Lords Sitting of 7 March 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 Oxford.

Civil and Public Services Association: Appointment
2.36 p.m.
Lord Beloff: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they see any security implications in the appointment of a member of the Communist Party to be an assistant secretary of the Civil and Public Services Association.
The Lord Privy Seal (Baroness Young): My Lords, procedures introduced following the Radcliffe Committee Report in 1962 ensure that trade union officials who are believed to hold Communist views are denied access to sensitive information. The Government are satisfied that these procedures work effectively.
Lord Beloff: My Lords, while I thank my noble friend the Leader of the House for her very encouraging reply, may I ask whether this particular question has been referred to the Security Commission since the publication of the Radcliffe Report, which is now more than 20 years ago?
Baroness Young: My Lords, I have no doubt that the Security Commission takes note of this Question and what lies behind it.
Lord Cledwyn of Penrhos: My Lords, while thanking the noble Baroness, Lady Young, for her
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reply, is it not important that we should get this matter into perspective and draw a very careful distinction between cases of breaches of security committed by people in public service—such as Prime, Aldridge, Ritchie and others—and cases such as the vice-chairman of a trade union? Are we not in danger, if this is pursued too far, of getting into a McCarthy witch hunt, which is totally alien to everything we know in this country?
Baroness Young: My Lords, I am glad to confirm that the Government cannot and would not wish to interfere with the internal affairs of independent trade unions. But where those officials are identified as having Communist views, then the procedures which I have identified will apply.
Lord Renton: My Lords, is not the important point for consideration the question of whether the loyalties of Communists are first to this country or first to Communism and to international Communism?
Baroness Young: My Lords, one must draw a distinction between civil servants who are thought to hold Communist views. No one who is thought to hold Communist views or, indeed, to be a member of a Fascist organisation, would be employed on work that is vital to the security of the state. In the case of the official of a union, the procedures identified—and which were proposed by the Radcliffe Committee and accepted by the Government—will come into play.
Lord Molloy: My Lords, does the noble Baroness the Leader of the House not agree that it is a fundamental responsibility of any Government to see that matters which are highly secret are kept that way in the interest of the ordinary citizens of this country, and that such action must be taken almost every minute of every day? Also, can the noble Baroness say that, whenever this nation of ours has been sadly betrayed over the past 50 years, any members of the Communist Party were involved—or were some of them not accepted members of what is known as the establishment from some of our universities?
Baroness Young: My Lords, the answer to the first question asked by the noble Lord, Lord Molloy, is that

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the security of the state is, of course, a matter of extreme importance and always will be. I cannot comment on the noble Lord's second question because it was not sufficiently clear what it was that he was asking.
Viscount St. Davids: My Lords, is the noble Baroness the Leader of the House able or willing to explain why, when she speaks about the misdeeds of Communists and Fascists, the Opposition do not (according to their cheers) object to the misdeeds of Communists but do object to the mention of the misdeeds of Fascists?
Baroness Young: My Lords, when we come to read Hansard—and I hope that the noble Viscount will do so as well—I believe that the noble Viscount will recognise that what I said was that no one who is thought to hold either Communist or Fascist views will be employed on work of a sensitive nature.
Baroness Wootton of Abinger: My Lords, has not the scope of the Question been somewhat improperly enlarged? The Question was, were there any security implications in the appointment of a member of the Communist Party. We are now talking about people who are thought to hold Communist views, are we not? Is that not an unjustifiable enlargement?
Baroness Young: My Lords, the noble Baroness, Lady Wootton of Abinger, is quite right on a narrow definition of the Question, but I thought it was appropriate in these circumstances to make clear that there is a distinction between those who are officials of a trade union and other civil servants.
Lord Elwyn-Jones: My Lords, in view of the apparent confusion in his mind, perhaps it will be a good idea if the noble Viscount, Lord St. Davids, will also read again what was said by my noble friend Lord Cledwyn of Penrhos.
Viscount St. Davids: Happily, my Lords.

Wheelclamps: Experimental Use
2.41 p.m.
Lord Underhill: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the considerable interest expressed by the public in enforcement innovations, they will state the areas where wheelclamps are to be used, and when the experimental period for their use will commence.
Lord Lucas of Chilworth: My Lords, as my right honourable friend the Secretary of State for Transport has announced today, the Government propose that the police should be able to use wheelclamps for an experimental period in Westminster, south of Bishop's Bridge Road, and Marylebone Road, and north of
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Buckingham Palace Road, Victoria Street, Whitehall and the Strand; and in the adjacent area of Kensington and Chelsea between Kensington Church Street, Kensington High Street and the King's Road. My right honourable friends the Secretary of State for Transport and the Home Secretary have today laid orders designating the precise area and prescribing a release charge of £19·50. The experiment will start on 16th May.
Lord Underhill: My Lords, in welcoming that decision in so far as it answers the Question on the Order Paper, does the noble Lord, Lord Lucas of Chilworth, not agree that, as this is an experimental matter, it is desirable that the widest possible publicity should be given to it? Is it proposed that there will be adequate publicity in order to get the right relationship between the public and the authorities?
Lord Lucas of Chilworth: My Lords, the widest publicity will be given through the press and other media and also in the local areas.
Lord Byers: My Lords, I wonder whether the noble Lord can say how long the experiment is likely to take.
Lord Lucas of Chilworth: My Lords, my right honourable friend expects to review the experiment after about 12 months; that is about 12 months before the total period of two years which was allowed under the Transport Act of last year.
Lord Mowbray and Stourton: My Lords, if the noble Lord and the Government believe that these clamps should be used to enforce discipline on badly parked cars, which means dangerously parked cars, will not the danger be prolonged unnecessarily? Is it not better to have more tow-away vehicles to lift cars and remove them?
Lord Lucas of Chilworth: My Lords, there are about one-third of a million car parking offences in London each working day, and the scheme is designed to reduce the number of people who may offend in this respect. If a gross danger is likely to occur, then the provisions that already apply for taking up and removing a car will continue to apply.
The Earl of Kimberley: My Lords, if this experiment is to last for a year, can my noble friend say whether the similar experiment of traffic lights at Hyde Park Corner, which is a complete disaster, is also going to last for a year?
Lord Lucas of Chilworth: My Lords, I think that is a very different question.

Irish Citizens' Votes in United Kingdom
2.45 p.m.
Lord Avebury: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they

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intend to bring forward any proposals that would affect the voting rights of Irish citizens in the United Kingdom.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, we have no plans to do so. The Select Committee on Home Affairs in another place is, however, looking into aspects of the franchise as part of its inquiry into the Representation of the People Acts, and we will, of course, carefully consider any proposals they may make on this matter.
Lord Avebury: My Lords, would it not be preferable if the Government stated plainly, not only that they have no present plans to do so, but that, irrespective of any recommendations that may be made by certain elements in the Tory Party, they will resist any proposal to alter the franchise of Irish citizens in the United Kingdom? Would not the noble Lord agree that in the present state of Anglo-Irish relations—improving steadily, and we all welcome that—it would be an enormous blow to the progress of our dealings with the Irish if there were any suggestion that their franchise in the United Kingdom was to be altered? Ought we not rather to press instead for reciprocal rights to be granted to United Kingdom citizens in Ireland, which was one of the items on the agenda in the joint talks?
Lord Elton: My Lords, we recognise that any proposal to take away the vote from any section of the population is a serious constitutional issue deserving the most thorough consideration. That is why we welcome the Select Committee's inquiry into the matter, and it would be wrong for me to anticipate what they may have to say. The Irish Government announced on 28th January that they intend to introduce legislation at the earliest opportunity to give British citizens resident there the right to vote in Dail elections.
Lord Underhill: My Lords, while appreciating that the Select Committee is looking into this matter, may I ask whether the Minister would not agree that any change would be almost impossible to monitor and enforce? Apart from the questions raised by the noble Lord, Lord Avebury, and from the matter of relationships between this country and Southern Ireland, would it not endanger good relationships between the communities in this country as well as in Northern Ireland?
Lord Elton: My Lords, on the face of it, it would be an extremely difficult change to bring about. There are about 500,000 Irish citizens here and, incidentally, about 50,000 of our citizens in the Republic. I do not in any way belittle the difficulties that might arise. Nor am I saying with eager anticipation what may be in the report when it comes. I am merely saying that we should not anticipate and come to a conclusion on anything the Select Committee may eventually publish before we have seen it.
Lord Monson: My Lords, can the noble Lord say whether there is any other country in Europe which allows non-citizens to vote in their general elections?
Lord Elton: My Lords, apart from the Republic of Ireland, I am advised that several Commonwealth countries, including Australia, New Zealand, and at some elections Canada, do so.
Lord Brockway: My Lords, will the Government be very careful in considering the recommendations of the Select Committee, in view of the fact that any change in this respect may have a serious effect in the future on any settlement of the Irish problem?
Lord Elton: My Lords, we always consider what the Select Committee has to say with the greatest of care.
Lord Avebury: My Lords, if the Irish Republic does go ahead with the legislation the noble Lord mentioned, which I think we should all welcome, is it not even more unthinkable that there should be any down-grading in the rights of Irish citizens in the United Kingdom? Does not the noble Lord appreciate that the period of uncertainty we now face is not only likely to stir up anti-Irish feeling by discussion of the possibility of legislative changes, but also make the Irish in the United Kingdom less sympathetic to negotiated solutions in the north and more sympathetic to extremists?
Lord Elton: My Lords, I believe that most Irish citizens in this country are well integrated and law-abiding and agreeable fellow citizens of this realm. I do not believe that there is a period of uncertainty. All I have said is that we have no plans to do this, but I cannot tell the noble Lord what the Select Committee will say. If he knows better than I, perhaps he could reassure us.

Level Crossings Bill
Brought from the Commons; read a first time, and to be printed.
Greater London Council (General Powers) (No. 2) Bill
Read a third time, with the amendments, and passed, and returned to the Commons.

British Shipbuilders Bill
2.50 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, I beg to move that this Bill be now read a second time. The Bill has been described elsewhere as a modest measure. It has two distinct elements intended to put British Shipbuilders into a similar statutory framework to the British Steel Corporation. The first element lifts the constraints imposed by the Aircraft and Shipbuilding Industries Act of 1977 which laid down a series of conditions under which British Shipbuilders had to carry out its activities. This legal straitjacket has to be removed to give British Shipbuilders the freedom to take decisions which are in the best commercial interests of the

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corporation—the kind of freedom its most successful competitors enjoy. The second element empowers the Secretary of State to direct British Shipbuilders to dispose of assets and to limit or cease activities.
The first element of the Bill is dealt with in Clause 1, which repeals Section 2 of the 1977 Act. This imposed statutory duties on BS to promote the production and repair of ships and certain marine engines. Clause 1 replaces those statutory duties with powers. It also makes it clear that these powers may be exercised through other than wholly-owned subsidiaries. That is, it opens up the possibility of joint ventures at present prevented by the 1977 Act and also enables assets to be completely returned to the private sector where practicable.
The repeal of Section 2 of the 1977 Act also removes from BS a number of its subsidiary duties. The most significant of these is the duty to have full regard to the requirements of national defence—a curious requirement not now placed on any other defence contractor. Of course, they have to work within the framework of the Government's defence policy: but while the Ministry of Defence is an enormously important customer of BS and the corporation will obviously continue to pay close regard to MOD's requirements, national defence is a matter for the Government.
Another of British Shipbuilders' present statutory duties, to promote industrial democracy, is also repealed. In the debate in 1977, the noble Lord, Lord Melchett, speaking for the then Government said,
"industrial democracy must develop from the people involved".
It should not, he said, follow a rigid formulation laid down by Government. The very phrase "strong and organic", he admitted, had no precise meaning. My Lords, I agree now as I did then. We feel that industrial democracy goes hand in hand with good management. It does not take a statutory provision to ensure good practice, as many examples in the private sector amply demonstrate. We are confident that the management of BS will continue to work to develop good relations, a job the corporation have done so well since vesting day. Repealing this duty does not indicate any weakening in the Government's desire to see good industrial relations.
The second element of the Bill is introduced in Clause 2. This provides important new powers for the Secretary of State. He will be able to direct BS to dispose of assets and parts of its undertaking, and to limit or cease activities. Before using these proposed powers, the Secretary of State will need to consult British Shipbuilders and to be satisfied that the giving of the direction was in the national interest. And use of the power will be subject to a negative resolution in either House. We feel that the decision on where to draw the line between the public and private sectors of an industry cannot be left to one part of that industry. Nationalised industry boards are sometimes reluctant to surrender parts of their empire. Naturally we hope that we shall be able to agree with the board on disposals and will not be obliged to use these new powers.
The powers to restrict an activity are there to strengthen the Government position when dealing with unfair competition. Noble Lords will be aware of
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the anxieties expressed by the private sector ship repairers and engine builders about unfair competition from BS. The Government would be ready to use these powers if BS were to engage in unfair competition with established shipping interests. No decision has been taken on how or when the powers to direct BS to make a disposal or limit its activities will be used. And I should emphasise that the Government would exercise the powers in the Bill only after taking into account the view of the board and the effects on the rest of the industry.
Clause 2 of the Bill contains important safeguards to prevent BS from making changes in its organisation that would be incompatible with the introduction of private capital. It also provides safeguards in the event of the disposal of a BS subsidiary, whether or not that disposal results from a direction. It enables us to prevent activities that are important for our defence interests from coming under foreign control and it provides powers to direct the setting up of employees' share schemes. It also amends the 1977 Act so that BS would not be underwriting the financial liabilities of companies after they ceased to be wholly owned, while preserving the rights of those who have contracted with the companies before the Bill becomes law.
Warship building is the only part of BS to have made substantial profits since vesting day. It cannot be right if the investment and future viability of the warship building companies should suffer because of the loss-making activities of the rest of the corporation. There is a good case for returning warship building to the private sector so as to open new sources of finance and to help with investment. Some of the corporation's most important activities, however, are unlikely to benefit from such finance. Merchant shipbuilding is unprofitable and in present conditions would not be attractive to a private investor. The Government will have to continue to support merchant shipbuilding for the foreseeable future. Indeed, we have recently announced a further tranche of Intervention Fund subsidy of £20 million to run to July this year. We shall shortly be discussing with the European Commission further Intervention Fund assistance when the present tranche expires.
The provisions of this Bill should be seen in the context of the industry as a whole. The chairman, Sir Robert Atkinson, has achieved a great deal for this industry over the past three years. It has gone through a painful period of restructuring and reorganisation. This has been achieved with little disruption, and all concerned in the industry deserve recognition for this. But the Government have played their part too. Substantial support has been given to BS. Under this Government well over £600 million has been provided. BS's capital expenditure has increased. Indeed, in 1981–82 it doubled. This year it will increase significantly again; and it is expected to rise further to £90 million in 1983–84. But even more needs to be done. Investment alone is not enough. The massive investment in the 1970s did not achieve the hoped for increase in productivity which, though it has improved, has not yet reached pre-nationalisation levels.
The Government recognise the difficult and uncertain situation which the corporation is facing. The markets for merchant shipbuilding, ship repair

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and off-shore work remain very depressed. As the half-year results showed, BS's losses will significantly increase this year. Only warship building has been consistently profitable. Since this Bill was introduced BS has received £585 million of orders for new naval ships, partly to replace our Falklands losses. Another frigate is to be ordered this year. But the prospects in other markets remain very uncertain. After considering British Shipbuilders' Corporate Plan, we have accordingly decided to increase the corporation's external financing limit from this year's £122 million to £160 million in 1983–84.
Shipbuilding has a difficult time ahead. Management and workforce will have to work closely together to gain orders. The Government will continue to support BS's efforts and the Bill will give BS the freedom to draw upon every resource. It is absurd that it should be prevented from attracting private capital and entrepreneurial skills. It is clear that it should be given more freedom to organise itself according to its own commercial judgment. My Lords, in the light of that, I commend the Bill to your Lordships.
Moved, That the Bill be now read a second time.—(Lord Trefgarne.)
3.3 p.m.
Lord Bruce of Donington: My Lords, the House will be grateful to the noble Lord for having introduced the Second Reading of the Bill in this place. As he says, it follows true to form. There are no more legal complexities in it than there were in the previous set of privatisation Bills. Therefore, no useful purpose would be served in arguing out the somewhat tortuous legal detail into which we had to go when other industries were privatised.
Of course, this Bill is entirely irrelevant to the needs of the country at this time. It does not add anything to the country's productive capacity. It does not result, and is not intended to result, in the alleviation of any industrial, unemployment or social problem anywhere. One wonders indeed why it has been introduced at all, except of course to follow out the usual party line of the party opposite to provide for further privatisation. I can imagine Ministers of State these days like Red Indians dancing around the wigwam of the Prime Minister and showing her the scalps of the various nationalised industries that they have strung around their belts. I have no doubt that she is vastly entertained thereby and that her full approval showers upon those who have achieved the trophies they have gained. It serves no useful purpose at all.
The noble Lord has said that the Bill takes away duties and substitutes powers. Is it entirely wrong that a public corporation should owe a duty to the country at large? What is so reprehensible about the duties that were spelt out in the original Act of 1977? The noble Lord says that he wants to release public corporations from the duties in order that the shackles imposed upon them by those duties are removed. We all know perfectly well what will happen. The chief of British Shipbuilders, whoever he may be after, I observe, the anticipated retirement of Sir Robert Atkinson, which is hinted at in today's Financial Times, will obviously become the creature of the Minister, pliant to his every wish.
The noble Lord said at one point that the Bill would permit the injection of private capital. I do not know
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how private capital will be attracted into any other section of the businesses at present conducted by British Shipbuilders outside perhaps the warship side, to which I shall return. The noble Lord, on the one hand, advertises the almost untenable position of the merchant shipbuilding and various other sections belonging to British Shipbuilders and, with the next breath, he says that of course they must be free to attract private capital. I very much doubt whether private capital will be brought into those sections. After the Government, if they are re-elected, privatise the warship section, for quite obvious reasons, private capital will go into the warship section. There are good reasons for that, to which I shall return presently.
I am afraid that we have to discuss this Bill today within the context of the whole situation of British shipbuilding. As the noble Lord will realise if he has read The Times today, a campaign is starting today in the North-East of the country aimed at drawing the attention of the public at large, and indeed of the Government, to the incredible plight into which the northern part of the country has been plunged in recent years, I should add, largely due to the monetarist policies of the party opposite, although I shall not argue the point in detail now. The campaign is being organised by the Tyne and Wear County Council. This is what is said. I should like noble Lords to listen to this. There is no point in discussing Bills within the atmosphere of an academy. Bills are concerned ultimately with people. Let us see what the leader of the Tyne and Wear County Council has to say about the situation up in the North.
He says:
"We have suffered heavy losses in all our major traditional industries over the past few years and now have more than 100,000 adults and 16,000 teenagers on the dole. We are not prepared to see the lifeblood of this country slowly disappear. We intend to use every weapon available to ensure that we retain our shipyards".
He goes on to say:
"The entire community of Tyne and Wear workers, traders, business people, shops, pubs and clubs, all depend on the shipyard workers for their livelihood and any further decline would amount to a disaster for the entire population of Tyne and Wear".
That is only the expression of one person, but I think that it will be echoed by every noble Lord whose associations in various parts of the country are sufficiently extensive for him to arrive at a perception of the misery that at present exists, largely through unemployment and certainly through poverty, in very considerable areas of this country, including the shipbuilding areas.
How did this situation come about? In 1950, British shipyards were responsible for the construction of about 50 per cent. of the world tonnage required by shipowners of various nations. By the time that British Shipbuilders was formed at the time of nationalisation, that 50 per cent. share of the world market had declined to 4½ per cent. It is necessary for us to consider how that has happened. Initially, of course, the loss was stimulated by the growth of competition for British shipyards from other countries, including those in Europe, belonging to what we shall loosely call for the moment the Western world. British shipyards increasingly encountered competition from other European countries and our share of the market progressively dropped. Some reasons have been given for that. They were given in

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another place during the debate that took place on 17th November and they were not challenged.
In the early 1970s a survey showed that the British shipping industry had £825 per worker employed invested in it; in West Germany the figure was £1,000 per employee; in Italy £1,200; in Sweden £1,800; and in Japan £2,800. The growing competition among what are sometimes called our trading partners in the West, was very largely achieved on the basis of massive investment by these countries at a far greater rate than investment was forthcoming in this country. The study continued by saying that later in the 1970s there was a spurt. British industry added an extra £80 per employee; West Germany a further £162; Japan an additional £409; and Sweden an extra £554 per worker. There can be no doubt, and I do not think that it was seriously contested in another place, that the growing uncompetitiveness of the shipbuilding industry in the United Kingdom during the years following 1950 up to the time of its nationalisation when we had 4½ per cent. of the market, was owing quite considerably to a gross disparity in the capital resources made available to shipbuilding in the United Kingdom as compared with the other Western nations and Japan.
However, after that a new phase began which affected the European shipping industry as a whole, including the British shipbuilding industry, and that was the rise in shipbuilding activity in what are termed, in the various GATT negotiations that have taken place, the "newly industrialised countries"—that is, Taiwan, Korea and Brazil. Therefore the share of the European market as a whole in the 1970s onwards fell very considerably, and fell at the hands of these newly industrialised countries to which I shall return, because—as I shall show—their basic wage rates are much lower than those obtaining in the United Kingdom.
That was the situation that was inherited when British Shipbuilders came into operation in 1977. Aside from the warship section—to which the noble Lord has already referred and to which I shall return—unless British Shipbuilders had been formed and unless the merchant shipping and other facilities had been powerfully aided by Government and reorganised in the way in which they have been since, there would be no shipbuilding industry at all, outside the warship section, in the United Kingdom today. The noble Lord occasionally refers to these matters in ideological terms, and I am bound to reply. Private enterprise in the shipbuilding industry up to the time of the 1977 Act reduced that industry to a shambles from which it has to be rescued, and any suggestion to the contrary can, I think, be dispelled if noble Lords would care to peruse some of the proceedings that have taken place in another place.
The noble Lord's very favourable observations make it unnecessary for me to refer to the accounts of British Shipbuilders which I have with me, save to assure your Lordships that the contents of the accounts for the year ended 31st March 1982 fully bear out in detail the eulogies, which I am quite sure the noble Lord meant sincerely, that flowed from the noble Lord's mouth. All that really is in doubt is the Government's intentions. They have been made
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reasonably clear. They are, of course, to privatise the profitable sections—the warship section—and to allow what I will refer to loosely for the moment as "a rump" to continue. The other pretence is that these provisions, by virtue of which the Secretary of State is given considerable control over the corporation, will be exercised benevolently in the interests of the industry as a whole. In another place the term used was: to release them from the constrictions under which they now operate.
The noble Lord in his speech said that it was the Government's intention to make quite sure that British Shipbuilders, or what remained of it, did not unfairly compete with the private sector. He did not say quite how he was going to do that, but he did give an indication. Just how do the Government propose to deal with competitiveness? We have no need to speculate any further about that because we have had a recent example.
The noble Lord will be aware that on 7th February the Government announced that the contract for the building of a cable ship ordered by the CEGB was to go, not to British Shipbuilders, but to South Korea. Your Lordships will recall that this raised some interest not only in another place but also in this House. Some very grave doubts were expressed as to the manner in which this extraordinary event was achieved. Your Lordships will recall that it was pointed out as being a slight incongruity, to put it at its mildest, that the Government on the one hand should be advocating that British firms should buy British and yet on the other hand, when it came to the ordering of this particular ship, should do nothing to prevent the order being placed by a British company with a Korean shipbuilding company. Mind you, the reasons given were very cogent. Apparently the quotation was alleged to be some 50 per cent. higher and the Prime Minister made much of the point when she referred to this matter at one of her conferences.
Your Lordships will recall that at the time when the statement was made in this country I put the Government on notice, and at the conclusion of the proceedings on the statement on 7th February, at columns 1014 and 1015 of the Official Report, I said:
"Will the noble Earl also please take note that we shall probably return to this question in greater detail at a later stage?"
It is to the accomplishment of this public duty that I now turn. Your Lordships will recall that in 1978 conversations took place between the then Labour Government and the French Government and between the CEGB and its corresponding organisation in France, Electricité de France, concerning the completion of a 2,000 megawatt link between France and the United Kingdom. The advantages of this were discussed at the time and I shall not adumbrate them now. It appears that the British share of the project would cost in the region of £250 million and, indeed, that figure has recently been confirmed. That comprised not merely the laying of the cable itself but also the provision of the cable ship, which was the means by which the cable was to be laid.
In July 1982, at the request of the CEGB, British Shipbuilders received the specifications of this from their specialist consultants and notified them that completion was required in the spring of 1984 and that tenders were for submission, at any rate to three quite

