Lords Sitting of 15 May 1984

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Bishop of Southwark.
Viscount Falkland—Sat first in Parliament after the death of this father.

Pit Closures and Job Creation
Lord Jacques: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they are taking to establish alternative employment in those mining communities where it is proposed to close down mines.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, I wish to make it clear that so far as current proposed closures are concerned there will be no compulsory redundancies. Any miner wishing to continue working as a miner will be able to do so. Therefore, typically, in a community where it is proposed to close a mine a number of miners will take advantage of the generous early retirement scheme and others will transfer to another pit.
However, some of the mining areas concerned are ones where there are already general employment problems. For those areas there is available the wide range of special employment and training measures operated by the Manpower Services Commission, and, according to the area concerned, regional or national schemes to encourage new or extended industrial investment.
Lord Jacques: My Lords, is the Minister aware that underlying the objection to the closure of pits is the fear that local communities which are well knit together will be left without the means of livelihood? The steel board did a great deal to promote alternative employment when it closed steel works. What has the coal board done?
The Earl of Avon: My Lords, as I tried to explain in my original reply, the situation is not as the noble Lord describes. The miners can either have redundancy terms or jobs in alternative pits. I explained the matter to the noble Lord, Lord Diamond, the other day when I pointed out the difference between the steel scheme and that of the National Coal Board. First, I made the point that so far the National Coal Board has been able to avoid compulsory redundancies. Secondly, I said that any coal industry equivalent of BSC would have to operate many more locations and, therefore, would probably be less effective.
Lord Rochester: My Lords, would not the promise of some special measures to provide alternative

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employment in these mining communities be a means by which the Government might help to break the logjam without intervening in the current dispute itself?
The Earl of Avon: My Lords, yesterday in the other place my right honourable friend pointed out that any manpower reductions would be obtained by miners' voluntary decisions; and pit closures and their timings is, of course, a matter for the coal board.
Lord Leatherland: My Lords, can the Minister tell us how many tonnes of Polish coal have been imported into this country so far this month?
The Earl of Avon: No, my Lords, I do not have figures for that.
Lord Nugent of Guildford: My Lords, can my noble friend tell us what is the perspective of this problem? What has been the average number of pit closures over the past 10 years?
The Earl of Avon: My Lords, as my noble friend is aware, at the moment the average is no greater than it has previously been. In fact, during the 1960s it was vastly higher. Some 300 pits were closed during the terms of office of the Socialist Party.
Lord Stoddart of Swindon: My Lords, does not the noble Earl understand that this whole issue is about communities and about jobs which will be lost forever? Is the noble Earl aware that it is no good the Government imagining that the miners will be satisfied with redundancy payments, however high, because the loss of jobs will destroy their communities, which is what the dispute is all about? When will the Government cease behaving like some corporate Pontius Pilate and stop washing their hands of the whole affair?
The Earl of Avon: My Lords, the Government are not washing their hands of the whole affair. The Government have invested in the coal industry to a degree of which the noble Lord is well aware. In addition, as was stated in the other place yesterday, the Government intend to continue to invest in the coal industry to the tune of some £3 billion over the next three years. We believe in the mining industry; we want to ensure that it is profitable and that the miners themselves have a future, which we believe they have.
The Earl of Onslow: My Lords, is it not true that if we make sure that mining jobs are kept open in uneconomic pits, then wages will be kept down in the other mining areas? Furthermore, is it not just as sensible to say, as the noble Lord opposite has said, that we will keep in jobs the flint-makers, for musket barrels, and the fletchers, for arrows, because otherwise we shall destroy local communities? We have to create real wealth and not subsidise old and dying industries.
The Earl of Avon: My Lords, I take issue with my noble friend on his last sentence. This is not a dying industry. This is an industry into which the

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Government are putting a lot of money and which they believe can be profitable. The stoppage of the pit closures planned by the National Coal Board will not help to make this profitable.
Lord Somers: My Lords, is not one of the difficulties that miners have not only their jobs but their homes and their families on the spot? Are any measures being taken to provide for them as well?
The Earl of Avon: My Lords, as I said in my initial reply, where mining areas already have general employment problems there are a wide range of benefits such as the special employment and training measures operated by the Manpower Services Commission.
Lord Dean of Beswick: My Lords, is the noble Minister not aware that in areas such as Greater Manchester and Wigan and the Leigh area, where pits have previously closed, unemployment has increased further under this Government and they have almost become no-hope areas? The question is about alternative employment. What are the Government going to do about this?
The Earl of Avon: My Lords, besides those things I mentioned in my original reply, the European Coal and Steel Community provides cheap loan finance for investment projects which promote the interests of the coal and steel industries and for "reconversion" projects providing new employment for redundant coal and steel workers. Over the last five years over £182 million has been made available for investment finance under this scheme.
Lord Orr-Ewing: My Lords, would my noble friend consider doing an investigation to see what happened to the miners when 44 mines were closed every year during the last Labour Government? Have they been redeployed in new industries? If there is any doubt, and if we could help as a Government, would my noble friend set up an arrangement whereby retraining is possible so that every possible facility could be offered and every goodwill shown to redeploy people who want retraining in the area where they live?
The Earl of Avon: My Lords, indeed I have not got the statistics which my noble friend suggests, or asks for. I shall see whether they could be forthcoming. I take note of his points.
Lord Underhill: My Lords, would the Minister agree that we do not want to make a party political issue of this, as the last question seemed to imply? In that period there was full employment, which is rather different from what we have today. Does the noble Earl appreciate—while I know that he is a kindly individual—that his replies seem somewhat insensitive to the points being raised, that it is whole communities that are being destroyed? It is not the loss of just the mines, but of all the other businesses in the area. The Government cannot leave this to profit and loss and the market factor.
The Earl of Avon: My Lords, I appreciate what the noble Lord is saying. What I am equally trying to say

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in this quite sensitive time is that there are opportunities for the miners in pit closures to have alternative jobs. Outside that there are also redundancy terms available to them. Noble Lords are shaking their heads. If we only could get the message across, there is a position for any miner who wants to work in a mine so to do.
Lord Diamond: My Lords, the noble Earl was good enough to refer to the Question of mine which he answered a little earlier. May I ask him whether he recollects that I found that Answer totally unsatisfactory and insensitive? Can he recollect that I drew his attention to the fact that we were not talking about compulsory retirement involving money; we were talking about communites, villages, wives, and livelihoods? May I ask him once more what possible argument is there against the coal board's showing goodwill and good sense in trying to set up an organisation parallel to that which the steel board set up and which proved so successful, to demonstrate the Government's real, sincere interest in looking after displaced miners?
The Earl of Avon: My Lords, as I said to the noble Lord on that occasion—and I have the Hansard in front of me—there are three reasons in particular why it is not similar to British Steel. I also said to him—I think on that occasion, although I have not quickly read it to make sure that I did—that this has been discussed, but at the moment because of the differences between the two sets of circumstances it is not thought to be appropriate.
Lord Blyton: My Lords, in my lifetime I have seen uneconomic pits become economic after they have got through geological difficulties. Can the Minister tell me, with Durham and Northumberland with 20 per cent. unemployed, where our miners will get jobs in the Tyneside conurbations?
The Earl of Avon: My Lords, if I say that the disparity between the price of coal coming from an economic pit and an uneconomic one is £30 as against over £70, perhaps the need for the closures will be evident. I did not quite follow the rest of the noble Lord's question.
Lord Blyton: My Lords, can the Minister tell me where miners in Northumberland and Durham will get a job when pits close, with 20 per cent. unemployment in the Tyneside conurbations?
The Earl of Avon: My Lords, I am grateful to the noble Lord for repeating that because it enables me to say once again that all the miners who want to go on working have been found a job in other mines.
Lord Whaddon: My Lords, bearing in mind the concern expressed in so many parts of this House on helping the communities when mines close down, does the noble Earl recall the great success of COSIRA in helping difficult rural areas, and the suggestion that has been made several times of extending that to difficult urban areas under the so-called COSURBA? Will he again consider the possibility of doing this?
The Earl of Avon: My Lords, I think I have mentioned the various types of assistance which are available, such as special development area status, development area status and intermediate area status. All these things are indeed being considered.
Lord Whaddon: My Lords, does the Minister realise that these do not help the promotional aspects of the COSIRA-type organisation, which is most necessary to employ the funds that are available?
The Earl of Avon: My Lords, I note what the noble Lord has said, and I shall certainly consider it.

Nurses' Pay: Review Body Reports
2.51 p.m.
Lord Molloy: 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 the Pay Review Body for Nurses and Midwives and Professions Allied to Medicine has delivered its report to the Prime Minister and whether a statement on that report will be published.
The Lord President of the Council (Viscount Whitelaw): My right honourable friend the Prime Minister has received the reports and is considering them. An announcement will be made in due course on these and the other review body reports, but this is not likely before the Whitsun Recess.
Lord Molloy: My Lords, is the noble Viscount aware that that reply will cause grave disappointment to all those employed in the National Health Service, particularly Britain's nurses? They are so poorly paid and are hoping for something to restore their morale, which has dropped so low under this Government. Is he further aware that an 18 year-old trainee police constable earns £6,700 a year while an equivalent trainee nurse earns £3,600 a year? Right throughout the nursing profession there is great hope that when the review body reports the value of the British nurse will be realised. On the other hand, there is grave apprehension that in view of the fact that the Prime Minister is not forthcoming what will be announced will be to their detriment and not to their encouragement.
Viscount Whitelaw: My Lords, I can only say that I do not think the noble Lord has any reason for disappointment or disillusionment. He has to wait the result of the report and when the Government announce it we shall see how we get on.
Lord Ennals: My Lords, why is there this delay? Surely it is true that the Prime Minister set up this new review body to take the question of nurses' pay out of cross-party, or any other type of, controversy. It was a review body set up to determine. If the report has been received, can the noble Viscount explain why, first, it has not been published and, secondly, the answer has not yet been given by the Prime Minister?
Viscount Whitelaw: Yes, my Lords; for the very simple reason that this is not the only review body that has produced a report for my right honourable friend the Prime Minister. Surely she and the Government are entitled to look at all these reports together and consider their interaction on each other.
Lord Molloy: My Lords, is the noble Viscount aware that the numerous general secretaries of the various organisations involved, who are part and parcel of our British democratic structure, are beginning to lose their patience? They have never had to wait so long. With particular reference to our nurses, is he further aware that the effects of the cuts—the reduction in wards, the reduction in beds—are causing great stress among nurses? There is a feeling in the profession that we are not taking enough cognisance of nurses care as we are, quite properly, of patient care. Is he aware that in so far as these cuts are increasing discipline, they are causing stress on nurses, and is it not disgraceful that they are willing to endure this because they will in no way take industrial action? They are of the opinion that the British Prime Minister is taking advantage of them.
Viscount Whitelaw: My Lords, the first answer to the noble Lord is that the Prime Minister is not taking advantage of them—quite the reverse. Some of the reasons—many of which I do not necessarily endorse—that the noble Lord puts forward were major factors in the decision to offer a review body status to nurses and the professions allied to medicine. That was done last year. The review body report is being considered and it is reasonable for me to ask the noble Lord to have the patience to see what attitude the Government will take to it when it is announced.
Lord Molloy: My Lords, on behalf of the profession, may I ask the noble Viscount very seriously which Whitsun he had in mind when he said that the report will not be published before Whitsun?
Viscount Whitelaw: This Whitsun, my Lords.
Lord Glenamara: My Lords, when the Government make their announcement on this award, will they bear in mind a comparable body of workers—the teachers—and will they try to hold the balance between the two? The teachers have no review body and the Government have refused them arbitration. Will the Government try to hold a fair balance between the nurses and the teachers?
Viscount Whitelaw: My Lords. I am very grateful to the noble Lord, not least because he has actually endorsed something that I said. I am always grateful when that happens. I said that the Government needed time to consider the ways in which the recommendations of these review bodies and other bodies would interact. I am grateful to the noble Lord for the powerful and emphatic support that he has given to my point of view.

Housing Repairs and Improvements
2.55 p.m.
Baroness Fisher of Rednal: 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 there has been any progress on the problem of growing disrepair revealed by the English House Condition Survey.
Lord Skelmersdale: My Lords, unprecedented efforts have been made in the field of housing improvement and repair during the last three years. Repairs grants have been made much more widely available and have been given in large numbers. Expenditure on improvement and repairs grants has been running at record levels.
Baroness Fisher of Rednal: My Lords, can we expect any further resources from either urban programmes or housing improvement programmes to extend the technique of enveloping, which involves the complete restoration of private properties in urban areas? It is a technique pioneered in Birmingham which has done such a great deal to overcome the urban decay in central areas of large cities.
Lord Skelmersdale: My Lords, like my noble friend the Leader of the House, 1 find it nice to have a fan on the Opposition Benches. I, too, am an extremely keen supporter of the envelope schemes to which the noble Baroness has referred. On the other part of her question, in 1984–85 grants will again be financed from within individual authorities' housing improvement programme allocations and authorities' housing investment needs have been taken into account in determining those allocations.
Lord Graham of Edmonton: My Lords, the Question refers to "growing disrepair". Can the Minister tell the House what steps are taken by the Government to ascertain and to monitor the effect on a council's ability to maintain its properties, arising from the cut-backs in rate support grant and also the allocations to councils in the housing investment programmes?
Lord Skelmersdale: Yes, my Lords, of course we monitor the condition of the housing stock of local authorities. We take account of those sums of money that they themselves feel they will require in setting the grant-related expenditure and the HIP programmes to which I have referred.
Baroness Fisher of Rednal: My Lords, will the noble Lord really accept that there have been serious cutbacks in the housing programmes and that it is not the simple answers that he is giving us this afternoon that are being felt in those areas that are suffering the greatest deprivation, where people are still living in very bad slum properties? Will the Government really once again consider the investment policy, so that people living in these bad conditions can in future have opportunities for perhaps a much more contented life?
Lord Skelmersdale: My Lords, my answer to the noble Lord, Lord Graham of Edmonton, was not intended to be a facile answer in any sense of the word. I am sorry that the noble Baroness should have taken it that way. But it is always for the local authority, within the resources, both self-generated and allocated to them through the support structures that I referred to earlier, to make the decisions for people in their areas. If it becomes apparent to the Government and to my honourable friend the Minister for Housing and Construction that those resources are not sufficient, then we shall do something about it.
Lord Underhill: My Lords, is the Minister aware that the National Federation of Building Trade Employers has expressed great concern about this matter? He says that it is up to the local authorities to make the decision; but it is a difficult decision to make, with cuts in financial allocations.
Lord Skelmersdale: My Lords, any business, whether it is the business of running a vast local authority or whether it is the business of running a private limited company, has to operate within its financial structure and strictures. Within those each business has to set its priorities for itself. If, as in this case, a local authority decides that it should spend money on, for example, sheltered housing rather than on removing homeless people from the hotels—an issue which is so much criticised in this House—that really is a matter for them.

System-built Houses: Budget Proposals
2.59 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 what is the expected financial effect of the Budget proposals on people who have purchased system-built houses from local authorities, and on local authorities who have these types of houses remaining in their stock.
Lord Skelmersdale: My Lords, the Chancellor's Budget speech included the proposal that from 1st June structural alterations to buildings will be liable to value added tax at the standard rate of 15 per cent. Private owners of system-built houses will be affected by the change if they have neither completed, nor paid for, their structural alterations by 1st June. Local authorities with such houses in their stock are able to reclaim VAT on any expenditure they may incur on those houses, and so will not be affected.
Lord Dean of Beswick: My Lords, I am grateful to the noble Lord the Minister for that Answer. Is the noble Lord the Minister not aware however that I have information from Leeds City Council which shows that in the case of people who have purchased Airey houses from Leeds City Council—and of course this follows on a national basis—the imposition of VAT on the structural measures needed to bring those houses to standard will increase the cost of remedial treatment by £2,000 per house? May I ask whether, on that basis,

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the noble Lord will go back to the senior Government Minister involved in this to ask him to reconsider this matter because of the adverse effect that this will have on the people who have bought these council houses and on the people who live in them?
Lord Skelmersdale: My Lords, the houses which are now in the private sector—some 1,800—to which the noble Lord has referred, are eligible for grant under the Airey scheme. I am able to tell the House that the Government are prepared to consider whether the eligible expense limits under the Airey scheme on which these grants are based should be adjusted in the light of any detailed representations which demonstrate a need for increases to cover the cost of repair to Airey houses.
Lord Taylor of Blackburn: My Lords, would the Minister give the same concession to charities that he is giving to local government?
Lord Skelmersdale: My Lords, what we are doing is considering further action on representations made to us. This is not a matter for local government or for charities. From wherever the representations come, they will be considered.
Lord Graham of Edmonton: My Lords, does not my noble friend's Question reinforce the need for the Government always to have in mind absolute equity between the private sector and the public sector in housing matters? I believe that the noble Lord indicated something there. Can he assure the House that when housing improvement programmes are made there is a built-in allowance to take into account matters like this which come up without prior warning during the current year?
Lord Skelmersdale: My Lords, the noble Lord has taken the opportunity to go rather further than my previous answers indicated. What I have said is that the Government will give careful consideration to fully thought out representations which come to them. I am afraid that I cannot stand at this Dispatch Box this afternoon and guarantee the outcome of that consideration.
Lord Ennals: My Lords, further to the point made by the noble Lord the Minister on the question of the payment of 15 per cent. VAT by charities for services that they give to social service departments and other organisations, is he not aware that ever since this 15 per cent. was introduced, the charities and a very large number of Members of both Houses of Parliament from all parties have been pressing successive Chancel-lors, and that they have been thinking about this constantly but nothing has been done? Can the noble Lord give the House any assurance at all that these charities will not just continue to suffer as a result of the decision taken by the Chancellor of the Exchequer?
Lord Skelmersdale: My Lords, as I understood it, the pressure from the charities which has been taken up both in your Lordships' House and in another place has been on the zero rating of charities, so far as value

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added tax is concerned, for all purposes. What we are now considering is the added imposition of 15 per cent. VAT on improvements and structural alterations—as oposed to the repair and maintenance which has always attracted VAT. As I have said, if the charities put up a reasoned case, we will consider it.
Lord Dean of Beswick: My Lords, may I press the noble Lord the Minister a little further? Is he aware of the figures given during the debate in another place by the honourable Member for Manchester Central on the Second Reading of the Housing Defects Bill, which showed the appalling sum of money which Manchester would have to find to correct structural defects in its housing stock? I think that it is in excess of £ 10 million. Is the Minister saying that that money, on his statement today, will not be liable to VAT? If that is what he is saying, it will be well accepted; if not, it will be deplored.
Lord Skelmersdale: My Lords, if the structural alterations to which the noble Lord referred are on the local authority's own stock, they will be able to get this refunded through the normal VAT mechanism.
Viscount Whitelaw: My Lords, I feel that it would be in accordance with all your Lordships' wishes if I were to express to one of my distinguished predecessors, the noble Lord, Lord Peart, our very great welcome on his return to the House after the very unhappy experience he has had.

Dinner
Lord Denham: My Lords, it may be for the convenience of the House if I announce that dinner will be available at the usual time of 7.30 this evening.

Road Traffic Regulation Bill [H.L.]
3.5 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to move that the House do now resolve itself into Committee (on recommitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on recommitment).—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on recommitment) accordingly.
[The EARL OF LISTOWEL in the Chair.]
The Deputy Chairman of Committees (The Earl of Listowel): Amendment No. 1, Clause 142. The Lord Chancellor.
The Lord Chancellor: There are two amendments in my name—
Lord Elwyn-Jones: Will the noble and learned Lord give way for a moment? We must deal with the earlier clauses before we can deal with this amendment.
The Lord Chancellor: I thought that the amendment had been called. I am sorry.
The Deputy Chairman of Committees: My apologies.
Clauses 1 to 141 agreed to.
Clause 142 [General interpretation of Act]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 1:
Page 127, leave out lines 30 to 33 and insert (" "road" means any length of highway or of any other road to which the public has access, and includes bridges over which a road passes;").
The noble and learned Lord said: I am very grateful to my noble and learned predecessor for keeping us on the straight and narrow path. As I was beginning to say at an inappropriate moment, this amendment is really a drafting amendment. The last limb of the present definition of the word "road" gives effect to Recommendation No. 17 in the report of the Scottish Law Commission on this Bill. When the Bill was considered by the Joint Committee on 4th April, it was suggested that the last limb, so expressed, could perhaps be more clearly expressed. The chairman asked the draftsman to see whether an improvement could be made. This amendment is the result. The existing form of words might be said to be too verbose, given that the idea behind those words is a very simple one; namely, that the word "road" is meant to mean any length of road and not just the whole of a road. I hope that your Lordships will agree that the proposed amendment is more straightforward. I should like to thank the Joint Committee for having helped in bringing about this improvement to the Bill. I beg to move.
Lord Elwyn-Jones: May I congratulate the noble and learned Lord on now finding the road clear?
On Question, amendment agreed to.
The Deputy Chairman of Committees: Amendment No. 2—the Lord Chancellor.
The Lord Chancellor: I am told that this is a simple amendment to correct—
Lord Elwyn-Jones: More clauses!
Clause 142, as amended, agreed to.
Clauses 143 and 144 agreed to.
Clause 145 [Commencement and temporary provisions]:
The Lord Chancellor moved Amendment No. 2The Lord Chancellor moved Amendment No. 2:
Page 129, line 6, leave out ("exercisable") and insert ("made").
The Lord Chancellor: I am afraid that we have been hurrying too fast. This amendment is simply made to correct a clerical error. The word "made" should have been used in subsection (2) instead of the word "exercisable". I beg to move.
On Question, amendment agreed to.
Clause 145, as amended, agreed to.
Remaining clauses agreed to.
Schedules agreed to.
House resumed: Bill reported with the amendments.

Agriculture (Amendment) Bill
Lord Renton: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged
Moved, That the order of commitment be discharged.—(Lord Renton.)
On Question, Motion agreed to.

Trade Union Bill
3.12 p.m.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, I beg to move that this Bill be now read a second time. It is a very welcome duty for me to rise this afternoon to move the Second Reading of the Bill. As the House will know, I have had the great privilege of being associated with every stage of the Government's programme of industrial relations reform since we came to office in 1979. I certainly regard this programme of reform as among the most significant of the Government's achievements and likely to be among the most enduring. I should certainly not myself like to campaign on a platform of repeals of this particular set of reforms.
In 1980, as Minister of State at the Department of Employment, I put before the House the Employment Bill 1980, which was our first reforming measure. In 1982, despite having moved from the relatively calm waters of the Department of Employment to the more turbulent Northern Irish currents, I was able to play a part in helping my noble friend Lord Ferrers, who we much miss on this side of the House, to pilot through the Employment Bill 1982. In March last year I was allowed to respond to a debate initiated by my noble friend Lord Boyd-Carpenter on the Green Paper on trade union democracy. We are most grateful for the insights of the noble Lord in regard to this legislation. That Green Paper was of course the forerunner of the Bill before us today.
I think it is right to remind the House of this earlier legislation because the Bill now before your Lordships represents the logical next step in the programme of reform which we have been following since 1979.
In 1980 we were concerned with the most pressing needs for reform in industrial relations law: to provide that basic degree of protection for those working in closed shops, which the legislation of the previous Goverment had stripped away; to make secondary picketing unlawful; and to provide a remedy to those whose businesses were put at risk by other forms of indiscriminate and unjustifiable secondary action.
In 1982, following the extensive consultations on our Green Paper on trade union immunities, we thought that the time was right to tackle some of the more deep-rooted problems in our system of industrial relations. So we introduced into the law the concept that all closed shops—not just those being introduced for the first time—should be put to the elementary test of a secret ballot. We tackled the related "union labour

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only" practices, which were not only an attack on individual freedom, but also a major barrier to competition and therefore to economic success and to jobs. And, perhaps most importantly of all, we ended the anomaly which had existed virtually uninterrupted since 1906 under which trade unions had almost unlimited immunity against civil proceedings when they and their agents acted unlawfully.
This is not the occasion for a searching inquiry into the effects of this previous legislation. But I think one thing is absolutely clear. Those who in 1980 and 1982 told us that none of this could ever work, that it was simply not possible to legislate on industrial relations without creating confrontation, have long since packed their bags and gone. The remedies that the law has provided have manifestly worked in a succession of cases, of which the Stockport Messenger was the most recent and notable. The expansion of the closed shop has been halted, and its frontiers are gradually being rolled back. In short, we have seen a real change for the better through the creation of a more balanced framework of industrial relations law.
Against that background, I believe that this Trade Union Bill complements what has gone previously. The 1980 and 1982 Acts were concerned with the impact of trade unions on others; on employers, on non-union members, on society at large. This Bill, by contrast, is concerned with the impact trade unions have on the lives of their own members.
When we debated the Green Paper just over a year ago, I pointed out that the absence of legislative safeguards in respect of unions' internal affairs is quite remarkable when compared with the position of other bodies; for example, companies. It is now well over 100 years since the first Companies Act was passed in 1862. Since then the company as a legal entity has been closely controlled and its purpose and behaviour defined and regulated in a succession of statutes. Your Lordships may have noticed that, only last week, the cover—the jaunty cover—of the Economist was devoted to the concept of policing the City.
These legislative safeguards have always been seen as a quid pro quo for the concept, for the privilege, if you like, of limited liability. Before Parliament intervened trading with limited liability was illegal at common law and it was considered a fraud on potential creditors. By contrast, what has been the position of trade unions? Like companies, they have an undoubted great privilege conferred on them by statute—the privilege of immunity against civil proceedings when they are acting in contemplation or furtherance of a trade dispute. Again, before Parliament intervened, most trade union action was illegal—a criminal conspiracy in restraint of trade. But. as with companies and the concept of limited liability, it came to be accepted that if trade unions were to survive and play their valuable role in society, they must have some protection against actions at common law. And yet there is a great difference. While Parliament has imposed on companies a huge volume of statutory regulations in return for the privilege of limited liability, there has been virtually no attempt to regulate the running of trade unions in return for their great privilege of immunity against actions in tort.

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We are told often enough that this is all right and proper, that trade unions are essentially private, voluntary bodies which should be allowed to run their own affairs free from outside interference. But how does that square with common reality? For thousands upon thousands of trade union members working in closed shops there is nothing whatsoever that is voluntary' about their membership. More important still is the plain truth that the activities of trade unions and the decisions which their leaders take on behalf of their members can reach in to every home in the land.
In practice, trade unions enjoy vast monopoly-power—power which enables them to decide literally, in the case of industries such as printing, who will work and who will not: power to force up the price of labour, and hence of goods and jobs, without any regard to what the market will bear; power to compel individuals to become members against their will; and power to affect the supply of basic services.
If that power had always been used with restraint, if trade unions were truly democratic institutions, fully responsive to the needs and wishes of their members, the absence of legal safeguards would be easier to understand and possibly to defend. But that is far from the case. The trade union movement has consistently failed to take the chances offered to democratise itself. And now that the issue of trade union democracy has been forced into the open by this Bill, trade union leaders have sought to defend some of their more archaic practices in ways which are reminiscent of the opposition to the Parliamentary Reform Bills of the last century. The first Duke of Wellington (my noble friend, I could say) would feel at home in their ranks and comforted by the sound of their arguments. I have little doubt that today we shall once again hear from noble Lords opposite the seductive philosophy of benign neglect. On this issue, if on no other, the Labour Party is, as I have often said, the party of legislative abstention, market forces and deeply-entrenched conservative attitudes.
Trade union leaders have tried to defend the fact that many of them are elected by votes cast, often by a show of hands, at branch meetings held away from the workplace, despite all the evidence that branch meetings on average are attended by only a tiny proportion of their members. They have sought to defend the block vote in elections despite all the evidence that its effect is to distort voting intentions and to hide the fact that again only a tiny proportion of their members actually cast a vote.
They have continued to defend the refusal of many unions to ballot their members in any way before calling them out on strike—and, as your Lordships will be aware, that is a strong issue at the present time. Also, some unions have continued to use the coercive power of the closed shop to force their members to strike, as we saw at the time of the notorious health service day of action in 1982 and in the British Rail disputes of the same year.
It cannot even be said that the unsatisfactory nature of these practices has only just been identified. On the contrary, it has been apparent for thirty years and more. As far back as 1952, for example, Joseph Goldstein, in his classic study of the Transport and General Workers Union, The Government of British

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Trade Unions, identified the weakness of basing union democracy on the branch meeting. He concluded that, in the TGWU:
"Branch meetings attract only a small minority of members, who, in meaningless elections, assume apparent control at this basic level and undermine the representative character of constitutional bodies at all higher levels of organisation. The branch has become the forum not of the rank and file but of an active nucleus dominated by a hard core centre.".
The author concluded that the branch had become—again I quote him—
"an oligarchy in democracy's trappings."
That was no less than 32 years ago. But more recently the 1980 Workplace Industrial Relations Survey—the latest in the notable series of surveys initiated by the noble Lord, Lord McCarthy—has shown that very little has changed. The survey found that in manual unions the average number of members attending branch meetings was 30 out of an average branch membership of 438—an attendance level of 6·8 per cent. It also showed that where the branch covered employees of more than one employer, attendance was even lower—about 3 per cent.; and that for several large branches with about 4,000 members, the average attendance was 10, which is a quarter of one per cent.
If your Lordships would like a more specific example, you need look no further than the voting figures for the 1983 executive elections in one of the largest unions, ASTMS. In those elections, according to the union's own figures, some 400 ASTMS branches (very nearly half of the total) did not register a single vote; only 2 per cent. of members voted in the election of the President and Deputy President; and only about 1·7 per cent. of the union's members voted in the election for the 16 divisional seats on the executive.
I would suggest that, in the face of figures such as these and of the continuing refusal of the trade unions to put their own house in order (as they have frequently been exhorted to do, and exhorted not only by people on this side of the House, so to say) despite the availability of public funds for postal ballot under the 1980 Act, the case for this legislation is now proven and self-evident.
Let me now turn quickly to the provisions of the Bill. Part I concerns elections, Part II concerns strike ballots and Part III concerns the political activities of trade unions. Part I requires all the voting members of a trade union's governing body—its principal executive committee—to be elected at least once every five years in a secret ballot of the union's members. The ballot must be conducted so as to give every member a fair and convenient opportunity to vote and to do so without interference or constraint. Voting must be secret and by the marking of a ballot paper, and the votes must be fairly and accurately counted. This means the end of the block vote and voting by show of hands. Ballots must be held either at the workplace or by post and not at branch meetings. Indirect elections, under which members can vote only for delegates to some intermediate body and then have no control over how those delegates cast their votes for the executive, are also ruled out.
Within these basic principles, however, the Bill provides unions with very considerable flexibility. Flexibility is most important here, because we are

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dealing with very plural situations out there in the real world of the economy. To give just one example, unions will remain entirely free to apportion seats on their executives as between different occupations, areas or sections within the union on whatever basis their constitutions provide. Part II of the Bill concerns strike ballots. In effect, it gives trade unions a choice. They may ballot their members before calling them out on strike and keep the immunity that the law now provides, or they may call a strike without a ballot and so forfeit their immunity. That is a simple proposition and, I believe, an entirely fair one. A trade union's immunity from civil proceedings in an industrial dispute is a privilege, as I have said, unique in English law. I do not doubt that it is a necessary privilege if trade unions are to function effectively, but that is not to say that it should be an unconditional privilege or that it should be free of any corresponding obligations. The minimum obligation is surely to ensure that trade unions have consulted their members before calling on them to risk their own livelihood and that of their families and colleagues by going on strike. There can never be any justification for a trade union compelling its members to strike against their will, under the threat of withdrawing their union cards and so effectively throwing them out of work.
The provisions in Part II cover any industrial action in breach of contract, and not just a strike, provided that it is authorised or endorsed by a trade union, as was set out in the 1982 Act. That means that it will cover all official industrial action and any action which trade unions or their paid officials are seen to be supporting.
Part III of the Bill deals with the rights of trade union members in trade unions which engage in political activities. Let me say immediately that there is nothing in the Bill to prevent a union from continuing to engage in political activity, if that is the wish of the majority of its members. That was the principle established by the Trade Union Act of 1913, and nothing in this Bill detracts from it in any way. Indeed, Part III builds on the basic principles of the 1913 Act. If the majority of the members of the union wish it, it will be entirely lawful for a union to establish and maintain a political fund and raise a political levy of whatever size it chooses.
All that the Bill does in this respect is to give today's union members the same rights as were given by the 1913 Act to their grandfathers—the right to decide in a secret ballot whether or not they want their union to engage in party political activities. It cannot be right that a decision to establish a political fund taken as long as 70 years ago should continue to bind a union's members for all time, even if not a single present-day member was alive when the original ballot was held. And yet that is the indefensible position now. It simply cannot be right.
There is nothing in this Bill which has not already been put into practice in the real world again by one union or another. It extends the existing rights of union members and it builds on remedies which are already available to them. There is nothing novel about secret ballots for union elections, for calling strikes or for unions with political funds. This Bill does no more than to extend the practice of the best to the rest of the trade union movement.

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The Bill lays down minimum basic democratic requirements. It does not set out to impose a uniform framework or procedure on all trade unions. It is no legal straitjacket. There is nothing in this Bill which it is unreasonable or impracticable for a trade union to be expected to do. There is nothing here which will prevent a trade union from doing the job of representing its members and defending their interests. On the contrary, I believe it will ensure that unions are truly representative and that they defend their members' real interests.
When noble Lords on the other side of the House rise to oppose this Bill, I hope that they will explain exactly what it is in the Bill that they object to—not in sweeping generalities, but quite specifically. Do they object, for instance, to union members being able to vote for their leaders in a secret ballot? Do they object to union members being asked whether they want to strike before being ordered to do so? Do they object to union members being given the same opportunity which their grandfathers had to vote in a secret ballot on whether their unions should engage in political activities?
Do they object to members being given a fair and convenient opportunity to vote and to those votes being fairly and accurately counted? Or do they object to union members being able to vote without interference or constraint? Most specifically of all, do they really support and defend a system of internal democracy in trade unions, such as that in ASTMS, in which less than 2 per cent. of the union's members vote for that union's governing body? I hope that these questions will specifically be answered by those noble Lords who speak against the Bill this afternoon. I fear that they will not be.
The case for the Bill is surely self-evident. It meets a need that has been voiced time and time again by members of trade unions, and time and again it has been ignored by their leaders. The vast majority of union members want the rights which this Bill will give them. They voted for this Bill overwhelmingly in the last election. They have supported its provisions in opinion poll after opinion poll. We must not let them down, and that is why I beg to move that this Bill be read a second time.
Moved, That the Bill be now read a second time.—(The Earl of Gowrie.)
3.33 p.m.
Lord McCarthy: My Lords, I like to begin, as the House well knows, by saying what I can say in favour of the Government, and it will not take very long. I should like to congratulate them on the title of the Bill. At last we have finished with Employment Bills. We had the first trade union Bill which was called an Employment Bill, and the second trade union Bill which was called an Employment Bill—and all the time the level of unemployment rose—and now we have the third trade union Bill and at least, thank the Lord! it is called a Trade Union Bill. It is half right in that, because of course it is not just a trade union Bill. Like the first two trade union Bills, it is an anti-trade union Bill.

