Lords Sitting of 10 November 1983

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Bath and Wells): The LORD CHANCELLOR on the Woolsack.
The Earl of Dundee—Sat first in Parliament after the death of his father.
The Lords following took and subscribed the Oath or made the solemn Affirmation:
Edward Henry Berkeley, Viscount Portman;
Alexander David Frederick, Lord Lloyd.

Insolvency: Wrongful Trading
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they accept the view of the Cork Committee on Insolvency Law and Practice that its proposals on "wrongful trading" are of the greatest importance and should be implemented as a matter of urgent necessity.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, Her Majesty's Government recognise the value of the Insolvency Law Review Committee's wrongful trading proposals. These proposals, however, are only part of the solution to the problem of delinquent and irresponsible directors. It is the Government's view that such an important subject should not be dealt with piecemeal but should wait for the insolvency law reform legislation on which the Department of Trade and Industry expects to issue a White Paper early in the New Year.
Baroness Burton of Coventry: My Lords, if I might pursue the Minister a little more on this question of urgency, does he recall that in another place in July and August the Minister for Consumer Affairs gave two Written Answers stating that he thought that there were certain abuses in this area of wrongful trading which required urgent attention? Does he also recall that the Minister went on to say that he was considering taking up the matter of the Cork recommendation for the introduction of civil liability in these matters? Finally, bearing that background in mind, might I ask the noble Lord whether he has any views on Chapter 44 of the Cork Report which in paragraph 1806 contains a draft clause on this matter, and whether the Government would consider that that might be dealt with separately?
Lord Belstead: My Lords, I recognise that both the Cork Report and the noble Baroness, very rightly, are extremely concerned particularly about the wrongful
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trading question. I think that we must bear in mind that the recommendations of the report which might appear to be most suited for early treatment—including this one—are inter-related and their effects are often interdependent. We have tried to give urgent attention to the report which, after all, came out only last year. My right honourable friend the former Secretary of State for Trade and Industry gave an undertaking that there will be a White Paper and legislation to follow as soon as possible. We intend to try to stick to that.
Baroness Burton of Coventry: My Lords, I know that the noble Lord wishes to be helpful, but might I ask him if he is aware that the experts in the consumer organisations—and there are some good experts among them—consider that this particular matter could be dealt with separately instead of waiting for the whole of the Cork Report? Might I ask him something arising from last week? If he refers to the Official Report of this House for last Thursday he will note that I asked whether we could be told what aspects of the Cork Report the White Paper which was promised early in the new year would cover. I was not able to be given an answer. Could the noble Lord write to me about that so that the matter can be cleared up?
Lord Belstead: My Lords, we ought to try to be more helpful to the noble Baroness. I must admit that I am not in a position today on the Floor of the House to be more helpful because the report is such an enormous one and I do not think that we yet genuinely know its exact scope. But I should like to write to the noble Baroness and try to help over that matter. On the first point which the noble Baroness raises, all that I can say is that, although there may be those very well versed in these matters who believe that one could pull out certain aspects of the report which, I agree, need to be looked at with as much urgency as possible, I think that I really must rest on my answer to the first supplementary question—which is that one finds that those recommendations which might be most suitable for early treatment are inter-related and their effects are interdependent.
Lord Mishcon: My Lords, I could not hope to equal the persistence of the noble Baroness who has just spoken; but may I press the noble Lord the Minister on one aspect? Will he agree that, because of the complexity of this report, it is unlikely that legislation on insolvency matter will take place at anything like an early date following on the White Paper because of the number of consultations that will have to be involved? Will he not agree therefore that this question of wrongful trading which is so much hurting our little people in commerce might be legislated upon separately and then to carry that through into any other legislation which may be enacted a very long time afterwards?
Lord Belstead: My Lords, I recognise the expertise of the noble Lord and his concern in this matter; but I think that even he, knowing a great deal more than I know, would wish to see what is in the White Paper—which ought to be available in the very near future—before reaching any conclusions on that supplementary question.

Urban Programme: Funds
3.6 p.m.
Baroness Elliot of Harwood: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what will be the total level of resources devoted to the Urban Programme during the current financial year.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, for the year 1983–84, £348 million was provided for the Urban Programme in England, £35 million in Scotland and £17 million in Wales—a total of £400 million.
Baroness Elliot of Harwood: My Lords, perhaps I may say how glad I am to hear the Government statement along these lines, because waste of land in this connection would be a pity. May I ask whether anything is being done in Scotland in this particular regard?
Lord Bellwin: My Lords, I said in the Answer a moment ago that £35 million of the £400 million was applicable to Scotland.
Lord Gainford: My Lords, can my noble friend say how much Her Majesty's Government are satisfied with the progress of the urban development programme?
Lord Bellwin: My Lords, the urban development grants scheme, to which I presume my noble friend refers, is proving a very great success. Indeed, only today I am announcing a further three schemes being approved in Wolverhampton, Coventry and Nottingham; and the overall total in this respect now amounts to over £300 million, of which only slightly over £60 million comes from the public sector. The remainder comes from the private sector.
Baroness Seear: My Lords, will the Minister confirm that there is no truth in the rumour that the urban aid programme is likely to be reduced in the near future?
Lord Bellwin: My Lords, clearly I cannot say what the amount of next year's urban programme funds will be, but I think I can assuage the concern of the noble Baroness if she is relying upon a particular newspaper report. I gladly tell her that that report, like a number of others very recently, is in some kind of phantasy land.
Lord Graham of Edmonton: My Lords, without having asked the question I was going to ask, I am grateful to the Minister for the answer he has just given.
Lord Sandys: My Lords, may I ask my noble friend whether the city centre programmes are included in the urban renewal programme, especially in regard to the restoration of historic buildings?
Lord Bellwin: My Lords, the Urban Programme funds can be applied to purposes of the kind to which my noble friend refers. However, there are other sources for that kind of restoration. But, certainly, when we receive applications for that purpose within a particular Urban Programme we look at them very carefully and, of course, are sympathetic to them.
Baroness David: My Lords, may I ask the Minister whether improvement grants will be freely available under the Urban Programme? Because there was a statement recently that money for local authorities' improvement grants was going to be cut back severely.
Lord Bellwin: My Lords, improvement grants as such do not form part of the Urban Programme; that is a separate matter entirely. I think the noble Baroness is referring to general improvement grants, which were 75 per cent. with an increase to 90 per cent. for a time, and where the indication is that they will again come back to 75 per cent. That really is not part of the Urban Programme.

Privatisation
3.12 p.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further steps of denationalisation they propose to take during this Parliament.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, our intention is that British Telecom, Rolls-Royce, British Airways, BGC's former offshore oil interests (Enterprise Oil Ltd.), substantial parts of British Steel, of British Shipbuilders and of British Leyland, and as many as possible of Britain's airports, will become private sector companies. We also aim to introduce substanial private capital into the National Bus Company. The Wytch Farm oilfield sale is expected to be completed this financial year. Other possibilities are under consideration
Lord Orr-Ewing: My Lords, will my noble friend understand how pleased we on this side of the House are to hear that this very ambitious programme is contemplated—and noble Lords in other parts of the House as well? Could he note that when these operations are undertaken every effort is made to involve those who are working in the industries concerned? Is it not a fact that the National Freight Corporation, where management and workpeople were all concerned and bought shares, is likely not just to break even, as it did last year, but to make profits of about £5 million this year? Is it not also true that nationalisation does not in fact guarantee the same jobs to the same people? There were very large cuts in the nationalised industries of gas and electricity in the years before this Government came to power.
Lord Cockfield: My Lords, I am grateful to my noble friend for his comments. It has been, and will continue to be, the policy of Her Majesty's Government to encourage shareholdings by employees. This

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is a very valuable feature of privatisation. It is perfectly true, as he says, that the National Freight Corporation is likely to make a good profit of about £5 million this year, while last year it barely broke even. Other companies which have been returned to the private sector have also done very well.
Lord Beswick: My Lords, if the private sector is that much more clever at running industry than the public servants, why is it that they are given only the easier and profitable sectors to administer? Why do they not have a go at the more difficult companies within the public sector? May I ask the noble Lord, in respect of British Airways, bearing in mind the report of the Public Accounts Committee on British Aerospace: can he really justify putting £1,000 million of taxpayers' money into British Airways to make it marketable?
Lord Cockfield: My Lords, I am grateful to the noble Lord for his suggestion that all the nationalised industries should be privatised whether or not they are currently profitable. We shall certainly bear in mind his wholehearted support in this matter when we come to consider individual projects. So far as British Airways are concerned, the precise nature and form of privatisation has still to be settled. This obviously includes the question of the capitalisation of the company.
Lord Beswick: My Lords, with respect, I admire the facility of the noble Lord's answer, but would he please answer the first part of my question and tell me why he does not give the difficult ones to private entrepreneurs?
Lord Cockfield: My Lords, I was very clear and specific in my reply. There are a number of the nationalised industries which have gone through very difficult times. Many of them have made large losses; they have been over-manned; they have been a severe drain upon the taxpayer. Many of these things need to be put right, and we have devoted a great deal of effort towards putting them right. When they are put right these industries will, we hope, be privatised, and we shall thus ensure their continued successful operation.
Lord Nugent of Guildford: My Lords, is my noble friend aware that any list which contains British Shipbuilders can hardly be said to contain only the easy ones?
Lord Cockfield: My Lords, I am grateful to my noble friend for his comment, which I shall, of course, bear in mind.
Lord Beswick: My Lords, but is it not the case that to pick out only the profitable—
Noble Lords: Oh!
Lord Jacques: My Lords, would the Minister bear in mind two things? First of all, would he bear in mind that some of these undertakings that were nationalised were only nationalised when private ownership failed? Examples of this are British Leyland and Rolls-Royce. Secondly, would the Minister bear in mind that there
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are other policies—policies far more important than ownership—which are necessary in this country?
Lord Cockfield: My Lords, if the noble Lord will cast his mind back he will remember that the reasons for nationalising industries were not by any means confined to the fact that the industries in question were making losses. I would suggest that he reads some of the policy documents of the Labour Party, however horrifying they may be.
Noble Lords: My Lords—
Lord Shinwell: My Lords, would the Government consider leaving the nuclear defence complex under the state and diverting the conventional forces to private ownership?
Lord Cockfield: My Lords, I must apologise to the noble Lord, Lord Shinwell. There was so much background noise as he began to ask his question that, unfortunately, I lost his introduction to it. I am sure, however, that he has made a valuable point, as he always does.
Lord Taylor of Gryfe: My Lords, would the Minister advise the House on the timing of these issues, to ensure that in the carrying out of such an ambitious programme the Government will not overload the market with new issues, in order to ensure that the taxpayer gets the maximum advantage in the presentation of these companies for privatisation?
Lord Cockfield: My Lords, the noble Lord, Lord Taylor, has made a very important point, and it is one which we keep in mind all the time. The programming of issues of this sort requires great skill and a proper regard to market conditions at the time. It is our objective, as he himself says, to ensure that the Government receive a fair and proper price.
Lord Molloy: My Lords, does the noble Lord agree, when he makes recommendations to noble Lords on this side of the House to cast their minds back to some aspects of nationalisation, that the last time Rolls-Royce was nationalised it was an emergency measure of the Tory Government of the day? Is that not correct? Secondly, is it not also true that many of our great publicly owned industries have excellent relations with sectors of private industry and that together they make very good teams in seeing that the economy of Britain is well maintained? One can hardly mention a publicly owned industry which does not have very close relations with other aspects of industry which are privately owned.
Lord Cockfield: My Lords, of course the noble Lord is entirely right in saying that close relations ought to exist between public sector and private sector companies, and very often they work together very well. I do not want to go into the specific history of Rolls-Royce, about which a great deal could be said and which throws no credit on the position and policies of certain prominent Members of the Labour Party who are no longer as prominent as they were then. But there may be circumstances where a company needs rescuing and this was so in the case of

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Rolls-Royce. The important thing now is to ensure that the part of that company which remains in the public sector—and the noble Lord will remember that part of it was returned to the private sector shortly afterwards—is run properly and efficiently and can therefore appropriately be returned to the private sector.
Lord Mishcon: My Lords, will the noble Lord consider placing the considerable irony which he has now put at the disposal of the national interest back again into private interest and privatising it for the general benefit of this House?
Lord Cockfield: My Lords, I am always most grateful to the noble Lord for his compliments, and I can assure him that my abilities remain at the service of the Government as long as it is the wish of the Government to employ them.
Lord Bishopston: My Lords, will the noble Lord tell the House how many millions of public money have been put into nationalised industries to pay for redundancies and other factors, in order to make them more attractive for piratisation? For instance, can he say whether the increase in gas prices is an attempt to make the industry much more profitable and therefore more attractive to the private sector? Will he give some assurances—for example, in the case of British Telecom—that many of the socially necessary services which do not make a profit, such as the presence of telephone facilities in rural areas, will still continue despite the piratisation of the public sector?
Lord Cockfield: My Lords, so far as the first part of the noble Lord's question is concerned, perhaps the most relevant figure to give him is that since 1945, and revalued at current prices, approximately £45,000 million of public money has gone into the nationalised industries, most of which has been lost. This is the kind of thing that we wish to bring to an end. To turn to British Telecom, the noble Lord will no doubt have read the draft licence which has now been published and which deals in detail with the measures which British Telecom are required to abide by for the preservation of services in rural areas.
Lord Alport: My Lords, may I ask my noble friend whether he realises that the sarcasm and discourtesy with which he has answered many of the questions put to him this afternoon is not in accordance with the normal traditions of this House?
Lord Cockfield: My Lords, I have in fact, in reply to every question, given a strictly factual answer. The fact that certain noble Lords may not like to look the facts straight in the face is not a matter on which I would wish to comment.
Lord Underhill: My Lords, does the noble Lord the Minister remember a number of occasions when I and other Members on this side of the House made it quite clear that we believe in a mixed economy? Will the Minister say whether the Government believe in a mixed economy and where they draw the limits of their polemical attack upon public ownership?
Lord Cockfield: My Lords, we have never made polemical attacks on public ownership. Our objective is to ensure that these industries are run for the greater benefit of the people who work in them, of consumers and of the general public at large and, in the main, they can be run better, more efficiently and more competitively in the private sector than in the public sector.
Lord Diamond: My Lords, will the noble Lord say whether it will continue to be the policy of Her Majesty's Government to draw no distinction between the finance which will be coming into the Treasury from the sale of these assets and the ordinary revenue of the country which is naturally used for consumption purposes, such as public services and so on? Will that continue to be the policy of the Government, and if it does so continue, will not the case be at the end of the Government's period of office that the country will simply be the poorer for the lack of all these national assets?
Lord Cockfield: My Lords, so far as the first part of the noble Lord's question is concerned, receipts from the sale of assets are separately identified in the national accounts so that it can be seen exactly what has been received. Regarding the second part of his question, it is not the case that all revenue is spent for current purposes only. On the contrary, a large amount of revenue is spent on capital projects. For example, many billions of pounds a year are spent on the capital programmes of the nationalised industries, and of course there are large capital projects in other areas of Government.
Lord Diamond: My Lords, is that not a completely misleading answer? The noble Lord the Minister knows that it has always been the case that, out of the proceeds which the Government collect, a number of items of expenditure have been incurred which could be classified partly as capital and partly as revenue, and it has never been the practice to attempt to distinguish. Is it not the case that there is a great deal of capital loss going on in the form of depreciation which is never recorded in the capital account and which offsets what the Minister has been saying? Am I not right therefore in saying that a clear distinction ought to be drawn when the country is embarking on a totally new policy of selling its birthright? The conclusion will be—but I do not need to finish it.
Lord Cockfield: My Lords, I fear that the noble Lord is getting rather emotional and he is mixing up his politics with his accountancy. The first part of his exposition merely confirms what I was saying. So far as the rest of his point is concerned, the Government spend every year a large amount of money on capital account and it is quite wrong to say that the birthright of the nation is being sold.
Lord Morris: My Lords, is my noble friend aware that I am not alone in my view that the appointment of himself to the Government by my right honourable friend the Prime Minister is one of the best examples of her good taste and judgment?
Lord Cockfield: My Lords, I am grateful to my noble friend for what he says.
Lord Beswick: My Lords, will the Minister be good enough to clarify the remarks which he made earlier, that certain members of the Labour Party were in some way involved in the bankruptcy of Rolls-Royce?
Lord Cockfield: My Lords, that was not the point that I had made. The point that I had made was that certain policies which had been followed did in fact lead to a situation in which Rolls-Royce went bankrupt and the noble Lord will find that this is amply evidenced.
Lord Elwyn-Jones: My Lords, will the noble Lord be good enough to read again the nature of his answers to the House today, which seem to have shown a progress from irony to sarcasm to positive rudeness to the noble Lord who has just spoken. We admire greatly the noble Lord's intellectual capacity, but let him consider how he is dealing with the House.
Lord Cockfield: My Lords, I reject entirely the claims made by the noble Lord—the noble and learned Lord.
A noble Lord: The noble and learned Lord.
Lord Cockfield: I said "the noble and learned Lord" before the noble Lord chose to try to correct me. I simply do not accept the criticisms which the noble and learned Lord makes.
Lord George-Brown: But, my Lords, the noble Lord never did accept any criticisms. May I ask the Minister to make it quite clear that he advised me about Rolls-Royce when I was the economics Minister. If the thing went wrong it was because I accepted the noble Lord's advice.
Lord Cockfield: My Lords, I am happy to say that I have never advised the noble Lord, Lord George-Brown, either on that or, indeed, on any other matter. The only occasion that I remember meeting him in that sort of capacity was when he was a Parliamentary Private Secretary——
Lord George-Brown: That is right.
Lord Cockfield:—to the late Sir Stafford Cripps.
Lord George-Brown: I never was. The noble Lord has even got that wrong.
Lord Cockfield: In that event, I withdraw the compliment that I paid to the noble Lord.

Abortion Act 1967: Proposed Amendment
3.32 p.m.
Lord Robertson of Oakridge: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their response to the call by the Church of England
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General Synod, supported by a majority of 256 to 2, for a Government-sponsored Bill to amend the 1967 Abortion Act to restrict the number of abortions.
The Parliamentry Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, the Government respect the conviction which underlies the vote of the General Synod. We believe, however, that abortion is a subject on which Parliament should be free to vote according to individual consciences. Accordingly, the Government will continue to leave possible changes in the law on abortion to individual initiatives.
Lord Robertson of Oakridge: My Lords, while thanking the Minister for his Answer, it seems to me to be disappointing that the Government are taking a back seat. Do the Government fully appreciate that the reason why the vast majority of Christians—and I believe I can say Christians of every denomination—feel so strongly about the present situation is because they believe that the unborn children whose lives are being taken are persons created by God and known by Him and entitled to our protection? Can the Minister say whether the Government see it as their duty to protect life as including or excluding the unborn child?
Lord Glenarthur: My Lords, as I said in my original Answer, the Government consider that this is very much a matter for individual consciences. However, the noble Lord spoke about the numbers of people in the General Synod of the Church of England who voted for it. He may like to be aware that of the 550 or so members of Synod who could have voted, only 272 did, leaving 278 who did not even attend.
Lord Winstanley: My Lords, is the Minister aware that the principal aim of the 1967 Act was to ensure that more pregnancies are terminated under controlled, aseptic and safe conditions, with consequently fewer abortions, and preferably no abortions, being performed illegally under very dangerous conditions indeed? Would the noble Lord further agree that the most satisfactory way of avoiding unwanted pregnancies is to provide readily available family planning services and that any attempt to privatise the family planning service, or otherwise to remove it from the National Health Service, could have very dangerous consequences indeed?
Lord Glenarthur: My Lords, I agree entirely with the first point which the noble Lord, Lord Winstanley, made. So far as his second supplementary is concerned, yes, there is scope for both the private sector and the public sector.
Lord Avebury: My Lords, of the 270 people who voted in Synod for this motion, can the Minister say how many were women?
Lord Glenarthur: Not without notice, my Lords.
The Earl of Longford: My Lords, is the Minister aware that when the 1967 Act was carried through this House every kind of assurance was given that there

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would not be abortion on demand? Is the Minister further aware that in many cases abortion on demand is now available? In other words, the Act has been completely abused.
Lord Glenarthur: My Lords, I am afraid that I reject what the noble Earl says. It is not the case that the Act is being widely abused. The statistics which come to the department would verify that fact.
Lord Somers: My Lords, is it not a little strange that the Government of this country, which is nominally, at least, still a Christian country, should totally reject the practically unanimous view of Synod?
Lord Glenarthur: My Lords, as I said, the vote in Synod was 256 for, two against, with 14 abstentions. A further 278 did not vote. I think that answers the noble Lord's supplementary.
Baroness Jeger: My Lords, if this is to be a question of numbers, would the noble Lord the Minister, whom I congratulate on the answers he has given today, care to look at other opinion polls and expressions of opinion from sources other than the General Synod of the Church of England, including in particular the women of this country?
Lord Glenarthur: My Lords, one of the chief difficulties about dealing with a matter like this is that it is an extremely emotional one. All noble Lords will have their own personal views. That is why the Government maintain the view that it is best to leave this matter to individual conscience. They believe that the Abortion Act 1967 was a great improvement on what existed hitherto, as the noble Lord, Lord Winstanley, explained so well just now.
The Lord Bishop of Southwell: My Lords, would not the noble Lord agree that in any assembly not all the members are always in the house in order to vote, that the General Synod of the Church of England is not famed for being unanimous in its votes and that in fact this was rather a rare vote, with considerable support for this particular motion being given right across the membership of the house? Would not the noble Lord also agree that it is very difficult for this matter to be raised as a Private Member's Bill with any chance of it being looked at seriously?
Lord Glenarthur: My Lords, I accept what the right reverend Prelate says about the attendance at any one time of people given any particular opportunity to vote, but I cannot promise that the Government could give any time for such a Bill. In any case, that would be a matter for the usual channels.
Lord Leatherland: My Lords, when Synod carried by 256 votes to two the motion that was before them, can the Minister tell us whether the bishops had put the whips on? Or was it a free vote?
Lord Glenarthur: My Lords, that might be a question better addressed to the right reverend Prelate on my left.
Lord Robertson of Oakridge: My Lords, may I ask the Minister whether the Government are prepared to look at the specific question of late abortions?
Lord Glenarthur: My Lords, the question of abortions is something which the Government certainly keep under review. So far as late abortions specifically are concerned, if the noble Lord would like to elucidate the point further at a later date, or write to me, perhaps I could take an interest in the matter, because I have a certain responsibility towards it. But I have no other facts to put in front of the noble Lord today.
Viscount Ingleby: My Lords, are the Government aware that more lives have been terminated under the Abortion Act than were lost in two world wars?
Lord Glenarthur: My Lords, without notice I simply do not know the answer to that question.

Private Notice Questions
3.38 p.m.
Lord Jenkins of Putney: My Lords, I rise under Standing Order No. 32, which deals with Private Notice Questions and, inter alia, the procedure when such a Question is disallowed. The procedure provides that the Lord concerned may raise the matter at this time in your Lordships' House. In order to do so I must, as provided under the standing order, tell your Lordships what the Question was and give my reasons for believing that it should be allowed. The Question was as follows:
"To ask Her Majesty's Government whether as an opinion poll has shown that 94 per cent. of the British people want dual key control of cruise missiles they will hold up deployment until such an agreement is reached."
As I understand it, the main reason why the noble Viscount the Leader of the House has decided that this is not a Question which should be asked in this way is because this is not an emergency in the sense that an emergency is understood in this context.
This would be true if what I was raising was merely the question of an opinion poll, but the opinion poll is one which deals with a matter which is in itself an emergency. If this Question cannot be asked before the missiles are deployed, then single key control, under direct American physical influence and control, will be established. It seems to me, therefore, that it is a Question which the Government should be asked and which they should reply to before the missiles themselves are deployed. As there is apparently no opportunity to put this Question down on the Order Paper in the ordinary way because the Order Paper is full, I submit to your Lordships that the Question ought to be allowed, that the Question should be put, and that it should be answered by the Government today.
The Lord President of the Council (Viscount Whitelaw: My Lords, naturally I gave very careful consideration to the Private Notice Question submitted to me by the noble Lord, Lord Jenkins of Putney. Naturally, I looked to see what had happened in the past. I understand that it is for the Leader of the House

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to decide in the first instance whether the Question is of sufficient urgency to justify an immediate reply. I am, of course, in the hands of the House on this matter, but it does seem to me to be perfectly clear that the noble Lord's Question is not an appropriate one for the procedure of a Private Notice Question. I entirely accept that the matter he is discussing is an important matter for this country; but I did not feel that the basis on which he founded his Question was an appropriate one for the procedure of a Private Notice Question. That was my reasoning, having given the matter very careful consideration.
Lord Jenkins of Putney: My Lords, this matter is one upon which one is strongly tempted to divide the House because of the massive support—the quite unprecedented support—for the view that the British Government and their representatives should have a physical hand on their own fate in the case of cruise missiles. This is not a question that is of the same order as other questions; it is one that moves people throughout the country and on all sides of the House. Therefore, one is tempted to divide the House.
However, I am hopeful, knowing that the House is conscious of the importance of this matter, that some way will be found by the Government of giving the House an opportunity to debate this single issue—the issue of physical dual key control—before they announce the actual presence of the missile. In the hope and belief that the Government will do that, I will refrain from dividing the House this afternoon.
Viscount Whitelaw: My Lords, while I much appreciate that which the noble Lord, Lord Jenkins of Putney, has said and his decision not to divide the House, it would be open to me, as he will appreciate, to debate the reasons for my decision. I felt that it would not be in the best interests of the House to do so, unless very pressed. But if I were to promise that there would be an immediate or very quick opportunity for this House to debate this matter, I believe it would be dangerous for me to do so on that basis. I must point out to the House that this matter has been discussed in very considerable detail, and debated and voted upon in another place as well, over a long period of time. That would be the basis of my view. I hope that the noble Lord will understand it.
Of course, I will see what can be done to help the noble Lord, Lord Jenkins of Putney, and I understand the importance of the question he is raising. But I cannot give him the undertaking quite in the way that he has asked for it; I would be being dishonest to the House and to myself if I pretended that it was otherwise.

Housing: Structural Safety
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Bellwin will, with the leave of the House, repeat a Statement that is to be made in another place on defective housing.

Somerset House Bill [H.L.]
Lord Skelmersdale: My Lords, on behalf of my noble friend Lord Bellwin, I beg to introduce a Bill to confer leasing powers on the Crown in respect of the Fine Rooms and other parts of Somerset House with a view to their use for artistic, cultural or other purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Skelmersdale.)
On Question, Bill to be read a first time, and to be printed.

Oil Taxation Bill
Brought from the Commons; read a first time, and to be printed.

