Lords Sitting of 24 April 1985

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

Animal Welfare Codes
Baroness Elliot of Harwood: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what plans there are to implement the new proposals from the Farm Animal Welfare Council to tighten up the existing animal welfare codes.
The Earl of Swinton: My Lords, the Farm Animal Welfare Council is consulting interests about possible recommendations for new regulations based on the welfare codes. The council has not, however, submitted recommendations to Ministers. When it does, the Government will of course consider them carefully and consult. Any new regulations then proposed would be laid before Parliament for debate.
Baroness Elliot of Harwood: My Lords, I thank my noble friend for that reply. May I ask him whether the other members of the EC are also concerned, and whether they have in Europe the same kind of regulations as we have for our animal welfare?
The Earl of Swinton: My Lords, they are not bound by the same regulations as we have although, obviously, to a greater or lesser extent they have their own. The Government's view is that an important factor which must guide Government thinking is the need to avoid placing producers in this country at a competitive disadvantage in relation to other producers in the EC.
Lord Houghton of Sowerby: My Lords, is the noble Earl aware that welfare codes relating to calves kept in intensive rearing conditions have been seriously undermined by the failure to get a conviction in the recent Storrington case, where a religious order have a large veal calf unit and have admitted persistent disregard of the conditions of the welfare code?
The Earl of Swinton: No, my Lords; I was not aware of that.
Baroness Elliot of Harwood: My Lords, since these regulations require a considerable amount of capital expenditure by the farmers, will Government grant be available under the capital grants scheme?
The Earl of Swinton: My Lords, no. There will be no question of compensation to meet any new legal requirements. However, the Government, by allowing sufficient time to producers to adapt to new standards, would ensure that any further welfare legislation did not impose unreasonable costs on the industry.
Lord Somers: My Lords, does the noble Earl not agree that codes as we have them at the moment are of little use since those who observe them are probably those who would have observed them in any case, and those who do not pay little or no attention to them?
The Earl of Swinton: No, my Lords. I hope that all the farming community will take notice of these codes and will be guided by them. After all, they are issued to them all.
Lord John-Mackie: My Lords, does the noble Earl not agree that stockmanship is the key factor and that any number of codes will not replace good stockmanship?
The Earl of Swinton: My Lords, I would agree very much with that. I think that stockmanship is all-important.
Lord Houghton of Sowerby: My Lords, will the noble Earl take steps to repair his unawareness of the case which I cited?
The Earl of Swinton: My Lords, since the noble Lord has mentioned it, I am now, of course, aware of it.

Military Installations: Ground Defence Areas
2.40 p.m.
Lord Jenkins of Putney: 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 arrangements they are making for persons living in areas such as Greenham Common, Molesworth and Alconbury in time of emergency and how many households would be included in the US. defence zones and whether these would extend, as has been reported, three miles beyond existing perimeter fences.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, civil defence in these areas is a matter for the appropriate local authority within the framework of Home Office guidance. There are no United States defence zones as such, but all vital installations have individual ground defence areas planned for their protection against enemy sabotage in wartime.
Lord Jenkins of Putney: My Lords, is the noble Lord not aware that the Americans have said that they have the intention of commandeering areas three miles beyond their existing perimeters in the event of an emergency occurring? In these circumstances, are not those living in the area entitled to know precisely what the intentions are so that they can make their own plans accordingly?
Lord Glenarthur: My Lords, I think that the noble Lord is thinking of ground defence areas. Each base or

1117
vital installation to be defended has an individual ground defence area plan, according to the tactical needs of the base and its site.
Lord Renton: My Lords, perhaps I may disclose that I live within a mile of the perimeter of Alconbury and within 10 miles of the perimeter of Molesworth, both of which are in my former constituency, and that we have a relaxed and co-operative attitude to the steps envisaged by the authorities with regard to these aerodromes.
Lord Glenarthur: My Lords, I am greatly encouraged by my noble friend's comments.
Lord Hatch of Lusby: My Lords, despite the supplementary question which has just been asked, is the noble Lord aware that I have in my hand a copy of a letter to me from a lady living within three miles of Alconbury who has written to the Ministry of Defence asking what will happen to her home and her family in the event of emergency, and has received no reply? Can the noble Lord not tell us clearly whether it is intended that in the event of an emergency, in the event of war, the United States Air Force will be entitled to extend their installations three miles around the present perimeter?
Lord Glenarthur: My Lords, as I said in my earlier answer to the noble Lord, Lord Jenkins, it depends upon the tactical needs of the base and its site. If the noble Lord cares to give me a copy of the letter, I shall study it.
The Earl of Kimberley: My Lords, does my noble friend not agree that it would be much better if matters like this were kept classified so that, in the event of hostilities, we would know what we were doing and the Soviet Union would not?
Lord Glenarthur: My Lords, I am sure that my noble friend is quite right.
Viscount St. Davids: My Lords, would not the noble Lord agree that the people living close to these bases are already suffering a very considerable emergency by the thousands of unwanted visitors who do not always treat them as well as they might be treated? Can something be done to protect them, and would not a perimeter diameter of three miles be a very splendid limit, if that were so?
Lord Glenarthur: My Lords, that may well be so; but the noble Lord's Question relates to "in time of emergency".
Lord Kennet: My Lords, in spite of the counter-argument suggested by the noble Earl, Lord Kimberley, which the House understands, would the noble Lord not think it a good plan to give the House some idea of what a ground defence area is, and what it would actually mean being in a ground defence area in the event of war or of a crisis looking like war?
Lord Glenarthur: My Lords, in wartime it is clearly neither sensible nor practicable to defend military
1118
bases solely within the perimeter of the base. The ground defence area is simply the area associated with the tactical defence concept for defending a vital installation.
Lord Jenkins of Putney: My Lords, if your Lordships will bear with me, there is one point that I should like to make which arises directly from one of the noble Lord's answers. It is this. It has been said that this whole subject ought to be classified. Unfortunately, it is not classified in the United States of America, with the consequence that the occupying or visiting forces know a great deal more about the situation than the people living in the area, some of whom are not as relaxed in the matter as the noble Lord, Lord Renton—
Noble Lords: Question!
Lord Jenkins of Putney: In these circumstances, would the noble Lord have his office negotiate with the visiting forces' people here, so that one can have a unity of information or disinformation, and everyone will know what is going on and we shall not have a situation in which the visiting forces know a great deal more about the future intentions than the people living in the area?
Lord Glenarthur: My Lords, I have always thought—including during my period in the military—that security in these areas was important. I certainly do not detract from that now.
Lord Campbell of Alloway: My Lords, I would ask my noble friend whether the intervention of the noble Lord, Lord Jenkins of Putney, for the second time is not contrary to the spirit of what we had agreed in these matters?
The Lord President of the Council (Viscount Whitelaw): My Lords, I must make these judgments. I decided at the time that I would be generous to the noble Lord—I cannot quite think why, but I was.

Albania: Diplomatic Relations
2.45 p.m.
Lord Davies of Leek: 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 steps have now been taken to establish diplomatic relations with Albania.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, in 1980 we formally notified the Albanian Government that we were ready to re-establish diplomatic relations without preconditions. Regrettably, the Albanians have not accepted this offer which, as we have made clear, remains open.
Lord Davies of Leek: My Lords, I am grateful to the noble Lord because the Answer indicates some progress. Nevertheless, would he not agree that the

1119
entire problem of Albania has been obfuscated by the arrogant policy of our Foreign Office? It was not Albania which laid out those mines that destroyed the ships in the Corfu Channel in 1946. Now it seems to me that a diplomatic approach might be indicated, which would be worthwhile for the future and might bring us to some complaisant understanding, since Albania is the only European country that does not have diplomatic representation from Britain.
Lord Trefgarne: My Lords, it is a matter of regret that we have been unable to establish diplomatic relations with Albania. But, as I have explained, the objections come from the Albanian side and not from Her Majesty's Government. The Albanian Government have made it clear that they are not prepared to enter into relations with the United Kingdom until the quantity of gold (currently in the control of the Tripartite Commission for the Restitution of Monetary Gold) to which they have laid claim, is delivered to them.
Lord Campbell of Croy: My Lords, is my noble friend aware that the Corfu Channel case went to the International Court of Justice at The Hague, and there Albania was found to be responsible for those mines, whoever had laid them for the Albanian Government? I should mention also that the noble and learned Lord, Lord Wilberforce, was one of the counsel who represented Britain in that successful case. Is my noble friend aware also that the late Enver Hoxha did not make it at all easy for British Governments to improve relations during a period of over 40 years? Has my noble friend seen any sign recently of a change in the attitude of Albania under the new regime?
Lord Trefgarne: My Lords, I am afraid we have not yet seen any sign of a change of policy by the Albanian Government; but this is early days and perhaps we shall in the future. We hope so. My noble friend is quite right to point out that the International Court at The Hague found in our favour in regard to the Corfu Channel incident.
Lord Cledwyn of Penrhos: My Lords, has there been any contact between Her Majesty's Government and the Albanian Government since the death of Mr. Enver Hoxha? Secondly, is the question of the gold now negotiable, and could he say what is its present value?
Lord Trefgarne: My Lords, I am not aware of any contact between the British Government and the Albanian Government since the death of Mr. Hoxha. He was not in fact President; the President of Albania at that time was the man who has now succeeded to the leadership of the party in Albania. That was the post that Mr. Hoxha held up to the time of his death.
Lord Cledwyn of Penrhos: My Lords, would the noble Lord be good enough to answer my question about the gold? The gold has been the bar to diplomatic relations for very many years, as he knows. Can he now answer my question and say whether, in the view of Her Majesty's Government, the gold is now negotiable? Also, can he give us the value of the gold at the present time?
Lord Trefgarne: My Lords, I am afraid that I do not have the current value available to give to the noble Lord; but it is quite a substantial sum. As for the gold being negotiable, I should make it clear that the United Kingdom is not a totally free agent in this matter because we are of course only one member of the tripartite commission which controls the gold. The other members are the French and the United States. Before anything can happen to it, we have to have the agreement of all three of those parties.
Lord Cledwyn of Penrhos: My Lords, are the Government proposing to call a meeting of the tripartite commission?
Lord Trefgarne: My Lords, there are, I believe, meetings of the commission from time to time, but there are a number of difficult problems to be resolved.
Lord Avebury: My Lords, is the Minister aware that a Minister has given it to me in writing that the French and the Americans have both renounced their claim on this gold? Therefore, would the Government explore the notion that we should withhold only that amount of the gold which would be necessary to satisfy the claim which was awarded to us by the International Court?
Lord Trefgarne: My Lords, I am not aware that the other governments have disclaimed any ownership of the gold or any claim to it. But then, of course, I cannot speak for either the French Government or the United States Government.
Lord Paget of Northampton: My Lords, might it not be desirable to postpone this statement until after Albania has had her next revolution?

World Trading System
2.51 p.m.
Lord Bruce of Donington: 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 propose to take in the light of the 15 specific recommendations on the world trading system set out in the Leutwiler Committee's report Trade Policies for a Better Future, published on 27th March.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, the report was commissioned by the Director-General of GATT and it will be for him to consider how the recommendations should be presented to GATT contracting parties. The United Kingdom looks forward to addressing the points raised in the report in the context of a new GATT round.
Lord Bruce of Donington: My Lords, while thanking the noble Lord for his reply, may I ask him whether, when giving consideration to the matters raised in this most important report, the Government will take note

1121
of one of its recommendations: that agriculture shall be treated in future on the same basis as industry and should not be afforded special protection by the various states concerned and no longer treated as a sacred cow? Will they also bear in mind that one of the leading conclusions arrived at by this report is that the distortions caused to ordinary competitive prices based on cost, by large movements of capital across the world on a speculative basis, distort the whole operation of the free trade system as it is evisaged?
Lord Lucas of Chilworth: My Lords, equal weight will be given by Her Majesty's Government to the 15 recommendations contained in the report at a due and appropriate time, and certainly in consultation with our partners.
Lord Bruce of Donington: But, my Lords, can the noble Lord be a little more forthcoming than that? In view of the urgent matters raised in this report, when is "due time"? How long will it be before Her Majesty's Government are able to announce to either House of Parliament, or to both Houses, or to the world at large, exactly what is their own positive attitude?
Lord Lucas of Chilworth: My Lords, as I said in my first Answer, the United Kingdom looks forward to addressing the points raised in the report in the context of a new GATT round. The noble Lord will know that at the beginning of this month OECD Ministers meeting in Paris agreed that a new round should begin as soon as possible. Negotiations to that end are now in hand.

Business: Short Debates
Lord Denham: My Lords, it may be for the convenience of the House if at this point I say a word about the arrangements for this afternoon's short debates standing in the names of the noble Baroness, Lady Fisher of Rednal, and of my noble friend Lord Reay. It is customary in short debates that the mover is allowed approximately 15 minutes and that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate. In the case of the short debate in the name of the noble Baroness, Lady Fisher of Rednal, this means that all other speeches should be limited to a maximum of 10 minutes, and in the case of that in the name of my noble friend to 14 minutes. If any noble Lord should speak at greater length, it would be at the expense of subsequent speakers in that particular debate.

Housing Investment and the Homeless
2.54 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal rose to call attention to the case for investment in public housing and the severe difficulties facing the homeless and badly housed; and to move for Papers.
The noble Baroness said: My Lords, the intention of the debate standing in my name on the Order Paper is to draw attention to the wretched housing conditions
1122
endured by a great number of people who live in unfit and overcrowded circumstances or who are living in bed and breakfast accommodation, some of it described as squalid boarding houses and tiny bed-sits. If noble Lords wonder why I should be intending to draw this problem to the attention of your Lordships, I have experience as chairman of the Housing Committee on Birmingham City Council, where I was fully aware of the appalling conditions in the inner city of Birmingham. Also, the ward that I represented on that council, and the seat that I held when I was a Member of the other place, included what is called a deprived area. All I would say in describing that ward and that constituency is that it included the Birmingham gas works. That gives some idea of the conditions that are always found on the wrong side of the track.
But it is not only my own personal observations that have to be drawn to the attention of the House this afternoon. Only last week, the noble and learned Lord, Lord Scarman, for whom we in this House all have great respect, was speaking at the launching of the British Campaign for the United Nations International Year of Shelter for the Homeless. He said:
"Britain faces the prospect of a new generation of slums by the end of the century, unless something is done about the country's growing housing crisis."
He went on to say:
"We in the United Kingdom are facing three major potential areas of crisis: a new generation of young people looking for homes, a rapid deterioration of housing stock and a low level of rebuilding, improvement and new building."
Earlier in the year, we had His Royal Highness the Duke of Edinburgh chairing a conference on the interim report of the National Federation of Housing Associations and he spoke of,
"the serious difficulties facing the many people who would like a home to rent rather than to buy."
On the other hand, he said:
"Renting from the local authority or a housing association has become much more difficult as a result of the decline in investment in this sector in recent years."
The Royal Institute of British Architects has recently launched a campaign on decaying Britain, and only this morning, without any prompting from me, I received a letter from the National Council of Building Material Producers, who stated that survey after survey has shown there is a vast backlog of work in the public sector that is an urgent and growing one, but is falling further and further behind.
The Chartered Institute of Public Finance and Accounting revealed in its recent homelessness statistics that there were 3.26 households claiming homelessness in 1983–84 per 1,000 of the population, and that the net cost to those authorities that are having to bear the burden of trying to do something to keep homeless people off the streets was in excess of £27 million.
I hope that the noble Lord the Minister who is to reply from the Government Benches will not give the same reply that we had on 15th April at Question Time, when at col. 438 of Hansard the noble Lord, Lord Skelmersdale, said:
"regarding local authority housing it is, as I say, a matter of priorities for the local authority concerned."
I shall try to give the lie to that assertion. Local

1123
authorities thought that a very promising feature of local finance appeared to be the net accrued funds from the sale of council houses and land.
They felt that money raised in this way seemed the obvious remedy to alleviate the housing shortage and make substantial inroads into repairs. How bitterly disappointed they were when it became known that the Government intended to reduce capital receipts and reduce the proportion that they can spend. First, they were able to spend 60 per cent. of the capital receipts. This year they are being allowed to spend only 40 per cent. and next year only 20 per cent. The amount of good things that the local authorities thought they were going to achieve with those capital receipts is diminishing very quickly.
Let us look at the average amount spent in London and the London area on bed and breakfast accommodation. The figures given to me show that it costs approximately £5,000 a year for each family. What answer can anybody give to a local authority which has money in the bank from capital receipts which it cannot use and yet it has to spend millions of pounds per year on providing homeless families with accommodation which in many cases is completely unsuitable? Can the Government describe this as cost effective?
It would be helpful if the Minister could clarify also certain key issues in relation to the recently announced city action teams. For short, I think that the Government are calling them CATs. I am not going to say "miaow". Last week Government spokesmen gave more information regarding CATs. They said that the aim was to increase value for money and to achieve better targeting. I have never understood such phrases from the Government. They seem to me to become so monotonous because one never sees or hears the end results of how much money is going in, how much they have saved and, because of their better targeting, what better results they get. But we were led to understand from the press reports—we have been assured on this—that no money has been taken from other funds to fund CATs. No other programme is going to suffer.
Would it be impertinent of me to ask from where the Government have found this extra money? Will the partnership and programme authorities, which are endeavouring despite a lack of resources to tackle the problems of deprivation in the cities, have their funding continued? Will the priority estates projects which are operating in inner city areas continue? Is the placing of what the Government call extra resources under CATs to inner city areas merely a propaganda exercise or is real money going to go into the areas?
The Government are cutting capital expenditure, as I have outlined, in addition to making severe reductions in housing investment programmes. Perhaps I may give a quotation. It is not private but comes from the public council meetings of the Birmingham City Council whose report says:
"The House Conditions Survey 1981 clearly demonstrated the enormity of the problems facing the City. In general, the survey showed that house conditions in Birmingham were far worse than the situation nationally".
As a result of those conditions, Birmingham's investment programme allocation this year is just a
1124
little over £62 million. This is a reduction of 7 per cent. on the previous year. How local authorities are supposed to be able to invest more when they experience such serious cuts is beyond me.
The housing waiting list in Birmingham at present is more than 16,000, which represents an increase of 25 per cent. on last year. The council has normally throughout the whole of the year more than 7,000 homeless families. The withdrawal of large sums of money in grant penalties does not help local authorities, either. I shall give one example and this will be my only other example. If we are to tackle homelessness, we have to look at it in terms of the amount of money that local authorities spend. The local authority in Birmingham have gone 2 per cent. over Government expenditure targets. This means that they are suffering a penalty of over £18 million less to spend. Perhaps I may use that figure to show how iniquitously the Government's grant penalties operate. If they had a 2 per cent. overspend last year, the penalty would have been only £7.71 million; but because of the increasing penalties which the Government keep on placing on local authorities, the penalty this year is £18.80 million.
Housing finance for building and for rehabilitation is a mess. The system of annual allocations makes it impossible for local authorities and housing associations to plan their programmes properly, and for the building industry to respond as effectively as possible. I urge the Government to make a commitment to funding extending beyond a single year. The mortgage cost coupled with finding a deposit effectively rules out many people in the housing purchase world. The fact is that the poorly-housed or the homeless are for the most part those on low incomes. Waiting lists of local authorities show quite clearly that there is a proven demand for public housing, either that provided by the local authority or by housing associations. The Building Employers' Confederation say that they have the capacity to satisfy that demand.
I had hoped to hear in the House this afternoon from an employer of a large building firm speaking as a specialist on how building employers would offer their aid to the Government in trying to overcome the serious problem in public housing. I would earnestly ask the Government to consider allocating further public funding for new building and rehabilitation work. The problem of finding decent homes for many people who have no homes or who are living in unfit conditions could be solved quite easily because there is massive unemployment in the construction industry. The money which is spent on dole payments for those persons and the loss of national insurance contributions and taxation means that some of that money is wasted money. It could be spent on employment and there would be a return to the Treasury kitty in the form of the tax that they would pay and national insurance contributions.
In conclusion, I would draw your Lordships' attention to a statement made by the Prime Minister recently. She said that the matrimonial home is the strongest thing in a free society. I would not disagree with that statement. I hope that this debate will show to the Government that we wish to improve the effective method of increasing family stability because

1125
clearly social benefits are attached to housing the homeless and the badly housed which go beyond building and repairing the accommodation needed.
My Lords, I beg to move for Papers.
3.10 p.m.
The Lord Bishop of Coventry: My Lords, I am grateful to the noble Baroness for initiating and introducing this debate on so important a subject, and I am obliged to the noble and learned Lord, Lord Scarman, for providing a text for the contribution I wish to make to it. He was speaking as he took up his presidency of the International Year of Shelter for the Homeless Trust. He said:
"Adequate shelter is a necessity and should be seen as the right of all. This is one of the great causes of our times, for the provision of decent homes is the first step to overcoming so many of the other problems of the world's, and the United Kingdom's, disadvantaged".
It will be our shame if we lend our weight to United Nations Year in 1987 without proving our determination to tackle much more thoroughly and imaginatively—and, yes, I dare say sacrificially—the challenge of the homeless and the ill-housed in our midst.
Because we probably very seldom penetrate areas of urban dereliction or stand among the desperate queues of applicants in local authority housing departments, we are usually only made aware of the need for greater investment in public housing when we grumble over our rates demand, or hear yet another speech in the other places stressing the inability of government to countenance further public expenditure, or perhaps when we walk along the Embankment under Hungerford Bridge and see with our own eyes one small, pathetic symptom of a problem which I fear is rapidly worsening.
All of us have our favourite causes which we wish to espouse and which we believe ought to be exempt from economic constraints. Mine is usually education; other Members of this House could rise to speak with equal passion, no doubt, on behalf of the Health Service, the environment, overseas aid, the unemployed, or many vital public services. But if the noble and learned Lord, Lord Scarman, is right in describing the provision of decent homes as,
"the first step to overcoming so many of the other problems"—
and he has every right to make such a judgment out of his lifetime's engagement with some of the worst consequences of those problems—then we should be wise enough to unite in this cause, whatever other priorities we espouse.
I will not weary the House with statistics. Indeed, the statistics of homelessness are difficult to evaluate, as the Department of the Environment survey in the early 1980s recognised. The only certain conclusion to be drawn from them is that homelessness is still increasing and that it should be stemmed at all costs. Often, legislation which is intended to bring about this result has been nullified by unforeseen circumstances. For example, the new board and lodging regulations which come into force at the end of this month are forecast by the Campaign for the Homeless and Rootless to result in an army of 50,000 young people constantly on the move from one unsatisfactory residence to another.
1126
Homelessness, like poverty, has been with us for a very long time. We should have learned by now that short-term expedients can exacerbate the problem—and above all, that politically-motivated palliatives or penalties cause more long-term damage in housing than in any other field. Much of the present misery of the ill-housed is the harvest of earlier housing policy defects. For example, the latest estimate of the Association of Metropolitan Authorities is that £9 billion is needed to rehabilitate local authority inter-war housing stock and an equal sum to repair the defects of post-war building systems. These are figures which, in our present economic climate, will induce a state of paralysis among Chancellors and Governments, and so we are always in danger of passing on the problem while more and more potentially good homes are declared unfit and still thousands more house only those unfortunate citizens who dare not complain about the damp, the stench and the rats.
The House will not expect me in this debate to enter the controversy surrounding the Government's home ownership initiatives. Indeed, if all our citizens could own and maintain their homes there would be no need for politicians—and some might say that there would be no need, either, for bishops, for the Kingdom of God would surely have come! The right-to-buy legislation has achieved some increase in home ownership, and local authorities and housing associations have wrestled with the complexities of selling off part of their properties. They did so in the full expectation that the capital receipts would be available for ploughing back into the dwindling rented sector. By what reasoning, then, are they confined to spending only 20 per cent. of such receipts?
This brings me to my final point: the morale of the voluntary housing movement, dubbed by a former Minister of Housing and Local Government, Sir Keith Joseph, as, "the third area in housing". Most Members of this House will, like myself, have personal knowledge of the work of housing associations. In every part of the country and wherever there is a housing problem, however intractable, these associations, with their voluntary managers and expert staffs, will be found at work. Their motives are to combat precisely the conditions which this Motion deplores. Their record in making the fullest use of limited financial resources is an example to many public corporations. They have proved adaptable to the largest scale of housing development and to the smallest local and specialised enterprise. They have enlisted the support, encouragement and often the involvement of many Members of this House.
Is there any more suitable and less controversial way of meeting the difficulties facing the homeless and the ill-housed than substantially to increase the funding of housing associations? Faced by increasing demand and decreasing resources in real terms, the morale of both voluntary and professional workers is declining. We shall be unlikely to recruit another army of enthusiasts if we allow the present staff to dwindle to a demoralised remnant.
The Churches have played a significant role in increasing and sustaining the voluntary housing movement, and I can therefore make this m) final point with some relevance and certainly with

1127
conviction. I appeal for an increase of investment in housing associations so that homelessness can be banished from our midst and we can rid our society of this reproach. If we were to invest more money in housing associations, whose membership is so well and widely placed to influence public opinion, I am sure they would accept the additional responsibility and respond with enthusiasm.
3.18 p.m.
Lord Ezra: My Lords, I am very pleased to be following the noble Baroness, Lady Fisher of Rednal, and the right reverend Prelate the Bishop of Coventry in this important debate. They have spoken tellingly of the social problems created by homelessness and inadequate housing in our midst—in the midst, we should remind ourselves, of a country which is among the most affluent in the world. We are in the affluent group of countries and yet we have these problems in our midst.
I should like to speak about the economic aspects of this problem dealt with particularly in the first words of the Motion. I should declare an interest as I am involved industrially with a number of firms in the building industry. Seeing the problem from that point of view, I should like to emphasise to your Lordships that it is very remiss of us not to be taking much greater care of the assets we possess than we do at present. There are many aspects of what is known as the infrastructure which call for a substantially increased investment merely to keep them up to suitable standards. Among these, the quality of housing calls out for serious action. To let that asset progressively decline over the years seems to me to be nothing short of neglecting our basic interests.
There are a number of bodies such as the National Economic Development Organisation which reported on this subject in January of this year. The Confederation of Building Employers, the National Council of Building Material Producers and a number of others have looked at this problem in great depth. They have come to the conclusion that we are running the risk of letting this asset essential both economically and socially, progressively run down.
Perhaps I may quote from a report of the Confederation of Building Employers when they were writing recently about the question of new houisng. I think it is worth repeating because this is from a professional body. They said:
"Construction of new housing is lagging far behind the need. The private sector faces serious difficulties in making up the whole of the shortfall caused by public sector cutbacks and unless something is done now the problem will only get worse".
It is not only that the new starts are falling to historically low levels; in the public sector, for example, the forecast is of no more than 30,000 houses being started in the current year and next year, which is as low as records show, but it is also that the quality of the remaining houses is deteriorating. The longer that deterioration is allowed to continue, all the more shall we have a problem when finally we cannot avoid dealing with it.
Furthermore, in the meantime a large number of people will be condemned to live in indifferent and inadequate housing, if they get houses at all. So
1128
although in theory we have more houses than are needed, when you take account of the fact that 20 per cent. of the houses are conservatively estimated as requiring major repair and renovation, if you allow for that, then in fact we are living in a society which has totally inadequate housing.
If I may conclude my short intervention, it is to say that I believe in this issue of housing there is not only a major social problem to be faced, but also a very major economic problem. I believe when you have a combination of economic necessity and social need, serious action is urgently called for.
3.23 p.m.
Lord Soper: My Lords, in approaching even in a short debate a problem of such enormous import I propose, if I may, to set it within the categories of numbers and thereafter before I sit down to try to say something about the moral and the spiritual setting as well. I will quote from the statement given by Shelter in Crisis in Housing; and here I suppose I ought to declare an interest. For many years I was the chairman of that admirable association. It says:
"Eighty thousand households a year are accepted by the local authorities as homeless. About the same number are turned away; many more single homeless people, couples without children, are not even counted, let alone helped. Over 1 million households live in homes officially classified as unfit for human habitation; 2 million households share with others because they have no home of their own; 1 million households are overcrowded; 4 million households live in homes which are substandard or in need of major repairs, and over 1¼ million people are on council waiting lists".
To add to that sorry catalogue, as has already been said, the situation is not improving; it is getting worse.
What is to be done depends in very large measure on the instruments by which this problem can be faced. According to such evidence as has come my way, there is an overwhelming argument for the infusion of large amounts of public money into one area of homelessness in particular. It is either the absence of or unsuitability of such accommodation as is desperately needed and cannot at this time be satisfied within the framework of existing legislation and provision.
Therefore, I make the first and what seems to me to be the most important claim: that what is required is a vast increase in the available accommodation at a suitable price and rent for those who are prohibited from finding anywhere to lay their heads today or are living in circumstances which are so totally unsuitable—and over a period of more than 60 years I have some knowledge of these matters—as to be an intolerable moral situation.
What can be done? I suggest there are certain specific ways in which the priority of provision in accommodation can be fertilised and undertaken. As this noble House will know, the Social Security Advisory Committee has been concerned to provide evidence and plans for a problem which perhaps is the most acute and difficult of all that faces us in this situation: the board and lodging which so often has to take place in the very unfortunate bed and breakfast hotel accommodation, so-called. I believe it is necessary for the Government to find the money whereby local authorities can purchase private property, which has been prohibited since 1979 by the Government; or at least where they are condemned to

