Lords Sitting of 5 March 1986

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

HOTOL: Development Plans
Lord Campbell of Croy: 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 contributions they are making to research into a horizontal take-off space vehicle intended for intercontinental travel.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, Her Majesty's Government recently announced agreement to join industry in funding work on a pre-feasibility study on HOTOL, a single stage into orbit horizontal take-off vehicle. Initially this is intended to be an unmanned space satellite launch vehicle, but industry's proposals include man-rating for intercontinental travel at a later stage.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that information. Can he give any estimate of when approximately the vehicle is likely to come into service? Is it to be used by commercial airlines, if it does move towards passenger service?
Lord Lucas of Chilworth: My Lords, this particular phase—the pre-feasibility study—will take two to three years. If there is further progress then that will probably take another seven years. Therefore one is perhaps looking towards the end of this century or the beginning of the next century before one sees effective use made of it.
Lord Bruce of Donington: My Lords, is the Minister aware that if his reply to his noble friend may be taken as indicating that Her Majesty's Government are willing to make a contribution towards the project, then it is to be very much welcomed?
However, is it not the case that the Government are in a very embarrassing position in respect of that project? In the first place, when the appropriate industries were privatised it was to free them from the necessity of Government finance. Secondly, how can it be expected that private finance will be available for the project when, without any risk at all, money can be invested in industries that are being denationalised at a very low price?
Lord Lucas of Chilworth: My Lords, Her Majesty's Government are in no embarrassing position whatsoever. It is the Government's policy to support innovation in industry, and that is what is being done
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at this pre-feasibility stage. We hope that industry will make sufficient progress to bring opportunities for collaboration with other partners. We hope very much that the British Government will be involved in future collaboration.
Lord Elwyn-Jones: My Lords, can the noble Lord say in which part of the next century we may hope to see the developments that he was indicating? Some of us, alas, may not be there to witness them.
Lord Lucas of Chilworth: My Lords, I am sufficiently optimistic about industry's endeavours in this matter and indeed about the longevity of the noble and learned Lord, Lord Elwyn-Jones, to assure him that he is likely to see much progress.
Lord Campbell of Croy: My Lords, can my noble friend, to reassure some of us, tell the House whether it will be possible for early warning systems in every part of the world to have a built-in and reliable method of identification, to make certain that such vehicles are correctly identified and are not mistaken for missiles?
Lord Lucas of Chilworth: My Lords, that is a very interesting point and I shall draw it to the attention of my right honourable friends. I am sure that my noble friend will recognise that we are at this time at a very early stage of development.

Arms Industries: Debtor Countries
2.40 p.m.
Lord Kennet: 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 consider that the development of large-scale arms industries in debtor countries such as Brazil and Argentina, with the approval of the IMF, has any implications for world stability.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we recognise the right of all countries to decide their own policy on arms production and procurement. Neither we nor the International Monetary Fund are in a position to dictate to a country its political priorities. At the same time, we welcomed the suggestion contained in the United Nations Study on Conventional Disarmament that negotiations be held between suppliers and recipient nations on the possible bases for agreements to restrain the transfer of arms, perhaps initially on a regional basis.
Lord Kennet: My Lords, will the Government do what they can to bridge the two parts of that Answer, to persuade the IMF to use its undoubted influence over the way in which recipient governments spend their moneys to that end? Is it not the case that of all the things that developing countries can do in order to try to reduce their debt by manufacturing and selling abroad, the manufacture of arms is the only one that is intrinsically destabilising and that destroys rather than creates wealth?
Baroness Young: My Lords, one has to be clear about the functions of the International Monetary Fund, which provides short-term balance of payments support. It does not specify particular uses of loans. Indeed, the conditions that are attached to loans are aimed at restoring the position of borrowers' balances of payments and their long-term economic growth.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness explain to the House what precisely is the policy of Her Majesty's Government on this issue? Do the Government approve of the sale of arms to countries whose economic affairs are in a complete shambles? Is a country's economic situation taken into account before the Government approve the sale of armaments to that country? Secondly, will the Minister say what system exists to monitor the sales of arms to other countries?
Baroness Young: My Lords, the position of the Government on the question of arms sales is that we consider each circumstance on a case-by-case basis wherever it may be; but we do not agree to the sale of any equipment which in our judgment is likely to be used for internal repression or in order to violate human rights.
Lord Williams of Elvel: My Lords, can the noble Baroness tell us how Brazil and Argentina, in those two cases, are going to pay for the arms, given their present financial situation?
Baroness Young: My Lords, I think this is a supplementary which is quite wide of the Question, which is really concerned with the development of the armaments industries within the countries themselves. But perhaps I may add for the noble Lord that Article 51 of the United Nations Charter stresses that independent states have the inherent right of individual or collective self-defence.
Lord Barnett: My Lords, surely even the Foreign Office must have some concern for the second half of the Question; namely, world stability? Does not even the Foreign Office have some discussion with the Treasury about the dangers to world stability, the effect on the banking systems of countries like these in the developing world and the effect on the banks in the Western world? Therefore, can the noble Baroness answer the second half of the Question about the Government's policy in relation to the implications to world stability?
Baroness Young: My Lords, as I have already indicated, all aspects of a debtor's economic performance are considered in debt negotiations. Of course, I recognise that the second half of the original Question is concerned with the very wide issue of world stability. Naturally the Government are concerned about peace in the world, which is a very large question; but as I have already indicated, it is an inherent right of any country to develop armaments for their own defence and security.

Space-based Ballistic Missile Defence
2.44 p.m.
Lord Kennet: My Lords, I had given notice of my intention to ask, as the second Question standing in my name on the Order Paper, the following:
To ask Her Majesty's Government whether they consider that the refusal by the Government of the USA to discuss space-based ballistic missile defence at Geneva is consistent with the aim, declared jointly by the USA and the Soviet Union, of preventing an arms race in space.
May I point out to the House, however, that there is a mistake in the wording of the Question, which is my fault and for which I apologise. Instead of referring to,
"the refusal … of the USA to discuss space-based ballistic missile defence at Geneva",
the Question should have spoken of,
"the refusal … of the USA to discuss restrictions on space-based ballistic missile defence".
Baroness Young: My Lords, the objective of the Geneva talks between the United States and the Soviet Union is to:
"work out effective agreements aimed at preventing an arms race in space and terminating it on earth, at limiting and reducing nuclear arms, and at strengthening strategic stability".
The communique issued after the talks between Secretary Shultz and Mr. Gromyko in January 1985 made clear that the complex of questions concerning space and nuclear arms would be considered and resolved in their inter-relationship. President Reagan has now put forward further proposals to this end. They have our full support. We hope the Soviet Union will now allow rapid progress in the talks.
Lord Kennet: My Lords, what is the purpose of the talks? Is it, or is it not, to restrict space-based strategic missile defence? If it is not to restrict space-based strategic missile defence, what is the point of discussing it? If it is to restrict it, what are the American proposals to restrict it, given their well-known insistence on blinding ahead with star wars?
Baroness Young: My Lords, President Reagan has responded to the proposals that have been made by Mr. Gorbachev and there has been close consultation about this response which has our full support. It is a practical step-by-step approach and we hope that the Soviet Union will now match its words with deeds and allow rapid progress, not just of the bilateral, nuclear and space talks at Geneva, but also of the multilateral negotiations at Stockholm, Vienna and Geneva on conventional and chemical arms control.
Lord Gladwyn: My Lords, can the noble Baroness tell the House what is the exact position regarding the discussions, or otherwise, at Geneva of ASAT—that is to say, anti-satellite activities—and the possibility that each side might shoot down the other's satellites? That is a very important aspect. What is the position? Is it being discussed?
Baroness Young: My Lords, on the question of anti-satellite weapons, we have welcomed President

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Reagan's confirmation on 20th August 1985 that the United States is endeavouring, in good faith, to negotiate with the Soviet Union a mutual and verifiable agreement, with the strictest possible limitations on anti-satellite weapons consistent with the national security interest of the United States. We should recall that, unlike the Americans, the Russians possess a deployed ASAT system.
The Lord Bishop of Birmingham: My Lords, the noble Baroness tells us that the talks in Geneva have the full support of Her Majesty' Government. Can she also tell us whether Her Majesty's Government have any reservations at all about the money being spent on SDI in preventing a nuclear arms race in space?
Baroness Young: My Lords, the position of the Government on SDI is based on the four points which were set out following on the agreement between my right honourable friend the Prime Minister and President Reagan in December 1984. As the right reverend Prelate will know, we have agreed to take part in the research on SDI.
Lord Gladwyn: My Lords, do I understand from the noble Baroness that ASAT is now being discussed at Geneva?
Baroness Young: My Lords, I have quoted from the communication precisely what President Reagan said. The talks that are going on at Geneva cover a whole range of these space weapons.
Lord Jenkins of Putney: My Lords, does the noble Baroness appreciate that in following these exchanges it is very difficult to discover whether the Government agree or do not agree that there has been a refusal by the American Government to discuss space-based nuclear weapons? Could the noble Baroness at least clarify that point? Do the Government agree that the Americans have refused to discuss these matters in the sense that the Question poses?
Baroness Young: My Lords, the Russians have made much use in public of the statement that a condition of progress at Geneva is the abandonment by the United States of SDI. In practice this has not prevented the Russians from putting forward specific proposals, both in September 1985 and subsequently on 15th January this year. We believe that the immediate priority is the reduction by each side of offensive weapons, and we hope now that the Soviet Union will allow rapid progress to be made in the Geneva talks.
Lord Cledwyn of Penrhos: My Lords, may I refer to the Memorandum of Understanding which was signed recently? Can the noble Baroness say whether details of this memorandum are to be published by Her Majesty's Government? Can she also say how many contracts have resulted from this memorandum, and what are the value of the contracts?
Baroness Young: My Lords, without notice I could not give the noble Lord an answer to the second part of his question. If he would put down a Question on
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that point I should be happy to answer it. So far as concerns the number of contracts, two have been signed since the MoU, one with Heriot-Watt University and one with Ferranti.
Lord Kennet: My Lords, the Minister of State has mentioned the operational Soviet ASAT system. Will she confirm to the House that 20 years ago the United States had an operational ASAT system and that no doubt this had some influence in causing the Soviet Union to decide to have one, too?
Baroness Young: My Lords, I was stating a fact about the Soviet operational ASAT system which I think is relevant to the whole discussion of this matter.
Lord Cledwyn of Penrhos: My Lords, I am very grateful to the noble Baroness for the information she has given about contracts. Could she say a little more about the contracts with Herriot-Watt University and with Ferranti? What is the nature of the contracts and what employment will flow from them?
Baroness Young: My Lords, the contracts concern optical computing. Again, I am afraid I cannot give the noble Lord an answer on the precise number of jobs that would be involved.

Share Dealing: Investor Protection
2.43 p.m.
Lord Pender: 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, in view of the effect of their privatisation policy in increasing the number of shareholders, whether they will encourage the Stock Exchange to make share dealing easier for the individual.
Lord Lucas of Chilworth: My Lords, Her Majesty's Government believe in a property-owning democracy in the widest sense. Ownership of shares is an effective mechanism available to spread ownership of economic activities and the rewards of economic success; hence the Government's privatisation programme, and the special measures they have taken, in pursuing it, to favour employees and small investors. The members of the Stock Exchange have a crucial part to play in the process of spreading share ownership.
Lord Pender: My Lords, I thank my noble friend the Minister for that reply. Would he consider that there is an urgent need to simplify the mechanism of share transactions in order to dispel the reservations of potential investors? Can the noble Lord state the precise number of individual shareholders in the United Kingdom compared with the total in 1979?
Lord Lucas of Chilworth: My Lords, the other place is currently considering legislation, through the Financial Services Bill, and also the Building Societies Bill, both of which are in part designed to strengthen investor protection and knowledge and thereby to

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reduce one possible cause of hesitation to invest in shares. I think that there is an acknowledgment that members of the Stock Exchange are perceived as unapproachable. I think that is a psychological barrier which needs to be broken down, but the remedy is very much in their own hands. As regards the second part of my noble friend's supplementary question, there are no precise comparative figures available, but we believe that ownership of listed stocks has approximately doubled since 1979.
Lord Bruce of Donington: My Lords, is the noble Lord aware that his honourable friend in another place and his department have supplied an answer to his noble friend, in that the estimated number of shareholders in the United Kingdom is 2,700,000? Is the noble Lord further aware that that number has not been altered perceptibly by the Government's process of privatisation, in that large numbers of people have taken advantage of the bull market and realised a profit, as was indicated in the Economist on 21st February last—and perhaps the noble Lord would look at that issue? If the noble Lord wants to ease the way in which one obtains shares, will he take note of the fact that the easiest way of acquiring shares is to have the money to acquire them, when it becomes quite simple, and that over 60 per cent. of the population do not have the resources to buy shares at this time, because the rich are getting richer and the poor are getting poorer?
Lord Lucas of Chilworth: My Lords, the noble Lord, Lord Bruce of Donington, reminds me of what my honourable friend said in another place. I know what my honourable friend said in another place, and the 2 million-plus figure that he mentioned represents 28 per cent. of listed equities directly owned by individuals, which is a reversal of the position that obtained in the 1950s. As regards the owners of shares selling in a bull market, that is exactly what the marketplace is about. I do not know why the noble Lord should mention it in such a condemnatory manner. However, in relation to his last point, I think it is interesting to appreciate that of the 2,130,000 applicants for BT shares there are today 1,650,000 of the original shareholders, and they represent some of the people who are not normally known to be dealing in shares and who have small stakes, which I think knocks on the head the inference contained in the noble Lord's last point.
Baroness Fisher of Rednal: My Lords, in such a property-owning democracy would the noble Lord consider the bid from the British Leyland consortium and allow that also to be a participant in the business which it has set up? I refer not only to the management but also to the employees in that organisation.
Lord Lucas of Chilworth: My Lords, I think that I have made it quite clear on a number of occasions that the Government welcome the participation of management and workers in all of industry, as they encourage wider share ownership throughout industry.
Lord Glenamara: My Lords, if the Government want the wider ownership of shares, does the noble
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Lord think that the noble Lord, Lord Pender, is on to a very important point? He asked whether the dealing in shares—and perhaps I may add the cost of dealing in shares—should be simplified.
Lord Lucas of Chilworth: My Lords, of course my noble friend is concerned in this matter, which is indeed why he put down his Question. I believe that my original Answer, and indeed my answer to my noble friend's supplementary question, explain some of the measures which the Government have taken. To elaborate, perhaps I may add that over the years we have taken a number of very important fiscal measures—for example, the abolition of the investment surcharge in the Finance Act 1984; the continued uplifting of the capital gains tax threshold; the indexation provisions; the business expansion scheme through the Finance Act 1983 and the stamp duty reduction to 1 per cent. All of these measures have made the ownership of shares easier in both a financial and a mechanical manner.
Lord Morris: My Lords, is my noble friend aware that the simplest way to encourage further share ownership is to do everything to foster the correct environment for brokers to open local offices rather than insisting that their clients come to London?
Lord Lucas of Chilworth: My Lords, I agree with my noble friend. He will appreciate that a number of members of the Stock Exchange have changed the method by which they sell and deal. There is a growth in out-of-London membership and an increase in the number of what I might call share shops in departmental stores being opened by some of the leading stockbroking companies. One anticipates that the practice will gather momentum
Lord Kinnaird: My Lords, is my noble friend aware that it may not be wise to make share dealing too simple? Anyone who has been in the Stock Exchange—I was in it for 25 years—will know full well that it is far easier to lose money than to make it.
Lord Lucas of Chilworth: My Lords, I have a lot of sympathy for my noble friend. I think that the provisions in the financial services legislation on advising potential buyers will undoubtedly underline the losses as well as the profits that may accrue through dealing in shares.
Lord Mackie of Benshie: My Lords, is it not extraordinary that in spite of all the steps that the Minister has so triumphantly delineated the country continues to decline in the export of manufactured goods?
Lord Lucas of Chilworth: My Lords, the country is not declining in the export of manufactured goods. Total exports of manufactured goods in 1984–85 are at a record high and they are growing month by month.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Lucas of Chilworth will, with the leave of the House, repeat

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a Statement that is to be made in another place on BL. That will be followed by my noble friend Lord Elton who, again with the leave of the House, will repeat a Statement on the rate support grant 1986–87: grants recycling.
Also with the leave of the House, I should like to say a word about the two short debates standing in the names of the noble Lords, Lord Allen of Abbeydale and Lord Annan. As the mover is customarily allowed approximately 15 minutes and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of the short debate in the name of the noble Lord, Lord Allen of Abbeydale, all other speeches should be limited to a maximum of eight minutes, and in the case of the short debate standing in the name of the noble Lord, Lord Annan, 10 minutes. If any noble Lord should speak at greater length he would be doing so at the expense of subsequent speakers in that debate.

