Lords Sitting of 27 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 Hereford.

Channel 4 TV: Financial Support
Lord Winstanley: 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 is their estimate of the loss to public funds which will result from the financial support now being given to Channel 4 TV by the independent television companies.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, during the passage of the Broadcasting Act 1980, which paved the way for the fourth channel, the Government estimated that the likely reduction in the yield of the ITV levy during the first three years of the new channel might amount in total to some £75 million in 1979 prices. It remains our view that that estimate is broadly correct.
Lord Winstanley: My Lords, I thank the noble Lord for his Answer. May I ask him, however, to go a little further? Does he accept that in real terms the Exchequer has lost £100 million in levy from ITV between 1978 and 1983 and that the main factor has been the start-up of Channel 4? Does the noble Lord accept that this is likely to be an ongoing situation, whatever happens with regard to the Equity strike; that anxieties already have been expressed by the IBA and others about the reduction in programme output by the ITV companies; and that any attempt by the Government to recoup further finance from the 15 ITV companies could have a disastrous effect on programme standards? In other words, will the Government continue to bear their share of this very substantial burden?
Lord Elton: My Lords, a new television channel has been launched, financed entirely on a current account basis. It is only to be expected—indeed, it always was expected—that the profits of ITV companies would diminish sharply in the introductory years. The receipts from levy and corporation tax must also therefore go down until the new channel generates sufficient advertising revenue to be self-supporting. This we expect it to do.
Lord Aylestone: My Lords, while accepting that the Government, and public funds, have suffered a loss of £75 million, could the noble Lord say what the television companies have lost during the same time?
Lord Elton: My Lords, the fourth channel did not come on the air, I think I am right in saying, until some time in November of last year. It is impossible to predict the results of the profit and loss account so early in the financial year.
Lord Taylor of Gryfe: My Lords, could the Minister say exactly what is the contribution of the independent television companies to the fourth channel for this year? Most of the companies have already published that amount.
Lord Elton: My Lords, I am not certain in what terms the noble Lord is asking his question, but I think the right answer is cultural diversity and the provision of material which minority groups would not otherwise have the opportunity to see.
Lord Taylor of Gryfe: My Lords, I am merely asking what is the total contribution of the independent television companies, in financial terms, to the maintenance of the fourth channel.
Lord Elton: My Lords, the noble Lord will be able to deduce that from the text of my first and substantive Answer.
Baroness Burton of Coventry: My Lords, on a more cheerful note, not dealing with finance, is the noble Lord aware that many people greatly appreciate the in-depth news programme put out by Channel 4 each night at 7 o'clock? Would the noble Lord convey that appreciation to Channel 4, in view of the very difficult time that they are having?
Lord Elton: My Lords, if they know their business as well as I think they do, they will be aware of it in approximately 30 seconds.

Greenham Common Demonstrations: Public Costs
2.39 p.m.
Baroness Sharples: 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 has been the cost of coping with the demonstrations on Greenham Common, and how this cost has been divided between local and public funds.
Lord Elton: My Lords, we understand from the Chief Constable of the Thames Valley Police that a running total of the costs of policing demonstrations at or associated with Greenham Common, where demonstrators first arrived in October 1981, has been kept since 1st January this year and is current to 4th April. The total manpower costs of policing such demonstrations between 1st January and before the Easter demonstrations is estimated at approximately £185,000; and the same total costs of policing the Easter demonstrations, some of which took place at Burghfield and Aldermaston as well as Greenham Common, are estimated at approximately £340,000. Of that figure of £340,000, some £252,000 was attributable to additional costs. Police expenditure is shared between local and central Government and attracts 50 per cent. specific grant from central Government.
Baroness Sharples: My Lords, I thank my noble friend for his Answer. Would he not agree that the Greenham Common demonstration is a continuing, running sore? Is my noble friend further aware that I visited the site on Sunday and can well understand the appalling "fix" in which local residents find themselves because of the disgusting state and the very offensive smell of the place? Has my noble friend any comment to make?
Lord Elton: My Lords, I suppose the proper comment is that those who pursue aims of public policy by means of demonstration should seek to do so in ways which are less than offensive to those whom they seek to persuade.
Lord Renton: My Lords, would not the Greenham Common ladies and others have done more for peace and for the safety of our people if, instead of incurring these large sums of police expenditure, they had agitated for increased expenditure by local authorities—or some local authorities, at any rate—on civil defence?
Lord Elton: My Lords, it is scarcely the function of a Minister of Government to advise persons opposed to their policy how best to pursue that aim, but I can see a certain logic in what the noble Lord proposes.
Lord Mishcon: My Lords, is it not one of the great traditions of this country that, whether or not we agree with what demonstrators are demonstrating about, if they are doing it peacefully and lawfully it is one of the great rights that they have here—a right which is not enjoyed in other countries that we criticise? Therefore, is there not existent within our tradition the right for people who demonstrate peacefully to be protected by the police, if that be necessary, at public cost? And if they offend against the law, is not the right of prosecution there, and should it not be pursued?
Lord Elton: My Lords, the presence of the police on any such occasion is entirely impartial. Their duty is to protect the peace, and this they have done with considerable success.
Lord Boyd-Carpenter: My Lords, arising out of the question asked by the noble Lord, Lord Mishcon, is there not a distinction to be drawn between a peaceful expression by individuals of a point of view and a heavily organised demonstration, with people brought in coaches from all over the country? In the latter case, is there not a moral responsibility on the organisers to secure that local people do not have a financial burden imposed upon them as a result? If any offer has been made, will my noble friend make it clear that it would be perfectly acceptable in roubles?
Lord Elton: My Lords, I am not aware that any such offer has been made. I do not doubt that if it was made, those to whom it was made would consider very carefully whether it was to their benefit to accept it.
Lord Jenkins of Putney: My Lords, is it not the case that the Greenham Common demonstration has had two effects? First, it has demonstrated the effectiveness of women when they choose to act on their own in
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drawing public attention to certain matters without the aid of any help at all from our sex. Secondly, it has drawn attention to the peace issue to the extent that time has been spent on it in this House that otherwise would not have been spent.
Lord Elton: My Lords, I have always had the highest regard for the effectiveness of women, when acting on their own or in concert. On the question of using up the time of this House, however, the women have not acted alone but have had the notable support of the noble Lord himself.
Baroness Trumpington: My Lords, did the figures given by my noble friend include the cost of providing the necessary sanitary arrangements for the women demonstrators? If not, can he give the cost of providing those facilities?
Lord Elton: My Lords, I answered the Question in the terms in which I thought it was directed at me; that is, in terms of the police costs. There were of course incidental costs borne by the local authority. One of these has been the collection of litter. They do not have an obligation, I think they maintain, to collect refuse, which the people of the camp disposed of elsewhere in a manner which my noble friend's original Question leads me to suspect was not entirely effective.
Baroness Sharples: My Lords, is my noble friend Lord Elton aware that I was informed yesterday that the cost of Newbury has been put at £45,000 so far?
Lord Elton: My Lords, I am obliged to my noble friend for that information.
Viscount St. Davids: My Lords, can the noble Lord, Lord Elton, reply to this point? I have some experience of organising very large rallies for inland waterways purposes. There, we inevitably have a follow-up party which clears the refuse and the rubbish and leaves the entire place clean. Would it not be possible for the noble Lord's Ministry or for anybody else to persuade demonstrators that if they really want public goodwill, then they should do the same?
Lord Elton: My Lords, as I said earlier, anybody who seeks to secure public support should do so in a manner that does not offend the public to whom their request is made.

HM Schools' Inspectorate: Effectiveness
2.46 p.m.
Lord Gainford: 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 action they are taking to improve the effectiveness of Her Majesty's Schools' Inspectorate.
The Earl of Swinton: My Lords, the Secretaries of State for Education and Science and for Wales published a policy statement on the work of Her Majesty's Inspectorate on 24th March. Copies are available in the Library and one has been sent to my noble friend Lord Gainford.
Lord Gainford: My Lords, I thank my noble friend for that Answer; I have indeed received a copy of the report. Does my noble friend have any information as to the effectiveness of the inspectorate in connection with independent schools and also with schools which help handicapped or invalided children?
The Earl of Swinton: Yes, my Lords. Under the Education Act 1981 a local education authority in England or Wales is able to place a child who is the subject of a statement of special educational need at an independent school only if the school is approved by the Secretary of State as being suitable for such children or if he consents to an individual placement. Individual schools applying for approval have been required to meet similar standards in respect of premises, staff, education and care to those required in maintained specialist schools. Each school applying for approval will be visited by a team of HMIs before a decision is taken. The team will conduct a rigorous examination of all aspects of the school's functioning. In addition, independent schools for handicapped pupils have regularly been included in HMI's programmes of school inspections—and informal visits are often made to these schools.
Baroness Fisher of Rednal: My Lords, how does the Secretary of State make the effectiveness of Her Majesty's Inspectorate applicable in schools? I am reminded of the difficulty in Oxford at the present time, where a confidential letter was sent from HMI that textbook provision and staffing levels in primary and secondary schools there are inadequate, but where the chief education officer has failed to convince the elected members that there is a necessity to spend more money on these two items in order to avoid falling standards.
If Her Majesty's Inspectorate are to be effective, quite obviously their recommendations have to be put into operation and practice. What steps does the Secretary of State take to ensure that the inspectorate's reports are taken up and put into practice, when the inspectorate have made adverse reports?
The Earl of Swinton: The Government have introduced a more systematic follow-up arrangement for all reports published since the beginning of this year on schools or colleges providing full-time education for 16 to 18 year olds. Under these arrangements those reponsible for the institution—normally the local education authority, and this will obviously be the case in Oxford—are asked to report after three months on the actions taken in the light of the report. The follow-up arrangements will be extended to cover all reports shortly.
Lord Beloff: My Lords, does my noble friend the Minister not agree that the work of the inspectorate is likely to be hampered if they are asked to undertake other tasks? In particular, has the attention of my noble friend been drawn to the apparent insistence by the ILEA under its new leadership that the inspectorate should investigate political teaching in schools—a matter that has excited opposition from many heads of maintained schools?
The Earl of Swinton: My Lords, as I understand it, the great point about HMI is that they are independent; independent of the Secretary of State and independent of LEAs. Therefore, I do not believe that a local education authority can tell them what they have to do and what to inspect. Their reports are being published. I think they are a very splendid body of people, and thank goodness they are independent!
Lord Alexander of Potterhill: My Lords, does it create difficulty in a local education authority if Her Majesty's Inspectors say, "You must spend more money on books or other equipment", and the Secretary of State says, "You must not do so"?
The Earl of Swinton: My Lords, I think if that were the case the answer is that it almost certainly would.
Lord Hatch of Lusby: My Lords, before 1979 it was always the practice that one HMI specialised in the teaching of international affairs, which is a very important issue throughout the schools. I understand that in 1979—
Noble Lords: Question!
Lord Hatch of Lusby: My Lords, I understand that in 1979 this post was removed. Can the noble Earl tell the House whether this post has been replaced or if Her Majesty's Government have any intention of replacing it?
The Earl of Swinton: My Lords, I will have to write to the noble Lord with details about the post he describes. Her Majesty's Government have decided that the present complement of 430 inspectors in England is to be sustained, and that the number in post, currently 385, will be brought up to complement as a matter of urgency. The size of the inspectorate in Wales is being reviewed. But, as I said, on this particular post I will have to write to the noble Lord with the answer.

The Young Socialist's Conference: Northern Ireland
2.52 p.m.
Lord Monson: 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 action they intend taking in connection with the calls for the killing of British troops in Northern Ireland, which according to several press reports were made at the Young Socialist's conference at Bridlington on Easter Monday.
Lord Elton: My Lords, we are, of course, aware of reports that these disgraceful statements were made on that occasion. It is, however, for the police and not the Government to consider whether any criminal offence may have been committed, and, if so, what action to take.
Lord Monson: My Lords, I thank the noble Lord for his reply and for the robust sentiments he expressed. While one appreciates that there is little the Government can do directly, can the noble Lord say whether the attention of the Director of Public Prosecutions has been drawn to the rallying cry made by one delegate, which according to at least nine national newspapers contained the phrase, "Forward to the death of British troops"? Surely the right of free speech, which we all value so highly, cannot extend to blatant incitement to murder.
Lord Elton: My Lords, while I have considerable sympathy with the noble Lord, I should say, first of all, that the question of a reference to the Director of Public Prosecutions would be for the police, who would have to be aware of the circumstances to a greater degree than I am. Secondly, as the noble Lord rightly says, the right of free speech is very precious. I understand that this utterance was made on an occasion in a debate on something that was called, "Capitalist Imperialism and Terrorist Violence", and the remarks, I gather, received little support, if any, on that occasion. That perhaps suggests that we should not dignify this event with a great deal of opprobrium when it was in fact an extraordinarily foolish, unpleasant, distasteful and disloyal thing to do, but no more than that.
Lord Underhill: My Lords, would the noble Lord the Minister not agree that it is highly desirable that it be stressed that these particular observations are abhorred and repudiated as much by supporters and members of the Labour Party as by any other section of the community? May I say how much I appreciate the remarks of the Minister that the pro-IRA resolution was overwhelmingly rejected in a democratic way by the hundreds of delegates present, with only a handful supporting it? Is the noble Lord aware that a subsequent resolution was carried deploring and repudiating the actions of the IRA and other terrorist organisations as being of little use to the people of Northern Ireland?
Lord Elton: My Lords, I think terrorist methods are abhorred inside and outside this House by all right thinking people.
Lord Paget of Northampton: My Lords, surely the Foreign Office is an exception.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Elton will repeat a Statement on the Cable White Paper. This will be followed by my noble friend Lord Lyell who will repeat a Statement on Citizens' Advice Bureaux.
With the leave of the House, in the usual way I should like to say a word about the timing of the two Short Debates this afternoon. In accordance with the principle that the mover should be entitled to approximately 15 minutes and that the Minister should rise to reply no later than 20 minutes before the scheduled
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end of the debate, may I suggest that other speakers in the first debate—that in the name of the noble Lord, Lord Oram—should limit their speeches to a maximum of 11 minutes, and that other speakers in the second debate which is in the name of the noble Lord, Lord Hunter of Newington, should limit their speeches to a maximum of nine minutes. Perhaps I should point out that if any noble Lord should speak longer than the suggested maximum he will do so at the expense of other speakers taking part in the debate. May I also point out that the time limit for the first of the two debates will be extended by the time taken by the interruption for the two Statements. The new time limit will be announced from the Government Front Bench at the end of the speech following the interruption.

Diseases of Fish Bill
Brought from the Commons; read a first time, and to be printed.

Brandt Report: "Common Crisis"
2.56 p.m.
Lord Oram Lord Oram rose to call attention to the second report of the Brandt Commission, Common Crisis; and to move for Papers.
The noble Lord said: My Lords, this second report of the Brandt Commission, to which I wish to call your Lordships' attention, does not repeat the first report of three years ago, which, as your Lordships will recall, was a challenging and comprehensive review of the relationships between developed and developing countries. Instead the commission briefly recalls and endorses what it said three years ago, but then moves to the present situation and warns us of the impending crisis in the world economy. It summarises that warning, if I may quote, on page 12 of its report in these terms:
"This is already a crisis of contraction: contraction of production, of employment, of trade, of credit, of aid, of economic growth … If each country retreats inwards out of an impulse to self-preservation we shall end up hurting each other and worsening both our collective and individual condition … There is not much more time to take the policy measures necessary to avert a major world depression".
Having summarised the threat of depression and crisis, the report then puts forward an emergency programme calling urgently for interim action to ward off the economic and social collapse that threatens the world. This debate comes, I think, appropriately midway between the debate on international finance which was initiated by the noble Lord, Lord Soames, on 23rd March—and which carried much the same message from the noble Lord as the Brandt Commission conveys—and the debate which I am glad to see the noble Lord, Lord Seebohm, proposes to initiate on world hunger on 18th May. This debate is timely also because it follows a full-scale debate on the Brandt Report in another place just 10 days ago, so that we have had the advantage of reading the Government's attitude as expressed by the Foreign Secretary, and also, of course, the views of Mr. Edward Heath, who was a member of the Brandt Commission.
When the first Brandt Report was published, the Government issued this White Paper in response to it. I must say that this document was one of the most negative, depressing, cold and heartless documents that it has been my misfortune to read. Your Lordships may recall that that White Paper and the Government's attitude provoked a mass lobby of historic proportions. I say "historic proportions" because that lobby, led by churchmen and churchwomen from all over the country, brought to Parliament many more protesters against Government policy than I have ever seen in these buildings in my 35 years at Westminster in one capacity or another. That was the degree of interest and the degree of protest that was provoked on that occasion.
But there is a contrast this time. Perhaps it is the impending general election which has induced the Government this time to try not to alienate that section of public opinion, because on this occasion we read of welcoming phrases from the Foreign Office. In the other place we had a friendly speech from the Foreign Secretary, Mr. Pym. He promised us another White Paper and it will indeed be interesting to compare this new White Paper with the one of three years ago. If I may make a forecast, it is that the White Paper will be like Mr. Pym's speech—it will be bland, it will be complacent and it will be completely inadequate. The keynote of this document, called Common Crisis, is its sense of immediacy and urgency; but the Government's response is one of self-satisfaction and complacency.
I cannot of course in a few minutes take up the Government's attitude to all the 59 Brandt proposals. I therefore propose to deal with a number of them under five headings. The first is the question of economic expansion. The second is the need to increase the resources of the IMF and of the World Bank. The third is the volume of bilateral aid to developing countries; and the fourth of my headings concerns commodities and the fluctuations in their prices. Lastly, I should like to deal with the machinery of consultation and negotiation which is necessary if the Brandt proposals are to be properly implemented.
First, then, on the general economic policy. The Brandt Commission is openly expansionist in its economic philosophy. But the British Government, as we know only too well, still takes the opposite view, despite their protestations that they welcome Brandt. I believe that one day the Government will have to face the fact that if they genuinely embrace Brandt, the inevitable consequence of that attitude is a radical change in their economic policies. They cannot have it both ways.
Secondly, I refer to the international resources of the IMF and other institutions. What the Foreign Secretary complacently said 10 days ago was:
"In fact, much progress has already been achieved … The Government will certainly approach the subject with an open mind … On the whole, we think that the system has worked well and the judgments made have been broadly correct".—[Official Report, Commons, 18/4/83; cols. 34–35.]
He was followed by the Minister for Overseas Development, Mr. Raison, who also said that his mind was wide open on the question of IMF quotas.
But the Brandt Commission recommended a 100 per cent. increase in IMF quotas. Britain has gone along with a mere 50 per cent. increase. Therefore, I suggest that in this respect the British Government so far has been literally half-hearted or, as they say, open-minded. In a critical situation—and that is what we are in—we do not want Ministers with persistently open minds. We want Ministers who can make up their minds. To use a phrase that I think I have seen elsewhere, what we need in this situation is "the resolute approach".
My third heading is on the question of the volume of bilateral aid. We are forever being told that the Government are providing £1,000 million, and that sounds a great sum. But if one examines the record, as we have from time to time during Question Time, one finds that in real terms the Labour Government increased aid in every year, bar one, whereas the Conservative Government have so far decreased aid in every year, bar none. Only two days ago, in a Written Answer in another place, the Minister for Overseas Development had to admit that 1982 was still worse and that the figure was down to ·38 per cent. of GNP compared with ·44 per cent. in the previous year. So much for the comparative record on the provision of bilateral aid.
Fourthly, what about commodities? Depressed commodity prices are one of the third world's most serious problems. But on this crucial subject all that Mr. Pym could say by way of self-justification was that we have joined the Common Fund and that the Government hope that the EEC will join the Sugar Agreement. Surely we in the United Kingdom, with London as one of the most powerful world centres of commodity markets and with all our experience and authority in commodity trade, are in a position and are due to take initiatives and to take a lead in this matter. We should now be advocating schemes which improve upon and greatly extend the STABEX scheme under the Lomé Convention. I know that that scheme is open to some criticism but at least it compensates signatory members who suffer from depressed commodity prices. My point is that I see no signs of drive or leadership in this area, and I only wish that I could see them.
Fifthly and lastly, we come to what I have referred to as the negotiating mechanism for implementing the Brandt proposals. The first Brandt Report suggested a summit conference. As we know, that summit conference was staged at Cancun, and what a disaster it was! We had just two days of well-publicised discussion with set speeches. There was no real negotiation and no real results. There was, as I say, publicity, but no agreement for action. From the point of view of this country, unfortunately, our representative, the Prime Minister, was seen to be in a close partnership with President Reagan as the hard-line minority resisting even the modest action that was proposed at that conference.
The Brandt Commission this time, in this second report, seems to have recognised the weakness of its proposed summitry proposals which led nowhere. It now suggests—and I welcome the suggestion—that if another such conference is called there should be much more detailed preparation and that there should beforehand and at the conference be much more

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down-to-earth negotation. But, in my view, it is not the nature of the machinery which counts in the long run. It is the will for action: the determination to achieve results. It was that which was lacking at Cancun. Our Government must take a major part of the blame for that failure, because I suggest that from what I have already said it is clear that in these matters the Government obviously lack the will.
In conclusion, I remind your Lordships that the Brandt Commission comprised people of many and varied political views. There were Socialists like Herr Brandt of Germany, Mr. Amir Jamal of Tanzania and Mr. Olaf Palme, the Prime Minister of Sweden. On the Commission there were also Conservatives like our own Mr. Heath. But, despite their differences of political attitude, they reached agreed conclusions both in the first report and in this second report. I suggest that what the world desperately needs is that kind of agreement on world affairs between people of different political persuasions. What we need is a progressive approach to world problems. We need to be outward and forward-looking and not as we are at the moment, inward-looking, monetarist and narrow.
I am conscious, as I hope your Lordships are, that an opportunity will soon be presenting itself on the world stage for some world leader to give a lead. I refer to Williamsburg. At the Williamsburg summit it will be again the Prime Minister who will be representing the United Kingdom. I suggest that there at Williamsburg is for her a supreme opportunity to grasp this nettle of the common crisis. I would echo Mr. Heath's proposal that Britain should put on the table at Williamsburg this emergency programme proposed by the Brandt Commission. I could only wish that my country, the United Kingdom, were to be represented at that vital conference by a statesman big enough to meet that enormous challenge. My Lords, I beg to move for Papers.
3.14 p.m.
Lord Banks: My Lords, I should like to thank the noble Lord, Lord Oram, for raising this important matter this afternoon and for doing so in such a comprehensive manner. We on these Benches warmly welcome the second report of the Brandt Commission and give general support to its principal recommendations. We see that report as a warning cry which cannot be ignored and as an emergency programme which ought to be considered with urgency.
There are, broadly speaking, two schools of thought which tend to dominate discussion of North-South relations. One I would call the school of global Keynesianism, and it is that which has to a large extent inspired the two Brandt Reports. Supporters of that particular point of view—and we on these Benches would be among them—see the need for a transfer of resources from North to South. We see the need to increase liquidity in the world financial system, to increase Government aid to third world countries, to stabilise commodity prices, to make some reform of the international financial institutions and also in many cases to ease the conditions of loans to the third world.
Supporters of the other school of thought—for simplicity I would call that the monetarist
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school—consider that the transfer of resources and an increase in liquidity would simply cause inflation and ought to be avoided. They believe that world recovery will be spontaneous and does not require any governmental stimulus. They rely almost entirely on market forces. They think that low commodity prices are advantageous since they will help the developing countries to sell their exports. They do not want to make any alteration to the conditions which are made as far as loans to third world countries are concerned. The more extreme supporters of this point of view would think that governmental aid was of no use at all.
The monetarist school accuse the global Keynesians of pursuing Socialist and inflationary policies. What Socialism means today is difficult to define. It can mean anything from Communism to social reform. Of course there is a sense in which we are all Socialists now—as a Liberal Chancellor of the Exchequer said some 90 years ago. But if Socialism is taken to mean outright hostility to market forces, hostility to the mixed economy and a preference on every occassion for state action, then it is extraordinary that the leading exponent of Brandt policies in the United Kingdom, as the noble Lord, Lord Oram, made clear, is Mr. Edward Heath, a Member of the Commission, a former Conservative Prime Minister, and one who, as a Conservative Cabinet Minister, abolished retail price maintenance. The fact that he was able to distinguish the unacceptable face of capitalism from the acceptable did not make him a Socialist.
As to whether Brandt II, the report, Common Crisis, which we are discussing, is inflationary, Mr. Heath himself has argued with some force that when world reserves have fallen in a short period of time by 200 billion dollars, and those of the developing countries by 85 billion dollars, then the 50 billion dollar special drawing rights which are proposed by Brandt can scarcely be considered to be inflationary.
There are these two schools of thought. I have made it clear where we on these Benches stand in relation to them. But the question I want to ask is: where do the British Government stand in this clash of arguments? To some extent this question has already been raised in the comments of the noble Lord, Lord Oram. After the publication of the first Brandt Report and the reaction of the British Government at that time, I should have said that they stood firmly with the monetarists. After all, the Government have followed a deflationary policy at home. They have certainly resisted moves to reflate the European or world economies. The report, Common Crisis, emphasises the ill-effects on developing countries of deflationary policies, including high interest rates and states how these policies pursued in the developed countries have adversely affected the developing countries.
However, the Government's welcome for the second Brandt Report has been much warmer. As the noble Lord, Lord Oram, said, one Common Crisis recommendation is for an increase of 100 per cent. in IMF quotas. As the noble Lord made clear, the Government have not gone as far as that, but the Chancellor of the Exchequer presided over the meeting at which it was decided to increase the quotas by nearly 50 per cent., and that has led the Chancellor to be criticised by some for being a monetarist at home and a Keynesian abroad.

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Another Brandt recommendation is that there should be a major new allocation of special drawing rights, distributed on a basis which takes into account the particular needs of developing countries in deficit. The Foreign Secretary has indicated that the Government have an open mind on that. From our point of view on these Benches, it would have been better had he made up his mind on it and in favour of it; but at any rate he has an open mind and is agreeable that these matters should be discussed in the autumn. However, the delay is alarming. Surely it is possible to bring forward the discussions and consider the matter now as one of urgency.
The Common Crisis speaks of the need for temporary arrangements to overcome funding problems for the sixth replenishment of the International Development Association—the soft loan arm of the World Bank—and the need also to proceed to consider the seventh replenishment. As Mr. Pym has made clear, the Government have urged the United States to complete its contribution to the sixth replenishment.
The report Common Crisis calls for the ratification of the Common Fund for Commodities. The Government have ratified, and have urged others to do so. But what a lengthy, drawn-out process is the establishment of the Common Fund! The Common Crisis calls for Government aid to be raised to 0·7 per cent. of gross national product in five years. The Government accept the target, but not the timetable. They have no commitment as to when they will achieve it, or hope to achieve it.Common Crisis urges a relaxation of the conditions of loans to the third world, but if what we read in the papers this morning is correct, the Government are clearly opposed to that and still believe that policies of considerable austerity must be imposed on borrowers.
So looking overall at the Government's record, it is clear that they are not opposing the Brandt II Report root and branch. They are agreeing to some of the proposals. There is at least a partial acceptance of Brandt. The Government are betwixt and between. But my fears are two-fold, and to a considerable extent they correspond with fears expressed by the noble Lord, Lord Oram. My first fear is that the reaction of the Government, and indeed of the Governments of the countries of the North (if I may call them that) will be a case of too little, too late. The 50 per cent., instead of 100 per cent., increase in IMF quotas, the delay over dealing with an increase in special drawing rights, and the rigidity over conditionality, suggest that what I fear may well be the case.
My second fear is that which was expressed by the noble Lord, Lord Oram: that there will not be the political will to get things done. There will be an acceptance, in part, of the second Brandt Report, but there will not be sufficient enthusiasm for it in order to take a crusading position at Williamsburg, or in UNCTAD VI, when it is held in June.
Common Crisis says that there are far greater dangers today than there were three years ago. I wonder whether the Government would agree that although some indications of a slight recovery in some Western countries are encouraging, nevertheless the problems that we are discussing today remain a serious threat. Do the Government agree that there is a crisis
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of the magnitude described in Common Crisis? If so, does their response, and that of the North generally, match up to the challenge and to the emergency? That, I believe, is the central issue that is before the House today.
3.25 p.m.
The Lord Bishop of Hereford: My Lords, the Churches are grateful to the noble Lord, Lord Oram, for this debate because it will underline the crisis which exists and to which the publication Common Crisis draws attention. Some of your Lordships may remember that on 15th January a front page headline in The Times read:
"Parliament urged to act on jungle of commodities market".
That referred not to a quotation from the Brandt Commission's memorandum, but to a statement made by a judge at the Central Criminal Court when acquitting a man of fraud. The judge said that there was no Government body or code of ethics to protect clients; nor was there any restriction on premiums charged to clients. He continued:
"The trouble is that the world of commodity dealing is a jungle. It seems to me to be a most perilous state of affairs, which merits attention by Parliament. Whether legislation is required, it is not for me to say, but I hope my words may reach beyond the walls of this court".
The first point that the Churches would wish to make in today's debate is that there should be such a code of ethics to establish control of the London markets in commodities. This is one of the major pleas of the Brandt Commission, and it appears on page 105 of its second publication, where it is stated:
"Solutions have to be found urgently to the severe problems caused by the continuing slump in primary prices if the deprivation and hardship already experienced by poor countries is not to be exacerbated further.".
On the previous page we are told that the price of raw sugar fell by 78 per cent. in a two-year period ending in June last year; rubber fell by 37 per cent., and copper by 35 per cent.
On Easter Day consideration was given in the "Food Programme" on Radio 4 to the production, marketing and selling of cocoa for Easter eggs. Dealers from 30 countries operate in the London cocoa markets. Ghana, Nigeria, and the Ivory Coast have a combined international debt of over 20 billion dollars. These countries depend substantially upon their export earnings from cocoa for their balance of payments. Yet as the judge to whom I have already referred pointed out in the Central Criminal Court in London,
"Small investors had been charged enormous hidden premiums on their investments in cocoa and other commodities.".
He said further that:
"there is no code to sell at the best price, to reveal commissions charged, or to reveal true market prices".
The same is true of the coffee market. In his book, Human Rights Begin with Breakfast, John Madeley, the journalist, describes how one speculator on the coffee market is thought to have made a profit of £18 million. The people who produce the coffee to make possible such speculation are lucky if they earn £200 a year. John Madeley concludes:
"An improvement in the way that commodities are traded in international markets could probably do more to promote economic rights in developing countries than any other single measure".

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The Churches would urge, as a first step, the setting up of just such a code of conduct for the London commodity markets.
The director of Christian Aid has estimated that in the last five years, 500 billion dollars has actually been transferred from the countries producing primary products—which include Canada—to the developed industrial countries, through the deterioration in the terms of trade. No wonder there is acute and growing poverty in all parts of the world. It is trade and reform of its structures, not aid, that remains the primary focus of the concern of the Brandt Commission and of its second publication.
But, of course, the theme of the Brandt Commission's message is that the world is facing a financial crisis, and to alleviate that immediate crisis, aid is vital. The visit of the President of the World Bank to see the Prime Minister in London this month drew attention to the crisis facing the funds of International Development Assistance—IDA as it is commonly known—which is the arm of the World Bank that provides long-term loans at concessional rates of interest to the poorest countries. In its publication we read that,
"IDA projects have a weighted average rate of return of 21 per cent., excellent by any standards".
Yet our partner across the Atlantic is failing to meet its commitment to the existing replenishment of its funds and the prospects for the seventh replenishment next summer are somewhat grim.
In addition to the plea that there should be a code of ethics to establish control of the London markets in commodities, the Churches would want to make three observations. First, as Common Crisis points out, concessional funding from multilateral aid agencies like IDA is essential for programme aid to rural agricultural development schemes. Malawi, Kenya and Zambia have drawn up national food strategies. It is crucial that they have access to funds to finance them if the face of famine is not to threaten the whole of sub-Saharan Africa.
Secondly, as the Berg Report on that region made clear last summer, development is chiefly related to the exploding rates of population growth. In sub-Saharan Africa, six children are at present being born to every fertile woman. As a result of this population growth and other factors, every person now living in the region is eating at least 10 per cent. less food than was available to them in 1970. Aid is crucial if the population explosion is to be restrained by the end of this century.
Thirdly, aid, and particularly low interest, long-term, official multilateral aid, is related to the problem of debt. According to page 45 of the commission's report, total foreign indebtedness of developing countries reached 630 billion dollars in 1981 which stretches the resources of the whole credit system. Surely, this astronomical figure must be related to the 500 billion dollars mentioned earlier as an estimate of wealth transferred through deteriorating terms of trade to the industrialised economies and to the 650 billion dollars that is spent by the world annually on the arms trade.
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Here, clearly, there are symptoms of enormous strain in the financial system and of great insecurity felt by nations intent on arming themselves beyond their means. Both conclusions suggest that the Brandt Commission, in Programme for Survival and Common Crisis, is right in identifying a critical point having been reached in the world situation. It calls rightly for new start to be made in the North-South dialogue.
The Churches would therefore call upon Her Majesty's Government at the Williamsburg Summit in May and at the United Nations Conference on Trade and Development in Belgrade in June to go determined to negotiate a new start. We have the important initiative of the Commonwealth Secretariat in producing its report The North-South Dialogue: Making it Work that will guide us. We have the important Plan of Action to Combat World Hunger, proposed by the European Community and supported by Canada, to direct us. Above all, I believe that we have a growing political will in this country, fostered by the Churches and other non-governmental organisations to which the Brandt Report pays tribute, that will back us.
I end with a quotation from page 10 of the report where it states:
"A new century nears, and with it the prospect of a new civilisation. Could we not begin to lay the basis for that new community with reasonable relations among all peoples and nations, and to build a world in which sharing, justice, freedom and peace might prevail?"