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This brings me to a number of preliminary points of a general kind that I want to make, and I must make them quickly because the noble Earl has incited me to go into details. He wants to know in terms what we find wrong with this Bill. So I cannot spend too much time on the preliminary points, because I should like to go into very great detail in terms about what we find in detail wrong with this Bill. But it is necessary to make a number of preliminary points.
The first point is that there is a link, as the noble Earl said, between this Bill and the 1980 and 1982 legislation. This is a further assault on trade union rights. The central point to grasp is that the Government, even without this Bill, have already gone far beyond the most that was proposed by—if I may mention the name—the Heath Government. Their legislation, without this Bill, already restricts trade union rights far more than the 1971 Act intended to restrict trade union rights. They have also already gone far beyond what was done at any time since 1906.
They have made it actionable to enforce UMAs and fair lists; they have made secondary picketing actionable; they have made secondary action of all kinds actionable. Most important of all, they have narrowed the definition of a "trade dispute", so that it covers simply a dispute with one's own employer about one's employment conditions; and, of course, they have made trade unions liable for the acts of their agents outside these narrowly defined areas. All these things have been done before this Bill comes before the House. That is the first point.
The second point is that we can no longer say that employers will not use the existing legislation. I do not know what the noble Earl thinks is proved by the rash of 20 or 30 cases that have been brought under the existing legislation. I do not know what he thinks it has done for industrial relations; what it has done for jobs. I do not know what he thinks it has done for the employers who, as often as not, have abandoned the action halfway through. But it has undoubtedly very considerably added to uncertainty, and I should say that it has significantly added to the deterioration in industrial relations of the past four years. But we cannot say that the legislation will not be used. We cannot say what the consequences will be when it is used. It is ticking away like a time bomb. That is the context in which the Government propose some more.
That brings me to my third point, because the present Bill is only part of a process which continues. A further Bill is promised next year, and if we are to believe what we are told it will deal with the right of strike in emergency services. That will be only the fourth anti-trade union Bill. There will be another and another, if we are to believe what the Prime Minister said as she was reported in The Times of 12th December 1983. She said that a trade union Bill will be required in alternative years "until we get it right." So long as there is a trade union left standing, we shall continue to legislate until we get it right.
That brings me to a question which I should like to ask the noble Earl. What is it that must be got right? Is it the reform of the trade union movement—and what will it look like when it is reformed—or is it the destruction of the trade union movement? The Government have said in relation to this Bill that they

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wish to hand the unions back to their members. In what state? In what condition will they hand back the unions to their members when they have finished with them? It seems to me that it is a little like the state in which the Goths handed the mutilated daughters and dead sons of Titus Andronicus back to him, in a position in which they could do no more harm to anyone because they were not in one piece. Is that the thing which must be got right? Must the trade unions be destroyed or, if not, how will we know when the Government have had enough of this and when they can look at the trade union movement and say, "That will do"? It seems to me a reasonable point to ask.
That brings me to my last preliminary point, which is the difference between us and them. There is another question which I should like to ask the noble Earl. We still believe that trade unions have a useful function to perform. Do the Government believe that? We still believe that the employment contract remains a dependent relationship, whatever the level of employment or unemployment, and that workers therefore need the right to combine effectively to match employer power. That has been believed by Conservative Governments since 1876. Do the present Government still believe it? And, if so, are the trade unions to be left with any legal rights at all?
Quite apart from the economic argument for trade unionism, we still believe that there is a democratic, pluralistic argument. We believe that the trade union movement is one of the most important centres of non-state power—which is not in the hands of the establishment. For that reason we believe that it is a cornerstone of a democratic society, and for that reason we believe that tyrants at all times have sought to destroy it. Is that what the Government believe? If so, will they say so? And will they tell us when they will leave the trade union movement alone?
Therefore, I turn to the three parts of the Bill. I heard and noted down the noble Earl's definitions of the three functions of the Bill. I have three slightly different ones. First, it seems to me that the purpose of Part I of the Bill is to impose upon all unions rigid, impractical election models which will lay them open to endless litigation. That is the purpose, if people mean what they write, of Part I of the Bill. It is contrary, we argue, to the ILO Convention which the Government have signed.
The purpose of Part II of the Bill is to impose restrictions on the right to use official strike action by a similarly rigid model, including what I find the most noxious and detestable part of the Bill: what I call the intimidation provision, Clause 8(4), which I would argue is unique in strike legislation anywhere—the infamous intimidation provision of subsection (4).
The third aim of the Bill, in Part III, is to curtail the right of unions to express views of all kinds in areas of social and political controversy and most notably to do this in the case of unions which do not have political levies—unions like NALGO which in the past we thought, were allowed to express opposition to Government policy if that Government policy, they thought, affected their employment opportunities. But as we read it—and we shall be glad to be told we are wrong—their political rights will be denied to them as

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a result of Part III of the Bill. As I say, all these points are advanced in the name of democracy.
Now let me say something about the general arguments which have been advanced for all three Parts of the Bill and the comparisons which can be made between what the Bill proposes for trade unions and what exists for other organisations, in particular for limited companies. What strikes one about the arguments which have been used, and they have been used from the Dispatch Box on the other side of the House this afternoon, is their excessive generality. Phrases like "malpractice" are bandied about in relation to Part I of the Bill. Phrases like "an erosion of public confidence" are published in the Green Paper. "Forgery, ballot rigging and other corrupt practices", we are told, abound. Speaking in another place on 8th November, reported at col. 160 of the Official Report, the Secretary of State for Employment referred to the present "scandalous position in some of the largest unions".
Whenever statements of this kind are made one can be certain that no examples will be given, unless of course—and I shall come to this—one goes back to Goldstein. I thought the day was gone when anybody would go back to Goldstein. I have not given a student Goldstein for 30 years. Goldstein was destroyed by Roberts, Clegg, Undy, Martin, Edelstein, Daniel. Goldstein was finished 30 years ago. Goldstein examined one branch. He took no notice of workshop organisations. In fact, it was one of the first systematic studies of industrial relations, but it should not seriously be trotted out today. If the noble Earl wants to quote books, may I ask him to allow me to give him a slightly more up-to-date book list?
So what we have had are generalisations. There have also been generalisations about Part II. There have been still more general references to "union militants" and to "drumhead mass meetings", but no examples have been given. It is even worse in relation to Part III of the Bill which deals with the levy. As to Part III of the Bill, concrete examples are included in the annual report of the certification officer. If there were any examples of any individual trade unionists who had been imposed upon, discriminated against, let alone dismissed or not allowed entry into a job, they would be contained in the annual report of the certification officer, because in this single respect we have had since 1913 effective legislation to deal with all kinds of discrimination relating to the political levy. What do we find? We find that in 1982 the certification officer had 23 cases and that in 1983 he had 22 cases. That is the degree of escalation which took place. In that year the certification officer did not even have a formal hearing. That is the kind of evidence which is being put forward. As for union elections, since Goldstein was trotted out, I should have thought that the ETU case would also have been trotted out. The ETU case was the last major scandal in union government. It took place in the mid-1950s. If therefore Goldstein can be quoted I should have thought that the ETU case could also be quoted. No concrete evidence has been put forward since that time.
I come to the comparison with other bodies. This is the point which the noble Earl made in his own speech. I should like the House to consider first the election system which is being imposed upon trade

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unions: universal, periodic, direct elections by ballot, with no form of indirect election being allowed. Secondly, think of what is being done about the use of sanctions. A ballot has to be held. Even if the ballot is held under the provisions of the Act, the immunity lasts for only four weeks. As I have already said, there is this particular clause in the Bill which we find offensive. Then let us consider the spending of money on political purposes and what has to be done now under the 1913 legislation in order to spend money on political purposes.
Now let us consider the position in other institutions—for instance, limited companies. Let us consider the statutory, regulated professions. Let us consider institutions like Lloyd's, or the Stock Exchange, or the Oxford and Cambridge colleges, or employers' associations. Let us examine even Parliament itself. All of these organisations have a special position in law. They all have various kinds of what the noble Earl calls, when they belong to trade unions—but only when they belong to trade unions— "immunities". Yet they are all to be allowed to continue to enjoy mixed systems of decision-taking. They are all to be allowed to appoint people ex officio, if necessary, who will have votes but who will not be directly elected by all the members or shareholders of the organisation.
Look at Parliament itself. The Prime Minister, most notably, selects her own Cabinet—and no one doubts that if she does not like them, she dismisses them, They are indirectly elected. But what is good enough for Parliament is not good enough for the Transport and General Workers' Union. All those institutions subscribe to what one might call the delegate rather than the referendum theory of democracy. Almost exactly the same arguments which are used by parliamentarians against the referendum and against the plebiscite can be used against the ballot. Parliamentarians are very fond of saying that they know they represent their constituents and that they can be permitted to elect people to committees, sub-committees, Cabinets and government. They say that if they want to vote on important matters, they will put their hands up or march through lobbies and everyone will be able to see what they do. They say that they do not need secret ballots, referenda or plebiscites because they believe in indirect systems of democracy.
Only trade unionists are not allowed to have such a mixed system. Yet if one looks at all the institutions that I have listed—if one looks at Oxford colleges, at employers' associations, at corporate bodies or companies—I submit that the trade union movement has far more direct elections of far more posts, far more regularly, and makes much more use of this despised plebiscitory system that those other powerful organisations that I have mentioned.
Let us turn to politics. If one includes professional bodies, it is true that the BMA engages in politics and that the National Farmers' Union engages in politics. We do not expect them to have a levy—of course not, because they are not trade unions. Let us look at limited companies. I must say that I have always had a soft spot for the present Secretary of State for Industry. He is a man to push his luck. Asked before

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a House of Commons employment committee recently:
"Would you say why there should be any legal regulation on trade union political expenditure?",
he actually replied:
"It puts it on a footing alongside companies who are also required to report and regulate their political expenditure".
I believe that something similar was said by the noble Earl.
A man from Mars would think that companies were required to have a ballot to pay a levy. A man from Mars would think that companies were required to give their shareholders the right to contract out. A man from Mars would think that there was a clear definition of what is to count for a political purpose, and that if companies did not have a separate fund committed to their purpose they could not spend a farthing on politics. If trade unions were to be put on a footing alongside companies, what would that mean? It would mean, for example, that Mr. Moss Evans could give as much money as he wanted to the Labour Party from his general fund as long as he could get it through conference, because that is the position in corporate bodies.
So I come to my general criticism concerning the practical consequences of the three Parts of the Bill. Part I of the Bill will require the total rewriting of all union rule books in order to conform with its provisions. There is no union today that carries out the provisions of Part I of the Bill. It will mean. I would argue, that no union could have geographically-based branches, because if one has geographically-based branches, one cannot have equal access to vote.
It will mean in every union an uncertain and unpredictable change in the existing power balance. That is what happens when one moves away from one system of election to another. It will almost certainly mean an increase in factionalism in every union. There is an irreversible connection between the number, regularity and type of elections and the degree to which unions divide factionally. So those unions which so far been free of factionalism—such as the GMBTU—will become factionalised.
There will also be the endless chance of legal challenge on minor infractions which have no effect on the result. In this respect, Part I and Part II of the Bill are worse than parliamentary legislation. As I understand it, in parliamentary elections, if there is some minor infraction of parliamentary law in the course of an election, provided it can be shown that it has no significant effect on the result, then no case will be sustained. That is not so in this Bill. There is nothing in this Bill—in Part I or in Part II—which states that even minor technical infractions cannot lead to the upsetting of an election. That is the consequence of Part I of the Bill, and that is my particular argument against it.
But Part II of the Bill creates very similar risks of legal action by employers and third parties, and threats of interlocutory injunctions. There will almost certainly be an encouragement to take unofficial strike action because officials cannot become involved unless they can first ensure that they will be able to hold a ballot. There will also be endless problems for trade unions in getting an up-to-date register. Because of the

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spread of the check-off, the creation of an up-to-date register for strike purposes will depend almost entirely on the good will of the employer.
If the employer does not co-operate (and why should he?) in providing the union with an effective, up-to-date register then the ballot will be unlawful. There will also be difficulties with negotiating beyond the four-week limit. Even if there is a ballot achieved within the limits of the law, then, unless there is a strike, the immunity which the ballot provides runs out after four weeks and there has to be another. Finally, there is the discrimination provision in Clause 8(4). this says that one must place upon the ballot paper the question, "Are you prepared to take part in a strike involving a breach of contract?". That is what it says.
It is as though when one enters a hospital for an operation, one would have to sign a piece of paper that asks '"You realise, of course, that you may die on the operating table—don't you?" Or as though, when you flew British Airways, you had to sign a form which asks, "You do realise,—don't you?—that these planes can fall out of the sky?" This is the kind of intimidation provision which the Government have put into the ballot. There never was a ballot such as this.
Part III of the Bill, as I have said, could mean the loss of some union funds, in the event of the ballot not being successful. I myself do not believe that that is very significant. More significant is the wider definition of what is to count for political purposes (and we shall be saying more about that in Committee) and the fact that, as a result, unions which do not have levies or political funds will not be able to engage in a wide range of political and social activities.
The final point I should like to make relates to the comments made by the noble Earl at the end of his speech about public opinion. The noble Earl said that public opinion was in favour of the Bill. Indeed, he said that the Government actually won the election on it—or that it had been part of their election manifesto. It is not my job to go through all the statements made in the Conservative Party election manifestos, and to ask how far the Government have achieved them or not. I would rather turn to what the noble Earl said about public opinion polls.
It is perfectly true that there have been public opinion polls supporting this Bill, or apparently supporting this Bill. There was a public opinion poll published most recently in the Sunday Telegraph. It was produced by the Gallup organisation, when 993 electors were asked last August questions which purported to be about this Bill. In another place, the Government have made a great deal of this Gallup poll. It suggested that 88 per cent. of the sample approved of electing leaders by ballot and that 83 per cent. agreed that no strikes should be called without a postal ballot. Some 52 per cent. approved of the Government's plans to reform trade union law. The only trouble was that the first two questions were not really straight questions on the Bill. The Government are not asking you to approve the election of leaders by ballot; they are asking you to approve of banning indirect elections whether they are by ballot or not. That is quite a misleading question to ask the public.

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On the second question, 83 per cent. agreed that no strikes should be called without a postal ballot. The Government are going far beyond that. They are prescribing the form of the ballot and including what I call the intimidation provision. Nobody asked questions about that. As for the 51 per cent. who favoured a secret ballot on whether the unions should pay a political levy to the Labour Party, of course you have to have a ballot to pay a political levy to the Labour Party. That is not what the Bill proposes. It proposes that there should be a ballot every 10 years on the basis of a much wider definition of what is to count as "political".
These are not balanced questions. They are not the right questions to ask. They do not prove what public opinion thinks one way or another. In any circumstances it is rather strange for this Government to quote public opinion polls at this particular juncture of their fortunes. I seem to remember that there was a public opinion poll with a majority against the use and establishment of cruise missiles in this country. There was a public opinion poll recently which said that we should get out of the Common Market. There was a recent public opinion poll which by a substantial majority said that the Government should stop their attempts to abolish the GLC. I do not hear of the Government deciding to change their policies for reasons of that kind. Therefore, it is not very persuasive for this Government to quote the public opinion polls.
In conclusion, I should say that we take the attitude we do, not because we believe on this side of the House that there is nothing wrong with trade unions or that nothing needs to be done to change them. Indeed, if your reading extends beyond Goldstein you will find in a recent book by Undy on trade unions that a very great deal of change is taking place within trade unions—some good and some bad. What we believe about British trade unions, and what we seek to express from our side of the House, and where we differ from the other side of the House, is that we think that British trade unions are, above all, British. They have the same mixture of myopia and morality which distinguishes all British institutions. They are no more obstinate than the Civil Service. They are no more incompetent than big business. They are no more ruthless than the BMA. They are no more devious than the National Farmers' Union. They are no more narrow and sectarian than the Oxford and Cambridge colleges. I sometimes think that there is great similarity there. I sometimes bore my friends with the similarities between trade unions and Oxford colleges. I could go on for hours about the similarities between the Transport and General Workers' Union and Balliol, but I shall not. Trade Unions are just as sectarian as colleges, but no more so. They are just as inefficient as Parliament. Union leaders are no more corrupt than political leaders, and at least as sober as journalists. Therefore, they do not deserve to be harried and pursued in the name of a half-baked Hayek view of this economy, just because the Prime Minister must get it right.
4.3 p.m.
Lord Rochester: My Lords, from these Benches I should like to thank the noble Earl, Lord Gowrie, for

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the characteristically clear way in which he has placed this Bill before us. As the noble Lord, Lord McCarthy, has just reminded us, it has been said that the Bill's underlying aim is to give trade unions back to their members. As an objective, that certainly has our support. However, as I will endeavour to explain in outlining our general reaction to the Bill's three main parts, we think that there are provisions in it which may go too far. There are others which do not go far enough and others, again, which, although acceptable in principle, may in practice and in our fears prove to be counter-productive.
I turn first to Part I dealing with secret ballots for trade union elections. We are in agreement with the proposition set out in Clauses 1 and 2 that at intervals of not more than five years every trade union member should have the right to vote by secret ballot in the election of the union's governing body. We have doubts on two points. The first revolves round the question of the alternative approach set out in paragraph 54 of the Green Paper, Democracy in Trade Unions, which your Lordships debated in March last year. This was that union members should be allowed to decide democratically whether they preferred arrangements other than those now incorporated in the Bill for the election of their governing body. Specifically, it was suggested that established systems of indirect voting might be held better to reflect members' needs and the diversity of interests of the membership. Thus, if a majority in a secret ballot periodically confirm their support for the existing arrangements, other statutory requirements would not apply. If that were the outcome of such exercises, would it not have the advantage that nobody could then claim that arrangements were being imposed on union members from outside against their wishes? If, on the other hand, the members indicated in the ballot that they preferred the arrangements set out in the Bill, would not that strengthen the Government's hands immensely because implementation of their proposals would then have been shown to be willingly accepted by those immediately concerned? At this stage I simply ask these questions.
The second matter arising from Part I that I should like to explore further is quite different from the first. Having regard to the various means by which it has been claimed that working place ballots are open to abuse, are the Government satisfied that, in its present form, Clause 2 goes far enough? To put the question more bluntly, has the time come, despite the attendant practical difficulties—I, for one, do not underestimate those difficulties—to insist on the establishment of the statutory machinery needed to make more extensive use of postal ballots for union elections?
I turn next to Part II and in particular to Clause 7. This is the clause which removes from trade unions immunity from legal action if they do not hold a ballot before authorising or endorsing industrial action which has the effect of interfering with the performance of the contract of employment. Immunity is also to be removed under the Bill if the ballot is held more than four weeks before the industrial action begins. Let me first make it plain that my noble friends and I endorse wholeheartedly the principle underlying this Part of the Bill. However, we are seriously concerned

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lest the effect of Clause 7 proves in practice to encourage even more unofficial action than there already is in the form of walk-outs, working to rule, going slow, and so on.
I recall from my own experience how in many cases such actions start spontaneously as a result of some relatively small incident. The personnel manager—I was once one—phones the local union official and asks him to help sort things out. My fear is that in future the union official will be reluctant to respond to such calls lest that should be interpreted as endorsement of the unofficial action and result in the union being sued. Similarly, I fear that the effect of the provision removing immunity if a ballot is held more than four weeks before industrial action begins may be that ballots are held prematurely and that attitudes will then be struck which will increase the likelihood of the action taking place.
There may be other practical problems, including the danger that, if in every case there is a requirement that ballots are held before strikes begin, there will be a corresponding insistence by trade unions that ballots must take place also before strikes are called off. I could go on, but it would be more appropriate clearly to do so in Committee. It is pertinent, however, to observe that the means now chosen to remove immunity did not feature in the Government's Green Paper, so that there has not been the same degree of consultation concerning the merits of this particular proposal as applies to other provisions in the legislation.
I come now to Part III of the Bill concerning political funds and objects. For our part, until such time as there is a fundamental change in the way in which political parties in this country are financed, we see no reason why trade unions should not operate a political fund if by secret ballot at periodic intervals they elect to have one. What is in our view insupportable is that it should then be assumed that all contributions to the fund should be used for the benefit of a particular political party when it is evident—for example, from the outcome of last year's general election—that there are many union members who wish to support not that party but other political parties, or perhaps none at all.
Indeed, it was with that consideration, among others, in mind that my noble friends and I voted for an amendment in the 1972 Employment Bill which would have had the effect of substituting "contracting in" for "contracting out". Had that amendment been incorporated in the Act, it would at least have become easier for effect to be given to the views of union members not wishing to support the Labour Party.
In our view there needs to be a much more even-handed approach as between contributions made by individuals to trade unions and those made by companies to a political party. In saying that, I am aware of the differences between the two cases—for example, in the scale of funding and in the degree of regulation of companies that already exists, as the noble Earl, Lord Gowrie, has today reminded us.
It has, nevertheless, been encouraging to note that in another place at the Report stage of the Bill on 2nd April, the Conservative Member who sought to introduce a new clause having the effect of substituting

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"contracting in" for "contracting out" was principled enough to acknowledge—I quote from column 724 —that if they (that is the Opposition):
"would vote for contracting in, I would positively campaign to change the law with regard to political donations by companies".
We on these Benches consider that there is an urgent need to find ways of financing political parties in this country which are different from and fairer than those that now exist. There is not time to speculate now on what form such changes might take. In any case, it seems that this Bill could not be amended to incorporate them, for it has to do with trade unions alone. This is nevertheless a matter on which your Lordships will see that we feel very strongly.
That brings me to the last point I want to make. Unlike the 1982 Employment Bill, the title of this one is so tightly drawn that we shall not be able to remedy, even to the small extent that was possible in the 1982 Bill, what in this one, too, is in our view its greatest defect. That is the absence of any provision at all positively to improve human relations or to bridge the gap between "us" and "them" in British industry. The noble Lord, Lord McCarthy, has already referred to that concept. Had this Bill afforded us the opportunity to develop our own step-by-step approach to increasing employee involvement by making it a statutory requirement that in both the public and the private sectors every organisation employing more than a certain number of people should establish consultative bodies of some kind, we should certainly have taken that opportunity. I should emphasise that we are not believers in so-called single channel representation. On the contrary, in our view legislation should provide for membership of such consultative bodies to be open to all employees and not be confined to trade union members alone.
I do not apologise for dwelling on this theme, for in our view it is highly relevant to the philosophy which should underlie all legislation affecting industrial relations, Indeed, I was heartened to learn last week that the British Institute of Management had recently conducted a survey of its 74,000 members on the subject of employee participation and consultation. This revealed that, although only 8 per cent. of the respondent managers felt that the Vredeling Directive should be supported, United Kingdom managers would be prepared to accept a broad requirement for participation procedures. Only 21 per cent. of the respondents felt that there should be no further legislation in the United Kingdom, and managers believed that a combination of minimum legislation and voluntarism would help to develop the process of giving more information to employees and of consulting them more often. In the Bill before us there is no evidence of any such vision, and that we greatly regret.
4.17 p.m.
Baroness Cox: My Lords, along with countless others, I welcome legislation which is intended to help trade unions to become more democratic. I particularly welcome initiatives designed to ensure that trade union leaders are representative of their members and more responsive to their wishes. To the extent to which this Bill is designed to achieve these goals, it has my unequivocal support.
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The key to bringing about more democracy in trade unions lies in the mechanism for the election of union executives. In the debate in another place, the Government professed a commitment to giving trade unionists the right:
"to vote without interference or constraint, to have a voting paper supplied to them, to have a fair and convenient opportunity to vote at no cost, in secret, and to have these votes fairly counted".
That commitment is surely entirely commendable, but, unfortunately, in its present form the Bill has deeply disappointed very many moderate trade unionists because of the Government's decision to allow work-place ballots, instead of making secret postal ballots mandatory.
As Frank Chapple argued forcefully in Contact in March of this year:
"There is no satisfactory substitute for representative democracy in our trade unions. That representative aim means that no obstacle should be placed in the way of maximum membership participation in elections. That in turn demands secret postal ballots—the fiddleproof and secret voting method which this union has used to our members' great advantage ever since conspiratorial communist ballot-riggers were exposed in the famous 1961 High Court case. We can be proud of our scrupulous record in elections for office since that time and certain that the results continue to produce a union leadership that broadly conforms to our members' views and wishes. It is therefore all the more remarkable that the Government, which loudly boasts that it will give unions back to their members, has cold-shouldered postal balloting."
But it is not only Frank Chapple's union which, having suffered the most notorious ballot rigging in this country's trade union history, supports secret postal ballots. A recent MORI opinion poll showed massive support for secret postal ballots among trade union members—74 per cent. overall, with 71 per cent. among blue collar workers and 80 per cent. among white collar workers. What was especially striking was the overwhelming support among members of some of the largest unions: 75 per cent. in the Transport and General Workers' Union; 81 per cent. in the National Union of Mineworkers and 87 per cent. in the General and Municipal Workers' Union.
Opposition to the concept of secret postal ballots was correspondingly minimal, ranging from 18 per cent. in the TGWU to 12 per cent. in the NUM and a mere 6 per cent. in the GMWU. While acknowledging, of course the limitations of any opinion poll, the consistency of these findings and the size of the majorities cannot be interpreted in any way other than as overriding support for secret postal ballots among those most closely affected. Therefore, in my contribution to this debate, I wish very briefly to present some of the arguments in support of secret postal ballots and to show that they are desirable in principle and feasible in terms of cost and practicalities. In so doing, I will also refer very briefly to some of the dangers and problems associated with workplace ballots.
First, there are logistical problems associated with workplace ballots. For example, the returning officers or scrutineers are likely to be elected from the ranks of branch officers who may well be political activists who were themselves elected by perhaps as few as 2 per cent. of the branch membership. It is they who would be responsible for handing out the ballot papers, for counting them, and for completing and forwarding the returns to head office. They would thus be in a key

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position to take advantage of any loopholes in the system. Such loopholes may take various forms, ranging from the so-called "putting to good use" of ballot papers, which for one reason or another may not have been completed, to manipulating the meetings at which voting takes place. I give two examples of ways in which such abuses can occur—and I note that there was earlier a request for examples.
First, in a large complex of buildings or in split site organisations, it is very easy for those handing out forms to miss out some voters—and people rarely complain if they do not receive voting papers. It may therefore be relatively simple for a dishonest official to keep back some forms, especially if the distribution is done at an awkward time. There is an additional danger that some trade union members may not receive notice of meetings at which voting is to take place. Such things have been known.
Secondly, there is the fact that as many as 50 to 60 per cent. of people throw their ballot papers away. If this happens at the place of work, it is legitimate to ask what happens to these papers. Members of the electricians' union have pointed out, on the basis of their own experience, that the Government's present proposals provide no protection against ballot papers being "put to good use" if they are collected after being discarded.
The Aims of Industry publication, Trade Union Bill is Ballot Riggers' Charter, claims:
"In last year's ballot in NALGO, where the papers are issued in bulk to branch secretaries for distribution at the place of work, one member boasts of having cast 129 votes; his main strategem was going round the waste paper baskets and filling in discarded ballot papers."
In addition to such logistical problems, there are also problems arising from the psychological pressures which may be brought to bear on people who have to vote at their place of work. It is easy for politically motivated officials to arrange things so that contentious issues may be discussed at a meeting on the day of the ballot and for voters then to have to complete their ballot papers in the immediate presence of those same officials. For example, in the Civil and Public Services Association elections in 1983, branch officers held meetings in different rooms, harangued members and then held the ballot in that emotionally charged and politically pressured atmosphere.
It is problems such as these which make it so important to provide for secret postal ballots in which members can vote in the privacy of their own homes, free from pressure. However, as the Government have so far decided in favour of workplace ballots, it is important to consider their reasons for so doing. These seem to fall into four categories. First, there is the turnout of voters. Secondly, there is the possibility of rigging postal ballots. Thirdly, there is the cost and the related fact that insistence on postal ballots would force change on unions which already have adequate balloting systems. Fourthly and finally, there is the public's alleged satisfaction with the idea of workplace ballots. However, consideration of each of these still shows evidence and argument in favour of secret postal ballots.
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If I may, I will speak very briefly first on the question of turnout. It is true that some of the highest figures for turnout have been found where voting is organised at the workplace. In the Scargill election of 1981, turnout was claimed to be 80 per cent. of the NUM's membership, but that was hardly typical and took place in the glare of full media coverage. The second highest level of voting in recent elections was found in the CPSA's first election for full-time officers, with a turnout of almost 40 per cent. But that level dropped in 1982 to 30 per cent. for executive elections.
However, unions which already use postal ballots tend to have levels of participation similar to the CPSA's 1981 level. The electricians achieved a 32 per cent. turnout in their election for general secretary. Also, according to the certification officer's report for 1983, 15 unions applied for refunds of expenditure after holding secret ballots. In the 20 ballots involved, the average percentage polled was the impressive figure of 47 per cent. When the Engineering section of the AUEW changed from branch ballots to postal ballots, turnout rose by over 100 per cent. according to Undy and Martin's recent book, but other sources suggest it was as high as a fivefold increase.
So postal ballots do not fare badly in comparison with other forms of balloting. Turnout should not be used as a decisive argument against them. This fact, combined with the advantages they bring in terms of freedom from pressure and the reduction in the loopholes for malpractice, must surely mean that they deserve very serious consideration unless other contra-indications are overriding.
What might those contra-indications be? Some of the main arguments relate to cost. However, the experience of the electricians' union has shown that, far from being a drain on resources, the establishment of the modern, computerised, central register of members required for postal ballots not only eliminates malpractice. It has also streamlined procedures, cut down on administrative costs, saved millions of pounds in subscription arrears and provided a better service to members. Yet another advantage is that the percentage of members not included on the register is kept to only 2 to 4 per cent., thus enabling at least 96 per cent. of members to have the opportunity to vote by receiving a ballot paper at home.
Other experienced trade unionists have argued that the cost of setting up computerised membership records would be recouped over and over again by more efficient collection of membership dues. For example, at a minimum contribution rate of 50 pence per week, every 1 per cent. in arrears costs an organisation of 100,000 members £25,000 per year. It has been estimated that the reduction of arrears in the electricians' union from 1976 to 1983 resulted in savings of millions of pounds.
Another argument used is that if the Government were to insist on postal ballots, some trade unions which already have democratic systems would be required to change them, with no obvious advantage. But. as Undy and Martin point out in a recent book,
"Legislation which enforced either postal or workplace ballots would, however, still require extensive changes in union rules".

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That point has already been made in the debate. Therefore, it is recognised that changes are going to be required, of most unions anyway, in order to comply with the proposals of the Bill as they now stand. It thus seems anomalous not to take advantage of inevitable change by implementing systems that would be as democratic and as safe from malpractice as possible.
The third type of counter-argument consists of allegations that postal ballots are themselves vulnerable to rigging. In the debate in another place the point was made that in the notorious case of ballot rigging in the electricians' union it was a postal ballot that was fiddled. However, that is a misrepresentation. It was only partly a postal ballot. Ballot papers were not issued to individual members by an independent body, but were issued in bulk to branch secretaries, thus giving a loophole for rigging. Nowadays the EETPU, among others, uses the Electoral Reform Society for the administration and counting of its ballots.
The final example of arguments used against postal ballots refers to the claim that the public generally has confidence in workplace ballots and that there is no widespread feeling in favour of postal ballots. However, there is plenty of evidence to suggest that this is not the case. I have already referred to the opinion poll that found overwhelming support from trade unionists for secret postal ballots. There have also been strong representations in the press from moderate trade unionists expressing dismay that the Government are losing this opportunity to enforce secret postal ballots. For example, Mr. Cottingham, the national treasurer of the Association of Social Democratic Trade Unionists, wrote in The Times on 26th March this year:
"Is it therefore another example of this Government losing its grip that it has allowed the most significant reform of all—the mandatory secret postal ballot—to be dropped from its proposals? As Frank Chappie, of the electricians' union, has stated, the alternative workplace ballots 'are too easily open to intimidation of the voters, to improper use of discarded ballot papers, to phoney returns and a variety of other illicit behaviour'. The Government has already promised the cash to cover the cost of this reform and other moderate leaders, such as Terry Duffy, should have their hands strengthened by firm legislation to give all union members the right to vote in the privacy of their own homes".
Moderates from eight different unions writing in The Times in December 1981 made an impassioned plea for secret postal ballots for the election of union executives. They claimed:
"This is a measure which is impeccably democratic and one which the majority of the people of our country would wholeheartedly support and certainly not regard as a policy of confrontation with the unions".
In conclusion, when all the arguments are considered, it is my belief, shared by many other people across the political spectrum, that this Trade Union Bill, with all its good intentions, will be selling the country short if it does not make the use of secret postal ballots mandatory for the election of the governing bodies of trade unions. The arguments for secret postal ballots are irrefutable at the level of principle. Those concerned with practicalities can, as I have tried to indicate, be met. Such a measure would bring relief to moderate trade unionists up and down the country, who are at present dismayed and disappointed, and it would receive widespread public support as being essentially democratic and virtually

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irreversible. It would indeed be a brave, or a totalitarian, Government who would try to take away this right once it had been granted.
It is therefore my sincere hope that your Lordships may consider these arguments sympathetically and that any subsequent proposals for an amendment on these lines might receive the strongest possible support from all parts of the House. Such an amendment could make a vital contribution not only to the economic wellbeing of this country but, more fundamentally, to the protection of democracy and the preservation of the freedom of the individual.
4.35 p.m.
Lord Scanlon: My Lords, the audacity and panache with which noble Lords are today enunciating principles to be applied to others that they would themselves regard as anathema is truly breathtaking. Leaving aside for the time being ILO Convention 87, personally I have no objection whatever not only to the principle of ballots, but also to the principle of postal ballots. As one who has spent 34 years as a full-time officer, never going more than 12 months without either fighting for my survival or seeking to go up the trade union ladder, I can pay respect to those principles. But, before we praise them too highly, let us look at some of the underlying facts.
Prior to the postal ballot, in my own union, I was elected president of that body by the highest vote that has ever been cast in the branches—and that was 12 per cent. of the electorate. Twelve per cent.! We changed to postal ballots. I know that the noble Baroness, Lady Cox, said that our figures had doubled. Well, twice nothing is still nothing. We increased our potential voting to 30 per cent. by postal ballots. It meant that we not only had to send out 1·5 million envelopes to every member, but also had to enclose a prepaid envelope for return. All that the members had to do was to put a cross on the ballot paper and return it. Seventy per cent. decided that they would not do that. And before your Lordships rush in and condemn them, may I ask, how many shareholders turn up at the annual meeting of any company? One per cent.? Two per cent.? I can perhaps tell your Lordships that when they turn up, it is when something is going wrong. Exactly the same happens in trade unions.
Why do we stop at the governing body when talking about ballots? I do not know. One of the most important aspects of trade union activity involves the local official. Is it because the governing body may feel constrained to dismiss that person if legal action is taken under Part II of this Bill—is that the philosophy behind leaving out the election of local officials by postal ballot? 1 do not know whether it is or not. The principle of being responsible to, and being able to be dismissed by, the members is one that will receive my personal applause, but not if it is brought about by some legalistic manoeuvring. It will receive my applause if and when, or as and when, the members of any individual union decide that that is what they want. I would hope that if anything was done, it would be to encourage unions to go in those directions.
Goodness me, the battle of amalgamation has been around us! We would have had more amalgamations and less variety of unions within each industry but for the principle that has divided the trade union

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movement: should officials be appointed or elected? I tell your Lordships now that if you think that you are going to get passive trade union officials as a result of postal ballots, you are making the greatest mistake of your lives. Come a crisis at the time of elections and it takes a very brave man indeed to take the correct rather than the popular action. This is one of the dangers which is inherent in the legislation which is presently before us.
It has been said that today is not the time to go into detail, and certainly I agree with that. I will say only this of Part II. The principle in Part II is no different—the question of a ballot. But many—and I include myself—resent very strongly the implication that somehow trade unionists en masse are moral cowards, unable or unwilling to hold up their hands as to how they want a particular vote to go. In many instances it is not possible to hold a ballot if one wants a quick decision of the members about what to do. How would one go on if a shop steward has been blatantly victimised by an unscrupulous employer? Does one go through all these legal niceties? There is no provision in procedure, because procedure never mentions victimisation; it dare not. All these things are going to get us into considerable legalistic difficulties, which is always the way when legislation is involved in trade union matters.
I say no more regarding Part III. I call a spade a spade. In my view it is blatant political gerryman-dering, a legalistic excuse for financially bankrupting the Labour Party. We may as well see it in that setting, and I am sure more will be said on this during the Committee stage. Yet the sum total of all that has been said, the sum total of all the objections that can be voiced in your Lordships' House, is relatively in-significant compared with the well-known recognition of this Government's paranoic detestation of the trade unions. This is what lies at the back of it. If the 1980 Act does not result in an innocuous trade union movement, the 1982 Act will; if that one does not, the present one will; and if this one does not, there will be further Acts. Surely the time has come when we have to ask ourselves,"When is it going to stop"?
It is not an exaggeration to remind ourselves that the classical way the enemies of democracy seek to destroy democracy is first of all to destroy the trade union movement. It happened in Spain; it happened in Germany; it happened in Chile; it happened in Greece; it happened in many of the Latin American countries, and if we are not very careful it is going to happen here. We on this side of the House are determined that that shall not be.
4.43 p.m.
Lord Ferrier: My Lords, I find it very interesting to follow the noble Lord, Lord Scanlon. I find his speeches always well worth listening to and entirely audible. I should like to take up his point in suggesting that this Government suffer from paranoic detestation of trade unions. I dare to differ from him; this is not the case. Speaking as a life-long Conservative, I want to say that we must have trade unions. As has been mentioned already, the object of this Bill is to get it right. I go so far as to suggest that if the Labour Party is in difficulty today the blame lies very largely with the

