. May I thank the noble Lord, Lord Cledwyn of Penrhos, and his sub-committee for it and for trying to explain to me what an important problem national aids are and, worse still, what a difficult problem they are to solve. I am certainly no nearer to solving it—well, perhaps just a little nearer—than when I started reading the report.
In paragraph 96, the sub-committee accepted that state aids are entrenched, as my noble friend Lady Elliot of Harwood said earlier. This may be so and it may have to be accepted—I would accept it—but what really worries me is that state aids are inclined to undermine the principle of the CAP, which is that each area and country produces what is most economical for that particular country or area. That point was very ably brought out by the noble Lord, Lord Walston. In fact, I believe—and so does the report—that state aids are inclined to turn the common agricultural policy into a welfare policy.
At that point I step out of the argument except to ask the sub-committee and the Government to think very carefully about this problem and to consider the effect on the individual farmer of making him dependent on a social or welfare policy. You may find that you actually destroy the farmer and that, as a result, you destroy what you hoped to achieve with that particular state or national aid. Having said that, I must say to my noble friend Lady Elliot of Harwood that I, and I believe the noble Lord, Lord Cledwyn of Penrhos, have been trying to be less favoured for many years but have so far failed to achieve that. But we hope to be less favoured, like my noble friend Lady Elliot of Harwood.
I will conclude by asking if the Government will take action for once (perhaps that is being unkind) on the recommendation in this report, as was suggested by my noble friend Lord Mottistone and by the noble Lord, Lord Cledwyn of Penrhos. The Government certainly should do that because the report is full of good, meaty stuff. In particular—and perhaps here I will not agree with my noble friend Lady Elliot of Harwood and the noble Lord, Lord Cledwyn of Penrhos—they should think very seriously about putting to work again (I do not think it has ever been to work) the working party on conditions of competition in

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agriculture. I noted very carefully what was said by the noble Lords, Lord Cledwyn of Penrhos and Lord Walston, about the agricultural attachés doing this monitoring job. They may be able to do it, but it seems to me that it wants a more organised situation or committee to look at it in greater detail. The only committee I could find in the book was this working party on conditions of competition in agriculture.
If they do that, and we get some idea of what is happening, which is most important because suspicion is the worst thing in life, we must then think about the punishment. As far as I can see, the punishment comes in paragraph 63 of the report. I know that the sub-committee was not particularly thrilled about this, but maybe it is a start that can be worked on. Certainly when the punishment is thought out it must be quick and must relate immediately, if possible, to the farmer in question.
8.16 p.m.
Lord Sainsbury: My Lords, once again we are indebted to the noble Lord, Lord Cledwyn of Penrhos, for his chairmanship of Sub-Committee D and for his usual thorough summary of the report. Owing to the lateness of the hour I will cut my speech and confine my brief remarks to one form of State aid—namely, aid to marketing, packing and processing, which seem to be free of restriction save that the Government concerned must submit product sector programmes to the commission. Sir Richard Butler, President of the National Farmer's Union, in evidence to the sub-committee expressed the view that—and I quote:
"our Government should take more advantage of the opportunity to give aid to British agriculture and horticulture for marketing".
I agree most emphatically. Mr. Riley, a well-known agricultural economist, in most interesting evidence to the sub-committee, said that in other countries of the Community, but not in Britain, there is a concept of industrial unity between raw material, the consuming animal, processing industry, and customer sale. In other words, there is a relationship based on collaboration and co-operation rather than the idea, which certainly existed in the past in the United Kingdom, that the other fellow is trying to "do you down" and taking too big a share of the cake.
Producing crops and raising livestock is only the first link in the chain. That may be a very obvious remark, but it is not always fully realised. A lot happens before the primary product reaches the consumer in its final form. This is the point I wish to emphasise. Legally constituted bodies exist in Holland and France which represent all aspects of production, processing, marketing and selling. Mr. Riley gives us an example of aid to one part of the chain, the French egg industry, where grants have been made to modernise their packing stations. Though their production cost was not significantly different from our own, they were able to undersell us because they were able to pack and market more efficiently than our own packing stations. England's biggest egg packers, who incidentally are the biggest in Europe, told Mr. Riley that they would like to modernise their plant but could not afford to do so. There would have been no such problem, I suggest, in France. What this emphasises is
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how aid at one link in the chain can help all parts of the chain.
In conclusion, may I say that I agree with Mr. Riley that it is in practice impossible to harmonise those aids which affect agriculture which have already been mentioned by other speakers, such as taxation, credit facilities and energy costs. But that does not mean that more manpower resources should not be devoted to the unit of the Commission responsible for state aids. I believe the report serves a very useful and important purpose by its thorough investigation of state aids to agriculture. I hope it has a wide readership in Brussels and among the Members of the European Parliament, and I pay my tribute to those who drafted it.
