Lords Sitting of 25 July 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 Chichester.
Several Lords—Took the Oath or Affirmed.

Shipyards: Delivery Dates
The Earl of Lauderdale: 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 that British shipyards building vessels and rigs for use on the Continental Shelf are matching foreign competition by keeping to promised delivery dates.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, of 19 deliveries of vessels and rigs for offshore use in the last 12 months, three have been early, six on time and six within one month of the due date. Two were two months late and a further two were more than two months late. There is clearly room for improvement, and British Shipbuilders are devoting their efforts to this end.
The Earl of Lauderdale: My Lords, I thank my noble friend for that informative reply. May I ask him whether he is aware that there are several shipyards, notably on the Lower Clyde at Cammell Laird and elsewhere, where there are still very serious delays—in one case of a year and in another case of eight months? He will no doubt be drawing his industrial friends' attention to these matters.
Lord Cockfield: Yes, my Lords. I am aware of the facts to which my noble friend refers, and British Shipbuilders are, or course, taking every effort to ensure the best possible performance.

Employment and Training Schemes: Expenditure
2.37 p.m.
Baroness Elliot of Harwood: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement concerning their current spending on special employment and training measures and whether they will state the number of places currently occupied in these schemes.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, we estimate that in 1983–84 almost £2 billion will be
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spent on the special employment and training measures run by the Department of Employment and the Manpower Services Commission. At the end of May, the total number of people covered by the special employment and training measures was estimated to be 561,000.
Baroness Elliot of Harwood: My Lords, I thank my noble friend very much for his reply. and I am glad to hear that the schemes are going so well. I hope they will be pressed on with, particularly those in regard to the technical training of young people. I also hope very much that the Government will pursue these with vigour.
The Earl of Gowrie: My Lords, I am grateful to my noble friend, and I should like to say to her that expenditure on special employment and training measures will rise substantially in 1983–84. Major initiatives include the Youth Training Scheme, which I mentioned, and also the Community Programme, which began last year and which will cost about £400 million in 1983–84.
Lord Hawke: My Lords, can my noble friend say to what extent the trade unions accept these young person as qualified after they have passed through these schemes?
The Earl of Gowrie: My Lords, the Manpower Services Commission is, of course, a tripartite body. Therefore, I am glad to be able to say that the great trades unions of the country are wholly behind it.
Lord Underhill: My Lords, may I ask the noble Earl the Minister two questions? First, will he confirm that he has seen the recently published report of the Manpower Services Commission, particularly paragraph 2.10, which states that as a result of these special measures some 365,000 persons have been taken off the list of unemployed? Will that factor be taken into consideration when the Government are referring to unemployment figures? Secondly, there have been allegations that some of the training schemes have been used for cheap labour. Is this being monitored, and what action will the Government take?
The Earl of Gowrie: My Lords, on the second part of the noble Lord's supplementary question, because the Manpower Services Commission works closely with the commissioners and because the commissioners have senior trade union representation, the question of substitution of that kind is carefully monitored by the commission. On the first part of the noble Lord's supplementary question, as I have said very frequently in your Lordships' House we are passing through a new industrial revolution and this is about training for the future.
Lord Hunt: My Lords, would the Minister tell the House what proportion of the total number of 16 and 17 year-olds who are currently unemployed is represented by the figures which he gave to the noble Baroness? Secondly, does he recall that the Youth Task Group, which presented its report in April last

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year, forecast that by September 1984 57 per cent. of the 16 year-olds at that time and 48 per cent. of the 17 year-olds would be unemployed? Is the Minister confident that this scheme, which I greatly admire, will cater for the majority of those people?
The Earl of Gowrie: My Lords, there is no question of a training scheme—and this is precisely what the present scheme is—being able to guarantee people employment at the end of it. As the noble Lord will be well aware, that will depend on all sorts of factors, both national and international. But I am confident that the young people who pass through this scheme will be a great deal more employable than they otherwise would be.
Lord Wells-Pestell: My Lords, is the noble Earl the Minister in a position to give the percentage who succeed in finding work within a given period, such as three months or six months?
The Earl of Gowrie: My Lords, I should be delighted to do so, but I would need other notice of that.
Baroness Seear: My Lords, does the Minister agree that, so far as the Youth Training Scheme is concerned, it is a foundation year and therefore the question of whether they are qualified does not really arise?
The Earl of Gowrie: My Lords, I certainly agree with the noble Baroness.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister whether it is the policy of the Manpower Services Commission to support voluntary organisations wishing to set up training workshops? Is the Minister aware that in several parts of England the training workshops have not been supported by the Manpower Services Commission?
The Earl of Gowrie: My Lords, if my noble friend will give me details of any areas where there have been these difficulties, I shall do my best to iron them out.
Lord Cledwyn of Penrhos: My Lords, while recognising the contribution that these schemes make and welcoming them for that purpose, would the noble Earl agree that there is also a danger that they tend to mask long-term unemployment? Could he tell the House whether or not it is true that, of the 600,000 who are currently leaving school, in the longer term two out of three of them have no prospect at all of work, or of permanent work?
The Earl of Gowrie: My Lords, the latter figure would be much too gloomy an overall prediction about the state of the economy, both at home and abroad. But it is certainly the case that there is great awareness, both on the part of the trainees and on the part of people generally, that, as the noble Baroness said, a training scheme of a foundation character will not of itself guarantee employment. The aim of the game is to lessen the odds against young people—and the odds are very considerable all over the Western world at present.
Lord Kilmarnock: My Lords, can the noble Earl tell the House whether it is correct that there are over 100,000 young people in the young workers' scheme at the moment who are receiving absolutely no training at all? Have the Government any plans in that respect?
The Earl of Gowrie: My Lords. I am certainly not aware of that figure. It sounds very improbable to me.
Lord Morris: My Lords. will my noble friend agree that if anybody has any doubts about the resolution of Her Majesty's Government in regard to this matter they should look at the figure of£2 billion as a measure of their determination to tackle this question?
The Earl of Gowrie: My Lords, I do not believe that all the problems in this economy can be solved by public money, but I do believe that it is the duty of the Government and of the state to try to ease people through a very difficult transitional period both in their own lives and in that of the economy in which they are liable to be seeking work.
Lord Beswick: My Lords, would the noble Earl also agree that if anybody is disposed to draw satisfaction from the amount of money which is being spent on these schemes they should reflect on the fact that there would be fewer people on the labour market if there had been more purposeful and constructive public investment in the first place?
The Earl of Gowrie: My Lords, that seems to be a very ill-considered response from the noble Lord, Lord Beswick. He is known to have supported a Government which took the first steps in this direction. We have sought to build on those steps and to improve upon them.
Lord Glenamara: My Lords, is the noble Earl aware that in the view of many of us the Government are to be congratulated upon what is being achieved under these schemes but that in an area like the North of England, which has the highest unemployment in Britain, what is being achieved under these schemes is being cancelled out many times over by the Government's appalling policy towards the local authorities? Is the noble Earl also aware that £28.8 million is being withdrawn from the grants to the four northern counties this year—counties which are trying to make an impact upon the appalling social and economic problems with which they are faced? What the Government are doing is therefore being negatived and cancelled out by their policy towards the local authorities.
The Earl of Gowrie: My Lords, while welcoming the praise which the noble Lord gave to the Government before his qualification, I am sorry that he then proceeded to spoil things. The fact is that I do not believe that anyone on either side of the House seriously believes any more that one can solve the problems of employment opportunities for young people by "upping" central subvention to local authorities. That is no longer, I believe, a credible position.
The Countess of Mar: My Lords, could the noble Earl the Minister say whether there is any truth in the reports in the press that NALGO and the CPSA are refusing to co-operate with the Youth Training Scheme because young people are not being paid enough?
The Earl of Gowrie: My Lords, I should need notice of the question which the noble Countess has asked me. I shall attempt to find out.

Land in Public Ownership
2.46 p.m.
The Earl of Kinnoull: 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 progress has been made over the last four years in the disposal of surplus publicly-owned vacant land; and whether a collective census of unused publicly-owned land has been programmed showing the amount of such land still held and the amount that is classified as surplus to requirements.
Lord Skelmersdale: My Lords, I regret that the information is not readily available in the terms requested, but I can inform the House that, between April 1979 and March 1983, the proceeds from sales of Government, new town and water authority land amounted to £870 million. As to the second part of my noble friend's question, the information for England is to be found in the registers of unused and under-used land published under the Local Government Planning and Land Act 1980. These contain nearly 12,000 sites covering about 110,000 acres, including land surplus to requirements. Six similar registers are being compiled for Wales. The provisions do not extend to Scotland.
The Earl of Kinnoull: My Lords, while I thank my noble friend for that helpful Answer, can he say what proportion of land on the registers is suitable for house-building?
Lord Skelmersdale: My Lords, an analysis of a sample of registers suggests that about one-sixth of the total is specifically suitable for house-building. This means 2,000 sites and 18,333.3 recurring acres.
Lord Davies of Leek: My Lords, may I ask the Minister what the phrase "surplus to requirements" means? Who decides "requirements"?
Lord Skelmersdale: My Lords, in the first instance, the owners of the land decide requirements. It could be that there are very valid reasons for land being under-used or totally unused—for example, buffer zones round mental hospitals or prisons, or rather wide embankments along railway lines. In the second instance, should my right honourable friend the Secretary of State decide that these reasons are not valid, he has the power to direct disposal, but only after first informing the owner that he intends so to do.
The Earl of Lauderdale: My Lords, since my noble friend has referred to British Rail, can he say whether he has a figure for the acreage of land still sterilised by British Rail?
Lord Skelmersdale: No, my Lords, I regret that I have not.
Lord Hawke: My Lords. can my noble friend say whether the system still prevails which used to prevail—that when a department wished to sell a single acre of land to anybody it had to pass the news round to every other department to find out whether they wanted it before it went on the market?
Lord Skelmersdale: No, my Lords. This was so up to June 1979, but that scheme was abandoned in favour of the current scheme which we are now discussing.
Baroness Gardner of Parkes: My Lords, can the noble Lord the Minister assure us that any land in the green belt which is considered to be surplus to requirements will still remain carefully controlled and protected as part of the green belt?
Lord Skelmersdale: My Lords, planning restrictions obviously apply to the use of this land. It is just the fact that it is unused or under-used which is currently concerning my department.

Atlantic Salmon: Protective Legislation
2.49 p.m.
Lord Chelwood: 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 why they have not legislated to protect the Atlantic salmon, which is now seriously threatened by illegal and uncontrolled methods of fishing; what countermeasures they are considering; which they regard as practical; and whether they will introduce legislation in this Parliament.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, legislation already exists to protect the Atlantic salmon in Great Britain where, in general, it is an offence to take salmon without proper authority. However, in the consultation paper on our review of inland and coastal fisheries, published in 1981, we sought the cooperation of salmon interests in putting forward proposals to deal with the illegal catching of salmon. My honourable friend the Minister of State announced in another place last Thursday that as a direct result of our consultations the National Water Council had now published the report of their Salmon Sales Group, Salmon Conservation—A New Approach. The group itself has recognised that considerable problems remain before their proposals can be given practical application. However, we welcome the report and will be consulting the group and the other interests concerned to see whether the proposals provide a practical basis for legislation to deal with the problems now affecting our stocks of Atlantic salmon.
Lord Chelwood: My Lords, is my noble friend aware that that is a very disappointing Answer which seems to show no sense of urgency at all? May I ask him, first, whether the Government accept that salmon—which is a very valuable national asset—is now at serious risk? Secondly, is he aware that the use of poison and monofilament gill nets is on an extremely large scale and is doing a great deal of damage, but that the punishment does not seem to fit the crime? Is my noble friend further aware that, as proof of how serious the decline in Atlantic salmon appears to be, figures seem to show that licensed netsmen in Scotland in the last decade have seen the tonnage caught decline by very nearly 50 per cent.? Is this not a really serious matter, which previous Governments have shirked? Are we not prepared to face up to it?
Lord Belstead: My Lords. I entirely agree with my noble friend Lord Chelwood that there is undoubtedly evidence of illegal catching of salmon and that it is on a substantial scale. I can assure my noble friend that the Government are well aware of the need for prompt action. We shall consult urgently with representatives of importers and wholesale and retail distributors, as well as with salmon fishermen and farmers, to seek their views on the Salmon Sales Group's report.
Baroness White: My Lords, can the noble Lord the Minister tell the House—particularly in regard to Wales, since salmon from Wales is as fine a delicacy as salmon from Scotland—what is to happen to the group to which he referred, which is studying this matter, following the demise of the National Water Council, which is about to expire?
Lord Belstead: My Lords, all those who are members of the group, with the exception of the secretary, are members of water authorities. Those water authorities remain in being, and so it will be perfectly possible for the Government to do that which I have said to my noble friend Lord Chelwood will be done, which is to consult with the group urgently.
Lord Glenkinglas: My Lords, has my noble friend seen an article in The Times today which shows that the Iceland Government, faced with the same problem, took all nets off and are now getting more than double the number of fish in their rivers that they did 10 years ago? If that is too drastic a solution, can my noble friend bear in mind that New Zealand, which has exactly the same problem with trout, has totally banned the sale of trout, and so, in New Zealand. there is no more poaching?
Lord Belstead: My Lords, I am grateful to my noble friend for drawing that point to the attention not only of the House but also of the Government.
Lord John-Mackie: My Lords, as I believe everyone knows, salmon are fairly common to Wales, Scotland and elsewhere, and I believe that the claim of my noble friend Lady White that Welsh salmon tastes differently is open to doubt. This is a long-standing problem, as we all know, and in raising this matter the noble Lord, Lord Chelwood, has done a service in pressing the Government to do something about the matter.
Noble Lords: Question!
Lord John-Mackie: My Lords, may I ask the noble Lord the Minister whether he realises that the technology of poaching has increased immensely in the past few years with, as the noble Lord, Lord Chelwood, said, the coming of nylon nets floating near the surface, silent motor boats, and so on. One of the big problems—
Noble Lords: Question!
Lord John-Mackie: My Lords, does the noble Lord the Minister realise that one of the problems is the unscrupulous buyer? If something could be done about unscrupulous buyers, that would go a long way to solving the problem.
Lord Belstead: My Lords, I am grateful to the noble Lord for putting his finger on that particular point. It is towards that objective, as I understand it, that the Salmon Sales Group's recommendations are particularly aimed. We have to look very carefully at the recommendation for tagging because there are some problems; there is no doubt about that.
Lord Chelwood: My Lords, is my noble friend considering the possibility of licensing salmon dealers, following the precedent of the Deer Bill? That is something that might be of real help; and, perhaps, licensing rodsmen as well. When legislation is introduced—and I hope it will not be long before that happens—will it cover the whole of the United Kingdom, because surely it should do so?
Lord Belstead: My Lords. I believe that the question of licensing was raised in the consultation paper in 1981. It would have been for the Salmon Sales Group, if it had wished, to have gone for the licensing option. In fact, it went for the tagging option, and that is the option we shall be looking at urgently.
Lord Strabolgi: My Lords, is the noble Lord aware that his answer is almost exactly the same as answers given by me some five years ago? Can the Government not move a little more quickly, particularly with attempting to curtail the black market in illegally caught salmon?
Lord Belstead: My Lords, the final point made by the noble Lord, Lord Strabolgi, brings us back to the recommendation made by the Salmon Sales Group. It is precisely the point that will be dealt with by the recommendation of the group; but I will not conceal from the House that the group's recommendation has some problems in it, and these problems do need to be discussed—but urgently.
Earl Haig: My Lords, does my noble friend accept that in my part of the world, on the River Tweed, the situation is getting so serious that the netting industry is about to go out of business, or is getting near to that stage?
Lord Belstead: My Lords, I am sorry to hear that, but I am grateful to my noble friend for giving me that information.

