Lords Sitting of 13 December 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 Carlisle.
Viscount Tenby—Sat first in Parliament after the death of his brother.

Prisons: Standards
Lord Hunt: 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 the state of progress towards publishing a code of standards for prisons.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, my right honourable and learned friend wishes to proceed with this matter in the context of his new policies for improving the amount and quality of prison accommodation. He proposes to begin by publishing next year an account of the standards used in building new establishments.
Lord Hunt: My Lords, while thanking the noble Lord the Minister for his Answer, may I ask whether he recalls that 18 months ago—on 22nd June last year—during the Committee stage of the Criminal Justice Bill, he informed the House that his right honourable friend the Home Secretary had asked the prison department to prepare a draft code of standards as a basis for discussion; and that he anticipated it would be published in the currency of this year—in 1983? Does the Minister further recall that his honourable friend Sir Patrick Mayhew in another place, in replying to a Written Question by Mr. Kilroy-Silk, also anticipated that the code of standards would be available in 1983? Is it not high time that your Lordships' House should have an opportunity to see that document and to approve it, in view of the scandalous conditions which persist in many of our prisons, as illustrated by a recent BBC film on conditions in Brixton?
Lord Elton: My Lords, I recall the exchanges in this House quite clearly, and I am aware of the exchanges in another place. We have decided that the best way to proceed is the one I have described; but because we have changed the method, it will take a little longer than intended. We intend to publish the exact details of what we are now doing, and the noble Lord's views on those will be welcome.
Lord Donaldson of Kingsbridge: My Lords, is the noble Lord the Minister aware that it is generally thought by people who are interested in these affairs that the present standards as maintained in Her Majesty's prisons are well below the standards
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demanded in the European Community, and therefore that any delay is really not acceptable? This sounds far too slow a method of progress.
Lord Elton: My Lords, what makes a difference is money and activity. We are launching the biggest prison improvement and building programmme of any Government this century. We are reducing the length of time it takes to create a new prison by up to 18 months. These factors will alleviate the conditions in prisons. That does not mean that I do not think the standards are important or that the views of the noble Lords should not be known as soon as they are available.
Baroness Sharples: My Lords, can my noble friend assure the House that thought will be given to the wives and children when they visit prisoners?
Lord Elton: Yes, my Lords. Every prison has a visitors' complex and our experience with the old prisons gives us a clear indication of the mistakes to avoid in the new prisons.
Lord Avebury: My Lords, can the noble Lord the Minister confirm, as he told me in a recent answer to a letter about the floor area of cells in dispersal prisons, that the floor area has in fact been reduced in prisons constructed most recently, and that there was no reason for this in terms of the standards which prisoners should enjoy? Will the Minister also say what he considers should be the minimum temperature which is experienced by prisoners in the dispersal system, and why he recently suggested to me in a letter that if prisoners did not like the cold in the strip cells at Parkhurst they should put on more clothes?
Lord Elton: My Lords, I cannot agree with the noble Lord's first two allegations. I should like to reflect on what it is that he is implying. I am not clear about that, but the noble Lord seems to be saying that the standards of provision we now have in view are lower than those we have had in the past; and that is not so. As to the temperature and other details, they will be for discussion later when the standards are published. As to the individual case mentioned by the noble Lord, it seemed to me sensible that as the prisoner in question had clothing available, if he thought the cell was too cold he might have worn it.
Lord Mishcon: My Lords, does the noble Lord the Minister realise that the anxiety of this House on all sides exists because of the lamentably low standards that at present exist? Does he remember not only the discussion at Committee stage—as the noble Lord, Lord Hunt, reminded him—but also the resistance to an amendment regarding standards which was answered by the promised publication of the standards? Lastly, may I ask the Minister whether he does not realise that the excuse given—namely, that of expense—may apply to the application of standards, but does not apply to the publication of those standards with reasons being given why they cannot be implemented at once? Will the Minister therefore try to expedite the matter?
Lord Elton: My Lords, I am not in the business of making excuses. I am acutely aware of what conditions are like in prisons because I visit a great many of them. I do not need your Lordships' urging to realise that this is a serious, important, and, in many cases, a tragic position in which we find ourselves. Perhaps I ought to remind your Lordships of the very large programme we have now initiated at a time of financial stringency, when other departments are cutting back, to rectify the situation in terms both of physical provision and of manpower. Anything I can do towards expedition I will do.
Lord Mishcon: My Lords, may I just ask the noble Lord the Minister whether, with his usual courtesy, he will answer my last question: why must there be any delay in the publication of what the standards should be? One would accept thereafter the reason for not implementing those standards for some time.
Lord Elton: My Lords, I am grateful to the noble Lord, Lord Mishcon, for reminding me of his last supplementary question. The material from which we have decided to draw the publication is voluminous and complex and will have to be reduced to manageable terms for the public. I had the same reservations as the noble Lord when I found that we could not publish as soon as I wished. I can assure him that it will be done with the greatest despatch at my command.
Lord Hatch of Lusby: My Lords, the noble Lord will recall that I recently asked him a question about Holloway and he very courteously offered to have private discussions about this, which I hope to take up at a suitable time. May I ask the noble Lord one question about Holloway? Is he aware that, as I understand it, padded cells are not allowed to be used in Holloway Prison? Can he explain why that is, particularly in view of the fact that the evidence seems to suggest that a number of prisoners in Holloway have damaged themselves because of the lack of protection on the walls?
Lord Elton: My Lords, I do not wish to seem in any way discourteous or unfriendly to the noble Lord, but the Question is about the state of progress towards publishing a code of standards for prisons. The noble Lord obviously has particular cases in mind. I wonder if we could discuss this point at the same time?
Lord Hunt: My Lords, would the noble Lord accept that I understand that he is personally imbued with this sense of urgency which has been expressed from all sides of your Lordships' House? Would he further accept that I acknowledge that this is not a sin of omission of this particular Government, but that successive Governments over many years have failed to conform to the minimum standard rules laid down in the United Nations in 1955 and by the Council of Europe in 1973? In the light of that, would he bear in mind the additional urgency and urging that have been imparted to him during this exchange that we should expedite the action to conform with those two sets of rules, to both of which we are signatories?
Lord Elton: My Lords, of course I will take away the added sense of urgency the noble Lord wishes to
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impart. I should say that there are differences between European SMRs and those that we propose, in that ours will be rather more precise.

The Civil Service: Administration Trainees
2.45 p.m.
Lord Rochester: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the position regarding the recruitment of graduates as administration trainees in the Civil Service.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, not altogether. Although nearly twice as many administration trainees have been recruited this year compared with 1982, a shortfall remains. The Civil Service Commissioners are, however, accelerating the selection process, strengthening their graduate liaison arrangements and publicising the competition more widely, in order to improve the position.
Lord Rochester: My Lords, I thank the noble Earl for that reply. Does he agree that the management of change, and in this case of contraction, calls for special skills and qualities of leadership? If graduates of the required potential are not coming forward in sufficient numbers to achieve the Government's objectives, what is being done to identify the reasons and to put things right?
The Earl of Gowrie: My Lords, there are two points at issue here. Part of the shortfall, in spite of the improvement I mentioned, is, I think, welcome to this degree: that it is a product of increasingly keen competition among employers for able graduates as the economic position is improving. Of course, we would not want it to be otherwise. In terms of our reponse, we are, of course, implementing Sir Alec Atkinson's report, which was received earlier this year and which is designed to gain wider publicity for the scheme and to improve our liaison in universities, particularly in the newer universities.
Lord Glenamara: My Lords, can the noble Earl say how many graduates have been recruited from the polytechnics? They produce graduates as well as the universities.
The Earl of Gowrie: My Lords, I am grateful to the noble Lord, Lord Glenamara, for that correction. In fact Sir Alec Atkinson did recommend vigorous efforts at the polytechnics, and that is taking place.
Lord Beswick: My Lords, is one factor in this the low morale of the Civil Service generally, and the fact that the reputation, spirit and idea of public service have been denigrated so much in the last two or three years by the present Government? Is not that having an effect upon recruitment?
The Earl of Gowrie: My Lords, I think that is a most extraordinary suggestion. The Government

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enormously value the contribution of civil servants and admire their professionalism. That the Government should be putting its own house in order in terms of manpower and other costs is in no way a denigration of the efforts of those who work in the Civil Service.
Baroness Fisher of Rednal: My Lords, may I ask the noble Earl whether he can give us the percentage of female graduates included in graduate recruitment?
The Earl of Gowrie: My Lords, as I am sure the noble Baroness will be aware, there is no bias against women in the selection process. My advice is that over the last decade women have filled something like one-third of the administration traineee vacancies. This proportion is roughly in line with the proportion that women form of newly qualified graduates generally, and therefore the position is equitable, though we should of course like to see it improve.
Lord Leatherland: My Lords, if the Government have such a very high opinion of civil servants, why are they at present engaged in the wholesale sacking of them?
The Earl of Gowrie: My Lords, if the noble Lord, Lord Leatherland, would care to parade in front of me a lot of sacked civil servants I shall be delighted to deal with the issue. I think he will find them hard to find.

Heating Benefit
2.50 p.m.
Baroness Gardner of Parkes: 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 the present sum claimable as a "heating addition", and what are the criteria for eligibility; how many people received additions in 1982–83 and what was the corresponding figure for 1978–79.
Lord Lucas of Chilworth: My Lords, the principal rates of heating addition paid to people on supplementary benefit are £2·05p or £5·05p. The circumstances in which these additions are paid are contained in Schedule 4 to the Supplementary Benefit (Requirements) Regulations 1983. Broadly speaking, heating additions are paid to supplementary benefit claimants who need extra warmth because of age or because they are in poor health; to those who consume more energy because their homes are hard to heat; and to those who have central heating in their homes. This is all set out in the simply-written leaflet, Help with Heating Costs, which is available from the DHSS and also from post offices. In 1978 about million people received these heating additions. In December 1982 the figure was 2½ million.
Baroness Gardner of Parkes: My Lords, I thank my noble friend for that Answer. Can he tell me how this increase in the heating addition compares with the rise in the cost of fuel prices in that same period since 1978?
Lord Lucas of Chilworth: My Lords, supplementary benefit heating addition rates are now at the highest real level that they have ever been. Since 1978, fuel prices have risen by a little under 100 per cent., while heating additions have gone up by 140 per cent. They were recently increased, in November of this year, in line with the 8·6 per cent. increase in the fuel element of the retail price index in the year to last May. The sum of £350 million is being spent this year on heating additions.
Baroness Jeger: My Lords, can the noble Lord say whether, in view of the muddle and delay over housing benefits, there is some delay for certain people in receiving their heating allowances because of the processing of the housing benefit claims? Can he tell the House who is supposed to assess the heating needs of people at a time when the Government are telling local authorities to cut their staffs? What is the delay between the application from a person for such an allowance and actually receiving it? How many claims are still waiting in this cold December and have not yet been processed? Would it not be a good idea for the Government to keep the charges down for everybody and spend more money on insulation and other housing improvements?
Lord Lucas of Chilworth: My Lords, I do not think that I can agree with the tenor of the series of questions put by the noble Baroness. The housing benefit scheme was introduced in 1982 through 1983, and there are few claimants now who do not have knowledge of what is their entitlement. There is an adjudicator within the Department of Health and Social Security who makes an assessment of the need. From January of next year there will be an application form (which, incidentally, has had a Clear English Award), and which can be used through the post. This will certainly reduce the amount of time it takes for a claimant to receive an authority. If the claimant is not satisfied with the adjudicator's decision, there is an appeal process. I regret I cannot tell the noble Baroness how many people are currently waiting for a confirmation. My understanding is that it is not very many.
Lord Banks: My Lords, can the noble Lord say whether it is correct that the current heating additions at the two rates he mentioned are only enough to keep a two-bar electric fire on for two-and-a-half hours and six-and-a-half hours respectively?
Lord Lucas of Chilworth: My Lords, I am not able to confirm that as I am not an electrical engineer.
Lord Kilmarnock: My Lords, the noble Lord mentioned spending the amount of £350 million on heating additions, which is the same sum given by the noble Earl, Lord Avon, to my noble friend Lady Burton of Coventry recently. I have just received a letter from the noble Lord, Lord Glenarthur, saying that the abolition of standing charges for pensioners would cost only £300 million, which is £50 million less. Are the Government looking into this to see what is the right balance and the best way of achieving help to old people in their homes?
Lord Lucas of Chilworth: My Lords, I can confirm the figure given by my noble friend Lord Glenarthur to

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the noble Lord that the abolition of standing charges would cost £300 million. I can also confirm that, if the standing charge were removed, the £300 million would have to be recovered from other people and undoubtedly that would be the other consumers. It would be the rich who would benefit from such an abolition and not the poor. We believe that a better way to help the poor is through the supplementary benefit scheme and those additions to which I have referred.
Baroness Gardner of Parkes: My Lords, will my noble friend confirm that this is a heating addition and that it is not intended to bear the total heating bill? I ask that question in relation to the comment from the other Bench on how long it would run a fire. Will my noble friend also tell me how the Government's record compares with that of previous Goverments? What proportion of people on supplementary benefit obtain heating additions now compared with 1978?
Lord Lucas of Chilworth: My Lords, I can confirm to my noble friend that the addition is, in fact, an addition. There are basically two rates: £2.05p and £5.05p per week. That is in addition to any other benefit which might be received. There are, of course, certain criteria that must be met.
As regards the Government's record in this matter, this Administration introduced these additions for those over 70 years of age and under five years of age and the total rate has increased from, I think, 75 pence to the minimum figure of £2.05p, which is considerably more than has been achieved by any other Administration.
The last part of my noble friend's Question referred to numbers. In November 1978, 53 per cent. of all claimants received heating additions. This figure has now risen to 60 per cent. The proportion of pensioners and other persons on supplementary benefit receiving heating addition has risen from 70 per cent. in 1978 to 90 per cent. in 1982.
Lord Hale: My Lords, did the Minister say in replying to a previous question that he does not know anything about electricity and that therefore he cannot answer a perfectly reasonable question about the heating of a house? Does this mean that the whole of his staff knows nothing about electricity or other forms of heating? If so, would not another Minister who is fully informed serve the House better, if not the Government?
Lord Lucas of Chilworth: My Lords, I am sure that if the noble Lord, Lord Hale, reads Hansard tomorrow he will see that in answer to the question put by the noble Lord, Lord Banks, who asked me whether I would confirm that £2·05p would allow a two-bar electric fire to burn for, I think he said, two hours, I said that I did not know because I was not an electrical engineer. I do know something about electricity and I do know something about the costs. I can tell the noble Lord, Lord Hale, that those officials in my department know all about this. That they did not write that particular formula down for me is regrettable. I will certainly confirm whether the noble Lord, Lord
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Banks, is correct and advise the noble Lord, Lord Hale.
Lord Mishcon: My Lords, before the noble Lord the Minister gets too irate, will he acknowledge that the House was delighted to learn that a letter which is being sent out has received a Clear English Award? In view of the Question asked earlier by the noble Lord, Lord Rochester, would he care to inform the House whether this admirable letter was drafted by a graduate civil servant or a non-graduate civil servant?
Lord Lucas of Chilworth: My Lords, I assure the noble Lord, Lord Mishcon, that I am not irate but that if I am to be quoted I should like to be quoted correctly. Perhaps I should tell the noble Lord, Lord Mishcon, that I did not refer to a letter but to a claim form for supplementary benefit.
Lord Kilmarnock: My Lords, may I confirm that the figure of £300 million given by the noble Lord's colleague was for the abolition of standing charges for pensioners only and would not have the effect of spreading this benefit among people who did not need it?
Lord Lucas of Chilworth: My Lords, I regret that I have not seen the letter that the noble Lord has received from my noble friend. I shall certainly look at that and be happy to confirm the matter to him.
Lord Bishopston: My Lords, in answer to the Question asked by his noble friend Lady Gardner of Parkes regarding the records of this Administration and the previous one, why did the Minister not tell her that, thanks to the levy on gas and electricity, something like £1,000 million has been added to the bills paid by everyone, including pensioners? Does he agree that his concern to help the poor is hardly consistent with the proceeds of such a tax going to the Government and being designed eventually to help higher income groups by reducing their income tax?
Lord Lucas of Chilworth: My Lords, first of all, I did not mention the matter because it is not true, and neither did I think that it was relevant to the series of questions that my noble friend Lady Gardner of Parkes addressed to me.
Baroness Fisher of Rednal: My Lords, would the Minister look into the question of deaths from hypothermia and make sure that a study is made to see that those people who are entitled to the heating addition are taking up the benefit? Is it also possible for the department in some way to be more helpful to those who do not understand the system?
Lord Lucas of Chilworth: My Lords, during the debate on 8th December my noble friend Lord Avon gave figures with regard to deaths from hypothermia. It is regrettable that any death should be caused by hypothermia. I am assured that the department takes note of causes of death, particularly among elderly pensioners, especially those who live alone.
Baroness Ewart-Biggs: My Lords, will the noble Lord say whether the level of heating additions for

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which the citizens of Northern Ireland are eligible is the same or higher than that in Great Britain, as I believe heating prices are higher in Northern Ireland?
Lord Belstead: My Lords, this is an absorbing Question but I think that the next Question on the Order Paper is equally absorbing. Perhaps when my noble friend has answered the noble Baroness it will be time to move on.
Lord Lucas of Chilworth: My Lords, to my great regret I have to tell the noble Baroness that I am not able to answer that question; but I shall certainly find out and write to her.

The Falkland Islands: Records s
3.2 p.m.
Lord Avebury: 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 for how long they have kept documents relating to the question of sovereignty over the Falkland Islands, borrowed from the Public Record Office; when they intend to return these documents, and why they have refused either to publish a list of the papers abstracted or to allow access to them in the Foreign Office where they are now being held, notwithstanding the fact that none of the documents was classified.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, matters relating to the question of sovereignty over the Falkland Islands continue to require the detailed study of records. To publish a list of records as requested would involve disproportionate expense. When records are no longer required they are returned to the Public Record Office.
Lord Avebury: My Lords, if it would involve disproportionate expense to publish a list of the records, does that mean to say that there is a vast number of them held in the Foreign and Commonwealth Office? Is the noble Baroness aware that when I spoke to the records administration office of the PRO yesterday I was told that a number of documents were still being retained but a decision was expected to be made shortly on their continued retention by the Foreign Office, depending on the political situation? Will the noble Baroness say what changes in our relationship with Argentina have to be accomplished before these documents will be returned to their rightful place?
Baroness Young: My Lords, on the first part of the noble Lord's supplementary question, I can confirm that in any one year about 5,000 documents are withdrawn from the Public Record Office by the Foreign Office and up to 1,000 may be held at any one time. To keep a record of all that would involve disproportionate public expense. As I have indicated, the documents are returned when they are no longer required.
Lord George-Brown: My Lords, is the noble Baroness aware that the Question relates to documents which the Government have borrowed from the Public Record Office and the reply that she has just made refers to documents in the Foreign Office? Therefore, am I not right in saying that there is no reason to borrow from the Public Record Office documents of which there are copies in the Foreign Office? As one who as a Minister was involved in all this over the years, may I ask her seriously to represent to the Secretary of State for Foreign and Commonwealth Affairs—who was erroneously referred to in the Daily Telegraph this morning as "Mr. Howe"—that the Foreign Office could return to the Public Record Office the documents borrowed from there and rely upon the documents in its own department?
Baroness Young: My Lords, I am sorry to tell the noble Lord, Lord George-Brown, that he has misunderstood the position. The documents to which I have referred were originally in the Foreign and Commonwealth Office. They were sent to the Public Record Office and have subsequently been withdrawn from the Public Record Office because they are required in the Foreign and Commonwealth Office. When they are no longer required, they will be returned to the Public Record Office.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness be good enough to say, first, whether these documents are at the present time classified? Why are they not being returned? What is the reason? Secondly, will she be good enough to clarify what she said about sovereignty in reply to the original Question? Did she intend to convey the fact that the question of sovereignty is now being considered by Her Majesty's Government against the background of those documents which are at the Foreign and Commonwealth Office?
Baroness Young: My Lords, all the documents that are referred to in the Question are documents which are not classified. The answer to the second part of the noble Lord's question is that, on a subject as complicated as the history of the Falkland Islands, it is inevitable that individual officials will have differing and, in some cases, conflicting views. Successive British Governments have made it clear that they have no doubts about our sovereignty over the Falkland Islands.
Lord Cledwyn of Penrhos: My Lords, would the noble Baroness be good enough to go a step further and say why, then, are Her Majesty's Government considering the question of sovereignty? What does she mean when she says that different officials have differing views? Is she saying that officials in the Foreign and Commonwealth Office have differing views on the question of sovereignty? It is absolutely essential that she makes this matter abundantly clear at this time. Otherwise, there could be great difficulty. If there are differing views, is it the view of Her Majesty's Government now that the matter should go to the International Court for arbitration? Would the Government consider finding out from the new Argentine Government whether they are prepared to join in going to the International Court to find out whether it is possible to achieve a solution?
Baroness Young: My Lords, I gave the original Answer that I did in reply to the terms of the Question asked. Secondly, I cannot go wider than what I have already said.
Lord Monson: My Lords, does the noble Baroness agree that in a civilised world self-determination should be the main consideration to be taken into account when determining sovereignty, and that whatever happened or did not happen 150 years ago does not alter that principle?
Baroness Young: My Lords, this Question is being widened into something quite outside its subject, which is the matter of records.
Lord Mishcon: My Lords, would the noble Baroness agree that a lot of misunderstanding can be created by the answers given to the original Question of the noble Lord, Lord Avebury? Does she realise that the implication of her answers might be that the documents that are being retained at the Foreign and Commonwealth Office are not being released because they are harmful to the case that we wish to present on sovereignty? Does she realise that the Government might be accused of taking up a position of deception? Does she therefore wish to clarify her response in order to make it quite clear that we have nothing to hide and are not trying to deceive?
Baroness Young: My Lords, I have nothing further to add to the supplementary answer that I gave to the noble Lord, Lord Cledwyn of Penrhos. The noble Lord, Lord Mishcon, may like to know that as early as January 1983 a similar answer was given in a Foreign and Commonwealth Office memorandum.
Lord Mayhew: My Lords, can the noble Baroness tell us who has the right to remove records from the Public Record Office? Do all Ministers have the right to remove these records? If so, should we not know which Ministers have removed which records?
Baroness Young: My Lords, other departments withdraw and return records to the Public Record Office in the way that I indicated in my original reply and my first supplementary answer.
Lord Avebury: My Lords, would the Minister not agree that with as few as 5,000 records withdrawn from the Public Record Office it would not be a very significant job, with the aid of computers, to keep an up-to-date list which would be available for inspection by any member of the public who is unfortunate enough to trundle all the way out to Kew only to find that the documents are missing? Is this not an occasion which the Government are using for reclassifying documents that have already been released to the public, in some cases many years ago? Since documents such as document 371/134635324 have been withdrawn in this manner by the Foreign Office, does that not indicate that our case is not as strong as we should like the world to believe?
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I am sure your Lordships would wish me to remind the
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House that we are very nearly a quarter of an hour over the length of time which our own Companion recommends should be taken for Question Time. Therefore, I should like to suggest that after my noble friend Lady Young answers the noble Lord, we should perhaps proceed to the next business.
Baroness Young: My Lords, I could not comment on one particular document on the basis of its reference number. As I have indicated, around 5,000 records are withdrawn for one reason or another in the course of a year, and it would be expensive—and disproportionately expensive—to keep a list as described. In answer to the noble Lord's last point, I would confirm what I have already said in answer to the noble Lord, Lord Cledwyn.

Business
3.11 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Cockfield will, with the leave of the House, repeat a Statement that is to be made in another place on Regional Industrial Policy.
It may be for the convenience of the House if I announce that dinner will be available at the usual time of 7.30 this evening. The Committee stage of the Agricultural Holdings Bill will be adjourned for a time at about 7.30 p.m. During the adjournment the Appropriation (No. 3) (Northern Ireland) Order 1983, the Northern Ireland (Emergency Provisions) Act 1978 (Continuance) (No. 2) Order 1983 and the Fisheries (Amendment) (Northern Ireland) Order 1983 will be taken. Because of the nature and importance of the business to be taken, the break may be rather longer than the usual hour.

British Shipbuilders (Borrowing Powers) Bill
Read a third time, and passed.

Judgments Enforcement (Attachment of Debts) (Northern Ireland) Order 1983
3.13 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I rise to beg to move that the order which is mentioned on the Order Paper, a copy of which was laid before the House on 14th November, be approved. The House will be aware that among the most useful remedies available to a judgment creditor are the garnishee order or the order for the attachment of debts. It is this form of order, for example, which enables the judgment creditor to get his hands on his debtor's bank account. Until the Supreme Court Act 1981, the scope of garnishee orders in England and Wales was limited to bank accounts. Section 40 of the Supreme Court Act 1981 widened the scope of the remedy to enable other forms of account, including, in particular, accounts with building societies and trustee savings banks, to be attached in this way. The purpose of this Order in Council is to make the remedy equally available in Northern Ireland.

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The law in Northern Ireland relating to the attachment of debts is found in the Judgments Enforcement (Northern Ireland) Order 1981. Article 72(2) of that order provides that attachment in Northern Ireland is not to be available to accounts in the National Savings Bank, a trustee savings bank or, in effect, a building society. The effect of the draft order now before the House will be to bring into the field of attachment all those forms of account.
There is also now, in the Supreme Court Act 1981, covering England and Wales (that is by Section 40A, inserted by Schedule 4 to the Administration of Justice Act 1982) provision for garnishees—that is to say, the banks and building societies affected by these provisions—to have a standard allowance in respect of their expenses. A similar provision for Northern Ireland is contained in the draft order.
The Northern Ireland court service has consulted the legal profession, the Building Societies Association, citizens' advice bureaux, and the Department of Finance and Personnel at Stormont. The general view is that the draft order contains a welcome enlargement of the powers of the Enforcement of Judgments Office.
I intend to make judgment enforcement rules to provide, as in England and Wales, that attachment will be available only in respect of judgments or orders for £50 or more. I also intend to make an order under what will become Article 72A of the 1981 order, authorising deposit-taking institutions to deduct the clerical and administrative costs of complying with an order made under the new legislation.
I do not think that your Lordships will require me to go through the order in detail. It is perhaps sufficient if I add that Article 5 corrects two minor errors in Schedule 1 to the Bankruptcy Amendment (Northern Ireland) Order 1980, and that Article 1 provides that the main provisions of the order, contained in Articles 3 and 4, shall come into force under an appointed day provision. My Lords, I beg to move.
Moved, That the draft order laid before the House on 14th November be approved. — (The Lord Chancellor.)
Lord Prys-Davies: My Lords, the noble and learned Lord the Lord Chancellor has given the House a full explanation of the major provisions of the draft order which is now before us. We understand that there have been consultations with the institutions in Northern Ireland, including the citizens' advice bureaux, which will be affected by the order, and that in general they welcome it. We on these Benches think it is important that we should see the problem as it is perceived in Northern Ireland, and the fact that the order is acceptable to such organisations is in itself a good reason for approving its terms.
Nevertheless, perhaps the noble and learned Lord the Lord Chancellor will explain the absence of discussions with the Northern Ireland Assembly. We should have thought that though they may be, and indeed are, unglamourous and dry, the principles embodied in the order should where possible have been discussed by the appropriate committee of the Assembly at the pre-draft stage.
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The noble and learned Lord the Lord Chancellor has explained that the draft order enlarges the powers of the Enforcement of Judgments Office, thus bringing the law of the province of Northern Ireland into line with relevant law in England and Wales, which is contained in Section 40 of the Supreme Court Act 1981, and it therefore closes a gap. One appreciates that the 1981 order was approved a few months before the Supreme Court Act was passed by Parliament. Your Lordships will know that I am a new Member of your Lordships' House and this may well explain my difficulty. It is this. Why were not the provisions of Section 40 of the 1981 Act anticipated and incorporated in the 1981 order? Why has it taken two years to close the gap between the law on this subject in Northern Ireland and the relevant law in England and Wales, which does not appear to be a complicated procedure? However, that may be deceptive.
Again, the noble and learned Lord the Lord Chancellor has explained that it is the Government's intention that sums of less than £50 shall be exempt from the attachment of debts procedure and that this is to be provided for in another order. Why should the draft order now before the House not contain a reference to this minimum sum? And when approximately will the new order be laid before Parliament? While we on these Benches approve the draft order, we would nevertheless be glad to have answers to the few points that we have raised.
Lord Donaldson of Kingsbridge: My Lords, we welcome the order as bringing the law in Northern Ireland into line with the law in this country. We bear in mind that it is particularly suitable in Northern Ireland because there, much more than here, the nonpayment of dues has been used as a political weapon. Any strength that we can give to the law to enforce payment of judgment debts should be supported. I should also like to welcome to the Dispatch Box the noble Lord who has just spoken.
The Lord Chancellor: My Lords, I am glad to think that this is not likely to prove a bone of very great contention this afternoon. If the noble Lord, Lord Prys-Davies, whom I should also like to welcome, in conjunction with the noble Lord, Lord Donaldson, will study the list of organisations which were consulted, he will see that they really consisted of the users of this type of instrument and method of attachment. I know of no reason why the matter should not be debated in the Northern Irish Assembly if it wishes to take the matter up. I am not experienced in the constitution of the Province and there may be some private reason for the Assembly not wishing to take it up.
I agree that the process of consultation takes some years, but it is common throughout our relations with the Province that having established a legal system in England and Wales. it does from time to time wish to make its own observations on its application to the six counties. I can only think of the survival of the civil jury as an example of where its practice is wholly different from ours. I have never been able to see why, but it attaches enormous importance to this.
As regards the £50 limit, it is not contained in the order because it is going to be included in the rules—a different form of instrument that I shall be making

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myself. The order requires affirmative resolution of this House. The rules will not. I think that deals with all the questions of the noble Lord, Lord Prys-Davies, but I am also grateful to the noble Lord, Lord Donaldson, who gave general support.
On Question, Motion agreed to.

Petroleum Royalties (Relief) Bill
3.25 p.m.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Avon.)
The Lord Chancellor: The Question is that the House do now resolve itself into Committee on the said Bill. Did the noble Lord, Lord Stoddart of Swindon rise? I am so sorry. Does the noble Lord wish to speak?
Lord Stoddart of Swindon: No.
The Lord Chancellor: It is always rather difficult. Sometimes, I get into trouble.
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord ABERDARE in the Chair.]
Clause 1 [Royalty exemption for petroleum from certain new offshore fields]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 1:
Page 1, line 5, at beginning insert—
("Subject to subsection (1A) below").
The noble Lord said: This amendment, standing in my name and that of my noble friend Lord Bishopston can be taken, if it is for the convenience of the Committee, with Amendment No. 2:
Amendment No. 2: Page 1, line 11, at end insert—
("(1A) This Act shall apply only to a field with production below 20,000 barrels per day.").
I gave notice on Second Reading that we should seek to improve the Bill. These amendments would do so, in our view, by seeking to specify what fields would qualify for relief and thus remove the open-ended nature of the relief which will undoubtedly cost the taxpayer dear over the next few years. I also made it clear on Second Reading that, in the view of the Opposition, the complete remission of royalties was of fundamental importance and that the right to royalties was basic to the concept of ownership and control of North Sea oil.
Certainly, North Sea oil royalty has until now been considered not as a tax but as a right to operate in, or as payment for a right to operate in and extract oil from, the North Sea at a handsome profit—profit, that is, from property owned by the nation. That is a
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reasonable and respectable stance to take. This was confirmed by the Minister of State at the Department of Energy Mr. Buchanan-Smith, who said during the Bill's Committee stage in another place that, on the question of royalties, a fundamental approach was involved and that it was a question of judgment about which approach was right. We have it then from the Minister of State himself that a fundamental change of policy is involved in this Bill.
We, on this side, believe that whatever other approach may be right in encouraging further development of marginal and not so marginal fields in the North Sea, the one adopted by the Government of abolishing royalties is the wrong one. In fact, so far as one can gather, no other country in the world has renounced or is proposing to renounce oil royalties in their entirety. It is extraordinary that our own Government should embark upon this course at this time. In doing so, they are the odd man out in the world.
I have already mentioned that the commitment is open-ended. If the Labour Party was thinking of making an open-ended commitment to the trade unions or any other particular industry, the Government Benches, I think, would be jumping down our throats. But here we have the present Government proposing an open-ended and unlimited commitment in respect of new fields outside the southern basin. What is completely disconcerting is the inability of the Government to cost, even in approximate terms, the loss of revenue to the Exchequer involved in the total remission of oil royalties in accordance with this Bill.
The Committee is surely entitled to know what loss is involved to taxpayers, who are, after all, the owners of North Sea oil. Is it not possible for the Government to give some sort of estimate, even to the nearest thousand million pounds, of the loss of revenue from this remission of royalties? I should have thought so. I should have thought that we were entitled to that information in considering this Bill.
With the very limited resources at our disposal, the Opposition is unable to make any assessment of the full extent of the cost of remission of royalties. It is possible, however, on the basis of certain fields not yet in production, and with total recoverable reserves estimated to be 2,300 million barrels, to estimate the possible loss of revenue. On this basis (assuming a price of 30 dollars a barrel and a dollar exchange rate of $1.50 to the pound), the total loss of royalties over the lifetime of these fields would amount to some £5,750 million. That is an enormous amount of money by any standards, and I should be interested to know whether the Department of Energy would confirm that losses of this order over the next 10 or 20 years are in contemplation as a result of this Bill.
There is, of course, a further serious point which must give cause for concern. Having conceded the principle of royalties outside the southern basin, how is the Government intending to justify the continuation of royalties in respect of all future developments including those in the southern basin? Having conceded the principle in one area, how can it be justified in another? Or has the Government already decided to remit royalties in developments outside the scope of this Bill? I hope the noble Earl, when he comes to reply, will be able to give us some reassurance on that particular point.
We have heard the argument for this Bill put in this House and in another place. It is that the remission of royalties, together with other measures contained in the 1983 Finance Act and the Oil Taxation Act, are essential to the future development of the North Sea, and that exceptional concessions need to be given to encourage the multinational oil companies to develop marginal fields.
The Labour Party, no less than the Government, wishes development to continue, but we wish that developments should proceed on an orderly and planned basis, and that cognisance should be taken of future as well as present needs. Our aim has been to adopt a policy which will give the longest possible period of self-sufficiency compatible with the reasonable cash flow needs of the oil companies. That has been our stance and it will continue to be our stance; but I fear that that has not been the perceived approach of Her Majesty's Government over the past four and a half years. Their approach has involved the maximising of revenue in the short term to bolster up their misguided medium-term economic strategy at the expense of a long-term strategy for oil depletion which would provide the country with good oil supplies over a much longer period of time.
We thus have a situation where North Sea oil is being extracted at its peak potential during the period of oil glut when prices are depressed, and under further pressure from a satiated market. According to a report published yesterday by the Institute of Fiscal Studies, North Sea tax revenues will fall steeply after peaking in 1986. The drop in revenues will not be halted until the mid-1990s, even if new oil fields are discovered. This dreary forecast assumes that oil prices will remain constant; but even that is by no means certain in today's oil market conditions.
It is, of course, this scenario which provides the rationale—if one can call it that—for Government policy. They are now desperate to speed up development of marginal fields to make up for the maximisation of production over the past few years which has provided over £20,000 million of tax revenue to the Exchequer; most of which, unfortunately, has been wantonly wasted in keeping three million people on the dole.
What this Bill does is to provide a blank cheque to the oil companies; it does not form part of any coherent policy. Such a policy would have embraced a depletion policy, taxation and the encouragement of development over a properly co-ordinated time scale. That is not evidenced by this Bill; indeed, quite the reverse is evident. There has been none of the planning which we in the Labour Party advocated. Instead, there has been a series of lurches in oil taxation which has kept the oil industry frustrated and bewildered, and it was this which led the oil companies, in fact, to drag their feet over future development plans.
The oil companies themselves certainly did not demand an end to royalty payments: indeed, the amendments before the Committee this afternoon are based on suggestions made by the United Kingdom Offshore Oil Association for royalty exemption on fields producing less than 20,000 barrels a day and a sliding scale up to 60,000 barrels a day. The Commons
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Select Committee on Energy, in their report on oil depletion policy dated 7th May 1982, were certainly critical of the Government's policy on oil taxation in spite of the Department of Energy's defence of the then current taxation policy. But, although the Select Committee were critical of the existing tax regime and recommended significant changes, including, under certain circumstances, a system of royalty banking, they did not even consider—let alone recommend—the complete remission of oil royalties in any part of the North Sea at all.
Under all these circumstances, it is difficult to see where the Government plucked this proposal to abolish oil royalties from or, indeed, why. The fact is that the proposals go much further than anyone has so far recommended. That includes the oil companies themselves.
The Petroleum and Submarine Pipelines Act 1975 does, as noble Lords know, give the Secretary of State discretionary powers to remit oil royalties under certain circumstances. We consider the existing powers quite adequate and fair to both the taxpayer and the oil companies. Under that existing legislation it is possible to remit oil royalties: all the oil companies have to do is to make out their case for remission. The Government, however, claim that the procedures under the Petroleum and Submarine Pipelines Act is too cumbersome and bureaucratic, and for this reason the oil companies will not use it. Certainly, there have been no applications so far for remission under that Act; but the reason for the absence of applications could have little to do with bureaucracy and everything to do with the fact that the oil companies are not confident of making out a case for remission.
The beauty of the amendments which I am proposing to the Committee this afternoon is that, while they provide automaticity for relief of royalty up to 20,000 barrels a day, they also enable the Government to limit and control the extent of relief in fields larger than 20,000 barrels a day. They will, therefore, provide the Government with flexibility in dealing with North Sea exploration and development; surely at this critical period it is flexibility which the Government need and there is no flexibility contained in this Bill. Indeed, the risk is that in due time the Government will introduce the remission of oil royalties for the whole of the North Sea and that, so far as the taxpayer and the nation are concerned, would be a disastrous course indeed.
The amendments certainly define the nature of marginal fields and the Government have said a great deal about the development of them. If the Government claim that the Bill is designed to assist the development of such marginal fields, they should have no difficulty at all in accepting the amendment.
As the Bill stands, it provides royalty relief for unmarginal and even prolific oil fields as well as marginal ones, and there can be absolutely no justification for that. This is an important Bill and I believe that these amendments are very important indeed. They are important to the country; they are important to the future revenue which the Government will achieve from the North Sea. Therefore, I commend the amendments to the Committee.
The Earl of Avon: I note that the amendment proposed by the noble Lords would mean that the Bill provided for royalty exemption only up to broadly the same level of production as that for which the oil allowance is given for PRT. Indeed, I can see why it might be argued that, if fields with production below this level are the ones to be helped by the PRT oil allowance, it is only logical to apply the same limit in the case of royalty exemption. However, the matter is not so simple as that.
To begin with, there is not a precise correlation between size and profitability. To base reliefs on the level of production certainly does tend to help the less profitable field more than the more profitable field: in fact, that is why we have increased the PRT oil allowance. But it would be wrong to go too far in basing the fiscal system on the size parameter. That is why, for example, there also needs to be the safeguard provision for PRT. Other factors that can affect profitability include depth of water; geology; the need artifically to increase reservoir pressure; and timing and rate of production. If those factors all work in one direction, they can make large fields marginal or, in the other direction, small fields highly profitable. We found it impossible to devise a practicable formula that relates all factors, duly weighted, to profitability. In any case, last winter's review suggests that this is an academic question, since the fields studied were generally not only smaller than most existing fields, but also were in deeper water and were geologically more difficult.
It is really necessary to look at the effect of the fiscal regime as a whole. We felt that the proper balance of effect was only achieved by granting full exemption from royalty whatever the level of production. This is not just because there could be some larger less profitable fields with production well in excess of this level. It is also because the production profile of certain relatively small fields could well be such that in one or two years the proposed limit would be breached even though the field was only a marginal one. The economic impact of this could well be greater if the excess production were subject to royalty than if subject to PRT. This is because such peaks could well be early in field life, when royalty would normally bite and PRT would not.
In summary, the risk of depriving some small marginal fields of the full benefit of royalty exemption, together with the more general disincentive to looking for larger fields that would arise, we believe would be too high a price to pay for the possibility of securing some relatively small additional Government revenue.
The noble Lord, Lord Stoddart, mentioned the loss to the Treasury. As both my right honourable friends the Secretary of State for Energy and the Minister of State for Energy explained in another place, such a costing is not possible because no one can predict which developments would have gone ahead without this year's package of fiscal concessions, of which this Bill is but one part.
The noble Lord made a point about royalties. I should like to suggest—as I did on Second Reading—that a royalty payment is not a tax but is part of a consideration for the grant of a licence. The noble Lord asked whether the Government propose to
114
remit royalties elsewhere on the continental shelf. We keep the profitability of the continental shelf fields under continuing review. As the noble Lord is aware, a review of the southern basin is now being conducted. If that review or, for that matter, any other review shows that fields which were viable before tax become unprofitable afterwards, we shall, of course, bring proposals before Parliament. But I assure the Committee that any such action would very much depend on the evidence.
The noble Lord also spoke about blanket relief. The noble Lord suggested that concessions to marginal fields should have been made through the use of the Secretary of State's existing powers to remit royalties. There are a number of problems here. First, a prospective developer could have no certainty that his field would receive discretionary relief until that relief was given or committed, which, or course, might not be until royalties were due. Secondly, existing powers are for refunds, not relief, and refunds are not taxable; so the marginal rate of tax would fall by 12½ per cent., not by the 1½ per cent. that we are contemplating. Thirdly, refunds require the extra work of collection and paying back.
The noble Lord mentioned the recent report of the Institute for Fiscal Studies. In its press release, it states that:
"The future is likely to be dominated by small, high cost fields. If they had been developed in the last 8 years, they would have faced very harsh tax burdens."
The report goes on to say:
"There was a 2 year gap until 1982 when no new developments were announced.
The biggest problem in the tax system has been Licence Royalties, which are based on revenue, not profit, and therefore ignore high costs."
I am sure noble Lords will agree that the fiscal regime is already quite complex enough. Rather than further complicate it, we prefer to cut the Gordian knot by doing away with royalty, as in effect an extra tier of taxation, for all future fields. I believe that the Bill as it now stands is to be recommended, and I hope that the Committee will not agree to these amendments.
Lord Bishopston: I am sure that the Committee is disappointed with the Minister's reply. There are several aspects to which the noble Earl has referred which make one wonder to what extent the Government have really made a proper appraisal of the whole situation of the balance of taxation, royalties and so forth. During the Second Reading debate in another place on 4th July last the Secretary of State said:
"The measure will mean that substantial benefit from any other discoveries and developments will come to the nation as a whole…the marginal tax rate for a field paying petroleum revenue tax will be reduced from 89.5 to 88 per cent."
The Secretary of State went on to say:
"Therefore, I hope that the House will get into perspective the dimension of the changes that will result from the Bill." [Official Report, Commons, 4/7/83; col. 22.]
The Minister has just repeated to the Committee the statement made by his right honourable friend the Minister of State on the Third Reading and, indeed, at other times during the passage of the Bill in the other place. When questioned the Minister said, as indeed the noble Earl has just said, that he had no idea of the amounts involved because it would be far too difficult