8.22 p.m.
Viscount Brookeborough: My Lords, like other noble Lords, I would like to join in the congratulations to Lord Cledwyn of Penrhos. For those who have not served under his chairmanship it is a pleasure they will certainly look forward to, as his handling of this committee is really absolutely first class. I should like, also, at this point to pay tribute to our specialist advisers and the clerks for producing such a readable and sensible report out of such a very complex matter and from such very complex evidence as is produced. Those who read that evidence will understand their ability when they have managed to produce such a concise, readable and intelligent report. The noble Lord, Lord Stanley, said that he was not sure how much wiser he was on the direction he should go, but I am jolly sure he is a great deal wiser on the problems than he was before reading the report.
I think it an honour to follow the noble Lord, Lord Sainsbury, and I would endorse very much what he said about this question of the food industry starting at the farm and ending at the counter. I think in one or two cases in Northern Ireland we have had aid to the processing industry, in the pig processing industry, and in eggs, and in the meal processing industry. I would feel that a start has been made, and no doubt my noble friend Lord Ferrers will be able to tell us that, enthused by the success—and it is a success—of the areas where it has been used in Northern Ireland, his Ministry will go to it and bring all the threads together to make sure that the maximum aid is obtained.
The Treaty of Rome, under Article 39, sought to require the Community to provide, among other things, a fair standard of living for agriculture, and this to be achieved in free and genuine competitive trading not distorted by national aids. I start off by saying—because people may think at the end that I am not a supporter of the EEC—that I am a supporter of the EEC, though not of the CAP. I have said in this House before that, so far as Northern Ireland is concerned, the CAP is a disaster. I believe, after the last price review, that it is fast going to be a disaster for the EEC. I can see no sign of the real following of the guidelines, the mandate, and when we deal with the question of national aids and the suspicion that arises as a result of national aids, unless there is a very radical look at the whole CAP I believe we are going to disaster.
I feel it is a question of going right back to the drawing board. I do not disagree with the conclusions

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of the committee, except that I go further than they do and say that while all the recommendations we have made are being looked at and carried out we should go back much further and see whether the original concept of the EEC and the CAP is really being met.
Reference has been made to paragraph 98 on the question of the aura of suspicion. In all affairs of the EEC suspicion is what is going to break up the EEC, if anything does. The CAP at the present moment has favoured large arable farms. My heart bleeds for the noble Lord, Lord Walston, in his poor small farm in East Anglia. But there is an area, and everybody has said so, where national aids cannot be harmonised because it means giving up sovereignty, and that is on taxes, social services and everything like that. That is an area which can never be harmonised.
I think it was the noble Lord, Lord Walston, who spoke about the question of green currency. The aims of the Commission, in their recommendations on the price review, have been nullified by green currency fluctuations. This decision is a Government decision which sometimes is in opposition to the Commission and sometimes is with their agreement. As a result of all this the CAP has increased the disparity between regions in the EEC.
The noble Lord, Lord Dunleath, raised the question of agriculture in Northern Ireland, and your Lordships will know my views about the effect on the intensive industry, which is going to be further penalised with limitations on maize gluten and on manioc and duties on wheat feed. Agriculture in Northern Ireland is what it should he in the terms of the EEC; that is, it is efficient and it does use the best of its natural resources. But without state aids agriculture in Northern Ireland would cease to exist. There is no alternative employment in Northern Ireland; therefore, national aids are absolutely vital.
The problem of the national aids for Northern Ireland is that they are negotiated over a long time nationally, and sometimes the aid is not agreed until halfway through the season. It is for that reason that I would ask my noble friend the Minister why he has not referred the case for the extension of the less favoured areas in Northern Ireland to the Commission for separate decision, separate from the extension of the less favoured areas in the rest of the United Kingdom. I envy my noble friend Lady Elliot; I am not in a less favoured area, although the main road divides me from a less favoured area; it is as near as that. In one case the middle of the river becomes less favoured, but on my side it is supposed to be a better area.
I mentioned this question of MCAs and currency fluctuations. In 1978 the net income for farmers in Northern Ireland was judged to be £64 million and in 1979, £33 million. But in order to deal with the currency fluctuation at that time, the Government had to provide £34 million in 1978 and £42 million in 1979. This was a national decision on the part of the Government to change the valuation of the green pound. The aid was given—the Government must receive due credit for it because it was part of what the noble Lord, Lord Sainsbury, was talking about—to the processing part of the meat and pig industry.
