Lords Sitting of 13 April 1983

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

Scottish Legislation
Lord Campbell of Croy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend in due course to introduce legislation for Scotland upon subjects dealt with in the National Heritage Bill or the Housing and Building Control Bill, neither of those Bills having application in Scotland.
Lord Lyell: My Lords, the National Heritage Bill provides for establishing national museums under independent boards of trustees. My right honourable friend the Secretary of State has already announced that he has decided to take similar action for the Royal Scottish Museum, and will introduce legislation in due course. The Bill also provides for the establishment of a Historic Buildings and Monuments Commission for England. Following wide consultations, my right honourable friend announced on 15th June 1982 that the establishment of a similar body for Scotland would not be appropriate, and that remains his view.
The Housing and Building Control Bill is in many respects concerned with aspects of the Housing Act 1980, which differ in approach from the Tenants' Rights, Etc. (Scotland) Act 1980. However, where changes are made which would be applicable to the existing legislation for Scotland we shall certainly consider adopting them in due course. Action on the review of building control in Scotland could largely be met under the existing provisions of the Building (Scotland) Acts, and it is planned to issue a public consultation paper in the early summer.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that full reply. Is he aware that many observers are under the impression that these two Bills do apply to Scotland, and that this is not surprising when a Bill is entitled the "National Heritage Bill"? Much of the national heritage is north of the Border. Will the Government consider possible remedies? For example, every Scottish Bill has the word "Scotland" in brackets in its Title. Could not the word "England", or the words "England and Wales", be similarly included in Titles in appropriate cases?
Lord Lyell: My Lords, I assure my noble friend that the lion rampant flies defiantly this afternoon. I am sorry that my noble friend's misapprehensions seem to be widespread north of the Border. Certainly I shall take note of his comments and convey them to my
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right honourable friend. My noble friend will be aware of the 327 sites which are at present either Crown property or under the guardianship of the Crown in Scotland, and we should not wish it to be thought that the National Heritage Bill applied to these monuments, which at the moment are administered under the tutelage or guardianship of the Crown.
Lord Renton: My Lords, is my noble friend aware that none of us would wish to inflict upon the people of Scotland a Bill of the complexity and incomprehensibility of the National Heritage Bill? If similar legislation is required in Scotland, will it be of the usual superior standard of Scottish legislation?
Lord Lyell: My Lords, I shall certainly convey my noble friend's compliments to my right honourable friend about the quality of Scottish legislation. If we should wish to propose such similar legislation for Scotland, I shall certainly convey the good wishes of my noble friend.
Lord Strabolgi: My Lords, may I ask the noble Lord what the phrase "in due course" means? Does it mean during this Session of Parliament?
Lord Lyell: My Lords, I understand that it might take some time to complete the necessary preparation and consultation if there were to be introduced any legislation relating to the national heritage or the Museum of Scotland. That would make it unrealistic to contemplate legislation being introduced before 1984 at the earliest. So I hope that that will indicate a timescale to the noble Lord.
Lord Campbell of Croy: My Lords, bearing in mind the amount of time which was spent in the last Parliament on debates and Bills on devolution, is it not important to take every opportunity of making clear when there are already devolved arrangements in Scotland for legislation?
Lord Lyell: My Lords, when it comes to a champion such as my noble friend, I shall certainly convey his comments to my right honourable friend in another place.
Lord Mowbray and Stourton: My Lords, can my noble friend tell me whether the passing of the National Heritage Bill in this country has weakened the link between Argyle House—the Department of the Environment in Edinburgh—and the Department of the Environment in London, or is there now sole dependence on St. Andrew's House?
Lord Lyell: My Lords, I hope that my noble friend does not think that the Bill has passed. I understand that it is still on its way in another place. But certainly I shall inquire about Argyle House and, if I may, I shall write to my noble friend.

Zimbabwe: British Citizens' Dual Nationality
2.42 p.m.
Lord Paget of Northampton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have considered, in the light of the Lancaster House Agreement, the Government of Zimbabwe's proposal to abolish dual nationality and to remove British passports from those of her citizens who are entitled to them, and whether they will inform the Government of Zimbabwe that British citizenship, in all its various forms, cannot be taken away from any individual anywhere other than by Her Majesty's Government in accordance with due process of law, and that any British passports confiscated by another state will be replaced automatically on application to the nearest British Consulate.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, Her Majesty's Government are aware of the legislation now awaiting presidential assent in Harare. This does constitute an amendment to the constitution agreed at Lancaster House but it was passed by both Houses in accordance with the provisions of the Lancaster House agreement for amendments to the constitution. I can, however, confirm that the right to British citizenship, once properly acquired, cannot be removed from any individual without his expressed consent. This is fully understood by the Government of Zimbabwe.
Lord Paget of Northampton: My Lords, may I put two questions? First, may I thank the noble Lord for the assurance in the second part of his reply, which I think will give great relief in Rhodesia. Secondly, as to the general conduct in Zimbabwe about which we have been hearing, may I remind the noble Lord—
Noble Lords: No.
Lord Paget of Northampton: May I ask the noble Lord whether he is aware of a quotation made by the noble and learned Lord, Lord Simon, recalling the words of a celebrated conductor who was addressing the second flautist. The quotation was to this effect: "Once, twice, your damned nonsense I up with put, but sometimes always, by God never!"
Lord Elton: My Lords, I do not think that I can follow either the musical or the syntactical idiosyncracies of what the noble Lord seeks to remind me of, but I am glad that he is reassured by the answer I gave him.
Lord Paget of Northampton: My Lords, it means simply that we have had about enough of Zimbabwe.
Lord Brockway: My Lords, may I ask the Minister, while I am opposed to both, are not these provisions somewhat similar to those in the British Nationality Act?
Lord Elton: My Lords, no. But they are similar to those in the constitutions of many other countries, including some in the Commonwealth.
The Earl of Lauderdale: My Lords, may we take it from my noble friend's reply that the last part of the noble Lord's Question about the automatic replacement of passports by British consulates will happen?
Lord Elton: My Lords, under the provisions of the British Nationality Act 1981 a person who has renounced British citizenship is entitled to re-acquire that citizenship by registration if he is aged 18 or more and is of sound mind, and provided that the renunciation was necessary to enable him to retain or acquire some other citizenship or nationality. This provision may be taken advantage of only once. I suspect that I have perhaps taken the noble Lord's question further than he intended. If he is concerned only with the re-acquisition of a passport, as opposed to nationality, I can say that while it is true that in certain exceptional circumstances—for example, where a British national has voluntarily surrendered his passport as a condition of bail—it may be appropriate to withhold replacement of a passport held by the authorities of another country, I can nevertheless assure him that, as a general rule, any British passport impounded by those authorities would be replaced, on application, by a British consular official, subject to the applicant's satisfactorily establishing his identity and his claim to citizenship.

Afghan Refugees
2.47 p.m.
Baroness Elliot of Harwood: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many Afghan people previously living in Afghanistan are now refugees as a result of the invasion by Soviet armed forces.
Lord Skelmersdale: My Lords, we have no precise figures, but it is estimated that well over 3 million Afghans have fled their country. According to Pakistan Government sources, there are about 2.8 million refugees in Pakistan alone. There are large numbers in Iran. The total exodus represents about one fifth of the Afghan population.
Baroness Elliot of Harwood: My Lords, I thank the noble Lord for that Answer. Is the United Nations refugee organisation playing an active part in this tragic scene? Is there any hope that more refugees will be able to be, not repatriated, but taken into other countries?
Lord Skelmersdale: My Lords, yes indeed. The United Nations High Commission for Refugees is taking a very active part in all this. Of the £13·7 million in cash and food aid from this country to Afghan refugees in Pakistan, a large slice has gone to the United Nations High Commission. As to whether other countries would be prepared to take in refugees, I would say that there are, of course, refugees both in America and in Western Europe. As to whether

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further countries would be prepared to take refugees, I am afraid that I cannot inform my noble friend.
Lord Cledwyn of Penrhos: My Lords, will the noble Lord agree that the presence of these refugees in Pakistan is causing the most appalling problems for that country? Secondly, will he tell the House what progress is being made at the United Nations-sponsored Geneva talks on Afghanistan that are now proceeding and whether this subject is on the table at those talks? It is vital that Her Majesty's Government, with the influence that they possess in that part of the world, should make their own contribution towards a solution of what could be a most serious problem in the area.
Lord Skelmersdale: My Lords, I agree with the noble Lord. This problem has caused enormous pressure on Pakistan. This is one of the two reasons why we have given such large amounts of aid to help relieve the problem. We consider that the European Council proposals of 30th June, for a two stage international conference on Afghanistan continue to offer a viable and realistic framework for implementing a settlement such as that to which the noble Lord refers. Before this can start, we await the results of the indirect talks that have only just started between Pakistan and the Babrak Karmal régime, currently taking place under United Nations auspices in Geneva.

Middle East Peace Negotiations
2.50 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further steps they will take following the visit of the delegation of the Arab League to London to ensure the return of Arab lands to Arab control, the right of the Palestinian people to self-determination and the right of all states in the Middle East to live in peace.
Lord Skelmersdale: My Lords, the European Council statement of the 22nd of March emphasised the urgent need to achieve the withdrawal of foreign forces from Lebanon and the resumption of negotiations aimed at a comprehensive settlement. We and our partners in the Ten are continuing to do all we can on the principles of the Venice declaration to encourage movement towards compromise and negotiated solutions.
Lord Molloy: My Lords, I thank the noble Minister for that reply. I should also like to congratulate our Government on their very strong endeavours because it seems to me that our Government more than anyone else acknowledge the fact that the situation in the Middle East could be a flash point for a world war. Is the noble Lord aware—and would he not agree—that the fundamentals that we must first achieve if we are not to allow the bawlings of the past to drown the whispers of a civilised solution for the future, are that the State of Israel must be recognized
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to be allowed to exist in peace and security within its legal boundaries, and that Arab lands that have been taken from them have to be returned? Is he further aware that it is also equally important that a State of Palestine has to be created, and that we should all hope and pray therefore that they will be good neighbours living together in earnest reciprocation of goodwill?
Lord Skelmersdale: My Lords, I have said before from the Dispatch Box that what we must see in this particular situation in the Middle East is evenhandedness. I reaffirm that today. While not going quite so far as the noble Lord in recognising that this is a potential world war situation, I agree that we have commercial, historical, cultural and, of course, strategic links with that part of the world, which is why we find it so important. I am grateful for the noble Lord's acknowledgement of the efforts that the Government have made, especially culminating in the enormous strides that my right honourable friend the Foreign Secretary has made in the past few weeks.
Lord Chelwood: My Lords, is my noble friend aware of the very widespread view that it is time that Mr. Arafat realised that the pretence of unity in the PLO and in the Palestine National Council does not conceal from anyone that they simply cannot agree about what to do next? It may even in the end destroy any real prospect of Palestinian self-determination. Does not the taking of decisions by consensus give a veto to an extreme and unrepresentative minority?
Lord Skelmersdale: My Lords, I am afraid that it is not for me to comment on whether the Council of the Palestinian Liberation Organisation is a minority. However, what I can say in regard to the latest breakdown is that King Hussein and Yassir Arafat agreed on a joint document. Yassir Arafat then went to consult with the PLO executive committee for four days, who would only agree what Mr. Arafat and the King had previously agreed to, with amendments which King Hussein regarded as unacceptable. Yes, I would take that as supporting my noble friend's view.
Lord Glenamara: My Lords, does the noble Lord recollect that before Easter I proffered the view at Question Time that the Palestinians would have had their state long ago, had it not been for the PLO? Does he not now share the view of President Reagan that that is the case? Will the Government now please distinguish between the Palestinian people who have a perfectly legitimate desire for some kind of autonomy or state of their own, and the PLO whose major purpose is the destruction of Israel? The failure to distinguish between the two has prevented this Government from playing any major part in the search for peace in the Middle East.
Lord Skelmersdale: My Lords, I still believe in President Reagan's initiative in which he spelt out the final arrangements for self-determination for the Palestinians in association with Jordan. I am also coming slowly to the view which the noble Lord holds, that there is a great dichotomy between the PLO and the rest of the Palestinian people.
Lord Wells-Pestell: My Lords, are the Government aware that the extreme wing of the PLO is totally opposed, and has said so quite recently, to an independent state of Israel or the recognition of it, which culminated by way of proof in a very serious and distasteful murder within the past two weeks?
Lord Skelmersdale: My Lords, I am well aware of the first part of the noble Lord's supplementary question. I would not actually go so far as to say why and by whom the murder was committed; but, as I sought to make clear in my original supplementary answer to the noble Lord, Lord Molloy, we cannot take any steps forward without the equal recognition of both sides to live in amity.
Baroness Gaitskell: My Lords, is not the obstacle to peace at present in the Middle East the fact that the PLO and the Palestinians do not acknowledge the existence or the right to exist of Israel? That is the main obstacle to peace in the Middle East at this time; all the other matters can be dealt with.
Lord Skelmersdale: No, my Lords, with respect, it is one of the two main obstacles.
Lord Brockway: My Lords, have the Government considered the desirability of re-calling a world conference on this subject in order to bring pressure to maintain the security of Israeli borders and to establish an independent Palestine state? Would not such a world conference be now very desirable in view of the situation in Lebanon and the rejection of President Reagan's proposals?
Lord Skelmersdale: My Lords, while there is neither agreement between the outside states, nor agreement within the Arab states, I do not think that a worldwide conference would be useful in the current circumstances.
Lord Shinwell: My Lords, having listened to some of the questions, been cognisant of some of the ill-formed criticism of the State of Israel and the situation in the Middle East, may I ask this question. Will the noble Lord not agree that in the event of trouble with the Soviet Union—and he will no doubt take note that the Soviet Union is using Syria at present, as it has done for some time, as regards the provision of arms and in other directions—the United Kingdom cannot depend on any of the Arab countries or any of those who describe themselves as Arab Palestinians?
Lord Skelmersdale: My Lords, when I referred in my last supplementary answer to the disunity between the outside states and the inside states I, of course, did not refer to the equal apparent disunity, the one with the other. Yes, I very much take the noble Lord's point.
Lord Caccia: My Lords, in view of the reported statement of Mr. George Schultz, do the Government not think that there is something to be said for the suggestion which he made that at the moment the best thing to do is to allow the Arabs some time to reflect on what has taken place recently between the PLO and the King of Jordan?
Lord Skelmersdale: Yes, my Lords, I think that that would certainly be the next step and I look forward to the Arab states consulting together and producing their own proposals.
Lord Molloy: My Lords, will the Minister not accept that it is a fact that President Reagan's initiative was only partially accepted by the Arab leaders, but that it was indeed totally rejected by Mr. Begin although not by any means by all the people in Israel, many of whom want to see a just peace as much as anyone in this world? Will he further agree that perhaps the only way in which to do that is to follow the example given by many brave Israelis of having a world conference, if you like, to help them whereby the State of Israel can be guaranteed its future just as much as the return of Arab lands will be guaranteed and the creation of a Palestinian State? This is the only formula that will stop the death and destruction that periodically erupts in the Middle East.
Lord Skelmersdale: My Lords, I am not sure that I can go anything like so far as the noble Lord did in his second and third supplementaries. But I will point out that partial rejection is no reason for not pursuing a policy as all Governments of all complexions have discovered over the decades.

Miscellaneous Financial Provisions Bill
Brought from the Commons; read a first time, and to be printed.

Severn-Trent Water Authority Bill
3 p.m.
Lord Beaumont of Whitley Lord Beaumont of Whitley rose to move, That it be an Instruction to the Committee to whom the Bill is committed that in considering Parts II and III of the Bill they should pay special attention to the Feasibility Report Summary of the Severn-Trent Water Authority (Soar Division), revised March 1981, and to the report of the consultants, dated April 1981, on the Assessment of Agricultural Benefits and Costs of the Soar Valley Improvement Scheme.
The noble Lord said: My Lords, I rise to move the Instruction standing in my name on the Order Paper. When this Bill was before this House on the Second Reading last November I drew your Lordships' attention to the possible implications for the landscape, and wildlife along the valley of the River Soar in Leicestershire if the scheme, which forms the subject of this Bill, was to be implemented in its present form.
It will be recalled that the reason a Private Bill is required in this instance is to provide the Severn-Trent Water Authority with the necessary authorisation to construct certain engineering works along the Soar navigation. These works would bring about flood relief in an area lying roughly between Leicester and Nottingham. The main beneficiaries of the scheme are expected to be owners of residential and commercial properties affected by periodic flooding, road users

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who currently experience delays caused by occasional blockages to roads in the area, and farmers who might be expected to take advantage of improved drainage to their land to intensify agricultural production.
There is nothing that is unusual about this scheme. Dozens of such river-widening and straightening projects take place each year. But what all these schemes have in common—and this is the point I made during the Second Reading debate on the Bill—is that works associated with river improvements are almost always bound to benefit some interests at the expense of others. The example I used was the effect that the improved drainage to 6,700 acres of agricultural land along the length of the River Soar, and the changes in agricultural practices that could be expected to follow, would have for the appearance of the surrounding countryside and the wildlife found within it. This sort of balancing of advantages and disadvantages is now standard practice for the promoters of any large-scale projects which include an element of public involvement.
The scheme for the River Soar, the subject of this Private Bill, is no exception. I referred to the cost benefit appraisal last November when I criticised the apparent unnecessary secrecy preventing wider public scrutiny of the assumptions and methodology being used in support of such projects. The secrecy is built into the system, and I am not criticising this particular authority in this respect. All too often controversial schemes of this kind have been developed behind a cloak of confidentiality, but in controversial schemes like this, attracting national interest and attention, we really should look at what data and methods of economic appraisal have been used to promote the scheme.
We have had a good airing of this subject recently, during the Committee stage of the Water Bill on 8th March, and I do not need to repeat these concerns, except to say that the general point being made on that occasion was that the secrecy surrounding these economic appraisals in increasingly giving rise to doubts about both the methodology and the assumptions on which they are based. I am pleased to be able to say that the promoters of this Bill have been highly co-operative in making available to me information which does not involve their breaking undertakings of confidentiality to farmers.
However, I am also bound to say that on the evidence of the two documents made available to me by the Severn-Trent Water Authority and mentioned in this Instruction, there is, indeed, substance to the doubts I have just mentioned. Many of the aims of the Bill and of the scheme are beyond reproach and are eminently desirable. I have been alerted and told about the problems of various villages in the area by Julian Hamilton, the Liberal candidate for the area, who has actually been living in one of the houses which is periodically flooded. The villages of Ratcliffe, Kingston, East Leake and Costock in particular will benefit very much from this scheme, but the question arises whether they would not have benefited just as much by a much smaller scheme rather specially tailored to their needs.
The cost benefit analysis prepared for the scheme appears to be profoundly unsatisfactory. It is because
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I have been allowed an opportunity to examine in some detail the Feasibility Report Summary for the River Soar Scheme, and a supporting document of the agricultural consultants, that I am moving this Instruction today. I do so in the hope that the committee which will be considering this Bill will wish to be satisfied that the river scheme for the Soar can pass a basic test of economic viability which the noble Lord, Lord Skelmersdale, said was the main purpose of these appraisals when he spoke for the Government during the debate on the Water Bill.
In order to illustrate my point, I shall now refer briefly to a few of the points arising from these two documents which the committee may wish to consider. I shall not weary your Lordships by going at any length into them, but I think it is right that I should just mention the outstanding points.
The first issue is whether the test discount rate of 5 per cent. chosen by the scheme's promoters is the most appropriate one for a public investment project of this type. River improvement projects fall within a general category of public expenditure proposals where it is notoriously difficult to estimate a precise value for the expected outputs, and hence especially easy to exaggerate benefits. It might, therefore, have been expected that the Severn-Trent Water Authority would apply a 7 per cent. discount rate in line with advice from Her Majesty's Treasury, in its booklet, Investment Appraisal in the Public Sector (1982). This is merely the first of two or three instances where it appears that the cost benefit lying behind this Bill goes against and is not in line with Treasury guidelines.
The committee considering this Bill will doubtless note that the Feasibility Report Summary prepared by Severn-Trent accepts that, even when everything else is kept unchanged, a change to a 7 per cent. rate of discounting results in a negative net present value for the Soar scheme; in other words, that if the Treasury discount rate was applied the scheme would no longer be economically viable in Treasury eyes.
But it cannot be assumed that everything else would remain unchanged. The committee may wish to pay special attention to two main categories of benefit claimed for this scheme: conversion of agricultural land, currently used predominantly for grazing, to cereal production; and the time savings claimed for road users.
Taking the first of these, it is apparent from the summary report that agricultural benefits are expected to make up the bulk of the total amount of benefits expected from the scheme; perhaps in the region of £5·8 million at current prices, or 75 per cent. of the total projected benefits. With nothing in the two reports to suggest the contrary, it must be assumed that the calculation of this figure is based in part on the current market price for cereals; in other words, on prices guaranteed under the common agricultural policy of the European Economic Community, which we may note in passing results in surpluses of a large number of agricultural commodities. If the committee considers it prudent to take advice on this subject, it may find that many economists, and perhaps even Her Majesty's Treasury, would advise that more meaningful "shadow" prices to be used in an appraisal of this sort would fall somewhere intermediate between EEC market prices and world market prices. If this were

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done in the case of the Soar project, the result would be to lower the agricultural benefits being claimed by its promoters by some 20 per cent. to 30 per cent.
Still on that question, it is clear that the main basis for projecting the future agricultural, and hence financial, returns should the scheme be fully implemented, is an interview survey of some 30 farmers in the affected areas. It is not my concern here to question the statistical validity of the farmers sampled; rather, the danger of this sort of subjective analysis is that it may carry an inherent bias towards over-estimating farmers' intentions to change their farming practices to take full advantage of the altered drainage patterns.
The report of the consultants makes no reference to this phenomenon known, as many learned in economics here will know, as the "free rider effect", after a famous paper by Nobel prizewinner, Mr. P. A. Samuelson. One way of getting round this problem is to take a comparable survey based on a more objective assessment of farm holdings and farmers. When this was done for the Soar Valley recently by two economists from Leeds University. Messrs. Black and Bowers, they found that the total amount of agricultural benefits would amount to only 71 per cent. of the values claimed in the consultants' report, even when the same market prices are used.
The considerations that I have just mentioned lead me to believe that the net present value of the agricultural benefits claimed for the scheme by its proponents are seriously over-estimated. The same is true of the benefits claimed for road users, estimated in the Summary Report to be in the region of £1·5 million at current prices. This figure is derived by aggregating and putting a price on a large number of individually small time savings by drivers who may encounter delays or diversions during periods of flooding. The estimation of road benefits, whether for new road construction or improvements to existing roads, is a notoriously demanding task for the road engineer. It is for this reason that it might have been hoped that, in line with Department of Transport advice, the promoters of the Soar scheme would have explored a number of different assumptions and variations in driving patterns and behaviour before arriving at the £1·5 million figure.
My comments so far have been directed principally at some of the key assumptions used for calculating the agricultural and road-user benefits. I should like to mention briefly two additional concerns about the methodology employed by the Severn-Trent Water Authority in drawing up its economic appraisal for the Soar Valley scheme. The first concerns the tendency of the promoters to shy away from any attempt to calculate certain negative effects of the scheme, particularly for boat users and anglers, but also for landscape and wildlife, using the excuse that there is an absence of an accepted methodology for measuring certain dis-benefits arising from the project. Of course, it would be naive and wrong to pretend that all costs and benefits could be reduced to a single money amount. Nevertheless, there are techniques well enough known to economists where, with due caution, money equivalents can be adduced for certain recreational benefits.
It is quite wrong for the Severn-Trent Water Authority to set the costs of these recreational benefits at zero, or even to ignore them altogether as in the case of the landscape and wildlife changes, using as support the absence of an accepted methodology. Where certain costs and benefits cannot be properly valued, the advice of Her Majesty's Treasury—and again we come back to Government-based guidelines—in Investment Appraisal in the Public Sector is that they should be quantified so far as practicable, and, where that is not possible, should be listed, making it clear that they are additional factors to be taken into account.
My other criticism—and my last criticism—of the methodology employed by the Severn-Trent Water Authority in its Summary Report is the lack of any mention of reversibility effect, an especially important consideration for public investment projects, such as a river scheme, which have a bearing on environmental quality. Put simply, the effects of some expenditures are reversible while others are, for all practicable purposes, irreversible. The drainage of agricultural land is a good example of the latter. There are special procedures for handling this. What economists frequently refer to as an "option value" should be subtracted from the benefits otherwise attached to the irreversible option. The magnitude of the option value depends on the situation in hand, but they cannot simply be ignored as they have been in the case of the Soar scheme.
Some of these may seem like minor technical points, but I make no apology for that. It is only when the cumulative effect of all these points is taken that we can determine the difference between an acceptable economic appraisal and one that is clearly deficient. If I have trespassed on the patience of the House this afternoon, I apologise. I could have moved this Instruction at Second Reading, which would have taken as long, I may say, but it seemed better to discuss the matter fully with the promoters who have been most co-operative and, I am advised, do not take serious exception to the Instruction that I am moving.
It may be said that we should leave these matters entirely to objectors, and that the Committee is in an awkward situation if there are not petitioners. I sympathise, and I hope I have so phrased the Instruction as not to make the work of the Committee in any way more difficult. But the responsibility rests with us. In this case it seems that we have a chance to act in a very proper category as a watchdog for the public. For various reasons there are now no petitioners. MAFF have been involved, but clearly their cost-benefit instructions differ from those of the Treasury. I believe that the Instruction will help this House to discharge its responsibility to the public. My Lords, I beg to move.
Moved, That it be an Instruction to the Committee to whom the Bill is committed that in considering Parts II and III of the Bill they should pay special attention to the Feasibility Report Summary of the Severn-Trent Water Authority (Soar Division), revised March 1981, and to the Report of the Consultants, dated April 1981, on the Assessment of Agricultural Benefits and Costs of the Soar Valley Improvement Scheme.—(Lord Beaumont of Whitley.)
3.16 p.m.
Lord Nugent of Guildford: My Lords, I should like to make a brief comment on the Instruction which the noble Lord has just moved in such cogent and detailed terms. I should begin by congratulating him on getting such a good trailer in The Times yesterday as a good send-off for him today. As he said, the promoters of the Bill are not opposed to the Instruction. Therefore, obviously, I am not suggesting that your Lordships should reject it.
It is an unusual procedure—some might think a very unusual procedure—to move an Instruction for an unopposed Bill. An unopposed Bill normally is a relatively simple procedure, and of course it has no petitioners against it. The point I wish to make to the noble Lord is that whilst I am sure the Select Committee will study most carefully the long, detailed and cogent speech the noble Lord has made, adducing the objections which he sees, they will be at a serious disadvantage in that there are no petitioners, with counsel, to appear before them objecting to the Bill and with witnesses who can be examined in detail to find out the weight of the objections. Whilst the noble Lord's points will no doubt be considered carefully by the Select Committee, they are at a great disadvantage, and indeed the cause he wishes to represent will be at a disadvantage, if there is no petitioner there in order to develop the matter with witnesses. I should just like to make the comment that on the whole it is a very unusual procedure, and I would suggest that it should remain so.
Lord Shinwell: My Lords, if I intervene it is only for the purpose of asking a question. I hope I am not committing any offence by doing that. I should not dare to take part in a debate on the Water Bill because I know nothing about it. I do not bother much with water anyhow. This is the second occasion, as I understand it, when, after a Second Reading debate, and the subject of the debate being referred, in the ordinary procedural fashion, to a Committee, a Member of your Lordships' House, quite rightly in accordance with the procedure laid down, raises an issue which could have been raised in the course of the debate but apparently it was not done.
Now there is another intervention by another noble Lord raising something which should be referred to the Committee. That the Committee should note. If one finds it difficult to enter into a debate in your Lordships' House, then, as I understand it, all one needs to do is to wait for a week or two and then put a Question on the Order Paper about something that should have been referred to the Committee but was not. If that is the situation, it would suit me very well. I sometimes, as other noble Lords do, find it difficult to put my name on the list when one is not appropriately informed about what is going to happen; so one misses the debate. Therefore, all we would have to do would be to wait and then insert an amendment of some kind, a new reference; and as a result we make a Second Reading speech. May I ask the noble Earl, Lord Ferrers, whether he would answer that question?
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, I do not
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mind being "bounced" by the noble Lord, Lord Shinwell, and being asked to answer his question. It is open to any noble Lord, should he so wish, to move an Instruction to a committee; and, in so far as the noble Lord, Lord Beaumont, has done that, he is entirely within his rights so to do.
Baroness White: My Lords, it is only fair to the noble Lord, Lord Beaumont, to indicate that he drew attention to some of these points on Second Reading, when I briefly supported him, because we felt that something was likely to be amiss unless these matters were taken into consideration. There may have been some error, of omission or commission, in the procedural way in which this has been handled, but the substance is entirely in accord with what Lord Beaumont said today.
The Chairman of Committees (Lord Aberdare)My Lords, I do not think there have been any errors or omissions, but this Bill has been a somewhat unusual event. As the House will remember, we had the Second Reading on 25th November, in which the noble Lord, Lord Beaumont, and the noble Baroness, Lady White, spoke, and at the time there were two petitions against the Bill. They were not on this subject but on a rather specialised subject. There would have been a Select Committee—this answers the point made by the noble Lord, Lord Shinwell—to consider those two petitions, and at the time I undertook that the remarks made by the noble Lord and the noble Baroness would be referred to that Select Committee.
However, later—on 13th December—the two petitions were withdrawn; and then this Bill would normally have gone to an Unopposed Bill Committee. Now, of course, we have an Instruction; and if the House accepts the Instruction put down by the noble Lord, Lord Beaumont, I hardly think it would be appropriate for it to be considered by an Unopposed Bill Committee. I suggest that if your Lordships accept the Motion I should do what I am empowered to do under Standing Order No. 92 of the Private Bill procedure, which says:
"The Chairman of Committees may, if he thinks fit, report to the House that, in his opinion, any unopposed Private Bill should be proceeded with as an opposed Private Bill".
That would mean that a Select Committee would be set up, could consider the points that have been made today by the noble Lord, Lord Beaumont, and could then make a report to the House. I hope your Lordships will agree that that is the best procedure in the circumstances.
I have great sympathy with what was said by the noble Lord, Lord Nugent. It is not the best of procedures. By far and away the best of procedures would have been if those who object to the Bill had gone through the normal routine and had petitioned against it. Then we could have had a Select Committee and evidence heard on both sides, and that would have been more in accord with our usual practice. But in the circumstances we have now, I suggest that if your Lordships agree to this Instruction I will arrange for a Select Committee to consider the issues which have been raised this afternoon.
Lord Beaumont of Whitley: My Lords, I thank the noble Lord the Chairman of Committees for those comments. It is true that the point arose only after the petitioners withdrew. The time has been extremely constructively spent by discussing with the promoters of the Bill what would be the best way of approaching the problem. There is a serious matter here which should be discussed. I entirely agree it is unfortunate that, by a series of mischances, the usual procedure was not followed. I think the best thing to do now would be to look at the whole matter, and I therefore hope your Lordships will agree to the Motion.
On Question, Motion agreed to.

Business
Lord Denham: My Lords, with the leave of the House, I should like to say something about the short debate this afternoon. In view of the comparatively smaller number of speakers than is usual, there may be no time problem. But possibly it would be to the advantage of the House if I were to remind speakers that if any noble Lords should speak for longer than the average time available per speaker, they would do so at the expense of later speakers in the debate.