115
to calculate. It is difficult to believe that the Secretary of State for Energy and the Treasury as well—because these two departments are involved—have no idea whatever of the effect of a percentage change on revenue, or about the amount they will get and how much is needed to finance spending when required.
As my noble friend said, there could hardly be any other department of Government where the Government are saying that a concession will be given regardless of need, and, in this case of course, without any qualification or criteria. As we all know, even the most socially deserving areas of Government have been deprived of Government help. But here we have one of the most profitable areas and in that sector the Government will not be applying the legislation passed by the previous Labour Government to which he has already referred, which would give help according to need. They will, in fact, be throwing a subsidy where there is no need for it or where there could possibly be no need for it. The Committee ought to be able to assess whether the Government's policy will stimulate oil development in the North Sea—and that is, of course, the whole point of the change and the Government seek to justify it on those grounds—or whether the development will take place anyway.
The Minister has just mentioned that royalty is not a tax. That, of course, is precisely the point we are making. It is not a tax; it is a payment for something which is being given for the exploitation—and the proper exploitation—of national resources. The Government say that you can have this great concession without the payment which the nation has a right to demand.
The Minister has also rightly mentioned the legislation to which I have referred, the Petroleum and Submarine Pipe-Lines Act 1975. Under that Act a company had to establish that remission of royalties was necessary for the development of an oilfield. The Minister goes on to justify not using that legislation, which many would have thought was ideal to help those in the greatest need while not throwing away royalty concessions on those who have no need. He speaks about the collection of royalties, the paying hack and so forth. But, as my noble friend said, to date I believe we are right in saying that no big claim has been made, so it is not a matter of an enormous amount of paperwork going into the Treasury or the Department of Energy asking for help under this legislation. As there has been none to date is the Minister saying that there would be an enormous amount—and I do not want to misquote him—or that there could be a substantial amount of claim, and that this would be rather tedious, to say the least? If he thinks that that is the case, then he might give that as a justification for the measure he is proposing to the Committee.
He goes on to say that the fiscal régime is complicated enough already. One accepts that there are complicated aspects of tax collection and royalty collection, and other fiscal measures, but here the Government might go through the process, as they have with a great degree of investigation, to see whether the situation can be relieved. I should have thought that the existence of the Petroleum and Submarine Pipe-Lines Act 1975 is the kind of ideal
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legislation which would certainly not justify the handing over of these enormous sums of money, or possibly large sums of money—we do not know, and the Government do not know—to a sector which does not need them.
I do not know what representations have been made by the United Kingdom oil operators' association or others in this field. The Minister has not brought that in aid on this occasion, although of course it may have come up during other stages.
The Earl of Avon: I think that we talked about the United Kingdom Offshore Operators Association quite extensively at Second Reading.
Lord Bishopston: I accept that. I know that there has been mention of that. But the noble Earl has not really given any reason why the Government should give away what could be a massive sum of money. Various quotations have been made about what the effect would be. I believe on Second Reading that the Minister mentioned the decrease in payments from 89·5 per cent. to 88 per cent., and he said that he was willing to give an illustration of a field with 55 million tonnes of reserves. There was a benefit there of 3 per cent. which on a £4·5 billion or £5 billion field would be worth about £120 million of relief.
Various estimates have been given at different stages of the measure because the Government do not have any figures whatsoever, and so we do not know to what extent the industry will be affected by these concessions, or what amount of revenue is going to be lost. We have no idea about the profitability that we can expect from oilfield development in the future. There have been forecasts—and the Minister touched on this a few moments ago—about the geological difficulties of working in smaller fields, and so on.
With some of the Ministers in the Cabinet, and indeed some sitting on the Front Bench opposite, this woolliness which appears to have been the outcome of not knowing what revenue would be expected, what amount of revenue may be lost by these concessions, surely is not the way in which we expect the present Government, with their monetarist approach, to proceed. I feel that in the circumstances the Minister has not given the Committee any satisfactory answer to the amendment which your Lordships are discussing at the present time.
Lord Stoddart of Swindon: I should like to press the amendment.
3.55 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 61; Not-Contents, 134.

DIVISION NO. 1

CONTENTS

Annan, L.

Cledwyn of Penrhos, L.

Ardwick, L.

Collison, L.

Barnett, L.

Cooper of Stockton Heath, L.

Bishopston, L.

Crowther-Hunt, L.

Blyton, L.

David, B.

Boston of Faversham, L.

Davies of Penrhys, L.

Brockway, L.

Denington, B.

Carmichael of Kelvingrove, L.

Donnet of Balgay, L.

117

Elwyn-Jones, L.

Lockwood, B.

Ewart-Biggs, B.

Longford, E.

Fisher of Rednal, B.

Lovell-Davis, L.

Fitt, L.

Milford, L.

Gallacher, L.

Mishcon, L.

Galpern, L.

Molloy, L.

Glenamara, L.

Nicol, B.

Gormley, L.

Northfield, L.

Graham of Edmonton, L. [Teller.]

Oram, L.

Paget of Northampton, L.

Hatch of Lusby, L.

Ponsonby of Shulbrede, L. [Teller.]

Houghton of Sowerby, L.

Hughes, L.

Prys-Davies, L.

Irving of Dartford, L.

Ross of Mamock, L.

Jacques, L.

Serota, B.

Jeger, B.

Stallard, L.

Jenkins of Putney, L.

Stewart of Alvechurch, B.

John-Mackie, L.

Stoddart of Swindon, L.

Kilbracken, L.

Strabolgi, L.

Kirkhill, L.

Underhill, L.

Leatherland, L.

Wells-Pestell, L.

Lee of Newton, L.

White, B.

Listowel, E.

Wootton of Abinger, B.

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Airey of Abingdon, B.

Henley, L.

Allerton, L,

Holderness, L.

Alport, L.

Home of the Hirsel, L.

Ampthill, L.

Hylton-Foster, B.

Auckland, L.

Ilchester, E.

Avon, E.

Inglewood, L.

Balfour of Inchrye, L.

Ingrow, L.

Bauer, L.

Kilmany, L.

Beloff, L.

Kinloss, Ly.

Belstead, L.

Kitchener, E.

Bessborough, E.

Lane-Fox, B.

Boyd-Carpenter, L.

Lloyd of Hampstead, L.

Buccleuch and Queensberry, D.

Lothian, M.

Loudoun, C.

Burton, L.

Lovat, L.

Caccia, L.

Lucas of Chilworth, L.

Caithness, E.

Luke, L.

Campbell of Alloway, L.

Lyell, L.

Campbell of Croy, L.

McAlpine of Moffat, L.

Carnegy of Lour, B.

Mackay of Clashfern, L.

Cathcart, E.

Mancroft, L.

Cockfield, L.

Margadale, L.

Cottesloe, L.

Marley, L.

Craigavon, V.

Marshall of Leeds, L.

Cullen of Ashbourne, L.

Merrivale, L.

Dacre of Glanton, L.

Mersey, V.

Daventry, V.

Middleton, L.

Davidson, V.

Monk Bretton, L.

De Freyne, L.

Morris, L.

Denham, L. [Teller.]

Moyne, L.

Devonport, V.

Murton of Lindisfarne, L.

Dilhorne, V.

Nelson of Stafford, L.

Drumalbyn, L.

Newall, L.

Eccles, V.

Norfolk, D.

Effingham, E.

Norwich, Bp.

Elliot of Harwood, B.

Nugent of Guildford, L.

Elton, L.

Onslow, E.

Erne, E.

Orkney, E.

Fortescue, E.

Orr-Ewing, L.

Fraser of Kilmorack, L.

Pender, L.

Gainford, L.

Penrhyn, L.

Gardner of Parkes, B.

Peyton of Yeovil, L.

Gibson-Watt, L.

Plummer of St. Marylebone. L.

Gisborough, L.

Glanusk, L.

Rankeillour, L.

Glenkinglas, L.

Reilly, L.

Grimston of Westbury, L.

Renton, L.

Grimthorpe, L.

Ridley, V.

Hailsham of Saint Marylebone, L.

Rochdale, V.

Rodney, L.

Halsbury, E.

Romney, E.

Hankey, L.

Rugby, L.

Harvey of Prestbury, L.

St. Aldwyn, E.

Hawke, L.

St. Davids, V.

Hayter, L.

Saint Oswald. L.

118

Salisbury, M.

Suffield, L.

Saltoun, Ly.

Swinton, E. [Teller.]

Sandys, L.

Terrington, L.

Savile, L.

Thomas of Swynnerton, L.

Selkirk, E.

Tranmire, L.

Sempill, Ly.

Trenchard, V.

Shaughnessy, L.

Tweedsmuir, L.

Skelmersdale, L.

Vaux of Harrowden, L.

Soames, L.

Vivian, L.

Stamp, L.

Waldegrave, E.

Strathcarron, L.

Westbury, L.

Strathclyde, L.

Wynford, L.

Strathspey, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 2 not moved.]
Lord Skelmersdale: I beg to move that the House do now resume for Statement.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Regional Industrial Policy
4.5 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, with permission, I will repeat a Statement made in another place by my right honourable friend the Secretary of State for Trade and Industry. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the Government's review of regional economic policy.
"I have today laid before the House a White Paper entitled Regional Industrial Development, and my department will publish shortly a factual background paper on the effectiveness of regional policy and other regional issues.
"The Government remain firmly committed to an effective regional policy.
"Although the economic case for regional industrial policy today is not clear-cut, and the economic costs of such policies must be set against the benefits, there remains a social case for regional industrial policy to reduce regional imbalances in employment opportunities.
"The Government believe that there is scope to increase the effectiveness of regional policy and to achieve better value for money in the regions with less adverse effects on the economy as a whole.
"The White Paper sets out a new structure for regional industrial incentives involving major changes to the regional development grants scheme.
"At present regional development grants over-concentrate on capital intensive projects and on manufacturing industries. In future we propose regional development grants should be aimed more precisely at job creation.
"The new regional development grant scheme will be widened in scope to cover parts of the service sector in addition to manufacturing. However, regional development grants will in future be

119
payable only towards projects which provide or modernise capacity, and simple replacement investment will not qualify for regional development grant.
"Grant will be payable as a proportion of capital expenditure, or as an amount for each new job created by a project, whichever is the more advantageous to the investor; but where grant is paid in respect of capital expenditure, it will be limited by a cost per job ceiling.
"For the sake of simplicity small firms will be exempt from this limit.
"These changes shift the payment of automatic grant assistance to projects which create jobs.
"In addition, the importance of selective assistance relative to regional development grants will be increased; and re-location projects which offer no net increase in jobs will not normally be eligible for regional selective assistance.
"Industry attaches great importance to the automatic and predictable nature of the regional development grant scheme. Therefore, grant will continue to be paid at standard rates and by reference to published criteria.
"To avoid disruption or uncertainty arising from these changes there will be a twelve-month transition period from the introduction of the scheme before they take full effect. For projects which have already been offered selective assistance, regional development grant will continue to be paid under the old rules, not the new.
"The old rules, not the new, will apply for projects for which application has already been made, or is made before 31st January 1984, provided an offer is made before changes to the legislation are brought into effect. The regional investment role of the British Technology Group—which does not relate to its primary task of encouraging the transfer of technology—will be discontinued.
"The White Paper invites views on a number of issues: in respect of grant, which activities should qualify for regional development grant, what the rates of grant should be, and what the balance should be between automatic and selective assistance. On the assisted area map, views are invited on both the criteria for designation and on map coverage.
"The Government also welcome views on whether special measures should be taken in the assisted areas to encourage innovation and new-firm formation. I would welcome written submissions, before the end of May 1984, in order that they may be considered before decisions are reached.
"Consultation has its price. A number of important decisions about regional policy will remain to be taken until after the consultation period. In particular, it is not possible now to announce the future geographical coverage of regional assistance or the amount of future regional expenditure.
"So far as coverage is concerned, the new map when it is published will be based upon more up-to-date data concerning travel-to-work areas now
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becoming available from the 1981 census returns. The Government will introduce legislation as soon as possible to provide for the new scheme of regional development grants outlined in the White Paper. Once the consultation process is complete and the remaining decisions taken, the Government propose to lay the necessary orders, implementing all the changes simultaneously in Autumn 1984.
"In short, the new policy will ease the present unjustified bias against service industries; it will end the unjustified payment of expensive aid to projects which create few jobs in the assisted areas; it will minimise mere job shifting at taxpayers' expense; and it will concentrate on better value for money in job creation in the areas of greatest need.
"I am confident that the new framework will provide a firm basis for a more cost-effective regional industrial policy, benefiting the assisted areas more effectively with less adverse effects elsewhere".
My Lords, that completes the Statement.
4.14 p.m.
Lord Stoddart of Swindon: my Lords, the House will be grateful to the noble Lord the Minister for repeating this very important Statement. Is it not the fact that the background against which this White Paper must be set is the economic problem that we have faced since 1979? Unemployment has more than doubled, more than 40,000 firms have gone into liquidation in England and Wales alone, and the equivalent of about one-fifth of our manufacturing industry has completely disappeared. A number of our regions have been very badly hit over the last few years. One of them, the West Midlands, in particular, formerly one of the most prosperous areas in Britain, has been appallingly badly hit.
In fact, industry there has been decimated. Indeed, it might be said that the Government's tepid attitude to a regional policy results from the fact that their policies have brought major unemployment problems to every region—not just to one but to every region in the country—including the southern region where the unemployment rate has more than doubled over the last four and a half years.
Can the Minister let us have assurances that the Government do not intend to reduce the current levels of regional aid expenditure; that is, of the total expenditure? They are hardly adequate at the present time. Given the present state of the economy, anything less would be a serious blow to our already hard hit industry. Clearly we are not opposed to the White Paper's aim to get better value for money spent; but we do not want less money spent and, indeed, to relate regional aid to job creation. But, without any indication of resources, we are really faced by a kind of "Hamlet without the prince".
The factual background paper promised in the Statement would have assisted us today in assessing the policy changes foreshadowed in the White Paper. What role do the Government envisage for local government enterprise boards and local government generally in job creation? May I ask the Minister, finally, to give us an assurance that the consultation promised in the Statement will be real consultation,

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that the Government have not taken final decisions and that when they get the views of local government and other organisations they will take these views very seriously into account before announcing their final decision?
Lord Ezra: My Lords, we welcome from these Benches this review of regional economic policy. We also welcome the publication of the White Paper, look forward to studying it, and appreciate the time given for consultation. We also welcome the greater emphasis being put on job creation and the extension of such aids as may be available to the service sector as well as to the manufacturing sector. I should like to put to the noble Lord the Minister a question for elucidation. First of all, he mentioned that regional development grants will in future be payable only towards projects which provide for modernised capacity and that simple replacement investment will not qualify. We feel that this could be a very subjective judgment as to what is replacement and what is new investment. We consider that if there is a good replacement project which will maintain, or possibly even improve, employment prospects in a given area, this also should rate for grant.
Secondly, we agree entirely with the view expressed by industry that the procedures in future should be predictable so that industry can plan ahead. We would like an assurance that, quite apart from the transitional areas to which the noble Lord referred, the final outcome of these deliberations will be that there will be a very clearly determined set of criteria upon which business and industry can judge their future investment plans. Thirdly, we should like to draw attention to the particular problem of the rural areas. We feel that certain rural areas which might be remote from the designated areas suffer particularly from unemployment. We feel that special regard should be paid to the problem of those areas; and we should like some assurance on that point.
Fourthly, there is the question of additionality as applied to the social grants from the European Community. This is a subject which has been raised in debate in this House before and my noble friend, Lord Banks, raised it in a debate on 30th June 1982. In view of the great importance of assisting these difficult areas, we feel that a reappraisal of the policy towards additionality should be stated. We consider that, in addition to what the Government may be prepared to make available from British resources, anything that can be obtained from the Community should be additional. We put that proposal to the Minister.
Finally, I should like to associate myself with the point raised by the noble Lord, Lord Stoddart, in saying that, although at this stage the Government clearly cannot indicate what the total amount of regional grant may be after the deliberations and consultations proposed, nevertheless we should like to have an assurance that, whatever may be the outcome, the amounts available will not be less than they are at present.
4.20 p.m.
Lord Cockfield: My Lords, I am grateful to both the noble Lord, Lord Stoddart, and the noble Lord, Lord Ezra, for their general welcome to the Statement and
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the publication of the White Paper. I do not think it is appropriate at this stage to debate with the noble Lord, Lord Stoddart, the general question of the Government's economic policy. The simple truth of the matter is that the world as a whole has been very seriously affected by the recession and in addition the roots of our present economic difficulties go back a very long way. Those of your Lordships who have been privileged to listen to the speeches of the noble Lord, Lord Kaldor, will fully appreciate how very far back our difficulties in fact do go.
One of the reasons why a review of regional policy is essential is the nature of the very big changes which have taken place in this country, not only in recent years but over a considerable period of time. The object of the White Paper is to set down the Government's views on this and to invite consultation. Perhaps I might give both the noble Lord, Lord Stoddart, and the noble Lord, Lord Ezra, a clear assurance that the process of consultation is a very genuine one and the fact that the new assisted areas map cannot be produced until the autumn of next year means that the period available for consultation and for consideration of the representations that are made is longer than normally might be the case. This will contribute to a very clear and thorough examination of all these problems.
So far as the level of expenditure is concerned, the position was made quite clear by my right honourable friend—and I just quote these words because they were in the original Statement:
"It is not possible now to announce the future geographical coverage of regional assistance or the amount of future regional expenditure".
I must stand by that statement. The reason in fact is perfectly simple. The object of the White Paper is to set up a new structure for regional assistance. What we want to do at this stage is to get that structure right and to ensure that better value for money is obtained. The actual level of expenditure is one of those issues which are decided year by year in the public expenditure survey.
The noble Lord, Lord Stoddart, also referred to areas of particular economic difficulty and, as an example, he mentioned the West Midlands. He will find this particular issue discussed in detail in paragraph 40 et seq. of the White paper. And, among others, there are two issues which are specifically set down as matters for consultation. One of them concerns the criteria to be adopted in deciding the areas, and the other one is the actual decision on what areas should be included in what categories. So there will be full consultation on these matters and the particular issue of the West Midlands is specifically touched upon in the White Paper in that connection.
The noble Lord also raised the question of local government's job in the role of job creation. That again is a matter that I do not want to follow too far because regrettably the position is that in some areas the excessive increase in rates has led to job destruction and not to job creation. But obviously any help that genuinely results in a better level of job creation is something to be welcomed. We have collaborated with various local bodies, and particularly bodies which are representative of various private sector industries, to try to improve matters in particular areas.

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The noble Lord, Lord Ezra, raised the question of simple replacement expenditure not qualifying for grant. I agree with him that the definition of exactly what simple replacement expenditure is does raise considerable problems. In fact, the European Community rules require us not to pay grants on simple replacement expenditure. But the question of the definitions to be applied is a matter that can be covered by the consultations. I entirely agree with him—and this has been set down very clearly in the Statement—that so far as regional development grant itself is concerned the criteria need to be set out very clearly, because it is one of our objectives to ensure that industrialists will know in advance exactly where they stand. Selective assistance is rather a different matter because that has to be decided by reference to the facts of the individual case.
The noble Lord also raised the question of rural areas. That, of course, is also tied up with the assisted areas map and at this stage I do not think I can do more than say I note the point he has made. He also raised the, frankly, very difficult issue of additionality. The Government's policy on this has been explained on many occasions. The receipt of grants of this sort from the European Community, which are very much welcomed of course, is one of the factors taken into account in determining the level of Government expenditure. Therefore, the grants are reflected in what expenditure the Government think can be devoted to particular objectives. But there is no question, once the level of expenditure has been set, of their simply adding a grant from the European Community, because that would be covering the same point twice.
Finally, may I say this. The White Paper will, of course, be available in the Printed Paper Office. It covers the issues raised in very considerable detail and we welcome any views that may be expressed on it either by your Lordships or by a wider public outside this House.
Lord Glenkinglas: My Lords, will my noble friend agree with me that a Statement which is as important and complicated as the one he has made, and which some of us have not had the privilege of reading beforehand, is difficult to understand at one go? May I ask him whether he is certain that supporting the service industries (which is something with which I very much agree) will not to some extent conflict with the problem of getting enough jobs in many of these areas on the map? Is not one of the problems the fact that one does not want to back failure? On the other hand, the service industries, which have been the great success of the last ten years, have employed mainly women.
Lord Cockfield: My Lords, I note the points made by my noble friend. I agree with him that it is very difficult to absorb a Statement of this complexity in the few minutes which are available while it is being made. The important thing is the publication of the White Paper, which people will be able to study at leisure.
So far as the service industries are concerned, there has been a widespread feeling that the present system
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is biased against them, and it is that kind of bias that we wish to correct. I would not want to enter into a discussion at this particular point about the merits of providing job opportunities for men as opposed to providing them for women. If I embarked on that matter I am sure that I should get into difficulties with various Members in your Lordships' House. May I make just this one comment: all job creation, of course, is a good thing, and to the extent that we can help the service industries that must be a net gain.
Lord Ross of Marnock: My Lords, will the Minister tell us exactly what effect this will have on the likes of the Scottish Development Agency and the Welsh Development Agency? Will he tell us—he was asked, and he did not give a reply—what effect this will have on the enterprise zones, and whom he will consult in relation to the redrawing geographically of the assisted areas map? I do not know how long he has been at this subject, but I have lived with it since 1946, and every time we have had a depression the areas that have been hardest hit have always been those that were needing assistance in the first place. They come out of a recession even worse than any other place. So I should like to know whom he will consult about this.
Also, does this mean that Section 7 of the Industry Act and Section 8—Section 7 is selective assistance, and Section 8 is more automatic assistance—are both to be scrapped?—because as I see it, one of the important things for anyone trying to attract industry is that industrialists will know what they will get and that a package can be prepared, be it by the local authority or the SDA. But we just do not know. It is like buying a pig in a poke. We do not even know the size of the poke until we find out which areas are to be assisted. It will not be as simple as it has been, and simplicity is required here.
Lastly, can the Minister tell me whether there has been consultation to ensure that this does not conflict with EEC policy? He will remember that the most important aspect of regional policy for a long time, directly related to jobs, was the regional employment premium, and that had to be scrapped because of the EEC.
Lord Cockfield: My Lords, the whole purpose of publishing the White Paper, in which these proposals are set out in some detail, is to enable consultation to take place on the widest possible basis. Nobody is precluded from making his views known, and, in fact, there is a general invitation in the White Paper to all people interested to write to the Secretary of State expressing their views. So it is a very wide-ranging consultation. It is perfectly clear from the Statement that the regional grants and the selective grants will both be continued. The important question will be the precise rules which will apply to each, and these, again, are matters for consultation. As to the precise impact of this on the Scottish Development Agency and the Welsh Development Agency, I am frankly not in a position to answer that question immediately, but I will write to the noble Lord and deal with it.
Lord Ross of Marnock: My Lords, what about the enterprise zones?
Lord Cockfield: My Lords, the enterprise zones are, of course, an entirely separate project with rules of their own. They are beginning to show important advantages. It is impossible yet to measure the degree of success, but we hope there will be an important degree of success emerging from them.
Lord Taylor of Gryfe: My Lords, I very much look forward to this clear definition of what is modernisation and what is replacement of plant. This will certainly be carefully examined by all industrialists who try to get some assistance from the new regional fund. May I ask the Minister whether it is the intention, in calculating job creation, to calculate simply the actual investment? Is he aware that some very large investments are in themselves very expensive in terms of support? Nevertheless, they create jobs for three to five years in the construction industry by the building of these factories. I have one in mind by Hoffman La Roche in Ayrshire. Also, local suppliers have benefited very considerably from this particular investment, although it is not a direct result of the investment.
Will the Minister assure us that in securing inward investment, which is critical to the bringing in of new advanced industries, the new regional policies will not in any sense prejudice or jeopardise the prospects of inward investment, compared with many of our competitors who are looking for this kind of support? Finally—this is a point made by the noble Lord, Lord Ross of Marnock—shall we have to harmonise this policy with EEC policy, or is there any possible conflict in our new-look regional policy and the conventions governing the EEC at the moment?
Lord Cockfield: My Lords, I note what the noble Lord says about the difficulty of distinguishing between modernisation and replacement and this is one of the areas which will require a very great deal of consideration. I note also what he says about the indirect benefits that flow from schemes involving substantial capital investment. But of course he will be aware, just as I am, of cases which have attracted great criticism because substantial amounts of grant have gone to projects which have involved very high expenditure but virtually no job creation at all. Therefore, the precise criteria are a matter which need the most careful consideration.
On the question of inward investment, our aim is to secure a proper balance between inward investment and domestic investment. Inward investment will qualify in exactly the same way as domestic investment for the regional development grants. It will also be considered in the same way as domestic investment for selective assistance. It is quite wrong to try to introduce a bias either in favour of inward investment against domestic investment, or in favour of domestic investment against inward investment. Both of them create jobs and both of them, therefore, are welcome on that account. On the question of harmonising with EEC policy, I entirely agree that this is an important point. We have had it very much in mind and some of the changes that we are proposing are, in fact, to ensure that we keep in line with EEC requirements.
Lord Renton: My Lords, can my noble friend say to what extent it will be possible for regional development grants to be used for the restoration of derelict land, urban or rural? This is something which can sometimes be done when other purposes of development grants are being fulfilled and can therefore be taken in their stride.
Lord Cockfield: My Lords, I can only say to my noble friend that I shall be happy to have that point looked into and I will write to him.
Lord Northfield: My Lords, the noble Lord said—and I strongly agree with him—that consultation has its price. The price is delay now in concrete changes to the system of regional assistance. So will it not be something like a year before there are any real changes to announce? If I am right about that, I wonder whether the noble Lord would care to comment on, and at least convey to his right honourable friend, the problems of this interim period.
If we take the areas just outside the present assisted areas—the ones that very often have higher unemployment levels than inside the assisted areas—these are the ones that need some flexibility in this interim period if they are not to suffer even worse and if they are to receive some help. In particular, would he care to comment on whether in this interim period the discretionary grants under Section 8 of the Industry Act will be more flexibly administered to take care of these areas outside the assisted areas that are suffering?
Secondly, could the sort of arm-twisting—if I may put it in that way without offence—that goes on to direct incoming industry from abroad into the assisted areas be slightly slowed down if some of these suffering areas have some chance of getting it? At the moment, if a non-assisted area gets a foreign investment in prospect, the noble Lord's department or the Department of Trade and Industry does its best to persuade that investment to go to the assisted areas instead, and very often that really is quite wrong in view of the high unemployment level in these areas. Thirdly, could we not submit changes in the map to the EEC, so that we show that areas wider than the assisted areas are suffering and should not be caught by the present £5 million limit on projects for which grants can be given within the EEC rules? If we submitted a different map, it would be possible for the EEC to let through without comment some of the projects into non-assisted areas which deperately need them.
Lord Belstead: My Lords, may I suggest that after my noble friend replies to the noble Lord, Lord Northfield, perhaps the House would wish to pass on to next business.
Lord Cledwyn of Penrhos: My Lords, I am obliged to the noble Lord, Lord Belstead, for what he has just said but this is a Statement of the utmost importance. It is one that affects virtually everyone in the country, and no opportunity has yet arisen for a question to be asked about Wales. I most earnestly beseech the noble Lord to relax on that point at least.
Lord Belstead: My Lords, I am in the hands of the House, but the Companion is quite clear that, when we have Statements, it is not desirable to hold up the business of the House for longer than necessary. On the other hand, of course, Wales always has preponderance in these matters and I feel sure that my noble friend will wish to answer one question about Wales, because I know that the noble Lord, Lord Prys-Davies, wants to get in. I believe that the House would then wish to pass on to next business.
Lord Diamond: My Lords, is it not the case that the importance of the way in which we run our affairs—which is much to be respected—is that the senior representative on the Government Front Bench has to interpret the wishes of the House because, of course, the business is in the hands of your Lordships and not in the hands of the Government?
On an important Statement such as this when—although I may be quite wrong—there seems to be no evidence that there are people on this side of the House who are anxious to return to the previous business but who, on the other hand, are very anxious to deal with a most important and very long Statement, would it not be open to the noble Lord, Lord Belstead, to reconsider his interpretation of the wishes of the House?
Lord Belstead: My Lords, at the risk of wearying the House, I have made it quite clear that the Government—and that means myself on behalf of the Government—are in the hands of the House. I have also reminded your Lordships that the Companion to Standing Orders is explicit on this matter. I feel sure that, after we have taken the question on Wales which I feel sure the House would wish to take, then will be the moment to go on to next business.
4.42 p.m.
Lord Cockfield: My Lords, I wonder whether I may make a general comment which I hope will be helpful. We have published a White Paper dealing with the matters in some detail, and that is because we realise that it is quite impossible to deal adequately with all the points which are likely to be raised in the compass of a Statement. The White Paper itself specifically invites comments and is open to consultation on a large number of very important matters—some of which are quite specifically set out.
In other words, the White Paper is not trying to gloss over those important issues. In many instances, it does in fact set them out in the form of questions; we feel it is important that we should know people's reactions and how they feel about those questions. It is quite genuinely an exercise in what might be described as government by consultation.
Lord Diamond: My Lords, will the Minister allow me to intervene?
Lord Cockfield: Of course, my Lords.
Lord Diamond: My Lords, the Statement has already made it clear that there will be no alteration in the attitude which the noble Lord, on behalf of the Government, has already taken up in giving no
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indication whatever of whether this is an attempt to save the Treasury money or whether it is an attempt to improve regional grant procedure. He has given no indication of the level of grant. Therefore, we are unable to come to any conclusion by considering the Statement further, and we need to press the Government at Question Time or on this occasion.
Lord Cockfield: My Lords, I hope that the noble Lord, Lord Diamond, will forgive me if I say that the most important point is to go through the White Paper itself, where many of the issues are specifically spelt out. In fact, the issue of the level of grant is one specifically set down in the White Paper as a question of consultation.
The noble Lord, Lord Diamond, has immense experience in these matters and he will realise that consideration of policy of this sort does tend quite genuinely to fall into two areas. There is, first, the shape of the policy—that is, the framework into which the policy falls. Secondly, there is the amount of money which one puts into that framework. Those are both immensely important questions. and I am not in any way trying to avoid the issue. The long-standing practice has been that one deals with the framework in a document of this sort—which is what we are trying to do—and then the question of the expenditure which is incurred in a particular year is dealt with as part of the Government's annual public expenditure survey, the detailed results of which are published each year at approximately the time of the Budget. That explains the Statement made by my right honourable friend the Secretary of State on the question of cost.
In making the general comments that I did, I was genuinely trying to be helpful in spelling out the extent to which we have set out the proposals in considerable detail in the White Paper itself. As the Statement indicates, there will be a further background paper, which will also be published. Most of the specific questions raised by the noble Lord, Lord Northfield, really related to the assisted areas map. There is a very real problem there. There have been big changes in the travel-to-work areas, and they are one of the major determinants of the map itself.
The Department of Employment is currently working on the results thrown up by the 1981 census, so that we can draw up a new map on the basis of known, factual information. I believe it would be wrong—let alone impossible—to make changes in the map ad interim. Frankly, I do not consider that the period of time between now and next Autumn, when we think that the proposals will be brought clearly into their specific form, is an undue length of time to wait.
Lord Prys-Davies: My Lords, ever since the 1920s the case for regional investment in an area such as South Wales has always rested on an admixture of economic and social reasons. Indeed, the steel plant was located in Ebbw Vale in the 1930s primarily for social reasons. But South Wales is today faced with the very difficult task of rebuilding its economic foundations. Therefore, we shall be grateful if the noble Lord the Minister will assure the House that the new criteria will pay proper regard to social considerations as well as economic considerations; and, secondly, that the Government accept that they have a continuing

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responsibility for the old ninteenth century growth areas wherever they may be in this country. Those communities cannot themselves alone rebuild the basis of their life.
Although I agree very much with the need to harmonise our regional policies with those of the EEC, because it is often the case that their problem is our problem, will the review also consider to what extent we are effectively integrating in the regions the EEC policies, the United Kingdom policies, and the local authority policies? Finally, when the noble Lord the Minister considers how the review will influence areas such as Wales and Scotland, and the Welsh Development Agency, and when he writes to my noble friend, will he also be good enough to send a copy of his letter to me?
Lord Cockfield: My Lords, I am grateful to the noble Lord for his comments. I believe it is accepted that regional policy has in general been very successful in Wales. We have made it absolutely clear that the social considerations are extremely important. In fact, the view could be taken that the social considerations may in some instances be more important than the economic ones; considerable doubts have been raised from time to time on the effectiveness of regional policy in economic terms, but it certainly has a most important social role to play.
The Government are fully committed to the maintenance of an effective regional policy. That comes out very clearly in the Statement that I repeated, made by my right honourable friend the Secretary of State. The precise impact of the policy on Wales depends, first, on the assisted areas map—I am sorry to continually come back to this, but it is the crucial element in the whole of this. That is one of the reasons why in paragraphs 40 to 45 of the White Paper we have specifically set down that there are two crucial issues which need to be answered. The first is what criteria are to be applied, and the second, what is the effect of applying those criteria on individual areas. This is clearly of first line importance in the case of Wales. I am grateful, therefore, for the contribution the noble Lord has made. We will, of course, keep a very firm eye on EC policies in this as indeed in other areas.

Petroleum Royalties (Relief) Bill
4.52 p.m.
House again in Committee on Clause 1.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 3:
Page 2, line 7, leave out from ("1934") to end of line 10 and insert—
("

(3A) Subject to subsection (3B) below, in this section "relevant new field" means an oil field—

(a) no part of which lies in a landward area, within the meaning of the Petroleum (Production) Regulations 1982 or in an area to the East of the United Kingdom and between latitudes 52° and 55° North; and

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(b) for no part of which consent for development has been granted to the licensee by the Secretary of State before 1st April 1983; and

(c) for no part of which a programme of development had been served on the licensee or approved by the Secretary of State before that date.