While that was going on the consumer was, in fact, benefiting in the whole of the United Kingdom, but we, because we have a land frontier, would have
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lost our industry had it not been for that particular Government aid. I have a slight beef about that, in that when it comes to the accounts for Northern Ireland this is shown as being part of the aid that is given to Northern Ireland and comes out of our budget in a fight between it and maybe milk or some other part. But this is a United Kingdom decision and the rest of the United Kingdom is defended by the Channel from having the same problems which we have with our land frontier. I believe that it ought to be carried on the national budget.
The United Kingdom obeys the rules of national aids. But there is absolutely no doubt from having looked at the whole matter throughout this investigation that the French approach is quite different. The French are legalistic to the extreme. They go to the very end of the law, and we know that on many occasions they go beyond the law. They exploit every rule that they can. I think that we must face the fact that the French are going to go on doing that; they are determined to be the larder of Europe, and to that end there will be no stopping them.
Like the noble Lord, Lord Sainsbury, I was most impressed by the evidence of Mr. Riley. In discussing his evidence I feel that we should go back to the drawing board and see what was the original intention of the CAP. First, it wanted to have a Community preference within Europe, and that I am quite sure we should retain. Secondly, it tried to have free and competitive trading. It is quite impossible for that to be undistorted in some way or other because as others have said, the control over taxation, social security, and interest rates is something that no country whatever will allow to go over to Brussels. Therefore, I feel that in the long run—it should not be too long a run because the suspicions as regards the behaviour of various countries in Europe is growing—we should eliminate any intention of controlling national aids; we should establish minimum internal trading prices on a rolling basis to prevent dumping from one country to another; we should then transfer the responsibility for the disposal of surpluses created in a country to that country and that could be done either by consumption subsidies or by export subsidies.
One of the problems that I see at present about these enormous surpluses which are building up, is that the cost is diffused and the taxpayer in the country which is producing those surpluses does not feel that they have hit his pocket. In fact we all know that Germany and ourselves are paying for the export of materials from France and no doubt the French would not enjoy that. But I believe that we should somehow or other bring home to those who produce the surplus exactly what it is costing. That would leave each country to decide the relative importance of its own industry and at what level it wishes to support agriculture. The transfer price mechanism which would operate from Brussels—there is already a mechanism by which it can be done—would prevent dumping within the EEC, and the problem of export rebates would be borne by the countries and not by the EEC. This is very important because I do not believe at the present moment that we understand the absolute hornet's nest that we are stirring up by proposals on the part of the EEC to limit maize gluten and other products coming in. Finally—and this is the most

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important point of all—this would free huge funds to the EEC to be used for proper social purposes. In my view this is a most important report and I should like to conclude by congratulating once more the noble Lord, Lord Cledwyn of Penrhos.
8.36 p.m.
Viscount Sidmouth: My Lords, at this hour and at this stage of the debate I have no intention of making a speech. However, I could not sit down without adding my tribute to the chairmanship of the noble Lord, Lord Cledwyn of Pen rhos. To my mind, there is an element of Welsh wizardry about the dexterity with which he handles a spirited but not always unanimous team. The drafting of the report is a model of its kind.
In my two minutes I wish to make two points. The first is that when the committee started on this inquiry there was a widespread feeling in this country—I think that there still is—that national aids were a very serious matter of suspicion and dispute between the various countries. That is undoubtedly true. But the result of our inquiries is certainly not to confirm what one o our witnesses said to us before starting out for Brussels —namely, that when we got there we would discover a can of worms. The report sets out what we did discover. Obviously, there are weaknesses which need putting right and fences which need to be mended in this particular field. But I do not think that the estimate of a can of worms was justified and I say that although, as a glasshouse grower, I am involved in one of the instances which have been highlighted in the report.
Secondly, I should like to support the noble Baroness, Lady Elliot of Harwood, who pointed out that state aids as such are not necessarily dirty words. They are common practice in agriculture in many states—not only in the EEC but worldwide—and, indeed, were common in this country before we joined the EEC. The Treaty of Rome makes it quite clear that a number of national aids are quite acceptable in principle, and when each country joins the Community its existing practices are very carefully vetted—that process is going on now with Greece—to see whether they are compatible with the principles set out in the treaty. Therefore, one starts out reasonably clean. Thus it would be a great pity if there were a dirty label attached to national aids which not only, as the noble Baroness, Lady Elliot, rightly said, keep down the price of food—indeed, that was the main purpose for which they were used in this country before membership of the Community—but also, for members of the Community, I think it right to point out that they contribute to keeping down the cost of the CAP itself, which is a very important point.
My Lords, those are all the comments that I wish to make, except to say that I commend the report to your Lordships' notice.
8.40 p.m.