Charity Law
3.3 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale rose to call attention to the operation of the law relating to charities, and in particular the responsibilities of the Charity Commission; and to move for Papers.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper.
I think that I should begin by declaring an interest, in that I am a trustee of one or two charities, but it is certainly not a financial one. I should like at the outset to thank all those who have put down their names to speak. There are some 150,000 registered charities in England and Wales which among them receive from the public hundreds of millions of pounds. We are fortunate to have such a wealth of charitable effort, which is recognised by the state in the way of various tax concessions and exemptions, including improvements made by the present Government in regard to covenants and charitable gifts. But Mr. Bob Geldof has shown that there is still a great deal more money which could be found for the right objects.
I originally had it in mind to make a plea today for introducing a provision whereby charitable contributions would be made tax deductible; but then what happened? On 19th February The Times and the Telegraph both came out with the story that that was just what the Chancellor was proposing to do. With my background, I should naturally never suspect that information was disclosed about a Budget intention, but there was such a wealth of corroborative detail that it will be disappointing if nothing on those lines is announced later this month.
Will it be, I wonder, in the simple form of charities being able to recover tax as if all their donors were basic rate taxpayers? Will there be a maximum or a minimum? Will covenants continue?—please. Will the concession, disappointingly, be limited in the first place to companies, as has been suggested by one correspondent who writes as though he is privy to the Chancellor's innermost thinking? I realise that the noble Lord the Minister, when he speaks, will not be able to say much on the issue today and that we can
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only wait and see and hope. But I must strike one note of warning. It would not be well received if greater generosity to charities were accompanied by a drawing back of the concern of government with social problems on the argument that the voluntary bodies would now be better equipped to take over. That would not do.
There is another financial aspect of great concern to charities—that is, liability to VAT. But I know that other noble Lords have it in mind to speak on that important topic.
Charity law has basically to do with protecting charitable trusts, but in practice it has come to take on this added role of providing the test against which fiscal benefits are judged. It is obviously very important that the sums which enjoy those benefits are not wasted and are not used for non-charitable purposes. I am led therefore to consider, first, the role of the Charity Commissioners, the chosen instrument for the supervision of charities, at any rate south of the Border; and, secondly, the law under which the Charity Commissioners operate.
Let me start with the Charity Commissioners. They have existed in their present form since the Charities Act 1960. They employ some 330 people and cost something like £5 million a year. They will be the very first to say that with their present resources they cannot do all that they would like to do, or anything near it. They register between 3,500 and 4,000 new charities each year. They advise trustees and help with legal schemes. They deal with abuses that come to their notice, and they keep a central register of charities. But, alas, the register is not nearly as informative or as up to date as is desirable, and so far as I am aware there is no immediate prospect of its being computerised. I gather that the commission has had enough trouble with the computer installed for the official custodian of charities.
Let us take accounts. Not all charities which should submit accounts do so, by a long chalk. Those that do come in may not be audited, and the commissioners can look at only a quite tiny number each year. If we look at the picture overall, credit must be given to the commissioners under their present chairman for doing their best, but complaints of serious delay persist and there is no getting away from the fact that the commissioners themselves see their role as purely reactive and they are simply not equipped to take initiatives. They are lacking in resources and it is not exactly comforting to hear rumours that the Treasury is seeking to cut down even that which they have.
Changes in the existing law might afford some slight relief. For example, charities with an income of not more than £15 a year are not required to register. That figure appears in the 1960 Act. If it could be amended and put up substantially, there could at least be a drastic reduction in the size of the register. There are one or two other candidates as well. But whatever was done, there would still remain the problems of charity law itself. It is to these that I now turn.
Charity law has rightly been described as a morass in which no government gladly tread. There is no statutory definition of a charity and the whole edifice rests on the preamble to an Elizabethan statute that has long since been repealed—a rather remarkable

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example of life after death—and a series of legal judgments, notably one of Lord Macnaghten in 1891, well before the welfare state. That judgment classified charities in the four categories of trusts for the relief of poverty, for the advancement of education, for the advancement of religion (I must say that we have a number of religions that Lord Macnaghten would never have thought of) and for other purposes beneficial to the community. This last category is so wide that under it it has been possible to keep up in some measure with new social developments, as, for example, the fairly recent decision of the Charity Commissioners to change their policy and to accept for registration charities opposing racial discrimination.
In deciding whether or not to register a charity, with all its financial benefits, the commissioners are not making moral judgments or seeking to approve or disapprove particular policies. Their function basically is judicial. It is not surprising that their decisions, from time to time, arouse some slight controversy among those with strong views about the objects of a particular body, as, for example, over the decision of the commissioners to register the Moonies. It is also not surprising that when it is a question of exercising a discretion, the way ahead for the applicant is not always crystal clear. In 1981, the commissioners put out guidelines on how far charities can go in the field of political activities and advocacy. But, to judge from the correspondence that I have been receiving, there is still ample room for argument in individual cases.
There are other topics such as unemployment and job creation where those seeking registration find themselves engaged in something of an obstacle race. Although the relief of poverty is charitable, the prevention of its occurrence, especially overseas, seems not to be. I could go on for quite a time. But no one, so far—there have been various attempts—has come up with convincing ideas as to how the boundary lines of what is and what is not charitable might be clarified and defined by Act of Parliament.
There are, however, a few other, rather more promising, candidates for legislation. Could the easing of the cy-près doctrine in our modest Charities Act last year point the way to some more fundamental change? Should power be taken to enable the commissioners to register a charity provisionally on a kind of probationary basis for a period of years? Should the provisions banning advertising on television be looked at? Should the trustee investment legislation be overhauled? And, since the development of charity law depends upon the decisions of the courts, and since the expense of going there has reduced cases to a trickle, should a suitors' fund be established to enable the important issues to be taken to the courts at public expense on the near analogy of the race and sex discrimination legislation?
With my eye on the clock, I realise that I have skated only lightly over some of the issues. I have had to leave out large chunks altogether. Indeed, to do justice to the subject would require a speech of Gorbachev dimensions. I hope, however, that I have said enough to show why I believe that all is not well. What can be done? Should the Government set up a wide-ranging Royal Commission? There is certainly a case for doing this, but I personally feel a bit dubious. It would take
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a long time, and my own rather bitter personal experience suggests that there would be no guarantee that the Government would even read the report when it was published.
Another possibility would be an unpretentious Bill dealing with some of the points that I have touched upon, perhaps after scrutiny by a Select Committee. We managed this last year, but I should be a shade surprised if the noble Lord, Lord Glenarthur, was encouraging about the prospects of finding a place for a reasonably early piece of legislation. Perhaps the most profitable and immediate course is to concentrate on the Charity Commissioners themselves. I hope that the noble Lord, when he speaks, will be able to reassure us to some extent about their resources. But, in addition, I would welcome his views on the possibility of calling in outside management consultants to advise on whether the available resources are being employed to the best advantage and to assess how extra resources might best be used. I hope that other ideas will emerge during the debate.
A great deal of money goes to charity with relief from taxation. A great deal more could go. It must be highly desirable to ensure, so far as is humanly possible, that this money is put to good use under provisions that take full and reasonably prompt account of changing social needs. I beg to move for Papers.
3.17 p.m.
Baroness Vickers: My Lords, all of us, I believe, would wish to thank the noble Lord for the excellent manner in which he opened the debate and for the information that he has given us. I wish to talk about one subject; that is, charity chests. These have been formed, and are being formed, in the United States, Canada, Australia, the West Indies, the Canal Zone, Cuba, Hong Kong, Singapore, Greece, Japan, Mexico and the Philippines. They were started originally in Denver, Colorado, nearly 100 years ago, in 1887. There are now 2,200 of them in Canada and the United States. They employ professional people who run them. They co-ordinate programmes and prevent duplication of services.
They were started—one has always to start in a small way—by canvassing from door to door. Nowadays most of the funds come from employee groups and from corporate gifts. I have personal experience of raising money, first, during the war, with the Red Cross penny-a-week fund which I ran for London. That brought in literally thousands a week. It was interesting to discover that Left-wing councils showed no wish to join until Mrs. Churchill introduced aid to Russia. We then received just as much money from those councils as we did from other people.
I also started social services in three states in Malaysia. Here, I was of course a civil servant. I had to think of ideas for raising money in these states to help add to the little money that I was receiving. A separate method had to be thought of for each one. In Negri Sembilan, mostly Chinese, who were gamblers, would come along and, given permission for a week to run a fair, they raised thousands of Malayan dollars. Other states had their own ways of raising money.

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One of the other aspects I have worked on was the Reader's Digest Panel. Many of your Lordships in this room will remember that remarkable man, George Haynes. He nominated me to go on this panel to help choose between the various voluntary organisations. We did that from 1972 to 1979. Now they have changed to another system and I therefore do not do that any more.
We also remember that the EC has a Social Fund which has proved very useful for many charities, particularly ones relating to young people. The only difficulty is that it is very slow in dealing with the projects. And one year they had as much as £200 million left over which they had not allocated.
I do not want these charity chests to be called "community" chests, because I think that "community" means something quite different from charity—it is far wider—and I should like to stick to the narrower definition. These will help a lot of the very small organisations which are now trying to get going. It is extremely expensive to start organisations. A PR person will want about £10,000 a year. I therefore think that it would be very much better if such organisations could get their information from a central area. I believe that there are a couple which are already considering doing something along those lines.
A number of people who have no family die without leaving a will. I have been going into the amounts of money they leave. The other day one such amount was £1.5 million. I should like to ask the Government—I shall probably not be very popular—if they would put this into the chests: that would be an excellent way of getting the money. I should like to follow what the noble Lord said on that, particularly about charity shops. Practically all the shops which are run sell second-hand goods. It seems very unfair that we should have to pay VAT on their sales.
I hope that the Charities Aid Foundation might be willing to help to sponsor a national charity chest which would amalgamate a collection of money, set up a panel of persons qualified to allocate the money, and so help to stop competition between various charities and lessen their overheads.
I am sure that all your Lordships have appeals coming in in great numbers, especially at Christmas time. There are generally one or two a week. If one lives in London one receives them in London; if one goes down to the country one finds another lot there waiting, and it is very distressing to have to refuse—or refuse a great number. As I mentioned, there are hundreds of trusts from whom we receive these letters. I think that a central organisation would obviate a great deal of this. I think a united funds payroll for community funds and staff charities might help in this situation. I should like to hear from any people interested in this suggestion. Perhaps they would like to give me any ideas on any form of co-operation.
To end, I should like to say that the United States of America gets £800 million a year through its charity chest. I think the Americans are doing a very good job. It appears to me, having looked into it, that they are being very fair about it. They also advise the new charities of the best way to start. I hope that we shall
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take what the noble Lord has said to heart today and see that charities get a fair look in the future.
3.25 p.m.
Lord Grimond: My Lords, you may think from my exalted position on the batting list that I am speaking officially on behalf of the Alliance. That would be a mistake. I do not know whether the Alliance has a policy on charities. I hope that it has not. I have spent a great deal of my life trying to dissuade the Liberal Party from having policies on everything under the sun. All I am attempting to do this afternoon is to make one or two points which are purely my own idea.
We certainly all owe a great debt to the noble Lord, Lord Allen. Charities are now very big business, as he pointed out. The first point I want to raise is how far we can expect the Charity Commission to supervise them. As he said, at the moment it is finding it very difficult.
One of the things that the Charity Commissioner has to do, in theory, I understand, is to look at 150,000 balance sheets. This seems to be a quite impossible task and I have just asked whether it is necessary. I draw your Lordships' attention to the fact that the Charity Commission operates only in England and Wales. There is no Charity Commission in Scotland: the functions of the Charity Commission are carried out by the Treasury. I think it is very interesting to know whether the Government have made any comparisons between the results in Scotland and those in England and Wales, so that we may find out whether the Scottish experience has any relevance to possibly relieving the Charity Commission of some of its obligations.
The second matter to which I want to refer is the fact that one of the main features of charities is that they escape taxation. I consider taxation to be quite respectable. There is a growing feeling in the country that only fools pay tax, but somebody has to pay tax. Many good causes have to pay tax, and many admirable individuals also. I have been until lately what is usually called a trustee of an organisation called The Joseph Rowntree Social Service Trust. It is not a trust strictly speaking and I was not a trustee. It is a limited company and its objects are laid down in its Articles of Association. It pays tax. Out of an income of some £330,000 a year it pays £140,000 in tax. We would much rather not do that. Nevertheless, it gives us freedom to support any cause which we think is good and within the remit of the founder, whether it is charitable or not.
I think that we have a certain advantage in this. I do not think that many people would feel, for instance, that it was right to support political parties out of untaxed money. I think people would jib at the taxpayer virtually contributing, say, to the National Front and the Communist Party. But it may be a good thing to have in the system somewhere some organisations which are free to take a rather wider look at what may be called a good cause than can possibly be done by the Charity Commissioners.
Therefore, while I pass on the plea for some relaxation in taxation, I do not want it to be thought that I believe that the door can be opened indefinitely wide. I think that it is very reasonable that donations

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to charity should be made tax deductible by individuals. I would go to the opposite of what I understand is sometimes the fashionable view of the Treasury that they should be made tax deductible by institutions. I think it is much better that they should be made tax deductible by individuals. Further, I would try to expand a little the present flexibility which is very sensibly exercised by the Charity Commission.
Here again, I want to say that even now it is not absolutely axiomatic that all charities necessarily do good. The largest landowner in Orkney is now the Royal Society for the Protection of Birds—a most excellent organisation, with whose objects we no doubt agree in general—but it is doubtful whether it should indefinitely buy up land and become an absentee landowner partly with the help of the taxpayer and in competition with local people who may wish to buy it. I personally have doubts as to whether it is good that infinitely large foundations should be set up for the acquisition of pictures and works of art. Certainly it is wonderful that the Sainsbury family are going to build a new wing for the National Gallery. However, when one thinks of Getty and the possibility of endless Gettys and practically all the major works of art being put into foundations and museums of one sort or another—again, largely because by this means they escape some tax—I at any rate think that the advantage is debatable. I do not go further than that; it is good in some ways, but it is not absolutely obvious that it will be good indefinitely.
However, I think that we might look at those cases where a charity exposes something which is quite clearly wrong. For many years I was, and I still am, connected with the Minority Rights Group. We could of course publish reports pointing out the parlous state and the grievances of minorities; but if we went further than that and suggested that something should be done about them, we would, quite properly, be liable to get into trouble with the Charity Commission. As noble Lords know, people who publish the facts of famine in Africa and go on to say that some action should be taken are also in danger of getting into similar trouble.
Lastly, I want to point to the case of Koeppler. He was someone who some noble Lords may have known well. He was a very remarkable German who was instrumental in setting up an organisation in this country and he tried to leave his money to it for the purpose of holding seminars and conferences about international affairs. However, the courts have held that it did not fall within the definition of "charity". I should have thought that its purposes were exactly the same as those of Chatham House, and it seems to me strange that the law—I have no doubt that it is perfectly properly administered—should have made void Koeppler's bequest for what I should have thought was a purpose which everyone would agree was highly to be encouraged.
Therefore, my own experience is that the Charity Commissioners do a wonderful job, but whether their job needs to be as wide as it is I do not know, and some comparison with Scotland would be interesting. But in general I think that we could make them a little more flexible. However, it is extremely difficult to find a line which is absolutely valid between the charitable and the non-charitable.
3.32 p.m.
Baroness Faithfull: My Lords, since the dissolution of the monasteries by Henry VIII, the development from Elizabethan times of charity law and the growth of charities have been the subjects of deep interest, both academic and practical. We are indebted to the noble Lord, Lord Allen of Abbeydale, for introducing this debate today, all the more so because charity law and the oversight of charities has not adapted from early times to the changing circumstances of this day and age.
Perhaps I may touch on three matters. The first is the anomalous position of the Charity Commission. While the Home Office answers for the commission, its relationship is a nebulous one. Being somewhat cynical, there is no political mileage in the Charity Commission, and therefore I would submit that no Home Secretary of any party has sought to update the work of the commission in order to see that it has the appropriate and adequate resources. I suspect that neither any Home Secretary nor the one or two staff in touch with the commission can possibly be aware of the dissatisfaction expressed throughout the country—indeed, they have no means of knowing.
I would recommend that there should be a council of three to speak for the commission and to act as advisers—a Member of the House of Commons, a Member of the House of Lords and perhaps a third person with knowledge of charities and charity law. I would recommend that such a council and the commission should look critically at the ethos and work of the commission and, based on these findings, ask for a survey to be carried out. This survey should on no account be carried out by the Treasury, whose only object, very understandably, is to cut expenditure regardless of the needs either of the commission or of the service required by the country. The Treasury cannot be expected to know of that.
The Charity Commission produces a good report each year; but, my Lords, what action is taken on it? As was stated by the noble Lords, Lord Allen of Abbeydale and Lord Grimond, there are 150,000 charities registered whose accounts should be submitted and scrutinised, but obviously that cannot be done. Last year there were 3,000 new applications for registration. Approximately 700 letters are received each working day. In all, there are 300 staff-200 in London and 100 in Liverpool. There are many complaints about work held up and registrations not being dealt with immediately. As has been said, the staff of the commission cannot be blamed because they do not have the resources and have no option but to play a passive role, and are not in a position to take initiatives.
My second point concerns the Charities Act 1985. This Act was passed on the recommendation of a Select Committee chaired by the noble and learned Lord, Lord Brightman. That Act deals with small charities and recommends the amalgamation into neighbourhood trusts of small parochial charities on a voluntary basis. I understand from the Charity Commissioner (the member of staff assigned to deal with the implementation of this Act) that much

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interest is being shown throughout the country. However, there are some parishes which are unable to use their small parochial funds or which use them unwisely and are not prepared to help neighbouring parishes in need. It is profoundly to be hoped that this attitude will change. The commission is seeking to monitor and implement that Act.
The third point which I want to raise deals with value added tax. When will the Chancellor of the Exchequer listen to the pleas of over 200 leading charities which are paying £20 million a year in value added tax? Charities incur VAT on the goods and services that they purchase. One of the worst hit charities is Barnardo's, on whose council I have the privilege to serve. The total cost per year in value added tax is £600,000. This is hard on the splendid volunteers who in many different ways raise a large sum of money.
The policy of Her Majesty's Government is much to be applauded in the partnership as between the statutory and the voluntary sectors. For instance, Barnardo's, in partnership with the Department of Health and Social Security, has schemes for bringing mentally handicapped children out of mental hospitals into small units in the community. A central government grant is given towards this; but in the building or alteration of a building, in advertising, in medicine and drugs, VAT must be paid. But for VAT, more children could be brought out of the already burdened hospitals. The VAT paid by Barnardo's is therefore counterproductive to the statutory sector as well as to the voluntary sector.
In the year ending 1985 the NSPCC incurred £340,801.77 in VAT. If the NSPCC or Barnardo's opted out of the work which they do, it would have to be carried on by the local authorities, which do not pay VAT. If the Chancellor of the Exchequer cannot give VAT relief, would he consider perhaps giving relief in part? He has acknowledged the problem under the Value Added Tax (Welfare) Order 1985. Would he perhaps consider withdrawing VAT or making it zero-paid on buildings, alterations and extensions; or give relief for services comparable to the work done by local authorities, or alternatively for a specific area of concern, perhaps the relief of the poor, or families and children?
Voluntary organisations are able to provide a social and welfare service which is flexible, effective, and economic due to the involvement of the community and of volunteers. The people of this country are generous in their giving to charities. The wonderful effort of Bob Geldof did not diminish giving to the established charities. Surely those who give want their donations and covenants to go to the charitable work of their choice.
My Lords, I say again that if there was a Council for the Charities Commission all the points made by your Lordships today could, and I am sure would, be taken up by the Charities Commission, and they would be given the opportunity to meet the needs of the ever-growing charities section to which Her Majesty's Government are committed.