(3B) In determining, in accordance with subsection (3A) above, whether an oil field (in this subsection referred to as "the new field") is a relevant new field, no account shall be taken of a consent for development granted before 1st April 1983 or a programme of development served on the licensee or approved by the Secretary of State before that date if—

(a) in whole or in part that consent or programme related to another oil field for which a determination under Schedule 1 to the principal Act was made before the determination under that Schedule for the new field; and

(b)on or after 1st April 1983, a consent for development is or was granted or a programme of development is or was served on the licensee or approved by the Secretary of State and that consent or programme relates, in whole or part to the new field.

(3C) In subsections (3A) and (3B) above "development" means—

(a) the erection or carrying out of permanent works for the purpose of getting oil from the field or for the purpose of conveying oil won from the field to a place on land; or

(b)winning oil from the field otherwise than in the course of searching for oil or drilling wells;

and consent for development does not include consent which is limited to the purpose of testing the characteristics of an oil-bearing area and does not relate to the erection or carrying out of permanent works.

(3D) In subsection (3C) above "permanent works" means any structures or other works whatsoever which are intended by the licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the licensee to be used only for searching for oil.").

The noble Lord said: In actual fact, I would have liked to ask many more questions on the last issue, but bearing in mind the Deputy Leader's strictures and the desire of the House to get on with this particular business I refrain from asking them. However, I shall be asking them at some future time. I will try to catch up a little time for the Government, and indeed for the Committee; I will not take too long in moving this particular amendment, which I now beg to move, Amendment No. 3, standing in my own name and that of my noble friend Lord Bishopston.
There can he no quarrel with the wording of this amendment, with the single exception that provides for royalty exemption to start from 1983 instead of April 1982. It seems that the only reason for back-dating is to embrace the Alwyn and Clyde fields, the latter being of course a field belonging to Britoil and fomerly to the British National Oil Corporation. The back-dating of relief is, in our view, a hardly disguised means of giving a handout to the Government's own creature, Britoil. There can be no doubt about our view of the back-dating provisions. The Minister of State, Mr. Buchanan-Smith, confirmed this during Committee in another place, when he said (in col. 65):
"I turn to Amendment No. 7, which is concerned with the date. Its simple practical effect would be to exclude the two fields to which the honourable Member referred".
The honourable Member was my honourable friend Mr. Rowlands and he was referring precisely to Alwyn and Clyde. So we know that the Minister of State himself believes that special dispensation was given to those fields, Alwyn and Clyde.
I believe we are entitled to ask why the Government are seeking to hand out such largesse when it is

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completely and absolutely unnecessary. There can be no claim in the case of Alwyn and Clyde that the oil companies involved needed additional incentives to persuade them to go ahead with the development of those fields. They had in fact decided to do so in December 1982. Indeed, the then Secretary of State for Energy, now the Chancellor of the Exchequer, Mr. Nigel Lawson, announced the fact with great pride and a great flourish on 13th December 1982. So there was no question that these two fields were going to be developed whatever happened, and indeed whatever happens in this particular Bill.
There was absolutely no reason why the Government should back-date the provisions to embrace two fields where the decision had already been taken to develop them, and indeed that decision was announced proudly by the then Secretary of State for Energy. There was no need at all for this gratuitous hand-out to persuade the oil companies concerned to develop those fields.
The proposal to back-date the royalty remission certainly has no friends in Parliament, outside the Conservative Party that is. This was shown quite clearly to be the case in Committee in another place when Mr. James Wallace, the Liberal Member for Orkney and Shetland, not only spoke against the back-dating provisions but voted against them on a Division. He was fully convinced by the arguments put against back-dating by my honourable friend Ted Rowlands, the Labour Member of Parliament for Merthyr Tydfil and Rhymney. He was quite unimpressed by the attempted defence of the proposals put by the Minister of State.
I want now to come back to the cost of these proposals. With regard to the proposals as a whole, the argument of the Government has been that a costing exercise of any worth was not possible because there were too many imponderables. That has been one of the arguments of the Government against giving information which we believe they ought to give to Parliament to enable them to come to a reasonable decision about the provisions of this Bill. But with regard to the back-dating provisions the arguments have changed. The Minister of State during the Committee stage in another place, in reply to requests to give an estimate of the cost of the back-dating provisions, took a different line. It is clear that the Government have sufficient information to give some sort of estimate, but the Minister of State declined to make that estimate on the grounds that to do so would involve information which for commercial purposes is confidential. So in actual fact the Government have the wherewithal, they have the information to make an estimate, but they will not make it available to Parliament.
So how are we to judge the measures before us? Parliament has to make a decision about the likely effects of the measures before us, and indeed to assess the potential loss of revenues to the Exchequer and to this nation. But we are being denied information which is fundamental to our being able to make a decision. How on earth are we to make judgments on this basis? How can noble Lords in this place, or honourable Members in another place, properly carry
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out their duty to scrutinise legislation if proper and available information is witheld from them? We on this side of the Committee are of the opinion that, whatever else may be said for this Bill, there is no justification whatever for the back-dating provisions. I therefore, commend this amendment to the Committee and ask for your Lordships' approval.
5 p.m.
The Earl of Avon: As the noble Lord explained, the effect of the amendment is simple. It would exclude from royalty relief the two fields approved between 1st April 1982 and 1st April 1983. All members of the UKOOA would have been aware from the summer of 1982 of the review we were undertaking in close consultation with that association. It was appropriate, therefore, to include the two fields which were approved after the review had begun: Alwyn North in October and Clyde in December. It would also have been reasonable for the participants to expect that any changes to the fiscal regime taken as a result of that review would apply to their fields. I can assure the Committee that no secret assurances were given to the participants in those two fields that they would receive special treatment.
It is true that the decision to develop the two fields was taken while the review that led to the package was still being undertaken. The licensees of those fields could justifiably have cried "Foul!" if their welcome decision to seek approval for development at that time had resulted in their exclusion from the benefits to which the discussions with industry could reasonably have been expected to lead.
It would be wrong of me to quantify the effect of this Bill on the Exchequer's take, even from those two fields. Any estimate would be based on information about production profiles given in the strictest commercial confidence. That is why in another place my right honourable friend the Secretary of State chose a hypothetical field, which the noble Lord quoted.
What Ministers did make clear was that in their judgment these incentives will increase the flow of oil, and so of revenue, and, by no means incidentally, employment in North Sea-related United Kingdom industries. During the Second Reading debate in this House I referred to estimating the effect of this Bill as a crystal-gazing operation. The noble Lord, Lord Stoddart of Swindon, has looked into his crystal ball and sees only a loss. However, it is the Government's belief that the cost of the incentive, in percentage of take in such fields as would have gone ahead even under the old regime, will be substantially outweighed by receipts in PRT and corporation tax on fields which simply would not have been developed. This belief is based on the detailed review last winter of the profitability of respective developments and is confirmed by the very positive response of the industry since the package, including this Bill, was announced in March. I would prefer that the Committee should not accept the amendment.
Lord Tordoff: I must begin by informing your Lordships that I am a beneficiary from a pension fund of a large oil company; which I suspect has little bearing on what I have to say but I say it just the same.

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I did not intervene on the previous amendment, but the truth is that we would not have supported the amendment had it been put to the vote, although it perhaps has some marginal merit. Basically we are supporting the Bill in general terms. I waited to hear what the Government had to say on Amendment No. 3 because I wondered whether there was anything I had missed in reading it. However, I find the Government's explanation on why it contains this retrospective element very thin indeed. I am grateful to the noble Lord, Lord Stoddart of Swindon, for the "commercial break" telling your Lordships what a good chap the new Member of Parliament for Orkney and Shetland is, and certainly it is true to say that he supported this amendment in another place.
I can see no excuse, in a Bill which rightly purports to encourage the oil companies to develop smaller and marginal fields—I am sure that will be the effect of the Bill—nor any reason why there should be a retrospective element on fields where the decision has already been taken. That simply does not hang together with the logic and philosophy behind the Bill. Certainly I shall advise my colleagues to go into the Lobbies with the mover of the amendment and I hope he will press it to a Division.
Lord Bishopston: In the previous amendment there was an attempt to prevent, in effect, a subsidy or grant being given to those who did not necessarily need it. I say "did not necessarily need it" because the Government could not, or preferred not to, give any figures to estimate the loss of potential royalty. The North Sea is an asset of vital importance to the nation. Its income is enough to finance the 3 million or more unemployed and who are jobless as a deliberate result of the Government's economic policy. Therefore, the income from the North Sea which the nation so essentially needs for the redevelopment of our industry is being used to finance 3 million people for whom the Government have no need.
We do not know much about the royalty cuts and how much they would have contributed, for instance, to the financing of the vast sum necessary to sustain the number of unemployed. We have no idea of how much it would have contributed to other areas of public spending or what cuts could have been avoided had such money been available. We have no idea of that sum. The Government are not saying.
On speaking to the previous amendment I said that no other aspect of public spending had experienced such generosity. Local government, education, housing, transport, regional grants, publicly run industry, private enterprise, agriculture—all have the task of proving need when any concessions are sought from the Government. One makes no complaint about that, but in this case there is no requirement whatever on these oilfields, which bring in very desirable vast sums of money to help the public purse, to prove need. Otherwise, of course, the 1975 Act to which I referred on the previous amendment would have sufficed to give such help as was necessary. Other sectors have had to demonstrate need to the Government in order to obtain that largesse.
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Not content with giving a subsidy in the future of unknown financial dimension, the Government's generosity to the profitable oil-producing sector goes back into the past. The Government's case for reduced royalties rested on possible need to encourage future development. That is a case which one can accept. Future development would be difficult and we do not want to put off people when they are hesitating as to whether to invest the manpower, money, materials and in other ways in a development of enormous size. But, by backdating, the Government are exposed on their claim that the industry needs help in an uncertain future.
The Government must have some figures which give an estimate of how much pay-back there will be in this period. In this concession the Government should naturally tell us how much is involved. There is no justification based on potential risk, because the risks have been taken. The production has been put into barrels and sold and one presumes that the royalties have been paid. If they have, they will have to be paid back and there must be some figure as to the extent of that. The past developers knew what was expected when they took on the development and they were prepared to accept it. The Minister has given no argument or any reason why this money should be paid back, even though, as I said, we can see justification to some extent—an extent we would not accept—on the future risks. But there is no justification for this concession.
We are grateful for the support of the Liberal Party. In the words of the noble Lord, Lord Tordoff, no case has been made out. As he suggests, the matter should be tested in the Lobbies.
The Earl of Avon: The noble Lord, Lord Bishopston, ranged widely on this particular point, which is only about two oilfields. If I may take him up on his wide exercise. I believe that the incentives which this royalty Bill will produce will give the Chancellor more revenue than the old system.
Lord Bishopston: I was making the point that the last change was a big concession and this one is even less justified on top of that. The Minister has not given the figures which justify the point that he has just made.
Lord Tordoff: I wonder whether I might distance myself from the more general remarks made by the noble Lord, Lord Bishopston. Quite clearly, noble Lords on these Benches do not regard the oil companies as being rogues and vagabonds tucking away vast sums of money untaxed. But on the narrow point of this amendment, which is what I thought we were speaking to, we will support it.
Lord Bishopston: I certainly in no way ascribe to those concerned with oil production the description mentioned by the noble Lord, Lord Tordoff. I believe that the industry has a great record, but I feel that the moves that we have been discussing this afternoon cannot be justified.
5.11 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 124.

DIVISION NO. 2

CONTENTS

Airedale, L.

Kilmarnock, L.

Ardwick, L.

Kirkhill, L.

Attlee, E.

Leatherland, L.

Aylestone, L.

Lee of Newton, L.

Banks, L.

Llewelyn-Davies of Hastoe, B

Barnett, L.

Lloyd of Kilgerran, L.

Beaumont of Whitley, L.

Lockwood, B.

Beswick, L.

Lovell-Davis, L.

Bishopston, L.

Mackie of Benshie, L.

Blyton, L.

McNair, L.

Boston of Faversham, L.

Mayhew, L.

Bowden, L.

Milford, L.

Brockway, L.

Mishcon, L.

Brooks of Tremorfa, L.

Molloy, L.

Byers, L.

Nicol, B. [Teller.]

Carmichael of Kelvingrove, L.

Northfield, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Phillips, B.

David, B.

Ponsonby of Shulbrede, L. [Teller.]

Davies of Penrhys, L.

Diamond, L.

Prys-Davies, L.

Donnet of Balgay, L.

Rhodes, L.

Elwyn-Jones, L.

Rochester, L.

Ewart-Biggs, B.

Seear, B.

Fitt, L.

Segal, L.

Gaitskell, B.

Simon, V.

Galpem, L.

Stallard, L.

Glenamara, L.

Stedman, B.

Graham of Edmonton, L.

Stewart of Alvechurch, B.

Hale, L.

Stewart of Fulham, L.

Hanworth, V.

Stoddart of Swindon, L.

Harris of Greenwich, L.

Taylor of Gryfe, L.

Heycock, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L.

Tordoff, L.

Hughes, L.

Underhill, L.

Irving of Dartford, L.

Wallace of Coslany, L.

Jacques, L.

Walston, L.

Jeger, B.

Wells-Pestell, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Wigoder, L.

Kaldor, L.

Winterbottom, L.

Kilbracken, L.

Wootton of Abinger, B.

NOT-CONTENTS

Airey of Abingdon, B.

Dilhorne, V.

Allerton, L.

Dormer, L.

Alport, L.

Dundee, E.

Ampthill, L.

Eccles, V.

Auckland, L.

Effingham, E.

Avon, E.

Elton, L.

Bauer, L.

Faithfull, B.

Belstead, L.

Fanshawe of Richmond, L.

Bessborough, E.

Fortescue, E.

Boyd-Carpenter, L.

Fraser of Kilmorack, L.

Caccia, L.

Gainford, L.

Caithness, E.

Gisborough, L.

Campbell of Alloway, L.

Glanusk, L.

Carnegy of Lour, B.

Glenkinglas, L.

Cathcart, E.

Greenway, L.

Cockfield, L.

Grimston of Westbury, L.

Cottesloe, L.

Hailsham of Saint Marylebone, L.

Craigavon, V.

Dacre of Glanton, L.

Hawke, L.

Daventry, V.

Henley, L.

Davidson, V.

Hives, L.

De Freyne, L.

Holderness, L.

Denham, L. [Teller.]

Home of the Hirsel, L.

Devonport, V.

Hornsby-Smith, B.

136

Hylton-Foster, B.

Porritt, L.

Inglewood, L.

Portman, V.

Ironside, L.

Rankeillour, L.

Kilmany, L.

Reay, L.

Kinnoull, E.

Redesdale, L.

Lauderdale, E.

Renton, L.

Lindsey and Abingdon, E.

Ridley, V.

Lloyd, L.

Rochdale, V.

Long, V.

Rodney, L.

Lucas of Chilworth, L.

Romney, E.

Luke, L.

Rugby, L.

Lyell, L.

St. Aldwyn, E.

McAlpine of Moffat, L.

St. Davids, V.

Mackay of Clashfern, L.

Salisbury, M.

Macleod of Borve, B.

Sandford, L.

Mancroft, L.

Savile, L.

Mansfield, E.

Selkirk, E.

Margadale, L.

Shaughnessy, L.

Marley, L.

Skelmersdale, L.

Masham of Ilton, B.

Spens, L.

Maude of Stratford-upon-Avon, L.

Stanley of Alderley, L.

Strathclyde, L.

Merrivale, L.

Strathcona and Mount Royal, L.

Mersey, V.

Middleton. L.

Strathspey, L.

Molson, L.

Suffield, L.

Monk Bretton, L.

Swinton, E. [Teller.]

Morris, L.

Terrington, L.

Mottistone, L.

Tranmire, L.

Moyne, L.

Trenchard, V.

Murton of Lindisfarne, L.

Tryon, L.

Newall, L.

Tweeddale, M.

Norfolk, D.

Vaux of Harrowden, L.

Nugent of Guildford, L.

Vivian, L.

O'Neill of the Maine, L.

Waldegrave, E.

Onslow, E.

Windlesham, L.

Orkney, E.

Wise, L.

Pender, L.

Wynford, L.

Penrhyn, L.

Young, B.

Plummer of St. Marylebone, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 1 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without amendment: Report received.

Coal Industry Bill
Brought from the Commons; read a first time, and to be printed.
Town and Country Planning Bill
Brought from the Commons; read a first time, and to be printed.

Agricultural Holdings Bill [H.L.]
5.23 p.m.
Lord Belstead: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD JACQUES in the Chair.]
Lord Howard of Henderskelfe Lord Howard of Henderskelfe moved Amendment No. 54:
After Clause 7, insert the following new clause:
("Appeals to the Lands Tribunal.
In section 77 of the 1948 Act (Provisions as to Arbitration) after subsection I there shall be inserted the following subsection—
"(1A) An appeal by way of application by any party to an arbitration under section 8(1) of this Act (arbitration on terms of tenancies as to rent) shall on any question of law or fact (including the amount of the award) lie to the Lands Tribunal against the award of any arbitrator appointed by the Minister or by the President of the Royal Institution of Chartered Surveyors; provided that any such appeal under this subsection must be brought within one month of the date of issue of the award"."
The noble Lord said: I beg to move the new clause which appears in my name and in the names of other noble Lords. The new clause reflects the dissatisfaction (I shall put it no stronger than that) that was felt on all sides of your Lordships' Committee in many quarters and for many different reasons, with Clause 1 of the Bill as it came before us. The Bill has had a curious genesis. I shall not dwell on that now, but I hope that at a later stage we may be able to improve the Bill in order to achieve the aim which we have all set out to achieve.
Despite the extreme courtesy of the noble Lord who is in charge of the Bill—courtesy for which we thank him—and despite the charm with which he discharges his duty, he has given us virtually nothing. Certainly we have not received in response to our earlier amendments any firm assurances which would enable us to say, "Right, we are very happy, and we know that the Government will duly amend the Bill on Report so that it meets the dissatisfaction which was felt in so many quarters".
Thus we are faced with the Bill as it is printed, and we have to take it as it stands. We cannot imagine something which is not there. Therefore, we have put down the present amendment containing the new clause, which I must at once confess is somewhat unusual in that at present, in general, there is no right of appeal from the decision of an arbitrator save on a point of law, which has to be made by way of case stated in the county court.
The grounds for the new clause are as follows. As the Bill at present stands, there is a new rent formula, and it is highly complex. We believe that it does not have a proper objective, it does not state what it is actually setting forth to achieve. It is certainly much longer and more complex than anything that we now have, and even if it is amended it is likely to remain more complex than any existing provision.
There will be a great deal of scope for discretion on the part of the arbitrator in determining, where there is reliance on the productivity or the profitability of the holding, in what proportions that should be divided by way of rent to the landlord and profit to the tenant; in determining what, in our words, a prudent tenant would pay and a prudent landlord would accept; and in determining what should be knocked off for scarcity value.
We know, for example, that under the Rent Act, if a rent officer decides to knock off perhaps 40 per cent.
138
for the scarcity value of a particular property, then that, however arbitrary it may be, is what the law calls a finding of fact. I am not a lawyer and I have no professional qualification. Therefore, I have to accept the advice that I am given on that point. I should hardly have thought that it was a question of fact, but that is what the law tells us it is. In the present context, any finding of that kind should be appealable.
We do not believe that at this stage, when we are faced with such a complex formula, such a complex way of achieving what has hitherto seemed a relatively simple result, the arbitrator should have an urestricted and an unsupervised freedom to do precisely what he likes. In similar cases there could be results which would vary very widely, not merely from locality to locality but from one farm in a neighbourhood to another farm in the same neighbourhood.
Earlier in today's proceedings we were told of congratulations which had been received regarding the plain English of a Government form. We cannot claim that our new clause is perhaps as eloquent as that, but it is certainly in plain English, and I hope that it says exactly what it means and is not in any way capable of being misunderstood.
The appeal to a court of law by way of case stated depends on being able to separate out questions of fact from questions of law. Where these are, as we believe they are in this particular case, inseparably intertwined, I do not see how you can possibly separate out these two questions. There are some comparable areas, say under the Leasehold Reform Act and, indeed, in rating. In both cases, lands tribunals have done extremely valuable work not only in settling what might be disputed points of law but in laying down acceptable guidelines that extend the areas where the law and discretion are intertwined.
There has been talk in some quarters about the fact that the thing has worked perfectly well up to now because arbitrators have been extremely sensible, have gone on doing what they have always done and have paid no attention to what the law actually says. If this is true (there may be some truth in it), then it is also true that it brings the law into disrepute. I do not think that any of your Lordships would wish to argue that we should do anything further to bring the law into disrepute at a time when this, in another field entirely, is exercising the minds of trade unions, of the other place and of our greatnewspapers. Anything that we can do to encourage those who have to operate the law to operate it according to the law and not according to what they think it ought to be, should be encouraged. The one thing that should not be encouraged is what an eminent arbitrator said about this: that the whole thing was a load of fudge anyhow, he would determine it according to what the rent ought to be and damn what the words actually said! That cannot be good. It is what we are seeking to avoid.
In seeking to avoid fudge and to ensure that the law is observed and is properly carried out, we have put down this amendment, which is not as novel as it may seem. At an earlier time in this Committee stage I declared myself, I think, an unrepentant and an unreconstructed Englishman. I did not say that nothing good came from north of the Border, and in this case I intend, in fact, to cite Scottish legislation as a precedent for what we are doing now. The proposed

139
wording follows closely Section 5 of the recent Agricultural Holdings (Amendment) (Scotland) Act, which gives a full right of appeal against the arbitrator's findings on questions of law or fact and against the award.
It has been suggested that this may lead to a large number of appeals, that appeals waste a great deal of time and that it will lead to great uncertainty. I do not believe that that is the case. I believe that there may be a few appeals but that they will settle into a general framework within which the law can operate properly, as it does now. I have stated previously that there are very few arbitrations, let alone appeals against arbitrations, and valuers, generally speaking, are able to settle the matter amicably. I am sure that by making this provision in the new clause it will lead to the same procedure, whatever we get by way of a new Clause 1. I beg to move the insertion of the new clause.
Lord Prys-Davies: I should like to apologise to the noble Lord, Lord Howard, for not being in my place when he began his arguments in support of his amendment. I understand that the National Farmers' Union is uneasy about the amendment, fearing that it may be a recipe for unnecessary litigation and expense. On the other hand, the resolving of a dispute between landlord and tenant as to the rent payable by referring the dispute to arbitration does, of course, deprive the citizen of his common law right of access to the courts. We should be clear about that. It is therefore arguable that there should be a right of appeal to another source of authority such as the lands tribunal—an authority which has the confidence of the farming community.
One's fear is that if arbitration under the regime proposed in Clause 7 is not seen to be judicial, then the parties may not be satisfied with the status quo, with a system that deprives them of a right of appeal on fact or law and a right of appeal as to the award. We on these Benches therefore consider that there is considerable merit in the amendment that has been proposed by the noble Lord, Lord Howard.
Lord Renton: I would only wish to add that it is a fundamental principle that prevails throughout the whole of our legal system, except at any rate on this one occasion to which the noble Lord, Lord Howard, has referred, that there should be an appeal. Indeed, throughout the civilised world this is regarded as a principle of natural justice. I am therefore another who would wish to support the amendment.
The Earl of Caithness: I sympathise with the thought behind this amendment, and particularly the reservations of the noble Lord, Lord Howard, with regard to Clause 1. I do not, however, like the amendment. Let us take the appeal on matters of law. There is ample provision at the moment under existing law to appeal on a point of law to a court. I do not think that the lands tribunal is the right vehicle for an appeal of this type. As regards an appeal on fact, that is very dangerous. We have a number of other bodies in the industrial world wanting to appeal on fact, and this could lead to all sorts of difficulties for an arbitrator. If an appeal was made on fact, he might be guilty of misconduct in its technical sense while not
140
committing a shameful act. I would have thought that this was a dangerous precedent to follow.
The noble Lord. Lord Howard, mentioned that the Scottish Act had introduced a rent clause on appeal on fact for arbitration. It is worth remembering that in Scotland there are lay members of the arbitration panel whereas in England and Wales they are all professionals, members of the Royal Institution of Chartered Surveyors or the Central Association of Agricultural Valuers. That is the key difference. I do not think, therefore, that a true comparison can be drawn between the Scottish situation and the English situation. For those reasons. I do not think I can support the amendment.
The Earl of Kinnoull: I am encouraged by what has been said by the noble Lord, Lord Prys-Davies, and by my noble friend Lord Renton, I am sure that it is a fundamental principle that there should be a right of appeal. I am surprised that my noble friend Lord Caithness should talk about its being a dangerous principle. He is a fine Scotsman. He did not object, so far as I know, to the Act going through. It has been in Scottish Acts for quite a few years; it has not simply been introduced in this past year. It has been a fundamental principle of Scottish law that there could be an appeal on both fact and law. Nothing has happened, so far as I know, that gives any reason for thinking that that is a dangerous principle. I support the amendment strongly. I hope that my noble friend will be persuaded that it should be accepted by the Government.
Lord Belstead: I think the noble Lord. Lord Howard, laid a considerable amount of emphasis on the new rent formula. Which, of course, we have now left behind us in Clause 1, but I should just like to remind the Committee that the formula is not designed to alter the level of rents. It is precisely because it has been asserted by some noble Lords that the formula, as drafted, could have an effect on rents that I have undertaken on behalf of the Government to take the rent formula away to try to meet the apprehensions which have been voiced; apprehensions with which the Government do not agree, but nonetheless I am very ready to do that.
Rather than concentrate, therefore, as the noble Lord did at the beginning of his remarks, on the rent formula, I would rather ask the Committee to concentrate on the principles which underlie the making of arbitrations in agricultural holdings cases. Those principles are two and they are enshrined in Schedule 6 of the 1948 Act. My noble friend Lord Waldegrave specifically asked for an assurance that Schedule 6 would remain in being when we were originally debating Clause 1 of the Bill.
I think I am right in saying that those two principles of Schedule 6 underline the making of arbitrations in agricultural holdings cases. They are that the arbitration should be quick and that it should be inexpensive. Honestly, the more one extends the arrangements for the making of arbitrations, the further one is bound to get from the ideal and closer to a process of judicial judgment. I think it is fair to say that in a sense an arbitration is an appeal in that the

141
two parties have been unable to arrange their case together and so they look to the professional judgment of the arbitrator to settle the matter. In particular, I really do think we want to take the very greatest care not to add unnecessary costs to the arbitration process which surely must be of primary importance to the tenant whose whole livelihood may be affected by the outcome of an arbitration.
The noble Lord, Lord Prys-Davies, referred to how the system of arbitration would be seen as it exists in Clause 7 of the Bill. The noble Lord said, in effect, that if it was not seen as being judicial then there was need to have an appeal. Of course, the arbitrator is a professionally qualified land agent. Incidentally, the system is different from that in Scotland where there is a facility to appoint unqualified arbiters; I am sure they are admirable appointments, but nonetheless they are not the same as the appeals which are made in England and Wales.
Precisely because the arbitrator in England and Wales is a professionally qualified land agent (but not a judicial figure) then, as the noble Lord who moved the amendment very fairly said, the present procedures provide that if a rent arbitration raises questions of dispute over points of law, the arbitrator can himself refer that aspect of the case to the county court. There is also provision for application to the county court against an error of law which is apparent on the face of the award; so to provide for appeal to the Lands Tribunal would, so far as the legal aspects are concerned, be imposing one appeal system on top of another.
I should like to make a further point, which is that the need for this amendment has not been called for by the industry in England and Wales. I think that although the right of appeal, of course, sounds right in natural justice, the reason why the industry have not requested it has probably two underlying reasons: one, I think, is because of confidence in the impartial performance by arbitrators, which is, of course, a tribute to their profession. I think the second reason is the fear of high costs of litigation to which tenants might be subjected if the facts, or the amount of an award, were to be referred to a higher court.
Then there is one final consideration which I have to lay before the Committee: because of the constant and heavy pressure on the whole system of justice, both civil and criminal, any proposal to introduce new remedies or to increase recourse to the courts or tribunals really does have to be examined with care to see whether it is essential. This is, I know, a matter to which my noble and learned friend the Lord Chancellor attaches great importance. The reasons which I have already tried to give to the Committee lead me to doubt whether it would be essential to create this new demand on the legal system. I therefore put it to the Committee that, whatever the reasons for including a right of appeal in Scotland, it has not been called for by the farming industry in England and Wales, and would be most unwelcome so far as the courts are concerned.
In this country we have a panel composed solely of fully qualified arbitrators, and ever since the 1948 Act the system, without the right which has been called for in the amendment, has worked; and, so far as I know, it has worked very well indeed. I hope, therefore, that
142
the noble Lord, Lord Howard, and my noble friend Lord Kinnoull, will feel able not to press this amendment.
Lord Howard of Henderskelfe: It is precisely because the previous system worked well under clearly understood, simple guidelines that we feel that what is now going to be an extremely complicated system needs some method of interpretation which is not dependent upon (I will not say "when" because that will convey the wrong impression) the individual thoughts of a single arbitrator, however highly qualified. I very much regret, therefore, that I cannot ask the leave of the Committee to withdraw this amendment.
The Earl of Caithness: Before the noble Lord divides the Committee, if that is his intention, I would point out that we do not know what the new Clause 1 is going to be. Would it not be more sensible to let my noble friend Lord Belstead bring back the new Clause 1, because that might allay all the fears?
Lord Howard of Henderskelfe: It is precisely because we do not know that I wish to press it at this stage. We have two further stages yet to come. If, in fact, on Report we get a beautiful new Clause 1, it is perfectly open to us to remove the obnoxious new clause which I have moved, on Third Reading. I am afraid I must stick to my decision and divide the Committee on this matter.
5.50 p.m.
On Question, Whether the said amendment (No. 54) shall be agreed to?
Their Lordships divided: Contents, 71; Not-Contents, 134.

DIVISION NO. 3

CONTENTS

Ardwick, L.

Jacques, L.

Barnett, L.

Jeger, B.

Beswick, L.

Jenkins of Putney, L.

Bishopstone, L.

John-Mackie, L.

Bowden, L.

Kagan, L.

Briginshaw, L.

Kaldor, L.

Broadbridge, L.

Kilbracken, L.

Brockway, L.

Kinnoull, E. [Teller.]

Brooks of Tremorfa, L.

Kirkhill, L.

Bruce of Donington, L.

Lee of Newton, L.

Carmichael of Kelvingrove, L.

Lindsey and Abingdon, E.

Cledwyn of Penrhos, L.

Llewelyn-Davies of Hastoe, B.

Collison, L.

Lockwood, B.

Dacre of Glanton, L.

Longford, E.

David, B.

Lovell-Davis, L.

Dean of Beswick, L.

Mcintosh of Haringey, L.

Devonport, V.

Molloy, L.

Dilhorne, V.

Monson, L.

Donnet of Balgay, L.

Nicol, B.

Ewart-Biggs, B.

Oram, L.

Gaitskell, B.

Phillips, B.

Gallacher, L.

Ponsonby of Shulbrede, L.

Galpern, L.

Prys-Davies, L.

Graham of Edmonton, L.

Renton, L.

Hale, L.

Rhodes, L.

Heycock, L.

Ridley, V.

Houghton of Sowerby, L.

Ross of Marnock, L.

Howard of Henderskelfe, L. [Teller.]

Salisbury, M.

Segal, L.

Hughes, L.

Serota, B.

Irving of Dartford, L.

Shackleton, L.

143

Stallard, L.

Taylor of Mansfield, L.

Stewart of Alvechurch, B.

Tryon, L.

Stewart of Fulham, L.

Underhill, L.

Stoddart of Swindon, L.

Wallace of Coslany, L.

Taylor of Gryfe, L.

Wootton of Abinger, B.

NOT-CONTENTS

Airedale, L.

MacLehose of Beoch, L.

Allerton, L.

Macleod of Borve, B.

Alport, L.

McNair, L.

Ampthill, L.

Mancroft, L.

Auckland, L.

Mansfield, E.

Avon, E.

Mar, C.

Barnard, L.

Margadale, L.

Bauer, L.

Marley, L.

Beaumont of Whitley, L.

Maude of Stratford-upon-Avon, L.

Bellwin, L.

Belstead, L.

Mayhew, L.

Bessborough, E.

Merrivale, L.

Burton, L.

Mersey, V.

Caccia, L.

Middleton, L.

Caithness., E.

Molson, L.

Carnegy of Lour, B.

Monk Bretton, L.

Cathcart, E.

Montagu of Beaulieu, L.

Cockfield, L.

Morris, L.

Colwyn, L.

Mottistone, L.

Cornwallis, L.

Moyne, L.

Cottesloe, L.

Murton of Lindisfame, L.

Crathorne, L.

Nugent of Guildford, L.

Cullen of Ashbourne, L.

Onslow, E.

Daventry, V.

Orkney, E.

Davidson, V.

Pender, L.

De Freyne, L.

Penrhyn, L.

De La Warr, E.

Plummer of St. Marylebone, L.

Denharn, L. [Teller.]

Diamond, L.

Porritt, L.

Donaldson of Kingsbridge, L.

Rankeillour, L.

Dormer, L.

Reay, L.

Drumalbyn, L.

Redesdale, L.

Dundee, E.

Rochdale, V.

Effingham, E.

Rochester, L.

Elliot of Harwood, B.

Rodney, L.

Elton, L.

Romney, E.

Faithfull, B.

St. Davids, V.

Fanshawe of Richmond, L.

Sandford, L.

Fortescue, E.

Savile, L.

Fraser of Kilmorack, L.

Seear, B.

Gainford, L.

Shaughnessy, L.

Gisborough, L.

Simon, V.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Spens, L.

Greenway, L.

Stanley of Alderley, L.

Grimston of Westbury, L.

Stedman, B.

Hailsham of Saint Marylebone, L.

Strathcona and Mount Royal, L.

Hampton, L.

Strathspev, L.

Hanson, L.

Suffield. L.

Hanworth, V.

Swinfen, L.

Harris of Grenwich, L.

Swinton, E. [Teller.]

Hives, L.

Terrington, L.

Holderness, L.

Teviot, L.

Homsby-Smith, B.

Tordoff, L.

Hunt, L.

Tranmire, L,

Hylton-Foster, B.

Trenchard, V.

Inglewood, L.

Tweedsmuir, L.

Kilmany, L.

Vaux of Harrowden, L.

Kilmarnock, L.

Vivian, L.

Kitchener, E.

Waldegrave, E.

Lawrence, L.

Walston, L.

Lloyd of Kilgerran, L.

Wigoder, L.

Long, V.

Wilson of Langside, L.

Lucas of Chilworth, L.

Windlesham, L.

Lyell. L.

Winstanley, L.

McAlpine of Moffat, L.

Wise, L.

Mackay of Clashfern, L.

Wrenbury, L.

