Lords Sitting of 19 May 1982

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

Public Demonstrations and Criminal Offences
Lord Monson: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the behaviour of those demonstrators at a rally in Hyde Park on 9th May who were chanting "British fleet, murder fleet, we want the Brits' defeat" and "Victory to Argentina" and who tore up and burned Union flags, was seditious; and if so, whether they will ascertain why nobody was arrested and charged with sedition.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, may I remind the House of the answer I gave to a question asked last week by my noble friend Lord Alexander of Tunis. It is for the courts and not for Her Majesty's Government to decide what conduct is capable of constituting a criminal offence and in what circumstances. The police are independent officers of the Crown and it is not for Her Majesty's Government to decide what action they should take when they are present for the purposes of ensuring public order at a demonstration. I am informed that, contrary to what is suggested in the Question, three persons were in fact arrested, one for assault and two for offences under Section 5 of the Public Order Act 1936. I am informed that at a subsequent rally under the same auspices last Sunday, there were two more arrests under this section of the Act.
Lord Monson: My Lords, I thank the noble and learned Lord the Lord Chancellor for his reply. Would he agree that, if anyone in France were to burn the tricolour or to accuse the French Navy of acting as savages, or if anyone in the United States were to burn or desecrate the Stars and Stripes, they would almost certainly go to prison? Is the noble and learned Lord satisfied that the law of this country is sufficient to deal with this kind of grossly offensive behaviour? If so, does he think it would be right to encourage the police and the courts to come down harder on such activities?
The Lord Chancellor: My Lords, I do not set myself up as an expert on the law of either France or the United States. With regard to English law, as there are five cases pending, perhaps we ought to await the judgment of the courts.
Lord Blyton: My Lords, will the noble and learned Lord say, if we had been at war and the Defence of
698
the Realm Act had been in operation, in the context of this Question, what would have been the legal position?
The Lord Chancellor: My Lords, that is a very interesting question, but it is a hypothetical one.
Lord Brockway: My Lords, is the noble and learned Lord aware that the organisers of this rally, initiated by Quakers, dissociated themselves publicly from any use of slogans of this character, which were due to a small infringement of the demonstration?
The Lord Chancellor: My Lords, I am very glad to hear what the noble Lord, Lord Brockway, says. I understand that the slogans were uttered by members of the Socialist Workers Party—the SWP.
Lord Paget of Northampton: My Lords, I wonder whether the noble and learned Lord can remember the name of his predecessor who, when faced by a similar Question replied, "As far as I am concerned, they can sing what they like if only they would sing it in tune."
The Lord Chancellor: I am afraid, my Lords, that he was a more generous man than I.

Horticulture: Fuel Costs
2.40 p.m.
Baroness Elliot of Harwood: My Lords, I beg leave to ask the Question which stands in my name on the
Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress is being made in negotiations with our European partners to offset the high fuel costs borne by the horticultural industry.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, there has been a satisfactory outcome to my right honourable friend's continued pressure over the last two years in the Council of Agriculture Ministers to restore fair competition to the glasshouse sector. At yesterday's council, the European Community Commission reported their agreement with the Dutch Government to eliminate the Dutch growers' preferential gas tariff by 1st April 1983 by alignment with the industrial tariff on an oil equivalent basis.
Baroness Elliot of Harwood: My Lords, I should like to thank my noble friend Lord Fellers very much indeed for what appears to be a very successful outcome to what was a very difficult thing for the glasshouse industry in this country. I congratulate and thank my noble friend warmly for having brought this about.
Earl Ferrers: My Lords, I am much obliged to my noble friend.

The National Health Service: Increase in Funding
2.41 p.m.
Baroness Gardner of Parkes: 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 by what amount they have increased spending on the National Health Service in the past two years, in real terms.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, between 1979–80 and 1981–82 expenditure on the National Health Service increased by about 4.75 per cent. in real terms. After allowing for the savings which we asked authorities to make in 1981–82 by more efficient use of resources, growth in services amounted to about 5 per cent. We plan a further real increase in services of just over 1 per cent. in the current financial year. This will come very largely from new resources, but we are again asking authorities to make a contribution through further efficiency savings.
Baroness Gardner of Parkes: My Lords, while I thank my noble friend the Minister for his reply, I wonder whether he can tell us what proportion of the expenditure goes on wages and salaries, and will he also comment on the cost in terms of wasted and lost resources—apart from the very considerable human anxiety and suffering—which may result from today's industrial action? What will be the loss to the health service in terms of unused resources today?
Lord Trefgarne: My Lords, in answer to my noble friend's first supplementary question, I can say that about 75 per cent. of National Health Service expenditure goes on salaries and wages. With regard to my noble friend's second supplementary question, I have to say that it would be difficult to determine that figure—at least until we have a better idea of the effect of today's unfortunate action.
Lord Wells-Pestell: My Lords, may I ask the noble Lord the Minister whether he will be good enough to expand on the Answer he has given his noble friend and indicate whether the service given by the National Health Service is as good today as it was in 1979? Will he say whether or not the patient care, as a result of shortage of money, is as good now as it was three years ago?
Lord Trefgarne: My Lords, as I have said, the increase in expenditure in real terms since 1979–80 is a figure approaching 5 per cent. The answer to the noble Lord's question must therefore be that the standard of service has indeed improved.
Lord Byers: My Lords, may I ask the noble Lord what would be the cash sum reouired to meet the Government offer to the hospital workers, and how much extra in cash would be required to meet their demands?
Lord Trefgarne: My Lords, if we were to meet the full demands of the Health Service unions I think the figure would be—I am speaking from memory on this—something like £300 million or £400 million.
Lord Molloy: My Lords, as a previous report submitted that the increase in Health Service expenditure would have to be about 5 per cent. in order to enable the service to stand still, to meet the cost of inflation and other impositions they are suffering from, does the noble Lord not agree that, although this is not a bad performance on the part of the Government, we are not moving forward as rapidly as we should? Would it not be a much better idea if the Government, instead of waiting for the employees of the Health Service to get exasperated, were to meet them and see if they could meet some of their demands in a more rational way, rather than let the situation continue as it has been doing?
Lord Trefgarne: My Lords, I think we have met the demands of the Health Service employees in a rational way. For example, we have provided additional funds over and above those that were originally earmarked for this purpose for the nurses and midwives. Their offer, as the noble Lord will know, is in excess of 6 per cent. The figure I gave for the increase in Health Service expenditure generally since 1979–80 was, of course, the figure which had already taken account of inflation.
Lord Molloy: My Lords, is the noble Lord aware that much of that money is coming from the increased prescription charges and that the Government are giving with one hand and taking away with the other? With regard to the point on industrial action, I believe—
Noble Lords: Question!
Lord Molloy: My Lords, is the Minister aware that, on information I have previously received, I have in this House asked the Government to meet the leaders of the trade unions involved in order to avoid the industrial action that is now taking place? It is still not too late for the Government to make a move.
Lord Trefgarne: My Lords, there has been no lack of communication between my right honourable friends and the trade union leaders in this matter, but of course the question of industrial relations between the workers and the management is a matter for the health authorities themselves and is not primarily a case for ministerial intervention.
Lord Rochester: My Lords, do not these exchanges demonstrate the need for a pay policy which caters not only for employees in the National Health Service but for those employed in public services generally?
Lord Trefgarne: My Lords, my recollecton is that in previous times when a pay policy of one sort or another has been in operation we have not avoided difficulties of this kind.
Lord Wells-Pestell: My Lords, may I ask the noble Lord the Minister whether it is not a fact that in the last three years there have been ward closures owing to lack of money and curtailment of services for the same reason?
Lord Trefgarne: My Lords, it is sometimes the case that Health Service facilities that have been in existence for some time, such as hospitals that have been built for many years, do actually need to be closed, but in general the aggregate result of Government policy in this matter is an increase in expenditure, which I described in the original Answer.
Baroness Gardner of Parkes: My Lords, would the noble Lord the Minister confirm that when the pay policy which has been referred to was in force the review bodies' recommendations at that time for people working in the Health Service were actually set aside and not implemented? Can he tell me in how many years those review body recommendations have not been honoured, and will he say whether he is considering setting up a nurses' review body?
Lord Trefgarne: My Lords, as my noble friend will be aware, my right honourable friend the Secretary of State discussed development of permanent arrangements for nurses' pay with the Nurses and Midwives Whitley Council on 17th March. As a result of that meeting, a small working group, on which both sides of the Whitley Council will be represented, has been asked to produce more detailed proposals. We are most anxious to move forward on this complex issue and I hope that the working group will meet shortly.
Baroness Gardner of Parkes: My Lords, I would ask the Minister to answer the other part of the question, concerning the failure of various Governments to implement review body recommendations.
Lord Trefgarne: My Lords, I have not got that information to hand. Perhaps I could write to my noble friend.
Lord Molloy: My Lords, is the noble Lord aware that, while he is quite right when he says that there are certain old hospitals that have been closed, and it may be that that was necessary, what causes frustration is that a brand spanking new hospital, of which I am sure he is aware of will be when I have finished, was not allowed to be opened to the full, but only half of it—
Noble Lords: Order, order!
The Lord Privy Seal (Baroness Young): My Lords, will the noble Lord, Lord Molloy, please put a question correctly and not make a short speech?
Lord Molloy: My Lords, I will immediately respond to the noble Baroness the Leader of the House and put the question quite fairly. I thought I put it quite fairly, anyway. As the noble Lord said, certain old hospitals have been closed, and maybe that was quite right and proper, but is he aware that what is causing frustration is this: there is a brand new hospital of
702
600 beds in Ealing, with all facilities—it is only 18 months old—and only half of it is allowed to function because of the action of the Secretary of State? Many people find that totally irresponsible.
Lord Trefgarne: My Lords, as the noble Lord will know, the day-to-day management of the health service rests with the regional health authorities and the district health authorities. It is not always the case, however, that difficulties such as the one which the noble Lord has described are the result only of lack of resources.
Lord Beswick: My Lords, would the noble Lord the Minister not agree that, on the face of it, there seems to he something wrong with our society, which offers in the case of the most civilised institution in the country, namely, the health service, a salary increase of 4 per cent. or 6 per cent. to the workers, whereas at the same time the most decadent of the organisations in the country, namely, the Sun newspaper, has just settled at 9½per cent.?
Lord Trefgarne: My Lords, I do not think that I could be asked to comment on that matter, which, of course, goes pretty wide of the Question on the Order Paper. Clearly the Government have no responsibility for the matter to which the noble Lord refers.

Church of Scotland Report: Scottish Identity
2.51 p.m.
Lord Glenkinglas: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have seen the report of the Church and Nation Committee of the Church of Scotland, published on 12th May, and if so, whether they will make a statement on that part of the report which discusses "The Scottish Identity".
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, I have noted with interest the report of the Church and Nation Committee to the General Assembly of the Church of Scotland, and in particular that part of the report to which the Question refers. It implies that the Scots should build on their strengths and eradicate their weaknesses and in that respect expresses sentiments with which I am sure your Lordships—whether Scottish or not—would fully agree.
Lord Glenkinglas: My Lords, while thanking my noble friend for that slightly curious reply, may I ask whether he agrees that it is not altogether fair, when the Scottish workforce has taken a number of years to come away from the reputation of the "Red Clydeside" to being the favourite investment point for almost all American industry in Europe? In those circumstances, is it not rather unfair for the Church of Scotland at this moment to suggest that

703
Scots are too fat, too lazy and too drunk to be of much use in the industrial field, and is this not quite contrary to what my noble friend and his right honourable friends are trying to do to bring industry to Scotland?
The Earl of Mansfield: My Lords, the general assembly is due to debate this report tomorrow, and I hesitate to pre-empt its deliberation. However, what I can say to my noble friend is that many representatives of foreign companies which have set up in Scotland have expressed their satisfaction at Scottish workers' competence and adaptability to change, and as witness of that we have the example of the development of the electronics industry in Scotland and the highly successful oil-related industry up the eastern seaboard.
Lord Mackie of Benshie: My Lords, would the Minister not agree that self-criticism is quite a healthy sign? Might it not apply to the Government in some cases?
The Earl of Mansfield: My Lords, I think that it is worthy of note that the committee has, in fact, paid tribute to the Scottish Office for its contribution to the development and the fostering of national pride, and for its securing the development of all things Scottish.
Lord Mackie of Benshie: My Lords, is the Minister not aware that that answer illustrates the need for self-criticism instead of self-praise?

Business
Lord Sandys: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Ferrers will, with the leave of the House, repeat a Statement that is to be made in another place on the Agriculture Council.
My Lords, with the leave of the House I would now like to make a brief announcement about future business. It has been agreed that in the place of business which currently stands on the Order Paper for tomorrow, Thursday 20th May, a full debate will be held on a Motion to take note of the situation in the Falkland Islands. The Motion will be moved by my noble friend the Leader of the House. The continuation of the Committee stage of the Local Government Finance (No. 2) Bill, which was to have taken place tomorrow afternoon, will now be taken next Monday, 24th May. This will be followed later on Monday by the recommitment stage of this Bill which my noble friend the Chief Whip explained to the House last Thursday.

Coal and the Environment
3.4 p.m.
Lord Kearton Lord Kearton rose to call attention to the report of the Commission on Energy and the Environment entitled Coal and the Environment (8th July 1981); and to move for Papers.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper.
704
I should perhaps mention that the Motion was originally put down by my noble friend Lord Sherfield who is unfortunately unable to be present. The Commission on Energy and the Environment was appointed in March 1978, as a standing body by the Secretaries of State for Energy, the Environment, Scotland and Wales. The terms of reference—to advise on the interaction between energy policy and the environment—were very broad. The commission decided that its first task would be to consider the longer term environmental implications of increased coal production and use in the United Kingdom. "Longer term" was assessed to cover the period to the end of the century. "Use" included conversion to other fuels and raw materials.
The commission, under the chairmanship of Lord Flowers, had a most distinguished membership. It produced by mid-1981 a most distinguished report, the result of an exceptionally thorough study. Evidence was taken from some 70 organisations covering the whole spectrum of those with an interest: national and local government; industrial and commercial undertakings; agricultural and transport activities; trade unions; planning and conservation bodies: health and safety assessors and monitors; research organisations and learned societies et cetera. The commission took evidence from individuals as well, and the members paid many visits, during which they met a whole range of local representatives. The commission received most gratifying support in the conduct of its inquiries from all it approached, or who approached it, and the relevant nationalised industries—the Coal Board, the Central Electricity Generating Board and British Rail—were especially helpful.
The report is a comprehensive and indispensable source book on the implications of the future use of coal. It is written with clarity—about 200,000 words—and is supported by numerous tables, diagrams and photographs. It draws a number of conclusions and makes 70 detailed recommendations on matters great and small. As befits the commission's noble chairman, who is himself the head of one of our premier colleges of science and technology, the report meets rigorous scientific standards. It provides a practical guide to action both with regard to past dereliction and future safeguards affecting the environment. And withal, the balancing of costs against benefits as always came firmly in the forefront with regard to recommended action.
It must have been with some surprise that the members of the commission learned as their report went to press that the Government of the day had decided that with this report the commission then fell into abeyance. I hope that Members of your Lordships' House will express their disappointment at what appears to be a very short-sighted decision. This particular standing commission represented voluntary service to the state at the highest intellectual and practical level. It is difficult to believe that any other approach to the problem it considered would have been equally objective or equally effective. The next field of study which the commission indicated it had in mind was an assessment of conservation and efficiency in energy use. That would have been most useful.
The commission's overall conclusions were more favourable to coal production and consumption than

705
perhaps it had expected when it began its task. During the inquiry the commission observed an increasing emphasis by the Coal Board, and an increasing sensitivity, to ameliorating the environmental hazards of coal operations. The members were favourably impressed by the best current practices of the Coal Board while recognising that at some sites these could not be accepted in toto. In such cases the commission satisfied itself that best practicable practices were tolerable.
Subject to important reservations and qualifications, the commission concluded that there were no insuperable obstacles to increased coal production and consumption over the next 20 years. These reservations, besides environmental and planning matters, included the meeting of productivity targets and the production of coal to be sold at competitive prices. This implies the closure of high cost mines. In considering the past of the coal industry, when it was a cornerstone of our one time industrial pre-eminence, the commission had to have regard to the previous sins of omission and commission. The image of coal as a dangerous and dirty industry for its workers, destructive of local environment and amenities where produced, and inconvenient and grimy in use, is deep-seated and was justified. Today's production of deep-mined coal is little more than a third of its peak before the First World War and is only about half what it was in the years immediately following the end of the Second World War. The availability of cheap imported oil in the 25 years to 1973 and the development of North Sea natural gas from the end of the 1960s weaned domestic, industrial and commercial users away from coal as a fuel.
The immense improvements in urban atmospheres brought about by the Clean Air Acts and supporting legislation are in large part due to the much reduced use of coal domestically and industrially. Now, having become used to the greater convenience, versatility and cleanliness of oil and gas, it is clear that only stark necessity or compelling economic reasons will lead the generality of consumers to change back to coal.
Coal has been left with power stations as its major market. Here the post-1973 relative price changes with regard to oil have left coal as the economically desirable fuel, and it is an end use where large-scale arrangements for delivery, complete combustion, ash disposal, and flue gas treatment are at their most developed and where the environment is best protected. Until a few years ago the power station market was considered to be very vulnerable to the cost advantages of nuclear energy. The change in attitude here has been in part due to the construction delays in the United Kingdom's second generation nuclear power stations, the AGRs, and consequent large cost overruns, in part to a heightened sense of the possible health hazards from nuclear station mishaps and from disposal of their waste; and more esoterically to a fear that nuclear power stations could possibly provide a source material for nuclear weapons. In actual fact, the health and safety record of existing nuclear stations in this country is outstandingly good. Pollution of any kind has been virtually nil. Generation costs have been low. It is my personal view that safety aspects are obsessively provided for in recent designs. But even the great expense of providing for safety contingencies of the most improbable and remote kind still seems to leave power from such nuclear
706
reactors cheaper than that provided by coal; and though the proliferation danger with regard to weapons is one to be taken most seriously, it is also one which can be contained.
With regard to nuclear power, it seems that the results of the French programme are likely to be decisive. Their ambitious plan has survived changes of Government and, on present evidence and expectations, will give France, for the rest of the century, the cheapest bulk power supply in Europe, cleanly and elegantly. The commission took the view, independently of, but in line with, Government policy, that in the interests of diversity there is a strong case for the United Kingdom to develop coal and nuclear power. A component of the argument is that the United Kingdom has coal in plenty, enough for hundreds of years. The commission put the United Kingdom end-of-the-century demand for coal at 110 million to 170 million tonnes a year, with production levels at 100 to 150 million tonnes. Within these figures there is scope for both imports and exports. The range is lower than that considered likely only a few years ago. It reflects changed assumptions about the long-term levels of economic growth, estimates as to the effect of conservation and the development of more energy-efficient manufacturing processes, and a judgment on the sharing of power generation between coal and nuclear sources. Electricity generation remains a principal use for coal, with coke ovens a smaller one, and the growth area, compared with the present day, is forecast to be a switch by industrial users from oil back to coal. Synthetic natural gas is seen as a possible major user in the early years of the next century, but not before.
Present pits will not be capable of producing coal, even the lowest forecasts for the year 2000. As established pits are worked out, there will have to be a steady opening up of new pits. In traditional areas, establishment of new pits will be regarded as normal development. In areas hitherto free of coal production there are usually strong anxieties and reservations. As the commission report comments, the benefits of new developments accrue to the country as a whole, while the disadvantages are borne by local communities.
There is no doubt that past dereliction caused by the coal industry over a very long period was shameful: there was dereliction of townscapes, dereliction of once-beautiful countryside and pollution of rivers. The latter continued in some areas long after individual mines had been closed down, with the discharge of particularly obnoxious overflow liquors. Efforts at reclamation have been actively in process for some years now with some creditable success, but much more remains to be done. The cost is presently met from a variety of sources. The Coal Board feels that it cannot be burdened with the cost of putting right past bad practice, a view which the commission share. The cost should be a central Government responsibility.
The drawbacks of future deep-mined coal production are brought out in the commission's report. These drawbacks are land subsidence, the problem of the disposal of spoil, and pollution caused by combustion. The actual mine buildings, pitheads and colliery surface activities can now be made visually acceptable and, if the immediate environment is landscaped and

707
kept tidy, even visually agreeable. This will be particularly true in a new area such as Selby.
Coal production is now based on mechanised long-wall mining and power loading instead of the old stall-and-pillar method, with hand loading. Working conditions at the coal face are in consequence much better than they were formerly, although still uncomfortable, unpleasant and dirty. We owe a great debt to our miners who are undertaking work in such an industry. There has been a considerable reduction in the incidence rate of accidents and deaths, although as an industry coal mining is still high on the list of hazardous occupations. There has also been a welcome and marked fall-off in new cases of pneumoconiosis.
The new methods give rise to much more spoil than the old and are not conducive to back-stowing. There is more surface land subsidence. The workings collapse behind the coal face and this is reflected at ground level to an extent depending on the depth of the mine, the thickness of the seams being extracted, and the nature of the local strata. What happens at the surface can be forecast with some accuracy. Subsidence can be minor or severe, and the effects likewise. In severe cases, buildings, pipes, sewers, cables, drainage, roads and rail are damaged as well as agricultural land.
The areas subject to subsidence, minor or severe, are large—perhaps up to 50 square miles or so a year. Severe damage is, in fact, the exception. But the figures are still formidable. In the East Midlands coalfield in a 10-year period recently examined, 62,500 houses were damaged. Most of the damage was classified as slight, but 2,000 cases were ranked as appreciably damaged and 250 as severely so. I have the impression that the numbers in some of the Yorkshire areas are higher. The Coal Board pays compensation. This compensation amounted to £54·7 million in 1980–81 and perhaps could be as much as £80 million in 1981–82. But the compensation does not have regard to the worry, the upset and the general unhappiness caused by living in houses affected by subsidence, whether slight, appreciable or severe. This was vividly brought out by Members of Parliament from mining areas recently, speaking on the commission's report in a debate in another place.
With regard to spoil, the present national ratio of spoil to coal is 1:2, although it is appreciably higher in some districts. There are 50 to 60 million tonnes of spoil a year to be disposed of. This is about five times as much per year as in the 1920s, when coal production was much higher. More spoil is due to be tipped in the next 20 years—half as much again—than in the whole history of the industry to date. It is estimated that 20 square miles of new land will be required to accommodate this spoil. The commission stops at the year 2000. Perhaps it could not contemplate the thought of more than 100 square miles of new land being required for tips in the next century.
It is true that modern techniques of restoration allow land to be restored on one part of the site as tipping proceeds elsewhere. But even after restoration the land naturally is not what it was. The problem is exacerbated by the current geographical concentrations of derelict spoil tips, active spoil tips, and waste
708
lagoons. One-third of current spoil is in the Barnsley, Doncaster, North and South Yorkshire areas. There may not be sufficient land nearby to accommodate the spoil of the next two decades in an acceptable manner. Distant disposal of spoil is more expensive, and possible reclamation areas or estuarine fill-in sites only offer limited capacity.
The commission expressed appreciation that the Coal Board have made great advances in safer tipping and had reduced dirt and dust pollution in the process. The new tips are lower and less intrusive than the old conical tips and need more land for a given weight of spoil. More use is being made of landscape architects—but as consultants. The first lone landscape architect direct employee of the Coal Board has now been engaged—I think.
Opencast mining for coal in the United Kingdom is a relatively recent development—it began in 1942—and now accounts for about one-eighth of total coal production. Although the operation is controlled by the National Coal Board it is characterised by different management, different unions and different plant than deep-mined coal. There were 67 sites open in 1981. The area affected or planned amounts to 40 square miles. The sites can be open for a period of years, and when extraction is complete restoration times are five years initially under detailed supervision and costs about £1,500 an acre.
Opencast mining is an unpleasant visual intrusion and the workings cause dust, noise and heavy road traffic. In some parts of the country opencast mining occurs in residential areas with workings coining up to 50 yards from property. The inconvenience and disturbance are intense. The evidence to date is that restored land gives lower agricultural yields than virgin land, and there is a lasting effect on the ecology of an area and a substantial reduction in the quality and variety of a landscape.
It has to be said that much of the coal produced is of good quality. Some finds special applications. Some is used to upgrade poor quality deep-mined coal, and the operation is profitable. In the Coal Board's recent finances, profits on opencast coal have virtually offset the losses on the much greater volume of deep-mined coal. Environmentally, opencast coal production is a disaster. The commission would like to see it progressively decline as the new, efficient and lower cost deep-mine production capacity becomes available; and who would disagree?
With your permission, my Lords, may I turn to coal use. The burning of coal gives rise to grit, ash, smoke, tar and a wide range of atmospheric pollutants. It is best used in large power stations or in industrial boilers where the measures to control and minimise all the adverse possibilities are most effective. A large coal-fired power station, burning up to 20,000 tons of coal a day, is visually attractive; causes no local dirt, noise, smell or pollution; is effectively landscaped; and internally is almost clinically clean.
A recent brochure from the generating board called Landscape in the Making gives strong pictorial evidence of the environmental success of the generating board's efforts. Many of their procedures were initiated 25 years ago by that most eminent Member of your Lordships' House, Lord Hinton. The brochure itself is virtually the swansong of Mr. Glyn England, whose

709
recent departure from the chairmanship of the Central Electricity Generating Board is a matter for such general regret.
A large power station gets its coal conveniently and cleanly by a so-called rail merry-go-round system direct from the pit, and the coal is off-loaded automatically in enclosed conditions, and mechanically and cleanly distributed to stockpiles. Ash is either sold for further processing or transported to distant sites to be used as fill, or to go on progressively landscaped tips. About 12 million tons of ash is produced per year, and commercial uses have been found for about 5 million tons of this. The amount of ash going to tips is currently less than 10 per cent. of the Coal Board's spoil, and is likely to diminish.
Flue gases are tar free because of complete combustion of the coal, grit-free because of the effect of separation, and have a low ash content. The gases are discharged from high stacks, and well diluted before reaching ground levels. But there still are respirable particulates, less than 15-millionths of a metre in size, and therefore inhalable, discharged to the atmosphere from coal combustion. Even though so much lower than in the days of the domestic coal fire, it amounts to several thousand tons a year.
Traces of carcinogens are released. The corn-mission cannot put a figure on any death rate from these carcinogens, but feel there could be an additive effect in putting up the death rate from lung cancer due to cigarette smoking by up to 150 extra deaths a year. This would seem to me to be very much a top figure. The commission also considered the effects of radiation due to products from any radioactive materials in the original coal, and gave reasons for dismissing this particular hazard as negligible.
Sulphur dioxide emissions in flue gases are substantial. There are an estimated 5 million tons a year in total of surphur dioxide released to the atmosphere in this country. Three million of this 5 million tons comes from coal. This figure could rise to 4 million tons from coal by the year 2000. The sulphur dioxide is so well dispersed due to the high chimney policy that there is no convincing evidence of bronchial troubles being increased or of crops being seriously affected. There is some hope. There is some corrosion of buildings, and there is some incidence of acid rain. Great Britain contributes a small proportion of the acid rain falling on Scandinavia.
Measures to reduce sulphur dioxide emissions are possible, but expensive, and a case of irrefutable need has not been established. Nevertheless, the nuisance exists, even if it is tolerable. Nitrogen oxides—rather unpleasant materials—are also products of combustion. The emissions are estimated at 2 million tons a year in this country, about half from coal. There is no conclusive evidence of ill effects. As with sulphur dioxide, this contaminant is heavily diluted.
A major product of combustion, whether of coal, oil, wood or gas, is carbon dioxide. About a billion tons a year is produced in the United Kingdom. There is some evidence of a gradual build up of carbon dioxide in the world's atmosphere and a continuation of this trend could lead in time to a so-called greenhouse effect, with a slow increase in the world's average temperature. This would threaten the stability of climates worldwide. But whether the long-term threat
710
is real or not, I doubt whether any of those Members of your Lordships' House here today will live to see it.
In considering the future use of coal I have mentioned that the commission saw a big increase, a quadrupling in fact, in the amount of coal used by industry. The report draws particular attention to the advantages, from the point of view of efficiency and reducing some sorts of pollution, of fluidised bed combustion, which they wish to see encouraged. As a personal view, I think the grant inducements and economic advantages of using coal will have to be greater than at present, if the change back is to occur. The transport of the coal, the storage requirements, the ash disposal needs, are all practical disadvantages for an industrialist. With modern equipment, the coal-fired boilers can be less labour intensive than formerly. But they are likely to require more supervision and maintenance than the equivalently rated oil-fired boiler.
The commission have also studied the lively impact of synthetic natural gas plants, based on coal. If the technique was adopted to provide the equivalent of the present United Kingdom natural gas consumption, a number of major plants would be required, using 70 million tons or even 100 million tons of coal a year, and costing many billions. Apart from the increased coal production adding 50 per cent. or so to subsidence areas, and to spoil tip areas, already formidably large, the SNG plants themselves would bring their own environmental problems. The commission believe that with forward planning starting now the environment need not be put under too great an additional strain. But strain there would be. Success would depend on finding a sufficient number of suitable sites. The commission suggest the search and identification of such sites should start very soon.
I have doubts myself about the provision for many years of large-scale synthetic natural gas plants. The capital costs are so high, and the gas tends to be so expensive. The need in the United States would seem to be much more urgent than our own, on the available statistics. But many of the projects envisaged two or three years ago have now been put on one side, and the search for more natural gas stepped up, a policy which we ourselves should follow.
I have run out of time and I have done scant justice to the commission's remarkable report. I know that Her Majesty's Government have it under close study and will comment in due course on its numerous specific and valuable recommendations. For myself, I would say that the commission have, by their very thoroughness, persuaded me to the view that coal, while plentiful in this country and on a world scale, is a fuel of last resort. Its extraction and use, if properly controlled, can be made tolerable. The commission's 70 recommendations are directed to that end. We have heard much in recent years about the possible hazards of nuclear power. I venture to think that if nuclear power had come first, the uproar on environmental grounds against the introduction of coal as a primary fuel would have been indubitably not less than strident. My Lords, I beg to move for Papers.
3.21 p.m.
Lord Skelmersdale: My Lords, the House should be grateful to the noble Lord, Lord Kearton, and the