Maximum Number of Judges Order 1983
3.45 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone)The Lord Chancellor (Lord Hailsham of Saint Marylebone) rose to move, That the draft order laid before the House on 24th October be approved.
The noble and learned Lord said: My Lords, the Court of Appeal is the focal point of the English judicial system, and it is therefore vital that it should keep up with its work. The draft order to which the Motion refers relates to the ordinary judges of the Court of Appeal. The Court of Appeal, as the House will know, is manned by ex officio judges and ordinary judges, and this is laid down in Section 2 of the Supreme Court Act 1981.
The two ex officio judges who normally sit in the Court of Appeal are the Lord Chief Justice and the Master of the Rolls, but one or two of the others assist there from time to time. The ordinary judges of the court, known as Lords Justices of Appeal, make up its main judicial strength. There are at present 18, and that is the limit fixed by Section 2(1) of the Supreme Court Act 1981. The purpose of this draft order, as is apparent from its terms, is to increase the maximum to 23 places, although, as I shall be saying, I only intend at present to suggest that three should be filled.
The workload of the court has been rising substantially. The last time the maximum was increased (from 16 to 18) was in 1978, under the reign of the noble and learned Lord on the Opposition Front Bench. In that year, 1,371 civil appeals were set down. The civil appeals take up the bulk of judicial time in the Court of Appeal. Last year, 1982, the number was about 1,627. That is our best estimate, and is the figure which appears in the newly published volume of Judicial Statistics. That represents an increase of about 18 ½ per cent. over 1978. So far this year there has been a slight drop in the rate at which new work is coming in, but the substantial and continuing increase in the total workload of the civil courts suggests that the overall trend will continue to be in the upward direction.
The Court of Appeal has also to man its criminal division. In this division the pattern has varied since 1978. That year came in the middle of a falling trend

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which ended in 1980, but in 1978 there were 6,099 new appeals registered; in 1980, 5,400 new appeals were entered. Since then, the workload has risen again. In 1982, 6,674 new appeals were registered—an increase of 9½ per cent. over the 1978 figure; and I am sorry to say that there has been a further strong rise this year, with 3,591 new appeals compared with 3,223 in the same period of last year, which means a further increase of 11½ per cent.
Moreover, the upsurge in cases coming forward to the Crown Court, which lies behind the increase in the number of appeals, shows no sign of abating. What is even more significant, as regards the need for Lords Justices, is that the proportion of cases in which leave to appeal has been granted by the single judge has been increasing. In the great majority of criminal appeals leave to appeal must be obtained first from a single judge before the case may go for hearing to the full court, and that full court consists of two judges for appeals against sentence and three judges for appeals against conviction.
In 1978leave to appeal was given by the single judge in only one in six cases, and in a further sixth the application for leave was renewed to the full court. Since 1978 the proportion of cases in which leave to appeal has been granted by the single judge has steadily risen, and by last year it was well over one-quarter. In addition, the number of cases in which applicants have renewed their applications to the full court has also increased. It is now slightly more than one in five of the total. These changes, taken together with the steep rise in applications, has meant that there is a greatly increased workload for judges of the Court of Appeal in the criminal division as well as in the civil division. There has also been a marked increase in the work of the Divisional Court, which now takes about half the time of a judge of the Court of Appeal.
Despite these substantial increases in workload on every front over a considerable period, I did not wish to seek an increase in the number of Lords Justices without being sure that the time of the existing judges was not being taken up with matters which could be dealt with by others, or was not otherwise being wasted. A working party under Lord Justice Scarman (as he then was) made certain recommendations which I brought into effect in the Supreme Court Act 1981. Leave to appeal is now required in a larger proportion of cases, especially county court appeals, and application for leave may now be heard by a single judge. Courts of two rather than three judges may be used for more classes of business than before. The House will remember that there is also a new Registrar of Civil Appeals who can deal with a variety of preliminary and incidental matters and ensure that the court's time is not taken up with cases that are not ready for hearing.
In addition, in April the Master of the Rolls issued a practice note requiring counsel to submit skeleton outlines of their arguments so as to save some of the time spent in oral argument. He has also announced that appeals which appear to have been lodged simply for the purpose of delay—which is not an unknown feature of this jurisdiction—will be listed early so as to defeat that purpose.
All these measures have helped, and to some extent waiting times have actually been reduced. But even so, appeals which can be heard by two-judge courts must wait on an average for six to seven months, and those for hearing by three-judge courts must sometimes wait 12 to 14 months. Although some further improvement may still be possible during the coming year. I believe there is little scope for major reductions in waiting times without an increase in the judicial strength of the court. At present—and I must stress this—the court is depending heavily on the services of retired judges of the Court of Appeal and could not have achieved even the present modest successes without them. I should like to express my gratitude to the retired judges; they have helped in this way enormously, and I hope they will continue to be willing and able to serve when the occasion arises. But it is not really right that the court should have to depend on their services as a matter of routine.
The draft order proposes an increase of five in the permitted number of Lords Justices, from 18 to 23. As I have said, not all five places need to be filled immediately. If the order is approved, I have it in mind to recommend three additional appointments only. As I have indicated, the present workload on the courts of first instance, both civil and criminal, makes it all too likely that further appointments will be required in due course. That is why the order allows me a little room for manoeuvre. I beg to move.
Moved, That the draft order laid before the House on 24th October be approved.—(The Lord Chancellor.)
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble and learned Lord for going into detail in the way he has as to the reasons for his coming to the House to ask for this substantial increase in the potential number of Lords Justices of Appeal. I respectfully agree with what he has emphasised about the importance of maintaining the smooth working of the Court of Appeal, which is crucial to the administration of justice in our country, and of coping with the increase in the work coming before it. I was concerned, if I may say so, about the evidence that the Court of Appeal was failing to cope with the volume of work coming before it, and I was grateful for the assistance of the noble and learned Lord, Lord Scarman, and other Lords Justices in initiating the steps which culminated in the legislation which the noble and learned Lord has introduced to strengthen the Court of Appeal in various ways. The suggestions and the initiative of the present Master of the Rolls are valued, and it is good to know that they are bearing fruit.
The civil work of the court continues to increase. There was a 10 per cent. increase in 1982 over the previous year, and I suspect it will be the same sort of picture in this year as well. On the criminal side, the great increase in the number of criminal appeals, sadly, reflects the great increase in the amount of crime, which has reached an explosive point. I am not making a party political point of this, which is a happy change from some of the atmosphere which prevailed earlier. The fact is that in the last three or four years there has been a serious increase in the volume of crime. It is a matter we shall be discussing and examining in the coming week.

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Obviously, I have only got the 1982 volume of Judicial Statistics. On the criminal side there were 2,516 criminal appeals outstanding at the end of 1982. While we are glad to hear of the improvement in the speed of dealing with appeals, nevertheless, as the noble and learned Lord has indicated, a waiting period of 12 to 14 months before cases involving appeals against conviction are heard before three judges is obviously far too long and something which we cannot be happy about as a feature of the administration of justice in this country. After all, a number of those men and women waiting for their appeals to be heard will succeed in their appeals, and we have no system of remedy for the ultimately acquitted defendant. So it is important, especially when one bears in mind the appalling conditions in prisons in this country, which show very little sign of improvement. So we are touching the heart of a very serious problem in the administration of justice, and, in so far as the addition of more Lord Justices can help, we of course greatly welcome the development.
Perhaps the noble and learned Lord will allow me to widen a little the matters which we ought perhaps to be considering. I would refer to the position lower down in the court set-up; to what is happening in the county courts. There, the number of cases is leaping up. In 1981, over 2,092,000 cases were begun in the county courts. Last year, 2,300,000 cases were commenced in the county courts. I am informed, particularly through the solicitors, that the problems and backlog building up in the county courts is comparatively every bit as serious as those at the higher levels of the judicial system.
It is also suggested that the reduction in the number of civil servants concerned, for instance, in the process of levying execution—worthy as it is statistically as a figure in reducing the size of the Civil Service—is, I am told, having an adverse effect on the ability of the litigant to recover what is due to him. That is causing a great deal of anxiety.
I apologise for having ventured into that aspect and, because of the lack of notice, I do not expect the noble and learned Lord to answer. But I think it is perhaps right that we should not ignore the lower courts, which are the courts in which most of our citizens, plus the magistrates, experience the working of the administration of justice. Their reputation must obviously be maintained and therefore, in rightly looking at the top level, we should not forget the burden that falls on the lower courts.
4 p.m.
Lord Rawlinson of Ewell: My Lords, this is an important order which will be welcomed by all those who practise in law. It will certainly be welcomed by those whose cases are coming before this court. As the noble and learned Lord pointed out, it will be of very great importance in the Criminal Division, for those who have an appeal pending, that that appeal should be heard within a reasonable time. The noble and learned Lord pointed out the consequences for a person who might have his conviction quashed and who will have possibly spent some time in prison while awaiting that process. The Court of Appeal, as described by the noble Lord the Lord Chancellor, is the focal point in the administration of justice. It is a
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very hard-pressed court because it bears the greatest burden of all. It is the final court in the majority of cases and, if I may say so with respect to some former Lords of Appeal in Ordinary whom I see present on the Cross-Benches today, it has to do very much more work than the Judicial Committee of this House. I am not complaining in any sense, but it is the sheer volume of work which goes into the Court of Appeal which makes this order which has been introduced by the Lord Chancellor so important. In the view of the profession there has long been a need for an increase in the number of judges in the Court of Appeal.
The order will, of course, assist the present Master of the Rolls in his valiant efforts, through administrative changes, to expedite hearings. Such administrative changes are much favoured by those who practice, provided there is no diminution of public and oral argument in appeals. We must be on guard against the introduction of the American or European systems where, in so many appeals, the issues are decided on very limited public argument and mainly on the submission of written documents. The English and Scottish tradition has been the public hearing of appeals where the public and the individual litigant hear the actual case being presented and argued before the court.
Personally, I have the greatest reservations on all forms of proceedings from which the public are excluded. It is only on matters of national security that members of the public should be excluded. The presence of the public and of the press in proceedings in courts of law is an essential protection of liberty. Some members of this House and the other place are often critical of the service of the press, but we should be conscious of the great service given by the press in attending and regularly reporting the processes of the courts. It imposes a discipline upon the courts and it protects the liberty of the subject. Therefore, any appeal on paper would be a limit on that safeguard and I trust will not be introduced. The Master of the Rolls has made quite clear in the practice direction to which the noble and learned Lord the Lord Chancellor referred and has robustly asserted that there is no intention of limiting public argument in the appeal. I welcome and encourage that statement.
The second consequence of this new order—and I say this with the greatest respect—will be the avoidance of needing to use, in the Court of Appeal, former judges who are of great distinction and experience but who are beyond the statutory retirement age. Hitherto it has been unavoidable in order to keep the work of the court going. As I have said, they are former judges with great experience and skill, but Parliament, for the courts and in other fields, has decided that there should be an age limit. That is not a reflection on many or most of these distinguished judges who have so nobly helped in the work of the Court of Appeal, but it is a matter of principle and it really should not be circumvented. However, I believe that the opportunities for any Lord Chancellor to get the services of these former judges are now much reduced by the attractive offers to act as private arbitrators which are now flooding across the tables of the former judges, so they may not now be so available.
Nor do I think that the quality will be diluted by the appointment of these extra Lords Justices. In my 37

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years in practice I can say that rarely has there been a time when the standard of the top echelon of the puisne judges has been so high. I can think of many puisne judges who are fitted by both intellect and character to be promoted to the Court of Appeal. In June, when I mentioned this in speaking on the Queen's Speech, I said that I hoped the new Parliament would afford an opportunity for energetic law reform. It is most encouraging to see signs from the noble and learned Lord the Lord Chancellor which demonstrate that he has in hand so much good work in this field and which we hope those fierce Whips will permit him to do in managing the business of the Government.
It is essential for the courts to be adequately staffed, and I am glad that the Lord Chancellor has persuaded that other hovering guardian of the public purse, the Treasury, to introduce what will prove to be perhaps more expensive but certainly a very considerable extension to this court. I trust that in appointing three he will shortly consider appointing more so that there will be more expedition in the hearing of appeals, to the very great benefit of the public in the administration of justice.
4.8 p.m.
Lord Mishcon: My Lords, I am encouraged by the noble and learned Lord, Lord Rawlinson of Ewell, whom we are always delighted to hear, and by the way in which he roamed into various fields not directly connected with this order, to make a few observations, if I may, in furtherance of what my noble and learned friend—
Lord Hale: My Lords, why does the noble Lord feel that he has the burden now to rise and make further comment when two or three noble Lords here have been popping up from time to time?
Lord Mishcon: My Lords, may I assure the noble Lord that I always want to give way to him. I did not turn round so did not see him rise, and I apologise. If I can assist him by sitting down and letting him speak, and then speaking afterwards, I shall do so with the greatest of pleasure. The noble Lord, with his usual courtesy, remains seated, so I will continue, but I again apologise to him.
As I said, I was encouraged to emphasise on behalf of my own profession what my noble and learned friend Lord Elwyn-Jones was saying about the need to look at other courts. The noble and learned Lord the Lord Chancellor referred to the Court of Appeal, if I remember his words, as being the focal point of the English legal system. May I be allowed to say that county courts, to which my noble and learned friend referred, are possibly the focal point of the English legal system because more and more the parties who now appear before those courts do so by virtue of the substantially increased jurisdiction which those courts have.
The noble and learned Lord, Lord Rawlinson of Ewell, was trying to urge the noble and learned Lord the Lord Chancellor swiftly to increase the number of Lords Justices of Appeal from the three to the five that he would be authorised to have. On behalf of my
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profession I think I can say that we should welcome that. But if there are monetary targets which appear here in front of the noble and the learned Lord the Lord Chancellor when he is thinking in terms of priority, I hope that he will remember—as my noble and learned friend Lord Elwyn-Jones urged—the very substantial needs of the county courts and the way in which lists there are getting absolutely packed and full, with the resultant delays in hearing cases in the county court. That is something that I am sure your Lordships will deprecate, as I know will the noble and learned Lord the Lord Chancellor.
Lord Wilson of Langside: My Lords, may I briefly accord a similar welcome from these Benches as has been accorded by the noble and learned Lord, Lord Rawlinson of Ewell, and the noble and learned Lord, Lord Elwyn-Jones, to this very useful measure which has been gone into with such care and detail by the noble and learned Lord the Lord Chancellor. It is almost traditional in your Lordships' House when English lawyers rise to address your Lordships on matter of Scots law to say that they do so with the greatest trepidation. That trepidation is as nothing compared with the trepidation felt by mere Scots lawyers when venturing into this area.
Unfortunately, it is a feature of almost every developed system of law that delays are apt to arise and to add to the frustration—and sometimes worse—of ordinary people who for one reason or another are involved in the courts of justice. So it is natural that everyone in your Lordships' House should welcome this contribution presented to the House today towards reducing the law's delays.
Lord Hale: My Lords, I agree with every word that the noble and learned Lord, Lord Rawlinson of Ewell, said. He knows a very great deal more about the matter than I do. For that reason I wondered whether I should even take the opportunity to say this. These questions in one way or another have continued to arise throughout my legal life. The Law Society wrote to me the other day to congratulate me—or felicitate with me—on having completed 60 years of service on the Rolls. My memory goes back to some very quaint legal procedures—even to verdicts being handed down with a pair of tongs.
The county court is a comparatively modern creation. It is a court for the collection of small debts. Had people thought about it to start with, they would know that you cannot collect small debts. I used to have clients who were rent collectors. They got very little for their endeavours but they kept an office on it. In days of moderate prosperity they could make a little living, but in days when unemployment began to grow no one was able to pay those simple debts. A few years ago in Oldham we had generous grocers and other food suppliers, including particularly the Co-op. Although it did not formally grant credit it would never send some poor man away without a little help when he could not pay a bill. No one minded. It was a human system based upon human needs. The same applied to rents. People were not turned out of their houses so brutally because there was always the house next door with a spare room for the victims of an eviction.

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In all this area of small debts there is much the same principle. There is the simple difficulty: if a chap cannot pay, he cannot pay. The idea of shutting him in prison once every six weeks because he has not paid a debt is the most daft and in many ways the most cruel and exacerbating method that has ever been introduced.
The noble and learned Lord on the Woolsack has been very kind to me. Perhaps I have gone a little wide on the county court question, but I think it is a vital issue. I think we are reaching the stage where it has to be dealt with. As the noble and learned Lord knows, I have sat on at least two or three law reform committees—indeed on a dozen, I should think—and have been called upon to judge these matters. We ought to look at the bankruptcy laws. A Question has been put down on that aspect.
We had a passionate desire to grant the right of appeal. In my time it has been extended time after time. The area of appeal is extending. A couple of ships might collide in Chinese waters. They might both be Chinese owned. But whether such a case can be heard here might depend on where the registered office was. We see case after case involving complicated detail, and immensely important appeals are dealt with by the Court of Appeal which it would not have understood when I first started to practise. No one can fail to agree that the standard of the judiciary has risen incredibly. Counsel and others discuss complexities which in our day we could never have handled. We did not even have the machinery in the office to do so. But all that does not get over the matter that we are discussing.
I had hoped that the noble and learned Lord on the Woolsack would have been able to say that we could leave this for a little time, but he says that the need is really pressing. He has reduced his possible appointments from five to three. I should not feel it right to oppose proposals which he has digested and considered and which I have not.
4.19 p.m.
The Lord Chancellor: My Lords, I know that the House wants to get on with its business: I think I should reply briefly to the very welcome speeches that I have heard. I was glad to have the support of my predecessor, the noble and learned Lord, Lord Elwyn-Jones. He is right. I do not think there has been an occasion that I can remember when the actual administration of the courts has ever been a matter of party politics. We all want to achieve efficiency and justice. We do our best to do so even when opinions sometimes differ. I think that the noble and learned Lord probably misunderstood one point in what I originally said. The 12 to 14 months' delay is the period for three judge appeals in the civil division of the Court of Appeal and not the criminal appeals. Some criminal appeals which succeed are appeals against sentence and not appeals against conviction.
I briefly say this about the reforms which I have announced reducing the number of civil servants in the county courts. The only effect of this is in the service of process and the enforcement of judgments. I could give the noble and learned Lord an exposé of the merits of the reforms, but they do not affect the
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order which I am now asking the House to approve, because they do not affect the number of proceedings before the county court and therefore cannot, even indirectly, affect the Court of Appeal.
I was very grateful to my noble and learned friend Lord Rawlinson of Ewell. There is, I believe, no intention on the part of the noble Lord the Master of the Rolls to reduce oral speeches at all. I think that it is helpful to a court to know what the point in a case is going to be, and it reduces the actual time of hearing if the judges are allowed to know that; and his provision for skeleton arguments is, I think, devoted entirely to that.
Of course, I agree with my noble and learned friend on what he said about the necessity for a public hearing wherever possible. There are, of course, the well-known Scott v. Scott exceptions. There is also the point about the value of reporters. I cannot promise my noble and learned friend that we shall not continue to use retired judges. Some of them are of the very highest quality, and sometimes my lips water when I see that they are being taken away by really important private arbitrators at a fee vastly above that which I can offer.
I think that I can endorse what has been said about the quality of the judiciary. During my professional lifetime, which does not go back quite as far as that of the noble Lord, Lord Hale, the quality of the judiciary has improved as a whole almost out of all recognition.
I would quite endorse what was said by the noble Lord, Lord Mishcon, and what was said by the noble and learned Lord, Lord Wilson of Langside, from the Scottish point of view. When I have had the pleasure of listening to Scottish counsel in the House of Lords, I have always been immensely impressed by their quality, though their numbers are approximately those of the Wales and Chester circuit; but they manage to keep up the quality extraordinarily well, with a very high degree of learning and skill and professional standards of all kinds. Having said that, I should just like to thank all noble Lords for the generous welcome that has been given to the Motion.
Lord Morris: My Lords, I should like to ask my noble and learned friend the Lord Chancellor about one point, for clarification, which I believe is important to the layman and which I at least find extremely puzzling. Can he give me in general his view as to why there has been such an astonishing increase in civil litigation coming before the Court of Appeal since, say, the war?
The Lord Chancellor: My Lords, one obvious point is that the population has very largely increased in numbers. Another factor which one must bear in mind is the number of personal injuries; there has been an increase in the number of accidents. There is a third point, which is very difficult to formulate, but if there is arise or a fall in prices, one will find that litigation in contract increases enormously. If prices are steady, most of the sale of goods cases tend to disappear, but if there is a sharp change in prices in either direction, the number of civil claims increases.
Lord Elwyn-Jones: My Lords, may I be permitted to add that legal aid is an additional factor.
The Lord Chancellor: My Lords, I am greatly obliged to the noble and learned Lord. Of course, I ought to have remembered that point.
On Question, Motion agreed to.

Housing: Structural Safety
4.24 p.m.
Lord Bellwin: My Lords, with the leave of the House, I wish to repeat a Statement made in another place by my honourable friend the Minister for Housing and Construction. The Statement reads as follows:
"On 7th September 1982 my honourable friend the Member for Tonbridge and Mailing announced a scheme of financial assistance in the form of repairs grants or repurchase to owners of Airey houses which had been sold by public bodies and which had subsequently been discovered to be subject to serious defects or potential defects. On 8th February he told the House that he had asked the Building Research Establishment to study possible deterioration in other types of prefabricated reinforced concrete houses built before I960. The establishment is publishing today an Information Paper summarising its findings of separate reports on six of the most common types—the Boot, Cornish Unit, Orlit, Unity, Wates, and Woolaway designs. A copy of the Information Paper has been placed in the Library.
"The Building Research Establishment has found that the reinforced concrete components in all six types are gradually deteriorating as a result of carbonation of the concrete and, in some cases, the presence of high levels of chloride, leading to corrosion of the steel reinforcement and consequent cracking of the concrete. The great majority of the houses studied were found to be in structurally sound condition. There were significant differences in the rate of deterioration both between and within types. Some cracking was found in all the types and the nature of the process is such that deterioration will continue, although in some cases very slowly. All houses of these types will eventually be affected by cracking. Cracking in a proportion of houses will not occur for some years, and a few houses may not display any evidence of deterioration for the next 30 years or more.
"No conditions were found which were structurally unsafe. Risk to stability would be preceded by visible serious cracking in Boot, Cornish Unit, Wates and Woolaway houses. In Orlit houses, concealed main and secondary beams should be inspected now, if this has not been done already following the department's letter to local authorities of 2nd September 1982. Concealed columns and steel bracing in those Unity houses which have plasterboard or other dry lining should be inspected within the next year. Where serious cracking is present, professional advice should be sought.
"The processes of carbonation and attack by chlorides are likely to affect all prefabricated reinforced concrete houses built before 1960. There are about 170,000 of these houses in the United
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Kingdom which were built by public bodies. Approximately 16,500 have been sold, mostly to sitting tenants.
"I stress that the Building Research Establishment's studies are only of prefabricated reinforced concrete houses. The conclusions carry no implications for houses of non-traditional design which use other load-bearing materials.
"Private owners will find themselves in a difficult position as a result of the effect of these findings on the value of their houses. The Government have decided to introduce early legislation to provide a scheme of assistance to private owners of houses sold by the public sector and since found to be defective or potentially defective. This will be on lines which are broadly similar to those of the scheme for owners of Airey houses which is already in existence.
"The essential feature of the proposals will be a right of assistance. This will arise where the Secretary of State determines that houses of a particular category built by a public body should fall within the scheme because he is satisfied that, as a result of their design or construction, they suffer from, or can be expected to suffer from, structural defects not discoverable by normal survey at the time they were sold, and which have resulted in a substantial loss of value in real terms as compared with the value at purchase. In respect of these houses local authorities will be under a statutory duty to assist either by way of a repairs grant or repurchase.
"A grant of 90 per cent. of eligible expenses on repairs is intended to be the main form of assistance. But there will be cases in which repair will be uneconomic, or will not give the house a further useful life of at least 30 years, or will still not make the house mortgageable in the private sector. There will be other cases in which there would be hardship for the owner if repair were the only form of assistance possible. In these cases we propose to lay a duty on local authorities to acquire the dwellings if the owner wishes. Owners will receive 95 per cent. of the defect-free value of the house.
"We have in mind that the scheme should apply to all types of prefabricated reinforced concrete house built before 1960. However, no final decisions have been taken on the initial coverage of the scheme and the BRE is studying six further types to supplement its findings.
"In addition to the mandatory scheme, local authorities will be given a discretionary power to assist owners of defective houses which meet these criteria, but in respect of which the Secretary of State has made no order requiring the local authority to give assistance. This power will enable local authorities to assist where there are local problems.
"The local authority associations will now be consulted about these proposals. I will be asking them to comment before 16th December on a consultation document which is being sent to them today; a copy is being placed in the Library. A Bill to give effect to these proposals in Great Britain will be introduced as soon as possible thereafter. Separate legislation will be introduced for Northern Ireland.

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"The need for expenditure by individual local authorities on this scheme, and on defective houses remaining in their own stock, will be taken into account in determining their housing investment program me allocations.
"The BRE has also studied the Smith house, which uses a different system of construction. A detailed report will be published next month. I shall be considering whether local authorities should be under a duty to give assistance to private owners of that type of house.
"The department is writing to local authorities to inform them of the BRE's findings and of the proposals for legislation. Copies of the letter to local authorities and a table giving figures of prefabricated reinforced concrete houses in each local authority area have been placed in the Library.
"The Scottish Development Department and the Welsh Office will be writing in similar terms to local authorities there. The Scottish Development Department will also be writing to the Scottish Special Housing Association and will be holding consultations with the Convention of Scottish Local Authorities.
"Mr. Speaker, I apologise to the House for the length of this statement and for the fact that the texts of the seven separate reports which have only just been finalised are not yet available for publication. But I wanted to make a Statement just as soon as possible. The reports will be published very early next month, and will be sent to local authorities with a request that they be passed on to private owners of these houses in their areas".
My Lords, that is the end of the Statement.
4.32 p.m.
Baroness Birk: My Lords, may I thank the Minister for repeating the Statement. We naturally welcome the extension of assistance to the categories that he mentioned. However, I would point out that some of the worst houses were built after 1960 and are not subject to these proposals; for example, Bison and the BISF houses. Can the Minister say whether there are any plans for these? By restricting the legislation, as paragraph 6 of the Statement states, to provide assistance for owners of houses which have been sold to those owners by the public sector, it means that council house tenants are completely excluded. Most of these houses are in local authority ownership. The quantification of the problem on a national basis is 500,000 houses with repair bills amounting to around £5 billion. This is the result of an AMA report which I am sure is well known to the Minister. Does not the Minister agree that this will have devastating effects on council house rents, as local authority houses are not going to be helped? Is it not unfair to ask council house tenants to bear this burden?
I notice that paragraph 12 of the Statement says that the need for expenditure on defective houses will be taken into account in determining housing investment programme allocations. But during the period of this Government housing investment programme allocations have been cut by 60 per cent. In view of public expenditure cutbacks in the past and those that we unfortunately fear in the future, in which housing
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has always been an outstanding sufferer, will this be fully covered in determining HIP allocations in order to permit the carrying out of very necessary repairs and the rescue of very great deterioration?
I see that paragraph 7 states that in respect of certain of these houses,
"local authorities will be under a statutory duty to assist either by way of a repairs grant or repurchase".
Can the Minister enlarge on that? I take it to mean that the local authorities, come what may, have to find money somehow. With all the restrictions on local authorities, how will they do that? I am sorry about all these questions but the Minister said that it was a long Statement.
Paragraph 8 states:
"There will be other cases in which there would be hardship for the owner if repair were the only form of assistance possible. In these cases we propose to lay a duty on local authorities to acquire the dwellings if the owner wishes".
I do not understand which are those cases. It is not clear. How are local authorities to find the funds unless these are completely covered in their Housing Investment Programme allocations? If not sufficiently financed, it must mean that council house tenants living in these properties will only be able to get a grant to resolve these defects if they have purchased them. They will have to purchase the house in order to get the defects corrected. This is a financial and social squeeze that will be extremely painful.
Although the Statement says that the defects, at the moment, are not structural, if the defects are allowed to remain and deterioration goes on, then they could become structurally unsafe and continual neglect could lead to danger—a danger to health and the risk of some accident that would affect the occupants of the houses.
Lord Beaumont of Whitley: My Lords, I, too, should like to thank the Minister for repeating the Statement. I congratulate the Government, on the whole, for the speed and the thoroughness with which they have tackled this problem. The only question that I wish to ask follows along the same lines as that put by the noble Baroness, Lady Birk. On the question of refunding expenditure, the position of local authorities financially, in this field as in others, as noble Lords will not need reminding, is not a happy one at this moment, and the prospects for the next year are not happy. It is good to know that large proportions of the expenditure will be met centrally and also that, according to the extremely vital paragraph 12, the need for expenditure will be taken into account in determining housing investment programme allocations. It is clear that when the Minister consults the local authority associations, one of their requests will he for 100 per cent. help in this matter. It is possibly what they should have. Have the Government considered this? If so, why have they rejected it?
Lord Bellwin: My Lords, I thank the noble Baroness, Lady Birk, and the noble Lord, Lord Beaumont, for what I think were their helpful and constructive comments. I should like to try and pick up the points that they made. The noble Baroness was concerned about houses built after 1960. Who knows what the future will bring as to that? But the report in