British Leyland Subsidiary Companies
3.41 p.m.
Lord Lucas of Chilworth: My Lords, it may now be for the convenience of the House if I repeat a Statement now being made in another place by my right honourable friend the Secretary of State for Trade and Industry on British Leyland. The Statement is as follows:
"As I informed the House on 19th February, an invitation was extended to interested parties to declare by 4th March a firm intention to make a bid for one or more of the Land Rover, Freight Rover, Leyland Trucks and related businesses.
"I can now report to the House that appropriate declarations have been made to British Leyland's bankers by Shroder Ventures on behalf of some institutions and certain members of British Leyland management in respect of Land Rover, Range Rover and Freight Rover; by Lonrho in respect of Land Rover and Range Rover; and by Aveling Barford in respect of Land Rover only. General Motors have also confirmed their intention to make a bid for Land Rover, Range Rover, Freight Rover and Leyland Trucks.
"The Laird Group and Aveling Barford are each in discussion with British Leyland regarding the acquisition of Leyland Bus for which proposals on behalf of certain members of the management are also expected. Discussions in relation to Leyland Bus are taking place over a slightly different timescale from those concerning other Land Rover-Leyland businesses. I shall make a further Statement to the House on these in due course.
"The British Leyland Board are giving careful consideration to all the proposals received on or before 4th March and I hope to have their recommendations shortly. The board and the Government remain anxious to end the present uncertainty surrounding these businesses as soon as possible in the interests of the companies, management and workforce and their dealers and suppliers.
"I should also like to take the opportunity to inform the House of a forthcoming change in the chairmanship of British Leyland. Sir Austin Bide's appointment as chairman of British Leyland was extended in late 1984 on the basis that he would continue as chairman until a convenient moment for his retirement was reached. Sir Austin has kindly agreed to remain as chairman until decisions have been made on the future of the main Land Rover-Leyland businesses. This will represent the start of a new phase in the development of British Leyland and, on my nomination, the British Leyland Board propose to invite Mr. Graham Day, at present chairman of British Shipbuilders, to join the board and to become full-time chairman of British Leyland at a date to be determined. I should like to express the Government's thanks, and to add my own warmest personal tribute, to Sir Austin under whose leadership British Leyland has achieved notable progress.
"I am appointing Mr. Phillip Hares, CBE, the present deputy chief executive and board member for finance of the corporation, to succeed Mr. Graham Day as chairman of British Shipbuilders." My Lords, that concludes the Statement.
3.45 p.m.
Lord Bruce of Donington: My Lords, we thank the noble Lord for repeating the Statement made in another place. We note with interest his tribute to the notable progress that British Leyland has made over the past years. The Statement he has made indicates precisely the degree of shambles into which the Government have now got the whole motor industry. On the basis of the Statement it is clear that every option presupposes a breakdown in the integrated BL system.
Is the noble Lord further aware that his listing of the various parties which have now put in their applications, when it is reduced to plain terms, amounts to a charade? The Government initiated conversations with General Motors some 18 months ago, in August 1984. The remaining bodies which have had an opportunity to bid have had exactly 20 days. There are complaints that they have not received all the co-operation to which they thought they were entitled, and certainly nothing like the comprehensive information that has been in the possession of GM for some time.
Will the noble Lord further note that, in view of the fact that GM are the only ones to incorporate Leyland Trucks within their offer (the remaining applicants have not included Leyland Trucks) the Government are already committed to GM because GM have so far—if we believe the statements that have been made—always insisted that their proposed acquisition of Land Rover must have Leyland Trucks with it, or vice versa? Is the noble Lord aware of that?
Could the noble Lord give some indication as to when these matters are to be brought to completion, if they are to be brought to completion at all? In view of the statments made by the Government over the last fortnight, will the noble Lord now give a Government undertaking that there will be no further conversations between the Government and Ford on any aspect of a proposed acquisition of Austin Rover during the lifetime of this Parliament? He ought to be able to give that undertaking on the basis of the statements made so far.
Is the noble Lord further aware that the easiest way of getting rid of the uncertainty which he professes to desire to avoid, or to minimise as far as possible, is to end the whole idea of disposing of BL, or any part of it, away from the public sector? Is he aware that the people of this country are now coming to think that the Government will do anything to raise money—to sell the family silver—in order to raise cash for the Chancellor? Is the noble Lord aware that what is required of the Government—as emphasised perhaps obliquely by the right honourable gentleman the Member for Bexley last night—is that they should start behaving like a British Government and encourage British industry, rather than to disintegrate it, which they propose to do at the present time?
Lord Diamond: My Lords, may I say on behalf of these Benches that we are grateful to the Government for making yet a further and important Statement on this matter, although they have by no means reached finality. It is a courtesy that we much appreciate. We on these Benches still have one or two anxieties. Our first anxiety is that the Government should give ample opportunity, whichever part of the undertakings they have in mind for privatisation, to management and workforce to join together in making whatever bids they are able to make within a reasonable time. Our anxiety is that the Government are not prepared to give them reasonable time and have not brought the workforce into consultation at all. They are not proposing to allow the workforce to participate in shareholding in the company, which I thought was accepted on all sides of the House to be a useful step forward. I say that because the Statement refers only to management. In relation to the Leyland Bus undertaking, for which it is said that the timescale is on a slightly different basis, it is not clear which members of the management and workforce are included. The Statement says:
"proposals on behalf of certain members of the management"
only. I hope that the Minister will clear up that anxiety.
That anxiety is based on a misconception by the Government that the uncertainty here is unique and damaging. The one thing that can be said about privatisation is that it is a very public procedure. Everybody knows all about it for months, on the Stock Exchange and elsewhere; customers, dealers, whoever is connected with the business knows all about it. They will know all about the privatisation of the water industry months, and possibly years, ahead of privatisation taking place. Is it not the case that the Government maintain that privatisation is in the interests of the nation and, in particular, in the interests of the companies concerned? If that is so, why do the company insist that it must be damaging for this news to get out? I thought its line would be that it is the best possible news, that it will improve the company, and improve the national interest; the sooner it is said the better for everybody concerned.
For those two reasons I find it very difficult to accept at its face value the company's statements about the need to remove anxieties by making a ridiculously short timescale in which management and workforce can get together, can inspect balance sheets, can discuss forward steps, interest backers and get the necessary finance, all in time to make a bid. Everything is happening within what I consider to be a ridiculously short period. It is because of that anxiety that one is driven to contemplate the alternative view, which has been so well expressed from the Front Bench just now, that the Government's main consideration is not to satisfy the best interests of the company and its employees, but to have regard to the slot which has arisen through the lack of progress on the British Airways privatisation. A slot has arisen in their budgeted receipts, and therefore they are trying to fill it up as fast as they can by selling off whatever assets they can put their hands to, an operation which has been so wisely described by both Opposition parties as selling off the family silver to pay for current

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expenditure, to pay for the groceries. We wish to be reassured on those points.
The real final issue remains: Are the Government intending to find a purchaser or a partner? We have queried this matter every time and so far we have had no answer. It is an entirely different matter, and there would be total support for the Government coming from these Benches if they were anxious to find a partner with the markets, the know-how and all the necessary ingredients for a successful and improving business, which included a full measure of participation by management and workforce. I have no doubt that such a partnership would receive wide support in the country. It is an entirely different matter if the Government are seeking, for reasons which do not appear very clear, an immediate cash realisation.
Lord Lucas of Chilworth: My Lords, a number of points have been made by both noble Lords which I shall endeavour to answer. Let me say straightaway that the noble Lord, Lord Bruce of Donington, is wrong in his suggestion that there is a destruction of an integrated business, because the business of British Leyland is divided into four quite separate businesses, although they are subsidiaries of one holding company. Both noble Lords raised the matter of the timescale. The Government's intentions were well known as far back as 1983. There has been widespread reporting over many months about the interests of General Motors and others. To suggest that 20 days has been allowed, that is from 19th February until 4th March, is something of a travesty of the truth.
The Government are committed, as I hoped I have made clear on a number of occasions, only to the longterm viability of a United Kingdom-based commercial vehicle industry. It is important that we complete any change as quickly as possible because, as the noble Lord, Lord Diamond, recognises, there is an element of uncertainty. The uncertainty comes about because a number of people—the four that I have mentioned and the bus business—are interested in acquiring control of those businesses. It is in the interests of everybody concerned to know where this will end. That is where the uncertainty is, not in respect of the Government's intentions.
In response to both noble Lords may I say that there is no question of the Government—to quote somebody else—selling the family silver. There is no doubt whatsoever in the minds of the board of British Leyland as well as others that, in the very best interests of the company, its management and its workforce and the British-based commercial vehicle industry, parts of Leyland should be returned to the private sector as soon as possible.
It is wrong of the noble Lord, Lord Bruce of Donington, to suggest that we have not encouraged British industry. In this instance we have invested £2.3 billion of taxpayers' money, guaranteed a further £1.5 billion of British taxpayers' money, and it is now the turn of industry to invest its money, so relieving the British taxpayer of that burden and so that taxpayers' money can be spent in other areas for which the public are clamouring, and quite rightly and properly so.
I shall not give the noble Lord, Lord Bruce of Donington, any assurances whatsoever with regard to
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the discussions that Her Majesty's Government are having, either on their own behalf or through companies in the public sector, with other parties—and so far as the term of this Government is concerned—neither now nor in the next term which we shall enjoy.
Our interest is the benefit to the company and the nation. There is no other reason for our engaging in this exercise. My right honourable friend will consider the advice he receives from the British Leyland Board as quickly as is commensurate with giving proper consideration to a matter as important as this.
4 p.m.
Lord Somers: My Lords, the noble Lord says that the interests of industry and the nation are paramount, and his figures certainly sound very convincing; but I think that most of us will feel faintly uneasy until we can get a definite statement from the Government that Land Rover and Range Rover are not going to be sold to a foreign country thereby damaging British industry by depriving it, for one thing, of one of the most important of its exports. There is scarcely a part of the world where one will not find a Land Rover. It is indeed a product of which we have every reason to be proud. If we are going to increase British industry then surely that is one of the first things that we should keep hold of.
The Lord Bishop of Birmingham: My Lords—
Lord Lucas of Chilworth: My Lords, perhaps I may first answer the noble Lord, Lord Somers. When I said that we have as one of the fundamental points in front of us the interests of the British-based motor industry and the nation, I meant exactly that. The point is that Land Rover and Range Rover have lost their predominance in world markets. The Japanese have encroached with about five different products. We have no United States representation of Land Rover and Range Rover at the present moment, and that is the fastest growing market for 4-by-4 vehicles. There is nothing wrong with the attraction of foreign investment to enhance our own capability in manufacturing, in technology and in the marketing of products made in this country.
I would not wish to give the noble Lord, Lord Somers, any feeling that we would do other than bear in mind the widest issues so far as the future of the company, its product and its workforce are concerned when giving consideration to the offers to acquire the parts of British Leyland to which I have referred in the Statement.
The Lord Bishop of Birmingham: My Lords, I apologise for my over-eagerness in rising to my feet, but this subject is very close to my see city of Birmingham in which there are very deep feelings indeed about this matter. I am grateful to the noble Lord for giving this Statement to the House, although I wish that I had its terms in front of me. I am grateful, too, for what he said about ending uncertainty; because there is grave anxiety in Birmingham and Solihull about this matter. I must point out that negotiations have been going on with General Motors for nine months and the so-called management buy-out has had to be organised within two or three weeks.

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This hardly gives them time. In fact, I think it is a remarkable tribute to the way in which people have faith in the present management and in the ability of the firm to continue that they have raised sufficient funds not only for a buy-out but also in order to finance the new models which undoubtedly will be necessary.
Noble Lords may not realise, in the light of what was said on the other side of this House regarding participation, that 10 per cent. of the capital has been set aside in the management buy-out precisely for workers' participation. Also, the buy-out will see that there will still continue to be links with BL itself and with its agencies; and, as the noble Lord, Lord Diamond, mentioned, control will be in this country.
I am not sure whether noble Lords are aware of the great success of Freight Rover. Freight Rover must go with Land Rover and that is why I am so puzzled by one of the bids which, if I heard the noble Lord aright, seems to mention Land Rover only. That would mean the end of Freight Rover because they are inextricably mixed up together. Freight Rover, ever since it was put on its feet when Michael Edwardes was there, and with its workforce halved, has increased its production from 9,000 to 19,000 vehicles a year. That is a very remarkable performance indeed. This is a very adaptable truck, especially the Sherpa 300 which is used for Telecom and ambulance and police work.
But there is a deep feeling of unease. When I went down there last Friday—and I visited at the same time and on the same day as Mr. Kinnock, but in a somewhat quieter mode—I spoke to the workforce. There is deep apprehension that if General Motors gets hold of this, it will be closed and Bedford Vans will have the work instead. Indeed, one can understand how they feel. Not only is Freight Rover a success but it can generate enough money for new models. As for Land Rover, I would not wish to contradict what the noble Lord the Minister has said, but I think it is fair to say that it has hardly lost its predominance in the world markets. A new Japanese model of a lighter type has been produced which is more suitable in such built-up countries as the United States of America. Land Rover itself is sold in 100 countries and Range Rover in 80 countries.
The Earl of Swinton: My Lords, perhaps the right reverend Prelate is not quite accustomed to this House and to the fact that Statements are matters for short comments and questions to the Minister, and not matters on which to raise a debate. Perhaps he might very shortly put his question to the Minister.
The Lord Bishop of Birmingham: My Lords, I apologise to the House if I have used more time than I should. What I want to ask on behalf of the people of Birmingham is this. Can we be certain that due consideration will be given to the management buyout and that Birmingham, with redundancies in the area of 2,000 a month, will not be sacrificed to Leyland Trucks?
Lord Shepherd: My Lords, will the right reverend Prelate permit me—
Lord Lucas of Chilworth: My Lords—
Lord Shepherd: My Lords, I was about to raise a small matter, but I shall come back to it.
Lord Lucas of Chilworth: My Lords, I shall be delighted to answer the noble Lord, Lord Shepherd, in due course. I am grateful to the right reverend Prelate the Bishop of Birmingham, knowing, as I well do, of his deep and important interest in this area. I am sure that my noble friend the Deputy Chief Whip also recognises that. Let me say to him, as I said to him once before, that the Government's long-term interest is—and I use this phrase again—the long-term viability of a commercial vehicle industry based in this country and, with that, the long-term security of employment. I stress, "the long-term security of employment". But I have to say to the right reverend Prelate that he is not right when he suggests that Land Rover on its own has enjoyed a predominant world position in recent years. It is a fact that it is necessary to find further and very large investment in new models, productive capacity and the marketing network and that a private sector involvement is paramount. That, in its turn, will lead to the security in the long term of jobs within that important industry.
Lord Shepherd: My Lords, I would not wish to be critical of the right reverend Prelate in regard to the statement that he has made, but it is very clear that ministerial Statements are not a cause for debate. One of our great anxieties in this particular matter is that it is very difficult to deal with a subject of this kind without a debate. There are many questions and many explanations.
I wonder whether the noble Viscount the Leader of the House would consider that it would be very much in the interests of this House, and of the subject matter before us, if he could arrange for a short debate to be held? I think this is a subject which requires a debate, as opposed to the unsatisfactory way of seeking to deal with it by question and answer following the repeating of a Statement. Bearing in mind that we have now spent 29 minutes on this Statement, I doubt whether we very much further forward than we were at the beginning, and we are intervening in a major debate in the field of charities. Would the noble Viscount, without saying "yea" or "nay" today, give careful consideration to whether or not we should have a debate on this subject?
The Lord President of the Council (Viscount Whitelaw): My Lords, I must apologise to the House for the fact that another meeting kept me away until the last moment. I heard from just outside the House what the right reverend Prelate was saying and I appreciate very much the anxieties that he was stressing on behalf of many people in the Birmingham area.
It is fair to say that the Statement made by my noble friend is very much of an interim character, and I think that fact would be appreciated by the House. Of course I will consider the suggestion made by the noble Lord, Lord Shepherd. I cannot give any guarantees because I do not yet myself know how the whole matter will develop; but I will certainly take great care

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to make sure that the House is kept fully informed, and on a matter of such importance it is my job, through the usual channels, to see what can be done to help.
Lord Ezra: My Lords, the noble Viscount the Leader of the House has told us that this is an interim Statement. Nevertheless the moment of decision is approaching on this very important issue for British industry. As I understand it from the Statement which has been repeated to us, the board of British Leyland have to make recommendations to the Government. I should like to ask the noble Lord whether he would agree that among the various criteria which should be taken into account in reaching a decision there should be the following. First, as regards local content, as I understand it, the vehicles which are in question use up to 80 or 90 per cent. of British supplies. Would it be a condition that this degree of local content should be maintained?
Secondly, would the British name for these vehicles which have earned world renown, be retained? Thirdly, would an adequate level of investment in future years be provided? Fourthly, would research and development, which so frequently in connection with businesses taken over by other enterprises could be changed to other countries, be retained in this country? Fifthly, in support of my noble friend Lord Diamond, I suggest not only that there should be full safeguards for the employees, both the management and the workforce, but that there should be adequate provision for participation. I would be most obliged to the noble Lord if he could tell us whether these conditions would be met under whatever decision is reached.
Lord Lucas of Chilworth: My Lords, I am quite happy to assure the noble Lord, Lord Ezra, that the list of criteria he has just read out will be among those to which the board of British Leyland will be giving the most careful consideration.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that it is quite clear that, whatever decision is arrived at, it will be destructively criticised by the Opposition Benches? They have made that perfectly clear. Further, while it is right to take into account any feelings that have been expressed, is this a decision for the Government, with the special knowledge that only the Government can have? Is my noble friend aware that it would not be appreciated throughout the country if, in order to appease and to obtain what the Government thought was a political consensus, they did not make firm and proper decisions according to the facts as they know them, rather than decisions based upon emotion or sentiment which would not last very long?
4.15 p.m.
Lord Lucas of Chilworth: My Lords, if my noble friend will forgive me, I am not quite sure whether I could agree entirely with his first comments, although I have some sympathy with him. Let me again repeat that it is the British Leyland board, together with the Government, who have the consideration to make and we will make our decision against the background which I have now, I think, given on five separate
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occasions over the last five weeks. We are concerned with the long-term interest of a British-based motor industry and its viability and the long-term employment prospects for all those who are currently employed and those who potentially will be employed in this very important motor vehicle industry.
Baroness Fisher of Rednal: My Lords, may I ask the noble Lord to consider in addition the employee participation which has taken place in the British Leyland organisation since the last reorganisation? If he looks at the output record and at the days lost through strikes, he will see there is no cause for criticism against the employees themselves making their input into the prosperity of the British Leyland organisation. When the noble Lord speaks about "the public are clamouring" for a decision—the noble Lord demurs, but I wrote it down and with all due respect I put "the public are clamouring". If I am wrong, I apologise to the noble Lord; but the public in the West Midlands are clamouring for a decision which will obviously ensure that the employment prospects are still kept intact. That is most important, as the right reverend Prelate the Bishop of Birmingham has said. It is also important to recognise that the public are not only in London but in the West Midlands, where these firms are.
The other point I would ask the noble Lord to consider is this. The taxpayers have put money into British Leyland—one does not dispute that—but we should also recognise that they have put money into farm subsidies. That fact should not be isolated. We recognise that they have put money into this industry and now that investment is beginning to pay off. It is quite wrong for the British taxpayer, having invested his money, now that the money is beginning to bear fruit, to be faced with a selling off of the prospects to somebody who is coming in for a quick kill.
Lord Lucas of Chilworth: My Lords, on the noble Baroness's first point, I believe that I did answer her during our exchange at Question Time earlier this afternoon. I can only repeat that it is for British Leyland to assess all the points that the noble Baroness has made, together with many, many others, when they come to consider these four particular bids. But I do have to remind the noble Baroness that British Leyland Trucks have lost money over a number of years, and continue so to do. Leyland Buses have lost money over a number of years, and continue so to do. The Land Rover group have lost money up to this year—when I say "this year" I mean the 1985 financial year—when it is now anticipated they will turn in a modest profit. None of that is commensurate in any way whatsoever with a fair return on the capital that has been invested in those companies by the British taxpayer.
Viscount Trenchard: My Lords, would my noble friend care to consider that if the usual channels decide that we should have a debate on this matter he might have available some figures to show the degree to which foreign-owned multinational companies have increased employment in all areas, including research and development, compared with similar examples of British-owned companies? Certainly it is within my experience that this is not a set pattern one way or

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another. Looking at the international motor industry at the moment, would my noble friend agree that there are strong arguments to suggest that the greatest security for employment and for research and development may well be in the huge multinational motor vehicle corporations?
Lord Lucas of Chilworth: My Lords, I am quite sure I could agree with my noble friend Lord Trenchard in the sense of what he is saying. This is a worldwide industry and it requires tremendous investment. The Government have never sought to suggest that overseas investment in this industry, as in others, is not welcome. There is no doubt that overseas investment in our industry has been to the great benefit of this country and those who work in the various industries.
Lady Saltoun of Abernethy: My Lords, we have now spent 38 minutes on this Statement. There is another Statement. I wonder whether we could perhaps move on to the next business.
Viscount Whitelaw: My Lords, in reply to the noble Lady, I was hoping that after the noble Lord, Lord Bruce of Donington, whose right to ask another queston I hope I recognised correctly, it would be possible to move on. Had not I interpreted some feelings in the House, I might have suggested earlier that we moved on. But I thought that the matter was of such vital importance, and there was such feeling in the House, that I should have been wrong to do so. I felt that was the feeling of the House. Perhaps after the noble Lord, Lord Bruce of Donington, has asked his question, the moment for bringing this matter to an end will have come.
Lord Bruce of Donington: My Lords, my question will be very short. The noble Lord, Lord Lucas, has said that whatever emphasis he may have given to the role of the BL management and board, it is the Government who will make the final decision. In view of that fact, and the importance of the decisions that are to be made, will the noble Lord give careful consideration to our having a full debate before the decision and any irrevocable steps are taken? Will he also bear in mind that, notwithstanding the preference of his noble friend Lord Harmar-Nicholls for a single party state, the Opposition will continue to exercise their constitutional function?
Viscount Whitelaw: My Lords, I note what the noble Lord has said. I think that it would be wrong for me to go any further than I did in answer to the noble Lord, Lord Shepherd, about the need to have the fullest discussion in the House. I cannot give a guarantee as to exactly when the debate might take place because I might be proved wrong. That is the last thing I would wish to do because I should have misled the House, and that I do not intend to do.

