Lords Sitting of 26 March 1984

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Exeter.

Unemployed Adults: Educational Provision
Lord Gainford: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many people are likely to have received educational opportunities by 1986–87 through the recently-announced scheme for unemployed adults.
The Earl of Swinton: My Lords, the programme will seek to improve educational provision for unemployed adults largely by providing advice and information about the most effective ways of meeting their varied needs. Some innovative and developmental provision will be sponsored, but responsibility for ensuring adequate educational provision for unemployed adults will continue to rest with local education authorities. While the Government hope that many students will benefit from the programme, it is not possible to identify them separately and to provide estimates of numbers.
Lord Gainford: My Lords, I thank my noble friend for that Answer. Has he any estimates of how certain areas where traditional industries have had to suffer practically from closure will be assisted by this scheme?
The Earl of Swinton: My Lords, we do not collect statistical information on unemployed students in further and adult education, but the indications are that participation by the unemployed is substantial. Some adult education centres in areas of high unemployment estimate that 20 per cent. or more of
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their students are without work. This programme will provide much useful information on this situation.
Lord Leatherland: My Lords, can the noble Earl tell us whether under this scheme the unemployed will be taught how to find jobs, since the Government do not seem to be doing very much about it?
The Earl of Swinton: My Lords, this Government, just as much as Members on the other side of the House, would like to see all the unemployed in jobs, and our economic policies are designed to secure that lasting recovery which alone can make the jobs available. Meanwhile, the unemployed can be helped by education in various ways, not least in terms of improving their employability.
Baroness Lockwood: My Lords, can the noble Earl the Minister tell us whether the scheme will be confined to vocational education or whether it will include the wider elements of education which perhaps would help people to come to terms with the new economic circumstances in which we are living?
The Earl of Swinton: My Lords, this involves both the DES and the MSC, and their interests in this field are complementary. For instance, the MSC are not concerned with non-vocational education while the DES programme will not focus on job-specific training. Between these poles there is an area where interests overlap. I am satisfied that the DES programme will establish its own identity, and this is why, in order to ensure fruitful collaboration, the MSC are represented on the DES Programmes Steering Committee. I am sure that this will help in both types of education.
Baroness Gardner of Parkes: My Lords, could the Minister confirm that in some areas unemployment is largely a matter of mismatch between skills and jobs, and that these educational opportunities may help people in this respect?
The Earl of Swinton: My Lords, they would help in that sort of case.
Lord Paget of Northampton: My Lords, can the noble Earl say what is the point of improving the employability of people for whom the Government have manifestly no intention of providing employment?
The Earl of Swinton: My Lords, I should have thought that the more employable they were, the more chance they would have of finding a job.
Lord Paget of Northampton: My Lords, not unless there is a job.
Baroness David: My Lords, would the Minister agree that the 125,000 unemployed which the Training for Jobs White Paper said will be helped will make a very small impression on the three million unemployed, since they represent only about 4 per cent.? Are there no other plans? Is more money going to the universities, and possibly to Birkbeck College, which deals with adult education?
The Earl of Swinton: My Lords, I think that one of the reasons for the setting up of this steering committee is to investigate what is happening and to see where the money can be spent for the greatest benefit and in the most cost-effective way.

Spanish and UK Cars: Import Duties
2.42 p.m.
Earl Attlee: My Lords, I beg to 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 steps they are intending to take to redress the difference between the import duty levied by Spain on British-made cars, and that levied by the United Kingdom on Spanish-made cars.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the difference in duties on cars is embodied in the trade agreement between Spain and the Community which was concluded in 1970, before the United Kingdom had joined the Community and at a time when Spain was less industrialised than she is today. Although we recognise that, in charging high duties, Spain is acting within her treaty rights, the Government have made clear their view that, 14 years later, these arrangements are anomalous. For this reason, we welcomed Spain's decision last year to introduce reduced-duty quotas for imported cars. The only definitive solution is, however, for Spain to join the Community on terms which include significant early reductions in Spain's highest duties. We are working to this end.
Earl Attlee: My Lords. I thank the Minister for that Answer. Will he not agree that it is ironic that, of the volume car maufacturers in this country, there is only one which is British owned, and that is British Leyland; that Austin Rover is the only one which exports to Spain, and that neither Ford (UK) nor Vauxhall exports? Is the Minister aware that at the present time British Leyland is given a quota for a
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maximum of one year in advance, and that normally it is very much less? Would he agree that it would help BL immensely if they were given a quota for a three-year period?
Finally, did the noble Lord the Minister read an article in the Daily Mail recently by their motoring correspondent, Michael Kemp, in which he claimed that SEAT, which is a Spanish state-controlled company, intended to import 30,000 cars a year into this country? Is he aware that these imports of 30,000 cars would have no quotas and would bear only a 4.4 per cent. import duty?
Lord Belstead: My Lords, I am not sure that I would agree with the noble Earl that it is ironic that BL are getting a quota. 1 would say to the noble Earl, however, that BL, I am glad to say, are doing well out of their quota, because this country increased its exports to Spain by 75 per cent. last year as compared with the year before. Nonetheless, if I may take up the rest of the noble Earl's question, we agree that there is room for Spain to make improvements in next year's quotas, and we shall certainly be making Spain aware of our views. I did not read the newspaper article, but I think that the noble Earl has very usefully underlined the need for Spain to come into the Common Market, when the tariffs will be harmonised.
Lord Mottistone: My Lords, did my noble friend say that 1970 was when the agreement was made? Was there no opportunity in the Tokyo round of GATT negotiations to bring up to date the arrangements between ourselves and Spain?
Lord Belstead: My Lords, I do not know whether the attempt was made in the Tokyo round of GATT. My advice is that an attempt was made in 1979 to do something about the situation but it failed since the other member states of the Community were not prepared to make the concessions in the agricultural field which Spain demanded as the price for making concessions on industrial tariffs.
Lord Kilmarnock: My Lords, would the noble Lord agree that it will be impossible for Spain and Portugal to come into the Community unless they agree to an increase in own resources on the next round of negotiations?
Lord Belstead: My Lords, I think that is another question.
Lord Hawke: My Lords, would my noble friend not agree that in all these trade questions the critical factor is the exchange rate, and that we suffer from too high an exchange rate because we are a great financial centre and the bankers like a high exchange rate as against the manufacturers, who need a low one?
Lord Belstead: My Lords, we have a good exchange rate because we have a good Government.

Peace Studies in Schools
2.46 p.m.
Lord Gridley: My Lords, before asking my Question, may I point out that there is a slight mistake in the wording as printed on the Order Paper? The Question should read:
"To ask Her Majesty's Government what action parents may take when they are concerned at the content of teaching of peace studies in schools".
I beg leave to ask this Question.
The Earl of Swinton: My Lords, as my right honourable friend the Secretary of State for Education and Science said in his recent speech about peace studies, parents who believe that they have grounds for complaint about a school's or a teacher's treatment of the issues of peace and war should not hesitate to take the matter up with the school and, if they do not receive satisfaction from the school, with the local education authority and ultimately with my right honourable friend himself. This advice applies equally to anxieties which may be felt by parents about biased teaching in other areas of the school curriculum. All such complaints are always taken seriously and are raised with the local education authority concerned.
Lord Gridley: My Lords, while I thank my noble friend for that Answer, is he aware that I and many others who have served as governors of schools warmly congratulate the Government on grasping this nettle and on the advice that is being given, that as regards war and peace studies and the issues of war and peace, they must be taught without emotion in a balanced and dispassionate way? Finally, in asking this question, how is the Secretary of State to be sure that when the advice he has given to local authorities and schools is not followed and parents are worried about peace studies and in the present-day existence of intimidation—
Noble Lords: Reading!
Lord Gridley: My Lords, is my noble friend aware that, with the existence of intimidation, if they do report this to the Secretary of State they may become the object of victimisation?
The Earl of Swinton: My Lords, I should like to thank my noble friend for drawing attention to the speech of my right honourable friend about the teaching of peace studies, and to endorse all that he has said about that. As regards the possible victimisation of parents, all I can say is that I hope parents will not be afraid of complaining to my right honourable friend if they feel strongly about this. As my right honourable friend suggested in another speech, and indeed in this speech, if they do feel they are likely to be victimised they should get together with other parents who have the same fears and go ahead with a joint approach.
Baroness David: My Lords, may I ask the Minister how many specific complaints the Secretary of State had received, and from how many areas of local education authorities, before he made his speech to the National Council of Women on 3rd March?
The Earl of Swinton: My Lords, I do not know the areas they came from but between 1st January 1983 and 2nd March 1984 complaints about peace studies were received from six correspondents.
Lord Paget of Northampton: My Lords, as somebody who is interested in dichotomy, are there not certain difficulties in teaching history and peace studies, since the two so manifestly contradict each other?
The Earl of Swinton: My Lords, we believe that pupils should be able to discuss important issues like peace, war and disarmament. Indeed, as the noble Lord said, such issues can hardly be avoided in the teaching of such subjects as history, religious education, physics, English and so on. But when such interests are being discussed it is important that the teacher should deal with them in a fair and impartial way, encouraging pupils to weigh the evidence and to arrive at their own conclusions.
Lord Brockway: My Lords, in view of the fact that all of us declare ourselves to be in favour of peace, including the Government, is it not reasonable that children, whose future life will be involved, should be allowed to make studies of this problem?
The Earl of Swinton: My Lords, yes, this is one of the matters which should be taken into consideration, but what is worrying my right honourable friend is when a teacher, perhaps inadvisedly, tries to stamp his own feelings on peace studies rather than having a balanced and fair discussion.
Lord Mishcon: My Lords, if the noble Earl the Minister thanks a noble Member of this House who reads a very long question, ought he not to accord the same courtesy to Members of this House, whatever side they sit on? Is it the Government's intention to say that it is perfectly all right to preach war to children but not to preach peace?
The Earl of Swinton: My Lords, I thank the noble Lord opposite for his question. No, the Government say that it is equally wrong to preach war as to preach peace. The point my right honourable friend and I are making is that it is not right for a teacher to preach anything, unless he is a reverend teacher.

Falkland Islands: Future Policy
2.52 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are holding, or intend to hold, negotiations with the Argentine Government on the Falkland Islands with a view to reducing the cost to the United Kingdom of the existing situation.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we shall continue to meet the costs necessary to fulfil our commitments

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to the islanders. At the same time we are seeking to improve our bilateral relations with Argentina and to re-establish confidence. We will not discuss sovereignty over the Falklands.
Lord Dean of Beswick: My Lords, although I welcome the Answer of the noble Baroness, she must be aware that it will be received with some disappointment by noble Members of this House and by a wider audience outside. Bearing in mind that the cost to each individual income taxpayer in this country is £40 per year to support the Fortress Falklands policy of the present Government, does not the noble Baroness agree that it is time for a further urgent initiative to be taken with the Argentine government in order to get direct talks moving so as to reduce this colossal burden?
Baroness Young: My Lords, as the noble Lord will be aware, the Prime Minister sent a message to President Alfonsin on the occasion of his inauguration on 10th December which was intended to pave the way for the development of better bilateral relations. We followed this up on 26th January by putting some specific ideas to the Argentinians through the Swiss protecting power. We have now received a substantial response from the Argentine government which we are still considering.
Lord Gladwyn: My Lords, would the Government agree that, if there are to be discussions with a very well disposed Argentinian government, they are not likely to make much progress—if they take place at all—unless the Government admit, without committing themselves on the question of sovereignty, that, in the long run and in the end, such discussions would not exclude the discussion of the political future of the Falkland Islands?
Baroness Young: My Lords, the Government have made their position quite clear on the question of the sovereignty of the Falkland Islands.
The Earl of Lauderdale: My Lords, will my noble friend confirm that there will be no question of compromising the Falkland Islanders' rights to self-determination? Is it not time that Argentina declared peace on a day when we in this House have been discussing peace studies?
Baroness Young: My Lords, I thank my noble friend for his intervention. On his second point, it would be helpful if President Alfonsin could now formally declare a definitive cessation of hostilities and renounce the future use of force.
Lord Shackleton: My Lords, while accepting that the prospect of meaningful discussions on sovereignty will not take place for the time being and into the distant future and that the majority of the heavy expenditure has already been committed and that it will be relatively small in two years' time, would the noble Baroness consider the possibility of conversations with regard to the conservation of the marine resources? Is she aware that there is a very large number of ships operating from different countries in
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the vicinity of the Falkland Islands and South Georgia and that it is vital to introduce a measure of conservation? Might this not be equally in the interests of Argentina and of the Falkland Islands? As the noble Baroness knows, very good relationships exist between the British Antarctic Survey, the signatories of the Antarctic Treaty and Argentine scientists.
Baroness Young: My Lords, as I believe the House and the noble Lord, Lord Shackleton, are aware, the possibility and the implications of declaring an exclusive fisheries limit are under careful consideration. However, the fact that the matter is still being considered reflects the complexity of the issue. But I have noted the point which the noble Lord has made.
Lord Monson: My Lords, can the noble Baroness say what the Government are doing to give maximum publicity, at home as well as abroad, to Britain's overwhelming cultural, ethnic, geographical, his-torical, legal and, above all. moral case over the Falkland Islands?
Baroness Young: My Lords, the Government have repeatedly made plain their view on Britain's sovereignty over the Falkland Islands.
Lord Bishopston: My Lords, does the noble Baroness recognise that the fact that she has been to the Falkland Islands and has had the benefit of meeting people there and seeing the position for herself has been generally welcomed? Does the noble Baroness also recognise that the Fortress Falklands policy, which might have been relevant for a short period, is no longer justifiable because the future of the Falkland Islands depends upon their relationship with Argentina, with Latin America and with other countries, and that it also depends upon communications and trade? Can the noble Baroness say what proposals have been received from President Alfonsin, what response the Government have made and whether the Government will initiate talks with the widest possible agenda in order to make progress?
Baroness Young: My Lords, I thank the noble Lord, Lord Bishopston, for his remarks about my visit to the Falkland Islands, which was most valuable and interesting. On his second point, I should make it clear that we need to be fully satisfied that Argentina renounces the future use of force. We have noted the statements by the Argentine government that they intend to pursue their claim by peaceful means. At no stage have the Government accepted the term "Fortress Falklands". It has been coined by others and has very little meaning. Turning to the question of the diplomatic initiatives, I indicated in response to the supplementary question of the noble Lord, Lord Dean of Beswick. that we have now received a response from the Argentine government to our initial proposals through the mediation of the protecting power. We are considering that response, but we believe that it is in the best interests of both ourselves and the Argentine government for the details to be kept confidential for the time being.
Lord Dean of Beswick: My Lords, bearing in mind the noble Baroness's assurance about the response of the Argentine government, is she aware that an Early Day Motion, sponsored by Back-Bench supporters of the Government, is on the Order Paper in another place, urging support for the type of action that I have suggested? Is the noble Baroness aware also that in the foreign affairs debate which was held recently in another place, prominent Back-Benchers of her own party suggested the course of action which I put to her in my Question? May I therefore ask the noble Baroness whether, in view of the financial implications, the Government's response to the Argentine government's response will be urgent?
Baroness Young: My Lords, I am, of course, aware of the Early Day Motion to which the noble Lord has referred and I have studied the debate on foreign affairs which took place in another place last week. I should like to make it plain that Her Majesty's Government wish to have more normal bilateral relations with Argentina. I have already described the proposals that we have made. At the same time I should like to make it clear that it remains our policy to stand firmly by our commitments to the Falkland Islanders while seeking more normal bilateral relations with Argentina.
Lord Beswick: My Lords, my noble friend Lord Shackleton mentioned one very important aspect of the economic future of the Falkland Islands; namely, the development of marine resources. May I ask the noble Baroness whether she is entirely satisfied that another aspect—namely, land reform—is developing satisfactorily?
Baroness Young: My Lords, that question is really rather wide of the original Question on the Order Paper. If the noble Lord cares to put down a Question on that subject, I will be happy to answer it.
Lord Beswick: My Lords, would it be unkind to say that it is not only rather wide but also rather more difficult?
Baroness Young: My Lords, I did not quite hear the end of the noble Lord's question; but may I say that it is the Government's view that there should be a gradual acquisition by the islanders of their farms. I believe the figures will substantiate that that is taking place.

The Territorial Army: Expansion
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. this afternoon my noble friend Lord Trefgarne will, with the leave of the House, repeat a Statement that is to be made in another place on the expansion of the Territorial Army.
Video Recordings Bill
Having been brought from the Commons on Friday last and printed pursuant to Standing Order 47, read a first time.

Housing and Building Control Bill
3.1 p.m.
Further considered on Report.
Clause 32 [Provisions as respects certain tenants of charitable housing associations etc.]:
Baroness Birk Baroness Birk moved Amendment No. 50:
Leave out Clause 32.
The noble Baroness said: My Lords, this amendment deals with the question of charitable housing associations. There is growing disquiet in this House and among most of these groups concerned with housing at the proposal which is intended to give the tenants of charitable housing associations large cash hand-outs to buy houses in the private sector. I may remind noble Lords that this proposal has not yet been debated in another place. It was inserted at the last minute when the Bill came to this House, to replace a scheme which was decisively defeated last year by a majority of more than two to one. This clause has arisen because the Government will not accept the overwhelming vote of this House gracefully, and neither will they recognise the good sense and social responsibility which motivated that vote, which was supported by noble Lords from all sides of the House. We have a duty to give the proposal searching and critical consideration.
During Committee stage we felt that we needed to hear more about the Government's proposals because so little detail had been released. My noble friends Lord Graham of Edmonton and Lady Nicol, and other noble Lords, probed and seriously criticised the scheme. The information provided by the Minister on that occasion and in subsequent correspondence has helped to clarify what is being proposed and how the scheme will be implemented. However, many grey areas will remain since the main provisions will be made by regulation. This is of the greatest importance when discussing the principle and the substance of this clause.
The more we examine this proposal, the more concerned we become. The basic principle is wrong morally, socially, and financially. The Government are seeking to make available large sums of money to a relatively small group of people who arc currently tenants of charitable housing associations. The Government say that only 100,000 tenancies will be affected. In other words, according to the Government, most housing associations will not be eligible. But if the Government wanted to promote owner-occupation, they should have turned their attention to all those people who currently find house purchase almost impossible.
Clause 32 does nothing for tenants of charitable housing associations occupying houses built before 1974, and who have probably been living in rented homes for very long periods. It does nothing for the tenants of private landlords, who will find it even harder to buy homes. It does nothing for the tenants of local authorities, who will probably have less chance of getting into housing associations because those associations will not be very anxious to receive too many people who have already worked out their residential qualification and will therefore be wanting to move on almost immediately and purchase a house somewhere else.
Also, Clause 32 will be of no use to potential first-time buyers. This provision will push up prices for many young people trying to buy their own homes, and therefore the costs of their mortgages—which will be higher than the cost to tenants helped under this scheme. It adds up to the fact that some thousands of people will receive large sums of money to choose where they wish to live, even though they are already living in good accommodation—as they must be living in houses or flats built since 1974. This is quite different from the right to buy of people in local authority property who have the right to buy their own homes.
The provision will make it possible for one to choose where one wants to live, which will be extremely pleasant; one will then be able to get the money and discount, and buy a house or flat of one's choice. As it has been estimated that the average discount will be in the region of £9,500, this situation will create a great deal of bad feeling among those people who may be in great need but who certainly will not have anything like this strange opportuntiy.
One of the key issues in the debate on this proposal has been the cost of the exercise. As proposed, it is an open-ended commitment which could presumably continue in perpetuity as new tenants achieve two years' tenancy and then claim their cash hand-outs. The Government have referred to their estimate of £10 million costs in the first year. However, the National Housing and Town Planning Council and the Association of Metropolitan Authorities, who are very conversant with these areas of housing, have estimated the cost at £19 million. That is just for the first year, and the cost must build up year after year. On the basis of the Government's estimates alone, those costs will reach £50 million after five years: but the National Housing and Town Planning Council and the AMA forecast expenditure of £95 million after three years. At this stage, it is extremely difficult to know what the scheme will cost but it will certainly be a very expensive scheme and one that we can ill-afford.
Although the National Federation of Housing Associations appears to be going along with the scheme—albeit very reluctantly—many charitable housing associations individually are against it and have expressed their views very strongly—very often, to the federation.
Where will the money come from? In reply to a letter that I wrote to the Minister, he made it clear (and I am grateful to him for his explanation) that finance for the scheme will come from the Housing Corporation budget in the first year and from the national housing programme after that. 1 will quote from the Minister's letter to me dated 19th March:
"If take-up in the first yerar is significantly greater than the estimate we have made, the implications for the shape of the corporation's programme for the remainder of the year would depend on the size of the variation and the scope for change in the other elements which make up the programme. This is just the same position as would occur in considering the case for any variation from provision on any other element of the corporation's programme".
What this means—although it is phrased in elegant bureaucratic newspeak—is that the money will really come out of the same pot.
The Chancellor of the Exchequer has already announced a £500 million reduction in the national housing programme for 1984–85 through his autumn Budget statement. The Government say that they made provision for this scheme in the Housing Corporation programme for 1984–85, but the programme was fixed and announced well before the final stages of the Pill in the other place; before there was any opportunity to discuss this clause. The Housing Corporation budget is part of that programme and is cash limited at £687 million for 1984–85. The corporation announced prior to the introduction of this scheme that the cash available is insufficient to meet the level of commitment for 1984–85. In a news release from the corporation it was announced that if the corporation completed its 1983–84 programme in full it would not be able to fund any new projects for next year. This is, in effect, a moratorium on existing Housing Corporation funds.
The housing association programme and, in future years, the national housing programme cannot stand the sort of leakage which will be necessary to fund this programme, so greatly is it under-funded at the moment in the light of our housing needs. A vital aspect of the Government's proposals is that when an ordinary sale under the right to buy takes place, whether it is through a local authority or a non-charitable housing association, the money from that sale is added to the national housing programme to boost spending. The Minister has on many occasions told us that there is the money for local authorities and the housing associations to build more houses. However, in this case there will be no financial gain for housing. In fact, there is a direct loss because the payments to tenants come out of the national housing programme but nothing is going back into it. This is an entirely different right to buy concept which involves the paying out of money from the national housing programme rather than receiving money. It is a most extraordinary business deal coming, as it does, from a Government who pride themselves on the businesslike attitude they take on these matters.
Further, the Government must try to be equitable—certainly so far as cash handouts are concerned. They should also be seen to be equitable. That is very important by any standard of good government. But this ill-begotten scheme meets neither of those criteria. It does not even have the merit of increasing the existing housing stock and improving employment prospects, which the scheme could have done if it had been restricted to newly built properties. Some two years ago the Government made money available to the non-charitable housing associations to purchase what were known as "turnkey" houses from builders and sell these on the basis of shared ownership. That scheme helped builders and first-time buyers, yet on this occasion no similar provision has been made. I should point out that the funds for that scheme have also been reduced.
Then there was do-it-yourself shared ownership—DIYSO. There are no funds made available for that next year. Under that scheme brought in by the Government people could buy on a shared ownership basis, but it does not involve cash handouts or discounts. So there were a number of options if the Government really wanted to increase

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home ownership and do it in a way that was both fair and financially viable.
To sum up, this clumsy and complicated concept is irrelevant to the multitude of housing problems in the country and the human misery involved. It does nothing to help unemployment, which is extraordinarily high in the construction industry. It does nothing to replenish our sadly depleted housing stock. It is expensive and it is administratively awkward. It is socially divisive. I believe that the House should be consistent and stand by its decision of last year and not be seduced by a cumbersome, unfair scheme which the totality of housing expenditure cannot possibly afford.
I believe that even this Government would not have the nerve to go back to the original proposal, which is what worries some Peers who do not like this scheme and who are concerned about voting against it. Frankly, I do not believe another place would stand for going back to the scheme which was so decisively overturned last year. Even if it did. I hope that we would certainly overturn it again here. I hope that this afternoon we shall take our courage in our hands—or rather, perhaps, in our feet—and accept the important responsibility that we have and make sure that this clause is taken out of the Bill. I beg to move.
3.14 p.m.
The Minister of State, Department of the Environ-ment (Lord Bellwin): My Lords, that really was the most extraordinary speech I have ever heard the noble Baroness make in the five years I have been here. To talk of confirming the overwhelming vote of this House a year ago on something which was absolutely and totally different is quite astonishing. I made clear in Committee that what is now Clause 32 of the Bill does no more than provide the legislative framework for the home-ownership scheme for charitable tenants that we are proposing. The details of the scheme will be administrative. But, at Committee stage, I thought it right to make as clear as possible how the Government intend that the scheme should operate. I therefore went into some detail about how we would propose that discounts under the scheme should be calculated and the safeguards we are intending to introduce to ensure that the scheme is not abused.
I think I should now say a little about the main aspects of the scheme and the safeguards which we intend to build into it. However, I should first make clear the Government's very genuine concern to help the tenants of charitable housing associations who are both able to and want to take on the benefits and responsibilities of home ownership. That is what this scheme is designed to do. It does so without depriving the charitable landlords of the continued use for the objects of the charity of the dwellings in which people have lived. In this way, we have tried to meet not only the aspirations of those tenants who want home ownership but also the aspirations of the charities who want to continue letting to people in housing need.
As I made clear in Committee, many of these tenants will have been housed by a charitable housing association in the first place under nomination rights by the local authority. How can it possibly be fair that, when there are two equally deserving tenants housed from a local authority's waiting list, the one who is housed by the local authority should be entitled to help
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if he wants to buy his own home through the right to buy, but the tenant of the charitable housing association should be entitled to no help at all? Clearly, for starters, there is no way that that situation can be justified.
To suggest, let alone to claim, that these tenants are getting preferential treatment is to stand logic on its head. Quite the reverse is the case. It is only because these tenants do not get the right to buy—I do not need to remind your Lordships why that is—that they are obliged to seek a house on the open market if they want to become home owners. Many of these tenants are likely to want the same rights as local authority tenants; the right to buy the house they have lived in, and cared for, for many years. Far from getting preferential treatment, many tenants of charitable housing associations will remain disappointed that they do not have the right to buy their present home.
I should like to refer to the suggestion made in Committee that the scheme will have a serious effect on the housing market and that it will jeopardise the chances of young couples who are trying to buy their own homes. The noble Baroness touched on that again today. Let me say, first of all, that I am very proud that the Government have done so much to encourage home ownership, even outside the right to buy. Fifty thousand homes have been sold under low-cost ownership schemes since 1979. Can it seriously be suggested that this scheme to help charitable tenants is likely to have a significant effect on the whole housing market? I totally repudiate the suggestion that, at most, a few thousand tenants of charitable housing associations—and let us remember that we are talking here of tenants who are generally elderly or poor—will become a new kind of property shark or will roam the country, outbidding young couples who are trying to buy their first home.
Let us get the matter into perspective. All we are doing is to give a relatively small group of tenants—a group who would be unlikely to be able to afford home ownership through any other means—a chance to buy a home of their own. The discount will never be more, and will often be significantly less, than tenants receive under the right to buy.
Your Lordships will recall that at the Committee stage I explained at some length the discount rules that we propose to operate under this scheme. I shall not go into the details again, but I ought perhaps to emphasise the main point. The discount that a tenant receives under this scheme will never be more in cash than a tenant would be entitled to under the right to buy, and nor will the discount ever be a higher percentage of the purchase price than the tenant would obtain if he were buying his existing dwelling under the right to buy. These safeguards mean that there is absolutely no question of tenants receiving large cash handouts that would enable them to acquire a house on the open market virtually free.
I should like to mention another safeguard that we are introducing to ensure that the scheme is not abused. This is the requirement that a tenant should have lived in the same house or flat belonging to the charitable landlord for at least two years before he can take advantage of the scheme. This is to make sure that, quite apart from the major safeguard provided by the requirement that charitable landlords can let only

15
to tenants who conform with their charitable objects, there can be no question of successive tenants being moved into charitable dwellings so as to take advantage of the scheme.
Finally, a word again about the costs of the scheme. We heard some rather startling figures from the noble Baroness, Lady Birk. I do not for one moment accept them. The only figure that the Government have given is that the cost is likely to be £10 million in 1984–85. I do not accept the figures which were quoted from the National Town Planning Council, and certainly not those from the AMA. I prefer the figure of the National Federation of Housing Associations, which is £14 million a year, even though that is slightly higher than our estimate. The figure may fluctuate upwards or downwards, but the figures that the noble Baroness mentioned reminded me of the kind of talk that we had in Committee when a figure of £600 million a year was mentioned. It is almost a question of think of a number, double it and then start multiplying it.
I should also mention that for future years the needs of the scheme will be taken into account when the Housing Corporation's programme is set. This will be one of the elements taken into account in setting its programme. All the talk of the noble Baroness about diminution of the allocation, and so on, is totally irrelevant. It is a red herring, We have said clearly that that is not the case, and I repeat that.
The noble Baroness said that the proposal would do nothing to replenish depleted housing stocks. With respect, that is exactly what it does. The Labour Party's key argument on everything to do with the right to buy is that it diminishes the availability of houses for rent. This proposal does exactly the opposite. As a tenant moves out into a home that he buys—and in this case it is a question of moving out—it makes available a further dwelling to let. That cannot be said about the right to buy and local authority housing, and nor did we ever say that. But here the situation is very clear. The charitable housing association will acquire every dwelling vacated by somebody who moves out and buys somewhere else.
It is a somewhat mean, vindictive and, frankly, cynical amendment. The case was argued in great depth in Committee. There is no doubt that noble Lords on this side of the House who, in the earlier debate on the Question, Whether Clause 2 shall stand part?, a year ago, expressed concern and voted against the then proposal, this time accepted it. The scene is totally different. You cannot even begin to compare what is being proposed here with what was being proposed then. It is a novel proposal, certainly, but there is nothing wrong with that. It is an attempt to find a solution for these people.
It is a very unusual case. There are no losers. The charitable housing association will retain the accommodation and the tenant will have a chance to own his home. The arguments about pushing up prices and about inflation are just a joke when one considers the numbers. The grants will have the strict limitations which I have explained. The proposal will bring fairness and equity to what is at present a very unsatisfactory situation. The only explanation that I can think of as to why noble Lords opposite wish to oppose the proposal is quite simply to take any
16
opportunity whatever to stop people changing from public tenancies to owning a home of their own. It is anathema to them. The noble Baroness has told us that she intends to divide the House and strongly to oppose the scheme. It is not worthy of that kind of consideration on any grounds at all.
3.26 p.m.
Viscount Hanworth: My Lords, we support the amendment. I think that the noble Baroness, Lady Birk, has covered everything which should be said about it. The Minister's case is based largely on only one thing—the difference for the tenants between living in a local authority dwelling and living in a charitable housing association dwelling, and the fact that it is unfair on the latter. To an extent it is, but we must see things in proportion. The vast majority of people live in private rented accommodation. This Bill will do nothing at all for them. We must keep a sense of proportion and realise that in certain cases there is a slight disadvantage for charitable housing association tenants, but it will do nothing to decrease the general unfairness in housing by selecting a very small proportion of the total.
Lord Monson: My Lords, there is very little that I can add to the potent arguments put forward by the noble Baroness, Lady Birk. We should never lose sight of the fact that the potential beneficiaries under this hastily conceived scheme will be considerably better off if this clause remains unaltered than normal purchasers under right to buy schemes, because of the choice of properties and locations that these potential beneficiaries will be offered. I think that the noble Lord, Lord Bellwin, suggested that this was a disadvantage, but I believe that most people would consider it to be a very considerable advantage. If he felt able to promise this afternoon to introduce at Third Reading, or to accept, an amendment, for example, to reduce the maximum cash payment in respect of any one property from £25,000 to £10,000—because, after all, he has already told us that the average will be no more than £6,000—I might hesitate before supporting this amendment, but if no such assurance is forthcoming I shall certainly support it.
Lord Moyne: My Lords, in returning to the charge in defence of this clause I am bound to repeat myself. I consider the proposal constructive, imaginative and ingenious. In so far as tenants avail themselves of it, vacancies will become available for people from charitable housing association waiting lists. Those moving out will obviously be the better off tenants, and the vacancies will be available for younger and less well off applicants. The clause is ingenious because purchases will be seen through by non-charitable associations, or, indeed, charitable ones if they wish to do so and are entitled to do so. A purchase through an association is important since the association handling the deal will be able to have the property surveyed. The Minister may like to assure us that vetting of proposed purchases will be part of the function of any housing association in seeing a deal through. This has an important bearing on subsequent maintenance. Concern has been expressed about this, and if the property is initially in good condition, the new owners

17
should be able to save up for maintenance as they will be relieved of having to pay rent out of taxed income.
The other concern which has been expressed is about the effect on HAG funds for new building. The Ministry are, however, paying in an additional £10 million to take account of the expected cost. This sum is based on the take-up of the right to buy in a sample non-charitable housing association. To my mind, it is likely that the take-up of the proposed outside purchases is likely to be much lower, because of people not wanting to leave their existing homes, because of the difficulty in finding new dwellings in the neighbourhood to which they are accustomed, and because the purchases are limited to publicly funded tenants. Housing association grant has only existed for some 10 years, and the maximum discount will not be widely available. In fact, the maximum discount you can get is I think 12 years, but it may be 10. I think the take-up will be small and gradual.
The wording of the clause, which at first puzzled me, results from the proposals being permissive, with alternatives open for handling the purchases and vetting the properties. It gives an opportunity without conferring a right. I think that this is a constructive proposal which, when rightly understood, should appeal to all parties. An injection of an additional £10 million of Government money into housing, whether it results in more vacancies for the less well-to-do or whether there is something over for new building purposes is surely not something to be sneezed at by any of us concerned about the nation's housing shortage.
The Earl of Selkirk: My Lords, before the noble Baroness winds up I wonder if I may say a word. I find it difficult to disagree with quite a lot of what the noble Baroness said. The clause is a very clumsy one. Its drafting is difficult: I certainly would not have understood it if I had not known what it was intending to do. It refers to about eight clauses and four Acts which are not there and that does not make it very easy to understand. I agree with particularly one point the noble Baroness made and that is that it would be much better if the Housing Association houses had been left completely out of this Bill. As I understand the noble Baroness, she is quite happy that council houses should be sold, and I am sure she is right.
The reason for that is this, if I may speak in complete generalities. In the first half of this century, council houses were what people wanted and what people needed. They have done a tremendous job—let there be no illusion. In the second half of this century, people want owner-occupation. It is a change in the development of this country; and the Government are absolutely right to switch to putting their emphasis on owner-occupation. I have no doubt about this. This is the way we are going, and I am quite certain it is the right way.
However, there is a problem here. This particular clause does not really do the harm which the noble Baroness says. It does a certain very valuable service. Take the charitable association, for example. You do not go into a charitable association unless you are in need. The great body of the people holding charitable
18
houses have no hope of buying their homes. They are providing part of the rented sector in this country which is disappearing and which is a terrible loss to those who are least well off. One must remember that. This clause—I was going to say not so much this clause but this Bill—does do a certain amount of damage to the housing associations in various ways. I know it is not intended to do so, but in fact it does. There are a certain number of people who, for various reasons, go in as charitable tenants—the least well off in the country—but sometimes money comes their way. They marry or something else happens. This can happen. They should be taken out of the charitable housing association places. Their place is then taken by somebody else who is in urgent need. The Bill allows that to happen, and in so far as it does that—and I do not say it does it in the best way—that is a useful service.
I want, however, to put one question to my noble friend the Minister. It is this. He said that this clause should apply to those able to take advantage of it. I should like to have those words enlarged: "if anyone can take advantage of it and do what is essential for an owner occupier: maintain his property". A house is a liability, let there be no illusion, we all know that. It costs a lot of money to maintain a house properly. That is the crux of it. Is that going to be enforced? I know one thing the noble Lord is going to say is this. There are regulations applying to local authorities which, in certain circumstances, are obliged to make a mortgage on certain conditions. I think they have to have a mortgage requirement which is similar to that of the building societies. That is all very well, but supposing with a discount you halve the price of the house. That particular regulation has no bearing because it no longer reflects the ability of the tenant to maintain his house properly. That is very important. I want to ask the noble Lord to put in a completely new regulation to make quite certain that those in charitable housing associations, who try to buy their houses can in fact really show that the homes can be maintained.
I want to put this point very clearly because if we support people to buy their houses and in 10 years they become a slum, that would be a disgrace, and there must be signs that the tenant is capable of doing that. I do not know whether the noble Lord can give me an answer to that. However, we must get this clear, because to spend public money on people buying their houses and then not being able to maintain them would be contrary to the interests of this country in every sort of way. I do not know whether the noble Lord can give some sort of indication on that, but with great respect, I think that this is absolutely essential.
One way might be to say that all these people must get their loans from a building society, or one might say a bank. Those organisations are pretty particular in seeing that the mortgage is properly paid, and seeing, as far as they can, that the house is maintained. That might be one way. I do not think it is a way that will appeal to the Government very much, I must say. But there are other ways of ensuring that people do not just buy houses on spec, but who really can live in the house and maintain it properly. If the noble Lord cannot say that, and cannot give some assurance as to