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trade unions because the man in the street and the woman in the street are fed up with the trade unions, not because they are trade unions but because of the way they have been run. Are we not suffering from it today? I am not talking about the trade union system, the trade union principle, which is absolutely essential to a democratic economic framework; but, with due respect, about the way the trade unions have found themselves being manipulated by stipendiary administrations. When I say "stipendiary" I am talking about the enormous wages now earned by the leaders. I imagine they are out of all proportion to what the noble Lord, Lord Scanlon, earned when first he took an official position in a trade union.
This Bill is designed to implement the Conservative Party's promise—and it was a promise—to give trade unions back to the members. That is what it is all about. For that reason it has my ungrudging support and I hope it will be followed by further steps, as promised, on and on to ensure that the promise is kept to the full. This is not union bashing; this is an attempt to get it right.
One could spend a lot of time speculating on what alternatives lie open to us, but this is not the occasion for such speculation other than to say that the major problem that faces industry in this country today may well be that the craft unions are outmoded. It may be that we ought to be planning for industry-wide unions, and I find it extremely interesting to see the terms which Japanese entrepreneurs propose as essential before they will start factories in this country. If this Bill is an attack on anyone it is an attack on some of the present generation of trade union officials. The struggle for freedom has turned full circle and the freedom which the trade union movement rightly slaved for and suffered for in the years gone by is now a freedom for which the. man in the street has got to turn to in order to free himself from a dictatorship.
My mind goes back to the debate that we had on 1st December proposed by the noble Lord, Lord Harris of Greenwich. I was surprised to be given a glimpse of the proceedings of a trade union direction. I will not say that the curtain of which the noble Lord, Lord Dean of Beswick, lifted a corner disclosed the workings of a thieves' kitchen, but I will say that it disclosed a planning system for blackmail. If we are not suffering from blackmail today, why are there blank pages in the press? There is something wrong which has got to be put right and this Bill is the way to do it.
I should like to put before my noble friend Lord Gowrie one matter which is not a Committee matter and on which we could speak for ages. First, his speech so covered the ground that it saves me from saying much of what I wanted to say. He set out in every possible detail events which have led to today's situation, culminating in this Bill coming before your Lordships' House. I want to impress one point upon my noble friend. In the face of pressures exercised in particular by the television channels, the success of the Conservative's drive is remarkable, but it is proof of the old saying that you cannot fool people all the time. Why do news reports almost inevitably open with plugs by Bill this or Bill that? When will the opinion of the man in the street come first? Can we hear what the

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Government have in mind and what the people have in mind before we hear what Bill says?
I wonder whether any of your Lordships listened to the seven o'clock news this morning, which began with a tremendous plug for one of the largest unions, and it gave no indication of the other points to be made in the particular case. So the radio is almost as bad, with its packed panels and dubious polls. I say "dubious" polls because I remember watching a pollster in a crowded main-line station, and when I asked whether she wanted my view she said, "No, I know what you would say". So my contribution to her poll was not acceptable. There is too much of that going on over these surveys as to who are asked to give their opinions and how they are treated.
I hope that we shall give the Bill a fair wind and cry for more. I say "Good luck!" to the Department of Employment, but I beg the Government not to underrate the power of the radio and television media. Their influence is tremendously powerful and insidious. We must encourage the Government to take whatever means are available to them to rap the television medium over the knuckles.
Further, let us join with all those who wish to support the police in the struggle that they are having today to enable men to work when they want to do so. It might be wise if the Government regularly were to issue a note of the enormous cost of the policing which is taking place, which falls upon the state and the people. It is vast, and will be complicated to calculate. I know of a police officer and his police wife who are having to work an enormous amount of overtime due to the paucity of the men on the beat. So very large sums are being earned by them, and these sums must be taken into the calculation when we work out the costs of this awful wrangle.
I say, "Well done, the Government". As my noble friend Lord Gowrie said, the case for the Bill is self-evident. I repeat what I said earlier; I hope that the Government will go on and on until they have it right. It is our duty to trade union members, many of whom voted this Government into power, to ensure that the Government do get it right.
4.55 p.m.
Lord Beswick: My Lords, I suppose that we would all agree with the noble Lord who has just sat down that we would like to get it right. I am not absolutely certain that the direction in which he was pointing is the right one. I am not absolutely certain that industrial relations in this country are settled by mounted policemen and the kind of scenes which we see on the television at present. I am sure that there is a better way than that. It is a question of getting good human relations, and we must look at this Bill in that context.
In his peroration the noble Earl exhorted us to avoid generalities. I fear that he did not always scrupulously follow his own advice. But he was fair enough to invite us to give the details on which we disagree with this Bill, and I shall hope to respond to that. As briefly as possible, I want to relate Part I of this Bill to an organisation which is affected, the British Airline Pilots Association, which is commonly referred to as BALPA. The problems that they see arising from this
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piece of proposed legislation, if not amended, are shared by certain other organisations, but I take BALPA as a test case and I should be most grateful if this evening or, if necessary, later the Minister would answer some questions which greatly concern them.
One way or another I have known BALPA for about 40 years, first as a lowly member and later as a vice-president and then president. In earlier days I think it might be said that, highly professional as those members were as pilots flying aircraft, they were somewhat amateur in trade union organisation. Some individuals might well have been temperamental, but altogether they were a pragmatic lot, and by training and instinct they wanted something that worked. If one spends a great deal of one's life flying an aeroplane, one tends to have a preference for things that work. BALPA's present organisation, which is set out in the agreed rule book, has been developed to suit their needs and the present shape of the airline industry, and it seems to function effectively. The rule book of BALPA is well known to the Minister's department.
Therefore, my first question to the Minister is: what improvement to BALPA's effectiveness or sense of individual and collective responsibility will follow if the provisions of this Bill as it stands are applied to them? I put that question to the noble Earl as a direct and specific question which he was inviting. In particu-lar, in what way will the Bill's proposed procedures for election to the national executive committee be superior to that tailored by BALPA's members to suit BALPA's needs?
I make no criticism of any other body when I say that with BALPA there is no alleged complication of Left-wing/Right-wing struggles; there is no semblance of any Militant Tendency. It has been a matter of getting a proper balance between sectional interests and between the local experience and head office expertise. The results now appear to justify the retention of the present rules. Therefore, I ask the Minister to consider the possibility of some amendment which would enable individuals to decide, by secret postal ballot, which electoral system they want.
There is no question here of evading democratic responsibility. BALPA, I am told, will be quite ready to accept a requirement that such a secret ballot be held by post at stated intervals. The Minister makes a point about flexibility in the Bill, and the noble Baroness, Lady Cox, appeared to think that in Clause 2(3) the Bill was flexible enough to meet the kind of individual requirements of the kind of organisation of which I am speaking. But my advice is that that flexibility would not enable the special needs of an organisation like BALPA properly to be met. If the Minister can tell me, or prove to me, that I am wrong, then there will be many people who will be satisfied; that is to say, if he can show that the present wording provides, or can provide, adequate flexibility to enable the sort of controlled indirect elections that are now provided for in the rule book of an organisation like BALPA.
I should like to indicate the features that have emerged after much discussion, after a good deal of inquiry and subsequent monitoring, and which it

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would seem to me sensible to retain. The sectional committees are elected by individual direct ballot by section members. Presumably, this will be permitted by Clause 2(3). But that elected committee, from its number, then elects a chairman who then represents it on the central executive. Is there any sensible reason why the Government should take legislative action to stop a procedure of that kind? If there is a logical, intelligent answer to that question, I really should be grateful if the noble Earl will let me know.
That process certainly ensures proper representation of local opinion on the central executive. Other elements of the National Executive Committee are elected by the annual delegate conference, which itself is elected by ballot. Some of those who are elected by the annual delegate conference are elected by virtue of their holding a specific office. I take as an example here—the noble Earl asked for details and I give him this example—the chairman of the technical committee. Over the years I have developed the most profound respect, not to say a little awe, for the occupants of this post. They have made an invaluable contribution not simply to BALPA but to aviation generally.
Elected indirectly as he now is, the personal qualities of a possible chairman of the technical committee are intimately known to the individuals who have the responsibility of electing him. I am not convinced that the individual qualifications of which I speak would necessarily be so clearly recognised if the election was wide open to every individual member of the organisation. A similar argument could be advanced for other officers, and I shall not go into all the details but there are the chairmen of the industrial, finance and pensions committees. They are elected to the NEC by a similar indirect but basically democratic process.
I would go all the way with the Government if they were devising laws to prevent irresponsible minorities from imposing policy upon an organisation, but in fact in the case of which I speak—and I speak of this only because I happen to have personal knowledge of it—the Government appear to be frustrating the considered procedures agreed by highly responsible people. I hope to get some assurances that the claimed flexibility will actually be provided in amendments, or that the Government will look favourably upon an amendment designed to meet the sort of case of which I speak.
The Minister had an especially sparkling passage about granting individuals the democratic right to decide by secret ballot whether or not they wish to take industrial action. I am now suggesting that there be the democratic right to decide by secret postal ballot how they should elect their principal executive committee, and I look forward to hearing from the noble Earl if he will consider an amendment which will make that possible.
5.6 p.m.
Lord Renton: My Lords, the, if I may say so, moderate, constructive and limited contribution of the noble Lord, Lord Beswick, has been in refreshing contrast with other speeches we have heard from noble Lords on the other side of the House, which appear to
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me really to have been inspired by blind loyalty. I emphasise the word "blind" because noble Lords opposite have failed to face up to the dissatisfaction of their own members. Perhaps I may reply to a point quite fairly made by the noble Lord, Lord Scanlon, when he likened the Members of your Lordships' House to the members of trade unions. I think we can say that your Lordships' House works well and to the satisfaction of its Members, and so many trade unions work badly and to the dissatisfaction of their members.
I had the unusual experience of debating on Tyne Tees Television about two years ago against Mr. Arthur Scargill, along with several other Members from both sides of your Lordships' House, on the question of whether your Lordships' House should be abolished. I am glad to say that Mr. Scargill was outvoted by roughly two to one of those who were able to express their opinions.
First, I congratulate my noble friend Lord Gowrie not only on his forthright presentation of this Bill, but also, I hope without being impertinent, on the evolution of his awareness over the last four years of what needs to be done to meet the wishes of members of trade unions. I welcome the Bill, but before I refer to its contents I should like briefly, as others have done, to outline the historical background into which it fits.
I think that the Labour movement, instead of opposing the Bill, should thank the Government for saving the trade unions from themselves. The Government are performing a service to the Labour movement as such in putting forward this Bill. Of course, the trade unions have played an important part in improving the working conditions, the status, and the influence of their members. In the United States they stuck to doing just that, and did not get mixed up in party politics. As a result, let us face it on both sides, the members of trade unions in the United States have done better than in this country.
However, our trade unions decided—and had the right in our free democracy—to form and support a political party. It was acknowledged by Parliament in 1913 that the Labour Party should be largely financed by a political levy based on the principle of contracting out, and the Bill does not disturb that. So far, so good, so far as the Labour movement is concerned. But, as it developed, in my opinion two major mistakes were made which have caused the increasing difficulties, internal dissensions and falling support which the trade unions and the Labour Party have undoubtedly experienced in recent years. I shall come back to that in a moment.
The first major mistake was committing the party and the unions to socialism. When I spoke of blind loyalty earlier, it was blind loyalty to socialism which inspired the speeches which we have heard from the other side, other than that of the noble Lord. Lord Beswick. The second major mistake—and it resulted from the first one—was the practice of calling strikes with political motives, often disguised as attempts to improve wages but which hit the strikers harder than anyone. That practice has been exploited by militants. May I just remind your Lordships of Red Robbo, who cost the nationalised British Leyland £100 million

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through the strikes that he caused? That practice has caused the decline in the London and Liverpool Docks. It has damaged the nation's economy under both Conservative and Labour Governments and, above all, it has angered millions of members of trade unions.
Paradoxically, that practice of calling political strikes has sometimes hit Labour Governments just as hard as Conservative ones. I felt very sorry for Mr. Callaghan and his Government. There are some noble Lords present who were members of it. The Left wing of the Labour movement was brutal to Mr. Callaghan and his Government. The winter of discontent was a major factor in causing the defeat of that Government in 1979.
The Conservative Party, knowing that most people —I talk not only of members of trade unions but generally—were fed up with political and wildcat strikes, promised in 1979, and again further promised in 1983, to change the law so as to make trade unions more responsible, more democratic and obliged to act more in accordance with their members' wishes.
At the last election the Labour Party received only 29 per cent. of the votes polled: a bitter blow to them. But it is a fact which supports the estimate—and it can only be an estimate for there has never been a referen-dum, though there have been public opinion polls, but there have been careful estimates and various of them—that only about 35 per cent. of members of trade unions voted Labour in the last General Election. That tallies with the total of 29 per cent. of those who voted. The reason for that was that most of the trade union members either dislike socialism or dislike politically motivated strikes, or both, and they will not stand for a party which supports those things.
With that background in mind, I turn to the Bill, because those are the facts which are the justification for it. Those are the facts which I say should be causing the party opposite to support the Bill.
As to Part I, it must be right to give the great body of trade union members the right to choose their leaders by secret ballot. This will enable them to ensure that they get the leaders they want instead of politically-minded activists who manipulate the present rules, the present systems, to achieve union power. Similarly, if members suspect that a strike is not genuinely inspired by their own interests—and they may, as I said, lose heavily by striking—they should have the right to make the decision whether or not to strike. The only sure way to ensure that is to have a secret ballot as intended in Part II of the Bill, although we must ensure that it really is secret. There will have to be consideration of this in Committee because I do not think that the Bill is clear enough or firm enough on this as it is. I am sure that all your Lordships were very impressed by the powerful arguments put forward by my noble friend Lady Cox. In that context, perhaps the noble Lord, Lord Beswick, will remember that, as far as BALPA is concerned, ballots at the work place are not feasible because there are so many different work places and many of his members are in the air all over the world. I should have thought that, if one is to have a proper ballot for BALPA, it needs to be a postal ballot with enough time given for the returns to be sent in.
Lord Beswick: My Lords, I was not saying anything to the contrary.
Lord Renton: My Lords, I am most grateful to the noble Lord for clarifying that. I obviously misheard the part of his speech in which he seemed to be saying that he did not think that a total ballot of all the members was necessary for all elections. But I apologise. I am glad he has clarified that.
Lord Beswick: My Lords, I was referring to a ballot for members of the sectional committees, who then, from among their own numbers, make a further election to the central executive.
Lord Renton: My Lords, that is a very satisfactory thought for us to bear in mind. I am grateful once more to the noble Lord.
So I come to Part III. The provisions require each trade union to decide by secret ballot at least every 10 years whether it wishes to go on spending money on political objects. That provision would enable the members, if they wish, to avoid the mistakes made by their leaders in the past in committing them to socialism. It would also enable them to prevent their members from engaging in anti-social militant action in support of an extreme form of socialism, generally speaking. But, speaking for myself, I would not urge members of trade unions to subscribe through their unions to the Conservative Party, to which I belong, or to any other party. They can and do—many do—subscribe individually to our party, but it would surely be far better for the trade unions to be above party politics. Then they might truly become what the late Sir Winston Churchill said after the war they had in his opinion become—though they have fallen back a little since then. He referred to them as one of the great estates of the realm. That is what we want to see them become once more.
Lord Wedderburn of Charlton: My Lords, would the noble Lord extend his encouragement to public companies, perhaps all companies, which might also be thought of as estates of the realm in the same context, not to contribute to political parties and encourage shareholders to make their own way?
Lord Renton: My Lords, quite frankly that is a very big question. There is nothing in the Bill about it. Whatever the answer to that question, that would not invalidate what is in the Bill.That is my answer to the noble Lord.
I have only one major regret about the Bill: that is, it should, in my opinion, have included a redraft in simple, understandable English of Section 17 of the 1980 Act on secondary action. That section has been severely criticised by the Judicial Committee of your Lordships' House, and by the Court of Appeal under both the present Master of the Rolls and his predecessor. I think it is regrettable that one Act of Parliament and one Bill should have passed without any attempt to put that right. Apart from that omission, in my opinion the Government have done well to introduce this Bill but it will be capable of improvement by your Lordships at later stages.
5.19 p.m.
Lord Taylor of Mansfield: My Lords, I listened to the noble Earl with great interest. I thought he unfolded the Bill very well indeed. He waxed most eloquent when he described the need for a greater democratisation of the trade unions. That set my mental mechanism in retrospect. I remember voting by ballot for industrial action, as secretly as it could be under the conditions which were available in the pit yard in 1912. Listening to the noble Earl this afternoon made me wonder whether, since that time, I have been living in a dream world about democracy in the trade union movement.
There is no doubt at all that the Bill before us today is about trade unions in Britain. But, not only that; it is part of a process. This is not the first Bill of its kind since the Tories won the election in 1979. We can state that this Bill is part of a process and that up to now it is the third instalment. But the end of the line in this process has not yet been reached. I wonder whether I may quote an authority for that statement.
"Such a process may have to continue indefinitely, more or less producing a new trade union Bill in alternate years, until we have got it right."
Who said that, my Lords? No less an authority than the Prime Minister herself. So, the indications, on the basis of that statement, are that we are not yet at the end of the line; that this process, like a magazine story, is to be continued.
My noble friend Lord McCarthy, writing the other day, referred to the economic theories of Professor Hayek. I quote from what he said:
"If a more competitive labour market is to be created, it will need to be supplemented by a sustained and major attack on their legal sources of trade union power. Unless this is fully understood, the degree of the Government's commitment to a succession of trade unions cannot be fully appreciated".
In my view the purpose and intention of this Bill (as was the case with the previous Bills of 1980 and 1982) is to weaken, to make impotent, to destroy the influence and power in our society of the trade union movement.
Pursuing the proposals of the Bill, the theme running through it is one of ballots—ballots for this in Part I, ballots for that in Part II, ballots for something else in Part III. The whole of the Bill—and I am not complaining about this—is about ballots for this and that. I have no disagreement with the operation of ballots. When I was in industry—in the industry in which I worked—I was brought up on the principle of ballots. In the coal industry, it was the rule, not the exception, to have ballots on a variety of matters, which I shall mention in a moment or so. All my industrial life I have been used to ballots, and I support them wholeheartedly.
The noble Lord threw out his challenge to us, the Members of the Opposition, when he asked: "What do they object to in the Bill?" So far as I am concerned—and I think that I am speaking for my noble friends—I say that we have no objection to raise to the operation of ballots. The main reasons for this are first, that those who pay the piper should call the tune; and, secondly that, the membership of the trade unions should be consulted and they should be in a position to decide what is the best and safest way so far as the operation of their industry is concerned.
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All my lifetime in industry I have belonged to a union which, in every aspect of its functions and administration, especially in the appointment of its officials, both nationally and locally, was in the vanguard of ballot procedure to determine what the rank and file members wanted. Of the National Union of Mineworkers, previously the Miners' Federation of Great Britain, it can be said that they have as good a record as any in providing, in their rules and constitution, the opportunity for their members to decide and also the opportunity to elect the people who would have the responsibility for carrying out the decisions that had been arrived at. Both locally and at the workplace, from the appointment of area officials right up to national levels, in every case where there were more nominations than places to be filled, the procedure was election by ballot. Our forebears over the years were exceedingly good democrats. They showed wonderful foresight in drawing up the rules and the constitutions so far as democratic processes were concerned. I submit to your Lordships that to them we owe a great debt of gratitude.
This new-found enthusiasm—as expressed by the noble Earl—among the Government, their Ministers and supporters, is quite recent. It is not part of past history; it is part of very recent history. The Prime Minister is the first Leader of the Conservative Party to express such enthusiasm. It may be that she is the second to do so; I am not quite sure about that. But even if she is the second, it does not go back very far, because it was not until about 20 years ago that the Leader of the Conservative Party was elected by ballot by the parliamentary members.
To me this shouting from the housetops by members of the Government, the press and the rest of the media is so strange. In retrospect, may I repeat that I am reminded that as far back as 1912 I recorded my first vote on a ballot paper for industrial action to establish a minimum wage for miners. On two other occasions the same procedure by ballot was followed by the miners' union—in 1921 and 1926. Throughout its long history, since the formation of the rules and the constitution, miners have been able to claim democracy in their union. Many times I have participated in ballots for branch officials, county and national officials, and for many years this procedure has applied throughout all of the British coalfields.
I should just like to make a few observations, particularly about Part I of the Bill. In my own mind there is a little confusion here and so far as I am concerned there is a great need for some clarity, which I hope the noble Earl who is to reply to the debate might supply. If so, I should be very grateful and obliged. I know that different unions have varying procedures, and more than likely the confusion and complication which I have experienced in regard to Clause 1 arises because of this. I am not saying, nor implying, which procedure of which union is correct. What I do know is this: over the years unions have sought to bring democracy into their respective organisations and have sought greater participation by the whole of the membership. I believe that that has been an outstanding quality, an outstanding attribute, of all the unions in Britain.
The Government have said that the purpose of this legislation is to give to union members greater

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democracy—or, to use the words of the present Secretary of State on the Third Reading of this Bill in another place:
"The Bill, the third step in our step-by-step approach, contains provisions which will improve the position of trade unions. Above all"—
I thought that this was queer language coming from the source that it did—
"it will give the unions back to their members".—[Official Report, Commons, 25/4/84; col. 83.]
I ask, in the light of language of that kind, when was it taken from them?
It is no fault of the unions that branch meetings are so poorly attended. That is the fault of the individuals themselves. I think language of the kind that I have just quoted from the Secretary of State is an affront to the many people who have sought to involve the membership in greater democratisation of the trade union movement in Great Britain, and are still doing it. Such words come from a person representing a party whose philosophy and actions throughout history have not been pro-trade union, and history bears witness to the fact that they, the Tories, in the beginning of the trade union movement not only did not want it but sought to prevent it by deporting the pioneers—namely, the Tolpuddle martyrs—to Botany Bay. In the light of history, my conclusion is that the Tories have at no time been over-burdened with affection for the trade union movement.
Clause 1 refers to the election of the principal executive of a union. How shall it be elected? By ballot—that is fair enough. By what method and for what period? I seek enlightenment from the Government on this aspect. The union with which I am best acquainted, the National Union of Mineworkers, has at present two full-time officials plus national executive representing the whole of the British coalfield. This executive at the moment is drawn from the area associations. They are elected for the area, and in addition the two full-time officials, the president and secretary, by virtue of their office, become members of this national executive body, ex officio. But in the event of a tie in voting—this is the important point—the president, under the rules, is privileged to give a casting vote. Despite the president being a full-time official and one of the executive committee's ex officio members, I wish to ask the Minister whether he would make forfeit the position of a full-time official having been elected by a ballot vote and, by the rules, an ex officio member of the executive committee, with the right not of a vote but, only in the event of a tie, a casting vote. To me this is a very interesting point and perhaps the noble Earl the Minister can and will enlighten your Lordships on this point.
My time has gone, my Lords, I shall say nothing more at this stage. There may be Committee points about Parts II and III of the Bill. The only thing that I shall say about Part III before I sit down is this. To those of you who do not know it, may I tell you, and to those of you who do know it, may I remind you, that the Labour Party is the child of the trade unions and it is only right and proper that it should be helped and sustained by a political levy from the trade union movement.
5.38 p.m.
Lord Allen of Fallowfield: May I, as a preamble to my short statement on this Second Reading debate, say that unfortunately I shall not be able to stay to the conclusion of the debate because for family reasons I have to return to Manchester this evening. I hope that the House will forgive me for not being able to stay. I, like my noble friend Lord Taylor of Mansfield, listened with great interest to the noble Earl, Lord Gowrie and his presentation and defence of the Government's Bill. I am sorry that the noble Earl is not in his place at the moment because I wanted to make what I regard, and he may regard too, as a pertinent comment about his presentation. He described the Bill, among other things, as the Government's "most significant achievement". I wonder whether, on reflection, he and others who believe that might prefer to leave the judgment to the historians. For my part, I am prepared to. I do not see it in the light in which it was described by the noble Earl, and I am sure that there are many thousands of people in the United Kingdom today who take a similar view.
I, too, listened with great interest to what the noble Earl had to say and I also noted, by the clock, that he took approximately fourteen minutes to do an attempted demolition job on the trade union movement and roughly six or seven minutes telling us what the Trade Union Bill is all about. The latter, of course, is most welcome but the demolition job that he attempted on the trade union movement was most unwelcome, and there is real reason for inciting fears—fears which have been expressed in this House by those who have preceded me—that the Government's intention may go well beyond that; in other words, to do what they can in the process of time to get rid of the trade union movement. I hope I am wrong, but one cannot help but come to conclusions of that kind after hearing the presentation of this Bill that we have heard today.
Perhaps in talking about the demise of the trade union movement arising from this Bill, or about one's thoughts arising from it, one is being a little too premature. Is that something we have to sit back and wait for? Maybe it is. My criticism of the Bill is a basic and general one. I have no intention now of going into the detail of the various clauses of the Bill. I, like others, believe that the appropriate place for that is in Committee; but I should like to say that in my considered opinion the Bill is of no help to the future of this country in achieving productive industrial relations. It will do little to curb the outbursts we have been seeing every day on our television screens during recent weeks and months which many of us would prefer not to see. This Bill will do nothing to stop that.
The grave danger we are in, as I see it, at the present time is that the dogmatic adherence by the Government to proposed legislation will prevent them from getting on with the jot)—and I see it as part of their job—of assisting in the reform and the extension of collective bargaining in the United Kingdom. The proposed laws embodied in this Bill, like earlier employment laws, do not help to achieve productive industrial relations based on consent and co-operation, as opposed to confrontation. In all my

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industrial relations experience, I have never believed that there is any panacea for these kinds of problems—and, if there is, it is not in the form of the Bill before us today.
I have said before in this House, as have many others who have spoken in debates of this kind, that whatever happens the unions should not be forced into a position—that is the risk run by some of the proposals in this Bill unless it is seriously amended—where they acquire the irresponsibility that comes from what may be described by the pundits as mass disobedience. I have always argued, and I see no good grounds for changing my views at the present time, that the best antidote which is needed now and in the near future is good management and sensible, responsible trade union leadership at national, regional and plant level. That will not come by compulsion. It will not come by legislation of the kind that is enshrined in this Trade Union Bill; nor will it show results overnight. They have to be worked for.
Whatever thoughts we may have about the current industrial relations scene, and particularly that part of it which is at present feeding the mass media and receiving much public attention, there can be no denying that the problems facing the United Kingdom are competitiveness, control of inflation, the use of capital and the need for a response to new technology. Lack of growth, unemployment and social inequality, to mention but a few problems, can only be dealt with by a genuine partnership between Government, employers and trade unions. Some of us who have spent many years in the trade union movement in accredited positions have striven very hard to try to secure that; but I regret to say that legislation of this kind fans the urges of the militants, as opposed to those who want to be responsible. So those who hold views contrary to those I have just expressed, whether they be on the trade union side or on the employers' side, and who pursue policies in direct conflict are, wittingly or unwittingly, selling themselves and the country short.
Industrial relations, like pay, is but one of a whole complex of economic, industrial and social factors which are central to our economic future. The policies being pursued by Government now and during recent years are, in my opinion, doomed to fail the nation. The reason must be clear to all who seek the truth. Sadly, there is no rapport between those who believe their policy is right, as evidenced in this Bill, and those who are expected to conform with its operation. Sooner rather than later the accent will have to return to one of co-operation and fulfilment rather than the present confrontation and frustration, if the problems of the 1980s are to be tackled. Good industrial relations, the acceptance of agreed policies by Government, by management and by trade unions are in my view, critical to Britain's competitiveness. It is a matter of deep regret that I do not see this Bill as making a contribution to this objective. It is also regrettable to me, as it is to many others who are interested in this subject, that we do not have an industrial policy—and by policy I refer to the extent and manner of Government intervention in industry and commerce.
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However, what we do have is what many would describe as the worst of all worlds; a Government proclaiming a policy of non-intervention in words while intervening extensively in deed. Having said that, I recognise, as I am sure we all do, that success will ultimately lie with companies or the like and not with government. Given this, I acknowledge that the contribution the Government should make is made within a tight framework appropriate to industrial imperatives, and not the law.
Finally, I see in this Bill, as do others who have spoken prior to me, a further attack on the trade union movement from this Government. The Bill itself amounts—and let us not bandy words—to gross interference in trade union affairs. The Government and their spokesman today believe that this Bill will improve democracy. I do not. How can this be justly claimed when the Government, at the same time, propose in the Bill to squeeze union rules and constitutions into the shape that the Government prefer, regardless of the wishes of members or of the varying traditions and practices of unions?
The Government claim to be giving unions back to their members is utterly false and a sick joke. There can be no justification for imposing on trade union members a single set and final pattern of electoral practices in preference to other forms of trade union democracy which have been tried and tested and which can be, and often are, changed by the membership as a whole.
It is not difficult to see the validity of the unions' case when they claim that all trade unionists should be given the right to vote on whether they wish to keep their existing constitution or to adopt the Government's model. That, I understand, the Government will not accept. I think it appropriate to ask why. Are they worried that, if they give members that choice, they will rally behind their unions and reject the Government's Bill? Those are considerations which are uppermost in the mind when one reads the respective clauses in this Bill and I hope it will be seriously amended at Committee.
5.52 p.m.
Earl De La Warr: My Lords, I intend to confine myself to speaking to Part I of this Bill. The reason for that is that I have always believed that if we could achieve secret elections by all members of the trades unions for their executives we should be achieving the most fundamental requirement that is needed in order to improve the working of the trades union movement and its relations with employers and with the Government.
I believe that this sort of legislation—for legislation it has to be—is far more important than any laws governing behaviour, such as we have had in the past two years. That does not mean that I have not gone along all the way with the last two Acts—the Act of 1980 and the Act of 1982. But I will never depart from my basic premise, which is that the vast majority of trades unionists in this country are moderate men who want only to get on with their job and do not want to play politics.
To that, I will add that I will not depart, either, from a premise that at this moment, to a degree is extremely

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dangerous to this country, the trades unions are being manipulated by Left-wing militants who in many cases are doing things which they know to be against the interests of our economy and very often of their own people. I make that assumption as something that is self-evident and I shall not seek to prove it further. So when it is said that what this Bill seeks to do is to return the unions to their members, I understand very well what is meant and I sympathise with the person who put it in those particularly apt words.
Before I go on, it has been said twice in this Chamber that recently a statement was made to the effect that it was necessary to have trades union legislation every two years until we got it right. I must confess that this had passed me by, but I have been told by two people who I trust that this was said by our Prime Minister. Never mind who it was said by. I find myself in the unfortunate position of having to say that if that was said I regard it as dogmatic, obsessive and desperately dangerous, and as a good Tory I dissociate myself utterly from it. I should like to hear other Tories saying the same thing.
I want to deal for a moment with a little of the recent history of legislation and I start with the 1980 Act, because your Lordships will remember that Sections 1 and 2 dealt with the certification officer. They laid upon him duties to help financially with the establishment of secret balloting and at the same time gave him a duty to make sure that these ballots were conducted correctly. Section 3 dealt with codes of practice and I certainly had the impression that fairly shortly after that Act we were going to have a code of practice on the subject of balloting. In a debate in April 1981 on the Green Paper on trades union immunities I recall taking the Government to task because they had been dilatory about the question of balloting, had produced no code of practice and I begged them to get on with it. I think my noble friend Lord Gowrie will remember that because he was sitting there at the time. It did not happen then, and it did not happen in the 1982 Act.
I therefore recall to your Lordships something else, which was an amendment that I proposed on that occasion. I cannot remember the date but I remember the time. It was in fact at 2.40 in the morning. The history of that amendment is that it was instigated by the Conservative trades unionists. It was to have been put in another place by my honourable friend the Member for Mid-Sussex, Mr. Renton, but they ran out of time there and I moved the amendment in this House. It was to the effect that the unions should be given two-and-a-half years in order to reorganise their rule-books in such a way that each union's rules made it obligatory that every five years there should be a secret ballot for the national executive.
That was not accepted by the Government, nor was it accepted by the noble Lord, Lord McCarthy. I am sorry that the noble Lord is not here because he was extremely insulting to me at the time—I do not hold it against him, because he is a great friend of mine—and I had it in mind to say something to get back at him. Nevertheless, the Government promised the most recent Green Paper which we had not very long ago and it is as a result of that that this long awaited and important Bill comes to us. I very warmly welcome its intentions. However, I have to say—and I say it with
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personal regret to my noble friend Lord Gowrie, because he will remember that I worked closely with him over the first Bill and I am sad that he is the person I have to fall out with—that I object to Clause 2: the "requirements to be satisfied" in relation to elections. I object in particular to subsections (5), (6) and (7) of Clause 2. For example, subsection (7)(a) says:
"The ballot shall be conducted so as to secure that—(a) so far as is reasonably practicable, those voting do so in secret".
I know that the 1980 Act used the same wording; but is it good enough, on a subject so important as this, for us to say "secret in so far as is reasonably practicable"? I find myself unable to accept that wording.
I take as much exception to Clause 3 which deals with the remedy for failure to comply with the balloting requirements. It is left to a member of the trade union to go to the High Court to complain that the very vague requirements set out in Part II have not been complied with. How does the High Court set about obtaining evidence of the circumstances in which these workplace ballots may have been conducted, possibly with malice aforethought? And how on earth do they make what are called in the Bill enforcement orders? I presume this means that they must describe the procedures which should have been followed. Is that the duty of the High Court? I think not.
There are three principles which must be satisfied, and they are not satisfied yet. First, every trade union member must receive ballot papers at home, and the papers must be in a form approved by the certification officer. This means, secondly, that each union will need to keep an updated, central register of the names and addresses of members. This has been referred to as the logistical difficulty. But we know that it can be done. It was done by Mr. Chappie and it was done by the noble Lord, Lord Scanlon. I suggest that it is one of the three cardinal principles. Finally, when filled in, the ballot papers must be posted for processing by an independent body. That is why I welcome so warmly the magnificent case which was so eloquently and brilliantly made by my noble friend Lady Cox.
Some of your Lordships may have read last week a second leader in The Times about postal ballots. That great organ also took the Government to task over this matter. May I read the last three sentences to your Lordships:
"Since nearly half of the TUC Membership still elects its trade union leadership at branch meetings, a change to postal ballots could have a decisive influence on the character and responsibility of trade union leaders. Not surprisingly, the left-wing element in the TUC is against postal ballots, using the curious argument that postal balloting denies the masses their democratic rights. Moderate trade unionists, on the other hand, must be dismayed at the lack of support they have received from the Government on this point. There is still time to amend the Bill".
Yes, indeed, there is still time to amend the Bill, and I must say to the Government that they can confidently expect that they will be pressed very hard from many sides of the House and by many people on a matter of such fundamental importance. I beg my noble friend to take on board not only what I have said but what has been said in a much better way by other people and see whether or not he can go at least some part of the way towards helping us on this matter about which we, and such a large proportion of the public, feel so deeply.
6.7 p.m.
Lord Houghton of Sowerby: My Lords, in the debate which is to follow I notice that almost as many noble Lords wish to discuss the protection and conservation of our heritage as those who wish to take part in this debate. That is how it should be. Frankly, the future of our heritage is probably more important than the future of the trade union movement.
The noble Earl, Lord Gowrie, made an observation with which I must deal. He said that on this issue Labour's position is one of abstention. Unfortunately, when trade unions are under discussion, not only do the unions go into the dock; the Labour Party and Labour governments also go into the dock. This is inevitable because of the close relationship between the three. It is not the word "abstention" which should be used against the Labour Government. The word should be "frustration"—long, painful and sometimes bitter frustration. After all, it was a Labour Government which appointed the Donovan Commission. Although six years would appear to be long enough to formulate proposals for reform and change in the structure, constitution and practices of the trade union movement, at that time it proved to be almost impossible.
Your Lordships will remember that the Conservative Party made a manifesto commitment to legislate on trade union law and reform. In 1970 they came to office—as a result of discontent, probably, with the trade unions and the Labour Government—with a commitment to legislate. The result was the Industrial Relations Act 1971. The timing was sadly wrong from a Conservative point of view. Mr. Heath badly needed that second term, from the point of view not only of trade union legislation but of his economic policy, too. But the whole of the trade union movement, and its attitude, was soured by the 1971 Act. On that account, Mr. Heath was never able to overcome its resentment and lack of co-operation.
In 1974, when Mr. Heath badly needed an extension to his period of office and the co-operation of the trade union movement, he did not get it. When he fell, his legislation collapsed with him. The Labour Government came to power with a trade union movement that was so discontented and resentful at the experience they had under the Conservative Government that it took several years for the Labour Government to establish any kind of basis for co-operation and concentration on a change in trade union law. It was a most disappointing experience, but I believe that it was gravely prejudiced by the action in 1971 of the Conservative Government, who had their Bill wrong and their timing wrong.
I believe that the Government have their timing wrong now. In my opinion, this is a very sad time to be discussing the niceties of trade union constitution and elections, when the turmoil outside is very threatening indeed. What is needed now is atttention to the underlying causes of present discontents and militant action. When the noble Earl, Lord De La Warr, referred to the manipulation of the trade unions by Left-wing militants, the question can be asked: how can they manage to do this? If moderate leadership finds no response from the Government—or, in the
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case of private enterprise, from employers—then militant action and militant leaders will replace them.
I remember a comment made by the late Arthur Deakin at a Trades Union Congress, when he said that moderate leadership is in conflict with the rank and file everywhere. When moderate leadership is in conflict with the Government and employers, then the militants are ready to take over with their more dramatic and drastic remedy for the situation. It gives the members an opportunity to express their emotional discontent.
This is a lesson that has to be learned. At the moment, the Government should be concentrating on why it is that the public sector is in such disarray, turmoil and deep discontent. Why is it that after all this time governments have failed to achieve a satisfactory basis on which to settle the pay of their own employees and those associated with them in state enterprises? What right do the Government have to talk to employers about industrial relations, achieving harmony and establishing a peaceful basis for the settlement of disputes, when the Government's own house is in such a dreadful mess? This is the aspect that should be engaging our attention and not a Bill of marginal importance such as that which is now before us.
Two other points can be made. The first is that greater democratic control comes much better as part of the constitutional evolution of any institution or as a result of the upsurge for change that sometimes erupts in all institutions where substantial change is desired. That is much better than having democracy imposed upon those bodies by an authority whose motive is itself in question. We know why the Conservative Government want changes in the methods of election, free strike ballots and all the rest. They want to achieve different results from the union. They want to get different reactions from the union. They believe that this is the way of doing so. They may prove to be bitterly mistaken. Certainly the motivation behind enforced democracy has to be examined when it is being enforced by political parties.
Political parties, whether in Government or outside, should be very cautious in making proposals for imposing democracy on other institutions. After all, we are not very good at reforming our own. We are really not entitled to talk to the rest of the country about modernisation, and how to adapt our institutions to the pressures of the time and to the demands of the public for this and that. We are very slow to change, and that point has been made already in this debate.
The atmosphere in which this Bill is brought before the House is very unfavourable to dispassionate judgment. I am surprised that we have not had more emotional outbursts from this side of the House, although it is proving to be quite an outspoken debate. I believe that the Committee stage will offer an opportunity for some frank exchanges over how we feel about reforms which, so far as I am aware, have not been demanded by unions. If the unions want what the Bill provides then there would be little difficulty in attaining it—if the unions' members are strong enough in their demands.

