Lords Sitting of 21 February 1985

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Gloucester): The LORD CHANCELLOR on the Woolsack.

Falklands Campaign: Cost
Lord Boyd-Carpenter: 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 was the cost to public funds resulting from the loss of life and damage to property and ships caused by Argentina in the course of its invasion of the Falkland Islands.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, the cost of the Falklands campaign and of subsequent expenditure in 1982–83 was £780 million, but it is not possible to disaggregate these costs. Over the following two years provision of £550 million was made for residual campaign costs and the replacement of lost equipment. In addition, expenditure by the Foreign and Commonwealth Office on compensation, rehabilitation and development aid since 2nd April 1982 until the end of the current financial year is expected to amount to some £27 million.
Lord Boyd-Carpenter: My Lords, in thanking my noble friend for that very interesting and informative reply, may I ask him whether that substantial expenditure on behalf of the British taxpayer will be borne in mind when applications are made for financial assistance for the somewhat rickety Argentine economy?
Lord Trefgarne: My Lords, we certainly bear all such considerations in mind in the circumstances to which my noble friend points.
Baroness Nicol: My Lords, is the noble Lord aware of the degree of dissatisfaction in Port Stanley with the state of repair of some of the civilian buildings, both public and private? Will he accept that I have had a letter in the past week to that effect? Will he assure the House that at least part of the £27 million will go to helping civilians to get back at least to their previous standard of living, if not to a better standard?
Lord Trefgarne: My Lords, I was recently in the Falkland Islands and I am aware of the kind of views to which the noble Baroness refers. Of course much of the money provided by the Foreign and Commonwealth Office will be used for the purposes that she describes.
Lord Boston of Faversham: My Lords, can the Minister say anything about the extent to which claims for compensation are still anticipated and in particular about how those relate to merchant shipping?
Lord Trefgarne: My Lords, I am not aware of any significant claims that remain to be assessed, but if the noble Lord is aware of any, I shall be happy to look into them.
Lord Taylor of Blackburn: My Lords, is the Minister aware that the cost mentioned represents the cost of 15 new hospitals and 25 large comprehensive schools in the United Kingdom?
Lord Trefgarne: My Lords, I am aware that the total sum of money is very large, but freedom does not often come cheap.
Earl Lloyd-George of Dwyfor: My Lords, can the Minister tell the House whether the detection and lifting of mines in the Falklands is still proceeding satisfactorily? In addition, is it not a fact that the failure of the Argentines during the hostilities to keep adequate records of such minefields under the Geneva Convention has made that operation even more hazardous than usual?
Lord Trefgarne: My Lords, it is the case that a large number of mines in the Falkland Islands remain in position and have not yet been removed. We are working very hard to devise methods of doing that, but, as the noble Earl may be aware, plastic mines are particularly difficult to deal with in that way.

Overseas Aid and UK Exporters
3.4 p.m.
Lord Constantine of Stanmore: 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 percentage of overseas aid programmes to developing and third world countries are on a bilateral basis, to ensure support for United Kingdom exporters of products and services, as opposed to a unilateral basis which gives no guarantee of return to United Kingdom exporters.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, in 1983, 59 per cent. of the total aid programme was provided on a bilateral basis.
Lord Constantine of Stanmore: My Lords, I thank the Minister for that reply, but I am sure that she would agree that America, Germany, France and Japan all have very much larger aid programmes than Britain and that they devote a great deal—more, I think, than our percentage—to bilateral deals. Is it not therefore desirable that, with £1.6 billion of British allocation for aid, we should do everything possible to increase our bilateral deals with the rest of the world to the benefit of our exporters?
Baroness Young: My Lords, bilateral aid is normally tied to the purchase of United Kingdom goods and services. In poorer countries we finance some project costs incurred in local currencies. But in 1983 about 75 per cent. of the bilateral programme was tied.
Lord Hatch of Lusby: My Lords, am I right in believing that the noble Baroness is answering this Question as though the word "unilateral" meant "multilateral"? If so, is it not the case that firms in this country get a great many orders from multilateral as well as bilateral aid? For example, do we not receive back in orders almost as much from UNICEF as we contribute to it?
Baroness Young: My Lords, in 1983 our bilateral aid programme financed the purchase of about £453 million worth of goods and services from British industry; but it is also true that British firms benefited from our multilateral aid. In 1983 British firms secured business worth some £446 million through multilateral agencies. I cannot give the noble Lord the precise figures for UNICEF.
Lord Oram: My Lords, in addition to the example that my noble friend Lord Hatch gave, is there not another most important example of multilateral aid leading to benefit for British exporters; namely, the International Development Association? Do we not get more than a pound for pound advantage from our contributions to that fund? On the other hand, is not the tying of aid sometimes prejudicial to the achievement of desirable results? For example, is it not desirable to untie the £15 million which the noble Baroness told me the other day is being allocated to support the special Africa fund? Can the Minister say whether any decision has yet been made to untie that element of aid?
Baroness Young: My Lords, on the last point of the noble Lord's supplementary question, the matter of whether the special facility aid money will be tied or untied is still to be determined. On the first part of his question, I would accept that the fundamental purpose of our aid programme is to promote the long-term growth of developing countries, but the Government believe in supporting British firms where we can.
Baroness Gardner of Parkes: My Lords, will the Minister confirm that the money given by this country to the Voluntary Fund for Women, set up by the Decade for Women, has been given without strings, and really is of great benefit to the people receiving it and gives benefit to those in this country in that we are helping the poorest to help themselves?
Baroness Young: My Lords, it is always difficult to comment without notice on a specific case, but I would agree generally with what my noble friend has just said.

North Sea Oil: Production
3.8 p.m.
Lord Stoddart of Swindon: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to introduce measures in 1985 to encourage enhanced oil production from existing North Sea oilfields.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, the Government have under review the possibilities for additional measures to encourage enhanced oil production from existing fields in accordance with their policy of achieving maximum economic recovery of petroleum from the United Kingdom Continental Shelf.
Lord Stoddart of Swindon: My Lords, may I thank the noble Lord for his helpful reply? Will he confirm that incremental oil from a large existing oilfield could very well be equal to the total capacity of a new marginal field? Can he assure me that the Government are keeping closely in touch with research and development into techniques to recover that substantial potential increment to our oil supplies and are addressing themselves to the problem of financial incentives to encourage the exploitation of incremental oil?
Lord Gray of Contin: Yes, my Lords, I can confirm to the noble Lord the points which he asked me about. My right honourable friend the Chancellor of the Exchequer announced during his 1984 Budget speech in another place that the Government would be reviewing the fiscal treatment of incremental investment in existing fields. It will of course be for the Chancellor to announce the outcome of the review in due course. The Government keep in touch with techniques for enhanced oil recovery used in other countries, though it must be noted that these techniques have so far been developed with the landward rather than the offshore production of oil in mind. So far as offshore oil is concerned, they are still in their early stages.
Lord Parry: My Lords, will the noble Minister have a mind to mention the Celtic Sea under the general heading of this question?
Lord Gray of Contin: My Lords, I am sure that my right honourable friend the Secretary of State for Energy will be delighted to think that there are many who still have confidence in the reserves or the potential reserves of the Celtic Sea.
The Earl of Lauderdale: My Lords, will my noble friend agree that the last very helpful fiscal incentives to the oil industry were provided in the Budget after some three years of pressure by the United Kingdom Offshore Operators Association, supported, indeed, by the department of which he was a distinguished Minister of State? Will he therefore press the Treasury to hurry up with this study and make sure that another three years do not have to pass before the excellent arguments of the oil industry are accepted and then boasted about afterwards by the Government?
Lord Gray of Contin: My Lords, I think that my noble friend was perhaps being a little unfair on the Government there. After all, the decisions which were taken in the Chancellor's Budget of 1983 have led to the enormous increase in exploration in the North Sea. The point which he makes, that further incentives should be given in some future Budget, will certainly be noted and I have no doubt that the Chancellor is considering all these matters in preparing his Budget.

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But of course I have no idea if this features among the priorities.
Lord Cledwyn of Penrhos: My Lords, given our dependence on North Sea oil revenue, can the noble Lord give us an up-to-date estimate of the effective and practical life of the North Sea oilfields?
Lord Gray of Contin: My Lords, I am sure your Lordships will appreciate that is an extremely difficult question. The Department of Energy at the present moment claim that we shall be self-sufficient in oil until the end of this decade, although there is little doubt that we shall be taking oil from the North Sea after the end of the century.

NATO Exercise: WINTEX-CIMEX
3.13 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 whether the NATO exercise WINTEX-CIMEX will have any practical implications for civil liberties and human rights in the regions affected.
Lord Trefgarne: Certainly not, my Lords. Although details of the exercise are classified, I can say that it is designed to test military command and control procedures and is firmly based on NATO's deterrence strategy. It is thus helping to preserve the civil liberties and human rights which we enjoy today.
Lord Jenkins of Putney: But, my Lords, is the noble Minister not aware that the exercise includes aspects of what is being called civilian control? Will he confirm that a list of some 25,000 people has been drawn up, a list consisting of those whom the Prime Minister referred to as "the enemy within"? Is the Minister aware that I shall take it gravely amiss if I am not on the list?
Lord Trefgarne: My Lords, I shall have to see what I can do for the noble Lord.
Lord Boston of Faversham: My Lords, I do not invite the Minister to include me in that, anyway. Can he confirm that local authorities are not involved in this exercise? If that is the case, can he say why they are not being involved, in view of the fact that according to Mr. Stanley, in another place last year, the intention of the exercise is to cover the whole spectrum of a crisis and it is somewhat difficult to see why local authorities should not be involved in view of the civil defence aspects of this?
Lord Trefgarne: My Lords, I cannot go into the details of the scenario of this exercise, as I have said. However, as I have already explained, the exercise is designed to test the full spectrum of NATO's procedures and plans for crisis management in times of tension and war. I am certain that it will do that.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that he appears to have contradicted
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himself in his answers? So far as his first Answer was concerned he appeared to suggest that civilians were not at all concerned in this matter. However, regarding his second answer, he did not deny that a list of potential arrestees had been drawn up.
Lord Trefgarne: My Lords, I do not want to contribute to the noble Lord's fertile imagination, if he will forgive me for not doing that. However, I can tell him that this exercise has been very carefully planned and there will be no question of civilian participation along the lines that the noble Lord suggests.

Business
3.15 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Gray of Contin will, with the leave of the House, repeat in the form of a Statement an answer to a Private Notice Question in another place on the mining dispute. This will be followed by my noble friend Lord Glenarthur who will, with the leave of the House, repeat a Statement on the limited list of National Health Service drugs. This will be followed by my noble friend Lord Young of Graffham who, again with the leave of the House, will repeat a Statement on Skillcentres.

Child Abduction and Custody Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to introduce a Bill to enable the United Kingdom to ratify two international conventions relating respectively to the civil aspects of international child abduction and to the recognition and enforcement of custody decisions. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Land Registration and Law of Property Bill [H.L.]
The Lord Chancellor: My Lords, I beg to introduce a Bill to restrict the circumstances in which the rights of persons in occupation of registered land constitute overriding interests for the purposes of the Land Registration Acts 1925 to 1971 and in which purchasers of unregistered land are affected with notice of the rights of persons in occupation of the land. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Trustee Savings Banks Bill
Brought from the Commons; read a first time, and to be printed.

Valerie Mary Hill and Alan Monk (Marriage Enabling) Bill [H.L.]
3.18 p.m.
Viscount Massereene and Ferrard: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Viscount Massereene and Ferrard.)
The Lord Bishop of Gloucester: My Lords, I hope it will not be thought inappropriate by this House, or by the noble Viscount, Lord Massereene, if a brief interjection is made from these Benches, even at this stage in the progress of this Bill. Your Lordships may recall the speech made by my right reverend friend the Lord Bishop of Ely when this Bill was being read a second time. In it, he referrred to the report entitled No Just Cause, produced by a group led by the noble Baroness, Lady Seear. May I on behalf of the bishops and others in the community reiterate the gratitude which we felt and expressed for that report in our discussions?
However, at the time of the Second Reading of the Bill now before us it was not possible to give any particular expression to the corporate mind of the bishops, as they had had only a preliminary discussion of the report with no conclusions drawn. I can now report to your Lordships' House that the House of Bishops at a meeting last month was able to give time to a further discussion of these matters of principle raised in the report. As the minutes of that house record, on the question of marriages between parents-in-law and children-in-law the House of Bishops resolved, by 36 votes to one, to endorse the recommendations of the minority of Lady Seear's group; namely, that the existing impediment to such marriages should be retained. I believe it is only right that this should be reported to your Lordships' House.
However, it is equally right to point out that the House of Bishops has had no discussion whatsoever on the particular case of Mrs. Hill and Mr. Monk. It would therefore, in my judgment, at least, be going too far to assume that the bishops would necessarily take any particular view in regard to this Bill. As my right reverend friend the Bishop of Ely suggested on Second Reading, one can be cautious in principle and at the same time acknowledge that the circumstances of individuals, in all their complexity, may justify certain exceptions, given the present state of the law regarding personal Bills. The bishops' main concern is, and, I am sure, will be, to affirm and strengthen the bonds which secure family life in our society. The target that they have in their sights, so to speak, is not this particular Bill, but the debates on affinity in principle which they expect in due course following the publication of No Just Cause.
Lord Mishcon: My Lords, at the Second Reading of this Bill, dealing with the private lives of two human beings, the House exercised its usual diligence and care in considering matters of this kind. Many of us felt that there were special considerations that deserved our sympathy in this case. I rise on this occasion only to repeat something that I ventured to say on Second Reading on behalf of my noble friends. It was that we
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should consider at a very early date whether it is the correct procedure and the most human procedure that exceptions to our general law, as it stands at the moment, should be considered in this way in public in your Lordships' House. There must be more suitable, more private and more compassionate ways of dealing with matters of this kind. That is the only contribution that I have to make on the Bill this afternoon.
Lord Lloyd of Kilgerran: My Lords, I support the Third Reading of the Bill having at one stage brought in a Bill designed to achieve what the noble Lord, Lord Mishcon, has indicated—to avoid the almost inhuman approach that is necessitated by the procedures for dealing with these matters. I listened with great care to the right reverend Prelate. I hope that the Bench of Bishops will adopt their usual compassion in relation to matters of this kind. I hope that it will be possible in the near future to find a procedure that is far more satisfactory than the present procedure for the purpose of dealing with this kind of situation.
The Earl of Lauderdale: My Lords, having just listened to the noble Lord, Lord Mishcon, as we did on Second Reading, I should like to express the same view. It is most unpleasant for this House to be confronted with personal, private and intimate details of a situation of this kind. I support ardently and most sincerely his view that we must find a different and better procedure.
The Bill has practically completed its progress through this House. Before that final stage is reached, three points need to be made and should be made. At any rate, I feel that I must make them. Those of us who have intervened, whatever view we take, have had in mind three points. First, this is a private problem. Secondly, the most important need for society as a whole, whatever our religious beliefs or scepticism, is that the family should be preserved as an institution, with barriers to protect it as a desexualised institution for the protection and upbringing of the young. Thirdly, as the right reverend Prelate has said, there has been an overwhelming vote in the House of Bishops which enables those of us who are members of the Anglican Communion—I am a Scots Episcopalian—to take, with the backing of authority and scholarship, a much firmer and clearer line than we might otherwise have taken. In this case, it is to support the minority report of the very interesting service rendered to us by the noble Baroness, Lady Seear, and her committee in their study of the matter. Finally, it is worthwhile, and proper to warn that if there is another occasion of this kind, the promoters should not assume that they will win approval for their Bill so easily as has happened this time.
Viscount Massereene and Ferrard: My Lords, I would have been happier, though I am sure that it is not the right reverend Prelate's fault, had I been informed that he would be speaking on this subject. I am no ecclesiastical—if that is the word—or theological expert, but I agree with those noble Lords who have spoken that it is embarrassing for the couple involved to have their names dragged through Parliament. I hope that in the future other arrangements can be made. As my noble friend Lord Lauderdale has

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said, this Bill now before the House for Third Reading has gone through 90 per cent. of its stages. Nothing can therefore be done about it, presumably, at this stage.
As I remarked in Second Reading, there were extenuating circumstances and perhaps exceptional circumstances in this case. The most important was that concerning the upbringing of the children. I thank the noble Lords who have spoken. I believe that we now have to vote—
Noble Lords: No
Viscount Massereene and Ferrard: My Lords, I beg to move that the Bill be now read a third time.
On Question, Bill read a third time, and passed, and sent to the Commons.

Milk (Cessation of Production) Bill
3.28 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that this Bill be now read a second time. The main purpose of this Bill is to provide the necessary statutory authority for payments under the milk outgoers' scheme. The supplementary levy and milk quota arrangements were introduced in April last year in an attempt to achieve an immediate cut in production in most member states of the European Community. Over-production of milk in the Community had been escalating over a number of years and disposal of the surplus was placing a growing burden on the Community budget. By March last year, with up to £10 million a day being devoted to the milk sector alone, clearly urgent action had to be taken.
When it became clear that other member States were not prepared to agree to price reductions necessary to achieve a rapid drop in output, there was no alternative but to accept the introduction of quotas, and the supplementary levy. Under the levy system, most member states, including the United Kingdom, have been allocated national quotas based on the amount of milk delivered to dairies and other undertakings or sold for direct consumption in 1981, plus 1 per cent. In the United Kingdom the introduction of quotas meant that producers were required to cut their production by about 6¼ per cent. in 1984–85 by comparison with 1983 in order to avoid liability for supplementary levy on excess production. A futher cut of some 2½ per cent. was then imposed on producers in order to create a reserve of quota to ease the difficulties of certain producers in special situations. Thus, overall, producers in the United Kingdom have had their primary wholesale quota allocations—that is, their basic quotas—set at 9 per cent. below their 1983 production levels.
Quotas have fallen particularly hard on the smaller producers—those with up to some 200,000 litres of annual milk production, representing about 40 cows in the herd. These small producers represent a very considerable proportion—some 40 per cent.—of all milk producers in the United Kingdom, and it is their difficulties which our milk outgoers' scheme is particularly designed to alleviate.
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Under the Community levy rules, member states are allowed to compensate producers who go out of milk production by giving them grants out of national funds. The purpose of these grants is to assist any necessary restructuring of the dairy industry following the imposition of quotas. These grants are intended to provide farmers with the necessary cash payments to allow early retirement or to switch production. Those are just two examples; doubtless in practice there will be others. But, for whatever reasons, those farmers giving up production will help those who wish to carry on because the quota they surrender may be reallocated to other producers who will then be able to produce more without incurring liability for levy.
All member states, with the exception of Denmark, Greece and Luxembourg, have chosen to make use of this provision in the Community regulations to introduce nationally-funded outgoers' schemes. The various schemes all differ markedly from one another to reflect different circumstances and different aims. The response of producers in Great Britain at least shows that we have pitched the payment, which comes to about £650 per cow, assuming a yield of about 5,000 litres annually, at about the right level. The indications are that we should get the amount of quota we are seeking and that the number of producers who wish to but cannot join the scheme will be very small.
In the United Kingdom the deadline for applications for this scheme was 28th August last. So far, already over 1,000 producers have been paid and have given up their quota. The fact that the scheme is so far advanced prompts the very reasonable question: why the need for the present Bill? The answer lies in the fact that under our outgoers' scheme we have made provision to spend up to £50 million over a period of five years. Spending this amount of money over this length of time requires, for reasons of constitutional propriety, specific statutory authority. Had we been under a Community obligation to introduce the outgoers' scheme, we would have used existing powers under the European Communities Act. But the Community outgoers' provision is permissive only and we therefore need to have the specific legislative authority provided in this Bill.
The actual authority for these payments is provided by Clause 1 of the Bill. Clause 1 enables payments to be made to producers who, in return, undertake to give up milk production and surrender their quota. This is in line with existing Community rules. Following an amendment tabled at Committee stage in the other place, which was accepted by the Government, Clause 1 also now makes it possible for payments to be made to producers who reduce their production and surrender a corresponding part of their quota. The Government felt that although partial surrender of quota is not at present permitted under Community rules it might, if the rules were changed, introduce further much-needed flexibility into the quota system. There is no indication at present that the regulations are likely to be amended to allow this. However, if at some time in the future it is allowed we shall have the necessary legislative authority to put it into effect in Great Britain through any future scheme.
Clause 1 further provides that statutory schemes for paying out compensation to milk producers may be set up. It is clearly sensible to take these powers now so

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that they will be available if a future statutory scheme is ever required. But, once again, I must warn the House that at the present time the Government have no plans to introduce a further outgoers' scheme. Clause 1 also provides that any money paid out under a scheme may be recovered if the person who receives the payment fails to comply with the conditions laid down; for example, if he were to return to milk production. Clause 2 provides powers of entry on to land and access to records. This is to enable checks to be made to ensure that producers receiving outgoers' payments are not engaged in milk production.
I think the rest of the clauses are self-explanatory, except perhaps for two. Clause 5 defines the Ministers who may exercise functions under the Bill. It means, in effect, that any future schemes could be made by my right honourable friend the Minister of Agriculture, Fisheries and Food, and also my right honourable friends the Secretaries of State for Wales and for Scotland, acting either individually, or together in any combination. The other clause I have just referred to—Clause 6—is the one which applies to Northern Ireland. Our existing outgoers' scheme applies throughout the United Kingdom, but for constitutional reasons this Bill does not apply (with the exception of course of this clause) to Northern Ireland. Clause 6 simply provides that an Order in Council for Northern Ireland which is made for the same purpose as in Clauses 1 to 3 of the Bill shall be subject to the negative resolution procedure. I understand that my right honourable friend the Secretary of State for Northern Ireland intends to lay an order before Parliament immediately after the enactment of this Bill.
As to the way in which the outgoers' scheme is working, I am sure many of your Lordships will know that tenants in England and Wales have to have their landlords' written consent before they can join the outgoers' scheme. In the early days of quotas we tried to bring the landowning and farming interests together to see whether they could agree on procedures allowing tenants to become outgoers without their landlords' consent. However, the two sides were unable to reach agreement. As a result, we felt we had no choice but to require landlords' consent in all cases. Had we not done so, apart from the obvious problems of equity where the landlord had made considerable investment in dairying there would, so I am advised, have been a risk of certain legal difficulties. If a tenant joined the outgoers' scheme and surrendered his quota without the landlord's consent it might have been possible, depending on the terms of his lease, for his landlord to sue him for breach of contract.
Moreover, the landlord might have been able to claim that the Minister had incited the tenant to break his contract. This is a scheme which is based on a contract between the Minister and the producer, and is therefore based on contract law and not on statute. Despite the lack of a formal agreement between the landowning and farming interests, a substantial number of tenants in England and Wales have been able to become outgoers. Part of the credit for this must go to the president of the Country Landowners' Association, who has urged his members to listen carefully to every tenant who wishes to become an
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outgoer and to be as accommodating as possible. In Scotland, the various interests were able to agree on more favourable arrangements for tenants, and these also appear to have worked reasonably well.
The aim of the scheme is to buy up 289 million litres of quota in England and Wales. The producers who initially expressed interest in the scheme had between them about four times as much quota as was wanted. We knew from the start that a considerable proportion of these would drop out, but because the scheme was evidently over-subscribed, we had to decide which producers should be given priority. We started by inviting the smaller applicants to join, and when some of these dropped out we invited some bigger ones to come in. By last week we had sent firm invitations to all those with up to 500.000 litres of quota to offer. Now, in order to speed up the final stages of the scheme, we are writing to all the remaining applicants asking them to state whether they will wish to join the scheme. Our intention is that by the end of March all those who say they are still interested will be told definitely whether or not it is possible for them to join the scheme.
Although the drop-out rate at each stage has been fairly high, the scheme is operating satisfactorily in England and Wales and we believe we shall achieve our target of 289 million litres. The same is true of Scotland, where the target is 30 million litres. In Northern Ireland the position is less satisfactory, and my right honourable friends are looking to see if there are any ways of dealing with the problem there.
The precise arrangements for re-allocation of outgoers' quota will vary somewhat between England and Wales, Scotland and Northern Ireland in the light of local circumstances and priorities. In England and Wales our intention is to help small producers—those with less than 40 cows—and exceptional hardship cases.
So far as small producers are concerned, our intention for next year is to increase the quotas of all producers whose main occupation is farming and who have less than 200,000 litres of quota. The increase will be sufficient to bring these farmers back to their 1983 production levels, provided those levels are not above 200,000 litres.
So far as exceptional hardship cases are concerned, our intention in 1985–86 is to give producers the full amounts awarded by the tribunal. I should emphasise that what I have said, both about small producers and about exceptional hardship cases, is subject to a final check of the figures once we know exactly how much quota is required. The remaining quota available next year, after meeting the needs of exceptional hardship cases and increasing the quotas of small producers up to their 1983 production levels in the way in which I have described, may be used to help producers who are awarded development quota by the tribunal; that is, producers engaged in expansion programmes whose awards will have been pruned back in 1984–85 to keep within the total amount of quota available. I have to say that at the moment it looks as if the cut in those awards in England and Wales may be at least 35 per cent., or, indeed, more. Next year, we hope to be able to reduce that cut by using any of the spare outgoers' quota.

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Finally, because producers who became outgoers will have used a significant part of their quotas before joining the outgoers' scheme, the total amount of quota available for re-allocation in what remains of this year will be substantially less than that which will be available for a full year when we come to the next marketing year, 1985–86. Therefore, in 1984–85 we envisage using all the outgoers' quota which is becoming available to help the exceptional hardship cases.
Although, as my right honourable friend said in another place, this is a short Bill and comparatively narrow in scope, it is nevertheless of great importance to many dairy producers in Great Britain. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Belstead.)

The Miners' Strike
3.43 p.m.
Lord Gray of Contin: My Lords, with the leave of the House, I shall repeat in the form of a Statement the Answer to a Private Notice Question given by my right honourable friend the Secretary of State of Energy in another place. The Statement reads as follows:
"Mr. Norman Willis, on behalf of the TUC, held a series of discussions with the Chairman of the National Coal Board. As a result of these discussions proposals were prepared by the board which expressed the basis upon which an agreement could be reached on the main issues of the dispute. These proposals took account of the views Mr. Willis had expressed to the board.
"Over the weekend the TUC showed this paper to the NUM executive, who asked for amendments to be made. The coal board confirmed to the TUC that this was their final paper. The TUC then requested a meeting with the Prime Minister.
"The TUC confirmed to the Prime Minister that the proposals under discussion would, if agreed to, constitute the final agreement on all of the matters which they dealt with, and that they were not a document which would be an agenda or form the basis of any further negotiations on these issues.
"The TUC explained to the Prime Minister that they had a number of difficulties with the document, and my right honourable friend undertook that I would convey their views to the National Coal Board. This was done, and subsequently the seven TUC leaders asked to have further talks with me before they met the National Coal Board. During these talks I clarified the Government's desire to see that the new NACODS procedures were brought into operation as speedily as possible, and that it was the coal board's intention that they would be in place by the time they were needed. I explained that neither the board nor the Government could accept a position where if the NUM refused to agree to the detail of the independent body, no review procedure would exist. For this might have the effect of the NUM being able to frustrate any reasonable plans for closure. The document was therefore amended to express the desire of all parties to see that the new
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procedures were in operation by 1st June, which would be well in time for any disputed closure to be referred to the independent body.
"The document was further re-ordered to meet the NUM's anxiety that its sequence as originally drafted could have implied that disputed closures would take place prior to going through the proper procedures. A re-ordering of the document made it perfectly clear that a disputed closure will only take place at the end of the agreed procedures.
"I share the TUC's disappointment that the NUM executive has rejected the proposals which had been made. The NUM executive have now rejected proposals in seven rounds of talks, the compromise proposal put forward by ACAS and the proposals prepared following discussions between the TUC and the National Coal Board.
"I deplore that the generous and reasonable offers now available to miners continue to be rejected by the NUM executive. Those coalfields which originally balloted voted overwhelmingly against strike action. I can only urge those miners still on strike, though deprived of a ballot, to return swiftly to normal working, so that the damage being done to their industry, to their families and to their communities can come to an end."
My Lords, that concludes the Statement.
Lord Stoddart of Swindon: My Lords, I thank the noble Lord for repeating in the form of a Statement the Answer given by his right honourable friend to the Private Notice Question which was asked in another place. I should also like to express appreciation of the tireless efforts of the TUC and, in particular, of Norman Willis to bring about an early settlement of this tragic (and that is all that it can be called) coal industry issue.
First, will the noble Lord confirm that the National Coal Board has accepted the new document in its entirety? Will he also tell us whether the National Union of Mineworkers have, in fact, made substantial concessions and have, indeed, now accepted the NACODS settlement as being applicable to them? Furthermore, is it possible that the rejection of the latest document by the National Union of Mineworkers has arisen from a simple misunderstanding? If that is so, would not the best way forward be through immediate, direct negotiations between the National Coal Board and the National Union of Mineworkers? Will the noble Lord, in the interests of harmony, take this opportunity to refute suggestions that his right honourable friend the Secretary of State and the National Coal Board have now adopted a hard line—a "take it or leave it" attitude?
Lord Ezra: My Lords, I, too, should like to express appreciation for the Statement which has just been made by the noble Lord to keep us informed of the latest developments in this important and distressing situation. I, too, should like to join in the tribute which has been paid on both sides to the tireless efforts of Mr. Norman Willis and the TUC in seeking to find a solution. I think that it already marks some progress in this tragic dispute that the intervention of the trade union organisation has been of such a positive nature.

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Let us hope that it will not be put off by the rebuff that it seems to have suffered on this occasion.
Would the noble Lord not agree that, in spite of the length of time that this unfortunate strike has lasted, the coal industry of Britain still has good prospects, but that those prospects will undoubtedly be further damaged the longer this strike goes on? What is now important is that there should be a quick return to work, a major effort to get production moving again and, as there appears to be general agreement for the revised colliery review procedure, a determined effort to get that procedure working satisfactorily. Therefore, will the noble Lord not agree that these are the objectives to which all those who are keen to see this dispute resolved, both outside and inside the industry, should be setting their minds?
Lord Gray of Contin: My Lords, I am grateful to the noble Lord, Lord Stoddart, and to the noble Lord, Lord Ezra, for the comments they have made. I think we are all agreed that this is a disastrous strike and that all those who have the best interests of the mining industry at heart are doing their utmost to try to ensure that it is resolved very quickly indeed.
The noble Lord, Lord Stoddart, first asked whether the National Coal Board accepted the new document. The answer to the noble Lord's question is, Yes. The noble Lord also asked me whether the National Union of Mineworkers had accepted the NACOD's agreement. There is no indication that they have accepted the NACOD's agreement. Up until now the leadership of the National Union of Mineworkers has prefaced all its comments, despite its request for talks without preconditions, by the one condition which is totally unacceptable to all other interested parties, and that is that no pit can be closed for economic reasons. That of course is at variance even with Plan for Coal, which recognises that under certain circumstances that cannot be achieved.
The noble Lord, Lord Stoddart, asked me one straightforward question which I wish I could answer in the affirmative. He asked, did I consider that the rejection of the present proposals was simply due to a straightforward misunderstanding? I do not think that that is the case. I do not think that there is any misunderstanding whatever. Indeed, after the meeting with the Prime Minister and after the subsequent meetings with the Secretary of State for Energy, no doubt whatever was left in the minds of those who were present as to the conditions which were on offer. Perhaps I may quote from the letter from the Chairman of the National Coal Board to Mr. Norman Willis on 20th February, in which he stated:
"The Secretary of State confirmed"
and this is very important—
"that it was the view of the TUC that the document that we had prepared subsequent to discussions with you was a document that, if agreed to, would for all of the matters dealt with in this document be the final agreement and was in no way a document which would be an agenda or form the basis of any further negotiations".
That was made absolutely clear. When one considers that the seven TUC representatives who took part in this discussion were of the stature of Norman Willis, Jack Eccles, David Basnett, Ray Buckton, Moss Evans, Bill Keyes and Gerry Russell, it seems very
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hard to believe that a team of that calibre would take back to the National Union of Mineworkers a document which they describe as being less favourable than that which had originally been offered.
The noble Lord, Lord Ezra, asked me to confirm that there were good prospects within the industry. As a former Minister of State at the Department of Energy when the noble Lord was Chairman of the National Coal Board, I would certainly confirm that there are excellent prospects in the industry, and the Government's commitment to the Plan for Coal and the amount of money which has been pumped into the industry by the present Government since 1979 fully confirm the Government's commitment to the Plan for Coal. However, I am afraid that a great deal of that money will be wasted unless we can get a quick return to work.
When we consider that already during the present dispute no fewer than 38 producing faces have been lost, it is a tragic situation that we cannot persuade people to accept the best offer which has been on offer to the industry since nationalisation. I can only reiterate what my right honourable friend in another place has already said—that there is only one action left to those who want to see the mining industry continue and to thrive in the future, and that is to return to work and register their approval of what is on offer.

Milk (Cessation of Production) Bill
3.55 p.m.
Second Reading debate resumed.
Lord John-Mackie: My Lords, the Minister put the case for the Bill very well and we thank him for doing so. He also explained—and we all agree with him—that there was very good reason for action because of the milk surpluses costing the Community an enormous amount of money. Therefore, we thoroughly agree that action had to be taken.
However, as the Minister almost admitted, one way and another there has been a considerable amount of uncertainty over this scheme. I need not go into that; it was well aired in another place and, as the Minister has said, account was taken of it in an amendment to the Bill that has now come before this House. We now have the Bill. But I must say that the Bill is still not very definite about how the scheme will work. Like a Bill which we were discussing recently, this Bill contains many powers to enable the Minister to change his mind and make alterations. I can quite understand that that is necessary because much of it is tied to what the Community might do in the future.
However, that does not help farmers to reach a decision, although the Minister has given some figures as to how many farmers have applied to be included in the scheme. I gather that the initial amount available over five years is £50 million. That is probably an estimate and we are not sure whether it is enough. If it is not enough, can the Minister persuade the Treasury to produce some more? There is usually a difficulty there. Is the figure of £130 a year over the five years a final figure, being a total of £650 a cow? Five years is a long time. We do not want inflation to increase, but even with 5 per cent. inflation it does not seem to be a very good deal to divide the £650 over five years.