Rate Support Grant Recycling
4.23 p.m.
The Minister of State, Department of the Environment (Lord Elton): My Lords, by your Lordships' leave, I shall repeat a Statement being made in another
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place by my honourable friend the Parliamentary Under-Secretary of State at the Department of the Environment.
"With permission, Mr. Speaker, I shall make a. Statement.
"The House will be pleased to know that my right honourable friend the Secretary of State for the Environment was yesterday able to tell the local authority associations that he would guarantee that £500 million of grant would be available to be recycled in 1986–87 and that authorities would be able to take this into account in fixing lower precepts and rates.
"As the House will recall, in the RSG debate on 20th January my right honourable friend explained that if local authorities budget to spend more next year than we allowed for in the RSG settlement, the grant forfeited by overspenders would go into a pool which would then be recycled to all authorities. He illustrated the grant gains to authorities if the pool were to be £400 million. Those figures could only be illustrative at that stage, because they depend on authorities' budget decisions.
"This week, in the light of the latest figures available, we are now in a position to go much firmer than that. It is clear that the pool of grant to be recycled is going to be some £500 million. That means the grant gains will be bigger than those illustrated in January and that authorities will get more grant than they have assumed. Moreover, to avoid all doubts, the Government are prepared formally to guarantee that £500 million of grant will be recycled. My department has written to all authorities telling them the amount of extra grant they will receive from that amount of recycling, in addition to their grant entitlement under the RSG settlement announced in December. I am placing a copy of the table in the Library.
"Councils will now know the size of their grant entitlement more clearly and this will allow them to make a lower call on their ratepayers. Where the rate making has not been completed, I hope that honourable Members will urge their local authorities to revise their rating plans in the light of these figures.
"My right honourable friend wrote to the local authorities' associations as soon as he was in a position to confirm the level of recycled grant that would be available. Local authorities are now making their rating and precepting decisions and it was essential to provide them with this information immediately. I am sure that all honourable Members will agree that rate increases should be no higher than is absolutely necessary."
My Lords, that concludes the Statement.
Baroness David: My Lords, I am grateful to the Minister for repeating the Statement even if we look on it a trifle cynically. I have a number of questions to ask. Have not a great many of the local authorities already fixed their precepts and rates? There was a list of recommended and approved precepts published in the Local Government Chronicle just the other day. Paragraph 4 of the Statement referred to those authorities not having completed their rate making.

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Have not most authorities already gone through that exercise? How many block grant claim forms have been received from local authorities? May I ask what expenditure assumptions have been made for the remainder of the authorities to lead the Government to believe that £500 million will be available from overspend to redistribute? May I ask which local authorities will benefit from that redistribution? Will it be the shire counties, where there has been a great deal of anxiety and feeling expressed by Conservative Members of Parliament? My Lords, those are the questions that I wish to ask.
Baroness Stedman: My Lords, I am grateful to the Minister for repeating the Statement, to which we give a rather cautious welcome now, having in mind that the original rate support grant settlement was a bad one, especially with regard to the shire counties which had a reduction in grant because of the switch to the metropolitan boroughs, the London districts and the inner cities. I hasten to say that we are not against more resources going to the inner cities but we think that that should have been a national charge and not done at the expense of the shire counties. The recycling that is proposed today does not seem to be affecting that.
What is offered is welcomed. Councils will have some firm guarantee of what they will receive even if it is still within the framework of that original bad settlement. Is the Minister aware, as the noble Baroness, Lady David, said, that most of the shire rate precepts have now been fixed—some of them on the optimistic basis that they might receive a share of the £400 million that was originally talked about, and others on a pessimistic basis because of the state of local government finance generally? My own county fixed its very high rate optimistically on the basis that it was likely to receive about £5 million on the original estimate. It is now, I understand, to receive some £6·4 million. The difference is small compared with its total budget.
Other authorities may find that they have a windfall if they fix their rate more pessimistically; but as 21 days' notice must be given for a special council meeting to reconsider the precept, that will be difficult. I believe that few, if any, rates are likely to be reduced as a result of the recycling. Does the Minister accept that this points once again to the general muddle and confusion that surrounds local government finance? It is imperative that the problem is tackled because local authorities cannot continue to flounder from one financial crisis to another. The uncertainty about local authority finance must be removed. The good thing about the Statement is that authorities seem to have a guarantee about the sums that they will receive. The notice says that they are formally prepared to agree the amounts. May we have the Minister's assurance that that is so? The Government's press statement yesterday detailed the amounts that would be available. What happens if those supposedly high-spending authorities do not eventually overspend and less money is available? Is the Statement really implying that the Treasury will underwrite the amount promised today whatever happens?
4.30 p.m.
Lord Elton: My Lords, I am grateful to the noble Baronesses, Lady David and Lady Stedman, for their reception of the Statement—one of them cynical and the other cautious.
Both noble Baronesses said that they felt that many authorities had already fixed their rates. It is true that a number have. First, those which have not are in a position to take advantage forthwith of this new information for the benefit of their ratepayers. Secondly, in some cases it is possible to reconvene meetings and refix the budget before it has to be set, which in the shires is earlier than it is in the boroughs and districts. I accept that. But there is a route there for a number of authorities. The noble Baroness, Lady Stedman, suggested that the system was not perfect, and she will remember the vigorous debate that we had on the Green Paper with which we seek to come one step closer to a very distant perfection. It is the case that the Secretary of State could not give his Statement until he knew what were the intentions of most local authorities, and I have to say that information as to that has been coming in on a day-to-day basis. As to what will happen if the £500 million overspend does not take place, it was the purpose of the Statement to say that the £500 million will nevertheless be available. But your Lordships will readily understand that that undertaking would not have been given had we not been pretty sure that at least that amount of money would come to hand, and that is indeed the position.
As to the basis of the assumptions and calculations that we made, the answer to that is the one I have already given—that we have had a steady stream of information. Some of it relates to budgets already made, some of it to information about budgets in view, and it was sufficient for us to make the Statement in the terms in which I have made it. As to the purpose of recycling, I am not sure that the noble Baroness, Lady Stedman, is altogether fair even in the terms of her own philosophy of rate support, because the effect of recycling is to take money that has been forfeited by overspenders and to redistribute it to all spenders. It will be subject to the effects of being out of grant, so the very highest spenders will not benefit whereas the lowest spenders will benefit, so it has a redistributive effect. As to which particular authorities will benefit I commend to the noble Baroness, Lady David, the table which is now in the Library and which sets out both the gross amounts and the effect on actual rate levels.
Lord Boyd-Carpenter: My Lords, being neither cynical nor cautious, may I ask my noble friend a couple of questions on his interesting and, in many ways, welcome Statement? Can he first amplify what he has just said about the likely beneficiaries from this Statement? Are the shire counties, which, understandably, thought they had rather a raw deal under the original arrangements, among the substantial beneficiaries? Secondly, can he explain to your Lordships what happens in cases where the rate has been fixed and it is technically impossible to alter it? Will it be the result that ratepayers will be called upon to pay more by way of rates than, in the outcome, there is any financial justification for?

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Thirdly, is my noble friend aware of the fact that, however welcome the Statement, it really indicates a good deal of confusion over the rate support grant? Can he hold out hopes to us that in future this will be determined on a more businesslike and efficient basis?
Lord Elton: My Lords, as to my noble friend's first question, I have to say that the shire counties will be beneficiaries under this scheme—some of them substantially so. Where an authority has already arrived at its budget and cannot, for one reason or another, revise it, the ratepayers will not lose but the money will go to balances and be available for effect against the following year's rates. So the benefit will be there. As to the question of confusion, I can do little beyond repeat what I said to the noble Baroness, Lady Stedman: that we are aware of the imperfections of the system and that is why we have brought in the Green Paper which your Lordships have already looked at with great interest. As to the local authorities which have not yet fixed their rates, I should say that there are very many of them in the urban areas which warmly welcome this and will be able to make immediate use of the information, as well as many in the shires. I believe that was the full tally of the questions that my noble friend asked me.
Lord Dean of Beswick: My Lords, naturally I, too, am grateful that more money is being found than the Secretary of State mentioned in his original Statement on the rate support grant. The Minister has indicated, in answer to a question by the noble Lord, Lord Boyd-Carpenter, that the shire counties, possibly quite genuinely, grumbled earlier and they will now benefit. But is it not a fact that there will be a difference in the degree of benefit even to those shire counties? Can the Minister tell us what the shire counties originally contributed towards the £500 million surplus that has been found?
It is not often that I find myself in agreement with the noble Lord, Lord Boyd-Carpenter, but does the Minister not understand that those of us with a local government background know that those authorities which have not yet fixed their rates will find it extremely hard work to start recalculating the funds that are available? In the tight budgetary situation in which local authorities find themselves, even with the redistribution of this £500 million, does he not understand the chaos and the confusion over this type of policy, which is being pursued by the Government in regard to rate support grant, caused by making one Statement a few weeks ago and then altering it now? Does he not understand the difficulty in which that places local authorities in their forward planning schemes?
Lord Elton: My Lords, I am most reluctant to do anything to disturb the new found accord between the noble Lord, Lord Dean of Beswick, and my noble friend Lord Boyd-Carpenter. But I must tell the noble Lord, Lord Dean of Beswick, that we are not talking about a surplus and nor are we talking about an alteration to a recent Statement. We are talking about an exemplification of a recent Statement. The money in question is all money that was originally provided in aggregate Exchequer grant, and local authorities who
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spend above their rateable provision on a sliding scale get less and less out of grant in proportion to what they spend. The result of that is that less money comes out of the Exchequer for the local authorities. That money is recycled. Under the old system, and under targets, the money was taken out of the system and there was a marginal amount of recycling.
We now have a simpler system where this amount can be predicted with a certain amount of security at the beginning of the system, and we are making things more efficient and simple by telling local authorities that they will get at least x, and x is a named figure. It is not a matter of chaos and confusion. It is a simple piece of arithmetic for the executive of the local authority to convert that into the equivalent of the rate. It is helpful, it is efficient, it is an advance, it is widely welcomed by local authorities and it is of benefit to the ratepayers.
Lord Dean of Beswick: My Lords, so what the Minister is saying is that some of the local authorities that have already had financial penalties inflicted on to them under the previous Statement will get some of it back under this Statement, but they will not get all of it back? They will receive financial penalties under the original Statement.
Lord Elton: No, my Lords. I am saying nothing of the sort. The previous Statement described the system as I have just described it. This Statement says how it will work.
Lord Diamond: My Lords, in view of the anxiety which has clearly been expressed from both sides of the Chamber, can we have the Minister's assurance that this will not happen again next year?
Lord Elton: No, my Lords. I am afraid that I cannot predict anything about next year. I have already said that the only way this information can be obtained is from the local authorities themselves. As soon as it is available, the Secretary of State has made the position clear to them with the greatest speed and efficiency. If the alternative is not to tell them at all, I think the noble Lord would not like that.
Lord Diamond: My Lords, the alternative is to have a system which does not lead to chaos.
Lord Elton: My Lords, I am mindful of the strictures of my noble friend the Deputy Chief Whip on the last Statement that we had, that it should not turn into a debate. I am not in the business of defending the present system. We have not yet described the future system. I know that I shall have all your Lordships' eager assistance in trying to make the future system better than the present, so perhaps I had better leave it at that.
Baroness David: My Lords, I have one question to ask out of regrettable ignorance. I believe that I am correct in thinking that local authorities cannot now raise a supplementary rate. I understand that the Minister agrees that some authorities have already fixed their rate. If they are now to receive some form of benefit from this handout, then can they raise—I do not know what one might call it—a reduced rate?
Lord Stoddart of Swindon: Perhaps, my Lords, a supplementary rebate?
Baroness David: Yes, my Lords; perhaps a supplementary rebate would be the correct phrase. I will be very interested if the Minister can tell me about that aspect.
Lord Elton: My Lords, if a local authority has passed the point at which, for technical reasons, it is not possible to have another budget, then as I understand it the money will go to balances. It will then be very welcome indeed next year for this process, and the local authority will have had 13 months to think about the matter.

Charity Law
4.40 p.m.
Debate resumed.
Lord Houghton of Sowerby: My Lords, after more than 50 minutes of injury time, it is a little difficult to get the ball back into play. Whether or not your Lordships can remember it, we were debating charities. I am following the noble Baroness, Lady Faithfull, after her most interesting speech. I agreed with most of it—particularly in regard to the ineffectiveness of the institution of the Charity Commissioners and the need for a charities board offering guidance and counsel to overlook the vast and growing industry of charity.
I may be the only Member of your Lordships' House who has any really hard bullets to fire. I have been in the voluntary movement for so long and have worked in it so much that I have very respectful criticism to make of it. I shall disagree immediately with my noble friend Lord Allen of Abbeydale in the introductory remarks he made regarding the extension of indirect aid to charities through the taxation system. That kite is being flown all over the place, and my noble friend who introduced this Motion has brought it into your Lordships' House. I want to shoot it down.
There is too much needed of reform and improvement in the charity world, and there is far too great a crisis of present and future work in the Inland Revenue, to open up fresh avenues of tax avoidance and more indiscriminate tax relief and finance for charities at public expense. Reference has been made to our present system of covenants. The present Government introduced two concessions in regard to covenants. They reduced the minimum period of commitment and raised the amount of tax relief to the top marginal rate of the donor. In reply to a Written Question in another place on 4th April 1985, it was stated that there was a 93 per cent. growth in covenant repayments after those two concessions were made. In all, covenants were rising year by year at a rate of something like 16 per cent.
The proposal that is now being mooted is that single gift donations should be a deductible expense from the tax liability of the donor. The covenant gives the tax benefit to the charity. The new proposal is that the tax benefit should go to the donor although the charity would still have the benefit of the gross amount. The
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third party in that transaction—no sleeping partner he—would foot the bill of the tax concession made to the donor, which could be anything from 30 per cent. to 60 per cent.
Nobody has yet said whether it is desired that the new system of single gift tax relief should run alongside the existing system of covenants. Mr. Chataway wrote a letter published in The Times yesterday suggesting that many charities would suffer grievously if covenants were to be discontinued and the single gift system introduced. So we shall now be asked to keep the two systems in double harness.
What about companies? They already have the benefit of covenants and of a very liberal tax policy in regard to sponsorship expenses. Apparently it is now proposed that companies shall have the benefit of corporation tax relief on single gift donations to charities. The charities hope to obtain more money in that way, yet the Government want to reduce public expenditure. The Government are accused of cutting grants to voluntary societies. Is the idea of a single gift tax concession meant to replace direct grants? Is the tax system to bear indirect aid to charities in order to replace direct aid to charities?
What of the principle of the matter? In my opinion, the proposal reaches one of the fundamental principles of taxation. I do not have time to argue that point now, but I ask whether our charitable work is to depend upon donors who want to gain something for themselves and who cannot be charitable unless they do. If we are to adopt the American pattern of expenses deductible against tax then we shall import a racket—there is no doubt at all about that. The Inland Revenue would have a new area of tax avoidance to keep clean. There would be many administrative restrictions and complexities in order to do that.
Charities already enjoy large tax concessions: no income tax, no corporation tax, no capital taxes, important though limited relief from value added tax, and the benefit of repayments on covenants. Not mentioned so far is their substantial relief from local rates; mandatory at 50 per cent. and optional for another 50 per cent. I have tried to obtain some estimate of the total state aid that is given through those various channels to charitable bodies. The nearest that I can get to it is £500 million a year. In the reply to a Question in another place last year, it was stated that direct tax relief to charities could not be much less than £400 million. I would say that by now that figure must be more than £500 million. I believe that the new scheme will send that figure much higher still.
I ask this question: where might some of that money go? Do we not read the newspapers? Have we not been reading only this week about certain matters relating to charitable bodies? The point about a covenant is that it is a deliberate commitment. It is a commitment to separate for other purposes a part of one's income. Do we wish to encourage the single gift donation on a moral impulse, under undue persuasion, or even to satisfy the concept of charity without tears—all at tax relief of 30 per cent. to 60 per cent? How long will it be before the backlash? How long will it be before the scandals begin to appear? I ask that everyone should approach this matter with extreme caution.