Cable Systems and Services: White Paper
3.35 p.m.
Lord Elton: My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, Mr. Speaker, I will now make a Statement on the Government's White Paper on the Development of Cable Systems and Services, which is published today, in the name of myself and my right honourable friend the Secretary of State for Industry. Copies are available in the Vote Office.
"The White Paper, as the subject requires, is a long and complex document—nearly 250 paragraphs. The House will need time to study it and form its views on it. Subject to arrangements to be made by my right honourable friend the Leader of the House, there will be an early opportunity for a full debate.
"Meanwhile, I hope it will assist the House if, in this Statement, I draw attention to the main cable issues to do with the regulation of programme services and the safeguarding of public service broadcasting, which were still unresolved when we debated the Hunt Report on 2nd December last.
"The White Paper sets out a plan of action for future cable development. Central to this plan is the creation of a new statutory cable authority. Work is now starting on the preparation of a Bill to be introduced at the earliest practicable date. The cable authority will have two main roles: to award franchises to cable operators for the provision of

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cable services, and to exercise supervision over those services in the manner which the White Paper describes in detail. I wish to stress five particular aspects.
"First, pay-per-view. The Government have decided not to follow the Hunt Report in excluding this method of financing cable services. Cable operators have made it clear that they attach much importance to it and we believe that over a wide field pay-per-view can be allowed without damage to BBC and ITV services and the many viewers who rely and will continue to rely on them. To protect the interests of those viewers, the cable authority will have the duty to exclude from pay-per-view events customarily covered by BBC or ITV.
"Secondly, that restriction is in addition to the ban which, adopting the Hunt recommendation, we propose on the acquisition by cable of exclusive rights for the great national sporting events, such as the Cup Final.
"Thirdly, advertising. We follow the Hunt Report in proposing that the cable authority should adopt an advertising code which in essential particulars would follow the existing IBA code. Arrangements for clearing the copy of advertisements would follow broadly the pattern for those on independent broadcasting. On the amount of advertising, we depart from Hunt in preferring to limit advertising on cable, on channels broadly comparable to ITV, to the amount allowed on ITV—currently six minutes an hour on average. Channels wholly or mainly devoted to classified or other advertising will however be allowed, and these limits will of course not apply then.
"Fourthly, foreign programme material. Here we intend that there should be from the outset more stringent obligations than Hunt proposed on the use of British programme material. The Cable authority will be required to see that a 'proper proportion' is shown on each channel as appropriate; to work towards a progressive increase in that proportion as United Kingdom production capacity grows; and to report progress regularly to the Government. We are anxious to maintain and develop the strong national production capacity which the BBC and ITV have helped to create.
"Fifthly, the Government are anxious that the cable authority should ensure high standards of cable programme services. The same rules regarding good taste and decency as apply to BBC and IBA programmes will apply to all cable channels.
"There will be no exception for channels with electronic locks. As the White Paper says, so-called adult channels have no place on the sort of cable systems which the Government wish to see develop.
"Finally, in the period before the legislation is enacted we are anxious to maintain and continue the momentum for cable development, through interim arrangements, of two kinds. First, the Government will be prepared, under existing powers, to authorise a limited number of new cable systems—not more than 12—as pilot projects, each covering a maximum of about 100,000 homes. Projects will be chosen for offering a positive contribution to advanced technology, a comprehensive
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range of programme services and a capability of interactive services. Secondly, we propose to allow cable relay operators to offer new programme services over their existing systems for a transitional period. Where necessary the obligation to relay BBC and ITV services on the cable will be dropped, provided operators offer their customers alternative means of reception at no extra cost. No application under either of these interim arrangements will be entertained until Parliament has debated and approved the White Paper.
"Mr. Speaker, the Government believe that the White Paper offers an acceptable and well-balanced set of proposals. They will give cable an excellent opportunity for development, with the stimulus that this will provide for advanced technology. At the same time they will protect public broadcasting services and those who rely on them. I commend them to the House".
My Lords, that concludes the Statement.
Lord Ponsonby of Shulbrede: My Lords, I thank the noble Lord for repeating the Statement on the White Paper. I am sure that your Lordships would also wish, as in another place, to have an early and full debate on the contents of the White Paper. Cable television is potentially of great benefit to the nation, but it would seem that the Government's proposals and their rush for implementation before an Act is on the statute book meet more the needs of private profit and less the longer term needs of the nation as a whole.
I should like to comment on some of the areas specifically mentioned in the Statement. First, pay-per-view. Will not one of the effects of pay-per-view be that the most popular programmes and the most recent films, as opposed to national events, will be bought for pay-per-view, creating a situation of even greater advantage for those living in the more populated and richer areas?
We would welcome the limits proposed to be placed on the amount of advertising. The Statement refers to the cable authority adopting an advertising code
'
"which in essential particulars would follow the existing IBA code".
I wonder if the noble Lord could indicate whether these "essential particulars" will follow the type and quality of advertising control imposed by the IBA on ITV at present?
We would welcome the remarks made concerning the amount of foreign material to be included. The Statement refers to the fact that:
"The cable authority will be required to see that a 'proper proportion' is shown on each channel as appropriate".
What does that mean? We would be concerned that "a proper proportion" would mean that at least as much British produced material is shown on cable as the IBA would insist on being shown on the independent television channels.
We welcome the rejection of the Hunt proposal of a specific adult programme with electronic locks. When your Lordships debated the Hunt Report the idea of the electronic lock was exposed as being the fallacy that it is. Finally, we wonder what is the rush to proceed with an experiment before any Act is on the statute book at all. We are very concerned that the

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results of these proposals might be an ever-increasing divide between two nations.
Lord Winstanley: My Lords, on behalf of my noble friends on these Benches I should like to join with the noble Lord, Lord Ponsonby, in thanking the noble Lord, Lord Elton, for repeating this important and, so far as it goes, reassuring Statement. As the noble Lord, Lord Elton, has said, the House will need time to study the White Paper. Having glanced at it I think the noble Lord can say that again! It is a very complicated document, and thus the noble Lord may care to note that, like the noble Lord, Lord Ponsonby, we on these Benches greatly welcome the assurance that there will be an early opportunity for a full debate on these important matters.
As regards the detailed content of the Statement, I would merely raise three brief points for the noble Lord's consideration. First, will the noble Lord note that we on these Benches particularly welcome the assurance about a restriction on the use of foreign programme material, and also the requirement for the use of a reasonable proportion of British programme material? We regard that as particularly important, and would like the noble Lord to note that we welcome it. Perhaps the noble Lord would also note that, on balance, we think that the Government are probably right in not turning their back on pay-per-view, particularly when we bear in mind the present plight of Channel 4 and of TV—AM, which appears to indicate that supplies of funds from advertising as support for broadcasting are not inexhaustible.
Finally, can the noble Lord tell us whether there is any significance in the fact that there is little reference, if any, in the Statement—I do not yet know about the White Paper—to the interactive services which may be carried by cable, such as the paying of bills, reading meters and things of that kind? Does the noble Lord the Minister not agree that perhaps some of those services are more important than the purely entertainment aspects of cable? Therefore, I ask the noble Lord, Lord Elton, if he would tell us whether there is any special significance to be attached to the fact that all reference to interactive services has been omitted from the Statement.
Lord Elton: My Lords, I am grateful to both the noble Lord, Lord Ponsonby, and the noble Lord, Lord Winstanley, for their reception of the Statement. Both noble Lords are anxious that there should be a debate. I understand that it is likely to be on 23rd May. The noble Lord, Lord Ponsonby, suggested that the principal motivation of the White Paper is to generate private profit. To that suggestion I can only say that private profit will only be generated by public interest and support. The public only pays for what it wants, and if there is private profit that will be a vindication of the policy which we are pursuing.
The question of pay-per-view is an important one. I am glad that the noble Lord, Lord Winstanley, supports the Government in their decision to pursue it, and that the noble Lord, Lord Ponsonby, regards this as preferential for what he terms the more populated and richer areas (which does not apply to the inner cities, which are the most populated areas in many
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cases). I do not wish to pursue that at this stage. This is not the occasion for a debate; that occasion will come on the later date which I gave your Lordships.
The question of the proper proportion of British-generated material is obviously one which must be dealt with flexibly because it will depend upon the capacity of the British producing agencies to generate enough material of a sufficient standard for the service which we propose. That is why, in the sentence following that to which the noble Lord, Lord Ponsonby, directed your Lordships' attention, we say that they will be directed also,
"to work towards a progressive increase in that proportion as United Kingdom production capacity grows".
Finally, I should like to draw the attention of the noble Lord, Lord Winstanley, to the record of what I said. He will find that I in fact referred to the interactive services, albeit in the context of the interim arrangements. I said that projects will be chosen, among other things, for their ability to provide interactive services, which we regard as important. It is because of the pace of technological change that we believe we must maintain the impetus. I can tell the noble Lord, Lord Ponsonby, that that is why we wish to proceed after debate but before legislation—to catch the wind in our sails while it still blows.
Lord Aylestone: My Lords, in thanking the noble Lord for repeating this Statement, I should like to ask him three brief questions. First, who will be responsible for setting up the new cable authority? Will it be the Home Secretary or, perhaps rather more correctly, the Secretary of State for Industry? My second question is on programme content. The Minister may recall that in our debate in November he agreed with me that there was some doubt as to whether the Obscene Publications Act 1959 and the Indecent Displays Act 1981 would apply to cable television. I have not cleared my mind. Has he? If he is still in doubt, will this be included in a new, proposed Bill?
My third and final question is this. Will the noble Lord confirm that the new cable authority will not be allowed freely—and I mean without payment—to take programmes off the air from the BBC and ITV?
Lord Elton: My Lords, as I said, I do not want to get drawn too much into the detail of this Statement when a debate is to follow. The appointments will be made by the Home Secretary. As to the question of obscene publications, I would rather not commit myself to a statement which, on consulting the lawyers, I might regret. But the noble Lord was sufficiently industrious in his pursuit of me on the last occasion to make me sure that he will not allow me to get away with such an answer when it comes to the debate.
The Lord Bishop of Rochester: My Lords, we on these Benches should like to thank the noble Lord, Lord Elton, for repeating the Statement. We are grateful that among the five points that he picked out was the question of the maintenance of standards. We shall look forward to hearing the ways in which these are to be maintained and the way in which the new authority is to be appointed and is to work, and to hearing about its relationships with the corporation

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and the independent authority, which are already in existence. By and large, we believe that the nation has been well served by those bodies, and we hope that the newer body will be of the same quality and have the same authority throughout the country.
Lord Elton: My Lords, I am grateful to the right reverend Prelate for his reception of this Statement. We will look forward to useful and constructive contributions from the Bench of Bishops during the debate.
Lord Molloy: My Lords, it would appear that what the noble Lord has enunciated this afternoon will require an Act of Parliament. It also appears that, in anticipation of that Act of Parliament, the Government will proceed on certain lines. This seems to me to be a remarkable course. What the noble Lord has enunciated seems to be a reasonable proposition. But would he not agree that, if we can have the debate first and if Parliament can examine these matters, the great advantage is that that occasion also provides an opportunity for ordinary people and a variety of associations to submit their observations and to write to Members of the other House and to Members of this House, which then helps us all to contribute to what might be proposed? Would he not agree that such a proposal might be submitted to his right honourable friend for consideration?
Lord Elton: My Lords, the device of having interim arrangements in advance of legislation was recommended in the Hunt Report. As the noble Lord suggests, the House will have an opportunity to debate the matter before the interim arrangements are brought into effect. This will provide an opportunity for what the noble Lord refers to as ordinary people to bring matters to our attention. My own view is that both Houses of Parliament are full of ordinary people.
Lord Glenkinglas: My Lords—
Lord Denham: My Lords, if my noble friend will give way, the noble Lord, Lord Annan, has been trying to speak for some time. May I suggest that we hear the noble Lord, Lord Annan, first and then my noble friend Lord Glenkinglas.
Lord Annan: My Lords, is the Minister aware that some people will welcome his statement that experiments are to take place, because it is very likely that these experiments will make for better legislation when the time actually comes to pass a Bill through Parliament? However, I should like to ask the noble Lord two questions. Do I infer from this Statement that it is now possible for any system of transmitting cable television to be used—for instance, tree and branch as well as star, and any other system? Secondly, is there anything in the White Paper which will specifically hold out hope to British industry, which is interested in the laying of either co-axial cable or fibreglass cable, that such firms will receive some preferential treatment in being allowed to develop these systems?
Lord Elton: My Lords, I am grateful for the support of the noble Lord, Lord Annan, for the idea of having experiments in advance. On the question of the
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technology, which I rather hoped the noble Lord would not lead me into, I can say that all underground ducts will have to be laid in a star configuration, but tree and branch, or switched topologies, will be allowed. This obviously means more to some people than to others!
Lord Glenkinglas: My Lords, will my noble friend accept that I think his ideas on cable television are very good? Will he also accept that before the debate takes place someone on the Government Benches should be prepared to explain why it is that all these new channels, such as Channel 4, are splendid for people who live in towns but are absolutely useless to a comparatively small number of the population, who have great difficulty in getting television at all?
Lord Elton: My Lords, this is a subject to which doubtless my noble friend will return in the course of the debate.
Lord Ardwick: My Lords, can the noble Lord tell us whether the Government have any idea about the time-span involved? How long is likely to elapse before cable becomes a substantial competitor of the BBC and ITV?
Lord Elton: My Lords, indeed, that would be looking into the crystal ball. I cannot tell your Lordships the extent to which or the rate at which what is experimental will become successful. What I can tell your Lordships is that the Government believe that this is an important area, not only for entertainment, which we believe is the necessary infrastructure to provide the paths through which information can pass, but also for a later generation of technological developments, such as that to which the noble Lord, Lord Winstanley, was alluding when he spoke about interactive services, which, to use an Americanism in what we hope will be predominantly a British enterprise, is a whole new ball game.

Brandt Report: "Common Crisis"
Debate resumed.
3.58 p.m.
Viscount Hanworth: My Lords, whether we look at it from a Christian or other ethical point of view, we cannot ignore the plight of the third world. Millions are dying of starvation or are so undernourished that the children suffer permanent disability. The WHO statistics should really bring us up short: some 18 million with leprosy, 12 million or more with preventable blindness, and untold millions with debilitating diseases which make life hardly worth living.
We respond to all this by doling out some very limited aid and with a response to emotional appeals from organisations such as the Save the Children Fund. It is a bit like our grandfathers, where a 10 per cent. contribution to charity from a person's income justified exploiting labour to any possible extent. The capitalist system and free enterprise justified this and,

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of course, the plight of the workers was said to be their own fault. I think that the last point is a very relevant argument for developing countries today. If only they would control their birth rate and produce stable and enlightened Governments, how much more help could we easily give! But human nature is very imperfect both here and elsewhere and we cannot fall back, as our ancestors did, on the comforting idea of colour prejudice. The two Brandt Reports have highlighted the problems and suggested what might be done. They have also made the point that even if the self-interest of the West is the only criterion we cannot carry on as we are doing indefinitely.
At the moment most developing countries can hardly, if at all, service their debts, and rescheduling such debts is only a palliative. The day of reckoning must come unless there is a quite enormous improvement in the world economy. As Roy Jenkins said recently:
"If an immediate and imaginative worldwide initiative is not taken, present conditions may, in a year or two's time, make today's ills seem almost benevolent."
The world is now interdependent and it could well be that what is at stake is not only the fate of the developing countries, but the whole of Western democracy and of capitalism as we know it. Most of us believe that in a very imperfect world the capitalist system, with all its warts, is the best that we can achieve overall, but it is working badly, and as Brandt makes clear some fundamental changes are now needed.
We have only to look at Western unemployment to realise how the economic system has become our master, not our slave. It is a truism that "the more people who work usefully and efficiently for the longest possible time, the richer a nation should be". Yet, at a time when even the West cannot afford to do what they would wish to alleviate the relative poverty of some of their people or provide many other things, such as improved hospitals and prisons, the system is creating higher and higher unemployment.
I am afraid that the economists, who almost always disagree, are primarily concerned with trying to make the present system work, rather than with how it might be improved on a world-wide basis. What we need even more than expertise is a sense of practical idealism which would mean that Britain and other nations would be prepared to make sacrifices to achieve a better world. Most people have a latent sense of such idealism if given leadership in that direction. Most certainly Brandt has shown the way.
I am not an economist and I cannot therefore comment on the recommendations in the report, certainly not without a great deal of research, by which I mean talking to many people whose views would be important. Nevertheless, I have a "gut feeling" that at least some of the recommendations are those of a committee and bear that hallmark. Increased lending by IMF or other bodies may be necessary, but I think is not, per se, a solution.
The report talks about fundamental changes. I have the feeling that this may be little more than an extension of the present system and not really all that fundamental. Do we not perhaps almost want to think in terms of barter for the developing nations' raw
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materials, currency being the uncertain thing it has now become? Could the wheat, butter and other food surpluses perhaps not best be treated on this basis?
What else, my Lords? There are too many international committees and organisations, and I unkindly say that the merit of some of their staff is judged solely by the amount of somewhat irrelevant paper which they produce. Could we not cut through some of this, and try to do what Brandt has done or proposes? Most certainly the Government's comments on the first Brandt Report epitomised the very worst that our Civil Service and democratic system could reasonably produce. That is in fact what the noble Lord, Lord Oram, said in rather different words. Although this speech represents my own views, my party is particularly concerned with the issues raised by Brandt and is determined to make some of his proposals a reality.
Before finishing I should like to raise one specific issue, which is that of the aged. Here the state does what it feels it can, but in the developing world the aged must rely on the family groups, which are increasingly breaking down as the younger generations leave the country for the towns. We might remember as well that if we are as concerned with the rapid increase in population, at least one reason for this is that if you are in a country where there is no security for age, the more children you can have the better chance there is of at least one of them being able to look after you later.
Brandt has highlighted this problem and proposed some solutions, and the United Nations World Assembly on Ageing has done the same. I finish by an appeal that we must really try and look into the future not only because it would pay us to do so, but with some idea of real idealism, which I feel is lacking.

Citizens' Advice Bureaux
4.7 p.m.
Lord Lyell: My Lords, with permission, I should like to repeat a Statement which is being made in another place on the review of the National Association of Citizens' Advice Bureaux. The Statement is as follows:
"I said to the House in the adjournment debate last week that I would make an announcement to the House on the details of the review as soon as I could. I am glad to say that I can now announce the chairman and terms of reference of the review which the Association and I have agreed is urgently needed.
"The terms of reference will be:
'To review the functioning of the National Association of Citizens' Advice Bureaux and to make recommendations, with a view to ensuring that the Association gives the best possible service and support to local Citizens' Advice Bureaux and that the monies available to the Association are spent in the most effective way'.
"The review will be chaired by Sir Douglas Lovelock KCB. A firm of management consultants will be appointed to assist in its work. A senior partner of the firm chosen will also be a member of the review team. It is proposed that a third member

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should be appointed and it is hoped to announce a name shortly. The terms of reference and the membership I have announced have been agreed with the National Association.
"My honourable friend has asked the chairman to report to him in the next six months. The review team will of course work closely with the National Association; and the report will be made available to them once he has received it. It is proposed that the report should be published.
"The management consultants assisting the review team will examine the staffing and management structure of the National Association and will be asked to complete their work within the next three months. In accordance with normal procedures we shall be seeking tenders at once for this job on the basis of a short list to be discussed with Sir Douglas Lovelock and the National Association.
"I am very glad to say that complete agreement has been reached with the National Association that the review should be carried forward on this basis and I am sure this will be welcomed by the whole House. In the light of this, and the helpful discussions my honourable friend has had with the National Association's officers, I can confirm that Government funding for NACAB for the whole of the current financial year will be maintained on the normal basis."
My Lords, that concludes the Statement.
Lord Ponsonby of Shulbrede: My Lords, I welcome the Statement made by the noble Lord, and particularly the last sentence of that Statement confirming the funding for any CAB for the current year. However, the Statement does not do anything to withdraw the allegations made about inappropriate political activity by the Citizens' Advice Bureaux, and I wonder whether the Government are now prepared to withdraw these allegations.
I should be less than honest if I did not express our concern about the inept handling of the whole question of the CAB grant by the Government. This, my Lords, could have a considerable effect on local authority support for local Citizens' Advice Bureaux. As the noble Lord will know, some local authorities are much more supportive of the work of local Citizens' Advice Bureaux than others, and I hope that in these circumstances the Government will think it wise to bring to the attention of local authorities the value of the work of the Citizens' Advice Bureaux and the need for local authorities to give them as much support as they can.
Lord Winstanley: My Lords, on behalf of my noble friends on these Benches I should like to join with the noble Lord, Lord Ponsonby, in thanking the noble Lord for repeating this Statement. May I ask the noble Lord whether he has noted that I have on the Order Paper an Unstarred Question on this subject? I wonder whether this Statement would pre-empt that particular Question. Perhaps the noble Lord would care to note that, having heard the Statement, I take the view that it does not pre-empt that Unstarred Question and that I would still wish to pursue that.
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The Statement deals in the main, as the noble Lord has made clear, with the proposed review of the working of the Citizens' Advice Bureaux. I hope the noble Lord will note that we greatly welcome that review, since we are entirely convinced that the review will demonstrate what we already know—namely, that the NACAB is a highly efficient and cost-effective organisation. Perhaps the noble Lord will also note that we are very delighted to learn that the terms of the review are agreed entirely with the association. I am delighted that there is now an end to the uncertainty about the funding of the NACAB, but there is nothing in the Statement that explains for a moment why that uncertainty was caused at all. That is a matter that we will want to pursue on another occasion rather than weary the House with it now.
May I finally ask the noble Lord to use his good offices and his influence to ensure that local government, which funds Citizens' Advice Bureaux locally, does not now follow the melancholy example set by central Government and start dishing out its grant in small six-monthly packages?
Lord Lyell: My Lords, we are very grateful for the interest which has been taken in this Statement, and, indeed, in this subject, by the noble Lord, Lord Ponsonby, and the noble Lord, Lord Winstanley. As far as the noble Lord, Lord Ponsonby, is concerned, the noble Lord raised the allegation of political campaigning and mentioned political activities in connection with the National Association. My Lords, my honourable friend made the position quite clear in the adjournment debate in another place on Friday and he welcomed the National Association's reaffirmation of the political impartiality of the Citizens' Advice Bureaux service. The assurance I have received is that any breach of this principle will be thoroughly investigated.
So far as the handling of this particular matter is concerned and the ineptitude of it or otherwise, I believe that, certainly in your Lordships' House, we have handled this matter with the utmost dignity and, I hope, clarity. I would reiterate my honourable friend's views on the tremendous value of the Citizens' Advice Bureaux and indeed the help that they have obtained from the local authority. So far as the comments of the noble Lord, Lord Winstanley, are concerned, I note his view that the Statement I have made this afternoon does not necessarily pre-empt his Unstarred Question, and we shall look forward to anything he has to raise on a future date. We are very happy that the terms of reference of the review give him some satisfaction.
As regards the uncertainty over the financing of the National Association, or the financing of the bureaux by local authorities, certainly I believe there was no uncertainty in your Lordships' House. There may have been speculation outside your Lordships' House, but certainly the position here was absolutely clear. I am very flattered that the noble Lord believes that my good offices will help in any further inquiries into this particular matter.
Lord Ponsonby of Shulbrede: Before the noble Lord, Lord Lyell, sits down, I hope he will appreciate that I was referring to the inept handling of the situation by the Government and not by him.
Baroness Burton of Coventry: My Lords, we on these Benches, too, welcome the Statement made by the Minister and particularly, of course, the fact that Government funding for NACAB for the whole of the current financial year will be maintained on the normal basis. It is quite vital that we know that and, of course, there should have been no necessity for such a Statement to be made. The noble Lord, Lord Winstanley, has stated that he intends to leave his Unstarred Question on the Order Paper for debate next week. That will give us an opportunity of discussing many points for which we have not the time now, and which certainly should be made. We should welcome an opportunity to discuss this unhappy affair in more detail on that date next week.
As the terms of reference and the membership have been agreed with the National Association of Citizens' Advice Bureaux, may I express the hope that the third member of the review body will be somebody active in the voluntary advice services field? We think that that is important. I myself was not altogether happy that a team of management consultants was to do this job; although I think that does emphasise what many of us feel—namely, that the query on this whole affair might be that of financial management and not the other matters to which reference has been made. However, I would press the Minister to try to ensure that the third member of the committee is somebody from the voluntary services movement. We on these Benches very much regret that this whole episode arose as it did, and we should like to say, in conclusion, that we have much admiration for the work and the efficiency of the Citizens' Advice Bureaux and regret that this trouble has descended upon them.
Lord Lyell: My Lords, we are very grateful for the forthright, clear and succinct comments of the noble Baroness. As far as the third member of this review body is concerned, I am sorry to say that we can only wait and see. But assure the noble Baroness and your Lordships that the appointment of a third person is being pursued with extreme urgency. The noble Baroness will have noted in the terms of reference that the review of the functioning of the National Association will be one of the objectives, with a view to making recommendations and, above all, to seeing that the monies available to the association are spent in the most effective way. I am sure that the noble Baroness and your Lordships would agree that a firm of management consultants in this particular field would be able to give clear and succinct advice of the type which was given by the noble Baroness to my honourable friend.
Lord McGregor of Durris: My Lords, as President of the National Association of Consumers' Advice Bureaux, I must declare an interest before reaffirming the complete agreement between the noble Lord's right honourable friend and the association as to the basis on which the independent review should be carried forward. Is the noble Lord aware of the satisfaction which will be felt among the many full-time and voluntary workers in the service throughout the country at the return of our funding to the normal basis throughout the current financial year? Is the noble Lord aware that the CAB's pleasure at the setting up of the independent review arises in part from
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the fact that we have been pressing for a review for many months, not only because we feel sure that it will show a need for additional funding but because it will the better enable the bureaux to give the best service to which the Statement refers? Has the noble Lord noted the heartening support for the bureaux from all shades of political opinion, from local government and from citizens who use the service? In particular, the National Association welcomes the reiterated support for the service from the Minister for Consumer Affairs, a support to which the noble Lord referred in one of his replies to questions.
Lord Lyell: My Lords, we are grateful for the authoritative voice of the noble Lord, Lord McGregor. I wonder whether he made the same error as I did on the last Statement. Did he mention the National Association of Consumers' Advice Bureaux or did he say "Citizens' Advice Bureaux"? I know that I said "Consumers" on the previous Statement. If I heard him aright—
Lord Elwyn-Jones: He said "consumers' advice".
Lord Lyell: I am grateful to the noble and learned Lord.
Lord McGregor of Durris: My Lords, if I made a mistake, I was doubtless misled by the noble Lord!
Lord Lyell: My Lords, I am always grateful that your Lordships point me in the direction of clarity, even on this occasion. I should like to thank the noble Lord for his robust and forthright comments and support for the entire Citizens' Advice Bureaux movement. We hope that the movement is satisfied. As the noble Lord has said, his organisation has been pressing for an inquiry. I hope that he will feel satisfied that his efforts have been rewarded by the Statement I have made this afternoon. The noble Lord drew attention to the support for the CAB from all sections of the political community. I am sure that he will have noticed, we have noticed and your Lordships have noticed the forthright and robust support from my honourable friend on at least eight occasions, or may be nine occasions, in another place in the last two discussions when my honourable friend dealt with this particular matter. We are very grateful for the forthright support of the noble Lord, Lord McGregor.
Lord Taylor of Gryfe: My Lords, may I ask a brief question? Is the set-up of this committee such that they are making the same mistake as did the Serpell Committee, in so far as the management consultants concerned were members of the committee? I have no objection to the use of management consultants—I think they can be useful and appropriate—but in so far as a member of this three-man committee is going to be one of the consultants it makes him a prisoner of their recommendations. Would it not be wiser if the three members of this committee were completely independent of the management consultants whose report has to be considered, I hope, objectively?
Lord Lyell: My Lords, I take the noble Lord's point but I think that he might agree that the terms of reference of this review committee are a little different

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from those of the Serpell Committee—although much of what he says may have relevance. My honourable friend believes that the review committee that he is suggesting is the correct channel in present circumstances. Above all, the noble Lord will have noticed that the first report is to be presented within three months and the committee hopes to present its full report within six months. Speed is of the essence.
Lord Denham: My Lords, before the short debate resumes, it might be useful if I were to tell your Lordships, according to Standing Orders, that 39 minutes have elapsed already. One hour and 51 minutes are left; so that the debate must now end at 6.15 p.m.

Brandt Report: "Common Crisis"
4.25 p.m.
Debate resumed.
Lord Hatch of Lusby: My Lords, the document that we are discussing this afternoon is not a Socialist document. If it had been, no doubt Mr. Edward Heath would not have signed it. I personally have many criticisms of it and, in particular, of the defects in the use of international financial and economic institutions which are not really dealt with in this document. I wonder if Her Majesty's Government still maintain the support which they showed in their reactions to the first Brandt Commission Report in regard to existing international economic institutions. But this report has done one invaluable service to our generation. It has spotlighted the growing world crisis, the irrational policies which are being followed by a number of Governments and the mounting misery of the majority of the world's population.
In a short speech of this kind it is necessary to concentrate, and I want to concentrate on one issue within the report which is contained on pages 15, 101, 103 and 104. In doing so, I take up what I thought was a most constructive and valuable speech made by the right reverend Prelate the Bishop of Hereford. I want to build on what he said. Indeed, he helped me very considerably by quoting figures which therefore I no longer need to quote. The situation so far as the whole question of aid and trade is concerned—and at the moment I put the two together—is really very clear. It has been clarified by both Brandt Commission Reports.
In the low-income countries (if one excludes China and India for the sake of convenience) the increase in trade during the 1960s was some 5.3 per cent. During the 1970s trade declined by 1.1 per cent. At the same time (as the right reverend Prelate pointed out) the prices of the commodities on which a great deal of this trade depended virtually fell through the floor. I can perhaps summarise the figures which the right reverend Prelate has so usefully given us by saying that in the two years that he mentioned—that is, from 1980 to 1982—the average rate of decrease in the terms of trade was, in real terms, 19 per cent. a year.
I give one example. Since independence, after two boom years, the new State of Zimbabwe, now just three years old, has had a decrease in its export prices
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of 5 per cent. and an increase in its import prices of 6 per cent. I think that we would all agree that those figures are not unrelated to the unrest which, unhappily, is now prevalent in that country. What is the result of this in global terms? It is that the majority of mankind and the majority of countries in the world—because they are unable to continue the increase in their exports, because their exports are priced at a lower figure and because they still have to pay either static or higher prices for their imports—have problems of foreign exchange; they have a declining amount of foreign exchange, they have declining imports, and, in the final result, there is the debt crisis which the world has been facing for the past two years. This affects us, as Brandt very rightly points out. I believe that most of your Lordships would agree that, with the exception of the nuclear threat, the greatest challenge to mankind in this century is how to bridge the gap between the 800 million people who are living in the world today in dire poverty and the unemployment of over 30 million people who are living in the industrial world.
I want to know from the Government what they are doing about this central problem to this generation and to the next generation. I also want to point out that their record so far does not seem very good. As my noble friend Lord Oram pointed out, they have now reduced overseas aid by some 19 per cent. When we left office the figure of aid, in constant terms, was over £1,100 million a year. In constant terms it is now less than £900 million—and I am saying "in constant terms". When we left office at least 40,000 British workers were employed as a result of the aid programme, and over one million in exports to the third world.
I have asked the noble Lord this question before, and I still have not received an answer. The Ministry of Overseas Development was able to give these figures, and the Overseas Development Administration should also be able to give them now. Does the cut of 19 per cent., which has been admitted in another place, mean that there has been a cut in the employment of British workers as a result of the cut in overseas aid? Before the noble Lord gives his usual answer to me on the question of aid—that it is going up this year—will he please deduct the amount that should have come from the Ministry of Defence and which is being given to the rehabilitation of the Falkland Islands? I ask that because on present terms each Falkland islander is receiving in overseas aid well over £500 per person from our aid budget, whereas a person in India is receiving approximately 25 pence. That is the scale of the difference.
What I want to concentrate on for the last couple of minutes is to ask the Government again to address themselves to the question of expanding trade between this country and the third world. Our trade with third world countries is much less than that of the United States or Japan; and I should like to make a special point and draw the attention of the noble Lord to the quite remarkable changes that have taken place over the last seven or eight years in Japanese policy. I know some people may consider this to be Japanese economic imperialism, but I hope it is not. The Japanese have greatly increased their exports to the third world, but they have increased their imports by

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a much greater extent, and they are now running a regular annual deficit in order to build up the purchasing power of the third world countries. At the same time they are increasing their aid, which has risen in very considerable proportions since 1977 and now stands, in the latest figure I have, at 0·34 per cent. of their GNP, because they recognise that overseas aid and trade have to work hand in hand.
In some ways I am a heretic in this party. I believe that as this Government have dropped the education of the British people in the realities and the morality of development, it is necessary to pursue the policy of tied aid, so long as that is not another phrase for simply giving subsidies to the powerful companies. I agreed wholeheartedly with the right reverend Prelate when he said we must give more programme aid and that that must be conditional upon the recipient Governments spending that aid in rural renaissance and in providing for a growing quantity of basic needs being supplied by the people of the third world out to their own communities. If those are called political or economic "strings", so be it. I believe that we are acting on behalf of the people of the third world themselves if we make sure that the aid we give is directed to those Governments and those societies which are already committed to building up the rural agricultural communities which can provide for their own needs. I believe they themselves will welcome such action.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, before the noble Lord, Lord Gladwyn, speaks, I think that the mathematics of my noble friend the Chief Whip were not entirely right when he said that this debate should end at 6.15 p.m. I am advised that the debate should end at six minutes past six.
The Earl of Longford: My Lords, may I ask for guidance on how long that leaves for each of us on the Back-Benches in the time remaining?
Lord Belstead: My Lords, a quick division sum will provide the answer for the noble Earl.
4.37 p.m.
Lord Gladwyn: My Lords, I imagine that it will be in order for me to speak for approximately 10 minutes, which is what I originally intended to do. May I begin by saying that I agree with a great deal of what the noble Lord, Lord Hatch of Lusby, has said. For my part, as an acknowledged non-expert, I would venture (greatly daring) to try to draw certain conclusions in respect of the very difficult and contentious problems dealt with in this excellent report which is before us this afternoon.
My first point (though I do not know if everyone would accept it) is that I feel that if we—and by "we" I mean all the industrialised countries—are really going to help what used to be called the underdeveloped countries (but are now more aptly called the very poor countries) to get out of the appalling mess in which they now find themselves, and for which I do not dispute they themselves may be partially responsible, we are unlikely to do so entirely painlessly
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even if it can be shown that doing so is in a sense in our own interests. In other words, any real assistance that we give them is likely to be given at the expense, I am afraid, even if to a slight extent, of our own still very high standard of living.
Take only one instance—sugar. One of the chief ways in which we could by common consent do a great deal to avoid disaster in quite a few of these lands would be to import much more cane sugar. But if we did so we would have to reduce drastically the amount of sugar beet, and indeed of surplus sugar beet, which we—and, here, by "we" I mean members of the EEC —produce at considerable expense in Western Europe. Of course, if the 10 Governments concerned were to take such a salutary decision (at any rate, I think it would be salutary) there would be tremendous protests from the electorally important farmers' lobbies, for many of the more prosperous farmers would stand to lose a great deal of money. So, for this reason alone I think that sort of proposal is never likely to see the light of day. Yet, unless this sort of measure is taken it is pretty clear that no serious direct—and I repeat, "direct"—attempt to assist the poorer countries will be taken by the richer countries.
Naturally, assistance can always, and should, be given indirectly, the effect of this on the standards of living of this country and of the various other countries concerned being presumably not so noticeable. For instance, as recommended in the report, the International Monetary Fund can be authorised to increase the special drawing rights; its conditionality can also be improved; the percentage of the various gross national products devoted to aid can be stepped up by a point or two; certain loans can be written off, others can be rescheduled; the International Development Agency—IDA—can be given further support. At least here I think that the performance of Her Majesty's Government has been, on the whole, very creditable. The Lomé Convention can continue to be applied. I hope it will be and that in no way will it be restricted. And so on and so forth. But all these measures, however desirable, are, in a way, palliatives. It does not look as though great progress can be made—here I agree entirely with my noble friend Lord Banks—without major reform of the whole international trading and financial system: a kind of new Bretton Woods, if you will, which is recommended at the end of Brandt Report II in a general way and which has been described, again by my noble friend Lord Banks, as the end of Keynesianism—the terminus ad quem of the Keynesian thesis.
What is pretty certain is that nothing like this will come out of Williamsburg, which I am afraid is likely to be vitiated to a large extent by questions relating to East-West trade, if I read my press correctly. Indeed, the whole world economic situation will quite likely have to get considerably worse before this sort of thing is even contemplated. And when it is contemplated it will probably, I fear, be found that a general world trade revival is not possible without acceptance by all concerned of at least some likelihood of renewed inflation, leading perhaps, in the long run, to a measure of debt repudiation. Was it not Lord Keynes himself who said on one occasion that in this wicked world progress usually results from a series of gigantic debt repudiations? These are obviously dangerous