Mackie of Benshie, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.59 p.m.
Lord Renton Lord Renton moved Amendment No. 55:
After Clause 7, insert the following new clause:
("Rules for conduct of arbitrations:
In section 77 of the 1948 Act for subsections (2) and (3) there shall be substituted the following—
"(2) The Lord Chancellor may by order make rules for the conduct of arbitrations under this Act and. in so far as it may be necessary for that purpose, may vary the provisions of the Sixth Schedule to this Act.
(3) The power to make orders conferred on the Lord Chancellor by this section shall be exercisable by statutory instrument (which shall be subject to annulment in pursuance of a resolution of either House of Parliament) and shall include a power, exercisable in the like manner, to revoke or vary any order made thereunder.".").
The noble Lord said: I beg to move Amendment No. 55. The purpose of this amendment is to give the noble and learned Lord the Lord Chancellor the same power to make rules for agricultural arbitrations as he has for the agricultural land tribunals under Section 73 of the Agriculture Act 1947. The rules for the procedure of the agricultural land tribunals made, as I say, by the noble and learned Lord the Lord Chancellor, give general satisfaction, and they have the advantage that they can be amended by statutory instrument without the need to introduce a Bill; that means, without having to wait some years before a Bill is introduced by chance on this subject.
My noble friend Lord Belstead, in his reply to the last debate, said very properly that the procedures of agricultural arbitration should be quick and inexpensive. I suggest to him that they should also be reasonably informal and flexible and not too rigid, but unfortunately their procedure is at present governed by the Sixth Schedule to the Agricultural Holdings Act 1948, and of course any improvements to that can only be made by amending the schedule by statute. Unfortunately, the present procedure is in several ways unsatisfactory for dealing with the many different kinds of matter which are now referred to arbitration under the Act, including of course principally rent arbitrations.
May I give two examples of the defects in the present statutory procedure. For example, under paragraph 6 of that Sixth Schedule the party in the position of a defendant has to deliver his statement of case without having seen the statement of case of the applicant. That seems to me to be contrary to every rule of justice. It is totally inappropriate to those cases which arise under the Agricultural Holdings (Notices to Quit) Act 1977, Section 2, and particularly under Cases D and E.
Those are cases where possession is claimed on the grounds of the breaking by the tenant of the tenancy agreement. Of course, we all know that such claims give rise to various rather technical and difficult questions: for example, whether the tenant is estopped by his conduct from denying that he is an assignee of his father's tenancy and so bound by its terms. In cases like that it is surely only fair to the defendant that he should know the case made against him and be given a proper opportunity of answering it when he has seen it. which at the moment under the statutory procedure he has not got.
Now another example. Under the Sixth Schedule there is no provision for the relaxation of the time

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limits for delivering the statements of case. They have to be delivered within 28 days of the appointment of the arbitrator. That was increased from 14 days in 1963, and under a schedule to this Bill it is to be increased to 35 days. Fair enough. But so far as I know there is no other court, tribunal, or arbitrator which is confined to a rigid time limit whatever the circumstances, so that if that time limit is exceeded through no fault of his own he is shut out from putting his case forward at all. There is another example of injustice arising from statutory provisions.
I suggest that that sort of rigidity is something which we should get rid of, and this Bill enables us to do so. It is even more important to do so after the defeat of the previous amendment in the last Division, because there is to he no general right of appeal, only the limited right of appeal under the 1977 Act. Surely, is it not absurd that arbitrations—which should, as my noble friend said, he quick and inexpensive, and I say flexible—should be governed by such a rigid statutory procedure while the procedure in the Agricultural Lands Tribunal is governed by rules made by the Lord Chancellor, which is the case with nearly all legal proceedings in this country? They are governed either by rules of the High Court, to which the Lord Chancellor is a party, or by rules made by the Lord Chancellor himself.
This amendment is a probing amendment—I would not wish to divide the Committee at this moment—and I should be grateful if noble Lords on either side of your Lordships' Committee would express your opinions as to the merits of this, and when my noble friend has had a chance to consider the matter further, no doubt in consultation with the Lord Chancellor, perhaps then we may get this matter properly and finally resolved at Report stage. I beg to move.
Lord Pry's-Davies: I have listened with great interest to the noble Lord, Lord Renton, speaking in support of his amendment. Under the existing legislation (that is, Section 77(2) of the 1948 Act) the Minister is empowered to make rules for expediting, or reducing the costs of, proceedings and arbitrations—full stop. That is as far as we go. When I first read the amendment I thought that it was a fairly sweeping amendment; that it gives to the Lord Chancellor, by order, the authority to make rules for the conduct of arbitrations. I was in some difficulty in defining the phrase "conduct of arbitrations", but the noble Lord, Lord Renton, has helped the Committee considerably.
The noble Lord has shown that what he has in mind is that the parties should disclose their case, and that there ought to be a flexible timetable. I should have thought that those are matters which we ought to welcome, certainly in the changed climate if and when this Bill is enacted. I should have thought that the amendment would be helpful to the arbitrator, and indeed helpful to those who have to prepare the cases before they appear, or in appearing, before the arbitrator. We would support the principle of the amendment.
Viscount Dilhorne: I should like to support my noble friend Lord Renton very vigorously. There is only one thing I wish to add, and I shall take a very
146
short time doing it. It concerns the rigid time limit and the appointment of an arbitrator. The current practice is to delay the date at which it can be said that the arbitrator is appointed, to give the longest possible time for the notice to be put in within time. This one might call a purely benevolent contrivance to save the parties from the catastrophic consequences of not serving the notice in time. The Government propose to ameliorate this situation by extending the 28 days to 35 days; but it does not get round, or get rid of, the problems caused by retaining a mandatory time limit.
The purpose of this amendment is to bring these rules which are under the Sixth Schedule under the ordinary rules of the court. There is nothing exceptional about that. It does not propose to amend the Act.What it proposes is to enable the Lord Chancellor to bring in rules concerning arbitrations which enable time to be extended to overcome the rigid application which can only work to the disadvantage of really all the parties concerned. These are the same powers that arbitrators have under the Arbitration Act.
Lord Belstead: The statutory code for agricultural arbitrations has endured substantially unamended since 1948. If I may be forgiven for repeating it, it has served well in the great majority of cases. If there are specific improvements for which a case can be made out there is the opportunity in the Bill to do something about them.
If my noble friend Lord Renton will forgive me, the disadvantage of his amendment is that it would mean that we should have to look in two separate places—first in the Act and then in a supplementary order which was made by the Lord Chancellor—for the full details of the law relating to agricultural arbitrations. That would be the disadvantage if the amendment were made.
The advantage has been clearly explained by my noble friend and supported by the noble Lord, Lord Prys-Davies, and by my noble friend Lord Dilhorne. Indeed, my noble friend, as I should have expected of him, has supported his general case with two specific cases. First, my noble friend complained about the unsatisfactory situation which exists at the moment concerning silence, in so far as the legislation is concerned, on the requirement that cases should be exchanged. It is perfectly true that at the moment nothing is being done about that, though it is a matter to which we could turn our attention in the Bill. The other example which my noble friend gave was the question of the time limit for the period set for the presentation of cases. There, we have done something, because we have extended the time limit from 28 to 35 days.
I realise that that answer does not meet head on the case which my noble friend made, which, in a word, is the need for flexibility. In view of the three speeches which have been made, I ought to, and I do, undertake to approach the Lord Chancellor to see whether it might be possible for the Lord Chancellor's office to consider taking this on. I shall not weary your Lordships with the difficulties that there are in asking any department of Government to take on any additional work, but I shall do what my noble friend

147
has asked me to do and come back and report on it at the next stage.
Lord Renton: I am grateful to my noble friend, to the noble Lord, Lord Prys-Davies, and to my noble friend Viscount Dilhorne. I shall make one quick point. The noble Lord, Lord Prys-Davies, properly referred to the power under Section 77 of the 1948 Act on the part of the Minister to do two very limited things—this is the power of the Minister not of the Lord Chancellor: it must be—for expediting arbitrations or for reducing their costs. That does not deal with the fundamental problems which I mentioned.
It is relevant to what my noble friend Lord Belstead said, when he said that we do not want people to have to look in two places, to point out that they have to look in two places at the moment: they have to look at the Act (and they will have to look at this Act) and they also have to see whether the Minister has made any order.
In the further discussions with the Lord Chancellor's department and the Lord Chancellor himself, I hope that the Minister's powers will be done away with and will be absorbed into the powers to be given to the Lord Chancellor. That will overcome the problem. I am grateful and I look forward to the report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 56:
After Clause 7, insert the following new clause:
("Joint applications.
After section 77 of the 1948 Act there shall be inserted the following section—
"77A. The court may on the joint application of the persons who will be the landlord and thetenant in relation to a tenancy which will be a tenancy to which this Act applies authorise an agreement excluding in relation to that tenancy such provisions of this Act, of the Agriculture (Miscellaneous Provisions) Act 1976, of the Agricultural Holdings (Notices to Quit) Act 1977 or of the Agricultural Holdings Act 1983 as may be specified in the agreement; and the provisions so specified shall have no effect in relation to that tenancy.".")
The noble Earl said: For three days—this is our third day in committee—we have been struggling in all parts of the Committee to find ways to strengthen the landlord and tenant system, to stop the decline and, as my noble friend says, to bring fresh blood and fresh life into the system.
The amendment in the names of my noble friends and myself seeks to do that. It is the principle that I want to discuss. In previous amendments we have had fixed term tenancies, which my noble friend Lord Onslow moved and which sought to encourage landlords to offer tenantsthe possibility of farming. We had the retirement amendment, moved by the noble Lord, Lord John Mackie, and the noble Lord, Lord Northfield, moved in a different form. We then had an important statement from my noble friend when he stated that outside the Bill the Minister intended to increase the period of time for the extension of the Section 2 licences which my right honourable friend can issue under the 1948 Act. This was an important power which my noble friend rightly said he saw as a useful support for the landlord and tenant system.
The amendment concerns the term "contracting out" of the Act. It is taken from the Landlord and Tenant Act, 1954, which deals with commercial tenancies. There the landlord and the tenant can make joint application to contract out of the Act. I am not sure that the noble Lord, Lord Northfield, will agree, but the principle is good so long as it does not drive a coach and horses through the security of tenure. I believe that there are ways to restrict this principle. This is a probing amendment, so the restrictions are not included, but I believe that there are ways which could usefully be considered by my noble friend and the Committee. I hope that my noble friends will support the principle of the amendment. I beg to move.
Lord Walston: I agree with the noble Earl on two things that he said. The first is that there is much to be said for enabling willing tenants and willing landlords to agree to a term of tenancy between them. I also agree with his wish not to drive a coach and horses through the present security of tenure but my worry is that, as this is drafted, it does drive, if not a coach and horses, at least a fairly substantial Victoria or brougham through the present legislation and desired legislation.
As I see it, the sort of situation that might arise if this amendment were adopted would be that when a farm became vacant and the landlord was looking for a tenant, a large number of people applied and he let it be known (either directly or indirectly) that preference would be given to that tenant who was prepared to make use of this clause, even if he had offered a lower rent or his qualifications were not so good. It is obviously in the interests of the landlord to have a term tenancy. Therefore if, out of the scores, or possibly hundreds, of applications for the tenancy, one tenant could be found who was prepared to offer a term tenancy he would be most likely to get it.
If the noble Earl and his noble friends or other noble Lords could, between now and Report stage, evolve a method by which this difficulty could be overcome, I should be far more sympathetic to it and so would my noble friends, but I cannot support it as it stands.
Lord Stanley of Alderley: My noble friend is entitled, if he wishes, to move a wrecking amendment, but he should not hide his light under a bushel. He should say, as I say, that this is a wrecking amendment.
Lord Prys-Davies: On this occasion we are unable to support the noble Earl's amendment. As the noble Earl has conceded, this amendment echoes the opting out provisions contained in the Landlord and Tenant Act 1954 relating to business tenancies, but we cannot compare an agricultural tenancy with a business tenancy. We are not comparing like with like. With a business tenancy which was provided for by the relevant section in the 1954 Act, as amended, the parties have in mind a short-term tenancy. It may be a weekly tenancy, a monthly tenancy or a quarterly tenancy; but it is the firm intention of the parties that the tenancy shall not exceed a period of six months. They have in mind. in general, a short-term tenancy,

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a temporary tenancy, whereas with an agricultural tenancy we have in mind a long-term investment. If this amendment is approved this is a way of by-passing the enactment, and it would be a disincentive to long-term investment.
The Earl of Onslow: As your Lordships know, I am very much in favour of the concept of limited, short-term tenancies. I hope that I shall be able to bring to your Lordships' House at Report stage a fairly detailed amendment (which will be drafted by somebody with knowledge and skill in legal affairs) which will enable the Minister to make regulations in such circumstances as to be definitely limited to short-term tenancies. I really think that this one goes much too far. I tend to agree with the noble Lord, Lord Walston, that it will produce a situation where you can only have a tenancy if you agree to go to the court and ask for this limitation to be put upon it.
I think that at some stage we must go to limited forms of short-term tenancies. Equally, I think that there is force in the argument of the NFU that it should not become a permanent and automatic feature of the landlord and tenant relationship. I think that the idea behind it—to enable short-term tenancies—is a very good one, but it goes much too far. I hope that (with considerable help from others who are cleverer than I) I shall be able to produce an amendment at Report stage which will cover the points raised in the Northfield Report and the points made by the noble Lord, Lord Walston, but will still enable us to update and give teeth to Section 2 rather than to introduce a totally new concept.
Lord Belstead: In moving this amendment my noble friend Lord Kinnoull has reminded the Committee that we have been at this Bill in Committee for three days. I should like to assure my noble friend that it does not seem like that to me. Indeed, when we moved into Committee about an hour ago I was reminded of the humorous monologues of Gillie Potter who, some years ago, I used to hear on the BBC and who started one of his talks with:
"Here we are all assembled, eager, excited and, I trust, sober, to enjoy a periodical ten minutes of edifying uplift tempered with innocuous hilarity".
On this amendment we have certainly seen a certain amount of diversity. My noble friend moved the amendment with the plea that it was a modest little amendment which would make a small but valuable improvement to the Bill. That was followed fairly quickly by my noble friend Lord Stanley of Alderley, who simply said, "It is a wrecking amendment". Finally, the short debate which we have had was wound up by my noble friend Lord Onslow, who used the opportunity to make, with his customary skill, a plea for short-term tenancies.
In replying to the amendment, perhaps I may make a point which has not been made. On this amendment I think that for a second we ought to look back. I am advised that the very first Agricultural Holdings Act, which was of 1875, introduced for the first time a statutory code of compensation on quitting. However, the Act did not prohibit contracting-out, with the result that landlords almost invariably chose to do so. The 1875 Act therefore became largely ineffective,
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because people contracted out. As a result, in 1883 it was followed, so I am told, by a further Act which prohibited contracting out. In a sentence, I do not want to see us go through that again. I think that the noble Lord, Lord Walston, had justice in his assertion that we could see that this would drive a coach and horses through the legislation. When I say "the legislation", let us remember that what we are talking about is legislation which has stretched over the years relating to those vital things: rents, security of tenure and compensation.
My fear would be that, if this amendment were made, we might see that there would be competition between aspiring tenants which might serve only to bid up the conditions which they would be prepared to accept in the interests of obtaining a new tenancy; and that we would end up with a form of key money paid not in cash but in kind. I hope that my noble friend will forgive me if I add the Government's voice to others in criticism of this amendment. I can understand why my noble friend has put it forward, but it really does give us concern and I hope that my noble friend will feel that he does not have to press it.
Lord Monson: Surely this Conservative Government, of all Conservative Governments, purports to believe in the principles of the free market. Why, therefore, do they not allow these principles to apply to agriculture?
Lord Belstead: That is a good question and the answer, fortunately, is readily available. It is available—and there are many noble Lords in the Committee this evening who could answer it so much better than I—within the agricultural holdings legislation which has been built up over the years and which is particularly tailored to the needs of agriculture. The success of farming, after all, depends on the land and the way it is looked after. That is why we have separate legislation for agricultural holdings.
Lord Hylton: Before the noble Earl who moved the amendment makes up his mind what to do with it, may I ask whether he will consider writing into his amendment, perhaps at some future stage, a provision that the tenancy must endure for (shall we say?) 15 years or 20 years, so that the period of security would be quite long but not indefinite and not totally uncertain, as the law has been standing recently?
Earl Waldegrave: If this debate is to continue, I think we should remind ourselves that we are trying to legislate (we are not bound to legislate in any way) to give effect to the so-called package and agreements that were before us and were brought in by the meetings of the CLA, the landowners and the tenants. This would be very far outside the whole basis of what they agreed upon together, and, in that sense, it would justify the term used by my noble friend Lord Stanley of Alderley, "a wrecking amendment". That is from their point of view; although, of course, Parliament is entitled to legislate how it likes. But we are trying (and we have so far succeeded, I think) to keep within the bounds of the agreement made by the two sides of the industry.
Lord John-Mackie: Regardless of what we think of this amendment, the noble Earl, Lord Waldegrave, if he had listened to his noble friend the Leader of the House, would have realised that it is Parliament that is dealing with this, and not the CLA and the NFU. I must make it clear that the noble Earl, Lord Kinnoull, has every right to bring this forward. We have agreed that we are dealing with a Bill in connection with which amendments have to be debated and that the CLA and NFU package has nothing to do with it.
Earl Waldegrave: I entirely agree with every word that the noble Lord opposite has said, if I may say so. I said, though, that we must bear in mind that we were trying, if we could—and I was one of those who would like to, if I could—to legislate within the consensus and not go against it. This would go against that consensus, and I am merely reminding noble Lords of that.
The Earl of Kinnoull: I believe that the CLA and the NFU have made a valuable contribution, but I hope that this Chamber will make an even more valuable contribution to what we are trying to seek, which is, in the words of my noble friend, to meet the needs of the agricultural holdings. I am frightened that we are not meeting those needs. In fact—and this is not being over-dramatic—we are looking today at the fairly rapid death of the landlord and tenant system. The situation will not be helped by the present state of this Bill. My simple amendment was not a wrecking amendment but a probing one. It was intended to encourage Members of this Chamber to express their views, as they have done. I am most grateful to all Members for speaking as they have.
The problem with the short-term tenant is the social and moral problem of turning him out of the house. Turning him out of a house after some 20 years is not easy, socially or morally, whereas if you contract out of the landlord and tenant security system it is, in my view, a much more positive commitment; and it is for that reason that I suggested it to my noble friend. I do not wish to detain the Committee any further on this most important side of trying to preserve the landlord and tenant system. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 57, 58 and 59 not moved.]
6.33 p.m.
Lord John-Mackie Lord John-Mackie moved Amendment No. 60:
After Clause 7, insert the following new clause:
("Sale of smallholdings
No land held by a smallholding authority for the purpose of smallholdings shall be sold by the authority unless the Minister of Agriculture, Fisheries and Food (or the Secretary of State for Wales in the case of Wales) is satisfied after affording opportunity to all persons interested to make representations and objections in relation thereto that the land is not required for the purpose of a smallholding and certifies accordingly.").
The noble Lord said: We have put down this amendment at the request of people interested in the whole question of the sale of smallholdings. As we know, there has been quite a lot of feeling about the fact that several councils, no doubt because of the restrictions put on them by the Government in the way of spending, have taken the opportunity presented
152
when smallholdings have become vacant to sell. I see that one council dealing with a batch of smallholdings to sell has tenanted them. But the main point we have here is that there should be no question of smallholdings being sold without permission from the Minister. I am sure that is something which would satisfy much of the feeling there has been about the sale of smallholdings in various parts of the country. I beg to move.
Viscount Ridley: I hope the Government will resist this amendment with the success it has so far shown this afternoon. I think I am justified on what my noble friend Lord Swinton said on Second Reading, that he will do this and that it is Government policy not to accept this proposal. I am sure your Lordships will not be surprised when you hear me say that local authorities will regard this as a totally unjustified attack on their powers of decision. Quite a lot of powers of local government have been removed by this Government since they came into office. They came into office pledged to a bonfire of controls; the fire went out rather too soon. However, this is a control that I think should not be brought back at any price. If a local authority wants to sell land which it owns, surely that is a decision which it should be entitled to take. If the Minister is tempted to intervene, then I think the Government should be bound by their own logic and buy the land themselves from that local authority.
I do not think it is possible to ask local authorities to make economies and sacrifices at the moment, which definitely does mean selling assets, and then try to prevent them from doing so. Nor can I imagine a more cumbersome and expensive process than, as the amendment says,
"affording opportunity to all persons interested to make representations"—
and so on. That looks like having a public inquiry into the sale of every small parcel of land in future, and surely that would be a bureaucratic nightmare which this Chamber should not countenance.
The power to veto sales of smallholdings disappeared in the 1970 Agriculture Act. To bring it back, I submit, would be making the provision of smallholdings mandatory, which it is not now, and also a retrograde step and a waste of everybody's time.
The only possible exceptions to this rule might be where the tenancy of a smallholding was artificially terminated as it might have been had the Amendments Nos. 46 and 49, which I moved two weeks ago, been accepted where the tenant is, as it were, asked to leave by the smallholdings authority. There should be some protection over the land in that case. It might be of interest to your Lordships to know that there is ony one county council in England with a definite policy of selling smallholdings, and that is Derbyshire. It is hardly controlled by members of this party. It is said to be controlled by the far Left of the party opposite. I do ask the Government not to accept the amendment.
Lord Northfield: I have a good deal of sympathy with the amendment, and I was rather surprised by the remarks of the noble Viscount, Lord Ridley. The fact is, as he says, that the power existed in the Minister until 1970 and was then abolished. It may well be that

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he is right in saying that the Derbyshire County Council want to sell, and there has certainly been pressure in Norfolk and in Shropshire. I would not be surprised if in the years to come there was pressure elsewhere, on the grounds that this is in many cases an asset which is now at historic cost and on which a nice profit can be made and invested elsewhere. There is nothing wrong with that except that we have to set other criteria. One other criterion in judging whether that is a proper decision to make is whether smallholdings are in the national interest and whether they perform a very important function as the gateway (as the Wise Committee called it) in helping people to get into the industry.
I want to make my next point very strongly. My own Committee found that smallholdings provide something like 15 per cent. of the opportunities for new entrants to come into the industry. Fifteen per cent. is not a negligible figure. In other words, it means that if the idea of selling smallholdings gathered pace we would be losing a significant part of entry possibilities for people, whether they are young or old, into the industry. So, if I may say so, the particular interest of particular local authorities is, in my view, overridden by the national policy, which is to try to keep opportunities for entry into farming as open as possible. Therefore, it is important to try to prevent these county sales.
The second point I would like to make is that this is not a burden on local authorities. We examined the figures and found that the investment was worth something like £200 million, taking the country as a whole. That is not getting a bad return. In other words, these are not a drain on the total capital and income problems of the counties, taken as a whole. So there is a second reason for saying, "Go steady on this because wider issues are at stake".
Part III of the Agriculture Act 1970 gave the Minister power to call for further reviews of the progress made by local authorities in reorganising their smallholdings in order to make a better estate of them all; in other words, to make more really viable holdings out of the total that they own. That is a very important power, and the local authorities have been encouraged to carry out these reviews in order to try to get the smallholdings as a whole into a more viable state.
I should like the Minister to tell us whether the department is now prepared, given the lapse of time since 1970, to call for some more reviews. There are powers-1 have just been reading them again in Part III of the 1970 Act—to call for reviews to make sure how our stock of smallholdings is being managed, is being reorganised and is being made more viable. That would give the country as a whole a better chance to bring up to date our thinking about these smallholdings. But I repeat that we really must say to the noble Viscount, and to the local authorities who are behind him, "Please take into account national considerations about the need for farms to let in our community and do not always be influenced by what might well prove to be short-sighted anxiety to make a capital profit." That would he the last way in which we ought to be using this very valuable stock of land, which provides a useful opportunity for young people to enter farming.
Lord Collison: May I briefly support this amendment? I entirely agree with what my noble friends have already said. Of course I, too, have an interest in the existence of smallholdings to which people can go after they have worked in agriculture, maybe for years. I am speaking in terms of agricultural workers. They want to find smallholdings and we want them to be there for them. In fact, the stock is not very large, although, as we have heard, 15 per cent. of the people who go into agriculture go into these smallholdings. It is important that we make sure that they continue to exist. Everything else that could have been said has already been said, so I shall merely say that I support this amendment.
Lord Mackie of Benshie: We, too, should like to support the principle of this amendment, but I shall not go over the arguments about the stock of smallholdings and entry upon the farming ladder, which are extremely important. I should like the Government to accept this amendment, because that would show their bona fides. This Bill is intended to make more land available for letting and to improve entry upon the ladder, and the Government are backing an agreed measure. At the same time, I am afraid about the pressures on local authorities. I do not think that they sell to make a capital profit so much; it is just that they want to sell because they are extremely "strapped" for money due to the other policies of the Government. So, if the Government accepted this amendment, it would raise an interesting situation in which, on the one hand, the Government were trying to reduce the money, and, on the other hand, they would have to accept the responsibility for prohibiting a sale if it was in the interests of the general agricultural industry and of the farming ladder which is so essential to that industry. So this is a very useful amendment and I am sure that the Government will look favourably upon it.
Lord John-Mackie: I think everyone agrees—and certainly the noble Earl, Lord Waldegrave, will agree—that this Bill is meant to retain as many farms, large and small, as possible in the landlord-tenant system, but up gets the noble Viscount, Lord Ridley, and damns it. The amendment may not be very well worded, hut, as everybody has said, it is something that we should look at very carefully. I am obliged to my noble friend Lord Northfield for what he has said, and he put the case very well. As the noble Viscount can see, there is considerable support for this amendment and to damn it in the way he does shows that he is not very keen on the Bill.
Viscount Ridley: Before the noble Lord sits down, will he acknowledge that I made a long speech in favour of statutory county council smallholdings on a previous day, and I do not recall his supporting what 1 said at that time?
Lord Hylton: I hope that local authorities will not be pressurised by short-term financial considerations into selling off their smallholdings willy-nilly. I hope, also, that before they sell off any they will take into consideration the importance that there may be, particularly in remote places, in part-time holdings. I hope that they will not assume that every single smallholding

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must be a full-time one which gives employment to a whole person for a whole year.
I can think of many situations where people who are very valuable in the local rural scene may earn half a living from their smallholding; for example, the man who drives a school bus in the morning and afternoon, and the man who has a part-time milk delivery round or something of that sort. There are all kinds of part-time jobs in villages which can be combined with agricultural smallholdings. This amendment may provide us with the opportunity of asking the Government whether they have any advice to give to local authorities on this point of the part-time holding.
Lord Belstead: I am a little worried that the Opposition Front Bench is becoming fuller. I hope that that does not mean that this is the preparation for a Division on this important amendment, which has given rise to lively debate, but rather that the Opposition Front Bench finds that this is a moment for a pre-prandial period of reflection and mental improvement.
I should like to say "Thank you" to my noble friend Lord Ridley for making the simple point that the Government in May 1979 issued guidance to local authorities, saying, among many other things, that they should have freedom to retain or dispose of any interests in land which they owned, and I must make it clear to the Committee on this amendment that the Government do not intend to go back on that guidance. In our view, the sale of smallholdings is a matter about which local authorities should be allowed to make their own decisions.
But may I add one point which I have not heard made during this short debate? In exercising its own commercial judgment. a smallholdings authority may not necessarily be deciding, simply by selling a proportion of its smallholdings, to relinquish. It may be deciding to rationalise its management by selling some of its land and using the proceeds from that sale to maintain and improve buildings and equipment on existing holdings, in order to promote greater efficiency. Iam grateful to the noble Lord, Lord Northfield, for nodding, because I thought your Lordships might say that that is rather a two-faced way of saying that something is being done when, in fact, something else is being done.
It is right to remember that one of the difficulties of running smallholdings in this country is that it is known that the costs of administration are about 20 per cent. higher than they are for landlords if they are running their own private let land. Therefore, particularly at this time and in the financial situation in which we have found ourselves over the last few years, there are bound to have been calls, from time to time, for local authorities to consult within themselves as to whether they ought to make a rationalisation of that kind.
I am grateful to the noble Lord, Lord Collison, for taking the time not only to attend the Committee but to take part in this debate. His very long experience in these matters, even though I am not agreeing with him on this amendment, is certainly appreciated by all of us. He made the point that there is quite a high percentage of entrants into agriculture who are to be
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accounted for by those who take up smallholdings, and the noble Lord, Lord Mackie of Benshie, made the point that it is hoped that smallholdings provide a ladder. I think that the first point is absolutely right, but regrettably the second point is less so.
The latest figures that I have—and I think that they are not much more than a reflection of what the Northfield Committee discovered—show that, out of a total of some 7,000 tenants in England and Wales in the 10-year period to 1980–81, an average of only 14 tenants per year moved on to other farms in the private sector. I wish, as I am sure all Members of the Committee wish, that that figure was higher.
Lord Mackie of Benshie: Surely it is the purpose of this Bill to provide the farming ladder.
Lord Belstead: It is indeed: I agree with that. But it is not very much good putting forward the argument that there is a long ladder up which tenants of smallholdings are climbing at the present time, because the ladder is short and they are not climbing in very large numbers. I wish those numbers were greater.
I would say on behalf of the Government that we intend to leave to local authorities the decision as to whether they feel that they have to rationalise their holdings at any time. We do not consider that it is a part of central Government's function to "second guess" the decisions of local authorites in that respect. On those grounds, we cannot support the amendment.
Lord Northfield: I hesitate to intervene again but I find the Minister's reply disappointing. Certainly my committee said that we quite understood there should not be a blanket veto on all sales—and that is why I nodded my head—because there was need to rationalise estates and perhaps to sell some land in order to buy other land and make particular units more viable, which is part of the direction given under the 1970 Act.
My committee set out some proposals in respect of that matter. We said that if local authorities want to sell smallholdings, at least they should be encouraged to do so on a sale and lease-back basis; so that if an institution, for example, could be persuaded to buy land and lease it back to a local authority, they would get the capital they were looking for but the land itself would not go out of smallholdings use. That, after all, is the main objective of this Bill—to preserve the opportunity of tenancy.
It is very disappointing that the Minister has not addressed himself to alternatives of that kind. We could find a way of giving the Minister not so much power totally to veto but power to say that certain lands comprised of smallholdings shall remain part of the national stock of smallholdings. If local authorities want to sell land to someone else, all well and good, provided that they do not go out of the national stock of smallholdings.
There are precise proposals about that aspect in our report. If the Minister does not intend to comment on them—which itself is rather disappointing, given that the report has been on the table for four years with those proposals in it—then perhaps we can all return to this matter at Report stage and put down an

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amendment to that end. At least the Minister should be furnished with the power to retain such land in the national stock of smallholdings while leaving certain freedom with the local authorities, if they insist upon that.
Lord Belstead: The noble Lord, Lord Northfield, is being absolutely consistent. I know that he has raised this line of argument earlier in the progress of the Bill, and the points of which he has reminded the Committee were set out in his very valuable report. But I would be misleading the Committee if I did not say that the implications of the guidance which the Government gave to local authorities when we came into office in May 1979 are that we intend local authorities to have freedom of discretion in these matters.
Of course the Government do not wish to see smallholdings being taken out of agricultural use. One of the valuable comments which my noble friend Lord Ridley included in his words this evening was the evidence he gave that local authorities are in the main—indeed, he put it even more starkly than that—not embarking on some kind of wholesale policy involving the sale of smallholdings.
With that comfort, I must also be intransigent so far as that which the noble Lord has put to me about the wish he has to see the Government at least move some way towards becoming more involved in smallholdings matters. We do not intend to do that; we intend to leave it to local authorities.
Lord John-Mackie: I am grateful to my noble friend Lord Northfield for what he has said. We on this side are very disappointed at the reply of the noble Lord, Lord Belstead. I do not know that we have any evidence that a local authority has sold any smallholdings in order to rationalise its estate and use the money for constructing new buildings or buying new land. Certainly I have never heard of such a case.
It is rather peculiar that the noble Lord the Minister is very anxious that the Government give to local authorities the power to sell and to raise money, but not the power to spend it: the Government curtail their spending but are prepared to let local authorities raise money in that way. There is quite a lot of feeling about this matter, and I believe that we should divide the Committee and see what that feeling is.
6.55 p.m.
On Question, Whether the said amendment (No. 60) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 96.

DIVISION NO. 4

CONTENTS

Airedale, L.

Carmichael of Kelvingrove, L.

Alport, L.

Cledwyn of Penrhos, L.

Ardwick, L.

Collison, L.

Barnard, L.

Cornwallis, L.

Beaumont of Whitley, L.

David, B.[Teller.]

Bishopston, L. [Teller.]

Dean of Beswick, L.

Bowden, L.

Diamond, L.

Briginshaw, L.

Donaldson of Kingsbridge, L.

Brooks of Tremorfa, L.

Donnet of Balgay, L.

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Ewart-Biggs, B.

McNair, L.

Gaitskell, B.

Molloy, L.

Galpern, L.

Nicol, B.

Graham of Edmonton, L.

Northfield, L.

Hampton, L.

Peart, L.

Hanworth, V.

Ponsonby of Shulbrede, L.

Heycock, L.

Prys-Davies, L.

Houghton of Sowerby, L.

Rhodes, L.

Howie of Troon, L.

Rochester, L.

Hughes, L.

Seear, B.

Jacques, L.

Shackleton, L.

Jeger, B.

Shinwell, L.

John-Mackie, L.

Stallard, L.

Kilbracken, L.

Stedman, B.

Kilmarnock, L.

Stewart of Alvechurch, B.

Kirkhill, L.

Stewart of Fulham, L.

Lee of Newton, L.

Stoddart of Swindon, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Mansfield, L.

Lockwood, B.

Underhill, L.

Longford, E.

Wallace of Coslany, L.

Lovell-Davis, L.

Walston, L.

Mcintosh of Haringey, L.

White, B.

Mackie of Benshie, L.

Winstanley, L.

NOT-CONTENTS

Allerton, L.

Mar, C.

Auckland, L.

Margadale, L.

Avon, E.

Maude of Stratford-upon-

Bauer, L.

Avon, L.

Bellwin, L.

Mersey, V.

Beloff, L.

Middleton, L.

Belstead, L.

Molson, L.

Bessborough, E.

Monk Bretton, L.

Boston, L.

Morris, L.

Brougham and Vaux, L.

Mottistone, L.

Buccleuch and Queensberry, D.

Murton of Lindisfarne, L.

Napier of Ettrick, L.

Burton, L.

Northbourne, L.

Caithness, E.

O'Neill of the Maine, L.

Carnegy of Lour, B.

Onslow, E.

Cathcart, E.

Orkney, E.

Coleraine, L.

Orr-Ewing, L.

Colwyn, L.

Penrhyn, L.

Dacre of Glanton, L.

Peyton of Yeovil, L.

Davidson, V.

Plummer of St. Marylebone, L.

De La Warr, E.

Denham, L. [Teller.)

Portland, D.

Devonport, V.

Rankeillour, L.

Dilhorne, V.

Reay, L.

Drumalbyn, L.

Redesdale, L.

Effingham, E.

Ridley, V.

Elliot of Harwood, B.

Rochdale, V.

Elton, L.

St. Aldwyn, E.

Faithfull, B.

Salisbury, M.

Fisher, L.

Saltoun, Ly.

Fortescue, E.

Sandford, L.

Fraser of Kilmorack, L.

Savile, L.

Gisborough, L.

Skelmersdale, L.

Greenway, L.

Strathclyde, L.

Grimston of Westbury, L.

Strathcona and Mount Royal, L.

Hives, L.

Holderness, L.

Strathspey, L.

Hornsby-Smith, B.

Swinfen, L.

Inglewood, L.

Swinton, E. [Teller.]

Kilmany, L.

Teviot, L.

Kinloss, Ly.

Tranmire, L.

Kitchener, E.

Trumpington, B.

Lane-Fox, B.

Tweedsmuir, L.

Long, V.

Vaizey, L.

Loudoun, C.

Vaux of Harrowden, L.

Lucas of Chilworth, L.

Waldegrave, E.

Lyell, L.

Windlesham, L.

Mackay of Clashfern, L.

Wise, L.

MacLehose of Beoch, L.

Wrenbury, L.

Mansfield, E.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.3 p.m.
Lord Walston Lord Walston moved Amendment No. 61:
After Clause 7, insert the following new clause:
("National Land Trust.
.—

(1) The Minister may by order establish a National Land Trust for the purposes of acquiring land to let to tenant farmers subject to the conditions prescribed in subsections (2) to (5) below.

(2) The Trust shall not be empowered to cultivate land in its control for more than twelve months after acquisition or the termination of a previous tenancy.

(3) Subject to subsection (2) above the Trust shall let all land within its control to tenant farmers from time to time.

(4) The Trust shall not be empowered to sell any land within its control other than small parcels for which planning permission has been received: and the funds thus generated shall be used for the purchase of further land or for the improvement of existing holdings.

(5) The Trust shall be empowered to borrow funds from the Exchequer and from commercial sources at the best rates available.