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prominent firms of contractors, for the total operation, one of which was a Canadian firm and two of which were British.
British Shipbuilders in conjunction with its chosen subsidiary—in this case Sunderland Shipbuilders Limited—prepared the tenders and in due course these were sent off, were received by the contractors concerned and were communicated to the CEGB. There was a second round of tenders at a later stage in which British Shipbuilders also participated, quoting only of course for the completion of the cable-laying ship. The price quoted was about £13 million—that is, after taking into account a 10 per cent. contribution from the Intervention Fund, which is under the control of British Shipbuilders.
It is important that your Lordships should bear the following points in mind, and over the last month I have been at pains to investigate this matter in detail so that your Lordships may be aware of what transpired. The first thing is that the response from the two British contractors conveyed to British Shipbuilders during the period from October-November 1982 was that the contractors were very interested. Secondly, in fact, early in January British Shipbuilders were advised that in view of the fall in the value of the pound the price had become highly competitive.
The third point to bear in mind was that at no time was British Shipbuilders advised by anybody—either the DOI or the CEGB—that the price was too high. The fourth point, which your Lordships should bear in mind and which your Lordships may find slightly unusual, is that British Shipbuilders was never invited to tender again. The fifth point to bear in mind is that at no time did the international transport concern—that is, the firm that ultimately secured the contract—make any request to British Shipbuilders to tender. This is rather an important point because the CEGB had previously been operating and had invited its contractors to operate under the condition that, if at all possible, British Shipbuilding yards were to be used for the purpose of the construction of the ship. I say that at no time did the firm, ITM, to which I shall return, invite British Shipbuilders to take part.
The sixth point which I should like your Lordships to bear in mind is that at intervals following the submission of the tender, and in the words of British Shipbuilders:
"As the situation developed, we registered with CEGB our strong interest in this proposed contract and we have kept the DOI and the Offshore Supplies Office in the picture regarding progress".
As your Lordships will be aware, the Offshore Supplies Office is an organisation which continues to propound, very successfully and energetically, the objective of buying British.
We now pass to the earlier part of 1983, and in the last week of January British Shipbuilders learned for the first time that ITM had been awarded the cable-laying contract. They had made inquiries—naturally, because they had heard nothing—of the Department of Industry, and they were informed on 27th January that the decision to use a Korean yard was "irrevocable". Indeed on 7th February, Mr. John Moore, the Under-Secretary of State for the Department of Energy, said in another place:
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"the CEGB has advised me that a formal contract now exists with ITM".
On 14th February the contract was, in fact, signed. It is understood that the CEGB is putting 10 per cent. of the sum "up front" and I am quite sure that this will be very useful to International Transport Management.
In the meantime, on 14th January Sir Robert Atkinson, who, your Lordships will be aware, is the distinguished chairman of British Shipbuilders, wrote to Sir Walter Marshall, who, as your Lordships will know, was appointed the chairman of the CEGB in July 1982, asking for an interview in order to discuss the cable ship project. No response to this leader of one nationalised industry was received directly from Sir Walter. On 27th January Sir Robert Atkinson, to whom this afternoon the noble Lord has paid such just tributes, received a reply from a Mr. D. R. Lomer, who is a board member of the CEGB:
"replying on the chairman's behalf due to his heavy commitments".
Your Lordships may feel that this seems to be rather an extraordinary state of affairs between the leaders of two nationalised industries, except that one, of course, knows the history of Sir Walter Marshall and one, of course, knows the purpose of his appointment.
I now crave your Lordships' indulgence to draw your attention to the firm, International Transport Management, to which this contract has ultimately been awarded, and which apparently has entered into a contract with the Korean yard. The head office of this company is a converted private house at 20 Southfield Road, Middlesbrough, which is pleasantly furnished but is not capable of housing more than about 25 staff. I make no point of that. Smallness is often beautiful and there is no reason to suppose that its efficiency, its entrepreneurial skills, or even technical skills are in any way deficient because of the smallness of its staff. But it is good that your Lordships should form some mental picture of the type of organisation that is involved. It has a London office at 7–8 Market Place, London, W.1.
Your Lordships may possibly be interested to learn that the accounts of this company have also been researched. As at the date of inspection of the file on 14th February last, the last accounts filed by the company were those relating to the year ended 31st March 1980. That is 31st March 1980, and we are now in March 1983. They were dated 27th November 1980 and filed on 19th February 1982, some one year and one month after the prescribed time laid down in the Companies Act 1976. No accounts for the year ended 31st March 1981 have yet been filed, even though they were due to be filed on 31st January 1982. These are one year and half a month late. The accounts for the year to 31st March 1982 ought to have been on file by 31st January 1983. They were at the time of research already half a month late.
The reason that I am going into this detail is so that your Lordships may be aware of the background of what subsequently happened, because the Government's statement refers to International Transport Management. ITM is the trading name of ITM (Offshore) Limited, which is the company to which I have referred. Incidentally, the Accounts of ITM (Offshore) Limited to 31st March 1980 showed net

15
current liabilities—that is, current liabilities less assets—of £38,990, and total assets of £462,720. The net profits made for 1980, your Lordships will be glad to hear, amounted to £163,217, as distinct from £6,415 in 1979. So up to 1980, which is all we knew on 14th February, that was the position.
Doubtless your Lordships will bear in mind that it may well be that the fortunes of this company have progressed at the same successful rate that they obviously did in 1980, and they may well be much more substantial than is revealed on the accounts for 1980. Your Lordships may therefore feel that perhaps this company has been modest in not allowing the public to see its accounts for the two following years, because, of course, your Lordships would then be able to know whether the company's structure, as such, could sustain the large contract that has apparently been awarded it by the CEGB.
It is perhaps of interest to note that on the file at Companies House there is another company, ITM (UK) Limited, which has no accounts and which was struck off on 7th December 1982. ITM (Overseas) Limited was registered on 7th August 1980, and ITM Consultancy Limited was registered on 7th August 1980. In neither of these cases were any accounts available, and there is nothing improper in this in any way because the companies may not have commenced trading, although by statute they are really required to file their annual returns. Public bodies that deal with organisations of this type very properly want to be informed as to their background, and very properly want to be put into a position where they can assess the relative technical or other abilities of the directors to carry out these mammoth tasks, and indeed whether the finances are likely to be available for the job to be done. I have no evidence of any inability on the part of ITM (Offshore) Limited to perform the task. I do not know, and I would not cast any aspersions on them whatsoever. It is up to your Lordships to decide just what happened, and whether what happened was in accordance with the usual traditions in the way that British public undertakings are normally supposed to place their contracts and to conduct their affairs.
Now why did ITM (Offshore) Limited obtain the contract? The Government's answer to this is that they simply were able to quote a price that was completely so far below any quotation received from British shipyards that any such quotation was immediately out of court, even though—as your Lordships are probably aware and may I reiterate it once again—at no time did ITM ask British Shipbuilders to quote on any specification whatsoever for this contract.
Now it is said that the price was low. If so, why was it low? We can find out immediately because the Korean shipyard construction was part of a package deal, and in the course of its performance, so far as the Korean side was concerned, they were paying, or would be paying, wage rates at about 23 per cent. of the amount payable in Europe. I have the ILO Bulletin of Labour Statistics for April to June 1982, and I find that the average wage rate per hour in Korea was 70p, and the average throughout Europe as a whole was 312p. It means that in European terms, translated into British terms, we could of course have had the contract if we had been prepared to pay our workers, and if our
16
workers had accepted, £28 per week for a 40-hour week; or, alternatively, if our workers had been prepared to work for that rate of wage for the 73 hours a week that the Korean workers are required to work in instances of this kind which would have brought them in £51 a week. This is presumably what Her Majesty's Government think is fair competition.
But of course there is another reason also. It appears, so I understand, that the cable ship will belong to ITM when the charter with the CEGB is finished, and ITM have had an undertaking from the Korean authorities that they will charter it in Korean waters at the end of the contract through CEGB. So what really has happened is that the Korean authorities have placed themselves squarely behind the Korean shipbuilding company, Hyundai, I think the name is, one of the largest companies in South Korea. They have put themselves squarely behind this company and have been able to quote prices that are quite uncompetitive by any European standard at all and which, in fact, constitute the most blatant form of dumping that can be imagined at this time. This example will be of ill-assistance to the noble Lord, Lord Cockfield, when he comes to, as one hopes he will, try to institute anti-dumping measures in the EEC. The reply will inevitably be that the British Government themselves connived at this blatant dumping which has taken place.
What are the consequences for British shipbuilding of the course of action that is being taken? First of all, it is a blow to British Shipbuilders' prestige. It is no good having a Buy British campaign, urging shipowners to buy British ships, unless you are prepared to take all reasonable and prudent steps to ensure that your companies have fair competition. It is a blow also to the financial situation of Sunderland Shipbuilders and its workforce. And it is a blow to other British industries; steel, for example, because about £3½ million-worth of steel would have been bought from British Steel. It affects engines, cable laying equipment, electronics, controls, fittings and so on.
Was the Prime Minister told all about this? Did she know exactly what had happened when this decision was made? In the absence of any satisfactory indication—and there have been plenty of opportunities since these events took place—I submit that the Department of Industry and the CEGB between them knew about this from November onwards and in fact connived at what happened. I accuse the Government of not caring at all whether British Shipbuilders benefit from it. All they are really concerned about are the profitable parts.
The noble Lord himself made the point that the warships side of the business is making a profit. That is the case for a very good reason; the warships side is the side of British Shipbuilders which works for the defence departments on a cost-plus basis, and any company that cannot make a profit when working on that basis must be very bad indeed. No wonder the Bill empowers the Government to dispose of these assets.
Your Lordships may decide to give the Bill a Second Reading. There is nothing we on this side of the House can do to stop that. But it is a squalid little Bill which we shall repeal at the earliest possible opportunity.
3.43 p.m.
Viscount Simon: My Lords, when the Aircraft and Shipbuilding Industry Act was going through your Lordships' House a little over six years ago, we on these Benches opposed it. We did so not because we had an ideological objection to nationalisation but because we believed that in a mixed economy—which we are—there should be a proper balance between the resources in the public and private sectors, and we felt at that time that there was already too high a proportion in the public sector. That being so, we objected to the nationalisation of the shipbuilding industry.
I hope the Government do not think that because we objected then, we are delighted with the idea that they want to regain it for private enterprise—or those parts of it, as the noble Lord, Lord Bruce, said, which are profitable—because we on these Benches take the strong view that the constant seesawing in industrial policy is most damaging for the country. When, every time a decision is made, it is altered within a few years because another party attains power—and Lord Bruce indicated that this will be altered when his party gets into power—that is very damaging to British industry. Indeed, it is one of the factors which has led to the decline of British industry. From that point of view, therefore, we are opposed to the Bill. We think it a mistake, after so short a time, to want to alter things again.
Besides that, there is the question of the present desperate position of the shipbuilding industry as a whole, which the noble Lord, Lord Bruce, expressed so well. Is it not possible that, in a position like this, where very difficult decisions have to be taken and where it may be necessary still further to restrict production or close yards, it is better to have the whole of the industry in one hand? Would it not be in a better position, in one hand, to negotiate with shipbuilding industries abroad? Would it not also be in a better position, if the worst comes to the worst and it is necessary, as I hope it will not be, to reduce still further our shipbuilding capacity here, to decide where that production should take place? With a number of independent companies the difficulty of reaching agreement is very much greater.
While I am not an economist (unlike the noble Lord, Lord Bruce), I should think that if there were many small undertakings competing in a very flat market, that would be extremely bad for keeping any sort of market at all, because the different people would be falling over each other to cut rates. That could result in an absolute disaster, and the shipbuilding industry in the long term is far too important for this country for us to risk anything of that kind.
The noble Lord, Lord Trefgarne, was very clear in indicating how the Secretary of State proposes to use the extraordinary powers which he seems to be given in the Bill. The unfortunate British Shipbuilders may have been released from a straitjacket, but what they have got into now I do not know. It could be leg irons, cross irons or almost anything. The Secretary of State can tell them to do something they do not want to do or he can stop them from doing something they want to do. There is little indication in the Bill—and there was not much in Lord Trefgarne's speech—of how the Secretary of State visualises carrying out his powers.
18
The Minister said he would want to use them as little as possible, but I know what Secretaries of State are like; once they have powers, they generally find they want to use them. Indeed, it would be extraordinary if, having introduced a Bill of this sort in a busy Session when everybody is trying to get some other Bill through, the Government did not intend to use the powers once they have them. In any event, the powers are in the all-too-familiar pattern we have got used to; in the name of freeing everybody to do what he likes, the Secretary of State takes more and more power to interfere with what is done. It is similar to the discussion we had about local government not long ago. The Government are always saying, "Let us make the people free", and then they control them more, not by an Act of Parliament—the people controlled would then at least know the limits of their activities—but by the actions of a Secretary of State who does not tell them what he intends to do.
The noble Lord, Lord Trefgarne, indicated fairly clearly, for example, that the Secretary of State has in mind trying to find private capital for the warship builders. Certainly he would have great difficulty trying to find money for any other part of shipbuilding. What does he intend to do? At present, the warship builders make some profit, and that helps British Shipbuilders as a whole. If they are deprived of that profit, what will happen to the rest of the shipbuilding industry? Does the Secretary of State believe it should be supported financially through all the difficult years that may still be coming? Or does he really think that when he has—successfully, in his view—got rid of the warship building side the rest can be left to go to the wall, with all that would mean to the shipbuilding areas of the country and the people who work in them? It seems that there are strong grounds for not doing anything at the present time, but instead letting British Shipbuilders go on doing the best that it can, and certainly not taking away from it about the only profitable operation that it has in its business.
To turn to the Bill itself, I must say that I found it extraordinarily difficult to follow, though I was helped by what the noble Lord, Lord Trefgarne, said in his introduction speech, and I suppose that we shall learn a little more as we go along. I really do not understand why it is thought necessary to remove all the duties of British Shipbuilders. It is not necessary to remove all its duties to release it from the straitjacket, and I should like to know whether British Shipbuilders itself has expressed the view that its duties inhibit it in its activities. I should have thought that the duty of doing the best that it can and so on was very wise.
With regard to the particular question to which the noble Lord referred, relating to industrial democracy, I must say that personally I have always disliked the phrase. I like to think of it as worker participation; but, whatever one calls it, the fact remains that British Shipbuilders has been very successful. I accept that it could well have been successful without legislation; but have the Government considered the psychological effect of removing the statutory requirement? It seems to me that, if there is the requirement—and it may have nothing to do with improvement in industrial relations in the shipyards—to remove it would be very damaging. Surely it does not do any harm to leave it, and I

19
wonder whether when we reach the Committee stage the Government may consider doing something about that.
So much has been said by the noble Lord, Lord Bruce of Donington, that I can make my speech shorter than I had intended. The noble Lord, Lord Trefgarne, said that somebody had called the Bill "modest". I do not know who did that, and no matter who it was, I should not myself have used that word. I should have called it irrelevant, as I think the noble Lord, Lord Bruce, did—irrelevant at a time when the industry is in a really desperate position. It will not bring to Britain a single new order for a ship. I suggest that what is needed—and urgently needed—is for Ministers to find the time not to prepare Bills of this kind, but to get together with British Shipbuilders, the shipping industry (I mean of course both sides, including all the unions), and perhaps potential investors in British Shipbuilders, if there are any. They should sit around a table and try to work out a strategy for both the immediate term and the long term for the British shipbuilding and shipping industries, which are indissolubly linked together and which are absolutely vital to the future of this country.
3.54 p.m.
Lord Trefgarne: My Lords, we have heard two interesting speeches this afternoon. I accept that, if I caught him right, the noble Viscount, Lord Simon, does not find himself wholly in accord perhaps with the timing of the Bill rather than the content. The noble Lord, Lord Bruce of Donington, spent the greater part of his very long speech dwelling on one particular matter which, as I think he would agree, does not specifically arise from the Bill that we are considering this afternoon. But I do not complain about that, because he was certainly entitled to raise the point, and I listened very carefully to what he had to say.
The noble Lord, Lord Bruce, described the Bill as irrelevant, and that word fell from the lips of the noble Viscount as well. The noble Lord said that the Bill had nothing to do with unemployment, it would have no effect upon investment and so on. I do not think that the noble Lord, Lord Bruce, is right in that. I believe that this is a very relevant Bill. It comes at a time when, admittedly, the shipbuilding industry, in particular the merchant shipbuilding industry, is in some difficulty, but of course the British merchant shipbuilding industry is not alone in that. The shipbuilding industry is also in difficulties certainly throughout Europe, and in many other parts of the world. Indeed that is no doubt one of the reasons why some of the prices that we hear about coming from the tendering offices of shipbuilding companies in the Far East are so low. They, too, are short of work, and that is why they seek to attract such business as there is at low prices.
As for making more possible investment more readily available to British Shipbuilders, I believe that that is a consequence which will flow from the measure that is before your Lordships this afternoon. Apart from the statutory bar, one of the other difficulties that investors would face if the bar alone were removed, would be the straitjacket in which
20
British Shipbuilders finds itself, for example, because of the duties imposed upon it. They are indeed duties; they have to be followed to the very end. For example, one of the duties is that British Shipbuilders may not permit mainstream activities to be carried on by partly-owned subsidiaries, and that is a very serious constraint upon the activities of British Shipbuilders.
Both noble Lords referred to warship building. As I said in my opening remarks, it is the case that warship building has been one of the more profitable activities—in fact the only profitable activity, I think I am right in saying—within British Shipbuilders, certainly since nationalisation. That is largely due to the fact that it has had the benefit of orders from the Ministry of Defence, not least the orders that flowed quite recently following the Falklands conflict. But I believe that there is considerable scope for new investment, new initiative, and maybe for new ownership in the warship builders as well, because, despite their comparative success with regard to the British naval requirements, their success in world warship markets has been less marked. For example, it is unhappily the case that they have not received a major order for a warship in I think a period of at least nine years. That is a very long time. That has been during a period when the world market for warships has been rather more buoyant than the market for merchant ships.
So I believe that the provisions of the Bill before your Lordships will enable new investment, new initiative, and new entrepreneurial skills to be injected into the warship building side of British Shipbuilders, as well as in due course into the merchant shipbuilding side of the business. Of course I accept that at the moment the time is not appropriate for any significant change in that direction so far as merchant shipbuilding is concerned, but I hope and believe that the time will come. Indeed I am quite certain that this measure will enable that to happen to a considerable extent so far as merchant shipbuilding is concerned when the market improves.
As I have said, the noble Lord, Lord Bruce, described in great detail some events as he understood them with regard to a recent matter concerning the Central Electricity Generating Board. I hope that he will forgive me if I do not follow the line of his speech, save, if your Lordships will agree, to dissociate myself completely from the remarks that he made about Sir Walter Marshall, the chairman of the Central Electricity Generating Board. I do not think that that is a matter which specifically arises from the Bill. If the noble Lord thinks that arising from that matter there are any particular points to which I ought to reply, I shall certainly do so, privately by correspondence, if he will so allow me.
As I have said, the Bill will remove the straitjacket from British Shipbuilders. Indeed, with the support of the present Government British Shipbuilders has been radically restructured and its performance has improved in the face of quite difficult market conditions. The time has now come to strengthen the industry further by removing what I think the noble Lord, Lord Bruce, referred to as the financial and bureaucratic shackles which have been hampering the performance of parts of the industry.
By amending the 1977 Act, this Bill will provide a