711
noble Lord, Lord Flowers, for giving us the opportunity to debate this very topical subject today—for it is just that, with both the comparatively narrow subject of the report and the much wider environmental implication of increased coal use that arise therefrom. The noble Lord raised both points in his speech. The Government, like the Commission on Energy and the Environment, attach great importance to public discussion and understanding of energy policies and not least their relationship to the environment in which we all live. Hence today's debate is particularly welcome, as was yesterday's "stand part" debate on Clause 15 of the Oil and Gas (Enterprise) Bill, all the more so when one recognises, as the commission has done, that coal is likely to play a central and growing role in the United Kingdom energy strategy for many years to come.
I join with the noble Lord, Lord Kearton, in congratulating the noble Lord, Lord Flowers, and the other members of the Commission on Energy and the Environment on producing a thorough and painstaking study. I am delighted to see that Lord Flowers is to speak later, and will listen carefully to what he says. I wish also to thank the noble Baroness, Lady Birk, for her personal kindness to me; having recognised my state of shellshock, she has allowed me to precede her in the batting order for today's debate. Before proceeding, I would make two personal remarks to the noble Lord, Lord Kearton. First, I believe there is no one in this House better qualified, through his long service to the country in the energy field, both inside and outside your Lordships' House, to introduce this debate. Secondly, I promise him that I will neither misquote his remarks nor quote them out of context; he at least will understand what I mean.
The Government welcomed the commission's report when it was published. It represents a valuable contribution to the discussion and the Government are now giving careful and detailed consideration to the recommendations and conclusions in the report; there are over 120. We have asked all the bodies who gave evidence to the commission, and other interested organisations, for their comments on the report. We cannot at present give a date for publishing the Government's formal reply, but we are striving to complete our consultations and deliberations as quickly as possible. Today's debate will, I am sure, add further to our appreciation of the wide-ranging problems involved. I hope the House will appreciate that it is not for Lords in Waiting to announce Government policy, and therefore I am unable to anticipate in detail the Government's reply to the commission's report. I should like, rather, to explain more generally the Government's thinking on energy policy and its interaction with environmental interests.
The fundamental aim of the Government's energy policy, as recorded in the opening chapter of the commission's report, is to ensure the availability of adequate and secure supplies of energy at the lowest practicable cost to the nation. That involves ensuring that all fuels are used efficiently and cost effectively and that our energy resources are developed to meet our long-term needs. The concept of lowest practicable costs is clearly crucial to our deliberations here, and I will spend a few moments on it. As the com-
712
mission's report says in its first chapter, the scale of costs imposed for environmental reasons has to be considered against the decreased competitiveness of our coal in the market place. In other words, there has to be a trade-off between environmental values and energy policy objectives.
I would not want to give the impression that any simple, arbitrary rules can apply here. The commission have, I believe, drawn the same conclusion in their final chapter, where they say that the realities of pollution control require a continuing balance to be struck between the costs and benefits of pollution abatement for industry and society. There are several aspects to this problem. Allocation of costs is important in a market economy. The "polluter pays" principle has been an integral part of pollution control policy in the United Kingdom for a long time. As the commission say in paragraphs 44 and 45 of Chapter 1, in the case of the current activities of the coal industry, this means that the cost of environmental control should in general be borne by the National Coal Board and be incorporated in the price of coal. Dealing with pollution from past activities raises difficult questions. Finding the right balance between minimising energy costs and protecting our environment will often be a difficult process, sometimes involving lengthy consultations and inquiry.
There are three main strands to our overall energy strategy. First, we aim to maximise the benefit to the nation from our oil and gas supplies over as long a period as possible. We are now self-sufficient in oil in terms of net requirements, and this position should be maintained until the early 1990s. North Sea gas now meets all our gas requirements, with over 75 per cent. coming from United Kingdom fields. We are doing all we can to encourage continuing exploration and development of oil and gas resources.
The second element of our strategy is to encourage the appropriate and efficient use of fuels. An example of this is the Government's commitment to encourage industry to replace oil and gas-fired heating equipment with coal firing where that is economically attractive. In two successive March Budgets in another place we have initiated a scheme providing £50 million for grants of up to 25 per cent. of the costs of converting oil and gas-fired equipment to coal. I should like the House to note that, in Chapter 13 of the commission's study, this scheme is welcomed, because it should facilitate a gradual transition back towards coal-burning in industry at a pace which should enable environmental difficulties to be kept within acceptable limits. This second aim of our energy strategy means, more generally, promoting the economic pricing of energy, reflecting full costs, including environmental protection, and encouraging energy conservation. The House will, I am sure, appreciate that the cause of environmental protection is particularly well served in general, although not in all cases, by encouraging consumers not to waste energy but, rather, to get the maximum return from each unit of fuel supplied.
The third main strand of our energy strategy is to develop those resources needed to meet our longer-term energy requirements, in particular nuclear and coal, the immediate subject of today's debate. The proportion of electricity generated from nuclear power will increase to about 20 per cent. when the three new

713
advanced gas-cooled reactors are commissioned, probably later this year. And as the House will be aware, the Central Electricity Generating Board have made an application to construct a pressurised water reactor at Sizewell, which will be the subject of a full inquiry next year. In that connection, I was glad to hear the noble Lord, Lord Kearton, praise the safety record of our nuclear industry; I would be the first to agree with him.
Renewable sources will also have their part to play in meeting our future energy needs. On the basis of current knowledge, it has been estimated that a contribution up to some 30 million tonnes of coal equivalent per annum—that is, about 7 per cent. of our total energy requirements, might be possible from such sources by the early years of the next century. The realisation of this potential will depend on the success of research and development in reducing the costs of the technologies and on their rate of penetration into the market place. Research and development on new and renewable sources of energy is being funded by Government departments, public organisations, including the Central Electricity Generating Board, and by private sector companies. The Secretary of State for Energy is currently considering advice from the Advisory Council on Research and Development for Fuel and Power about departmental support for renewable research. The Southampton and Cambourn geothermal scheme and the large aerogenerator at Orkney are major development projects currently under way funded wholly or in part by my department.
Turning to coal, we have been generating about 80 per cent. of our electricity from coal, and the massive scale of our national coal resources is illustrated by the calculation that at the current level of usage our proven coal reserves will last 50 years or more. The ultimate level of recoverable resources is likely to prove to be several times longer, probably over 300 years. The Government therefore take the view that the coal industry could meet a significant portion of the nation's long-term energy needs, provided that it can produce coal efficiently and be in a position to sell the coal at competitive prices.
Over many years now the Government have supported large-scale investment in the National Coal Board to enable the board to develop a modern, efficient industry and to move progressively towards financial viability. We hope in particular that these investments will permit the board to compete effectively for the large potential for coal to reassert itself in industrial markets. Perhaps one of the most crucial findings of the commission's study—in Chapter 1, paragraph 19—is that this objective of developing a modern, highly productive coal industry, employing new technologies, would be beneficial in terms of environmental impact as well as economic efficiency.
In order to implement their energy strategy, the Government do not advocate central or indicative planning, but aim rather to create the conditions in which market forces can work to bring about their objectives. Perhaps the most important example of this approach is the economic pricing of energy, because it gives both suppliers and consumers correct signals about the true cost of fuels. The promotion of competition is also important as a spur to efficiency,
714
permitting consumers to make rational choices and obliging suppliers to contain their costs.
The report states, in Chapter 3—and quite correctly in our view—that energy strategy cannot be translated into a blueprint; nor, given the uncertainties that we face, can we produce precise forecasts or numerical prescriptions for the future. The Government, rather, keep a close watch on world and United Kingdom energy developments and carry out regular analyses of the ways in which energy demand and supplies may develop. The results of those analyses are made available to the public in the form of energy projections as part of the Government's contribution to the public debate on energy policies. The last set of projections was published at the end of 1979, and a new set will be produced later this year in good time for the Sizewell inquiry.
I hope that I have succeeded in explaining, at least in outline, the overall energy policy which provides the context within which today's debate, and indeed any discussions on energy and the environment, must be considered. We must of course take steps to protect our environment when we plan the development of our energy resources, but equally there is widespread recognition of the continuing importance of developing those resources in a competitive way. I hope that the need for a balance between these considerations will never be far from our minds throughout this debate.
3.34 p.m.
Baroness Birk: My Lords, I am slightly taken by surprise. I had rather hoped that the EEC Statement would intervene between the Minister's speech and my speech. At the very welcome initiative of the noble Lord, Lord Kearton, we have this afternoon the opportunity of discussing the report on Coal and the Environment. We very much welcome the opportunity to discuss what are the crucial issues of energy production and environmental conservation. I should like straight away to pay tribute to the work of the noble Lord, Lord Flowers, and his commission, for while they would appear to have produced a daunting and an extremely expensive report—though I do not think that the cost had anything to do with them—it is in fact eminently readable, and is a classic example of the value of such standing bodies as the Commission on Energy and the Environment.
I feel particularly concerned with this matter because, when I was a Minister at the Department of the Environment in the last Government, it was not only part of my role, but also my passionate hope and inclination, to try to build bridges between the national industries and the demands of the environment. I found that I received considerable sympathetic response in regard to the change in attitudes. It is difficult to discuss this subject without mentioning, if only very briefly, that we have seen changes in attitudes to our environment and towards what we like to feel is an improved quality of life in this country. That has related not only to mineral resources, but also to buildings and design—though we still suffer from a great deal of bad design—as well as getting over the terrible years of the bulldozer.
The problem posed to the commission was to find a balance between cheap energy and environmental

715
protection, and this is the crucial core of whatever we are discussing today. I would agree with the Joint Minerals and Reclamation Group, recently formed by the three local authority associations, in its description of the report as a well-balanced study". I would also very strongly endorse the group's view that it is "unfortunate and clearly regrettable" that the Government should have chosen to mark the publication of the report with a decision in effect to abolish the commission. The noble Lord, Lord Kearton, also drew attention to this very important point. The fact that the Government have used the rather felicitous phrase "in abeyance" does not make what they are doing any the more acceptable.
I do not know whether I missed something of what the noble Lord the Minister said. If I did, I am sorry and perhaps the noble Earl, Lord Avon, will refer to it when he replies to the debate; but I did not hear any explanation of why the commission was being wound up. It was set up only fairly recently and this was its first report. Frankly, I regard the decision as a gratuitious insult to the commission, and one which I find very difficult to understand. Are the Government suggesting that there are no other issues to do with energy and the environment which need detailed investigation? Are the Government also saying that sufficient information has been collected so that a national energy policy can be brought forward and debated in this House? The Government really must fully explain why they have stopped the work of the commission.
I should have thought that the quality and importance of the report alone emphasises the case for reactivating the commission. In paragraph 3.41 it is stated:
"We would see considerable merit in a major study evaluating the risks inherent in a supply orientated policy compared with a policy emphasising efficiency in energy use".
There we have a clear indication from the commission itself of the future work that it feels should be undertaken; and it seems to me to make extremely good sense and to be very important. Probably all of us taking part in the debate will want an answer to this point.
I consider that the commission was right (as the noble Lord, Lord Kearton, pointed out) to choose coal as its first major study, since the Royal Commission, in its sixth report, had already dealt with nuclear power. The noble Lord, Lord Flowers, was also the distinguished chairman of that commission, which produced an extraordinarily good and most original report. However, I wonder how the noble Lord the Minister feels about the fact that so many of the recommendations in that report have not yet been implemented and are still awaiting governmental word. Perhaps I should hastily add that all Governments are fairly slow in taking up the recommendations of commissions which they set up, but now there is quite a queue of recommendations, and it is about time that there was done something that is in the interests not only of the commission, but also of the country.
The coal industry, I believe, has been a well-organised and well-run industry, on the whole, and one which plays a vital role in the economic wellbeing of this country; and, of course, it is the base of the many other sources of energy which depend on coal. The
716
job of extracting coal now requires a highly skilled labour force, but one which must still face up to the inherent dangers of mining. The noble Lord, Lord Kearton, drew our attention to the fact that the rate of accidents has gone down, and also the rate of sickness, but, as he rightly said, it is still a highly hazardous industry.
It is a workforce which has experienced severe contractions since the war, and I think it is a workforce to which a tribute is due. It is also a workforce which has to live in the environment in which it works, which is something which is very often forgotten. Unfortunately, we do not need to travel very far in any of our coalfield areas to see the environmental impact that mining has had—and I stress again that miners themselves live in that environment. There is much environmental degradation and blight, which should not be allowed to continue and which most certainly should not be replicated elsewhere.
Much of the dereliction dates back to before nationalisation, and undoubtedly the National Coal Board has done a great deal to improve some of the older mining areas, where the industry is in severe decline. However, much more needs to be done. I welcome the emphasis on high environmental standards in the new coalfields, such as Selby, and the proposed coalfield in the Vale of Belvoir. Although on environmental grounds I think there was a great deal to be said for the decision, it was brought about in rather a curious way.
Unfortunately, the commission, in my view, seems to take the long-term view that the environmental problems of coal-producing areas will gradually be solved as new mines operating to higher standards replace the established mines, which, I am sure we all accept, operate to much lower standards. If this approach is adopted then the established areas will have to continue to accept lower standards for many decades ahead. I think this is really unacceptable from the point of view both of the country as a whole and, even more especially, of those people who are living and working in those areas. I would agree with the Joint Minerals and Reclamation Group that,
"equal priority must be given to existing as well as new mining areas and resources must be made available to enable the NCB and local authorities to improve standards".
Ultimately, of course, the crucial question is one of resources—resources to deal with the disposal of soil, resources to deal with landscaping, resources to deal with the transportation of material and all the other needs concerned with this problem. Ultimately, the principle must be that the polluter pays; but as the National Coal Board is in public ownership, then ultimately the community as a whole must pay so that the benefits it gains from the extraction of coal are not measured in the coalfields by the environmental, social and economic problems which have had to be borne by local communities. As there is a limit to the amount of costs that can be reflected in the increase in coal prices, it comes down once again to the point that the Government have to make funds available so that the real environmental work is done.
The report recommends that an independent regional development agency be set up to deal with derelict land. This is, in some ways, an attractive proposition, but local authorities feel very strongly that as long as

717
money is available they can deal adequately with, for instance, derelict land reclamation without the need to set up an ad hoc body. I rather incline to that view as there is no evidence that the machinery does not work, but there is evidence that it lacks financial fuel. If we take the Welsh Development Agency as a comparison, we have to remember that there is a difference between the two countries. There is also the fact—and this is very important—that whereas here we have two departments, energy and environment, concerned with the problems of energy and environment, in Wales they come under the one department of the Welsh Office. I think that makes a considerable difference. But, obviously, the Government, in conjunction with all the other interests, will have to think about how resources are distributed, and just what priorities should be pursued.
Having said that the grafting on of a further bureaucratic level would not seem to help matters, I think it is very important that if regionalism is introduced in England there should be a new look at this. This then becomes another ball game. But, again, the crucial factor is the financial framework. What is most important in this area, I think, is that there should be predictability and consistency; and it is quite wrong to say that areas like Toxteth, with their urban problems, should have to compete with coal mining areas in order to get grants for their improvement.
I should now like rapidly to move on, briefly, to some of the recommendations contained in this excellent report—and, happily, I shall not refer to all of them, certainly in detail. As I see it, the four main areas are the disposal of spoil, opencast coal, subsidence and transportation. Fortunately, the noble Lord, Lord Kearton, gave us a brilliant exposition on coal and the coal industry, so I shall be able to keep my remarks short.
On spoil, all of us are familiar with the typical spoil heaps associated with coal mining, but perhaps we are not always aware of the fact, or remember, that over the next 20 years as much spoil will be generated in some areas as was generated in the past 200 years. My Lords, 200 years, I would have thought, is a long enough period for the industry and for the state to have learned an environmentally and socially more acceptable way of disposing of spoil than simply dumping it on the land, thereby blighting the local environment and destroying thousands of acres of good agricultural land. The emphasis has for far too long been on maximising the production of coal, with little regard for the environmental consequences. I think it has to be said that the National Coal Board has come under relatively little pressure nationally to change the whole basis of its spoil disposal policy, and it has continued with a technology which belongs more to the 18th and 19th centuries rather than the late 20th century.
I was pleased to see that the Flowers Report has initiated some pressure on the Coal Board, and it is important that those concerned should keep the pressure up, both from within industry and within Government and as individuals and as pressure groups. Much more emphasis must be given to the retention of waste material underground and the return of other waste material to the underground workings. This, I am aware, is expensive financially, but it is also
718
cheaper in social costs, and we are always having to balance these two very difficult concepts. I accept that there are technical problems, but technical problems can evolve technical solutions if the will is there.
The Government must require the National Coal Board to perform far more effectively than it has done so far, but, again, it must make resources available. Obviously, spoil will still be brought to the surface and will be kept on the surface. Simply to dump that spoil in the collieries' back yard is about as environmentally acceptable as pouring household waste out of an upper window into the street below. Thank goodness! we have raised our domestic environmental standards: now we want to see industries raising theirs and ensuring, again with Government help, that spoil is taken to places where it can cause the fewest environmental problems and, through the reclamation of places such as the Bedfordshire brickfields, bring the maximum environmental benefits.
On opencast coal, some 15 million tons are produced each year, and, as the noble Lord, Lord Kearton, pointed out, it has a dramatic effect on a local environment for anything up to 12 years and more. It is undoubtedly highly profitable, and serves to subsidise some deep mining. But the report recommends a reduction in the amount of opencasting, and the local authority associations, with others, are also pressing for a phased reduction in production because of the environmental problems.
I think it is now more or less a question of general agreement (or it should be) that opencasting must not be carried on simply because it produces a handsome profit. That profit is made at the expense of areas such as Barnsley which have suffered long from the effects of mining. Where opencast is to take place, I would endorse the recommendation in the report that applications must be considered through the normal democratic planning machinery and not by the present procedures which involve consents being issued by the Secretary of State for Energy. The noble Lord who spoke on behalf of the Government was too modest when he said that he did not feel that he was senior enough to give us the Government's plans—and, in any case, he did not give any plans, although it was all put very elegantly and sounded good. But there were nothing of very much substance. I hope that the noble Lord who will speak for the Department of the Environment when he winds up will express his agreement with some of the points I am making on the environmental side and particularly on the question of using the planning mechanism.
On subsidence, the Joint Minerals and Reclamation Group has called for a more searching review of the procedures. I would endorse that and I believe that the report provides the basis for such a review. Living with the effects of subsidence is something which I think most of us would find difficult to appreciate because when things go bump in the night in places like South Yorkshire or West Yorkshire they can herald sudden and disturbing structural damage to people's homes. The only brief point I would make on transport is the obvious one, that once coal is mined it must be transported. The majority form of transport is by rail or by canal.
The report recommends that, wherever possible, rail should be the chosen means of transport. British

719
Rail have themselves a crucial role to play in this. They have introduced efficient merry-go-round trains for bulk loads travelling on a regular basis. Some concern has been expressed that they are not always perhaps willing or able to transport small loads on a less regular basis. Here we come to the problem from which British Rail themselves suffer as they are highly under-funded and all those things connect together.
In the final analysis we should not lose sight of the balance between the environment and industry and also our responsibility to the miners and to the environment in which they live. I know that the NCB is moving away from the old-fashioned colliery villages and towns and increasingly miners are living in housing estates not dominated by one industry, and the old tied cottage concept is gradually fading away. That must be an improvement which has been paralleled by improvements in pit safety and working conditions. All who live in mining areas, whether employed in the industry or not, deserve a decent quality of life. Between them, local government and the NCB have the ability to improve the environment—and now they need the resources.
The Flowers Committee Report, I would say, has given us a sound basis on which to move forward. Now we must await the Government's response, which I hope will not be long in coming. I was not very encouraged by what the Minister said about getting in the replies because interested bodies were given three months to consider and to respond, and five more months have elapsed since the deadline. We should like to hear from the noble Earl when we can expect to have a definitive and detailed response from the Government, because I do not think that the reply we have had so far has been good enough. When shall we receive a public response from the organisation most directly affected, the National Coal Board?
I would turn to Recommendation No. 22·77 in the report, which concludes that the board has a responsibility to ensure that the best environmental practices available are introduced as appropriate in the day-to-day management of the operation and also that this responsibility be assigned at the appropriate senior level in the board. My last word on this is that, even if the report takes some time to be implemented, as I fear it will, I believe that the commission, by its very work, by the inquiries it held, by the questioning it did, by the journeys and visits it made, has already made a positive impact both on the industry and, I hope, on those most closely concerned with our environment.

EEC: Council of Agriculture Ministers—Price Fixing
3.55 p.m.
Earl Ferrers: My Lords, with your Lordships' permission, I should like to repeat a Statement which is being made by my right honourable friend the Minister of State for Agriculture in another place. The Statement is as follows:
"Together with my right honourable friend the Minister of State"—
720
I should point that that is not me, but Mr. Buchanan-Smith—
"I attended a meeting of the Agriculture Council which met in Brussels on 17th and 18thMay.
"Since January at eight meetings of the Council of Agriculture Ministers we have been negotiating this year's price fixing arrangements. During these meetings member states had by negotiation obtained unanimity on many of the questions involved. Britain had retained specific reserves on a number of agricultural issues and a general reserve on the entire package. The purpose of the general reserve was to ensure that the position adopted at last November's European Council meeting in London by all member states in considering the 30th May Mandate that the budget and agricultural matters should be dealt with in parallel should be complied with.
"We therefore expected that at the meeting this week we would continue to negotiate on those remaining questions where unanimity had not been obtained. If by the time of the completion of our meeting there was no agreement upon the budget measures we would retain our general reserve.
"Together with Denmark and Greece we strongly protested when the Presidency, encouraged by the Commission, announced that for the first time since 1966 the principle of obtaining unanimity where a very important national interest had been invoked and explained was to be violated and that a decision was to be taken in accordance with the Treaty arrangements for majority voting.
"I made a firm statement to the Council contesting the procedure and declaring that the Council had violated an accepted convention under which all previous price fixings had been adopted. I stated that the Government considered that, as important national interests were involved, in accordance with the established practice of the Community discussions should have continued in this Council until a unanimous agreement had been reached. I pointed out that the decisions that were being taken would place a further financial burden on the United Kingdom, that there was clearly a direct and organic link between the price-fixing decision and the budget negotiations and that this link had been recognised by all member states in their agreement that the three Chapters of the 30th May Mandate should proceed in parallel. I placed on record that I considered the conduct of the Presidency of the Commission and the member states who had joined in this procedure had created a very sad and damaging day in the Community's history and that the Council had quite unjustifiably chosen to depart from the established working practices based on the agreement reached in 1966.
"A majority decision was therefore taken on all of the regulations in accordance with what had been negotiated and agreed on by 9 member states in the meetings prior to this week's Council. Under the Treaty, these regulations become Community law with effect from tomorrow.
"Had the normal process of negotiating continued and had not the presidency, the Commission and seven member states violated the normal traditions, we would have endeavoured to obtain some further improvements in the clawback arrangements on

721
lamb, an even larger reduction in the co-responsibility levy, while at the same time reducing the price increase for milk. We would have sought lower price increases in a number of cereals and in the prices of a range of Mediterranean products.
"Many of the regulations were of course in accordance with the package that had emerged from the negotiations that had taken place in previous meetings of the Council. In those previous meetings the United Kingdom had achieved a number of important objectives to the benefit of consumers and producers, and these will now be implemented.
"We successfully resisted pressures from the Commission and all other member states to revalue the green pound.
"We obtained a half per cent. reduction in the milk co-responsibility levy which will be worth around £10 million to United Kingdom producers in 1982–83.
"The Commission were made to withdraw their proposal for a progressive co-responsibility levy which would have been damaging to the interests of our industry.
"Improvements were made in the provisions and aid for school milk. The Community subsidy was increased and this should lead to an increased up-take by local authorities.
"We succeeded in obtaining an increase of two-thirds in the maximum beef premium payments and an increase in the Community contribution from the 25 per cent. negotiated by our predecessors to 40 per cent.
"We obtained a firm Commission declaration ensuring that the sale of wine distillates will not threaten the alcohol industry in this country.
"We resisted the Commission proposals for a large reduction in the United Kingdom butter subsidy, and the subsidy will continue at around 13 pence per pound.
"The result of the total package that has now been agreed on farm support prices in the United Kingdom is an increase of 10·2 per cent. The effect of this on the retail price index over a full year will be a quarter of 1 per cent. and on the food price index over a full year 1¼ per cent.
"The consumer benefit of the beef premium scheme, sheepmeat regime and the continuation of the butter subsidy will be worth some hundreds of millions of pounds, depending on the market situation.
"The Commission estimate that the settlement increases the budgetary cost of the common agricultural policy by around 1,500 million ECUs or over £900 million in a full year. They also calculate that the increase is well within that of the Community's own resources. We estimate that the extra budgetary cost to the United Kingdom is about £120 million in a full year. This emphasises the importance of agreement on the adjustment of our budgetary contribution, which member states had previously agreed should be decided in parallel with the agricultural decisions.
"Separately from the price-fixing, the Commission announced that a satisfactory solution had been reached to the problem of Dutch horticultural gas
722
prices, which should be of benefit to United Kingdom producers.
"It is wrong that for the first in time 16 years a number of member states should have changed the rules of procedure to suit their immediate requirements and it must be noted that three of the four member states that have joined the Community strongly protested at the violation of the normal procedures that took place yesterday, for they had joined the Community in the knowledge that these were the procedures of the Community.
"The Government will be urgently considering the implications of what was done yesterday, and what action it will take."
My Lords, that concludes the Statement.
4.5 p.m.
Lord Peart: My Lords, I wish to thank the Minister of State for his Statement. This is a very important Statement affecting one of our most important industries. As a former agriculture Minister, I can appreciate what has happened in the Community and I hope that we will somehow have an improvement despite all the difficulties.
Will the Government consider a debate in due course? When shall we be told what action the Government propose to take in response to what is contained in the Statement? When are they going to announce this The Statement says that some of the regulations will be implemented immediately. Will the Minister state which regulations will not be implemented?
Can the Minister also say what implications this has for the common fisheries policy? Will a majority decision apply to that also? What are the wider implications? Will the Government not agree that our entry into the EEC was based on the veto principle? Does this not bring our position in the Community into question? I hope that I can have satisfactory answers on that matter.
4.7 p.m.
Lord Mackie of Benshie: My Lords, I too should like to thank the Minister for repeating the Statement. It is important and I should like to congratulate his right honourable friend on what he has achieved. The 10·2 per cent. rise in farm prices I can assure the House—and I am declaring an interest—is very much needed by the farming community all over the Community. This is evidenced, as it has been many times, by the enormous amount of money that the industry owes to the banks. This continues to rise. This is probably the best evidence that they are not—as people usually say of farmers—howling for the moon. So the 10·2 per cent.—which is much less than the 14 per cent. voted for by the Conservative Members of the European Parliament—is from his right honourable friend's point of view very satisfactory. It is going over the points.
It is absolutely first class that the right honourable gentleman has resisted pressure to revalue the green pound. This would have been grossly unfair. The reduction in the milk responsibility payment is excellent from our point of view, although it is not a satisfactory levy. The increase in the beef premium and the