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The Bill will come into force two months after it becomes an Act. I hope that there will be no delay after it has become law. The noble Lord has indicated that his Ministry have all the arrangements in hand. But we can all remember the shambles there was when the quota scheme came into operation, and the alterations that were made and the continual doubts among farmers as to how it would work.
The Minister referred to the number of farmers who have already applied and I believe he said that they had received 1,000 firm applications and that they had been dealt with. As the noble Lord said, it is difficult to visualise how many people will go in for the scheme. Can he give us some idea of how the estimate is made? The noble Lord said that many people have withdrawn and that invitations have been sent out inviting them back again. I wonder if he could help us over how many and the amount of milk that it represents.
The noble Lord mentioned that this Bill was to help the small producers. Does he think that it will apply mainly to small producers and do the Government really want the small producers to go? I cannot think what a small producer will do. He cannot go in for cereals; beef is not very attractive. I think it will be a pity if the Government indicate that they really want small producers to go. The Minister said that we have some ideas as to figures. What is going to happen to all the cows? This is a difficult situation. Are they to be slaughtered? If they are not to be slaughtered they are going to go into milk production elsewhere, producing over the quota if other farmers buy them. If they are slaughtered this will further depress the beef market, which is not particularly good anyway. The repercussions there could be quite bad for beef farmers.
The Minister went into the question of what arrangements they have made about a tenant farmer; he has to get written permission from his landlord. This is a difficult one. It is hard on a tenant who wishes to go out of milk and his landlord says no. I know the Minister made the point that it depended on how much of the fixed equipment for milk production the landlord had provided. He would naturally give him precedence there. But I still think that there are not enough arrangements being made in tenant rights between a landlord and tenant about this and about the question of the quota. We really have an added complication here. I think the Minister said that the CLA would accommodate farmers as best they could, but I do not think that that is enough.
I am sorry to ask the Minister so many questions, but he must admit that this is a major restructuring of the biggest section of our agriculture and will have far-reaching effects for many farmers outside the dairy industry. What many of them are asking is whether fellow farmers in other parts of Europe are being treated the same. I know that rumours are a bad thing to quote but nevertheless we hear rumours that they are getting a much better deal, particularly in Italy. However, in no way would I suggest that we should delay this Bill. It is necessary to get it through as quickly as possible so that the scheme can go on. The Government are committed to the scheme, so the sooner it is on the statute book the better so that farmers can make up their minds.
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The Minister went into the question of whether there were enough people likely to go out to top up the quotas of those who had hard cases. I hope that there will be, and he indicated that the calculations were about right. But then he indicated that there would be a future supply of extra quota which would be distributed, I forget at what time. But we still have an enormous surplus of milk, and this scheme of quotas and going out of production is only tackling just over 50 per cent. of it. I forget what the surplus that is left is costing the Community per year, but the Minister needs to be very careful before suggesting that there would be a further topping up of quotas when the situation in two, three or four years' time will be just as bad as it is now. However, I hope the Minister can answer some of these questions, and in the meantime we support the Bill.
4.4 p.m.
Lord Walston: My Lords, I am tempted to take this opportunity to develop an indictment of the Government for having made this Bill necessary at all. I would indict them on grounds of short-sightedness; of having failed to foresee the situation many years ago when it was clear to any of us who studied the matter that this was going to happen and that drastic steps had to be taken; of having agreed with the Commission to the introduction of a barely thought-out scheme leading to many anomalies, many difficulties, and great hardship. In addition to that, I indict them for pinning their faith, as I know they have done and I gather they still do, to the theoretical idea that the way to control surpluses in farming is purely by the price mechanism, and only when that fails does one have to resort to something of this sort.
That is not possible whether it is for milk, whether it is for wheat, for sugar beet, or for any other commodity. The only way in which this can be done is by the system that the Government have now been forced into adopting—the system of quotas—but all I would urge on this particular subject is to accept that and to plan ahead for the future when the surpluses of other commodities become insupportable rather than forcing upon producers of those commodities the hardships, the difficulties and the uncertainties that this rapid action has necessitated.
But that temptation, as you will see, I am forgoing. I will not follow through that indictment, much as I should like to. It is all, if I may coin the phrase, milk under the bridge; whether the milk be milk in butter, or from the mountain, or whether it be dried milk powder.
However, there are one or two questions I should like to ask the Minister with regard to this Bill. The first concerns the matter of the landlord and tenant situation, which the noble Lord, Lord John-Mackie, raised. It really is deplorable that it has been impossible to get agreement between landlords and tenants in this matter. I fully realise the interest that both parties have in this; interests which in some cases are almost entirely on the side of the producer and in others far more evenly spread, but I hope that the Government are continuing to try to get some agreement between landlords and tenants in this matter so that those who wish to give up milk production and gain the advantages from this scheme

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will not be in future prevented from so doing because they have failed to obtain their landlord's permission.
The other point about which I should be grateful to the Minister if he could give us some indication is the allocation of the additional quotas. He mentioned it briefly. Will the Ministry be guided in allocating quotas to give the increased quotas, so far as possible, to those where the hardship is greatest? If so, how will they assess the actual hardship? Will they give them only on the grounds of the size of the herd, as appeared probable from what the Minister was saying?
Will they be guided in any way by regional considerations so as to keep a reasonable supply of milk in all the regions of the country rather than letting one area be completely denuded and allowing other areas to stay roughly as they are? Or will they be guided by principles laid down in the Treaty of Rome, for instance, or rather the common agricultural policy? The commodity in question—milk in this case—should be produced in those areas which are most suited to it; in other words, in the West Country and in certain other parts of the United Kingdom at the expense of other areas. If he can tell us what sort of guidelines his Ministry is following in this, it would be of great interest.
Having said that, I shall do no more than echo the noble Lord, Lord John-Mackie, and say that, given these circumstances, which should never have arisen but which have arisen, this Bill is the best way out of a pretty shabby little mess, and we therefore support it and hope that it will get on to the statute book as soon as possible.
Lord Belstead: My Lords, I am grateful to both noble Lords for their support of the Bill, but there is one point I should like to take up from the remarks made by the noble Lord, Lord Walston, because I think it is important. I know that the noble Lord, the Government, the Opposition Front Bench, the noble Lord, Lord John-Mackie, and other noble Lords in the House realise, and that we all accept, that something needed to be done about the milk situation. I gave a really astounding figure at the beginning of my Second Reading speech, saying that support for the milk market in Europe last March was costing £10 million a day. The total support for the year for the milk market in Europe was over £3 billion, rising towards £4 billion. The whole thing had become unsustainable.
If I may, I will pick up what the noble Lord said. The noble Lord took the British Government to task for not having seen this coming. I would only say that Ministers of Agriculture of both the Labour and Conservative Parties have drawn attention in the European Community to the dangers of the ever-escalating price of the common agricultural policy. The noble Lord, Lord Walston, said, on the one hand, that it was the fault of the Government for running into the great difficulties which milk quotas have caused, but, on the other hand, the noble Lord criticised the present Government for saying that we thought that through the price mechanism surpluses could be alleviated. I would only say to the noble Lord, with all his experience of agriculture, that if surpluses are not tackled either through some form of quota
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arrangement or through the price mechanism it is difficult to know in which other direction to go.
I would add to that, and repeat, that what we did consistently over a period of years was that many British Ministers of Agriculture drew forcefully to the attention of our Community colleagues the fact that unless something was done about the price mechanism we would inevitably reach a situation in which something else would have to be done which would hurt even more.
Lord Walston: My Lords, of course Governments of both complexions realised this. My complaint is twofold: that they were not sufficiently forceful to be able to carry their colleagues with them, and that they were not sufficiently thoughtful to put forward practical systems for quota restrictions many years ago—three, four or five years, even, before the noble Lord and his friends were there—so that this situation could never have arisen. My fear is that they are following the same ineffectual path with other commodities.
Lord Belstead: My Lords. I should be foolish if I did not listen to what the noble Lord says—and, indeed, I do. The noble Lord has long experience. But I would make two points by way of rejoinder. One is that I cannot help but reflect on the outvoting of the then Minister of Agriculture some two years ago when my right honourable friend Mr. Walker tried to use the Luxembourg compromise. It came to that, and it was a question of being outvoted. Then, to try to be more constructive in reply to the noble Lord, Lord Walston, in thinking of the future the present Government have used not only their best endeavours but their negotiating skills to get the Ministers in the Community to map out a firm financial plan for the future. We must now try to see that we stick to it.
After that brief exchange, I shall briefly try to reply to the questions which noble Lords have put to me. The noble Lord, Lord John-Mackie, asked me whether the £50 million was enough. In particular, the noble Lord said that it is spread over several years and that that, with inflation and other things, makes it less attractive. The £650 per cow, which is what it comes to—judging by the level of acceptances we are receiving from people who want to go out and make their quota available for people who want to stay in—shows that we have pitched it about right. Secondly, on the instalments point, this is the way in which payments have been made in the past. I am thinking in particular of the non-marketing of milk premium scheme and other schemes which the noble Lord will probably remember better than I do. Instalments can help with income tax liability, and it made it the more possible to make the £50 million available. It would have been the less easy to have found such a large sum in one year and in one year only.
I attach to that reply an important point which arises from another of the questions asked by the noble Lord, Lord John-Mackie. The noble Lord asked whether the Government really want to see the smaller farmer go out. I cannot emphasise too strongly that the beneficiaries of this scheme will be, first and foremost, the up-to-40-cows small producer who it is our firm

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intention should be brought back up to the 1983 level of production. Incidentally, the noble Lord, Lord Walston, was talking about regions. It is interesting that whereas farmers in Wales who have been particularly hard hit are offering only some 12 per cent. of quota, Wales will benefit to the tune of about 25 per cent. of the beneficiaries under the scheme.
When we asked the applicants whether, having made their original applications, they were really serious in wanting to go out and claim the money under the scheme, after a great deal of thought we decided that the only equitable thing to do was to start by asking first the smallest producers who had said that they wanted to go out. We did that. No pressure was brought to bear on them; they were simply asked whether it was their wish. Then we moved up through the applicants until at last we came to the largest applicants.
Lord Walston: My Lords, I have one short question about the payment which is being made to the farmers. What happens if a farmer dies during the intervening period? Will payment cease because it is personal to him, or will it be part of his estate and continue to be paid to whoever succeeds?
Lord Belstead: My Lords, I think the answer to that question is that it is part of his estate, but if I have that answer wrong I hope that I will receive some more advice before we finish, which may not be many minutes hence, so that I may be able to put it right. But I think that is the correct answer.
I should like quickly to answer one more question asked by the noble Lord, Lord John-Mackie. He quite rightly drew attention to the effect on the beef market, but not quite so accurately, with respect to the noble Lord in that he was not quite as optimistic as he might have been. The fact is that, although there has been an increase in slaughtering, producers of certified cattle have received over 98 per cent. of target price in the marketing year to date, and recently there has been 100 per cent. of target price. We have done our best to improve the beef market by more substantial intervention arrangements based on the carcase classification grid and by variable premium payments of from £2 to £3 million a week; and, of course, the suckler cow premium was doubled. Although I take the noble Lord's point that one has to keep a close eye on this, nonetheless I think things have been rather better than the noble Lord indicated.
The noble Lord, Lord Walston, particularly asked about tenants. The one thing that I ought to say to the noble Lord in reply is that, despite the fact that it has not been possible so far to say other than that the tenant in England and Wales must have permission of the landlord, it is interesting that, taking the percentage of tenants in Scotland who have said that they want to avail themselves of the outgoers' scheme as outgoers and the percentage of tenants who have their landlords' permission in England and Wales and have been able to say with permission that they want to avail themselves of the scheme as outgoers, the uptake has been only 8 per cent. less in England and Wales than the uptake in Scotland. I believe that it has not been working out too badly.
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Finally, the noble Lord asked me about the reallocations of quota by size, by hardship and by region. So far as exceptional hardship is concerned, all producers will be given their full award which they have been awarded by the tribunal; and may I at this point say how exceedingly grateful the Government are to the noble Lord, Lord Grantchester, who has been chairman of the Dairy Quotas Tribunal and who has done really marvellous work together with all the tribunal members.
On small producers, there will be no differentiation by region, but the net effect, I am advised, will be to move some quota, we believe, from the eastern parts of England over to the west into Wales. I feel that this will be a welcome effect of the working of the scheme. I think that those are the answers to all the questions I have been asked. I hope your Lordships will agree that the Bill be read a second time.
Lord John-Mackie: My Lords, the important question, I think, was the last one I asked about future allocations. There is still a huge surplus of milk.
Lord Belstead: I am sorry, my Lords; I thought that the noble Lord was labouring under a slight misapprehension. I went out of my way to say that, although the Bill takes legislative power to say that there can be another scheme of this kind in the future, we are not making any provision for another outgoers' scheme.
On Question, Bill read a second time; Committee negatived.

Shipbuilding Bill
4.22 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, I beg to move that this Bill be now read a second time.
This is a short and simple Bill. It has only two purposes: first, to extend the life of the Shipbuilding Redundancy Payments Schemes by 18 months; and formally to write off certain irrecoverable loans made by the Shipbuilding Industry Board to Upper Clyde Shipbuilders in the period from 1968 to 1972.
The Shipbuilding Redundancy Payments Scheme for Great Britain and Northern Ireland was introduced in 1978 by the then Labour Government. It was backdated to July 1977, to the day on which British Shipbuilders was formed. The scheme was intended to alleviate the human problems caused by the contraction of the industry and was to run for an initial period of two years. The contraction of United Kingdom shipbuilding—and, in particular, its need to achieve competitive manning levels—has unfortunately continued far beyond the original life of the scheme and successive extensions of the scheme have lengthened its life to eight years. The scheme is therefore due to expire on 30th June this year.
The scheme provides for benefits in the form of a lump sum, to all made redundant and, for those over 40, additional weekly support payments for up to two years following redundancy. These payments are over

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and above those payable under employment legislation. Since 1977 about 36,000 former employees of British Shipbuilders have received scheme benefits at a total cost of more than £130 million. Currently some 7,000 people are in receipt of the weekly payments. I do not think that there can be any doubt that the scheme has made a significant contribution over the years to the alleviation of the inevitable personal problems of redundancy and has helped considerably to smooth the path of contraction of the industry itself. Further, it has proved a very valuable tool indeed in the management of the shipbuilding industry.
But the merchant shipbuilding industry continues to face a very difficult market. In many respects we find ourselves back where we were in 1977, albeit with a smaller but still vulnerable industry, facing massive world recession in shipbuilding. Having said that, it is good to note that British Shipbuilders has recently achieved some successes. Two weeks ago it announced an order for four ships, ultimately for use by Cuba, to be built at Smith's Dock, Middlesbrough. This success is particularly welcome for one of British Shipbuilders' most efficient yards. At Austin and Pickersgill, where the order position was desperate indeed, in the last few weeks management and unions have very quickly reached a new agreement on working practices and arrangements. This has enabled the company to proceed with an order for two ships for another foreign owner. The Ministry of Agriculture, Fisheries and Food has placed an important order for an advanced research vessel at Ailsa, the sister yard of which, Ferguson's, on the Clyde, has already this year obtained other valuable orders. And only two days ago British Shipbuilders announced that Govan had obtained a £38 million order for a major ferry for North Sea Ferries. There are also other orders under negotiation, which we see as very encouraging.
As a result of this progress and the considerable efforts being made by British Shipbuilders under its chairman, Mr. Graham Day, it now seems likely that it will reach its stated order target for 1984–5 of 200,000 compensated gross tonnes.
But enthusiasm for these achievements must not blind us to the underlying problems which remain. British Shipbuilders' recent orders, like those which have gone over the past few months to Harland and Wolff in Belfast, continue to require substantial subsidies—within the European Community's rules. British Shipbuilders has a good way to go in regaining competitiveness and becoming a truly viable merchant shipbuilder. Part of that process will involve boosting productivity, increasing the utilisation of facilities and creating regional services serving a number of yards on a much more economic basis. This will inevitably mean further restructuring and. I fear, further job losses.
Although British Shipbuilders is now engaged in turning the industry round, and in the privatisation of the warshipbuilding yards, the Government do not, of course, want to add to its burdens by requiring it simultaneously to negotiate a successor to the statutory Redundancy Payments Scheme. The Government have therefore decided that it would be right to extend the scheme beyond June this year. I
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should immediately stress that this decision does not indicate any lack of faith in the industry or that there are any firm plans to close further yards. Any redundancies that occur later this year or in 1986 will be brought about by the state of the market, or by continuing inefficient uncompetitiveness. These are factors which are outside the control of the Government. Your Lordships will also recall that British Shipbuilders has been asked to dispose of its warshipbuilding yards by 31st March next year. Together with the disposal of the engineering and ship repairing interests currently in train, this means that by the end of 1986 the state will own less than one-third of the United Kingdom shipbuilding industry. Even without further redundancies, British Shipbuilders and Harland and Wolff will by then employ only 17,000 people, compared with over 90,000 when the scheme was first launched in 1978.
British Shipbuilders' management intend that the remaining merchant sector should by then have recovered from the present position and will be well on its way to a competitive position. It should also by that time have found some reasonable level of stability. There will then really be no justification at all for maintaining a statutory shipbuilding redundancy payments scheme for an industry where two-thirds of the workforce are employed in the private sector and therefore would be outside the scheme.
The Government have therefore decided that this should be the last extension of the statutory scheme. Of course, at the same time the Government do not believe that entitlement to redundancy payments should cease with the ending of this scheme. We are therefore asking the managements of both British Shipbuilders and Harland and Wolff, in consultation with their unions, to establish successor schemes by the early autumn of 1986.
It is too soon to say exactly what these new schemes will look like. They will be the product of a free negotiation between the management and the unions. They may decide to alter the way in which total benefits are divided as between lump sums and weekly payments. I do not know. I am really in no position this afternoon to give a binding commitment that the successor scheme will be as generous as, more generous or less generous than, the present scheme; but I do emphasise that it is not the Government's intention to require British Shipbuilders to reduce the level of redundancy benefit.
The Government have also made it clear that they will fund the non-statutory redundancy payments through public dividend capital. There is therefore no reason to assume that these new arrangements will mean that those who will lose their jobs after 1986 will in general be worse off than under the SRPS now in force. That is the reason for Clause 1: to extend the existing scheme against the background I have set out.
The Bill also presents a suitable opportunity to write off loans made in the period between 1968 and 1972 by the Shipbuilding Industry Board to Upper Clyde Shipbuilders, a company now in liqidation. Parliamentary approval is needed for this and to reduce the assets of the National Loan Fund accordingly. Warning of this was given in Accounts relating to issues from the National Loans Fund, which

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was published on the 12th December 1983 and presented to Parliament. This is really a book-keeping transaction and is dealt with in Clause 2 of the Bill.
I emphasise that the main purpose of the Bill is further to extend the scheme, which is valued by both the management and the workforce of the shipbuilding industry. We must hope that it does not prove necessary to make extensive use of the scheme; but surely no one can object to the continuation of this measure of support to those workers who are made redundant in a highly competitive industry such as the shipbuilding industry. With those remarks, I commend the Bill to the House.
Moved, That the Bill be now read a second time—(Lord Lucas of Chilworth.)
4.34 p.m.
Lord Bruce of Donington: My Lords, the House will be grateful to the noble Lord for having moved this seemingly innocuous little Bill which, on the face of it, goes to extend benefits already incorporated in the Shipbuilding (Redundancy Payments) Act 1978, as outlined in Schedule 2 of Statutory Instrument No. 916 of 1981 and as amended further by Statutory Instrument No. 1290 of 1982, with corresponding statutory instruments in Northern Ireland.
The Government were kind enough to pay high tribute to the workings of this scheme which, as the noble Lord has already indicated, has greatly helped to ease the passage of the reconstruction of the shipbuilding industry which has been occasioned by forces mainly outside the control of the industry itself. At the same time, the noble Lord has informed the House that the scheme is to come to an end in December 1986. In fact, that is automatically done by the repeal of Section 2(4) of the original Act of 1978—after which we are given to understand that a new scheme, which is to be negotiated between British Shipbuilders and the trade unions, will come into operation.
The noble Lord has indicated that it is his devout hope that the scheme, as negotiated between British Shipbuilders and the trade unions, will be no less favourable than the one already in existence. This brings us therefore to the question of why, then, has it become necessary to give notice of the termination of the scheme? If its continuance provides no greater drain upon public money than is involved in the scheme to be negotiated between the British Shipbuilders and the trade unions for a greater benefit, then why abolish it?
Quite clearly, the Government do anticipate making some saving. Moreover, we note that it is not to apply to those parts of the shipbuilding industry which are due for privatisation. The reason for that, as given by the Secretary of State in another place, is that to continue the existing scheme under the Shipbuilding (Redundancy Payments) Act 1978 and the subsequent statutory instruments would be expensive, bureaucratic and wrong in principle.
I find this a little odd. A scheme that has been in operation for a number of years, introduced by the Labour Administration in 1978, extended and approved in very glowing terms by the existing Government ever since and further extended today in so far as the public sector is concerned, is a most
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desirable thing. In fact, the Government, by inference, take credit for it and I am bound to tell the noble Lord, in so far as the noble Lord's bounty (or that of the Chancellor of the Exchequer) is to be extended for a further 18 months, his claim to benevolence is well justified. Why, then, should a scheme which is regarded in such benevolent terms in the public sector suddenly be regarded, if it is continued into the private sector, as expensive, unacceptable and, above all, wrong in principle?
It is when we consider these matters that this little Bill which is so innocuous becomes quite clear. It is a pre-privatisation Bill. Indeed, some hint of it is given in the text of the Bill by the writing off of some £2 million, to which the noble Lord has already referred. The real purpose of this Bill is quite simply to induce as much further redundancy before December 1986 as is possible in all the sectors, whether or not they are to be privatised, in order that when privatisation takes place on terms those taking over the warship yards will not be encumbered by what they regard as unnecessary staffs. It is therefore an invitation to further redundancy and there can be no doubt about it. The main purpose of it is to clear the decks for those private firms that will take over the warship section so that, by then, the further slimming down could have taken place.
Let us for a moment consider the scope of the negotiations that are to take place between British Shipbuilders and the trade unions. I am not suggesting that these negotiations will take place in any other way than with the utmost good faith, but they have to take place within the financial constrants under which British Shipbuilders are operating at the time. We know perfectly well that the warship yards are to be privatised.
There might be some slight, wry musing about this, because it seems odd to us that, in spite of all the virtues claimed for private enterprise ownership—initiative, drive, ability to take risks, courage, endurance and all the rest of them—they themselves never have to face the challenge of reconstructing an industry that is not doing well. Everything has to be dressed up beforehand, debts have to written off and prospective redundancy liabilities have to be got rid of. Then, and then only, under conditions of security, these courageous entrepreneurs are invited to come in and cash in on the proceeds. That is remarkable.
It is more remarkable in the case of the warship section because, as the noble Lord knows perfectly well, that section has contracts which run on a cost-plus basis and it is almost impossible for anybody to make a loss on them anyway. So they are presented with almost cast iron profitability, as history has shown, to those who take them over. Of course, all these measures will have to go through your Lordships' House and another place. However, on the assumption that they all go through successfully and there is no uncovenanted intellectual conversion by your Lordships to the arguments which I shall produce at the time, British Shipbuilders will be some £33 million short of profitability which they would otherwise have been able to apply against the losses which I fear they are still going to make, for reasons which I shall presently describe.

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So when it comes to the scope of the scheme, Mr. Day will not be able to negotiate from a position where he anticipates relief of his financial position to the annual tune of some £33 million from the warship yards. He will be £33 million short. When it comes to assessing the viability of British Shipbuilders, this is a significant sum that he has to take into account. Indeed, he could say to the trade union side in good faith, "I am sorry chaps. Eighteen months or so ago we were £33 million better off than we are now. Now we are a bit constrained and we really cannot afford to carry on a redundancy scheme which is anything like as favourable as before."
Moreover, the ways of Her Majesty's Government are by now well-known to this House. If Her Majesty's Government want a particular authority to take a line that they want carried out, they have very good means of ensuring that. It will be within the recollection of your Lordships that we have discussed—albeit by question and answer—the whole question of the increase in water rates, which has been imposed by the Government quite arbitrarily insisting upon different levels of profitability than have hitherto been obtained and upon an early repayment to them of sums due. What is to stop Her Majesty's Government, between now and the time when these negotiations take place between British Shipbuilders and the trade unions, from imposing similar constraints that make it quite impossible for British Shipbuilders to achieve any kind of arrangement with the shipbuilding trade unions, in order to achieve a redundancy scheme which is even remotely comparable with the one which they now enjoy under statute?
The answer is of course that the Government want to save money. If the Government say no they do not want to save money, then the answer is very clear. They can allow the existing Act to stand, particularly Section 2(4) permitting further extensions of the scheme. On the other hand, they can say, "Of course, we are going to save a lot of money on this", which will only go to fortify the suspicions of those who are engaged in the industry that, after all that, they are not going to do as well as they did before and it would be better if they got out.
In the course of his opening remarks, the noble Lord made some observation about the future of the British shipbuilding industry. He referred, although I think his confidence was a little muted, to the prospects for the success of what remains as the rump of British Shipbuilders. He knows perfectly well that the policy of open and unrestricted competition, which is the fetish and the passion of this Government, has been one of the factors which has led to the continuing losses of British Shipbuilders. He knows perfectly well that the Government's deliberate exposure of British Shipbuilders to competition from Korea has been one of the principal reasons why there has been such a fall-off in the orders to British Shipbuilders, as well as to other countries. The noble Lord knows perfectly well that the Korean shipyards are financed very largely by capital originating in the United Kingdom, in the United States and in Germany, on which dividends have to be paid. They know perfectly well that South Korea is not a democracy. It is in fact a dictatorship. They know perfectly well that the trade
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union movement there is comparable in status with the trade union movement in Poland; that the wage rates in Korea are one half of what they are in Western Europe, one half of what they are in Denmark and one half of what they are here.
The noble Lord knows perfectly well that there has been a deliberate exposure—and I do not want to rake over old embers—in fact in one case, in the case of a GEC cable layer, a Government encouraged diversion of a contract to Korea. He knows perfectly well that in this country only 44 per cent. of orders for shipbuilders from British shippers come to the United Kingdom as against 98 per cent. in Italy, 82 per cent. in Germany and 100 per cent. in Japan.
He knows perfectly well that it is only owing to the deliberate dogma of the Government that the fate of British Shipbuilders and of the entire shipbuilding industry has been left to the harsh winds of competition whether they be fair or unfair, whether they come from dictatorships, or from wheresoever they may come. This has been done as a deliberate act of policy in contrast to those of our colleagues in the Western world who deliberately give preference to the products of their own countries.
A day or so ago—it may have been only yesterday—we had some questions and answers on the precarious state of the merchant fleet in this country. I believe that the Question was answered by the noble Lord, Lord Brabazon, who indicated that some inquiry was going to be held into the military implications—or should I say the naval and military implications—of the progressive deterioration in numbers and tonnage of the British merchant fleet. Although I do not wish to hold it as a bogey, on the Government's own assumptions the Soviet Union now leads the world in the ever-increasing number of her merchant ships. I do not expect for one moment that these will have any impact on Her Majesty's Government. They have their dogmas and they must live with them.
I am quite convinced in my own mind about the Government's intentions. I am fortified by the views on this of Sir Robert Atkinson who indicated quite clearly as recently as August of last year that Sir Keith Joseph, who supported the hiving-off of warship building, offered no hope at all for the future of the British shipbuilding industry. Indeed, if noble Lords are familiar with the Observer feature of 12th August 1984, they will note—this has been unchallenged anywhere—that Sir Robert Atkinson in reporting a conversation that he had had with a senior civil servant in the Ministry said,
"that the policy of the Government was to get rid of shipbuilding altogether".
That statement has never been challenged. It is in fact implicit in the Government's actions; it is implicit in their ineptitude; it is implicit in their dogma; that, regardless of the fate of people in the United Kingdom, regardless of the fate or futures of skilled artisans in more than a dozen trades in this country, as long as the dogma goes, as long as the dogma is carried on, it does not matter a hang what happens to British industry as a whole and to the shipbuilding industry in particular.
One can be fanciful as to what the position may be in about 10 years' time on the assumption that the

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country is prepared to endure a further period of this wretched Administration. However, I can envisage a time when, secure under their nuclear umbrella, thousands of people will be tapping out messages to one another all over the world. We shall have a greater tonnage of computer paper than we have a tonnage of ships under the British flag and constructed in British yards. We shall probably have more stockbrokers than we have ship workers.
Noble Lords opposite are under a complete illusion if they think that they are going to achieve that without very much trouble because implicit in it is a complete disregard of the whole maritime history of this nation and of the whole of its build-up based upon the design, construction and the marketing of things rather than the marketing of information and the shovelling about of pieces of paper. This is a bad and a squalid little Bill which of course will receive your Lordships' assent as usual. Nevertheless it is merely a pre-privatisation Bill and can be condemned purely on that account.
Viscount Massereene and Ferrard: My Lords, before the noble Lord sits down, may I point out that I had an interest in shipping once? May I say with due respect that the noble Lord has been speaking a lot of nonsense? I would draw the attention of the noble Lord to the British liner, "Royal Princess", which was built in Helsinki at a cost, I think, of £130 million. No British yard could fulfil the order. The noble Lord knows perfectly well why British yards could not fulfil it. They could not do it because they could not guarantee the delivery date. Why could they not guarantee the delivery date? They could not do so because the unions might have had a strike or a go-slow, and of course under the law as it stands, there is no forcible agreement between shipbuilders and unions that can prevent that.
Lord Bruce of Donington: My Lords, I am most grateful to the noble Viscount for his very courteous intervention. He is of course himself entirely wrong. But this of course is not unusual. Every time there is an interruption in production and delivery date has to be postponed the noble Viscount has almost a Pavlovian reaction—it must be due to restrictive practices; it must be due to difficulties with the work force, and so on. I have a very simple answer to that—a fish rots from the head, not from the tail.

NHS: Drug Prescribing
4.58 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Social Services. The Statement is as follows:
"With permission, Mr. Speaker, I will make a Statement on the limited list of NHS drugs.
"I told the House on 8th November that the Government intended to introduce a system under which a selected range of drugs would be available on the National Health Service in seven categories. These were: antacids, laxatives, analgesics for mild
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to moderate pain, cough and cold remedies, bitters and tonics, vitamins, and tranquillisers and sedatives.
"I published at that time a provisional list of medicines which might be selected within each category. This was the basis for consultation which continued until the end of January. We made clear from the outset that our intention was to produce a list from which doctors would still be able to meet all the clinical needs of their patients. The chief medical officers of the health departments wrote to all doctors individually to seek their views on the list. I am grateful to all the many doctors who responded and I hope they will recognise that their views have been taken into account. My chief medical officer also brought together a group of independent experts practising in the relevant medical specialties, including three general practitioners and a pharmacist, to assist him. That group has now unanimously recommended a list of medicines which they believe will meet all clinical needs. I have accepted their advice in full and I am most grateful for their help in this important task.
"This extended list of medicines will contain some 100 different medicines, compared with 30 on the provisional list. Most of the medicines will be generic, or unbranded, products; but a number of proprietary medicines will be retained where the group concluded that they were necessary and where no generic preparation currently exists. I should emphasise that the quality of all the selected drugs is assured. They all conform to the very high standards we require of all medicines under the Medicines Act.
"For the purposes of the regulations which my right honourable friend the Secretary of State for Scotland and I will introduce, it is necessary to list all the products which will no longer be prescribable on the National Health Service. The regulations will also cover those products which the Advisory Committee on Borderline Substances have advised are not medicines and should not be prescribed by general practitioners. I am today publishing both the selected list of drugs and those no longer to be prescribable. Copies are available in the Vote Office.
"I shall also today be giving the representatives of the medical and pharmaceutical professions the opportunity to comment on these regulations as they affect the terms of their contracts with the health service.
"Mr. Speaker, I should like to mention three specific issues concerning the operation of the limited list which have been raised during the period of consultation.
"The first is the question of the arrangements for reviewing the list itself. This was raised by, among others, the Royal College of Physicians. We fully accept that it is essential for independent professional advice to be available after 1st April on the need for changes to the list. I do not believe that complex machinery is required but I shall be very ready to discuss with the professional bodies concerned how the arrangements which have been used to formulate the extended list should be developed for the future.

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"Second, questions have been raised about the implications of the new arrangements for dispensing doctors—that is, doctors predominantly in rural areas who themselves dispense drugs to their patients. For these doctors, the regulations will in effect retain the status quo. Dispensing doctors will still be able to supply any medicine to those of their patients for whom they already dispense, although they will have to issue private prescriptions for medicines which are no longer available on the National Health Service. Concern has also been expressed about the position of retail pharmacists who now hold stocks of drugs which will no longer be available on the National Health Service. I am quite prepared to examine any relevant evidence that pharmicists may present on their stockholding of drugs.
"Third, the question has been raised whether there should be some form of appeal mechanism for individual cases in which a doctor believes it is necessary to prescribe on the National Health Service a medicine which will no longer be available. Most concern was expressed by doctors who felt that there were serious omissions in the provisional list. My unanimous medical advice is that the selected list is now comprehensive and will make it unnecessary on clinical grounds for patients to use medicines not on the list. Nevertheless, let me say this: if, after examining the complete list and in the light of experience, the medical representative organisations still wish to propose that such a mechanism should be provided, my right honourable friend and I will be ready to discuss it with them. I should make clear, however, that any mechanism would need to be very carefully controlled to ensure that it could only be used in genuinely exceptional circumstances.
"Mr Speaker, during the period of consultation a number of alternative proposals have been advanced. Yet none of these offered the same prospect of achieving sensible savings in the NHS drugs bill without either harming the interests of patients or threatening the fundamental and legitimate interests of the pharmaceutical industry. The selected list which I am publishing today is likely to produce savings in the drugs bill of some £75 million now, rising to a higher figure in due course. I am therefore convinced that the approach we have adopted remains the right one in principle. I also believe that the selected list which I am publishing today will demonstrate that in practice the health service will continue to provide all medicines required to meet the clinical needs of patients. It is by making sensible savings of this kind that we are able to provide the health authorities with the increased resources which I have announced recently".
My Lords, that concludes the Statement.
5.4 p.m.
Lord Ennals: My Lords, we thank the noble Earl for repeating his right honourable friend's long Statement made in another place. Make no mistake about it—this is an extremely important Statement. The
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decision taken by the Government is deeply disturbing; it fundamentally changes the relationship between the general practitioner, his patients, and the medicines he thinks are the most appropriate with which to treat his patients. The noble Lord said that eight doctors were perfectly satisfied that the list was all right. There are tens of thousands of general practitioners across the country, and every patient is different. The general practitioner knows better than any other person what is the best medicine for a particular patient.
The Statement spells the end of the clinical freedom enjoyed by the general practitioner, and it will create a two-tier system of treatment. First, there will be a limited list of drugs available on the NHS; secondly, there will be other drugs which can be paid for privately. It is therefore another step in the process of privatisation and towards undermining the basic principles upon which the National Health Service was created.
I shall not repeat today what I said last night about the effects of this development on the pharmaceutical industry in this country. If there is to be a list of safe approved drugs which can be made available on prescription, then it would be better to have a more comprehensive list than that originally published. In my view, a list of 100 drugs is quite inadequate. If there is to be both a black list and a white list, can the noble Lord say what will be the position regarding other drugs which are on neither the black list nor the white list?
Much more seriously, I have a number of questions for the noble Lord. First, can we have an assurance that this is not the thin end of the wedge; that safe approved drugs are not increasingly to be paid for by the patient? Will more drugs be added to the black list? Does the Statement affect the medical equipment needs of patients in their homes? Next, will not this list inevitably create increased costs for the elderly and disabled who are now exempt from payment, and who will now have to pay if it is the view of their GPs that the limited list does not meet the probably unlimited needs of the patients concerned?
Why have the Government taken this action? As the noble Lord understands very well, it has angered such essential professions within the health service as doctors, pharmacists and nurses, as well as the pharmaceutical industry and organisations such as Age Concern which are concerned with the needs of patients. Why have the Government rejected the recommendation of their own working party, embodied in the Greenfield Report, for generic substitution? This would have left with the doctor, ultimately, his clinical freedom.
This is an extremely important Statement, and yet none of us has seen the list published by the Secretary of State; none of us in this House is privy to it. We shall of course want to debate the Statement on the Floor of this House.
Lord Kilmarnock: My Lords, we on these Benches would also like to thank the noble Lord for repeating that Statement. But I must say that I am surprised that the noble Lord, Lord Ennals, awarded the noble Lord an Earldom on the basis of this Statement!
Lord Boyd-Carpenter: Promotion by merit!
Lord Kilmarnock: It seems to me to be a case in which primary legislation should have been used to bring in such a very important change in principle in the relationship between Government and doctors. Regulations seem to us to be quite inadequate. I start simply by saying that I regret that the Government did not accept the suggestion that I have made on two occasions that they should have kept their limited list weapon in reserve and convened a new meeting of all the interests concerned. I am sure that that was a mistake. I think that they had general agreement in the palm of their hand.
Can the noble Lord answer one or two specific questions? The Statement refers to the number of doctors who responded. Can he tell us how many of them did? He told us that the Secretary of State's unanimous advice was that all clinical needs would be covered. Clearly doctors up and down the country were not happy about this and have asked for an appeals mechanism. Can he tell us how many doctors wanted an appeals mechanism? In their increasing the original number of drugs from 30 to 100, I am glad of the Government's belated conversion to generic substances, but they have not gone about it in the way that we should have recommended.
Is it not carrying secrecy too far not to release the lists at the same time as the Statement? We are told that they are in the Vote Office but we cannot see them until this exchange has taken place. Can the noble Lord tell me whether Gaviscon is included on the permitted list, or whether Distalgesic, a very useful medium-range analgesic, is included on the list? Regarding the reviewing of the list, can the noble Lord be a little more specific about what type of body is to be set up to view new additions to the list? The Government say that they have accepted the need for independent professional advice. What kind of body do they envisage? Will it be more open than the internal departmental committee? Will it include the BMA and the Royal College of General Practitioners? Will the industry have a voice?
Finally, on the arithmetic, the number of drugs has gone up from 30 to 100. The projected savings have gone down from £100 million to £75 million. I am sure that the suggestion that I made to the noble Lord last night is much more accurate—that they will work out in the region of £40 million. How will any shortfall be treated from the point of view of the Government's commitment to 1 per cent. real growth per annum in the NHS? Will an arbitrary £75 million simply be lopped off that? How will the Government handle that in relation to their firm commitment to 1 per cent. real growth in the NHS? They will be watched very sharply on that.
5.13 p.m.
Lord Glenarthur: My Lords, I am grateful to both noble Lords for their comments and to the noble Lord, Lord Ennals, for his promotion of me, which I do not feel that I deserve.
Lord Boyd-Carpenter: It will come.
Lord Glenarthur: May I cover some of the points that have been raised? The noble Lord, Lord Ennals,
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accuses the Government of making a fundamental change. He knows quite well that the drugs bill has risen inexorably year on year. A total of £1,400 million is what we are talking about. That is why it is now necessary to make changes, so as to make it possible to improve other parts of the developing health service.
The noble Lord suggested that the GP knows his patients best. But I have to tell him that no fewer than three GPs were on the chief medical officer's specialist committee, and it was the unanimous view of that committee that the drugs contained in the list were sufficient to meet all clinical needs. The noble Lord, on the other hand, says it is his view that the drugs do not meet the needs of patients, but that seems to run counter to the theory which he has just advocated—that it is only doctors who really know.
May I answer the point that the noble Lord raised about other drugs, and say that of course the list with which we are concerned deals only with the categories of drugs to which I referred when I repeated the Statement. There are seven categories, and the other drugs remain as before. As I understand it, equipment will not be affected at all.
The noble Lord asked me a number of specific questions. He asked whether more drugs would be added. There are no plans to extend the list at all. We hope that it will be possible to achieve more sensible prescribing generally, and that is a theme which I think is also advocated by the noble Lord, Lord Kilmarnock, although he differs from the Government in the approach that he would make to it. But I have to say that all the signs are that more sensible prescribing generally is already happening.
The noble Lord asked about the increased costs for the elderly and disabled. It is certainly true to say that much of the publicity and fuss which has been created by a lot of people about this list has put genuine fear into the minds of the elderly and disabled—and misplaced fear at that. Although some of these drugs which have up until now been available over the counter anyway will not be available on prescription, I see no reason to believe that it will make life in the least bit difficult for those patients because their needs can quite clearly be met by the drugs which will continue to be available.
The noble Lord asked why we rejected the Greenfield proposal. We have discussed this matter before, and he knows that were we to have adopted that route we should have achieved less than half the savings to which the limited list leads us. The noble Lord can also be quite sure that, had we introduced generic substitution, that would have undermined the industry and made research not worth while, even into life-saving drugs. It would have affected all groups of drugs—advanced drugs as well. He can perhaps draw some comfort from the fact that we have not done that if he looks at the pharmaceutical industries of, for example, Australia and Canada.
Lastly, the noble Lord suggested that we should debate this. Of course the opportunity will come for that. The noble Lord, Lord Kilmarnock, suggested that what I am repeating now ought to have been done in the form of secondary legislation. The orders will be subject to the negative procedure. Regulations will be