EC Budget Council
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 the EC Budget Council.

Opticians Act 1958 (Amendment) Bill [H.L.]
Lord Spens: My Lords, on behalf of my noble friend Lord Rugby, I beg to introduce a Bill to repeal Section 21 and subsection(1)(a) of Section 25 of the Opticians Act 1958. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time—(Lord Spens.)
On Question, Bill read a first time, and to be printed.

Business of the House
The Lord President of the Council (Viscount Whitelaw): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That Standing Order 68 (Affirmative Instruments) be dispensed with for enabling the Motion to approve the draft Ministerial and other Salaries Order notwithstanding that there has not been laid before the House a report thereon from the Joint Committee on Statutory Instruments.—(Viscount Whitelaw)
On Question, Motion agreed to.

Parochial Charities (Neighbourhood Trusts) Bill [H.L.] Small Charities Bill [H.L.]
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That as proposed by the Committee of Selection, the following Lords be named of the Select Committee on the Bills:

Airedale, L.

Allen of Abbeydale, L.

Brightman, L. (Chairman)

Colville of Culross, V.

Lane-Fox, B.

Mancroft, L.

Melchett, L.

Prys-Davies, L.

Rathcreedan, L.

Rochester, Bp.

That the Minutes of Evidence taken before the Committee from time to time be printed and, if the Committee think fit, be delivered out.
That the Committee have power to appoint Specialist Advisers.
That the Committee meet on Tuesday 26th July at 4.30 p.m.—(Lord Aberdare.)
On Question, Motion agreed to.

Lord's Expenses
2.58 p.m.
Viscount Whitelaw Viscount Whitelaw rose to move, That this House approves the following proposals with respect to expenses incurred by Lords and their families after 30th June 1983—

(1) The limits on the expenses which Lords may recover under the Resolution of 22nd July 1980 shall be—

(a) for paragraph (1)(a) of the Resolution (day subsistence and incidental travel), £16.00 for each day of attendance;

(b) for paragraph (1)(c) (overnight subsistence), £40.00 for each day of attendance;

(c) for paragraph (1)(d) (secretarial allowance), £17.00 multiplied by the number of days of attendance falling within paragraph (1)(a);

(d) for paragraph (3) (office holders' secretarial allowance), £2,000 in any year.

(2) Members of this House who are disabled shall be enabled to recover additional expenses of attending this House incurred by them on account of their disablement.

(3) The cost of all travel by Lords which is within the United Kingdom and on Parliamentary business shall be re-imbursed or qualify for payment of the car mileage allowance.

(4) The facilities from time to time available to Members of the House of Commons under which the cost of travel by the spouses and children of Members of that House between London and the Member's constituency or ordinary residence is re-imbursed or qualifies for car mileage allowance shall, in the case of any Lord whose ordinary residence is outside Greater London and who either—

(a) receives a salary under the Ministerial and other Salaries Act 1975, or

(b) is the Chairman of Principal Deputy Chairman of Committees.

be made available in respect of travel between London and that residence by that Lord's spouse and children.

(5) The rate of car mileage allowance available to Members of this House shall, for journeys commenced on or after 1st October 1983, continue to be 25·8p per mile, notwithstanding any change with effect from that date in the relevant Civil Service rate of car mileage allowance.

The noble Viscount said: My Lords, I beg to move the first of the two related Motions standing in my name on the Order Paper. It may be for the convenience of the House if I speak to both Motions together.
The first Motion provides for increases in the limits on the expenses which noble Lords may recover in respect of their attendance at the House, together with several other improvements in the existing arrangements. Apart from the fifth paragraph of the Motion, all the proposed changes stem from the report of the Review Body on Top Salaries. That report, A Review of Parliamentary Pay and Allowances, was published last May, just before the dissolution of Parliament. Those of your Lordships who have studied the chapter of the report dealing with Peers' expenses will already be aware of the careful and thorough consideration

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which the review body, under the chairmanship of the noble Lord. Lord Plowden, gave to a wide variety of suggestions.
The Government have accepted all the recommendations made by the review body on Peers' expenses. One of those recommendations was that, in order to underline the nature of payments made to Peers, the expression Peers' Expenses Allowance should be replaced by Peers' Reimbursement Allowance. This change can be introduced without formality, and for that reason does not appear in the Motion which is before your Lordships. It is, I am sure your Lordships will agree, a helpful change. It is a widespread misconception that the allowance is a fixed rate rather than a limit within which expenditure may be reimbursed.
A second recommendation of the review body was for a payment equivalent to three months' salary to be made to Ministers and paid office holders in the House of Lords who cease to hold office, for whatever reason, after serving for not less than two years and before they have reached the normal retirement age of 65. As far as Ministers are concerned, this recommendation will require legislation, which will be introduced at the earliest possible opportunity. For the Chairman and Principal Deputy Chairman of Committees, the recommendation can be implemented without legislation. The Offices Committee have already agreed that it should be implemented; and your Lordships will shortly be asked to approve their recommendation.
The remaining recommendations on Peers' expenses are all incorporated in the first four paragraphs of the Motion on the Order Paper. In each case the changes proposed are to be backdated to 30th June.
The first paragraph raises the limits on the expenses which noble Lords may claim in respect of attendance at the House. The element for day subsistence and incidental travel is raised from £12.10 to £16.00 for each day of attendance. The element for overnight subsistence is raised from £25.40 to £40.00, and the secretarial allowance from £11.00 to £17.00. Finally, the annual secretarial allowance for office holders is raised from £1,300 to £2,000.
The second paragraph introduces for the first time a valuable element of flexibility into the arrangements. It provides that disabled Members of the House may recover additional expenses of attending this House incurred on account of disablement. The operation of this arrangement will be at the discretion of the Leave of Absence and Lords' Expenses Committee, and I understand that the Committee will shortly be considering what criteria should be applied.
The third paragraph provides that Lords may be reimbursed for all travel in the United Kingdom on Parliamentary business, and not just for travel between home and Westminster, as at present. This will mean that Members of this House will be able to recover travel expenses on the same basis as Members of the House of Commons.
The fourth paragraph of the Motion will enable the families of Ministers and other paid office holders in the House of Lords who have their main home outside
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London to travel between that home and Westminster at public expense, on the same basis as the families of Members of the House of Commons. At present this entitlement is to 15 return journeys each year.
The first four paragraphs of the Motion implement in full the various recommendations of the Review Body relating to Peers' expenses. The fifth and last paragraph, which was added last Thursday to the Motion already on the Order Paper, is intended to keep the car mileage allowance payable in this House in line with that payable to Members of the House of Commons. At present the allowance is regulated by a resolution agreed to by this House on 29th July 1975. That resolution provided that the rate should be the same as the Civil Service rate for cars over 1,750 cc used for journeys on official business. From next October a two-tier structure is to be introduced for the Civil Service mileage allowance. The full rate, currently 25·8 pence per mile, will be payable only for the first 9,000 miles in any financial year. Thereafter, a reduced rate, currently fixed at 14 pence per mile, will be paid.
My right honourable friend the Lord Privy Seal undertook in another place last Tuesday night that there would be an investigation into the proposed Civil Service two-tier arrangements to see how appropriate they were to Members of Parliament. He said—and I quote from col. 325 of the Commons Hansard:
"I shall ensure that that investigation is concluded speedily, that the findings of the inquiry are made available to Parliament and that the present motor mileage arrangements will stand until the House has authorised any replacement."
The Government believe it is also right that the mileage arrangements for Peers should stand until the findings of the inquiry have been considered. The fifth paragraph of the Motion before the House will therefore preserve the same position in this House. Once the investigation is concluded, I shall if necessary table a further Motion to ensure that the arrangements remain the same in both Houses.
The Government have accepted all the recommendations made by the review body on Peers' expenses. Several are designed to provide the means whereby your Lordships can perform your Parliamentary duties with greater effectiveness. Others will alleviate the risks and burdens associated with holding office in this House. I believe that the proposals which are now before the House will contribute positively to its effective functioning.
I turn now to the second Motion in my name, a Motion to approve the draft Ministerial and other Salaries Order. The order which I am now asking your Lordships to approve was laid before the House only last Thursday, in substitution for another order laid on 13th July. I must apologise to the House for the very short time which your Lordships have had to study the order; but I am sure that your Lordships will appreciate why the Government wished to revise the order in the light of decisions made in another place last Tuesday night.
The original order dealt only with the pay of Ministers and other office holders for one year. But following the expression of opinion in another place last Tuesday that the salaries of Members should be established specifically for the period up to the end of 1987, the Government considered that the same

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arrangement should be made for the salaries of Ministers and other office holders. Thus the order now before the House makes such provision.
The report of the Review Body on Top Salaries, like the original order, was also concerned only with the pay of Ministers and other office holders in the year ahead. That report recommended increases between 18 and 71 per cent., and averaging 34·8 per cent., for, as I have said, one year only, namely 1983–84. As I indicated in a Written Answer on 14th July, the Government consider that these recommendations are too high.
The details of the Government's new proposals on salaries up until the end of 1987 were set out in the Written Answer which I gave on 21st July. Perhaps a word of explanation would be helpful. From the date on which the Privy Council approves the order, the increase for Lords' Ministers in the Cabinet will be 4 per cent. The increase for Junior Ministers in the Lords will he precisely the same as that given to their colleagues in the Commons; namely, 4·7 per cent. for Ministers of State and 5·4 per cent. for Parliamentary Secretaries. Other office holders in this House will receive increases of either 4·7 per cent. or 5·4 per cent, in line with their opposite numbers in another place. The average increase for all Ministers and office holders from 27th July 1983 will be 4·7 per cent.
Thereafter, on 1st January each year, beginning in 1984 and running to January 1987, all Ministers and office holders in both Houses will receive precisely the same percentage increases as Members in another place.
I confess that a solution whereby Ministers and office holders in this House end up with exactly the same percentage increase as their opposite numbers in another place has required quite complicated calculations, given that those same colleagues in another place receive a Parliamentary salary, and Ministers and office holders in this House do not. But the Government believe that the outcome is a just one in all the circumstances. I commend these proposals to the House, and I beg to move the first Motion standing in my name on the Order Paper.
Moved, That this House approves the following proposals with respect to expenses incurred by Lords and their families after 30th June 1983—

(1) The limits on the expenses which Lords may recover under the Resolution of 22nd July 1980 shall be—

(a) for paragraph (1)(a) of the Resolution (day subsistence and incidental travel), £16·00 for each day of attendance;

(b) for paragraph (1)(c) (overnight subsistence), £40·00 for each day of attendance;

(c) for paragraph (1)(d) (secretarial allowance), £17·00 multiplied by the number of days of attendance falling within paragraph (1)(a);

(d) for paragraph (3) (office holders' secretarial allowance). £2,000 in any year.

(2) Members of this House who are disabled shall be enabled to recover additional expenses of attending this House incurred by them on account of their disablement.

(3) The cost of all travel by Lords which is within
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the United Kingdom and on Parliamentary business shall be re-imbursed or qualify for payment of the car mileage allowance.

(4) The facilities from time to time available to Members of the House of Commons under which the cost of travel by the spouses and children of Members of that House between London and the Member's constituency or ordinary residence is reimbursed or qualifies for car mileage allowance shall, in the case of any Lord whose ordinary residence is outside Greater London and who either—

(a) receives a salary under the Ministerial and other Salaries Act 1975, or

(b) is the Chairman or Principal Deputy Chairman of Committees,

be made available in respect of travel between London and that residence by that Lord's spouse and children.

(5) The rate of car mileage allowance available to Members of this House shall, for journeys commenced on or after 1st October 1983, continue to be 25·8p per mile, notwithstanding any change with effect from that date in the relevant Civil Service rate of car mileage allowance.—(Viscount Whitelaw.)

On Question, Motion agreed to.

Ministerial and Other Salaries Order 1983
Standing Order No. 68 having been dispensed with:
Viscount Whitelaw: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, that the draft order laid before the House on 21st July he approved.—(Viscount Whitelaw)
On Question, Motion agreed to.

Merchant Shipping (Miscellaneous Provisions) Bill [H.L.]
3.10 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move this Bill he now read a second time. It is in two parts. Part I makes provision for the service of improvement and prohibition notices to assist the enforcement of merchant shipping legislation. Broadly similar powers are included in the Health and Safety at Work etc. Act 1974. Part II is a technical and legal provision which amends the law dealing with the calculation of ships' tonnages for limitation of liability purposes. It is necessary to keep United Kingdom law in line with the relevant international conventions.
Your Lordships will not need me to remind you that ships have been growing larger. At the same time they are increasingly carrying dangerous goods, such as chemicals and noxious and explosive gases. These factors can give rise, particularly in port, to risks of danger to life and of serious pollution of navigable waters. Many of your Lordships will remember the tragedy in January 1978 of the "Betelgeuse" at an Irish