1129
this thoroughly unsatisfactory situation of putting their homeless into bed and breakfast accommodation, they should be able to allow the local authorities to use that money for the building or rehabilitation of premises within their area.
Furthermore, I venture to say that this problem is exacerbated by the proposals of the present Government and makes for homelessness and rootlessness among youngsters, as was said by the right reverend prelate the Bishop of Coventry: not only those under 18 years of age who do not qualify, but also those under 26. Of course, there are various clauses whereby some can be helped in their present situation, but by and large, and I quote again from the Social Security Advisory Committee, here is a situation which cannot be regarded as less than tragic:
"One result will be the risk of creating a class of rootless young people unable to obtain permanent accommodation in one place because of the strictures on the time at which their supplementary allowance will be available, unable to find a job and obliged by benefit rules to move around constantly".
That rootlessness is a major and peculiar danger, especially for those who are young. I have some knowledge of voluntary associations and will not spend the time underlining what the right reverend Prelate has already said. I believe that the voluntary associations have the capacity to do what, at this moment, is so desperately needed by way of the rehabilitation by service agencies of so much of the accommodation as is particularly occupied by old people who cannot improve sanitary conditions which are thoroughly undesirable.
Before I sit down, I venture to say something about the other dimension of this problem. It is my experience that if one thinks of the welfare state—and to me it is the most Christian thing that has happened in my lifetime—as providing, not on a basis of qualification but on a basis of need, food, clothing and shelter, my impression is that, in one sense at least lack of shelter is a more dangerous situation than even the poverty of the lack of food. I have known, and it has cheered my heart to find it so although it has not encouraged me to think of it as desirable, the way in which families have been held together in their poverty and have sacrificed for the common good such as is available to them. The psychological effect of homelessness is to deny to young people the vocabulary of their ideals or their beliefs. If, for instance, you take out of the vocabulary of the Christian faith those words which apply to home, to family table, to hearth fire, to brother, to sister, to family relationships, what would be left? Does it surprise your Lordships that in so many respects the secular generation of young people today is one which has been deprived, particularly in the field of homelessness, of the very categories of understanding whereby otherwise they might be inclined to adopt a less cynical, more optimistic and, indeed, a more reasonable way of thinking?
I believe that the welfare state is in danger of being eroded by those who fail to appreciate its absolute priority in terms of any civilised society today. Here we have an opportunity—and I hope that we shall not miss it or underrate it—to do what is required from the moral basis. If we are prepared, on the basis of necessity, to spend trillions of pounds upon arms
1130
resources because it is necessary for our wellbeing, I believe that it is much more necessary that we should be prepared to spend a vast sum of money which is much in excess of that which even our most optimistic opportunities of analysis have hitherto given either to the Government or to the Opposition. By so doing we shall be creating the wealth of a society in which ultimately the moral principles will prevail. I am therefore grateful for this debate, and I hope that it will result in an appreciation of the moral absolutism of providing for those who are homeless and without proper nourishment and care, because they belong to the family of God and should be recognised and aided.
3.33 p.m.
Lord Kilmarnock: My Lords, I want to pursue a single issue, that of the DHSS resettlement units, which I raised in my Starred Question on 19th March in your Lordships' House and which I think comes within the general terms of the Motion put down by the noble Baroness, to whom we are all extremely grateful.
These units are the most basic accommodation of all for the single homeless. There are 23 of them throughout the country; they were originally run by the National Assistance Board and then by the Supplementary Benefits Commission; and the Social Security Act 1980 confirmed the responsibility of the DHSS. These units provide, in all, some 2,000 beds for men and women, about 1,600 of which are in use on any one night. If you go to one you are, of course, really down and out. In 1981, 51 per cent. of the residents had drink problems; 56 per cent. were considered unemployable; 49 per cent. had behavioural problems or characteristics which would make it difficult to place them elsewhere; and 30 per cent. had a record of mental illness.
We may wish that these things did not happen and did not exist in our society today, but it is a fact. Most of us can attest with our own eyes that living rough and begging are on the increase. My noble friend Lord Avebury, in a Question put by my noble friend Lord Grimond on 16th April, spoke of the crying scandal of those sleeping rough under Charing Cross arches and along the Embankment Gardens. We all know it happens. We can see it all round us. I shall not, in a short debate, go into the possible underlying social and economic reasons, but I will venture the assertion that in a civilised society these people are always offered some shelter and some help. It was so in the middle ages when the monastic institutions were the main agencies of welfare; it was to some extent so under the Elizabethan Poor Law, which persisted, until 1834; and it is still so today—but only just, because the Government want to phase out the current statutory provision and turn it over to voluntary bodies.
Before I pursue that, I want to conjure up a picture of a resettlement unit in the minds of your Lordships. I recently visited one at Crown Quay Lodge in Sittingbourne, Kent. I believe that the buildings originally belonged to the Territorial Army. They are sound and functional, and somewhat better than the barracks in which I started my army training, but with no frills. The staff are convinced of the importance of the job that they do and are skilled at it. There is a shift system which makes it possible to admit people round

1131
the clock, 24 hours a day. Some of the residents were in their 50s and 60s, and others notably younger. They were not all gentlemen of the road. It is a myth that these refuges serve only vagabonds who enjoy a life on the open road. They are used by the probation service and by local authorities who cannot make an immediate offer of housing, and they are often the only immediate refuge on the breaking up of a home.
The best features of Crown Quay Lodge are its dedicated staff, a high standard of cleanliness, the three hot meals a day, the discipline and the possibility of graduating to a single room. Last but not least, there is also the close relationship with local charities willing and able to attempt resettlement on a less transient basis. Crown Quay Lodge is a typical unit. Some are brighter and others are older and gloomier. Ideally, some should be closed and replaced. But they are the only 24-hours-a-day front line refuges in the country which will take someone in who has no money in his pocket and is desperate. Also, they act as supplementary benefit centres for their residents.
This brings me back to the Government's proposals and whether these are desirable or feasible. An immediate £2 million is to be saved by the closure of the rehabilitation centres, and these are basically retraining workshops which are attached to most of these units. The units themselves are then to be subjected to a rolling programme of closures accompanied by the distribution of the funds released in grant to voluntary bodies under Schedule 5 to the Supplementary Benefits Act 1976 (as amended by the Social Security Act 1980). Two questions arise here. First, how much money is to be released? The total revenue cost of the units in 1983–84 was just over £12 million. It has been said that £8 million of maintenance work will be saved by the closures. On 19th March, in another place, at col. 457, Mr. Whitney said:
"the approximate annual amount saved from the closure of reestablishment centres which will be made available to provide better resettlement facilities is £2 million."
That is £2 million per annum, if I understand it correctly. But if the full closure programme is implemented, surely that should release the current 12 million, excluding capital costs.
In his Answer to me, coincidentally on the same day, 19th March, at col. 404, the noble Lord, Lord Glenarthur, said:
"So far as charges are concerned, I can tell him that all the financial provisions which are made for DHSS units will be made available to the voluntary ones in the future, if they come about".
That does not quite square with Mr. Whitney's answer, although I am sure there is no intention to mislead, and I hope that the noble Lord, Lord Skelmersdale, will be able to clear up the matter at the end of the debate and tell us whether all the savings which are envisaged are to be ploughed back into the new scheme. If this is simply a cost-cutting exercise, we ought to be told that now.
The next thing is the role envisaged for the voluntary bodies. CHAR, the Campaign for the Single Homeless, which I think was referred to by the right reverend Prelate, has a rather curious position on this. It agrees with the Government that resettlement units
1132
should be closed and replaced on the following grounds:
"It is inappropriate for the DHSS or anyone else to run housing, income support, health and social services for homeless people that are separate, institutional, low standard and centralised".
CHAR says quite categorically:
"Voluntary organisations have a poor record in running emergency accommodation but have managed shared housing very successfully. CHAR believes that emergency accommodation can and should be provided by local authorities and must not be seen as a function of the voluntary sector".
It dots the "i"s and crosses the "t"s a little later on when it says:
"The experience of voluntary organisations running night shelters, crash-pads etc. is that they cannot properly meet the needs of homeless people, nor guarantee to secure housing for any but the smallest proportion of users".
That rejection of the role the Government seek to thrust upon them by one of the principal charities concerned is, I think, partly due to the belief that these unfortunate people have a right to homes of their own and that the Government should change their housing policy. But that does not help us very much with the immediate problem in hand which the charities want to put on the lap of local authority housing and social services departments. That is their prescription.
That might be the right solution, but there is a major snag. There is no conceivable likelihood of local authorities being able or willing to take over those responsibilities under the present regime of rate capping, grant penalties and so forth. Nor am I at all convinced that an adequate case has been made out against a nationally run and funded network of refuges for the down and out. What is certain is that the proposal to close the existing network has not been thought through. In my view, there are few grounds for confidence that a satisfactory alternative will emerge.
I understand that a consultation process has been set in motion and that comments should be sent to Mr. Paul Blakey at the DHSS, Room 427, New Court, Carey Street. That is welcome and I should like to respond to that invitation on behalf of the SDP. But before sensible suggestions can be made it is vital that the Government should tell us how much money they are proposing to make available and what assistance, if any, they will give to local authorities if they are to carry the main burden, which is what will presumably happen. Obviously voluntary bodies will help but it is quite clear to me that they can play only an ancillary role. Do the Government accept that—that is, after all, what the voluntary bodies have said—and will they pay serious attention to the results of the consultative process? Finally, can the noble Lord say what sort of legislation will be brought forward to implement the Government's plans?
3.43 p.m.
Viscount Buckmaster: My Lords, like most of your Lordships in the Chamber this afternoon I warmly welcome the debate that we are having on the problems of the homeless and the badly housed. I shall deal with one area only, and that is the problems affecting the ethnic minorities; and I shall confine my remarks to the City of London.
Perhaps I may remind your Lordships that there are in this country altogether something like 2½ million people who are of ethnic minority. In London alone the figure is about 1·1 million and they represent no

1133
less than 18 per cent.—that is to say, almost a fifth—of the entire population. Whether we like that situation or not—and it may well be that some in your Lordships' House feel that there are too many of the ethnic minorities in Britain—they are here to stay and they have formed an integral part of our society. Indeed, so closely interwoven are they into the fabric of our society that the overall effect is something like that of a Highland tartan, and of course I do not mean any disrespect to the many noble Lords from Scotland. Let us call it a Highland kilt composed of many colours—brown, black, yellow, grey and so on. If one sends a Highland kilt to the laundry—I have never done it but many of your Lordships doubtless have—the whole of it has to be washed. We cannot say that we will wash only the white parts, the brown parts, the yellow parts or whatever it might be. The kilt has to be dealt with as an entity. I would submit to your Lordships that that is how we ought to consider the problem of our ethnic minorities.
Sad to say, there is discrimination in the spheres of housing and employment. That is despite the closely woven texture of our ethnic kilt and, much more important, despite the provisions of the Race Relations Act of 1976. I shall of course deal only with housing. In 1982 the Policy Studies Institute produced a very interesting report in which it concluded that 35 per cent. of the Asians in London were overcrowded and 16 per cent. of the Indian community, compared with only 3 per cent. of the white population. That is surely a very telling statistic.
More recently there was a report by the Commission for Racial Equality on the allocation of public housing in the borough of Hackney. That was published in 1984 and the conclusions that it reached are even more disturbing. Perhaps I may say at this stage that the London borough of Hackney has one of the highest proportions of ethnic minorities. The proportion is no less than 28 per cent. In Brent it is as high as 33.5 per cent—a third.
The report on conditions in Hackney reached three main conclusions: first, that black families on the council's waiting list were three times less likely to be offered a house, rather than a flat or maisonette, than white families in similar circumstances; secondly, that white families were over eight times more likely to be offered a new property than black families; and thirdly, that black families, on the other hand, were three times more likely to be offered pre-war property.
That report, as I said, related only to the London borough of Hackney. It seems that those findings could probably have been paralleled in other boroughs. When I spoke at the Second Reading of the Local Government Bill in your Lordships' House recently I pointed out that only one-third of the 32 London boroughs are now showing any real concern for their ethnic minorities. There is the very interesting case of the London borough of Ealing which has 25 per cent. ethnic minorities. That, believe it or not, is one of the least caring of all the boroughs.
Apart from the attitude of boroughs, another very important aspect is of course the attitude of many landladies. I think most of us would agree—indeed, I have seen it myself because I am in touch with many
1134
of those ethnic minorities—that all too often when a Pakistani, shall we say, or a West Indian comes to ask whether there is a room to rent he is given a flat-out, no, however much accommodation may be available. We do not know the full extent of this discrimination, but quite clearly it defies statistical analysis. It is very difficult to legislate against.
I come now to the specific problems of refugees, all of whom, of course, come within the broad category of ethnic minorities. Here I might refer to the very stimulating debate we had when the Supplementary Benefits Requirements and Resources (Miscellaneous Provisions) Regulations 1985 were debated in your Lordships' House on Maundy Thursday, 4th April. There was at that time an overwhelming feeling that these regulations were totally unjust.
I see that some noble Lords who spoke with me on that occasion will be speaking again today.
I will not repeat what I said then but I must just make two points very briefly. One is that if these regulations go ahead as they are drafted at the moment two internationally recognised hostels run by the British Refugee Council will have to close because the rents they charge are above the new figure stipulated. Secondly—and this point was raised briefly by the right reverend Prelate the Bishop of Coventry—there is a provision that people under 26 should move on and seek different accommodation every few weeks. That is quite deplorable, particularly in the context of refugees who, above all, need the stability and continuity provided by stable accommodation.
My final point is that as I see it—and I may be wrong here—there is something clearly wrong with the system of making rent payments. I have been in touch with several refugees and they have been left in some cases for six or eight weeks without a single payment. They go along to the DHSS office; they are told, "Well, this is in hand; we will deal with it tomorrow; we will send you a form". The problem is not dealt with tomorrow; no form is sent. I served for many years in the third world. I was conscious of the most appalling bureaucratic delays and inefficiency, and I would almost say that some of these bureaucratic bungles in London seem to equal the worst I have experienced in the third world.
I think we can all agree that the problem of the homeless is a sore thumb which sticks out all over London. In my view, the sorest parts of this very sore thumb are the problems suffered by the ethnic minorities.
3.55 p.m.
Lord Stallard: My Lords, I too should like to congratulate my noble friend Lady Fisher on providing this opportunity to discuss what I consider to be one of the most serious domestic problems facing our nation—namely, the increasing numbers of the homeless people of all ages, single or married. It is always a pleasure—a daunting pleasure no doubt—to follow the noble Viscount, Lord Buckmaster, who never fails to stir certainly my conscience with his contributions. I have heard him on a number of occasions in similar debates. I am grateful too to my noble friend Lord Soper, for filling in, from his vast experience in this field, some of the vital statistics that

1135
give us some idea of the size of the problem to which this Motion refers.
There have recently been a number of reports and surveys on different aspects of the homeless situation. Noble Lords may have read an article in the Guardian of 15th April last under the heading "£15 billion backlog on Council Maintenance". That is a telling figure referring to a report published by the Government auditor, the Audit Commission, which notes that local authority capital spending has fallen by more than 40 per cent. since the oil crisis in 1973. The report goes on to say that this £15 billion backlog is growing by £1 billion per year and that renovation will soon become prohibitively expensive. They go on to calculate that local authority spending is likely to decline from £75·5 billion last year to something like £3 billion in the year 1990. I could not believe the figures. If they had not come from the auditor—for whom I have the greatest respect from past experience—I would not have believed that such a reduction was possible, from £75·5 billion last year to £3 billion in 1990. The report mentions the waste that occurs because of the delays to projects, pressure to spend before the year's end, failure to plan ahead, and abrupt curbs in programmes.
I know that many members who have local authority experience will recognise the problems that were outlined in that report, particularly (in my own case) that aspect of spending before the year's end. It is something that always irked me when I was a member of a local authority and a member of a health authority: this rush to spend money before the year end seems an obscene way of dealing with our capital spending provisions. It is no accident, nor is it a coincidence, that all over London now you will see a spurt of road building or road mending activity—albeit very necessary—to spend the money that is left before the end of the year. That is a disgraceful waste of planning so far as the homeless and other priorities are concerned.
I was pleased to see that the Secretary of State has welcomed the report of the Audit Commission as part of his review. He did not say that he accepted it, but he certainly welcomed it as part of the review that he is having into local government capital spending. I should like to ask the noble Lord who is to reply when that review will be completed, and if he can assure us that the result will be debated in this House.
The Times on 19th April—and this has already been referred to by my noble friend the Baroness who opened the debate—reported an announcement by the Royal Institute of British Architects of its campaign called "Decaying Britain". The report quotes Mr. Michael Manser, the President of the RIBA, accusing,
"the Government of creating 'a revenue time bomb in neglecting essential repair and maintenance work on houses, schools, hospitals and other public buildings' …
"If current policies are pursued"—
he said—
"they will irrevocably damage the built environment upon which every enterprise in this nation depends … We will become a dilapidated second-rate annexe to Europe and, worse, we will be divided between those who are adequately housed and those who are not, those who work in adequate, efficient premises and those who do not, and those who lead civilised and fruitful lives and those who do not".
1136
Those sentiments have been expressed by many, many noble members on both sides of this Chamber in recent debates, and are now being expressed by professional experts. The Government must listen to those kinds of opinion.
As has been mentioned, in voluntary organisations like CHAR, like SHELTER, like SHAC (with whom I have had close associations over a number of years) and many other dedicated organisations, have been pointing out the effects on the ground where these things matter: the effect in the street and in the homes, or the lack of homes, of the truths enunciated in these recent reports. We all know the causes, the causes of homelessness are well known.
The redevelopment of properties into self-contained units for long lease letting has meant the disappearance of many guest houses, lodging houses and digs. The updating of antiquated hostels—like the Rowton Houses—has meant a shortfall of thousands of places for the single homeless. One Rowton House alone being refurbished has meant a loss of between 500 and 600 bed spaces for the single homeless in London. That is a colossal loss in one particular hostel. That is multiplied many, many times certainly throughout London and more times throughout the country. It is a tremendous problem. The impending closure of large mental hospitals, for instance Friern Barnet, will create appalling difficulties for boroughs within those catchment areas. The borough of Camden, which I know best, is one of them.
There are the housing difficulties for single women, for whom there has never been enough provision. There are the ex-psychiatric patients I have mentioned. There is the problem that has emerged of the battered women. There are the ex-offenders who have been mentioned. There are children leaving care. These have all added to the figures. What a few years ago was forecast as a 4,000 or 5,000 shortfall in bed spaces has been overtaken long ago. The figure will be three or four times that amount if we now add all the other factors. There are the pressures of family stress, of marital breakdown, the increase in unemployment and the movement towards cities like London by young people and older people seeking jobs.
If we consider the cuts in local government and housing association revenue expenditure and resources, to say nothing of rate capping, then we have an idea of the colossal size of the problem that is facing the homeless, more than anybody, and the impossible problem that is facing the voluntary organisations which are trying to deal with it. When I was a Member in another place, with the assistance of many other Members, including notably my noble friend Lord Dean of Beswick and another Member, Jim Marshall of Leicester, I tried to introduce private legislation to do something about these problems. We tried to firm up the legislation and to introduce new legislation. To be fair, we had some support and understanding from the Ministers who were then in charge and minor improvements were made. However, there has been a hardening, a toughening up, since that period. The situation has now become worse then even we anticipated in those days.
Yet another report, the report of the Institute of Environmental Health Officers, has taken up this plea,

1137
this demand for more legislation for firmer legislation and for more resources to be made available for the purpose of trying to resolve this problem of the homeless. There is the impossible dilemma, which I have mentioned, facing the voluntary organisations, particularly those involved with special needs housing. By "special needs" I mean the needs of those to whom I have referred, such as the ex-psychiatric patients, the ex-offenders, the battered women and so on. There are many. They are faced with problems, especially in relation to the possible abolition of the GLC and the inadequate provision that is being made in the event of that authority disappearing. The possibility of the revenue it was able to supply and the resources it was able to give to those organisations also disappearing is something that is extremely worrying.
Already we have not just proposals but almost firm bookings for what are called tent cities. I read about the possibility of a tent city being set up in my own area, on Hampstead Heath. If these voluntary organisations disappear and there are no resources, there will be so many thousands of homeless people wandering the streets that there will not be enough cardboard boxes to accommodate them. These cardboard boxes were mentioned by the right reverend Prelate in his speech. We know about the cardboard box problem in Chad. There will certainly not be enough cardboard boxes available. There is also talk about the setting-up of tent cities. I am sure that none of us can live with that kind of solution in 1985.
It has been mentioned that 1987 is the International Year of Shelter for the Homeless. It has also been mentioned in the speech made by the noble and learned Lord, Lord Scarman, who has been here for most of this debate, and who is the president of the council for that year in this country. At the introductory conference he warned that the United Kingdom may soon be facing the prospect of a new generation of slums. There are some, like me, who think we are already in that generation. It is not a question of "soon"; we have already arrived there, and we must do something about it. In view of this, and all the other reports which have been issued and to which the Minister has access, I should like to ask him what plans the Government have to combat homelessness, certainly in the international year for the homeless, and beyond.
4.4 p.m.
Lord Grimond: My Lords, I am very grateful to the noble Baroness for introducing this extremely important subject. I also find it a great pleasure to follow the noble Lord, Lord Stallard, with many of whose remarks I very much agree. I agree particularly with his remarks about the effect of local government finance, the need for repairing the housing already in existence, and also the effect of closing hostels and such like, which I think was also referred to by my noble friend Lord Kilmarnock.
So far, every speaker has emphasised the hardships caused by inadequate housing and homelessness. I do not intend to go over that again. My noble friend Lord Ezra pointed out that here we are, one of the richest countries in the world, and yet we are unable to house our population. The first question I want to ask is why
1138
this is so. It is not that we have not spent a great deal of money on housing, because we have; we have spent enormous sums of money on housing. Yet we face this situation.
First, I suggest that much of that money has been mis-spent, that our policies towards housing have led to inflexibility. We would have been wiser, where possible (though I agree it would not have met all cases), to subsidise the person who needed help in finding a house rather than the house itself. Such a person could then have taken that subsidy with him and tried to get a house where he wanted one. Secondly, we have to face this extraordinary situation of these hundreds of thousands of unoccupied flats and houses. In answer to a recent Question of mine, I think the noble Lord the Minister said there were something like 30,000 such houses and flats in London alone. I believe there are equivalent numbers in Scotland. I should like to ask him if he has any overall figure for the whole of Britain.
It is true that some surplus housing is inevitable because people move. However, I should not have thought it needed to be on this scale. It seems to me to have arisen partly from sheer bad planning and bad architecture. For instance, a good many of those tower blocks and many other kinds of housing were so badly designed and badly built that now people will not live in them. Secondly, much of the housing is in the wrong place. The population has been moving very fast and we now find that some places are over-housed while others are totally inadequately provided for.
Further, we are very guilty in not attending to repairs and improvements. This point was mentioned by the noble Lord, Lord Stallard. This throw-away society seems to have had a disastrous effect on housing. Instead of keeping up and repairing old houses, we allow them to fall into disrepair and then build new houses which in many cases turn out to be extremely badly built. Let us avoid the mistakes that have already been made. Let us avoid the type of architecture and planning which has led to this situation of there being vast quantities of unoccupied houses. What is to happen to these houses? I suggest they should be sold off. They have no tenants to be sold to, but they should be sold off to anyone who will take them off the hands of local authorities. The proceeds should then be used for either assisting people to find houses or for building new houses.
I reiterate what I said in my supplementary question a few days ago: that I believe that local authorities should be allowed to use at least a great proportion of the proceeds from the sales of houses in providing new houses for letting. I also suggest that the Government look at some of the suggestions made in the Economist on 6th April, particularly in regard to housing co-operatives and housing associations, which have already been mentioned by the right reverend Prelate. I believe that they should be much more used in this country and much more encouraged than they are at present.
I now come to the restrictions on letting. There is no doubt that the Rent Acts now are a considerable bar to flexibility in housing. They result in a great many buildings being under-used. To my mind, the present danger is not so much that exorbitant rents will be charged. After all, rent-tribunals exist to stop that.