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thoughts. In any case, they are all for the future and they are just speculation.
But there is one factor which stands out, even now. The general philosophy of the Tory Government, as we all know, based on the general thesis known, rightly or wrongly, as monetarism, seems to be that in the long run all depends upon free play being given to the operation of "the market". You leave the market to operate entirely by itself, with the minimum of governmental interference; then eventually all will be well. It is basically the doctrine of "Let nature take its course".
With great diffidence, because I am not an expert, I suggest that we have arrived at a stage in world history when such considerations no longer apply. Certainly we can admit that if things go on as they are, the present world recession is unlikely to lift in any material way until such time as the American market recovers and world trade consequently takes a turn for the better. But in spite of present insistence, largely on the part of our own Government—possibly dictated by electoral exigencies—that recovery is virtually on the way, it seems that we shall have to face some even greater recession, based on at least a partial collapse of the international banking system. I do not say that this is inevitable. I sincerely trust not. But even now we ought to contemplate this possibility—as it were, take some kind of preventive action, or have plans in hand for taking some action in that event.
But—I do not know whether this is so—there might be an alternative. We could, if we were intelligent, choose to create a genuine European Union—not a federation of the old-fashioned type but a full, free trade area with a large communal budget, many times the present budget, in respect of which decisions were ultimately taken by a qualified majority vote in the Council of Ministers, endorsed by a majority in the European Parliament, with the advice of the European Commission. At least as a first step in this direction, we could even now join the European Monetary System and, as part of a deal involving a revised common agricultural policy (which I regard as essential), agree in the next year or two to a considerable increase in the Community budget, based on increasing the 1 per cent. VAT limit. This would lead to a large increase in the budget generally. It would enable us to begin to create a suitable regional fund and to pursue a common industrial and transport policy. Then one thing would lead to another.
There is little doubt that by such means, even in the sad event of continuing stagnation in world trade and a malfunctioning of the world financial system, we might be able in the first place to immunise ourselves to a considerable extent from the political and economic infection of protectionist tendencies and also, let us hope, be the initiators of some ultimate world trade revival. At the moment, as I have said, we seem to be simply waiting on such a revival in the United States, but that, as we all know, is held up—and may be held up indefinitely—by the dreadful decision (as I think) of the administration to pour enormous sums into the achievement of some kind of nuclear "predominance", thus creating an unmanageable budget deficit of some 200 billion dollars, which in its turn necessitates high interest rates and consequently stifles trade.
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But there is no logical reason why we should necessarily go on waiting for America. The Community is larger than the United States. Its GNP is not now very dissimilar. We have the intelligence, the techniques and, if only we would use them, the men, All we have to do is to create, on our own and, so to speak, by an act of will, a real "market"—not just wait, in accordance with the inclinations of American and British "monetarists", for the mysterious world market of Professor Hayek to perform miracles, all on its own.
I quite realise that such possibilities are beyond the wildest dreams of the present leadership of the Labour Party, who are only intent, so it would seem, on getting us out of the Common Market as soon as possible. But when it comes to the point, when there is a real economic crunch in the world, I would not despair of the leaders of other parties—notably, of course, those of the Alliance—being prepared to take the plunge and, indeed, to take the country with it. Admittedly the situation will have to get very much worse than it is now if these kinds of things are to happen. All one can say with some certitude is that the British are quite capable of reading the writing on the wall, but only when they have their backs right up against it. And when that happens we must, somehow or other, produce an inspired leader as well.
4.48 p.m.
Lord Thomas of Swynnerton: My Lords, there is no doubt among your Lordships that the second volume of the Brandt Report, Common Crisis, is a high-minded document. I am also sure we all agree that it is desirable to discuss these matters as fully and as candidly as possible. I recognise that there is so much in this report, and so many recommendations, that we can all find one or two things with which we fully agree. I myself fully support the statement on page 156 that we should desire to see supported by our Government and by the other Governments in the European Community,
"A reinforcement of the commitment to the principles of an open, rule-governed trading system".
Most of us would accept that recommendation, although it is fair to say that there are a great many countries which make declarations in favour of trade but which do not carry those declarations through into practice as effectively as they might. We must also not forget that protectionism is the natural reaction of all democracies at a time of recession.
I hope your Lordships will not feel it either discourteous or churlish of me to dwell on one or two criticisms which I have of this report, since on the whole I think that all those who have spoken up to now have done so without any criticism of any sort. It would be difficult to believe that a document of this length and ambition should not have some things wrong with it.
The first matter I wish to criticise is the use of language. The suggestion that there is a third world and a fundamental difference between countries of the North and South is extremely inaccurate and possibly even damaging. Confucius—that famous inhabitant of what I see from the report's map is still regarded as part of the third world—said that the first business in

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politics was to define your terms. There is no doubt whatever that the expression "third world" is an extremely bad definition. It is a sludgy amalgam, as Churchill put it in relation to the proposed European army in the 1950s. Any suggestion that countries such as Venezuela and Bangladesh, Argentina and Haiti, or Kuwait and China, have more in common with each other than they have not shows gross contempt for cultural and historical differences.
I know that "third world" was a phrase invented by a French demographer in the 1950s, in the same way that the expression "Left" and "Right" is a distinction (from which we have gained so much evil as well) derived from the French Revolutionary Parliament. We should recognise that not every invention of terminology by our French neighbours is a good contribution to our vocabulary. This is particularly important where major political recommendations are made—and this book is full of major political recommendations since it suggests that political systems do not count. But they do count. Political systems are what determine what is good and bad in the world. It is quite ridiculous to make all these ambitious suggestions without having some consideration of the fact that there are some states, such as those in Latin America, which have had 150 years of independent statehood and those of Africa which are new countries created in the lee of the European empires.
I must also say, because perhaps no one else will do so, that despite the presence of Mr. Edward Heath on the commission there is no mention at all that one of the main problems of the world, if not the main problem, is that of the expansion of the Soviet empire. This may be thought irrelevant, but nevertheless it not only forces the world to spend a great deal on armaments which otherwise it would not do, and not only creates refugees in all continents, but it also deprives the world, because of the malfunctioning of the political system in the Soviet Union itself, of those beneficial agricultural exports on which Europe and other countries depended in the years before 1914.
This neglect of the Soviet dimension is particularly surprising because in the introduction to "Brandt II" by Herr Brandt himself there is almost excessive dwelling on the subject of arms and armaments—although it is fair to say that, rather strangely considering that Herr Brandt was a distinguished mayor of Berlin, there is an equation of East and West as far as this is concerned.
Another point which occurred to me when going through this document—although, again, it may appear churlish to your Lordships—is that there seems to be excessive faith in the efficacy of Government-to-Government aid. Of course, emergency aid is very desirable. Of course, educational aid—especially in relation to agriculture—is greatly desirable, and the report has some excellent ideas on those matters. But the fact is that relative prosperity, such as that which we have achieved in the industrial countries, and such as that which has been nearly achieved by the so-called newly industrialising countries, is not likely to be obtained by the provision of aid, however large.
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The achievement of our relative prosperity and the achievement of relative prosperity in countries such as Taiwan and South Korea—and I say this having listened carefully to what was said by my noble kinsman Lord Gladwyn—depends on the economic climate which has been achieved in those countries and on an economic climate in which a private profit must play a part. There is no instance of a state coming out of misery simply because of aid.
Lord Gladwyn: My Lords, is it not the case that with Taiwan and South Korea their economy has benefited by enormous subsidies from the West?
Lord Thomas of Swynnerton: My Lords, whatever may have occurred in those countries, it is certain that they have not benefited from the constant intervention by the state in their economy—as has occurred in so many countries in Africa and Latin America.
The first report of the Brandt Commission also devoted a good deal of attention to the subject of agricultural reform. In this report, I am pleased to see, there is not quite so much attention. What is missing, though, is that hardly any attention is paid to what makes for successful agriculture. If one is discussing the future of the world's food supply, I would have thought that one should devote some pages to why it is that the countries of the North, to use the commission's own language, have been able to develop enough food to be able to provide the whole world—the communist world as well as the developing world—with reserves of those commodities for the future.
At the back of my complaints in relation to the Brandt Report finally is the tacit assumption made that the liberal heritage of the West has no part to play. But a point that must occur constantly is this: what kind of political system can guarantee that the assets of companies adventurous enough to risk their money in, say, Latin America can be safeguarded? What kind of political system can make certain the export of profits, where these are made? And what kind of political system can be expected to attach importance to the repayment of loans; quite apart from being sensitive to new ideas of industrialisation and new technology? The answer is, those Governments based on consent and the rule of law. It may well be said that this is inconceivable in many countries; but if India and Honduras (to take two extreme examples) are able to provide a democratic system, it is rather contemptuous to suppose that this subject is one of no relevance or importance to the rest.
I should like to conclude with the suggestion that we keep some sense of proportion in respect of the figures which we have been given in this debate. The first report of the Brandt Commission mentioned 600 million people living in what was called the direst poverty—and the noble Lord, Lord Hatch of Lusby, mentioned a figure of 800 million. As a proportion of world population—and this must be said in all seriousness—both figures amount to something like 15 or 18 per cent. Considering the increase in the population of the world over the past 50 or 100 years, considering the incessant political mismanagement by over-ambitious or simply rotten Governments, and considering the number of wars, this does not seem too

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bad a figure—that 75 or 80 per cent. of the world's population can be said now to be living not in the direst poverty. I doubt very much whether it has ever been possible to say it before.
5.59 p.m.
The Earl of Longford: My Lords, it is a rare privilege to follow such a brilliant family team as that to which your Lordships have just been listening. The relationship of father-in-law and son-in-law has not been very common in British history. One's mind goes back to James II and William of Orange. What I am saying now is without reference to the personal beliefs of both speakers which have been so evident this afternoon, but on the strength of their speeches this afternoon I hope that their domestic struggles will work out in a different way!
In the few minutes available I am going to deal with matters entirely from the rather crude moral angle. That is not to say that other speakers, including, first of all, obviously, my noble friend Lord Oram, and Lord Hatch and others, have not; they and others have of course spoken about the moral aspect. But I am concentrating on that, picking it out of the wider issue. I would quote something that comes in the Brandt Report which is quite brief:
"There is a clear common interest"—
by which Brandt meant an economic and social interest which is common to all nations of the world—but what I want to concentrate on comes in the next sentence:
"This, of course, does not reduce the moral obligation of the rich to the poor, in particular towards those whose situations have become more desperate in the last few years."
It is on that aspect, rather than on the mutual interdependence of which we are all conscious, that I want to dwell. Here I support the noble Lord, Lord Gladwyn, who called for sacrifice. He said that sacrifice is necessary, and I think that unless we face the point made by the noble Lord we shall be humbugging ourselves; we shall go on in the end doing nothing, because when we come up against it we shall always realise that there is sacrifice involved and we will have avoided it and therefore do nothing.
This aspect of sacrifice has been looked at in the Labour Party, and perhaps in other parties, but more obviously in my own, over a great many years. The late Mr. Hugh Gaitskell laid stress upon it in the 1950s. In those days it was considered an absolute minimum that we should give one per cent. Others may have had bolder aspirations, but Hugh Gaitskell and others insisted on that one per cent.; it was thought that was the irreducible minimum. Now we have descended to a wretched level. We are nowhere near reaching the 0.7 per cent. which is regarded as a kind of interim target. I understand from the figures supplied by the noble Lord, Lord Oram, that we have now come down in the last year from 0.44 to 0.38 per cent. If that is the way the Government are moving there seems no likelihood of their increasing it.
So I think we may take it that aid is dropping. Certainly—this has been brought up by the noble Lord, Lord Hatch, and others—the total amount has been brought down by 19 per cent. since this Government have been in office. The noble Lord, Lord Thomas, may be rather gratified with that
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development. If he thinks aid is a bad thing, he will be delighted to find it is being cut down. We read in the newspapers that Lord Thomas is very close to the Prime Minister. I can only hope that on this matter he and she do not see eye to eye. But in any case that is what has occurred under this Government, a reduction of 19 per cent.
Lord Thomas of Swynnerton: My Lords, on a point of correction. I merely said that I thought aid was ineffective.
The Earl of Longford: My Lords, I understand; but do not let us waste our time on what is ineffective. I would think, at any rate for the noble Lord, Lord Thomas, it would be a pity to waste time on what is ineffective. That is a point of view, that it is either harmful or ineffective. At any rate, it is not likely that a Government that take up that attitude are going to do much about increasing aid.
Here I am bound to say—I will leave out the Liberal Party for the moment, and the Alliance too, because the noble Lord Lord Gladwyn, seems to be so close to my way of thinking that I would not like to say anything to annoy him.
Lord Gladwyn: I do not mind, my Lords.
The Earl of Longford: Well, the noble Lord is in a genial mood today. My Lords, I shall simply compare my party with the party opposite. I can only say that on this matter of aid—and I do not always agree with what appears to be the official line for the time being of my own party, as some speaking on defence may be aware—there is a great gulf fixed between the Labour Party and the Conservative Party, particularly under the present auspices. I have never been more clear in my mind that the Labour Party is the party for any humane person to belong to.
The practical steps to give effect to this idea of one per cent.—or at any rate the practical steps towards that objective—have been set out by Mr. Heath in a masterly speech elsewhere and by my own leaders here. They will no doubt be developed finally and conclusively by the noble Lord the Leader of my party in this House. I would only say, with regard to something that was said earlier from the Liberal Front Bench, that there is obviously a great difference in the economic thinking of those who could roughly be called Keynesian and those who could roughly be called monetarist. I am not going to get involved in that today. I once taught economics for a short time at the London School of Economcs, but that was so long ago that if I learned any economics I have long since forgotten what I learned or what I taught. I am not talking economics this afternoon; I am talking morals.
I am saying that whatever the economics, there is this moral obligation which cannot be shirked. I defy anyone in this House, at any rate in a reflective moment away from his own Front Bench, to say that it is technically impossible to transfer one per cent. Certainly you could not do it tomorrow; obviously, you would have to move by fairly rapid steps, but you could not move at once from 0.38 per cent. to one per cent. I am merely submitting that there cannot be any technical reason why that is not possible. I am asking the noble Lord who is to reply to say why that is not done and why our performance has been so appalling,

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except on the assumption, if that is his assumption, put by the noble Lord, Lord Thomas, that it does not do any good. The Government, after all, have welcomed the second report of the Brandt Commission, and most people in the House believe that it can make an awful lot of difference. I am asking why it is not done.
My Lords, I shall not go on for more than one more minute. I shall just reflect on the fact that before the war people growing up and coming to manhood in this country felt a great sense of moral obligation for what happened in the world; perhaps it was overdone at times and we may have exaggerated our influence, and certainly there was plenty of failure; but there was this overwhelming sense that what happened anywhere in the world was, to some limited extent, a British responsibility. Have we lost that sense altogether?
It may be said that in these days of super powers Britain cannot either rule the waves or control the destiny of everybody, but still it would be a bad day, a tragic day, if we abandoned altogether the idea that all this poverty, distress and starvation has nothing to do with us. So I am asking the noble Lord, who as I know is a very moral person, to go back to the Gospels, when Christ said:
"When thou makest a feast, thou shalt call the poor, the maimed, the lame and the blind and thou shalt be blessed".
I do not think anybody who tries to give effect to the Christian gospels today imagines that that injunction stops short at the national frontier.
5.9 p.m.
Lord Beaumont of Whitley: My Lords, I am no great admirer of the two Brandt reports; I think they suffer from a great many disadvantages, not least of which is that they were brought together by a group of very able people of extremely different views, and therefore they suffer to quite a large extent from the fault of the lowest common denominator. A report which could be signed by Mr. Heath and by some of the other members was obviously not going to be a very sharp-nosed report. Nevertheless, I think that these two reports have had one very good effect, which is that they have given us a focus for discussion of a subject which is one of the most important in the world today. I am indeed extremely grateful to the noble Lord, Lord Oram, for having raised this matter today. He is indefatigable in his pursuit of this particular subject, and as someone who is deeply involved in it myself I think we should all be extremely grateful to him.
I want to take advantage of the eight or nine minutes at my disposal to raise a single particular point. It is one that I have raised in your Lordships' House on previous occasions but it is illustrative of a wider range of points. One of the things that we in this country have done rather well over the years in terms of aid is to set up organisations largely connected with Government, sometimes a part of Government, which have a tremendous amount of expertise. It is the least one would expect of an old imperial power that we should have this ability. It is a very good thing that we have set up a number of departments in Whitehall. We have cherished a number of different bodies to try to improve not only the quantity of our aid but, rather more importantly, the quality of our aid.
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These bodies have to some extent recently been under threat from the present Government. It is my objective this afternoon to suggest to the Government, and particularly to the new Minister, for whom I have great admiration having known him for a very long time, that it is time the Government took a different view; a view that will, in fact, fall in with their basic philosophy, because I believe that they can do that.
I shall be putting forward a case in the next two or three minutes but I am not asking for an answer from the noble Lord, Lord Belstead. I know the kind of answer I would receive. I am not asking him to waste time in his reply, but that my argument should be taken back, read and considered.
The particular example to which I refer is of an institution—the Land Development Resources Centre—which is run by the Government and which is known to all the specialists on this subject in this House but probably to very few others. This centre is in the process of being cut. Its manpower and its budget are being cut and it is under grave threat. I asked a Question about this on 16th February but I received a very dismissive reply. To summarise, I was told that future demands for the services of the centre are uncertain, that equivalent services can be provided from the private sector and that the centre remains in being and viable even with a complement of about 40 per cent. of what it was.
There is the question of future demand. This body deals with technical advice on land resources, which is extremely important for the development, and particularly the rural development, of any developing country. It is a long time before the professional capacity of developing countries is adequate in such spheres as agriculture, forestry and engineering, so there will be no real lack of demand for advice on the rural sector. What has happened is that the level of aid supply that channels through ODA has been drastically cut in recent years. Indeed, it was cut from 31 per cent. of aid in 1977 to 7.4 per cent. of aid in 1980.
It is not just the overall level of aid funding that has been cut. There has been a drastic alteration in aid priorities away from the natural resources of the rural sector. Instead, it has been directed to industrial, commercial and political outlets. For example, a high level of political prompting on the part of the ODA led recently to the provision of ships to India with £40 million of aid. This aid would have been better regarded as aid to Scotland rather than to the third world because it was helping our shipbuilding industry. That is a very good thing in its way, but it was not really aid and as such should have come from the budget of the Department of Trade. A prime consequence of this reallocation of aid was a redirection of funds away from the villages and away from the poorest people.
This leads to the question whether the aid funds that remain for the rural sector should be channelled, as the Government believe, towards private enterprise. The aim of the private companies operating in the aid business is quite simply, naturally, to make money. This requires finding work and carrying it out profitably. Such an aim is not necessarily compatible with the essential purposes of aid.

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On the other hand, developing countries have certain things that they demand that the Land Resources Development Centre can supply. The Land Resources Development Centre can supply political objectivity. Many developing countries suspect the motives of private companies, in some cases wrongly and in some cases rightly. But work requiring close Government-to-Government co-operation and involving delicate political issues such as land reform, distribution of scarce water supplies or priorities in area development cannot with confidence be contracted out to private firms. There are a large number of countries which actually prefer to operate in direct co-operation with donor Government bodies which can be trusted for their impartiality and objectivity.
The Land Resources Development Centre and similar bodies—I emphasise it is only typical of similar bodies—can produce flexibility in timetables in a way that private enterprise cannot. It can monitor over a long period of time in a way that private enterprise cannot. It is extremely cost-effective and in a number of cases has been proved to be so. For instance, there were the 1983 estimates for a project in Somalia. In the private sector the figure was £4,300 a month and for the Land Resources Development Centre it was £2,000 a month.
This is one of a number of advantages which these Government departments have. If we start cutting them down from 100 people to 45 people, and if the 45 people include the typing pool, and so on, we shall be getting rid of a wideness of expertise which they can give to the developing countries. It is important that we should continue with this kind of help.
A great deal of aid is wasted. Sometimes it is wasted through the fault of the developing countries and sometimes through our own fault. The more we do it through the Department of Trade and the less we do it through Overseas Development, the more that will be wasted, because all that we are doing so often is throwing in bribes for uncompetitive industry. What we should be doing, as a number of speakers have emphasised—not least the noble Earl, Lord Longford, my noble friend Lord Gladwyn and the right reverend Prelate the Bishop of Hereford—is thinking in terms of the absolute good that we can do and the help that we can give. If necessary, we should be thinking in smaller terms but in effective terms. We should be thinking of what really has a sharp edge and of aid and gifts rather than the profits that we shall obtain in return.
If we concentrate on that and increase the quality of our aid we shall do what is best for the developing countries. I hope that the Government will see that such actions are in line with much of their basic philosophy and can be done without indiscriminate, old-fashioned aid of a kind which possibly many of us should have deplored earlier. We may have learned our lesson now: that there is some good that can be done and that we must concentrate on doing it where it will have the most effect.
5.19 p.m.
Lord Walston: My Lords, the trouble with speaking late in a debate like this is that there are so many aspects that have been raised by previous speakers that one is tempted to take them up, answer them and
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amplify them. I should dearly have enjoyed, even in his absence, answering some of the points raised by the noble Lord, Lord Thomas of Swynnerton, particularly with regard to agricultural production and agrarian reform. I should have reminded him of the work of the Commonwealth Development Corporation, with which until recently I was closely associated, and whose finances have, regrettably, been curtailed by the present Government, and of the work of the Voluntary Service Organisation and the magnificent help that has been given in that way. But there is no time to enter into any of these problems. I shall confine myself tonight simply to the matter of indebtedness, already mentioned by very many noble Lords who have spoken.
We all know that the indebtedness of the third world is now rising to astronomical heights. In 1981, for instance, out of the whole of the grants and loans, which totalled nearly 90 billion dollars, given by, let us call it, the North to the South (by the rich countries to the poor), repayment of previous loans and interest amounted to something in the neighbourhood of 70 billion dollars, leaving only 18 billion dollars available for help to those countries. The net flow of aid to the third world has shrunk from the peak of 34 billion dollars in 1978 to this 18 billion dollars. That cannot be anything to be proud of, and nor can it be anything that we can suggest will really help to solve the growing and appalling problem of the ever-widening gap between the wealth of the rich nations and the poverty of the poor nations.
The answer to all of these problems among the bankers is, "Let us reschedule. That is the thing to do". But what does rescheduling do? If I, as a private individual—as a farmer—say to the bank, "I am very sorry. I cannot repay my loan. I cannot even afford to pay the interest because the income from my farm is too low", the banker does not say, "All right. We will reschedule it". He will only reschedule the debt if I can prove to him that by so doing there will be an opportunity for me to become very much more profitable. The same holds good for companies and for countries. There is no point in thinking that we shall solve this problem of indebtedness by rescheduling unless it is regarded purely as a stop-gap measure while other measures take effect. Otherwise, it is simply a Micawberish attitude of saying. "Let us hope something will turn up in the meantime".
I believe that there is only one answer. Rescheduling as a stop-gap measure may be all right, but there is only one answer to the poverty and the gap between the rich and the poor countries. It is, quite simply, to alter the terms of trade between the rich countries and the poor countries. Let me give your Lordships a few figures. I do not want to give too many. In December 1981, for instance, a tonne of cocoa bought 65 barrels of oil. In November 1982, 11 months later, that same tonne of cocoa bought only 46 barrels of oil. In December 1981, a tonne of sugar bought 8½ barrels of oil; 11 months later it bought just half that amount: 4¼ barrels. That is not only because the price of oil had risen but because the price of the commodities in question had fallen. Again, a few more figures: between 1977 and 1982, cocoa fell from close on £3,000 a tonne to under £1,000 a tonne; coffee fell from 530 United States cents a pound to 140 cents;

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palm oil fell from 530 dollars a tonne to 355 dollars. It is hard enough for any country to live with that type of decline in its main export earnings when other prices are stable and bank overdrafts remain the same, but at a time of rising overdrafts, rising interest rates and rising relative prices of essential imports, no wonder these countries are in dire straits.
It is no good saying, as some speakers on this subject have said, "If only they would not spend so much money on armaments, nuclear power stations, and so on, they would be all right". Some countries do spend their money foolishly. Undoubtedly, some spend far too much on armaments. But let us look at three small countries with very stable Governments and with virtually no expenditure on armaments or anything of that kind. In Costa Rica, which does not even have an army of its own, the adverse balance of trade has risen from 92 million dollars to 512 million dollars. In Fiji—which is not a warlike or aggressive country—it has risen from 65 million dollars to 213 million dollars. In Malawi—one of the shining examples in central Africa—it has risen from 49 million dollars to 175 million dollars. I repeat that these are all stable countries with good Governments.
What we require is not the code of conduct in commodities that the right reverend Prelate spoke about, if he will allow me to say so (although I agree with so much of what he said), but stable and higher prices for these countries for their main products. This is not a new idea. I am not talking about commmodity agreements. They have been tried and they have many difficulties. But, after ail, the United Kingdom invented the Commonwealth Sugar Agreement under which we undertook to buy specified quantities of sugar from individual Commonwealth countries at an agreed price for a period of years, thereby giving them stability so that they could plan their future and know what their income was likely to be. When we entered the EEC, with much negotiation, we were able to negotiate so that the Commonwealth Sugar Agreement could continue under a different and somewhat expanded guise. That is what we should do for the primary commodities from the third world. We should, if possible through the EEC but, failing that, on our own, negotiate commodity agreements which would give to the third world primary producing countries stability for specified quantities of their products.
It may be argued that this will raise the cost of living in this country and increase inflation. It will, but it will not do it to anything like the extent that people believe that it will. A rise of 20 per cent. in the price of tobacco for the grower of tobacco in Malawi would put up the cost of a packet of cigarettes by only 1p, from £1·04 to £1·05, which is hardly a disastrous impact on the cost of living. A rise of 20 per cent. in the price of cocoa for countries like Ghana, and others, which would have an enormous impact on their economies, would mean only a couple of pence on a 70p bar of chocolate. These are increases that we can live with. The improvement that would be made in the country concerned would be quite out of proportion to any cost to this country.
I urge Her Majesty's Government to take a lead in this simple but enormously helpful move in order to
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reduce the gap between the rich and the poor countries. I urge them to do so at Williamsburg and to put forward a thought-out plan then, and to use their influence in the EEC to persuade our European partners to do the same. If they fail in both those cases, they should introduce a similar kind of arrangement on their own. It is only in this way that we can narrow the gap between the North and the South, between the rich and the poor. It is worth mentioning that by so doing we shall increase enormously the demand from the third world for the products of our factories and our workers, so many of whom at present have no jobs to do.
5.31 p.m.
Lord Cledwyn of Penrhos: My Lords, as all noble Lords who have taken part in the debate have said, we are indebted to my noble friend Lord Oram for giving us the opportunity to debate the problems of the third world and in particular the second Brandt Report. We should be grateful to Herr Willy Brandt and to the members of his commission, including Mr. Edward Heath, for the time and energy which they have devoted to these historic reports. My noble friend set the scene with a well-informed and wide-ranging speech. Other noble Lords have built upon that, and we have had a most constructive debate.
The first report of the Brandt Commission, which we debated at length in this House, was a much longer document, and much more time was spent on its preparation. It dealt in considerable detail with, for example, the problems of the less developed and undeveloped countries of the world, and warned us of the consequences of failure to find constructive policies to deal with them. What has been done since that report was published? This is the one question that we should consider in today's debate. Has urgent action been taken by the industrialised countries? Has there been a concerted policy by developed countries to help the undeveloped? I fear that the answer is in the negative. The West has carried on much as before; perhaps with even less enthusiasm than before. As my noble friend Lord Oram said, the conference at Cancun, upon which we had built our hopes for something better, was a profound disappointment.
I shall come in a moment to the question of the Government's attitude; but it would be wrong to put the blame for all this on Britain. I recall the pleasure with which I read what the noble Lord, Lord Carrington, said when he first went to the Cancun conference; but he received very little support at that time. Then, again, the United States seems to be off course for the time being. When the United States fails to give a clear lead—the kind of lead, for example, that it gave with the Marshall Plan, the kind of lead that it gave at Bretton Woods—then the prospect of implementing Brandt or any other significant plan to deal with third world poverty becomes limited indeed. A dependence on Europe alone, which the second Brandt Report seems to favour, would make the task infinitely more difficult. We should work very hard to get the complete co-operation of the United States in any plans we may embark upon.
The disillusionment and disappointment over the failure at Cancun was plain to see at the meeting of non-aligned nations in India three weeks ago. I am not

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proposing to neglect the Soviet dimension, to which the noble Lord, Lord Thomas of Swynnerton, referred. I would agree that in matters of aid, such as it is, the Soviet bloc move in their usual secretive and enigmatic way. We must proceed not without them, but in spite of them; and it is one of the tragedies of the modern world that this must be so.
The United Nations was set up partly to encourge its members to co-operate in matters of this kind, and United Nations agencies exist for the purpose. It is a tragedy that 40 years on we have not yet learnt to work together with a common will, to achieve a common good. The East, and indeed the West, seem to be more concerned with the political mileage which may be gained from dollops of aid here and there, than with the overall need to raise standards everywhere, regardless of short-term political benefit. Until we start to get away from this outdated and dangerous posture, we shall not begin to grapple with the real problems. This lack of interest in international co-ordination is severely criticised in the second Brandt Report.
There are those—some in this House—who believe that we should do little, or nothing, and that undeveloped countries should be left to solve their own problems without outside help of any kind. That is a point of view which is held by some people. I read an article in The Times by the noble Lord, Lord Bauer, and his colleague, Professor Yamey, and they appear to me to come within this category. Their article appeared in The Times on l1th April, and I found it depressing and misleading. It is entitled,
"Why we should close our purse to the Third World".
They take an entirely contrary view to that taken by Brandt. They say,
"Aid is the source of the North-South conflict, not its solution".
I find that a totally insupportable statement. No doubt aid has been misapplied over the years, and it will be misapplied again; and no doubt it can be used more efficiently and effectively. As the right reverend Prelate said in his constructive speech, aid should be properly programmed. But to talk of abolishing it is not only foolish, it is wicked, too. Official Government aid is a comparatively new concept, and it needs to be developed and organised properly. As noble Lords have said, where poverty and disease are rife, and where they exist, there is a happy hunting ground for the political extremist and adventurer. Are we to look on and do nothing at all? Is that the attitude which modern Governments should take? That is a recipe for trouble for the free world, and worse than that: as my noble friend Lord Longford said, it is morally insupportable as well.
The right reverend Prelate drew our attention to the suffering which is caused by drought and other natural disasters, and this was further stressed by my noble friend Lord Hatch of Lusby. Drought and famine ravage the Horn of Africa and Ethiopia, and over the next few months further large areas of Africa may be affected as well. Crops in Zambia, Mozambique, Botswana and neighbouring countries are likely to be severely affected. What should more fortunate countries do in these circumstances? Should we tell them, as the critics of aid might well do, to tighten their belts? My Lords, the dead have no belts to tighten.
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The second Brandt Report examines the problem and suggests regional programmes to combat the causes of food shortage. The South African Development Co-ordination Conference is the appropriate agency here, and it has a strategic food programme. Perhaps when he winds up the noble Lord, Lord Belstead, can tell us what is the Government's attitude to this matter, and what help the United Kingdom is giving to the countries which are suffering and which will suffer if adequate support is not forthcoming.
My noble friend and others have dealt in some detail with the second Brandt Report, and I do not propose to enlarge further, save to say that the warning seems to me to be even more urgent than ever before. It is a warning of deteriorating economic conditions already threatening the political stability of developing countries. The report states:
"Further decline is likely to cause the disintegration of societies and create conditions of anarchy in many parts of the world".
The report outlines a practical programme of action; and it can he criticised. The noble Lord, Lord Thomas, says that the report is not free from criticism; I agree with him. But it provides us with a base on which to build, on which to take constructive action. If action were taken to implement the report, phase by phase, it would not only immediately improve the prospects of world peace; it would also result in increased economic and industrial activity, which in turn would help us to get out of the current recession.
One of the most important sections of the report deals with the IMF and the World Bank. In this House in recent weeks we have had many exchanges on both of these agencies. The report calls for a substantial enlargement of the IMF's role and its resources, in order to resolve the current balance of payments, debt and banking crisis. It also calls on all donor countries to commit themselves to increasing their funds for the seventh International Development Association replenishment.
As the House knows, the poorest countries receive assistance on terms that they can afford from IDA, which is the World Bank's lending arm for this purpose. But the availability of money at low rates is not the only or even the most important consideration. Practical assistance is needed to assist the underdeveloped countries not only to develop their own resources but also to process their own resources. This is where the need for programming comes in once again. It is only in that way that they can raise their standards and become self-reliant. For example, massive drainage schemes and major agricultural development suited to soil and climate are probably the most important needs of some of the poorest countries of all. The experiences of Ethiopia in recent months, to which I have referred, should have made that plain to the whole world.
In spite of what the noble Lord, Lord Bauer, and Professor Yamey say, people everywhere do respond to this need. The marvellous work of Christian Aid and OXFAM is sustained not by Governments but by the contributions of people who care about what is happening in these countries. The trouble is that Governments are not as responsive and not as good as the people they purport to represent. The Commission itself congratulates the non-governmental voluntary