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laid which will amend the National Health Service General Medical and Pharmaceutical Services Regulations 1974. That is the secondary legislation to which he refers.
To continue with some of the points raised by the noble Lord, Lord Kilmarnock, he asked how many doctors had made representations. The answer is about 1,670. I do not have the figures of how many were asking for an appeals mechanism; but I can tell him, as I said before, that the unanimous view of the committee was that the selected list met all requirements. But if the profession wishes to propose an appeal mechanism, we shall be very ready to discuss it, but it must be a carefully controlled mechanism and an exceptional one, and organisations like the BMA will have to be prepared to talk, which they have not been up till now.
The noble Lord asked about particular drugs on the list. He mentioned Gaviscon and Distalgesic Gaviscon is on the list. Distalgesic as such is not, but the procedure here is that Distalgesic is a combination of different drugs—paracetamol and dextropropoxyphene. There are three different brand names of that substance with exactly the same components. Doctors will still be free to provide the components, and they will have to write those two component names on the prescription form, not the brand name. The pharmacist will dispense one of the branded products for now but other companies will soon bring out generic versions, and that will allow genuine price competition. However, I ought to make it clear to the noble Lord—and I am sure he will be aware of this point—that Distalgesic has its own particular problems, and we hope that doctors will think carefully about when to use it. The noble Lord also asked about a reviewing list. We think that it is essential to have independent and professional advice. That independent and professional advice will consider the position of new drugs and whether there is a new suitable generic alternative to replace the branded drug.
Lastly, the noble lord challenged me on the question of savings, suggesting that the reduction from the figure of up to £100 million to £75 million was now inadequate. Of course, the consultation would always have led to a larger list and would result in less savings, but the aim now is to look for other ways of getting better value from the drugs bill through better prescribing, more competition in generic manufacturing and all that kind of thing. But the fact is that the vast majority of what is about 2,000 drugs which have come off the list lead us to a very substantial saving on the drugs bill, which can be put to other purposes in the health service which can so greatly benefit from that support.
Lord Auckland: My Lords, is my noble friend the Minister aware that his Statement is a marginal improvement on his reply in last night's debate? However, since the details of the Statement have not yet been read by us it is very difficult to comment specifically. With regard to the 1,670 replies my noble friend has had from the medical profession, can he say whether these are from general practitioners only or whether they are from the medical profession in
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general? Can he also say how long a period they have had in which to reply to a very important decision? Doctors are busy people. There is a feeling that the amount of time given to reply to these very far-reaching proposals may not be very long.
Lord Glenarthur: My Lords, the figure that I gave is roughly equally divisible between hospital doctors and GPs. They have had the same time as everybody else, which is three months, in which to comment on what the limited list contains.
Lord Monskwell: My Lords, can the noble Lord confirm that the financial penalties that may result for handicapped and old people as a result of these proposals will also apply to children who currently obtain free prescriptions under the National Health Service?
Lord Glenarthur: My Lords, I think the important point to bear in mind is that 72 per cent. of all prescriptions which are issued are already free and, of this particular group, 80 per cent. are free. So far as children, the young, the elderly, those on low incomes and those who require certain special medicines are concerned, they come into that percentage which I have just given the noble Lord. So far as particular drugs for children are concerned, certainly two of the more regularly used ones, that is to say calpol paediatric syrup and panadol elixir, are on the new list.
Lord Somers: My Lords, is not this decision really equivalent to saying that the doctor, who has, after all, the closest and most intimate knowledge of his patient, does not know what is best for him? The noble Lord must know that there are certain drugs which, while they are suitable for the vast majority of people, have very bad side effects on a small proportion of others and those others have to have something different. Will such people have to pay simply because they do not respond to the normal drug which is on the list?
Lord Glenarthur: My Lords, as I said earlier, the Chief Medical Officer's committee of experts have unanimously come to the conclusion, quite clearly, that all clinical needs will be met. Of course, the relationship between a doctor and his patient is important. But there is absolutely no evidence whatever to suppose that all clinical needs cannot be met by this limited range of drugs.
Lord Molloy: My Lords, is the noble Lord aware that the point raised by the noble Lord, Lord Kilmarnock, is giving grave concern to all parties on this side of the House? It seems that the Government are quickly developing the habit of first of all asking us to discuss what is really a fait accompli and reducing the role of Parliament to one that is perfunctory rather than one of debate and examination. That is a very distressing action for any Government to take.
The noble Lord said that the Government intend to invite members of the pharmaceutical organisations and industry to discuss this proposal and also to have discussions with other professional bodies. May I ask why they did not have such discussions before? The crucial point is this. Both the industry and other professional bodies may make suggestions and submit

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schemes which they think are superior to what the Government are doing, and can produce arguments which will be better—bearing in mind that the British Medical Association and the pharmaceutical associations constitute a few more than two or three GPs with whom the Government have had discussions.
Finally, we should bear in mind that this is really a money saving device. It has nothing to do with health. I do not think the Government really care whether any health will be injured by this act. Therefore, if there is a proposition to save money in some other way, without endangering the lives of people, should not the Government be prepared to consider it? I am sure such proposals will be made by both the industry and the BMA.
Lord Glenarthur: My Lords, I am not quite sure what particular question the noble Lord was asking. If he is spelling out the importance of the BMA in this issue, which he seems to be, perhaps he can tell me why the BMA would not come and talk to my right honourable friend the Secretary of State about it. So far as its being a money saving device is concerned, as I have stressed on several occasions from this Dispatch Box in the course of the last few weeks, the whole reason why it was necessary to produce a list was that the drugs bill was running out of control. It was becoming quite colossal. It has risen year on year quite out of proportion. It is a problem which has affected and faced, or should have faced, several Governments for many years in the past. The fact is that we now have to get to grips with it.
When the noble Lord seems to allude to the suggestion that we ought to have consulted further before we actually produced the list, I am not quite sure what he means. Does he mean that my right honourable friend should have stood up in another place and said, "I want to consult on something but I cannot tell you what it is because that would prejudge the issue. Unless anyone succeeds in identifying what it is and objects within three months, I shall go ahead"? That really is an unrealistic way to proceed.
Lord Newall: My Lords, I wonder whether among all this gloom and doom my noble friend the Minister is aware that, having taken some soundings among GPs, I have discovered that they are most happy and very satisfied with the proposed list, fully realising that there is some need for this measure. They will be very satisfied with what the Government are proposing.
Lord Glenarthur: My Lords, I am very grateful to my noble friend. I, too, have asked for the views of certain GPs, as one is bound to do under these circumstances, and I find that my views coincide precisely with my noble friend's.
Lord Ennals: My Lords, in my original intervention, it was not my wish to promote the noble Lord, nor would it be my wish to demote him, because I know that it was not his Statement; it was the Statement of his right honourable friend and it is his right honourable friend whom we must blame. May I make two points? First, the noble Lord has not really answered the question about consultation. Surely he
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accepts that the Greenfield Report was the kind of document that should have gone out for consultation in order that all those concerned, general practitioners, pharmacists, the pharmaceutical industry, any of us here in this House or in another place, could consult about what they thought was the best way of dealing with the problem of the drugs bill. He will understand that I do not think any Member of your Lordships' House has suggested that there does not need to be some further savings in the drugs bill. The question is one of principle. I do not think the noble Lord has answered the question of consultation.
The last point I want to make is very largely the point made by the noble Lord, Lord Somers. Nothing that has been said by the noble Lord, or in the Statement that has been made, can satisfy me about the principle concerned. No list of eight experts, or of 80 experts or of 800 experts, can replace the judgment of one doctor about a particular patient. What I believe is quite wrong in principle about this proposal is the assumption that somehow or other you can group patients together and assume that all their needs can be met by just a limited list of forms of medication. Each patient is different. Only the doctor, the GP, can properly and effectively understand what is in the best interest of the patient. That is the vital principle that is being breached by the Statement made today.
Lord Glenarthur: My Lords, on the question of consultation, I do not think that I can add to what I have already said. The fact is that my right honourable friend announced a proposed limited list. We were fully aware, of course, that the list would be amended in the light of consultations for which my right honourable friend asked. There it is. The BMA refused to come and take part. That is its fault, not my right honourable friend's.
On the question of consultation on the Greenfield Report, I would say that it was an internal report. The Government adopted nearly all the recommendations that the report contained. But they did not follow the route of generic substitution, for the reasons that I have stated on many occasions in the past.
On the question of principle, there is absolutely no reason to suppose—the noble Lord is wrong to suggest—that the clinical needs of patients will not be met by this limited list. It is a very comprehensive list. It is available for your Lordships to see; it is available now in the Library. It contains a list of about 100 drugs which cover all clinical needs. A change it may be, but it is necessary to make a change such as this if we are to contain the alarming greater growth in the drugs bill to the detriment of other parts of the health service.
Lord Kilmarnock: My Lords—
The Earl of Swinton: My Lords, we have now spent 33 minutes on the Statement. I know that it is a very important Statement. However, we have recently had two debates on this subject. We have another Statement to come. The noble Lord, Lord Kilmarnock, has had a chance to question the Government and he did so at some length. I think that we should now pass on to the next Statement.

Skillcentres
5.32 p.m.
The Minister Without Portfolio (Lord Young of Graffham): My Lords, with the leave of the House, I should like to repeat a Statement on skillcentres being made in another place by my right honouranble friend the Secretary of State for Employment. The Statement is as follows:
"With permission, Mr. Speaker, I would like to make a statement about skillcentres. I advised the House on 29th November of the Skillcentre Training Agency's proposals to the Manpower Services Commission. On 24th January, the chairman of the commission informed me of the commission's conclusions. These proposals for the reorganisation of the skillcentre network are designed to eliminate the present waste of resources and to enable the funds thus released to be employed in substantially increasing the number of training opportunities.
"The proposals form part of the adult training strategy adopted by the commission over a year ago, after the widest possible consultation. Under that strategy the number of adults being trained under the commission's programmes is planned to rise to 250,000 by 1986–87. This is more than double the 1983–84 figure. It includes a substantial increase in the number of unemployed helped. All parts of the country will benefit from this expansion.
"The reorganised skillcentre network has an important role to play in this further development of training. I very much welcome the emphasis the centres are now putting on new and higher technology skills, which will now be more widely available. I have today confirmed again to the chairman of the commission further capital investment in the network of £10·5 million for 1985–86. The addition also of a new 300-strong mobile instructor force is an imaginative and positive innovation. It gives greater flexibility, and allows coverage in remote areas not previously covered by the skillcentre network.
"I have now considered these proposals, taking into account the evidence given to the Select Committee on Employment on this matter and all the further representations made to me. Following consultation with my right honourable friends the Secretary of State for Scotland and the Secretary of State for Wales, I have today written to the chairman of the commission. I am placing a copy of my letter in the Library.
"In my letter I have asked the commission to implement the agency's proposals. I have asked the chairman to make quite sure in doing so that where any closure is involved it should not take place until satisfactory alternative provisions have been identified. I have asked that the fullest consultation takes place with the staff and trade unions, with particular regard to negotiating new working practices designed to help the overall efficiency of the network, and to avoiding compulsory redundancies wherever possible.
"Mr. Speaker, these proposals for the reorganisation of the skillcentres make sense as a necessary
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step in improving the cost-effectiveness of training programmes thus enabling substantial expansion in training opportunities, for unemployed as well as employed people, throughout the country."
My Lords, that concludes the Statement.
Lord Dean of Beswick: My Lords, I am extremely grateful to the noble Lord for repeating the Statement made by the Secretary of State in another place, which he has done in his usual courteous manner. However, my praise stops there, because I find nothing in the Statement that gives me any comfort; nor, I think, will it give any comfort to unemployed people in the country. I should like to put some points to the noble Lord, and, in view of the time factor, I shall do so briefly.
The Statement mentioned the addition of a new 300-strong mobile instructor force as an imaginative and positive innovation. Can the noble Lord say, even though this is part of the Government's intention, that the loss of jobs in real terms amounts to between 400 and 500? I should also like to ask what is meant by the Secretary of State when he says that he has asked the chairman to make quite sure that no individual closure takes place until satisfactory alternative provisions have been identified. Does that mean that, before there were redundancies of any kind in the service in a particular area, alternatives would have to be available at that time and not at some later date?
Is it not also a fact that the Minister's proposals do not at present have the support of a majority of the members of the commission? Is it not the case that when the proposals were first carried to the Minister there was a 5 to 4 majority on the commission in favour of the proposals, but still some doubters among the five? I understand that one member, who was in favour of the proposals at that time, has changed his mind and written to the Minister to declare this. Is it not therefore a fact that the proposals do not represent the commission's view at this time? I should like to hear the Minister's view. It has a bearing on how the proposals are accepted in general by people involved. Is it not also a fact that a reputable firm of accountants carried out a review of the proposals as they stand and was unable to find any viability within them?
Baroness Seear: My Lords, from these Benches I should like to thank the Minister for repeating the Statement. Like the noble Lord, Lord Dean, I wish to ask what is meant by the phrase that no individual closure should take place until satisfactory alternative provisions have been identified. What are the criteria for deciding satisfactory alternative provisions? Is it a question of the remoteness of centres for training, so that people in some areas find it extremely difficult to go to skillcentres because of the distance when certain centres have been closed? How will this be determined? We should like more information.
At this point I part company with the noble Lord, Lord Dean. I welcome the changes that are going on, particularly the appointment of the mobile instructor force. A great deal of change is better done on site than in skillcentres. We may be moving towards a position in which more mobile instructors should be available so that people can be trained on the job in the setting where they are to work. This is often the best way to

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make training stick with the people concerned, rather than take them away and put them into a centre.
I should like to know what is being done to update the skillcentres that remain open to see that they are carrying out the kind of training that is required. It is no secret, I believe, that some centres have become somewhat out of date, possibly, although I do not know, because they have not received the kind of equipment that is necessary if training is to be relevant to modern requirements. It is surely better to have an effective team of mobile instructors, backed by up-to-date skillcentres, than to try to concentrate entirely on the skillcentres. The move is in the right direction. One wants, however, to see that both approaches—skillcentres and mobile instructors—are of the best kind that can be provided.
I should also like to ask about the use of the mobile instructors. A very important part of adult training is to deal with the long-term unemployed. It is intended especially for the long-term unemployed. The community projects are available for them, and training should be included in these projects. Surely the mobile instructors are precisely the people who could give effective training to long-term unemployed on community projects. One is appalled to be told that that training is not to be given in the course of the work on the community projects but only after people have been on them, in their own time, while they are not actually employed on the projects. This seems to be a singularly dotty way of doing it. If ever there was a place where learning for this kind of person is appropriate, it is actually on the job with a skilled instructor to help. To suggest that people should go to courses after they have done work on a project, instead of having the advantage of skilled instructors actually on the project, seems to me most extraordinary. I should be glad if the Minister would comment.
5.41 p.m.
Lord Young of Graffham: My Lords, I am grateful to the noble Lord, Lord Dean of Beswick, for his comments. I should say at the outset that some 1,050 staff of the Skillcentre Training Agency will be affected, but my right honourable friend the Secretary of State for Employment has asked the commission to consult fully with staff and trades unions, particularly in regard to avoiding compulsory redundancies, wherever possible. Redeployment, voluntary early retirement and compulsory retirement at age 60 or over will be explored first. Compulsory redundancy is expected to be necessary for only a minority of staff.
That is an unpleasant decision to have to make, but I believe it is important to look at what the adult strategy itself is out to achieve. It is a strategy which was accepted by the Secretary of State and recommended by the commission, and one which was evolved only after the fullest possible consultation with all interested parties. Furthermore, I should remind your Lordships' House that if we look at the percentage of those leaving skillcentres over the last few years and going into employment, either generally or in the trade they have just acquired, we will find that continually, from 1980, those coming out of skillcentres have been less fortunate than those coming out of colleges of further education; and that trend has continued to this day.
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If I were to be asked why that is, I would say that it is for the reason I discovered when I had the privilege of being chairman of the commission: that the skills required in the world of employment have changed over the last 10 years. What the Skillcentre Training Agency is doing today is taking steps to ensure that it provides for both unemployed and employed the skills which are required in today's world.
It is true that since the decision was made on 24th January one of the commissioners has written to my right honourable friend the Secretary of State for Employment. I have had the opportunity of reading that letter. The commissioner asked for the decision to be delayed. My right honourable friend has noted Dr. Green's point, along with other representations which we have received. Delay in implementing the Skillcentre Training Agency's proposals would jeopardise the major expansion in training opportunities planned in the adult training strategy, and every pound that has to be spent on subsiding skillcentres after 1st April 1986 will mean fewer people trained. In the end, we have to consider the position of both unemployed and employed in acquiring the skills they in fact require to hold their place in the world of employment.
I should repeat once again that as a result of the new adult training strategy no fewer than twice as many people will benefit from the new form of training being provided. I am afraid that I cannot help your Lordships in regard to any viability study prepared by a firm of accountants, but I can assure your Lordships that during my time the figures were gone into very seriously and that this decision was arrived at after looking at all the consequences.
In the Statement I have just read to the House my right honourable friend said that he has asked the chairman of the Manpower Services Commission to make quite sure that he will not ask for any skillcentre closure,
"until satisfactory alternative provisions have been identified".
Under the arrangements for the adult training strategy, and in providing for twice the number of people to be trained, steps are being taken to ensure that each region of the country has satisfactory training provision. The key point about the closure programme is that the Manpower Services Commission will take it upon itself to ensure that there is an adequate and expanded range of training available in the particular locality before it will proceed to the closure of the skillcentre.
I am aware of the point made by the noble Baroness, Lady Seear, about the community programme. That is a matter at which I have little doubt the Manpower Services Commission is looking in adapting training into the community programme for the help of the long-term unemployed. That is only a small part of the adult training strategy. The adult training strategy is about bringing unemployed and employed people to a full state of readiness so that we can regain our economic advantages in this world, and training as a whole is a vital part of it. The Skillcentre Training Agency will play a very valuable role in the provision of training. This is a difficult step. It follows one which has no doubt been taken in parts of industry so that they may bring themselves up to date. I assure your

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Lordships that at the end of the day it will result only in the provision of more and better training.
5.47 p.m.
Lord Elwyn-Jones: My Lords, I should like to ask the noble Lord some questions about two important commitments undertaken by the Secretary of State, according to the Statement. One was that all parts of the country would benefit from the proposed expansion, and the second was that no individual closure would take place until satisfactory alternative provisions had been identified. Unhappily, the Secretary of State did not condescend to give particulars about the detailed arrangements in different parts of the country. The information that I have about West Wales in general, and my native town of Llanelli in particular, is, to say the least, deeply disturbing. It may well be that there have been changes of mind since it was originally announced that the Llanelli skillcentre was to be closed. There have been discussions since then, and it may be that there has been a different decision.
When are we going to receive from the MSC the details of the arrangements in different parts of the country? In Llanelli there are over 38,000 unemployed people—an increase of 7,000 since 1982. That is an unemployment rate of 17·9 per cent., and it is still rising. The need for retraining and the market for it have correspondingly increased. In regard to the needs of the community, if the economy of the area is to survive and prosper a pool of labour is required, trained in the new technologically-orientated industries; so there is a greater need than ever before for more provision.
I do not know quite how that is going to be achieved by the threatened removal of the skillcentre and the survival of only one, apparently—in Port Talbot, which is miles and miles away from West Wales and from Llanelli. Perhaps there has been fundamental re-thinking, particularly bearing in mind that in the last three years the Llanelli skillcentre has been unique; it has been extremely successful. For instance, in 1981, while 80 per cent. of places were occupied, only 22 per cent. of the trainees were able to find jobs. In November 1984, 93 per cent. of all places were occupied and successful placements were found for a proportion well above the national average; so that is a skillcentre which is producing results.
It may well be that the noble Lord may not have information at his fingertips, or even a note hurriedly provided from the place over yonder, to deal with my questions, but I assure him that there is very grave concern in the part of the country about which I have information which does not at all fit into the Statement by the Secretary of State that all parts of the country will benefit from the expansion. Therefore, I assure the noble Lord that we anxiously and urgently await the precise particulars which are needed before these assurances achieve any reality whatever.
Lord Young of Graffham: My Lords, I am extremely grateful to the noble and learned Lord, Lord Elwyn-Jones, because, while I have every sympathy with what he has said, his remarks in fact demonstrate the very real difficulty which has been besetting the Manpower
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Services Commission in the provison of training. Without wishing to bore your Lordships' House, I should like to say a few words about the general and then a few words about the particular.
At present, the skillcentres have a capacity for 17,700 people within the existing network, and they have about 12,500 places filled. After the reduction the capacity will be about 13,200. Therefore, this is in some ways a reduction which is more apparent than real, save that it is real because the amount of money that will be saved in a full year will be approaching £50 million, which will otherwise be spent in the real provision of training throughout the country.
I point out to the noble and learned Lord that, during my time at the Manpower Services Commission, Llanelli was not far from my thoughts. It was often considered. I should also like to say that, as a result of the adult training strategy, the provision of training within the Principality of Wales will, in 1985–86, be 60 per cent. greater than in 1984–85, in terms of the number of people being trained. That, indeed, is a very real advance. However, although the figures for placement—that is, for those going into jobs—in Llanelli and elsewhere have improved over the last few years, they still run substantially below the figures relating to the local colleges for further education and, in any event, run beneath half the figure for those actually receiving training. This represents not only a waste of resources but a grave disappointment to those, particuarly the unemployed, who go through a training course but are unable to find a job afterwards. It is not important that we train, but it is important that we train in the skills which will be required tomorrow. It is that with which the whole skillcentre reorganisation is concerned.
Lord Dean of Beswick: My Lords, I should briefly like to ask the Minister if he would once again look at the major point that I made. I am sure it was by accident that he missed dealing with it. I should like to know what is meant by the reference in the Statement that no individual closures will take place until satisfactory alternative provisions have been made. What does that mean?
Lord Young of Graffham: My Lords, I apologise for omitting to explain in full, perhaps, what I believe to be the meaning of that part of the Statement. It simply means that the proposals originated from the Manpower Services Commission and were made to the Secretary of State as part of the adult training strategy, and as part of the training strategy the Manpower Services Commission has undertaken to deliver training in all parts of the country according to the new plan. It would wish to identify the sources of the new training before it would seek to close any skillcentre. It is concerned to see that the adult training strategy is delivered, and delivered economically.

Shipbuilding Bill
5.53 p.m.
Second Reading debate resumed.
Viscount Simon: My Lords, in bringing the House back to the consideration of the Shipbuilding Bill I

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should like to apologise for the fact that I do not seem to have very much voice this evening, but fortunately for your Lordships and for me I also do not have very much to say.
I join with the noble Lord, Lord Bruce of Donington, in thanking the noble Lord the Minister for his introduction of this Bill: he certainly made it sound very simple. I listened with interest to the noble Lord, Lord Bruce, who certainly did not find it simple and thought of all kinds of implications which I am not prepared to follow entirely. However, in any case the noble Lord, Lord Bruce, broadened the issues of this Bill very widely. The noble Lord referred (as I was going to refer) to the exchanges at Question Time yesterday which elicited the fact that some serious investigation is to be made and has been undertaken into the adequacy of our shipping in time of war. In my view we must look at the subject very much more widely than that: we must look at the adequacy of our shipping and our shipbuilding to meet the country's requirements in peace as well as in war. For that purpose I suggest to your Lordships that a much wider debate is required. I hope that the noble Lord the Minister will suggest to his noble friend the Chief Whip that on a suitable occasion—and not too far ahead—time should be found for a wide-ranging debate on these allied subjects.
I turn to the Bill. As the noble Lord the Minister reminded us, when it was first introduced in 1978 the scheme was described by the Minister in charge of the Bill—Mr. Kaufman, in the last Labour Government—as intended to alleviate the human problems caused by any contraction of the shipbuilding industry. Therefore, unless we take the view that no further contraction is likely, it is surely wrong to remove that support now. For that reason, I should have thought that it was almost self-evident that the scheme ought to be extended. In fact, I would be inclined to ask why it should be extended for only 18 months. After all, if the position in the shipbuilding industry were radically to improve—as we would all hope, but perhaps not with much confidence—there would be no harm if the scheme still existed; it just would not be used. It would surely be much better to extend the scheme for longer than 18 months.
However, if such a course is difficult at this stage of our discussions of the Bill, then perhaps it would be better to introduce a clause which is quite common in Bills of this kind and which provided that the Secretary of State could, by order, extend it for a further period of whatever length was thought to be right. If, unfortunately, that then became necessary—and I am bound to say that I am rather afraid that it would become necessary—the whole matter could be dealt with without having to bring another Bill before Parliament. I should have thought that that course would be very much easier.
When the noble Lord the Minister addressed us, I was not quite clear about the Government's judgment. Is it presently the case that the Government believe that British Shipbuilders has now adequately skimmed down the size of the industry so that it can reasonably be hoped to survive on its own? I should not have thought so. We have all been heartened by some encouraging news in recent times, especially the large order won by Govan which was announced yesterday.
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But overall it seems to me that the outlook is extremely dismal. There remains massive overcapacity throughout the world in the construction of ships. I found little sign of any large recovery in demand. Therefore, I could not escape the conclusion that the scheme should be extended, and so I find myself in support of the Bill.
There is only one point upon which I should like to dwell a little longer, and that is the matter of the employees in those parts of British Shipbuilding which the Government propose to dispose of to the private sector. This matter was discussed in another place at considerable length. However, I am bound to say that, after reading through the debate, I was not very clear what decision had been reached. Has it not always been the policy that, when legislation is under consideration to transfer the ownership of particular undertakings from one body to another, from the private sector to the public sector or vice versa, Parliament has always taken the view (at least, it has always taken the view in my brief time here) that one of the most important things was to guarantee the conditions of work of the workforce? Why should that not equally apply when it is proposed that parts of the shipbuilding industry should be handed to private interests?
I appreciate that this is difficult, and it may be that it is impossible to apply the scheme in its present form precisely to those who will no longer be employees of British Shipbuilders. But I believe that we have a duty to make sure that in one way or another the employees do not lose these advantages merely because Parliament decides to transfer the undertaking in which they work to the private sector. When this matter was raised in another place the Minister could say only:
"There may be an opportunity to negotiate compensation".—[Official Report, Commons, 9/1/85; col. 827.]
He went on to emphasise that the employees who find themselves with a new master will have no statutory right. Is that really good enough? Should not employees in this position be given a statutory right? I suggest that it would not be very difficult to do this by making it a condition of the sale of any enterprise to a new buyer that the purchaser must provide the same conditions as exist today under the Bill. I hope that when the Minister replies he will be able to say something about that.
I want to refer to one other matter. When we say that the object of this whole exercise is to alleviate the problems which arise from the dwindling of the shipbuilding industry, surely there are other steps that could be taken in that direction? Can the noble Lord the Minister tell us whether anything is being done in the shipbuilding areas which have suffered so heavily (after all, the areas in which the shipbuilding industry provided most of the employment are fairly small) on the lines of what has been done, perhaps rather tardily, in the coal industry and what I believe has been done in the steel industry, actively to stimulate the setting up of new industries in those areas? I have never seen any reference to that; it may be that some work is going on. But I believe that, when we have this tremendous fall in the number of people employed, more is needed positively to encourage and make possible the

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introduction of new industries over and above what is already provided by the Government's regional policy.
Those are the only two points that I wanted to raise at this time. I look forward to the big debate, which I am sure we must have, but I think it would be better to have it at a time when we can devote a whole day to it.
6.3 p.m.
Lord Molloy: My Lords, as has been indicated by my noble friend Lord Bruce of Donington, I believe that this Bill has the wrong title. It is not a shipbuilding Bill at all; it is a Bill to prepare for the selling off, to private folk, of the British public's assets in shipbuilding, rather than that they should be owned by the nation. In consequence, the Minister painted the Government's usual plastic, rosy picture of how they will throw to the workers the redundancy lifebelt of cast-iron or both ends of the lifeline at the same time. What they are really doing is wrecking the old Red Duster, which has served this nation so very well for almost 100 years, in war-time and in peace-time.
I believe that it is a great tragedy that an industry such as the British shipbuilding industry should have been treated as it has over the past few years. As a consequence, I believe that the rosy picture of saving people from joining the dole line too quickly by offering some redundancy pay is an appalling policy. If we are to say that every time a few hundred thousand work people are sacked, it is quite all right because they will receive redundancy pay, we shall all be starving. It is an appalling policy.
My noble friend Lord Bruce mentioned the vast array of skills involved in building a ship. At one time no one could build ships like us. If the industry had been given some encouragement and the research, which was started four or five years ago, had not been abandoned, the probability is that British shipbuilding would have been picking itself up despite harsh competition. We must realise the skills and crafts involved in building a ship, the skills of British workmen—the carpenters, joiners, engineers, heavy and light electricians, shipwrights, boilermakers, "red loaders" (they are the rough painters who do a very skilful job in applying the first coat of paint), riveters, plumbers, cranemen, riggers, storemen, progress chasers, scaffolders, and the sheet metal and ventilating engineers. That vast array of British craftsmen will be dispensed with by this Conservative Government. That is one thing that Mrs. Thatcher is not telling the Americans, or for that matter anyone else.
Therefore, I believe that the end of redundancy in 1986 means much more than just the end of redundancy. There will be no schemes for craftsmen who are sold off to private organisations but only, as the Bill indicates, hopes of a scheme which might be negotiated. I ask the Minister for an assurance that such schemes will be as good as the one which exists at the moment.
Privatisation threatens the future of shipbuilding craftsmen engaged in sectors where promises have already been given that they will be sold off. Consequently, I can understand that these workmen
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have been tempted to apply for redundancy now, and that they want to ensure that the compensation which is paid now is better than nothing when privatisation becomes a reality. They do not want to give up their jobs; they do not want to lose their crafts. But they sense that the Government's policy is to end British shipbuilding; so they think that they will get out now and receive £2,000. I believe that any Government which put that kind of thought into the minds of the craftsmen whom I have listed ought to have second thoughts.
This is a sinister Bill. Perhaps I may quote from Lewis Carroll. The way in which the Government are doing this reminds me of the lines:
"How cheerfully he seems to grin,
How neatly dressed his claws;
and welcomes little fishes in—
with gently smiling jaws".
But this Government are not so much a crocodile but more a shark, floating around on the political scene to look after one tiny sector of their political supporters and ignoring the mass of workmen who are the real creators of the wealth of our nation. We saw this when the workers at the Tyne Shiprepairers were bought out of a scheme. Then—as even now—craftsmen who left British Shipbuilders were compensated. Those who leave after 1986 face the possibility of suffering tremendously and getting nothing.
What does this add up to? Workers in yards to be privatised leave. They receive the benefit of redundancy pay. This advantages the purchasers—those about to buy—and privatisation. Half the work force is bought off, not by them, but by the taxpayer whom this Government love so much. That is who will pay the redundancy, ready for the private people who will purchase what is left of British industry. There will be a smaller work force and, of course, there will be no social obligations. That bill is going to be left for the taxpayer.
There is great worry and fear, and it is dominant in the industry at all levels. There has been a crisis for a number of years. The agonies of this crisis in our shipbuilding industry have been shared right from the top industrialists down to the craftsmen who work to make a reality where at first there is nothing but a few lumps of wood at the bottom of a dry dock and where there emerges a massive ship. Over the last few years they, too, have been wondering when is something going to be done.
My noble friend Lord Bruce of Donington quoted the chairman of British Shipbuilders, Sir Robert Atkinson, and I should like to quote what it was said that he had uttered. In another place, as reported in Hansard, at column 797 of 9th January, my honourable friend Mr. Smith said that Sir Robert Atkinson had said that,
"during his period in charge of British Shipbuilders he was never asked by Ministers about research and development and about the future of the industry. He added: 'But if I talked about closures or redundancies, their eyes shone'. That is the former chairman of British Shipbuilders…".
That was not from an extreme left-wing politician; it was from Sir Robert Atkinson himself. I would have hoped that this Government would at least have taken some cognisance of what he had to say.
Our island, Great Britain, is a maritime nation, and I believe that it is essential that we should have a

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proper shipping industry. If we are going to have a shipping industry—because there is a difference; and it is vital to this country—we must have a shipbuilding industry. A shipbuilding industry is crucial to a shipping industry. Therefore I believe that we ought to end the folly of this privatisation. I hope that the Government will have second thoughts and put the nation before their private political friends, irrespective of what party they might belong to.
It is true that we were up against it in the past few years against Japan and Korea. Much of our British skill was exported over there, and the Government should have been aware of that at the time. But now what should we do? It is not too late. We should establish a Royal Commission to look at this fundamental and great British industry of shipbuilding, which is so vital to a maritime nation.
It is sometimes said that Royal Commissions take a long time. We have all said that, and we all know it, but I am of the opinion that there are enough experienced Members in this House who know full well that often Royal Commissions have been a boon. Admittedly, they need to be stirred up now and then. If a Royal Commission were established, it could be told, under the terms of reference, that it had about 12 or 18 months to report. With the best minds in Britain concentrating on this subject, something would emerge which would help us. I want to see manufacturing industry given at least the same importance, if not more, than is presently being given to the service sector.
This Bill also provides for more unemployment. I do not believe that that is a humorous matter in any way. More unemployed! We have 4 million unemployed. The dole queues will be lengthened by the list of skilled craftsmen who will not be building ships under this Government but will be getting a few pounds redundancy money; and then, it seems, they will for years be joining the dole queues. There will be more unemployed; more degradation; more upsets in families; and more hopelessness for British craftsmen.
Let the Government show confidence in this industry and in the men at all levels who work in it. Let us plot a new course for the British shipbuilding industry. Let us acknowledge that this shipbuilding industry is a great industry, and that if we are prepared to say so, we can chart a course so that it will sail into the seas of success. I have some knowledge of this industry, of all the men who work in it from the top levels of management right through to all the skilled craftsmen, and I believe that this is a valuable asset for my nation. The Government should have second thoughts and save this industry from the destruction they are anticipating.
6.15 p.m.
Lord Lucas of Chilworth: My Lords, I am grateful to the four noble Lords for their positive contributions this afternoon. Perhaps, however, they were positive contributions which might have been better placed were we discussing the shipping industry in the wider context. I find it absolutely incredible that when we come forward with a Bill to extend for 18 months a scheme to help those who suffer the hardships inherent in a declining shipbuilding industry—a shipbuilding
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industry that is declining across the world—noble Lords should attack us and accuse us, the Government, of having some devious reason.
The noble Lord, Lord Bruce of Donington, said in his opening remarks that it was a "seemingly innocuous little Bill", and he ended up in somewhat robust and characteristic fashion by saying that it was a "squalid little Bill". There is nothing squalid about continuing a scheme which cost some £36 million last year, and probably a little less this year, to alleviate the hardship, on top of—if I may remind your Lordships—the normal Department of Employment redundancy payments scheme. I do not find that squalid at all.
The noble Lord, Lord Molloy, and the noble Viscount, Lord Simon, asked for a debate. That is not within my gift. They have their Chief Whips. If they care to give up their day to debate the industry, I know that either my noble friend Lord Brabazon of Tara or I, or another noble colleague, will be delighted to answer such a debate. But let us now just have a look at what has been happening—
Viscount Simon: My Lords, before the noble Lord leaves that point, may I ask him whether he is saying that this enormously important issue cannot be discussed in Government time?
Lord Lucas of Chilworth: My Lords, I did not say that. I just suggested that if they wanted to debate it, they might ask their noble friends the Chief Whips whether they had the time. I do not know; I cannot answer that. It is not for me to answer.
I want briefly to refute the charge that we have abandoned the shipbuilding industry. Nine-hundred-and-thirty-four million pounds in public dividend capital since nationalisation has gone into the shipbuilding industry. Another £250 million has gone to British Shipbuilders from the intervention fund. Sadly, although some of that money has gone into re-equipping some of the yards, the vast majority of it has gone to fund production costs. It has in fact gone to fund bad debts from the years when the industry was nationalised. There can be no doubt that plenty of support has been given.
When this Government came into power in May 1979 we introduced some reality into the business, on the basis that you cannot continue to throw good money after bad. That is exactly what we have done. The industry is better today than it was. It is more competitive. I said earlier this afternoon about Austin and Pickersgill that when disaster threatened them in the face only a few weeks ago it did not take long for management and unions to find new working practices and arrangements which secured for them an order.
I totally refute the argument that this Government have abandoned the industry. If this Government have abandoned anything, it is the principle of throwing good taxpayers' money after bad in a declining industry. We have done much to alleviate the hardship outside by paying redundancy payments. There is no doubt about that.
The noble Lord, Lord Bruce of Donington, and the noble Viscount, Lord Simon, in a different way, asked me why we have given notice of discontinuance of the