21
more flexible framework within which British Shipbuilders can operate. This Government came into office with a clear mandate to encourage the introduction of private capital into state-owned industries. British Aerospace, which was nationalised with shipbuilding in 1977, has already been successfully returned to the private sector. This Bill will enable us to take the first steps to bring this about in the shipbuilding industry. We cannot afford to wait until the whole of British Shipbuilders is profitable before we do this. The industry is in recession worldwide. Competition is fierce and getting fiercer, jobs will not be saved by clinging to the dogma of public ownership. The industry needs to be competitive. It needs to be able to draw on every resource, if it is to win the battle for orders.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Parliamentary Constituencies (England) Order 1983
4.2 p.m.
Lord Elton: My Lords, I beg to move that the draft Parliamentary Constituencies (England) Order 1983, which was laid before this House on 14th February 1983, be approved. The Boundary Commission for England submitted its Third Periodical Report on 11th February and this order is intended to give effect to its final recommendations without modifications. Article 2 of the order substitutes the 523 constituencies described in the schedule for the present 516 seats in England. The draft order has already been approved in another place. The draft order has been considered by the Joint Committee on Statutory Instruments.
In their Fourteenth Report they drew attention to the effect on the areas of the new parliamentary constituencies of any alterations made by other instruments in the boundaries of the local government areas named on the right-hand side of the schedule to the draft order and to the effect of the instrument on European Assembly constituencies. Their points were answered in the Home Office's memorandum appended to the committee's report. The report was published today and copies have been placed in the Printed Paper Office. If the draft order is approved by this House today, it will be submitted to be made by Her Majesty in Council. Once made, the order will come into operation in 14 days, but will not affect the existing boundaries of constituencies until a general election is held. Any intervening by-elections will thus continue to be fought on the present boundaries.
The commission is required to conduct general reviews at intervals of not less than 10 or more than 15 years. The recommendations which are now before the House are the result of the third of these reviews. It began on 17th February 1976. There has been a good deal of criticism of the commission for taking seven years over its review with the result that the recommended constituencies are based on electorates now seven years out of date. Such criticisms do an injustice to the commission, for the delay in completing the review arose from circumstances outside the commission's control. The commission says in its report that it expected the review to take three years. Progress was delayed for a number of
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reasons. First, having sensibly decided that district wards should be the building blocks for the new constituencies, the commission was dependent on the progress of the reviews by the Local Government Boundary Commission in producing new district wards. It was expected that these local government reviews would be completed by 1978, but in the event it was not until the spring of 1981 that the last district was re-warded. This, in turn, was partly due to litigation against the Local Government Boundary Commission which delayed its progress.
As well as waiting for the Local Government Boundary Commission to complete its work, the Parliamentary Boundary Commission had also to make recommendations for the first European Parliament constituencies. This work took four months. Moreover, noble Lords will appreciate that the procedures the commission is required to follow are very lengthy. First, provisional recommendations have to be prepared and maps drawn. Then the provisional recommendations have to be published and a month allowed for representations to be made. The commission was, quite rightly, generous in the amount of time it gave for representations. Then, local inquiries had to be arranged: accommodation had to be found and booked, an assistant commissioner engaged and briefed. After the local inquiry the assistant commissioner had to be given time to write his report and, given the usual wealth of detailed argument put forward at local inquiries, the preparation and writing of such reports necessarily take a good deal of time.
The commission then had to consider each report; weigh and discuss all the arguments carefully and decide whether, and, if so, how, to revise its provisional recommendations. And where the recommendations were revised, of course, the whole cycle had to be repeated. In the event, a total of 95 local inquiries had to be held. That was 25 more than during the second periodical review. This emphasises both the great care the commission took to elicit local views of its recommendations and its willingness to listen to them and consider them. Implementation of the commission's proposals will effect the most radical changes to parliamentary constituency boundaries that the country has ever known. Only 48 existing constituencies will remain unchanged and many well-known seats and names will simply disappear. Others will be altered to different degrees and adopt the names of local government areas with which many of us are not yet familiar.
These are no random changes, as some critics of the commission would have us believe. They are, in part, the result of two decisions taken by Parliament. First, there was the decision taken in 1969 to lower the voting age from 21 to 18. This, naturally, increased the electorate. But the increase was not uniform throughout the country. Then there were the local government changes in 1974 which created a wholly new pattern of local authority areas which bore little or no relationship to existing parliamentary constituencies. Added to these two changes was the general shift in the population: out of the inner cities to the suburbs, the new towns and rural areas. The result of all these changes was that a large proportion of existing constituencies were divided by the new local government boundaries.

23
In 1976, the average electorate throughout the country was 65,753. That constituted the electoral quota for the purposes of the review. Eighty seats had electorates less than that by at least 20 per cent. and a further 85 had electorates 20 per cent. or more above the quota. The growth in the electorate in non-metropolitan counties has made electoral inequality even more marked today: on 1982 figures, 13 seats wholly in the "shire" counties have over 100,000 electors in them; whereas 15 seats wholly in metropolitan counties have fewer than 40,000 electors. A vote in one of those shire seats was therefore worth less than half as much as a vote in one of those metropolitan constituencies. Sweeping changes were clearly inevitable if the flagrant, existing unfairness was to be substantially reduced and if those metropolitan constituency boundaries were also to be aligned with those of the new counties, districts and district wards.
It is difficult to say exactly which counties will gain or lose seats if these recommendations are implemented because the alterations to county boundaries since the last review mean that like cannot always be compared with like. But the counties which can be clearly identified as gaining seats are Buckinghamshire, Cambridgeshire, Essex, Hampshire, Hereford and Worcester, Hertfordshire, Kent, Northamptonshire, Nottinghamshire, Oxfordshire, Staffordshire and Suffolk. The metropolitan counties of Greater Manchester, Tyne and Wear, and West Yorkshire will lose seats and Greater London will lose the most. At present there are 92 constituencies in Greater London; the commission recommend 84, although, if taken as a whole, Greater London would be entitled only to 80 seats. The over-representation stems from the statutory requirement that, so far as is practicable, constituencies should not cross London borough boundaries. Cumbria, Lancashire and Northumberland were all allocated one more constituency than each was theoretically entitled to because in the commission's view special geographical considerations—for which provision is made in the rules—justified such a course.
I do not propose to take the House through the details of the rules and procedure which the commission has followed, as they are fully set out in Appendix A and Chapters One and Two of the report. But what I think does emerge clearly from a thorough reading of the report is the great care the commission took in formulating its recommendations. I am sure that noble Lords will wish to join me in thanking the deputy chairman, the members of the commission, its secretariat and the assistant commissioners who held the local inquiries for all their hard work.
During the past few days the commission has been the target of much criticism, and I have no doubt that as they prepared their report the commissioners knew that it would be so. No one likes having well-established relationships upset, and Members of another place whose constituencies will be affected by these recommendations have been understandably loud in their objections. But perhaps we can be more disinterested. Parliament has set up the Boundary Commissions. It has given them rules to follow, but rules deliberately drafted so as to give the commissions
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a good deal of latitude in balancing the conflicting aims of electoral equality and the preservation of local ties.
The commission has followed those rules. It has done the thankless task Parliament has asked it to do and I believe any disinterested observer will conclude that it has done it well. No county boundaries have been crossed, no London borough boundaries have been crossed and only six constituencies cross the metropolitan district boundaries which in many cases correspond to the old county boroughs. At the same time 75 per cent. of the recommended constituencies vary by less than a tenth from the electoral quota as compared with 37 per cent. of existing constituencies. The quota is based on 1976 figures, but even on 1982 figures the commission's achievement is impressive: of the present constituencies, 318 fall in the 20 per cent. band but only 166 in the 10 per cent. band, whereas of the recommended constituencies 366 are in the 10 per cent. band and no less than 499 in the 20 per cent. band. That is 96 per cent.
The commission has completed a very difficult job of very considerable importance. Change is always uncomfortable and some resentment was, I suppose, inevitable—particularly from those who found themselves discomforted by its decisions. But your Lordships will I think recognise that the commission has been very thorough and has been guided throughout by the rules laid down by Parliament for its operation. This has been a fair and dispassionate review and I hope that in approving this draft order your Lordships will commend the commission for the painstaking work which it has done in the public interest. I beg to move.
Moved, That the draft order laid before the House on 14th February be approved.—(Lord Elton.)
4.13 p.m.
Lord Underhill: My Lords, I should first like to thank the noble Lord, Lord Elton, for the able way in which he has introduced this important order. Secondly, I should like to make it quite clear that noble Lords are in some difficulty when we discuss a matter of this kind because we are not the elected Chamber. But we are all affected by parliamentary redistributions and what I propose to do in my remarks is to deal with major principles and not with individual constituencies. I agree with the noble Lord, Lord Elton, that the Boundary Commissions—all of them—have a very unenviable task and one that necessarily is of vital importance to us.
One of the aspirations of the Chartists launched 150 years agc was to secure equal constituencies for parliamentary representation. That has been difficult to achieve. It is still difficult to achieve for a number of reasons. Some have been touched upon by the noble Lord the Minister in his remarks. As he says, the last report was in April 1969. Therefore under the legislation the earliest the report could have been presented would have been 1979 and the latest April of next year. Appendix F, to which the Minister has referred, shows the large number of discrepancies that there are now, and without a review the position would be in an impossible situation for the next general election.

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The last report took some four years' review to prepare. As the noble Lord, Lord Elton, has said, the commission at the outset thought that this one would take three years. I think that we fully accept the reasons for the delay: the local government re-warding which is so vital before one can proceed with parliamentary redistribution; the hiccup in preparing the European elections; and the long court delay which affected re-warding in London. However, it is important that we take a look at this matter and I shall refer to this later on.
This review is the first to follow the Local Government Act of 1972 and the large-scale reorganisation of 1974. The report emphasises that there were five meetings with the political parties. I think I participated in at least a couple of those before my retirement. I always emphasised the complete political impartiality of the commissions. It may be that we do not agree with their decisions and they may make mistakes for reasons other than political partiality.
These consultations have been criticised by some; but without consultations with the main political parties the streamlining of procedures for representation at inquiries would become very difficult. My experience is that those consultations have been of great value not only to the parties who attended them but to the commission itself. The Minister emphasised that an essential feature of the procedure is that of local inquiries. The commission is compelled to hold a local inquiry when there are objecting representations from a local authority or any body representing at least 100 electors. The important point is that the inquiry is into the provisional recommendations and it is how the commission carries out its preliminary recommendations that is of vital importance. If the preliminary recommendations covering whole areas are wrong in the first instance, then it makes the inquiries somewhat difficult to pursue.
Another complaint which is made is that the law does not require a second inquiry to be held or an inquiry to be reopened when that commission has made revised recommendations. This is left entirely to the commission's descretion. One can understand that if we continually had inquiries it would be more than seven years from one review being opened until its completion. But, as the original recommendations are provisional, it would seem that there ought to be more firmness in holding second inquiries where the commisssion has changed considerably from its original recommendations and still there are representations and objections made about it.
The commission, as had been stressed, started its work in February 1976, and according to legislation it must carry out its review on the 1976 electorate. In 1976 the electorate was nearly 34 million in England. By 1982 this had increased by over 4 per cent. to nearly 35½ million. Paragraph 2 of Chapter Two of the commission's report says:
"The 1976 electorate on which we were required to base our general review became less realistic as the task proceeded."
The first issue for the future is whether there has to be a change in procedure for fixing the number of English constituenices. This is dealt with in paragraphs 3 and 4 of a note in the report by the deputy chairman, which appears on page 151. The deputy chairman writes:
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"3. … it is not known when the English Commission commences its review precisely how many seats will be finally recommended by the other two Commissions, and it would be therefore wholly impossible—whatever method of review was adopted—to make allowances for the possibility (which has in the present review become an actuality) of those Commissions recommending additional seats for Scotland and Wales. It obviously cannot have been intended that the English Commission should wait to commence its review until immediately after the other two Commissions had finished theirs.
4. Not only is there no machinery provided by the Acts for producing a result consistent with this overall limit, but there are other provisions which create a fundamental difficulty by actively militating against it."
We have the position that, whereas the English review has to be based on 1976 electorates, because that is when they announced they were going to start their review, Wales started in February 1981; and so their review is based on the 1981 electorates. The year for Scotland was 1978; and so we have three commissions, all with different bases for electorates in carrying out their reviews. In their reviews, Wales increased by two and Scotland by one. We therefore have the situation which the Minister emphasised; that is, the desire to achieve somewhat equal constituencies but at the same time having the desire to retain local communities. The Minister explained that this is contained in Rules 5 and 4; but Rule 6 provides that Rules 5 and 4 may be departed from in their strict application on account of geographic considerations such as size, shape and accessibility. I notice from the report that there are only three counties where such a departure was considered to be relevant to Rule 6.
When debating the Welsh constituencies order last Monday, my noble friend Lord Cledwyn referred to the recent Court of Appeal decisions which ruled that, although the principle of equal electorates and constituencies was important, there were other important factors—and I quote from the Court of Appeal:
"Parliament had not told the Boundary Commission to do an exercise in accountancy—to count heads, divide the number and then draw a series of lines around the resulting groups".
The Court of Appeal stated:
"It had told the commission to engage in a far-reaching and sophisticated undertaking, involving striking a balance between many factors, and this called for judgments, not scientific precision".
These are the considerations put forward by those who made representations at the local inquiries. It is not purely a mathematical exercise. As the Minister said, the commission decided that so far as practicable they would not make recommendations which involved crossing the boundaries of London boroughs or the boundaries of metropolitan districts. I looked carefully at the metropolitan position and, as the Minister said, there are six constituencies that crossed the boundaries of metropolitan districts. Perhaps we could look at the conclusions of those two decisions later.
An important decision was that there would be no division of wards between constituencies. That would become impossible, and that is why the commission had to wait for the Local Government Commission to do its work of re-warding. But the seven-year period of the review means that there are already, before we have passed this order, a number of anomalies. Already a number of proposed new constituencies are substantially above the figure of 1976. Some of them involve new or expanding towns. For example, we find that Milton Keynes has risen from 50,000 to 76,500;

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Warrington South is up by 14,000; Peterborough is up by 15,000; and East Berkshire, including Bracknell, is also up by 15,000. Mid-Worcestershire, which includes the expanding town of Redditch, is up by 16,000 since the review started.
There is an important table on page 147 which summarises the position between 1976 and 1982. I agree with what the Minister said about the commission achieving a 75 per cent. position under 10 per cent. difference above or below the quota; but the table also gives different figures which I want to emphasise. There are 45 new constituencies with electorates at 1976 more than 10 per cent. above the quota. That compares with 156 of the existing constituencies, so a good job was done. But already, based on 1982 electorates, this number has risen from 45 to 60 with over 10 per cent. above the electoral quota. On the other hand, there are 85 constituencies with electorates as at 1976 more than 10 per cent. below the quota; and again that compares very favourably with 171 of the existing constituencies. Once more, based on the 1982 figures, there are already 97 which are more than 10 per cent. below the electoral quota. This means that some 157 constituencies—that is, 30 per cent.—are already more than 10 per cent. above or below the electoral quota. We are passing the order only today, and they are based on 1976 electorates.
Paragraph 23 of Chapter 2 makes clear the view and also the powers of the commission, as follows:
"We have consistently taken the view that we are neither required nor empowered by the Rules to take into account the number and distribution of the electorate subsequent to the review date in 1976, even in cases where such projections appeared reliable".
The paragraph went on to point out that the only way in which the commission considered they were entitled to pay attention to apparent trends was in the selection of a particular scheme for the provisional recommendation. The commission also pointed out that they are not required to give attention to the particular nature of the constituency or to its makeup—for example, inner cities—which might bring extra burdens for its representatives. They are not geographic considerations which the commission is empowered to consider.
The question of the changes of electorates between 1976 and 1982 is dealt with at page 154 of the report and the final paragraph, No. 16, contains a special note by the chairman. This is important, because the deputy chairman writes:
"Owing to the length of time which the current review has taken, there have been in many instances considerable changes in the actual electorates as compared with those upon which the English Commission was forced to base its recommendation. The Commission uniformly adopted the view that they were not empowered, in deciding upon the theoretical entitlement of any area, to look beyond the 1976 electorate, that being the actual electorate at the commencement of the review.
"Where, however, information about future trends was available, the Commission, in deciding in any area between schemes of equal merit when formulating their recommendations, preferred schemes which would not, so far as could be seen, become rapidly out of date. The Commission took the view, however, that they could not recommend a scheme which would clearly not have been acceptable on 1976 figures merely because it had become acceptable on 1980, 1981 or even 1982 figures; to adopt such a stance would have meant possible unequal treatment as between those areas which were dealt with at the commencement of the review, and those which were dealt with later".
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It would seem from that that the deputy chairman is putting the view of the commission that they are dissatisfied with the parameters upon which they have to work. They recognised the problem that is caused by basing their review on 1976 when the actual order comes forward to Parliament in 1983.
I said I would not deal with special areas but I should like to draw a comparison of the situation which can arise by mentioning just three London boroughs. Bexley has three constituencies at present and the theoretical figure of the number of constituencies, based on the 1976 electorate, would be 2.48 constituencies; yet the commission recommended three constituencies. They decided to recommend that three constituencies be retained, even though one is 16,000 votes below the quota. Barnet has four constituencies at present; a theoretical figure of the number of constituencies is 3.45, and based on 1982 only 3.22. Yet the commission propose to retain the four constituencies, even though, based on the 1982 electorates, they are below the quota by 7,000, 10,000, 10,000 and 11,000—a combined difference of 38,000. But in the case of Haringey, with three constituencies and a theoretical figure of 2.43—Barnet keeping its four with 3.45 and Bexley keeping its three with 2.48—the commission are proposing to reduce the number from three to two. Therefore, one of the constituencies is 19,000 over the quota and the other 10,000 over, as at 1976, but, based on 1982 figures, 11,000 and 5,000 over.
The commission report that they have done this because the electorate had declined by 20,000 since 1965, and a continued decline is projected. That is a rather important point to which I shall come before I close, because it raises the question: how far should a commission be able to take electorate trends into consideration, despite not being permitted to have regard to changed electorates after the date when they commenced the review, which in this case was 1976? I think all noble Lords will agree that it is sensible to take account of local community ties, but how far do the attitudes and decisions of the various assistant commissioners—because there have to be quite a number to take local inquiries differ in that respect?
Because of the time taken to complete the review—I am not blaming the commission, because there were factors militating against finishing earlier—even though the final date could have been April next year, will it be possible to review the European Assembly constituencies before those elections in May next year? If not, there will be considerable overlapping of many parliamentary constituencies, because, unwisely—and we opposed it from these Benches—the 1981 Act provided that European constituency reviews should not take place at the same time as parliamentary constituency reviews. So that is still waiting to be done. Will it be done in time for next year's European Assembly elections?
The main feature of the review is that the electorates are already seven years out of date. But the next review will not be until 1993 at the earliest, or 1998 at the latest, and by then we shall have a vast number of anomalies which will present problems for us, because it seems that the commission are able to have interim reviews only in order to get compatibility of constituencies with any local government area changes that