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port where 50 lives were lost, and other incidents in ports around the world. So far our ports have escaped the worst, but we need to be prepared. The risks often can no longer effectively be guarded against by use of the traditional enforcement power under Merchant Shipping Acts to detain a ship. Such action may be too late. Something of quicker effect and directed more positively at a specific risk is required.
These risks can arise during the loading and unloading operations, where both seafarers and dockers can be jointly involved. Accordingly the Department of Transport has been negotiating an arrangement with the Health and Safety Executive whereby marine surveyors and factory inspectors will in future co-operate, particularly during loading and unloading operations. This co-operation will be facilitated by common instruments of enforcement.
Part I of the Bill accordingly makes provision for the service of improvement and prohibition notices. These correspond to those which may be served under Sections 21 to 23 of the Health and Safety at Work etc. Act. The Health and Safety Executive and the seafarers' trade unions have been urging the necessity for this parity of enforcement powers under the two sets of legislation. It is also accepted as necessary by the General Council of British Shipping.
Clause 1 enables an inspector who is of the opinion that a person is contravening, or has contravened or might contravene a relevant statutory provision to serve on that person an improvement notice requiring the recipient to remedy the contravention. The relevant statutory provisions are listed in Schedule 1 to the Bill. They relate to: the safety of ships and hovercraft; safe working procedures aboard them; loading and unloading operations; and the prevention of pollution of navigable waters. Improvement notices will be particularly useful to ensure that a piece of equipment is repaired or replaced, or a safer working procedure is adopted, by a specified date. The notice provides a flexible instrument for remedying less serious infringements.
Clause 2 enables the service on a person in control of activities related to one of the relevant statutory provisions which are or are about to be performed on a ship or hovercraft, and which may involve the risk of serious personal injury or serious pollution of navigable waters, of a prohibition notice directing that the activities should cease. If the risk is imminent, the notice can be of immediate effect. In seeking to remove serious risks, it is the most important clause in this part of the Bill. A prohibition notice could, for example, be used to stop an unloading operation where faulty equipment or damaged goods were causing the emission of noxious or explosive substances posing an immediate threat to all in the vicinity.
Clause 3 contains supplementary provisions, including a right for an inspector to specify in either notices directions as to the measures, or choice of measures, to be taken to remedy any matter to which the notice relates. This will enable the inspector to give advice on the best ways to comply with the law or, indeed, to avoid the risk.
Throughout the long history of the Merchant Shipping Acts it has been very rare for a detention
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order to be challenged, and there are no records of claims for damages arising out of the wrongful detention of a ship. This reflects the care with which marine surveyors approach their work and their good relations with the shipping industry. I am sure that inspectors of both departments will be equally circumspect in using this new power to serve either of the notices. Nevertheless, equity demanded the inclusion of a procedure for determining whether a notice has been issued invalidly or includes unreasonable directions. Clause 4 accordingly provides for notices to be referred to a single arbitrator agreed between the parties and drawn from the ranks of the legal profession or those with special knowledge of maritime matters. The arbitrator's decision can take the form of confirming the notice, varying its terms or withdrawing it. We believe this will provide a quick and more appropriate means of resolving the matter than by an appeal to an industrial tribunal, as is the practice under the Health and Safety at Work etc. Act. A reference to an improved notice to an arbitrator will have the effect of suspending its operation until the arbitrator gives his decision, but because prohibition notices deal with more serious risks, a reference to an arbitrator does not automatically suspend the effect of the notices.
Clause 5 provides that where an arbitrator finds a prohibition notice to have been served on a wrong basis and without reasonable grounds he can award compensation for loss. This provision has no counterpart in the Health and Safety at Work etc. Act. It was included because a prohibition notice could in some cases have much the same effect as a detention order, and there has been a long—established right to claim damages under the Merchant Shipping Acts for wrongful detention of a ship.
I now turn to Part II of the Bill, concerned with limitation tonnage. These provisions are of a technical nature but can significantly affect the compensation available to victims in maritime incidents. They are necessary in order for the United Kingdom to continue to comply with the provisions of two international conventions to which we are a party. These conventions are the International Convention relating to the Limitation of the Liability of Owners of Seagoing Ships of 1957 and the International Convention on Civil Liability for Oil Pollution Damage of 1969.
The limitation of liability which shipowners and others are entitled to claim is related to the net tonnage of the ship as defined in the two international conventions. United Kingdom legislation does not repeat the international definition in so many words but, instead, takes as its reference point the registered tonnage. Until July of last year the United Kingdom definition gave the same result as required under the international conventions.
However, in July 1982 a new international system of tonnage measurement, agreed at an international conference in 1969—the International Conference on Tonnage Measurement of Ships—came into force and was implemented in the United Kingdom through the Merchant Shipping (Tonnage) Regulations 1982. These regulations, which applied immediately to all new or modified ships, or ships for which re-measurement was requested, introduced a new

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approach to tonnage measurement. Where vessels are measured and registered in accordance with the new regulations, the courts will be placed in some difficulty in interpreting the provisions on limitation tonnage. In so far as they decide they are able to apply them, they will arrive at a limitation tonnage which may be different by as much as 50 per cent. from that required under our international obligations.
It is clearly important that the problem should he rectified quickly so that the provisions on limitation tonnage are applied uniformly and consistently. The Bill accordingly provides for the limitation tonnage to be redefined in terms of the registered tonnage, which equates to the old net tonnage, and for this to be applied in all cases.
Clause 11(1) amends the provisions of the Merchant Shipping Act 1894, as modified by the Merchant Shipping (Liability of Shipowners and Others) Act 1958, which govern the limitation liability for general damages, including loss of life and injury, by substituting a new definition of limitation tonnage. Subsection (2) similarly amends the provisions of the Merchant Shipping (Oil Pollution) Act 1971, which governs the limitation of liability in cases of oil pollution damage by substituting essentially the same new definition of limitation tonnage. Subsections (3) and (4) retain the present effect of the 1894 Act, as modified, but in respect of hovercraft, and provide for automatic cessation of the provisions relating to the 1894 Act when the limitation of liability provisions of that Act are superseded by the more up-to-date international regime, as provided for in the Merchant Shipping Act 1979.
I have gone somewhat quickly through this Bill. I think that Part I is fairly clear from the way in which it is written. I emphasise that Part II is essentially a technical piece of legislation which has been discussed fully with all the parties who are involved. I hope therefore that this is clear to your Lordships. If there are any further questions, I shall be happy to answer them as best I may when we come to the end of this debate. Meanwhile, I commend this Bill to your Lordships, and beg to move that it be now read a second time.
Moved, That the Bill be now read a second time.—(Lord Lucas of Chilworth.)
Lord Underhill: My Lords, I need not detain the House long on this Bill. Any measure which, as explained in Part I, endeavours to carry through the provisions of the Health and Safety at Work etc. Act is to be welcomed. I am grateful to the Minister for explaining the terms. He said that Part I of the Bill is simple to understand. No matter what is in the memorandum in the front of the Bill, or in Clause 1, which deals with the improvement notices, frankly, it is almost impossible to understand to what it refers. It refers to relevant statutory provisions; but the interpretation clause refers to the provisions of Schedule 1, which, in turn, refers to the provisions of no fewer than 14 Acts, either wholly or in part. One needed the Minister's explanation to gather exactly what Clause 1 is about.
Clause 2 is more understandable. It deals with activities carried out on board ship which may cause serious personal injury or pollution. I am pleased that
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the Minister emphasised that although there are provisions in Clause 4 for arbitration, these will be set aside where a prohibition notice is urgent and requires immediate effect. I was going to ask him about that.
Part II of the Bill relates to the revised formula for ascertaining tonnage. It seems both appropriate and necessary and in conformity with the international conventions. I understand that the trade unions concerned have no particular points to raise on the Bill. Therefore we welcome the fact that it is having a Second Reading.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord, Lord Underhill, for his welcome for the Bill. I am particularly glad that in my explanation I was able to satisfy perhaps one or two questions that there might have been. Since it may be some weeks before we come to the next stage of the Bill, there will be adequate time for any discussion which any noble Lord may feel is necessary. If it should prove necessary, I would be very happy to enter into such discussion.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

International Carriage of Perishable Foodstuffs Act 1976 (Amendment) Order 1983
3.25 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to move, That the draft order laid before the House on 5th July be approved.
The noble Lord said: My Lords, I beg to move the draft International Carriage of Perishable Foodstuffs Act 1976 (Amendment) Order 1983.
The business before your Lordships this afternoon concerns an international agreement of some importance, particularly to the sector of the United Kingdom road haulage industry concerned with the transport of perishable foodstuffs. This is the agreement on the International Carriage of Perishable Foodstuffs and on the special equipment to be used for such carriage (known as the ATP Agreement). It lays down standards for the vehicles used for carrying perishable foodstuffs on international journeys and provides for the testing of vehicles and the issue of certificates of compliance with the standards. Certificates issued by the competent authority of one contracting country are accepted by those of other countries who are party to the agreement. Twenty countries, including the United Kingdom, who ratified the agreement in 1976, are now party to the ATP Agreement.
The agreement has recently been amended to allow for the issue of a certification plate and its acceptance as an alternative to a paper certificate. The purpose of the Order in Council which I am introducing to your Lordships this afternoon is to make consequential amendments to United Kingdom domestic legislation so that the amendment to the agreement can be implemented in the United Kingdom. United Kingdom operators will then be able, if they so wish, to obtain a certification plate to affix to the equipment

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instead of a paper certificate. It is anticipated that the plate will be found particularly useful for containers, trailers or semi-trailers, which often travel unaccompanied and where a paper certificate might be inconvenient to carry.
Unless your Lordships particularly wish it, I shall not trouble the House with the details of the amendments which the Order in Council will make to the 1976 Act. Briefly, what it does is to include references to a certification plate wherever the Act makes reference to a certificate, thus enabling plates to be issued by the testing bodies, for regulations to be made prescribing the form and layout of the plates and for the provisions as to offences and penalties to apply similarly in the case of certification plates as they do in the case of certification documents. The necessary amending regulations will be laid before Parliament as soon as possible after the order becomes operative.
The proposed order entials only minor changes to present legislation, but the Government believe these to be of real practical use, and I understand that the introduction of certification plates is generally welcome to the United Kingdom road haulage industry and others who have interests in this matter. Like the ATP Agreement itself, the purpose is to facilitate the international carriage of perishable foodstuffs. Accordingly, I hope it will be welcomed by your Lordships, and I commend the order to the House.
Moved. That the draft order laid before the House on 5th July be approved.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.

Iron Casting Industry (Scientific Research Levy) (Amendment) Order 1983
3.30 p.m.
Lord Lyell Lord Lyell rose to move, That the draft order laid before the House on 22nd June be approved.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the order paper. The purpose of this order, which my right honourable friend the Secretary of State for Trade and Industry proposes to make under Section 9 of the Industrial Organisation and Development Act 1947, is to amend the Iron Casting Industry (Scientific Research Levy) Order 1971, so as to consolidate the provisions which were previously made for the computation of levies, and it also makes minor amendments. The 1983 amendment order will introduce a formula which takes into account any changes which may occur in the wholesale price index which is published in British Business, and the order also links future levies to the appropriately based index number. This avoids the necessity of laying a new order each time there is a change in the base rate of the index. Additionally, the present limit of £3·50, which is the minimum levy payable in respect of any levy period, will be increased to £100.
The existing order imposes a levy on the iron casting industry to finance scientific research carried out on behalf of the industry by the BCIRA—which is a pleasant acronym for this body which was formerly
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called the British Cast Iron Research Association. The proceeds of the levy will continue to be collected by my right honourable friend and will then be released against the association's expenditure on scientific research.
The activities of the BCIRA need to be viewed against the background of the iron castings industry. Many companies in the industry would find it difficult to support their own research activities, but they are nevertheless of vital importance to British manufacturing industry generally. The research association provides the whole of the iron castings industry with a wide range of services, which include general scientific research and contract research, as well as consultancy and advisory services. The high standard and practical usefulness of the association's work is very widely recognised.
Much of the association's scientific research is supported by a statutory levy which is collected from companies in the industry under the provisions of Section 9 of the Industrial Organisation and Development Act 1947 that I mentioned to your Lordships a trifle earlier. The levy was first introduced in 1966 after wide consultations with the industry, and was increased in 1971 to take account of the rise in costs experienced by the association, and again in 1976 to take account of a further rise. This was further amended in 1979, owing to a change in the base year of the index.
Under the orders at present in operation, every iron foundry is liable to pay each quarter a levy made up of two components. First, it pays 0·15 per cent. of the emoluments of those employed in the industry. Secondly, it pays a levy per tonne on fettled iron castings which are produced by the foundry. The rate of the levy per tonne is linked to the index of the United Kingdom wholesale selling prices of iron castings, which are published by my department in the publication entitled British Business. Because of the increase of this index since 1976, the levy has gone up from 11 p per tonne to 23·5p per tonne. As from 8th August this year, this index, presently known as the wholesale price index, will be known as the producer price index.
The part of the formula linked to the index does not allow at present for changes in the base of the index. That base has changed from 1970=100 to 1975=100, and a new order incorporating an updated formula was therefore required. With effect from 8th August 1983, this base will once more change to 1980=100, and this will necessitate a further new order. The new order has been so worded as to preserve most of the terms of its predecessors, and I would emphasise that the rate of levy that will be chargeable from the beginning of October this year of 23·5p per tonne is no different from the rate of levy that would have been reached had the present index remained in use. This new order merely revises the mechanics of calculating the levy and does not change the principles under which it operates.
The major organisations which represent both the industry and the persons who are employed in it have been consulted, and no objections have been received from any of these bodies. For that reason, I would commend the new order to your Lordships' House. I beg to move.
Moved, That the draft order laid before the House on 22nd June be approved.—(Lord Lyell.)
Lord Ponsonby of Shulbrede: My Lords, I should like to thank the noble Lord for his usual very lucid explanation of a potentially complicated order. It would seem that the main purpose of the order is to index-link the payments which have to be made by individual firms under it. One queries why the index-linking is proposed, and one wonders whether the Government are thinking that there will be further inflation in the future and so want to save the annual laying of a new order.
The other proposal in the order is that foundries which would have to pay an amount of less than £100 should be exempted from making payments. I wonder whether the noble Lord can tell your Lordships how many foundries will be exempted by raising the minimum level of payment to £100. Perhaps at the same time the noble Lord can tell your Lordships how many foundries in total are paying at the present time, excluding those which will not be forced to pay in the future. I wonder whether he can also confirm to your Lordships that the levy does not contravene ECSC regulations or EEC regulations Having asked those queries, we welcome the order.
The Earl of Shannon: My Lords, I too am grateful to the Minister for explaining the order in detail, and I was most pleased to hear him at the beginning of his speech extolling the virtues of the activities of the research association. There is, however, one question that I should like to ask him. I wonder whether he and his department are aware that BCIRA—the old British Cast Iron Research Association—has been in discussion with the Steel Castings Research and Trade Association regarding ways of rationalising the research and development activities of the two organisations with a view ultimately to creating a single organisation to serve the technical requirements of the entire United Kingdom cast metals industry. As I understand it, these discussions have recently been actively encouraged by the Department of Trade and Industry.
Since the problems of such a rationalisation would be greatly simplified if there could be found a common basis for funding, will the noble Lord therefore consider the introduction of a similar statutory level to cover the requirements of the steel foundings sector, bearing in mind the obvious difficulties of trying to create a single organisation which would cover both voluntary members on one hand and pressed members on the other?
It is now about 12 years since this question with regard to a statutory level for the steel castings industry was last considered in your Lordships' House. On that occasion the department had carried out a very detailed survey of the steel castings industry, with the result, if I remember correctly, that between 80 per cent. and 95 per cent. of the industry were in favour of having a statutory levy similar to that for the cast iron industry. Yet the then Conservative Government did not consider that statutory levies were at all suitable as a method of conducting research for an industry. The Motion on that occasion was refused.
I know that the Minister said that the steel castings
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industry did not have objections. However, it did have an existing, on-going system to which the industry was accustomed. Does he consider that, if he carried out a survey under the same circumstances to those which applied in the case of the steel foundry industry, he would get anything like the same support? Will he also say what is the present attitude of the Government with regard to statutory levies as a method of conducting research for a whole industry?
Lord Lyell: My Lords, I wish to thank the noble Lord, Lord Ponsonby, and the noble Earl, Lord Shannon, for their close attention to the particularly complicated order that I have introduced. Thankfully, neither of them has asked me to try to explain the intricacies of index linking which they, and I am sure your Lordships, will he fascinated to see in paragraph (4) of Article 2 of the order. If either of the noble Lords who have spoken wish for further guidance, I can certainly write to them.
The noble Lord, Lord Ponsonby, asked me about the number of foundries that we thought would be exempted if the minimum levy payment was increased to£100. We estimate—I have to stress this word—that between 205 and 210 foundries would be exempted if the minimium levy payment was increased to £100. This is out of a total of just over 500 foundries which were contributing in 1982. I understand that the current number, at the latest available date, is 453. The noble Lord will therefore see that 207 of the smaller foundries will be exempted from the levy proposals.
The noble Lord also asked whether the EEC would have any influence or would be concerned about the regulations in the order. I am able to tell him that the ECSC and the EEC measures do not cover cast-iron research and, above all, the levies that we are discussing.
The noble Earl, Lord Shannon, brings a great deal of technical knowledge to the issue. Indeed, he was kind enough to give me the benefit of some of his technical knowledge last week when he explained to me that steel was iron with a little more carbon in it. I think that I see him nodding in quasi-assent. His scientific and technical knowledge is much valued by your Lordships.
The noble Earl mentioned discussions involving the Steel Castings Research and Trade Association. I shall not attempt to put into words that little acronym, SCRATA. It could he interesting. But the noble Earl, like the House, will be interested to know that discussions between BCIRA and the research division of SCRATA about the possibility of merging their research and development activities in ferrous castings have been taking place actively for three years or more. It is their own initiative although the Government would consider making a financial contribution to any costs incurred in merging. I stress that the Government would consider this.
I am able to inform the noble Earl that there is no consideration of a levy for the Steel Castings Research and Trade Association. I understand that its research activities will continue to be funded as before for the members of that association. Indeed, it is a matter for the members of that association as to how they wish to