1139
However, what is happening is that people whose families have grown up and gone away will not let rooms in their houses because they are frightened that once they take people in they will never get rid of them. Also, I have met tenants who are suffering harassment from landlords, not to get a higher rent out of them but to drive them out altogether because what they want to do is to then put the house on the market and dispose of it. These are the difficulties today. Therefore, I think that we should look again on the matter of the Rent Acts and look at the effects which they may be having on the use of our housing stock.
I emphasise again that it is not so much that we lack housing stock but that it is in the wrong place and very badly repaired and maintained, as are many of the neighbourhoods. In visiting many cities, I am deeply depressed not only by the housing but also by the surroundings and the fact that people who really need housing have not the means to find it or to pay the rent. If the Government are maintaining the attitude that housing is not really their primary responsibility, that it is the responsibility of local authorities and that all they have to do is to give guidance, then I beg them to give guidance along the lines that I have suggested, especially as they have emphasised this matter of empty housing. The Government should give guidance to local authorities on how they should dispose of this quantity of useless buildings and what they can do with the proceeds.
4.10 p.m.
Lord Dean of Beswick: My Lords, may I first express appreciation, like other noble Lords, to my noble friend Lady Fisher for introducing this debate on housing and the homeless. This is in natural accord with her longstanding interest in the topic. As my noble friend has herself stated, she was a former chairman—a distinguished one—of Birmingham housing committee. Our political careers appear to have progressed somewhat in tandem. During the same period, I was chairman of the housing committee of another large city having, like Birmingham, severe housing problems. That was Manchester. It is for these reasons that I speak today.
The debate enables me to express, together with other noble Lords, my concern regarding the deteriorating situation in housing. Gone are the halcyon days of building more than 300,000 houses a year under either Conservative or Labour Governments. The house-building programme under the present Government is pitiful by comparison. This is mainly due to the Government's progressive reduction of financial limits imposed on local authorities in their housing investment programmes.
The only success that the Government seem continually to claim, although we have not heard much about it lately, is the enforced sale of council houses—a somewhat shallow claim now, I believe, when one considers that the capital receipts raised by such sales, referred to by my noble friend Lady Fisher, are being denied to local authorities on an increasing scale. One recalls that the main plank on which the present Government were supposed to have introduced and implemented the sale of council
1140
houses was to raise money for replenishing stock and building new council houses to replace those that had been sold. However, the money is continually being reduced and almost withheld.
The continued withdrawal and reduction of financial targets to local authorities by the Government has wrecked any possibility of housing authorities formulating their forward-looking programmes. This is at a time when local authorities are having to grapple with corrective treatment or the demolition of housing accommodation built by the use of industrial systems sponsored and supported by successive Governments of both major parties. This matter has already been mentioned during the debate. I know that the Association of Municipal Authorities has quantified the sum required to deal with this problem as a minimum of £10 billion. This comes on top of some of the other pressures that we are discussing in the debate.
May I now refer to an article in The Times on Monday this week headed "Housing in crisis" which stated (and by leave I quote):
"Under pressure from both the public and private sectors, the Government is to undertake a comprehensive survey of the housing stock to assess how to maintain and improve the country's dwellings, which, in spite of considerable effort, is no nearer to solution than a decade ago".
In fact, figures show that the situation has deteriorated seriously over the last decade. The article goes on:
"The survey, to be carried out through local authorities, should be completed in time to influence next year's public spending plans, and will almost certainly corroborate evidence collected by bodies, including the Association of Metropolitan Authorities, the Building Employers' Confederation and the National Home Improvement Council, which shows the stock to be in a parlous, and in some cases still deteriorating condition".
May I make a personal plea to the Minister and ask that he accepts the situation and that he will give serious consideration to any submission made to him by the Institute of Maintenance and Building Management, whose members, talking in terms of the public sector, will have the major role in organising and carrying out any policies determined by the Minister. I do not believe that there is any need for such a survey. The evidence has already been collated by a number of well-established and non-political bodies which have reported on the issue. They include the Policy Studies Institute and NEDO, to which reference has already been made, and the Audit Commission on Local Government mentioned by my noble friend Lord Stallard, which reported only just over a week ago. The RIBA has also expressed its views in similar terms.
Every known agency dealing with the public sector—non-political in absolutely the purest sense—is coming to the same finding, that the time for action is now and that it is urgent. Along with a number of colleagues who have been fighting this battle for a number of years, I am pleased also to discover the new allies that we appear to have attracted in the form of the support of His Royal Highness the Duke of Edinburgh and of the noble and learned Lord, Lord Scarman, who I am sorry to see has had to leave the Chamber. The support of such worthy people in our cause is gratefully received and very much appreciated. Though these people were showing their concern, I do not believe that there is any need to await

1141
the findings of any further bodies. Action must be taken now as a matter of extreme urgency. Any proposals put thereafter can be built into an ongoing policy or programme. I have so far tried to show the problem as highlighted by various responsible bodies. Let me now give some details and illustrations. It was, I think, the noble Lord, Lord Ezra, who referred to a report by the Building Employers Confederation. The confederation has issued some worthy, excellent and detailed reports on what has been happening. A statement that it issued on 12th February, headed "Serious housing shortage threat", stated:
"A disturbing shortfall of 100,000 new homes built in each of the past seven years is revealed in a report—'Spotlight on new housing'. It says that construction is lagging far behind any reasonable assessment of need. In 1984 only 198,000 houses were completed compared with an average of 304,000 per annum during the 1970s. Last year only 152,000 new private homes were started by builders—15,000 fewer than in 1983—while council house building in the public sector fell to a post-war record low"—
this was also referred to by the noble Lord, Lord Ezra—
"of only 38,000–9,000 less than in 1983 and 25 per cent. of the level of a decade ago".
That means that we are building one house now for four a decade ago. The report goes on:
"There have recently been massive cut backs in the public sector, yet the private sector faces serious difficulties in making up the shortfall due to shortages of land at prices that enable house builders to meet the demand for housing that people can afford. The private sector is also faced with the widening gap between incomes and house prices".
That is what the confederation says. It concludes:
"We need to build many more new homes to high standards at prices people can afford if we are to realise the Government's stated goal of making Britain one of the best housed nations in the world. The alternative is to continue the present policies of neglect and see an increasing number of people trapped in unfit, sub-standard and overcrowded accommodation which requires extensive renovation or demolition and replacement.
"That alternative will lead to a serious housing crisis by the end of the decade".
In the short time remaining I should like to say a few words as regards maintenance. Twenty per cent. of all our housing is deemed to be in need of basic improvement to the tune of £2,500 per property. Those of us concerned with housing all know that because of Government cutbacks there are tremendous cuts in the normal routine maintenance that local authorities like to undertake of necessity to rescue and retain their housing stock.
Finally, the Motion refers to homeless people. Today we are seeing an ever-increasing number of people registering on waiting lists for houses. We are seeing an ever-increasing number of people who are being registered as homeless under the existing laws. The agencies which I have mentioned on the professional side, the building side and the trade union side—such as the major union UCATT—are ready to respond to this call and to deal with the problem. There is only one component lacking and that is Government support and Government funding to deal with the problem. I urge the Government to reassess their policy without delay and to set these agencies and people at the task of correcting the deficiencies that we are now experiencing.
4.21 p.m.
Lord Graham of Edmonton: My Lords, I rise a little earlier than I think the timetable as originally scripted would have called upon me to do, but that is certainly no criticism of those who have spoken. I believe that every speaker has spoken with a full measure of seriousness, of knowledge and of experience. They have all demonstrated that they are highly critical of the attitudes, the performance and the philosophy of the Government.
The sad fact is that until the Minister rises there will not have been one speaker in what is admittedly a short debate who has come along to this House to defend or to support the Government's record in this matter. I of course join with everyone else who has spoken in warmly congratulating my noble friend Lady Fisher not only on her good luck, but also on the tone of her speech. My noble friend made a constructive speech, a speech which was designed to help the Minister and to remind the Minister, if indeed he needed to be reminded—and this is not an offensive phrase—of the true nature of the problems that many Members of this House come across every week. There was no one better than my noble friend Lady Fisher to bring to the House the depth of experience which she possesses. I would certainly say that not only on her behalf but on behalf of everyone on this side of the House.
People sometimes ask why we on this side of the House constantly bring back housing as the subject of debate time after time after time. I can tell the noble Minister that so far as we are concerned we return time after time to the subject of housing because we understand the true gravity of the impact on the lives of ordinary people of being adequately, poorly or well-housed. We know—and we are not exclusive in this regard—from our experience of serving as councillors and living in constituencies (because we are still in touch with local conditions) the wretched conditions, and we know the people and the families. They are not statistics; they are not simply part of a report. We know the devastating effect on relationships and the appalling consequences for families and, indeed, for the nation.
I begin my contribution to this debate by supporting the main indictment and charge which has been sustained by previous speakers against the Government. The Government have no programme for dealing with the nation's housing crisis. They have no resources and will make no resources available. They offer no hope to the millions who are in housing need. This is a hope-less Government.
I should like to remind the Minister of the state of the housing stock and the related housing needs if, indeed, he needs reminding—and I believe he does—time after time. The situation is as follows: 1,200,000 households are on waiting lists for council accommodation, of which 200,000 council tenants are in what is officially classified "overcrowded" accommodation; 200,000 are sharing accommodation; 190,000 are on waiting lists for sheltered housing; 17,000 are waiting for disabled units. According to the English House Condition Survey—and these statistics have already been alluded to but they are worth repeating—1,100,000 dwellings are unfit for human

1143
habitation; 390,000 are fit but lack basic amenities; 574,000 require repairs costing more than £7,000; and 2,500,000 require repairs costing between £2,300 and £7,000. Over 80,000 households will be accepted as homeless this year, many more will be refused help.
When we look at the slum clearance programme, we find that it is at an all time low level and at that level of clearance it is estimated that every existing house will have to last 900 years. We know the enormity of a problem of that nature.
Last week the Minister alluded twice to the number of houses managed by councils that were left empty. The noble Lord, Lord Grimond, also made reference quite properly to the better use of these properties. From the way in which the Minister talked about empty housing, one would think that councils were the biggest culprits in keeping houses empty. In fact, 2·3 per cent. of all public sector housing is empty. Indeed, that is a matter to which the Minister alluded. However, 4·2 per cent. of all private sector housing is empty and 6·9 per cent. of all Government-controlled properties are empty. Therefore, when the Minister is trying to find reasons for hitting councils over the head once again for keeping property empty, he ought to say why it is that three times as many properties owned by the Government are kept empty. It all has to do with the resources, the HIP allocation and a great many other matters as well.
The Government are wholly sovereign over the ability of councils to make any impact upon the dreadful catalogue which I have just read out. They do so through two prime agencies—the rate support grant and the housing investment programme. Let us spend just a little time looking at how the Government help to solve the housing problem through the rate support grant and the housing investment programme. We have just seen the devastating indictment of the Government's policies published this week by the Audit Commission, which points out that, globally, as a result of Government policies, ratepayers have been forced to pay £3 billion more over the past few years simply because the Government have denied the councils a fair and proper allocation of rate support grant.
In 1979–80 London as a whole received in rate support grant a sum of nearly £1,296 million and that was equivalent to 40 per cent. of its total expenditure of £3,229 million. If in 1984–85 London as a whole had received in rate support grant a sum equivalent to 40 per cent. of its total expenditure, it would have received £2,294 million. This would have been £918 million more than was actually received.
I live in the London Borough of Enfield, which I have had the pleasure to represent. The London Borough of Enfield received in rate support grant in 1979–80 the sum of £41 million, which was equivalent to 60 per cent. of its total expenditure. If in 1984–85 the London Borough of Enfield had received the same equivalent support of 60 per cent., it would have received £60 million. However, it received only £46 million. Therefore, the ratepayers of Enfield have paid £14 million more in rates simply because the Government have decided that they are going to save the money.
1144
As regards the HIP allocations, I should like to give some figures from the London area. I happen to have the honour to be president of the Association of London Authorities. May I simply take the authorities who are members of the ALA. In 1979–80 they put in a bid for £1,548 million and they got £1,000 million. They got, in effect, almost two-thirds of what they asked for. But in 1985–86 they put in a bid for £1,023 million and all they got was £333 million, one-third of what they asked for.
Authorities do not idly ask for money. They ask for it because they have programmes which the Government have told them to get on with. This Minister has said more than once that it is up to the authorities to decide how they are going to spend their money. They want to spend their money on improving housing, and they want to get rid of the homeless. They ask the Government for adequate sums of money, and that is the response. The London borough of Enfield received, in 1979–80, 95 per cent. of what it asked for, but in 1985–86 it made a bid for £18 million and it got £5 million, 30 per cent. of what it asked for. These are some of the realities that the Minister had better take on board when he is trying to pass the blame and the buck so far as local authorities are concerned.
This Government say that they have a solution to the housing problem—owner-occupation. Let me tell the Minister what the Housebuilders Federation has said about people becoming owner-occupiers:
"One million households on £6,000 or less have a maximum mortgage capacity of £17,500. Where the household contains one person, the maximum is between £12,500 and £15,000.
"The average cost of a new house is £33,000, and that of existing houses is £29,000, although these figures hide substantial regional variations. However, the average price of houses bought by first-time buyers is £21,000. This means that those on incomes of £5,000 or less face a gap of between £3,500 and £7,500, which needs to be made up by a saved deposit".
What conclusion does the Housebuilders Federation—certainly no friend of Members on this side, and possibly more allied to the Government—come to? It says that the,
"Government must therefore turn its attention to the provision of rented housing as for most people this is now the only form of housing which they can have".
Let us look at the advice that the Government are receiving from building societies. Let me quote from a reputable and successful building society, the Nationwide:
"An 'average' first-time buyer with a 25-year mortgage would have had to spend 24·1 per cent. of net income on repayments last quarter—up from 18·3 per cent. in the first quarter of 1984. With house prices rising faster than borrowers' average income, the recent increase in mortgage rates is particularly hard for buyers to afford.
"Previous owner occupiers taking out mortgages have also been hit by these trends, and were spending 22·6 per cent. of net income on repayments in the first quarter of this year, compared with 17·2 per cent. a year previously."
There are, of course, a great many aspects to the problems of housing and many of them have been touched upon. Let me simply remind the Minister of the trends over the period in capital and revenue spending. Housing revenue and capital expenditure have both been cut in absolute terms, and the housing programme as a whole has suffered a disproportionate cut as compared with the other areas of public expenditure. This of course is direct Government

1145
policy. The trends over the past 10 years are alarming. Ignoring inflation, for every £100 spent on public housing in 1974–75, £65 will be spent in 1984–85. Allowing for inflation, for every £100 spent on publiic housing in 1974–75, £21 will be spent in 1984–85.
After substantial consensus since the war, for more than 30 years, as an act of deliberate political policy by this Government, housing has been taken off the nation's agenda by Secretary of State Heseltine and by Housing Minister Stanley. Despite the most alarming and depressing reports from, among the others, the House of Commons Environment Committee and the 1981 English House Condition Survey, this Government have closed their eyes and their ears to all sounds of pain, of anger and of despair. In public housing we have seen a steady, heavy transfer of cost and charge from the public purse to the tenant. The most cynical aspect of this abandonment of the needy in housing to the tender mercies of what the present Housing Minister calls "the magic of the market place" is the furtive, secretive, clandestine way successive Tory Housing Ministers have sought to keep their disreputable deeds out of the arena of public debate.
Relations between this Government and local authorities are at an all-time low. Nowhere are they lower than in the field of housing. My noble friend Lady Fisher, from her lifetime involvement in seeking to improve the lot of working people, recognises that if a family has a decent home—not just a roof over its head, but a chance to grow—it can give to the nation far more than the nation need ever give to that family.
This Government think they have a housing policy by selling council houses. They are wrong. This Government think they have a housing policy by producing legislation which cripples the abilities of councils who want to solve their housing crisis and by interfering and bullying them into submission. They are wrong. This Government have betrayed the trust of millions in housing need who voted them into office. They have abdicated their responsibilities not only to the needy but to the nation. It will fall to the lot of the next Government, a Labour Government, to see that those who have been abandoned and betrayed get what they so desperately need—a Government who put better housing for all our people at the top of the nation's agenda.
4.37 p.m.
Lord Skelmersdale: My Lords, the subject of housing, with all its ramifications, has been one of recurring interest in your Lordships' House for many years. I therefore welcome this opportunity to debate these important issues again. I am grateful to the noble Baroness, Lady Fisher of Rednal, for putting down this Motion today. It will not surprise her to learn that I do not draw the same conclusions from her speech as she did. She says, "The problem can be solved quite easily" by (guess what) the same old, pale, tired solution of throwing money at the problem which resulted in throwing this country into the arms of the IMF.
In considering this subject, we must be aware of one very germane point which is so often ignored, particularly by the party opposite. I was interested to note that
1146
the right reverend Prelate the Bishop of Coventry was obviously aware of it from what he said. This is that the overwhelming choice of people today is to own their own homes. Not only is this what they want, but surveys have shown that over 90 per cent. of young people aged under 35 expect to achieve that aim within 10 years. We have responded, and will respond, to this need.
This is why home ownership is the cornerstone of the Government's housing policy, and the success of this policy is amply demonstrated by the undeniable fact that since this Government came to power the country has seen one of the most rapid rates of expansion in home ownership since the war. By the end of last year the number of owner-occupied dwellings in Great Britain had increased by 1.8 million since May 1979. Owner-occupation has now passed the 63 per cent. mark in England. There is no reason why it should not rise to 70 per cent. over the next decade. The Government's right to buy policy has played a major part in this. Since 1979 over 800.000 public sector dwellings have been sold in Great Britain, almost all to sitting tenants, and most under the right to buy.
Not only this. Through our low cost home ownership initiatives we have made home ownership a reality for thousands of people who would not otherwise have been able to buy. Over 70,000 homes have been sold under low cost home ownership schemes, including building and improving for sale, homesteading, shared ownership and building under licence. And over and above that, 70,000 homes and more than 5,000 acres have been sold by local authorities and new towns—sufficient land for over 45,000 homes.
I am sure that the House will agree that this is a considerable achievement. Indeed, the private sector is making an increasing contribution to meeting housing need. Expenditure in the private sector is now the most important measure of investment in housing. Out of 200,000 dwellings completed last year, over 150,000 were in the private sector, the highest figure since 1976; and the most recent House Builders' Federation State of Trade Inquiry, published this month, is optimistic about the future, reporting that house builders were planning to increase their level of starts over the next year.
The Government therefore expect more people to have their needs met in the private sector. That is not to say there is not a role for the public sector to provide homes for rent. Of course, there is. There will always be a need to cater for those who are unable, for one reason or another, to own their own homes or meet their need in the private-rented sector. But, as more and more people fulfil their wishes to buy their homes, this role will change over the years to come. Contrast our approach, my Lords, with the blinkered and ineffective thinking of the party opposite! As I understand the speeches that we have heard today, from the other side of the House, their only solution is a massive programme of council house building. Why build vast municipal estates that people do not want to live in? A good, well-run local authority is one which puts the needs of the people that it is elected to serve before any other constraints. It is one which, if it perceived the demand for housing for, for example,

1147
first-time purchasers, says to itself, "How can we provide good quality housing for these people at prices they can afford and at the same time meet some of our own housing needs at little cost to the council?" The local authority with some lands owned for housing has basically two choices: to build for rent or to provide housing for sale either itself or by bringing in a private developer. What happens? We see local authorities split along ideological lines. What a nonsense this is I am sure the noble Lord, Lord Grimond, would agree. I may be old fashioned but I believe in giving people what they want. Take housing out of politics! That is what I say.
Lord Graham of Edmonton: My Lords, I am grateful to the noble Lord for giving way. It seems a little while ago but I recall him saying words something like: Why should we build vast council estates to put into them people who do not want to live there? Quite frankly, that is nonsense. I should like the Minister to tell us of the evidence from the people who are homeless and who want to be rehoused but who do not want to live in vast council estates. If the Minister is arguing about architecture or the manner of building public housing in the 1990s as opposed to the 1950s, he will have me on his side. However, public housing has advanced. But surely what we are talking about are the hundreds of thousands of council properties which have been denied being brought up to a good state of repair simply because this Government have said, "You shall not spend your own money through capital receipts, and even if you wanted to do so, we are not going to allow it; and we will reduce your rate support grant as well".
Lord Skelmersdale: My Lords, perhaps the noble Lord, Lord Graham of Edmonton, will allow me to make my own speech in my way. I shall come to those points which he has made and I fully recognise that there have been improvements in design, in building by local authorities such as he has said, since the 1950s. But I still reckon that all is far from perfect. There is quite a lot more that could be done in the public-rented sector to give people what they want.
I believe firmly that if local authorities and the private sector work together, it is possible not only to make a significant impact on housing needs but also to provide people with the housing they want. For example, a local authority could sell a site to a builder on condition that he builds low-cost homes that are offered to people either in local authority accommodation or on the waiting list. That would not count as public expenditure. In fact it would be the reverse. The local authority would enjoy the receipts from the sale of the land. As the properties were sold to sitting council tenants or to those on the waiting list, the local authority would get the benefit, at no cost to itself, of the re-lets or it would benefit from the reduced pressure on the waiting list. That solution would bring about a better form of tenure because, as I have said, home ownership is what people want.
Anyone looking objectively at housing, as did the noble Lord, Lord Grimond, should feel that that is a legitimate and cost-effective approach to tackling housing problems. If it is measured only in terms of the level of public expenditure, then it does not show up. That is why the analysis on which some noble Lords
1148
opposite rest their case is unsound. What the Government are doing and will continue to do is to harness the energy and resources of the private sector to tackle the problem with which the House is rightly concerned.
Your Lordships may well think this is a long introduction to the Government's response to the Motion of the noble Baroness this evening. However, I thought it right to put the rationale of our housing policy to the House. So, the question that I now have to answer is the one put essentially by the noble Lord, Lord Ezra: have we made sufficient resources available for public sector housing? Contrary to the impression given by the party opposite, we have made very substantial sums available. The gross provision for public sector investment in housing for the present financial year is just over £3 billion. This has been referred to by many noble Lords, including the right reverend Prelate and the noble Lords, Lord Graham and Lord Soper. All have said that they did not reckon that this was enough. The housing corporations' programme for 1985–86 of £685 million is sufficient for new starts on about 17,000 rented dwellings and 5,000 low-cost home ownership dwellings. By any standards, it is a substantial programme of public expenditure to support investment made by housing associations. I am not talking about the total figures; I am talking about these particular figures.
It reflects the fact that this Government continue to attach great importance to the contribution that can be made by housing associations in meeting a wide range of housing needs. It is certainly true that we have taken some firm measures to reduce the risk of actual expenditure in 1985–86 exceeding that provision. That has been necessary because spending in the past two years has run well ahead of the planned level and of what the country can afford. Keeping the total public expenditure within the planned levels is essential for economic strategy. If public expenditure is allowed to rise significantly above those levels, the public sector will absorb too big a share of the available finance; there will be increased pressure on interest rates and growth of investment in the private sector will be impeded. Investment in economic recovery is proceeding apace and it is expected to gather further momentum in the year ahead. In the long run it will help no one if this recovery is interrupted.
Before I leave the subject of capital receipts, perhaps I might remind the noble Baroness, Lady Fisher of Rednal, that not all capital receipts are restricted to 20 per cent. There are some categories that remain at 100 per cent. and these reflect our particular policies. They are building for sale, building for sale under licence and acquisition of housing for resale; for example, under shared-ownership schemes. Even where the prescribed proportion has been reduced to 20 per cent. we are not depriving the authorities of the use of these receipts. What we are doing is spreading their use over a number of years to reduce the economic impact. The housing needs of the homeless have been the subject of recent discussion in your Lordships' House and they were graphically described in the horrifying words of the noble Lord, Lord Soper. Again, I have no doubt that he is right in what he says; but, again, I do not agree with his conclusion; and I shall explain why.

1149
I have explained the Government's policy on the homeless in answer to questions from the noble Lord, Lord Grimond, and the noble Baroness, Lady Ewart-Biggs. The Housing (Homeless Persons) Act 1977 imposes a duty on local authorities to arrange accommodation for homeless people in specified priority need categories. For homeless people outside the priority need categories, the authorities have a duty to provide advice and appropriate assistance. The Government have asked authorities to interpret this duty as generously as resources permit. In England, in the first half of 1984, 9 per cent. of those for whom authorities arranged accommodation for the homeless were outside the priority categories.
I can assure the House and the noble Viscount, Lord Buckmaster, that the Government are fully aware of the difficult problems being faced by some local authorities, particularly in London. I can tell him that we take particular account of those problems when making the housing investment programme allocation. Ten per cent. of the generalised needs index, which is the formula used to distribute the HIP resources, is made up by a special homelessness indicator. The department takes account of particular problems faced by individual authorities through the local discretionary element of the distribution.
We are helping in a number of other ways. For example, the Government's hostel initiative has resulted in a major expansion in the provision by housing associations of small, modern hostels, often providing care and support. It is estimated that some 11,000 places have been approved since May 1979. This has been a valuable way of improving provision for the single homeless, including those outside the priority need categories of the Act. Under the housing association grant arrangements, associations providing accommodation in hostels, other forms of shared housing and self-contained dwellings for rent are supported by the Department of the Environment with capital and also, when necessary, revenue finance. The noble Lord, Lord Kilmarnock, spoke of yet another Government initiative which I believe he thought rather questionable. As I understand it, the DHSS has decided that it should no longer run the particular hostels that he was talking about, and therefore the money can be reallocated. I shall of course check on that assertion and write to him, if I may, in any event.
Noble Lords have highlighted the plight of those living in bed and breakfast accommodation. I am sure there is no disagreement between us about this. Using bed and breakfast must be a last resort. It is expensive and unsuitable, in the long term, for single people, let alone families. I cannot imagine that any Member of your Lordships' House would wish to live in this way, but the answer is not to embark on a major council house building programme, although some new build will undoubtedly be required. However, there are other options.
As public sector resources are limited we must make the fullest use of all existing accommodation, including empty dwellings, whether public or private. The Government have taken a number of measures in order to help. The department's recent empty dwellings report demonstrated that there is a good deal
1150
of scope for making better use of local authority stock by improving management practices, both to speed up changes of tenancy and renovation schemes and to turn round run-down and unpopular estates. We shall shortly be issuing a circular to local authorities setting out ways in which better management can reduce the number of empty dwellings. There is also scope for more short-life schemes for both public and private sector tenants, to provide temporary accommodation. To help to develop this, the Government have decided to restore eligibility for housing association grant to local authority-owned short-life dwellings.
A number of noble Lords have argued that the Government need to do more to improve the condition of the nation's housing stock. We recognise that in the public sector some authorities are facing difficult problems of disrepair in their own stock. We gave greater weight to public sector disrepair in the distribution of housing investment programme resources for this year, but better information about the condition of the local authority stock is needed. As a first step towards obtaining more systematic information, the Government launched a special inquiry into the repair and improvement requirements of their stock on 11th April. This will give a much better estimate of the scale of the problem at the national level. The Government are also helping by providing technical advice. The Building Research Establishment has carried out research into defects in a number of types of housing and is currently investigating large panel systems.
We have also given a high priority in recent years to the improvement and repair of private sector housing. The noble Lord, Lord Dean, mentioned this. Spending on home improvement grants was over £900 million in 1983–84 and is estimated to have been nearly £750 million in 1984–85. I was interested to learn that these figures compare with £90 million spent in 1978–79. The Government have been carrying out a review of private sector housing improvement policy, and we expect to publish the reports in the form of a consultative document very shortly. This document will be given a wide distribution. The Government are keen to receive comments on the proposals before these are finalised and the necessary legislation is brought forward.
By all the rules I ought to be perorating about now, but I think perhaps your Lordships will allow me a few more minutes. The noble Lord, Lord Graham, asked me, very fairly: what about the private sector? He also made various allegations. We in this Government are convinced that one of the major reasons for the decline of the private rented sector is the Rent Acts. That is why we have recently put in hand a Ministerial review of the working of the Rent Acts. I have already told the House about this on a number of occasions: it is being undertaken by my honourable friend the Minister for Housing. I expect the conclusions to be made available soon.
The other thing I ought to say is that the noble Lord, Lord Graham, has good "forgettery". The party opposite was much more successful in cutting resources than this Government. In four years from 1974–75 to 1978–79 investment in public sector housing fell by 45 per cent. In the five years of this Government it has fallen by only 26 per cent.—and we

1151
have also increased the number of families who are housed in the conditions that they want.
We have had an interesting and thought-provoking debate today. I appreciate that there are many questions—for example, the new city action teams, which were asked for by the noble Baroness, Lady Fisher—that I have not been able to reply to. Nor have I been able to reply to a number of detailed points on what might be called mental and physical health. I hope that I might be allowed to write to those noble Lords who have mentioned such points.
Nobody, least of all this Government, underestimates the serious nature of some of the problems that we face. But my message is this. We must not be deceived into thinking that a vast increase in public sector investment is the answer. We have a duty to provide the sort of housing that people want; we have a duty to maintain the economic recovery—and that means keeping firm control over public expenditure. The way forward is to harness the energies and resources of both public and private sectors to provide the right mix of housing at a price the country can afford. And, my Lords, the other way forward is to make sure that we get value for money for every penny spent, as the noble Lord, Lord Grimond, has so cogently pointed out this afternoon.
4.59 p.m.
Baroness Fisher of Rednal: My Lords, the noble Lord, Lord Skelmersdale, said that he would not be saying things I would agree with. I am sure he does not expect me to agree with most of what he has just said. What I was trying to point out clearly was that we on this side of the House are just as concerned to get value for money as are the Government; hence, why spend millions of pounds every year on giving to homeless people bed and breakfast accommodation when they could be provided with housing? Is that value for money? Why waste money? You have got no asset at the end of the year except somebody's chewed-up breakfast. It seems to me elementary; I do not think one needs to be a student of economics to regard that as being cost-effective.
When the noble Lord was giving his reply, to be quite truthful I thought to start with that this was Lord Graham's debate. I think I got a mention a couple of times, and the noble Lord has said he is going to write to me. I listened to hear how many times he mentioned homelessness and the badly housed. I do not think that he mentioned the badly housed once. I shall read Hansard carefully tomorrow, but I think that homelessness was mentioned only four times.
This debate has been to call attention to the need for investment to overcome the difficulties facing the homeless and the badly housed. Later this evening we shall have an Unstarred Question on whether there are any further plans to save more of our cultural heritage. Noble Lords who have spoken in this debate have been trying to preserve the people and their homes, which we think is the national heritage—not the cultural heritage.
In conclusion, may I say thank you to all those who have joined in the debate and who made some excellent points. I am grateful for all the support that I have had this afternoon. I would say this to the
1152
Minister. The noble and learned Lord, Lord Scarman, who was here for the greater part of the debate, is chairing the International Year of the Homeless in 1987. I should like to feel that after this debate the Government will not turn their back on that Year of the Homeless. If they do, they will be turning their back on those who are ill-housed, the mentally handicapped, the battered wives, the ex-prisoners, the psychiatric patients and the ethnic minorities. If the Government do not do something to play their part in the International Year of the Homeless—and the plans have to be laid now—they will be turning their back on all those people. My Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