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I am sorry that nobody appears to have referred to the report of the noble Lord, Lord Goodman, of more than 10 years ago. Nearly everything so far mentioned in this debate was referred to in the Goodman Report. However, my time is up. My noble friend Lord Allen of Abbeydale has enumerated the many respects in which reforms and changes are made. My message to the Chancellor is that he should not drag the tax man further into the funding of the noble work of charities. That work will be downgraded if he does.
Viscount Massereene and Ferrard: My Lords, before the noble Lord sits down, may I ask a question?
Lord Houghton of Sowerby: No, my Lords, I have had my time so I cannot rise again.
Lord Airedale: Before the noble Lord sits down may I ask whether he does not agree that the covenant system is not entirely appropriate for a sudden crisis such as a famine in Ethiopia?
Viscount Davidson: My Lords, may I remind your Lordships that this is a timed debate?
4.50 p.m.
Lord Mancroft: My Lords, would it be all right for me to get in a few words now? As time is obviously even more valuable than it was when we started this debate, what seems to be light years ago, I shall confine myself to one point only. What can we do to relieve the burden on the Charity Commissioners? We saw this very clearly and it was brought to our attention in the Brightman Committee, on which the noble Lord, Lord Allen, and I and many others served. They have far more work than they can possibly do. The committee's report, which I have here, is quite frank that the Charity Commissioners have far too much work and they do not know what they can do about it. The burden will increase. The noble Lord, Lord Houghton, has mentioned one new tax arrangement which he does not understand; and if he does not understand it I should not think the Charity Commissioners will either. I certainly do not.
We all thought that the welfare state would reduce the amount of charity, but not at all. People are much more charitable now than they were before the welfare state was invented. Since the noble Lord, Lord Allen, tabled his Motion on the Order Paper I have had no less than seven appeals through my letter box, all of them genuine and all of which I should have liked to support; and I expect that your Lordships have all had the same.
I have one suggestion that we might take to help them. Obviously we cannot have more Charity Commissioners with more space, more microchips and more computers. I suggest that we set up a body of assistant Charity Commissioners to deal with the lighter work and to deal with the easier stuff. They could be amateurs, volunteers and people with qualifications. Before your Lordships throw up your hands in horror, just think about the magistrates. About 90 per cent. of the cases coming before the courts in this country are tried by magistrates—amateurs, enthusiasts, appointed with
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great care, trained to a certain degree, and given refresher courses. They are unpaid but a thundering good job of work they do, too. Could we not find the same sort of people who are anxious to serve and who could act as assistant Charity Commissioners—retired bankers, retired merchant bankers, retired solicitors, retired charity workers of any sort? And they need not necessarily be retired. I say retired only because, unlike magistrates, the age factor does not come into it. They could be given the easier jobs to do, with a limit after which they must pass matters to the Charity Commissioners if need be. I believe that they would do the job extremely well; digging out dormant charities, digging out dormant trustees and looking at the simpler trustee accounts which have gone by default.
I believe they would do a great deal if they bore in mind one thing, and one thing only, which too often is forgotten; that is, the beneficiaries. Too often in the world of charity we get involved in all the legal niceties and we forget the one person who matters most of all—the beneficiary. I say that because I served for seven or eight years on the charity of my regiment, the Royal Artillery. I found it most interesting and rewarding work. I remember trying to impress upon my brother officers, all of whom were extremely senior to me, the story of the old Chancery barrister at the equity courts where I first started my legal career. He was appearing in a charitable case and suddenly to his horror heard that it had been settled. He threw up his hands and said, "What, do you mean to tell me that all this wonderful estate is going to be frittered away on the beneficiaries?" That is an attitude we do not want our assistant Charity Commissioners to adopt.
There are three sorts of people, to give your Lordships an example. There is the widow who does not know that she is entitled to any charity. There are plenty of those. There are the widows, the orphans, the lame, the sick, the halt and the blind who know they are entitled to some sort of charity but do not know how to set about getting it. Then there are those who know they are entitled to charity and know how to set about it but are too proud to ask for it. Those are very frequently found and those are the people I should like my assistant Charity Commissioners to be looking at.
That is the one point I want to make. I do not, of course, ask my noble friend the Minister to give an immediate reply to my suggestion, which I am quite certain will cause horror in the bosoms of all civil servants. However, perhaps he will be kind and offer to give my idea his mental hospitality for a short time. What the noble Lord, Lord Allen of Abbeydale, who so eloquently moved this Motion will say, I dare not think.
The noble Baroness, Lady Faithfull, said that the Home Office has some slight connection with the Charity Commissioners. Twenty-five years ago I was Under-Secretary of State at the Home Office. Twenty-five years ago Philip Allen, as he then was, was a very senior civil servant at the Home Office. We had several amiable discussions, but I confess that I cannot remember ever leaving his room and hearing the words "Yes, Minister" pass his lips. Indeed, on second thoughts I too often left his room seeing an expression pass across his customarily amiable features which, being interpreted, meant, "This young Minister should go and have his head examined." If I can come

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in between the two categories of initiatory genius and palpable nut case, I shall at least not have raised this matter in vain.
I can only say that, if there are any successful answers, I should be only too happy to be the first volunteer as an assistant Charity Commissioner; and I cannot say more than that, can I?
4.55 p.m.
Lord Denning: My Lords, I am glad that my noble friend Lord Allen of Abbeydale has put down this Motion. It seems to me that there is an urgent need today for reform in the law on charities and in its administration. The law as it stands at the moment is quite uncertain. It started in the days of the first Elizabeth when there was no income tax at all. It was re-enunciated in 1891 by Lord Macnaghten when income tax was small. Now in 1986 we have huge taxes and the elimination, evasion or avoidance of tax is a growth industry. That is the situation with which we are faced and the reform of the law is necessary.
We do not have much time available so I take only one illustration where the law of charity is at the moment most defective. My noble friend mentioned the Moonies. I take it wider. I take all those religious cults, as they are called, which at the moment have charitable status when they ought not to have it. They get tax relief. Your Lordships will remember the case of the Moonies. It was tried for six months before a judge and jury after the Daily Mail had exposed the Moonies and said what a pernicious cult it was and how young people were seduced from their parents, families were broken up, and the like. The Moonies, the Unification Church, brought an action for libel. The jury dismissed it and found for the Daily Mail and added a rider to the verdict saying that the tax-free status of the Unification Church should be investigated by the Inland Revenue department on the ground that it was a political organisation. The jury wanted an investigation but I am afraid that afterwards the Charity Commissioners went into the matter and considered that the law, as they saw it, was that the Unification Church still had charitable status and was entitled to the tax relief.
I need hardly mention that all these religious cults are imported from the United States of America. There are thousands of them in that country and there are hundreds of them here. The founders make great fortunes, like Mr. Ron Hubbard, who recently died, of the Church of Scientology; and like Mr. Moon of the Unification Church who made a fortune. He had tax troubles in the United States and was sent to prison but that did not affect his church. We have had the Exclusive Brethren in our courts. It was severely criticised by Queen's Counsel, Mr. Hugh Francis, a friend of mine. But the Exclusive Brethren apparently still has charitable status. As to the Church of Scientology, Mr. Justice Latey criticised it. It is corrupt, immoral, sinister and dangerous. Those are the cults which are coming before our courts and which are doing great damage, in many cases to family life. They get hold of well-educated youngsters of 18, 19 or 20 who are at university or the like. They get them into the organisation and brainwash them. They bend their minds and seduce them from their parents.
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I have had numbers of letters—I think they come to hundreds—from distressed parents whose children have been taken away into these cults.
The Earl of Longford: My Lords, if I may interrupt the noble Lord, may I ask a question?
Viscount Davidson: My Lords, I must remind the noble Lord that this is a timed debate.
The Earl of Longford: My Lords, is the Leader of the House going to say that that rules out any question, however brief?
Viscount Davidson: My Lords, I am not the Leader of the House. Questions at this time mean that other speakers may not have as much time as they would otherwise.
Lord Airedale: My Lords, perhaps we can have this matter looked into. I do not think it is a satisfactory situation.
Lord Denning: To come back to my point, my Lords, the question of charitable status was considered by the Charity Commissioners and their view of the law, as set out in their letter, is that:
"Any organisation professing belief in a deity or deities will be presumed by the Court to be for the advancement of religion and therefore charitable and that the presumption can be displaced only on grounds of public policy. Whether a particular religious group is contrary to public benefit and public policy involves fundamental questions of religious toleration which we believe can be determined only by the Courts, the Government or Parliament".
Applying that principle, the Charity Commissioners think it right to grant charitable status in these cases. I suggest that that view is erroneous. At all events, it should be reconsidered by Parliament or by a committee so as to get the law in a position where these religious cults are not given charitable status with all the immense tax benefits that this implies.
Indeed, I could go further. The Charity Commissioner gave an interview, which was reported in the press, in which he said that he would like this question of the advancement of religion to be reconsidered. He said that they had to go by the application which the trust, organisation or whatever it was had put down on paper and consider whether those purposes were charitable or not; and of course they could be framed by lawyers in such a way as to appear charitable. He said that he would have liked to go into the intention of the promoters to see whether or not it was in good faith. I would go further. I should like the charitable purposes of such an organisation to be judged not by their paper applications for registration but by the way that they carry out their work. By their deeds shall ye know them! So that is another ground on which I suggest that charitable status should be reconsidered and reformed.
The other matter, on which I should like to end, concerns the investigation of all the accounts of the charities. I have had letters too. In those organisations which collect money on the basis of charity—and I know of one case where there was a dear old lady who altered her will and gave £20,000 to a charity—where does the money go? There is no accounting and no check by any independent body. I am afraid that in many cases the majority of it goes into expenses,

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salaries and all the other rewards of the organisation, and very little goes to the good purposes which it should serve. Ought there not to be an administration which would inquire into all the accounts of these so-called charities, so as to ensure that all the funds are not used up in administration, promoters' expenses and so forth? That is another reform which I should like to see. Indeed, is the time not ripe for this matter to be reconsidered not only as to tax, which is very important, but as to the law itself and indeed its administration?
5.5 p.m.
Baroness Lane-Fox: My Lords, when the noble Lord, Lord Allen of Abbeydale, told me of today's engagement I silently congratulated him on his well-known sagacity for giving us an opportunity to bring together the views formed during the lifetime of the Select Committee. As its most humble member I shall be very brief in my remarks.
I joined the committee with background knowledge gained only from a few days when I was privileged to work in the offices of the Charity Commissioners researching some information. That experience of some years earlier was unforgettable because of the cobwebby and dusty state of the files and the lack of indexation to help me extract the information. I found this not only very bad for my asthma but also very surprising because it in no way corresponded with the polished image implied by the information which had been circulated about the commission. Theirs seemed to be a remote, still world, away from the real rough and tumble of life. No doubt all these things have changed.
However, more lately, the commissioners, and correspondence through various charities with which I have had connections, have emphasised the apparent timelessness of the work; so it was a relief to hear evidence that shed light on the reasons for these delays. It appears from the facts given by my noble friend Lady Faithfull that, with the best will in the world, in their present situation the commissioners could not bring to light immediately facts about selected charities.
The instruction to charities that accounts be submitted annually could almost be disregarded because if the accounts do not reach the commissioners there is no machinery to chase them up. This implies a very different outlook from that held by most organisers of charities, who feel in honour bound to submit their accounts. It also gives a somewhat different complexion to the charities who proudly assert for fund-raising purposes that they are a registered charity, the inference being that therefore they are of exemplary behaviour. Now we know that registration means precious little.
The inadequacy of the establishment of the Charity Commissioners as it is at the present time is especially notable because of the increasing number of charities which more and more need to make use of them. Surely the commission should be given the most modern equipment in order to cope with this new situation. The fact that the kind of money which is at stake is other people's money which is often
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contributed at great sacrifice, as was made clear by the noble and learned Lord, Lord Denning, must make the necessity to improve the facilities very strong indeed. The onus is upon the Government.
Last year brought news of the wonderful generosity of the public in contributing to appeals such as Bob Geldof's. When causes touch their hearts, people wish to give. But we have also been assailed by stories of most urgent need—the need for funds for scanners and kidney machines and different aspects of the AIDS problem, let alone the plight of many London hospitals. I am surprised that the Government do not now take the opportunity to devise a method to marry up these two very different aspects: the one aspect which is the wish to give and the other which is the need for giving; and to do it in a way which will attract those who wish to have a gamble. The aim should somehow be to prime the pump and not to forget that today very many funds go both to the pools and to bingo.
Surely through a co-ordinated effort this could somehow be done. My noble friend Lady Vickers has suggested a means. The success of premium bonds has shown that good prizes can promote the wish to give. Therefore is it not time to devise some up-to-date method to encapsulate these circumstances? Is it not just the time? Nevertheless, in my recent Question, asking that a national lottery be considered, I was shot down by my noble friend Lady Trumpington.
I very much hope that my aim and object will be seriously looked at. While the public at large are loath to pay their taxes, they very much want to find cast iron channels through which to support important and immediate needs. It was the results of a national lottery which provided the funds to build the National Opera House in Sydney, Australia. Over 30 countries operate such a scheme. Can we really afford to turn our back on it? Obviously the collection and redistribution of funds voluntarily given deserve the utmost care. It is towards that end that I wholeheartedly support the noble Lord's case for close and scrupulous examination and scrutiny of the law relating to charities.
5.10 p.m.
Lord Rathcreedan: My Lords, I am loath to take up the time of your Lordships on this matter, but I was a member of the Select Committee that sat on the small charities legislation. My speech will be exceedingly short, as there is only one point that I wish to make and it has been made by other speakers, in particular by the noble Lord, Lord Allen of Abbeydale, who introduced the Motion. It is the total inadequacy of the Charity Commissioners to be able to fulfil their duties.
Let me read from the Charity Commissioners' annual report for 1982, which says:
"Like other public departments the Commission is affected by cash limits and reduction in staff numbers, and inevitably the standard of work must suffer and delays occur. While we recognise the need to keep expenditure down, to keep a tight control and to obtain value for money, we are conscious of the fact that we are prevented from doing as much as we should like to do and are required to do by our judicial and other statutory functions and to do it as speedily as we should like".
It is clear that the Charity Commissioners are unable to carry out the statutory duties that they have to perform at the moment.

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I was also rather amazed to find, certainly at the time when the committee was sitting, that they said that they did not have a computer. I do not know a great deal about computers or how effective they are, but I believe that if there is one institution that should have one it is the Charity Commissioners. They could not tell us how many charities which should have been registered were not registered, nor the amount of the various charities. They admitted that they did not know which charities had made an annual return of their accounts. Further, they said that they had been having reductions in staff over the past few years, whereas the number of charities that have been registered has increased. One would imagine that in order to keep up the standard, let alone improve it, there must be an increase in staff.
The deputy commissioner was asked whether there were any procedures for identifying the charities which had failed over a number of years to submit returns, as bound by statute. Her reply was that there was no longer any procedure for doing so. There had been one, but it had had to be dropped a few years ago owing to cuts in staff. I feel that the Government have made an error in cutting the staff of the Charity Commission. It should either be substantially increased or the Charity Commissioners should be given an effective computer. In getting a computer I fear that they would have to get properly qualified people to programme it. That would cost money, and the Government will therefore say that they cannot do that.
There have been two suggestions, one by the noble Baroness, Lady Faithfull, and one by the noble Lord, Lord Mancroft, as to how the burden on the Charity Commission might be relieved. I hope that the Government will consider the two proposals. Finally, to my mind it is no good bringing in legislation to tidy up and improve the law on charities unless we are prepared to spend money to make more effective the work of the Charity Commissioners. Every new piece of charity legislation puts a further burden on them. Unless they are given the ability to carry out their tasks, it is pointless to introduce further legislation.
5.17 p.m.
Lord Auckland: My Lords, the House will be much indebted to the noble Lord, Lord Allen of Abbeydale, for enabling us to discuss this important matter. As my noble friend Lord Mancroft said in his speech, which was as usual most erudite, we all receive a multiplicity of appeals for well-meaning charities. That brings one to the question of whether there may not be too many registered charities. I instance two aspects. One is mental health, in which I have a particular interest, and the other is cancer research. I want to make it quite clear that I believe those involved in the charities, even in the multiplicity of appeals, are dedicated people. But such multiplicity makes the work of the Charity Commissioners much harder. It also makes it much more difficult for the general public, be it individuals or corporate bodies, who receive the appeals, to make up their minds as to where to subscribe.
Having said that, always in a subject of this kind there is a great deal of special pleading. My noble
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friend Lord Mancroft, for example, mentioned his old regiment. I make, very briefly, an oblique special plea for the Royal British Legion. Late last year, I had down a Starred Question about value added tax and the Royal British Legion. Obviously, I do not expect my noble friend the Minister, or any other Minister, so near the Budget, to be in a position to answer questions on value added tax. There is, however, an interesting paragraph in Appendix E, subsection 3, of the 1984 report of the Charity Commissioners, on the question of buildings.
As your Lordships will know, the Royal British Legion—I happen to be president of the Surrey county branch—has a number of buildings in which disabled ex-servicemen and women are housed. There is the anomaly, I understand, of a new building and extensions to a new building being zero-rated but of value added tax having to be paid if one wishes to build a recreation hall or even possibly a chapel where an existing building is concerned. I realise that this is a technical matter. It is, however, one that I hope that my right honourable friend the Chancellor of the Exchequer will view with some sympathy in two or three weeks' time.
The question of charities brings to mind another issue. Are there, among the multiplicity of charities—for example, in connection with cancer research—some which should consult far more with the medical profession? The technicalities of some of these charities must make it difficult for the Charity Commissioners to decide. I should like to conclude by saying that this has been a worthwhile debate. Those who operate the charities are providing a valuable service. I hope that the Government will be able to give some sympathetic thought to the points that have been raised.
5.22 p.m.
The Earl of Longford: My Lords, I gather that there are eight minutes available to me. I do not intend to take that long, unless I am interrupted. In that case, I shall look to the noble Viscount, Lord Davidson, to protect me as effectively as he protected the noble and learned Lord, Lord Denning. I should like to say, in passing, that it would be a bad day for this House if, in the course of a two-and-a-half-hour debate, no questions could be asked at any time. I should like to take up that ruling later with the Leader of the House.
We are grateful to the noble Lord, Lord Allen, for raising this question. The noble Lord speaks with great authority. I do not believe that he spoke today in his capacity of chairman of MENCAP. It is one of the most important and most valuable charitable bodies in the country. This is rather a relevant point when we are trying to ask ourselves how much liberty should be permitted to charities to try to change government policy. Certainly, spokesmen of MENCAP, at times—and this also applies to myself when I was chairman of the National Society for the Mentally Handicapped, a predecessor of MENCAP—have never hesitated to try to bring pressure on governments for a more friendly interpretation of the rules or, if necessary, a change of legislation.
All of us are connected with charitable bodies of one kind or another. I have been concerned with the