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scheme at this time. The Bill does not abandon the scheme at all: it continues it for 18 months. In the past we have had extensions of two years and two years. What we have said—and I give notice today—is that we do not see the necessity or the desirability of continuing the scheme after 18 months or so. There is no case for maintaining the bureaucracy of a statutory scheme for the two nationalised concerns after 1986.
Although I do not look for further redundancies, should there be some, both British Shipbuilders and Harland and Wolff will be employing, as I said in my opening remarks, one-third of the entire industry. Is it right that one-third of the industry should have preferential treatment? I do not believe that is so, and that is why I gave notice today, which is a proper and honourable thing to do, that this is our current thinking. There might be some truth in the allegation made by the noble Lord, Lord Bruce of Donington, were I to have withheld that information.
I find it not untypical of the noble Lord, Lord Bruce of Donington, to seek to find the very worst aspects of our Bill. He said to us this afternoon that the Bill provides the means to induce much redundancy before privatisation in order to enhance the value to the private sector. I do not say that I have quoted him absolutely precisely, but I wrote down those words. What a perverse way of looking at things! I sometimes despair.
Lord Bruce of Donington: My Lords, if the noble Lord will excuse me for just a moment, he is very courteous and I am much obliged to him. The noble Lord seemed to indicate that the decision of the Government to terminate the scheme in December 1986 was not final. I refer the noble Lord to column 51 of the proceedings of the second day of the Standing Committee in another place, where the Minister's statement is quite specific. He was asked the question whether the present scheme would end in December 1986:
"Am I correct?"
"Mr. Butcher: Absolutely".
Lord Lucas of Chilworth: My Lords, I do not know why the noble Lord should have read that out, because that is exactly what I said. We have given notice—and I repeated that notice in your Lordships' House this afternoon—that it is our intention that the scheme shall end in 18 months, in December 1986. That is 18 months from June 1985. I do not know what the noble Lord is arguing about, because I am not arguing. I am saying that this Bill does not stop the scheme. We have given notice of our intention that it will stop. In other words, we have given notice of our intention that in December 1986 we shall not be bringing forward another Bill to extend the life. That is fair, reasonable and proper.
We have said that we will underwrite the cost of a successor scheme through the public dividend account. I do not know what can be more honest and open than that. What I do say without any shadow of doubt in answer to the noble Lord, Lord Molloy—who, in his usual voluble way and emotive words, said, "We are wrecking the Red Duster" is: what an absolute lot of nonsense! We are ensuring that
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we do not continue to fossilise our industrial structure by pouring in more and more money and deriving no benefit. What we have to do—and he jolly well knows it—is to facilitate essential change. We have at the same time to pay regard to those people who suffer thereby. It is not just a couple of thousand pounds, as he said—
Lord Molloy: My Lords, may I—
Lord Lucas of Chilworth: My Lords, perhaps the noble Lord will allow me to finish. If a man aged 50 with 20 years' service accepts redundancy, he receives a cash lump sum payment of £5,300 and he receives £46 a week for two years. That is on top of the ordinary employment redundancy scheme arrangements. I do not believe that that is just a couple of thousand pounds.
Lord Molloy: My Lords, the idea of this Bill is to privatise the shipbuilding industry, and then it will be purchased by certain people thinking that they will make a lot of money out of it. But if the Minister keeps up his argument now the Government will be lucky if they can give it away.
Lord Lucas of Chilworth: My Lords, notice of the Government's intention to sell a number of the yards was given. I repeated it in your Lordships' House over a year ago. This is not a privatisation measure. If those who buy the yards are able to make a profit, that will be absolutely splendid because the nationalised industry has not made a profit. It has made losses successively year after year, as high as £161 million. If somebody can turn that into profit, I think that is splendid.
I do not think there are any other main questions to be answered, other than one asked by the noble Lord, Lord Bruce of Donington, in relation to the writing off of the Upper Clyde Shipbuilders' loan. He said that that was linked with privatisation. Of course, it is nothing of the sort. It has nothing whatsoever to do with privatisation; nor has it very much to do with British Shipbuilders. It writes off a loan which was made directly by Government to a company which went into liquidation in 1972. It is sensible to remove from the accounts an amount of that kind.
The noble Viscount, Lord Simon, thought that perhaps we should require new owners to offer the same redundancy schemes as apply now. While in general terms any new owner who buys an undertaking from the state accepts in principle the contractual obligations with regard to work methods, employment conditions and so on, including redundancy schemes, it would be quite wrong to bind that new owner to schemes, particularly in the shipbuilding industry, which has grasped the nettle and the men in which have grasped the nettle. They have responded to change, and it is up to the companies to negotiate those changes with the new employer.
I do not know why the noble Lord, Lord Molloy, laughs. I said at the outset that this is a simple and generous, small Bill. It will go some long way towards ensuring that the hardship that occurs in necessary change is alleviated to some extent. I ask your

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Lordships to give this Bill a Second Reading this afternoon.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Prevention of Terrorism (Temporary Provisions) Act 1984 (Continuance) Order 1985
6.30 p.m.
The Minister of State, Home Office (Lord Elton)The Minister of State, Home Office (Lord Elton) rose to move, That the draft order laid before the House on 12th February be approved. [12th Report from the Joint Committee.]
The noble Lord said: My Lords, the draft order has been considered by the Joint Committee on Statutory Instruments, which made no comment.
This order is made under the Prevention of Terrorism (Temporary Provisions) Act which your Lordships placed upon the statute book not quite a year ago. Subsection (1) of Section 17 of the Act provides that it shall remain in force for 12 months from the date on which it was passed and that thereafter it can be renewed for not more than 12 months at a time. The total life of the Act is limited to five years. The purpose of this order is to provide the first renewal of the Act and so provide it with its second year of life, starting on the 22nd of next month.
When the House debated the report in Committee, a number of your Lordships were concerned that a measure which touched the civil liberties of individual citizens so closely should be subject to more than usual scrutiny once it was in operation. You felt, in particular, that the House should be informed of the way in which the authorities had used the powers which it gave them and that this information should be available before I came to the House for a renewal. When your Lordships discussed the Bill at the Report stage I undertook that an independent person of stature would be appointed to report on the working of the Bill, and that his report would be available before the debate on renewal took place. Your Lordships will know that Sir Cyril Philips was appointed last year to consider the working of the Act. His report has been received and it was placed in the Printed Paper Office last Tuesday. My right honourable friend replied to the report, and to specific points and suggestions in it, by letter and that letter was placed in the Printed Paper Office yesterday.
I think your Lordships will agree that Sir Cyril, who has had the considerable advantage of four years' experience as chairman of the Police Complaints Board, has gone to considerable lengths to do his job thoroughly. The result has, I believe, been a broad endorsement of the way in which the powers that the Act provides have been used; but it does not amount simply to blanket approval, and your Lordships will note that he has made a number of detailed comments on the way in which the Act is operated. These touch in particular on the way in which custody record sheets are maintained, on the identification of complaints made about the way the powers given by the Act are used (31), on the numbers of landing and embarkation cards that ought to be filled in, and on the way in
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which inquiries are made after embarkation cards have been completed.
My right honourable friend responded specifically to each of these points in the letter which your Lordships have before you, and I shall not repeat what he has said. On the fourth point, however, which deals with landing and embarkation cards, he did say that he hoped to make an announcement today. The question at issue is whether or not every passenger travelling between the Republic of Ireland or the Province of Northern Ireland and ports in Great Britain should be required to complete a landing or embarkation card. The proposal for this was made by my noble friend Lord Jellicoe in his report on the working of the earlier Act, and my right honourable friend has already had it under consideration. Since the recommendation was made, he has received a report from Her Majesty's inspectors of constabulary on the work of the police operating the port controls provided under the Act. We welcome the thorough and perceptive study which Her Majesty's inspectors have undertaken, and the detailed recommendations in the report are receiving careful consideration. In the context of the same study, Her Majesty's inspectors were asked to assess the implications for resources of the recommendation by my noble friend that all passengers on commercial flights and sailings between Great Britain and the island of Ireland should complete landing and embarkation cards. In the light of their conclusions, and taking into account all the views that have been expressed on the security and other considerations, my right honourable friend has decided that it would not be appropriate to implement Lord Jellicoe's recommendation, and that in general a more selective use of these cards is to be preferred.
As your Lordships will recall, the present Act made a number of changes to the 1976 Act of the same name, most of which followed recommendations made by my noble friend Lord Jellicoe in his review of the earlier Act's operation. Your Lordships may like to have an indication of the practical results that those changes have produced. Perhaps the most significant change was the extension of the powers of arrest and detention under Section 12 of the Act to those involved in international terrorism. My noble friend drew attention to the growing threat from this source: this comprises not only terrorism that is directed deliberately at British citizens or British interests, but also the wholly unacceptable use of our country as an arena for quarrels in which we have no interest and for which we have no responsibility. The events of the past 12 months have demonstrated all too clearly that this threat has in no way abated. Only weeks after the Act was passed, we saw the foul murder of WPC Yvonne Fletcher in St. James's Square. In the period from 22nd March to 31st December, 44 people suspected of involvement with international terrorism were detained at the ports or inland under the prevention of terrorism legislation. In 18 of these cases my right honourable friend authorised extensions of detention beyond 48 hours. In eight cases criminal charges were brought and in 13 the person was either deported or removed under the Immigration Act 1971. In only one case in which the person was held for more than 48 hours was he released without charge and allowed to remain in this country.
During the passage of the Act the Government responded to the legitimate doubts that were raised about the scope of these new powers by giving the assurance that they would only be used when there was some prospect of a criminal charge in this country or of deportation. I believe the figures show that the police and my right honourable friend have kept very closely to these criteria. Another important change in the present Act was the introduction of flexibility to the Secretary of State's power to extend detention. Under the earlier legislation, it was possible only to authorise a single extension of five days; it is now possible to grant one or more extensions of any shorter period of up to a total of five days. Our intention was greater control of the use of extended detention so that detainees might spend less time in custody as a result. In the period to 31st December, of the 147 people held under the Act in Great Britain, 35 had their detention extended. In only 11 of these cases was there what one might call an "old style" single extension of five days; in a further 10 there were two extensions totalling five days; and in the remaining 14 there were single extensions of between one and four days. It seems that this change is having the result we hoped for from it. Your Lordships will see from the figures I have given that 112 of the people detained were held for fewer than 48 hours. And there is another change.
The current Act, unlike its predecessor, deals with international as well as Irish terrorism. In order to see the change therefore we need to look specifically at cases in Great Britain relating to Irish terrorism, for which we have figures over a number of years. If we take the total number of detentions, whether extended or not, we find that in 1975, when the use of the powers was at its height, there were 1,067. In 1984, on the other hand, there were only 159, which was in fact 32 less than in 1983 and the lowest so far. There has also been a reduction in the number of exclusion orders for Irish terrorism from 50 in 1975 to merely three last year, which is also the lowest ever and 12 less than in 1983. This continued reduction is very heartening and it will surely be welcomed by us all. But it does not mean, however, either that these powers are now unnecessary, or that the system of controls directed at Northern Irish terrorism can now be dismantled.
After a year which has seen the bombing of the Grand Hotel, Brighton, in a cold-blooded and barbarous bid to blow the democratic process in this country to smithereens, we surely need no other reminder of the constant threat posed to the mainland of Great Britain by Irish Republican terrorism. But equally, if we were to abandon these powers, we would be turning our backs on the Province itself, where that threat and its realisation are facts of daily life. In Northern Ireland, there were 908 detentions under the Prevention of Terrorism Act in 1984; and in 533 of these cases extensions of detention were granted. These powers represent a vital weapon for the Royal Ulster Constabulary in their continuing struggle against the forces of violence. We have consulted the police not only in Northern Ireland, but also in England and Wales and in Scotland. They are united in their conviction that it is essential that these powers remain available to them. They are determined to win
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the battle against terrorism and the Government are equally determined to do all we can to support them.
The draft order that is before the House seeks to continue the Act for 12 months in its present form. It would be possible to continue only selected provisions of the Act and to allow the remainder to lapse. Last year we debated specific proposals that separate orders should be made in respect of different portions of the Act in order to concentrate attention on whether there genuinely was a continuing need for each of the various powers. I do not believe the time is yet ripe for any such piecemeal approach to this legislation. It is, as I have said, not yet a year since we completed our consideration of what was then the Prevention of Terrorism Bill. We debated it most fully and most carefully, word by word, line by line. Since then, at Brighton and in St. James's Square, we have been horribly reminded that the threat of terrorism has in no way abated. We have a package of powers that Sir Cyril's report shows are being used sensibly and with restraint when they are necessary. The changes that were introduced last year have, as I have shown, proved themselves successful. In the light of all those factors, it would be most unwise at this stage to contemplate change.
We do not ask lightly for your Lordships' approval of this draft order. It has not been introduced without real thought and genuine consideration of the continuing need for these wholly exceptional powers. The Government are convinced that they are indeed necessary, but they are convinced also that they should remain in force for not a moment longer than they continue to be necessary. On that basis I ask your Lordships to agree to the order which has been laid before you. My Lords, I beg to move.
Moved, That the draft order laid before the House on 12th February be approved.—(Lord Elton.)
6.41 p.m.
Lord Mishcon: My Lords, as the noble Lord the Minister has said, the provisions of this Act were carefully debated in your Lordships' House last year. We realised then, as we realise now, that there are possibly three fundamental principles which we have to consider, and we have to see where the balance of advantage lies in regard to those principles.
The first principle is the need to contain and, if possible, to remove from our land what is perhaps one of the greatest scourges of our time: that of terrorism. The noble Lord is quite right when he reminds us of the black days which are written in our contemporary history: Harrods, Hyde Park, St. James's Square and the death of the gallant policewoman, the Libyan killings, and Brighton.
The second fundamental principle is to maintain what is possibly the greatest jewel, and the most precious one, in our national crown: that is the freedom of the subject and all our law which goes to defend it. I could not put it better than did the noble Lord the Minister on the Second Reading of what was then the Bill, on 6th February 1984, at col. 885. He said—and how I agree with him, as do all my noble friends:
"There is something repugnant to the British spirit in the limitations to the rights and freedoms of individual citizens which such legislation as we now contemplate necessarily provides. It is for

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that reason that Parliament doles out these necessary powers so reluctantly and for such short periods of time. The Home Secretary, upon whom responsibility for internal security rests, is not given these powers indefinitely, or for the duration of a particular state of affairs, or even for the life of a Parliament. Year by year the Home Secretary, and his predecessors, have had to come to the House of Commons and justify their continuance—just as I, and my predecessors, have had to come to this House to convince your Lordships that they were still necessary.".
I end the quotation there, and I repeat: it is a principle; they are words with which all my noble friends, so far as I know, profoundly agree.
There is a third principle, which is the need to maintain public confidence and public co-operation in such provisions as are laid down in this Act; the need to see that that co-operation is not removed from citizens who feel that powers are being wrongly used or that wrong powers are being given. And, if I may say so, that particularly affects Irish citizens—honourable Irish citizens—both in Northern Ireland and in this country. It is a difficult matter, when you consider those three principles, to weigh the balance; so difficult indeed that I suppose it splits the views of people in various political parties. Parliament, in its wisdom tried to emphasise the need for such care before renewal approval was given to the provision of this Act when, in a Standing Committee in another place, and on a free vote, it was decided to put into the Short Title of this Bill the words "Temporary Provisions".
Another question arose when the Bill (now the Act) was discussed in your Lordships' House and the noble Lord the Minister fairly referred to these matters. Your Lordships may remember that the noble Lord, Lord Henderson, and, I believe I am right in saying, the noble Lord, Lord Wigoder, and others on all sides of the House, wondered whether, when we came to review the provisions of the Act and sought to see whether there should be an order to renew, there should not be separate consideration of the various parts of the legislation. I remember, as will your Lordships, too, the noble Lord, Lord Henderson, moving with some eloquence, as we would expect of him, an amendment which dealt with the separate consideration by your Lordships of parts of the legislation when the review took place. On all sides of the House—and particularly, if I may say so, on this side of the House—concern was expressed on the need for review, and it is good to see that tonight we are actually participating in such review.
However, I have to remind your Lordships of a particular point, if I may. I do so without any discourtesy at all to the noble Lord the Minister, and later I shall be saying a personal word regarding my continued respect for him—a respect that all of your Lordships have. The amendment of the noble Lord, Lord Henderson, was withdrawn upon a series of undertakings being given (as reported at col. 415 of the Hansard of your Lordships' proceedings) on the 8th March 1984, at the Report stage of the Bill. I shall be forgiven—because it is so important—if I quote the undertakings that were given. The noble Lord, Lord Elton, said this:
"Your Lordships have undertakings that, except under circumstances that make it impossible, your Lordships will have an ample opportunity to debate the Act. Your Lordships have an undertaking that the Secretary of State will consider with great care which points from such a debate might be included in a revised order. Your Lordships have an undertaking that the debate will be
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conducted in the light of the report of the person we shall proceed to appoint following our debate on Amendments Nos. 10 and 11".
The noble Lord the Minister then went on to refer to the noble Lord, Lord Henderson:
"The noble Lord was kind enough to say what I had intended to point out to your Lordships, that that cast a different light on the need for supervision in the way that is now proposed. I hope that your Lordships, with those three substantial undertakings, will feel that you have done your job as constitutional watchdogs for the liberties of the private citizen, and will be content without this further device".
The noble Lord, Lord Henderson, said at col. 416—and I quote his remarks—
"the noble Minister's undertaking in Committee has been reinforced again just now by an undertaking he has given on behalf of the Secretary of State. For these three reasons I should be prepared to withdraw the amendment, though not for the real technical objections. I do not regard them as having any validity at all."
Fairly was it said by the noble Lord the Minister that a report of how this was working out, upon which the whole of this debate was meant to take place, was put in the Library 48 hours ago; namely on Tuesday. The letter from Sir Cyril Philips dated 15th February, which accompanies the report states,
"As you suggested it takes the form of a personal enquiry"—
this is of course addressed to the Secretary of State for the Home Department—
"intended to assist Parliament when considering any order laid before them by the Government for the continuation of the Act".
Is it really good enough, when everybody is saying that this review must take place with the greatest care and with all the information before the House, and in the light of a report to be made, that that report is available to the membership of your Lordships' House only 48 hours before the debate takes place?
I wish that my complaint ended there, but it does not. This debate upon the provisions of the Act, and the question of its renewal, is taking place when, so far as I know, I may be the only person who happens to have the Tenth Report of the Standing Advisory Commission on Human Rights for 1983–84. I do not know whether anybody else has that privilege. That is a commission described by the Secretary of State in the following terms, which are quoted in the report:
"I greatly value the independent role of the Standing Advisory Commission on Human Rights and shall continue to look to it for advice on human rights matters generally, while taking account of the responsibilities of other statutory bodies".
This report was available for the first time at three o'clock this afternoon. It has in it matters affecting the provisions of this Act, its renewal and advice and recommendations in regard to it, to which I shall refer your Lordships later. There is no opportunity at all for your Lordships to consider this important report of the commission on the working of this Act, on the question of renewal and on what ought, or ought not, to be renewed. As I said, I shall be referring to those matters hereafter.
But my first and almost poignant observation is this. It is not the way in which your Lordships' House ought to be treated, especially when—and I say this without any disrespect personally to the Minister who, I am sure, is not responsible for the delays—there have been undertakings to your Lordships' House about the possibilities of this debate affecting the mind of the Secretary of State in deciding what ought to be done in

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regard to the renewal of the final order, and when we were told that we would have one month between a debate taking place in your Lordships' House and in another place and the laying of the final order.
So I start with that observation and say that it is not easy to know whether one ought, in those circumstances, to oppose or approve the order on the basis which I have just mentioned. But I know that your Lordships will expect me, at all events, to deal with some of the specific points which I think ought to be borne in mind by the Secretary of State.
The first point to which I come is exclusion orders. The House will remember the concentrated debate that took place upon a provision so alien to our laws, our customs and our traditions, that people should be excluded from parts of the United Kingdom and also excluded specifically by another section of the Act from Northern Ireland. We insisted upon certain safeguards. We did not like the provision, but in the end it was maintained in the Bill with certain safeguards that were inserted in regard to it.
What are the figures? The noble Lord the Minister referred to them very briefly, but may I remind you Lordships of what was said in the report of Sir Cyril Philips? In paragraph 38 of his report he drew attention to the fact that,
"During 1984 three exclusion orders were made, two being in respect of persons not detained under the Act. This is a small number by comparison with recent years. There were, for instance, 15 in each of 1982 and 1983".
That is an indication, one might think, of whether we really need to renew provisions relating, for example to exclusion orders.
If I merely had to leave it at that, it would be a matter for your Lordships to consider and to consider, without a recommendation from anyone, whether exclusion orders should no longer be renewed and the power to issue them should no longer be renewed. But this is the relevance of my having referred to the report of the commission which was available only at three o'clock this afternoon, while we are debating this very serious matter at around seven o'clock this evening, because this is what the commission says in paragraph 40 on page 15:
"We acknowledge that implementation of the Jellicoe recommendations has considerably limited the power to exclude persons from Great Britain to Northern Ireland and vice versa, but we remain unconvinced of the need for its retention. Since the passing of the Act, only three persons have been excluded from Great Britain to Northern Ireland, and one from Northern Ireland to Great Britain. Even in its limited form this power is, we believe, contrary to the spirit of Article 8 of the European Convention on Human Rights and to Article 12(1) (right to liberty of movement and to choose one's residence) of the United Nations Covenant on Civil and Political Rights. Last August the Government announced that it has withdrawn its notices of derogations from both the Convention and Covenant and we hope that in this context it will now be possible to allow these extraordinary powers to lapse".
I suspect that the Minister himself did not know before he walked into the Chamber, or certainly at some hour this afternoon, of the existence of this important report and this recommendation. Knowing him as I do, I am sure that if he had been aware of it he would have said, when referring to the exclusion orders and the ways of renewing them, that there was a report of a commission of the importance of the Standing Advisory Commission of Human Rights
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which had recommended to a senior Minister of the Crown that these exclusion orders should no longer be retained.
There are other recommendations made by the Standing Advisory Commission on Human Rights, but because of the lateness of the hour, the desire of other noble Lords to speak and the length of the agenda, if I may so term it, of your Lordships' House today, I shall be very brief about them. There is the whole question, for example, of Section 11. Again, your Lordships were very doubtful about Section 11. Perhaps I may remind your Lordships that this is the provision which makes it a criminal offence not to pass on to the authorities information which you happen to have which may relate to terrorist activities. We were all doubtful about that. We allowed it to go through. I was looking—I am sure your Lordships were—for something in the report of Sir Cyril Philips about how many prosecutions had been brought and whether it was necessary really to keep Section 11. I cannot see anything on that in the Philips Report. The noble Lord the Minister did not tell us how many prosecutions there had been, or what use there was in Section 11, so again I say to the House from these Benches: is there really a need to keep the powers under Section 11?
In the report of the Standing Advisory Commission on Human Rights, to which I have referred so many times—it is almost a mockery that I refer to it when your Lordships have had no opportunity to see this important document but are asked to come to some important decision tonight—there is also a firm recommendation that there should be integral legislation relating to Northern Ireland, because at the present moment there is this Act, there are the Emergency Powers Regulations and there is the Police and Criminal Evidence Act. It means there is a complete difference between the provisions that apply to England, Scotland and Wales and those which apply to Northern Ireland, and the law in regard to Northern Ireland is in such a jumble by virtue of the situation to which I have just referred.
I could go on with other matters relating to this order, but I feel that your Lordships have been patient enough and that all sides of the House will share our disappointment at the lack of time and opportunity that we have been given properly to consider whether all or part of this order should in fact go forward. It is with some dismay that I say this, having regard to the solemn undertakings that were given to this House.
7.3 p.m.
Lord Wigoder: My Lords, I am grateful to the noble Lord the Minister for his explanation of, and his comments on, this order, and also, indeed, for his assistance in trying to help those of us who were interested in the order to receive at the earliest possible moment the report by Sir Cyril Philips and the riposte by the Secretary of State.
The object of our proceedings this evening has been made clear particularly by the noble Lord, Lord Mishcon. It really arises as a consequence of the amendments that were moved by the noble Lord, Lord Henderson, and myself, when the Bill was being considered in this House, in which we endeavoured to ensure that the different parts of the Bill, or the Act as

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it now is, might be considered separately and renewed, if necessary, or not renewed, instead of us having to take the Act as a whole and renew it en bloc as a result of our not being able to amend the order. The Government proposed as an alternative the somewhat cumbersome procedure upon which we are now embarked, under which we apparently have a debate on the renewal order about a month before the Act is in fact due to be renewed, and the Government will then consider whether sufficiently strong representations have been made today to warrant their changing the order and reintroducing it during the next month.
That, as I understand it, is the object of the debate this evening, and I propose to confine myself entirely to that and not to embark on a consideration of any of the wider issues. We have been much helped, of course, by the report of Sir Cyril Philips, who has monitored the working of this Act. I am happy to say that that arises in the first place as a result of proposals made on the Liberal Benches in another place. I note that this Act became law on 22nd March 1984. The undertaking was given by the noble Lord the Minister before that date that there would be a monitor. So far as I can see from the report of Sir Cyril, he was not in fact appointed until December, some eight or nine months later. If that is so, perhaps that explains why, as the noble Lord, Lord Mishcon, has pointed out, we have had had this report for only a matter of 48 hours. After all, Sir Cyril has been working on the matter for only some five or six weeks, and he has really done rather well perhaps to get a report ready at all in that time.
I do not particularly complain about the 48 hours. It is a short report, and I found it perfectly possible to digest it in that period. However, I cannot help wondering why there was the delay in asking Sir Cyril to take up the position in the first place, and whether the intention was not always that the monitor should be there 12 months of the year supervising the way in which the Act was working.
I come, then, to the main areas of concern in the Act in order to try to see whether there is any real case for seeking to persuade the Government that certain parts of the Act ought not to be renewed at this stage by order. I begin with a matter that has concerned us all—the provisions for detention and particularly for extended detention up to a period of seven days. I note, if I have understood Sir Cyril's figures correctly, that of those who were subject to extended detention during the year, seven of them were charged, one of them with a very serious offence. I note, on the other hand, that of those subject to extended detention, some 19 were not charged at all and in due course were set free.
I do not know—and I have made this point before, in other debates on this subject—how one draws an arithmetical balance. I accept, of course, that there must have been the gravest hardship, the gravest inconvenience and in many cases the gravest wrong to those 19 who were detained and then not charged. On the other hand, I cannot help but reflect on the number of lives that might well have been saved as a result of the fact that seven people were in due course charged because of the provisions for extended detention. In those circumstances, my own feeling at the moment is that, on the whole, the balance is in favour of leaving
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the provisions for extended detention in the Act for another year.
I note that in paragraph 20 of Sir Cyril's report he comments that there have been cases—"instructive instances"—in which the Secretary of State declined to grant applications for extended detention. I should be grateful if the noble Lord the Minister could assist us in due course as to the number of such cases in which there have been refusals by the Secretary of State.
The second main area about which many of us had and still have doubts concerns the exclusion provisions. One cannot help but notice—it is a very remarkable figure—that during the year only three exclusion orders have been made. I think the time may very well come within the next year or two when there will be agitation in your Lordships' House to remove that power from the Act when this order is continued. I venture to think that it might be perhaps a little premature at this stage, in the first 12 months of the Act's working. So far as I am concerned, I would not at this stage want to support any such course.
The third matter of importance is the extension of the principles involved in this Act to international terrorism. I certainly would not disagree, and did not disagree, with those proposals then. I note that some 44 people have been detained on suspicion of acts of international terrorism. Eight of those were in due course charged, and apparently 13 were deported back to their own countries. If it is not confidential information, it might be interesting if the noble Lord could tell us to which countries those 13 people were in due course returned.
The final matter in the Act which aroused much comment at the time was the provision in Section 11 making it a criminal offence not to disclose information, and about which the noble Lord, Lord Mishcon, has already commented. I assume from the fact that Sir Cyril does not mention this matter that there have been no such cases during the year. In fact, I believe there have been no such cases most years since 1976. There has only ever been the very occasional instance, usually involving a number of defendants in the one case. That strengthens the argument again that that section of the Act is unnecessary. But as we passed this Act only 11 months ago, perhaps it is a matter upon which we ought to reserve judgment at this stage.
When I consider the Secretary of State's response, there is only one matter about which I would ask the noble Lord, Lord Elton, to provide help; that is, where he deals with the subject of tape recording, Sir Cyril suggested it was important that interviews with suspects under this Act should if possible be tape recorded. The Secretary of State says that some aspects of the kind of cases dealt with under the Prevention of Terrorism Act raise particular difficulties in this context. I am not quite sure what is meant by those words. It might be possible for the noble Lord, Lord Elton, to elaborate upon them when he replies.
One's overall view of this order and of the progress made over the past 11 months is this: first, we passed a new Act of Parliament only 11 months ago after—as has been said by the noble Lord, Lord Elton—very careful discussion and debate in your Lordships' House. In principle, it would be wrong—unless a very

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strong case was made out of the evidence—to make alterations to a new and carefully considered piece of legislation so quickly.
My second conclusion is that the legislation is effective at the moment. I do not mean effective in the sense that it will ever provide a long-tem solution to the dreadful problems of Northern Ireland; however, it appears to be having an appreciable effect in our fight against dangerous, desperate and evil men. In those circumstances, there seems to me to be no sufficient evidence at this stage to warrant asking the Government to take this order away and to amend it, so that particular sections may be omitted from the renewal process. On this first occasion, I am certainly prepared not to oppose the renewal of this order.
7.13 p.m.
Lord Boyd-Carpenter: My Lords, I find myself very much in agreement with the noble Lord, Lord Wigoder, in his concluding words. Whatever doubts or anxieties any of your Lordships may have as to particular provisions of the Act, it is a very new Act, to which this House directed close and detailed attention not very long ago. It has not been operating very long, and the independent report upon it by Sir Cyril Philips certainly does not appear to me to reveal any serious or severe failures in it. Therefore, whatever your Lordships or the Government may decide to do in future years, it would seem that, on this occasion, to seek to dismember the Act to some extent would be at the very least premature. I therefore find myself wholly with the noble Lord, Lord Wigoder, on that point.
The noble Lord, Lord Mishcon, is perhaps the most skilled debater in this House; and the skill with which he fastens on any weak point in his opponent's case was demonstrated right at the beginning of his speech when he took the wholly reasonable point—with which I have complete sympathy—that it is a pity that we should have received Sir Cyril Philips' report only 48 hours before discussing this order. However, as the noble Lord said, it is not a very difficult document. Most of us with any experience of digesting documents would not have taken long to digest it. But it is true that many noble Lords have other preoccupations and commitments, and so I would say to my noble friend that it seems to me somewhat inconvenient that this document could not be made available somewhat earlier. On that limited point, I found myself not in disagreement with the noble Lord, Lord Mishcon.
I would quarrel with the noble Lord, Lord Mishcon, when he spends a great deal of time, and lays much emphasis, on the report of the Standing Commission on Human Rights. I am not very sure how much experience the distinguished personages who serve on that commission have of the problems of dealing with terrorism. I rather suspect that they are, from that point of view, inhabitants of an ivory tower. The brutal realities of terrorism—Irish and international—with which we have to cope today are a new factor of recent years in the whole situation of the Western World. It is not possible to adhere to some of the old high principles of the past in the face of the kind of attacks to which we are subjected at the moment.
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The noble Lord will recall the old tag, inter arma silent leges—and it must be the case that the highest and most liberal of principles need to be examined very critically, and perhaps their operation suspended, when society is faced with the kind of situation with which our society has been faced. We seek to renew this order at the end of a most ghastly year. I will not describe the many incidents because other noble Lords have already done so. But within a matter of months of the attempt to destroy the British Government at Brighton—a brutal, calculated attempt (as the noble Lord opposite said) to destroy democratic government—is it not inconceivable that your Lordships should decide to abandon any of the limited restrictions on normal liberties involved in the order?
It is utterly unrealistic to believe that we can cope with that kind of subtle onslaught under the normal principles of English law by which we are bound. It is necessary to take some exceptional powers. But in looking at these powers, my noble friend, Lord Elton, might well say, with Warren Hastings, "I am astonied at my own moderation". There are very few countries in the world who, faced with a similar situation, would be so moderate or restrained. Can noble Lords envisage what would happen in the Soviet Union if an attempt had been made to assassinate the Presidium and if bomb attacks had been made on every outside activity thought to be vulnerable? There would not be very much careful weighing of the extent to which liberties might have to be suspended. There would have been action far more downright than this.
I am not suggesting that we should in this respect, or in any other, seek to emulate the Soviet Union—but it is significant that we in this country, faced with such a situation, should still be worrying ourselves quite a bit about such moderate and modest restrictions. Let us take the exclusion orders. Great play was made by the noble Lord, Lord Mishcon, of the fact that only three have been made under the Act. Whatever else that shows, it certainly would seem to show that the power to make those orders had not been abused. It has been exercised with great moderation. However, that is not necessarily an argument for giving away the power. It may indeed have some deterrent effect. It is certainly causing—if any hardship or unfairness—only hardship and unfairness on a minimal scale. In so far as it has been so moderately used, that would appear to be an argument equally susceptible to the view that it had been exercised with the kind of moderation that one would expect of our authorities in this country.
We are faced with an order for renewal of the whole of the temporary provisions of this measure. It seems difficult to see how, faced by the situation with which we are faced—by the horrors that have been and the horrors that may well be to come—any responsible legislature could do other than say at least for another year that it must be continued and continued in full.
7.21 p.m.
Lord Monkswell: My Lords, I have read with interest the debates that your Lordships had in this Chamber on the subject of the Bill, as it was then, during its passage through the House last year. I have also read—admittedly only in the past hour or so—the report by Sir Cyril. I have not as yet, because I heard about it only a few moments ago, had the ability to

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read the report of the Standing Commission on Human Rights in Northern Ireland. If I take, as I do, the quotes which the noble Lord, Lord Mishcon, gave in regard to that report, I find it very disturbing that we do not have it in front of us today, or—should I say?—that we have not had it made available to us in due time to consider it with our deliberations today.
I must also bring to my deliberations on this subject my experience of the world about us. As your Lordships may be aware, outside this hallowed Chamber I am an ordinary citizen. I have an ordinary job. I mix with, one might say, normal people. I have none of the trappings of wealth or pomp and circumstance to set me apart from the community. I am glad. I meet and converse with a wide variety of people—English people, of course, and Scots, Welsh and Irish; Conservatives, Socialists and Liberals; authoritarians and civil libertarians.
I must advise your Lordships at this stage that from what I have read and heard from my community, I believe the Prevention of Terrorism (Temporary Provisions) Act 1984 to be a bad Act. I shall do everything in my power to oppose its continuance. I shall address myself to a few specific features of the Act and try to explain why I seek your Lordships' support in opposing it. It allows for the penalty of banishment without benefit of judicial procedure or right of appeal. It allows for detention without trial, or even charge, for seven days. It is discriminatory against Irish people, and I believe that it fosters terrorism.
Many centuries ago the barons of this land—one might say the natural antecedents—met at Runnymede, just a few miles up the river from here, and curtailed the absolute powers of the executive of that time. I believe that it would be a good thing if we did something similar today.
Such powers as imprisonment without trial and banishment were used by Germany, Italy and Spain during their Fascist periods in this century. But I suspect—and I am no legal authority; I am an engineer by profession—that even they were subject to judicial review, even though their judiciary may have been very much emasculated during those periods. Here I must remind your Lordships that the fight against Fascism did not begin in 1939 but started in the early 1930s; and that from 1945 until the death of Franco we had a Fascist regime in Spain, and a brief but devastating resurgence of Fascism in Greece during the period of the Colonels' Junta. I have a great aunt who was a citizen of Italy, who can testify about living as an exile from her country during the period of Fascism in Italy. It is interesting that her most prized possession of that period was a box which contained the wherewithal to make forged papers.
I hope that I shall not be misconstrued in my statements just now. I do not argue that we have descended to a Fascist regime in this country, but we must be aware that such powers as are contained in the Act in front of us take us part way down the very slippery slope towards such a state. We must be aware of perceptions as well as realities. That this Act is discriminatory against Irish people is a reality.
I am grateful to the noble and learned Lord, Lord Denning, for this contribution during the Committee stage of the Bill last year. At col. 892 of Hansard of
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23rd February 1984, he quoted the case of the Nazi parson liable to internment under regulation 18B in force during the great patriotic war. That was Hitler's war. With your Lordships' leave, I shall quote the noble and learned Lord:
"but we did put the case to him so that he could answer, put his views forward and we could understand and go through it. But we did put the case to him and we acted as much judicially as we possibly could, consistently with the security of the state".
I refer also, as reported further down the column, to the case of Mark Hosenball, when he was subject to deportation on the request of the CIA. The noble and learned Lord said:
"It is quite true that there was an inquiry, I think it was a tribunal".
That was how an Englishman and an American were treated, and yet 275 Irish people have been banished without any form of justification being offered or without having any judicial inquiry into their specific case.
While on the subject of advice from our noble and learned colleagues, I wonder whether I may raise two questions. I do not know whether it will be possible for the noble Lord, Lord Elton, or some other noble Lord in our Chamber, to answer these questions, but I pose them in the hope that answers may be forthcoming. Apart from the powers of the Secretary of State to deport aliens and those powers contained in the immigration Acts, when did banishment by the executive last occur? I suspect it was probably before the Middle Ages. Also when did banishment by due process of law last occur? I suspect that that was probably in the last century when deportation to Australia was still part of the criminal statutes. However, it might be interesting to have answers to those questions.
My final and most compelling reason for opposing this order tonight is that the Act is counter-productive. In some circles it is even hailed as the, "Promotion of Terrorism Act". May we consider for a moment the effect of the worst provisions of this Act? As has been quoted before, 275 people have been banished under either the terms of this Act or alternatively those of the predecessor Acts. Here I must make the point that we are not just discussing an Act that was passed in isolation last year.
Lord Elton: My Lords, would the noble Lord be good enough to give way?
Lord Monkswell: My Lords, may I just finish this point? We are talking about legislation which has been on the statute book continuously since 1974, under the heading of "Temporary Provisions".
Lord Elton: My Lords, if the noble Lord has finished with, what he is pleased to term "banishment", there is no point in this intervention. If he proposes to go on, I should like to point out that banishment is being sent away from your home and that is prevented from happening under the Act.
Lord Monkswell: My Lords, I am grateful for the intervention of the noble Lord, Lord Elton. However, I find this very curious. I am trying to understand how,