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aid organisations for what they call their truly remarkable record,
"in circumventing bureaucratic red tape and getting things done".
It then calls for more confidence on both sides in private lending to the third world.
The task is therefore a formidable one. But it is a practical possibility. I was glad that the Foreign Secretary, Mr. Francis Pym, gave a warm welcome to the report and promised,
"a positive and flexible approach"
to the problems set out in the new document. I think that Mr. Francis Pym is perfectly sincere when he says that. That is a much more promising reaction than the one that the Government gave to the first Brandt Report.
We also have the opportunity to help to give a lead because the Chancellor of the Exchequer is the current chairman of the IMF's current policy-making body which will have to agree ways to increase liquidity. We must also bear some part of the responsibility for the long-lasting economic crisis that contributes to third world problems. The monetarist policies of our own and other Western countries have produced the appalling recession, the worst since 1930, and the consistent high rate of interest which has stultified production in this and other countries.
We believe that certain measures should and can be taken now. I shall enumerate them briefly in the few minutes remaining to me. First, the debts of the poorest nations should be cancelled as, indeed, they were cancelled by the Government in 1978. Secondly, we should provide cheaper loans through IDA to which I have referred, and, thirdly, we should aim at reaching 0·7 per cent. of gross national product and continue to work towards a target that is even better.
These, in my submission, are attainable targets. I hope that the noble Lord will agree that we need a resolute approach, as my noble friend Lord Oram has said. We are on the eve of what is, in my view, potentially one of the most important conferences of recent years—namely, the summit conference at Williamsburg—which the Prime Minister and other Ministers will be attending. This will provide the opportunity for a new initiative in the Western world. It can help to promote the start of healthy growth once again. I was glad to note that Vice-President Bush has indicated that this might well be the objective. Let us hope that it is. In his introduction to the report, Willy Brandt said:
"Time is short and every day may count".
I hope that the Prime Minister will be seized with this same urgency. I read some words in the report last night that impressed me greatly. By leave of the House, I should like to read them. They are the words of the United States representative at the Bretton Woods conference, who said:
"Where modern diplomacy calls for swift and bold action, we engage in long drawn-out cautious negotiation; where we should talk in terms of billions of dollars, we think in terms of millions; where we should measure success by the generosity of the government that can best afford it, we measure it by the sharpness of the bargain driven; where we should be dealing with all-embracing economic, political and social problems, we discuss minor trade objectives, or small national advantages; … we must substitute, before it is too late, imagination for tradition; generosity for shrewdness;
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understanding for bargaining; toughness for caution; and wisdom for prejudice. We are rich—we should use more of our wealth in the interest of peace".
It is possible to be cynical about such words. But they are the only worthwhile objective for everyone everywhere.
5.45 p.m.
Lord Belstead: My Lords, I am most grateful to the noble Lord, Lord Oram, for giving the House the opportunity to debate the Brandt Commission's memorandum, Common Crisis. The Government have welcomed the publication of the memorandum. I am most grateful to the noble Lord, Lord Cledwyn of Penrhos, for his generous acknowledgement of the response of my right honourable friend the Foreign and Commonwealth Secretary. We have recognised that the report deals with the most grave and pressing issues which the international community faces at the present time. The Government intend to publish a White Paper setting out in more detail their position on the issues in the memorandum.
In welcoming it the Government have stressed that we accept its central message—that we live in an interdependent world. The reality of interdependence has meant that the recession in the industrialised countries has had a severe effect on the developing countries, and particularly on the poorest among them. But, by the same token, the economic problems of the developing countries are having a direct impact on the industrialised countries, through a reduction of their ability to import the goods we produce—a point made by the noble Lord, Lord Walston. The UNCTAD Secretariat has suggested that developing countries are likely to cut their imports by around 40 to 50 billion dollars over the 12-month period from September 1982. That is a serious matter, particularly for a country like the United Kingdom. Developing countries represent nearly a quarter of our world markets. If we leave aside trade within the European Community, 37 per cent. of the Communities' exports went to developing countries in 1981.
The long term solution to the problems faced by the developing countries can surely only be a sustained non-inflationary growth in the world economy. There are now signs that the worst of the recession may be beginning to abate. Here, in the United Kingdom, we have reduced inflation down to under 5 per cent. There are signs of increased activity in the economy. Your Lordships may have seen in the newspapers this morning reports of the latest CBI quarterly trends survey which shows an encouraging picture. Manufacturing industry order books have shown strong improvement for both domestic and export orders. There are similar signs in other industrialised countries, particularly in the United States.
But, of course, I acknowledge at once that the developing countries have been hard hit by high interest rates, falling commodity earnings and rising oil import prices. More than 60 developing countries still depend on commodities for half of their export earnings. Yet commodity prices are at their lowest level in real terms for 30 years, a matter to which many of your Lordships, especially the right reverend Prelate, the Bishop of Hereford, and the noble Lord. Lord Walston, have referred.

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The United Kingdom is playing its part in a variety of schemes and funds relating to commodity prices that will be familiar to many of your Lordships. We are active participants in the six main commodity agreements. We are ready to sign the jute agreement, which would make the seventh. Nonetheless, it is the case that the total debt of developing countries, including short-term debt, has been estimated by the president of the World Bank as 700 billion dollars. The right reverend Prelate the Bishop of Hereford incidentally also referred to the highly relevant report on improving the North-South negotiating process produced by a group of Commonwealth experts last year. Here again, we have already commended that report to our European partners and to the OECD.
But in the light of that evidence and the evidence which has been given in your Lordships' speeches this afternoon, it is hardly surprising that the Brandt Commission gave top priority to the need for immediate measures to strengthen the international financial system. The Government fully recognise that need. If I may say so, the actions of Her Majesty's Government, and the speech in another place the other day of my right honourable friend the Foreign and Commonwealth Secretary have not been bland or complacent—which was the charge levelled by the noble Lord, Lord Oram—in supporting the international financial system which has shown itself remarkably flexible and resilient in adapting to the new problems which have confronted it. That is why we have supported measures designed to strengthen the existing international institutions.
At the February meeting of the IMF Interim Committee, it was agreed that quotas should be increased by 47½ per cent. It was also agreed that the implementation of the quota increase would be brought forward by two years to early 1984. The scope of the General Arrangements to Borrow (GAB) is to be extended and its size is to be increased from special drawing rights of £6 billion to special drawing rights of £17 billion.
In opening the debate the noble Lord, Lord Oram, complained that the IMF quotas had only been increased by nearly 50 per cent. when Brandt recommended a 100 per cent. increase. However, the measures which I have just outlined will create a very substantial increase in the usable resources available to the fund. In fact, the managing director of the fund has estimated that, taken together, these measures represent a virtual doubling of those usable resources. Many tributes have been paid to the skill that my right honourable and learned friend the Chancellor of the Exchequer displayed in bringing about that speedy and practical agreement.
The possibility of a further allocation of special drawing rights is also being reviewed in preparation for the fund's annual meeting in September. I hope it will not be a jarring note if I say that it really is no use noble Lords opposite complaining that we have not yet given a view about this. Of course, we are not prepared to make judgments on the outcome until we have seen the results of the review. But the rest of what I think is good news on this front is that the World Bank, too, is playing its part, specifically by instituting a 2 billion dollar special assistance programme—a programme which in effect is to adjust the structure of economies
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of developing countries to cope with the problems of the recession. I hope that this will make its contribution to improving agricultural efficiency in developing countries—a point referred to specifically by the noble Lord, Lord Cledwyn, the right reverend Prelate the Bishop of Hereford and the noble Lord, Lord Walston.
As regards the specific question from the noble Lord, Lord Beaumont of Whitley, on the Land Resources Development Centre, I have nothing to add to my reply to the noble Lord's oral Question of some weeks ago. But I do give an undertaking to the noble Lord that I will certainly study his speech with the greatest care.
Other institutions on the international financial scene are also considered in the Brandt memorandum, including the Paris Club, the Bank for International Settlements, central banks and private banks. These institutions, too, have shown that they can extend their role and can greatly increase the level of their co-operation and co-ordination as circumstances demand. Coherent rescue packages have been put together with remarkable speed for a number of major debtor countries. These packages have required decisive action and the very closest co-operation by all concerned. I think we can be proud of the role which the United Kingdom—the Government, the Bank of England and the private banks—have played in that process. Our approach throughout has been to try to work with the instruments which we have, to cope with the problems that we face instead of indulging in impracticable dreams when help is so urgently needed.
We must also be realistic in assessing the prospects for sustained recovery in the world economy. I most certainly agree on behalf of the Government with the view of the noble Lord, Lord Banks, that there are many potential dangers remaining. Perhaps the greatest is the danger against which the Brandt memorandum warns us so forcefully—the danger of protectionism.
The Government share the commission's belief in the importance of preserving the open trading system. The record of the United Kingdom and of the European Community is one of the best in the world in this area. Recent studies by the Department of Trade indicate that only 9·7 per cent. of United Kingdom industrial imports from developing countries are subject to any form of restraint at all. We have reaffirmed our commitment to the open trading system in our practical efforts to resist protectionism and keep our markets open to developing countries.
I must say I am surprised that, although the speeches from all parts of the House have been enormously interesting and informative, noble Lords opposite have felt able to make their speeches this afternoon without even mentioning just once the Labour Party's apparent intention to withdraw this country from the European Community. Of course, it was left to the noble Lord, Lord Gladwyn, from the Liberal Benches to mention it, but to make very little comment because I think he felt that mention of it was enough. Who can doubt that if that were to come about, the Labour Party would be forced to desert Britain's support for open trading—however good their intentions may be—they would be bound to raise tariff

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barriers and then they would pull up the drawbridge of protectionism behind them?
Another way of helping developing countries, also stressed by the Brandt memorandum, is development assistance. I would like to reply directly to the noble Earl, Lord Longford, and say that it is the case that the level of our aid could not be exempt from reductions in Government expenditure in the last three years. But this year we expect the total United Kingdom aid programme to reach £1,129 million. This is a cash increase of almost 10 per cent. over last year. In the light of the expected level of inflation, this should mean a useful increase in real terms and a move which I hope the noble Lord, Lord Cledwyn, will see as being a move in the right direction.
Like the Brandt Commission, we accept that it is essential that emphasis should be given to the poorest countries. That is why about two-thirds of our bilateral aid goes to those countries, all in the form of grants. That is why we have followed the previous Government in waiving debts, not only from the least developed countries, as recommended by Brandt, but also from other poor developing countries.
The noble Lord, Lord Hatch of Lusby, asked me two specific questions about aid. The first was to what extent jobs had been involved in either cuts or, indeed, in increases in aid. I have to say to the noble Lord that there really is no way of producing reliable figures for the number of jobs directly generated by the aid programme or by trade with developing countries. It is true that previous Government were willing to publish their guesses, but the present Government are not willing to publish unreliable statistics.
The noble Lord then asked me to except from anything that I said, aid given in respect of the Falkland Islands. Here I would say that the reasonable needs of the dependencies are a priority in the aid programme and I think that the House will appreciate the needs of the people of the Falkland Islands after all that happened last year. The increase of assistance to the Falkland Islands is but a small part of the total increase in the aid programme. For this year the increase in the programme is over £100 million to £1,129 million. Total aid proposed to the Falklands is £46 million spread over four years.
The Brandt memorandum also attaches importance to private investment in developing countries. Again, the United Kingdom fully endorses that view. We have signed investment promotion and protection agreements with 21 countries and 14 are already in force. By ending exchange control restrictions, which have been a matter of considerable controversy, the Government have also clearly made a most important contribution to the flow of international investment funds. Total financial flows from the United Kingdom to developing countries in 1981 were £4,987 million, which is equal to 2.01 per cent. of our GNP. This is double the United Nations target of 1 per cent. for combined aid and private flows.
The noble Lord, Lord Cledwyn, asked me one direct question about what the Government are doing and our attitude to the terrible problems of drought and, therefore, of hunger in Southern Africa. My right honourable friend the Minister for Overseas
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Development, who represented the United Kingdom at the last meeting of the Southern African Development Co-ordination Conference, announced a new pledge of £2 million, in addition to the £10 million already promised from this country, in respect of the question which the noble Lord asked me.
I hope I have said enough to show that the Government look on these issues with the greatest seriousness. The best solution to the very real difficulties faced by developing countries is surely a return to sustained recovery in the world economy, without refuelling inflation. The economy of the United Kingdom, under policies of the present Government, has gone a long way to show that this can be achieved.
But at the same time, we are determined to give the developing countries all the support we can within our means to help them to bridge the intervening period. I have tried to outline to your Lordships what we have done in this respect. Of course we are aware of the limits on what can be done and of the risks and uncertainties for the future. But it is in this spirit that we shall be approaching the principal international meetings later this year. The Brandt Report, like the debate in the House today, for which we are most grateful to the noble Lord, Lord Oram, has made a valuable contribution to that process. For this reason the Government have greatly welcomed its publication.
Lord Hatch of Lusby: My Lords, before the noble Lord sits down, as he referred specifically to me, may I just point out to him that, in asking my question about the issue of employment and aid, the figures that were given by the Ministers in the last Labour Government were not guesses—they were worked out by officials. I resent the suggestion that this was guesswork. They were worked out by officials. I have repeatedly asked the Minister why he cannot instruct them—because the same officials are in the ODA, and I am sure they would be very willing to do this—to give him the figures of the results of the cuts.
Secondly, when I referred to the Falklands, I was simply asking him—I was not criticising the aid to the Falklands—to deduct that amount from the aid increase this year and to give the real figure, which I think he will find comes to 3 per cent. in real terms. That is welcome, but it is minuscule in comparison to the cuts of the last four years.
Lord Belstead: My Lords, on the second point, I am afraid that I cannot improve on the answer that I gave to the noble Lord, Lord Hatch. On the first point, the noble Lord continues to ask me the same question, and I am afraid that the noble Lord must accept the same answer.
6.4 p.m.
Lord Oram: My Lords, I think that I only have time to thank all the speakers who have taken part in this debate. I am glad that I used my good fortune in the ballot to introduce this subject, because the speeches have shown that it is of great importance and of considerable interest in your Lordships' House. From listening to all the speeches, what has impressed me most has been the great variety of aspects of this

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subject which is covered by the second Brandt Report. For that reason, of course, it is quite impossible for me to attempt any meaningful response to the many points that have been raised.
It may be invidious to pick out any, but I should just like to commend the reference to the commodity problem, which, in the first instance, was dealt with by the right reverend Prelate the Bishop of Hereford, and latterly most effectively by my noble friend Lord Walston. I think that that pointed to the fact that when we are talking about this problem of world poverty, we are not just talking—although it is important—about aid and the transfer of resources directly. Equally, or perhaps even more, important are the terms of trade, and I think that the way in which those two speakers dealt with that was very helpful indeed.
I think that, whatever our differing points of view on the various aspects, we have all listened to the speeches and learned a great deal. In conclusion, may I hope that some of the points, at any rate, that have been made may at least prompt the Government to take more resolute action than they have so far. My Lords, I beg leave to withdraw my Motion for Papers.
Motion, for Papers, by leave, withdrawn.

"The Public/Private Mix for Health"
6.6 p.m.
Lord Hunter of Newington Lord Hunter of Newington rose to call attention to the Nuffield Provincial Hospitals Trust publication entitled The Public/Private Mix for Health; and to move for Papers.
The noble Lord said: My Lords, the National Health Service has received much assistance from two organisations—the King Edward Hospital Fund for London and the Nuffield Provincial Hospitals Trust. It is to the latter that we are indebted for the report which forms the background to this debate.The Public/ Private Mix far Health will, I hope, do something to still the passions aroused by pay beds in the National Health Service and enable the future to see a constructive collaboration between the National Health Service and private medicine.
In May 1946 there were a number of vitally important meetings between the representatives of the British Medical Association and Aneurin Bevan. These meetings showed clearly the continuing opposition of the BMA to the National Health Service plans. One thing that Bevan agreed to do was to consider more protection for private hospital practice. In spite of opposition from some of his colleagues, he was anxious to encourage consultants to direct their private as well as their public practice in hospital premises by allowing some private beds to be used without any limit on the fees charged by the consultant. He rejected any amendment to the proposed hospital structure.
Undoubtedly this concession made a great difference to the attitude of consultants to the National Health Service. There was clear confirmation of the favourable view to Bevan's proposals in the speeches made by Lord Moran in your Lordships' House. In only a few hospitals were there private wings, and in none a separate administration. Though the system
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worked reasonably well between 1948 and 1968, there were difficulties, not the least of which was the remuneration of nurses and other staff of the private beds.
The formation of the Department of Health and Social Security in 1968 had no direct effect on this problem, but inevitably this great new department was in the forefront of the political scene. This did not help. Nor did the changing attitude of the trade union movement. I remember in 1970, when I was vice-chancellor of Birmingham University, talking to one of my militant student leaders. When asked what he was going to be, he replied "hospital orderly". In response to being asked why, he said that the future—his political future—was with the health and social services.
In the 1970s we had a situation where two out of three Secretaries of State were interested primarily in the social services, and one at least had profound sympathy for the criticisms voiced against the pay bed situation and private medicine in the National Health Service.
In contrast to this, the present Government have encouraged private medicine, and now there are wild stories that the National Health Service is threatened, that private medicine will ruin it, that private medicine should be squashed, and that a frank objective assessment by the "Think Tank" cannot be examined objectively. Recently, all doctors in the National Health Service have been allowed 10 per cent. of their time for private practice. It is therefore most opportune to have a study such as that conducted by the Nuffield Provincial Hospitals Trust examining objectively the public/private mix for health in the United Kingdom and elsewhere.
It has been said many times that our health service is the best in the world. It is certainly unique. Perhaps no others have copied it because they cannot afford it. One thing is certain: this conflict about private medicine must be stilled if possible. It contributes to tensions and difficulties in an already beleaguered service—beleaguered because it is subject to financial restraints, which restraints are not being rigorously applied on the clinical side of the service. The Royal Commission on the National Health Service said in 1979 that the private sector probably responded much more directly to patients' demands for services, and often provided a useful pointer to areas where the National Health Service was defective.
In the summer of 1981 Dr. Vaughan, then the Minister of State, talked optimistically of change, including change in funding. In the same year the Department of Health and Social Security issued a memorandum of guidance on contractual arrangements with independent hospitals and other forms of co-operation between the National Health Service and the independent medical sector. The bar against co-operation with profit-making bodies was lifted. It is with some surprise that one finds in the report of the Nuffield Provincial Hospitals' Trust similarities, not differences, between the health systems and their problems. The characteristics are that the health market is monopolistic, not competitive, and the primacy of the doctor in making decisions about resource allocation operates in both the public and

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private sectors; in fact, the most important basic factors are the same.
The current debate about health policy, wherever it takes place, is against a background of severe public expenditure constraints, little knowledge about the efficacy with which health care is produced, and ill-defined distribution goals in the National Health Service. The state, in all Western countries, has given the medical profession considerable monopoly powers to influence the quality and quantity of the service and its own remuneration. The general view would be that the profession has used its powers responsibly and in the public interest, and to some extent in its own self-interest.
In both the National Health Service and the insurance system the doctor has a crucial role as an allocator of resources. In the National Health Service he decides who will be treated, and how. In the insurance system the doctor also decides who will be treated, and how. Because of his training and responsibilities to the individual patient the doctor tends to seek to maximise the benefits of health care without considering cost. As the Secretary of State commented in the foreword to his publication Health Care and its Costs, the costs of treating patients cannot be measured and the figures in the report cannot measure,
"the human care for each individual patient and the concern for quality that must be central to any health service worthy of the name".
This, inevitably, cannot be reflected in the statistics about the quantity of services increasing, as they have done, by 1·6 per cent. a year since 1976. One thing is clear: the main responsibility for cutting costs and improving productivity will lie with the medical profession. Are they really ready and equipped to do it?
The United Kingdom provident companies, about which I think we shall hear a good deal, are not fully developed insurance carriers in that their monitoring and rationing of demand is limited and unsophisticated. In the present limited United Kingdom market for private health care BUPA and the others generally meet all expenditures, and the financial burden on patients is lifted apart from their contributions. If the market for health care expands and insurers carry a wider burden of risk, escalating expenditure will lead to some devices to ration the demands of patients.
The commitment of the National Health Service as defined in the 1948 and later Acts is far wider and more comprehensive than any insurance scheme. There really cannot be rivalry between the two sectors; they are not comparable. But I believe that co-operation and the disappearance of conflict—political conflict—between them is in the interests of all. One has also to recognise the wide role of the National Health Service in preventive medicine and health education. Private health care has little or no part in this sector of the health economy, and it is of the greatest importance. The good health of our country today is the consequence of good public health and preventive measures of the past. The gap created by the loss of the medical officers of health in 1973 still remains to be filled.
The whole field of clinical research and other aspects of curative medicine are based on the National Health Service. Cancer research is primarily supported by the public sector, not the private sector, though much of it is by private funds given as voluntary subscriptions. If one had to identify the greatest needs, they are, first, the equitable distribution of resources with a greater professional, input at all levels; and the radical alteration of the philosophy behind the undergraduate curriculum so that doctors see themselves as having additional wider responsibilities, not just to the individual patient. They are responsible for the use of scarce resources, and though the circumstances are often agonising they must realise that waste means that someone else who greatly needs help gets less. The other skill that they require is linked to the use of resources and the complex delivery of medical care by the different professions, and that is in management.
It is sad to see the discussion about the public private mix for health dominated by oversimplified ideological concerns. The Nuffield investigation shows that whatever the mix-50–50, or 98 per cent. of one or the other—partnership between public and private providers is inevitable. Shifting the public/private mix does not diminish the need to regulate and control resources, and there is a good deal of evidence that partnership can be cheaper. My Lords, I beg to move for Papers.
6.18 p.m.
Lord Wells-Pestell: My Lords, it is always a delight to listen to the noble Lord, Lord Hunter of Newington, because, although we would not see eye to eye on this particular matter, he can always be relied upon to put a case much better balanced than most of us who have, shall I say, very strong opinions. The subject of this debate is of supreme importance in view of the Government's thinking in respect of the future of the National Health Service. I feel at some disadvantage because I was not able to get a copy of the Nuffield Trust report until last Saturday, and I believe that a number of my noble friends are in a similar position. Therefore, although I have read part of it I have been, and am, dependent on a wide variety of comments and observations which one has found in professional journals as well as in newspapers.
I want to make one thing perfectly clear. I do not want there to be any misunderstanding that we on this side of the House are very suspicious of possible Government action and handling of the National Health Service. We need to examine any report and any recommendations from the standpoint of the effect upon the mass of the people. I want to make perfectly clear that we in the Labour Party regard the National Health Service as the most sacred of all cows. It is our sacred cow, and woe betide anybody who attempts to destroy it, even in part. As a result of that, it is no secret that we on this side of the House view the private sector with considerable suspicion and we feel, rightly or wrongly, that, if the present attitude towards private medicine were allowed to develop without control, it could in some measure harm the National Health Service.
The Cabinet Paper which was prepared by the Central Policy Review Staff, which is not available to Parliament, suggests replacing the National Health

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Service with private health insurance. This would provide health insurance, which in turn would provide savings of between £3,000 million and £4,000 million. This was the suggestion of the Central Policy Review Staff Paper. As I understand it, the suggestion was made to try to stop poor people from under-insuring. It was also suggested that there would be a compulsory minimum of private insurance, not to mention charges for visits to doctors and even higher prescription charges.
I know that that report has not seen the light of day so far as Members of Parliament are concerned, and that to all intents and purposes it has been shelved. However, I understand that the Secretary of State for Health and Social Services has ruled out—I venture to suggest only for the time being—financing the National Health Insurance by insurance.
I was able to get a copy of the Lloyds Bank Review, and I should like to quote from it. It says:
"Public reaction was hostile and the Conservative Government responded by apparently rejecting this option"—
the option of privatisation. It continues:
"Most people believe that this rejection was a temporary measure, as the Government continue to advocate 'partnership' between the public and private sectors, and various pressure groups continued to demand 'competition' in health care markets, the 'reduction of bureaucracy' and 'greater choice' for consumers".
Nevertheless, in a speech to the Members of the Office of Health Economics on the 23rd September last, the Secretary of State made it clear that there should be an alternative to the state system. We need to remember that in health insurance systems rationing is by ability, or non-ability, to pay, and in those cases it is the poor who always suffer. They need the National Health Service and, so far as I can see, will continue to need the National Health Service.
As I say, I have very grave reservations about the private sector. In a democracy I accept that people should have the right to choose, but I also believe that in a democracy people should have the best possible care when they need it and should not have to go on a waiting list and wait their turn, which can be harmful to them. It is no good people denying that there are waiting lists, because there are. My own view is that the private sector must be rigidly supervised and controlled, otherwise the National Health Service will become a kind of Cinderella of the medical services.
My noble friend Lord Hunter of Newington made reference to pay beds and said that Bevan had to agree to pay beds. But let us be frank about it, Bevan had to bribe the consultants at that particular time and agree to have pay beds, otherwise he would never have got the National Health Service scheme through. It was not the doctors being generous: it was a bribe that he had to give way to. Already we have seen that the number of pay beds has increased by about 200 or 300 since this Government have been in power.
I think the Government sees the private medicine field as productive and the National Health Service as a drain. If we are going to have a private medical service, then we must see that it pays for the services which it uses in the National Health Service. I am sure that noble Lords are going to tell us that it does, but many of us know that it does not. I believe that there is ample evidence that the private medical services use our hospitals and do not always pay the proper rate.
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For example, pay beds in the National Health Service are not charged at their full economic rate, because overheads and capital expenditure must be taken into account, and if we are going to have a private medical service it must be prepared to do that.
The Minister might say that more is being spent on the National Health Service than hitherto, but that does not answer the fact that in some respects medical services are being reduced and wards are being closed. In fact only this week a maternity ward in one of the large hospitals has been closed—I am referring to Stoke Mandeville. Although we may be spending more on the National Health Service, we are spending more for a restricted service.
My noble friends and I believe that a second Thatcherite Government would seriously consider dismantling the National Health Service. I believe they recognise the National Health Service to be an electoral evil, but one which they have got to accept.
The Nuffield Trust report is a book of essays on the public/private mix for health in seven countries and in the United Kingdom. In view of the time, I cannot say very much more, other than that Dr. Alan Maynard, one of the principal contributors, says that the Conservative policy of a partnership between the public and private sector is little more than political rhetoric. Another contributor, Professor Culyer, a distinguished professor and scientific adviser to the Chief Scientist at the DHSS, says:
"A combination of part-time salary in the National Health Service plus private practice provides a direct incentive to generate the National Health Service waiting list in order to bolster demand for more private beds.".
I could continue to give examples of people who have given this evidence, quoting what they have said, in order to point out that a widespread development of private medicine in this country could be a liability, but I will rest there.
6.29 p.m.
Lord Wigoder: My Lords, I am grateful to the noble Lord, Lord Kilmarnock, for agreeing that he and I should change places in the order of speakers. The Nuffield Provincial Hospitals' Trust is a curious name to give a body which has never had any connection with any hospital either in the provinces or in London. It is in fact a small research organisation which occasionally produces a curate's egg of a symposium such as the one that we are discussing today. Thanks to the noble Lord, Lord Hunter of Newington, it has enabled us to have what I have no doubt will be a stimulating discussion on the relationship between the public and the private sector. In the 10 minutes or so at my disposal, I want simply to seek to demolish some five myths that are currently circulating about that relationship between the two sectors. I declare an interest as being chairman of BUPA and I shall do my best not to make my observations sound like a television commercial.
The first myth is that, in some way, the private sector wants to see the end of or to destroy the NHS. Nothing could be further from the truth. Everyone in the private sector is full of admiration for the work the NHS does. We all recognise that it is a cornerstone of the welfare state. That, I think, does not stop us from recognising at the same time that it is not in any way

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a free service. It is a service that has to be paid for; and the existing stock of doctors, nurses, hospitals and equipment will all have to be paid for, whatever system of financing it is used. Whether we finance it out of general taxation, as we do at the moment, or whether we go over to some sort of insurance-based method of financing seems to me to be a very marginal issue indeed and certainly not worthy of the furore which was caused a few months ago by the publication of the "Think Tank" report.
The second myth which circulates is that, in some ways, the private sector acts as a drain on the resources of the NHS. The fact is that, of our total expenditure on health care, 2 per cent. goes on the private sector and 98 per cent. on the NHS. It is a curious 2 per cent. that acts as a drain on 98 per cent. Of course, the NHS is short of resources and we all know and deplore that. It is partly due to the fact that we live in times of economic recession, partly due to the fact that there is an ever-increasing proportion of elderly people in the population, partly due to the rapidly increasing cost of the latest technological equipment. But the shortage of resources in the NHS is not due to the existence of the private sector.
May I give some illustrations of that? The question of nurses is sometimes raised. The facts are that in the NHS there are 430,000 nurses. In the acute private sector there are 7,500 nurses. That is a smaller number than the number of nurses currently registered as unemployed and seeking work. The figures speak for themselves. There are some 1,500 doctors unemployed at the moment. There are a large number of people who, because they are out of work, are only too happy, to obtain employment in private hospitals in the various administrative grades and all the degrees of staff employment.
The third myth, and one which I think ought to be scotched once and for all, is that private medical care is, in some ways, the prerogative of the wealthy on some sort of class basis. The facts are these. A middle-aged man can comprehensively cover by insurance himself, his wife and his children for an average cost, outside London, of a packet of cigarettes a day or, inside London, of a packet and a half of cigarettes a day. It is no wonder in those circumstances that there are some 4 million people covered by the various provident associations; it is no wonder that some 350,000 trade unionists are themselves subscribers to the provident associations and that does not take account of all the trade unionists who, very sensibly, use the Manor House Hospital, which is entirely outside the NHS. Private medicine is not a privilege in these circumstances; it is simply the offering of freedom of choice to people, the great majority of whom are in the position, if they so choose, financially to afford it. Perhaps I ought to add that slightly different considerations may apply to the extremely highly profit-motivated American hospitals which have begun to come here. But they affect only the most minute proportion of health care in this country.
The fourth myth—which the noble Lord, Lord Wells-Pestell, raised in the course of his observation—is that, because the private sector uses doctors and nurses who have been trained by the state, the private sector ought to pay the state in some way
976
for that training. This is an odd concept: that those who use skilled labour should be obliged to pay the party that has educated that labour. Indeed, the NHS itself uses a vast amount of skilled labour that comes from the Indian sub-continent. They would be somewhat startled if it were suggested that the NHS is, therefore, under some obligation to pay the governments of India or Pakistan for training the resources that are now being used in this country.
The fact is that we all recognise in our society that the state undertakes the technical training of young people and that once they are trained they are entirely free to go as they please into the public or private sector in any way they choose. I should add that the private sector recognises that there are obligations upon it to assist in such training and it does its very best to do so. I have a list here of some 27 private hospitals already, where there are training schemes in progress in co-operation with the local health and education departments, to many of which NHS staff in the vicinity and invited and take part.
The fifth myth—and that is not the easiest expression to utter in the English language—is that the private sector does not look after long-stay patients but confines itself to the short-term highly profit-making operations. The facts are simple. There are altogether 34,000 beds in the private sector; 27,000 of those beds are occupied by long-stay patients, geriatric or psychiatric; and that is a substantially higher proportion of private accommodation devoted to that end than exists in the NHS.
In my remaining three minutes, may I say just a little about the areas of assistance and co-operation between the two services. First of all, let us not overlook the fact that those who use private medicine contribute somewhere in the region of £1,000 million a year by way of tax and national insurance to the National Health Service and, for the most part, seek nothing at all in return; in other words, some 7 per cent. of the total of the NHS budget is provided by people who, quite voluntarily, do not use the NHS and who use other services instead. Secondly, the income from pay beds is £50 million per year. Thirdly, the private sector carries out approximately 250,000 operations a year. Most of those people would have to be added to the present NHS waiting list of some 750,000 if they were not dealt with in that way.
There are ways in which the private sector helps directly. The noble Lord, Lord Wells-Pestell, mentioned Stoke Mandeville Hospital, the very hospital to which, a couple of years ago, BUPA gave a quarter of a million pounds as a donation and provided the complete cost of the acute admissions ward as a gesture of co-operation with the NHS. We have given recently a mammograph machine for the early detection of breast cancer to the Elizabeth Garratt Anderson Hospital. We sponsor lectureships in medical schools. Our whole body scanner which we have in London is used frequently—and we are delighted that it should be—by NHS patients. There are some 4,000 NHS patients at this moment in beds in the private sector in one way or another.
In addition to that, the existence of the two sectors stimulates competition, competition in design and building of hospitals, competition in the use of day

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surgery, developments in preventive medicine, and so forth.
The NHS for its part co-operates, too, in many ways. We share in many parts of the country pathology facilities, we share the blood transfusion service, although a higher proportion of private patients give their blood to the blood transfusion service than the proportion of the population as a whole. I believe that the Government are right to have attempted to set out along the path of co-operation between the two sectors. It is not always easy to co-operate when one partner is willing and, sometimes, the other partner, for reasons of political dogma, is not so willing. Our experience all over the country has certrainly been that when you speak to doctors, nurses and administrators they are not interested in political dogma; they are interested in medical care, and the co-operation between those in the private and public sectors flourishes substantially and I believe that, with Government encouragement, it can continue to flourish to the great benefit of the future of medical care in this country.
6.40 p.m.
Lord Auckland: My Lords, the House will be grateful to the noble Lord, Lord Hunter of Newington, with his considerable medical expertise, for raising this very important debate this evening. I should like to preface the few remarks which I have to make with a tribute to Mr. Albert Spanswick, whose tragic death was recorded yesterday. It so happened that he and my wife sat on the same magistrates' bench; and although his views and mine, and those of many of my noble friends, will be considerably at variance, I believe the contribution which Mr. Spanswick made to COHSE and to the Health Service in general should be put on public record. I believe that the Health Service will be the poorer for his passing.
I suppose I have taken part in more debates on the National Health Service and similar Motions connected with medicine since I first entered your Lordships' House than almost any other subject. I should like to pay a special tribute to the author of this Nuffield Foundation Trust Report. Like most of your Lordships, I have read only excerpts from it because the whole document is a pretty formidable piece of reading which I, for one, in the time available would not have been able to digest.
When the National Health Service came into being, my late uncle was the Secretary of the Kingston Hospital in Surrey. He had a great deal to do with the late Mr. Aneurin Bevan, whose sterling work for the National Health Service and for medicine as a whole, in retrospect—even by those who may violently have disagreed with his views and his methods—is something for which the nation can and should express much gratitude. I recall several stories told to me by my uncle of the meetings between consultants at that time and the then Minister of Health on the vexed question of private medicine and the coming into being at that time of the National Health Service. Certainly there were acrimonious remarks made on both sides but always in the end friendliness seems to have been restored.
I do not think it is too naïve a point to make that there must be very few countries throughout the world
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where there is not some form of private health service—even, I would suggest, in the Comecon countries, two of which I have visited. For example, in Czechoslovakia and in Rumania there are clinics which are frequented by the hierarchy of those countries. Is it seriously to be supposed that if a senior minister in Bucharest were taken ill, he or she would queue up at the equivalent of a National Health Service clinic? I make this point in no sense of facetiousness but I just try to put it into perspective a national health service and a private medical health service, as the noble Lord, Lord Wigoder, in his admirable speech, has tried to show.
I know that figures can be misleading but it is an interesting point, at a time when the present Government have been accused of trying to dismantle and destroy the National Health Service—and I speak as one who, with his family, uses it and will continue to use it and, generally speaking, derives much benefit from it—that £14.5 billion will be spent on the National Health Service in the year 1982–83: that is an estimated 7 per cent. increase in manpower.
Here I should like to ask my noble friend a question, and I have not given him notice of it, so I do not expect an immediate answer. I would ask him: how much of this 7 per cent. will be reflected in the increase of nursing staffs, especially in the grey areas? I am not thinking so much of the London teaching hospitals, where I believe there are quite considerable waiting lists for nurses, but of areas such as the Potteries and the North-East, where hospital conditions are not perhaps quite so salubrious as in the newer hospitals which have been built nearer London and elsewhere. I think that is an important point.
I have myself visited a number of National Health Service hospitals. As your Lordships know, I have served on house committees of both paediatric and mental hospitals so that I have had some experience of discussions on the various matters being considered. It is a fair point, of course, that nurses in the private sector within BUPA, within Western Provident and other organisations should have in due course (and perhaps already have) their own private nursing training schemes. I have mentioned this point during discussions with representatives of these hospitals and they agree in principle.
I do think that, as in industry and in other walks of life, the training of nurses in the National Health Service should include some training within the private hospital schemes and vice versa, in order to get used to various grades of patients and of equipment. But, having said that, I have always believed, and I have always said to your Lordships, that when it comes to the provision of equipment, the National Health Service should have the first call on anything coming from private funds.
Mention has been made also of the latest Lloyds Bank Review, and Alan Maynard, who is concerned with York University—I believe on their Medical Faculty—has written a very interesting article. I must admit that I have only had an opportunity of skating over it, but I would like to quote very briefly from the final paragraph, entitled "Overview", as follows:
"The time for superficial polemics is surely over and the time for sustained research and improved management, public and private, is surely dawning?"