19
that, I then really do not think this clause is good enough. If he can give that assurance, that the purchasers really are people who have got into better circumstances and can run a house properly, then 1 think possibly this clause would do. I do not know whether the noble Lord can answer that question.
Lord Bellwin: My Lords, by the leave of the House if I may just very quickly make one or two observations on what has been said. The noble Viscount. Lord Hanworth, said that the Bill does nothing for private rented accommodation; but of course private rented accommodation is not provided by public funds, therefore it is not part of this matter at all. The noble Lord, Lord Monson, said that tenants will be better off because they will have a choice of location. You have to weigh that against the fact that you will not be able to continue in the home in which you may have lived for some years. You can argue that that is a plus or a minus, as you see it. But certainly I cannot say that there would be a reduction in the maximum. What we are setting out to do is to give a discount, as near as we can get it, equivalent to what would pertain under the right to buy from a local authority association dwelling, certainly not less, but then again not more either.
I am grateful to my noble friend Lord Moyne. I would just say to him that he really touched upon a similar point which my noble friend Lord Selkirk said. His concern was. would we vet proposed purchasers? In a way that is a similar point to the one my noble friend Lord Selkirk mentioned. But of course that will happen anyway: when an applicant applies for a mortgage the building society, bank, or whoever is the lender, always makes sure that the property is in good shape so that there will not be an onerous burden on the purchaser—
The Earl of Selkirk: My Lords, perhaps I may make just one observation. Surely the local authority or the Housing Corporation is under a legal obligation to provide a mortgage. That is an unqualified obligation, with no exceptions relating to the quality of the person to whom the mortgage is granted. Am I not correct in saying that that is in the Bill?
Lord Bellwin: My Lords, with respect, that is not correct. Where a local authority grants a mortgage on an existing dwelling which is in its possession, the authority, as the landlord, first of all knows the state of the property, since it has been responsible for it for a long time. People buying a house under this scheme will be treated in exactly the same way as any other purchaser on the open market. In order to obtain a mortgage—and I should think that my noble friend knows more about this aspect than does anyone else in your Lordships' House—the applicant will have to satisfy the building society that his income is adequate not only to buy the house, but to be able to maintain it. That is the point. I take note of the concern which my noble friend expresses. We have talked about it, not least because he himself has drawn it to our attention on more than one occasion.
20
I turn to the other relevant factor. My noble friend asked what would happen if, due to the discount, the purchaser bought the house at half its actual value. That would mean that the purchaser's mortgage repayments would be only half of what they would otherwise have been, and so he would be in a less onerous position than if he was repaying a mortgage on the higher figure.
I understand and share my noble friend's point because we are concerned that people should be able not only to buy a house, but also to keep it in good condition. I do not believe that this is really a problem, even though I know that my noble friend is concerned about it. and I hope that on balance he will feel the same way. I think that that is all that I can additionally add. I am sure that again there is a big difference between us: but this is one case where I am absolutely convinced that there is advantage for everyone and disadvantage for no one.
Baroness Birk: My Lords. I am sorry that the Minister has taken this matter so much to heart as to describe as mean and vindictive what I thought was a reasonable point of view which illustrated differences of opinion which even this afternoon have been echoed across the House. There was nothing mean or vindictive in what I said. I was taking the clause as it stood and arguing against it. The Minister said that what we are proposing was totally different from the amendment which was so resoundingly won last year. It is not totally different: it is simply trying to find a different way to deal with the same people. It is a matter on which many doubts have been raised, even this afternoon. The noble Lord, Lord Moyne, said that the Government are putting in an extra £10 million. Once again I must repeat that any extra money made available to the Housing Corporation or a housing association will come off the housing programme, which has been reduced. This is one of the important points.
The Minister also said that the tenants are not receiving preferential treatment. Other noble Lords, in particular the noble Lord, Lord Monson, have made the point that if a tenant has a right of choice of house and location, that is preferential treatment compared with the opportuntiy merely to buy the house in which he is living, which he may not particularly like, because he wants to exercise his right to home ownership. The Minister said that there are no losers, but there are losers: the taxpayers are the losers, because this is public money that is to be paid out by way of discount. That. I imagine, is why the noble Lord. Lord Monson, asked for an assurance (which he certainly did not receive) on the whole question of discount.
At times the Minister seems to talk about young people taking the opportunity. Then he says that the tenants are generally elderly or poor. The noble Earl, Lord Selkirk, quite rightly made the point that the provision is clumsy and awkward; and he showed. I thought, his dislike of the whole clause. However. I do not think there is any point in detaining the House further, and 1 commend the deletion of the clause from the Bill.
3.45 p.m.
On Question, Whether the said amendment (No. 50) shall be agreed to?
Their Lordships divided: Contents, 94; Not-Contents, 99.

DIVISION NO.1

CONTENTS

Allen of Abbeydale, L.

Jenkins of Putney, L.

Amherst, E.

John-Mackie, L.

Attlee, E.

Kilmarnock, L.

Aylestone, L.

Kinloss, Ly.

Banks, L.

Leatherland, L.

Beswick, L.

Listowel, E.

Birk, B.

Llewelyn-Davies of Hastoe, B.

Bishopston, L.

Lloyd of Hampstead, L.

Blyton, L.

Lloyd of Kilgerran, L.

Bottomley, L.

Lockwood, B.

Briginshaw, L.

Longford, E.

Brockway, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

Mackie of Benshie, L.

Burton of Coventry, B.

McNair, L.

Caradon, L.

Masham of Ilton, B.

Carmichael of Kelvingrove, L.

Mayhew, L.

Collison, L.

Monson, L.

Cooper of Stockton Heath, L.

Nathan, L.

Darling of Hillsborough, L.

Oram, L.

David, B.

Paget of Northampton, L.

Dean of Beswick, L.

Peart, L.

Denington, B.

Perry of Walton, L.

Diamond, L.

Phillips, B.

Donaldson of Kingsbridge, L.

Ponsonby of Shulbrede, L.

Donnet of Balgay, L.

[Teller.]

Ennals, L.

Porritt, L.

Ewart-Biggs, B.

Rathcreedan, L.

Fisher of Rednal, B.

Ross of Marnock, L.

Gainsborough, E.

Sainsbury, L.

Gaitskell, B.

Seebohm, L.

Gallacher, L.

Serota, B.

George-Brown, L.

Shackleton, L.

Gladwyn, L.

Stallard, L.

Gormley, L.

Stamp, L.

Graham of Edmonton, L.

Stedman, B.

Grey, E.

Stoddart of Swindon, L.

Grimond, L.

Stone, L.

Hale, L.

Strabolgi, L.

Halsbury, E.

Taylor of Blackburn, L.

Hampton, L.

Taylor of Mansfield, L.

Hanworth, V.

Tordoff, L. [Teller.]

Harris of Greenwich, L.

Underhill, L.

Hayter, L.

Wallace of Coslany, L.

Henderson of Brompton, L.

Walston, L.

Houghton of Sowerby, L.

Wedderburn of Charlton, L.

Ilchester, E.

Wells-Pestell, L.

Jacques, L.

Wigoder, L.

Jeger, L.

NOT-CONTENTS

Alport, L.

Duncan-Sandys, L.

Ampthill, L.

Eccles, V.

Arran, E.

Effingham, E.

Auckland, L.

Ellenborough, L.

Avon, E.

Elliot of Harwood, B.

Bauer, L.

Elton, L.

Belhaven and Stenton, L.

Exeter, Bp.

Bellwin, L.

Faithfull, B.

Beloff, L.

Forte, L.

Belstead, L.

Fraser of Kilmorack, L.

Broxbourne, L.

Gardner of Parkes, B.

Campbell of Alloway, L.

Glanusk, L.

Clitheroe, L.

Glasgow, E.

Cockfield, L.

Glenkinglas, L.

Coleraine, L.

Gormanston, V.

Cullen of Ashbourne, L.

Gray of Contin, L.

Daventry, V.

Gridley, L.

De Freyne, L.

Hailsham of Saint

Denham, L. [Teller.)

Marylebone, L.

Drumalbyn, L.

Harvey of Prestbury, L.

22

Hawke, L.

Northchurch, B.

Home of the Hirsel, L.

Nugent of Guildford, L.

Hylton-Foster, B.

Onslow, E.

Kaberry of Adel, L.

Orkney, E.

Killearn, L.

Orr-Ewing, L.

Kilmany, L.

Pender, L.

Kimberley, E.

Peyton of Yeovil, L.

Kinnoull, E.

Plummer of St. Marylebone, L.

Kitchener, E.

Lane-Fox, B.

Portland, D.

Lauderdale, E.

Reigate, L.

Long, V.

Renton, L.

Lucas of Chilworth, L.

St. Davids, V.

Lyell, L.

Sandford, L.

McAlpine of Moffat, L.

Selkirk, E.

McFadzean, L.

Skelmersdale, L.

Mackay of Clashfern, L.

Somers, L.

MacLehose of Beoch, L.

Spens, L.

Macleod of Borve, B.

Strathspey, L.

Malmesbury, E.

Sudeley, L.

Mancroft, L.

Swansea, L.

Marley, L.

Swinton, E. [Teller.]

Maude of Stratford-upon-

Teviot, L.

Avon, L.

Trefgarne, L.

Merrivale, L.

Trenchard, V.

Mersey, V.

Trumpington, B.

Middleton, L.

Vickers, B.

Molson, L.

Ward of Witley, V.

Morris, L.

Westbury, L.

Mowbray and Stourton, L.

Whitelaw, V.

Moyne, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

The Territorial Army: Expansion
3.54 p.m.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, with your Lordships' permission, I should like to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Defence about the Territorial Army. The Statement is as follows:
"The House will recall the Government's commitment to enhance our volunteer reserve forces. Two years ago my predecessor announced improvements in our support to the Territorial Army and our plans to expand it to 86,000 by 1990. I am now able to announce the second and more ambitious phase of these plans.
"In considering where and how to enhance the Territorial Army we have been guided by a number of principles. Most important is the operational requirement both in the European theatre and in home defence. We have also been conscious of recruiting potential, the availability of suitable facilities, and, in particular, the importance of the regimental traditions and local affiliations.
"Wherever appropriate, we have used the expansion plans to restructure and reorganise the Territorial Army infantry units. This will improve command and control and reduce their geographical spread, which has long been a matter of concern. Although final details remain to be decided, I can give the House an outline of our plans.
"We propose to raise six new infantry battalions: in North Yorkshire and Cleveland; in Yorkshire; in Greater Manchester and Cheshire; in Devon and Cornwall; in Buckinghamshire and Oxfordshire;

23
and in London. We intend to raise a new armoured reconnaissance squadron in the Newcastle area. A new air defence regiment will be formed in Scotland and a further battery added to each of the three existing regiments. All will be equipped with the Javelin guided missile.
"The House may be particularly interested to learn that we plan to form for the first time a Territorial Army Air Corps squadron, equipped with Scout helicopters. We shall also form new logistic and support units, including an ordnance unit in Bristol, a medical unit in Cambridge and a transport squadron in Wales.
"We plan also to enhance the Territorial Army's equipment. The number of guns in field artillery regiments will be increased. The infantry will recieve, along with its regular counterparts, the new anti-tank weapon LAW 80 and new small arms. TA battalions in the 2nd Infantry Division will be equipped with more mortars. Our plans are to be implemented from 1986 onwards. They are set out in greater detail in an Open Government document published today, which I have placed in the Vote Office.
"These measures will significantly increase our conventional capability, both in the United Kingdom and in Germany. They will stengthen the credibility of NATO's conventional deterrence. But for successful expansion the Territorial Army needs to recruit and retain its manpower. We are considering practical measures to assist in this, and have launched a major drive to increase employer support. I hope the House will join me in encouraging the employers of reserve soldiers to help and support them where they can.
"The Territorial Army provides over 25 per cent. of the Army's mobilised strength at a cost of only 4½ per cent. of the Army budget. The House will wish me to pay tribute to those who are already serving members of our volunteer reserves, not only in the Territorial Army, but in the Royal Naval Reserve, the Royal Marine Reserve, and the Royal Auxiliary Air Force. These men and women devote much of their spare time to valuable service in the defence of our country. Their dedication deserves the full support of the House, and of the community at large. They are a symbol of the British people's commitment to NATO's defence."
My Lords, that concludes the Statement, and copies of the Open Government document are available now in the Printed Paper Office.
Lord Bishopston: My Lords, the House will be grateful for the Statement, which is, of course, timely in view of changing trends and the greater sophistication of defence. The Minister has rightly referred to the weapons that will be in use. The House will, I am sure, welcome in particular the significant increase in our conventional capability, both in the United Kingdom and Germany, and also in the credibility of our NATO conventional deterrence. We note the fact that the TA provides over a quarter of the Army's mobilised strength at a cost of 4½ per cent. of the Army's budget. Can the Minister say what will be the increase in numbers if there are to be 86,000 by
24
1990? Has he any idea of the real cost? With regard to recruiting potential, this appears to refer to the pool of unemployed. Can the Minister report any progress on the young unemployed entering as part of the youth training scheme?
We also welcome the reference to the new air defence regiment and the Territorial Army Air Corps squadron. There will of course be interest in the maritime role. Although the Statement is not about reserves generally, will the Minister comment on that? We recognise that the Territorial Army depends not only on the dedication of those who are recruits and who join the forces, but also on their employers; and, indeed, reference is made to a scheme for a major drive with employers. I should also like to pay tribute to the fellow staff of those in jobs, as well as to the families of the volunteers, whose co-operation makes their work possible.
Finally, we pay tribute to the Territorial Army. While we recognise the traditions and the dedication of the territorial units in war and in peace, we recognise, too. their contribution to keeping our forces up to date. Doubtless noble Lords will be referring to certain areas of interest and to the traditions around the country. I have a particular interest, of course, in the Sherwood Foresters and the Gloucesters. But the service depends not only on traditions: it depends on the contribution which is to be made in the future, and the Statement reflects that need. I am sure we shall study the document in the Library with great interest.
Lord Mayhew: My Lords, is the noble Lord aware that it is a happy occasion when the Secretary of State for Defence makes a proposal which is warmly supported by all the political parties? I am sure that my noble friends would want me to express our appreciation of those who give up their time for this voluntary service; to express our hope that recruitment will go well; and to urge employers to support those who make this type of sacrifice.
Is the noble Lord prepared to say that this move is at least a first step towards creating conditions in which NATO will never have to use nuclear weapons first in Europe? I should like to ask the noble Lord what the figures of recruitment have been in the last three years, and whether they are on target for 1990. I should also like to ask him about the date. I interpret the phrase, "from 1986 onwards", as meaning that nothing will be implemented for about three years from now. Is that due to manpower difficulties, or money? Finally, is the noble Lord aware that those with territorial experience know the great value of local loyalties, not only in recruitment but in raising and sustaining morale in battle?
Lord Trefgarne: My Lords, I am grateful to both noble Lords for their most helpful reception of this Statement. Perhaps I can answer some of the points—particularly those that do not appear in the Open Government document—put to me by both noble Lords. First, let me deal with the point about numbers that was raised by the noble Lord, Lord Bishopston. As the Statement says, it is proposed to increase the Territorial Army, starting in 1986. to 86,000. The present strength of the Territorial Army is something like 71,000, so we are looking to increase the numbers by about 15,000 over that period.

25
I should like to pick up the point made by the noble Lord, Lord Mayhew, as to what is to happen between now and 1986. What my right honourable friend has announced today and what I have repeated is, of course, the second phase of territorial enhancements. Phase 1, which was announced by my right honourable friend Sir John Nott when he was Secretary of State for Defence, is of course already in hand and will be taking place between now and 1986. This is the second phase of the enhancements, which are to be put in train after the completion of the first phase. Incidentally, the cost of this second phase will be of the order of £140 million in capital terms, and about £30 million in annual costs thereafter. The present total cost of the Territorial Army is of the order of £220 million.
The noble Lord, Lord Mayhew, asked me also about the NATO position of these forces. Of course a large number of the Territorial Army units are assigned to NATO and would, indeed, be sent to Germany when so required. That is why we are having "Exercise Lionheart" later this year, which will be a major exercise of territorial mobilisation, and no doubt will prove very valuable.
The noble Lord, Lord Mayhew, referred also to local loyalties. We have gone to great lengths in formulating these plans to maintain the local loyalties which are so strong in many of these areas, not only for the reasons which the noble Lord mentioned but also, as I think he recognises, too, for purposes of recruitment, because they are, indeed, valuable in that context as well. Those are the principal points which have been put to me by noble Lords, but if there are any other I shall be happy to try to answer them.
Lord Kilmany: My Lords, I congratulate my noble friend on the most promising announcement that he has made. I should like to ask him whether the newspaper reports that one has read recently have been correct in mentioning the Fife and Forfar Yeomanry as one of the regiments that will be recreated. If I am right in that regard, I should like to ask the noble Lord whether he is aware that the Lothians and Border Horse are another yeomanry regiment of the utmost excellence.
Lord Trefgarne: My Lords, I am certain that my noble friend is correct in what he says, but I have to say that we are taking great care in the selection of the names of the new units, not least because of the intense rivalries, as witnessed by my noble friend's remarks.
Lord Leatherland: My Lords, can the noble Lord the Minister explain what he had in mind when he said that the infantry would be issued with a new type of small arm? What particular type of arm is that to be?
Lord Trefgarne: My Lords, new weapons are progressively being issued, both to the regular forces and, in due course, to the territorial units, and it is those weapons to which I referred. If the noble Lord would like more detail I shall be happy to write to him.
Lord Leatherland: My Lords, a lot of us were brought up in the first war on the short Lee Enfield. Is that to be abolished and replaced by a different kind of rifle?
Lord Trefgarne: My Lords, I am sorry to have to tell the noble Lord that there are now no Lee Enfields available for issue.
Lord Auckland: My Lords, is my noble friend aware that those of us who, like myself and many of your Lordships, have served in the Territorial Army will very much welcome this Statement? Can my noble friend say whether the regiments which lost their identities under the 1957 White Paper will in any way be able to reclaim them, because this does so much for morale? Secondly, will there be an extension of overseas training? My noble friend made reference to NATO, but will there be an extension of camp training with units of the British Army of the Rhine and possibly in Cyprus and elsewhere?
Lord Trefgarne: My Lords, I have referred already to "Exercise Lionheart" which is to take place later this year and which, I think I am right in saying, will involve 130,000 or more soldiers, many of whom will be territorials. It ought to be said that overseas training presents something of a problem for territorials because, of course, their time is limited, and one wants to be sure that they do not spend too much of that valuable time travelling to or from their training areas. But wherever there is an opportunity for them to train effectively overseas—for example, in "Exercise Lionheart" this year—then that will be taken. But I cannot promise that there will be any great extension of overseas training for the territorials within the new proposals to which I am referring today.
As for the other matters raised earlier by my noble friend, I should tell him that all of those matters, particularly those relating to the names of the new units, are to be very carefully considered. However, I should warn my noble friend that there are a large number of competing claims for the names of these new units.
Lord Glenkinglas: My Lords, bearing in mind what my noble friend Lord Kilmany has said, as I understood it the main thrust of the Statement was as regards the Air Force. I am quite certain that my noble friend the Minister will agree that the Scottish contribution to the Territorial Army has been much greater than that in the past, and I hope that not only will the suggestions of my noble friend Lord Kilmany be accepted but that there may be other efforts that the Scottish may make in this regard.
Lord Trefgarne: My Lords, we shall certainly want to do that. Indeed, the Statement contains a number of proposals in that direction.
Lord Maude of Stratford-upon-Avon: My Lords, is my noble friend aware that nothing could do more to increase the confidence and help the morale of those who are already serving their country in the Territorial Army than this expression of confidence by Her Majesty's Government in the reserve forces? If the reports in the newspapers are true, that the Government propose to reconstitute some of the old territorial regiments that have been lost, this will surely be a massive aid to recruitment. Finally, is it expected that there will be any comparable increase in second line service and transport units to match the increase in the infantry battalions?
Lord Trefgarne: My Lords, to answer the last of my noble friend's questions first, yes, there are some increases in the support units implicit in what we have announced today. For example, there will be another RCT squadron, another field ambulance and a new ordnance company, together with the other units that I have already mentioned. I certainly accept what my noble friend says, that the steps which we are taking should have some effect on recruitment. To be truthful, the problem is not so much one of securing a sufficient number of recruits for the Territorial Army as one of persuading them to remain in the Territorial Army for longer than they do at present. Retention is one of the difficulties that we are presently facing, and we are doing what we can to overcome that difficulty.
The Earl of Selkirk: My Lords, I understand that the auxiliary air force will be given pilot training. Can my noble friend give some idea to what stage it is intended to take them?
Lord Trefgarne: My Lords, I did not say that the Royal Auxiliary Air Force is to be given pilot training, although that is a matter that is under consideration. I said that there will be a new Army Air Corps squadron flying helicopters. It is anticipated that the pilots for that squadron will, in fact, be those with former Army Air Corps experience, and are not likely, therefore, to be trained from scratch. On the point of the Royal Auxiliary Air Force, that is a matter which we are considering further.
The Earl of Glasgow: My Lords, I should like to clear up one point. Did I understand my noble friend to say that there would be no new territorial battalion recruited in Scotland?
Lord Trefgarne: No, my Lords, that is not so.

Housing and Building Control Bill
4.12 p.m.
Consideration of amendments on Report resumed.
Clause 33 [Meaning of "secure tenancy"]:
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 51:
Page 35, line 28. leave out ("paragraph 3 shall be omitted and").
The noble Baroness said: My Lords, in moving this amendment. I should like also to speak to Amendment No. 53.
Amendment No. 53: Page 35, line 39, at end insert—
("2B. (a) A tenancy is not a secure tenancy if the tenant is an employee of a local education authority, and

(i) the duties in his contract of employment necessitate that he live within reasonable proximity of an education establish-ment;

(ii) the dwelling was let to him by the authority in consequence of that necessity.

(b) In this paragraph "contract of employment" has the same meaning as in paragraph 2 above and local education authority means an education authority for the purposes of the Education Acts 1944 to 1981.").
These two amendments run in parallel with one another. Amendment No. 51 seeks to restore paragraph 3 of Schedule 3 to the Housing Act 1980,
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which excludes from security of tenure, and hence the right to buy, houses let under the Education Act 1944. In the Housing Act 1980 the actual paragraph is specific:
"A tenancy is not a secure tenancy if the tenant is an employee of the landlord and … the dwelling-house is held by the landlord for the purpose of any of its functions under the Education Act 1944".
That was clear and explicit in the 1980 Act. As the noble Lord, Lord Bellwin, told us on several occasions during the Committee stage, the idea of this Bill is to iron out any anomalies that need to be ironed out, as the Government appreciate that problems have arisen during the two years in which the Act has been in operation.
In considering anomalies, I would ask the noble Lord why, in the 1980 Act, he took from that part of the Act the provision protecting education housing but at the same time instituted in the Act a section protecting housing for the police and fire services. One presumes that the Home Office knew that the Housing Act was going through in 1980, but it seems strange that they never asked for any special provision. The education and social services asked for a special provision. At that late stage they must have seen the anomaly, and therefore the Minister is now trying to rectify the matter but, as I said on a previous Committee day, at the expense of education and social services.
I can readily recognise why the police and fire services might need a certain type of accommodation—perhaps for the young, single person. But information which I have obtained from a very authoritative source is at great variance with that which the Minister gave me in reply when I raised this matter on the last Committee day. I understand that the watch committees, which are police committees, run the police service on rosters and that these make quite sure that throughout 24 hours the police service is covered in the particular locality. The same arises with the fire departments; they go on what are called "watches" which, again, comprise a designated number of hours to cover a 24-hour service. In the main they now employ those who live in council properties, if they so wish, in private properties, if they so wish, and also those who are able to purchase their own properties. Again from very authoritative sources, I understand that police officers can live as far as 10 miles away from the particular police station where they are stationed. I understand that the fire service does not apply such a definite mileage.
These personnel employed by the fire service and the police service have regular hours of work, even if they work on a shift system, so they know that if they go on at a certain time they will finish at a certain time. All they have to do is to make sure that they get to the police or fire station at the particular time in question. If there is an extreme emergency—and it has to be an extreme emergency—both services have ways and means of calling in their personnel, which very often means that they go out and fetch staff in cars. Therefore, I do not understand what the Minister meant when, at column 1387 of Hansard of 22nd March 1984, he said:
"firemen are required to live in very close proximity to the station at which they work".
In the light of what I have said I hope that the Minister will look at that again, because my information, which comes from a very authoritative source, indicates that that is not quite true. So we are at variance on that.
The point I want to raise concerning education is very different. The days when fire and police officers needed to live next door to the job have passed. But there is now a greater need for those attending education and special schools to live near the job. We are now finding that pupils at residential special schools have changed very considerably. With the passing of the Education Act 1980, a number of children who were in special schools have become integrated into ordinary schools and are receiving their special education at that level. The special schools which are outside borough boundaries and ILEA boundaries very often have as their pupils those who in the past have received care under the National Health Service care in the community projects. Therefore, those pupils are leaving national health institutions—which often were mental hospitals—and are now being cared for in the community.
As a first stage, before they actually return completely to the community, they go to these residential schools. Many of these pupils can be described as being much more difficult behaviourally than were previous pupils. Their problems are much more acute; their maladjustment is much more serious. All these matters are manifested in the many more emergencies that arise, because of the more difficult pupils now being accepted in the schools. Therefore. I think that the need for the educational provision must still be continued and, as the noble Lord said previously, perhaps the needs of fire and police are more essential. My case and my argument is that there is a need for clarity, if for nothing else, in education. I raise no objection if the noble Lord says. "We must have protection for firemen and for police". All that I would add is, "Let us have parity for education, where the needs are now greater because it is incumbent upon the staff to live on the school premises or near them". In this way, they can look after emergencies; and not only that, but carry out the extra duties they are involved in. I beg to move.
Lord Bellwin: My Lords, we talked about Amendment No. 53 previoulsy. I wonder whether the noble Baroness, in what she has just said, was referring also to Amendment No. 157 which I had understood might be covered.
Baroness Fisher of Rednal: Yes, my Lords.
Amendment No. 157: Page 98, leave out line 51.
4.22 p.m.
Lord Bellwin: My Lords, I believe that the landlords' interests will be adequately safeguarded under the arrangements we are now proposing. The question is whether landlords will be in a position to gain possession of such dwellings when they need to do so for operational reasons. There are three grounds for possession that I think are particularly relevant. First, the new Ground 9A (in Clause 24) will enable the landlord to gain possession if he requires a dwelling for letting to new employees. Second, new Ground 5B (in Amendment No. 40) will enable him to gain
30
possession where an occupant of the dwelling has behaved in a way likely to put at risk the function of the building. Third, Ground 8 (in the existing legislation) will enable the landlord to gain possession where he requires to do so in order to redevelop or to carry out works to the building.
I said in Committee that I should be happy to reconsider, if your Lordships so wished, pressing the case for the retention of paragraph 3 of Schedule 3. I am as concerned as anyone that we should do nothing to prejudice the effective operation of premises used for social service and education service. But we must not lose sight of the fact that tenant employees also have a right to expect some security to the extent that this does not conflict with basic functional necessities. I have listened carefully to what the noble Baroness has said and I have fully considered representations received since Committee. Given the safeguards that I have mentioned, I am still not persuaded of the case for retaining paragraph 3.
Under the Government proposals social service and education authorities will be in a position to gain possession of a curtilage dwelling where it is important that they should do so for operational reasons. In other cases, what we are proposing will give employee tenants an added security which I believe they have every right to expect.
When we are talking about the educational matter, I think that I should make it clear and perhaps say a word or two about police and fire authority housing. A special exception is needed for police because police officers are not covered by paragraph 2 of Schedule 3 because they are officers of the Crown and are not employees. The provision regarding firemen is geared to—and this is the point—day manning arrangements which are gradually being introduced in some areas to replace shift arrangements. The noble Baroness moves her head signifying that she does not disagree. But what 1 have said is so. Whether or not it impacts sufficiently upon her case is a different matter; but that is what is happening as far as the fire service goes and the police situation is as I have described it.
What more is there to say beyond what I said last time about Amendment No. 53 and education? I could repeat what I said then. I am sure the noble Baroness does not particularly want me to do that. She asked whether I would look again, still talking about the fire matter and about premises in close proximity. Of course, she knows I will certainly do that. I want to be absolutely clear that there is no difference between us as to the facts of the matter. I will look at that. As far as the amendment is concerned—and I am referring to Amendment No. 53 as well—I am trying to avoid going over what I have said before, hence my hesitency; but I think that what is very important here is that there should be no possible proposals—and I do not think the noble Baroness intends this—which would deprive certain tenants of the statutory security which they have enjoyed since 1980.
There is a world of difference between giving an additional right and taking one away. I am sure that that is not the noble Baroness's intention but that would be the effect as far as Amendment No. 53 is concerned. If the noble Baroness would like me to elaborate on these arguments, I would be happy to do

31
so. I have copious notes to hand; but I am sure that this is not the intention either. May I say that we have considered this very carefully; and the noble Baroness will know that my noble friend Lady Faithfull has been very anxious in this area, too—
Baroness Fisher of Rednal: My Lords, cemeteries.
Lord Bellwin: My Lords, cemeteries as well. The noble Baroness will have to take it from me that she has spoken to me about all matters of this kind which are of concern to her. I want to say that we have considered very carefully what provisions are appropriate to ensure that landlords retain control over dwellings which are needed for operational purposes, and at the same time we are conscious not to ride roughshod over the reasonable expectations of tenants, and certainly not to deprive them of the rights which were conferred in 1980—which is what Amendment No. 53 would do. I am sorry I cannot be more helpful. 1 know that the noble Baroness raises these matters in good faith because of her concern. This happens to be an area where I share that concern. I really think that her fears are groundless.
Baroness Fisher of Rednal: My Lords, will the noble Lord the Minister look again at what I have said? Perhaps I could discuss two points with him which I feel that perhaps I did not explain fully. If I explain them to him privately it may be helpful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Lord Aberdare): My Lords, I have to point out that if Amendment No. 52 is agreed to. I cannot call Amendment No. 53.
Lord Bellwin:Amendment No. 52:
[Printed earlier: col. 1374.]
The noble Lord said: My Lords, Amendment No. 52 was taken with Amendment No. 1 A. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 53 and 54 not moved.]
Clause 36 [Giving and acceptance of an initial notice]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 55:
Page 38, line 10, leave out ("39(3)") and insert ("40(3)").
The noble Lord said: My Lords, this is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 56:
Page 38, line 30, leave out subsection (6).
The noble Lord said: My Lords, the Minister and his advisers will have seen that the words in the amendment relate to yet another attempt to raise the insurance issue. May I say to the Minister that it would not be my intention to press these matters too strongly, but we are under an obligation from a great range of people outside to use the opportunities that we have
32
both to make their case and to invite the Minister to try to satisfy them in a difficult situation that the intentions of the Government are being speedily and satisfactorily carried out.
We on this side of the House are a little uneasy about the provisions contained in the Bill for the Secretary of State to approve insurance schemes and, in building regulations, to prescribe the type of insurance cover required, including the form and the contents of such policies. We are mindful, having been advised by people from outside—and we are certainly not objecting to the powers that the Secretary of State may have—that circumstances change and the Minister may very well feel from time to time that there is a need substantially to change the basis of the insurance schemes. We believe that when that happens there should be a mechanism which would force the Secretary of State to come to Parliament to explain and seek approval. The Minister may tell us that those he is in touch with, and not only the insurance companies but also the range of people that we have talked about—associations and other people—are satisfied that that would not happen; in other words, that there would be full consultation when the basis and the criteria on which the insurance schemes which need to be approved are altered.
Perhaps the Minister could say something about the progress towards getting a resolution of these matters, bearing in mind that the idea has been talked about—that is, the insurance basis of the matter as opposed to the previous one—for four or five years. I would say to the Minister that we are aware that progress has been made almost every time the matter has been brought to the House, but I should be grateful to the Minister for some assurance.
Lord Skelmersdale: My Lords, I have already described at some length in Committee our insurance proposals under this Bill. I readily take the point of the noble Lord, Lord Graham, that these are complicated. I explained the two alternative routes down which the Bill allowed us to go: under either subsection (6) or subsection (7) of Clause 36, as it is now numbered. Our current thinking remains that subsection (6) is the right way forward. Amendment No. 56 would delete this subsection, however, leaving no option but to make regulations under subsection (7).
Amendment No. 57 is merely consequential; and Amendment No. 58 would suggest the alteration of the word "may" to the word "shall". I would assume that is intended to make certain that regulations imposing requirements for insurance are made before certification is introduced. I assume also, first, that I am correct, and, secondly, that the noble Lord intended to speak to all three amendments together.
Lord Graham of Edmonton: Yes, my Lords.
Lord Skelmersdale: However, as I explained in Committee, certification under Clause 36 will not—this is the important point—and cannot begin until either insurance regulations are made prescribing the cover to be required or else a specific scheme or schemes has or have been approved for the purpose by the Secretary of State. If there were to be no insurance schemes, then regulations would have to be made for

33
certification to be possible. This is because subsection (1) of this clause requires that an initial notice will have to be accompanied by prescribed evidence of insurance. Failure to provide such evidence will be one of the grounds on which the local authority will have to reject the notice, so there can be no chance of an inspector supervising work without the necessary insurance. Amendment No. 58 is therefore un-necessary.
I have already explained that for the present we propose to rely on approved schemes. When the market has developed we may be able to make regulations, but we are not at that stage yet. The amendments, by forcing us to make regulations at the outset, would mean that we would have to do so without experience of the new system in practice. There could be a risk, therefore, that an insurer could find a loophole in such regulations which allowed him quite legally to provide cover which was not adequate to protect owners or third parties. By approving schemes, however, the Secretary of State will be able to vet every proposal for insurance and to ensure that it meets the letter as well as the spirit of the requirements set out in our guidelines, which I described in Committee.
The key question of the noble Lord, Lord Graham, was: is it possible for the Secretary of State to withdraw such approval for a scheme? The answer is, Yes; and I am sure that, with that proviso, the noble Lord will feel able to withdraw this amendment.
Lord Graham of Edmonton: My Lords, I am grateful each time the Minister gives more information on the progress of overcoming the problems involved, so that those outside may feel satisfied that the best is being made of a very bad job. The Minister must be aware that those outside have the greatest unease about the insurance aspect of this part of the Bill, as opposed to many others. There is violent disagreement about certain other matters, but there is unease and fear that there could be some (if I were to use emotive words perhaps I might be out of order) possibility that something dreadful might happen because the insurance side has not been got right. This causes great unease outside the House. The Government have decided that this is the way they want to do it, so theirs is the responsibility. But the unease does exist, and the Minister will know that I am not carrying tales because he will understand that the great unease felt outside needs to be drawn constantly to the attention of the Minister and his advisers, to remind them that the quicker they are able to satisfy the interests outside—that is everybody; not just the party or association, but the insurance industry as well—then the better will be their lot in implementing the legislation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 57 and 58 not moved.]
Clause 37 [Effect of an initial notice]:
4.37 p.m.
Viscount Hanworth Viscount Hanworth moved Amendment No. 59:
Page 39, line 6, at end insert—
(" ( ) If in the course of the work an inspector resigns or is dismissed by his employer the local authority shall, having
34
regard to all the circumstances, decide whether to appoint their own inspector, nominate an independent inspector or leave the decision to the developer or building contractor, and such a decision shall be final.").
The noble Viscount said: My Lords, this is a very straightforward amendment which can be explained quite quickly. It is entirely non-political. Although only my name appears above the amendment, it has the full support of the Opposition and Alliance Parties. The noble Lord, Lord Graham, and I have had discussions with the Minister and his advisers, and we are completely unconvinced by the arguments against the amendment. What is at stake is simply that the Bill as it stands leaves an open gateway for dishonesty and corruption by unscrupulous developers and contractors who can sack an independent inspector or cause him to resign. They are then free to find a more pliable inspector. The amendment says that in such circumstances:
"… the local authority shall, having regard to all the circumstances, decide whether to appoint their own inspector, nominate an independent inspector or leave the decision to the developer or building contractor".
So far, the Government's only arguments against this amendment are, first, that there is already a disincentive for sacking an inspector because of the difficulties with providing certification for partly completed work; and, secondly, that if corruption is occurring, the local authority or the authority approving the inspector will take action. I maintain that it is completely idle to suppose that action will be taken except in the clearest case of dishonesty, and this because of the difficulty of proof and the risk of legal action, with a possible appeal. The third Government objection is the potential liability of the local authority if they take on inspection themselves or appoint an inspector. However, such involvement, if any, would be no more than if they are used as inspectors in the first instance.
I am sure that your Lordships would agree that we ought to discourage the possibility of dishonesty so far as we reasonably can, and that is what this amendment seeks to do. It also ensures that the local authority will take an interest where there is a potential for dishonesty. If the Government are right in thinking that the circumstances I envisage will seldom arise, the amendment is surely wholly unobjectionable. If. on the other hand, my fears are justified, the amendment becomes essential. I earnestly hope that the Government will agree to the amendment or offer some compromise or further consideration. If they do not, and cannot today produce any better arguments than those which I have outlined, I shall almost certainly decide to divide the House.
Lord Graham of Edmonton: My Lords, I support the amendment. At Committee stage, the Minister was kind enough to invite the noble Viscount, Lord Hanworth, and me to discuss the matter with him. We had a very productive hour in his office during which we went over the ground. Although we were unable to persuade him and although he was unable to persuade us, this does not alter the fact that there is understanding about the point we are making. We are trying to find a form of words that will meet a situation which may not arise very often but of which we need to take account. This is because of the size of and the wide range of attitudes in the building industry.