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

Chemical Weapons
5.2 p.m.
Lord Reay Lord Reay rose to call attention to the threat posed by chemical weapons, and the case either for a balanced and verifiable ban on such weapons or for the possession by NATO of a credible chemical deterrent; and to move for Papers.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. History indicates that chemical weapons are used only when the user does not fear retaliation by the enemy. So early in the First World War they were used on a large scale against Russian troops; between the wars they were used in Abyssinia; they have recently been used in Iraq, apparently in Afghanistan and possibly in South-East Asia. Their use petered out in the First World War as both sides became prepared to wage chemical warfare, though not before severe casualties had been caused.
In the Second World War both the allies and the Germans, when at different stages tempted or urged by certain of their leadership to use chemical weapons, were always deterred by the fear of retaliation. There can be little doubt that, if NATO policy were to possess a strong battlefield capability in chemical weapons, this would act as a powerful deterrent against the use of chemicals in an enemy attack. It would also equalise the disadvantages of fighting in an environment in which the use of chemicals has occurred or is expected.
At the moment, it is certainly assumed that the Warsaw Pact armies would use chemicals in the event of an attack. All NATO troops have protective clothing and decontamination equipment, and noble Lords who have attended NATO exercises will have seen what a serious impediment to fighting capacity the need to wear and use this equipment constitutes. An incomparable advantage lies with the side—if there is only one side—who is free to choose when to use chemical weapons. Only the aggressor knows which chemical weapon has been used and, therefore, what its effect will be and how it can be neutralised. The

1153
chemical agent can be persistent to deny an area to the enemy, or non-persistent to kill the defenders and allow in the aggressor.
It can be used to trap enemy troops in pockets when they can be annihilated by other means. It has great potential for early use against tactical nuclear weapon launching sites, airfields, seaports and other installations. It can be used to any depth against military or civilian targets. It can be used against ships at sea. A modern attack on Western Europe would, in all probability, be a blitzkrieg, in which the aim would be to reach the Atlantic before the war could escalate to the strategic nuclear level and in which the use of chemical weapons, perhaps even on a vast scale, could play an essential role in achieving the degree of speed, surprise and shock that would be required.
It is not contested that the readiness to use chemical weapons forms an integral part of Soviet military doctrine and organisation. There are 100,000 Soviet chemical troops, whose task is decontamination, guidance of combat troops and so forth—not the use of chemical weapons themselves. Estimates of the amount of chemical agents stored in Eastern Europe vary considerably; indeed, they must be impossible to estimate with any certainty. Her Majesty's Government say that they exceed 300,000 tonnes, although other estimates run much higher. The wishful thinkers, of course, put them lower. But at least it is known that the Soviet Union has never ceased to continue manufacturing and modernising chemical weapons and their delivery systems.
Former Senator John Tower, now one of the heads of the negotiating team in the Geneva arms control talks, then chairman of the Senate Committee for the Armed Forces, writing in 1982 in the Washington Quarterly, said that United States intelligence indicated that approximately one-third of the Soviet shells, rockets, warheads and bombs stored in Eastern Europe carried a chemical payload. He acknowledged that other estimates put this as high as 50 per cent. He also quoted an unclassified United States intelligence report that the Soviet Union had 106 chemical plants in operation, of which one-half were either producing or were capable of producing the latest war gas.
Against the arsenal of chemical weapons, stored and distributed ready for offensive first use, which the Soviet and Warsaw Pact armies must be assumed to have; in the light of their known military interests, doctrines, capabilities and character, and of their ceaseless activity to pursue the extension of their power on all fronts at the same time—against this might what do the NATO allies have at their disposal?
No NATO country, apart from the United States, has stocks of chemical weapons. Britain destroyed hers in the 1950s and dismantled her only production plant, after long disuse, in 1977. The United States has some 35,000 tonnes of chemical warfare agents, all manufactured prior to 1969 when manufacture ceased, and of which only about 10 per cent. is stored in Germany. Much of the remainder is held in bulk in the United States; that is to say, not yet incorporated into ammunition. What ammunition there is is unsuitable for modern delivery systems. The ammunition is largely in 105 mm shells, yet former Senator, John Tower, wrote in 1982 that there were
1154
then only eight 105 mm howitzers left in Germany. All the chemicals are dangerous to transport, unlike modern binary chemicals which are relatively harmless until fired, and therefore a better deterrent. It is reckoned that within five years or so the entire United States stockpile will be unserviceable. It can therefore safely be concluded that fear of chemical retaliation would not in the present circumstances be a factor that would weigh heavily in Soviet calculations in the event of war.
This Motion suggests that NATO needs either a credible chemical deterrent, which it manifestly does not have at present, or a verifiable and comprehensive ban on chemical weapons. The Government have been urgently pursuing the latter in the context of the special ad hoc committee of the multilateral disarmament conference which has now been sitting for 15 years in Geneva. The Minister of State at the Foreign Office, Mr. Richard Luce, wrote an article for The Times in June last year which was headed: "Weapons that must be outlawed now." He concluded with these words:
"The disarmament conference must now make an energetic and sustained effort to resolve the outstanding problems. If it does so, we will be in sight of our goal to banish chemical weapons from the face of the earth."
Recently Her Majesty's Government tabled new proposals at the conference. No doubt the noble Lord, Lord Trefgarne, will be telling us about those.
But how realistic is it to hope for a comprehensive and verifiable ban? Scepticism is surely understandable. In the first place there is the problem of verification. We have already seen how little idea the West has of today's Soviet chemical stocks, distributed as they will be in shells, warheads and bombs which are indistinguishable from those with an explosive payload. How could we be sure that all stocks would have been traced and destroyed, and those destroyed not replaced? We saw how in Iraq, out of nowhere and as a by-product of pesticide production, chemical weapons were produced and used. How could 100 chemical factories in the Soviet Union be controlled, and what about those in client states of the Soviet Union? And what about factories on new sites?
The second obstacle to an agreed ban is one of Soviet incentive. For as long as the Soviet Union possesses the battlefield, advantages it currently enjoys, surely its interest is to do everything in its power to prevent NATO establishing an adequate retaliatory capability; and what better means could there be of doing so than to keep on talking, all the while giving the illusion of progress although never allowing apparent progress to reach its conclusion in a treaty that would amount to an act of unilateral disarmament by the Soviet Union—and as Andropov once said, the Soviet Union is not such a naive people as to disarm unilaterally.
Thirdly, even if a verifiable ban was agreed, what would the West do in the event of a treaty violation by the Soviet Union? The answer should be that the West would then chemically re-arm itself. But recent history of Soviet arms control treaty violations suggests that, rather than do that, the West would get bogged down in a dispute with the Soviet Union over whether or not a violation had taken place. Moreover, it would be

1155
difficult for the West to re-arm having previously announced triumphantly the end for all time of chemical warfare. Would it not therefore be better to proceed now to modernise our chemical capacity?
The answer, I suggest, is that it would, and that this is what indeed would now be happening if the American President was getting his way with Congress. But Congress, perhaps not feeling the urgency of meeting a threat which seems unlikely to touch the American continent, has not been ready to vote the necessary funds. Moreover, the United States is discouraged by European scruples. The right to use chemical weapons even in retaliation has been renounced by Denmark, Norway, Germany and Italy. Norway and Denmark go so far as to prohibit the storage on their soil of chemical weapons. Even this country has no stocks, no plans to manufacture, and knows that there could be a political storm were it to change its policy.
No wonder that John Tower, in the article I have quoted, complained that the European allies had not demonstrated a realistic attitude toward chemical preparedness, that they relied on the credibility of the American chemical deterrent to prevent the outbreak of chemical warfare in Europe, and that they were unwilling to face the domestic political heat that would be involved in maintaining their own chemical deterrent or in deploying any significant part of the American retaliatory stockpile on their soil. It was above all to give an opportunity for another European voice to be heard, of those who are unhappy about the present situation and who do not want Europe in this field as in others to jeopardise her own future by turning away her face from reality, as well as to give an opportunity to the Government to state their policy, that I put down this Motion. I beg to move for Papers.
5.16 p.m.
Lord Rea: My Lords, I am most grateful to the noble Lord, Lord Reay, my namesake, with, it appears, more differences with me than just the "y", for providing us with this useful opportunity to debate this very important topic. But as with the Motion of the noble Lord, Lord Home of the Hirsel, yesterday, I find myself rather disturbed by the form of words he has used. Is he not saying in fact: "Ban these weapons or else"? This is surely a rather subtle form of blackmail, suggesting that if the USSR or the USA does not comply with the requirements of the other in the negotiations for banning these weapons, we should give up hope of an agreement and initiate or join in another and particularly nasty extension of the arms race. I can hear some people saying, "The Russians listen only to arguments backed by strength"; but to me the concept of "arm to disarm" is fallacious and has never worked to my knowledge. I should be grateful if any noble Lord could give me an example from history of where it has worked. But let us consider what might happen if NATO were to deploy these weapons.
It is of course possible to argue, as the noble Lord, Lord Reay, did, that deployment would make it less likely that they would be used against us. He might have cited the example of the 1939–45 war when neither side used the stocks of weapons they held, for
1156
fear of retaliation. He did point this out. Against that I would argue that as Europe is most likely to be the theatre of the next war, the USSR or the USA, who might initiate the use of these weapons, might feel that their homelands were relatively safe from attack. Nazi Germany, on the other hand, was in a very exposed position of retaliation. In a war in which nuclear weapons were used it would not be a very big step to compound the horror by using chemical and bacteriological weapons. If, on the other hand, they were used in a conventional war, the sense of outrage and shock by the victim might lead it to use nuclear weapons. In other words, we are talking about substances which are not only very unpleasant in themselves and can ricochet on the user, but which might trigger off something worse.
In a conventional or a nuclear war stocks of these weapons could be hit by a bombardment, releasing their contents on the surrounding population. But even in peacetime I am uneasy about the existence of stockpiles of these weapons. Terrorists are ingenious and desperate. They could either steal or otherwise obtain stocks with which to hijack whole cities or countries, or they could master the technology of their manufacture. Already proliferation and use of these weapons has occurred, as the noble Lord, Lord Reay, has pointed out.
If we begin to regard chemical weaponry as a normal part of our military armamentarium, the next step would be the development of biological warfare, with the use of bacteria or viruses, or worse, genetic engineering, to decimate adversaries—a veritable Pandora's Box of future horrors.
But all this is jumping the gun—if noble Lords will excuse my use of a sporting rather than a military phrase. It is necessary to look at where the negotiations for the banning of chemical and biological warfare have reached so far and what further progress might be achieved. I am not so pessimistic as the noble Lord, Lord Reay. The United Kingdom has played a useful and honourable role in these negotiations to date and I feel that we can still act as an honest broker.
As far as I can ascertain, the progress of negotiations seems to be as follows: and here I am indebted to Dr. Sean Murphy, a lecturer at the Open University, for a résumé of the story:
"The 1925 Geneva Protocol did not outlaw the production of chemical weapons and nor did it define in any detail what the agents are. For example, are incendiaries, tear gases and defoliants to be considered as chemical weapons? The USA says not: witness their large-scale use in South-East Asia in the 1960s and 1970s.
"In 1968 talks between governments on chemical and biological disarmament began within the Geneva Conference of the Committee on Disarmament. A comprehensive biological weapons treaty was duly agreed in 1972 (the Biological and Toxin Weapons Convention). Agreement on a chemical weapons treaty has still to be reached. Western governments have always maintained that the sticking point is on verification".
That was a point well made by the noble Lord.
The résumé continues:
"The British government's view in January 1982"—
according to the Arms Control and Disarmament Research Unit of the Foreign and Commonwealth Office—
"was that: 'whereas Western States have offered to accept all kinds of verification measures necessary to ensure that parties to arms control agreements are not cheating, the Soviet Union has

1157
traditionally rejected them, and in particular has resisted any sort of on-site inspection arrangement'. However, in June 1982 at the UN Special Session on Disarmament, Foreign Minister Gromyko submitted a draft text for a convention outlawing the possession of technical weapons in which provision was made for on-site Inspection.
"Early in 1983 Britain took the lead and outlined a procedure for verification. Chemicals would be classed as having degrees of toxicity. Supertoxic chemicals would be heavily policed but less toxic agents (such as phosgene and cyanide which are used widely in the chemical industry) would not be.
"With the collapse in 1983 of all the major disarament talks between the USA and the USSR after the deployment of Cruise missiles in Europe and the shooting down of the Korean civil airliner, the only talks still continuing were those on a chemical treaty. Early in 1984 the Soviet Union again stated that a chemical treaty could be secured. USSR negotiators offered to permit permanent international inspection teams on Soviet territory to supervise the destruction of existing stocks. The USA said that this was insufficient. The British proposed a 'right to challenge' feature to verification but the USSR complained that there was not enough flexibility in the attitude of Western governments. Vice-President Bush was sent to Geneva with a draft treaty in April 1984.
"Under this proposal the USA and the USSR would be free to inspect each other's top-secret military facilities. This proposal is unacceptable to the Soviet Union. The Soviet chemical industry is State-controlled, whereas that in the USA is largely private and these companies can claim 'unreasonable search of private property' under the USA Constitution. However, the USA stance is seen as a negotiable position and not as a 'take-it-or-leave-it' treaty".
In conclusion, I believe that all this indicates there is room for more constructive work at the conference table. I am sure we can play a valuable role before any plans for deployment of these inhuman weapons are made.
5.24 p.m.
Earl Fortescue: My Lords, I too am grateful to my noble friend Lord Reay for initiating a debate on a subject which is little discussed and about which many people know so little that they do not realise its importance. Chemical weapons and nerve agents are arguably as awful as nuclear weapons. I offer no apology for repeating much of what I have said over the past three years, as I feel more strongly than ever on the subject.
A minute amount of nerve agent if inhaled or in contact with the skin will cause death after appalling suffering. The chemical can be formulated so that it persists on the ground for several days. Protective NBC clothing is very inhibiting to a fighting man and certainly is no substitute for a deterrent of a similar chemical capability. Incidentally, I have heard of no suggestion to provide the civilian population with NBC clothing. The civilian population of this and other NATO countries is just as vulnerable to a chemical attack as are the front line troops, the airfields or the rear echelons of the NATO forces.
I have previously expressed the view that NATO could be expected to hold on for a period if the Russians attacked using conventional weapons only. I have little hope of their ability to hold if Russia used chemicals in addition and if we had no capability to retaliate in kind. Short of surrender, our reply would have to be the use of theatre nuclear weapons, and where might that lead?
For three years the Government's answer to my plea for a chemical deterrent has been that they are hopeful of an agreement on chemical warfare at a
1158
disarmament conference and that a deterrent is therefore not necessary. I suggest that in an imperfect world treaties are only valid so long as it suits the top Russians. Much was made of this point in yesterday's debate in your Lordships' House.
I suggest three reasons why a worthwhile agreement is improbable. First, there is the matter of verification. One cannot see from a satellite what is being made in a chemical factory. Regular inspection of such factories would be essential—but can your Lordships envisage the Russians allowing an inspector into a chemical factory in Russia when he knocks on the door? Secondly, many industrial and agricultural chemicals are in any event lethal and not dissimilar to those intended for use in war. I am no chemist, but the opening or closing of a few valves might quickly change the end product.
Thirdly, and most importantly, why on earth should the Russians be prepared to surrender their 300,000 tonnes of military chemicals when we have none and the Americans have a much smaller stock of aged chemicals of doubtful value?
Very senior American and British officers—namely, General Rogers and General Sir Martin Farndale—have both publicly stated fairly recently that from the military point of view they would like to have "a chemical capability". It is therefore a political decision which denies us this deterrent. A decision in favour of a chemical deterrent will not win votes, but it would be a responsible decision. The party on whose Benches I sit prides itself on being responsible; sometimes it has to make unpopular decisions. It faced up to the decision to maintain our own nuclear deterrent, and it faced up to the decision to allow the Americans to base cruise missiles in this country.
When he comes to wind up, will my noble friend the Minister tell this House how much longer the Government are prepared to let the present negotiations drag on before they make the decision to provide a chemical deterrent, or better still, a joint decision with one or more of our ancient alies?
5.31 p.m.
Lord Mayhew: My Lords, there are a number of special reasons for being grateful to the noble Lord, Lord Reay, for introducing this subject. First of all, I agree with the noble Earl, Lord Fortescue, that this subject is far too little debated. It is extraordinary to contrast the amount of discussion and debate that there has been on nuclear weapons and nuclear disarmament compared with the equally apocalyptic concept of chemical warfare and the need for disarmament. We should also be grateful because there are a number of points of straight information which the Government can give us, and which we need. There are a number of grey areas in this sphere which need clearing up. I look forward to some specific answers to specific questions from the noble Lord when he winds up.
The only complaint that I have against the noble Lord who introduced the debate relates to the terms of this Motion:
"To call attention to the threat posed by chemical weapons, and the case either for a balanced and verifiable ban on such weapons or for the possession by NATO of a credible chemical deterrent".

1159
This was a very balanced and statesmanlike statement, but his speech was quite a different speech. His speech was the case for despairing of the disarmament discussions and for building up a large new chemical warfare capacity by NATO. I did not agree, and I do not think my noble friends would agree, with the balance and basic meaning of the speech of the noble Lord.
Yet I must say that there are a number of points of information which will need clearing up before we can reach quite definite conclusions. As I understand it—and the noble Lord, Lord Reay, did not suggest this—the question is not whether Britain should manufacture its own chemical weapons. I do not think anyone suggests that at this time. Certainly the Government have given fairly definite assurances that this is not their policy. I note that quite recently it was stated by the Government, "We have no plans to acquire chemical weapons". Perhaps the noble Lord the Minister will reaffirm this. Possibly he can reaffirm it in a more definite manner, because on the question of biological weapons the Government stated, "In no circumstances would we consider developing, possessing or using biological weapons", which goes a long way further. Perhaps the noble Lord the Minister can guide us on this point.
Perhaps the noble Lord can also guide us on the facts that there are no plans to store in this country new American chemical weapons. I do not think this was raised or recommended by the noble Lord who introduced the Motion. The Government can and should give us an assurance on this point.
The British reply to these American representations is very important. Recently, we have had a visit from a high-level commission sounding out European Governments as to how far they support or oppose the plans of President Reagan to increase the chemical warfare capacity of the United States. With Congress divided on this—on three occasions in the past Congress has turned down the President on it, and it is coming up for a fourth time quite shortly—there is no question at all that the reply of the British Government to the representations made will be extremely important. When the noble Lord the Minister winds up, will he tell us what the reply was of Her Majesty's Government to the United States visiting commission? We are entitled to know this. It is a matter of great importance.
It is argued, and it is true, that the Soviet Union has a sizeable chemical warfare capacity. How great again we do not know. The figure of 300,000 tonnes was mentioned by the noble Lord, I think, but we do not know. Making the point to the noble Lord and to the noble Earl, if it is so impossible to discover the details of chemical warfare capacity in Russia for verification purposes, how do we come to have this figure of 300,000 tonnes? Perhaps the Government could tell us what is Her Majesty's Government estimate of the Soviet capacity for chemical warfare.
I say this with regret as a supporter of NATO and the Atlantic Alliance, but we must recall that on major issues of arms control and disarmament and the military balance we have been badly misled by United States information in the past. I do not know how many speeches in favour of NATO I made in the
1160
1960s and the 1970s based on a totally false American intelligence report of the number of Soviet divisions in Eastern Europe. No-one denies now that this was grossly exaggerated. Similarly, we all know now—
Earl Fortescue: My Lords, will the noble Lord, Lord Mayhew, allow me to say that the figure of 300,000 tonnes was the figure given in last year's Defence White Paper.
Lord Mayhew: Yes, my Lords, and I am asking the Government to explain it. I believe there was one estimate of 700,000 tonnes and another of 300,000 tonnes, and a median figure was taken. Would the Government assure us that this is not the kind of basis upon which they have reached the figure of 300,000 tonnes? We were told about the use of poison gas by the Russians in Afghanistan and by the Vietnamese Government in South-East Asia. This had a considerable impact on public opinion. I was myself influenced by that. But I now think that was untrue. Those statements were put forward by the President himself, and were untrue. I ask the Government again: what is the view of the Government? Do the Vietnamese Government use chemical weapons? Are the Russians using them in Afghanistan?
We sent out a committee of British experts from Porton Down to look into these allegations. This expert committee has never reported. It was sent out two years ago. Why has it not reported? It did not take long to establish the use of chemical weapons in the Gulf. This is another question which the Government can and should answer. We hope it will be answered this afternoon. Why has the committee of experts which went to investigate these allegations not reported? When will it report?
Viscount Trenchard: My Lords, the noble Lord, Lord Mayhew, knows very well the difficulties of a Government in stating their sources and estimates. Does the noble Lord recall that since 1981, anyway, to my certain knowledge—having answered for the Government on this question—the estimates have been above 200,000 tonnes, of which a great deal is stored forward, and have now risen to 300,000 tonnes? I think the estimates have been completely consistent. The noble Lord knows as well as most people how carefully those Government estimates are prepared.
Lord Mayhew: My Lords, let us hope that the Minister will show us the basis on which the estimate is made: not the source, but the basis.
The second point made by the noble Lord was that this was only modernisation, and modernisation is needed. That, it is said, is what it is. But we need to look a little closer, first of all at the existing American stocks of chemical warfare weapons. I think it is agreed that they are holding about 30,000 tonnes of chemical weapons in Germany at this time. It is true that this is old, and that the most recent was made in 1969, as the noble Lord said. But that is not to say it is not an effective deterrent.
A high-level United States committee went into this matter in 1983. It went into the amount of it and into the condition of the stock, and it came to the conclusion that it is a credible deterrent. After all, if it is a credible deterrent, that is as much as is needed.

1161
There is no case for building up stocks of chemical weapons in the same way as has been done with nuclear weapons—far beyond the need for an effective deterrent. Therefore, is it not self-evident that these stocks will for many years continue to perform the function, which the noble Lord asked for, of an effective deterrent?
I recall the word "modernisation" often being used by the Soviet Union in connection with the SS.20s. "Oh", they said; "we are just modernising our intermediate range nuclear weapons". What they were doing was replacing obsolete intermediate range weapons with weapons of a vastly superior kind. It is the same case here. These new weapons are a major chemical change. They are a big escalation in the nature of chemical warfare. To dismiss it simply as modernisation is very misleading.
The noble Lord's final argument was that we needed to modernise our chemical warfare capacity as a motivation for the Russians to negotiate seriously. That may well be so, and I have often argued in favour of it. One of the major arguments against unilateralism is that one must give a motive to the other side to negotiate seriously. Yet the objections, the stumbling block, in these disarmaments negotiations comes from the Soviet resistance to intrusive inspection. No doubt it is often used as an excuse, but the fact is that in the whole range of disarmament and arms control discussions it is the intrusiveness of proposed inspection methods which stops the Russians from agreeing.
It may be that they are also not seriously negotiating because they think that our chemical warfare capacity is weak. That is not true, but that may be their reason. Frankly, I think it is more likely that it is the Russian paranoid dislike of people intruding into what they regard as secret. As the noble Earl said, they will never agree to people knocking on the door of their chemical factories. That is nothing to do with the so-called weakness of the NATO chemical warfare deterrent: it is, I agree, an old Russian habit of not liking foreigners and not liking them prying around. Therefore, we must take with a certain reserve the argument advanced by the noble Lord that we would be increasing Russia's willingness to make concessions by going ahead and increasing our chemical warfare capacity.
This is a very difficult subject and I am certainly not going to be dogmatic about it, but there are one or two aspects which seem clear to me. First, if there is to be a Western capacity for chemical warfare it ought to be a NATO capacity. It should be commanded by NATO and not by any individual NATO country. It is anomalous that there is no NATO chemical warfare capacity. It is a strictly national capacity for the United States. That is very strange, and it was stated by, I believe, Mr. Stanley in another place last month. I ask the Minister: what is the authority for the United States national stocks in Germany? It does not arise from the NATO treaty, and certainly not from the German Treaty. By what authority does the United States hold its stocks there?
I noticed that the legal right of the United States to hold stocks in Germany is being contested by the West
1162
Germans in the German courts. I should like the Government to explain the basis and the authority on which these stocks are held, because it should be a NATO capacity with political consultation within NATO about the use of chemical weapons. The use, or threatened use, of chemical weapons is a matter of catastrophic importance to all the European countries. Indeed, it is of more importance to the European countries than to the Americans. As the noble Earl pointed out, the United States is not so vulnerable as Europe to these horrible weapons. Therefore, why is there no political consultation before the use, or threatened use, of these weapons?
I notice from this morning's papers that SACEUR, General Rogers, is quite rightly demanding—and I entirely agree—that this should be a political decision to be taken after political consultation by NATO members and not by himself, as military commander, and not by the United States independent of its allies.
The next aspect that seems clear to me—and I have touched on this point already—is that if there is to be a NATO chemical warfare capacity it must be the minimum deterrent needed to deter. On no account must it be looked upon as a substitute for conventional weapons, and on no account must it be considered as a kind of small step of escalation between conventional weapons, on the one hand, and nuclear weapons, on the other. The use, or threatened use, of these weapons would have an immediate escalatory effect.
I very much agree with the noble Lord, Lord Rea, that it is far too early to despair of the discussions in Geneva. I swear that I am not being naïve about this. I think that the noble Earl will find that the Government will have a good answer to the arguments he produced about verification. It is precisely on those difficulties of verification about which he talked—the difficulties of ensuring that commercial stocks are not used for military purposes—that the British Government have done exceptionally well in putting forward proposals for verification which would cover the points made by the noble Earl. I congratulate the Government. They have done extremely well in these discussions and negotiations about chemical warfare.
Our representative, Mr. Luce, has shown remarkable patience and skill. He has won a well-deserved reputation among the neutrals, and, I believe, with the Russians, for his conduct at these negotiations. For heaven's sake do not let us prejudice the efforts we are making there. If Britain now takes a tough line—with great respect, the kind of line which the noble Lord, Lord Reay, took in his speech—we shall be prejudicing what is a constructive and still a possible proper way of handling the matter. Despite his speech, I am sure the noble Lord will agree with me that it would be much better to have a watertight, verifiable ban on the use, production and storage of chemical weapons. That is what he would like, and I beg him not to despair too soon.
5.48 p.m.
Viscount Mersey: My Lords, I should like to thank my noble friend Lord Reay for initiating this so far exceptionally interesting debate; and it was particularly interesting to hear the noble Lord, Lord Mayhew. In my book, at least, the facts of life about chemical