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fund their research. The Government believe that it should be left that way.
Any mergers or joint association of research we believe is entirely a matter for the two bodies. We are an interested onlooker in those discussions. I hope that this answers satisfactorily the questions raised by the noble Lord, Lord Ponsonby, and the noble Earl. I hope that I have covered the complications of this order satisfactorily. With that, I beg to move.
The Earl of Shannon: My Lords, before the Minister sits down, I wonder whether I may apologise to him for obviously having been an extremely bad instructor. Cast iron contains slightly more carbon than steel, not the other way round.
Lord Lyell: My Lords, that just goes to show that I was considered too foolish to do science at school. After two years of compulsory science. I was told to take up languages as more suited to my talents. I am grateful to the noble Earl. I shall continue with free science lessons in your Lordships' dining room. I commend the noble Earl to any of your Lordships who, like myself, are deficient in knowledge of science. I think however, that we may continue the conversations outside the Chamber. I beg to move.
On Question, Motion agreed to.

Waterways: Commercial Use
3.47 p.m.
Lord Plant Lord Plant rose to ask Her Majesty's Government whether they consider (a) that they are giving enough encouragement to the development of the waterways of Britain to deal with increased internal and import/export freight; and (b) that they deal financially more harshly with waterways than with other methods of transport.
The noble Lord said: My Lords, 65 years ago, I lived at a small village, Cheddleton on the Caldon Canal. I walked to the station along the tow-path each day passing Brittains paper works employing several hundred workers. There was a constant stream of horse-drawn barges to Brittains and other works. Brittains is now derelict and the canal only used for leisure.
After the death of Lord Feather in 1976, I was appointed deputy chairman of the British Waterways Board. I felt at the time that the civil servants at the department gave little encouragement to the board to push ahead with its plans for improved freight transport but rather to develop the canals for leisure. Fortunately, Sir Frank Price, the chairman, had a clear view of the commercial future of the waterways.
I pay tribute to the drive and foresight of Sir Frank and the loyalty of the 3,000 dedicated staff.
I believe that the new Secretary of State shares Sir Frank's views. The British Waterways Board's freight services hold a unique position within the transport industry. As well as the promotion and development of traffic and facilities on the commercial waterways, they manage warehouses, depots, wharves, docks and road and inland waterway freight-carrying fleets. This
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means that the board is capable, in conjunction with other transport systems, of providing a total transport service for the movement of goods, whether within the United Kingdom or in connection with export and import requirements.
Like most fields of economic activity, the freight transport industry is subject to rapid change. It is affected by technological change, fluctuations in the level and changes in the patterns of trade and Government policy decisions. To remain competitive, each transport mode must be responsive to these external forces. In the United Kingdom the various modes of inland transport—road, rail, waterway and pipeline—have unfortunately developed separately. Waterway transport was the first method of moving goods on a large scale, but with the advent of rail and road, little further investment was made in the waterways to enable them to compete. As a result the potential of waterway transport has been virtually ignored. In the 17th century, the River Severn was one of the two most used waterways in Europe. I shall return to the Severn later.
The past few years have shown a slight but welcome change of approach by Governments. In 1978 the first major improvement to a freight waterway for over 70 years was authorised. The scheme, the Sheffield and South Yorkshire Navigation, was completed and reopened for use in June. It facilitates the passage of craft of up to 700 tonnes to Rotherham in the heart of the South Yorkshire industrial conurbation. The present traffic assessment for the canal is 1.8 million tonnes per annum, with further large tonnages for the future.
Government statistics on inland waterway transport were, for many years, almost non-existent. Steps have now been taken—after many years of protest—to provide statistics for all waterways in the United Kingdom used for the carriage of freight. The British Waterways Board controls only 350 miles of the 1,400 miles of waterways in this country.
Another welcome development, as a result of continued pressure, is the provision, under Section 36 of the Transport Act 1981, for grants to the private sector towards the cost of waterway infrastructure which could result in a reduction of traffic on roads. The first grant of £369,000 for the reinstating and modernising of a disused wharf on the River Trent at Gainsborough, was announced by the Secretary of State for Transport on 27th June this year. Nevertheless, the complexity of the conditions and the regulations which are attached to the making of Section 36 grants is an inhibiting factor in the submission of a successful application for grant, as pointed out by my noble friend Lady Loudoun on 20th December last.
Even so, there is still a need to rectify the imbalance in investment criteria for competing transport modes. Unlike the roads, improvements to a waterway for freight carry a heavy financial burden in interest charges, for which the customer has to pay. Competition between transport modes should be based on rules which are clearly equitable and fair. The cost of the Sheffield and South Yorkshire Navigation was £16 million, of which £10 million was capital funded—£1 million from the local authority, which has given so much encouragement; £3 million from

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the EEC, and the balance from the Government. That was the first occasion on which the EEC has assisted water transport.
The Government produce money for the infrastructure of roads and rail. The British Waterways Board borrows for water transport over a period of 25 years from the National Loan Fund and pays the going rate of 12 per cent. The Sheffield and South Yorkshire navigation loan at one time had an interest repayment of 16 per cent. Interest charges result in £l¼ million per annum which has to be recovered by tolls from its customers. Investment in roads does not carry interest charges. That to me is contrary to the Treaty of Rome, which says that there should be fair competition. The Council of Ministers has not been complying with the Treaty of Rome.
The waterways hoard has spearheaded technological change on its waterways without, in many cases, the active help of the department. The introduction of push-tow techniques has reinforced the fact that waterway transport is cost-effective. Operating costs per tonne are low. The serviceable life of a barge is 25 to 30 years—much in excess of that of a road vehicle—and the labour content per tonne moved is also much lower. Added to this, studies carried out in Europe, the United States of America and the United Kingdom have shown that water transport is more energy-efficient than rail, and on average between four and five times more so than road transport. And, of course, waterways are friendly to the environment—there is little noise, vibration, pollution or visual intrusion, and very few accidents.
There is no doubt that clear benefits accrue from maximising the use of waterways for freight transport for the movement of bulk and semi-bulk commodities. All European countries are developing their waterways. In this country we have only had the Sheffield and South Yorkshire Navigation this century. I believe that the Government say, "Let us see how that goes on before we spend more money".
In recent years the most significant factor affecting trade has been the entry of the United Kindom into the European Economic Community. In 1972, only 31 per cent. of United Kingdom trade by value was with the other eight member countries. By 1982, this had risen to 43 per cent. The United Kingdom trade pattern is changing from one dependent upon ocean trades to one dependent upon short and middle-sea routes.
The British Waterways Board was closely involved with the promotion of the BACAT barge-carrying vessel service to the Humber Estuary which operated between 1974 and 1975. The concept is one in which a number of barges are carried on board a sea-going "mother ship" and loaded/discharged by means of a gantry crane, an elevator or floatation. Although three ocean-going barge-carrying vessel services continue to serve the United Kingdom, BACAT was the only system designed specifically to obtain maximum penetration of the United Kingdom waterway network and to operate on a short sea-route. The demise of the service was not caused by any inherent defects in the system, which proved to be commercially viable, but by reluctant management and, I regret to say, a reluctant labour force at the docks. The board is convinced that the service created jobs and brought
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considerable benefits to the area, both directly and indirectly. A reintroduction of a similar service to the Humber Estuary would assist in the revitalisation of Humberside. With the increasing trade with mainland Europe, the introduction of the low profile river/sea-going vessel is also of considerable importance to the board's strategy. These vessels can reach inland locations such as Rotherham, Gloucester, Northwich and Gainsborough and operate to ports in mainland Europe as far inland as Basle, Liege and Paris.
Not without significance is the fact that many cargoes which went to the east coast are now being sent to the west coast ports to avoid the heavy road costs involved in conveying cargoes from ports on the east coast to the centre of the country. There is little doubt that navigations such as the Weaver take barges up to 1,000 tonnes from the Mediterranean and North Europe into the heartland of Britain.
It is policy to join with private enterprise in waterway freight transport operations where it makes sense. As an example, Inland Waterway Carriers Limited has brought together managerial, financial and operational expertise from the private and public sectors in the development of specially designed self-discharging craft for the carriage of millions of tonnes of minestone waste on the Aire and Calder Navigation. Waterways are already used extensively for the removal of household waste and sewage and industrial sludges. The Coal and Environment study drew attention to the problem of the removal of waste from coal production in the years ahead. The board is keen to see the waterways used for this traffic in the Yorkshire/Humberside Region in particular and is closely associated with the studies being undertaken by the local authorities concerned.
Inland waterways are eminently suitable for the movement of hazardous and dangerous goods. Substantial quantities of petroleum products, caustic soda, sulphuric acid and chlorine are already moved on inland waterways. Public concern over the transport of such goods by road is widespread, and growing. The inherent safety of water transport makes it ideal for the movement of substances with explosive, radioactive, toxic, corrosive and flammable properties.
Over the last few years, considerable numbers of containers have begun to be moved on waterways in both mainland Europe and the United States. Opportunities also arise in the movement of heavy "lifts". In 1981, a large water processing unit was moved by water from Gloucester to Avonmouth for export to Abu Dhabi. The movement of such loads by rail can present problems because of loading-gauge restrictions; transport by road involves disruption of traffic and the risk of damage to roads and bridges. Waterways such as the Trent Navigation and the River Severn reach the industrial heartland of the United Kingdom offering the prospect of the bulk movement of raw materials and finished products and improving the competitive position of industry.
In conjunction with Nottingham County Council, a study was commissioned to examine potential for traffic development on the Trent Navigation. The consultants' report is being considered with a view to deciding future policy. The development of

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transhipment at Keadby, at the junction with the lower River Trent, is also being considered. A major inland terminal capable of handling ships of up to 2,000 tonnes is being examined which would provide facilities for transit and long-term storage. An improvement to the Stainforth and Keadby Canal would provide a direct link with the improved Sheffield and South Yorkshire Navigation. The need for money and sympathetic Government support is obvious.
A number of studies have been carried out over the years into the development of the Grand Union Canal in the London area to provide a link between the lower Thames and West London. The latest proposals, involving the improvement of the waterway to Brentford, are now being considered.
It is vital to secure the co-operation of local authorities which have recognised the role of inland commercial waterways for the carriage of freight in their structure plans. South Yorkshire County Council is actively involved in the promotion of the improved Sheffield and South Yorkshire Navigation, having contributed £ 1 million towards the costs of the scheme. The location of suitable industry alongside the waterway is particularly important and is recognised as such. In this way advantage can be taken of the comparatively inexpensive cost of water transport.
This interrelationship of transport mode and industrial structure is typified in the concept of the Severn Corridor. The corridor comprises the Gloucester and Sharpness Canal and the River Severn, linking the Severn estuary at Sharpness with the fringe of the West Midlands industrial region at Worcester. The corridor encompasses an area of activity of regional proportions in which the activities of many authorities and interests necessarily interrelate with one another. For some time the British Waterways Board has been examining the prospects and associated costs for developing a major flow of traffic on this waterway route. Market surveys indicate that there is an important flow of traffic in this corridor and that a competitive waterway operation could secure a fair proportion of that traffic. The board's general policy is that the Severn Corridor should be developed as a modern freight-carrying artery, with the standard in regard to vessel size being in the range of 1,500 tonnes to 2,500 tonnes. Because of the total effect upon the region, the board would not be able to achieve this in isolation but is providing the lead in promoting an awareness and interest in what, from the board's standpoint, needs to be done to bring about the creation of a modern waterway system adapted and suited to the needs of the region.
For example, besides the physical enlargement of the waterway, a number of important engineering aspects must be taken into account, such as the Severn Barrage—tidal exclusion on the River Severn—arrears of maintenance on the waterway, and the improvement of road communication and bridges. Consultation, liaison, planning and construction, involving the local authorities and other public and private bodies as well as the board, are in hand.
It is estimated that the costs will be £25 million. It is hoped that local authorities and the EEC will
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contribute so as to reduce the interest repayment to the National Loan Fund. With governmental initiative, the development of the Severn Corridor as a major water artery from the sea to the industrial heart of the Midlands would be realised. It must be of benefit to the economic growth of the region to have a waterway connection to the trade routes of Europe and to the world.
The strategy for the future of waterway transport consists of three basic elements. First, there is the need to ensure that competition between transport modes is equitable and fair. The growing energy problems, the need to conserve oil fuels and the natural advantage of the waterway will provide increasing evidence of opportunities for growth.
Secondly, change, whether caused by technological innovation, market fluctuations or Government policy decisions, must be flexible. We live in a rapidly changing world and one in which the future is becoming increasingly hard to predict. We must be responsive to change in the circumstances of all transport modes and be ready to grasp opportunities when they arise.
Finally, I come to planning for the future. In the past, transport infrastructure generally has been developed in response to needs as they have arisen rather than as a result of proper land use planning. Investment in transport infrastructure has for several decades been directed mainly to road construction, to the detriment of waterways and railways. There is no doubt that, as a result, much damage has been done—and continues to be done—to the quality of life, to the environment and to social conditions generally. Long-term investment in infrastructure should be directed in such a way as to create demand. Each transport mode has a role to play in this.
Inland waterway transport in the United Kingdom has reached a turning point. In recent years the decline in tonnages has been arrested. The recession has affected all transport modes, but waterways do not appear to have fared as badly as other modes. The total tonnage carried on the commercial waterways increased by 11 per cent. in 1982, despite the general economic difficulties. We must be ready to take advantage of changing traffic patterns in the knowledge that commercial waterways can play a bigger part in the transport needs of the United Kingdom.
Many people claim that water transport is slow when compared to road and rail. But this country's imports and exports move, for the greater part of their journey, at no more than 14/15 knots. Since most parts of the United Kingdom are within 100 miles of the sea, why is it felt necessary to dash at 70 miles per hour over the last part of the journey? I beg to move.
The Earl of Swinton: My Lords, I think the noble Lord means that he wishes to ask the Question standing in his name?
Lord Plant: My Lords, yes. I thank the noble Earl for correcting me.