35
We want to take account of a situation in which a builder may decide, for his own good reasons, to dismiss an approved inspector, without there being absolute clarity about it. The Minister carefully pointed out to us that because of the consequences and difficulties which would ensue, it was unlikely that a developer would take lightly such a dismissal. May I pray in aid of our case the letter which the Minister wrote after our meeting to the noble Viscount, Lord Hanworth. In discussing the kind of problems which would exist over the form of words, the Minister said:
"If the authority nominated an inspector who was subsequently proved to have acted negligently, what would the council's liability be?"
If a developer appoints an approved inspector who is dismissed for what are considered to be uncertain reasons, we say that in those circumstances the local authority should have the power to appoint somebody else. The Minister asked: if the inspector who is appointed by the authority turns out to have acted negligently, what would the liability of the council be? It would be the same as it is now. Every inspector of buildings is now appointed and employed by the local authority. If he is negligent, the local authority has to carry the responsibility. We are trying to ensure the future right of the local authority to be involved. In the case of all forms of authority there must be responsibility.
The Minister went on to say in his letter:
"Secondly, we would, in effect, be asking the council to take a judgment on the competence of individual approved inspectors—turning down one and instructing developers to give work to another".
The Minister is quite happy to say to the approved bodies that they will have the right to work out their own system of approving approved inspectors, and whoever they appoint will be "franked" by the Secretary of State. We believe that local authorities are perfectly competent to compile lists of approved inspectors who have already been "franked" by their approved body, be they members of the RIBA or of the relevant engineering and surveying institutions. They have already had to pass a number of tests and prove their competence. We believe that local authorities are perfectly able to compile such lists.
Part of the Minister's case is that if a local authority or anybody else has reason to believe that an inspector has been too lax it can tell the designated body which approved that inspector. We ought not to start off on the premise that part of the job of a local authority is to monitor the efficiency of approved inspectors. That should be the job of the designating body. More than once the Minister has quite rightly said that the RIBA will very jealously protect their own integrity. We do not believe that this should be the job of the local authorities. Unless the noble Lord the Minister is able to satisfy us that there is no need for these words, if the noble Viscount, Lord Hanworth, presses his amendment, we shall support him in the Division Lobbies.
Lord Skelmerdale: My Lords, at the Committee stage I explained the sequence of events which take place when an approved inspector cancels his initial notice and either a second inspector or the local
36
authority takes over responsibility for the work. If, instead, the developer sacks his inspector, he has the same options of looking for a second inspector or of going to the local authority. As the noble Viscount, Lord Hanworth, said, this amendment would remove the developer's choice in those circumstances and instead empower the local authority to decide whether to allow a second approved inspector to take over the work. If they did so allow, the authority would have the option of nominating which inspector should take on the job.
Perhaps I might dispose here of the last point which the noble Lord, Lord Graham of Edmonton, made. He referred to nomination being the same as nomination by an approved body. In fact, it is quite different. In the second case—nomination by an approved body—there is an open choice to be made by the developer or, under the amendment, by the council, whereas the amendment means the nomination of an individual. Therefore freedom of choice is very much restricted by the amendment.
I very much appreciate the noble Viscount's concern about this point, not least because we discussed it at some length outside the House during the meeting referred to by the noble Lord, Lord Graham of Edmonton. I accept entirely the fundamental concern which I know underlies the amendment; namely, that building work should be supervised by an impartial, properly qualified inspector to ensure that it meets the required standards of health and safety. However, the Government firmly believe that this objective will be achieved by the Bill as it is now drafted.
For a number of reasons we cannot accept the ideas behind the amendment. First, there is the problem that by imposing on a local authority the obligation to make a judgment about the quality of the building work and the chances of it being carried through to satisfactory' completion we shall be opening up a new field of potential liability. If the authority nominated an inspector who was subsequently proved to have acted negligently, what would the council's liability be? This point was mentioned in the letter which I sent to the noble Viscount, Lord Hanworth, which has just been referred to by the noble Lord, Lord Graham of Edmonton. The noble Lord, Lord Graham of Edmonton, answered my question by saying that it would be the same as under the current scheme. This is not so. The difference is that in the case we have postulated—that of a second inspector, whether council nominated or otherwise—the second inspector would not always have been concerned with the project whereas, under the current scheme, the local authority would have been. The local authority has no reason to take an interest in the work and it will not, and should not, bear any responsibility for that work. This amendment, however, would put local authorities at risk of liability for work which they had not supervised. I very much doubt whether the local authorities would welcome it.
Secondly, we should also be asking councils to take a judgment on the competence of individual approved inspectors—turning down one and instructing developers to give work to another. I have already explained the difference between the ideas of the Government and those of the noble Lord, Lord

37
Graham of Edmonton. Even so, this looks invidious and it is hard to see how local authorities could make such judgments on any very clear or secure grounds. It is the bodies which are to approve the inspectors which would have evidence of individual qualifications and experience. It is on the basis of that information that they would have taken the decision to approve any particular inspector. As I explained in Committee (at col. 446 of Hansard) if a local authority, or anyone else, had reason to believe that an inspector was too lax, they could tell the designated body which approved him. It is then up to the designating body to consider whether to withdraw his approval, which they can do at any time. Any designated body will be concerned to preserve its own reputation, without which its designation would be unlikely to last very long. Before designating bodies, we will want to be satisfied that they have suitable disciplinary arrange-ments.
I must also emphasise that I believe the problem will arise less frequently than noble Lords may expect, because of the practical difficulty of giving an "interim certificate" for a half-completed building. Sheer economic necessity will, in virtually all cases, force a developer to stay with the approved inspector he chose first, even though he may think that the inspector is being too rigorous.
The noble Viscount, however, was concerned about the other extreme; namely, an approved inspector who was too "pliable". Every approved inspector, though, will in fact be acting under a statutory duty, and legally responsible for his actions and judgments; and this should not be taken lightly. If an inspector were to co-operate—which, your Lordships will understand, is a euphemism—to the extent of knowingly or recklessly issuing a notice or certificate containing a false or misleading statement, he would be committing an offence under Clause 46. Not only would he be liable to a fine and/or imprisonment: he would, on conviction, automatically lose his approval for at least five years. In a case where an inspector merely acquired a reputation of being easy-going, the designated body which approved him could consider withdrawing that approval at any time. I believe that the professional institutions that we have in mind as possible designated bodies will be very concerned to maintain their reputation, by exercising their full responsibility under this Bill.
In any case, I believe it is wrong to expect that developers will always want to cut corners and to produce buildings that contravene the regulations. In short, we believe the way to ensure that buildings supervised by approved inspectors are safe is to have proper procedures for vetting applicants in the first place, with power to withdraw approval if appropriate. Since we are now proposing that approvals will be given for five-year periods, there will be an automatic review process built into the system. To follow some of the draconian ideas proposed in the amendment would. I feel, be quite wrong.
4.50 p.m.
The Earl of Selkirk: My Lords, one point that has worried me about the independent inspectors is this. Supposing there are inspectors who are a little easier than others: as I understand it, that is the problem
38
which worries the noble Viscount. What does one do in that situation? One dismisses one man, knowing that his replacement might take a slightly different view of some particular aspect of architecture. This can be quite a small matter. I am not talking about fraud or anything of that sort, but somebody else may be a little easier in some respects. My noble friend's answer to that is, "All our inspectors will be so grand and wonderful that they will never make mistakes and will never disagree on personal grounds, whoever the developer is". Of course they will disagree, and they will say, "I don't like this chap. I don't like his approach".
This is really an astonishingly innocuous amendment. All that happens here is that one dismisses the inspector and reports it to the local authority. That is the first step. One obviously has to have a conversation about the whys and the wherefores. One does not know what the local authority will say. They may say, "Take our chap", or they may say, "Appoint another inspector yourself. But one will have reported the matter to the local authority. If the local authority knows that Mr. Bloggins is always being asked, the local authority will grow a little suspicious that Mr. Bloggins is an easy-going chap.
My noble friend questioned the liability of the local authority. If a local authority nominates a well-qualified man, I cannot believe that any liability would rest on the local authority. My noble friend may have taken legal advice on this point, but I would have thought that in the case of a highly-qualified man, the local authority would not be left with any liability.
One could have the situation where one inspector is unsatisfactory from the point of view of the developer, who then appoints another inspector. My noble friend says that this is all right because all inspectors will be perfectly qualified. Is he really satisfied with that situation? I should like to go a step further. As far as I know, many of the inspectors will be appointed by the Secretary of State. If something goes wrong, one will have to apply to the Secretary of State, and not to one of the professional organisations. If I may say so, an application to the Secretary of State is rather a laborious way of dealing with this problem. My noble friend has given his views and I do not expect he will change them; but I am telling him quite frankly what my anxieties are.
Lord Skelmersdale: My Lords, with the leave of the House, I will answer my noble friend's points. He questioned whether all approved inspectors will be properly qualified. Certainly they will be—otherwise the designating body would not be confirmed by the Secretary of State in the first place. That is why I placed quite a large measure of reliance in my reply on the powers and policing ability of the designating bodies.
My noble friend asked also whether the local authority will get to know of any upset with an approved inspector. The answer is, yes. In order to appoint a new approved inspector, the initial notice—which is individual to an inspector—would have to be cancelled and a new initial notice would have to be taken out for the further work. The key problem which my noble friend identified was that the

39
developer might dismiss a strict inspector in order to use a rather easier one. In practice, I believe it is unlikely that this will happen. In the way that we see this provision operating, the approved inspector will have a contract from the developer. If the contract is broken, there will be a financial sanction against the developer and all the difficulties which always come in any situation where one replaces one man with another. Although I appreciate my noble friend's concern, there is not quite so much in it as he makes out.
Viscount Hanworth: My Lords, I am afraid that the Minister has said almost nothing new and almost nothing that I have not already dealt with. There was, however, his last point that a contract might perhaps exist between an inspector and a developer; but there still remains the possibility of the inspector himself resigning.
I do not mean to be unkind, but when the Minister talks about the inspecting authority succeeding in eliminating unsatisfactory or corrupt inspectors except in the very long term, it makes me believe that his advisers must be living in an ivory tower and have no idea of the corruption which occurs all around us today—even in the best-run circles. If we look at the newspapers, we can see that over the past year or so there is no profession where corruption has not occurred—even in the medical profession, which should be more ethical than most. As the noble Lord, Lord Graham of Edmonton, has already said, the building industry is a difficult profession for various reasons. I do not blame them, but corruption can occur there perhaps more easily than it can in many other places.
One has to realise that only in extreme cases, as I have said already, can a case of dishonesty be brought to the courts and proved. Even then, one faces the possibility or probability of an appeal. Taking such a case to the court will not work unless the offence was really blatant. I offer one compromise, if the noble Lord will agree. I would cut the amendment down to say simply that the council shall,
"having regard to all the circumstances, decide whether it is desirable for them to take on the inspection work".
That would satisfy me completely.
I suspect that the noble Lord will say that a great deal of the purpose of this part of the Bill is to avoid the local authority taking over work, that they wanted them to be in competition, with independent inspectors, and that they want their staff reduced. To be perfectly fair, of course they are already overworked in some places. But the noble Lord really cannot have it both ways. If he says that these circumstances are very unlikely to arise, when they do arise there is then no harm in the local authority taking over.
I hope that the Minister will agree to look at this very important matter. It is perhaps not as important as some other issues we have dealt with in the Bill, but in this day and age we must do everything that we can to prevent corruption. That is very important. I must say that it is not very desirable that arguments which have so little weight should be put forward against the amendment. I should like the Minister to say whether
40
he can meet me; otherwise, I am afraid I shall have to press this amendment.
Lord Skelmersdale: My Lords, again with the leave of the House, I do not think it is quite right for the noble Viscount to put words into my mouth and suggest what I might have said if I had been asked a particular question. However, he was asking whether under the new circumstances which might prevail at another stage I should feel able to accept an amendment such as he has just described. I am afraid the answer is, "No".
Lord Broxbourne: My Lords, I wonder whether I may ask the noble Viscount—
Noble Lords: Order!
Lord Broxbourne: My Lords, with the leave of the House, may I ask the noble Viscount, in considering an improvement in the drafting of his amendment, whether he could find a more appropriate word than "employer". It is not an "employer". The parties enter into a contract in regard to charges. There is not an "employer" either in the ordinary sense of the word or in the specialised sense which it bears in the building industry. If the noble Viscount is to redraft his amendment, perhaps he could take care of that.
Viscount Hanworth: My Lords, I am certain that the noble Lord is aware that any amendment one puts forward is always defective in one way or another. Certainly if I am lucky enough to win the Division I shall take any necessary steps to tidy up the amendment.
5.2 p.m.
On Question, Whether the said amendment (No. 59) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 105.

DIVISION NO.2

CONTENTS

Airedale, L.

Fisher of Rednal, B.

Aylestone, L.

Gaitskell, B.

Banks, L.

Gallacher, L.

Beswick, L.

George-Brown, L.

Birk, B.

Gladwyn, L.

Bishopston, L.

Graham of Edmonton, L.

Blyton, L.

Grey, E.

Bottomley, L.

Grimond, L.

Briginshaw, L.

Hale, L.

Brockway, L.

Hampton, L.

Brooks of Tremorfa, L.

Hanworth, V. [Teller.]

Bruce of Donington, L.

Harris of Greenwich, L.

Caradon, L.

Hayter, L.

Carmichael of Kelvingrove, L.

Henderson of Brompton, L.

Collison, L.

Houghton of Sowerby, L.

Cooper of Stockton Heath, L.

Jacques, L.

Darling of Hillsborough, L.

Jeger, B.

David, B.

Jenkins of Putney, L.

Dean of Beswick, L.

John-Mackie, L.

Denington, B.

Rennet, L.

Diamond, L.

Kilmarnock, L.

Donaldson of Kingsbridge, L.

Leatherland, L.

Donnet of Balgay, L.

Listowel, E.

Ennals, L.

Llewelyn-Davies of Hastoe, B.

Ewart-Biggs, B.

Lloyd of Kilgerran, L.

41

Lockwood, B.

Seear, B.

Longford, E.

Serota, B.

McIntosh of Haringey, L.

Shackleton, L.

Mackie of Benshie, L.

Stallard, L.

McNair, L.

Stedman, B. [Teller.]

Mais, L.

Stoddart of Swindon, L.

Milner of Leeds, L.

Stone, L.

Molloy, L.

Strabolgi, L.

Monson, L.

Taylor of Blackburn, L.

Ogmore, L.

Taylor of Mansfield, L.

Oram, L.

Tordoff, L.

Peart, L.

Wallace of Coslany, L.

Pitt of Hampstead, L.

Walston, L.

Ponsonby of Shulbrede, L.

Wells-Pestell, L.

Rathcreedan, L.

White, B.

Ross of Marnock, L.

Wigoder, L.

Sainsbury, L.

NOT-CONTENTS

Ailesbury, M.

Lane-Fox, B.

Airey of Abingdon, B.

Lauderdale, E.

Ampthill, L.

Long, V.

Annan, L.

Lucas of Chilworth, L.

Auckland, L.

Lyell, L.

Avon, E.

McAlpine of Moffat, L.

Bauer, L.

McFadzean, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Bellwin, L.

Macleod of Borve, B.

Beloff, L.

Malmesbury, E.

Belstead, L.

Mancroft, L.

Bessborough, E.

Marley, L.

Broxbourne, L.

Massereene and Ferrard, V.

Bruce-Gardyne, L.

Maude of Stratford-upon-

Campbell of Alloway, L.

Avon, L.

Campbell of Croy, L.

Mersey, V.

Clitheroe, L.

Mowbray and Stourton, L.

Cockfield, L.

Moyne, L.

Coleraine, L.

Northchurch, B.

Craigavon, V.

Nugent of Guildford, L.

Cullen of Ashbourne, L.

Onslow, E.

Daventry, V.

Orkney, E.

Denham, L. [Teller.]

Orr-Ewing, L.

Drumalbyn, L.

Pender, L.

Eccles, V.

Peyton of Yeovil, L.

Ellenborough, L.

Plummer of St. Marylebone,

Elliot of Harwood, B.

L.

Elton, L.

Porritt, L.

Faithfull, B.

Portland, D.

Fanshawe of Richmond, L.

Rawlinson of Ewell, L.

Forester, L.

Reigate, L.

Fraser of Kilmorack, L.

Renton, L.

Gainford, L.

St. Aldwyn, E.

Gainsborough, E.

St. Davids, V.

Gibson-Watt, L.

Sandford, L.

Glanusk, L.

Sempill, Ly.

Glasgow, E.

Skeimersdale, L.

Glenkinglas, L.

Somers, L.

Gormanston, V.

Spens, L.

Gray of Contin, L.

Strathspey, L.

Gridley, L.

Sudeley, L.

Grimston of Westbury, L.

Swansea, L.

Hailsham of Saint

Swinton, E. [Teller.]

Marylebone, L.

Terrington, L.

Halsbury, E.

Teviot, L.

Harvey of Prestbury, L.

Teynham, L.

Hawke, L.

Thorneycroft, L.

Home of the Hirsel, L.

Trenchard, V.

Ironside, L.

Trumpington, B.

Kaberry of Adel, L.

Vaizey, L.

Kilmany, L.

Vickers, B.

Kimberley, E.

Ward of Witley, V.

Kinloss, Ly.

Westbury, L.

Kitchener, E.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
5.10 p.m.
Lord Skeimersdale Lord Skeimersdale moved Amendment No. 60:
Page 39, line 33, after ("Act") insert—
("( ) section 14(6)of the Water Act 1973 (notice of proposal to erect or extend building over water authority's sewer);").
The noble Lord said: My Lords, this amendment is purely technical. It relates to one of those matters, known as the linked powers, which are outside the building regulations but which are triggered off under the present system by the deposit of building plans. One of these linked powers is Section 25 of the Public Health Act 1936, which relates to building over existing sewers. Under the present system the local authority is required by Section 14(6) of the Water Act 1973 to notify the water authority of any such proposal. The amendment is necessary to ensure that it will do so under the new certification system. I beg to move.
On Question, amendment agreed to.
Clause 38 [Approved inspectors]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 61:
Page 40, line 13, leave out paragraph (b), and insert ("(b) by the Joint Board").
The noble Lord said: My Lords, we return to the issue of a central board or a joint council. The last thing that we want to maintain is that each of the independent approved inspecting bodies is not competent to do this task, but in our view there is a need to try to marry together the experience of all of them. We are a bit unhappy about whether an individual body would be moved to discipline an individual approved inspector who was appointed wholly by the body, whereas, if the appointments were made by joint board, I think that everybody would be a little more willing, if a dereliction of duty occurred, that that dereliction should be pronounced upon.
Secondly, in the new clause in Amendment No. 70 we stress the quality and certainty of the examinations. There is great unease about the fact that in one discipline there are many finely qualified people but in the discipline of building inspection topping up is needed. Those are the points that we should like the Minister to deal with as briefly as he can. I beg to move.
Lord Broxbourne: My Lords, before my noble friend the Minister replies, may I say a word on this matter? As I understand it, we are taking a number of amendments together. The purpose of the fasciculus of amendments and new clauses which we are taking is that it adds to the administrative machinery of administering building controls other than by local authorities. The danger of it is that it adds unnecessarily to the mechanism of private control, thereby prejudicing the chances of success of such private control. That may not be a serious disadvantage in the eyes of noble Lords opposite, who are basically opposed to any system of alternative control, and indeed it may be a positive advantage—I hope that this is not a cynical observation—if they can point to the cumbrous machinery and expense as a justification for retaining the monopoly of control with the local authorities. However, those who want to see an alternative scheme of control—that is the principle of this part of the Bill, as accepted by Parliament—are

43
entitled to say that the onus rests on those who put forward the proposal to show both its necessity and its viability; and in my respectful submission that onus is not discharged.
There is of course a tendency nowadays for every problem to be met by setting up a committee, a council, a commission or a board, following the false syllogism that something must be done: this is something; let us do it. At the Committee stage a council was proposed, and now a board, no less—the Building Control Joint Board. But however grandiose the concept and nomenclature, there is still an onus on those putting the concept forward, first, to establish its necessity and, secondly, to identify its logistical structure.
So far as the logistics of this are concerned, they are far from clear in the new clause. Subsection (2) deals with membership—the members are to be appointed by the Secretary of State—but there is no guidance as to the qualities or qualifications desired or expected. It is silent also on the important question of remuneration. It seems to me that the scheme might well end up paying some people—the same people, indeed—to do work which they would be prepared to do for nothing under the Bill as unamended. Then there is the cost of office premises for the board. It is clear that it will have to have offices where people can inspect the register and for other purposes. I should like to ask noble Lords opposite what costings were in fact done before the amendments and new clauses were tabled, and what consideration was given to budgeting these schemes. At the end of the day, the taxpayer will have to pay for them.
Until and unless these questions are answered and a stronger case can be made for the advantages accruing from such a board, I would submit that the proposal is premature at the least. After all, it is much easier to set up such a board than to get rid of it if it proves to be otiose, unsatisfactory or to cost too much.
Therefore, it would surely be best to give the arrangements as promulgated in the Bill a reasonable chance to work. I hope, and I think, that they will work, but if they do not it would be very easy to add the machinery proposed in these amendments. The noble Lord on the Front Bench here, and indeed the Secretary of State, whom I have known, admired and respected since he was a pupil at the Bar, will, I am sure, review the matters objectively on their facts with an open mind and bring forward any amending legislation which may be shown to be desirable, which has so far not been shown. There certainly would be no difficulty in arranging the passage to the statute book of such a measure since, of course, they would be picking up a proposal originally emanating from the other side. But that time is not yet. There is no need for such a board at present. If this amendment is persevered with, I hope that it will be resisted.
Lord Skelmersdale: My Lords, not for the first time my noble friend Lord Broxbourne has put his finger squarely on the first point that I wanted to make. As I said in Committee, the Government do not see the need for a quango, and, make no mistake, this is exactly what is proposed, even though the noble Lord, Lord Graham of Edmonton, made some reference—at
44
least I think that it was him—in Committee, to a part-time organisation which would not have to operate continuously.
Many of the main professional institutions which we have consulted have said that they wish to become designated bodies, and they are continuing their discussions on these standards and possible grades of inspectors with a view to reaching agreement among themselves. In particular they agree the need for a common syllabus on which candidates for approval would be tested on their knowledge of the various regulations and approved documents. Our consultations with these institutions will continue, and we have no intention of doing away with the power of the Secretary of State to designate those which he considers appropriate. Even though he would still have the power to approve individual inspectors, he does not intend to do this, since it is a job far better suited to the relevant institutions.
Of the group amendments we are considering, I think I am right in saying that only Amendments Nos. 63 and 70 are in fact new, so I shall address my remarks to them. Among other things, they would set minimum periods of experience to qualify as an inspector, and require the joint board to examine candidates, not directly for approval, but for something called a "certificate of proficiency". It is not clear what purpose this certificate would serve, or indeed how it would relate to the "practising certificate" envisaged by the amendment.
In any case, the questions of the criteria and procedures for approval are being considered by the professional institutions in discussion with the department. It would make no sense to impose these arbitrary restrictions on approval before the bodies most directly concerned have completed their deliberations on, for example, the period of experience needed for approval. When agreement has been reached on these matters, they can be enforced by the simple expedient of designating only bodies which agree to comply with them.
The noble Lord, Lord Graham, by implication anyway, mentioned the subject of the unattached architects. Amendment No. 62 would require the Secretary of State to designate ARCUK for the purpose of approving architects, presumably so that the unattached architects could be approved without approaching a professional institution. However, as I told the Committee some days ago, ARCUK indicated at an early stage that it did not feel it would be possible to involve itself in this matter, which could better be dealt with by the professional bodies. We have continued to keep ARCUK informed by sending them copies of all our consultation documents, but I understand that their council's view remains that it is not a job for that organisation.
Included among the group of amendments which we are considering is Amendment No. 68, which aims to define the manner in which the proposed board would issue so-called practising certificates to inspectors who applied to them for approval. Such certificates would only be valid for one year. The board would have the power to cancel a certificate over a shorter period but no power to extend it beyond a year. I have already made reference to this this afternoon, and all I think I need say at this stage is that

45
we do not see any justification for such a complicated and bureaucratic procedure. Quite apart from our objection to the idea of the board itself, we doubt the need for approval to be subject to annual renewal but have concluded, following our discussions with the institutions, that a period of five years would be appropriate. Our draft regulations provide for this.
In other words, what the noble Lord, Lord Graham, in moving this amendment, is seeking to achieve will, I believe, be achieved by the system we have designed. Therefore a board such as is referred to will not be necessary.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister. This is a good idea, whose time has not yet come. It is quite clear from what was said by my good friend Lord Broxbourne and others that there is understanding as to what is sought to be achieved but that it is not necessary in the present circumstances. I am aware of a meeting in December at the Ministry when all the options were canvassed and there were some very strong views from a limited number of bodies which just said they would not participate, they would not take part in a joint board arrangement, they wanted to control their own affairs. Those voices were very powerful inside the Ministry and they prevailed. But, as far as we are concerned on this side of the House, we are satisfied that this matter will be kept under review.
So far as a quango or other body is concerned, no costings have been made. There are difficulties but, quite frankly, when you are dealing with an industry that has turnovers, not of millions or hundreds of millions but of thousands of millions, to inject a cost which may or may not be seen to be crucial to maintaining equity and good sense would be of very small moment indeed. But I am satisfied the matter is not yet lost. It certainly will be pursued and we will await the outcome of developments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment Nos. 62 to 66 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 67:
After Clause 40, insert the following new clause:
(" Construction manuals for dwellings.
. Building Regulations may provide that the person responsible for the construction of any new dwelling shall provide for the occupier a manual which will contain the plans of the dwelling, its basic construction method, the materials used in its load-bearing walls, the route of services providing gas, water, electricity and like facilities, and provide for the insertion of details of all structural charges and improvements, and require the deposit of a copy of the manual with the local authority in whose area the dwelling is situated.").
The noble Lord said: My Lords, this is the issue of the manual for purchasers of new houses. I simply want the Minister to consider the possibility of referring this issue to the inter-departmental committee that has been established, or was announced as having been established when the Bill to end the monopoly in conveyancing was before another place and the Government announced, as part of that exercise, that they were going to set up an inter-departmental committee to look at a range of matters relating to house purchase. I should be satisfied if the
46
Minister would indicate, without commitment, that this issue of a manual along the lines that we have indicated could at least be put on the agenda for that committee to see how far it might proceed. I beg to move the amendment.
Lord Skelmersdale: My Lords, I am satisfied that it would be good practice for house builders to give the new owner all the necessary details about the construction and running of their home. Indeed, I have said as much in Committee. But I do not think that it is a proper subject for inclusion as an extra clause in this Bill. Indeed, some such manual is to be provided by the National House Building Council. I certainly undertake to include the point of the noble Lord, Lord Graham, in any discussions, at whatever level and with whichever group of members, I can.
Lord Graham of Edmonton: My Lords, I am grateful but I hope that the Minister does not treat lightly the seriousness that the inter-departmental committee is a proper forum in which this matter could be discussed. There is a host of problems—and I do not wish him to get to his feet again—but I hope he and his colleagues will in actual fact simply draw the attention of the inter-departmental committee to the debate on these matters in this House and another House and ask that they be seriously considered. They are considered important by a lot of people outside this House. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 68 to 72 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 73:
After Clause 46, insert the following new clause:
("Information, reports and returns.
. Where an initial notice or a public body's notice has continued in force for any period, the local authority by whom it was accepted may require the approved inspector or public body by whom it was given to furnish them with any information which—

(a) they would have obtained themselves if during that period their function of enforcing building regulations had continued to be exercisable in relation to the work specified in the notice; and

(b) they require for the purpose of performing their duty under section 230 of the Local Government Act 1972 (reports and returns);

and that section shall have effect as if during that period that function had continued to be so exercisable.").