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may take place. Before the next General Election, it would seem that consideration needs to be given to the rules.
Should the arrangement of constituencies to achieve equal electorates have greater priority than at present? How far should there be any crossing of London borough boundaries and metropolitan district boundaries? We all know that in the non-metropolitan areas it is quite a common feature for a local authority to be divided between one constituency and another, not only in the rural districts but also in the urban districts. Without that, it would be a very difficult task. But in many of these cases in the London boroughs and the metropolitan districts, are there really local ties or are many of these non-existent?
I ask the question: so long as ward boundaries are kept intact, does it matter if local government boundaries are crossed? I make it clear that the political parties agree with the commission that this should not take place in London or in the metropolitan districts, and, to my knowledge, no local authority has asked that boundaries should be crossed. But this is a factor which should be considered. Should greater attention be given in future to the trends in electorates, so that substantial variations in electorates before the next review may be avoided? Should there be greater synchronisation between the reviews that have to be carried out by the local government boundary commissions and the parliamentary commissions?
I throw this out as a personal observation. I wonder whether it would be a better procedure if there was one commission for England, dealing with both local government reviews and parliamentary reviews. Admittedly that would mean a bigger staff, But there are two separate staffs at present. It might make the commission a more permanent job, but it might also avoid the position which the present commission admit has been a factor in preventing them from doing the job as expeditiously as they hoped. But re-warding and the size of electorates are part of our democracy and are matters to which we should give the most serious attention.
4.35 p.m.
Lord Mayhew: My Lords, our present constituency boundaries give a flagrantly unfair advantage to two classes of electors. The first class is electors in small constituencies. When there are 24,000 electors in Newcastle and 100,000 electors in Buckingham, it means that the influence of the vote of a Newcastle elector is worth more than four times the influence of the vote of a Buckingham elector. Also, our constituency boundaries, which, by international standards, are absurdly confined and elect only one MP, give a flagrantly unfair advantage to another class of electors; namely, those who support the Conservative and the Labour parties. In 1979, 40,500 electors were enough to elect a Conservative MP; 43,000 electors were enough to elect a Labour MP; but it needed 390,000 electors to elect a Liberal MP. Thus the vote of a Tory or a Labour supporter was worth nearly 10 times the influence of a supporter of the Liberal party.
The second anomaly is far more important than the anomalies that we have so far been discussing on this order about the size of boundaries, both because,
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statistically, the anomaly is far greater—10 to one instead of four to one—and also because what decides whether an elector gets advantage or is penalised is not the place where he lives but his political convictions. The result is that these constituency boundaries, with tiny electorates and one Member, hopelessly falsify the political balance of the House of Commons, making it totally unrepresentative.
Why, then, do we have this strange spectacle of the Government and the Opposition assiduously applying themselves to this minor anomaly of the difference between an elector in Watford and an elector in Buckingham—of course, they are right to do so and on these Benches we support the order—and how does it come about that the Government and the Opposition can spend so much time, so much care and so much dedication on this minor anomaly, while they set their faces absolutely against a removal of the far more important and absurd major anomaly to which I refer?
We get a clue to the answer if we look a little more deeply into the attitude of the Government and the Opposition to this order. No one will oppose it; I think that there will not be a vote and there was no vote in the other place. But a general election is on the way, and it is generally agreed that the new boundaries are worth about 20 seats to the Conservative party. The Conservatives allocated more staff to the commission and pushed on the work out of a totally disinterested regard for the principles of democracy and for the welfare of the electors. The Labour Party went to law and spent £70,000 in legal fees, wholly in the interests of democratic principles and the welfare of the electors. That is what they said. But, in fact, there is no noble Lord now present on either side of the House who does not know that that is a load of rubbish. We all know that the outstanding feature is that if the order comes in before the General Election the Conservatives will do better, and if the order comes in after the General Election the Labour Party will do better. We must look at this in a frank manner and not take at face value the attitude of the parties to constituency boundaries.
What I have said about the attitude to this order of the two major parties gives us a clue as to the reason why they resolutely oppose rectifying a really important anomaly in constituency boundaries which falsifies the whole representative nature of the House of Commons. Here again, what they say in public is, "A different electoral system or proportional representation would be unfamiliar to the poor electorate. It would be too complicated for the poor electorate. It would mean bigger constituencies." That is what they say in public. However, they add in private, over a drink, because they are all honourable men, "My dear chap, don't you realise that we should lose scores of votes? Maggie would not stand for it! And it would be the end of Socialism." That is what they say over a drink, in private—and there is a great deal to it, as well.
I make the simple point on this order, while not opposing it, of course, that it removes a minor anomaly—an anomaly that is minor compared to the extraordinary anomaly to which I have referred—but to suggest that the Opposition and the Government alike are in favour of removing electoral anomalies is true only provided that it does not harm them and their electoral prospects.
4.41 p.m.
Lord Boyd-Carpenter: My Lords, I have long been an admirer of the mental agility of the noble Lord, Lord Mayhew, both in another place and in this House—but your Lordships have been treated this afternoon to a supreme example of it. The noble Lord has introduced into a debate on the Boundary Commission's Report and the subsequent order the wholly irrelevant if highly entertaining subject of proportional representation. I am not going to be seduced by the noble Lord into following him up that primrose path, although I am one of those of your Lordships who are not wholly without views of a somewhat critical character on the various nostrums of PR which are being sold about the country today.
The noble Lord, Lord Mayhew, said that we should be frank—and so let us be frank. One knows perfectly well that the Liberal Party push for PR because they know that they have not the slightest chance of obtaining anything like a majority under the existing system. It is just as well that they should say so and that those who have to vote under the existing system should know that the Liberal Party have opted out of the forthcoming election.
Now may I come to the noble Lord, Lord Underhill, who does—and I say this very seriously—speak on this subject with enormous expertise, deriving particularly from the previous appointment he held with such distinction for a considerable number of years. Very few people know more about our electoral system than he does, and very few of them are in this House.
I will take up one point that was made by the noble Lord, Lord Underhill, with which I wholly agree. He said that we in this House approach this subject fairly calmly. Not only are we personally not affected and have no constituencies to be altered but also, as the noble Lord failed to remind us, we do not even have a parliamentary vote. Your Lordships will recall that together with aliens, lunatics, and persons serving more than a 12-month term of imprisonment, your Lordships are not able to vote under the system which this order will put into operation. Therefore, we seem to be carrying our impartiality in this matter to a considerable degree.
I hope that the noble Lord, Lord Underhill, will not mind my saying that I very much liked the approach he adopted—and I noted the difference between his aproach and the approach opted for by his honourable friends in another place. The noble Lord, Lord Underhill, dealt seriously and helpfully with some of the problems which arise under the existing system. I personally happen to share his view that it seems a pity that the commission should not be allowed to take into account population changes since 1976, and I see no reason at all why London borough boundaries should be sacrosanct from the point of view of London constituencies. It is an illusion of some councillors that there is any real spirit of cohesion in London boroughs.
Something which the noble Lord did bring out, and which I should like to stress, is that an operation of this kind—a redistribution—is absolutely essential to the working of our democracy. Populations move. The centres of old cities die out and people leave them. New areas are developed and built up all over the country. It is very important that there should be a
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fairly frequent adapting of our constituency system to the needs of that situation. Otherwise, it can become an absolute nonsense to talk about one man one vote, where one man has a vote worth four or five times that of an equally worthy citizen in an adjoining constituency.
I could not help feeling as the noble Lord was speaking—but I am not sure that he will go along with me on this—that the point he made very validly that, because of the 1976 deadline there are already considerable anomalies in the size of constituencies, points perhaps to governmental action to secure a somewhat earlier further review and further redistribution before many years have passed. We have lost seven years in the movement of the population and there is therefore a strong case (although obviously this is not a matter to be dealt with until after the next general election) for the Government of the day to consider in discussion with the Opposition whether the interval between reviews should not, at least on this first occasion, be reduced. It is really quite damaging to a democracy to have such a very wide variation in the value of votes.
I venture also, with considerable diffidence, to express the hope that, after this matter is safely out of the way, the Labour Party may be prepared to adopt in future the attitude which the noble Lord, Lord Underhill, has adopted but which his colleagues manifestly did not adopt in another place or outside. I believe all of your Lordships will agree that we must change the system of constituencies to cope with flow of population. The only way that one can do that in practice is by entrusting this task to an impartial referee. As the noble Lord, Lord Underhill, very properly and rightly said—and I was glad to hear him say it—it is this quality of impartiality that the Boundary Commission does show. It may make mistakes but we all make mistakes; but that the commission is wholly impartial I was glad to hear the noble Lord confirm, and that is certainly the view of most if not all of your Lordships.
Once one has the system of not accepting a referee's decision and arguing against a referee's decision, one really does disrupt the chances of an orderly change. I say nothing about the recent action in the courts by the Leader of the Labour Party and some of his colleagues. As I am still a member of the Bar, I cannot express undue regret about the squandering of large sums of money on the employment of counsel. The money was probably quite well spent in that way; or the counsel concerned at least might be persuaded to that view. But the Labour Party's record in this matter, as the noble Lord, Lord Underhill, knows better than anyone, is very bad—including the really monstrous action in 1969, when the Labour Party were compelled by a decision of this House to go ahead with the proposals of the then Boundary Commission, and the then Home Secretary, Mr. Callaghan, tabled orders to implement them, such as this order before your Lordships, and then invited his honourable friends to vote down the orders which he had himself tabled in implementation.
I do not quote that to rub it in at this stage; we are at the penultimate stage of this measure; but I do mention it in order to express the hope that I feel strongly, that the Labour Party will in future recognise the essentiality of a Boundary Commission system and

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fairly frequent redistributions, and will therefore, if they think its decisions are going against their party interests, not seek, as they have on this occasion and as they did in 1969, to take every possible step to delay its operation and, as one or two Members in another place openly admitted to doing the other night, deliberately to hold it up. I hope the Labour Party will realise that a civilised conduct of our affairs in this parliamentary democracy demands not only a Boundary Commission but acceptance of its decisions fairly and honourably, and without attempting to take every step to defer them.
My Lords, let me console the noble Lord, Lord Underhill, with the thought—I am afraid there is not a right reverend Prelate on the Bench, so I shall have to quote it myself—
"There is more joy in Heaven over one sinner that repenteth than over ninety and nine just persons who need no repentance".
The noble Lord, Lord Underhill, is giving rise personally to very considerable joy in that context.
Lord Underhill: My Lords, before the noble Lord sits down—I do appreciate his kind remarks to myself—can I ask him to read the speech of Dr. Edmund Marshall from the Labour Front Bench in the Commons when this order was debated, and perhaps he will tell me at some time privately where Dr. Marshall differs from me, because I cannot find many discrepancies.
Lord Boyd-Carpenter: My Lords, I have in my hand, as it happens, an extract from Dr. Edmund Marshall when he said:
"Every opportunity will be taken to delay the constitutional enforcement of these boundary proposals".
Lord Strabolgi: My Lords, the noble Lord is out of order.
Lord Denham: My Lords, I think my noble friend was responding to an invitation, but I think he was also out of order. I think he must paraphrase and not quote.
Lord Boyd-Carpenter: My Lords, my ability to paraphrase is not unlimited, but as I know perfectly well the noble Lord, Lord Underhill, has the text in front of him he can check it. Dr. Marshall, to whose speech I was challenged to refer, made it perfectly clear that it was the desire of the Labour Party to delay the implementation of these measures for as long as possible so as to create as many difficulties as they could for the Prime Minister in the choice of an election date. If the noble Lord, Lord Underhill, desires to challenge that paraphrase, I will take him outside and show him the text.
Lord Alport: My Lords, I do not want to intervene in the personal exchanges between my noble friend and the noble Lord, Lord Underhill; nor do I want to detain your Lordships' House for more than a few moments. But I could not resist, after having listened to my noble friend's speech, just making one point. It is absolutely right that Lord Mayhew should introduce into this debate the question of proportional representation. After all, my noble friend said that the whole problem that we were facing in the redistribution of
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the constituencies was the problem of eliminating the variation in the value of the votes, and that is exactly what the commission were concerned to ensure—that as far as possible all votes would have equal value. The noble Lord, Lord Mayhew, has said—and I have no doubt his figures are correct as I got them down—that as far as the Liberal Party was concerned it took 300,000 votes to get a Member into Parliament, as far as the Conservative Party was concerned it took 45,000 votes, and as far as the Labour Party was concerned it took 42,000 votes.
I know the attitude of my noble friend and indeed many of my colleagues on these Benches and on other Benches as well. But the fact of the matter is that they are fighting a losing battle. There are an increasing number of noble Lords in this House and Members of the House of Commons who are very strongly in favour of proportional representation, and that is going to come. It may come after the next election or not, I do not know, but it is going to come before the end of the century. Then some of the problems of the variation in the value of votes, at any rate the greatest, the one that affects the democratic basis of our electoral system here, will be changed. I for one, and there are many others, will welcome the introduction of proportional representation at the earliest possible time.
Lord Shepherd: My Lords, it is quite some years ago when I was sitting on the Front Bench opposite as Leader of the House and made a speech in support of the present concept, that we should retain our present system of elections and should reject the formula that was then being put, I think from the Liberal Benches, for proportional representation. My argument on that occasion, and I suspect it is still the same for both the main political parties, was that under our present system Governments can emerge that are strong in the House of Commons, and that under proportional representation you could well have a split vote within the House.
I have to say that I have since then given great thought to this, and since I am what I am now I really begin to question or to have questioned that concept. It seems to me that the House of Commons ought to be elected broadly to represent the views of the electorate of the state. How it is achieved I am not all that sure; I am not sure that the pure PR system is right or whether the system that they have in West Germany might have some advantage. But, while this order should be proceeded with because we should not change it at this present moment, I do believe that Parliament ought to be thinking about this question in the next few years, though not in any party sense. I hesitate to suggest that there should be a Royal Commission because many of us feel that a Royal Commission is for something which is to be put off; then they report and that is something that we accept or we do not. But I have a feeling that this is something that maybe after the next general election Parliament as a whole ought seriously to look at, not taking PR in its pure and simple terms but looking at different versions of it. Personally, I am very much attracted to the West German system, where you have direct elections and also you have a degree of PR.
Clearly this order ought to be proceeded with, but I would hope that, whoever may succeed at the next

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general election, Parliament itself will insist that there ought to be a very clear look, impartial in party terms, at the whole system, on the basis of how best the general view of ordinary people within our country can be represented. I do not know whether the Green Movement in West Germany, having now got, I think, 27 seats, is significant or not, but it is clearly a view that goes throughout West Germany and I think it is better to be expressed in Parliament than outside in the streets at the barricades. We have not yet reached that position. We may well, but I should prefer their view to be expressed in Parliament rather than at the barricades. If one denies them the expression of that view through our rather ancient procedures, one will have them at the barricades. I should very much regret that. Whether that is right or wrong, I do not know, but I only hope that your Lordships will allow this order to proceed and that somewhere in the not too far distant future Parliament itself will very seriously consider the whole matter.
I take the noble Lord, Lord Boyd-Carpenter's point. He pointed out very clearly that this is an issue between parties. Parties are not the state. The state is infinitely greater than the parties and the interest of the parties. Therefore, I should have thought that, at some stage early in the next Parliament, Parliament ought to be looking at the whole way in which the general public, the general electorate, can have a greater participation and a greater say in the general decision-making of our Government and our Parliament.
5. p.m.
Lord Elton: My Lords, I have listened with great interest and attention to the points raised during this debate. It would be foolish, in the light of it, to claim that the commission's final recommendations are perfect in every way and that none of the criticisms made of them has force. What I do say, however, is that it is impossible to please everyone in a task of this kind; changes made to meet one set of objections would almost inevitably provoke fresh opposition from other quarters. The noble Lord, Lord Underhill, rightly and generously pointed out that the task of the commission required, and was met with, not only arithmetical skill but also with judgment. I believe that the commission has done the best it can to balance the frequently conflicting need to reduce the disparities between the electorates of existing constituencies and to preserve local ties.
Criticism has been made of what is seen as the commission's inconsistent approach to the problem throughout the country. The rules give the commission wide discretion and to my mind the inconsistencies which are criticised are clear evidence that the commission used its discretion and looked at each area on its merits. Had it adopted a rigid mechanical approach, I have little doubt that the objections would have been even greater. The observance of local government boundaries, especially in London, has been responsible for many of the significant disparities which are found in the final recommendations, and people in some areas, such as Liverpool and Formby, apparently valued the preservation of local ties more highly than achieving a standard of representation equal to that in other areas.
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The noble Lord, Lord Underhill referred specifically to Bexley. The 1976 electorate of 162,929 gave Bexley a theoretical entitlement to 2·48 seats. An allocation of the three seats produced an average electorate closer to the electoral quota than an allocation of two, and the electorate of the borough was stable. The commission therefore concluded that the retention of the three seats was justified, as will be seen from page 17 and paragraph 39. The electorate has since increased to 166,973 in 1982.
The noble Lord was also interested in the disparities in electorate sizes between the adjacent boroughs of Haringey and Barnet, but these disparities flow directly from the impact of Rule 4, to which my noble friend Lord Boyd-Carpenter drew our attention, requiring the Boundary Commission so far as is possible not to recommend constituencies that cross London borough boundaries. Once one treats each borough as an entity it follows that there can be no relationship between the size of constituencies in one borough and the size of constituencies in another.
The 1976 electorate of 159,570 gave Haringey a theoretical entitlement to 2·43 seats, which made the allocation the most marginal of all the London boroughs. As the electorate had decreased by nearly 20,000 since 1975 and was expected to continue to decline, the commission did not feel justified in allocating three seats without crossing borough boundaries. This course was rejected in order to preserve local ties, and the assistant commissioners who held the local inquiries recommended no change to the allocation. The allocation of four constituencies to Barnet produced an average electorate closer to the electoral quota than an allocation of three seats. Furthermore, the decline in its electorate by 2,340 between 1976 and 1982 had been less marked than in Haringey where the electorate has declined by 11,930 during the same period.
Today's debate and the debates in another place have revealed that there is some dissatisfaction with the rules under which the commission operates and a variety of criticisms and suggestions for changes in the rules have been made. May I tell the noble Lord, Lord Underhill, that I understand that the commission sees no prospect of completing the review of the European Assembly constituencies in England in time for its final recommendations to be implemented, with or without modification, for the elections in 1984?
I would not like to say that the noble Lord, Lord Mayhew, was predictable in the course which his speech took, but it did give rise to some anxious reflections by my noble friend Lord Boyd-Carpenter. It may merely be the punctuation, which will be cleared up in the official record, but when he said that Conservatives over a drink, since they were honourable men, were prepared to concede that Maggie wouldn't stand for it because it would be an end to Socialism, I think I share a little concern myself.
I think I can explain his position and that of my noble friend Lord Alport to my noble friend Lord Boyd-Carpenter as being very much analogous to that of two vegetarians at a banquet joining in a fierce argument over whether there should be meat or fish, when neither could touch either. The noble Lord said it was clear that my party was anxious to get these things through before an election, for party advantage,

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and that the party in opposition was anxious not to do so for the same reasons. He did not make the point that my noble friend made for him, that the only solution which would bring advantage in this field to the noble Lord, Lord Mayhew, was that of proportional representation—the nut cutlet of the electoral feast.
Lord Mayhew: My Lords, in order to be fair, will the Minister answer the question that I believe three speakers asked—whether the votes of electors of different political convictions should be of equal importance?
Lord Elton: My Lords, any system which is devised to cover such a disparate country as our own is bound to have disadvantages of one sort or another. It seems to me, to be honest, that the present system has the fewest disadvantages. It keeps constituency Members closest to constituency electors and to constituency problems. It produces what we all deplore in speeches but admire in practice, which is a basic two-party confrontational system of government. That is why we debate in a Chamber with two sides opposite each other, and the Cross-Benches that very few of them sit across—
Lord Mayhew: What about that, my Lords?
Lord Elton: My Lords, the noble Lord asks, "What about that?" Perhaps there will be more nut cutlets on the table later on. Basically, this House and another place demonstrate by their architecture the philosophy upon which we conduct our democracy; that is, there are the ins and the outs. If one goes to almost any other Chamber one finds a sort of circle, shading from one to the other. That is ideally adapted to the sort of shifting kaleidoscope of coalitions which the proportional representation system would produce. It is not appropriate to what we have now, saving the grace of the noble Lord sitting on the Cross-Benches.
However, I am already displaying my favourite weakness of hunting a fresh hare and we are addressing ourselves to an order, as the noble Lord, Lord Shepherd, pointed out, and the order is to implement changes which are fundamental to the survival of democratic orthodoxy and, indeed, soundness under the existing system. We have heard a great deal not only on the question of proportional representation but also on other aspects which touch on the whole question of how the Boundary Commission functions. The Government will note all these views and carefully consider them. But the existing rules were drawn up with all-party agreement, and I think we must all recognise that that would be the case for any changes also; and that may be something it would take some time to achieve. The completion of this review provides an opportunity to look at the legal framework and procedures which, as my noble friend Lord Boyd-Carpenter said, are essential to democracy. The Government will take full account of all the views expressed. In the meantime, if we can return to the business actually before the House, I beg to move.
On Question, Motion agreed to.

Farm Price Proposals: ECC Report
5.10 p.m.
Lord Mottistone Lord Mottistone rose to move, That this House takes note of the Report of the European Communities Committee on the EEC Farm Price Proposals 1983–84 (7th Report, 1982–83, H.L. 82).
The noble Lord said: My Lords, once again I have the privilege of presenting to your Lordships the report of the European Communities Committee on the annual price proposals at the request of our present Chairman of Sub-Committee D, the noble Lord, Lord Plowden, who is sadly unable to be with us for today's debate. I must again declare an interest, in that, being employed by the Cake and Biscuit Alliance and the Cocoa, Chocolate and Confectionery Alliance, I have a natural concern for the interests of food processors.
Also by way of introduction, I offer my thanks to my noble friend Lord Ferrers for kindly agreeing to speak both at the beginning and at the end of this debate so that your Lordships may have the advantage of knowing the views of the Government on this interesting subject before making your speeches.
Finally, I should like to express gratitude to my noble friend the Government Chief Whip for arranging almost uniquely for a debate of this sort to take place at a reasonable hour. As noble Lords who are also members of the Select Committee will, I am sure, be aware, it is more often than not the case that important debates—I am serious here—on EEC matters of this nature tend to take place at some ridiculous time like eight o'clock, when those few noble Lords who are still here are eating and the House does not have the benefit of hearing what has to be said.
I do hope that my noble friend the Deputy Chief Whip, whom I see to be with us, may convey to our noble friend the Chief Whip the great gratitude that we have and the thought that perhaps in future—I am very serious—these kinds of debates may be given a similar timing and given a chance. My Lords, what happens in Europe is terribly important. Indeed, in some ways it is more important than many of the things that we discuss of our own more domestic nature in this country. The sooner that we come to realise that the better.
I have had a look at my speech of 30th March last year in introducing the 1982–83 price proposals. At first sight I was almost tempted to limit my speech to inviting you to read that earlier one of last year, adding one year to the appropriate dates, and then to sit down. However, I am afraid, my Lords, you have to hear a bit more. There really is much that is similar and the whole debate is worth reading again, but there are sufficient new matters or aspects of matters established in earlier years, some of which are of fundamental importance to the future of the common agricultural policy, to justify my giving a more normal introduction to my Motion.
Before considering the report itself, it is perhaps reasonable to remind your Lordships briefly why the common agricultural policy is important and how it is currently most under threat. It is important because over the years it has provided the background to feeding, mostly from "own resources", the peoples of

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the Community at prices which at any rate initially were broadly tolerable—at least to the Continental consumer. At the same time it worked towards that aim of Article 39 of the Treaty of Rome to ensure that the standard of living of those engaged in agriculture is broadly comparable with that of persons employed in industry. As such—I think that this is important—it has had an important stabilising influence in the Community over all the years of its development. It may not be entirely pleasing to everybody, but up to now the common agricultural policy has done a jolly good job.
However, it is under threat, because the very policy has led to food costs which all consumers are increasingly protesting about. It has also led to the production of ever-increasing surpluses, which add to the costs of storage in intervention and, when sold outside the Community, add to world production totals and decrease world price. That decrease in world prices adds further to costs in increased export refunds and generates as well antagonism on the part of other major suppliers of agricultural commodities like, in particular, the United States of America. Those underlying difficulties are among those highlighted under the heading of "The Problems" in paragraphs 11 to 15 of the report—I would draw your Lordships' attention particularly to paragraph 12—and in paragraphs 34 to 37 of the report.
Turning to prices, I would invite your Lordships' attention to paragraph 17 of the report and in particular to its penultimate sentence, in which your Lordships will see that, although considering seriously that there should be a total restraint in prices,
"The Committee do not consider it politically realistic or necessarily wise to look for no price increases at all".
Your Lordships will, however, have seen in press announcements made since the report was written that the Commission has decided to recommend that dairy prices should be frozen because the milk surplus is growing frighteningly large. That goes further than the committee felt was likely to be politically acceptable but is none the less welcome for being a firm move in the right direction when the whole basis of funding the common agricultural policy is in jeopardy. This is the conundrum. If the common agricultural policy is in jeopardy, firm action must be taken to put things right so that it is not swept away altogether or seriously distorted so that it ceases to achieve any of the aims for which it is established.
This new approach will also go some way towards meeting the demand of consumers, which is that there really must be a halt to the rise in prices for food as sold in the shops. Whether one has a particularly strong bent to try to realise that or a particularly strong bent to realise the aim of the farmers to get a reasonable return for their efforts is one of the conundrums, but it is a fact that this will no doubt be something that the consumers will be interested in. I shall be most interested to hear what my farmer colleagues on Sub-Committee D have to say about prices generally and dairy prices in particular.
The key problem, however, as I see it, is surpluses, which short-term price reductions seem to exacerbate rather than to contain. In the guidelines which were issued in 1981 there was a basis of a solution to that
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important problem, but in the 1982–83 price fixing the Council of Ministers took the easy way out and, to be blunt, let the rest of us in the Community down very badly indeed. That failure to act responsibly is described in paragraph 9 of the report, to which I would direct your Lordships' attention. I would call your Lordships' attention also to paragraph 10. I ask my noble friend Lord Ferrers when he comes to speak to give the House the assurance that he will invite his right honourable friend the Minister to take the robust attitude referred to in paragraph 10 and expected by the committee and exercise all the pressure that he can on his fellow farm Ministers to follow a similar line this year.
As will be seen from the last sentence of paragraph 17 and from paragraphs 24 to 32, to which it refers, the committee believes that the most realistic method of controlling production currently being proposed by the Commission lies in the rigorous application of the production threshold mechanism. It is perhaps reasonable to mention that the idea of a five-year rolling programme—which is encompassed within the paragraphs to which I have drawn your Lordships' attention—around which the production threshold mechanism is built, was first proposed by your Lordships' committee in its report on the common agricultural policy issued in February 1980. So naturally those of us who have been Members of Sub-Committee D for some years like that proposal very much.
But to be thoroughly serious, the forward projection of limitations in production not only provides the basis of a method for controlling surpluses, but also can be used to give advance warning to farmers of what they should do to respond to the restraints. As has been said many times before, the announcement of farm prices in the spring or summer—and it sometimes is in the summer, or at least it has been in the past—of a given year is bound to be after much of the farmers' planning for the season concerned, and indeed the relevant planting, has already taken place. I therefore invite your Lordships' attention specifically to paragraph 32, which is well worth looking at. In that paragraph we suggest very much that the farmers should have the facts of the guidelines and the policy thoroughly presented to them in advance.
I should add that the National Farmers' Union have indicated that they support this approach. They do not support much else either in our report or in the Commission's proposals, but they do support this and, therefore, in supporting it they are perhaps supporting the principles, to which I am referring, of the production objectives, and indeed the whole principle of the five-year rolling programme. If so, then that is an added reason why the Government should give every type of support to it.
There are other important matters of greater detail in the report to which I hope my noble colleagues on Sub-Committee D who are also taking part in the debate, as well as other noble Lords—and I am delighted to see several of them—who are not on Sub-Committee D, will draw your Lordships' attention. I should like to conclude by making three points. First, I should like to express how grateful the subcommittee were to all those who contributed both written and oral evidence, and how grateful they were