EC Budget Council
4.10 p.m.
Lord Cockfield: My Lords, with permission, I shall now repeat a Statement made in another place by my right honourable friend the Financial Secretary. The Statement is as follows:
"With permission, Mr Speaker, I should like to report to the House on the outcome of last week's Budget Council in Brussels, at which I represented the United Kingdom. The Council had a discussion with the Parliament and finally established a draft supplementary and amending budget No. 2 for 1983 and a draft budget for 1984. These will now go forward for consideration by the European Parliament.
"The draft supplementary budget No. 2 for 1983, as established by the Council, in response to a presidency compromise, makes provision for budget refunds for 1982 for the United Kingdom and Germany under the risk-sharing provisions of the 26th October agreement of 370 million ecus. The United Kingdom's share in this is around 305–310 million ecus. In our view the total figure should have been 495 million ecus, including 408 million ecus for the United Kingdom. We are therefore left with a shortfall of about 100 million ecus gross, or 75 million ecus net (£58 million gross and £43 million net). I voted against the presidency compromise which included this provision, but all others voted for it, except the Danes who abstained. I therefore made clear to the Council, for formal inclusion in the minutes, that they had failed to discharge in full their obligations to the United Kingdom and that the Community institutions must take the necessary action as a matter of urgency to ensure that the United Kingdom receives its full entitlement. The budgetary processes for 1983 are not yet completed, and the Government intend to ensure that this matter is resolved satisfactorily.
"The presidency compromise was also unsatisfactory in that it included a cut of only 50 million ecus in the extra provision for agricultural spending proposed by the Commission. I argued strongly for a larger reduction.
"The draft budget for 1984, as now established by the Council, will make provision of 1,202 million ecus for refunds to the United Kingdom and Germany, including 991 million ecus for the United Kingdom. In contrast with the 1983 supplementary, this gross provision correctly provides for a refund to the United Kingdom of 750 million ecus net, and so honours the Stuttgart undertaking fully.
"The draft budget provides for agricultural guarantee expenditure of 16½ billion ecus, as recommended by the Commission; but the Council decided to place 250 million ecus out of this total in the 'reserve' chapter of the budget rather than 'on the line'. Together with two other delegations I argued for cuts of 1 billion ecus in the provision for agricultural guarantee spending but this proposal was finally out-voted.
"The draft budget makes provision for total non-obligatory expenditure, including the non-
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obligatory element in the United Kingdom and German refunds, to rise by half the maximum rate—that is, by 5.8 per cent. But the combination of the large provision for agriculture with the necessary provision for United Kingdom and German refunds left little room inside the own resources ceiling for increases in the Regional Development and Social Funds.
"Before either budget is finally adopted there will be extended negotiations between the Council and the European Parliament. During this period the Government will take all appropriate steps to ensure that the United Kingdom receives its agreed entitlement to refunds for 1982 in full. My right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs will raise the matter at the Foreign Affairs Council at the earliest possible opportunity.
"I am sure that the Government can count on support for this from all sections of the House."
That, my Lords, concludes the Statement.
4.15 p.m.
Lord Bruce of Donington: My Lords, the House will he grateful to the noble Lord for having repeated the Statement made in another place. May I, as an aside, offer some personal sympathy to the Financial Secretary to the Treasury on the record session of 40 hours? As one who has had some experience of lengthy conciliation proceedings between the European Parliament and the Council of Ministers. I admire his fortitude, and I wish him luck in any future proceedings in which he may become involved.
Her Majesty's Opposition of course sustain the attitude that has been taken by the Government in regard to these shortfalls of £58 million gross and some £43 million net. We also support the Government's rejection of the presidential compromise, which put the figure at some £29 million. We note with some interest that, as per the Statement,
"the Government intend to ensure that this matter is resolved satisfactorily".
The noble Lord will forgive me if I lay some emphasis on the words which I now put in parenthesis, "resolved satisfactorily". What does that mean? The first question I have to ask the noble Lord is: does he regard "resolved satisfactorily" as meaning a payment to us of the sum in full, to which we are entitled, or do the words "resolved satisfactorily" represent an ambiguity which enables the Government to settle at a figure between £29 million and some £58 million? We should like some information on that point.
We note from the noble Lord that agricultural expenditure for the year 1984 is put at 16·5 billion ecus, which is roughly £9,470 million. Is the noble Lord aware that expenditure is already running at a rate that appears on the face of it to be a prelude to expenditure for 1984 of some 18 billion ecus, or some £10,440 million? Is the noble Lord aware of that? Is he also aware that every year, with monotonous regularity, we have a supplementary budget? The draft budget for 1984 has been put at this figure of 16·5 billion ecus, or £9,470 million. Will the noble Lord cross his heart and say that there will be no supplementary budget for the year 1984?

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The House and the country are becoming a little fed up with this perpetual increase in agricultural expenditure, which is denounced just as fervently by members of Her Majesty's Government as it is by all quarters of this House and also the other place. Year after year we have, immediately prior to the annual price review in Brussels, a firm statement by the Minister of Agriculture—and we have had it many times now—that Her Majesty's Government will firmly resist any increase in price in respect of items in structural surplus. About three weeks later, after meetings in Brussels, the Minister comes back to the country and claims that a rise in prices of anything between 4 per cent. and 10 per cent. represents a magnificent victory' for Her Majesty's Government.
Can we have a stop to this nonsense, so that when the Minister says that we shall not have any increase in price in items in structural surplus, he means exactly what he says? We note well from the Statement that his right honourable friend suggested a figure of £580 million more for next year, which is a shortfall against the figure which it will become—in the region of £970 million. In short, from the Statement it is quite clear that the finances of the European Economic Community are in disarray.
I now ask him the second question on which I should like a specific response. Is it Her Majesty's Government's intention that the 1 per cent. base on VAT as the determinant in the Community's own resources is not to be exceeded? From time to time Ministers have made encouraging noises and have said that on no account will it be exceeded. Can we have the Minister's specific assurance, on behalf of Her Majesty's Government, that the Government's efforts—including if necessary the exercise of the Luxembourg veto if it is required—will be exercised against any further such increase?
My third question relates to a statement that has been attributed to the Commission—I do not know with what truth, but it was in The Times and the Guardian, so presumably it has some considerable authenticity—about whether in the event of the 1 per cent. ceiling to VAT for the Community's own resources not being exceeded, and in the event of budgetary requirements being in excess of that figure, both non-obligatory and obligatory expenditure would abate pari passu. Obligatory expenditure consists in the main of agricultural expenditure. Will the Minister say whether he agrees that if the expenditure of the Community is to be held within the 1 per cent., then he also agrees with the Commission's concept that agricultural expenditure should abate together with the other non-obligatory expenditure? If the non-obligatory expenditure is to be abated, will he also bear in mind that under Title 5 of the Community's budget, which deals among other things with the regional funds, if that is abated then that item is the sole item in the European budget where the United Kingdom receives a net profit return varying between 7 and 8 per cent?
I trust that in asking those three questions, which I hope have been succinctly put, I may have satisfactory replies from the noble Lord. I would not wish to end on a churlish note. If the Government are prepared to do battle on this and are prepared to match their words
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with their deeds, they will receive the full support of Her Majesty's Opposition.
Lord Banks: My Lords, I join in thanking the noble Lord, Lord Cockfield, for repeating that Statement made in another place. I am glad to note from the Statement that the British refund for 1983 is being respected and I regret that that would appear not to be so for the refund for 1982. The Government must press that that agreement be respected.
However I understand that it is the British interpretation of what is owed that is challenged, particularly according to the report in The Times of 23rd July by Denmark. Is it right that there is no intention to deprive the United Kingdom of any amount due, but the argument is about what is due? In any event, it is a comparatively small amount, £43 million net. Would it be worthwhile making some concession of that if we could have in return a significant reduction on agricultural expenditure in 1984?
Finally will the noble Lord agree that in the long run, while a reduction in agricultural expenditure is clearly desirable, the long-term British budget problem is unlikely to be solved unless there is an increase in the total budget so that there is an increase in expenditure on policies from which we will derive greater benefit than we do from expenditure on agriculture? Will that not necessitate raising the own resources ceiling?
4.27 p.m.
Lord Cockfield: My Lords, I am grateful to the noble Lord, Lord Bruce of Donington, for his support and also equally grateful to the noble Lord, Lord Banks, for what he said. I will most certainly pass on to my right honourable friend the Financial Secretary the good wishes of the noble Lord, Lord Bruce, which I am sure he will greatly appreciate.
The noble Lord, Lord Bruce, raised three points. First he asked what was meant when we said that it was the intention of the Goverrnment to ensure that this matter was resoved satisfactorily. Quite shortly the answer is that. as the Statement makes clear, we propose ensuring that we receive the full amount to which we are entitled. At this point I will take up Lord Bank's point as it is associated. The noble Lord is quite right in saying that part of the difficulty rests upon the fact that other people claim that the figure should be calculated in a different way. I do not want to go into the detail of this, but in the past refunds have always been calculated on what is known as the payments basis and there has been an attempt now to argue that it ought to be changed over to the assiette basis.
The fact is that refunds have always been calculated in one way and we see no reason why' this basis of calculation should be changed now simply because it would produce a lower figure. We believe that what is behind the argument is not any point of principle, but simply an attempt by other people to whittle away the amount to which Her Majesty's Government and this country are entitled. Looking at it from that point of view I do not think it would be right to try to "trade" this point—if the noble Lord will forgive my using such a phrase—in the hope of getting concessions elsewhere. I do not for a moment think that one