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if someone is excluded from the United Kingdom, that is not banishment from his home. Can people take their homes with them somehow?
Lord Elton: My Lords, I probably should not keep intervening. However, if the noble Lord reads the Act he will find that it applies to different parts of the United Kingdom and cannot be applied to the part in which a person lives.
Lord Monkswell: My Lords, I have read the Act. So far as I can gather, my understanding is that an exclusion order can be served on someone who, for example, lives in Birmingham, to make him go to Northern Ireland. Am I wrong?
Lord Elton: My Lords, that is wrong, yes.
Lord Monkswell: My Lords, then I am thankful for that intervention. I must admit I appear to be labouring under a misapprehension. The powers under these Acts appear not to apply to the Secretary of the State forcing someone to live where he does not wish to live. Is that the correct interpretation of the Act?
Lord Elton: My Lords, I do not think the rules of procedure allow me to conduct a sort of Committee stage exchange with the noble Lord. The facts are as I have given them. If I have anything to add, I will add it in my reply to this debate.
Lord Monkswell: My Lords, I am grateful to the noble Lord. I must admit that I appear to be labouring under a misapprehension. I apologise to the House if that is the case.
As I was saying, 275 people have been subject to detention without charge and trial and subject to exclusion orders. If we can make the assumption that each of those people will have on average two children, we are dealing with a situation where 550 children are affected. If the person subject to these powers is innocent of any involvement in terrorism, then I submit that he will be very aggrieved by these procedures and I should not blame them for beginning to listen to the propaganda promoted by the terrorists. If, on the other hand, he is inclined to terrorism, I suggest that being subject to these kinds of power would only reinforce his attitude to the British Government.
I have three small children. I do not want them, in 15 or 20 years' time, to be subjected to the kind of terrorism with which we are faced today on the basis that we have apparently caused injustice to people in the Irish community. I think we have a duty to people outside this House who seek to support human rights and the Prevention of Terrorism Act, to do what we can to demonstrate our belief in those principles and to argue it for them in this House, but, at the same time as arguing for them, to demonstrate our support by, if you like, going through the Lobbies. That is one of the reasons why I should have sought to divide the House this afternoon.
The noble Lord, Lord Mishcon, has introduced the fact that the report of the Standing Committee on Human Rights in Northern Ireland has not been
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available in time for this House to take it into consideration in its deliberations on this order in front of us tonight. In view of that, I trust that the Government will not push this order to a Division tonight, in the hope that, following the full availability of the necessary papers, a better consideration of the order can be given by your Lordships.
7.37 p.m.
Lord Nugent of Guildford: My Lords, my intervention will be very brief. I confess that I was drawn into taking part in the debate mainly because of my anxiety on the score of the official attitude of the Labour Opposition. That is not to say that I have any quarrel with the speech made by the noble Lord, Lord Mishcon, which, as my noble friend Lord Boyd-Carpenter has already said, was delivered with his customary skill and moderation.
Lord Boyd-Carpenter: Skill, anyhow.
Lord Nugent of Guildford: However, as the noble Lord well knows, in the other place the official Labour Opposition has stated that it intends to divide against the order. I feel that that is a most unfortunate thing to be happening on a measure of this kind, where, as the noble Lord, Lord Mishcon and others, have rightly said, we have to try to hold a delicate balance—and the noble Lord, Lord Mishcon, put it quite eloquently—between the liberty of the subject and the safety of life and limb of the community. In the event, he made a cogent point that we did not have the report of the human rights comission. That is a fair point. It would have been desirable. As my noble friend Lord Elton his already been told, it would also have been desirable if we had had the report of Sir Cyril a little earlier. However, it is a pretty simple report and even I could take it in in 48 hours.
I feel concerned that there should be this division between parties on something which I feel goes right to the heart of the safety of the whole community—both the safety and liberty of the subject and the safety of life and limb.
I would say this to the noble Lord, Lord Monkswell. The noble Lord has made a speech. He obviously feels very deeply about this and he has even had the benefit of a short seminar from my noble friend on the Front Bench about what the law is on the matter, from which I hope he will have benefited. However, his final comment was that he had three children who he was worried about preserving from the injustices this order might contain. The Government have a responsibility to be concerned about preserving those three children and the noble Lord, Lord Monkswell, from being destroyed altogether by one of these bombs. That is the reality that we live with today.
It is not of course just the bombings by Irish bombers. Unhappily today, as we see by the Libyan example, terrorism works on an international scale. Certain religious sects think nothing of suicide if they can achieve their end by destroying something that is a symbol of the society or of a nation they do not like. Goodness knows! we have seen this on an appalling scale in Lebanon over recent years. It occurs in other countries in the Middle East. And some of these

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people come here. We really have to defend the community against such things. As my noble friend rightly said, not only do we want to defend ourselves but also we do not want our country to become a battleground for others to come and fight out their quarrels.
These powers are directed to a very practical necessity. That is really the only point that I wish to make. Other noble Lords, especially the noble Lord, Lord Wigoder, have dealt ably and fairly with the issues mentioned in the admirable report by Sir Cyril. I should like to thank him. I have found the report most helpful. It gives us a clear picture of what is happening. As years go by, we shall get an even clearer picture. It is however fair to say that, at the end of it, we would feel justified—I certainly would—in supporting my noble friend and enabling him to get his order and to proceed with it for another year.
Exclusion is of course a desperately serious punishment to inflict on anyone. I agree with my noble friend, Lord Boyd-Carpenter, in saying thank goodness that there were only three. That is much to be welcomed. It is evidence of moderation as well as evidence of the fact that the day may perhaps come when we can get rid of this power altogether. All of us would be very glad. However, we certainly want at least another year before we consider shedding that powerful additional safeguard.
With those few remarks, I support my noble friend and express the most sincere wish that noble Lords opposite, with their wisdom and moderation, may be able to influence their right honourable and honourable friends in another place so that, for another year, we might collectively, on all sides, be able to support the measure and show that it has the support of the whole community.
7.43 p.m.
Lord Hylton: My Lords, in previous years, in common with other noble Lords, I have expressed concern about the impact of this Act on community relations. I hoped that this would have been a matter to which Sir Cyril Philips gave some attention. I hoped that he would consult not only organisations connected with community relations in Northern Ireland and the Irish associations in England but also organisations connected with refugees and with Commonwealth citizens. It is not clear from his introductory letter or from paragraph 2 of his Report that he has extended his consultations beyond what he calls officials and the police. However, that is not the main issue that I wish to examine.
I should like to turn to the relative inefficiency of the Act in so far as it concerns Britain. The noble Lord, Lord Mishcon, listed the major explosions that we have experienced in recent years. I can claim, I think, to have suffered from the Hyde Park and Regent's Park bombs in that they torpedoed a modest amendment that I was attempting to move in your Lordships' House that very afternoon. None of these explosions was prevented by the mere existence of the Act.
The Act, of its nature, must be something of a broad and blunt instrument. If the noble Lord, Lord Elton, can say in his reply that it is now being used with the
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precision of a stiletto, that will be extremely welcome. The fact, however, remains that no fewer than 5,905 people have been formally detained since 1974 under the Act and its predecessors. That is an average of about 600 people a year. But 87 per cent. of those people were subsequently released without charge. Only 5·6 per cent. of those detained were convicted of any offence after detention, and a mere 2·25 per cent. received a custodial sentence of more than one year. I am well aware that crude percentages of this kind are not entirely conclusive. Nevertheless, I feel that they are indicative.
I come to the question of port powers. One can well understand that the duties of police officers and customs and immigration personnel at the ports must, of their nature, be boring and difficult to interpret in a humane way. Nevertheless, I see a danger that people passing through the ports—shall we say?—dressed in jeans and with long hair, are the ones who are detained. They appear to conform to the stereotype of the revolutionary, while the bomber who is disguised in a three piece suit and is perhaps equipped with a rolled umbrella and briefcase, may so easily slip through. I should like to question just how effective these port powers are, given that there is, first, a very nearly open and very long border between the Republic of Ireland and Northern Ireland, and secondly, that there is somewhat open access to all the British coasts by fishing boats, yachts and other pleasure vessels not to speak of the possibilities of light aircraft making landings rather further inland.
Finally, I should like to re-emphasise a point made by the noble Lord, Lord Mishcon, and ask the Government whether they will consider and act on chapter 4 of the tenth report of the Standing Advisory Commission on Human Rights which was only published this morning. In particular, will they look most carefully at paragraph 40 concerning exclusion powers? Will these powers be allowed to lapse following the withdrawal of the previous derogation from the European Convention on Human Rights that took place last August? I have given notice to the noble Lord, Lord Elton, of the points that I have so far made. I should like to add another and to apologise to the noble Lord for not giving him notice of it. I refer to the impact of this Act and of the Police and Criminal Evidence Act on training of police forces. Will he ensure that adequate instruction is given so that powers are not exceeded and so that innocent persons whenever possible are not arrested or detained?
7.48 p.m.
Lord Harris of Greenwich: My Lords, I will begin by making a few comments on the last two speeches. The noble Lord, Lord Hylton, asked, at the beginning of his speech, why Sir Cyril Philips had not consulted a number of people before submitting his report to the Home Secretary. That may be a reasonable point—but of course subject to one rather important qualification. That is, as my noble friend Lord Wigoder pointed out, that Sir Cyril Philips was appointed in only December of last year. He has had six or seven weeks in which to write this report. In my view, he has done a notably successful job in producing such a high quality report in so limited a

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period of time. I hope very much that the noble Lord, Lord Elton, will be able to say why Sir Cyril was not appointed until December.
As to the speech of the noble Lord, Lord Nugent, with which I very much agreed, the noble Lord called for a spirit of bipartisanship on this measure. I very much agree. It is a great pity that in the House of Commons this has become a party issue. The Act was brought in by a Labour Government. And so was the exclusion power. This is a point which we should always keep at the forefront of our minds when discussing this question.
It is important to come now to what the noble Lord, Lord Monkswell, said in his interesting speech. I fear that I am not able to agree with the general thrust of his argument. It was introduced because of the very substantial loss of life that took place in the public-house bombings in Birmingham. The Home Secretary met his advisers the following Sunday. He produced the draft Bill to the Cabinet on Monday morning and it was put through Parliament in that week, going through all its stages in this House on the Thursday. On the Friday morning the powers were brought into operation at all ports and airports in this country. I think that says something for the spirit of bipartisanship we had at that time. I repeat that I hope very much we will stop this process of dividing the country along party lines on matters of this kind, which are so central to the security of every man, woman and child living in Britain.
The only other points I should like to make refer to the report of the Standing Commission on Human Rights in Northern Ireland. Unfortunately, I have not had an opportunity to study this report, but certainly I shall do so. Whatever it may have said on the exclusion order power, I think it is only right to remember that these matters have been investigated with great thoroughness, first by the noble Lord, Lord Shackleton, and then by the noble Earl, Lord Jellicoe, who went into this matter in infinitely more detail than the Standing Commission on Human Rights in Northern Ireland could possibly have done. If I may say so, on this point I agree with the general approach of the noble Lord, Lord Boyd-Carpenter.
I think it is quite clear that, without the powers which are contained in this Act, we would have to face the situation that a number of people who are now alive would be dead; it is as simple as that. I can speak as a Home Office Minister to whom these matters were referred when the 1974 Act first went on the statute book. I must tell the House quite bluntly that the evidence before us was quite overwhelming: that the people who were excluded were in fact involved in a conspiracy to create explosions, to make attacks in this country and to cause loss of life. The reason we had to use exclusion order powers—we should have preferred to use the criminal law—was that, although the evidence was unmistakable, some of this evidence came from sensitive sources which it would have been quite impossible to produce in an open court.
Even if the court hearings had been in camera, there would have been substantial problems, because there would have been a risk that some of the sources of information would have been revealed; and if those
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sources had been disclosed, those people would have been killed by the IRA. Again, it is as simple as that. That being so, it seems quite clear that these powers are necessary. Speaking for my noble friend Lord Wigoder and myself, and those on these Benches, I can say that if the noble Lord, Lord Monskwell, does divide the House—I hope very much that he does not—we shall certainly go into the Lobby in favour of the order.
Now I should like to come briefly to two other matters which, if I may, I shall describe as concerning non-IRA violence, non-IRA terrorism. First, there is the question of the Libyan students. As one of those who was extremely critical—and, I may say, remains critical—of the way in which we tolerated the establishment of the revolutionary embassy in St. James's Square, I welcome very much the fact that the Act has now been extended to deal with terrorism which has as its basis terrorism outside Northern Ireland. Certainly after the kind of evidence we heard yesterday at Manchester Crown Court about the threat which is represented in this country by Libyans trying to murder opponents of Colonel Gaddafi it seems to me self-evident that powers of the kind we have on the face of this Act are highly necessary.
Lastly, there is a question which I should like to put to the noble Lord. I am not asking him to give an answer tonight, because I have not given him notice, and he may well prefer to deal with it by correspondence. I refer to the general problem of terrorist violence in the European Community. This, as we know, has been growing at an alarming rate during the last 12 months. We have seen for the first time some co-ordination between the terrorist groups operating in France, in Germany, in Belgium and in Italy. As a result of an initiative by the last Labour Government, in 1975 the Government put to the European Council, meeting in Paris, a proposal that there should be regular meetings of European Ministers of the Interior to discuss problems facing police forces and security organisations within the EEC. I assume that these meetings have been continued, at both ministerial and official level, since then.
If I may say so, nothing has been clearer in recent weeks than the scale of the very dangerous threat to which we are now likely to be subjected through the increasing scale of terrorist violence on the mainland of Europe. All I would say to the noble Lord, Lord Elton, is that I hope very much that the initiative launched in December 1975 has been followed up with energy by the Government and that the important consultations between Community partners are continuing.
Having said that, as I have indicated, and as my noble friend Lord Wigoder has indicated, given the fact that this Act was put on the statute book in its present form only last year, in our opinion it would be far too early to consider any substantial amendment to it. Therefore, if by chance there is a Division tonight, we shall vote with the Government.
7.58 p.m.
Lord Fitt: My Lords, it had not been my intention to speak in this debate tonight. It is less than two years since my home was burnt in the city of Belfast, in

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Northern Ireland, and I had to take up residence in this country. With every day that passes I find that I see the troubles in Ireland with a completely new perspective. I never realised the pressures under which I was living in Northern Ireland until I had left. No longer is my home attacked by petrol bombs and by bricks and bottles, and no longer do I live under the threat of the IRA because I was opposed to each and every one of its actions.
As I say, I had not intended to take part in this debate, but I want to put something on record in regard to the introduction of the Prevention of Terrorism Act by the former Home Secretary, Roy Jenkins, in 1974, in the wake of the terrible bombings in Birmingham. It was emergency legislation. I was opposed to emergency legislation because I lived in Northern Ireland under the Special Powers Act. It was there before I was born and it has been there for all the years I have lived. I have never gone into the Lobby in support of emergency legislation, and certainly I shall not be going into the Lobby tonight.
The comments that have been made tonight by my noble friend Lord Monkswell bring me to my feet. His remarks were made with great intensity. He said that this Act seems to discriminate against Irish people. As I stand here tonight, I believe that I am the only Irish-born Member of this House present; I leave myself open to contradiction. There are other Irish people in this House, including two former Prime Ministers of Northern Ireland, and another person who at present represents it. My noble friend Lord Monkswell said that this Act seems to discriminate against Irish people. It does do so, and that is why I opposed it on so many occasions in another part of this building. However, I point out to my noble friend that it was Irish people—and I say this with a sickening feeling in my stomach, and with a great deal of regret—who were responsible for the terrible bombings (and I do not put them in any chronological order) in Birmingham and at Harrods, Chelsea Barracks, the Old Bailey and Hyde Park, for the murder of Airey Neave and for the bombs that were placed in the Tower of London—and even then I have given a very short list. There was the bomb which exploded on the bus just outside Manchester, and which killed a lot of young servicemen and their wives and children. For the incidents which I have not been able to remember tonight I apologise, because all those incidents left behind bereaved fathers and mothers, daughters and sons, wives and children.
The IRA, as was said recently in Belfast, are responsible for this Act being placed on the statute book. Everyone with a television at their disposal will have seen the events that took place over the weekend, and only today. Had I been determined to vote against the continuation of this legislation tonight, as I have done in the Commons over many years, I would have been prevented from doing so by recalling the events of last Sunday outside Armagh Cathedral, when a prison warder was brutally and callously murdered in front of his own two children. Only this afternoon a young policeman was murdered in Killyleagh. This Act is an attempt to isolate the people who are guilty of such terrible murders.
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I recognise that in legislation such as this the innocent will suffer. That is why I have always opposed this type of legislation. My noble friend Lord Mishcon has said that he is opposed to the exclusion orders which are part of this legislation. I have always opposed them as well, because it is my honest belief that people have been excluded from this country who have absolutely no involvement with terrorism. It is also my honest belief—and I hope to have an opportunity to raise it in this House—that people have been sentenced to terms of imprisonment in this country in the wake of the hysterical atmosphere created by a whole set of IRA terrorist circumstances. I express those reservations now.
However, I say to my noble friend Lord Monkswell that it is not easy to envisage all the consequences of this legislation. There are noble Lords on either side of this House who have a conscience about human rights. I refer immediately to the noble Lord, Lord Hylton. He is an Englishman who lives in England. He does not live in Belfast or in any other part of Northern Ireland where one listens to the news every hour and one listens to the sirens of the fire brigades and the bomb disposal squads. I say to my noble friends on this side of the House as well that one has to live in that atmosphere before one can be truly aware of the tragic situation which exists in Northern Ireland.
I can quite understand and fully sympathise with the sentiments expressed by my noble friend Lord Monkswell when he says that he is interested in human rights. I am interested in human rights as well. I do not need to have an NCCL brief sent to me. Some of the people on the National Council of Civil Liberties who draw up briefs to send to Members in the House of Commons and to my noble friends in this House are people who have never set foot in Northern Ireland, who have never heard an explosion or who have never seen the mangled remains of someone who has been killed. I am not going to accept a brief which has been sent to me by some of those organisations.
I refer again to my noble friend Lord Monkswell, who has said that he is interested in human rights. All those people to whom I have referred, including the policeman who was killed this afternoon, also had human rights. The warder who was killed coming from his Holy Mass on Sunday with his two little children also had human rights. All the people who have been murdered had human rights, and to my mind their human rights are far more paramount than the reading of a brief sent to me by someone who has never lived under such circumstances.
As I have said, it was not my intention to speak in this debate tonight. I have always opposed emergency legislation. However, the one thing which will keep me out of the "No" Lobby, irrespective of the sentiments expressed by my noble friend, is the fact that this evening there is an RUC man lying dead for committing no crime other than carrying out his duty. There is a warder who was buried only yesterday for doing exactly the same thing. I detest legislation such as this, but I detest even more the people who make it necessary.
8.7 p.m.
Lord Elton: My Lords, the importance of the subject with which we are dealing, and the deep emotional chord of personal experience which the noble Lord, Lord Fitt, has just struck, would make this a suitable occasion for the measured oratory of a prepared speech in reply. However, my duty is to reply as best I can to the questions and, if I may say so, to the charges which have been raised during the course of this debate, and I shall stitch them together out of the material which I have for that purpose.
I suppose I should begin with the point with which the noble Lord, Lord Mishcon, led after an introduction of great responsibility in which he pointed to the difficulty of balancing one issue against another and the prime concerns which we should have in striking that balance. Within the imcomparably thick velvet of his glove was the noble Lord's mailed fist when he reminded your Lordships of my undertaking to this House less than 12 months ago and suggested that I had in some way—he was kind enough to say it was not at my own choice—failed to honour it in full, or had at least been discourteous to the House. Others of your Lordships have reflected that view.
Let me start by telling your Lordships what it was that Sir Cyril Philips was appointed to do, and why it was intended that he should be appinted not at the beginning of the operation of this Act but late on in its operation, by quoting the exact words which I used in the undertaking that I gave on 8th March last year. I said:
"Without attempting to curtail his role, I shall describe what he would do and how he might do it. First, he would not be an appellate authority. It would not be his task to say that the extension of the detention of Mr. Smith was wrong but that of Mr. Jones was right. It would be his task to look at the use made of the powers under the Act. To consider, for example, whether he saw emerging any change in the pattern of their use which required to be drawn to the attention of Parliament. To enable him to see such a pattern"—
and I ask the noble Lord to pay particular attention to this sentence—
"and to contain his workload, we envisage that he should carry out his work in a concentrated period once a year to provide a snapshot of the use made of the powers". [Official Report, 8/3/84; col. 405.]
In that debate I undertook that we would hold the debate a month ahead of renewal. Your Lordships are aware that that leaves only 11 months of the Act to run before we have the debate. It was important that we should have the right man, and I am certain that we have him. Your Lordships only have to read his biography reference, if you have not met him to know that. We appointed him in December. Had he reported earlier, it would have been a report not on 11 months but on 10. Your Lordships are entitled to say that that is what you wanted; but it was not what I undertook to give you.
We have therefore had a very short time in which to present his report. It was received on the 15th February, which is Friday of last week, and my right honourable friend placed it in both Houses by Tuesday, having read it over the weekend, and he replied the following day. I greatly regret if your Lordships find that discourteous. It was certainly not intended to be so. I believe that the work done was properly done. I believe that to have started it sooner
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would have reduced its value, and to have received it sooner would not have been possible. Therefore, while I regret the shortage of time—and your Lordships might want us to play it a different way next time—it seems to me that I honoured both the letter and the spirit of the undertaking.
The second charge which the noble Lord, Lord Mishcon, courteously made against me was that there was completely inadequate time to consider the Tenth Annual Report of the Standing Advisory Committee on Human Rights for Northern Ireland. That report deals exclusively with Northern Ireland affairs. It covers a period of 12 months ending on 31st October last year. It is printed in a volume of 111 pages, of which rather fewer than two are devoted to the workings of the Act, which I am asking your Lordships to review. We do not control the date at which it is published because the Standing Committee is independent and its arrival today is a coincidence. I should have found it even more upsetting had it arrived tomorrow. The noble Lord, Lord Mishcon, is about to tell me that it was forwarded under a letter dated 7th December. That is perfectly true and this is also a document published by the Stationery Office in great detail, and I am told that that is the time that it takes to produce. I freely admit that I had given no thought to the availability of this document for this debate because so far as I can discover, it has never been referred to in earlier debates on previous legislation in this context. The fault is mine; but, on the other hand, it is two short pages and the most pungent parts have been ably quoted to your Lordships at dictation speed by the noble Lord, Lord Mishcon.
As I am on the subject of this report, the noble Lord, Lord Hylton, asked why various people were not consulted. I refer him to the very first paragraph of the report of Sir Cyril Philips. He says:
"For this purpose I have drawn on three main sources—the relevant statistics and some hundreds of official files of cases, and my personal consultations with police and officials concerned."
Those the noble Lord acknowledged.
"Secondly, consideration of the role of the Home Secretary and the Secretaries of State for Scotland and Northern Ireland; and, thirdly, the views of interested people and groups including those Members of Parliament who have approached me and the officers of the National Council for Civil Liberties and of the Cobden Trust who have been monitoring the operation of this Act."
I believe that he was remarkably thorough in the time available to him.
I revert to the report of the Standing Advisory Committee for a moment because it has been mentioned. There was a remark that there has been one exclusion order from Northern Ireland to Great Britain. My advice is that there were two exclusion orders from Northern Ireland, one in July and one in September, and both were exclusions from the whole of the United Kingdom. There were only three exclusion orders the other way round. Three exclusion orders were made despite the very small numbers in 1984, which we welcome. There remain some 240 extant exclusion orders. The Government would certainly not be happy for the subjects of many of those orders to be allowed to return while the present level of threat continues.

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Under the present Act all new orders have a limited life and orders under the earlier legislation are now due to expire in March 1987. We shall be reviewing each case carefully in the next two years, and I assure your Lordships that a fresh order will be made and exclusion maintained only where there are very cogent grounds to do so. As the noble Lord, Lord Wigoder, predicted, there have been no prosecutions under Section II of the Act. It is a section which is rarely used and it has been the subject of wide debate. I shall not dwell on this because I dwelt on it at length in Committee on the Bill, but may I say to your Lordships that we believe that its power is largely deterrent and that its existence on the statute book improves the supply of information.
The noble Lord, Lord Wigoder, asked specifically about tape recording. As my right honourable friend said in his letter to Sir Cyril, he will be deciding as soon as possible whether interviews with people detained under this Act should be included in the tape recording field trials. While it is clearly desirable that a person so detained should, so far as possible, enjoy the same safeguards as anyone else in police custody, there are a number of particular difficulties. For example, a copy of the tape made is given to the defence. There is provision for it to be edited to remove sensitive material, but even an edited tape would suggest the extent of a terrorist's co-operation with the police and lay him open to reprisals from his colleagues. There is a clear risk of deterring confessions and the giving of incriminating information.
On the figures for extensions of detention in a more refined form, I shall have to write to the noble Lord, Lord Wigoder, as I shall, if it proves proper for me to do so, on the subject of the destinations of those deported.
The noble Lord, Lord Monkswell, suggested that we were harassing the Irish. I can assure the noble Lord that, in spite of the roll of dishonour which the noble Lord, Lord Fitt, repeated in part a moment ago, there is no question of the Act being used to harass the Irish community in Great Britain. It is a measure designed to protect innocent people of all racial and religious groups from the activities of a minority who seek to promote political change through violence. I refer the noble Lord to what the noble Lord, Lord Fitt, said earlier.
The noble Lord, Lord Hylton, suggested that there was harassment of stereotypes, and the noble Lord drew a stereotype of a man in jeans and a ragged beard, suggesting that the intelligent terrorist would wear a bowler hat and a well-pressed suit. If the noble Lord had travelled on the shuttle as often as I have, he would have noticed that there is sartorial continuum among those who are detained by the police at all, who are as wise as he is to the tricks of the infidel. I instantly regret that word; it has a religious connotation. I mean the tricks of those who seek to do terrible things in this country.
The police controls at ports are necessary and they are necessarily selective. Those operating them are certainly well aware that terrorists are likely to adopt different forms of dress. I am saying in someone else's words what I said a moment ago in my own words and although they may be better, I shall spare your Lordships' repetition.
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The noble Lord, Lord Monkswell, asked why a person who is excluded does not have access to judicial review. Where the power of exclusion is used, much of the evidence against a person is such that it cannot be produced in court. The case may rely heavily upon sensitive intelligence which could easily be traced back to its source if it became known to the subject of the exclusion order or to his friends and associates. This would prejudice the source and even in extreme cases lead to the death of the informant. I ask the noble Lord, who reminded us about his children, to remember the children of those who might die as a result. Other police operations and the flow of information which leads to convictions in the courts might also be adversely affected.
Nonetheless, people subject to an exclusion order can make representations in accordance with the provisions of the Act. The function of the advisers is to protect the interests of the subject of an exclusion order by ensuring that any representations he makes are given an impartial second scrutiny following which my right honourable friend personally reconsiders the case.
The noble Lord, Lord Hylton, asked about the derogation which had been removed from the ECHR protocol. I note that the Standing Advisory Committee on Human Rights for Northern Ireland welcomed this decision. We do not believe that any changes are required in United Kingdom law as a result. The withdrawal of the derogations took account of the fact that legislation on internment and on detention without trial is no longer in force, and the view of the Government that remaining emergency powers are consistent with international law.
Your Lordships want to conclude this. Since others have been kind enough to quote my speech of 6th February 1984 I shall quote another part of it (col. 931):
"One of the paradoxes of democracy is that, in order to defend its essential components from those who seek to destroy them entirely, it is from time to time necessary to constrain some of those components themselves. Here there is a question of balance; for it is not much consolation to be free if, as a consequence, you are also dead".
That is the question of balance in your Lordships' hands. I hope that the noble Lord, Lord Monkswell, will not ask your Lordships to strike that balance, because I do not believe that it would be consonant with the normal way we conduct things. It is of course for him, but I ask your Lordships under no circumstances to deny to Her Majesty's Government and the security forces the powers which they need to protect your Lordships and your kindred from terrible things.
Lord Monkswell: My Lords, I thank the noble Lord, Lord Elton, for giving way at this point.
Lord Elton: I have not.
Lord Denham: My Lords, if the noble Lord, Lord Monkswell, wishes to intervene, there is a formula. He says, "Before the noble Lord sits down, will he answer the following question?".
Lord Monkswell: My Lords, before the noble Lord sits down, could he answer the following point? I should like to say to the House in passing that I apologise if any inconvenience and upsetting of the normal channels has been forthcoming. I make the point that I shall seek to pursue my case if the noble Lord gives me the answer that he would fail to withdraw the order.
Lord Denham: My Lords, this is getting to be a little more than a conventional intervention. Before my noble friend finally replies and then sits down, I think the noble Lord may not be aware that if he divides the House on an order without having given notice that he is going to do so he is breaching a convention which has never been breached before in this House. Personally, I would take it very hard if such a convention were breached.
It was agreed by all parties for this reason. Divisions on orders very seldom take place, and unless one knows that a Division is going to take place on an order the expression of the House will not be a true expression, because no noble Lord would have had the notice that there was going to be a Division on it. This agreement has been made between Leaders and Whips of all parties, and indeed between the Cross-Benches, and this is a convention which has never been broken. I have received no notice from the party opposite, or indeed from the noble Lord, Lord Monkswell, that a Division was going to take place. Therefore, if a Division were called I would regard that as a total breach of this convention, and a breach of trust.
Lord Mishcon: My Lords, before the Government Chief Whip sits down and before the noble Lord, Lord Elton, respectively sits down, may I be permitted to make the position of the official Opposition quite clear? We recognise the correctness of what the Government Chief Whip has just said. We would add to it, having had this intimation of a Division—which I still hope will not be called, and I ask my noble friend to listen to my words, if he would—that, as I understand it, the Government were good enough to honour their pledge by seeing that the debate on this order took place this afternoon. It is by sheer coincidence that the other place has not yet reached this on their Order Paper. It would again be contrary to our tradition if we were to vote against the democratically elected House on an order, and it is by sheer chance that we do not know what the decision of the elected Chamber is. For those two reasons the official Opposition would not wish to participate in any Division.
Lord Elton: My Lords, if I may rise from my noble friend's lap, as it were, I would welcome first the helpful intervention of the noble Lord, Lord Mishcon, on what is a very serious matter. I will secondly say to the noble Lord, Lord Monkswell, that if I did not by that speech convince him of the Government's determination to get these powers, I do not know how I ever shall.
8.26 p.m.
The Deputy Speaker (Lord Aylestone): My Lords, the Question is, That this Motion be agreed to?
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As many as are of that opinion will say, "Content"?… To the contrary, "Not-Content"? … I think the "Contents" have it.
Clear the Bar.
Tellers for the "Not-Contents" have not been appointed pursuant to Standing Order No. 51. A Division therefore cannot take place.
I declare that the "Contents" have it.
Motion agreed to.

London Regional Transport (Amendment) Bill
Brought from the Commons endorsed with the certificate of the Speaker that the Bill is a Money Bill; read a first time, and ordered to be printed.

Films Bill
8.30 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move, that this Bill be now read a second time.
Two months ago we were given the opportunity, by virtue of a short debate initiated by the noble Lord, Lord Lloyd of Hampstead, to discuss the White Paper on film policy which was published in July 1984. Much has happened since then. The Films Bill, which is based on the policy outlined in the White Paper, has completed its course in another place and is now before us for consideration.
The body which will succeed the National Film Finance Corporation has taken shape more clearly, and a copy of the heads of agreement between the proposed participants in the successor body and the Government has been laid in the Libraries of both Houses. There have also been significant events in the fortunes of the industry. Sadly, more cinemas have closed. On the other side, British films have had some major successes and are well represented in the recently-announced Oscar nominations. It is therefore against this background of changing fortunes within the industry that I should like your Lordships to consider the purpose of this Bill.
The key is the Eady levy; introduced in the middle of the century, it was seen as a means of redistributing money from the flourishing exhibition sector to the then weaker production sector. Similarly, the quota system introduced in 1927 had sought, albeit indirectly, to foster the production of British films, by ensuring that a specific proportion of films shown at cinemas had to be British. Both measures—the levy and the quota—required a whole raft of regulations and controls for their enforcement. At that time, with annual box office admissions running at a level of nearly 1,300 million in the early 1950s, it was thought that the exhibition sector was well capable of standing the strain imposed by these heavy administrative burdens.
Now the position is reversed. Cinemas are struggling to survive. Box office admissions slumped in 1983 to less than 70 million a year and at least 18 cinemas with a total of 36 screens have closed since the White Paper was published last summer. The amounts raised by the

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Eady levy have dwindled, and the portion going to British film makers (or their nominees) fell from £2.7 million in 1982–83 to a provisional figure of £1.6 million in 1983–84. On the other hand, the production industry is booming. Studios are full and British films are scoring major successes in both at home and abroad. The Oscar achievements of "Gandhi" and "Chariots of Fire" may well be repeated this year, since eleven Oscar nominations for "A Passage to India" and seven for "The Killing Fields" are indicative of the new areas and markets that are opening.
The House will be aware of the opportunities offered with the advent of cable and satellite broadcasting services. Less obviously, perhaps, the recent innovation of video to promote pop records has quickly established a sizeable new sector in the market. For the first time the British record industry's awards this year included a category for the best pop music video. As my noble friend Lord Mersey observed during our debate on the White Paper, we are now acknowledged as world leaders in this field. It is pleasing to be able to report that the award was won by a video made here in England at Shepperton Studios.
It is entirely right and sensible that if the fortunes of the different sectors within the film industry have changed, Government policy should be adapted to reflect that change. Accordingly, we have decided to sweep away the burden of registration, licensing and quota, and to abolish the Eady levy. Furthermore, in response to the Monopolies and Mergers Commission's report, the Government have announced plans to investigate the effects of relaxing the barring arrangements that many independent cinemas claim deprives them of fair access to profitable films. It would be optimistic to think that these actions could bring back the huge cinema audiences of the 1950s, but the Bill will provide some relief to the hard-pressed exhibition sector.
Before deciding to abolish the Eady levy, we considered how this would affect the production sector and the specific bodies which had benefited from the proceeds of the levy. The immediate beneficiary of the levy has been the National Film Finance Corporation. This is financed by an annual grant of £1·5 million from this source. The NFFC is generally recognised as having performed well in its aim of assisting the development of the production sector by part-funding low- or modest-budget British films. By providing crucial "up-front money" it has helped over the years to produce such classics as "Genevieve" and "The Third Man", and, more recently, films such as "Gregory's Girl" and "Another Country". We have decided that this work should continue, but with two significant changes.
First, the NFFC will be dissolved and replaced by the British Screen Finance Consortium, a private sector partnership financed between private and public sector monies. We believe that this will help to improve the commercial edge of the investment decisions. We believe that it will enable those directly involved in the industry to play a greater part in helping to develop new talent. The partners in the consortium will be Channel Four Television, Rank, Thorn EMI, and members of the British Videogram Association.
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A copy of the heads of agreement between the prospective partners and the Government has been placed in the Library. The House will appreciate that this document takes account of a number of points raised during our earlier discussions and in another place. It provides significant safeguards regarding the use to which the Government's financial contribution may be put.
Secondly whereas the NFFC's annual external funding since 1981 was £1·5 million, the new body will have available twice that amount: £1·1 million from the participants, and, for five years, a contribution of £1·5 million from the Government, and additionally £0·5 million from the Government for the management of the project development scheme and the production of short films.
There is one fundamental aspect in which we do not expect the NFFC's tradition to change; namely, the type of film that will be supported. The NFFC's role has always been to support British films aimed at the commercial market, but it has also focused on assisting new and rising talent in the industry. Another important part of the production industry is the non-commercial film-making sector, for which the Government provide substantial support through the various grants made by my noble friend Lord Gowrie from the budget of the Office of Arts and Libraries. But the function of the NFFC and, in the future, of the new consortium is concerned with commercial filmmaking and with the one important part of that sector where we believe there is at least initially a case for special subsidy; namely, low- and modest-budget British films, including "shorts", especially those made by new talent, and of course the project development to which I have referred.
Besides the National Film Finance Corporation, the Eady levy also provided an element of funding for the National Film and Television School, and for the British Film Institute (BFI) Production Board. We have considered the needs of these bodies, and have made arrangements whereby the school will receive £600,000 annually for five years (more than it has received in the past from the Eady levy) from the BBC, the independent television companies and the cinemas. In addition, the Government have already undertaken to make a special grant to the school of a quarter of a million pounds to improve its television facility. As regards the BFI Production Board, we have endorsed the recommendation of the Cinematograph Films Council that in this final year of the levy the board should receive a sum from the levy equivalent to three times the grant it would have expected.
That is the background to this Bill and what it seeks to achieve. I should like now to outline briefly two of the most important clauses. I do not intend to weary the House by going through every part of the Bill in detail, particularly as many of the clauses are clearly described in the explanatory and financial memorandum, but I wish to offer a short explantion of the major features.
Clause 3 of the Bill deals with the NFFC. It enables the Secretary of State, with the approval of the Treasury, to dissolve the NFFC at any time after the Eady levy is terminated. It provides that upon dissolution any of the corporation's property or rights