The Earl of Selborne: My Lords, like others who have spoken, I should like to say how grateful I am to the committee for this very timely report, which draws attention to the concerns and suspicion, which is very widely held throughout the Community but
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particularly perhaps we are aware of it in this country, at the extent of national aids. Some two years ago I found myself chairing a committee made up of apple growers and others involved in the apple industry, at a time when we were particularly concerned about what appeared to be unfair competition from French production. Indeed, there is still grave concern in that respect and it is fuelled by a lack of ability to get hold of the relevant information—exactly the same problem as is quite apparent in other sectors of agriculture.
It was no surprise, therefore, that the first recommendation that the committee I chaired put forward to the Ministry of Agriculture some two years ago was to ask that the Ministry should commission a study:
"on relative degree of support available from all sources to French and U.K. growers respectively".
Although this report was received most sympathetically by the Minister—and, indeed, some of the other recommendations were given very full support—that particular recommendation defeated them. I can appreciate that it is a great problem not just to list but to quantify the degree of support which growers get in a similar situation. But I still think that this is a problem which must be faced, if not by our own Minister, then by the Commission itself. It is a problem which must be faced very widely on a whole range of holdings; for example a typical sample of arable holdings, stock farms, dairy farms and horticultural holdings.
Agricultural economists will certainly point out the complications of getting a valid sample, bearing in mind the different structure of farming in different countries. That is quite true. It will not be an exact science; these exercises never are. But the result of it will certainly be much more effective than I think Table 60, referred to in the ECC's own report, which is really a travesty of the Commission's responsibilities, and demonstrates just how necessary it is for this exercise to be undertaken.
My noble friend Lord Mottistone has suggested that there should at least be press cuttings and lists drawn up of national aids, as reported in local papers. Although I would go along with him, I still think that that is no substitute for an attempt to quantify on an average holding the actual value of that support. It is quite easy to establish the value of a production grant or an input grant. It gets a little harder when you start to quantify the banking arrangements, the low interest rates or other such arrangements. It gets very much more complicated, and I am not even sure that it is possible, to quantify the fiscal arrangements—derating and the other exercises that come in this bracket. It is probably quite impossible to quantify the value of support on the holding to a commodity which is given beyond the farm gate: for instance, in marketing, processing and exporting.
But it must still be done, and I suggest to my noble friend the Minister that the Commission should be urged to undertake just such a wide-ranging review in all member states. I suggest that it should be undertaken by a firm of accountants who are already operating throughout the Community. There are plenty of such accountants and no doubt, although the exercise would be far from complete, it will be rewarding.

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Having agreed, as we must all agree, with the report, that the main concern is the suspicion generated by national aids, nevertheless, unlike my noble friend Lord Stanley, I find that I derive at least one other lesson from this report. It is quite clearly that the French have the political will and probably the means to dominate agricultural production in Northern Europe. Here I think that I must part company with the noble Lord, Lord Walston, who, while most unhappy at national aids, nevertheless tended to feel that they were perhaps overstated in their influence. I cannot agree with him. I think that the French, in the case of eggs—and I go back to my own hobbyhorse of apples—have determined on sectors of production in which they are quite capable of monopolising the market over a 10-year period. It will be those areas where marketing will show a particular critical role, and I think that the committee's report, demonstrating the case of the turkey unit in Brittany, has just shown how easy it is by national aids to distort production in first one commodity and then another.
Make no mistake about it, the French have an extremely sophisticated and, I think, successful policy which does not always, by any means, transgress the rules of the CAP; and as they have—and they have demonstrated it so often—the political will to implement it. If we cannot stop it, then we must surely emulate it. Here I agree with the noble Lord, Lord Sainsbury, that we must hope that we can get further and highly specific support towards improving our marketing. I know that the Minister has had long discussions—they have been going on now for some months: in fact, I think that I could say for almost years—on the formation of a body, perhaps to be called a co-ordinating council. When eventually this organisation sees the light of day, I hope that the example of the French will be very carefully taken note of. Indeed, I hope that the figure which is quoted by the report as to the value of the subsidy will also be borne in mind when the case is taken to the Treasury.
Lastly, the report draws attention to yet another lesson. Almost in brackets it says in the same paragraph, paragraph No. 96, which has been quoted elsewhere, that:
"In the United Kingdom the improvements in productivity in recent years owe much to the effectiveness of the Government's research and advisory services".
Here, as it happens, is a national aid which has not been questioned. It is a perfectly legitimate national aid and, indeed, one could say that research budgets transgress boundaries and are available to all in the Community who might wish to take advantage of them.