723
increase in the Community contribution is really a startling achievement. This is against Community practice. Their practice has always been to raise the money from the Market through support buying. To give way to us in this shows a willingness to see the British traditional position.
I could go on and refer to the butter subsidy. The total package is all very good for this country and for the consumer. The rise of a quarter per cent. in the whole index and one and a quarter in the food index is very satisfactory in these times of inflation.
In face of this, our attitude in the Community is most disturbing. I look forward to hearing from the Minister what the Government think they are going to do about it. In the face of the obvious concessions made by our European partners, it appears that our insistence on the practice—and it is not a principle, it is only a practice—of unanimous decision must have been very sorely trying to our partners in the Community.
I hope that when the Government are considering what they should do, they might consider stopping trying to bully our partners in the EEC and to think more in the way that our partners think and the concessions that they have given. I should be very pleased if the Minister would tell me whether we were offered a decent one-year concession on the amount of money we pay. I agree that this is important. It is more important that we remain as good members of the Community and do not get the reputation for being awkward, entirely selfish and non-communantaire.
Earl Ferrers: My Lords, I thought I was going to thank both noble Lords for their replies. I will thank the noble Lord, Lord Peart, for his reply and I will thank the noble Lord, Lord Mackie, for part of his reply but will maintain reservations about the latter part of his comments on the Statement. The noble Lord, Lord Peart, was quite correct when he said that this was a serious Statement—so it is. It does contain a lot of problems which have not heretofore arisen in the Community. That I readily acknowledge. He also asked whether the Government would arrange for a debate to be held on this matter. That is a matter which can be considered through the usual channels.
The noble Lord also asked when the Government would announce a decision on what action they were going to take. I am sure he will understand that I cannot give an immediate answer to that because this happened only yesterday, and the question of what action should be taken is now under consideration—not just for the United Kingdom but for the benefit of the Community as a whole, of which we are full and determined members. The noble Lord asked when these regulations come into force. They come into force tomorrow; that is, midnight tonight is the starting point.
He also expressed anxiety over the fact that when we joined the Community we joined it on the principle that we had the right of veto. That is perfectly true and we have always accepted that. Indeed, that is the understanding on which other member states also joined. I refer to Denmark, Greece and Ireland, although of course Ireland voted for this package. It is not without interest to note that when Denmark had
724
a referendum on joining the European Community it was one of the nub points that they would have the right of veto. It was also a nub point when the United Kingdom joined the Community.
It is quite clear that the principle of the veto no longer exists. It is also curious—and I am bound to say this—that having voted this through the Council of Ministers yesterday, both France and Italy then said that the Luxembourg compromise had not been undermined. It is absurd for countries to try to stick to the rules when it suits them and to change them when it does not. This is a matter of very considerable concern and when the noble Lord, Lord Mackie, said that this settlement was good for the United Kingdom, I agree with him. Many parts were agreed and they were agreed by negotiation; they referred to things which would have been, and are, of benefit to the United Kingdom. But there were certain matters which we wanted to see improved and there are certain matters, as the noble Lord well knows, which cannot be considered out of context with the budget problem. It was part of the mandate agreement which was agreed by all member states on 30th May that, regarding the common agricultural policy, the budget decisions there and the budget decisions of the Community should be negotiated in parallel. That was the understanding of all member states and that is what has now gone by the board.
When the noble Lord says that we must really stop bullying our partners in the Community, I would only remind him of this—that we are there as full members and we want to play our full part in negotiations. We do not anticipate, and neither do other members of the Community, having regulations forced upon us which deeply affect national interests and in regard to which we have always previously understood the position to be that those were negotiable. It is the fact that these are not now negotiable and have been forced upon us, which is a matter of concern—and that is not bullying by the United Kingdom.
Lord Peart: My Lords, I mentioned the fisheries policy. The Minister has not referred to that.
Earl Ferrers: My Lords, the noble Lord is quite right. There will be a fisheries meeting in due course and we shall have to await the outcome of that.
Lord Kennet: My Lords, is the noble Minister aware that we on this Bench are in sympathy with all that he has said? The destruction of the Luxembourg compromise can only be a sad day for the Community. Are we not right in thinking that it does mean that the nightmare of many of those who strongly favoured British membership of the Community has now come to pass? Law is being made in this country against the will of the British Parliament. Is this not a great gift of ammunition to those who opposed British membership and therefore is not this a most unfortunate development?
Is the noble Earl further aware that, despite our sympathy with all that he has said, there remain other things to be said? Has it been wise all this time to concentrate so exclusively on obtaining little budget refunds and tinkering with the price of this or that agricultural commodity rather than going in an

725
imaginative way for a complete reform of the CAP? Where is the Government's imaginative vision of a new CAP which will not operate against us? We would hope to be able to debate this and would call, with the noble Lord the Leader of the Labour Opposition, for an early debate.
Earl Ferrers: My Lords, I think that the noble Lord, Lord Kennet, is perfectly correct in saying that this is, as he put it, one of the nightmares of some people who felt that there might be laws passed of which the United Kingdom disapproved. This has in fact happened, and it is a matter of considerable concern. I think it is right to point out that the Luxembourg accords represent a political agreement and are not part of the treaty itself. Despite the differences between member states about the interpretation of the accords, it has been the invariable practice for the member states which invoke the agreement to decide whether their important national interests were at stake.
What happened in the Agricultural Council is clearly at variance with the established procedures of the Community and it raises very serious questions which we are now considering. The issue will be discussed at next week's meeting of the Foreign Ministers' Council. It is clearly more important than ever that a decision on the budget problem should be taken next week if we are to avoid an even more serious crisis in the Community. We have made clear that we are ready to decide now on a third year refund, as provided for in 30th May agreement, while discussions are completed by the end of the year on a longer-term arrangement. Our views regarding the application of the provisions of 30th May agreement for a third year have been made known to our partners.
Earl Alexander of Tunis: My Lords, would not my noble friend agree that this is a positive and encouraging Statement, in contrast to what has appeared in the press recently?
Earl Ferrers: My Lords, I agree with my noble friend that there are many aspects of this Statement which are extremely encouraging and highly beneficial to agriculture. The package will provide an extra £340 million of additional receipts to British agriculture, and there are many benefits to consumers as well with regard to school milk, the butter subsidy and the fact that the co-responsibility levy has been reduced. There are many benefits, and these have been slightly over-shadowed by the action that was taken yesterday.
Lord Gladwyn: My Lords, would not the Government perhaps agree that, with hindsight, their recent policy in the Agricultural Council has been really misconceived? Not only for the reasons advanced by my noble friend but also for the fact that linking it so tightly with our subscription to the budget and holding up the whole process of agricultural policy for so long—apparently indefinitely—not unnaturally infuriated most of our colleagues, and that at the moment when their help was obviously desirable in connection with the Falklands crisis. Furthermore, despite what my noble friend speaking from the SDP Bench said, would he not further agree, on reflection, that the gradual abandonment of the famous Luxembourg compromise, far from damaging our long-term interests, is really the only way
726
to make the Community work, and therefore to avoid our all relapsing into protection and self-sufficiency and into the establishment in Western Europe of a series of directed economies, which can only be to the benefit of the Soviet Union?
Earl Ferrers: My Lords, the noble Lord, Lord Gladwyn, asked me to say whether, in retrospect, I think that Her Majesty's Government's policy had been misconceived and that we were being too obdurate over the price fixing. I would only remind him of the debates which we have in this House, in which his noble friend and noble Lords opposite frequently take part, in which they criticise the common agricultural policy because of its high costs, because of its increasing costs and because of its increasing surpluses, and they ask what the Government are going to do to reduce these. We have consistently said to the Community that there must be restraints on these. We have consistently said that we must not increase absurdly the prices of those commodities which are already in structural surplus. That is what we have done, and I see the noble Lord, Lord Sainsbury, who has invariably advocated that. With respect, that is not being difficult. It is trying to get a fundamental concession and review of the common agricultural policy. It is no use pretending that there is no connection between that and the budget, because our contribution to the budget is a very substantial one and, as a result of this agreement, it is now going to go up by £120 million.
Lord Stewart of Fulham: My Lords, is the noble Earl the Minister aware that there are a number of us who believe that a shift from the principle of unanimity to the principle of majority voting is in the long-term interest of all Europe, but also that, if, as he suggested at one stage, what is going to happen is that each nation is to rely now on unanimity and now on majority voting, as happens to suit its interests at the time, that creates an impossible position and the Government must do their best to prevent that result?
Earl Ferrers: My Lords, I could not agree more with the noble Lord, Lord Stewart, in the latter part of his remarks. Of course, it is absurd if member states are going to use one set of rules when it suits them, and another set of rules when it does not suit them. We have to try to get unanimity. It always was the practice that there was unanimity and that these arrangements came about by agreement. I think that the noble Lord, Lord Stewart, would find that it would appeal very much more to the people of this country, and indeed to the people of the Community, if they felt that arrangements were arrived at by unanimity, rather than by diktat by other member countries over which they had no right of veto.
Lord Morris: My Lords, may I ask my noble friend whether, at any time, there has been any attempt by any partner of the United Kingdom within the European Economic Community to link some of their support in our problems in the South-West Atlantic with the discussions on the agricultural pricing policy and the negotiations on the budget?
Earl Ferrers: My Lords, to the best of my knowledge and belief, at no time has there been any con-

727
sideration by any other member state that the problem in the South Atlantic should have any bearing on these arrangements which they were discussing about price fixing.
Lord Molloy: My Lords, is the noble Earl aware that the firm, bold and courageous Statement made by his right honourable friend in another place is to be welcomed, and that lots of people will be asking how long it will be before this kind of thing is done again? Many folk will also be terribly worried if the Government do not act and at least take this opportunity of telling the House quite clearly that they are certainly not going to adopt the genuflecting posture of the Liberal Front Bench in this House, but will take this issue in a very serious way and tell the Community that they have done this once, but they will not get away with it again unless there is proper consultation about the rules, because that is the only way in which they will be indulged.
Earl Ferrers: My Lords, I always knew that the views of the noble Lord, Lord Molloy, were fairly different from our views, but I am glad that he has equally distanced himself from the views of the Liberal Party. He asks when this will happen again. I cannot answer that question. All I can tell him is that it has not happened for 16 years, and that is why we never expected it to happen this time. But I would add that we are members of the Community and we want to see it succeed. Inevitably, in the process of growing and evolving there will be difficulties and substantial problems. When one comes up against a difficulty such as we have now come up against, we should not regard that as the ending of all the previous relationships which we have had. We have to get over these problems and make sure that they do not happen again.
Lord Mackie of Benshie: My Lords, has the noble Earl heard about the lady who was watching a troop of Boy Scouts going past and said "It's extraordinary. They're all out of step but my Johnnie"?
Earl Ferrers: My Lords, I know many stories, but I did not know that one.

Coal and the Environment
Debate resumed.
4.25 p.m.
Lord Flowers: My Lords, in rising to continue the debate on coal and the environment, I must first express my profound gratitude to the noble Lord, Lord Kearton, for arranging this debate, and for the comprehensive and kind way in which he has spoken about my report. He has made my task much easier. I must also thank the noble Lord, Lord Skelmersdale, and the noble Baroness, Lady Birk, for their encouraging remarks. May I also express my regret that the noble Lord, Lord Tanlaw, has had to withdraw from this debate due to illness? In his absence, I have been asked to associate the Liberal Party with what I have
728
to say. I hope that they will find what I say broadly acceptable.
I am not sure whether it is quite the done thing to speak in this House about one's own report. I do so, of course, as your Lordships have heard, in a state of abeyance. But at least I have a chance to thank all those who have worked with me for the best part of three years—the members of the commission and of the secretariat and the many witnesses. If we have made a useful contribution, it is because we tried to establish a consensus—an unpopular word these days, I know—about how to formulate energy policies, so as to be broadly acceptable among all the many interests involved.
Our first conclusion, given in Chapter 3, was that, having allowed for all other ways of meeting energy demand, and however optimistic one can be about nuclear power, there was likely to be until the end of this century, and for some time thereafter, a continuing annual consumption of coal in this country in the range 110 million to 170 million tonnes. It is about 125 million tonnes at present. We assumed that most of this coal could, and would, continue to be produced by the National Coal Board, allowing a desirable margin for imports and exports. We asked ourselves whether this could be done and, if so, without unacceptable damage to the environment. Our answer was in two parts: coal production and coal use.
Regarding coal production, our main conclusion was that the programme of modernisation was essential. Only in that way could the interests of the taxpayer and the energy consumer, on the one hand, and the long-term stability of the industry and better pay for its work force, on the other, be reconciled.
"These two sets of interests",
we wrote in paragraph 3.43,
"cannot be reconciled by policies which lead the NCB to produce the last possible tonne from obsolescent, high-cost capacity".
We understood, of course, the serious impact which pit closures have upon a tight-knit mining community, such as one traditionally associates with the Welsh valleys, near which I myself grew up. I, too, wish to acknowledge the admiration for the miners of this country, for their courage and forbearance in many matters. But the new mining communities are different. At Selby, for instance, miners and their families are intermixed with agricultural and other workers over a wide area. One should not assume that the agonies associated with pit closures will continue for ever.
We found, moreover, that there was no necessary conflict between economic and environmental considerations. Despite very real difficulties associated with the control of subsidence and with spoil disposal—to which we devoted a chapter apiece—low-cost, high productivity mines now introduced or planned are designed to high environmental standards. As the new capacity comes into operation, the NCB will be able to phase out obsolete mines, especially in areas whose decline is associated with the worst environmental legacy of the past. They will also then be able to afford to improve the state of the continuing capacity.
The legacy of the past gave us great concern because it is responsible for the image of the coal industry

729
that most people have. A modern deep mine, well managed, need be no more obtrusive than any other heavy engineering operation employing a few thousand workers. But it has not always been so, and it is not always so today, as a visit to West Yorkshire would at once confirm. So long as there remain great tracts of neglected and derelict town and country, dominated by rusting pithead workings, by the bitter heritage of uncontrolled subsidence and scrofulous soil heaps, people must be forgiven for believing—incorrectly to be sure—that this is what a flourishing coal industry exists to perpetuate and proliferate.
Many of our recommendations were concerned with clearing up the legacy of the past, but I will mention only one. Noting what had been achieved by the Welsh and Scottish Development Agencies, who successfully mount modern enterprises upon formerly derelict mining land, we recommended in paragraph 22.62 a similar development agency, as the noble Baroness has mentioned, for the Yorkshire coalfield where so much industrial activity has taken place, and is taking place. I should like to ask the Minister what the Government's attitude is to this proposal. The problem is a real one—for the NCB, for the local authorities and for local people. I hope that the ritualistic dislike of quangos will not become a substitute for action.
As the noble Lord, Lord Kearton, has said, spoil disposal is one of the main problems of coal production. The huge tips which he spoke about will be well designed and well restored, especially if our recommendations are followed. But there remains the problem of scale. Particularly in highly worked areas like West Yorkshire we were not sure that there would be enough suitable sites. We recommended in paragraph 22.57 that the Department of the Environment should promote arrangements for spoil disposal similar to those which apply to aggregates. I hope the Minister will again be able to give some indication of the Government's response.
In the long run, however, I believe that much more effort must be devoted to modifying the modern long-wall process—and it is a modern process—whereby the roof collapses behind the cut seam and the spoil can then only be disposed of on the surface. Backstowage underground was once the practice, but it is now out of fashion. The reasons are perfectly sound. Longwall methods are high in productivity and constitute a relatively low health and safety hazard. A return to backstowage would certainly be technically very difficult but it is environmentally desirable. It might be economically desirable, too, because of the loss in value of agricultural land resulting from insufficient land drainage when the inevitable subsidence has taken place. It is therefore one of our recommendations that long-term research should be undertaken into new forms of backstowage which would be acceptable both economically and in terms of the health and safety of the workforce. It would be very long term work.
In spite of detailed criticisms, we were not at all condemnatory of the coal mining industry. Indeed, we were encouraged by the evidence. In the particular case of opencast mining, however, we came to the firm conclusion that the pendulum had swung too
730
far against the environment. It is an obtrusive technique to practise in such a densely populated country, full of sensitive landscapes, farmlands and homesteads. The difficulty is essentially economic. The NCB makes up its losses in unprofitable deep mines by its profitable opencast operations. In 1980–81, it made a profit of £157 million on 15 million tonnes of opencast coal, against a loss of £135 million on 110 million tonnes of deep-mined coal. The losses on deep-mined coal arise from the unprofitable old pits that we recommended should be phased out—as, indeed, they are being. As deep mining thereby becomes more efficient, we recommended in paragraph 22.73 that the annual volume of opencast coal should be allowed to decline somewhat. Can the Minister tell us whether the Government were convinced by our arguments on that point?
Before I leave coal production I must make one remark about the question of reserves. It proved to be a difficult matter to discuss, not helped at times by the somewhat naïve pronouncements of the NCB. According to the accepted definitions, there is every reason to suppose that the board can continue to declare, as far ahead as one can see, that there are 50 years of operating reserves at the present level of output. But it depends on the definitions: if the definitions in future are to depend upon the environmental consequences of eventual extraction, there may be greater uncertainties.
We did not discuss the proposed development at the Vale of Belvoir because it was simultaneously being considered at a public inquiry. We did, however, note in paragraph 6.24 that the visual impact at Belvoir would be significantly different from that at Selby, essentially because the geology of the two coalfields is so different. Selby is almost spoil free. Belvoir is not. If one development can go ahead but the other not, it follows that a new environmental criterion will have to enter the estimation of the NCB's operating reserves.
I confess that I was myself surprised by the Secretary of State's refusal to allow the Belvoir development to take place as planned. If the proposals were made in accordance with our recommendations—and I have no reason to suppose they were not—I find it hard to believe that the Secretary of State could have discovered in our report any substantial grounds for rejecting the board's submission. Perhaps the Minister will enlighten me about the role our report may have played in the thinking of the Secretary of State on this matter, and whether he was aware of the implication of his decision for future estimates of the operating reserves.
So much for production. Coal is used in power stations, for other industrial purposes and in domestic heating. In the future it may be used for synthetic fuels also, if the economics allow. In our report we pay a lot of attention to combustion technology in these different uses and to the means available to control the associated pollution—principally smoke, sulphur dioxide and, of course, ash. Smoke is really no longer a problem with power stations because they use electrostatic separators with an efficiency of something like 99.5 per cent., combined with hugh stacks to disperse the essentially gaseous residue. Low level emissions in towns are nowadays much reduced but in any case can be controlled by the introduction of further smoke control zones, if they are needed. We indicated where

731
the black spots might be. Ash disposal, as with spoil, is mainly a matter of site availability.
Sulphur dioxide is not so much of a health problem as it was once imagined to be, unless it is associated with smoke, and even then it is dangerous mostly to cigarette smokers who, quite literally, have the remedy in their own hands. The mandatory limits for smoke and sulphur dioxide set out in the EEC Air Quality Directive provide an adequate standard for the protection of human health. That being so, we also considered that they were adequate as regards local crops and vegetation and the protection of materials against corrosion.
There remains the vexed problem of acid rain. Sulphur dioxide, swept high into the atmosphere and carried across the North Sea, falls as acidified rain on to land which in certain parts of Scandinavia is already acid in character. Some of it also reaches the ground by dry deposition, but I will not go into that. The results are harmful to fish and to crops. How much of the damage results from acid rain and how much from the acidity already present is still hotly contested. It may be that adding lime to the appropriate watersheds would be a sufficient solution, although this too may have its side effects. The matter is being intensively researched under a convention of the Economic Commission for Europe. If acid rain should turn out to be the major culprit—originating in parts of the Continent, such as the Ruhr, as well as in the United Kingdom—and if it has to be arrested at source, the solution is likely to be very expensive, adding perhaps 10 per cent. to 20 per cent. to the cost of a unit of electricity. Someone has said that flue gas desulphurisation is the billion dollar solution to a million dollar problem. We did not think that enough was yet known to justify such expenditure at present, although we hedged our bets by saying that desulphurisation research should certainly continue.
Perhaps I should say a word about siting requirements for major energy projects. The problem arose, in our thinking, with synthetic natural gas for which a full-scale commercial plant would resemble a 2,000-megawatt coal-fired power station in terms of coal consumption, land take, water requirements, air pollution and ash production. There will be a need for sites of this kind not only for SNG plants and for coal-fired generating stations, but for other large-scale, energy-intensive industrial enterprises. We were not sure that there would be enough sites to satisfy the total need. I would like to ask the Minister whether he agrees with our recommendation (given in paragraph 22.128)—we considered it an important one—that the Department of the Environment, together with the energy industries and the local authorities, should undertake a joint review of potential sites of this kind, initially in Yorkshire and the East Midlands.
Finally, we devoted a chapter to the planning process whereby, under the town and country planning system, one tries to reach an accommodation between the principal interests involved in any major development. The noble Lord, Lord Skelmersdale, and the noble Baroness, Lady Birk, both emphasised that the concepts of balance and of the interaction between energy policy and the environment were throughout fundamental to the way we approached our task. But how that balance
732
is perceived is a matter of opinion—the opinion of ordinary people as well as of experts. Ordinary people are no longer content that Ministers and their advisers should have a monopoly of judgment of the public good. They want nowadays to participate in the decision-making process, and the means by which they do so, under the law, is the town and country planning system. We therefore made a number of proposals for streamlining that system. I will not go into detail; suffice it to say that we assumed the public would have to be better informed of likely developments than they generally are at present, starting from the top. It is first of all necessary that the Government should itself make clear at regular intervals how it views the energy scene—what are the requirements and how might they be met.
It is, of course, a scene that changes with time: with the state of the economy, with external events, with technological innovations, and so on. This, we believed, could nevertheless be made generally comprehensible and would greatly ease the problems of getting any particular development or project into proper public perspective. I would like to know whether the Government agree that this should be done. Secondly, we thought it important to have some idea of site availability—whether it is a power station, a colliery, a spoil heap, or an SNG plant—well ahead of time, so that there can be an element of choice. It really is not good enough to research only one site and then to claim too late that there is no alternative.
Thirdly, we thought that consultation with local interests should be progressive, beginning early at an exploratory level, becoming gradually more comprehensive as and when the project moves forward. Many of the tensions which are encountered at public local inquiries, often the culmination of the planning process, would be eased by more effective dialogue between the relevant interests during the early preparatory stages of planning. The British town and country planning system is astonishingly versatile when properly used—hence, incidentally, much of the objection to the formal continental and American processes of environmental impact assessment.
My Lords, I have spoken for too long. I hope that the report we are debating today may help to put the future of the coal industry into better perspective. I hope that its 70-odd recommendations, if adopted, will create better conditions, a better public image and smoother planning. The challenge is there—to the industry, to the workforce, to the customer; but only a modernised industry can meet that challenge. In that way, coal can continue to play its full part in the economy, and in that way it can do so without unacceptable damage to the environment.
4.46 p.m.
The Earl of Lauderdale: My Lords, your Lordships are all greatly in debt both to the noble Lord, Lord Kearton, for opening this debate, and to the noble Lord, Lord Flowers, for the report which we are now debating. Somehow, I do not think of the noble Lord, Lord Flowers, as "quango Man" or homo quangus—much more, homo sapientissimus. Certainly I have found study of his report rewarding but also, I must say, most demanding. Before I go any further, I must crave your Lordships' indulgence for the fact that a

733
long time ago I was committed to an engagement this evening which causes me to leave here at 5.45 p.m. Therefore, it is likely that I cannot be here for the conclusion of the debate and I apologise in advance to your Lordships and to my noble friend on the Front Bench who will be winding up.
This debate occurs in the wake of the Vale of Belvoir decision. Perhaps it is worth recalling the reasons which were given in the other place by the Secretary of State for the Environment for his decision. In Hansard for 25th March 1982 (cols. 1096–1097) we read:
"Permission should be refused for the proposed spoil tips at Hose and Saltby".
The Secretary of State went on:
"Other methods of spoil disposal should be further examined".
He concluded:
"Had there been acceptable proposals for spoil disposal, I would have been minded to grant planning permission for mines at Asfordby and Saltby".
Environment is, of course, the new religion and like many contemporary cults it is open to serious challenge. Environmental change is itself as old as geology—not so, however, environmental fashion. Environmental aesthetics are ever variable and ever volatile, and they are never predictable. There have been moments when the environmentalists have protested against the growth and, alternatively, the removal of hedgerows; of shelter belts; and even more recently of afforestration—let alone the almost paranoiac hysteria which developed a few years ago about the Brent geese being driven away from Maplin Sands as if there was no other place for the poor dear geese to alight and feed.
Either the landscape is to be kept static or we deny the energy needs of an industrial society while simultaneously wanting its comforts and its so-called improved quality of life. I was brought up on a nursery belief that one cannot have one's cake and eat it. It is inevitable that there will be an environmental on-cost which society must be ready to pay if it wants to have the energy that makes life more comfortable and more agreeable in an industrial world. This report focuses primarily on the problems which are going to arise in Yorkshire and the Midlands. The need is spelt out quite clearly. It is to cater for up to 60 million tonnes of spoil disposal a year which, if tipped, would require up to 500 acres a year.
I find paragraphs 9.31 to 9.33 not as sanguine as I personally could have hoped about the possibility of moving pulverised spoil for land reclamation of coastal sites, although at paragraph 9.33 there is the assurance:
"There is limited scope for using spoil for remote land reclamation. It should not be ruled out entirely and should be considered very seriously".
I should have thought, to the contrary, that there was abundant scope for this, both on the coasts, like Lancashire, where the sea is receding, and on the coasts, like Yorkshire, where it is in fact eating the coastline away. We are not an under-populated island: if anything we are over-populated. For many years we have been proud that we grow as much food as we do for our own people, but we should surely be prouder still if we grew more. Areas that strike one as having a relatively shallow shore and seeming to invite reclamation would include the Firths of Tay, Forth and Solway,
734
Morecambe Bay, especially the Lancaster Sands, the Lancashire coast—all of it—Carmarthen Bay, the Lincolnshire coast, the Wash, Northern Norfolk, Maplin and the Kentish Flats.
But what about feasibility? There are more than 1,000 pipe-lines existing in the United Kingdom at the present time, legitimised by the Pipe-Lines Act 1962. Not only do they carry industrial gases, oil and petrochemicals, but they also carry cement, clay and coal. But whereas pipe-lining accounts for some 24 per cent. of freight movement in the United States and 17.6 per cent. in France, it accounts for less than 5 per cent. in Britain. Those are figures taken from the Transport and Road Research Laboratory in 1980. There have been many technical studies made, and one or two that have been brought to my attention are perhaps worth identifying. The Financial Times on 6th June 1973 quoted studies by the British Hydromechanics Research Association at Cranfield for a twin three foot pipe over a distance of 200 miles moving 10 million tonnes per annum of material at about £40 million. If one transposes those calculations to the sort of things we are talking about in Britain, which is a distance of, say, 60–70 miles to the coast, and you have 60 million tonnes a year to move, you get something like £60 million.
Three years later the Engineer, a serious publication in the field of mechanical handling, described on 29th April 1976, a comparison of costs for moving 1 million tonnes a year of aggregate over a distance of some 6;i miles by pneumatic capsules in concrete pipes. It found that the cost was 15 per cent. cheaper than the cheapest road haulage and 30 per cent. cheaper than by rail. These calculations take account of both capital and replacement costs. Broadly speaking, the figures work out the same but on a total annual output of, say, 180 million tonnes a year it looks as if you get a figure after inflation of somewhere between £5 and £10 a tonne on-cost to the cost of coal if you try and move this volume of spoil from, say, the centre of England, or the centre of Scotland for that matter, to a coastal site.
But against that one surely has to match the cost first of all of good farm land, or land of any kind, which is spared spoliation, and we are talking now about 500 acres a year, and also the cost of new good land which is created. So these are figures that should certainly enter into the calculation. There is, of course, another related factor to which the noble Lord, Lord Flowers, has just drawn attention. He has mentioned the need for sites for SNG plants in the future. I think one should also bear in mind the need for new power station sites in the future.
I was rather surprised in reading the Flowers Report that there was no obvious reference—I may not have read it sufficiently—to the studies carried out by the Watt Energy Committee published in March 1979 on Energy Development and Land in the United Kingdom. There is a very interesting map in that report which indicates the sort of areas that seem most likely to be needed for power station development in the next 30 or 40 years. I notice that a number of those coincide with the areas I have already mentioned as possible for reclamation. They mention the Firth of Forth, the Berwickshire coast, the Ayrshire coast, the Northumbrian coast, Morecambe Bay again, South Humber-