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Health care in this country is something of which we can well be proud; and anybody who has been to Canada, which I visited very recently on Parliamentary business, or the United States of America, and knowing the enormous costs of health care and of insurance if an accident happens, is brought down with a sober bump to conditions in this country.
It is generally recognised that the National Health Service in this country is here to stay. I believe that all political parties are committed to seeing it function in the best possible way. Co-operation between the National Health Service and private nursing and private medicine, just as in the public and private sector of industry and commerce, is in the best interests of the best results.
6.51 p.m.
Lord Kilmarnock: My Lords, it is unusual, I think, in your Lordships' House to debate a book of essays. The noble Lord, Lord Hunter of Newington, referred to it as a report, but in fact that is what it is. Perhaps this will become a precedent. I might, for example, put down Keynes' Essays in Persuasion, or Roy Jenkins' Nine Men of Power, (a very readable book), or the collection on the Mixed Economy, edited for the British Association for the Advancement of Science by Lord Roll of Ipsden, which I have just taken out of your Lordships' Library. But whether or not the practice catches on, we are grateful to the noble Lord, Lord Hunter of Newington, for concentrating our minds on an important and topical issue and for illuminating it by foreign comparisons which we do not usually make.
The only contributor to this volume whom I had previously read is Professor Culyer of York who contributed a robust essay, called Health Services in a Mixed Economy, to Lord Roll's collection which I have just mentioned. He came down firmly in favour of a National Health Service type solution, while acknowledging the role of a relatively small private sector, treating not more than, say, seven to eight per cent. of patients.
"If, for example",
he wrote there,
"it were to treat 25 per cent., as some have suggested would be desirable, that would have a creaming-off effect, leaving the National Health Service the geriatric, mental, chronic and costliest cases. It would remove most of the articulate and critical middle-class clientele from the National Health Service. It would also make the planning of an overall effective health care system a good deal more hard. In short, the market for health care in Britain performs a useful function so long as it is small …"
That is Professor Culyer's view.
The first thing to emerge loud and clear from the present collection is that a very high proportion of national income is devoted to health care and a very high proportion of the working population is devoted to its delivery in most industrialised countries. Costs are mostly within the range of 8 to 10 per cent. of national income, and health care employs between 4 and 6 per cent. of the working population. In the United States of America, expenditure rose from 5.3 per cent. of GNP in 1960 to 9.4 per cent. in 1980. Although there is a universal preoccupation with rising costs, my guess is that these orders of magnitude are
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not likely to decrease significantly. We have dramaticlly prolonged life and improved technology, but we have also raised expectations correspondingly. And though we have routed many old plagues and slain some ancient demons, the stresses and strains of modern industrial life take a different sort of toll.
The next thing to emerge from these essays is the almost universal commitment to equity in health care, at any rate in theory, whether the writer approaches the matter from a free market or a collectivist point of view. But it is pointed out by the editors on page 526 that the private solution to health care problems is unlikely to lead to the attainment of equity goals, unless purposefully directed—I repeat, unless purposefully directed. Indeed, it is another theme, running through a number of contributions, that private insurance schemes in almost all countries where they exist give rise to the need for Government regulation, and that private sector regulation tends to be more contentious and more administratively difficult—and more costly—than the regulation of the public sector. I would add, myself, that some marketeers talk of restricting Government intervention to the provision of a "safety net", but in my book a "safety net", meaning rock bottom minimal emergency provision, is not the same thing by any means as social justice for all.
I was further struck by some other considerations. Though the National Health Service has come in for mounting criticism on account of its total costs—some of it certainly justified—it remains cheaper to run than any other system under survey. Its administrative costs in the mid-1970s were only 2·6 per cent. of the total health expenditure, as compared at that time with 10·8 per cent. for France, 10.6 per cent. for Belgium, 6·5 per cent. for the Netherlands and 5 per cent. for Germany. I have this afternoon obtained a more recent figure of 3·71 per cent. for 1981–82, but the corresponding costs have no doubt risen in the other countries that I have mentioned.
Even if the proportion of National Health Service administration to total cost has crept up, it is clear that revenue collection for a tax-based system is bound to be cheaper than for an insurance-based system. There is also the question of the main cost falling on any health system, which is that of wages, salaries and fees. I am not suggesting that British doctors are greedy. The noble Lord, Lord Hunter of Newington, spoke of power used responsibly by the profession, and I think that this is an entirely justified claim. But it is not unnatural that any professional group in a monopoly position should seek to increase its earnings, and in my view professional monopoly is best balanced by monopsony—that is, the sole or predominant buying power of the National Health Service.
The state is not of course the employer of doctors—they have, very understandably, resisted this—but it is by far and away the largest agency with which they can contract and this arrangement is almost certainly more cost-effective than a plurality of insurance schemes bidding against each other. In his essay, entitled The Semantics of Health Care Policy, Gordon Forsyth reminds us on page 73 that:
"In Europe, governments of countries with insurance-based health service systems are not yet in a position to control costs".

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Your Lordships might say: does that matter? Why should people not invest as much or as little as they like in their health? This is a free society. The noble Lord, Lord Wigoder, has made an extremely good case for the activities of BUPA. He made the very fair point that the private sector provides 7 per cent. of National Health Service income but makes no claim, or only a limited claim upon its services. Certainly I agree with him that the present "mix" is perfectly satisfactory in our society.
One of the problems, I think, is that if we have a great extension of insurance-based schemes, employers, finding that they have to foot a part of their employees' health bill, either will turn to more capital intensive forms of production or will claim compensation or relief from public funds. I was interested to read, in the essay by Mr. Walter McNerney from the United States in this volume, (his subject was the control of costs in the United States of America) that the chambers of commerce in that country regard health care expenditure as their number one problem. We have not reached that point in this country, but it is possible that widely extended privatisation could create similar problems for the CBI.
I did not scour these essays for reasons against a major switch to an insurance-based scheme, or schemes, in this country. I read them, I hope, objectively and in search of enlightenment. The arguments I have just deployed are just some of those which rose to the surface and lodged in my mind. It also struck me forcibly that my party's commitment to a health policy rather than a sickness policy—that is, preventive medicine, early screening, primary care, et cetera—would not be helped very much by a widespread extension of unco-ordinated private health schemes, whose accent would essentially be on sickness and repair rather than on a positive promotion of health. I have no particular quarrel with other versions of the public-private "mix" which have developed, for historical or other reasons, in other countries, but I could not find in this volume any very good reason for a major switch away from the current balance in this country.
For these reasons, I support the statement in our White Paper that:
"The SDP rejects on grounds of both equity and efficiency any plan to dismantle the NHS and replace it with an insurance-based scheme".
This does not mean that we would seek to abolish the private sector, but we would seek to ensure that the development of the private sector did not make it more difficult for the National Health Service to achieve its aims and that resources mobilised by the private sector were additional to those of the NHS, rather than merely representing a shift from one sector to another. We agree, in fact, with the policy option advanced by Professor Rudolf Klein in his essay in this volume, entitled Private Practice and Public Policy: Regulating the Frontiers. This would involve the revival of something like the Health Services Board, of which the noble Lord, Lord Wigoder, was a distinguished chairman, which operated from 1976 to 1980. But to avoid over-centralisation it would now have an appellate function only. All proposed developments in the private sector of health would be subject to regulation by the district health authorities
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to ensure that the two sectors are genuinely complementary, with the health services board acting as a final court of appeal in case of dispute.
Finally, I return to Professor Klein's contribution. On page 125 under the sub-heading Where is the Critical Point? he points out that public policies designed to encourage the growth of the private sector are substitutable, in terms of their effect on the PBSR, with expenditure on the NHS. He goes on to ask:
"At what point, then, does the active encouragement of the private sector threaten the survival of the NHS as a viable institution? The same point can be made in political, as well as financial terms. At present the private sector acts as a useful safety valve for the NHS … But if the private sector continues to grow, the risk is that the overflow mechanism may turn into a waste-pipe: that the exit of the most articulate, politically resourceful customers of the state sector will drain away effective political support for it. This would suggest that there is a point at which the growth of the private sector would threaten the whole balance of health care in Britain. tilting it away from the social equity model to the market model."
We would restrain private growth well before such a point is reached. What I want to ask the noble Lord, Lord Trefgarne, when he comes to reply, is: where do the Government situate Professor Klein's critical point?
Lord Denham: My Lords, before the noble Lord, Lord Prys-Davies, begins his speech, it might be worth while reminding your Lordships that this is a Short Debate. We are not running very much overdue but we are running at an average of 11 minutes per speech and this should be 9½ minutes if every noble Lord is to have his say.
7.1 p.m.
Lord Prys-Davies: My Lords, I value the essays very much because they have identified in an objective sense the problems which face all the health care systems, be they private or public; and they have established in an objective way that the major problems are common to all health systems. Those problems are efficiency, escalating costs, limited resources, an unequal distribution of services which favours the better off and some groups and regions at the expense of others, and unlimited demands from the medical profession and from the public.
One of the lessons of this book is that there are no quick solutions. The NHS is a huge vessel which does not respond quickly to the rudder. Neither are there any easy or simple solutions. The other day the Secretary of State for Health spoke of the,
"immense contribution that can be made by private health care".
The other day the Chancellor of the Exchequer advocated that private provision,
"can supplement or in some cases, possibly, replace the role of Government in health".
I prefer to return to the objectivity of the Nuffield studies. The Nuffield authors are clear in their advice: it is simply not sufficient to pledge more support to private practice. They hammer home the point that more privatisation may well be completely irrelevant to the problems of the NHS. But neither must we on these Benches be complacent about the public health care system. There are difficulties which we have to face.
These are the critical question which arise from the studies. How can one close the gap between the supply

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of health care and demand? How can one facilitate equality of access to the health service? How can one improve its efficiency at the point where it all happens—at the surgery, the clinic, the ward, and the theatre? The answers have eluded us. They have also eluded health services across the Western world.
The way forward is not easy. I shall not concentrate on destroying five myths: I shall concentrate on constructing five signposts. First—and the noble Lord, Lord Hunter of Newington, has already made this point—the doctor must appreciate that he is not a law unto himself. The influence of the medical profession within the service, quite naturally, is of necessity overwhelming. It calls the tune. But most doctors do not think in cost-benefit terms. We know—and I know this as the former chairman of a hospital regional hoard—that there are wide variations in the workloads of doctors involved in the same speciality and doing the same kind of work.
But the system has to follow the doctor. It is estimated in the studies that each United Kingdom consultant makes decisions which may cost the NHS about £500,000 a year. Herein lies the main awkwardness of the health system. But for how long can the clinician remain a law unto himself? The editors conclude that clinical freedom, interpreted as the freedom to do that which is best or convenient to the doctor and be subject to no appraisal, is probably in the process of ending. That may be over-optimism on the part of the Nuffield essayists—indeed, they put it bluntly:
"It is necessary to establish health profiles so that the characteristics and costs of medical practices of individual doctors can be identified and any 'deviance' from practice norms 'remedied'."
That is challenging language. It is new language; but I believe that it makes common sense.
The authors plead for a place to be given in the curriculum of every teaching hospital to educate medical students to think in cost-benefit terms. This point has been made very well by the noble Lord, Lord Hunter of Newington. I should like to ask the noble Lord the Minister: is the Secretary of State pressing this case on teaching hospitals regularly? Secondly, we need to develop an efficient management structure serviced by adequate information. Throughout the book a great deal is made about the need for appropriate information flow if informed decisions are to be taken. However, I am racing against the clock and will not elaborate upon that point.
Thirdly, much depends upon competent and imaginative managers at all levels within the system. This calls for a questioning and yet constructive approach; and it calls also for vigorous leadership. Many questions come to mind. Is it necessary for clinics to be called for nine o'clock although the doctors will probably not turn up until half-past nine or quarter to ten? Is it necessary for a patient to be hanging around the clinic for about three hours before he is seen? We know this happens. How can we reshuffle resources in order to prevent a build-up on the waiting lists of two years or more? Some noble Lords may ask: to what extent can a non-commercial organisation produce greater incentives to make the best possible use of resources? I turn to the objectivity of the book. The experience of this book shows that
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the private sector is probably less efficient in the use of resources than is the public sector.
The fourth signpost is that central Government must play a more active part in monitoring the performance of their agents. In the debate on the partially deaf a few weeks ago I mentioned the district in Wales where people were kept waiting for two years between referral by their GP and an appointment with a consultant. I was told then, in effect, by the noble Lord the Minister that this was a matter for local management. But surely there must come a time when the central Government department, be it the DHSS or the Welsh Office, must intervene to see whether more effective use can be made of resources. If a two-year waiting list does not justify intervention by a central Government department, at what point will central Government consider that intervention is justified? Will it be when the waiting list reaches three years, five years, or even longer? Notwithstanding the pressures from the Committee of Public Accounts, it is still not clear to what extent central Government are playing an active part in monitoring the performance of their agents.
Fifthly, the service needs to encourage innovation in preventive measures. In a free society that can never be easy, but we already know that the beneficial results of seat-belt legislation are dramatic on the workload in the accident departments.
Finally, the major worry facing the NHS during the next decade is the ageing population. To meet the foreseeable demand we need to increase the whole range of services—day hospitals, community services and beds—and to mobilise the services of voluntary organisations. But we should also be asking whether the service is equipped to pioneer and to experiment in the care of the elderly. The NHS is right to ask for every penny that it can possibly get, but the justification for such a demand is to ensure that we are providing best possible value for money. The service must be planned so that we can make the best possible use of its resources. While this begs the crucial question of how we achieve this end, it is now clear that it is in this direction, and not in the reshuffling of the mix of public private health, that the health systems must now proceed. To this end we must will the co-operation of doctors, nurses and managers.
7.12 p.m.
Lord Richardson: My Lords, I wish to speak upon one point and one point only, but it has a direct bearing on the private/public mix. It concerns private practice within the NHS hospitals. I wish to make it quite clear that I am unequivocally committed to the continuation of the NHS, and have spent my life in it. My views are, therefore, entirely based on my wishes for the prosperity, in a wide sense, of the NHS, and they are not influenced by any interest in private practice, although I have practised privately and in hospital. Simply expressed, I am convinced that private practice within the NHS is for the good of the NHS and its patients.
Section 5 of the 1946 Act allowed part-time contracts for consultants and made provision for pay beds. The noble Lord, Lord Wells-Pestell, attributes this to successful blackmail upon Mr. Aneurin Bevan.

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I take a different view of Mr. Aneurin Bevan's character and ability. I think it was because he was a very intelligent man; and in fact he said that he wished to keep the best specialists in the hospitals so that they worked there and did not dissipate their time in travelling around to private hospitals and to nursing homes. He was perfectly right, and in the early days of the National Health Service, when we had a small number of contract periods—half-days, or whatever they were then—the National Health Service benefited quite enormously from a very large amount of time that was put into the hospitals by those very part-time consultants without them really noticing it; and this was possible because they could see their private patients and could go back to the wards, or see them after their clinics, and not watch the clock in any sense. His concept was years before the term "geographically full-time" became widely canvassed; namely, to keep people in one place—not to waste their time but to allow them to distribute their time properly to their private patients and to their hospital patients, and what was left over would doubtless go entirely to the hospital patients.
The new contracts for consultants of 10 per cent. of their time to be used as they wish only strengthens the case for this concept. The noble Lord, Lord Wigoder, has told your Lordships most fairly of the advantages that BUPA and like organisations can provide. I will not, therefore, touch on any material matter; I will touch on a more subtle one, and that is the promotion of goodwill—goodwill for the hospital, and even fame for it. This can be the more easily promoted by the intimate nature of the contact, and the expenditure of time, that is possible for private patients—time over and above that which is technically required to be given, and which I believe is practically always given, of course, to all patients.
Why should the goodwill, the influence and the fame be debarred to the National Health Service? Such goodwill can only lead to support in a material sense for appeals for research and the provision of personal services—personal service that can lead to so much interest and to local pride. Of course, the National Health Service can provide such service and promote such local interest; of course it can. But it would be idle to pretend—and your Lordships' House would be the last place in which anybody would be so stupid as so to pretend—that influence does not bear some relation to the position of those who will exert it. Although, as the noble Lord, Lord Wigoder, has said, the private sector is not the sole province of the wealthy or the powerful, it has a large proportion of influence in it.
This goodwill is no small thing. It can be a very present help in trouble. But it must be goodwill that is not earned at the expense of promoting bad will within the hospital itself. I think it is hardly surprising that there was a considerable degree of bad will in some quarters to private medicine within the hospitals when no local advantage at all was apparent to those serving in the hospitals. The money went back to the anonymous source—right to the top; right back to the Treasury. I think it is essential that if the private practice of medicine in hospitals is to continue, to the benefit of the NHS, the staff should be aware of the benefits to them, to their patients and to their own hospitals.
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I hope that the Minister will be sympathetic to this particular point, and, indeed, to the general one that private practice should be encouraged actively within NHS hospitals, and not encouraged solely outside them. I feel very strongly that the NHS benefits from private practice within its walls. I have 35 or more years' experience in this matter, and for that reason I feel justified in putting it to your Lordships in, I hope, fairly strong terms.
7.19 p.m.
Lord Ardwick: My Lords, I must thank the noble Lord, Lord Hunter, for introducing this subject for debate. I myself had the idea of doing the same thing, but I did not quite see the way to do it; I was not bold enough. But, as there has been some suggestion that it is an innovation that we should debate a book of essays, I may say that I have a dim recollection that many years before I came to this House a book of essays was debated under the leadership of the noble Lord, Lord Walston, who organised a team each of whom took one chapter of the book. Thus he got a highly structured debate. I am sorry that we did not have time in this short debate for any such device to be adopted.
I have a much softer spot for this report, and for the Nuffield Hospital Provincial Trust, than has the noble Lord, Lord Wigoder. I worked for it over 25 years ago, when we had joint staffs for the Nuffield Foundation and the Nuffield Hospitals Trust. But for a quarter of a century the trust has been an independent body professionally headed by Mr. Gordon McLachlan, one of the editors of this efficient, sensible and useful volume.
The work of the trust has changed. It was wrong of the noble Lord to say that it has no connection with hospitals. It has been intimately connected with hospitals over the years. It is now largely a research organisation, it is true, but in the easy years when there was not so much pressure on resources it could explore the possibilities of improvement in the hospital services. If adopted, these inevitably added to the costs of the National Health Service. In these days of financial restraint the trust is more concerned with the best use of limited resources, and it is very much concerned with the health of the health service, including its mental health. For controversies, charged with emotion, such as have arisen in recent years, must affect the morale of the staffs of the Health Service; and the efficacy of its services is largely dependent on the maintenance of a high morale.
The hospital service is labour intensive. In times of inflation the wage bill becomes, inevitably, an increasing burden and when cash limits are applied the staffs must see either a decline in their relative pay, or a decline in their numbers. One can understand the fears and the anguish that they have shown in recent years.
As this study reminds us, the problem was once to ensure that the health service retained its share of an increasing GDP. The new problem is whether the NHS can increase its share of a static or a falling GDP. This study shows that the problem is not just a British one. It is universal to the Western world. It exists in every country, no matter what national health system

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they have. It is rendered more difficult because neither the customers nor the medical people who operate the health schemes are responsible for paying the bills. They are not responsible for the costs.
The study we are reviewing today is most useful to those of us who are not or who are no longer experts on the health service. All our welfare services confront the thoughtful citizen with difficulties, since one administrative change has followed another and particularly, say, in the case of housing, one piece of legislation has been built up on top of another. In the end, only the expert can find his way through the maze. The ordinary intelligent citizen can do little more than speak out of his limited personal experience.
This book is of enormous help to everyone who is not an expert but who wishes to concern himself with policy. For a start it shows that there are no simple solutions. One cannot sell off the assets and privatise the hospital service. Nor is there an acceptable solution by way of social insurance. That would just add to the costs and add to the complications. And, because it would be regressive, it would make the poor poorer. As regards private insurance, this too could touch only the corner of the problem but the size of this corner is of absolutely supreme importance.
Private medicine, as one of these writers suggested, might be the tempter in the National Health Service's Garden of Eden. Yet it must be tolerated. People will always insist on being free to spend their own money on their own bodies, even if it includes such bizarre means of treatment as getting a Chinaman to stick little needles into them or buying some kind of witches' brew from a herbalist.
The danger is, as one of the authors points out—and here I, too, shall quote the words so appropriately quoted by the noble Lord, Lord Kilmarnock—that private medicine, acceptable as a safety valve, could grow to be a wastepipe, the exit of the most articulate and politically resourceful of customers of the state sector, and could draw away public support for it. That is the danger and that is the fear that we have on this side of the House.
I am very glad to say that the editors of the study do not believe that that is likely to happen. They reach the rather cheerful conclusion that:
"After reviewing the evidence"—
and they are perhaps the only ones among us who have read all the 250,000 words of this great book—
"we both feel that despite its faults, the variety of complex services which is termed the National Health Service constitute a unique and precious national asset. It provides basic services of a high standard at a very low proportion of GDP compared to other countries. Above all, it retains a vital core of the ideal regarding equity in service with which it was launched in 1948".
Finally, the authors conclude:
"The fears of any dismantling of the NHS, or the slipping eventually into a two-tier system, whatever that may mean, are to our minds ill-founded given the present proportion of the mix and the nature and order of private service likely to be developed in the foreseeable future".
When I see the provident associations going out trying to recruit wholesale I sometimes fear that this corner could easily become too big, but the authors of this book do not. I hope they are right. They would prefer
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a partnership between the private and the public sectors rather than separation; a separation which is in vogue today. The challenge as they see it is to find the right mix. That, of course, is the problem—it is by no means the solution.
The Lord Bishop of Norwich: My Lords, before the noble Lord sits down, does he feel that his phrase "a witches' brew' from a herbalist" may have been a hyperbole about a particular item that might be obtained at a herbalist and did not seek to smear the whole health-giving useful homoeopathic work of other herbalists?
Lord Ardwick: My Lords, I regarded that as a piece of verbal fun and not a serious charge.
7.29 p.m.
The Countess of Loudoun: My Lords, although the private sector is more likely to be concerned with acute surgery than with chronic illness, there is clearly a certain amount of private enterprise in caring for the elderly and mentally ill. There are a few voluntary and private homes caring for a considerable number of these patients. Due to the failure of the National Health Service to provide sufficient beds, many elderly people or their families are making their own arrangements to use private nursing homes. But statutory authorities are also using these places, sometimes at the client's or patient's own expense, owing to this lack of sufficient NHS hospital beds. According to the most recently published figures from the DHSS, in 1975 there were more than 22,000 elderly people living in registered voluntary homes and a further 19,000 elderly people living in registered private homes.
At present the private provident associations exclude many chronic cases and the elderly from their services. There is also the problem of mentally handicapped people who are refused admission to a hostel over the age of 55 but who do not qualify for a place in an old people's home for another five or even 10 years. The DHSS is currently reviewing the statutory control and supervision of both voluntary and privately run old people's homes and nursing homes. A working party on services for elderly people, set up by the Personal Social Services Council, has also pressed for a revision of both the legislation and existing regulations. Ideally, revised legislation and regulations should take account not only of broad physical provision but of all factors which affect the quality of life for residents.
There are discrepancies in what is provided. What is now needed is an urgent look at the overall mix of private and public sector, as both are vital. Without the private sector, the National Health Service and local authorities would be swamped. We have the finest National Health Service in the world and now is the time to examine it to improve standards and to make sure that our resources are being used in the best possible way.
7.31 p.m.
Lord Rea: My Lords, I think that the noble Lord, Lord Hunter of Newington, has been very ingenious—or perhaps I should say canny—to bring in

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a debate on the question of private practice by citing this book. I think I would like to thank him, because it has stimulated me to try to read it. I cannot say that I have been very successful: it is eminently respectable academically but pretty tough going for a non-economist. A general conclusion of the series of essays is that our system is much more economical than others in terms of cost in relation to gross national product, and no less efficient. It also seems that there is less continuous confrontation between the Government and the medical profession here than in most of the other countries, as the noble Lord, Lord Kilmarnock, has mentioned. I think that Aneurin Bevan's shrewd deal with the medical profession at the beginning of the National Health Service has turned out to have been both far-sighted and largely acceptable and workable.
The fact that in our National Health Service no money changes hands at each consultation or for each investigation, treatment or operation has not only saved administrative costs but has also led to economy in the use of clinical procedures and tests. It has also greatly improved doctor-patient relationships. In those countries where a fee is paid for each consultation or procedure there is a tendency for these to multiply and costs to escalate. There has been a greater tendency for costs to rise in those countries where the services are run by the "providers" than in this country. Over the last decade in all the countries described, Governments have had to step in with more and more regulations to curb the escalation of costs, so that the freedom of private medicine has more and more been curbed. Doctors' incomes in several countries have also been curbed, so that they are rising less than the national average.
In this country private practice, although still used by a very limited proportion of the population, has grown because of the difficulties facing the National Health Service. I suggest that these are in three main areas. The first two are largely due to under-funding. First, there is the speed of access to specialists and for non-urgent operations: in other words, the existence of waiting lists. Secondly, there is the lack of comfortable amenities and privacy for hospital in-patients. Thirdly, there is the difficulty of guaranteeing that one is to be seen or operated upon by a particular physician or surgeon. It is in fact questionable whether the actual treatment received is any better from a private doctor. It may in fact be worse—for instance, through less good post-operative observation in a single room rather than being in an open ward—but it may be more convenient and it may be done in "nicer" surroundings.
I consider that one of the most damaging results of an increase in private practice is that it leads to the exit of powerful voices which could effectively insist on National Health Service improvements. As Professor Bob Evans of the University of British Columbia writes in the book:
"Those most likely to exit are the wealthy, the well-informed and articulate, the politically most influential, the loudest voices".
He goes on to show how in the United States the Reagan administration is able to slash funding for social programmes, including Medicaid, because its beneficiaries are a minority of the population: poor,
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black and generally voting Democratic, if at all. He goes on to say:
"When we are all in the same boat the boat is maintained more carefully".
A further important objection to an increase in private practice is that it is socially divisive and may lead to a two-tier service, as has been mentioned by several speakers. Many middle-class people, and Members of this House, are full of praise for the skill, care and humanity with which they have been looked after in NHS practices and wards. When facing a common enemy—and here I am talking about ill-health and not the ward sister!—class barriers fall away.
It seems clear to me on reading the book that it would be more economical in terms of national resources to improve the National Health Service than to allow private practice to fill in the gaps, as well as being fairer and more socially cohesive. There is still much scope for increasing the efficiency of the National Health Service. This is particularly necessary now when we are in a period of slow economic growth. General practitioners, for instance, it is estimated, each cause approximately £100,000 to be spent per annum, while their own income is only one-fifth of this. As my noble friend Lord Prys-Davies has said, hospital consultants are thought to spend nearer to half a million pounds on more highly technical procedures. Other speakers, particularly the noble Lord, Lord Hunter of Newington, have mentioned how important it is that in medical education the economical use of scarce resources should be presented to students and that all procedures should be looked at from the point of view of cost benefit.
I have spoken in a previous debate about the need to identify and use incentives for good general practice, and the same applies—and perhaps even more so—in hospital. If doctors can practice good medicine, but spend measurably less National Health Service resources than average, could they not be rewarded? As a start, it would be very useful for all doctors, as my noble friend Lord Prys-Davies has said, to be given fuller details of the expenditures which they incur. A start has been made with hospital activity analysis, in which consultants arc given details of various aspects of their work, including the average duration of a patient's stay in hospital.
But with electronic data processing, all doctors could be given breakdowns of their activities: the number of patients seen, the number admitted to hospital, the drugs prescribed, investigations, treatment, operations, and many other things. These could be costed where appropriate. Clinical behaviour tends to change when this sort of comparative data is given. I think that the medical profession is now ready to participate in this sort of auditing activity, but it needs help and encouragement from the Department of Health.
Finally, I should like to quote a passage from the conclusions in this book. The editors state:
"The National Health Service constitutes a unique and precious national asset which provides basic services of a high standard at a very low proportion of the gross domestic product compared to other countries. Above all it retains a vital core of the ideal regarding equity in service with which it was launched in 1948".