Nationalised Industries: Relations with Government
3.25 p.m.
Lord Taylor of Gryfe Lord Taylor of Gryfe rose to call attention to the problems which beset the relations between Her Majesty's Government and the nationalised industries; and to move for Papers.
The noble Lord said: My Lords, the purpose of this debate is to discuss the difficult problem of Government relations with the national industries—like Sir Peter Parker, I prefer that definition to the description "nationalised industries"—to identify the weaknesses in the present situation and to suggest improvements. This is an area of politics in which the Social Democrats and their Liberal allies can make a special contribution, as they are not prisoners of the ideologies of the Labour and Conservative Parties. The former regard state industries as essentially virtuous while the latter regard them as an evil which must be liquidated as quickly as possible, irrespective of whether that makes good sense or is in the best interests of the nation.
Let me quote an example of this ideological madness. Wytch Farm is Britain's biggest onshore oilfield, in which British Gas has a 50 per cent. stake which was valued recently at £500 million. The Minister has instructed British Gas to sell off quickly, and according to the Financial Times a figure of between £200 million and £260 million is being discussed with a private consortium. In the present state of the energy market it is almost criminal to sell off asserts like Wytch Farm. The British Gas Board and their chairman know that, but the Minister insists.
To give another example, I am a member of the British Rail Property Board. We contribute about £80 million a year to help the British Rail cash flow; our
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gross rental income last year was £62 million. Yet we are instructed by the Minister to sell off these assets, which include sites and properties with substantial growth potential, thereby denying British Rail future funds which are essential for the maintenance of a modern railway. Instead, they will accumulate for the advantage of private property development.
There is another charge against the Government. It is that when they dispose of national assets they are far from skilful in doing so. I know this is sometimes a difficult area, but the Amersham issue was seriously underpriced, was 20 times over-subscribed, was offered at a fixed price of 142p and overnight reached 189p—it was a stags' bonanza—and in 1982 had reached 293p. Cable and Wireless was a similar story, and Britoil erred embarrassingly on the other side. So it goes on.
According to the Economist of 5th March, the Minister for Industry has the following programme ahead. There is a new chairman of Rolls-Royce whose contract tells him to prepare the company for privatisation. At British Leyland, privatisation of mainstream divisions is still on the cards, but no sale is likely before 1984, for obvious reasons. First choice will be the Unipart components business, followed by Jaguar and Land Rover. The British Technology Group, which is a catalyst for new technology in Britain, will be forced to wind up its NEB (National Enterprise Board) holdings, and the top management of BTG is likely to be replaced. The new chairman of British Shipbuilders is charged with selling off the naval yards and getting out of ship-repairing, the only profitable parts of the business. Privatisation plans for British Telecom are currently before Parliament.
Does anyone believe that all of this programme is in the national interest? Are these decisions made on the basis which would normally guide the board of directors of any holding company with responsibility for protecting the best interests of the shareholders?—keeping in mind that several of the companies on the Government hit list were rescued from collapse under private enterprise and very large sums of public money have been poured into them. The Minister is a reasonable man. I must ask him this. What is the impact on the morale of the management and of the work force in a business where you have the constant threat that if you make any section of the business profitable it will be sold off and you will be left in the company with a lump of loss-making activities? This could be the case with the plans for British Shipbuilders and for British Leyland.
I commend to the Government the study of Michael Edwardes' recent book, Back From the Brink, where on page 242 he says:
"Confidence is the key—confidence of customer, supplier, bankers, dealers, potential partners in collaboration; and there can be no confidence in BL's future if there is constant sniping and pressure for disposals".
The Labour Party, in turn, has declared that any activities hived off during the Conservative Government will be taken back into public ownership by the next Labour Government. I must say to my Labour friends that if it ever comes to pass that they are in Government they will certainly be busy, alongside the other commitments in the manifesto. Because here is the list so far: British Petroleum,

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British Aerospace, British Sugar, Cable and Wireless, Amersham International, National Freight, Britoil and Associated British Ports. That is a fair programme for a Government on top of their other social programme.
Does anyone seriously believe that this kind of politics in Britain, dealing with major industries, will contribute one whit to our national economic recovery? Will the shadow of these threats on both sides encourage management to make the long-term plans and investment decisions which are essential? Will these prospects attract the first-class management which is necessary if these industries are to succeed? There are businessmen on both sides of this House who must know in their hearts the answers to these questions. The trouble is that we are caught up in a debate about ownership when we should be discussing efficiency; and the first requirement for efficiency is to get the structure right so that we may recruit the best people to manage the industries, and then permit them to manage.
I should like to quote again from Michael Edwardes' book, from page 246:
"The Secretary of State"—
the Secretary of State in the present Government—
"(although otherwise good about leaving employee relations to us), sought to influence the company at the crisis point of our November 1981 pay dispute; he intervened in our commercial negotiations with British Steel; he twice rejected our proposal to appoint an additional non-executive director to the BL board; and he queried the company's right to take proposed legal tax avoidance action! The latter episode (which was to cost the Treasury some millions of pounds), provoked me to write a letter inviting him to ponder on the fundamental principles of the Government/BL relationship. I pointed out that whenever the Government intervened in commercial matters, it made it far more difficult to attract and hold first-rate managers. It caused entrepreneurial managers to eschew the public sector".
Recruiting the best people is not a matter of paying extravagant transfer fees. I have a high regard for Ian MacGregor, whose abilities I respect. He is a good friend of mine. But the Government have established a very dangerous precedent by paying this ridiculous fee and it will mean that in future recruiting the Government will have to pay similar fees to British and other companies to attract top management. I know we have to pay the rate for the job; but there used to be an element of service to the nation in accepting these appointments, and this has been diminished by these arrangements with Lazard Freres.
In any satisfactory structure we may create there are three cardinal principles: first the right to manage is the first requirement of the heads of state industries, once the strategy has been laid down by the Government; secondly, the strategy must be clearly set out, the objectives defined. Here again we come up against Sir Peter Parker's dilemma in the Dimbleby lecture, in which he stated:
"I have never been in a job where no-one could tell me what winning means. In the absence of clear objectives and consistent Government policy our national industries are subjected to government by public inquiry".
Thirdly, the decision-making process requires to be rationalised.
Let me give you my experience as a member of British Rail board. Management prepared their budgets and investment proposals and submitted these
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to the board. These were considered and passed. The plans then go to the Minister of Transport, whose team of economists and experts question and check them, frequently asking for more information and further options for the Minister. Since large sums are involved, the proposals go to the Treasury, whose experts "double guess" once more and come back with their queries and frequently ask for other options to take to Cabinet Committee. The affairs of the industry are then submitted to the Monopolies and Mergers Commission to carry out a detailed management audit. I have always assumed that it was the duty of non-executive directors on any board to check or monitor the performance of the management. On top of this, we had examination by the Public Accounts Committee and the Select Committee covering nationalised industries. In addition we had exhausting and exhaustive examination by theTreasury and Civil Service Committee on the financing of state industries, with the Serpell Committee thrown in for good measure. On top of all this Mr. St. John-Stevas, who, I suspect, is more at home with theology than with management, is seeking to add access by the Auditors-General to the documents and accounts of state industry, with a view to reporting them to the Public Accounts Committee. There is, of course, on top of this, a statutory professional audit.
Sir Peter Parker speaks for all his colleagues in the Nationalised Industries' Chairmen's Group when he argues:
"Still more investigations will only dim our spirit of enterprise. Already we look up in wonder at a swirling constellation of Star Chambers and it passeth all our understanding why we need yet another.".
All of this absorbs management time. Officials prepare endless briefs and reports while highly paid chairmen spend their hours waiting in corridors and arguing about the detail of their business with politicians when they should be in the board room or on the shop floor managing their affairs. In a recent book entitled Controlling Public Industries by two distinguished authors we read the following:
"No Government has been able to resist the temptation to second-guess boards of managements and at times to use pricing policy and investment programmes as part of an overall package of economic measures. This in turn has provided a reason or an excuse for unsatisfactory performance by the industries as the arm's length relationship between Government and industry has broken down.".
Our other main problem in dealing with nationalised industry is the problem of the method of financing. There are three sources of financing. First, there are the internally generated funds in the industry and perhaps I might point out that in 1979–80 42 per cent. of the £4·7 billion investment programme for nationalised industry was raised by internally generated funds, and last year the figure had risen to 65 per cent. of a £5·4 billion investment programme. That is a considerable achievement on the part of the national industries. Then there is borrowing, the bulk of which is from the National Loans Fund. I am glad that since 1981 there has been some flexibility with variable rates and a different maturity pattern.
However, all the expenditure of the national industries is limited by the external financing limit which covers the total recourse to Government funds from any sources. It is an overall figure and does not distinguish between capital and revenue. While the

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EFL does establish certain financial disciplines, it is strictly related to the annual PSBR and does not permit long-term planning or long-lead investment. The Government should pay some heed to the report of the 100 Group of Chartered Accountants, whose independent report in December 1981 stated that the methods of financing state industries in this country need radical review. The industries should have normal commercial freedom appropriate to major trading bodies, and should be financed with debt/equity capital structures similar to the private sector companies. The industries should also be permitted, like private companies, to raise project finance and have leasing and other facilities which are available to the private sector. Such freedom could be exercised within a recognised strategic guidance and would not cause serious problems of "crowding out" in the market, which is the usual objection made by the Treasury.
The experience of France is very interesting in this connection. Their industries meet the bulk of their financing needs by borrowing in their own names without explicit Government guarantee. The Government treats the State-owned competitive industries as if they were in the private sector and their borrowing is treated as if it were private sector borrowing. With regard to the present system, the application of the EFL, in their report on financing state industries the Treasury have accepted that there is no bias in the EFL system against investment expenditure, but in practice the system may tend to reduce investment programmes. This year, due to the present economic climate, this has not been a problem but frustrated investment in the state sector in 1980–81 totalled around £500 million.
One area of Government initiative which is welcome is in relation to performance targets, which are now a feature of annual reports of the national industries. I should like to see this extended not only with regard to financial and productivity objectives, but also in relation to a social audit which would include reference to employee and consumer interests—a subject which will be dealt with by my noble friend Lady Burton. This is now done increasingly by progressive private companies, which include an element of a social audit in their annual reports; and it is something which should be incorporated in the nationalised industries.
This afternoon we are discussing the relationship between the Government and the state industries and I have tried to identify some of the weaknesses of the present system. I have always felt that any Government should regard themselves as the custodians of the nation's assets represented by these great industries with a total turnover of £41 billion and responsible for 14 per cent. of the nation's fixed investment. It is a heavy responsibility, for indirectly important private sector companies, such as Plessey, BICC, Anderson Strathclyde, GEC and others, are dependent on a healthy state industry, particularly in the depressed engineering sector. Increased investment in state industry could contribute to economic recovery. How much better it would be to employ men on great and useful capital projects than to pay them to be idle and create no wealth.
I have tried this afternoon to put this House in the position of an annual shareholders' meeting, for we are in fact the shareholders in this great business and it is the duty of shareholders to try to assess the performance of the elected board—in this case the Government—and I believe they deserve censure on a number of counts.
First, they have created a climate of uncertainty and even hostility in this area. Secondly, they are selling off the nation's best-performing assets. Thirdly, they have mishandled the timing and pricing of disposals to the disadvantage of the nation. Fourthly, they have failed to provide an adequate framework for financing these industries. Fifthly, they have failed to provide a structure which lends itself to an efficiency in decision making comparable with well-run private enterprise companies, with consequent difficulties in attracting the best top management.
These are not easy problems to solve. These industries cover a wide and diverse range; but I must say that, because of the diversity of the industries, as Sir Peter Parker has said, it is only an idiot who generalises about them. Yet the two main parties tend to deal with these industries with generalisations, slogans and blanket solutions like privatisation or more nationalisation. It would be the duty of an Alliance Government to deal with these matters quite pragmatically, free from dogma and uninhibited by ideological commitment. We believe in a mixed economy. This nation has to walk on both legs, public and private, and they must be strong.
There are certain industries which should remain in the public sector. These we would endeavour to make less bureaucratic, less centralised, more efficient and with greater flexibility in financing. There are other activities which should be hived off. There are many examples of that. There should be opportunities for partnerships and for the introduction of private capital alongside public capital on certain project financing. We would also look at the possibility of extending the workers "buy-out" arrangements, which have been so successful in the National Freight Corporation. We would prepare a fresh approach, and that is what we mean by breaking the mould in British politics. I beg to move for Papers.
3.48 p.m.
Lord Beswick: My Lords, we are indebted to the noble Lord, Lord Taylor of Gryfe, for giving us this opportunity of discussing some of the problems attached to public ownership. My only regret is that it is still a "limited over" debate. I shall support much of what he said and overlook what he plugged in for the Alliance. First, however, I would put my contribution in a wider context. The question of ownership, public or private, is a matter of means and not ends. The important end is the society we want or the society we think it possible to achieve, and if we come to decisions about that, then decisions about the scope and structure of the public sector more easily follow. The present Government, as the noble Lord, Lord Taylor, said, are disposing of public assets—industries, oilfields, council houses, refuse collection equipment—at discounts of up to 50 per cent. of the market value because they believe that the ownership does not fit into their concept of tomorrow's society.

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In a lecture given at St. George's House, from which he agreed I could quote, the noble Lord, Lord Harris of High Cross, spelled out this underlying philosophy with a clarity and a force that I could but admire. He said that:
"Society needs some general magnetic force that will bring individual efforts into line."
With that I agree. He went on to discuss the possibilities of providing that force. There was, he said, affection, sense of duty, altruism, public spirit or the threat of punishment. He dismissed all those in favour of self-interest as overwhelmingly the most powerful motivation. He supported this view with a quotation from the 1662 Prayer Book, where it states:
"Man is very far gone from original righteousness and is of his own nature inclined to evil."
If we all left it at that, then privatisation, every man for himself, would be, and must be, the order of the day. But I wonder whether we ought to leave it at that. I learned at church, and in life outside, that there is good as well as bad in mankind, and it follows, in my reasoning, that the economic structure we devise should patiently aim at encouraging the warmer, hopeful values of human nature.
I shall say how I think that this should work out in the structure of socially-owned enterprise, but I would first assert that, in terms of hard economic results, the self-interest society credentials are scarcely impeccable. It is the self-interest society which leaves nearly 4 million people without work. It is the self-interest society that has so developed the techniques of usury that international indebtedness now amounts to over 900,000 million dollars and has brought the banking system near to collapse. It is the self-interest society which has given us the gutter press, a plethora of TV and the promise of 30 more cable channels, and all at a time when a National Health Service patient in my district has to wait five weeks for an X-ray examination.
On one point I am in entire agreement with the noble Lord, Lord Harris of High Cross. He emphasised in his lecture the dangers of over-centralising power. Avoiding that danger must take priority in any planning. Some of the proposals of the noble Lord, Lord Taylor, for funding could help in that avoidance and I shall come back to that. But we should not make the mistake of thinking that social ownership is synonymous with centralisation. Some of the most successful and imaginative publicly-owned enterprises, the medium-sized companies, such as Amersham International and International Aeradio, have no direct contact with central Government. More widely dispersed power is seen in the co-operataive societies. And I was pleased to see that the policy document of the Labour Party provides for increased practical encouragement and financial support to this form of social enterprise.
Of course, some decisions and overall economic strategy must be made centrally by Government after proper consultation. The national energy policy must be one. Where services are to be provided for social reasons, and Government subventions are made—for example, one thinks of some rail services—then, again, central Government must take responsibility. But once these major decisions are taken and relevant targets or criteria are agreed, then we have to reverse
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the thinking that extra effort can be stimulated by more and more checks and controls. The noble Lord, Lord Taylor, gave us an account of his experience at British Rail.
Noble Lords may have seen a recent letter to The Times from the chairman of the Gas Board. In it, Sir Denis Rooke described the machinery which now seeks to ensure that he and his workforce do their job properly. There is an internal audit staff, external auditors are appointed by the Government and there are 13 consumer councils. The corporate plan is reviewed by officials from the Department of Energy and from the Treasury. It is reviewed also by the Secretary of State. There were phased appraisals of capital expenditure, inquiries by Parliamentary Select Committees and investigations by agencies such as the Price Commission and the Monopolies Commission—and all this, I would add, attaching to an organisation which took nothing out and, in fact, paid into the national Treasury. The fact that enterprises in the public sector surmount all this says much for the dedication of men like Sir Denis Rooke and Sir Derek Ezra, as he then was; and I, for one, pay tribute to them.
It is possible—in this I speak from first-hand experience, and maybe the noble Lord, Lord Ezra, would agree—to have a friendly and constructive relationship with a sponsoring department; but the Treasury is a different thing. Wholly admirable and conscientious characters as they are, collectively I do not think that they are now fitted for the role of financiers to commercial enterprises in the public sector. The time-scale within which the Treasury must work is too limited. The budgetary criteria which they must apply are not necessarily appropriate. The present application of the PSBR will, sooner or later, be regarded as plain silly. The idea that investment in a new coalfield or a new power station should be counted as a Treasury expense, like the subsidy for the Arts Council or the expenses claimed by your Lordships, cannot easily be reconciled with economic common sense.
Initially, this Government told the Gas Board to hold back domestic prices for the good of the RPI. Then, last year, they told them to push them up 10 per cent. above inflation to fit in with some new Treasury theory. In 1979, the Chancellor told the public sector chairmen that it was vital to cut back capital spending for PSBR reasons. Then, a few months ago, the Prime Minister—no doubt realising that an election was looming, and probably recalling what the noble Lord, Lord Ezra, had said earlier, that 95 per cent. of public sector public spending went to United Kingdom suppliers and thus provided employment—went to the same public sector chairmen and asked them to spend more. I understand that she was told—politely, no doubt—that capital investment was not a tap to turn on and off like that. Some different methods of funding need not, and must not, slacken financial disciplines, but they could mean—and I agree with the noble Lord, Lord Taylor, about this—a profound psychological improvement, which in turn could yield significant economic benefit.
I have spoken in earlier debates about the useful role which can be played by a parliamentary Select Committee, but I should like again to emphasise two other elements of discipline in the present pattern

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which I believe can be developed positively and could take us toward that higher quality society. I refer to the consumer council idea and to employee participation. If an organisation can pay its way and satisfy the customer on the one side, and the producer on the other, I do not easily see who is left to complain.
We have not yet fully developed the potential of the consumer council. Independent, informed and authoritative such councils must be, but also they could be a constructive force in partnership. There are companies in the private sector which would love to have the same kind of machinery as partners in a sales drive. Of course, in some cases—Aerospace is one—the consumer council concept is inappropriate, and there competition is a spur. Where we have a national monopoly and less obvious competition, there could well be a case, in my view, for breaking that monopoly without damage to the economics. I have myself never been convinced that all the benefits that were promised from the merger of BOAC and BEA have ever actually followed. But I make it clear that the rivalry between public enterprises would be different from the present policy of picking out profitable bits for the benefit of the private entrepreneur.
As for industrial democracy, we all have much to learn if this is to make its full contribution to industrial effectiveness and to that enhanced quality of life which we seek. I told a left wing audience at an Easter conference that one requirement for further progress was a clearer recognition that the term "democracy" could not be limited to the shop floor. If a worker acquires extra qualifications and accepts extra responsibilities, he remains a worker, for all that. I was gratified to find how well this message went down. But having made that plea for a genuinely integrated workforce, it is only logical to go on to say that if we seek a satisfying sense of partnership, progress is not helped if somebody, however brilliant, is brought in from outside at a crudely disproportionate cost. A proper career structure—of growing one's own timber, as a former colleague of mine put it—must be part of that better society of the future.
I should like a Select Committee of this House to study the kind of structural problems and financing of which the noble Lord, Lord Taylor of Gryfe, spoke. But no amount of structural change will avail unless the spirit which breathes through that structure is right. I have spoken before of the damage done to that spirit by sweeping criticisms from people who ought to know better.
I saw another example of that blanket condemnation of public enterprise in an article last month by the noble Lord, Lord Blake. He is highly respected for his recording of researched fact. The noble Lord wrote—and I told him I was going to mention this:
"It is another matter whether those in work actually do any work, a question particularly relevant to the public sector which is larger, slower, more torpid, more inefficient than in any other major industrial country".
I wonder on what research the noble Lord based that statement. It is typical of some of the generalised remarks that come from the Conservative Benches. I wonder if the noble Lord, Lord Blake, would go down a pit and tell the men at the coal face that their trouble
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was torpor, or whether he would tell those who planned and executed the conversion to natural gas in this country that they were slow, or whether he would tell those friends of mine who worked in Airbus Industrie that they were one whit inferior to their German, French or Spanish counterparts. Or I wonder what exchange rate the noble Lord used to prove that our postal system was inferior to or dearer than that of every other industrial nation.
More generously, I say to the noble Lord, Lord Harris, that I respect his views about human motivations but I believe that history will show that the self-interest society, the selfish society, carries the seeds of its own destruction. To those who look to an alternative and more hopeful future of public ownership (or social ownership, as I would call it) I say that they will have a part to play. I, for one, however, accept that much fresh thought is needed to ensure that such a part is made progressively more effective.
4.4 p.m.
Lord Orr-Ewing: My Lords, the House owes a debt of gratitude to the noble Lord, Lord Taylor of Gryfe. He is one of those who have friends sitting in every part of the House. If I am critical it is not because of him or of the way that he moved the Motion. It is because I feel that both the SDP and to a great extent the Labour Party are a little vague in trying to find solutions to the problems which beset Britain's public industries.
I have been studying—here is a "plug" for the Alliance Party—the SDP's Industrial Strategy. Much of it is common to the Government's policy. Much of it is also a little vague. But I cannot go along with their proposal that the financing requirements of our nationalised industries should be excluded from the public sector borrowing requirement. It seems to me that it does not make sense. One might have a rogue public corporation unaccountable to Parliament, as they would wish, unaccountable to the Government and, above all, free to pile up debts with state credit, which means taxpayer's money standing behind such debts or such profligacy. I cannot believe that that is in the interests of the taxpayer or the future efficiency of our nationalised industries.
"By their fruits ye shall know them" should also apply to the SDP. When one looks at how they are dealing with the privatisation measures coming forward, it is a little difficult to see where their loyalties lie. The Telecommunications Bill, which will be coming to your Lordships' Chamber next Monday for its Second Reading, had its Second Reading in another place on 29th March, 1982. It is quite interesting to see where the SDP leaders stood on that issue. Mr. Roy Jenkins and Mr. Will Rodgers did not vote for the Bill and they did not vote against the Bill. In fact, they did not vote at all. When one turns to the other leaders, Mrs. Shirley Williams, Mr. David Steel and Mr. David Owen all voted against the Government. According to the introductory speech of the noble Lord, Lord Taylor of Gryfe, he is against any renationalisation. But he also seems to be against, or his party seems to be against, any measure of denationalisation such as this Government stand for and are carrying out. I have no doubt that my Front Bench will deal with the main points and will underline the achievements of this

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Government and the good relations which they have with so many of the public sector industries.
Since we are going to discuss shortly the Telecommunications Bill, perhaps I should point out that Sir George Jefferson said recently that he thought that these privatisation measures will invigorate and enhance the innovative processes within British Telecom. He looks upon it as a good measure, not as a handicapping measure. After those wise words from the man running the outfit, the SDP might be persuaded to back the Government's policy in that field and in a number of other fields as well. The trouble is—and it is known to all three parties on the Opposition side and to the party which I represent—that we have the largest public sector in the free world. It is too large for the health of the private sector, which is a diminishing part of the total. It is the private, wealth creating sector which has to carry the losses of the public sector and which has to carry all public expenditure, whether it be the educational service, the health service or local authority services. All have to be carried on the back of the private, wealth creating sector. All politicians, wherever they may sit in this House or in another place, have got to tackle this problem.
It is strange to see what a tremendous change there has been in the last 30 years. I refreshed my memory by rereading the manifesto—called Let us Face the Future—put out by the Labour Party in 1945. When you read some of the stuff now, in the light of the experience of 30 years, and more, of nationalisation, you feel that it ought to be included in a Marx Brothers' film; it would have the audience rolling in the aisles. Listen to this section about coal:
"Amalgamation under public ownership will bring great economies in operation and make it possible to modernise production methods and to raise safety standards in every colliery in the country. Public ownership of gas and electricity undertakings will lower charges."
I had my quarterly electricity bill this morning. I see that the unit cost of my electricity is now the equivalent of 5p. It was about one-twentieth of that 30 years ago.
Lord Jacques: My Lords, surely the noble Lord ought to address his complaint to his own Government and not to the electricity industry. It is they who are using the electricity industry as a means of raising taxes.
Lord Orr-Ewing: My Lords, I do not feel that I am in a position to answer such a question. All I am saying is that the price of electricity, which we were promised was going to be reduced, has not been reduced in real terms. The electricity industry, of course, has to pay the very high price of coal in this country. It could buy that coal at half the price if it was allowed to import other coal. I agree that to do so would be anti-social; but coal could be bought at a lower price—and no doubt the noble Lord, Lord Ezra, will deal with that point when he speaks later. The 1945 manifesto goes on:
"Public ownership of iron and steel. Private monopoly has maintained high prices and kept inefficient high cost plants in existence."
Is not public ownership doing exactly the same with some of our mines? I believe that the noble Lord, Lord
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Ezra, himself wanted to close some unproductive mines at one stage in South Wales as his predecessors, quite rightly, had been closing inefficient mines before him. The document goes on:
"Only if public ownership replaces private monopoly can industry become efficient".
There is not one single place to which one can point—at least, I have never been able to find it—where public ownership is more efficient than a private sector operation. Finally, the document states:
"Anti-social restrictive practices will be prohibited."
You can tell that to some of the people who suffer from closed shops. You can tell that to clients of the water workers and to patients of the hospital ancillary workers, and ask whether they have suffered from antisocial practices—they certainly have. I have no doubt that the Labour Party have learnt from that experience.
I had a terrible thought the other day. Perhaps it was a dream—or maybe it was a nightmare. It was that I would have to go out and campaign in the forthcoming general election some time in the next year for further nationalisation, which is presumably what the Labour Party are going to do. How would I explain why productivity in the ports, in the steel and coal industries, and on the railways, has been notably below the increase in productivity in the private sector despite huge capital expenditure, because they have not been denied capital? How would I explain why it is that after £100 millions have been spent on electrifying the King's Cross to Bedford railway line, the rolling stock has for many months been sitting in grass covered sidings, and has not been allowed to be used?
How would I explain why, with huge losses, labour costs have risen in most nationalised industries? How would I explain seven out of every 10 days lost in strikes in 1980 and 1981 were lost in the public sector and not in the private sector? How would I explain that prices in the nationalised industries have risen by 82.9 per cent. since the last general election, whereas the Retail Price Index has risen by only 55.8 per cent? Incidentally, when this Government came to power, we were faced with £1,000 million in subsidies which had been dressing up the position in order to keep the inflation rate down.
Above all, how would I explain that the total cost of the nationalised industries since those great days of 1945 in capital write-offs and grants has been £40,000 million at today's prices? That figure is shown in Hansard in an Written Answer given in another place on 9th November 1982.
Lord Beswick: My Lords, if the noble Lord, Lord Orr-Ewing, will allow me to intervene, I can remember 1945 as well as he can. I wonder what would have happened to the coal industry of this country if it had been left to the private owners, who were then running it down. Does the noble Lord believe that we would have had any kind of railway industry at all if it had been left in private ownership in 1945?
Lord Orr-Ewing: My Lords, I am not suggesting that we go back to breaking up the railways. I believe that there are many ways of decentralising railway organisation which would be of benefit. No one has

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ever suggested that all those pits should be closed down, yet pits are closed down regularly as they age and become non-productive or difficult to mine. This has been the policy of successive leaders in the Coal Board, as it was in the days of the private sector.
Lord Beswick: My Lords, will the noble Lord, Lord Orr-Ewing, answer my question? Does he really think that we would have had an industrial nation in Britain if rail, gas and electricity had been left in private ownership in 1945?
Lord Orr-Ewing: The answer is, Yes, my Lords. One can look all round the world and find many countries which have not thought it necessary to nationalise their electricity and all their infrastructure. Yet they are very successful and are competing very efficiently against our own products, because their costs are lower. One has only to look at other countries to see that infrastructure organisations and industries do succeed in the private sector and have succeeded in other parts of the world. I return to the point that there is no explanation for the fact that there have been £40,000 million of losses and grants, loans and capital write-offs in the nationalised industries. Just think what could have been done in this country, not only for social benefits but also in the creation of wealth if only half that money had been saved.
The Labour Party have actually revised their thinking because I have been studying their policies for the future. I have their 1982 programme and their 1983 programme which was published last month. Their current policy, spelt out in greater length in the 1982 document, is:
"We have to demonstrate the practical benefits of common ownership"—
my goodness! that is true; it will be difficult to sell that to anybody—
"showing how public enterprises can be a spearhead for innovation and new investment …"
It is a pity that I was reading that just after I read that Inmos—one of the so-called selected high technology public companies—had lost £110 million already of taxpayers' money. The programme goes on:
"making clear the benefits to both workers and consumers and exploring the best forms of organisation and different forms of common ownership."
At least that is a slight backing down from those heady days of 1945 when the Labour Party thought that by doing these things, everything would come right.
The Government have been right in the action they have taken. No one has yet shown how to stop a monopoly power, backed up by the taxpayers' money, from pounding private sector competitors into bankruptcy. That is the problem this Government also have to solve. If one takes the case of ship repairers, the last nationalisation measure of the Labour Government was the nationalisation of aerospace and shipbuilding; and within the shipbuilding sector, there were a number of ship repairers. For many years I was a director of a conglomerate company, which was involved in ship repairing. Since nationalisation, not only have British Shipbuilders lost £700 million in a relatively short period but they have been quoting prices for repairs which are half the actual costs. Who
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is propping that up? Who is paying for that? The answer is, the taxpayers of this country. So we have not solved the problem of fair and equitable competition between the private and public sectors, even when we have privatised a portion of this huge and inflated public sector.
We shall see soon the de-nationalisation of parts of British Telecom. I wish to say, although this is probably not germane to the Bill we shall be debating next Monday, that after 100 years of Post Office monopoly it will be very difficult for small private sector companies to compete with this huge monopoly. As Sir Freddie Laker discovered, it is very difficult to compete fairly with British Airways and other huge powerful operators and to prosper in the private sector. That is a problem which the Government have to solve.
I feel sorry for the Labour Party. It cannot be easy to stand on doorsteps and try to sell nationalisation, re-nationalisation and further nationalisation to the people of our nation. Every Gallup Poll that is taken shows quite clearly that the people of this country realise the disadvantages and want somebody to solve this problem. This Government at least have a programme and a plan and I only wish that the SDP and Her Majesty's Official Opposition will be a little more explicit as to how they would overcome the problems which they have created over the past 35 years.
4.19 p.m.
Lord Harris of High Cross: My Lords, I join other speakers in thanking the noble Lord, Lord Taylor of Gryfe, for bringing this Motion before your Lordships' House. Whatever our differences, we might agree that the issue he has raised is central to the economic welfare of this country. I believe it is also subject to a good deal of misunderstanding and, just occasionally, of misrepresentation—of which we have had a faint echo from the opening speeches. I thought that the view of the noble Lord, Lord Taylor of Gryfe, was generally rather complacent. It would be only slightly to parody what the noble Lord said if I were to present him as saying, "If only the Government will keep out of the way, all will be well." He certainly said we should not make a fuss about ownership but should concentrate on management, as though a responsible owner need not be most meticulously concerned with the use to which his property is put. The new truth on which the Social Democratic Party seems to operate is that the publicly owned industries belong to nobody, and the implication is that the boards should be left pretty free to do much as they please.
I thank the noble Lord, Lord Beswick, for his advertisement of my humble efforts in a published lecture. I thought on the whole that my view suffered by compression, though I do not charge the noble Lord with having wilfully selected from my views. However, I think he will recall that whenever I used the word "self-interest" I tried to disavow the notion that it meant selfishness and tried to explain that it means much more the self-chosen purposes of individuals, the argument being that people will apply their talents and efforts more zealously on behalf not just of themselves but of their families, their local causes, their churches, their region—on occasions their

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country. They will pursue their own self-chosen purposes more conscientiously than you can easily get them to work for something declared, if I may say so, by party politicians to be in the "public interest". My case was that benevolence and zeal for others is much to be desired but is on the whole a scarce resource, like beauty or eloquence, and must be reserved for those activities where you cannot easily use self-interest or self-chosen purposes to achieve your objectives. So I argued there that we must harness the self-chosen purposes of millions of people to achieve the economic progress which in the end is the source of all benefits to the consumer, the worker and to the community.
The tragedy of Lord Taylor's Motion on relations between Government and the nationalised industries is that it has come a bit late—like half a century too late. If the early pioneers of what is fancifully called "public ownership" had grasped the conflict inseparable from involving politicians in the management of vast industries, they would never have displayed such a touching faith in their essentially ideological nostrum. Indeed, an extensive search of the mostly arid early literature on the subject reveals little more than a vague aspiration that getting rid of the private capitalist would transform human nature and with it transform society.
The dubious theoretical basis was provided by the Marxist mirage of surplus value: profits would vanish and the workers, in Hugh Gaitskell's words, "will at last enjoy the full fruits of their labours". We are halfway there; profits have certainly vanished. But we may ask where are the fruits. We all have our different versions of figures. Mine are as follows: in the 10 years from 1970 to 1980, the net revenue of the nationalised sector taken together was about £25,000 million less than its total payroll. Yet over that period the average prices of nationalised output rose 25 per cent. faster than the general price index, and since 1979 public sector prices have consistently risen twice as fast as prices in the private sector. Whatever social benefits may be claimed for this experiment, there can be no dispute that they have been bought at a very high economic cost.
The implicit question posed by the noble Lord is whether Governments or the nationalised industries have been mostly to blame for these deplorable results. Back in the 1930s when Herbert Morrison was inventing the Labour Party's policy on nationalisation, he seized eagerly on the unique example of the British Broadcasting Corporation, as though it were a generalised model for the management of mammoth and complex productive undertakings. It was thus imagined that the artefact of a public corporation would insulate Government from involvement in detailed management. The familiar incantation, your Lordships will remember, was that Parliament would retain ultimate control over policy, leaving the boards with full responsibility for day to day administration.
However, Herbert Morrison's native cockney shrewdness asserted itself in a passage from his Socialisation and Transport which I would particularly commend to Mr. Kenneth Livingstone exactly 50 years later. Then Morrison, the founder of the London Passenger Transport Board, was unhappy about the idea that the Government should give a state guarantee for finance, which he thought—
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"might well have encouraged a spirit of slackness or even recklessness on the part of the Board in matters of management, on the part of the travelling public in demanding lower fares and uneconomic facilities, and on the part of the work people in asking for big concessions as to conditions of labour. All might be tempted to say 'Well, after all, we have the Treasury behind us'.".
Morrison added:
"As I have shown from the Russian experience, this is a dangerous frame of mind".
That really said it all. Yet, after 1945 the Labour Government perpetrated the fundamental folly of giving the nationalised boards for coal, transport, gas, electricity and steel, precisely these state guarantees for finance. Is it really any wonder that complaints about restrictions on capital for development go back long before Sir Peter Parker or the noble Lord, Lord Taylor, to Walter Citrine at the Central Electricity Authority in 1948?
The question I want to pose is whether such criticisms were ever well-founded. If all these vast public corporations were vested with monopoly powers, if they were further shielded by Government guarantees against the threat of bankruptcy or takeover, what discipline was left to prevent financial mismanagement or irresponsibility? What remains, except the assertion of the power of Parliament? This power rightly starts from the appointment of the boards; but it must inevitably extend to control over capital investment and even to the regulation of prices. The fatal flaw is that for all its power, Parliament is impotent to control the efficiency and costs of nationalised industries. Indeed, in the absence of competition there is neither an objective test of efficiency nor an effective incentive to minimise costs.
Recently, most devastating evidence has been published by Dr. Richard Pryke of Liverpool University, who was once a leading defender of nationalised industries. From detailed comparisons in civil aviation, channel ferries, and the retailing of gas and electrical appliances—in all of which there is competition between public and private suppliers—Dr. Pryke concludes that the public suppliers are inefficient, overmanned and generally badly run. He supports this with a good deal of impressive statistics.
Over the years Governments have vainly sought to find some control mechanism to impose efficiency on the nationalised industries, first with test discount rates, then target rates of return, followed by required rates of return, and now, as the noble Lord, Lord Taylor, told us, the external financing limits. But all of these devices remain inferior to the discipline of competitive markets. Whatever reservations we may have about market pricing, it at least provides a framework which enables us to compare the alternative uses of capital and labour. However much more sensitive souls may mock the takeover system, it provides a method of displacing failing managements for which the hawking around of chairmanships of great boards offers no good alternative. Whatever the theoretical limitations of control by shareholders, in practice the pressure of institutional investors and Stock Exchange valuations provides a spur to slack management for which parliamentary debate and ministerial telephone calls are a poor substitute.