The noble Lord said: My Lords, this amendment is a consequential one arising from the creation of a new class of building inspector. Under the arrangements that currently exist, local authorities supply certain information about housing starts and completions to the department. This amendment does nothing more than to make sure that under the approved inspector's scheme this informantion continues to go through to the department. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 74 and 75 not moved.]
Clause 49 [Power of certain public bodies to relax requirements of building regulations for their own works]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 76:
Page 51, line 9, after ("In") insert ("subsection (1) of).
The noble Lord said: My Lords, I beg to move Amendment No. 76 and to speak also to Amendment No. 77.
Amendment No. 77: Page 51. line 11, leave out from first ("in") to end of line 13 and insert ("the first and second places where they occur, there shall be inserted the words "or other body", for the words "application is" there shall be substituted the words "direction is proposed to be" and for the words "before publication of the notice" there shall be substituted the words "where the direction is proposed to be made on an application".
(2A) In subsections (2) and (5) of that section after the words "local authority", in each place where they occur, there shall be inserted the words "or other body" and in subsection (3) of that section for the words "application is" there shall be substituted the words "direction proposed to be".").
The amendments are meaning drafting corrections to subsection 49, subsection (2), which in itself amends Section 8 of the Public Health Act 1961 which requires the advertisement of proposals to relax the building regulations. They are necessary in order to ensure that the requirement to advertise will operate effectively when public bodies exempted from the procedures under Clause 48 themselves propose to relax regulations under Clause 49. I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 77:
[Printed above. ]
On Question, amendment agreed to.
Clause 50 [Approval of documents for purposes of building regulations]:
Lord Graham of Edmonton Lord Graham of Edmonton had given notice of his intention to move Amendment No. 78:
Page 51, line 26. leave out ("or a body designated by him").
The noble Lord said: My Lords, I rise simply to say that it is not proposed to move Amendments Nos. 78 to 86, which are related amendments.
[Amendments Nos. 78 to 86 not moved.]
Clause 52 [Certificates of compliance with building regulations]:
5.31 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 87:
Page 53, line 33, leave out ("subsections") and insert ("subsection").
The noble Lord said: My Lords, Amendments Nos. 87 and 88 are technical corrections to the drafting of the Bill.
Amendment No. 88: Page 54, line 2, at end insert—
("(2A) After that subsection there shall be inserted the following subsection").
They merely split what is now Clause 52(2) into two separate subsections, which I hope will make the Bill easier to read. I beg to move.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 88:
[Printed above.]
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin had given notice of his intention to move Amendment No. 89:
Before Clause 54, insert the following new clause:
Charges by local authorities for performing functions relating to building regulations.
(". Building regulations may authorise local authorities, subject to and in accordance with the regulations, to fix by means of schemes and to recover such charges for or in connection with the performance of functions of theirs relating to building regulations as they may determine in accordance with principles prescribed by the regulations.")
Lord Graham of Edmonton: My Lords, this amendment is to be moved by the noble Lord, Lord Bellwin.
Lord Skelmersdale: My Lords, the noble Lord rose to his feet so smartly that I was not quite able to rise quickly enough. I am afraid that this amendment will take rather longer to describe than have previous amendments. What I have to say relates to Amendments Nos. 89, 91, 92, 93 and 155.
Amendment No. 91: Clause 61, page 57, line 33, leave out ("and 53(2)") and insert ("53(2) and (Charges by local authorities for performing functions relating to building regulations)")
Amendment No. 92: Page 57, line 37, leave out from first ("the") to end of line 38 and insert ("repeals of section 67 of the Public Health Act 1936 and section 62(3) of the said Act of 1974")>
Amendment No. 93: Page 58, line 2, at end insert ("; and different days may be so appointed for different provisions or for different purposes")
Amendment No. 155: Schedule 12, page 98, line 4, column 3, at end insert— ("Section 62(3).")
The introduction of private sector competition into the building control system will create a completely new situation in that there has previously been no alternative to control by the local authorities. As I have said several times, we mean the alternatives to be genuine options affording the developer a choice between two systems, each of which is paid for by the people who use it. without subsidy from the generality of ratepayers and taxpayers.
Under the present system, the Secretary of State prescribes fees in relation to the total costs of building control in all the local authorities in England and Wales. As the volume of work and the mix of building varies from one authority to another, the fees produce, for individual authorities, different proportions of their costs. It is not only more equitable to let authorities set their own fees and present a true picture of the cost of service in their own districts; it will also be a valuable spur to efficiency within local authorities. They will not be able, as they now do, to assume that any short-fall in income can be thrown into the balance for the calculation of the rate support grant settlement. Also among the benefits that I foresee is an enhancement of the professional status of building inspectors in line with the extra professional-ism that the new system of building regulations will require.
The underlying principles which we have in mind at present to prescribe for local authority schemes of fees are as follows. The charges will be related to some characteristic of the work controlled, such as the type of building or its size, or the cost of its construction; the revenue to be raised shall be neither more nor less than the cost of performing the function of control; and the revenue raised from the control of dwellings

49
shall neither subsidise, nor be subsidised by, functions relating to other work. These are broadly similar to the principles which underlie the arrangements regarding, for example, setting water charges locally under the Water Act.
Amendments Nos. 91, 92 and 155 provide that the new clause (dealing with charges by local authorities for performing functions relating to building regulations) shall be brought into effect by commencement order. The new system of control will be allowed time to settle down, and there will be full consultation on the details of the arrangements before the fees system is changed, so that local authorities may make a reasonable estimate of their costs in the first year of operation. When the new fees schemes are brought in, Section 62(3) of the Health and Safety at Work etc. Act 1974, under which the Secretary of State prescribes fees, will be repealed.
Amendment No. 92 also incorporates another technical correction. Clause 54 repeals a number of unwanted provisions of the Health and Safety at Work etc. Act 1974, and in consequence of one of these part of Section 69 of the 1974 Act is repealed. At present the Bill unnecessarily provides for a commencement order for this consequential repeal. The amendment allows it to take effect with the rest of the Bill.
Amendment No. 93 will enable those provisions of the Bill which require commencement orders for their coming into effect—that is, those in Clause 61(2)(a). (b) and (c)—to be brought into effect on different dates. I beg to move.
Lord Graham of Edmonton: My Lords, the purpose of this series of amendments is to take very careful account of the disparity which would exist between the estimates of the cost of the new system compared with the cost of the old system. The Minister and his advisers are well aware that attempts by a range of bodies with experience to calculate the cost in future have produced estimates ranging from twice to three times or four times the cost of the present service. So let us make no mistake about it: the ministry and those who are concerned are very sensitive about the fact that the new system will cost more, and the Government have sought to diminish that charge by increasing the cost of the public service. It is as simple as that. What the Government are about is avoiding too much embarrassment in the future, while at the same time moving towards a concept—which, I say to the Minister, I accept they indicated some time previously—in which these are the kind of services which eventually will have to pay their way.
The Minister used some effective phrases to illustrate his argument. He said that when they finally see the light of day, the charges will be related to a system which will be designed to produce no more and no less a sum of money than is necessary for the service to pay its way. Of course, we must always be very careful about figures, but according to figures I have, in the year 1982–83 the amount received from building control fees was £36 million, as against a cost of £61 million.
One of the objectives is substantially to increase the cost to the public, and I realise that in this instance the public are a disparate range of individuals and
50
organisations. Last year, ending December 1983, building control fees were increased but by only 7 per cent. Will the Minister confirm that whether it be in one stage or two stages, the cost of the public service in future is likely to be increased by 20, 25, or maybe 50 per cent. above the present figures? If that is the case, why does not the Minister take this opportunity to say so?'
The Minister believes that there will be an attempt to encourage authorities to become more efficient, and if that is the case we shall see inequality in the charges made as between one authority and another. The Minister will be aware that Amendment No. 65 (which I did not move so that I could concentrate on this amendment) sought to have a range of charges prescribed. Quite frankly, I think it would be reprehensible if charges for building control services were to vary from one authority to another, with a great range of different figures.
We believe that the purpose of this amendment, this new attempt by the Government to impose an increase in costs to the public, is—I repeat and underline—to avoid embarrassment in the near future over disparate charges, if the scheme ever sees the light of day. We believe that it will further undermine the quality of the local authority building control service, and I suspect that that would not cause the Government too much loss of sleep, since it is quite clear that once the Bill becomes law, the Government will be determined to try to show the new system in as good a light as possible. The local authority will be left to maintain as big a staff as it can in order to try to deal with the possibility of work in which it has not been involved being referred to it. All told, we believe that this is a very bad series of amendments. I shall delay a decision on the determination of these matters until the Minister has responded to the points 1 have raised.
Lord Skelmersdale: My Lords, I thought I was wise to take a little more trouble over this series of amendments. I should like first to make the point that responsibility to fix their own fees will not be forced upon local authorities at short notice. Amendments Nos. 92 and 93 to Clause 61 would allow the Secretary of State to set a separate commencement day for this purpose. It will be brought into effect only after there has been significant experience of the new system in operation; so authorities will have opportunities to adjust their resources to an accurate assessment of the task facing them.
The duty to prepare schemes of fees is a duty to plan sensibly. It is not an absolute requirement to cover all costs to the precise penny every year. If the number of applications to an authority was to fall to a very low level, the unit costs per case would obviously be high. But that would be a serious reflection upon the standard of service offered by that authority. If the local authority service is as good and of as much value as the Opposition say, there will be no shortage of customers. I can certainly give that assurance.
The noble Lord asked whether costs would be two times, three times or four times those of the present system. At the moment, we already have a system of partial recovery of fees for building regulations. This will enable local authorities fairly to charge the full cost of administering the regulations, and there is also

51
the provision in the Bill for approved inspectors to do so. In other words, there will be direct price competion. As to whether some local authorities will charge more than others, I suggest that this is also a spur to efficiency between the local authorities, which the noble Lord will surely agree is no bad thing.
Lord Broxbourne: My Lords, before my noble friend sits down, will he be good enough to give consideration to two related points in the proposed regulations? Can he kindly see whether it is possible to introduce some caution against any cross-subsidisation by local authorities in respect of their charges from other housing services? Secondly, can he ensure that the regulations include a notional element for insurance premium? My noble friend will, I think, appreciate that these two things are requisite if there is not to be an imbalance and possible distortion between the charges by local authorities and those in the private sector controlled scheme, to the disadvantage of the latter.
Lord Skelmersdale: My Lords, although I have only just heard for the first time the idea proposed by my noble friend, he makes a valuable point which I shall certainly consider with my advisers. Obviously, since I am being slightly "bounced" by this one, I cannot give him any such commitment at this stage.
Lord Graham of Edmonton: My Lords, the phrases that the Minister has used are again very revealing. The noble Lord says that time will be given to local authorities to adjust their resources. What he really means is to increase their charges. According to the Government, a time will come, on a date not announced, when they will bring forward this proposal. If that fact is noted and charges are increased accordingly, they say, this will be all to the good. The noble Lord also indicated that all he was doing was to give local authorities freedom to fix their own charges. But the House and others know what that freedom has meant in respect of school meals, transport and other issues. Of course—
Lord Skelmersdale: My Lords, I am sorry; I was getting side-tracked by the noble Lord's questions. But this is, in fact, Report stage. I have moved the amendment and spoken again in winding up. A detailed speech by the noble Lord at this stage would therefore not be appropriate, perhaps.
Lord Graham of Edmonton: My Lords, I apologise. With the leave of the House, so far as I am concerned the response of the Minister has been quite unsatisfactory. The noble Lord, Lord Broxbourne, has fairly raised the possibility that cross-subsidisation could be exercised by one authority to help to keep down the costs. This is always possible. In our view, the amendment is a deliberate attempt to try to reduce what we consider will be alarm in the future when the disparity between local authority costs and the new system—the amount will be punitive because of the need for the inspector to take out insurance—is revealed as far too high. In view of that, I shall be pressing Amendment No. 89.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I am rather at a loss. I thought it was a Government amendment.
Lord Graham of Edmonton: My Lords, I apologise.
5.46 p.m.
On Question, Whether the said amendment (No. 89) shall be agreed to?
Their Lordships divided: Contents, 97; Not-Contents, 78.

DIVISION NO.3

CONTENTS

Airey of Abingdon, B.

McAlpine of Moffat, L.

Ampthill, L.

McFadzean, L.

Auckland, L.

Mackay of Clashfern, L.

Avon, E.

Macleod of Borve, B.

Bauer, L.

Mancroft, L.

Belhaven and Stenton, L.

Marley, L.

Bellwin, L.

Massereene and Ferrard, V.

Beloff, L.

Maude of Stratford-upon-

Belstead, L.

Avon, L.

Broxbourne, L.

Mersey, V.

Bruce-Gardyne, L.

Molson, L.

Campbell of Alloway, L.

Montagu of Beaulieu, L.

Campbell of Croy, L.

Mottistone, L.

Cockfield, L.

Moyne, L.

Coleraine, L.

Northchurch, B.

Craigavon, V.

Nugent of Guildford, L.

Cullen of Ashbourne, L.

Onslow, E.

Daventry, V.

Orkney, E.

Denham, L.

Orr-Ewing, L.

Drumalbyn, L.

Pender, L.

Eccles, V.

Peyton of Yeovil, L.

Ellenborough, L.

Plummer of St. Marylebone,

Elton, L.

L.

Faithfull, B.

Portland, D.

Fanshawe of Richmond, L.

Rawlinson of Ewell, L.

Forester, L.

Redesdale, L.

Fraser of Kilmorack, L.

Reigate, L.

Gainford, L.

Renton, L.

Gainsborough, E.

St. Aldwyn, E.

Gibson-Watt, L.

St. Davids, V.

Glanusk, L.

Sandford, L.

Glasgow, E.

Selkirk, E.

Glenkinglas, L.

Sempill, Ly.

Gray of Contin, L.

Simon of Glaisdale, L.

Gridley, L.

Skelmersdale, L.

Grimston of Westbury, L.

Somers, L.

Hailsham of Saint

Strathspey, L.

Marylebone, L.

Sudeley, L.

Hawke, L.

Swansea, L.

Home of the Hirsel, L.

Swinfen, L.

Hylton-Foster, B.

Swinton, E. [Teller.]

Kaberry of Adel, L.

Teviot, L.

Kilmany, L.

Teynham, L.

Kimberley, E.

Trefgarne, L.

Kinloss, Ly.

Trumpington, B.

Lane-Fox, B.

Vaizey, L.

Lindsey and Abingdon, E.

Vickers, B.

Long, V. [Teller.]

Ward of Witley, V.

Lucas of Chilworth, L.

Westbury, L.

Lyell, L.

Whitelaw, V.

NOT-CONTENTS

Aberdeen and Temair, M.

Bottomley, L.

Airedale, L.

Briginshaw, L.

Aylestone, L.

Brockway, L.

Beswick, L.

Brooks of Tremorfa, L.

Birk, B.

Bruce of Donington, L.

Bishopston, L.

Caradon, L.

Blyton, L.

Carmichael of Kelvingrove, L.

Boston of Faversham, L.

Collison, L.

53

Darling of Hillsborough, L.

McIntosh of Haringey, L.

David, B. [Teller.]

Mackie of Benshie, L.

Dean of Beswick, L.

McNair, L.

Denington, B.

Milner of Leeds, L.

Diamond, L.

Molloy, L.

Donaldson of Kingsbridge, L.

Mulley, L.

Donnet of Balgay, L.

Northfield, L.

Ennals, L.

Ogmore, L.

Ewart-Biggs, B.

Oram, L.

Fisher of Rednal, B.

Pitt of Hampstead, L.

Gaitskell, B.

Ponsonby of Shulbrede, L.

Gallacher, L.

[Teller.]

George-Brown, L.

Rea, L.

Gladwyn, L.

Ross of Marnock, L.

Graham of Edmonton, L.

Sainsbury, L.

Grimond, L.

Seear, B.

Hale, L.

Serota, B.

Hampton, L.

Stallard, L.

Hanworth, V.

Stedman, B.

Houghton of Sowerby, L.

Stoddart of Swindon, L.

Howie of Troon, L.

Stone, L.

Jacques, L.

Strabolgi, L.

Jeger, B.

Taylor of Blackburn, L.

Jenkins of Putney, L.

Taylor of Mansfield, L.

John-Mackie, L.

Tordoff, L.

Kaldor, L.

Underhill, L.

Kennet, L.

Wallace of Coslany, L.

Kilmarnock, L.

Walston, L.

Leatherland, L.

Wells-Pestell, L.

Llewelyn-Davies of Hastoe, B.

White, B.

Lloyd of Kilgerran, L.

Wigoder, L.

Lockwood, B.

On Question, Motion agreed to.

Resolved in the affirmative, and amendment agreed to accordingly.
5.54 p.m.
Clause 54 [Amendments of enactments relating to building regulations]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 90:
Page 56, line 8, leave out ("provision") and insert ("provisions").
The noble Lord said: My Lords, this is merely a drafting correction. I beg to move.
Clause 61 [Short title, commencement and extent]:
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 91, 92 and 93:
[Printed earlier: col. 48. ]
The noble Lord said: My Lords, on behalf of my noble friend Lord Bellwin, I beg to move Amendments Nos. 91, 92 and 93 en bloc. I have already spoken to them with Amendment No. 89.
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 94:
Page 58, line 2, at end insert—
("(2A) The following provisions of this Act shall come into effect on such day after their consolidation with the 1980 Act as the Secretary' of State may by order made by statutory instrument appoint—

sections 1 to 12;

sections 24 to 29;

section 33;

section 35; and

Schedules 1 and 2.")

The noble and learned Lord said: My Lords, with your Lordships' permission, I beg to move Amendment No. 94 and to speak also to Amendment No. 95 which is consequential upon it:
Amendment No. 95: Page 58, line 3, leave out ("subsection (2)") and insert ("subsections (2) and (2A)").
The amendment is concerned with consolidation, which has been discussed on several occasions during the course of this Bill. Part I of the Bill proceeds by amending the 1980 Act and it proceeds practically entirely—entirely so far as this amendment is concerned—by way of textual amendments. What the amendment which I am moving before your Lordships proposes is a measure of consolidation before those provisions in the Bill come into effect.
I tabled a slightly wider amendment during the Committee stage, but it came on very late at night when discussion necessarily had to be curtailed. Therefore, with the consent of the noble Lords who supported me and with the approbation of the noble Lord who asked to add his name to the amendment, I put it down in a more restricted form. Moreover, the issues are now much more restricted and defined. It is not now claimed, I think, by anybody in the Government that the Bill as it stands is comprehensible to laymen. It is not claimed that it is comprehensible, other than with great difficulty, to lawyers, if it goes out in its present form. Lawyers can only comprehend it with enormous and lengthy application and at consequent enormous expense to their clients. Moreover, it is not claimed that the Bill, if it goes out in its present form, is other than misleading in a number of respects.
Your Lordships have seen on several occasions—and we passed over several other occasions—that in the amendments that the Bill makes to the 1980 Act and which will then be part of the 1984 Act, it repeatedly uses the phrase, "this Act", meaning, "that Act"—in other words, the 1980 Act. Your Lordships might like to look at another example at Page 64 of the Bill. We have not come to it yet in the amendments on Report.
It is the new Schedule 2 which is misleadingly sub-headed "Schedule 1A", which is the title it will have when it goes into the 1980 Act. That starts:
"Determination of relevant period for the purposes of Sections 1(3) and 7(1)".
This Bill has a Clause 1(3). So in due course when it passes into law it will have a Section 1(3). It has a Clause 7(1), which in due course will be Section 7(1). But it does not refer to those sections in the 1984 Act, as it will be. What it refers to is those sections in quite another Act of Parliament—namely, the one which is amended, the 1980 Act. So I think it is agreed that, if the Bill passes into law in its present form and nothing is done about it, in so far as it is comprehensible at all it will be entirely misleading.
I believe that it is also common ground that, though nothing can now be done to make this Bill simple and perspicuous, something must be done to enable the Bill, when it passes into law. and the Act to be read as one document. So the issue is very narrow now. It comes down to two questions. First, is there any real argument against consolidation as the means of putting these two documents together; and, secondly, is there any acceptable alternative?
I should like to make four preliminary points. On a number of occasions we have smiled at the absurdities which are produced in letting this Bill pass into law

55
without consolidation. But it is quite a serious constitutional issue. Your Lordships are asked to pass into law a legislative instrument which is not comprehensible. The Bill begins, and as an Act of Parliament it will say:
"Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal … and by the authority of the same".
How can that claim be made when such lawyers in your Lordships' House as the noble Earl, Lord Selkirk, the noble Lord. Lord Molson, and the noble Lord. Lord Broxbourne—all expert in this branch of the law as well as its administration—have said that the Bill is virtually incomprehensible?
However, it is not only your Lordships who are asked to make that pretension. After all. the other great principle of our constitution is the rule of law. This particular piece of legislation affects some of the humblest of our fellow citizens. We are sending out for their consideration and to govern them—and saying, as the law says, that ignorance of the law is no excuse—a document which is admittedly incomprehensible to them, which as it stands cannot be explained to them by the Citizens Advice Bureau because they will not understand it, and which can only with the very greatest difficulty, and at vast expense of time and trouble, be explained to them by lawyers at the expense of the citizens. So in the end it is agreed that at least these documents must be put together. That is the first preliminary point that I desire to put before your Lordships: that, on proper examination, it is unconstitutional to promulgate a Bill—without making any provision for its consolidation, which is the very minimum—in a form which is incomprehensible to most of the people affected.
The second point is this. I fear that the noble Lord the Minister, whom we have admired so much in his conduct of the Bill, through no fault of his own comes to this issue somewhat prejudiced; because last Session his department—and the noble Baroness, Lady Birk, will bear me out on this—produced a Bill, the National Heritage Bill, which aroused howls of execration in all parts of the House—with the noble Baroness nobly leading us. She will correct me if my recollection is wrong, but such was the indignation that we were summoned to a meeting with Ministers. I certainly was left with the firm impression that, though it might have been inadvisable to try to consolidate the Bill last Session—which would have been technically possible—as it went through Parliament because it was a very' complicated measure and it would have meant hurrying the draftsman, it would at least be consolidated this Session. But it is not in this Session's consolidation programme. Therefore I fear that the Minister, through no fault of his own, arrives somewhat prejudiced in this issue.
The third point that I want to make by way of preliminary is that when one has arrived at my age, one tends to view situations with a sense of déjà vu. Since we started examining this issue, I have felt that I was back in the late 1940s and early 1950s, when one had a bureaucracy with quite excessive pretensions. In particular, it was characterised by a refusal to admit error, and in fact a resentment against anybody who questioned the official processes. That particular boil
56
burst at Crichel Down. We lost a popular and very able Minister who insisted on resignation because he felt that it was his duty to take the blame for what had been done by officials in his department. The junior Ministers offered their resignations, and quite properly they were refused. When one finds, as I hope your Lordships find, insubstantial reasons being put forward against a reasonable proposal and palliatives offered where remedies are required, we are back in that bad atmosphere.
Why. then, should it be resisted? The reason, I submit to your Lordships, is this. This Bill cries out for consolidation. Nobody can read Part I without seeing that it ought to be fitted in and read with the principal Act of 1980; but that has been apparent since 1982, when the first version of this Bill was introduced before Parliament. Obviously nothing was done then; nothing was done until very recently, when the noble Lord the Minister wrote to me saying:
"In view of your concern, we have approached the Statutory Publications Office".
My concern is neither here nor there. What is of concern is that from its first sighting the Bill cried out for consolidation, or at least some action, and none was taken until a very late stage. Obviously, there is a fear that if anything were done now it might be said—it would not be said by me—"Why was some action not taken in 1982?" If it had been taken then, of course, consolidation could have been fitted into this Session's programme.
The fourth preliminary issue I thought I should mention was a suggestion made by the noble Lord, Lord Boyd-Carpenter, that rather than consolidation the Minister might consider a Keeling schedule. He explained to your Lordships what a Keeling schedule was: that where you have one simple Act amended by another simple Act, or any legislative instrument, it is often very convenient to print the first as a schedule to the second, with printing indications of the changes made. If my recollection is right, the parts which are omitted by amendment are printed in italics in square brackets; the new parts in bold. That is, of course, perfectly acceptable as an alternative to consolidation if, as I have said, you have two simple Bills.
We all know why we have this Bill in this form. It is to suit the convenience of government business managers—and I am glad to see there is one business manager on each Front Bench. If the Bill is presented in this form, it is only the amendments which can be debated: the main provisions which are sought to be amended—and particularly those which are unamended—cannot be redebated. From the government business managers' point of view, a Keeling schedule is open to the same objection as the form that this Bill should have taken—would in the old days always have taken—namely, a Bill to consolidate and amend. In any case it is. I apprehend, too late, even if it were acceptable now, to deal with the matter by Keeling schedule. The Bill would have to be recommitted, I apprehend, and much time would be lost; far more time than by any possible computation of consolidation.
I turn to the arguments which have been put forward so far. and I collect them from the speech which was made in Committee by the noble Lord, Lord Skelmersdale; from a letter from the Minister,

57
for which I am very grateful; and from a statement he made on an earlier amendment on the first day on Report. I have grouped all those arguments. One can deal with the first of them very shortly. It is that parts of the Bill are not suitable for consolidation with the 1980 Act. I said at the time that I did not think there was anything in that, and that the normal processes of consolidation would take care of it; but in order to save time and argument today I have omitted from my amendment seeking consolidation all except the textual amendments in Part 1. so that amendment and consolidation would simply be a matter of scissors and paste, which, as I shall suggest to your Lordships in a moment, must already have been done.
The second argument—that consolidation would cause delay—was put in two forms: first, that the passage of this Bill was urgently required; and, secondly, that the consolidation of this Bill would delay a more comprehensive consolidation which was put in hand in 1982, which is still going on, and as to which no term can be foreseen. May I say right away that I would regard it as quite inappropriate to move from these Cross-Benches a dilatory Motion. If I thought there was anything in those arguments, I would not be submitting this amendment to your Lordships.
May I deal firstly with the urgent need for the passage of this Bill? The first thing to be mentioned is that the noble Lord the Minister said he requires the new provisions as to building controls soon. He will get them. They are not affected at all by this amendment. He will get them exactly as the Bill requires them to be provided; namely, two months after Royal Assent.
The second thing is this. So far as textual amendments are concerned, as I have suggested to your Lordships it is merely a matter of scissors and paste. I should be highly surprised if the draftsman had not done it already. He has given every sign of doing very accurately what he was obviously told to do; namely, to draft this bill in such a way that the main provisions of the 1980 Act, unamended, could not be debated—and noble Lords who have been through the Committee and Report stages will have respected his cleverness in improving Clause 5, in respect of which the drafting was criticised. As I say, I do not doubt for a moment that he has done the job already. He could hardly present a Bill like this without having done the job. Even if he has not, it would take only, at most, 48 hours, I should have thought. So the real question is not whether the draftsman can do the best job—because your Lordships will remember that we were offered as an alternative a recast, unofficial, unstatutory consolidation, in effect, an unofficial, unlegislative, Keeling schedule in the Statutes in Force.
The editorial board of Statutes in Force have got no draftsmen at all. If they are going to do the job that is held out they will have to rely upon the noble Lord's draftsman, and if they are going to rely on him for that, why should not his efforts be produced in a draft to the Consolidation Committee? Everything comes down to the Consolidation Committee, to which it appears that when the noble Lord the Minister first wrote to me there had been no approach at all. Instead, to save
58
face, everybody rushed off to the editor of Statutes in Force.
The Consolidation Committee has a very full programme this Session. That is no fault of theirs. They were appointed very late in the Session so that they could not start work until January, which is intolerable. But their programme only goes up to the Summer Recess. There is an important Bill that they have to consider towards the end of that period, that dealing with Capital Transfer Tax. It is important that that should be consolidated; but, after all, that legislation is directed to specialists, it is ready by accountants and tax lawyers. Much as that legislation needs consolidation, it has not got the urgency of this sort of legislation which affects the lives of ordinary, humble fellow subjects of ours. So I suggest that that Capital Transfer Tax Bill could easily be moved over into the spill-over session and in its place, this Act of Parliament (as it will be), taken, and that no time would be lost at all.
As for the second part of that argument, that the passage of comprehensive consolidation will be delayed, as I have said, that seems to be going very slowly, anyhow. No term can be put on it and the argument, in any case, depends on the validity of the fact that this consolidation would take, in respect of the limited part of this Bill, some weeks or some months, I think it is said.
The third argument is that there are acceptable alternatives to consolidation and those are put as two-fold. In the first place, the Minister said that the department would be sending out brochures. It was not pretended that the Bill was comprehensible, but apparently the brochure will be—although I fear that this particular Ministry has not got a great reputation for handing out drafts of the purest English from the well of English undefiled. But they arc able to put out a brochure which explains the Bill in a form which is at least understandable by the Citizens' Advice Bureaux. One immediately asks, if that can be done, does this Bill really have to be in such complex, opaque and impenetrable terms? In any case, we live by the rule of law and not by the rule of bureaucratic brochure. It is no acceptable alternative.
The second alternative that was offered was the special publication hurried on in Statutes in Force. 1 fear that that is based upon a complete misapprehension as to what Statutes in Force are and do. I mentioned the matter in Committee quite shortly, but I thought that I ought to check with my noble and learned friend Lord Scarman, who is chairman of the editorial board of Statutes in Force. He wrote to me as follows:
"I have undertaken a post-mortem into the matter of Statutes in Force and consolidation.
"I am afraid that Lord Skelmersdale must have misunderstood the position. The true situation is the following. We get a new statute into the edition by inclusion within three months of Royal Assent. We are aiming at the moment to reduce this interval to two months and we are having considerable success.
"If the new Act is an amendment of an existing Act, and goes about the business of amendment by a series of textual amendments, then, I fear, a problem arises. What go into the cumulative supplement are the amendments. Nothing is done at that stage to produce the Act which has been amended together with the new textual amendments, so that the reader may have in front of him the Act as amended.
'What happens in this situation is this. We enquire of the Law Commission whether a consolidation is proposed"—
and then he says what he does there; he holds off the reprint. The letter continues:
"If there is no consolidation proposed then the reissue of Act, as amended, has to take its place in the queue of reissues. This may involve a delay of two or three years".
When I looked at the Housing Act 1974, I found that it had been unamended as late as 1979. The editorial board of Statutes in Force have only an editorial function. Consolidation is the work of the Law Commission and Parliament. It is no part of their function.
So there it is. In the view of the chairman of the editorial board of Statutes in Force, publication there is likely to be delayed and is, in any case, no alternative to consolidation. I had never heard it suggested until the matter was raised on this Bill that it was so. That was certainly never the view of the Statute Law Committee. When I was a member of that Committee I certainly did all that I could to prosecute the completion of Statutes in Force, as did the noble Lord. Lord Renton, who was then the Commons representa-tive on it. But nobody thought of it as an alternative to consolidation, and neither did the Renton Committee. They mentioned Statutes in Force. They wanted to see its completion, but they did not envisage it as an alternative to consolidation. On the contrary, they wrote a long and convincing chapter on consolidation quite separately. Nor did my noble and learned friend Lord Elwyn-Jones envisage it in the debate on the Renton Report. He said that he would do all he could to foster consolidation. He never suggested that Statutes in Force was an alternative; nor did my noble and learned friend who sits on the Woolsack say that when we subsequently debated the matter.
There is another objection. Statutes in Force is very useful for those who have the labour to manage the posting of the parts, but their circulation is comparatively limited. The noble Lord was quite mistaken in thinking that it is a common tool of practitioners. On the contrary, most counsel use the Law Reports, which have an annual volume of statutes. Most solicitors, I think use Halsbury's Statutes, which, with their annual volumes, have a commentary. So far as I know, practitioners do not use Statutes in Force, and to say that the practitioners will be satisfied by an addition to Statutes in Force is quite misplaced.
Those are the arguments which have so far been put forward. The noble Lord. Lord Renton. will be replying to the debate and no doubt he will deal with any fresh arguments that are put forward; but at this stage, considering these arguments, your Lordships may call to mind the story of the medieval king arriving at the gates of a city in hostile territory and demanding angrily and peremptorily on pain of death the surrender of the keys. In due course the mayor and corporation came out clad only in their shirts and with ropes round their necks, but carrying a long petition which contained 100 reasons why they should not surrender the keys and why they should be excused. As the first of the reasons was that they had lost the keys, the king graciously dispensed with the other 99 reasons. Your Lordships may well feel that if one solid argument can be put forward against this amendment you will graciously dispense with all those that have
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been put forward so far. In the meantime, I beg to move.
6.32 p.m.
Lord Bellwin: My Lords. I have no keys and I have no 100 reasons: I have just a few reasons which I should like to submit to your Lordships. They are as follows. I have already made clear both in this House and in correspondence with the noble and learned Lord the Government's attitude towards consolidation. The Government fully accept the need for consolidation of the housing legislation. The last exercise indeed was in 1957. Under the aegis of the Law Commission, the parliamentary draftsman has been working full time on this consolidation since late 1982. He is also being assisted by the former solicitor and legal adviser to my department, who has a vast amount of experience in housing legislation and who is advising on the various policy decisions in the department. He is also acting as a point of liaison between the department and the Law Commission as the work proceeds.
The task is a vast one, as I am sure your Lordships will appreciate, and it will be some time yet before a draft Bill can be published. I hope that the noble and learned Lord will agree that this is a task to which priority should be given and that it demonstrates the present Government's commitment to housing legislation consolidation. The noble and learned Lord is arguing that, regardless of the general consolidation, certain parts of this Bill should be consolidated with parts of the 1980 Act before it comes into force. I most certainly respect the noble and learned Lord's point of view and his motives in moving the amendment. He is properly concerned that the text of amendments of previous statutes makes the legislation extremely difficult to understand unless it is immediately followed by consolidation.
I sympathise with this view, not least as one who has to be briefed and as one who has to speak day in and day out to Government amendments to Bills which are at first sight not easy to follow. We can all agree that for those who read the statutes themselves (and I suspect they are fewer than the noble and learned Lord implies) early consolidation of amending legislation with the parent Act is highly desirable. Your Lordships may, however, also agree that there are many things in this life, and certainly in the world of politics, which are desirable but which can be done only at unreason-able cost or at the expense of pushing out something else, which is then given a lower priority.
That is exactly the problem posed by the noble and learned Lord's amendment. He has suggested that the kind of consolidation he is proposing could be done quite quickly and certainly much more quickly than I have indicated. I can assure your Lordships that I have been into the question with great thoroughness and I am satisfied that we have made the most realistic estimates of what is possible if the noble and learned Lord's wishes were to be met.
The first essential stage, of course, is that this Bill has to receive Royal Assent. There has yet to be a Third Reading in the House and the Bill must then return to the other place for their consideration of your Lordships' amendments. Thereafter it may be possible—who knows?—for messages to be exchanged