735
side, Severnside, the area of Devonport, the Dorset coast, the Southampton area, Suffolk and Dungeness. So it is not only a question of finding sites for colliery spoil, but it is also for power stations and the various forms of refinery such as SNG plants that are going to be needed. This seems to me to be the area that the commission might well have studied more sympathetically.
Lord Flowers: My Lords, if the noble Earl would forgive me, that is exactly the point I made in my speech, and it is also the point that is made in the report itself.
The Earl of Lauderdale: My Lords, I am much obliged to the noble Lord for correcting me; homo sapientissimus beats the student every time. However, in the light of the general drift of the report, I find the noble Lord's conclusions quite remarkably restrained. I draw attention particularly to paragraph 22.57 where, in the most moderate language, we are told:
"We conclude that the problem of spoil disposal suffers from the lack of any coherent national or regional disposal policy and that better co-ordination",
et cetera, is needed. That is a very modest way of putting what is a crying disgrace.
Of course it did not surprise me that my noble friend Lord Skelmersdale, in opening, trotted out the sort of litany that issues from this Government—which in many ways, as your Lordships know, I support—about market forces. How on earth market forces are going to enter into providing the public service needed to create new land on a large scale, I do not know. I happen myself at this time to be concerned in seeking funds for a reclamation project of great economic benefit, sanctioned by the Minister of Transport in another part of the country, and I must say that the altruism of financial institutions, the altruism of the market, is not something that I have yet come to recognise. Be that as it may, there is obviously an area where market forces should be allowed to work their best, and there are areas where the public service has to exist.
We have two other quite modest recommendations in the noble Lord's report. At 22.126 we are told:
"there should be a more systematic explanation by Government of the progressive evolution of national energy policy, and of the options for its implementation".
My goodness! I go along with that. Which noble Lord interested in energy would not endorse that over and over again? We are told that this should be accompanied by regularly updated indication of the order of magnitude of possible future requirements for major energy projects. Tell that to the market forces and I wonder what answer you will get? We in this House perpetually ask of the Government more intelligent and more penetrating surveys of energy policy. I would not like my noble friend Lord Skelmersdale to think that we did not appreciate the general conspectus with which he introduced the Government's view this afternoon, but we always want more and better.
Finally, at paragraph 22.128 the report concludes:
"long-term planning of land resources suitable for energy developments needs to be improved".
My goodness! improved? It needs to exist; there is
736
very little at the moment. Whether all these polite words will affect this Government or any other Government in any way, I doubt. Reasoned argument in my political experience is nothing like so effective as hitting them with a hammer.
5.1 p.m.
Baroness White: My Lords, I am delighted to be able to take part in this debate initiated so admirably by the noble Lord, Lord Kearton. We are all indebted to the noble Lord, Lord Flowers, for his work in recent years in guiding public opinion in areas where authoritative analysis and informed judgment on technical and scientific subjects are needed. I had the privilege of sitting under his chairmanship on the Royal Commission on Environmental Pollution when he produced the Sixth Report on Nuclear Energy, acknowledged to be a classic in its sphere, which won worldwide esteem as well as influencing opinion at home. The report entitled Coal and the Environment is not perhaps quite in that class, but it is a most thorough and well-balanced study of the effects of a major extractive industry which, having been in decline, is now seen to be re-emerging as a front runner, despite the caveats of the noble Lord, Lord Kearton. So the report that we are debating today is most opportune.
Nevertheless, I know that I echo the sentiments of many people in expressing indignation at the high price charged for this report by Her Majesty's Stationery Office—namely, £23 a copy. This is well above the price acceptable to most intelligent lay readers who cannot look to public or professional funds to furnish them with a working copy. If one goes to a library one cannot underline and sideline, which is what one needs to do with a report of this type if one is to deal with it adequately.
I speak with recent experience, having 10 days ago chaired a seminar in South Wales of some 50 people representing all the major interests in the matter in the area, public and private, to discuss this very report. It was under the joint auspices of the Prince of Wales' Committee and the National Coal Board, South Wales Area. We decided to photocopy and circulate the 11 pages of conclusions and recommendations. I do not know whether we were in breach of the copyright law, but if we were, so be it. To my mind it is monstrous to ask public spirited people to give their time, effort and expertise over some three years, with little or no reward, and then to price the results of their labours out of the market, which is what has happened in this case. It shows complete disregard for the true public interest. This is not the occasion on which to pursue the matter, but I hope that some of us may perhaps be able to take it up in the future.
After that little diversion let me return to the report itself. I propose to touch on certain aspects primarily from the standpoint of the area that I know best—namely, that of the South Wales coalfield. This is not just being parochial; this coalfield represents, at their sharpest and most comprehensive, conditions which still prevail elsewhere, particularly in the North-East of England but also in parts of the North-West and Yorkshire—in other words, the areas of the old coal regime. The older mines are, for the most part, less profitable; opencast workings are tolerated because they are, on the whole, more profitable and help to

737
redress the financial balance for the coalfield as a whole. This is particularly important in South Wales where geology, topography and—in relation to pollution and run-off—heavy rainfall, all enhance the problems and consequently the cost of remedying them.
For us, many of the environmental problems are legacies of the past rather than apprehensions for the future. I do not think that there is much prospect of a Selby in Glamorgan. Consequently, we are concerned that we shall not be left behind while attention is concentrated on how best to handle the developing areas in the Midlands, Oxfordshire and parts of Yorkshire. This, we believe, could be a very real danger.
In the papers provided for our seminar by those who are actually working day by day in the coal industry, I was struck by the difference in attitude of those in the National Coal Board and the Welsh Development Agency—which in Wales is responsible for dealing with derelict land restoration—compared with some of the recommendations in the report. In a region with long years of experience in tackling dereliction in particular, and doing it on the whole remarkably successfully, as the report generously remarks, there is a natural tendency to take the line, "We have faced and solved most of these problems; we do not need changes, for example, in planning controls and the like. We have worked out a reasonable modus vivendi over several decades with the other authorities concerned; all we really need is adequate resources to get on with the job".
The anxiety in an area of this kind—and I would suppose it would apply equally to comparable areas in parts of England—is simply to be allowed to keep pace and not to slip back inexorably, which is the fear, because the funds available continue to diminish in value. Had we been holding the seminar, for example, in North Oxfordshire, I am sure that the attitude would have been quite different. There one looks forward to potentially intrusive development of rich resources in virgin land and, on the social side, to the possible advent of potentially obtrusive miners. I was delighted with the comments made by the noble Lord, Lord Flowers, about coal miners. Coal miners are among the best people in the world—they have to be. But the inhabitants of the rich acres of rural England may not see them in that way in the first instance, so they will be on the alert to protect themselves by every available means.
I believe that modern coal mining, properly sited and well run, need not be unduly detrimental. I think that the balance on this was very wisely expressed in the report. I believe that anyone living in any such area which may look forward to development of a modern coal industry, should find the recommendations in this report extremely helpful, based as they are on careful investigation and rational judgment.
However, I return to the historic areas in the coalfields—particularly in my own country of South Wales—with their steep-sided hills and the valleys so narrow that there is little space or flat land of any sort to accommodate the modern factories and workshops needed to keep active, economic life viable. Spurred by the Aberfan disaster and the development of modern earth-moving equipment, there has been a revolution in the treatment of coal tips and waste heaps. As the report emphasises, the newer tips are
738
far less obtrusive, although this has the disadvantage of using up more of the less steep land. But I was so glad that the report so vividly describes in Chapter 10 how closely bound together in such areas are the treatment of former and current dereliction with the prospects of providing future work and happiness for the communities who live in these valleys. I quote from page 71 of the report—and I think that this was referred to by my noble friend Lady Birk—where it says:
"over half of factory space built by the WDA in the last five years has been on reclaimed land".
That is the measure of the importance of the new techniques which are now being adopted. In order to make the two policies of dealing with derelict land and with the provision of employment fruitful, there has, of course, as the report very much emphasises, to be the closest consultation and collaboration between the National Coal Board and its colleagues in the public sector, not least the local planning authorities.
On the whole, I think that this is very well carried out, but there are reasons of industrial relations—again referred to in the report—which make the National Coal Board understandably chary of announcing too long in advance the areas in which there may be closures of existing mines. This, of course, lessens the time and opportunity for those who have to take responsibility for new developments in those localities.
It is disquieting for us that at present the Welsh Development Agency's resources for land clearance are declining in real terms. I am not sure what effect the new Derelict Land Bill, recently introduced in another place, will have on their work, but, as the Explanatory Memorandum indicates that there will be no increase in public expenditure and that such money as is available will be defused by making grants to persons other than local authorities, it does not arouse great hopes. Fortunately, however, for us in Wales, some of the problems affecting local authorities in England are minimised by the use of the Welsh Development Agency as an intermediary. I am quite sure that the plea made by the noble Lord, Lord Flowers, and advocated in the report, that serious consideration should be given towards setting up a comparable development agency for the Yorkshire coalfield, should be taken very seriously indeed.
On the planning side, it is indeed true that there are differences of view between the National Coal Board and the planning authorities. I think that this is only to be expected. Again, there are some sensible suggestions in the report, and in particular one would draw attention to the suspicion felt by local authorities that the Minister for Energy is now regarded as being judge in his own cause. There are various minor points concerned with the general development orders which need attention. They are small in themselves, but they can make quite a considerable difference in local circumstances.
I should like to turn for a moment to opencast working. The report concludes that there should be no present increase in the total coal take by this method and that as more new deep mines are opened, the total of the opencast target should decline. It also suggests that the two sectors—deep-mining and opencast—should be financially separated. In South Wales

739
there would be considerable concern if this went anywhere beyond simple accounting practice. With the shattering experience in the mining sector which we have gone through in the past half century—and perhaps I might remind your Lordships that in the Rhondda where there were once 53 pits there is now only one fully working coalmine—there would be panic if the profitable Opencast Executive were to be hived off completely from the deep mine sector, because the one helps to sustain the other.
I think that it was right for the commisison to come down against anything so drastic. Nevertheless, having said how dependent we are on opencast workings in the South Wales coalfield, one must emphasise that only those who live near a long-term opencast site can appreciate the destruction and the loss of amenity that it can bring over a period which can extend to 20 years or longer. Obviously, it also gravely affects not only daily lives but property values for many families whose one major investment is likely to be their own home.
Hitherto, the common practice has been to receive authorisation for opencast working on a rolling programme basis, with renewal of permission after review, normally every five years or so. But more recently long-term, single authorisation sites have become accepted, with no provision for periodic review and hence no continuing incentive on the operator to keep all the conditions affecting noise, dust, visual encroachment and so on under stringent control. This can cause serious deterioration which may be accepted too readily in or near mining villages anxious to retain employment but regardless of the long-term future for the area. Once an area has become blighted, it can progressively deteriorate, and it is then very difficult to arrest the decline.
This point is all the more serious because there are apprehensions that, following a recent reference to the Monopolies Commission, there could be some possible privatisation—to use that ugly word, and it is ugly in all senses—of opencast coal working. For anyone who knows these areas, that could be disastrous. The National Coal Board has full responsibility as a public body to control the many private contractors who work on these sites. But to remove that dimension of public control on opencast working—something that affects people's lives so intimately over so many years—in my view would be a disgrace. I would hope that the Minister, to whom I have given notice of this point, can say here and now that such an idea in this context will never be entertained.
There are many other areas in the report to which one could refer with considerable interest and concern. I shall perhaps touch on only one, and that is the relations between the National Coal Board and the Welsh Water Authority. No doubt this applies in other areas to the regional water authorities as appropriate. The Welsh Water Authority has very considerable responsibility for some of the consequences of the activities of the National Coal Board. There are problems from washeries, from coal by-product plants, water from abandoned mines and run-off or leachates from spoil tips, tailings, large coal stocking areas and so on, all of which seriously affect water quality and fish life in our rivers.
740
Much of this surface drainage, run-off and overflow is not subject to any consent procedure under existing legislation. I am not suggesting that it should be made liable to legislative control, but it makes it all the more essential that there should be the closest co-operation and consultation between the National Coal Board and the water authorities. This used to be a matter of considerable discontent, but I think it is right to say that in the last few years relationships have very considerably improved. None the less there is still need for eternal vigilance.
There are so many other matters that one would like to discuss because this is a very full report and very closely argued, but we cannot deal with them all today. Nevertheless, this makes it all the more important that when the noble Earl, Lord Avon, replies he will give us some indication that the Government are not only actively considering all these suggestions but that they will make it their duty to give the public comments and replies as detailed and as authoritative as the proposals and recommendations made in this report; and perhaps we call also be assured that we shall not have to wait too long for the Government's considered response.
5.19 p.m.
Lord Nathan: My Lords, I am very grateful to the noble Lord, Lord Kearton, as are all other noble Lords who have spoken, for giving us the first and last opportunity of considering a report from the Commission on Energy and the Environment. This report, for which we are so grateful to the noble Lord, Lord Flowers, and his colleagues in the commission, demonstrates the misfortune which the country suffers from the Government's decision to let the commission fall into abeyance. Among many others, I have been concerned over some eight to 10 years past that such a commission should exist for the very purposes which are emphasised in this admirable report, which perhaps I might summarise as educational of the public with a view to establishing the options open with regard to an energy policy within the field, of course, to which this report relates. There is no other body of equal, or like, authority of which I know other than this which could undertake such a task. I shall refer later in my remarks to the underlying theme of this report, which is precisely the purpose of the report, to educate, and stimulate consideration of these matters so that people may be better informed. It is a great disservice to the country that this commission should be put into abeyance.
At this hour I believe I should confine myself to three points which have struck me as of particular interest and significance, one of which seems on the face of it to be so simple. One of the most significant conclusions reached is that industrial coal burn can be positively encouraged in most circumstances. This is stated in Chapter 22.122 and follows from the discussion of industrial coal burn in paragraphs 19.20 to 19.34. The significance of this conclusion to the lay reader is that it displaces the widely-held view developed over many years, that the burning of coal in urban areas should in principle be eliminated and be replaced by the use of electricity as the ideal solution.
The directives of a prime energy source such as coal must be much more economical and better adapted to such purposes as space heating than electricity could

741
ever be. The directives for coal in industry, as compared with the use of electricity where the option exists, muct be advantageous. This is not the time to discuss electricity generation policy, on which I would claim no expertise at all, but in the light of this conclusion one is led to wonder whether the policy of constructing vast power stations on coastal sites or on coalfields with giant pylons striding across the countryside is the right exclusive policy.
One is led to wonder whether, whatever the fuel used, be it coal, nuclear or oil, the loss of around 70 per cent. of the energy consumed in such production can be justified when the greater part of that loss could be eliminated in suitable circumstances by using the waste heat created in the locality where the electricity is generated. In the light of the commission's conclusion, it would seem well worth reopening an inquiry as to the practicality of developing local coal burning power stations using heat which would otherwise be wasted, effectively.
In the report, emphasis is rightly laid upon the need for proper maintenance and supervision of the equipment used, which leads to the conclusion that those conditions can be more easily fulfilled in the industrial context than in the private home. I wonder, however, whether technology and inventiveness cannot produce some foolproof equipment which could enable coal to be used once again in the private home without causing pollution, and perhaps with the convenience of oil, by some kind of automatic feed.
Of course, the advantage of greater efficiency in the use of fuel is a reduction in the aggregate amount of fuel required. So far as the environment is concerned in all its aspects such efficiency must be advantageous. Greater efficiency must lead to lower pollution both locally and in these more obscure fields of the greenhouse effect and the problem with regard to acid rain. There is of course also the point now so much overlooked that the use of less fuel will conserve resources. It has only recently been less under consideration because of the oil glut. I suggest that this is a completely temporary phenomenon which will soon pass. This conclusion of the commission deserves therefore careful consideration not only for itself but also for its implications.
As the noble Baroness, Lady Birk, mentioned earlier, the commission refers in paragraph 3·41 to the debate on the balance between investment in energy supplies and in energy efficiency. This is really another aspect of the point to which I have just referred. The commission have not embarked upon such a study, but say that they would have done so had they not been allowed to fall into abeyance. This is a crucial element in a proper study of energy policy and is just the sort of study which the commission could have done so well. I much hope that the Government will not allow the point to be ignored, but will see that such a study is undertaken by a suitably qualified body.
One of the curious omissions from most of the literature I have seen relating to energy is the absence of any proper consideration of the amount of energy used in an operation. Indeed, there is no commonly accepted measure of energy, although of course tons of coal or oil equivalent are used, kilowatts are used, and sometimes joules. The Watt Committee on Energy, to which the noble Earl, Lord Lauderdale,
742
referred, produced something in this field, and it would be wrong to omit to mention the work of Gerald Leach. With their pioneering work, however, there would be a lot to be said for incorporating in a study of energy supply and energy efficiency a study of this question which might be called "energy accounting". It is no use using money for this sort of accounting as it distorts the amount of energy used because of price fluctuations, taxation, and numerous irrelevant factors. It is the accounting of the energy used which is required, and I believe that this is a matter on which it would be most helpful if the Government gave some impetus.
Finally, may I refer for a moment to the underlying theme which runs through so much of the report relating to the need for progressive evolution of a national energy policy and the options open, and for wide public understanding of this. The implementation of major energy programmes inevitably involves all sorts of conflicting public interests. One only has to think of Windscale, Roskill, Belvoir, and the rest. Without a broad measure of public acceptance of the need for implementation of a particular energy policy there will be constant skirmishing between those other interests and the energy industries which can benefit neither side. We have seen it happen here, we have seen it happen in Germany, in Holland, in France, in the United States and elsewhere. This is a matter against which we want to guard not by protective measures but by the development of information and understanding.
I suggest that we can reach two conclusions from this. First, that there must be continual public awareness of the energy needs and of the options open, and secondly some adaptation of the present planning process is required. Whilst there is much flexibility, as the commission points out, in the present town and country planning system, the essential difficulty is that a planning application is quite specific whereas the question at issue may rather relate to national policy. As is stated somewhere in the report the benefit may be national but the burden will be local. This is the dilemma.
This is a matter of great and increasing public concern upon which there have been a number of conferences. Indeed one is to be held only next week under the auspices of the Institution of Civil Engineers and the Royal Town Planning Institute. This of course is not a matter which is related solely to coal and the environment, though chapter 21 of the report concerns itself with it. I much wonder whether the proposals made by the commission to alleviate the problem within the existing planning system will deal adequately with what the commission themselves regard as a key factor, and indeed perhaps the theme of their study. It is a matter on which I should be glad to know the Government view and what, if any, steps they have in mind to take by way of further study, changes in practice or in legislation.
Lord Lloyd of Kilgerran: My Lords, may I presume to ask the noble Lord a question, it being irresistible that I should ask a question of such a distinguished member of the profession of solicitors? He referred to accountability in regard to energy. With his great experience in the City of London, would be agree that the accounts of public companies should show not only accounts on

743
a financial basis but accounts in relation to energy accountability?
Lord Nathan: I would be frightened to accept that suggestion, my Lords, because the accounts of public companies are already over-long and so complicated as to be almost incomprehensible. I fear that if one had inflation accounting related to energy, we should all go mad, but the noble Lord raises an interesting point.
5.32 p.m.
The Earl of Halsbury: My Lords, like those who preceded me, I wish to thank the noble Lord, Lord Sherfield, for initiating this debate, and the noble Lord, Lord Kearton, for standing in for him, so effectively that I must warn him that if I am ever in need of a stand-in, his name may be on the danger list. My old friend and colleague Lord Flowers has produced another of those reports of his which are always hallmarked by that distinction and elegance which are peculiarly his own, and I associate myself with what was said by the noble Baroness, Lady White, and others, about what a pity it is that the commission has been wound up. I also agree with what she said about the document being priced out of the power of the average person to buy it.
After serving my stint on Sub-Committee F, during which I specialised on coalmining, coal processing and the problems of coal pollution, I served in attendance on the Royal Society's committee on coal and the environment, the evidence from which noble Lords will find under Topic No. 4 on page 23 in the summary which has been given us by the Printed Paper Office. For the last 12 years, until the first of this month, I was chairman of the Meteorological Committee, to whom many of these problems were referred for resolution of one kind or another. I would say, taking a general attitude to the matter, and remembering that when I was born we were producing well over 200 million tons of coal a year, that I cannot believe that reverting to what was common practice in those days will have any very spectacular results, unless one can point to some technological feature which has changed in the interim, and as the noble Lord, Lord Kearton, said in relation to dirt, one can indeed find such a difficulty.
I wish to deal with some of the items in the Royal Society's evidence from the standpoint of the relative urgency of different problems in relation to their time-scales, and we might take as the basis of our timescale the span of the Industrial Revolution, which, for my own part, I always date from the first blast furnace of Abraham Darby in Coalbrookdale in about 1750; so the industrial revolution can be taken as about 230 years old. How does one look at a span of 230 years? It is long in one sense, but not very long in another. It is 10 per cent. of the time lapse since the death of Socrates, but its last third is coterminous with the span of my own life. Its last two-thirds are coterminus with the span of my life and my grandfather's life.
Talking of the span of my life, it more than covers the period from the first flutterings of the Wright brothers to the first manned landing on the moon. The point I wish to make arising out of those considerations is
744
that anything other than the shorter-term problems will be faced with a technology that we cannot imagine, because technology is advancing so fast, and the sort of doomwatch attitudes which will arise at the end of the life of somebody now being born are really otiose because our power over nature, if it proceeds at the present pace, will be so enhanced by then that it would be a waste of time now to start saying how we should tackle those longer-term problems in the future.
Take, for example, the problem of the glasshouse effect and so on—the rise of carbon dioxide —when nothing we do in this country can make very much difference to the carbon dioxide content in the world, but of course what the world does can make quite a big difference to the carbon dioxide content of the atmosphere over this country. But the latest and most refined mathematical calculations—these have reached me only in the last few weeks, so they are stop press news—indicate that the atmospheric effects are a good deal more sophisticated than was originally thought. We may be going to be faced, for example, with much more in the way of local, than global, effects; there will be droughts in places where we are no longer accustomed to having droughts, and there will be floods where we are not accustomed to having floods. But all that lies a long way in the future.
Plant photosynthesis is at an optimum when the carbon dioxide content of the atmosphere is three times what it is. Maybe that is what the long-term historical average has always been and plants have adapted to it. Maybe we are merely living in a carbon dioxide world at the present time. The great storehouse of carbon dioxide is the sea, and the sea and the atmosphere interchange carbon dioxide—nobody knows the details. If the sea warms up, it emits carbon dioxide into the atmosphere, and if it cools down it absorbs carbon dioxide from the atmosphere. Having absorbed it, it can fix some of it as coral, future limestone rocks and so on. If we want to know more about that we must study not the atmosphere but oceanography because the two interreact and we shall never understand the atmosphere until we understand the oceans or vice versa. It may be a rather strange conclusion to say that if you want to know about the glasshouse effect, do not bother about measuring the carbon dioxide of the atmosphere but study oceanography. It is an example of how one adjusts one's priorities if one thinks in the right timescale.
I am sure sulphur pollution is a matter of relative economics. We should all like to live in the Garden of Eden, but we may settle for an industrial slut's paradise instead of the other kind if the maintenance of the Garden of Eden costs too much, particularly by way of resisting temptation from apples and other things. Sulphur pollution is soluble in terms of the fluidised bed combustion of coal. It leaves us with the problem, of course, of disposing of dirty anhydrite, but I come to the points raised by the noble Earl, Lord Lauderdale, about the need to use some of these materials for reclaiming land and so on.
The fall-out of sulphur or acid rain over Scandinavia is nothing to do with the long-term effects; that is a problem of the here and now because it affects, among other things, good neighbourly relations with a nice friendly people across the other side of the North Sea. And in so far as a substantial proportion of the

745
acid rain on Scandinavia is suspected—only suspected, not proved; and only a proportion, not all of it—to come from this country, we should, as a matter of good relations, take the matter seriously, study it and put the requisite resources behind it.
So far as the oxides of nitrogen are concerned, not to worry; there are a thousand thunder storms at work in the atmosphere at any given moment, all of them enriching it with oxides of nitrogen which descend in the rain as nitrates and nitrites and interact with organic amines to give carcinogens. Do not be too worried about carcinogens. The late Sir Alexander Haddow, who was the last of the great men of whom it was said that he carried the whole of cancer research in his head, which nobody could do now, used to give as his opinion the remarkable fact that in his view cancer was a relatively rare disease in a world full of carcinogens. He said that was a most remarkable fact and he thought that 80 per cent. of cancer was environmental, though he always pointed out that most people did not die from cancer and that those who did were without it for the greater part of their lives. That was his dictum—the remarkable fact that, as he put it, it was a relatively rare disease in a world full of carcinogens. I am sure that we ought to avoid them whenever we can. But any kind of a crash programme to reduce carcinogens or to suppose that we ought to invest everything that we can in reducing oxides of nitrogen because they can be a step on the chain would again be a misuse of resources.
I come to the very serious problems of ash, dust, dirty anhydrite from fluidised bed combustion, and so on. These are immediate problems, and we ought to keep them under continual effort. They are the problems of the here and now and are therefore the high priority problems that we have to solve with our own technology. In this context I must say that I was rather impressed with some of the efforts being made by the National Coal Board—and here I am not entirely in agreement with what the noble Lord, Lord Kearton, was saying—over the improvement of land following reclamation after opencast working. I have visited the Westfield opencast mine, which is the largest artificial hole in Europe. It is where the lowland coal seams come up against the Highland boundary fault, and the seams are twisted and imbricated, and involved with one another in all kinds of ways understandable only to geologists. One has only to look at what they are actually digging out to see that mining it in any ordinary way would be totally impossible. The surrounding countryside is barren moorland. Where it has been reclaimed it is beautiful green grass pastures, with a very much higher coverage of animals per acre than the original land ever had. I think that Westfield is a great credit to the National Coal Board from the standpoint of subsequent reclamation.
The reason that coal tips burn, emit nasty smells, and disfigure the countryside is that they are loosely packed aggregates which admit air, auto-combustion then takes place in masses which are too great for the heat to get out, and so they slowly become incandescent. The modern treatment is to take off the top soil, pack down the dust and dirt from the mine, ram it down hard with steamrollers, so as to pack it as tightly as possible, excluding the air, and then put the top soil hack again. I have seen that done in the Westfield
746
area, and there was no doubt that the quality of the grassland after it had been treated in that way was very much better from the standpoint of the coverage per acre of cattle that one would get than were the water meadows as they were originally.
However, the question of the disposal of the dirt will be with us for a very long time, even if we dismantle (as I have often said we ought) all the tips and rubbish of the last century. The problem of where to put them is with us, as is the problem of how to use the areas which the noble Earl, Lord Lauderdale, was talking about, such as Morecambe Bay, the Wash, the Thames estuary, and so on. The Dutch would never for one moment tolerate these enormous areas of shallow water—doing nothing about them while having to import food. They would be beautiful grass meadows, producing butter, breeding pigs, and put to other uses like that. We have to learn to do that.
Those are my conclusions from just putting the differential timescales on the factors on just one item in the evidence before the Committee. I believe that as the last Back-Bench speaker in what is intended to be a short debate that is about as much as your Lordships would care to hear from me this afternoon.
5.43 p.m.
Lord Molloy: My Lords, I seek your Lordships' indulgence in so far as my name is not on the list of speakers. However, I have read the report, and it seems to me, having been born in the valleys of South Wales—where we depended wholly upon providing the nation with coal, coke, steel and shipping—that its whole basis is that of coal. The wish of my parents, and their parents before them, was: God hasten the day when the last pit could be closed for ever. I found the report of the noble Lord, Lord Flowers, admirable, and I was terribly touched by his speech and the speech of the noble Lord, Lord Kearton. I say that because I only wish that the report of the noble Lord, Lord Flowers, had been discussed in Parliament in 1933 or 1934. Had it then been discussed there would not now be in the valleys of South Wales, in the homes of many people, including my family, photographs of young men who were killed instantly or who perhaps (lied from terrible diseases which in those days we called "consumption". When the, clever people came along they called it pneumoconiosis, but we discovered that changing the name made no difference at all. You still spat up your lungs, you still almost strangled in order to get a breath of fresh air, whether you were the barber in the village or you were the miner. Such things could have been avoided had we had in those days a report of the nature of that by the noble Lord, Lord Flowers, and a speech such as that by the noble Lord, Lord Kearton, this afternoon.
I must say to the Government that it would be not only an insult to the members of the commission, but also a most callous act of indifference if action were not taken on what is proposed in this tremendous report on Coal and the Environment. What I say applies not only to South Wales or to Yorkshire, Scotland, or parts of Kent, but to the entire country. Coal—which is dealt with in the first part of the report—together with wool, ensured the richness of the nation. The British Navy could not have moved one tenth of the way