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would. I propose returning to the second point of the noble Lord, Lord Banks, in a moment, because it ties up also with the point raised by the noble Lord, Lord Bruce of Donington.
The noble Lord, Lord Bruce, drew attention to the fact that the provision made in the 1984 draft budget for the CAP is £16½ billion, and he said—as has been said elsewhere—that expenditure may very well run at a rate which exceeds that level. It is too early yet to say exactly what the outturn might be. We regard the £16½ billion as too high and my right honourable friend, together with certain other Members, proposes that it should be reduced by 1 billion ecus. We shall now have to see how this goes.
Concerning the long-term negotiations and the general question of reaching the limit of own resources, which was raised by both noble Lords, I can do no better than read the Statement which was made by my right honourable friend the Prime Minister at the conclusion of the Stuttgart summit. What she said was:
"I think we all need to recognise that these matters must be taken forward together. There is no way in which it would be sensible to prejudge one in advance of the others. In the context of a long-term settlement of all these problems, I would be prepared to consider an increase in own resources provided that"—
and this is the important point—
"we reached agreement on an effective control of the rate of increase of agricultural and other expenditure and provided that it is accompanied by an arrangement to ensure a fair sharing of the financial burden so that no country has to pay a share disproportionate to its relative national wealth".
I do not think that I could either usefully or properly add to what my right honourable friend said on that occasion. This is really the answer to the third point raised by the noble Lord, Lord Bruce of Donington. We hope very much that these long-term discussions will reach a fruitful conclusion before there is any question of reaching the limit of own resources.
Lord Harmar-Nicholls: My Lords, the noble Lord has received two sets of advice on what I think is the number one problem; that is, whether or not we agree to an increase in own resources. He had the advice put in the form of a question from the noble Lord, Lord Bruce, who suggested that we should not countenance an increase until such time as restraint has been shown in the expenditure on agriculture which flows from the common agricultural policy. Then he had the advice of the noble Lord, Lord Banks, who suggested that it might be sensible to give an increase in own resources in return for breaking the log-jam on the others.
It seemed as though my right houourable friend the Prime Minister, in her statement at Stuttgart, came down on the side of the noble Lord, Lord Banks. Is my noble friend aware that I hope that within the time that we have he will adhere more to the suggestions put forward by the noble Lord, Lord Bruce? It is quite clear to those of us who recognise the poker game that is going on in this respect that, until such time as they do not have the money to spend on agriculture, they will continually overspend. That is what has brought them to their present position of shortage of money. If we give the impression, as did the noble Lord, Lord Banks, and as my right honourable friend the Prime Minister seemed to give in her statement after Stuttgart, that there is a chance of giving them more
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money before they have shown that they can adhere to the restraint which the future needs if the Community is to continue, then I think we shall be running away from our responsibilities. The point that I am suggesting to my noble friend is that at this stage we do not countenance any increase in own resources until such time as the common agricultural policy has been reformed to a point where there is real reason to expect these surpluses to be no more.
Lord Cockfield: My Lords, I am grateful to my noble friend Lord Harmar-Nicholls for what he has said. I had sensed that there was a difference of opinion between the noble Lord, Lord Bruce of Donington, and the noble Lord, Lord Banks; but, with respect, I do not regard it as part of my function to endeavour to resolve differences of opinion of that kind. So far as Her Majesty's Government are concerned, the position was put with absolute clarity by my right honourable friend the Prime Minister in the statement which I read out to your Lordships; and I do not think it is either necessary or right for me to expand upon that statement.
4.35 p.m.
Lord Diamond: My Lords. I rise to assure the noble Lord, in response to the last sentence of the Statement, that he can rely upon the full support of this section of your Lordships' House as well in the line which the Government are taking. Is he aware that his further explanation (in reply to the question of the noble Lord, Lord Bruce) of what the Government intend is fully acceptable? On that same note, may I ask what is meant by the words in the Statement, that "appropriate steps" to ensure the United Kingdom receive an agreed settlement will be taken? "Appropriate steps" may mean appropriate in the view of the Government or appropriate in the view of other parties to this argument. Would the noble Lord tell us what these appropriate steps are? I do not hide from him the hope that his answer on this will be as satisfactory as the answer he gave to the noble Lord, Lord Bruce.
On a point of information, may I ask whether the presidential suggestion of a compromise with regard to agricultural payments was—as it seemed to me and my arithmetic—a totally nominal amount, an amount which, in relation to total agricultural payments, was so small as a percentage, so infinitesiminal, as hardly to be entitled to call itself a compromise at all? Do I have the facts right or have I misunderstood what is intended in the Statement?
Finally, could the noble Lord tell us on what basis the settlement at Stuttgart was interpreted? Presumably, when this settlement was arrived at the Prime Minister had in mind a certain figure which would be likely to result from the formula. As I now understand it, there is some argument as to how one interprets the formula. It may be that the formula was not very precisely worded and is therefore capable of more than one interpretation. But surely it must be the case that the Prime Minister had in mind a particular figure which would have resulted from her application of the formula in accepting it. Can the noble Lord tell us whether that is the case and whether it represents what is now described as the full refund?
Lord Cockfield: My Lords, I am grateful to the noble Lord for his assurance of support in these matters. He asked first of all what was meant by the statement that appropriate steps will be taken. The position is this. The budgetary procedure is not yet complete and the budget will probably return to the Council in the autumn. Therefore, there is a further opportunity of these matters being pursued on that occasion. It is certainly our intention to insist that the matter is dealt with until a satisfactory conclusion is reached.
So far as the point the noble Lord raised about the presidential compromise, the position is this. The total figure that we thought that we were entitled to—in fact, the total figure that we believe we are entitled to —is 408 million ecu. The figure that emerges under the presidential compromise is between 305 million ecu and 310 million ecu. That gives a shortfall of 100 million ecu. That is quite a considerable figure. It is perfectly true that there is an attempt, as I mentioned when I was replying to the noble Lord, Lord Banks, on the part of certain other member states to claim that the basis on which the figures are calculated should be changed. We are simply not prepared to accept that a change of that sort should be made.
The Principal Deputy Chairman of Committees (Baroness Llewelyn-Davies of Hastoe): My Lords, is the noble Lord aware that this House very much shares the concern expressed in the Statement about the non-obligatory expenditure, that the increase in agricultural expenditure plus the necessary provisions for the refunds for West Germany and the United Kingdom will he at the expense of the regional fund, the social fund and possibly of the Lomé countries, and so on; and that we very much share the hope that in the discussions which will be forthcoming, as the noble Lord has said, Her Majesty's Government will pay very great attention to this?
Can he confirm what was stated in the Economist last Friday, that under the Treaty of Rome the Commission has a legal obligation to balance the priorities of policies and that while the whole House will understand the Community's wish for increasing their own resources, there would be very little practical point if it were all to be dissipated in agricultural expenditure and not in other ways?
Lord Cockfield: My Lords, I am grateful to the noble Baroness for what she says. It is perfectly true that the very big rise in expenditure under the common agricultural policy has tended very much to be at the expense of expenditure on the social and regional policies. This is one of the reasons why we believe that the agricultural expenditure needs to be restrained. So far as the question of an increase in own resources is concerned, again, with respect, I must come back to the Statement made by my right honourable friend the Prime Minister, because she made it clear that any change in the level of own resources was dependent upon reaching an agreement on effective control of the rate of increase of agricultural expenditure inter alia. So that that point is, in fact, very fully taken aboard.
Lord Molloy: My Lords, is the noble Lord aware that what is perhaps giving most people the largest amount of concern is the fact that, as the noble Lord. Lord Cockfield, stated in answers and read in the Statement, each time the Common Market reneges on an agreement, we have to preface that agreement, and the fact that they have not honoured it, with the words "It was an agreed entitlement." It was an agreed entitlement which they have not honoured. There is no doubt about that. That is why, as my noble friend Lord Bruce of Donington has said, I believe we must see that the noble Lord. Lord Cockfield. the Financial Secretary and, indeed, the Government receive full support from everyone in this Chamber and, I hope, in the other Chamber as well. They will get the full support of the British people all right.
But there is another very interesting assessment which I have made, and which I hope the noble Lord, Lord Cockfield, may be prepared to consider. Those of us with experience and who have served in the European Parliament have come up against this sort of thing before. It is very difficult for some Members of this House or of another place to imagine a senior civil servant entering the Parliament, going up to the Dispatch Box and telling us what we ought to do. But that is how it works.
When we had the authority, though we might have been defeated in a so-called democratic vote, we could stand up and say, "We cannot accept this. This has raped the Rome Treaty. Therefore, we will take this hack to our Parliament". When we could do that, we could usually force some form of justified compromise. After the direct elections, that withered on the vine and so did our policy. All that happens now, as each year goes on. is that we are told of the temporary shortfall in what Great Britain should get, and I am rapidly coming to the conclusion that there is nothing so permanent in the EEC as a British shortfall from the proper legal entitlement. Therefore, the Government are entitled to our support. We want fair play, because that is what the British people voted for in the referendum. They did not vote for this fancy fandangle which is going on.
The noble Lord, Lord Cockfield, can tell his colleagues that they can count on the full support of this House, of another place and of the British people as a whole, so that, by the time the 1984 budget goes before the European Parliament, they will know beyond all peradventure the support which the Government are getting from Her Majesty's Opposition, from all other parties and from the British people, in trying to rectify what is an appalling, grievous wrong to our nation.
Lord Cockfield: My Lords, I am, of course, grateful to the noble Lord, Lord Molloy, for the support that he offers. I do not always enjoy it, so I am particularly grateful to him. I must take issue with some of the points that he raises. It simply is not true that the Common Market always reneges on its agreements. As the Statement itself makes absolutely clear, so far as 1984 is concerned, the gross provision made in the draft budget correctly provides for a refund to the United Kingdom of 750 million ecus net, and so honours the Stuttgart undertaking fully.
Lord Oram: My Lords—
Lord Denham: My Lords, I know that the noble Lord, Lord Oram, has been trying to get up for some time. But we have been going on a long time and I think perhaps, after he has asked his question and my noble friend has replied, we then might move on to other business.
Lord Oram: My Lords, may I ask the Minister whether he will address himself to what I think was the last point made by the noble Lord, Lord Diamond, which I do not think received an answer. If I got it aright, it was this. If the other member countries succeed in maintaining a different method of calculation in respect of the last repayment, will it not be the case that that method can be applicable to the rebate agreed at the Stuttgart meeting in respect of the draft budget? Therefore, is it not doubly important that the Government's resistance to that method of calculation be reinforced?
Lord Cockfield: My Lords, I entirely agree with the noble Lord. I am sorry if he and the noble Lord, Lord Diamond, feel that I did not answer the point adequately. But I entirely agree that we must not accept this change in basis. It is wrong in itself, because it represents a departure from what has always been done in the past, and it clearly would have implications for the future. I am grateful to the noble Lord for underlining the point.
Lord Denham: My Lords, I am afraid that I have slightly misled your Lordships in that I am told that my noble friend Lord Bessborough has been trying to get up for a very long time, so perhaps we may have his question, too. I apologise to your Lordships.
The Earl of Bessborough: My Lords, I apologise for delaying the proceedings further, but I should like to ask my noble friend this question. While of course welcoming, as all your Lordships have done, the tremendous efforts of my right honourable friend the Financial Secretary to get fair and full refunds on the budget, can my noble friend say one thing further about own resources and the future financing of the Community? I listened with interest to the repetition of the Statement made by my right honourable friend the Prime Minister on Stuttgart, but can my noble friend tell us whether any consideration has been given to alternative financing of Community institutions in the future other than raising the VAT ceiling? For example, there was some discussion in the past about a levy on imported energy. I wonder whether my noble friend can tell us if other methods of financing are being discussed?
Lord Cockfield: My Lords, as my noble friend said, there has been discussion from time to time about alternative methods of raising additional finance. So far at any rate, these propositions have not made any significant progress. I am not in a position, at the moment, to say exactly what progress has been made in the discussions leading up to the next summit at Athens, where proposals will be tabled, or what alternative proposals are being put forward.

Waterways: Commercial Use
4.48 p.m.
Debate resumed.
Viscount Hanworth: My Lords, in the 19th century we had a network of canals of over 4,000 miles of navigable waterways covering most of the country. The reason for the decline of the network as a commercial proposition was primarily that most of the canals could accommodate only narrow boats with a carrying capacity of about 30 tons. The decline was hastened by often quite unscrupulous competition by the railways, who usually built their new tracks on alignments adjacent to the canals. Today there are still some 2,000 miles of usable narrow, or fairly narrow, gauge canals, which are being used for an ever-increasing number of leisure craft. Some people hope that, to some small extent, they may again be used for commercial purposes, but this would make very little difference to the overall national transport position. There is, however, a tremendous potential for the wider waterways leading from the Humber, the Mersey, the Severn and the Thames, and for bringing such wide waterways further inland.
The continent has a network of wide canals taking boats with a carrying capacity of 1,500 tonnes, and even more. Their use in general on the continent tends to increase. Water transport may be fairly slow but not always slower than the railway goods train. Traffic which comes from the continent by sea could in fact be quicker if the whole journey is made in one boat without unloading. Moreover, the increasing congestion on the roads and in concentrated dock areas would be avoided.
Water transport for heavy goods is the cheapest method of transport. As has already been said, from an energy point of view it is at least five times as efficient as a lorry and about twice that of rail. Already there is a very substantial amount of inland and estuarial waterways transport. A recent survey estimates it at over 2,000 million tonnes annually, compared with about 80 million tonnes on the waterways owned by the British Waterways Board. The concept therefore of making it possible for the traffic to move further inland is a sound one. Quite apart from lessening heavy lorry traffic, it can provide useful competition if only it is given even handed treatment and some encouragement.
No doubt the Government will stress the recent opening of the Sheffield and South Yorkshire Navigation, but the history of the project, costing not more than £16 million, has been one of 10 years of Government fiddling and prevarication. Without denigrating too far the result, the point must be made that the carrying ability of boats able to use the new canal should have been 1,500 tonnes, not 700 tonnes, the reason being that continental boats are predominantly of this larger size. It is questionable how many 700-tonne boats are in fact available for this new traffic. I ask myself whether once again we are seeing the dead hand of the Treasury making savings, resulting in enormous expenditure at a later date. Clearly this is what they have done on the motorways. A 10 per cent. cost improvement in the specification should have given perhaps another 15 years' life to

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some of the motorways instead of failure after as little as five years. We do not want to be penny wise and pound foolish in this new area.
Having in some respects criticised governments for inaction and other failures, I do bear in mind that today we have to make economies. In very general terms, what I think the Government should do is to ensure that the improvement and extension of our waterways has the same priority and help that other methods of transport already receive. Only very recently have commercial waterways been put on a level with railways for improvement grants. Why was this so long awaited? Capital loans with interest charges seem somehow to be lost in the overall loss-making of, for example, the railways. And the new roads, at £1 million a mile, seem to be financed without too much trauma.
At a recent council meeting of the Inland Waterways Association some members thought that perhaps the British Waterways Board should come under the Department of Transport and not the Department of the Environment. I do not believe that this is so, but there is a possible case for putting the commercial waterways under the Department of Transport. At least it is worth thinking about.
What I now ask the Government to do is to press ahead with the Severn scheme of producing a commercial waterway to Worcester, and hopefully beyond. But the Government seem to have forgotten about the extension of the River Trent to Gainsborough and Newark.
One cannot end without mentioning the unhelpful attitude of the dock unions in this extension of waterway use. I very much hope that in the future they will not take the narrow view which has led to so much unfortunate redundancy in our London docks.
4.55 p.m.
Lady Kinloss: My Lords, this afternoon we are discussing one of the great assets of our island, which so sadly is too little used—its inland waterways, many natural, some manmade. It is however our good fortune that the majority of this system, created largely before the 18th century, still exists. Indeed, some waterways were already in use in Roman times. What in York we call staithes were elaborate quays which served a highly developed system of transport. Although water transport was one of the earliest methods of moving goods on a large scale, after the coming of the railways and tarmac roads the waterways had little further investment and became the poor country cousin of rail and road transport. As a result, the potential of transport on waterways has almost been ignored—I think to our future detriment. I am very glad that in the past few years, whichever Government have been in power, they have shown a slight but most welcome change of thought on our waterways potential.
In June of this year the Sheffield and South Yorkshire Navigation, after major improvements were completed, was reopened for use. When speaking in your Lordships' House on the Sheffield and South Yorkshire Navigation in March 1977, I mentioned that whenever I come to London on the train from
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York I pass between Selby and Doncaster the canal that is part of this navigation, and from time to time see a few barges moving slowly in the sunshine—a very pleasing sight. In fact, I saw two this morning. But 40 minutes later we pass through Newark, beside the A1(M), and there one sees lorries, one after the other, with black exhaust smoke pouring into the atmosphere—quite horrible. One can imagine the smell of the fumes, whereas on the canal there is little noise, pollution or visual intrusion. On the contrary, canals are pleasant to look at. I understand too that there are very few accidents, which is surely very reassuring.
May I ask the noble Lord the Minister who is to reply why it is that whenever the Secretary of State has been asked to make a statement in answer to a question on Section 13 of the Transport Act 1978 the replies have invariably referred to the British Waterways Board's network of inland waterways. The British Waterways Board's commercial waterways comprise 350 miles only—about one-third of what is in fact available for freight: some 900 miles. Would the Minister not agree that all the waterways should be considered as a whole? For the life of me I cannot see why not. Why is there not a national policy for the whole of the waterways? Why mention only 350 miles when 900 miles are actually available?
I know many people think of water transport as a slow means of getting freight from A to B. Surely, when much of that freight has travelled by sea—hardly the fastest method—a 70 miles per hour mad career on the motorways would seem hardly necessary for the last part of the journey. And surely it is far more expensive. I have said once before—last time I said it I am told that I convinced certain noble Lords, so I shall say it again—that one tug can tow, or that a large craft can carry the equivalent freight of roughly 20 juggernaut lorries. This is surely a saving of oil of every kind, and also less pollution of the atmosphere. I am told that the Government wish to beat inflation. All power to them. Can the waterways not help them in that battle? I think that they can.
5 p.m.
Lord Davies of Leek: My Lords, I do not intend to keep the House for very long, and I hope that my speech will be short. The noble Lady Kinloss, has put forward a fundamental argument about the volume of cargo that can be carried by the canals compared with roads. I believe that the country does not take into account the daily accidents on motorways which are murdering people nearly every hour. The economic cost to the country of road transport has never really been worked out. For too long, the road lobby has dominated the British parliamentary system. We need a balance, and we need co-ordination between rail, water and roads. This has not yet been achieved but it should be the duty of one Parliament, even it if it did nothing else in its five years of power.
Having said that I shall be brief, I wish to pay tribute to my noble friend Lord Plant for having raised the issue of the canals and for the assiduity with which he prepared his speech. He said nearly everything that could be said about canals and it would be pendantic and reiterative of me to merely repeat masses of statistics. The statistics are there, but your Lordships will get none from me because it would only be repetitious.