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question refers to those built prior to that time. I would not want today to start casting the mind ahead. The problem is big enough as it is. It will have to be resolved over many years, I suspect, in the generality of all the houses to which I have referred.
I was aware of the AMA's £5 billion figure, Of course, I cannot comment upon it. I do not know how far it is right or wrong. I suspect, like many things, that there is an element of truth in what it says. It is a possibility but I would not want to be anything like so pessimistic myself. I should perhaps try to pick up a point that the noble Baroness made about Bison. As she knows from what was contained in the Statement, this scheme only covers dwellings that suffer from or can be expected to suffer from structural defects or potential defects resulting from their design or construction and which were not discoverable by normal survey at the time of purchase. I have no reason to believe that this is true of any dwellings nationally other than those built before that time although, as I have already said, this is something we shall have to look to for the future
The noble Baroness referred to the cut in the HIP allocations over a period of time. That is a fair comment except that there is just around now about the same percentage of cut that took place over the period of time of the previous Administration. That is so, if the noble Baroness checks. In any case, that is not really the problem with which we are faced today. The point is the one to which the noble Lord, Lord Beaumont, referred. That is the mention in the Statement of two things. One is that we obviously have to consult the associations about this. Secondly, it is intended to take this into account when making the HIP allocations. This will be a matter for discussion with the associations.
The noble Baroness asked how the local authorities will find the money for repurchase in view of all the difficulties. In that respect I have to bring her back to the sum of £6 billion in capital receipts currently in the hands of local authorities from the sale of council houses. So while there may well be problems—indeed, there are problems, as is apparent from the other factors that have been mentioned—for the authorities, I should have thought that the least of them would be the cash to repurchase. However, we shall see how that comes out in the consultations.
I am sorry if I did not quite follow the point made by the noble Baroness about the need for tenants to get grants to carry out defect repairs. Where tenants are in situ it is a basic problem for the authority itself. That in turn comes back to their HIPs and other resources, which will be part of the matters which they will surely want to raise in the consultations.
I hope that I have covered the initial points that have been raised. I recognise that this is a very unhappy situation for everyone to have to deal with. But I am grateful to the noble Lord, Lord Beaumont, for his comment about the Government feeling that we ought immediately, at the earliest moment, to face up to exactly what is happening. There are many people who are very anxious about this situation. It is proper that we should not delay at all, at least in starting something going with a view to taking action as quickly as possible.
Baroness Birk: My Lords, the Minister did not answer the question which I asked as regards clarification about the Statement. At the bottom of paragraph 8 it says:
"In these cases we propose to lay a duty on local authorities to acquire the dwellings if the owner wishes".
It is not at all clear in which cases they are going to do so, or in which cases they àre under a statutory duty to assist by way of repairs grant or repurchase. Indeed, the money that they have obtained from selling houses will not be all that help on the capital account when they are faced with revenue expenditure to deal with the houses themselves. I still think that it is very sad for the local authorities. I hope that when the consultations take place the Government will take note of the situation. The local housing associations have already raised this matter at the Housing Consultative Council meeting, and they have got absolutely nowhere.
Lord Bellwin: My Lords, obviously I cannot comment on what took place at the last council meeting. The duty to re-acquire will apply where the repair is unlikely to give a mortgageable product. That is essentially what the Statement is saying. It may well be that this will have to be brought out in discussions with the associations when we sit down and talk about it with them.
Lord Stoddart of Swindon: My Lords, is the noble Lord the Minister aware that, while I and certainly many other people will be grateful for the assistance which is to be given to private owners, nevertheless we are considerably worried about the enormous burden that repairs will place on local authorities and, indeed, the tenants? I have it in mind—and the noble Lord has much experience of this—that many of these houses were built and purchased by local authorities at the behest of central Government. Indeed, central Government actively campaigned for and actively promoted these houses. I believe, therefore, that they have a duty to the local authorities to finance the whole of these repairs. If they do not do so, I fear that the local authorities themselves will be under great burden and great pressure; and particularly, of course, their tenants.
Lord Bellwin: My Lords, I am grateful to the noble Lord for his observations, with which in many ways I agree. I personally was on the receiving end of similar situations, but I must hasten to add that it was post-1960, though only just. When we begin to look at where the responsibility lies and to question who should put up the resources, we venture into very sticky territory. Certainly central Government have a part to play, for the reasons that I know, and local authorities also have a role in this whole matter. It would be wrong to say other than that were so. But it probably does not help us today to press on with this matter, other than to take up the point which the noble Lord was making about how much central Government should pay. That will have to come out in the discussions that will take place. I cannot help the noble Lord by expanding on the matter further at present, as I am sure he will appreciate. The point he makes is fundamentally valid. However, there is another aspect to it which will have to be weighed in the balance at the end of the day.

Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1983
4.46 p.m.
Lord Skelmersdale Lord Skelmersdale rose to move, That the draft regulations laid before the House on 25th July 1983 be approved.
The noble Lord said: My Lords I beg to move that the draft Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1983, which were laid before this House on 25th July, be approved. I trust that it will be convenient to your Lordships to discuss at the same time the Scottish Motion, concerning the draft Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Regulations 1983 in the name of my noble friend Lord Gray of Contin, which were laid before this House on 27th October.
These two sets of regulations, which are laid under powers contained in Section 87 of the Local Government Planning and Land Act 1980, provide for a number of changes to the fees scheme which was first introduced in April 1981 and amended in June 1982. They update, supersede and consolidate both the original regulations and the amending regulations of 1982. The changes which the new regulations introduce follow the review of the workings of the planning fees scheme which my noble friend Lord Avon announced when speaking to last year's regulations.
I think it would probably he useful to give the House a brief outline—and I promise that it will be very brief—of the way in which the fees scheme works, in order to put the changes into context. Any applicant who seeks planning permission must, when making his application, pay a fee to the local planning authority. The fee is a contribution to the costs of handling an application. The fee is prescribed by the regulations and it cannot be waived or refunded. There are however concessions to deal with specific cases where normal fees would be unreasonable. Subject to that, applications are charged according to the factors which determine handling costs, the kind of development proposed and its size where this is relevant. The scheme is designed to achieve: a fair balance between the categories of development; fees which broadly reflect handling costs; no discouragement of sensible planning applications; and simplicity of operation and clarity about the fee payable.
In our review, we invited comments on how the scheme was working from over 140 organisations. But we made clear that the principle of charging for applications was not under review. Over 180 bodies or individuals replied. In the main, local planning authorities preferred simplicity and were against major changes. Developers and interest groups argued, understandably perhaps, for more concessions and thus for more complexity.
We have tried to balance these conflicting demands and have looked very carefully at constructive suggestions made to us. There was however no general call for a radical restructuring. The overall shape and the degree of detail in the scheme is broadly right, we
982
found, and it is working reasonably well. The scheme is now well established and does not, as some feared, seem to impose any great burden upon either applicants or planning authorities. After her supplementary question to me last week—actually, my Lords, I think that we can forget this part of my speech. I was going to refer to the noble Baroness, Lady Birk. However, since I am digressing somewhat from my speech I should like to welcome the noble Lord, Lord Graham, to the Front Bench to assist us in our debates on these particularly technical subjects.
One of the results has been more informal discussion of applications before they are submitted formally, and planning officers often help applicants to get proposals right first time so that the fee is not spent on an unsuccessful application. This may have contributed to the speeding up of the handling of applications which I reported to the House last week.
The most important change in the draft regulation is an increase of 7 per cent. in the overall level of fees. As last year, this increase does no more than take account of inflation over the period since the previous increase in June 1982. Fees will continue to offset something like 40 per cent. of the total estimated expenditure on development control, which is currently of the order of £70 million to £75 million per annum in England and Wales.
Depending on the future levels of applications—and of course on their average size—the yield from fees at the new rate in a full year is estimated at between £28 million and £30 million. Our best view of next year's likely income will of course be reflected in the calculation of rate support grant for next year. I am pleased to say that the initial problem of a shortfall in fee income in comparison to rate support grant assumptions, something which noble Lords discussed at some length during last year's debate, has not arisen again this year. The prediction of fee income for 1982–83 of some £27 million, which my noble friend Lord Avon made during that debate, has, on our best present estimate, proved to be an accurate one.
The remaining changes aim at refining the scheme. Last year my noble friend undertook to consider what more might be done to meet the problems of glasshouse growers. Even with last year's discount for agricultural buildings, the fee for the typical one acre or more glasshouse has been considered by many in the industry to be excessive and unjustified in terms of local authority handling costs. We were persuaded by these arguments, and I am therefore pleased to announce a special new category of fee for glasshouses—including the polythene tunnels which are often used. The fee will be a flat rate £280. Glasshouses below 465 square metres in area which need specific planning permission will continue to be exempt from fee. As a one-time member of the horticultural industry myself, I am sure that this concession will be welcomed by commercial horticulturists everywhere.
Another very desirable change concerns works to adapt a disabled person's dwellinghouse. At present, there is a limited exemption on works for a property occupied by a disabled person. We have extended this exemption to applications where the disabled person has not taken up residence in the house concerned, thus covering cases where alterations are needed

983
before he or she can live there. There is also an entirely new exemption for works to improve disabled people's access to buildings in public use, such as shops and cinemas. We hope that these concessions will help further to improve the position of disabled people in the community.
We have also been concerned to remove anomalies and difficulties in the fees scheme itself. There are a number of small changes to this end, and in view of their highly technical nature I will confine myself to a summary of their main features rather than attempt a lengthy exposition.
We propose an exemption for an applicant who applies to amend his plans after they have been approved within one year of receiving planning permission. We propose to halve the normal rates of fee for applications made by parish councils, to reflect their special position as a tier of local government. Where development straddles a planning authority boundary, we propose a lower maximum fee than would normally arise, to avoid penalising applicants for accidents of geography.
We propose to clarify the present regulations for advertisement applications by specifying that the fiat-rate fee (which will be £47) applies to the whole site covered by the application, to avoid the problems of defining the "site" which have arisen in the past. Where the outdoor storage of minerals and spoil needs planning permission, we propose a sliding scale of fees to replace the current flat rate of £44, since these applications mean a good deal of work for local planning authorities.
We propose a flat-rate fee of £47 for the renewal of temporary planning permissions for temporary buildings instead of the existing exemption, unless the application is made within 12 months of the original permission. And, finally, we propose to simplify the rules governing the fee payable for seeking approval of the details of a development which has already received outline planning permission.
I now turn to the position in Scotland. Consultations on the operation of the fees system there gave rise to conclusions which were very similar to those of the review to which I have already referred. Thus the Scottish regulations are much the same as those for England and Wales, with some very minor differences to reflect different circumstances north of the border.
In both countries there were of course a good many other suggestions for changing the fees scheme. Some of these seemed at first to be attractive, but on closer examination turned out not to fit in with one or more of our guiding principles. A sliding scale for changes of use, for example, was one such idea, which we concluded was simply not practicable.
A concession for charities and voluntary bodies was another possibility which we looked at with particular care, together with a concession for applications made by small firms. We believe however that the nature of the application, not the applicant, is what should count in the calculation of fees.
In reviewing the scheme and preparing the detailed changes in these new draft regulations we have not been concerned to maximise fee income. We have
984
instead looked with an open mind at every representation and suggestion made to us, and we will continue to do so as we monitor the scheme in the future. Our aim will be to maintain the right balance between fairness to the applicant on the one hand and administrative simplicity on the other, while continuing to safeguard the overall aims of the scheme. My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 25th July 1983 be approved.—(Lord Skelmersdale.)
4.57 p.m.
Lord Graham of Edmonton: My Lords, I should like to begin by acknowledging with appreciation the remarks of welcome made by the noble Lord to me for the post that I now hold for the Opposition. It is an honourable post and one that I am proud to hold. I very much look forward to taking part in debates on matters which relate to the environment. I am almost tempted to say that I have been here before. I have not been at this particular spot before, but I have certainly been here before with regard to the issues which we are now debating, because I served as a Member of the Standing Committee of another place on the Local Government, Planning and Land Bill, and I also raised this particular point on the Floor of the House of Commons when the matter arose in 1981 and 1982. Of course, I have had the opportunity of reading the exchanges in another place.
I certainly appreciate the care and the attention which the Minister has given to these regulations. He has given a very full explanation in detail, something which I certainly do not propose to do at this stage. In another place my colleagues raised a fundamental difference as to why fees ought to be charged at all because Members of the Opposition take the view that planning is a community obligation. This is a system that has served this country very well for 150 years. The purpose of planning restrictions is to protect the community generally. The planning system is not a service for individual applicants, but is designed to benefit the community as a whole.
The Minister alluded more than once to the basic raison d'être for the action of the Government, which is to reduce central Government expenditure. In effect, at the end of the day, when one looks at the level of charges, what is happening is that those who apply for planning applications are paying for a service which hitherto had been paid for either by central Government or partly by central Government and partly by local government in the rate support grant. The Minister must be aware from following the procedures of colleagues in other departments that this is an insidious situation.
Once one begins to adopt the policy that a service is provided by the community for which there is a need and demand and for which people will have to pay if they need the service—and the situation here is that people who need to build, to extend, or to change the use of the building need that permission and, therefore, the Government have said that if there is a need they are to pay towards it—where will this Government stop in that procedure? We all know that where other services have been provided as a

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right—for instance, meals on wheels or home helps—the Government have decided to charge for them. They have decided to make charges in this particular field. What other council services, which hitherto have been provided to the community as a basic right, will the Government examine? The House and the country ought to be well aware that in this particular instance the Government are yet again shifting the burden of a need from the central Exchequer on to either the local exchequer or the individuals.
I was interested in the words of the noble Lord. I am reassured that the difficulty in the earlier years has been overcome. Without looking at the statistics, I can remember the authorities getting hot under the collar when the rate support grant negotiations took place in the early years because of an assumption that the charges would bring in a certain figure. I think that the figure of £38 million was estimated to be brought in, yet at the end of the first year only £25 million was brought in. As a consequence there were £13 million which the authorities had then to find from some other source of income, or some other charge.
Is the Minister saying that it has been possible to work out a procedure based upon experience which indicates that when this is a matter of the rate support grant discussions, the estimate which will be taken into account as income from fee charges is, as near as makes no difference, equal? In other words, there will not be a shortfall whereby the ratepayers will have to make up the difference? If that is what the Minister is saying, then that as a major point of change will be very welcome indeed.
The Minister indicated that a fundamental review had taken place, consultations had taken place, observations had been made, and he was satisfied that although the general principle of charging was not at issue, some tidying up had taken place. So far as the AMA is concerned that, while there may have been changes which removed anomalies, the changing of the regulations to remove the anomalies has simply meant that there has been an increase in the complexities.
May I give to the House and the Minister the illustration which the AMA have given to us:
"Examples of the additional complexity introduced by the new regulations include the amendment to enable applications submitted by parish and community councils to be charged at a special half rate and the introduction of a new 'free go' for minor amendments to proposals for which planning permission was granted within the previous 12 months".
The Minister gave the House a careful explanation that these were benefits. The AMA tell us:
"Changes such as these will inevitably create more confusion on the part of applicants and increase the burden on local planning authority staff at a time when councils are being urged to determine applications more speedily and reduce current expenditure".
The Minister knows as well as I do that when the AMA speak so positively they can only do so because that is the advice given to them by the planning officers and departments whose views have been canvassed. If this is what local authority planning departments are saying, what is the Minister doing either to refute or rebut, or to try to take into account the problems which the planning departments see?
In a previous manifestation I served on the London Borough of Enfield council. From time to time I made
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contact with the officers to ask for their views on legislation going before Parliament. On this occasion I sought the views of the deputy planning officer of the London Borough of Enfield, Mr. Bill Issitt, who is a fair-minded man. I am glad to tell the Minister that after three years he finds that the problems that they anticipated have not arisen as they expected at the time, and they are satisfied that the system is working well, provided that any shortfall in rates or income which they were worried about is actually made up.
Would the Minister care to comment on these statistics? In the year January to December 1980, which was the year before the regulations came into effect, there were 2,400 applications to carry out development of all sorts, and 40 applications for formal determinations. The Minister appreciates that the formal determination request is one whereby an applicant wants to know before he submits an application whether in actual fact it needs a planning application at all. In the year before there were only 40. In the year January to December 1981 there were 1,970 applications to carry out development of all sorts, and 600 applications for formal determinations.
We can understand a shortfall from 2,400 to 1,970 applications, because a number of people would decide that they were not going to apply if in actual fact they needed to pay a fee. But the astounding increase from 40 requests for determinations to 600 requests in the London Borough of Enfield indicates that a great deal of council officers' time is being taken up by applicants who say, "On the margin". The Minister is aware of the changes in the general development order, the increase from 10 per cent. to 15 per cent. in permitted development, and a range of other things. It is quite clear that before spending £20, £22, £24, £40, £44 or £47, people are going to say, "Before I spend the money I am going to take up the time of the council officer to say, is it worth it?".
Not only were the figures like that, but they went from 40 determinations in the year 1980 to 600 in 1981 and 840 in 1982. If the Enfield experience is a common experience with other authorities will the Minister appreciate that, although one gets the figures right in respect of the cost of the applications, it still means that by virtue of this system there is a burden placed upon council departments where they have to service situations of that kind?
Accepting that we are opposed to the principle of charging, suppose that instead of having a system which takes £20, to £22, to £24, the planning officer has said, as a suggestion, that it would be much better if in fact the increases went from £20 to £25, and £25 to £30. He is not asking that every year there would be an increase of £5, but he is asking for ease of understanding. Forty-four pounds was an awkward figure; £47 is an equally awkward figure. If one could say that the increases were going to be for two years and they went from £40 to £45, and there might be two more years when it went from £45 to £50, that might be easier to administer.
So far as we on this side of the House are concerned we wonder why the Minister decides on 7 per cent. Am I to understand the Minister to say that that was the best estimate for equalising the inflation rate over the past year or the next year? If 7 per cent. was simply

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shot at a figure that could be borne, then we think there ought to be a better means of deciding on the uplift. So far as Members on this side of the House are concerned, we still repeat that we are opposed to the principle, but we are satisfied that in the generality local authorities are having to live with a situation which is costing them a considerable amount of money.
5.8 p.m.
Lord Beaumont of Whitley: My Lords, I am fortunate enough to be the first to be able to congratulate the noble Lord who has just sat down on taking up his duties on the Opposition Front Bench. We certainly look forward to hearing from him quite a lot in the future, as no doubt we shall.
These regulations are a considerable improvement. For the second time this afternoon I should like to congratulate the Government on the way in which they have dealt with this matter, on the whole. My colleagues were not in agreement with the idea of charging, any more than were the Opposition Front Bench. However, since we have this charging system I think that the Government have gone a long way to try to make it work and to make it suit the position.
One particular problem which they have not taken up, or at least not in the regulations—and I was not certain whether or not the noble Lord, Lord Skelmersdale, was referring to this in his opening speech—is the problem of fees for change of use applications. The fee for these is a flat fee. It does not seem in any way to affect the complexity of the various matters with which the authorities have to deal, It may deal with anything from the change of use of a small shop to the conversion of an enormous factory into a do-it-yourself store. A scale of charges would in this case surely be more equitable, and could be introduced without making the scheme unnecessarily complicated.
I realise that, as has just been said, there is a problem here of balancing fairness with simplicity, and obviously the answers to the particular problems which arise will not come down on the same side in any particular case. I should have thought that in this particular matter there was a little too much simplicity and a little too little fairness. Perhaps the Government will have another look at this before they change the rates again, as no doubt they will in due course. This is a highly complex matter. I do not think that this is the time to go into it in very great detail. The Government quite clearly are trying to get this right and have gone a long way towards doing so.
Baroness Masham of Ilton: My Lords, before the Minister replies, I should like to thank him and the Government for their statement about the regulations for the disabled. I would say that they do need studying, and would thank him for what he has said.
5.12 p.m.
Lord Skelmersdale: My Lords, I am grateful to both noble Lords and to the noble Baroness who have spoken today. I must say that it was an exciting opportunity for me to hear the maiden speech of the noble Lord, Lord Graham of Edmonton, from the
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position he now occupies. I must say that if it is his normal wont to answer his own questions, then I shall have a very much easier life than I expected when I read of his previous experience in another place.
I am sorry to see that some noble Lords—the noble Lord opposite notwithstanding—are not yet reconciled to the principle of fees. As I said at the beginning, the charging of fees for planning applications is not in doubt. It is the law of the land and has been so since 1980. The debate today, as the noble Lord recognised, has nothing to do with changing that law but to do with the level of fees and the detailed provisions of the fees scheme.
We have today had an interesting short debate. As the noble Lord, Lord Beaumont of Whitley, has said, these are highly technical matters of planning law and procedure. If I do not get all the answers right, perhaps I may be allowed to write to noble Lords. Many of the points that were raised were given very' careful consideration during our review. I have explained why the new fees scheme takes the form that we propose and the reason why many of the interesting ideas and suggestions have not stood up to the scrutiny that we gave them. We are very much concerned to identify any further improvements in the scheme and to test them against the scheme's underlying principles. It was a totally new experience to evolve this particular scheme. It was bound to take a little time to get right. I am glad to say that we are making very great progress. I hope that ideas will continue to come to us from all those with an interest in the planning system.
The noble Lord, Lord Graham, disliked not only the principle of the scheme (which, as I have said, we are not discussing) but in a sense the rationale behind the drawing up of the scheme—which I found extremely difficult because it is Government policy, and has been so since 1979, that it is right that users of any particular service, whether provided by local or central Government, should contribute in some way towards the cost incurred. In this case, as I have said, the sums of £70 million to £75 million are not inconsiderable.
Secondly, the fees are at a modest level, well short of processing costs, and there is no evidence that they act as a deterrent to development. Indeed, the noble Lord quoted figures which said that development was definitely going on. I found those figures extremely interesting. I would suggest that the noble Lord has a word with his noble friend Lady Birk, who thinks it an excellent idea that an informal approach should be made to the planning officer before the application is submitted. I can tell him that, in my view, at least, this is the reason why the formal application figures have gone up so substantially.
Lord Graham of Edmonton: My Lords, I would agree that the informal approach is an excellent idea. But the financial consequence and the costs of the council in providing officers for the informal consultation are a different thing. If a person is hesitant about whether he is going to need planning application or not, or, even more insidiously, he may want to avoid having to apply at all, then, of course, an hour of the council officer's time will satisfy him that he should or should not apply. At the end of the day, if he decides that he is not going to apply, there is no statistic

989
appearing anywhere, except for the hour of the council officer's time, which has to be paid for.
While on my feet, may I say to the Minister that if the philosophy is that anyone who uses a service should be expected to pay partly towards it, what about a service like housing? If an applicant for housing is going to use that service, is he expected to have to pay partly towards it? There is also the case of the applicant for the use of education facilities; that is, the child who is going to school from 5 to 11. If the philosophy is, in generality, that because you are going to use a service you are expected to pay for it, that is a dangerous precedent.
Lord Skelmersdale: My Lords, what I was trying to point out, in answer to the second part of the noble Lord's intervention, was that all these things are being looked at and nothing can be regarded as sacrosanct. That is as far as I was going at that moment. As far as the first part of his intervention goes, he has forgotten what I might call the opportunity cost—which is that if the application finally goes through and is a partially-charged-for application, there will be some saving in time. This will be balanced to some extent—although I take the noble Lord's point that it may well be that we have not got it right—by the fact that a preliminary investigation causes the potential applicant not to apply.
So far as the £13 million deficit is concerned, as I have said, this has been sorted out; but I am quite confident that should there be any small shortfall, or indeed any excess, this will be taken into account in the next year's rate support grant figure. The noble Lord spoke about the added complexities of parish councils. I fail to understand why it should be difficult to charge half the fee. It is just another stroke on a piece of paper. I would say that the Government had no such representations from the Association of District Councils. So far as the "free go" is concerned, in the new regulations this follows the same rules as in the existing ones. The noble Lord suggested block leaps (if I might so describe them) in fees from 75 to 80 or whatever it happens to be. I can just imagine the remarks that he would make were we to do it in a period of low inflation. He would wrap the argument round our necks in no time at all; so that I do not terribly approve of that suggestion.
The noble Lord, Lord Beaumont, spoke about charges for changes of use. I think there is no reasonable basis on which to devise a sliding scale because the individual changes are inevitably of a very disparate nature. There is no way in which we can focus upon particular points on a scale on which to slide. I will look into what the noble Lord has said and give him a more considered reply.
On behalf of my department and the Scottish Office, I welcome all sensible proposals for making the regulations better and fairer. While I hope it will not be necessary to promote new regulations in this House too often, I can undertake that all suggestions will be fairly considered. Before I depart with this set of orders, may I say to the noble Lord, Lord Graham, that the 7 per cent. about which he asked is our best estimate of inflation over the 17 months between the two sets of orders.
On Question, Motion agreed to.

Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Regulations 1983
5.20 p.m.
Lord Skelmersdale Lord Skelmersdale rose to move, That the draft regulations laid before the House on 27th October be approved.
The noble Lord said: My Lords, on behalf of my noble friend Lord Gray of Contin, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the draft regulations laid before the House on 27th October be approved.—(Lord Skelmersdale.)
On Question, Motion agreed to.