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between the two Houses. Bearing in mind some of the debates that we have had, the prospects of the Bill completing all its remaining stages before the Easter Recess are by no means certain. As your Lordships know, the timing of Royal Assent is not in the Government's hands.
Let us suppose, looking at the possible timetable, that it may be achieved at the end of April or shortly thereafter. Our best estimate is that it would take some three months to prepare a text of the right to buy and the tenants' charter provisions of this Bill, consolidated with those of the parent Act. This includes the necessary checking with the department and with others who have an interest. It also includes the shared ownership and Schedule 11 provisions, to which in fact the noble and learned Lord's amendment does not specifically refer. The various transitional provisions would need particular care in drafting because they are not textual amendments of the 1980 Act, but free-standing provisions. In saying, "three months", I should emphasise that I speak of a proper consolidation of this Bill and the relevant parts of the 1980 Act.
The noble and learned Lord has said that his amendment is not seeking a full consolidation but only the amended text of the sections that he has specified. In other words, as he said, this a scissors and paste job. May I quote from paragraphs 14 and 15 of the report of the Renton Commission?—
"It is wide of the mark to suppose that consolidation can be carried out by any competent lawyer with the aid of scissors and paste. It is highly skilled work".
Three months from an hypothetical date for Royal Assent at the beginning of May takes us to July or early August. As your Lordships know, a draft consoli-dation Bill has to be presented by the Law Commission and then come before the Joint Committee on Consolidation of Enactments, chaired by the noble and learned Lord, Lord Brightman. I cannot speak for that committee and would not purport to do so. I know that they already have a full programme of consolidation Bills to consider for the current Session, including four separate Bills consolidating all company enactments, which are doubtless being eagerly awaited by practitioners in the field.
The joint committee has the task of examining consolidation measures to ensure that they do not unintentionally make substantive changes in the law they are consolidating, and to make sure that they are not themselves defective. The committee calls witnesses, including the draftsman, and then draws up its report to both Houses. Although there is an accelerated and largely formal procedure for consolidation Bills which have been recommended by the joint committee, it is open to Members to raise points if they are dissatisfied with any aspect of a consolidation Bill.
I hope that I have explained sufficiently—without trespassing too much into the operations of the Law Commission and the joint committee, for which I am not responsible, as equally they arc not responsible for what I am saying now—that it is not unrealistic to suppose that a consolidation of parts of this Bill with parts of the 1980 Act could pass with proper scrutiny through all the necessary stages, under the standing orders of both Houses, for it to be enacted before the
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summer recess. Moreover, the procedure would be so unusual and novel that one could not reasonably expect it to go through on the nod. One would have to expect those concerned to want to take a closer look than usual at it.
As the noble and learned Lord knows from earlier debates and from the letters that I have sent to him, we have done our very best to meet his concern to have the textual amendments which the Bill makes to the 1980 Act incorporated into a clean printed copy which is authoritative and made available to the public by the editor of Statutes in Force so as to expedite publication of the housing supplement with the revised text of the 1980 Act. He has already offered to produce it within four months of receiving the Queen's printer's copy of the Act after Royal Assent. As a result of further discussion between my noble and learned friend the Lord Chancellor, my noble friend the Lord President of the Council and the noble and learned Lord himself this very afternoon, I can undertake, despite the reservations which I heard the noble and learned Lord make about Statutes in Force (certainly I do not claim this as an alternative to consolidation) that the editor of Statutes in Force, with every assistance from my department, will do his utmost to issue the revised text giving effect to what the noble and learned Lord is asking for within two months. I know that this is certainly not entirely to the satisfaction of the noble and learned Lord, but I hope—
Lord Simon of Glaisdale: My Lords, did the noble Lord say two months?
Lord Bellwin: Yes, within two months. I know that this is not entirely to the noble and learned Lord's satisfaction, but I hope he will agree that it will be of assistance to those who need to study the text of the Act and that it represents a very significant improvement.
May I also say that the noble and learned Lord's amendment raises wider constitutional issues and issues on the procedure of consolidation and that my noble and learned friend the Lord Chancellor is prepared to intervene, should this be desired.
Throughout the various stages of the Bill I have been very grateful for the attendance and interventions of the noble and learned Lord—always helpful, always concerned. In turn, I have tried very hard to meet the many points that he has raised, while recognising all along that on consolidation we were coming to a point where there would be a path down which I could not go, although it is one which the noble and learned Lord wishes us to follow. Nevertheless, I was very much encouraged when the noble and learned Lord said earlier that this is not in any way a dilatory motion. I accept without question that it is not his intention in any way to delay the Bill. From the many things which he has said and done throughout the passage of the Bill I know that the noble and learned Lord means that. I hope the noble and learned Lord will accept from me that, if perfection it is not, the intention certainly is to proceed apace with consolidation, and that all his interventions have had quite an effect upon that intention. In the light of what I have said, I hope that the noble and learned Lord may feel able not to pursue the amendment.
Lord Renton: My Lords, before my noble friend sits down, may I ask him to clarify one point. At the Committee stage my noble friend Lord Skelmersdale said that a new cumulative supplement, setting out the whole of this Act with the previous legislation, could be produced within four months of receiving the Queen's printer's copy. If I understood and heard correctly my noble friend Lord Bellwin, he said that, having consulted the editor, it would be possible to do that within two months. Can my noble friend say within two months of when?
Lord Bellwin: My Lords, the point is what it is that we would produce in four months and what it is that would be produced within two months. If I may repeat what I said on what could be produced within two months, we have offered to produce, within four months of receiving it, the Queen's printer's copy of the Act, after Royal Assent. However, what we have offered to produce within two months is the paper by the editor of Statutes in Force. He will expedite the publication of the housing supplement with the revised text. This is not the same as the cumulative supplement which my noble friend Lord Renton mentioned. Possibly, therefore, we are not referring to the same document. However, I am sure my noble friend will agree that there is a tremendous wish to produce it as quickly as we can.
Lord Peyton of Yeovil: My Lords, after the formidable speech made by the noble and learned Lord, Lord Simon of Glaisdale. there is no need for me to say very much. However. I should like to say that both he and the noble Lord the Minister have perhaps underrated the enormous task which will confront those who have the duty to consolidate these measures. Their very incomprehensibility will add to the burden. I welcomed with some surprise, I must say, the very forthcoming speech made by the noble Lord on the Front Bench. There is one phrase in it which, perhaps unfairly, I should like to single out for notice. At one stage the noble Lord referred to Bills which at first sight are not easy to follow. That seemed to me to be such a classic of euphemism that it ought to be picked out and given special mention. I very much hope that the noble Lord has not too greatly overestimated the ease with which this difficult task will be performed; but I hope that it will be performed quickly, for the need is great.
The Earl of Selkirk: My Lords, did the noble Lord say that the consolidation could be submitted to the joint committee in December of this year? If that is the case, may I say that the joint committee works very quickly and would not take very long to complete its work. Was that not what the noble Lord said?
Lord Bellwin: No, my Lords.
The Earl of Selkirk: Then perhaps the noble Lord could tell me what he did say.
Lord Bellwin: To do that I should have to start at the beginning and go over all of it again. I did not mention December.
The Earl of Selkirk: My Lords, the noble Lord said that consolidation is desirable. I would say that it is very urgent. He described it as a vast problem. Anybody who has to interpret the law and tell his client what it means finds it to be a vast problem. To begin with, anybody who wants to act under the Bill will take a long time to prepare for it, so there is no need for immediate action. No immediate action will follow from the point of view of the clients. The point at issue is this: unlike a finance Bill or a company Bill, which are interpreted by experts, this is something which, as the noble and learned Lord has said, has to be interpreted by every single person in his own personal life. On the most personal basis they will want to know the answer to how they are to act. Can the noble Lord indicate when he believes consolidation will be available? If he cannot do so, may I ask him to say what he can about it?
The noble Lord said that he regarded it as something which can be done. Furthermore, the complication of these Bills is very unfortunate. Much damage has been done to housing by over-complicating Bills in one form or another. I shall be grateful if my noble and learned friend can give some firm indication as to when this consolidation can be done.
The Lord Chancellor: My Lords, I want to have a go rather later than this, when I shall deal with the question of consolidation from the technical point of view. I believe that my noble friend would find it more convenient to himself if I did my best—whether acceptably or not—to speak about this matter then. There is a complication which I wish to expound at rather greater length than will be possible by means of an intervention in my noble friend's question.
The Earl of Selkirk: My Lords, I am sure that the House will wait eagerly for the comments of the noble and learned Lord the Lord Chancellor of Great Britain.
6.50 p.m.
The Lord Chancellor: My Lords, that moment has come rather sooner than I expected. When people genuinely want to arrive at a solution of what is admittedly a difficult problem, they need to approach it in a fairly practical spirit. There are objections to the amendment. My noble and learned friend on the Cross-Benches made what was rightly described as a formidable speech about the Bill in its present form. The one point which he did not really expatiate upon was the virtues of the amendment itself. I do see difficulties in the amendment. Just consider what it is that the House is being asked to do if the amendment is passed.
My noble and learned friend is seeking to use the commencement provisions of this Bill as a means of forcing on a consolidation between this Bill and the Act of 1980. He says that particular provisions of this Bill will not come into force until certain machinery has been put into effect following the passing of a consolidation Act which is not yet before Parliament at all. In my opinion, that is constitutionally objectionable and it could not be supported. I do not like to think what the consolidation committee might say if for the first time in legislative history this device

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were accepted. One must go on to observe that, even if that were done, it would have to go through the entire consolidation machinery before these sections were brought into force.
I want to make an additional point in answer to my noble friend Lord Selkirk. We want to consolidate, and what is going on at the moment is consolidation not of this Bill with the Act of 1980 (which is what is envisaged in this amendment) but consolidation of the housing Acts from 1957 onwards. Although my noble and learned friend on the Cross-Benches was quite right in saying that my noble friend Lord Bellwin has said that he could not put a term on that work, which was begun in 1982, I can be a little more forthcoming than that. Consolidation of the type I am contemplating will be consolidation of the 1957 Act onwards to this Bill, if it is passed as law. We want to get that consolidation onto the Floor of Parliament by this time next year, or thereabouts. I do not feel that I can be more accurate than that, but that is a little better than my noble and learned friend on the Cross-Benches thought that my noble friend Lord Bellwin had said before.
The process of consolidating this Bill with the 1980 Act would take at least the same time—and I forgot whether it was four months or six months—as my noble friend Lord Bellwin spoke of. What is much worse, having done that, it would all have to be done over again when we reconsolidated the Acts from 1957 onwards. One would be taking two bites at the cherry if one did it in that way, and losing a lot of time in the process.
There is a straight political point which I will insert in my argument at this stage because it needs to be made plainly. The purpose of this Bill is to give certain people new rights. I quite appreciate that the Opposition Front Bench is against that in principle; that is a political argument between the two sides of the House. But it is in a sense perverse to say that you will not give those people these rights until the battle between textual amendment and legislation by reference—which is the method adopted so far in this Bill—is fought out. That would be to deprive them of their substantive rights for the sake of a doctrine about textual amendments and legislation by reference. In that connection, I agree entirely with my noble friend Lord Renton—and I am impatient to hear him speak when I sit down. I have always joined him in the battle for textual amendment as against legislation by reference. I should very much like to see that method adopted here.
Having reached that stage, what is the practical solution that I propose? Or rather, what is it that my noble friend Lord Bellwin has already proposed and which I respectfully endorse? I refer to the sacred scriptures; by which I mean, of course, the Renton Report. In paragraph 13.20 of that report, the committee recommended as follows—and I thought that my noble and learned friend on the Cross-Benches did not, perhaps, do this recommendation sufficient justice. I shall read the whole paragraph because, although I could be selective, it will be fairer to read the whole paragraph. It states:
"Having considered the problems on both sides of this question, we have concluded that the practice of using the textual method should be applied as generally as possible, and we so recommend".
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I heartily endorse that as a general principle. The paragraph continues:
"We are encouraged and pleased to hear that in fact the Parliamentary draftsman, having regard to the needs of the user of the statutes, already makes it a practice to amend legislation textually wherever convenience permits".
Then in brackets appear the words:
"(The adoption of this practice was we are told, partly prompted by the decision to publish Statutes in Force and by the Law Commission's suggestion that the draftsmen should take account of the requirement of the new edition.)"
It goes on:
"We further recommend that the Editorial Board of Statutes in Force should be encouraged to reprint without delay loose copies of Acts as amended where this would be for the convenience of the users".
My noble friend has suggested that that constructive and admirable proposal of the Renton committee should be applied in this case. I believe it to be the best way out of the situation in which we are placed.
If I may speak for a moment, I hope with courtesy, to the Opposition Front Bench, we are all of us from time to time in office, and we are all of us from time to time in opposition. But it has always been the case that consolidation, or non-consolidation, has never been used as a political weapon. The noble and learned Lord, Lord Elwyn-Jones, did not use it for that purpose, and I am not using it for that purpose, either. If one is to use consolidation as a weapon to hold up legislation by proposing the postponement of a commencement date until consolidation of a consolidating Act not yet before Parliament is actually passed, I think that that day would have come ultimately inevitably to an end.
Although I have no doubt whatever that my noble and learned friend on the Cross-Benches was perfectly sincere in saying that if he thought that this was a dilatory amendment he would not have proposed it, the effect of it is inevitably dilatory. Where legislation by reference is, for one reason or another, adopted by any Administration, it would be open for the Opposition, in that case, to propose an amendment of this sort and say "No, you shall not have your Act until the consolidation legislation is passed." That has a dilatory effect and has the inevitable result, as I see it, of bringing the consolidation process into the cockpit of party politics, and I object to it on that ground.
What does it ultimately come to? It now comes I think to this. The Statutes in Force will in fact produce a loose copy available to the user which contains the actual text of the law as it will be after this Bill is passed into law and will do so within two months of the period which my noble friend Lord Bellwin specified in his speech. That is one of the things that the Statutes in Force is for. If I may possibly trespass upon your Lordships' time to this extent, I will give my own account of what I think it is for.
The object of Statutes in Force—which was not my idea but which I have enthusiastically supported from the very moment that I heard of the project in, I believe, my first term of office—is, instead of having the statutes contained in unusable volumes (they are unusable because year by year they become out of date despite what my noble and learned friend said about the practice of practitioners using the Law Reports'

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version of each year's statute as it comes out) the whole of the statute book is now comprised in a loose leaf form so that every time a statute is passed amending the law the new loose leaves are put into the place where they belong in our consolidated statute book. Although, of course, this is an editorial function and although it is, of course, no substitute for consolidation, or we would have done it that way to the exclusion of consolidation, that is what it is for.
It is also the case—I, of course, was not the privileged recipient of a letter from the noble Lord, Lord Scarman, who is another enthusiastic supporter of the Statutes in Force—that it is the design of the Statutes in Force that if, for instance, one is only interested in ecclesiastical law or the law relating to agricultural holdings, one can get that piece separately and in loose leaf alone. That is a considerable saving of expense because the one objection to Statutes in Force is the enormous expense of subscribing to the whole.
What is suggested in this case—and I am sure it is the practical way out—is that the editorial function should be expedited to the point where the user will have a readable text within two months of the date which my noble friend suggested. That will enable this Bill to go forward without the constitutional objections which my noble and learned friend saw to the text of it as it now stands and without the constitutional objection which would, I think, be raised to the amendment as put forward by my noble and learned friend; and there is more than one objection, as I have indicated.
I agree, if I may say so, with my noble friend, Lord Peyton, who cast some doubt on what I might call the easy scissors and paste version of consolidation. Whether it is consolidation of the 1980 legislation with this, or whether it is the far more comprehensive consolidation process that I had in mind as coming into force next year, whatever the result of this piece of legislation, it is a very highly skilled task which requires parliamentary draftsmen of very high talents, and a good deal of experience as well.
Having expressed that as my own opinion, because I am very conscious that I have never indulged in the practice of parliamentary draftsmanship but once—and then the parliamentary draftsman altered every word in my draft except the Short Title which he was not entitled to touch—I can only say that this is my humble opinion for what it is worth. Having said that, I therefore urge my noble friend Lord Renton when he sums up to accept the proposal of my noble friend Lord Bellwin. founded as it is upon the constructive suggestion in his own report. I think that will get us out of our difficulty. I have been as helpful as I can.
7.7 p.m.
Lord Renton: My Lords, the noble and learned Lord, Lord Simon of Glaisdale, in moving this amendment was kind enough to warn your Lordships that he had asked me to reply to the debate and that is what I now propose to do, very briefly. I am sure that we are all deeply indebted to the noble and learned Lord, Lord Simon, for drawing attention to the need for early consolidation—and I speak generally when I
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say that—but especially when one has a complex and difficult Bill of this kind which will affect people in their homes, and indeed in their lives generally. It will affect various organisations, too.
Although I am in broad agreement with the substance of the Bill, I share the misgivings which have been expressed by the noble and learned Lord, Lord Simon, by my noble friend Lord Selkirk and by others at other stages. Indeed, it is there for all the world to see how complex and difficult this is. Having said that, I am sure that we are all grateful to my noble and learned friend the Lord Chancellor for this intervention. Indeed, I think it is an achievement on the part of the noble and learned Lord, Lord Simon of Glaisdale, to have in effect persuaded the Lord Chancellor to make the speech that he did, for so clearly expressing the Government's point of view, and for pointing out—I must say that I was conscious of this when I signed the amendment moved by the noble and learned Lord—that by suggesting consolidation before the Bill comes into force we were suggesting something that was not only unusual but unprecedented. I would not go so far, with respect to the noble and learned Lord the Lord Chancellor, as to say that it would be unconstitutional if Parliament were to accept it, but we are grateful to the noble and learned Lord.
May I comment on two matters that he particularly mentioned in his speech? First, I go along with him in saying that textual amendment is highly desirable. The fact that it has been used in the clauses chosen by the noble and learned Lord. Lord Simon, for consolidation meant that consolidation of those clauses, at any rate, would have been easier because of textual amendment. Let us be clear about that. So far as Statutes in Force is concerned, I welcome what the Lord Chancellor said referring to the report of our committee on legislation, but I would respectfully remind him that the use of Statutes in Force, although it comes sooner than consolidation, is in the net result second best, and our committee had that in mind. But having said all that, I feel that there is much more common ground between us than might have been imagined.
There are really three ways of doing what I think most of us would say should somehow be done. May I briefly mention what the options are? The first is consolidation of the whole of the Bill with what went before. We have been told, and we can but accept it, that that would take quite a long time. It probably could not conceivably be done in this Session; it would not have to be done in the next Session.
The next option is the one mentioned by the noble and learned Lord. Lord Simon of Glaisdale. The Lord Chancellor, in a slightly leg-pulling vein I think, said that this was a bit more than scissors and paste, and that consolidation always is. Indeed, it has been pointed out that in our report we said that consolidation was always more than scissors and paste. But I would remind your Lordships that the task of consolidation varies tremendously. You may have to consolidate the income tax Acts or the companies Acts. That is a mammoth task, taking years.
But then you may have quite a simple piece of consolidation, made all the easier because textual

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amendment has been used. That is the kind of consolidation which the noble and learned Lord, Lord Simon of Glaisdale, is asking your Lordships to accept. That is the second option. We may disagree, but we can but accept that even that limited type of consolidation would take some time. I would have thought that the best that we could hope for was to get it completed in the overspill part of this Session and finished in the early autumn. That would be the best that we could hope for.
I come to the third option, because we have to compare the third option with that second one. The third option is to use the next best solution, Statutes in Force, and not merely the interleaving but, as the Lord Chancellor so rightly said, the issue of a supplement specialised to the subject. (The Chief Whip need not be anxious; I shall be sitting down very soon). We were told that it would take four months from receiving the Queen's Printer's copy. Now we are told that it would be within two months of some unspecified Act; but at any rate it would be sooner, one must hope and believe, than the alternative proposed in the noble and learned Lord's amendment.
I am speaking purely for myself when I say that the difference both in time and in method between the second and the third options does not seem to me to be great enough for us to press this amendment. I would have thought that there was sufficient common ground—sufficient desire for progress in this matter—for us to express our gratitude to the noble and learned Lord, Lord Simon of Glaisdale, but to say, speaking for myself, that I could not support this amendment in the lobby; and, indeed, I do not think that it is a voting matter.
The noble and learned Lord has had the satisfaction, not only of bringing my noble and learned friend the Lord Chancellor to his feet but of pricking the consciences of the draftsmen and, I hope, the Ministers who are responsible for drafting. In the hope that consolidation will be expedited much more in the years to come, could we not leave it like that?
Lord Simon of Glaisdale: My Lords, I wish to reply in only a few sentences. With great respect, I did not agree with my noble and learned friend on the Woolsack in his description of how Statutes in Force works. If his description were right, he would have a very strong case, but it does not in fact happen that when a new Act is passed it is fitted by the editorial board into the old one. It goes into the cumulative supplement; and it is only the exceptional course which in this case the noble Lord, Lord Bellwin, has persuaded the editor to take which in any way approaches the requirement for consolidation.
I do not for a moment accept that to move an amendment such as this, which says that if you produce a Bill which is incomprehensible until it is fitted into the Act which it amends you shall not have it until it is consolidated, is an unconstitutional action. It seems to me the very reverse of unconstitutional action. Having been chairman of that committee, I certainly would not wish to do anything to derogate from its apolitical character. I agree with my noble and learned friend on the Woolsack that that would utterly destroy its character and its utility.
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We have come quite a long way since we started discussing this. The period of four months has now been reduced to two; and I take it that by that the noble Lord, Lord Bellwin, meant that we should have, so to speak, an unstatutory Keeling schedule in Statutes in Force, and that he was not merely referring to the cumulative supplement. We now have a term on the general comprehensive consolidation; I think that my noble and learned friend said this time next year. Again, that puts a different complexion on it.
I am of course entirely in the hands of your Lordships whether we vote on this. My noble and learned friend on the Woolsack will collect the voices, and it is entirely a matter for your Lordships. I am conscious that a considerable movement has been made towards what we wish for. I am not contented with it myself. I should like to see that done which I have been urging your Lordships to do. But noble Lords have heard the whole of the debate, and in particular what was said by the noble Lord, Lord Bellwin, and my noble and learned friend on the Woolsack, and the matter lies in your Lordships' hands.
On Question, amendment negatived.
[Amendment No. 95 not moved. ]
Schedule 2 [Schedule inserted after Schedule 1 to 1980 Act]:
7.18 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 96:
Page 64, line 3, at end insert—
("QUALIFICATION AND DISCOUNT PART I")
The noble Lord said: My Lords, on behalf my noble friend Lord Bellwin, I beg to move Amendment No. 96 and to speak also to Amendments Nos. 97 to 112, which were taken with Amendment No. 4.
Amendment No. 97: Page 64, line 7, leave out ("7(5)") and insert ("7(1)").
Amendment No. 98: Page 64, line 9, after ("be") insert ("the period qualifying, or").
Amendment No. 99: Page 64, line 10, after ("of') insert ("this Part of").
Amendment No. 100: Page 65, line 9, leave out ("dies or otherwise ceases") and insert ("died or otherwise ceased").
Amendment No. 101: Page 65, line 10, leave out ("occupies") and insert ("occupied").
Amendment No. 102: Page 65, line 12, leave out ("becomes") and insert ("became").
Amendment No. 103: Page 65, line 15, leave out ("qualifies under this paragraph if it is a period").
Amendment No. 104: Page 65, line 19, leave out ("and either—(a) it was") and insert ("being either—(a)").
Amendment No. 105: Page 65, leave out lines 22 and 23 and insert—
(" (b) a period ending not earlier than two years before another period falling within this sub-paragraph.
shall be regarded for the purposes of paragraph 2 above as a period during which he was a public sector tenant.")
Amendment No. 106: Page 65, leave out lines 30 to 37 and insert—
("PART II
REDUCTION OF DISCOUNT IN CERTAIN CIRCUMSTANCES
5. There shall be deducted from the discount an amount equal to any previous discount qualifying, or the aggregate of any previous discounts qualifying, under paragraph 5A below.
5A.—(1) A previous discount qualifies under this paragraph if it was given—

(a) to the person or one of the persons exercising the right to buy;

(b) to the spouse of that person or one of those persons; or

(c) to the deceased spouse of that person or one of those persons.

(2) A previous discount shall not qualify by virtue of sub- paragraph (1)(b) above unless the person concerned and his spouse were living together at the relevant time.
(3) A previous discount shall not qualify by virtue of sub- paragraph (l)(c) above unless the person concerned and his deceased spouse were living together at the time of the death.
5B.—(1) Where the whole or any part of a previous discount has been recovered by the person by whom it was given (whether by the receipt of a payment determined by reference to the discount or by a reduction so determined of any consideration given by that person or in any other way), so much of the discount as has been so recovered shall be disregarded for the purposes of paragraph 5A above.
(2) Any reference in this paragraph to the person by whom a previous discount was given includes a reference to any successor in title of his.
5C.Where a previous discount was given to two or more persons jointly, paragraphs 5A and 5B above shall be construed as if each of those persons had been given an equal proportion of that discount.
PART III:
SUPPLEMENTAL")
Amendment No. 107: Page 65, line 38, after ("tenancy") insert ("which is not a long tenancy and").
Amendment No. 108: Page 65, line 41, leave out from ("satisfied") to end of line 46.
Amendment No. 109: Page 66, line 36, leave out ("Schedule") and insert ("sub-paragraph").
Amendment No. 110: Page 66, line 37, leave out ("such other person or persons as may be") and insert ("a person who is").
Amendment No. 111: Page 67, leave out lines 24 to 31 and insert—
(" "conveyance" means a conveyance of the freehold or an assignment of a long tease;
"dwelling-house" includes a house within the meaning of the 1957 Act;
"grant" means a grant of a long lease;
"long lease" means a lease creating a long tenancy within the meaning of paragraph 1 of Schedule 3 to this Act or a tenancy falling within paragraph 1 of Schedule 2 to the Housing (Northern Ireland) Order 1983;
"previous discount" means a discount which was given, before the relevant time, on a conveyance or grant with respect to which the requirements of sub-paragraph (2) below were satisfied;")
Amendment No. 112: Page 67, line 38, at end insert—
("(2) The requirements of this sub-paragraph are satisfied with respect to a conveyance or grant of a dwelling-house if the vendor or lessor is—>

(a) a person falling within paragraph 6(3) above; or

(b) in such circumstances as may be prescribed for the purposes of this sub-paragraph by order of the Secretary of State, a person who is so prescribed.")

Lord Simon of Glaisdale: My Lords, I thought that we had stopped in that grouping at Amendment No. 8. I have a note, "See column 1392". It looks as if the noble Lord did not go beyond that. I do not raise that point just to be difficult, or because my amendment has not been approved, but I want to ask a question on Amendment No. 96.
Lord Skelmersdale: My Lords, I was under the impression that these amendments had been spoken to
72
with Amendment No. 4. However, if the noble and learned Lord has a question, it would be only correct to answer it.
Lord Simon of Glaisdale: My Lords, I am grateful.
Lord Denham: My Lords, I wonder whether the noble and learned Lord would forgive me. If I could just make this plea to him because we are running very much over time on this, could he possibly keep his questions as short as possible on this.
Lord Simon of Glaisdale: My Lords, it is quite irresistible. What I wanted to ask was how the top of page 64 will read under this amendment? I found it very puzzling.
Lord Skelmersdale: My Lords, I am sorry I am somewhat confused. Was the noble and learned Lord asking me about Amendment No. 96?
Lord Simon of Glaisdale: I think we are on Schedule 2, are we not? Page 64 reads: "Schedule Inserted After Schedule 1 to 1980 Act". Then "Schedule 1A", and then comes the amendment that has just been moved: "QUALIFICATION AND DISCOUNT PART I" and then does the heading follow: "DETERMINATION OF RELEVANT PERIODS FOR THE PURPOSES OF SECTION 1(3) AND 7(1)", which are of course the 1980 Act? Have I read it right there?
Lord Skelmersdale: My Lords, I do not think, quite; and I am not very adept at doing consolidation on my feet. However, my understanding is that the words "QUALIFICATION AND DISCOUNT PART I" go in before the word "Schedule 1 A" in the Bill in its current print.
Lord Simon of Glaisdale: They follow that—do they not?—and precede the words "DETERMINATION".
Lord Skelmersdale: My Lords, I am informed that they precede the word, "SCHEDULE 1A".
Lord Simon of Glaisdale: My Lords, they do not according to the Marshalled List. I do not want to waste time on this, but perhaps Ministers would look at this before Third Reading.
Lord Skelmersdale: My Lords, most certainly I will, and if I may write to the noble and learned Lord on this point.
Lord Skelmersdale Lord Skelmersdale moved Amendments 97 to 112:
[Printed above.]
The noble Lord said: My Lords, I beg to move Amendments Nos. 97 to 112 en bloc.
Schedule 3 [Terms of a shared ownership lease].
Lord Bellwin Lord Bellwin moved Amendment No. 113:
Page 70, leave out lines 32 and 33 and insert—
("R=F(100-S) ")/100
The noble Lord said: My Lords, this is a purely technical group of amendments to give the Secretary of State greater flexibility when prescribing, by order, how a shared owner's new responsibility for repairs, maintenance and insurance should be reflected in the payments that he is required to make and his lease. We are consulting the local authority associations and other interested bodies on the various options as to the method and level of adjustment to be adopted. The purpose of these amendments is simply to ensure that we have the power which will permit us to look at all the various options in the light of comments we receive, and it does not tie us down to one particular approach. I beg to move.
Lord Bellwin Lord Bellwin moved Amendments Nos. 114 to 116:
Page 70, leave out lines 43 to 45 and insert—
(" (1 A) The lease shall also provide that, for any such period, if the Secretary of State by order so provides—

(a) the rent payable under the lease as so determined; or

(b) any amount payable by the tenant under the lease which is payable, directly or indirectly, for repairs, maintenance or insurance,

shall be adjusted in such manner as may be provided by the order.").
Page 71, line 6, leave out from ("order") to ("as") in line 8 and insert ("under sub-paragraph (1A) above provide for such adjustment").
Page 71, line 10, leave out from ("tenant") to end of line 12.
The noble Lord said: My Lords, I beg to move Amendments Nos. 114 to 116 en bloc.
Lord Bellwin Lord Bellwin moved Amendments Nos. 117 to 126:
[Amendment Nos. 117 and 118 printed earlier: col. 1414.]
Amendment No. 119: Page 72, line 11, leave out from beginning to end of line 17 and insert ("is a qualifying person").
Amendment No. 120: Page 72, line 31, at beginning insert—
("For the purposes of sub-paragraph (5)(a) above a person is a qualifying person in relation to a disposal if he—

(a) is the person or one of the persons by whom it is made;

(b) is the spouse or a former spouse of that person or one of those persons; or

(c) is a member of the family of that person or one of those persons and has resided with him throughout the period of twelve months ending with the disposal.

(6A)").
[Amendment Nos. 121 to 126 printed earlier: col. 1414.]
The noble Lord said: My Lords, I beg to move Amendments Nos. 117 to 126 en bloc.
Lord Bellwin Lord Bellwin moved Amendment No. 127: [Printed earlier: col. 1414.]
The noble Lord said: My Lords, I beg to move Amendment No. 127. It was taken with Amendment No. 10. I beg to move.
Lord Bellwin Lord Bellwin moved Amendment No. 128:
Page 75, line 5, after ("provision") insert ("with respect to different cases or descriptions of case, including different provision").
Schedule 6 [Amendments of sections 104B and 104C of 1957 Act.]
Lord Bellwin Lord Bellwin moved Amendments Nos. 129 to 133:
[Amendments Nos. 129 and 130 printed earlier: col. 1414.]
Amendment No. 131: Page 81, line 3, leave out from beginning to end of line 11 and insert ("is a qualifying person")
Amendment No. 132: Page 81, line 26, at beginning insert—
("For the purposes of subsection (4A)(a) above a person is a qualifying person in relation to a disposal if he—

(a) is the person or one of the persons by whom it is made;

(b) is the spouse or a former spouse of that person or one of those persons; or

(c) is a member of the family of that person or one of those persons (within the meaning of Chapter II of Part I of the Housing Act 1980) and has resided with him throughout the period of twelve months ending with the disposal.

(4C)").
[Amendment No. 133 Printed earlier: col 1414. ]
The noble Lord said: I beg to move Amendments Nos. 129 to 133 en bloc.
Lord Bellwin Lord Bellwin moved Amendments Nos. 134 to 136:
[Printed earlier: col. 1423.]
The noble Lord said: I beg to move Amendments Nos. 134 to 136 en bloc.
Lord Bellwin Lord Bellwin moved Amendment No. 137: [Printed earlier: col. 1414. ]
The noble Lord said: I beg to move. This was taken with Amendment No. 10.
Lord Bellwin Lord Bellwin moved Amendment No. 138:
Page 82, line 6, after ("etc.)") insert ("for the words "by order of the Secretary of State" there shall be substituted the words "under section 19 of the Housing Act 1980" and")
The noble Lord said: My Lords, with this I would take Amendment No. 141:
Amendment No. 141: Page 82, line 23, at end insert—
("(4A) In subsection (9) of that section for the words from "means" onwards there shall be substituted the words "has the same meaning as in section 19 of the Housing Act 1980".").
These are my minor, technical amendments which need not detain us. These were oversights in drafting in the 1980 Act. They will reduce the administration work involved. I beg to move.
Lord Bellwin Lord Bellwin moved Amendments Nos. 139 and 140:
[Printed earlier: col. 1414.]
The noble Lord said: I beg to move Amendments Nos. 139 and 140 en bloc.
Lord Bellwin Lord Bellwin moved Amendment No. 141:
[Printed above.]
The noble Lord said: I beg to move. It was taken with Amendment No. 138.
Lord Bellwin Lord Bellwin moved Amendment No. 142:
[Printed earlier; col. 1414.]
The noble Lord said: My Lords I beg to move. It was taken with Amendment 10.
Schedule 7 [Schedule inserted after Schedule 4 to 1980 Act]:
[Amendments Nos. 143 to 146 not moved.]
[Schedule 11 Minor and consequential amendments]:
Lord Bellwin Lord Bellwin moved Amendment No. 147:
Page 91, line 27, at end insert ("or, where the right is that mentioned in section l(l)(b) above, twelve weeks".").
Lord Bellwin Lord Bellwin moved Amendments Nos. 148 and 149.
[Printed earlier: col. 1375.]
Lord Bellwin Lord Bellwin moved Amendment No. 150: [Printed earlier: col. 1424.]
The noble Lord said: Amendment No. 150 is consequential. I beg to move.
Lord Bellwin Lord Bellwin moved Amendments Nos. 151, 152 and 153:
Page 96, leave out lines 12 to 16 and insert—
("25. Part II of Schedule 1A to that Act (qualification and discount) shall have effect as if "previous discount" included a discount which was given, before the relevant time, in pursuance of the provision required by paragraph 3 of Schedule 3 to this Act or any other provision to the like effect.").
Page 96, line 24, leave out ("In").
Page 96. line 25, leave out from ("tenancies") to the end of line 26 and insert ("shall have effect as if the reference to a tenancy granted in pursuance of Chapter I of Part I of that Act included a reference to a tenancy granted in pursuance of Part I of this Act.").
The noble Lord said: I beg to move Amendments Nos. 151, 152 and 153 en bloc.
Schedule 12 [Repeals]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 154:
Page 98, leave out lines 2 and 3.
The noble Lord said: This is yet another drafting correction. I beg to move.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 155:
[Printed earlier: col. 48. ]
The noble Lord said: This, too, is consequential. I beg to move.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 156:

Page 98, line 31, column 3, at end insert—

("In section 7, subsections (5) to (11).").

The noble Lord said: My Lords, this amendment is consequential. I beg to move.
[Amendment No. 157 not moved.]
[Amendments Nos. 158 and 159 had been withdrawn from the Marshalled List.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 160:
[Printed earlier: col. 1375.]
The noble Lord said: My Lords this is a minor and technical amendment. I beg to move.