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This brings me to my second point. We should be loath to impose changes on unions whose members are really capable of bringing those changes about on their own, if only there is the determination to do so. If there was the determination behind moderate councils and moderate policies and moderate steps, then moderation would rule the day. In many cases the moderate point of view is present but unfortunately it becomes the apathetic point of view. It becomes the non-participation point of view. That leaves the field open to those of greater determination and greater conviction about the way in which they want to go. All these are very important aspects of this Bill.
In my remaining minute or two, I want to refer to Part III of the Bill, which concerns the political levy. The House will remember—because, after all, there are enough noble Lords old enough to recall 1926—that after the general strike in 1926, Mr. Winston Churchill, who was then the power in the land although he was not Prime Minister, brought about the Trade Disputes and Trade Unions Act 1927. That legislation did what the Government have threatened to do again this time. But they have stayed their hand on reaching agreement with the trade unions on an alternative method of approach for the time being; that is to say, the replacement of contracting out of the political levy by contracting in. That provision made grievous inroads into the finances of the Labour Party after 1927. It lasted until the Act was repealed in 1946, when that change was introduced by the Labour Government in 1945.
If that provision was in this Bill, it would be the most wounding aspect of the third part of the Bill. The Government are staying their hand—but the threat is there. They have told the unions that they must publicise the right to contract out. They say if that is not effective they will introduce legislative obligations to make this change. It may be part of what the Government want to see, and that they want to get it right.
I regretfully say that when the Prime Minister says we will go on doing this until we get it right, what she really means is, "I will go on doing it until I get it right". That is what the noble Earl, Lord De La Warr, was really hinting at only a few moments ago. But I can say by personal reference what he felt it impolitic to say. That, as I see it, is how this particular matter rests.
One of these days, the whole question of political finances will have to be gone into. This is not a question of whether trade unionists should contract in or contract out of a political levy, or of whether trade unionists should contribute to political parties. This is a matter of how we are going to finance our politics. This applies to all politics. At the same time the question arises on how the Conservative Party finances its political activities. The Trade Union Bill, being a trade union Bill, fastens this problem upon the unions. But how we pay for our politics is a national political matter which goes to the very root of our democratic parliamentary system.
The committee of which I was chairman, along with my noble friends Lord McCarthy and Lord Wedderburn, produced what I would call the presumed wisdom on this subject. What we felt, and
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what I feel most strongly, is that both parties are far too heavily dependent on finances from sectional interests. They are both in thrall to sectional interests. That is bad for politics and for democracy. Although our committee recommended the injection of a modest amount of state aid in order to lessen the dependence of the major political parties on their traditional supporters, I would go much further today. The financing of political parties by corporate contributions or subscriptions should be phased out altogether. I see no reason why company boards and union executives should be playing their hands in the name of and with the power of other people in the political arena—because they are playing their hands with that support, although not always, in power politics on the size of their memberships and their contributions to the political funds of both sides.
The Government say that they want to put the unions back into the hands of the members, but they do not at the same time say, "We are going to put the companies back in the hands of the shareholders". They say nothing about that. The Government are not qualified to go for the union side of financing the Labour Party without at the same time owning up to their own weaknesses and coming forward with proposals for corresponding action for shareholders and others with an equity interest in companies which are making political contributions.
I have spoken for a quarter of an hour, which is long enough and probably too long. With the leave of the House, I will sit down.
The Earl of Gowrie: My Lords, I am most grateful. Before the noble Lord sits down may I say that he is making such a powerful and eloquent speech that I feel constrained to remind the House that under the Bill the situation remains exactly as it has been since 1913.
6.22 p.m.
Lord Campbell of Alloway: My Lords, it is always a pleasure to follow the noble Lord, Lord Houghton of Sowerby, even if on this particular occasion I cannot, unfortunately, agree with any theme of his detailed analysis; in particular the last which is concerned with the state funding of political parties.
To return to the main thrust of the debate, the noble Lords, Lord McCarthy and Lord Scanlon, with their vast experience of union affairs—and I say this with the greatest respect—debate in blinkers unless they recognise that it is the rank and file membership which demands this Bill to avoid the destruction of the trade unions.
Lord Dean of Beswick: Where, my Lords?
Lord Campbell of Alloway: My Lords, to stand the situation on its head, this sort of ritualistic Humpty-Dumpty attack on Her Majesty's Government suggesting that the Bill is an assault on trade union rights in order to destroy the trade unions, and that unions should be left alone to do as they please, makes no sense at all. Indeed, it savours of unreality and of political gerrymandering—the term used by the noble Lord, Lord Scanlon, and laid at the door of Her Majesty's Government.

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The Bill stands to be judged not only in relation to Donovan and In Place of Strife but also in the light, or, rather, the darkness of the changed situation today. It is a situation—and let us face it—where militant officials mock the ballot box, put to scorn their members who wish to use it, incite civil disobedience in breach of the civil and criminal law and set member against member on a fratricidal course of violent intimidation. It is a situation which the noble Lord, Lord Houghton of Sowerby, truly described as the turmoil outside. In these circumstances—for these are the circumstances—is it surprising that there should have been no response to the invitation afforded in January 1983 by paragraphs 127(a) and (b) of the Green Paper to discuss the subject of Parts I and II of the Bill?
Lord Beswick: My Lords, may I ask the noble Lord on what evidence he says that there was no response to the invitation to discuss these issues?
Lord Campbell of Alloway: My Lords, that is my understanding of the matter. If the noble Lord can refute me and give me details I would indeed reply.
Lord Beswick: I have a letter dated 4th May 1984 in which the organisation of which I spoke offered to discuss them with the Secretary of State.
Lord Campbell of Alloway: My Lords, my information—and I may be wrong but, if so, I shall withdraw—is that on paragraphs \27(a) and (b) there was no dialogue. On paragraph (c) of Part III there was. If I am wrong, I shall stand corrected by the noble Lord, Lord Wedderburn, or by my noble friend Lord Gowrie when they reply. But that is my true understanding of the matter.
Lord Beswick: I am sorry, my Lords, I gave the wrong date. It was 9th December 1983, when Mr. John Lyons, on behalf of several unions, offered to see the Secretary of State.
Lord Campbell of Alloway: My Lords, my understanding is that there has been no dialogue. I am afraid that this is taking time and I was trying to make an eight-minute speech. If the noble Lord, Lord Beswick, would be good enough to point to any occasion when there was a dialogue or any occasion when there was a meeting, and who was present, when Parts I and II were discussed, I shall be delighted to withdraw because I believe in consultation. I restate my belief—that is all it is—that on the information I have there has been no consultation on paragraph 127(a) and (b). I shall withdraw if I am wrong.
The Earl of Gowrie: My Lords, I hesitate to intervene, and I take the point that my noble friend made about time, but I might be able to clarify the issue. The point is that the TUC refused to discuss the Green Paper on trade union democracy with my right honourable friend the then Secretary of State for Employment, Mr. Tebbit. That, I believe, is the substantive point that my noble friend is making and he is perfectly right.
Lord Campbell of Alloway: My Lords, I am very much obliged to my noble friend because we can all make mistakes and I should have apologised immediately to your Lordships' House if I had been in error.
To draw back the threads of my speech I said, if your Lordships remember, that one has to look at this Bill and judge it in the light of Donovan and in the light of In Place of Strife in order to retain a fair perspective. As to Donovan, the Part I proposals would have been wholly acceptable. That can be found in paragraphs 627 to 647 of the Donovan Report. The Part II proposals, which impose no obligation whatever on the unions to abide by the result of a ballot, were not before the Royal Commission, or so it would appear from paragraphs 426 to 430 of the Donovan Report. Indeed, as the noble Lord, Lord Rochester, was good enough to remind us. they are really in essence, in the form proposed in Part II, post-Green Paper. Of course they did not appear in that form in the Green Paper.
As to In Place of Strife, what does it say relative to Part I of the Bill? This is the Labour Party document. It was concluded:
"the Government considers that the present legal requirements relating to the rules of trade unions are inadequate, and should be extended in the interests both of the unions and of their members".
It further says:
"it is essential that unions should be able, and be seen to be able, to conduct their business according to clear and comprehensive rules, and to deal fairly with any dispute between the union or its officers and the individual member".
Those statements are from paragraphs 107 and 108 of In Place of Strife, 20 years ago. This was in the interests of compatability:
"with generally accepted standards of tolerance and fair play".
That was the Labour Party's policy 20 years ago, and I quote it in relation to Part I of the Bill.
I come now to Part II of the Bill and In Place of Strife—the Labour Party's policy 20 years ago. At all events, it was regarded that major official strikes should be the subject of a strike ballot and that the Secretary of State should have discretionary powers to order the holding of a ballot on the question of strike action. That was proposed in paragraph 98 of In Place of Strife—the Labour Party's proposed policy.
The index to Volume III of those Crossman diaries affords the key to much of the relevant discussion in the Labour Party at the time as an aid to the understanding of this approach. But, with the greatest respect, what is not understood is the attitude of the Labour Party on this subject today. It is idle to maintain, in the light of those quotations, that this Bill engenders confrontation. Indeed, against that background and perspective it is wrong to stigmatise its measures as interventionist, for surely it must be common ground that some regulation of the internal management of trade union affairs has been requisite for some 20 years. In his opening speech my noble friend the Minister mentioned a period of 30 years. Is it not apparent that little or nothing has been done by Governments of either party—this is not a party political point—by legislation, and little or nothing has been done by the unions by self-regulation to introduce the requisite reform? Is it not also equally apparent that the unions are either unwilling or unable

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to put their own house in order, and hence the need for legislation?
It may be asked, legislation for what? It is legislation for this purpose: quite simply, to seek to ensure that the voice of the rank and file shall be heard, that the will of the rank and file shall be heeded and, as the noble Lord, Lord Taylor of Mansfield, put it, that he who pays the piper shall call the tune. In all this the Bill affords the minimum which the rank and file trade union member could have been led to expect from our electoral promises; and it also, as I have sought to demonstrate, broadly conforms with Donovan and with In Place of Strife.
Why do I say the minimum? It is because Part I of the Bill in no way seeks, on any objective analysis, to impose model rules (they were considered in Donovan) but merely superimposes and provides for enforcement machinery in the courts—a superimposition on about 150 different sets of varying rules—on an aspect which impinges upon freedom of association, which is a fundamental democratic concept. Is there not a compelling case for this reform as a minimum, if only to end the iniquity of the block vote?
I should like to deal in passing with the objection of my noble friend Lord De La Warr. With the greatest respect to him, it simply is not understood. The courts would have no problem, apart from the ordinary problems which exist in every case, of finding the facts and making an adjudication, and the decision of enforcement is really quite ordinary and totally straightforward.
Why is Part II of the Bill a minumum? It is because it in no way—
The Earl of Onslow: My Lords, may I just ask for a little clarity from my noble friend on his point about the courts? In The Times leader of 10th May is mentioned the case of the CPSA and Mr. Butcher and Mr. Elliot, who go to court to complain about the malpractices of certain officials, and they had to be stopped because they ran out of both money and time.
Lord Campbell of Alloway: My Lords, I am of course grateful to my noble friend. Money is a problem for any litigant, unless he has legal aid. I am afraid there is nothing that the courts can do about that. As to the facts of the case to which he refers, if he had given me notice of the question, I should have been able to look at them and perhaps give him a slightly more satisfactory reply. But in view of his most helpful and courteous intervention, I should like to say that, as a rule, the courts do not have difficulty in assessing and adjudicating upon matters of fact, and certainly not the High Court.
I come back to Part II of the Bill, if I may. This relates to the point that I was seeking to make to your Lordships—that this Bill affords the minimum. It affords the minimum in Part I in the way that I have sought to demonstrate. I now seek, if I may, to demonstrate that it affords the minimum in Part II. Why?—because it in no way binds the union to adopt the result of the ballot. The union is enjoined to hold
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a ballot only in accordance with statutory requirements before industrial action is authorised or endorsed, in which event industrial action may be taken without loss of immunity. This is a minimum measure of safeguard which affords a very wide measure of self-regulation to the unions, and the objection which was taken to Clause 8(4) is simply not understood.
As to Part III of the Bill, of course I understand the points made by the noble Lord, Lord Rochester, which to some degree marry to the points made by the noble Lord, Lord Houghton of Sowerby. But, as I understand it—and I speak always subject to correction by any of your Lordships—there was a positive response by the unions to paragraph 127(c) of the Green Paper. The form of Part III represents the measure of accommodation struck between the unions and the department in the result. If that is right, it is a very good thing. It opens the door to a fair, reasonable and practicable solution to the problem of stale contracting-out resolutions—and this by self-regulation. This is, again, the barest minimum of measures of safeguard, which in the absence of self-regulation will take effect on 31st March 1986—which is, after all, your Lordships may think, a fair period within which to get matters straight.
I come to the end. Before I conclude, I must deal with the question of mandatory postal ballots. Although it had been dealt with otherwise, this affects all three parts of the Bill. This attracted the views in favour of mandatory postal ballots, expressed by the noble Lord, Lord Rochester, my noble friend Lady Cox, perhaps to some degree my noble friend Lord Renton and certainly my noble friend Lord De La Warr. With the greatest respect, I beg leave to take a different view. I agree that to some degree it is an open question but I favour workplace ballots. Of course, I only speak from what little knowledge and experience I have—and it is little.
What are the reasons? First of all there is a meretricious attraction in this concept of a postal ballot. It is meretricious because it is evident from the decision of Mr. Justice Walton in the case of Brown v. AUEW in 1976, which concerned an election for the post of a union divisional organiser by postal ballot and indeed from the infamous ETU case, that the holding of a postal ballot affords no safeguard against malpractice. I referred to the Brown decision. I am relieved to see that the noble Lord, Lord Scanlon, is in his place. The noble Lord, Lord Scanlon, will have occasion to remember that he was directly concerned in the case, and indeed mentioned in the judgment.
That is the case, far more than the ETU case which is different on the facts, on which I rely to seek to persuade your Lordships, on later examination that there really is no safeguard against malpractice in the system of a postal ballot, as distinct from a workplace ballot. If the object is to avoid malpractice—and that must be the object—this object is surely best achieved by consultation. It is best achieved by self-regulation by the unions who support the democratic process and wish to ensure that ballots are fairly conducted. In my submission, that is far preferable. The problem of the discarded forms can easily be dealt with by a system of control which can be devised quite simply. It would be

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contrary to the general principle of this Bill to over-legislate. This could produce an unacceptable rigidity and engender resentment without affording any safeguard.
Furthermore, on terms of practicability on turn-out, if the voice of the rank and file is to be heard, according to my information as to current general practice, more than twice as many members vote in the workplace ballots than in the postal ballots. At this stage the case against the workplace ballots in favour of postal ballots is therefore not sufficiently clear to warrant acceptance of the views of Frank Chappie, some of the opinion polls, Aims of Industry, and some views expressed in their favour in your Lordships' House today.
Earl De La Warr: My Lords, would my noble friend give way for one minute? Would he be good enough to include the Conservative trade unionists in his list of people, please?
Lord Campbell of Alloway: My Lords, I apologise for speaking so long but I have had to seek to deal with questions that have been put. Yes, I will include anyone in the list whom any noble Lord wishes me to include.
I agree that if trade unions are to contribute as a powerful essential institution to our way of life, a vital machinery of collective bargaining, one hopes perhaps as the agency for the conclusion of no-strike agreements having a legally binding effect with built-in arbitration procedures, then the members must have a fair say in their choice of voting members on the principal executive committee and in the taking of industrial action.
This Bill, in all its aspects, reflects the minimum measures of safeguard and reform which the electorate and the rank and file were led to expect by this administration when it was returned to office. The nature of the current internecine struggle between the membership of the NUM affords but one example of the need to introduce these proposed reforms into the internal management of trade union affairs. I hope your Lordships will accept my apology: I have never spoken so long in your Lordships' House and it is a most sincere apology.
Lord McCarthy: My Lords, before the noble Lord sits down, I wonder if he would agree with me. He says the members demand a change. He says they demand Part I of the Bill. Would he therefore accept an amendment which was designed to find out whether the members would prefer their existing arrangements, so that Part I of the Bill only came into operation if members voted against their existing arrangements? Would he support an amendment of that sort?
Lord Campbell of Alloway: My Lords, it was first of all put, "Would I accept?" I cannot accept. I am not in a position to accept anything. But if this were put forward I would have to consider the position. I am certainly not prepared at this stage to pre-empt my attitude to that.
6.47 p.m.
Lord Bottomley: My Lords, the noble Earl the Minister in opening the debate said that, of the legislation passed by Conservative Governments since 1979, this piece would be most endurable. In his heart he cannot believe that. I should be very disappointed if a future Labour Government did not repeal this vindictive legislation. The trade union movement was in the forefront of the struggle for freedom. It was freedom from want, freedom of the people, freedom of the press. Now their own freedom is being challenged by the Government. For the first time in trade union history, a Government are attempting to regulate the internal affairs of trade unions.
Trade unions know how best to run their own affairs. They do it in accordance with the rules democratically determined by their members. The membership will resent being told what to do by their employers and the state. The present Bill assumes that the trade union leaders force their members to go on strike. I know from personal experience, as a trade union officer in the past, that this is not so. Indeed, those members directly involved by an injustice or something that they want put right are eager to take strike action. Trade union leaders very often have to create a situation where they control it. Also many employers and experts in industrial relations recognise the part played by trade union leaders in making things easier and not aggravating them in the way suggested by those who are arguing in support of this Bill.
Indeed, the assumption that trade union leaders force their members to go on strike is totally false. Trade union leaders are conscious that if they have a strike it dissipates the financial resources, money which could be used in other areas much more beneficial to the membership of the trade union.
This Bill will require unions to hold ballots before there can be a strike. However, if members of a trade union take unofficial action, they will not be liable to the penalties that would be imposed if the strike was official. This is a ridiculous situation. If a ballot is required to authorise a strike, then, equally, there should be a ballot to say when the members go back to work. It should not be the state which determines the form of democracy and constitution. Each union is able to decide the system which is best for its members by its own methods. This is also true of countries. Democratic procedures and constitutions vary in different lands. The United States, European countries, and others, have different systems to ours of electing a Parliament. Are we, therefore, to say that their systems are less democratic than our own?
I am not alone in criticising the Bill. The informed press has had its say about the matter. The Financial Times said that it was,
"needless interference in trade union affairs".
The Guardian said that the legislation was "one-sided and unfair". The Observer called the Government's Green Paper:
"a shallow, poorly researched document".
What the Bill does is to alter the balance of industrial power. It is equivalent to a government introducing legislation which required a board of

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directors to ballot a company's shareholders every time it wished to make a major change in its business. The board of a company is best able to judge what is in the best interests of the company. If it is wrong, the shareholders will soon let it know. The same is true of a trade union. An executive is elected to do what is required to meet the best interests of its members. If it does not do that, the members soon let it know. Indeed, there are more changes in trade union executives than on boards of directors. Trade union leaders, like company directors, are desirous of giving the best possible service to their supporters. A working man without capital has nothing to sell but his labour. When a capitalist has a product to sell, he dictates the price and is certainly not blackmailed or compelled by legislation to accept less than what he considers it worth.
That part of the Bill dealing with the political levy has been mentioned by many. Naturally, I want to comment upon it myself. No member of a trade union is compelled to pay the political levy if he chooses not to do so. Over the past 50 years, there has been no resolution before any trade union seeking to end the political levy. My own union, the National Union of Public Employees, is at present in conference at Bournemouth. I was down there myself. It is carrying out a revision of rules. The proposed alterations amount to 44 pages. There are 850 delegates representing 1,500 branches. In addition, there are 500 official observers. However, to my knowledge—and there is still a day or two to go—on these proposed changes in rules, not one question has been raised about the political levy.
The entire legal and economic environment which shapes the lives of trade unionists at work and at home is determined by political decisions. The purpose of the political levy is not solely for making contributions to the Labour Party. Contributions are made to a great variety of causes and campaigns, such as those concerned with peace, and civil liberties. There are also many occasions when trade unions may feel it necessary to take some political action, such as protesting against hospital closures or decisions by local authorities. The trade unions will be restricted while business organisations will be free to promote all kinds of actions to protect their own interests or to attack national and municipal enterprise. The last thing that a Conservative Government are qualified to do is to tell trade unions how to manage their affairs.
The Labour Party came into being through the trade unions setting up the Labour Representation Committee. They were compelled to do that because, by trade union strength and organisation, they won concessions from the employers. But the governments of those days were mainly composed of employers' representatives, and the gains of the trade unions were whittled away by legislation. The Government are doing their best to weaken the use by trade unions of that kind of political power in order to protect themselves against big business and vested interests.
I was interested in what my noble friend Lord Houghton had to say. Instead of political levies being left to vested interests, whether big business or trade unions, there should be some kind of state contribution. After all, the principle has existed for a
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long time. When there is a general election, the election address is delivered free. In the best interests of our parliamentary democracy, it would be better if political levies were done away with and the state enabled to make contributions direct to the major political parties.
This piece of legislation is a blatant attempt to silence trade union opposition to government policies and to limit unions' political activities. It will override established trade union practices and impose complicated procedures which will effectively prevent the unions from taking industrial action. It is in my judgment a mean and petty Bill. I hope that the Bill will at least be amended in Committee, but preferably I should like to see it destroyed altogether.
6.58 p.m.
The Earl of Onslow: My Lords, it seems to me that the noble Lord. Lord Bottomley, has totally failed to understand the purpose of the Bill. In this regard, it appears that he is in a numerous company. The whole Opposition seem to have fallen into the same error. After all, companies are wrapped up in a legislative framework. So, why not the trade unions? I must congratulate the noble Lord, Lord McCarthy, on his spirited attempt to become a military Duke. My noble friend, Lord Gowrie, in his speech, showed the great necessity for this Bill. However, the noble Lord, Lord McCarthy, would defend the status quo as did the Duke of Wellington the unreformed constitution of 1832.
The noble Lord, Lord McCarthy, fulfilled our wildest dreams. He defended the muddled old English institutions. The great Duke of Wellington could not have done better himself. My two noble friends Lady Cox and Lord De La Warr have pointed out that the Bill is intended to remedy the lack of provision for postal ballots. My noble friend Lord Campbell of Alloway produced the novel idea that postal ballots are meretricious. I cannot sec anything pertaining to harlotry about postal ballots, but that is what he said, and obviously his imagination is a very keenly developed one.
If Her Majesty's Government are determined to keep Clause 2 as it stands, I cannot add anything to what was put forward by my noble friends Lady Cox and Lord De La Warr about the necessity for postal ballots. Would it not then be possible to put in as an alternative to Clause 2 a reserve clause ensuring a postal ballot, but only as a reminder that if Clause 2 does not work in the way we hope it will, then the postal ballots would come in? This would have two effects. It would limit the temptation to fiddle, which my noble friend Lady Cox has shown to be possible, and also it would reinforce Clause 3, which my noble friend Lord De La Warr showed to be very weak because it provides little check on the abuse of Clause 2. Surely there should be proper provision for debarring corrupt or dishonest officials. After all, lawyers, doctors, local councillors, and even opticians can be banned for misbehaviour.
The noble Lord, Lord Ferrier, made the very valid point that the Government are not anti-trades union, but are anti the abuse of trades union power and pro a strong, democratic and forward-looking trades union

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movement. The recent agreement about one-union factories in Sunderland for the Japanese is a great sign that some people are saying that the secret of wealth and an increasing standard of living lies in producing things and in producing them as well and as efficiently as possible. Once that happens, we can all argue about who gets paid what. There is a big pot to argue over. For heaven's sake let us create the pot first before we argue about what we are going to get paid out of it!
The noble Lord, Lord Renton, also made his point with clarity. Admittedly, with my proposal of reserve post-electoral power to be brought into play only when Clause 2 as it stands has been shown to be defective, and with the possible elections fiddle mentioned by my noble friend Lord De La Warr, there is a great difficulty of showing, or challenging, union voting practice. This is shown by a recent argument in the CPSA, involving a Mr. Elliot and a Mr. Butcher. It has been put well in a leading article in The Times. They write better English than I can speak, so I shall let them speak for me:
"In the case of the CPSA, interminable legal arguments about discovery so postponed matters that the following year's election came along before Mr. Elliot and Mr. Butcher had a chance to make their case. They thus abandoned the proceedings, facing a bill for 60 per cent, of the total costs, with the CPSA's share being 40 per cent. There could be no more effective deterrent to any trade unionist challenging elections which he feels to have been abused than the prospect of having to meet a bill for thousands of pounds".
We know that lawyers run the most effective trades union and have to be very well paid, so we could not possibly deprive them of that privilege.
I cannot refrain from saying that I love the comment of the Welsh miners' leader that the day of the ballot is over because it means that the masses are denied their democratic rights. The noble Lord, Lord McCarthy, may have wanted to emulate the Iron Duke, but that Welsh miner's yearning for a trial at Westminster Hall and a January trip to Whitehall and the axeman, possibly followed by a nice statute in Trafalgar Square, shows that Emlyn Williams' view on divine rights are even more archaic than those of Charles I.
7.5 p.m.
Lord Oram: My Lords, 40 years ago, during the course of the Second World War, Sir William Beveridge wrote a book which he called Pillars of Security. In it he envisaged a post-war Britain in which five giants would have been overcome—the giants of want, disease, ignorance, squalor and idleness. Among the weapons which he envisaged would be needed to overcome those giants he included the state, to take direct responsibility for the control of vital industries, and trade unions as an essential element in the British democracy.
Today, day by day, Beveridge's pillars of security are being undermined and the giants are coming back. In some respects the Government disclaim responsibility for what is happening. For instance, they claim that unemployment—the giant idleness—is due to the world recession. They claim that cuts in social services are inevitable if we are to balance the nation's books. But elsewhere I do not think the Government try to disclaim responsibility, because in state industries
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demolition is proceeding apace, and certainly in relation to trade unions we have in this Bill a further deliberate blast at the foundation of trade union strength. It is on the trade unions that the working people of this country have relied, and still rely, for a major part of their security against Beveridge's giants.
Turning to the Bill, I want to say that there are three aspects of it which I find objectionable, and I believe that they will prove to be unworkable. The first is the attempt in Part I to impose a stereotyped form of democracy on trade unions. The second—this has not been mentioned much in the debate—is the way in which, at several points, the affairs of trade unions are increasingly to be subject to the jurisdiction of the courts. The third is the attempt in Part III to circumscribe political activity by trade unions, so as to keep their industrial and their political functions in virtually watertight compartments.
That is the order in which these three elements appear in the Bill, but I should like to take them in reverse order and thus deal first with the political question. The Bill proposes a much tighter procedure for the establishment of a political fund, and in Clause 15 it proposes a major amendment of the 1913 Act. The noble Earl. Lord Gowrie. said that the position remains as in 1913. If that is so, why is Clause 15—a major amendment of it—necessary? As I have said, the purpose of Clause 15 is to separate even more sharply than at the moment the industrial functions of a trade union and the funds that it uses for industrial purposes from its political function and its political funds. I do not believe that in practice it is possible to separate those two functions in that way.
For instance, how is it possible for a union such as N ALGO, or any of the Civil Service unions which do not have a political fund, to keep separate compartments—on the one hand a compartment of industrial activity, and on the other hand, a compart-ment of political activity? If they are anxious to take political action to defend their members' jobs, perhaps as a result of some Government decision, and if on the other hand they want to convene meetings or issue literature to persuade their members to exercise their votes against the Government who are taking that action, how can they possibly separate the industrial and the political functions in that way? I suggest that there is a vast grey area which is impossible of precise definition either by Parliament or by the courts, where industrial and political action impinge upon one another. It is because of that that I believe that Part III of the Bill can only make matters much more difficult and more contentious. On that point. I would call in aid the views of Winston Churchill. He has already been quoted twice in this debate. I shall quote from an earlier and more liberal Churchill, who said:
"I should have no hesitation in saying that it is quite impossible to prevent trade unions from entering the political field. The sphere of industrial and political activity is often indistinguishable, always overlaps, and representation in Parliament is absolutely necessary to trade unions, even if they confine themselves to the most purely industrial forms of action".
As I have indicated, my second main objection to this Bill is that, together with its predecessor Acts—those of 1980 and 1982—it increases to a great degree the likelihood of action in the courts. In recent years we have seen the unfortunate consequences of

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action in the courts so far as industrial relations are concerned, and I believe that the increased litigation which will arise out of this Bill will lead to an embitterment of industrial relations and a prolongation of disputes.
The whole of Clause 3, the whole of Clause 7, and the whole of Clause 13 are open invitations for employers or for aggrieved members to take unions to court. And, as trade unions and trade unionists tend to be like that strange animal which, when attacked, defends itself, I envisage that those clauses will exacerbate industrial relations time after time in cases which could far better be resolved by negotiation and compromise, by conciliation rather than by confrontation in the courts. Once again, I would call in aid the wisdom of Winston Churchill on this matter as well, because he said:
"It is not good for trade unions that they should be brought in contact with the courts, and it is not good for the courts".
I come to my third point. Perhaps I may explain why I believe that the Bill is wrong in seeking to impose on the vast complex and variegated trade union movement a uniform constitutional requirement for the election of the executive committees of trade unions. We have had speeches from a number of leading trade unionists from this side of the House today. Those with experience of the trade union movement know that the essence of trade union democracy is that it is a growth from below and cannot be imposed from above by the state or by legislation.
It is true that trade union democracy is untidy; it is illogical; it is very often very awkward; and it is human. It is a human institution. But it is a complex amalgam of, in some cases, direct elections and, in others, indirect elections. My noble friend Lord Beswick gave a very apt illustration. It is an amalgam of formal procedures with informal procedures, of large units for which, on the one hand, one form of constitution and organisation is appropriate, and very small units which, on the other hand, need to be organised in a very different way. In my view, it is quite impossible to impose by legislation any system of democratic control which will not create more problems than it solves.
Let us take the speeches that we have heard from this side of the House. The noble Earl, Lord Onslow, said that most of the speakers here failed to understand the purpose of the Bill. I would suggest that the experience of trade union democracy, which has been behind the speeches of my noble friends, and the understanding that my noble friends have of the real purposes of this Bill has been illustrated as being far more pertinent than the speeches that we have heard from the Government Benches. Let me take the list. We have had my noble friend Lord Scanlon from the engineers; we have had my noble friend Lord Taylor of Mansfield from the miners; we have had my noble friends Lord Houghton and Lord Bottomley speaking for two sections of the Civil Service; we have had the noble Lord, Lord Allen of Fallowfield, from the distributive workers; and we had that important contribution from my noble friend Lord Beswick about the airline pilots. Just that simple list of five or six unions, well represented by spokesmen on this side of the House, represents a vast complex of different
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constitutions and of different ways of managing democratic procedures.
If we think only of that list, and leave aside the many other trade unions that there are, I envisage that a mountain of difficulty is before us if we try to apply the methods proposed in this Bill. Given that complexity, in my view it is impossible to legislate for simplicity without running foul of a multitude of traditions, customs and well-tried procedures which are embodied in centuries of trade union history. It is for that reason that I believe that Part I will also fail.
I should now like to turn to my personal experience in democracy in commercial affairs, not because I have had any experience of organising trade union elections, but because I have experience in the broadly comparable sphere of democracy in the co-operative movement. Enshrined in the co-operative principles is that of one man, one vote, and that is accepted by co-operators throughout the world. Wherever it is possible, that principle is implemented by co-operators. But, like the trade union movement, our co-operative movement has grown enormously from its small beginnings, when simple democracy was possible, into a vast complex of businesses in insurance, banking, wholesaling, farming, and many other spheres. I know from practical experience that it would be utterly impossible to impose on that complex set of working-class organisations a uniform system of democratic elections.
Of course, what happens is that co-operators devise their own methods of election—their own systems of democracy. They register their rules with the registrar, who takes a pragmatic view as to whether they represent the methods of a proper co-operative society. That I suggest is the only practical way of applying democracy in the trade union movement which, likewise, is a multi-million membership of a voluntary organisation. In my view, any attempt to make them conform to stereotype patterns—as this Bill is attempting to do—is bound to fail.
If one steps back from this Bill and looks at society as a whole, one is bound to ask the Government: "If it is democratic control that you want, why single out the trade unions?" The point has been made by a number of my noble friends. Trade union democracy is indeed imperfect, but there are plenty of other examples around of imperfections in the commercial sphere. Building societies have quite rightly been described as self-perpetuating oligarchies. Why not introduce some form of greater democracy there by legislation if it were possible?
Our company law gives scarcely any power to the small investor in practice, whatever the general theory may be. The stock exchange is no shining example of accountability. As my noble friend Lord McCarthy did, we could go through the whole gamut of social and commercial institutions which are imperfect in their democracy.
Therefore, I repeat my question: why pick on the trade unions? We, of course, know the answer. The Government are wedded to the doctrine of the freedom of the market place. They see trade union power and trade union practices as obstructing the free play of market forces. Therefore, in this series of attacks, in 1980 and 1982, now in 1984 and with