Prohibition of Female Circumcision Bill [H.L.]
5.21 p.m.
Lord Kennet: My Lords, I rise to move that this Bill be now read a second time. The House sat until a quarter to two last night, and it has already had this Bill before it and passed it through all its stages during the last Parliament. The election supervened before it could get beyond First Reading in the other place. The Bill therefore fell and it has to be reintroduced into this Parliament if it is to become law. Because of the late sitting last night, and because the House already knows all about it—it is all on the file in Hansard— I shall be extremely brief in reintroducing it and I would appeal to my noble friends from all quarters of the House who are supporting the, Bill to be as brief as I know they want to be.
The Bill prohibits an atrocious practice which is customary in certain parts of Africa and West Asia and which has now appeared in this country. I will not harrow the House again by describing it. It is without any religious justification anywhere in the world, including the countries where it is endemic. It is a customary practice and no more.
The practice itself is clearly discouraged and disallowed by the World Health Organisation, so far as it is able to go, and there are programmes financed and helped by the WHO throughout the world to exterpate it by persuasion and education. This particular Bill, which of course applies only to the United Kingdom, has the backing of the following bodies: the British Medical Association; the Royal College of Nursing; the Royal College of Midwives; the National Council of Women; the National Federation of Women's Institutes; the Association of Mental Health Visitors; the Medical Women's Federation; the Anti-Slavery Society; the Roman Catholic Feminists; the Josephine Butler Society; the Minority Rights Group; and the Fawcett Society. The unreserved backing of the Royal College of Nursing and the Royal College of Midwives is striking, and has been throughout.
It remains for me to say a word about the attitude of the other two relevant Royal colleges, the Royal College of Surgeons and the Royal College of Obstetricians and Gynaecologists. The Royal College of Surgeons say, "This is not really our affair and we will take a back seat to the Royal College of Obstetricians and Gynaecologists in the matter". The Royal College of Obstetricians and Gynaecologists

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have made a statement to the effect that the college gives its full support to any measures which will help to eradicate what it regards as a repugnant and unnecessary procedure.
The last time the Bill was going through the House the Royal College made known to me, as its sponsor, and to the Government—to the Ministry of Health, as their sponsoring department—certain reservations about the reporting procedures which were written into the Bill at that time. The Bill, as it was presented last time, required that all operations, as defined in the text of the Bill, would have to be the subject of a report by two medical practitioners. That would in fact have caught 8,000 or 10,000 perfectly legitimate operations, mainly for cancer and pre-cancerous conditions, and in view of the representations from the Government, and on the basis of what the Royal College of Obstetricians and Gynaecologists have said, I have reduced that in the Bill as it is now presented to a report by one general practitioner. So the operation would now be okay simply on the say-so of one general practitioner.
It may be that what follows in the rest of the Bill is capable of improvement: indeed it would be very strange if it were not. I will just remind the House extremely briefly of what is in it. Clause 1(1) says, "You must not perform this operation". Clause 1(2) lays down the penalties you will incur if you do. Clause 2(1) says that you may do it provided that it is for the physical health of the patient. Clause 2(2) says that it must also be done in a hospital or nursing home. Clause 3 says that the Secretary of State shall make regulations to provide for the opinion of the GP to be notified and recorded, and that he shall make penalties for failure to do that.
That is really all I have to say. I know, because the Minister of Health has been courteous enough to discuss his intentions with me, that the Government intend to promote amendments on the Committee stage of the Bill; and I will leave it to the noble Lord, Lord Glenarthur, to tell the House whatever he thinks fit about what those amendments are likely to be. I will simply say, as I have told him, that I am more than willing to co-operate in putting these amendment to the House. It may be that I shall be able to recommend them all, but perhaps there are one or two where I would prefer to stand back and leave it to the judgment of the House as such as to what ought to be done. I beg to move that the Bill he now read a second time.
Moved, That the Bill be now read a second time.—(Lord Kennet.)
5.28 p.m.
Lord Hatch of Lusby: My Lords, I apologise to the noble Lord, Lord Kennet, for being late but I missed the cue on the monitor until it was rather late. I have not much to add to what was said on Second Reading on 21st April. I do not believe that there is anybody in either House of Parliament who does anything but detest the practice that is the subject of this Bill. However, there is one matter which I believe should be raised on our second time round, in discussing the principles of the Bill and the application of those principles. I should like to refer your Lordships to the
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most forceful and very important speech made by the noble and learned Lord the Lord Chancellor at the beginning of our Second Reading on 21st April. The noble and learned Lord had this to say at col. 676 of the Official Report, and I believe it is worthwhile repeating as a quotation. He said:
"Under Section 18 of the Offences Against the Person Act 1861, whosoever shall unlawfully and maliciously by any means whatsoever wound or cause any grievous bodily harm to any person with intent to do some grievous bodily harm to any person or with intent to resist or prevent the lawful apprehension or detainer of any person shall he liable to imprisonment for life.".
He went on:
"Under Section 20 of the same Act, whosoever shall unlawfully and maliciously wound or inflict any grievous bodily harm upon any other person, either with or without any weapon or instrument, shall be liable to imprisonment for not more than five years".
That was a very serious statement made by the head of our judiciary. He made it quite clear that he was speaking in his own capacity and that any such act would naturally go before the courts, which would have final judgment on it.
But he went on in the next paragraph to say with even greater force:
"I really must make it plain to the House and to the public that it is my solemn opinion that anybody who participates in this country in the excision of a clitoris is guilty of one or both of the offences which I have just read out, and will render himself, and anyone participating in such a procedure will render himself, liable to prosecution for an offence for which a private prosecution is available.".
I should like to extract those words "private prosecution". Why a private prosecution? If the noble and learned Lord's judgment is correct on this act, why should it be confined to a private prosecution? That is the first point that I should like the noble Lord, Lord Glenarthur, to answer.
Then the noble and learned Lord went on to point out that, in the case of a minor under the age of 16, there is no possibility that consent is any defence at all. He continued to point out that it is not just the consent of the minor, but also that it would not be accepted as a defence to use the excuse that the parents had given consent. He concluded by saying:
"I must also add that I very much doubt whether the consent even of an adult is possible. There is a long, long history of English law, whereby the consent of an adult to a maim is not admissible as a defence, if a person inflicting the maim—which this certainly is—is charged with an offence against the person." [col. 677.]
The very simple question that I should like to ask the Government is: how does it come about that our leading judicial authority in Parliament and in the country can make those quite specific judgments—again, with the reservation that it is his own judgment—and yet, despite the fact that there has been public evidence that this offence has been committed, no police action has been taken, so far as I know, and no prosecution has either been made or is pending. In other words, despite the very strong and welcome words of the noble and learned Lord, it appears that the evidence that this practice has taken place within this country is not regarded by the authorities as sufficient for a prosecution. That is the only additional point that I have to make since we last discussed this Bill before the election. The other arguments do not need to be rehearsed.
I hope—the Government having now overcome the panic which they endured in the week-end before we

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last discussed the Bill and having to use that as an excuse for not co-operating with the noble Lord, Lord Kennet, in the drafting of the Bill—that they are now able to come forward with the propositions which they promised they would do, in order to still the fears of, in particular, the medical profession. I trust that the Government can say to us tonight that they have now had an opportunity of giving their full support and authority to this Bill, so that we may pass it speedily through this House with unanimous consent, as an important social measure laying down the standards which must be achieved by anyone who is living in this country.
5.36 p.m.
Baroness Masham of Ilton: My Lords, this is a subject which I do not think your Lordships find attractive. In fact, when a film was shown in your Lordships' House before the Second Reading of the previous Bill, some of your Lordships could not stomach the sight of seeing young girls being mutilated in such a way. The cries of these young girls' anguish were heartrending. We discussed this subject fully in the last Session of Parliament and I think that the Bill was improved, but we now have in Parliament many new Members. I am glad that the noble Lord, Lord Kennet, has again brought the matter of prohibiting female circumcision in Britain before your Lordships.
This matter must not be brushed under the carpet. All sorts of practices can and do take place when there is monetary profit to be made. Anyone without medical qualifications can perform an operation. Many surgeons who have worked in the parts of Africa where female circumcision is practised can relate stories of infections and long-lasting problems. The World Health Organisation has given full support to the campaign for the abolition of female circumcision, as has been said by the noble Lord, Lord Kennet.
During the passage of the last Bill, I brought before your Lordships an amendment to include in the penalties for performing an illegal operation when the law is in force the choice of a prison sentence or a fine—a fine was the penalty in the original Bill before my amendment—or both a fine and a prison sentence. I am pleased that your Lordships agreed to that and that it is now in this present Bill. A fine would mean very little to a private practitioner dealing in this kind of practice. But the threat of a prison sentence would, I hope, stop anyone in this country from even contemplating performing such an operation unless an operation was necessary on medical grounds for the physical health of that person or for the rectification of abnormalities. This is written into the Bill which is before your Lordships, but perhaps there is a need for slight amendment at the Committee stage so that general practitioners and midwives are protected in their treatment of patients under their care in the community.
We live in a very mixed and complicated society and demands on our health service are numerous. Last Saturday, the Yorkshire Post printed an article about the wishes of the Community Relations Council. They are urging the Bradford Health Authority to meet the special needs of ethnic minorities. They want staff to understand and have training in racial and cultural awareness. Better understanding between groups is
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always a good thing, so that people can live in harmony, but we must make it quite clear that this barbaric custom of female circumcision is not to be performed except for medical reasons. The only way to make this crystal clear is to have a simple Act of Parliament outlawing any practice of this sort.
I cannot see that private hospitals are written into the Bill. These are the very places in which this operation might take place. The Minister, the noble Lord, Lord Glenarthur, tells me that they are covered by the Registered Nursing Homes Act 1975. I should be happier if the words "independent hospitals and nursing homes" were written into the Bill. There might he some confusion as some private hospitals in this country are American, and I think that in the United States of America hospitals and nursing homes are defined separately.
We should not leave any stone unturned. I, too, hope that your Lordships will give this Prohibition of Female Circumcision Bill a Second Reading, and that it will have a swift passage on to the statute book, after slight amendment.
5.41 p.m.
Baroness Cox: My Lords, I should like to speak again on this important subject because, as I said previously, I believe it draws our attention to a matter of great medical and social concern. Speaking as a nurse and as a sociologist, I should like to repeat, in an abbreviated version of my previous contribution, my support for the noble Lord, Lord Kennet, in the reintroduction of the Bill.
The first point concerns definitions. The term "female circumcision" is generic, covering a range of procedures with degrees of mutilation ranging from the least traumatic (sometimes termed "sunna" circumcision) to the most radical, called "pharaonic" circumcision, or infibulation. The wording of the Bill effectively proscribes all forms of female circumcision. This is to be welcomed, because all the evidence suggests that there are no physical benefits to be gained from any of these practices—rather, there are numerous attendant risks. The health hazards associated with some or all of the procedures have been well documented by health care workers. I shall repeat them briefly, because they are so serious that they must be taken into account in our present deliberations.
First, there are the immediate and short-term physical complications, including haemorrhage, pain, shock, localised infection, septicaemia, difficulties with micturition and damage to adjacent tissue and organs. Then there are the long-term physical complications. They include chronic infection, development of abscesses, scar tissue and/or of cysts and neuromas, dysmennorhoea, dyspareunia and obstetric complications. Yet other secondary and long-term complications may also follow; for example, renal disease resulting from urinary tract infection. In addition to these physical ill-effects, psychological and especially psycho-sexual problems may result. The research evidence is less substantial here, partly because many of the women involved are naturally reluctant to speak on the subject and are influenced by the norms and values of their culture. Often that culture may advocate circumcision as desirable. However, the

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physical mutilation resulting from circumcision in even its mildest form must be expected to have some adverse psyscho-sexual effects.
Despite these problems, female circumcision is still widely practised in more than 20 countries—in Africa, in Oman, South Yemen, the United Arab Emirates and among the Moslem populations of Indonesia and Malaysia. While it is impossible to estimate precisely the numbers of women involved, well informed sources claim that the order of magnitude is at the level of tens of millions. A small number of cases have recently been reported in Europe—in France and in the United Kingdom. Hence the significance, the timeliness and the importance of this Bill.
May I refer briefly to the reasons for circumcision, because a practice which is so widespread must have powerful social and cultural legitimation and be supported by many members of the communities involved. The reasons for this support for circumcision include beliefs that it is desirable because it is hygienic; because it prevents promiscuity; because it is in keeping with age-old tradition; and because it symbolises a girl's transition to adulthood. Also, sometimes, especially in Moslem communities, it may be carried out in the sincere but erroneous belief that it is demanded by Islamic faith.
It is perhaps relevant very briefly to reiterate that many of these beliefs are inconsistent in so far as they bear no relation to empirical reality. For example, there is no correlation between female circumcision and hygiene: rather the reverse, because it is so often associated with infection. With regard to the traditional association with the rite de passage into adulthood. this, too, is often wrong. It is anachronistic, because circumcision is often performed on girls who are so young that they cannot be seen as nearing adolescence. Finally, the belief that it is a religious requirement is inconsistent with the facts, because it is carried out by adherents of many faiths: Roman Catholics. Protestants, Copts and Animists—faiths which clearly do not require it.
Given these anomalies, it is important to explore other reasons for the perpetuation of this custom. The informative report on female circumcision by the minority rights group suggests several reasons, including the financial incentives for those who perform the operations; the influence of older women who have themselves been circumcised; the power of community pressure; and the suspicion that westerners are trying to eliminate traditional cultures. It is important to understand these reasons so that health educators in this country can take them into account if they are working with people who adhere to these cultures who might be subject to the influence.
Turning now, very briefly, to the case for action and legislation, given the complexity of the situation, attempts to bring about change must obviously be sensitive to the multiplicity of factors involved. Recent initiatives have consisted of two kinds of approach, legislative and educative. Several organisations have made very strong recommendations designed to try to eliminate the practice of female circumcision. I mention briefly four such initiatives. I will not repeat the detailed account of these initiatives which was
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given in our previous debate, but those to which reference was made were, first, the World Health Organisation seminar in Khartoum in 1979; secondly, UNICEF's position on female circumcision in May 1979; thirdly, the Council of Representatives of the International Council of Nurses; and, fourthly, the Royal College of Nursing of the United Kingdom's strong support for this Bill.
I should like to conclude by referring briefly once again to two kinds of argument which I have heard in opposition to this Bill and to the whole idea of passing legislation designed to prohibit the practice of female circumcision in this country. First, there are those who argue that it is wrong to impose what they regard as "western values" on people from other cultures. Secondly, others claim that if the practice is made illegal it will merely be driven underground, performed in insanitary conditions, and be fraught with even more danger of complications.
As I argued previously, I do not believe that these arguments constitute grounds for opposing this Bill. On the first point, there are surely some cultural traditions which are so antithetical to human wellbeing that they cannot be regarded as sacrosanct. Cannibalism and the burning of widows are two examples. I would argue that the mutilation inherent in female circumcision could be seen in a similar light, especially as it is all too frequently carried out on small children who are not in a position to choose for themselves. On the second point—the danger that the practice will be driven underground—this is clearly a possibility. However, one may hope that it will be outweighed by the deterrent effect of the law.
I understand that in other countries where female circumcision is widely practised the symbolic effect of the passing of this law in this country will be helpful to them as a precedent. In fact, since speaking in the previous debate on this topic I have received letters of support from women in those countries endorsing this argument and supporting this Bill. I conclude by reiterating my strong support for the noble Lord. Lord Kennet, in his endeavours to bring his Bill through in this Session.
5.50 p.m.
Baroness Gaitskell: My Lords, I am here for one very special purpose, which is to give as much praise as I can to the noble Lord, Lord Kennet, for introducing this Bill. I do not believe that even he realises what a boon it will be to women and how much women—particularly those from India and Africa—still suffer from these most ignoble and tragic practices.
In our last debate on this subject, I was sickened by the amount of slight hysteria and dishonesty which some women produced—which some of our women produced—about Indian women. They tried to make excuses for these ignorant and primitive Indian women, and I did not much like that. But now we have a Bill that will really make up for all the mistakes which have been made in the past. The truth is that it is an outrage to pass this Bill in this House—there is nothing to be said for it. I was appalled by the fact that English women speaking in our last debate tried to excuse the practices we were discussing. I did not like that at all.

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I am absolutely thrilled that the noble Lord, Lord Kennet, has this wonderful Bill in this country. After all, we can be kind and welcome people from other countries, but we must not import primitive and ignorant cruelties and practices just because some other countries have them. It has been a pleasure to read this Bill and to learn how much we have been doing in order to get rid of some of the practices we have heard about.
We were pretty swamped by noble Lords talking about the National Health Service yesterday, but there seems absolutely no excuse to have female circumcision. It is a cruel and ignorant practice and there is nothing low enough that I can say about it. We should not allow it to be imported into this country. It is utterly wrong and it is cruel. They savage our wonderful National Health Service with these practices; they make attempts to save it when they start this sort of hanky-panky. I cannot praise the noble Lord, Lord Kennet, enough. He has done a wonderful thing for women in this country, and I hope in other countries where they are still so backward and where the women still have to cope with these terrible practices.
I started the day by feeling rather ill, but I insisted on coming here because I did not wish to miss this debate. It is so important to women—it could not be more important. A great deal of rubbish has been spoken. People went to Harley Street and were given ridiculously little treatment for £15—I know about this; I am not speaking "in the air". I could not believe that some of our women were on the side of those poor women from other countries who had to suffer so much from their men and from their own women. I could not believe that this was happening.
I hope that the noble Lord, Lord Kennet, will continue to succeed with this Bill because a more cruel operation I do not know of—and I have actually done a little medicine in my time, although not as much as I wanted. I hope that today the noble Lord, Lord Kennet, will go away feeling really proud and grand. It is, after all, enough that women from other countries can come and live in ours. We are doing very well by them in allowing them to live in this country. It is nice for them and it is nice of us to do it. But we do not have to import their kind of rules.
The point is that such people are not in a position to teach us anything about sexual behaviour. What have they to teach us about intimate sexual matters? Absolutely nothing. That is another plus for the noble Lord, Lord Kennet—that we have rid ourselves of that aspect.
I am extremely happy about the Second Reading of this Bill. I wish the noble Lord all success. He has a large view of the human condition and there will be thousands of women who will bless him for the rest of their lives for what he has done to allow them to live in this country, to live freely, to do the right things, and not be subjected to cruel and stupid practices such as female circumcision. There is not one sentence that one can make in favour of that practice. It is evil from beginning to end and we should not touch it. That is all I want to say.
5.58 p.m.
Lady Kinloss: My Lords, I am glad that it has been possible for the noble Lord, Lord Kennet, to introduce this Bill a second time. Having spoken in the previous Second Reading debate, I have only a little to say that I have not said before. In the meantime, I have been glad to have the comments of several African friends who were delighted by the principles of the Bill. However, they found our constitutional procedures difficult to understand in that the Bill did not become an Act the first time. I trust that this Bill will have a fair wind both here and in another place and will become an Act in due course.
In August of this year my husband was invited to the Second Congress of International Somali Studies in Hamburg. Although he was unable to attend, he received all the papers. Among them was a paper which was given by Dr. Mahdi Ali Dirie, who is a lecturer in obstetrics and gynaecology in the Faculty of Medicine and Surgery in Mogadishu. His paper was entitled, Prospects of Undertaking an Educational Programme Against Female Circumcision in Somalia. In it he recites all the medical reasons for a programme against female circumcision in a country in which almost all girls are circumcised in one form or another—this from the age of four to eight years in most cases. Also, no less than 92 per cent. suffer infibulation, which is the most severe form. He with others considers that this can only be overcome by consistent education of the women in his country. We must take seriously the opinion of African doctors with specialised knowledge of this practice.
Dr. Dirie is not alone, for the World Health Organisation has urged concerned countries to study and implement ways of stopping this harmful practice. As a result, a seminar sponsored by the World Health Organisation was held in the Sudan in 1979 at which the Eastern Mediterranean Region countries of the World Health Organisation participated. It was agreed that health education especially in this field was the most cherished goal.
For many centuries female circumcision was shrouded in secrecy and taboo, but recently health workers and social scientists concerned for the physical, psychological and moral well-being of women and children have brought it to light. In a documentary series entitled "Forty Minutes", BBC2 showed, on 3rd March this year, a film entitled, "Female Circumcision". It astonished many people in this country, not only laymen but doctors and nurses as well, who have admitted to me that they had never heard of it before. Perhaps we in this country need to be alerted to the dangers and suffering that follow this form of operation, particularly in its most extreme form. So I wish this Bill every success.
6.2 p.m.
Baroness Jeger: My Lords, I am very glad to be able to say again that my noble friends and I on this side of the House warmly support this Bill and congratulate Lord Kennet on the initiative he has taken and all the work he has done, in consultation, to try to make this an acceptable Bill and an improvement on our earlier attempts. I agree with those speakers who have suggested that this need not be a long debate, because we did argue the principles very fully before. There are

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just one or two points on which I hope the Minister can give us some guidance.
To begin with, I hope that the Minister is going to give the blessing of the Government to this Bill and try to find the time to ensure its speedy passage. I may be one of those who are looking forward to having a general election as early as possible, but I hope it will not be so soon that this Bill falls again.
The first question which I think would help the House goes back to an exchange in the House of Commons on 9th November 1982 (col. 132), which came soon after revelations in the Observer newspaper about this operation taking place in London. The Minister of Health said that he shared abhorrence of the practice. Then he said this:
"Unethical practices by doctors are a matter for the General Medical Council to consider, and we have written asking the Council what action, if any. it proposes to take over these allegations. We shall consider urgently, in the light of its reply, whether any additional steps are needed".
That was on 9th November 1982, and I am wondering whether the Minister has received a reply yet from the General Medical Council, what the reply was, and what steps we are urgently taking, as he promised in the House of Commons those many months ago.
I hope also that the Minister will be able to clear up some of the points raised by the noble Lord, Lord Hatch. There does seem to be some scope for argument about the relevance of Section 18 of the 1861 Offences Against the Person Act in these conditions. I think one of the main difficulties is that that Act does not apply to Scotland, and I am sure we should all much regret any exclusion of Scotland because of the 1861 Act. It may well be time that that Act was looked at again.
Not only would it help the House to have that matter cleared up, but there does seem to he confusion outside the House. For instance, the GMC, with its Ethical Committee, would, one would have thought, take some responsibility for this. But I have a report from the Guardian of 3rd March 1983 reporting a meeting as follows:
"The Ethical Committee's private view was that the operation was abhorrent, but that only Parliament had the power to ban it."
That does suggest that the doctors do need this new legislation in order to proceed in the way that this House would wish.
The noble Baroness, Lady Masham, raised the point of the penalties under Clause 3, and I have some sympathy with her doubts about whether a fine is adequate. I have a feeling that the kinds of doctors who might be tempted into this sort of shady illegality might be those who charge the highest fees and collect the most money, as often happened in the bad old days before the 1967 abortion law reform. But I would hope that a doctor who was fined under Clause 3 of this Bill would be automatically reported to the General Medical Council, which I hope would take the appropriate steps. After all, we have all known of doctors struck off for much less serious offences than the mutilation which is the subject of this Bill.
I am sure the whole House appreciated the well-informed contribution of the noble Baroness, Lady Cox, and she has put the points so clearly that I want
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to save the time of the House by not repeating them. I am sure, too, that we are all very glad our friend Lady Gaitskell has come down here so bravely, because she was not well this morning. She has shown once again the strength of her convictions and her toughness; she puts a lot of other people to shame by coming and making such a forthright statement as she has done today.
Lady Kinloss has again given us some very special and very important information which we much appreciate. I can only hope that the Minister is going to be as co-operative as I know he wants to be, and that he will be able to persuade his colleagues—especially those who arrange the timetable of our business—to make sure that very soon there is adequate time for us to see this Bill on to the statute book.
6.8 p.m.
Lord Glenarthur: My Lords, may I repeat what has been said in your Lordships' House on an earlier occasion: that is, that the Government share with the noble Lord, Lord Kennet, and those other noble Lords who have spoken this afternoon the repugnance with which he views the practice of female circumcision. I hope that that satisfies to some extent the views of the noble Baroness, Lady Gaitskell. It is something that has no place in our society, and we would never wish it to become accepted among any part of our population. That, I believe, is a view shared also by those who speak for the minority communities in this country.
We cannot, of course, legislate for other countries, but we have through the World Health Organisation added our voice to encourage those who, through exhortation and education, are trying to eradicate these practices abroad. So I was encouraged to hear what my noble friend Lady Cox said about the possible effect on other countries of this Bill being passed in this country.
The noble Lord, Lord Kennet, is to be congratulated on again bringing forward such a Bill. My noble friend Lord Trefgarne has already stated on the previous occasion, on 21st April, that the Government acknowledge the case for a firm statement in legislation that would put beyond doubt the illegality of the practice of female circumcision. I will not, therefore, take up your Lordships' time with descriptions of the law on this subject as it now stands. But the noble Lord, Lord Hatch, raised a question of legislation in regard to the remarks of my noble and learned friend the Lord Chancellor in April. I am afraid I do not think I can go very far in explaining what my noble and learned friend the Lord Chancellor said on that occasion. What he said was said in his learned capacity, if I may put it that way. He said it as a matter of fact.
So far as private prosecutions are concerned—and I stand to be corrected by my noble and learned friend—I think the Director of Public Prosecutions could step in. A prosecution would not have to be a private prosecution in the way suggested by the noble Lord, Lord Hatch of Lusby. But this is a very technical and legal matter and I hope the noble Lord will understand that I am not in quite the same position as my noble and learned friend.

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Let me simply say that, subject to certain amendments which the Government feel are necessary, we support the principle of the Bill and hope that it will reach the statute book. The only point at issue, therefore, is how best the objectives of the Bill are to be achieved. The Government feel it essential that the Bill does not in any way impede operations which are legitimate and necessary to any aspect of a woman's health. I know the noble Lord, Lord Kennet, will agree with me about this.
There are a number of operations, mentioned by the noble Lord, for cancerous, pre-cancerous and other conditions which must be undertaken where medically necessary. The Government would not wish the Bill to impinge in any way on such operations, nor to impose upon doctors any bureaucratic tasks in relation to operations that are and will continue to be medically necessary. Similarly, there are operations of what might be called a cosmetic nature, which may properly be undertaken but which are not required for the direct physical health of the woman. We are not convinced that these are completely covered by the wording of the Bill as it now stands.
We recognise the concern that many of your Lordships may feel if the exemptions are widened too far. We feel the Bill would be improved if specific provision were included to prohibit an operation on the grounds of a desire for it for ritual or customary reasons.
Finally, we are concerned that the restriction of legitimate operations to registered medical practitioners working in the National Health Service and registered private hospitals could leave the position of midwives in some doubt. It is part of their professional function, in both home and hospital deliveries, to undertake minor surgical procedures which might be prohibited by the Bill in its present form.
The noble Baroness, Lady Masham of Ilton, asked about the status of independent hospitals under the Bill as it stands. I can tell her that in the context of the Bill a nursing home is a nursing home and in this country must comply with the law whether it is American financed or not. That point would be covered by the Bill and I hope the noble Baroness will accept what I say on that.
The noble Baroness, Lady Jeger, asked about the blessing of the Government. I hope I have made it clear that the Bill has the Government's blessing provided that it can be amended in Committee in the way I have broadly described to the House. As to the question of the danger of a general election, I do not think the noble Baroness need be in any particular fear of that as the result of the last election was perfectly satisfactory.
The noble Baroness also asked about the General Medical Council, which in the autumn of last year was requested to comment on the Bill. We received its comments in May of this year. The Council gave the clear view that it would deplore such operations, so it considers them to be unethical. The Council was concerned about the problem of drawing a dividing line between female circumcision and other surgery which did not arise from a strictly medical need, and I think that that is a point I covered earlier in my
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speech. The final point made by the noble Baroness relating to the legislation as described by the noble and learned Lord the Lord Chancellor was covered by what I said earlier.
As I have said, what is needed is a clear statement of law to prohibit operations which have no medical justification, while not inhibiting or obstructing legitimate health care. If suitable changes can be made in this House, as I am sure they can, to meet the points I have raised, then the Government would have no reason to oppose the Bill in an amended form. To these ends the Government will be very happy to assist the noble Lord, Lord Kennet, with the drafting of suitable amendments.
Lord Hatch of Lusby: My Lords, before the noble Lord sits down, will he expand on the answer he gave to that part of my speech which referred to the statement of the noble and learned Lord the Lord Chancellor? If it is the case that the Director of Public Prosecutions can intervene under present law, why has he not done so?
Lord Glenarthur: My Lords, the fact is that I am not in a position to speak with authority on the law in the same way as the noble and learned Lord the Lord Chancellor. I hope that the noble Lord will accept that. The fact remains that it is no good trying to prosecute someone if one does not know what has been done. I do not think we can take this argument much further as I would need to seek legal advice on this point. The noble and learned Lord was making a particular point in referring to excision of one part of the anatomy only. If the noble Lord looks that up he will see what was said. We understand that it was considered by the Director of Public Prosecutions but insufficient evidence was available to take action on the particular case to which the noble Lord refers.
6.16 p.m.
Lord Kennet: My Lords, many valuable points have been made in this debate; many of them familiar, although not all. I am most grateful to all those who have spoken and delighted that the Bill, in a suitably amended form, is to get a fair wind from the Government.
There is one point only over which I should like to go back. It was raised by the noble Lord, Lord Hatch, and was about the intervention of the noble and learned Lord the Lord Chancellor last time. It is not for this House to consider possible interpretations of the 1861 Act. Nor is it for this House to consider the bringing, or not bringing, of prosecutions under a given piece of legislation. However, I should like to say that the extracts from the speech of the Lord Chancellor which were read out by the noble Lord, Lord Hatch, might have given an impression to noble Lords who were not present at the time that the Lord Chancellor was against the introduction of this Bill on the ground that the operation was already illegal under existing law. May I correct that impression, if anyone did glean it. The noble Lord the Lord Chancellor was very careful to be neutral about the present Bill. Having said what he had to say—which was read out by the noble Lord, Lord Hatch, this afternoon—he went on to say:

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"This may be an argument for the Bill or it may be an argument against the Bill".
I conclude by once again thanking everyone, and especially the Government for showing more of their hand this time. I hope that between us we shall make a piece of good law out of the Bill.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Rent (Abolition of Control) Bill [H.L.]
6.18 p.m.
Lord Vaizey: My Lords, I beg to move that this Bill be now read a second time. This is a short and, indeed, a pithy Bill, and your Lordships may be tempted to think it is a sweeping Bill. In an almost literal sense it is, because in one way it is a product of the all-partyrepeal group chaired by the noble Lord, Lord Spens, which is going through the statute book bit by bit, not merely to look at obsolete statutes—after all, that is the function of the Law Commission and a job that it does efficiently and very well—but to look for areas of statute law where, in our opinion, there is either regulation for regulation's sake or the whole initial purpose of the legislation has become self-defeating.
Two examples will spring to mind of the group's initiatives where the group has already pressed its case in this House. One is the Bill presented by my noble friend Lady Trumpington, before she was promoted to the Front Bench, to repeal the Shop Acts, which has resulted in a committee of inquiry into the Shop Acts. The other is the Bill of the noble Lord, Lord Rugby, to repeal the statute enforcing the monopoly of opticians.
Baroness Birk: My Lords, may I interrupt the noble Lord to ask him a point of fact at this stage? He refers to the all-party repeal group. It is something unknown to me, and I think it is important to the debate. Is this a committee established by the House of Lords or is it just an informal group of like-minded peers?
Lord Vaizey: My Lords, the noble Baroness is correct. It is like the defence study group, in that it brings together people who are interested in a particular question. In this case it is the study of legislation where we think it has become self-defeating. The group has been going for some time, and includes noble Lords across the House.
This Bill on rents arises directly from a debate on housing in your Lordships' House which was of considerable interest and importance and which I had the privilege of initiating in the last Parliament on a Wednesday afternoon. In that debate we discussed the great changes that have occurred in housing since the last war, with the building of over eight million houses and flats in the past 30 years and the ever-growing shift to home ownership. If we leave various special categories out, about three out of five of what one might call ordinary households now own their own homes. The desirability of widespread home ownership is not a matter of party dispute. What is at issue is whether council tenants should be enabled to buy their houses, at what discount and in what circumstances. It is a matter of perfectly legitimate discussion. But the
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central principle of being in favour of home ownership is no longer a matter of dispute.
On this issue, and during over 30 years of council housing, I have been consistently radical. It seems to me that home ownership gives great power to the ndividual family—power to deal as it wishes with its own home; to sell it, to build up capital and to pass the capital on to the children. Those are all matters greatly prized by the vast majority of our fellow citizens. I am glad that not only are the Government also radical in this matter: I am delighted to say that so is the new leadership of the Labour Party.
There was also agreement in the debate that we had in the last Parliament that there will always be a need for a large rented sector for young people, people frequently on the move, elderly people, people who have other uses for their capital and, above all, very poor people. I shall come back to the question of the very poor. These are all people who at one time or another, or perhaps all the time, want to rent accommodation. In the land of the home owner, in New York City, few well-to-do people own their own apartments. André Meyer was a horrible man but one of the richest men in the world. In a book that I have read it states that he rented the top of the Carlyle Hotel when he escaped from occupied Germany, and just lived there.
Many people want to rent rather than to own for short or for long periods. There is no law of nature or social law that I know of that says that people ought to own the bricks and mortar in which they live. Of course, it is a very emotional subject. People who want to rent vary from university students who want accommodation for three academic years, through holiday tenants, to people who might want to rent for many years.
If I leave out of account for a moment the shorthold tenancy, there are two major types of tenancy. One is the council tenancy, which is a form of tenancy that is being reduced in number by selling off existing houses and through the relatively low rate of building of new council houses. The other is the private sector. In 1914, about 19 out of 20 flats and houses were privately rented. That proportion is now fewer than one in 10. It is one of the most radical social changes that this century has seen in the form of house and flat tenure.
Can we cast our minds back to the 1914–18 war? Prices rose sharply, and the standard of living fell. Rowntree's studies had shown that a major element in working-class expenditure, and therefore in working-class poverty, was rent. Accordingly, rents were frozen by Parliament. The war ended and there was a great housing boom in the 1920s and 1930s. Over five million people became home owners, but it left the private rented sector on one side, although a number of blocks of flats were built for letting, such as those that we see all round what are now becoming the inner suburbs of our cities. One often comes across them around the tube stations.
Came the 1939 war and the process of 1914 was repeated. There was a bit of liberalisation in 1957, as I shall mention later. In 1974 Tony Crosland brought furnished properties into the net, with catastrophic consequences. At that time I was a professor at Brunel University. We ceased to be able to find furnished

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accommodation for our students almost overnight. People were frightened of letting accommodation to people if they had security of tenure.
The position now in this country is that the rich and prosperous can rent property from private persons on any terms they mutually agree. Below a certain rateable value you cannot rent, except in the case of shortholds or new property specifically built for letting since 1980. Only chance will give people privately rented property if they are looking for somewhere to live unless they pay the exorbitant rents demanded in the so-called "bed and breakfast" furnished tenancies.
Three categories of people suffer from this circumstance, and two categories benefit. Of the two categories which benefit, there are, first, the lawyers. There is a class of solicitor who has grown rich on the Rent Acts, which are a legal jungle. A few solicitors in each town—solicitors' clerks most specifically—are experts on the whole paraphernalia. If my Bill went through unamended they would suffer, but I hope that their sufferings would be disregarded. The new public prosecution system may well give them more work.
Lord Mishcon: My Lords, before the noble Lord continues, and in defence of my profession, which I love very dearly, may I say that it is not for reasons of economy or for their riches that many solicitors will hope that the noble Lord's Bill fails.
Lord Vaizey: My Lords, the last thing on earth I want to do is to upset the noble Lord, Lord Mishcon, but I think he would agree that the Rent Acts give a substantial volume of work to many solicitors.
The other category which benefits is that comprised of the people who are lucky enough to live in rent controlled property. They are rarely the original tenants, but they are their descendants. They enjoy a substantial benefit. If my Bill passes, in some circumstances their rents will probably rise. If they are brought to the poverty line—as many of them might be—they may be forced to turn to housing benefits. That is a matter with which I shall deal in the closing passages of my speech. We have to bear that category in mind as potential and important sufferers—as the noble Lord, Lord Mishcon, points out—from the change in the law which I am discussing.
I turn now to the beneficiaries. The first is the owner of the existing rent controlled house who would make a capital gain if he were able to raise the rent. This does happen. I suppose that we all know people who live in Islington, where the gentrification is going on. People buy a rent controlled house with an old lady in it, and they carefully and touchingly inquire after her health every time that they go to collect the rent. The moment the old lady dies, and if she has no daughter living with her, the house has a yellow door, the Guardian is delivered and the Trotskyists move into the newly-gentrified property, which rises enormously in value. Personally, I have some, but not very much, sympathy with the owners of these properties, because the properties have been bought over the past 30–odd years at knock-down prices, and in many respects the new owners are gambling on the ending of the tenancy of their properties.
My example shows, I think, that the supply of rented places dries up as houses fall vacant. That is
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undoubtedly the case from the fact that as a percentage of the total this type of property has dropped from over 90 per cent. to well under 10 per cent., and when such properties fall vacant they are sold to owner-occupiers. They are rarely let again.
So my second category of beneficiary from my legislation is the person who is looking for a place. He or she cannot find one, except by luck. He may find a grotty, furnished slum; but none of us I think would dare to let our own houses except to rich Arabs or diplomats whom we are absolutely certain will move out at the end of the tenancy. If we were to let our houses unfurnished with vacant possession, there would in effect be a capital loss of really very substantial proportions. Consequently, fewer and fewer people who want to get somewhere to rent can get anything except by turning to the council.
I shall quote an actual example. A tenant of a property, which he has rent free as it is a service tenancy, dies. His widow cannot afford to buy a house. There are no houses or flats for private tenancy, except furnished flats at £300 a month. Under the present law in order for the widow to get a council flat her husband's employer is forced to evict her, which causes untold distress and expense, so that she is homeless and the local authority is forced to house her. She jumps the queue before other people who also wish to have rented accommodation.
Why is this?—andhere I come to my third category of beneficiary of my Bill. I began by reminding the House that three-fifths of the nation are now house-owners. That is all very well and good. Subject only to the sanitary and planning laws, you can do what you like with your own house: beautify it, extend it, alter it, neglect it, sell it; but you cannot let it. Now, my Lords, let us suppose that you or I went to Australia for five years, and let us suppose that our employer offered to ship our furniture. We should have to sell our house here, because we could not let it, since if we did, we could never get it back. That is another actual example—of my own, as a matter of fact.
It is inescapable logic of house ownership that the right to let will in fact come about. But having come about, there will be very serious problems of transition, and I have no doubt that other speakers, and notably the noble Baroness, Lady Birk, will concentrate on them. I hope, however, that they will not seek to refute the logic of the argument, because the logic of home ownership means that the right to let, and, once having let, to regain possession, is inescapable.
Lastly, I turn to the Government's position. There are many thoughtful Conservatives who share my concern at the problem of renting, but of course it is politically very hard to be part of a Government who are not only allegedly leaving most of the population dying in the streets because they are cutting the National Health Service, but are also putting them out there to die as well by repealing the Rent Acts. Therefore, I can guess to a certain extent what my noble friend's departmental brief will say. But I would stress that the reform of the housing market is an inevitability in the longer run, and that it is an all-party matter.
Perhaps I may say this to noble Lords: the aim of a political party—any political party—is to gain office,

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but to gain office in order to serve the people. A political party in office, especially one with as large a majority as the present one, urgently needs to refresh itself by looking beyond office to measures. This is an area that has been crying out for measures. The House of Commons Select Committee that studies housing said explicitly, on an all-party basis, that rent control was a major element in creating housing shortage. Yet it was in 1957 that the last major reforming measure was created by the noble Lord, Lord Brooke of Cumnor (then Mr. Henry Brooke). That began the process of rent decontrol by going down the scale; first, deregulating tenancies with high rateable values above a certain value, and then going down slice by slice. But the political will of my noble friend was not sustained by his successors until the 1980 Act, which exempted newly-built places for letting and the short-holds which have scarcely taken off.
The Labour party has always frustrated Tory measures by the threat of repeal of any legislation affecting tenancies. This is why one obviously has to ask: please will the Labour Party turn its mind to this subject? We are moving to a home ownership society, because certainly by the end of this Parliament three-quarters of the total of houses and flats will be owner-occupied, and I think that the Labour Party has now accepted that that is likely to be the pattern of society. I believe that in such a society some kind of power to let your own place when you want to move away, rather than have to sell it and then find somewhere else, is important. I earnestly hope that the Labour Party will think very carefully about that.
I hope that the Alliance will, too. In his important hook, Dr. Owen has embraced the social market philosophy, and in many respects Dr. Owen's views are important and relevant here. Therefore I hope that the Alliance will turn its serious attention to this matter. Certainly from past conversations with the noble Lord, Lord Roberthall, I know that he has always thought that one of the major elements in any housing reform must be the paying of some attention to the Rent Acts.
Finally, I turn to what the level of rents might be in a free market. In the nature of things, it is absolutely impossible to say directly what will be the level. But, in his most perceptive speech on the Agricultural Holdings Bill on Monday, the noble Lord, Lord Northfield, said that one cannot have a threefold rise in the level of prices, including money incomes, and expect frozen rents for farms. Clearly, that also applies to the normal rented home sector.
Therefore I can predict that freeing rents and tenures would in some cases lead to a substantial increase in supply and the emergence of a demand—a demand which at the moment is quite frustrated because there is nowhere for it to rent. I would judge that many rents would settle at something like the level of the financing cost of mortgages plus depreciation, which may well be below the actual mortgage repayment cost, with its element of capital repayment. Rents for bad houses would almost certainly go down, and those for good houses would probably go up.
I now turn to the question of the poor, which is of course central to the issue, because I do not think that anybody would defend rent control per se if it
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benefited only the rich or the middle income groups. It is because of the poor that there is this concern, and that is why it is such a highly emotional issue. We have the housing allowances system, which in principle should meet this need. I would strongly argue that, if there is a problem of compensation for the householder being inadequate, it needs attention. So undoubtedly in some respects housing allowances would go up.
On the other hand, tax relief on mortgages would go down, because fewer people would be driven into buying a house as the only means of getting hold of one. Furthermore, if there were a greater supply of unfurnished accommodation, there is no doubt that housing allowances at present paid to tenants of furnished property would substantially fall. Therefore I think it absolutely impossible to tell what would be the cost to the public purse of this kind of measure if it were followed.
I should like to thank the House for listening to me with such patience, and I look forward to an interesting debate.
Moved, That the Bill be now read a second time.—(Lord Vaizey.)
6.40 p.m.
Baroness Birk: My Lords, may I start by thanking the noble Lord, Lord Vaizey, for his courtesy in sending me a copy of his speech, or at least two-thirds of it. It was very helpful. The noble Lord has a nice quirky sense of humour. I enjoy exchanging remarks and comments with him outside the Chamber, but I do not think this should extend to legislative measures. I can only believe that he has his tongue firmly in his cheek when he brings this Bill to the House. The very title of the Bill is a classic example of what George Orwell called "Newspeak". The Title of the Bill states it is a Bill that repeals legislation "restricting the freedom of tenants". But this Bill repeals legislation that protects the tenants, not restricts their freedom.
It is a Bill that reduces the rights of tenants. But that would sound a far less attractive proposition to put to the House. The Bill demonstrates an over-simplistic approach. It is monumentally irrelevant to those who are inadequately housed, a vast and growing number, unfortunately, in our society. It is irrelevant to those who are homeless. It is of no consequence in tackling the growing level of housing repair so graphically illustrated in the English House Conditions Survey. It does nothing to assist local authorities to reduce their ever-increasing waiting lists, and in no way will it help to provide decent facilities for the hundreds of thousands who, even today, lack basic facilities. Incidentally, it would also remove all the grounds under which landlords can obtain possession through the county court.
The Bill brashly implies that the dramatic decline in private letting can be attributed solely to Rent Act control. The evidence is quite contrary to this view. The House of Commons Environment Committee report on the private rented housing sector, issued in July last year—on which there was a majority of Conservatives—set out the reasons clearly in paragraph 9. This stated:
"There was widespread agreement in the evidence presented to the Committee that there were three main ways in which this decline

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had happened: (a) slum clearance, which resulted in the removal of older, bad quality accommodation from the stock; (b) transfer of existing properties to other tenures principally to owner-occupation, often by sale at a discount to the sitting tenant; and (c) concentration of new housing investment almost exclusively in other tenures, so that increasingly the demand for rented accommodation was met by local authorities and housing associations rather than by private landlords".
There was no mention by the Select Committee of the House of Commons that rent controls were a factor in the decline of the rented sector which has been going on through most of this century.
Lord Harris of High Cross: My Lords, if the noble Baroness will allow me, I think there is a misunderstanding. The last point that the noble Baroness read out refers to the concentration of new housing investment exclusively in other tenures. The noble Lord, Lord Vaizey, was pointing out that you would not get investment in rented property while you have the rent control Acts. I do not think that that is inconsistent with his view.
Baroness Birk: My Lords, it may not be inconsistent with his view, but if a committee of the House of Commons, on which, I repeat, the Government party was in the majority, had come to the conclusion, from the evidence it heard and its own deliberations, that the rent control Acts were an important factor in the decline of the rented sector, it would most certainly have said so. The noble Lord can read the account himself, as I am sure he has done, and he will see that point. In fact, it does not. I do not think, with the greatest respect, that the noble Lord's intervention was valid.
The Bill implies, as the noble Lord himself stated, that the landlord and tenant could freely agree terms of letting to their mutual advantage. Frankly, this is nonsense. There is a grossly unequal relationship. You cannot have a contract or an agreement that works between two quite unequally balanced parties. The terms would be unfair because of the shortage of housing. This would be the lawyers' paradise, not what the noble Lord said, in trying to work out agreements and the litigation that would result.
I have a great deal of sympathy with many private landlords in the dilemma in which they find themselves, although it must be said that this sector has had and still has, unfortunately, more than its fair share of sharks and those who exploit rather than alleviate human misery. Because house prices have escalated dramatically, individual houses now represent sizeable investments. To get a return on that scale of investment means charging rents that are way beyond the means of most of those who want to rent or who have no alternative. Selling is a far more attractive proposition because of the subsidy system. Mortgage relief is for owner-occupiers. There is no comparative subsidy for the landlord.
When the noble Lord talks about the rent control Acts, I would remind him of the 1957 Act which went a considerable way towards reducing controls. This resulted in such chaos and the whole structure of Rachmanism, that changes had to be made by a Conservative Government in 1961. A £40,000 house, again, according to the Select Committee report, would have to be rented at £80 a week to get an annual
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return of 10 per cent., and that does not allow for all the costs that would have to be met. The Environment Committee reported a graphic illustration of how, through subsidy, it can be much cheaper to buy a house than to rent it. I refer noble Lords to paragraph 57:
"SHAC gave the example of the comparative costs to a landlord and owner-occupier of one-bedroomed flats in a converted property in London. The landlord would have to charge at least £58a week simply to cover his costs, while the same flat would cost £31 a week (net) to buy on a mortgage".
The problems of landlords, particularly those who rent their homes temporarily, have been met. Indeed, the 1974 Act, the 1977 Act and the 1980 Act made it easier for home owners to gain possession from tenants and there is specific provision for owners to rent during a period of absence. They are guaranteed possession on their return. I agree entirely that there are still problems of repossession since court proceedings can take a long time, but this is not a case for changing housing legislation—certainly not in this way. There is a case for speeding up procedures either in the county court or by setting up housing courts, which was also recommended by the Environment Committee in paragraph 95.
The noble Lord referred to shorthold. That was going to be part of the Government's answer to renting in the private sector. What happened? Shorthold has been a dismal failure. So that is not the answer. With the escalation in house prices, fewer and fewer investors will find it remotely attractive to invest in houses to rent. Again, this was recognised by the Environment Committee when it reported in paragraph 86:
"Because of their low incomes many tenants are unable to pay economic rents. Moreover, if rent levels were increased to the extent suggested by some witnesses, for example 20 to 30 per cent. of income, private tenants would he paying a proportion of income far greater than that normally paid by council tenants or owner occupiers over the long term".
That is, of course, when they pay off their mortgages. The paragraph continues:
"Furthermore, such higher rents would result in increased sharing, overcrowding and homelessness. These are the very problems that housing policy aims to alleviate".
Then:
"Given the low incomes of many tenants, rents, even at market levels, are not likely to provide the rates of return deemed necessary by landlords to halt the decline of the sector".
This has been graphically illustrated by the Government's hold new initiative under the 1980 Act to increase private renting through assured tenancies which are, of course, free from control. But this resulted in only four new properties being built, I think, by Abbey National, for rent outside any rent control, not because investors fear that a future Government may change the rules but because such investments are just not economic. The Rent Acts introduced order into an area of decline to help those disadvantaged people who need the help badly.
Pulling the rug out from under the private rented sector is not going to halt that decline. That is exactly what the Bill does: it is trying to pull the rug out from under the private rented sector. In fact, as I have shown, it will exacerbate the problem to an absolutely alarming degree. The social effects would be disastrous. People could be literally put on the streets. This applies not only to the poor. For example, it

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applies to mansion flats which are at present controlled up to £3,000 or £4,000 a year. They would also be included in the wide sweep of the noble Lords' Bill. It would create a framework in which no tenant would have any feeling of security or in practice any real security, because the Rent (Agriculture) Act 1976 would also be wiped off the statute book by the Bill. It is listed in the repeals on the back page.
I should like to quote from a letter I received yesterday from the Agricultural Workers' Union. It says:
"Prior to the enactment of the Rent (Agriculture) Act 1976 evictions from tied cottages were commonplace, frequently unceremonious and invariably very distressing for the tenant and the tenant's family. The tied cottage system does, of course, exist in other industries but it was the farm worker who was constantly appearing in the county courts rather than workers from other industries prior to the 1976 Act.
"The recent cutbacks in council house building programmes and the disproportionately harsher effects of these cuts in rural areas means that there is considerable difficulty finding suitable alternative accommodation for even those rural workers legally dispossessed of their tied accommodation! Repeal of the 1976 Act would put impossible pressures on local authorities".
At this point I should like to introduce a personal note. I was a Minister at the Department of the Environment when that Bill went through this House. At the beginning many noble Lords opposite, particularly those who were farmers, felt very hostile to the measure. But with the coming into force of the Act and the way in which it worked out, I received letters even up to a year or so later, and had conversations with noble Lords who said that they were relieved to find that in fact it had worked out very much better than they thought it would.
So let us not lose sight of a crucial fact: people still want and need to rent. The Government have single-minded (and, I sometimes feel, obsessive) commitment to owner occupation. The Labour Party also supports owner occupation. As the noble Lord quite fairly said, this is an all-party commitment, and the people have shown that this is the way in which they feel. Indeed, it was a Labour Government which originally brought in option mortgages and have maintained their financial support whenever in office. Yet we have not lost sight of an equally important right: the right to rent. Many cannot own their own homes, however many inducements there may be. They are often the most disadvantaged in the community. Local authorities and housing associations try to provide for them, but Government cuts have severely restricted their efforts.
As far as the forecast cuts in public expenditure in the coming year are concerned, it looks as though the situation will certainly not get better but will unfortunately get worse. We have to accept that the bulk of rented accommodation must come from the public sector, whether it comes from local authorities, housing associations, co-operatives or whatever. That is evident from what is happening at present, and it is why things have gone so badly in the past.
Rented housing is badly needed for key groups like the young single homeless, single parent families, those from mental institutions who are returning to the community, the elderly and the handicapped. They are just part of a list which unfortunately is very much greater. It is up to Parliament and, therefore, this
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House to look to their needs and their basic right to rent, and not to debate, as we are tonight, a cut in controls which is based on a rigid, uncaring and rather careless dogma which would have the reverse effect to that which is apparently intended. Maybe it is not what the noble Lord, Lord Vaizey, really intends. If it is not, then he should come clean and say that what he wishes to see is the end of the private rented sector, for that would be the consequence of his proposals.
I hope that the noble Lord, having had his "go", is using this as a rather garish housing balloon from which the gas can now be expelled so that he and everybody else can come down to earth. It is not the custom of this House to vote against a Second Reading, particularly of a Private Member's Bill. This is a monstrous little measure, contrary to the principles not only of my party but contrary to all decent instincts and contrary to any serious discussion of housing policy. Indeed, we await with interest the speech on behalf of the Government, but I should have thought that the Bill was absolutely contrary to Government policy. If the noble Lord decides to press his Bill—and I am sure he is far too sensible to want to do that—my noble friends and I will be voting against it.
6.56 p.m.
Lord Harris of High Cross: My Lords, the noble Baroness, Lady Birk, has made a spirited reply on behalf of the Labour Party, but I think she relies chiefly on assertion and emotion, with very little attempt to analyse the operation of the Rent Acts, which will be my chief concern. I believe that her reference to the Commons Committee was highly selective and misleading, as will emerge from fuller study.
For my part, I congratulate the noble Lord, Lord Vaizey, on bringing forward this Private Member's Bill to repeal the Rent Acts. As he explained, this initiative has been encouraged by the correctly called "non-party" repeal group, following the debate in the House of Lords which the noble Lord opened in June of last year.
In that debate, all 11 speakers were in perfect agreement about the widespread human misery inflicted, especially on young people, by the difficulty or impossibility of finding a place to rent. Even more remarkable, four of the half a dozen professional economists in your Lordships' House, speaking variously from the Conservative, Social Democrat and Cross-Benches, were found in rare unison emphasising that the major cause of the housing tragedy was rent control. I am now looking forward to hearing the speech of the noble Lord, Lord Bauer, to see whether his formidable economic wisdom will reinforce our case.
In the earlier debate, a notable contribution was made by my noble friend Lord Robbins from these Cross-Benches. Since he is still tragically laid low by a most grievous stroke, I should like to quote three sentences from his speech at that time. On the 23rd June, 1982, he said, at col. 1046:
"Rent control is essentially the fixing of maximum rents below the level which would prevail in a free market. Thus it affords an incentive to an excess of demand and a disincentive to spontaneous response of supply. This has occurred whenever and wherever it has been introduced".

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In a single sentence, it is a self-evident truism from elementary economic analysis that, in peace or war, in North or South, in houses or in ham sandwiches, if the price is held below the market clearing level, the resulting excess of demand over supply will create a shortage. This prediction from basic theory is amply borne out by all the evidence, as the noble Lord, Lord Robbins, declared on that occasion.
More than 10 years ago at the Institute of Economic Affairs, with which I must declare some connection, we published a study entitled Verdict on Rent Control. It assembled researches by leading international economists, including three Nobel Laureates, on countries as varied as Austria, France, Sweden, the United States and Britain. The introduction was written by a foremost British authority, the late Professor Fred Pennace, who entitled his essay Fifty Years, Five Countries, One Lesson. The lesson was that rent control had done more harm than good by:
"perpetuating shortages, encouraging immobility, swamping consumer preferences, fostering dilapidation of the housing stocks and eroding production incentives, distorting land-use patterns and the allocation of scarce resources".
In every case that was studied, rent control was introduced as an emergency response to the disruption caused by war—after 1914 in Britain, Austria and France, and after 1940 in Sweden and the United States. Where control has been abolished, as in Sweden and most of the United States outside New York, the housing shortage has miraculously vanished. But wherever control has been perpetuated it has intensified the plight of people seeking even a temporary roof over their heads. For example, writing of rent control in Paris after 1945, the formidable, internationally famous philosopher Bertrand de Jouvenel concluded:
"It is self-perpetuating and culminates in both the physical ruin of housing and the legal dispossession of the owners. The havoc wrought here is not the work of the enemy but of our own measures."
In the debate last year, the right reverend Prelate the Bishop of Southwark gave a rather depressing glimpse of what might politely be called the ineffable innocence of Church thinking on these worldly matters. He reported his shock at seeing the urban devastation in New York, which he implied was due to inadequate public spending. In truth, that devastation is directly due to the usual ravages of rent control. My authority is a Professor Salins of the New York Department of Urban Affairs. In 1980 he published a book called The Ecology of Housing Destruction, with a more revealing sub-title, The Economic Effects of Public Intervention in the Housing Market. There he showed that public spending of more than 10,000 million dollars has not prevented the appalling deterioration and continuing destruction of the New York housing stock at the rate of 200,000 apartments every decade. In addition to reducing maintenance and construction, he showed that artificially depressed rents have increased demand and encouraged small families to occupy large premises. Professor Salins calls for the abolition of rent control and all its associated complexity of regulations. His conclusion on New York is, I believe, equally applicable to London and is as follows:
"There have been so many unsuccesful twists and turns along the path of well-intentioned tinkering that perhaps it is time to test the
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possibility that the generally reasonable incentives and disincentives of an unconstrained market might do a better job of allocating and conserving the housing stock."
I draw precisely the same moral from the First Report of the House of Commons Environment Committee, which was published last year. Paragraphs 100 and 101 confirm that a major cause of the decline of the rented sector, from seven million in 1945 to below two million today, was rent control and lifetime security of tenure. The impossibility of gaining repossession appears even more oppressive for small landlords than the derisory gross return of 2 per cent. or 3 per cent. on their capital. Evidence was given there that in the decade since 1970 what are, in my view, fraudulently called "fair rents" doubled, while prices trebled and earnings quadrupled.
Baroness Birk: My Lords, if the noble Lord will give way—and I realise that it is getting late and do not want to elongate the debate—I think he must agree that the whole situation in New York is entirely different from that in London. In New York you have apartments with very high rents. They have much more atradition of renting than home ownership because of the difference in space. Secondly, has the noble Lord seen some of the properties that people are renting at the lower end of the scale? I imagine that he is talking about property around Manhattan and that sort of area. Certainly nowhere in his quotations from the report of the Environment Committee does it state that a repeal of the rent control Acts would improve or increase the quantity of rented housing. In fact, when the Committee discuss it—and the noble Lord has read it all, so I shall not go over it again—they point out what has happened and also what would happen if this was reversed—that it would not make the situation better, but in fact would make it worse.
Lord Harris of High Cross: My Lords, we must set some limits to the chewing over of these events, because the whole of Professor Salin's report on New York concentrates on places like the Bronx. He is concerned with the poor end of the market of New York and not with Manhattan.
Paragraph 101, in the House of Commons Committee report, to which I have referred, says that:
"Most witnesses argued that a revival of supply in the [rented] sector would require the removal or reduction of rent and security controls, together with a growth of confidence that future changes in legislation and government policy would not reimpose tighter controls."
Baroness Birk: My Lords, would the noble Lord mind reading the following sentence?
Lord Harris of High Cross: My Lords, not at all. It reads:
"However, many felt that even this could not succeed and removal of controls would simply exacerbate housing stress without achieving acceptable housing conditions for those in the sector."
Baroness Birk: My Lords, thank you.
Lord Harris of High Cross: My Lords, they say that the majority of witnesses gave this view, and the witnesses included Shelter, the Small Landlords Association, Professor Donnison, Brighton Borough Council, the City of Manchester Council, Chestertons,