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We have an opportunity to improve, and not to destroy, the National Health Service. Let us not waste this chance. It may be the last.
7.38 p.m.
Lord Hayter: My Lords, I was reminded by the debate before this one, on economics, of the time when I went to take my tripos examination and was met outside by Professor Clapham, one of my lecturers, who asked me why I looked so worried. I said, "Well, I do not know what the questions are going to be". He said, "My dear chap, in economics the questions are always the same; it is the answers that are always different". The same thing is true of health.
Over the years of the King's Fund, about every second year we have had a conference of European countries—sometimes as many as 17 of them, with people from behind the Iron Curtain. There you have the same patients and the same illnesses, but the ways in which those patients and those illnesses are coped with differ widely one from another. That was why I was so interested in this particular debate. The one point that is common to all these health services is contained in the wise remark that the noble Lord, Lord Porritt, made to me a long time ago: that there is no country in the world that can afford the health service that it wants. I am sure that that is still true today.
In connection with the book which we are considering, there were two statements that struck me. One was that,
"private medicine excludes many chronic cases and the elderly from their services".
Some people have already given the lie to that one. Another statement reads:
"In all technically developed countries, no matter how the medical services are financed, governments have continued to support the poor, the elderly and the chronic sick".
That is not absolutely true.
If there is one certain thing in this uncertain world, it is that we are all going to die; and as Dame Cecily, Saunders says, there is a right for people to die in dignity, surrounded by those who can provide tender, loving care. That brings me to my only point in connection with the debate, and it relates to the hospices that have grown up in this country. To my surprise, I find that there are 63 of them already in being, and that another 40 are in the pipeline. I find it very difficult to understand the policy regarding the grants made by the department. I am told that an average hospice would cost about £2 million, and I can quite understand that the department can truthfully say, "That is a private affair, and if you want to raise the money that is up to you". It is when it comes to the income side that I become so confused. I looked at an extract from Charity Statistics, and it was very difficult to tell what grants were going from the department to the separate hospices.
There was a lot of talk the other day about lobbying. I have not been lobbied at all. I merely have friends, as perhaps have other noble Lords, who have been mixed up with hospices. I am thinking of one hospice in particular, which is in the process of raising its £2½ million. Those involved in the hospice are saying to
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me that surely it is possible to get from the Government an indication of the income that will be provided from the department when the hospice is a going concern.
It may well be that in these days of economies the department cannot give that indication, and it might say that it will have to consult individually. I do not quarrel with that at all. But I believe that it is logical, reasonable and common sense that if a venture such as this is going to help people—and, incidentally, help the National Health Service, too—those involved have almost a right to obtain from the department an indication of the help that they will receive in due course.
It may well be that in some areas the surrounding hospitals can cope with the problem, though I doubt it myself because, as I understand it, a hospice is built on the supposition that the care of the terminally ill involves a very high ratio of nurses to staff it, which cannot be duplicated in the average hospital. So I would appeal to the noble Lord the Minister to try to give some guidance on what is the best way of indicating to the individual hospices as they are being developed how they will be able to manage in the future so far as their income is concerned.
7.44 p.m.
Lord Colwyn: My Lords, I am very pleased to be able to take part in the debate this evening. I have to say that, owing to having had rather too many patients this afternoon, I must apologise to the noble Lord, Lord Hunter of Newington, for not hearing his introductory speech, and also for missing the speech of the noble Lord, Lord Wells-Pestell, whose opinions I highly respect, but do not necessarily agree with. I have not been able to read the entire publication, having managed to obtain my copy only on Monday; and I must apologise for perhaps using my notes a little more often than I usually do.
I agree with the general recommendation of the publication relating to the need for constant review of total health services and the co-ordination and improvement of specific areas of service. The document tried to give us some advice for the future, and, while the authors confirmed their faith in the National Health Service, it was quite clear that they did not envisage any extra resources being available from the Government, despite constant calls for more money.
Our goal must be to use the money available more effectively, to control expenditures, increase efficiency, of services, and ensure equity of distribution of health care. However, provision of health services, is, and will become, an increasingly major cost to the taxpayers, whether it is under private insurance, or within the NHS. It is important to recognise that private health insurance companies are primarily a distribution agent for monies collected for health costs, and that increasing payments to medical care will equally affect the taxpayer's pocket, whether it is via the private system or the NHS.
I have to point out to the Government that under our present system of health care, which has its accent totally on the treatment of disease, the future appears extremely bleak. I do not have the exact figures, but

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the Government will be aware that a large number of our present population was born between 1946 and 1951. When in the next 10 to 15 years these war babies reach the age of chronic disease, the costs to the NHS and to the private insurance companies will rise dramatically. The increase will fall directly on the taxpayer, whether it be under private insurance or within the NHS. It is clear that it is the relatively healthy 30- to 40-year-olds who are subsidising, and will continue to subsidise, the more senior members of our society. In 10 to 15 years' time, these individuals must carry much of their own burden, because the future group of 30- to 40-year-olds will be substantially smaller.
I should like to give some advice to the Government, and I would recommend that they investigate the following four specific ideas in their consideration of the document which is the subject of our debate this evening. First, I suggest the production of a public education television series on disease development. The purpose of the series would be to inform the people of this country so they may be able to detect disease problems and consult their physician before major and costly medical care may be needed.
Secondly, I suggest that a further television series could be developed on the subject of home self-care. The purpose of the programmes would be to provide the public knowledge which would be self-administered by the patient to improve the chance of maintaining health with appropriate supervision and dialogue with his family physician. The television series could be created by a re-allocation of priorities within the budget of the BBC, with little, if any, immediate additional cost to the Government, and the series could be re-utilised within the public education system to ensure continued awareness of methods to prevent disease. Not only would such a series potentially reduce health care costs; it could also increase the productivity of our workers by substantially reducing the number of days away from work.
Thirdly, I suggest that the Government promote the scientific testing of existing drugs for the purpose of preventing disease. Some existing medications have effects on physiological functions which logically suggest that these drugs might create a human environment which will be better able to resist disease and increase tolerance to stress. In the past, extensive research has been conducted to treat disease. I suggest that efforts be made to utilise the same resources which have produced such superb methods to alleviate pain and suffering to develop applications which increase the quality of life and reduce the burden of health cost to the taxpayers.
Fourthly, I suggest that the Government promote the scientific evaluation of existing medical procedures that might be used to prevent disease progress. In the past, medical intervention has been focused on the time of greatest need, and care of the patient has been postponed until the individual perceived treatment was absolutely necessary. Perhaps the notion that an ounce of preventive maintenance saves several pounds of cure is as important a concept for the human organism as it is for the safety of aircraft travel.
In summary, I suggest that the Government direct their energies to prevention in health care, in a similar spirit to my own profession of dentistry. I suggest that
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physicians should be responsible for the treatment of disease while I encourage the people of our society to be better educated and motivated to be responsible for their health.
7.51 p.m.
Lord Wallace of Coslany: My Lords, I am sure that the House will wish to thank the noble Lord, Lord Hunter of Newington, for raising this debate. There has for some of us been a difficulty. I must apologise to the noble Lord. The noble Lord, Lord Colwyn, only obtained his copy of the book on Monday. My noble friend Lord Wells-Pestell seems to have been very devious and got his on Saturday. The books arrived in the Printed Paper Office only late on Friday afternoon. There was one copy in the Library. During the Recess, when I saw that this debate was to take place and guessing that I would be appointed to deal with it—I nearly said "lumbered"—I rang up the Library. I was told that there was one copy, that it had already been taken and that I came second on the list. That copy has not come back. I notice that the borrower has not even put down her name for the debate, so I do not know what has happened to the book. I have, however, been able to scan it. Thanks to my thoughtful and caring bank, Lloyds Bank, I was sent a copy, as a customer, of its review. An article written by Mr. Alan Maynard, who has also contributed to the book, gave me a useful outline. So far as delay in getting copies to Members is concerned, I wish to put on record that it is no fault of the officials of the House. Our respected Clerk of the Parliaments gave permission for copies to be obtained but the publishers did not send them until the last possible moment. I shall now take away a valuable book for further consideration.
What we are debating is not new, inasmuch as the public and private mix of the Health Service is already taking place in fairly considerable measure. I would hazard a guess that a sizeable majority of consultants with NHS contracts for specified hours are now considerably active in the lucrative private field. One cannot blame them, and I do not blame them. They have the skills and take the opportunities to obtain additional financial advantage. That is fair enough. I make no complaint whatever about it.
It is, however, a fact—I have given some degree of notice of this matter to the noble Lord, Lord Trefgarne—that, in many cases, NHS property and facilities are used for examination and tests of private patients: for example, physiotherapy, pathology and X-rays. This takes place in fair measure in a large number of hospitals. Of course, the consultants are not pursuing this work in their own hospital time. It is done, shall we say, for the sake of a good expression, during their free time. This involves expense. It may be possible for the Minister to say what charges are recovered by the NHS for such use of facilities and on what basis. It would be useful and helpful if he could give the total income received nationally each year from such charges. I am assuming that charges are made, because I believe that they should be made.
I have stated already that consultants, through their skills, have the opportunity to obtain further financial advantage. I wish to stress, however, that no financial advantage arises for other hospital staff providing

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facilities and services for private patients in the NHS. It has to be faced that the majority of such staff are underpaid compared to those in the private sector. New private hospital facilities have expanded rapidly. Indeed, they have expanded to such an extent that saturation point is possibly close. Here, I should like to raise a further point of which I have given notice. It is a serious matter.
I make no apology for raising an issue that is causing considerable concern in the area where I live. Situated in the grounds of Queen Mary's Hospital, Sidcup, is a mansion dating back to the 1600s. Frognal House is a listed building which, at one time, I believe, was the residence of the Sydney family who founded Sydney, Australia. It is a health service property. Problems have been experienced with the Department of the Environment in getting adequate repairs carried out. Eventually, a commercial arrangement was made by the regional health authority. A conversion was recently carried out, at a cost of £700,000, designed to create offices.
Now, however, the leaseholders, Housetrend, want permission to hand it over as a hospital for paying patients to a company called Hospital Capital Corporation Limited. This move is described by the Kentish Times, our local newspaper, which is certainly not politically biased, as an insult to Queen Mary's Hospital, where appeals for new equipment are being started all the time because, as the newspaper states, it is underfunded by a Government that pays lip service to a National Health Service. Those are the words of the newspaper, not mine.
I can vouch for the local efforts made in the area, which is not exactly wealthy. The Friends of Queen Mary's with whom I am associated—in fact, I am president—have raised about £80,000 in the last five years. Many hundreds of thousands of pounds have also been raised by numerous other efforts to provide much needed equipment that is not available due to lack of public funding.
The response has been simply magnificent. The hospital has gained the admiration and the support of the community. That is good. The Bexley District Health Authority is appalled by the plans and has expressed unanimous opposition. But the decision rests with the South Eastern Regional Health Authority. I take the view—rightly, I think—that the decision should be taken by the Minister following an inquiry locally. I am sure that the great majority of people in the area, which comes under the Bexley health authority, will simply not agree to, or support, such a venture. It is a proposed public-private mix of the worst possible type, constituting, as it would, a grave conflict for nursing and ancillary staff. It should not be forgotten that it is situated a mere few yards from the magnificent new hospital that we now have.
It is an insult to all those many people who have given effort, time and sacrifice to raise funds for a hospital endeavouring to maintain its high standards in spite of enforced financial cuts. The hospital staff, from consultant to ancillary, are giving a magnificent example of providing efficient assistance and service under extreme financial difficulties. I pay them tribute. In the industrial dispute that took place not long ago,
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which was, of course, regrettable, they did little to become involved. They gave their service to the hospital willingly.
The private hospital obviously would be an investment for financial reward, as indeed most are these days. In the main, they are not charitable organisations. I am sure that the noble Lord, Lord Wigoder, will agree that even BUPA has to pay its way and show a reasonable margin to operate. If people wish to pay for private treatment, I say emphatically that they are entitled to do so. Indeed, this is not the first time that I have said so. This is a country where one can choose and the choice is up to the individual. But the main benefit would be priority, however minor the medical need. To my mind, the standard of treatment would be no higher than in the National Health Service, where our standards are high and administration costs lower than in the majority of other countries. Two noble Lords at least have mentioned the summing up in this excellent publication and in the Lloyds Bank Review about the high standard here as compared with that in other countries.
It is fair comment to say that the advance of the private sector has been encouraged by the Government, in that, although claims are made that more is being spent on the National Health Service, widespread closures of hospitals and reductions of services are still taking place, which in turn obviously extend waiting lists and provide a ready bait towards the private sector. I say that in no derogatory way.
At present, private health care premiums can be offset against tax only for those earning less than £8,500 per annum—a policy which in 1982–83 will cost an estimated £4 million. To extend this would be a retrograde step as it would widen still further the social gap between the rich and the less well off. Even so, £4 million is lost to the Exchequer and indirectly—it is fair to say—to the National Health Service.
It is possible for both public and private sectors to develop a degree of co-operation in an exchange of facilities but not at the financial cost of the National Health Service. Co-operation is possible. I personally would not rule it out at all. But it must be very carefully worked out so that the National Health Service does not suffer financially.
As has already been admitted, facilities in private hospitals vary considerably, particularly in the field of intensive care. It seems that in any public/private mix, National Health Service hospitals would carry the burden of difficult cases. Therefore, costing would have to be carefully worked out to avoid disadvantage to the National Health Service.
Another difficult question is that of staff. Here perhaps to some extent I cross swords with the noble Lord, Lord Wigoder. A great many in the private sector have received their training in National Health Service hospitals. I understand that it costs about £60,000 to train a doctor, and there is also the cost of nurse training, as regards which I have no figures, but it must be considerable. As I have already suggested in a much earlier debate in this Chamber, the private sector should pay towards the training of nurses and doctors a levy to be determined and agreed. There is

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no logical reason why it should not do so. It is only fair and reasonable that the private sector should bear some of the cost of the benefits acquired in recruiting skilled staff trained by the National Health Service. As matters stand at the moment, let us face it, the National Health Service is subsidising the private sector in this particular section alone.
Whatever future decisions are made regarding the future of the National Health Service, it is inevitable that a clash of ideologies will arise in the forthcoming general election. I must honestly say that personally I wish it were not so and that the National Health Service might be regarded as a vital service to the nation to be fully expanded and restored without that idiotic new Conservative word "privatisation" rearing its ugly head in any direction. I detest that word as much as I detest their pet word "quango". One disservice which they have done to the country is to introduce the word "privatisation": it is detestable.
With some pride I number myself among the many unknown thousands who battled for a National Health Service and lived long enough to receive from it benefits beyond price. There can be no mistake about it that many others in this House can say the same. Therefore, to me, there can be only one priority: medical need and not financial advantage. However, I recognise that the private sector exists and will continue to do so. That being so, ways and means of co-operation between the two sectors must be found, with the main objective of advancing the health care of the nation, but not the overriding motive of profitable financial achievement in the private sector. Whatever happens, the extension and improvement of the National Health Service must be the number one priority of any Government, regardless of their political basis.
Once again, I thank the noble Lord, Lord Hunter of Newington. But it is regrettable in a way that we have not had a longer period for this debate.
8.7 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, I have greatly welcomed the debate we have had today, for it has given us the opportunity to consider some of the wider questions concerning the future of health services—both public and private—that are sometimes crowded out in the discussion of more immediate issues and problems. The debate gives me the opportunity of restating our commitment to the National Health Service and to make clear how we see the relationship between the public and private sectors developing in the future.
I must start by paying two tributes. First, we are indebted to the noble Lord, Lord Hunter, for instigating the debate and, indeed, for his comments today. I am sure we are all conscious of the authority that the noble Lord brings to the subject following his lifelong involvement in medical issues, and in particular his contribution to the development of medical education.
Secondly, the Nuffield Provincial Hospitals Trust are to be congratulated for their role in producing this book. It is a most valuable bringing together of the information, arguments, and ideas underlying any
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discussion of the mix of public and private health care provision. The publication is in line with the concern of the trust to keep under review the effectiveness of the total health services available. The general message of the book is perhaps that, although different countries naturally have different ways of providing and financing health care, all industrially advanced Western countries face a number of common problems.
In recent years the generally difficult world economic situation has focused attention on the level of resources that can be made available to health services. In no country can the funding of health services be divorced from the general ability of the economy to pay the cost. This has applied however health services are organised and, in this country, has had to be faced by all administrations since the war. At the same time we are conscious of the continuing growth of demand for health services. Again this is a common experience. On the one hand, we have the demographic pressures: in particular, the growth in the numbers of the very elderly. On the other hand, demand for health services rises with increasing expectations and the emergence of new medical techniques. The development of life-saving procedures is of course welcome but we have to face up to the consequences, in terms of pressure on resources. These comments would be familiar to anyone in the Western industrialised world. How have the various countries responded? Clearly the exact response has been linked to the various methods of organising the funding of health care reviewed in the book. The structures vary; but between countries two messages stand out.
First, in all the countries involved there has come to be a considerable state financial contribution to the funding of health care. The proportion and the method of channelling the funds may vary but almost everywhere the state is to some degree involved in the provision of health financing.
Secondly, what is noteworthy is the extent to which systems abroad have been subject to regulations in recent years with the aim of matching expenditure to the ability of the economy to bear the cost. The book records actions, such as controls on the supply of things like beds, intervention in the price of health provision, and other means such as adjusting the coverage guaranteed to the insured person. Both intervention and the concern to ensure the best use of resources—that is, value for money—are common themes whatever the structure.
It is of course right to keep an eye on what is happening elsewhere. It would be arrogant to believe that this country has nothing to learn from foreign experience. And no doubt, given the similar issues, there are essays on the United Kingdom system in similar books produced in other countries. But there is no one system which in itself solves all resource and efficiency problems. We also have to take account of our own traditions and strengths. For example, our general practice service is rather different from that in other countries, where there is generally greater direct access to specialists. Further, while such comparisons are notoriously difficult, it does seem that our administrative costs compare favourably with those of other countries. It would not be sensible to move to any alternative system which, while theoretically meaning

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less Government involvement, in practice led to more bureaucracy and more involvement in the detailed regulation of health services.
The Government's approach was summed up last July by my right honourable friend the Secretary of State as follows:
"The Government have no plans to change the present system of financing the National Health Service largely from taxation, and will continue to review the scope for introducing more cost-consciousness and consumer choice and for increasing private provision which is already expanding".—[Official Report, Commons, 30/7/82; col. 860.]
In the rest of my comments I shall deal with the three elements inherent in that statement: our commitment to the NHS, our concern to promote the efficient use of resources. and our approach to a developing partnership between public and private sector.
Our first aim is to strengthen and develop the National Health Service. The principle should be that good health care should be provided for everyone, regardless of ability to pay. Our support for the NHS is clearly demonstrated by our record on expenditure. Since we came to office, in England alone we have increased spending on the NHS from £6·5 billion in 1978–79 to £12·9 billion in 1983–84. Even allowing for inflation this increase has meant real growth in services of some 7½ per cent. over this period and growth of over 17 per cent. when measured against the Retail Price Index. The charge which we hear from some quarters that we are "dismantling the NHS" is therefore wholly without fundation. So far as activity to increase the efficient use of resources is concerned, the Government have recently taken or set in hand a number of initiatives. They include: changes to the structure of the NHS; a regional review system and the development of performance indicators to review authorities' use of resources; the setting up of a special inquiry into NHS management; a review of information; improvements in audit; a new scrutiny procedure for administrative and managerial functions, and measures to improve efficiency in specific areas such as purchasing goods and services. These are all part of our central concern to make the best use of available resources.
I turn now to the place of private care. I believe with total conviction that our people should be free to seek health care outside the NHS if they wish, that private medicine does not pose any general threat to the NHS, and that the independent sector, and the NHS under the "pay-bed" system, should be free to provide facilities to meet the demand for private care and treatment. Indeed, I greatly welcome the fact that over 4 million people are now covered by private health insurance, representing, as the noble Lord, Lord Wigoder, told us, over 7 per cent. of the United Kingdom population.
I should like to remind your Lordships that we have restored tax relief on employer-employee private medical insurance schemes to those earning less than £8,500 per annum, which was to correct discrimination against this benefit alone. This is an example, incidentally, which contradicts the assertion made by some of your Lordships on that side of the House yesterday during Questions that the Government's tax concessions have all been directed at the higher paid.
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A major aim of the Government is to encourage greater personal responsibility for health, and full recognition of the contributions of the voluntary sector and private health care. Part of the health care of this country has of course always been provided by the independent sector. In the past, however, Governments have too often neglected or ignored private care and the opportunities for co-operation between the independent and public sectors. We aim to encourage a more imaginative approach to the provision of services and a constructive partnership between both sectors.
Beside the National Health Service the private health care sector is still comparatively small. It is most important to bear this in mind in the context of the kind of issues explored in the NPHT publication. The total amount of money spent on independent health care represents but a few per cent. of what the nation spends on the NHS.
But the private sector has an important role to play. By increasing available health care provision, it relieves some of the pressures on the NHS. But there are other benefits, too. There are dangers in being a monopoly supplier or a monopoly employer, and the private sector provides a useful alternative to the NHS. It shows that there are different ways of doing things.
I disagree with those who argue that private health care should only be available outside the NHS. We shall continue to authorise private practice in NHS hospitals where there is a demand for it. There is no reason why it should interfere with the provision of services to NHS patients. We have reached agreement with the medical profession on six principles designed to ensure the equitable operation of private practice in the NHS, and there is a statutory safeguard which prevents private practice from being authorised in NHS hospitals if it would prejudice service to non-private patients. Further advice on the management of private practice within the NHS was given to health authorities in the circular we issued earlier this year.
So far as private practice outside the NHS is concerned, I recognise it is possible that a particular private development might, in certain circumstances, adversely affect, for example, the staffing of a local NHS hospital. We have therefore retained certain powers of control over private developments, with which I shall not trouble your Lordships now.
The qualitative safeguards provided by the Nursing Homes Act 1975 are on the whole working well. There is however a need for greater consistency of approach in the requirements of health authorities—something which has been highlighted by the creation of a large number of health authorities at district level. With this in mind we suggested that the National Association of Health Authorities might like to prepare further guidance on the registration and inspection of private sector premises. They responded promptly and constructively to this, and hope to be able to publish some guidelines later in the year.
We see the NHS and the private health care sector as essentially complementary. Co-operation and not competition is what we need, so that all health care facilities are used to capacity. Health authorities and managers of local private facilities will I hope increasingly develop close working relationships.

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There are many areas where there can be co-operation between the NHS and the private sector.
For example, a number of health authorities make use of private facilities as a way of providing NHS services where they can contribute economically and effectively to the care and treatment of their patients. I should like to see many more such arrangements introduced. For our part, we have lifted the administrative restriction on contractual arrangements with profit-making organisations and institutions, issued guidance to health authorities, and urged them to take present and planned private sector provision fully into account when considering the future pattern of their services. I hope that anyone in the independent sector with spare capacity will bring it to the attention of the health authorities in his area. On the other hand, several private institutions obtain pathology, radiology, and other services from NHS hospitals. Such arrangements can be mutually beneficial, and avoid unnecessary wasteful duplication of services.
Co-operation between the public and private sectors of health care should take place at all levels. I also hope for instance that many more joint training courses, seminars, and study days will be arranged. Activities of this kind can do much to promote better understanding, foster closer relationships, and encourage the exchange of ideas and information about good practice. I have been pleased to hear of some new training initiatives by the private sector and of the active consideration being given to ways of further expanding its contribution for the training of health professionals.
For our part, we shall continue to look for and promote ways of improving the total health care system in the country. Officials are, for example, keeping in close touch with representatives of the Nuffield Provincial Hospitals Trust and we have recently discussed with regional health authority chairmen the scope for co-operation between the public and private sectors and hope shortly to continue that discussion with district health authority chairmen.
May I turn now to some of the points raised during the course of the debate this afternoon? The noble Lord, Lord Wells-Pestell, referred to the problem of waiting lists, and more than one noble Lord referred to it subsequently. It is the case that, prior to the industrial dispute last year, in the three years that we had been in office waiting lists had steadily declined. Naturally, during the dispute that was not so. I hope, now that the dispute is well behind us, we shall see those waiting lists dwindling again.
The noble Lord, Lord Wallace, suggested that Government policies would extend waiting lists; but of course that is not so. Our policies in fact reduced the waiting lists. The noble Lord soft-pedalled the proposed policies of the Labour Government—should they ever come into office again—in this particular area. I have in front of me a document, recently published, called Labour's Plan: New Hope for Britain. I must say that there is not much hope for National Health Service patients under the proposals that the noble Lord and his colleagues are proposing to put before the nation.
The noble Lord, Lord Auckland, asked me about the percentage increase in nursing staff, in particular in
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the provinces. The increase in total health authority manpower between 1976 and 1981, taken on an annual basis, has been about 1·5 per cent.; that is, 1·5 per cent. per year over that period. The two regions with the highest increase were the Trent Region and the North Western Region, at 2·8 per cent. and 2·4 per cent. respectively. I am afraid I cannot give my noble friend the figures for nursing staff in those two regions, but I would expect them to be similar in percentage terms.
The noble Lord, Lord Wells-Pestell—and the noble Lord, Lord Wallace, underlined this—asked me about the way charges are calculated for private patients in NHS hospitals. Charges include overheads and an amount assigned to capital, so I think that the charges are calculated on the proper basis and I do not think that the fears of both noble Lords are justified. Indeed, we have recently altered the basis of charges, or at least are proposing to do so, so that the charges made at individual hospitals now more precisely relate to the costs incurred in those hospitals rather than to some general national formula which, in the past, has not necessarily proved particularly accurate.
Lord Wallace of Coslany: My Lords, would the noble Lord allow me to intervene? Is the noble Lord talking about charges for private beds? I referred to the other services given in various parts of the hospital.
Lord Trefgarne: My Lords, the other services, too, are charged for, broadly on the same basis. The noble Lord, Lord Kilmarnock, asked me in particular about the critical point. He asked: where is the critical point? I think he was wondering what was the point at which the growth of the private sector might threaten the public sector. I am not quite certain where that critical point is, but I am quite certain that we are a very great way from that point at this moment, when the private sector is some 2 per cent. or 3 per cent. of total health care in this country.
The noble Lord, Lord Prys-Davies, asked me about the question of teaching hospitals; about persuading the doctors of the future of the need to make efficient use of resources. I entirely accept the importance of doctors being aware of the cost as well as of the clinical implications of the treatment they prescribe or perform. The department is active in promoting a better understanding on this point. We support the management training of clinicians, and we are also promoting a study of the concept of clinical budgeting. However, the training and education of the medical and other health professions is not a matter which is ultimately within our control. It is, as many noble Lords in this House know so well, the medical schools and medical education bodies which determine what medical students are taught and to what extent they are educated in the resource as well as the clinical consequences of their work. I hope very much that the medical education bodies will give this aspect of medical education continued thought and emphasis.
The noble Lord, Lord Richardson, asked me about the private revenue, and in particular whether the revenue from private medicine could be retained by the hospital itself rather than perhaps tipped into the general, national kitty. This year's health circular repeats earlier advice that private practice income

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should be retained in NHS hospitals so far as is practicable for use on identifiable purposes where it is so earned. I would refer the noble Lord to paragraph 24 of the circular I mentioned earlier. It is No. 7 of 1983.
The noble Lord, Lord Hayter, asked me about the revenue funding for hospices, and asked me if I could give some assurances that we in the department would look favourably on making some commitment for particular projects. This is a matter for district health authorities and not for the department itself. District health authorities will want to look at each particular case in the light of the requirements of their particular district. I know that some districts make a commitment to take a certain number of beds in existing and presumably in planned hospices as well. Indeed, I was myself asked to consider a matter of that kind quite recently, and that is the sort of solution that was there being canvassed.
The noble Countess, Lady Loudoun, referred to the need to examine the legal basis of registering old people's homes. I can assure the noble Countess that this is contained in the Health and Social Services and Social Security Adjudications Bill, which started in your Lordships' House a few months ago, which is currently before the other place, and which will doubtless come back to your Lordships for consideration of their amendments in due course.
My noble friend Lord Colwyn made a particular plea for more preventive health care. In the United Kingdom preventive health care, which embraces health promotion and health education, forms part of the normal health care services provided by the National Health Service. There is some work going on in districts in this matter, but nationally the Government have produced a series of discussion booklets on prevention aimed at professional and informed lay readership, and will fund the Health Education Council to the extent of some £9 million in 1983–84. The council has an ongoing programme of health education relevant to the prevention of smoking-related diseases and to the promotion of healthy life styles.
The noble Lord, Lord Wallace, asked me particularly about the proposed use of Frognal House as a private hospital. Any proposal to change the use of Frognal House to a private hospital will require planning permission. Under the terms of the lease on which Frognal House is held the approval of the South-East Thames Regional Health Authority is required for the making of an application for change of use. I understand that the leaseholders did seek the RHA's permission to make such an application but in fact do not now intend to pursue the proposal. Had the request been pursued and had the RHA given its agreement, the proposal would then still have been subject to all the normal procedures and safeguards applying to planning approval and the control of private hospital development.
To sum up, I should like to say that we want the independent sector of health care to be seen as a small but growing and complementary part of total health care provision. Our view is that the number of pay beds and the number of private hospital beds should find their own levels in each locality, and that there
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should be the maximum of co-operation locally between the public and private sectors. The relationship between the NHS and the private sector of health care is an area not for ideological battle, but for common sense collaboration. I believe that all of us can make a contribution to a better understanding, to improved working relationships and, in the end, to the provision of better health services for all our people. I regard "partnership" as very much the key word for the 'eighties.
Lord Hunter of Newington: My Lords, I rise, first, to thank all noble Lords who have contributed to this debate. I thank them for raising the standard of debate, and I express the hope that if this topic arises outside the House, as it surely will, the standard of debate there, too, will be raised. I thank the Minister, particularly, for the clarity of his exposition, but would also say to him that to my mind the House has clearly said: "We accept that there must be a mix: find the right mix". So the Government are now fairly challenged by the situation as to what is the right mix and what role they themselves should play in this matter. For example, should they study the elderly and all the interconnections, and give advice to local district hospitals, or should they study hospital development and the share of private hospital development of the hospice kind which has been so clearly put to the House? I would have thought that one would like to see more action, more detail and more proposals for debate, because there is a natural anxiety in many quarters that the right mix must be found. My Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Opticians: Office of Fair Trading Report
8.32 p.m.
Lord Rugby Lord Rugby rose to ask Her Majesty's Government what steps they intend to take in respect of the opticians' monopoly following the Office of Fair Trading Report.
The noble Lord said: My Lords, the noble Lord, Lord Donaldson, asked me to express his regret that he could not speak in this particular debate, but he wished to assure me that he was very much in support of what I have to say.
The Opticians Act 1958 was a seemingly harmless Act, concerned only with compiling a register of opticians and regulating their professional standards. The manner in which the Act has been interpreted has been more sinister. The impact of Section 21—that is, its impact on the public—has given cause for concern. That concern has been reflected in the press right across the board. The Government must surely have been aware of recurrent words in the headlines, such as, "fraud", "swindle", "rip-off", "frame-up", "scandal". These emotive expressions have reflected the defencelessness of the public in the face of what they see as a form of persecution by deprivation: they believe that there is indeed something rotten within the state.
The truth and the obvious have been constantly deployed in order to counter the sheer deviousness of

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this monopoly, and never more so than in the debates and Questions in the last three and a half years in your Lordships' House and another place. In the face of it all, no straight answer has ever been offered by the Government. There has been no attempt to offer a straight answer to the 23 million for whom these bits of plastic and mass-produced glass inserts spell the difference between being an able-bodied person and an incapable person in a demanding, competitive world.
Is it trite to ask whether it is not palpably obvious that it is only by the combined use of all its senses working in unison that mankind obtains its ability to survive? For centuries we have developed simple tools to compensate for physical changes and to help us to perform essential tasks. The conversion of script into mental imagery is central to civilisation. There are different ways to do this—for instance, by being read to—but mainly by scanning the lines of print and delivering the message to the brain, in a sighted person with the eyes and in a blind person with the fingertips.
Where these physiological changes occur, as they do, gradually and naturally, the scripted words need visual enlargement by magnifiers. This is in order to maintain a status quo vis-à-vis the comfortable distance for performing all manner of tasks. Different distances require different glasses. Maximum efficiency is decreed by simple trial and error. Of prime importance is the fact that both hands must be freed for co-ordinating movements and thus these magnifiers are held in a special frame. This compromise is universal and hallowed in history.
Can a task be performed better by using an optical appliance? That should be a 100 per cent. personal decision—it cannot be anything else. No person is privy to the thought processes and mental responses of another person. Sight means one thing to one person and something different to someone else. Our right to our own sight is a basic fundamental right. Likewise, the power to increase or decrease the focal length of the eyes by means of selected aids in the performance of the demands placed upon us is a basic human right. The choice of single vision lenses which achieve this purpose has been with us for centuries.
However, the Opticians Act 1958 introduced its own set of rules concerning our rights in these matters. It managed to persuade Government that oculists, by changing their name to ophthalmic opticians—which is somewhat like a farmer upgrading his style by calling himself an Alimentary Dietician—began to know better than we do; that by some indefinable knowledge they have the right to interfere in these mental visual processes; that, in order that we may continue to use these simple tools, we must make application to them. We must subject ourselves to interrogation; we must try to explain and divulge what is going on in our minds before access to a visual aid—known as an optical appliance—will be released.
It is futile to remonstrate. This is not an eye-test at all; it is a test of sanity with penalty clauses. At the mature age of 50, or thereabouts, when faced with the greatest reliance on these status quo tools, you comply or you go without, or, as many do, you go abroad to buy them. Over the years, Government have been in possession of a vast quantity of correspondence. Their vaults must be overflowing with complaints from the
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public on this one issue—namely, the right to deprive people of the maximum deployment of their eyesight at a stroke by taking visual sensory aids off the market. By so doing, the efficiency of the whole nation has been impaired. The Government have been complacecent by choice, despite the violent opposition to what is now exposed as a restrictive practice concerning our eyesight and our freedom to make personal judgments about our own bodies.
My Lords, 23 million users of spectacles may have had enough, but their voice is as nothing compared with an organised lobby of a few thousand opticians ensuring that the mailbags of politicians are kept filled with their special pleading. The lobbying stems directly from the Bill itself. The tactics are the same as those used in the Private Member's Bill of 1958, and who knows it better than the noble Lord, Lord Northfield? There was barely a quorum in the House at that time. A Division on the most reasonable amendments to safeguard the public interest would have been futile when that quorum was composed of opticians and their friends in the majority. Indeed, it was by the continuous use and repetitive reference to those very words "public interest" that public interest became the first casualty.
If anyone seeks to study the archetypal method of using the democratic processes in order to secure a lucrative market, a monopoly, or, in business terms, a coup, he need only study Hansard. Read the reports of those debates and then relate the promise to the fulfilment. One is almost prepared to forgive anything in the business world when compared with cornering the market in visual sensory aids, depriving people for weeks of their natural abilities and relating the charges to an unbridled price structure. This form of Uriah Heep succour has no place in the doctrines of Hippocrates. When such methods can be and are being used by some to obtain payments out of all proportion to the intrinsic value of a vital and essential product, that, my Lords, is blackmail. The first chink showing that the Government were yielding was when Mrs. Sally Oppenheim, the Minister for Consumer Affairs, set up the first full-scale inquiry—and God bless her for it! In effect, she said that competition in the sale of spectacles must come back. The Office of Fair Trading will be charged with taking this vehicle apart and thereby enabling Parliament and the public to view it piecemeal in all its parts.
That report is a masterpiece. It says everything that is required of it without a hint of bias, with an enviable economy of adjectives and a total suppression of opinion. The Government now have in their hands the very indictment of the opticians' cartel which the Minister sought. Why is she no longer in office? Is this something to do with the lobby? The Office of Fair Trading report is of great public import and concern.
Promises were implied to me when I agreed not to go to a Division in your Lordships' House in sponsoring a Bill to repeal Section 21 of the Opticians Act. That debate was over a year ago. It was then made contingent upon the findings of the report. That Bill was entirely vindicated by the report. But the Bill remains on the Table. If the Government shrug it off now because of an impending election, I believe that this will be construed as a cover up; and if it looks like being collusion, it may well turn out to be an albatross.