747
towards Argentina if it had not been provided with the anthracite coal of South Wales. The great industries of the industrial revolution could never have turned if they had not had the coal produced by the miners of Britain.
We must remember that when coal mining started our countryside was ravaged. I think of books such as Rape of the Fair Country, or some of the plays that have been written by some of our poets in South Wales. All these things are allied to this tremendous report. Perhaps they provide the emotional aspect of the subject, and this I believe is equally important. Not only was our countryside ravaged, but later on, right up to the 'thirties, (as the noble Earl Lord Halsbury, mentioned) there were the effects of the industrial revolution. I have experienced some of the evils of the industrial revolution. I believe that they could have been avoided if many years ago we had had a report of this character and eminent people such as the noble Lord, Lold Flowers, and his colleagues had examined what had to be done, not merely from a economic point of view, but of course from a humanitarian point of view, too.
I can remember as a small boy going to my grandmother's and there being a table cloth only on a Sunday. I recall getting my ears boxed—in the Rhondda Valley—for writing letters in the dust from the nearby pits which settled on the tablecloth. If the mining communities of Great Britain are to be expected to understand what is meant by the report, it must also be realised that the things that I have been talking about are common to people in Scotland, Northumberland, Yorkshire, Derbyshire, and right down to Kent. In those communities we knew one another through our meetings, via our different federations and later (from 1945) the National Union of Mineworkers. At this stage I want to endorse what my noble friend Lady White has said. What a shame that there is not an adumbrated edition of this magnificent report, which ordinary people could obtain, read and understand.
I hope that perhaps the noble Earl, Lord Avon, who will be replying to this debate, will take that particular aspect on board, because what is the point of having a report of this character when the very people who are affected most cannot afford to buy it? It is at this intellectual level that we sometimes find the most crass stupidity. This should be available to every coalmining family in Great Britain, as well as to all those who are involved in the running of this great industry.
We speak of (as I think they are called) spoils. Of course, we always use the word "tips". People did not say, "There has been a disturbance of the spoils in Aberfan": they said, "The lousy tip has moved and it has slain our children—over a hundred of them in just a couple of minutes". So let us use the words "coal tips so that we shall never forget what happened at Aberfan. That is not a statistic—that was an emotional rape of our own people by the Coal Board's predecessors, the private owners of the tips. Yet the strange thing is—and this is also strictly relevant to this particular report—that the British coalminers have a better industrial record than almost any other industry in our nation or, indeed, throughout the world.
It was in 1974 that there was a collision. There had
748
never been a wholesale strike in the pits since 1926. It was bitterness and anguish which caused the first, when they were driven back for less than they came out on strike for; and the last time they thought they just did not count. The fact is that they do count; and that is why I agree so much with my noble friend Lady White. I would wish that the majority of our coal-miners could afford to buy this report, because what they would say to me is: "This is a great report; it puts us, the miners of Britain, on the agenda". I think that is the greatest tribute I can pay to Lord Flowers and his colleagues.
I have sometimes wondered, as I have read what they can do in the Soviet Union. I am no particular admirer of that appalling régime, but I do not blind myself to some of their technological achievements. They put up the first Sputnik, and they put the first human being into space. I am not going to blind myself, either, to the fact that they apparently are able to take the spoil, the waste that is produced at the same time as the coal, and put it back into the holes that it came from. This is a most remarkable thing. They have no tips. The great caverns which the machinery of coal-mining gouge out of our countryside they fill up again.
I would not have thought that that was beyond the ability of British technology, and there is nothing wrong in following something which is pretty good; because from that, I understand—and I have read this very deeply—they found that they were restoring agriculture. They found that there was something in the coal dust which enriched the soil. I believe the noble Earl, Lord Halsbury, touched on this. Therefore, not only did they get rid of the tips, but they created a new form of agriculture; and surely that cannot be bad.
On page 212 of the report, in Chapter 12, the commission says:
"… the Board has a responsibility to ensure that the best environmental practices available are introduced … in the day-to-day management of its operations".
That, once again, I find truly remarkable. It is not leaving things, as at one time, always at the top, but in the day-to-day management. It is on issues like this that I should like to congratulate Lord Flowers and his colleagues, although I am bound to say that later in the recommendation they say that the responsibility should be at an appropriately senior level in the board. I would agree with that, with just one amendment. It is at the top level of the board that it has got to be, because then it will stand much more chance of becoming a reality.
We often used to say that if we had had to dig for bread, dig for butter and dig for bacon there would have been a much more humane attitude to this great industry. It fell into decline, there was a renaissance and then it declined again; and people have never been sure. This I have always found amazing because, it is still (as, for certain, it will be for the lifetimes of all of us here) a vital part of our British economy. I therefore believe that it commands all our technological and humanitarian endeavours to see that we have an efficient coal-mining industry that damages the environment to the absolute minimum.
I therefore appeal to the Government. I do not expect the noble Earl to give a complete answer to our

749
requests, but if there is no implementation of the vital sectors of this report—I do not mean overnight, but if there is not a programme of implementation of this report—if the Flowers Report is allowed to wither (if I may use that term), there will be very great anger, because despite its expense the National Union of Mineworkers will see to it (indeed, they have seen to it) that their members are aware of what is in here. Much of it they have been asking for. They now have their own technological experts and scientists advising them. It is not a case of having to depend wholly on the lads in cloth caps working in the pits. I therefore hope that these magnificent words (though I could quarrel with quite a lot of it) will not be allowed to turn sour. I sincerely hope that this report will not wither on the vine, because if it does then this great industry will be poorer and, what is much more important, our great nation will be poorer.
5.57 p.m.
Lord Wynne-Jones: My Lords, I think that in your Lordships' House we have a great faculty for taking an extremely important subject and treating it in such a matter of fact way that it sounds as though it were not a very important subject. I think we regularly seem to do this in the field of energy. I myself have previously called attention in your Lordships' House to the fact that we do not have anyone of ministerial rank in your Lordships' House speaking for energy. In fact, this seems to be, not peculiar to this Government (although I am rather surprised that this Government, who have been talking as though they wanted to do something about energy, have fallen into the trap) but quite common. Indeed, it is a long time since we had someone of full ministerial rank speaking in your Lordships' House on the subject of energy.
In the debate that we have had today, which we are very much indebted to the noble Lord, Lord Kearton, for introducing, we have been exceptionally fortunate, as has been pointed out, in having the noble Lord, Lord Flowers, present and taking part. It has meant that we have had experts in the field of energy talking to us and have had the chairman of the committee responsible for the report. I must agree with my noble friend Lady White that the charge for this report is really excessive. It ought to be made widely available for it is an excellent and important report. To list it at £23 is really too high. I hope that the noble Earl will convey to the Government that we think that when reports of this importance come out they ought to be priced at a figure which makes them readily available throughout the country.
The great value of this report, simply called Coal and the Environment, is that it takes the whole field of coal, the possible uses of coal, the way in which it can be won, everything like that, and considers it in terms of the environment. We are accustomed now—and I think quite rightly—in the field of energy to have the problem of the environment raised all the time and it is right and proper that this should be so. It is quite wrong that we should undertake wilfully contamination of the environment without considering the advantages, disadvantages and the cost to the community; and therefore it is vital that this should be done.
We have had, particularly the last five to 10 years, a lot of criticism about the use of coal. We are in a very
750
difficult position because, if one looks at the matter today, despite all the talk about the availability of alternative sources of energy, the actual fact is that we are down to oil, gas, coal and nuclear energy for practically all our supplies of energy at the present time and in the foreseeable future. When one realises that gas, rightly, in my opinion, is treated in this country as a premium fuel and is not used in power stations (I think rightly), then I think it is quite wrong that on the Continent of Europe they have been using it when they need not have been using it for power-station work. If that is the case, and if at the same time we want oil for other purposes—and we do—then it is evident that for the generation of electricity, and for a great deal of the heating load, coal is one of the most important resources that we have.
Electricity can be generated from coal and electricity can be generated by nuclear power, but if there is to be environmental criticism of every nuclear station, every nuclear proposal that is put up, we fall back on coal. If there is to be an environmental embargo on coal, then we are in a very difficult position. Therefore, the importance of this report is that it examines in close detail the environmental factors which arise from the use of coal and it is very valuable to find that a lot of the (I think quite reasonable) feelings that people have had about the possible disadvantage environmentally of coal are shown by this report to be not as serious as was thought.
This, I think, is a highly important matter and the committee have gone through it extremely carefully. It starts with the winning of coal. There was a point at which I think the noble Lord, Lord Kearton, said something with which I did not entirely agree. It was that if we had not started with coal we should not have wanted to use coal. The first time I met the noble Lord was years ago when we were both visitors from the old Department of Scientific and Industrial Research to the British Coal Tar Research Association. It was then that I learned what an acute mind he had and ever since I have had a healthy regard for his acuity and for his sense and wisdom in dealing with matters. But I would suggest that perhaps in this particular case he is a little biased by the industrial/chemical upbringing that he had. He was with a firm that later found that he was a doughty opponent. The firm was ICI.
ICI think—I am right—the first major chemical firm that moved over from the use of coal to the use of oil. They did it at Bellingham. I have no doubt that the noble Lord, Lord Kearton, was doing most of the work, but the man at least nominally responsible was Holroyd. I remember talking to Dr. Holroyd about this. I said, "If you had had the same chemical engineering techniques developed for using coal as the Americans had developed for you for using oil, would you really have switched to oil?" He said he was not certain. There is a transport problem involved—part from anything else; but one of the main troubles in the use of coal, he told me, was the enormous area that was required in Bellingham for storing the coal and for handling it. They were able to cut this area down to something like one-tenth by switching to oil.
But this does not apply when one is talking about power stations. The position is different. I have a strong suspicion that in the course of time we shall find our technology will allow us to use coal just as well as

751
oil; so I beg my noble friend Lord Kearton not to be too influenced in the future by his industrial/chemical background, which I think tends to prejudice him against coal.
The real problem which arises all the time is the necessarily environmental difficulty about winning coal. It is not possible to leave all the spoil down in the pit. You have to bring it to the surface; it is the only cheap, economical thing to do. You may later get it down into the pit but it is virtually impossible under present conditions to do it. It is interesting to note that the amount of waste material, of non-coal, which is brought to the surface is much greater than it used to be. The reason is quite simple; it is mechanical mining. You have a 100-yd wall; you run the cutter along this wall, and the cutter goes 1 metre into the wall. It takes all the coal out, shoots it on to a conveyor and the coal comes up to the surface. That means that there is no sorting possible at the pit face or down the mine. That can only be done above ground. So there is that problem.
With opencast mining we have other problems which are well known. I have had a little experience of opencast mining. I went to live in Newcastle in 1947 and on the edge of the town moor, along Grandstand Road where the old pitmen's Derby used to be run, an opencast pit was started. This lasted for about 15 years. There was an awful outcry. When it finished that ground was indistinguishable from the ground round about it—except that it was no longer sodden and a marsh.
There was another bigger area about 20 miles to the north of Newcastle, Acorn Bank, where there was an enormous scheme which lasted about 20 years. Essentially what they did was to take off the topsoil, they took off the overburden, and these were put all round the site. Then they cut down and simply scooped the coal out. They had a 20-ton scoop which loaded straight on to vehicles. They had to build a special road because the public roads could not take this. The whole thing now is splendid, ordinary farming ground. It is indistinguishable from the ground round about it except that it may be more fertile. So it can be done.
The County of Durham used to be one of the biggest and most important mining counties. Some of the best coking coal was produced there. When I first went there there were spoil pits all round the county. One can go there today and scarcely see a spoil pit. At Ferry Hill, which is running north from Darlington before you come to Durham, there was a station and that was an appalling mess about 30 years ago. Today it is unrecognisable. So these improvements can be made, but of course they are expensive.
The point which has to be realised is that it is not playing fair with the coal industry to put the cost of all that restoration on it. In the first place, a great deal of that cost is the consequence of what was done many years ago, long before the present NCB existed. We are putting an unfair burden on the NCB in asking them to repair what the previous owners did not have to repair. It is now a national task and we ought to see that. I hope that the Department of the Environment will bear this in mind. We want to have a fair country; we want our country looking beautiful. We
752
do not want it despoiled, but it is something which becomes at this stage a national charge for recovering the effects of the past. I hope that the Government will take this seriously.
One important matter which arises from this report is that the coal industry is, within certain limits, given the opportunity to go ahead and do things, and it therefore will be able to maintain its production. This is important. I know that there has been an argument about this. About eight years ago there was a lot of play in the financial press in particular of estimates made by Dr. Gerald Manners, Reader in Geography at University College. He claimed by his method of calculation and extrapolation that by the mid-1980s the total consumption of coal in this country would be below 85 million tons a year. It is far above that—it is more like 140 million tons. This figure received a lot of credence.
Some two or three years later I was chairman of the sub-committee of your Lordships' House which was dealing with coal. We asked Dr. Manners to submit a report. I have the report in my hand. The figures that I have mentioned are taken from what he said at the time. The committee as a whole were not satisfied with the arguments that he used. We said that we thought that the figure of our production should not drop below 150 million tons a year, and that we ought to try and raise it to 170 million tons.
It is interesting that only today the CEGB issued a statement about the coalmining industry. This is from Mr. Fred Bonner, the acting chairman of the CEGB. Spelling out the opportunities for coal in the future generation of electricity, he says that the CEGB and the South of Scotland Electricity Board together would have the capacity to burn over 80 million tons of coal a year into the next century. This is the same tonnage that the two boards are burning at the present time and roughly a third of all the coal mined in Europe. That is very interesting and shows what an important part coal is playing now and, in the opinion of the acting chairman of the CEGB, what part it will play if prices remain reasonable over the rest of this century. I think we can say after this very important and interesting debate that most of the criticisms on environmental grounds against the use of coal are either not valid, or we can see how to get round them. We are therefore faced with the vital importance of maintaining a coal industry at least at its present level, and maintaining it in such a way that when the end of this century comes this country is well equipped for any changes in energy policy which may be necessary. I ask the Government to bear this in mind.
6.20 p.m.
The Earl of Avon: My Lords, I add my gratitude to the noble Lord, Lord Kearton, for introducing this debate and for enabling us to consider the future of the coal industry and its environmental consequences today. In fact I also thank him for initiating this lively and informative debate. The noble Earl, Lord Halsbury, by referring to gardens in my family name, has made me rather nervous in case I should find there has been some acid rain in my garden. However, the noble Lord, Lord Wynne-Jones, was kind enough to say that there were no Ministers of the Department of Energy. I do assure him that sitting on the Benches

753
behind me, there are Lords in Waiting who are worthy aspirants. It is just that there is no answering voice in another place. The noble Earl, Lord Lauderdale, referred to the environment as a "religion". I am not absolutely certain that my right honourable friend would like to preside over a department of religion, but if it means, as I have a feeling it does, that you can have your cake and eat it, then perhaps it will be more attractive.
This afternoon we have had the particular advantage of the excellent speech of the noble Lord, Lord Flowers, speaking as he does with the authority of having a long and distinguished service with the Royal Commission on Environmental Pollution, and of course as chairman of the Commission on Energy and the Environment. Many tributes have been paid today to the excellence of the commission's work, and at the start I should like to underline that the Government are very grateful to the noble Lord and his fellow commissioners for their comprehensive and authoritative study. In particular I wish to stress that the decision announced last summer to put the Commission on Energy and the Environment into abeyance did not in any way reflect on the quality of the work they had undertaken. At the time my right honourable friend the Secretary of State for the Environment made it clear that we should continue to look for advice on specific related issues to fora such as the Royal Commission on Environmental Pollution and the Advisory Council on Energy Conservation and, if it proved necessary, we should hope to reconstitute the commission.
The commission was established to advise on the interaction between energy policy and the environment. The noble Baroness, Lady Birk, stressed the importance of this and I should like to underline it. The publication of their report last September has already served to encourage public debate on this issue, and I absolutely agree with the noble Lord, Lord Flowers, on the importance of this. More recently, the Government's decision on proposals for coal mining in the Vale of Belvoir has also focused attention on this issue, and I shall return to the subject later. We are most grateful to the commission for its examination of the ways in which energy needs and environmental standards can be balanced.
Upon publication of their report, the Government initiated consultations with the National Coal Board, the local authorities and their associations and other environmental and industrial interests. Your Lordships, and in particular, I am sure, the noble Lord, Lord Molloy, will be interested to hear that there was general praise for the report and a wide measure of agreement on its main conclusions. Following this consultation, the Government are formulating their response to many of the 70 or so detailed recommendations in the report. Your Lordships' views today are both a very timely and a very valuable contribution to the Government's views. It would be impossible, as I am sure your Lordships would agree, to deal with all these recommendations on this matter or with all the points raised this afternoon in my speech now. Rather, I propose, in answer to a number of the questions raised, to indicate the Government's general approach and their preliminary views on some of the main issues that have been raised today.
May I first set the environmental considerations against the background of the role of coal in energy
754
policy. My noble friend Lord Skelmersdale made clear in his speech the Government's commitment to the future of the coal industry. We welcome the commission's overall conclusion that there are no insuperable environmental obstacles to the future production and use of coal as currently envisaged in the United Kingdom. This is, of course, subject to important qualifications covering spoil disposal, opencast extraction and subsidence, to which I will refer in a minute. The Government also note the commission's view that modernisation in the industry affords the best prospect of striking an acceptable balance between energy and environmental interests.
It is the Government's aim that, as far as possible, the planning procedures and objectives which apply to mineral operators generally should apply to the National Coal Board, although it is recognised that the scale of their operations can cause unique problems. New developments will be expected to meet the highest practicable environmental standards, in all respects—the impact on the environment during working, the disposal of spoil and the eventual restoration and after-care of the site. We should pay tribute to the environmental standards now successfully pursued at new mines, of which Selby is an oft-quoted example. I am assured that the National Coal Board is committed to maintain and improve such standards. I should like, at this point, to add my marks of respect to the National Coal Board, to the miners and to those associated with the industry, as many noble Lords have done this evening.
But we must remember that most of the coal will continue to be produced and, to some extent, burnt in established mining areas. In the public's eye, the performance of the industry will be judged as much by what is achieved, for example, at Barnsley in South Yorkshire as by what is proposed and effected at Selby in North Yorkshire. This concern was strongly voiced in the recent debate in another place. The benefits from a modernised industry should be widely felt and higher environmental standards should be pursued as vigorously with major investments in rationalising older coalfields as in opening up new ones. And at existing sites we look to the National Coal Board to continue to improve their environmental standards in line with those adopted elsewhere in the minerals industry. In most cases, as the commission concluded, it is an extension of current good practice that is required.
I now turn to some particular issues in which, as I have already said, the commission expressed reservations and which, as today's debate has shown, are also of considerable concern to many noble Lords. The first of these is colliery spoil disposal, which was mentioned by the noble Baroness, Lady Birk. This is a major and growing problem, since mechanised mining has greatly increased the ratio of spoil to coal that is brought to the surface. That point was made by the noble Lord, Lord Kearton. In the past much of this has been tipped in bare, conical heaps neat the mine heads. I am certain that a high priority must, as the commission has said, be given to improved tipping and restoration techniques and to adopting new and more imaginative approaches to landscape design.
In the past decisions on disposal have often been taken in a too local and in a too short-term context. In the future, improved planning and co-ordination will

755
be needed to tackle the problem in a more imaginative way and this is what the Government seek. They are also considering the most appropriate arrangements to achieve this, particularly in the main Yorkshire-East Midlands coalfields. There are already regional groupings of local authorities and there are already examples of close working between local authorities and the National Coal Board. We must try to build on such established links rather than to create new machinery. The Government agree that spoil disposal must in future be tackled with greater imagination. This is as necessary in those areas like the Yorkshire coalfield, that have an existing legacy of spoil heaps, as it is in the case of new mining disposals like the vale of Belvoir where, as your Lordships know, my right honourable friend the Secretary of State for the Environment has asked that this aspect of the National Coal Board's proposals should be further examined.
The noble Lord, Lord Flowers, asked me some specific questions on Belvoir. I know that my right honourable friend's decision on the NCB's planning application for development of the Belvoir coalfield has had a mixed reception, but it did recognise the desire in the national interest to exploit this new coalfield while insisting that high environmental standards, particularly for spoil disposal, should apply. These commitments to new investment in the industry and to using, wherever feasible and appropriate, alternatives to local spoil tipping are key conclusions in the commission's report. The Secretary of State took account of the economic consequences of his decision and of the impact it would have on the NCB's forward policy. He accepted that the NCB might wish to submit new planning applications relating to revised proposals to exploit the massive national resources at Belvoir. I cannot say to what extent the commission's report actually influenced the judgment. Since the decision was made, senior officials in the Department of the Environment have held discussions with those principally involved, including the NCB, the trade unions, local authorities and environmental interest groups.
There is no single, simple answer to spoil disposal; certainly, it cannot be assumed that disposal to local tips can continue to provide all of the answers in the longer term. The Government believe that a more imaginative approach is needed. The commission has identified the alternatives—backstowing, land reclamation, marine disposal, commercial use. Progressive restoration techniques can also reduce considerably the amount of agricultural or other land which is out of use at any one time.
We need now to establish more clearly the circumstances in which these different methods are financially, technically and organisationally feasible. The prime responsibility for spoil disposal must be for the National Coal Board. But the local authorities have an important role in land use and pollution control and have already taken some initiatives; in particular, the feasibility study of reclamation with colliery spoil at Pyewipe on the Humber estuary. The Government are considering how the search by the board and the local authorities for more satisfactory strategies for spoil disposal can be assisted.
Next I come to subsidence. Like spoil, it features
756
in the traditional image of the coal mining area. In practice, it is fortunately a problem which affects only a minority of property in such areas. Nevertheless, it deserves serious attention. The commission examined the question of subsidence in some detail. They concluded that there were severe practical limits to minimising the incidence of subsidence, and that for the foreseeable future the right approach was to provide for the repair of damage after it has occurred. The Government agree with this broad conclusion.
The commission then examined the way in which the compensation system operates, and the various arguments relating to its possible extension. They said that most complaints related to the operation of the National Coal Board's code of practice, rather than to its scope. This is certainly an area which the Government intend to keep under regular review, in consultation with the board and other interested parties. As regards the scope of the present arrangements, it has recommended that there should be an additional right to compensation in certain circumstances for long-term residual loss of value of property caused by subsidence damage. This is a complex area, but the Government are studying it urgently.
One beneficial effect of subsidence deserves special note. Land sterilised, especially once flooded, can be a valuable habitat for wildlife. The commission argued that, in such cases, nature conservation can be an appropriate and attractive use of land. Your Lordships may be pleased to know that talks are under way between the National Coal Board and the Nature Conservancy Council to explore such opportunities. I was particularly interested to hear the comments of the noble Lord, Lord Wynne-Jones, about Northumberland, where the water has been so well covered.
I should now like to turn to opencast mining, which was mentioned by many noble Lords. The reason why the National Coal Board engages in opencast mining is to produce good quality coal with low production costs, and the commission recognised this. But it was also quite clear to them that opencast mining has a number of adverse environmental effects—the disfigurement of the landscape while operations are being carried out, the noise and dust which nearby residents sometimes suffer; sometimes, also, the increase of traffic on local roads. In addition, it is argued that there can be deleterious long-term consequences in the form of reduced agricultural yields and damage to the richness of landscape and ecology. But the very fact that opencast coal is a valuable national resource, which the nation neglects at its cost, makes it particularly important to make every effort to tackle and mitigate these environmental problems. The Government are conscious of this.
The commission examined opencast mining at some length. In particular, it recommended that applications for opencast coal working should be dealt with under the normal minerals planning machinery as for all other new mineral developments, and not directly by the Secretary of State for Energy as at present. This would, of course, be a major change in established procedures and the Government are carefully considering it.
But, wherever final authority for granting permission lies, the environmental problems of opencast working can be tackled more satisfactorily the earlier and more

757
fully local authorities and the National Coal Board's opencast executive work together. The Government welcome the efforts which the executive has made in recent years to develop forward programmes of opencast exploitation in close consultation with the local authorities in several areas, and also welcome the code of practice on the advance planning of opencast sites, which they and the local authority associations have agreed. In the light of the Commission's recommendations, the Government have the question of future opencast production under review.
In addition to these arrangements, the commission recommended that there should be guidelines to define preferred locations for opencast working. The Government view this as a positive proposal. Incidentally, I have taken careful note of the reservations of the noble Baroness, Lady White, about the Principality in this matter. Spoil disposal, subsidence and opencast working are the three issues to which the commission gave particular attention. I have given your Lordships the Government's general view on them. But there are two other issues which I would like to touch upon—pollution and dereliction.
The commission's study was concerned with coal use, as well as coal production. In the context of a continuing switch back to coal, especially in industrial markets, they examined the environmental effects of coal combustion and conversion to synthetic fuels like substitute natural gas. In doing so, the commission were able to draw widely on the valuable work carried out by the Royal Commission on Environmental Pollution in their report on air pollution. The commission concluded that there is no longer major cause of concern on health grounds over ambient levels of smoke and SO2 from coal combustion. The Government agree, but will take all necessary steps to cope with the problem in areas where concentrations are still too high.
The Government note the recommendation that, in view of the need to keep the level of smoke pollution in urban areas at the lowest practicable level, the performance of domestic smoke reducing appliances should be carefully monitored. We welcome the commission's view that industrial coal burn can be positively encouraged in most circumstances; and I noted the comments of the noble Lord, Lord Nathan, on this point. But we are also alive to the potential problems, and are considering very carefully the adequacy of existing controls.
A number of noble Lords mentioned the "acid rain" problem, which is of particular concern to Scandinavian countries. The Government take this issue seriously, as is witnessed by our participation in this summer's International Conference on Acidification in Stockholm. We are also playing a very full part in the Economic Commission for Europe, under the Convention on Long Range Transboundary Air Pollution. Work is proceeding in a logical, sequential fashion from exchange of information, monitoring and research to development of policies, But before we consider remedial measures, we must be sure about the effects and their relative costs and benefits.
In considering pollution from coal use, there is a real concern to avoid recreating the problems of the past. But we also cannot ignore problems from the past that are still with us. The commission expressed the view
758
that land dereliction may be regarded as a form of environmental degradation which is just as unacceptable as other forms of pollution, and went on to make a number of specific recommendations. As noble Lords will be aware, for many years the emphasis in reclamation has been on helping local authorities to tackle historic dereliction in the major coalfields and industrial areas. The Government's derelict land programme for 1982–83 has been enlarged to £45 million—a considerable achievement at a time of continuing public expenditure restraint. Preferential treatment is to be given to joint schemes by local authorities and private developers for reclaiming land for immediate development.
If I may answer one or two points which were put to me, I should first like to refer to the cost of the report which was mentioned by quite a number of people. I must confess that it took me by surprise, because in my position it just arrives on my desk, and I was equally rather horrified when I saw that it cost £23. It is, I am afraid, the policy of Her Majesty's Stationery Office that the prices of publications should reflect the full costs of production. I shall, indeed, look into the idea suggested by a number of noble Lords that we might have an abridged version which would be more easily distributable. Incidentally, the Printed Paper Office's current price limit for free distribution of papers is £16. I believe that this may be of concern to the House, and I should like to bring this to the attention of my noble friend the Leader of the House.
The noble Baroness, Lady White, raised the subject of mining in South Wales. I believe that the commission rightly noted that major investment opportunities for new coalfields lie in Yorkshire and the East Midlands. But I can assure the noble Baroness that there will also be continuing investment and modernisation of the industry in South Wales. My right honourable friend the Secretary of State for Wales is committed to a continuing programme of restoration and clearance of dereliction resulting from coal working in South Wales, but I should like to endorse the commission's praise for the work of the Welsh Development Agency in improving and redeveloping land made derelict by coal mining. The Government intend their work to continue.
The noble Baroness also made some comments about the privatisation of opencast mining. Under Section 46 of the Open Cast Coal Act the NCB may also license private sector opencast mines, provided that each site is not expected to yield more than 25,000 tonnes of coal. In these cases, the licensee is responsible for obtaining planning permission from the local planning authority for operating the site. The Government have at present no plans to privatise the NCB's opencast mining.
Both the noble Lord, Lord Flowers, and the noble Baroness, Lady White, mentioned the proposed Yorkshire Development Agency. The Government recognise the unique scale of both past and future problems associated with coal mining in Yorkshire. Extraordinary effort is needed to tackle the problem. The commission, as the noble Lord said, recommended a special development agency with its own budget to deal with such problems as dereliction. The Government are considering their proposal. We certainly recognise, as did the commission, the con-