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I agree with the noble Lord, Lord Taylor of Gryfe, that we should all read and re-read the recent book by Sir Michael Edwardes entitled Back From the Brink. From my reading, I derive two key lessons from British Leyland's precarious survival. The first is that Sir Michael shows that Government intervention again and again was based on political rather than commercial and economic motives—as when Eric Varley stopped British Leyland from closing the Prestcold plant at Hillington because it happened to crop up just before the 1979 general election.
The second lesson is that his success depended absolutely on convincing both management and men that he would not call on Her Majesty's Government to guarantee British Leyland against bankruptcy and, ultimately, liquidation if they failed to meet their targets.
I must tell your Lordships that I believe nationalised coal, railways, airways, gas, electricity and the rest, exhibit—behind a sometimes respectable cloak—many of the defects and deficiencies of British Leyland before Sir Michael Edwardes, or British Steel before Ian MacGregor. The sooner we can expose them to competition, remove Government financial guarantees, break them up, sell them off or give them to their workers to run without subsidy, the sooner will we all rid ourselves of the otherwise insoluble problem to which the noble Lord, Lord Taylor of Gryfe, has once again called our weary attention.
4.32 p.m.
Lord Ezra: My Lords, I should like, as have other noble Lords, to express appreciation to the noble Lord, Lord Taylor of Gryfe, for introducing this Motion. I am only sorry, like him, that this matter should have been the subject of a short debate, because I feel that we are tackling one of the fundamental aspects of our industrial economy. I should also like to express my personal appreciation to the noble Lord, Lord Beswick, for the kind remarks he made on my account.
I stand to speak to your Lordships as someone who served for a very long time in a nationalised industry—in fact, no less than 35 years. I joined the coal industry in 1947, shortly after it was nationalised. I served largely in a central position, and I left it only last year. Therefore, I have had experience of virtually the whole of the period of nationalisation, and I should like to speak to your Lordships in that capacity of someone who has had experience on the other side of the fence.
I must say, more in sorrow than in anger, that I feel that after 35 years we are no nearer a solution to this problem. One would have thought that over that time-span a society such as ours could at least have found some way of reconciling itself with the concept of public ownership—whether to have it or whether not to have it; and, if we do have it, how to run it more effectively.
I cannot help comparing our performance in that field with the performance of Austria, a small country at the other end of Europe, which started under the worst conceivable auspices at the end of the war, with Russian occupation and apparently left to its own
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devices by the Western allies. It reorganised its industry and ended up with an industrial structure which proportionately has more under public enterprise than we have in this country. But that has never been the subject of public political debate in Austria. In other words, they try to make it work.
I must say that what worried me as a manager—and I felt that I was a manager employed to produce the best results—was that the owner of the business kept on changing his mind on what we were meant to do. I believe, and I sincerely put this to the House, that we must try to find some way of ending this permanent argument. But it has been not only an argument about ownership. It has been an argument about all sorts of things.
We have heard the very fluent speeches from the noble Lords, Lord On-Ewing and Lord Harris of High Cross, in which they have roundly criticised public enterprise and compared it with private enterprise much to the disadvantage of the former. May I, however, humbly suggest to them that they are not comparing like with like. If one wants to criticise, for example, the coal industry of this country it is no good comparing it with a multiple store. One must compare it with the other coal industries in Western Europe; in other words with coal industries in like situations, some of which happen to be publicly owned and some privately owned. One aspect about all of them, however, is that they suffer from a similar problem of geological difficulty in mining the coal and a similar problem of making sure that the labour force is as efficient as possible and is motivated as effectively as possible, and of finding markets for their products in times of difficulty.
To take the British steel industry, the proper comparison to make is with steel in Belgium, Holland, Germany, the United States and elsewhere and then see how we compare. The fact is that publicly owned enterprises generally happen to be in the basic sectors. They generally happen to be at the heavy end of the industrial economy. Everyone who studies these things knows that there is a structural change going on in the world and a move away from the basic industries. However these industries may be owned, regulated or operated they face a problem. The challenge is not to keep on playing around with what I consider, as a manager, to be the superficialities but to recognise the reality of the problem. We must recognise that there is this structural change and ask what we should do about it and how we should face it.
The sad thing is that not only has there been this major argument about ownership but there have been, through successive Governments, continued quiet interventions throughout the piece. Let me mention three areas of relevance to any enterprise: prices, investment and wages. These are three crucial areas in the operation of any industrial or commercial enterprise which are normally left to the management to decide. The management then have to stand up to their shareholders at the end of the year, whether they have performed well or not. But I regret to say that in nationalised industries this clear-cut distinction between the owners of the business and the managers of the business in respect of these three crucial aspects has virtually never been observed.

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During my period as chairman of the NCB I was the target of attack by Ministers either for putting prices up by too much or not enough. Indeed, one of the most unfortunate arguments I had with a certain Minister not so very long ago was precisely for not putting the prices up high enough because the Treasury felt that is what should have been done. What amazed and slightly unnerved me was that in the newspapers the very next day I saw a massive attack by a leading member of the Government on the high prices of nationalised industries; and I must say that I was left in some degree of confusion.
Let us take investment. The noble Lord, Lord Taylor of Gryfe, referred to this question. Many was the time when, for reasons of public expenditure, we were asked to curtail our investment. But there have been times when we were asked to increase our investment, with no regard being paid in those requests from Government—indeed they were rather more forceful than requests—as to whether that was relevant to our situation at the time as commercial enterprises.
I do not want to quote a recent occasion when we were constrained on investment and then asked to invest more. I shall go back to the early 'seventies, when the Nationalised Chairmen's Group, of which at that time I was a member, was amazed that six months after we had received formal instructions to cut our investment, we were told to do the reverse. I remember the noble Lord, Lord Marsh—who the other day spoke to us so eloquently about the Serpell Report—saying "The only way in which on the railways I feel that I could meet the wishes of the Government would be to instruct my people to paint all railway stations another colour, so that we can quickly spend some money that way". We cannot in the nationalised industries vary the investment plans at the drop of a hat for purely external reasons; and so some continuity needs to be achieved in this important area.
When it comes to wages, it is also an unfortunate story. I have had quite a lot of experience in this difficult field, and in my opinion wage negotiations need to be left as a matter to be settled between management and unions. If there is any intervention from Government, that is bound to lead to difficulty. I do not wish to draw undue attention to this particular point, because it can be brought to mind in the memory of this House, but there have been times when Government overtly intervened in wage negotiations. In my own industry there was a time when the negotiations were actually taken over by Government. There was a time when I received visits from my good friend, the noble Lord, Lord Gormley, in which he told me—this was some years ago, and is not relevant to the present Government—"We have settled everything. It is all signed, sealed, and delivered". We had not been present at the discussion. So I rang the Secretary of State, and said, "We have been told by friend Joe that all has been settled. Is this correct, or not? We should like to know". I was told, "No, it is not correct". So what kind of situation were we left in?
I mention these matters based on my experience; I feel that we must learn by experience, and that we must try to run these organisations in some different way. As long as there is a public enterprise sector—and
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I believe that in certain areas of the economy it is unavoidable—we must work out ground rules as between the owners of the business (represented by the Government) and the managers. We must work out ground rules which are consistent, which are clearly defined, and which make sense. So I would plead for that kind of approach.
But, of course, there have been other ways in which the management of nationalised industries have been demotivated—for example, in the financing of the enterprise. The noble Lord, Lord Taylor, referred to this point, and so did the noble Lord, Lord Orr-Ewing. Up to the time that I left the Coal Board last July, we were not trying to say that we should have recourse to unlimited private finance on any hare-brained scheme; that was not at all what we wanted to do. We were trying to say that within the limits of capital investment agreed with Government, we should like to be as free as any other enterprise to borrow the money in any of the markets available. But in order to ensure that nothing that we did would upset Government funding in any other direction, we would be ready to advise the Treasury in advance of what we were doing. We said, "Please give us the chance of exercising our commercial expertise in the way in which the agreed amount of money should be raised".
At the time that we were discussing the matter we in the Coal Board, at any rate, were bound to raise money on a 15-year basis, at fixed interest rates, as they applied at the start of the funding. At a time when people expected interest rates to increase, one might have said, "That's fine"; but at a time when they were expected to decline—which was in fact the situation—this was madness. So we said to the Government, "Why can't we be free to exercise our commercial judgment like any other firm within the limits of investment laid down and agreed with you, and, subject to advising you in advance, borrow short, if we feel that it is the thing to do? If we make a mistake, you can hold us to task for it". But that, I regret to say, was not agreed, and to this day I still cannot understand why. I do not see what harm we would have caused to the financial structure of the country. These days I am fairly familiar with the City, and the noble Lord, Lord Taylor, is a colleague of mine in the City. We know that our City friends would be all too happy to co-operate in that kind of arrangement. So we must ask these questions.
The other matter to which one must draw attention is the quixotic (to say the least) manner in which the chairmen and members of boards are appointed. We really ought to try to devise a better system of doing this. I do not know whether perhaps there should be set up a body of eminent personalities, who could at least publicly recommend to Government the kind of people who ought to be appointed for such jobs. One would then know that some rational approach was made to their appointment. As it is, names appear. At the moment they appear by way of what seems to be deliberate leak. Some of the names that are deliberately leaked are suddenly "unleaked", and disappear. It is not quite clear whether or not these gentlemen were ever approached, or whether they leaked it, or whoever approached them leaked it.
I do not think that this is a rational way to operate in respect of those people who are meant to lead these

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very important enterprises. Certainly such a situation does not apply in the private sector, and I fail to see why it should apply in the public sector. So I make that plea.
The basis on which the wages and salaries paid to board members is established passes all belief. On many occasions in the NCB we appointed to our board the top officials of our industry, which was perfectly right and proper. At the time of their appointment they were given to understand by those who appointed them that this was preferment, that they would in fact be earning more as a result, in recognition of their contribution and eminence. But in fact what happened was that invariably within a couple of years these people ended up by earning less. Every time the Top Salaries Review Board made a recommendation the Government of the day would not apply it. Then we were told that the matter was to be dealt with on a flexible basis as between individual nationalised industries and the sponsoring department, but when the recommendations were put in they, too, were not accepted. I am talking here about my experience. I believe that we need to have a rational approach relating to those boards which are appointed by Government.
So we come to the question of how we sort out this whole question of the nationalised industries. I accept that it is going to be difficult. I believe that there are certain sectors which, from any party's point of view, are likely to remain publicly owned. Could we not agree that at least in those cases we have some continuity of policy, that we try to put right some of the things that have gone wrong over the past 35 years, that we try to attract the people from within to do of their best—work people and management alike?
This is an issue which goes way beyond party barriers. It is an issue that relates to the success of the industrial economy of our country. It will be a very long time before we can say that the vast bulk of industry will be either publicly or privately owned. I believe that we shall remain a mixed economy for many years. There is a hard core that will remain in the public sector. I should like to recommend to your Lordships that the aim should be to make sure that those sectors which remain publicly owned are run as efficiently as possible, and that they should be enabled to do so by the manner in which the Government deal with them.
4.51 p.m.
Baroness Burton of Coventry: My Lords, my noble friend Lord Taylor of Gryfe has called attention mainly to the financial side of the problems that beset Government and the nationalised industries. That is obviously a continuing problem. I wish, however, to deal with a different one that goes back a long time. I refer to the problem of consumer relations. Government has never been as receptive to consumer relations in nationalised industry as both common sense and realism have demanded. This is not a party issue: those of us working on consumer affairs come from all sides of the House. On seeing the list of speakers for today, I looked up my files and I drew
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comfort from the fact that going back to July 1971 the noble Lord, Lord Sandford—I think of what he did last night—and the noble Lord, Lord Beswick, both supported me on consumer councils. I also go back to 1962 when, as chairman of the Domestic Coal Consumer Council, I had the great benefit of having as a colleague Mr. Derek Ezra, as he then was, the accountant to the National Coal Board. I remember in what fear we always sat of him and his knowledge of the financial side. The names of Lord Ezra, Lord Beswick, and last night Lord Sandford, bring me up to date.
I had the privilege and the opportunity in January 1975 of opening a debate on the consumer interest in public monopoly and private corporation, and again, in April 1978, on consumers and the nationalised industries. As all those who speak in this House realise, it is a great privilege when one receives support from all sides of the House. But where did the opportunity get us? My answer would be, not very far. Five years ago, in our debate on 5th April 1978, I said that this had been a long trail for me, going back to 1950 in another place and moving on, in 1962, to your Lordships' House. I thought that it might well have seemed rather a long trail to some of your Lordships, too. From 1950 to today is, indeed, a long time—33 years. Why has it been necessary to keep on and on?
The trail in both Houses has been concerned with the right of the small person, the individual, to be heard by commerce, by industry and by Government. The aim throughout has been to give real influence to consumer representation and to improve relations between Government, nationalised industry and the consumer. In order not to weary the House with tedious repetition, I might leave the long-ago years by saying that I have always believed in the public interest and that I do not believe it to be incompatible with commercial good sense. I think that your Lordships will agree. Why, then, has it been necessary to keep on and on? In our debate of five years ago I had five suggestions to make which I thought might usefully be considered. Those suggestions concerned independence, imbalance, monopoly as judge, the question of size and the question of resistance. Are these now outdated? I wonder. Lord Taylor's Motion today provides a valuable vehicle for examination.
The Motion that we are considering provides me with at least two opportunities. The first is to ask the House to consider whether the five points of 1978 are still problems today in consumer relations. The second opportunity is to say what we, on these Benches, think should be done. Are the problems still relevant? I take first independence. Yes, this is still relevant. Any consumer body recognised officially by the Government must be seen to be completely independent of the industry concerned. Imbalance? Yes, this is as relevant as ever. I shall return to that issue. Monopoly as judge? Yes, this remains relevant to a greater or lesser degree, although not always as blatant as the example that I shall never forget. The House will, I am sure, forgive me if I say that this acting as judge-in-its-own-affairs arose at the end of July 1973 over the saga of the West London air terminal, when this House defeated both the Government and British Airways by a substantial margin. On 24th January

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1974 Miss Eirlys Roberts wrote a short letter to The Times summarising the affair, and said:
"The disquieting thing about the check-in facilities at Cromwell Road is the way in which a nationalised industry failed to consult the public about what it was doing, failed to explain why it was doing it and refused to listen to protests while it was being done."
I shall come back to the question of imbalance. I take next the question of size. This, it seems to me, will always be relevant. Sheer size seems to have defeated ordinary contact. That is why good and effective consumer councils are essential. People are reduced to despair, and sometimes I wonder if those at the top really know. I believe that size is part of the problem and that many of those at the top, who sit at a desk, honestly have no conception of what it is like to be elsewhere. The question of resistance will, I feel, always be with us. No one knows better than I the almost impenetrable wall that is put up when Government, department and nationalised industry decide to get together to impede progress or even inquiry. Against this, we shall all just have to persevere and refuse to give in. So, my Lords, I maintain that my five points, unfortunately, are relevant today.
What do we, on these Benches, suggest should be done? We start from the assumption that consumer affairs and consumer interests affect everyone. We have in the nationalised industries a series of monopolies which are often in control of essential services that people cannot do without. The prices charged are a crucial part of everyone's budget. Do we get good service? If not, what can we do? There is no choice of taking our custom elsewhere. Should we then look to the Government for help or should we try to help ourselves?
According to official statements, the output of the nationalised industries accounts for nearly 8 per cent. of gross national product while their bills cost the consumer almost 11 per cent. of his expenditure. Yet the consumer interest has never been recognised as one of the estates of the realm. Surely the consumer interest should be equated as the public interest—one no less important than any other in public monopoly and private corporation. For many years, I suggest, industry has made the error of thinking that the consumer wants only to complain. I go back to the Civil Aviation Bill on 29 July, 1971, when the noble Lord, Lord Beswick, at column 748, supported the statement and, indeed, supported a remark I had made on Second Reading of the Bill to the effect that there are many consumer matters affecting travellers that are not complaints. Obviously, to anyone with any common sense at all the user can have valuable comments to make on any product or service.
In the past the consumer side has been inadequately informed, and there is only one way in which to correct that imbalance: the secretariat of the responsible consumer council or committee must be the equivalent of the counterpart in the industry concerned. I would go along with the noble Lord, Lord Harris of High Cross, if he were to say that that suggestion could have been made many (I shall not say 50) years ago. It certainly should have been done.
Any official consumer body must have funds of its own enabling it to employ the services of experts and consultants. Those funds should be provided by Government. Only in that way will possession of facts
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and information all round the table make it possible to argue and present a case. Consumer councils should have the right to make representations and recommendations to the relevant Minister, and should these be rejected the Minister should make public his reasons. I do not know whether I can ask the noble Earl, Lord Gowrie, to comment on that, because it is probably too short notice. However, it is something about which we on the consumer side feel rather strongly.
No recent Government have succeeded in creating a system whereby consumers can influence public policy continuously, first, where it begins, then as it develops, and, finally, at the top where it becomes law. We believe that consumers must have these opportunities if they are to be listened to as industry and trade unions are listened to now. I would call in aid the remarks made here yesterday by the noble Lord, Lord Sandford, at column 102 of the Official Report, where, when speaking of Clause 7 of the Water Bill, he said:
"It is the clause which sets up consumer consultative councils in order to ensure that the consumers of the regional water authorities' services can have their complaints, their anxieties and their interests safeguarded and properly catered for. That is something which is not generally done to anybody's great satisfaction in any nationalised industry, and we must exert ourselves to see, if we possibly can, that in this case it is done properly."
So, widening the aspect, we on these Benches suggest that consumer interests are the common interests of the individuals who make up our society. They are far more than mere shoppers' interests. I hope and believe that most people would accept that any improvement in our economy, in our social conditions and in the health and happiness of our whole society must be based on consumer interests. Laws for protecting consumers are futile unless they are enforced. This means that there must be both enforcement authorities and cheap, simple, decisive legal procedures whereby individuals can defend their own rights. This does not mean more bureaucracy; it means cutting through the maze of legal jargon that it is almost impossible to understand, that takes far too long to reach a decision and the prospective cost of which is terrifying to the ordinary citizen.
I am hoping that what I have been saying forms a background to the problems which beset government and the nationalised industries in the wide area of consumer affairs. I would suggest that what I said earlier really is indisputable—namely, that we have in the nationalised industries a series of monopolies which are often in control of essential services that people cannot do without. If a change is to be made, it must be made by political means—by a political party committed to securing the interests of people in general particularly where there is some injustice, where something needs to be put right, where bureaucracy needs puncturing.
In offering, obviously, the strongest support to the Motion of my noble friend Lord Taylor, I would conclude by emphasising that we believe that the small person, the individual, has a right to be recognised and, indeed, to be heard by commerce and industry, by Governments and all Government departments. We believe that the individual should be recognised. We hope that what has been said from these Benches today shows that the SDP intends to bring this about.
5.6 p.m.
Lord Wilson of Langside: My Lords, I did not at all grudge the noble Lord, Lord Harris of High Cross, his fun at the expense of the Social Democratic Party. Indeed, it was good natured and, here and there, there may have been a point which all of us up here might well take to heart. I was a little disappointed, on the other hand, when he suggested (if I did not misunderstand him) that we should be moving further in the direction of denationalisation and should be less concerned with the issues which, as he put it, Lord Taylor of Gryfe has drawn our weary attention to. Of course, we are much indebted to the noble Lord, Lord Taylor, for moving his Motion, and, although Lord Harris is apparently weary of those issues to which his Motion refers, we here certainly are not. And why? It is because it deals with the problems of the relations between Her Majesty's Government and the nationalised industries, and if we did not know before we surely know now, having listened to the speech of noble Lord, Lord Ezra, that there is a problem, that it is a perennial problem and that if we do not get it solved, and solved soon, it will become worse rather than better. So let us not be weary about it.
I wonder whether, in the few minutes of your Lordships' time which I shall occupy, I could usefully engage in two rather elementary historical reflections, because it may throw some light on the issue of this debate. It may be that 50 or 100 years ago the idea propagated by socialists, and perhaps by others, that production should be for use rather than for profit, then had something to commend it. Some may think that it still has. But, surely, nationalisation today is neither good nor bad. Even in peacetime a certain measure of nationalisation may, may it not, be a matter of national survival, of economic and industrial survival? Was that not the case with, for example, the Act passed by the Government of Mr. Stanley Baldwin, as he then was, nationalising the generating side of the electricity supply industry? Whatever may be said about the structure which he or his Government adopted for the generating board of those days, I should have thought that industry could not have given us what we needed to win Hitler's war if we had not had the national grid. What is more, I should have thought that, after Hitler's war was over, if the Government of the day had left the supply side of the electricity industry in the hands of the 596 or so companies who were then on the job, we would not have had the electricity to achieve industrial and economic recovery.
It may be that the board was not an ideal set up. It may be that there has been bureaucracy, shortcomings and so on. But in politics it is a matter of alternatives. Of course, in war it can be a matter of national survival. It may be that some of your Lordships here were in the wartime Government; I cannot recall offhand. But my recollection is that when industry was required to supply the weapons of war and was not achieving the job, the first thing the Govenment did during the war was to put in a controller. My recollection is that more often than not it did not work. What they had to do then, in the conditions of war-time—I am not suggesting we should do it in peace-time—was to take over ownership as well as control. This was one of the arguments that was used by Sir Stafford Cripps when in 1949 the Labour Govenment was
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nationalising—wisely or unwisely, as you chose to judge—the iron and steel industry. That is my first historical reflection.
My second one derives from the gospel according to Karl Marx. I never much liked him; I found him a great bore, perhaps because I could not understand him, although the Communist manifesto has a rich political flavour that one can still enjoy. But my recollection is that for him and his immediate followers the millenium was not a state of affairs in which the nation state was in full control of everything; the millenium was to be the glorious socialist day when the powers of the state withered away and we were all going to live in a state of what he called "happy anarchism". When I listen to the Prime Minister—in fact, I do not think that I am allowed to say the Prime Minister because I think we must keep it impersonal—but when I listen to her, I often think she has something in common with the late Karl Marx. History is frequent in her desire for the withering away of the powers of the state. What is funny about that? This is deadly serious. History often makes strange bedfellows, but I should have thought that if there were entries in the Guiness Book for such matters, the fellowship of the Prime Minister and the late Karl Marx would probably achieve an insertion.
Quite seriously, the attitude of Ministers towards the nationalised industries, as it appears to those of us outside Government, seems to be dominated by party dogma. I do not say political dogma, because I think that politics ought to be an honourable calling. Indeed, it is only in relatively modern times that it has become something of a dirty word—and when I say "relatively modern times" I mean over the last 300 years or so. So I say party dogma. They do not seem to be able to stand back and look at the problem in any other context—in the sort of context which was presented by the noble Lord, Lord Taylor of Gryfe, when he opened this debate, for which we are in his debt.
5.13 p.m.
The Minister of State, Northern Ireland Office (The Earl of Gowrie): My Lords, I am more than conventionally grateful to the noble Lord, Lord Taylor of Gryfe, for causing us to debate this afternoon this topic of the relationship between Her Majesty's Government and the nationalised industries. Give or take a month or two there must be a general election within a year. Our constitution is, of course, a free one, and it allows the political parties the chance to compete in offering clear choices to the public. Nowhere is the choice clearer, surely, than over this issue of the right approach to the nationalised industries by Government. In my view, the Social Democrats, whom the noble Lord supports, are ambivalent in their approach. On the one hand, they recognise that all is not well with the industries, and here they are quite close to the Government. On the other hand, they make great play, as the noble Lord did, of the need for continuity and stability, and they shrink from making changes. Their motto seems to be, "Don't shoot the pianist—he is doing his best". That is not an unreasonable policy, and I shall try to deal with it in a little more depth in a few moments, but it is not one which is liable to give us much in the way of a concert.

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The official Opposition, by contrast—the Labour Party—are quite unambivalent. The mother tigress suspects that her cubs are being snatched from her, not realising that they have grown up and need to go their own ways. She also wants to bear a lot more cubs, not realising, sadly, that the same passage of time has seen to it that she is rather past it. By contrast, the Government are quite clear about the need for present policy to continue in the next Parliament. We believe that the nationalised system has proved itself a failure overall, and even the noble Lord, Lord Ezra, admittedly from a different perspective, said that after 35 years of his experience at the heart of the nationalised industries we are no nearer finding a solution to the relations between Government and nationalised industries than when he started his immensely distinguished career.
But now, for the first time since the war, the size of the publically-owned sector of industry is being reduced on a significant scale, and that surely hardly strikes an uncertain note, as the noble Lord, Lord Taylor, accused. Make no doubt about it: the return of the Government at the next election will see this process continue. That is not because we are doctrinaire or governed by dogma, as the noble and learned Lord, Lord Wilson of Langside, suggested: no, but because, as I shall illustrate, examination of the record of the nationalised industries and analysis of their effects for the rest of the economy argues the case for us.
I am also grateful to the noble Lord because Parliament has continually maintained a close interest in nationalised industries; and, of course, this is right. The 17 or so nationalised industries dominate the energy, transport, communication, steel and shipbuilding industries. Overall, they account for about a tenth of the United Kingdom's gross domestic product, roughly a seventh of total investment in the economy, and around a tenth of the RPI. They employ about one and half million people out of our total labour force of some 25 million. Their performance has an important impact on the United Kingdom economy, and directly affects every individual in the United Kingdom. I am glad to say that they also attract the talents and abilities of some of our most outstanding people. Whether in Northern Ireland, where I have a particular interest, in Scotland, where the noble Lord who introduced the debate has his particular expertise, or elsewhere, the industries are by any measurement major features of our national economic scene.
If we are to see the way ahead, it is worth reminding ourselves of the background to the existence of the nationalised industries. One of the great early enthusiasts for the concept was Herbert Morrison—and here I am following in the footsteps of the noble Lord, Lord Harris, in going back to this fountain of nationalised wisdom. If the noble and learned Lord, Lord Wilson, can talk of Cripps and Marx, I think that I may talk about Herbert Morrison. No one would dispute the honesty and integrity with which Mr. Morrison set out in the 1930s the principles that should govern nationalised industries; but in the light of experience since that time, who now believes that the theories held dear in those days have turned out successful in practice?
In his book, Socialisation of Transport, published in 1933, Herbert Morrison set out what he saw as the
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chief theoretical benefits of nationalisation, and they included the following:
"The quality of service will tend to advance and the price charged will tend to fall.
"The industry itself will be more efficiently and economically conducted.
"The board [of the nationalised industry] and its officers must regard themselves as the high custodians of the public interest".
Unfortunately, experience over many years shows that the industries, left to their own devices, cannot be relied on to react in the way that Herbert Morrison described. This is not a matter of party doctrine but is based on considerable evidence. In the real world, where the United Kingdom has necessarily to compete with other countries, where productivity counts for more than idealism and competitiveness more than theory, can we honestly say that Herbert Morrison's ideals have worked to the benefit of the consumer, or caused the nationalised industries to act in the most efficient way in their own or the national interest?
Any impartial observer is bound to say that the performance has been disappointing. Even the Labour Party, who are not, of course, impartial about the institutions they created (why should they be?), said in a policy document of last year, as my noble friend Lord Orr-Ewing reminded us:
"We have to demonstrate the practical benefits of common ownership".
Nearly 40 years since their programme of nationalisation got under way the practical benefits still need demonstrating!
Since the mid-1960s the industries' total return on capital employed has been significantly below that of the private sector, even allowing for subsidies. The cost of capital written off and grants since 1945 has been £40 billion at today's prices, and £8 billion in the last seven years alone. This burden has to be borne by taxes and borrowing, thus helping to drive up wage dfemands, helping to drive up interest rates, and creating the inflation which the previous Prime Minister, Mr. Callaghan, may I remind the House, and not just the present Prime Minister, reminded us was "the mother and father of unemployment".
Since the early 1970s—nearer our own day—the industries' aggregate returns on investment have not been significantly above zero, and in some sectors well below. Of course, a large part of the problem has been poorly chosen investment inadequately used, and there have been many examples of this. I know it is easy to be wise after the event, but such strategic decisions have become a perennial problem in many industries. Again as my noble friend Lord Orr-Ewing reminded us, we have the largest public sector in the free world—a scale that has to be paid for.
Then there is the nationalised industries' record on prices. Over the past 10 years or so prices have run significantly ahead of retail prices generally. Between January 1970 and January of this year nationalised industry domestic prices rose by about 500 per cent., compared with a 360 per cent. increase in the retail price index. I am not saying that the blame for these increases can altogether be laid at the industries' door. Oil price increases, for example, have had a knock-on impact on other energy prices. But the most important underlying factor has been the industries' own performance. If an industry's current costs cannot be

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contained in the way of private sector companies, either the consumer or the taxpayer has to pay. It is gratifying, and a reflection of the emerging success of our policies, that in this fiscal year 1983–84 we expect nationalised industry prices to increase less rapidly than the overall RPI. I am delighted to be able to tell my noble friend Lord On-Ewing, who alas is having trouble with his electricity bills, that there is to be a standstill in 1983–84, and that this standstill is not imposed by the Government but by a proper appraisal by the industry of their current costs.
In the same way, on both productivity and manpower the performance has been disappointing. I do not want to belittle the great improvements in productivity which the capital-intensive industries have made in recent years, including, of course, the industry until recently so ably headed by the noble Lord, Lord Ezra. All credit to them, even if such improvements are to be expected of industries in a favourable technological position. But inevitably the older, labour-intensive industries have shown a poorer productivity performance well behind the national average, and inevitably changes have to take place. I say "inevitably" because, as the noble Lord, Lord Ezra, reminded us, a great change is taking place in the old primary industries.
The recent reports of the Monopolies and Mergers Commission on the retailing of domestic gas appliances, British Rail's London and south-eastern commuter services, the Severn-Trent Water Authority and the inner London letter post make interesting but immensely gloomy reading. I would remind the House that these reports were not written by doctrinaire Conservatives. On the inner London letter post, for example, the commission noted that productivity had declined by between 20 per cent. and 25 per cent. from 1968 to 1979, and observed numerous practices which had contributed to this and caused an associated decline in the service.
Although it cannot be justified by productivity, most of the large industries' employment costs per employee increased faster than the national average over the period 1970–71 to 1981–82, and in many cases much faster. For example, employment costs per employee in the gas industry rose 34 per cent. more than the national average; in the coal industry by 20 per cent.; and in the telecommunications and electricity industries by 14 per cent.
Faced with these facts rather than with the dogmas, what is the Labour Party's response to such performance? It is easily stated. Not only are they committed to wholesale renationalisation of all the industries which we have transferred to the private sector over the past four years, but, to quote their latest campaign document, they want to,
"establish a significant public stake in electronics, pharmaceuticals, health equipment and building materials, and also in other important sectors, as required in the national interest".
What an extraordinarily response to electronics and to the new technologies—to nationalise them!
Lord BeswickMy Lords, the noble Earl has been very helpful; he has been very factual. If, as he said, the gas prices were so high, would he say why the Government insisted that they be put up an extra 10
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per cent. above the inflation rate? When he is talking about postal prices, would he not leave the average at 1979 but tell us what it is up to date?
The Earl of Gowrie: My Lords, I would have to have notice of the second question, but the first I can easily answer. The fact is that, as the noble Lord well knows, energy prices are linked with the price of oil, over which the Government, sadly, have no control. But it is incumbent on the industries to compensate for those costs in international oil prices by looking to their own internal costs. That is what we have urged them to do, and I am glad to say that in the main they have successfully done just that. I do not consider that that campaign statement bears much relation to the national interest. It is true to what I have always felt is the fascinating conservatism which informs the Labour Party on these matters, the way it continues to cling to a belief in the theoretical benefits of nationalisation expressed by the late Herbert Morrison.
What will the cost of these policies be? My right honourable friend the Chief Secretary has estimated that the cost of the nationalisation, renationalisation and energy programmes might be some £20 billion. Does anyone anywhere, quite outside the confines of my own political party, honestly believe that such sums would be well spent?
May I come now, by contrast, to the SDP/Liberal Alliance. As the noble Lord, Lord Taylor, told us, they regard the efficiency of these industries, not their ownership, as the important issue. That sounds reasonable until you notice that they do not discuss the obvious link between the two. They admit that no-one is happy with the present arrangement. They divide the nationalised industries into two categories: first, the category in which the market also operates, which they want to privatise; and, secondly, those, mainly utilities, which are regarded as natural monopolies and cannot be easily made subject to market disciplines. They should be exposed to competition wherever possible, and be subject to more effective monitoring by a special audit commission; their management should be appointed by supervisory boards independent of Ministers, and their financing excluded from the PSBR.
In all except the last respects, this policy is similar to the Government's. But the suggestion that Ministers should have no control over the management or financing of these public charges raises the awful spectre of public corporations unaccountable to Parliament or the Government and free to pile up debt on the state's slate. That does not sound like Mr. Roy Jenkins—he of the admirably balanced Budgets—to me. We must take the sensible bits of policy with a pinch of salt when we remember that the SDLP and the Liberals voted with Labour during last year's debate on the Address on a Motion,
"regretting that the gracious Speech contains proposals which, in putting private profit before public interest, strip the nation's North Sea oil and gas assets".
That does not sound to me like the indifference to questions of ownership of the noble Lord, Lord Taylor, and it surely falls into the old trap of believing that ownership of shares of companies, whether by individuals or institutions on behalf of individuals, is