It is ironic, therefore, to realise that in the present climate of Government cuts both the advisory service and particularly the experimental husbandry and horticultural stations are at least at risk in some respects. The Agricultural Research Council, of which I am a member, has certainly found it necessary to reduce its research commitment. My noble friend will say—and he will be quite correct—that this is not something which is the responsibility of the Ministry of Agriculture, which it is not. It is the vote of the Department of Education and Science which is in danger of contracting as regards the Agricultural Research Council rather than at present the vote of the
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Ministry of Agriculture on research.
Nevertheless, my point is that as we are seeing these very far-reaching cuts in the offing—not just at the two research stations which have already faced them, but probably elsewhere in order that the Agricultural Research Council can live within its means—surely here is an example of a national aid which should not be so curtailed.
The remedy is for the science vote, which is divided between the other research councils, to be given a specific instruction by the Government to protect, in this case, the Agricultural Research Council's budget on the science vote. I am quite clear that the other research councils would also make their own pleadings. That in no way invalidates the need tonight to ask my noble friend to assure us that he will put every pressure on his colleagues in the Government to make sure that the cuts which are anticipated in the Agricultural Research Council budget will be forestalled, and that this very valuable national aid, which the committee emphasises has been of such importance in increasing our productivity, is maintained.
8.49 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, the House will be grateful to the noble Lord, Lord Cledwyn, and to the whole of the European Community's Sub-Committee D for their report. It has been an interesting debate this evening. One of the remarkable things about it is that it has not been particularly contentious. It was one of my noble friends, Lord Mottistone, who said that he was so upset to see the noble Lord, Lord Cledwyn, sitting opposite him that he had to agree with every word the noble Lord said. That is a happy position to be in and, if I may say so, only reflects upon the natural stature of the noble Lord, Lord Cledwyn, for good common sense.
I think that the committee which he chairs with such distinction has undertaken a Herculean task in trying to take on such a complex matter as state aids, and trying to disentangle the intricacies of agricultural support as applied in 10 different countries—even if those countries have themselves a commonality as being member states of the Community. The task would have daunted many a less assiduous group of people. There are of course no easy answers, but the report identifies the major problems with astonishing clarity, and it makes a number of useful proposals for remedying the matter. My noble friend Lord Stanley, who is not here—
Lord Stanley of Alderley: Yes, he is.
Earl Ferrers: Yes, he has had the courtesy to return, and I am grateful to him for that. He said in a slightly derisory way, I thought, that he hoped that the Government would take action for once. Such charming support from behind one.
Lord Stanley of Alderley: I must interrupt my noble friend. I did correct myself on that.
Earl Ferrers: If my noble friend had had the patience to retain his seat a little longer I would have told him that the very mouthing of his words made himself choke, so that he corrected himself. But the responsi-

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bility for making any alteration to these state aids is essentially a Commission responsibility, but it is one in which of course the Government and the United Kingdom as a whole have a vital interest, and one in which we would like to see action taken. Indeed, my right honourable friend the Minister of Agriculture has frequently pressed for this.
My noble friend Lady Elliot said that she hoped that I would think that the committee had done an adequate and worthwhile job, which would have been unbelievably discourteous if I had used those words myself. It rather reminded me of the fact that it took me a long time to realise that when in your Lordships' House somebody was accused of making a moderate speech, that was a compliment. At school if one was told that one's essay was moderate, it usually implied disaffection on behalf of the reader, but of course in the terms of your Lordships' House it is the accolade of approval.
The committee have made a valuable contribution to an important subject which is of major concern to the Government, to the farming community, and to the whole of the United Kingdom. My noble friend Lady Elliot apologised for having made three speeches in two days. All I can say is that as one whose brother-in-law was Prime Minister in 1908 she learnt the game very young and has had much experience at it, and she need make no apology for making three speeches in two days.
The one thing that has emanated is that every noble Lord, and indeed noble Baroness, is concerned about national aids and the distortion which they can create. The noble Lord, Lord Walston, went a little wider when he referred to land ownership, taxation, and vehicles, tractors, coming into this country at different prices. I would not wish to go down that route this evening, other than to say that of course those are not national aids, but they are nevertheless an indication of the way that it is difficult to get pure commonality between all the countries. Much of that is due to the marketing policies, not of countries, but of individual companies. Of course, they all tend to distort, but they are not state aids.
The noble Lord, Lord Walston, and the noble Baroness, Lady Elliot, disagreed with each other on the abolition of state aids. The noble Lord, Lord Walston, said that he thought this would be a good thing. The noble Baroness said that she thought it would not be. All I can say is that if there was even that scintilla of discord in this House, with the courtesies of this House, just imagine what there would be in the Community and in the farming community were that particular action taken. There is nothing wrong with national aids as such; what is wrong is their not being cleared with the Commission, or if there is any form of subterfuge. In a perfect world there would be no national aids, but of course we do not live in a perfect world. The report indicates the reasons for this concern. The noble Lord, Lord Cledwyn, said that farmers were suspicious. The noble Lord, Lord Walston, did too, and I think my noble friend Lord Selborne did. I think that is perfectly true. People are suspicious. I should like to come to the reasons in a few minutes why that may be so.