759
siderable achievements of the Scottish and Welsh Development Agencies, but we believe it to be right to be wary of establishing such agencies unless existing institutions are clearly unequal to the task. We are not at the moment convinced; nor are the local authorities who have made strong representations to the Government on this proposal.
I should like to say something about land availability for energy development. The Government accept the commission's view that there is a need to get more consideration of the energy industry's land requirements into land use planning in advance of individual projects for developments like coalfields or power stations coming forward for approval. In that way, we might have a better informed debate about alternative locations, might enable local authorities to assess the impact of these developments on their policies and might provide more certainly for the energy industries that their land requirements are recognised. A pilot study in one region, to examine these issues further, as the commission proposed, is one possible next step in pursuit of this objective. We are examining it carefully in consultation with the industries and the local authority associations.
The noble Lord, Lord Nathan, mentioned planning control. The new Town and Country Planning (Minerals) Act 1981 gives to county councils and other mineral planning authorities important new powers to protect the environment, and it applies to the NCB as well as to other mineral operators. In particular, the provisions of the Act will, when in force, make the reworking of old colliery spoil tips or other mineral waste tips a development requiring planning permission. The authorities will also have new powers to make it easier for them to impose up-to-date environmental conditions where the original permission was granted some time ago. In certain circumstances, the amount of compensation which authorities may be liable to pay when taking such action will be reduced. The Government are also looking at the provisions of the General Development Order 1977 in relation to the 1981 Act and, more generally, in relation to mining operations, including those of the coal industry. The general development order recommendations made by the commission in their coal study are being considered at the same time.
Where industries remain in the public sector, the Government are seeking to introduce the kind of disciplines to which the private sector is subjected. This is done, first, by imposing strict targets for financial performance designed to promote effective cost control within the industries and, secondly, by external scrutiny, including the use of the Monopolies and Mergers Commission under the powers of the Competition Act 1980.
In his opening remarks my noble friend mentioned these energy predictions. They are neither forecasts nor prescriptions for the future. Rather they seek to cover a wide range of possible outcomes to aid discussion of the energy options facing this country. The energy industries, too, can make an important contribution to this debate by indicating their intentions well in advance and putting their plans for new investment projects into a wider context. But the need for the industries to respond to market pressures means that
760
it is unrealistic to think in terms of an energy blueprint.
I realise that I have dealt only with some of the issues upon which the commission reached conclusions and, indeed, with some of the questions which have been raised today. The points made by your Lordships will, as I have said, be taken carefully into account in the Government's formulation of their full response to the commission's report. I should like to digress at this point. The full response will have to take a little time, but I hope I have indicated that action is already being taken on various sectors of this report, and will continue to be taken in advance of any full report.
I am grateful for all the contributions which have been made, and in particular to the noble Lord, Lord Kearton, for initiating the debate. While I have been unable to indicate the Government's final views, I hope I have conveyed to your Lordships the Government's conviction that the publication of the commission's report provides an opportunity, which is even now being seized, to act positively in striking a necessary balance between energy and environmental considerations in the further development of the coal industry.
6.46 p.m.
Lord Kearton: My Lords, in my closing remarks I hope to be brief. I should like to thank all those noble Lords, and particularly those noble Baronesses, who have spoken so eloquently in the debate. My noble friend Lord Flowers must feel gratified by the wide approbation his report has received. Everybody congratulates Lord Flowers. It is literally a report without price. It could be that arrangements should be made to price it at a much higher level than did the Stationery Office, and then to make arrangements for complimentary copies to be sent to the miners' unions and to all people who take a legitimate interest in this question—because the object of the commission, as has been stated, is to inform, to instruct, to guide and to put us generally on the right path.
In quoting from the report, I got the feeling that it had some of the characteristics of both Shakespeare and the Bible. Everybody found in it what they wanted to see. Some people found in it great encouragement for the coal industry in the future. In my opening remarks I seized upon some of the reservations and qualifications which the commission's report also included and which were touched upon by the noble Earl, Lord Avon, in his closing remarks.
It was a great pleasure to hear that very sturdy champion of free enterprise, the noble Earl, Lord Lauderdale, say that market forces alone were ridiculous as a motivation to get the best out of the coal industry and the best out of national resources. I thought his suggestions for the disposal of spoil by long distance pipe-line to estuarine and other sea areas opened up a rather interesting prospect, in which all the beauty spots I have been used to visiting for a great many years will, in the next few years, if Lord Lauderdale has his way, under Government control and Government spending be the scenes of extensive tipping of rather miserable spoil. So I hope the noble Earl's attitude regarding Government action is not necessarily followed.
In paying tribute to my noble friend Lord Flowers, the noble Earl, Lord Avon, put me slightly in mind

761
of the Secretary of State for Energy in another place paying tribute to Mr. Glyn England: that he loved Mr. Glyn England very much but he reserved the right to dispense with his services. I get the impression that the Government have taken the same line with Lord Flower's report. Utmost tributes have been paid, but in practice Lord Flower's commission is in abeyance. However, I got some comfort from the fact that the noble Earl, Lord Avon, said that it could be resuscitated. It is obvious that the general opinion of everybody who has taken part in the debate is that the commission should be resuscitated. There are many very important topics upon which it can speak.
I was rather alarmed when the noble Earl, Lord Halsbury, talked about living in an industrial slut's paradise. I certainly lived in an industrial slut's slum at one time. The noble Lord, Lord Wynne-Jones, mentioned that at one time I had the pleasure and distinction of working for ICI at Billingham where we used a lot of coal. That was some 50 years ago. The use of that coal made one village nearby, Haverton Hill, literally uninhabitable. The village had to be abandoned because of grit fall-out, fume fall-out and so on. I do not think that sufficient tribute has been paid to the fantastic work of the generating board of this country in recent years in burning 75 to 80 million tonnes of coal so cleanly, efficiently and effectively. It has been one of the great reasons why the pollution of our atmosphere has been diminished. We have kept up the coal burn, but we have at the same time enormously ameliorated the atmosphere.
I was very pleased that the noble Lord, Lord Molloy, who was not down to speak, did in fact speak. I think my acquaintance with the coal industry is probably even longer than his. I am much older. I was brought up in the coal mining industry. I remember the conical tips in an area of North Staffordshire where pottery was made in the old days by the old-fashioned coal-fired bottle kiln. One of the chief exports of the Potteries, apart from the most beautiful chinaware in the world, were postcards saying "This is the filthiest town in England", because all the smoke coming from the bottom of the kilns made the conditions so bad that for about 300 days of the year one could not see one's hand in front of one's face. So I have experience of seeing the dereliction which coal mining causes, but it was also a fact that unless coal was used in combustion under proper conditions it made life pretty intolerable for people who lived in the place.
I believe that most noble Lords who have spoken have the impression that the report of the noble Lord, Lord Flowers, is being taken most seriously by the Government. I was particularly pleased at some of the opening remarks made by the noble Lord, Lord Skelmersdale, when he said that the report showed enormous balance and that the Government intend to keep this balance in mind—a point which the noble Baroness, Lady Birk, also emphasised.
We must remember that the coal industry has a future so long as coal is produced economically. Coal had a major reprieve when the price of oil went up so abruptly in 1973–74. It had another reprieve when the price of oil went up in 1979–80. Until a year or so ago, everyone was forecasting that the price of oil would continue to rise in almost geometrical progression until the end of the century. This no longer looks so
762
certain, but I believe that those people who work in the industry have not perhaps thought beyond the fact that geometric increases in the price of energy may not come to pass.
If the coal industry is to be an industry in which people are proud to work, and in which they get proper wages and compensation, then coal must be produced at competitive prices. This means facing the closure of old, worn out collieries, which are a very high cost. The Coal Board has not disclosed the costs of coal from individual pits. We know that the cost of coal from various areas varies by a factor of more than 2:1, and so the cost of coal from various pits must vary by a much higher ratio. For the long-term prosperity of the coal industry, to keep inefficient, old and high cost pits working is a nonsense. Dealing with the human problems caused by the closure of these pits is a separate issue which all Governments must have very firmly in mind and do something about.
Going back to my childhood, I remember seeing miners in the streets with black faces and with clogs on their feet, getting up at unearthly hours and coming home at unearthly hours—and being pretty poorly paid. As a young man, I went down a number of mines all over the place—some deep pits, some mucky pits, some wet pits and so on—and it left me with an admiration for coal miners which I find difficult to express. The noble Lord, Lord Molloy, made the point that 50 or 60 years ago it was commonplace for mining mothers to say, "It will be a good day for England when there are no more coalmines". We must have a modern coal-mining industry if we are to provide wealth from the natural resources of this country.
The noble Lord, Lord Nathan, was perhaps modest in not mentioning the fact that he started this whole ball rolling in 1973 with his report on energy and the environment, which was a seminal report and one which everyone in the energy field remembers with respect and admiration. The noble Lord picked out the idea of combined electricity generation and the provision of steam for district heating as something which the report touched upon and advocated. I myself thought the report was very cautious in that respect. The report felt that there were some specialised cases where there could be an application for this, but that because of the particular conditions in this country, it was unlikely to find very wide adoption.
The summing up by the noble Earl, Lord Avon, was extremely constructive, thorough, detailed and most helpful. The noble Earl, on behalf of the Government, obviously took on board this very severe problem of spoil. As has been mentioned, the amounts of spoil which are going to be produced in the next 20 years look like being 50 per cent. more than the spoil produced in the previous 200 years. It is a major problem and it will not just go away.
I though that the noble Earl, Lord Avon, was a little too complacent about subsidence. In the debate in another place some two months ago, there were graphic descriptions of the effect of subsidence in certain areas of Yorkshire. My own recollection is that one whole new estate of some 200 houses had to be virtually abandoned, and the general anguish, discomfort and worry due to subsidence caused to people living in such areas is something that both the coal industry and the Government have to take very

763
seriously. Having given that slight caveat, I must say that I am deeply grateful, as I am sure everyone is, to the noble Earl, Lord Avon, for his most constructive and helpful summing up of what the Government intend to do. We all look forward with the greatest interest to the definitive proposals which we understand will be coming out of the Government quite soon. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Anglo-Chinese Relations
6.55 p.m.
Lord Rhodes Lord Rhodes rose to ask Her Majesty's Government whether, in view of the recognised importance of relations between the United Kingdom and the People's Republic of China, they will support the maximum exchange of views between the two countries at all levels.
The noble Lord said: My Lords, I have tabled this Question with the object of airing how best we can help China to realise what she has set out to do, and to help ourselves at the same time. I hope that nobody in your Lordships' House imagines that I am setting myself up as an expert on China, because I am not. I am just a humble student of what is going on in China, having had the opportunity to establish links which otherwise might not have been established. During the past five years there have been four British parliamentary delegations to China. Three of them were organised by me and were financially supported by my friends—all because I once overheard a remark by the then Chinese Ambassador to Britain, when he said that Great Britain was ostentatiously absenting herself from China. My purpose in this connection is to try to remedy an omission.
No official funds were available because the Chinese were not members of the Inter-Parliamentary Union. Then the Chinese promised to join the Inter-Parliamentary Union, so it was possible to send a delegation from the Inter-Parliamentary Union this spring. The first delegation I took was at the time when Mr. Deng Xiaoping assumed power following the death of Chairman Mao. For 11 years Chairman Mao had fought an ideological and moral revival under cover of the Cultural Revolution. This was a failure. As an example of its barrenness, not one single medical doctor qualified in China during those 11 years. The situation now is not one of ideological and moral renewal; the question is, can a communist regime reform itself? Can they cut out the bureaucratic deadwood and corruption? Can they counter the mood of hopelessness among their young people? Can they reform the structure of their Government so that the left hand knows what the right hand is doing?
An attempt is being made to solve these and many other problems by a new constitution which will receive the sanction of Congress in the autumn. Let me just set the scene briefly. In 1977–78, after the Cultural Revolution ended, orders were placed for large, complete plants which were unrealistic. The Chinese then adopted more practical policies and, being cautious about involving themselves in too much international debt, and also conscious of their shortage of managers,
764
they naturally had to cut back. I am afraid that British industrialists over-reacted to China's readjustment compared with the French, Germans, the Americans and the Japanese. Experienced traders see in China better opportunities ahead for regular and profitable trade. Despite the fact that the number of complete plants China has ordered is reduced, there is wide scope for medium-sized and smaller deals in specialised equipment and in requirements for the modernisation of large numbers of China's 350,000 factories. Here surely there is an opportunity for our middle-sized companies searching for export business.
We have been debating coal today. China mines 600 million tonnes of coal a year, the United States 968 million tonnes, the USSR 670 million tonnes. Plans are going ahead in China for increasing that by 20 million tonnes a year and this should mean repeat business for our manufacturers of mining equipment. For a long time many of our telecommunications companies, aircraft components and systems companies have had good relations with Chinese operators, and although we are well down the list in the league table of countries trading with China there is no doubt that Chinese leaders are eager and keen to expand trade with us. And there is a need above everything else to keep a grip on the Chinese market.
My first point is a minor one, but important, British Government representation in China, While we are well represented by Sir Percy Cradock and his staff in our embassy in Peking, there is no consular service elsewhere and I am convinced that we need a consul-general in Shanghai. Of all the regions in China, Shanghai people are the toughest and most sophisticated. This arises from long experience as traders with the rest of the world. Many of the most successful Hong Kong managers originally hailed from Shanghai. Enormous trade is transacted there. The Peking administration admits these facts and handles Shanghai matters with their gloves on.
It would be helpful to traders in China and the North of England if a consul-general for China could be appointed with an office in Manchester. It could be staffed at its inception by a British national working on a voluntary basis, as many regional consuls do in this country. If this idea were to take root, I would help to establish it.
My next point is a big and important point and the Government would do well to take special notice of it. It is to do with COCOM, which is the co-ordinating committee for NATO which has to do with the licensing of strategic goods. It is an anachronism which calls for reform; misapplication of export controls to China, who for this purpose is treated as a member of the Eastern bloc. What are we doing in thinking about China being a member of the Eastern bloc any more when in point of fact 51 Russian divisions are held down on the borders. These are friends of ours. It may have been necessary in 1957 when it was first applied but surely it makes no sense today. Politically we have to regard China as a friendly nation. According to evidence given by John Holdridge, the United States Assistant Secretary of State for East Asia, he corroborates my statement that 51 Soviet divisions are pinned down on the borders of China. Why cannot we give China the same treatment as we do to other friendly nations? Indeed, only this month the Reagan

765
Administration has been to Congress to alter its status in America. Well, we do not want to be behind. A change of heart has taken place there.
I have been told by British manufacturers that COCOM is used by United States representation to deny access for everybody else to the China market. COCOM is a bureaucrat's paradise and there is evidence available of its incompetence. Some of the most glaring examples stem from the scientific instrument exhibition where China ordered instruments which took over 12 months before they could get sanctioned through COCOM.
My next point is a small one, but important. We expect our Prime Minister to go to China in September She is highly regarded there and she need have no qualms whatever about being well received. But I think it would go down very well with China if she were accompanied by our Foreign Secretary. If this could be arranged, it would be regarded as a great compliment by his opposite number, Mr. Huang Hua, and it would go a long way towards establishing a basis for future discussions about Hong Kong.
My next point is another important one, and I hope that this will be enlarged upon by my noble friend Lord Bowden who I notice sitting on the Back Benches. Technical assistance has been going on for some years. Experts from British manufacturers, under the auspices of the 48 group, have built up a technical exchange programme which has incorporated universities and national research institutions. The companies who have taken part in all this naturally have benefited, but the Chinese, too, have a better appreciation of our technology as a result. But there are problems because money is short and private people have to cut back just like Governments have to cut back. The Royal Society has helped, but generally speaking there has been a cut-back from private sources, as I said before. Surely here is an urgent case for Government assistance.
Allied to this there is another important factor. Our competitors in the United States and Europe, and of course the Japanese, are doing more than we are in taking bright young Chinese into their factories for training, and this is another area that would do nothing but good. Here I want to pay a tribute to our new recruit to this House, Lord Kadoorie, because if it were not for him there would be another 2,000 unemployed in Manchester. We are fortunate in this House that we have him at hand to give us advice about the goings-on in the Far East because he is the doyen of men who have Far Eastern knowledge.
I want to say a word about credit facilities. At the end of 1978 seven British banks, with the backing of ECGD, put up a total of 1,220 million dollars to be made available for Chinese importing agencies. No more than half of that has been taken up. But it is interesting to know that during the last month the senior executives of the Bank of China have been advising Chinese departments and enterprises to make use of buyers' credits because the interest rates are lower than those in the market. This is a major change from what transpired only a few months ago. It would be well for our manufacturers to take note of this.
As we know, Japan has given, through its economic co-operation fund, massive long-term low interest
766
loans to China to fund the building of six ports and railway lines to haul coal to the coast. The Belgians in 1980 granted China a 30-year loan, interest free for the first 10 years with repayments and charges spread over the remaining 20 years. This was for a 240 million dollar contract for power station equipment. More recently the Government of Denmark and the West German Government have also entered into substantial contracts for container ships et cetera. Would it not make economic sense if we could possibly manage to see to it that there was a soft loan directed to specific parts of our engineering and telecommunications industry to keep people at work?
Some times I think that we are prisoners to the present, that we are so pushed around by day-to-day happenings that we do not have time to think about what will happen five, 10, 15 or 20 years hence. We are short of visionaries, we are short of people who can think about what is likely to happen. This short-term thinking will lead us into very serious trouble apart from the Falklands and all the disruption and violence that goes on. If we think anything about our country in the years ahead, we surely must be thinking in terms of China.
Finally, in a long life I have come to the very clear conclusion: never pull anything down until you know what you are going to put up in its place. That bit of advice would be well taken by China, too, in its dealings concerning what the British have done in Hong Kong. I leave it to others who know more about it than I do to discuss this subject. But let me say that getting on good terms with a 1,000 million people cannot be wrong.
7.13 p.m.
Lord Mackie of Benshie: My Lords, I must start with an apology to the House in that I foolishly mistimed the start of this debate and I may have to leave before the end, in which case I shall read what the Minister says with enormous attention in the morning. However, first I should like to say how grateful we should be to the noble Lord, Lord Rhodes, for initiating this debate which he has done with his usual skill, leaving the terms so wide that we can talk about anything. I would like also to express my personal great gratitude to him for taking me to China three times. I am not quite sure why he did so, but I think it was because I was an object of great amusement when we went to places, and little girls who were very neat and tidy would look at this figure and suddenly politely cover their mouths with their hands and giggle quietly, calling on others to look at this curious British specimen who had been brought over there by the noble Lord, Lord Rhodes.
Lord Stone: You should have had your kilt on.
Lord Mackie of Benshie: My Lords, even without my kilt they considered me extremely impressive.
Lord Bowden: You were an English peasant.
Lord Mackie of Benshie: Indeed, my Lords, However, my gratitude to the noble Lord, Lord Rhodes, is really very deep because China—as it did to all of us—made an enormous impression upon me. The

767
first time that we crossed the famous bridge and got into a train and travelled throughout that country, my farmer's eye was wholly delighted. I have never in all my life seen stretches of country so well farmed. I have seen other tropical agricultures since, but they do not compare with the way in which that land is handled. It is handled with the dedication and hard work of generations past which had a profound effect on me and made a profound difference to my thinking about the Chinese people.
Something else that impressed me was, of course, the Chinese people themselves, from the very able young diplomats who took us around, to the managers we met, to the professors, to the people in the fields and to the squads who were threshing the grain with flails—they were most amused when I tried to flail, and I am sorry to say I did not make a very good job of it. They were tolerant and they were nice. I never heard any Chinese man or woman tell me the honest truth; they were civilised and people of high culture when my ancestors considered wood as the most advanced thing they had ever seen.
But the whole civilisation is extraordinarily impressive, and, without any doubt, when the noble Lord Lord Rhodes, says that it cannot be wrong to get on good terms with 1,000 million people, I would add that it cannot be wrong to get on good terms with 1,000 million nice people. It is very important for one to get on with and like the people with whom one is dealing, and in the case of the Chinese, having been to that country only three times with the noble Lord, Lord Rhodes, there is no doubt that that was the case for me.
If we are to help, perhaps we should individually talk about some aspect that we know. I have obviously studied agriculture. Quite apart from admiring it, I was also critical of many of the factors we saw. There are something like a 1,000 million people in the country and about 800 million of them live in the countryside and a very large number of them in the communes actually work on the land, the majority attending it with a garden-like care. Of course, they want to progress from that to producing more with fewer people. I do not think that they should progress too fast because it would be very difficult to match the intensity of the agriculture and the production of food per acre with any mechanised system.
They have vast areas of grazing land. The land is as different as chalk from cheese. They have land which is like our Scottish highlands, only subject to a much worse winter. They have land which is like the grazing land of Texas, where the strong sun after the rain preserves the vegetation in a form of hay. All of that is there to be developed. It is all there to be mechanised and to have water led to it. They can still extend further their amazing irrigation schemes, which are not confined to the river beds and the land alongside the rivers. They pump in water to the tops of hills. We saw a commune there right up on top of a hill with a marvellous view; the state had provided the machinery; the commune members had installed it; and right up on top of this hill they were growing fruit trees which were coming into fruit, and more and more fruit was being sold every year. All over China different developments of this kind are going on. This is an
768
enormous industry which is advancing and which needs a great deal of help. The Chinese are willing to accept help if it is of the right sort.
The criticism that I would make to Her Majesty's Government is that we are not going about this in the best way. I know that the British Agricultural Export Council has been to China and has taken people out there from different firms and different breed societies; I know that they have sold a number of machines, cattle and pigs and so on to China. But I suggest that we need a much more co-ordinated approach. I believe that this should be done by a body of people —not a very large one—based in Hong Kong. In the Department of Agriculture in Hong Kong you have an extraordinarily efficient body which has done the right thing for Hong Kong. It has been greatly assisted by the Kadoorie family, whose institute has produced the kind of pig that they need in Hong Kong, which is an open port trading freely with the world and cereals can be brought in to feed the pigs. The pigs that they have produced there live in a hot climate and thrive on the sort of food available.
In China, as near as we could guess, there must be at least 300 million pigs—I could not count them. These pigs eat a lot of food, but much of the food they eat in China at the present day is like weed, waste and so on, and this is why they are ugly looking pigs with large bellies. But, if they are replaced with a sophisticated pig which eats grain, China would need to import some 50 million tonnes of grain or some impossible figure like that. That is why I think we need a small institute, based in Hong Kong with branches in China, which could study the long-term needs of Chinese agriculture, which would come to be trusted by the different states and the different systems that need it, and which could advise and guide our manufacturers and our breed societies.
In my visits to the Hong Kong Department of Agriculture, they told me that hardly ever did a British exporter go near them. Americans frequently came to see them. Attached to the American Consul in Hong Kong the Americans have a Department of Agriculture Official who is there specially to advise on the needs of Chinese agriculture and to help their exporters. I cannot but think that it would be money well spent to set up a practical body like this in order to look at the long-term future and association with this enormous and vital industry of agriculture in China.
I could go on for hours, but I think that I might become slightly unpopular. This is a very important subject. I believe that the small part that I have played in this debate drawing attention to agriculture is important. Agriculture is certainly very important in China and I should very much like the Minister to take serious note and a serious view of the problem.
7.24 p.m.
Lord Kadoorie: My Lords, during my maiden speech last October, I spoke of Hong Kong's unique value as a neutral point of contact between East and West, of Hong Kong's value to China and of Hong Kong's importance to Britain. On this occasion I make no apology for speaking again of these matters, for they are vitally important to the United Kingdom, to China

769
and, of course, to all of us, the 5 million people living in Hong Kong.
The Hong Kong of today is, as I have said, a neutral point of contact between East and West: it is also a "service station" which enables China to regulate the flow of expertise required to fuel its Four Modernisations programme. The relations between China and Britain and China and Hong Kong are excellent—indeed, better than at any time I can recall. And it seems to me that full advantage should be taken of the present favourable climate.
Hong Kong's greatest strength lies in its economy and, to a considerable extent, in the facilities and expertise it can contribute to China's Four Modernisations. It is this mutuality of interest which must be encouraged, as upon this depends the confidence of local and international investors, so essential to good relations between Peking and London, and consequently to Hong Kong.
It must not be forgotten that the cultural revolution placed a virtual moratorium, lasting 10 years, on China's development, a time period which is all the more important in these days of rapid change. The determination of the People's Republic of China to make up for lost time creates an obligation and presents a unique opportunity both to Hong Kong and to the United Kingdom to participate in this endeavour.
Today, Great Britain, through Hong Kong, is being asked to provide management skills and the western technology necessary to assist China in its development programme. This is a grand opportunity which surely should not be missed; an opportunity for British industry and management to embark on joint ventures in China—to our mutual benefit.
Enterprises with China must be based on mutual trust rather than enforceable contracts, which made for difficulties for conscientious lawyers and accountants. And this "joint-venturism" unquestionably can best be carried out through Hong Kong, using local expertise and experience. Hong Kong is truly the gateway to China, as well as the gateway to South-East Asia.
In this connection, a new factor has arisen in that China has now established a number of special economic zones, by far the most important of which is that at Shum Chun, just cross the border from the New Territories. China's plans for this particular zone are ambitious. Basic facilities, including water, electricity, land and sea transport systems, as well as communications systems, will be completed shortly. Already some 1,000 joint venture deals have been concluded in the Shum Chun Special Economic Zone, of which three-quarters are being financed and managed by Hong Kong companies. Development is proceeding apace but this is only just the beginning: it is planned that by the end of the decade the population of the zone will number 350,000.
Adjacent Chi Wan Bay is to become a supply base for oil exploration in the South China Sea, with its first oil rig to arrive this year. To use a mechanical simile, one may compare this industrial zone to a machine where the gear wheels of industry have just started to turn. In the New Territories, the motors run faster and it is necessary for those in the industrial zone to be accelerated so that the transmission can mesh smoothly and avoid any crashing of gears.
In view of the importance of Hong Kong's unique
770
position as a neutral point of contact between East and West, great care must be taken in the United Kingdom not to underrate the need to maintain and encourage that friendship and goodwill—built up over so many years—which bind Hong Kong's citizens to Great Britain. There is good reason for saying this, for I believe there is too little recognition in this country of Hong Kong's value to Britain. During the past few years orders from Hong Kong have created or protected, thousands of jobs for British workers. The shipyards of Scotland and the North-East, the electrical engineering factories of Lancashire and the heavy engineering works in the Midlands have benefited substantially from Hong Kong's predisposition to "Buy British".
When we planned the biggest power station in Asia it was to Britain that we looked to provide the generating plant—orders which, over an eight-year period, will amount to £2 billion and will provide some 7,000 jobs in the Midlands and the North-West. In the last two years Hong Kong shipowners have ordered 19 ships from British shipyards. We have spent over £400 million on British-made underground trains, locomotive and electrical installations; and Hong Kong's airline, Cathay Pacific Airways, has bought over £100 million worth of Rolls-Royce engines for its aircraft. Indeed, Britain exports to Hong Kong more than it does to Japan, or to India. It exports about two and a half times as much as it does to China. In other words—and astonishingly perhaps—Hong Kong is already Britain's best market in Asia.
Hong Kong is also the world's biggest exporter of garments, of watches and of toys: it has the third busiest container terminal in the world, which is second to none for speed of turn around. And it is also the third most important financial centre in the world after New York and London. Little wonder that people sometimes talk of the "Hong Kong miracle". I state these facts today, not to boast, but to underline the fact that Hong Kong's industrial revolution is still less than 30 years old. And yet, a generation after it took the first halting steps to find a new economic role, it is still the people of Hong Kong who are the key to its success.
The younger generations have inherited from the pioneers of the 'fifties their willingness to work, their enthusiasm to get on, to succeed. But if this spirit is to continue to flourish there must be hope for this younger generation that there will be a future for them; a future in which their hopes and aspirations will be realised. It is Hong Kong which provides the interface between the Occident and a quarter of the world's population—that is, China; destined, perhaps, in the next few years to become the axis upon which the world's most powerful countries will balance. In particular, the United Kingdom should remember that the goodwill between Great Britain and Hong Kong must be encouraged and not be put to too severe a test. I have in mind, in particular, the EEC/Hong Kong textile discussions which will start soon in Brussels.
Last year Hong Kong people were much concerned over the passage of the Nationality Act: and the harm that that did to good relations must not be underrated. I hope now that Britain—as a member of the Community—will do all in its power to protect Hong