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in some curious way less patriotic and less public than ownership by state corporations. That does not sound to me like the liberalism of Mr. Grimond, either. Nor can I find any evidence that allows me to feel, with the noble Lord, Lord Beswick, that state corporations somehow encourage, in his words, the "warmer and more hopeful" side of human nature.
If we want to improve things, we must ask the harsh question why industries' performance has been so disappointing. The heart of the matter, it seems to us, is that, left to their own devices, the industries have no real incentive to improve their performance or strive for greater efficiency. In many cases there has been an absence of competition and market disciplines. If the Government stand behind the industries and are viewed as possessing a bottomless purse, it is no wonder that inefficiencies flourish and market responsiveness does not stand high in an industry's scale of priorities. The consumer and taxpayer have both suffered from this, as indeed has the whole community.
Although performance in the past has not been all that it might have been, I am not pessimistic about the future. The noble Lord referred to problems between the industries and the Government. Of course, tensions are liable to exist, and it would be unnatural if there were not genuine differences of view. The differences must be resolved through discussion and consultation. I listened to the Dimbleby Lecture, and Sir Peter Parker had some interesting suggestions on this subject. No one is looking for acrimony, but I am sure all noble Lords would acknowledge that, in the final analysis, Ministers and Parliament, not the chairmen, must be the guardians of the public interest.
It has been clear to the Government since taking office that the wind of competition must be allowed to blow through the public sector and that we must ensure that the nationalised industries are subjected to the kinds of financial disciplines that are commonplace in the private sector; and here, with the EFL philosophy, we have been following in the footsteps of the previous Government.
The most substantive point I wish to make at the conclusion of the debate is that I have no doubt, with the noble Lord, Lord Harris, that in the end the most effective discipline to apply to the nationalised industries is the discipline of the market place. Our struggle to exert effective pressure on the nationalised industries has reinforced our conviction that competition, the introduction of market forces and, wherever possible, ownership by the public rather than by the state should be encouraged.
That last point is most important, not because we entertain a doctrinaire, irrational prejudice against publicly owned industry but because we believe that the whole economy—which means the taxpayer and the consumer; I was interested in the remarks of the noble Baroness, Lady Burton, in that regard—will benefit because competition means consumer choice and consumer choice means better service.
I hasten to add that I am talking about the operation of the industries themselves, not the provision by them of specific services to the public. Of course, public services must be maintained; for example, in transport, subsidies may need to continue. There is
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nothing damaging about subsidies in that sort of instance, where the Government, as it were, on behalf of the public, act as client to the industry, as contractor. But overall, how much better value it would be to be able to pay subsidy to an efficient competitive company, whether or not in the state sector, than to a monolith much less responsive to the needs of the consumer.
Public ownership in itself contains no guarantees that consumers will benefit, and all recent opinion polls I have seen acknowledge that, including the majority of sections of opinion tested loyal to Labour. Again, all the evidence suggests that we are talking of perceived realities rather than doctrine. Your Lordships may be interested to learn of just two examples of contracting out privately of local authority services. The Borough of Malden saved £50,000 on its £187,000 refuse collection budget by contracting out; and Southend saved £400,000 out of its £2·2 million budget for street cleaning, refuse collection and lavatory maintenance. And what large job opportunities there would be for young people or people at the bottom of the earnings ladder if more local authorities would only follow suit.
Through our programme of privatisation, we have reduced the burden of the public sector on the rest of the economy. We have achieved this both through the proceeds from sales of assets, which reduce the public expenditure planning total, and through the removal of any future borrowing requirements from PSBR. By the end of 1982–83, the programme of special asset sales will have brought in receipts of about £2 billion, and we are expecting at least a further £2½ billion over the next three years. All these receipts directly reduce the public sector borrowing requirement, with all that implies for inflation, taxes, interest rates and employment.
The noble Lord, Lord Beswick, gave the game away by saying how much better it would be if nationalised industry funding did not show up on the PSBR. Indeed, how nice it would be, but so long as there may be a call on public money, that money must be budgeted for. Blaming the Treasury for this fact of life is rather like blaming the postal system for delivering your bills. As for the point made following Lord Beswick's remark by the noble Lord, Lord Ezra, the problem again is that the City and money markets, nationally and internationally, view borrowing by public industries as being on all fours with borrowing in the public sector generally. Again, the answer to that difficulty would seem to be: where possible, privatise the corporations.
Lord Ezra: My Lords, I still fail to see what harm would be done so long as public enterprises were limited in the amount of money they could borrow, were controlled as to their investment, which they are, and were then left to borrow that amount as best they could and, before going outside the National Loan Fund, were to advise the Government that they were doing it. That would be one small way in which they could operate more commercially without any conceivable harm to the national economy.
The Earl of Gowrie: They could do just what the noble Lord suggests if they were in the private sector,

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my Lords. The difficulty is that when they are in the public sector, it is not that they lose the need to borrow money but that the money markets judge the Government as being behind them. Therefore, their borrowing in the long run is not commercial borrowing; it is measured in with state borrowing and totted up with the other kinds of paper which the Government are issuing. That is nothing to do with Tory dogma. That has been the case with successive Governments over the years and no one has been able to change it. If the noble Lord should find himself—as would, I am sure, be desirable in any future Government—as a Treasury Minister, he will run up against that fact of life just as much as previous Ministers have done.
I have an exciting catalogue before me of the Government's achievements in privatisation. They are well known, so I need not go over them. When we have transferred ownership in this way, either to individuals or to institutions investing moneys on behalf of individuals, it seems quite extraordinary to look on that as some kind of stripping of national assets. Those assets have been returned to the nation from corporations which have so far been running them. I see nothing wrong or unpatriotic in that, and it gets over many of the difficulties, not least in financing, which have been mentioned in the debate.
I should say that our drive for efficiency is not restricted to privatisation. The public utilities and so-called natural monopolies cannot be allowed permanently to remain unchallenged. We agree wholeheartedly with the noble Baroness, Lady Burton, on that. It is a vital part of our policy to foster competition in the industries wherever monopoly powers exist. We have already taken steps to encourage competition in telecommunications, in energy supply, in transport and in postal service. We will not hesitate to take further action where this is necessary. Exposing the industries to the full vigour of competitive pressures in the market is vital to the economic resurgence of Britain. We cannot leave industries containing one-tenth of our productive capacity to be feather-bedded either by monopoly powers or by the knowledge that the public purse is always open to them. We are proud of the success that we have had in this area and again it will come as no surprise to noble Lords to know that we intend to press on with renewed vigour in the next Parliament.
So far as financial disciplines are concerned—and these have been raised—differences between the Government and the industries are minimised if the Government set a firm framework within which they must operate and give consistent signals to what is required from industries. External financing limits, financial targets, performance aims and regular external scrutinies, for instance, by the Monopolies and Mergers Commission have all put pressure on industries to put their own house in order. We are introducing clear objectives for each industry and trying to put our own house in order, too, by increasing the business expertise of those who serve in the sponsoring departments.
I believe that the noble Lord, Lord Taylor, was too pessimistic when introducing the Motion. Of course, there have been, and always will be, problems and
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tensions in the relationship between the Government and the nationalised industries. That is principally, in our judgment, because it is a fundamentally unnatural relationship. That is why we believe that a greater injection of competition and market disciplines including the transfer of ownership wherever possible are the best solutions. In the meantime, there have been a number of evolutionary changes introduced over the last four years which I hope will be of lasting benefit.
If I were to take the opportunity of leaving a last message with your Lordships, it would be that inefficiency is no good whether it is in public or in private industry. In due course, inexorable market forces assert themselves and the cure for these effects is very painful indeed. Other Governments have tried to conceal inefficiences by subsidy or by looking the other way. I believe that we have faced up honestly to the competing requirements and needs of the economy, the consumer, the taxpayer and the industries themselves and have struck a difficult but realistic balance and one appropriate to national and international conditions as we go towards the end of our century.
Baroness Burton of Coventry: My Lords, before the noble Earl sits down, may I ask him a question, not because of any self-importance on my part? I wonder whether the noble Earl realises the unfortunate effect it has when it is left to the House and to organisations outside to gather, in regard to the brief prepared for him today, that it had not occurred to the people preparing it that on a matter of Government relations with the nationalised industries questions affecting the consumer might arise. I do not blame the noble Earl, but I wonder if he feels able to ensure that some answers are given to the points which I have raised, so that they can remove the impression which has been given outside.
The Earl of Gowrie: My Lords, two points: in my remarks—in a section which I wrote myself, if I may say so—the needs of the consumer were taken up. If the noble Baroness refers to Hansard tomorrow she will see that. As to the specific point that she puts, the Treasury Box did send me down an answer but I am aware that this is a short debate, time is running out; so, if I may, I will write to the noble Baroness.
5.45 p.m.
Lord Taylor of Gryfe: My Lords, I should like to thank all who have participated in this debate this afternoon, and particularly my colleagues, who supported me. I much welcome the balanced statement on behalf of the Labour Front Bench by the noble Lord, Lord Beswick. I am delighted that my argument was strengthened very forcibly by the contribution of the noble Lord, Lord Ezra, drawing on his vast experience in this field. If I may say so, I am a great admirer of the noble Earl, Lord Gowrie. He speaks with wit and wisdom; but I must confess that on this particular occasion he has hardly dealt with the issues which were raised. The issues raised were about the organisation and structure of the Government with the nationalised industries; and there is general agreement that all is not well in this field.

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The solution of the noble Earl, Lord Gowrie, seems to be to sell them off, to subject them to market forces and all will be well. That is not really facing the problem in a responsible way. That is an exercise in dogma which has no reality; because some of the nationalised industries will remain in the public sector because there are no takers in the market. It will be an interesting exercise to try to sell off British Rail or British Steel or some of the other nationalised industries. What I have sought to do today and what the House has sought to do today is to inquire into whether the structure is right in the relationship between Government and these industries, which must remain, irrespective of dogma. I must say that the noble Earl has not really dealt with that problem.
He says that in the financing of the industries, which is a crucial area, it would not be possible to release these industries into the market because the Government would lose control. But the noble Lord, Lord Ezra, has pointed out that the total borrowings could still be within the agreed strategic total of agreed investment plans and that what these industries are seeking is the right to go into the market, as private industries do, and enjoy some of the sophisticated financial arrangements provided in leasing and other project financing which might help them.
Nor is the noble Earl clear on the challenge when he says that there is nothing wrong with selling off the profitable parts of the public sector because it reduces the PSBR. I invite him to look at the illustration which I gave of British Rail, in which you are selling off sites which have a potential development value with a growth factor feeding into British Rail; and that if you sell off these sites, or if you sell off the profitable parts of British Leyland, it will make a greater claim on the PSBR on behalf of the industries concerned. He is not facing the fact that there is asset stripping on a very large scale by the Government, to the detriment of the continued welfare and operation of the industries for which they have responsibility.
I know that this is a short debate. I should hope that the airing of these difficulties would enable the Government and other Members of this House to look at the serious problem we are trying to highlight. It is unfortunate that the Government's reply was a dogmatic reply—"Sell off!, Sell off!", without facing the real difficulties mentioned in the various contributions made. While I now beg leave to withdraw the Motion for Papers, I should hope that some of the things that were said this afternoon will get serious consideration, because it is a continuing problem.
Motion for Papers, by leave, withdrawn.

Nuclear Material (Offences) Bill
5.49 p.m.
Lord Glenarthur: My Lords, on behalf of my noble friend Lord Elton, may I say that I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to
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move, on behalf of my noble friend, that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Glenarthur.)
On Question, Motion agreed to.

Licensing (Occasional Permissions) Bill
Baroness Trumpington: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Baroness Trumpington.)
On Question, Motion agreed to.

Water Bill
5.51 p.m.
Lord Skelmersdale: My Lords, on behalf of my noble friend, I beg to move that the House do now resolve itself into a Committee, and I believe it is right on this occasion to break the cardinal rule of public speaking: never begin with an apology! However, having studied the Official Report of yesterday's proceedings in your Lordships' House on the Water Bill, it is clear that the matter which was of greatest concern to your Lordships—indeed, the matter on which more than on anything else turned the decision which your Lordships eventually took—was the three-week interval between the Committee stage on 8th March and the Parliamentary Answer setting out the Government's position on Clause 7 which I gave to my noble friend Lady Trumpington.
As my noble friend Lord Bellwin pointed out yesterday, we wanted to consider carefully the point which my noble friend Lord Sandford had made on 8th March and also what other noble Lords said on that occasion. However, bearing in mind the importance of the issues, I must accept that three weeks was much too long a period if your Lordships were to have adequate time to prepare for the next stage of the Bill. I apologise unreservedly, and may I say that we are prepared for the full debate this afternoon which I know your Lordships will wish to have on these important matters.
Having said that, on behalf of my noble friend Lord Bellwin, I beg to move that the House do now resolve itself into a Committee on Clause 7 of the Bill.
Moved, That the House do now resolve itself into a Committee on Clause 7 of the Bill.—(Lord Skelmersdale.)
On Question, Motion agree to.
House in Commiottee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 7 [Arrangements by water authorities for representation of consumers' interests]:
Lord Hemingford Lord Hemingford moved Amendment No. 1:
Page 5, line 26, at end insert ("and for enabling public discussion and review of all policy issues before the water authority makes decisions thereon.").
The noble Lord said: I beg to move the amendment standing in my name and the names of others more eminent than I am. The purpose of this amendment is to put into the Bill a clear obligation on the water authorities to make themselves amenable to public particpation in decision making. We are dealing here with legislation which I think may well be on the statute book for some time, and Governments of various hues may be administering it. We should not assume that it can be left to what might be cosy arrangements between the Secretary of State and the chairmen of the water authorities to determine whether the public is able to participate in the formulation of water policy.
In this process I believe the press, about which I shall declare an interest in a minute, would play an important part. It is hardly to be believed that the public would be aware of what water authorities intended unless the press, radio and television were conveying that to them. But we are not talking here about the narrow interests of the press, radio and television: we are talking about the ability of the citizen to argue before the event against some proposed course of action adopted by a body which has the power to tax. That is why, although I am happy to declare an interest as a member of the Guild of British Newspaper Editors and as someone who works for the Westminster Press, I do not think it is perhaps especially necessary in putting forward this particular amendment.
It is true that the draft guidelines formulated by the Secretary of State for regional water authorities provide that the authority is expected—and I quote—
"to invite the CCC's advice on questions of a general character affecting some or all of their consumers in a particular area or more widely."
It is also true that the guidelines contain the following injunction:
"Water authorities and companies should be obliged to inform a CCC of their general plans and arrangements and to provide such supporting information as is necessary for a CCC to discharge its functions, and should be obliged to consult CCCs before putting into effect proposals with significant implications for their consumers; for example, charges."
But none of this guarantees that there will be time between ventilation of the subject with the CCC and the decision-making meeting of the water authority for the public to have a say. The paragraphs which deal with the frequency and timing of meetings mean that in fact a CCC could be consulted on Monday and the water authority could make its decision on Tuesday, with no possibility of any public debate or intervention in the process. When people in authority wish to keep things dark, they are not always above manoeuvres of that kind, and I believe that we need to put into the statute something which will save them from the temptation.
The purpose of the CCCs must be to enable water policy to be publicly debated so that the views of the consumers can be taken into account. The CCCs, I am
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sure, will be staffed by splendid people with their fingers accurately on the public pulse, but they are not themselves a substitute for public opinion generally, and it would be a mistake to think of them as such. In that case, there is every reason to prescribe what they do and how they do it, so as to avoid any possibility of their being hijacked at some future date by the authorities which they are meant to be scrutinising. The debate on this Bill has been punctuated by the wish of noble Lords to make its provisions more precise. I believe this is a case of writing into the Bill what are probably the intentions of the present Government, and I submit that there is everything to be said for committing future administrations to the same practice.
Lord Ardwick: This amendment fits very well into the following series of amendments under the name of the noble Lord, Lord Sandford, in that it endeavours to strengthen the purposes and the functions of the consumer councils; and anybody who heard the noble Baroness, Lady Burton, speaking in the last debate will, I think, feel that these are very necessary measures. At an earlier stage of the debates on this Bill all the sponsors of this amendment were sponsors of another one which provided for the admission of the press to meetings of the water authorities. That was rejected after the Minister had contended that the new boards were of a different nature—of a more executive nature—from the former boards, although making exactly the same kinds of decisions. I myself still think that the press should be there, but one cannot reopen that issue. What one can say is that the press would have been in attendance, not because they enjoyed a privilege: they would have enjoyed merely a facility which enabled them to be the eyes and ears of the public, and especially those members of the public who pay a very substantial water rate. In other words, the right of press access was the right of public access.
What some editors pointed out to us at the time was that what they thought was of enormous value—perhaps of even greater value than the presence of their reporters at the meetings—was the access that they had to the papers which were to be presented to future meetings of the board. By presenting those papers and those proposals to the public before the meeting, the newspapers could give public opinion the chance to consider and to make representations on controversial issues.
The intention is that the press should be present at these meetings of the consumer bodies, but it would be of little use if these bodies were merely told what the board had decided and why. This would not be participation; it would not even be consultation. It would be a mere public relations job—a justification of the decisions that the authority had taken or were on the point of taking. What the consumer bodies will need to know is what the board intend to do and the reasons for their decisions. Then the committees and the press together could bring public opinion to bear on the way in which public money is to be spent, if public opinion is not satisfied with what the board intend to do or the way the board intend to do it.
6.2 p.m.
Baroness Trumpington: I opposed the amendment at the previous stage. I call this a rose by any other

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name. It is exactly the same kind of amendment which we have here. In my view, it emasculates the role of the board. Furthermore, if you have newspapers of the ilk of The Londoner giving their opinion on the work of the water council, you will get a very one-sided view. There are several newspapers which would not give impartial views and I feel very strongly that this amendment should be resisted.
Lord Mottistone: I should very much like to support my noble friend Lady Trumpington. The key issue which we must not forget is that the object of this Bill is to give the water authorities a chance to work in a commercial way, so that they will have the ability to make their decisions sensibly, without all the troubles that happen when there are all sorts of other bodies looking over your shoulder which you have to bother about. I should have thought that this amendment was unnecessary—and I rather thought that in introducing it the noble Lord, Lord Hemingford, indicated that—because it is taken care of by the Government's own clause which we are talking about, and also by their thoughts on the guidelines which they will give, referred to in answer to a Parliamentary Question of my noble friend Lady Trumpington.
As for the question of making a decision on Monday and telling the consultative committee on Tuesday, which will be too late, I would say that if decisions are of any significance at all they cannot be put into effect in two days. That is the sort of myth that is created to justify the press being able to look over the poor chap's shoulders. No commercial company has press men looking over its shoulder, and I do not see why this body should
Baroness Birk: If I had been in any doubt at all about this amendment, or thought that it was unnecessary, the remarks of the noble Baroness, Lady Trumpington, would immediately have brought me to my feet. Unfortunately, I was not here for the first day of the Committee stage, but I would certainly have given the strongest support to the original amendment. I must declare a sort of interest, since I am still a paid-up member of the NUJ, although work in this House seems to prevent me from putting it to much use. The noble Baroness spoke first about emasculating the role of the board, but it will be a pretty weak board if what is written in the press is going to emasculate it. She also mentioned a paper like The Londoner giving its opinion, and said that it would give a one-sided view which was not impartial. The noble Baroness's speech was against the freedom of the press generally. Of course, newspapers have partial views—
Baroness Trumpington: I must take issue with the noble Baroness over that. I said nothing of the kind. I pointed out that some members of the press are not impartial. I said nothing about—
Baroness Birk: I have been a reporter in my time and I wrote down exactly what the noble Baroness said. What I am saying is that it is not the business of individual periodicals, or of the press generally, to be impartial. That is what a free press is all about. There are different views put by different organs of the press. That is what we have at the moment. We have the
234
Daily Telegraph putting one view on a particular subject, the Daily Mirror putting another, and The Times putting yet another. That is why we feel that we have a free press in this country. So why should the role of the water authorities be any different from anything else, whether we are discussing economic theories, defence or anything else?
I should have thought that this amendment was one which even those who felt they could not support the original amendment would certainly support, because it is extremely diluted and all it says is:
"and for enabling public discussion and review of all policy issues before the water authority makes decisions thereon".
It is giving an opportunity for the public to know and to understand. It is also widening the field of the consumer consultative committees. It is doing the correct job that it should be doing for the consumers, particularly now when we have these tremendous changes in this Bill, which alter the new water authorities very considerably from the old ones. If the noble Baroness feels that she was misrepresented, or feels on second thoughts that she did not really mean what she said, or that the words she used did not mean what she said, then I hope she will take the opportunity to retract, as we are back in Committee again, and support this amendment.
Lord Harris of Greenwich: If I may say a few words following the noble Baroness, Lady Birk, I always look forward to those occasions when the noble Baroness, Lady Trumpington, and I are allies. But I am bound to say that on this occasion I am in an extremely difficult position, because I wholly disagree with virtually everything she said in the short speech she made. With great respect to her, because I know that she is a person of considerable liberal sentiment, I do not think she wholly understood the point that she was making, because what she was saying to us was that, because Mr. Livingstone and his colleagues produce a journal which periodically says unattractive things—as undoubtedly it does—therefore the language of this statute should be framed in a different way.
I do not think that that makes any sense at all. The fact is—I regret to say this and I feel that the noble Baroness is about to become extremely indignant with me, so I apologise—that her language on this amendment is exactly the same as that of the Left-wing Labour majority on the Islington Borough Council, who, curiously enough, take almost exactly the same position as she does in relation to the weekly newspaper which is published in Islington and which periodically publishes articles which they do not find attractive.
Passing from what the noble Baroness said to what the noble Lord, Lord Mottistone, said, there is no conceivable comparison between a private company and a water authority. We are talking about organisations which have taxation powers, and it seems to me that the case for this moderate amendment has been made in remarkably clear-cut terms, both by the noble Baroness, Lady Trumpington, and by the noble Lord, Lord Mottistone.
Lord Cullen of Ashbourne: I should like to support my noble friend Lord Mottistone, in that I do not

235
believe that the amendment is necessary. I was lucky enough to discuss this amendment with the Wessex water authority and I learned that this is exactly what happens. These policies are usually discussed over a long period of time with the advisory bodies, which are very similar to the CCCs which we are now considering. Long discussions take place. The amendment provides that all policy issues have to await public discussion. One has only to imagine what would have happened during the water strike if all policy decisions had had to await public discussion.
Lord Howie of Troon: Before the noble Lord sits down, could he clarify a point which occurred to me during his comments? I thought I heard him say that this amendment is unnecessary. Does that mean that newspapers of the ilk of The Londoner could go into such meetings, to the horror and fear of the noble Baroness, Lady Trumpington, even if this amendment is not passed? I fear that that raises a terrible dilemma for the noble Baroness.
Lord Cullen of Ashbourne: As I understand it, the press will go to all CCC meetings.
Baroness Elliot of Harwood: I must apologise to your Lordships for not being in my place at the beginning of this debate. It came on much earlier than I had expected, and as I had another engagement to fulfil I am afraid I did not hear the beginning of the debate. I agree completely with what the noble Baroness, Lady Birk, said. I am sure that I should also have agreed with every word that the noble Lord, Lord Ardwick, said. I have a great deal of experience of these matters. The reason we fought hard for the Access to Meetings Bill which related to committees run by authorities, particularly those which have a great deal of influence and which are very important for the ratepayers and voters in any given area, was because we wanted them to know what was happening. They could not participate because they were not members of county councils. But those who are interested can go to meetings, listen and express their views outside, if they want to do so. It is all done in public, for the reason that it is the public who are interested.
I did not hear what my noble friend had to say, but I am afraid I do not agree with him that it is unnecessary for these discussions to be held in public. The public should be able, if they wish, to attend these meetings. Nine times out of 10 they do not want to go to such meetings, but the fact is that they can go and that the press can also attend such meetings. In the case of the Bill which we passed in 1960, if private matters are to be discussed by a committee it can be put to the vote (if the committee agrees to such a course) that the press should be asked to leave. That is done only on special occasions when something of a private nature is under discussion. In normal circumstances, however, when it is a question of getting the points of view of people who are voters and ratepayers and who therefore are interested in these matters, I do not agree that it would be detrimental if these meetings were open to the public. If the meetings had been open to the public during the water strike it
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is quite possible that there might not have been a strike; it might not have happened if people had known what was going on. That is, of course, speculation, with which your Lordships may or may not agree.
But I am not afraid of the public. I am not afraid of discussion of these matters. We are all ratepayers. We have the right to know what our money is being spent on. The fact that the water authorities are now separate from the ordinary rating authorities does not make any difference. We all have to pay the water rate. The fact is that these questions affect the public and they have the right to know what discussions take place.
During our last debate, the reason given for not wanting the public to be admitted was that those meetings would be very small. Instead of there being a big committee, as in the case of the county councils, there might be a committee of, say, eight, 10 or 12 people. That does not matter. It is all the more important for the public to be able to attend such meetings, otherwise fewer people will know what is being done than would be the case if the matter were discussed at a meeting where 20 or 30 people were present. The public should be allowed to know and should be able to discuss matters for which they are going to have to pay. It would be a thousand pities if this Bill were so retrograde as not to allow the press and the public to be present when these matters are being discussed. The amendment is not quite so strong as the one moved by the noble Lord, Lord Ardwick, the noble Lord, Lord Beaumont of Whitley, and me on the last occasion, but it is very much better than nothing. Therefore it would be a great pity if the Government did not accept it. It would go some way towards the principle by which we have always stood: that the press and the public should be allowed into these meetings when public information matters are being discussed.
6.17 p.m.
Lord Sandford: I have to agree with my noble friend Lady Elliot of Harwood. It is pointless to compare the regional water authorities and their consumer consultative councils with commercial companies. Of course it would be inappropriate to have the press and public present at meetings of the board of a commercial company in a competitive situation—still less to reveal in advance their proposals to the press. But the bodies we are talking about are totally different. These are bodies which operate in the public sector. They are monopolies and they manage a commodity of vital importance to every single citizen of the country, day by day and hour by hour. The situation is totally different from that of a commercial company. We must not make the mistake of making these silly comparisons.
Earl Bathurst: May I ask the noble Lord who is to reply what would be the effect of the amendment which the noble Lord, Lord Beaumont of Whitley, wanted to put forward on the Severn-Trent Bill? We were told by him—it is not everybody who reads Hansard—that the Severn-Trent Board on the Soar is to make a great improvement to the river for everybody concerned and that they will have their

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flood water taken away. I happen to be at the other end of the Severn and am well up on a hill, but I represent quite a number of people who are very much affected by flood water. Will they have all the flood water of the Soar sent down to them on top of what they already get now? Is somebody in the Severn-Trent board going to spend a lot more money in order to pump it away? If the press are kept out of what goes on in the Severn-Trent board which is discussing the Soar, how will people in Gloucestershire know that such a prospect is in view?
I cannot believe that many press members will be specifically interested in this problem, but there may be a representative of the press who will get in touch with his colleague in Gloucester or Cheltenham whose reading public will be very much affected. Not just a few members of the NFU or just a few country landowners are affected. Everybody is affected every time a sewerage manhole cover comes up, caused by flooding. Surely such a desirable project as the proposal relating to the Soar which the noble Lord told us about and which your Lordships' Committee is going to look into through the courtesy of the Lord Chairman of Committees, should be known to the public. If that had not happened, how would those people know about this project? Should they not be able to ask the Severn-Trent board? Who is to protect their rights if the press cannot go into these meetings and report matters which are of very great public importance? I cannot see that in such a situation there will be any great scandal, or trouble, or libel cases. I do not see why the press should not listen-in to such very mundane matters—mundane although they have a very big effect on other people further down the river.
Lord Mottistone: Perhaps I might take up a point made by my noble friend Lord Sandford, because the fact is that when one talks about a commercial operation one is not always talking particularly about a private company but perhaps about other types of commercial operations operated by public companies, such as gas boards and electricity boards. They do not have the press hanging around their necks. I believe that there is a mistake—and I suggest this also to my noble friend Lady Elliot of Harwood—in perceiving water boards as an extension of the local authority, which they have been in the past. The whole picture is different now. They are not to be an extension of the local authority, but are to be like other public enterprises which have to operate as commercially as they can and other public enterprises which, equally—and I agree with my noble friend—are not competitive in the ordinary sense. Your Lordships might take the point that these other bodies do not have to admit the press, so why should the water boards?
Lord Melchett: If I may say so, the noble Lord, Lord Mottistone, is perpetuating the myth which the noble Lord, Lord Sandford, so effectively demolished. It is not true that water boards are in the same position as the gas or electricity boards, or the coal industry, or other major suppliers of that kind, because the water boards have the power to levy rates on individuals regardless of whether the commodity they supply is used or not. If the noble Lord will just stop to think about this for a moment, I hope he will accept that that
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situation puts the water authorities in a totally different position from that of the gas or electricity boards, who make charges on the basis of the use made of their products. It may be that in some cases the consumer has very little choice, but, nevertheless, people are charged because they use the products of those industries. As the noble Lord will know, there are plenty of people who are charged water rates, which cover sewerage charges, when in fact they do not have any sewage of which to dispose.
While I am on my feet, perhaps I may answer the point made by the noble Earl, Lord Bathurst, on the question of the Severn-Trent, if the noble Lord, Lord Beaumont of Whitley, does not intend to do so. I believe that the noble Earl made a very good point. In a number of cases where these schemes have been carried out the removal of what has in effect been a sponge to soak up flood water from one part of the system has led to very severe flooding problems further downstream. The wet grazing marshes which will be affected by that particular scheme currently act in that way. If they are pump-drained and the water is put into the river system, then there seems little doubt that it will create severe problems for the people whom the noble Earl mentioned. That is a very good argument for saying that the more publicity there is about water authorities' plans the better.
Lord Skelmersdale: Not for the first time in your Lordships' Committee I have been feeling for the past few moments a little like a fish slice. The noble Lord, Lord Hemingford, who moved this amendment, has returned, as he and other noble Lords have done and acknowledged—including the noble Lord, Lord Ardwick, prompted by my noble friend Lady Trumpington—to the subject of publicity to be given to water authority meetings and discussions, and the rights of the press and public in this context. They returned to the subject, though at a different part of the Bill—and this is vitally important.
During the earlier debates on the press and public my noble friend emphasised the importance we attach to involving the press and public fully in the proceedings of the new consumer consultative committees which are to be established under Clause 7. These committees will be able to consider any water authority matters which affect the interests of people living in the area. As my noble friend previously pointed out, these will include fundamental questions such as charging, financial policies and overall investment planning—and, indeed, the kinds of matter to which my noble friend Lord Bathurst referred. They also include more detailed local issues and individual complaints where these are not satisfactorily dealt with by the water authority, or where they are not matters for the ombudsman.
This is a wide remit, and we have gone further still. We have said that the committees should be consulted about the plans of the water authority on major issues well in advance of any final decisions being taken. So it will not be the case, as was suggested by one noble Lord, that the decisions of the water authority taken on a Tuesday will be discussed by the consumer consultative committee on a Wednesday—or vice versa. We intend that there should be plenty of time for these full-scale discussions.

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The committees will not be consulted on every matter, because there will always be matters too sensitive for public ventilation, such as staffing matters, in which the press and public would at present be excluded from a meeting of a water authority. It would be wrong for the consultative committees to debate such matters. However, I say again that on major policy questions we expect the committees to be consulted well in advance.
I feel that this covers the point raised by the noble Lord, Lord Ardwick, and also by my noble friend Lord Bathurst, when he referred to the Instruction of the noble Lord, Lord Beaumont of Whitley, earlier today. In addition, we have said that the water authorities and water companies should provide whatever supporting information is necessary for a consumer consultative committee to discharge its functions in relation to major issues. This would certainly include the documentation on which the authorities' own decisions had been based: not every paper or document, because that would be very far-reaching indeed, but, nevertheless, the information that the committees need should be available.
In our view, these are matters which flow directly from the new Section 24A of the 1973 Act as it stands in Clause 7. The arrangements are to be arrangements:
"for the representation of the interests of consumers".
We do not see what this means if it does not include public discussion of the main policy issues affecting consumers. If representation is effective, it must be wide-ranging and it must be public. We have already drawn attention to some of these points in the draft guidelines circulated last November, which no doubt we shall be discussing at great length when we reach Amendment No. 2. We shall be amending the guidelines to require compliance with some of the other points I have mentioned—in particular, the need for press and public access to meetings of the CCCs—when we re-issue the guidelines for further consultation shortly.
I do not see, however, that the amendment is necessary in the sense that what it proposes is to a large extent inherent in the clause as it stands. We could not, however, in any case, accept that all the policy issues debated by the water authorities are relevant to the CCCs. What is a policy issue is not always easy to define, but certainly I would not expect the committees to be involved in discussions, say, about retirement age policy for staff, or whether introducing a particular water valve would lead to any savings. The noble Lords may say that this is not what they have in mind in using the words "policy issues", but it illustrates the difficulty in referring to that particular phrase in legislation.
My noble friend Lord Mottistone went right to the core of the Bill when he said that what we intended in this legislation was the ability to make the water authorities work, and work well. In spite of the strictures of my noble friend Lord Sandford it is only fair to ask your Lordships whether you would feel able to invest money in a company which could not make decisions until they had been passed by the annual general or a special general meeting. Further to that,
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whatever the comparison with a commercial company may or may not be, there may be a very straight comparison with nationalised industries. Their consumer councils are not all open to the public, but this one—ours—will be.
My noble friend Lady Elliot of Harwood, as one would expect with her great experience of the Public Bodies (Admission to Meetings) Act, in effect asked whether the provisions in regard to the exclusion of the press will apply. Following a Division at Committee stage on, I believe, Clause 1 of the Bill, to the water authorities themselves they will not, but that is totally irrelevant to these consultative committees. They will be consulted about the main policy issues, and the press and public will be admitted to every one of their meetings, in their entirety.
The noble Baroness, Lady Birk, took issue with my noble friend Lady Trumpington, and I think they probably had a very good scrap between themselves without my intervention at this particular stage; but I was rather surprised to hear from the noble Baroness—I think I got the words down correctly—the Daily Telegraph putting one view, The Times another and the Daily Mirror yet another, because it has occurred to me over the past few months that I sometimes wonder whether the Opposition does not put all three at once.
We do consider that Lord Hemingford's objectives are largely met by the Bill and by the guidelines. We also consider that this amendment is defective in referring to "all policy issues", and that is a defect which I doubt could be corrected. I hope that my assurances will persuade the noble Lord to withdraw his amendment.
Lord Hemingford: I find that I did not underestimate the Government altogether in that I believe that, in the noble Lord's word, "to a great extent" and "largely" they have put into the Bill what I am intending by this amendment. However, I do not believe that when it comes to writing statutes it is enough to reflect "to a great extent" or "largely" what one is trying to say. Therefore, I am afraid that I do not feel satisfied with what the noble Lord the Minister has said, and I wish to press the amendment.
6.32 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 69; Not-Contents, 74.

DIVISION NO. 1

CONTENTS

Ailesbury, M.

Brooks of Tremorfa, L.

Amherst, E.

Burton of Coventry, B.

Ardwick, L.

Chitnis, L.

Balogh, L.

Cledwyn of Penrhos, L.

Banks, L.

Clifford of Chudleigh, L.

Bathurst, E.

Collison, L.

Beaumont of Whitley, L.

Craigavon, V.

Beswick, L.

Darcy (de Knayth), B.

Birk, B.

Diamond, L.

Bishopston, L.

Elliot of Harwood, B.

Blyton, L.

Elwyn-Jones, L.

Briginshaw, L.

Elystan-Morgan, L

241

Ewart-Biggs, B.

Napier and Ettrick, L.

Fisher of Rednal, B.

Northfield, L.

Gladwyn, L.

Ponsonby of Shulbrede, L.

Glenamara, L.

Rochester, L.

Gregson, L.

Ross of Marnock, L.

Hampton, L.

Seear, B.

Harris of Greenwich, L.