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may be vested in the Secretary of State, who shall deal with them in such manner as he thinks fit for any purpose connected with the British film industry. It further provides that such rights may be transferred to a British company or partnership on condition that it uses its best endeavours to encourage the production of British films on a commercially successful basis. Thus, this condition will apply to the transfer of the NFFC's portfolio of rights and interests in films, estimated to have a total value of about £600,000 a year, to the British Screen Finance Consortium.
Clause 3 also provides that if upon dissolution of the NFFC any of the corporation's liabilities are vested in the Secretary of State, they may be transferred on agreed terms to the NFFC's successor. The purpose of this provision is to enable forward commitments to film producers made by the NFFC to be taken on by the BSFC, together with enough cash from the NFFC's assets to meet those commitments. It is our intention that any assets remaining after the NFFC has been dissolved, and after provision has been made for meeting liabilities, should be transferred to the British Film Fund Agency for distribution to eligible British film makers. Finally, Clause 3 empowers the Secretary of State by order to repeal the National Film Finance Corporation Act 1981 when the NFFC has been dissolved.
Clause 5 is particularly important. It enables the Secretrary of State to give financial assistance to the successor to the NFFC. This will take two forms. First, there is the provision of £1.5 million annually for five years for co-financing the production of British films; and, secondly, £500,000 annually for five years will be provided for project development work and for the production of short films. The House may be aware—as certainly will be those noble Lords involved in the film industry—that the provision in respect of "shorts" was inserted recently by the Government, in recognition of the valuable role of shorts in enabling new producers to "cut their teeth" on a modest project and the need to replace the stimulus provided by the Eady levy to the production of shorts. This clause therefore sets the framework within which public finance for the production of low-budget commerical films will operate.
I do not pretend for a moment that this Bill will solve all the film industry's problems, or bring audiences flocking back to the cinema. There are no magic remedies here. However, I believe that the Bill is based on a realistic assessment of the problems and that it offers a most sensible way forward. It is universally recognised that the Eady levy is an anachronistic burden on a struggling sector of industry. The Government are committed to abolishing it at the earliest possible date and the Bill makes this possible.
We could have stopped at that, simply leaving the beneficiaries of the levy—and particularly the NFFC—to collapse or to find alternative funding elsewhere. We have not, as has been suggested, walked away from the problems. We have sought an opportunity to continue the work and tradition of the NFFC, and have made arrangements to expand its funding and to enhance its commercial edge by placing it in the private sector. We have made arrangements
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for the funding of other bodies dependent on the levy for part of their income. This Bill is based on a careful appraisal of the needs of the commercial film industry and provides the framework within which the industry can operate to advantage in the future. I commend it to the House.
Moved, That the Bill be now read a second time.—(Lord Lucas of Chilworth.)
8.47 p.m.
Lord McIntosh of Haringey: My Lords, there are a number of things in the early part of the noble Lord's speech with which I think all Members of your Lordships' House will agree—his tribute to the recent achievements of the British film industry in world markets and world esteem, and his hopes for the success of British films in this year's Oscars. We all share those hopes. I fear, however, that our welcome for this Bill goes no further than that.
There are many aspects of this Bill with which we are profoundly unhappy and which we believe show a failure not so much of analysis of the past—for with much of that we agree—but of constructive analysis and prescriptions for the future. I shall not attempt to summarise in the time I have available anything more than the bare bones of film policy over the period since 1927, when I suppose we may say a Government film policy started in this country. The three major elements of it have been the quota set up by the 1927 Act and allowed to fall into disuse in 1983; the Eady levy, to which the noble Lord has referred at some length; and the National Film Finance Corporation, together with the various elements of arts funding which was also referred to.
The only point that I want to make about that combination of measures is that they were all carried out in the context of the film industry being a private-sector industry, a commercial industry. There has never been any suggestion, certainly not from this side of the House, that there should be anything other than a commercial film industry. We believe that the need for flexibility, the need for innovation, the need for risk taking make this one area where commercial interests, suitably safeguarded—and I make that point very seriously—make it low on the list of candidates for nationalisation. Perhaps. I may put it that way.
There have been public sector film industries of great success. I think of UFA in Germany in the 1920s, for example, but that is not to say that there are not countries and times when the public sector film industry can be of great importance. I think also of the National Film Board of Canada and I have no doubt that there are other examples which will occur to noble Lords who are more experienced in the industry than I am. But it is the point that there must be suitable safeguards to a commercial film industry, and it is that view which is paramount in our objections to this Bill.
The major happening over the last 20 or 30 years which has transformed the film industry is well known to us all: it is the advent of television and the fact that the television audience for "moving pictures", if I may use the old-fashioned term which describes both, is 20 times the audience in the cinema. I will not go over the other effects which that has in terms of the sources of possible financial support for the industry, but will

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only repeat the wise words of my honourable friend Mrs. Dunwoody in another place when she said that we were talking here not so much about the film industry as about the production industry serving both film and television and also, of course, potentially serving cable and direct broadcasting by satellite. We have to think of the production industry, with which we are most concerned, in the context of television as well as in the context of film.
I turn now to the National Film Finance Corporation, which is to be abolished and replaced by the British Screen Finance Consortium. I am grateful to the noble Lord for the information, which I did not have before, that the heads of agreement are in the Library; and I shall certainly study them in great detail. But, of course, the point about those heads of agreement is that they are not in statute and they could be changed at any time. Consistently during Committee stage in another place it was pointed out to the Minister by his own Back-Benchers among others that the British Screen Finance Consortium is not independent: it consists of Channel 4, two of the major distributors and the British Videogram Association. I am not accusing them of malice of any kind: far be it for me to do so, certainly when they are contributing this money. But it is not independent of the interests of the production side or of the audience in order to represent the interests of the production side and the audience for films and for television.
The safeguards, as I have said, are not enshrined in statute, and we shall attempt in Committee, and as the Bill goes through this House, to see that they become statutory. There is no assurance of either the creative or the financial freedom for this consortium which we should like to see. There is no adequate recognition in statute of the responsibilities which go along with the fact that this consortium is taking over public assets. After all, we are talking about an annual income from the portfolios of some 750 films which have already been financed in this way. Above all, there is no continuity and there is no assurance of continuity after a finite period of years for which promises have been made. We on this side of the House will seek to see to it that there is an authority which achieves the objectives which may well be set out in the heads of agreement. We shall also seek to remove the provision in Clause 3 which says that the conditions for this British Screen Finance Consortium are such conditions (I quote)
"as [the Secretary of State] thinks fit".
But, above all, the issue about the replacement for the National Film Finance Corporation is that it does not have enough money. The noble Lord and his right honourable and honourable friends have made comparisons with Eady money now. Of course, that is very easy to do. It is a fact that the proceeds of the Eady levy have declined consistently—that is shown very clearly in the graph at the back of the White Paper—but that does not mean that the level reached in the last few years is an adequate level for the support of the British film industry. For example, if we look at the period from 1958 to 1966, the Eady levy was producing something like £18 million a year at 1984 prices. That is a level which not only seems reasonable in the sense that at that time it was producing a successful film industry, but it is also a level—and
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this ought to be most important to this Government—at which there might be a serious chance of getting consistent City funding for the film industry. But we ought to be thinking about the gearing of financial support for the film industry rather than the penny-pinching, cheeseparing comparisons with the totally inadequate 1984 level.
It is also true that, apart from the money provided by Channel 4 for productions and promised for the rest of its first five years, the support from the television contractors has been minimal. Yes, they have been buying films, but they have been buying films at a fraction (so small a fraction that it is insignificant) of the original cost of production and at nothing like the level of financial support that might be thought to be necessary, even if you take the analogy of printing run-on costs. These are derisory amounts—something like £6,000 to £7,000 an hour, when the production costs of new drama for television is more in the region of £80,000 an hour. So we on this side of the House will support whatever amendments are put forward to provide for a levy which will replace the Eady levy, not at the level it is now but at the level it was at the time when it was most effective.
I do not have any particular decision at the moment as to the basis on which that levy should be. I think that needs a great deal more discussion. I confess that I am prejudiced at the moment in favour of the amendment moved successfully by Mr. John Gorst; namely, that the levy should be based on the size of the television audience which views the films. But something of that sort will have to be introduced into this Bill if it is going to provide anything like adequate support for British film production. Then there is also the possibility, not of blank video and audio cassettes, which were referred to in this week's Green Paper, but of a levy on pre-recorded cassettes, which is a matter of justice as well as of prudent financial provision.
Then we come to the question of fiscal incentives, and I would remind your Lordships that it was only in 1983 that the Government gave an assurance of five years' continuity for the fiscal incentives for film production which had been introduced in 1979. It took only 12 months for them to go back completely on that and to return virtually to the position where films are treated as plant and machinery. As my noble friend Lord Willis said in the debate just before Christmas, which I unfortunately missed because I was in hospital, films are not produced by plant and machinery. Films are not produced like sausages, where you have a successful product and it goes on selling. Once you have produced a film you sell it once and perhaps you have some international and television sales, but then you have to start again with the next item of investment. To treat it as plant and machinery (even if there were further provisions, as I understand there may be, for writing off on current account as income accrues, or for what is called cost recovery, which I do not fully understand) is simply not adequate.
There is no reason why the film industry should not follow, in terms of fiscal incentives, the analogy of the oil industry, where exploration and drilling are still permitted to be a special case and to have 100 per cent. capital allowances. Here, perhaps, I may say very briefly that it is an absurdity to think that the Business

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Expansion Scheme is going to fill the gap. It is not only a matter of the maximum amount that is possible from any single investor. One might think, looking at "angels" in the London or Broadway theatre, that a consortium could be made up with a number of people contributing £40,000 a time, although the amounts involved in film are much greater than they are in theatre. But it is the lack of continuity of production companies which is going to be the death blow of any attempt to have the Business Expansion Scheme fulfil the role which the Government seem to think it will.
Then there is the question of training. There have indeed been some indications of continuing support for the National Film and Television School. The noble Lord, Lord Lucas, has just referred to a figure of £600,000 per annum for five years, and I welcome that. It was referred to by a Government spokesman in another place as being a dowry; and one of my honourable friends said that it was more like an alimony. I deny the analogy. An alimony continues. The only true analogy is the death benefit. That provides once for current expenses and then it is no more. If you compare the provision for training in this country of £600,000 a year for the National Film and Television School, with the kind of provision which is made in, for example, France where £22 million a year is made available for training, marketing and promotion, you can see that this is not exactly generous treatment.
It is necessary to say very briefly, because a number of times the noble Lord used the phrase "British film", that according to the schedule we are not talking about British films at all. In paragraph 4 there is a definition, which is completely acceptable to the European Community, that "British"' means a member of one of the member states of the Community. In other words, a German film produced in Italy with French money could qualify as a British film. I accept that there are some safeguards in paragraph 5(3) of the schedule, which refer to the amount of work taking place in the country. But the point here, surely, is that no other country in the Community has knuckled under to the European Commission in the way that we have done. They all keep what we would normally understand as being a reasonable definition of a national film industry, and they have all kept to themselves the right to provide para-fiscal help to their own film industries—that right which we have so nobly denied ourselves.
It all comes down to whether we are talking about film as a culture or as a business. I think that we have to do both and the Government are failing on both accounts. They are connected. The external earnings of the British film industry last year were of the order of £93 million and the spin-off from that, in terms of the prominence given to our culture, and the opportunities given to us to provide exports of manufactured goods and services and to attract tourism, are very great indeed—in fact, incalculable. So even taking it purely in business terms, we have an asset here whch it would be criminal to endanger, let alone to throw away.
The noble Lord referred to there being no magic remedies for the film industry, as if he were repeating
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the famous phrase of his right honourable friend the Prime Minister: "There is no alternative". I think we shall be able to show the House and the Committee in due course that there are many alternatives to the solutions proposed by the Government. There are many alternatives which have been successfully adopted by other countries which have a keener appreciation of the cultural and business benefits of a flourishing film industry.
With notable exceptions, we are not too surprised if there is a failure to understand the cultural need for a film industry or the role of film in our national culture. That does not surprise us too much when we have seen the level of grants being given to the Arts Council. What really offends me is the lack of business judgment shown by this Government in the way in which they have simply—to use the noble Lord's own phrase, which he then denied—walked away from the real problems of the film industry.
9.4. p.m.
The Earl of Winchilsea and Nottingham: My Lords, at this stage of the Bill, I should like to direct my remarks to possible fund-raising methods in addition to those proposed by the Government, which could quite easily be employed to assist the funding of British films. In 1984, there were over 4 billion individual viewings of films transmitted by all four television channels. This staggering figure is based on reasonably accurate rating mechanisms that are used by television companies to work out the number of viewers watching a particular programme.
The showing of a feature film, even a first-run feature film, on television is probably the cheapest way available to a programme planner of filling in 90 to 120 minutes of television transmission time. It is also probably the most popular type of programme. The price paid by TV companies for the screening rights for films works out on average at about £63,000 per film for first-run films. This figure dramatically declines to between £6,000 and £7,000 if old, already shown-on-TV films are included in the general package of films and filmed series negotiated for. When the vast audiences for films on television are taken into account, plus the very high costs involved in the production of even a low budget feature film, it can be fairly said that television is not paying a fair price for the high quality product it is getting and large profits are made from films shown on television.
Furthermore, television is constantly drawing on a rapidly depleting library of films. In 1984 alone, there were about 1,584 films shown on all TV channels. The buying of films for television is done by only two men—one for the BBC and one for the ITV companies. This rather cosy cartel normally operates on a gentleman's agreement, which effectively keeps down to artificially low levels the prices paid to film companies. This agreement occasionally goes up in smoke, as we saw recently involving the American film series "Dallas".
So what can be done to ensure that fair prices are paid? Several suggestions have been put forward. One is based on the rating mechanism already mentioned, whereby a charge of 0·25 pence per viewer of film on television would be made, payable by both the BBC

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and ITV, and paid annually into a central fund which could then be distributed to the film industry. This could have the effect of increasing the TV licence fee, but only by, it is estimated, 28 pence and it would account for less than 1 per cent. of the ITV companies' total expenditure on programmes. Another suggestion is the imposition of a 10 per cent. levy applied to the total film budgets of all four TV channels, which amount to £100 million annually. This would also produce the same amount as the first suggestion; namely, around £10 million. Of course it could be argued that the introduction of such a levy would result in fewer feature films being shown on TV. Since broadcasters pay much less for bought-in material, including feature films, than they do for in-house productions, the effect on broadcasters' use of feature films is, despite their protestations, unlikely to be considerable.
But the TV companies are by no means the only source of possible support that could be available to the domestic film industry. The incentive which was removed in the Finance Act 1984 was responsible for attracting City investment, without which it would be extremely doubtful whether the great film successes of recent years which have already been mentioned—"Gandhi" and "Chariots of Fire"—would ever have been made. They earn for us as a nation not only large amounts of currency, both overseas and domestic, but also enormous international prestige and goodwill, to which the noble Lord has already referred—by-products which cannot be calculated, such is their value.
The Government's Green Paper on recording and rental of audio and video copyright material, published the day before yesterday, is to be welcomed. It is long overdue. Many people have reservations about its content, myself included, but it is at last a step in the right direction. My main reservation is the proposed upper limit on the amount of royalty payment allowed. In both the audio and video cases, they are far too low and will not do much good to anybody by the time they are collected, administered and distributed.
Perhaps it would be appropriate at this time to remind your Lordships that without the film industry there would be no video industry and there would be no television industry. Both owe their existence to the film industry, and therefore it is only right and proper that both be required to support it more than they do at present. However, I am very glad that the Green Paper is at last with us and I note that 30th April has been set as the deadline for when suggestions will be acceptable for consideration.
In conclusion, with the impending advent of cable and DBS broadcasting, there will be an ever increasing demand for filmed material of all types to fill all those hours of programme planners' schedules. If there is not a ready, healthy, well financed and flourishing British film industry, turning out low, medium and even the occasional high cost feature film, as well as shorts and documentaries of every description, then inevitably we shall be the recipients of a vast flood of the most dreadful American rubbish imaginable. I for one find that prospect horrendous—a horror which I am sure is shared by all noble Lords present as well as those who are not here tonight.
9.11 p.m.
Lord Lloyd of Hampstead: My Lords, I regret that I must begin by offering your Lordships an apology, as I am afraid that it is impossible for me to remain until the end of this debate. The noble Lord the Minister began by pointing out that I was responsible for initiating an earlier debate, as recently as last December, on the White Paper on film policy, which is of course implemented in this Bill. Therefore I am anxious to avoid any unnecessary repetition of the various points which I endeavoured to emphasise at that time.
However, I think that there are certain points which need some amount of re-emphasis, and there are of course a number of fresh points which have subsequently arisen. One of the extraordinary features of the situation is that the Government, on their side, apparently view with a considerable measure of euphoria—though I notice that on this occasion the Minister presented perhaps a slightly more muted version of it than one finds in the White Paper—what they see, as the outcome of the Bill, whereas on the other side, the industry is universally condemning it and indicating its inadequacies.
We have the very recent example of Sir David Lean, one of our greatest film directors, fresh from his triumph of directing "A Passage to India" and the many Oscar nominations which it has already received, coming back to this country after many years and being reported as saying:
"Now the Government is making it even worse over here. The powers that be have never really been interested in films in England".
I am afraid that that kind of verdict is only too representative of the general approach taken by the industry.
I should like to concentrate my remarks on two areas; one is the area of production, and the other is training. So far as production is concerned, the prelude to this Bill, as we all know, was the abolition of capital allowances, which in itself was a crippling blow to the industry. Subsequently, the Bill is proposing to abolish the Eady fund and also the NFFC. So far as the Eady money is concerned, we are all agreed that its abolition was necessary because Eady had outlived its usefulness. The real question is this: what has been put in its place?
We know of the sad events which occurred in the other place regarding the proposal for a television levy. There was all-party support for it in Committee in another place and it was passed—but then it was rejected at Report stage. It seems that those few Members of Parliament on the Committee who really understood the problems of the industry were extinguished by the majority who neither knew, nor perhaps even cared, about the future of this great industry. Yet the arguments in favour of a television levy are extraordinarily simple.
There is on the one hand a great flourishing industry—the television industry—which has for years lived off the cinema at minimum cost. We know that there are more viewers of a cinema film shown on television in one day than there are admissions for a whole year to the cinema itself. Still the Government apparently cannot see that there ought to be some recognition of that fact, and some transfer of resources

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to that part of the film industry which provides so much material for television itself. The Government have preferred to heed the siren voices of the television lobby and at the same time to ignore the real needs of the film industry.
This is a great pity because I believe that the present Government genuinely wish to help the film industry. They appreciate to some degree the importance of that industry in the national culture. But it seems they are bemused by the vision of a free market which really does not exist. What exists is a cartel for the purchase of feature films for television, of which the film industry has been the victim.
It is a great failure on the part of television that it has neglected to realise the immense commercial sense in allowing money to be resiphoned into the film industry—which has played, plays now, and (one hopes) will continue to play, so vital a role in television's own existence and future. Both the television and the film industry need a steady supply of indigenous, medium-budget films. One has to take on board the point that by a "medium-budget film" one means these days a film which costs upwards of £1 million. One is not talking about blockbusters which cost from £15 million to £20 million but a production costing something in the order of £1 million to £2 million. Nevertheless, one is dealing with a pretty expensive product.
One knows—and this fact is frequently cited—that Channel 4, under the excellent aegis of Mr. Jeremy Isaacs, is doing a very good job in encouraging film making. I understand that Channel 4 are spending in the region of £8 million a year on films. But what must be borne in mind always is that those films are primarily for the television screen and not for the cinema.
If all this money is not to come from a television levy, then where is it to come from? The view generally accepted in the industry is that it needs a sum in the region of £10 million to £20 million a year to support the medium-budget film market. If there is not to be a levy on television, there remains at least the alternative of a levy on video tapes—both blank and prerecorded. I was most interested to read the Green Paper published yesterday, and was somewhat encouraged by the fact that it seems to be a good deal less negative than its predecessor.
I remember being responsible for opening a debate in your Lordships' House on the subject of that earlier Green Paper which was published in 1981; our debate was in 1982. I remarked, as indeed did many other speakers, on its negative approach towards the idea of a levy on tapes. Since then the Government have undoubtedly been doing some more thinking on the subject. What I found encouraging-and I hope that it will not be proved that I am reading too much into this—was what seemed to me a rather significant passage in the Green Paper which is to be found on page 9:
"It is far less clear for video than for audio what basis could be used to subdivide the levy proceeds among the main groups of beneficiaries and within each group. One possibility"—
and these are the words that I emphasise—
"might be for the film proceeds to be diverted to a central fund to be used in the film industry to support production".
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I certainly welcome that sentiment. Study of this matter has shown that, if one is to attempt to distribute the proceeds of a tape levy among all the possible individual copyright owners, it will prove to be a totally impracticable exercise.
The noble Lord the Minister is probably aware that the interim action committee, which is shortly to reemerge under the guise of the Screen Advisory Council, has been hard at work on this subject and is in the process of producing a working paper which endeavours to show how this problem can be dealt with in a thoroughly practical way—something for which the Government plead in this Green Paper. I should like to express the hope in that context that the Government will, having adumbrated that notion, pay serious heed to the constructive suggestions which I think will emerge both from that council, of which I have the honour to be a member, and, I think, from other sources which will show how this may afford an avenue for support for the film industry.
Then a word must be said about the so-called son of NFFC, now redesignated as the British Screen Finance Consortium. Many questions arise about that new structure. The main criticism is inevitably that it appears to be too commercially orientated. The Minister in the other place referred to the excellent prospect of carrying on the traditions of the NFFC, and that is apparently desired. But one cannot avoid some doubt as to whether the very special way in which the present NFFC has been able to perform its task by reason of its very independence can possibly be achieved in a body which is so commercially orientated.
I am delighted to hear that these draft heads of agreements are in the Library. I was not aware of that and I have not had an opportunity to study them. But I have been told by someone closely concerned in this matter that great care is being taken to ensure, for instance, the independence of the chief executive in the choice of projects. I certainly hope that that is so. But as the noble Lord, Lord McIntosh, pointed out just now, the real difficulty is to know quite what validity heads of agreement will have in a body of that sort. So much seems to be taken on trust.
We have the new notion of a limited partnership under the 1907 Act, which is a most unusual form of organisation. This Act has hardly ever been used. One wonders whether it may not create awkward problems. However, these are matters of detail on which I need not spend more time.
However, I should like to say a few words on the training aspect. From this point of view our attention is centred on the National Film and Television School. Naturally, I welcome the tributes that have been paid to that school. For instance, Mr. Lamont, in the other place, referred to the excellence of that school and its reputation for producing highly skilled film and television programme makers. Those of us connected with the school recognise that the Government's intentions here are perfectly sincere and that they are anxious to help the school and give it some measure of security—that is the phrase used by the Minister in another place. We certainly applaud their support of the financial policy, which has been the policy of the school from its beginning, that it should be a partner-

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ship between Government and industry, so that we should not have to look solely to public funds but that there should be support from the industry.
Nevertheless, a number of points arise as to whether the Government are adequately meeting these problems. I will only mention them very briefly because this is not the occasion to go into detail. The sum of £600,000 mentioned by the Minister, as he will know, has been explained by the school to be inadequate, to say the least, to cover the current costs of the school. I think this is a matter which is under consideration.
Moreover, the whole future of the school, so far as the industry's support is concerned, is being left to an extremely vague agreement to which the school itself is not a party. One has no way of knowing how this agreement may be enforced if there is any failure to comply with it or any change in personnel. Therefore, one is left with an uneasy feeling that one has a much less secure position than under the previous Eady position. Moreover, by the abolition of the Eady levy, the school has been deprived of the statutory backing that it was given in the Films Act of 1970, whereby the school was designated as a beneficiary of the British Film Fund—and that, of course, has put the school in quite a strong position in dealing with the industry because it has given it a legislative mechanism which gave the school access to the industry itself. The finances of the school have always been precarious. However, whereas one might have thought that this Bill would have been taken as an opportunity to render the school's financial future secure, I am afraid that it has in some ways added to that degree of insecurity.
I come to my conclusion. I say this with regret. It seems to me that this Government have failed—and it is a charge which could be levied against previous governments, too, but this evening I am only concerned with the Bill itself—to take proper account of the cultural significance of the film as a form of popular art of unique force and creative vitality and the immense contribution that film makes to the national culture. Secondly, the Government have failed to realise that that industry needs continuing support, as the whole history of European film has shown. However important the market forces may be—because we are dealing with a commercial product—those market forces alone do not suffice for the special position in which film necessarily develops.
Our apprehensions for the future overshadow to some considerable degree the more hopeful signs from which we can take comfort—the immense abundance of talent and the remarkable successes of recent British films. What we need to secure is that that abundance of talent remains within our own frontiers. There is a great danger that if we do not enable our film industry to develop fully, that talent will be weaned away to other lands and will not fructify our own resources which all of us, I think, agree, would be a very sad outcome.
9.30 p.m.
Viscount Mersey: My Lords, last December, I also took part in the debate initiated by the noble Lord, Lord Lloyd. I argued that the Government should not
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have any film policy, no controls, and that the film industry should be left to its own devices. However, in this Bill, we are principally concerned with the British feature film—quite a small part of the total amount of film exposed each year, yet the most important part. I agree that there should not be interference in feature film and certainly no restrictive control. I do, however, believe that the British feature film needs help and that such help should take the form of the new levy, or Gorst levy, that has already been mentioned.
Speaking from these Benches, I am of course heartily in favour of a free market economy. But, as stated already, such a thing does not exist where the British feature film is concerned. It faces not one duopoly but two: on the big screen, the duopoly of Rank and Thorn-EMI; and on the TV screen, the duopoly of the BBC and ITV. This means roughly that the British independent product cannot be shown anywhere. In the cinema the Rank, Thorn-EMI duopoly is American orientated. It is linked with Columbia, Warner, Fox, Universal, Paramount, MGM and Walt Disney. In that connection, I would pay a passing tribute to Mr. Clarence Nash, who did the official voice of Donald Duck for 50 years in seven languages and who died today.
You could perhaps say that the big screen is of minor importance because people are leaving the cinemas and going to the small screen. There is a catastrophic fall in audiences. On the television screens, with the BBC-ITV duopoly, I cannot see that DBS and cable have yet done anything to break the duopoly. The problem is one of in-house production. The television people say, "We don't want your product; we make our own". Jolly good they are, too. They include "Jewel in the Crown", "Brideshead Revisited", and so forth. "And" the television people might continue "if we need outside material, we can get it at only £5,000 an episode for 'Kojak', 'Quincy', 'Cagney and Lacey' from the United States of America." Therefore, they say, as stated by many noble Lords, "We will only take British feature films at the same sort of rate. Too bad if it costs £1 million to make".
I do not deny that this sorry state of affairs is to an extent the fault of the British film industry itself. In the mid-1950s, it rather turned up its nose at the infant television and developed separately. In America, quite the opposite happened. Film joined forces with TV. In America, they became allies; here, they became enemies. That is unfortunate, but it is history now.
Still worse, hostilities continue today. Mr. Brian Tesler who was chairman of the Independent Television Companies Association, gave evidence to the Committee on the Funding of the Arts in 1982 as follows:
"It is an arid and destructive attitude of the British film industry that the television industry owes it a living. If it were not for television, the British film industry would not exist at all".
But then, the noble Lord, Lord Lloyd of Hampstead, said to me, at tea only the other day, completely the opposite:
"If it was not for the film industry, the television industry would be dead".
The noble Earl, Lord Winchilsea, has just agreed with that. The noble Lord, Lord Lloyd of Hampstead, cited, quite rightly, the huge numbers of feature films

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that were shown on all television channels over the Christmas period. Certainly it is feature films that people most want to see on television. Video cassettes are mainly features, and the most successful and most expensive cable channels in the USA run features. The best that television can do "in house" may be brilliant, but it just is not as brilliant as the British feature. In the final analysis, the "Jewel in the Crown" is not as brilliant as "A Passage to India".
So the British feature does need help, but, I would suggest, not by way of capital allowance, as some noble Lords have suggested. Investment in films by people less interested in the medium than in tax relief can lead all too easily to a bad, expensive product. The Australian experience of 150 per cent. tax relief was not a happy one, and I wonder whether capital allowances in this country were even effective, because I cannot detect any rise in cinema attendances between 1979 and 1984.
Now we have the business expension scheme. But what I regard as better than either is voluntary sponsorship of feature by interested companies. I was heartened to read what my noble friend Lord Gowrie said in last Sunday's Observer, about business sponsorship of the arts. He wrote
"Over the past decade, corporate sponsorship of the arts has risen from a few hundred thousand pounds to £15 million. It is still rising".
Businesses sponsor arts more esoteric than film. Barclays Bank sponsored the art of mountaineering when it backed the British ascent of the south face of Everest. The Midland Bank sponsored an entire "Ring" cycle at Covent Garden. What would be wrong with a "Morgan Grenfell Film" instead of a "Warner Brothers Film"? Would it not be really rather suitable for Prudential Life Assurance to sponsor an Agatha Christie murder mystery?
Yet experience has shown that this does not work unless, to begin with, there is adequate money provided from a central fund. For business sponsorship to succeed it is essential that the proposed successor to the NFFC—the British Screen Finance Consortium, or BSFC—should back British film in a meaningful way, not with £3 million but with something much closer to £20 million, as the noble Lord, Lord McIntosh of Haringey, has said already. The source of the revenue must be a levy on all feature films shown on television screens, whether broadcast or on cassette.
The point about an increase in the BBC licence fee of only 30 pence has already been made. It is a little less than the cost of two first-class stamps; it really is peanuts. That would yield £10 million. The essential springboard for the British feature industry must be an adequately-funded central body. It is true that some people can extract realistic sums from television for their products—I think of Mr. "Cubby" Broccoli and his James Bond films; but the British film-maker, in particular the young, unknown film-maker, cannot. He is the chap who is forced to sell for £10,000 what it cost £1 million to make. But he could be the "Cubby" Broccoli, the David Puttman, or the John Schlesinger of the future. Obviously all famous film-makers started as promising youngsters; and in the past many of them were helped by the old NFFC,
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with meaningful sums. It is fair to say that without such funding there would not have been, for instance, "Tom Jones", "Gregory's Girl", "The Duellists", or "Bugsy Malone". Carol Reed might never have started his film career: no "Our Man in Havana", no "Fallen Idol", and, last but not least, no "Third Man". My noble friend Lord Lucas himself agreed with me on that point.
I wonder whether I may appeal to the Government on the grounds of patriotism. Can my noble friend Lord Lucas put his hand on his heart and say, "The culture of our country would have been just as great without 'The Third Man', 'Kind Hearts and Coronets', 'Bridge over the River Kwai' and 'Lawrence of Arabia'"? I believe that he cannot. None of those films would have been made had the directors not been launched on their careers by a film fund when they were young unknowns full of promise, but bad box office.
Since the good old days of the "Lavender Hill Mob" and "Passport to Pimlico" the British feature film has lost much of its identity. Only occasionally does it now resurface—as "Chariots of Fire" or "A Private Function". Surely those films are as important to our visual culture as John Piper's stained glass windows or even Turner's paintings. The Government have a patriotic duty to ensure the continued excellence of the British feature film, and they should do that by television levy.
9.41 p.m.
Lord Willis: My Lords, I am not a believer in astrology and I very seldom read my chart in the stars. However, this morning I did happen to glance at mine and it said something like this: "This is the perfect time to prove that you have a remarkable sense of the ridiculous about certain setbacks or losses. Also you are aware that a new and more advantageous agreement can be made". It is in that spirit that I approach this particular debate: I hope that a new and more advantageous Bill will arise out of your Lordships' discussions tonight and in Committee.
Much of the general ground has already been covered by the debate that the noble Lord, Lord Lloyd of Hampstead, initiated a few weeks ago. Therefore, like other noble Lords, I do not want to go over the ground again but simply to underline one or two basic points. The Bill as it stands is rather like the debates in your Lordships' House: good in parts. The Bill is particularly notable for its recognition of the importance of the British film industry. But in my view—and I support the other noble Lords who have said this—it falls lamentably short of translating the recognition of that importance into practical and realistic terms.
There seems to me to be two basic flaws in the Bill as it stands. First, it really does take insufficient account of the precarious position of British films—they live, as it were, on a knife-edge. As I said in the ealier debate, I have been a screen writer for almost 40 years and during that period I have seen our industry stagger from one crisis to another. I posed this question, and I pose it again because it is fundamental, Why, over the years, has it been possible for us to develop what is recognised as some of the finest talent

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in the world—directors, technicians, writers, and actors—yet we have been quite unable to build a stable film industry?
I do not want to repeat at length the answer which I gave to that question. But the truth is that the British film industry for the last 40 or 50 years has been, in the main, a virtual prisoner of Hollywood. I want to stress, as I did then, that I am not in any way anti-American and that I admire very much what products the great Hollywood dream factory gives us from time to time. However, the truth is that, in their own self-interest, the American film moguls have no wish to see a truly independent film industry in Britain. They know that that would represent unwelcome competition as regards the making of English language films. So for the past 60 years or more they have followed a policy of keeping British films out of their cinemas while flooding the British market with their own product. We have become a virtual colony.
Do not let the Government kid themselves about an odd "Ghandi" or "The Killing Fields" or the odd Oscar that might come to a British film. Most of the Oscar winners have not had full distribution in the States and will not get it; and those that have had it, rarely return a significant profit. There are too many middle men in the middle nibbling at the cake. There is no getting away from these facts. We have not been able to penetrate the American market and over the years we have failed in one attempt after another.
Over the years, in an attempt to give the British film industry a fighting chance, a number of measures have been introduced. We have had the Eady Fund, the British quota system, the National Film Finance Corporation, the British Film Institute and—until the last Budget—certain capital allowances. However, now, at a stroke, the Government are proposing to abolish these or to place some of them in private hands. Most of the measures and organisations which have helped British films to survive—if only precariously—are to go and not enough is being offered in their place. It is as if the Government were to tear down Westminster Bridge and replace it by chucking a couple of ropes over the river. That is what we are replacing these measures with.
I do not mourn the passing of the so-called Eady levy. A small fraction of it found its way to British producers and some was used to support organisations such as the Film School and the Film Development Fund. But the bulk of the money was paid to American film companies. Bond films, financed by American money, but made in our studios, sometimes took £¾· million out of the Eady Fund in a year. The Americans seized the opportunity to make films in our studios with our talent, and then described the films as British made for purposes of the Eady Fund; over the year millions of pounds was exported from the fund to America. It did some good, but it was an imperfect instrument and therefore I do not mourn its passing.
Apart from the abolition of the Eady Fund, I can see little logic and less sense in some of the other proposals. We shall of course go into greater detail in Committee. However, as some other noble Lords have said, it seems to me that the Government have signally failed to recognise the true nature of the film industry and its problems. You simply cannot apply ordinary
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commercial standards and criteria to film-making; much as we would like to, it is impossible. It is a high-risk investment and almost every film-making country, except Britain, recognises this fact. Many of them have devised special schemes of tax relief in order to attract private investment in films.
Here I must take issue with the noble Viscount, Lord Mersey, about Australia. It was the tax relief that gave the much needed boost to Australian film production. I was present at various meetings of investors called by film producers and I saw these investors actually produce their cheques to make the films possible. At that time they were given 150 per cent. relief; it has now gone down to 125 per cent., or 130 per cent. But those special tax relief systems really did give Australia the boost it needed. And that is a nation of only 14 million people, but it has developed an industry which, as all your Lordships will know, has won the respect and admiration of the world.
It is in this direction that I hope the Government may change course. Investment is the key. We need a a certain amount of money in the middle through the son of NFFC, as it is called, to promote training and so forth. We need much more than the Government are prepared to offer at the moment. But even that will not get the film industry on its feet. What we really need is some attractive form of investment for the City and other financiers which will give them the return. That is the only way we shall do it. If it costs £15 million or £20 million to make a "Gandhi"—and it took Sir Richard Attenborough 20 years to go round the world peddling "Gandhi" in order raise the money—I would not expect any Government to put up £20 million to make a movie; I would expect the Government to put up £20 million for training, film development and script development—in other words, the risk money at the very beginning. After that, if films are to be made, we must give business the incentives. Those incentives have been taken away and in so doing we have dealt the British film industry a mortal blow. Not all the measures in this Bill will save it.
The noble Earl, Lord Winchilsea and Nottingham, together with the noble Viscount, Lord Mersey, have argued that we should have a small levy each time the BBC and the ITV show a feature film. I am sorry to have to part company with them and perhaps with some of my noble friends on this issue, but I find little attraction in the idea of taking from Peter in order to pay Paul.
The ITV companies and the BBC already make substantial investments in British films. Indeed, it has been said tonight that without those investments very little would be done in the way of British film-making. Channel 4 alone will make almost 100 feature films by 1987 at a cost of about £100 million, and that will provide work for actors, writers, technicians, and so on. Whether those films are shown in the cinema or on television is quite immaterial, because the borderline between the two is closing all the time. The fact is that they are subsidising the making of films, and this is in addition to the other grants that they make to such organisations as the British Film Institute and the National Film School.
It has been argued that the BBC and ITV companies combine together unfairly in the purchase of films;