(6) The power to make orders under subsection (1) above shall be exercisable by statutory instrument; and any instrument containing such an order shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

The noble Lord said: If I were going to deliver a sermon to your Lordships I would take as my text two statements by the noble Lord, Lord Belstead; the first, in introduction of this Bill, that its object is to promote the number of farms for tenants and to encourage the tenant farming system, and the second, one in which he spoke very wise words very recently to this Committee, when he said that the success of farming depends upon our land and the way it is looked after. Both of those are sentiments with which I think all of your Lordships will be in complete agreement.
This amendment which is now before the Committee is, in my submission, the most—I might almost say the only—positive step in this Bill which is going to promote those two objectives. At worst, if the amendment is, as I hope it will he, accepted by the Government, it will ensure that there is no further diminution in the number of tenanted farms. At best it would over the long term create an ever-increasing number of tenanted farms. If it, or something very similar to it, is not adopted the inevitable result can only be still further erosion of the percentage of farms which come on to the market for tenants and an increasing number of owner-occupied farms. That is something which is inevitable and which must be faced by the Committee, by the House and by the country.
The proposals which are set out very clearly here are to create a land trust, a national land trust, which would in very many respects be analogous to the National Trust, for which we all have such a very high regard. Its object would be to protect a part of our national heritage which is at present subject to very grave threats. It would, incidentally, fulfil the objectives of the movers of the last amendment, to protect the county council smallholdings, even in those cases where the county councils themselves decided it was in the interests of their own counties, their own authorities, to sell off that land. That, I am sure all your Lordships—the noble Viscount, Lord Ridley, and others—would agree, is a far better way of dealing with this matter of ensuring that the county council smallholdings are retained in their present form, as the bottom rung of the farming ladder
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available to tenants, new entrants into the industry, hut in no way interfering with the freedom of the county councils to dispose of their land if they so wish.
There are objections, of course, to these proposals. Several objections have been and will be raised. One objection, which I would describe as an emotive objection, not one based on serious objective study, is that this is nationalisation by the back door. Are those who use that argument objecting to the National Trust because it is nationalisation of our historic homes and beautiful houses by the back door? Is their hatred of nationalisation such that they would rather see those great houses and beautiful houses become derelict empty shells because they dislike the whole concept of nationalisation? No, of course, they do not feel that strongly; they want to see them preserved. Also, if it is looked at objectively, I believe those same people would want to see our form of agricultural holdings, our form of tenant farms that we used to have, and are having to a diminished extent, at least preserved in their present form, and if possible increased. So I would suggest that nationalisation by the back door is not an argument which any serious student of this matter can possibly sustain.
The next objection is, "Ah, but this would lead to a great deal of bureaucratic administration". It could lead to bureaucratic administration, but it need not do so. For many years I had the privilege of being a commissioner of Crown Estates, one of the largest landowners in this country, and I defy anybody—tenants, observers, people involved with it, people on the outside—to say that the Crown Estates are administered in a bureaucratic manner.
The correct way to administer large estates, whether privately owned or owned by institutions, colleges, the Church, the state or the Crown, is to employ specialists. The large body of well qualified estate agents are well equipped to do all the detailed day-to-day work. But in addition, superimposed above them, we need the equivalent of the old-fashioned private landlord. There should be, on a regional basis, a body of people—commissioners, or call them what you will—who are well known to the farmers who are their tenants and who are available on the telephone if there should be any problems or complaints which the tenant does not wish to take to the estate agent or where he thinks he is getting a raw deal. These commissioners would by appointed on an honorary basis, and they would be paid very little. But their job would be to visit, at least once a year, every farm in their region. There is no reason why that should be a bureaucratic organisation.
The third objection, which I freely admit is by far and away the most serious, is that of finance. Where would the money come from in order to finance the purchase? We must remember that the purchase is always freely negotiated; there is no question of compulsory powers. Where will the money come from to make this possible? In the first stages a small amount would have to come from the Treasury. Is that such an appalling idea? Is it such a poor investment? If agricultural land is a poor investment, why do our institutions pay such high prices for it? Why are they so anxious to buy agricultural land? They believe it to be a very sound, long-term investment—and we are talking about the long-term here, not about taking

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over in 1983 and getting out in 1985 because something else becomes rather more attractive.
This is a long-term, permanent investment. Surely the billions of pounds which are coming in and which will be coming in to the Exchequer from capital assets —not just from North Sea oil but from the sale of British Telecom and all the other proposals for privatisation—can be used. Surely it cannot be considered a poor investment. We should put a small proportion of that money into our national heritage and our own land in this country.
I ask your Lordships to cast your minds back to what would have happened had we been doing this 20 years ago, in the early 1960s. Land was bought then for £300 an acre and gave a return of perhaps £10 or £15 an acre at the most. If that land had been owned by the state it would now be worth £1,500 an acre or more, and the rent from it, instead of being £10 an acre, would be £50 an acre or more. That is not such a bad investment. There is no reason to think that it will be very different in the years ahead.
In addition to the Treasury, which I look on primarily as a pump-primer in this enterprise, I believe there would be a very large number of small investors who would like to buy land stocks. After all, again reverting to the insurance companies and the institutions, if they are prepared to do it on behalf of their policy holders and investors it cannot be all that bad an investment for the investor himself if it can be bought in small units of f1,000, £5,000 or £10,000. I believe that money would be forthcoming from those sources once this scheme got under way.
This amendment would not only make a real contribution to the declared objective of the Bill to make more land available for tenants but would also make a very substantial contribution to the environment. One cannot expect the growing proportion of institutional investors to look at land in the same way as did our forbears, who were the creators of the environment that we so love. They considered it to be a permanent asset which they could pass on to their heirs in perpetuity. The policy of the institutions and the insurance companies is that they must look after the shorter term interests of their investors and their policy holders. A National Land Trust would not have that responsibility. It would have the responsibility of maintaining and enhancing the environment. That would fulfil the role that our great improving landlords did in the 18th and 19th centuries.
For example, I quote what is very much in the papers today—Calke Abbey. If we had a National Land Trust there would be no problem. The land around that magnificent house, with its great history and possessions, could be bought by the National Land Trust, the whole estate could be preserved as an entity, and the country would benefit. Financially, the investment would be sound. Many examples of that kind will no doubt come to your Lordships' minds.
Therefore, on all those grounds I ask most earnestly that your Lordships put out of your minds prejudices about land nationalisation, bureaucracy and all the cant phrases which people who have an instinctive opposition, but who do not want to bother themselves to think seriously about these matters, can trot out. Look at this matter objectively and accept that the
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amendment will promote the objectives of the Bill and promote the long-term interests of the countryside. I beg to move.
Lord Prys-Davies: Almost all speakers in these debates, which have extended over many days, agree enthusiastically that it is in the long-term interests of the industry and of the country that there should be a substantial let sector. We have been reminded that the Northfield Committee recommended that it should amount to 15 per cent. or 20 per cent. of the total agricultural area. What has also become clear is that the agricultural case for preserving the let sector merges into the social argument.
However, all this is very difficult to reconcile with the shrinkage of the let sector. We on this side of the Committee consider that it would be naive to believe that the Bill will arrest the decline of the rented sector. We may well be coming up against an obstacle or a defect in the system which has served us well for decades. The obstacle or the defect is that landlords will not let land because they consider it to be against their commercial interests to do so. There is no active market in farms to let. We believe that as the scarcity of let land becomes more pronounced there will be growing support for the kind of proposal contained in the amendment tabled by the noble Lord, Lord Walston, and which is supported to some degree in an important paragraph in the Northfield Report.
On the Second Reading, the noble Earl, Lord Radnor, described the proposal as back-door nationalisation. The noble Lord, Lord Walston, has dealt with that criticism. The noble Earl also made the significant forecast that this solution might produce more tenancies. The whole object of the exercise is to produce more tenancies. The land trust envisaged in the amendment would be a means of selective intervention. Time may well show that only by such means can we preserve a significant let sector. We consider that the amendment is relevant to the problem, and support it in principle.
7.21 p.m.
Lord Northfield: In this country, there has been a long tradition of public and semi-public ownership of land. That is the very first point I want to register with the Committee. Ownership by the Government, Government departments, local authorities and so on, is already 6½ per cent. of the land area of this country. That is a substantial slice of the let sector. In the past, the Church, the Crown, the Oxbridge colleges and other such institutions have performed a valuable function in maintaining the let sector. They have been perhaps almost as important as private landlords in maintaining the tradition of good estate management and the principle of the intimate management of estates.
By a majority, my committee recommended that something along the lines proposed in the amendment of the noble Lord, Lord Walston, should be considered by the Government. That was after many months of trying to find a better way to bolster and retain the let sector. I speak with thoughts about the many months that we spent in consideration. I would guess that the Conservatives on that committee were finally aware, as my noble friend Lord Prys-Davies has said, that

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there is practically no other way to make a real job of trying to keep a significant let sector in this country. That is why on the committee they voted in a majority to try this experiment.
I think that the noble Lord, Lord Walston, was wrong in linking the proposal to the National Trust. I think that the right link is with the Crown Estates Commission. It now manages 250,000 acres of land. It does that to the satisfaction of everyone—the tenants, the State, the Treasury and everyone else. The land is handed over by the Crown and the money goes to the national Treasury, although theoretically it is earmarked for the Civil List—but that has now increasingly become a fiction. This area is now a publicly-owned sector of farms.
The way to proceed with this idea is to give the Crown Estates Commissioners powers to augment their holdings and to hold more land. Perhaps they do not even need the powers. The answer is just to give them the land. We should set about the job of expanding their role steadily and quietly. That should be done in their system of management and with a particular objective in mind.
The Crown Estates Commissioners appoint receivers. They do a very economical job in land management. As the noble Lord, Lord Walston, said, they try to keep very close to the tenants in the traditional way that good landlords do. I am sure that they could continue to do that with a higher acreage than 250,000 acres. In my view, the objective would be to try to provide the missing rung on the ladder. That is the area where we need more tenancies.
On the last amendment the noble Lord, Lord Belstead, said that the problem with farm holdings is that people are stuck in them. There is nothing to move to, there is such a shortage of farms of the intermediate size. The right way to expand the activities of the Crown Estates Commissioners is for the Treasury to get hold of land—I shall say how—from time to time as it becomes available to place in the holding of the Crown Estates Commissioners where the land is suitable and is inside the 200-acre size. I shall come to the funding of this in a moment. That is the missing size which we need in order to keep a realistic and real ladder in existence in agriculture.
I know that the problem is the money. Land today gives a return of 2 per cent. to 3 per cent. Money has to be borrowed at 10 per cent. or more. I see the point, and the noble Lord, Lord Walston, dealt with it effectively. This is an investment for the future. I do not expect any Chancellor of the Exchequer to start finding large amounts of money for this purpose. When capital transfer tax comes along on particular estates, and there is a danger that that estate will be fragmented—sold to the tenants and become owner-occupied—at least there should be the possibility of the Chancellor accepting that estate, particularly if it is suitable and in the 200-acre farm size, in part or complete payment of death duties, or capital transfer tax as it is now called.
There should be the kind of discretion that we have linked with the heritage fund, and so on, and which was the original intention of the National Land Fund.
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I am sure that we should resurrect this and use as a ready mechanism the Crown Estates Commissioners. There is a good deal of evidence from abroad that such schemes are successful. I do not know why we should stand out alone on this matter. Such a scheme has parallels in other European countries, in New Zealand and even in Canada. No one in such countries is getting worked up about the issue of land nationalisation.
I wish to say a final word about land nationalisation. No doubt the main argument that the Minister will refer to will be nationalisation by the back door. For what it is worth, my view is that the idea of nationalisation of agricultural land is a dead duck. No Government, even a Left-wing Government, are likely to go in for the wholesale nationalisation of agricultural land. For a start, nearly 65 per cent.—or perhaps now 70 per cent.—of land is owner-occupied. I cannot see any sense in going through the trauma of extracting land from owner-occupiers. Secondly, of the remaining 30 per cent., or 35 per cent. as it may now be, a large proportion is in perfectly "good" hands—I put "good" in inverted commas. It is in the hands of colleges, the Church, the Government, financial institutions, and so on. There is no particular benefit in nationalising that land. With the other 15 per cent., 20 per cent. or 25 per cent. in the hands of private landlords, I honestly cannot see any Chancellor raising vast amounts of money in one fell swoop—in one nationalisation Act—at 10 per cent. plus in order to buy an asset returning 2 per cent. or 3 per cent. in annual rents.
The Government should stop running away from the issue, fearing that it is nationalisation by the back door. They should look at the perfectly reputable examples of the land in the hands of the Crown Estates Commissioners and similar schemes abroad. They should realise that nationalisation of agricultural land has become a parrot cry now and very little else. It is not really on the cards. Finally, if a Left-wing Government were really intent on nationalisation, none of this would matter. The fact that there had been any movement in that direction in this small attempt to help put right the agricultural ladder would not make the slightest bit of difference. It will not create a precedent that would encourage anyone else along that road. For all sorts of reasons, I think that the amendment is a very good idea, even if I differ slightly from the noble Lord, Lord Walston, on the precise mechanism.
Lord Mackie of Benshie: I should simply like to support my noble friend. I think that the details of the scheme have been put over in a practical way and I believe that the objections to it have been dealt with. However, I look forward with great interest to hearing what new objections the noble Lord the Minister is to raise.
Lord Belstead: I was encouraged to hear the words of the noble Lord, Lord Northfield, on the subject of land nationalisation, but of course there is a lack of credibility between the wise words of the noble Lord and the policies which are pursued by his party. I hope that he, and indeed his noble friends on the other side of the Chamber who I think consistently give good advice to your Lordships on agricultural matters, will

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forgive me for saying that. I do not say it to make a party point; I say it because there is still genuine apprehension in people's hearts and minds, and if we heard from the noble Lord's party the kind of wise words that he has uttered, the apprehension would be dispelled.
I recognise that the new clause moved by the noble Lord, Lord Walston, is not along those lines; indeed the word "nationalisation" does not appear in the brief for my reply. But the basis of the proposal is that the National Land Trust, which the noble Lord told us about when he made his Second Reading speech, and which he has again told us about in moving the new clause, would, so far as one can see, initially be funded by Government; and there is a difficulty about where the money is to come from.
So far as the initial outlay is concerned, the noble Lord suggested that it should be borrowed from the Exchequer or from commercial sources. But if the money were to be borrowed from commercial sources, the proposition need only be taken to the finance houses at this very moment. No doubt they would consider it as they would any other commercial proposition, and it would not need any legislation at all. After all, that is what financial institutions operating in the agricultural land sector already do; and the noble Lord knows that very much better than I do.
However, as the noble Lord made clear in moving the amendment, it would be expected at any rate a very large proportion of the funds would come from the Exchequer. The noble Lord will correct me if I am wrong, but my understanding has always been that institutions tend to buy tenanted land if they possibly can, rather than land with vacant possession. They also enter into sale and lease-back arrangements. Therefore, they are able to buy land relatively cheaply, but in doing that they do not really increase the total stock of tenanted land. Therefore, this so far sounds like an argument in favour of a national land fund, which would increase the stock of tenanted land.
But surely here comes the problem. If the National Land Trust which is proposed by the noble Lord was to buy vacant possession land and then let it, the economics of the transaction would be very different. Land would be bought at a premium and its value would be reduced immediately it was let. In addition to that, the sums involved would not be small when it came to purchasing and establishment and equipment costs, as well as staff salaries, and possibly even the need to run the trust on a regional basis. But above all, the cost of the land, which would of course attract the vacant possession premium, would be a major item of expenditure which would have to be met.
So while I recognise and applaud the noble Lord's aim to make available more tenancies, which I at once concede is entirely in the spirit of this legislation, I believe that the problems attendant upon his proposal would be very formidable indeed, and for the reasons that I have given I think that we must continue to look to the private sector.
7.35 p.m.
Lord John-Mackie: Knowing the Government's attitude to these questions, I thought that the noble
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Lord's reply was predictable. But surely by this time the noble Lord must be seized of the point that has been made. It is that unless at the Report stage the noble Lord is to produce a proposal regarding Clause 1, there is nothing in the Bill that indicates that it will do anything at all to increase farm tenancies. Practically every noble Lord who has spoken has said that and the point has been made in all the lobbying that we have experienced.
I agree with the noble Lord, Lord Walston, that the new clause would at least result in more land becoming available for the tenanted section. On these Benches we are grateful to the noble Lord, Lord Walston, for putting down the amendment, and I hope that it was the remarks that I made on the subject at Second Reading which tempted him to do so. Had we put down an amendment of this kind, as we wished to do, we would straight away have been accused of back door nationalisation. So I am very glad that the proposal has come from the Benches on which the noble Lord, Lord Walston, sits. The noble Lord has argued very well, as has my noble friend Lord Northfield, that this is not back door nationalisation, but is a matter which should be considered very carefully. As I have previously said, and as I wish again to emphasise, it would seem to be the only actual provision in the Bill which would make more land available for the tenanted section.
As I have said, the reply of the noble Lord, Lord Belstead, to the effect that the cost would be too high was predictable. The noble Lord, Lord Howard of Henderskclfe, perhaps twitted me—I was going to say fell out with me—for saying that at present all the land that is changing hands is bought by institutions. It was his experience that farmers were grabbing the land—I think that that was the expression he used—straight away as it came on the market. I am speaking of vacant land, and if farmers can pay the kind of prices that are at present being bandied about, I cannot see how the prices can be regarded as realistic for the purposes of farming. We must also bear in mind the rents that are being offered.
As the noble Lord, Lord Walston. said, a trust could be set up, with people putting money in it, and with some support from the Treasury. I feel that the reply by the Minister did not really demolish the arguments of the noble Lord, Lord Walston, on how to finance such a trust, nor the arguments of my noble friend Lord Northfield.
As the noble Lord, Lord Walston, will be aware, many years ago he and I wrote a discussion pamphlet on land nationalisation, and I then put forward exactly the system which he has suggested for the administration of publicly-owned land. I stand by that today. If it were done in the way in which the noble Lord has indicated in the debate, such a system could be perfectly easily administered without any great bureaucracy at all.
There is only one point that worries me. I hope that we would have quite a lot of private money in the trust and not too much from the Treasury. I say that because since I wrote the pamphlet it has been my experience that if one allows the dead hand of the Treasury to interfere, the administration becomes bureaucratic. I see the Chief Whip on the other side of

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the Chamber scowling at me. I know the time,and he told me— —
Lord Denham: I was not scowling at the noble Lord; I was listening to him with amazement.
Lord John-Mackie: That prompts me to remind the Committee of the time when the then Mr. Snowden, on being accused in the other place of laughing, said, "I wasn't laughing; I was sneering". I think that the noble Lord was listening to me with rapt attention in order to try to find out when I was going to stop.
I close by saying that we support Lord Walston very much indeed. If he cares to put his amendment to the vote, we shall give him all the support that we can.
Lord Walston: I am grateful to the noble Lord, Lord John-Mackie, for his final words and for what he said earlier. However, what he did not mention is that when our discussion pamphlet was written he was in favour of land nationalisation and I was against it. I think that the noble Lord has since somewhat modified his views. I have not, in this case, modified my views.
So far as I can make out from what was stated by the noble Lord, Lord Belstead, who is always a very persuasive arguer in these matters, he has not made the best case that I think he almost might have been able to make, in spite of the paucity of the material at his command. The noble Lord had very little on which to base his arguments. He had only two points to make so far as I understood them. The first was that this was going to cost too much and that no money was available for it. If he tells me that the Government are so concerned with short-term objectives that they are prepared to cash in on national assets of enormous value and not to reinvest, particularly in a project that inevitably and undoubtedly will appreciate enormously in value over the years ahead, and that they are simply concerned with money supply and what will happen in the next two or three years, he is putting the Government in an even worse light than I thought.
However, that appears to be his argument: We have no money. We are selling a great many of our national assets, and privatising them, and we are not prepared to invest in this particularly very sound investment. "What is more", say the Government, "we are not interested. Inevitably, it follows that, in the preservation of the countryside, we pay a lot of lip-service to the protection of the environment, but we as a Government are not prepared to do one of the things that lie easily within our power to do". So how can you expect other people to do it? That follows from his argument.
Secondly, the noble Lord says the institutions will do it well. They buy tenanted land and they let it. Yes, they do. But what they also do is to wait until that land becomes vacant and then sell it at the enhanced vacant possession price.
Lord Northfield: Not true.
Lord Walston: It is true. Many do it, and I can give the noble Lord examples. Private investors do the
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same. That is why the erosion of tenanted land increases. I do not think that the noble Lord the Chief Whip is now looking at me with rapt attention. He is looking at me because he fears that his dinner is getting cold.
Lord Denham: If the noble Lord is going to be very much longer, I wonder if it would be for the convenience of the House that we should adjourn during his speech and return to hear the final part afterwards.
Lord Walston: I think that the noble Lord would be right if I were going to be much longer. I was simply demolishing to the best of my ability, and as briefly as possible, the very poor arguments put forward by the noble Lord, Lord Belstead. I hope, but without much confidence, that the noble Lord will think again about this. I can, however, assure him that in spite of the offered support of the noble Lord, Lord John-Mackie, I shall not divide the House at this stage on this issue. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Denham: I think that this is probably the right moment for us to adjourn for dinner. We shall not re-start this particular Bill before 8.45 p.m. but equally, I think it is highly probable that the business that we are taking in between may take marginally longer than an hour. If your Lordships who are interested in this Bill wish to know, we shall not restart the Committee proceedings until 8.45 p.m.
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Appropriation (No. 3) (Northern Ireland) Order 1983
7.45 p.m.
The Minister of State, Northern Ireland Office (The Earl of Mansfield)The Minister of State, Northern Ireland Office (The Earl of Mansfield) rose to move, That the draft order laid before the House on 23rd November be approved.
The noble Earl said: My Lords, this order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. The purpose of the draft order is to authorise the issue of £ 107 million out of the Consolidated Fund of Northern Ireland in respect of the Autumn Supplementary Estimates of Northern Ireland departments and to appropriate this sum for the purposes shown in the schedule. Noble Lords will recall that sums on account were approved on 14th March and that the balance of the 1983-84 Main Estimates was approved by your Lordships' House on 14th July; together, these amounted to £2,622 million. The present draft order will bring the total Estimates provision for the year to £2,729 million. Detailed information about the provision sought can be found in the Autumn Supplementary Estimates volume, copies of which have been placed in the Printed Paper Office.
The draft order before us covers only seven out of the 42 votes of Northern Ireland departments.

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However, major provision is sought in respect of the housing benefits scheme which is already in operation in Great Britain. This is not all new money since assistance with housing costs was formerly provided through supplementary benefits and rent and rates rebates. There are, however, significant additions to existing services, notably the special aid for agriculture announced earlier in the year, and assistance for Harland and Wolff Ltd. for which only a token amount had been provided in the Main Estimates.
Noble Lords will know that we are endeavouring to keep Northern Ireland in the most favourable position to benefit along with the rest of the United Kingdom from the increase in world economic activity which is expected during the remainder of 1983 and 1984. When the United Kingdom experiences economic revival, there are spin-off results in Northern Ireland. Some reports indicate that Northern Ireland manufacturing industry is now holding up in employment terms and, generally, output and other trends are reported to have improved. We are still doing as much as possible to encourage investment in Northern Ireland and to reinforce the effects of the economic swing. The new economic initiative announced earlier this year should help greatly in our efforts.
In the social field, with the introduction of housing benefits, we are maintaining the common system of social benefits which applies throughout the United Kingdom. The special aid for agriculture, the assistance to Harland and Wolff and other provisions for industrial support are evidence of our willingness to take account of the special needs and circumstances of Northern Ireland even at a time when public expenditure as a whole is under constraint. Taken together, they demonstrate yet again the Government's continuing commitment to Northern Ireland.
When I introduced the order for the Main Estimates on 7th July I reminded your Lordships of the extent of the additional special aid to the Northern Ireland agricultural industry which would be made available in the 1983-84 financial year. I also made it clear that the necessary provision for these special measures would be taken in Supplementary Estimates. The additional provision required is now sought in these Supplementary Estimates for Class I, Votes 1 and 2.
An additional £0.8 million is sought for continued measures to develop beef cattle production. This includes some £500,000 towards subsidies for the liming of grassland and £300,000 for the beef development programme. The main significance of this latter aid has been to allow the charge for artificial insemination to be held much below its full recovery level. I am pleased to say that this had the desirable result of buoyant demand for the service with consequential quality improvements in breeding cattle. £5·5 million is included to provide for the continuation of the milk consumer subsidy which enables a higher wholesale price to be fixed for milk going for liquid consumption, thereby ensuring that consumers in Northern Ireland do not have to pay more than consumers in Great Britain.
A total of nearly £2·4 million is sought for assistance to the intensive livestock sector. Two million pounds of this aid is to cover payments, linked to the level of employment, to operators of licensed pig and
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poultrymeat processing plants and egg packing stations, while continuation of the subsidy on transport costs of egg shipments to Great Britain accounts for some £0.4 million.
A further £2.5 million is required to continue grants for the improvement of pasture under the Grassland Scheme, introduced last year to increase productivity in areas outside the less favoured areas.
The total additional provision sought is partly offset by a decrease in expected compensation payments on the brucellosis and tuberculosis eradication schemes resulting directly from the present favourable animal diseases position. I think it worth reminding your Lordships of the importance that is attached to the "disease free" status of livestock in Northern Ireland. This provides a very important underpinning of the Province's ability to market its produce and requires a considerable input and continuing close vigilance by all concerned with the industry. Their success, in my submission, should not go unnoticed.
A lot of anxiety has been raised in the agricultural industry as a result of the first proposals for changes to the Common Agricultural Policy put forward by the Commission as a result of the Stuttgart summit. It is clear that we must get a satisfactory solution to the problem of the United Kingdom budget contribution to the European Community, and this requires positive steps being taken to deal with structural surpluses in agriculture, as these have been the cause of so much heavy expenditure by the Community.
Some of the Commission ideas have not been finally formulated and, in any case, it is likely that many of their proposals will be amended considerably during the negotiations. It is not possible at this stage to speculate on what changes might be made, but noble Lords will be aware of the statement made in another place on 7th December by my right honourable friend the Prime Minister on the progress of the negotiations. I can assure your Lordships that the Government will be careful to ensure that the agricultural industry in the United Kingdom in general, and in Northern Ireland in particular, is not unfairly disadvantaged compared with other member states. I shall be examining all developments to assess their impact and ensure that any special difficulties for Northern Ireland are taken into account.
I should like to turn now to the industrial support measures covered by Class II, Vote 3, in the Autumn Supplementary Estimates. Under Sub-head B2, there is a provision of £42.2 million for assistance to the Harland and Wolff Shipyard in Belfast, which at present employs some 5,300 workers. This sum is further evidence of the Government's recognition of the company's importance to the Northern Ireland economy, but noble Lords will note that the provision of £42.2 million is some £5 million less than the total level of support required in 1982–83, and, as such, is a welcome improvement.
An increase of some £3.5 million at Sub-head D1 is sought to top up the existing provision of £37.2 million for standard capital grants to industry in Northern Ireland. In particular, a higher than anticipated level of demand has contributed to the requirement for this increase and to the extent that this will improve competitiveness and sustain existing jobs it is

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something in which we should find some encouragement.
The department is also seeking an increase of £2.7 million in the budget of the Local Enterprise Development Unit, of which £0.3 million relates to administrative costs, and £2.4 million to grants and loans paid out to industry.
The reasons for these increased provisions lie quite simply in the dramatic increase which the last two years have seen in the level of Local Enterprise Development Unit's job promotion activities in Northern Ireland's small firm sector. These have resulted in a record job promotion figure of 2,550 in 1982–83.
One of the major new initiatives taken in the Province this year was the recently launched Local Enterprise Programme, which is designed to provide an integrated framework of support to maximise the efforts of local economic development groups undertaking industrial development projects. LEDU will co-ordinate this activity and will work closely with such organisations, providing financial assistance towards their running costs and grant aid on a pound for pound matching basis for the acquisition, refurbishment and sub-division of factory accommodation to encourage small business start-ups at local level.
I move on now to the votes of the Department of the Environment for which supplementary provision is being taken. An additional £3.8 million is required to finance increased expenditure for Class VI, Vote 3, which covers the Consolidated Fund contributions payable to local revenues. The additional grant is needed for two reasons. First, about £1.5 million is necessary to meet the cost of increasing derating for industrial premises from 75 per cent. to 100 per cent., which was introduced from 1st April 1983 as part of the package of aids and incentives to industry which was announced by my right honourable friend the Secretary of State for Northern Ireland in another place earlier this year.
Secondly, £2.3 million is required to meet special circumstances arising this year in relation to the resources element of the general grant. The resources element is calculated by means of a statutory formula, and population levels are a key element in the calculation.
I turn now to Class VI, Vote 4—which covers expenditure on rating, records, registrations, surveys and administration matters. An increase of £14 million is sought mainly to cover expenditure on computerisation of rate collection and additional expenditure on general administration.
Provision is being sought to meet increased expenditure in the Social Security field in Class, X Vote 2, Non-Contributory Benefits, and in Class, X Vote 4, Administration and Miscellaneous Services.
In the field of non-contributory benefits, the increased provision sought is £41 million. Of this, £30.3 million, as I have already explained, is attributable to the introduction of the Housing Benefits Scheme in Northern Ireland from 21st November 1983. Prior to the introduction of the scheme, assistance with housing costs was provided
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mainly through supplementary benefits and through rent and rates rebates or rent allowances provided by the Northern Ireland Housing Executive or Department of the Environment. Some £1.6 million is owing to a rise in the number receiving attendance allowance, and the remaining £9 million falls in the supplementary benefits area and is required mainly because of an increase in the numbers of beneficiaries.
Increased provision sought for administration is £1.8 million and reflects mainly what is required to meet initial and ongoing costs incurred by the Northern Ireland Housing Executive in the administration of housing benefits. With this technical, but I hope reasonably brief, explanation, I commend the draft order to the House.
Moved, That the draft order laid before the House on 23rd November be approved.—(The Earl of Mansfield.)
7.58 p.m.
Lord Underhill: I should like to thank the Minister for his excellent review of this order and for getting through so much information in such a short time. I must stress that, although on this side of the House we readily agreed to discuss these three orders during the interval in the previous Bill, we shall insist that the three orders be fully discussed, in fairness not only to the people of Northern Ireland, but to those of us in this House who have responsibility for various matters. Although the debate is limited to a very few points in this particular order, there are a number of issues on which I should like to raise points and questions to the Minister.
I must say again how useful I find the supplementary booklet, which gives far more detail of the various votes in this particular supplementary estimate. I will deal with two points only arising under Class I in agriculture.
Once again, we welcome the provision of a little over £5 million for the continuation of the milk subsidy, as the Minister has said, to keep down the price of milk to the level of that elsewhere in Great Britain. In addition to the points which the Minister made regarding the problems confronting us in the Common Market, there is obviously concern at the possible effect of UHT milk which we discussed fully in this House a short time ago, and also possibly of the super milk levy, which could have some effect not only on milk sales but on production. This is a point which I am pleased to note the Minister has made quite clear: that if there are any special difficulties in relation to Northern Ireland he will ensure that these are taken into consideration.
Also welcome is the £2½ million grant for the improvement of grassland productivity outside the less favoured areas. I wonder whether the Minister could elaborate on this and give some details of the scheme. These days there is much reference to schemes of cost benefit.Can he indicate the effect of these grants on imports of feedingstuffs into Northern Ireland?
The noble Earl also dealt with the question of animal health. He will recall that we dealt with this in the July appropriation debate, in which I drew attention to the fact that the provision for brucellosis had halved whereas that for tuberculosis had doubled.

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Naturally, I am pleased to note what the noble Earl said about the improvement in animal health, but I note that, in relation to brucellosis, in all there has been a two-third drop from the £1.2 million provided in the 1982–83 estimates, and that the provision for tuberculosis, which in the July estimates doubled that of the previous year, has now been reduced by 40 per cent. since that July appropriation. I am pleased that the Minister has stressed the vital importance of animal health. I hope that these figures in no way suggest that there is any impairment of preventive measures.
I come now to Class II, and I must again refer to some helpful information in the Northern Ireland Economic Council's report for the year ended 31st August this year. I note that when the report was published on 21st October a press statement was issued which included the following:
"While decline in manufacturing production appears to be bottoming out, there is no sign of the substantial upturn needed to reverse the growing problem of unemployment".
The figure which I have for October is approximately 120,000 unemployed in Northern Ireland—about 21.5 per cent. That figure excludes the figures of those who are on training or employment schemes. I fully appreciate that the economic conditions in Northern Ireland are considerably affected by the basic policies followed for the United Kingdom as a whole; but we recognise the special circumstances of Northern Ireland, and that is one reason why we approved the special financial measures brought before Parliament in March this year.
However, unemployment in Northern Ireland is well above the average for Great Britain, and even higher than in the worst region in Great Britain. Some areas have well over 30 per cent. unemployment, which illustrates the hopelessness and the desperation of some people. On previous occasions we have mentioned Strabane, and we must mention it again. It has a 40 per cent. unemployment rate, with male unemployment over 50 per cent. The conditions of desperation are pretty evident in those figures.
The total number in employment is about 9 per cent. below the figure for 1979, with a little over 100,000 employed in manufacturing industry, which is a quarter below the figure of 1979, with manufacturing output down by 12 per cent. In the construction industry only 26,000 are employed. That is down by about 30 per cent. on the 1979 figure, with construction production down by over 16 per cent. This is of considerable importance because, again, the Economic Council's report states:
"Public expenditure is an important determinant of the level of economic activity in the Province."
I hope that the Government will take note of that, because the latest figure I have, which is for September 1982, is that public sector employment in Northern Ireland, including nationalised industries, accounted for 45 per cent. of the working population—round about 213,000. That is a very important statement by the Economic Council as to the level of public expenditure.
On that point, in the July appropriation debate I referred to the policy statement of the Northern Ireland Committee of the Irish Congress of Trades
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Unions, The Trade Union Alternative. I understand that the Secretary of State met that committee on 28th November. I do not know whether the noble Earl the Minister has any points to make about that meeting with the Northern Ireland Committee.
The Minister has referred to the encouraging development in the Local Enterprise Development Unit. We all welcome the record figures which he mentioned. Can the Minister tell the House whether these are all new jobs, or are any of them jobs which have been transferred from elsewhere in setting up the businesses? Do any jobs relate to exports, and how much of the new production will replace imports?
There are two other matters for which there is no reference under this heading, but I am certain that the Minister will readily deal with them if he can. There is no reference to Enterprise Ulster. In the May appropriation, which we discussed in July, there was provision for £8¼ million, which was a £1.3 million decrease on the figure for the previous year. A decision was taken in March to extend Enterprise Ulster for a further three years. Can the Minister say how this is progressing? I hope that there is no intention of running down this important enterprise.
There is also no reference to the youth training scheme. The provision referred to in the July appropriation debate was for 19 million, when it was expected that 8,200 would enter the programme. Can the Minister say what progress is being made, how many places have been taken up to date, and what is the percentage of young people eligible to participate? Naturally, we welcome the £42 million assistance to Harland and Wolff.
All my points so far have asked for information, but I must make a political point here. It is this kind of subsidy, this kind of help and the number of grants which are made throughout various schemes in Northern Ireland which illustrate quite clearly the need for Government intervention to deal with matters of this kind. I hope that the Government will take the same view when we press other issues elsewhere in the United Kingdom.
I note from the supplementary booklet that under Class II provision is made for two important aspects of energy. First, under C6, there is provision for £200,000 financial help to industry and commerce for energy conservation schemes. Can the Minister say what progress is being made and what are the future prospects? There is also provision under C7 for £219,000 for studies on energy matters. In this connection, can the Minister say when the Kinsale pipeline is expected to commence and when gas supplies to Northern Ireland are likely to commence?
Previously, in connection with the studies, we mentioned the viability of lignite as an alternative fuel and the studies which are taking place. Can the Minister say what is the present position? Is there any firm estimate of the lifespan of such supplies? There have been reports of a possible increase in gas prices in Northern Ireland. I would simply comment: is this a wise move before the scheme for the development of Kinsale gas is completed? At least, the agreement exists but the pipeline is not yet completed.
In conclusion I must move to Class X. I note that the Under-Secretary of State, Mr. Patten, who has

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responsibility for health and social services matters, addressed the Assembly on 8th November and said:
"There are undoubtedly higher levels of morbidity and deprivation in Northern Ireland than exist in most other regions of the United Kingdom."
That, of course, is confirmed by numerous surveys from time to time.
The noble Earl referred to the provision for housing benefits, and the supplementary benefits office told us that the number of persons qualifying for rent rebates, rent allowances and rate rebates is a little over 132,000. We had a full debate on housing benefits, so I shall not go into that again now, and it is too early yet to consider what the results will be, because they did not take effect, as the Minister said, until 23rd November this year.
However, is there yet any firm information on the number of persons who will be worse off, remembering that when we debated housing benefits the Minister said that it is a redistribution between those who are not so badly off to those who are really worse off? In other words, those who are worse off in one way will pay to help the others. Is there any information of the numbers who will be worse off?
Is the manpower adequate to administer this scheme properly in light of the criticisms that there have been for the scheme's administration in Great Britain? Is the information coming in satisfactorily in connection with this from the private accommodation? What steps will he taken to avoid any possible bottleneck that may be caused by the Christmas and New Year period?
My last two points are on the attendance allowances, to which the Minister referred, for which we note that there are 1,500 additional beneficiaries. Is this increase due to additional persons needing help, or is the increase due to the removal of a number of persons from hospital who therefore need more home care? The Minister also referred to the estimate for supplementary pensions allowances, again including the increase of 3,000 persons in the number of beneficiaries under those two schemes. I would suggest that this is a further indication of the growing numbers of persons who are below the poverty line, endorsing what Mr. Patten said to the Assembly, and a problem of which all of us would take keen notice.
8.12 p.m.
Lord Donaldson of Kingsbridge: My Lords, I should like to follow my noble friend, if I may so call him that, in two particular ways. First of all, the noble Earl gave us a clear and succinct account of what this paper stands for, and I found it useful. I knew that my noble friend from the Labour Front Bench would ask all the questions I was going to ask, and I thought that I should be lucky if I had any left. I have one or two, but very few.
I want now to follow on his second point, which I should like to put rather more dramatically. In spite of some rather hopeful things that were read to us by the noble Earl, the position of Northern Ireland is rather desperate. The tragedy for all of us is that there is every reason to suppose that the really vile thing, the security problem which we all hate so much and which seemed
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to be exploding around us tonight in a rather disagreeable way, almost certainly could be enormously eased if we could ease the financial problem and this dreadful problem of unemployment which the noble Lord described so graphically.
I want to follow him also by saying how glad I am that the Government have shown great readiness to interfere in Northern Ireland's business affairs, and that their readiness to do this has been increased by the desperate unemployment position rather than decreased by their doctrinaire adherence to the so widely discredited monetarism from which we suffer in this country. Like my noble friend I hope that some of the interfering attitude which is so obviously essential and unavoidable in Northern Ireland might perhaps seep over to this side, because although we are less interference minded on this Bench than the Labour Party, we are still pretty interference minded.
To look to the bright side, we welcome particularly the various things that have been described. The £42 million to Harland and Wolff is the kind of thing we have been doing now year after year, and I suppose will have to go on doing. It is direct subsidy in order to produce work. As such, we have to do it. There is no alternative. However, I should like to ask the noble Earl a nasty little question. Can he tell me, not tonight I am sure, but by letter, how many Catholics are employed by Harland and Wolff? When I was there I think it was eight, but I may be wrong. The noble Earl gave us the figure of 5,300 workers at Harland and Wolff.
The other thing I am particularly pleased about was mentioned by both the noble Lord and the noble Earl. and that was LEDU—the Local Enterprise Development Unit. I am glad that its achievements are such as they are. From a thousand or two thousand it has increased. I think, to 3,000 and 5,000 jobs found and made. This is entirely satisfactory. It is a body to co-ordinate the local enterprise programme, on which the Government are setting a good deal of store, and is a hopeful development. We look forward to some increase in its staff and in its budget. I think I can take not from what the noble Earl said but from what was said in the other place that that is the Government's intention; and we support that.
I have spoken before about the special needs of Northern Ireland for agriculture, and particularly intensive production. The position of the Northern Ireland farmers is that without intensive production they cannot keep up their employment or anything like it, and the difficulty with intensive production is the great cost of bringing in what we call corn and the Americans call maize.
I welcome particularly the AI subsidies, which of course is the way to improve herds and has been going on solidly, and improving solidly, in Northern Ireland. This is thoroughly good. Secondly, I welcome the growth in the disease free area, to which both the noble Lord and the noble Earl referred. This is extremely important because Northern Ireland has to have fine cattle and has to sell them, and you can only do that if you increase your disease free conditions.
Housing and other things have been spoken to. I shall not go over them again. I have one small point which interests me. I do not regard it as a very serious

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point but I am interested in the policy behind it. I see that the present Supplementary Estimates are allowing £800,000 for the computerisation of the rates—I suppose that means rate collection—and that more will be required later.
As the only point of such computerisation is to save labour I wonder whether it is money well spent. Would it not be better to postpone it to preserve the jobs it will destroy, and give the £800,000 to LEDU? This sounds rather a frivolous comment but it is really quite serious. When we have a position of unemployment such as we have in Northern Ireland we cannot really afford to mechanise any more, and we ought to be careful about it. Having said that, it seems to me that the Government are doing quite a lot to try to deal with a desperate situation, and I wish them every Godspeed.
8.19 p.m.
Lord Fitt: My Lords, the House will know that for 18 years I was a Member of another place. During that period of time it was always a considerable disappointment to me that when Northern Ireland was discussed it was always in an almost empty House. I am saddened again tonight because there are even fewer Members in this House at this time than there were in the House of Commons. The problems of Northern Ireland are so intractable, so difficult, and so serious, that it would be in the interests of all noble Lords in this House, and indeed Members in the House of Commons, to sit, listen, and pay more attention to the awful problems which have beset Northern Ireland for so many years.
I am conscious that when this Conservative Administration was first elected in 1979—and, indeed, I have some regrets because I played some little part in bringing about the defeat of the last Labour Government because of the issues I saw as so serious in relation to the security situation—there were 61,000 people unemployed in Northern Ireland. We have just heard the figures quoted by my noble friend Lord Underhill: the figure has now escalated to 120,000—double. That is not the whole story because there are many people, particularly women, who would not qualify for benefits and therefore they do not register as unemployed. So the figure is about 130,000 or 140,000 unemployed in that small area of the United Kingdom.
This figure did not just escalate on its own. We have often heard of the outside effects of world recession. Much of the increase in this figure was due to the monetarist policies of the Conservative Administration between 1979 and the present. However unpalatable those policies may have been to the more affluent parts of the United Kingdom, they were totally disastrous for Northern Ireland. Northern Ireland is different because it has a smaller industrial base. It has been beset by community troubles throughout the period of its existence, since the creation of the Northern Ireland State. Conditions here and in other parts of the United Kingdom are totally irrelevant when dealing with the problems we have in Northern Ireland. I blame the Conservative
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Administration for the more than doubling of the unemployment figure in Northern Ireland.
When I was defeated in the recent election in June this year, after having represented West Belfast for so many years—it would be conceded that West Belfast is one constituency, I think the constituency, in the whole of the United Kingdom that suffers from terrible poverty and deprivation—I was asked by the Prime Minister and the Leader of the Opposition whether I would accept a place in your Lordships' House. After some thought I accepted. My motive for accepting was that I believed that I would be able to continue to speak on behalf of the constituents of West Belfast and those throughout Northern Ireland, because the present representative of that constituency does not attend another place. Indeed, members of the party which I formerly led do not attend the Assembly at Stormont. All the people of West Belfast, Protestant and Catholic, majority and minority, have no adequate voice in the political structures. The present representative for West Belfast spends his time attending paramilitary funerals and supporting murderers, when it could be better spent in coming to the House of Commons to voice the agonies that are daily suffered by the people of West Belfast.
This little order which covers only seven items, covers two of the major items that affect ordinary people—employment and housing. I can only say that I still believe that more could be done by this Government to alleviate the terrible scourge of unemployment as it exists in Northern Ireland.
In answer to a question in another place last week the Minister replied that social security payments in Northern Ireland amounted to the vast sum of £924,536,085. That is a tremendous sum. A large proportion of that figure is paid out in unemployment benefit and in supplementary benefits. I believe that the Government should take the initiative to spend that money in a better way because there is absolutely no return from that vast expenditure. The Government could initiate programmes which would take people off the street, away from the dole queue and put them into productive employment. The construction industry has already been referred to by my noble friend Lord Underhill. The construction industry in Northern Ireland could usefully be employed in building more houses—a matter to which I shall refer later—in buildings of all descriptions and that would take those tradesmen away from the dole queue.
I, too, should like to add my voice to the congratulations and compliments paid to the Government on the £42 million which has been given to the Belfast shipyard. No one can under estimate the psychological importance of the Belfast shipyard. If the Belfast shipyard were allowed in any circumstances to go under, it would be a big psychological defeat for everyone in Northern Ireland irrespective of the sometimes very contentious questions that are asked, and rightly asked, about the religious complexion of all of the employees over the years. The Government are to be complimented in authorising the building of the four ships. But despite the psychological importance of the shipyard, it employs only 5,500 people. I am old enough to remember when the Belfast shipyard employed 30,000 people and to see the sad