Serota, B.

Hemingford, L. [Teller.]

Shannon, E.

Howie of Troon, L.

Somers, L.

Hylton-Foster, B. [Teller.]

Stewart of Alvechurch, B.

Jeger, B.

Stewart of Fulham, L.

Jenkins of Putney, L.

Stone, L.

John-Mackie, L.

Strabolgi, L.

Kagan, L.

Taylor of Gryfe, L.

Kennet, L.

Taylor of Mansfield, L.

Kirkhill, L.

Underhill, L.

Lee of Newton, L.

Wallace of Coslany, L.

Listowel, E.

Wells-Pestell, L.

Lloyd of Kilgerran, L.

White, B.

Longford, E.

Wigoder, L.

Mackie of Benshie, L.

Wilson of Langside, L.

Melchett, L.

Winterbottom, L.

Monson, L.

NOT-CONTENTS

Avon, E.

Lucas of Chilworth, L.

Birdwood, L.

Lyell, L.

Brougham and Vaux, L.

Mackay of Clashfern, L.

Campbell of Alloway, L.

Mancroft, L.

Cathcart, E.

Margadale, L.

Colville of Culross, V.

Merrivale, L.

Cork and Orrery, E.

Mersey, V.

Cowley, E.

Milverton, L.

Cox, B.

Montgomery of Alamein, V.

Craigmyle, L.

Mottistone, L.

Crawshaw, L.

Mountgarret, V.

Cullen of Ashbourne, L.

Orkney, E.

Davidson, V.

Orr-Ewing, L.

De La Warr, E.

Plummer of St. Marylebone, L.

Denham, L. [Teller.]

Dilhorne, V.

Portland, D.

Drumalbyn, L.

Raglan, L.

Elphinstone, L.

Rankeillour, L.

Elton, L.

Rawlinson of Ewell, L.

Ferrers, E.

Rochdale, V.

Ferrier, L.

St. Aldwyn, E.

Fortescue, E.

St. Davids, V.

Fraser of Kilmorack, L.

St. John of Bletso, L.

Gardner of Parkes, B.

Saint Oswald, L.

Glanusk, L.

Sandys, L.

Glenarthur, L.

Selkirk, E.

Gowrie, E.

Sempill, Ly.

Gray, L.

Skelmersdale, L.

Harvington, L.

Stradbroke, E.

Hayter, L.

Swansea, L.

Hives, L.

Swinfen, L.

Hornsby-Smith, B.

Swinton, E. [Teller.]

Hunter of Newington, L.

Thomas of Swynnerton, L.

Ingrow, L.

Trefgarne, I.

Kinloss, Ly.

Trumpington, B.

Lindsey and Abingdon, E.

Vaux of Harrowden, L.

Long, V.

Vivian, L.

Loudoun, C.

Resolved in the negative, and amendment disagreed to accordingly.
6.40 p.m.
Lord Sandford Lord Sandford moved Amendment No. 2:
Page 5, line 26, at end insert—
("(2A) Arrangements under subsection (1) above shall require each water authority to establish Consumer Consultative Councils.
(2B) The number of Councils to be established shall be determined by each water authority after consultation with organisations appearing to it to represent consumer interests in their area including each relevant local authority whose area is wholly or partly in the area of the water authority.
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(2C) The water authority shall provide in arrangements under subsection (1) above, as respects each Consumer Consultative Council, that:—

(a) at least one member thereof is appointed by each relevant local authority and a number of other members are appointed by organisations representing the interests of consumers;

(b) the chairman thereof shall be elected by the members from among their number;

(c) the appointment of a person to act as secretary thereof shall be made by the Consumer Consultative Council;

(d) the expenses reasonably incurred by the Consumer Consultative Council are approved and paid;

(e) the number and place of meetings shall be at the discretion of the Consumer Consultative Council;

(f) the meetings of the Consumer Consultative Council shall be open to the press and public.

(2D) On submission of a report to the Secretary of State under subsection (1) above, a water authority shall publish in the London Gazette and in one or more newspapers circulating in every part of its area details of the arrangements it proposes to make and shall indicate that representations thereon may be made to the Secretary of State within a period of not less than 28 days from the date of publication.
(2E) In this section, "relevant local authority" means, in relation to a Consumer Consultative Council, the council of a London Borough or of a county or district as defined in relation to England in section 27(1) of the Local Government Act 1972 or of a county or district mentioned in section 20(3) of that Act (which relates to Wales) or the Common Council of the City of London of which the area or a substantial part of it is in each case included in the area of the Consumer Consultative Council.
(2F) Each water authority shall supply to a Consumer Consultative Council such information and documents relating to its functions as such Council may reasonably request.
(2G) In section 26(2) of the Local Government Act 1974 (which relates to the entertainment of complaints by a local commissioner) shall be inserted after the words "member of the authority, or any other authority concerned" the words "(including a member of a Consumer Consultative Council set up under section 7 of the Water Act 1983)".")
The noble Lord said: In moving this amendment, may I start by thanking the House for the support it gave yesterday to my Motion that we should recommit the Bill in respect of the clause we are now discussing? May I also thank my noble friend Lord Skelmersdale for his handsome apology and say that I think we can now regard our quarrels as patched up? As regards this amendment I have no intention today of pressing it to a Division. I hope that we can now address ourselves, as I believe we always try to do, to securing a Government amendment to the clause which reflects the wish of the House and which I believe, now that we have this opportunity of discussing the matter with Committee procedure, we can indicate quite clearly to the Government. I understand that we have this evening and we have until next Tuesday, when I believe there is to be a Report stage on this clause—I hope that my noble friend in answering to this amendment can confirm that—in order to achieve this. I believe that is much the better way of setting about it. But at least after this evening, with discussion on this amendment and on subsequent amendments, we shall know the Government's mind, they will know our mind, and between us we can do a decent job on this important part of the Bill.
The role of the consumer consultative councils is extremely important. These are now the sole agencies for this role within the structure of the regional water authorities, who are the sole suppliers of water to the entire country of England and Wales. The councils are the sole agents through which these vital bodies—

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literally, vital bodies—are to be made accountable to the consumers. May I make the point that in this respect they fulfil the role of the consumer councils in the nationalised industries, and any of your Lordships who were listening to the previous debate will have been reminded that in very few cases are the consumer consultative councils in any of the nationalised industries, whatever their different structures and different purposes may be, causing any degree of satisfaction at the moment. None of them is satisfactory and that is why we must give so much attention to the matter on this particular accasion. We have the opportunity to get it right. As the noble Lord, Lord Melchett, said, it is far more vital in this field than in steel, coal, electricity, gas, airways, or whatever else. We are dealing with a most vital industry which is in the process of being nationalised by this Bill.
These consumer consultative councils play the role played in the private sector by the shareholders who, if they do not like what their companies are doing, can complain at the annual general meeting or take their money elsewhere. They play the role of the customers in the ordinary private sector who, if they do not like the goods, can go elsewhere. In respect of the regional water authorities, the consumer consultative councils are inheriting roles which previously were carried out by the majority of locally elected representatives on the boards, the role carried out by the ombudsman, the role carried out by the presence of the press and the role carried out by the supervision of the National Water Council. All those roles have still to be carried out, in so far as they affect accountability, and the CCCs are the only bodies to do it. They are, therefore, of vital importance. It is our job, as Parliament, to make sure this is done properly. All experience up to now shows that this is not a matter which can reliably be left either to the national industry or to the sponsoring department and, least of all, to a combination of the two. It must by done by Parliament or it will not be done at all.
That is just preliminary to the amendment. The amendment seeks to safeguard, by statute, the independence and the effectiveness of the consumer consultative councils that the Bill intends to set up through this clause. The purpose of the amendment is to ensure that the right selection of the arrangements—I am not saying that this is precisely the right selection, but it is the best I can do at the moment—is approved by Parliament for these bodies, to ensure that they are enshrined in legislation and that the interest of the consumers and their representative bodies are protected in the long term by legislation. There are other arrangements which it is perfectly appropriate to leave to guidelines but I believe, and I think a number of your Lordships believe, that the arrangements that have to go in legislation are more extensive than those which the Government are disposed to put into legislation at the moment. I am perfectly prepared to discuss and argue with the Government that not all the arrangements need go into legislation; that, of course, is true.
The provisions of this amendment follow to a great extent the intentions that the Government themselves set out in the guidelines which they published on 22nd November last. The amendment now seeks to reflect
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the subsequent Written Answer to the noble Baroness, Lady Trumpington, issued on 29th March by my noble friend Lord Skelmersdale. I think that on about six or seven matters, to which I shall come in detail shortly, the points covered in the amendment are substantially those that are now or were previously proposed by the Government, but only for administrative implementation. The discussion on those is whether they should or should not be in the Bill. There are a number of other points where this amendment covers gaps or goes beyond the Government's present intentions. I seek to justify those one by one as I come to them. Therefore, if I may now take a little time of the Committee, I shall go through the separate parts of the amendment and indicate to your Lordships how they reflect the Government's intentions, how they depart, and why, where they do depart.
Taking subsection (2A), the only change that I suggest to the Committee is that the term "consumer consultative councils" is better than "committees" because the term "committee" indicates that they might be committees of the main regional water authorities. We know from the Government that that is not their intention and that they should be independent, autonomous bodies, but in the case of the Welsh Water Authority, which was converted to this system a year ago, the consumer consultative bodies are actually committees of the water authority; and that is not now considered satisfactory by anybody. That is all I want to say about subsection (2A).
Subsection (2B) provides for local consultation with organisations representing consumer interests. At subsection (2D) there is provision for publication of the proposed arrangements in the London Gazette and one or two local newspapers so that those who ought to have been consulted, but have not been, can see what is going on and will have the opportunity to make a case for representation to the Secretary of State. As at present drafted, Clause 7(8) of the Bill provides only for consultation with the statutory water authorities, and I do not think that that is enough.
I now turn to the provisions contained in subsection (2C). There is a whole sequence of them in the subsection, and the Written Answer given to the noble Baroness Lady Trumpington virtually corresponds to what is now incorporated in paragraph (a) of subsection (2C). As I say, this corresponds to the guidelines and to the Answer given to the noble Baroness, Lady Trumpington. So the only argument with the Government in this respect is whether the provision ought to be in the Bill, and my strong contention is that it certainly should be.
The question of the chairmanship of the committees is no longer at issue between us as a matter of principle. It has been accepted by the Government, but it is sufficiently important, and will always be so, whatever the particular geographical circumstances, and, this, too, ought to be in the Bill. Paragraph (c) relates to the appointment of a secretary. I do not think that there is much difference between us on this. Paragraph 12 of the November guidelines makes provision for that. The appointment of a secretary is normal form in, for instance, a community health council, and if it is appropriate there, it is certainly appropriate in relation to a consumer consultative council. That certainly ought to be in the guidelines,

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and there is no reason why it should not be standard practice.
I turn now to paragraph (d). If the finances of the consumer consultative council were not adequately met by the regional water authority, the council could be hamstrung and made ineffective. Therefore, it is important to make clear on the face of the Bill that the expenses of the council should be approved and paid. This is a point that is covered by the November guidelines, but not in my view quite fully enough. The guidelines provide only for the expenses of the members to be met—not the operating costs of the council. That is a matter for further consideration and discussion; but there is not very much between us.
Paragraph (e) provides that the number and place of meetings are to be at the discretion of the consumer consultative council. I should have thought that we would all be able to agree that that degree of independence is essential. The guidelines issued by the Government in November provide that the committee shall determine the frequency of meetings, but they do not say anything about the place. I consider that it should have as much discretion about the place, as about the frequency of the meetings, and that, too, ought to be on the face of the Bill.
I now turn to the question of the admission of the press and public. I am glad to say that, whatever may have happened in the previous debate, the fact that the press and public shall be entitled to be present at all the meetings of the CCCs is a matter to which the Government have agreed, and which they made clear in their Answer in March to the noble Baroness, Lady Trumpington. We are grateful for that, but it is of vital importance that it must be on the face of the Bill.
I have already referred to subsection (2D). Subsection (2E) is necessary in order to ensure that local authorities with only a minor part of their area within the area of the RWA are not given a place on the CCCs and so make them unnecessarily unwieldly and unmanageable.
Subsection (2F) relates to the matter that we have just been discussing, and it is covered in the November guidelines. Clearly your Lordships are not entirely happy with it. Although so far your Lordships have not been able to persuade the Government to change their minds on it, I should have thought that there is scope for further discussion between the Government and your Lordships on the precise wording of subsection (2F).
Subsection (2G) is needed in order to give effect to another point which the Government have already accepted; namely, that the workings of the regional water authorities should be subject to the scrutiny and surveillance of the ombudsmen, and if that is so, clearly the CCCs must be appropriately empowered and involved in referring matters to them, since members of CCCs will be among the first people to hear of matters of maladministration.
So, as I say, there is not a great deal of difference between those of us who are behind the amendment and the Government. The main issue is how much of the wording in the amendment ought to be on the face of the Bill, and I look forward to hearing what my noble friend has to say about that.
Much reliance is being placed by the Government—personally I should say too much—on guidelines. Therefore, I very much welcome Amendment No. 4, in the name of my noble friend Lord Drumalbyn. If we are to rely on guidelines, some, if not all of them, must be given some statutory force; that is to say, they must be introduced by way of statutory instrument, laid before Parliament, or handled in some other similar way. What we cannot have are guidelines which take one form now, and another form in a week's time, and which after the passage of the Bill can be completely scrapped and rewritten without further reference to Parliament; that we cannot have.
I am sorry to have taken up so much time. If I may say so, I very much like Amendment No. 3, in the name of my noble friend Lord Cullen of Ashbourne. If, as I hope, more is written into Clause 7, something along the lines of my noble friend's amendment, indicating at the beginning of the clause the whole purpose of the CCCs, might well be appropriate. I beg to move.
6.57 p.m.
Baroness Fisher of Rednal: I rise to support the comments just made by the noble Lord, Lord Sandford. I am terribly disappointed that the noble Baroness, Lady Trumpington, is not present. Her Question and the Written Answer from the noble Lord, Lord Skelmersdale, have caused us to reconsider this matter which, if time had allowed, might have been discussed at the earlier Committee stage. I had hoped that the noble Baroness, Lady Trumpington, would have been present. We know that she has a great interest in consumer affairs; otherwise she would not have tabled the Question. Had she been present we could have heard her comments and observations. We could have known whether she was satisfied with the Written Answer that she has received from the noble Lord, Lord Skelmersdale. We could have learned whether she thought that the Written Answer was sufficiently comprehensive. So, as I say, I am disappointed that she is not here to let us know whether she was satisfied with the Answer.
I should like follow on from what was stated in the Written Answer. The draft guidelines were issued on 22nd November, and the final date for comments was 31st March. That was stated in the Written Answer. It was of great concern to me and, I am sure, to all noble Lords to discover a paragraph in the Written Answer which states:
"In the light of comments received, and a number of commitments which have already been made, it is proposed to revise the draft guidelines and to reissue them for a further short consultation period."—[Official Report, 30/3/83, col. 1635.]
There has already been three months of consultation, but the guidelines are nevertheless to be dished out again. I should like to know from the Minister how long everyone will have to examine the revised draft guidelines and submit their answers. Will there be another three-month consultation period and a further re-issuing of draft guidelines?
The important section of the Written Answer, after there has already been three months of consultation on

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the guidelines, states:
"While it will not be possible to publish the revised draft before the House completes the remaining stages of the Bill, copies will be made available to the House on publication."
We shall therefore have a Bill going through our House and returning to the other place without our knowing what the guidelines are to be. That is a most unsatisfactory process. It is bad enough to have government by guidelines, but to have government by guidelines after Acts of Parliament are on the statute book is a deplorable way of going on. If the consultation takes three months, the Bill will have become an Act. That is extremely serious. I hope that the noble Lord, in his reply, will say that there will only be a very short period for revision of the guidelines.
The noble Lord states in his Written Answer that copies of the new guidelines will be made available to the House on publication. Will the Minister say whether, again, this will be done through the form of a Written Answer, will it be done by a Statement, or will a copy be placed in the Library? It is important that we should know how we are to be made aware of the guidelines. We should also like to know whether they will be available for discussion by the House at a later stage.
We welcome, like Lord Sandford, the fact that the Written Answer states that meetings of consumer consultative committees should be open to the press and the public. It will be interesting to see the reaction when the press and the public receive from the water authority material of which they have not previously been aware, especially if the consumer consultative committees are in disagreement with the water authority on any issue. We accept that proposal. We accept also what Lord Sandford stated regarding the appointment of the chairman.
I am a little worried that the Written Answer to Lady Trumpington states:
"There should be separate arrangements under Clause 7 to appoint a committee at the regional level to bring together representatives of the water authority and the sporting, recreational, amenity and conservation interests in the area."
I should be grateful if the noble Lord will say in his reply whether this is to be written onto the face of the Bill, or will it be the role of the consumer consultative committees to set up the regional bodies?
According to the Written Answer,
"a modified version of the proposals may be appropriate in particular areas; for instance, in the Wessex Water Authority area a system of consumer committees has been in existence for some time and it should be possible, under the Bill, to reflect such arrangements if they are widely supported".
I hope the Minister will explain what that means. Wessex is one of the smallest water authorities. What might be applicable to a small water authority might not be applicable to a large water authority, such as Thames or Severn. I would be grateful for any information from the Minister. Will the new guidelines to be re-issued for consultation be much different from those which have already gone out for consultation? Will there be a complete revision, a part revision or just a tidying up procedure? Or will there be different proposals in the guidelines?
There is not much difference in what Lord Sandford proposes except his assertion that if nothing is written
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into the Bill no one will know that this marvellous edifice of consumer consultative committees exists. The Secretary of State, if he wishes, will be able to alter the membership, or any of the guidelines. It is important that this matter should be written into the Bill.
I should like to remind the Committee of a remark by the noble Earl, Lord Swinton, on 15th March, at col. 598, when he was replying to a Question about moral education. The noble Earl stated:
"I was not here in 1944 and I was not responsible for the wording of the Act".
He was referring to the Education Act 1944.
"Whatever the spirit of the Act—we have had this argument many times in relation to many measures in your Lordships' House when certain words are not included in an Act; the statute can be interpreted only in the way it is worded …".
That comes from the noble Earl, Lord Swinton, who, one has to accept, is knowledgeable in these matters. He has stated clearly to the House that the statute can be interpreted only in the way it is worded. That is what we want. We want to be able to understand the statute. We want it to be worded so that it can be interpreted legally.
It might be necessary, as the noble Lord, Lord Sandford, says, to think again about those who serve on the consumer consultative committees. I have information showing that the West Wales division of the Welsh water authority put down all the names of members serving on the local committees. One sees that there are five councillors, two people representing amenity and conservation, two representing commercial interests, three domestics—I expect they are all women—three farming representatives, one representing fishing, two representing industrial interests and one representing recreational interests. In that authority, consumer interests are clearly defined. They are no doubt the people to be contacted if one is interested in fishing or industrial matters. This is information that the public should know. It is, after all, the consumer part of the Bill; it is what the Bill is all about. These executive bodies, consisting of six, eight, 10, 12 or 15 members, are the important business part. It is important that the organisation for the consumer element—which is everybody in the country—is known quite clearly. That is why we wish it to be on the face of the Bill.
For the interest of noble Lords, I must say that one has to admire the Severn-Trent River Authority, which has had its share of publicity in the House today. When sending out its water bills and details of how one can pay them it says on the back page:
"As you may know, the Government is planning to change the structure of water authorities and to set up local consumer councils".
This is the punchline:
"If you would like to serve on one of these new councils—or simply wish to know more about them—write to us and we shall supply you with all the appropriate information".
I sincerely hope that the Severn-Trent River Authority does not receive thousands of applications that it will have to go through, but I suppose one could say that that is a really democratic way of asking people to serve on a consumer consultative council. I beg to support the noble Lord, Lord Sandford.
Lord Clifford of Chudleigh: I would support anything that gave more local knowledge to these excessively large authorities which have become so out of touch over the years that local opinions and local representatives are absolutely neglected. May I quote a personal experience? In 1896—no, I was not alive then—my place laid on the water supply for a village called Kingsteignton, and it did so until about 10 years ago. The water authorities became larger and they did not like any local suppliers, and so, under the agreement, they asked me to turn it off and I did so. A couple of years later we had two years of drought. They were putting up standpipes in the villages, and so on, and during the whole time there was my supply going at full strength. But, oh no!, they would not swallow their pride. They would not come and say, "Would you turn it on again?" No, they let the inhabitants of Kingsteignton put up their standpipes.
The following year was my first year as President of the Devonshire Association of Parish Councils. I had great difficulty in getting over the complaints from villages throughout the county about why we did not make use of the potable water and why we did not do this or that. It was only by telling them that story of what happened to me that I was able to get on with any other business. The trouble with all these large Government authorities is that unless we have something similar to what I gather is proposed by the noble Lord, Lord Sandford, which can keep these super-bureaucrats in the local picture, we shall go on getting inadequate use of supplies—in this case of water—which are available but never used in an emergency.
Lord Sandford: They are not called "super-bureaucrats"; they are called "watercrats"—a term introduced by the noble Baroness, Lady Fisher, but misprinted by Hansard as "watercress".
Lord Mottistone: Before my noble friend speaks, I should like to say a few words on the amendment before us. My feeling is that there is a lot that is good in it but there is rather too much—certainly for a Bill. I should have thought that subsection (2C)(c), (d) and (e) were going into a minutiae of detail and that a lot of it was more suitable in guidelines. In my view, the best arrangement is the one the Government have put forward in Clause 7, particularly Section 24A(3), under which they will be able to have a look at it. But the best amendment before us is that of my noble friend Lord Drumalbyn—Amendment No. 4—which ensures that we can see what these guidelines look like. If we could be sure that we were going to see the guidelines, and at an appropriate stage before the Secretary of State started commenting on the reports, then we should have a chance to tell the Secretary of State where his guidelines were inadequate if they did not incorporate—as I gather they will—most of what is contained in the amendment of my noble friend, Lord Sandford.
7.15 p.m.
Lord Cullen of Ashbourne: The noble Baroness, Lady Fisher, referred just now to the Wessex Water Authority and to the fact that it is one of the smaller authorities, and therefore might require different
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arrangements from those of the larger ones. It may be interesting to the Committee to know that Wessex feels very strongly that there should be flexibility in adopting any membership and administrative structure that suits any particular region. They consider that the revised guidelines provide that flexibility. They are happy about the guidelines. There is only one point on which they disagree, not only with my noble friend Lord Sandford but also with the Government, and that concerns the chairmen of CCCs, who they think should be appointed by the water authority. That I know is a view with which probably many of your Lordships will not agree, but it is a view based on nine years' experience. When, after the 1973 Bill, Wessex set up advisory bodies very similar to the CCCs that we are discussing, they gave the members of those bodies the option of appointing a local authority representative on the water authority as their chairman, and in all cases they took that course. Furthermore, when recently discussing the new proposals for CCCs they all voted unanimously to retain, if possible, the system that had worked so well.
Under the revised guidelines it would be open to the members of CCCs to appoint as their chairman a member of the water authority, but I must mention to my noble friend Lord Skelmersdale that the guidelines do not require water authorities to be represented on each CCC. I suggest that this point should be considered during the consultation period before the final guidelines are issued. The experience of Wessex advisory bodies has been that, far from inhibiting their freedom, the dual links and allegiances of the chairmen have great advantages, for they provide a communications bridge, a hot line to authority thinking, and greatly facilitate a reciprocal exchange of opinions. Furthermore, when dissatisfaction is expressed at a local level about service or policy, the chairmen are able to ensure that it is dealt with in a rapid, authoritative and informed way. They have a regular slot in the authority agenda to report on advisory committee opinions and recommendations.
As I read the revised guidelines, there is nothing to prevent the Wessex Water Authority continuing with their present structure, although the advisory bodies will in future be CCCs. Perhaps the fact that their arrangements have been successful for nine years may lead other water authorities to follow their example. But I stress again that the vital issue is that water authorities should have flexibility to make arrangements suitable to their regions. We have many thoughts as to whether matters should be in the guidelines or should be in the Bill. Personally, I agree with the Government that we should use the guidelines as much as we possibly can in order to retain the flexibility which is necessary.
Baroness Serota: I do not wish unduly to prolong the debate on this amendment, which the noble Lord, Lord Sandford, has explained so clearly and in such detail, and which has been fully supported by my noble friend Lady Fisher of Rednal. However, following the comments of the noble Lord, Lord Mottistone, a few moments ago, I feel that I must stress the need to include subsection (2G) of the amendment of the noble Lord, Lord Sandford, in legislation rather than in guidelines, because the extension of the ability to refer matters to the ombudsman and the members of

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the proposed new CCCs would require an amendment in the form of an addendum to the Local Government Act 1974.
The new water authorities, with their much smaller memberships of somewhere between nine and 15 appointed members, will of course restrict the access of the individual citizen to the ombudsman, particularly as they will be covering such wide geographical areas. Therefore, I am in full support of subsection (2G) of Amendment No. 2, but suggest—and I hope that the Government will take full note of this—that this is not a matter for guidelines but must be written onto the face of the Bill.
Lord Drumalbyn: Before my noble friend replies, perhaps I might make one or two remarks. First, we are extremely grateful to my noble friend Lord Skelmersdale for having arranged for the Question to be answered on 30th March, as my noble friend, Lord Sandford, said. I do not mean that we are grateful for that date, but that we are grateful for his having done so. One thing has stood out very much from the very able speech of my noble friend Lord Sandford. It was the stress that he laid on including in the Bill the essential points that are now proposed to be included in the guidelines. Of course, it is not unknown for provision for guidelines to be made in Bills, but what is, I think, desirable is to get what is really essential into the Bill when it is at all possible rather than leave it to guidelines.
I do not completely know the reasons why it was decided to use guidelines rather than to put these matters into the Bill itself. No doubt one reason might be the desire for flexibility, but did my noble friend consider the possibility of putting these matters into the Bill and also putting into the Bill—and this is well precedented—the capability to amend the Bill itself in order to change provisions therein as is required? This is not unknown by any means and it would provide flexibility.
I suspect that the main reason for not having put these matters into the Bill is that there was not time to do it. I am sure that my noble friend would have arranged to have it in the Bill had it been possible. I would very much commend my noble friend to look up the precedents here, and I am sure he will find that this is so. It is not done very often but it is done. Then he could make the changes in the Bill by order. Therefore, I would suggest that he might deal with that point in the main part of the speech that he will no doubt make to us. I shall probably want to return to what my noble friend says in his speech after he has made it, and I think that the Committee is now ready to hear his speech.
Lord Skelmersdale: After such an opening as that, how could I possibly resist? As my noble friend Lord Sandford said in introducing the amendment, the main purpose of it is quite clear. It is to provide in legislation for the detail of consumer consultative arrangements which the Bill leaves to the guidelines to be issued by the Secretary of State. I can understand concern that what is not in legislation might disappear without trace. Nevertheless, we do not believe that there is any real need for this concern. In order to
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demonstrate what I mean by this, we must go back to the roots of Clause 7 and consider it in its present from to see what it actually does.
It imposes a clear duty on the water authorities to prepare a report on arrangements to represent the interests of their consumers. Once that report is approved by the Secretary of State, the water authority must statutorily implement the arrangement. Arrangements must, therefore, be established or the water authority will be in breach of its statutory duty.
The arrangements must comply with guidelines and, as the House has heard us say on numerous previous occasions, a draft of the guidelines was published on 22nd November last year, my recent parliamentary Answer explained that we proposed to reissue the draft guidelines for a further short consultation period. The noble Baroness asked me what I meant by saying a "further short consultation period". This has not yet been decided upon, but it will certainly not be as long as the four months previously given for consultation, because, although this is a revision—and I enumerated the most important points in my Written Answer to my noble friend Lady Trumpington—it is not a complete recasting of the guidelines. So although I appreciate the time taken by various organisations to respond to such guidelines, it must surely take a shorter time when they do not have to come at a thing afresh. I hope that the noble Baroness will agree with me on that. I do not propose to reiterate all the points that I made in my Written Answer, but I should like to comment briefly on the main points in this amendment.
First, on the constitution of the committees, which is contained in subsection (2C)(a)—this is going to become terribly complicated so perhaps I may refer to these paragraphs simply as paragraphs (a), (b), (c), and so on—we have made it clear that the water authorities should appoint the nominees of the local authorities and other nominating bodies unless there are very strong reasons for not doing so, and that if, in these circumstances, agreement cannot be reached between the two parties—that is to say, the nominating body, whether it be a consumer organisation, a recreational organisation or whoever—the matter should be submitted to the Secretary of State for his determination. I think that this point also answers the amendment in the name of my noble friend Lord Stanley. I know that he is not present, but I understand that, in the event, his amendment may be moved by another Member of the Committee. The membership of the committees must be genuinely independent, and that is our firm intention.
On paragraph (b), we have agreed that the chairman shall be selected by the members of the committee, though we have added that where the chairman is not a member of the water authority, there will be a need for arrangements for the water authority to be formally represented at the committees. This is something which has been agreed during the passage of the Bill through Parliament up to this point and it is a point upon which the original list of organisations which received the draft guidelines have not yet commented. So it will be only fair to ask them their advice, but I shall return in a minute to this particular point about asking for their advice.

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We remain of the view that the accommodation and secretariat should be provided by the water authority, which will be a more efficient and less costly arrangement than that proposed in this amendment. We are agreed that the expenses of consumer consultative committees must be paid and that meetings should be open to the press and public, as indeed I said on the last amendment. The number of meetings should be for the committees to decide. I have heard suggestions that there may be only one every six months, but in all fairness I should say that, with the revised guidelines, it is entirely up to the committees to make that choice. If they want to have one fortnightly, or monthly, it would be entirely up to them.
While I am talking about these two changes, my noble friend Lord Cullen mentioned the experience of the Wessex Water Authority over the last nine years. The position with Wessex is that the water authority will have to produce its report to the Secretary of State, and presumably, since all in the authority's area are agreed that the situation is working well, it will continue in exactly the same form. The one thing that could change, but by no means necessarily will change, is that the committee itself will have to have the opportunity to decide whether to re-elect its current chairman; in other words, whether the current chairman of that consultative committee who is currently a member of the water authority should remain in that position. I am obviously worrying the noble Baroness. She is frowning. Am I not making myself clear?
Baroness Fisher of Rednal: I thank the noble Lord for giving way. I was not sure whether he was talking about the future consultative councils—that is why I was frowning—or whether I had missed the point and he was talking as though there were some consumer consultative councils now. If he could clarify that he was talking about the future, I am with him.
Lord Skelmersdale: I was comparing the future with what is currently going on in the Wessex Water Authority where there is a consumer sub-committee of the water authority. I was comparing for my noble friend, and indeed the Wessex Water Authority themselves, what would be the difference between what is going on now and what will be going on in the future.
This is the only change that I would expect. The proof of the pudding, of course, will be in the eating. If the current chairman is a successful chairman, and the views of the authority and everybody else within the authority's area continue to prevail that he has been a successful chairman, I have no doubt that the water authority chairman on this sub-committee will be re-elected. The revised guidelines will not prevent that, but what we have said all the way through is that it should be up to the consumer consultative committee to decide.
Lord Drumalbyn: Would my noble friend forgive me? It seemed to me, reading over the previous proceedings at Committee stage, that we were always in danger of confusing a main committee with the divisional committees, which I understood are proposed in the present draft guidelines. I do not know
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how many divisional committees there are, nor do I know how many local authorities will be on them. This is not at all clear. Is my noble friend now talking about the chairman of the authority being the chairman also of the consultative committee as it at present exists, or of all the divisional committees as well? Can we know exactly what he has in mind?
Lord Skelmersdale: I am afraid that without slightly longer notice than I have just had I cannot tell my noble friend how many divisions are involved. I can say, as in the original guidelines, divisions are the natural operating units of water authorities, and normally there should be one consumer consultative committee for each division.
We are agreed that some publicity should be given to the proposed arrangements before a report is submitted to the Secretary of State, and the water authorities will be required to submit a summary of the comments they receive when they forward their report. This is the Government's way of covering the points in my noble friend's Amendment (D) and the second part of (B).
The guidelines already require water authorities and companies to inform a committee of their general plans and arrangements,
"and to provide such supporting information as is necessary for a consumer consultative committee to discharge its function".
To require the submission of such information and documents as may reasonably be requested is a far-reaching proposal, since it imposes very few limits and raises questions of what is a reasonable request. But it is clear, on the basis of what we have already agreed, that a considerable amount of documentation must be made available, and we feel that this goes far enough.
On (2G) we cannot accept that complaints to the local ombudsman should be routed through a member of the consumer consultative committees. This is the point brought up with her wise and great experience of this particular subject by the noble Baroness, Lady Serota. Complaints to the ombudsman, as she will know better than most of the rest of us, are always routed through members of the body complained about. Although I am conscious that there has been concern, and indeed still is concern, to widen this, the present Bill is not the place in which to raise this general question. We have accepted that the local ombudsman's jurisdiction remains intact, and it would be wrong to experiment on the lines proposed.
To summarise, we have agreed to much of what the amendment seeks, but as part of guidelines and not of the Bill. We do not agree with all the points in the amendment. Above all, we feel that times may change, ideas may change, but that legislation goes on for ever—or almost.
Lord Underhill: That is the point.
Lord Skelmersdale: In this connection I should like to emphasise the rigidity of the approach adopted by my noble friend in writing in the details of consumer arrangements as he proposes without any mechanism, short of legislation, to make any changes. By contrast the Government's position is one of total flexibility and openness to suggestion, not merely from your Lordships but also from those many interests outside

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which are affected. That is why—and I would stress this—we propose to have a fresh round of consultations. We have already received a number of useful comments on the first consultation. We expect that many people will wish to comment on the revised draft. We should give them this chance, which my noble friend's amendment would not do.
There is another reason why we prefer this flexible approach. It is important that we retain scope for some variation to meet local circumstances. For instance, in the Wessex Water Authority a system of consultative committees has been in existence, as I mentioned, successfully for some time. We would not wish to undermine such arrangements, which are working well. However, to emphasise the importance we attach to the consumer arrangements as a whole, and to underline the statutory nature of the guidelines, I shall be proposing to your Lordships later tonight to accept in principle Amendment No. 4 in the name of my noble friend Lord Drumalbyn.
Lord Melchett: If the noble Lord is going to leave that point, may I ask him one question? Does he accept that the flexibility of which he has made a great deal cuts two ways? It gives people flexibility in the sense that they can comment on yet another draft of the guidelines and propose changes to them, but one of the worries on all sides of the Committee is that it gives a great deal of flexibility to the Government in that they can, once Parliament has finished dealing with the Bill, put into the guidelines what they will. That is why many Members from all sides of the Committee support writing into the Bill rather more detail than the Government seem to be willing to accept.
Lord Skelmersdale: The noble Lord, Lord Melchett, backs up his noble friend Lady Fisher on his own Front Bench, which one would expect. I am going to get to that point in a minute. When I was talking about the Government proposing to accept in principle my noble friend's Amendment No. 4, I was going on to say that I have some confidence that your Lordships will accept, in agreeing to do this, that we are taking a significant step in the direction noble Lords would like us to move.
The noble Baroness, Lady Fisher, asked how noble Lords would get the guidelines. The answer is that we propose to place them in the Library of the House and in the Printed Paper Office as soon as they are published. There will then be an opportunity for any noble Lord to make a comment in the usual way to the Department of the Environment, and that comment will be considered in exactly the same way as comments from, say, the CBI, recreational bodies or the Consumers' Association. I was not sure whether the noble Baroness was questioning me on point (e) or (d) of my Written Answer.
Baroness Fisher of Rednal: Point (e).
Lord Skelmersdale: There should be separate arrangements under Clause 7 to appoint a committee at the regional level to bring together representatives of the water authority and the sporting, recreational, amenity and conservation interests in the area. She
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asked whether I would accept that on the face of the Bill, and my answer is that I shall be returning to the point when we consider the amendment standing in the name of the noble Lord, Lord Melchett. For the moment, it is only fair that I should say that the answer is No, for the reasons I shall then give.
The Government do not propose to have further discussions on the guidelines in Parliament, but the noble Baroness can, as can any Member of the House, raise the matter in any of the usual ways should she so wish. In other words, if any noble Lord, having considered the draft, feels that our final guidelines are totally unacceptable, then the Government, being always answerable in Parliament, would expect to be severely criticised and would be very surprised if that did not happen; it happens practically daily. Regional, recreational, amenity and conservation committees are totally separate from the CCCs about which we have been talking.
On the subject of Wessex, the noble Baroness made exactly the point I made earlier. Local variations may be desirable, dependent on the size of authority and other factors. That is why each water authority must put in its own report to the Secretary of State. I hope she will accept that. The one thought I must leave with noble Lords is that the commitments we have made mean some quite major changes. Various organisations and individuals who receive the original draft guidelines, and who will, of course, receive the revised draft guidelines, must have an opportunity to comment. That is the main reason why I am unable to accept my noble friend's amendment, at any rate in its present form.
Baroness Birk: I have one point to raise following the Minister's reply, which of course had to be quite long. I am extremely concerned because he said that he could not accept subsection (2G) referring to complaints to the ombudsman. I am sure that my noble friend Lady Serota will wish to comment on this. When the Bill was first before us, the whole question of reference to the ombudsman was left out. It is now in the Bill. To leave this matter to Government flexibility or guidelines—or whatever other step the Government may wish to take—seems completely wrong. If anything should be on the face of the Bill, it is subsection (2G).
Lord Lloyd of Kilgerran: I support the main theme of the amendment and, in doing so, I am pleased again to congratulate the noble Lord, Lord Skelmersdale, on the clarity of his speech, the flexibility in presenting his case and the sympathy he showed to the water industry—qualities he displayed when dealing with amendments of mine at an earlier stage. Reference has been made to the Wessex authority. I had the privilege of visiting that water authority in connection with my membership of the House of Lords Select Committee on Science and Technology. It was clear to us that the Wessex authority was very enlightened, and there is no doubt that, in the circumstances appertaining at that time, their body, known as the local water advisory committee, was doing good work. However, the example of Wessex has, in my experience, not been repeated often with other kinds of authority.