1163
warfare have already been well rehearsed by my noble friends Lord Reay and Lord Fortescue. The massive Soviet capability, however big it might be—I agree that estimates vary—against NATO's inability results in a missing link, as it were, in the flexible chain of response, and in turn results in the near certainty that any attack on Western Europe will be a chemical attack. That is a fact of life acknowledged by all ranks down from SACEUR through to every lance-corporal. It is the one example of unilateral disarmament practised by the West and it has not worked.
But my Government are on the horns of a dilemma. On the one hand, to put it crudely, there are no votes in chemicals; but on the other hand, protection against hostile chemical attack is expensive and inefficient.
My noble friend Lord Trefgarne knows better than I that, as my noble friend Lord Reay said, the efficiency of a fighting man wearing a NBC suit is reduced by half. He knows too that decontamination of military equipment by steam hose is a process too laborious to be undertaken at the height of battle. He would I think agree with a marine gunner who said to me, "If it came to the crunch, we'd fight dirty. There'd be no time to do anything else".
Yesterday some of us were on Salisbury Plain and another inefficient element of the NBC suit was rubbed into us with a vengeance. A company of Grenadiers was under gas attack and the company commander yelled out, "Who is that idiot in the Land-Rover? Get him for me, Sergeant Major". The so-called idiot was in fact that company commander's forward observation officer from the Gunners. It would have been even more awkward for the company commander had it turned out to be the brigadier.
Seriously, yet another disadvantage of the NBC suit and gas mask is that it is next to impossible to lead men from within it, as it were. A leader must be able to communicate and he must be identifiable. Both of those are very difficult from behind a gas mask. There is too the disadvantage of the short life of the NBC suit. After only a few hours, I understand, it is ineffective and has to be changed. Presumably troops would have to be pulled out of the front line and re-equipped, which is a considerable logistic complication.
I think that all that could be avoided if we had chemical weapons. As the noble Lord, Lord Rea, has already said, both sides had chemical weapons in the Second World War and neither side used them. He elaborated and said that perhaps things would be different in a third world war. I beg to differ on that point but perhaps not in this Chamber. Maybe afterwards I could have a word with him about that.
As I said, I see the Government's difficulty. I can imagine the sort of press that they would get if they were to manufacture blistering agents and nerve gas. It would indeed be unacceptable to the British public at the moment. But I believe that were the public totally aware of the chemical threat they might accept a chemical deterrent, and surely there will be a golden opportunity to make them so aware in the Civil Defence exercise, "Brave Defender", this autumn.
I understand that the scenario for that exercise is a non-nuclear attack in this country. Surely the attack will include chemicals. It would be unrealistic if it did
1164
not. No one could seriously imagine the Warsaw Pact attacking with high explosive only, since it has nothing to lose at the moment by adding chemicals to the attack. I admit that I am not entirely clear as to the scope of "Brave Defender", and I should be grateful to my noble friend if when he comes to sum up he could outline the scenario for it.
But I should have thought that in order for "Brave Defender" to put across the chemical facts of life to the public the exercise should be nationwide and not confined clandestinely to military training areas. If it was nationwide, the public would see all over the country, soldiers in gas masks, surely the public would then ask, as my noble friend Lord Fortescue said, "What about us? Where are our gas masks? Where are our children's gas masks?". I think that the public would notice another strange inconsistency which would be that the troops would be wearing gas masks but the police would not and nor would the ambulance-men and the firemen. How would the public react to that? Perhaps people might ring the Ministry of Defence which would in all honesty reply, I believe, "Certainly, this is the position that we are in and this is what we think will happen as the Warsaw Pact has chemical weapons and we do not".
I can offer a tentative solution to my noble friend Lord Trefgarne on what I call the grave chemical dilemma. It is to use "Brave Defender" as a public relations exercise—as it were, to shout up and down the country that chemical unilateral disarmament has not worked and that the only solution open to us now is to have our own chemical deterrent.
5.54 p.m.
Lord Gisborough: My Lords, I do not think that it is necessary to go into the Soviet capability because that is well enough known. I do not think that it is necessary either to go into the NATO lack because that is also well enough known. The question is: would chemical weapons be used in a war that we envisage? With training for chemical warfare by the Warsaw Pact, with the fact that it treats chemical warfare as conventional and with its stocks, the ranges at which it can deliver such weapons and the modernisation of its chemicals, there is no doubt in my mind that it would use such weapons as part of its enormous amount of offensive weaponry—far greater than it needs for its defence.
Nobody thinks that there will be a sudden attack on us tomorrow because no one wants war. We do not want it and nor do the Soviets. They want to achieve their objectives without war. But of course we come back to the political situation which we cannot foresee but when they might find themselves making a decision whether for a political reason that we also cannot foresee to go forward into Germany. If we do not believe that, we can disband NATO altogether. I believe that the chemical imbalance that exists would strongly influence them on any decision that they might make towards going forward. NATO could use only the nuclear response if it wanted to stop that attack, and that could so easily lead to escalation.
First, I believe that our lack of chemical deterrence increases the likelihood of a nuclear war. Obviously all politicians wish to do all that they can to stop wars and chemical war in particular, so we have for a long time

1165
been talking about an agreement. It is a nice thought to have an agreement that nobody uses chemicals. But personally I think that such an agreement, even if it were achieved, would be thoroughly dangerous. There is not the slightest doubt that if there was an agreement, both sides would make chemicals immediately during a war in case the other side broke its word, which it almost certainly would.
Anyhow, when has a weapon ever not been used because the other side has not had it or in consideration of the other side? One can look back to Hannibal who used elephants. He did not decide not to use them because the other side did not have them. In more modern times the United States used the nuclear weapon and was not debarred from that by feelings for Japan.
Lord Kennet: My Lords, the United States of course refrained from using nuclear weapons in consideration of the fact that the Vietnamese did not have any.
Lord Gisborough: My Lords, I accept that; and we did not use nuclear weapons in all the affrays in which we have been involved; but the situation was utterly different, surely.
I do not think that there is any incentive whatsoever for the USSR to come to a bargain on chemical weapons because it has such an advantage. That is why the talks have been going on at what has been described as a snail's pace. I do not think they will ever mature. It is of advantage to the USSR to keep those talks going and achieve absolutely nothing. The British influence in those talks is negligible because we do not have any chemicals to give away.
Even if agreement was achieved, the question would then be verification. Would that be possible? As has already been said, chemical weapons are easy to produce in normal chemical factories with very little difference in the existing processes. They are quick and cheap to produce from standard chemicals. They are easy to conceal once one has them. Chemical constituents can be put into almost any weapon, whether it is a bomb, a shell or a missile. I think that such an agreement would be totally impossible to verify. It would be impossible to verify whether the stocks had been destroyed or whether there was lack of capacity to manufacture. There is a suggestion of random inspections, and I think that the Russians are suggesting a four-week warning. The idea is so ludicrous that it just is not true. Of course, even if that were achieved there would be no control over other nations. We see how Iraq has quickly made her chemicals. If we do not want chemicals to be used, and if we want to deny the Soviets of their advantage, it is far better to possess our own chemicals, to notify the Soviet Union and thereby deter them.
The noble Lord Lord Rea asked: when did armaments achieve disarmament? Are we really after disarmament? Surely we are after peace, not disarmament. Any agreement on verification would give a false sense of security and would be worse than useless, whereas if we possessed the chemicals we would then reduce the Soviet advantage and the risk of attack. It is very much better to have the chemical option than the nuclear one.
1166
The reason why we cannot have chemicals of course is that the general public will not stand for it. We have this dread as a result of the first war where there was that terrible slaughter of all nations through gas; but we must remember that that was with static trenches and with either no protection or else very crude protection. Memories are so awful that there is a quite reasonable public abhorrence and therefore refusal to countenance our own making or holding of chemicals. I think the situation is now totally different. The chemicals obviously are far more lethal, but we now have mobility which we did not have then; we have protective clothing which we did not have then; we have pressurised tanks; we have dispersal. There would be very, very many less direct casualties from the use of these more lethal gases.
A severe handicap in the fighting of the conventional war would occur whereby our supply dumps would be compromised, our movements would be slowed down, and just the threat of gas would have a serious effect on the performance of our troops who would have to fight in their "Noddy suits". Meanwhile, the USSR troops—the Warsaw Pact troops—would not have to fight in their suits unless they were actually going to use chemicals. Of course, if we had our own threat, then they would have to fight in their rubber suits. Their own rubber suits being not nearly so good as ours, they would suffer stress very quickly and would not be able to carry on the battle.
Furthermore, if one compares the damage of the chemical option with that of the nuclear, there is obviously far less damage with the chemical one. There is a far greater death rate with the nuclear option. With the chemical option you can at least eventually go and rescue people, whereas with the nuclear one there is no rescue. Without chemicals there is a very serious danger of escalation to nuclear. I think that the chemical option is not nearly so bad as the nuclear option on the battlefield. When our own troops are gassed and we are unable to retaliate, the general public will then say it was anybody's fault but their own; they will blame the politicians. The general public have to face the facts now before it is too late.
6.5 p.m.
The Earl of Cork and Orrery: My Lords, I join wholeheartedly with the noble Lord, Lord Mayhew, in applauding the action of my noble friend Lord Reay in introducing a long-overdue debate on this enormously important subject, about which we have talked a great deal too little. It is also possible to talk rather too much, I suspect, and I will try not to do that—by which I mean that it is a mistake at this stage to get bogged down in details of technical minutiae about which I have the advantage of knowing practically nothing. I will confine myself to the broader sweeps of this matter and, goodness knows, they are broad enough.
My Lords, the Motion my noble friend has put down addresses itself to two alternative propositions: firstly, the verifiable treatment and agreement; and secondly, the credible chemical deterrent. This matter of the verifiable inspection and agreement has been referred to by almost every noble Lord who has spoken. It is one of the things that the Government go on about to an astonishing extent. I do not understand it. It is

1167
perfectly true that the Russians will always say "No" to anybody who comes in. I should, if I were a Russian myself and had people who wanted to inspect our factories, find it a great nuisance. Supposing suddenly the Russians were to change their minds. I understand that Mr. Gorbachev is a man with a sense of humour, to some extent. Supposing he were to see how amusing it would be to say "Yes, come and inspect our factories in which you think we might make chemical warfare agents. How many inspectors would you like to send?" My noble friend Lord Trefgarne might like to consider how many he would say in his answer. What would he say: three or four million?
Chemicals can be made in the bathroom almost, or in a potting shed at the bottom of the garden; they do not need vast factories as do tanks or aeroplanes. They can be made with the greatest simplicity over the whole of the Soviet Union, anywhere from Siberia to the Urals, from Moscow to Outer Mongolia. You can detect them in no other way than by going and looking at them. When you go and look at them what are you looking for? What do you find? The idea of inspecting any such thing is pure pie in the sky; it is absolute nonsense. I do not believe that the Government think it is on at all.
Unless the Government want to fall flat on their face, I hope they will not press the Soviet Government to the point of saying "Yes, come and have a look and see what you can do. Send us three or four million inspectors." Let us forget this nonsense about verifiable inspection; it simply is not on.
What then do we want instead? We want a credible chemical deterrent. There are all sorts of reasons for thinking this a good idea, but just one rather minor one which—perhaps needlessly but rather impishly—I should like to get out of the way. My noble friend Lord Mersey and one or two others have said something about the so-called "Noddy suit"—what the soldiers, sailors and airmen would have to wear. As my noble friend rightly says, this is the NBC suit which they have to wear, and it would be nice to get rid of it by not having to defend oneself against chemicals.
My Lords, NBC stands not for "no bloody chemicals" but for "'nuclear, biological, chemical" and if you do away with the "C" for "chemical", you still have to defend yourself against the nuclear and the biological attack. You continue to wear the suit as thought nothing had happened. There is no advantage in that.
On the general proposition of the chemical deterrent, I advance this point of view. Nobody else has said this and perhaps nobody will pay any attention to what I say, but I believe that the nuclear deterrent is the deterrent to all war, including chemical war. My noble friend Lord Fortescue has mentioned the possibility that if we had no chemical deterrent the chances of war escalating up to the nuclear stage would be increased. I believe that that is what he said. Yes, my Lords, we can all see that, and the Russians can see it too. The absence of a chemical deterrent on our side is itself an inhibiting factor against enemies using such a weapon: for the very reason that we have no deterrent against their use of chemical weapons, they know that our deterrent is that much more likely to turn out to be nuclear.
1168
Therefore, I do not think that we need a chemical deterrent. I think we have it against all wars. It is my personal belief that all war is out of the question anyway, for the simple reason that no nation, either deliberately or by accident, is ever going to go to war against another nation that has a nuclear capability.
6.9 p.m.
Lord Kennet: My Lords, I have nothing very new to say after the excellent speech by my noble friend Lord Mayhew. However, I want to discourse upon one or two of the same facts, and especially the same questions. In yesterday's debate we were reminded of the immortal words of the Bellman:
"What I tell you three times is true".
I have found another truth about this House: that what I ask you three times is more likely to be answered. I have a Question down in two or three weeks' time. I readily promise here and now to withdraw it if the Minister can answer it in this debate, as my noble friend Lord Mayhew has already asked him to. It concerns NATO control of chemical weapons in Germany.
General Rogers, of SACEUR, is quoted as saying, only a couple of months ago, the following words:
"NATO nations have not told me what role they want to play in the decision on using chemical weapons. Until they do, they receive only a copy of my request to the President and that is not right".
Indeed it is not right. That is the sitution described from the horse's mouth at the moment. We shall know no more about the use or threatened use of chemical weapons in war than seeing a copy of SACEUR's request to the President. That is our fault because we have not asked any more. It is indeed time for a debate. It is time to air the subject; it is time to air it in all its ramifications. Our worry rests wholly on the supposition that the Soviet Union had a very large stock of chemical weapons and they are very modern. We know what the American one is like. We know it is nearing the end of its life. We know its size. We know that it is not being replaced. We are now invited to base our policy on certain alleged facts. Before we do so, we must assess the degree of certainty which attaches to those facts. It would be a grave mistake for the Government, even in this House, to seek to persuade by the mere repetition of "three hundred thousand tonnes".
Three hundred thousand tonnes of what? How many substances, of what proportions, are there in the total stockpile? Three hundred thousand tonnes carried in what munitions? What proportion in shells? Shells of what range? Rockets of what type? Bombs carryable in what kind of aircraft and dispersed where? What may be deduced about operational plans from the dispersal pattern? How old are the alleged munitions? What is the rate of replacement of the older munitions on the Russian side? Without knowing something about these matters, we cannot responsibly take any decision about our right course.
There is another, even more important, fact. In respect of the answer to each of those questions, what degree of certainty attaches to it? This involves an examination of the source of our information. It involves an assessment of the probable reliability of the original source, whether it is an agent on the

1169
ground or whether it is the interception of signals traffic, satellite observation, or other forms of remote sensing. If that information comes to us through means which are not under our national control, it involves an assessment of the degree of reliability of the informant in the allied government who has given it to us. All these matters have to be assessed and a result has to come up at the end.
The present environment is not one in which we can automatically rely upon American estimates of Soviet armaments. That is not only because they differ widely according to which part of the American administration is tapped but also because there is a suspicion that those who have good reason to believe that the level is x are often sat upon by their superiors and ordered to say that it is 3x.
The Government can help us greatly about this. They obviously do not know everything but they know a great deal more than anyone else in this country. They should divulge to the people what they know, together with estimates of possible error, before taking any further steps.
I went, as did many other noble Lords, on the great exercise, Exercise Lionheart, last autumn. I saw our troops running about in those appalling suits which prevent them not only from fighting but virtually from breathing, walking or thinking. I fully agree with the many noble Lords who have said that it would be idiotic to allow the other side in a war, even a confined conventional one, to call the tune about when we had to put on those suits without our ever being able to call the tune about when they put them on. They do not have to use the chemical weapons to make us put them on; they have only to look as if they will. Of course they will choose the trickiest moments to do so, when our troops are carrying out the most difficult tasks in the hottest weather. It gives them an immense tactical advantage.
A situation in which they were guaranteed that permanent tactical advantage, would be a militarily disastrous one. However, we are not in it. The American stock is still there. All we know is that it is smaller (we do not know how much smaller) and older (we do not know how much older) than the Russian stock. We are told that it will peg out in five years but we have been told many things about different weapons systems pegging out in x years which we do not always believe. We need more facts about that too.
President Reagan has not met with the instant approval of his own legislature in his plans to counterweight the Soviet stocks. As my noble friend Lord Mayhew has reminded us, he has been turned down three years running. He is coming up for his fourth attempt, asking for 1.4 billion dollars. Other presidents before him have been turned down, as, for example, in 1974; the process goes back that far. The American Congress now remains to be peruaded that it will be right to build up the United States stocks. Later on, it may be persuaded. However, at this stage in the attempt to reach an agreement, the American Congress remains to be persuaded. How much more will the Parliaments of countries which are likely to be gassed in a war remain to be persuaded that every stone has been turned in the pursuit of an agreement!
1170
There has been a recent flurry of activity. It has been alleged that in the long run there are American plans to build chemical warheads to place on the cruise missiles which are under United States control in this country. Will the Government say something about that? It is not quite enough for them to say, "We know nothing of it", or, "It is a hypothetical question". If they were to hear anything of it, what would they say? If they were asked to do it, what would they say? Can they say now that they would say, "No"? If not, why not?
One can go too far with the hypothetical question business in this war and peace planning. It may sometimes get up and hit us afterwards. If we have been saying that everything is hypothetical, we may find that we are overidden or outmanoeuvred by someone against whom we wish we had gathered our friends beside us earlier on. This can be done with a little frankness. On 11th April there appeared a now famous report in New Scientist about the visit of the so-called "blue-ribbon" commission, which Lord Mayhew also mentioned, the Stoessel Commission. That was set up by the American Executive in order to prepare the way for their renewed attempt to obtain the money from Congress. Much Congressional opinion is that it is packed with the friends of chemical weapon modernisation. This commission came to London. The New Scientist report said that at a working lunch British officials gave them a green light for the parking on our soil of a new generation of American chemical weapons.
The visit was followed by a flurry of denials. The United States embassy said it was absolute rubbish. The Government said that it was not so but, in their usual measured manner, said it was a hypothetical question to ask what was so. The story is still going round. I hope that we can tease more definite words out of the noble Lord, Lord Trefgarne, this afternoon. It could only do good if we did.
I am not saying that the Government were wrong if they did give the green light. I just think we want to know. To use the immortal words, I think we should be told. Is it true, as has been alleged, that there is already a generic British commitment to holding—providing a parking place for—this new generation of binary weapons? Obviously, binary weapons are much better than the old sort. Anybody would want them, if we have to have the damned things at all.
Over the last two years, as many have said, the British Government have played a useful role. We have put down a whole succession of papers; the last only last week, going into every sort of detail about the constitution of the proposed international authority to supervise the banning of the production of nuclear weapons and the destruction of existing stocks with verification and all that. Everyone agrees to an agreement. The Russians agree to an agreement. All the countries agree to an agreement. But nothing happens. There is not even very much abusive propaganda about it. This is in marked distinction to the nuclear weapons reduction talks. The whole chemical weapons question is typical of the terminal convulsions of the nation state system, if you like. In some parts, you do not see the convulsions. It is a quiet

1171
area in the universal earthquakes besetting nation states facing a future of destruction or not.
It may not, in the long run, be very much more use putting forward beautiful detailed plans, launching model ships with every ventilator and every piece of rigging in place, if they do not come back again in some form. The Government, I believe, should tell us—this is what I should hope that we, my noble friend Lord Mayhew and myself, would do if we were in Government—what is their assessment of the fact that the Russians agree to an agreement, that we launch draft after draft and that we get nothing back. Are we pressing them too hard? Are the details simply alarming in their eyes? Or is the noble Lord, Lord Reay, right that they are playing it along in order to conserve their advantage as long as they can?
In conclusion, I should like to utter a plea to the Government—"Don't do it yet"—by which I mean, "Don't yet agree with the United States to park the weapons here if they build them. Don't agree to go along with the renovation of those stocks yet". It is wrong to answer deployment with deployment until you are perfectly sure that every channel of negotiation, secret, semi-secret, confidential, private, public, polite and abusive, has been tried and worn out. If anyone doubts the truth of that, I would say, "Remember the story of the installation of cruise missiles in this country." If the Government go to the British Parliament and people with a chemical weapons modernisation programme, even a NATO one, that is as ill-prepared as the one in respect of cruise missiles, they have only to consider the difference in public horror of chemical weapons and public horror of nuclear bases, of which we have experience, to realise how much greater are going to be the political difficulties.
6.23 p.m.
Lord Boston of Faversham: My Lords, I should like to join the noble Lord, Lord Kennet, and all other noble Lords who have so far taken part in the debate in saying that the noble Lord, Lord Reay, has performed a very valuable service in raising the matter tonight, not least because it is clearly a good moment to do so with the resumption of talks on chemical weapons in the 40-nation conference on disarmament in Geneva earlier this year and the further initiative taken only last month on 12th March by Her Majesty's Government when the Minister of State at the Foreign and Commonwealth Office, Mr. Richard Luce, tabled his new practical proposals on verification. I am afraid that I cannot promise to agree with all that the noble Lord, Lord Reay, said. That he has provided a timely and very useful occasion for this debate is beyond question.
I have earlier had opportunities to pay tribute to the Government for the stand that they have taken so far on chemical weapons. It is right to do that again straight away tonight. I agree very much with the noble Lord, Lord Mayhew, that far too much pessimism has been displayed from the other side of your Lordships' House tonight. In fact, it is rather sad that not a single noble Lord opposite has given support and encouragement to their Government in the approach that they are adopting to this matter. I do not know whether it will embarrass the Minister, the noble Lord,
1172
Lord Trefgarne, too much to appreciate how fully noble Lords on this side of the House have rallied to his aid in this situation. In fact, if he came to ponder for a moment, I am almost tempted to suggest that he has within his grasp tonight possibly a return to consensus politics on international affairs. Perhaps if that was to be the approach, even on just one single aspect of disarmament and foreign affairs, it would be no bad thing.
It is because there has been this display of too much pessimism on the other side that it is right in our view to emphasise what has been done by the Government in furthering the aim of attempting to get international agreement on banning chemical weapons. As stated already tonight—the noble Lord, Lord Reay himself, I think, mentioned it—the United Kingdom abandoned chemical weapons in the late 1950s and certainly by 1959. We have neither produced nor possessed any since. In taking that lead unilaterally and in destroying our stocks and deciding not to produce these weapons, we placed ourselves, as a country, I think it is right to say, in a strong position by occupying what has been called the high moral ground in this whole argument. As pointed out by noble Lords, including my noble friend Lord Rea, we were among the first to join as a nation in signing the 1925 Geneva Protocol to outlaw the use of chemical weapons.
More recently, since 1982 the Government have taken a whole series of steps aimed at eliminating chemical weapons. I shall come back to those steps in a moment. I want to mention at once, however, the step that the Government took just over two years ago in March 1983. It was a particularly significant new initiative in the Geneva talks when Mr. Douglas Hurd, then Minister of State for Foreign and Commonwealth Affairs, tabled proposals that included a working paper on practical verification procedures. Despite what has been said on verification tonight by noble Lords opposite, it cannot be denied, I think, that quite considerable progress has been made over recent years in that direction. Then, in April 1984, the United States presented at the conference a draft convention aimed at banning the development, production, stockpiling and use of chemical weapons. Last month, on the 12th, we had the Government's latest moves put forward by Mr. Luce. It is therefore the case that the Government have an excellent record in the stand that they have taken and the efforts that they have made to try to get agreement internationally.
I come at once to the nature of the threat. The noble Lord, Lord Reay, was right to stress the importance of this threat, as other noble Lords have done. The extent of the Soviet Union's possession of chemical weapons, the figure of over 300,000 tonnes of what was described in last year's Defence White Paper as nerve agent included in those weapons, has already been covered quite sufficiently. As the Defence White Paper also stated, the Russians are adding to their stockpile of chemical weapons. It is clear that this enormously outweighs the amount possessed by the United States. There have been estimates given tonight and estimates given elsewhere ranging between 30,000 and 50,000 tonnes. I agree with noble Lords who have made this point. It needs to be emphasised that these are ageing stocks and that the United States stopped manufacturing chemical weapons in 1969 when it

1173
brought in a self-imposed moratorium on production. I note, too, in passing that the Defence White Paper points out that the United States stocks are not declared to NATO. The noble Lord, Lord Kennet, made a very valid point when he questioned how these various stockpiles of chemical weapons, whether on the eastern side or on the western side, are made up.
Whatever may be the precise figures, it is clear that there is an overwhelming balance in favour of the Russians. It would be interesting to know whether there is any recent evidence—in particular since 10th March 1983 when the Government tabled their proposals—that the balance between East and West has deteriorated materially further.
As noble Lords have pointed out, it is not surprising that, whatever view one takes on chemical weapons and the need for an agreement on them, some voices have been raised urging the United States to bring its chemical weapons up to date and, indeed, urging our own country to arm itself with chemical weapons as well. I believe that the noble Earl, Lord Fortescue, and other noble Lords referred to the fact that the Supreme Allied Commander Europe, General Bernard Rogers, has been among those who have pressed for this; and so has our own commander of the 1st (British) Corps, Lieutenant-General Sir Martin Farndale. Moreover, as has been pointed out, attempts are also being made in the United States by President Reagan to get congressional approval of funds to be used for the production of binary weapons there. Therefore, it is true that there has been no lack of demand—and coming from commanders that is a perfectly understandable view for them to take.
However, I also think that it was perfectly understandable and right for the Secretary of State for Defence, Mr. Heseltine, to make the observation—which he made from a political point of view as opposed to a purely military one—when he visited Exercise Lionheart last year that there was a military preoccupation with the use of chemical weapons. He was also right to add that our view in the West is to pursue an arms dialogue at the earliest possible moment and that in the meantime we must ensure that our own troops are protected against the threat.
As regards that last point which was raised by the Secretary of State, I should like to make one comment because it has been raised in this debate tonight by a number of noble Lords. It is right that defensive measures must be taken and that the fullest possible protection must be given to our troops. However, as has been indicated—and the noble Viscount, Lord Mersey, mentioned this, as certainly did the noble Earl, Lord Fortescue, and other noble Lords as well—there are clear disadvantages about the NBC clothing which is being used. Therefore, it is clear that there is a potential threat. The question is: what should we do about it? It is here that I part company with the second solution put forward by the noble Lord, Lord Reay, to equip NATO with, in the noble Lord's words, "a credible chemical deterrent".
If we were to abandon our own present position and start equipping ourselves once again with chemical weapons—and I note what the noble Lord says about NATO having them; but I shall deal with ourselves
1174
first—that would be the start of a new arms race. I agree very much with the point made by my noble friend Lord Rea on that matter. There are few things which would be more likely to cause an immediate deterioriation in East/West relations, few steps which would be more likely to damage the prospects for international disarmament, and few things more likely specifically to arrest the progress—slow though it may be, but it is there nevertheless—towards an agreement to ban chemical weapons. Indeed, that is quite apart from the belief that a step like that would be morally indefensible as well.
Similar considerations apply to a NATO chemical deterrent, too. I take it that that would mean basing them here as well as on the Continent. As we know, there are none here at present for it has been confirmed that no American chemical weapons are here in this country. Therefore, for me the solution does not lie there and I hope that the Government will once again confirm that their view remains the same and that they do not intend to go back on their policy not to produce nor to possess chemical weapons.
Where, then, does the solution lie? Here I must say that I expected to find myself much more in agreement with the noble Lord, Lord Reay; that is to say, with the first arm of his Motion where he calls:
"for a balanced and verifiable ban on such weapons".
However, I was taken aback as much by his presentation of that arm of his Motion as was the noble Lord, Lord Mayhew, when he used the word "despairing" in relation to Lord Reay's approach to this problem. It is here that the Government have been commendably and particularly active. Since 1982 Britain has tabled five sets of proposals on aspects of verification, the most recent of which were those on 12th March last month, with new practicable proposals suggesting, in particular, how the monitoring arrangements envisaged in the earlier 1983 working paper should be applied in practice. I hope that the noble Lord the Minister will give us a report on the recent sessions of the conference and bring us up to date, for little has been heard since Mr. Luce's visit last month or, indeed, about the visit itself.
Last July this country tabled proposals to prevent chemicals made by the civil chemical industries from being diverted for illicit military purposes. Before that, in February 1984, there were Britain's particularly important proposals on inspections upon a challenge that the convention or treaty had not been complied with. However, I think that the most major set of British proposals were those tabled in March 1983, to which I have already referred and about which I should like to ask one or two questions. I am referring to the occasion when the then Minister of State, Mr. Douglas Hurd, presented his working paper called, Verification of Non-Production of Chemical Weapons. At this point, I should like to insert two somewhat more detailed questions. I hope that they will not be too detailed for the noble Earl, Lord Cork and Orrery, but these are matters as regards which one does sometimes have to get down to a bit of detail.
It was suggested in that working paper that members of the committee, or conference as it has come to be known, should supply information on the number of facilities within their own civil chemical industries for producing certain listed chemicals so that it could be