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perhaps more to come, the Government are seeking to strip the unions of their basic powers. That is the purpose of this Bill, and my noble friends have not been mistaken in pointing to that as being the purpose of the Bill. The Government will no doubt succeed in putting this Bill on the statute book. But I believe that as to their hope of suppressing trade union power, it is for certain that in the long run they will fail in that objective.
7.22 p.m.
Lord Aylestone: My Lords, at this time in the evening, with an important debate with 16 speakers to follow, I intend to be brief. First, may I say that I agreed with the point that the noble Lord, Lord Houghton of Sowerby made—that it is unfortunate that at this stage, in the middle of a major industrial dispute, we should be discussing this Bill. But the Government are not to blame. It was part of their programme, and it is perhaps a matter of chance that it has come on at this time. There is perhaps never a right time, because there is always something going on in industry which makes it difficult to discuss a Bill of this sort.
During the debate it has been made absolutely clear, without a shadow of doubt at all, that the House is completely divided, as it was on the two Employment Bills of 1980 and 1982. I recall them both, as Members of the House must do, having taken part in both of them. I must say at this stage to the Government that those two earlier Bills have done very little indeed to improve industrial relations in this country. Nevertheless, the Government's objective was to introduce more democracy, or electoral democracy, into the trade union movement, and in that respect of course we support them.
Her Majesty's Opposition stand exactly where they have always stood, squarely behind the trade union movement, rightly or wrongly. The Opposition may understand that attitude, and I think I understand it, but I am quite sure that the country does not. The noble Lord, Lord Taylor of Mansfield, made the position clear when he said that the Labour Party is a child of the trade union movement, as indeed it is. I understand it; I do not think that the country does.
There has been much talk in this Chamber recently about programmes and manifestoes from the Government Bench, and promises from the Opposition Front Bench of what is likely to be included in their programme when the next general election takes place. I should like to make our position clear to the house at this stage by, if I may, reading a short quotation from the programme of the Alliance during the last general election, which said:
"Employee democracy in industry can only be extended if trade unions are made genuinely representative of their members since they are bound to have an important role in participation".
That is where we stand. That is what we believe. We support the Bill in the main but, as my noble friend Lord Rochester pointed out, we have a number of reservations which will be made clear during the Committee stage.
We are certainly of the opinion that there would be little public fear or worry about the power of the trade
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union movement, or the strength of the trade unions, if the so often self-appointed leadership truly reflected the views of the majority of the membership. The question that is generally asked in public is, do they? If anyone has any doubt about that, let them attend public meetings these days in connection with any of the local or national by-elections when the questions come up.
The Alliance believe that people who wish to do so have the right to join a trade union. But equally we believe—and this was made clear in the two debates in 1980 and 1982—that those who do not wish to join a trade union have the right not to do so, and have the right to be protected. We believe too that, so far as is practicable—and it is not clear in every case, and it is not made as simple as A. B. C in every case—the individual trade unionist should have the right to choose his executive officers and to choose them by ballot; and, we think, by secret postal ballot.
It has been argued in the debate this afternoon that a postal ballot would never work; that ballot papers would be sent out to many hundreds of thousands of trade unionists who would not return them. May I remind the House that if we get a 74 or 75 per cent, result in a general election we are doing pretty well, and therefore one could hardly anticipate getting much more. If we got 50 to 56 per cent, of people replying and sending in their ballot papers, I would regard it as an absolute success. In Part I, we would support secret postal ballots, which we think are preferable to handing out a batch of ballot papers at the place of work. We are not suggesting that they would be misused, but they could be, and might be.
We are concerned about trade union effects in the public services. We are of the opinion that so far as is possible—and I repeat, so far as is possible, because it may not be possible on every occasion—we should use arbitration; statutory arbitration, where it is possible. In this respect. I should like to pay tribute to ACAS for the work that they are doing and endeavouring to do in all cases of industrial dispute.
As I said at the beginning. I am not going to take up very much time, but I must refer to Part III of the Bill because—and I have seen different figures—a fair figure would be that something like 95 per cent, of all trade unionists pay the political levy. Do they consciously all pay the political levy, or do they just say "Yes" when they join the trade union movement of their choice? In my view, there is no way of dealing with this problem other than by the trade unionist contracting in to pay a political levy, rather than the present position where he pays it unless he contracts out.
In this respect, I must refer to what has been described as the long and detailed consultation between Government and the trade union movement about Part III of the Bill. What did it come up with? It came up with a proposal that after something like 70 years there is no change, except that every 10 years they will decide whether or not the political fund should be reformed. That is the only change. It makes one rather suspicious. What was the deal? What was the whole consultation about? Did the question of contracting-in not arise? Did the Government sell out on that point simply to get agreement on something

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else? We are particularly anxious to hear what happened in that respect.
The present trade union system is anything but completely democratic. I have spoken in this House on the occasions when we have debated the two earlier Bills and have paid tribute to the National Union of Mineworkers for its system of balloting, which at that time required a 55 per cent, result in favour of a strike or whatever action was being contemplated. That has now been reduced to a simple majority—I should think constitutionally reduced to that figure. But why, in heaven's name, (I do not want to talk about the industrial trouble at the moment) did the union not then hold a ballot, having achieved the necessary machinery to do so? These things make one wonder. There are things within the trade union movement that worry a great many people. They worry people such as myself.
I was a member of a trade union for well over 40 years, until I reached the point when I had to retire. There is no pleasure for me, or for many of the rest of us, to see brother trade unionists righting each other over some point or another. It has happened before, and we do not particularly like it. Whether this Bill will go some way in terms of democratic action which will make less trouble between the unions is a moot point. I do not know; it may. or it may not. We shall support this Bill and, when the time comes, we shall try with others to make improvements at the Committe stage. We shall do so with the object of making the trade unions a respected and an understood part of the work of this country and its people. At the present, I am afraid, they are not.
7.32 p.m.
Lord Wedderburn of Charlton: My Lords, the noble Earl when he introduced this Bill adverted to the fact that he has been here before with similar measures. Indeed that is true, but 1 was disappointed that today did not bring about a recurrence of the usual opening. In 1979, introducing the orders of that year, he said on 25th July:
"In the words of the old song: 'Something's got to give'; and in our case it is the ability of our economy to sustain, without the raging inflation which has the same job-destroying effects in the end, the levels of employment to which we have become accustomed".—[Official Report, 25/7/1979; col. 1942.]
He came in with a song in his heart. The same was true in 1980. In 1980, introducing the Employment Bill, he said that it was an ambitious measure and he continued:
"As Professor Higgins said of Eliza Doolittle in 'My Fair Lady', 'By Jove, she's got it!'"—[Official Report, 20/5/1980; col. 736.]
I have waited for tonight's song, but it did not come. I thought that perhaps, as he surveyed the efforts of the Government on industrial relations legislation of the last five years, the noble Earl would be forced to come in with yet another anti-trade union measure and—as we all know with more to come until they have got it right—with a classic rendering of the Rolling Stones' "I Can't Get No Satisfaction". The Government's position appears to be that they are always coming back for more.
Indeed there was no clear theme behind the Government tonight, I fancied, about why this measure is necessary. On this side of the House, I
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venture to suggest that there were two things. First, there was a clear restatement, as my noble friend Lord Oram stated clearly, that the vast majority of working men and women in this country rely for the standard of their livelihood and for their freedom upon the collective strength and reality that supplements their individual weakness. That truth is the same today as it was in better days of the economy.
Secondly, the contributions of my noble friends, which again my noble friend Lord Oram listed—those of Lord Scanlon, Lord Taylor of Mansfield, Lord Houghton of Sowerby, Lord Bottomley, Lord Allen of Fallowfield, Lord Beswick—demonstrated the variety which was representative of the British trade union movement, as it would be of any democratic movement; the variety of practice and the approach to democracy that members were entitled to decide the way in which their organsation was to be governed. When contrasting that with the Bill, we find that its first characteristic in Part I is a dogmatic assertion that only one form of direct election to the National Executive through the constrictive procedures of Clause 2 is what the Government will allow to be democracy for trade unions.
It has been put to the Government before and I want to put it to the noble Earl again tonight that this is not in accordance with our obligations under the International Labour Organisation conventions. The noble Earl will know that I refer to Convention 87 of the Conventions on Freedom of Association, the Right to Organise, to which this country adhered many years ago. It was one of the first to adhere to it. Article 3 gives to workers and employers' organisations,
"the right to draw up their constitutions and rules, to elect their representatives in full freedom"—
and—
"public authorities shall refrain from any interference".
When this has been put to the Government in debates in another place on this Bill the Government have replied in this way—and I quote the Minister of State on 8th November at col. 233. He said:
"in its general survey on the application of conventions and the freedom of association, the committee of experts of the ILO said that when legislation contained rules intended to promote democratic principles in trade union organisations, or to ensure that the electoral procedure is conducted in a normal manner and with due respect for the rights of members, such provisions do not involve a violation of the principles of the freedom of association".— [Official Report, Commons, 8/11/1983; col. 233.]
He justified the measure on that basis, as well he might, because that is an almost direct quotation from paragraph 168 of the Fifth Report of the Committee of Experts of the ILO in 1983. But why do the Government stop reading at paragraphs 168 to 169? If they go on to paragraph 172—this is the authoritative statement from the ILO that I wish to put to the noble Earl—they will find it stated:
"The Committee considers that legislation which regulates in detail the internal election procedures of trade unions is incompatible with the rights of trade unions recognised by Convention No.87.".
What is this legislation but detailed legislation on the internal election procedures of trade unions? Do the Government abide by Convention No. 87 or will they denounce that ILO convention as they denounced conventions Nos. 94 and 26 to get rid of fair wages resolutions and protection for the low paid:

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international labour standards to which this country was proud to adhere for many years, a tradition sullied by the denunciation of conventions which are literally recognised by countries from Swaziland to Sarawak? What will the Government do about Convention No. 87? Do they accept that detailed internal legislation on elections, as the committee authoritatively states, is a breach of the convention or not?
That is not merely a legalistic point upon an international convention. It is a point which sums up, at the level of international labour standards, the experience which my noble friends have been giving to your Lordships' House tonight. The ILO is nothing more than the collective and distilled wisdom of employers, governments and labour movements throughout the world. It is putting to governments the care that they must take not to infringe the fundamental civil liberties which we are quick enough to prate about in Gdansk but which apply just as much in Grimsby as they do the other side of the Iron Curtain.
The Earl of Gowrie: My Lords, can the noble Lord think of a single job or a single piece of wealth that the ILO has ever created?
Lord Wedderburn of Charlton: Yes, my Lords, I canindeed. It is by giving standards throughout the world to governments that would otherwise accept the exploitation of workers. If the noble Earl, on behalf of Her Majesty's Government, is denouncing the International Labour Organisation, if he is now saying that, let him say it. Let him say that the Government wish to denounce the ILO as never having contributed to the wealth of workers throughout the world. Is that what he is saying?
The Earl of Gowrie: My Lords, I am not denouncing any organisation. All that I am saying is that the noble Lord, with his customary skill, is drawing an international red herring over a sensible and local provision.
Lord Wedderburn of Charlton: My Lords, I will accept the noble Earl's compliment as to skill. But he must look at the text and he must decide whether or not the Government are going to accept that judgment on the convention throughout the rest of the debates on this Bill.
Secondly, there is another curiosity about the way in which these matters are discussed. There is a special technique which is applied to trade unions. It is done in the Green Paper of 1983, in paragraph 12, which begins:
"Public confidence is inevitably eroded when allegations are made of forgery, ballot rigging and other corrupt practices".
That is what has happened tonight. The noble Baroness, Lady Cox. the noble Lord, Lord Ferrier, the noble Lord, Lord Renton, and the noble Lord, Lord Campbell of Alloway, all, in their own way, have attacked and treble-criticised the trade union movement, or parts of it, for gerrymandering, for—
Lord Campbell of Alloway: My Lords, will the noble Lord give way?
Lord Wedderburn of Charlton: My Lords, if I may finish the sentence, the noble Lord, Lord Campbell of Alloway, spoke of gerrymandering. The noble Lord, Lord Ferrier, spoke of malpractices and the noble Baroness, Lady Cox, also spoke about malpractices. She nearly gave an illustration. But we can read Hansard and see how many illustrations were given. My point is that for the number of occasions that the charge is made, the number of illustrations is minimal.
Lord Campbell of Alloway: My Lords, I am grateful to the noble Lord. I did use the expression "political gerrymandering". It was only because the noble Lord, Lord Scanlon—and he will confirm it—suggested that Her Majesty's Government were guilty of such practice in producing this Bill. I was suggesting, with great respect to the noble Lord, that he had stood the problem on its head. With respect to the noble Lord, Lord Wedderburn, it is not really right to suggest that I am accusing the trade unions of gerrymandering. Quite the reverse. He knows that 1 support the trade unions as a responsible institution and always have done.
Lord Wedderburn of Charlton: My Lords, the fault is entirely mine. I understood the noble Lord wrongly and I am glad that he accepts that there is not any case of gerrymandering proven in that area. For the rest, we can read Hansard. My point is that there are no examples given. There is the case of someone who boasts of having filled up 129 ballot papers. Really, if one had to go into court on evidence of this sort, one would simply be laughed out of court. And noble Lords know it. There really cannot be any case for control of trade union rules for elections based upon malpractice. The Freedom Association has tried very hard.
Contrast the sort of pictures that one finds elsewhere in the history of trade union movements. If you look at the United States in the 1950s, you find an unhappy state of affairs of massive corruption and malpractice and it was proven and the Landrum Griffin Act ensued. I may mention to the noble Earl, while he is about it, that the Landrum Griffin Act is a control of labour union electoral practice in the United States which is one of the reasons why that govenment would be unable to ratify Convention No. 87.
Another reason is given—although it has been played rather softly tonight; but we shall hear it in Committee—and that is that trade unions need this control like some kind of bridle because they enjoy immunities. This is ground that we have gone over before but this time the Minister of State on the 8th November surpassed himself, at col. 235 by saying:
"The link between immunities and democracy must be absolute".
It is useful to ask what these immunities are. First of all. it is curious that new controls should be introduced on the ground that there are immunites at a time when the Government have reduced these so-called immunities to a level which one would have thought was as near to the ground as you can get.
Secondly, the only two immunities of which we are speaking are, first the defence of trade unions against the doctrine of restraint of trade which would otherwise make them unlawful associations, which has been there since 1871, and, secondly, the protection of

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an act of a person—any person, the noble Earl might notice, because he spoke of trade union immunities in trade disputes; and it is an immunity for any person—who is acting in a way which would cause a breach of a contract in a trade dispute which, if the protection were not there, would make all withdrawals of labour on a concerted basis unlawful.
So we are speaking about the two things which in other countries are called the right to associate—the law would otherwise make trade unions unlawful—and the right to withdraw labour, which would otherwise be common law liability for inducing a breach of contract. No Frenchman or Italian on either side of the political divide would regard it as anything other than humorous that someone should suggest that trade unions, because they have this great privilege of associating together and organising withdrawals of labour, should therefore subject their rules about elections to the whim of Her Majesty's Government. That is an absurd proposition. It is only the rather crazy history of British labour law which introduces the word "immunity" which allows for the argument to be made.
There is a perhaps even more important parallel on which the Government try to rely and on which they cannot. That, the noble Earl put forward by saying (I think more than once; but I noted it once) that companies were subjected, under the Companies Acts, to safeguards of a parallel kind. With great respect, that is not true. As far as the election of the board of directors is concerned. Table A to the 1948 Companies Act can be displaced. Companies have a wide discretion as to the manner in which the board would be elected. Only one section is a parallel; and that is Section 184 of the 1948 Act which allows the ordinary resolution of the general meeting of shareholders to dismiss a director. There is that one parallel. So far as the electoral process is concerned, there is nothing.
Of course, if we looked at malpractice, if the Government really wanted to legislate on malpractice, there is a whole history of inspectors' reports to which they could turn. And if we are looking for immunities, the biggest immunity enjoyed by anybody in this country today is that of limited liability. Those of us who pay our debts to the full are contrasted with those, and those organisations, who avoid millions, and hundreds of millions, of pounds-worth of debt by limited liability. That is not the same parallel control of companies. If the noble Earl would like to have a Bill presented, through him, for a parallel, I would be happy to do so.
Nor is it true—to take one point that the noble Earl, Lord De La Warr, made—that there is any evidence that particular forms of control in organisations like trade unions necessarily produce any particular result. I myself would not want to rely upon such an argument because I do not think one ought to legislate to get a result. But it appears that it is not even true that that is the case, as the recent book of Roger Undy and Roderick Martin showed. It would be better, I think, for the Government to rely on the research on ballots of 1984 than, as my noble friend Lord McCarthy suggested, the rather antiquated research of 1952 by Dr. Goldstein.
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Nor is it true; as the noble Lord, Lord Campbell of Alloway, suggested, that the Donovan Report supports Part I of the Bill. Without reading them all, I may say to him that if we look at paragraphs 640 to 641 of the Donovan Report we find—and I shall quote just a sentence; for I do not think I am carrying him with me—that it says:
"No rules, however elaborate, would be proof against organised fraudulent and determined rigging of an election such as occurred in the case of the electrical trade union in 1959 but a great deal could be done by filling gaps in existing rules to reduce the possibility of election irregularities.".
I pause to say that it just is not true to say that trade unions have done nothing in the last few years. In the last 10 years at least 10 major trade unions have revised their constitutions in very radical ways. That is quite apart from the mere incidence of amalgamation.
The Donovan Report went on to say something which must be said and which I do not think has been said in the debate so far. It pointed out:
"Dependent as trade unions are on voluntary labour to a large extent, it cannot be expected that their elections will be conducted impeccably in every detail".
It is a fact of life that voluntary organisations such as trade unions, which rely in many cases upon the voluntary work of lay officials, cannot be expected to get the precise detail of a parliamentary election. Indeed, about two years ago, Sir John Boyd said that the AUEW should be congratulated on having a clear register of more than 800,000 of its one million members. He made the case in a passage that is well known to those who have studied the subject—it must be available to the Government—in quite a clear way. The Government must know that, for a trade union with a million members, Clause 2 is a series of trip wires. Of course they know. It is a jungle of man traps to any large union and certainly to even a small union with mobility of labour in its industry and a shifting membership.
Part II of the Bill imposes a ballot. I shall confine myself to saying only two or three things about it. First, it marks the giant step that we have taken away from Donovan. Even in 1971 the package that was put forward by the Conservative Government at the time at least ostensibly relied—and its authors really believed that it relied—on the Donovan philosophy. This Bill does not rely on the Donovan philosophy, as can be shown by a simple illustration. In the Donovan era, if one weighted the law any way, one usually weighted it against unofficial action and for official action. Although I have been at odds with some friends as to exactly how that should or should not be done, nevertheless, if one were going to weight it in any way, that surely has something to commend. But this Bill weights the law in favour of unofficial action. It is the unofficial action which retains the trade disputes immunity whether or not there is a ballot. And the trade union—and, my Lords, let us note, the trade union and its officials, because they lose the immunity, too—loses the immunity if there is no ballot, if there is no ballot within the precise procedures of Clause 7 as it now is, and if more than four weeks have passed when action is called after such a ballot. It is a ballot, as my noble friend Lord McCarthy has said, with the loaded question which has to be, "Will you take part in the action in breach of your contracts of employment?"

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It is a curiosity of our employment law that in industrial action there is a breach of the employment contract. In most modern systems the employment contract is suspended. But the Government are building upon the curiosity that in Britain the employment contract is technically broken in strike or other industrial action and they demand that workers be asked by their union. "Will you come out in breach of your contracts of employment?" Of course that is an intimidatory question and the Government know it. It is a loaded question. When the workers of Germany voted by 80 per cent, in favour of yesterday's strikes for a 35-hour week, true, they did something that has been put up to us very often as a model. They did so in an orderly way in a ballot, but they did not have to vote on a loaded question set by the Government. That is a measure of the way in which the Government are moving to an autocratic labour relations law.
Nor indeed is it clear what the Government mean by including in Part II of the Bill industrial action which either breaks a contract of employment or interferes with it. I confine myself to saying this. It is not yet clear what it is that a worker is not entitled to do in the Government's eyes if it is not a breach of his contract of employment. In Committee we shall press for the removal of this doctrine of interference from Part II of the Bill because it is quite plainly a covert way of extending liabilities beyond those that necessarily currently exist.
In Part III of the Bill my noble friends have illustrated the ways in which the autocratic and non-democratic approach of the Government is sustained. Those of my noble friends who commented, as many did, on the natural way in which trade unions have a political role to play, will find that the ILO again is in agreement with them. Perhaps the noble Earl the Minister, when he is looking at the Fifth Report of the Committee of Experts, would like to look at paragraph 195 as well, where he will rind spelt out at length the reason why trade union movements in the modern world cannot avoid being involved in.
"matters of general interest—i.e. "political" in the broadest sense of the word".
In this country, again, the Government are building upon a curiosity. What is curious about our structure? What is curious is that in 1910 in the Osborne case the Judicial Committee of this House, in one of the most biased decisions ever taken by it. decided that, because the definition of a trade union in the 19th century statutes did not mention political activity, trade unions could not lawfully adopt that role. It is little known, although most of my noble friends will probably know it. that it was the trade union movement that invented the political fund. It was the trade union movement between 1910 and 1912 which invented separate funds, which the judges then struck down again and again as not being sufficient. Therefore it was that that was ratified in the 1913 compromise whereby trade unions, and trade unions alone, are permitted political rights only if they have a separate fund, only if members can contract out, and only if that fund is established by a ballot.
Now when the noble Earl the Minister says that nothing in this Bill changes anything after 1913, of course I understand that he did not mean that it made
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no changes, or else it would not have been introduced. The noble Earl was arguing that the structure is the same. But. my Lords, with great respect, the structure is not entirely the same and even if it were, since we are questioning fundamental things and asking fundamental questions, why should it be that the trade union alone has to satisfy these conditions before it is allowed political activity of any kind? What about partnerships and what about co-operatives? I do not make the point against co-operatives or for them. What about companies?—that is the usual one. What about building societies and all sorts of organisations which will have their own ways of being limited but not this sort of special statutory structure? Let us clear one thing out of the way. It is not true that companies suffer from the same kind of limitation. All that companies suffer is under Section 19 of the 1967 Act, whereby they must disclose political payments which have already been made with charitable donations over £200 in total. Even the Police Federation seems to be in a position superior to the ordinary trade union.
Any changes to put further limitations on trade unions are a denial of democratic rights. One cannot base the argument on figures if they are not right. With great respect to the noble Lord. Lord Aylestone, the figure for payments to the trade union levy is not 95 per cent, of all trade union members, but is 81 per cent, of the 63 unions with a political fund. As some of my noble friends have said, there are many trade unions which do not have a political fund and for them the alteration in the definition of political objects is perhaps even more important than for those unions which have a political fund in their make-up.
In 1980 the Post Office Engineering Union contributed to a campaign called "a Campaign against the Cuts". It made its donation from the general fund. It was challenged by a member, and the challenges in the past few years, as everyone knows, have increased because the Freedom Association and other organisations have been looking for cases to take, and have said to the certification officer that they are brought by members of the Freedom Association. But in this case the certification officer applied the law as it is and as it was stated to be in the great guiding case of Funster in 1925—a case with which the noble Lord will be perfectly familiar, on this basis. I now quote the chief registrar in Forster's case, who said:
"Political as it is used in this section"—
the definition section of political objects—
"is not the adjectival form of polity, but the adjectival form of party politics."
The Government have changed that definition and extended it. First, they have knocked out the exception for the so-called statutory objects: that is to say, the exception that used to be there for expenditure on mainly industrial purposes. Secondly, they have made a number of other changes, and on Second Reading it is important to mention an important one; that any expenditure:
"that seeks to persuade any person to vote or. as the case may be, not to vote for a political party or candidate".
is within the area of political expenditure now. It was not necessarily so before. That was because as the Colman case showed and as the POEU case showed you could make donations or spend money on general

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social issues. So if I may treat the matter dramatically, in fact the Government have now changed "political" from the adjectival form of party politics into the adjectival form of policy, because anything that can be seen as seeking to persuade a person to vote or not to vote for any party would be within the clause.
It has therefore rendered as a prohibited area the entire area of social controversy for unions that do not have a political fund. This is not just a small change from the 1913 scheme. For those unions which do not have a political fund it is a monstrous prohibition upon their civil and political rights. What right have the Government to tell a Civil Service union that it cannot make a donation out of its general fund to a general campaign in regard to environmental or similar issues that may be reflected in the party political programme of one party or another? The Government are acting without any evidence of any kind of abuse. They have not even made a case for abuse. They have taken the opportunity under cover of updating the definition—because that is what the Secretary of State said—to introduce this fundamental change.
If there is so little ground for the Bill, why on earth is it brought forward? The noble Lord, Lord Renton, said that it was to save the trade unions from themselves. He said: "Look at the United States". The noble Lord is no longer in his place but I am sure he will not mind if I say in reply to him that, looking at the United States, you find that trade unionism is somewhere about 20 per cent, of the density of the labour-force, and dropping. The whole point of the United States industrial relations is the new practice of de-unionising enterprises; and that is what we will get next in this country. In this country, considering the recession in jobs, the trade union movement has maintained a remarkable degree of density of membership in the workforce.
The reasons for this measure, for the next measure, and for the last two measures, as my noble friend Lord McCarthy suggested, are to be found in that area of writing which the Prime Minister referred to on 10th March 1981 at col. 756 of Hansard (if anybody is interested in reading it) where she said people should look at these writings; she had great admiration for them and in fact they were absolutely supreme. Those writings say that the chief causes of inefficiency, poverty and unemployment are the privileges and force used by trade unions, which are rapidly destroying the economic order, provoking a critical test of democracy and unless unions are deprived of their coercive power an economic recovery for Great Britain is impossible. Instead of just giving phrases, as I have been doing, I will quote a full sentence—
"So there can be no salvation for Britain until these special privileges granted to trade unions three-quarters of a century ago are revoked.".
All those questions, of course, are from Professor Hayek, to whom my noble friend Lord Taylor of Mansfield adverted. They are the basis of Government policy. I do not know why anyone should be coy about it. The Government's economic advisers believe that one of the major causes of unemployment is trade union organisation. They think that trade unions are an obstacle in the market-place. They believe that is so and the longer trade unions are there with effect, the
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longer they will go on until, as the noble Lord, Lord Ferrier, said they would do, they get it right. On this philosophy, they must reduce trade unions to a point where they have no influence of any appreciable kind; and as these legislative measures rain upon the labour movement like the cutlasses of the cavalry in St. Peter's Field 165 years ago, the Government will go on not creating one job through them, not solving one industrial crisis through them, contributing nothing to the national prosperity through them, and in a word, my Lords, that is why, as my noble friend Lord Allen said, the nation will return soon to consultation and co-operation; and that is why these measures must be repealed.
8.5 p.m.
The Earl of Gowrie: My Lords, I am not going to be tempted too far by the noble Lord, Lord Wedderburn, to try and define what the signature tune or special song of this particular piece of legislation should be. Various Members of your Lordships' House might propose some various tunes, such as, for instance, Sir Harry Lauder's "Keep Right on to the End of the Road". Or, since the Rolling Stones were mentioned, we might have the more co-operative song of the Beatles, "I Wanna Hold your Hand" where democratic and electoral procedures are concerned. For myself—I think the House will forgive me if I relapse into the role of Minister for the Arts and financier of grand opera just for a moment—I would prefer the great duet between Florestan and Leonora in "Fidelio", just after the prisoners are liberated.
Throughout this debate, noble Lords opposite—in fact I will redefine that and say "noble Lords on the Labour Benches"—have consistently failed to understand that the impetus, the dynamic and the mandate for this legislation come from trade union members themselves. The noble Lord, Lord Scanlon, talked about the Government's paranoic hatred of trade unions, and he said:
"First destroy the trade unions and then you destroy democracy".
But while I find that a thoroughly offensive idea in connection with this Government, and assuming for the sake of argument that the noble Lord, Lord Scanlon, will not take assurances from me, whom does he find supporting this legislation from the Government in this House, let alone in the greater world outside it? He finds the admirable speech of the noble Lord, Lord Aylestone, a former Labour Chief Whip, who delivered that speech sitting beside the noble Lord, Lord Diamond, a former Labour Chief Secretary of the Treasury. Does he think that Mrs. Williams, Mr. Rodgers, and Dr. Owen are all in thrall to Professor Hayek?
It really is not good enough to try and discover the roots of this legislation in some, to my mind, sensible and interesting current philosophical deliberations in the field of political science. I am delighted to argue political science with the noble Lord here, or in the bar, any time he wishes; but I think he knows perfectly well that that political science is not at the core of these legislative proposals.
I do not think I could put it better—and I am sorry to find myself in what is to be a genuine, but unnatural, alliance, so to say, for a brief period of time—than as

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it was put by the noble Lord, Lord Aylestone, who said, talking about some union traditions and habits: "These things do worry a great many people." My Lords, they not only worry a great many people in the Conservative Party, but they worry a great many people in the Labour Party—who have accordingly left it, and who deserted it in droves at the general election; and they also worry a great many people in the trade union movement itself.
The noble Lord, Lord Taylor, cited the phrase—and others have also done so—
"Give the unions back to their members".
The noble Lord, Lord Taylor, asked: When were they taken from them? But as a Nottinghamshire miner, perhaps the noble Lord could ask that question of his later colleagues. Again, my noble friend Lord Renton put it very pithily, when he said that noble Lords opposite have failed to face up to the dissatisfaction of their own members. He answered the objections of the noble Lords, Lord Bottomley, Lord Oram, and Lord Allen of Fallowfield, who simply lapsed into a somewhat Pavlovian or automatic response of thinking that this is some kind of Tory attack on the unions. The real opposition that the Government are facing in respect of this legislation comes from behind me, not from in front of me. That is well illustrated by the immensely powerful and able speech of my noble friend Lady Cox, to which I shall return in just a few moments.
Before I leave the noble Lord, Lord Wedderburn, so to say, I must say that I should not have been teased by him about the ILO. I should be too old a hand now to rise to my feet on those occasions. But while I admire it, I find an almost colossal irrelevance in the noble Lord's citing of these international issues to legislation as modest as this. If the noble Lord wants a technical answer, he knows what my honourable friend the Minister of State has said in another place.
But I can add a little flesh to it, as he challenged me to do, because my understanding is that so far as Article 3 of the Convention 87 is concerned, it is clear that the basic aim is to protect trade unions against interference by Governments with the right of trade unions inter alia to elect their representatives in full freedom. The types of interference which have been criticised by the ILO supervisory bodies as being in contradiction of this right have been, for example, that the legislation contains unduly detailed rules relating to trade union elections, and even provides for intervention by the authorities in the supervision of the electoral process; that the legislation provides for the approval or ratification of the results of trade union elections by the Minister of Labour, or that at least part of the executive committee shall be nominated by the public authorities; or, again, that the legislation provides for the obligatory presence of labour inspectors or other public officials during voting, or for their participation in the counting of votes.
In fact, cases in which the legislation of other countries provides for secret ballots for trade union elections are frequent, and in some countries—for instance, Australia and Japan—it is the constitution or rules of the union that must provide for secrecy in the election of trade union leaders. In most cases where
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secret ballots are necessary the sole purpose of this requirement is to ensure the application of democratic principles and, in particular, respect the right of every member to make his choice in full freedom. To this extent, such provisions have not given rise to criticism by the supervisory bodies. The quotation referred to by the noble Lord, Lord Wedderburn, might apply if the Bill laid down detailed rules and requirements on every aspect of trade union elections. But it does no such thing. It merely lays down basic fundamental democratic principles, and the noble Lord knows that perfectly well.
The noble Lord, Lord McCarthy, gave a charactistic bravura performance and he, like the noble Lord, Lord Wedderburn, has nothing to learn about debating techniques. It was, however, the wretched, and no doubt lamented, Mr. Goldstein, rather than myself, who caught the full fury of his academic scorn—a tornado of High Table abuse. But there was no mention in the noble Lord's splendid speech of the evidence of last year's elections within the ASTMS, in which fewer than 2 per cent, of the union's members voted. There was not a word about the appalling level of participation in branch meetings disclosed in the workplace industrial relations survey.
The House will remember that in my opening speech I invited noble Lords opposite to answer a number of specific questions. I asked them whether they objected to union members being able to vote for their leaders in a secret ballot. I asked them whether they objected to union members being asked whether they want to strike before being ordered to do so. I asked them whether they objected to union members being able to vote without interference or constraint. I think there is no more telling demonstration of the paucity of the official Opposition's case on this Bill than that not a single answer to any of those questions has been forthcoming—
Lord McCarthy: My Lords, may I intervene?
The Earl of Gowrie: My Lords, may I finish the point? It is astonishing, too, that the posing of such questions, and our attempts to answer them, should be looked upon in this House as an attack on the trade union movement.
Lord McCarthy: My Lords, I should like to make it quite clear in answer to all those questions—which I think the noble Earl will find I did answer, but I shall answer again—that we are not against any of those things in union rule books. We are against the Government attempting to impose their way of doing it through the law.
The Earl of Gowrie: My Lords, this point has been made earlier in the House, and by more experienced people than I. It was my noble friend Lord Campbell of Alloway who reminded the noble Lord, Lord Houghton of Sowerby—who, I remember, in 1980 was himself very aware of this point—that every chance had been given to trade unions to reform themselves. It is simply the reluctance of trade unions to do this, the reluctance of trade unions even to come into consultations on this issue with my right honourable friend the then Secretary of State, Mr.