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and the Paddington Federation of Tenants and Residents Associations. I am establishing that no clear-cut view is handed down from the House of Commons report. It is all open for argument, and we propose to continue that argument.
From the evidence in that report I was surprised to discover that those who derive much satisfaction from baiting the landlords and working up prejudice in this matter argue that rents may be held low but the owners would gain from increased property values over a period of years. Yet in practice it is elsewhere acknowledged that a house with a sitting tenant might be lucky to fetch 20 per cent. of its market value with vacant possession. The whole point is that it is just such grotesquely falsified values that provide less scrupulous owners with a strong temptation to neglect repairs and get sitting tenants out.
Leaving aside the immorality of rent control, which I think should trouble its defenders rather more, the more down-to-earth economic question is whether repeal would bring more lettings onto the market at rents people can afford. I believe that clear evidence is provided by the orchestrated complaints about "loopholes", which take the form of holiday homes, company lettings, licences and shared occupancy in place of full tenancies. The success of these escape clauses in my view provides proof beyond any doubt whatever that, where the legalised theft of the Rent Acts can be avoided, new accommodation is forthcoming to relieve the distress of homelessness.
The best way to end the "loopholes" is simply to repeal these obstructive statutes by supporting the Bill of the noble Lord, Lord Vaizey, in the Lobby. The way to help the poor is not to control rents any more than it is to control the price of food or clothing. To distort the price system obstructs supply and demand, as we see to our cost in a quite different connection with the common agricultural policy.
In conclusion, I would emphasise (the noble Lord, Lord Vaizey, touched upon this) that poverty is the proper province of social policy and is best tackled by topping-up low incomes in some form. It should not be confused with general economic policy nor with policy on particular prices. Alas! it has to be said that for decades the Labour Party has won votes by confounding these wholly distinct issues to the detriment of both economic and social progress. It has further obstructed reform by reckless threats to restore or even to extend rent control, as we have been reminded that Mr. Crosland did—in my view, to his eternal shame—in 1974by destroying the market for rented premises. I take some encouragement that, now the Labour Party looks like being reduced to talking to itself and perhaps threatening one another, as special responsibility shifts to the Social Democrats as the alternative Government of the future. It only needs David Owen and the eagerly awaited Lord Grimond to teach the Liberals some economic sense for the repeal of rent control to open up the way for long-term reconstruction of the much needed market in rented accommodation.
7.10 p.m.
Lord Bauer: My Lords, as a relative newcomer I am somewhat hesitant to address the House on the repeal of the Rent Acts. I know much less about housing than some of the other speakers; certainly far less than my noble friend Lord Vaizey, or the noble Lord, Lord Harris of High Cross. However, I feel impelled to support my noble friend in his courageous effort to advance this important and deserving, if forlorn, cause, recognising that my remarks are, at best, a modest contribution, an optional extra, to the eloquent arguments of others.
When rent control was first introduced in 1915 it was on cogent social, political, even military grounds. As a result of wartime inflation prices and rents were rising faster than service pay, and the families of fighting men were evicted because they could not pay higher rents. Sixty-eight years later, in totally different conditions, after Governments have built many millions of houses and spent many millions of pounds, rent control and security of tenure are still with us. Here is an outstanding example of a policy introduced for compelling reasons but maintained, and even extended, after it had outlived its usefulness and has indeed inflicted massive social and economic damage over many years.
Lord Strabolgi: My Lords, I am sorry to interrupt the noble Lord, but would he not also say something about Rachmanism? When rent controls and security of tenure were taken off for a few years, as the noble Lord will recollect, we had Rachmanism—that terrible word which has passed into the language—and they had to be put back.
Lord Bauer: My Lords, with respect to the noble Lord, Rachmanism could only flourish because of the existence of rent controls.
There is virtually no market in rented accommodation. For unfurnished accommodation it has disappeared, except for luxury flats for the very rich. The same applies largely to furnished accommodation because of the extension of control to furnished tenancies.
Why is there a housing shortage, but no shortage of food, clothes, or, for that matter, motor-cars and refrigerators? The chronic housing shortage is only another name for rent control. If a maximum price is fixed below market clearing levels, whether for eggs or for rented accommodation, an excess demand emerges by definition. If this excess demand is sustained by fixed rents you have a permanent shortage. I shall not insult your Lordships by labouring such an elementary truism. But there are certain pertinent specific characteristics of the rental market, some of which it may be instructive to note.
For instance, each house is unique in space and therefore differs, often radically, from every other house even if in other respects it appears closely similar. Again, people's circumstances and their requirements for accommodation differ greatly with the size of their families, their age, their place of work, their preferences and many other variants. So while it is relatively simple to ration staple foodstuffs on the basis of requirements from the viewpoint of both

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equity and efficiency, allocating dwellings is altogether different.
Many people, indeed most people, who want to move, or have to move, must either buy, even if they prefer to rent, or they have to seek council accommodation. The allocation of such accommodation inevitably involves much arbitrariness. Where is equity in the allocation of a council flat between a young woman with a child, an elderely person or couple, or a small family? Their widely different circumstances and requirements lead inevitably to allegations of bias in the allocation of dwellings, but notably of bias on ethnic grounds in Britain, and also on sectarian grounds in Ulster. Hence the Labour Party proposal reported in The Times of 21st July 1981 that local authorities should:
"monitor their allocation policies by maintaining ethnic records".
Local authority allocation of accommodation, therefore, inevitably exacerbates communal tension. Once again we see the baleful results of the needless politicisation of economic life.
Not surprisingly companies find it easier to rent accommodation than do families; and foreigners, who can be expected to leave, can rent much more easily than British people. In Marylebone, where I live, the few advertisements for letting are apt to specify companies, banks, or embassies as tenants. Some advertisements are in Arabic, which I cannot read, but they are unlikely to be addressed to British subjects.
The hardships are not confined to people who cannot find rented accommodation. They extend to luckless landlords whose savings have been eroded or lost through investment in dwellings to let. Such victims are often people of modest means, like the taxi-driver and the tailor I know who have lost their savings in this way. Before rent control, the purchase of a house or two for letting was a popular and prudent outlet for working-class savings in Scotland and the North of England. This outlet has disappeared. At the same time, people who would prefer to rent are forced to buy. Finally, the damage that rent control inflicts on families and on the economy by inhibiting the movement of people between jobs and places is too familiar to deserve more than mere mention.
Like controlled tenants, all Members of this House enjoy at least life tenancy of their seats. This imposes the obligation to be ready to support a politically unpopular cause, if we think this is in the best interests of our fellow men. The Bill of my noble friend is a conspicuous example of such a cause, and therefore of the corresponding obligation. I unhesitatingly support the Second Reading of this Bill.
7.18 p.m.
Viscount Mountgarret: My Lords, I appreciate that the words "abolition of controls relating to properties" are rather like a red rag to a bull to the party opposite. However, I would ask the noble Baroness, Lady Birk, before she says categorically that there is no way in which she and her party could support the Second Reading of this Bill, to consider for one moment what we are trying to drive out, or what I believe my noble friend is trying to drive out, and what I believe the Government might well support.
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This Bill as it stands is a vehicle to enable us to debate the provisions of the various Rent Acts in generality, in the hope that it will give rise to a Committee stage where we can then start to amend the more iniquitous parts of the various Rent Acts which have a genuinely bad effect, and operate detrimentally to many perfectly bona fide landlords. I believe that that is the purpose of this Bill. If we can give it a Second Reading and proceed on those lines, then we shall be able to get some good amendments down in the Rent Act proposals in this Bill.
Baroness Birk: My Lords, I appreciate what the noble Viscount has said, but it is not good enough to say that one should support something which is quite wrong. He described it as a vehicle, and then suggests that all the parts that we find distasteful can be changed at Committee stage. This is completely impossible. He must know this if he has read the Bill—and obviously he has—and sees the repeals. If he is arguing in favour of having just a discussion on it and perhaps coming forward with other recommendations, that is different; but we are discussing the Bill before us. We cannot be discussing whether we should give a Second Reading to something which may be turned on its head at Committee stage. That is not what we are discussing.
Viscount Mountgarret: My Lords, l take the point of the noble Baroness, but, equally, I am quite sure that there are very few Members of your Lordships' House who could really go so far as to agree to abolish all the provisions of all the Acts referred to in this Bill. There are very many points in the various Rent Acts which are highly desirable and necessary. The establishment of rent officers, and that sort of thing, is entirely necessary. You have arbitrators to arbitrate on agricultural rents; and I think that it is perfectly correct to have rent officers to arbitrate between landlord and tenant if there is disagreement. I think that is perfectly fair.
The objectionable parts are the provisions whereby it makes it virtually impossible for a bona fide landlord, a private landlord, to get his property back, within reason, when he wants to do so. The noble Lord, Lord Strabolgi, reterred to "Rachmanism" as being-a dirty word in past history. I agree entirely with him. But the trouble is that in our enthusiasm to despatch Rachmanism to the depths of the deepest, darkest jungle we are tempted to throw out the baby with the bathwater; for not only did we throw out Mr. Rachman but we threw out also a great number of perfectly harmless landlords—if I may say that landlords can be harmless. We threw them out, too. This has been shown up to be highly inconvenient, to say the least, and, I think, wrong in principle.
With the necessary reduction—and, if I may say so, I refer to rural establishments, for I do not profess to know anything at all about metropolitan areas—of workforce on farms and estates in the country, and with smallholdings falling in, and so on, there has been a greater number of very attractive rural houses and farmhouses coming on to the market. These would have been available for renting by the owner as he found that he was not able to replace the agricultural or estate worker who had been in his employ because he had had to cut back.

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The position on that is that if he enters into an agreement with another person who wishes to be a tenant and they both agree between them that there is a property for letting and "you may have it for a period of (shall we say?) six years" at a fair rent of whatever it is—say, £10 or £15 a week—then it does not matter that the agreement has been drawn up legally by a solicitor and that the tenant has been represented legally, or advised. The fact of the matter is that the moment that person enters the house and pays his first rent in excess of two-thirds of the rateable value of the house, that man has absolute, totally-protected tenancy in that house for the rest of his life if he so wishes. This must be stupid.
I should have thought that it was highly desirable to get to the stage where owners can freely negotiate fair and reasonable agreements, duly witnessed, duly signed, and duly advised by legal people, and to let the tenants have as much advice and help as possible. When that agreement has been reached, then I believe that it is only right that it should be allowed to stand and not be superseded by some Act of Parliament which acts contrary to the interests of both landlord and tenant.
Therefore, what happens is that if the landlord finds himself in the position of being unable to let his property in a way that can be beneficial to him—and, after all, he has a right to have things beneficial to him, because it is his capital and his investment, and he is entitled to have a fair and reasonable return—then that property stands empty. Who benefits by that? Nobody!
Reference has been made to the local authorities and to the difficulties that they have of finding housing for people on their lists. Yes, indeed, they do; but it is not very helpful to the local authorities if they can see around them numerous empty houses which are not being occupied for the very reasons that I have shown. Furthermore, the authorities, or some of them, understandably set to work to impose rates on unoccupied properties so that the landlord is then faced with the expense of maintaining his house and having to pay rates on it, and getting no income there from. It seems to me to be a very unsatisfactory situation. Fortunately, we have recently passed an Act relating to shorthold tenancies, to which I believe reference has been made this afternoon. There, again, while going some way to alleviate this problem, it is still highly unsatisfactory.
I shall quote, if I may, from personal experience. I probably have at the moment four or five houses occupied by shorthold tenants. They are farming people, they are awfully nice, they are terribly happy, and they pay a fair rent, agreed between us. But if that tenancy is renewed more than once, then that property falls under the Rent Act 1977 (I believe) and it becomes a protected tenancy. This means, in effect, that there is a perfectly decent person living in one's house at a fair rent, he has his tenancy renewed once and, after that, he has to vacate the house; otherwise, I would lose control of the availability of repossession. I think that this is most unfair. I have had this happen to me on more than one occasion. I have had to ask the person to leave and I have had to have somebody else to come in. This seems to me to be most
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unsatisfactory, and nobody regrets it more than I do.
I think that there are areas of these Rent Acts which do need looking at and tidying up so as to try to help the tenants as well as helping the landlord. Therefore, I hope that the House will give my noble friend's Bill a Second Reading so that we can proceed in the way that I suggested in my opening remarks.
7.27 p.m.
Lord Monson: My Lords, I must start by declaring an interest, albeit a technical one. I happen to let a number of houses and cottages, but I am happy to let them at less than the market rate for what might be termed conservationist reasons, if that does not sound priggish. In other words, I prefer to let them to village people at a so-called fair rent rather than let them to commuters who may be willing and able to pay the full market rent which, of course, is generally higher, and sometimes considerably higher. So this Bill, if it becomes law, would scarcely affect my position one way or the other.
Most landlords, whether private or institutional, cannot afford to adopt this policy. After all, the so-called fair rents represent an average return of less than 2 per cent. on the capital value of the property, which is clearly ridiculous. This is why the pool of privately-rented accommodation is declining remorselessly year after year. It will go on dwindling virtually to extinction unless this Government start to do something about it.
Surely, no unbiased person can doubt the need of a pool of accommodation to let. I was interested to read a few months ago an article by the right honourable friend of the noble Baroness, Lady Birk, Mr. Gerald Kaufman, in The Times, in which he cogently questioned the Government's apparent belief that 100 per cent. home ownership is the panacea for all Britain's housing problems: the noble Baroness made much the same point. I think that the noble Baroness is right on this point, as was Mr. Kaufman, which makes it all the more regrettable that the Labour party as a whole is apparently ignorant of the full implications of the law of supply and demand as expounded so eloquently just now by my noble friend Lord Harris of High Cross.
To return to the issue of renting versus buying: as I pointed out in a debate on the Housing Bill during the last Parliament, it is not a great deal of use allowing an unemployed shipyard worker in, say, Cathcart to buy his council house at a discount. If he is offered a job in Britain's equivalent of the "sun belt", in other words, the area around Bracknell and Reading, he would be unlikely to be able to take it up. Either he would be unable to find a buyer for his house in the less fashionable part of Glasgow or, should he manage to sell it, it would realise less than one-third of the price of an equivalent house in Berkshire.
A larger pool of houses available for letting would not perhaps totally overcome this problem, but it would certainly provide a great deal more flexibility and would help with the mobility of labour, which we all agree is necessary for Britain's economic recovery. It is noteworthy—is it not?—that in many countries richer than our own, notably Switzerland and West Germany, the proportion of houseowners is much

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lower than in the United Kingdom. Conversely, in many countries much poorer than our own—notably some of the Eastern bloc countries—the proportion of home owners is much higher than in this country. There is therefore no correlation between the degree of home ownership and the degree of national wealth, whether it be measured by GNP or by any other criterion. Indeed, there are some who would claim that the excessive fiscal incentives to home ownership and home improvements given by all Governments since the war—and especially Conservative Governments—have been in part responsible for starving British industry of the capital investment needed for modernisation and expansion.
It might be argued by some, and certainly it has been argued by the Labour Party, that this Bill goes too far and that the problem could be solved by "tinkering" with the fair rent provisions. Undoubtedly some improvements could be made here. Wages are raised annually; salaries are raised annually; and of course repair costs go up annually: so why should not rents go up annually also? If it is objected that this would throw too much of a burden on overworked rent officers, then at least rents should be raised annually in line with the retail price index, as an interim measure.
Then again, in the Second Reading debate on the Agricultural Holdings Bill earlier this week speaker after speaker emphasised that the agricultural landlord was less interested in maximising his rent than in finding and retaining a good and responsible tenant. Exactly the same considerations motivate the small private landlord, who is generally happy to accept a good tenant at a moderate rent, possibly below the highest rent he could obtain in the open market. But the corollary is that the good landlord must be able to get rid of a bad or irresponsible tenant much more easily than he can at present—a tenant who keeps the house like a pig sty (a house, after all, that the tenant may wish his son or daughter to inherit in due course), the tenant who wrecks fixtures and fittings, or who plays his record-player at full blast at two in the morning, or the person who does not pay his or her rent. At present eviction procedures are far too cumbersome and expensive, and it is almost impossible to reclaim unpaid rent in such circumstances. I have no doubt that these two measures alone would bring more property on to the market—but not enough. This is why the Bill of the noble Lord, Lord Vaizey, is so important.
I can anticipate one argument which may be raised against this in another part of the House. It is concerned with accommodation in London. Britain is after all a tax haven—not for Britons but for people from overseas. It is also one of the safer places in the world for wealthy people to live in. There are fewer kidnappings, fewer muggings and fewer political assassinations than in virtually any other capital city in Europe, North America and certainly in South America. As a consequence, there are huge numbers of overseas people buying property in London: Arabs, Iranians, Greeks, Italians, Nigerians and of course Hong Kong Chinese, to whom we owe special consideration at this critical time. There is one well-known estate agency which sells one-third of its property to people from overseas.
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Many of these people come from countries where very little or no tax is payable, either income or capital taxes, and consequently they have money almost coming out of their ears. They can afford to pay the earth, and often do, for houses or flats, whether purchased or rented. This, of course, has a ripple effect in sending up the prices of more modest property all over London and in the London suburbs. I wonder whether the law of supply and demand can function properly in such circumstances. If not, perhaps some exception to decontrol might have to be made for the London area alone.
There is one other prerequisite for effective decontrol. At the moment the taxpayer subsidises the house buyer, the taxpayer subsidises the council tenant; but the landlord subsidises the private tenant: I have a feeling that the noble Baroness, by implication, agrees with this. If the landlord is no longer to subsidise the private tenant then the taxpayer must do so, whether by means of tax relief on rent paid or by some variation of the option mortgage scheme suitably adapted, or in some other fashion, so as to put the private tenant on an equal footing with the council tenant or the house buyer.
All these qualifications and provisos demonstrate how important it is to discuss this Bill in Committee. Decontrol, with its enormous potential long-term benefits to the country at large must be discussed openly and not swept under the carpet any longer. For that reason I urge your Lordships to give this Bill a Second Reading.
7.36 p.m.
Lord Coleraine: My Lords, I rise to speak in sympathy with my noble friend's Bill because it contains a number of the radical changes which I myself would have wished to see enacted by the party which I support when it returned to power four years ago. Then would have been the time to liberate the private landlord and his tenant, to allow time to demonstrate again that responsible contractual freedom can be made to work. Nevertheless, now may not be too late.
I propose to address myself to but one of the radical proposals which my noble friend's Bill encompasses: the abrogation of the three-generation hereditary Rent Act statutory tenancy. Such tenancies can run for three generations, as can an agricultural tenancy, and much more easily. A child need only have resided with the parent tenant for the six months prior to the parent's death in order to claim a statutory tenancy for his life after the death. It is perhaps by a happy chance that your Lordships have this week discussed the provisions of the Agricultural Holdings Bill, because that Bill and my noble friend's Bill are both directed to sweeping aside fossilising legislation and creating a climate in which farms in the one case and homes in the other are again freely available to be rented.
One of the two arms of the machinery by which the Government propose to conjure up new agricultural holdings for letting is the giving of confidence to landowners by doing away with the three-generation agricultural tenancy. So, whatever other view my noble friend on the Front Bench may express about the Bill when he comes to reply, I hope that your Lordships may hear that the succession provisions of

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Rent Act legislation providing for three generations in succession are seen as inherently unsatisfactory.
I should like briefly to refer to the Agricultural Holdings Bill to throw some light on the Rent Acts. Your Lordships will know that if a young unmarried farmer took a tenancy in 1975 he then acquired under the 1976 Act rights of security for his unborn issue to the second generation. The 1976 Act acted retrospectively against his landlord, but that Act is not to be reversed under the Agricultural Holdings Bill, as I understand it. For it seems that is thought to introduce retrospective legislation against the unborn son—for in the example I am inventing the farmer is still unmarried. The effect of only abolishing the three-generation succession in respct of tenancies entered into after the passing of the Act will be to create the potential for three separate and divisive anomalies between pre- 1976 Act tenancies, post-1976 Act tenancies and post-1983 Bill tenancies.
So I say to your Lordships that, as regards the Rent Acts, the statutory succession rights of later generations should go, and should go in respect of all tenancies. Only those tenants who have already succeeded should be protected by the principle that retrospective legislation is bad legislation. I support my noble friend's Bill and wish it a Second Reading because, on balance, I consider that to pass the Bill would be better than to leave the law as it stands.
7.41 p.m.
The Earl of Selkirk: My Lords, may I intervene for one moment? I agreed with the noble Baroness, Lady Birk, and I very greatly suspect that the Government draftsman would not find the terms of this Bill wholly congenial. But there is a really major principle involved in it and I should like to speak to that for one moment.
We have raised quite enormously the standard of living in this country in this century. This has been greatly due to home ownership which has been very much extended. Quite frankly, it is the work of building societies and it has nothing to do with the mass of Housing Acts which have passed through Parliament over and over again, and which have contained a great deal of heat and fury, which is not always the best basis for economic development.
We are in the position that owner-occupation is going forward extremely well. Local government houses have served an extremely useful purpose and will long be wanted, particularly for older people. I have no doubt about that. But the weak part of the situation in this country is rented property. Rented property is an essential element of our society and it is gradually being killed by the mass of legislation which is going through.
I agree entirely with my noble friend Lord Harris that we have made a mistake in using rented property for social purposes. That is wrong. Rented property should be given a free market on its own basis, and the social problems, which I accept are severe and must be dealt with, should not be used to turn the whole element of rented property upside down. I particularly ask the Government to look at this.
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The noble Baroness, Lady Birk, is afraid that the rents will be too high. But if they are too high nobody will rent a house, so nobody will build a house, although I expect that some clever builders will find houses which can be rented. But in present circumstances there will be no houses at all to rent, and then we shall not need to worry about them. As the noble Baroness said, it is easier today to buy a house than to rent one. That is an absurd position and it is one which merely impedes the economic development of this country. If necessary, I shall vote for this Bill, because it is of national importance that the Government realise that they must take action to open up a rented market of some kind or another.
Baroness Birk: My Lords, I have recently been on the same side as the noble Earl on the subject of housing, and I know that he has a great deal of compassion as well as common sense. But how does he propose to deal with people who cannot afford what he might consider to be a moderate rent? Is he prepared to tell the Government that they should increase public expenditure on house building in the public sector, so that people of lower means can afford to rent a house and live in it? Otherwise, they will be entirely squeezed out and the situation will get much worse.
The Earl of Selkirk: My Lords, the noble Baroness realises quite well that poverty is a separate question from housing and should be dealt with by social legislation. If you told ICI to operate a social policy rather than a profit policy, they would go bankrupt in no time. The housing market should be able to work on its own and, where there is hardship and severity, that should be dealt with as a social problem. That is the point I am making and it is quite wrong to upset the whole market by turning it into a form of social subsidy.
Lord George-Brown: My Lords, I have been listening to this debate and was not intending to intervene. I do not know very much about the subject, except that I was poor. As I listened to a stinkingly rich Labour Front Bench, I remembered what Bernard Shaw used to say. Solicitors, lawyers, landlords on that Bench know more about what the poor need than the poor themselves know. I agreed so much with what the noble Earl has just said. Okay, when we are poor, deal with us, help us, as a matter of social service, but do not deny us housing. What I do not think the noble Baroness understands, and what I do not think any lawyers or solicitors understand, is that we will not rent a house or a flat unless it is within our means and, at the moment, it is not. Properties are not being offered for let. I wish that the Labour Party would get hold of the point that they are denying to our people what they want, which is the ability to rent.
I shall give my vote to the Second Reading of this Bill just because it might open up the whole argument. Whether it is good in the end, whether it will come out quite as it goes into the sausage-machine, I do not know. But I want the argument opened up and I want the noble Baroness, Lady Birk, who, after all, is frightfully rich, to understand what some of us who are not frightfully rich understand—
Lord Underhill: You are better off than I am.
Lord George-Brown: My Lords, the noble Lord is in the same situation as I am, except, of course, that he has a rather bigger pension than I have. So he is a little better off than I am. I know exactly what his pension is and he is a bit better off than I am. But neither of us is quite in the class of the noble Baroness, Lady Birk—
Baroness Birk: My Lords, I think that the noble Lord is overestimating. Furthermore, this debate is about housing. The noble Lord has said that he will support the Bill, which I do not think has to do with anybody's income. Unfortunately he is as wrong about my financial status as he is about the Bill.
Lord George-Brown: My Lords, if the noble Baroness really wants to challenge me about her situation and that of Mr. Ellis Birk, I will be challenged. She is exceedingly and, by my standards, quite stinkingly rich, and I suggest to her that she does not challenge me on that. She is in the millionaire class.
Baroness Birk: Do not be so silly.
Lord George-Brown: I am not being silly. The noble Baroness is very rich. I would advise her to leave that alone. We are talking about poor people who need to rent flats in London and I think that they will be helped by passing this Bill. They will not be helped if we refuse it a passage. The noble Lord, Lord Ponsonby, is another landlord. The Labour Front Bench is now made up of landlords, solicitors and rich people. Could somebody speak for poor people? I, as an SDP member, am happy to speak for poor people and I consider that we ought to pass the Bill.
7.49 p.m.
Lord Skelmersdale: My Lords, I find myself in some embarrassment at the end of this debate, not because of what the noble Lord, Lord George-Brown, has just said, but because two hours ago or thereabouts I made a speech in your Lordships' House in which I said that the principle was not at issue. We were talking about details. Here, with the greatest respect, it is the other way round and I hope that I do not get myself too muddled.
I should like to thank my noble friend Lord Vaizey for giving this House the opportunity to discuss a subject upon which feelings run very strongly—the private rented sector. It is the first time that the subject has been debated in this House since the last general election. I also recognise my noble friend's close interest in the subject. As he mentioned, the debate on housing policy in this House in June of last year was prompted by his Motion calling attention to the difficulties created by current legislation affecting the relationship of landlord and tenant. Much of that debate centred around the situation that now exists in the private rented sector—as, indeed, has this.
At this point I should say that it is with very much regret that my noble friend Lord Bellwin, who has vast experience in this field and who served on the Francis Committee of Inquiry into the working of the Rent Acts, is not able to be with us today.
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I have listened with great interest to the points which have been made during the course of the debate. But when I say that the debate is about principle, I mean that I do not intend to answer at this stage the detailed points which have been raised. If by the time I have made my speech noble Lords feel that it would be in the interests of the House that I should do so, I shall be very happy to comply. However, I should like to pick up one point that was made by my noble friend Lord Mountgarret. He said that this is a marvellous opportunity to go into Committee and look at areas which need to be looked at. May I remind my noble friend that, as the noble Baroness, Lady Birk, said, we are debating the Bill in front of us as it stands. If we were to follow his ideas, as he would have us do, we should be in Committee for weeks. He knows, and my noble friend Lord Selkirk knows with his long experience of this House, that this is not the way we operate. Speaking now as a representative of the noble Viscount the Leader of the House, I would say that in my opinion—and, I am sure, in his—this is not the way that the House should be treated.
I must begin by stressing the importance this Government attach to this particular sector of the housing market. I know that much has been made of the decline in the number of homes available for private renting and I know that this is one of the considerations which my noble friend took into account when formulating the Bill before us today. But let me remind the House—a point touched on by the noble Baroness, Lady Birk—how important a part the private rented sector still plays in the housing market. As recently as 1981, as the latest Census information shows, 11 per cent. of English households—some 19 million households in all—fell within the private rented sector. And the comparable figures for Wales, Scotland and Northern Ireland confirm that private renting is still a significant force in the United Kingdom as a whole. Altogether, we are talking of 22 million households, out of a total of 21 million households in the United Kingdom.
My noble friend Lord Selkirk was obviously bearing this point in mind when he spoke, but he went on to say that the private rented sector was the weak link in the Government's housing policy. I did not see a smile on the face of the noble Baroness, Lady Birk, at that point, but she might well have wondered to herself, as she has on other occasions out loud, whether in fact the Government have a housing policy.
Whatever policy is decided upon with regard to the private rented sector, it has to take these figures into account. But as my noble friend Lord Vaizey also reminded us, the sector is particularly important for certain groups of people who, for varying reasons, do not wish or cannot buy their own homes and are not housed in the public sector—particularly, as we have heard, the elderly, the young and those who need to remain highly mobile.
For these reasons, and for others which will I hope become apparent, this Government are fully committed to the private rented sector. We recognise that it has a vital role to play and that this role will and must continue in the future. I should therefore like to make it quite clear that our commitment is a continuing one, and I am delighted to have the opportunity to reaffirm that commitment today.