1175
shown that inspection of commercial facilities would not be too burdensome. I wonder whether the Minister can tell us how many and, if possible, which member nations have complied with that request. Incidentally, I note that Britain herself supplied that information about herself in an annex to the working paper at the very time it was tabled two years ago.
Again, it was suggested that the declaration of facilities for producing or storing such chemicals as hydrogen cyanide, for example, should present no problems. I wonder whether there has been any positive response to that idea. I am not asking the Minister for the names of countries but merely about the reaction to that proposal and whether or not it has been favourable. It would be useful to know, partly to get some flavour of the way in which the work is progressing—or not, as the case may be. Even if the Minister cannot answer these specific questions tonight, it would be useful to know whether or not the reception given to Britain's proposals has been generally favourable and positive.
However, before concluding, I should like to raise a much more significant and fundamental point referred to in that working paper and which has been touched upon by some noble Lords tonight. Right at the outset in the opening paragraph of that paper, it states that the discussions in the working group of the conference have shown that:
"it would not be practicable to devise verification procedures which would provide an absolute assurance that the convention is not being violated".
Then it goes on to say:
"On the other hand, a chemical weapons convention must provide for sufficient verification to deter the would-be violator and to provide a degree of assurance against violation by one party which is accepted as adequate by others".
That statement sets out a very important principle in calling for an adequate, but not absolutely perfect, system of verification. I should like to ask the Minister whether it still represents Government policy. I hope that it does. One of the great problems has been, as I think probably nearly all (if not all) noble Lords have acknowledged tonight, how to get an acceptable measure of verification without jeopardising the chances of success in the negotiations for a convention by insisting on something too close to perfection.
The point has been put very well by the Government's disarmament adviser in the Foreign and Commonwealth Office and former head of the British delegation to the Committee on Disarmament (this very conference itself), Mr. David Summerhayes, in an article in the Armament and Disarmament Information Unit Report for November/December 1983, based on a paper he presented at an international conference in Leiden in September 1983, when he said this:
"Having stressed the problem of complexity I want to suggest that in the final analysis a [chemical weapons] convention will only be achieved by taking account also of the opposing principle of simplicity. If there is too great an insistence on perfection and strictness, this will make progress impossible. Those who insist on absolute verification or the widest possible scope may in effect be blocking the way to agreement. The difficulty for the negotiators is in finding a satisfactory middle path, where such exists, and then persuading their governments to be reasonable".
I hope that that approach is the one which commends itself to the Government. I hope the
1176
Minister will say tonight that it does. And I hope that we can all look forward to speedier progress in the Geneva conference on disarmament and that there will soon be a successful end to the search for a chemical weapons convention.
6.42 p.m.
Lord Trefgarne: My Lords, your Lordships will be grateful to my noble friend Lord Reay for giving us an opportunity this evening to debate the appropriate response to the threat posed by the existence of chemical weapons in the world today. Let us be under no illusions. Chemical weapons can be weapons of mass destruction and constitute a particularly abhorrent method of waging war. But they exist, and we cannot ignore them. Ever since they were first conceived, nations have sought to find ways of eliminating the possibility of their use in armed conflict.
Although they did not prevent the use of chemical agents during the First World War, declaratory statements upon the non-use of asphyxiating gases, poison and poisoned weapons can be traced back to the international peace conferences of 1899 and 1907. It was the experience of the horrifying effects of these weapons, which caused tens of thousands of casualties on both sides, which prompted the international community to return to the search for measures to abolish them during the years following the Great War. The result was the Geneva Protocol which was signed in June 1925 and which has since been ratified by over 100 states.
The protocol built upon the earlier pre-war conventions, and sought to prohibit the use in warfare of asphyxiating, poison and other gases and of all analagous liquids, materials and devices, but it did not prohibit the development, production or stockpiling of such weapons. The major powers of the time built up substantial stocks and many signatories, when ratifying the protocol, entered reservations, the effects of which limit it to a prohibition upon first use of chemical weapons.
The Geneva Protocol, coupled with the fear of retaliation in kind, did play a part in deterring the use of chemicals during the Second World War. Almost exactly 60 years later, however, chemical weapons are still with us and continue to pose a potent threat not only to NATO but to all mankind.
I should now like to turn to the specific threat to the Western Alliance. The Soviet Union poses a major chemical threat to NATO. It produces and stockpiles a variety of types of chemical weapon, including blood, nerve and blister agents. Stocks of nerve agent alone are believed to be more than 300,000 tonnes. Soviet troops are well versed in the doctrine and tactics of chemical warfare, and Soviet forces have a variety of means for delivering a chemical attack at sea, on the ground and from the air.
It is very difficult to make accurate estimates, but the United Kingdom assessment is that the Soviet Union, as I have said, possesses a stockpile of some 300,000 tonnes of nerve agent alone. For reasons of security I hope that the noble Lord, Lord Mayhew, will understand that it is really not possible for me to explain how we arrive at this figure. That was a point raised as well by the noble Lord, Lord Kennet.
Lord Kennet: My Lords, will the noble Lord give us as much detail as he can? Is there any hope that he may be able to attach figures about the margin of error, or the degree of certainty, to that figure of 300,000 tonnes? How certain is it?
Lord Trefgarne: My Lords, it is as certain as I can make it, but I hope that the noble Lord will forgive me if I do not go into further detail. I am certain that the noble Lord, Lord Mayhew, with his experience in these matters, will understand the difficulty in which I find myself.
Lord Mayhew: My Lords, I accept entirely what the noble Lord says, and I am grateful to him. Is this a British intelligence assessment, or an American one?
Lord Trefgarne: My Lords, as I said just now, this is a United Kingdom assessment. There are some 90,000 or more specialist Soviet troops responsible for aspects of nuclear, biological and chemical warfare, and Soviet forces regularly train in a chemical environment using real and simulated agents. By contrast, of our allies, the United States possesses chemical weapons, but these are not declared to the Alliance. The United States has not engaged in production of chemical weapons since 1969 and, in consequence, it now has only a limited and ageing retaliatory capability.
So far as United Kingdom policy is concerned, as my right honourable friend the Prime Minister stated in another place on 10th January, we abandoned our chemical warfare capability in the late 1950s. There has been no change in Government policy since then, nor is any change now proposed.
Lord Kennet: My Lords, I wonder whether the noble Lord will bring out one point? He has been most courteous, and I shall not intervene again. The noble Lord told us that the United States stock is ageing, and that since 1969 they have not built any. Can he tell us anything at all about the age of the Soviet stock, or of any part of it? Can he tell us whether some is older than the rest and, if so, how much older, and that sort of thing?
Lord Trefgarne: My Lords, my impression is that the Soviet stocks are current and modern, but I do not think I can go into greater detail than that.
As I said, there has been no change in Government policy since then—that was the late 1950s—nor is any change now proposed. At the same time we do of course keep our defence policy under constant review in the light of the massive Soviet offensive capability, both in chemical warfare and all others.
There is a further dimension to the problem posed by chemical weapons which we cannot afford to ignore. That is one of proliferation. Chemical weapons are not difficult to make and are relatively inexpensive to acquire, certainly when compared to other methods of mass destruction. Developments in biochemistry make possible ever more deadly agents and, as more countries acquire sophisticated chemical industries, so the threat of proliferation will increase unless effective controls can be worked out.
1178
The problem is compounded still further by the fact that some recognised chemical warfare agents, or their essential precursors, are produced in substantial quantities for legitimate and important peaceful purposes. The use of chemical weapons in the Gulf conflict has shown the ease with which industrial chemicals can be misused. Following the United Nations report on the use of chemical weapons in the Gulf during last year, the United Kingdom, together with some of our allies, imposed controls upon the export of certain chemicals. Although this has not apparently prevented the continued use of chemical weapons in the region, it has restricted the availability of precursors.
Time is not on our side. More than 12 states are now believed to possess a chemical warfare capability compared with about six a decade or so ago. Most of these new chemical powers are in the third world, Over the last few years there have been disturbing reports of the use of chemical weapons in South East Asia and Afghanistan and the confirmed use of such weapons in the Gulf war has been widely condemned. Her Majesty's Government strongly condemn the use of chemical weapons whenever and wherever it has occurred. We will continue to do so, but, as more countries acquire this capability, so the likelihood of chemical warfare and the problems of containment will increase.
While I recognise that there are those who, like my noble friend, believe that the present situation may justify the acquisition by NATO of a retaliatory chemical capability, it is the view of Her Majesty's Government and of our NATO allies that the best answer is to work urgently for a comprehensive and verifiable world ban on the development, production, stockpiling and use of chemical weapons. I do not for one moment underestimate the difficulty of reaching agreement upon such a ban, but since the establishment in 1980 of an ad hoc committee on chemical weapons as part of the Conference on Disarmament in Geneva progress has been made, albeit more slowly than we should have wished.
The United Kingdom has played a leading role in these negotiations, and we shall continue to do so. Noble Lords have already recognised that. Since 1982, we have tabled a number of working papers upon various aspects of possible chemical weapons agreements, most of which have been generally well received by all delegations. The most recent of these papers, which was tabled in Geneva on 16th April, proposed institutional arrangements necessary to ensure the effective implementation of the chemical weapons convention. My honourable friend the Minister of State for Foreign and Commonwealth Affairs has addressed plenary sessions of the conference on a number of occasions. On 12th March he introduced further British proposals concerning arrangements to ensure that certain industrial chemicals are not diverted to covert military use.
Among the most difficult problems remaining to be resolved are key questions concerning verification. Confirmation, for example, that civil chemical products are not being diverted for illicit military purposes can only be provided by regular on-site inspection by international experts. There must also be arrangements for special "challenge" inspections in

1179
response to allegations that a party to the convention may not be complying with any of its provisions. We are not interested in any "quick fix" solution. Without adequate verification measures such as these as a guarantee of compliance, any ban would be meaningless.
Unfortunately, although the Soviet Union continues to express public support for a global ban on chemical weapons, and last year accepted for the first time the important principle of some form of on-site inspection of the destruction of declared stocks, agreement has not yet been reached on the more important issues of verification. Such counter-proposals as have been made by the Soviet Union—and these have been regrettably few and invariably unspecific—have been unacceptable to Western security interests. Nevertheless, given good will on all sides, none of these problems is insoluble and we continue to hope that the East will join us in showing the flexibility and determination necessary to bring the negotiations to a successful conclusion.
In view of the record of earlier attempts to prohibit the use of chemical weapons, why should a global ban now be any more successful? It is because on this occasion we are seeking to ban not only the use of such weapons but also their development, production and stockpiling, and to provide for rigorous verification arrangements to ensure compliance. None of the earlier conventions attempted to do this.
Lord Kennet: My Lords, I hesitate to intervene again, but how does that argument work? For 40 or 50 years we have been trying to do that. Why should it be a reason that, because we are now trying to do what we are failing to do, we are more likely to succeed than when we were trying to do what we did succeed in doing in the 1920s?
Lord Trefgarne: My Lords, I did not say that we were more likely to succeed. I claimed that the resulting convention would be more likely to be successful. Of course, we have an existing convention stemming from the 1925 Geneva Protocol which, as we have all seen, has not been particularly successful. It is that lack of success that we hope to correct.
Despite our commitments to a comprehensive and verifiable ban, we remain vigilant as far as the immediate threat is concerned. We place great importance upon the retention by NATO of an adequate defensive capability. Therefore, in parallel with our search for an arms-control solution, we keep defensive measures under careful review in the light of the massive Soviet chemical warfare capability. Substantial investment has been made over many years to provide our armed forces with defensive protection against chemical attack. Improvements are continually being made to keep abreast of developments in the threat, and new protective suits, respirators, prophylactic medicines, agent monitors and detectors are coming into service. Most current warships and armoured fighting vehicles have collective chemical protection arrangements, and our combat aircraft can operate in a chemical environment.
All three services train frequently in conditions which represent effects of a chemical attack. The most
1180
recent large-scale land and air exercise was Exercise Lionheart, which took place on the continent last September, when servicemen of British Forces, Germany, reinforced from the United Kingdom, practised operating under a constant but changing chemical threat. Indeed, a number of your Lordships, including the noble Lord, Lord Kennet, visited that exercise. Although an awareness of the threat, and individual and unit training to counter it, enable our armed forces to operate in a chemical environment, the wearing of protective equipment and the employment of other defensive measures, as many noble Lords have recognised, will degrade their effectiveness, whether or not chemical weapons are actually employed. This places NATO forces at a very distinct disadvantage compared with those of the Soviet Union, who need don their protective equipment only when passing through areas contaminated by their own attacks. Once again it is in our best interests to seek a total and verifiable ban, and thereby to remove even the threat of the use of chemical weapons.
May I now turn to some of the points that have been raised this evening. The noble Lord, Lord Boston, raised a number of points, and I am grateful to him for giving me notice of them. He asked first about the working party set up by my right honourable friend Mr. Hurd in March 1983. My honourable friend (as he then was) the Minister of State for Foreign and Commonwealth Affairs tabled a paper in Geneva on 8th March 1983 on the subject of verification of the non-production of chemical weapons. The proposals contained in the further document on the verification of non-production tabled earlier this year (to which I have already referred) developed the ideas set out in Mr. Hurd's paper, which were further developed in another paper tabled on 10th July 1984.
As for the changes in the balance of forces between the East and West since 1983, as I have said, the Warsaw Pact continues to threaten NATO with a massive chemical warfare capability; and I do not think that I can really add to the figures that I have already given earlier in answer to the noble Lord, Lord Kennet.
As for the response to the working party report, in an attempt to demonstrate that the scale of the inspection of commercial facilities would not be too burdensome, the paper proposed that parties to the negotiations in Geneva should provide information upon the number of establishments in the civil chemical industries which were producing a number of substances which were considered to be key precursors for super-toxic lethal chemicals. At the end of the 1984 negotiations session 11 countries had responded with this information, and when my honourable friend Mr. Luce addressed the Conference on Disarmament on 12th March this year he urged the other states to follow suit.
The noble Lord, Lord Boston, also asked about the degree of assurance provided by verification arrangements. The paper stated that the discussions in Geneva had shown that it would not be practicable to devise verification procedures which would provide an absolute assurance that the convention is not being violated. On the other hand, a chemical weapons convention must provide for sufficient verification to

1181
deter a would-be violator and to provide a degree of assurance against violation by one party which is accepted as adequate by the others. Indeed, my right honourable and learned friend the Foreign and Commonwealth Secretary, speaking to a conference in London in November last year, used these words:
"No system of verification can ensure 100 per cent. that the other side will live up to its obligations. What we need is agreements which ensure that if the other side does cheat or break the rules in a way that threatens Western security, we know this early enough to bring the offender to book and to take appropriate remedies".
The noble Lords, Lord Mayhew and Lord Kennet, asked particularly about exchanges between the United Kingdom and the President's Review Commission which visited the United Kingdom recently. I can tell both noble Lords that the United Kingdom expressed its concern about the chemical weapon threat from the Warsaw Pact. We also emphasised our view that the Alliance should continue as its first priority to work urgently in the current negotiations at Geneva for a total and verifiable ban on all aspects of chemical warfare. We noted that United States moves towards modernisation would underline to the Russians the benefits of reaching early agreement on a total ban. In addition, we underlined the need to uphold NATO's deterrent strategy of flexible response.
The noble Lord, Lord Kennet, also asked me about the basing of chemical weapons in the United Kingdom. I can tell him in the plainest terms that no such request has been received. My noble friend Lord Fortescue asked me about the question of protection for the public, and I believe he was thinking of people other than members of the armed forces. The Government have made it clear in another place that they are examining this question and that Parliament will be kept informed of progress. Indeed, my noble friend Lord Elton expressed the same sentiments when he answered a Question put by my noble friend Lord Mottistone on 18th March last. I would refer my noble friend to Hansard, column 326, on that day, where the Answer which my noble friend then gave is set out in full. The noble Lords, Lord Mayhew and Lord Kennet, also asked about the lack of NATO chemical weapon release procedures, particularly in the light of recent statements by General Rogers. There are no chemical weapons declared to NATO. Political control of the limited United States stocks is therefore naturally a matter for them.
The noble Lord, Lord Mayhew, also asked about the report, which he said has been kept quiet, or so he thought, about the consequences of trichothenes, as I think they are called, being used in South-East Asia. In that connection I would refer the noble Lord to an Answer which was given in another place on 27th February last (at column 206 of Hansard) by my honourable friend the Parliamentary Under-Secretary of State for Defence Procurement, Mr. John Lee. My honourable friend was replying to a Question from Mr. Cohen—
Lord Mayhew: My Lords, would the noble Lord say what the Answer was?
Lord Trefgarne: My Lords, I have the Answer in front of me. The Question in fact went slightly wider than the point which the noble Lord put to me, which is why I did not read out the Answer, since it dealt with other matters as well. I will quote, referring to the particular point which the noble Lord raised, from part of the Answer. It read:
"Investigations into the alleged use of mycotoxins in South East Asia are continuing but we are not yet in a position to state when their results might be made available."
My noble friend Lord Mersey asked about the scenario for the exercise Brave Defender, and whether it would be possible or desirable to include the simulated effects of chemical attack during the course of that exercise. Details for that exercise have not been finally worked out. Again, I answered a Question in some detail on the scenario for Brave Defender recently. Without wishing to go into the detail of that reply, I recall having to say at that time that most of the details were classified and therefore I fear that I am not able to help my noble friend very much this afternoon.
The noble Lord, Lord Mayhew, also asked about the authority for deployment of United States chemical weapons stocks in West Germany. I do not think that he will be surprised when I tell him that it is not really a matter for me: it is a matter for the Governments of the United States and the Federal Republic. I therefore fear that I cannot help him in respect of that question.
In summary, my Lords, Britain abandoned its chemical warfare capability in the late 1950s and that policy has not changed. Nor is any change proposed. We are only too well aware of the dangers of proliferation of chemical weapons and the threat posed to NATO by the massive Soviet chemical warfare capablility. We are not complacent. The Government are convinced, as are our allies, that the best way in which to deal with the problem is to press for a comprehensive and verifiable ban upon these weapons and we shall continue to do everything in our power to realise it.
We shall continue to play a leading part in the negotiations taking place in Geneva. If we are unable to achieve our objectives in Geneva, NATO would have to consider what steps might sensibly be taken to uphold the Alliance's proven strategy of defence through deterrence. I do not think, however, that it is either sensibly or appropriate to speculate here upon what might happen should the Geneva negotiations fail. The achievement of a ban upon chemical weapons remains our aim. It can be achieved; but it will require a proper sense of urgency and dedication from all concerned. There can be no doubt about our commitment. In the meantime, we shall keep our policy under review and continue to take measures to ensure that the necessary protective equipment and training is provided for our fighting men.
7.7 p.m.
Lord Reay: My Lords, I should like to thank all those who have taken part in this debate. I have been very gratified by the general recognition that this subject has not been debated sufficiently and that to debate it on this occasion was timely.

1183
The noble Lord, Lord Rea, whose opinions differ from mine more markedly than does his name, nevertheless understood the point of my argument that chemical weapons were less likely to be used against us and against the populations of Western Europe in the event of a conventional attack if NATO possessed a credible deterrent of its own and, incidentally, we would be less likely to move to a state of nuclear retaliation if there were a credible chemical deterrent, as my noble friend Lord Fortescue argued.
The noble Lord, Lord Mayhew, made a speech which I thought had certain complacent elements within it. He said that, in his view, chemical weapons had not been used in Afghanistan. There is quite a considerable amount of evidence in the recent United Nations Report on Afghanistan which if he reads it, may perhaps persuade him to change his mind on that matter. He quoted General Rogers, quite properly, with regard to the need for political control over the use of chemical weapons but, in the same report, General Rogers was also reported as having pointed to the urgency of the need to modernise the United States chemical deterrent. However, on that point, the noble Lord was not willing to follow General Rogers. He said that he was satisfied that the United States chemical deterrent was quite up to scratch. It is most unlikely to be so. There have been no chemical weapons manufactured in the United States for some 16 or 17 years now and the noble Lord knows perfectly well that there have been immense developments in delivery systems, and so on, during that time. His point of view that the chemical deterrent of the United States has remained adequate is simply not credible.
He made play with the fact that we do not know the exact figures of the Soviet chemical stockpile, which I must say will serve to do little more than encourage Soviet secrecy on the subject—not that the Soviets require much encouragement, of course. It seems to suggest that because we do not know, therefore we should do nothing. That is surely the attitude of the wishful thinker and it panders to the attitude of the wishful thinker.
The noble Lord, Lord Boston of Faversham, said that he was sad to see that so much pessimism had been expressed on this side of the House by my noble friends Lord Mersey, Lord Fortescue, Lord Cork and Orrery and Lord Gisborough, and he commiserated with my noble friend Lord Trefgarne on the fact that he was not getting sufficient support from noble Lords behind him. In response to that, all I can really do is to repeat the words that my noble friend Lord Trefgarne himself quick-wittedly used in yesterday's debate, when he was interrupted in the course of his speech by the noble Baroness, Lady Gaitskell. He said:
"My Lords, I can only say … that I have to take the world as I find it and not as I would wish it to be."—[Official Report, 23/4/85, col. 1032.]
My view is not that the Government should not try for a ban on chemical weapons, but that they should not put all their expectations on being able to reach one. In the latest paper which the British Government deposited in the disarmament conference on chemical weapons, their introductory statement is as follows:
"The United Kingdom is committed to the achievement of an effective chemical weapons convention which will provide satisfactory assurances of compliance."
1184
I do not see how you can be committed to the achievement of a convention when you can reach such a convention only if others agree to do so as well. It seems to me the danger in the Government's position that they put too much of their expectations on being able to reach an agreement.
Personally, I am not despairing, as the noble Lord, Lord Mayhew, said, but I am certainly sceptical about the possibility of reaching an agreement and my view is that there will not be an agreement unless NATO proceeds to acquire a credible chemical deterrent. I know that these weapons are awful and inhumane and I entirely agree with everything that the noble Lord, Lord Rea, feels so strongly about in their regard. I know also that to proceed to their manufacture would be a decision of great political difficulty. Nevertheless, I think that NATO should take it. My Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Prohibition of Female Circumcision Bill
Brought from the Commons; read a first time, and to be printed.

Cultural Heritage: Tax Concessions
7.13 p.m.
Lord Fanshawe of Richmond Lord Fanshawe of Richmond rose to ask Her Majesty's Government whether, in view of the protection which they provided for the contents of Kedleston, Nostell Priory and Weston Park, they have any further plans to save more of our cultural heritage by taking action to make the "in lieu" provisions more effective and attractive, thereby providing further encouragement to museums and galleries.
The noble Lord said: My Lords, I beg to ask the Question standing in my name on the Order Paper. I am particularly glad this evening that my noble friend Lord Teynham will be making his maiden speech and I look forward to hearing his words. He and I, as small boys aged 9 together, spent our time breaking up the heritage and I am rather glad that perhaps tonight we are both trying to save it.
I regret having missed the recent debate on 6th March as I was abroad at the time, but having now carefully read Hansard, I should like to restrict my remarks to one problem concerning our public museums and galleries; namely, the use made of the statutory provisions whereby works of art are accepted by the state in lieu of capital tax liabilities. However, before embarking on this subject, I want to join other noble Lords who took part in the debate on 6th March in congratulating the Government, and in particular my noble friend on the Front Bench, on that most enlightened subvention of £25 million to save Kedleston Hall, Nostell Priory and Weston Park. I wish the National Heritage Memorial Fund trustees every good fortune in a speedy resolution to all the remaining problems associated with and related to these three incomparable historic houses and their marvellous contents.
There has I think been some criticism that the Government failed to resort to saving these houses, at least in part, by means of the "in lieu" procedures. I am convinced, however, that in these instances the Government were right in providing a special cash grant. Having, I hope, given credit where credit is due, I must now voice my concern that the operation of the acceptance of works of art in lieu of capital transfer tax to benefit our public museums and galleries is in desperate need of reform. It appears to many that it is being emasculated in administrative practice.
Several years ago, Parliament wisely decided to alter a vital aspect of the long-standing system for funding the arts and the heritage by setting up the National Heritage Memorial Fund. This reform was welcomed by all political parties and the nation has benefited immeasurably. Sadly, however, acceptances in lieu of tax which are equally important, if not in some cases more important, for saving the heritage have not been significantly changed or re-examined in the light of present circumstances and brought up to date. I should like to ask my noble friend tonight: is the Treasury actively discouraging the use of this far-sighted measure?
Acceptances in lieu of capital taxes involve no expenditure whatever of public moneys, since public expenditure occurs only when cash leaves the public sector and enters into the private sector. A certain unpredictable amount of cash is of course forgone by the Exechequer every time works of art are accepted as payment in kind. There is, however, a finite and relatively small number of works of art which qualify for acceptance in lieu, and it is obviously impossible to know in advance how many and how valuable these may be in any one year, since deaths of owners, happily, cannot be foreseen. Thus in some years a very small loss of cash to the revenue may occur, but in other years a much larger amount would be involved owing to pure chance.
At the present time, the Government appear to be limited to an overall and quite unrealistic £2 million, the amount of tax forgone during one year through acceptances of works of art by all our public museums and galleries under the auspices of the Office of Arts and Libraries. This takes into account the fabric of pre-eminent historic houses and their surrounding land. Admittedly, the Government can justifiably claim that special cases can be dealt with separately—as recently occurred with Calke Abbey—but this is not, in truth, a practical or very satisfactory course to adopt in general.
What is my evidence? I am not alone in the comments that I am making this evening, because in our national newspapers during the past few weeks there have been a whole range of comments made. The Daily Telegraph on 3rd April under the heading, "Tate spends £1 m on painting Gowrie rejected" stated:
"The Tate has paid more than £1 million for Giorgio de Chirico's surrealist painting 'The Uncertainty of the Poet'."
It went on to say:
"The de Chirico was offered by the trustees in lieu of tax, but the painting, valued at £3 million, was refused by the Earl of Gowrie, Arts Minister.
1186
"A Tate spokesman said: 'When such a work is refused, it suggests that the acceptance in lieu scheme is not working properly. This is a book-keeping exercise, and no public expenditure is involved, and the financial transaction is a notional one'."
Lady Elton, who is a kinswoman of one of my noble friends who is a Minister in this House, wrote a very interesting letter to The Times on 10th April in which she said:
"Any ceiling on what can be accepted annually in lieu of CTT (capital transfer tax) adds a desperate hazard to those who are preparing to die responsibly by instructing their executors to offer works of art or pre-eminent collections in lieu.
Many of them are intending to benefit the National Trust by securing for it the goods, chattels and pictures which keep its houses alive, and enhance regional properties by the acquisition of collections inherently necessary to them.
Any one death, or two, could well exceed the new ceiling. Executors will be faced with two options, one of which is to sell on the open market, and the second, chillingly unpalatable, is to queue for the next two years, at six per cent. a year, waiting for a slot in a fiscal year of low mortality and high-mindedness."
I think that is fairly expressive and indicates the feeling held generally and not just by individuals like myself who are not experts in this field.
Recently four leading museum directors were reported in the Daily Telegraph also as saying,
"that the system whereby works of art and historic buildings can be offered in lieu of tax liability is 'no longer workable'."
My Lords, who were these eminent people? They were: Sir David Wilson, Director of the British Museum; Sir Roy Strong, Director of the Victoria and Albert Museum; Sir Michael Levy, Director of the National Gallery; and Professor Alan Bowness, Director of the Tate Gallery. They all say that,
"this procedure is endangering a scheme which has proved to be 'very much in the public interest'".
Your Lordships will see from what I have said already that these quotations indicate that owners, their agents, lawyers and accountants, would not even consider resorting to "acceptances in lieu" when the overall value of works of art to be accepted is so restricted. In addition, bureaucratic delays in the past have been interminable, with interest charges mounting daily. Although the works of art accepted are themselves exempted from all capital tax, the Treasury claws back 75 per cent. of the tax which would have been payable if they had not been exempted.
This practice leaves far too little incentive. The recent Select Committee in another place felt very strongly on this point and recommended a 25 per cent. deduction by the revenue. As I mentioned in my speech in the previous debate on 15th May last year, 50 per cent. may appear rather parsimonious when one recalls that the French authorities deduct nothing at all from tax debtors who satisfy their fiscal obligations by paying their tax in kind rather than cash.
I now want to stress another point which may perhaps have escaped Treasury notice. It is a psychological one. I understand that there are some owners who would prefer that their inheritance should not be sold, even to a museum, in order to provide cash for their tax debts. They would prefer non-commercialisation by way of "in lieu" if the system were properly administered. This is all too understandable when one considers how many people