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founding of two and I am involved today in the founding of a third. I say at once that I have no complaints. I had better be careful because we charitable people are in the power of the commissioners. If we antagonise them, we are sunk. I shall certainly therefore say nothing critical of the charity commissioners. I wonder nevertheless whether they themselves would like clearer guidelines. It is a difficult subject. The more that you look into it, the harder it becomes, as the noble Lord, Lord Allen, will, I am sure, agree. I wish, however, to concentrate on the one issue of whether the guidelines for the charity commissioners could be clearer.
I should like to mention one charitable body that I was not concerned in starting but on whose council I sit. I refer to the Matthew Trust founded by that remarkable man, Peter Thompson, concerned with mental health in all its aspects, particularly the special hospitals, and also with victims of crime. Can one expect a body of that sort to do nothing to try to improve the attitude of the authorities towards the various beneficiaries that it is trying to help? It is inevitable as everyone knows, that those who run such a body want to see improvements in practice and possibly in the law of the country.
Without going into the merits of a particular argument, the Matthew Trust launched a campaign about three years ago to have nursing staff in the four special hospitals represented by nursing unions instead of by the Prison Officers' Association. The reasons should be obvious. I hope that, in saying this, I do not reflect in any way on the Prison Officers' Association. However, one could not expect the Prison Officers' Association to like the argument brought forward by the Matthew Trust. The association duly protested to the Charity Commissioners. The commissioners, at first, warned the Matthew Trust that, in adopting this line, it was not acting within the terms of charitable behaviour. Later, following some argument and various submissions, they changed their attitude and gave the trust the all-clear. I mention the case only to show how difficult it is in many instances to ascertain that what one is trying to do to influence policy comes within the terms of the Charity Commissioners.
In any group of people dedicated, as are all people, whether paid staff or volunteers, who run charities, to helping sections of the community who need help, the question arises as to whether or not it is their duty to bring whatever influence they can to bear on local authorities, the Government or whoever else seems to be in a position to improve the lot of the beneficiaries. In all cases that I can think of, not least in relation to MENCAP, a certain campaigning element creeps into the activities of those who care most for the people they are trying to help. At the moment, it is unclear how far that is permissible. I do not want anything too definite said about this. I might receive the wrong answer. One has to be extremely careful. The situation is far from clear. I am asking the Government whether it is possible to consider the idea of trying to provide the Charity Commissioners with clearer and more liberal guidelines.
5.29 p.m.
Lord Campbell of Croy: My Lords, I am glad to follow the noble Earl, Lord Longford. I commend the
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points that he has raised on the need for guidelines and their application to mental health. I shall not, however, pursue those subjects because I wish to raise one particular matter. First, however, I should like to congratulate the noble Lord, Lord Allen of Abbeydale, upon his admirable introduction to the subject. He has drawn attention to the untidy state of the law and practice in regard to charities. In particular he pointed out the difficulty in drawing a clear and equitable boundary between what is a charity and what is not.
The matter I wish to raise and on which I wish to ask some questions is this. The Charity Commission does not operate in Scotland. The commissioners' writ does not run north of the Border. In Scotland one deals directly with the Inland Revenue on all matters concerning which the Charity Commission would be consulted in England and Wales. My noble friend the Minister, Lord Glenarthur, will no doubt speak at the end of this debate about the responsibilities of the Charity Commission. I ask him whether, if he has time, he could add an explanation of how the Inland Revenue operate in Scotland in decisions on granting of charitable status to bodies who apply, in dealing with charities which are registered in Scotland, and in keeping under review the activities of those charities; because it certainly should be part of the system that changes in the aims or practices of charitable bodies should be monitored.
I have understood that the Inland Revenue have aimed in Scotland to follow the same principles and criteria that the Charity Commission follow in England and Wales. I would therefore first ask my noble friend whether that is correct. If it is correct, how do they co-ordinate and compare practice and cases? What is the degree of supervision? We have been told that there are 150,000 charities registered in England and Wales who are the responsibility of the Charity Commission. I assume because the population of Scotland is about one-tenth of that in England and Wales that we are dealing with about 15,000 or possibly less in Scotland.
We heard from the noble Lord, Lord Rathcreedan, just now that there is considerable doubt whether the Charity Commission have access to computers. The Inland Revenue have many computers so there is no difficulty as far as they are concerned, I am sure, in dealing with the Scottish charities in the way in which they deal with taxpayers. They have, if I may say so, a great reputation for thoroughness. I am not complaining; I am merely inquiring.
However, it seems to me that the charities registered in Scotland may be being put through the mill rather more than those in England and Wales and it could be that reputable charities in Scotland are being supervised and their accounts examined very much more closely. I cannot imagine the Inland Revenue in the normal way not examining the accounts submitted to them, but we understand that the Charity Commission have time to look at only a small proportion of theirs. I am a little sad to think that bodies such as the Moonies and other strange cults which the noble and learned Lord, Lord Denning, mentioned, are in the Charity Commission's field, whereas reputable charities in Scotland are being examined, it seems, much more closely.

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I have been involved with, and have advised, a number of charities based in Scotland over the years, especially at times when they are being founded and are starting up. I was chairman for Scotland of the International Year of Disabled People and from that, for example, a number of projects arose which sought charitable status.
It is important that the qualifications for charitable status should be made clearer because it makes a great deal of difference to the applicants whether or not they will receive various tax concessions. I am not complaining about the Inland Revenue in Scotland. They have processed without undue delay the applications with which I have been involved. But the requirements to qualify for charitable status appear to be very vague.
I do not ask my noble friend the Minister to describe them in detail. I was once privileged to hear, I believe, the best account available, which was given by the noble Lord, Lord Nathan, who had just been vice-chairman of a committee, about 10 years ago, looking into the law of charities. I was then chairman of a charity in Scotland. I invited him to address that charity at its annual general meeting and to give an account of the criteria which operated so far as the Charity Commission are concerned. He gave an absolutely excellent account, but it is clear that this is not an exact science. However, the decisions made mean a lot to the organisations which apply.
My noble friend will probably tell us when he comes to reply that the criteria are general and that the decisions are left to the good judgment of the Charity Commissioners. My inquiries are directed to whether the Inland Revenue try to apply the same process observing the same four categories to which the noble Lord, Lord Allen, referred in his opening speech, and whether they do this with a similar degree of vagueness and discretion when they are dealing with the cases from Scotland.
5.37 p.m.
Viscount Brentford: My Lords, I should like to thank the noble Lord, Lord Allen of Abbeydale, for introducing this debate at what seems to me to be an appropriate moment, when this Government have already taken steps to encourage charitable activities; and when there are leaks—true or not—that they are intending to take further steps along that path. It seems therefore a most appropriate moment.
I should like to make a couple of comments about the Charity Commission from my personal experience. Reference has been made by a number of your Lordships to delays through lack of resources. While that is undoubtedly true, I should like to record my appreciation of the way in which the staff of the Charity Commission can deal with matters of importance with both thoroughness and efficiency, and also with great speed when that is required. I personally appreciate this very much. It seems that they exercise good judgment on that matter when it is required.
I should like to make another point with regard to a remark of the noble and learned Lord, Lord Denning, on the question of further investigation when charities come up for registration. Again, I am impressed with
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the thoroughness with which the Charity Commission look not only at the paper work submitted to them, but require to know how the trust of the charity will be implemented by the trustees after it is formed and registered. I do not see what further steps they can take before registration than looking at the practical way in which the trusts will be implemented. I feel that that is highly commendable.
The main point which I should like to make is again touching on the very grey area which is the borderline between what a charity can do and what another organisation can do in the political field. The noble and learned Lord, Lord Denning, again touched on this, and if he were present I should like to ask him whether he has been able to work out a legal definition on how to separate a genuine religious charity from the cults about which he was talking. I have not been able to decide how to distinguish in this field which has been exercising the minds of people for some time. But I should be interested to know whether he has a legal definition to cover that.
The point I should like to make is on the problem that a charity—which exists to promote the Christian religion—finds when the political sphere is impinging on its charitable objects. Imagine, my Lords, a religious charity, which also has the power to teach and uphold Christian values in family life. The problem faces the charity when the law is going to be changed, or the law is being flouted, which impinges against its objectives. At the risk of being slightly technical I should like to make four points which it can do in this field. My basis for this is not my own understanding of the law but an admirable memorandum provided by the Charity Commission.
A charity such as this can comment to the Government after the Government have invited comments or suggestions from charities. A charity can comment on a Government Green Paper; a charity can supply information and arguments to Members of this House or another place after a Government Bill has been published; and, lastly, a charity can support or oppose a Private Member's Bill. This means that there are two things in particular which it cannot do which I should like to draw your Lordships' attention. A charity cannot support or oppose a Government Bill. It seems to me that there is nowadays a fairly fine line between a Private Member's Bill and a Government Bill. Again, there is a grey area between the two. A number of topics may be dealt with in either one way or the other.
Secondly, a charity cannot supply information and arguments to Members of this House or another place after a Government have expressed an intention to change the law but before they have published their Bill, unless they have actually requested comments. I suggest to your Lordships that it is beneficial for a charity to express its view on a Government's intention of changing law affecting charities prior to publishing their Bill.
This Government are committed to strengthening family life, but if a Bill were ever to come before your Lordships' House which negatively affected family life, the charity which I have suggested to your Lordships would not be able to oppose it before the Government published a Bill. I believe that that is an anomaly. It could do so if a change was being effected

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by a Private Member's Bill alone. I suggest that this is a grey area, an anomalous area, that could be tidied up by the law.
However, may I emphasise, first, that a charity should never be allowed to act beyond the scope of its charitable objects and, secondly, that it should never be allowed in any way to enter into a party political field. Therefore, I conclude by saying that I believe that there are anomalies in the law in this area which could usefully be tidied up by legislation. However, I am worried because last time I told my noble friend the Minister that there were anomalies in the law, he replied that the only way was to sweep away all regulations affecting it and have a free-for-all. That is not at all what I would advocate in this case. I believe that there is scope for tidying up the law in this context.
5.43 p.m.
Lord Prys-Davies: My Lords, we are immensely indebted to the noble Lord, Lord Allen of Abbeydale, for having initiated this important debate. I, too, should like to congratulate the noble Lord on his opening address. Our hope must be that some of his words and the words of other contributors to the debate will carry weight with the Government, because they are the words of men and women who are well qualified to speak about the initiatives which they consider to be necessary.
The statistics to which we have been referred this afternoon demonstrate that the charities sector is very large business indeed, and that it is growing. The statistics also show that the resources of charities are insufficient to enable them to cope with the demands made on them. I am sure that some of us who served on the Select Committee will recall the notable words of a witness who appeared before the committee. His charity could, without lifting a finger, disburse 10 times as much as it was disbursing to the poor, and it was disbursing £80,000. So the shortfall in that particular case was enormous. That is some of the backcloth against which Government policies of support for charities need to be considered.
However, there is another factor, and that is the generous response of the British public to fund-raising campaigns by charities. I believe that there is ample evidence that members of the public are willing to accept a heavy share of the financial burden of the ills of our society where they are satisfied that a charity reaches out effectively to its beneficiaries, and where the responsibility is not perceived to be that of the Government. I believe that those are the preconditions. However, there is a great response and this indeed is detailed in the Directory of Self Help and Community Support published by the Mental Health Foundation. We have heard that during the last few years there has been a growing demand for greater tax incentives to encourage companies and individuals to give to charities. Clearly, there are two views about the merit of this initiative, but I happen to believe that it is an initiative which ought to be considered with care and in the light of the American experience.
I should also like to refer to a paragraph in the last edition of The Sunday Times, where it was reported that:
"The Treasury is looking for incentives to encourage individuals and companies to make donations to charities to set them against
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tax. But the law on charities may have to be reformed first and Lawson may suggest the changes in a green paper."
Yet the case for reform does not rely on Treasury involvement in tax loss resulting from possible tax changes. It seems to me that reform is not simply a quid pro quo for tax incentives, and I suggest that the proper inference to be drawn from The Sunday Times report is that there is a need for reform of the law on charities and the procedures related to its administration.
To call for the reform of the law on charities is a pretty sweeping statement; it is almost as sweeping as calling for the reform of the criminal law. I think it is accepted that there is no single grandiose plan to be imposed from on high. Indeed, your Lordships have tabled a large number of proposals to tackle actual problems, but in the interest of the whole field of charities.
I should like to refer to the five or six proposals which appear to me to have won considerable support in the course of the debate this afternoon. First, the point has repeatedly been made that charities must be made more accountable to the Charity Commission and that accountability starts with the filing of annual returns. Yet, as we have heard, nine out of 10 registered charities fail to lodge their returns. Therefore, while it is a duty which is set out in the Act, it is a duty which is unfulfilled and unenforced.
It is suggested that trustees should be subject to penalties if they fail, or fail over a number of years, to file accounts. After all, why should the trustees of a charity be exempt from a legal duty enforceable by a penalty, when the same duty is imposed on a registered friendly society? Again it should not be beyond the wit of the Charity Commission to devise a system of identifying those charities which fail persistently to file their annual accounts.
Secondly, the Charity Commission should give a higher priority to the systematic examination of a limited number of the annual accounts, and ensuring that the accounts of every charity will be audited not less than once in a period of 10 years. Unless the accounts are examined and are audited, how can the commissioners put their finger on abuse before too much damage is done?
Considering that there are 150,000 registered charities, it would not be surprising if in fact occasionally there was evidence of abuse. But I should not have thought that there is widespread evidence of scandal and abuse. I think I should say that in fairness to the trustees of charities who try to undertake a difficult task. This possibility that the accounts may be audited is just as important as the filing of an annual return. Individuals are ready to comply with Customs' regulations at a port or airport of entry to a country because they know that there is a risk that their luggage will be examined.
Thirdly—I do not think this point has been made in the course of the debate, but it has been made outside the House—should it still be necessary to obtain the consent of the Charity Commission before trustees can sell or mortgage land? Would it not be possible to dispense with such a consent if the trustees were unanimous, if they certified that they were acting in accordance with independent professional advice, that

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the terms were the best available, and that in the case of a sale they had given notice in a local newspaper of their intention to sell and inviting higher offers?
If this proposal were to commend itself it would enable about 35 members of the staff of the commission to be redeployed to undertake more important tasks, such as the inspection of the accounts, examination possibly in greater detail of applications for registration of new charities, and in general to cut down delays.
Fourthly, the Government should consider what changes are necessary in order to help trustees who wish to appeal against a decision of the Charity Commission. We have heard, and we know, that to pursue an appeal in the courts is a difficult and an expensive task. It has been suggested that a suitors' fund should be made available to trustees who wish to appeal a decision and who have reasonable grounds for so appealing. There is another alternative. An alternative appeals procedure could be set up which would probably be both cheaper and quicker; and there is a precedent in other legislation where certain disputes can be referred to an appointed hearing officer.
Fifthly, there is a view that the commission itself is by today's standards, based on an inappropriate model; it is a model inherited from the last century. But there is some reason to suppose that in the present system the quality of management skills available to it may be more at fault than the structure itself. I believe that the noble Lord, Lord Allen of Abbeydale, hinted at this; that in common with all other public sectors the commission requires its share of good managers. If this is so, the problem should not be shirked. There may also be a case for a Council of the Charity Commission, as has been proposed, or again for assistant Charity Commissioners. But there is unease about the machinery of the commission, and a high priority should be given to getting the machinery right.
Finally, there is a collection of other important proposals which would require changes in the law. Thus, charities should be enabled to make a more direct contribution to the cure of, rather than merely the alleviation of, unemployment. There is a need to have another look at the fine boundary line between charitable purposes and political purposes. There should be a relaxation of the complex cy-près doctrine, possibly along the lines pointed out by the noble and learned Lord, Lord Brightman, and which has been incorporated in the Charities Act 1985.
It may be said that many of these proposals are not new; that they have been about a long time, and that many of them can be traced to the noble Lord, Lord Goodman. We are sorry that he is unable to be in the House today. If that suggestion is true, I can only suggest that that is a sad commentary on the state of affairs.
The speeches have drawn together a collection of worthwhile proposals. The debate has been a worthwhile debate. But all the speeches and the contributors call for change, and we look forward to the Minister's reply. I hope that he can say that the Government accept in principle that the time is ripe to consider a fresh advance, and that careful consideration will be given by the Government to the proposals which have been placed on the table.
5.58 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, before I respond in detail to this interesting and enlightening debate, it may be useful to set our discussions briefly in context. As the noble Lord, Lord Allen of Abbeydale, said there are in England and Wales over 150,000 registered charities. Estimates of the total income of the charity sector vary. A recent study of a sample of charities suggested that it might be in the range of £4·8 to £7·3 billion—perhaps 2 or 3 per cent. of gross national product.
The range of organisations which fall within the definition of charity is far wider than is commonly believed. Many people, perhaps, if asked to name a charity would mention one whose work lies broadly in the field of social welfare—whether at home, or since the African famine has made such an impact on the public's awareness of need, overseas. But universities, churches, the arts, training, research, conservation, the national heritage, all have their place in the charitable sector. That is why I join with all those who have paid tribute to the noble Lord, Lord Allen of Abbeydale, for initiating this debate today.
The charity world is an important and dynamic part of our community life and it is right that your Lordships should bring direct knowledge and considerable experience to bear on issues which affect the operation of charity law and the charitable world. The noble Lord, Lord Allen, has with his customary clarity set out his concerns about the operation of the law on charity. I am sure he will understand if I respond to the matters he has raised with varying degrees of precision, since one or two of those matters I shall, as he would expect, need to pass on to my right honourable and honourable friends with a responsibility for these matters.
The noble Lord, Lord Allen, my noble friend Lady Faithfull and my noble friend Lord Auckland raised the question of VAT on charities. My noble friend Lady Faithfull has a keen interest and enthusiasm for this topic, and my noble friend Lord Auckland brings to it his personal long experience with the Royal British Legion. He has shown an active interest in charities and VAT and, in particular, as it applies to residential homes. I am aware of the proposals made recently by the Charities VAT Reform Group for VAT relief in certain areas, and I know that there has been strong interest in another place in these proposals. I have listened with great care to what has been said. Having said that, I must immediately dodge the issue a little by saying, as your Lordships would expect me to say at this time of year, that these are matters exclusively for my right honourable friend the Chancellor of the Exchequer, although I will of course make sure that he is aware of the remarks made in today's debate.
On the question of tax the noble Lord, Lord Allen, made suggestions, the noble Lord, Lord Grimond, made others and the noble Lord, Lord Houghton, disagreed with both. But as the noble Lord, Lord Allen, said much has already been done on tax benefits, but improvements have been made in the last five years which are not so widely known as I would wish. Many small charities could do more to help potential donors take advantage of these reliefs, so that