1027
The Government are not insensitive to the problems which exist in the private rented sector. To demonstrate this, I should like to spend just a few moments reminding the House of our efforts and achievements in this field since the previous Administration took office in 1979. The situation then was that the Rent Acts, by conferring lifetime security of tenure on tenants and up to two successors, were deterring landlords from letting and were leading to a decline in the role of the private rented sector in meeting housing need—a fact referred to by my noble friend Lord Coleraine. That is why, in the Housing Act 1980, we introduced a number of important measures designed to remove disincentives to letting and therefore encouraging expansion in the private rented sector—measures, incidentally, which my noble friend Lord Vaizey poured a considerable amount of cold water upon in his introductory speech.
One of the most significant of these—my noble friend mentioned it briefly, as did the noble Baroness, Lady Birk, though, I felt, with a rather jaundiced view—was the introduction of shorthold, under which non-resident landlords are able to let for a fixed term if they wish, provided that certain conditions have been met. The 1980 Act also made it quicker and easier for resident landlords to regain possession of the part of their homes that they have let. My noble friend Lord Vaizey suggested that anybody contemplating a stay abroad would be unable to let their home during their absence for fear of never getting it back again. With respect, this is simply not so. The 1980 Act made significant changes to safeguard the ability of temporarily absent owner-occupiers who let their homes to regain possession, and to do so speedily. Providing owner-occupiers let under Case 11 of Schedule 15 to the Rent Act 1977, they can claim "mandatory" possession. This means that the court must grant possession in appropriate circumstances —for example, when the landlord wants to return to his house and live in his own property.
The Act also made a number of changes to the rent registration system, including a reduction in the period before which a rent can normally be reviewed from three years to two. The procedures for the registration of fair rents were simplified and the provisions regarding the payment of rent arrears strengthened.
My noble friend did not mention another form of tenancy to emerge from the Housing Act 1980—assured tenancies. The response to the assured tenancies scheme has been most encouraging. So far, well over 100 bodies have been approved to let property on assured tenancies outside the Rent Acts, and new applications continue to arrive. I see great opportunities for this scheme and wish to see it continue to grow. It serves a valuable purpose in helping to meet the market which undoubtedly exists for good quality housing for rent, and it does so on a basis that offers a real incentive for fresh long-term investment in privately rented accommodation.
The Housing Act 1980 applies only to England and Wales, but the Government's initiatives in the private rented sector do not stop there. In Scotland, broadly similar legislation has brought about a simplification of arrangements for private renting. In Northern Ireland we have recently introduced shorthold by
1028
means of the 1983 housing order, and since the introduction of the 1978 rent order there have been five annual reviews of rent levels, leading to far more realistic increases in those rent levels. Through the housing order we have brought about changes in the administration of the rent order, following a review of the working of the order. The arrangements governing the improvement grant system in Northern Ireland have also been strengthened to provide further incentives to private renting.
I readily admit—a point made by the noble Baroness—that the impact of these measures has so far been limited. For one thing, it is too early to make any final judgments about new initiatives, such as shorthold and the assured tenancy scheme, although the first signs are encouraging. More disturbingly, the destructive attitude of the party opposite, particularly their threat to abolish shorthold if they ever regain office, has, I believe, discouraged many lettings in the private rented sector which might otherwise have expanded the sector. One might have hoped that the Labour Party's 1983 manifesto would reveal a more enlightened attitude. That hope would have been in vain. The threat to repeal shorthold was trotted out once again, together with a package of measures imposing even more restrictions on private landlords. For some inescapable reason—inescapable, at least, to me—this was then topped up during the campaign with a commitment to an immediate one year rent freeze. Little wonder that the electorate so decisively rejected that manifesto on 9th June.
To say that the Bill before us today goes in the opposite direction to the Labour Party's approach to the private rented sector is, I suppose, something of an understatement. The Bill seeks to remove all controls upon private renting. This will be achieved by repealing all the legislation listed in the schedule to the Bill. There are, of course, a number of technical defects in the schedule, but I do not think that I need go into them at this moment. My noble friend made the general intention of his Bill perfectly clear.
The Government have some sympathy with the points of view which have been expressed by my noble friend, by the noble Lord, Lord Harris of High Cross, and by other noble Lords during the course of this debate. But perhaps I might remind the House of a speech which my honourable friend the Minister for Housing and Construction made at this year's Conservative Party conference. He said something to the effect that the long period of legislation designed principally to protect tenants had dried up the supply of the very accommodation which in some parts of the country is desperately needed. He reckoned that successive Governments had succeeded unwittingly in injuring precisely those whom they were trying to protect.
Having recognised the problem (which everyone in the House today has) the question is: what should be done about it? My noble friend's Bill is certainly one approach, but it is, I submit, an extreme one, and its effect would be far-reaching. It would remove all protection on rents and security from all tenants to whom the Rent Acts apply. It is not a course of action that should be embarked upon lightly, and the Government would need strong convincing that to move in one bound to a totally free market represented

1029
the right way of tackling the complex issues of the private rented sector.
When he spoke at Blackpool, my honourable friend said that he would be re-examining the private rented sector and reviewing all present legislation to see whether it can be improved. He did so in a way that made it perfectly clear to me and to others of us in that hall who were listening that he intended to adopt a fair approach. He was determined that in our policy we must ensure that tenants can still feel secure in their homes and get a fair deal for the rents that they pay: but, equally, that landlords must have the confidence to continue letting and, it is to be hoped, increase their lettings.
But the result of such a review would of course need primary legislation and a considerable slice of Government time. I cannot say today what the outcome of the Government's current look at the private rented sector legislation will be. The issues are complex and require careful consideration; but I would ask the House, in considering its attitude to my noble friend's Bill, to exercise patience and to remember that the Government have this whole area under review.
At the very beginning of my speech I referred to the words of my noble Friend Lord Mountgarret, and perhaps this is the appropriate moment, as I finish my speech, to return to the main point, as I see it. The purposes of Private Members' Bills in this House are many and varied, and I know that I do not have to elaborate on that subject today. I do feel, however, that the House has had a very useful Second Reading debate at a most opportune time in view of my honourable friend's intentions to study this whole problem.
I agree with my noble friend Lord Vaizey that the situation in the private rented sector is far from perfect, and I have listened with great interest to the views expressed in our debate. I trust that my noble friend will be guided by the Government's general intention of giving fair treatment to the landlord as well as the tenant, and will not press for the adoption of such a dramatic approach as is implicit in this Bill—which, I say again, is the one subject we are debating this evening.
The views of my noble friend and of other noble Lords have been fully aired today, and I would ask my noble friend to consider most carefully whether, to coin a phrase, the right approach would be to treat this discussion as a Short Debate and not to press for a Second Reading of his Bill tonight, but to withdraw it now. In the unlikely event—and I hope that it is an unlikely event—that this matter comes to a vote, I will not, therefore, feel able to join my noble friend Lord Vaizey in the Division Lobby.
8.6 p.m.
Lord Vaizey: My Lords, ours has been an interesting debate and I will not follow the usual winding-up procedure of going through each speech in great detail. I must, However, refer to the noble Baroness, Lady Birk. Not being her Inland Revenue inspector, I am not as expert as perhaps I might be on the subject, but in the first of the noble Baroness's five speeches this evening she argued that this measure was monumentally irrelevant. I believe we had hoped that
1030
the achievement of a new leadership for the Labour Party under two very interesting and sensible people in the House of Commons would have led to some attempt to use the next five years to rethink some of the basic questions which come before Parliament. Personally, I found all the noble Baroness's speeches monumentally irrelevant—and, I will say why if I may, without going into the details of the House of Commons Select Committee report which seems to have formed so large a part of the debate.
First, there is no doubt at all that if it were possible for home owners to let their houses the supply would rise dramatically. The central point which I argued in my speech and which I hope will figure very prominently in my honourable friend's thought processes as he addresses himself to this question is that as the number of home owners rises in society the number of occasions on which those home owners would wish to let their own property to other people for short or long periods will increase. This has been true in every other society in the world where there is no rent restriction of the very onerous type that we have. In the growth of other forms of tenure (mostly home ownership) and the fact that, as I understand it, only four houses have been built for rent under the provisions of the 1980 Act so far—and this is 1983—one is absolutely reinforcing the point made so eloquently by many of your Lordships.
The second point I wish to make concerns the noble Baroness's statement that the law of contract is incredibly inequitable as between a rich person and a poor person. But when one goes into Sainsbury's or Marks and Spencer's one is dealing with huge concerns owned by people whose income tax inspectors would doubtless speak very interestingly about the amounts of money those companies make. But do we feel oppressed? We enter into a contract to buy commodities from them, and they have been major architects of the rise in ordinary people's standards of living.
Baroness Birk: My Lords, I did not really wish to interrupt the noble Lord again, but he cannot really compare going into Sainsbury's or any other shop with housing. The reason why it is inequitable is because there is such a shortage of housing; it is not a choice between one soup or another.
Lord Vaizey: My Lords, if the noble Baroness will contain herself from making a sixth speech this evening, there would of course be an acute shortage of kippers—you would have to go into Sainsbury's and bribe the checkout girl to get you some kippers—if the law said that the price of kippers should be the same as it was in 1915. If the noble Baroness, despite her intelligence, beauty, cleverness and wit, cannot appreciate that point at this stage in the evening, I somewhat despair. What a view she has of her fellow citizens!
It is also interesting that every reference to a tenant is to somebody absolutely on the brink of destitution. My Lords, the people who want to rent accommodation are precisely people like us, people in ordinary jobs, in ordinary occupations, who earn ordinary incomes, who want to get somewhere to live. At the moment the only people who can rent accommo

1031
dation, other than from the council, as was eloquently pointed out, are rich Arabs and diplomats, people who live in the posher areas of London, Regent's Park and so on. It is just not possible to argue to the contrary. Lord Hams of High Cross really did hit the nail on the head when he pointed out that in the last housing debate and in this debate every single economist in the place saw that obvious truth, and, were Lord Roberthall here tonight, judging from his contribution to the debate we had in June 1982, 1 have no doubt that he would say now what he said then.
These Acts were conceived in wartime shortages. They have now become a vested interest which one declining political party feels it needs to back because it gets votes. The disappointing aspect of my noble friend's otherwise extremely amiable and comprehensive reply to the debate—his statement of the Government's position—was that even in so handsome a position all he can say is that they will hold the matter under review. My Lords, I quite frankly do not feel that that is good enough. The fear of Rachmanism, as was pointed out so eloquently by my noble friend Lord Bauer, arose precisely because the houses were not decontrolled. Rachman's game was to push the people out because they were protected. The law did not protect them adequately, nor does it now. That is why there is so much work for liberal-minded solicitors like the noble Lord, Lord Mishcon, who interrupted me earlier.
My Lords, I do hope that the House will support me in the Lobbies on this Bill.
8.12 p.m.
On Question, Whether the Bill shall be now read a second time?
Their Lordships divided.

Division no. 1

CONTENTS

Bauer, L.

Monson, L.

Coleraine, L.

Morris, L.

Croft, L.

Rugby, L.

Ferrier, L.

Spens, L.

George-Brown, L.

Vaizev, L. [Teller.]

Harris of High Cross, L.[Teller.]

NOT-CONTENTS

Dean of Beswick, L. [Teller.]

Stoddart of Swindon, L.

The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, as it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 54 I declare the Question not decided, and the debate thereon stands adjourned.

Non-Oil Visible Exports
8.21 p.m.
Lord Ezra Lord Ezra rose to ask Her Majesty's Government what steps they are taking to stimulate non-oil visible exports.
The noble Lord said: My Lords, I have put down this Question on the Order Paper because of the
1032
increasingly serious trends underlying the overall balance-of-payments position. On the face of it, we are doing quite well in the current balance with a surplus of £6½ billion in 1981 and a surplus of £5½ billion in 1982. There is the prospect of a further surplus this year although it will be considerably lower, perhaps £1½billion or less. But this satisfactory overall position conceals a very serious underlying prospect and in order to identify that it is necessary to analyse the figures. I have been helped in this by information, provided by the Department of Trade and Industry, which is in addition to that published in the normal returns.
If one takes the first nine months of this year we shall have earned, overall on our balance of payments, £568 million. That is the net balance and compares with £3,008 million for last year. Therefore, that has gone down quite substantially. If one then looks at the invisible balance it will be seen that this year we have earned some £1,800 million compared with about £2,000 million at the same time last year—more or less in line.
Here we should pay tribute to those who build up this invisible balance, because in gross terms it is very large indeed—about £30 billion. But the costs arising abroad due to defence and other commitments which have to be met reduce this to about £2 billion or £3 billion annually. That is a very important contribution to our balance of payments.
Much the most striking aspect of the balance of payments in recent years has been, of course, the increasing amount we have earned from North Sea oil. In the nine months of last year we earned £2.8 billion. This year it has gone up to £4.8 billion. So there is another £2 billion out of that. The problem of the North Sea, as we all know, is that it is a limited resource and figures provided by the Government in answer to a Question in another place suggest that the peak level of earnings from the North Sea could well come in 1985 or 1986. That is practically tomorrow. From then on, although there will continue to be earnings from oil for many years, the likelihood is that it will be on a diminishing scale.
I would now like to turn to the real nub of the issue; that is, the massive deficiency that has built up this year on our non-oil visibles. At the present time—that is, on the nine months figures—it stands at no less than a deficiency of £6 billion compared with less than £2 billion last year. If one looks within that figure it will be seen that, as has historically happened in this country, we have run a deficiency on food and beverages. We do not produce enough for our own needs. Moreover, we always have a deficiency on basic materials. But historically we have been able to pay for those things that we have to import by what we have earned on manufactures and on invisibles.
Invisibles are still showing us a benefit, but it is most regrettable to note that for the first time since 1931, according to information provided by the noble Lord, Lord Lyell, in response to a question put to him by the noble Lord, Lord Hatch, who is to speak later, we are running a very substantial deficit on manufactures. In fact, it is rather horrifying because for the first nine months of 1982 the surplus earned on manufactures was £1.8 billion. For the first nine months of 1983 the

1033
deficit on our manufactured balance of trade is practically the same: namely, £1¾ billion.
It does not take much imagination to consider what could happen if this sort of situation continues on manufactures, or perhaps even gets worse, and at the same time the benefit we have derived, and are deriving, from the oil balance diminishes. I am afraid that the prospect that that opens up is that, within a very limited period of time, we could be back into a chronic balance-of-payments deficiency. We all know what that means: the tightening of the belt; the loans from the IMF; the stringent conditions we would have to observe and the reduction in living standards. That is, of course, one possibility. I am with all those who hope that it will never happen. But the importance of this debate tonight is to make it quite clear that this could be on the cards and that the positive results in our overall balance of payments masks this potentially very serious situation.
I know that the noble Lord, Lord Lyell, will he replying and I would at this late hour like to lighten his task by suggesting certain measures which I believe should now be taken to try to deal with this situation. I think it would be improvident in the extreme not to be taking measures to deal with the situation, with these possible difficulties ahead of us.
Obviously, in order to compete more effectively with our manufactured goods exports we need to be as productive as possible. According to all the evidence, productivity has undoubtedly risen in British industry in recent years. But the nature of, and the reason for, that improvement in productivity is very largely that less efficient capacity has been cut out and very little of it, or relatively little, has been due to new investment. In fact, investment performance in British industry has gone down year by year. The Economist in a recent article calculated that investment in manufacturing industry has fallen in Britain by no less than 33 per cent. between 1979 and 1982. It states in this same article dated 3rd September that, "Britain has increased its productivity by sacking redundant workers and not by installing new machines".
We have come to the stage when we have to start installing new machines. We have to do that in ways which provide more of a stimulus and an inducement for industrialists to invest. This point was made repeatedly at the recent annual meeting in Glasgow of the Confederation of British Industry, which wants to see a climate which is more conducive to investment. That can be achieved by reducing interest rates, which at present in this country stand 40 per cent. higher than in Germany and 80 per cent. higher than in Japan. We are strongly in competition with both those countries. It must be done by reducing other imposts such as the national insurance surcharge and unduly high local rates.
These moves should be accompanied by a major increase in investment in the infrastructure. This has been referred to repeatedly in recent debates. Increasing investment in the infrastructure has a considerable relevance to exporting more effectively. Had the industries which have been adversely affected by the diminution in investment in the infrastructure—notably the construction and heavy engineering industries—had a sufficient home base,
1034
they could have competed with greater strength abroad for the opportunities which are coming forward rather more plentifully now that the world economy is recovering. We have to take a close look at the whole investment situation in industry not only for wider economic reasons but for export reasons also.
The second aspect of the problem is the exchange rate. It does not matter how productive industry is. If the exchange rate is over-valued it cannot sell its goods abroad. In recent years we have suffered by becoming a petro-currency. The fantastic swings that we noticed in the value of the currency a couple of years ago caused enormous harm to our export effort. The uncertainty of the currency, and its relatively high standing even now in relation to our competitive position, is one of the major factors leading to the difficulties that we are experiencing in our visible balance of trade. There is to be a debate on this subject on Monday, when the noble Lord, Lord O'Brien of Lothbury, will be introducing a Motion on the whole question of the monetary situation. I hope that the occasion will be used to consider what should be done to make sure that we have an exchange rate which is not only related to our competitive position and would help us to compete more abroad but which would be a good deal more stable in the future than it has been in the past.
The third matter to which we should turn our attention in trying to build up again our positive balance in visibles other than oil is import substitution. That is the other side of the coin of the balance of payments. Looking at the figures for manufactures, it is interesting to see that what has happened so far this year is not that our export earnings have gone down—on the contrary, they have continued to go up—but that we have suffered a very much more substantial increase in imports. The consumer boom which took place some months ago is still continuing to some degree, but I am afraid that it did what it has done ever since the war in this country. Instead of absorbing more goods produced here it has tended to suck in more from abroad.
I would relate that situation partly back to our inadequate investment. The size and capability of British industry does not seem to be there to meet the increase in demand. We need to stimulate competitive import substitution by such means as were described so eloquently by the noble Lord, Lord Sieff of Brimpton, in a recent debate in this Chamber. The organisations represented by the nationalised industries have made great progress in this field. I was personally involved in this not only in the Coal Board but in presiding over the grouping of nationalised industries to ensure that we stimulated through our very considerable purchasing power the maximum possible competitive development of our suppliers. We are talking here of a combined purchasing power for the nationalised industries alone of something of the order of £10 billion. In their direct purchasing if the Government and the larger enterprises in the private sector were to pursue this line—as some are doing—this could have a dramatic impact on the import situation and also have a good pay-off in creating a much more effective export operation. If we can sell competitively at home, we can sell competitively abroad as well.
I turn finally to export services and in particular to the British Overseas Trade Board with which I was connected for a number of years. I pay tribute to the way in which it operates. I recall that it was difficult to get it going in the early days in 1972 when I first joined it. It is a combination of Government services on the one hand and industrialists and others, including some trade union representatives, on the other. It has worked well and some very effective services have been established, such as the help given to British enterprises to exhibit abroad, the inward and outward trade missions and, above all in my opinion, the export intelligence service. Regrettably in the past few years, at a time when we needed to deploy every possible effort to expand our exports, this service, along with all other items of Government expenditure, has been cut back. It is worth noting that in the last annual report of the British Overseas Trade Board its then chairman, the noble Earl, Lord Limerick, drew attention to this. He said that if further cuts were made it would reduce substantially the contribution which these highly developed and skilled services could render.
Another aspect of these cuts concerns me very greatly. During the time that I spent trying to stimulate exports I visited many of our posts abroad. Those missions were getting more and more attuned to helping with the export drive. One way in which they did this was by collecting information on business available abroad and filtering it through the export intelligence service so that the people concerned in this country would get, on a selective basis, what was of interest to them. I am told that this service is diminishing because of the reduction in the staffs doing this work in our missions abroad and particularly the locally recruited staff. I may say that these are the very best people to collect and ferret out this information—the locals in the countries concerned. I regard as something that badly needs to be put right that these cuts should have been applied in such an apparently unselective way. We must recognise that in this business of exporting a certain skill is required. A skilled team was built up and unfortunately it is now being diminished.
I have identified what I consider to be one of the most serious potential problems that we face in this country. It is important to identify these things in good time so that we can do something about them. I have made a few suggestions about what I believe should be done. But we have only a very short time at our disposal for this debate, and I do not believe that it is enough just to leave the question there so far as this House is concerned. Therefore I should like to propose that this would be a proper subject for a wide-ranging inquiry by a Select Committee on overseas trade which, with all the undoubted skill and objectivity which this House deploys in these matters, could identify the nature of the problem more clearly, come forward with many more proposals as to how it should be dealt with, and give rise to a more searching and comprehensive debate than we have time for this evening.
8.40 p.m.
Lord Hatch of Lusby: My Lords, the noble Lord, Lord Ezra, has done the House a great service in
1036
putting down this Question to the Government and giving us the opportunity of debating one of the central issues which will determine the standard and character of life in this country for the rest of this century and into the 21st century. I think that the first thing that the noble Lord, Lord Lyell, who is to wind up, has to do in answering the debate is to explain why those who are characterised by his party as the wealth-producers of the country, those who are constantly criticising the restrictive practices of the trade unions, those who are blaming the trade union movement for the decline in the economy of this country, are so markedly absent from the Benches behind him. Not a single Conservative Bank-Bencher considers it to be of sufficient importance to debate the very subject which relates to that which has provided for them the capital which they so generously supply to the party of which the noble Lord is a member.
Where are all the businessmen who are constantly preaching to us about the evils of the trade union movement and the virtues of the Government's economy policy? Why are they not here to explain why, as the noble Lord, Lord Ezra, has pointed out, for the first time since 1931 there has been a deficit in manufactures? And that was only a conditional answer. The Minister was not really sure whether it was 1931 or 1913; he was not sure whether the figures were reversed. According to my information, it is the first time since the beginning of the Industrial Revolution that, so far as the United Kingdom is concerned, there has been in manufacturing industry a deficit as between exports and imports. Perhaps since I asked my question two days ago the Minister has found out which year it was, and whether in fact there was such a year.
I should make one reservation regarding what the noble Lord, Lord Ezra, has said. He has removed any necessity for me to go through the figures which he has detailed so ably. But I was a little worried when he began to introduce the subject of import substitution, and I shall explain why. I imagine that my interpretation of what he was saying is incorrect, and I have no doubt that, if the flow of my argument is found to misrepresent him, he will intervene. I shall gladly give way. In this country there is a myth—a myth which I tried to tackle in debate only last week, but which still persists, and which I hope the Government themselves will participate in laying for all time. It is the myth that the imports which we have seen sucked in by the 7 per cent. increase in consumer spending during this year are imports from the poorer countries of the world, the developing countries.
I shall take again, as I have done previously, the classic case of textiles. If we are going to build up the new economy of this country, certainly it must be accepted that the nature of manufacturing may well have to change; that there will be required a training system which is very expensive and which calls for the spending of considerable capital on higher education, which the present Government appear to be unwilling to provide. There will have to be greater labour mobility, and there will have to be much more Government investment in new industries. If I take the case of textiles, it is because it has always been used as the stereotyped instance to show how textile imports into this country have been putting textile workers in

1037
Britain out of jobs and closing down mills: this is simply untrue. I have constantly given the figures, and I hope that the Minister will respond to them tonight.
Let me point out to the House that last March the British Textile Confederation published a booklet entitled, A Plan of Action. The booklet appealed to the Government for greater investment in the textile industry, and it pointed out that 7 per cent. of the manufacturing output of Britain is in textiles, and that the textile industry is the third biggest exporter and employs half a million people.
The booklet went on to state that the trend in imports of textiles is expected to increase and that exports and consumption will stagnate. But where are these imports coming from? They are coming mainly from the EEC. They are coming from the developed world, not the developing world. I have previously given figures to show how, during the lifetime of the Conservative Administration since 1979, the proportion of textile imports from the developing world has declined and the proportion of textile imports from the developed world—in other words, from our competitors—has steadily increased.
What does that mean? Let us take the case of the multifibre arrangement, which restricts imports by various means—but which certainly restricts imports from the developing world and therefore prevents them from developing their manufacturing base, which has always been, in all countries, first of all in textiles. I agree that the multifibre arrangement goes back to 1974, and I hope that the noble Lord will not waste time in making that point. But, those imports having been restricted through the multifibre arrangement, what has happened? The imports from the EEC have jumped from 47 per cent. to 64 per cent. in four years; and these are just our competitors.
I know that there is a problem. I know that there is the problem of changing the character of manufacturing industry. I know that there is the problem of labour mobility and the development of new industries. In some ways—and I am sure that the noble Lord will be surprised at this—I can give an encouraging sign. Let us take one instance. Let us take the case of Acorn, the Cambridge-based group which launched the electron home computer at a very cheap price; I think £199. What has Acorn done? It has risen within one year between 1981 and 1982 from a turnover of nothing to a turnover of £42 million a year. Last year, turnover rose to £100 million a year. What is interesting about Acorn is that it really has depended upon Government support, partly in subsidies, because it qualifies under the Department of Industry, but even more importantly, by having a domestic base on which to build from the foundations. This wide consumer base here is the foundation stone from which it can extend its activities into exports.
This is the Japanese type of industrial policy—of Government aid for the development of new industries on the domestic base with the encouragement to advance from the domestic base to the export base. What have the Government done about this? Incidentally, I might say that there is one catch about Acorn. It is a Cambridge based group but it makes its famous computer, the electron, in Malaysia. That is another issue which we do not have time to
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discuss tonight but which is certainly worth taking note of.
What have the Government done in this situation to change the manufacturing character of this country to face the future rather than to moan about the past? What have they done to stem the effects of their own monetarist policy, their own fiscal policy and their own employment, or unemployment, policy? What they have done so far as I can see is, first, as I have said so often in the House, to reduce overseas aid by about 20 per cent. I am not going to take this up now because I know that no Government Minister will answer. I have asked many of them. Not one is prepared to face it. I am not going to argue that reduced aid in itself reduces employment here. I believe that it does. I believe that it can be proved that it does, but the Government will not admit so. What reduced aid does do is to reduce the type of infrastructure and encouragement in the developing world that could provide the kind of market in which British exports could find new homes.
The reduction in aid is damming the stream that could be flowing. I give two short instances. In November 1978, I was in the State Department in Washington talking to some of the African experts there. What were they talking about? They were talking about the change in the attitude of the Government of Guinea under President Sékou Touré, who had just broken away from the monopoly into which he had been originally forced by the cold shouldering of the West, breaking away from the monopoly of Soviet domination and opening up his markets, his economy and his political life to the rest of the world. The State Department had a top level delegation at his conference. The French were there, and a French State visit took place shortly afterwards. The Japanese were there. The Germans were there. The Italians were there. Where were we? We sent an ambassador from Dakar in Senegal, who did not stay for the conference and who never even met President Sékou Touré. Yet it is potentially one of the wealthiest countries in Africa. Here was an opportunity, and here has been an opportunity ever since. As the noble Lord may know, I have constantly been asking questions of the Government as to what they are going to do about the potential value both to Guinea and to Britain of economic initiatives within that country which I know that President Sékou Touré would welcome from Britain.
The other example is the straightforward example of Zambia. How on earth can Zambia buy British goods? Look at the price of copper! The price of copper has dropped during that last three months by something like £150 per tonne. The price of copper today at just over £900 a tonne is less than the cost of production. So how does Zambia accumulate the foreign reserves to buy British goods? How can British goods be exported to Zambia unless the Zambians are enabled to sell to us? This is the vicious circle which the Government so far have refused to face. What are they doing now? Not only are they reducing aid but they are also saying that they intend to reduce their contribution to the International Development Agency. That agency provides to Britain twice as much in its contracts as our contributions to the agency. In other words, it is an investment for us and