1187
nowadays are forced to part with their family heirlooms.
The Goverment, however, are to be congratulated on their decision announced in answer to my question before Easter to transfer the administration of the "in lieu" system to that appropriate and knowledgeable body, the Museums and Galleries Commission. But commissioners by themselves cannot work miracles without Government understanding and help. I therefore ask my noble friend as a matter of urgency to look into how the commissioners can be enabled to fulfil their new duties effectively in order that as a result they can help our public institutions up and down the country.
Too many offers of important works of art in lieu have in the recent past been turned down by the Government despite their aesthetic importance. Thus radical reform of the operation of the system by the Government, advised by the Museums and Galleries Commission, is now of great importance. So will my noble friend tonight give me an assurance that he will take a new initiative in this complex matter? The so-called Getty factor ought not to be discounted, and the recent devaluation of sterling against the United States dollar, although there has been a slight recovery in the past 10 days, in which works of art are valued internationally, underlines the seriousness of the situation. I repeat, the expenditure of public moneys is not involved when a work of art is accepted in discharge of a tax liability. Therefore let us get our priorities right and make full use of "in lieu" in order to help retain the very essence of our cultural past.
Finally, since "acceptance in lieu" is of cardinal importance to both owners and museums alike, may I have the firm assurance of my noble friend the Minister that it is not the Government's intention to abolish these provisions? I hope that instead he will follow the ideas that I have set forward today and take steps to make them more attractive and effective.
On Channel 4 News at 7 o'clock on 17th April last my noble friend the Minister was interviewed by a Mr. Sissons, whose first question was:
"Why isn't the tax system—and I am thinking of the death duties provisions—used more effectively in this country to make it more attractive to build up the arts?"
My noble friend the Minister replied:
"I haven't yet succeeded in persuading the Treasury to change the acceptance in lieu. Roughly, you can take a work of art in settlement of tax bills without this being 'on vote' expenditure which is technical, but which creates problems for my museums and for my own budgets and that is certainly a failure, and the only thing to do with a failure is to keep on trying until you get it right."
In his most laudable battle with the Treasury my noble friend will I hope receive ammunition from this House tonight.
7.25 p.m.
Lord Teynham: My Lords, in rising to speak in this House for the first time, I would ask for your Lordships' patience. In return I shall do my best not to be controversial, but simply to support the case of my noble friend Lord Fanshawe of Richmond as strongly and as far as I am able to do this, without incurring the disapproval of either my noble friend the Minister or of anyone else.
1188
In considering the number of "in lieu" transactions that may have occurred already, or which are ever likely to occur at different times, care should of course be taken to notice the changing force and nature of the combination of various factors to which this particular provision always relates. There is the changing level of capital transfer tax in general, the specific percentage of douceur that applies to an exchange, and the calculation which the owner makes between net proceeds after tax, which might well result from a sale on the open market, compared with net proceeds after tax resulting from a deal with the Government. And there is clearly also the part which the changing role of capital gains tax plays in this calculation.
Furthermore, whatever may be the potential impact of taxation itself at a given time and however much this potential impact changes over the years, it might still not succeed in having any effect at all, provided that owners can always remain in good health. And although the latter is perhaps an example of Government doing one thing and the Almighty doing another, there is nothing particularly unusual in that. Both parties may still be on the best of terms with one another.
But just because the purpose of the "in lieu" provision is to help save works for the nation, and because it may have already contributed to a certain pattern of results, that does not have to mean that special status and importance should always be attached to it. Nor does it follow that just because the Government have lowered the ceiling in this tax year below £2 milllion, that at the same time they might not be in the process of using compensatory methods or of discovering better ways in general to protect our cultural heritage.
The question therefore that should perhaps be asked is this: if the Government are now considering for the future the best formula of methods and provisions to protect our cultural heritage, what are the particular benefits, if any, which the "in lieu" provision has to offer? First, there is the problem of works leaving the country. In a previous debate, and in order to allay fears that the country seemed rather hard up, my noble friend the Minister gave the reassurance that the Government were still definitely richer than the Getty collection. And from this reassurance it is good to know that if your Lordships' House and another place ever reach the open market, Her Majesty's Government will be the highest bidder! And although we do not want works to go out of the country in the first place, it is also realised increasingly how fortunate we are in the Getty fund and in other large foreign endowments, not only for the devotion and care which they bring to their collections but also for their interest in countries from whom they acquire, and for their potential willingness, if encouraged, to co-operate with and invest in different national ventures.
But clearly we should try to keep things here if we can. In this respect the "in lieu" provision has two particular advantages which are surely very hard to rival. It can shield the Government and the nation from the market, let alone the full force of the market, without being unfair to the owner. From his point of view, on the other hand, and secondly, it can give to the works in his possession a unique value provided he

1189
is able to have confidence in the provisions' continuation and extension by the Government. In fact, the greater his confidence is able to be, as a result of Government action, the less likely he is to sell—at least on the open market—in the intervals between successive ownerships.
Then there is the separate need to encourage museums and galleries. Here it is worth noting the distinction between purchases and bequests. From 1822 until 1922 the National Gallery acquired 2,863 works, of which only 701 were purchases and the balance were bequeathed. Apart from its financial merits, encouragement of museums and galleries through bequests has thus been a traditional practice. And although taxation arrangements introduced early this century have altered the scope of that 19th century practice, they still do not preclude related options.
The present examples of either private treaty sales or of acquisitions through the "in lieu" provision are not the same as ordinary purchases, nor the same as ordinary bequests—but at least they constitute a far more satisfactory route for the nation to provide museums and galleries than the alternative of purchases. Through them there is greater flexibility for the Government to assist a wide range of museums and galleries in the country rather than just the principal ones. On the latter point in particular, even without experiences such as that recently of the Chatsworth drawings, surely it would be best for the Government to consult a far wider range of institutions than are at present consulted in connection with private treaty sales or with "in lieu" acquisitions.
Other aspects which have to be balanced include whether certain incentives given to individuals or groups connected with the national heritage operate too much at the expense of the living arts; or thinking of the "in lieu" provision not so much as a measure to protect heritage but more as an opportunity for rich men to have a wider choice in how they pay tax, does it operate too much at the expense of other taxpayers?
Regarding the allegation that the living arts suffer, they would only do so if the cost of looking after our national heritage becomes more expensive. The essence of the case for the "in lieu" provision is that it can make that task cheaper. It should also be borne in mind that some of the finest British collections include modern works and those of living artists—as in the case of the collections of Roland Penrose, Douglas Cooper and the late Lord Clark.
The allegation that the choice given to rich men to pay tax in kind works against the interests of other taxpayers perhaps reflects confusion between the "in lieu" provision and capital transfer tax itself. If he were able to pay less capital transfer tax or less tax in general than anyone else, this certainly would be unfair. But while that is not the position it might be pointed out that, conversely, we could do well to adopt the system operating in France, where payment of succession taxes in kind is possible as a general option and where no percentage of the agreed value of the object surrendered to the state is withheld for the purpose of discharging the tax.
It is often tempting to attach too much importance to some legislative provision or other designed to help
1190
particular sectors of the economy or particular aspects of the national interest. But there are many good reasons for believing that the "in lieu" provisions should now be made more effective and attractive—as the Question put by my noble friend Lord Fanshawe implies. This can make the effort to save more of our cultural heritage cheaper and easier, without setting up unfairness or tax anomalies; and in benefiting a wide range of British museums and galleries it then also benefits their communities and towns.
7.34 p.m.
Lord Annan: My Lords, what a lucky man I am to be called now and to be able to be the first to congratulate the noble Lord, Lord Teynham, on his maiden speech. It was forceful, cogent and extremely well informed. It is perfectly clear that we are going to hear from him to great advantage many times in the future. My mind went back this evening to a notable occasion when the late Lord Vaizey analysed at some length and with extreme clarity the whole of the "in lieu" provision. The point he made then was that this provision had one great advantage; it meant that the Government or the Minister concerned did not have to ask for or spend Government money. All that happened was that revenue was reduced, and that process was one that nobody would observe—whereas if one had to go to Parliament and ask for more money, clearly it was (a), going to make the Minister unpopular and (b), perhaps even bring the Government into controversial waters.
The late Lord Vaizey, in his speech, seemed to think that Parliament had spoken with such force on this matter that the Treasury really had no role to play at all except to carry out the "in lieu" provisions; and therefore that any Minister who failed to accept an object in lieu was thwarting the will of Parliament and would very soon find himself stepping into a barge on the Thames in which he would be taken from the Houses of Parliament to the Tower of London and possibly there made to test the sharpness of the axe.
In fact, I do not believe that such an argument is sustainable and so I am certainly not going to suggest that the noble Earl should this evening be impeached. But it is a fact that Parliament's will is in a sense being thwarted and frustrated by the Treasury.
I am not intervening tonight simply to press the claims of the National Gallery, because it is more often the municipal museums which benefit from "in lieu" acquisitions than the national museums and galleries. Municipal galleries have very low purchasing grants and the "in lieu" system is their major source of acquiring paintings and objects.
There is another group of people on whose behalf I want to intervene. They are the would-be donors. There are a large number of public-spirited men and women—a larger number than I suspect many people realise—who want the nation to benefit by their foresight, or by their ancestors' foresight, by giving their possessions in lieu of tax. Certainly they enjoy an advantage; certainly they might not do so well if they sold at auction. But that is not what animates them. They cannot afford to give their treasures to a particular museum or gallery but they want a particular treasure to go to the museum they designate because

1191
they believe that that is the right place for it. They have always wanted that treasure to go to that particular museum. That has been their intention, their dream. They are not a calculating bunch of opportunists; they are in a modest way idealists; men and women of genuine benevolence.
It is these people who are becoming more and more disillusioned. Why have the provision for 'in lieu' and then restrict its application? Why restrict its application so much that it becomes farcical? Would it not be better to abolish the provision altogether? That would at least be less hypocritical.
Perhaps your Lordships will allow me to cite a specific case, and I have the permission of the person concerned to do so. The eminent collector and connoisseur Mr. Denis Mahon has a collection of paintings. Many of them are seventeeth century baroque paintings—a genre in which our country's collections are particularly weak. Mr. Mahon wishes to bequeath this collection of paintings to a number of institutions in our country. Every gallery has been selected with care; every painting is to go to the place which is most appropriate. In fact, Mr. Mahon's planning is a real labour of love and it is clear that he really enjoys it.
I know that the noble Earl has been in correspondence with Mr.Mahon over this matter. I have to say that Mr. Mahon is deeply troubled over the present situation and wonders whether he will be able to dispose of his paintings as he wishes. He will certainly be unable to do so if the sum allocated by the Treasury to the Office of Arts and Libraries for objets d'art remains at £1 million.
Mr. Mahon has made it very clear to me that he is not calling for any special privilege for himself. He most emphatically does not want special treatment. What he wants is that every bona fide and important potential donor should have the same opportunity as himself—no more, no less. I must ask the noble Earl, what hope can I hold out to him?
Our country has a record of not being very skilful or tactful in its handling of potential benefactors. Long before the Second World War, Mr. Chester Beatty approached the Government to ask if he could donate his collection to the nation in lieu of capital transfer tax. He was refused by the Treasury. He left England for Eire and his collection went to Dublin.
Then there was Mr. Gulbenkian. He, too, with his enormous admiration for the British people, hoped to negotiate a settlement for his collection. That, too, was refused, and the collection went to Portugal. So did his foundation because of difficulties unnecessarily created.
Then there was Mr. Getty. In that case, too, so it is said, there was a chance that his matchless fortune, or at any rate a large part of it, might have come to this country where he chose to live and where he died. However, the foundation was set up in California. I could cite other examples of such self-inflicted wounds.
My Lords, how much more sensible the French are in these matters. How much more flexible; how much more wordly wise and shrewd, and how much more their bureaucrats and ministers appreciate the gains to
1192
French culture of being liberal, wide-eyed but heavy lidded, of not straining at gnats and of being willing to swallow a camel—in short, of being splendidly cynical. How much better, as Uncle Toby said in Tristram Shandy, they order these matters in France.
The French authorities are perfectly willing to do deals. For instance, it is forbidden to export a work of art in France; that is to say, it is forbidden unless some clear countervailing benefit would accrue to the French nation were the work of art to be exported. And then suddenly, miraculously, it is found not to be forbidden to export that particular work of art. Unfair, my Lords? Devious, my Lords? Unscrupulous, shifty, downright immoral? Possibly, my Lords. But how expeditious and sensible.
Will the noble Earl ask the French authorities—informally, of course I do not mean for public repetition—how their system works in practice? And when he has done so, could he not appeal to the more Machiavellian side of his right honourable friend the Chancellor of the Exchequer?
It is the inflexibility of the Treasury which is our undoing. Gone are the days of Maynard Keynes's beneficent wartime influence in the Treasury where works of art were concerned. In those days, and thereafter in the 1950s, the Treasury was still guided by officials such as Sir Denis Proctor or Sir Edward Playfair, who had learned as undergraduates at Kings College, Cambridge, the value of the arts and bent the Treasury rules in their favour.
Having said that, my Lords, I am bound to admit that someone such as myself who has been a Vice-Chancellor must have some understanding of the Treasury mind and of the dilemma which faces the noble Earl. After our debate on the arts in March, the noble Earl, Lord Gowrie, said a bit wryly that the vegetables hurled at him during the debate rather outnumbered the bouquets. Indeed, my old friend, Lord Hutchinson of Lullington, hurled bag after bag of tomatoes at him. His speech combined the sarcasm of Carson with the wit of Birkett, and by common consent was the oratorical triumph of the evening. Since he came to my defence, I was naturally grateful to the noble Lord, Lord Hutchinson, for his support.
Last night, when I was at Cambridge, an enormous bag of tomatoes was pressed into my hand by the director of the Fitzwilliam Museum, consisting of examples of works of art offered in lieu which had been refused. But I shall not hurl them. The noble Earl, Lord Gowrie, cares as much for the arts as the director. Indeed, as I listened to the speech of the noble Lord, Lord Hutchinson, I reflected that, even if I possessed his forensic art, which I assuredly do not, I could not have made a speech like his. It was the speech of someone who has never had to run an organisation. Weak as the powers of a Vice-Chancellor are, any chief executive knows that one has to cut one's coat according to the length of cloth the Treasury has decreed.
There will be those who will say, as Lord Hutchinson did, that the arts more than anything else give meaning to life and therefore they must never be cut, only further reinforced. Others may say that whatever needs are identified in our society those needs must be met at once. That great-hearted man,

1193
the noble Lord, Lord Molloy, often gives me at Question Time the impression of saying just that, and, if he were Chancellor of the Exchequer, we should rejoice for a fortnight and be bankrupt within a month. So I asked myself, "If you are in earnest about 'in lieu', what suggestion can you make which does not echo the stale old plea 'give us more money'?"
My Lords, what I say now I am saying only for myself. In no way should I be taken as speaking on behalf of the Trustees of the National Gallery, still less of its director; I have not consulted any of them. But I wonder if the noble Earl has considered saying this to the directors of national museums and galleries who recently wrote to him on "in lieu". He might ask if they value "in lieu" acquisitions so highly that they would agree to the Office of Arts and Libraries withholding each year £1 million or so of the purchase grant of the major institutions such as the national museums and galleries, or the National Trust or the National Heritage Fund? That nest egg thus created would then be available to finance "in lieu" purchases. If no "in lieu" offers were forthcoming during the year, the Minister would return the million to the institutions concerned before the end of the financial year and they would be free to use it and carry it forward to the next year.
The purpose of this manoeuvre would be that it would give priority to "in lieu" purchases. The institutions would have less money each year to purchase on the open market, but the Government would have more money to reimburse the Inland Revenue for its reduction in income. Now, I do not like such a scheme. Nor, so I would guess, would the directors of the national museums and galleries. Anything which reduces the freedom of an institution to do what it will with its grant must be disliked by its director and trustees. What advantages, then, are there in such a scheme?
I suppose the main advantage is that it does something to protect the heritage. It gives encouragement instead of discouragement to those who wish to give treasures in lieu. It does not reduce the amount of purchase grant. All it does is to earmark part of it. But the disadvantage would be that the nest egg provided by one institution might be used to benefit another institution.
In suggesting that the Minister might consult galleries and museums on these lines I feel rather like a prep school boy currying favour with matron, but I hope that the noble Earl the Minister will accept that this is an honest suggestion of a way to test opinion if he is unable to give us better news tonight. But for my part, I hope he will stress to his colleagues in Cabinet the inestimably superior approach to these matters by the French. The French are superior to us because, unlike the British, they never apologise for their own culture. They are proud of it. They boast of it. When a Frenchman sees those stirring words on the Arc de Triomphe,
"A Toutes les Gloires de la France"
he does not remember just the French victories on the field of battle; he is brought up to remember France's triumphs in the arts.
7.50 p.m.
Lord Cottesloe: My Lords, I should like first to say with what pleasure and interest I listened to the quite admirable maiden speech of the noble Lord, Lord Teynham. It encouraged me to think that we may hope to hear him many times in the future.
I am very glad that my noble friend Lord Fanshawe has asked this Question. The subject is a matter of great concern to all those who are interested in our heritage of historic houses and the collections that they contain. The situation has changed so much and so unhappily in the past two years that rather drastic action is called for. We must first, of course, rejoice that the Government have found the special funds that are needed if the three splendid houses which are named in the Question are to be looked after for the nation and their superb contents saved from dispersal. Nostell Priory, in particular, with its unique contents of Thomas Chippendale's furnishings, would be quite irreplaceable.
However, there are many more houses and collections of irreplaceable importance that are at risk, and large emergency grants to save them cannot be relied upon. The whole system is in urgent need of a new look. The first line of defence, it is clear, must be the "in lieu" system of acceptance by the Treasury of real property and chattels in satisfaction of tax. This system is vitiated by the convention that any such acceptance is, by definition, national expenditure. In effect, the Treasury not only obtains property but is paid for it as well. The sooner that convention is done away with, the better. It limits the amount that can be accepted in any given period in a way that is very unfortunate.
As regards chattels—pictures, furniture and the like—the whole system of control over the export of works of art that was established in 1950 by the Waverley Committee, and which has worked well, on the whole, for a quarter of a century, has broken down, defeated by violent inflation. This system was designed on the basis, first, that it should be fair to owners and to the trade; and, secondly, that being a licensing system it could only be fully effective, as Lord Waverley himself put it, if it was applied to a limited number of objects of high importance—that the more the field widened the less effective and more irksome the control would become.
A factor that has tended to defeat that system has been the anomaly of VAT, which is applied to purchases for the home market but not to exports, and so gives an advantage to foreign buyers. Rectification of that anomaly is long overdue, and I hope that the Minister will tell the House that the Government will take that on board.
The criteria of national importance for the purposes of control, which served well for more than 20 years, now needs looking at again. There are age limits. Originally, nothing fell within this control that was less than 100 years old or had been in this country for less than 50 years. I believe that in recent years there has been some change in these parameters that has widened and weakened the control. But the main parameters of the control—the criteria of national importance—now need looking at again in the light of modern conditions.

1195
They were: first, is the object so closely bound up with our national history and life that its removal would be a misfortune? That is fair enough. Secondly, is it of outstanding aesthetic importance? Now that travel about the globe is so much easier and more rapid, we may be doubtful how far that criterion is still valid. Nowadays the location of an object of special beauty is surely less important than the context in which it can be seen and appreciated. Thirdly, is it of special importance, in itself or as part of a group, for purposes of study and research? That criterion is no doubt still valid, but it may well operate against the retention of an object in this country. For example, if there was the new discovery of an important collection of Boswell papers, the right place for that collection would not be the British Museum but Yale University, where the bulk of the Boswell papers are already and where anyone wishing to study them must go to do so.
For all those reasons, and not merely for the reason that there is now astronomical inflation in the arts markets of the world, I believe that there is an urgent need for a new look, for a new Waverley Committee to examine the whole field of the national heritage of works of art of all kinds and the extent to which, and the way in which, control over them should now operate. I hope that my noble friend on the Front Bench will tell the House that the Government will set up such a committee to examine the whole matter in the light of today's conditions.
7.57 p.m.
Lord Charteris of Amisfield: My Lords, I should like first to add my congratulations to those which have already been expressed to the noble Lord, Lord Teynham, for his excellent and enjoyable maiden speech. I hope we shall have many more speeches from him.
We should all be extremely grateful to the noble Lord, Lord Fanshawe, for having once again initiated a most interesting and constructive debate on Heritage matters by means of an Unstarred Question. However, I make one comment on the actual wording of the noble Lord's Question in case a misapprehension is created which I know he does not intend. He refers to:
"the protection which [Her Majesty's Government] provided for the contents of Kedleston, Nostell Priory and Weston Park".
In providing the £25 million for the National Heritage Memorial Fund the Government have, by an admirable act of statesmanship, put the fund in the position of being able to negotiate realistically to the end that those three notable country houses and their contents shall remain intact for the enjoyment of the people. "Protection", however, has not yet by any means been achieved. The way forward is by no means clear and certain. As the first Duke of Wellington said, therefore, "Don't holla till you're out of the wood". We are still very much in the wood, and it is full of briar patches.
Noble Lords who have already spoken have emphasised how serious is the position in respect of the paucity of the "acceptance in lieu" provisions. I hope I may be allowed to give some illustrations from the experience of the National Heritage Memorial Fund to show just how inadequate the £2 million set aside for 1985–86 is likely to prove. At 1984–85 prices the £2
1196
million would look after between one-third and one-quarter of one important oil painting by Turner. It would buy one painting by Wright of Derby, leaving £½ million over for two or three deuxième cru old master drawings; and it would amount to only one-quarter of what the National Heritage Memorial Fund had to fork out to save Belton and its contents.
The pity of it is that the AIL system has so far, at least I think up to a few months ago, done an excellent job for the defence of the heritage. Partly because of it, and in spite of stiff taxation, our country houses remain treasure houses in the real sense of the word.
That has been brought home to me recently in a compelling way. Because of the sad death recently of Lord Howard of Henderskelfe, I find myself chairman of the Committee of Honour for the "Treasure Houses of Britain Exhibition" which is to be mounted in the National Galleries of Art in Washington in November. I have recently been in Washington—as it were, a chairman in search of a role. It is possible that I have found a role, and I have certainly learned something of what will be the scope and magnificence of this exhibition. A great part of the National Galleries of Art will be filled with pictures, furniture, silver and sculpture of the highest quality, all of which will have come from houses still in private ownership or in the ownership of the National Trust or the National Trust for Scotland.
The creation of "the country house"—the gathering together and the creation of its contents and the life that was lived in it—is arguably Britain's greatest contribution to civilisation. This exhibition will be like the tip of an iceberg. It will give an indication—an indication certainly of enormous quality and distinction, but an indication only—of the treasures which will not be seen but which remain in private ownership in Britain.
The exhibition is not an antique dealers' fair. Still less is it a bargain basement sale. I hope that it will give a powerful boost to tourism in this country. I suspect, however, that it will also whet some appetites on both sides of the Atlantic. These country houses are valuable to Britain's economy because they draw tourists, and of course the drawing power that they have depends upon their being country houses and not museums. I must say here that I think that many of the French chateaux are rather museums.
I fear that the existence of our country houses will be threatened and the disintegration of some made certain if the wholly inadequate provision for AIL is not greatly improved. It is particularly unfortunate that the Treasury has elected to reduce the AIL provision in real terms just as the top has blown off the art market. At the very time when hard-pressed owners will be tempted to sell and rich foreigners will be spurred on to buy, the defences against our treasures leaving this country are being not strengthened but reduced.
Because of the shortage of acceptances-in-lieu money, increased demands for financial assistance with private treaty sales are already being made on the limited resoiurces of the National Heritage Memorial Fund and the local museums' purchase funds. What makes it particularly provoking is that funds allocated for AIL, whatever anyone may say, are awfully like

1197
Mickey Mouse money. I recognise that the Government cannot use an art acquired in lieu of tax to build roads, but surely the acquisition of works of art in that way generally adds to the nation's wealth; and the nation's wealth will certainly be depleted unless more satisfactory arrangements are made for acceptances in lieu of capital taxes.
The noble Earl the Minister for the Arts is an enlightened and cultivated man, and one who understands the true value of works of art to this country. I urge him, therefore, to recall his experiences in passage football at Eton when he was a boy and to use that boot on the foot which is in the Treasury to knock the thing about, either to get the AIL provision massively increased (which ought to be easy because of its Mickey Mouse characteristics) or so to reform the acceptance-in-lieu procedure that the notional reimbursement to Treasury by heritage departments of the value of works of art and property accepted is abolished. The value of the amount accepted could quite simply be controlled by setting a ceiling to it. I am quite certain that the Minister will have massive support in this House for the efforts which I am sure he is making to this end.
8.5 p.m.
Lord Saint Levan: My Lords, I should like to congratulate my noble friend Lord Teynham on his maiden speech. This is only the second time that I have addressed your Lordships and I intend to do so for only a short time.
I am the owner of an art collection on permanent loan to the National Trust and am in exactly the same position as the late Lord Saint Oswald and Nostell Priory. The problem is that not only do we have to pay considerable capital grants tax on works of art that will not get exemption because they are not pre-eminent enough, but also we are in a very difficult position because we have to negotiate over a long period of time. My father died over six years ago and I still do not have a clearance certificate from the capital taxes office and I cannot spend one single penny of my father's money.
I am also the president of the friends of a municipal art gallery in the South-West. How lucky we are in the South-West to have such marvellous works of art and such famous artists! But we have not yet had one single work of art given to us under the new provisions. I wonder whether the Minister will consider whether the pre-eminence rules could be slightly lessened so that municipal museums can acquire works of art rather more in the middle range.
It is terribly important for us in the South-West to get works of art to make up a collection which will be formed over a period of 20 or 30 years ahead. We want to buy works of art by artists who have perhaps not yet reached as high a price in the art market as they will in future. I therefore ask the Minister whether he will consider that. I am particularly pleased that the Plymouth Art Gallery has acquired a picture by Roger Hilton which is absolutely essential to any museum which wants to have a collection of contemporary art in the South-West.
1198
These considerable tax problems are making it impossible for us to do very much. There are also legal problems. So many works of art in historic houses are held on a strict settlement, perfectly properly. How can one be sure that future generations will be responsible, maintain them and spend the money on insurance? But there is no legal power so far as I know for the tenant for life of strict settlement works of art to give the works of art to a museum, an art gallery or even the National Trust. I wish that I could have the power to give to the National Trust some of the works of art that I now hold as a tenant for life on a strict settlement.
8.9 p.m.
The Earl of Perth: My Lords, I do not know whether it was plotted or good fortune on the part of the noble Lords, Lord Fanshawe and Lord Annan, that we have this debate at this moment. Yesterday we saw the report of the National Gallery. It seems to me that what we have learnt from that reinforces all that we have been talking about tonight.
The other day in this House the noble Lord, Lord Young, gave some statistics which I found quite remarkable. He told us that the number of people employed in libraries, museums and galleries in this country amounted to over 350,000. Employment in the tourist trade in this country amounts to over 1 million people. Of course, the two are interconnected. I would include in the interconnection the position of the great historic houses—as the noble Lord, Lord Charteris, mentioned—which are also open and helped on the contents of their works of art by various means. The point I am trying to make here is that we all want measures to increase employment. One of the things I have always been told is to build on a growth industry. Tourism, which takes in the broad spectrum of museums, galleries and historic houses, is a growth industry.
I suggest to the noble Minister that one of the arguments he can use in trying to do what all your Lordships have asked for today is to say this should help on the employment side. It may be said, "Very well, but the Government have already given very great help and consideration recently in the grant which the noble Lord, Lord Charteris, referred to and which is in the actual text of the Motion tonight". Very well; but it is slightly worrying. I understand it when the noble Lord, Lord Charteris, says that it is not yet in the bag. All right; in certain respects they are doing noble work, and it is surely the Minister who has helped there.
What is the point of giving on the one hand and spoiling the whole thing by taking it away on the other? Surely this is what is happening in the Treasury's restrictions about the "in lieu" provisions. No only has it done that but it has reduced the grants to various galleries throughout the country. I suppose it will be said that the Government hope in this way to persuade or to force—whatever is the right word to use—private sources to the rescue. In some respects they have been incredibly successful. I refer, of course, to that tremendous gift promised by the Sainsbury family for the National Gallery. All the same, I must press the Government to recognise that they cannot expect that

1199
to happen all the time; they really have a critical role to play at this moment.
Here we have the "in lieu" which had been sanctioned by Parliament, and yet we have heard from the noble Lord, Lord Annan, how there is a danger of going to the Tower because of the way it has been used. I understand that it is difficult for the Treasury to be totally open-handed, to give a blank cheque on this question of "in lieu". While it is true that cash does not necessarily pass, it is cash forgone; it is not cash needed but it is cash forgone. There must be some limit. Goodness; £2 million with prices as they are today—it is tragic that it should even be thought about! What happens? All the museums and galleries have to fight for it. That is not a very good thing for this limited source. I would say it is a nonsense.
Today I was talking with a noble Duke about this whole debate, and he ought to know about it. He preferred to use the words, "It is crazy." Whether it is a nonsense or whether it is crazy, it is very unwise; it is a great danger to the country's heritage. It has to be changed; it has to be changed for all the reasons that your Lordships have given. In particular, I had in mind what the noble Lord, Lord Annan, said about would-be donors. As the system is today we get museum directors up and down the country who establish special relationships with collectors or with those who have special works of art which they think might be suitable for their museum or gallery, and the collector wants to be able to help and the museum director ditto. What happens in practice? If this absurd level is insisted upon, that system breaks up and the relationship between potential donors and museums is upset. It is not only the potential donors; it is also others such as executors. The executors who know in general what might have been the wish of somebody, who want to offer the works, cannot do it. It is placing executors in a very awkward position.
Let us take the case of Ben Nicholson, that great British artist who died the other day. What had the executors to do? They know what they would like to do. They have tried very hard to get first in the queue this year, I gather. Whether they will succeed, I do not know. If they do not, are they not perhaps derelict of their duty in not offering it out to anybody who will buy? Is it really reasonable to place executors or those who want to do proper things in this sort of position? It puts them in a highly embarrassing and awkward position. I do not think that is fair and it certainly is not to the advantage of the country.
I have just given an example of an artist, but it is not only living artists; it is the sculptors, the writers of music and the authors. I believe it is true to say that in this country we do not have one manuscript of Evelyn Waugh. Maybe the last one of Vile Bodies may come to us. The review committee may want to stop it, and perhaps the country will come to our rescue in the sense of funds being available, but is not that a shocking thing? We really should be trying, whenever we can, to get the living artists of today who are going to die—as we all do—and make sure that some of their work is available through the "in lieu" process.
I understand, as I said before, that we cannot expect a blank cheque; but what are we to do? The Review
1200
Committee on the Export of Works of Art tells us every year in its report what has been accepted in lieu. Very interesting reading it makes. If you look at the report for 1979–80, there was approximately £2 million in cash; there is a long rigmarole which I do not quite understand. When one looks at the objects that were saved all over the country, not just for the national museums in London, one realises what a tremendously important concession—if that is the right word to use—or method of saving works this represents.
What are we to do? I suggest that there is a good deal of muddle at the present time on how this system operates. From all the noble Lords I have heard tonight—Lord Teynham who made that fine maiden speech, and others—one gets the feeling that perhaps we are in a bit of a muddle about it all. We ought to have a look at it to see how best it can operate. I thought a good deal about who should be asked to operate it. The national heritage fund? No. The Review Committee for the Export of Works of Art? Although it appears in its report, no. The museums and galleries? Possibly. But I think on balance the right thing is for a special body to be set up to operate and make an annual report to Parliament on what they are up to. My request to the noble Minister who is to reply is that he considers very carefully whether and how we should do this. After all, when one has heard the noble Lord, Lord Saint Levan, say that after six years they are still struggling on these issues, something is wrong.
I finish by saying that I hope that as a result of today's debate, and as the outcome of all the pressures that the Minister for the Arts has put and will put on his colleagues, he can get this so-called ceiling of £1 million or £2 million (I am not clear which it is) left out of it. It should be put on to a proper basis, with, if you like, a £5 million or £10 million figure, taking into account all that has happened in the way of rising prices in the last few years. I hope that doing this will help him to appreciate what I started off by saying: namely, that this is not a special class interest for which we are pleading; we are pleading for employment in the country.
8.21 p.m.
Baroness Airey of Abingdon: My Lords, I join other noble Lords in thanking my noble friend Lord Fanshawe for having introduced this debate at such an auspicious moment. Perhaps I may also, with other noble Lords, congratulate my noble friend Lord Teynham on his very excellent maiden speech.
There is an old music hall song which goes,
"Don't put your daughter on the stage, Mrs. Worthington"
but today, Mrs. Worthington, if it were the case of a young woman who was to inherit a beautiful old manor house, I would say this. Maybe her ancestors fought at Crécy, at Waterloo or at Calais. Maybe in the 18th century, with discerning taste, they bought beautiful treasures to fill their small but jewel-like house. Your daughter will be a slave. I suspect she will be a willing slave because she loves that beautiful house. However, with today's prices, she will have the great temptation to sell it up. What a change in her life and that of her children there would be if she should sell it up. But what a loss to the nation!