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Tebbit; and it should not surprise anybody if we go on without them. But I do not myself accept that we are going on without them. I think that we are simply going on without the co-operation of the present generation of trade union leaders.
One of the key issues which has been raised by a number of noble Lords, including the noble Lords, Lord Rochester and Lord Aylestone from the Liberal and Alliance Benches, and by my noble friends Lord De La Warr and Lord Onslow, is postal balloting. I mentioned a little earlier the immensely powerful and well-argued case put by my noble friend Lady Cox, and I shall certainly draw that speech and every aspect of it to the attention of my right honourable friend the Secretary of State. No doubt my noble friend will be returning to some of the themes at a later stage.
There is no doubt that from many standpoints the ideal way of conducting an election ballot is by post. I do not believe that that removes all opportunities for malpractice, but there is little doubt that it is harder to rig a postal ballot than to rig a workplace ballot. But the House must be a little cautious—and I am grateful for the support given to me here by my noble friend Lord Campbell of Alloway—in too hastily drawing conclusions from this fact.
The Government's view of the existing electoral procedures in most of our major unions is well-known. The methods of election in use, such as voting at branch meetings and the block vote, are guaranteed to reduce participation to a minimum and to distort the results. One need not be a daily reader of the works of Professor Hayek to take that view. But we do not suggest that trade unions in general go about operating these arrangements corruptly or fraudulently.
We are attempting, as I said in my opening speech, to bring about conditions where best practice can prevail; and I make that point particularly to the noble Lord, Lord Beswick. But I do not think there is any evidence to back up any general statement about corruption or fraudulence, and I should never make such a statement. I would ask the House not to assume that trade unions are incapable of conducting ballots in the proper way.
There are also two other relevant considerations, the first of which is turnout. I think few noble Lords on either side of the House would dispute the fact that the best guarantee of representative trade union leaders is that as many members as possible should take part in their election. But we must recognise that turnouts of the order of 40 to 50 per cent, and more are recorded in those unions which employ individual workplace ballots. By contrast, the turnout in the engineering union elections in 1982 was 23.7 per cent. Again, I tried to stress in my opening speech that we are dealing with the economics and the practices of the real world in this step-by-step process of legislation. We want to bring people with us each step of the way. That, rather than some indeterminate posture of threat, is what we are trying to achieve.
I believe that our first objective should be to raise the level of participation in union elections. The major change which the Bill will make is to force unions to abandon both the block vote and voting by show of hands at branch meetings, which are inevitably attended only by activists. It will be a great achieve-
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ment if the Bill boosts substantially the number of union members actually voting in elections. It was in the light of these and other considerations that we concluded that it was right for the Bill to allow for both workplace ballots and postal ballots. Your Lordships should note that I do not include branch ballots. These are quite clearly ruled out.
Lord Beswick: My Lords, in seeking this objective of a democratically elected national committee, is the noble Earl going to answer my question, in which I asked him how the proposals in the Bill which are to be imposed upon unions will improve the system now carried out by the British Airline Pilots' Association?
The Earl of Gowrie: My Lords, my understanding is that we have been in discussion, by correspondence, with the British Airline Pilots' Association. When I know the results of that discussion, I shall bring them to the attention of the noble Lord. However, as I said in my opening speech, the fact of the matter is that we are talking not about general malpractice but about bringing the rest up to the standard of the best. If the noble Lord, Lord Beswick, feels—and no doubt he has good reasons for doing so—that BALPA enjoys the best standards, they have nothing whatsoever to fear. I acknowledge, however, that this is not a simple issue. We shall give very careful consideration to the arguments which have been put forward today by those noble Lords who favour compulsory postal ballots, but our current view remains that a requirement which from the outset imposed postal ballots for all elections in all unions would be so impracticable as to negate the inherent desirability of the move.
The House gave me a good hearing at the beginning of the debate. While I am aware that one or two points of detail have been put to me by the noble Lord, Lord Rochester, and others, perhaps I may take them up in correspondence and now make just one final point. In his speech the noble Lord, Lord McCarthy, took the Government to task for the 1980 and 1982 Acts, for making actionable, as he put it, closed shop agreements, secondary picketing, secondary action and what he, I thought a little quaintly, referred to as "the fair list"; in other words, the means by which the print unions sought to force non-union firms out of business. That is the famous "fair list".
I can only repeat that I very much welcomed what I believe the noble Lord, Lord Oram, said; or it may have been the noble Lord, Lord Botttomley, who took the view that the next Labour Government would repeal this legislation. At that election I enormously look forward to reading the manifesto of the party immediately opposite me. I wonder whether it will contain a pledge to bring back the flying picket, a pledge to restore the closed shop to the position in law which it enjoyed before 1980, and which led directly to this country being found in breach of the European Convention on Human Rights. I wonder whether it will contain a pledge to repeal this Bill in order to give the block vote back to the British people, who are thirsting for it, a pledge to banish the ballot box from the realm, and a pledge to restore that most cherished of our freedoms, which is, of course, the right to vote by show of hands in the car park meeting, with militants packed at the front and the hands counted by

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stewards on the platform. That would be a nonsensical political programme. While it would give me no special displeasure, I must warn the party opposite that if they do campaign on that platform, they will have an even worse result than they did in 1983.
The plain truth is that the reforms in this Bill are, if anything, shamingly overdue. They are supported by not just the great mass of our people, but also the mass of trade unionists. For that reason they will endure, despite the wrath of the Labour Party. In that spirit, I would ask the House to give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Trade Marks (Amendment) Bill
8.25 p.m.
Lord Campbell of Alloway: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Campbell of Alloway.)
On Question, Motion agreed to. The National Heritage: Works of Art
8.26 p.m.
Lord Fanshawe of Richmond Lord Fanshawe of Richmond rose to ask Her Majesty's Government what steps they are taking to protect and preserve this country's heritage, works of art and cultural objects, having regard to the immense buying power of the Getty Museum.
The noble Lord said: My Lords, I beg to ask the Question standing in my name on the Order Paper. First, I must apologise to the House and to my noble friend for keeping him here at such a late hour. He has had a very heavy day and has had to cope with two major speeches on an important piece of legislation. I trust that he will forgive me for inflicting this further burden upon him this evening.
I have no major interest to declare, unfortunately, as I was not lucky enough to inherit a stately home or a work of art of national importance, although I am a trustee of the National Army Museum. However, I raise this question because we are now confronted with an entirely new factor which, like it or not, is having a disruptive effect on the international art market and, by extension, a similar effect on the values of individual works of art. What is this factor? It is the massive and unprecedented sums which have recently become available to the Getty Trust in California. Is it generally realised that under United States Federal law, Getty is obliged to spend at a rate of over £1·25 million a week out of a larger income of over £1·65 million a week, the unspent balance of which goes to increase the capital sum?
In addition, the pound sterling, which stood recently in the region of 2·40 dollars to the pound, last week
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dropped below 1·38 dollars to the pound. I need hardly stress in these surroundings that this alone puts us in difficulties in attempting to retain in this country our inheritance of works of art and cultural objects which still remain in private possession. Whatever the Getty Trust does or says it is going to do, this problem must be faced now, and it must be faced fair and square and without equivocation.
My comments this evening are intended to imply no criticism whatsoever of the Getty Trust. They are, in my view, doing a fine job. All of those interested in the arts can only praise Paul Getty's generosity and the skill of the trustees and staff in the way they are carrying out the role he devised for them. Of course, as we all know, there are other institutions and private individuals in America and elsewhere which have funds enabling them to compete successfully for our works of art against any sums which we in this country can at present command.
For example, the Kimbell foundation at Fort Worth, Texas, has more formidable resources than any of our great museums. Nevertheless, its financial muscle is in a wholly different league from that of Getty. In addition, the fact should not be overlooked that American citizens have long enjoyed income tax incentives to support their public museums, with the result that many American institutions have become the envy of the civilised world in the latter half of this century.
But what is the position in the United Kingdom? Let no one doubt that private owners still constitute the major source of supply. For the past quarter of a century, our export controls have been fair and liberal, and I am delighted to see that among those who will be speaking tonight is my noble friend Lord Eccles, who was such a distinguished Minister for the Arts and who helped to oversee those controls several years ago.
Until now, those controls have served us well, with only a handful of major losses—such as the Radnor Velazquez, which left the country a few years ago. It is now time for us to wake up and anticipate the future rather than shut the proverbial stable door after horse upon horse has bolted. I need not remind the House that the current horse nearly out of the stable is the Siennese Crucifixion, already bought by Getty, which the Manchester City Art Gallery is fighting to retain. In this connection, I welcome the National Art-Collection Fund offer of £½ million to help Manchester. I also welcome the fact that the noble Lord, the Marquess of Normanby, who is chairman of that fund, will be speaking tonight.
I personally am not in favour of restrictive actions or the extension of the current system of export licences. This is because, in my view, too much protectionism distorts the world art market and because there is a positive answer available to us anyway. There is no mystery as to what should be done. A number of knowledgeable, far-sighted bodies and individuals have repeatedly not only sounded warnings but have offered highly constructive solutions related in one way or another to fiscal reform. Some of these suggestions have been implemented, but none in any depth—and the overall situation is that no fiscal measures have been taken or seriously considered by successive governments.
I wish, then, to concentrate on the fiscal area this evening—particularly in view of the Conservative Party election manifesto of one year ago which said that we would:
"examine ways of using the tax system to encourage further growth in private support for the arts and the heritage".
The first aspect of the tax system which requires such examination is that relating to income tax. There is a necessity in present circumstances for substantial contributions from private sources to assist in financing specific additions to our museums and galleries in public ownership. But such contributions on an adequate scale will not be forthcoming unless and until sufficient tax incentives are made available to them. These could take the form of allowing, at the discretion of the Treasury, deductions from income tax up to a certain percentage of total income of monies expended for the purpose of adding objects carrying the approval of my noble friend the Minister for the Arts to the collections of our public museums and galleries.
This will have a similar effect to certain provisions in the United States tax laws, to which museums in that country owe so much and which I mentioned earlier. In this regard, it is ironic that those provisions can be made use of by United States taxpayers to benefit the museums of this country provided that certain formalities have been observed by the recipient institutions. But, of course, no such inducements are available to taxpayers in the United Kingdom.
Secondly, I turn to capital transfer tax, which regularly precipitates the sale—often overseas—of so many of our art treasures. There exists, of course, the statutory possibility of settling such liabilities in kind by the surrender to the state of works of art and museum objects. However the total amount of tax debts discharged in this manner during the whole financial year just ended was less than £1 million. It is obvious enough that the system cannot be working in such a way as to have an appreciable effect on the problems confronting us.
I may remind the House again that the Getty Trust has to spend at a rate exceeding £1 million a week—and that many sales at auction of course exceed that figure at a single session. Why, then, is this possibility proving less attractive than it ought to be? In order to answer that question, the terms for the payment in kind of capital transfer tax debts have to be examined. The position is that although any object accepted for this purpose is by statute exempted from tax, the treasury withholds, in accordance with an administrative decision made more than 25 years ago, three-quarters of the benefit of this statutory tax exemption when arriving at the amount of tax debt that can be written off in its books. This high proportion was criticised as excessive only recently by a Select Committee in another place, which, in effect, urged a reduction to one-quarter.
Many distinguished bodies and informed persons have taken the view that, in any event, the benefit of the statutory tax exemption ought in future to be divided more equitably. It should be done in such a way that, although the state would still come into possession of a heritage object at a reduced figure, the other party to the bargain—that is, the owner—would
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receive increased encouragement to enter into it. An equal inducement or douceur to both parties to the transaction—the 50/50 division very reasonably favoured by the Museums and Galleries Commission—obviously has a great deal to recommend it.
Such a reform would not only benefit our public institutions but would also enable fuller use of the far-sighted provisions for some of our treasures to remain in situ, in their historic heritage. Many of us feel that very strongly. This action by owners could be encouraged by cutting back the time taken to reach decisions. As my noble friend will know, his department, the Department of the Environment and the Treasury are all involved; any delay often causes excess interest payable to the Revenue, and this is bitterly resented. Another aspect is the ceiling for total acceptances laid down by the Treasury, and I believe that this should be removed. It is worth bearing in mind that in France, where payment of succession taxes in kind is possible, no percentage of the agreed value of the object surrendered to the state is withheld for the purpose of discharging the tax.
The third area I wish to cover this evening is an indefensible Value Added Tax anomaly. Both my previous suggestions were for incentives to be provided to induce the private sector to become involved in a positive way. But VAT, which can arise in certain circumstances on sums payable by public museums for acquisitions for their collections, has a negative effect—thus causing an irritating disincentive to private generosity playing its part in contributing to those very acquisitions. Municipal museums can claim relief but national institutions and universities cannot do so. And as is well known, VAT on sales to all foreign purchasers is zero rated for reasons intrinsic to the tax. But since this incentive for overseas sales is to the detriment of our public institutions, sales to the latter ought at least to be put on an equal footing by being zero-rated also. This could be done for the sole and sensible reason that the financing of additions to our public galleries and museums ought by definition not to entail any payment whatsoever to Customs and Excise by these institutions or by any private support which they may attract.
In conclusion, I am putting to my noble friend the Minister that, first, he should recognise—and I am certain that as a very distinguished, hard working and successful Minister for the Arts he does recognise this—that there exists a very real problem of potentially massive dimensions which it would be unwise to brush under the carpet any longer. Secondly, that the Government should consider taking the initiative themselves, by acting to deal with that problem in advance, before they are constrained to do so by the predictable march of events.
In other words, I am asking that the Government should put into effect as a matter of urgency the undertaking given a year ago in the election manifesto. I have drawn attention to three divisions of our taxation system in which constructive action could ensue. I recognise that my first suggestion, relating to income tax, will require time to work out and will have to be postponed until next year's Finance Bill. But, given the necessary goodwill, the other two could in theory be put into effect without delay. The reform in

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CTT accounting is merely an administrative rather than a statutory matter, and the zero rating of VAT on sales of works of art to our public museums and galleries could be added to the Finance Bill at present before Parliament. Such action—and I am sure my noble friend would agree if his colleagues in the Treasury would agree with him—would unquestionably meet with a welcome from all quarters.
The Treasury may consider that these proposals would increase public expenditure. I cannot accept that. We have a radical and far-sighted Chancellor of the Exchequer who, by implementing my suggestions, would be instituting a major and important reform of our tax system and would provide investment for the future, which all of us wish to see. I am glad that my noble friend Lord McAlpine of West Green, who is a distinguished collector in his own right, is to make his maiden speech tonight, as is the noble Earl, Lord Munster. The number of your Lordships who are intending to speak this evening shows the great interest that this subject has aroused. I hope that my noble friend the Minister for the Arts will be successful in persuading his Treasury colleagues to accept the gravity of the situation and to put in train the fiscal reforms which are so urgently needed.
8.41 p.m.
Lord Beaumont of Whitley: My Lords, the number of your Lordships who have put down their names to speak—an almost unprecedented number for an Unstarred Question—is token enough of the debt that we owe to the noble Lord, Lord Fanshawe. We are particularly lucky tonight in having two maiden speakers, both of whom have great practical experience in this field. Your Lordships' House has a reputation for producing experts on any given subject. I remember that I made my maiden speech on an Unstarred Question on primary schools in Hong Kong on the basis that, as the only member of your Lordships' House who had actually been governor of a primary school in Hong Kong, I was keeping up the record of your Lordships' House for expertise.
In this particular field of the national heritage your Lordships have a very great wealth of experience, but outstanding is the fact that the noble Earl, Lord Munster, has the practical experience involved in this field and the noble Lord, Lord McAlpine, has a series of collections of art for which all of us who have been interested in and treasure modern art in particular, and who have had the opportunity of seeing them, have been grateful over the years. We are grateful, too, for his munificence in his gifts to museums.
I must not be caught by any of my colleagues in saying that this Government are actually preserving the country's heritage. Indeed, I would not because in a number of ways they are not. However, in the sense that the noble Lord, Lord Fanshawe, uses the term, I confess that I think that the Government are probably doing as much as they can, or should. We have—and the noble Lord, Lord Fanshawe, paid tribute to this—the satisfactory and meticulous machinery for identifying those objects which really are a part of our national heritage and which we should make every effort to keep in this country. The original griddle on
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which King Alfred burnt the cakes and the original copy of the British Consititution are objects which we rightly wish to preserve. We should make every effort to keep them in the same way as we respect the wishes of the Scots to hold the Stone of Scone and the Greeks to have the Elgin Marbles. Perhaps more importantly, it would seem fitting that where there are native artists, in whatever field, we should try to keep together at least a representative selection of their work. It is proper, for instance, that the best selection of Turner's works should be held in this country, even if we are not prepared to abide by the wishes of the artist as to how they are to be preserved and shown.
The doctrine of free trade, like all doctrines, is one which needs to be kept within certain bounds. I believe that it is right, for example, that we should not barter our native heritage for a mess of pottage. Let us by all means treasure that which we have produced ourselves and which is part of our proper heritage. On the other hand, when we start complaining that our heritage is being dispersed by the sale of pictures brought out of another country by our rich ancestors, I believe that we are going too far. To say that a Leonardo or a Cimabue are part of this country's heritage in anything except the most dispersed sense of the phrase is taking the argument too far. Our only proper interest as a nation is. surely, a respect for art itself and a real care that the works in question should go where they can be looked after.
I say a real care because too often, as in the case of the Elgin Marbles, such an argument is deployed by those who would fight to retain them even if they knew for a certainty that they would be looked after at least as well as they are here. If we really care for art, and are to be honest and not hypocritical, it seems to me that we should be eternally grateful to the Getty Museum. Indeed, the noble Lord, Lord Fanshawe, has already paid tribute to it. Those of us who care for art—and that is surely the great majority here—could hardly imagine anything more blessed than a foundation with a very great deal of money which is dedicated to the preservation of art. Think of it—an institution with pots of money dedicated to the preservation and display of the best of art! Pictures which have been tucked away in your Lordships' stately homes would at last be displayed for all to see. Objects of virtue which have been stored for generations in vaults because there has not been the money to display them, restore them or even in some cases preserve them would be at last released, cared for, restored, cherished and available both to scholars and to the public at large. What more could any true art lover want?
It is true that the Getty Museum is not just up the road. But the problem of distance is not one which has been wholly ovecome in human life altogether. A stately home in Cumbria is not just down the road from Los Angeles either, or from us here. Wherever pictures are kept there will be the problem of distance for the majority of people. But again, it is a good thing that works of art are in an institution which can afford to catalogue and reproduce them adequately and to disseminate the results.
It is a slight pity that such an institution should be established in a country which is one of the major participants in the cold war. Let us pray that the kind of skirmishing which has just dealt such a blow to the

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Olympic Games—or, rather, which dealt such a blow four years ago when it started at the Moscow Olympic Games—does not invade the art world. But perhaps even then it is preferable that such collections should be subject to that kind of action than that they should be in the Lebanon or Nicaragua. For all our fears, we are probably right to trust the powerful nations who, for all their posturings, in the last resort display that sense of self-preservation which we are told distinguishes even the lower animals, and export their wars to other countries.
In no way do I denigrate the art galleries and museums of this country. They do a wonderful job of work. However, if there is any money to spare—and that sentence contains enough material for several debates that we have had in the past and the several more that we shall no doubt have in the future—let it be given to them so that they can do their work properly with the works that they have at present. There is far too much tucked away that comes out only for special exhibitions. The Friends of the Guggenheim are at present in this country viewing our treasures. I am delighted that we have treasures to view; but I grudge neither the Guggenheim nor the Getty such treasures as they can afford. The only treasures that we should weep over are those that are closeted away or left to deteriorate, and there are still far too many of them in Britain for us to waste tears, time, money or a great many more words on works which will be both cared for and shared with the world at large.
8.50 p.m.
The Earl of Minister: My Lords, this is my first opportunity to speak in your Lordships' House and I ask for your indulgence. As a nation we cannot compete with the Getty Trust in the acquisition of works of art. We must accept that fact, and indeed congratulate the trust on the apparent restraint it has shown to date. Published comments from the director of the trust demonstrate that the trustees are fully aware that the eyes of the world are turned on them, and they are also aware of their responsibilities and are keen to discharge them honourably. The trust has in fact stated that it intends to encourage scholarships in connection with the arts from the creative, conservation and research aspects. Perhaps I should declare my interest in the subject in as much as I was employed for some years as the conservator of the stained glass at the Burrell collection in Glasgow.
An apparently excellent proposition was made some years ago to invite the Getty organisation to exhibit on a permanent basis in this country. This does not appear to have been taken up, and so I would urge the Government to revive the idea. I suggest that a satellite museum would increase enormously its prestige in Europe and would make a significant contribution to the life of our country, particularly if it were to be established in one of our more deprived areas, such as the West Midlands or the north-east, apart from increasing the respect for the trust among international arts circles and allaying the fears that have been expressed about its unparalleled spending powers. The benefits to the area of the establishment of such a museum would be manifold and would bring building work for some five years. On completion, it would
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attract visitors, both local and international, who are unable to travel to Malibu, thereby boosting the economy of the area.
The Burrell collection in Glasgow is an excellent example. Since last October, when Her Majesty the Queen opened it, it has had in excess of 354,000 visitors, and during the past few Sundays, when it was open for only three hours a day, over 9,500 people passed through each day.
The proposal would bring cultural facilities to a district that could not afford them, and it would cost not a penny on the rates. I am sure that it would give the people an interest and a feeling of pride to have a feature in their area, apart from the fact that it would give permanent employment to both maintenance and administration staff, as well as to those who conserve and care for the museum objects. I feel very strongly that the actual title to the works of art is of less importance than their availability to be seen, possibly for the first time by the people of this country. Finally, I should, as a new Member, add my thanks to the noble Lord, Lord Fanshawe, for raising this important subject.
8.53 p.m.
Viscount Eccles: My Lords, it is a privilege to be the first to congratulate the noble Earl on his maiden speech. We shall listen to him with great interest on future occasions. I think that we all know what expert knowledge he has on stained glass, and that and other subjects in the arts field greatly appeal to this House. I hope that he will make many contributions.
I should like to thank my noble friend Lord Fanshawe, who we are very glad to see with us in this House, for making a splendid case on behalf of tax reliefs for works of art which are offered to public institutions. I could support that case only if at the same time more money were made available for the living arts. I want to look for just a moment or two at the tension between heritage and contemporary art. Whatever we mean by heritage, it is something that does not stand still. Land use changes, buildings fall down, pictures are lost, and sculptures are broken. All the time we must hope that new works of quality will be added to the tradition. The heritage lobby is now so strong that we might get the balance wrong between the past and the present and not show enough confidence in our own artistic future.
My views have not changed on the export of works of art. I have always said that I would do everything possible to prevent leaving this country objects which were directly connected with our history, and especially works by British artists if the work in question would fill a gap in one of our collections. On the other hand, I would not withhold a licence if the object, however rare and beautiful, was of foreign origin and was in this country only because some discerning collector bought it when it was on sale. That category of art is international. Until the United States came into the market no country was more responsible for the movement of international art than we were. It would be bad mannered now to turn protectionist and refuse others the chance to do what we did on such a grand scale in the past.

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Another practical reason should make us hesitate to ask for tax relief as put forward by my noble friend, I think really only in respect of objects going into museums and galleries. The value in money of objects of the highest quality is bound to go on rising, and rising faster than the general price level. That is because the supply dwindles as more and more of them are locked up in museums and galleries and, for reasons well known to your Lordships, because the quantity of money chasing these works increases continually. In the United States you cannot get a peerage, but you can have your name in big letters on a museum. The Getty Museum is the last, very well managed example of that fact.
The boom in art will continue and so it will require more and more public funds to compete with American, Japanese and other foreign collectors. How far we should provide larger acquisition grants and further tax reliefs ought to be considered only in conjunction with what we are providing for the living arts.
I would ask your Lordships to reflect on two current examples of that dilemma. As has been mentioned, an export licence was refused for the Duccio. It is a rare and very fine picture, but it has nothing whatever to do with British history. The money required to keep it here happens to be exactly the same as one whole year's grant to the Crafts Council. The Crafts Council is mainly responsible for the strong revival in British crafts, but there is a great deal more to be done to broaden the market for the work designed and made by some 20,000 men and women who are trying to make a living out of crafts. Many more young people coming out of the art colleges, and a great many amateurs, would like to become professional or semi-professional craftsmen. Another £500,000 or £1 million a year to the Crafts Council would enable it to build on its success and greatly to extend employment in an area which today, as we all know, badly needs further employment. Now, which is more important, the Duccio or the living crafts?
My second example is Calke Abbey. Putting that dilapidated house in order, providing an endowment and reckoning the revenue loss to the Treasury by taxes forgone, a Minister in another place said that all that added up to between nine and ten million pounds. This figure is four times the sum which the Arts Council, with many tears and groans, is to squeeze out of its budget to give a little extra help to the regional arts associations. Then, which is more important— Calke Abbey, with its clutter of junk and hundreds and hundreds of stuffed birds, or the living arts in the regions?
That fine but eccentric poet, Ezra Pound, said that keeping up with the arts means keeping living artists. So it does. And while the money should be found to hold on to objects directly connected with our history and to maintain buildings of the highest quality, it is at least as important to encourage the spread of artistic activities to all parts of the United Kingdom.
In time past, religion was the catalyst which integrated art into the life of society. Money has taken the place of religion and the result, as the right reverend Prelate the Bishop of Liverpool, said in his
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latest book, is that not only the poor but the affluent and the influential are caught in the trap of a divided society. How do we get out of that trap? Surely, one obvious way is to multiply civilised experiences which we can all share from wherever we come. Without doubt, the love of our common heritage is one such experience and another is the spread of the living arts. But if we do not keep a good balance between the two, we shall discover that heritage rhymes with dotage.
9.3 p.m.
Lord McAlpine of West Green: My Lords, time and again we become embroiled in a great debate as to whether this painting or that suit of armour or another work of art should be allowed to pass into the hands of some wealthy foreign collector. There is a tendency to view such activities as being a particularly damaging form of foreign subversion. Surely this is wrong. We should not view our national heritage as some form of fossil. It is not a monument in danger of collapse because one or two pieces of the brickwork have been removed. If we view our heritage in that fashion, it simply encourages stagnation and a closed mind, which will not save our heritage but will stifle it.
The world of art is dynamic, and constantly growing. We are doubly blessed in this country by having both a long history of artistic achievement, and also an artistic base today which is perhaps more vigorous and productive than it has ever been. We are not in the painful position of watching the erosion of our artistic wealth, as some would have us believe. We are in the enviable position of watching our treasures added to every day.
We have the world's greatest living sculptor in Henry Moore; Francis Bacon is arguably its greatest living painter. We have immense national assets in the form of painters, musicians, potters, silversmiths, jewellers, sculptors, designers and craftsmen. Our theatre is the envy of the world, and our film industry is once more building an international reputation for excellence. We may not yet know which of today's practitioners will become tomorrow's legends, but we do know with total certainty that many of them will.
If we were in Japan, many of our artists would, even in their own lifetimes, be called living national treasures. But in this country we are more timid about rushing to such judgments, although we must remember it is a wonderful thing to live for posterity. It is, however, more difficult to live on it.
Without doubt, in generations to come, the names of many British artists will shine. So we should not be totally preoccupied with saving the fragments of past years, as valuable in artistic terms as some of these fragments are. Our concern should not only be with yesterday, but with today and tomorrow. We should support and expand the appreciation of the arts in Britain so that we can create a climate that attracts great artists to our land. In the long term, it is most important that we should ensure a vibrant cultural heritage to pass on to future generations.
But how will this happy situation come about? By jumping on the bandwagon of subsidies and Government support? Is this the way to combat wealth from overseas? I do not think so. Excessive Government subsidies are not necessary. Indeed they

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are wrong. Government and its bureaucracy are no more able to decide how much money is required to support the arts and where the money should go than anyone else. Indeed, I might well argue that government and its bureaucracy are probably least of all able to make such decisions.
Government has a role to play, and this Government have given very extensive financial support to the arts, even during a recession. But I do not want the Government and their agents to become the arbiter of our national taste or the paymaster of our artists. Indeed, if it had been left to governments to decide on the components of a nation's cultural heritage, many of the world's greatest artists would have lived in obscurity. Committees cannot create art, and at the end of the day, committees cannot really decide on art. That must be left to the taste of the individual, who has the freedom to be wrong.
Throughout the ages, it is not Government intervention which has ensured the survival of the arts, but the support of individuals. Gainsborough, Constable and Turner (whose great patron was John Ruskin) survived and occasionally prospered, because of the support of individuals during their lifetimes. And it was not governments but individuals who helped them.
In fact, the great sponsors of the art world today are still individuals. For instance in the United States there are the Gettys, the Armand Hammers, the Mellons. Some may dislike them for their wealth and their great ability to sponsor the arts, but nobody can deny the immense contribution they are making to future generations of their countrymen by collecting these treasures. Anyone who cares to criticise them should first acknowledge that many of these men are truly international supporters of the arts.
Governments can help, of course. These American art sponsors all take advantage of the tax concessions offered by the United States Government. I note the encouragement given to our Government by my noble friend Lord Fanshawe for a similar system in this country. But, even without these advantages, individual art sponsors can still play the major role in this country.
We should not forget that the overwhelming majority of exhibits at many of our major art galleries have been donated by individuals. The National Gallery was founded by an individual. Perhaps 75 per cent. of the collection at the Tate, and most of the Scottish National Gallery were provided by individuals, not by the state.
But is it right that wealthy foreigners should be allowed to come and buy art treasures in Britain and take them to museums halfway round the world? I have to smile when I remember where so many of these treasures originally came from. It is certainly not apparent to me that Velasquez, Titian or even the Elgin Marbles owe too much in origin to the Anglo-Saxon culture. We have benefited throughout the ages from what might be termed a system of cultural exchange and we should not get unduly hysterical because some of the exchanges occur in the other direction. The export of some of the fragments of our great collections should not cause us undue concern. We must remember that our cultural wealth is not a
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stagnant pool but a growing one from which others should be allowed to drink and from time to time without any great harm to the rest of us.
How can we ensure that this cultural exchange is conducted in moderation? No one wishes to see our museums, galleries, and stately homes denuded. It is simply by taking on the Americans, the Germans and the Japanese at their own game. They come shopping here because they can afford to, because they are citizens of wealthy societies. In the long term, the only way to ensure that we retain our existing national heritage and provide the base for a growing national heritage for generations to come is to encourage a wealth-creating society which will be able to sponsor not only our hospitals, our schools and our other social services, but also the arts.
There is no other way. The alternative would be to condemn ourselves to relative poverty and squalor—circumstances in which the possession of great art treasures is impossible, irrelevant or even offensive. I believe in the creation of wealth as deeply as I believe in the arts. The two are not only compatible; they are inseparable. Our ability to preserve our cultural wealth is based on our ability to produce financial wealth. Just as I believe that cultural wealth should be shared as widely as possible, I also believe that the opportunities to enjoy financial wealth should be shared as widely as possible.
I feel sure that we shall return to both subjects many times in the future and I look forward to being allowed to speak again on those occasions.
9.10 p.m.
Lord Charteris of Amisfield: My Lords, it is my privilege to be the first speaker to be able to congratulate the noble Lord, Lord McAlpine, on his vigorous, humorous, imaginative and sensitive maiden speech. I am sure that all noble Lords hope that we shall hear him on many other occasions. I should also like to join in congratulations to the noble Earl, Lord Munster, on his maiden speech. I am grateful to the noble Lord, Lord Fanshawe, for having initiated this discussion. I venture to speak in it as chairman of the National Heritage Memorial Fund. I and other trustees of the fund have the privilege, I may say the pleasure, of spending in defence of the heritage such sums of your Lordships' money and that of other taxpayers that are allocated to the fund from time to time by Her Majesty's Government.
As your Lordships will know, the fund was established in 1980 as a safety net for the national heritage. The trustees of the fund have the responsibility of giving financial assistance for the acquisition, maintenance and preservation of not only what I may describe as movable heritage—pictures, sculpture, documents and books which, if they come on the market, are, of course, liable to be bought by the Getty Foundation or, indeed, by any foreign buyer—but also our real estate heritage—houses, woodland, wetlands, wilderness—our industrial heritage, which, incidentally, we find includes some extremely beautiful trade union banners, and also film archives, submarines, aircraft, and even bats.
The Earl of Gowrie: And belfries.
Lord Charteris of Amisfield: In the four years of our existence we have been amazed to discover how rich and varied has been what we have understood to be the heritage. I am often asked if we have enough money to fulfil our responsibilities. Of course, the superficial answer has to be, no. One cannot have enough of a good thing. That being said, however, I am glad to go on record as saying that it is my opinion that hitherto, within the ambit of what is reasonable and practicable, Her Majesty's Government have given us an extremely square deal.
The proof of the pudding is, as usual, in the eating. I can say with conviction that until recently—by which I mean until the beginning of this year—the trustees of the fund have not been forced to decline grant aid for any project that was in their opinion of supreme importance to the heritage simply because of lack of funds. So far, I believe, our funding has been about as well-judged as such things can be.
More recently, however, we have come to realise that our available resources are becoming increasingly modest in relation to the demands likely to be made on them. Of course what is sometimes called the Getty factor—the entry into the market of very large sums available to the Getty Museum to purchase movable heritage—is partly responsible for this change in the situation.
Certainly it is a changed situation, but I do not think that in any way it is a new ball game. Britain's movable heritage—as has already been mentioned, a great deal of it was moved here from the continent by the great collectors when this country was the leading economic force in the world—has before now been open to purchase from across the Atlantic by well-endowed organisations. Therefore I do not believe that the Getty factor is as unprecedented as some might believe. Nonetheless, it is a real factor, and I am sure the Government ought to do everything possible and reasonable to make it easier for Britain's heritage to be preserved and retained in this country.
However, I do not believe that we ought to contemplate, at least for the time being, making the export of works of art illegal or, indeed, much more difficult than it is now. I say this for three reasons. First, I believe that the Getty Trust are a thoroughly responsible organisation, and quite apart from any more lofty considerations they, who know the score just as well as we do, are unlikely to intervene in the market in such a way as to inflate prices grossly. They will not wish to kill the goose that lays the golden eggs. Of course, they will be able to pay the top price and as a result will acquire quite a few golden eggs. But bearing in mind also that these eggs will be extemely well preserved and available to scholars and to the increasingly more mobile general public, this is something with which we must live.
My second reason is that because our attitude to the export of works of art is reasonably liberal, London is one of the great centres of the art market of the world, and I believe that to be generally beneficial. My third reason is that I do not believe that this country, which has lived by trade, has ever really benefited from protectionist policies. I do not believe that it would be to our advantage to be over-protectionist about our movable heritage.
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This, of course, does not mean that we can afford to be complacent, nor that there are not things which the Government ought to do to make it less necessary for private owners, in whose hands so much of our movable heritage remains, to put their possessions up for sale. They ought also, as far as is reasonable, to increase the resources available to the National Heritage Memorial Fund. I hope I may say a few words about those two matters.
The export of works of art presents us with a very difficult dilemma, because so much property that we have and cherish and regard as our national heritage is in the hands of private owners, whose right to dispose of their own property must be recognised. The owners of works of art may have perfectly respectable reasons for wishing to sell. Very often they have to do so to make both ends meet, to support their families, or to put the roofs back on their houses. Sometimes the sale of a single item from a house or a collection can go a long way towards safeguarding the future in this country of whatever remains in it.
We could go a long way towards safeguarding our national treasures by taking off private owners the pressures to sell. Other noble Lords have already dealt quite extensively with the various tax reforms that are required and therefore I hope not to be repetitive. But there is no doubt that the real security of the heritage lies in the tax system. This is our first line of defence. When there is no choice before an owner but to dispose of a work of art, we should make sure that offering it to the nation in lieu of tax or selling it to a public collection is more advantageous than selling it on the open market. Here I agree that the douceur, which has already been mentioned, should be increased, possibly to 50 per cent.
I accept that increased funds may have to be found to fund this system, but this would still be cheaper than having to buy on the open market on behalf of the nation. A tax credit scheme for heritage items, to be operated within the procedures for their acceptance in lieu of capital taxes, would be a major help, particularly as it would apply to those more expensive items which would strain the limits of grant-aid or which would lie beyond its cash resources.
I think there is evidence that some private owners have not yet appreciated the advantages that they would gain by selling to a public collection under the private treaty procedures. The Office of Arts and Libraries has done excellent work in publicising this system, and I hope that this will continue. For this system is vital to public collections and of considerable advantage to the private owner.
Then there is the third line of defence—the Reviewing Committee on the Export of Works of Arts. I have already expressed the view that the right to sell must be respected and that, in the long run, absolute protectionism will not be to our advantage. But one useful amendment of the existing export control procedure would be to suspend the issue of export licences for more expensive items for periods much longer than the three or six months applied at present. If, for instance, a period were to be more than one year, this would allow the resources of more than a single financial year to be used and allow more time to mount an effective public appeal.