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I hope that I am wrong in that suggested possibility. I have a letter from a retired optician of the old school who says that if all else fails, one thing that we can count on is that Mrs. Thatcher will not stand for British people being fooled.
This debate is essentially about the report of the Office of Fair Trading. But, taken in conjunction with the report of the Committee of Public Accounts, again one is confronted with unique and wholly unacceptable sources of hidden revenue for opticians. The chairman of that committee referred more than once to wool being pulled over the eyes of the Department of Health and Social Security, and unintended profits being filched out of the Exchequer. Lack of surveillance was admitted; an estimated £10 million of VAT went astray over two or three years. These figures are estimates and taken out of the top of their heads; no one really knows what the figures are; Accountability seems to be a dead duck; the department could not get at the facts and was an easy touch.
Later in the report, we find that bankrupt stocks of lenses from abroad namely, the Argentine and Brazil—were being dumped on the world's markets at 25p each. Landed here, they were qualifying for reimbursement at standard rates—all perfectly legal, or so we are informed. The world is awash with spectacle frames. Whole frames and lenses are selling abroad—in Holland, for instance—at from £2 to £6. Here, frames alone are starting at £40 before a lens has been inserted. We can find bills of £100 or more. One old lady I know was charged £450. There are no limitations. At least 85 per cent. of these frames are imported. What is the effect upon the home industry? Why should it have to compete with chicanery at this level?
In the wake of this transport of deceit, we now learn that the opticians have been impoverished to the tune of £70 million to £90 million as a result of the eye tests that they inflict upon us. I understand—although I stand to be corrected—that every optician's business in the country stands to receive an ex-gratia payment of between £10,000 and £25,000. My arithmetic suggests, therefore, that a multiple business that we all know of, owned by a tobacco company, will be in receipt of £12 million to £15 million of taxpayers' money. Yet, over the years, we know only too well that they have been recouping this alleged losses by fleecing the public on private frames.
Perhaps before I end the noble Lord may explain why, under the Health and Safety Regulations, far better frames can be bought for company operatives from £14 to £19 but are denied to the public and small businesses who are forced to buy the poorer quality product at inflated prices. How can this hypocrisy be excused? Is it because every trickle through this dam is quickly plugged with an optician's finger? The tragedy for all of us can be found as I have said in the pages of Hansard, when the noble Lord, Lord Northfield, and a few other stalwarts were prevented by smear and innuendo from securing fair play for the public.
Their predictions are self-evident and are borne out now by the consumers acting independently and getting their own report. It is also borne out by the survey of ophthalmologists who emphatically
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demanded the repeal of Section 21 of the Act which controls the sources of supply, the retail outlets and links them to the opticians' consultancies, which are anything but medical consultancies. The Government must now be fully aware of what is at issue. Is it not time for the Privy Council to be asked to review the conduct of the General Optical Council? So long as this cloak of respectability is available, it will be used as a shield for malpractice. The public will remain defenceless; unintended profits will remain a euphemism for milking the public purse. It will continue unabated.
8.46 p.m.
Lord Northfield: My Lords, that is a very hard-hitting speech to follow. I pay tribute to my noble friend Lord Rugby who in recent years has been fighting very hard on a trail which started 25 years ago when some of us opposed the Opticians Act at that time and forecast exactly what would happen over the years. I am delighted that not only his pressure but the pressure of other colleagues in this place is now bringing some results and I shall come to that in a moment. But what a long trail it has been!
There are really two issues and I do not start on either of them by saying that we are here dealing with a lot of sharks or dishonest men. I do not think frankly that that is the case. I think that we are all victims of Parliament's mistake in 1958 when the Opticians Act was passed, when the sanctity of professionalism was given to a commercial service, competition was totally ruled out and we are now paying the price in the shops for that mistake. If I may say so to my noble friend Lord Rugby, it was not because of dishonest men outside. I think they are all honest and I think that we are victims of the system which Parliament has allowed them to erect around their profession.
There are two issues here, as I have said. One is the degree of competition in this activity and the rules about publicity, with the possible consequent effect upon the price of spectacles. The second issue, which is highlighted in the report of the Office of Fair Trading, is the issue of the sale of ready-glazed reading spectacles outside the profession. Let me deal with them in turn.
In the case of publicity and competition we are still—is it not extraordinary?—after 25 years trying to get Governments to face up to the simple point that we were pressing from 1958 onwards; namely, that the problem arises because of the dual functions of opticians in our society. They are, on the one hand, professional people testing our eyes and, on the other hand, they have the purely commercial activity of selling spectacle frames. No Government has yet faced up to the dilemma of trying to cloak the whole of that activity under the guise of professionalism.
Let us look at what has happened since 1958, since I tried to get the Opticians Act counted out and moved all sorts of amendments to expose this expected racket; let us look at the number of reports that have littered our desks over the years: the Monopolies Commission on Professional Services of 1970, the Price Commission Report in 1976, which said that it is quite clear that dispensing private spectacles is a very profitable activity; the Dollond and Aitcheson report

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in 1979 which showed 300 per cent. and 400 per cent. mark-ups on frames, without real competition in the trade—for it is a trade, and that is all.
Let us consider the debates that we have had in this House. On somewhere between 10 and 20 occasions we have raised this subject since 1978; and yet we have still been put off with "Wait for another report". And, when the report is out, we have to start some more consultations. God knows when we are going to see the end of this!
A noble Lord: We soon shall!
Lord Northfield: The noble Lord says, "We soon shall". I hope he is correct but I have not had any hint that we are going to see the end tonight. Anyway we now have the report of the Office of Fair Trading, and let us say quite bluntly that it justifies the whole of the fight we have had over the years. It comes out totally on our side on the degree of competition and publicity. We should go back—because people do, as though it were the Bible—to the Crook Report of 1952. Over the years everybody has said "You must go back to the Crook Report because everything that has followed has stemmed from it." But reading the report, what it was saying in 1952, and in explicit terms, was that it expected the professional activity of eye-testing gradually to become dissociated from the commercial activity of selling frames. What the Crook Report wanted to do, quite properly and justifiably was to create a professional optical council for that professional activity alone. So nobody should pray in aid the Crook Report for what is going on now, which is the confusion of the two activities under the cloak of professionalism.
Today let us look at the figures to justify what I am saying about publicity. There are about 8,000 opticians. Over 7–8 million pairs of spectacles are sold per annum and over 70 per cent. of those frames are private ones. My Lords, gross this up for yourselves. We now have an activity tagged on to the professional job of testing eyes which, on my calculations, grosses well over £200 million a year and probably over £300 million. The tail is wagging the dog. This selling side of the optical profession is now more important than the revenue from testing eyes. That is where the problem has arisen, because under the cloak of the Optical Council total restrictive practices have been imposed with regard to publicity for that more dominant part of their activities.
If you read the 1981 rules on publicity, which are of course sanctified by having been passed by the Privy Council after they had gone through the Optical Council, you can see what it is all about. It is about keeping very discreet, like doctors and the very high professions, who, of course, do not soil their hands with any of this commercial activity. But it makes no allowance at all in those rules for the need for competition on this most dominant part of their activities.
We have made some progress after the pressure in this House. Let us not deny that. We can claim some credit—though, I would say to the Minister, not for his department—that we have forced at last a display of prices to be shown in the windows. The Optical Council did not want it. We kept raising it in this
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House until at last they were shamed into changing the rules to allow a price display in opticians' windows. I understand—I may be wrong—that it was carried by one vote on the Optical Council and at last we got a breakthrough to some signs of competitions. So at last we now prevent the problem, which I have raised many times, of the captive customer who is lured into the professional testing room and then feels he cannot walk out when it is only then that he discovers how high spectacle frame prices are. We have begun the breakthrough. What we have now to press for is the final breakthrough as recommended by the report of the Office for Fair Trading. What the report says on this issue is this. Having said that there have been these improvements on the subject of publicity, it continues:
"The remainder of the orders effectively deny patients information on available opticians in their locality, the range and prices of available products, the services which are offered by opticians in terms of opening hours, speed of dispensing, product guarantees and specialised services such as contact lens work and to a lesser extent quality. Customers are therefore denied the knowledge on which to make an informed choice of optician".
This is the next stage we have to crack and I shall make a suggestion in a moment although I do not know whether the Minister will like it. What would happen if we did open up the opticians' trade? I do not mean that offensively; I refer to opening up this side of their activities to real competition and publicity. What might happen? First—and the Office of Fair Trading's report is quite blunt about it—there would be fewer opticians. Some would be squeezed out. This is the problem the noble Lord, Lord Rugby, ought to be looking at because this report said that prices among small opticians in particular are something like 28 per cent. too high because of the low number of tests and supplies of spectacles that they handle in any one year.
So, if competition took its force we would have to face up to the loss of some opticians in small practices. I have a shop too. I have two off-licence shops. Nobody protects me from the big boys round the corner. Fifty yards from my shops—one is in a very poor district with high unemployment—is a supermarket selling liquor as a loss-leader and I have to keep my shop going in the face of this competition. There is no Optical Council or other professional body protecting me from that. Why should we protect an uncompetitive system if it means that too many small opticians are charging too-high prices because they are really uneconomic in terms of real competition?
Secondly, I should like to see what I see in America when I go into Sears Roebuck. What does one see? It is a proper commercial activity. There is a range of spectacle frames at 18 dollars; another range of frames at 34 dollars; and another at 54 dollars—real merchandise on display so that you can make your choice, and not all these fancy prices you can see in windows such as £32.62½p. That is all nonsense. These are mythical prices not based on real competition. The frames are pretty standard in their cost at wholesale prices. So we would get the customer being able to make a rational choice of different kinds of frames at fairly sensible prices.
Another thing we might see if we really let competition go a little further in this industry is something I saw on Friday. Nikon, the Japanese company, have just opened a factory in my New Town of Telford and I went to see what they are selling. They

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are selling this instrument, which is a totally technological, microprocessor approach for testing eyes. You simply sit at one end of this machine and there is a man at the other end who is a trained operative—he does not have to be an optician. He simply moves a handle until he gets the right result and the computer then prints out your prescription. This is happening throughout Europe. In Holland and other countries modern developments are happening. But here, because we still keep this as a "cottage industry", if you like, without real competition taking force, everybody is pretending that there is a great deal of mystique in the testing of eyes, so they say, "We must have not too many of those machines because it would give the game away".
Lord Trefgarne: My Lords, I wonder whether the noble Lord would allow me to ask him whether the machine he is talking about can detect the medical conditions that can exist.
Lord Northfield: My Lords, I am coming to that. I quite accept the Minister's point. But what I am saying is that this would be a good thing to take some of the mystique out of all this activity in the country. Before I come to the end of what might happen if we got a little more competition going, we would have to say to the Minister that just improving the prices of tests, the dispensing fee and all that and having better National Health Service frames—all the things which he has put to us at other times as ways of helping to get the balance right—is no substitute for competition. You cannot have competition stopped the minute it begins to bite you. That is what it is all about, in a trade. Once it begins to bite it is probably being effective. You cannot keep using gimmicks to stave off the decision on real competition.
I suspect that the Government will run away and do nothing. However, I suggest to those noble Lords who have been with me all this time that we should now draft very carefully amendments to the 1981 rules on publicity, send them to the General Optical Council and dare them to turn them down. We want to widen further the degree of competition beyond the simple display of prices in shop windows. I challenge the Minister to back us if we do that. It is a fair challenge. If the Government will not do anything, will they back us if we do something about this part of the Office of Fair Trading report? I should be prepared to draft those amendments. I am sure that the noble Lord, Lord Rugby, and the noble Lord, Lord Orr-Ewing, frustrated as they are after all these years, will join me in sending a precise suggestion to the General Optical Council about the relaxation of these rules and in daring the council to turn it down. We would not go mad. We should try to take them gently along this road of relaxation of the rules of competition.
Let me now deal with the Minister's point about testing and the sale of ready-glazed spectacles outside the optical profession. I come straight to the noble Lord's point. The issue is summarised on page 160 of the OFT report:
"Overall, therefore, the central question which Ministers will wish to consider is the balance between the benefits of greater competition and the risk, in the absence of the provisions of Section
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21 of the Act, of symptoms of abnormality and disease not being discovered as a result of breaking the present link between the sale of spectacles and sight testing".
I want to face head on the issue which the noble Lord put to me. First, we have at last got Ministers to accept—but, goodness me! has it not been a long time before it has been accepted, as the noble Lord, Lord On-Ewing, who shared the burden of the correspondence with Ministers with me knows—that wearing the wrong spectacles does not do you any harm. We first of all had to disabuse Ministers of that idea. They said, "It will do terrible harm to your eyes if you wear the wrong spectacles". At last that argument has been disposed of. The only argument left is that about glaucoma. If people think they have diabetes they will sensibly go to the doctor; that disease is not normally first diagnosed through the eyes. The noble Lord shakes his head. But he has been in a room when Mr. Trevor Roper has told him that this is the case. Mr. Trevor Roper has more experience of this than either the noble Lord or his civil servants.
The real issue, if not the only issue, is glaucoma. The Office of Fair Trading estimates that if ready-glazed spectacles were put on sale, about three to five per cent. of spectacles would be sold in this way. Specialists like Mr. Trevor Roper estimate that when eye tests are carried out, about 0·2 per cent. and up to 2 per cent. of people might have some signs—nearly always wrongly diagnosed signs—of glaucoma. If we allowed the sale of ready-glazed spectacles, whom should we be putting at risk? We should be putting at risk between 0·2 per cent. and 3 to 5 per cent. of people. Therefore the figure, as the Office of Fair Trading report says, is so marginal that it is ridiculous to make it the prime point of public policy. It is absolute nonsense to say that 0·2 per cent. and up to 2 per cent., or 3 to 5 per cent. of people is such a big figure that we have got to make a big issue of it.
I would urge wider considerations on the Minister. People are sensible enough nowadays to go to opticians to have their eyes tested. We are not back in the dark ages of the 1930s when people were unable to think about how to get their eyes tested properly. People know that there is a National Health Service. We have had 40 years of it. If people think that their eyes are defective in some way, they know that they should go to a doctor or an optician to have a proper test. Times have changed, compared with 40 years ago. Other matters are now more at issue.
First, why should I be forced to go through an optician to buy a spare pair of spectacles, with all the costs which that implies for the public purse, in testing and the rest? As for glaucoma, as the British Medical Journal said, if you really believe that the only people who should be allowed to sell spectacles should be opticians, then you should say that the only people allowed to sell toothbrushes should be dentists. It is as simple as that. It is an appliance which can do you no harm. The case is totally parallel with the selling of toothbrushes. Therefore, I beg the Minister to have something to say to us tonight.
When I go to America, I am always being asked by Members of this House to bring back pairs of spectacles for them. It is ridiculous that we in this country have reached the stage where a pair of spectacles can cost up to £90. I have been stopped in

1013
the corridors of this House and been asked to bring back spare pairs for 12 dollars. The wind of competition in this trading activity really must be allowed to blow. We must at last persuade the Government to recognise that we are not chasing charlatans or crooks. We are trying to criticise a system which we as parliamentarians have wrongly allowed to happen.
9.6 p.m.
Lord Cullen of Ashbourne: My Lords, when the noble Lord, Lord Rugby, attempted in his Private Member's Bill to repeal Section 21 of the Opticians Act, I was Government spokesman at the Department of Health and Social Security and responsible for replying on behalf of the Government. Although I no longer occupy this position, I have by no means lost my interest in optics, since I was recently appointed President of the Federation of Optical Corporate Bodies. It is in this capacity that I want to make a few observations.
The first point I should like to make is that there are two important aspects to be considered by your Lordships when giving consideration to the desirability or otherwise of repealing Section 21. The first is the all-important aspect of the freedom of the individual. This has been very fully examined in the OFT report. I should like, if I may, to pay tribute to Sir Gordon Borne and his colleagues on the thoroughness of that report. I would remind your Lordships that the OFT was asked in its terms of reference not to make recommendations or come to conclusions which would affect the public interest. My own quarrel with the report is that the authors did come to conclusions—some of which seemed to take scant account of the evidence that had been so painstakingly presented by such eminent bodies as the Faculty of Ophthalmologists, the International Glaucoma Association, and the National Ophthalmic Treatment Board Association.
The second aspect is, of course, the health of the population. It was this aspect which lay behind the inclusion of Section 21 in the Act. However much noble Lords may like to play down the importance of this, it is obvious that it would be folly to ignore it. In fact, I believe the reason why the OFT were asked not to come to conclusions or to make recommendations was because they were required to look only at one side of the coin. Quite rightly, however, the OFT did acknowledge the importance of the health aspect in their report.
Now that this report has been publicised, I trust that the review by the DHSS of general optical services will soon get under way. Personally, I hoped that this review would have been undertaken concurrently with the OFT review since, considering the amount of controversy that has taken place in recent years on this subject—both in your Lordships' House and in the media—it is just as much in the interests of opticians to conclude this long running saga as it is for the public, the Government, and noble Lords who have shown such an interest in this subject.
I know there are some noble Lords who are impatient to have Section 21 of the Act repealed, but it must be the duty of the Government to consider very carefully the value of the health checking service that
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arises from sight testing as it is performed in this country. This consideration is clearly impossible until the DHSS review has been completed. I would suggest to the noble Lord, Lord Rugby, and his supporters that they will have to possess their souls in patience for, I would guess, at least a year.
Noble Lords: Oh no!
Lord Cullen of Ashbourne: My Lords, it is indeed a pity that the Government have taken such an unconscionable time in getting started on the DHSS review. It transpires now that the process of selecting a chairman and members is "under way" and that the terms of reference are being revised.
I will now turn to a very important point, which is either ignored entirely by the newspapers or is sometimes alluded to in passing without emphasising the crucial part that this point has played in the cost of private spectacles. As many of your Lordships are aware, opticians provide three categories of spectacles. These are NHS spectacles; hybrids, which are NHS lenses in private frames; and private spectacles. It is well known that NHS spectacles and NHS lenses have had to be subsidised from private sales. Unfortunately, the fees payable to opticians for NHS work, despite the inflation that has occurred in recent years, remained substantially unchanged between 1978 and 1982. The effect of this was that the DHSS underpaid opticians by some £100 million. It was only on 1st February this year that increased levels of sight testing fees and dispensing payments finally came into operation. The sum of £ 100 million is a very large figure. In December 1981 there were 6,037 ophthalmic opticians and 2,661 dispensing opticians on the GOC register. Opticians were, therefore, owed about £12,000 each on average, or about one year's earnings.
That is the reason why opticians increased the prices of private spectacles, in order to remain in business; and the reasons why the increases were substantial is because NHS spectacles on which they were losing money, amount to no less than 32·4 per cent. of the market. So opticians have found themselves in a very difficult situation since 1978.
It is generally accepted that we enjoy optical services of a very high order. The OFT review concluded that opticians have not been making excessive profits. They have been owed huge, mounting sums by the DHSS. Yet they are accused of rip-offs, frame-ups, and the like. I thought it was high time that somebody gave a little of the background to that which has been happening. I should now like to tell the House how the prices of private spectacles have been falling—not rising—over the past 12 months.
In April 1982—four years after the last adjustment—the DHSS introduced an interim increase in sight testing and dispensing payments. As a result, the optical companies were advised by the federation in April 1982 to reduce private prices—and a significant number of individual opticians also reduced their prices. A substantial proportion of the company reductions then made were up to 20 per cent. Subsequently, since the final increase in NHS payments came into effect on 1st February 1983, many companies have reduced further the prices of prescription spectacle frames by percentages ranging

1015
from 15 to 20 per cent. So we are now, and have been for about 12 months, in a period of falling private spectacle prices. So far as I am aware, the only time this has been mentioned in your Lordships' House was when in June last year I asked Her Majesty's Government if there were any signs of a fall in prices, and my noble friend Lord Trefgarne replied that falls of up to 20 per cent. had been reported. Nor, as far as I am aware, have many newspapers drawn attention to these falling prices. Prices have fallen for the simple reason that, after a four-year delay, the NHS fees have been raised to a more sensible and realistic level, despite the fact that even now the new NHS payments do not enable opticians fully to recover their overhead costs on NHS work.
Lord Northfield: My Lords, may I ask the noble Lord to go on from that, because what the report also says is that on top of those kinds of price reduction you could obtain a further 28 per cent. price reduction if the smaller optician disappeared, or at least did the level of trade that competition brings in the more prosperous optician companies?
Lord Cullen of Ashbourne: My Lords, I think the noble Lord is really talking about Section 25.
Lord Northfield: No.
Lord Cullen of Ashbourne: My Lords, perhaps the noble Lord would explain a little further; I do not quite understand.
Lord Northfield: My Lords, the noble Lord is quite right to say that prices have gone down. But the report says that, if real competition took place and the very small optician disappeared or at least got more business at that sort of level of economic activity, prices could then be reduced by a further 28 per cent.
Lord Cullen of Ashbourne: Well, my Lords, the noble Lord is obviously never satisfied. I have told your Lordships that we have had two lots of reductions, at last, after reasonable fees were paid, of 15 to 20 per cent. and then another 15 to 20 per cent. This, at least, is something in the direction which no noble Lord, as far as I know, has ever suggested in this House before.
I was going to say that, had these matters been attended to in one year instead of four, the distortion in private spectacle prices would never have taken place, though no doubt they would have risen in line with inflation. I suggest to your Lordships that, if it had not been for the four-year logjam which held NHS fees down during a very inflationary period and triggered the rise in private spectacle prices, now being reversed, there would have been no call for a return to the days when ready-made spectacles were made available without prescription. I find it difficult to believe that the Government would seriously contemplate such a retrograde step as deregistering dispensing or allowing ready-glazed spectacles to be sold by unqualified people.
Lord Orr-Ewing: My Lords, would my noble friend allow me to intervene? I am most grateful. I think a point that should be made is why should the Government not come in line with what every other free nation already does? Is there some sin in copying other free economies and therefore advantaging consumers?
Lord Cullen of Ashbourne: My Lords, I was just about to say that it might be of interest to the House to know that both Hong Kong and Malaysia are at the moment considering legislation to go along the lines of our Opticians Act 1958, in the very reverse of what has been suggested.
Lord Rugby: My Lords, would the noble Lord consider that to be an Englishman's disease, that they should go along with the 1958 Act?
Lord Cullen of Ashbourne: My Lords, I think I will just carry on with my speech. I enjoyed hearing the noble Lord, Lord Northfield, who has been absolutely consistent on this over 25 years. He knows a great deal about the subject, and I always used to feel slightly cagey about arguing with him in the days when I was on the Front Bench. However, I did enjoy his speech. I cannot say that I enjoyed the speech of the noble Lord, Lord Rugby, who I thought was quite unreasonably exaggerated in his remarks about the opticians. I look forward very much to hearing what my noble friend Lord Trefgarne has to say in reply to the debate.
9.20 p.m.
Lord Winstanley: My Lords, like other noble Lords I am mindful of the lateness of the hour. I have also not forgotten that I have already been on my feet three times in your Lordships' House today, and I fully recognise that in some things enough is more than enough. In any case, much of what I wish to say has already been said in a powerful speech by the noble Lord, Lord Northfield. I could have listened to him all night. In fact, for a time I thought I was going to have to. I make no complaint. The noble Lord is a great expert, and he put the arguments forcefully.
However, I cannot allow this occasion to pass without offering some support to the noble Lord, Lord Rugby, in his efforts. I support him not just as a noble Lord who happens to sit on these Benches and who is therefore automatically, by inclination, opposed to monopolies, be they private, public or professional: I support him as a doctor. In that capacity I must choose my words with extreme care. I am anxious not to be misunderstood. When a member of a profession which some will say has a very powerful monopoly of its own is talking about colleagues in another profession, he must be careful.
The point has already been made clearly by the noble Lord, Lord Northfield, that we are talking about two different activities. We are talking about the very necessary and important business of the care and maintenance of the health of the eyes. That is a vital activity. We are also talking about the rather separate business of selling spectacles. The poblem that faces us arises from the entanglement of those two separate and different activities. I want to make it utterly clear as a doctor that I have no wish at all to place any obstacles in the way of patients and people having regular and

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proper ophthalmic examinations at regular and proper intervals. That is important and valuable for public health in general.
In practice over many years as a general practitioner I have relied heavily on a local optician for advice and guidance on many occasions. Having said that, I must say—and I hope I am not misunderstood—that there are opticians and opticians. There is the kind of optician who gets to know a patient and his family and who takes a continuing interest in the optical health of that person during that person's life. That kind of optician seems to be in a slightly different position from the qualified optician who is merely an employee of a big multiple firm, who may be there for a short time and then gone and who does not have a continuing interest in the welfare of the individual patient.
So I greatly value the work of the opticians and I share the view expressed by the noble Lord, Lord Cullen of Ashbourne, that the longer this kind of wrangling continues the more damage is done to very well-intentioned and able members of a very distinguished profession. It is, therefore, in the interests of the opticians themselves that some of these matters should be dealt with.
I have always felt, and still do, that the provisions of the Opticians Act 1958 create a monopoly that is sometimes so rigid that it acts against the interests of the consumer, and that means the patient. There is a continuing pressure on patients always to buy their spectacles from the persons who test their eyes. That is not necessarily logical or proper. Over the years there has been an inadequate explanation of the National Health Service provisions and what is available, to whom and for how much. There has certainly been inadequate information in the past about prices, about the different kinds of prices and about choices. In my view there has quite often been an insistence on totally unnecessary optical tests purely for the sake of doing them. The case was referred to of a person who wants a second pair of glasses merely because he wants to keep a pair at home as well as in his office or another place, and so on.
There have, of course, already been many welcome changes. That has been referred to by many noble Lords. Those changes have come about in part as a result of debates which have taken place from time to time in your Lordships' House. There have been welcome changes in the display of prices, and reference has already been made to that. There has also been an increase in competition. That competition has begun to operate in the interests of the consumer rather than in the interests of the person selling spectacles. As the noble Lord, Lord Cullen of Ashbourne, has reminded the House, prices have come down. That, surely, is a benefit, and it is one which we should welcome. But many problems and difficulties remain, and it is high time they were dealt with. I make that point again. The longer they are left, and the more wrangling there is about these matters, the more damage is done to reputable people in a very reputable profession.
Let me conclude by making just one or two points and, perhaps, dispelling one or two myths. I would just say again, as a doctor, that there really seems to me to
1018
be no danger in elderly people suffering from presbyopia purchasing magnifying lenses without a test. I do not see any danger in that. Nor do I think that there is any particular danger in people getting a second pair of glasses without a further eye test when they may have had one very recently. Certainly there is no danger in an individual having total freedom to have his optical prescription dispensed by any one of a whole number of people and having a choice, instead of, as at the moment, often having almost no choice at all. But let me ask your Lordships to look at what actually—
Lord Cullen of Ashbourne: My Lords, I understand that there is no difficulty about that at the moment. You can get your prescription and go to any optician you wish.
Lord Winstanley: My Lords, the noble Lord may say so now, but I wish he would go and say it to the thousands and thousands of people in areas that I know who are perhaps not sufficiently aware of that point and who have often been misled. The fault may be theirs, but there are misunderstandings about that. There is an assumption that that is what they must do.
Look what happens now. In my experience in general practice glasses are handed down through members of the family, particularly now that spectacles have become so expensive. It happened in my own family. My wife is younger than I am, and much less decrepit, but despite that she has already grown up through two pairs of my old spectacles. But now, at long last, as I have developed a different kind of refractory error and have had to resort to bifocals, I have totally rumbled her and she will have to go and get her own glasses in the end. What I am saying is this. We really must get away from this delusion that wearing the wrong glasses damages people's eyes. All that happens is that you cannot see. You may get run over, or something unpleasant like that, but the idea that it does some terrible damage to the eyes is one which we should forget about.
I accept that there are these problems about the detection of very serious matters like glaucoma, but I would also remind the House that a safeguard, to be a genuine safeguard, must be wholly safe. I think it is a fact that sometimes, and not infrequently, conditions of that kind are missed by opticians. It is regrettable—and I do not say that critically. It is understandable. I think that public reliance on a safeguard which is sometimes not wholly safe is unhelpful. Let me give your Lordships an example. It is not very long ago that a previous Government got rid of the mass miniature X-rays. Why? It was because it was found that they were not cost-effective—but it was for another reason as well. They very often missed things. But they also instilled in people a false sense of security. A person with a chest complaint would say, "I do not need to worry; I have had an X-ray". What had he had? He had just had a mass miniature X-ray which could very well have missed the thing. It was a good thing, in a way, that we got rid of that safeguard which was not really a safeguard.
All I am saying is this. If we were to rely totally on the fact that people have fairly regular optical tests by opticians as the only way of detecting glaucoma in our community, we should be in a very dangerous

1019
situation indeed. I think we must be aware of many other steps that have to be taken. That having been said, I as a doctor am in favour of encouraging people to have regular optical tests and regular eye tests. I should not like it to be thought for a moment that I take a contrary view. I merely say that I do not think that the Government should swallow this document lock, stock and barrel, every bit of it; but I do say that it is high time that some action was taken on some of these points. If action is not taken, further damage will be done to a profession which has already been seriously damaged.
9.30 p.m.
Lord Harris of High Cross: My Lords, I join with other speakers in warmly congratulating my noble friend Lord Rugby on his persistence, courage, and single-mindedness in pursuit of a quarry which I begin to sense we have at bay. It was a splendid example of the indefatigable in pursuit of the indefensible, and I rejoiced to hear for the first time the noble Lord, Lord Northfield, denouncing sin and upholding market competition from the Labour Benches. I welcomed that as much as I did hearing the noble Lord, Lord Winstanley, speaking in those liberal accents for which I often listen in vain from the Liberal Benches. I wish that I could say anything more agreeable of the noble Lord, Lord Cullen of Ashbourne, than that it was certainly a brave effort in a bad cause, and I think that we should warn the Minister, the noble Lord, Lord Trefgarne, that if he does not do better he cannot expect in the future to escape as lightly.
The Office of Fair Trading report in January confirmed the prediction of standard economic analysis that restrictions on competition in both the advertising and the sale of spectacles must raise prices to the consumer. I should like at once to acknowledge that economists are not always right—I would add especially when they are Left. They are seldom in perfect harmony. Indeed, there are in this House half a dozen admitted, professional economists, and I find that they are fairly impartially scattered over the Conservative, Labour, Social Democrat, and Cross-Benches. Yet I dare say that they would be in broad agreement that monopoly—if not in every case wrong, or even avoidable—always has great potentiality for evil.
The confusion of counsels that we hear arises from wanting to have it both ways. Thus every businessman, every trade union leader, I would say every professional spokesman, will denounce monopoly in general, but is not above striving to suppress competition in the particular product or service that he supplies. Adam Smith said it all in 1776, in a celebrated passage that I have previously quoted. It reads as follows:
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices".
The truth is that all monopoly power enables a producer to exploit the customer by cutting him off from alternative sources of supply. But, where the monopoly power is exercised by a private supplier to raise prices, the resulting prospect of higher profits will
1020
invariably attract new entrants or imported products, or it will provoke substitution from competing products. The deeply objectionable feature of a state-entrenched monopoly is that none of these correctives is permitted by law. That is why I would argue that the power of the voluntary OPEC cartel is as nothing compared with the statutory opticians' cartel under the 1958 Act.
It must be admitted that in the Second Reading debate in February last year on the Bill of my noble friend Lord Rugby to repeal Section 21, the majority of speakers upheld the present arrangement whereby the sale of spectacles is monopolised by opticians and made subject to compulsory testing of eyes. We found that in every case the defenders of monopoly pleaded a high-minded concern for the nation's eyesight. In particular, one noble Lord, speaking with all the lofty authority of a past president of the British Medical Association, the General Medical Council, and other seemingly impartial interest groups, argued that we must defer not only to his opinion but to the opinion of the president of the Faculty of Ophthalmologists. There was much blinding talk of professionalism, objectivity, and freedom from sordid commercial interests.
I found it all very suspicious. After all, the Repeal Group which had encouraged my noble friend Lord Rugby to bring forward his Bill, had consulted equally distinguished specialists, who had enthusiastically supported our attack. We had collected leading articles from both The Lancet and the British Medical Journal in favour of the uncompromising stand that the noble Lord, Lord Rugby had taken. We were thus confronted with a direct clash of opinion between what appeared to be equally qualified experts.
It was to try to resolve this conflict that the Repeal Group decided to ask the Ophthalmological Society at the end of last year for a list of its United Kingdom members so that we could circulate a questionnaire in terms that we offered to discuss with it. It took three months for the same president of the faculty, who was lauded for his objectivity in this House, to refuse outright any co-operation in this endeavour to find out what his members really believed. Since the Ophthalmological Society is not a secret organisation, we had no difficulty in getting a list of members and writing to invite the 650 living in the United Kingdom to complete a postal ballot giving their opinion anonymously on the following question:
"Should the present statutory monopoly for opticians (or doctors) to sell simple reading spectacles be repealed?".
They were invited to vote Yes, No, or to say that they were undecided. Of the 350 expressing a direct reply, 200 said "Yes" against 150 saying "No". This clear 57 per cent. majority in favour of ending the monopoly contrasts sharply with the published opinion of the president of the Faculty of Ophthalmologists that what he had earlier called this
"direct attack on the optical profession"
was, he said,
"without the support of any more than a very few vociferous doctors".
Thus, we find, like some medical Arthur Scargill or BL shop steward, the exalted president of the Faculty of Ophthalmologists was shown to be completely out of touch with those he claims to represent.