I was a little disturbed that my noble friend Lord Brookeborough should refer to the fact of state aids
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possibly being the cause of the break-up of the common agricultural policy of the European Economic Community—not just state aids, but the contention that the common agricultural policy was not working as he felt that it should. I think that such talk is dangerous. Of course the Community is going through a difficult time, and of course we have to build on successes. It will not be easy. You cannot expect automatic success straight away, and particularly is this more dangerous when you go through a period of recession when each country tends to have a more nationalistic attitude than it might have had were conditions different. It is important that the Community should operate together, and this is what we seek to do.
Both my noble friend Lord Brookeborough and the noble Lord, Lord Dunleath, referred quite correctly to the problems of Northern Ireland, which I accept are peculiarly difficult. My noble friend Lord Brookeborough said that we ought to apply for the extension of the less favoured areas for Northern Ireland only. But I would remind him that in Europe we act as the United Kingdom, and it is correct that if we wish to seek an extension of the less favoured areas we should do it corporately and not piecemeal. Ministers are at present considering the best method of the presentation of our case.
The noble Lord, Lord Sainsbury, said that he thought that there should be greater collaboration between processors, producers, and retailers. I agree very much with that. Each is dependent upon the other, and as a country we could achieve much more for our industries both internally and for export if the various parts of the production and processing and retailing chain could work together and could be more co-operative in marketing together. My noble friend Lord Selborne agreed with that and referred to the initiatives which my right honourable friend is taking. My right honourable friend is particularly concerned over this aspect, and we want to see more moves in this direction, and he is working hard to achieve this.
Part of the reason for problems with regard to state aids is that people become suspicious that some other country is doing something which others do not know about. I think it can be summarised in three ways. Firstly, unregulated aids to agriculture distort competition between member states, and this not only causes resentment on the part of farmers and growers who are not receiving this assistance but brings the common agricultural policy itself, as my noble friend Lord Brookeborough said, into disrepute.
Secondly, these unregulated aids clearly undermine the decisions which are taken by Agriculture Ministers collectively, and thereby they threaten the whole operation of the common agricultural policy.
Thirdly, unregulated aids almost always, but not always, exacerbate the Community's existing surplus problems. The costs of disposal are then borne, not by the country which has given the additional aid, but by the Community as a whole, and often by the countries which have not given the aid.
It is no accident that the two countries who are the most concerned about the state aids are the United Kingdom and Germany, and they are, of course, the two who are most concerned about the Community budget because they are the two who pay. It is an insular and non-communitaire attitude for those coun-

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tries which are recipient countries from FEOGA to give additional aid to their own farmers, to stimulate the output from their own farmers and therefore the income to their own farmers and then let others pay the bill.
State aids should be, and are, agreed with the Commission, but the noble Lord, Lord Cledwyn, and my noble friend Lady Elliot, referred to the aid to the French turkey processors. Last year my right honourable friend referred that to the Commission. The estimated cost of the plant to which Lord Cledwyn referred is understood to be between £6 and £7 million, with an annual processing capacity of about 100,000 tonnes, which is not far short of the output for the United Kingdom's entire turkey processing industry. It is understood that the assistance included direct cash grants, subsidised loans, tax concessions and the provision of a site at a discount, worth in aggregate about one-third of the total capital cost of the project.
The price of 39p to 41p per pound at which French processors were offering turkeys in the United Kingdom last summer is estimated to be below the production cost and suggests that some further assistance towards operating costs might also be available. The matter was referred to the Commission, which took the view that none of the aids which we had referred to them was incompatible with the Common Market. But given the size of the plant, it underlines the danger that aids which individually may be technically legal can, because of their size, or when given in conjunction with other aids, have a very disruptive effect.
Then we had the problem of the state aids which France gave in 1980. In December 1980 they announced a measure worth about £380 million. That comprised a variety of measures but over half, about £210 million, consisted of direct income aid related to the turnover. The United Kingdom and other member states urged the Commission to investigate the package and take effective action to prevent the payment of the illegal aids. On 28th February 1981 the Commission instituted Article 93(2) action against the income element of the package, and by a formal decision dated 8th July 1981, they declared that aid to be incompatible with Article 92 of the treaty. The decision also instructed the French Government to abolish the measure. But by that time the money had been paid. That is another example of the distortion which can be created.