ECC Reports: Supply Controls; Tax on Certain Oils and Fats; Farm Price Proposals
7.30 p.m.
Lord Plowden Lord Plowden rose to move, That this House takes note of the following reports of the European Communities Committee: Supply Controls (8th Report, 1983–84, H.L. 55); Tax on Certain Oils and Fats (11th Report, 1983–84, H.L. 109); 1984–85 Farm Price Proposals (14th Report, 1983–84, H.L. 153).
The noble Lord said: My Lords, these three reports by the European Communities Committee form part of a common theme related to the operation of the common agricultural policy. All three reports have been prepared by Sub-Committee D of the committee, with outstanding support from staff and specialist advisers. We are most grateful to them and to those who gave to us evidence, both oral and written.
We are debating these reports in the aftermath of the collapse of the summit last week. Although the breakdown of the summit in Brussels was over the British contribution, the underlying cause is that the CAP is under threat of disintegration, I think one may say, because of excessive spending, It is, I think, worth examining the proposals and the committee's comments in some detail, because sooner or later they, or something like them, will have to be adopted if the CAP is not to remain in permanent crisis.
The common agricultural policy dominates Community affairs, accounting for some two-thirds of total Community expenditure. Under Article 39 of the Treaty of Rome, one of the objectives of the CAP is to ensure a fair standard of living for the agricultural community, and up till now price levels for agricultural products have been fixed with that consideration in view. But the maintenance of farm incomes has never been the sole objective of the agricultural policy. Agricultural productivity, the promotion of which is also a stated objective, has increased greatly and continues to do so.
That is much to the credit of the industry and to the policy that has promoted it. It has been brought about partly in response to the guarantee of markets and prices provided by the CAP, and of course partly by technological developments. The results are that the Community's needs of temperate foodstuffs—wheat,

77
milk products, meat, and so on—are now largely ensured from within the Community, but of course production already exceeds the needs of the Community; there are large surpluses, and the surpluses are growing. In fact, the very success of the policy is in real danger of bringing about its own downfall. Consumers have to pay more for their food as a result of prices guaranteed by the CAP, thus frustrating the effectiveness of the policy in meeting one of its other objectives: that of ensuring supplies to consumers at reasonable prices.
Moreover, since the excess production encouraged by the price guarantees has to be sold on the world market with the aid of subsidies met from Community funds, a further charge falls on consumers as taxpayers. The rate of increase in expenditure on the CAP is currently outstripping the rate of increase in the resources available to the Community.
It was against that deteriorating financial background that towards the end of last year the Select Committee produced its report on supply controls—the eighth report in the current Session. That report examined the various mechanisms available for seeking to bring surplus agricultural production under control, and did so specifically by looking at three major products: cereals, milk and sugar. The report welcomed the system of guarantee thresholds, recently introduced for cereals and milk, but urged that the system needed to be applied with greater rigour and determination if it was to be effective. With regard to sugar, the report recommended the continuation of the existing self-financing arrangements based on quotas, provided that those arrangements were adapted to make them more responsive to market conditions.
The European Council, meeting in Stuttgart in June of last year, decided to undertake a major examination of existing Community policies, with particular attention to the CAP. On 28th July last year the Commission's proposals for the reform of the CAP were published. Your Lordships are of course familiar with the subsequent developments which led to the failure of the Athens summit last year. Following the abortive Athens discussions, the Commission produced its proposals on prices and related measures for the 1984–85 marketing year, and those proposals are examined in another of the committee's reports—the fourteenth report of the current Session.
The Commission's package includes not only proposals for the prices of individual products, but also the measures for changes in the working of the CAP that were presented in the document of last July, and those proposals are summarised in Annex II of the report. Because of the complexity of the package, the committee decided to concentrate attention on a limited number of what is regarded as central issues.
The report makes three main recommendations. The first relates to cereals, which the committee regards as the key to effective reform. Community cereal prices are now way out of alignment with Community livestock prices and with world prices. A cut in cereal prices would reduce production costs of livestock and would make possible both some improvement in incomes of livestock producers and some reduction in prices of livestock products to the consuming public. It would also reduce tensions with
78
other grain-producing nations, especially the United States, and it would, too, help to resolve the problem of increasing imports of cereal substitutes. Finally, it would yield some direct budgetary savings in the cost of both support and surplus disposal. In coming to that conclusion, the committee attached great weight to the evidence on future financing given by the Court of Auditors to the sub-committee.
The second recommendation relates to milk, where action to reduce the increasing output is crucial in terms of time. The report expresses disquiet over the apparent abandonment of the threshold mechanism before an effective quota or super-levy system has been designed to take its place.
A clear signal must be given to producers that production has to be restrained. In the view of the committee, if the threshold is not to be allowed to work for that purpose, immediate direct action should be taken to reduce the basic price. Thirdly, the committee reaffirms its view, in the report on supply controls, that the guarantee threshold system can provide an effective restraint on production if it is associated with tight pricing policies. But the threshold levels need to be reviewed urgently and established at a realistic level.
The report notes that the Commission's package, if implemented at once and in its entirety, would just about enable CAP expenditure to be contained within the budget for 1984. This estimate does, however, assume that certain favourable circumstances remain unchanged. A renewed weakening of the dollar and a bumper cereals crop could undermine that assumption. Furthermore, the estimates allow for receipts from a proposed tax on oils and fats. This is the subject of the third report before the House today, the eleventh report of the current Session. Opposition to this tax was almost unanimous among those from whom Sub-Committee D took evidence.
The Committee regards the tax as objectionable in both principle and practice. Although its rejection would require even more drastic action on prices to bring the Community budget into balance, the committee considers it wrong that fundamental objections to the tax, reiterated by consumers and traders alike, should be overriden in an attempt to create a new source of revenue to pay for a long-standing failure to bring CAP expenditure under control.
As part of its package of measures, the Commission proposes the abolition of the so-called green rates, used to convert agricultural support prices into national currencies, and the consequent dismantling of monetary compensatory amounts. The committee accepts the Commission's arguments that the continuation of green rates as a permanent feature of the Commission's agricultural regime distorts the operation of the CAP. It considers that the present is an opportune time to seek to remove this impediment to the functioning of the free market. But it considers that the dismantling of MCAs should be carried out as a gradual process. In paragraph 46 of its report, it suggests a means whereby this might be achieved.
Little more than a week ago, the Council of Agriculture Ministers reached a provisional accord on milk, on MCAs and on a range of other issues that gave rise

79
to hope that a finally agreed package would emerge from the subsequent meeting of the European Council. On milk, I would refer your Lordships to the Statement made in another place and repeated in this House by the noble Lord, Lord Belstead, on 14th March. While these measures are bound to impose hardship on some farmers, an agreement to impose strict quotas on milk with no exemptions and a penal levy on excess production is a positive and realistic step towards bringing the surplus of that commodity under control. But, having regard to a basic quota of 98.2 million tonnes agreed for 1984–85 and a basic quota of 97.2 million tonnes for 1985–86 and subsequent years, in addition to an agreed Community reserve of 0.6 million tonnes a year, all that is substantially in excess of current levels of consumption.
An agreement underpinned by further action on prices would have been preferable. No one should underestimate the political difficulties in taking the first step to cut back the overwhelming flood of milk and milk products far in excess of any possible consumption within the Community. This was shown by the attitude and the action of the Irish Prime Minister. But what does one do with over 900,000 tonnes of butter in public and private store and over a million tonnes of skim milk powder, with stocks still growing?
The agreement on MCAs is more complex. While the success of our negotiators in maintaining at least for the forthcoming year that the adjustment of MCAs will not of itself affect the existing level of farm prices when converted into sterling is welcome, the implications for additional expenditure from the Community budget give cause for concern. I am sure that noble Lords would welcome anything that the noble Lord the Minister can say today by way of clarification of the provisional agreement on MCAs and its implications for the United Kingdom and for the future level of Community expenditure.
The Council of Agriculture Ministers is, I believe, at this moment, meeting yet again in Brussels in an endeavour to reach agreement on a comprehensive package establishing support prices for the coming season and laying the foundations for the reform of the CAP. From what one hears, it seems likely that whatever agreed measures emerge from this session, they will fall short of the action recommended by the Select Committee. They will almost certainly give rise to expenditure at a level that is beyond the Community's present ability to finance.
The committee's report on farm price proposals may be regarded by some as hostile to the farming community. Such is not its intention. Indeed, it would be surprising if a sub-committee over half of whose members are practising farmers were to adopt such a policy. The committee recognises that agricultural incomes generally have turned down in real terms. But it does not believe that increased output at higher institutional prices for commodities already in surplus provides the solution. In the ultimate, the answer must lie in the application of really stringent price cuts, combined with direct income support in appropriate cases under common Community rules and possibly financed partly from Community funds. Fanners and the farming industry throughout the Community must
80
adapt to the realities of the market place—the sooner, the less painful the transition.
The Commission's package fails to provide what is needed above all to secure that adaptation—a clear signal that the Community will apply a restrictive price policy associated with firm guarantee thresholds and will apply it consistently and with vigour, thus providing a firm basis on which farmers can plan ahead. There have been encouraging signs of a greater awareness by the Commission of the need for drastic action not least in its latest package, much of which is most commendable. But without the determination to translate this awareness into sustained action, I submit that the outlook for farming, for the common agricultural policy and, indeed, for the Community as a whole is grim indeed. I beg to move.
Moved, That this House takes note of the following reports of the European Communities Committee: Supply Controls (8th Report, 1983–84, H.L. 55); Tax on Certain Oils and Fats (11th Report, 1983–84, H.L. 109); 1984–85 Farm Price Proposals (14th Report, 1983–84, H.L. 153).—(Lord Plowden.)
7.50 p.m.
Lord Belstead: My Lords, I am sure that your Lordships are grateful to the noble Lord, Lord Plowden, for introducing these three reports, and to the Select Committee for their admirable work on the complex problems associated with the operation of the common agricultural policy. Your Lordships will be aware that this year's negotiations within the Community to agree farm prices have been particularly difficult in view of the fact that spending in the Community has now reached the budgetary ceiling. Indeed, at the beginning of his speech the noble Lord referred to the need to remove the climate of crisis in which the common agricultural policy is operating at the present time.
Your Lordships may wish to hear a word or two about progress to date, and then, with the leave of the House, I will try to answer questions and to respond to what has been said in the debate at the end. Let me first say a brief word about the two important reports on supply controls and the proposed tax on oils and fats.
The report on supply controls was produced in November last year, and examines the various means of controlling production, with particular attention, as the noble Lord, Lord Plowden, said, to the cereals, milk and sugar sectors. Speaking for myself, I found the analysis of the different systems of control very illuminating. The Government would particularly endorse the comment made in paragraph 27 of the report, that it is important to apply controls on production of all farm products in surplus. Indeed, the Government would go further. We consider that some form of restraint should also be imposed on those products which, while not in actual surplus, are nearing that point or are taking an increasing or disproportionate share of agricultural support. In saying that, I am thinking particular of certain Mediterranean products, such as olive oil and tobacco.
In the milk sector, the report recommended the continuation of realistic guarantee thresholds, combined with a firm price policy and possibly reinforced by a supplementary levy on all production. Although the noble Lord, Lord Plowden, was not

81
uncritical of the strategy of having just the quota and superlevy proposals, essentially that structure is the package that has now been provisionally agreed. In the cereals sector high support prices have stimulated increases in production and led to the accumulation of large and very expensive surpluses. Here the report quite rightly called for rigorous action on prices. On sugar, the report in effect endorsed the current quota system in principle although it concluded—in the Government's view quite rightly—that the decisions that have been taken in recent years, especially regarding the setting of quota levels, have led to serious problems.
The report on an oils and fats tax is certainly an admirable exposition of the purposes and effect of the proposal. The Government fully agree with the committee's opposition to it. As the report shows, the tax would be an extremely inefficient means of raising revenue and would be contrary to the spirit, if not the letter, of the Community's international commitments. The proposal would place a burden on the processing industry and on consumers. We have criticised the proposal on all these grounds and, indeed, on others, and we have been joined in doing so, as your Lordships will know, by a number of other member states. I should like to make it clear this evening that our views on this matter remain unchanged.
However, it is the committee's report on the 1984–85 price proposals around which most of the noble Lord's remarks concentrated, and around which I guess most of this debate will concentrate. This year the agriculture council has been considering, as well as normal price proposals, proposals for reform of the common agricultural policy stemming from the post-Stuttgart review agreed by heads of government. The council's consideration of all these proposals has been overshadowed by the financial problems of the common agricultural policy, which show no signs of abating.
Following intensive discussions in the agriculture council over the past weeks, three documents have been drawn up—one on milk, one on monetary compensatory amounts and one on other aspects. Each is still subject to important reserves, but nevertheless considerable progress has been made towards a consensus. At the agriculture council now in progress in Brussels, negotiations will show whether final agreement can be reached. The degree of agreement reached so far has been supported by the commission, which have amended their own proposals to bring them into line with what has been agreed in the council. The starting point for the United Kingdom in the discussions has been that the common agricultural policy must live within the budgetary limits, and that any package must treat the United Kingdom equitably with other member states. For example, in the Government's view temperate and Mediterranean products really must receive equality of treatment.
As to specific commodities, as the noble Lord identified milk is really the most important in that it absorbs 30 per cent. of the cost of the CAP; that is, over £3,000 million per annum. Substantial progress has been made towards agreeing that a quota/superlevy system should operate for the next
82
marketing year. Since a substantial price cut, which was our preferred option, did not prove negotiable, it was absolutely vital to get restraint in some other form given the limited market outlets and the inexorable rise of production in recent years. Both of those aspects were brought out so clearly in the speech of the noble Lord, Lord Plowden. A scheme on the lines envisaged would, I am advised, save the Community over 1 billion ECUs—that is, over £600 million—of expenditure in a full year, and would prevent any increase in the surplus over the five years of the scheme.
The main outstanding issue on the superlevy still to be decided, as again the House will well know, is the Irish claim for exemption. As I have explained, the levy is vital, but its imposition will be a serious matter for many of our own producers, and in such circumstances we really could not accept the permanent exclusion of any member state from the system. This is particularly important for us given our proximity to Ireland and the effects on our milk products market of Irish exports.
On the other hand, milk represents 3·5 per cent. of GDP in the Republic, and nowhere else in the Community does it exceed 1·5 per cent. There seems to be a disposition among member states to make some special provision for the Republic in recognition of this position. However, my right honourable friend has explained that the Government's view is that all member states must be brought firmly within the system and that the claims of Northern Ireland must be given equal consideration with those of the Republic.
A quota system is not perfect, but it represents a very real step forward in controlling the huge surpluses for which, of course, the United Kingdom and the Federal Republic of Germany have been, in the main, financially responsible. The scheme envisaged would base national quotas on deliveries to dairies in 1981 plus 1 per cent., and includes the very important provision that sales off-farm bypassing dairies, which are proportionately greater in other member states, should also be covered. However, quotas can be split among producers in each member state on the basis of their share of production after 1981. A later year—for instance, 1983—would allow (so I am told) for the evolution of production since 1981 and help to avoid the creation of "hard cases". Member states are allowed the option of applying the quota at dairy or at individual producer level.
The Government are keeping in close touch with the principal interests in the milk industry before deciding which scheme should be applied in the United Kingdom. The committee's report pointed out—again, rightly in the Government's view—that reduction in cereals prices should be a first priority in the common agricultural policy to reduce the imbalance between support for the arable and livestock sectors. Indeed, the Ministry's 1984 Annual Review of Agriculture shows the effect of this imbalance on farm income in the United Kingdom. Over the last few years income in the intensive livestock sector has dropped significantly in real terms, while there has been a very considerable increase in income from cereals and other arable farms. It is part of our policy to seek to redress this balance.

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It is now envisaged that for most cereals a small price reduction should be made for 1984–85 rather than a price freeze, which was originally proposed by the Commission. Slightly bigger price decreases are now envisaged for oilseeds than for cereals, and this is welcome given the very substantial cost of the oilseeds regime. A price freeze is now envisaged for sugar. Perhaps I may suggest that we must remember that a price freeze represents a significant reduction in real terms, especially in countries like France and Italy, with higher inflation rates than ours.
As to other livestock products, a 1 per cent. price decrease is now envisaged for beef compared to the increase of 1½ per cent. originally proposed by the Commision. The price of the beef regime has been mounting steadily, and over 400,000 tonnes are now in intervention storage. One highly unsatisfactory feature is that no provision has yet been made in the proposals from the presidency which are before the agriculture council again today for the continuation of the beef variable premium. We are convinced of the benefits of the premium, particularly in view of those statistics which I mentioned just now about the amount of beef in store. We believe that there are benefits for both producers and consumers. My right honourable friend will be pressing our case with firmness at the council, although it must be recognised that we are alone in this demand.
A 1 per cent. reduction is also envisaged for sheepmeat, rather than the increase previously proposed by the Commission. My right honourable friend will be seeking amendments to the proposals for changing the methods of calculating ewe premium, which as currently drafted could bear unfairly on our own producers.
The noble Lord, Lord Plowden, asked me whether I could say a few words about the complicated world of monetary compensation amounts, although I rather suspect that the noble Lord may be able to forget more about MCAs than I have yet learned. It is envisaged that, as your Lordships know, fixed positive MCAs should be eliminated over a three-year period, while the creation of new fixed positive MCAs would be avoided by basing prices on the strongest currency for this period. The position of floating currencies is to be fully protected, and we would be under no obligation to revalue the green pound—one of our objectives in this year's price fixing. Our reservation is that this new system could prove costly in budgetary terms, and we are seeking assurances on this aspect at the meeting which is taking place now.
The three reports which we are considering here today between them cover many of the issues which are vital for the future of the common agricultural policy and hence the European Community. The Government have made clear their determination that genuine reforms should be made to the common agricultural policy, and that the unrestrained growth in European Community agricultural expenditure really cannot continue unchecked. We stand on the verge of making major advances which will allow these important objectives to be in large part fulfilled, even though this will have serious effects on some of our producers. I was so glad that the noble Lord, Lord Plowden, mentioned that in his speech. I repeat the
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Government's gratitude to the Select Committee of your Lordships' House for the three very valuable reports which provide the occasion for this debate.
8.5 p.m.
Lord John-Mackie: My Lords, we are very grateful to the noble Lord, Lord Plowden, the Chairman of the Select Committee. In fact, he went through the report so fully that I think we may be wasting a great deal of time repeating what we want to say because the noble Lord has done a good job in putting the matter so quickly and so well before the House. We are equally grateful to the noble Lord, Lord Belstead, for bringing us up to date with the various fresh proposals which are being put forward, some of which make me shudder, as I am just starting a new beef project. I think he said that there is likely to be a 1½ per cent. cut. When he told us that 400,000 tonnes of beef is in store, one can see the reason for it.
As we all know, the problem of Ireland is a very difficult one, and I trust that it will be solved satisfactorily. However, the noble Lord emphasised that all countries must accept the situation almost equally. The noble Lord, Lord Plowden, dealt with the oils and fats tax report; all that the committee felt was needed was a one-word report saying that we were all against it. However, we thought that we should put it a little more fully than that. If one reads our objections in the report, one cannot but concur with them.
In a way the other two reports are complementary to each other, so let us take a look at what we have said about the price proposals. Our first conclusion is that the Commission's package:
"fails to match up to the requirements of the situation".
I think that that can be said over and over again. Six years ago the president of the Commission, Mr. Roy Jenkins, opened the Royal Show and made a speech to a very large audience of agriculturalists, farmers and others. In his speech he gave a very stern warning when he said that sooner or later something would have to be done about the surpluses, et cetera. Afterwards I spoke to him and asked what he meant by "sooner". He said that if he had his way it would be next year, but that unless something was done within two years there would be a crisis affecting the whole situation. Here we are six years later and, quite frankly, we—and by "we" I mean the EEC as a whole—are taking only a faltering step in the right direction. I do not think that my fellow farmers can complain that they were not warned. They claim that they received no notice, and that they need longer notice. But, in view of what Mr. Roy Jenkins said six years ago, which has been repeated by various people since then, I doubt whether that objection can be sustained.
But in some ways one can hardly blame farmers for going ahead as they have. After all, our remit was to produce food, and, if you are a producer of anything, you produce as much as you can. Of course the argument is that they produce products that cannot be sold, which may be true. But it is still difficult to blame individual farmers for production having got out of hand, and today we are faced with a situation with which we seem only to be tinkering. I agree with the noble Lord, Lord Plowden, that the technical and scientific progress in the last 10 years has been quite fantastic when we look at the figures for the production of cereals, milk per cow, et cetera.

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Let us take a look at milk. The projected production is 110 million tonnes a year. Over the next five years the quota, before penalties, is 98·2 million tonnes for the first year, dropping to 97·2 million tonnes for the next four years, a reduction of about 11·8 million tonnes. However, if I have read the figures correctly, consumption in the EEC is just under 90 million tonnes—about 88 million tonnes. So we still have 10·2 million tonnes to deal with as a surplus, and the noble Lord, Lord Belstead, pointed out that that will continue. This surplus comprises dried milk and butter—two commodities not easily sold on world markets—900,000 tonnes of butter and over a million tonnes of powdered milk and if, as we are likely to do, we carry on with that surplus of 10·2 million tonnes, these amounts will increase. Even if we succeed in getting a reduction of 11·2 million tonnes, we shall still have to cope with the 10·2 million tonnes. That, of course—as our EEC partners are not slow to point out to us—includes the 80-plus thousand tonnes of New Zealand butter which we import. You know, it is very difficult to understand New Zealand. Between 1981 and 1983 they themselves imported nearly 100,000 tonnes of butter, and this is something which I think requires some explanation. If they are going to import butter, it seems slightly ridiculous to export to us and put us in such bad grace with our EEC partners.
We have basically the same picture—as was pointed out—with cereal production and sugar. Cereal production is 130 million tonnes, with consumption somewhere between 10 and 15 million tonnes below that. That is exacerbated by the import of cereal substitutes to the tune of an average of 15 million tonnes in the last three years. Sugar is at a surplus of two million tonnes per year, and this is again swollen by 1·3 million tonnes of imports. I know the reason for it but it does make the situation difficult. We know that the A, B and C quota pricing system did help the storage costs of sugar but has run into difficulties over the last two years.
Along with the EEC proposals, what would our recommendations do to correct the situation? To begin with, we scrap any suggestion of a system other than price control. Personally, I think that at some time sooner rather than later we will have to look at deficiency payments again in spite of the known difficulties. There are recognised difficulties and I know that the present Minister of Agriculture is, as he puts it, philosophically, against deficiency payments. I am convinced that this would give consumers—and I know the noble Lord, Lord Mottistone, might like to think that this would happen—raw materials supplies at much cheaper prices which would ultimately move down to the consumers in the market and reduce the cost of living. In the meantime, methods of price disincentives are the order of the day. I fear farmers' reactions. If they produce more to keep up the standard of living, up go the surpluses. That is the reaction of most farmers in the beginning anyway.
In the report on farm price proposals we say that farmers must have clear guidelines about what is to happen as far ahead as possible. I am glad that the noble Lord, Lord Plowden, emphasised this and we did, of course, look at the question of disadvantaged farmers who might need to be treated differently if there were savage cuts in prices. I would go further and
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give them some guidance as to what to do. I know the noble Lord, Lord Walston, has twitted me that is not our business: that you cut the prices and let the farmers decide for themselves, but I feel that some guidance would help. If you reduce your number of cows, you have surplus land to grow wheat or what have you, which is already in surplus, and so it goes on. I suggest—and I notice that this is becoming a more popular theory (I put it forward quite a long time ago)—lower input and output systems both in milk and arable production. I would take a look at the price we pay for protein from outside the EEC and produce more at home (peas and beans) and higher quality silage and hay. We are spending millions on nitrogen and sprays to grow more and more surplus cereals. More legumes as a break-crop would cut out quite a lot of both.
I could go on. If the recession goes and the standard of living increases, more meat should be eaten, although it might take us a while to move to that 400,000 tonnes the noble Lord, Lord Belstead mentioned. We should then be right in keeping our numbers of cows, producing less milk from them but producing beef calves for the arable men to fatten. But what we should be more interested in is what to do with the present surpluses, which will certainly go on, as both previous speakers have said, for a good few years to come.
Quite a while ago I suggested to the Milk Marketing Board that they ultra-heat treat milk into 20-litre containers and send it whole to places like Eritrea where children are starving. If anybody saw the pathetic pictures of starving children in Central America on television a few nights ago, they would know what I mean. This was laughed out of court of course: carting all that milk thousands of miles! I suppose it is a different priority but I understand we have been shipping fresh water from New Zealand to the Falklands. I just ask you to think along those lines.
I met a Northern Ireland food researcher who has perfected—and I spoke to him on the telephone today just to be sure—a system of reducing the water content of milk to a consistency of what I can only describe as very soft butter. I have tasted it. It has all the goodness of fresh milk and, of course, can be pasteurised. Why are we not doing something about this? I tried to interest the Milk Marketing Board, but they had other things on their minds at the time. We have an enormous surplus of grain. Why do we not step up our food aid and get it to the starving millions all over the world? I know the arguments that this distorts local farmers' prices, distorts international trade and so on.
The late Lord Boyd-Orr—who I always knew as Sir John Orr and before that Dr. Orr—in the middle twenties was asked by grain traders if he could produce a chemical to make wheat suitable only for cattle or animal food. He said:
"I suggest you get barges and take it down the Rhine to the starving Germans and East Europeans and it may save another war".
I suggest we think now about what Sir John said. With enormous surpluses of food in the Western world and anything up to 80 million people elsewhere crying out for it, is it outwith the wit of man to get it to them? I hope not.

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These two reports at least give a good picture of the situation. We come to conclusions but no hard and fast major recommendations. We hope the Commission will take note of these conclusions. I understand that they read our reports carefully and I am sure we have done a good job in that respect.
I am glad that the noble Lord, Lord Plowden, mentioned our efforts at a child's guide to the agri-monetary system. The noble Lord, Lord Belstead, presumed that Lord Plowden had forgotten more than he knew about it, but I have the feeling he knows more than most of us. I hope the dismantling process is a careful one because it will have a big effect on farm prices.
As I say, I hope our conclusions in this report will be looked at very carefully and I commend it to the House.
8.18 p.m.
Lord Walston: My Lords, we are, as the noble Lord, Lord Belstead rightly said, grateful to the noble Lord, Lord Plowden, for giving us the opportuntiy of debating these three reports, and also for the masterly way in which he introduced the debate. As a member of the sub-committee which produced them, may I also thank him for his chairmanship? It was a pleasure to sit under him, and such value as the reports have is in very large measure due to his work.
I say those polite words with complete sincerity. I now, unfortunately, cease to be polite but I continue to be just as sincere. I am horrified and appalled at the state of the common agricultural policy and—and I say this with regret—at the apparent complacency of the noble Lord, Lord Belstead, in the speech that we have listened to. The common agricultural policy, we all agree, is in a hell of a mess. That is bad in itself, it is bad for farmers, and it is bad for consumers. But it is even more serious for the Community as a whole, for its development and for its future; because hours, days and weeks are spent, have been spent and will be spent, trying to improve here and to block up a little leak there, when minds ought to be directed to far more important things. And even at the summit conferences, it is still the common agricultural policy and its costs which dominate the discussion, to the exclusion of far more important things.
This has been brought about—and I am sorry to have to say this—by stupidity, by cowardice and by obstinacy on the part of the Commission itself and of the officials there, and on the part of Ministers of Agriculture from all countries—stupidity at not recognising what the true factors are and (as the noble Lord, Lord John-Mackie, reminded us, and as Mr. Roy Jenkins said when he was President of the Commission) where that policy was leading. It was clear even before he said that in 1978 that it was leading us to this sort of situation. There was stupidity at not recognising that; obstinacy in not listening to proposals which were put both to the Commission and to Ministers in this country and (I have no doubt) elsewhere which would have overcome these difficulties before they reached extraordinary proportions; and cowardice in not facing up to the rather awkward, somewhat unpopular decisions that would have been necessary to prevent that from
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happening, and which now are far more awkward and far more politically impossible than they would have been had there been just a glimmer of statesmanship in the past six or eight years, or even longer. That is the cause of the trouble that we are discussing today.
We all know that the common agricultural policy stems from the Treaty of Rome, and it is worth remembering, for one sometimes forgets, that at the time of the Treaty of Rome Europe was emerging from the ravages of war and was suffering from, and fearful of, food shortage. Also, there was an industrial boom about to get under way: industry was being rehabil-itated; the damage of war was being put right; there was full employment—over-full employment—throughout the whole of Western Europe; wages in industry and in the cities were rising; divergences between agricultural wages and rewards for the farm workers and for the small and big farmers were very small compared with those of urban life; and the need for more food was very great indeed. That was how the common agricultural policy was born, and it is worth remembering that for it accounts for a lot of difficulties which are now being faced.
But we must face those difficulties, and we must also face the fact that the economic situation and the world food situation has changed very significantly in the last 25 to 30 years. Today, in spite of what the noble Lord, Lord John-Mackie, has said, there is in effect a world surplus of food. Of course, from a nutritional point of view, and from a humanitarian point of view there is still a serious world food shortage. Unfortunately however, we are not dealing with philanthropists but with selfish and greedy people who are not prepared to put their hands in their pockets in order to pay for that sterilised milk to be shipped to Eritrea.
We must accept the fact that there is today an excess of food and there is at the same time a very large degree (and we know this only too well) of unemployment. Therefore, the common agricultural policy must be, not scrapped and rebuilt but modified and altered in order to face the problems which exist today, which have existed for a good many years in the past and which will continue to exist for many years to come. In other words, what it must do is to revert, in a different way, to its original purpose. It must still provide the consumers of the Community with the food that they require, and it must still ensure that those who produce that food that is required are adequately recompensed. But the important thing is that it must be for that amount of food which is required. We cannot afford to go on giving blank cheques to anybody who wishes to come into farming and allow them, on those blank cheques, to write out their own dividend warrants. That is what has been happening over many years, and it must be brought to an end.
Farmers must be free to produce as much as they wish of any commodity that they wish, but they cannot expect the Community as a whole, the taxpayers of the Community, to foot the bill for disposing of those surpluses. If they produce excess, it must be at their own risk. The theoreticians—and I include some of my colleagues on the committee—feel that the answer to this problem of overproduction must lie with the price mechanism. Here, I say quite frankly that, while 1 do not disagree with the general

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attitude of the two main reports, one on supply control and the other on price proposals, I disagree quite strongly with the emphasis that is placed on the price mechanism. Of course we must have a price mechanism; we cannot turn our backs on it. In the long run the market must decide; but I would suggest to your Lordships that the price mechanism fails, in the first place, because, although it works in the longer term, the long run is far too long and it takes far too much time for it to have any effect.
As the noble Lord, Lord John-Mackie, has said—and I agree with him strongly—when you have a price reduction the immediate reaction of the farmer is to maintain his income and to produce more. Eventually, he will find that he cannot go on doing that, but in the meantime the difficulty has been accentuated. Secondly, it fails because it causes hardship not only to very many individuals but to whole areas of the rural countryside, so that, if the price policy alone is pursued, you get the situation of the creation of rural slums.
Thirdly, and most importantly, it fails because it is not feasible, for these very reasons it is politically impossible, to expect that the type of price reduction which would bring about the reduction in production sufficiently fast for our purposes, and the damage which would be done to individual farmers with their votes and to individual areas, is something that would not be supported by politicians. Therefore, I suggest, as I have suggested on many occasions to your Lordships and elsewhere, that the answer must lie in a long-term food production plan. The Community must state how much food it is going to require from its own farmers over the next five years on a rolling period and how much it wants produced at home—and for that amount it should pay good prices, but only for that amount. The noble Lord, Lord Belstead, said that this was something that they were moving towards, and I give them credit for that.
However, I give them very little credit, because the movement is so slight and the speed so snail-like that they cannot really expect very much credit for it. And such target quantities as have been laid down are all far too high, as has been pointed out—far in excess of the needs of the Community—and there is no indication that there will be any progressive reduction. And that is what there must be. I am prepared for this reduction to take place slowly—not like a snail but not like Concorde—but it must be sure; and we lack that sureness at the present time. No farmer is convinced that the amount of the standard quantity, or whatever you want to call it, of any given commodity is going to be reduced steadily year by year until we reach that amount which the consumer requires.
At the same time—and here I agree with the price mechanism—we must also go in for a policy of price reduction so that the prices, again slowly but very steadily and very surely, come down towards the projected world levels. It is a difficult exercise and one has to be fluid about it; but there must be an attempt to approach what it is expected that world prices will be in the years to come. I would not object to those prices for those given quantities being stabilised at something above the world prices.
The methods of doing this are complex and they vary from commodity to commodity. Certainly I will
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not weary your Lordships by describing the various ways which have been proposed. It is one of my complaints about our document on the supply control that we did not describe in some detail how, with certain commodities such as cereals, this could be done. All I would say to your Lordships is that it can be done: it is feasible administratively, politically and economically.
Of course, if this is carried out, as I am suggesting, undoubtedly there will be hardships. There will be hardships to individuals and in whole areas; but these are social problems and not agricultural or economic problems. They are the same sorts of problems that occur when coal mines are closed or when a steel industry or a shipbuilding industry goes under. Those are not problems to be dealt with by economic means: they must be dealt with by social means. Eire is a country which will undoubtedly be affected by this and it must be given help of a social nature. This help must come in some proportion—I would not specify what—from the Community's social funds, into which all members pay their contributions according to their ability and out of which all members take out according to their need. That is a good doctrine, which I am sure will appeal to the noble Lord, Lord Belstead, and his friends.
But each member country should be allowed freedom to top up their contribution, if they do not think it is sufficient, in any way they think fit, so long as it does not encourage any increased production of commodities which are already in surplus. We must realise that in order to maintain what the Treaty of Rome sets out to do—namely, that the farmworker will not be disadvantaged as compared with the industrial worker—the level of subsidy, or social payment, that is needed in a country like Denmark—shall we say?—is very much greater than it is in southern Italy or in Greece. Therefore there must be freedom for the individual country to top up such contributions as come from Brussels.
The methods by which these things should be done must be discussed in detail and with urgency by the officials in Brussels. That is their job. But there can be no doubt that it is feasible to do something on these lines. Let Ministers by all means argue about the level of the social payments and about the levels of the agricultural prices for all the quantities which are required; but let the level of the Community's needs be fixed on the actual consumption within the Community and on future projections. That is a statistical exercise about which there can be, and should be, no argument at all.
Above all, let us accept and let the Government from its strong position in these discussions accept and press for the principle of fair prices for such quantities as are needed. But let the farmers take the market risk for any surplus that they may happen to produce, and let the ensuing hardships be met by social and not by agricultural payments. If Her Majesty's Government, with their very strong position of having the right to veto any increase in the Community's own funds, had put forward constructive proposals of these kinds instead of haggling about minor details of how much should be repaid to us, if we had thought that out ourselves, had taken the initiative ourselves and had used our strong negotiating position to put this point

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across, I believe we would have gone much further towards success than the rather pathetic little progresses which the noble Lord has told us about.
8.38 p.m.
Lord Bancroft: My Lords, we have just heard an eloquent and informed contribution from the noble Lord, Lord Walston. Alas! I am not equipped to follow him, and my brief and prosaic remarks will be confined strictly to the report on the Commission's farm price proposals which really will not do. I think that pretty well everyone is agreed on that.
The Committee's report tries to comply with the plea of the Court of Auditors, the plea that reforms and retrenchment in the common agricultural policy should be the subject of an intellectual analysis and that such an analysis should replace—or at any rate march alongside—our leg-weary old friend, political will.
The CAP, as has been pointed out already, is devilishly complicated. It has been patched, stitched and darned—debauched almost—out of all recognition. But, as the noble Lord, Lord Plowden, has pointed out, a main objective of the CAP is simple: it is to ensure a fair standard of living for the agricultural population of the Community. But what we have got is a chaos, an old night, which produces huge annual surpluses; and the Community consumer has to pay the unnecessarily high prices which produce these surpluses. Then, turned into a taxpayer, he has to pay a second time to finance their disposal at knock-down prices outside the Community. So, slightly out of alignment with the noble Lord, Lord Walston, the first, if not the last conclusion to be drawn is that the institutional prices are generally too high and that they should be reduced, not just frozen.
Lord Walston: My Lords, I accept that entirely. I hope I made it clear that prices are too high and that they should be reduced. My point was that one must not rely upon the price mechanism to dispose of all the surpluses.
Lord Bancroft: My Lords, I am obliged to the noble Lord. Our non-alignment lies, perhaps, in the direction of passion rather than intellectual analysis. Again, I follow the noble Lord, Lord Plowden, in believing that this applies particularly to cereals, first because of the malign ripple effect of artificially high cereal prices right across the agriculture and food sectors; and, secondly, because of the equally powerful benign effect of a price reduction. The Commission's own cereal figures forecast a production excess of at least 20 per cent. over Community demand by 1990, and 20 per cent. represents 23 million tonnes. What has recently been proposed for milk is most welcome. I hope that that welcome will itself be welcomed amidst the uproarious calm on the Government Benches. But it is a short and hesitant step, as yet, in the right direction.
A second conclusion is that everything possible should be done to uncomplicate, to de-barnacle, to simplify the common agricultural policy and thus save wasted resources. It is a great happiness that one of the effects of stringent price reductions, especially in cereals, will achieve precisely that objective. A third
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conclusion of an analysis of the CAP problem is that, as has already been pointed out, certain arrangements should be made in relation to monetary compensatory amounts. I refer in particular to paragraphs 45 to 48 of the committee's report. These arrangements would be greatly eased if all Community countries were to become full members of the European Monetary System. I repeat that it is high time and, if I may say so, ripe time, as select committees earlier recommended, for the United Kingdom to join the exchange rate mechanism. This, at any rate, is a matter within the competence of Her Majesty's Government.
These are three conclusions of the committee which have particular force. We in this country benefit from, as well as contribute to, the Community, both tangibly and intangibly. It would be a great reassurance to consumers if the agricultural system was winched on to a simpler, sounder and more stable footing. This would, I believe, also be in the long term interests of United Kingdom agriculture—one of our biggest and one of our most efficient industries. And especially vulnerable sections should, as the report implies, get transitional direct income support. A further benefit would be the release of scarce and at present wastefully used Community resources. This would make it possible to consider devoting a bit more to other wealth-producing and job-creating investment for the future. Investment in the infrastructure and in the industrial development of the deprived regions comes all too readily to mind as a vivid and telling example.
8.45 p.m.
Lord Mottistone: My Lords, I, too, should like to thank very much the noble Lord, Lord Plowden, for so skilfully introducing this debate and for his even more skilful chairmanship of the rather disparate and differently opinionated members of Sub-Committee D. I shall be as brief as I can and speak about the main points, as I see them. First, I must declare an interest. I am employed by the Cake and Biscuit Alliance, which manufactures biscuits and packaged cakes. Therefore I speak from the point of view of food manufacturers, and my opening remarks relate to what the industry sees as the main points.
One which is perhaps slightly new relates to its belief that the common agricultural policy must be retained. That is a good move. Secondly (the Government, I believe, take this view, as the Select Committee certainly does in its future financing report) the industry believes that there must be no increase in the 1 per cent. VAT before the common agricultural controls are made effective. Thirdly, both we and, I believe, the committee agree that the open-ended nature of the common agricultural policy must be curtailed.
My next point is that a good way of partially disposing of the surpluses would be to redistribute them at reduced prices within the Community for food processors, as is the practice at the moment with the reduced price of butter for the manufacture of biscuits. In view of my declared interest, that may seem to be special pleading. However, the fact is that processed foods earn the Community more money outside it than do raw materials straight from the farms. It would be helpful to the Community in the broader sense if greater attention were paid to the