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to those who gave written evidence and accepted our view that there was not a need for very much oral evidence in order to give us a chance to get the report written and to have this debate before the farm Ministers meet to discuss the proposals. We have managed to achieve that and it is, I trust, a great help to the Government to have a clear guide from us when our Minister goes and has these discussions within the next few weeks.
Secondly, I should like to draw your Lordships' attention to paragraph 6 of the report. For some reason of protocol, although copies of the Farm Price Proposals are available clandestinely in Brussels on the day after publication, your Lordships' Committee and, I believe, the Ministry of Agriculture, Fisheries and Food have to wait nearly a month before they can see the proposals. As stated, this year the position is much better than it was previously, and indeed this debate is taking place more than three weeks earlier than the debate last year. But it could be better still and it might have been possible, if we could have had a little earlier warning of what was going to be in the proposals, for us to take more in the way of external oral evidence. It probably was not necessary this year because of the similarity between this year's proposals and last year's proposals, but it might well be in the future. So an earlier issue is very important. By all means let us wait a month for the official English translation, if that really has to be so, but please can we have an unofficial copy as a pre-Christmas present—it was published before Christmas last year—and if necessary let us have it in the vernacular French and we will struggle through it trying to translate it for ourselves. But whatever it is, can we have a sufficiently authoritative copy of the price proposals before the end of the calendar year in which they are being published?
Finally, I should like, on behalf of the subcommittee, to thank the clerk and the specialist adviser for their hard work and enthusiasm in helping us to put together a report which, if not perfect, I hope is sufficiently succinct and to the point to be easy reading for your Lordships. I hope that it makes its points as clear as possible. My Lords, I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on the EEC Farm Price Proposals 1983–84.—(Lord Mottistone.)
5.27 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, the House will be grateful to my noble friend Lord Mottistone for introducing this debate this afternoon and I would like to thank him as well as the noble Lord, Lord Plowden, and the sub-committee for their report which has provided the framework for our debate. It has provided us with a clear analysis—which is not always readily discernible from Commission documents of the Commission's price proposals for 1983–84. I agree with my noble friend that it is very useful that the debate should be taking place earlier this year than usual, and that is mainly because, as my noble friend said, the Commission's proposals themselves have appeared earlier. Now that the German elections are over, negotiations will begin in earnest and it is therefore very helpful to have the
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views of your Lordships at this formative stage in the price fixing procedure.
My noble friend referred with some feeling to the wish of having these papers earlier than has proved possible this year. There are, of course, agreed procedures for making documents available to the House which involve other departments as well as the Ministry of Agriculture, Fisheries and Food. I can assure my noble friend that we are looking into the problem which the sub-committee has identified and to which he has referred, and we hope to be able to offer arrangements which will overcome the problem in future years. I can give my noble friend the assurance that we will be in touch with the subcommittee about the matter.
I thought that it might be helpful to your Lordships if I were to give the Government's views on the Commission's proposals at the beginning of the debate and then, if there are any points to which your Lordships would particularly wish me to reply, if I had the leave of the House at the end, I could do so.
I am grateful to my noble friend Lord Mottistone for stating the advantages of the common agricultural policy, because too often that is not done and the common agricultural policy is too frequently subject to vilification. As in all things in life, the advantages are always taken for granted; it is the disadvantages which irk and upon which the spotlight tends to be turned, and thereafter the arrows. I am grateful to my noble friend and I think it is useful to have had the advantages of the common agricultural policy extrapolated this evening.
The proposals will next be considered at the Agricultural Councils on 14th and 15th March and on 28th to 30th March. I think it is reasonable to hope that it will be possible for agreement to be reached by the deadline of 1st April, which is not only what the sub-committee wants but is also, as it rightly states, what the industry would wish. Of course, I cannot guarantee that that will happen, but it seems a reasonable possibility. But like all Community matters, it depends upon the other nine members too.
The Commission proposed in December price increases based on a "norm" of 5·5 per cent., with less for some products and more for others. The average for the Community as a whole is 4·4 per cent., which is well below the forecast rate of inflation of nearly 9 per cent. For the United Kingdom the figure is 4·1 per cent. This does not take into account the revaluation of the green pound which the Commission proposed in December, because the drop in sterling since the proposals were published has in fact done what the Commission's proposals sought to achieve, and more.
Lord Harmar-Nicholls: My Lords, if my noble friend will give way, I want to raise a point on the record concerning the average. Surely, if you take into account the green pound, the average is 7 per cent. and not the 5 per cent. to which my noble friend refers?
Earl Ferrers: My Lords, this may be a question of mathematics. When one comes to the question of green pounds and devaluations of other currencies, it becomes fairly complicated. All I would tell my noble friend is that the average—or the "norm"—was 5·5

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per cent. But the averages which I have quoted take account of the latest news received in the last few days of the Commission's decision to revise downwards its proposals on milk, and perhaps I can return to that later.
Throughout the Community, agriculture had a good year in 1982, despite the general recession. This was partly because of exceptionally favourable weather conditions and partly owing to the price increases in the last two price fixings. Agricultural incomes in the Community—and this statistic is achieved by taking into account all those involved in agriculture and does not just relate to the incomes of farmers—are now estimated to have risen by about 9 per cent. in real terms in 1982. But it is important to remember that the 1982 figure—in real terms—is only fractionally above the average of the three years 1973–75, and it is still below the level of 1978. In the United Kingdom the Annual Review of Agriculture shows that farming income—and I reiterate the distinction that this is the income of farmers as opposed to the income of all agriculture—rose in 1982 by about 45 per cent. in money terms. Much has been made about the increase in incomes in the last week or so, but we must remember that in real terms farming income has still not returned to the levels which were achieved in the mid-1970s.
This substantial improvement in agricultural incomes can only be good, and I am bound to say that I am amazed that at a time when we have been going through the most appalling recession—when industries of all kinds have been showing losses, when some businesses have been going bankrupt and when some have been shedding labour—when one industry, agriculture, shows better results, higher profits and actually takes on labour, this should have been met with almost howls of protest. Anyone might think that it was a bad thing that an industry should make a profit; that it was bad to see an industry beginning to emerge from recession. If farmers have had a better year, maybe they will be in a better position, for instance, to buy more tractors and machinery and so help the agricultural engineering industry, which itself has been going through the most desperate ravages of recession. Other industries whose prosperity and employment are intimately dependent upon the fortunes of agriculture ought also to benefit from better agricultural results.
More profit may actually stimulate demand and this is, of course, what the whole country needs. It has been slow enough coming, but if it has appeared in one industry—just a little—then we ought to rejoice and hope that it will happen in others. After all, it is not as though the profits of agriculture have been profligate. When I use the word "profits", perhaps I should be more correct to use the words "farm incomes". But the profits have not been profligate. By its nature, agriculture is influenced by factors over which we have no control—such as the weather—which make good years and bad years a hazard of the industry. There has been one good year which, with the previous year, has helped to reverse the downward trend, but agricultural incomes are even now not what they were in real terms about seven years ago.
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My noble friend Lord Mottistone says that we must draw a halt to the increase in food prices in the shops. Perhaps I could remind him what I told the noble Baroness, Lady Seear, in our last debate. Since 1979 inflation has risen by 50 per cent; retail food prices have risen by 34 per cent; farm gate prices have risen by only 23 per cent. So agriculture has made a substantial contribution to the attack on inflation. If there has now been an increase in incomes, that should in turn have a beneficial effect on other industries.
The Commission has set out, as it did last year, its medium-term forecasts for production and consumption over the next five years. Like the subcommittee, the Government welcome the continued attempt by the Commission to encourage the Council to take annual decisions which are, nevertheless, set against a medium-term prospect. The Commission have proposed increases which are below the norm for the main surplus commodities—and these are, milk, sugar and cereals—where stocks are high and problems of disposal are increasing. The increases are 2·33 per cent. for milk, taking into account a further reduction of 0·8 per cent. decided upon by the Commission last week; 3 per cent. for cereals; and 4 per cent. for sugar. But for wine, where there are also disposal problems, the Commission has proposed a 5·5 per cent. increase, with a change in the marketing year, which could be worth an additional 1 per cent.
In our view, all the Commission's proposed increases are too high. This is also the view of the sub-committee. We should wish the final figures for these surplus commodities to be lower than those which are proposed. Indeed, we consider that by far the most sensible thing would be not to increase the prices for cereals and milk at all. But I am bound to make it clear that, although we shall continue to press for this—and my noble friend asked my right honourable friend to be robust—we shall not necessarily carry all our Community partners with us. Indeed, we may not carry any, but a lone voice in the wilderness is not necessarily a wrong one or a disreputable one. However, there are some member states who consider the proposed increases are not high enough.
One could argue that last year's settlement was not as effective as it might have been in implementing the Commission's guidelines. One of the good features about it was the introduction of guarantee thresholds for milk, cereals and oilseed rape. This is the first year in which these thresholds will have an effect on prices, provided that the Council takes the necessary decisions, and we attach particular importance, as does the sub-committee, to this because it will set the pattern for future years.
Perhaps I could refer to the main commodities in greater detail. I will take cereals first. The cereals sector is the most expensive common agricultural policy sector after milk. It accounts for no less than 16 per cent. of the guarantee expenditure, and accounted for £1·2 thousand million in 1982. Production in the Community is increasing, and the reality is that it will continue to do so as new, higher-yielding varieties are introduced. At the same time, consumption within the Community is static and world prices are depressed. It is therefore difficult to dispose of the surplus at a reasonable cost. This is exacerbated by the fact that

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increased exports by the Community themselves increase tensions in trading relations and I think particularly of the United States.
There is a strong case for a shift in the balance of support in favour of livestock producers, in particular for pig and poultry producers who have been facing difficulties, by holding down cereal prices. At last year's price fixing my right honourable friend the Minister of Agriculture strongly supported the introduction of the guarantee threshold scheme as a method of restraining prices as production increases. But we should like to see improvements to make the scheme even more effective.
We should particularly like to see the price reductions, which the scheme sets out to achieve, apply not just to intervention prices but to target prices as well. For it is these which determine the price of imported grains. We do not think that it is justified for the imports of those types of cereal which we cannot produce in the Community—such as hard wheats from North America, and maize for starch and breakfast foods—to be subjected to additional, and in our view unnecessary, increases in the levy in the way that takes place.
Milk accounts for 31 per cent. of the guarantee section spending, or about £2·4 thousand million in 1982. The increasing surplus of milk in the Community is a matter of great concern, about which your Lordships have expressed concern on a number of occasions. Effective measures to tackle the surplus are essential. The co-responsibility levy is certainly not the answer since it applies to all producers, regardless of whether or not they are adding to the surplus. It increases the price, and so thereby reduces consumption. In our view, it would be better to have a lower price rather than a higher price and a co-responsibility levy. However, the Commission have proposed that the levy should continue at the level of 2 per cent. This continues the reduction of ½per cent. which was made last year. Although we would like to see the levy abolished, I must tell your Lordships that it is likely to be difficult to achieve.
The Commission have proposed the continuation of last year's arrangements for the distribution of 120 million European currency units (£66 million) for small producers, and I have no doubt that there will be pressure during the negotiations for this to be increased. We regard measures of this sort to be of a social character and we consider it quite inappropriate for them to feature as part of the support arrangements to be financed by the guarantee section of FEOGA. It goes without saying that we also consider that the co-responsibility levy should not be adjusted in any way so as to favour small producers or to penalise larger ones.
The Government welcome the Commission's proposal for the application of the guarantee threshold through intervention prices as a means of tackling the problem of the milk surplus. The cut of 2·2 per cent. which they originally proposed was not in our view adequate to cover the extra costs of disposal which will be brought about by increased deliveries to dairies in 1982, and we welcome the Commission's decision to propose a further cut of 0·8 per cent., bringing the total cut to 3 per cent. However, as I said, we still think that
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the best course would be to have no increase in milk prices and to abolish the co-responsibility levy.
The Commission have proposed that the special United Kingdom butter subsidy, which is currently worth about 13p per pound on all retail butter, should be continued. We But we consider that there is a good case for an increase, in view of the fact that butter stocks are mounting and the prospects of increased consumption are poor. On school milk we welcome the Commission's proposal to guarantee the Community's financial contribution for a full five years, but we would like to see an increase in this as well as some administrative improvements to the scheme. While the Community beef market is showing some signs of being oversupplied, the Government's view is that the case for a guarantee threshold is weaker than for some other commodities. There would also be practical difficulties in applying such a scheme.
We attach great importance to the variable premium scheme, which can be worth up to almost £50 per animal, and we welcome the proposal to extend it for another year. It encourages consumption and it safeguards producers' returns. We would like to see improvements in the scheme, but we have to face the fact that the scheme is not liked by other member states. We are also seeking an increase in the suckler cow subsidy which would be helpful for specialist beef producers. There are proposals that this year there should be a carcase classification scheme for intervention buying purposes on a uniform basis throughout the Community. We are concerned about this and would not agree to it unless and until we are satisfied that it can be applied both fairly and effectively.
The Government are concerned about the financial implications of the Commission's proposals and we will wish to ensure that the Commission's figures are properly studied. Our aim remains that the rate of increase of guarantee spending should be markedly lower than the rate of increase of the Community's own resources. The Commission apparently has a similar aim but we have doubts, as does the sub-committee, as to whether the proposals will in fact achieve the aim. Despite the problems and anxieties which are frequently expressed about the cost of the common agricultural policy, it is encouraging that agriculture's share of the Community budget has in fact fallen from 80 per cent. in 1978 to around 65 per cent. in 1982. This is substantial progress, and we do not want this progress to be jeopardised.
The Government's approach to the negotiations is very much in line with that of the sub-committee, in particular on the need for restraint on prices for those commodities which are in surplus, and on the effective application of the guarantee thresholds. My noble friend asks my right honourable friend to be robust. I hope that what I have said indicates my right honourable friend's intention to be robust. But we have to face the fact that measures of this sort are likely to be resisted by some other member states.
We shall hope for a satisfactory and, with luck, early settlement which will be in the best interests of our producers, our processors, and our consumers. I look forward to hearing your Lordships' contributions today, which I know will be of great value, as will be

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the report of the sub-committee, and I hope that they will encourage us in confirming the approach which we take.
5.47 p.m.
Lord Mackie of Benshie: My Lords, I am much encouraged by the way in which the noble Lord, Lord Mottistone, introduced the report. It might sometimes be thought on the committee that we are in slight opposition to each other. He was good enough to declare his interest in various alliances, and of course I must declare that I have an interest in another sort of alliance as well as having an interest in farming, being a farmer. On the committee the interests of the farmers and indeed of the other members are in the long term. The noble Lord and the Minister both brought out the fact that the common agricultural policy has worked really extraordinarily well if you take the three main planks of the Treaty. These were, first, to provide a stable supply of food, which of course is the first duty of any Government or any alliance; secondly, to provide a reasonable price to the consumer; thirdly, to see that the competent members of the farming community were rewarded in approximately the same way as the people in industry.
When we consider that in Europe we are looking at a problem of surpluses, while in Eastern Europe they are looking at problems of shortages, we must say that the CAP has done a good job in this essential of providing food in quantity and in choice for the consumer. It should also be pointed out, as in fact the Minister pointed out, that food prices have risen by less than the retail price index. In fact, in the report it is pointed out by the Minister of Agriculture that the rise in food prices evolves rather more from the processing and retailing section than from the prices received by farmers. If you look at the note by the Ministry of Agriculture you will see that they say that rather more than half of consumers' expenditure on food is represented by the costs of processing, packaging, distribution, et cetera. They go on to say, in the case of cereals, that the cereals themselves represent only about one-quarter of the retail price of bread.
It is also a fact that the proportion of weekly income that consumers have to spend on food has fallen in 10 years from 32 per cent. to between 21 and 22 per cent. By that I do not mean that we can go on putting up the price of food. In reality, however—although no one likes to pay more for food—when one looks at the figures and facts (and of course it does not apply to all sections of the Community, but to the majority of people in the Community) it is clear that people are having a reasonable deal on that side of the regional aspect of the Treaty.
As for farmers' incomes—the Minister mentioned this—I must refer to the hoo-ha, the press comment, about the 45 per cent. rise because it has been ludicrous, and I must quote a few figures to the House. Taking the base year as 1975, in 1979, in real terms, their income was 68 per cent. compared with 1975; in 1980 it was 52 per cent. compared with 1975; in 1981 it was 58 per cent. of what it was in 1975; and we find the colossal rise to 77 per cent. of the 1975 base year figure in 1982.
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I must also refer to the even more ludicrous comments that have been made about beef farmers in Ulster. Ulster is one area of the agricultural community which has had a very raw deal out of the CAP because its agriculture was based on importing cheap grain from the other side of the world and the production of foodstuffs. It is said that some incomes of beef farmers in Ulster rose by 400 per cent. In fact, when you look at the figures, you see that the net income per farm rose from £703 to £3,876. I should be interested to know the income per family in this country which is considered to be below the poverty level. I cannot believe that a rise from about £14 a week to about £70 really represents farmers in Ulster rolling in wealth and purchasing large numbers of expensive motor-cars. There is a curious willingness on the part of many people in the urban community to look upon the farming community as people who are always complaining but who really never have anything to complain about.
We must consider the real problem of surpluses and, taking a general view, the committee has been consistently right in its attitude. Long before the guidelines, it said we should have a five-year forecast on which farmers would be able to plan. The committee, consisting as it does of all shades of opinion, has consistently said that the problem of surpluses can be tackled only long-term, by the law of supply and demand, and not by savage, large drops.
One snag has always been that the Council of Ministers has overridden the expert advice of the Commission, and they have done so for purely political reasons. There is no doubt also that the payment into the budget is very unjust in that the industrialised nations with a low proportion of agricultural land pay most, West Germany and the United Kingdom being the main contributors. As a result, the nations of the Community with large agricultural sections do not mind pushing the budget to the limit because they benefit from that. France, Denmark and the Netherlands do that consistently, so we get purely political results coming out of the Council of Ministers, which in the long run must do great harm to the CAP and the farming community in the whole of Europe.
After all, we cannot go on with these enormous surpluses without making people think there is something very far wrong; that too much money is being paid or—as people are saying in some quarters—that the whole system is completely wrong. What the farming community needs in order to produce food are not high prices so much as stable prices. Farmers' unions throughout Europe need to realise that they cannot go on getting increases when we are in surplus, and the surpluses are growing. That is what has happened, so we must accept that something must be done to bring the surpluses down.
In that context, I wish to comment on the notion that we can give the surpluses away to the hungry third world. That may be so, but it is now accepted by the major agencies, in looking at hunger in the world, that food aid—by which I do not mean famine aid—is doing a great deal of harm. It is undermining local agriculture and social structures, is driving people into the towns, and is altogether the wrong way to go about it. If we are to help the third world we should be seeing