771
Kong's interest. After all, we must export before we can import: and so, if our importance as a market for Britain—indeed Europe—is to continue, we must retain access to our own major export markets.
Hong Kong believes in, and practices, free trade: it should not be regarded as a problem, but as an opportunity. If, then, Hong Kong is to continue to fulfil its present function as a neutral point of contact of benefit to both East and West, great care must be taken lest, due to a short-sighted policy, we create a situation where the liens of friendship, established over 150 years, are allowed to lapse and this British outpost in Asia to become a dead city buried in the pages of history.
7.36 p.m.
Lord Geddes: My Lords, not only are we all in your Lordships' House extremely grateful to the noble Lord, Lord Rhodes, for putting down this Unstarred Question but, really much more fundamentally, are we grateful for the untiring work that the noble Lord has put, and continues to put, into the whole subject of Anglo-Sino relations. Many noble Lords who have spoken, or indeed will speak tonight, took part, as I did, in what I think was the last debate on this subject instigated by the noble Lord, Lord Rhodes, in December 1978. On that occasion there were 18 speakers during a five and a half hour debate. Perhaps thankfully, there are slightly fewer noble Lords down to speak tonight, but their quality, not least that of the noble Lord, Lord Kadoorie, is in no way diminished. That is surely right and proper on a topic that is certainly of as much importance today, if not more, as it was three and a half years ago.
The noble Lord, Lord Rhodes, was kind enough to include me in his second delegation to the People's Republic of China in October 1979. Like the noble Lord, Lord Mackie of Benshie, I benefited enormously from that experience. In fact, in total I personally have now paid five visits to the People's Republic since 1977, and each time my views are reinforced. China is vast, both geographically and in population. There can be no doubt therefore, as has already been said and I am sure will be said subsequently, that its potential is equally vast. But, with the greatest respect to my Chinese friends—and indeed as the noble Lord, Lord Rhodes, himself has already said—there can be no doubt that the 10-year period of the Cultural Revolution at the very least retarded China's progress; a situation now slowly but surely being rectified through her programme of the Four Modernisations.
I make no apology for saying again that the potential is vast, awesome in power, and it is latent. China shows every sign today of encouraging outside contacts, a trait that I think we should do well to remember is very new in her enormously long history. Surely then it is in all our interests, both Chinese and British, to give maximum possible scope to exchange of views, be they political, economic. sporting and/or cultural, between our two countries, which must, as the noble Lord, Lord Kadoorie, has just said, include Hong Kong, in that Hong Kong has a foot in both doors.
Certainly my noble friend Lord Belstead—who, if I may, since I have not had the chance to do so before, I should like to congratulate on his changed and elevated
772
status—will not, I think, be surprised at my making reference to Hong Kong, as Hong Kong is, if I may so describe it, a unique slice of salmon, surely the noblest of fish, in this delicately buttered sandwich.
The current excellent relationship between the United Kingdom and the People's Republic of China—and it is still excellent, despite recent reports of Beijing's adverse reaction to the Falklands situation—owes a great deal to the presence of Hong Kong, and particularly to the efforts of the recently retired governor, the noble Lord, Lord MacLehose, to whom we all wish a speedy recovery and whom we all equally very much look forward to welcoming to this House.
Despite Hong Kong's relative lack of progress in the Nationality Act, nevertheless Hong Kong is British. Like the Falklands, Hong Kong is a British dependent territory and its passport-holders surely have the status of British nationals—not citizens, which designates rights of entry and/or abode, but nationals—and I make no apologies for bringing that point again to your Lordships' attention, as the role of Hong Kong in Anglo-Sino relations is of extreme relevance and importance; 40 per cent. of the foreign earnings of China come through Hong Kong.
I have deliberately mentioned the Falklands in two instances—Anglo-Sino relations and the nationality of British dependent territories' citizens—and other than in those two instances, I do not consider (indeed, I go further and say I have no truck with the argument) that there is any parallel between the present Falklands situations and Hong Kong. The noble Lord, Lord Kadoorie, described Hong Kong as a service station. It performs a role totally different in Anglo-Sino relations and is totally different from the position which the Falklands Act occupies. It must be a close run thing as to which, of the People's Republic and Hong Kong, with their existing status, benefits the other more.
The problem, if indeed it is a problem, is the termination of the New Territories Lease in 1997. Beijing has said it is not a problem and that Hong Kong need not be concerned. Personally, I have absolutely no doubt that that is, and will continue to be, a bona fide statement. However, much play has been made that in July of this year Hong Kong will be within the I5-year barrier. While I do not subscribe to the paramount importance of that 15-year period, nevertheless it must be in the interests of China, Hong Kong and the United Kingdom that there be a resolution of the future status before too long, thereby maintaining the essential confidence of, and within, Hong Kong, which, again I submit, is as much in Beijing's interest as it is in London's. The more exchange of views there can be through and around the triangle of the United Kingdom, the People's Republic of China and Hong Kong, the better for all concerned. It is not easy to make good friends at the best of times. It is well nigh impossible if you have hardly met before.
Reference has been made in the past, and I am sure it will be tonight, to educational exchanges, and I warmly support any such concept. Indeed, artistically I will, if I may, use the forum of your Lordships' House to relay this evening an invitation from the Aldeburgh Festival to the Director of the Shanghai Conservatoire of Music to visit, and perhaps lecture or perform at, Aldeburgh. As I said in my part of the report following the October 1979 delegation to China, senior

773
management in the People's Republic knows that it has to combat the educational gap created by the Cultural Revolution, which has resulted in a serious middle void. As an over-simplification, its managers, technocrats and artists are either over or under age.
As to Hong Kong—continuing my triangular theme —I again make a strong plea to the Government regarding educational home status for British dependent territories' citizens. Your Lordships will be aware that a report has been commissioned from the Overseas Student Trust on this question. That report, headed by Professor Peter Williams of London University, is expected shortly. What its conclusions and recommendations will be of course I know not, but I hope my noble friend Lord Belstead will not mind my pointing out to him a potentially curious anomaly.
Negotiations are presently in hand with a view to Portugal's entry into the EEC. EEC students are, I understand, educationally, given home status in the United Kingdom. Macao, just across the Pearl River from Hong Kong, is an associate territory of metropolitan Portugal. Thus, unless students from Hong Kong are given United Kingdom educational home status, the situation could arise where, for an identical year's course in the United Kingdom, a Hong Kong student—a British dependent territories' citizen—would pay anywhere from £2,000 to £6,000, whereas his opposite number from Macao would pay only £400, surely a manifest absurdity.
Three and a half years ago, in a debate initiated by the noble Lord, Lord Rhodes, I deliberately concentrated my remarks on China and referred to Hong Kong only in passing. On this Occasion, if only to redress that balance, I have equally deliberately concentrated on Hong Kong to emphasise the point that in any discussion on Anglo-Sino relations, Hong Kong is a vital link. Our relationships with the People's Republic becomes more important by the day, and the only way to build up a good relationship is to gain the crucial elements of trust and understanding between two great peoples of such differing political, cultural and educational backgrounds. I warmly applaud the tremendous efforts of the noble Lord, Lord Rhodes, in that context, and sincerely hope that my noble friends on the Government Front Bench will pay close heed to what he and other noble Lords are saying this evening.
7.48 p.m.
Lord Bowden: My Lords, I wish to begin by thanking the noble Lord, Lord Rhodes, for initiating this debate and making it possible for us to discuss what is a remarkable and important subject. Particularly I wish to express my thanks, and I am sure the thanks of the whole House, to the noble Lord, Lord Kadoorie, for the wonderful account he gave us of the achievements of Hong Kong, of which he is such an important citizen. We in this House are privileged to have him among us. We welcome him whenever he cares to come to see us and we realise the enormous influence he has in his home country and the tremendous help he has given to the fostering of trade between Hong Kong and this country.
This is an important debate because of the enormous importance to the world, and particularly to ourselves, of our connections with China. When I was a student at Cambridge 50 years ago, I met a Chinese scholar, a
774
physicist, who was working in the labs with me and we talked together quite often. He said to me, "Throughout recorded history, for 3,000 or 4,000 years, China has led the world in science, the arts and manufacture. There have been a few periods in which other countries have temporarily taken the lead, and we are in one of them now. But", he said, "you will probably live to see the day when China reasserts her position as the leader of the world in many of the most important subjects in art, in science, and in manufacture". I have never forgotten that.
He went on to tell me that when the tea clippers used to go to buy tea and race home every year—as your Lordships might recall—they could not export goods for the tea. We had to pay in gold because there was nothing that England could then make which the Chinese could not themselves make as well or better. So if it is believed that Chinese industry is backward, it must be remembered that it is a very temporary situation and it is unlikely to persist for long. The Chinese have an immense tradition of very great technical skill, and those of their people whom I have met—I met them only once when I was with the noble Lord, Lord Rhodes—seemed to me to be as competent, as intelligent, and as industrious as any men whom I have ever met in my life.
Since the subject of cultural contacts and in particular educational contacts have been mentioned, I should like in the brief time for which I think I should speak to concentrate on that. I am very glad that the absurd situation about the possible preferential treatment of students from Macao as compared with those from Hong Kong has already been raised. This seems to me to be outrageous. I should like to speak for a few moments about my own experiences when I was in the University of Peking with the noble Lord, Lord Rhodes. First of all it became obvious to me that the Chinese had, for the time being at least, an exaggerated impression of the importance of some of the work which was being done in England. They said to me, "We ought to have courses in industrial management, like yours, and like those at Harvard, for example". I said, "About a thousand years ago an emperor of China deployed a million men to take a canal over a range of mountains from the Yangtse to the Yellow River. These men had to be deployed, fed, housed and provided with tools, the site had to be surveyed, the work had to be organised, and this was", I said, "as great an exercise in large-scale management as the world has ever seen. What can we tell you? You have known it for a thousand years. You should", I said, "rediscover your own achievements, analyse them, and tell us".
Then we got on to the subject of inflation and it became obvious that they had managed to keep down inflation from 1951 to 1971 (the years for which they had the figures) to a total of 2 per cent.—2 per cent. altogether over 20 years. We have been averaging, 5, 10, 15 per cent. throughout that time. How have they done it? Well, they had in effect indexed the Yen to a very simple index based on only five commodities. They were, rice and millet (which are their principal grains), cooking oil, fuel and cotton cloth. No self-respecting economist in the West would dream of using so crude an index as that upon which to base the value of the currency; it is ridiculously inadequate. On

775
the other hand, no western economist has ever had to try to stabilise the value of money over an area, and for a population, as great as that of China where, as the noble Lord, Lord Rhodes, has already reminded us, there are more than 1,000 million people. They are doing a very complicated and very sophisticated job in an extremely simple way. I said to them, "You should study your achievements, and tell us more about them".
The question then arose of the future of Chinese industry. I said to them, "You have an example of the most sophisticated developments of manufacture in the whole wide world on your doorstep in Hong Kong. You can study that. There is very little that we can tell you. In fact we would like to learn ourselves how the people in Hong Kong have been so triumphantly successful and have outclassed us". I went on to say, "China has many examples of achievement on her doorstep which we would do well to emulate and which you yourselves can study and report on for us".
However, there was one thing which they wanted to study which obviously they did not have—computing and computers. They were using a very crude series of machines which we might have had 20 or 30 years ago. Soon after I returned home a friend of mine went out to give some lectures. He said that he had audiences of hundreds and hundreds of students, all anxiously trying to learn, and it was perfectly evident that they would like to study the subject, either with the help of western lecturers or by coming to England.
We then got on to the question of the extreme difficulty that the Chinese now have in paying the fees of students back home in England. The ordinary fee that is charged to a Chinaman is about equal to the sum of money which two or three familes would have to live on throughout a whole year. I think it is most important that we should try to help them in whatever ways we can, but that we should very humbly sit at their feet and learn from them the things that they can teach us because of their enormously long tradition and their experience of subjects so numerous and so different.
It turns out of course that it was the Chinese who first had printed money. It was they who discovered that if you print too much money, prices go up. It was they who discovered that if prices go up too much, it causes unrest and social catastrophe to such an extent that one of the worst periods of inflation that they experienced after having printed too much money was so awful that the peasants had to sell their children as slaves in order to keep body and soul together. That gave them a feeling that inflation must at all costs be cured, and that you must not print too much money. All of these things are deeply rooted in the Chinese tradition. They understand these things, and there is very much that they can teach us about things which concern us, and some of which we are still struggling to understand.
The noble Lord who spoke about farming did something like justice to the extraordinary beauty of the countryside. It is due to the fact that the Chinese are concerned not so much with the total product per man, but the total product per acre. They are prepared to use more people if the same land can thereby be made to yield more crops and in some parts of China
776
they get as many as three or four crops out of the same piece of soil in a year. They are fully aware of the fact that unless they maintain their tradition of farming, and if they were very greatly to mechanise their agriculture, the problem of coping with the then unemployable young would pass their capacity, since after all there might be several hundred millions of them. Their problems are on a scale that is enormously larger than anybody else's and they seem to me to show the most extraordinary good sense in the way in which they are tackling them.
In terms of their political alignment it is true to say that they fear the Russians and that they are very much more on our side than they are on the side of the Russians. They are, I believe, well disposed towards us. It has always been my experience, in speaking to the Chinese, that they have the same basic processes of thought that English people have. In other words, they are empirical. They are not philosophers, in the sense that we are not. They do not go in for any sophisticated abstract process of reason, but they do have the same empirical, sensible approach to long-term problems that we like to think we have. They are an enormously cultured, cultivated and sophisticated people.
They are a quarter of the population of the world. They have it in their power, I suspect, to become leaders of the world in many ways within the not too distant future. It would be most extraordinarily foolish of us if we did not seize all the opportunities that there are and make the most of the chances that we now have, thanks to the enterprise of, among many other people, the noble Lord, Lord Rhodes, and thanks also to the help which has been given through Hong Kong by the noble Lord, Lord Kadoorie. To speak briefly about China is absurd. Nevertheless, one must be brief. But the hour is late and the opportunities are great. With that observation I think I had better finish.
8.1 p.m.
The Earl of Bessborough: My Lords, with other noble Lords I am most grateful to the noble Lord, Lord Rhodes, for putting down this Question for debate this evening. Whatever he may modestly say about himself, I think I am right in saying that apart from the noble Lord, Lord Kadoorie, he is as knowledgeable about China as any other noble Lord in this House. I liked what he had to say, particularly about longterm thinking. This seems to me to be essential, and it should be central to our economic policy vis-a-vis the People's Republic. I agreed with him, too, that surely 1,000 million good Chinese cannot all be wrong.
The noble Lord, Lord Rhodes, has visited the People's Republic several times. I have not been there since I went there as a Member of the European Parliament and was in Peking at the very time of the return of Deng Xiaoping. That was an exciting time, and the enthusiastic celebrations in Peking, lasting for some days, had to be seen to be believed. I think that since the return of Deng Xiaoping the prospects of an understanding and of greater economic co-operation between the Western European countries and the People's Republic have been more promising, but it all takes time.
I am sorry that the noble Lord, Lord Kennet, who

777
put his name down on the list of speakers for this afternoon, has not in fact spoken in this debate, since, with him, I took part in a debate in the European Parliament in March 1979, and I said then that I agreed very much with what he had said on the subject of the trade agreement which was signed by the European Community and the People's Republic on 3rd April 1978. I also agreed with what he said about buy-back projects, and about the prospects for further buy-back projects. It seemed to me at the time that this trade agreement was of great importance, and I know that it was welcomed by the People's Republic, whom I sometimes think are even more strongly in favour of a truly united Europe, economically as well as militarily, than perhaps we are ourselves. We can well appreciate the reasons for this; and the noble Lord, Lord Bowden, has just indicated them.
I feel it is not inappropriate, since Her Majesty's Government in the United Kingdom are members of the European Community, one of the very largest trading blocs in the world, for me to ask my noble friend Lord Belstead (whom I, too, should like to congratulate on his elevation to the Foreign and Commonwealth Office) what the position is in regard to this EEC-China agreement, as I think we should support not only a maximum exchange of views between this country and the People's Republic but also between all member states of the European Community and China.
I should particularly like to know whether the Joint Committee working parties in different industrial sectors have now been set up within the terms of Article 9, paragraph 3, of the EEC-China trade agreement; and in that connection I would not hesitate to refer your Lordships to what I said in my Motion on the European Communities and China in a debate on 30th November 1977. I would not vary one single word of what I said then. Lord Mackie of Benshie spoke of co-ordination on a national basis. I believe this should be extended, so far as is possible—and it will be within certain limitations—to the EEC in various industrial sectors, and not only in connection with the students, which my noble friend Lord Geddes mentioned.
I will not go into all the detailed points which I made in the debate in 1977 and on subsequent occasions, both in your Lordships' House and in the European Parliament, but I should be interested to know whether my noble friend Lord Belstead has anything he feels he can usefully say this evening on the progress which the Commission, and I think particularly Commissioner Haferkamp, may have made in implementing the terms of that agreement.
I should like to join with other noble Lords, I am sure, in saying how much we must all welcome the appointment of Sir Edward Youde as a most able successor to that admirable governor of Hong Kong, Sir Murray MacLehose. When I was in China Sir Edward was then the ambassador, and I know what an admirable job he and his staff did in our embassy. I had with them long discussions on industrial development in China, having visited the principal industrial areas in Heilungkiang and other parts of Northern China, as well as the famous Taching oilfields, which of course export oil to Japan.
Your Lordships will have seen that China has
778
now promulgated the oil exploration blocks she is intending to develop, and has called for tenders. It is very encouraging that the People's Republic has also given assurances about the settled nature of her policy towards foreign businesses. I understand that some British oil companies have put in bids; and, of course, I would add that British expertise in this area is very well known. Can my noble friend confirm that the Government will give all possible support to any British companies tendering, so that this country can play a major role, in co-operation with the Chinese, in the development of their resources, not only in oil but in other raw materials in which the country, as I know, is very rich? In view of successful developments in the field of aviation co-operation, I would be interested to know what steps the Government are taking to pursue further joint co-operative ventures in other areas of advanced technology.
As it is late, may I just say again how grateful I think we should all be to the noble Lord, Lord Rhodes, for raising this matter this evening. I certainly agree with him that there should be a maximum exchange of views between our two countries and Western Europe as a whole at all levels.
8.10 p.m.
Lord Oram: My Lords, two months ago I had the great good fortune of being selected as a member of the delegation from the Inter-Parliamentary Union which visited China at the invitation of the National People's Congress. Let me say at once that I am always wary of those who, on the basis of a two weeks' visit, become experts in a country's affairs. I do not wish to fall into that trap. My noble friend Lord Rhodes, with his great experience to which a number of noble Lords referred, himself said that he was no expert. All that I can say is that his knowledge and experience in these matters completely dwarfs my own. Nevertheless, the experience that I gained during that visit to China was so meaningful, and so contributed to my own understanding of the situation in China, that I am persuaded that at least a brief contribution from me to this discussion may be worthwhile.
My noble friend's Unstarred Question refers to the need for, "the maximum exchange of views between the two countries at all levels". The delegation from the Inter-Parliamentary Union was in itself a very considerable step forward in this respect because China has not hitherto been a member of the Inter-Parliamentary Union. It is in my view highly desirable that she should be, and I hope that our visit will have brought nearer the day when she will be joining that organisation. I believe it true to say that such membership simply awaits a decision by the National People's Congress in the autumn. Certainly I am sure that from the point of view of noble Lords such an application will be warmly received.
Moreover, I believe that other exchanges and membership by China of other international institutions will become increasingly possible in the near future and increasingly desirable. These exchanges will not be simply on the educational and cultural level, with which my noble friend Lord Bowden has been dealing so effectively, but, I believe, on the level of exchanges between businessmen, scientists, trade unionists and,

779
if I can refer to my own special interest, co-operators within the international co-operative movement. All, I believe, will increasingly find opportunities of mutual understanding and association with their opposite numbers in the great country of China.
If I may give an illustration of a favourable development in this respect, a few years ago a number of us both in another place and in your Lordships' House formed the Parliamentary Group on Population and Development. We knew then that China not only had an enormous problem in relation to population growth but had a most important experience in dealing with that problem. It was not easy for those of us who were then forming this parliamentary group to make sufficient direct contact with the Chinese in this matter, but since then there has been a most welcome development in this respect.
Last autumn in Beijing the Chinese were hosts to one of the most important international conferences on the subject. Arising out of that conference, there has now been formed an Asian parliamentary group concerned with methods of reducing the birth rate in the continent of Asia; and the Chinese have taken a leading part in forming that group. So there are, as I have suggested, in many areas increasing opportunities of mutual exchange and mutual understanding.
These changes in China's international position are paralleled by changes that are going on internally as well. I suggest that it behoves all of us who are interested in a closer international association with China to try to understand the nature of that internal change. I will give just one example. During our visit I was able to put certain questions in an interview we had with deputy Prime Minister Yao Yilin. Incidentally, I have been interested to read since our return that there has been a structural change in the government set-up, and whereas previously there were some 12 or more deputy Prime Ministers there are now only 2; and I was glad to see that Mr. Yao Yilin is one of those two. So we were talking to a man of considerable significance.
I had asked him during our interview about the significance of the so-called new policy of personal responsibility in economic affairs. During the various visits that we made to industrial and agricultural enterprises we were given evidence of how this new policy is working, and successfully working, in terms of productivity. In discussing this, I was particularly interested to hear how the deputy Prime Minister, when referring to the Chinese system of agriculture in the communes, stressed that the new developments, significant though they were, would not lead to an abandonment of collective ownership of land. Changes are taking place in the role of the communes and in the freedom of the peasants within the communes to make decisions about their work patterns and the general running of the enterprise, but this should not be seen as putting the clock back. It should be seen in the context of a continuing reliance upon collective ownership throughout China.
There is another economic development that is going on in China, about which I was able to make some inquiries because it was of particular interest to me. We in Britain are these days faced with the problem of young unemployed in the cities. One method of
780
tackling this problem, with which I have been involved in this country, is the encouragement of workers' co-operatives to provide jobs for groups of young people. I found that there was an almost exactly similar situation in the Chinese cities. They did not refer to unemployed youth; they rather used the euphemism of "youth awaiting employment"—but I think it came to much the same thing.
There was evidence of a growing movement in the cities of workers' collectives, which is very familiar to the incipient changes here. I feel certain, therefore, that this is one area where mutual exchange of experience would be useful in this particular case in the service industries, in handicraft and in retailing. Particularly in relation to the problem of young unemployed there would be a great deal of value in sharing experience between our two countries. Those are two of the lines of inquiry that I was able to pursue and which I thought would be of some interest to your Lordships.
In conclusion, may I—as others have done—thank my noble friend Lord Rhodes for the opportunity that he has given us of having this brief discussion. I should like to assure him that in our many discussions that we had in China during our two weeks' visit his name was often mentioned. He can be quite sure that his work for British-Chinese understanding is very greatly appreciated among the Chinese, as it is in your Lordships' House.
8.20 p.m.
Lord Fulton: My Lords, in the three decades since 1949 China has been through a time of upheaval and struggle, the world has watched a human drama that has engaged a quarter of the human race in which the heroes of one act became the villains of the next with extreme dogmas fighting bitterly against one another, sometimes Left against Right; sometimes the high command against the rank and file. Yesterday's top people humbled and brought to justice; high hopes and idealism alternating with deep frustration and earthy pragmatism.
Through it all it is possible to see a main thread. One percipient onlooker has described it thus:
"A persistent search for a Chinese road to economic development, nation-building and social reconstruction. The path proves to be lengthy and tortuous: every corner it turns reveals conflicts of ideology, clashes of personality, struggles for power and massive social upheavals".
Those of us who were privileged to join the noble Lord, Lord Rhodes, in his pioneering bridge-building between Peking and Members of your Lordships' House and the other House found in him an ideal leader. He was full enough of years not to be misled by romantic illusions that progress in relations between East and West would be instantaneous, miraculous and uninterrupted.
He had seen enough of men and affairs to read the less obvious signs on the road that escaped the notice of others. His down-to-earth empirical English common sense clearly won the hearts of his hosts. Ever since that first visit the conviction has stayed with me that the outcome of China's decades of stress was of the first importance for us, far away at the other end of the earth. Not only because it engages a quarter of the entire human family, with all that that implies—with all that the outcome of that stress

781
implies—and inevitably means for the world's security and for the hope of striking a satisfactory global balance in the years to come between the claims of food, raw materials and industrial development. Not only because of the weight of the vast numbers involved, but also because China's future course will be that of a people proudly looking back beyond a recent century and more of invasion and humiliation at the hands of the West and latterly Japan, looking back upon the thousands of years of the longest continuous civilisation in human history.
This perspective and time-scale must be emphasised. It may be tempting but surely superficial to see in today's China only a new emergent super-power interested primarily in catching up a quarter of a century's time lag in technology. What model of human association will she offer the 21st century? The world has watched, and in different degrees admired and emulated, the model of a good society first glimpsed by the Pilgrim Fathers and set forth in the American Declaration of Independence and given flesh and bones during the subsequent 200 years while the US has harnessed science to the tasks of providing its own people, and others often with open-handed generosity, with food in plenty and a growing stock of the material goods of life.
Have they any cause to quarrel with or question the fulfilment of the promise of liberty and opportunity? Other models have been up for appraisal. The model of the Russian revolution, now over 60 years on; and Europe with its composite kaleidoscopic culture buried deep in the long and buried history of its national components. What patterns will a more extrovert China offer to a world divided between North and South, rich and poor and all the variations of those themes?
To return to China as our delegations found it, I leave the great and pressing issues of economics, industrail and agricultural development in the experienced hands of the noble Lords, Lord Rhodes, Lord Kadoorie—whom I should like to join in welcoming back to his seat tonight and for giving us the opportunity to share in his wisdom—and also Lord Mackie of Benshie.
For my part, I was most fortunate that two years after the first Rhodes delegation in 1978 I received an official invitation to go with my wife to China again as the guests of the University of Peking. I believe that that invitation was given chiefly because of my longstanding connection with the Chinese University of Hong Kong. I must say a few words to the House about that interesting institution, assuring noble Lords that it is closely relevant to the subject of the Question of the noble Lord, Lord Rhodes. Hong Kong has now two universities, one on which time does not permit me to dwell which was founded 70 years ago on the model of contemporary civic universities of the United Kingdom, sharing many of their characteristics and all of their virtues. Its medium of instruction was, however, English.
The second university, the other university, was founded nearly 20 years ago with two main objects in view: first, by teaching through the medium of Chinese it was intended to redress the balance of disadvantage suffered by the many young men and women of Chinese parentage whose education had been gained through
782
the medium of Chinese in the Chinese middle schools of Hong Kong, and whose natural abilities, however high, could not ensure them a university education in the existing university.
Sir Robert Black, the then governor, in an inspired moment of vision, and with the backing of the Colonial Office (whose education service was vastly experienced in the provision of higher education in the British colonies and dependencies against the coming of their independence) and of the Inter-University Council, the foster parent of some 40 universities in Africa, the Caribbean and in South Asia, was convinced that the second university was overdue.
The second objective which lay behind its foundation was that it should provide a meeting ground for the Chinese traditions of scholarship in Hong Kong, South East Asia and mainland China, together with the traditions of Western Europe, and also with the American university tradition, enriched as it had been at the highest level by the contributions in both science and the arts from numerous Chinese scholars who had settled in the United States. Thus, the Chinese University of Hong Kong had bred in its bones, as it were, the aim of promoting understanding between East and West.
I had the great privilege of being chairman of the commission which was set up by the Government of Hong Kong to report on the prospect of bringing together three post-secondary colleges—refugee institutions from mainland China which had set up centres of study in Hong Kong. They represented a wide range of university traditions from the classical Chinese scholarship to Christian colleges. We recommended that the union should take place and that the university so created should preserve its collegiate character and that its teaching should meet the needs of children of Chinese birth. Our report, of course, dealt with the range of academic issues normal in the institution of a new university, which do not concern us tonight.
I have been privileged from the start to be a member of the Chinese University's governing body and the university is fully conscious of its debt to my fellow member, Lord Todd, for his help and advice from the eminence of his position in the world of science. It is perhaps sufficient to say that the new university has filled its first 18 years with splendid achievements and is living up to the high hopes of its founders. It has had two vice-chancellors—both Chinese by birth—in the one case with strong links with the United States and, in the other case, to the United Kingdom. It has manifestly strong support in Hong Kong, not only from the Hong Kong Government but also from the Chinese community.
During more than half its life it has had as chancellor, Sir Murray MacLehose, who has even-handedly been chancellor of both universities. He will be greatly missed in his retirement from an illustrious term of office, during which he has guided Hong Kong through massive changes of scale with high political and administrative skills, his deep understanding of the complex cross-currents of Hong Kong's teeming life and an unassuming natural dignity. Hong Kong's loss, however, will be your Lordships' gain as he joins our deliberations in this House in the near future.
It was against this background of higher education in Hong Kong that I went for a second visit to China.