An issue of a similar nature which was raised by the noble Lord, Lord Cledwyn, was the aid package announced by the French Government in December of last year. That was not the same one; they had one in December 1980 and now we come to another in December 1981. That package consisted of some 30 individual measures with a total value of about £510 million. My right honourable friend the Minister of Agriculture has urged the Commission to investigate those aids promptly for legality and to take effective action to prevent the payment of any aids which are illegal.
The Commission's response has been hampered by a lack of information from the French Government. At one time the Commission were unable to obtain information from the French Government, despite the fact that details had been published in France, and
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French farmers had already been in receipt of forms inviting them to apply for aid within a specified date. So the information was available, but the Commission did not have it. However, the Commission have now initiated action under Article 93(2) of the treaty, which is the first step towards a reference to the European Court. The Government's comments have been invited and, in our reply, we have made clear our doubts about the legality of many elements of the package, and we have urged the Commission to take prompt and effective action against it.
We have also commented on the involvement of the Credit Agricole, an involvement which leads me to question the committee's view that its activities are not incompatible with the treaty. Certainly the existence of Credit Agricole is not incompatible with the treaty, but we question some of its activities. For instance, when the French Government provided those additional national aids last December, we understood that some of them were financed not by the French Government but, under direction from the French Government, by Credit Agricole. That blurs the distinction between the activities of a Government and those of a banking organisation, which thereby lays the workings of that organisation at least open to question—only, of course, in so far as the Community's state aid rules are concerned.
The other aid which is of major concern is the gas tariff which is paid to Dutch glasshouse growers. The Commission have for a long time declared that the tariff distorts competition and is therefore contrary to the Community's state aid rules. My noble friend Lady Elliot said the Dutch had been taken to the European Court for that. That is not in fact true. Rather than say it is not true I should say it is an inaccuracy. Last December the Commission issued a formal decision requiring the elimination of the preferential tariff. My right honourable friend has consistently and persistently urged the Commission to take action to remove this serious threat to growers which occurs throughout the Community, and in that he has been supported by every other member state. We expect the Commission to indicate very soon exactly what is to happen. Meanwhile, we are, of course, paying our growers the maximum aid which is permitted under the Commission guidelines towards their heating costs this year, as we did in 1981. It is much better if we can get these problems resolved within the Council of Ministers rather than taking various countries to court. We hope that there will be a resolution of this problem, which has distorted horticulture for far too long.
The Government have also been pressing for action on state aids generally. In his speech to the Council of Ministers at the beginning of the United Kingdom's Presidency, my right honourable friend drew attention to the difficulties and the inequities which are created by state aids and to the need to bring them under effective control. The noble Lord, Lord Cledwyn, asked, well, what is going to happen now, since my right honourable friend is no longer president? I think it fair to say that the Community as a whole is now much more aware of the problem than it was previously, and I think it equally fair to say that the United Kingdom can take much of the credit for this.
The Commission certainly recognise the need for

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more effective control, and in their recent Guidelines for European Agriculture they called for stricter discipline in the matter of national aids. They pointed to the importance of prior notification and they emphasised their determination to enforce the rules by requiring reimbursement of illegal aids or by refusing FEOGA cover for expenditure by member states. The Commission also proposed to clarify the rules on notification and to specify those aids which are prohibited and those which are authorised. I can assure your Lordships that we shall with great vigour continue to urge the elimination of unfairness, and this the noble Lords, Lord Walston, Lord Cledwyn, and my noble friend Lord Mottistone urged us to do. We shall do it.
The Ministry's attachés in the Community's capitals already have standing instructions to keep us informed of developments, especially in respect of aids which may have implications for United Kingdom farmers and growers, and these efforts will be maintained. I thought that the noble Lord, Lord Walston, was slightly unfair when he said that the attaches should have instructions to ferret out all of this information. The attachés are well aware of concern about state aids, not least because some of them have provided the information for the Committee, and I am sure that in the light of the Committee's report, they will increase their vigilance. But, my Lords, they have other duties to perform, and we must also bear in mind the fact that their effectiveness depends in large measure on official contacts. This means that excessive curiosity about state aids could prove to be counter-productive. But the Committee suggests that we should:
"continue to bring pressure on the Commission to maintain its current concern at the growth of state aids and to implement its expressed intention to bring them under more effective control".
I can tell your Lordships that we shall do this. I am sure that this will be met with approval by the Commission and I am sure, too, that the recommendations in your Lordships' report will be welcome to them.