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that they have the structure—the dams and so on—and we should give them the money for that, and leave them to produce the food under a high system of protection. It is seen now quite easily that giving them the food destroys not only their agriculture but their social systems.
We must not make that an excuse for subsidising our exports, particularly in cereals. The significance of EEC exports is now very large—we have gone from practically nothing to 14 per cent.—and that contributes enormously to the drop in world prices. I must remark that world prices are not real; they are a reflection of very large systems of support in agriculture in North America and Europe, pumping their surpluses on to the market. It is not a genuine cost price. Indeed, many agricultural communities throughout the world are suffering in a 'thirties-like manner from ridiculously artificial world prices.
Thus, in the EEC we really must tackle these problems. For example, we must do something about sugar. It is scandalous that while we in this country take 1½ million tonnes of sugar from the third world, at the same time we pump on to the world market, to ruin a great many other sugar producers, two, three, and sometimes more, millions of tonnes of sugar at a subsidised price. The problem of tackling the surpluses is urgent and I believe the committee is absolutely right when it says it should be done over a long period; it cannot be done quickly, but it must be done definitely and the farmers must know that it will happen. Therefore, we say the cuts must be real. We accept that price increases, given inflation, are cuts, but in the long run the committee feels—and I believe the farmers on the committee concur—that cuts which will really have an effect on controlling the surpluses will be good not only for the budget and the consumer in Europe but, in the long run, for the farming community as well.
5.59 p.m.
Lord Brimelow: My Lords, I was grateful to the noble Lord, Lord Mottistone, for the thoroughness of his introduction, and to the noble Earl, Lord Ferrers, for the fulness and frankness with which he told the House of the Government's views. I also thought that, of the many points which Sub-Committee D covered in its discussions, those which were not mentioned by Lord Mottistone were admirably covered by the noble Lord, Lord Mackie. So I think that I can concentrate on a single point: the importance, which emerges from all the previous speeches, of what happens later this month in the Council of Ministers, and what happens in subsequent years in the Council of Ministers; because, as the report mentioned and as the noble Lord, Lord Mackie of Benshie, emphasised, continuity over a number of years is very important.
Last year, when the Ministers of Agriculture met as the Council, I thought that the British delegation fared rather like the biblical lamb in the thicket. They wished to see moderation of prices, and they pushed and pushed, but they were not able to push their way through. The penalty for failure was not as heavy as it was in the case of the biblical lamb—that was executed. The members of the British delegation survived to press another day. Nonetheless, the price was high, and it took many forms. It took the form of
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excess stocks. It took the form of prices higher than were needed to balance production and consumption. It created tensions in trade relations, not only with the United States but also with regard to some of the developing countries mentioned by the noble Lord, Lord Mackie of Benshie.
Of the various burdens, including a burden on the budget which was greater than foreseen, this country will be expected to bear more than a fair and proportionate share. It is essential that this year and in subsequent years in the Council of Ministers we do better. It will not be easy. In pargraph 10 of the Select Committee's report, it is pointed out that those members of Sub-Committee D who visited Brussels gained the impression that this year, too, we shall stand alone. The noble Earl, Lord Ferrers, tended to confirm that impression on behalf of the Government. But are the omens altogether bad? We may stand alone, but the starting point is not as bad as it was last year. In October 1981 the Commission published guidelines which were designed both to work against the production of surplus stocks and to bring about a rate of growth of agricultural expenditure lower than the growth of the Community's own resources—a point to which the noble Earl, Lord Ferrers, drew attention. I am not certain that in publishing those guidelines the Commission was convinced by its own figures. The Select Committee—and from what the noble Earl, Lord Ferrers, said, it seems the Government—think that the guidelines themselves may be inadequate. But last year, in formulating its proposals, the Commission did not have the courage of even its guidelines, let alone of its convictions. This year it almost had the courage of its guidelines. That is good as far as it goes. But last year the Council of Ministers went beyond the guidelines, and it is very important from the point of view of the interests of this country that that should not be repeated.
Will our contentions in the Council of Ministers fall on deaf ears? They may, but they will be less deaf than they were last year, because some Governments are worried by the cost of stocks; they are worried by the tensions which we are creating in international trade. They would like to see greater control made effective. I therefore think that when the right honourable gentleman the Minister of Agriculture goes to the Council of Ministers he will be batting on a very difficult wicket, though slightly less difficult than it was last year. I am sure that in his delegation there will be some people old enough to remember Carmen Miranda, a Latin American chanteuse, who sang the praises of a polyglot, but monosyllabic, lady, who in 24 languages could say only, "Yes". The Council of Ministers, thank goodness! does not yet speak in 24 languages. But in this year and in subsequent years it will be very important that in its reply to the Commission's proposals it should not go beyond the word "Yes". If it goes rather less far—and obviously the Government hope that it will—all I can say is that I am sure that the majority of noble Lords present this evening will be in favour of restraint and virtue.
6.6 p.m.
Lord Kearton: My Lords, I am not a member of Sub-Committee D, nor have I any interests to declare, other than those of a consumer and taxpayer. I must

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say that the House owes a great debt of gratitude to Sub-Committee D, for the very speedy way in which it has prepared its report, and for its comprehensive nature, and I should like to join in the congratulations to the noble Lord, Lord Mottistone, who introduced it so succinctly. The committee's report fundamentally agrees with the Commission's recommendations, including the norm of an increase of 5·5 per cent. In paragraphs 11 and 12 the committee sets out the very serious problems—those of over-production, the market not growing sufficiently fast in the Community to take the increased production, the disruption of world markets, the irritation of major allies, as well as all the numerous problems which the CAP, as at present operated, has brought about.
But rather surprisingly, the committee is somewhat political in its conclusions, in the sense that though it deplores all those developments, it has relatively little hope that there exists the political will or political possibilities to make much impression. Therefore, in common with many other Members of your Lordships' House, I was most encouraged by the robust attitude of the noble Earl, Lord Ferrers, who really went much farther than did the sub-committee and made it plain that the Government want to see zero increases in most areas.
It is interesting that on dairy products the Commission itself has retreated from a 3·2 per cent. increase to one of 2·4 per cent., and that the Commissioner has made loud cries of woe about what might happen to his CAP if the reduction is not accepted. But as the noble Lord, Lord Brimelow, has pointed out, for years the Council of Ministers has exceeded—in fact, virtually neglected—the Commissioner's recommendations. Last year it virtually doubled them. It is also true that farmers throughout the Community put pressure on Ministers of Agriculture to increase the prices yet again. Most of the farmers' lobbies are in fact asking for increases larger than the Commission itself has proposed. It was extremely far-sighted of the noble Lord, Lord Mackie of Benshie, to take the view that the farmers could perhaps be over-reaching themselves slightly, and that a certain degree of realism on their part would be beneficial to them in the long run.
I agree with the noble Earl, Lord Ferrers, that the common agricultural policy has on the whole been a very good thing. It has been the cement which has held the European Community together. It has greatly benefited both the farmers and the agricultural industry of this country; and therefore, rather than condemn the CAP out of hand, we need to curb its excesses; and it is most encouraging that that is precisely what Her Majesty's Government propose to do.
As an ex-industrialist perhaps I may make one or two more, as it were, sideline remarks. All industrialists find the prominence given to agriculture quite striking. In the United Kingdom, agriculture represents 2½ per cent. of the gross national product. That is the 1982 figure, and it is up from an average of 2·2 per cent. in the few years preceding 1982. It is a smaller proportion of the GDP than it was 10 years ago, when it was 2·8 per cent. It makes about one-third of the contribution to the gross national
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product of petroleum and natural gas; it makes about one-tenth of the contribution of manufacturing industry—although food, drink and tobacco are important components of manufacturing industry. The total turnover of the agricultural industry is not quite twice that of ICI. In fact, it is appreciably less than the turnover of Unilever. The industry employs 633,000, about 2½ per cent. of the country's labour force; but the 633,000 includes regular part-timers and nearly 100,000 seasonal workers.
I think it is a matter of great satisfaction that the country now produces about 62 per cent. of the food it needs and 76 per cent. of the food which we can grow within these shores. That is a very good development. I well remember the desolation of farming in the pre-war years. In those pre-war years, I was working for a firm which made chemical fertilisers and we courted the farmers a great deal to try to persuade them to take the fertilisers. The then chairman of the firm issued a well-known booklet, Britain Can Feed Herself. At the time I think that Britain (which was a smaller country in population than it is now, but had more farming land) produced about 30 per cent. of the food it needed. I think that the development whereby we produce now 60 per cent.—nearly two-thirds—of all the food we need and over three-quarters of the food which is well suited to our climate, is a most welcome development.
I also feel that the fact that the farmers' income went up in 1982 was a good thing. It has spin-off effects on all kinds of other industries. The mention of a 45 per cent. increase is misleading, as the noble Lord, Lord Mackie of Benshie, has pointed out, for one must take the whole thing over a 10-year period. Perhaps one might remark that the hired labour in farming does not do quite so well. Their income in 1982 went up by 7 per cent., approximately, from £1,100 million to £1,176 million. They do have another 7 per cent. this February; but it still leaves their gain from the industry very modest and we do have the position that vital workers in agriculture are getting appreciably less than the average in manufacturing industry—so that particular objective of the common agricultural policy has not been realised in this country. I should be very happy to see moves made in the direction of making it more of a reality.
In considering the farm income, we must also recall that Government support for agriculture in 1982 was £1,333 millions; in other words, practically the whole of farming income was made up in one way or another of Government support grants. Some of these support grants are reimbursed from the Common Market fund but, equally, large sums of money go out of this country to support the working of the CAP in other countries, especially France. The support grant is a good deal greater than the total grant in the way of subventions and aids to capital expenditure which the mining industry gets. That industry is very much in the news today and there is great alarm about the fact that it is not yet self-supporting, that it requires quite a lot of money from the Government to keep going. I would suggest that mining in its own way is as important as farming and that the farmers and others should remember that farming is helped by Government grants in one way or another to a very considerable amount.

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I think that it is quite sensible and proper that farming should get these grants but I do not think that it is very sensible that in every other branch of the economy we persist in saying that it must be absolutely economic, it must have no subventions, it must not be regarded in the light of any world circumstances but must stand on its own feet and be absolutely independent of any Government support. Farming has been very lucky since the war to have had a succession of Ministers who have really served it very well. It is interesting to industrialists that farming does have this powerful voice in Cabinet the whole time. Farming has marvellous scientific services, marvellous research services, all provided from public funds. As an ex-industrialist, I feel somewhat wistfully that the country would be in a better state if we took to our manufacturing industry, which has had so many blows in these last few years, an attitude similar to that which we take to farming.
With regard to the consumer, I agree that it has been of great advantage to the consumer to have stable and regular supplies. I also note from the statistics that the proportion of income spent on food is going down steadily. Ten years ago about 20·7 per cent. of income was spent on food; in 1982, it was down to 18·4 per cent., a considerable drop, a 10 per cent. drop, in 10 years. It is relevant to point out that the rise in the retail price index for food has been lower than the rise in the overall retail price index.
I can only hope that the advice given to the noble Earl, Lord Ferrers, by the noble Lords, Lord Brimelow, Lord Mottistone, Lord Mackie of Benshie and others will be taken and that the Government will be robust in the discussions in Brussels, will endeavour to get some reshaping of the common agricultural policy, will endeavour to get more support for livestock and pigmeat and less for cereals, will endeavour to do something about the butter mountain and will try to get some reciprocal bargain for this country in other matters—perhaps in the energy industry—if they do not succeed completely in getting all they want in farming.
6.18 p.m.
Baroness Elliot of Harwood: My Lords, I have listened with tremendous interest to the speech of the noble Lord, Lord Kearton. In this debate, he is the first member of your Lordships' House who has spoken as a non-member of Sub-Committee D. I am a member of that sub-committee and have been ever since it started. It is very encouraging to hear Lord Kearton say that he supports the common agricultural policy—with, not unnaturally, some reservations, which, indeed, we all have—and that, as an industrialist, he is prepared to say that agriculture is an industry which should be and has been supported by the Government. It is true to say that we get tremendous support from the Government and that also, as a nation and individually, we get a tremendous amount of help from the EEC. Those people who run down the CAP and the EEC often do not realise how much help we get from the EEC not only for agriculture but for developments in rural areas and in less favoured areas and for the social policy and other developments which we hope for and are prepared to carry through.
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Agriculture is an industry where the costs are rising. I do not think that people who are not engaged in the industry realise how expensive are a great many of the important items of machinery and other things that we use in our farming enterprises, though of course the noble Earl, Lord Ferrers, does. Our costs rise just as much as those in any other industry. Therefore, one has to keep that in mind when one thinks that more money is going into agriculture than should be. Unless help of this kind is available, we cannot continue to have what we have today, which is a highly modernised, extremely efficient, industry. That is very important indeed. I am not against subsidising important industrial activities. Last week we were talking about railways. The important aspect about the subsidies that have gone into agriculture is that today they have made the most efficient agriculture in Europe—I do not know about the rest of the world. That shows that it is worthwhile and it is something that we should certainly not be afraid to continue.
I was tremendously impressed by the speech of my noble friend Lord Mottistone in introducing the subject and also that of my noble friend Lord Ferrers. Those Members of the House of Lords who have read our report will feel that we have published proposals after a great deal of thought and a great deal of interviewing and learning from many people who take part in agriculture. In paragraph 3 of our report will be seen the list of people whom we interviewed and who sent us papers on different subjects. It is an impressive list.
We are in a slightly different position from that of other EEC committees of your Lordships' House in that we are largely farmers or interested in farming and know about farming. But we must also take some interest in the consumer and the point of view of the consumer. Occasionally that interest clashes; but if the report is studied it will be seen that we have been fair to both sides. When we have put forward proposals of one kind and another we have also considered the effect of rising prices or different prices.
Many Members of the House in this debate have mentioned certain matters and I shall speak very shortly on them because much has been said already. I support what has been said. We supported the principle of guidelines in order to try and hold down the prices. In paragraphs 8 and 9 we say straightforwardly that the Commission in 1982 ignored the price guidelines. As a result, our production of certain products continued to rise and prices went up. This of course affected more particularly the crucial products such as cereals, milk, sugar and wine. Wine does not affect us so much but I am referring to wine in the European context.
I agree with so much of what the noble Lord, Lord Brimelow, said: our United Kingdom delegation have always urged a reduction or a limit of the amount of production and encouraged small price increases rather than a permanent increase in prices—certainly regarding cereals. This, as we have said in our report perfectly honestly, has been ignored and the enormous surplus of grain continues. This will have to be dealt with. As the noble Lord, Lord Mackie of Benshie, said, there must be some reform in the CAP on the subject of cereals.

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The other great problem is milk. There is an enormous increase in milk production. That is something which is very difficult to deal with. I was delighted to hear that the milk in schools scheme, which was one of the schemes which we started many years ago, is now being carried on by the CAP and is likely to continue for at least another four or five years. That is a very good way of absorbing some of the surplus in milk.
Whenever I went to Brussels or met any members of the Commission I was always asked the same question: "We are all great experts at production but who is thinking about the consumer and the selling of the goods that we produce?" I have always been disappointed because I have found people shrugging their shoulders and saying, "That is somebody else's job". But it is not somebody else's job. The most urgent need at the moment is how to sell the production of certainly European agriculture and of course our own as well. That is why I am extremely keen that the Food from Britain campaign which has just been launched, and which I support wholeheartedly, shall be a great success.
The launching of the scheme—which my noble friend Lord Ferrers, many other noble Lords and I attended—was a very impressive affair. There were nearly 5,000 people there and it was a tremendous plan for the selling of our produce. I hope very much that the Food from Britain campaign will be a great success. To be a success it must be first-class. That is what we are trying to say. It is not just a sentimental appeal about trying to restore the slogans, "Buy British" and, "British is Best" without being absolutely certain that it is best. I was extremely impressed by those people who made the speeches at the opening ceremony about producing food which people on the Continent as well as here will want to buy. If we could get that across it would be a tremendous help in regard to this question of overproduction in the CAP.
What we produce must be very good. It must be well organised. It must be sold as the best and not just because we want to sell something British. I think your Lordships know that I have been associated from the very beginning with the consumer movement, the Consumer Council and Consumers' Association. I received—as possibly other Members of the House may have done—a memorandum from this movement concerning this debate. I have been asked whether I would put forward some of their points of view, a good many of which I agree with. They say that in a situation of surplus there should be a price freeze. I believe that would be very good and I think that we are agreed that that should be so. They say that where cereals and other products have risen greatly in price there should be some price restraint, so that this will possibly discourage people from producing more and more cereals when they are not wanted.
Then the question of an increase in the prices of agriculture is raised. There is reference to this in this country and elsewhere and the movement believes that the increase should be monitored so that there could be some check on the cost rises, and that we should be guided by markets as to how much can be
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sold rather than just produce an enormous amount and encourage its going into intervention.
In our report and in the memorandum from the consumer movement it is said that unsaleable goods should be avoided if possible. We have been quite honest in that. We have definitely said that we cannot go on for ever producing more than can be sold. From the point of view of the committee, which is largely made up of farmers, this is a perfectly honest way of dealing with this aspect. So far the proposals suggested to limit unnecessary production have been adopted and some of them have been agreed. In paragraph 32 of our report we put the point that this is a fact, and with this I agree.
This problem of surplus goods has so far not been tackled successfully. The noble Lord, Lord Mackie, spoke about hopes, and others have done so. If we can get across the great selling programme which the Government are now embarked upon and at the same time get the Commission to be firm about the guidelines and the limitation that they are agreed upon, then the CAP would go ahead and would be understood better by the ordinary population—certainly it would have a better press than it has at the present time. I support it very strongly, and I support the Government very strongly in what they are trying to do.
6.30 p.m.
Lord Roberthall: My Lords, the noble Lord, Lord Mottistone, in his admirable opening speech, began by saying that this was a very important debate, and I should like to begin by stressing that we are debating something that is much more important than the position of agriculture and things such as prices. The position of the CAP has very wide repercussions indeed, and those repercussions will continue to be felt, so it is important for your Lordships to be able to discuss them. I am not a member of Sub-Committee D and therefore I do not think it is out of place for me to say what admirable reports they produce on this subject. This year's report is perhaps a little more technical than usual and it assumes a general knowledge of the background; but both in its analysis and its recommendations I think it strikes an admirable balance. We are very indebted to the sub-committee for the hard work they do, and especially under "timetable pressure", as they were this year.
I last spoke on this subject about two years ago in a debate which was introduced, as today, by the noble Lord, Lord Mottistone. I think there must be a certain amount of melancholy in his mind, as there is in mine, that the report deals with problems of surpluses, as almost all the previous speakers have said. I remember that we dealt with surpluses in the previous debate, and the present report points out that, so far from reporting any progress in the two years which have elapsed, we have gone back again. I remember at that time there was a suggestion that the surplus problem was mainly a social one which was concerned with the small, marginal farmers, and therefore that it should be treated as a social problem rather than as an agricultural problem. It was also suggested that the countries which suffer most from this problem and who feel that it is politically impossible to touch the small farmers should themselves be responsible for