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However, I wish to add that the time has come for us to look at the waterways also from the point of view of their therapeutic value to society. Tens of thousands of people now enjoy our waterways during their holidays. The value of these quiet and lonely places in providing people with cheap holidays is inestimable. More and more people are enjoying that kind of holiday, and more and more are the waterways—to pay tribute to the board—trying to compete and to make available the services needed by those people who enjoy boating on our canals.
I have two other small points to make in this four minute speech, and then I shall sit down. First, I am sure that botanists and others will join with me in saying that here, if ever, there is a chance of recreating on our canal banks many of the wild flowers which have been killed off by the poisonous industrialism which pollutes our atmosphere. I wish the Government would undertake to re-create upon our canal banks the herbage, the flora and the hedgerows which make Britain beautiful. One must not forget that in respect of tourism our waterways are of great value to the British public and are a great joy also to foreigners who come here. Secondly, I wish to thank once again the noble Lord, Lord Plant. I shall now keep my promise to speak only three or four minutes and will sit down.
Viscount St. Davids: My Lords, I am deeply grateful to the noble Lord, Lord Plant, for raising this Question this evening. I listened to him with great care and found that I agreed with every word he said. If I had any criticism to make of his remarks, it would not be to subtract anything from them but rather to add a few small items in odd corners. I am also very grateful to the noble Lord for the remarks he made about our present chairman of British Waterways, Sir Frank Price, who I believe has done wonders.
I must say that, as a fairly well-known member of the Inland Waterways Association, when Sir Frank Price first took up his post I was a little doubtful. It was a time when a great many prominent members of the Labour Party were taking up various posts in nationalised industries, and I wondered a bit. I have since ceased to wonder. The great majority of them have shown themselves to be magnificent managers. The only remark I might make is that very few of them now seem to remain members of the Labour Party; I wonder why? But Sir Frank did particularly well. The noble Lord, Lord Plant, mentioned the increase in cargo carrying on the waterways. This was one of the notable achievments for which Sir Frank ought to be praised. This achievement came at a time when other industries—in a period of financial crisis—were going down; but cargo carrying on the inland waterways was quite markedly going up, far above any figure one might normally expect.
When I heard recently that Sir Frank Price was likely to be replaced, I was rather sorry and rather surprised. I was rather less surprised when I heard that a replacement had been postponed. Sir Frank will be a very difficult man for whom to find a successor. If I might slightly alter the words of an old music hall song,
"To find a face like our old Price
"You've got a long way to go".
Indeed you have; and when a successor is found he will
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have to be a very good man or matters will have taken a turn for the worse.
When Sir Frank came to the chairmanship of British Waterways, he inherited what was almost a load of all old rubbish. The cargo carrying waterways were too small. In many ways they still are, but improvement has started. There are fresh schemes, as everyone knows, on the Severn; and I understand that another is scheduled for the Trent. No doubt we shall see more. A great deal can be done about our cargo waterways but I shall not speak on that aspect this evening because that has been done so magnificently by the noble Lords and the noble Lady who have preceded me.
The only point I should like to add to what they have said is that all this has taken place in the areas of what might be called the new ports. Our old, traditional ports—London, Hull and the rest—are being left out. This is largely because of the old Dock Labour Board scheme which continues to debilitate them. There is no reason why they should be left out. The water still flows to Hull, to London, to Liverpool and to Bristol the way it always did—and the ships can go there just as they always did. It is only the slow movement of the law that is delaying this.
I should like to mention two other forms of waterways with which Sir Frank has had to deal. One was the pleasure waterways; the narrow canals which cannot be made into cargo carrying canals because they are too narrow. One cannot widen them because if one did, one would need bigger locks. The locks would need more water and the reservoirs cannot provide it—it just cannot be done. I wish it could, but there it is. Nevertheless, the narrow canals serve a most useful purpose. Their primary purpose is actually carrying water, but they also have a great value in fishing, pleasure boating and all other manner of amenities.
In the case of pleasure boating, there have been some truly remarkable changes. Last summer, I brought my brand new electric drive cruiser right across England, from Evesham to London, through the inland waterways. In a season when hirings of leisure traffic were rather worse than usual, there were a great many boats on the move. It was noticeable also how many of their crews were foreign. Navigating our waterways were Swedes, Danes, French and Germans. Indeed, it appears that the Dutch prefer our smaller, more intimate waterways to their own grand, wider waterways. What is more, I learnt that while we ski upon the Swiss mountains, the Swiss are around their fires studying maps of our canals. That is altogether as it should be. It shows that there is a very considerable amount of foreign currency earned on our inland waterways, quite apart from the fact that those waterways are keeping very large numbers of people happily at home who would otherwise be going abroad and spending foreign currency.
I have only one word to add to that and that is to congratulate Her Majesty's Government on the amount of money they have been able to find to help solve some of the problems which were affecting our cruising waterways, the big, most notable ones being Boddington Reservoir and Blisworth Tunnel, which I understand will be back in action next spring. I congratulate the Government on this help.

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I want to say a word about the remainder waterways, and this really is the load of rubbish area. You can do practically nothing with a waterway that has been closed. It loses all revenue, not only loses all revenue but goes on spending money because breaches in the banks, blockages in the below-level culverts and all the rest are extremely expensive. They not only yield no revenue but if they are not dealt with they damage the countryside, flooding it on the contours above the canal by lack of drainage, and flooding it by damage from breaches in the banks in the ancient waterway, downhill damage to farmland and to housing. A canal never fails safe. You can close a road and let the grass grow over it, and in the end it becomes a nice walkway like an old Roman road. But you cannot do that with a canal; if you leave it alone it always goes wrong.
The remainder waterways were an invention by Act of Parliament. The idea was that they should be treated in the cheapest possible manner. You could not get rid of them; you just had to spend the least amount of money you could on them, and that was right. But the question was, what was the cheapest manner? Recently the British Waterways Board asked an eminent firm of consultants what should be done about about the Montgomery Canal, over 30 miles of waterway wandering about along the rural edges of Wales. Road bridges had been lowered over it in places. In places it was dewatered. One or two small patches had been made navigable for various purposes. But in general it serves no great purpose. The question was: what was the cheapest thing that could be done with it?
The consultants came up with a remarkable answer: the cheapest thing would be to reopen it as a cruising waterway as quickly as possible. The figure they gave for the cost of reopening it was somewhat under £10 million. From that would be subtracted sums provided by local authorities, by voluntary bodies and by the use of voluntary labour. There would be a continuing cost to the British Waterways Board for upkeep work after reopening of £86,000 a year, a large sum. Then they went on to the happier side. The 30-odd miles of waterway when reopened would be a very considerable amenity in its area. Well, in these days of tight cash we are not really prepared to spend £10 million merely towards amenity. But what they then said was that it would provide, strangely enough, many millions of pounds a year in revenue to the area that it ran through. The waterway in fact from the Treasury point of view would be a very good investment indeed. They also pointed out that when the waterway was complete and running they had identified some 860 permanent jobs along the reopened waterway. Some would be on the waterway itself no doubt, but the others would be hotels and shops, all the things which would be needed by the users of the waterway. The bargain was one of the best I have ever seen. No doubt the Treasury have already taken it into their account, so possibly I need not go much further, except that I thought your Lordships would like to hear about it.
There is a great deal that can be done on all these waterways. We simply must stop treating them the way we treat roads; we must treat them in a different
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way from the way we treat roads. How many roads have been closed in recent years? I do not know that any great length of road has been closed recently. We do not seem to take these matters into account. We are costing it on the waterways; I wish we would cost it on the other forms of transport as well. Costing it on the waterways, it appears to come out as a very good bargain, both to enlarge our cargo waterways, as the noble Lord, Lord Plant, has told us, and to keep in good nick our pleasure waterways, and now it appears that the remainder waterways should be put into the cruising system as soon as they can be because they are a very good bargain indeed. I do not put this forward as a way of spending money but as a way of saving money to the community. Therefore. I commend the Question put by the noble Lord, Lord Plant, to Her Majesty's Government, who I think may have some very pleasant things to say about it, possibly not tonight but at some moment.
5.17 p.m.
Baroness Gardner of Parkes: My Lords, I too should like to thank the noble Lord, Lord Plant, for giving us the opportunity to debate this topic tonight. I find it very difficult to follow the noble Viscount, Lord St. Davids, because I think there is no one who knows more about the canal system and the waterways of this country. No one has done more good for people through the wonderful schemes he has had for training young people on the canal basins in London, something that really must be commended.
I was chairman of the London Canals Consultative Committee for three years, and a member of the Inland Waterways Amenity Advisory Council. It was during those times that I had so much to do with the work being done to improve the canals in London. At that time all the riparian boroughs were involved. We used to take trips through the London canals to study what the situation was and what improvements could be made. It is quite fascinating to me now to see that nearly all those plans have been realised and that the canal in London is now a great amenity and an advantage for those who enjoy both the use of it and the view of it.
I find one thing still quite comical. This has applied in different areas. I was a Parliamentary candidate in Blackburn, and the same thing was said to me in Paddington. When I said to people, "How lovely to have that view of the canal at the very end of your garden", the answer was "It is nothing but a nuisance. We do not like it. People throw things in it, and we are afraid of the children falling in it". Views on canals are surprisingly mixed. I happen to be a canal enthusiast and therefore I see only the good in it, but I was quite surprised at how commonly the other view was taken. There are lovely streets which overlook the canal. Blomfield Road is the classic and famous street in London. There is also the lovely St. Marks Crescent in which there is a house where one of your Lordships has the pleasure of living. There are other areas where people overlook the canals but where they are not making the best use of that lovely amenity.
The freight issue is quite different. It is this subject we are here to debate tonight. The remark by the noble Lady, Lady Kinloss, that one large vessel will carry as much as 20 juggernauts brings to us both the good and

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the bad of the canals. It is wonderful in terms of efficiency. It is wonderful in terms of what it could do. But at the end of the line, when the goods eventually arrive somewhere, probably 20 juggernauts are needed to transport the goods to wherever they are wanted. That is, unfortunately, the disadvantage of the canal system; that the canals do not go from where the goods are to where they are wanted. The canals and the waterways are on fixed routes. It is therefore important, if we are to develop a freight system which makes use of the waterways, that we develop terminals and ways in which to co-ordinate the various means of transport. Indeed, this point was made very well by the noble Lord, Lord Davies of Leek. He said that what we need is co-ordination between roads, rail and waterways. That is true. If we have waterways taking goods somewhere where they are not going to be needed or used and there is no way of moving them on, the freight system will never really take off.
I am sure that your Lordships are already aware that in order to carry freight on the waterways one must have a much higher standard of dredging. Heavily laden vessels sink much lower in the water. That is a point that has again been made by a number of noble Lords. Therefore, although there are 900 miles of canals that could be available, only 350 miles are actually in commercial use. I can see that the cost of dredging is one of the problems. The amenity use, on the other hand, is great and the use of waterways for pleasure cruising is fantastic.
In London of course every day one can see the barges of London rubbish going down the Thames. In spite of that commercial use of the Thames we have seen an upgrading in the standard of the water and 300 varieties of fish have now been caught in it. It is sad to realise that the London Docks have gone completely. There is no way that I can see the London Docks ever coming hack. Indeed, plans are already afoot to establish industry and homes for people in those areas. Therefore, the suggestion that goods could come by sea from abroad and then travel all the way to their destinations within this country by water is a fairly limited one. It is a question of the size of the navigable waterways, the areas to which the goods are going and where they are coming from.
There are many aspects of this question to be considered. Everyone of us must, environmentally, support the maximum use of canals for freight. But I am a practical person. I am very much involved in transport and the planning of the transport of goods to people in London. I therefore accept that wishing for something and thinking that it should be nice to have is not enough we are to see the canals come hack into a really productive and useful freight carrying role then greater attention must be given to the development of co-ordination and systems at the end of the canals so that this can come about.
5.24 p.m.
Lord Underhill: My Lords, I am certain the whole House will be grateful to my noble friend Lord Plant for tabling this Question on the use of our waterways. We are also grateful for the very detailed information which he gave in his comprehensive speech. I hope that other noble Lords have the same feeling as I do: that those who have been taking part in this debate
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have included a number of noble Lords who have expert knowledge and experience of this subject. This again proves the value of debates of this kind in your Lordships' Chamber.
As the noble Baroness, Lady Gardner of Parkes, said, the Question is mainly directed at freight and goods transport on the waterways. However. I hope the Minister will have a few words to say about the other development of the waterways—on the emphasis that has been given to the cruising waterways and their value for tourism and for health and recreation.
I clearly recognise that any investment of public funds must have practical possibilities and serve a constructive purpose. I readily appreciate the point which the noble Baroness, Lady Gardner of Parkes, made on the need for co-ordination. So often we talk about the integration of transport, but we must talk about it in practical terms. The points made by the noble Baroness today emphasise that we do not have a number of separate systems—road, rail, pipelines, waterways and coastal shipping. There should be the maximum possible co-ordination and integration between them.
In recent years the British Waterways Board has demonstrated practically the possibilities of the use of the waterways. I was pleased to hear a number of noble Lords pay tribute to the work of the present chairman, Sir Frank Price, and his colleagues. I have known Sir Frank for the best part of 40 years and I am not surprised that he has proved to be an excellent chairman of the hoard, having seen his outstanding service in local government in Birmingham. It is not only a question of practicalities and acting as a good chairman of the board: he has been really enthusiastic about the waterways. He is also a fervent believer in public service.
I was pleased that my noble friend Lord Plant emphasised the comprehensive nature of the services which the hoard now has. I remind your Lordships of what he said. The service for customers now covers an integrated system of depots, docks, wharves and warehouses. It must be emphasised that in 1982, despite the recession, the increase in the freight carried on the British Waterways Board's own system was 11 per cent. That indicates the development that has taken place and is taking place.
It may be argued—but I hope the Minister will not—that this is still unimportant and that the conveyance of just 5 million tonnes of freight is only a small fraction of the whole. It is only a small fraction, but the figure relates to freight carried on the British Waterways Board's commercial waterways only. I was pleased that the noble Lady, Lady Kinloss, stressed that this relates only to the 350 miles of the commercial waterways covered by the BWB.
In that connection, it is interesting to note that only a short while ago the Marine Transport Centre at the University of Liverpool issued a report which stressed that the use of the inland waterways in the United Kingdom for freight transport is far greater than the figures that I have mentioned suggest. It asked: what is the definition of waterways? I will not go into it now, but the Marine Transport Centre at the University of Liverpool gave a new definition of waterways and, by including estuaries. it came up with the figure that no