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what they do can add to the benefit received by the charity of their choice. The freeing of gifts to charity from capital gains tax and capital transfer tax; the four year covenant and associated tax relief for higher rate taxpayers; the possibility of covenanted giving through payroll deductions; the extensions in the range of special VAT reliefs; all these are helping to strengthen charities. Publicity may help—the Customs and Excise have helpful explanatory leaflets on VAT and a more general leaflet. And a leaflet published by the Home Office Voluntary Services Unit has been widely distributed and is still in demand. On the general point on tax, as your Lordships would expect, I can say nothing more today.
Much of what the noble Lord, Lord Allen, and the noble Lord, Lord Rathcreedan, had to say today has focussed on the Charity Commission and its operation, and I should like now to turn to that. The Government are aware of the constraints under which the Charity Commission has to work. We recognise, too, the enormous efforts being made at the commission to respond to the demands being made on it. The noble Lord, Lord Allen, suggested that management consultants might be helpful in assessing the use of resources within the Charity Commission. Certainly this is an option worthy of consideration, but consultants are not always the best method of finding answers to the management of resources within the public sector. We are not concerned solely with a management exercise in the normal sense. We have to consider whether society expects and requires certain functions of the commission and to what extent those functions might assist or inhibit a healthy charitable sector. It is a delicate balance, it requires careful checks which are not always easy to assess in strict financial terms. The suggestion made by my noble friend Lady Faithfull that a council be appointed is again a matter that is worthy of consideration, but I am not sure that it would be desirable to distance my right honourable friend the Home Secretary further.
My noble friend Lord Mancroft suggested an assistant charity commissioner. This is another characteristically creative view to take and one that is worth considering. I hope my noble friend will forgive me if I do not follow him further down that road now.
Towards the end of the debate the noble Lord, Lord Prys-Davies, raised the question of accounts. I am sure that your Lordships will recognise that it is simply not realistic to expect the Charity Commission to inspect annually the accounts of every one of 150,000 registered charities. Indeed the noble Lord made that plain. The cost of simply calling in the accounts was estimated some years ago at about £0·5 million a year.
The commissioners have decided, sensibly in our view, to establish a unit to scrutinise the accounts of particular charities or categories of charities that are or could be of concern. I have to say that this unit is only now beginning its work and it is therefore too soon to give your Lordships an account of its acitivities, or to say to what extent its surveillance should be extended, but I believe that this selective approach is the right one. The noble Lord, Lord Prys-Davies, suggested that all charity accounts should be professionally audited. That is an interesting idea. It is worthy of further consideration, especially for the larger charities.
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My noble friend Lady Lane-Fox referred to the dusty files contained in the Charity Commission when she worked there. Both the noble Lord, Lord Allen, and the noble Lord, Lord Rathcreedan, pointed to computerisation. I understand that the commissioners will shortly undertake a study to identify the needs of all those who use the register of charities to establish a system which can best meet those needs. They are very conscious of the advantages of computerisation and of the need to update the information contained in the index. But it is a formidable task and it may well take some time to implement fully.
I have noted the suggestions made for the saving of resources, and I can assure your Lordships that these have been under consideration since the National Council for Voluntary Organisations made similar suggestions. I think it is fair to say that on the subject of consents to the sale of charitable property raised by the noble Lord, Lord Prys-Davies, under Section 29 of the Charities Act, 1960, the arguments are finely balanced. The Government appreciate the view that having to obtain the consent of the commissioners to sell land and buildings is seen by some charities as an unnecessary hindrance. On the other hand, there is concern that charitable property does not realise its full value on sale and that trustees are not acting in the best interests of their charity.
The noble Lord, Lord Allen of Abbeydale, suggests there could also be a saving on staff resources from raising the threshold of income for charities required to register. I understand, however, that the practical effect on the workload at the commission of such a proposal would be negligible since a great many charities seek registration voluntarily, presumably because of the public recognition and confidence they feel this will give their work. The absence of registration does not in itself remove the commissioners' jurisdiction over a charity.
I understand also the concern expressed by the noble Lord, Lord Allen, that the definition of what is "a charitable purpose" leaves something to be desired, and is out of line with today's views of public benefit. It is tempting to look towards a statutory definition, but is it a sensible or practicable way forward? Apart from the formidable difficulty of drafting a definition which would command widespread acceptance, would this not lead to a rigidity—which is part of the concern today—or (if open to any form of amendment by subordinate legislation) endless debate and confusion?
I can understand the concern of the noble and learned Lord, Lord Denning, that certain religious organisations have charitable status. That is why my right honourable and learned friend the Attorney General is challenging the commissioners' view in the courts. I noted the critical comments made by the noble Lord, Lord Allen of Abbeydale, on the charitable status of the Unification Church (the "Moonies"), and I will ensure that these are brought also to the attention of my right honourable and learned friend.
I can assure the noble Lord that we are considering seriously the suggestion that appeals in some circumstances against the Charity Commission's decision on charitable status should be publicly financed. The potential benefits are clear but what are not so clear, but are the subject of consideration, are

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the desirability of the concept of public funds being used to challenge decisions by the Charity Commission (whose actions are funded by public money and governed by statute), the potential consequences of such a precedent and the resource implications.
Reference has been made to the Charities Act 1985, which was the product of so much hard work in your Lordships' House over the last two years. I know that my noble friend Lady Trumpington was asked then to ensure that the Act she was piloting was given maximum publicity. The Act came into effect on 1st January of this year. The Home Office circulated detailed guidance on the Act to all local authorities concerned at county, borough and district level, and we believe that it was drawn to the attention of parish councils through their associations.
I am told that to the commissioner's knowledge the provisions of the Act have been publicised in at least 21 appropriate magazines and journals, so I do not think that we overlooked our obligation. It is of course very early days, but it would seem that there has been a great deal of interest in the Act. The commission have sent out over 14,000 leaflets on the Act's provisions. Several charity information bureaux and rural community councils, among others, have held seminars on the Act to which commissioners have contributed. About 100 resolutions or proposals for action have been received by the commission. Considering that the Act has only been in effect for two months, this is an encouraging level of reaction and I can assure my noble friend Lady Faithfull that there will be no difficulty in monitoring the effects of the Act. I understand that the chief Charity Commissioner has undertaken to report on this.
Perhaps I may deal more briefly with a few of the other points raised today. The noble Lord, Lord Allen, has raised the issue of political guidelines for charities, as did—and I shall come to him in a moment—the noble Earl, Lord Longford. I know that this is a matter which exercises some noble Lords. It seems to me that this is an area in which it is difficult to deal in abstract terms, and therefore I wonder whether there would be much to be gained from prolonged consideration and revision of the Charity Commissioner's guidelines. I know that the Charity Commissioners are quite ready to discuss and give advice on the activities of charities in real and not hypothetical terms. I think that this is the right way forward.
My noble friend Lord Brentford raised a specific problem. I believe that it is one that he perhaps could discuss directly with the commissioners as it is possible that his understanding of the commissioners' guidelines is a little narrow. I am sure that my noble friend will do that. I will convey to those concerned the view of the noble Earl, Lord Longford, that what is needed is clearer guidelines by the Government. So much depends on the tone and the context of a charity's political activities and its relation to the objects of that particular charity. The issue of charity advertising on television was not raised. It is in general one of interest and it is a matter which has been discussed with the IBA.
My noble friend Lord Campbell of Croy and the noble Lord, Lord Grimond, raised the matter of
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charities north of the Border. I am grateful to my noble friend Lord Campbell for giving me notice of his interest, which I welcome. There have been from time to time proposals that there should be a body in Scotland with responsibilities for the registration, investigation and supervision of charities similar to that which exists in England and Wales; although the noble Lord, Lord Grimond, seemed to suggest that England and Wales might have something to learn from Scotland. I am not sure that my noble friend Lord Campbell did not to some extent follow that as well. I understand that one such proposal from the Scottish Council for Community and Voluntary Organisations is currently under consideration.
In seeking information on whether the same principles apply north and south of the Border, I do not think that my noble friend drew sufficient distinction between a body registered with the Charity Commission and one seeking charitable status for tax purposes. So far as obtaining charitable status for tax purposes is concerned, I can say to my noble friend that the Inland Revenue apply the same principles—that is, the provisions of Section 360 of the Income and Corporation Taxes Act 1970—north and south of the Border. The level of supervision by the Inland Revenue, as I understand it, is the same for charities north and south of the Border. Their work, of course, is limited to ensuring what income has been applied to charitable purposes and not, for example, how well the charities are administered. Perhaps I may say to the noble Lord, Lord Grimond, that I hope he will be pleased to know that the court has held that Coeppler's bequest is charitable.
The noble Lord, Lord Allen, specifically mentioned the Trustee Investments Act. I can say to him that the Government are considering recommendations for reform of the Trustee Investments Act 1961 by the Law Reform Commission.
I am glad that my noble friend Lady Vickers raised the matter of what she referred to as charity chests. If I occasionally lapse into language which she does not like and call them "community trusts", perhaps she will forgive me; because of course the Government recognise the important role that these have to play. The Government have committed £100,000 a year for three years to help develop a number of local community trusts in England. These are to be independent charitable trusts which seek and distribute funds from a wide range of sources to help meet the needs of their local communities. We believe that they will increase the scope of partnership in tackling local problems between statutory agencies, private businesses, and other charitable donors and local voluntary organisations.
My noble friend went on in her speech to talk about experience in the United States and I noted with great interest what she said. My noble friend also raised the question of those who die intestate. Most of those who die intestate have families or relations with a claim on their estate; but the idea that the assets of those who die in that position and without relations might be transferred to a community trust is a new one about which I shall write, if I may, to my noble friend. I certainly hope, however, that community trusts will receive legacies from those who wish to benefit their local charities.

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I acknowledge that there is concern that the Charity Commission's resources are not adequate for the task they are asked to perform. As with all government expenditure, it is necessary to strike a balance between what is desirable and what is practicable, bearing in mind other demands. I note that some of your Lordships consider that the balance needs adjustment and I will convey this concern to my right honourable friend the Home Secretary. Try as I might, I do not think I could find a way of drawing together such a diverse and far-reaching debate into a neat conclusion. I shall therefore not attempt to do so but all of us are grateful, as I certainly am, to the noble Lord, Lord Allen, for focusing our attention today on the need to be aware of developments in the charitable world and their effects on the operation of the law on charity and the functioning of the commission.
I must say that I think—and indeed it has been expressed by others today—that all of us owe a great debt of gratitude to those who work so tirelessly and so persuasively on behalf of charities and raise so much money for so many very worthwhile causes. What they do fills all of us with a great deal of admiration. Another group of people who fill us with admiration are those who contribute so exceedingly generously to so many worthwhile charities, a point made by my noble friend Lady Lane-Fox and by the noble Lord, Lord Prys-Davies. We shall of course study with care all that has been said and I hope that I have been able to give your Lordships some reassurance that the Government are very much alive to the concerns which have been expressed in this useful debate this afternoon.
6.18 p.m.
Lord Allen of Abbeydale: My Lords, I calculate that I still have 14 minutes left and I hastily reassure my neighbours that I do not propose to use all of it. There are just one or two points to make. I think we have had a very valuable debate in such parts of the afternoon as have been spared to us by British Leyland and the rate support grant. As I said at the outset, I could not hope to cover all the points, and the debate has amply demonstrated that there was a great deal that I did not touch on. I should like to say that I was taken to task for not mentioning the report by the noble Lord, Lord Goodman. As it was I who persuaded him to take on that particular inquiry, it was very much present in my mind; but it had a rather narrower remit than the discussions today.
I am tempted to follow the noble Lord, Lord Mancroft, in reminiscences of life in the Home Office, but I had better resist that temptation; just as I am tempted to follow a discussion with the noble Baroness, Lady Lane-Fox, about the possibility of a national lottery. I must make one comment on the points made by the noble Lord, Lord Houghton. I am a very simple-minded and unsophisticated sort of individual. When I read in The Times an account by a Lobby reporter that charities are set to receive a multi-million pound Budget-day boost as the result of a radical change to the tax laws and I read a similar account by a Lobby reporter in the Telegraph, I do wonder whether it is entirely imaginary. But there it is. In my opening speech I implied that I very much hoped that covenants would remain.
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May I make just one or two other points. In response to something the noble Lord the Minister said in his very interesting speech, may I say that I myself shied away from attempting any statutory definition of a charity. I very much go along with the question which the noble Viscount, Lord Brentford, posed. If, for example, you are to distinguish between religions and religions, what sort of criteria do you apply? We had understood that the Attorney General was going to appeal over the decision of the Charity Commission to register the Moonies. All I can say is that I wish he would get on with it.
There has been some misunderstanding about accounts, I think. The statutory obligation to submit accounts is only upon the charities with a permanent endowment; the Charity Commission allow some of those to come in only every five years. But the Charity Commission can also ask any other charity to put in accounts at any time. The fact remains, as several others have said, that those accounts which do come in are not looked at.
Then, on the point about the care which the Charity Commission take in drawing up instruments, to which the noble Viscount referred, I am glad he said that. But the real trouble is that once the instrument is drawn up, with infinite care and complexity, no attempt is made to ensure that the charity keeps to its obligations.
Finally, as regards the computer, my only point was that if you raise the limit from £15 you would at any rate get rid of some thousands of entries on the register, which would simplify the preparation of computerisation—on which I am afraid my information is slightly less optimistic than that given by the Minister; but I am sure he knows better.
As the number of speakers today has shown, there is a great deal of interest in this subject. May I just say that the noble and learned Lord, Lord Brightman, did ask me to express his particular regret that he could not take part. He was chairman of the Select Committee which led to the Act last year and he was good enough to say that he was in general agreement with the points I have tried to put.
We have a great deal to think about when we come to read Hansard and I hope that some of the points that have been made will be found of value to the Government. In view of the widespread interest shown by members of this House on all sides, I could not help thinking of the familiar quotation from Pope:
"In faith and hope the world will disagree,
But all mankind's concern is charity:".
My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Housing (Scotland) Bill
Bill read a first time, and to be printed.

Higher Education: Institutional Framework
6.24 p.m.
Lord Annan Lord Annan rose to call attention to the case for a new structure for the governance and funding of the universities and polytechnics; and to move for Papers.
The noble Lord said: My Lords, in moving this Motion I want to put a case to your Lordships. The case is this. The present system of higher education must be changed. It must be changed if we are to give the present number of 18 year-olds higher education and to increase that number. It must be changed if we are to retrain key men and women in industry and business, and also the long-term unemployed. It must be changed if we are to keep in a few institutions the level of research that has made British scientists and scholars famous—research that has often helped industry, business and medicine to lead the world in developing new lines.
I am sure we shall hear from every part of the House this evening pleas to spend more on higher education but, with respect, I ask those who do so to reflect whether any government of any persuasion could sustain the system that was created between 1958 and 1968. In that decade we created eight new universities, turned the 10 CATS into universities, founded business schools and the Open University, extended postgraduate support and services for student health, sport, counselling and careers. A Social Science Research Council was added to other such councils, all of whose budgets were greatly increased. Then 32 polytechnics were created and the teacher training colleges were upgraded. That finally broke the bank.
Individually each of those acts was defensible, but together they were indefensible; and it was typical of the time that when Lord Todd's Royal Commission on Medical Education reported, the cost of purchasing sites and erecting buildings that they recommended was so astronomical that most of the proposed reorganisation was never carried out.
The expansion was not wrong. What was wrong were the principles on which it was financed and organised. That was our first mistake. We were right to expand the numbers of students and academic staff. We were wrong to think we could give all students a Rolls-Royce higher education. No country could do what we tried to do. Every Western country differentiates between its institutions. In America, colleges differ enormously in their aims and levels of funding. In France, the Grandes Écoles are elite institutions, whereas in the universities the staff-student ratios (as they are in Germany and Italy) seem to us preposterously bad. But even in American universities the ratio is far worse than ours at undergraduate level.
I think we got the finance wrong because the organisation of the system was wrong. With the wisdom of hindsight, I wonder whether Mr. Macmillan (as he then was) was well advised to appoint as chairman of the committee a celebrated professor, Lord Robbins, and, as his henchman, the wiliest of vice-chancellors, Sir Philip Morris. Was it wise to have university academics in the majority on the Robbins Committee? No one can doubt the idealism of those men, but they had such a respect for the academic model they knew that they showed little understanding or sympathy for any other model. They were wrong to accept without examination that all universities should be treated exactly alike. The trouble was that they wanted their recommendations to be acceptable to their colleagues, their fellow dons
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in the common room. That was not what happened in 1853, when the dons were outraged by the proposals of the Royal Commission on Oxford and Cambridge. But Lord John Russell stood firm and insisted on reform.
It was much to Mr. Crosland's credit that the Labour Government rejected the proposals for organising higher education on the lines advocated in the Robbins Report. Instead, Mr. Crosland set up the binary system—and I remember Lord Boyle saying to me that he, too, had he still been Secretary of State, would never have allowed the whole of higher education to move out of public control. But Mr. Crosland, too, made his mistakes. The binary system was inflexible and he insisted that the 32 "polys" he created should have parity of esteem with the universities and give three-year degrees. What was as bad was that he allowed the polys to slip out of his grasp and into that of the local authorities. The local authorities gave them so much freedom to develop as they wished that the polytechnics became arty-technics.
We have ended up with a system incapable of reforming itself—with autonomous universities and local authority-controlled polytechnics. Everyone in the universities blames Sir Keith Joseph for their present plight. That is unfair. The Secretary of State has no powers over them. He cannot tell individual universities how to change themselves. He cannot modify the polytechnics. His only sanction is financial.
Over the years, the universities have shown that they are deaf to any hint from Government on how to change their habits. In 1969, they rubbished Mrs. Shirley Williams's 14 points. In 1981, when they were forced to cut staff, they inflicted the maximum damage on themselves by failing to cut out whole departments and by encouraging some of the best of their staff to retire. Lord Melbourne once said in this House:
"Universities never reform themselves. Everyone knows there is too much competition and jealousy."
That was why our forefathers set up no fewer than three Royal Commissions on Oxford and Cambridge and several committees of inquiry on London. Just such a fundamental inquiry is needed today to find remedies for our present discontents.
What could those remedies be? One could be to designate certain places as centres of excellence and remunerate the staff and fund the research at a level higher than that at other institutions. Another is to designate numbers of universities as centres for liberal studies—scientific as well as the humanities—in which no postgraduate work is done. Hundreds of such universities exist in North America, and excellent many of them are. Another is to make the staff ratios in most institutions less opulent. Lord Robbins argued for years that that should be done. Another is to recognise that in all institutions it is perfectly natural for senior scientists and technologists, whose best creative work is behind them, to spend a considerable part of their time in raising funds for research. That is what Nobel prizemen in physics in America do. It is what the vice-chancellors of Aston and Salford have done with conspicuous success.
There is another possibility, which is to make the polytechnic degree a two-year course, or to admit all

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students in universities and polytechnics to read for a two-year course and give a third year only to the most proficient in examinations or to those who, in the judgment of their teachers, have the greatest promise. We could give students at all institutions a two-year course leading to a degree, with a further two years for the few who need specialised professional training, most probably at another institution.
Another line to pursue is to differentiate between classes of students for eligibility of grant. For instance, all students should receive some grant, but only the poorest should receive a full grant. I fear that under the present Government that does not seem to be much of a starter. We should make the students in all but a few universities and subjects pay higher fees if they come from a different region, as is done in each state of the United States.
Have we ever asked ourselves why all academic staff in universities or in polytechnics should be paid on the same scale? Why nearly all universities offer a spread of subjects from mathematics to languages? Some of your Lordships may be saying, "What do the University Grants Committee and the National Advisory Board for the Polytechnics exist for if not to consider such matters?" There is a limit to the kind of advice that they can give at present. For instance, the chairman of the UGC has said that his committee cannot recommend the closure of a university. As the UGC is composed largely of academic staff from the spectrum of universities, is it likely to recommend the drastic changes needed to reform higher education? Should the UGC be composed mainly of university staff! Perhaps we need to do what has been done for broadcasting—a review on the state of higher education by an independent body every 10 years or so.
I hesitate to ask for another inquiry to be set up. Universities probably feel that over the past few years they have been inquired into to death. I hestitate for only one reason—there is already a committee in existence under Lord Croham that is studying whether any change is needed in the powers of the UGC. May I therefore ask the noble Earl, Lord Swinton, whether the committee's remit is wide enough to take into account the problem that I am raising this evening? If it is not, will his right honourable friend the Secretary of State consider widening its terms of reference? Furthermore, does the Secretary of State envisage setting up a similar committee to advise him on the powers of the NAB and whether the polytechnics should continue to be funded from the rates and governed by local government?
The Secretary of State has already said that he intends to take powers to alter the statutes of universities so that academic staff can be made redundant. Can he not seize this moment and do what many of his predecessors have hinted that they wanted—fundamentally to alter the organisation of higher education so as to make it a less crushing financial burden for the taxpayer? If we are to have—I hope to hear no voice opposing this tonight—higher education of the many, a great deal of it must be much cheaper. Equality of opportunity to obtain higher education, yes. Equality of funding, esteem and purpose for all institutions, no. That is a dream, and not even a pleasant dream. If we leave our institutions
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with exactly the same roles as they now have and financed on the principle of equal misery for all, we shall irrevocably destroy our reputation for education, learning and research.
Lord Boothby: My Lords, may I ask the noble Lord one question before he sits down? Does he agree that Lord Wolfenden was a good chairman of the University Grants Committee and that he proved that the system could be made to work well? I had personal experience as rector of the University of St. Andrews.
Lord Annan: I take note of the noble Lord's point. My Lords, I beg to move for Papers.
6.38 p.m.
Lord Flowers: My Lords, the noble Lord, Lord Annan, has proposed his Motion at a time when a great deal is happening in higher education and we are grateful to him. When he was vice-chancellor of the University of London, he asked me to help him a bit with the medical schools. Shortly after I finished my work he had the good sense to retire. Rumour has it that he presented the university with two ceremonial urns—one to bear his ashes and the other a notice which reads, "No Flowers by request".
Noble Lords will have observed, I hope with approval, that both urns so far remain empty. I hope that your Lordships have also observed that the London medical schools mostly flourish under their new arrangements. The remaining difficulties have more to do with the hospitals than the schools. That will remain the case until the University Grants Committee and the Department of Education and Science, which provide for the schools, and the National Health Service and the Department of Health and Social Security, which provide for the hospitals, can bring themselves to have a common policy for medical education. That is a subject which deserves a debate for itself, but it is an example of the need for reform.
The noble Lord has raised a great wealth of issues tonight. However, the main point that I wish to make is that the University Grants Committee should be a body respected by the universities and heeded by the Government, through which the universities should be accountable for the expenditure of public money and for the quality of their management of matters, both financial and academic, and which considers the universities as entire institutions, not merely as summations of their parts, which nobody else can do. That used to be the case throughout the great expansion of the 'fifties and 'sixties. Alas! it is no longer so. That should be a matter of great concern to the committee of inquiry at present being chaired by the noble Lord, Lord Croham.
The reasons are not far to seek. During the 'seventies, and even more during the 'eighties, the UGC has had to administer financial cuts of increasing severity, but has not been structured or staffed to do so in a convincing manner with adequate explanations given. And, no doubt partly for that reason too, its advice, quite clearly and repeatedly given to government, that the cuts were being imposed too fast for orderly application, was ignored.