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rundown of that once great shipyard cannot be any joy to any political representative of Northern Ireland.
Mention has also been made of the local enterprise development units. I want to repeat to the Minister something I have said repeatedly in another place over many years. This has been one of the success stories of a succession of Governments, both Labour and Conservative. This little idea was germinated in 1971 or 1972. I know the area officers who are employed in the LEDUs. I know how dedicated and diligent they are in travelling all over the United Kingdom trying to attract people who will invest in small businesses in Northern Ireland.
I hope I do not embarrass the individual concerned, but the area officer for West Belfast is a Mr. John Carmichael. He runs himself off his feet to try to attract any small industry to West Belfast. Even ten, 20 or 30 people employed in small factories in that area, which is so utterly deprived, is welcome.
I have recently been speaking to people in the LEDU organisation over this past number of weeks and months. I do not know—and perhaps later on in another debate the Minister will be able to tell us—what representations the present parliamentary representative makes to the noble Earl, Lord Mansfield. I understand that he does not attend the House but he is still permitted to make representations on behalf of his constituents to junior Ministers. I think that perhaps that position should be queried later, because any elected representative who gives succour and support to people who are carrying out a murderous campaign in Northern Ireland should not be allowed inside Government offices.
I believe that the LEDU organisation is seriously under-financed. I have read the report of the debate in the other place, where the Minister seemed to indicate that they were looking into further financing. I would hope that they will arrive at the conclusion that the success story of LEDU—with its figure of over 16,500 jobs since its inception—particularly in the awful economic climate of last year, 1982, when the organisation was able to create 2,500 jobs in Northern Ireland, represents a remarkable achievement and that every assistance should be given to that organisation.
I have already mentioned that I welcome the fact that Harland and Wolff received £42 million. This is an industrial institution which has been in serious economic difficulty from as far back as I can remember over the years. If the Government think it worth while—and I think it is worth while—to keep that industrial organisation afloat, then it is just as important that more money should be put into LEDU with the intention of creating further jobs.
On housing, I keep in touch with housing development even though I am no longer the parliamentary representative. I am the only representative voice for that constituency because the non-attenders do not go to the Assembly or to another place. I keep in touch with housing. I read and listened to the debate in another place last week. I believe that the Government are far too complacent in relation to the housing situation in Northern Ireland. Certainly, the Northern Ireland Housing Executive has done tremendous work in grappling with the terrible problems of bad housing
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in Northern Ireland. It was accepted that, by European standards, West Belfast and County Fermanagh were two of the worst housing areas in the whole of Europe. West Belfast I no longer represent or live in, but I am in almost daily communication with people who live there. I know that there is still a great deal of distress caused because of the lack of housing in that constituency.
One of my friends in the other place who is now the Opposition spokesman on Northern Ireland last week drew the attention of the House of Commons to a report which had been promulgated by the Northern Ireland Housing Executive. The Northern Ireland Housing Executive is not a revolutionary body; it is not an organisation that has all sorts of Trotskyites or trouble-makers in it. It is a rather conservative organisation. On looking into the whole question of housing needs in Northern Ireland, they referred to the fact that the number of people on the waiting list for housing in Northern Ireland is about 23,500 and that there has been a decrease.
The Northern Ireland Housing Executive, in their own report, state in relation to the decrease in the numbers on the waiting list:
"There may be a greater willingness, in very adverse economic circumstances, to tolerate the discomforts of sharing and overcrowding; and there may well be an increasing willingness to endure the low space standards and poorer amenities of older housing rather than face sharply increased rents".
This is their own conclusion. Then they go on to say:
"It does not seem improbable that there is a direct causal connection between the sharp decline in waiting lists for public sector houses and the even sharper increase in public sector rents which has taken place over the same period".
They then come to their conclusion, wherein they say:
"It has been said, and not without evidence to support it, that only those in well-paid jobs, or those on full social security benefits, can now afford the rent of a new Housing Executive dwelling".
This is a report which was commissioned by the Northern Ireland Housing Executive. What it says is that the rents of Housing Executive houses are so high that people do not want to take the tenancy of them. They are prepared to live in inferior, overcrowded conditions; they are prepared to live with their in-laws, because they know that they could not afford the rent of a Housing Executive dwelling if one were to be allocated to them. I think that that is a position that will have to be seriously looked at by the Government in Northern Ireland.
I listened to the debate which took place in another place and it seemed to me that the Government were clapping themselves on the back because of the undoubted success of the Housing Executive situation since its formation in 1970. I would tell the Government that in Northern Ireland there is still a crying need for houses at rents which people can afford. Otherwise, there will be an aggravation of the problem: there will be people living in inferior housing conditions, out of a job—and we have just quoted the unemployment figures—and that can only lead to social discontent.
I would say once again to the noble Earl (and perhaps it has been drawn to his attention) that the right honourable gentleman who represents Down, South, in an interjection last week, said—and it was in reply to the Leader of the Opposition and the Northern Ireland spokesman in another place:

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"The right honourable and learned Gentleman will be interested to know from those who represent constituencies in Northern Ireland that there is absolutely no discernible class or wealth distinction characterising those who purchase their own homes".—[Official Report, Commons, 8/12/83; col. 499.]
I do not know to what constituency he refers, but I do know that he represents Down, South. I represented West Belfast for many years; and there is a great difference in the class structure between the character of the people who own their own homes and those who live in public authority houses.
If I had known that I was going to take part in this debate this evening I should have liked to ask the Minister beforehand whether he could tell me how many people in Ballymurphy, in Turf Lodge, in Divis Flats, in New Barnsley, in the Springfield Road—indeed, on the Shankhill Road—own their own houses. They are, indeed, very very few; whereas in other, more affluent parts of Northern Ireland, where a different class of people live, they certainly own their own houses. I would urge the noble Earl not to take as gospel anything which was said by the right honourable gentleman in another place when he said that there are no class divisions. Indeed, there are quite serious class divisions in relation to home ownership in Northern Ireland.
The other matter which I know has been drawn to the noble Earl's attention is the question of housing benefit. There is such a complicated way of claiming these particular benefits, and many of the people who are entitled to them are people who, to say the least, are not of a very high educational standard. That is certainly no criticism of them, but everyone knows that, when aged persons are faced with forms and the language contained in those forms, they sometimes prefer not to make a claim for benefit rather than go through what they see as the embarrassment of asking a person to fill in a particular form for them.
Again, the figure of £1,500 has been mentioned as an increase in relation to those qualifying for attendance allowance. I have always believed, and I have said it over many, many years, that the criteria for the receipt of attendance allowance in Northern Ireland, and indeed in other parts of the United Kingdom, are far, far too strict. Over the years, there have been far more people in Northern Ireland who have claimed attendance allowance and been refused than those who have been successful in their claim.
I know that the attendance allowance, although it is used and spent by the person who is giving the attendance, is in fact given to the person who is incapacitated. I have always said that before people can qualify for attendance allowance they must be very nearly dead; they must not be allowed to move or get out of bed; and they must need attendance for 24 hours a day. The conditions for the receipt of this and for the mobility allowance have been far too strictly laid down. Many people who would benefit from this financial compensation are being denied it because of the stringency of the laws related to the granting of attendance.
There is also the question of home helps. This has been an ongoing problem. Even when the Labour Party was in power, there were always far too few home helps employed as compared with the number of residences where they would be needed. However,
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one cannot but welcome this order, and indeed there is very little that we can do about it.
I should like to say that, when I first became a Member of this House and in fact before actually being introduced, I was walking around the corridors here on August Bank Holiday this year. I met one of my noble friends from this side of the House. He welcomed me to the House in a very friendly way and told me that your Lordships would be very interested to hear what I had to say on Ireland because I have lived there and I know the problems of Northern Ireland. He went on to advise me that if I did not want to lose any friends I should not speak for longer than 12 minutes. I began to have serious doubts as to whether I should tell your Lordships about Northern Ireland by way of instalments on a Monday, Wednesday and Friday.
However, looking around the Benches here tonight—and I understand there are reasons for it because it is a Tuesday evening and there are certain procedures to be followed—I would say to those of your Lordships who are present and also to those of my noble friends and indeed members of the Government who are absent at this moment, that Northern Ireland is a problem. It is not going to go away. You cannot avoid having to deal with it. Mention has been made this evening of a bomb having been found somewhere in London. That is part of the Northern Ireland problem, however obnoxious a connection it may be.
I would, in conclusion, ask the noble Lord to do what he can with the LEDU enterprise and to look again at the severe restrictions which are placed on the community with regard to the attendance allowance and the very, very short supply of home helps. This is only a very small order: one cannot do a great deal about it, but I certainly welcome the order sc far as it goes.
Lord Hylton: My Lords, I should like to say how very much I agee with the noble Lord, Lord Fitt, about all these vast empty Benches, particularly, if I may say so, on the Government side. Perhaps the Government Whips could do something to bring this to the attention of their supporters, and perhaps the Government themselves could do something to help by trying to arrange for us to have Northern Ireland business earlier in the day at more popular hours. Then the noble Lord, Lord Fitt,—perhaps I may call him my noble friend—will, I am sure, have great success in persuading many Members of both Houses to come to the annual (and sometimes more frequent) gatherings of the British-Irish Association. These are very valuable occasions which bring together not only politicians from both sides of the Channel and from Ireland, North and South, but also academics and people involved in the media, in a very free and informal way and with the benefit of Chatham House rules.
I am grateful to the noble Earl for explaining today's order and I think we can draw just a little encouragement from what he said, first, about manufacturing industry and, secondly, about the many new small businesses of all sorts that are being stimulated with the help of LEDU. The fact remains, however, that the

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overall economic situation is still bad and it continues to aggravate the political situation.
I want to raise only three points, and the noble Earl will be relieved, in that I have given him notice of them and, secondly, two of the points of which I have personal eye-witness experience are ones which will not call for extra expenditure during the course of the present financial year. The first point I want to mention concerns the new prisons at Maghaberry. These prisons, one for men and one for women, are very important because they will make possible the closing of the antiquated women's gaol at Armagh and will reduce significantly the overcrowding among men, which I believe is particularly acute in the remand wings of Crumlin Road prison at the moment. The noble Earl, Lord Gowrie, said in reply to a Written Question of last February that new prisons were expected to open late this year or early in 1984. Can the noble Earl the Minister say by how much this programme has fallen back and what steps Her Majesty's Government are taking to regain lost time and to bring these new prisons into use?
My second point is about public access to the whole of the historic walls of the city of Londonderry. These are of great symbolic importance to both the main traditions in Northern Ireland and they attract visitors from the whole world. Two years ago, when I was last in Derry, the circuit of the walls was blocked at the south-west corner by an Army post which obliges visitors to climb down before resuming the circuit. I understand that the Army post is still there, despite numerous requests for its removal. The Army, it seems, still needs an observation point in that area. Will the Government make sure that every effort is made to find an alternative building or structure that would serve the same purpose? If that can be done, an unsightly blockhouse would be removed from a place of great natural beauty, and access for visitors and local people would be much improved. The noble Earl, as a Scotsman, will readily understand the importance of clan gatherings. I hope, therefore, that he will succeed in getting the walls cleared in time for the international gathering of the clan O'Doherty, planned for June 1985 in Derry.
Lagan College, Belfast, is the last matter that I wish to raise. This school has been discussed on several occasions in your Lordships' House. It came into being solely as a result of parents who formed the All Children Together movement. It is a denominationally integrated, mixed sex and all abilities secondary school—a rare example in Northern Ireland of a shared Christian school which teaches and respects both the Protestant and the Catholic traditions. The college opened in 1981 and now has 161 pupils, almost exactly half and half, Protestant and Catholic, with a further 90 expected next September. Because it had to start as an independent school, very large sums of money have been given not only from Northern Ireland, but from Britain, Europe and America to meet the capital costs and those running costs not covered by tuition fees.
Lagan College has successfully applied to the South-Eastern Education and Library Board for recognition as a grant-aided school. I understand that the final decision on this matter rests with the Department of
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Education. I am sure that Her Majesty's Government will take into account the amazing success of this school, its long waiting list and the fact that it draws its pupils from no fewer than 60 primary schools in three different board areas.
The noble Lord, Lord Elton, replying for the Government in the recent debate on ethnic and religious minorities in Britain, said at col. 1153 of the Official Report for 7th December:
"Much prejudice arises out of fear, and much fear arises out of ignorance. A great deal of both can be dismantled quite easily in our schools where our children can learn not simply from the staff, but from their fellow pupils who are the best qualified teachers of all".
I am sure that the noble Lord spoke from his experience both as a teacher and as a former Minister responsible for education in Northern Ireland. His words apply just as much in Northern Ireland as they do in Britain. That is why I look forward to a favourable reply, if not today then at the appropriate moment before 1st April 1984.
8.53 p.m.
The Earl of Mansfield: My Lords, I should like to thank the noble Lords who have taken part in this debate. I know that it must be disappointing particularly to the likes of the noble Lord, Lord Fitt, who has not been a Member of your Lordships' House for too long, to see the familiar empty Benches when matters pertaining to Northern Ireland are discussed. I have to tell him that when I was in the Scottish Office there was rather the same effect, unless matters were being discussed which would eventually have a British connotation. But if we keep our debates sharp, and, above all, if we keep our speeches concise, we may by our eloquence attract back into the Chamber some noble Lords who might otherwise be away for the whole of the dinner hour.
I am very grateful to at least two of your Lordships for giving me notice of part, at any rate, of what they intended to raise. I shall either reply as fully as I can or if I cannot, or if the reply would be too full, then I shall write to the noble Lords concerned. I prefer not to do it in that way, but we have already taken over an hour for the first of our three orders and there may be what, in some circles would be called consumer resistance if I attempted to reply at too great a length.
The noble Lord, Lord Underhill, first raised the matter of the grassland improvement scheme, and if I tell the noble Lord, Lord Fitt. as I start on this slightly bucolic note, that the present Member of Parliament for West Belfast does not get in contact with me at all regularly, because I understand that there is not much of interest to do with agriculture, fisheries or forestry in West Belfast, I know he will understand. At any rate, the grassland improvement scheme was based on the well understood concept that the production of grass is the most efficient way of feeding stock, and indeed the production of grass is one of the few things at which Northern Ireland excels, particularly in relation to other agricultural commodities. So the aim of the scheme was to encourage producers to improve their grassland and thereby the quality of stock which would be pastured on it. There has been some spin-off, so far as the reduction of imports is concerned, but what is wanted above all is to reduce farmers' inputs.
Then the noble Lord asked me about animal health

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expenditure. The whole of animal health is of supreme importance in Northern Ireland and I agree with the noble Lord. I certainly give him the assurance which he sought in relation to tuberculosis and brucellosis, but, in fact, additional controls in the form of annual testing and full movement controls on all cattle were introduced in mid-1982 in an attempt to reduce the level of tuberculosis infection. It is the success of these measures which has meant that lower infection has led to less slaughter, and therefore less expenditure on compensation, so there has been what I might describe as a happy result.
The noble Lord raised the question of LEDU, as it is called, and other noble Lords have also commented on this. The first thing that I want to do is to contradict the assertion of the noble Lord, Lord Fitt, that LEDU is under-financed. It is not and neither is any agency in Northern Ireland. I am particularly thinking of the Industrial Development Board, which is a very much newer creation than LEDU, but neither of these is under-financed. The job creation activities of LEDU have not been constrained through lack of cash, they will not be constrained through lack of resources, and I think it is fair to say that if anybody in Northern Ireland has any idea as to the creation or expansion of business which is viable on a reasonably optimistic assumption, then there is no lack of public money to develop that idea.
From its inception in 1971 to December this year, LEDU has promoted over 16,500 jobs and over 2,500 jobs in the last financial year. This is the highest number of jobs in any year since the unit was set up. It is a significant achievement. Of course, the Government are not complacent, but in the circumstances of a difficult economic background I regard this as no mean achievement. The prognosis for the current year is encouraging, and I believe that the number of jobs which will be promoted is likely to exceed the record figures of last year. I think it was the noble Lord, Lord Underhill, who asked whether jobs are new jobs and the answer is that they are. It is a condition of firms receiving financial assistance that jobs are new jobs. I am afraid that I cannot quantify which of those jobs are connected with exports.
The noble Lord went on to speak about the training programme. The programme is obtaining a good response from eligible young people. In November there were more than twice as many 16 yearolds—that is, more than 5,000—on the youth training programme as there were unemployed, who number 1,887. Those 16 year-olds who are unemployed still have an opportunity to accept the Government's offer of a place before the end of the year. The programme also provides a range of opportunities for 17 year-olds. Here we find that there are as many in training as there are who have never held employment. Those young people are gaining experience which will improve their job prospects and let them compete against the 2,410 17 year-olds who are unemployed, who have had employment, and who are between jobs.
The noble Lord asked also about Enterprise Ulster, which is not covered, so far as its funding is concerned, by any of the appropriation orders which we are considering this evening. The terms of Enterprise Ulster have been extended until 31st March 1986 and the new job level is designed to protect the viability of
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the organisation, to permit a realistic element of forward planning, to maintain cost effectiveness, and to enable the Government to give a reasonable forward commitment on the funding. The noble Lord asked me about the meeting of the Secretary of State with the Northern Ireland Committee, and I shall have to write to him about that matter, as I have no information about the outcome of the discussions. I will write to the noble Lord also about housing benefits, because that is convenient in itself; and I shall write to him on the other matters after I have evaluated them.
The noble Lord, Lord Donaldson of Kingsbridge, welcomed the measures on the whole, but he suggested that, instead of computerising expenditure so far as local authorities were concerned, we could save the cash, as it were, and put more money into LEDU. I believe that I have answered his point. There is no shortage of resources in LEDU. The expenditure on computerisation is part of the Government's commitment to improved financial management, and it deserves consideration on its own.
Lord Donaldson of Kingsbridge: My Lords, my point was that there is no value in computerisation unless one destroys jobs—and I do not believe that the Government are in a position to destroy jobs in Northern Ireland.
The Earl of Mansfield: But jobs are not being destroyed, my Lords. I believe that even the noble Lord will agree—and unfortunately this is a matter which is occupying many of us today in Britain—that it is no good keeping people on in overpriced work merely for the sake of keeping them on.
The noble Lord, Lord Fitt, widened the debate very considerably—which, of course, he had every right to do. So far as general economic matters are concerned, I said at the beginning of my remarks—and I meant it—that, when an economic upturn comes (and the signs and portents are already there), then Northern Ireland will share in it. If we were to try to do all the things which noble Lords opposite have continuously urged upon us—in other words, if we tried to spend our way out of the recession—then the cure will be worse than the disease. In fact, Northern Ireland—which, I totally agree with the noble Lord, has an extremely fragile economic base—will suffer more that the rest of the United Kingdom in that eventuality.
I believe that the analysis of the noble Lord, Lord Fitt, is somewhat simplistic, if I may say so. Like many parts of Western Scotland, the industries of Northern Ireland have been declining for years and years and years. It is not the policies of this Government which have been applied since 1979 which have done anything, for instance, to reduce the number of jobs in the shipyards. The other point is, one cannot get away from the situation that, unfortunately, the way in which people live and the way in which they comport themselves in Northern Ireland is not exactly conducive to the creation of new enterprises and the promotion of new jobs. The Government are certainly by no means smug or complacent, as even the bare figures which are part of this debate show. We have tried continuously—and we shall continue to try—to

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make Northern Ireland into an attractive place in which people can live and work.
Finally, so far as this end of the debate is concerned, the noble Lord, Lord Hylton, raised three points. So far as Maghaberry prison is concerned, the main building programme has been completed. Certain modifications—many designed to improve security—are under consideration. The prison should be open by late 1984 or early 1985, and it will greatly ease the prison accommodation problems of Northern Ireland. The prison at Maghaberry will house some 450 male prisoners, and there will be places in the female prison alongside for some 56 women.
The noble Lord spoke also about the walls of the City of Londonderry, which place I am afraid I have not yet had the opportunity of visiting. I know that the noble Lord is concerned about the presence of the Army posts along the walls. We have recently consulted Army Headquarters and they have reported that there are overriding operational reasons for them to maintain their present locations in Londonderry. I am sure that the noble Lord, who has a better knowledge of the area than I, will understand why that is so. As soon as the security situation improves to the point where those measures are no longer necessary, the bases will be moved or abolished, or at any rate relocated. We all look forward to that day. I understand that the security forces are engaged in a constant review of the bases in an effort to improve their appearance and blend them with their local surroundings.
Lord Hylton: My Lords, before the noble Earl leaves that point, I wonder if he has taken on board the importance of 1985?
The Earl of Mansfield: My Lords, I hesitate to enter the lists so far as the Northern Ireland clan are concerned, but I very much hope that the clan will use every sort and kind of influence to see to it that these bases or posts are unnecessary by then, or at any rate perhaps that they will arrange their—I was going to say jollifications—their reunion in such a way that they can get by without being too annoyed by the presence of the posts.
We come to Lagan College. If I may put the matter shortly, the noble Lord will know that there is a two month's statutory period from the date of publication in which objections to proposals can be made to the Department of Education for Northern Ireland, and it is only after the expiration of 25th January 1984 that the department is then able to make the decision. So we are in the period of consultation. This is a statutory matter, and therefore it would be wrong for me to make any comment at this stage, and I do not seek to do so.
I shall look at Hansard with interest tomorrow. The many problems that the noble Lord, Lord Underhill, particularly, raised, I will reply to, if I may, by letter. As is my custom in these Northern Ireland debates, I will send copies of each letter to each noble Lord who has taken part so that everybody knows where everybody is.
On Question, Motion agreed to.

Northern Ireland (Emergency Provisions) Act 1978 (Continuance) (No. 2) Order 1983
9.10 p.m.
The Earl of Mansfield: My Lords, I beg to move that the draft Northern Ireland (Emergency Provisions) Act 1978 (Continuance) (No. 2) Order 1983, which was laid before this House on 24th November, be approved. I invite the House to renew for a further period of six months all the provisions of the Northern Ireland (Emergency Provisions) Act currently in force. I do so at a time when terrorism in the Province is never far from the headlines, and I am sure your Lordships would want me to say something shortly about the current security situation.
Your Lordships will be all too conscious of the recent atrocities, including the murder of three church elders at Darkley in November and of Mr. Edgar Graham, a Member of the Northern Ireland Assembly, only last week. There have, of course, been other brutal murders in the last few days. These killings, inflicted on both sides of the community, have inevitably increased tension in the Province. But I think I should say two things: first, we must not play into the terrorists' hands by taking action or making statements which will escalate the tension and encourage sectarianism: and we must look to the security forces, backed by Government, to deter violence and to bring to justice those who perpetrate it. The Government's security policy is quite clear: we will do everything possible within the law to help bring about the defeat of terrorist violence. Neither the Government nor the security forces can achieve this on their own—it requires the support of the whole community. That is the end to which we are dedicated.
It is, of course, the security forces who are charged with implementing this security policy. They take the action, at an operational level, to meet the threat. And as that threat changes, so does the deployment of the security forces change. The chief constable and the general officer commanding continually review and reassess their deployment and tactics to ensure that they are giving the best possible service to the long-suffering people of the Province. In response to the most recent attacks in the border areas, for example, senior commanders have taken charge of operations in key areas of the border, and the number of men deployed and the number of operations carried out have all been stepped up.
Despite recent tragic events, there have been many successes—attacks have been frustrated, arrests have been made and a large number of convictions obtained. The downward trend of violence continues, and I am sure your Lordships would wish to join me in praising the courage and dedication of the security forces in Northern Ireland.
Although Her Majesty's Government are conscious of the undesirability of retaining extraordinary powers to enable the security forces and the courts to counter the terrorist threat, it is regrettable that we have not yet reached a stage where these powers can be abandoned. The powers and procedures in the Emergency Provisions Act, which the draft order before us tonight would continue in force, are in regular use. That is not to say that there is no room for modification to the

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Act, and your Lordships will be aware that Sir George Baker is currently reviewing the legislation to ensure that the provisions are appropriate and that they strike the right balance between powers which are essential to counter terrorism, on the one hand, and for the maintenance of civil liberties, on the other. A deadline cannot be imposed on such important work, but I believe that Sir George Baker may be in a position to report in two to three months' time. The Government will, of course, consider Sir George's recommendations extremely carefully and I hope there will be time for a full debate on the report in this House.
Against that background, my Lords, I do not wish to propose that there should be any change in the provisions which this draft order will continue in force for a further six months. I beg to move.
Moved, That the draft order laid before the House on 24th November be approved.—(The Earl of Mansfield.)
Lord Underhill: My Lords, for brevity, but not because I do not realise the seriousness of the order we are considering, I can say that I agree with practically everything which the noble Earl said about the seriousness of the position. Apart from the stress and the emotion for all the people in Northern Ireland, the actual figures of the dead and injured, and the suffering since 1969, are horrific.
I refer to only one of the official statistics. I understand that in the past 13 years nearly £8 million has been stolen during armed robberies and that in 1982 this involved the largest amount during that period—no less than £1.4 million. Perhaps the noble Earl can tell us if there is any evidence to show how much of this stealing is carried out by the persons who perpetrate the terrorism and whether the security forces have any hope of combating the situation. I know that robberies are of secondary importance when compared with the injuries and the deaths, but, if my surmise is right, the robberies may be a means of encouraging further injuries and deaths in the future.
I agree completely with the noble Earl on the review being conducted by Sir George Baker and that subsequent legislation should keep a balance between what is required for security and what is required for civil liberties. There is always a great danger that we forget the struggles that everyone went through to get our democratic rights and popular representation. These can easily be pushed aside in the interests of security. I know that it is easy for someone living on the mainland to say these things, but it is for that reason that ever since 1981 we have urged that there should be a review of the emergency provisions Act. That is why we have urged, as the noble Earl the Minister said, that there should be no tit-for-tat reprisals and also why on this side of the House—and I am certain everyone will agree—we regret that recent events have caused the withdrawal of some organisations from the Assembly.
While we have certain concerns on some of the provisions in the present Act, because of Sir George Baker's review there is no point in going through those now. We shall await Sir George's review with interest and I am delighted to hear from the noble Earl that it is hoped there will be a full debate on the report before
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the Government consider the introduction of legislation. That is an important point.
I have only two other matters to raise. There have been reports of excellent co-operation between the police forces of the Republic and Northern Ireland, but the recent reports of disagreement between the Chief Commissioner for the Republic and the Chief Constable of Northern Ireland are obviously disturbing. This must not be allowed to interfere with co-operation between the two forces. Perhaps the Minister is in a position to say what steps are being taken to avoid any such possible development.
Finally, a report appeared in the Belfast press on 1st November of a serious allegation by a member of the Assembly that some employers—it was suggested that it was a substantial number—had sacked persons suffering injury or disablement as victims of the terrorists. These actions by employers have been described by the Secretary of the Northern Ireland Committee of the Irish Congress of Trade Unions as callous, cruel and downright immoral. The Minister may have information on this. If so, will he say what steps will be taken to avoid this situation, which will obviously add to the miseries in Northern Ireland?
With those brief words, we obviously approve the order but hope it will not have to be repeated when we have Sir George Baker's review and further legislation.
Lord Donaldson of Kingsbridge: My Lords, each time this order comes up for renewal I say "Yes" without the slightest hesitation. With things as they are today, nobody in his right mind would hesitate to agree to the order. I make only one comment. It has always seemed to me quite wrong that people who openly advocate terrorism should be allowed to elect their colleagues to Parliament or to the Assembly. I was very pleased to read in the newspapers that the Secretary of State was considering how long this privilege should be allowed to Sinn Fein. I have made my views clear several times. I think that its members should not be allowed to take part in democratic assemblies as long as they openly support violence. The IRA was made illegal for that reason. One of the Protestant terror gangs, the UVF, was also made illegal. Both those moves were right, and I do not think that either of them did any harm. It would be a good thing if the same were done with this organisation. Meanwhile, I am happy to approve the order.
9.21 p.m.
Lord Fitt: My Lords, as always, when this legislation comes up for renewal I have a crisis of conscience. I was born and reared in Northern Ireland. Throughout my life I have lived under emergency legislation. The special powers legislation of 1922 was on the statute book for 50 years until it was abolished by a Conservative Government. It was replaced by the Northern Ireland (Emergency Provisions) Act. On top of that, we have the overlay of the prevention of terrorism legislation.
Being born and reared in Northern Ireland, I know the effects of the special powers legislation. The Act was used exclusively against the minority Catholic population throughout its 50 years of existence. I can recall how the Act was used and abused in the interests of the one-party state of Unionism, as it was then.

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Consequently, I have an inherent dislike and distaste for emergency legislation. The special powers legislation lasted for 50 years. How long will the emergency provisions and the prevention of terrorism legislation last?
The fact that they have lasted so long shows that all is not right with the state of Northern Ireland. If we have to have such draconian legislation, it indicates that something is wrong with the very basis on which the state was createdand now exists. Everyone recognises that the existence of this legislation will not lead to victory over the terrorists. There will not be a military solution. Some Unionist representatives in another place, and indeed throughout Northern Ireland, believe that we can restore Northern Ireland to what it was prior to 1972 by the use of this legislation. Looking at the situation, most people would realise that that is not a possibility.
When I voice my opposition to this legislation I have this crisis of conscience. Will I be saying something that will give succour, solace or support to the murderous organisations that exist in Northern Ireland, and particularly to the IRA? In expressing my opposition to the existence of this type of legislation, am I doing something that will help the case of the IRA? That is an awful crisis of conscience.
Last week and the week before I heard of the atrocious Darkley murders and of the murder of young Edgar Graham, whom I had met recently at a British-Irish Association conference in Oxford. That was the last time that I spoke to him. When I heard of those murders I said to myself that I should not object to the emergency provisions; I might go into the Lobby to vote for them. The days that have since elapsed have allowed me to reconsider and once again to say that I am not happy, and shall never be happy, while such legislation remains on the statute book. That is not asking for the repeal of the legislation. One would be a fool even to suggest or to contemplate that, bearing in mind what is happening in Northern Ireland.
But there are certain aspects of the legislation that I believe are wrong and are self-defeating and counter-productive. I have in mind, for instance, the number of arrests that have taken place. Over 17,000 arrests have taken place since the introduction of the legislation. A thousand people have been convicted under it. Sixteen thousand people have been arrested and interrogated. They have been held for short or long periods, and taken to interrogation centres. Those people are bound to feel bitterly resentful, because they have not been guilty of any crime, no crime has been proven against them. It is this counter-productive effect of the legislation to which I am opposed.
I remember that as a Member of another place I was on the committee upstairs when this legislation was going through the Committee stage. With the support of, I think, the honourable Member for Antrim, North, I then suggested that there should not he only a single judge in the Diplock courts. I think that there should be two or three judges, even if it means creating more posts for the legal profession; and I am not particularly enamoured of that profession, because many of them have made themselves millionaires out of the troubles in Northern Ireland.
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Alternatively, if there are not to be two or three judges, there should be one judge with two or three assessors. I believe that in Northern Ireland some people are now coming to the conclusion that if there is only one judge hearing a case under the Diplock courts' regulations, there is inclined to be criticism and suspicion. I am casting no reflection at all on the judges who sit in the Diplock courts. Many of them have devoted their lives to being involved with this type of legislation.
I certainly have no intention of detaining the House, but I want to put forward a suggestion to the Minister. I am not opposed to the "supergrass" system in Northern Ireland. I think that the supergrass system has taken some very dangerous men out of circulation in Northern Ireland, men from both the Loyalist community and the Republican community. There can be absolutely no doubt that many very dangerous men have been taken out of circulation because of information given by supergrasses. Young Edgar Graham said exactly the same thing, and some people believe that that was the reason why he was murdered.
All the paramilitary organisations are very worried about the supergrass system, because it leads to awful suspicion within those bodies. They are not sure whether someone who is their colleague one day will not be a supergrass the next day. So the paramilitary organisations and those who support them will do anything that they can to discredit the supergrass system.
The supergrass system should not be abolished, and the Government should do everything that they possibly can to ensure that it is not discredited. I should like to suggest that where people are arrested on the evidence of a supergrass, there should be absolutely no delay in bringing them before the courts. If people who are arrested on the evidence of a supergrass are not brought before the courts but are incarcerated on remand for 12 months, it is very unfair if, when they go before the courts, the supergrass withdraws his evidence. Those people have spent a year, or possibly longer, in prison.
It would safeguard the supergrass system, if the only evidence used against a person is coming from a supergrass, to brook absolutely no delay and to prepare the case as quickly as possible so that any person who is innocent will have spent the minimum time in gaol. Where a person has been incarcerated in prison on the evidence of a supergrass and that supergrass retracts his evidence, there should be compensation paid to the person who has been so incarcerated on evidence that no longer holds when the case comes to court.
Only recently, I was shown something that I believe would be of inestimable value in relation to supergrass evidence. I have been shown—I am not sure whether the Minister has seen it—a tamper-proof tape, a machine that will record and that cannot be tampered with. If it is tampered with under any circumstances, that will show up on it. A firm in Britain is making these tapes. I believe that such a tape, used when the supergrass is giving evidence, would mean that a supergrass would know that his voice, the manner in which he was speaking, the evidence that he gave to the police, the answers, and the words of the police,

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were there. This would safeguard the police and it would be made far more difficult for the supergrass subsequently to withdraw his evidence. Everything hinges upon the fact that this is a tamper-proof tape. No one can change the tape, edit it or cut bits out of it. It would help in the security battle in Northern Ireland if such a tape were used.
It is most important that there should be absolutely no delay when persons are brought before the courts. This is the one area where there is an awful lot of public feeling at the moment. Even though I am no longer a constituency representative, I have received scores of letters from people in both the Loyalist and the Republican communities telling me that they know of someone or have a relative—I have passed some of these cases to the Minister concerned—who is at present in prison on remand on the evidence of a supergrass. They feel confident that when the case comes before the court those detained will be found not guility.
I do not believe everything that I hear or read in Northern Ireland. But, reading those letters, I am convinced that some of those people who are at present in prison will eventually be found not guilty. That is why I say that I am not objecting to the supergrass system. I believe that it has taken dangerous men out of circulation. I should, however, like the Minister to look at this tamper-proof tape because I believe that it would safeguard the police and the supergrass system.
The present representative for West Belfast is openly, and has openly, associated with the paramilitary organisation, the IRA. My noble friend, Lord Donaldson has already referred to this matter. I think that the Secretary of State is perhaps in the process of changing his mind. I should like to put my thinking on record. I do not believe that, when Provisional Sinn Fein is openly associated with the Provisional IRA, it has any right at all to make representations under any circumstances to any Government Minister. I believe that the Secretary of State should take the decision as quickly as he can to reject any representations coming from such a source. I put on record my opposition to this legislation. I understand that there cannot he a vote—
A noble Lord: Yes, there can, my Lords.
Lord Fitt: My Lords, possibly there might be a vote, but I wish to say that I have an inherent distaste for the legislation, and the sooner it is taken off the statute book the better for everyone concerned.
9.34 p.m.
Lord Kilbracken: My Lords, it is a great pleasure to follow my noble friend Lord Fitt. I agree with every word he has said. We should all appreciate how fortunate we are to have among us someone with such a long personal and intimate knowledge of affairs in Northern Ireland. We last debated the continuance of this Act on the very last day of the last Parliament, when it was more or less smuggled through your Lordships' House on the grounds that it was an inappropriate time to discuss it in any detail. Now, together with the last order. it has been relegated to the
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dinner hour, and that, together with the extremely sparse attendance, although it is now rising slightly—
Lord Donaldson of Kingsbridge: They have had their dinner, which is more than we have!
Lord Kilbracken: They have had their dinner, my Lords, exactly. I think it shows how little importance the Government attach to Northern Ireland affairs in the arranging of business and the lack of interest shown by Members of your Lordships' House.
Lord Denham: My Lords, I hope that noble Lords will not draw that conclusion because we have taken this very important business at this time. I made it clear to your Lordships at the beginning that, although we normally contain the adjournment business in an hour, we were not expecting to do so in this case—and, indeed, had I been expected to do so, I would have been slightly disappointed. The noble Lord must not suggest to the House (he may suggest, but I hope the House will not take it as such) that the Government do not believe this business to be of extreme importance.
Lord Kilbracken: My Lords, the business taken during the adjournment is usually that which is of no interest to practically anybody except the mover of the Bill and, perhaps, one or two other noble Lords. This has proved to be the case on this occasion, when for the greater part of the very important order that we took before this there were fewer than nine or ten Members in your Lordships' House. There were no Conservative Back-Benchers, no Members of the Liberal Party and no Bishops. Indeed, there were only half a dozen of us. I am not saying this in criticism of the Government, but I am saying that it shows how very little interest there is in Northern Ireland affairs—and it cannot be denied—among Members of your Lordships' House.
On the last occasion that the subject was debated, my noble friend Lord Underhill expressed the hope that that might be the last occasion on which we would have to vote for the continuance of this order because he hoped that by now Sir George Baker's review would have been released and, as I understood him, new legislation would have been introduced. We have heard from the noble Earl the Minister that Sir George hopes to complete his review within the next two or three months and there will then be a debate on the subject. I wonder whether he can anticipate this and tell us when he comes to reply whether it is then intended to introduce the new legislation which is so badly needed in the light of the review.
My noble friend Lord Fitt spoke of one of the subjects which has greatly concerned me, and that is the number of persons in Northern Ireland who are arrested under this Act compared with the number who face criminal charges. He mentioned a figure of 17,000. A much higher figure than that was given by my honourable friend Mr. Hume in another place. In any event, it seems certain that, of all those arrested since this Act became law, only some 12 per cent. came to trial, and of those, some 30 per cent. were acquitted. This proves that only eight out of every 100 people arrested under the terms of the Act were found

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guilty of any offence. As far as I am concerned, the inescapable conclusion is that the Act is not being used to counter terrorism but is being used for the gathering of information and for the harassment of innocent people.
I want to refer only to one other matter and that is the part played in the prevention of terrorism by the security forces in the Irish Republic. I think that I am now the only Member of your Lordships' House who lives in the Irish Republic, some10 miles south of the border. I very greatly resent the allegations that are still being made about the Republic being a safe haven for terrorists. The right honourable gentleman, the Member for Down South, to whom my noble friend referred, made it sound as though virtually all the terrorism in Northern Ireland sprang from the Republic and that the security forces were not doing a proper job.
I cross the border frequently on trips to Belfast, to the airport or to Enniskillen to do some shopping. I can assure your Lordships that very much more often I am stopped and questioned by members of the Garda Siochana and the Irish Army before reaching the border than I am when I have crossed it. Again and again I have driven to Belfast Airport and have seen no sign of any representative of the security forces once I have crossed the border. I have said it before in this House and I say it again, if the south is supposed to be such a base for terrorism, why is it that the border is still absolutely wide open so far as the northern security forces are concerned? Why is not any real effort made to check cross-border traffic, even on authorised routes, by members of the security forces?
In conclusion, in my opinion, far from being slandered by the right honourable gentleman in another place, the security forces in the Republic should be congratulated on doing what they have done, and are doing, to assist their opposite numbers on the other side of the border.
The Earl of Mansfield: My Lords, I must thank noble Lords who have taken part in this debate, and I shall reply briefly. The first matter which the noble Lord, Lord Underhill, raised concerned robberies and the acquisition of funds by paramilitary organisations. The Royal Ulster Constabulary has a special squad to deal with this matter. I am afraid that it is not known how much money from robberies finds its way into the coffers of terrorists, but I would imagine, and I do not think that I would be contradicted if I said to the noble Lord, that it must be considerable. Of course, the answer is to stop the robberies, but I am afraid it is part of the very unsatisfactory situation which obtains in the Province at the moment.
Then, the noble Lord asked about the co-operation between the RUC and the Garda. From time to time there are bound to be misunderstandings in the course of dealing with a very sensitive matter such as the co-operation between the police forces of two independent Community partners. Any episode which reduces the level of co-operation, or which produces friction, is much to be regretted. Everything that is done is done to try to ensure that there is no misapprehension on either side, and that nothing is done which would
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affect joint security co-operation between the RUC and the Garda. That, in what is a delicate situation, is as far as I should go.
The noble Lord, Lord Donaldson, and other noble Lords took up the matter of what I might call "dealings with Sinn Fein". My right honourable friend the Secretary of State announced in the other place on 8th December that he would be examining the Government's stance towards Sinn Fein. That review is under way, and all I can say at this stage is that I do not believe for myself that the proscription of Sinn Fein would be the panacea that some might think.
There is a strong possibility that party members would continue very much the same activities under a different flag, and many nationalists and supporters of nationalism would incline to the view that the Government were banning a legitimate political party because its views did not find favour with the Government. Therefore, the best course so far as the criminal law is concerned might be for the security forces to continue to keep a close eye on Sinn Fein members' activities with a view to prosecution where there are breaches of the existing criminal law. An example which comes to mind might be incitement to hatred.
Then I come to the noble Lord, Lord Fitt. He expressed his distaste for the whole arrangements both under the Act and, I think, in relation to what has been described as supergrasses. Anybody who has regard for the due process of law, and for the rights of individuals under the law, would find a lot which fills them with some anxiety about this legislation. But so far as the mechanics are concerned the arrest powers are being examined by Sir George Baker, and I do not think that I can go any further than to say that we must await Sir George's findings. Equally so far as the noble Lord, Lord Kilbracken, is concerned I cannot anticipate those findings until Sir George announces them. Until the Government evaluate them no decision can be made as to what, if anything, should happen.
So far as supergrass trials are concerned, we have to remember the background to this form of legal process. Because of the intimidation of witnesses and potential witnesses there is a severe difficulty about obtaining evidence which can be put before courts in Northern Ireland. So that if a former terrorist offers to give evidence against his former accomplices the Royal Ulster Constabulary, and indeed the Director of Public Prosecutions, would be failing in their duty if they did not at least consider placing such evidence before the courts. But, of course, it is for the courts to say what weight, if any, should be given to that evidence.
There are, as the noble Lord, Lord Fitt, said, delays. These are due to a number of factors, but very often they are occasioned by the preparation of the defence case. I shall consider the points he made both on compensation and evidence obtained by tape recorder. The noble Lord may, or may not, know that there has been considerable experimentation done in Scotland over the last three or four years and certain results will come to hand.
Of course, it is regrettable, if I may finish on this note so far as these trials are concerned, that there are no juries, but that is the result of intimidation and the risk of perverse decisions. I believe that the judiciary in Northern Ireland have maintained very high

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standards, and the evidence which they hear in open court must convince them beyond all reasonable doubt that the case has been proven, and that is the standard of proof which they apply. There are many cases where judges have acquitted defendants where converted terrorist evidence had not satisfied them as to the guilt of the defendant.
The noble Lord, Lord Kilbracken, produced one point which I did not understand about being stopped on his way to Belfast Airport. I travel that way many
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times in every week and I should have thought that the level of stopping and searching is among the most sophisticated in the world both before one comes to the airport and on two occasions when one gets inside it. I refute any contention that one can travel about the Province if one is up to no good without risk being discovered fairly quickly. I commend this order to the House.
On Question, Motion agreed to.