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encouragement of the export of processed foods, which in the case of this country are third in the league table of manufactures of all kinds and which have grown to that magnitude over the past 100 years. There are good reasons, therefore, why it would be helpful if the Commission in particular were to pay greater attention to factors which do not relate strictly to the responsibilities of DG VI.
I turn now to the MCAs. I was interested in what my noble friend had to say about the phasing out over three years of positive MCAs. I hope that negative MCAs will be similarly treated. I am not at all sure that they will disappear very quickly. It means that governments will have to relinquish, in the green currency, one of the weapons that they have in adjusting prices to suit the needs of their own countries. It would be helpful if the distortions in the market place, which apply in particular to manufactured foodstuffs—known in the jargon as non-annex II goods—could be removed. This applies in particular to the de minimis rule, which operates extremely unfairly against the manufacturers of processed goods with a positive MCA as opposed to those with a negative MCA. To be blunt, French biscuits can come into this country much more cheaply than British biscuits can get into France. This is contrary to the basic principles of the common agricultural policy. Indeed, I would say that it is probably against the competition rules of the Treaty of Rome.
My next point relates to the oils and fats tax, which I was delighted to hear my noble friend on the Front Bench say the Government, like the committee's report, are dead against. I hope that the Government will never find themselves in the position of having to trade that firm intention for something else and weaken on it. Perhaps my noble friend will find a little time to comment on that point when he comes to wind up.
I turn now to the basic points of these reports and my own unadvised views. The problem, which has been highlighted by other noble Lords, is specifically mentioned in paragraph 49(i) of our report on the price proposals. It is that the proposals do not measure up to the needs of the times. This is extremely sad because the Commission has tried over the years to do better. The noble Lord, Lord Walston, said that agricultural ministers lacked courage, and I would not disagree with him. For whatever reasons, they have spoilt what the Commission has put forward. Now, the Commission itself has not had the guts to put forward a proposal that makes a proper attempt to tackle the problem before it.
The proposals on prices are not stringent enough and the proposals on supply controls are too weak. If you look back to the report on the common agricultural policy which the Select Committee made in 1979—it was the thirty-second report of the 1979–80 Session—your Lordships will find that all the important recommendations in both the supply controls report (which is much more detailed) and the report on price proposals were made four years ago. If only the recommendations of our Select Committee had been taken up by the Commission and endorsed by the agriculture ministers then, we should perhaps have found that the common agricultural policy was
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under control by now. However, this was not done and the surpluses we are faced with now are even worse than the surpluses of four years ago.
In Britain itself we have done very well. At a recent private meeting, my honourable friend Mr. MacGregor—my noble friend Lord Belstead's colleague as a Minister of State at the ministry of food, agriculture and fisheries—said that five years ago the United Kingdom was only between 55 per cent. and 60 per cent. self-sufficient and that today, we are 76 per cent. self-sufficient. I suppose one could argue that, if our recommendations of 1979 had been put into effect, the British, too, would not have developed that self-sufficiency to the same extent. One might also argue that, as members of the Community, perhaps we should not have done so anyhow.
We are now faced with the fact that we need stronger measures. As paragraph 29 of the supply controls report shows, if stronger measures both in quality control and the guaranteed thresholds are applied, there is a serious risk that this could lead to undue hardship for many of the small or otherwise disadvantaged farmers. As the noble Lord, Lord Walston, said, we go on to observe that perhaps this point should be met by controlled national income aids. I may add that it might also be met from the Social Fund, if that were used more widely than it is at the moment, or from both.
It is sad that we have to say that, because in a report that we have made during the last three years we drew attention to the very high level of national income support and indicated that it should be less. But we are up against it; we have too much, we are not controlling it properly, and if we do control it properly the small farmer will not meet that part of Article 39 which requires him to have a comparable income to other people. There seems no other way through but to say that such farmers must be dealt with as a social case from a separate source. If they are dealt with wholly by the Social Fund, then that will be another charge on the budget, which will probably be just as bad as the extra charge that is made for supporting such farmers through the common agricultural policy.
One is forced to the conclusion that controlled national aids supplemented by more rigorous price controls and guaranteed thresholds must be the only way through. It is a sad picture but we have allowed the situation to get out of control and now we have to suffer for it.
8.56 p.m.
Lord Brimelow: My Lords, I was briefly a member of Sub-committee D. I was a member of that sub-committee when it was taking evidence on the problem of supply controls. I had ceased to be a member of it by the time the report was drafted; and I was not a member of that sub-committee when the two other reports we are debating tonight were prepared. As someone who was not concerned in the preparation of any of these three reports, perhaps I may express my respectful appreciation of their clarity and cogency; and also of the clarity and cogency with which the noble Lord, Lord Plowden, introduced them this evening.
Tonight's debate continues and develops the debate we had on 15th March on the future financing of the

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Community. In that debate, I said that the Select Committee report on the future financing of the Community would provide a yardstick for measuring the success of the then-impending meeting of the Community heads of government and of the follow-up action which would be needed if that meeting did not satisfy expectations. The meeting did not satisfy expectations. It did not place a firm limit on the growth of agricultural expenditure. It did not agree on an equitable basis for the long-term financing of the Community. It nearly agreed, but then did not agree, the increase in the Community's own resources. Perhaps expectations were excessive. We ought to have learned by now not to expect much of meetings of the European Council; it is not a good way of doing business.
The three reports which the noble Lord, Lord Plowden, has presented for debate today provide three additional yardsticks for measuring the performance of the Community. By the criteria which they lay down, it seems that the Commission and the Council of Ministers are at long last trying to improve on their past performance. They are having only limited and inadequate success. At this point, it should be emphasised that the criteria laid down in these reports are not based on the selfish interests of the United Kingdom. They stem from a question which relates to the interests and long-term welfare of the Community as a whole; namely, how can we get away from the present irrationalities of the common agricultural policy and move towards farm policies which, from the point of view of the Community as a whole, would be cost-effective and fair?
The Select Committee is not biased against the Community, but it would like to see the farm policies of the Community reformed in ways which would make better economic sense and which, in particular, would reduce and eventually stop the production of unwanted surpluses. I say "unwanted surpluses" for some surpluses will be needed, in part for food aid and in part as an insurance against annual fluctuations in output. The report on supply controls, together with the evidence appended to it, clearly demonstrates the difficulty which would attend a policy of adjusting production to need, even if the political will to make that adjustment were there, but it also demonstrates that the Community could do better in this respect than it has done hitherto.
I agree with the noble Lord, Lord Walston, that it is rather a pity that the report does not go into greater detail as to how quantity controls could be applied to various commodities. It is already clear that this year neither the Commission nor the Council of Agriculture Ministers are minded to go as far or as fast as the Select Committee would wish in the direction of stopping the production of surpluses. The Select Committee's report on the tax on certain oils and fats shows that in this field the Commission is minded to go in quite the wrong direction, and I was glad to hear from the noble Lord the Minister that Her Majesty's Government share the criticisms expressed by the Select Committee.
From the standpoint of economic rationality, the Commission's proposals on oils and fats are ill-conceived and should be resisted. I might add in
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passing that in my opinion the Commission's proposals, if adopted, would have an adverse effect on the interests of those African, Caribbean and Pacific countries associated with the Community under the second Lome Convention, which at present supply some of those oils and fats to the Community. I should deprecate that. The Community has treaty obligations towards those countries which should be respected both in letter and in spirit.
By the yardstick of the Select Committee's proposals on the 1984–85 price proposals, the readiness of the Commission and of the Council of Agriculture Ministers to tackle the problems of unwanted surpluses must be adjudged as totally inadequate. What follows from this? I think it unlikely that 1984 will see the adoption by the Community of reforms which satisfy the Select Committee's criteria of economic rationality or Her Majesty's Government's criteria of equity in contributions to the Community budget. We shall have to keep on pressing for the reform of policies which we regard as irrational and unfair. In doing so we shall no doubt continue to be accused of being anti-Community. The accusation will be unmerited. It is in the long-term interest of the Community that it should become both rational and fair. The yardsticks provided by the Select Committee's reports will enable the House to measure progress.
One point does need to be made. The restriction of farm incomes, as various noble Lords have pointed out, in some areas creates acute social problems. When Sub-committee D was considering the problem of supply controls, the noble Viscount, Lord Brookeborough, drew attention to the fact that in Northern Ireland small dairy farmers have no alternative source of livelihood. At the recent meeting of the European Council the Prime Minister of the Republic of Ireland did his utmost to obtain special treatment for the milk producers of his part of Ireland. A purely financial or economic approach to the problems of the Community is not enough, but the social problem of the marginal farmers and the problems of areas which are completely dependent on dairy herds should not be allowed, as hitherto, to lead to gross distortions of the Community budget. The reform of the common agricultural policy will raise problems of such complexity and difficulty that the process will evidently take many years, even with the most determined approach.
In conclusion, in the debate on the future financing of the Community the noble Lord, Lord Tranmire, who is not here this evening, drew attention to the importance of a very sharp reduction in grain prices. That is an approach which the Court of Auditors itself favours. I need not go over the ground again, but will only say that I agree with what the noble Lord, Lord Tranmire, said on 15th March; and I was encouraged to hear the Minister say this evening that Her Majesty's Government also favour a reduction in grain prices. There is a consumer interest in this as well as an interest by the producers of animals, but the noble Lord the Minister did not say whether Her Majesty's Government favour as sharp a reduction in grain prices as that suggested by the Court of Auditors and the noble Lord, Lord Tranmire.

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On a final point, I agree with the noble Lord, Lord Mottistone, that MCAs were never intended originally to have the effect on the price of manufactured goods, such as biscuits, which we are now observing. It is a departure from the original intention which, if possible, should be put right without delay.
9.8 p.m.
Lord Mackie of Benshie: My Lords, I too should like to start by paying tribute to our chairman, the noble Lord, Lord Plowden. I have been much entertained and delighted by the way that he has handled the bucolic section of his Committee. I am sure, too, that the noble Lord has been much entertained by the behaviour of these strange animals which in his past career he may not have encountered.
I should like to take the reports one by one and say a little about each before attacking the general problem. On oils and fats, I agree entirely with the Committee's conclusion but I totally disagree with its reasons. For example, the Committee agreed with the consumers and stated:
"it is wrong in principle to tax a product solely because it competes in price with an EEC surplus product".
The fact is that not to tax oils and fats is wholly and completely illogical if you accept that we are members of a protectionist society in the EEC. Butter from New Zealand comes here with an enormous levy on it, and it is surely logical to tax the competing product, such as oil for margarine.
I am not against the tax at all on principle but because it is impractical for two reasons. First, it is an example of the distortion caused by fiddling about. The Commission proposes that we tax every item of animal and vegetable fat produced in the Community in order to get around the General Agreement on Tariffs and Trade. That would mean that every little slaughterhouse and every small vegetable oil producer in the country would have to be taxed. That would be far too great an excise problem.
I never know how the word "margarine" is pronounced. I shall pronounce it as I always have done. The other practical reason for agreeing with the conclusion in the report is that without any doubt margarine is eaten much more by the less well-off sections of the community in our country, and it would be a tax on those people. On these practical grounds, I agree that the tax is wrong.
The Committee did an immense amount of work on supply controls. As the chairman said, the Committee contains a large proportion of practical farmers, and the farmers on the Committee were the first to point out that no policy which produced more than the market could bear can work. In other words, eventually the laws of supply and demand have to be taken into account, in spite of the fact that a definite part of the Treaty of Rome was that farmers' incomes should be kept in line with earnings elsewhere in the economy.
The Committee's advice was very much in line with the guidelines later produced by, but not adhered to by, the Commission, that we should have adopted a prudent pricing policy four or five years ago and that farmers should be given definite guidelines on what they should produce and how much they will be paid for it. I agree entirely with the noble Lord, Lord
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Walston, that if you do this over a period no one can complain if farmers are given a reasonable price for the amount of food which we require either for reasonable export or for consumption in the Community.
The report's conclusions are fair to farmers. At paragraph 64(iii) we say:
"A return to a situation in which full play would be given to market forces is rejected as unacceptable on economic, social and political grounds and as contrary to the concept of the CAP".
That is entirely right and fair. Farmers agree that they deserve protection from the vagaries of the market which can hit a mass of small producers much more severely than a larger manufacturing industry.
I should like now to take a short time—I shall not keep the House long—on the general principle of the CAP. We must remember that the EEC was orginally formed of the six countries. We did not go in. We deliberately said we would not go in. My noble friend Lord Walston has already given the situation when they set up the common agricultural policy. But I think it is very necessary for us to realise that this has been one of the most dynamic of the policies set up under the European Economic Community. In our own case, since we joined the Community, in actual fact, the import saving amounts to something like 2½ billion a year at present day prices. That is a great deal of money, and it would take a great deal of exports of anything to make up for it. So I think that we want to watch that we do not throw out the baby with the bath water.
I do think also that we have to look at the question of world prices. Some 10 to 15 years ago Europe did not count in the world trade except as an importer in cereals. Now Europe, the Community, does about a quarter of that trade. You take away a quarter of any trade and you will see a very, very sharp rise in the prices available to the producers. We have to make certain that we remember that. Also, we have to think in terms not only of ourselves but of the French. I have often said that the French are the wiliest people on two feet; but in actual fact the French small farmer is suffering a great deal more than we are because of the much higher inflation and because of the status of their green currency. They are accepting prices which are a good deal lower than ours. It is also a fact our imports do rise and have risen as a result of the policy of unrestricted price increases in the CAP. We want to look at our conduct inside the EEC when we observe or complain about our lack of influence.
However, we have not been very good members of the Community. First, of all, the Labour Party actually rejected our joining until we had held a referendum in this country on whether or not we should remain in the EEC. No one can say that the present Government have been particularly tactful in dealing with our friends and neighbours in the Community. There has been an obsession with our particular position. I note in a lot of people a desire to go back to the happy days when people in this country imported food from starving peasants, such as the Revns from the Argentine and the Okies in Oklahoma, at low, low prices which induced a degree of poverty in those who produced the goods which was not equalled in our industrial cities here.
That attitude still pertains among a lot of people in this country and I think it has had a lot to do with both

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Tory and Labour attitudes to Europe and the bad light in which we are regarded inside Europe. If we had, a different attitude we might have had infinitely more influence and would have been able to produce a sensible pricing policy which would have saved an awful lot of aggravation which is about to strike the farming community here. There is no question at all that we have to have a severe cut in milk prices, and we have got to have a severe cut, one way or another, in cereal prices, otherwise the whole situation is going to blow up in the complete abandonment of any form of co-operation in agriculture in Europe.
1 feel that many logical things have been said by a number of people, including the Milk Marketing Board which thought that a drop in price was the logical thing and then they could go on to market properly and increase the sale of their product. Instead of which, politically, we have to accept that the only thing our partners want or will take will be a quota system and a system of a savage levy on any excess production. This is the only politically acceptable method of proceeding and we should back it. But we have to work out its effects on our own farmers. We have to consider the position of the Irish, both in Ulster and in the Republic and we have also to consider the position of not only the small farmers but many farmers throughout the community. I do not think that it is the small farmer who will suffer most. Perhaps the over-capitalised big farmer will suffer a great deal more than the small farmer who can contain his costs.
It is very important that we look at some of the arguments put forward. I must say that my heart does not bleed for the manufacturers as much as does the heart of the noble Lord, Lord Mottistone, because it is a curious fact that the manufacturing and distribution share of the costs to the consumer has gone up by more than the cost of the raw materials paid to the farmer.
Contrary to the view of my noble kinsman, I do not think that we can look much at deficiency payments all over Europe. Deficiency payments can work, and work well, in a country which imports half its food. But in Europe as a whole, where most of the food is grown at home, I do not think that deficiency payments are possible. I think that they would be far too expensive. However, I hope that the measures applying in this country—that is. the butter subsidy and the beef deficiency payment—will be continued in some form, and I wonder whether the Minister can elaborate a little on the progress in that regard. I appreciate that he earlier said something about it, but perhaps he will say a little more.
Finally, I believe that we must look at what will happen to the countryside. The countryside is enormously important. We have 11 million people unemployed in Europe today—no, I think that the figure is now more than 11 million, but let us take that figure—and 11 million people have left agriculture for the cities. The figures may not entirely coincide, but this is a significant factor, and I do not believe that we can "populate" the countryside with areas of special scientific interest. People are needed, and among them the most important section must be the farmers.
I feel that the cuts that we are envisaging may have a much greater effect than we at present think they will
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have, and like the noble Lord, Lord Walston, I should like the process to be reasonably firm, but I should not like it to be carried out all of a sudden, which might destroy a great many things that are of social and enonomic advantage to this country.
9.23 p.m.
Lord Seebohm: My Lords, since the noble Lord, Lord Plowden, has explained so clearly the extraordinary and drastic situation that we have now reached regarding the CAP. which is completely out of control, 1 do not think that there is any need for me to say anything more about that. But I feel that it is probably just worth pointing out that the CAP has done an enormous amount of good. We now have throughout the whole of the Community an agricultural industry that is highly efficient. We are no longer short of food; we can produce all that we need. Not only do we have a fine agricultural industry, but it has brought along with it prosperity in all the other industries at the same time.
I think that it is true to say that no country has really taken off industrially, or even recovered industrially, without a satisfactory agricultural background. That was certainly true of Japan after the war. The first thing they did was to get their agriculture right, and industrial growth followed it. Going back in history, it is certainly true to say that our Industrial Revolution would never have taken place had we not had an agricultural revolution at the same time. If it had not been for the innovations of such people as Coke of Norfolk and "Turnip" Townsend, I doubt whether our Industrial Revolution could have taken place.
There is no doubt that this is true, but it can be overdone. I think that probably the massive mechanisation that we now see in agriculture could be a little too much. I am surprised in my area of East Anglia to see the enormous quantity of new combines, tractors, and so forth, and to find that the Land Rover seems to have disappeared. Now it is the Range Rover that one sees everywhere. It may be right that the agricultural industry should have mechanised and should have become more efficient. Is it not just possible, however, that it has been overdone? Some farmers have complained to me that if the price of cereals is reduced, they will not be able to pay for the depreciation and maintenance renewals on their machinery. That is all very fine. Many of them have bought their tractors and other equipment on leases. They may not be able to pay their leases. But should they have bought so many in the first place? There is no doubt that much labour, perhaps too much, has left the agricultural industry. It seems to me that, if enough money was spent, it would be possible to produce all the food that is needed in this country. But at what price? Perhaps we should have been satisfied with 60 per cent. production and not gone to 75 per cent., when it becomes an extremely expensive operation.
The social problem of farmers was, I think, mentioned by the noble Lord, Lord Mackie of Benshie. There is no doubt that in the early days, 25 years ago. many millions of people were living in Europe as peasants and small farmers, hill farmers and so forth. It was a social problem that did not exist on the same scale in the United Kingdom. I am glad to

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say that increased prices have meant that their numbers have been reduced fairly painlessly. Some of your Lordships may know the exact figures. I understand something like 60,000 small farmers a month are leaving the industry. The next generation, I suppose, are not prepared to live the same sort of life as their parents and ancestors did. It is perhaps the case therefore that the social problem will not be quite so serious as in the past and that some form of reduced agricultural support will not be quite so painful as it might have been.
There has been much talk about high prices and the fact that they should be much nearer world prices. I should like to utter a word of warning. Few people know what a world price is. You know what it is today. You do not know what it will be, or why the price is what it is. It has nothing to do with the cost of production except over a long period. Take the case, for instance, of sugar, which I have studied for a long time in my financial world. About 60 per cent. of sugar is consumed in the countries where it is produced. The price of sugar in those countries is the affair of those countries alone. Out of the remaining 40 per cent., I believe that 20 per cent. is controlled by various world agreements. The world market for sugar is therefore a small 20 per cent. There has only to be slight over-production one year and the price simply flops. On the other hand, one has seen it treble or quadruple in about three months when there has been a shortage in any one year. When we talk of prices nearer to world prices, we have to be careful.
One result of the existence of the CAP is that surplus food grown in Europe has been put on the world market and has completely upset the American grain market, with the effect that the world price for grain is at times completely unrealistic. There are many difficulties attached to what is the right price. I agree, however, with the report of the sub-committee that at the moment prices are certainly too high.
Most of the other matters to which I wish to refer have already been dealt with. I hope, however, that people realise that price changes and alterations to quotas should be done fairly gradually. There is no such thing as instant farming. If you turn from cows to corn, it cannot be done overnight. You need new types of machinery. You need new skills and quite different programmes. Your capital requirements are different. It has to be done gradually. We have to accept the fact that if we act too briskly in the short term, say, to bring down the price of milk without some compensation, there will be a serious situation created among great numbers of farmers. This problem is possibly well recognised. That is why the programme for reducing the milk surplus by such a small amount compared with what is required could be the right system. In fact, we have to accept that the situation will become worse in the short term, although not worse at the same rate, in order that it may be right in what I believe the Minister stated would be a five-year period. I do not know whether, by that, he meant that for the next two years the situation would still be deteriorating but would improve in the last two or three years. Perhaps the noble Lord will say something about that when he comes to reply.
I do not think I need say any more except to repeat what I said last week in the debate on the future
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financing of the Community. We must not put the cost of the common agricultural policy out of all context as regards total expenditure. As the noble Lord. Lord Cockfield, said, in the context of the budget the expenditure on the CAP is considerable. But if we look at it in the context of the total GNP of the Community, it is not considerable. As I also pointed out, the delays at frontiers and the procedures which have to take place at frontiers cost the Community more than the whole of the CAP. So let us keep the matter in proportion.
If the people who will be negotiating tomorrow on this subject have a sense of proportion and take these points into account, it would be quite ridiculous if some acceptable compromise could not be reached. If they think purely of very short-term national interests, we shall see nothing happening. However, what happens tomorrow is probably so important that it might still, if it goes wrong, jeopardise the whole future of the Community. I just pray to God that tomorrow an agreement will be reached.
9.32 p.m.
Lord Sainsbury: My Lords, the three reports that are being debated are in my opinion a considerable achievement. I am sure that all members of the committee would agree that tributes should be paid to the clerk, to our specialist advisers and, last but not least, to our chairman, who guided so wisely our many discussions. It is inevitable in a debate of this kind, when the majority of the speakers are members of the committee that produced the report, that the tenth speaker on the list is faced with immediately sitting down or covering again in his own words all the points that have been covered by previous speakers. I am sorry to say that I am going to make my speech in spite of the fact that nearly all of the points 1 want to make have already been covered.
It is to be deplored that the Community has shown so little will to action that it has become trapped in a situation in which the agricultural policy has become so out of control that the Community is faced with imminent bankruptcy. This is in spite of repeated warnings from both our own Ministry of Agriculture and the Commission that very high institutional prices could only result in stimulating production to levels greatly in excess of demand. It is lamentable that the urgency of the situation now means that we have to make last-minute, rapid and drastic decisions to curb production. This is at a time when we should be implementing a long-term and well-planned policy.
It is hardly surprising that the farming community is up in arms at the prospect of changing the open-ended nature of price guarantees. Farmers have made (albeit, perhaps, unwisely) investment decisions on the assumption that institutional prices would continue to be as high, if not higher, than in the past. First and foremost, the Community must adopt a longer-term planning and pricing period. Farmers must be given a more predictable environment in which to make their planning decisions. Only then can we expect them to behave as other businesses and to adapt to changing circumstances.
I continue to advocate (as I have consistently done in the past) that the only effective and long-term

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means of controlling the supply is to decrease the level of institutional prices. I wholeheartedly agree with the conclusion of the 1984–85 price proposals report of Sub-Committee D that the Commission's proposals are not stringent enough. As the Grain and Feed Trade Association stated when submitting evidence to the committee:
"To lurch from expedient to expedient at the expense of traders, processors and consumers, in the search for savings, is not an acceptable substitute for a bold policy to reduce prices".
Prior to the summit, the agriculture Ministers showed a little more recognition of the market situation. It is encouraging that they agreed to propose a 1 per cent. price reduction on a range of products. It is particularly vital—and I am aware that this has been said by practically every other speaker—that cereal support prices are brought down, over a period of, say, four years, nearer to the level of prices of cereals traded internationally. In my opinion, there is absolutely no justification for the Commission's proposal to increase the amount of the guarantee threshold from 120·56 million tonnes to 121·32 million tonnes. Cereals are central to all livestock production systems. Feedingstuffs amount to about 50 per cent. of the total input costs of livestock farmers. Cheaper cereal prices should enable them to improve their incomes.
Therefore, the Community must implement a policy to lower institutional prices. It must ensure that this policy is not only sustained, but believed to be sustained, by the farming communities. As yet the EEC has lacked credibility in the eyes of the agricultural population. For the price signals to work effectively, it is imperative that this should be rectified. In my opinion, one must distinguish between the long-term solution and what is feasible in the immediate future.
There is no doubt that it will take time for production levels to be decreased in response to lower institutional prices. This is no better shown than by the rather worrying findings of the December agricultural census. This census indicates that farmers in the United Kingdom have not let the Community crisis affect their plans for increasing output. Production will respond to a decrease in institutional prices, but it will take time and determination on the part of policy-makers. Because of the urgency of the situation, therefore, and the budget crisis, we shall be forced to adopt more immediate actions to curb production. As the committee said in its press release on its latest report, the recent proposal to impose quotas on milk production is certainly:
"A positive step to bringing the surplus under control".
Although the ministers suggested imposing draconian penalties for exceeding the quotas, the basic quota is to be set at 12 million tonnes above current consumption. If and when these measures are imposed, the surpluses will still continue to
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accumulate. Though I advocate a severe price policy, that does not mean I am either unaware of the income needs of farmers or unsympathetic to their point of view; on the contrary, I am so aware. But we cannot reasonably expect the CAP to meet the needs of the less efficient, less viable farms without providing massive benefits and incentives to the more efficient farms. The social problems of communities in rural areas must be dealt with by a social policy. It is equally important that the Community's socio-structural policy should encourage the rationalisation of production structures and not. as at present, increased production. Bearing in mind the need for a social policy, it is fair to expect producers to adapt to changing circumstances given a reasonable amount of time.
In their report on supply controls the committee stated that they inclined to the view that the ability to survive depends less on the size than on the particular circumstances and efficiency of individual producers. The key word here is "efficiency". There are reasons to believe that some farmers—particularly specialist arable farmers working good land—could restrict their capital expenditure and lower production costs. For example, machinery could be made to last a great deal longer.
The Chancellor's decision to abolish 100 per cent. capital allowances is to be welcomed, as it could discourage farmers from making inessential investment. Given that the costs of certain inputs can be lowered, farmers, and essentially cereal farmers, should be able to accept lower prices for their output than at present, while still maintaining an adequate level of income. At whatever level the institutional prices are set, there will always be businesses operating at the margin. It is an unfortunate fact of life that farmers at the margin will inevitably be hurt.
If 1 may now turn briefly to considering the point of view of food manufacturers and consumers, it is high time that their interests were taken into account. These have been consistently neglected both at farm price reviews and in the Commission's general proposals for supporting the markets of agricultural products. You could not find a better illustration of this than in the particularly objectionable proposed tax on oil and fats. As the committee has outlined in its report on this proposed tax, it would not only place an unwarranted burden on industry and consumers but it would also totally fail to achieve its stated objective. Furthermore, it would be extremely aggravating, to say the least, to the international community and to the USA in particular.
The regrettable failure of the summit means, as I understand it, that proposals for changes in the CAP are now going into the melting pot. One can only hope that the Ministers and the heads of state will come to a quick decision so that at least the farming community know where they stand.
9.47 p.m.
Lord Gallacher: My Lords, may I first join in what has now become the heedless hymn of praise to the noble Lord, Lord Plowden. One of the minor compensations of being a member of Sub-Committee D. apart from a ringside seat when farmers disagree among themselves, is that even at a ripe old age there is still a great deal to learn about the art of chairmanship; and we are all indebted to the noble Lord. Lord Plowden, for that. The common agricultural policy is the most difficult aspect of all European Community affairs and yet, as has already been pointed out. it is basic to the European Community. Finn Gundelach, the late Commissioner for Agriculture, said that without the CAP there would not have been the free movement for manufactured goods throughout the Community and, without the free movement of manufactured goods, there would have been no European Community in the first place. For these reasons Mr. Gundelach said that he would fight to eliminate structural surpluses because they would destroy the CAP. This constituted a very succinct defence of the CAP as such, yet it is ironic that divergence of green rates and the use of monetary compensation amounts to correct these have resulted in impediments to the movements of foodstuffs throughout member states.
Common agricultural policy mechanisms are so complex that neither consumers nor farmers understand them. This itself is a recipe for mistrust. The common agricultural policy is at the heart of the Community and is enshrined in the Treaty of Rome. Britain had no part in drafting the treaty but is bound by it. A new Messina would, at least, have let Britain in on the ground floor. The basic objectives of the common agricultural policy are no different from those agricultural policies followed in Britain since state marketing boards were first established in the 1930s. Managed commodity markets give a fair deal to producers and consumers. Managing 10 markets, and maybe 12, is by any standards a daunting task.
Some arguments for the common agricultural policy are now less potent: for example, security of supply in the era of ballistic missiles. Even without the present Community financial crisis, the compelling need for change exists. Industrial recession, with widespread and continuing unemployment in all member states, make the cost of the CAP on present budget resources unjustifiable. The problem is how to change so that less is produced at lower prices, and especially in the atmosphere of haggling—which is a Community norm—and to do so without financial consequences for farmers which will undo what the common agricultural policy has undoubtedly achieved.
The Select Committee report on supply controls deals in depth with three problem commodities, but we must not forget wine, olive oil and tobacco. The Sub-Committee's conclusions are followed through in comments on 1984–85 farm price proposals. The Committee's view that prices and related measures for 1984–85, proposed by the Commission, fail to match the requirements of the situation is timely, but the agriculture Ministers have still to resolve most of the Commission's proposals.
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I have no wish to traverse ground already covered by earlier speakers but I should like to make a few comments in the context of Britain's situation. The dangers of failing to deal with excessive and persistent surpluses is well illustrated by the revival of a proposal for introducing a tax on certain oils and fats. The Commission would disclaim that this is aimed at reducing the butter surpluses by making margarine and other oil-based foods more expensive. Yet that is the effect of the proposal, although the revenue will undoubtedly help the budget.
It is a measure of the failure to deal with surplus milk that oils and fats are to be made dearer. It is to be hoped that Britain will continue to reject this proposal throughout the course of the negotiations currently taking place. But more important would be to reject it because of the precedent-creating nature of the tax and the possibility of reprisals by other countries. When value added tax was first introduced in Britain before we joined the European Community, we did not levy value added tax on food. That was sensible: we are already at a disadvantage in the Community because of the distance many of our exporters are from main Community markets. Any needless increase in costs was to be avoided. The same goes for coal, gas and electricity. Also, in Britain it is traditional not to tax food.
It would be regressive in Britain if, having defeated the proposal for a tax on oils and fats, we were to make food generally or energy specifically subject to value added tax, even at a low rate, while seeking to justify this by reference to what happens in certain other member states. A further aspect of this matter is the beneficial effect on prices, and it is to be hoped on consumption, which would flow from the use of price mechanisms to reduce structural surpluses. The high cost of cereals is an obvious example of this.
Because Britain does not contribute to the Community milk surplus overall, we are inclined to disregard our slow but steady decline in liquid milk sales, particularly on the doorstep. In my view, United Kingdom consumers are right to query the present and proposed increased price of milk on the doorstep. Home delivery has been of enormous help to farmers and consumers alike; and the effect on overall consumption, if door-to-door deliveries became uneconomic because of falling sales, would be serious, especially for farmers.
Is it not time that the Milk Marketing Board and the processors looked at the distributive cost to consumers of what seems to be needless and unreal competition as regards doorstep delivery? Can the industry afford three milkmen in most urban streets, each trying to maintain his rounds by selling a range of unrelated goods—sometimes not even food—with milk just delivered rather than sold? Solutions are not easily discovered but a voluntary zoning scheme may produce economies to prevent the further decline in consumption and so preserve what is now a unique British system, to the benefit of consumers, fanners and processors.
There is now some strong criticism of the effects of certain farming methods in Britain, although these have resulted in good yields and reasonable prices. If, as a result of major reform of the CAP, pressure for

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yields is reduced, consumers must be consulted as to the effect on them of alternative policies for agriculture, and especially land use. If low output and low input is encouraged, as my noble friend Lord John-Mackie suggested, how will farmers' incomes be maintained? Consumers who advocate reform of the CAP do so in the belief that modest success will result in lower prices and enhanced consumption, yet still give a reasonable living to farmers. Consumers have not been asked about alternatives.
Your Lordships' Select Committee consults consumers on food prices and conservationists on farm methods. In the interests of the balanced view, both of these important groups should confer, and without too much delay, as decision time is at hand. The Select Committee has boldly attempted making the language and mechanics of operating the CAP easier to understand. This leads to a conclusion favouring the adaption of green rates and dismantling MCAs. provided the time scale is longer than the Commission proposes and within a banding arrangement to which member states would be asked to commit themselves. I note the progress report on this aspect which has been given by the noble Lord the Minister.
It is a personal view, but if Britain really wishes to see the end of green rates and the unfair distortions they create for the CAP, we would be in better overall control of this tricky exercise as a member of the European Monetary System rather than as at present. Your Lordships have recently debated the EMS, but it is germane to the Motion before us. Both the present and previous governments have sought to justify not joining EMS, on the basis that the time was not right. This applied when the Labour Administration practised exchange control, and still applies, under this Government, when these controls have long gone. Will the time ever be right?
As with metrication, we have half done the job. So, too, with membership of the European Community. The CAP would work better if surpluses were decisively reduced. It will never function well, or be seen to do so, if green rates persist and are used, as now, by member states like trump cards. Reform of the CAP is
the key to the revitalisation of the European Community, and a revitalised Community is essential for us all.
9.58 p.m.
Baroness Seear: My Lords, at this time of the night, hemmed in as I am on all sides by working farmers. I do not intend to deal with any of the technical agricultural proposals in this report. Instead, I should like briefly to turn to some of the political aspects which are raised by the points made in the report. In the first place, it is extremely refreshing to see the emphasis placed upon the consumer point of view in relation to agriculture and food prices. The Treaty of Rome requires the CAP to operate so as to give a reasonable level of prices to consumers. And there are—though sometimes one would not think so—more consumers in the European Community than there are farmers. Therefore, reference to an adjustment in favour of consumers is long overdue.
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It is also very valuable that the report distinguishes between the economic and social aspects of the CAP. As my noble friend Lord Mackie of Benshie has mentioned, we should not forget that the CAP has in many ways, particularly in social terms, been very successful. It has brought about a reorganisation of farming in the Community which, particularly in the poorer regions of the Community, has enabled agricul-ture to revive and therefore to provide a living for the many people in those areas who would otherwise have become part of the industrial proletariat, which is doing very badly indeed at the present time in the industrial cities.
In this respect it has been a great success, but, as the committee points out, it is high time that the social aspects were dealt with quite separately. It is worth stressing that if the social aspects—the relief of continuing hardship in sections of the agricultural community which would stand to suffer if the recommendations were adopted—are to receive more attention, we do need more money in the Social Fund. That money may have to come out of the money that at present goes into the CAP.
It would be a switch of resources, although in fact some of the same people may benefit. They may benefit under a different heading, as it were, from that under which they benefit at the present time. This would mean that agriculturists in the poorer parts of the Community would have their standards maintained without having to boost to a quite unreasonable height the standards of the successful farmers. This has always been one of the basic problems: that in order to maintain a reasonable standard in central and south-west France, in certain parts of Germany and in Ireland, the richer farmers in the more prosperous areas have made a very substantial killing from the CAP. That distinction is most welcome and long overdue.
The reports are both valuable and timely—and they are as timely as they are valuable. They are valuable in particular because, at last, with great clarity and logic, and in a form that is very difficult to refute, the committee has made it quite clear that the difficult problems of the CAP will not go away. For far too long, people have run away from these problems. But Lord Plowden and his committee have recognised that problems of this kind do not deal with themselves but must be taken by the neck; that one has to do the drastic things that need to be done and say the unpalatable things which need to be said. That is what this report has done. It does not mince words; it says that prices must be reduced. That, surely, is the message. If one takes that message on board and acts on it, we shall begin to see the end of the most grievous abuses, as they are now, of the CAP.
Because of the clarity and irrefutable logic of this report, it has been long-awaited and is very acceptable. But it is also timely (and I cannot congratulate the committee on this, as it is a matter of luck) because it is published at a time when these problems can no longer be ducked. These reports are surely most useful to the Government. They will no doubt be read in Brussels with great attention, because their recommendations are so hard to deny. Today, at last, with bankruptcy, like hanging, greatly concentrating