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There is little difference between the Government and the main theme of the amendment. I agree with the noble Lord, Lord Sandford, that consultations with the Government are needed on what should be in the guidelines and what should be in the statute. Here the Government are wishing to set up committees. Like Lord Sandford, I prefer to call them councils, for the reasons he indicated. Then there is the desire of Lord Sandford to use his words, merely to safeguard by statute the independence and effectiveness of the consumer consultative bodies intended to be set up under Clause 7. The Government have praised the activities of enlightened authorities like Wessex in what they are doing with their consultative bodies. I suggest that that kind of body should be made statutory in the Bill. Adopting the main theme of the amendment would not affect the position of the Wessex authority in the basic way in which it is operating.
As the noble Lord, Lord Sandford, indicated, the amendment would ensure that the arrangements approved by Parliament for such bodies were enshrined in legislation so that the interests of consumers and their representative bodies were protected in the long term. The Minister indicated that there may be further consultations about the broad matters relating to Clause 7. I am sure that after further consideration the noble Lord, Lord Skelmersdale, with his now increasing knowledge of the water industry and his sympathy with what it is doing, will be able to make a nearer approach to the main theme of the amendment.
Baroness Serota: I wish briefly to correct a misunderstanding. The noble Lord, Lord Skelmersdale, indicated that I and the noble Lord, Lord Sandford, through subsection (2G) of the amendment, were seeking to extend access to the ombudsman. If only that were so. I could make a persuasive case to the Committee to allow the individual citizen direct access to the ombudsman, as people have in all countries other than in the United Kingdom and France. I was seeking only to say in my earlier remarks that unless the amendment were included on the face of the Bill, the reorganisation of the water industry would restrict the access of the individual to the ombudsman because of the very few members who will remain on the new, appointed authorities, through whom the citizens can make their complaints.
Lord Skelmersdale: If I may deal with that specific point, I had obviously totally misunderstood the noble Baroness. I apologise for that. In the event, I shall have to reconsider (which I obviously cannot do today) what the noble Baroness has said. On the more general point, she may be interested to know that we cannot yet consider the whole question, but I have no doubt that it will be considered before any of us are very much older; I can go that far. This gives me the opportunity to say to my noble friend Lord Sandford something which I should have said on the first amendment. It is that the Report stage of this recommitted portion will take place, as I understand—it has almost been agreed between the usual channels, and I have no reason to suspect that it will be anything different—on Tuesday of next week.
Baroness Fisher of Rednal: I did not follow the answer which the noble Lord gave to my noble friend Lady Scrota. No doubt she understood it more than I, but it sounded like double-Dutch to me. No doubt, reading Hansard, one might get something out of it; but I think it is an important issue. The draft guidelines were issued in November. I will not go through all the numbers, but there was the basis of arrangements and the scope of the committees' activities. Are the guidelines going to be repeated for further consultation? That is what I want to know, because there are rights and obligations and frequency of meetings. Will they be sent out again, or will there be new consultations and documents going out?
Lord Skelmersdale: The original guidelines will be re-issued in draft form with the amendments that I have been speaking about. There will be one document to peruse, and one will not have to go back and forth between the old and the new ones.
Lord Drumalbyn: May I put a further question about membership of the consumer consultative committees? Following what the noble Baroness, Lady Serota, has said, would it not be normal for complaints from the public to be made to a member of the consultative committee? I am not quite certain what my noble friend replied to that; but I should have thought that this was the normal procedure, just as one makes a complaint to a member of a local authority or, in the case of parliamentary complaints, to a Member of Parliament.
Further to this, I should like to be a little clearer on the qualifications for membership of the consultative committees. I understood from the proceedings (I think on Second Reading) that the idea was to get people who knew the district for which they were going to be appointed and who had some knowledge and interest in the subject of water, who use it, what happens to it and how it is treated. Unless we are going to have large consultative committees in certain areas, the number of members of such committees representing local authorities in the broad sense, nominated by local authorities, will have to be kept fairly low. My noble friend Lord Sandford has spoken of one or more. One is the minimum; "or more" can be quite a few, as they say. Could he say something about that?
I hope I am right about the qualifications and the way in which they are expected to be nominated; that is, knowledgeable people who can really contribute. In particular, I hope that the whole concept which I understood from earlier stages was going to be carried out—namely, that what in days gone by appeared to be local authority domination will no longer apply, and that people will be there because in one way or another they are qualified to be there—will in fact be carried out.
Lord Skelmersdale: This is the case in the water authorities themselves, but it is not yet the case in the consultative committees. Paragraph 7 of the guidelines says:
"The members of each consumer consultative committee will be appointed by the water authority on the nomination of other bodies. They should list every county council and district council wholly or partially within the CCC's area which would have the right to

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nominate a member. They should also list the other bodies which would be asked to nominate a member. These other bodies will be representative of domestic consumers, industry, farming, commerce, recreation and amenity.".
Then follows what I think is an important point:
"Total membership should be so balanced that if possible no one group of members outweighs the rest.".
There is a safeguard in this, in that this must be in the report which goes to the Secretary of State. Therefore, if it appears to the Secretary of State that the water authority has left out one of the organisations which should be appointed to such a committee, he will not agree to the report and will send it back to the water authority for a re-think. So I believe that the position is well covered.
Lord Drumalbyn: I understand that. Would my noble friend, between now and the Report stage, look at what that will mean in terms of the number of members of the consumer consultative committees per division? I ask that because it looks as though some of these divisions will have very large numbers.
Lord Skelmersdale: Certainly.
Lord Sandford: I am grateful to the Committee for a thorough debate of this amendment. I think we are now making some worthwhile progress. The first point that I want to accept from both my noble friend Lord Cullen and my noble friend Lord Skelmersdale is the fact that in all this we have to provide for a considerable amount of flexibility. We are not setting up a single consultative committee for a single industry: we are setting up divisional consumer consultative committees spread all over England and Wales in a network, amounting to seven or eight in the case of Severn-Trent, in each of 10 authorities.
Of course, they must have flexibility to provide for the needs of the citizens of Manchester, in one case, and for the needs of one, two, three of four divisions in the Wessex authority in another case, and so on. Of course, we must have variations and flexibility to allow for the differences in geography which are dictated for us, and also flexibility to allow for the wishes of the consumers themselves who are on these committees. I have already appreciated, as this discussion has gone on, that if the members of the CCC wanted to elect a part-time member of one of the water authorities my paragraph (b) of subsection (2C) would need to be amended. That requires them to elect from among their own number. I can see that that is unnecessarily restrictive.
I think that my noble friend on the Front Bench will have appreciated by now that, while making full allowance for the need for all this flexibility, the view of the Committee as a whole clearly is that more than is already in the Bill must be put into it, and that our job between now and Tuesday is to have sensible consultations with the Government and decide what those essentials are.
I may say that my noble friend has made matters much easier for himself by indicating already that he is prepared to accept Amendment No. 4 in the name of my noble friend Lord Drumalbyn. It will, of course, make it far easier for us to reduce what we regard as
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being the essential items to go into the Bill if we know in advance that the Government are prepared to accept the proposition that in future any guidelines to be issued will be laid before Parliament by statutory instrument and be open to debate. That safeguards the situation admirably and makes the whole job much easier.
For my own part, I would agree that there will be certain proposals, which might perhaps be specified, for which it will not be necessary to make statutory provision, and it would be very useful if we could put into the Bill something which defines this. But, as I have said before, I do not think that the problem before us is all that formidable. We have reached a large measure of agreement on what needs to be covered in setting out the characteristics of these councils. Those matters which must go into the Bill and those which can go into the guidelines if they are statutory will be much easier to resolve if we know that the Government are prepared for the guidelines to be subject to the scrutiny of Parliament. With that, and with some reasonable assurance that we shall be able to reach an accommodation before Tuesday, I beg leave to withdraw the amendment.
Lord Underhill: Before the noble Lord sits down, may I draw attention to the fact that Amendment No. 4, which we shall be debating shortly, does not say that the guidelines will be laid before Parliament for approval before being issued; it says:
"lay before each House of Parliament a copy of any guidelines issued by him".
Therefore, that would seem that they are not to be available for discussion before being issued.
Amendment, by leave, withdrawn.
Lord Cullen of Ashbourne Lord Cullen of Ashbourne had given notice of his intention to move Amendment No. 3:
Page 5, line 29, at end insert ("and such guidelines shall be drawn up by the Secretary of State in order to promote constructive dialogue and effective co-operation between each Water Authority and its Consumer Consultative Committees, through overlapping membership and other organisational means.").
Lord Mottistone: My noble friend Lord Cullen has had to go and has asked me to apologise to the Committee for his absence. He spoke on this amendment earlier in connection with Amendment No. 2. This amendment will not be moved.
[Amendment No. 3 not moved.]
8.4 p.m.
Lord Drumalbyn Lord Drumalbyn moved Amendment No. 4:
Page 5, line 29, at end insert ("It shall be the duty of the Secretary of State to lay before each House of Parliament a copy of any guidelines issued by him under this subsection".)
The noble Lord said: I beg to move this Amendment. My noble friend has been good enough to say that he is prepared to accept the substance of it although not necessarily the words, and therefore I can be reasonably brief in dealing with it. The guidelines, as I understand it, will remain the basis on which the consultative machinery is founded, but it is left to each water authority to work out for themselves the application of those guidelines to their own area. It is desired to keep this flexible, and that means that the

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proposals put forward will not necessarily be identical but they will have the same foundation. They are subject to the approval of the Secretary of State. Of course, he can modify them at the request of the authority after they have come into operation, but presumably they can only be modified in line with the guidelines. That is not said in words, but presumably that is what happens. It is therefore important that the consumers and those who are supplying the water to them—in other words, the water authorities—should know what the guidelines contain. They should be able to refer to them and to study them so that they can see how the water authorities are adapting them to their own needs.
It is also desirable that Parliament should have the guidelines on record and should have ready access to them. My noble friend said that when the guidelines are completed—presumably at the same time as they are being sent out to the water authorities—they will be laid in the Library of the House. I presume that the Secretary of State will be able to vary the guidelines from time to time. Indeed there are only two reasons, as I indicated earlier, why the Government should have preferred not to put the guidelines into the Bill. One was to give themselves more latitude—I have already referred to this and commend my suggestion to my noble friend—and the second was because they were not going to be able to get them ready in time for the Bill to be passed through Parliament.
That being so, what is the best way of ensuring that the guidelines are made permanently available to the public? I do not think I can deal with the point made by the noble Lord opposite. I have taken the line that it should be sufficient to lay the guidelines before Parliament. The reason is a very good one: it will enable Parliament, if it chooses, to debate the guidelines, and I am sure that the normal channels will provide time for that to be done.
It would be equally easy, of course, to provide that the guidelines could be made in such a way that they could be debated through either the negative or the affirmative procedure; but as it is obviously going to be possible to debate them in any case, I would not press that aspect on my noble friend although I should be grateful if he were to change his mind on that and make it possible to have them approved by order in one form or another. I do not think I really need to add anything to what I have already said. I have proposed that they should be laid before Parliament. If my noble friend has a better proposal, then we shall listen to it and be glad to agree to it if it has very much the same effect. With that, I would commend the amendment to your Lordships and I beg to move.
Lord Sandford: As I have said already, I should like to welcome this amendment and, in response to what the noble Lord, Lord Underhill, said earlier, I would strongly recommend to my noble friend on the Front Bench that if he accepts the idea behind this amendment and incorporates in any Government amendment to it the suggestion that the guidelines should be laid before Parliament by a formal statutory instrument, this would enable us to place more reliance on them and make it less necessary to insist on all the other essentials which otherwise would have to
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go on the face of the Bill. I recommend the amendment to my noble friend.
Lord Skelmersdale: There seems to be a little confusion about exactly what I am accepting in principle; so perhaps I should say at the beginning that I am pleased to be able to reiterate my assurance to my noble friend that the Government accept the principle underlying the amendment. We believe there would be advantage in providing formally for the guidelines to be laid before Parliament, as his amendment proposes. This underlines the statutory significance of the guidelines. As I have already indicated, we attach importance to doing this and I am grateful to my noble friend for providing us with this opportunity. There are one or two minor points in the drafting of the amendment and its location within Clause 7 which we should like to improve. I would therefore ask my noble friend to withdraw the amendment, on my commitment to introduce a Government amendment to the same effect on Third Reading.
On the point of how these guidelines should be laid before Parliament, this is something which I shall have to consider slightly. As I understand it, when this phrase "laid before Parliament", or something like it, is used in legislation, it means ordered to be laid on the Table and would be in the green Minute which we all receive. I believe that this is my noble friend's intention. If not, I shall have to do a dramatic re-think. Perhaps he will tell me.
Lord Harris of Greenwich: May I ask a question of the noble Lord at this point? Is the House able to pray against them? Is it the negative procedure?
Lord Skelmersdale: No. In that case no resolution is involved, which I think is the point that the noble Lord, Lord Underhill, was making. But, of course, the point of having such Act papers, as they are called, in the green Minute is to advertise their existence to individual Members of your Lordships' House. It is then up to your Lordships to call attention to them by way, maybe, of the recently much-maligned Question for Written Answer, a debate in your Lordships' House, an Unstarred Question or whatever course whichever of your Lordships who are involved considers appropriate at the time.
Lord Drumalbyn: If I recall correctly, we dealt a short time ago with the Data Protection Bill, which provided for all three ways of doing this—by affirmative resolution, by negative resolution, or by laying an order before Parliament. I did not at that time understand that that meant simply tucking it away in the proceedings. The main point is to get a complete document before your Lordships. I do not think you can rely on all members of Parliament picking up fairly obscure references in the proceedings of the Orders of the Day. My intention was that the very least that would happen would be that the document was in a complete form laid somewhere or another, and I would prefer it to be laid before Members of Parliament, rather than simply in the Library.
Lord Skelmersdale: Yes, but the point is that when it gets on to the Minutes of Proceedings, it is then

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automatically available in the Printed Paper Office of your Lordships' House. This is how any of us read reports of, for example, the nationalised industries, which are frequently debated in the House—and I hope that they will long go on being so.
Lord Underhill: I am glad that my intervention has clarified the position, but not about the way in which it has been clarified, because it really means that we are giving parliamentary backing by a document being laid on the Table, without any discussion about it. Yet I am certain that, when the noble Lord, Lord Sandford, accepted with gratitude what the Government said on his previous amendment, he was under the impression that that meant there would be parliamentary discussion on it. Obviously there will not be, in the light of the Minister's reply, for which I am grateful, unless somebody tables a subsequent Question or resolution, and that is not what the noble Lord, Lord Drumalbyn, wants. I hope that the Government will take another look at this, because it seems to be the general view that we should have a parliamentary discussion of some kind on the guidelines, before they are actually issued.
Lord Drumalbyn: May I clarify a little further? The mere fact of introducing an order on a negative basis does not ensure that there is any discussion. It occurs only if somebody objects to the order. The affirmative resolution is different, because it gives a much stronger possibility of automatic discussion on request. What I am wanting to ensure is that there can be the possibility of a debate, if anybody wants it. It seems almost certain that people will want it, and that can be done on the basis of an order that is laid before Parliament, because it is there and anyone can ask for a debate on it.
Lord Skelmersdale: Obviously there is an element of confusion about this whole matter. In view of the lateness of the hour, it might be appropriate if my noble friend and I, together with other members of the Committee who would like to be in on such a discussion, could thrash this out afterwards. I do not feel that there is a great deal between us, but I believe that there is a certain amount of explaining to be done on both sides which would only take up the time of the Committee.
Baroness White: Perhaps I may speak as I raised this question at a much earlier stage of this Bill, because I complained about Government by guideline, and the fact that if one goes to the Library all one gets is a very awkard photostat copy of a departmental document. If one wants to discuss it, then one surely must consider, if we are to have Government by guideline, whether we could have draft guidelines, which I think is really at the back of the mind of my noble friend. I think I would be correct in saying that this would have an element of innovation about it, but, after all, one must keep up with the times and, if the Government are to govern by guideline, we should have draft guidelines.
Lord Skelmersdale: I am not sure whether the noble Baroness was here when I made the point, but I most firmly stated that the draft guidelines would be in the
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Printed Paper Office and the Library of your Lordships' House, until such time as they stopped being "draft". They would then no longer be draft guidelines, and would be the guidelines which, as I understand it, will be laid on the Table of the House under my noble friend's amendment. This, in effect, means that the real guidelines will then go into the Printed Paper Office for anybody to consult, read and take away as appropriate.
Baroness White: Would they appear on the pink paper which is circulated to us, because that is what most Members read?
Lord Harris of Greenwich: May I put in one point? I think that the noble Lord, Lord Skelmersdale, is right in saying that there is not an enormous amount between us on this question. But, with great respect, I do not think that he has wholly satisfied the Committee and I hope that before Report stage, and certainly well before Third Reading, there can be some discussion of the kind he has suggested, because I do not believe that a document in the Vote Office meets the point of those who have spoken during this debate. I just do not think that that is at all satisfactory. If it is in the Vote Office, all that can be done is to put a Question on the Order Paper or, presumably, an Unstarred Question. We want something far more satisfactory than that. The noble Lord has offered to look again at this matter, and I very much hope that he will discuss it with his advisers, because at the moment I do not think his proposal wholly meets the point that has been made.
Lord Sandford: I do not think there is much confusion. I think the Committee is quite clear that, when these guidelines are laid before Parliament, they must be laid by statutory instrument. The only matter for debate—and we can return to this at another stage—is whether that should be by the negative procedure, in which case they can be prayed against, or by the affirmative procedure, in which case there has to be a debate. There is no question that any other less formal arrangement will meet the case. It will not meet the case. If my noble friend will accept this, then he will help himself, help me and help all of us in having to be less scrupulous about the essentials that go into the Bill itself. Anything less than that will not have the slightest effect.
Lord Skelmersdale: Before my noble friend decides what he will do on this amendment, may I tell the noble Baroness, Lady White, that such papers are in the pink paper, so there will be a double opportunity to be reminded of their existence.
Lord Drumalbyn: I am very grateful to my noble friend. I think that he has dealt with this amendment very fairly and competently. He knows that we are all at one in the Committee about getting a sensible way of making the House aware not only of the existence of the document but of the document itself. That is what we aim to achieve; and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 5 not moved.]
8.20 p.m.
Lord Melchett Lord Melchett moved Amendment No. 6:
Page 6, line 35, at end insert—
("(10) Each water authority shall appoint two committees at regional level, the first of which shall bring together representatives of the water authority and the sporting, recreational and amenity interests in the area and the second of which shall bring together representatives of the water authority and the conservation interests in the area.").
The noble Lord said: I beg to move Amendment No. 6, which deals with a different matter, although one that was also covered by the Written Answer given to the noble Baroness, Lady Trumpington, just before the Easter Recess on 30th March. My amendment deals not with the local consumer consultative committees but with the regional committee which is going to be appointed by water authorities as a result of the contents of the guidelines and as a result of commitments given by the Government in another place that there should be a regional committee covering the whole of a water authority area to deal with sporting, recreational and amenity and conservation interests.
We went through this in considerable detail during the Committee stage when I made the point to the noble Lord, Lord Skelmersdale, that this arrangement—which I think was suggested by a member of another place in good faith as being a useful proposal, as indeed in principle it is—was unfortunately, in one important respect, going to cause enormous problems and that it was causing great concern to nature conservation interests. That is because, as I said at the Committee stage, there are already consultative arrangements at regional level between water authorities and nature conservation interests.
In this respect the nature conservation interests consist of the Government's statutory advisers—the Nature Conservancy Council—the Royal Society for the Protection of Birds and the Royal Society for Nature Conservation, which co-ordinates the activities of local nature conservation trusts. It is therefore a combination of the statutory body—the Nature Conservancy Council—and the two Royal Societies representing voluntary organisations. As I said at some length at the Committee stage, the Government have recognised the value of these consultative arrangements—how well they are working and how useful they are—and have endorsed them in another set of guidelines not connected with the Water Bill but issued as a result of the Wildlife and Countryside Act. Those guidelines quite clearly say that these consultative arrangements are good. They go into some detail about what should be covered, and so on.
The concern is that the commitment given in another place, and repeated in the Written Answer in this House, in effect jeopardises the existing consultative arrangements endorsed by the Government's guidelines following the Wildlife and Countryside Act. That concern arises because there is a fear, first, that if a regional committee is set up which is different from the existing consultative arrangements for nature conservation and brings in a range of other interests—amenity and recreational interests—the existing consultative arrangements will be dropped by the water authorities.
The noble Lord said at the Committee stage that the existing arrangements would continue, but there is still great concern that it is simply impracticable to suggest to both sides—the water authority staff and the nature conservation interests—that they should be expected to go through two sets of more or less identical consultative arrangements: the existing informal arrangements and the new regional committee. The regional water authority staff are not likely to thank anybody for being put through a consultative hoop with the same people twice. It would place a great burden on the staff of the voluntary organisations which, as the noble Lord knows, are hard pressed enough already—to say nothing of the staff of the Nature Conservancy Council, which we understand Sir Derek Rayner's review team, no less, has recognised as being understaffed. So that does not seem to be a sensible option, and obviously we ought to try to avoid, if we can, duplicating existing arrangements in a new committee.
The answer seems to me to be the one proposed in my amendment, and I am quite happy for it to go in the guidelines, so long as I get an absolutely clear and unequivocal assurance that that is what will happen. If the Government are going to set up a regional committee for the recreational, sporting and amenity interests, which I know would welcome this, they should set up clearly separate arrangements for the conservation interests which could then be simply what is happening already: the existing consultative arrangements for conservation interests. That would end confusion, sort matters out and remove a great deal of the concern which is being expressed at the moment. Furthermore, it would remove one problem about this set of guidelines from the Government's back, which I should have thought they would welcome. I have had confirmed to me today that both the RSPB and the RSNC are of this view, and I think that the noble Lord will be able to confirm that his own statutory advisers, the Nature Conservancy Council, take exactly the same view, too. With that explanation, I beg to move Amendment No. 6.
Lord Skelmersdale: I am grateful to the noble Lord, Lord Melchett, for giving me this opportunity to clarify our intentions towards conservation under Clause 7. I am sorry that the noble Lord should consider my recent parliamentary Answer to have caused concern—I think those were his words over the matter. When we debated this subject in Committee the noble Lord asked me for a categorical undertaking that the existing arrangements between the conservation bodies and the water authorities would continue. These arrangements for consultation were referred to in the guidance notes issued last October on procedures under Section 22 of the Water Act 1973, as amended by Section 48 of the Wildlife and Countryside Act 1981. I understand that in some cases arrangements bringing together the water authorities and the conservation organisations have existed for much longer than that. In fact, the noble Lord himself has told me privately that in many cases this has been built up over a period of some 10 years. My understanding, like that of the noble Lord, is that these arrangements are working well.

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I was then able to give the noble Lord an assurance that these existing arrangements would continue, and I am glad to reiterate that assurance this evening. When we reissue in draft form the guidelines under Clause 7 for a further period of consultation we will make clear that these existing conservation arrangements are to remain in being. I am aware that the noble Lord would like us to go further than this and to establish that the new regional level committees dealing with recreation and amenity should have no remit to consider conservation matters. That indeed is the purpose of his amendment, which seeks to establish that there should be two separate committees, one on recreation and amenity and the other on conservation—the latter subsuming the existing local arrangements. I am not, however, yet in a position to give the noble Lord that assurance.
When this issue was debated in another place, and subsequently, we maintained that the regional committees should deal with conservation matters. I do not think it would be right to suggest severing this link without giving those concerned a further opportunity to comment. When we issue our revised draft guidelines, therefore, we will point out the view of the conservation bodies, as expressed by the noble Lord, Lord Melchett, this evening, that this linkage with recreation and amenity at regional level would be unhelpful, bearing in mind the separate existence of conservation arrangements. If that view is generally agreed in the response we receive, then we will provide, in the final version of the guidelines, that the regional committee for recreation and amenity shall have no concern with conservation. This is what the noble Lord probably wanted to hear. It will be left to be dealt with as hitherto, whether brigaded under a single committee or otherwise, depending on the present arrangements and the views of those participating. I can assure the noble Lord that all those with an interest will have an opportunity to comment on the revised draft.
There is absolutely no question of the water authorities dismantling the existing arrangements. Whatever the results of our consultation, the conservationists cannot lose. In the light of these very full assurances, I trust that the noble Lord will see fit to withdraw his amendment.
Lord Melchett: I am grateful to the noble Lord for his answer. It goes a great way down the road which I hoped the noble Lord would travel. However, I think it would have been simpler for the Government to go the whole way. The noble Lord knows as well as I that only three organisations are involved, because there are only three nature conservation bodies with a regional structure where there are staff or members who can take part in these consultations. The view as to what should happen has been expressed quite clearly by the statutory advisers.
I cannot really believe that this Government, if they are thinking with their political hat on rather than simply sticking with what they have already got in the guidelines (which seems to me to be the case) would want to have duplicate committees: one committee under the existing arrangements—and I am grateful to the noble Lord for giving an assurance that they will
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continue—duplicated by another committee running alongside. To me, that does not seem to be the kind of message which the Government are generally trying to give about streamlining, efficiency, bureaucracy and so on. I do not think it is a message that noble Lords on any side of the House would be very keen to give. Nevertheless, the noble Lord has gone a very long way and has given us a cast iron assurance that the existing arrangements will continue. That is certainly what I wanted to hear and I am very grateful.
I must say to the noble Lord that the response over this matter has reinforced my support for the views of the noble Lord, Lord Sandford, expressed on the other parts of the guidelines. These are important matters and will concern various interests very considerably. They are still very open. As the noble Lord has said a number of times, the Government have been very flexible. As I have said to him, this has the disadvantage of leaving a very great deal undecided when this Bill leaves Parliament; it leaves many matters of great importance undecided. I shall certainly be urging noble Lords who take an interest in the consumer consultative committees to continue in their efforts to have the guidelines debated by Parliament in one form or another—by either negative or affirmative resolution procedure—before the Government finally issue them. The response on this point reaffirms the importance of doing that. I beg leave to withdraw the amendment.
Baroness Fisher of Rednal: I should like to make one quick comment. One must be pleased with the reply which the noble Lord, Lord Skelmersdale, has just given to my noble friend Lord Melchett. This was a matter which we discussed at great length in Committee. As my noble friend said, a considerable number of people representing sporting, recreational and environmental interests are concerned. We are all sympathetic to the difficulties in which the noble Lord finds himself when he comes to answering our questions. But if the Government had done their homework correctly; if consultation documents had gone out; if the Government had set down their guidelines when they had the results of the consultation documents; and if the Government had then brought forward their Bills, we would have saved a lot of time. Noble Lords have had to find out the answers, and in many instances in Committee the guidelines became mixed up; they became almost like Waterloo Station. We shall now be at Report stage without any guidelines. This Bill will become an Act of Parliament before we have the guidelines and before the consultation document has been returned.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
House resumed: Clause 7 reported without amendment.