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that they keep the price artificially low. The films that are quoted when there is talk in those terms are the small films which have run their course; films which have had a fair lease of life or are not of the top quality. But they have had to pay, and they still have to pay, enormous sums for blockbusters. The BBC had to pay out millions to get the rights of "Gone with the Wind". You may say that they should not have done so, but they did; and to get the rights of any up-to-date film today you are in a sellers' market and you have to pay a very good price.
In any case, it can be argued: who sell the films to the BBC and the ITV companies? It is the producers. They sell them because they want to make money. I do not know whether the BBC and ITV companies combine in this way, but I hope they do. I certainly would not blame them if they did, if only because by doing so they help to curb the voracious appetites of the American producers. If the BBC and the ITV go to Hollywood to buy movies to show on our screens and compete against each other on the prices, it would be absolute madness. Therefore, I do not see any great sin in what they are doing.
No, my Lords, my strong feeling is that the answer lies not in some special fund, not by a new tax on television, but by tax concessions which will encourage the private investor to put up the large sums which are needed. I would certainly favour, and agree with the noble Earl. Lord Winchilsea and Nottingham, that there should be some kind of levy on recorded and pre-recorded cassettes, and even on blank cassettes, with the money being used to compensate film producers and to put money into a film production fund, but not only in that way. We have to remember that there is a queue of copyright owners, such as authors and others, musicians and so forth, all of whom would be entitled to some part of the money. I think that that would be a reasonable proposition, that one should have a levy on the tapes.
In addition, the Government must give greater support, rather like the French Government support their film industry, as has been said, to the tune of about £75 million each year. I would not expect that kind of sum: but if we could keep to the 1979 level of support which came from Eady and other sources, that would give us the start money, the risk money, which the industry needs. In comparision with that, what the Government offer in this Bill is really piffling.
The British film industry is not asking for the moon. We do not want any special favours. We want merely to be recognised as an important cultural and commercial arm of Britain. We want to be given a small part of the support which other Governments extend to their film producers. We need this to survive. We need this so that we shall not be swamped by overseas products, and so that the unique cultural nature of our best indigenous films may be maintained.
There are many good things in this Bill, but they do not go far enough; and, above all, the amount of central government funding is inadequate. Tax incentives for the main, big investors, and more money from central government, and you will have a film industry which will surprise the world.
9.54 p.m.
Lord Birkett: My Lords, so much has been said tonight, and so many good arguments put forward, and so much of it has been said in unison, that I shall try not to keep your Lordships long. I cannot let the debate go by without remarking on what a really desolate prospect this Bill raises. I am irresistibly reminded of somebody who, piece by piece, has taken apart a delicate and complex mechanism, and who finds himself without the skill or energy to put it back together again. From this Bill the film industry seems to me really to be in pieces.
Of course, we all recognise that a degree of bureaucracy will vanish with it, and we shall all be happy for that reason. We shall all be glad to see that the British Film Institute has been remembered and not forgotten, and that its good work will in some way continue. We are equally happy for that reason about the film school; but when it comes to the major central issue of the film industry as such, one can see little comfort at all. Indeed there is only one thing left to it. The CFC is to go, the Eady levy is to be abolished, the NFFC is to be abolished, a great rack of things are to disappear and in their place one looks for some kind of central system of support. Dozens of countries all over the world can provide examples. Unfortunately, all the examples are different. Every nation has invented its own complicated system of prizes, subsidies, returns of tax concessions and levies. There are 101 ways to do it. But every country that has a flourishing and a civilised film industry has done it.
We are faced with this new son of NFFC. I have been practising saying "BSFC" to see whether it came trippingly off the tongue—cannot say it does, more work yet and it might, but at the moment I cannot say that it flows easily. It certainly does not flow easily in the way of money because as everybody has pointed out (I will not weary your Lordships by repeating it yet again) £3 million per year spread over anything up to 10 films is not enough, particularly if one considers the suggestion that that funding represents between 25 and 30 per cent. of the fund of each film which automatically restricts each film to under £1 million. There is no reason why we cannot make, even in this day and age, a good film for under £1 million. But an awful lot of good films need more than £1 million. I think it is unduly restrictive to expect the industry to go forward on a £3 million per year 10-film programme. I simply do not believe it. Everybody has pointed out that more money is needed and most people in your Lordships' House tonight have pointed out that the best way—I know that there are exceptions as the noble Lord, Lord Willis, has just dissented from that—would seem to be a levy on televisions films.
I will not weary your Lordships by going on at length about the reasons for it because they have been advanced. However, perhaps I may be allowed to add something to what the noble Earl, Lord Winchilsea and Nottingham, said about the economics of films on television. He rightly said that at the lower end of the market a feature film will be bought for television for between £6,000 and £7,000, which is a very low figure. What is interesting is that the average price of an hour of drama made by and for television is about £100,000 on ITV, and slightly less on BBC. That is the average

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figure for an hour of entertainment. So one can see that the purchase of a feature film lasting an hour and a half for between £6,000 and £7,000 gives an extremely good deal. After all, you are getting drama. It is not a documentary, education or quiz show. Therefore what you are paying for your hour and what you ought to be paying for your hour are so far apart that I cannot believe that a levy, albeit a modest one, on films shown on TV would not be the ideal way of funding this new corporation to the tune which it surely needs.
As the noble Lord, Lord McIntosh said, there may be a dozen different ways of working out how one calculates that levy and on what basis. I am not an expert and will put forward absolutely no suggestion about it except that that seems to me to be the way to do it. At the moment what the Bill presents is not so much a support for a flourishing film industry as a requiem for it.
10 p.m.
Lord Briginshaw: My Lords, I must immediately join with my noble friend Lord Willis in saying that investment is the key to the whole problem. This Bill before your Lordships and this discussion on the Second Reading, taken together with positive representations from all sides of the film industry with unprecedented unanimity, are impressive beyond measure. The issues are closely argued in the most positive fashion; support is emphasised for the continuation of financial partnership between Government and the industry. It has been a cornerstone of the training policy of successive Governments via the National Film and Television School; but concern is expressed that the Government may not get the relationship properly worked out in order to maintain the educational independence of the school, to secure for it the proper level of funding, and to guarantee its future funding against the changes of ownership in the private sector.
We are aware that the school not only is responsible for training students in its full-time programme but also has the responsibility for the national short course training programme which, among other things, is helping to retrain a generation of free-lance film technicians to work with new generations of electronic technology. Without this retraining, the industry's efficiency and productivity will be seriously impaired. Since the film production workforce is largely self-employed, it is only through a national initiative that the required retraining can be provided. Any of the proposals for a redistribution levy which are being put forward or might be introduced must therefore reserve an adequate allocation for training and retraining.
As an industry there is concern that in the absence of such a levy the training provision will be seriously diminished and the industry will consequently be severely weakened. There is a lack of a cultural element, previously mentioned by noble Lords. It is believed that a fundamental omission from the Bill is an acknowledgement of film culture as a record of the changing face of society. This would be achieved through the proper funding of the British Film Institute Production Board, the workshops and the regional art associations. These three elements are now essential to innovation and development in British
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film. Film, just like theatre and music, must retain an arena for experiment close to but not part of the commercial cinema and separate from training in the narrow sense.
The Films Bill contains no provision, as I see it, for any of the foregoing. Unity in diversity, if I may say so, my Lords, is expressed with a reflection that we ought to get that culture. We should not underrate it in any circumstances because it is everywhere in our country. I am sure that the utilisation of this will be to our general advantage.
10.4 p.m.
Lord Auckland: My Lords, I hope that my noble friend the Minister and the House will forbear with me if, due to public transport being what it is and my not living in London, I have to leave before the debate concludes. I hope that that will not be necessary. Any Government which is faced in the mid-1980s with promoting a Films Bill is probably on a hiding to nothing because, whatever legislation is brought forward, somebody is going to be displeased.
Of course, in regard to this particular Bill the television lobby has been criticised, I think rightly. Mention has been made of the number of films shown on television over the Christmas period. I made a count and I think the figure was 85 films in four days. One has the ludicrous situation of two television channels, and sometimes three, showing films at the same time. I shudder to think what the outcome would be if we had cable television.
A number of noble Lords who have taken part in this debate work in the film industry in various capacities; I am not one of them. I speak as a consumer, though I must say, as I said in the recent debate on the White Paper which was initiated by the noble Lord, Lord Lloyd of Hampstead, that nowadays, since in my part of Surrey there are no cinemas in Epsom, Leatherhead, nor Dorking, I have to rely very much either on our local Thorndike Theatre, which occasionally shows films, or on seeing them on the television screen. I do not object to films being shown on the television screen, but I believe that this is an industry which needs more recognition than it sometimes gets.
Looking at this question from a financial point of view, one can quite see the dilemma which faces any Government at the present time. All Government departments are begging for more public finance—for the arts, social services, roads, overseas development and so on—and whichever Government happen to be in power they are faced with criticisms from some quarter if they disburse too much or too little public money. But our cinema industry has had a distinguished record and it is a sad commentary that there is, as I understand it, only one full-time film studio operating in this country at present. This is the Pinewood Studios, which has, I think, an entirely British team of technicians. It is a feature films studio, perhaps I should say—
Lord Willis: My Lords, will the noble Lord give way? Films are made at Elstree and Shepperton, and I think there is a studio still operating at Twickenham.
Lord Auckland: My Lords, I am grateful to the noble Lord, Lord Willis, for that information. I was of course talking about main feature films; but the noble Lord has much more experience of the film industry than I or indeed many other people in your Lordships' House. I in fact visited Pinewood Studios with two of my noble friends the other day, and I have been there on previous occasions, too. I think a tribute should be paid to the people who work in those studios, particularly the technicians, and those in the carpenters' shop and elsewhere. They are the people who are really the hub of the industry, and it would be a crying shame if the cinema industry were to deteriorate still further. What then would be the future of these people? To some extent, this Bill makes the best of a rather poor job. It does not completely decimate the industry but it seems to the layman like myself to pick about.
Mention has been made of private funding of the industry. This happens in the visual arts, particularly music. Symphony orchestras are funded partly by the Arts Council and partly by commercial concerns. If commercial concerns did not fund them, many would not survive, despite the fact that under the present Government, even though the funding of the arts may not be adequate, it is higher than at any other time. But of course one has to make allowances for inflation. So any government are faced with a dilemma as to how the film industry should be funded publicly as opposed to being funded by private consortia. What we have to avoid is any further drain of British talent leaving the cinema industry and going elsewhere. We shall have a Committee stage on this Bill when we can go into the more technical details. Inevitably, this debate has ranged far and wide over the film industry; but the Bill itself poses more questions than it tends to answer.
10.11 p.m.
Lord Graham of Edmonton: My Lords, for the purpose of this Bill, as I have done on previous film debates, I declare an interest in an association with the Association of Cinematograph, Television and Allied Technicians. The House could not be other than impressed by the breadth of experience that has been brought to this Second Reading of a very important Bill. The Minister must be aware that, regardless of the friendship that we might show towards him personally, the Bill itself is virtually friendless all around the House. That does not mean to say that we are unanimous in our feelings towards the different parts of the Bill. Members have said that there are parts of it that are good and parts of it that they do not like, while various noble Lords have indicated some changes which they would support and some which they would not. So noble Lords are certainly not unanimous about what they want. But I think the Minister can take it that it would not be an overstatement to say that there is a hostile reception to the Bill.
The Minister must understand that one of the achievements of the Government has been to bring together disparate interests in the film industry to a remarkable degree. The National Film and Television School, the Directors' Guild of Great Britain, the British Film and Television Producers' Association,
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the British Film Institute, the Association of Independent Producers and the Association of Cinematograph, Television and Allied Technicians have combined their common interest and concern for the future of the film industry. They do not have a fancy title. They have not decided to call themselves something that might be dramatic or provocative. They have simply got together, because they recognise that if this Bill proceeds as the Government intend it to proceed there will be grave consequences for the future of the film industry.
I do not talk about disaster or catastrophe, because many of the people I have met and learned to know and respect are resourceful and will be survivors. However, I hope that the Minister will recognise that we are giving him tonight, with his ministerial colleagues, the opportunity to reflect seriously before going much further. The Minister must know that in a Committee in the other place the three senior officers of the Conservative media group combined with Members of more than one party on the Opposition Benches to demonstrate that they were prepared to say to the Government: Think again. Reference has been made, sadly, to the history of a useful amendment—it may not have been the answer—which Members of the Conservative Party, who I would certainly respect as knowing more than many others, felt should be made.
The Minister needs to take on board the fact that there is no party animus in what those who have spoken want—I see that he nods his head; I am grateful, and I acknowledge that—but the Minister either has advice which is contrary to the advice which those like myself are given by people whose views on the future of the industry we respect, or, alternatively, there is an imperative which Members here will certainly not accept. It has been categorised as walking away from the problem or allowing people to do one or two things that we do not like.
I think the Minister should listen carefully to the words of his political friend Mr. Roger Gale, who in Committee in another place said, in effect, that what he was after in the amendment that was successfully carried in Committee but rejected by the Government on Report was,
"founded on two fundamental Conservative principles".
That is what he believed. The first principle he talked about was that people should be prepared to pay a fair price for what they get. In this instance, it was the television companies. The other principle was that it was a move towards the ending of restrictive practices. That is how he saw the amendment that was so important.
The Minister has opportunities to see whether it is not possible to accept one of the amendments that will be moved in Committee or perhaps come forward with something that may well satisfy a wide range of opinion. The Minister smiles and asks me to understand his difficulties and problems, which I do, but if we are to be in the business of improving the Bill by dividing the House, quite clearly that may be the only alternative. But that is not the only way in which we can make progress.
Noble Lords have very effectively demonstrated their deep knowledge and understanding of the history

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of the film industry in this country, and, of course, I cannot possibly improve on what I have heard. I am always deeply impressed. I certainly want the Minister to take on board the powerful case made from experience by the noble Lord, Lord Willis. The noble Lord asked the Minister to look seriously at whether he could not say helpful things and deliver them by way of fiscal incentives; at whether the industry will be improved by the levy; and at whether it will be improved by persuading British investors that it is worth investing their money in British films, which at the moment it is not.
The ACTT and others have demonstrated by their contacts in the City the amount of money that needs to be funded centrally before they are prepared to put in their own money. It is all sensible and logical, and, as my noble friend Lord McIntosh said, even from the point of view of business acumen the question is whether we have a Government of businessmen who understand business when they put together a package which so patently is out of accord with the times.
Reference has been made by the noble Earl, Lord Winchilsea and Nottingham, to another means whereby some central funding could be provided—by a levy on video and audio tapes. A reference was also made by the noble Lord, Lord Lloyd. In his absence—and we understand his need to leave—may I say that I think he made a very impressive case for better funding for the National Film and Television School. As to how that is to be done, and whether we have to think in terms of amendments—that may or may not be the right way—we shall have to wait until Committee stage to see.
What in fact we need at this time from the Government are perception and courage. I do not doubt their courage if we can get the perception right. We believe that they have the wrong perception. Outside of any party animus, I genuinely believe that there are the means of getting the British people to realise that the film industry, by comparison with a great many others, including the television industry, has not had a fair crack of the whip.
We heard statistics on the cost of producing films and producing drama for television. The noble Lord, Lord Birkett, gave the cost of producing drama as £100,000 per hour, whereas a film might be purchased for the equivalent of only £6,000 or £7,000 per hour. That contrast is quite ridiculous. At the end of the day we want to give our British film industry something that it does not have now—a feeling that the Government do care. It is not that the film industry feels unwanted—just that the Government do not care enough about its problems.
Indeed, the film industry believes that it has evidence to prove that in the past few years the Government have actually taken steps which have damaged its ability to survive in the future. I hope very much that the Minister will be able to say—and I and other noble Lords will be pressing him on this—that as from tonight there must be a will to lift the film industry out of the doldrums in which, for a variety of reasons, it now finds itself. We want to see the British film industry elevated to what we consider to be its proper place. Its proper place is as a trail blazer for British craft, for British art, for national flair, for
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British genius—and in helping British culture. We want to maintain our British film industry for British workers. At Committee stage we shall try to help the Minister do just that.
10.21 p.m.
The Viscount of Falkland: My Lords, I thank the noble Lord, Lord Graham of Edmonton, for coming up with the word I have been seeking; that word is "perception". Ever since our debate last December I have tried to find a word that is charitable and understanding in describing how it was that the Government's line on the British film industry came about. I believe the noble Lord was absolutely right when he said that it was due to a lack of perception. Even taking into account the White Paper and the distinguished persons who were consulted and who were acknowledged in that White Paper, the lack of perception there is very clear. That lack of perception is not something that has suddenly come forth from this Government; it has perhaps endured for a great length of time.
What has now happened is that which the noble Lord, Lord Birkett, described so brilliantly as a dismantling of a delicate instrument. In fact, it has not been possible to put it together again. The situation as it obtains in Britian at the moment is far from bright. As to the changing fortunes to which the noble Lord the Minister referred, I understand his thinking on this. He mentioned British films which have received some acclaim; the old stand-bys are "Gandhi" and "Chariots of Fire". But they are fairly exceptional examples. The truth of the matter is that our cinema audiences have been declining; they have been in a downward spiral since the 1950s. This has resulted in a situation that is not common. Indeed, we are unique in the way that our film industry is suffering.
One thinks of America. The noble Lord, Lord Willis, mentioned that we are often associated with the American film industry. Possibly one of the misconceptions which lies behind the thinking on our own film industry dates from the 1930s, when the film "The Private Life of Henry VIII", which was an enormous success, gave rise to the conventional wisdom that we could produce films which would be profitable from their American returns. That has never, ever been repeated.
In the United States, the situation as regards the film industry—and when I talk about the film industry, I mean the exhibition of films in traditional film theatres—has been maintained at a very steady level for about 20 years. On the figures available last year, the number of cinema theatres in the United States was something under 20,000 screens, which is an enormous number, when one considers also the extent of television in the United States. In the United Kingdom, the number is now just over 700. It may even have decreased since the last figures were available. That is a reduction from about 4,500 to 5,000 in the 1950s.
One of the central causes for the failure of our industry has been the dilapidation at the exhibition end; the inability of the exhibitors to provide the kind of environment in which the public can comfortably see films. A healthy film industry requires a healthy

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exhibition end; and that is not a healthy exhibition end on the small screen. It is a healthy exhibition end in the cinema theatres.
That is something which has been realised in other countries very close to us in Europe. The nettle has been grasped in France, Belgium, Switzerland and Germany. It is important to maintain the exhibition end. It would be invidious to make comparisons, and we do not have the time. However, France is probably a good example to give. It is a misconception that the French are more temperamentally suited to the medium of cinema than we are. I think that the figures which have come out for audiences watching films on television show that we are as enthusiastic about feature films as anybody in Europe or the United States; yet we, for reasons of lack of innovation and of imagination, which have resulted in—as, I am afraid, is common in our country—lack of investment, have experienced a steady deterioration and lack of willingness on the part of the British film-going public to go into cinemas.
There are cinemas in London, Manchester and Glasgow which are comparatively comfortable. That is where most of the cinema-going public goes, but I do not know whether any of your Lordships have attempted to take members of your families to cinemas in the provinces. I still have young members in my family, and I tend occasionally to take them to cinemas in the provinces. I must say that one gets a better standard of comfort in a bus shelter! Certainly nobody can be blamed for wanting to stay at home and watch a film in the comfort of his own home. Of course, the remarks that have been made by noble Lords about the cheap rate at which the television companies get films is absolutely right. But this is not central to the problem. We must improve the whole environment of our film industry.
Apart from the misconception about our ability to earn in the United States, there is another very central and important factor which has to be understood. It has been mentioned by several noble Lords here. It is the curious and very British lack of trust of anything which has the words "culture" or "art" attached to it. The great Frenchman, André Malraux, gave his definition of cinema as the perfect example of art and industry. In other countries of the world, including the United States, there has been a successful balancing of these two factors—art and industry.
The noble Lord the Minister mentioned, with some emphasis, commercial cinema. This is something which worries me. I do not like this dichotomy; this idea that we have on one side commercial cinema and on the other side we have something slightly airy-fairy, something slightly pseudo, which is the cultural end. This is probably another reason which has caused the lack of interest in the cinema. Probably the only organisations which have been able to do anything about this balancing of the commercial and the artistic have been the following. One is the very organisation which is now being dismantled, the National Film Finance Corporation. It did this through its revenue from the Eady levy, and so on. Nobody would criticise the Government for getting rid of the Eady levy because there is not enough exhibition to have that.
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However, the replacement of the National Film Finance Corporation by another body seems to me to be totally irrelevant.
The other body in this country which has attempted it is the British Film Institute. It has attempted it very successfully. This has probably been appreciated only by film buffs and people in the film industry. The British Film Institute, on a very slender budget which it receives from funding resources here and from voluntary sources, has managed to produce in this country a network, mainly centred on London, with its National Film Theatre, and so on. It has managed to spill out into the provinces and has, as an adjunct to that, a network of film workshop activity. Such activity, if we look to the future, is an important function, an important contribution to the film industry because it is at this cultural level where our seed corn (to use a popular expression) of talent, technical and creative, will come.
I have not yet quite understood what these "shorts" are which have been included in the Bill. The noble Lord the Minister may explain this or it may become clear at Committee stage. I do not understand why it should be found necessary that new talent should cut its teeth on these 35 minute shorts. Having had a fairly mis-spent youth, I have probably been to cinemas in more countries than most. But I have never been tempted to see a 35 minute film unless it has been a special subject such as an educational film. Perhaps the Minister will enlighten us. I am curious to know what a 35 minute short is. However, I wonder what the up-and-coming film directors, the up-and-coming film technicians, and so on, will think about cutting their teeth on a 35 minute short. I am curious about that. I should say that the whole lack of perception on this Bill, which we have discussed, has probably actually benefited us. That is because one of the benefits of this is that we have all got together, since December, with interests.
I have not talked to anybody in the film or in the television industry who has thought that this Bill is good or relevant. I think that we have been able to concentrate our minds on this lack of perception, and that something good will come of it. I am of an optimistic nature. I am quite sure that even if this Bill should go through in the form in which it is and result in the complete collapse of the film industry as we know it—which I think is likely if we do not amend the Bill—we will then be forced to look, as other countries have done, particularly other countries in Europe, at ways of resuscitating our film industry. Time is now getting on. I think the useful work will be done at Committee stage.
Before I wind up, I should like to say that if we are at some stage going to look at other parts of Europe, we ought to look at France. France had had similar problems to our own. In the 'sixties they had falling audiences and dilapidated exhibition centres. They found that the television was drawing people away. They took active steps, with Government support, using, through its agency, a redistributive mechanism—which is the accepted way of doing it—to create a rejuvenated film industry. There were problems, but a levy similar to our Eady levy, although its application was somewhat different, was operated. A tax of 14 per cent. before VAT was collected from

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exhibitors. In 1983, this was placed in a rolling cinema support fund, known as the fonds de soutien, which in that year totalled well over £50 million. Seventy-seven per cent. of that fund came from contributions and a further 8 per cent. from television, with a 15 per cent. top-up from the state. The money was collected and administered by a Government-sponsored agency. Another important factor—to be considered, I suggest, in any future reform of our film industry—is that the money went back into production, distribution and exhibition. It went right across the board. There was no concentration simply on production, leaving exhibition to fend for itself.
This process rejuvenated the French film industry to the extent that there has been an eightfold increase in the number of people buying cinema tickets. There were some problems. As always happens, unless you have a regulatory body in films the big boys tend to get the biggest piece of the cake. It was the original thought of Monsieur Jacques Gajos to create the agency for regional cinema development in France. This body, with very little Government subsidy, enabled small cinemas to obtain big films quickly. That has never happened in this country. It has enabled small cinemas in regional areas in France to buy prints from the agency, which had them printed at its expense. This has revitalised interest in films in areas of France that had not been well served. Over the last 18 months there has been a remarkable renewal of interest, with cinema audiences increasing by four to five million.
I agree with the noble Lord, Lord Willis. I liked his illustration of tearing down Westminster Bridge and throwing ropes across. I hope that the united front shown by the film industry at all levels, and indeed displayed by your Lordships' House, means that the noble Lord the Minister will heed the remarks that have been made. I am sure that he will be sympathetic to the new vision that we have been able to create, and will see that a wider understanding is perhaps necessary in order to put this business really on its feet. We should not be fooled by one or two successes, one or two Oscar nominations and so on. Unless we are careful, as the noble Lord, Lord Willis, has said—he said it more forcibly in our debate in December—any money that we put into the new operation will somehow get back to the Americans, who are very jealous of their English language film industry, and it will not benefit our industry at all.
It is a balance of culture and commerce: a matter of taking a completely new look at serving an interest that is not dead. People want to go to the cinema. It is a pleasant place to visit, and they can see good films quickly and in comfort. We shall have a flourishing film industry.
10.40 p.m.
Lord Lucas of Chilworth: My Lords, I do not take quite the same view as the noble Lord, Lord Graham, took in his opening remarks, because I have not regarded this evening as at all hostile; I have found it extremely interesting. But I have to say that some five hours ago I heard a number of noble Lords talking about another industry precariously balanced between survival and extinction. That is what I have heard
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again tonight. The one common theme between the earlier debate and this one was that noble Lords asked, in a variety of different ways, for more money—more taxpayers' money.
Frankly, that rather saddened me, because I do not think that is the right way of going about things. Money does not grow on trees; it has to come from the taxpayer. It is the Government's general view that we have to provide the right kind of environment in which people have a free choice as to how they spend their net disposable income. We have, through taxation, reduced quite markedly over the last two years the imposition on the corporate sector, and there is another year of that plan to go; so there are more monies available for various industries without its all going in tax, and it would be quite wrong to reverse that trend by taking more money away from the taxpayer by increasing taxes to meet the demands not only of this industry but of other industries.
I shall enter very much into the spirit of this evening's debate because I have found it interesting. I want to assure noble Lords that I will take away and think about many of the ideas that have been put up, and discuss them with my colleagues. I am grateful to the noble Lord, Lord McIntosh of Haringey, for identifying some of the areas in which he suggested he might be seeking to amend the Bill. He agreed that the innovation, the commercial risk, inherent in this industry was not something which was necessarily a role for the public sector but was better undertaken in the private sector, with safeguards. I believe that we have introduced in this Bill the safeguards for which he calls.
The noble Lord, Lord Birkett, said that we were quite wrong on the dismantling of the existing framework of the industry and had been clumsy in restructuring it. I do not agree, because we have provided a good restructuring and we have provided continuity in the form of the new consortium. It has among its members highly reputable people. I am sure that no noble Lord would suggest that the existing members were going to do anything other than that which they have agreed to do, and do it in an honourable and wholehearted fashion. They are putting up some very good money. In fact, the continuity is such that, certainly for five years, there will be more money available to the industry. Of course, it cannot be anywhere near the £18 million which the noble Lord, Lord McIntosh, spoke of as the 1958–66 Eady levy contribution. It would be ridiculous if I ever suggested that we were going to match that kind of figure in an industry which has changed so remarkably since that time, as I tried to make clear in my opening remarks.
We think that the private sector successor to the NFFC is a good arrangement. We believe that, as it gets under way—and a lot of progress has been made in the last few weeks other members of the industry will join that consortium; and, in turn, that will generate more money. I take very much to heart what the noble Lord, Lord Briginshaw, and others, have said.
The noble Lord, Lord Willis, in particular spoke about reviewing the general tax system; perhaps the term "tax regime" would be a better way to put it. He was really suggesting—as I think was the noble Lord,

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Lord Briginshaw—that the real answer was investment. Investment in an industry such as this, which is so highly speculative and is a big risk business, must come from the private sector. It is not the Government's function to risk taxpayers' money in this kind of area.
My noble friend Lord Mersey made a number of interesting remarks. However, with respect, I think that my noble friend was wrong in his suggestion that people are especially keen to see feature films when they watch television. Investigation has indicated that the percentage of television screen time taken up by feature films is only about 10 per cent., and that percentage is steadily falling; that is, apart, of course from the festival periods. In fact, in most weeks of the year very many more people watch the serials, the soap operas and sport than watch any feature films that are shown on television.
My noble friend Lord Auckland spoke about videos. I have a number of figures, but perhaps it would be better if we left that analysis for another day. However, the situation is not quite as my noble friend suggests.
I should like to refer to one point that was made by the noble Lord, Lord McIntosh of Haringey. The noble Lord spoke about the European Directive concerned with what made up a film. I have some sympathy with the noble Lord's view that the Commission really has to take steps to ensure that other member states—not just the United Kingdom—comply with the Directives on the freedom of establishment and labour. I can assure your Lordships that the Government will continue to press the Commission on this matter. Of course, to decide now to put the clock back some 15 years and to re-erect the barrier against other member states would be a pointless and futile exercise. Sooner or later—probably sooner—we would be taken to the European Court of Justice and charged with being inconsistent with the fundamental rights of the establishment and the freedom to provide services. I am sure that the noble Lord would not like us to fall into that trap.
I should like to say a few words about the very interesting contribution made by the noble Lord, Lord Lloyd of Hampstead. During the course of his remarks he spoke about the security of funding of the National Film and Television School. Of course I recognise—as do your Lordships—that he has a particular interest, and it is a very valuable interest. We do not believe that there is any reason to doubt the bona fides of the film and television interests which have agreed to fund the school for the next five years. Moreover, their contributions to the school will be in addition to their existing payments. Therefore, I think that there is a good deal of goodwill in that direction.
Perhaps I may quickly reiterate the main objectives of the Bill. The overriding concern is with the commercial film industry. I do not think that this evening is perhaps the right time to debate what the noble Viscount, Lord Falkland, described as the airy-fairy end of the film-making business. However, as I speak in commercial terms as distinct from cultural terms, it may be that the noble Viscount was suggesting that it was I who thought that the cultural
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end was airy-fairy. I do not. I am talking about the bread and butter end of the market, rather than the educational and specialist market which, in my vocabulary style, more neatly falls into culture. However, contrary to what the Lord, Lord McIntosh, suggested, let no one be under any misunderstanding that the Government have no care for the culture of our society. Of course, we have. Indeed, the grants which my noble friend Lord Gowrie makes from the budget of the Office of Arts and Libraries to that part of the film industry, although perhaps not as large as many people would like, ought to demonstrate the Government's feelings in that area.
I reiterate that the main policy as set out in the Bill attacks the main problem area. We sweep away this raft of regulatory controls; we pave the way to do away with the Eady levy, which has not helped in recent years. I take the point that the noble Viscount, Lord Falkland, made in his remarks about the dilapidation of the cinema and the run-down at the exhibition end of the film industry in recent years. They say that the abolition of that levy might possibly make the difference between survival and extinction.
While I am on that point, I would agree with the noble Viscount that the exhibition industry has a very much more important role to play in the future. It must find new products; it must find a new way of marketing and selling those products. I do not suggest that, for all that they might do, they will encourage all those people who have left them to return to the cinemas, but I was interested to note that an experiment in Darlington of all places, which has a very high unemployment rate, of reducing film prices is having some encouraging results, and is of course adding to the social life of what is a deprived area.
There has been much talk about the cost of television time and the cost of making short films, long films, major films, and so on. When I was looking into the background of this Bill I was surprised to find that there is less of a problem today in securing finances and ensuring backing for a high-budget, really big film than for a low-budget, modest film. For a £10, £12, £15 or £20 million budget film with television rights and international rights involved, there is no great difficulty in raising money. It is in the other area where there is greater difficulty and this is where the proposals in the Bill set out to give assistance; I refer to the low-budget £1 or £2 million film, which does not attract risk finance quite as regularly.
Again I noticed and was encouraged that Investors in Industry had recently subscribed to or taken a financial interest in the Barkworth television film series "The Price", which has just finished. So industry outside the film industry is taking some interest.
As it has been mentioned on a number of occasions during our debate, I think I should say something about the levy principle. I hope that no one will take it amiss if I say that arguments that have been advanced tonight for a new levy are not entirely novel. We received similar representations during the course of the review of film policy and they were summarised in the While Paper in paragraph 5. We summarised the Government's response to those representations. It may not go amiss if I reiterate them.

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First, the White Paper makes the point that we do not believe that statutory recycling mechanisms are an efficient way of encouraging an economic activity that should essentially be orientated towards the market—a market which, as we have heard, is expanding in a number of areas through a number of outlets. Secondly, the argument that the original Eady system was efficient by virtue of the fact that it rewarded success cannot be used to promote arrangements for siphoning off returns from commercially successful productions in order that films can be made which would otherwise not attract market finance.
We also stated in the White Paper that we did not believe that the Government should intervene by introducing a television film levy which would increase the costs of the BBC, with consequent implications for the television licence fee; nor did we think that it would be right to increase the costs of the ITV companies, either. It is claimed that a levy on films shown on television would be an important corrective mechanism, for underlying that proposition is a belief that the BBC and ITV pay too little for the films they show. I do not know on what basis that statement is made. I believe that the film makers are big enough boys to negotiate and deal with the so-called duopoly.
I am rather intrigued that one does not hear the football industry complaining about the price they receive. A deal is struck between the football interests and the television interests. Nobody has actually said, "Let us have a levy per viewer of football". Therefore, I think that the industry could well look after itself there. I am not persuaded, and the Government are not persuaded, that we need an artificial recycling mechanism in statute in a market which, despite all the limitations, is nonetheless pretty capable of operating without that distortion.
I do not want to keep the House any later. We have had an interesting debate. I shall look forward to the Committee stage. I have no doubt that many of the points raised this evening will be discussed, and I know that those amendments which we may see in a week or two will be constructive. In conclusion, I believe that the Bill as it stands sets a rather better framework within which the commercial film industry can tackle and overcome the problems confronting it. I believe that the Government have provided an amount of money which will secure continuity, and which will give the industry that element of faith that it so rightly deserves. I hope that in the course of our further consideration we shall not be confronted with demands for further taxpayers' money to support an industry rich in inventive genius, in skills, in talent, and indeed in culture. I hope that your Lordships will give this Bill a Second Reading tonight.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Town and Country Planning (Compensation)Bill
10.58 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Avon): My Lords, I beg to move that this Bill be now read a second time.
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It is the last of the four Second Reading debates today. I am sure that we shall have a useful discussion despite the late hour. I am told that variety is the spice of life, and as President Reagan said last night, "My goodness! she is a difficult act to follow".
The law relating to town and country planning is often regarded as a complicated and rather dull subject, mainly of interest to those whose business is the development of the land. In fact, planning law affects all of us, and proposals for the development of land can arouse considerable passions at a local or even as your Lordships know from the recent debate on the proposed third London airport—at a national level. One of the more obscure by-ways of planning law relates to compensation: this too can occasionally give rise to situations which create public anxiety and concern. When this happens, it is the Government's task to look at the way in which the law is working, and to take any necessary corrective action.
Normally compensation is not paid for the refusal of the planning permission that is required before land can be developed. The local planning authority can consider the proposal in the light of all the relevant factors, and balance the interests of the developer and of the wider community, without having to ask itself whether it can afford to refuse the application, if this is the right thing to do. But in May 1983, in the case of Camden London Borough v Peaktop Properties (Hampstead) Ltd, the Court of Appeal decided that compensation would be payable in certain circumstances for the refusal of an application to build an additional storey onto an existing block of flats.
To explain this decision, I need to refer to the provisions of Section 169 and Schedule 8 of the Town and Country Planning Act 1971. There are equivalent provisions in Scottish planning legislation. Section 169 provides that, if certain types of applications are refused or granted subject to conditions (there has to be an appeal to the Secretary of State first) and this has an adverse effect on the value of the land, compensation is payable. The types of development to which Section 169 applies are set out in Part II of Schedule 8, and they include the enlargement by up to 10 per cent. of a building which was in existence on 1st July 1948. That is the appointed day for the Town and Country Planning Act 1947 which was the foundation of current planning law. In the Peaktop Properties case, the local planning authority argued that the right to compensation did not arise when the proposed extension involved the creation of new self-contained flats; but the Court of Appeal rejected this interpretation of the statutory provisions.
I will not bore the House with a detailed historical account of the origins of these provisions. The clue is to be found in the heading of Schedule 8, which reads "Development not Constituting New Development". When the 1947 Act introduced modern planning control, it was considered that some classes of development ought to be regarded as part of the existing use of the land, and that the landowner ought not to lose entirely his right to carry them out. It followed that, if permission for such development did have to be refused under the new planning system, compensation should be paid. Indeed, in most of these cases, a planning application no longer has to be made because they are covered by the provisions of the

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general development order, about which I shall be speaking in a moment. However, extensions to flats are not covered by the GDO, and the refusal of permission for a 10 per cent. extension of a block of flats in existence on 1st July 1984 still creates a potential compensation liability, as the Peaktop Properties case demonstrates.
It could be argued that the provisions of Section 169 and Schedule 8 date back to an era when planning controls were still something new, and that they represent a transitional arrangement which was needed at the time, but has now served its purpose. That is not the case that I am putting forward. We recognise that the right to compensation under these provisions is capable of affecting property values, and should not be taken away without very good reason. But in the case of penthouse flat extensions we believe that there is clear evidence that these compensation rights are being abused.
A report prepared by a group of residents associations suggests that before 1983 there were on average three or four penthouse flat applications each year. In 1983, the year of the Peaktop decision, there were 12. Last year there were 21, and information coming from correspondence and press reports suggests that the increase has been continuing. It is suggested that this is because economic factors are now favourable to such extensions, and I am willing to accept that this is part of the explanation. But it is not the whole story.
Twelve months ago, there was a widely publicised seminar entitled "Section 169 Town and Country Planning Act 1971—A Cascade of Gold for every Building Owner". The brochure referred to
"Great possibilities for compensation for the owners of buildings which existed in 1947".
There were sessions on "the pre-requisites for a successful claim for compensation" and "How to secure compensation". In short, the whole purpose was to encourage the making of applications which did not relate to genuine proposals for extensions, but which were intended to be refused so that they could provide the basis for a substantial claim for compensation.
My Lords, is it surprising that the number of applications have been rising in the last 12 months? Moreover, the worse the application is in planning terms, the more harm it does to the appearance of the block; the more it overcrowds an already densely populated area, the more it adds to the problems of street parking, the greater the chance that the planning authority will be forced to refuse it despite the financial consequences. It may be said that this is a problem limited to a few central London boroughs. But, even if this is so, the residents associations' report to which I have already referred suggests that there are over 2,000 privately-owned blocks of 10 or more flats built before 1984 in Inner London, and that the potential total compensation bill could be of the order of £60 million. I do not believe that the House can allow an abuse of this magnitude to continue.
As I have made clear, our case for amending Section 169 rests on the way in which the provisions relating to penthouse flats are being abused, rather than on any
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argument that the provisions are obsolete. Two consequences follows. First, the action that we are taking needs to have immediate effect. We cannot allow time for a flood of speculative applications to be made while the Bill is going through Parliament, so that, by the time it has been enacted, most of the damage has already been done. We have therefore provided for the amendment to Section 169 to operate from the date when the Bill was introduced—an unusual provision, but one that is certainly not unprecedented, particularly in fiscal legislation.
Secondly, the Bill has been narrowly drafted, so that the amendment to Section 169 is limited to the specific situation highlighted by the Peaktop Properties case. Indeed, it has been suggested that the Bill has been too narrowly drafted on this point, and that it needs to cover other types of extensions of blocks of flats which involve increasing the cubic content of individual flats by more than 10 per cent., but without any increase in the total number of units. We are considering this point, and we may well need to return to it at Committee stage. But we do not consider that we should go wider than this. It might be possible, for example, to abuse the provisions of Section 169 in relation to office extensions. If such abuses arise, we shall need to deal with them. But it is no light matter to take away compensation rights in this way. We consider that we should do so only where there is clear evidence that they are being abused in a particular way.
I now turn to the other half of this Bill, and to the provisions relating to Section 165 of the 1971 Act. When a landowner wishes to develop his land he will often need to apply to the local planning authority for permission to do so; but not always. He may find that permisssion for this type of development has already been given in a development order, made by the Secretary of State under Section 24 of the 1971 Act. I have already made a passing reference to the Town and Country Planning General Development Order 1977, commonly referred to as GDO, which grants permission for no less than 23 classes of development, including a good number of those which appear in Schedule 8, which range from the erection of gates, walls and fences and minor house extensions to quite significant extensions to industrial premises. A development order is a statutory instrument, and Parliament controls the use of this power through the negative resolution procedures.
Like any other statutory instrument, a development order can be revoked or amended. Section 165 provides that where, first, planning permission for the development of land has been granted by a development order; secondly, that permission is subsequently withdrawn by the revocation or amendment of the order; and, thirdly, an application for planning permission for the same development is then refused or granted subject to conditions, then, on those three cases compensation is payable to the applicant for losses which are directly attributable to what has happened.
The reasoning behind this provision is perfectly sound. The landowner may already have incurred expenditure in reliance on the GDO permission. He might have begun to draw up plans and buy materials, or he might even have reached the stage of letting a