783
I will not take up the time of the House by describing their interest in academic affairs, but I would wish to describe the kindness of academic hosts in Peking and other university centres. They, too, have problems of access to universities which we share—problems of teaching, research, libraries and relations with students.
Over and above these, two impressions stand out in the memory. There was the impact upon the senses and imagination of the excavations of Sian, the old capital of China—the army, thousands in number, of terra cotta horses and riders, each individual soldier and animal individual in its features, entombed at the approaches to the tomb of the Emperor who first unified China, contemporary with the classical age of Greece and Rome in the Mediterranean, facing the direction from which an enemy might threaten. The tomb itself awaits excavation in due course. Already the discovery must rank among the greatest of nineteenth-century discoveries in the Mediterranean and the Valley of the Nile. The meticulous care and the strictness of the control to ensure orderly access are a witness to the national pride in the artistic achievements and the superb craftsmanship of a bygone China.
Nearby the oldest known human settlement has been excavated and it bears witness to the inherent inventiveness and aesthetic propensities of the remotest Chinese ancestors. Everywhere there are museums, beautifully organised and laid out, illustrating the history of Chinese society and its art. Their effectiveness may be read in the signs of eagerness on the faces of country-folk, old and young, who quickly gather round at the approach of visitors to the numerous lesser imperial tombs. They catch the words of guides before the interpreter passes on their content to the fortunate spectator from overseas.
Inevitably there broods over the scene the question of how the gigantic states can manage themselves if they are to succeed in meeting the challenges of nature or even those arising from man's own inventiveness. Men must act together or they may perish together, but the scale by which they are organised becomes one of the great problems of human government. There are signs that give ground for hope, but that is for another day.
In the meantime there was one significant straw in the wind. I was naturally interested, when in Peking, in finding out what would be the official response to overtures for academic collaboration between the universities of China and those of Hong Kong or, for that matter, of the United Kingdom. The Minister of Education responded by putting aside the question in its most general form but stating that there would be a welcome for academic exchanges between Hong Kong and the universities in the province of Canton, including the university founded by Sun Yat-sen. This seemed to be a most encouraging and hopeful reply, and I have since been glad to hear from the vice-chancellor of the Chinese University of Hong Kong that various exchanges have now been arranged.
There are now indications that the recent decision of the Chinese National People's Congress to establish special administrative regions will allow a promising measure of co-operation in industrial and other relationships. I hope I am not thought to be naïvely
784
suggesting that mutual understanding between peoples and cultures long cut off from one another can be turned on by a mere declaration of intent.
I end with a plea in support of the noble Lord, Lord Rhodes, and his endeavours, because I believe that wider understanding between nations and other groups is best promoted by bringing together people who already have interests in common—politicians with politicians, yes; doctors with doctors; musicians with musicians; scientists with scientists; engineers with engineers; and, above all, students with students—
Lord Davies of Leek: And teachers with teachers.
Lord Fulton: My Lords, universities by their nature and organisation, are naturally equipped to perform such a function. I have referred before in this House to the example of one of the great experiments of this century—the foundation by another Rhodes of the Rhodes scholarships, which brought together young men from all over the Commonwealth and the United States to study in Oxford, not in order to love one another but to understand one another, by doing something in which they had already engaged their activities and minds. I believe that after three-quarters of a century the numbers of those people occupying positions of responsibility all over the world have done a great deal, and, in particular, I am certain they have narrowed the Atlantic as much as has Concorde itself. It was working together with others from a different part of the world, and with a different upbringing, at subjects or jobs in which they were already interested, that led, if not to a growth in mutual affection, at least to an understanding of what made the other parties to the arrangement what they were.
It is not far-fetched to claim that that single inspiration is one with which the noble Lord, Lord Rhodes, agrees, because, if I remember rightly, the first thing he did when he arrived back in England from his first pioneering bridge-building, was to arrange for a very promising girl musician, whom we had heard at one of our stops, to come and continue her education in company with English girls in Manchester, as a renowned centre of musical studies. Therefore, I think that he agrees with this, if not with the way in which I have said it. He himself had the knack—amounting to a kind of genius—to sense what the various hosts in China would be interested in. Once that was in the open, what might have been merely a formal exchange of courtesies became an animate human relationship and we need more of it.
8.42 p.m.
The Earl of Gosford: My Lords, I did not put down my name to speak tonight, but as a couple of speakers have dropped out I am tempted to tell, in a very brief manner, a very short story which is dear to my heart as an artist and a member of the Artists' Union. I should like to thank the noble Lord, Lord Rhodes, for giving me this opportunity. He said that he knows little of Chinese matters, but leading four delegations to China is certainly four times more than I have been to China.
I should like to add to the list of the noble Lord who has just spoken, artist to artist. Last year, I had

785
occasion to meet an associate professor in the oil-painting department of the Central Institute of Fine Arts in Peking, who was over in London to copy some European paintings in the Tate. This is no mean feat. I arranged for him to visit the schools at the Royal Academy of Arts and the Royal College of Art. In conversation at the Royal College of Art, I learned of one area of China's treatment of artists from which we should surely learn. In the institute of which he was an associate professor, there were equal numbers of artists and teachers. The teachers were employed full-time from year to year, and every other year they would take a sabbatical to carry out their own art work. This, at a time of cuts in this country which affect very greatly indeed artists who rely on part-time art teaching to continue their work and to have close co-operation with their students, is a lesson well learned.
8.44 p.m.
Baroness Llewelyn-Davies of Hastoe: My Lords, I think that every speaker tonight has said how very grateful the House is to my noble friend Lord Rhodes for having initiated this debate, for making so powerful a speech himself and for giving us the opportunity of hearing such highly qualified experts as the noble Lord, Lord Kadoorie. China's importance in the world context is immense and it is curious that our debates about her are so infrequent. China has had a cultural and philosophical influence on the world for thousands of years, and trade with China has been of historical importance for almost as long. She has an infinite variety of peoples, whose ingenuity and skills have been legendary for centuries and yet modern China, until very recently, has loomed only like a kind of mysterious question mark in the minds of most of the British people.
That is one of the reasons why I think that Parliament, and indeed the country, owe so much to the generosity and the determination of my noble friend to forge links not only with the Chinese Government, but with the Chinese people. Friendships, constancy and trust, as the noble Lord, Lord Kadoorie, told us, are particularly valued by the Chinese people, and anyone who has been there with my noble friend Lord Rhodes knows the depth of the trust and admiration in which he is held there.
I learned from my visit that, apart from the fascination of its culture, the beauty of the country, the vigour and originality of its people, China is in no sense, as some people imagine, a closed society. It is, for instance, nothing like Russia. People come up to talk to you in the street quite spontaneously, if they hear you speaking English, and then join in the conversation vigorously, whatever their particular skill, because they love to try to speak and understand our language. Students everywhere flock to you at once when they know that you are a foreigner, and ask questions about our schools and universities. They long to know the most intricate details about British political life.
I remember with some discomfort a rather rough plane journey that I had between Peking and Hangzhou. I was cross-examined by one of our young interpreters about exactly what were the details and functions of the National Executive Committee of the Labour Party, and exactly what the decisions at that year's
786
Labour Party's Conference meant. It was rather difficult, as your Lordships can imagine! Later on, one of the Conservative members of our delegation was collared about the 1922 Committee, and asked in detail what was its significance and position in the Conservative Party. In China, there is a passionate interest in the world outside, and I shall come back later with some questions for the noble Lord who is to reply.
For our part, I wonder how many—even Members of Parliament—know that the Chinese have just unveiled a new draft state constitution, which is their fourth since 1949. At this stage, most interestingly, it has been issued for discussion and comments by the people. This means that now Chinese political thinking will be concentrating on some very basic issues. This is not the time to go into details. Noble Lords will know that the constitution contains a master-plan radically to reform the structure of the Chinese Government and the Communist Party. It proposes to establish a state presidency and a Central Military Council responsible to the National People's Congress, rather than to the Communist Party, and there are radical new proposals for the people's communes.
Constitutional changes may well come from the strengthening of legislative bodies at all levels, including the National People's Congress. Furthering Deng Xaio Ping's general approach over the last years, the Constitutional Revision Commission is reported to have recommended a general devolution of political power, so that "grass-roots levels" have far greater power over both administrative and economic affairs than they have now. There has been very little discussion in the British press about so important a development, yet we here ought to be able to follow the discussions in China about a new constitution which will be as important to the world outside as to China herself. We do not know enough, in general, about the workings of state, the People's Congress and the pattern of internal Chinese political life to assess what will be the impact of these proposals. This is why my noble friend's approach to a constant exchange of views,of personnel, of technical expertise and of mutual dialogue is so important. We can only interpret such views if we have far more information, not only at Government level but at all levels.
Apart from the human understanding which is so necessary, it is of real importance to our practical relations with China. The members of the Chinese Government—and very high ranking members of the Government—who met us on our various delegations, with great frankness told us that they knew there were difficulties. In trade matters, for instance, they knew that, as in all countries—but particularly, perhaps, in China because of its recent rather tragic history—there are often almost inexplicable delays and confusion even when both parties are anxious to get agreement on projects and joint ventures. Again, what is needed here is familiarity with each country's methods and problems, and that can only he achieved with deliberate efforts on both sides and with assistance from Governments.
As my noble friend Lord Rhodes has said, it is essential that our mutual trade interests prosper. In this connection, each time I have visited China I have been made aware from all sides of the almost desperate

787
need for the exchange of technical know-how and training. Like other noble Lords, may I ask the noble Lord, Lord Belstead, whether we can make any new efforts in this direction? Is there any hope, for instance, of help for young Chinese men and women to come to this country to be trained? When we were there three years ago that splendid old warrior of the Long March, Vice-Premier Wang Zhen, asked us if it would be possible for them to come to this country and work, perhaps, with technicians in the North Sea Oil Field, or to work and study dairy farming—of which they need much experience—on British farms. I wonder whether the noble Lord could give us any indication of hope in that direction.
Another question of real importance which has been raised many times in the House, and of which I have given the noble Lord notice, is the need for the transmission of the BBC World Service to be stepped up so that it is properly audible in China. We know that this requires a new transmitter because the one at Singapore is inadequate, and we know that the Government have some intentions in this direction. But, my Lords, it has taken a very long time. Every time I have visited China our interpreters have pleaded with us to get this service improved. They listen to the Voice of America every morning because it is audible, but they would much prefer the BBC both because of the programmes and because of the quality of the English. I should like to ask the Minister what progress has been made in this direction.
Another subject which has been discussed over and over again, and which I am very glad the noble Lord, Lord Geddes, raised, is the tragic results of Government policy on overseas students. As a small example of this, on our last visit we met a highly intelligent young man, the son of a distinguished Chinese writer who had lived in England years ago and who had brought his family up to love the British way of life. More than anything else in the world they wanted that young man to come to a university in the United Kingdom. But, of course, we found that he could go to any one of the leading American universities for half the sum it would cost him to come here, and to his infinite disappointment that is what he had to do. Could we plead with the noble Lord to try to influence his colleagues in Government and in his department to mitigate this absurd situation which applies to students all over the world and which is so damaging to this country.
This is not an appropriate occasion to consider wider political issues, but naturally western countries speculate about China's relations with Russia and with America. Noble Lords will know that Japan and the NATO countries have been urging the United States to try to resolve the difficulties created by their arms policy towards Taiwan. We also know that the sale of grain from the United States is essential to China, and we welcome Vice-President Bush's statement that he "felt good" after his three-day visit. It is essential that we draw China more and more into the community of nations. We naturally wonder, too, what Mr. Brezhnev's recent olive branch to China really means.
Lord Davies of Leek: My Lords, would my noble friend consider it to be wrong of me to interrupt her?
788
I wish to support her just for one minute. Travelling by train from Peking to Hanoi on one famous occasion, a nice old gentleman spoke to me in very good English. I asked him where he was going. He said that he was going to Wu-an where they were building a new bridge over the Yangtse when they were friendly with the Russians. He said that he was an engineer, that Mao had called him back and that he was 70-odd years of age. I asked him where he studied engineering. He said, "In the best place in the world—Imperial College of Science, London, in 1910". We have thrown all that away. Therefore, I want to enhance and back up the point which has been made by my noble friend.
Baroness Llewelyn-Davies of Hastoe: My Lords, I agree entirely that it is a very good example which my noble friend has given us. I shall not go too far into the question of the olive branch, but perhaps the Chinese might be forgiven for being a little cynical about the timing of the olive branch just when there were strains appearing between America and China over the Taiwan policies. At this moment, as the noble Lord, Lord Geddes, mentioned, we are naturally sad that the Chinese Government could not support Resolution 502 at the Security Council, but we understand their loyalty to the views of the non-aligned countries and we share their strong wish for a peaceful settlement of the Falklands dispute. But our debate tonight is taking place under the deep shadow of crisis. These are questions which we must leave for a different occasion, but what we want to convey tonight is our tremendous goodwill towards the People's Republic and our strong wish for friendship and for further exchanges of views and interest at all levels.
Lord Morris: My Lords, before the noble Baroness sits down, this is a terrible impertinence but I must rise for a few moments to support the point she made regarding the External Service of the BBC. When I was in China only last January it was astonishing to me—although I did know, in fact, that this was so—that the Russians had been broadcasting for many years to the Chinese in English, with an astonishing audibility and very close to the frequency upon which the British broadcasts are transmitted. It is absolutely essential that the valid point which the noble Baroness has made should be supported by Her Majesty's Government.
8.58 p.m.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, the Government are particularly grateful to the noble Lord, Lord Rhodes, because we attach the highest importance to relations between the United Kingdom and the People's Republic of China. May I join with the noble Baroness, Lady Llewelyn-Davies, in also recognising the really splendid speech which the noble Lord, Lord Rhodes, made from the considerable amount of experience which he now has of this subject.
Despite the great geographical distance between our two countries, our historic ties have been close. In 1950, Britain was one of the first countries to recognise the People's Republic of China. Ten years ago we agreed to exchange ambassadors, and particularly since then our relations have developed rapidly. Our

789
social and political systems are quite different. Nevertheless, on a number of major political issues which divide the world today we and the Chinese share the same fundamental outlook. The Government believe that continuing to develop the exchange of views with China can promote mutual understanding, which will be in the interests of both countries and in the interests of world peace.
In the last few years there has been a great expansion in the contacts between Britain and China at all levels. It is a sign of the closeness of our present relations that for the first time since the foundation of the People's Republic members of the Royal Family—the Duke of Kent and the Duke of Gloucester—have recently visited China. There have been a good many ministerial visits in both directions and by Members of both Houses of Parliament, and the British Group of the Inter-Parliamentary Union has also paid visits to China. The noble Lord, Lord Rhodes, told us about these in his speech and, indeed, no one has been more enterprising in this respect than he has. The noble Lord has organised and led three successful delegations—to which he referred with evident pride—and he went to Peking again in the spring.
As well as ministerial and parliamentary visits there has been a wide range of official and unofficial exchanges. They have covered the field of trade, science and technology, defence, agriculture, medicine, education, sport and culture. The British Council has been re-established in China since 1979 as part of our embassy in Peking, and the contacts they sponsor and the cultural agreement they operate are of great value. I should also like to pay tribute to the important contributions by the Great Britain-China Centre, the Sino-British Trade Council, the Royal Society, the universities and private organisations. There are now several hundred Chinese students and researchers in Britain, mainly in scientific subjects. There are a number of British teachers working in China, and most British students reading Chinese at our universities now spend a year in China, either during or after their courses.
The noble Lord, Lord Rhodes, also mentioned the desirability of visits by high-ranking officials. A number of senior civil servants have visited China in the past few years. Others will certainly do so as opportunities present themselves and when useful purposes can be served. One example of regular exchanges at official level is the periodic consultation between the Department of Transport and the Chinese Ministry of Railways within the framework of the Railway Co-operation Arrangement. Another example is a series of exchanges at working level between the Department of Health and Social Security and the Chinese health authorities.
Much of our business with China is done, naturally, at diplomatic level. The Chinese ambassador in London is one of his country's most distinguished representatives; so too is our own representation in China of the highest calibre. We have every confidence in Sir Percy Cradock and his staff at the embassy in Peking—and perhaps I ought to add that almost all the diplomatic members of our embassy there speak Chinese.
The noble Lord, Lord Rhodes, referred to our representation in Peking and recognised, I believe, that
790
we have in recent years already added to the commercial and cultural sections of our embassy. We have also arranged for the accreditation in Peking of members of the China Trade Unit in the British Trade Commission in Hong Kong, so as to increase our support for British exporters—particularly exporters in the southern provinces of China. The question of opening a small consulate in Shanghai mainly for commercial work—a matter to which the noble Lord, Lord Rhodes, specifically referred—has been kept under review. I would like to give your Lordships an assurance this evening that we have been keeping very much in mind the views expressed by British businessmen and by Members of both Houses of Parliament on this matter. We shall certainly discuss this with the Chinese during the coming months.
At present there is no direct United Kingdom Government aid programme for China. However, we have been taking a serious look at this recently. In practice, since 1980 some aid has already been flowing into China. Funds have been channelled through the British Council to help finance their educational aid programme to China. We have also, through the United Nations Industrial Development Organisation, supported the development of a pesticides research and development centre in China. The aid programme is not exempt from current budgetary constraints and is already tightly stretched, but I am glad to be able to say to the noble Baroness, Lady Llewelyn-Davies of Hastoe, that consideration is at present being given to the possibility of initiating a modest programme of technical co-operation with China.
The noble Baroness and my noble friend Lord Geddes specifically raised the question of overseas student fees. This decision was taken with reluctance for economic reasons. I accept that there is a difference of view about this in your Lordships' House. We are doing what we can to help Chinese students who come to Britain under the cultural programme. Besides British Council scholarships, a limited number of bursaries are also being made available under a new scheme operated by the Department of Education and Science. We would like to do more but the current financial climate is difficult.
I should like just to say to my noble friend Lord Geddes—for whose kind remarks, as well as those of my noble friend Lord Bessborough, I was most grateful—that the Government have co-operated with the Overseas Students' Trust, which my noble friend mentioned, in further work on what options might be open for giving further help to overseas students, but within the general context of the Government's present policy. We look forward to publication of their study, which I understand will be early next month. I am sure my noble friend will understand if, in the context of foreign students, I comment that I cannot say more than that.
The noble Baroness also raised the question of the proposed Far East BBC relay station. Provision is made in plans which the Government announced last year to improve the worldwide audibility of the BBC External Services with the construction of a new relay station to cover China, Korea and Japan. A suitable site has been identified by the BBC in Hong Kong and in consultation with the Government of the

791
territory, construction is planned to start in the financial year 1985–86.
We do, of course, offer financial support of various kinds to British businessmen exporting to China. Besides normal commercial credit facilities a number of British banks have extended to China a 1·2 billion dollar deposit facility that is subsidised by the Export Credits Guarantee Department. I very much welcome the news which the noble Lord, Lord Rhodes, had to give in his speech about Chinese encouragement of the use of this facility. Beyond this, under a British Overseas Trade Board scheme, financial assistance may be offered also to groups of British exporters who wish to invite groups of overseas businessmen to visit Britain. In this way, over the past two years, the BOTB has supporting inward missions, the BOTB also supports further five missions are already in prospect during the remainder of 1982. In general we believe that the scheme provides a very effective means of helping British companies to bring their products and services to the attention of prospective Chinese purchasers.
The noble Baroness, and the noble Earl, Lord Bessborough, asked specifically about co-operation in the field of high technology and technology generally. There is also support for inward visits of Chinese scientists and technologists under both the Cultural and the Science and Technology agreements. Besides supporting inward missions, the BOTB also supports outward missions to China and contributes to the costs of British companies exhibiting at trade fairs. It was not until 1981 that China first began accepting international trade fairs and when that happened the BOTB began supporting British participation. We have had five exhibitions and a further two are now planned.
Lord Rhodes: My Lords, at this point may I interrupt the noble Lord? I gave prior notice of this. Would the noble Lord deal with my very strong appeal to do something about COCOM?
Lord Belstead: My Lords, if may, I will come to that in just a moment. The industries covered at exhibitions which have received assistance from the BOTB include marine equipment, electronics, plastics, coal mining and construction, petroleum, education equipment and mechanical handling.
If I may come to the noble Lord's point, I realise from his speech that the noble Lord, Lord Rhodes, with the noble Lord, Lord Bowden, does not approve of China trade coming within the scope of the limitations of COCOM. But within this framework we are seeking to speed up the procedures for dealing with COCOM cases, to keep the list of embargoed items to the minimum necessary to safeguard our strategic interests, and to give due weight to Chinese relations with other countries. British views on these interests have been put forcefully to our COCOM partners and I am glad to say we believe they have had some effect. Any British firms wishing to sell their products to China which have any doubts about the prospects of securing export licences should seek advice from the Department of Trade in their export licensing branch at Millbank Tower.
The noble Lord, Lord Rhodes, and the noble Lord,
792
Lord Kadoorie, whose speech we so much enjoyed, mentioned the subject of textiles, and the noble Lord, Lord Kadoorie, referred to negotiations with the European Community. The present arrangements are in fact set out in the 1979 agreement, which provides for the European Community to maintain a rather less restrictive import regime than was previously in force, while retaining the right to protect domestic industry against disruptive surges of imports in particular product categories. I think it is fair to say that this is consistent with the Community's established policy on low cost imports from all sources, not just China. In the case of China 30 categories of products out of 114 covered by the agreement are currently subject to restraint under the 1979 agreement. The Government believe that these measures represent a package which is fair to the parties concerned. However, a certain degree of flexibility is available for the management of these arrangements. Primary responsibility for this rests, if any further details are needed, with the Department of Industry.
The noble Baroness, Lady Llewelyn-Davies, particularly raised the question of China-US relations, and indeed I wonder whether I might refer for a moment also to China-Soviet relations. So far as China-US relations are concerned, I really would not add very much to what the noble Baroness said, except that it is the earnest hope of Her Majesty's Government that a settlement of any outstanding issues in this area of international relations can be reached. Good relations between China and the United States are in the interests of us all, and we hope that both sides will continue their efforts to avoid any lessening of relations.
So far as China-USSR relations are concerned, of course we all in this House know that President Brezhnev has called recently for better relations the Soviet Union and China, and the Chinese reply is that they will judge the Soviet Union by their actions and not their words. No doubt they had in mind Soviet actions in Afghanistan and Vietnamese actions in Cambodia. I am bound to say that I do not think the Chinese have changed their mind about Soviet foreign policy at the present time.
Having said that, of course tonight the subject which we are discussing is exchanges. The expansion of tourism to China in the last few years has meant that many British people have had a chance themselves to see something of the country about which your Lordships have spoken with such interest. Do not let us neglect the energetic work of television, radio, the press and the speeches of the noble Lord, Lord Rhodes, in enabling more people to understand more about China.
Her Majesty's Government would certainly support further exchanges of views of all kinds and at all levels. In the light of the recent reshuffle of the Chinese Government we shall certainly be considering extending new invitations to Ministers to come to Britain to meet their counterparts and to see for themselves what Britain has to offer. No doubt there may be further opportunities in the other direction.
One of the features of our relationship with China is, of course, our mutual interest in Hong Kong. I should like to recognise the great service which the noble Lord, Lord Kadoorie, has given for the development of Hong Kong. It is due to men like the noble

793
Lord that it forms such an important part of the discussion which we are having this evening. It is, indeed, one of the key subjects which, as your Lordships know, Ministers have discussed on a number of occasions with Chinese leaders. I was very glad that the noble Lord placed on record that practical cooperation between the United Kingdom and China on Hong Kong questions, and directly between Hong Kong and China, has never been more extensive or more cordial. These good relations will enable us to maintain confidence while taking the interests of the People's Republic of China and Hong Kong into account.
Both we and the Chinese Government are studying the question of the future of the territory and are agreed on the vital importance of its continued prosperity and stability. In this the United Kingdom places particular importance on maintaining the strength and the independence of the Hong Kong dollar. I believe that these objectives can be achieved. I see no cause for any lack of confidence in the future of Hong Kong. Her Majesty's Government's commitment to the territory and the interests of its people remains undiminished.
Before I conclude, I should like to answer two questions which my noble friend Lord Bessborough asked me. My noble friend first asked me about the trade agreement of April 1978 and how it was being developed, and in particular whether the joint committees provided for under the agreement have yet been set up. China/European Community relations are good and have developed well since the signing of the trade agreement in that year. Although I have to admit to my noble friend that, as I understand it, the joint committees have not been set up yet, there have none the less been useful exchanges of visits and a European Community/China Business Week was held in Brussels in March of last year. The most recent annual meeting of the joint commission was in Peking only last November.
My noble friend also referred to the evident desire of the Chinese to develop their oil supplies in a way most advantageous both to themselves and to companies from overseas, and asked about the Government's attitude to that. As I understand it, bids are now being invited by the China National Offshore Oil Corporation. British firms have been taking an active interest and there are good prospects for co-operation. British experience and expertise in this area is well known and we believe can make a valuable contribution both in exploration and production and also in the service sector. We are fortunate that discussions are taking place at a time of excellent political relations between Britain and China. My noble friend specifically asked whether the Government would give all possible support to any British companies putting in tenders. I reply that the Government departments in Britain and the embassy in Peking will do all that they can to help British companies make their contribution.
As has been mentioned this evening, the relations between this country and China have become infinitely closer over the last years and, of course, in September my right honourable friend the Prime Minister hopes to visit China. The composition of the party—if I may reply finally to the question of the noble Lord, Lord Rhodes—has not yet been decided, but I assure the
794
noble Lord that the view which he expressed about this will be taken seriously into account in reaching final decisions. No British Prime Minister has hitherto visited China while in office, and both the British and Chinese Governments regard this as an occasion of especial significance. I am confident that it will contribute greatly to the further strenghtening of the relations between China and the United Kingdom.

Local Government and Planning (Scotland) Bill
Brought from the Commons; read a first time, and to be printed.
Nottinghamshire County Council Bill [H.L.]
Reported from the Select Committee on Opposed Provisions, with amendments.