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the mind, the difficulties we have ducked for so long have to be faced, and the problems have to be answered. Time is at last running out, and we all know it.
With the discussions going on at the present time the Government are surely in a strong position to press that the kind of action recommended in these reports be implemented. But because we are not in good standing in Europe, and because we have made ourselves so singularly unpopular (and this is not the moment to go into all that again), we are not as well placed as we ought to be to press for the logic of these recommendations. As the noble Lord, Lord Belstead, suggested, we are going part of the way; but part of the way is not enough. I should like very much to follow the previous speaker—the noble Lord, Lord Gallacher—in emphasising the importance of our attitude towards the MCAs and the EMS.
Our defence of the MCAs in the past has been seen as part of our determination to protect our own particular national interest regardless of how other members of the Community may see it. If, while these negotiations are going on, we make it clear that we recognise that the MCAs have to be phased out—it cannot be done overnight—that it is necessary to do it and that we are determined to go along that route, we shall be showing ourselves for once as being good Europeans, which so rarely do we show ourselves to be. That will strengthen our hand to argue for the reforms that this committee has recommended.
I also underline what the noble Lord, Lord Gallacher, said, and what is said in the report, that if we are to do this we will, again, strengthen our hands in the argument and establish ourselves as good Europeans, negotiating in good faith with a real belief in the important aspects of the Community, which get so overlooked in the discussion of detail. We should say that now, at last, we are prepared to take part in the exchange rate mechanism of the EMS and so to be full practising members of the Community. Only as such can we expect that our recommendations, however sound and however logical, will be taken notice of in the negotiations in Brussels.
10.7 p.m.
Lord Belstead: My Lords, as the noble Baroness, Lady Seear, said, these reports from the committee chaired by the noble Lord, Lord Plowden, are timely because they bring the reader face to face with reality; although whether some readers will find them any more palatable than the advice which has been given by the political leaders of this country that lasting solutions need to be found to the problems of Europe remains still to be seen.
However, it has also been a valuable debate. I very readily accept that. Indeed, with many very distinguished speakers in your Lordships' House this evening, the Government will do well to listen carefully to what has been said. If I may say so, I was very interested to hear the succinct speech of the noble Lord, Lord Bancroft. It was the first occasion I have had the pleasure of hearing the noble Lord and I respond to what he said about the EMS, and to what
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the noble Baroness, Lady Seear, said, by simply saying that both the noble Lord and the noble Baroness know the Government's view that we must be sure that conditions are right before we join. I am afraid that on that point I cannot be more forthcoming this evening.
I want to come immediately to the first important point. The noble Lord, Lord Walston. said that he felt that the Government and, indeed, myself in my speech, had been complacent about the problems which face us. I am sorry if I gave that impression and I should like to assure the noble Lord, and the House, that there is no complacency—and certainly none could derive from looking at the financial situation.
My advice is that the Community is faced on the actual proposals which are put forward now for the Agriculture Council with a potential overspend on the FEOGA guarantee budget of some 2 billion ECUs—that is to say, after the price fixing settlement, if it goes through, on the present proposals. Although no doubt some of this could be made up through management economies, or even to some extent by deferring some expenditure to a later year, I think that figure of 2,000 million ECUs is enough to show that there certainly should be, and can be, no complacency. Moreover, if I may say so to the noble Lord, who is always, I know, very fair, there is no complacency because there can be none on political grounds. Every year the Government of this country, of whatever party, has argued for lower prices in the Agriculture Council. In 1982, of course, we were even voted down on a scandalous 10 per cent. price rise despite our attempt to use the veto. The truth is that there will be little restraint in the Agriculture Council while two member states only are net contributors. It is an old saying that it is easy to spend other peoples' money. Unfortunately, it is all too true.
I wonder whether I might come from the general to the particular and just say a few brief words about our proportionate share of the total milk quota and about allocations to individual producers. When the Commission originally proposed the 1981 base year for quota allocation, we were concerned because it referred not just to the basis for splitting the total production quantity among member states but to the basis for passing national quota back to individual farmers as a result.
The noble Lords, Lord Plowden and Lord John-Mackie, both referred to what in shorthand I would call hard cases. We felt that this would result from the proposal as we had understood it because of the way in which individual producers' circumstances had changed, certainly in some cases, in recent years. It is agreed now, however, that where production conditions have changed substantially since 1981, allocation by the member state to individuals or dairies can be done on the basis of 1983 production or deliveries suitably adjusted to fit into the overall national quota.
If 1 may just say a word more about this, with this major objection to the 1981 base year removed, we were prepared to accept it for the limited basis of splitting the national quota. The effect of 1981 compared to 1983 on the total United Kingdom quantity for milk delivered to dairies is very small. Our

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share is changed by only 0.2 per cent. But, if I may say so, much more important is the fact that, as part of the general package, we have secured the coverage of direct sales off farms as well as deliveries to dairies. These account for 20 per cent. of deliveries in Italy, 16 per cent. in Belgium and nearly 5 per cent. in France, compared with less than 2 per cent. in the United Kingdom. That demonstrates how essential it is to see this milk package as a whole rather than fixing on particular aspects in isolation.
If I may just answer a question or two more about milk, as I understood him, the noble Lord. Lord Walston. rejected the price mechanism as a solution to the problems of the agricultural policy. I am bound to say that the Government do not go along with him on that thesis and nor, as I understood it, did the noble Lord. Lord Sainsbury. Although we quite take the point that there is the great difficulty about the thing working in time, we feel that none the less action on prices is the surest mechanism of giving producers the right signal.
However, the noble Lord, Lord Walston, commended quotas. It is very difficult to agree a fair quota scheme; but I accept that we have quotas now for sugar, and let us hope that we have one firmly for milk, too. What we need to do now is to gain experience of the milk quota before we go further in that direction. The noble Lord, Lord Seebohm, asked me about the small print of the agreement. As it stands, the agreement is for the milk quota and levy to last for five years but to be subject to review after three years and prices to continue to be set on an annual basis.
My noble friend Lord Mottistone and the noble Lord, Lord Brimelow, both talked about the rather complicated area of Non-Annex 2 MCAs. They both spoke about the de minimis rules in this area which, for example, apply to biscuits. The Government are actively pressing for a reduction in the level of these rules so as to benefit our exporters. Also, as I know your Lordships will be well aware, the United Kingdom's positive MCA has dropped from 7·6 per cent. to 3·7 per cent. in recent weeks. This will help exporters. Of course if our MCA continues to go down further, that will be a greater incentive.
The noble Lord, Lord Mackie of Benshie, asked a direct question about the butter subsidy. I think this is fairly familiar ground. It is simply that the reduction in the intervention price on butter within the general price fees applying to milk, together with the proposed reduction in the United Kingdom butter subsidy will broadly have an effect of offsetting the one against the other. As the noble Lord, Lord Sainsbury, will be delighted to hear—although the noble Lord knows it perfectly well—the consumer is protected so far as the price of butter is concerned. But when we come to butter for manufacture, which my noble friend Lord Mottistone asked me about, here the Commission is proposing, in the present price fixing, to extend to other foodstuffs the existing subsidy on pastry products and ice cream. We support the extension to specified products, in particular to sugar confectionery, where we believe there is scope for a significant recovery in the United Kingdom utilisation of butter.
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May I make one last point on butter? The noble Lord, Lord John-Mackie, asked in effect why is it that New Zealand exports to us in butter when it has also been an importer? My information is that New Zealand, not surprisingly, is not a regular importer of butter. In 1982, New Zealand conducted an ad hoc transaction, buying a quantity of United States butter to stop it damaging the world market, and in fact only a small part of that was actually consumed in New Zealand.
The proposals now under discussion in Brussels represent, in some ways, a more realistic response to the problems of the CAP than the original proposals of the Commission. They will, however, present our own farmers with some very real difficulties. I was therefore heartened by the noble Lord, Lord Seebohm's recognition of the fundamental importance of agriculture to the economy and the well being of this country. I wonder whether I might end by just simply saying one thing. I think—and it is not a political point—that we should be thankful at the moment from a farming point of view, and the general stability of the rural areas, that we are going through quite a difficult period with a low and, at the moment, falling inflation rate. I think this will help United Kingdom farmers to be in a stronger position compared with many other member states of the Community, and I think that we may be thankful for this over the next year or two.
It is important, too, that the agricultural industry should know that it has got the support of the Government at the time when the Community must bring the excessive increases in the common agricultural policy to a halt. We are determined to play our part in this task.
10.18 p.m.
Lord Plowden: My Lords, may I begin by thanking noble Lords for the tribute they have paid to the reports which we have been debating this afternoon, and in particular to thank the members of Sub-Committee D for the undeserved but very nice things they have said about my chairmanship. I hope they will continue to treat me with the indulgence that they have done hitherto, and continue to educate me in the problems of the agricultural community.
As the Minister has said, we have had a good debate, and I think the most encouraging thing about it is that all of us, with different emphasis, are agreed on the direction in which we should go. That is, that the CAP must be reformed, and in doing that, a necessary part of that is lower prices. But again we recognise that this will throw up social problems. As paragraph 40 of the report on prices says, direct income support, partly paid for by the Community, is a necessary part of doing that. The social and regional funds are a mechanism through which that probably should be done, but owing to the voracious appetite of the CAP, there is insufficient money in those funds to carry out the kind of social amelioration that we should like. I think all of us are agreed that the increasing size of the surpluses must be brought to an end.
I would end by saying that I hope the noble Lord. Lord Belstead, will persuade his colleagues not to agree

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to an increase in own resources to the community until we have firm undertakings that there will be a reform of the CAP.

Museums and Galleries: Funding
10.21 p.m.
Lord Strabolgi Lord Strabolgi rose to ask Her Majesty's Government whether they will provide some financial assistance to help the Ashmolean Museum Oxford, the Fitzwilliam Museum Cambridge, the Whitworth Art Gallery Manchester, and the Dulwich Picture Gallery, in view of the difficulties being experienced by these institutions in protecting and displaying their collections of national importance.
The noble Lord said: My Lords, I beg to ask the Question standing in my name on the Order Paper. I welcome the opportunity to ask the Minister, the noble Earl, Lord Gowrie, whose presence here we welcome, whether he can be a little more forthcoming than he has been on the two previous occasions when I have raised the matter. The three university museums, the Whitworth, the Ashmolean, and the Fitzwilliam, are all dependent on university funds, while the Dulwich Picture Gallery, as we know, is part of Dulwich College.
None receives any central grant, either direct from Government, or through the Arts Council, although all four institutions have collections of national importance. The three university museums have become victims of the cuts on universities imposed by the Government. The Whitworth Art Gallery has already had a Government cut of 13 per cent., and, in consequence, has lost three posts. If the GMC grant were to be stopped, then the gallery's exhibition programme would also be very substantially reduced.
The gallery has a fine exhibitions record. It has shown, for example, master drawings from Leningrad, and, incidentally, I had the honour to open that exhibition in 1974 on behalf of the Government. It has also shown seventeenth century drawings from Brussels and an exhibition of medieval and early Renaissance treasures in the North-West (to name a few) and David Hockney's first public show was organised at the Whitworth. Should the GMC funding be removed, the Whitworth would no longer be able to mount such exhibitions, which have attracted great numbers of visitors, and it would also have to close its conservation department and its travelling exhibition service. The Whitworth contains the greatest collection of English watercolours outside the British Museum and the V & A. All that will be put at risk.
The Fitzwilliam at Cambridge faces similar problems. The museum is closed on Mondays, and on the other days the whole of the museum is never open at the one time, as it cannot afford to employ sufficient warding staff. This is extremely inconvenient and irritating for visitors, in particular those from outside Cambridge who go specially to the museum, only to find it closed. The national standard for adequate security is not less than one attendant per gallery. The standard at the Fitzwilliam is two galleries to be
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covered by one attendant, which is the lowest acceptable from a security point of view.
At Oxford, the city and county funds are apparently entirely committed to the county museum service, and the Ashmolean is dependent on UGC funds, and it, too, has suffered from the Government cuts. In consequence, the Ashmolean has had to close on Mondays for the first time in its 300 year-old history. At least two assistant keeper posts have had to go. The staff strength is now less than it was in 1970 although public expectations and interest have increased. If the present cuts continue, the museum may have to be closed entirely to the general public except by special appointment. This would surely be a tragedy, as the Ashmolean has a collection of national importance which I am glad is now to be further enriched by the generous bequest of a painting by Bellini by the late Lord Clark, as announced two days ago.
The problems facing the Dulwich Picture Gallery and its important collection—indeed, one of the most important collections in Britain—are similar. I am informed that the future of this enchanting gallery is seriously at risk. Already, some galleries have had to be closed and pictures removed entirely from public view as the trustees say that they can no longer be responsible for their safety following the recent theft of an outstanding Rembrandt portrait. All these paintings at Dulwich were donated for the public's benefit in earlier centuries. Surely, the least that we can do as a nation is to look after them properly for the benefit of future generations. I hope that this is something the Government will consider seriously.
An appeal has been launched, and here I should declare an interest, although not a pecuniary one. I am a honorary member of the appeal council. This appeal may help in the immediate future but it is not enough in the long term. What is to be done? As I have suggested in the Question on the Order Paper, the time has surely come when the Government will have to provide some financial assistance to these four institutions; otherwise, we shall be failing in our duty towards these collections. The sums are not large. There would be no objection, I am sure, if the Government reserved the right to appoint some of the trustees. What is wanted is the will to do something.
The noble Earl is able to act in a positive way when he wants to. He saved the Theatre Museum project when all seemed lost, and the other day he gave £50,000 to the Courtauld Appeal and a similar sum of £50,000 to the Soane Museum for the warding staff. That is very much to be welcomed. Actually, that is the sum that Dulwich needs for its own security. Last but not least, he played some part in saving Calke Abbey for the nation. We are grateful for these constructive and positive actions. I urge him also to go into the whole problem of the university museums and Dulwich, to do something about the situation and to treat this matter with equal urgency and seriousness.
10.28 p.m.
Baroness Faithfull: My Lords, I must declare an interest in that I love the Ashmolean Museum. I know the Fitzwilliam Museum at Cambridge, but as I do not live at Cambridge I do not inhabit it in the same way as I do the Ashmolean Museum. In this day and age, when there is so much change, surely, in every sector

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of life, there must be flexibility in our ways of dealing with, keeping and respecting our old institutions. As the noble Lord, Lord Strabolgi, to whom we are deeply grateful for initiating this debate, has said, the Ashmolean has been in existence for 300 years. Oxford University, through its statutes, has acknowledged and does acknowledge a responsibility for the Ashmolean Museum, for its education and its primary research. However, times have greatly changed. For instance, Oxford has a population of 110,000 and covers 13 square miles. I am informed by the Thames Tourist Board that last year there were 1,200,000 visitors to Oxford. Of that number it is impossible to say exactly how many visited the Ashmolean, but 1 am told that a very large proportion did so.
Speaking from a very practical point of view, it takes money to keep a place in good order for visitors from all over the world. Oxford University has a great sense of responsibility towards the Ashmolean, but although, as the noble Lord, Lord Strabolgi, has said, a grant comes to Oxford University from the University Grants Committee, no special grant is allocated for the museum. Therefore, Oxford University is in some real difficulty. Is it to allocate money to the museum at the expense of the students? Or is it to keep its students at the university? These are changing times and, like the noble Lord, Lord Strabolgi, I would implore the noble Earl to take account of our changing times and our changing way of life, so that we can look to the Ashmolean and expect it to have some help from outside the university.
We have had the reorganisation of local government, and that means that the Ashmolean stands in the middle of Oxford county. The county, too, is mindful of the museum, but at the same time interest is now much wider spread with very much less money. It could be said that perhaps the education authorities who use the museum for the purposes of educating the children in schools both in the city and in the county should make a contribution, but they, too, are in financial difficulties. I know that when valuable pictures or articles now come up for sale it is very difficult for the museum to be able to keep up and to purchase anything of value because of the running costs of the museum.
Surely we have a responsibility to the future to guard that which our predecessors have so wonderfully and so marvellously set up. I would beg of the noble Earl to think carefully about how we are to maintain and look after the heritage that has been left to us so that we in our turn may leave to those of the future the heritage from which we have benefited and which our children will have looked to us to keep and maintain.
10.34 p.m.
Lord Donaldson of Kingsbridge: My Lords, I should like to follow the noble Baroness, Lady Faithfull. Normally, as a Cambridge man, I should have taken the Fitzwilliam as my example, but as I knew that the noble Lord, Lord Strabolgi, was going to do so, I want to make a few comments about the Ashmolean.
It is worth beginning by saying that the plight of the university museums in general has been recognised as miserable for a very large number of years. In 1977 the
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Standing Commission on Museums and Galleries reported very gloomily, saying that nothing had produced:
"the hoped-for results and the situation of these museums is progressively deteriorating to the detriment not only of the academic activities of the universities but also of the interests of the public generally".
This was re-echoed by the Drew Report, which came on to my desk just before the 1979 general election—in fact in November 1978—and in the time remaining we, I think perhaps excusably, took no action beyond asking for comments on the report. I cannot prove that, had we been elected, we should have done more than the present Government have done, which is precisely nothing. But 1 flatter myself—perhaps optimistically— that I should have picked out of the Drew recommendations the urgent need to do something about these fine and starved university museums. Five years have gone by, but it is not too late, and I reinforce the appeal of the noble Lord, Lord Strabolgi, to the noble Earl not to wait any longer.
I am speaking of the large university museums. There are 50 or 60 university museums altogether, but the problem diminishes with size, and it is when one gets huge museums, like the ones we are speaking about, with world-famous collections, that the expenses become very difficult for universities to deal with. The fundamental difficulty is that whoever they apply to for help always has an alibi. As the noble Lord said, the Ashmolean applied to the local authority which said that it was already giving all it could to the county museum service—in itself very valuable and important—and suggested that the museum should apply to the national Exchequer. But the national Exchequer and its Ministers, though freely admitting the international importance of the Ashmolean, have finally said that, international or not, basically it has to be regarded as an Oxford responsibility.
Each university has a notional allowance in the UGC block grant for the museum's needs, but it is not quantified and it is not earmarked. As the noble Baroness said, when the university is pressed on its primary duties of teaching and research, obviously it is matters of this sort which get squeezed, and the unqualified notional allowance becomes more imaginary than notional.
In the good times in the 1970s, when the national museums expanded well and some even doubled their staffs, the university museums, having no access to central funding, failed to expand equally and, in fact, the Ashmolean today has one employee fewer than it had in 1970. As I think the noble Lord said, it has had to cut two and a half curatorial posts.
University museums have two functions. This point arises from both speeches that we have heard so far, but has not been stated entirely clearly, so there is no harm in repeating it. Their primary raison d'etre is to be available to the university as a tool in its teaching and research functions. It is not denied that the university should be responsible for the cost of this. But a museum like the Ashmolean houses a collection of national and international importance and must be available not only to scholars, but also to the ordinary public, nationally, internationally and of course locally. Locally its contribution to schools at primary and secondary levels is of growing importance, as

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anyone who goes there during school hours can see from the throngs of school parties going through the corridors. The cost of these non-university public functions is estimated at about £250,000 or, say, one-fifth of the total cost of the museum's running costs.
I want to fix on this as something which it would be reasonable to try to persuade the noble Earl to do something about. Clearly, it would not be enough in itself, but it would be of the very greatest assistance if some way could be found which does not involve the local authority, which in the end comes from the centre and which could deal with the non-university public functions of these museums. Without that, we have a deterioration which is really getting quite serious. Certainly the collections that I know best—the Fitzwilliam and the Ashmolean—are of world importance; in many cases they are equal to and in many more cases are second only to the British Museum, which, after all, is properly funded. Let us make no mistake about this; although there may be a certain amount of grumbling from the national museums, they are properly run. It is the ones that are not that give rise to such a serious situation.
I want to suggest to the Minister in all seriousness that he might get together with his very able and hard-working staff and come up with a proposition. I worked with their parents, as it were, some time ago, and I know that if you give them the task they will come up with an answer. Something really has to be done. It is not an incredibly expensive thing, and it would not be a complete solution, but it would stop the deterioration which is going on now (and the deterioration in morale) and, as the noble Baroness, Lady Faithfull, said, the inability to increase the collection in any particular direction.
The Minister is now in the middle of new and pressing deliberations about funding museums and galleries whose financial future is threatened by the proposals for the dissolution of the GLC and the metropolitan counties. As the noble Earl will have to pick up a good deal out of this, I want to suggest that, while he is at the job he should pick up a bit more, including these university museums and the Dulwich Gallery for the small marginal amounts which the public funding requires. I could not speak more seriously about this. Some of the things which one asks government to do are too difficult. This is manageable, and I hope very much that the noble Earl the Minister will feel he can admit that, without promising exactly what he will do, he will do something.
10.42 p.m.
Lord Wolfenden: My Lords, may I add my thanks to those which have already been expressed to the noble Lord, Lord Strabolgi, for giving us the opportunity to discuss these matters this evening? They may seem parochial and trivial by comparison with the affairs of the European Community, but to many people (perhaps more than is generally recognised) they represent an element without which our lives would be very much less worth living. Secondly, I must declare two interests. I am chairman of the body which is responsible for the Dulwich Picture Gallery, and I am also president of the nationwide British Association of Friends of Museums.
May I deal first with the smaller of my two
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"canvasses", if that is not an inappropriate metaphor? I will not take the time of the House with an exposition of the constitutional complications of Alleyn's College of God's Gift. Briefly and broadly stated, the financial management of Edward Alleyn's original benefaction and subsequent additions thereto is in the hands of a body known as the estates governors. A separate body—though there is cross-representation—the school governors, have responsibility for Dulwich College, Alleyn's School and the Picture Gallery, as well as for other institutions which do not concern us this evening. There is, of course, a specialist committee for the Picture Gallery, the chairman of which, Dr. Greenhill, until lately Director of the National Maritime Museum at Greenwich, has brought to our affairs his wide and deep experience. The estates governors, then, hold the purse strings.
As potential beneficiaries, the Picture Gallery is in competition with two distinguished independent schools—and the parents of the boys and girls in them do not welcome increases in their fees term by term. The only income to the Picture Gallery from public funds is an annual grant of some £6,000 from the Greater London Council. This is indeed very welcome, and we are most grateful for it. But, necessarily, it is on the basis of annual renewal (or discontinuance) and that fact does not make for security in forward planning. (I have often wondered, exactly what backward planning is like, but I must not take your Lordships' time by pursuing that hare.)
The gallery's other income is from entrance fees and sales of catalogues; and this is regrettably small because of the geographical location, outside London and off the tourist circuit. Out of this minute annual income we have to provide for the conservation, display and protection of an important collection in a delightful building. I must not slide into a commercial, but I would simply ask your Lordships to pay us a visit, as I know has been done by the noble Earl who is to reply. I am confident that you would agree that we are worth more than £6,000 a year of public money.
We do what we can to help ourselves. As has been mentioned, we have just launched an appeal to help to establish a capital fund. Is there any hope that some support for it might come from central Government, as I understand is happening to a certain institute of fine art in London? The major nightmare, of course, is security. We have had some grim experiences over recent years, and we have spent more than we can afford in trying to preserve for the present and the future the treasures that have come to us from the past. But this is an expensive business, and we sometimes feel that it is rather odd that this should all fall on one private trust. The temptation, of course, is to sell a picture every now and then to provide the cash which is currently needed to preserve the rest. But there are those among us who would resist to the death this impoverishment of the future of the gallery and of its visitors.
We deserve some little help from public funds. Especially pressing is this appeal at the present time, because we never know when the GLC, our one public benefactor, will disappear and our own annual grant with it. We are not talking about billions of pounds. Perhaps that is part of the trouble—that the sum of money involved is so small that it seems not worth

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worrying about. But a matter of a few thousands of pounds a year is a matter of life and death to one of the most attractive and rewarding picture galleries anywhere in Britain, which also makes, I may add, a significant contribution to the teaching and appreciation of art in two considerable schools.
Now I can take off my domestic Dulwich hat and speak very briefly under the banner of the British Association of Friends of Museums. I can be brief, because I am sure that many of your Lordships belong to the body of friends associated with your own local museum or gallery. I simply want to call attention to the probable future plight of some of the most well-known of them. I suppose that the Whitworth is one of the most notable of the 160 members of the British Association of Friends—lively, enterprising, popular and of the highest standards of conservation, security and display. What will happen to the finances when the Greater Manchester Council disappears? I understand that there is imminent danger of the loss of four posts, with all that that means in neglected conservation and restricted exhibition space to the deprivation of both the university and the general public, with whom the Whitworth is deservedly popular.
It is over-optimistic, surely, to expect that the separate borough and district councils will be able to assume the responsibilities which the metropolitan council now carries. In the years since 1974, it has made great strides in the improvement and provision of museum and gallery facilities for the good of the population of its region, and is proud to have done so. The Association of Friends of Museums put in a great deal of voluntary work in conservation, running the shop, guiding parties, organising events of all kinds, fund raising for particular purchases and so on. But they cannot be expected to shoulder the gallery's total annual budget. That is the responsibility of the whole community—a responsibility which must be carried by government, national, regional or local.
I venture to hope that the noble Earl will be able to give some encouragement to the thousands of volunteers who give of their time and skills in these activities, and to the millions of our fellow citizens who benefit from their labours.
10.50 p.m.
Lord Walston: My Lords, I apologise for detaining your Lordships yet longer, but I promise not to keep you for very many minutes. I intervene for three reasons: two of them are purely personal and one general. The personal ones are, first, that I have lived within six miles of the Fitzwilliam Museum all my life and therefore can claim to have some knowledge of it, and certainly enormous respect for it. The second is that 101 years ago my father became the second director of that museum, and so I have a strong family connection with it.
My general reason for intervening is because while I yield to no one in my admiration for our great national museums in the capital, I believe it is of enormous importance that beautiful things should be available for people to see who do not live within striking distance of the capital, and who live in the more benighted areas of East Anglia or the Thames Valley,
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or the even more benighted areas of the Midlands or the North of England.
The universities in particular, especially with the happy spread of universities over the past 30 or 40 years, have a huge part to play in helping this objective and in making it possible for people who normally would not go to a museum and who, if they came to London, would be doing all sorts of other things such as shopping and going to Madame Tussauds, and so on, but who will go in to their local town or local university town and will spend happy hours—their children more particularly—looking at lovely things which otherwise they would never see.
We are wonderfully endowed in this country with a large number of such places, all of high quality, and some of the highest quality. It surely is, if not a crime, a sheer waste of possibilities that those lovely things, which are available for people to see and which they wish to see, cannot be seen because of the reasons which have been so graphically described to us.
I do hope that the noble Earl, in company with all those who have spoken—and I appreciate full well his enormous problems and the calls on the restricted funds at his disposal—will be persuaded by the arguments that we have listened to this evening. I hope that he will be able to do something, however modest, not only to help the museums which have been specifically mentioned but the other provincial and local museums throughout the country which have played, and will continue to play, such a great role in the cultural part of this country.
Lord Montagu of Beaulieu: My Lords, I intervene only briefly, and I apologise first to the noble Lord, Lord Strabolgi, for not being in my place to hear his opening remarks. I speak on behalf of the Museums Association to express their deep concern about the plight of these four museums and indeed other university museums. They appreciate the dilemma that faces the vice-chancellors and others who are determining the spending of university funds, when they have a terrible choice to make between a new academic post or a new research post and perhaps the founding of a museum post. What is of no doubt at all is that they are of far wider interest than just to the citizens where they are situated. There is international interest in them.
The noble Lord, Lord Walston, talked about Dulwich being off the tourist track, which is correct. But at least they make great efforts. One could hardly say that Oxford and Cambridge are off the tourist track. The Fitzwilliam is a great attraction; but, strangely, the City of Cambridge makes practically no contribution to that museum. And Oxford does not do very much better for the Ashmolean, our oldest museum. It is quite right that the Whitworth makes splendid efforts to raise funds. They all do try. But the question which should be asked is whether in the long term universities should be in the museum business at all. University museums have grown up almost by chance. If they are to remain in being and if they are there and very fine, the question is: how they should be funded? If they are so popular, I wonder whether they should try more aggressively to use the system, so well used by the Metropolitan Museum in New York, of a kind of voluntary, compulsory charge for everybody

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other than students. I can assure your Lordships that the many overseas tourists who visit these museums would not resent such a charge.
I have made this brief speech tonight in order to express the concern of the Museums Association and their staff about this particular problem. I shall look forward to the noble Earl's reply.
10.57 p.m.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, I thank the noble Lord, Lord Strabolgi, for raising this issue. It is an uncomfortable issue and it is one which 1 am extremely exercised about and worried by. I am glad to say that I have a little comfort tonight, but it is pretty small. The financial problems of university museums are well known to me, as they were well-known to my distinguished predecessor, the noble Lord, Lord Donaldson of Kingsbridge. I very much admired the candour with which he confessed that he had not been able to do much about it.
The difficulty is that these museums are integral parts of their parent universities. Therefore they are on the books of those universities. It is easy to say that instead they should be on the books of central government or the Arts Minister. However, as the noble Lord, Lord Donaldson of Kingsbridge, knows very well, Arts Ministers are peculiar animals. They are Ministers with clients—specific, existing, itemised, earmarked clients for whom they negotiate funds. I have been assured by my colleagues in the Government that I am not in this post to make cuts. But equally I am, like all my ministerial colleagues, liable to have to operate under considerable constraints in growth. It would be very rash indeed of any Arts Minister to seek to take on new clients when he has difficulty funding his existing ones.
The position is not quite so bleak for these great universities as that sounds, because the universities themselves are in receipt of very considerable sums of public money through the University Grants Committee. It is all very well for the noble Lord, Lord Strabolgi, to talk about cuts. Universities are subject, as we all are, to financial constraints, but the overall costs of these museums are not comparatively large and both universities have very well-off friends, not only in this country but all over the world. I sympathise immensely with their plight. I hope that they can find a solution by a combination of UGC funds and other sources. I am delighted to do all that I can to come in behind them and help in some of the ways that have been suggested.
I recognise, with the noble Lord, Lord Donaldson of Kingsbridge, that the Drew Report recommended that certain major provincial museums, including some university museums, should be designated to receive direct central Government funding. Again the difficulty here, as I have said, is mainly a matter of cost. Although the Drew recommendations have never been fully costed, my advice is that at present price levels they would cost several tens of millions of pounds.
So, while we might try to proceed in the directions recommended by Drew, we should certainly have to proceed with caution.
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I can be a little more forthcoming, and perhaps offer a little more comfort, in respect of the Whitworth Art Gallery in Manchester. The future funding of the Whitworth Art Gallery will be looked at in the light of the evidence received during the consultation period on the proposals for the reorganisation of local government. This gallery is in a somewhat peculiar position as it is a university institution receiving a pro-portion of its funding from the metropolitan county council. In 1983–84, this represented about 21 per cent. of its funds; just under £70,000. The gallery was not singled out in the Government's consultation proposals for central funding because it is primarily a university rather than a local authority institution. However I am wholly confident that the Whitworth Art Gallery will not suffer following reorganisation.
Lord Walston: My Lords, if the noble Earl the Minister will allow me, may I take up that rather encouraging remark and ask whether the same will apply in respect of Glasgow, for instance, which I understand is facing similar problems?
The Earl of Gowrie: My Lords, Glasgow is not subject to the exercise in local government reorganisation. The problem with the Whitworth is that it is a university museum funded by a threatened tier of local government. I am confident that the threat posed to it through that particular policy can be relieved.
In the case of the Dulwich Picture Gallery, the noble Lord, Lord Wolfenden. reminded me that I had visited this gallery. Indeed, I have visited it many times because it is one of my favourite museums in the world. It is a private institution forming part of a foundation. It is therefore largely self-financing and has to rely very much on its own energy in raising funds. The foundation has, I understand, recently launched a public appeal for half a million pounds to pay for badly-needed additional security measures and repairs, and to establish an endowment for the gallery. I do hope that the gallery's prestige and the efforts of its friends will ensure that the appeal is a success. I will certainly add my voice to that appeal and beaver away in the gallery's interests, in respect of sponsors, whenever I can.
It is true that the gallery receives some small grants from the GLC, but they have not been a significant proportion of its income. Again, I am confident that any shortfall at present levels can be made good.
The Museums and Galleries Commission's terms of reference and legal status do not at present enable it to pay recurrent grants directly to individual museums and galleries. However, I will be considering in the light of the consultation on local government reorganisation and other developments, including this evening's debate, whether the commission's role could or should be extended in this or other ways—so long as we recognise that all the great museums of this country (even those which are not in current funding difficulties of the kind we have heard about tonight) have very considerable capital funding difficulties. They have been subject to squeezes on that front by successive governments, and some of the bills now coming in are very large.

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I am, of course, aware of the immense public interest in and pressure for the retention of great works of art in this country. I am constantly urged to make funds available so that fewer and fewer will go abroad. I sometimes wryly wish that that same pressure could come from the public to display, retain and conserve the myriad great works of art which we already have.
I hope that I have been able to give a crumb of comfort to the noble Lord, Lord Strabolgi. I do welcome his interest—which I share—and the way in which he has drawn attention to the very real plight of these museums. I think it is absolutely right of him to say that the cities of Oxford and Cambridge benefit from the two museums within their walls and I hope that they, too, will feel some greater involvement with those great centres of excellence, which are of course such notable tourist attractions. Indeed, I thought that my noble friends Lady Faithfull and Lord Montagu of Beaulieu hinted heavily in that direction and I hope their hints will be heard in local government quarters as well of course as in my own.

British Railways Bill
Reported from the Unopposed Bill Committee with amendments.
Standard Chartered Bank Bill
Reported from the Unopposed Bill Committee with amendments.

Lotteries (Amendment) Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at five minutes past eleven o'clock.