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keeping them going and not doing it through general price increases.
Nothing came of that suggestion and it has not even been mentioned this time; but we do have an analysis of the movement of thought in the Commission. It is very clear that although the Commission have had great difficulty in facing the problem, in the last two years they have begun to move in the right direction and that the reason why the underlying problem of surpluses is getting worse—there is no improvement—is, as many speakers have pointed out, that when it comes to the Council of Ministers they take the somewhat weak recommendations of the Commission and water them down even more.
Like other speakers, I welcome what the noble Earl said in his remarks about the attitude of the Government. I hope they will indeed take a strong line. I also hope that the noble Lord, Lord Brimelow, was right in being a bit less pessimistic than the committee as a whole about the prospects for this year. I think myself it would be very optimistic to hope that the Council of Ministers are going to do any better than they have done in the past. The surpluses arise, of course, because the prices are fixed to a large extent with the small, marginal farmers in mind. They are therefore attractive to the big and efficient farmers who, with the benefit of the guaranteed price, are encouraged to put all their energy into being more efficient and increasing output. Nothing is going to stop that but the price.
There was one thing in the noble Earl's speech which caused me to feel a little critical, which was when he pointed with pride to the achievements of agriculture but did not point out that British industry as a whole would not have any difficulty at all if it had a guaranteed price for the whole of its output, as the noble Lord, Lord Kearton, said. I think the noble Lord was the only speaker who did not refer to surpluses, but I believe that if he analysed the costs that flow to British farmers he would find that they arise to a large extent from the costs created by the surpluses. We produce milk, cereals, grain and sugar—all things that are in surplus—and it is the cost of dealing with the surpluses which is creating these fundamental difficulties for the Commission, as is set out so well in paragraph 12 of the report. I will not attempt to amplify what it says.
Perhaps by fortunate chance there was a leading article in The Times last Saturday, as some of your Lordships may have seen. It was called something like "Starting with milk" and it analysed the surpluses problem, particularly in relation to milk and dairy products. It pointed out that there were 300,000 tonnes of butter stored within the EEC and at least as much in the United States, and it said that world stocks of skimmed milk powder had been estimated at no less than 1,400,000 tonnes. It is these great surpluses that lead to wholesale dumping, and it is that dumping in the form of food aid which causes the distortions which were so well analysed by the noble Lord, Lord Mackie of Benshie.The Times leader concluded:
"It is time to start bringing the CAP down from its lofty plane of unreality".
There was also a leading article in the Financial Times this morning, which ended up as follows:
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"For too long the beneficiaries of the CAP have lived in a fool's paradise".
Both writers, I think, would agree with the committee, and to some extent with the Commission, in saying that what we want now is a plan to be followed consistently over a series of years—a plan which moves in the right direction; that is, one that is beginning to have some effect on the surpluses themselves.
I am not in any way concerned with agriculture, but two years ago I pointed out—and I must point it out even more strongly tonight—that the inability of the CAP, the Commission and the Council to deal with the surpluses is putting supporters of our membership of the EEC in very great difficulties. It is impossible to defend a system which is generating these large surpluses, which are taking up so much of the funds of the Community and generally distorting its policy. It is a real threat to the future of the Community that this goes on.
The ordinary voter does not think of macro-economic problems and does not take much notice of them, but he cannot avoid knowing about the CAP. The disputes between the British Government, the Commission and the other members about our contribution have been tremendously widely publicised, and the housewife, who probably never thinks about most of these problems, cannot avoid hearing about the large surpluses of butter and the sale of these products on preferential terms to Russia. No doubt, if this goes on she will hear more about them.
It is very difficult for supporters of our membership of the Community—and I know that a large number of Members of your Lordships' House belong to that category—to go on defending something where so much of the money is diverted from other desirable uses to producing these surpluses, and, so far, the people in charge seem to take the shortsighted view that we shall run into immense difficulties and be unable to do anything about them. It is very serious for us all, in this connection, that more progress cannot be made.
6.42 p.m.
Baroness Seear: My Lords, I was not a member of Sub-Committee D and I approach this subject from the point of view of the consumers, who were not represented on this committee. I think it is a pity that the committee was so heavily dominated by people with agricultural interests, not because that has biased their judgment but because in the discussions taking place on matters of this sort it seems to me desirable that other interests should also be heard, not after the report has been prepared but at the time when the thinking is being done on the report.
The Principal Deputy Chairman of Committees (Baroness Llewelyn-Davies of Hastoe): My Lords, will the noble Baroness let me interrupt for a moment? There were representatives of consumers on the committee.
Baroness Seear: My Lords, I stand corrected. But they do not seem to have appeared in the debate this afternoon. Perhaps they are coming on later, or perhaps they were frightened off by the preponderance of the agriculturalists.
Earl Ferrers: My Lords, I wonder whether I can be of help here. I wonder whether the noble Baroness, Lady Llewelyn-Davies, may have meant that all those who take part this afternoon also happen to be consumers.
Baroness Seear: My Lords, this is like being told that the workers of Rolls-Royce will hold back their claims for more pay because they are so interested in purchasing the product.
Baroness Llewelyn-Davies of Hastoe: My Lords, it is quite trivial, really. There were people who were consumers, and not farmers or anything like farmers, and are still on the committee. A particular noble Lord of whom I am thinking is, unfortunately, unable to be present today. Also, I almost always attend the committees.
Baroness Seear: My Lords, I still stick to the point that they do not seem to have appeared in the speakers' list of the debate this afternoon. Perhaps I may get started as the lone voice of the consumer. I fully accept that the CAP has, in the past, done a good job. I am not decrying the work that has been done up till now. We covered these points only a week or two ago. The CAP has, of course, fed the EEC. It has made for a restructuring of agriculture, which was very much needed and which has been highly successful. But that does not mean that it has to go on as it is at the present time. It does not mean that consumers' interests are not now of greater importance than prolonging the emphasis on agricultural requirements, which has been categorised by the work of the CAP in the past.
The noble Earl, Lord Ferrers, pointed out to me a week or two ago, and reminded us again today, that food prices have gone up less fast than have prices of other commodities and, therefore, that the consumers' interest has, as a result, been well cared for by the work that has gone on. I would only say to that that, of course, one has to remember that the consumer is paying twice over. He is paying for the food that he buys in the shops. He is also paying for the subsidisations through the CAP, to which he contributes very considerably indeed, as a taxpayer. It is not really quite correct to take the line that the only cost to the consumer is for the food that he purchases over the counter.
The point has also been made this afternoon that the percentage of individuals' budgets spent on food has fallen, and that is true. But it should have done. The EEC was intended to make us all more prosperous. I am an extremely strong supporter of the CAP, though, at times, a somewhat baffled one, and particularly baffled when I look at the way in which the CAP is operating. But if a community, if a country or if an individual gets more prosperous, it follows always that the percentage spent on food falls. If this had not happened, it would have been an appalling condemnation of the working of the EEC that it had not had the normal outcome of any increase in prosperity, which is that expenditure on items other than food goes up and expenditure on food goes down. So I cannot say that I am enormously convinced by those two arguments, which are intended to show us that the consumer is really doing quite well under this system.
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What I am urging is that, with all the good work that has been done, the time has now come when we should take a much more fundamental look at what the CAP is doing, and at the way in which agriculture should be supported. In these discussions, consumers' interests should be far more central than they have been in the past and the voice of the consumer should be heard when the discussions are going on. Whether or not it is true that they were adequately heard in Sub-Committee D, I do not think anybody would deny that they are not adequately heard when it comes to the agricultural council in Europe, and that is the place where it really matters.
Of course, I realise that we are not going to make very swift progress, but, if we were to decide that there really has to be a shift of emphasis towards consideration of the consumer and away from the dominance of agricultural interests, then we could at least begin to make some progress and get our sights on what we are really trying to do. Surely, this is a good moment to start.
As regards the recent increase in farm incomes, I absolutely accept that this has been a recovery from a low over a number of years, and that the 45 per cent. has been grossly exaggerated and misinterpreted in the popular press. None the less, a year after a period when there has been an increase in prosperity is, surely, a good time to start redressing the balance, and my plea is that we should make a very strong effort to redress this balance. Then there is the futher point that interest rates have fallen, and this must be a very considerable advantage to the farming community everywhere, as to other producers in other industries.
So it is a good time to start making a shift, remembering that there are a very great many people who are far worse off than the agricultural community and who are grievously affected by the present level of prices. It is true that the industrial worker in employment has done better than the agricultural worker, but people not in employment and people on the lowest levels of industrial employment have to pay food prices, and they are very badly affected when food prices go up. Also, if we want to control pay increases, if and when there is an industrial recovery, then surely it is of the greatest importance to keep food prices down as much as we possibly can in order to reduce the cost of living of those people who will be bargaining for pay increases.
Now is the time, surely, to see whether we can get rid of some of the more obvious absurdities of the outcome of the CAP. As every noble Lord who has spoken has admitted, the surpluses are plainly absurd. If we had not become accustomed to the CAP over 20 years, anybody coming in from outside and looking at the way in which it is operating would think they had come to Cloud Cuckooland. The more surpluses there are, the more people are paying in order to produce more food which people do not want to eat. It is said that the important thing to do is to improve marketing, but the simplest way to improved marketing is to get prices down. If we want to sell more it is no good putting the price up; the price should be brought down. Yet prices are going up and up.
Surely the time has come for the Government to admit—at a reasonable pace, because such things cannot be done overnight now that we have become

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accustomed to this system—that it is an absurd system in the way that it is working out, and to make a determined attempt to put much of it into reverse, starting with the surpluses. I was delighted to hear the noble Earl, Lord Ferrers, say that the Government supported no price increases on dairy products and a small price increase on cereals. I wish that the noble Earl could go further and go for no price increases right across the board, although no doubt that is asking too much. But can we not say that this is the direction in which we should be going? Food, after all, is produced in order that people shall eat it, and not in order to create surpluses and then to have to sell the food at ridiculously low prices.
6.52 p.m.
Lord Oram: My Lords, as I read the committee's report I came across a sentence in paragraph 14 which I found most welcome. Referring to the Commission's price proposals the report states that,
"it is right that they should be simple and discussion of them kept simple".
That sentiment warmed my heart and encouraged me to speak in this debate, I assure your Lordships, simply and briefly. I thought that I might start with a few simple statistics. I ascertained that in the 10 member countries of the EEC there are 8¾ million farmers and farm workers, and that includes those in forestry and fishing. I also noted that in the 10 member countries there are 270 million consumers. Since the noble Baroness, Lady Seear, felt that she was a lonely consumer in this matter, I can assure her that I counted her in the 270 million and I counted myself as well.
We have a contrast there in terms of the producer interest and the consumer interest. We are thinking of the consumer interests of 30 people as to one person with a direct producer interest in agricultural policy. That made me think I should make sure that at least one consumer voice was heard in this debate. I am gratified that indeed quite a number of consumer voices have been heard. The noble Lord, Lord Mottistone, in his introductory speech; the noble Baroness, Lady Elliot of Harwood; the noble Lord, Lord Kearton; and the noble Baroness, Lady Seear, all placed some emphasis on the consumer case in these considerations.
Lord Mackie of Benshie: My Lords, in counting up to that figure of 270 million, did the noble Lord, Lord Oram, count in the families of the 8¾ million as well?
Lord Oram: Yes, my Lords, as a simple way of arriving at a figure I took the population, because all people are consumers—so even babies and people who are about to die are included in my figure.
Lord Mackie of Benshie: Well, my Lords, farmers and agricultural workers have babies as well. Did the noble Lord count them?
Lord Oram: Yes, my Lords, I can assure the noble Lord, Lord Mackie of Benshie, that they were counted too—and they have a consumer interest as well as a producer interest.
The noble Baroness, Lady Seear, was quite right when she urged—and I fully support her in this—that
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the consumer interest should have more regard paid to it than is the case at present when decisions about food prices are being reached—whether it is by the Commission, by the Council of Ministers, or by our own British Minister of Agriculture. It is too often forgotten, although the noble Lord, Lord Mackie of Benshie, reminded us of this in his speech, that the objectives of the common agricultural policy as laid down in the Treaty of Rome include reasonable prices for consumers as well as a fair return for farmers, security of supply, and other objectives. Reasonable prices for consumers are laid down as one of the purposes to be served by the common agricultural policy.
Therefore, I welcome this report's plea for simplicity in such matters because, as I have tried to follow the workings of the CAP over the years, I found its mechanism and its jargon—its technical terms—getting more and more complicated at the same time as its results in practice became more and more defective. The chief defect has been referred to by a number of speakers in today's debate; it is that, while the EEC has now achieved self-sufficiency in practically every major food commodity, it nevertheless continues to encourage still further production by means of its protective mechanism and its support for farmers' incomes through guaranteed prices, irrespective of the needs of consumers.
I am glad that the consequences of that major defect are spelt out in the report, in paragraph 12. They are spelt out there with devastating simplicity. I will summarise those consequences; increased cost, budgetry rigidity, trouble with America and others, harm to third world countries, and misuse of resources. That is a summary of paragraph 12. But what an indictment that is of the EEC with its surplus-producing mechanism. Moreover, each one of the points in that indictment is of direct and special importance to Britain—with our depressed economy the cost hits us particularly badly; our unfair contribution to the EEC budget; our special relationship (which we treasure) with America put in jeopardy, possibly, by trading rivalries; our widespread responsibilities in the third world. All those points, to which the committee made such forceful reference, affect us in Britain more, probably, than any other member country.
In short, in my view the common agricultural policy is becoming more and more questionable for the EEC as a whole—but it is becoming especially so for our own country. There are signs that both the Commission, in this year's price proposals, and the EEC Committee of the your Lordships' House, as it reviews the Commission's proposals, are beginning to face up to the basic problem. That problem is that year by year farmers are being paid too much, and it is the housewife who is paying. This year the Commission proposes increases which are smaller than it recommended last year, and our committee, quite rightly, in paragraph 9, warns of the danger that once again the Council of Ministers, when it reaches its decisions, will override the Commission and raise prices too high. I think the committee did well to give us that warning.
Those proposals of the Commission, being more moderate than last year's, and those warnings which

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the committee gives to us are all to the good, so far as they go. But in my view they fall short of what is really needed and what is urgently needed in this matter. It is unfortunate, I think, that neither the Commission nor your Lordships' committee has plucked up enough courage to advocate what is really needed, and that is a price freeze for all those products that are in surplus, not just in the case of dairy products. I was glad—I thought I heard the noble Earl aright—that he was describing something in that direction as being the Government's attitude. But it is not at this moment the committee's attitude. They recognise that things are wrong and are going rapidly worse. If you like, they recognise that the European Gadarene swine are rushing to their doom, but instead of telling them to stop they are merely telling them to run to their doom more slowly.
I was fascinated by the reason which the committee gave in its report for putting forward a rather lukewarm recommendation about prices. In paragraph 17 it says:
"The Committee do not consider it politically realistic, or necessarily wise, to look for no price increases at all."
I think the noble Lord, Lord Mottistone, quoted that same sentence. What does that mean, supposing we put it in the simple language that the committee urges us to use? When it says it is not politically realistic, what it means is simply that the farmers will not put up with it, and, moreover, that the farmers are a very powerful political lobby. And we in this House know that very well; indeed farmers are strongly represented on our Front Benches, I notice. The noble Lord, Lord Roberthall, quoted from The Time's leading article on Saturday of last week, and that leading article described, I thought rather effectively, the power of the farmers' lobby. Referring to the Council of Agricultural Ministers, the leading article said this:
"None of [them]"—
that is, none of the Ministers—
"including Mr. Peter Walker, has ever shown the inclination to do anything that might be seen as inimical to the interests of the powerful EEC farming lobby. Shrewd politicians as they are,"—
we know at least of one among them who is a shrewd politician—
"they are all too well aware of the bellows of rage that would arise across Europe from Bavaria to Tyrone at the very prospect of what, in real terms, would amount to a reduction in farming incomes."
That, I think, is a description of the political reality in the EEC. That being so, I believe the time will come, and perhaps soon, when the consumers, the housewives of Europe, must show themselves unafraid of those bellows of rage that The Times said would come. They must, in my view, demand a more equitable arrangement of prices as between producers and consumers. In other words, the time is coming for the consumers of Europe to stand up and be counted, not only statistically, as I did in my amateurish way, because, though, statistically, the consumers are of course overwhelming, they should seek to be counted in terms of bargaining power as well.
This report that we are considering has this year put what I would call a tentative toe into the water of consumer price protection. It has started a criticism of the price arrangements from the consumers' point of view. I hope it is not too much to think that next year
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they will perhaps have the courage to go further than they have gone this year and to take the plunge into the consumers' interest and speak up more fully for the consumer.
Lord Mackie of Benshie: My Lords, I hesitate to prolong the noble Lord's speech, but before he sits down would he not perhaps admit, as several noble Lords have said, that there is a real decrease in farmers' incomes, and that the consumer is suffering more the depredations of the manufacturer and retailer than from the farmers he is attacking so effectively?
Lord Oram: My Lords, the question of farmers' incomes is an involved one, as the noble Lord knows only too well. In thinking of it, one needs to think of the support that the farming industry gets. As the noble Lord, Lord Kearton, was pointing out, other industries could be profitable if they were as well treated as the farming industry is by the EEC. But I think it is well recognised that the farmers have not done too badly just recently, and it is also the case—and this was the burden of my central point—that the farming industry of Europe is producing surpluses, and we are paying them to carry on on that erroneous road.
7.8 p.m.
Lord Harmar-Nicholls: My Lords, this is the first time I have taken part in a debate in connection with the EEC since I became a member of the European Parliament three and a half years ago, but I have always tried to follow the results of the deliberations which the various Select Committees have carried out. I have to tell your Lordships that one of the reasons why I wanted to make a contribution to the debate today was to say just this: that I hope the Select Committees will carry on doing their work, because I can assure them that there is no report which comes to the European Parliament which is held in higher esteem than the one which comes from your Lordships' deliberations in the Select Committees. That is not a matter of patting ourselves on the back; that literally is a fact. The number of times that the results of the Select Committees' reports are quoted in support of arguments or to further a particular point of view is legion. Whatever the nationality, on this matter your Lordships' Committees really stand supreme so far as the reports are concerned. I wanted that on the record in order to encourage the Select Committees to carry on in the same line in future as they have done in the past.
This debate is a very timely one. The subject of this report will dominate the European Parliament debates which are taking place throughout this week. I suppose I should have been there today but I shall see how they are getting on tomorrow, reinforced with the points of view that I have had the opportunity of hearing this afternoon.
I believe that the reports are accepted because they are concise, authoritative and, more important, they are objective. I cannot say that the noble Lord, Lord Mackie, has always been completely objective. He has a point of view about the poor farmer which it is right should be on the record, but it sometimes lacks that

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little bit of objectivity which the reports, by and large, do convey. Having said that, I share the disquiet and the feeling that much more must be done if we are to find the right formula for operating the common agricultural policy. That is clear.
The report we are now debating is the seventh report. My point of view is expressed completely in the appraisal set out in the fourth report printed on 8th December. Because I think it is so concise and so absolutely accurate in its description of the situation, I wish to quote from it. It is the appraisal given by the committee in paragraph 13, on 8th December 1982:
"In the Committee's opinion … Instead of leading to a narrowing of the gap between Community prices and those of competitors it will, at best, leave the gap unchanged. It exacerbates relations with the USA and other exporting countries. It imposes little effective restraint on excess production and does nothing to reduce the cost of disposing of the surpluses. It will lead to further increases in consumer prices and add to the cost of the Common Agricultural Policy. Far from reducing the budget inequity … it makes it worse. Finally, instead of reducing the proportion of Community spending that goes on agriculture, it will increase it from a figure of some 65 per cent. in 1981 to an estimated one of just under 70 per cent. in 1983".
That is a report from the committee, having done its work objectively and with the sort of detail to which we have become accustomed. I believe that it is in the light of that message that we ought always to be considering any of these questions to do with the common agricultural policy and how we hope to improve it.
I had a little exchange with my noble friend at the beginning of his very excellent introduction. How excellent it is to have a Minister who is prepared to give the official point of view at the beginning of a debate so that everyone can take the official view into account, rather than putting our own often not so well documented points of view and having the Minister reply afterwards.
On that particular issue, as I see it, the price increase proposed, while it can be presented in a way which makes it appear relatively modest, is not quite what it seems. My noble friend quoted 5·5 per cent. as the norm, but that is 5·5 per cent. in the Community currency of ECU's. If one translates that into national currencies and multiplies by the proposed Green Paper devaluations it becomes 7 per cent. I believe that we ought to know that. It is no good thinking that the figure is 5·5 per cent. The advantage of my noble friend speaking first and replying at the end of the debate is that if my figures and calculations are not right he will have the opportunity of putting the record straight. However, as I understand it, the position is as I have explained it. The figure is 7 per cent., not 5·5 per cent.
The position for the future must take into account this alteration from ECUs to the national currencies and the effect of devaluation, such as is mentioned in the Green Paper. So far as the farming increased prices for the United Kingdom last year are concerned, we did not have 7 per cent. Our increase amounted to only 4·1 per cent. Again, that is the sort of thing that we have to take into account, How do we as a member of the Community fare as compared with our partners? I have found in the United Kingdom more concern flowing from the co-responsibility measures that have been proposed for cereals and milk than from the low price increase.
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As regards the large stocks that we read so much about and which were very properly mentioned, since my reaction has been slightly critical of the Community in this field I think we ought to have on the record just this. Taking everything into account the stocks are perhaps not so much out of level as it would at first appear. The February stocks amount to 13 days' consumption of beef. It will take 13 days to remove the stocks that we have. There is a 30-day stock of butter, a 70-day stock of wheat and a 23-day stock of barley. If one compares those with the 90-day stock of oil that we think it is right to keep and the four-month stock of coal that we think it is right to keep, it will be seen that the stocks, presented separately, can seem to be excessive and out of gear; but if one looks at the need for strategic and other reasons over the whole field of consumption they are not so much out of gear as all that.
The one problem which I believe must be borne in mind, even in doing the right thing, such as keeping prices in bounds, is the effect on other countries when they, for political and economic reasons of their own, are forced to give extra aid. If we get the price that we are given under the CAP, below a level which our partners in the Community find can be operated, and they have to give separate aid, that is one way of disrupting the whole machine of the CAP and it may later bring about a disintegration of the whole EEC which we would all find very unpleasant and unnecessary. Therefore, while we are making our criticisms of surpluses and the unnecessary stocks, and while we are making our criticisms looking at it from the consumers' point of view and the price we have to pay in order to keep an efficient farming community, those are the problems that must also be weighed. That is what makes it so difficult for the Council of Ministers or for anyone else. At the end of the day we must not just criticise but must find an answer which will work and which will get rid of these particular problems.
The second reason, apart from congratulating the Members of the Select Committee, why I wanted to make a contribution today is this. I do not think what I say now will be approved by the farming lobby, but while it is right that we should attempt to solve the problems by a freeze such as was mentioned by the noble Lord, Lord Oram, and indeed by many others, I do not think that such a freeze of prices is the final answer. In the medium and the long term we must think in terms of introducing quotas.
Over the past 20 years we have found out the sort of contribution that can be made from the various members of the Community and we can now work out what the excesses are. I do not believe that by the price mechanism alone we can rectify them. In business, if one is getting any price at all for unnecessary surpluses, one can always find ways and means to go on producing them. I believe that we ought to be beginning to try to give a lead for the introduction of quotas, where the various nations that make up the Community will be told the level of their actual contribution in amounts.
My noble friend Lord Ferrers and I served at the same time as junior Ministers at the Ministry of Agriculture back in 1955. He will remember, as those who understand farming problems will know, that we overcame the very real problem of sugar and sugar beet by the application of quotas. We had Common-

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wealth sugar agreements which had to be honoured in order to give the market to the third world countries whose main commodity sugar was. My constituency, which was Peterborough, was the ideal part of the country for the growing of sugar beet. We were in a position to provide a great deal of our sugar needs from our sugar beet and our sugar factories, but we had to keep the amount down in order to honour our Commonwealth agreements without overloading the whole market. We did that by giving a quota as to what sugar beet could be produced.
Although some of our farmer constituents were very eager to increase their acreage in that commodity, they well understood the commonsense need to work to a quota in order to keep down the levels. I believe that in the long term that is the only effective answer, although we cannot jump into that tomorrow; it may well be that we shall have first of all to go via the price freeze before we get to the point where we can have quotas such as I have suggested.
The other points that I think ought to be on the record when we are being critical of the overall situation is that it is a fact that food prices have increased at only approximately half the general inflation rate in this country; production has gone up in the United Kingdom from 60 per cent. to 75 per cent. of self-sufficiency; on the common agricultural finance, the right honourable gentlemen the Minister for Agriculture has in two years doubled the amount that comes from Brussels to this country. If one adds all the pluses and minuses together, although there is a great deal to be concerned about and many problems to be overcome, it is not all black.
I do not think that we need do anything other than approach the problem in a calm, sensible and objective way, as the Select Committees of this House always have done. If in the future they can find time to start an examination of the problems and difficulties of switching from price freezes to quotas, they will be anticipating the future in a way which will overcome many of the problems that we have to tolerate today.
7.24 p.m.
Lord John-Mackie: My Lords, first and foremost could I apologise for raising the height of the Dispatch Box, but the top of it is just outside the range of the focus of my spectacles and I miss things occasionally. I am very envious of the noble Earl, Lord Ferrers, who can read his notes from his tremendous height, although I see for the first time today that he is sporting a pair of spectacles. No doubt we shall get together and get the Box raised by a mechanical device from below to help us. The other thing that I must do, like everyone else, is to declare an interest. I am a farmer; I scrape a living from London clay a few miles up the road from this House.
It was only natural, my Lords, that the whole question of farmers' incomes, which were given such great prominence by the issue of the White Paper, should creep into the debate in no uncertain way. I am speaking now on behalf of my noble colleague in the Committee, Lord Brookeborough, who apologises for not being here today, although that apology will not satisfy the noble Baroness, Lady Seear, or my noble
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friend Lord Oram, because of course my colleague is a farmer. Nevertheless, he is sorry not to be here today. He is very worried, as one would be, with The Times headline:
"Ulster lowland incomes up 450% in record year for farmers".
I should have thought that The Times would be a bit more responsible. Of course one gets a better picture if one reads on. But how many people read on? That is the whole point. Far too many people look at the headlines in today's press and do not make any comparisons at all.
Let me just take those people who have criticised farmers' incomes, particularly my noble friend Lord Oram, who, I think, if I took him down correctly, made the remark that farmers were paid too much. Let me refer those people to the White Paper. I do not know whether my noble friend has read it. On the page where farmers' incomes are given, down the percentage change side the figures look very high indeed. I have worked out four of the biggest ones there and I should like noble Lords just to take note. In Scotland the hill and upland livestock cattle and sheep farmers had a 218 per cent. increase. Their average for the two years, 1981 and 1982, was £139 a week. That is not a very high wage for working, as I know these farmers do, very long hours indeed. I have a son in the road contracting trade and he pays men who work long hours on a dirty job between £200 and £300 a week. If one goes down to the arable farmers in Scotland, one finds they are earning only a pound less a week, £138. But if one goes to the Northern Ireland farmers, who are quoted in The Times headline, one finds that their average income in the two years is £44 a week. If one goes down still further to cropping and cattle and sheep farms, the wages are a little higher—the highest of the lot—£170 a week.
I ask my noble friend Lord Oram whether he thinks that those are excessive incomes for people with capital employed and everything else. I do not think that the statement he made that farmers are being paid too much can possibly be defended. As I say, my noble colleague on the committee. Lord Brookeborough, was quite worried about the headline and I promised that I would mention it in the debate.
The other thing that I should like to say is that I very much agree with Lord Mottistone. I must compliment him on the way that he introduced the debate and the short time that he took. I shall try to be as short as he was in introducing the debate, in placing emphasis on the timetable. As he knows, and as longstanding members of the committee know, we have been appealing to the Commission to let us have the figure earlier and to let us have the thing settled before the farming year starts—although, quite frankly, the farming year starting now really starts in October and November, when all the winter corn is sown and one cannot change one's mind if the prices do not suit. Things have improved immensely and we are looking forward this year to seeing the figures before the start of the farming year. As I say, we have been pressing for it for a long time and I hope that we shall get it.
The Minister, Lord Ferrers, said that the Government and his Minister would be robust about the situation. I should like to ask him whether that means the use of the veto again. I hope not. We do not want to see that used to delay matters, although of course we