Fisheries (Amendment) (Northern Ireland) Order 1983
9.52 p.m.
The Earl of Mansfield The Earl of Mansfield rose to move, That the draft order laid before the House on 15th November be approved.
The noble Earl said: My Lords, the purpose of the Draft Fisheries (Amendment) (Northern Ireland) Order is to provide a revised structure for the management of salmon and inland fisheries in Northern Ireland by amending the main fisheries legislation —that is, the Fisheries Act (Northern Ireland) 1966.
We now sail into what I hope will be calmer waters. Nevertheless, they are complex and technical and, like most things in Ireland, have a very long history. Indeed there has been a long history of controversy in Northern Ireland over these fishery matters, but I do not intend to relate it. I would say a little about the background to set the scene for those who may not be familiar with the subject.
There is an abundance of unspoilt waterways in the Province capable of sustaining fish stocks. Commercial fishing of salmon, eels and other freshwater fish is currently valued at almost £3 million a year and angling is said to be among the best in Europe—indeed the World Coarse Fishing Championship was held in the Province in 1981.
The 1966 Fisheries Act has worked well in regulating inland fisheries and providing for the control and development of these valuable resources. But by the late 1970s a combination of public concern from certain fishery interest groups about future management and development policies and the recognition by my department, the Department of Agriculture, that some aspects of the legislation were becoming outdated, led to a Committee of Inquiry into Angling being set up in 1979 by the then Secretary of State for Northern Ireland. The Committee, under the chairmanship of Professor Black, was appointed to review how well the 1966 Act was working and was also asked to make recommendations for the future management of inland fisheries. The main recommendation of the Black Report, which was published in March 1981, was that a new Inland Fisheries Board should be set up to absorb the functions of the Fisheries Conservancy Board and much of the inland fisheries work of the Department of Agriculture. However, a minority on the Committee was opposed to this recommendation and reaction from many interest groups showed that there was considerable disagreement on how inland fisheries should be managed. In an attempt to reach consensus, successive Ministers responsible for fisheries conducted further discussions with interested parties during a two-year period subsequent to the publication of the report.
At the end of that time, in the absence of much agreement from any side among the various interest groups, the Government announced new proposals to restructure the FCB and reallocate certain responsibilities for fisheries management. Around the time that these proposals were published, the Northern Ireland Assembly Agriculture Committee undertook a series of hearings at which evidence was given by representatives of most of the groups with an interest
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in inland fisheries. I would like to acknowledge the contribution of the Assembly and of its agriculture committee in particular.
The degree of consensus achieved by the Committee, together with the large volume of representations made during the consultation period, enabled the evolution of the original draft proposal into the form now before the House. These proposals, which I finalised, are the result of prolonged and careful deliberations. They come about as a result of a number of meetings which I held during the summer with the Fisheries Conservancy Board and with representatives of the angling bodies and others concerned. I am confident that my new proposals are well understood and represent a significant step forward in improving the structure of management for these important resources.
So far as the individual articles are concerned, the first two are self-explanatory, Article 3 provides for the revising of the FCB. The Board will retain its present responsibilities for conservation and fishery protection. Some groups wanted the board's functions to be further increased. For example, the Northern Ireland Assembly and others advocated that responsibility for the management of public angling waters, presently under the control of my department, should be transferred to the board. It is my intention, however, that the facilities for independent anglers—that is, those who do not belong to angling clubs—should continue to be managed by the department at least until such time as there is clear evidence that the FCB could undertake the management of these waters in an effective manner and with the agreement of all the various interests represented on the board.
I have explained to the FCB and to the anglers' representatives the basis on which I would propose to monitor the efforts of the new board. I have said that I will establish procedures which will ensure that the board has a regular and effective advisory input to Government. In my view this has not happened in the past to the extent that it should. I hope that the members of the new board will be able to demonstrate a unity of purpose and that the advice which they give will provide evidence of a new consensus among the various interests.
If they can do this and can show that they are sufficiently on top of their primary tasks of conservation and protection to be able to contemplate taking on new responsibilities, then I shall be prepared to look again at this question of public water management to see whether there might not be an agency role for the board. Article 3 has been revised to allow for such a role and it is really up to the various interests on the new board to put their differences behind them and show that they can work together in the interests of inland fisheries. Resource implications would have to be considered afresh in the circumstances prevailing at the time of the reassessment, and any increase in the board's workload would of course be dependent on proper financial arrangements being arranged.
A further provision of this article is that, for the time being, the board will retain its authority for the protection of salmon at sea. However, the draft has been worded so that we may direct the extent of the board's involvement if this should prove necessary at some future time.
Article 4 simply invokes the schedule to the order. Article 5 would enable the Government to introduce a supplementary levy on angling and commercial fishing licences. I should point out that an appointed day order is required to bring this article into effect and I can assure the House that any increases resulting from such an order will, so far as possible, be contained within the limits recommended as acceptable by the Black Report. The FCB will be consulted on the level of any proposed charges and of course the law of diminishing returns will be taken into account. I have no plans for such a levy at present. This is purely an enabling power. Article 6 is included in the draft to allow obsolete parts of the 1966 Act to be removed.
The Schedule details the revised constitution for the FCB. At present, the board is composed of 15 representatives of various fishing interests. In order to maximise the efficiency of the board, the original draft order proposed that the FCB should be reduced to a small team of 4–6 persons. As a result of representation, I propose to expand the board to a maximum of 24 members, bringing in representative of farming, sporting interests, local government and independent angling. The schedule does, however, provide for a small executive committee to be established by the board from among its members, aid this should ensure that the original aim of maximising efficiency in carrying out the boards role is achieved.
The new FCB will be headed by an independent chairman and deputy chairman. I am confident that the proposals in the draft order will attract the support of the great majority of those interested in, and involved with, inland fisheries in Northern Ireland, and that the provisions are in the best interests of all concerned. For this reason, I much hope that all those who have been involved in the long-standing debate on this matter will co-operate in working constructively for the well-being of the inland fisheries of Northern Ireland. I beg to move.
Moved, That the draft order laid before the House on 15th November be approved.—(The Earl of Mansfield.)
Lord Underhill: My Lords, in effect we are considering primary legislation in the form of an order which cannot be amended—a comment I have made in connection with a number of recent Northern Ireland orders. I agree with what the noble Earl has said about the deliberations of the Assembly and the helpful report which was produced.
I will content myself with putting just three brief points to the Minister. As he has said, the proposal is greatly to extend the interests on the board; so we have anglers, commercial fishermen, other relevant commercial operators, fish farming, tourism, sport, recreation, district councils and the CBI. Is there any reason why there is not one direct representative of the trade unions appointed to this board?
Secondly, the noble Earl said that they are retaining the functions. I have looked at the 1966 Act and the functions are put down there as "conservation, protection and improvement". In the order before us it is merely "conservation and protection". I must ask: is there any particular reason why "improvement" has been left out?
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Thirdly, when we had the July appropriation order, I and other noble Lords—I include particularly the noble Lord, Lord Dunleath—expressed concern over the pollution of rivers. The chief executive of the board, while expressing pleasure at some improvement, particularly as regards farming pollution, expressed concern about the increased number of industrial premises, which are causing pollution. He also expressed concern at the greatly increased number of fish killings, although the number of incidents had been reduced. Do the functions which are given to the board include pollution, or is that dealt with in some other way?
Lord Donaldson of Kingsbridge: My Lords, I am happy to support this Motion.
The Earl of Mansfield: My Lords, the noble Lord, Lord Underhill, has asked me three questions. The powers of the board in fact will not be materially altered. I think the maxim is: "The greater includes the lesser". It is certainly the intention of the Government, in drafting this legislation, to give the new and expanded FCB, as it is called, the same role as before but possibly to increase it in due course. Certainly so far as improvement is concerned there is no desire to stop it from doing what it wants in that direction. It is, of course, inhibited by the fact that at the moment it does not have the resources to carry out that role.
The noble Lord also asked why the CBI should be represented on the board and not the trade unions. The reason is quite simple. There is a very considerable industrial and commercial interest so far as users of water in Northern Ireland are concerned for the purposes of fishing. The interest of the trade unions is simply not relevant and therefore they have not been included in the schedule, as the noble Lord has correctly pointed out. However, I would like to say to him that the intention is to appoint individuals to the board, partly because of their position but mostly because of what they can contribute to fishing in inland waters in Northern Ireland, and no reflection is meant so far as the trade unions are concerned.
As to the noble Lord's last point, I will write to him about it as soon as I have looked at Hansard.
On Question, Motion agreed to.

Agricultural Holdings Bill [H.L.]
10.5 p.m.
House again in Committee.
Lord John-Mackie Lord John-Mackie moved Amendment No. 61A:
After Clause 7, insert the following new clause:
("S.I. 1973/1473
(" The provisions of the Agriculture (Maintenance, Repair and Insurance of Fixed Equipment) Regulations 1973 shall apply to am, tenancy granted on or after the date on which this Act is passed.").
The noble Lord said: We have put down this amendment because in the last Budget there was considerable relief given to landlords in relation to

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various financial matters to do with holding agricultural land, and there is pressure—and rightly so—for something more to be done in order to help landlords in running their businesses by taxing them not on investment income but on management income. But if that is the case, then landlords must manage. The present practice, with every new tenancy lease that is made, is to make it a full repairing and insuring lease. In our opinion this is not landlord management at all, and we should like to see landlords taking full responsibility, such as they used to take, and a fair share of the repairing and insuring of buildings with fixed equipment, roads, et cetera, on their estates. That is why we have put down this amendment. I beg to move.
Lord Middleton: I share the noble Lord's disapproval of full repairing leases, and I believe that I am supported in this by the vast majority of private landlords. I am not quite clear about the tax point which the noble Lord was making, but I should like to make another tax point very briefly. Private landlords are under a taxation difficulty, because if a private landlord can recover VAT on his repairs expenditure he will be far more willing to do repairs. Landlords cannot recover VAT, but tenants can. Therefore, landlords are more inclined to arrange with tenants that they should do their repairs. But that is by the way.
I do not think it is necessary to legislate about this, as the noble Lord is seeking to do by this amendment. Under Section 6(2) of the 1948 Act, a tenant can go to arbitration to vary the agreement so as to bring it into conformity with the statutory repair clause, under which the liability between the landlord and tenant is shared in the traditional way. So I do not see that there is any need at all for this amendment.
The Earl of Swinton: I am grateful to the noble Lord. Lord John-Mackie, for explaining the purpose of this amendment, and I am also very grateful to my noble friend Lord Middleton for pointing out the tax disadvantage as regards VAT. I feel that while the 1973 regulations prescribe an allocation of liability between landlord and tenant for maintenance, repair and insurance of fixed equipment, the question of any variation from that allocation of liabilities is a matter for negotiation between landlord and tenant. Also, the terms of the contract of tenancy are a relevant factor which must be taken into account in any arbitration on rent. I am sure that we should not interfere with the provisions in the legislation by a departure from the terms of the 1973 regulations, and I hope that the noble Lord will feel able to withdraw his amendment.
Lord John-Mackie: The noble Lord, Lord Middleton, is probably correct in what he said. When I talked about the taxation point, I was referring to the fact that the income from a tenancy after expenses have been paid is investment income, not management income, and I understand that there is pressure from landlords to have that altered. I can quite see the point about VAT, but that does not alter the fact that I do not know of any recent tenancy agreement which has not been a full repairing and insuring one.
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Sometimes the landlord pays the insurance, but in most cases it is a full repairing and insuring tenancy agreement. If a tenant can appeal against that, then well and good; but I do not think he does. The noble Lord may correct me there; but if that is the case I am willing to withdraw our amendment, though I am not very happy in spite of what noble Lords have said.
Amendment, by leave, withdrawn.
10.10 p.m.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 61B:
After Clause 7, insert the following new clause:
('Institutional landowners.
. Incorporated or unincorporated institutional landowners whose principal business is other than agricultural shall make all agricultural land in their ownership available for letting to a tenant.")
The noble Lord said: The wording of this amendment expresses in an imperfect way part of the evidence we have received, which suggests that there is unease about the role of some of the institutional landowners. I say that the wording is obviously imperfect: for example, we have not defined the meaning of "institutional landowners". There is also a danger, on the evidence we have seen, of generalising.
I recognise that there is an acceptance that many of the institutional landowners such as the colleges, the Church Commissioners and the pension funds are playing an important part in the agricultural industry and that they let a substantial part—if not the entirety—of their land. Some colleges use their farms for research and for experimental purposes, and so obviously there would have to be some exceptions to the principle. But the fear is that among some institutional landlords, there may be speculators who may be tempted to,
"play fast and loose in the countryside",
to use the words employed by the noble Lord in the course of our debates.
I understand that a survey in the process of being conducted by the Tenant Farmers' Association shows that when land ownership passes to new institutions the tenanted farms in their ownership steadily decline in number. It is on the basis of that survey—which may be incomplete—that this amendment is founded. I accept it is not clear—certainly not to my noble friend or myself—whether that is because the institutional landowners pursue a vigorous policy of amalgamation or because they take over the farming business.
It may be that the noble Lord the Minister, when he comes to reply, will be able to assure the Committee that the trend which appears to have been identified by the TFA has been exaggerated. But the principle embodied in the amendment gives expression to something which may be important and of which your Lordships ought to take note. I acknowledge that the amendment may or may not markedly increase the supply of tenancies, but it would give notice to the institutions that the Government want them to continue their policy of letting farms, where they are letting farms: and it would also be a warning to absentee land speculators that if they purchase agricultural land they will have to make it available for letting to working family farmers.
It is not our intention to press this amendment to a Division, but we believe that the Government ought to appreciate that the amendment may be saying something which many farmers believe to be important. I beg to move.
Lord Northfield: Perhaps I might explain briefly the reasons why there will not be much attempt to press this issue? I believe my noble friend is referring mainly to the financial institutions; namely, insurance companies, pension funds, property unit trusts, and property bonds. I believe that any amendment or any debate which adds fuel to the fire about those institutions is to be regretted. The position is that those institutions own only about 1.2 per cent. of land. They are unlikely to own any more than 7 per cent. to 11 per cent., even on recent trends of acquisitions, in another 40 years' time. I would guess that, as there has been some retrenchment, they are unlikely ever to reach that figure now. So any attempt to make them scapegoats is in some sense a mistake.
Not only do they own very little land: they do not bid up the prices of vacant land; it is nearly always the farmer next door who does that. They are mainly buying tenanted land, and they are not buying much—6 to 10 per cent. of the land offered on the market in any year. They are also good landlords, and have in most cases a very good record as landlords. Finally, they do not push up rents any more than anybody else, by and large. So first of all we should try to reduce the hysteria about these owners.
Let us come to the issue of in-hand farming, which is really what my noble friend is raising. It is true that on a survey which we in the Northfield Committee attempted to undertake it looked as if perhaps 19 per cent.of the land they owned was being held in hand. I have to say to the Committee that, along with 23 million other people, I am part of this new ownership. I contribute to a pension fund, and I am delighted that the ownership of let estates is being spread through pension funds and life insurance companies of this kind to 23 million people. What is to be regretted about that? Why, if I am an investor with 23 million other people, should I have rules different from any other private landlord? We can only accept that there should be rules if they are for all private landlords, among whom we in the pension funds—people like myself and many noble Lords who contribute—are numbered. Why should there be special rules for us as compared with the individual private landlord?
The fact is that pension funds, like everybody else, have to assess their position under present law and under present fiscal regulations. If they need to have some land in hand in order to preserve the vacant possession premium on land, or if they need some land in hand in order to learn about farming because many of them are new to it, or if they want some land in hand because they want to avoid the three generation tenancy, why should they not? Every other landlord can—and I am one of the 23 million.
So I have to say, if I may, that this is a slightly misguided attempt. These people are us, all of us in the community. They are not somebody over there; some faceless gang of people who are robbers and speculators. They arc people honestly investing money
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on behalf of the rest of us, and I wish them fair wind in making the best of present regulations, like every private landlord.
Lord Stanley of Alderley: I think that in principle I would support this amendment, and I do not think I agree with a single word the noble Lord, Lord Northfield, has said. I support the principle of resident farmers rather than absentee city farmers. I am particularly concerned at the moment, if I may say so, about the ownership of land encouraged by the Business Expansion Scheme. These schemes are heavily tax subsidised, and I do think, contrary to what the noble Lord, Lord Northfield, said, that these schemes may well push up the price of land, as opposed to the institutional buying.
Lord Mackie of Benshie: I, too, will try to be short. I think that the general intention of the clause might be worthy of some support, but the clause itself is unjust and unworkable, and therefore we oppose it.
The Earl of Caithness: May I very briefly support the noble Lord, Lord Northfield. I think this "institutional bashing" by certain Members of your Lordships' Committee and of another place is not good for agriculture, and we must divorce ourselves from any association to that effect.
Lord Belstead: I think the noble Lord, Lord Northfield, the noble Lord, Lord Mackie, and my noble friend Lord Caithness have really answered this amendment for me. All I would add is that I am advised that the figures are that the financial institutions own only 5 per cent. of all agricultural land, and that 70 per cent. of their holding is let. I think, therefore, that this would be a rather poor return for that record. Having said that, the noble Lord, Lord Prys-Davies, was very fair in making it clear when he moved the amendment that the wording would not do and that it obviously would catch, in its present form, many institutions which it was not intended to catch. Perhaps on those grounds, although I must say there are other grounds as well, this is an amendment which ought to be withdrawn.
Lord John-Mackie: My noble friend Lord Northfield said that we were getting hysterical about—
Lord Northfield: No.
Lord John-Mackie: That was the word he used, and he evidently used it about us, as we put forward the amendment. I would say that he got hysterical at the end of what he was saying about the situation. It is easy to produce figures and say there is 5 per cent. of this and 10 per cent. of that. I also have some figures to point out what is happening. I have knowledge of six estates totalling about 70,000 acres. One had 12 tenants when it was bought less than 10 years ago and now there are none. Another had 11 tenants and now there are only two. Another had 10 tenants and now it has none. Another had 11 tenants and now there are only five. Another had 12 tenants and now has only

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five. Another had six tenants and now there are none. That is what is happening with institutional landlordism.
The noble Lord need not shake his head. I can give him the figures and the places although I do not want to disclose them tonight, as that is not right. I know of many more. Farmers see this happening. These tenants have gone over the years, probably old men retiring, but the people round about see the land being taken in hand and that has a psychological effect, if nothing else. We are not being hysterical but factual about what is happening. These are facts, and I can produce the names of the estates. I visited one not long ago. We are not being hysterical but just putting forward the fact that institutional landlords are doing this and in these particular cases there are 50 tenancies that have gone out in the past 10 years. I do not think that is being hysterical.
However, we know the situation and, with that very firm point, that we are not being hysterical and that I have 50 tenancies in front of me that have been lost, we withdraw the amendment.
Amendment, by leave, withdrawn.
10.23 p.m.
Lord Sandford Lord Sandford moved Amendment No. 61C:
After Clause 7, insert the following new clause:
("Amendment of Schedule 1 to the 1948 Act.
. In Schedule 1 to the 1948 Act (matters for which provision is to be made in written tenancy agreements), after paragraph 10 there shall be added—
(" . Any agreement to modify the management of the holding in the public interest, between—

(a) an appropriate body with a statutory interest in the management of the holding; and

(b) either the tenant or the landlord or both.".").

The noble Lord said: I must disappoint the Committee because there is nothing here to get hysterical about. All this amendment does is to introduce again the issue of agreements to modify the management of the holding in the public interest. This is a concept which we have already discussed on Amendments Nos. 48 and 57. We were grateful when my noble friend the Minister undertook to take away the arguments and points that he had heard discussed and consider them between now and the next stage. We now know, and it is very welcome news, that officials concerned in this matter are meeting with his officials later this week. That is good news and an indication that his undertakings were given in earnest, as we had expected.
On those two Amendments Nos. 48 and 57 we were discussing modifications to the management of a holding in the interests of conservation. The three aspects we were discussing were the conservation of field monuments, conservation of flora and fauna and conservation of the landscape. Those were the issues picked on. I said at the time that I thought any amendment dealing with this matter ought to be rather more widely drafted. It has since been borne in on me by a number of the public bodies involved that this is indeed so.
I have been reflecting on the upland management experiments in the Lake District and Snowdonia in the
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mid-1970s. Looking back, it is clear that the agreements entered into during the experiments covered a number of aspects besides conservation. Perhaps I could give the Committee one or two illustrations. There were in those experiments—and there have been many since—instances where a county council in its highway authority role came to agreements with farmers to move a footpath from one side of a valley to another, or rather to establish a permissive path and to persuade the public to use that rather than the statutory definitive path on the other side. Sometimes it was in the interests of the farmer, sometimes in the interests of the walker.
In other cases a regional tourist board would come to an agreement with a farmer that a building might be taken out of agricultural use and converted to self-catering tourist accommodation. That would be done by the regional tourist board. There were other cases—and there have been many more recently—where the Development Commission (of which the noble Lord, Lord Northfield, was chairman at one time) offered conversion grants to farmers for the conversion of farm buildings to workshops in the interests of creating more employment in the countryside. A fourth example is where a local education authority comes to an agreement with a farmer or a landlord that some part of a holding might be allocated for field studies.
None of those examples—footpaths, self-catering, workshops or field studies—can be described as conservation, but I think that the Committee would agree that they can all potentially affect the management of the holding. For that reason I put forward this amendment, with a view to indicating the breadth that such an amendment would cover. I move the amendment so that my noble friend the Minister can see what I mean in rather more detail when I say that such amendments ought to be more broadly drawn than they might otherwise be if we left the matter merely at conservation. I shall be interested to hear views from other noble Lords. I beg to move.
Lord Stanley of Alderley: I should like to ask my noble friend Lord Sandford a question. Who can the agreement be made with? He has mentioned a number of bodies, but does he suggest that an agreement could be made, for example, with a way-out conservation body? If the agreement is made with such reputable bodies as the NCC or the National Park Authority, I very much welcome the suggestion. I understand that there is evidence that tenants have been somewhat shy of making agreements with those bodies for fear of their tenancy agreement. I should welcome it if my noble friend could confirm who the agreement can be made with.
Lord Sandford: Perhaps I can answer that question before my noble friend the Minister replies. In the discussions which will go on between now and the next stage it may well be necessary to look at paragraph (a) of my amendment to see whether the term,
"an appropriate body with a statutory interest",
needs to be defined in a schedule or in some other, better way. It was not intended to include any bodies other than the kind which I mentioned—the county council as a highway authority, the regional tourist

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board, the Development Commission, the county council, local education authority, district council or the water authority. They are all statutory bodies. It was not intended to include some of the way-out bodies which had perhaps better not be mentioned by name.
Lord John-Mackie: I am rather interested in the points that the noble Lord is making about reaching agreement with various people. As Members of the Committee know, I farm 20 miles from where we are sitting this evening, and many of the footpaths which run through my farm are completely out of date. We have made arrangements with the local people so that, instead of using a footpath, they can go round the field, up a lane, or various other ways, and it seems to work. But there may be an occasion when someone digs in his toes and says, "There is the footpath, it is on the map. You may have made a private arrangement, but I am not having anything to do with that".
I should be interested in a proper system under which proper arrangements could be made, but, if one goes to the county council, one finds that it is years before it will decide on anything. If one goes to the ramblers, they hum and haw because they feel that there is an advantage to the farmer, whereas, as the noble Lord has said, there is probably an advantage to both parties. I am interested in this matter and I look forward to hearing what the noble Lord has to say about it.
Lord Belstead: We come to the Government spokesman and I am afraid that he does not have an answer at all on this particular point. But, secure in the knowledge that in a moment my noble friend will have an answer to the point which the noble Lord, Lord John-Mackie, has put forward, I should like to say two main things. First, if we were to decide in favour of the amendment this evening, there really would be a problem, in that a management agreement between a public body—be it the Nature Conservancy Council, the Countryside Commission, or any other body—with one of the parties to the tenancy—either the landlord or the tenant—could, as I understand the amendment, become a term of the tenancy without the other party's consent. Therefore there is in the proposal an element of compulsion, which one would have to think about extremely carefully before agreeing to.
That leads me to the second point. My noble friend was good enough to say that arrangements have been made for representatives of the Ministry of Agriculture to meet various interested bodies later this week to see whether it is possible to bring forward an appropriate provision or provisions to cover the various conservation matters which we have discussed during the three days of the Committee stage, ranging originally from Amendment No. 11 up to the present amendment, No. 61C.
The second point that I should like to make is that those representing the Ministry will have two questions in mind. First, I think that we should be extremely reluctant to import compulsion into arrangements for conservation in the Bill. I do not want to say that as though my mind is closed about anything, because it is silly, and it is not desirable, to
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sit down with a closed mind to have talks. I think that we should be very reluctant on that point.
Concomitantly with that, the Government do not, of course, want to provide formatters that are already covered. On one of the previous amendments—I now forget which it was—I felt that perhaps we were beginning to discuss matters which are already covered by tenancy agreements.
I thought that I would take the opportunity to make those points about the discussions which are to be held later this week—discussions which I genuinely hope will be fruitful.
Lord Sandford: I am grateful to noble Lords who have spoken. Perhaps I may first answer the point made by the noble Lord, Lord John-Mackie. I think that what the upland management experiments in Snowdonia and the Lake District showed was that there is a halfway house between the purely informal arrangements which the noble Lord described, and which are adequate if the pressures are not too great—though in the Lake District they are too great—and other arrangements. On the other hand, if the farmer has to deal directly with the highway authority, he undoubtedly has a major problem of bureaucracy on his hands.
The problem was overcome in the experiments by the appointment of an ex-ADAS officer to run the experiments. He acted as a broker between the farmer on the one hand and all the authorities on the other hand. That makes it feasible to enter into agreements slightly more formal than those that the noble Lord is used to, but less formal than those negotiated in a legal framework with a highway authority. That is the essence of the art.
I now turn to the points about compulsion raised by my noble friend. I do not think that one can rule out compulsion altogether. In using the very broad term "any agreement", my amendment was designed to cover some arrangements which are the result of compulsion, and others which are not, some which are formal, some which are informal, some which have financial backing, some which are in legal form and some which are not.
As an example of those which are compulsory, there is a statute which requires as a matter of law that field monuments should be protected. I am afraid that the managers of an agricultural holding have no option but to comply with them. If they are enforced, they become the subject of an agreement to manage the holding in a different way from that in which it would be managed if the field monument was not there. So there is an element of compulsion, and there is no getting away from it.
Lord Winstanley: Before the noble Lord leaves this point, I wonder whether he will confirm what I believe to be true, so that there can be no misunderstanding: that is, that in the Lake District upland management scheme, which was so outstandingly successful, there was no element of compulsion, nor was there any need for it.
Lord Sandford: Yes, I was going on to make that very point. The upland management experiments went ahead on the basis of all the agreements being

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voluntary. But I did not want my noble friend to be under the impression that one can totally exclude compulsion, because one cannot. Some of it has the force of law. But the whole intention is that the agreements are entered into freely, and the great majority of them are informal. The largest number now being entered into are those resulting from the notification scheme under the agricultural and horticultural grants scheme of 1980.
I am advised by those whose job it is to enter into these agreements that something of this sort, but not exactly this, would make the operation of these agreements that much easier and would be beneficial to all parties concerned. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.37 p.m.
The Earl .of Caithness The Earl .of Caithness moved Amendment No. 61D:
After Clause 7, insert the following new clause:
("Assignment of tenancy.
.—

(1) If a tenant wishes to relinquish his tenancy he shall be entitled to assign the tenancy by offering for sale that tenancy on the open market following the service of due notice of his intention upon his landlord not less than twelve months prior to the next ensuing term date at which the tenancy could be terminated by a valid notice to quit.

(2)Upon such assignment taking effect the landlord shall be entitled to demand up to 40 per cent. of any consideration received by the tenant in respect of the assignment of the tenancy.

(3)Upon the service of a valid notice to quit by the landlord on a deceased tenant's executors the executors may, within one month of receipt of that notice, serve a counter-notice on the landlord stating their intention to offer the tenancy for sale in accordance with the provisions of the foregoing subsections.")

The noble Earl said: I must first apologise for the fact that this amendment, with which I know your Lordships are aware I am concerned, was put down only yesterday. Many noble Lords have mentioned that this Bill does not get to grips with the landlord-tenant problem. Many of us believe that the patient is terminally ill, and that without major surgery it will die. The Bill will not do enough to preserve a system which has been useful but which does not now serve the needs of the commercial landlord or the commercial tenant. My amendment seeks a radical change in the landlord-tenant system by allowing the tenant to offer his tenancy for sale. This, after all, is permitted in the commercial and residential world, so why not in agriculture? There are a host of reasons why a tenant might wish to assign his tenancy, but he is at the moment barred from doing so by the 1948 Act.
Subsection (1) permits a tenant to assign his tenancy on giving the landlord at least 12 months' notice. The value of the tenancy will be decided by offering it for sale on the open market. As a result, land owners might feel that they are being deprived of a part of their interest in their property, and will therefore justifiably be entitled to some compensation. This can be assessed in a number of ways, but I have put forward one. Subsection (2) allows the landlord up to 40 per cent. of the value of the tenancy, which he can bid for in the open market along with others should he want to take the land in hand. In order for this idea to work properly, it must apply to all tenancies. Thus, those parts of the 1976 Act relating to succession would have to be repealed.
Following the death of a tenant, the old procedure of serving a notice to quit on the executors would be re-established, and subsection (3) permits the executors to serve a counter-notice on the landlord and then to offer the tenancy for sale. I appreciate that the drafting might be imperfect, and probably is, but it is the principle that I feel should be discussed. The advantages are that it would enable a free flow of tenancies, for which there seems, at the moment, to be an insatiable demand. A tenant can get out of farming at any time, not just on retirement or for ill health, and receive a capital sum for his interest. This, I believe, would encourage him to give someone else an opportunity to farm.
There is a concern that the landlord has no control over the charge of the assignee. At present, he has no control over a successor, provided that that successor is eligible and suitable. Furthermore, that concern is only a good argument for supporting my earlier amendment to tighten up the rules relating to notices to quit. I believe that my amendment will reinvigorate and give new impetus to the landlord-tenant system; the industry will attract a steady flow of new entrants, bringing with them more capital, novel ideas and fresh enthusiasm. I beg to move.
Lord John-Mackie: If I can just say a word on this, we studied this amendment very closely and, on the face of it, it has attractions, but we could see great anomalies because of the succession in the 1976 Act. The noble Lord has put us right there: he says that would have to be repealed, in which case that convinces us that we cannot support it at all.
Viscount Ridley: Speaking as a landlord on this Committee stage, the noble Earl, Lord Caithness, said that the patient was terminally ill. I would go further and say that this amendment would put the last nail in the coffin of the landlord and tenant system. I could not conceivably think of a system whereby a tenancy could be sold and a total stranger appear on the farm; the whole relationship would be finished. I hope that this amendment will be speedily withdrawn.
Lord Middleton: I could not agree more with the noble Viscount, Lord Ridley. As my noble friend Lord Caithness has said, this is a brand new amendment and I can only give a very hurried judgment and a very rapid reaction, which is that it would not be welcomed by the industry at all. Certainly under the amendment the landlord could purchase a tenancy, but landowners can do that now anyway; if they want to buy out a tenant, and the tenant agrees, that can be done.
As my noble friend has just said, it seems to provide that a tenancy could be assigned, as of right, by a tenant with whom the landlord had originally willingly entered into a contract, and it could be assigned to someone with whom the landlord might be quite unwilling to enter into a contractual relationship. The choice as to who would farm his land would be taken right away from him, not just for one generation but for three generations possibly; there would be three generations of unacceptable tenants because no new tenancy would have been created to bring it under Clause 2 of this Bill.