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In regard to ensuring that the National Heritage Memorial Fund is able to fulfil the role given to it by Parliament, I hope that noble Lords will forgive me if I indulge for a moment in fantasy. Let us remember the £50 million voted by Parliament in 1946 for the National Land Fund. Let us suppose that the money had been placed in the hands of a body of trustees, like the trustees of the National Heritage Memorial Fund, which is, of course, the successor of the National Land Fund. Let us also suppose that this money had been allowed to grow, as money is inclined to do if it is sensibly invested, and that it had not been largely clawed back by the Treasury. If that had happened—if that dream was a reality—it is probable that the National Heritage Memorial Fund would now have at its disposal, for the defence of the heritage, resources as formidable as those of the Getty Trust.
Of course, one man's dream can be another man's nightmare, and I fully understand that no well brought up Treasury official would feel comfortable if there was an independent body with that amount of public money to spend outside Treasury control. Nor do I think that any reasonable man could expect Ministers—even Ministers as sympathetic to the arts as the noble Earl the Minister for the Arts—to argue that resources of the scale of which I have spoken should be provided for the National Heritage Memorial Fund. We must, alas, be realistic.
However, I believe that Her Majesty's Government should allow the resources of the National Heritage Memorial Fund to increase in real terms as the years go by. The trustees of the fund can only do their job properly if they have—and if they are known to have—adequate resources. Let us remember that one of the reasons why the fund was set up by Parliament was to take out of the political arena difficult decisions about which bits of the heritage ought to be saved and which ought not. In my view, it is better if Ministers are distanced from such decisions. The fund was able to find the money from its existing resources for the National Trust to take over Belton, and so this never became an awkward issue. But when Calke Abbey came along our resources were inadequate and the matter was embarrassing and time-consuming for Ministers.
So I say, give the fund adequate resources and the trustees can then discriminate, and be seen to do so. We had to do this in the case of the Siennese Crucifixion and, if that was the wrong decision, we must take the blame for it. I think that that is the way it should be. After all, if the trustees of the fund make a hash of it, they can always be sacked.
9.24 p.m.
Lord Vaizey: My Lords, those of us who have seen the stained glass in the Burrell have ample reason, other than the maiden speech itself, to welcome the noble Earl, Lord Munster, among us, and those of us who for long have been friends of my noble friend Lord McAlpine of West Green also welcome him and his brilliant maiden speech.
As the Motion so persuasively moved by my noble friend Lord Fanshawe mentions the Getty Museum, I think that it is about time that we put on record some of the facts about the Getty Foundation, which is in
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danger of becoming a kind of spectre at the heritage feast, and is invoked whenever anything seems to go wrong. The Getty Foundation is not required to spend all its money simultaneously on the art markets in London. Indeed, only a small proportion of its total income is actually spent on acquiring works of art. It has embarked upon substantial programmes in conservation, which are important to us here, as has been mentioned already. It has embarked on a major programme for computerising arts history records which promises a major breakthrough in arts history scholarship, and it has a promising programme in the humanities and social sciences in relation to the history of art which also will be a big breakthrough.
In fact, I think it has bought only six or seven works of art in the United Kingdom since its foundation. Its remit of course is the whole art of Europe from the beginning of time down to 1900. Therefore, it would be surprising if the objects in this country loomed particularly large in the purchases that the Getty Museum happens to make. It is important to recognise that Los Angeles is not some primitive tribal area where the works are going to be destroyed. Los Angeles is a city nearly as big as London and grossly under-provided with the things that Londoners can take for granted. There are only three major museums on Los Angeles: the County Museum; the Norton Simon, and now the Getty; it has also the superb Huntington Library, which has been host to many British scholars of distinction.
It is not surprising that one of the richest and most important cities of the world should wish to show to its inhabitants and to its many visitors some of the cultural history of the West. I very much agree with other noble Lords who have spoken in the debate who have said that how on earth a work attributed to Duccio is supposed to be specifically part of the British heritage rather than part of the heritage of the whole Western world is difficult to imagine. Surely it must be the case that in a country like ours, which is so lavishly endowed with works of art and which has grave difficulties in preserving many of them, the interests of the country are served by a measure of free trade in the arts world. It was free trade that brought many of these objects to the United Kingdom. It is free trade which has established London as probably the major centre for the arts trade in the world. Therefore many objects are to be seen here which will only occasionally be seen elsewhere.
It surely is wholly in the interests of Western civilisation that we should preserve ourselves as an open society. This is not to argue that I think everything we possess should be dispersed immediately in other directions to Australia, New Zealand, or the United States, but we need to have a certain measure of realism when we realise that these extremely wealthy cities with highly-cultivated populations of art lovers are, relative to our great wealth of art treasures, deprived. Nothing in the world is going to stop the efforts of the citizens of those cities from acquiring works of art as and when they come on the market. I feel that narrow nationalism is always to be deprecated, and nowhere more than in the traditions of the Western arts, which are the great international tradition of our civilisation.

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The important point which we ought to impress upon Getty and other wealth creators like Getty is the point made by the noble Lord, Lord Beaumont, and by my noble friend Lord McAlpine of West Green, and that is the importance of sustaining and maintaining the living tradition of the arts: something in which we in the United Kingdom are blessed probably more than any other land in the West—in the variety of talents which are available to us.
The problem is not to keep one or other work attributed to Duccio here, possibly in Manchester—it is desirable that it should be, but I am not sure than £ 1 million is the right price to pay for it; the important point is to have theatres, opera houses and ballet companies up and down the length and breadth of the land and to have, as the noble Viscount, Lord Eccles, rightly said, the living tradition of craftsmanship which regenerates the whole of our national life. It is important to have great festivals like the Garden Festival now going on in Liverpool, which will do more for Liverpool, probably, than any other single thing for a number of years.
I begin to feel at times that this desire on the part of those who own beautiful objects from the past and who want to evade the tax man and invoke the national heritage is getting a little bit too strong. The visits which a number of us made to Calke Abbey caused me to have some second thoughts about the expenditure of nearly £10 million on something that my noble friend Lord Eccles has—moderately, in my opinion—described tonight. A little caution, perhaps, in tax giveaways to people threatened on the whole with rather moderate taxes, compared with what they used to be, would seem to me to be desirable.
9.32 p.m.
The Marquess of Normanby: My Lords, I should like first to associate myself with the expressions of gratitude to the noble Lord, Lord Fanshawe of Richmond, for having initiated this debate on a matter of such current importance.
I find that it is often difficult to avoid focusing too much attention on the Getty Museum itself and its many important purchases at the present time. The new threat to the effective protection of a few of our greatest works of art is the Getty-enhanced values which now obtain everywhere. These are paid by other museums and private collectors throughout the world as well as by the Getty trustees.
The problem is really one of market values which have escalated beyond all belief. The noble Lord, Lord Fanshawe of Richmond, was kind enough to mention the National Art-Collections Fund, of which I am chairman. This body has no grants from the Government and is entirely supported by legacies and gifts. The policy of Her Majesty's Government has, of late, been centred on the importance of enlisting the help of the general public as well as businesses to retain, when desirable, works of art which are to be sold. That is exactly what the NACF does or tries to do. But neither we nor the government-financed National Heritage Trust, which has such a wide field to cover, have sufficient funds to help match these Getty-enhanced values.
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The solution can only lie, in my opinion and as has been pointed out many times this evening, in the Government giving effective tax reliefs. I know that noble Lords will agree that it is factually true that the owners of nearly all the great private collections in this country are highly responsible and very patriotic people However, at times, as has been said, they need hard cash, and it is then that the present taxation incentives are totally insufficient to prevent the best works of art being put on the open market.
In America and elsewhere, taxation arrangements on gifts to museums are on a scale which is commensurate with present-day values. Our attitudes here are out of date. We even, as has been said by the noble Lord, charge VAT on the auction or dealer's commission when sales are made to a national or university museum or gallery. In the case of an overseas buyer, no VAT is payable: so the overseas buyer is thus actually favoured over the domestic purchaser even when the latter is buying for the national patrimony. It would appear, if I may say so, that the Treasury still holds the view expressed in a minute of 1856 advising the National Gallery—and I should like to quote the words:
"only to buy works from abroad because, as regards the finer works of art in this country, it may be assumed that although they may change hands they will never leave our shores."
In the following year, as your Lordships will remember, there was held in Manchester a great exhibition of treasures from English private collections. It is estimated that, during the next 50 years, over half the treasures exhibited at that exhibition had left the country. I am afraid that, now as then, we are living in a fool's paradise. Today, the new factor is Getty-enhanced values If we are to retain the very best privately-owned works of art, this can only be by a thorough reappraisal of two aspects of taxation—first, the reforming of the accounting relating to in-lieu acceptances and, secondly, additional encouragement by income tax concessions for benefactors in cash towards the acquisition of works of art for our public collections.
9.37 p.m.
Lord Cottesloe: My Lords, we must be very grateful to my noble friend Lord Fanshawe for raising a subject which is a matter of concern to all of us who are interested in the arts and in our heritage in this country. It has also had the peculiar benefit of enabling us to hear two quite admirable maiden speeches from the noble Earl, Lord Munster, and from my noble friend Lord McAlpine of West Green. Looking back over the years, there has been constant anxiety and constant pressure on successive governments that not enough has been done to foster the arts and to preserve our great heritage from the past. But, in fact, very much has been done, and it would be churlish not to acknowledge the advances made, especially in the difficult period of inflation since the war.
To take one or two examples, there is the Arts Council, founded during the war by my friend the late Lord De La Warr, at the instance of Lord Keynes, with a grant of no more than £250,000—thousands, not millions. Even a quarter of a century ago, when I was appointed chairman of the council in 1960, we

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received grant of no more than a million and a half. This year, it has a Government grant of £93·5 millions. The Tate Gallery purchase grant, which, when I became a trustee soon after the end of the war, was no more than £2,000—thousands, not millions—in this year is more than £2 million; while the National Gallery purchase grant is now £3⅓ million.
These are great advances by successive Governments, and there have been others, too. Much has been done by local government and by individual enterprise—the creation of the Chichester Theatre, the Barbican for the Royal Shakespeare Company, the creation of the Burrell Museum in Glasgow, the building by the LCC of the Royal Festival Hall and the creation of the whole South Bank Centre for the Arts, culminating in the National Theatre, an enterprise in which the Government and the GLC collaborated.
The fact is that, in the whole field of the theatre and the arts generally, this country, for so long so backward, now leads the world. And, of course, there was the recent setting up, as a result of the debacle of Mentmore, of the National Heritage Memorial Fund after the long frustration of Hugh Dalton's noble gesture when he was Chancellor in 1946 of setting aside £50 million from the sale of surplus war stores for the preservation of our national heritage as a memorial to the war dead, a gesture emasculated by the Treasury. I need not remind your Lordships of the shabby history of that affair about which the noble Lord, Lord Charteris of Amisfield, has spoken.
Much has been done but now the entry into this field of the Getty trustees, armed with the staggering sum of 2 billion dollars of which they are required by the American tax laws to spend 90 million dollars—that is more than £50 million—in three out of every four years, presents us with a new and dominant factor. They can if they wish easily outbid all the galleries and museums in this country put together; and not only that, they inevitably introduce with their immense resources a steeply inflationary effect on the international market for historic objects and fine works of art.
I am told—and I entirely believe—that the Getty trustees wish to be, so far as they are able, helpful and considerate in their use of the dominant power that their vast resources give them. If that is so, and I am sure that it is, and if their powers allow of it—as to that I am not fully informed—it might be that a suggestion put forward some years ago to my friend the late Mr. Joe Hirshhorn might be considered as a helpful precedent.
Mr. Hirshhorn was an American citizen of great wealth, who had of his own initiative formed what was undoubtedly the finest collection in the world of modern sculpture, some 1,500 pieces by sculptors from Rodin to the present time. He was anxious to put his collection into a trust that would prevent its dispersal after his death, and he offered it to New York
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if they would provide a setting for it in Central Park. The collection was valued I was told at that time, a quarter of a century ago, at some £25 million. The authorities in New York were not enlightened enough at that time to consider such a desecration of Central Park, and it was suggested to Mr. Hirshhorn—not by me—that he might be willing to establish his collection in London, where it would fill a conspicuous gap in our museums.
The suggestion so far commended itself to the Government here that they sent, at short notice, very surprisingly, a senior civil servant to see Mr. Hirshhorn in the United States and to discuss the matter, with the result that he came to London, was entertained by the Government at Lancaster House, and was offered a site in Regent's Park for a museum to house his collection if suitable arrangements could be made.
In the event the London project failed to mature, and the Hirshhorn Museum is now one of the great cultural glories of Washington. But it occurs to me as a possibility, even though it may be a remote one, that if the Getty trustees are not restricted in their operations to California or the United States, they might be persuaded to consider setting up a museum over here, perhaps in London, perhaps at Sutton Place where Mr. Paul Getty lived when he was in this country for 15 years, and if they were so disposed that would solve, or at least ameliorate, some of the problems that they present to the rest of the world.
Another aspect of these matters is VAT, the arrangements for which present a number of anomalies. The Government's recent announcement that VAT will not be charged on restoration and maintenance work on historic buildings is a great encouragement. There are other aspects that I hope may receive attention. One is the charge of VAT on the sale of their work by living artists, which is a strong disincentive of which I hope they may be relieved.
Another aspect of particular relevance to the preservation of the heritage lies in the fact that while an owner who is selling a treasure in this country has to pay VAT on the sale, if he sells it to an overseas buyer, it does not attract VAT. He therefore has an inducement to sell it for export and the foreign buyer has an advantage over the home one. That must be wrong.
A general imposition of VAT on sales for export is obviously not desirable nor indeed defensible. But perhaps the Government would consider, where a case can be made out, a reference to the Reviewing Committee of important objects to be sold at auction, for advice on their national importance, so that where they are of "heritage quality" (to use that current but rather deplorable phrase) they may be sold free of VAT, or something of that kind. The solution is not easy to see, but the problem is a real one, and I hope that my noble friend may be able to take these matters on board.
9.47 p.m.
Lord Annan: My Lords, I am not going to elaborate on the difficulties of our major national collections because that has already been done admirably by other noble Lords. I just want to thank the noble Lord, Lord Fanshawe, most warmly for initiating this debate and to congratulate both our maiden speakers on their excellent speeches.
I should like also to say that the trustees of the National Gallery have considered this matter as a result of the initiative of the noble Lord, Lord Fanshawe. I speak because the National Gallery, perhaps more than any other institution, is concerned by the issue which has been raised in this debate. Last summer I attended a dinner with the chairmen and directors of other national collections and, of course, with the noble Lord, Lord Charteris, who presides so admirably over the national heritage. It was a dinner which the Getty Foundation generously gave. There, they did their best to reassure us and to explain why they would not make "a pre-emptive strike" against our national treasures. Indeed, they made it very clear that buying works of art was only one of the programmes they had in mind and that in fact a very, very large proportion of their wealth is going on programmes, some of which obviously have a finite end, like the building of an enormous new museum in Malibu. Another, of course, is the excellent work they are doing in compiling a computerised catalogue raisoné of all paintings all over the world. These are just some of the things they are spending their money on, but it does not alter the fact that we are facing a genuine problem.
I do not doubt the sincerity of the trustees but times change, trustees change, and policies change; and it would be quite wrong to imagine that the Getty Foundation is the only American institution which is capable of outbidding British museums and galleries. Last February I had the mortification of seeing "The Resurrection" by Dirck Bouts in the Norton Simon Museum at Los Angeles. We particularly wanted it, as it was one of a pair of paintings and we own the other. But this great painting was not going to come to this country and we were outbid at auction.
May I start by saying what remedies I think are futile? It is sad to have to say it but, as the noble Lord, Lord Charteris, has already said, the Land Fund that Hugh Dalton set up just after the war would have seen off any American offensive if it had not been raped by successive governments. The trouble is that governments are always going to ravish such a lady, because the lady is so attractive and grows so rich. So any suggestion that we could resurrect the Land Fund, I rule out. In any case, the National Heritage Memorial Fund is supposed to have taken its place, though its resources are certainly not what Hugh Dalton had in mind.
Let me turn next to tax concessions. The United States gives far more generous tax concessions to its citizens. So, the argument goes: why not go on extending the principle which the Government have wisely applied to donations to charity? Surely the Government ought to ask some body such as the Reviewing Committee, reinforced with expert financial advisers, to consider ways and means of
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revising fiscal procedures to give potential donors more incentives to enrich the national collections. This was admirably dealt with by the noble Lord, Lord Fanshawe, and I shall not go over that ground again. I am bound to say that I think most of his recommendations would come up against very strong Treasury opposition.
The real difference between America and Europe is that America is the willing purchaser, and therefore finds it to its advantage to have tax concessions of this kind, whereas European countries are mostly unwilling vendors. So the systems of tax concessions on one and the other side of the Atlantic are bound to differ. I also feel bound to say that American experience shows that some of their procedures are widely abused. Institutions of art and learning suddenly appear in the guise of pirates ripping off the state, and a lot of phoney foundations which benefit nobody but the donor's family and entourage are seen to have been created.
The American system of tax relief has been responsible more than any other single factor for the escalation of the prices of works of art. I think, however—and I am with the noble Lord, Lord Fanshawe, here—that there is room for manoeuvre, but I suspect that the Chancellor and the Treasury will attempt to keep it as small as possible.
Then what about the douceur? Would the country benefit if this were doubled, as has been proposed tonight? It already stands at 25 per cent., with strong governmental indications, however, that when an item costs millions some figure considerably below 25 per cent. will be considered more appropriate; and here we have tonight a suggestion that it should rise to 50 per cent. I must say that to raise it more would not necessarily be dangerous, but it would simply mean that the purchase grant of museums and galleries would be depleted far sooner, because it is they who would have to pay the extra 50 per cent. douceur.
I shall not follow the argument about VAT, except to say that, of course, the trustees of the National Gallery are entirely behind what the noble Marquess said, and what the noble Lord, Lord Fanshawe, aired very properly in his opening speech. I should like to say, too, that it is thoroughly supported by that great-hearted collector Mr. Denis Mahon, who was a former trustee of the National Gallery and who particularly asked me to raise the matter.
May I now turn to another suggestion that has been made? Some people have suggested that the Government should designate a super-class of objets d'art which at present market prices might be expected to fetch £7 million to £10 million for each item. Why should not the Government—so the argument runs—set a figure of £7 million as a ceiling; below that the Waverley rules would operate, but above it they would not. Above that, it would have to be understood by any would-be purchaser that he would never get an export licence. I suspect that if that were the case we would find a steady number of sales taking place at the figure of £6·999 million. The remainder of the far higher purchase price would be paid by private agreement outside this country, after the transfer of

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property had taken place. I do not believe that the solution to our probems lies along those lines.
It is always said that in cases of emergency the Government can find the money; why not, therefore, have a contingency fund? The noble Earl has done wonders in screwing large sums of money out of the Treasury to replace the commitments which were hitherto borne by the metropolitan authorities. He has recently come up with a special grant to save Calke Abbey. He has found extra money for the Royal Opera House and the Royal Shakespeare Company. I would despise myself were I to grumble that the purchase grant to the National Gallery has, as a result, had to remain static.
No Minister can reinforce every sector every year. I just hope that the noble Earl will not mind if every so often I call to his attention the fact that old masters, more perhaps than any other single work of art, have long ago outstripped our grant. But there must be a limit even to the noble Earl's powers. If he continues to be so successful as he is, I suspect that he will be moved to a much more prestigious post and that his successor will be chosen so as to be much less successful. So if I pleaded for a special contingency fund I would expect the noble Earl to say that the Treasury would laugh him to scorn, for would not every spending department in the country put in a claim for its own contingency fund?
There will be those who will say that as we are members of the European Community we should do as our partners in Europe do and impose a ban on the export of any work of art above a certain value. The French are most strict, perhaps the strictest of all, but their procedures are flexible. A licence refused in 1960 will, in some mysterious way, be granted in 1985, because circumstances have changed. By that I mean that if, in 1985, France were to receive a benefit by the import of a work of art in return for permission to export, permission might be given. So there is a good deal of give-and-take in the French system.
Of course, Britain is by far the most generous and fair to private owners and the Waverley rules are designed to enable private owners to get a fair price. But it can be argued: is it not feasible to designate a very small number of exceptional masterpieces—shall we call them delectissima desiderata—whose owners would be told that they could never be exported? If their owners needed to sell them, they would be able to do so under private treaty. They would be able to agree a price with a national collection and obtain all the tax advantages and the douceur benefit. I do not suppose for one moment that the owners of these works of art, quite a number of whom are Members of your Lordships' House, would welcome any such change.
I would urge, however, despite the experience of the noble Duke, the Duke of Devonshire, whose recent negotiations with the British Museum broke down, that very rarely in my experience has it been the case that owners, advised by their own expert advisers and highly reputable art dealers, have questioned the valuation which in the end has been agreed with the particular museum or gallery, because without such agreement no private treaty sale can take place.
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I assume, however, that that course of action will not commend itself to the Government. If that is the case, it is up to the Minister to make use of the powers which he already possesses. It does not seem to me that there is any reason why the Minister should not declare publicly that the day has now come when he is prepared to advise the reviewing body to lengthen considerably the time before which an export licence can be granted. This would enable the National Gallery, for instance, to find time to accumulate funds from its purchase grant over a period of, say, seven years, to launch a public appeal, which takes time—you cannot do that in six months—and to find foundations and sponsors who will be prepared to save a particular painting for the nation. One should remember that private benefactors such as foundations may well be committed for one or two years ahead, or even longer. They would only be able to make a substantial contribution, say, four years or so after the first approach. When we are dealing with these very large sums, that is a factor that ought to be taken into account.
If anyone is going to say that such a long delay would be unfair to the owner or to the new purchaser of the treasure concerned, I wonder whether he would consider the political implications. The Waverley rules have been a remarkable example of consensus politics. They have been accepted by both sides of the House—but such agreement depends on both sides being satisfied that owners get a reasonably fair deal and that the nation gets a reasonably fair deal. If it were seriously to be argued that, say, a seven year delay on granting an export licence were unjust to owners, I suspect that before long there would be a reaction and owners would be pilloried for putting their own interests before the nation. I very much agree with what was said by the noble Marquess. They do not get criticised at the moment because they are extraordinarily and conspicuously patriotic in the way in which they think about their treasures and think about their ultimate disposal.
But it requires only two or three dilectissima desiderata paintings to leave this country and an outcry might arise for the country going over to the rules which operate everywhere else in Europe; namely, that no major work of art can ever be exported. That would be followed by smuggling and by the collapse of London as the centre of art dealing. What I am proposing is a modest change which only very rarely would come into effect.
I commend to the noble Earl three ways of meeting this new challenge. First, to declare that the length of time which he will in future grant to the national collections to match the would-be exporter will be considerably lengthened and might well extend to 10 years—perhaps even longer. Secondly, that he should consider establishing a list of dilectissima desiderata; treasures which are so precious, rare and exceptional that it would be scandalous if they left the country. It is for consideration, as I have said, whether they should receive an export licence.
Thirdly, I ask the Minister to reconsider in due course the purchase grants available to the National Gallery. I cannot speak for the five other national

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collections—including, of course, the British Library—but I think it is the National Gallery above all which has put most forcibly its case for an increase. I say that because I believe that the Getty Foundation and other American would-be purchasers guess that there will always be great obstacles put in their way if they attempt to lasso these absolutely super, major treasures. What they have their eyes on are the items just below the dilectissima desiderata list—such as the Bouts Resurrection.
Meanwhile, I thoroughly agree that the Minister should retain his present right to refuse to grant an export licence for 10 years if the purchaser refused to sell the to the national institution which had matched his offer. This right has already been exercised once, and I believe that the purchaser in question lent the object to the Victoria and Albert Museum—and therefore it did not leave the country.
This has been a very interesting debate and one which shows, extraordinarily, that the art lobby does not speak with one voice. There have been many voices here this evening. I suggest that the noble Earl may find that that makes it longer for him to reply to the debate—but it will certainly make it easier for him to pick and choose which advice he finds most to his taste.
10.4 p.m.
Lord Saint Oswald: My Lords, it must be extremely appropriate that tonight's debate will be answered by my noble and profound friend Lord Gowrie, for it allows us to examine the problems of the national heritage across his joint responsibility for the arts and the Treasury—added to which he has responsibility for employment. I wonder what other Minister would have been given the burden of both major debates in the course of one day.
As the noble Lord, Lord Annan, has just said, there has been no consensus in this debate. In an ideal world art should follow the market, but the ideal world has not yet been achieved. Losses of pre-eminent works of art from this country are reaching alarming levels. Export licence applications to the Department of Trade for pictures and objects valued at over £8,000 are now running in excess of 500 a day. The Reviewing Committee on the Export of Works of Art, chaired by my noble friend Lord Plymouth, has reported that cases brought before it for the year ended 30th June 1983 were more than double those for the previous 12 months, due in large part to the enhanced value of the dollar. We await its report for the present year with some anxiety.
It is, happily, Government policy—as in any enlightened country it should be—to stem these losses as best possible. It is also, however, continuous Government policy to operate a tax system which does much to force on to the open market those objects whose loss abroad we most deeply lament. I refer of course to capital transfer tax. I wonder whether my noble friend the Minister for the Arts can tell us in the wind-up how far he regards CTT as a principal culprit behind the break-up of historic collections and the loss
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of works of art abroad He will hopefully be able to tell us how long it will continue to have a part in this tax-reforming Government's scheme of things On 1982 figures, it yields about £500 million a year at what I fancy to be high collecting cost. It is widely seen as an ill-drafted survival of the rushed legislation in 1974 It seemingly raises even less in money terms than estate duty in its final years; but it wreaks, I would guess not much less damage than a simple and punitive wealth tax would on the artistic fabric of this country.
Exemption from CTT for pre-eminent works of art is, of course, a long-standing concession; but the noble Earl, Lord Plymouth, now tells us in his report that the practice of seeking such exemption is decreasing. Perhaps my noble friend Lord Gowrie can shed a little light on that. Might it be in part because the Treasury has not played a proper part in advertising the terms and conditions of exemption? For a Government which believes in free and undistorted markets, the heart of the matter is surely to attend to the tax stimuli which force art treasures of long standing in this country to be sold and therefore lost abroad. It is my hope that if the Government identify CTT as the forcing house for such sales—as, fuelled by the strong dollar, it appears to be—then prompt action will reform it.
I turn now from the domestic culprits in forcing sales to the main external threat to our heritage within the international art market. It is one that has been mentioned several times today in different terms—the J. Paul Getty Museum in Malibu, California. In common with certain other noble Lords, I cannot feel apologetic for singling out that museum because, armed with funds which it computes this month to be 90 million dollars per annum, it is moving on to the offensive against us Mr. John Walsh, the new director at Malibu, is quoted in the April issue of Art News—the largest circulating art magazine in the United States—as saying:
"It's amazing how stones about the Getty ripping off the art market get going in England None that I've ever heard had any relationship whatever to the truth. They are essentially fabrication by people in the trade to strengthen their hand".
The Getty organisations have become, though perhaps a little close to eventide, acutely sensitive to the suspicion in which their activities are held in some quarters. Today I received—as, no doubt, did other noble Lords—a substantial document from their London advisers. It is a defensive, closely-argued and self-confident tract, composed to allay and contradict all such suspicions. Like my noble friend Lord Fanshawe and others who have spoken, I agree that indeed the existence of a powerful body, dedicated to acquiring the art treasures of the world specifically for public display must inspire in itself admiration, acclaim and approval.
To support his line that far from ripping off the art market in England, the Getty Museum is no threat, Mr. Walsh and his colleague, Mr. Harold Williams, President of the J. Paul Getty Trust, publish figures that acquisition in Britain since 1981 amounts to a harmless 11 per cent. of all purchases. That figure is of course to signify volume and not value—the number

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of items bought or to be bought. Therefore it is not related directly to value.
Both Mr. Walsh and his statistic avoid the point. The Getty Museum, as Mr. Williams explained at what we have been told was a rather splendid dinner at Brooks's Club last October for our museum directors, is at this period devoting around half its funds to the 100 million dollar creation of a computerised centre for the history of art and the humanities in Santa Monica, California. That means fairly simply that the Getty's full weight in the art market has yet to be felt. After 1986, with the computerised centre complete and paid for. things will be far more menacing than now.
More alarming yet to those who believe that supply and demand in a free market will eventually find each other is the inevitability that Britain will prove the favourite hunting ground for that museum. Mr. Getty, like other American millionaires before him, such as Mr. Mellon. Mr. Pierpont Morgan, Mr. Huntington, Mr. Frick and Mr. Kress, has set out to find immortality through financing a world class art collection. In 100 years no schoolboy will remember Getty for oil; only for art.
Worldwide, museum-worthy works of art are no longer plentifully found in private hands. In the West there can be no dispute that Britain is by far the most important repository of these, endowed as we still are with country houses not yet emptied of acquisitions made in the 17th century and on the Grand Tour— acquisitions of which certain noble Lords seem rather ashamed. The Italians bolted their stable door far too late. The French, though now vigilantly operating a pre-emption scheme, have seen much sold from the chateaux and from the Paris hôtels. Germany and Switzerland, though retaining important private collections, are no longer a major force on the international art market. Like it or not, it seems to me inevitable that sooner or later Getty's 90 million dollars per annum and those major privately-owned art treasures left in Britain will home in on each other.
It is small relief that, as Mr. Walsh tells us, his museum employs no agents in this country and makes no probing telephone calls. It does not need to. The fame of its dollars is world-wide, and conceivably immortal. The fact is that we have works of art which this modern Maecenas dearly desires. In the end, unless we take steps to prevent it, the "Getty factor" mentioned by Lord Normanby, may easily swamp us.
May I say briefly to those of my own closely associated noble friends who do not believe that we have any right to interfere in a free market of willing sellers and a willing buyer that the Getty Museum does not operate in a free market at all? Armed with a purchase grant 12 times that of our own National Gallery, as we have been told, and many times that of the Louvre, the Rijksmuseum or other American galleries, it has created its own market—a market in which it can theoretically obtain anything it wants. It is a wholly one-sided market, and those of us at its mercy are entitled to take protective steps should the Getty Museum in the future abuse its tremendous power.
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Mr. Walsh tells us further that,
"some people still won't admit that it's quite plain that it's not in our interest to spend one dollar more than we need to spend for something".
Now if this is intended to suggest that Getty never overpays, and cannot therefore be guilty of raising market prices, an element of irony is introduced. Numerous recent transactions have seemed, if correctly reported, to be generously priced. Of course, at auction Getty can claim that it pays just 10 per cent. more than an underbidder. But to further claim, on the strength of this, that it is not inflating the auction market is a visible mockery. Its very entry at the top of the old master drawings market in 1982 to 1983 has lifted prices dramatically throughout the entire range. To underline this point, Getty is now seeking an export licence at a record price for the Rubens drawing of the "Man in Korean Costume" formerly owned by Lady Head, on an offer of £301,000.
The Getty directors have lately, as mentioned, been trying to establish trust in England, for instance by direct contact with, I understand, my noble friend the Minister for the Arts and the Museums and Galleries Commission.
"We've been trying to avoid trouble for ourselves".
writes Mr. Walsh.
"by attempting to find out when one or another of the national collections has a serious enough interest in something on the market to try to raise funds to keep it in England. In that case, we'll try to get out gracefully. But we've never said that we would stop trying to acquire works of art in England. What we've said is we would do it fairly and observe both the letter and the spirit of the export laws".
Mr. Harold Williams, the Getty Trust President, used the operative word "consultation" in his October speech at Brooks's Club, according to a transcript which has been placed in my hand. Mr. Williams was not over-precise about the details but the gist of this form of "consultation" was. as I understand it, that, if Getty became aware of a major conflict of interest with a British collection, it would back off. The interest of good relations was of the highest importance to them.
Now these kind words have been slightly shaded over because it appears that, even as Mr. Williams spoke, his museum was already negotiating, without consultation, to buy the Crucifixion loosely attributed to Duccio or perhaps to Ugolino or another early Sienese painter. His consultations, if any, did not reach Scotland—whose National Gallery was a natural resting place for that Crawford-owned picture—or Manchester, where the director, Mr. Timothy Clifford, has shown vital enterprise and enthusiasm in recent years in building up that collection. Mr. Clifford, after an enforced late start, is now trying to raise funds to buy the Duccio, and the Getty is showing no signs, to quote Mr. Walsh's scrupulous phrase, of "trying to get out gracefully". So much for the value of words as distinct from actions.
I would add that it is not persuasive for the Getty to say that it did not consult Mr. Clifford because it did not know of his interest last November. He showed no interest then for the very good reason that, like other British directors—and I think I shall find agreement with the noble Lord opposite—he was unaware that the Duccio was on the market.
I do not wish to. and shall not. swell the chorus calling on the Minister for the Arts to find exceptional

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monies to help purchase that picture. The message is reaching him continually. I do wish to urge on him the importance of establishing with the Getty, beyond all doubt, whether or not a promise to "consult" is now in existence. If so, we need to know beyond all ambiguity what are its terms and whether they extend to all purchases in Britain or simply those at auction. We shall certainly obtain some clues if the Getty proves to outbid the British Museum on the most desirable drawings from Chatsworth House in July.
It is the voracity of the museum's craving and the potential quantity removal and concentration onto one continent which excite the alarm of a nation such as ours. Moreover, despite a kind of holier-than-the-Pope posture in public towards our own national heritage, the Getty has no less alarmingly and subtly devalued the original promise to consult with our museums and galleries made last November.
First, Mr. Williams announced in January that the promise to consult referred only to auction purchases made by the Getty. Secondly, Mr. Walsh announced last month that the Getty will attempt to find out when a national collection—and I repeat "national collection"—is concerned to keep a work of art in Britain but not, one deduces, when a university or provincial museum seeks to do so—and they are probably likely to be most anxious of all to succeed in doing so.
Thirdly, in a document which the Getty Trust kindly sent me this morning, I see that the promised consultation is now described only as informal. The Getty Trust now adds that it is inevitable, no less, that the museum will end up competing for British works of art despite—and here I quote,
"our best efforts to take our colleagues' interest into account".
To my own innocent mind, that has the implication that so far from being a genuine promise to consult, it is a simulation of slithering through the long grass in the quest for its required prey. We do not yet know whether Getty will exceed the appetite in an earlier epoch of William Randolph Hearst, who stalked through the churches and palaces of Europe and who would have accepted with gusto the advice of W. C. Fields:
"Never give a sucker an even break".
That may seem harsh, but in the long run I fear an inevitable seduction by Getty's overwhelming funds of our own remaining major works of art. No self-denying ordinance or "consultation" will hold the swell. Action will have to be taken to protect our art market, though perhaps not for many years yet if the Getty behaves responsibly. What form that protection should take is open to dispute. Enhancing the reviewing committee's powers by increasing delays on export licences to over one year is a good solution, it seems to me. The committee wisely imposed only last week a longer than usual delay of six months on the Hogarth destined, I believe, for the Yale Center for British Art. That is the road along which we are probably destined to travel.
I shall, however, end on a heartening note. It is to express my delight at the element of consensus, though it is not complete, that binds us on both sides of the House and in the other place on the problems facing
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our heritage and on the proper solutions. That has been the case, rather miraculously, for the 40 years since Mr. Hugh Dalton's magnificent initiative in endowing the National Land Fund with £40 million in 1945, later raised to £50 million.
It is striking, and true, that we agree so deeply, all of us, on the importance of heritage matters. Not all of us agree on the way to set about it, but I believe that we all know that no generation will forgive us if we allow the mass of our greatest remaining treasures to leave our shores.
10.23 p.m.
The Earl of Perth: My Lords, when I saw the Unstarred Question of the noble Lord, Lord Fanshawe, I thought that it was a little hard on the Getty Museum.
Lord Strabolgi: Hear, hear!
The Earl of Perth: Various noble Lords who have spoken so far—the noble Lord, Lord Vaizey, the noble Lord, Lord Annan, and I have forgotten who else—to a degree defended it. The noble Lord, Lord Saint Oswald has attacked it very strongly. I think he is wrong 1 shall come back to that. I accept that there is a threat, but I think that the noble Lord was wrong to have said some of the things that he did. Perhaps there is a moral to that; namely, not to circulate what I would call propaganda—because that is what happened—to your Lordships just before a debate. So often it has precisely the wrong effect. I shall come back to certain activities of the Getty and how I think that we can do better by helping rather than trying to fight.
Getty, as other noble Lords have said, is the tip of the iceberg. The fact is that there are many museums in America—the noble Lord, Lord Fanshawe, mentioned Kimbell, and others are the Metropolitan and the National Gallery of Washington—and, above all, an enormous number of rich individuals who can, if they wish, easily find five million or 10 million dollars and not notice it. There we are.
However, let us recall that in the eighteenth and nineteenth centuries we were in exactly the same position in relation to Europe. What we have and what we talk about today as our heritage is undoubtedly arising in large degree from what we did to Europe in the eighteenth and nineteenth centuries. It would be a mistake if at this time our attitude was too much that of a dog in the manger in relation to certain works of art going to America If they pay, all right; we still have great things in our galleries and museums and will continue to have them because, as I hope to demonstrate, we have got considerable defences at the present time. We cannot be over-greedy about this.
Let me come back for a moment to the Getty Museum. It is quite true that they have this enormous sum to spend, but they have said they want to do a considerable amount of building. They want to build a new museum and a centre for education and for the arts and humanities. These are going to cost many hundreds of millions of dollars and will automatically make less the amount of money they have to spend on acquisition. A lot of this work they are doing is not just for themselves; it is for the benefit of the art world