1201
Who will want to look at a house denuded of all its treasures and, eventually, of its original owners? This country is stiff with beautiful manor houses. The other day I discovered one by chance. I shall never forget the experience. I went up a long road, which could not really boast of being a drive because it was so rough. I had been asked by mutual friends to lunch there. When we went inside I found that we were to lunch in the kitchen in an extremely humble way, though I must admit the wine was very good.
Afterwards, my hosts, who were dedicated owners of this house, which belonged entirely to them, took me upstairs. My breath was absolutely taken away by the beautiful possessions. Then we went right up to what must have been the attics. There, there was the most wonderful collection of modern pictures. I think this comes a little in line with what my noble friend Lord Teynham said, that we must think of the future when we are thinking of the preservation of the arts.
The other day, I discovered this wonderful house. I should like to say to your Lordships that such houses really are the nation's capital; they are our investments. What is more, they make money in hard cash. The Treasure Houses of Britain exhibition, about which my noble friend Lord Charteris has spoken this evening, will give America a taste for the treats in store for the tourists who come to this country.
Stockbrokers sometimes advise their clients to invest in art. What better, with today's appreciation? I commend this to my noble friend the Minister. I beg him to speak to the Government on this matter and vastly increase what my other noble friend Lord Charteris has called the "Mickey Mouse" money used in lieu to enable the works of art to remain where they belong.
However, I speak this evening specifically for the smaller manor houses with less land and fewer resources. Their treasures should be accepted in lieu of the still penal taxes in return for access to the public. Thus they will be outposts of the museums and galleries, which are often short of space. I am sure that many of the curators of our great museums are suffering from this problem. In this way, the treasures will be owned by them but will be shown in their true setting.
I believe that the owners of these houses should be given every encouragement to stay on in their houses with continuity. I believe that visiting these "in lieu" aided houses will be of great benefit to the country. It will encourage tourists from abroad. There will also be the spin-off which has been referred to by other noble Lords this evening, of creating trade, and, most importantly, this will be a boon to employment. The nation will have a vast store of real property and worth. However, to achieve this, the owners should be allowed to feel that what they do is a benefit to everyone and we should applaud their courage in staying on.
8.26 p.m.
Lord Donaldson of Kingsbridge: My Lords, the noble Baroness has spoken so well on the smaller
1202
house problem, which is a very difficult one because it can run into money problems so very quickly. I shall not follow her because I do not know a great deal about that aspect. I wish to concentrate chiefly on the main topic which the noble Lord introduced, which is the chattels problem of the "in lieu" system. I am very glad that he has brought it up, because it is in a far worse state than I realised, being fairly remote from action at the moment. I have been very shocked by what I have discovered.
I was for three years Minister for the Arts—I am thankful to say not with the more terrible Treasury responsibilities which the present Minister has. When I was Minister, the system of protecting the heritage in the form of chattels worked jolly well. There were three stages. First of all, there was the "in lieu" system. I have not checked my figures, but I am pretty sure I am right in my recollection that it was understood with the Treasury that we in the Ministry of Arts would have a figure of £3 million (I think at one stage it was £3½ million) for chattels. I cannot remember what it was agreed that the environment should have, but it was something additional to that. Up to the stage of Mentmore, we never had to refuse anything. For the whole of the time I was there, there was never a refusal; there was never an excess of demand over the quota allowed.
When one looks back on 1979, 1978 and 1977 and thinks of £3 million, I do not know what that would be worth today. I have asked the Minister to have an answer to this, because I am not very good at calculations whereas he has people to help him. I hope we shall hear what the £1 million or £2 million at today's figure amounts to in relation to the figure we had then.
We have not had from this debate many solutions offered to this problem except the one we all want, which is a higher budget for the "in lieu". In my day, I had a very amenable Chief Secretary to the Treasury in the then right honourable gentleman Joel Barnett. Unlike the picture suggested by the noble Lord, Lord Fanshawe, of a Treasury unwilling to do this job, he was very willing and did everything that he could to help, within reason.
We never had a ceiling given to us. There was a budget figure. At any stage, this could have been discussed and would have been discussed. There was no question of doing what has unfortunately just been done, with someone saying that we have passed the limit and cannot go on with it. I do not know what has happened to make this wrong, except that the inflation of value has been so enormous that the whole problem is far less tractable. One would think, in an innocent way, that the way to overcome this would not be to reduce the limit but to increase it somewhat. That is, of course, the only solution that anyone has come up with during the whole debate.
It is perfectly clear that it is ridiculous to have a system of this kind which cannot do the job better than now. My remedy, as it always is, is to give them more. I know that this is not helpful to Government, but I am not trying to be helpful to Government. They have to sort themselves out. They are doing something very damaging indeed to the country which they are

1203
supposed to be governing. Do not let us pretend that they are not.
The second branch of protection was the Waverley system, to which the noble Lord, Lord Cottesloe, referred. That system, with one or two rows, also worked awfully well. On a number of occasions, preeminent articles were saved. On a number of others, the price could not be raised. It was, however, a perfectly fair and straightforward arrangement with which people in general were fairly content. The Annan solution—I am sorry that the noble Lord is not here—seems to me not at all the proposal to go for. If you want to increase something, it is never any good cutting. You have to face the fact that more money should be spent and that it was spent perfectly successfully 10 years ago. There should be no hesitation in saying that this must be done. If you take away the purchase grant, already cut in the case of the National Gallery, you are making things worse in order to make them better. That is very seldom effective.
The system has worked well until very recently. Of course, the explosion in prices has been getting worse all the time. It is clear that when you have a seven figure price for a picture, the sort of things that the Government are now talking about are in no way relevant. If the Government are not going to find money at a proper level, they should say so in clear terms. They will lose a lot of good will through it. I am sure that the noble Earl is fighting the battle as hard as he can. I give him credit for that. I am not here to defend him; he has to defend himself. This he has shown himself quite capable of doing. In our last debate there was powerful speech after powerful speech attacking the arts. In the newspapers one read of only one powerful speech: that of the noble Earl, saying aggressively and, with respect, wrongly, that everything in the garden was perfectly all right. One must not try for a single moment to defend the noble Earl. We want to urge him on. We want to use the prick of the gadfly, which was so effective with Zeus, or Jupiter, according to what I can recall of my classical education.
I want to talk, following some remarks of the noble Lord, Lord Annan, about the desirability of the "in lieu" system from the point of view of the donor. It seems to me desirable that works of art of pre-eminent quality should be acquired by our museums and galleries, or perhaps better still left in their stately homes and open to the public, when taxation and rising values make it impossible for the descendants of the man who collected them to keep them privately any longer. It is good that someone other than the Treasury should decide which to accept and where to allocate them. But there must be a budget figure in mind and the Minister may, on occasion, have to choose one or other of two offerings if he cannot afford both. I do not quarrel with that. I do not expect the Government to accept an open-ended demand. I expect them to accept a demand that makes sense in relation to the situation and to show flexibility in their top level; to pass things on to the following year when necessary, and that sort of thing. It is quite easy to do.
I do not think that we can expect to keep everything. Works of art have always changed hands and countries. They should not all be frozen in galleries. It is right and proper that there should be a trade in such
1204
things. It is a trade of considerable value to this country. The direct treaty system—the third of the matters I was talking about—is also working well. Noble Lords will know what it is. It is where a bargain is made with the Treasury over tax in return for selling direct to a national institution. That is a perfectly good procedure that works satisfactorily. It keeps the chattel away from public auction.
The late Lord Vaizey, as the noble Lord, Lord Annan, said, attacked the whole question of the reality of paying back the price of something you had got. He was, philosophically, perfectly right. It seems to me that once you are given an article in lieu of money owed and it is accepted, that is and must be the end of the matter. But it is also clear to me that you must have some system of control, particularly with the rise in prices. One can give a series of known pictures hanging on loan in galleries all over the country that one really could not afford to buy at all quickly under the "in lieu" system. In my view, Lord Vaizey was not entirely right. It is purely a question of bookkeeping and absolutely nothing else. It has no reality and no connection with reality at all; so I need not worry about it once we agree that there cannot be an open-ended commitment to buy everything all the time.
The really serious issue, as I believe the noble Earl will have to tell us, is that the difference between the figure that I had to work with, which operated perfectly well, and the figure with which he has to work, which is impossible in relation to the present amounts, is much too wide. Either this should be dropped, with the Government saying that they are beaten and they cannot manage it, or it should be done properly. The case for raising the limits seems absolutely unanswerable. When the nation acquires an asset, it acquires an asset. It is no good the Treasury going on as though it was increasing public spending incautiously. To swap inflationary cash for fast-rising eternal values may be frowned on by the Treasury. By ordinary citizens, it can be seen to be a very good investment indeed, although it is not possible to do too much at once. I hope, therefore, that the noble Earl will seize this opportunity to restore the confidence of the art world by doing something good for the arts and sound for the country.
8.39 p.m.
Lord Strabolgi: My Lords, I am sure that we are grateful to the noble Lord, Lord Fanshawe, for tabling this Unstarred Question. The House has had an extremely interesting and useful short debate. I should like first to congratulate the noble Lord, Lord Teynham, for his excellent and knowledgeable maiden speech. I hope that we shall hear from him on many future occasions.
I am sorry that the noble Lord, Lord Annan, is not at present in his place because I should like to endorse and support all that the noble Lord said about Mr. Denis Mahon's endeavours to allow his collection to pass into the public domain. I have had the privilege of knowing Mr. Mahon for a great many years and I know how public spirited he is about-these matters. I hope that the noble Earl will take seriously the points and suggestions that Mr. Denis Mahon has put to him.
I must also join with the noble Lord, Lord Fanshawe, in congratulating the Government on

1205
stepping in to ensure that the three historic houses—Nostell Priory, Kedleston, and Weston Park—were saved for the nation. But I must ask the noble Earl the Minister what will happen to the contents? The Chippendale furniture at Nostell is worth several million pounds. What is to happen to the historic contents of Kedleston? Will they all be accepted in lieu? If so, the £2 million ceiling will have to be increased for a start. Perhaps I may clarify the question of whether it is £1 million or £2 million as I understand it, and if I am wrong perhaps the noble Lord will correct me. I understand that £1 million was given to Environment and £1 million to OAL, but they are interchangeable. However, so far as the noble Earl's department is concerned of course it is only £1 million.
I must also ask what financial arrangements are being made to provide for the working future of the houses.
Lord Charteris of Amisfield: My Lords, I should like to speak for a few moments on those three properties. Nostell Priory already belongs to the National Trust and the only thing that is of interest there is its contents; that is, the Chippendale furniture about which the noble Lord has spoken. As regards Weston Park, both the contents and the house are involved, and the same applies to Kedleston. Certainly so far as concerns the National Heritage Memorial Fund, we look upon the contents as being as important, possibly more important, than the houses themselves.
Lord Strabolgi: My Lords, I am very grateful to the noble Lord, Lord Charteris, for endorsing to a certain extent what I said about the contents. I should also like to ask the noble Earl—if I may have his attention for a moment—what is being done to provide for the working future of these houses. All in all, do the Government think that the £25 million will be sufficient?
The "in lieu" ceiling is proving very restrictive and I think it right to say—as has been said in this debate—that works of art are being lost to the nation. There is the case of the Merton Van der Weyden, which the Walker Gallery at Liverpool badly wanted and which qualified for acceptance in lieu as being pre-eminent. As your Lordships are aware, it used to hang for many years in the National Gallery. Yet the painting had to be declined because of the "in lieu" ceiling. How does this failure fit in with the Government's plans to help Liverpool in the cultural field? To help the Walker to acquire an important Flemish painting at no cost to the state would surely have been complementary to the exciting scheme for a "Tate of the North"; but once again this has come to nothing because of Treasury rigidity and shortsightedness.
The Renoir painting "La Pensée" which was shown in the recent Hayward Exhibition which was sponsored by IBM and which was so popular—I think probably the most popular exhibition we have ever had since the Van Gogh exhibition just after the war—was accepted in lieu at around £650,000. This is a charming but middle-ranking Renoir and yet it cost all of that large amount. Therefore, the £2 million is
1206
not going to go very far as the noble Earl, Lord Perth, said. The National Museum of Wales is having to buy two fine Flemish 16th century portraits for about £200,000, which they could have had for nothing—for nothing, my Lords—if the museum had been allowed to accept them under the "in lieu" system as payment of transfer tax. Similarly, as has been said in this debate by the noble Lord, Lord Fanshawe, the Tate has had to pay over £1 million from its grant for the Penrose de Chirico which it could have had for nothing and would have had for nothing if it had been a French museum.
I do not understand why there has to be this compensatory payment to the Treasury for the theoretical loss of tax. Tax allowances or concessions are allowed for a whole host of other reasons. Why not on acceptance of a major work of art by the nation? I doubt if many of our most treasured works of art would have passed to the nation if previous governments had been as restrictive as this one.
I do not agree with the noble Lord, Lord Annan, on some of the more pejorative adjectives he used to describe the French character. However, I do agree that the French are much more realistic about this problem, and I admire the diamond-hard determination with which they act in the best interests of France. As the noble Lord, Lord Annan, has said, in France the dation scheme allows works of art to be accepted by the nation in lieu of tax without any compensation from the arts budget. There is no limit to the works of art being offered under this system and the French patrimoine has been greatly enriched in consequence.
Here, as the noble Earl, Lord Perth, has said, all is rather a muddle. I note that administration of the "in lieu" scheme has now been passed by OAL to the Museums and Galleries Commission, although offers of heritage property in lieu of tax will continue to be made initially to the Capital Taxes Office. I am sure that this is a most useful decision although I do not think it really makes much difference who administers the scheme—although it probably saves the noble Earl and his department a certain amount of trouble—while the "in lieu" ceiling remains at this ludicrously low figure.
There are other matters to which I hope the Minister will direct his attention as a member of the Cabinet and as the Treasury spokesman in this House. At present, when an export licence is postponed or when there are sometimes lengthy negotiations with the Treasury, interest charges on the notional amount of CTT continue to accrue and these can be very heavy. Would it not be fairer if these were waived? Why should an owner who is trying to pass over his property to the state, be charged interest while the Treasury makes up its mind?
The other matter is the question of VAT charged on the buyer's premium at auction sales which can be heavy at times. At present—this is extraordinary but I understand it is fact—local authority museums are zero-rated but the national museums for some inexplicable reason, are not zero-rated for VAT. Foreign buyers, of coursee, to encourage them, are zero-rated. Therefore, our national collections are at a distinct disadvantage. It would be much fairer if our national

1207
museums were brought into line. I hope that the noble Earl is going to take this plea seriously, and that as the Arts Minister he is going to try to persuade his Cabinet colleague, the Chancellor of the Exchequer, to do something about this absurd anomaly. It would be a small, but minor concession and I cannot believe that the whole of our financial and social fabric would collapse if it were made.
Last week saw the sale of the Northampton Mantegna for over £8 million, a world record price for a painting. As we all know, the Mantegna was bought by the Getty Museum at Malibu, although it could have been sold to one of several other buyers as I understand that there was keen under-bidding. Although the painting cannot conceivably be regarded as part of our historic heritage, the National Gallery of Scotland is understandably keen to have it. May I ask the Minister what is the position about the Mantegna? If we are incapable of retaining it here, then the Mantegna will have to go to California where I am sure it will be well looked after and deeply appreciated as I was very glad to hear the noble Lord, Lord Teynham, say.
In fairness to Getty, there have of course been two recent occasions when the museum has not bid for a work of art which had a heritage interest in this country. These were the Pissarro painting of Sydenham in the National Gallery and the Joseph Wright painting, also in the National Gallery, of Mr. and Mrs. Coltman. After discussions with the NG in both cases the Getty decided not to bid.
Lord Annan: My Lords, may I intervene? Did I hear the noble Lord say that it was the National Gallery which was interested in purchasing the Mantegna? That is not so.
Lord Strabolgi: No, my Lords, I certainly would not have said that, I said the National Gallery of Scotland. I am sorry if the noble Lord did not understand me, but this is what I said. However, it is fair to say that the case of the Mantegna and the recent sale of top Old Master drawings from Chatsworth highlight the problem of the retention of important works of art in this country.
Here, I was in what the noble Lord, Lord Cottesloe, said, and also the noble Lord, Lord Donaldson, about the question of the Waverley criteria. It is now over 30 years since the Waverley committee's first report. The criteria have stood the test of time on the whole, although I think that the moment has surely come for the whole system to be reviewed. What we need, I suggest, is a fresh independent inquiry with recommendations on how to save the nation's heritage in the light of present circumstances.
Waverley reported long before the days of CTT. It was quite a different system then. May I ask the noble Earl the Minister in conclusion whether he will consider setting up a new committee to inquire into the problem of retaining Britain's works of art that remain in private hands and how best these can be kept in this country, because I think the time is now opportune for this?
8.52 p.m.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): My Lords, I should like to start by echoing other Members of your Lordships' House in congratulating my noble friend Lord Teynham on a remarkable maiden speech in what I earnestly hope will turn out to be a remarkable and historic debate. I looked up my noble friend in Dod and I saw that he spent some part of his distinguished career as agent to the Hatherop Estate in Gloucestershire. It so happens that part of that estate is a well-known girls' school. It also so happens that my first paid employment was as a junior master, or usher, in this well-known girls' school. I think of it most fondly, and I am glad to have had that somewhat tenuous connection with my noble friend.
On this serious and fascinating issue he did everything that a "maiden" should do. He was not directly controversial, he was extremely witty, and for my part I thought that nearly everything he said was simply right. I hope that my noble friend will address us often, and not least on subjects in my area of responsibility and interest. I can promise my noble friend that it is not part of the intention of Her Majesty's Government to "flog off" the House of Lords. He appeared to be rather anxious about that. Indeed, we have spent rather a considerable amount of money in repairing its ceiling. Unlike perhaps noble Lords opposite, it is also not our intention, if humanly possible, to drive many of the Members of this House into tax exile.
I should also like to congratulate my noble friend Lord Fanshawe for turning the spotlight on this very real issue and real anxiety about the resources which are needed to protect our heritage, and as to whether they are adequate. I was impressed, if I may respectfully say so to him, with the cogency of his case and its presentation. I do not pretend, any more than he does—or the many other noble Lords who spoke with considerable understanding of some of the real difficulties involved—that the problem is an easy one or that it is likely to vanish. But I am grateful for the considered praise which he and other speakers have given to the Government for their action to try to help the National Heritage Memorial Fund save Kedleston, Nostell Priory and Weston Park.
Even The Times newspaper which, to its credit, has campaigned vigorously on this issue—as indeed has its principal rival the Daily Telegraph—has admitted that we are on the right track in taking this step, and that it is an earnest of our good intentions for the future as well as a record to be proud of in the present. To find £25 million for the National Heritage Memorial Fund while public spending generally is under considerable restraint is a significant signal that the Government will not stand by when the contents, fabric and surroundings of great houses of the finest architectural and historic quality are at stake. We are well aware, as my noble friend Lord Young himself showed he is aware, of the immense economic importance of the heritage, as well of course of the living arts, to employment and the economy of this country.
Where Nostell Priory is concerned, the house is already in the possession of the National Trust.

1209
Chippendale is surely our foremost artist-craftsman, and here I wholly agree with my noble friend Lord Cottesloe. I hope that the National Heritage Memorial Fund will be successful in its efforts there as well. Having said this, I am not going to holler, as the noble Lord, Lord Charteris, put it, until he is out of the briar patch. I hope he will not take it amiss from me if I say that the Government have enormous confidence in the noble Lord, and I find it hard to imagine a situation where they were not prepared to take his advice.
Nevertheless, as the noble Lord, Lord Donaldson, with his practical experience, recognised, resources are limited and public expenditure cannot simply be stretched to meet whatever situation should arise. We do not print money. It is in this context that I shall examine the ideas put forward tonight for making the acceptance "in lieu" provisions more effective. I assure the House and my noble friend Lord Fanshawe, who also has been admirably persistent in putting this case, that I shall try to look positively and constructively at the ideas.
Acceptance in lieu is of course only one part of a complex of arrangements to assist the heritage. There are also the capital transfer tax concessions which are intended to encourage owners to retain works of art rather than put them on the market, and that might be something to give cheer to my noble friend Lady Airey. There are the attractive arrangements for private treaty sales to public museums which also benefit from tax concessions. There are the export control mechanisms.
The noble Lord, Lord Strabolgi, asked me about the Mantegna. There is a procedure of export control whereby the export reviewing committee makes recommendations to the Minister. It has not yet done so. I find it hard to imagine that it will not, but naturally to some degree I am in purdah until I am formally requested under the system as it operates. We have as well the direct help which the Government give to institutions through purchase grants and through the National Heritage Memorial Fund.
We must not talk ourselves into a state of panic. Taken together, these provisions have had a very considerable impact on the heritage and a very considerable impact in recent years. Anxieties are of course evident, and they have been evident in this debate, due to the recent startling changes in inernational prices. My brief says, "startling changes" but I have to say, as a former art dealer, that I have been predicting them for about 10 years. They simply happened a little later than I myself expected.
Even in the face of these changes, the recent record is still real and considerable. If we look again at recent achievements by all the means that I have outlined and we take the package as a whole, and if also we remember that good news is always less news than bad news, the list is remarkable and it is an indication of the Government's and the nation's commitment.
There was the £8 million for Calke Abbey, the £25 million that we have mentioned that has been given to the National Heritage Memorial Fund with a view to saving Kedleston, Nostell Priority's contents and Weston Park. There was the private treaty purchase by the Tate of the great de Chirico surrealist
1210
painting—and, while I understand the Tate Gallery's complaint about the "in lieu" aspect (as will, I think, become apparent), it must be said in fairness that the gallery did obtain that great picture at well below market price. There was the private treaty purchase by the National Gallery of the Jacopo Bassano from Weston Park and the Joseph Wright of Derby. Both these great paintings were mentioned in the debate.
There was the purchase for £1·8 million (after the export stop proceeded in the orthodox and usual way) by the Manchester City Art Gallery of the Sienese Crucifixion, thought to be by Duccio; there was the Hogarth acquired by the National Portrait Gallery for about £300,000; there were the Turner bird studies acquired by Leeds City Art Gallery for £200,000—a really excellent competitive price, if I may say so; and the acceptance in lieu at £1·75 million of the Godman collection of Islamic pottery for the British Museum. Then there was the painting mentioned in his speech by the noble Lord, Lord Strabolgi, Renoir's La Pensée, which was purchased for £600,000 for the Barber Institute in Birmingham.
These are all recent cases and they and many others were generously helped by the National Heritage Memorial Fund, to which I pay tribute. I pay tribute too, to the work of the noble Lord, Lord Charteris, and my noble friend Lady Airey, who sit on the Fund. I think that they are an indication that the arrangements for the heritage—while we must be ever-anxious and vigilant in attending to them—are working well. May I say to the noble Lord, Lord Donaldson, that the list I have just given is, frankly, not my idea of doing damage to the country. Indeed, if it is damage, let there be rather more of it; and if I am damaging in this respect, may I turn into a positive vandal. But, that said, I agreed with a great deal of the rest of what the noble Lord, Lord Donaldson, said.
Turning to AIL—acceptance in lieu—there has been no decrease in the Government's commitment to it. Indeed, an amount for acceptance in lieu of £2 million between these two departments—and they work very closely together—has been allocated. What has occurred is a substantial and worrying increase in the number of items on offer and in the value of items on offer. That international inflation, if you like, is not the fault of the Government. It is this which, coupled with the high and special cost of Calke Abbey, has caused us to turn some items away and to indicate that we shall be more highly selective in the coming year. Given the richness and variety of the national stock of major works of art, I believe that it is perfectly reasonable and logical for us to be selective.
However, that said, I accept that there is very strong feeling in this House and elsewhere that we should move away from the present arrangements which, I have to say, I have myself found unsatisfactory for a long time, not least because of the conversations I have had with Mr. Denis Mahon and others—and he was particularly mentioned tonight. I am also aware of our election manifesto commitment to examine ways of using the tax system to encourage further growth in private support of the arts and the heritage. It is not unfair to point out that some improvements in the tax system as it affects the arts have already been made by this Government; notably the reduction in the covenanting period, the reduction in levels of taxation

1211
generally and for capital transfer tax in particular, and the arrangements for index linking capital gains.
But I do now undertake to see whether further improvements are possible and I am therefore very glad to be able to tell my noble friend and the House—and just occasionally, therefore, it may be of advantage to have a toe in the Treasury water—that we shall be looking again at the arrangements whereby part of the cost of acceptance in lieu is met from Votes.

Alexandra Park and Palace Bill
Brought from the Commons; read a first time, and referred to the Examiners.
House adjourned at six minutes past nine o'clock.