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Even the 1976 Act provided that by succession a tenancy had to pass, if it did pass, to a successor as someone with whom the original contract had been made who was, first, an eligible person—that is, a near relation—and, secondly, a suitable person; that is one who is suitably qualified and had sufficient capital, and so on. This amendment would completely take away those safeguards and I cannot believe that from the point of view of the farming community they would welcome it any more, because surely the chief reason why they support this Bill is that it attempts to make tenancies available to applicants who do not have to pay excessive premiums as they might have to do by going through this procedure. I am sorry that I cannot be more enthusiastic.
Lord Stanley of Alderley: I would like to put one more nail in this particular coffin. My noble friend says it would encourage new entrants. I very much doubt it I think that if anybody gets these tenancies they will go to the "agri-business man" helped with my pet hate, the business expansion scheme. I have to tell my noble friend that I really think this is rather a nasty amendment.
Lord Walston: There are many curious bedfellows. It started off with the rather odd combination of the NFU and the CLA and now we find that we have the Labour opposition and the Conservative Benches (possibly even the Conservative Front Bench), even including the noble Lord, Lord Stanley of Alderley, all in the same bed together; and to make it even odder, the Alliance will see if there is any room for them to get in, too.
We feel exactly the same. I am sorry to say so to the noble Earl, but I do not think this is a starter, and it is certainly not a finisher.
Lord Hylton: I am inclined to agree with the noble Viscount, Lord Ridley. The analogy was drawn between commercial and industrial properties and let farms. It might perhaps apply in the case of institutional landlords. I am quite sure that it does not apply in the case of individual private landlords, and particularly resident ones, where the relationship between the landlord and the tenant is of an extremely personal nature. Such people would resist to the last the introduction of total strangers. I do hope that the amendment will be withdrawn.
Lord Northfield: Before I offer just a few words of encouragement to the noble Earl, Lord Caithness, may I say to my noble friend Lord John-Mackie that I apologise if he thought I was accusing him of hysteria? His gentle, restrained and equable character is not one that would attract that sort of accusation at any time. I was really saying that we must not add to the hysteria about institutions that undoubtedly exists outside this Chamber. That is what is worrying me and has worried me for many years.
On this particular amendment, I have a great deal of sympathy with what the noble Earl, Lord Caithness, is trying to do. He is, in fact, challenging a great deal of the basis on which we look at agriculture today. He is asking, "How much longer will we stop it being subject to some commercial forces, in which the market can
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play much more widely and have its effect, its disciplines and some of its rigours as well?" That is a very legitimate question to put to all of us. Why should we treat agriculture rather like housing, with controlled rents, protection and all sorts of things? Why is it not a business?
All the evidence I took in holding this inquiry into land ownership was that farmers were clinging too strongly to these vestiges of the past in wanting to be a sort of protected cottage industry, instead of having the true commercial wind blowing around them and having its good effects.
The noble Lord, Lord Middleton, raised the possibility of assigning to awful people. In the commercial world some people live over shops as well, and the landlord's relationship with people who have shops and homes over them can be quite intimate, just as it is with farming. They do not have any of this sort of protection around them.
But the answer to leases concerning shops is that the lease always says that it is assignable to a proper and respectable person:
"such consent not to be unreasonably withheld by the landlord".
So the landlord always maintains the right to vet somebody taking over a lease of a commercial property, and that sort of thing can be built in as well in the case of agricultural tenancies.
I have enormous sympathy with the noble Earl, Lord Caithness. It is about time that we let a bit more commercial vigour and discipline into this industry, and the noble Earl is on the right track. He will not win now, but I bet he will win in about 10 years' time.
10.48 p.m.
The Earl of Swinton: Until the noble Lord. Lord Northfield, got up, I really thought that I would simply have to get up and say that the Government agree with what everybody else has said. But I see that now I shall have to take a little time. I have, of course, listened most carefully to the reasoning of my noble kinsman, Lord Caithness, in introducing this amendment, but it seems to me—as it does to a number of noble Lords who have spoken in this debate—that the amendment has some highly undesirable features.
I realise that the amendment could stop landlords taking land in hand on the death of a tenant, but against that we must recognise that it would put up considerably the key money element of a new tenancy. This would increase enormously the difficulties for would-be new entrants to the industry and would not make more tenancies available to those without capital. It is thus contrary to the objectives of the Bill.
I think it was my noble friend Lord Ridley who said that he thought this operation would not work. I was going to say that, if this amendment went through, it would probably be a case of the operation being successful but the patient dying. I must agree with other noble Lords that, from the landlord's point of view, this would probably be the absolute death of the landlord/tenant system. It could take away for ever the landlord's right of choice of his tenant. My noble friend said that the landlord could go out and bid to get his own tenancy back. Big deal! Who wants to do that? I certainly should not. To go and buy back something

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that belongs to me anyway would be against all my Yorkshire principles.
There would be no check on suitability—a point that several noble Lords made. The purchaser could be a limited company. The outgoing tenant has no long-term responsibility to the land which would influence his choice of purchaser. All this is certainly not in the interests of farming and would totally undermine the landlord/tenant system. I hope that my noble friend will withdraw his amendment.
The Earl of Caithness: We have had the desired effect of a good debate, anyway. My noble friend Lord Middleton said that this would last for three generations. It would not, because that part of the 1976 Act would be repealed, and therefore it is for the lifetime of that one tenant only. I am grateful for the support of my noble friend Lord Northfield, if I may so call him. He said that the true commercial wind is blowing through agriculture. He is right. It is beginning to happen at long last, but it is going to take some time before they have to face reality. I believe that in 10 years' time something along these lines will have to be brought in. Meanwhile, I withdraw the amendment and look forward to re-introducing it in the next Bill.
Amendment, by leave, withdrawn.
Remaining clauses agreed to.
Schedule 1 [Minor and consequential amendments]:
Viscount Ridley Viscount Ridley moved Amendment No. 62:
Page 13, line 25, leave out from ("following") to end of line and insert ("paragraphs shall be substituted for paragraphs (e) and (f)—").
The noble Viscount said: Perhaps we may get back to the smoother waters of smallholdings. I hope that the two amendments, Nos. 62 and 63, may be taken together.
Amendment No. 63: Page 13, line 40, at end insert—
("(ee) if the holding consists of land held by a smallholdings authority or the Minister for the purposes of smallholdings within the meaning of Part IV of the Agriculture Act 1947 or Part III of the Agriculture Act 1970, and the tenancy was granted by them or him in pursuance of the said Part IV or Part III;".").
The purpose of these amendments is to try to clarify a situation regarding tenancies of statutory smallholdings, to which I have referred before. The 1976 Act intended to make it clear that statutory smallholdings were excluded from the rights of succession to ordinary tenants. I think there is no doubt about that fact. Section 18 of the 1976 Act provides that there shall be no right of succession if a smallholding is let by a smallholdings authority for the purpose of a smallholding in pursuance of the Agriculture Act 1970.
However, there are still in existence smallholdings tenancies—rather more than half—which were let by smallholdings authorities under the legislation which was in force prior to the 1970 Act. It is not sufficiently clear from the provisions of the 1976 Act that these earlier lettings are also to be excluded from succession, although this was the clear intention of the 1976 legislation at the time. Indeed, there have been one or two cases heard in the Agricultural Lands Tribunal which appeared to suggest that on a strict
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interpretation of the law the right of succession in the case of smallholdings lettings prior to 1970 might still arise.
The county councils responsible for smallholdings have over the last two or three years made many representations to the Ministry of Agriculture for suitable amending legislation to make clear that all smallholdings tenancies are outside the succession provisions. The position has been reached that the Ministry agreed to consider the matter when a suitable opportunity arose. I do not think there could be any more suitable opportunity than the present Bill. Indeed, as other noble Lords have said, we might have to wait for ten years for another Bill of this kind.
There was a joint working party consisting of representatives of the NFU, CLA, RICS, MAFF and something called WOAD (which I think is a Welsh Office affair, and nothing to do with the ancient Britons) which put forward proposals for a number of amendments to this legislation which included the very proposal which I am now suggesting. This working party forwarded its report to the Government, suggesting unanimously that all statutory smallholdings should be excluded from the provisions of the 1976 Act; that there was an anomaly in that tenancies granted before the 1970 Act are not now excluded.
In the face of this it was hoped that the Bill would include some provision to take care of this technical point, and it is a pity that it does not do so. I am sure that Ministers wish to avoid complicating this legislation and to avoid stirring the pudding and getting involved in any NFU-CLA dispute. But this is something which I think is agreed by everybody specifically relating to statutory smallholdings only, and I hope that we can look at it in that light.
We had a debate earlier tonight about the farming ladder and the need for statutory smallholdings, all of which I have said before and with every word of which I agree. The noble Lord, Lord Belstead, referred to the need to keep people moving up the smallholdings ladder. But if the succession of three tenancies of smallholdings tenants was to be established, then the farming ladder would cease to exist. Then there really would be serious incentives for smallholdings authorities to sell land, which was the subject of the debate a few hours ago. I beg to move.
Lord Northfield: May I ask a question in the hope that the Minister will reply on this? As I understand the present situation with regard to smallholdings, succession is governed by the Smallholdings (Selection of Tenants) (Amendment) Regulations 1976. What they do is to tell county councils that, although smallholdings are outside the 1976 Act, they should consider certain specified near relatives of the deceased tenant as successors and only to consider other applications when these have proved unsuitable. Is it still the case that the 1976 Act, although not now applying, is continued by these regulations? If that is so, would the amendment overtake the regulations as well? In other words, would we find that those regulations were effectively being annulled? It is important to know where we would end up if the amendment were agreed to.

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I sympathise enormously with what the noble Viscount is trying to do. We want to keep more movement in smallholdings. He is absolutely right, but I direct attention to the sort of recommendations my committee made about compulsory retirement, and all that goes with it, and the possibility of short-term lettings to enable people to make a start on smallholdings. In other words, my second point to the Minister is this. Could we not at Report stage consider all these matters together, and the impact of the general approach of the Bill on the whole of smallholdings? It is a very important issue to include smallholdings in a number of the issues that have been raised in the debates—short-term tenancies, retirement, and all the other matters. It would be right to ask for consultations about the wider impact of the Bill on smallholdings before we reach Report stage.
The Earl of Swinton: If I may deal with the noble Lord, Lord Northfield, first. Basically, yes, he is correct in what he says, but I shall not give any undertaking to consider smallholdings in any great detail before Report.
I am grateful to my noble friend Lord Ridley for proposing the amendment. The question of the possible lack of exemption from three-generation succession on smallholdings tenancies granted under various smallholding Acts prior to the Agriculture Act 1970 has exercised our minds for some time. I hesitated to include in this Bill an amendment to remove the apparent anomaly in this area in view of the fact that, as my noble friend is aware, a case on this very question is currently before the courts. However, I have listened carefully to the arguments put forward by my noble friend and I can confirm that we should be happy to consider his proposal.
I am sure that my noble friend would agree that the wording of his amendment does not go far enough because, although his amendment would close the loophole for tenancies under Part IV of the Agriculture Act 1947, it would leave in doubt the succession arrangements applying to tenancies under smallholdings legislation prior to the 1947 Act. So if he would he happy for us to consider his proposal and to put forward an appropriately worded amendment to cover precisely these points, I hope, perhaps, my noble friend will feel able to withdraw his amendment.
Viscount Ridley: I am extremely grateful to my noble friend Lord Swinton. Did I understand him to say that he would bring forward an amendment at the next stage to cover the technical point I have made?
The Earl of Swinton: Yes.
Viscount Ridley: If that is the case, I am delighted to withdraw the amendment. I beg leave to withdraw.
Amendment, by leave, withdrawn.
[Amendment No. 63 not moved.]
10.58 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 64:
Page 17, line 4, at end insert—
(" ( ) At the end of subsection (1) there shall be inserted the words "and not being a contract of tenancy made after the
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commencement of the Agricultural Holdings Act 1983 under which the said land is let to the tenant by a local authority if the said land was at the date of the said contract held by that authority for the purposes of the Allotments Acts 1908 to 1950".")
The noble Lord said: If I might take your Lordships' minds from smallholdings to allotments, there are many allotments which are administered by parishes throughout the land, and indeed by other local authorities. I am particularly concerned with parishes.
It is the fact that, at the moment, if an allotment is not taken up by the local inhabitants in a given area and is lying fallow, it is convenient for the parish to let it to a farmer to take it on; and that works very well. But if, in due course, somebody comes to live in the parish who would like to take up the allotment—the purpose for which it was originally intended in the arrangements which declared the allotments—then the parish finds it incredibly difficult to get the allotment back from the farmer, who will invoke all sorts of Acts of Parliament—and I am talking very much in shorthand since we have not got much time—so as to hold on to it, in which he is hacked up by the Minister under, particularly, the 1948 Act.
What this amendment seeks to do is, after the passing of this Act—so that it is not retrospective—to remove the definition of allotment from agricultural holdings as described in the 1948 Act. Since I tabled this amendment, there has been an exchange of correspondence both between the secretary for the National Association of Local Councils and my right honourable friend the Minister and also between myself and my noble friend Lord Belstead. My latest letter in this exchange of correspondence with my noble friend arrived yesterday, It is very long and detailed and I have not had time to consult with anybody in the meantime. What I propose to do at this moment therefore is to invite your Lordships to consider that it is really very difficult for local councils—who, one must remember, are quite often officered (if that is the right word) by part-time people who have not got immense experience of administration—to fight their way through against the great bureaucracy which, in local terms, is represented by the divisional officer of MAFF, and to find farmers resisting them and invoking all sorts of things Farmers are much more competent in using bureaucracy than are the clerks of parish councils.
It is really an unfair balance—and I think that my noble friend is aware of this—against the parish which is seeking to carry out the wishes of the original purveyors of the allotments who wanted them to be used for the local inhabitants to till for themselves. It is quite a problem and one to which this amendment is a solution, if it is accepted. I am quite sure it could be improved but I would hope very much that out of this I might get some more relief than undertakings from my noble friend that things will be run better in the future. I should like to see something in this Bill before it leaves us. I hope I shall get a great deal of encouragement but I reserve every right to come back to your Lordships at the next stage of the Bill when I shall have had time to consult with the people who understand these things over the latest letter that I have had from my noble friend, I beg to move.
Lord Hylton: I want to support the principle of this amendment for two reasons. First of all, I know from personal experience that the demand for allotments fluctuates up and down in the most remarkable way. Secondly, where there are occupied allotments next to unoccupied ones there immediately arise problems with weeds. Anything that can be done to control that and make possible interim cultivation is very desirable.
Lord John-Mackie: I have experience of this. I used to rent a farm on the borders of the London borough of Enfield which, at one time, had given off quite a large area for allotments. As the noble Lord, Lord Hylton, says, the demand for allotments goes up and down quite considerably. In this case, more than half of them were not being used. I suggested to the borough officer concerned that I should move the fence back and take into the farm the piece of land that was not being used. He was quite agreeable just to do that without any consideration of the legal side of it, and although I do not agree with the noble Lord, Lord Mottistone, about farmers being better at using democracy than council officials, I could have had that back and probably "played at agricultural tenants" and they would not have got that back. Actually I did not do it, because the demand for allotments started to increase again and it was not necessary. But the noble Lord has a real point in this amendment.
Lord Belstead: I agree with noble Lords who have spoken, and indeed with the noble Lord, Lord Hylton, who specifically made the point that the numbers of allotments which are in occupation seem to increase and decrease in a sort of cyclical way. I have observed that myself. But the problem with this amendment is that, by taking allotment land out of the scope of agricultural holdings legislation, as my noble friend Lord Mottistone proposes, allotment organisations could find it much more difficult to regain possession of their land. This is because the arrangements between the organisations and farmers would then be covered by the provisions of the Landlord and Tenant Acts of 1927 and 1954.
Of course, the interests of tenants are very' well guarded under those Acts, but since agricultural holdings are specifically excluded from that provision none of the special circumstances in which the landlord can regain possession are likely to be particularly helpful to the allotment organisations under that legislation. In particular, it would not be possible to regain possession, which is what the noble Lord would wish to do. I think therefore we really need to tackle this in another way, and my right honourable friend has the power under Section 2 of the 1948 Act to give his approval to the letting of agricultural land, not being a letting of the land of a tenancy under the Act from year to year.
I know perfectly well (and I will speak in shorthand, if I may) that my noble friend is concerned that this has not been perhaps the smoothest of operations in the past. That is my noble friend's contention; and I would like to assure him that if a local authority requests a Section 2 approval from the Ministry of Agriculture to cover the short-term letting of allotment land for agricultural purposes in the future, the request would be sympathetically considered.
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Indeed, I give an assurance to my noble friend that we will issue specific instructions to our local Ministry of Agriculture offices in order to overcome any problems which might arise in connection with allotment land. Therefore, I hope that my noble friend, on reflection—because I think he feels he would like to read this, with interested parties, to see what has been said—will feel that the Section 2 procedure may be the way to proceed.
There is one last thing I ought to say. Where a local authority wishes to make temporary arrangements which are expected to last longer than could be dealt with by the Section 2 procedures, the agricultural holdings legislation still provides a way for them to regain possession if they wish to return the land for use as allotments. This would require them to seek the consent of the Agricultural Land Tribunal for the operation of a notice to quit under the 1977 Act. One of the grounds under which the tribunal is required to give its consent is where the land is required for the purpose of the enactments relating to allotments. I have to say that this means going through a tribunal hearing, but this, of course, is necessary' in the interests of both parties if they are to be properly protected when longer-term arrangements are made. I hope that is helpful. I know that my noble friend will reserve the right to come back again if he feels he needs to. I hope he will not.
Lord Mottistone: I am most grateful to the noble Lords, Lord Hylton and Lord John-Mackie, for their general support of the concept. I am sure my noble friend Lord Belstead will realise that, although I appreciate very much the administrative measures that he will take to try to overcome this difficulty within the existing framework of law—and it goes some way towards what we want—it might be that we shall come back again if we can find a way through that looks more acceptable. There is something to be said for having a provision underpinned by law which could reduce the amount of dealings which part-time clerks must have with officials, who are very experienced in organising things in the direction in which they want to go. So I have a basic underlying feeling that there may be room for doing so here. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.10 p.m.
Viscount Dilhorne Viscount Dilhorne moved Amendment No. 65:
Page 17, line 24, at end insert—
(" . After section 2(1) of the 1948 Act the following subsection shall be inserted—
" (1A) The Minister may on the joint application of the persons who will be the landlord and the tenant in relation to a tenancy of an agricultural holding to be granted for a term of years certain not exceeding five years approve an agreement excluding in relation to that tenancy the provisions of section 3 of this Act, if the agreement is contained in or endorsed on the instrument creating the tenancy; and an agreement contained in or endorsed on an instrument in pursuance of the Minister's approval shall be valid notwithstanding anything in the provisions of this Act".")
The noble Viscount said: I propose to move this amendment in place of my noble friend Lord Renton. And may this amendment be taken with Amendment No. 71, which relates to it?
Amendment No. 71: Page 25, line 23, leave out sub-paragraph (6).
The proposed amendment is totally non-partisan. It merely tries to put on a workable legal basis what is already contained in the Act and the policy statement that is set out in a letter from the Ministry dated 22nd July. The policy, as I understand it, behind ministerial approval to a contract which does not get converted into a tenancy on a year-to-year basis has never been clear and has never been consistently applied.
Furthermore, the attitude of regional offices of the Ministry differs considerably in different parts of the country.
I understand that the policy is that an increase from three to five years in the period for tenancies, granted under the Minister's discretion under Section 2 of the 1948 Act, in relation to trial tenancies or where a landlord's son or daughter is expected shortly to take over a vacated tenancy, can be implemented administratively without legislation. I intend to speak fairly quickly because of the hour, and I have cut down a great deal that I had proposed to say. I submit that it is unsatisfactory that this policy should be kept on an administrative basis, because it has never been applied consistently.
The nub of the legal argument is this. The Minister has power to approve a contracting-out arrangement for a licence of any duration—now up to five years—or a tenancy for an interest of less than a year-to-year basis. That can he seen from Section 2(1) of the Act. But he does not have power under present legislation to approve a tenancy of more than a year, although he can approve a licence of any duration. The difficulty, as a matter of law, is to draft a genuine licence that will last as long as five years. Any documents purporting to be a five-year licence are almost certain to be construed as a tenancy in the courts.
The Ministry is therefore advertising that it is going to adopt a policy of approving five-year licences which it is improbable that any sensible lawyer will advise a client, particularly a landowner, to sign. That is a sincere and real criticism of the present system and one which would be easily overcome by the proposed amendment. We say that the new policy is to allow a contracting-out of tenancies up to five years, with the Ministry's approval. That will enable lawyers to avoid drafting tortuous and convoluted documents in the hope that they will be construed as licences rather than tenancies. They can prepare a straightforward and honest tenancy agreement that can be put before the Minister for his approval as a tenancy. If exemption is to be on a proper basis—a proper basis being, I hope, the one that I am submitting—it will give the landlord and the tenant more confidence in the contracting-out system which the Minister is, I hope, proposing to operate. The word to emphasise is "tenancy". Without enactment, the policy of approving a five-year agreement which claims to be a licence will, in my opinion, lead to much litigation and great uncertainty—which we hope my noble friend the Minister will agree can be avoided by this amendment.
In this debate, various references have been made from both sides of this Committee—and, in fact, from the Division Lobby itself—to the personal interest which lawyers have in legal confusion. I hope this is one of many examples of responsibly-minded lawyers attempting to reduce disputes rather than encourage them. I beg to move.
Lord Prys-Davies: May I just get one point clear? Is the noble Viscount saying that because there are difficulties in drawing up a licence for a five-year duration, that the legislation ought to provide for a fixed-term tenancy of up to five years—because that would get around the technical difficulties of drafting a licence?
Viscount Dilhorne: The noble Lord, Lord Prys-Davies, is absolutely right. At the moment, one cannot really draft an agreement for a five-year licence without it being turned into a tenancy. So, if one has a tenancy for five years, one will overcome that difficulty.
Lord Prys-Davies: So the tenancy for a fixed term of five years drawn under this section would be deprived of any protection given by the Agricultural Holdings Act?
Viscount Dilhorne: I am slightly at a loss to know how exactly to answer the noble Lord's question accurately. What it would do is to give the tenant considerably more security than the tenant would enjoy by having a licence that is in fact a tenancy. It does improve his position under this particular section.
Lord Prys-Davies: In the sense, presumably, that he will have occupation of that land as a tenant for five years, and that will be indisputable?
Viscount Dilhorne: That is right.
Lord Belstead: My noble friend Lord Dilhorne has explained—at least, I think he has explained—that this amendment is designed to introduce much greater certainty where a landlord grants a short-term licence which has been subject to the Minister's prior approval under Section 2 of the Act. The Minister's approval is only given in fairly closely-defined circumstances in which it would be unreasonable to grant a full agricultural tenancy, where the land is shortly to go out of agriculture.
My noble friend's amendment would not change those limited circumstances in which approval is given but, as I understand my noble friend, it would remove the danger that the licence could in law be construed as creating a full agricultural tenancy.
I should like to look very carefully at the drafting of this provision. The reason that I said I believed my noble friend had explained the amendment was not a discourtesy to my noble friend in respect of his opening remarks but because of the quick exchange between the noble Lord, Lord Prys-Davies, and my noble friend, which I should like to read in Hansard afterwards.
If the amendment does indeed have the effect which I am advised we believe it has, I can confirm that the Government have a very great deal of sympathy with the objectives of my noble friends Lord Dilhorne and Lord Renton, in whose names the amendment is. I should like to give my noble friend an assurance that we shall consider very carefully the point which has been made. I feel that I cannot accept the amendment

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as it stands because I should like to study closely the exchange between both noble lords.
Before I sit down, I understood my noble friend Lord Dilhorne to say that he was moving at the same time Amendment No. 71: was he speaking also to Amendment No. 71?
Viscount Dilhorne: That is so. I was speaking also to Amendment No. 71, which would leave out subparagraph (6) on page 25, which reads:
"(6) In paragraph 6, for the word `twenty-eight' in both places where it occurs there shall be substituted the word 'thirty-five' ".
Lord Belstead: I am grateful to my noble friend. With respect to him, I am not entirely sure that Amendment No. 71 really goes with Amendment No. 65. However, as I have the Chief Whip sitting only a few yards away, I think it is almost as much as my life is worth not to take two amendments together, if we can possibly kill two birds with one stone.
I should like to say that this is the period of time which is allowed for the submission of statements of case. The Government thought they were being really rather sensible and generous in extending the period of time from 28 days to 35 days. But earlier on in the afternoon—it may have been before my noble friend came into the Chamber—the noble Lord, Lord Renton, moved an amendment in which he asked that Schedule 6 to the 1948 Act should be subject to rules made by my noble and learned friend the Lord Chancellor: and after parading some of the reasons why the Government were reluctant to agree to that, I finally agreed on behalf of the Government to go away and discuss this with the Lord Chancellor. Therefore, I think perhaps Amendment No. 71 ought to be left there.
Viscount Dilhorne: I am greatly indebted to my noble friend. He is of course completely right. All I can say is that, looking at the hour, I can only hope for forgiveness for having raised the matter. I was here and spoke to the amendment of my noble friend Lord Renton in the same terms as those which he used, so I am guilty of having contradicted myself quite without thought. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 66 had been withdrawn from the Marshalled List.]
The Earl of Swinton The Earl of Swinton moved Amendment No. 67:
Page 18, line 10, after ("Act") insert (" (provisions for securing written tenancy agreements) ")
The noble Earl said: With permission, in moving Amendment No. 67 I should like to speak also to Amendment No. 72.
Amendment No. 72: Page 28, line 3, leave out ("the 1977 Act") and insert ("that Act (reduction of rent where notice is given to quit part of holding) ")
I am sure these amendments are obvious to the Committee. They correct omissions in the text of the Bill. Amendment No. 67 inserts in paragraph 8 of the schedule an explanation of the subject matter of Section 5 of the 1948 Act. which it amends. Similarly,
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Amendment No. 72 inserts in paragraph 44 of the schedule an explanation of the subject matter of Section 10 of the 1977 Act, which is amended by that paragraph. I beg to move Amendment No. 67.
On Question, amendment agreed to.
The Earl of Swinton The Earl of Swinton moved Amendment No. 68:
Page 19, line 14, leave out first ("and")
The noble Earl said: This amendment corrects an error in the text of the Bill by deleting the superfluous word "and" in line 14 of paragraph 10. I beg to move.
On Question, amendment agreed to.
Viscount Dilhorne Viscount Dilhorne moved Amendment No. 69:
Page 19, line 28, at end insert—
(" .—

(1) Section 11 of that Act (tenant's rights as respects disposal of produce and cropping or arable land) shall be amended as follows.

(2) In subsection (4)(a) after the word "or", where it first occurs, there shall be inserted the words "in cases where a valid notice of less than twelve months is given in accordance with section 1(2) of the 1977 Act".

(3)The following subsection shall be inserted after subsection (4) —

"(4A) The landlord shall not unreasonably refuse his consent to proposals by the tenant for the cropping of arable land during the periods of restriction mentioned in paragraphs (a) and (b) of subsection (4) above and any dispute arising as to the reasonableness of a refusal of consent shall be determined by arbitration under this Act.".")

The noble Viscount said: Under Section 11 of the 1948 Act there is freedom of cropping. Freedom of cropping is taken away from the tenant after he has received a notice to quit. As at present worded, the second limb of Section 11 (4)(a) states:
"any period after he has given or received notice to quit which results in his quitting the holding".
Therein lies the question: are the words "any period" to be taken literally? If they are, and no brake is applied in the statute, there is no maximum period for serving the notice to quit. This question has never been resolved, and it has perplexed textbook writers (I am told, I not having been alive then) since 1908.
This amendment works to take away freedom of cropping in the last year only. There are three summarised matters. The first deals with the situation where the landlord has served a long notice, and in the new subsection (4A) it gives the tenant the right to take to arbitration the landlord's refusal to grant consent to the tenant's cropping proposals during the period of notice. The second deals with certain cases where a valid notice of less than 12 months is given. The insertion of subsection (4A) will restrict the freedom of cropping during the period of notice only.
The third point is to enable the tenant to challenge by arbitration a landlord's unreasonable refusal, if it is, to allow cropping where the period of notice is greater than 12 months. These last two matters go very much together and work neatly into the statute as it now stands. If the amendment is read with the statute I submit that what is not very apparent from what I have said then becomes clearly apparent. I shall say no more. It is a complicated legal provision. It is meant to be non-partisan and I hope that my noble friend will consider it. I beg to move.
Lord Stanley of Alderley: All I would say to my noble friend is that he is a lawyer but not a farmer. I suspect that the amendment is totally impractical because by the time one has gone through the process I suspect my noble friend wants us to go through, the tenant will have gone anyhow.
The Earl of Swinton: This amendment has at first sight a good deal to recommend it, and indeed the last part was an agreed proposal of the Ministry-NFU-CLA-RICS Working Party. However, as my noble friend Lord Stanley of Alderley said, on close examination practical difficulties over timing make the realisation of this proposal difficult. In the case of some tenancies, particularly Michaelmas tenancies, there may well be insufficient time for the tenant to make proposals for cropping in the final year, for the landlord to have a chance to consider them and for an arbitration to be arranged and take place (bearing in mind that 28 days must be allowed for delivery of statements of case alone) unless the notice to quit is given well ahead of the beginning of the final year of tenancy. But I believe that the landlord will usually, for the sake of good relations, delay giving notice until the last year is about to begin. It is likely therefore that the crops will often have to be planted—I am thinking particularly of winter wheat, barley and oil seed rape—before the arbitrator can make his award. This leaves the only remedy as monetary compensation for the tenant should his proposals be upheld, which is not a matter referred to specifically in the amendment, and which may seem a rather severe penalty for a landlord who has done no more than rely on the terms of the tenancy agreement (albeit perhaps an old-fashioned one).
Alternatively, a tenant would have to go ahead with his substitute cropping plan without knowing the result of the arbitration. I also feel sympathy with the first part of the amendment, but again I think it may prove difficult in practice not to deal with the last year of tenancy as a whole. While, therefore, I agree that this is in principle a worthwhile amendment, I feel that practical factors make it very difficult to realise in a way which is free from difficulties. May I, therefore, as a practical farmer, beg my noble and nearly learned friend, as a lawyer, to withdraw his amendment.
Viscount Dilhorne: I thank my noble friend for his answer. I should, however, like to have the opportunity to consider it rather more fully when it is published in Hansard. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 70:
Page 19, line 40, after ("(4A)") insert ("Failing mutual agreement")
The noble Earl said: This is a minor amendment to encourage the landlord and tenant to agree matters without any dispute. I beg to move.
The Earl of Swinton: While I applaud my noble kinsman's search for clarity in legislation, I feel that the present wording in the Bill is clear enough. Surely, if the landlord and tenant agree, there is no dispute, and therefore no need for arbitration. I hope my noble friend will withdraw his amendment.
The Earl of Caithness: I certainly will do so. The reason for the amendment was that we regularly have these words in agricultural Acts and I thought that they were suitable on this occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.29 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 70A:
Page 20, line, 1 leave out paragraph 12.
The noble Earl said: I understand from paragraph 12 that, except for ground game, the tenant could claim for any crop damage caused by any other animals or birds whatsoever, unless he has been given permission in writing to kill them. I believe that the working party has missed a point here. What happens when, for instance, a farmer living in Norfolk near the Wash suffers crop damage from geese which have suddenly arrived in large numbers but which move on again a short time later? Is the landlord to be blamed for that? Furthermore, if he raises a large number of greylag geese and they eat the tenant's crop, is the tenant entitled to claim? As I read the Wildlife and Countryside Act 1981, these birds, being reared, are not classified as wild. I beg to move.
Lord Belstead: As the notes on the schedule make clear, we have replaced the word "game" in Section 14 of the Agricultural Holdings Act 1948 with the words,
"any wild animals or birds".
This is because game as defined in Section 14(4) of the Act is restricted to deer, pheasants, partridges, grouse and black game. It is a definition which indeed, as my noble friend has just said, excludes, for example, geese.
My noble friend has given me an example of a tragedy which might occur in north Norfolk. He gave me notice that he would put this point. My answer is this. In the first of my noble friend's examples—the geese arriving as if from nowhere—I think it would be only if the landlord kept the right to take geese to himself that the tenant would be entitled to compensation. If the tenant were free to protect his crops by, for instance, shooting geese, clearly the landlord would not be liable to pay compensation.
In the second example which my noble friend put forward—which is what the remedy would be for the tenant if he suffered damage from geese which the landlord was rearing—I think that the first answer would cover the matter again. Presumably the geese are still wild. However, if they were to be termed domestic in my noble friend's example, of course the tenant could pursue the landlord, or anyone else to whom the birds belonged, for damages under the common law, because that would be a matter for the courts.
The Earl of Caithness: I am grateful to my noble friend for that answer. I am concerned about a landlord being liable for crop damage in my instance of a large number of geese coming in. I think that this is something I should like to look at again from a conservation point of view. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 70B:
Page 25, line 10, at end insert ("who shall immediately notify the parties in writing of the appointment." ")
The noble Earl said: The purpose of this amendment is to record within the legislation what is already standard practice in both the Ministry of Agriculture, Fisheries and Food and the Royal Institution of Chartered Surveyors where they appoint an arbitrator under the Agricultural Holdings Act. Nevertheless, it is no more than practice and I think the provision needs to appear in the legislation for the protection of all the parties. It should be remembered that the Richards v. Allinson county court ruling will no longer apply and the parties now have 35 days from the date of the appointment in which to submit their statement of case. Therefore I regard the amendment as a question of justice being seen to be done. It will not alter the existing practice in any way. I beg to move.
Lord Belstead: These are matters of administrative detail which it would be unusual to enshrine in legislation. Indeed matters have worked perfectly well for many years, as my noble friend very fairly implied in his remarks. But I owe it to my noble friend to give an assurance which will go into Hansard that the Ministry of Agriculture, Fisheries and Food and the Welsh Office agricultural department will continue to notify both landlord and tenant of the arbitrator's appointment. Furthermore, the arbitrator will himself be instructed that on receipt of his letter of appointment he is to notify the parties immediately of the date by which their statements of case are to be submitted. I hope therefore that my noble friend may feel able to leave the matter at this. That is quite a mouthful, and we should prefer not to start putting it all in legislation. I hope that the reassurance which I have given on behalf of the Government, and which will now go into the official record, will satisfy my noble friend.
The Earl of Caithness: I am most grateful for that reply from my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 71 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 71A
Page 27, line 11, leave out paragraph 39.
The noble Earl said: I was more than slightly surprised to find paragraph 39 in the Bill. In fact, my attention was drawn to it by a number of arbitrators and senior members of the RICS, who pointed out how inequitable is the paragraph. Was it really the Government's intention to give further preferential treatment to tenants who are already privileged by succession? Did they really mean to say, "Not only, if you are eligible and suitable, can you inherit a tenancy to the exclusion of others who would like the opportunity, but now you can succeed at a sitting tenant rent rather than at a market rent"?
I believe this to be a ludicrous situation, and there is no more sure way of depressing rents and killing off the landlord-tenant system for good than is contained in the paragraph. I should like to ask my noble friend
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why a successor should not be asked to pay the open market rent on succession, when a third party tendering for a tenancy has to do so?
It was this paragragh which led me to investigate the cost of agriculture and the benefits which a tenant, as a farmer, already receives. I shall not list them, but with the benefits of exemptions from rates, VAT, CTT, as well as new plant and machinery allowances and the net cost of the CAP, I calculate—and this is being generous to the tenant—that we subsidise each tenanted holding in this country to the tune off 15,000 per annum. I consider that to be a rather substantial sum of money. Despite their advantages and subsidies, the tenants are now being further mollycoddled by the Government, who wish to place a burden on the landlord to give a further subsidy by way of rent. I do not think that that is either right or fair. I beg to move.
Lord Belstead: I must disagree with my noble friend that the Bill is in any way giving further preferential treatment to tenants. At present a succession tenant is treated in exactly the same way as any other sitting tenant when he succeeds to a tenancy. The open market rent formula in Section 8 of the 1948 Act is the basis on which the rent is established in both cases, and we are proposing that exactly the same principle should apply when the present Bill is brought into effect. If that is agreed, succession tenants would therefore continue to be treated as sitting tenants.
As I tried to demonstrate in a debate on Clause 1, the purpose of the clause is to do no more than give statutory cover to arbitrators' current practice. Under the present arrangements an arbitrator determines the rent for a succession tenant in the same way as he does for a sitting tenant. If for this purpose the arbitrator disregards any key money element, he is treating both types of tenant similarly.
The new rent formula that we are proposing is not designed to raise or to lower the levels of rent set at arbitration. The paragraph to which my noble friend is drawing attention—paragraph 39—will simply ensure that succession tenants will continue to have applied to them the same rent provisions as will be applied to sitting tenants. Therefore, with respect to my noble friend, there is nothing new in this.
However, the amendment that my noble friend proposes would try to introduce a new concept, though it is a little difficult to see how it would work in practice. The rent formula in Clause I would apply to sitting tenants, but the amendment would seek to apply the existing rent formula to succession tenants. If arbitrators continued with their existing practice, this change would have no effect. But if this amendment was made and provided for two quite different formulae, one for the sitting tenant, one for the succession tenant, because that is what it does, arbitrators might then feel obliged to assess a key money element in the latter case. There would be practical difficulties in doing this but, more importantly, it really would introduce a new and highly contentious principle that would apply in the event of succession. We would therefore be changing the rules on succession and we could be charged with doing so retrospectively. For the reasons that I advanced in debate on Clause 2, which I shall not

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repeat now, I would not wish to do this. I would therefore ask my noble friend to reconsider this amendment.
The Earl of Caithness: I think that I may have misunderstood the purpose of the paragraph. The point that I am not clear about is this. When there is a succession, is that a new tenancy? If it is a new tenancy, why should not the successor pay his first rent open market and then the rent clause apply? If you say to the landlord that he must let the farm, he goes to the market and a tender rent, on the evidence that we have got to date, would be above a sitting tenant rent. It seems to me, therefore, that if the Government are saying that the successor, on the first rent, when he takes over the holding, has to pay a sitting tenant rent and not a tender rent, the landlord suffers. Am I right?
Lord Belstead: The short answer to my noble friend is that it is because this is the way that it has been done. At present, a succession tenant is treated as a sitting tenant for the purposes of rent, but if the arbitrator was to apply the provisions of the existing law with full vigour, this would make no difference. The rent would be the open market rent, key money and all. In practice, however, as we know, because we have said it so many times, arbitrators do not do this. Instead, they have regard to other factors. But if I may come hack to the real answer to my noble friend's question, it is so because it has been so for many years. We do not intend to change this retrospectively.
The Earl of Caithness: I do not wish to prolong this discussion, but I reserve my right to bring the matter hack at a later stage because I think that there is a point here. If we have got it wrong in the past, perhaps now is the time to correct it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Swinton The Earl of Swinton moved Amendment No. 72:
[Printed earlier: col. 223.]
The noble Earl said: I have already spoken to this amendment with Amendment No. 67. I beg to move. On Question amendment agreed to.
Schedule 1, as amended, agreed to.
Schedule 2[Enactments repealed].
[Amendment No. 72A not moved.]
Schedule 2 agreed to.
Schedule 3 [Transitional Provisions and Savings]:
Lord Belstead Lord Belstead moved Amendment No. 73:
Page 30, line 30, leave out ("Subsection (5A) of that section, as so amended,") and insert ("In section 18 of the 1976 Act, as amended by this Act, subsection (5A) ")
The noble Lord said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to
Lord Belstead Lord Belstead moved Amendment No. 74:
Page 33, line 2, leave out ("or 2 to this Act so far as relating") and insert ("to this Act, or in the repeals made by this Act, so far as relating (in either case) ")
The noble Lord said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Schedule 3, as amended, agreed to.
House resumed: Bill reported with the amendments.
House adjourned at a quarter before midnight.