I should however sound a note of caution, because the Commission, like our own Civil Service, are subject to tight limits on staff numbers. This could influence their approach to the suggestion that manpower resources should be strengthened, and it could also affect their view of a possible "state aids inspectorate". In any event the Commission may believe, as indeed the Government believe, that the answer to the whole problem depends upon the political will of member states, rather than on changes in organisation and personnel.
The Government agree with the Committee that the Commission's inventory on state aids is unsatisfactory in several respects, and the same certainly applies to the discontinued summary table. A number of your Lordships referred to this and were concerned about it. There is of course an inventory, which the noble Lord. Lord Cledwyn, referred to as, I think, a voyage of discovery. That was a delicious phrase, I thought. The inventory extends to some 3,000 pages, and the imagination does not have to be greatly distended to realise the physical problems which would be involved if it were to be translated into seven different languages. The Committee have described the document as:
"lengthy, detailed, obscure and out of date".
Frankly, I am not surprised at any of those adjectives.
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The difficulty is that if the document is truncated, then so is the information, and if the information is complete, then one may fall into the trap of the document becoming indecipherable.
I agree with the Committee and with many of your Lordships that it would be of immense help if there were some form of a more concise summary, but one which must nevertheless be accurate. I would not envy the Commission in this task, but I hope that they will consider the suggestions which have been made by the Committee. I think that it was my noble friend Lord Selborne who said that the Commission ought to set some outside body, some accountants, on to the problem.
The Commission have themselves announced the fact that they are aware of their shortcomings in the inventory, and they have recently commissioned a series of studies. They did not take my noble friend's advice and use accountants, but they have used management consultants. This is designed to establish whether the inventory is as comprehensive as it should be and to evaluate the effect of aids upon Community agriculture. We must not underestimate the practical difficulties of producing a comprehensive and up-to-date account of what is happening in 10 member countries. One must remember that the Commission's normal function is a regulatory one. We shall continue our efforts to achieve a situation in which British farmers can compete on fair terms with farmers in other member states of the Community. On the whole, that is all that British farmers have asked for. On the whole, that is all that they have the right to ask for. On the whole, that is the right which they have the right to expect.
In the longer term, our success depends on the recognition by all member states that unregulated aids are a disruptive force in the Community, and that the best long-term interests of each member state lie in observing both the rules and the spirit of the treaty. It is difficult enough to get it fair, when the whole variety of national aids which are available through the Community are legal, but if member states are going to play ducks and drakes with illegal national aids, then equity and commonality become a mirage and a source of disharmony and disunity.
An important factor is the attitude of the Commission, and they must demonstrate their determination to enforce the rules effectively and impartially. The Government, of course, will take up with the Commission any instances where any other member state is operating an aid which appears to be illegal, and which is to the detriment of United Kingdom interests, provided that we have sufficient evidence on which to base our representations.
I should like to conclude by saying that the committee chaired by the noble Lord, Lord Cledwyn, has done a valuable and monumental task in producing this report. I hope that the debate we have had this evening will galvanise and direct the Commission even more into realising the importance that we in this country attach to having fair, legal and just state aids for the benefit not just of the countries involved but also of the other countries upon which those national aids have an impact.
9.16 p.m.
Lord Cledwyn of Penrhos: My Lords, may I express my appreciation to all noble Lords who spoke in the debate, which has been helpful and comprehensive. As she is the only Baroness in our committee, may I refer specifically to the noble Baroness, Lady Elliot, and thank her for her contribution which was full of common sense and knowledge of the problems. The noble Baroness spoke of the working party on the conditions of competition in agriculture. She will recall that the working party was discussed by the subcommittee and we were told a little about its work by a senior Ministry official—perhaps noble Lords would refer to Questions Nos. 37 and 38—where the official quoted the Minister as saying that it might become more of an investigative body. I am not sure that the Commission share that view at present.
Every contribution to the debate was valuable and, I am sure, of assistance to the Government in their study of these problems. It is significant that two noble Lords from Northern Ireland, the noble Viscount, Lord Brookeborough, and the noble Lord, Lord Dunleath, contributed. Their speeches showed a deep concern about agriculture in the Province and we must share that concern. I am grateful to the noble Earl, Lord Ferrers, for his full reply and his characteristically courteous remarks about the report. It will encourage the sub-committee that the Minister is generally in support of their approach. The noble Earl's remarks about the Breton turkey plants and the other French packages were particulary interesting.
I am glad that the noble Earl believes that state aids are under better control at present. I hope that this is true. On his point about excessive curiosity, I would say that the committee's view is that it is only greater openness that will remove excessive curiosity. We have had a valuable session and no doubt we shall return to these matters in due course.
On Question, Motion agreed to.

British Waterways Bill [H.L.]
The Bill was reported from the Select Committee without amendment and recommitted to an Unopposed Bill Committee.