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less than 63 million tonnes are moved. Further figures show that 35 million tonnes were moved more than 25 kilometres and over 30 million tonnes were moved more than 50 kilometres. We can see a different picture when we are given a report of that nature.
The references to the Severn and South Yorkshire Navigation indicate that the figures may be more important when one looks at them region by region. It is possible to deal with them by regional importance and not just nationally because in many parts of the country there are no waterways of any importance at all. We have to keep in mind the increasing importance of our trade with other European countries. The main estuaries of the Humber, Thames and Severn are vitally important.
I should like to emphasise what one or two noble Lords have said. I do not want to enter into a road, rail or waterways lobby. Mine is a transport lobby. We should get the utmost value that we can in all directions from our transport. Today we are talking about waterways. It must be emphasised that, unlike road improvements, improvements to waterways carry a burden of interest charges which has to be reflected in the toll revenue. That means that the customers—the people who want freight conveyed on our waterways—are helping to pay for them.
Viscount St. Davids: My Lords, the noble Lord mentions interest charges, as have many other noble Lords, but they have all failed to mention also that the unfortunate waterway has to repay the capital some day.
Lord Underhill: My Lords, absolutely. I was coming to that later when I referred to the outstanding debts. It is a factor that has to be considered. Nobody charges road hauliers the interest charges or costs of maintaining the roads. Therefore in that respect there is not equality of treatment between road and waterway freight.
Again I hope that the Minister will accept that operating costs of waterway transport are low. Reference has been made to the number of lorry loads that can be carried in one modern barge. I should like to bring the figure right up to date, as we are to have the 38-tonne lorry. No less than 18 38-tonne lorry loads can be moved in one modern barge. We know of the worry about the increase of lorry weights to 38 tonnes. Containerisation and container-carrying barges are being developed. Low profile coasters are being designed as a compromise between seagoing vessels and the barge. There is the development of barge-carrying ships, which could be vital for trade direct from inland areas along the waterways to the estuaries and even across to the Continent. The board is also developing modern handling equipment.
Practically all your Lordships emphasised the development of the Sheffield and South Yorkshire Navigation. It has always proved successful. The much criticised South Yorkshire Metropolitan County Council contributed £l million to the cost because it saw the value to the area. Local authorities generally recognise the value of waterways for freight transport and most also recognise their value for recreational and tourist purposes. Local authorities all along the
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Severn have recognised the value of developing the Severn Corridor, to which my noble friend Lord Plant referred. It will open up the corridor for larger vessels. I hope that the Government will support that move and give it every possible encouragement. A consultant survey commissioned by the hoard has estimated that 1·1 million tonnes of extra freight traffic could he obtained by the development of the plans for the Severn Corridor.
I am pleased that the Section 36 grants were referred to. I had the pleasure of moving the amendment, which was supported by other noble Lords. I am pleased that it was accepted by the Government. We now have the same opportunity for freight facilities on the waterways as on British Rail. We were also pleased that in June this year the Secretary of State was able to approve the first grant under the new Section 36. In the Department of Transport press notice, issued only on 27th June, Mr. Tom King, the Secretary of State for Transport, referring to the development of an inland wharf, said:
"Modernisation of this inland wharf will enable bulk cargoes such as steel, cement, paper bales, timber and grain which would normally travel by heavy lorry to and from east coast ports to he transhipped at Gainsborough, thereby saving about 50 miles of road travel".
That is not me speaking from this Front Bench but an observation made by the Secretary of State for Transport, which indicates the value of Section 36 grants and also of the development of freight transport by our waterways. I am hoping that, as a result of our debate tonight, the publicity given to Section 36 grants may cause other organisations (both local authorities and private concerns) to see the value of this, make inquiries and possibly develop grants under Section 36.
I do not want to weary the House with figures, but total public expenditure on transport for 1983–84 is said to he £5,170 million. Grants to the British Waterways Board were just a fraction under £35 million. It might be argued that the £5,170 million is for all transport expenditure. But let us have a look at grants and subsidies: for all transport £1,767 million: for the waterways, £35 million. As the noble Viscount, Lord St. Davids, reminded us, over and above this the capital has still to be repaid and the interest still to be paid on the original capital debt. I can recall the debate that we had in your Lordships' House when attention was drawn to the outstanding maintenance for all the waterways—not just the commercial waterways, but the cruising and remainder waterways—of some £150 million because the constant delays have now put up the original costs four or five times. That was shown clearly in the consultants' report.
The waterways are there. No one in their right mind would say that we could let them deteriorate. That is another point that the noble Viscount made. There has been sufficient emphasis on the environmental considerations and on energy saving. Bearing those considerations in mind, we should do everything we can that is economic to use this other means—our waterways—of conveying freight, particularly when urgency is not so important. The waterways are suitable for bulk cargoes. It has been stressed that the board believes that the safety of water transport makes it ideal for the movement of dangerous and hazardous

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goods. I recognise that we are in tight financial circumstances, but I hope that the Government will accept all the views expressed by everyone who has spoken in the debate and clearly indicate that they will have a forward look at the development of waterways, particularly to encourage freight transport, even though we all recognise that the waterways convey only a fraction of our goods.
5.39 p.m.
Lord Lucas of Chilworth: My Lords, at the outset may I join those noble Lords who have thanked the noble Lord, Lord Plant, for having put down this Unstarred Question and enabled us not only to have an extremely enjoyable debate but also to set down the various views. I am aware, as many of your Lordships are, that the noble Lord was with the British Waterways Board for many years. He was vice-chairman from 1977 until 1980.
When he opened this afternoon's debate, the noble Lord drew attention to Section 31 of the 1978 Act. Perhaps I may remind your Lordships that it was my noble friend Lord O'Hagan, when speaking from Benches opposite, who succeeded in persuading your Lordships to accept the amendment which now requires us as a Government,
"to promote a national policy for the use of inland waterways for commercial transport."
So there can be no doubt that my noble friends and my right honourable friends in another place have been, and remain, committed to this ideal.
A number of your Lordships spoke of Sir Frank Price, and I am reminded that Sir Frank is the longest serving public sector chairman. I endorse the general tribute that has been paid to him. Certainly Sir Frank has pursued his job, and his great interest, as chairman of the British Waterways Board with very great energy.
The Government are fully seized of the case for the use and development of the waterways of Britain for carrying freight. But waterways freight must be looked at in the context of the general policy that there must be fair competition between the alternative modes of freight transport and the relative roles of both public and private sectors. As I have previously said in debates of this nature, the customer himself determines the mode of transport that he chooses. While certainly varied modes have developed differently with various economic aspects, at the end of the day it is the customer who makes the choice and pays the price.
The noble Lord, Lord Underhill, and other noble Lords, have referred to the study by the Marine Transport Centre of Liverpool University, which was completed in 1982. The study found that there were 2,351 kilometres of waterways capable of taking vessels over 50 tonnes. Sixty-three million tonnes of freight were carried, involving 2·3 billion tonne-kilometres. That is the point that the noble Lord, Lord Underhill, made. However, this traffic was only 1·8 per cent. of all freight movements in that year by all modes. The British Waterways Board's network accounted for only 0·1 per cent. of all traffic by all modes. So one must accept the fact that traffic on inland waterways has only a very small sharé of all freight traffic, and most of that is within the private sectors of operation. Nor did the MTC study find any
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significant change in the overall volume of waterways traffic, when comparing its results with those of a study carried out nearly 10 years earlier, in 1973, by the Inland Waterways Association.
We hope to commission further studies from which we shall be able to see changes in trends and amounts of traffic. Meanwhile we are not going to block any reasonable attempt to attract more freight on to the waterways. The noble Lord, Lord Plant, pointed out the way in which interest charges are made, and I have to say that in fact he was wrong over that. Interest is paid out of the required real rate of return, not in addition to it. He also spoke of the EEC Treaty of Rome, but this will not apply because of the way that interest charges are treated in the appraisal of the investment proposals.
The noble Lord mentioned in particular, as did a number of other noble Lords, the opportunities that there were. He said that we have to grasp any opportunity, and among a number of opportunities he suggested that the River Severn development was one. In 1979 the board commissioned a firm of market research consultants to examine and report on prospects for commercial traffic on the River Severn, both in the short term and up to the year 2000. In 1981 the board announced its general attitude towards a strategy for the River Severn; but the board has never sought prior approval of the department to this strategy, and it is understood that the board does not envisage any major investment requiring departmental approval. In fact no specific proposal has yet been put before the department; and I hope that the noble Viscount, Lord Hanworth, will accept that in answer to the specific point that he made with regard to the Severn.
Inside British Waterways Board's network and elsewhere the opportunities which there will be for grasping will depend very largely on imaginative marketing policies and realistic investment policies geared to the special advantages of the waterways in certain commercial situations and to making the best use of the assets that are already there. Much of this will be for the private sector to judge in relation to its own investment, because, as we have all accepted, it is the British Waterways Board which operates the smaller number of kilometres, or miles—whichever way one likes to put it—of our commercial waterways. The Government themselves must look closely at this in respect of the board's investment proposals.
It is sometimes suggested—and perhaps it was suggested this evening—that we treat the board unfairly compared with investment in other modes, but I do not think that this is so. All investment proposals require appraisal. In the case of investment in the commercial sector the Department of the Environment needs to be satisfied that the investment would earn a 5 per cent. real rate of return. That is the same real rate as applies in the public sector generally. It is not in addition to the interest payable on borrowings by the board from the National Loans Fund.
But we must face economic facts. As I have said, there seems to have been no change in overall traffic volumes on inland waterways in recent years. The apparent attraction of fuel cost savings by taking domestic traffic on to the waterways is rapidly outweighted by the additional costs of transhipment at

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either end of the journey. The MTC study showed that traffic to and from the open sea accounted for 81 per cent. of total waterways traffic. Most of this traffic used rivers such as the Thames and the Medway—certainly not part of the board's network for either domestic or international traffic.
In 1982 the British Waterways Board's 547 kilometres of commercial waterway cost £11·1 million to maintain. It attracted 5·12 million tonnes of traffic, which paid only £770,000 in tolls and dues—as against the maintenance cost of £11·1 million. In other words, every tonne was subsidised by the taxpayer by £2·11p. The noble Lord, Lord Plant, and I think all noble Lords who have spoken in the debate, have mentioned costs and have said that we must be cost effective. Is a general subsidy of £2·11p for every tonne moved cost-effective?
Overall the board received grant aid from the Government of £33½million. The grant was paid in recognition of the very heavy maintenance requirements throughout the board's total network of 3,285 kilometres. But there is a backlog of maintenance which will cost anything from £120 million to £150 million to clear. The noble Lord, Lord Plant. the noble Viscount, Lord St. Davids, and my noble friend Lady Gardner of Parkes spoke about these costs.
We have through Government financed around 75 per cent. of the annual maintenance expenditure for a number of years: but again over the same period the total freight traffic on the board's network has generally declined. It is also sometimes suggested that roads are favoured over waterways but no one really today can seriously suggest that roads enjoy anything like the level of subsidy given to waterways. Roads are financed from Government revenue on a pay-as-you-go basis in which returns from road users in general cover the costs involved. I know that the noble Lord, Lord Underhill, in particular, will remember the change in the last Budget that related to true track costs of heavy lorries. This position has remained the case with vehicle excise duty having been raised, as promised by the Government when we debated Armitage.
We recognise the environmental attractiveness of waterborne traffic in some circumstances. We have a grant scheme to attract traffic off the roads where there would be a clear environmental advantage. The two grants are the rail freight facilities grant, under Section 8 of the Railways Act 1974, and also the inland waterways freight facilities grant. to which noble Lords have drawn attention today, under Section 36 of the Transport Act 1981. These grants were extended by the Act of 1981 as part of a policy of fair competition. Such facilities are very much more expensive than the comparatively simple facilities needed for freight transport by road.
I need not repeat the details of the grants that my right honourable friend the Secretary of State for Transport announced in June last year. Other noble Lords have done so. We are determined to make effective use of these grants in our continued commitment to waterways and to reduce the effect of lorries on the environment. I underline what the noble Lord, Lord Underhill, had to say when he suggested that
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private enterprise should make better use of these grants. We hope so, too. Indeed, the Government consider that we are giving enough encouragement to the development of the waterways for freight purposes. We believe that we deal with the waterways fairly compared with other methods. Taxpayers' money is, however, not unlimited. We have to be realistic and businesslike.
I wish to turn now to one or two of the points that noble Lords have made. The noble Viscount, Lord Hanworth, reminded us, in his usual measured tones, of the tremendous opportunities in a number of areas. The Government will listen to any proposal that comes forward either from the board or the private sector. However, when the noble Viscount says that water movement is the cheapest form of transport, I can only accept it if I discount the transhipment costs. These are considerable.
Viscount Hanworth: My Lords, I made the point, I thought, that in many cases transhipment could be entirely avoided by the 1,500-tonne ship being able to go directly to where it wanted to unload.
Lord Lucas of Chilworth: My Lords, I am much obliged to the noble Viscount for reminding me of that. That may be so. Nevertheless, the general argument that I have put forward still pertains.
I have mentioned the Severn scheme to which the noble Viscount referred. The noble Lady, Lady Kinloss, spoke of one of our greatest assets. She referred particularly to the coming of the railway and of—I think this was her term—tarmac, which reduced the effectiveness and the use of waterway's. That is an absolute fact of life. As cheaper and more convenient freight movement modes are developed, perhaps one rises and perhaps one loses. Certainly, inland waterways did lose in those days.
In comparing all the waterways, the noble Lady mentioned the 350 miles against the 900 miles. It is right that in many ways they are considered as a whole. That is why grants are given for environmental reasons as well as for actual freight movement. The noble Lady will recognise that the waterways do not make up a total network. So it is absolutely necessary to consider each on its merits. We believe that we are doing that.
The noble Lord, Lord Davies of Leek, in a remarkably short speech which I should have liked to emulate hut which I cannot, spoke particularly of the reclamation of canal banks. That is why we want the British Waterways Board to be able to clear up the maintenance backlog—this estimated £120—£150 million worth of work to be undertaken. It is a long job, but a start has been made. Initiatives are going on in the Birmingham area making use of urban development grants to create canal walkways.
Not surprisingly the noble Viscount, Lord St. Davids, made a splendid contribution to our debate. I wondered for a moment whether he and I would share some time in discussing the merits of the electrically propelled vehicle whether on the waterways or anywhere else. Like other noble Lords, I accept and acknowledge the noble Viscount's immense knowledge of waterways, particularly in the leisure and amenity section. Notwithstanding that, his contribution is greatly appreciated. If I have missed

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any particular point with regard to freight, I shall certainly write to the noble Viscount.
My noble friend Lady Gardner of Parkes made a typically pragmatic speech. She made the point, which I endorse, that there has to be a balance between the existing dock facilities and furthering any other facilities that may make one or the other at some time surplus. As she reminded us, the grants will encourage really worthwhile development.
The noble Lord, Lord Underhill, ranged over a number of topics. I was a little surprised when he reminded us of some up-to-date figures, taking the example of a 38-tonner and pointing out that one boat would carry 18 lorry loads. I have to ask him "Where to, and where from?" We are talking now of 38-tonners, one of the main objects of which is to move large quantities over wide areas. Sadly, the waterways would not provide that kind of mileage or network.
Lord Underhill: My Lords, I thank the noble Lord for giving way. The same problem of "From where to where?" can arise with a 38-tonne lorry. Some of their loads will have to be transhipped as well.
Lord Lucas of Chilworth: My Lords, that is true. But, as the noble Lord and myself know, the whole object of that lorry is to take a larger amount of goods more miles than hitherto before they have to he transhipped—a long, long way from where they started out.
Investment in waterways has to be economically justified. The noble Lord, Lord Underhill, stressed this in his closing remarks. We have to pay regard, he said, to the economics. This is a phrase frequently heard nowadays. Even though we hear of it frequently, this does not means that we should not take even greater notice of it. The methods that we use to appraise whether it would be justified are even-handed compared with methods used for investment in other transport modes. Waterways are treated on the same basis as rail for the purpose of grants where there would be environmental advantages from switching traffic from roads. In short, we have no prejudice and, if I may say so, on my own behalf, I have no prejudice against waterways as a means of carrying freight.
I hope that this short debate, initiated by the noble Lord, Lord Plant, will have served to clear up any misunderstandings there may have been. I look forward to the waterways growing in importance, but on their own merits, as an economic and environmentally attractive way to carry goods.

Severn-Trent Water Authority Bill
Reported from the Unopposed Bill Committee with amendments.
Medical Bill [H.L.]
The Bill having been returned from the Commons on Friday last agreed to with amendments, the amendments were printed pursuant to Standing Order 47.
Value Added Tax Bill [H.L.]
The Bill having been returned from the Commons on Friday last agreed to with an amendment, the amendment was printed pursuant to Standing Order 47.
Car Tax Bill [H.L.]
Returned from the Commons agreed to.
Standard Chartered Merchant Bank Bill
Brought from the Commons, read a first time, and referred to the Examiners.
King's College London Bill [H.L.]
Returned from the Commons agreed to.

London Transport (Liverpool Street) Bill
Returned from the Commons with the amendments agreed to.
House adjourned at six o'clock.