Prisoners held in Police Custody
8.34 p.m.
Lord Harris of Greenwich Lord Harris of Greenwich rose to ask Her Majesty's Government what action they propose to take to prevent remand and sentenced prisoners being held in

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police custody because of the current severe overcrowding in the prison system.
The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In raising the general question of prison overcrowding, I should like to make two observations before coming to the substance of my speech. First, this is the first occasion on which I have had an opportunity to address your Lordships' House since the move of Mr. Dennis Trevelyan, the former Director-General of the Prison Department. Mr. Trevelyan served both Labour and Conservative Governments with the highest distinction. He has now become the First Civil Service Commissioner and, he having been there at the time of the May Committee and during all the discussions which took place, and having been responsible for implementing many of these very important recommendations with the highest degree of competence, it is only right to say that we thank Mr. Trevelyan for the dedicated work he did as Director-General and that we wish him well as First Civil Service Commissioner.
Secondly—and I apologise to the noble Lord, Lord Elton, for this—my noble friend Lord Hunt, who apologises for not being present this evening, asked me to say that in the last debate on this subject, which was initiated by the noble Lord, Lord Kagan, my noble friend asked a question concerning the codes of standards on which the Home Office were working. An undertaking has been given that it will be published. My noble friend asked when that will be done. He did not secure an answer from the noble Lord on that occasion and would be very grateful to have one tonight, so that it will form part of the record.
I turn now to the substance of what I have to say this evening. In the past few weeks we have seen intensification of public concern about the condition of our prisons. There has been the recently published report of the chief inspector of prisons for 1982, to which I shall be returning in a moment, and there have been renewed expressions of anxiety by the governors' branch of the Society of Civil and Public Servants. There has been also an apparent escalation in the number of industrial disputes in a number of prison department establishments. There has also been a suggestion—a very serious suggestion—by the secretary of the governors' branch that the increased number of hostage-taking incidents in prisons is related to some extent at least to the present serious degree of overcrowding. This is a sombre story.
The issue I am specifically raising tonight—namely, the number of men who are kept in police accommodation—is directly related to the present overcrowding in our prison system. For many months now we have been witnessing the growth of what is in fact a second prison system; one that has come into existence because prisoners can no longer be squeezed into some of our intolerably overcrowded local prisons.
The system is operated by the police backed up by a number of prison department assistant governors. What happens now is simply that when it is impossible for the prisons to take any more inmates, a number of remand and sometimes even sentenced prisoners are held in police custody, either in police stations or in
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the cells which are attached to magistrates' courts. Together with my noble friend Lord Avebury and a number of Members of both sides in another place, I have had the opportunity of examining the conditions in which these men are being held. Like them, I was extremely grateful to the officials of the prison department who made this visit worthwhile and also to the officers of the Metropolitan Police. However, I was deeply disturbed—as were my parliamentary colleagues—by what we saw.
Despite the admirable efforts of New Scotland Yard and of many decent, humane police officers, the conditions in which men are being kept in these cells are wholly unacceptable in any society that claims to be civilised. Most of these men have been convicted of no criminal offence, but they are being locked up in cells designed in many cases to hold prisoners for, at most, three or four hours. Prisoners are now being held in these conditions four to a cell in some cases, as my noble friend Lord Avebury and I saw for ourselves, for periods of four and five days and sometimes a great deal longer than that.
Sanitary conditions are poor. Exercise space is in grievously short supply. At the police garage at Lambeth we visited, the vehicles have to be driven around nearby streets so that prisoners can obtain a limited period of exercise. The arrangements for family visits are exceptionally unsatisfactory, for police stations and magistrates' courts, quite understandably, were not designed for any such purposes. There is in many cases a lamentable lack of adequate facilities for visits by legal advisers—a point which has been drawn to the attention of the Home Office by the Law Society.
This alternative prison system which has developed over the last 12 months operates, of course, wholly outside the prison rules which have been approved by Parliament. Police officers, at constant risk of being exposed to allegations by prisoners that they have behaved improperly and then as a consequence of those complaints having to meet the full force of police disciplinary inquiries, are being made to run a system with which most in no way wish to be associated. They did not join the police force in order to become prison officers. Nor do they have much enthusiasm for working in conditions worse than exist in many of our local prisons in this country.
I must add this. There is no sense in which this issue is of declining importance: quite the reverse. Last year the numbers held in police custody rose, on 8th September, to a maximum figure of 293. By Christmas and the New Year the numbers had fallen to vanishing point. But as soon as the courts got back to work the situation was transformed, as the noble Lord, Lord Elton, disclosed in his Written Answer of 30th March. The numbers in police custody hovered around the 200 mark during the month of February, with a minimum of 136 and a maximum of 286. But in March the numbers in police custody soared. On 15 days in that month the all-time high figure reached last September, which was 293, was exceeded—and that was before one took account of what was happening in Manchester. There, by 28th March, because of a dispute with the local branch of the Prison Officers' Association at Strangeways, a further 200 prisoners were being held in police custody.
Not only are the conditions in which these men are being detained unacceptable; they are, in my view, wholly inconsistent with our obligations under the European Convention of Human Rights. They are also beginning to impose a heavy and a wholly unreasonable burden on the police. Police establishments were not agreed on the basis of such wholly unwelcome additional responsibilities being placed on chief officers. As I indicated during the Third Reading of the Criminal Justice Bill last October, the police were persuaded, with some substantial difficulty, to take on these responsibilities both during the lifetime of the last Labour Government, when there was contingency planning in the event of a dispute with the Prison Officers' Association, and also during the life of the present Government.
Then, of course, we all recall the dispute which took place in the early years of office of this Government. I believe that the Government were wholly right to stand firm against the Prison Officers' Association during that dispute, and I believe they were also right to ask for the co-operation of the police in dealing with that—but for a strictly limited period of time, to deal wholly and exclusively with that emergency situation. But what is involved now has nothing whatsoever to do with a short-term emergency situation. What is now involved is the use of inadequate police resources to deal with the long term crisis of numbers in our prisons, and I believe that cannot possibly be right.
There is also the question of the cost of this exercise, which is not unimportant because on one of the matters we shall be coming to later—namely, the possibility of reducing the parole threshold—one of the arguments is whether the resources are available to deal with the implementation of a lower parole threshold. Cost is part of the case for the defence, as a number of us heard when the Home Secretary addressed the Policy Studies Institute recently. So this is highly relevant. How much is it costing? I warned the noble Lord, Lord Elton, as I pointed out at col. 757, that I intended to raise this question during our debate in October; so I assumed, of course, that he was prepared for it.
On that occasion the noble Lord gave his answer in two parts. First, on the actual charge to public funds, he said at col. 764 that it cost the taxpayer (I quote) "about £70 to £80 per night" for every prisoner who was detained in a police cell. That is the amount of money which is made available by the Home Office to the Receiver of the Metropolitan Police District. The noble Lord, Lord Elton, prides himself, and rightly so, on the precision of the language he uses in this House, so he may be mildly surprised to learn that there is some slight doubt as to whether what he said on that occasion was accurate, for in a Written Answer to me on 17th January the noble Lord told me that the cost to the prison department in the first ten months of last year of keeping prisoners in police custody was £1·7 million in respect of 17,168 prisoner nights. The language is that of the noble Lord, Lord Elton. In other words, it cost not, as the noble Lord said last October, £70 to £80, but over £100 a night to keep a prisoner in these squalid conditions in police cells. In short, the statement made by the noble Lord on that occasion
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was inaccurate to a factor of somewhere between 25 to 40 per cent.
The noble Lord's statement again at first sight appears to be even more inaccurate, for his second statement on that occasion—this, it may be recalled, was in a debate when the Government secured a majority of precisely three on an important amendment to the Criminal Justice Bill—was that although he would not claim that this was a recommendation at all (I quote) "it was a good deal cheaper"—that is to keep men in police custody—"than keeping them in prison". That comes from col. 764.
Again the noble Lord may be surprised to learn that this statement is not only inaccurate but appears to be the very reverse of the truth. In a Written Answer to my noble friend Lord Donaldson of Kingsbridge on 17th January the noble Lord, Lord Elton, said that the cost of maintaining an inmate for a week—not a day, but a week—in a local prison such as Brixton in 1980–81 was £168. The same day in my Written Answer, I would remind the House, the noble Lord admitted that the cost of keeping a prisoner in police custody was over £100 a night or over £700 a week.
Thus, far from it being right, as the noble Lord suggested on that occasion, that it was cheaper to keep a man in police custody rather than in prison, it is in fact more than 400 per cent. more expensive to do so. I am sure the noble Lord, Lord Elton, will be eager tonight to explain these apparent inconsistencies between the various statements he has made. I am bound to say that if they are as inaccurate as I have suggested, I am a little surprised that they have not been corrected before this evening's debate. I repeat, this is not an unimportant issue. The cost of this is exorbitant.
The conditions in which these men are being kept, as the noble Lord, Lord Avebury, and I and others have seen, are deplorable, and if it is going to be suggested by the Home Office tonight that they cannot afford the cost of bringing in various alternative ways of dealing with this problem of prison numbers, I think a number of us would like to ask how it can possibly be right to spend money on such an immense scale keeping men in these deplorable conditions and yet not make money available for far more worthwhile methods of dealing with them.
During our debates in October I said, as many others on both sides of the House said, that the Bill before the House was likely at best to have the most marginal effect upon the numbers in prison, and that indeed it might lead to a larger rather than a smaller prison population. I returned on that occasion to the proposal—I have given the noble Lord, Lord Elton, notice that I proposed to raise this matter—that the parole threshold should be reduced from 12 months to six months and consequently the parole system would operate in respect of offenders who were serving sentences of 10 months or more rather than 20 months or more which is the present position. This could reduce prison numbers by between 2,000 or 3,000 or thereabouts. I immediately concede that in the present situation that is not enough in itself but it certainly would relieve some of the pressure in the current system. Quite apart from that, it would provide an opportunity for shorter-term prisoners to serve a

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period of their sentence in the community under the supervision of the probation service.
Last July I rather assumed from what the noble Lord, Lord Elton, said on that occasion that he was in agreement with us. It is true that there were many references in his speech to the need for full consultation with all the interests involved—the probation service, the police, the prison service, and so on—but he added, in column 381:
"We would wish to bring about that reduction"—
that is, in the parole threshold—
"and have already put in hand detailed investigatory work on the issues necessary to be resolved."—[Official Report, 1/7/82; col. 381.]
He added that the work was being carried out with the greatest expedition possible.
We came back to it in October when we had the Third Reading of the Criminal Justice Bill. The noble Lord, Lord Elton, was still talking about consultation, which appeared to be taking an immense time but I recognise that consultations of this kind have to take place. However, in column 764 he added:
"We have already made substantial progress in analysing what would need to be done in bringing access to parole to some of the shorter sentence population".—[Official Report, 12/10/82; col. 764.]
Well, another six months have passed. I hope that we are not going to hear still more about those consultations tonight. Surely they have now been completed. What are the Government going to do? Is the noble Lord now in a position to tell us that the Government are now proposing to use the power that they have under the Criminal Justice Bill to bring relief to the intolerably stretched resources of the prison service? If he is not, on the basis of the statement which he made to the House last year, why not?
Moreover, the noble Lord will be speaking tonight in the context of the recently published report of the Chief Inspector of Prisons. He emphasised, as the noble Lord and the House will be aware, his own deep concern about the prison situation. The chief inspector dealt pretty brusquely with the suggestion of the noble Lord, Lord Elton, that the accelerated building programme will make a major contribution towards solving the problem of overcrowding in our prisons. As the noble Lord will be aware, I believe that the Home Secretary is right in this matter—although a number of others do not take that view—and that it is highly desirable in itself. But as the chief inspector points out in paragraph 207 of his report, much of it will simply replace existing accommodation and the refurbishment programme will actually remove cells from the system. The chief inspector concludes:
"The net result is, therefore, likely to be a worsening in overcrowding".
So much for the building programme in terms of dealing with the problem we are discussing this evening.
In paragraphs 303, 402 and 403 the chief inspector warns the Home Secretary, in what I would have thought is remarkably dramatic language coming from a public servant, of what is now happening. He says that as a result of staff shortages in the prisons exercise periods are regularly cancelled despite the clear requirement under the prison rules approved by Parliament that all prisoners should be given the
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opportunity for exercise each day. He says that prisoners who suffer repeated loss of association when confined in overcrowded conditions with nothing to do become aggressive, frustrated and depressed. He adds that civilian instructors and teachers become demoralised when they find themselves without classes to instruct, while uniformed staff grow weary of trying to deal with barely suppressed inmate aggression.
After such a report the House will tonight expect to hear something very positive from the noble Lord, Lord Elton. I hope that we shall not simply be told that the noble Lord shares our anxieties about this matter and the intolerable conditions in which men are being kept in this wholly unsatisfactory police accommodation. I hope that we will not hear just an expression of his concern, of which there is no doubt because I am sure that the noble Lord is deeply concerned about the situation, as is everyone else, but an indication that the noble Lord and his right honourable friend now propose to do something about it.
I have tonight shown, I hope, how action could be taken to reduce the prison population by over 2,000 and that the right honourable Gentleman the Home Secretary does have the statutory powers to do this. Certainly I at once concede that this is by no means enough in itself, but it would at least demonstrate to those working in our painfully overstretched prison system that the Government are now resolved to take action to reduce the number of health hazards.
8.58 p.m.
Lord Elystan-Morgan: My Lords, may I first of all on what I am sure will be a wholly uncontroversial note endorse completely what the noble Lord, Lord Harris of Greenwich, has said by way of tribute to Mr. Dennis Trevelyan. I had the opportunity of being well acquainted with his skill and distinction many years ago when I was a very junior Minister at the Home Office.
The noble Lord, Lord Harris of Greenwich, has once again placed the House very much in his debt by initiating a discussion upon a subject that has occupied the attention of this House on very many occasions over the past few years. This is wholly inevitable, in my view, because the subject of custodial detention is so central to the issue of law and order and the fundamental principles which govern loss of individual liberty as to make it one of the most crucially important topics that this House could possibly debate.
The ironic danger, however, is that so much energy and so much attention is devoted to this subject that that factor could of itself render the whole subject commonplace in our curriculum. Soon every superlative will have been exhausted, every cliché will have been expended and every feature and aspect will have been examined to the point of exhaustion. Nevertheless, the question that has been raised by the noble Lord encompasses two distinct matters, as he has himself accepted. One is the immediate crisis in relation to prisoners on remand and the other is the long-term menace of prison overcrowding. One is, as it were, the symptom and the other is the long-term deadly malady. In my view it would be very difficult for us to exaggerate the significance or seriousness of either of these two matters.

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On behalf of my colleagues on these Benches I wholeheartedly accept everything that the noble Lord has said in relation to the scandal which now exists in the context of prisoners held upon remand in police cells and in court cells, and in even less wholesome accommodation, while awaiting trial. The holding of such persons in such conditions is to be totally and universally condemned. As the noble Lord, Lord Harris of Greenwich, has pointed out, police cells were never ever intended to discharge this role. At paragraph 2.06 of his report, Sir James Hennessy puts it in these terms:
"The cells in which these prisoners were held were not intended for other than very short-term use. Nor were they designed with an eye for the need for natural light, facilities for exercise, or visits from prisoners' relatives. In short, it was not envisaged that they would ever be required to serve as prison establisments".
It appears that in some cases a prisoner will get as little as 10 minutes' exercise in 24 hours. That exercise is little more than jumping up and down, or running back and forth along a corridor. That is a scandalous situation. Indeed, even more graphic than the words of the noble Lord and the report of the Chief Inspector of Prisons is the evidence that has already been published on the part of Mr. Robert Kilroy-Silk, the chairman of the all-party Penal Affairs Group. I refer in particular to statements of his that were published in The Times in September of last year. He stated:
"In all my visits to prisons in the United Kingdom and the United States, I have never witnessed conditions as bad as these. They are as disgusting as anything I have seen in the southern states of the United States".
He went on to state that at one court which he visited at Highbury 27 remand prisoners were being held underground, two in each cell, measuring six feet by eight feet, and without daylight or sanitation. He then stated:
"Remand prisoners who are entitled to one hour's exercise a day in daylight are instead given 10 minutes in the underground corridor".
He stated that some had been held below ground for a very long time, in a succession of police and court cells for two weeks, seeing daylight only when entering and leaving a police van. I have no doubt that the noble Lords, Lord Harris and Lord Avebury, can give equally horrifying specific examples arising from their own visits.
It appears that these men are held not only in cells, but on certain occasions in garages and outhouses—and not only for a few days; there are recorded instances of persons being held for as long as five weeks in these wholly intolerable conditions. I totally agree with what the noble Lord, Lord Harris, has said: that there is every indication that the figures are on the increase. Indeed I suspect that over the last month or so there has been established a level of at least 500, or thereabouts. Not only are the figures themselves on the increase, but the areas which are affected are also on the increase. Now it is not only a case of London and the home counties being affected. I have no doubt whatsoever that, with selective industrial action in many other parts of the country, by and large the whole scale of this problem will be vastly increased.
The noble Lord has already made the point that it is wholly wrong that the police should be involved in
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such an exercise as this. Nevertheless, it should be noted, as is the case in the report of Sir James Hennessy, that the police seem to have dealt with this unwelcome burden in a most efficient and compassionate way; but of course not for one moment does that justify the system. These conditions of intense restriction are such that many people would refuse to impose them on an animal under their care. It is all the more ironic that the persons concerned in the vast majority of cases have not even been convicted. In the eyes of the law they are of course innocent. When they appear at their courts of trial they will appear in the dock with all the presumption of innocence in which, in our law, a defendant is clothed. Very many of them will be acquitted; others will be convicted. But the courts will decide that in the circumstances it will not be necessary to impose a custodial sentence upon them.
The noble Lord, Lord Harris, has raised a most interesting question of cost. I should like to congratulate him on the great assiduity with which he made the desiccated mathematical calculations that have impressed us all very greatly. I understand that the noble Lords, Lord Harris and Lord Avebury, as well as certain other distinguished Members of the House, together with Members of another place, will be seeing the Home Secretary on Monday. I am sure that we wish them well, and we are quite confident that they will put this most important case to the Home Secretary with very great firmness and clarity.
The scandal of keeping remand prisoners in police and court cells for substantial periods is, I fear, a circumstance that will continue for a very considerable time. I suspect that it is now a permanent feature of the landscape of the administration of justice in Britain, and that it will cease to be permanent only if and when something substantial, radical, and drastic is done in relation to the whole question of prison overcrowding. The problem that we are discussing tonight of the remand prisoners is only one of the ugly gargoyle faces of the central problem of prison overcrowding.
The ground with which we are dealing tonight has been harrowed over very considerably, and therefore I seek to make only a few points supplementary to those the noble Lord has mentioned, and in one or two cases to endorse matters that he has already covered in a very proper way. The situation of prison overcrowding is totally intolerable. It is referred to in Sir James Hennessy's report as an affront to civilised society. That must be one of the most blunt, firm and spectacular condemnations of a Government ever made by a senior public inspector. The position of local prisons—that is really the core and the kernel of the whole problem—appears to be worsening steadily. The report makes clear that at Wandsworth the number of prisoners is habitually at least 25 per cent. above the certified normal accommodation figure. The report, at paragraph 2.03, says:
"At such times 200 men might have to share the use of four lavatory cubicles and one hot water tap".
In Liverpool, at the date of inspection, there were 1,369 prisoners in cells normally adequate for 900. At Bedford, on the date of inspection, there were 336 prisoners in accommodation adequate for 169. Most Members of the House will have read with great disquiet the report on Brixton prison published by the

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inspectorate about a month ago. It makes very sorry reading. Brixton is, I suppose, the biggest remand prison in our system. The conclusion of the deputy chief inspector of prisons in relation to that prison was that the volume of remand prisoners per annum—the figure which, I must say, staggered me, was 75,000—would have to be reduced by 25,000 in order to bring the situation within tolerable limits.
The verdict that is given generally has already been mentioned by the noble Lord, Lord Harris of Greenwich. It is that prison conditions in England and Wales are as bad with regard to overcrowding as they ever were and are likely to get worse. Indeed, it is the projection of Sir James Hennessy that by the end of this decade—we are speaking of a point in time only seven years' hence—the figure will have risen from the present level of over 45,000 to over 50,000. Some very learned, very responsible and well qualified authors have set the figure as high as 53,000. The mind bulges in contemplating what might happen in that connection.
The short point in relation to the report is this. The Government are, at the moment, investing £40 million a year in the building of new prisons and the extension of existing prisons. In addition, £20 million a year is being spent on refurbishing old prisons. The conclusion of the report is that such expenditure,
"is likely to make no impact upon overcrowding".
The main card played continuously by the Government in debate, and played conscientiously, I have no doubt, if one can play a card conscientiously, in relation to all the submissions made from various points of the House that there was a necessity to take drastic action, was that the building programme, if not of itself adequate to make the problem disappear, was such as to ameliorate the situation and to bring it within acceptable limits. It is clear that the whole scale of capital investment envisaged at present is wholly inadequate.
The perils that we face in this connection are considerable. One of the greatest perils is already upon us; namely, that a kingdom that has taught so much to the world in relation to human liberty and human decency and freedom is now in a position to be condemned by the European Court and, before the whole world, has to acknowledge that it has failed to achieve the minimum standards of decency in this connection. It is sad that Britain should find itself in this miserable situation.
Secondly, the central problem of overcrowding has had its inevitable knock-on effect upon other factors, particularly the break-down of the whole system of work in prisons and, to a large extent, the whole programme of education and vocational training. It stands to reason that if men, and women for that matter, are to be locked up in cells for 23 out of the 24 hours, we cannot have them involved in creative work or work of any sort or, indeed, in any educational course. Thirdly, there are threats which lie in the immediate future and which are very real. We have seen the symptoms of some of them already. The noble Lord, Lord Harris, referred to hostage cases. I should like to give some figures and I think that they speak for themselves. In the whole of the period 1977 to 1980 there was one case of hostage-taking. In 1981 there were two. In 1982 there were six and in the last
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four months there were six. The pattern is very clear for anyone who looks carefully and responsibly at the situation.
In 1981, which appears to be the last year for which such figures were available, there was experienced the peak of offences against the prison code. In relation to men, the total figure was 62,800; in relation to women it was 4,400. It does not require inspired imagination to foresee a whole range of varied disasters that can, and undoubtedly will, occur. At one end of the spectrum there is the lowering of morale among the 23,000 people who are members of the prison service. At the other end of the spectrum there is the horrifying certainty, in my view, of riots of the most massive proportions, the general breakdown of order and, I am afraid, the inevitable loss of life and widespread destruction.
The question that we on this side of the House ask tonight is: is it necessary for this to happen before the Government will take action? Time does not allow me to deal with the steps which I think should be taken, but I should just like to list them. I wholeheartedly agree with the points already made by the noble Lord, Lord Harris. First, there should be an immediate reappraisal of the building programme, concentrating the resources which are necessary—and they must be on a vastly different scale from the present—upon local prisons. Secondly, there should be a robust and energetic programme in relation to work and educational and vocational training.
Thirdly, there should be constant encouragement to sentencers to give greater thought to shorter sentences, to suspended sentences, to community service orders and to grant bail in all those circumstances where it is proper and just so to do, bearing in mind that on average some 40 per cent. of men and some 70 per cent. of women who are denied bail are eventually acquitted or disposed of by means of a non-custodial sentence. Lastly, the Home Secretary should use those powers already enshrined in statute, to lower the threshold for parole, to advance the period of a prisoner's release in given circumstances, and, more than anything, again to reappraise carefully—and if necessary to carry out an agonising reappraisal—the arguments that have already been tendered on so many occasions in this House for increasing the proportion of a sentence which can be properly remitted.
The noble Lord, Lord Elton, has heard nothing tonight that he has not already heard put to him on other occasions or which he is not already aware of in any event. I hope that that will not make him feel justified in repeating, albeit in a freshened form, elegant aphorisms of which he is very capable, plus a philosophic dissertation upon the whole question. The arguments that have been put forward are the same as previously, but the situation is not the same. We are now nearer the brink than we were on the last occasion.
The temptation for a Government, particularly for this Government, of "blandishness" and of blindness in this field must be very great. Expenditure upon prison building is not exactly the alpha-plus priority of any Administration. The siting of new prisons is not one of the easiest tasks which confronts the planner and the administrator. With the frenzies of a general

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election almost upon us there is a very great temptation for the present Government to seek to portray those who do nothing in relation to this situation as the strong, silent, solid men of the situation, whereas on the other side there are the woolly-minded, soggy-hearted do-gooders. The facts speak eloquently to the contrary. Indeed, all who are concerned in any way with the administration of justice know that there is here a problem that will not go away and one that will inevitably lead to disaster and to catastrophe unless something is done speedily and robustly in relation to it. If disaster occurs, it will give no pleasure to those of us who have fought and argued for a minimum reaction from the Government consistent with the safety of the system and of the public, to be able to say some day, "We are sorry; we told you so".
9.21 p.m.
Lord Avebury: My Lords, the noble Lord, Lord Elystan-Morgan, said that if we were talking about animals there would be a different attitude to this Question, and I must say that I think it is disgraceful that there is nobody at all on the Benches opposite except the Minister and the Whip. Apparently little interest is taken by the party opposite in the important questions which the noble Lord, Lord Harris, has raised, and therefore we can hardly expect Ministers of a Tory Government to respond properly to the appeals that have been addressed to them by the noble Lords, Lord Harris and Lord Elystan-Morgan.
One can imagine that if we were talking about animals we would have the noble Lord, Lord Houghton of Sowerby, inveighing at the end of the Bench; we would have noble Lords on both sides joining in an attack on the Government for keeping animals in these intolerable conditions; and then something would happen: whereas, as the noble Lord, Lord Elystan-Morgan, has pointed out, I am afraid that we are simply repeating what has been said so many times before about the conditions in the prisons, and we shall receive the words of sympathy which the noble Lord, Lord Harris, predicted from the Government, but no signs of action.
The noble Lord, Lord Harris, mentioned the visit that was made by members of the All-Party Penal Affairs Group to the prisoners who were detained in police custody just before Christmas last year. I want to say something about that, but before doing so I want to echo the tributes that have been paid to the police officers who have to perform this unpleasant duty, for which they did not ask, and which, as far as we could see, they nevertheless carry out with cheerfulness and efficiency.
However, apart from the immense costs which the noble Lord, Lord Harris, mentioned, let us think about the implications in terms of police manpower. At that time we were told that to look after 176 prisoners required 21 sergeants and 121 police constables. Those officers, of course, were taken away from the duties that they would otherwise have been performing of detecting and preventing crime in the metropolis. One cannot be altogether surprised that the rate of increase in crime has continued to rise and that the detection of crime in the metropolis has gone down when one takes police officers away from the
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duties that they are supposed to be performing and give them these other tasks, which are not really within their competence even though they do their best under difficult circumstances.
We first visited the Lambeth police garage, where most of the prisoners come in before being transferred to other locations. But we were told that something like 20 or 30 prisoners remained in the cells there, which were on the first floor of the building. The noble Lord, Lord Harris, mentioned that some prisoners remained for several weeks in these conditions; and we met a man there who had been in Lambeth since 15th November and others who had been brought in at varying dates throughout the previous month.
The cells in which they were accommodated were designed in the expectation that the prisoners would be there for about three hours at the most. They were reasonably large, being something like five metres square, and they contained four men—two on mattresses on a bench running along a wall, and two on the floor. They had an integral toilet, but there was no other furniture in the cell at all. There were no windows and there was merely artificial lighting.
Prisoners who were convicted but unsentenced were given an allowance of £1 on reception. They do not normally stay in the police garage very long, and those who were there the longest were the remand prisoners. But when they are there they spend 23 hours out of the 24, as has been mentioned, in the cells. They only go out for exercise into this parking area on the ground floor, which is normally used to accommodate the prison vans which, as the noble Lord, Lord Harris, mentioned, had to be moved out every time the prisoners received exercise. They could not have any visits at all from relatives because there was no available room in this particular building in which the police could safely allow visits to take place under supervision.
The noble Lord, Lord Harris, mentioned visits from lawyers. I want to particularly ask the Minister to deal with this matter when he replies because I understand that it has been the subject of complaints from the Law Society, so the Minister will have had previous notice that it is a subject which has been causing great concern. In this location the visits from lawyers took place in a room off a busy corridor with the door open and a police officer outside in the corridor within sight, although we were told that in some of the other holding centres they had better provision for legal visits, with glass screens through which the police officers could see prisoners and their lawyers but not hear what was said between them.
If a prisoner wants to contact his lawyer the police ring for him, but they have no control, of course, over whether he comes to visit the prisoner; and we were told that the same system operates in Camberwell. Some people said that they did not believe that the police gave the messages to their solicitors on their behalf, although in one case where this allegation was made I checked the following day and the solicitor had received the message from the police but had not responded to it. I should like to know from the Minister what consideration he has given to representations from the Law Society on this matter, and whether any improvements in the facilities for legal visits are planned or are in contemplation.

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Turning to the cells under the Camberwell court, these were really deplorable. We saw two prisoners, normally, being held in a cell which was about half the size of the cells in an average Victorian prison. In this cell one person slept on a mattress placed on a bench along one wall while the other slept on a mattress on the floor. Again, the prisoners spent 23 hours out of the 24 in these conditions, only being allowed out in groups for half an hour's association in a room along the corridor when police manpower allowed this to happen. Again, there was no daylight whatsoever on this floor, and all the lighting was artificial. It is a well-known fact that to be permanently in conditions of artificial illumination can be extremely disorientating, and it is one of the ways in which pressure is brought to bear on prisoners by dictatorial régimes which want to get information out of dissidents.
In this location the agreed maximum number of prisoners was 30, but it was said to go up to 36 exceptionally on some nights. We saw 25 there when we visited between 7 and 8 p.m. The noble Lord, Lord Harris, will confirm that two of the men we spoke to, or at least one we spoke to and another one we heard about, were regarded as potential suicides, although in the case of one of these arrangements were made during the course of our visit for him to be taken to Brixton. I should interpolate here that generally speaking, as the noble Lord, Lord Harris, said, efforts are made to ensure that the psychiatrically ill and potential suicides are not kept in the police accommodation but are transferred to prisons where proper medical care is available. But with the sort of numbers we are considering, that may not always be possible. When the noble Lord, Lord Elystan-Morgan, mentioned the potential risks we face in this situation, that is one I would by no means disregard.
With the increase in the numbers accommodated in police units, there will be more people who are quite unsuitable for that kind of treatment, and we may find that attempts are made at suicide or even that people lose their lives as a result of the difficulties the police have in carrying out the duties of prison officers and the fact that there is no medical officer on the premises who can examine a patient to see whether he is a potential suicide risk.
At Camberwell they had three sinks at the end of the corridor, two WCs and two urinals. The prisoners could wash and shave in the morning and wash in the evening, and they could be let out to use the toilet at other times, although some of the prisoners to whom we spoke maintained that they were not allowed out to use the toilet between 10 p.m. and 7 a.m. They had no proper shower or bathing facilities. There was a plastic hose attached to a tap at one sink which prisoners could hose over themselves to get a sort of makeshift shower. Some prisoners said that if they were among the last to wash in the morning, by that time the water was completely cold. We were told there were plans to install a shower at some time in the future, and I should be obliged if the Minister would say whether the washing arrangements have been impoved since our visit.
At that location relatives could visit daily between 3 and 4 p.m., except on Sundays, for periods which varied between 10 minutes and half an hour, depending on how much traffic there was. The visitors
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had to stand in the corridor and speak to prisoners through a small square opening in a closed cell door. Children under 14 were not allowed to visit. It was difficult to quarrel with that because it would have been very distressing for young children to see their father being kept under such conditions. Lawyers normally had to interview prisoners in exactly the same way, standing in the corridor and speaking to them through an opening in the closed cell door.
As the Minister will be aware, the prison rules do not apply in police lock-ups, so none of the conditions I have described can be analysed in terms of whether they comply with those rules. The cells do not have to be certified as fit to be occupied and they certainly would not pass the inspection of a medical officer, which they would have to do in prison, because they lack proper ventilation or daylight. As the noble Lord, Lord Harris, mentioned, exercise is not possible at Camberwell, and hardly at Lambeth, so that Rule 27, which prescribes that prisoners should be given at least an hour's exercise a day, weather permitting, cannot be satisfied; and, as we heard, some prisoners are spending as much as five weeks in those conditions.
The growth in the prison population in the last few years, when one comes to analyse it, is accounted for almost entirely by unsentenced persons. In spite of the provisions of the Bail Act, the numbers in custody awaiting trial or sentence continue to increase, and that has led to the position we now face, with the people we are discussing tonight. And in spite of all the warnings that have been given in the past, the same people are recycled through the system, people who in many cases should not be there, and we saw some of them during the visit we paid.
Consider those who are suffering from alcohol problems, who go in and out of prison and occupy an enormous amount of accommodation in short-sentence units. Why not do something about them? This subject has been talked about many times—about the provision of de-toxification units and the need for better facilities for the treatment of alcohol-related offenders—and the noble Lord, Lord Elton, knows that many suggestions have been made about the sort of work that could be done to reduce the number of offenders being continually recycled through the system.
One was made the other day by Dr. Colin Brewer in Westminster Hospital, who talked about a very successful experiment that he has conducted on the use of the drug Antabuse W in conjunction with probation. He showed, in the research that he had conducted on a limited number of patients, that the reconviction rate with former prisoners given this treatment was very much lower than for any other form of non-custodial treatment that had been tried. Why do we do not allocate some money to a larger study to see whether, through the use of this particular drug, combined with probation, we can keep in the community some of the vast numbers of alcoholics who are continually in and out of the prison system? There is a suggestion that has been made by the noble Lord, Lord Harris, this evening which would result in an immediate reduction in the prison population of some 2,000 to 3,000.
There is the provision of regional secure units so that we do not have the 170-odd mentally disordered

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people in our prisons, whether they be awaiting sentence or already convicted. There is the possibility of using Harmondsworth instead of Ashford Remand Centre for persons detained under the Immigration Act pending deportation so that we could free space at Ashford Remand Centre for more of the kinds of people who now have to spend time in police custody. Then there is the possibility of using better than we now use the existing space within the prisons.
I was told the other day by a prisoner in Wandsworth that very few cells in E1 landing were occupied. In Pentonville Prison, which the All-Party Penal Affairs Group visited the other day, we saw that one wing was fully occupied by prisoners on the hostel scheme. I appreciate fully that there are certain advantages, which the governor explained, of having some of these prisoners in the final six months of their sentence accommodated in what was an ordinary prison instead of outside in the community. But we are facing a desperate situation. Should we not free that accommodation in Pentonville, so that we have fewer in police lock-ups, by providing more hostel accommodation outside in the community for the people at present there?
Both the noble Lord, Lord Harris, and the noble Lord, Lord Elystan-Morgan, referred to the report of the Chief Inspector of Prisons. He expresses the hope that, as a result of the administrative measures taken by the prison department, the use of police cells will soon cease. Then he goes on immediately to add that we cannot be sanguine in the medium term—that is, up to the end of the decade. The new places scheduled to be brought into use roughly match the estimated increase in the prison population. Meanwhile, refurbishment is going to take a considerable number of cells out of the system and the net result, he said, is likely to be a worsening of the overcrowding. That disposes—as the noble Lord, Lord Harris, has done so effectively—of the argument that the prison building programme is going to be the solution of this problem.
The deterioration can be seen over a period even as short as a few months. The noble Lord, Lord Harris, has already given the figures. In the Adjournment Debate in another place on 23rd December last, the Minister who replied, Mr. Patrick Mayhew, said that the maximum number of prisoners who would have to be accommodated in police cells was 293—and that was on 8th September last year—while the latest figure given by the noble Lord, Lord Harris, showed a new peak of 340 at the end of March.
I ask the noble Lord, Lord Elton, where he thinks this is going to end. Is there any limit to the number of prisoners that he is prepared to see kept in police custody—from 293 last September to 340 in March? How much higher does the figure go before the Minister will take any action?
The Minister in another place mentioned the improvement at Wandsworth in a number of places there, following the settlement of a dispute. We have already had the benefit of that. He mentioned the completion of High Point in Suffolk, with space for 200 inmates, and said that that would provide some measure of relief in the system as a whole, although there would not be any accommodation there for the
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remand population. I hope it will and that all these other measures taken to reduce overcrowding will be effective; but it looks to me as though they will not keep pace with the increasing flood of inmates being sent to the prisons by the courts. I think the situation will continue to get worse over the next few months unless the Minister is prepared to take the kind of action which has been advocated this evening.
The Chief Inspector called for a statement of objectives and priorities. He said there was an immediate problem which had to be faced today. Nobody who visits the prisons or who saw the conditions in which people are detained in the police cells could possibly claim that we are retaining the recognised minimum standards laid down in the European minimum standards, to which this country is a party. We are keeping people in the police cells in conditions which would cause an outcry among the public here if we saw them in the Soviet Union or in Argentina. These conditions are unacceptable, as the Chief Inspector says, and Parliament ought now to insist on action.
9.43 p.m.
The Earl of Longford: My Lords, I rise to offer some support to the Question asked by the noble Lord, Lord Harris, and to join the noble Lord, Lord Harris, my acting leader, Lord Elystan-Morgan, Lord Avebury and Lord Kagan in pressing the Government for a much more constructive reply than we have received on previous occasions. Like other noble Lords, I have visited more than one of these police cells. I am not sure whether my experience has been as extensive as those of other noble Lords who will have had their own experiences, but I have visited two police cells and I should like to endorse what has been said. I also join in paying tribute to the very gallant way in which the unfortunate police are trying to cope with the situation.
I will turn now to what my noble friend Lord Elystan-Morgan stressed was a long-term malady, and indeed other speakers have dwelt on it. Since our last debate, which was initiated so notably by the noble Lord, Lord Kagan, who is to follow me, there has been published the report which has been referred to several times, made by the Chief Inspector of Prisons. Members of the House will have read this report, and other speakers have already brought out the fact that the Chief Inspector finds that prison conditions are quite unacceptable. That is the background for the discussion this evening. I should like to endorse much of what has been said already. I will not run over the same ground but will try to put the matter in a slightly more long-term perspective.
I was reading over the weekend a very significant report produced at the end of 1977 by a working party of the Church of England. It was debated by the Synod in February, 1979. The Bishop of Truro, as he then was, had this to say in opening the debate at that time:
"The need for a reawakening of this concern in our country today, not least among Christians, is desperate. The prison service today is in a state of crisis".
That was said rather more than four years ago, and if it was true then we all know that it is even more true today. The situation is far more desperate now and the crisis is much more acute now. The noble Lord, Lord Harris, asks what steps Her Majesty's Government