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the Government are cutting it. Does this make any sense?
As I mentioned last week, we have seen just this year, first, a battle between the Treasury and the Department of Trade in which the Treasury was trying to cut down the expenditure, and therefore the investment, of the Department of Trade—investment that is essential and which, as the noble Lord, Lord Ezra, points out, the CBI itself says is essential for the preservation and development of British industry.
What have the Government done about the Export Credits Guarantee Department? Surely, this is today so out of date that it is really playing no part in what it was originally designed to do—that is, to help this country export and to give Government backing to those who were going out, as the noble Lord said, seeking British exports. It is no good the Government saying, as they have been saying so piously for four years now, that when things improve we shall go back to increasing aid. The idea that we cannot get out of the Government's mind is that aid is charity and not investment. Let the Government ask themselves: why are we cutting aid in Britain whereas Denmark, Norway, Sweden and the Netherlands have all exceeded the 0.7 per cent. target and some of them now have exceeded the 1 per cent. target? All I can say is that the Labour Party has gone on record saying that the next Labour Government will achieve the 0.7 per cent. target within their own lifetime and will then proceed to the 1 per cent. target, not because it is particularly charitable but because this is the future for Britain.
The future lies in an increase in the purchasing power of the half of the world's population who today cannot afford to buy British goods but who could be the market for the future—a market in co-operation, supplying our needs as well as our supplying theirs. I beg the Minister to address himself to these real problems. I support wholeheartedly the plea made by the noble Lord, Lord Ezra, that we should not just state these views among a handful of ourselves sitting in these Benches. We should state them on behalf of the House itself, and state them in such a way that we can call in expert witnesses and civil servants and report back to the House and thus face the major challenge of the future of the economic life of Britain during the rest of this century and into the following century.
9 p.m.
Lord Bruce of Donington: My Lords, the House will be most grateful to the noble Lord, Lord Ezra, for having made such a concise and thoughtful speech on this very important Question. We are very grateful to him for giving the Government an opportunity to reply to the Unstarred Question that he has put directly to them as to what steps they are going to take to stimulate non-oil visible exports.
I have no doubt that the noble Lord, Lord Lyell, when he replies, will be able to list a number of measures that the Government have taken by way of aiding industry. Those measures, however inadequate many of us may consider them to be, may be impressive. But nothing that the Government can do
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while they remain confined within the ideological shackles imposed on them by the Prime Minister and her Treasury Ministers can possibly do anything substantial to deal with the problem raised by the noble Lord, Lord Ezra, supported by my noble friend Lord Hatch of Lusby.
The figures that the noble Lord, Lord Ezra, raised are horrendous. They show the quite disastrous state into which British industry has been allowed to fall. It is perhaps unfortunate that when the figures are published, as they are month by month, the main section of the press is concerned only with the total balance of trade, including oil. The Government themselves show much jubilation when there is a surplus taking oil and non-oil visible trade together.
The public at large do not, I think, realise the perilous state into which the nation has been allowed to sink—a state in which, as the noble Lord, Lord Ezra, so succinctly pointed out, once the oil flow begins to slow down, in order to achieve the balance of trade necessary to sustain the basic needs of the entire population of this country there will need to be such a manufacturing effort as so far we have not seen. The Government show no consciousness of this. We have only to go back to the beginning of this Government's term of office to find out exactly why it has happened.
In the last four years the volume of exports from this country has declined by 15 per cent. Volume figures are much more reliable than the figures that have to be adjusted for inflation. Manufactured exports have declined in volume by 15 per cent. since this Government have been in office, and manufactured imports have, during the same time, increased in volume by 25 per cent. Why is that so? It is said by the Government that the main reason why there has been this decline is that British industry is not competitive compared with overseas countries. They sought to deal with that by giving vast taxation concessions in successive Budgets, on the grounds that taxation concessions, particularly as they affected those in the higher income groups, would inspire the leaders of industry to far greater effort and would produce increased prosperity in the country.
At the same time, in an act of what must now be known as supreme folly, they raised the interest rates in this country at one fell swoop by some 4 per cent., and they drove up the rate of exchange to a point where it was 2.42 dollars to the pound. The Prime Minister was euphoric about this, as any glance at her speeches will reveal. She said that at last the pound could look the dollar in the face. She could not have realised at that time what damage it was going to do to our exports from this country.
As the noble Lord, Lord Ezra, has pointed out, one of the most substantial reasons for exports from this country being regarded as uncompetitive is the grossly inflated exchange rate, which subsided only very gradually from the level it reached in early 1980. It almost decimated the export effort. That is not to say that certain industries, and in particular certain companies, have not been able to survive. There are many reasons for that. The larger enterprises in this country, particularly the multi-national companies, are able because of their size to produce in very large batches.

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They are also able to produce in their subsidiaries overseas, where wage rates are very much lower, and, by a system of transfer pricing, they can in fact sustain a fairly high level of exports—one country, one subsidiary, sustaining another. Indeed, there are many instances in which the export efforts of the larger companies have been increasing over this period. But that is not true of the great bulk of British industry—the smaller firms and the medium-sized firms—save in those instances where the supply of capital goods of a highly specialised quality (for which this country has been renowned for a long time) succeeds in finding buyers without over-much regard for price. But those are very limited areas.
It has for a long time been held that successful manufacturing export from a country can in the long run best be sustained by a substantial domestic market. One of the characteristics of the grossly excessive value of the pound, which was deliberately set by the Government—there is no question of it being due to market forces, as the noble Lord, Lord Cockfield, no doubt knows by now—not only makes it more difficult for exports to compete in the overseas market (and I am talking now of the small and the medium-sized firms producing the manufactures for export overseas) but at the same time subsidises imports into the country. So it works both ways.
The artificially high rate of exchange has enabled the other countries—particularly those in Europe—to compete on an exchange rate subsidy basis too successfully with British companies. Therefore, it has reduced the domestic manufacture of articles for domestic consumption and has progressively destroyed the domestic market basis that always lies at the root of a successful export effort. Until the Government realise that, there is no hope.
Perhaps I can address the noble Lord, Lord Lyell, in terms with which he is a little more familiar than his noble friend, the noble Lord, Lord Cockfield. The noble Lord will know that, when you get large batch production based on a large consumer demand, you in fact reduce unit costs. The finest way of reducing unit costs and, therefore, of making your price more competitive is to get longer runs, longer batches, because you get a greater overhead recovery. The noble Lord, as a distinguished accountant himself, knows that perfectly well. All these conditions have been debilitated by the Government's policies. In fact, they have been responsible—and they must realise it—for a massive decline in the manufacturing capacity of this country at competitive rates, not only because of the artificially high rate of exchange, but also because of the high interest rates which must, in themselves, ultimately enter into unit costs. Even today, interest rates in the United Kingdom are 40 per cent. higher than they are in Germany and 80 per cent. higher than they are in Japan, as the noble Lord knows perfectly well.
Against these dominant factors—the dominant factors in the way in which the Government have conducted, or rather not conducted, the economy—the other measures that are so very desirable and the measures that are being taken by the Government themselves, albeit grudgingly, are merely a drop in the ocean compared with the results that would have ensued had intelligent economic policies
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been followed and indeed—as my noble friend Lord Hatch of Lusby pointed out—had there been intelligent policies in regard to other overseas countries as well. This is the really massive contribution that they can make. If they wish, they can change the whole climate within which manufacturing industry operates at this time.
Some noble Lords have sometime advanced the views of the CBI in this House, but none of them is present this evening. But it is not true or sufficient to say that the actual taxation costs borne by our competitors in, for example, Europe, are lower than ours. In point of fact, the taxes based upon labour in this country are the lowest in Europe, and our actual wage rates in this country are towards the bottom end of the wage rates in Europe. Therefore, these things will not wash.
What is required—and in view of the continued pressure by the Government to achieve entirely irrelevant changes in the ownership of industry—is a programme of import substitution, bearing in mind the considerations also that have been raised by my noble friend Lord Hatch of Lusby. If private capital is not prepared to invest, there could be established by the Government themselves, by aid to firms or to managements that were prepared to undertake it, industries that could readily compete with industries abroad and could begin once again to turn us into the manufacturing nation that we always have been.
The danger is that we shall develop our communications industry so much that ultimately we shall be communicating with one another about material manufactures that we no longer manufacture ourselves at all. We shall talk to one another about material objects which we are no longer making ourselves in any event. That will not solve the problems of the nation. True enough, we want increased communications; true enough, we want to get the maximum export income we can from our new communications industries. We want all these things, but we must—and the arguments advanced by the noble Lord, Lord Ezra, are irrefutable in this—take steps quickly and urgently to revitalise the manufacturing section of our industry in the United Kingdom.
If it be the case that private capital will not invest in it but will still prefer to invest its money overseas for a quick profit where labour charges are, under different conditions, about 40 per cent. of what they are in the United Kingdom, then any Government of the day with the future of the country, as distinct from party, firmly in their mind must take constructive steps to ensure the re-establishment of manufacturing industry in the United Kingdom.
It is tragic that, when it comes to questions affecting agriculture, the competitive mind of the Government goes into a lock. It becomes completely paralysed. It declines, and considers quite unimaginable that the same competitive laws that it tries to lay down for industry should in fact apply to agriculture. In fact, agriculture receives massive subsidies not only from the people in unnecessarily high prices but in the net contribution, amounting to over £1,000 million, which this country pays into the EEC for agricultural support. Why should not the Government pay the

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same attention, devote the same interest, and show the same undying affection for the manufacturing industries of our country as they do for agriculture, and as they do for finance?
The real answer of course is that there is no government so far as industry is concerned. The Government have abdicated from government so far as the future of British industry is concerned. They are content to leave it to the finance houses of the City. They are content to leave it to the institutions. Such care and such effort as they put into the promotion of British industry is, I am bound to say, the minimum they can put in—and I emphasise that—in fear of further and almost unendurable unemployment. They are just keeping industry quiet. They are not stimulating industry. If a truthful answer were given to the steps to be taken by the Government to stimulate British industry—and without the slightest offence to the noble Lord, Lord Lyell, who I am sure will put forward a number of interesting figures as to what the Government are doing—I am bound to say that the best way for the Government to stimulate British industry would be for them to resign.
9.21 p.m.
Lord Lyell: My Lords, we have had a fascinating and, indeed, stimulating debate this evening, worthy of the highest standards of your Lordships' House. It has been of great interest to your Lordships, and I am sure that it will be of great interest to those noble Lords who, for one reason or another, have been absent from the House. Those of your Lordships who sat through the long hours of last night and the night before possibly have not got the aggressiveness, youth and spring in the step of those who have spoken this evening. Nor, indeed, have they the expertise of the noble Lord, Lord Ezra, to whom we are so grateful for initiating the debate this evening and for asking the Unstarred Question, as well as for raising so many interesting points and new ideas, about which I shall have a little to say later in my remarks.
I shall attempt to restrict myself to answering the Unstarred Question of the noble Lord, Lord Ezra. In commencing this task, your Lordships will not need me to tell you that there have been enormous changes in the pattern of world trade—and this is the nub of the Question which is being asked this evening—together with changes in the trade of the United Kingdom in the last decade. If we take two of the major factors in this period, we find not one but two great oil price increases in the early 1970s and in 1979–1980. The second thing we find is the membership of this country of the Common Market. As Lord Ezra and your Lordships, who are all experts in trade and industry and economics, will be aware, our exporters have had to adjust to the new circumstances; but we are proud to see that they have responded to that challenge.
Your Lordships will be interested to know—the noble Lord, Lord Bruce, tempted me by saying I would produce some figures, and I shall, but very few—the percentage of our exports going to the European Community markets during the last 10 years has risen from 31 per cent. to 42 per cent., while the percentage going to OPEC countries has risen from 7 per cent. to 12per cent. My point in producing these
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small examples is that Britain's exporters have responded to the changes in the past, and we are particularly optimistic that they will do so again in the future.
On the theme of change, I would point out that the Government are considering with great interest the report on trade patterns by the Select Committee on the European Communities. I have it in my hand. It is a very useful exercise; and the report is quite a heavy weight. I am sure that Lord Bruce will be thumbing through it, as will many other Members of your Lordships' House. Your Lordships will be aware that this report will be debated in this House on 29th November. We are quite sure it will give rise to a particularly good debate. When we come to examine this report, we shall see that it looks into the change in trade patterns in the United Kingdom subsequent to our joining the EEC.
I promised that I would stick to the subject of the Unstarred Question in this evening's debate. The noble Lord, Lord Ezra, rightly pointed out that among the challenges that will be with us very soon will be that of adjusting to the run-down of North Sea oil revenues. Of course, the run-down will not happen overnight. We believe that Britain may well remain self-sufficient in oil right into the 1990s and indeed may remain a major producer beyond the year 2000. But there is a challenge and the Government are preparing for it by creating a climate which is favourable for industrial and commercial growth, and by encouraging efficiency, enterprise and innovation so that companies in the manufacturing and service sectors can compete profitably at home and abroad.
I include the services sector deliberately because the growth of this sector is a significant and very welcome development. Investment in the service industries is expected to be the highest ever this year, while service industry employment rose by nearly 150,000 in the first half of this year. I would stress that this is real growth, and the British economy is responding to the changing pattern of world demand by supplying the services that the world wants, including financial, professional, technical and consultancy services. The overseas earnings of United Kingdom consultants, for example, have risen nine times since 1972 to their present level of around one billion pounds.
The Government's support for profitable trading abroad is not limited to the creation of a favourable economic climate but includes a vigorous programme of tangible export assistance by the British Overseas Trade Board. The BOTB's services tend to be focused on smaller companies, on first-time exporters, and on companies tackling new export markets. They are providing the seed corn from which in the next decade we believe that a harvest of profitable long-term export business will be reaped. One important BOTB service is the provision of a very great deal of information to exporters about specific export opportunities reported by the United Kingdom's diplomatic posts overseas. A recent independent survey indicated that United Kingdom companies obtained £1 billion of export business a year as a result of leads obtained through this service.
Through the BOTB, and in particular through the activities and projects of the export policy division, the Government also provide support in a variety of ways

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to companies bidding for major projects overseas. Last year, as I am sure the noble Lord, Lord Ezra, will be aware, the division helped British firms to win major contracts worth £1.3 billion in United Kingdom content alone, four of which were valued at over £100 million. There are also many many other excellent examples of cases where the Aid and Trade Provision has enabled British companies to obtain major orders against foreign competition. In one recent case the willingness of the United Kingdom to use the provision to match another country's terms itself caused the competitor to decline from using mixed credit; and the United Kingdom bidder won the contract on straight commercial terms. And we should not forget the very considerable support provided for exporters by ECGD, which last year insured some £19 billion worth of exports and signed up more than £7 billion worth of long-term guarantees to banks, who will now provide finance for capital goods exports in the future.
I should like to pay a tribute to the work which has been done by the noble Lord, Lord Ezra. My knowledge of his work, until I began to brief myself for his Unstarred Question this evening, was limited to what I had heard and read in the media. I was not aware that he was a founder member of the BOTB when it was set up in 1972; and, as your Lordships will be aware, he served until July this year. The noble Lord was also chairman of the European Trade Committee, which was one of the BOTB's area advisory groups during this period. It is thanks to his efforts that the BOTB has been so successful, and why it is so appropriate that he should ask this very important Question this evening. The noble Lord was also very closely involved, during his chairmanship of a very great nationalised industry, in what we call positive purchasing activities, whereby leading United Kingdom purchasers are urged to build up more effective links with their United Kingdom suppliers. We believe that the noble Lord, Lord Ezra, has done tremendous work in this field.
I shall now continue attempting to answer the important points that he has raised. I mentioned that the Government are seeking to create a favourable climate for industrial growth. This includes continued restraint on public expenditure, in order to make further advances in the successful fight against inflation. The BOTB has contributed to Government targets in this area by reducing its manpower. But its services have remained intact, and, indeed, in some cases their take-up by exporters has increased significantly. BOTB productivity has been substantially improved. We believe—
Lord Ezra: My Lords, may I—
Lord Lyell: My Lords, may I just finish this paragraph? It is the exporters who, in the end, do the exporting. But we are firmly of the opinion that the BOTB is putting its resources to good use and helping to ensure that Britain has, and will continue to have, a strong base of manufacturers providing employment at home and competing successfully in overseas markets. I yield briefly to the noble Lord.
Lord Ezra: My Lords, it is a very brief question. I should just like to ask whether the Government are
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contemplating any further reductions in the manpower of the BOTB.
Lord Lyell: My Lords, I shall be as brief and as accurate as I can and say, not so far as I am aware. That is all I have. If I am in any way in error, we can certainly discuss this. If I am in gross error, I will write swiftly to the noble Lord, and I hope more swiftly than I have done in the past week. I shall certainly take that point.
I have concentrated my remarks on the BOTB but, of course, there are many other Government activities with the same objective. I mention briefly just two. The first is the national quality campaign, where the Government's contribution includes financial help to companies to review and strengthen their approach to quality management. It also includes a wide range of initiatives to enhance the market status of the supporting national standards system.
The second Government activity with the same objective as the BOTB is the Government's support for initiatives to help establish competitive British sources of supply. We believe that this is particularly dear to the heart of the noble Lord, Lord Ezra, and, indeed, to the heart of British industrialists. The Government are themselves active in promoting the best purchasing practices in the public sector, in order to assist positively the development of industrial competitiveness. The Government are doing this through their major public purchasing policy initiative, of which the noble Lord, Lord Ezra, is well aware, as we all are; and he was one of its strongest supporters.
The noble Lord, Lord Ezra, commenced asking his Question by paying tribute to the earners of invisibles overseas. We wish to add our tributes to those of the noble Lord. The noble Lord also mentioned, in passing—I shall study what he said in the Official Report tomorrow—food and beverages. As a Scot, I am particularly grateful for his mention of the very valuable export market for the liquid which is so dear to the heart of the noble Lord, Lord Ross, and many of us.
The noble Lord referred to some of the remarks made by me and other Members of your Lordships' House during the course of the Starred Question which was asked a week ago. I would ask the noble Lord, Lord Ezra, and the noble Lord, Lord Hatch of Lusby, to consult col. 629, where they will find that I made it fairly clear that we understood that the two years when Britain was in deficit on manufactures were putative. I stressed that the two years were theoretical—no more than that.
The noble Lord, Lord Ezra, presented four measures which he believed needed to be taken. He mentioned investment in the installation of new machinery. We believe that industry is attempting to do this itself, and the Government wish to give industry every encouragement they can.
The noble Lord, Lord Ezra, and also, I believe, the noble Lord, Lord Bruce of Donington, mentioned the exchange rate problem. As your Lordships will be aware, the exchange rate and its influence on the balance of trade is very important, but the policy of the United Kingdom is that, no matter what may be the opinion of the noble Lord, Lord Bruce of Donington,

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the exchange rate should be determined by market forces. Both the noble Lord, Lord Bruce of Donington, and I are on the same side of the fence when it comes to examining figures. At least, I hope we are.
I would stress to the noble Lord, Lord Bruce of Donington, and to your Lordships that the Government have only limited scope to influence the exchange rate, apart from what one might call short-term smoothing operations. Such a term does not endear itself to the hearts of accountants, notably the noble Lord, Lord Benson, and perhaps even the noble Lord, Lord Bruce of Donington. I would stress again to the noble Lord, Lord Bruce of Donington, and to the noble Lord, Lord Ezra, that any devaluation that was achieved through any fiscal or monetary laxity might provide a short-term benefit to exporters but, as I am sure noble Lords are aware, in the long run it would feed through into such things as higher costs by way of higher import prices and wage demands.
As noble Lords will be aware, the Government's main belief is that lasting improvements in the competitiveness of the United Kingdom depend, above all, upon continued moderation in such things as wage settlements and upon continued improvements in both productivity and aspects of non-price competitiveness in areas such as design, punctuality of delivery and product reliability, besides other factors which are also germane to exporting.
The noble Lord, Lord Ezra, also raised the very interesting point, which is so close to his heart, of import substitution. This is particularly relevant to all that he did relating to his public purchasing policy. For the last three and a half years this Government have been vigorously pursuing a major policy initiative which is aimed at encouraging the public sector to use its huge purchasing power in a positive manner to help develop and maintain suppliers' competitiveness. There are many facets to this initiative, including the development of a long-term dialogue between customers and suppliers, besides the encouragement and use of the appropriate standard of specification and the adoption of a value for money criterion which takes into account all sorts of factors, both long and short term. We are happy to report that some progress has been made, but your Lordships will be aware that much still remains to he done.
The noble Lord, Lord Ezra—this was one of the major points of his Question—wondered about the possibility of setting up a Select Committee of your Lordships' House on overseas trade to consider the matters which we have been debating this evening. As I am sure the noble Lord, Lord Ezra, the noble Lord, Lord Bruce of Donington, and those noble Lords who have thought about this matter will be aware, this proposal will have to be discussed by my noble friend the Leader of the House through the usual channels.
I would explain to your Lordships that such a committee could be a fairly major undertaking. My noble friend the Leader of the House would have to take into account the effect it would have on the staff resources of your Lordships' House, bearing in mind the needs of all the existing committees of your Lordships' House, including the committee which has only recently been set up to consider the two charity Bills. But I know that my noble friend the Leader of
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the House is sympathetic to this proposal and I will undertake that he will give it careful consideration. We are all very grateful to the noble Lord, Lord Ezra, for letting my noble friend know that the noble Lord would be raising this matter this evening.
The noble Lord, Lord Hatch of Lusby, raised many interesting points. It is my opinion that many of his points, interesting though they were, were more than a little wide of the strict terms of the Question being asked tonight. Nevertheless, I will attempt to answer several of them. First, the noble Lord, Lord Hatch of Lusby, raised the question of textiles; and also raised in aid the question of the Multi-Fibre Arrangement. He was not entirely satisfied with it; perhaps nobody is entirely satisfied with it, but I would stress—and I am sure that the noble Lord, Lord Ezra, would agree with me—that in the United Kingdom we have, and will continue to have, a healthy and vigorous textile industry. Any alterations to the pattern of our trade in textiles can only continue to be made under the aegis of the Multi-Fibre Arrangement.
The noble Lord, Lord Hatch of Lusby, wondered whether we could boost our imports. Whether he was thinking of purely substituting imports or increasing them, I am not entirely aware, but if he was thinking of substantially increasing them, then I wonder whether he will consider that such action might aggravate the problem that is at the root of the Question being asked by the noble Lord, Lord Ezra, tonight.
Lord Hatch of Lusby: My Lords, I am afraid that the noble Lord, Lord Lyell, has totally misunderstood the point I was arguing. I was not arguing for increased imports; I was simply pointing out that the major competition for British textiles comes from the developed countries where British capital is being increasingly invested—not from the developing countries, which are being prevented from developing their manufacturing industry on the foundation of textiles.
Lord Lyell: My Lords, the noble Lord raised that point as well, about exports and trade with the developing countries. But I would stress again that in respect of any alteration in our pattern of trade in this especially sensitive area for the British textile industry we believe that the Multi-Fibre Arrangement is the best vehicle.
The noble Lord did a very useful advertising job for a telephone firm in Cambridge, and I am sure that particular firm will be pleased to know of the noble Lord's vigorous support, and might even read of it, for their tremendous efforts. I regret I must be the only spokesman from this position who has not had the pleasure of answering Lord Hatch of Lusby on overseas aid. He mentioned that he had heard from a variety of spokesmen from the Government and that none of them had satisfied him; I will only tell him that he can always wait and hope. The noble Lord also took us on a tour of southern Africa and he mentioned President Sékou Touré of Guinea. I am not able to follow him down that avenue—we can perhaps wait for another day.
As to copper prices and commodity prices, so vital to Zambia, I am afraid I have to say again that we cannot dicuss them at length tonight. The noble Lord

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will have opportunities to raise this in the future. The noble Lord, I thought, had one or two barbs for the Export Credits Guarantee Department. It may be his opinion that it does not do a particularly firm job, but we believe that certainly the ECGD is in no way out of date. The noble Lord and your Lordships will remember from various discussions we have had on this subject that the ECGD is not a bottomless pit of financial support. It is, indeed, supported by the exporting firms themselves.
I enjoyed Lord Hatch's fascinating prophesy of what a putative Labour Government would do, and of their share of national output and aid. That will go down with many other fascinating prophecies, and we shall be able to look at it in the very distant future to see the accuracy of the noble Lord's prophecy.
The noble Lord, Lord Bruce of Donington, in his warm-hearted and traditionally robust way, made a number of telling points. I enjoyed his emotive language, such as the shackles placed on all our activities by the Treasury. The noble Lord, of all people in your Lordships' House, as a particularly distinguished practising accountant, should know the vital nature of financial activities in the affairs of the Treasury; indeed, in the subject we are discussing tonight. The noble Lord was quite harsh, I thought, about what he called monetary policies, but some noble Lords might just cast their minds back to the autumn of 1976 and the policies which were followed by the noble Lord's Government subsequent to that date.
The noble Lord, Lord Bruce, and, indeed, other noble Lords, raised the question of sterling becoming a petro-currency. As the noble Lord will be aware, the price of oil nearly doubled between 1979 and 1980, and with the effect of the petro-currency factor on our exchange rate the combination was a major burden for our exporting industries to bear. But we salute them, and we support them in what they have done in overcoming this.
Lord Bruce of Donington: My Lords, if the noble Lord will permit me, he will be aware that the Select Committee of your Lordships' House which examined this question came to the conclusion, which has not been refuted, that it was not the rise in oil prices that had the effect on the rate of exchange but the interest rates. If the noble Lord refers to the report of your Lordships' Select Committee on Unemployment, he will find that very clearly set out.
Lord Lyell: My Lords, I wondered which Select Committee it was. I have not yet had an opportunity of going through this, but the noble Lord and I might go through it together; it might be quite instructive. The noble Lord says that the doubling in the oil price was not a factor in our problems as far as exporting was concerned, and he mentioned interest rates. That may be his opinion, but I think he will find plenty of other opinions, valid opinions, in your Lordships' House which believe that the one was a factor in the other.
The noble Lord referred to my noble friend Lord Cockfield mentioning what were described, I think, as batch runs. The noble Lord will know that my noble friend was, and still is, able to speak about such things, since in his previous incarnation he was managing
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director of a particularly large firm in a very considerable way of business in the United Kingdom economy. The noble Lord, Lord Bruce, also paid me a very kind encomium. I would stress to him that I am not a distinguished accountant yet; I am an humble Member of your Lordships' House, and certainly tonight I have the honour to sit on this Bench.
The noble Lord, Lord Bruce, raised one point which I can answer tonight. He asked about the reduction in our manufactured export volume by 15 per cent. since this Government came into office. The noble Lord will know, and statisticians in your Lordships' House will know, that, depending upon the numbers you choose, any of us can produce a figure like this. But, of course—as the noble Lord and, I am sure, the noble Lord, Lord Ezra, will be aware—these figures mainly reflect the world recession. One point that we believe bears repeating over and over again is that last year the volume of United Kingdom manufacturing exports rose slightly—I think by 1 per cent.—while world trade volume fell by 2 per cent. We believe, in view of all these tremendous problems that we have discussed this evening, that that is a magnificent achievement and the Government wish to continue paying our tribute to the manufacturing industry for obtaining such excellent figures.
I have spoken about what the Government are doing, but let us not forget the achievements of industry. The productivity performance of our manufacturers has improved significantly since 1979. In the three months to August this year it was 7 per cent. higher than in the same period last year—that is, 1982. The reports which we hear suggest that our exporters are putting up a far better performance these days on such aspects as delivery and reliability. So I am not pessimistic about the present. I stress that the nation is not importing manufactured goods that it cannot afford. I believe that that is absolutely vital. I stress that there are tremendous opportunities in the consultancy and service industries. We believe that the growth in these industries really does show that we may be importing but we certainly can afford it, at least at present. I am ever optimistic that in the future we in this country can adjust our trading pattern as successfully as we have always done in the past.
House adjourned at nine minutes before ten o'clock.