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contract. If he is then stopped halfway through, it is reasonable that his direct losses should be reimbursed. Unfortunately, Section 165 at present goes much wider than this. It contains no reference to any time limit; so it does not matter when the development order was revoked or modified. A landowner may be able to obtain compensation for the refusal of a planning application simply because, many years previously, development of that type was permitted under the GDO. The fact that he had no intention of using the GDO right when it was available—and, indeed, may not even have owned that land at that time—will not debar his claim.
Until recently there was little concern about the operation of Section 165, mainly because the General Development Order had rarely been amended in a restrictive manner. In 1983, however, we removed development likely to involve the presence of a notifiable quantity of a hazardous substance from the permitted classes. Local planning authorities, while welcoming the additional power to control such development, were concerned about the potential compensation liability if applications had to be refused or conditions had to be imposed. We have no reason to believe that industrialists have abused these provisions; indeed, it would hardly be in their own interests to do so. Nevertheless, we ought to take the opportunity to correct the defect in the legislation. The Bill therefore provides that the provisions of Section 165 will apply only when the application for planning permission is made within 12 months of the revocation or amendment of the development order (or, in the case of past revocation or amendments, within 12 months of Royal Assent). After that period, the compensation liability will cease.
Why 12 months? Our intention is to limit compensation to real out-of-pocket losses and to exclude notional reductions in land values. If a person has begun to incur expenditure on a development scheme permitted under the GDO, and the order is amended, it seems to us that 12 months provides adequate time for a planning application to be submitted. If an application cannot be submitted within 12 months, this suggests that the landowner had not begun work on his scheme before the order was amended, and has not therefore suffered any out-of-pocket losses justifying compensation. It is a rough and ready test, but we have quite simply been unable to find any better way of achieving the same objective.
It has been suggested that a 12-month period is too short for certain kinds of development involving a long lead time. It should be remembered, however, that development order rights are not taken away out of the blue: almost invariably there is a period of consultation, which alerts landowners who may be affected to what may happen. If there are cases where this is still insufficient, any necessary further advance warning can be achieved by deferring the operative date of the GDO amendment. The hazardous development amendment, for example, did not come into operation until six months after it was laid, for precisely this reason. We believe that it is preferable to handle each amendment according to its particular needs rather than making an across-the-board increase in the one-year period, so increasing the scope for abuse in the case of those relatively minor types of
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development for which a planning application can be worked up quite quickly.
I would not claim that this is a simple Bill, although it does have the merit of being short. The provisions relating to Section 165 of the 1971 Act and its Scottish counterpart are designed to cure a defect: those relating to Section 169 are aimed at stopping up a very limited abuse. I commend the Bill to your Lordships. I beg to move.
Moved, That the Bill be now read a second time—(The Earl of Avon.)
11.14 p.m.
Lord Lloyd of Kilgerran: My Lords, in rising to support the Second Reading of this Bill may I first of all congratulate the Minister on the clear and careful way in which he has presented this short, complicated and technical Bill. It is a Bill having serious financial implications, and, as the Minister has said, is mainly directed to removing the heavy financial liabilities for local planning authorities, involving perhaps millions of pounds, arising largely from the Peaktop Properties case. That case, of course, was in relation to the development of large blocks of flats that had been built prior to 1948. I therefore accept, as stated by the Minister and in the other place, that there is clear evidence that there has been serious abuse of the compensation provisions of the Town and Country Planning Act 1971.
However, a consideration of the financial provisions of this Bill raises problems as to what should be a fair balance between its provisions and the rights of individuals who have an interest in the property, particularly in view of the long list of developments at present permitted without the permission of local authorities or the Secretary of State under the well-known Town and Country Planning General Development Order 1977, No. 289, to which the noble Minister has referred, and which is affectionately known to practitioners as the GDO.
In view of the lateness of the hour, and as there are many experienced speakers waiting to follow, I propose only to draw attention to a few general matters where amendments to the Bill may be desirable in order to prevent hardship to certain classes of owners. The first relates to the length of the period of 12 months included in Clause 1 of the Bill as subsection (1A) of Section 165 of the Town and Country Planning Act 1971. As the Minister has described, when planning permission granted by a development order is withdrawn a further application must be made within 12 months if it is to qualify for compensation. For certain industries, such as the farming industry and developing small businesses, this period is far too short.
I do not propose at this late hour to go into details to substantiate this, but I would point out that the pattern of farming practices may change quite rapidly these days. Dairy farming is being given up, as your Lordships have heard, with sheep farming being substituted; and, as I know from my own experience in relation to farming in Wales, horses are then bred instead of sheep. Therefore, a period of 12 months, in the circumstances in which small farmers in particular

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find themselves, could be damaging. Again, I shall not elaborate the point, but the pattern of business arrangements of small firms may also change, and, again, this period is too short.
My present view is that, so far as farming and certain small businesses are concerned, three years would be more reasonable when dealing with developments permitted under Class VI of Schedule 1 to the GDO. That class is entitled "Agricultural buildings, works and uses". I also submit that a much longer period should be adopted in dealing with parts of another class, Class VIII, which is entitled "Development for industrial purposes". I am also advised that some flexibility in regard to the period concerned should be given in relation to some developments under Class III, which relates to changes of use and particularly applies to shop premises; and also under Class IV, which is entitled "Temporary buildings", particularly in connection with farming and small businesses.
I come to the second amendment proposed, set out in Clause 1(2). These amendments, as the Minister has clearly indicated, are specifically directed to developments of blocks of flats in relation to which there has most certainly been abuse. The problem arises from the wording to be found on page 2, where, in relation to the definition of a building subparagraph (a) states that this applies where,
"the building contains two or more separate dwellings divided horizontally from each other or from some other part of the building"—
and sub-paragraph (b) reads:
"the enlargement would result in an increase in the number of such dwellings contained in the building".
Now if I may be personal for a moment, I have a particular instance in mind of a school on the Isle of Wight where we have in about 70 acres a complex of buildings comprising art galleries with boys' dormitories, to which are attached a house master's house and another dwelling. Two dwellings are attached to this complex. We have in mind to build another dwelling to house a house master or research persons in relation to the contents of the art galleries. It may be therefore that that kind of development would be caught under the words of the Bill. The school concerned has charitable status, and it seems to me that this is not the kind of building to which dwellings have been added that is contemplated under this Bill. I suggest therefore that the word "contains" in line 3, page 2 of the Bill, might be more suitably modified by having substituted for it the word "comprises". However, that is a matter for the Committee stage. I may be wrong in the example that I have been given and perhaps the problem does not really arise. Other difficulties may arise under this proposed amendment in relation to charitable and historic buildings, but I see that the noble Lord, Lord Montagu of Beaulieu, is to follow me and so I shall desist from pursuing that argument further.
The long delay by the Government in bringing forward this legislation is somewhat extraordinary, having regard to the notice they have had of the potential abuses of the compensation clauses of the Act of 1971. I therefore crave that fact in aid in saying that no peremptory action should be taken to defeat the rights of legitimate owners of lands who wish to
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develop their activities and have difficulties in complying with the year period. However, there are other points on which, if it were not so late, I could have elaborated, but I do not propose to detain the House any longer in regard to this Bill. I support the Second Reading.
11.23 p.m.
Lord Montagu of Beaulieu: My Lords, this is a Bill that clearly must command support from all parties. It deals with two glaring anachronisms in present legislation, and closes the door on a distasteful piece of exploitation. I strongly support the Bill, but speak tonight representing the views of the Historic Buildings and Monuments Commission and therefore must declare an interest.
Before commenting in detail on the Bill, I think that I speak for the whole heritage world tonight when I say how delighted they were to have heard the announcement by the noble Earl this afternoon that the Government have decided to place at the disposal of the National Heritage Memorial Fund no less than £25 million to ensure the long-term future of Kedleston, Weston and the Chippendale furniture at Nostell Priory. It certainly nails the lie that the Government are not prepared to support the heritage.
Our view is that the Bill does not go far enough. Brevity is a fine thing and this Bill has all the merits of being short and succinct. But in confining itself so rigorously to two specific anachronisms it fails to deal with the problems that these two sections—Sections 165 and 169 of the 1971 Act—cause to the heritage. I must explain shortly why I think the Government need to widen its scope. I was delighted to hear from the noble Earl that perhaps amendments will be sympathetically received at Committee stage.
The architectural heritage is important to us all. It consists not just in single buildings of great intrinsic value and interest, but in groups of buildings which may individually be of minor interest but which, taken as a whole, make up the familiar and beautiful local scene. Legislation therefore permits and encourages local authorities to designate what are known as conservation areas; those of architectural and historic interest whose character and appearance ought to be preserved. This was a brilliant conception; the intention being to enable groups of buildings to be preserved without applying the full rigour of statutory listing to each and every building individually. The commission fully supports this concept, not only with its mouth but also with its purse; we are spending around £7 million a year on grants to buildings and conservation areas, with the active support of local authorities.
However, some of those same areas are now at risk from Sections 165 and 169. They are at risk because—understandably, I fear—local planning authorities are loath to reject a planning application if rejection would give rise to a claim for compensation. Thus, bad planning decisions have been taken, and will continue to be taken, simply to avoid the likelihood of compensation. I argue, therefore, that the Bill in its present limited form wastes a first class opportunity for protecting the heritage. It tackles important issues, but does not go far enough.

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I now turn to Section 169. My noble friend has already explained the circumstances in which compensation can be claimed. One of the main qualifying factors is that the building must have been in existence in 1948—and I am sure your Lordships will agree that this test is one that historic buildings invariably satisfy. Then the proposed development must require planning permission. In city centres many rear or side extensions within the 10 per cent. tolerance will be within two metres of a boundary wall and therefore will need permission; or the building may be used, not as a residence but as, say, offices or shops, in which case a planning application must be made. In all these circumstances refusal of consent can give rise to a claim for compensation.
I shall give some examples. The Bill before us excludes from compensation a roof extension, if the building is used as flats and if the extension will be used as an additional and separate flat: good. But what if the building is used as offices and the new top floor will add extra office space? A roof excrescence is no less unsightly because a particular house is used as offices rather than as flats. It is the building and not just the way it is used that concerns me and my colleagues in the Historic Buildings and Monuments Commission.
Take the case of pairs of villas standing close to the street, but with gaps between; "critical gaps" is, I believe, the planning term. Through them is a view of gardens, probably trees, and possibly a uniform brick boundary wall at the rear. If the gaps are filled with garages and side extensions, those views will be lost. If planning permission is refused, compensation may be payable. It, in a uniform street, compensation is paid to one owner, then the chances are that, inevitably, all the other owners will rush in their applications in the expectation of receiving a similarly lucrative refusal.
I say "lucrative refusal" advisedly, because in London compensation can be very heavy. It is all a question of land values. In other parts of the country the cost of the proposed building work may usually equal, or even exceed, the increased value of the property, but not in London. Here even refusal of consent for hard-standing for cars in front gardens could lead to substantial claims. With current interest in Section 169 we can expect more and more applications to be followed by claims for compensation.
I ask your Lordships to consider what the progressive loss of front gardens would do to pleasant eighteenth and nineteenth century streets. How will local objectors understand that, even when there seems to be a cast iron case against a planning proposal, permission is still given? I hope your Lordships agree that it is not enough to amend Section 169 only in the limited way now proposed. This section poses a real threat to the integrity of conservation areas within our historic cities. To amend it without removing liability for compensation in respect of listed buildings and conservation areas would be to tackle only half the problem.
However, under Section 165 as it stands, the local authority is liable to pay compensation in respect of losses directly attributable to imposition of the Article 4 direction. In short, it can make a direction, but, if as a result, it decides to forbid unsuitable alterations in the conservation area, it may face a claim for
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compensation. I refer there, of course, to GDOs, about which there has been a lot of talk already.
My noble friend has explained the Government's view that in the case of amendments to a development order, compensation should still be payable within a year of a change, but not afterwards. Pari passu, exactly the same arguments should apply to Article 4 directions. I ask your Lordships to agree that a longstanding Article 4 should be treated in the same way as a long-standing change in a development order. I understand that there may be some effect on agricultural land, and I listened with interest to what the noble Lord. Lord Lloyd, said.
In short, I welcome this Bill, but regret that it does not go far enough. Two sections of the 1971 Act are to be amended in a limited way that fails to deal with difficulties for the heritage. I think that it is a wasted opportunity. Frankly, I can see no merit in such a blinkered approach. I am confident that at Committee stage all parties will unite either to support a Government amendment or another amendment to take account of the points that I have made.
11.31 p.m.
Lord Sandford: My Lords, I welcome the Bill and I am grateful to my noble friend the Minister for explaining its genesis and origin. It is right to respond to abuses such as the Peaktop case with appropriate legislation once they have been revealed, but it is always a mistake to legislate on the basis of a particular abuse or a particular incident. It is much wiser to look at the whole code of compensation in this case. I am grateful to my noble friend for the indications which he gave earlier this week that that is what the Government now intend to do and for the assurance that he gave in his speech that they will indeed do so when we reach the Committee stage, either by way of further amendments to this Bill or assurance that the matters such as those which my noble friend Lord Montagu has just raised will be taken care of in the planning (miscellaneous) legislation which will follow shortly after.
All that I want to do at this late stage in the proceedings is to mention three aspects which I personally would want to see attended to at the Committee stage and which I know that the Association of District Councils is keen to see tackled. The association deals with all the development control in England and Wales outside the conurbations. I do not now want to say anything more about the urban aspect—the conservation areas—because my noble friend Lord Montagu has said all that needs to be said on that. Perhaps tonight, though, my noble friend Lord Avon might confirm that, in dealing with the point of my noble friend Lord Montagu, we shall be dealing with the situation in Scotland as well. The Bill is clearly drafted with Scotland in mind, and I take it that anything we can do for conservation areas in England and Wales will cover Scotland, too.
I should like to pursue again, but very briefly, the reference to the countryside made by the noble Lord, Lord Lloyd, a moment or two ago. I recall recommending, when I was reviewing the national parks 12 years ago, that the landscape area special development

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orders should apply in all 10 parks and not just two. We have made some progress in that recently the Ministry of Agriculture has been claiming credit for having withdrawn its opposition to that extension, so that now, after 12 years, we are in a position shortly to be applying that order in the other 10 national parks. From examples that I have seen of rural abuses of this compensation period, it is clear that that extension needs to be taken further into the areas of outstanding natural beauty. I do not want my noble friend to reply to that point tonight, but I should like to give him notice that it is something that we shall want to pursue and discuss at the next stage.
The third and last point which I should like my noble friend just to take notice of tonight is the need for the liability to pay compensation, when it arises, to fall in the right quarter; that is to say, when it arises from changes in national policy, leading to adjustments of the general development order, the compensation should be met by central Government funds. But when it arises as a result of an Article 4 direction, say by a local planning authority, then of course it should fall on the local authority. We want to have that distinction clear. We also want to establish the fact that when compensation comes to be paid by the local planning authority that expenditure does not count against their financial targets. Those are the points which I think need further attention at Committee stage.
11.36 p.m.
Viscount Craigavon: My Lords, I, too, certainly support this Bill. I was going to make a fairly long speech encouraging the noble Lord down a road which he has already in his speech indicated he is exploring. I take his assurances in that regard. It is the area of Section 169 and the 10 per cent. relating to residential property, as well as the addition to Clause 1(2) to restrict the expansion of individual flats. If the noble Lord could produce an amendment on this point, I should be extremely grateful, as would the Royal Borough of Kensington and Chelsea, which is prompting me and, I believe, the noble Lord, too.
I hope that the noble Lord will feel free to backdate in any small amendment that he introduces to the date of publication. That would be for the reason that he mentioned—to avoid speculative applications being made in the next few days and weeks until the Bill is passed. I am grateful to the Minister for what he proposes, but I should add that I still might produce some small amendments at Committee stage.
11.37 p.m.
Lord Coleraine: My Lords, I, too, welcome this Bill. I so much agree with what has already been said that I am able to be brief. I particularly welcome Clause 1(2) and the equivalent provisions for Scotland, which deal with the pernicious rash of applications to put whole floors of new flats on top of existing blocks. I know many people in blocks in central London who for years have been subjected to the uncertainty of not knowing whether or not their landlords, or perhaps the owners of that part of the sky immediately above their roofs, were going to succeed in their game of cat and mouse with the local authority and be given
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permission to put a whole new floor of flats on top of their blocks, with all the upsets and worries that the building works would cause. This is just one of many factors which have for years now bedevilled flat dwellers in central London, and the Government's initiative in bringing forward this Bill to resolve the problem is very much to be welcomed.
However, I wonder whether the Bill goes far enough in this respect. I have two points to make. The effect of the Bill is to be retrospective, but I should like the House to consider whether it is to be retrospective enough. Developers who have paid large sums of money for what amounts to chunks of sky with hope value have done so with the clear knowledge that if they lose their planning applications and collect compensation, they will have very satisfactorily cheated the community.
In his Second Reading speech in another place my honourable friend the Under-Secretary of State said:
"We seriously considered covering applications already in the pipeline… However, we reluctantly concluded that that would represent an unacceptable degree of retrospection, and open us to the charge of confiscatory legislation. We believe that the provisions of Clause 3 are a reasonable balance between the conflicting interests".—[Official Report, Commons, 5/2/85; col. 901.]
I should like to push this point a little further, just to see whether the door is on the latch, if not ajar. Any developer who has paid good money for air space will be retrospectively affected by this Bill. In my mind there is no particular magic about the making of a planning application, and so I do not see why a developer who has made an application should be favoured over one who has perhaps been more restrained and has not got round to making it.
I would submit that the better cut-off point in the planning chain would not be the moment at which planning permission is applied for, but the date on which, in accordance with Section 169 (1) of the Town and Country Planning Act 1971, the Secretary of State has refused the application or granted it subject to conditions. It is only on that later date that the speculator has acquired any rights to compensation. If the Bill is amended to provide for this later date to apply, Parliament will not have confiscated any actual vested right. It is true that the developer will have incurred expense, but I do not think that it will be difficult to provide that the developer should be reimbursed his direct expense in getting to the stage of having his schemes turned down by the Secretary of State.
Like the noble Viscount, Lord Craigavon, I also detected that the door is definitely ajar as regards the 10 per cent. point. I consider it very important indeed that the provisions of Clause 1(2) should relate not just to additional flats put on top of buildings, but also to increases in the size of existing flats. I would ask my noble friend whether Clause 1(2) is intended to deal also with buildings that are used not as blocks of flats but possibly as private hotels or as boarding or lodging houses. It seems to me that these types of houses should be brought within the provisions of the Bill. I have some doubt as to whether they necessarily qualify as dwellings. With that, I indicate my strong support for the Bill and wish it a good Second Reading.
11.42 p.m.
Baroness Gardner of Parkes: My Lords, I support the Bill, and have been asked to do so by the London Boroughs Association. From my own personal knowledge of living in the centre of London, I have seen these applications and these changes in the skyline as blocks of flats have acquired a new top floor. I know the problems that have been caused for local residents. Indeed, these permissions have almost always been granted on the grounds that it would be too expensive for the council to refuse them.
For some years I served on the Historic Buildings Committee of the Greater London Council. We frequently came across the problem to which the noble Lord, Lord Montagu, has referred. One house in a nice terrace of listed buildings would apply for a roof change or roof extension that could upset the whole harmony. I remember that, at that time, the officers were very reluctant to let the word get around that if the application was refused compensation could be sought. They feared that many people who had no need or who had not intended to extend their property would apply purely for the compensation. Conservation areas are particularly important. I should like to see that point taken into account.
I do not know that I agree with the noble Lord, Lord Montagu, as regards low-level rear extensions. We must bear in mind at all times that in many cases people living in the centre of London today have young families and need additional space. If the time comes when we force all our local people out of houses which end up simply as pieds-à-terre for foreigners in the middle of London, it will be a shame. There has to be a compromise point. But the Bill does not prevent the local authority or the listed building authority granting permission in a sympathetic case. The Bill is simply to deal with the financial abuse whereby people take advantage of the scheme and cash in on it.
The London Boroughs Association points out what it considers to be defects in the Bill. As I shall be abroad at the time of the Committee stage, I should like briefly to mention them. It considers that it is inequitable that compensation should be payable by a local planning authority when, at the same time, a situation could exist in which a residential property value has been enhanced by the making of a direction. The planning policy behind making directions would be nullified if, because of the risk of high compensation, the planning permission were then granted.
It believes that central London is affected very adversely, and it hopes that an amendment to the Bill will be brought forward providing a new Clause 1(2). I place this on record tonight so that the Minister will be able to think about it. It would say that no compensation claim under Section 165 may arise with regard to any development rights in respect of residential premises curtailed by the issue of a direction under a development order. That refers to Section 165. The association is also unhappy about Section 169, and thinks it does not go far enough.
Many speakers tonight have made the point that 10 per cent. of an individual flat is quite different from 10 per cent. of a total block. I think that it might be fairer—this is a personal point, my own view, and is
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not put forward by the London Boroughs Association—to have 10 per cent. of an individual flat or so many cubic feet, in the way that now applies to dwelling-houses; because 10 per cent. of some flats might be a very tiny space and not enough to improve people's living conditions.
The London Boroughs Association says that the Bill does not deal with unneighbourly development. I am very worried by the suggestion that unneighbourliness should be a big feature in planning. In the past year I have built a house in central London. It was actually a case of rebuilding, because the house disintegrated and had to be demolished and rebuilt. When I applied for planning permission, naturally my neighbours all objected. Some had good grounds and others had very spurious grounds, or very doubtful ones. This was particularly so in the case of the lady who objected on the grounds that if I had a window looking out I might see her going up and down her stairs without her clothes on, as was her constant habit. I found that a very poor reason for my not being allowed to have a window in the back of my house. I might add that that lady has now left the area.
However, a short time later, when I had my permission and my house was under way and being constructed, I received notification of developments that would be looking out on me. The man in the house behind me wanted to put in new windows looking into my garden. My instant reaction was a defensive one, in the same way as the other lady's reaction to me had been defensive. I said to my husband, "We cannot have a new window looking into our garden". My husband's reply was, "Of course we can. We are all living in such close proximity here already that if we cannot develop a tolerance for our neighbours and an acceptance that everyone has the right to a window, we are going to be just as bad as that other person was to us". We made no objection, and the window is there. The people concerned use the room a great deal and cause no bother or inconvenience at all to us.
I find the anxiety on the part of the London Boroughs Association that there should be some coverage about neighbourliness or unneighbourliness, in terms of planning and compensation, a perhaps slightly worrying concept, because neighbourliness is always something you think about if you are the person who is going to be affected adversely. No one stops to think about it on the other side. If you are the one who is wanting a little extra living space to enable your family to remain in a much-loved home, your attitude is quite different.
I should like to bring in another point on this issue. I know areas in central London where lovely listed squares can be affected adversely by changes in their roof line because those squares were built before the 1948 date. Near them, modern houses built after that date—say, in 1950, or up to 1960—do not have the right as a permitted development (I think this is correct) to carry out the same changes in their building. It seems to me that there are at the moment a lot of anomalies between listed buildings and newer buildings, and perhaps there will be an opportunity to look at those.

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I have mentioned the fact that I should like a certain size, and that is certainly something about which the London Boroughs Association is most concerned. That association wants the limitation set at 10 per cent., of a particular flat. As a personal addition, I would add "or a certain dimension, whichever is the more suitable". However, we must realise that this Bill does not in any way prevent a local authority from granting planning permission; it is simply a financial measure to ensure that people do not cash in on existing provisions.
11.50 p.m.
Lord Graham of Edmonton: My Lords, I join in the general welcome that has been given by everyone to the useful measure that is before us. Certainly there will be no opposition from these Benches to the Second Reading of this Bill. This is one of those occasions when I would certainly want to express my appreciation to the Minister present this evening and to his ministerial colleagues. I have in mind, in particular, Mr. Neil Macfarlane in another place. I, like all noble Lords when matters are debated in another place before they come here, read the Hansard of the other place. I have spoken to my colleague Mr. David Clark who handles these matters there, and he has shown me correpondence that has taken place since the Committee stage in that place. I want the Minister to understand how deeply I appreciate the care and concern of his ministerial colleague Mr. Neil Macfarlane who quite clearly is very sympathetic to the general concern that has given rise to the amendments. If I am correct, I think that he referred to them in the other House as minor and technical amendments. Nevertheless, they are important and significant.
I am always impressed by the assiduousness with which local authorities draw to the attention of Members in both places matters to which I certainly had not given any thought. However, when one is told of them one appreciates that they are very important and we ought not to lose the opportunity to raise them. The Minister must take on board tonight that there are a number of people who, in genuinely seeking to protect the interests of those who they have the responsibliity to serve, see this not as the last opportunity, but as an opportunity to try to urge the Minister to make the Bill do more than it actually does.
I wish to try to avoid going over the ground and the explanations which have been excellently given by the Minister, and which have been pointed up by other colleagues here. Certainly the Minister and his colleagues were right to appreciate the significance of the Peaktop experience in 1983. Personally, I should have thought that it must have come as a shock. Nevertheless, once it happened one can immediately see the significance. The Minister has drawn attention tonight to the way in which a seminar was held, which was advertised quite frankly. People were told that, if they did not know that there was something they could get away with, they were on a winner both ways—they either got their permission, which enhanced the value, or, if they did not, they got somebody's money, be it the taxpayers' or the ratepayers' money. They had
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nothing to lose. I believe that the noble Baroness, Lady Gardner of Parkes, also pointed up this matter.
I am aware of the point concerning the London Boroughs Association, which is absolutely fair, and also the point concerning the Royal Borough of Kensington and Chelsea and the London Borough of Haringey—which is not very far away from either the noble Baroness, Lady Gardner of Parkes, or myself. They used as an illustration the correspondence of the London Boroughs Association and the correspondence of the borough of Kensington and Chelsea. They also illustrated that in the London Borough of Haringey there were some very unhappy possibilities. One of the problems is that people are referring to what is likely to happen without being able to be specific. There is a fear that the situation will snowball. The Minister gave us one or two illustrations of how it could grow and grow. Of course there could be absolute catastrophic consequences for a borough which had tried to follow the right course of action from a planning point of view. It could find itself in a dreadful situation.
One of the authorities that have been in touch with me is the AMA and in connection with Section 169 dealing with planning permission matters (one of the illustrations to which I am referring) it says:
"One London borough obtained Counsel's Opinion that liability to compensation is a material consideration in considering a planning application under Section 29 of the Town and Country Planning Act 1971 and that it is a consideration which must be weighed by the Council against any planning objections which may arise on a particular development".
The noble Baroness, Lady Gardner of Parkes, mentioned that. As an ex-chairman of a planning committee, I can see a planning officer quite properly telling the committee and the town clerk that before they decide to refuse this application they must take into account the financial consequences. That is their job. The chairmen of planning committees must be faced with a terrible dilemma if, in trying to do the right thing by the built environment they land the ratepayers with a big bill.
Perhaps I could quote in aid the areas of outstanding natural beauty. I am grateful that the noble Lord, Lord Skelmersdale, is in his place because we had a very useful exchange over the Prussa Cove/Higher Kenegie problems which arose out of the manner by which it was possible, despite an area being designated an area of outstanding natural beauty, for people to exercise their rights, or attempt to exercise their rights, and yet act contrary to the spirit of the area of outstanding natural beauty.
The case I want to cite was brought to me by Lancaster City Council. I have seen some photographs of the development here. Again, the noble Baroness, Lady Gardner of Parkes, said that we should live and let live for the sake of good neighbourliness. I have here photographs of someone's house which has had built next to it five black polythene tunnels in which mushrooms are growing. We all know how mushrooms are grown; they are kept in the dark and covered with fertiliser.
Let me briefly illustrate the dilemma facing Lancaster. In 1984 the owner made a planning application for permission to erect buildings of 15,000 square feet to produce large quantities of compost for

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use on sites elsewhere. Permission was refused. Strong local representations were made against the proposal. The county council regarded it as being contrary to structure plan policies aimed at protecting the AONB. Amenity organisations also made representations.
However, following refusal of permission, the owner commenced work on five different sites. One of these is an extension to the existing steel-framed building and is to be used for the filling of trays with compost. The remainder are for blocks of growing sheds. These are semi-circular "tunnels" of black plastic 2.5 metres high and 17 metres long, each set in blocks of five.
Then we come to implications. The Article 4 direction has been confirmed by the Secretary of State. It has the effect of requiring development which could otherwise have been undertaken as "agricultural permitted development" to be the subject of a planning application. However, any refusal of planning permission or requirements imposed through planning conditions will then potentially involve the payment to the owner of compensation by the city council. It will not have any effect upon the buildings already under construction.
The compensation to be claimed—in response to action following an Article 4 direction or a discontinuance order—may be on the basis of disturbance to the business, including loss of profits. The sum involved may therefore he quite substantial.
As an ex-chairman of a planning committee, I can see myself agonising not just over the aggravation. I believe the noble Lord, Lord Montagu, pointed out how a planning committee which decided to allow the development, because it was looking after the ratepayers' interests, would be in trouble with the general residents because it had granted planning permission. In other words, we have a series of anomalies. I fully support almost everything that has been said, particularly the remarks of the noble Lord, Lord Montagu, who made a good case about Article 4 directions. I agree with him that the Bill ought to put Article 4 directions on the same footing as changes in a development order. Where an Article 4 direction is made by a local authority, claims for compensation by owners ought to be limited to one year from the directions coming into force.
There have been a number of points made. The Minister needs to take it on board that we are happy that this Bill be given a Second Reading because it puts some things right. We shall not be party to any action which delays the passage of this Bill. We want the Bill to be passed because it puts right some anomalies. But between now and Committee stage, when amendments may be put down and debated, the Minister should think seriously, and I noted with appreciation that he indicated some amelioration that will come. When we see the words, they may be satisfactory to a large extent. But there are other matters which have been raised that the Minister ought to look at carefully to see whether it is possible to have the minimum number of amendments. I think in terms of the allusions made by Mr. Neil Macfarlane and the Minister himself; and I believe that the noble Lord, Lord Sandford, alluded to the possibility that something may be said about the prospect of including some matters in other legislation as a better
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opportunity to put right some of the things we are talking about.
Before I sit down, may I refer to the absence of my noble friend Lady Birk? As the House knows, she takes a deep interest in these matters. She is not able to be here this evening, but certainly she will be here at the Committee stage and will want to take a full part in it. We on these Benches welcome the initiative of the Minister in trying to put right (and I believe he has substantially put right) many things that are wrong. But when it comes to the question of the 10 per cent. we support its application not merely to the building of the flats but to the extension of the buildings as well. We look forward to some helpful words from the Minister now, and we want to help him to make sure that this is a better Bill when it finally leaves this House.
12.3 a.m.
The Earl of Avon: My Lords, I am grateful to all Members of the House for their generous welcome of this Bill. I assure the speakers tonight that I have no intention of keeping anybody in the dark, or, indeed, of covering anything in fertiliser! I look forward to the discussion of a number of issues at Committee stage. If tonight I find that I have not covered any particular factual points, I shall write. The noble Viscount, Lord Craigavon, in his short speech, asked whether we would look at the retrospective point. We are considering the amendment, and we shall be doing exactly that. At the moment it is in course of discussion with my colleagues to see what we can do about it. I am sympathetic to the noble Viscount's point.
The noble Lord, Lord Lloyd of Kilgerran, spoke about the landowners. The amendments to the GDOs are widely publicised, particularly in the technical press. If the landowner has a scheme in hand which is dependent on a GDO permission and the GDO is then amended to take the permission away, I find it inconceivable that the landowner will not hear about this for 12 months. If he has no intention of using his GDO rights and is ignorant of their existence, I accept that he may not learn about an amendment to a GDO quite so quickly, but in this event why should he get any compensation? He has, after all, not suffered any real loss.
On the noble Lord's more specific point about the Isle of Wight, at the moment I do not believe that any compensation will be payable under Section 169, but I shall certainly look into this again. The noble Lord asked a little about the farming industry. It is suggested that the farming industry works on a basis of five-year development plans, and would therefore be prejudiced by the 12-month cut-off period in respect of compensation under Section 165.
I should have thought that a farmer in the middle of such a plan would be able to get his planning application in within 12 months of a GDO amendment. If permission was then refused, he would retain his compensation rights. If it were granted, he would have a further five years to carry out the development. Moreover, as I pointed out in my speech, GDO amendments are not normally made out of the blue. If there is a problem, nevertheless it seems preferable to

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tackle it by giving extra notice of the GDO amendment. That is by deferring its operation date rather than by increasing the 12 month period, and opening up scope for abuse in respect of changes relating to development with a much shorter lead time.
My noble friend Lord Montagu was kind enough to give me advance notice of what he was proposing to say this evening and this enables me to give a considered reply to his points. First I should say that I fully share his concern about the architectural heritage, but there is one point that we should bear in mind at the outset. In the case of buildings which are listed as being of architectural or historical interest, any alteration to the building requires listed building consent as well as planning permission. Listed building consent can be refused without creating a compensation liability under either Section 165 or Section 169 of the 1971 Act.
I recognise that this still leaves the important question of extensions to buildings which are not themselves listed but which contribute to the character of a conservation area. My noble friend has made two requests. First, that the extension of any building in a conservation area—his specific example was a building used as offices—shall not attract compensation under Section 169. In this Bill we have to balance planning considerations with property rights. As I said in opening this debate, we have felt justified in acting against extensions to flats because the provisions of Section 169 are clearly being abused. In the case of extensions to other buildings such as offices, we have no evidence of abuse—indeed we know that the property world regard Section 169 as of considerable importance in relation to perfectly legitimate office improvement schemes. We are not dealing with outdated rights which can simply be taken away without doing any harm—we are dealing with a very specific abuse. It may be difficult to meet my noble friend on this point.
However, he also raised a point in relation to Section 165. He argued that a "long standing article 4 direction" should be treated in the same way for compensation purposes as a revocation or modification of a development order, and the 12 month time limit should be imposed. Most article 4 directions are directed against a specific development proposal which is already in hand, and in such cases the imposition of a 12 month time limit is likely to have no practical effect. But if there are long standing article 4 directions, made to give general protection to conservation areas rather than in response to a specific development proposal, then there may well be a case for doing what my noble friend suggests. We will doubtless have an opportunity to consider this further during the Committee stage.
My noble friend Lord Sandford asked if any amendment would cover Scotland. Yes it will, though that will depend on the drafting of the amendment of course. If landscape area special development orders give rise to compensation under Section 165, the 12 mnth cut off period in the Bill will apply. The third point that he raised was that compensation arises not from the amendment of the GDO but from a subsequent refusal of planning permission by the local
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planning authority. The 1971 Act provides for such compensation to be paid by the local authority and we see no justification for central Government to pick up this particular bill.
My noble friend Lord Coleraine spoke about retrospection. This is indeed a delicate arm. We think that Clause 3 gets it right. We do not at the moment have an amendment in mind. The 10 per cent. extension point I believe I have already covered in my remarks. The Bill does apply to the current abuse regarding flats, as indeed I mentioned.
I accept that some planning authorities will have rooftop flat applications already before them. Where the landowner has already done his part of submitting the application I believe that it would be wrong to take away his right to compensation retrospectively. Moreover, this could mean that authorities who had delayed giving a decision on such applications would escape a compensation liability while those who had determined such application promptly would be at risk. This, I believe, would not be right.
My noble friend Lady Gardner of Parkes put forward very strongly, I thought, the case which she said the LBA had asked her to make. On point one, I think we have discussed this already. On point two, I thought that she herself argued against it and then rather tore it up. However, on argument three, I would again agree with her totally. The noble Baroness asked about listed buildings. The refusal of listed building consent does not attract compensation.
I should like to thank the noble Lord, Lord Graham, particularly for his kind remarks about my honourable friend Mr. Neil Macfarlane. He also introduced the subject of Haringey, for which I have sympathy. He mentioned the subject of mushrooms. As I believe he will recall, we went out to consultation last year on a number of proposals for amendment to the order, including proposals to amend Clause 6 in respect of livestock buildings. We are now considering very carefully the important issues raised by the response to our consulatation paper. I am delighted to hear that the noble Baroness, Lady Birk, may be back in the fray on the Committee stage of the Bill.
Lord Graham of Edmonton: My Lords, she will be back.
The Earl of Avon: My Lords, when I say "in the fray", of course I know we are all in such harmony that I look forward to a very charming Committee stage. I think that what I can suggest to the Committee is that it is necessary here to keep a balance all the time. It is one of those occasions where we have to try to make sure that all the interests are looked after. I shall read Hansard with care and see to what extent we can help as a Government. I beg to move that this Bill be read a second time.
On Question, Bill read a seond time, and committed to a Committee of the Whole House.
House adjourned at twelve minutes past midnight.