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propose to take to mitigate the present overcrowding. I am afraid I must say that, on their showing up till now, the answer must be, "No action at all". That, I am afraid, is the only conclusion we can reach. But tomorrow is also a day and it would be wrong to despair. Hope springs eternal!
I hope that I shall not be thought to ignore the central fact, which was taken for granted by other speakers and I suppose that every now and then one ought to mention it. The central fact, which has produced this dreadful overcrowding, is the remorseless increase in crime—that is, of course, behind it all—in the absence of counter-measures. The figures for the increase of crime are vastly disquieting, but that does not exonerate the Government from some attempt to cope with them. If we had more time, I might spell out my ideas about how in the long run one could diminish crime, but we all know that that is a very speculative subject and no immediate reduction can be expected.
I think we must face the fact, which we have never quite faced at any time in the last quarter of a century, that crime is increasing and seems likely to go on increasing. Therefore, the prime responsibility for overcrowding in prisons is that of the criminals. But a secondary responsibility, and a grave one, is that of the judges. There are those who feel that the wisdom of the judges' general sentencing policy should be above criticism. I am not referring to their individual sentences in any case. There are those who feel that their general sentencing policy should be as immune from criticism as the integrity of the Civil Service or the courage of the Brigade of Guards. But the time has gone by when we must disguise the truth, as we see it.
It is obvious from his early utterances that the Home Secretary himself supposes that the sentences passed by our judges are too severe. There were many utterances—rather more frequent two years ago—from the Home Secretary to show that that is his opinion. It is no doubt true that if he could quietly persuade the judges to mitigate their sentences, he would be only too happy. With an election coming up we cannot expect a dramatic pronouncement in that direction tonight. But I think it is quite wrong to speak about these matters at all without coming back, again and again, to the responsibility of the judges, which is secondary only to that of the criminals.
I cannot refrain from quoting words used at the end of a Church of England report five years ago:
"We believe that pressure needs to be maintained on the courts to restrict their use of imprisonment".
If it was necessary to use pressure five years ago, it is a great deal more necessary now. But in case anybody thinks that there is something improper, almost indecent, in talking about pressure on the courts, it should be realised that those are the words used by the Church of England. Just to show that my mood is quite ecumenical, may I say that not very long ago the Roman Catholic Church produced their own report, which contained this sentence:
"Present sentencing practice in this country cannot command the support of the Christian conscience".
No doubt, they would apply those words to the situation in the police stations, but it is a general observation applying to our whole sentencing policy.
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I have said things rather like this before and will no doubt say them again, but in the time that remains to me I shall deal with an issue that has not been stressed sufficiently in this House. For me, the most arresting statement in the report of the Inspector-General occurs on page 14, which is:
"Between 1947 and 1981, the prison population rose by 174 per cent., while the number of staff in the prison officer grades grew six-fold from around 2,400 to just over 17,000".
At the same time, we are told that there is a shortage of staff. The Inspector-General is obviously mystified by that, and I understand that he is looking for the results of an investigation by the noble Lord's department into the whole question of the use of manpower. Will the noble Lord, Lord Elton—I gave him an hour or two's notice—tell us a little of what he is trying to do, if not to rectify the situation, at any rate to look into it? I would suggest that this disastrous situation arises from the greatly increased emphasis on security in recent years. It all started with the ill-omened Mountbatten Report for which, as a member of the Cabinet at that time, I must accept my small piece of responsibility, though I was not concerned directly. It is a tragedy that one of our greatest public servants, Lord Mountbatten, should have been made use of in this way, with these unfortunate results.
It has often been said by penal reformers that the Mountbatten Report put back penal reform by 25 years. That may be a bit of an exaggeration, but not all that much. To quote for the last time the Church of England Report:
"The recommendations of Lord Mountbatten's inquiry into security in prisons led to a new emphasis on effective containment and the classification of prisoners by reference to their likelihood of escape".
Now comes the crucial sentence:
"The effect has been seriously to inhibit the development of policies designed to rehabilitate the prisoner, including staff training programmes. In effect, the emphasis on security and control in official thinking about the objects of imprisonment has come to the fore".
If we are thinking of recent years, do not let us talk as though there has been progress and that there is a more enlightened régime. A few years ago this was the considered opinion of the Church of England Report. Today the situation is even more painful.
If one is investigating the waste of manpower in the prison service, one should concentrate upon the overemphasis on security as the main culprit. I remember that not so very long ago I visited a prisoner who was a gentle young man, labelled category "A" though none of the prison governors who used to supervise our visits thought that he was in any way dangerous. He use to be escorted across the prison by two men and a dog. On one occasion there was a very long delay because the dog was missing. Eventually, after a period of inquiry when I rang up the Home Office, he was allowed to come over, escorted by two prison officers only. If noble Lords want to know how prison staff are wasted, how to work up from 2,400 to 17,000, that is a small example.
Let me take an example from a different kind of prison. A prisoner whom I know has just been transferred from a high security to a medium security prison, not having been a category "A" prisoner for over 10 years. This prisoner was requested to call in at

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the office of the new prison. This prisoner waited at the door of the cell until somebody asked, "What are you waiting for?" "For somebody to escort me", the prisoner replied. The prisoner was told, "We don't have that sort of nonsense here". In other words, until this moment, and for many years, a great many staff had been wasted in escorting this prisoner and many other prisoners about. If, therefore, we are talking of security, let us ask ourselves how those 2,400 mounted up to 17,000. I submit to the noble Lord that, when he has had time to look into it, security will prove to be much of the answer.
It was, I believe, Madame Roland, speaking in better French than I could command, who said:
"Oh, Liberty, what crimes are committed in thy name".
When I think of our prison system today—its human waste, of officers and prisoners alike—I can only adapt the words of Madame Roland:
"Oh, Security, what crimes are committed in thy name".
Of course I am aware—I am not so stupid as not to be aware—that there are many prisoners one can only describe as dangerous—dangerous to the community if they escape and dangerous within the prison unless they are kept under supervision. But I know so many other prisoners who are either labelled dangerous when nobody but an idiot thinks that they are any such thing, or are subjected to conditions which could only be justified where real danger was feared.
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I quoted last time I spoke here—I return to this theme in the last minute of my speech—the words of a Conservative Home Secretary and penal reformer, Lord Templewood. I will end with a quotation from another one, the late Lord Butler. In March 1957, having recently become Home Secretary, he made the most inspiring speech by a Home Secretary on these matters since that of Sir Winston Churchill (then, incidentally, a Liberal—as the noble Lord, Lord Avebury, will recall, although he was not born then) half a century earlier. The late Lord Butler, who acknowledged his debt to a friend of many of us here—Mr. Bill Hewitt, also known as "C. H. Rolph" of the New Statesman—used these words; I am now quoting Lord Butler of Saffron Walden when he became Home Secretary and proclaimed a new era of penal reform which started well and then fizzled out. At any rate, Lord Butler used these words:
"We should recognise that what would contribute most to a reduction of overcrowding is the reduction of long sentences".
That is what Lord Butler said in 1957, before overcrowding as we know it today got under way at all. If that was obvious in 1957, then it is a hundred times more obvious in 1983. It can only be described as the pons asinorum of the subject; or the first word and the last. May heaven grant that before long we may be given a Government—and I am not now talking in party terms but about penal reform—which will have the wisdom and the courage to walk in the light of the actual knowledge which is available to us all.
9.56 p.m.
Lord Kagan: My Lords, on 22nd March the noble Lord the Minister stated that the Home Office had commissioned a thorough review of penal administration in Holland. May we ask whether this review has been completed, whether there is a report, who is conducting the review, and if it is not ready, then when will it be ready? We are still looking for a solution to the problem we are now debating in terms of more prisons being built. Twenty years ago Holland decided that it would take a hard look at its prison system. Holland came to the conclusion that prison as a deterrent or as a means of re-education had no effect. It therefore decided to turn to other means of preventing crime and to other deterrents. Within seven years Holland reduced its prison population from the same proportion we have now to one quarter of it. In other words, in proportion to Holland, if we had done the same, we would now have a prison population of 11,500 instead of 45,000. This would represent a saving of £350 million a year, even if we assume that the average cost per prisoner to be £10,000—a total of £1 million a day.
In industry, if we know of such a disparity in achievement, we immediately search for the reasons. So far, all that has been established is that the crime rate in Holland has not risen more than it has in this country; life is just as safe there as it is here. The results achieved are so much better and so much more efficient, and so much cheaper. I am stressing this point because very often public opinion is cited as a cause why the Government or Ministers cannot put into effect improvements which have been recommended. Surely it would appeal to public opinion to know that we can save as much as £300 million of wasted money on a system that does not work. I shall now quote the Home Secretary, who said:
"There is no reason to believe that higher use of imprisonment is effective as a response to increasing crime".
Here is another quote, from the former Director-General of the Prison Department:
"There is no evidence that prison acts as a deterrent or has a rehabilitative effect".
So we are keeping an expensive system going to no useful purpose.
In Sweden in the mid-seventies they decided to reduce the prison population by as much as 80 per cent. They have achieved that in less than five years, and the total prison population in Sweden is 4,000. That is again four times better than our performance. In Sweden they have annually dealt with 12,000 cases through the probation service, and that, of course, has been the most effective means of dealing with crime. On the other hand, America, which has an even higher proportion of prisoners per 100,000 of population—it is 50 per cent. higher—has shown that its crime rate has not reduced but is increasing even faster than ours in this country. So all the evidence is there.
In the report of the Inspector-General of the Prison Service he points out that the prison officers should widen their activity and should share their work with the probation officers. Of course, this would be a very effective way of doing it. I come back again to Holland; that is what happens in Holland. The Dutch prison officers are very highly paid. So are the English, but
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they have to put in 20 or 30 hours' overtime to justify the higher pay. If the prison officers were allowed to extend their activity, from being purely discipline officers to being counsellors and mentors, as they are in other countries, then we would have a much better result. If I may borrow a quote of Maxim Gorky from The Inspector General:
"Prison cannot change man, but man can change man".
It wants a higher quality prison officer to influence the prisoners, to help them in the primary objective of prison, which was supposed to be to help the released prisoner lead a better life.
At this late hour I shall not detain your Lordships any longer. Perhaps I may again ask the noble Lord the Minister when the report of the result of the study in Holland will be ready, because it may give us the key to a better solution than building new prisons at a cost of £60,000 per place—three times the estimated cost of a place at the Hilton Hotel.
10.4 p.m.
Lord Elton: My Lords, the noble Lord, Lord Harris, has drawn your Lordships' attention tonight to a matter which he rightly describes as being a pressing concern. He prefaced his Question most appositely by tributes to the recently promoted Director-General of the Prison Service Mr. Dennis Trevalyan, and I was glad to hear noble Lords precede my own endorsement of what he said with theirs.
The noble Lord has drawn on the report of Her Majesty's Chief Inspector of Prisons, as have a number of your Lordships, and he was kind enough to warn me that he intended to do so. In so far as this relates to his Quesion, I will take the points up as well as I can, though he will understand—and I would like to make this a general preface to any references to that report—that it is relatively recently received and the Government should not give an official response or conclusion until they have had time to reflect maturely on its contents. That does not mean I shall be inhibited from referring to it.
The noble Lord has drawn on information extracted by parliamentary questions and also from his own visit last December to two places in which prisoners are held in police custody—the Lambeth police garage and the Camberwell court house. On that night there were 157 prisoners in police custody. On subsequent occasions there have been a great many more. They are held not only in Lambeth garage and in a number of court houses but also in police cells and when their numbers are at their highest they are held not only by the Metropolitan police force but by other police forces as well.
Noble Lords are right to say that these prisoners are held in accommodation not designed for long-term occupancy. They are right to say that policemen can be employed far more effectively on other duties, and they are right to say that the inconvenience caused to the families and the legal advisers of prisoners held in this way is far greater than it would be if they were held within the normal system. While I have comments on each of those statements, I do not hesitate to accept that each is broadly true.

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Nor do I hesitate to say that these are thoroughly regrettable circumstances and that they cause as much concern to myself and to my right honourable friend as they do to the noble Lord. In fact, they probably concern us rather more, because we have to live with the problem from day to day and we have the daily statistics placed regularly before us. We are left in no doubt, either by the police that they do not like acting as gaolers or by the relatives and advisers of the prisoners that the whole thing is highly unsatisfactory. Nor does the noble Lord need to tell me of the conditions in which he has seen prisoners being held, because I have seen them myself. They remain vividly in my memory and I do not find them acceptable either.
Why then, the noble Lord, Lord Harris of Greenwich, and other noble Lords ask, do we not abolish the problem at a stroke? Why do we not do various things, including using our powers under the Criminal Justice Act, and either reduce the minimum qualifying period for parole or simply introduce executive release on a limited basis? I will come to those two questions in a moment, but before I do so I should briefly tell your Lordships something about how we have come to be faced by this fluctuating but recurrent excess of prisoners over prisons in London and the South East and what we are doing about it in ways other than those which noble Lords commend. As to the origins of the problem, your Lordships will be well aware that the majority of our prisoners are held in prisons built in the days of our grandfathers and earlier. I am talking about buildings a century or so old, often seriously under-maintained over a long period and with sanitary arrangements that are primitive at the best of times and often connected to decaying sewers and supplied from defective hot water systems.
There is a lot of this accommodation and a lot of it is in London. Brixton and Wormwood Scrubs both fit that description. At present they house between them about 1,800 prisoners. We could, I suppose, simply have shrugged our shoulders at the backlog of neglect and the stockpile of decay which we inherited from previous Governments and kept them in continuous use for as long as possible. Had it been overnight accommodation we could have done so. But this is not overnight accommodation. It is not accommodation in which prisoners are held for only a day or two or even 10 days at a time. It is permanent accommodation, occupied by prisoners on remand or serving sentences measured in months and years, not in days or even weeks. It would have been wrong to leave it unimproved in order to keep police cells empty. We therefore have modernisation programmes running in both prisons which have meant emptying 350 cells. Had we not started those programmes we should not have had this debate tonight about the use of police cells on a temporary basis. We should have had one about the use of Wormwood Scrubs and Brixton on a permanent basis, and the accusations would have been far more damaging and harder to deal with.
Let us duly note, therefore, that the problem we have tackled in the prisons is bigger and its impact on prisoners in humanitarian terms is even more severe
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than the one which now exists in the police and court cells as a result of our tackling it. From that it may sound as though the police cell problem is entirely of our own making; but that is very far from the case. It is the prime duty of the prison system to detain those persons who are committed to it by the courts. Neither the Government, nor the Home Secretary, nor I, nor the prison service, determine the number of prisoners who have to be detained. That is determined by the courts.
The sentencing and remand policies of the courts determine how many prisoners have to be detained. Over that number we have no control, and it would require a fundamental change in our judicial system to alter that. The noble Earl, Lord Longford, is right to point that out. But I must ask myself whether he does the courts sufficient credit for the extent that they have reduced the average length of sentences, or whether he adequately assesses the sheer pressures of criminality on the courts. The number and, indeed, the nature of the sentences that they pass must, as the noble Earl rightly stressed, be related to the volume and the seriousness of cases coming before them. Over recent years there has been a steady increase of around 10 per cent. a year in court business; and that is a matter for some concern.
But it is the Crown Court which is responsible for dealing with the most serious offences; and here the picture is different, and sharply more serious. In the last quarter of 1982 the number of offenders dealt with in the Crown Court, other than by acquittal, rose by over 16 per cent. as compared with the previous quarter, and a staggering 26 per cent. as compared with the comparable figure for the last quarter of 1981. The implications of this growth in court business for the prison population, as well as for the problem of delays in bringing defendants to trial, are inescapable, and must be acknowledged both in this House and elsewhere. As long as more offences are committed, more offenders arrested and tried and more defendants convicted and sentenced, we shall be faced with formidable problems. What the noble Lords, Lord Harris and Lord Elystan-Morgan, are saying is in fact a commentary on, and a condemnation of, developments in society itself, as well as what they see happening in the prison system.
One result of this has been a steady recent increase in the number of unconvicted prisoners. Because remand prisoners have to be held reasonably near to the court before which they have to appear, our options in placing them are reduced to a minimum. In the metropolitan district alone the prison population as a whole has increased over the last 12 months or so by some 500.
Given those figures, and given the urgent necessity to take some old and unsavoury accommodation out of use for modernisation, it is scarcely surprising that we have had to take exceptional measures to house some of these people. It is not popular with the police. It is not popular with us. Noble Lords have made it clear that it is very unpopular with them, and with the prisoners and their friends. But it is necessary; otherwise, it would be impossible to discharge one or other of our duties at all—either our duty to the courts

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and to society to detain these people in the short term or our duty to these people themselves to detain them in the very much longer term in conditions acceptable in the twentieth century. Let me make this quite clear: you do not have to be soft on punishment in order to want to do that; one has only to inspect the accommodation itself.
As a consequence, some prisoners have had to be held in police custody. In 1981 and early 1982 the average number so held was only 10 or 15. It was during last summer that the effects that I have spoken of really began to bite. Occupancy peaked at 293 in September, fell to zero over the Christmas holiday, rose steadily to hover between 300 and 350 just before Easter, and diminished again over the recent holiday. Last night it stood at 274, and the upward pressure will soon be reasserted.
So far the problem has remained confined largely to London and the south-east, to which the noble Lord's Question is specifically directed. But I would mention that local prisons and remand centres in other parts of the country are also under great pressure. Industrial action at Manchester Prison at the end of March, as I think the noble Lord, Lord Harris, mentioned, resulted in over 250 prisoners being held for several days in police custody in the Greater Manchester, Lancashire, and Cheshire police areas. I am glad to say that that action has now been suspended, but it accounts for the fact that the national figure for overnight detentions in police cells briefly exceeded 500 at the beginning of April.
So much for the causes of the problem and its magnitude. I have said that we are taking steps to deal with it, and I ought to give your Lordships an idea, at least, of what they are, and an idea also of the complexity of making any adjustments to a system as large and as intricate as that with which we are dealing. When the system is as full as it now is, to fill or empty a cell anywhere sets off a chain reaction through two, three, or even a dozen establishments. We have, however, taken a considerable number of steps which, together, have sharply reduced the demands made on police custody. We have increased the frequency of transfers between prisons, so that any vacancy that arises is taken up at the earliest possible moment. We have stopped the use of Wandsworth as an overnight staging post for prisoners in transfer. We have, in suitable cases, transferred shorter term prisoners than usual to take up vacancies in training prisons. We have brought new accommodation at Warren Hill into use earlier than planned, and we have deployed a carefully selected group of prisoners as a working party from Wormwood Scrubs to Ashford Remand Centre. All this makes considerable demands on all grades of the prison service. Your Lordships will recognise the value of that service, and I endorse it.
Each of these steps has, as an end product, created more usable prison places in the London area, and we are continuing to look at other ways of ensuring that all available accommodation is used to the fullest effect. This includes a recent internal report on procedures for categorising and allocating prisoners with a view to making increased use of our lower security establishments and our open prisons. Those are what I call the current tactical responses to the problem. Other responses will have a longer and more
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strategic effect. By next month we shall bring into use new accommodation at Highpoint in Suffolk. This is a category "C" prison, where a 200-place extension is almost ready for occupation. It was originally intended as a detention centre, but in the circumstances we shall commission it for adults. This will enable us to move selected sentenced prisoners out of the London prisons and further reduce the use of police cells. Next year we shall commission Wayland, a new category "C" establishment in Norfolk, and complete the refurbishment work at Blundeston and Canterbury. Together these will provide about 600 new places.
In the longer term, Wormwood Scrubs and Brixton will return to full operation. Further relief will be provided as additional places become available elsewhere through our programme of new prison building and refurbishment. This, as your Lordships know, is the largest such programme undertaken by any Government this century. However, there are still likely to be some prisoners for whom we cannot immediately find room within the prison service in the south-east for at least the next few months. During that time, some continuing use of police cells will be inevitable if we are not simply to abandon what I regard as the categorical imperiative of improving the very worst of existing prison accommodation.
We shall seek to ensure that these problems are alleviated in every reasonable way, and that the experience is as brief as possible for each individual. Though some inevitably will repeat it, it will be a matter only of a few days and the police will concentrate on having every prisoner into a prison ahead of his remand production. If the noble Lord, Lord Elystan-Morgan, was able to give me details of the case involving someone detained for, I think he said, five weeks, I would be obliged, because I should like to look more closely at it.
Lord Elystan-Morgan: My Lords, I was quoting from a second leader that appeared in the Guardian, I think about three weeks ago. I am sorry I have no information of my own beyond that.
Lord Elton: The noble Lord has put me on to what may or may not be a cold scent, my Lords, but I will follow it up.
Lord Avebury: My Lords, there is the instance of the prisoner who, when we went to the cells, had been there since 19th November. The period between 19th November and 20th December is not far short of five weeks.
Lord Elton: I am obliged to the noble Lord. It is our intention to keep this use to the short term, for obvious reasons. I can assure the noble Lord, Lord Avebury, that the police will continue to identify those with medical problems swiftly, and give them priority transfer to prison for treatment or observation. Priority will also be given to girls, to women and to young men under 21. Where exceptional circumstances result in their being in police custody overnight—one can never guard against transport

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breaking down and other unforeseen events—they will normally be moved to prisons on the following day.
We shall continue, as at present, to see that all locations where prisoners are held overnight in police custody are visited daily by a member of the prison service governor grades. The advice thus made available will supplement the advice given by the Home Office to all police forces engaged in this work. These include several outside London, as I have said, particularly the Essex, Kent and Thames Valley constabularies.
There is no doubt that the police do their best, with limited resources, to provide all reasonable facilities in difficult circumstances. I have been greatly impressed by what I have seen of this work and of the spirit in which it is being done. My right honourable friend and I are grateful for their considerable achievements in difficult circumstances and I am glad to put our appreciation of the work of each of the forces concerned on record. But they cannot ensure that prisoners in their custody receive all the privileges which they might expect in prison. Providing facilities for visits has proved to be particularly difficult. In some cases, where it has simply not been possible to arrange for visits, the police have arranged for prisoners to have access to a telephone to help them to resolve pressing domestic problems.
Provision is always made for visits by legal advisers. The conditions under which they are made are certainly very far from satisfactory on many occasions. They are, I fear, almost entirely due to the unavoidable result of the design of the buildings themselves. I also acknowledge that problems do arise from the frequent and unpredictable moves to which remand prisoners are subject. The noble Lord, Lord Avebury, referred specifically to this and to the Law Society who have made us aware of their concern about it, and we have been able to help in a number of individual cases. The principal problem used to be quite simply that of discovering exactly where a particular prisoner was when his family and advisers wanted to get in touch with him. I am glad to say that the introduction by the police of a computerised record of movements of prisoners has enormously reduced that problem.
Noble Lords have been concerned at the use of policemen for this work, and in this connection I might at this stage refer to the point raised by the noble Lord, Lord Avebury, who actually quoted the numbers employed on a particular night. I certainly accept that the detention of prisoners in police cells is not a proper use of police manpower. The loss of manpower for normal policing is, however, not as great as might at first appear. That is because much of the guarding of prisoners is done by officers who have volunteered to work on their rest days. This cannot, of course, be regarded as a wholly satisfactory solution, but is does avoid an excessive drain on manpower.
Your Lordships raised one or two other points which I shall turn to briefly before I return to our main theme and the Question. The first was brought forward I think by the noble Lord, Lord Harris, in place of his absent and noble friend Lord Hunt. As my honourable friend Mr. Mayhew said on 17th December in reply to
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a Question by the honourable Member for Ormskirk, Mr. Kilroy-Silk, we hope to publish a draft of the standards for discussion during the course of 1983. I think that that was the information he wanted.
On the matter of conditions being related to the taking of hostages, I acknowledge that there has, indeed, been an increase in the number of hostage-taking incidents in prisons this year. We do not have firm evidence that this increase results from overcrowding in cell accommodation, but we recognise that overcrowding can produce tensions leading to assaults on staff and other prisoners and to other difficulties. I think that that must be subjectively self-evident.
As to the conditions, I may have misunderstood an almost aside comment by the noble Lord, Lord Elystan-Morgan, on garages and outhouses. I should explain the situation to him although perhaps I am telling him something that he knows full well already. The Lambeth Support Headquarters is in fact a holding centre. It is known colloquially as the "Lambeth garage" because it houses the metropolitan police transport fleet which, as the noble Lord, Lord Avebury, has said, has to give place for the prisoners when it is time for them to exercise. It contains six to eight holding cells, each capable of holding 20 prisoners by day and a smaller number by night, together with a similar number of individual cells. Although it is poor by prison standards, in that there is no natural light, they are similar to cells in many other police stations. I am sure that the noble Lord, Lord Elystan-Morgan, did not actually think that ordinary garages were used for this purpose.
The noble Lord, Lord Harris, and other noble Lords referred to the number of prison officers, which, of course, itself has a bearing on prison conditions. At a time of restrictions on the size of the Civil Service generally the Government have indeed arranged for a 15 per cent. increase in the number of prison officers between 1979 and 1984, from about 15,700 to about 18,100. Anything I say, of course, which is of solace to the concern of the noble Lords, Lord Harris and Lord Elystan-Morgan, will add to the anxiety of the noble Earl, Lord Longford, who considers that the numbers are vastly inflated in relation to the work which they do. I shall give an explanation of that, to some extent at least, in a moment. I would just add to what I have already said that there is a net addition of 800 officers in the course of the current year, 1983–84.
Her Majesty's chief inspector's report refers to the question of productivity in the prison service. The growth in the number of uniformed grades rests in a combination of the additional tasks undertaken by the prison service and the effect of changes in conditions of service. The main impact arose as the noble Earl, Lord Longford, suggested it did, from implementing the Mountbatten Report. This led to higher manning levels at dispersal prisons, improved security measures, increased supervision and improved classification and allocation procedures, all of which required more staff. Although the noble Earl, Lord Longford, may feel that this was a retrograde step, I notice that there are more voices than his raised in horror whenever there is a breakdown of security and an escape of a dangerous prisoner, and I would ask him to bear that in mind.

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However, there are also other ingredients. Changes in conditions of service included introduction of a five-day, 40-hour week for staff previously working a 12-day fortnight of 84 hours, and new standards of annual leave and training allowances were introduced. Fresh demands have also been placed on the service by, for example, the opening of new establishments and the reporting requirements of the parole scheme. But, as I said towards the beginning of this, I fear, rather overlengthy address, the contents of the chief inspector's report are something on which I would like to dwell with care before giving a definitive reply. I can only reply to the noble Earl, Lord Longford, on, as it were, an interim basis as to what would appear to be the principal ingredients of this change at this stage.
The Earl of Longford: My Lords, can the noble Lord say whether he confirms that there is a wide ranging review of the staffing position now taking place?
Lord Elton: My Lords, we are looking at the whole range of questions, and the question of how we deploy the staff most effectively is central to this.
The noble Lord, Lord Avebury, asked about the showering facilities in police and court accommodation. Perhaps I could give a synopsis of what I have before me. There are three alternatives where there are no proper showering facilities in this sort of accommodation. One is the ordinary portable manufactured shower unit which has two disadvantages. It tends to break up when it is heavily used and, if it is broken up deliberately, it can produce sharp slivers of metal or plastic which can be used as weapons. The heavy duty version of this is unfortunately designed to arrive and remain bolted to the back of a lorry. The third alternative is a permanent and conventional builder's job, and, as a result of our experience and indeed his comments, we are looking at the possibility of doing this in appropriate places, but we cannot do it while the accommodation in question is in use. The noble Lord will understand that this is a difficult question and it is one of the many reasons why we are anxious to keep, and I believe successful in keeping, the use of this accommodation down to very short periods.
The noble Lord, Lord Kagan, asked me about the progress of the Dutch report, which I first announced to him on 22nd March. I regret to tell him that in the intervening space it has not been possible to arrive at a final report. We expect to have it in hand and under study before the end of the year. I personally look forward to it with the greatest of interest. He also referred to the probation aspects of prison officer work. I think I can do no better, though it is perhaps not a very good best, than refer him to the comments on this which I made in answer to his Question in the debate on 22nd March, to which he has already referred.
The noble Lord, Lord Harris, made some representations about statements I made to the House which I shall read tomorrow with even more care than I have read my transcript of them now. If I have got him right, he is referring to a Written Answer in col 1269 and a remark I made in col 764 on 12th October in proceedings on the Criminal Justice Bill. I ought to point out to him that in the Written Answer I implied that there were dangers in using an average since this was not the way we did it. In fact, we have to base what we say on historic cost.
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The Answer I gave on the Written Question was that the cost of holding prisoners overnight in police custody is not assessed on the per capita basis but represents actual expenditure on staff, accommodation, and other items determined by various factors. I shall not go on, but it fluctuates. I trust I have not misled your Lordships to the degree of magnitude which the noble Lord suggests. I shall look with care at the record.
Lord Harris of Greenwich: My Lords, I hope the noble Lord is going to look at it with more than care. The statements I have quoted are direct quotations from the noble Lord. He was the person who put the cost at £70 to £80 per night. After he has looked at this tomorrow carefully, as I am sure he will, I hope he will come to the conclusion that if there is any doubt at all about these figures, particularly given the scale of error which it is at least possible to interpret from these different answers he has given, he should use the normal procedures of the House and make a personal statement.
Lord Elton: My Lords, of course if a personal statement is appropriate, I shall make it. But the arithmetic that I have applied to the two pieces of print that I have before me does not suggest that it is great. I may have misinterpreted what the noble Lord said. I may have taken the wrong reference. I shall certainly do whatever is proper under the circumstances.
May I now return to the main burthen of the noble Lord's Question. We are discussing the need to keep prisoners briefly in police custody as a result of overcrowding in the prisons in London and the South East. I have sketched out the origins of this need, which are inescapable. I have explained the various steps we have taken to limit its extent at the present time. I have outlined the medium and long-term action we are taking to bring it to an early conclusion. I have said that that conclusion is still some way off. I have also listed the action that we are taking, together with the police, to mitigate its impact while it lasts upon those prisoners on whom it bears directly, and on their families and their legal advisers. Together, these add up to a not inconsiderable response to a not inconsiderable problem, but they will not, I know, satisfy the noble Lord, Lord Harris, or other speakers in this debate, because he, and they, believe that we should implement a reduced qualifying period for parole and that we ought to be ready so to do now.
The noble Lord was not, I think, present for the debate last month on an Unstarred Question by the noble Lord, Lord Kagan, though I do not doubt that he read it. I ought therefore to repeat in the briefest of paraphrases the response I then made to the same proposition which was made to me on that occasion by the noble Lord, Lord Hunt. This was that to reduce the parole threshold is a far more intricate question than a simple expression of the idea suggests, and it has considerable resource and operational implications. The extent of these defy immediate, or even modestly swift, resolution, as the noble Lord clearly expects and as I would have hoped. Nonetheless, my right honourable friend and I are pursuing it with determination, care and urgency to see whether it may prove possible to take at least a step in this direction, though when, if at all, that might be I cannot, I regret, yet tell your Lordships.

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The noble Lord, Lord Elystan-Morgan, referred to executive release. During the Second Reading of the Criminal Justice Bill last summer I outlined the role which the Government saw for the power of early release provided by what is now Section 32 of the Act. I made it clear—and I must repeat it—that it is for use only in extremis because, among other things, it represents a very serious interference by the Executive with the judiciary. I will not go on at greater length because I see that I have already taken half an hour, and that is something I deplore in others and regret in myself.
Lord Avebury: No, not on this subject.
Lord Elton: Your Lordships will recall the legislative steps we have taken to enable the courts to reduce the pressure on the prisons. The House will recall the range of administrative and other steps we have taken to ease the impact of the pressure on police cells in London and the South East, and your Lordships will, I trust, also remember the succesive programme of refurbishment and building that provides a backdrop to this whole issue. Above all, noble Lords will realise that this issue is just one aspect of the vastly intractable problem posed by the decaying and largely archaic set of prison buildings that all of us have inherited. The steps we have taken to resolve it—and which I have described—are, similarly, just one aspect of the massive programme of building and refurbishment with which we are tackling it.
For the noble Lord, Lord Elystan-Morgan, to imply, with the support of the noble Earl, Lord Longford, that we in Government are doing nothing and therefore think ourselves as strong, silent men is, in the light of that, absurd. And for the noble Lord, Lord Avebury, to suggest that a fuller Chamber would cause us to take more vigorous action is equally misplaced. It might cause me to speak more briefly—because my noble friends would be at me more viciously than the noble Lord, who was kind enough to say "No" when, a short while ago, I said I should have spoken more brietly—but Government have undertaken so much in that respect this century, and that must be my answer to the Question the noble Lord has asked me tonight.
Lord Harris of Greenwich: My Lords, the Minister has answered, albeit rather briefly, the point on the parole threshold, and he rightly said he had gone into much detail and had taken a lot of trouble to answer the various points that have been made. Will he not give any indication of when the Government will make up their mind on the parole threshold? Is it really impossible to give any guidance at all about when that will be done? I hope the noble Lord intends to look into the question of the inaccuracy of the statements he made last year. I do not want to make a major issue of it, but, bluntly, if Ministers make inaccurate statements, they should correct them.
Lord Elton: On the first of those two points, my Lords, I should very much regret making a statement about the probable date of a decision on the reduced threshold of the qualifying period for parole and then have to make another statement apologising for misleading the noble Lord, so I am not going to do it. As for the question whether I have in fact made an
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inaccurate statement, of course I am prepared to do whatever is correct and honourable. The noble Lord says he does not want to make an issue of it. He has raised it three times in this debate, and I think that is sufficient.
Lord Harris of Greenwich: Because the noble Lord had not corrected it in the past, I was giving him an opportunity to consider doing so.

Plant Varieties Bill [H.L.]
Returned from the Commons, agreed to with amendments.

Litter Bill [H.L.]
Reported from the Joint Committee with amendments, and recommitted to a Committee of the Whole House.
House adjourned at twenty-one minutes before eleven o'clock.