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universally. Ask the Courtauld Institute how much help they have had from Getty. I hope that shortly the British Architectural Library, with which I am connected, will find that its great collection of drawings, its archives, its records of building, will be helped similarly by Getty, because this is an international need.
Above that, undoubtedly Getty are going to have problems on how to spend. Our job should be to try to encourage them in certain directions. For example, I have in mind that they should promote, sponsor international exhibitions either of things that they have acquired or things they will collect and sell elsewhere in the world. When I say that I have particularly in mind American works of art. By that I mean the paintings by Americans at the end of the last century, and also since the war. We do not know enough about them. Why? Because on the whole these American works of art are kept in their own country. If that happens the proper recognition of artists is not seen or known.
The noble Lord, Lord Cottesloe, referred to Hirshhorn. I was closely associated with that attempt to get the Hirshhorn Museum over here. It was a Labour Government who were in power in those days and I should like to pay tribute to all that they did to try to achieve the end, which was merely a small addition to history.
In those days I was Crown Estate Commissioner and we were in a position, with the approval of the Government, to offer a site in Regents Park. Mr. Hirshhorn said, "What sort of a museum will you put up?" We said, "What are your requirements?" Within five days Mr. Dennis Lennon produced a model which so attracted Mr. Hirshhorn that it very nearly turned the trick. It did not quite do so because Mrs. Lyndon Johnson, wife of the American President, put her arm round Mr. Hirshhorn and said: "Look, we want it". Who could resist her blandishments? But that is another story.
I hope I have done enough to show that what we should try to do is collaborate with the Getty Museum and help them spend their money to the advantage of the world, if I can so put it. I am sure that that is the right direction, though I recognise that there is a problem in regard to the funds that they have for acquisition.
What are our defences in that event? They are pretty formidable. As many of your Lordships have said, to begin with we have the Reviewing Committee on the Export of Works of Art. If in its judgment something is worth saving, then, judging by the Waverley criteria it is in a position so to say. I would plead with the noble Earl, Lord Gowrie, not to change the Waverley criteria. My experience—and I am sure that it is the experience of the noble Lord, Lord Cottesloe—is that they have stood the test of time and are very good.
It was the noble Lord, Lord Annan, who suggested that the length of time should be extended. I am totally opposed to that. Have noble Lords thought of what it means if we suggest that matters are put off for seven years? Let us assume for the moment that there is the fantastic figure of £10 million and for seven years the owner is without that money. At the present rate of
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interest that would cost him over £1 million a year. Is that fair?
I am quite clear in my own mind that we must treat fairly our own individuals who happen to own these great treasures, and we have to go by the market value. All the same, it is valuable that the reviewing committee can give us a period of time. There is at least one example when they gave us a year. That was the case of the famous Leonardo cartoon, which was saved for the nation as a result of the special efforts of the then Lord Crawford. However, I think that those should be very exceptional circumstances, because it involves great hardship.
What is our second line of defence? It is the monies that we have available from one source or another. First come the Government grants to the various national museums and other museums. As the noble Lord, Lord Annan, said, they run into many millions of pounds in relation to the National Gallery. Secondly, we have the heritage fund. The noble Lord, Lord Charteris. who is its splendid chairman, told us of its activities, and it has done great work. There is always a longstop in that if Parliament thinks that something is really important, it can make a special extra grant at a special time. Perhaps one of these days we may face the problem of the Bridgewater pictures of the National Gallery of Scotland. That might be the time to ask Parliament to consider offering some special help, though happily an arrangement has been reached that that will not arise during the lifetime of the present Duke. Long may he live—for two reasons: first, because the problem will not arise and, secondly, because he deserves to live a long time.
Then we have the private sources: the National Art Collection Fund, about which the noble Marquess, Lord Normanby, has spoken, the Pilgrim Trust, the friends of the museums, and in certain cases special appeals when you get individuals and institutions all anteing up to save some particular work of art.
Having said all that, we have a further defence; namely, the in lieu or private treaty arrangements. But I am a little unhappy on how they work. I believe that if the Treasury cannot make the douceur up to 50 per cent., it should at least be a little more flexible. It is quite true that it has to agree what a value might be, but in the art markets at present it may well be that the owner can see the sky is the limit in auction rooms, because today one does not know what prices works may fetch. Therefore I would say to the Treasury, "Be a little more flexible". It is within their power to do that. A good example is the Devonshire drawings. If the Treasury had been a little more flexible there the Devonshire drawings would not be coming up for auction, and they would have been in a position to spread them all over the country. Not just to the British Museum, where some could have gone, but all over the country for the benefit of all the country.
The Earl of Gowrie: My Lords, while the point is fresh in the mind of the House, I would remind the House that it was the National Heritage Memorial Fund and the Trustees of the British Museum who did not want to purchase the Devonshire drawings at that price. It was not a question of the Treasury being mean.
The Earl of Perth: My Lords. I take the point. I would say equally that the National Heritage Memorial Fund and others should be a little more flexible, given that we know that at this time it is a rising market.
The only other point I would raise about having in lieu or private treaty is that often these works of art which are saved should remain where they are. particularly if the house is open to the public. I know it has happened once or twice; it should happen more often. Lastly I am going to make a controversial suggestion; namely, that other museums should follow the example of the Maritime Museum in making entrance charges. I say that but there are three things which go with it. First, the Treasury must undertake that the proceeds from those entrance charges must be available to the museums, and they should not dock the grants.
Secondly, all museums must have at least one day in the week free so that those who cannot afford it, or do not want to afford it. have an opportunity to go in free. Thirdly, each museum, or its trustees, must choose for themselves. This is not something that the Government should bring in. It is something which each museum should be able to decide, knowing that as a result they will have more money to spend, and whether it is for running their museum or whether it is for acquisitions is for them to decide. This question of museum charges has been for too long bedevilled by sentiment rather than practicalities.
My noble friend Lord Eccles made a good point, and we all know what we owe to him on the encouragement of the arts. Let us not forget that what is today's current work of art is tomorrow's heritage. I disagree with him however when he says that we should try to save only works of this country. I think we have enough Gainsboroughs, Constables, Stubbs', and so forth, but we may not have enough of some of the great European works of art. Therefore, I do not think that that is a good criterion. Let us leave it as it is today, which is that the reviewing committee decides these matters.
I have talked too long. We cannot keep everything here, and nor should we try to do so. I believe that our control system is as good as can be obtained. There are possibilities which I have tried to outline for further defence, and 1 feel that VAT as it operates today is a nonsense.
10.39 p.m.
Baroness Airey of Abingdon: My Lords, there is a certain advantage in speaking towards the end of such an important and erudite debate, because so many things have been said which one would have liked to have said oneself. Therefore, I shall be extremely short. I should like first to thank the noble Lord, Lord Fanshawe, for giving us the opportunity of this debate, and to add my congratulations on the excellent maiden speeches that we have heard this evening.
I should like to take up one point from my noble friend Lord McAlpine of West Green. He spoke about modern works of art. May I just speak briefly about a small and modest experience of my own. For a number of years I have longed to have a portrait painted of my daughter and at last I found an artist,
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who I much admired and who I thought was the right person to paint her. He has done something which gave me such pleasure. It is a modest watercolour, but it gives me very special pleasure. I wrote to him telling him about this and I received something that moved me very much indeed because he wrote back saying what an exceptional thing it was to be commissioned privately by somebody who really appreciated so much what he had done. This is where I join forces with my noble friend. It is very important that we should, where possible, remember that the heritage is for tomorrow as well as for yesterday.
I should like to speak briefly about what your Lordships know I feel deeply about and that is the small manor houses. There was an exhibition at Sotheby's called "Treasured Possessions." It was over Christmas in December and January for one week this year and I went. I was bowled over because by each piece of furniture or picture stood the proud owners. The pictures resembled the owners who stood beside them. One might compare it to Cruft's, but I should not like to do so. Beside the piece of furniture, looking glass or picture was the owner and everything was in absolutely mint condition. I was amazed at the wonderful quality.
When I looked at the list of houses, although there were one or two great and well-known houses, there was a large number of, to me, unknown small manor houses. Much has been said this evening about helping those who may have great and wonderful possessions, but in quite small houses. I was pleased to hear the proposals that have been put forward and I hope that the noble Lord the Minister will do his best to help those who are not only guarding their treasures but looking after them so marvellously.
Thirdly, and again briefly, I return to the question that we have to the fore this evening about the Getty Foundation. I carefully read that document which most of us have received which described exactly the aims of the Getty Trust. I noticed that throughout this document it is sought to show that it is not only works of art that the trust is out to buy—which may be a great relief to all of us—but a constant emphasis on what they were to build: the constant emphasis on building housing for guest scholars. This particularly interested me because guest scholars immediatley turned my mind to thoughts of Leeds Castle.
I am sure that many of your Lordships know all about Leeds Castle, but I shall briefly recapitulate. Leeds Castle was bequeathed to the Leeds Foundation by Lady Bailey largely with American money. One of the aims of the foundation is to promote and encourage medical research and education and to disseminate the results of such research and education. It is a charitable organisation and under the laws of England free of taxes in this country. What could be more attractive as an outpost to the Getty Museum, with possibly a revolving exhibition of European and perhaps American art acquired by the Getty Trust and for the study of guest scholars to which it attaches such great importance working in situ in a situation which would be very congenial, I believe, if it were anything approaching the beauty of Leeds?
When we look in Country Life we see. alas! that there are a large number of country houses which are

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on the market. This made me feel that the story had perhaps turned full circle when we think of the Pilgrim Fathers setting out over 300 years ago for the New World. This is a story which was made doubly poignant for me after an evening when I was at the American Embassy. The then American Ambassador explained to me that the "Mayflower", in which they sailed, was only the length of the drawing room, which is not enormous, in the house which was built by Barbara Hutton and is now the American Embassy. Would this not carry out the further aim of the Getty Trust: to promote, as they wish and as they say in their document on their aims, the understanding of the nature of man and the development of civilisation?
10.46 p.m.
Lord Dormer: My Lords, I believe that all sections of the House and many people beyond will be grateful to the noble Lord, Lord Fanshawe, for initiating this debate. It is a matter which goes to the very heart of the cultural life of the nation. I should like to mention, too. how much I enjoyed—as, I believe, did everyone in the House—the two excellent maiden speeches that we have heard tonight. Both were extremely well informed and of great interest and both showed much promise for the future. The heritage of England is a national matter which ought to be preserved in its natural setting. It is not only the great country houses and the great collections or the national museums which contain them: very often, a lesser country house or a beautiful manor house of the 16th or 17th century will contain objects and items of great historical importance.
By some miracle, these houses have been preserved through the centuries by the families to whom they belong and who have accumulated superb collections of possessions which, taken together, mirror the history, customs, costumes, sport and life not only of the district but also of the nation. Some may be open to the public; others may not. They may lie undisturbed until capital transfer tax strikes and the contents are offered to the nation in lieu of tax or, sadly, the entire house and its contents are dispersed. Then the Government have to act.
There is no short cut to preserving historic objects of great national importance which are offered for sale. To keep them in this country, the Government must refuse an export licence and must provide the necessary funds for their retention here. It is common knowledge that the various organisations which can help to buy objects, not only of great artistic merit but also of national importance, are, if not short of funds, in need of funds. This very valuable debate has shown the way towards a possible solution to this great national problem. I earnestly hope that the Minister may have sympathetic ideas which may possibly pave the way towards constructive action in the future. The nation deserves it, and it will be the nation in future which will be grateful.
10.50 p.m.
Lord Strabolgi: My Lords, in company with other noble Lords, I should like to say how grateful I am to the noble Lord, Lord Fanshawe of Richmond, for
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tabling this Question. It has given rise, as has been said, to a most interesting debate, and indeed also to a particularly well informed debate, which is not surprising, if I may say so, considering the wealth of experience that there is in your Lordships' House. The debate has further been notable, as has been said, for the two excellent maiden speeches. I should like to add my congratulations, if I may, to the noble Earl, Lord Munster, and to the noble Lord, Lord McAlpine, for their contributions, and I hope that we shall hear from them on many other occasions.
I was particularly interested in the speech of the noble Lord, Lord McAlpine, and what he said about the artists of today. I think that this was very pertinent, and he reminded us that theirs is the heritage of tomorrow. Also, the noble Lord, Lord Dormer, who has just preceded me, reminded us too that our country houses are an important part of our heritage. I think it was Sir Sacheverell Sitwell who wrote somewhere that they were probably one of the greatest contributions that Britain has made to the arts. We welcome the fact that the noble Earl, Lord Gowrie, is to reply, especially as he has been taking part in the previous debate and has been here really since the beginning of the proceedings. I am sure that the House is looking forward to hearing the Government's views.
As has been said throughout this debate, a great many works of art have left this country during this century for other countries, notably the United States. This is not surprising and of course it is the result mainly of our tax system, as was made clear by the noble Lord, Lord Fanshawe, at the outset.
I must say that, except for objects that are closely bound up with our cultural history and tradition, which I would fight to the last ditch to preserve, I tend, like the noble Lord, Lord Vaizey, to be a free trader. Surely, my Lords, the life-enhancing qualities of a great work of art transcend its ownership, and indeed belong to the whole world. The Americans and the heirs of our European culture and tradition enriched with much culture of their own, and the works of art they acquire are surely just as well displayed and appreciated in the United States as they are over here.
The Question mentions the Getty Museum in particular; but, as has been said, there are other institutions in the States which have been endowed by generous private donation and which have built up magnificent collections in recent years, notably the Norton-Simon Foundation, which I had the good fortune to see last summer. Indeed, I have hardly ever been in a gallery in my life such as that one in which I would have liked to own without exception every single painting. Then there is the Mellon Foundation of British Art that has been built up and from which Mr. Mellon has been most generous in lending to exhibitions here.
It is therefore rather unfair to suggest, as one hears it so often suggested these days—not in this debate but I have read it often in the press—that a work of art leaving these shores is somehow drained away and lost to view. I regret with the noble Lord, Lord Annan, the loss of the Dirck Bouts from the National Gallery; but it is now one of the glories of the Norton-Simon, and surely, my Lords, they have as much right to a Flemish painting as we have.

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We in this country have also been great collectors in our time. The last two centuries saw great collections formed of European and Asian art, and there have been notable collectors as well during this century—I am thinking particularly of Samuel Courtauld and his magnificent collection of French impressionists. We tend to take the Courtauld Collection and other collections for granted as part of our heritage. Yet to many French people, as a French friend of mine reminded me the other day, these paintings are part of their heritage. They regret their loss; and their loss, of course, is our gain. In this case we happen to be one of the importing countries. I do not know if the noble Lord, Lord Fanshawe, was thinking only of the United States when he drafted his Question, but the generous Felton bequest has enabled Australia to acquire some first-class paintings of all periods, with the benefit of advice—and very good advice it was, too—from the late Lord Clark. That is surely to be welcomed.
I suggest, therefore, that we need to put the matter in perspective. This is particularly important, I submit, in the case of the Paul Getty Trust, concerning which there has been some ill-informed criticism, much of it coming from people—and I do not refer to speakers in this debate—who have never visited Malibu and have not the slightest idea what the museum is like or what they are trying to do. I welcome very much the remarks of the noble Lord, Lord Beaumont of Whitley.
I am glad that in one or two of the speeches in this debate something has been said to clear up some of these misconceptions about the Getty Trust and the museum. I must say. in spite of the robust attack by the noble Lord, Lord Saint Oswald (which he was perfectly entitled to make if he wished), that, after all, they are only doing what many of the great families in this country have done in previous centuries: importing works of art from other countries. But it is right to say that they are not obliged to spend their entire income on purchasing works of art: and the other operations that they are using this great fortune for have been well described in this debate.
It has also been suggested that they should start an out-station in this country. One of the difficulties of this, of course, is that they have not got enough works of art to fill it. Getty itself is not a very big collection. It is not as big as the Norton-Simon; nor indeed is it as good at present—they are trying to improve it—as Mr. Walsh would be the first to agree. But they have in the past, before he took over, been buying too fast, and not works of the greatest quality. They hope to impove this later on.
Getty do not employ agents to ask British owners of important works of art to sell. I know there have been cases where dealers have gone to an owner in this country and said: "Would you like to sell this? I think we can get Getty to be interested". And then they have gone to Getty and said: "So-and-so wishes to sell". Mr. Walsh told me himself that if they do this they never have anything further to do with the dealer: he is put on to their black list.
There have been several instances, too. when Getty have withheld bidding for a work of art where they believed it was better for this to be retained in the country of origin. The most important recent example
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was the Gospel Book of Henry the Lion, which was bought recently by the West German Government at auction in London for, as we know, over £8 million I believe that was the highest price ever paid at auction for a work of art Getty did not bid, although they were widely expected to do so, and indeed are on record as wanting to possess this outstanding 12th century manuscript—as who would not? But they did not bid, my Lords they kept out of it because they thought it was right that The Gospel Book should go back to West Germany, after an absence of fifty years, where it is regarded as a national treasure. I was told that; I also know it for a fact because I know who the under-bidder was because he told me so himself There are also four specific cases, which must remain confidential, in which Getty has recently stood down in favour of British galleries.
In spite of what has been said, too. Getty do not want to pay inflated prices and it is surely not in their long-term interest to do so, as the noble Lord, Lord Charteris of Amisfield, said. They bid at auction in the usual way. We tend to forget that at every auction there is usually an under-bidder, so there is someone else who wants to bid for the work of art as well.
However, if we want to keep some of these outstanding works of art here, then certainly I agree with all the speakers in this debate that a more favourable tax regime will be needed I hope that the Government will take on board some of the suggestions that have been made so that we can have some further tax concessions. But I agreed with the noble Viscount, Lord Eccles, when he said that we must not let this get out of hand. I also agreed with so much of what he said about striking a balance between the art of the past and the artists and craftsmen of today Let us. too, remember all the other claims on the public purse—the schools, the hospitals and everything else. So we must not let this get out of perspective.
The Conservative manifesto promised to examine ways of helping the arts and encouraging donations by giving more generous tax concessions. If this was a serious commitment, perhaps the noble Earl will tell us whether he is making any progress with his colleagues in the Treasury, because this is a system that has been working well in the United States and also, too, in Italy, which has recently adopted it This idea has been canvassed now, I believe, for at least 20 years, but nothing ever seems to be done by any government I believe that the noble Earl himself is rather interested in it I hope that he will really be able to take it a step further, because this could be one of the monuments to a distinguished tenure of the arts portfolio.
There is the proposal to increase the in-lieu percentage, known as the douceur, from 25 per cent. to a more attractive figure As has been said, this was recommended by the Select Committee of another place and that, I think, would do something to help Also, I must say that I do not think the acceptance-in-lieu provisions seem to be working very well The total value of works of art accepted in lieu of CTT for the period 1984–85 amounted to around £815, 000, which is surely a fairly modest sum when we remember that it covered as many as 30 paintings. They were all fairly

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small things—although of interest historically, I am sure—and no big outstanding works of art such as the noble Lord, Lord Annan, mentioned in his list. I think it used to be called the paramount list, though he called it something else.
A further concession, which I fully agree should be given, is the removal of all VAT from private treaty sales. It is quite outrageous that a national gallery or museum has to pay VAT on the auction or dealer's commission, which can often be considerable, when municipal galleries are exempt and when foreign buyers are also exempt, so there is every inducement for dealers to offer works of art overseas. This would be a small concession, but it is one which I hope the noble Earl will get his colleagues in the Treasury to accept. I agreed very much with what the noble Lord, Lord Cottesloe, said.
I realise that, in fairness to owners of important works of art, the true price has to be determined and this can surely only be the world market price. In spite of much help from the National Heritage Memorial Fund, the NACF and others, it is often difficult to match this price during the period when the export licence is withheld, which, in fairness to the buyer, can only be for a few months.
I do not agree with the noble Lord, Lord Charteris of Amisfield, and other noble Lords that this period should be very considerably extended. If you buy something from abroad, you are very keen to have it, so it is not fair to expect you to tie up a considerable sum of money for a very long period. Either you lose the interest or you are paying interest on a loan. I should have thought that the few months we allow are quite long enough, unless we want to go down the road of requisitioning all works of art and saying that they belong to the state and no private owners have any rights to them. If we want to go down that road, all well and good, but we in this country have always displayed a sense of fairness towards the owners of works of art. The Waverley criteria are probably about right and the period of the delay should be no longer than it already is. I know that the noble Earl put a rather longer period recently on the Hogarth; but I do not think it should be longer than that.
The only hope, therefore, at present is for a more flexible and helpful tax régime. It is important, for all the reasons which have been described today, for us to have a free trade in works of art. We have to establish a world price, in fairness to the owners. Yet we have to enable our own museums and galleries to compete fairly. The only way to do this is to bring in some form of tax concessions. These have been very successfully organised abroad and they have enabled foreign buyers to buy works of art. Therefore I believe that only a regime of this kind will enable us and help us to retain more of our works of art in this country.
11.7 p.m.
The Earl of Gowrie: My Lords, on this as on many other issues, I am delighted to welcome the noble Lord, Lord Strabolgi, to the ranks of the free traders. I hope that he will spread the gospel of this admirable economic doctrine among his friends on other issues as well. I can say to the noble Lord, because one figure which he gave me was a little gloomy, that the
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Godman Collection of Islamic Pottery was accepted in lieu by the British Museum in 1983 at a net value of £1·2 million and a gross value of about £4 million. Added to the other items he mentioned, that is quite a satisfactory picture. May I also say to the noble Lord and to the House generally, before we get too anxious, that the British Government remain very substantially richer than the Getty Foundation. That is a consolation, I imagine.
This is, I believe, the House of Lords at its best, most interesting and informed. I congratulate my noble friend Lord Fanshawe of Richmond on three things: first, on his speech and the way in which he introduced the Motion; secondly, on slipping in, under the guise of an Unstarred Question, what may be of one of the major and most important debates of our year—nice wristwork from the noble Lord there, during a crowded Session; thirdly, on attracting two wonderful "maidens" in the form of the noble Earl. Lord Munster, and my noble friend Lord McAlpine of West Green. Looking round your Lordships' House one can say that we need a professional conservator in the form of the noble Earl. I hope that he will soon give us some of his expertise—preferably, as he did tonight, for nothing. It seems an awfully long time since the scaffolding above the noble Earl's head was first erected. He will be well aware that there is much fine Victorian stained glass to claim his attention but, in the intervals between attending to our conservation issues I hope that the noble Earl will address us on many other issues.
My noble friend Lord McAlpine of West Green belongs to a small group of human beings who, where I am concerned, can do very little wrong. He is always a respository of immense sense and wisdom. I happen to know—and I will not embarass my noble friend by passing on this information—what an enormous amount he has done for the arts in this country. Long may he thrive to continue to do so, and long may he continue to regale your Lordships' House with common sense and wit of the kind that he gave us tonight.
My job is to set out as quickly as I can, given the lateness of the hour, the Government's general position. It is of course our policy to preserve and protect the British heritage both in public and private hands. To this end, a system has been devised over the years, which, although it is not perfect, and although one has to keep a close and watchful eye on it, does give a substantial measure of incentive to private owners to participate in this policy and also provides opportunities for our great public collections.
It does, therefore, remain a major plank of government policy to encourage private ownership, in the belief that this is both the most satisfying and the most economical way of preserving and indeed extending our national assets. The availability of conditional exemptions from captital transfer tax has greatly encouraged private owners to retain the ownership of outstanding works of art. I believe that the total exemption from tax which can be claimed for objects of museum quality remains an enormously important concession; one that I should like to see even more fully used. I am, therefore, currently considering whether further publicity to this end will

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be helpful. I hope that may be of some encouragement to my noble friend Lord Saint Oswald.
However, the House has recognised that there are circumstances where works of art come on to the market, and that we should not seek to prevent this. It is no place of government—and of this Government particularly—to interfere unnecessarily with the operation of market forces. I am grateful to my noble friend Lord Fanshawe that, in voicing his anxieties, he fully recognised that. What we can do—and do do—is offer incentives which make the possibility of sale to a public collection, for public benefit, considerably more attractive. These have been in operation for some years and my wish is to make them more fully understood.
Essentially, they are the arrangements for private treaty sales to public institutions and for the Government themselves to accept certain items in kind in lieu of tax, if they are of the requisite quality. In the four years that my office and the Department of the Environment have together administered the acceptance of in-lieu arrangements, more than £6.5 million has been spent on the acquisition of important heritage property for the nation. Over the same period a great many private treaty sales have taken place. My office issued a pamphlet on these arrangements less than two years ago, and we recently issued further guidance on the circumstances in which certain acceptance-in-lieu objects may be offered in situ—that is to say, in the original setting. Awareness of what I would call the "heritage system" has therefore been building up steadily, and this in turn has played an important part in securing many valuable assets for public enjoyment.
In addition, the National Heritage Memorial Fund stands as a vital long stop—or, perhaps, deep extra cover—able to give financial assistance over a very wide range of marvellous items. This House will know that the Government have pledged themselves to support the fund and only recently made a substantial addition to it, whereby the fund will have some £8 million of new money in 1984–85 for its heritage work.
This has been done in the knowledge that certain great houses needed help. It has enabled the fund, in addition to securing Belton, to safeguard the future of Calke Abbey. Whatever the arguments about the merits of particular additions—and there always will be arguments—a lot of people felt very strongly about Calke Abbey, and I certainly believe in the independence of the National Heritage Memorial Fund in making these decisions.
I am grateful for what was said by my noble friend Lady Airey about the work of the fund. She drew our attention to the more modest parts of our heritage that it helps—and they are no less important. I am grateful also to my noble friend Lord Charteris, who, although we do not give him enough money (and as he said, one cannot get too much of a good thing), was nevertheless kind enough to say that he had a square deal from the Government.
The idea of gifts to the arts, whether donations of works of art or financial support for the performing arts, being allowable against taxable income, on the lines of arrangements in the United States, clearly has attractions from the donor's viewpoint. But I remind
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the House and all of my clients—and there are many in the performing arts, too; not just on the heritage side—who urge the American system on us of one thing: most people here, when they recommend it, usually mean that it should be in addition to, rather than instead of, our present system of public funding. We must remember that very little of what we would call public money in that sense goes into this field in America. I therefore ask the House to consider the full implications of such suggestions.
It is scarcely conceivable—and the noble Lord, Lord Strabolgi, recognised this—that the Government could easily give such a concession for the arts alone when there abound so many other worthy causes, from children's hospitals to help with the elderly. I am very mindful in my work of what I call—with no disrespect, but a lot of admiration—the Jimmy Savile factor. A concession in one field would be bound to lead to enormously strong claims for equal treatment in others. There would be no equable way of holding the line. The potential cost to the Exchequer could then be enormous.
Secondly, in any event, how could we in practice ring-fence the arts? How could we define them without creating anomalies and endless accusations of unfairness? Donations of heritage quality works of art to public collections are, as I have said, already totally exempted from capital taxation. This in itself is a considerable incentive and a great benefit to museums. But to go substantially further and offset donations against income tax would constitute a major change in the system. I think that it would, too, exacerbate the tension between the heritage and the living arts; as my noble friend Lord Eccles so wisely urged us not to do.
I draw the attention of the House to the fact that through the covenanting system donations can be exempt from both income and corporation tax. The Government have already altered the tax rules in favour of donors by reducing the minimum period for covenants from seven years to four. That should help to encourage individuals and businesses to take advantage of the tax relief that can be claimed. The totality of the package is an attractive one.
It is also an exaggeration to say that the system of acceptances in lieu of capital transfer tax is inadequately used. As I said, since the summer of 1979 the Government have accepted important in-lieu offers from 31 estates in satisfaction of tax liabilities of £6·5 million. The suggestion that acceptances in kind of this type should not be accounted for by Vote payments to the Inland Revenue from the heritage departments, including my own, is a long-standing objection. But I must say that, as the Government have previously pointed out, property in lieu of tax does count as public spending. There can be no open-ended commitment, therefore, by the Government to accept objects in lieu of money.
I agree with the noble Lord who said that my right honourable friend the Chancellor was far-sighted and imaginative. But my right honourable friend cannot buck arithmetic or gravity. The present arrangements have certain advantages which must not be overlooked. They are easily understood and they bring the amount accepted in this way properly before Parliament. We could not, therefore, accept a change

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which would allow objects to be accepted irrespective of the tax forgone. In fact, the present acceptance-in-lieu ceiling is being doubled in 1984–85 to £4 million spread between my Ministry and the Department of the Environment—an indication of the importance we attach to this field. But to go further and make such acceptances non-accountable in Vote terms would be inconsistent with the principles of Government financing.
On the subject of VAT, which was raised by a number of noble Lords—notably the noble Marquess, Lord Normanby—it is, of course, intended to be a broad-based and generally applicable tax. From the point of view of the bodies funded by central Government, I agree that superficially it looks rather lunatic. But their grants—the grants of my client organisations, for instance—take into account the incidence of such taxes, and when VAT was first introduced the grants were increased to take account of it. I do not believe, therefore, that there is a substan-tial basis at present for changing the arrangements.
The situation with local authority museums is not analogous. Section 20 of the VAT Act 1983 allows local authorities to be refunded the tax they incur on their non-business activities. It is not borne by their ratepayers, and the concession, therefore, constitutes a rather different form of central Government support.
My noble friend Lord Fanshawe suggested that the douceur be increased. The Government have concluded that a change is undesirable here. It would only result in fewer objects being acquired at a higher price, and I think that no one put this point more trenchantly than the noble Lord, Lord Annan.
I now quickly turn to some of the anxieties that have been expressed in spite of the operation of this system. Generally I welcome the fact that the House has endorsed the value of the system. The reviewing committee has done a remarkable job in carrying out the precepts laid down by the Waverley Committee over 30 years ago. I should like to reassure the noble Earl, Lord Perth, that we are thoroughly committed to the Waverley principles. I should like to pay tribute to the work of the committee and in particular to the devoted work of its chairman, the noble Earl, Lord Plymouth, and the members and advisers who attend its meetings.
Some people have said that, in spite of the system, works of art "get away", but the system is not designed as a catch-all. It is aimed at preserving where possible the very best in a very wide range of categories, including, may I say to my noble friend Lady Airey, categories of smaller monetary value but perhaps no less heritage importance. We cannot keep everything that we deem of national importance, since our resources are finite and we have to face the purchasing power of many wealthy individuals and great overseas collections—not just Getty.
I must say that, as a visitor to California on many occasions, I absolutely endorse what the noble Lord, Lord Strabolgi, said. There simply is at present no
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comparison in quality between the Norton Simon collection and the Getty collection. The Getty collection as it is currently constituted in painting terms would barely rate a mention in a provincial town.
We do of course value our system of export control, which is based on a principle of no export stop unless there is an offer from a public collection to purchase. But. even so, existing powers enable me to prevent export, if required, and from time to time we have examined the other options, particularly a list of predetermined heritage items. This, I think, was suggested by the noble Lord, Lord Annan. The fact is that no one seems to me to have come up yet with a better system than the one we have. It is, I may say, envied all over the world. Certainly, I think, the French have not done so. They exercise draconian control at the expense of market freedom, though I am glad to say that from time to time they are forced against the grain of their system to exercise a little flexibility. I think we are being pragmatic and realistic—national heritage qualities of this country, if you like!
Let us recognise, too, as my noble friend Lord Vaizey, the noble Lord, Lord Strabolgi, and others did, that this country is a two-way market place for works of art and we wish it to remain so. Indeed, the official figures invariably show that more paintings in quantity and value are imported than exported, yet out of 4,500 applications for export licences in 1982–83, only a very few—that is to say, 16—were considered of such importance that a case was made for withholding a licence (excluding items which had been in the country for less than 50 years). In the end an export licence was suspended in 14 of these cases; in nine the object in question was bought back by a public institution, and in five the licence was in the end granted. It is sometimes suggested that we should go down the line, lower our criteria and oppose the export of second-tier items as well, but the damage to the art market—and again it is a two-way market—would seem to me to be hard to sustain and too high a price to pay. I therefore prefer to stick to the tried and tested Waverley criteria—and how well they have stood the test of time!
Nevertheless, it is said that the really big fish will get away. So far there is little evidence of this. It is true that two major pictures have gone to Getty—a Poussin "Holy Family" in 1981 and the Dosso Dossi in 1982. Against the Poussin, may I commend to the House the really marvellous news of the successful negotiation between the Duke of Sutherland's trustees and the National Galleries of Scotland? Again, the qualtiy of those pictures is absolutely unfathomable. Of course there was also the Dosso Dossi.
Currently there are two further pictures under export stop: the Duccio "Crucifixion"—if it is a Duccio, but in any case it is a wonderful picture—and a Rubens drawing. It remains to be seen what will happen to these last two, but we do not, as I have said, have a closed market. I really do not believe it can be said that the export of a limited number of pictures of

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this kind is seriously damaging to a country so rich in public and private collections.
In that connection, may I say how strongly I agree with what the noble Lord, Lord Beaumont of Whitley, and others said about the state of our museums? It is very easy to generate public outcry about the possible departure of a heritage item from our shores. It is rather hard to get a public outcry about the Victoria and Albert Museum's roof, for example, yet I am left with the bills of these institutions, founded by great and wealthy men in the past.
This said, of course we have to watch very carefully any items which are so important or so close to our own national heritage that export would be inappropriate. We do watch very closely and will continue to do so.
The last things I say will be in respect of the Getty institution itself. Much has been made, of course, of the immense purchasing power of Getty, though we have been very fairly reminded that there are other rich institutions abroad, and not only in America. As I have tried to indicate, there is at present no basis for supposing that this purchasing power is used unfairly or that the export control procedures for the export of works of art are inadequate. Moreover, Getty's interests are at present limited and specific and do not concern the whole world of the fine arts. They are, as many speakers have said, interested in other ways of helping the world's great art heritage—and we should be grateful to them for that—notably by setting up a major art institute which will document the world's inheritance, and a major conservation institute, to which I hope in time we may be able to make substantial input from this country.
I do so agree with the noble Earl, Lord Munster, my noble friend Lord Cottesloe and the noble Earl, Lord Perth, and others, that it really would be desirable for Getty to become a familiar and utile institution in this country. At the moment they are treated rather unfairly, as if they were second cousin to JR. We must remember that an institution of this kind can be an immense power for good in the art world. Obviously we want some of that benefit here, as well. We should not therefore, I think, cry wolf too quickly.
Perhaps I may say to the noble Lord, Lord Saint Oswald, who asked about consultations, that I do have regular informal contacts with Getty, who have shown readiness to seek advice in respect of pictures in which they are interested. There is no formal commitment for them to do so and nor do I think that such a thing would be suitable. Nevertheless, I have to say that so far—and I am a cautious and sceptical man by nature —they have behaved with exemplary responsibility and fairness. They are very sensibly aware that it is not in their interests to break up the market or bid up prices unreasonably.
But, more positively, one should not overlook the great number of major works of art which are still being acquired, particularly by private treaty sales by public institutions in this country. Since 1980 alone,
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we have seen our major public institutions acquiring great paintings by Altdorfer, Bassano, Claude, Poussin, Raphael; drawings by Michelangelo, Durer, Hogarth; a famous Tompion clock; works by Constable, Degas; Max Beckmann and Picasso; a rare ivory group from Hever; a Verzelini goblet and relics of the Spanish Armada, as well as the Islamic pottery collection which I mentioned at the beginning.
I am grateful to the noble Lord, Lord Annan, for drawing attention to the fact that we are still doing very well. I promise to try to cavort with his two delightful nymphs, Delectissima and Desiderata. Against that, it must be said that we cannot, of course, expect to retain every major work of art that comes on to this market. We can expect to be selective in retaining the very best, and this is the Government's policy; or rather, I should say, in view of the very proper arm's length principle, it is the policy of organisations such as the National Heritage Memorial Fund that receive Government money.
The Government's last Budget also pointed the way forward in other respects, notably the reduction in top rate of capital transfer tax and the abolition of the investment income surcharge. I so agree with the noble Lord, Lord McAlpine, that it is important that the wealth-creating capacities of individuals be encouraged here. Historically, these have, in the main, been used responsibly in this field. These and other reliefs should help those maintaining heritage houses to keep the great collections in private hands. Where, nonetheless, items come on to the market, the system that I have outlined, in our view at present, provides necessary and generally adequate safeguards. We cannot expect to keep everything. We want to ensure, so far as possible, that this country remains an open market for works coming in and out.
At the same time, we stand ready to look at whatever means are appropriate to secure those items that are truly essential to our heritage when the need arises. We shall also continue to keep under the closest review all the ways that the Government can preserve and enhance that great artistic heritage. I know that, where this issue is concerned, the eyes of this Parliament and of my noble friends Lord Fanshawe and Lord Saint Oswald, in particular, and of the whole country, are on me at the moment. I am immensely conscious of my responsibilities and will work very hard to discharge them.

The Metals Society Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-eight minutes before midnight.