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From the mountain of letters accompanying the voting slips, it was clear that the key difference in judgment arises over the possibility that an optician's test for glasses may discover more serious defects. So it might. The 6,000 retail opticians, as has been stated, perform a useful function, but they lack the training and clinical experience necessary to diagnose serious abnormalities and are likely to miss as much as they spot. They certainly cannot be relied upon to diagnose glaucoma, which is estimated to affect between 1 and 0·1 per cent. of the population. So there is the real danger, touched upon by the noble Lord, Lord Winstanley, that this hit or miss approach will bring a false sense of security.
The issue is put beyond doubt by a letter in the current BMJ from Mr. Redmond Smith, who is senior consultant in charge of glaucoma at Moorfields. He writes:
"If the wrong spectacles could damage a person's eyes there would be some justification for the optician's monopoly—rather along the lines of the wrong drugs being harmful justifying the doctor's monopoly of prescribing many medicines. But the wrong glasses do not damage eyes, at least no well informed person now seriously believes they do. Hence, the original grounds cited for a monopoly no longer exist. An attempt is now being made to perpetuate the
1022
monopoly by inventing new grounds: the non-detection of diseases which might result from people being able to buy spectacles over the counter".
This authoritative source concludes:
"The present law, which leads to the absurd position that it is legal to buy a pair of racing binoculars but not a pair of spectacles, should be scrapped".
The abolition of the optician's monopoly would not put the opticians out of business. Most people would continue to have periodic eye tests. But the competition for replacement glasses and simple magnifiers would bring prices down, often to a fraction of the present costs, and so would set limits to the exactions levied by the statutory opticians' cartel on what has been called their "captive" customers. The noble Lord, Lord Rugby, has on his side the Consumers' Association, the National Consumer Council and now the majority of specialist ophthalmologists. Against us are ranged only phantom fears and vested interests. If the Government will not act in this matter, I very much hope that my noble friend Lord Rugby will again table his Private Member's Bill to sweep this offensive monopoly from the statute book.
9.41 p.m.
Lord Orr-Ewing: My Lords, I should like to follow the noble Lord, Lord Rugby, and congratulate him on his initiative in having this short debate and also all those other noble Lords who have spoken from representative Benches. We opened with a Cross-Bencher, followed by a Labour supporter, a Liberal supporter, another Cross-Bencher and now I am speaking in favour of some competition from the Conservative Benches—a very natural place from which to make such a plea.
I should like to endorse the view of the noble Lord, Lord Winstanley, drawn from his professional life. He speaks with great experience and humorously, too, which is something very pleasant in this House. I believe like him, that one needs to separate the testing of eyes, which should be honourably and professionally carried out, from the marketing of eyes. This Government were elected to oppose monopolies, to introduce price competition wherever it could be introduced and, at the same time, to protect the consumer—we have a Minister for Consumer Protection—and also of course the poor and needy who had to have some special circumstance which would help them to buy such essential things as spectacles. This monopoly has existed now for some 25 years and from all the experience surely it is time that we set about doing something, and doing something rather more quickly than we have in the past.
We have had all-party meetings. We have seen two Ministers. Indeed, many noble Lords speaking in this debate have been part of those assemblies. The noble Lord, Lord Northfield, led us to a meeting with the Minister, Mr. Kenneth Clarke, who was accompanied also by the noble Lord, Lord Trefgarne, who is to reply. One thing which all those present would agree emerged was that the civil servants were still under the impression that this whole set-up, this monopoly, was essential to preserve the health of the examination of people's eyes. That idea was exploded because we had with us a most senior consultant at Moorfields, Professor Trevor Roper. The Minister seemed startled that all the advice he had received from people was contrary to the professional advice received from Professor Trevor Roper.
One has to be a little suspicious about those who desire to preserve the status quo. Something like between 7 million and 8 million pairs of spectacles are marketed each year. Many people have to have two pairs. I broke my spectacles recently and I had to go today to get some new ones and I will talk about that later. Very large sums of money are at stake although the cost of the frame cannot be more than perhaps £3 unless—God forbid!—it is made of tortoise-shell which, apart from anything else, would be illegal but also very expensive. A frame costs about £2 or £3. Yet when I went today I was told that it would cost £24 and that it would last much longer. That was the type of argument that was put forward. Maybe they are right. But perhaps spectacles are accidently broken or changed because one's eyes change over a period. I am not sure that one needs one's spectacle frame to last 30, 40 or even 50 years because they are almost always invariably broken long before that time has expired.
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I had my eyes tested today and it was an interesting experience. I had not had them tested for some three years. When I visited Mr. Clive Kay of Warwick Way, conveniently on my route to this House, I was told that if I wanted National Health Service spectacles I could not have them, and I could not have the lenses either, unless I had my eyes tested. I said that I really did not need to have them tested because I did not want to put any extra burden on the poor taxpayer. I said that I knew roughly what I wanted and that I am +3 on each eye, and I suspected, as it is three years since I last had my eyes tested, that 3·25 would probably be very satisfactory for me. He said "I am very sorry, but we cannot supply these unless you undergo a test." So I underwent a test. He seemed to be extremely well trained. A nice young lady took me into a back room and tested my eyes very thoroughly. After all these tests she came out and said "Yes, you were quite right, you do want 3·25." I then said "What will the taxpayers have to ante-up for that, or do I pay?" They said "No, the taxpayer will pay. It is an improved rate now", as my noble friend pointed out. They said that it would be £8, which seemed to me to be fairly good value for money for the taxpayers.
However, when I asked about all the other beautiful frames that were scattered around and where they all came from, they said that they were all imported. This brings out a point that we have made all the way along. We have said that if one goes on grossly over-charging in this country compared with every other free nation in the world, there can be only one inevitable consequence, which is that there will be wholesale importation, and in this case from Taiwan. Every single one of those demonstrated in the shop—apart from the national health ones, which comprised a very small minority—had been imported from Taiwan and had thus done away with the jobs of people in this country, valuable jobs which everyone in this House would wish to see preserved. So not only have we charged the consumers grossly more than is desirable, but we have actually destroyed jobs in this country because we are no longer competitive.
Two arguments have I think been destroyed over these many presentations, debates and Questions that we have had. Secondly, there is the question which was dealt with by a previous speaker, that to some extent to use wrong spectacles would harm the eyes. Trevor Roper dealt with this perfectly. He said that if you are using the wrong spectacles, you would very quickly get a headache and realise that a mistake had been made. Therefore, neither on the medical grounds of finding glaucoma nor on the grounds that you are harming your eyes does the argument for the continued monopoly stand up.
It is a great shame that we are about to start on yet another round of investigation. The one way in which to delay justice, to prevent the consumer getting value for money, is to have investigation on investigation. No one investigation goes on in parallel. We took a year over the last one. It was a very good investigation by the Office of Fair Trading. It was set up in December 1981, but it did not report until December 1982 because there were only part-timers on it. Now we are told that they are looking for a new team of people to set up yet another investigation.

1025
I should like to remind my noble friend that this Government were elected on a manifesto which said that they would protect the consumers and they would increase competition so that, so far as conceivably possible, everyone received value for money. I ask my noble friend for early action so that we honour that promise.
9.49 p.m.
Lord Ferrier: My Lords, I do not know quite where to begin because, when my noble friend Lord Orr-Ewing asked if I minded him taking the place of the noble Lord, Lord Donaldson, I said that I did not mind at all because I think that that ends the range of noble Lords who are inclined to become rather outspoken and almost hysterical on this matter, to the great distress of a number of us who are ordinary men in the street.
I am not happy at all about this criticism of the word "monopoly". The noble Lord, Lord Winstanley, is a doctor. He has a monopoly. There are monopolies in medicine, in the law and in dentistry. Of course there must be such monopolies. My noble friend Lord Orr-Ewing said that this Government was elected to protect the consumer: it is also elected to protect the customer and the people whose eyes have to be attended to; they must be properly protected in that respect. I am not happy about this nonsense with regard to the monopoly. After all, the report that we are supposed to be discussing, although we have heard very little about it, says clearly on page 157:
"The evidence of the survey of opticians' costs, profits and margins discussed in Chapter 8 does not suggest that opticians' profits were excessive".
However, as we shall hear from the Minister when he winds up and as has already been mentioned, the Government have found it necessary to repay to the opticians something in excess of £70 million.
If you do not want a monopoly here, what do you suggest? Is the suggestion that the supply of spectacles should be a purely business proposition, leaving eye care behind as a piece of old history? To me, eye care is an integral part of our precious National Health Service which it is our duty to nurture, and about which in a previous debate this very day we heard an outspoken expression of view on behalf of the Government that they intend to nurture the National Health Service, of which the ophthalmic services are an integral part.
After all, an independent survey of ophthalmic practice in 1981 revealed that 13 per cent. of the patients of opticians required referral for medical attention. This is where my personal interest lies. From astigmatism as a schoolboy, to the need for reading glasses after malignant malaria and massive doses of quinine in my younger days, to the advance of years requiring glasses for driving or for looking at television, I have relied on regular attention to my precious eyes, my windows on the world.
It was thus, at a fairly recent visit to an optician, that I was recommended to get my doctor to refer me to a specialist lest I might be liable to glaucoma. I lost no
1026
time in following this up, whereupon the specialist, after careful examination, said he congratulated my optician for being suspicious but that I was not likely to suffer from that condition. The suspicion which had been aroused in my optician was due to many long years in tropical sunshine.
I know that skilled medical advice is necessary. Incidentally, to my noble friend Lord Harris of High Cross, I suggest that he visits his optician and gets his frames to fit his nose properly so that he can hold them easily. It is no use suggesting that this is not a matter for specialised medical knowledge. It is such a matter. I look forward to the Minister's reply. I expect that we shall hear that the Government have the matter well in hand. I hope and pray myself that it will be many years before this debate is reimposed upon this House. I am pretty sure that the Government will take steps to try to provide against that.
I remember that in one of the previous debates one of the objections hurled at the opticians was that nobody could repair their spectacles. I happened to mention this to my secretary. The next time she came she brought me an eye glass repair kit bought at a petrol station with a key ring for 50p. So we get back to what really is at the background of all this, the old Latin tag, caveat emptor. If anything can come out of this debate it might well be that, as my noble friend Lord Colwyn suggested in the last debate, some publicity should be given to people to guide them in how they can, as buyers, take care.
9.55 p.m.
Lord Bowden: My Lords, I find myself very puzzled by what has been said in this debate. The point is that I know a great many opticians, and I find it incomprehensible that the description I have heard of them as grasping and unscrupulous people can in fact be applied to those men that I know and like. I felt that many of Lord Rugby's strictures were quite incomprehensible. I should like to introduce him, if he would allow me to do so, to some of those opticians, particuarly those who are running the Eye Hospital in Manchester, to those who are running the ophthalmic optics department in my own institution, and who are very dedicated professional men. It is most worrying to me, because the very first degree course which was ever given to ophthalmic optic students was given in my institution and was given because we were promised the opportunity to expose the students to clinical tests being performed in the Manchester Eye Hospital.
I was speaking today to the man now responsible for organising these contacts, and he said that they were in fact increasing them and that the students got a great deal of practical experience from observing eye defects. He said that many of the students saw more diseased eyes than the medical students did at a corresponding stage in their career; so they are very well able to tell when something is wrong with the eye. They are not under any circumstances expected to treat it themselves, but they can arrange for the person

1027
concerned to be referred to a consultant, usually through the general practitioner. This has led to a slight distortion of the statistics, because I believe that of all the referrals to consultants, more than half now come through general practitioners, but they have been asked to do the job by the opticians themselves.
The whole of the profession is most concerned to do what it can to preserve the eyes of those for whom it has assumed responsibility. This is what I find so extremely offensive in some of the remarks which have been made this evening in regard to their irresponsibility and the grasping sort of way in which they have seized on any available source of cash. We have already had it explained to us by Lord Cullen of Ashbourne that they were something like £70 million light at one stage in the fees due to them from the National Health Service—and what could they do? Everyone realises that it is an indefensible anomaly that the payment for eye testing should have to come out of the profits made by selling spectacles. The DHSS has now increased the fee for eye testing, and I think it is £8. The noble Lord, Lord Orr-Ewing, said that he had just had his eyes tested and he thought that the lady who did it was very well paid for her time. Has he ever tried to have half an hour of a good solicitor's time; and, if so, how much was he charged for that?
I cannot but believe that the fees they charge are reasonable. The average income of an optician is in my experience not excessive, and no one has said that it is. I cannot accept that this report which has been published by the Office of Fair Trading is a good report. Much of what it says was based on inadequate evidence, and much of the inadequate evidence was misinterpreted. They did not consult a representative body of the Ophthalmic profession; they took evidence from only one person, and he was opposed to the plan.
This is not simply a case of good versus evil: it is a case of a profession which has been struggling to be born for many years and which is doing a very good job. When people speak of the possibility of handing down spectacles, I can remember when false teeth used to be handed down. When I was a child you could go and buy false teeth in some secondhand shops in the district, and many people did this; but no one would recommend this as a good policy. It was the only thing that people could afford. The concept that spectacles can be handed down is about as sensible. It may work out that your jaws are the same shape as your father's jaws, and you can wear his false teeth. If you do so, I am sure that it will not hurt your jaws; but I do not believe that it is a policy to be commended in normal operating practice.
Lord Winstanley: My Lords, if the noble Lord will allow me to intervene, since I think he referred to my remarks, may I make it clear that not for a moment did I recommend that glasses be handed down? I said that because they were so expensive they were handed down. I said that being handed down did no actual harm to anybody's eyes; but I did not recommend it.
Lord Bowden: My Lords, I am glad about that. Conversely, I would not recommend the handing down of false teeth on the grounds that it would not damage your jaws. What I am trying to say is that we
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have heard bitter attacks on what seems to me to be basically a very responsible, sensible and caring profession. Much of the problem has been due to the fact that they were for a long time unable to survive because the fee for eye testing was inadequate and a great deal had not been paid. It is true, as has been said, that the price of spectacles has been dramatically reduced in the last few years, and even on the occasions when it has not been reduced it has not been raised, as might have been the case when, for example, the price of lenses was raised about three or four months ago.
I think the best thing I could arrange to do, if I may say this to the noble Lord, Lord Rugby, is to introduce him to some of the people who are now in Manchester arranging for the teaching of students. I should like him to get to meet some of the students and to see the conditions in which, in hospitals, they are introduced to those defects of vision so that they can spot them and cause some action to be taken to save the sight of those who might otherwise go blind.
I speak with feeling on this because my sight is going, very badly. I cannot claim to be a success story in the treatment I have had from either the medical profession or the opticians. No one was able to save my eyes, which have gone for other reasons and which are beyond medical help. I feel strongly that, despite my own difficulties, the profession is a supremely effective method of helping the general population at a relatively small price. Even the Office of Fair Trading, prejudiced as it was, did not think that the incomes that the opticians achieved were excessive. It may be that, by forcing a few out of business, the competition might come down. But, similarly, if solicitors were to advertise more, if barristers and architects were to advertise more, this might reduce the prices. But would that do anything but harm to the professions concerned? Let us remember that this profession is struggling to be born. It is not long since the dentists first acquired a charter—it was in 1923, I think—and it ceased to be possible to set yourself up in dental practice with no other tools than a pair of pincers and a chair. People were not compelled to have any medical qualifications until the Dentists Act 1923. Let us remember, too, that when the Duke of Wellington was dying he said: "Send for the apothecary!" In those days there were no physicians. Let us also remember there was a time when the barbers had to separate themselves from the surgeons in order that the surgeons could become an independent profession and achieve their present distinction.
All these professions have grown against opposition, and all are now part of society. I believe strongly that the ophthalmic opticians, beset as they are by all the difficulties canvassed this evening, are an important, worthwhile and responsible profession of both men and women who, in many cases, are the first and best people to help other people to see better.
10.5 p.m.
Lord Energlyn: My Lords, I do not think any of us could fail to admire my noble friend Lord Rugby for his persistence in trying to put right something which he firmly believes is wrong, and which many people likewise believe is wrong. In listening to the various

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contributions to this debate, I suggest that one thing has come out quite clearly: that is, that there are two different subjects here. One is a medical subject and the other is a commercial subject; and it is the combination of these two subjects which has led to the substance of this debate.
The reason we are debating it this evening is because of the clumsy, badly-worded, ambiguous and contradictory statements in the Act. It is an extraordinary Act, full of ambiguities and misunderstandings, and although I have a great affection for the noble Lord, Lord Cullen of Ashbourne, his speech—his heartrending speech—on behalf of the opticians did not touch me at all, because the 14th Report of the Public Accounts Committee, says:
"We are glad to note the willingness of opticians concerned to repay promptly the £3 million involved for that period."
They rushed to pay back £3 million to the DHSS. What does it mean? It means that they were not entitled to it. This is what the Public Accounts Committee are saying—that throughout the whole plexus of this commercial enterprise are what they describe in very careful terms as "unintended profits". They have not been able to unearth sufficient evidence to provide accurate figures as to what these unintended profits might be. The best they can do is to suggest that they are somewhere between £3 million and £5 million per annum. If the opticians are pleading poverty, it is an extraordinary situation that they are suddenly able to repay £3 million for unintended profits. That is the first point I should like to make.
Lord Bowden: My Lords, may I ask the noble Lord this question: is it not also true that the Public Accounts Committee had to admit that they owed £70 million and if they paid them a bit in excess of the £70 million they then had to repay £3 million of that?
Lord Energlyn: My Lords, that is quite correct and it rather pinpoints the fact that these opticians are apparently entitled to their £70 million, by virtue of Section 21. The question before us is: is Section 21 an admissible monopolistic section? I challenge that really, because if you read Section 21 carefully—and I do this as a scientist—how can you get away from the simple language, ambiguous though it is, of subsection (3) which says:
"Subsection (1) of this section shall not apply to the sale of an optical appliance"?
In other words, the monopolistic part which involves the medical professions of Section 21(1) does not apply to four following categories. Category (b) says that subsection (1) shall not apply
"to a manufacturer of or a dealer in optical appliances for the purposes of his business;".
His business is to manufacture spectacles and his business is to sell spectacles. So, as I read that Act, there is no difficulty about anybody manufacturing and selling spectacles. That is what the simple, Queen's English tells me. It is emphasised by the fact that if he is not allowed to do that, he can, under subsection (3)(e), ignore subsection (1) for the purposes of export. In other words, he can manufacture spectacles for anybody abroad, but according to subsection (1) he cannot sell them in this country. I could therefore argue that under subsection
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(3) there is no argument; it is just a misunderstanding. But you get hooked when you come to subsection (4), under which the General Optical Council can fine you and put you out of business if you sell spectacles, unless they are antiques. Therefore subsection (4) contradicts subsection (3). These are the kinds of contradictions that one finds.
Without going into the question of the merits or otherwise of the subdivision between the mechanical and the medical aspects of his profession—and I think I can claim to speak with some authority as I once was a professor of optical mineralogy and I have invented a number of so-called optical appliances—there is a clear distinction between testing eyes for focal length and dispensing ophthalmology. They are two entirely different things. As many noble Lords have pointed out, you can borrow somebody's glasses and it will do you no damage whatsoever.
This introduces two quite fascinating repercussions. Ready-to-wear shoes are selected by the wearer. He decides whether or not they fit. Similarly, with ready-to-wear glasses, which you could buy before the Act, it was the purchaser who decided whether or not he had got sufficient magnification. The report states quite clearly that no damage can be done to your eyes as a result of these ready-to-wear spectacles. If you talk about industry and the competition from Taiwan, why is it that you have glass lenses placed into frames? Commercially, it is a very good idea, because the Department of Health and Social Security will pay for the glass lenses and you can charge whatever you like for the frames. Furthermore, why is it that you are kept waiting three or four weeks for a pair of spectacles? The commercial reason is that a person who is handicapped to this extent will buy two pairs of spectacles. One pair is for contingencies. So this increases sales. It is very subtle.
To go a little further, I would say, in support of the noble Lord, Lord Northfield, that many of us could suggest to the Minister several quite minor amendments which would bring the whole matter into line—for example the clarification of subsection (3). This means that you now look at the activities of the General Optical Council. Are they above reproach? Or are they above criticism? They are the people who determine who goes on to the register and who does not. What enables you to get on to the register? A certain number of qualifications, but above all you must be a person of good character. That is absolutely clear in the Act.
Under the clauses relating to erasure, I would ask the Minister how many cases he could quote—I choose my words very carefully—of dispensing opticians and corporate bodies who have been erased from the register by virtue of their character. I wonder whether the noble Lord can tell us how many, because I have not been able to find a single case.
That is an important point because it highlights the fact that, unlike the Pharmaceutical Society and the pharmacists, there is no inspectorate in the General Optical Council. In other words, there is no jurisdiction over or inspection of the standards of an optician. Yet these gentlemen have access to drugs and all kinds of things. There is no means of deciding whether an

1031
optician is behaving properly or otherwise, unless he is reported to the GOC.
Who will report someone to the General Optical Council? It would have to be one optician reporting another. What would he be reporting the other optician for? He would not know. He would not be reporting him for commercial malpractice. But if one of the opticians commits a criminal offence, then the picture is entirely different. And a criminal offence was perpetrated in 1979. I hate to use this kind of argument, but I have to use it in order to emphasise the behaviour of the General Optical Council.
In 1979 there was a certain gentleman named Mr Brian Harris, who was committed for the misuse of drugs and sexual offences. He owned nine optical firms in Blackpool. He was committed. The police reported him to the General Optical Council but the council took no action. His name was on the register after he came out of prison. This means that the GOC is prepared to ignore the primary qualification of good character. One might think that this was an isolated incident—but not a bit of it.
In March of this year, this same gentleman was caught by the police again perpetrating the same criminal offence. He was convicted. But because he has nine businesses, even if he is struck off the register, he can still take the profits out of his business. Be that as it may, his name is still on the register and the General Optical Council have taken no action.
I come rapidly to the point of trying to establish that it is time—as the noble Lord, Lord Orr-Ewing, has said—to do something. It is high time for the noble Lord the Minister to assure us that he is prepared to accept our assistance in modifying the Act so that this discussion can cease and the public can get value for money.
10.18 p.m.
Baroness Jeger: My Lords, I understood from the Order Paper that we were supposed to be discussing what action the Government propose to take in respect of the opticians' monopoly following the publication of the report of the Office of Fair Trading. I must admit that many speeches have seemed totally irrelevant to this, and that is a matter for some regret to those of us who have studied this report carefully and who hoped that it was to be the subject of tonight's debate. Those of us who have survived many debates on this subject will regret that the matter does not seem to have been taken much further forward. We have to agree that there must be some revision and some changes in this set-up. This report should have taken us a step forward on that way. I hope that the noble Lord the Minister will be able to point us in the direction that the Government have in mind.
Because of the lateness of the hour, I will only say that we are grateful to the noble Lord, Lord Rugby, for giving us an opportunity to discuss this important matter. I should like to refer also to the involuntary absence of my noble friend Lord Crook, who very much regrets that, owing to ill health, he is not able to be with us tonight. Your Lordships will remember that he was chairman between 1949 and 1952 of the committee which did try to set out how the optical
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services could be made an integral part of the National Health Service. This I think is the position which many of us would want to keep: that optical services are part of the National Health Service and not part of a marketing set-up. Many of us regret that quite rightly when the Government wanted some investigation into the situation, the matter was referred to the Office of Fair Trading rather than to the DHSS, because many of us do not think that the question of eyesight is a matter for trading practices.
I would only say this to my noble friend Lord Northfield, whose views I well understand, that there is one point I do not understand. He referred to the fact that many noble Lords ask him to bring back cheap spectacles from the United States. I find that when I go to the United States all my friends envy my NHS glasses and ask me if I can get them some of these, with an eye test thrown in for nothing. I really think the United States has nothing to teach this country in terms of public health care in any sphere whatever, and anyone who calls in aid practices of the non-national health service in the United States really is going backwards in history, and I am only very sorry about them. In the United States the question of health care, including eye care, is purely one of merchandising. I think that is perfectly unacceptable.
The noble Lord, Lord Northfield, also suggested that the figure of people at risk is negligible. My Lords, I say to you that if one person loses their eyesight through changes in our procedures that is one too many. For those noble Lords who mentioned the difficulty of getting a spare set of spectacles—and I refer particularly with all understanding to the noble Lord, Lord Orr-Ewing—anyone can ask their optician for a spare prescription. That cannot be refused. I hope that because this matter has been raised in the debate tonight there will be more public information about this fact.
I will say to the noble Lord, Lord Orr-Ewing, that I am glad that when he went and had to have his compulsory eye test he came out with a clean bill of health and felt that he need not have had it. But I can tell him about a friend of mine who happens to work in this House who was in the same position. He came out from what he thought was a routine eye test to get a spare pair of spectacles with a letter to his GP, and he ended up with a diagnosis of cancer of the eyeball. If that optician had not insisted on doing what was thought to be a purely routine examination that man would probably have lost his sight, if not his life. I am informed that 13 per cent. of patients who go to opticians are referred to general practitioners for all sorts of problems. They may turn out to be not serious at all. But how much better that the optician sends the patient to the GP, even if the GP says that there was not any need for it.
My Lords, had we discussed the matter on the Order Paper more fully, I think some noble Lords might have noticed, even if they had not bothered to read the report, that it does suggest that in matters concerning children and in contact lens cases the present situation should continue, that there should be no buying and selling over the counter of contact lenses or in dealing with children.
I must suggest to your Lordships that if one takes away from an optician in a small town or village

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everything except contact lenses and dealing with children one will destabilise his business. How can he pay his rates and how can he meet his overheads if people are all rushing to Woolworths to buy their ordinary spectacles and he is told that he must stay and pay his overheads because someone might want contact lenses or to bring their child to him? That makes it very difficult for opticians to carry on their businesses.
I do not know why there has been so much talk tonight about profiteering. I know many opticians and none of them seems to be exactly a fat cat living very high on the hog, if I may mix my zoological metaphors. The DHSS guidelines suggest that about £12,000 a year would be pretty fair earnings for opticians, but research shows that about 60 per cent. of opticians over 45 earn less than 10,000 a year. If we take it on a purely commercial basis, there will be a reduction in income for rural practitioners, and for people who try to do domiciliary work and who look after children.
I honestly believe that we must get away from this commercial approach. Some noble Lords blame the opticians for having a commercial approach, but some of the speeches tonight have been a matter of real marketing commercialism. We have to consider the benefit, if any, of greater trading competition against the risk of undiscovered ocular abnormality. I have already said that I wish the Government had asked the DHSS to look into this and I understand that they are doing so.
Lord Northfield: My Lords—
Baroness Jeger: No, my Lords, it is too late and the noble Lord spoke a great deal longer than I intend to speak. He has often taken longer than I intend to speak.
Let us never lose sight of the fact that the Opticians Act was put on the statute book to safeguard the most precious of our senses. Although we have talked a great deal about the cost of spectacles tonight I trust that your Lordships will give fair consideration to the cost of eyesight, which is a price beyond reckoning. However small might be the number of people whose eyesight would be at risk by breaking the present relationship between diagnosis and prescription, one person's loss of sight would be one too many. A single case of preventable blindness, or even partial loss of vision, would be too heavy a price to pay for cheaper, jazzier spectacle frames.
10.29 p.m.
Lord Trefgarne: My Lords, it would be as well for me to say at the outset that I have no major announcement to make to your Lordships' House this evening. I suppose I could sit down at that but perhaps I should go a little further. I am sorry to say that the Government are not yet ready to reach firm conclusions on this aspect of the report by the Office of Fair Trading.
Your Lordships may wonder why it is that we have not yet reached firm conclusions on a report published in January. It may help to recall the genesis of this report and the nature of its conclusions. The review
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undertaken by the Office of Fair Trading had its origins in public concern at the high cost of private spectacles. Indeed, the noble Lord, Lord Rugby, and other noble Lords, have been unstinting in their efforts at articulating public concern on this matter. It was felt that among the possible factors leading to this high cost were the restrictions on competition which arose from the provisions of the Opticians Act 1958. The Director General of Fair Trading was accordingly asked to review the effect upon competition of two aspects of that Act: first, the statutory monopoly to sell optical appliances conferred by Section 21 of that Act upon registered medical practitioners and registered opticians; secondly, the rules of the General Optical Council made under Section 25 of the Act concerning advertising by opticians.
I would remind your Lordships that the director was not asked to come to any conclusions on whether the Act should be revised in any way, since this raised questions of public interest which went wider than the competition aspects to be dealt with by his review. In my opinion, the report by the Office of Fair Trading has been very helpful in providing a clearer picture of the ways in which the Act operates with regard to competition and therefore prices. Indeed, it makes out a strong case on competition grounds for some relaxation of the present restrictions. With regard to those on advertising, my honourable friend Dr. Vaughan announced in another place on 19th April that he had taken up with the General Optical Council the need to take early steps to reconsider those of its rules which affect competition and can be changed under Section 25 of the Opticians Act. This has already borne some fruit, as I shall mention in a moment. But it does show that the Government have taken the report seriously.
As regards the removal of the statutory monopoly, the central question which the Government are addressing is the balance between the benefits of greater competition and the risk, in the absence of Section 21 of the Act, of symptoms of abnormality and disease not being discovered as a result of breaking the present link between the sale of spectacles and sight testing. This is an important question and full weight must be given to the health care factors involved and not merely to considerations of competition or price.
Your Lordships may be aware that one of the individuals invited to submit evidence to the Director General of the OFT was the distinguished ophthalmologist, Dr Trevor-Roper. Indeed, a good deal of weight was attached in the report to his views. Your Lordships will be familiar with that illustrious family name and will, I am sure, understand that determining the validity of evidence on complex issues is a delicate and difficult matter; and your Lordships will appreciate the Government's wish to give the most careful consideration to the arguments on all sides regarding the question of opticians and competition.
I would therefore ask your Lordships to bear with us a little longer while we continue to evaluate the evidence and receive further advice. I can assure you that this is not being done for any reason other than the desire to be as positive as we can that we are not exposing the sight of vulnerable members of the public to unnecessary risk. Your Lordships may well ask whether the same risk is attached to patients taking a

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recent prescription obtained from an ophthalmic medical practitioner or ophthalmic optician to an unregistered person for dispensing. Changing the Opticians Act to allow unregistered dispensers to sell glasses against a prescription from a registered ophthalmic medical practitioner or registered ophthalmic optician would retain the link between sight-testing and the supply of glasses, and therefore would not open the public to the risk of undetected eye disease. Could we not perhaps proceed more speedily in this way by freeing dispensing and obtaining the benefits of competition without incurring these same risks to health?
Even on dispensing, however, the arguments are not all in one direction. Standards of dispensing in the United Kingdom are high. If the need for statutory registration was removed and untrained people could enter the field, standards would inevitably fall. Unskilled dispensing is probably not harmful to the eye. However, unskilled dispensing could well result in less than optimal improvement to sight and could perhaps act as a contributory cause to accidents. It may well be that this is a very small risk, but I personally would not choose to be driving down the M1 behind or in front of somebody who had less than perfect eyesight. I recall also that before I came to your Lordships' House I was a pilot. I had on my licence an endorsement to the effect that I had to wear "approved correction to defective vision". I imagine that those of your Lordships, if there are any, who had the misfortune to fly with me would have preferred that the glasses that I was wearing were the correct ones.
The report makes it clear at paragraph 9.31 that the OFT
"did not seek evidence on the question of disease".
They merely
"reported the arguments that were put to"
them and acknowledged that
"they may not represent the comprehensive range of views upon clinical matters".
That is why we are continuing to evaluate the available evidence and receiving advice.
The noble Lord, Lord Harris of High Cross, referred specifically to the poll of Ophthalmological Society members. I fear that the poll cannot be regarded as disposing of informed medical opinion on this matter. The question was a little naïve in referring to repealing the monopoly to "sell simple reading spectacles". Those polled may not have realised the problems in defining reading glasses. As the OFT says,
"One person's reading glasses could well be identical to another person's prescription for distance vision, and a cut-off in terms of lens power would be arbitrary and difficult to apply".
The results are also ambiguous. Out of 654 members polled, only 55 per cent. replied. It is simply invalid, I believe, to ascribe to the missing 45 per cent. the views of those who did reply —
Lord Orr-Ewing: My Lords, will my noble friend allow me to intervene? While throwing distrust on that survey, has my noble friend noticed that there has been published a survey undertaken by the optical bodies themselves, who have an interest in this matter? My noble friend has not commented on the veracity of
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that. Perhaps they, too, have gained a distorted impression as a result of their examination of those who wish to see an improvement in the supply arrangements.
Lord Trefgarne: My Lords, I am trying to demonstrate that the arguments in these matters are not all in the same direction, and those who come before your Lordships seeking to rely on one particular set of arguments need, I think, to have those arguments questioned. I am quite prepared to agree that the other arguments that have been adduced are of equal validity, though maybe they are 100 per cent. in the opposite direction.
Several noble Lords referred to the question of glaucoma referrals. One risk to health of breaking the link between sight testing and the supply of spectacles is that of glaucoma. Evidence on the value of screening the population for this eye disease is, I admit, mixed. We cannot however totally dismiss the fact that recent studies show that four-fifths of referrals of glaucoma patients to eye hospitals were made following a supposedly routine eye test for spectacles by an ophthalmic medical practitioner, or ophthalmic optician.
These are weighty questions, which need to be carefully evaluated. I agree that we are not in general talking about risk to the sight of individuals. We are however talking about the future shape of a service which contributes to the general optical welfare of the public as a whole. Again, I would ask for patience while we weigh the costs and benefits on this score, also. My noble friend Lord Cullen suggested that these matters should await the review of the General Ophthalmic Service. That review is to start in the near future, and is expected to take some 18 months to complete—
Several noble Lords: Oh!
Lord Trefgarne: My Lords, the process of selecting a chairman and members is under way. Interested bodies, including the Federation of Optical Corporate Bodies, have been consulted on the terms of reference, and these are being revised in the light of the comments received. While the proposed terms of reference for the review include a review of the Opticians Act, it is not the Government's intention to delay consideration of the Office of Fair Trading Report on this account.
In the meantime, we are not unmindful that public concern at the cost of private spectacles has not diminished. As I mentioned earlier, the General Optical Council is undertaking a thorough revision of its rules on publicity with a view to deciding what relaxation of the rules will allow fuller information to be given to the public. We expect that this will be completed within the next two months, that we shall see some real progress on this front, and that this will result in cheaper spectacles for the public. Even now, however, the price of private spectacles is falling, as my noble friend Lord Cullen has observed.
It is true that the OFT found evidence that some opticians had increased the profitability of their private work as partial compensation for the decline of the profitability of their NHS business, as a result of NHS fees not having been changed for some years.

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Others may even have been able to compensate fully. Agreement has now been reached, and new fees levels and substantial back-payments have been implemented. This has given scope for some reduction in the price of private spectacles. Indeed, as the OFT observes, without such reductions profits would become excessive. There has been evidence of reductions. Nevertheless, the Government share the OFT's pessimism that without action to increase competition these reductions will not be as significant or as widespread as they could be. I cannot therefore share my noble friend's view that the increase in NHS fees obviates the need for the Government to give serious attention to the conclusions in the report in favour of improving competition among opticians.
The Government take extremely seriously the public's concern about the cost of private spectacles. However, they also have to take extremely seriously both health risks for the public and the long-term future for the general ophthalmic service provided by the NHS. I hope that your Lordships will be content to wait a little longer for our definitive views on the future of the opticians' monopoly.

Ashridge (Bonar Law Memorial) Trust Bill
Reported from the Unopposed Bill Committee with amendments.

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