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agree with him that the Minister must be robust in pressing the Government's point of view. But I hope that that will not cause a delay.
The other point I naturally want to make concerns the question of the CAP itself. I cannot think that anybody who can remember what farming was like between the wars does not realise how much this country and the whole of Europe has benefited by a common agricultural policy. Of course, we know only too well that it has its faults and we are doing our best to put forward those faults in a reasonable way. One thing that the CAP has done for agriculture—and I emphasised this in my maiden speech in this House nearly two years ago—is the achievement of the continuity of prices and production. We cannot switch about farming production in the same way as one switches production in some factories. The stability which we have had has made a tremendous difference to agriculture.
Most noble Lords have given particulars and figures. Mention has been made of the average of 5·5 per cent. and the split in an effort to try to depress the production of milk but perhaps help olive oil and wine. We are all agreed on, and have been pressing for, guidelines for the future, along with production thresholds. But they are only a guide to making price penalties. Frankly, there are only about three options open to the Commission as regards prices—no increases, small increases or very large increases indeed. The noble Earl, Lord Ferrers, mentioned that the Government would like to see the emphasis of prices going away from cereal production and milk and going more to other livestock. That is not easy to do. It would need a tremendous slash in the prices of cereals before one could force a cereal farmer into livestock.
In paragraph 32 we try to make the point that farmers must be made to realise the situation. I do not think that many farmers realise the situation, and it should be put to them very simply. During the discussion on the drafting of the report, I objected to the words:
"clouded by obfuscatory discussion".
I am sure that very few farmers know what that means, but it is essential that farmers are made to notice exactly what is happening about the surpluses, et cetera. As I asked a few minutes ago, how much would it take to make people change, and to what? We have surpluses in practically every commodity except perhaps beef. It would be very difficult for farmers to change. Therefore, as someone said in the debate—I think it was the noble Lord, Lord Harmar-Nicholls—the only hope is to reduce production.
I come next to the point that the noble Lord made about quotas. He is being a little not so much naive as optimistic in thinking that one could apply quotas on the scale of the EEC. It is very easy to do so in this country with 150,000 to 200,000 farmers, but not when one is dealing with, to quote my noble friend, Lord Oram, three-quarters of a million farmers. Quotas could help if they could be worked, but the administration would be appallingly difficult.
The next proposition would be a complete revision of the CAP. There is a strong case for having a look at a revision of the CAP. I was interested in a paper given
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at the Oxford Farming Conference, where a strong case was made for acreage and/or headage payments which would be simple and could be operated easily. I think that the noble Baroness, Lady Seear, said that we were not doing anything about change. We are: the committee will be looking at each individual commodity in its next task to see what can be done individually as regards change. Having done that, we will look at the whole situation and may recommend a change. That is very difficult to do because the EEC is very much tied to the CAP as it was originally thought out. It would be a big change to move from prices to headage or acreage payments.
The one thing that is adding to the whole situation is the recession today and the fact that consumption is stagnant, if not decreasing. I do not know whether the advertising plan of the noble Baroness, Lady Elliot, as regards Food from Britain and so on would increase the production of food. It might help, but I do not know. The Commission say that they would like prices more in line with those of competing countries. That would involve a very large change as regards a lot of commodities, particularly cereals, where the difference is £44 or £50 a tonne in some cases. It will be very difficult to get those prices down quickly enough to have any effect. The main problem, as we see it in the report, is that there is no way in which one can do it quickly without a tremendous political upset, as quoted by my noble friend, Lord Oram.
I turn to the 5 per cent. increase in incomes and the question that in this country it is 45 per cent. I have dealt with that point. The 45 per cent. concerns a very low figure and in no way goes back to the figures of 1974–75. I do not think the argument can be defended that farmers are getting too much.
We are definitely against the co-responsibility levy on milk. It has not had any effect. It causes a great deal of ill feeling. My noble friend Lord Brookeborough asked me to make it clear that in Ireland they feel that the milk price will be affected to the tune of a 2·3 per cent. increase and the co-responsibility levy will substract from that. He thinks that Ireland will be treated badly. We recommend a threshold for beef simply because we think that ultimately if beef production continues on its present lines, it will be in excess in the Community. There should be a threshold. I cannot think that operating some system of price control as regards milk and cereals will have any affect as regards pushing people into specialist beef.
One point not mentioned by anyone, but which appears in the report, concerns the question of monetary adjustments. These make a tremendous difference, especially with the swinging about monetary values. Although I know that it is not Government policy, I should like to think that we shall soon join the European Monetary System, because in the end that must help.
Another matter which several noble Lords have raised as regards the Commission's proposals, is their alteration by the council. We have a considerable objection to the way in which they have done this. Looking at the figures for 1982, the Commission's price proposal was then plus 522 million ECUs and the council's final decision was plus 780 million ECUs. In 1983, the Commission's proposal was plus 745 million ECUs and the council's final decision was plus

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1,540 million ECUs. Those figures are too wide and we hope, as someone said, that the council will not get cold feet again this year and alter the Commission's already—as our Government think—too high proposals. The noble Lord, Lord Roberthall, made that point very forcefully.
The noble Lord, Lord Harmar-Nicholls, stressed that the surpluses were not all that big. He was right. I go back to the point made by my noble kinsman that we cannot carry on with food aid. There are 800 million people with a nutritional standard far below what is reasonable and I understand that 400 million of them are actually starving. There are something like 90,000 deaths a year. One cannot help but emphasise these points. What is 20 million tonnes of grain, for instance, in that context? I cannot help thinking that it is not beyond the wit of man to get surplus food to the actual people who are starving—it does not matter where it comes from. I know that the food aid given in various ways has distorted matters, but surely some method could be found of getting it to the people who really need it. The second Brandt Report, which I understand is to be discussed in London this week, also emphasises that point.
I now want to deal with one or two of the points made about consumers. The noble Lord, Lord Kearton, paid the farming community a very nice compliment, but he gave various comparisons. We all know the old story that comparisons are sometimes odious. He said that we have a powerful voice in the Cabinet. I have been the Parliamentary Secretary to two Ministers of Agriculture, and after they have been at a Cabinet meeting they have returned very much with their tails between their legs. I know that my noble friend Lord Cledwyn of Penrhos will bear me out on that. So in the six years that I was on the job I never saw this great Cabinet lobby.
The noble Lord, Lord Kearton, made a point about the huge amount of money that goes into industry, and I have in mind the motor car industry, the steel industry, coal mining, and so on. An enormous amount of money goes into those industries but they are still losing money. I agree that an enormous amount of money has gone into agriculture, but it is profitable and it is producing more. Therefore I do not think that that comparison stands a great deal of examination.
The noble Baroness, Lady Seear, said that we cannot go on forever like this. I could not agree with her more. This committee is looking at the situation with a view to seeing whether we can alter it as the years go by. The noble Baroness mentioned the fact that people are taxed twice. What happens with regard to a motor car?—we are taxed twice. An enormous amount of money goes into steel and into British Leyland, so you pay the price for your car and you also pay your taxes. Therefore, if the noble Baroness makes these points she must make them all.
I should like to give her a list of the consumers on the committee. The chairman is a consumer—he is not a farmer; the noble Lord, Lord Mottistone, is not a farmer; the noble Baroness, Lady Llewelyn-Davies—who is our Deputy Speaker today—is not a farmer; neither is the noble Lord, Lord Jacques; nor the noble Lord, Lord Brimelow, who are both
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members of the committee. Therefore, I do not think that the accusation that the committee was overloaded with farmers will stand examination.
I thought that I would not have much to say, and if it had not been for the noble Baroness, Lady Seear, and my noble friend Lord Oram, with his eight and three-quarter million farmers' families, I would not have. I do not think that the noble Lord answered the point made by my noble kinsman about the eight and three-quarter million farmers' families, because I am sure that a ratio of 30 to 1 will not carry weight either and I think that we should take another look at it. This comparison of people producing something for an enormous number of consumers can apply to anything. One has only to look at the number of Metro cars coming off the assembly lines, the number of people producing them, the number buying them, and so on.
My noble kinsman suggests that I should throw away my notes, but I am not quite as fluent as he is and the one thing about notes is that you stop when you reach the end of them. My noble friend Lord Oram said that what was really needed was a price freeze. He said that matters are getting rapidly worse. I would refer to the noble Lord, Lord Harmar-Nicholls, who gave the figures as to how many days it would take to consume the various surpluses. I would point out that we only have to have a drought like that which happened in 1976, not only in this country but in other countries, and the surpluses will vanish overnight. Therefore I do not think that we should be too worried about those surpluses when we know what can happen in such a situation.
My noble kinsman will be happy to know that I have now come to the end of my notes. There is much more that one could say. I think that the committee did a good job. I know that people would like things to happen more quickly, but, as the late Lord Butler said, "Politics is the art of the possible", and I think that the quotation in the report is absolutely right: that you cannot move too quickly here. Farming is a long-term business. I would commend the report to your Lordships.
7.45 p.m.
Earl Ferrers: My Lords, we have had a debate which, remarkable though it may seem, has shown a considerable degree of unanimity, if only a unanimity over concern as to the way in which the common agricultural policy is going and in trying to find the right way for it. If I may, I would commend the words of my noble friend Lord Harmar-Nicholls when he says that it is important to try to think of the success of the common agricultural policy and not always to look at the failures or the shortcomings of it, because whatever stage of development a thing reaches, there will always be problems attached to it and those problems are there to be overcome. It is important to see how successful it has been.
I think it was the noble Lord, Lord Kearton, who said that the common agricultural policy cemented the European Community. Of course, in that he is absolutely right. It is a fundamental part of the European Community. We must try to mould it so that it takes on a correct direction. Of course, in-

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evitably, that is bound to be difficult when you have 10 member states all of which have different interests.
There is one matter that I should like to mention. In my opening remarks I referred to the fact that the average price increase was 4·4 per cent. for the Community and 4·1 per cent. for the United Kingdom. I should have said that this does not take into account the latest Commission proposals. I thought that I did. I believe, however, that I said that it did take into account the latest Commission proposals. If those new proposals were taken into account, the average increase would have been 4·1 per cent. for the Community and 3·9 per cent. for the United Kingdom. I merely state that in order to get the figures totally correct should I have misled any of your Lordships.
I would be tempted to pursue my noble friend Lord Harmar-Nicholls on his argument about 7 per cent. I am bound to say that, although I listened to him again, I did not quite see the basis of his figures; nor can I say that I agree with him. However, I shall be perfectly prepared to listen to him afterwards and try to see what it is about which he is concerned, because at the moment, through my ignorance and stupidity, I do not quite see what it is he is concerned about, and his figures do not accord with mine.
The noble Lord, Lord Mackie, referred to the problems of sugar. Of course, these are very substantial problems. I agree that sugar is a sector which poses very great difficulties. The Community produces 50 per cent. more sugar than it needs and the Community's surplus adds to pressure on the world market, on which of course several developing countries depend for their export earnings. That is why we should like to see a lower price increase than 4 per cent. which is proposed by the Commission. However, it is worth noting that the Community beet acreage was cut by 9 per cent. in 1982, and we can hope for a further reduction in 1983. We should also note that the Community agreed to increase its carry-over stocks so as to limit the exports for 1982, and it is likely to do so again.
When referring to Northern Ireland the noble Lord, Lord Mackie, asked: what is the family income below which the poverty level strikes? Not surprisingly, I do not have that particular figure with me. He was quite right to refer to the problems of Northern Ireland. The noble Lord, Lord John-Mackie, mentioned this too when he said that there had been, so it was reported in the newspapers, a 450 per cent. increase in incomes, and this was translated as being an enormous great income that people had had. I would only re-emphasise what the noble Lord, Lord John-Mackie, said, that on the Northern Ireland cattle farms the income in 1980–81 was £703 for the whole year, and in 1981–82 it went up to £3,896. That meant that in 1980–81 the income was £13 a week, which is surely intolerable, and it went up to £75 per week. For that to be transposed as being an enormous increase from which the farmers were benefiting, and almost one which was an increase which should not have occurred, is really quite wrong, totally erroneous and grossly unfair.
The noble Lord, Lord Roberthall, said that if industry had had protection such as agriculture has
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had, industry would have found no difficulty at all in making ends meet. All I would tell him is that Northern Ireland did then, and that was not a very happy state for them to be in. The noble Lord, Lord Oram, said that farmers have not done too badly. That may be a generality, but in so far as Northern Ireland was concerned that was not true. This is the danger that one can get into if one deals in generalities by saying that farmers have done well, or industry could have done equally well if it had had assistance of this kind.
If I may say so to the noble Baroness, Lady Seear, it is all very fine to say that the consumers pay once by buying the food, for which they also pay again by paying taxes. Of course, this happens on a variety of different occasions, and I shall come to that. I enjoyed Lord Brimelow's reference to last year's price fixing when he said that he thought my right honourable friend was like the lamb struggling in the thicket to get out. I am bound to say that if one stretched the biblical analogy a little further, and indeed if it stretched my biblical memory a little further, I think it was not the lamb but the ram that was in the thicket, and the poor ram ended up on the altar being sacrificed and was cooked, and it may be that that was also indicated in a not dissimilar set of events last year.
I enjoyed the noble Lord's reference to the fact that Carmen Miranda could only say "Yes" in 24 languages. I am not sure whether that was a reference to my right honourable friend or not, but I am bound to say that it accelerated my imagination considerably beyond the confines of the common agricultural policy. I should like to deal with the real point of concern expressed by a number of Members—the noble Baroness, Lady Seear, the noble Lord, Lord Kearton, the noble Lord, Lord Roberthall—and it also worries a number of us—which is the problem of the consumer. Of course, it is right that the consumer must be looked after and must have his interests adequately and properly reflected. I think that one may see that this happens under the common agricultural policy.
It is one of the tenets of the Treaty of Rome that the common agricultural policy should assure adequate supplies to consumers at reasonable costs, and at the same time try to give a reasonable return to the farmers for their work and their livelihood, but it is not all that easy to get these two to row together. Accepting the fact that that is not all that easy, it has happened to a remarkably successful extent so far with the common agricultural policy. One of the great problems is that you will never get supply and demand in equilibrium, and particularly is that so in agriculture.
People need food, and people must have it. The noble Lord, Lord Roberthall, wanted to see a lowering of the surpluses. I agree. The Government would like to see a lowering of the surpluses, but my noble friend Lord Harmar-Nicholls was right to put that into perspective as to exactly what these surpluses are. If one finds it difficult to keep supply and demand in equilibrium, which it is, one can refer back to only a few years ago, for instance, to the potato shortage of 1976. This was a shortage that happened not only in this country but in the whole of the Community, when prices went up from £60 a tonne to over £300 a tonne.

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Who was affected then? It was the consumer who was affected.
One ought to remember too that in the European Community the price of sugar has been below the world price on occasions. That was in 1974–75 and again in 1980–81, and there have also been occasions when the Community price of wheat has been below the world price. Noble Lords may say that this does not happen very often. No, that is perfectly true, it may not happen all that often, but it shows that if you are to be dependent on world supplies those world supplies are not constant, and the common agricultural policy has in fact provided a reasonable support for the farmers at the same time as providing a reasonable supply of food at reasonable cost to the consumer.
I pointed out at the beginning, and I shall not weary your Lordships with pointing it out again, that the increase in the price of food has been very much lower than the rates of inflation. Not only that, but I think that it was the right honourable gentleman who was Minister of Agriculture in the previous Administration, Mr. Silkin, who said that between 1974 and 1979—and I use these figures not to make any party political point but merely to repeat what he said—the price of food had gone up by 110 per cent., and that that part of that 110 per cent. attributable to the common agricultural policy was in fact only 10 per cent. It is too easy to blame always the common agricultural policy for increases in the price of food.
The dilemma—and the noble Lord, Lord John-Mackie, correctly referred to it—is that in this world in which we live we have one-third of the world with too much food and two-thirds with not enough. The noble Lord asked cannot we move this across? There are great difficulties in trying to move food from an area of surplus to an area of deficit of food. One is cost, the second is the ability of the country to pay, and the third is to get it to the country concerned, and to get it to the people who actually require it.
If one is worried about surpluses, it is worth looking around the world. One merely has to look at Somalia, Poland, and Ethiopia to see the ravages of famine, and to realise even now that places like Mali, Chad and Niger are all facing the possibility of widespread famine this year. When one realises that, we are in fact immensely lucky in the Community to have a system which at least has prevented that. The difficulty is to prevent the surpluses exacerbating trade and causing conflict. That is a difficulty which we can only get over gradually and by negotiation and by trying to mould the Community and the common agricultural policy rather like moulding a potter's vessel. You cannot do it in one go. It has to be done gradually over a number of years.
My noble friend Lady Elliot referred to Food from Britain. I was glad that she did. We in the United Kingdom have a considerable export of food now, and this is good, but what we do not do is to market our food as well as we should. She was correct to say that Food from Britain is not just a convenient way of encouraging people to buy food. They have to buy food, not because it is British but because it is best. That has to be done not just by providing a slogan and advertising it. You have to find out what the consumer wants; the processors have to find out what the
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consumer wants; the farmers have to find out what the processor wants, and each one has to ensure that the supply is exactly what the consumer requires. This means a dependence on quality, price, consistency and constancy; only then can we promote British food, which is what we hope to see happen.
In the difficulties we have—and the noble Lord, Lord Kearton, referred to the sums of money spent on British agriculture—we should remember that the export of food, feed and alcoholic beverages amounted to £3,391 million in 1981, and already between January and September 1982 it is £2,539 million. These are very substantial figures, and the net benefit to the balance of payments from our increased self-sufficiency between 1978 and 1982 is £1,250 million, so the country as a whole has very considerable advantages from having successful agriculture. It has served the country well. It has improved our balance of payments, reduced our imports, encouraged our exports and, as I said at the beginning, it has actually provided new jobs this year, a trend which has not happened for a great many years.
It is our intention in the common agricultural price-fixing which is going ahead to take account of the consumers' view. We want to see the surpluses not increased but reduced, and I would remind the noble Lord, Lord Oram, that my right honourable friend is not just the Minister of Agriculture but the Minister of Food as well, and in that respect he is, I think, in a minority of one in the Community. But he does, and will, take into account the views of consumers. And in so far as your Lordships have expressed concern about them, an absolutely justifiable concern, I assure the House that my right honourable friend is equally concerned. We want to see the CAP succeed for the benefit of the farmers, of the consumers and of Europe as a whole. That will not be done overnight. It must be done by gradual and careful negotiation.
8.3 p.m.
Lord Mottistone: My Lords, I wish to thank all noble Lords who have taken part in the debate. I was pleased to see the Leader of the Opposition, who until recently was the chairman of Sub-Committee D, with us for most of the evening. The noble Baroness, Lady Llewelyn-Davies, chairman of our Select Committee, has graced us with her presence practically throughout, and I am most grateful to her for that.
I was delighted to hear my noble friend Lord Ferrers confirm that efforts are being made to see that we get our farm price proposals earlier, that a final decision on farm prices may well be made at the first meeting of agriculture Ministers and that our Minister will be robust. My noble friend did not mention in either his opening or closing speeches the point which I and several noble Lords made; namely, whether the Ministry of Agriculture, Fisheries and Food could help to spread the message on thresholds and penalties in the guidelines on a five-year rolling programme, to which we gave special point in paragraph 32 of the Report.
I wish to make a special point of thanking my noble friend Lord Harmar-Nicholls for joining us, the first time he has taken part in a debate on one of our reports, and for the kind remarks he made about all

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the reports of the Select Committee. It was good to hear that they are so well considered in the European Parliament. His second point, which was touched on by the noble Lord, Lord John-Mackie, was the view that quotas might be the answer. He might like to know that Sub-Committee D is now studying commodity by commodity what we call supply control, and one of the solutions we are examining is quotas. Whether that will be the one we recommend is not at all sure because there are all sorts of difficulties about that, as we are discovering, but the sub-committee will be discussing that subject next, which is what he wanted us to do.
I think that probably the figures he quoted, which were somewhat confusing to the Minister, resulted from the fact that the advice he got took into account the possible introduction of a negaative MCA of 1·5 per cent., which threatened us last week-end but which was deferred by the management committee, at any rate for a week. If that was put into effect it might make some sense of the figures, but I would not be sure of that.
This has been a splendid debate. I did not agree with the Minister on one point, and that was when he congratulated us on our unanimity. I think it was rather the reverse. It was one of the first splendid debates of the sub-committee of the Select Committee at which there was a great deal of argumentation, with splendid people from outside the committee taking part. I hope very much that future debates of this sort, on whatever reports, will take the same form and that we shall have the same type of argumentation in that we shall develop even more our ability to impress people in Europe with the wisdom of the remarks from this noble House.
On Question, Motion agreed to.
House adjourned at seven minutes past eight o'clock.