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Instead of reforming the UGC to suit the task in hand, the Government began to push about behind the scenes, undermining still further the precarious authority of the UGC. They wanted independent studies of the efficiency with which universities used their resources, and they wanted an inquiry of some sort into academic standards. Both studies were, in fact, set up by the Committee of Vice-Chancellors and Principals. That is the kind of role that will increasingly fall to the CVCP so long as the UGC is treated by government in the way that it is because both studies could—and not many years ago would—have been mounted by the UGC itself.
Thus it was that we had Jarratt on efficiency and Reynolds on academic standards. And let it not be forgotten that the first recommendations of Jarratt were addressed to the Government, and they were along the lines that through the UGC the universities should be given financial indications for the medium term in which they could have some confidence, for otherwise there was no basis on which they could be expected to take and put into effect sensible management decisions.
There were numerous other recommendations to the UGC, to the CVCP and to the universities themselves. So far as I know, they are being vigorously pursued in all the universities and taken further, not least into the academic field forbidden to Jarratt and into governance more generally. They certainly are in my university where for many years we have had a high-level body of the kind recommended by Jarratt with a mixed membership, some academic, some lay, which takes into account the resource implications of academic developments and serves as a link between senate and council.
But the Jarratt recommendations addressed to the Government themselves have been studiously, even arrogantly, ignored. I am not today asking for more money for the universities, even though, Heaven knows! I could with justice do so. It was Mr. Peter Brooke, then Under-Secretary at the Department of Education and Science, who told the House of Commons on 23rd April last year that during the period from 1980 to 1987 he expected university recurrent grant to decrease by about 11 per cent. in real terms. During that same period, public expenditure is expected to increase in total by about 7 per cent.
The Government are perfectly within their rights to demand that the higher education budget be reduced, absolutely and relatively, if that is what they think will benefit the country, and in spite of the need for more and more specialised manpower—and, in these days, womanpower, too—and with no thought for the contrasting views and actions of those countries with whom we are in direct competition as a trading nation. What they really must not think themselves entitled to do is to demand faultless management on our part, when they so abjectly decline to provide the conditions under which good management becomes possible. Those conditions are mostly spelled out by Jarratt, but are totally ignored by government.
The UGC is in need of reform, but so is the Government's heeding of it and the respect of the universities for it. The UGC did well enough in times
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of expansion. Why has it started to fail in times of contraction? The membership and staffing of the UGC are no longer appropriate—that is why. The committee mostly consists, as the noble Lord has said, of hard-working academics able to judge the worth of teaching and research as well as anyone, but few ever having had to learn the skills of management. There are, I think, only three people from outside the sphere of education among the whole membership of the UGC.
The UGC is in fact much less expert managerially than many individual universities, which have upon their councils men and women from many walks of life, who share a tremendous experience of managing business of all kinds, who give unstintingly of their time and energy, and who provide a background of managerial realism against which academic battles are necessarily fought. And the UGC is also less well staffed in terms of managerial expertise than the universities which are accountable to them.
We have done more in London than possibly anywhere else in the university world to try to bring order back where senseless cuts have caused endless anxiety and confusion. We are reforming ourselves, as the noble Lord well knows. But without the wisdom and experience of the lay members of the university, I am clear that the task would have been beyond us. They have been in the forefront of trying to find solutions which strengthened the best we had to offer at the expense of those activities which could be spared or which could fit in better somewhere else. Full rein has been given to their initiative; and of course the London experience is by no means unique. The UGC needs men and women like that—not three out of 20-odd, but 10 at least and in the majority. Then they might be respected by the universities and heeded by government because of the quality of the decisions they would take and the advice they would give.
I have devoted most of my remarks to the reform of the UGC because I believe it to be the key to the whole problem which has been raised by the noble Lord, Lord Annan, tonight, even to the madness of the continuing cuts. But I do not expect to return to the plenteous days of the 'sixties, and a way therefore has to be found to conserve what is best in higher education as a whole, while meeting in some reasonable fashion the needs for increasing participation. Most of the nation's fundamental research is done by the universities, and the applied research and development that is done by others depends upon it. We have the word of the Confederation of British Industry for that in their own response to the Green Paper—and a very cheering and timely testimonial it is.
At the present time there is a fairly wide spectrum of institutions in terms of the mix of teaching and research. There are some universities that are extremely strong in research, and they can prove it by the number of research grants and contracts that they win on their own merits from external agencies, both public and private. There are some polytechnics which should probably be allowed to do more research than their resources allow, if similar criteria prevailed. And there are some institutions where little research of real distinction seems to get done. It has the virtue of being not a static system but a dynamic one. There are

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universities now strong in research that once were not; there are others which seem to have lost their once notable position. If as a nation we want some research of the highest international standards, as I am sure all your Lordships would desire, and if money is short, then we have to be selective; perhaps more selective than we really like to be, as the noble Lord has advocated. Otherwise, it is mediocrity all round, and I agree with him.
Of course, it is necessary to be selective about the right things, and in considering the institutions of higher education, research is only one of those things. It is also necessary to be selective about how one supports teaching. Here the UGC is I think in danger of making a capital mistake. Saying that they do not know how to measure quantitatively the quality of teaching, they have concluded that no selectivity is possible, and that we must all be paid the same for a given amount of teaching, however good or bad it may be. But quantitatively measured or not, we all of us can distinguish good from bad teaching, and regularly have to mark the results of it.
That was in parenthesis. The question raised by the noble Lord, Lord Annan, is essentially whether the selection of institutions where research should be allowed to flourish can be settled once and for all by some external agency or as the result of some powerful inquiry or whether—as is usually the case in human affairs—one achieves better results through evolution (guided evolution, if you like, my Lords, in response to clearly-enunciated national need and indications of performance, but evolution for all that), in which the successful are rewarded by being funded to do more, and the less successful are funded less, but nobody is forbidden to better themselves, because that way there is no incentive to improve.
If the UGC is reformed and restaffed in the fashion that I have tried to indicate and uses sensible criteria, and if there continue to be research councils that select proposals for research grant on the basis of timeliness and promise, then I would be content to leave the evolution of the university system in their hands.
6.51 p.m.
Lord Beloff: My Lords, the House is privileged in discussing so important a subject as this to have heard first from the exponent of radicalism where higher education is concerned, and then a reply by one of the most notable representatives of the academic establishment. So your Lordships have had both the case for radical change and the case for evolution.
My own sympathies, as might well be guessed, are, on the whole, on the radical side. However, I should like to put the argument in a slightly different fashion from that of the noble Lord, Lord Annan. I myself believe that the position in respect of higher education in this country is worse than even noble Lords who have spoken have indicated. We are really in a situation of crisis in which the Government do not understand the universities, the universities clearly do not understand the Government, and the tax-paying public do not understand either of them.
That is not surprising, because we have inherited a system of university governance and finance devised in a very different situation—and I would go back long
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before the expansion of the Robbins era—but which we are trying, I think unsuccessfully, to adapt to two national demands. One is, as the noble Lord, Lord Annan said, that we should have in this country at least a number of universities that can compete with the best in the world in research and in teaching—because without that, the country would be poorer spiritually, quite apart from any loss to industry from failures in scientific research. The other demand is the demand common to all advanced countries, and increasingly in developing countries as well, that the largest possible number of young people should have at least an acquaintance with what is meant by higher education.
What we have are institutions singularly ill-devised either to look at that problem or to present it and its financial consequences to the public. In the first place, we have no Secretary of State whose sole responsibility is in that field. What this country requires is not a Secretary of State for a multiform Department of Education and Science having a variety of different demands being made upon it by local authorities, the public, and a whole range of institutions. We require a Secretary of State for Science and Higher Education who could put the case for the first of those things at least to his Cabinet colleagues and make certain that the money was available for it.
One then thinks that a Secretary of State for Education, or perhaps a Secretary of State for Education and Training, relieved of that responsibility, might take a look at the schools. Another area of misunderstanding, or of miscomprehension, is between the schools and the universities. The schools complain that the universities interfere and dictate too much the course of the curriculum. The universities complain—and, I fear, with increasing proof—that in some fields of study at least, the schools are not supplying youngsters prepared for the demands that the universities have to make upon them. I should have thought that there was enough there for two Secretaries of State.
The noble Lord, Lord Flowers, believes that reform and enlargement of the UGC is the key. However, the UGC itself is a tremendous anomaly. It was created after the First World War to distribute to the universities funds provided by central government that were a tiny proportion of the universities' general income. The UGC's structure has no doubt developed and grown since then, but fundamentally it is not devised, and never was devised, to be the institution through which 90 per cent. of university funding would come. It is not surprising, therefore, that although the UGC worked reasonably well when money was plentiful, it has proved incapable of dealing systematically or credibly with the problems of contraction. I do not believe that anyone could blame the UGC for that.
It seems to me necessary that if there are to be institutions having major responsibilities for research in both science and the humanities, then they must have some kind of freedom from annual, triennial or even quinquennial current grants. The great strength of the American institutions, to many of which the noble Lord, Lord Annan, referred, is that they have massive endowments. If they were wholly dependent, let us say, on Congress, given what we know about

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Congress, or if they were wholly dependent upon the state legislature, given what we know about the state legislatures, then their position would be even more parlous than that of our own universities.
How universities, or a limited number of them, can be given an endowment and freed altogether from the apron strings of the UGC or its successor is a matter to which proper attention should be given. I do not myself believe that one can have the independence that is required to plan and to meet new contingencies if one has to go cap in hand for funds all the time, either to the UGC or to the research councils.
One other effect of the system of course has been that it has created a lock step, with the universities having to deal—as the noble Lord, Lord Annan, has said—with degrees taking up the same amount of time, measured in the same way, for very different intakes, and with little opportunity to experiment. Experimentation was something that, in our tiny way, we were able to do at Buckingham, with 40-week, two-year courses which have proved in a limited number of fields perfectly effective but which no state financed university felt able to experiment with. That tiny example perhaps shows that one thing that is necessary if one is to experiment—and we cannot expect universities to be static—is to have at least some control over one's own sources of finance.
The noble Lord, Lord Annan, referred to the fact that there is another way in which we have inherited a very difficult position; that is, in relation to what is sometimes called the student grant question. I would call it rather the question of student support. Having had a relatively small number of students in our universities until relatively recently, we felt in the period of expansion that it would be possible to emulate the level of material support—and this, of course, affects the staff-student ratio as well—which was thought manageable when the number of students was much smaller.
Our European allies and competitors have never thought it possible that the taxpayer should pay for a large number of young people to enjoy a comfortable, middle-class standard of living in their early years even when this is largely paid for out of the taxation of people who will never earn the incomes that they are being prepared to earn. We got into this situation—and the noble Lord, Lord Annan, referred to it—which is an extremely difficult one to get out of because parents have their expectations. Nevertheless, it is not a system which encourages expansion and it is a system, I think, which aggravates the shortage of funds and makes more difficult to explain what it is that universities require of government.
I think that if we are to have a serious look at these matters we need to look well before our present discontents and see whether we should not consider the examples that we are offered both by our European neighbours and, in a very different situation, by our friends in the United States.
7.2 p.m.
The Lord Bishop of Ripon: My Lords, one of the privileges of speaking in your Lordships' House is that one is able to share in debates with those who speak with great authority and experience. The noble Lords
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who have spoken before me all have experience as vice-chancellor and the corresponding authority that goes with it. I have no such authority and the point which I wish to make this evening is fairly modest, though I believe it is an important one.
It has to do with the place of the voluntary colleges within the system of higher education. The noble Lord, Lord Annan, referred earlier to a binary system of universities and polytechnics but it is the case, as your Lordships know, that there are other colleges of education within which the voluntary colleges find their place. Indeed, as I listened to the noble Lord, Lord Annan, describing a liberal arts college it occurred to me that it was not unlike the college at Ripon and York, of which I have the privilege of being a governor.
Before I speak of the place of these colleges I should like to make one general point about education and about the philosophy of education. As I listen to the debate on education I hear a number of voices saying that ways must be found to measure the efficiency of education; that we must in some way be able to quantify the results and that that may be done by reference to the part which those who are so educated play in the creation of wealth. It is said that we are investing in people and that we are doing so in such a way that that investment may be returned by the part they play in the creation of wealth and, by implication of course, in the salaries they earn in so doing.
However, I believe that to link education so closely with the creation of wealth is to make a grave mistake. I, as a churchman, would wish to argue, as I think I heard the noble Lord, Lord Beloff, saying, that there are much wider criteria which have to be taken into account. He referred to education for the spiritual state of the community and I would add that that spiritual state needs to take account of social awareness. I believe that there are many people who will wish to have the benefits of higher education without necessarily thinking that the consequences for them will be a high standard of living or a high salary. For instance, I think of many of those who find themselves in my own profession whose financial rewards are by no means large.
I wish to argue that the voluntary colleges, particularly the Church colleges which form a part of that voluntary sector, preserve such ideals. But I wish also to argue that they show some of the ability to be institutions which are managed in a way to which I believe noble Lords have already referred. The voluntary colleges do not, however, have the protection of the University Grants Committee. They do not relate through the UGC and are in fact funded by direct negotiation with the DES. It is remarkable, given the way in which funds have been reduced, that relationships between the voluntary colleges and the DES have remained so good and creative; and I should like to pay tribute to the DES for the way in which those relationships have been maintained.
Nevertheless, for that reason the voluntary colleges are in a particularly vulnerable position. They do not relate through the UGC and therefore they do not have a body with great power to speak for them. Nor, of course, do they relate to a local community, as do

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polytechnics, and therefore do not draw on funds from a local authority. For that reason they are exposed.
I hope, therefore, that any structure for the future governance of our universities and polytechnics will take account of the position of the voluntary colleges. I say that because I believe they have demonstrated a degree of management and an ability to survive in a very cold climate which other institutions might take note of. The college in Yorkshire on whose governing body I sit has seen itself as being in the business of survival for several years. Each year we are by no means sure that that survival will take us far into the future.
One of the ways in which that survival has been ensured is by the provision of vocational and professional courses for which it is believed there may be a demand, particularly in that part of the country. It is by that kind of management, in part, that an institution such as the college of education at Ripon and York is able to continue. I think it is also the case that such institutions provide that kind of variety for which the noble Lord, Lord Annan, was pressing in his speech. They do not have large research departments. Their costs are comparatively low. They have managed to survive with a very considerable reduction in the kinds of funds available. I am not complaining about that, but I am saying that it places enormous strain upon any institution to live with such uncertainty, knowing that such voluntary colleges can of course come to an end at any time.
I also believe that they provide a cross-section of education, both vocational and professional, and general degrees in the arts and sciences which I think makes a good mix and provides the context within which the kinds of ideals that I mentioned earlier can be realised. Were there to be a change in the governance and funding of universities and polytechnics there would be a danger that such voluntary colleges as I have mentioned would become exposed. I hope that the noble Earl the Minister will be able to give me a reassurance at the end of the debate that whatever changes are proposed will include some measure of protection for the voluntary colleges.
7.9 p.m.
Baroness White: My Lords, I am sure that anyone who heard the noble Lord, Lord Annan, speak in the debate on higher education last December will not be surprised that he has returned to the fray today. I am sure he is right to draw attention to the basic difficulties in our current situation although, frankly, he offered us such a wide choice of remedies—some of them incompatible one with the other—that we need a great deal further consideration to decide which are the most promising for the future.
The noble Lord, Lord Flowers, has described the current state of higher education, particularly in our universities, with such authority and knowledge that I have no intention of going over the ground which he has so admirably described. However, I take it that the main argument which is being put forward by the noble Lord, Lord Annan, is that the present Government really see no instrument of change to hand, however desirable, beyond setting up the
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Croham Committee and reducing resources in every direction. This situation has brought despondency to so many people in higher education and an air of uncertainty as to how they can possibly improve matters.
Whether or not it would be possible or desirable to elevate the Croham Committee into what I presume would be a Royal Commission on the lines suggested by the noble Lord, Lord Annan, is no doubt a matter for consideration. Of course it would delay any major reform. But possibly we have reached a stage, as I think the noble Lord, Lord Annan, is insisting upon, where we ought to go back and look at some of the fundamental characteristics of higher education.
I ought here perhaps to declare a modest interest. I am chairman of the Council of the University of Wales Institute of Science and Technology, though needless to say I speak today entirely for myself and do not reflect any corporate view, beyond perhaps mentioning how disappointed we are in Wales that there is no Welsh voice of any kind on the Croham Committee. At one time I was a member of the UGC under the chairmanship of the noble Lord, Lord Dainton, whom we shall shortly be welcoming among us, and Sir Edward Parkes. But I should like to go further back in history—more than twenty years in fact, and therefore pre-Robbins. The Robbins Report appeared in October 1963. A few weeks later, in December, the noble and learned Lord who now sits on the Woolsack, who was then Lord President of the Council and also Minister for Science and Technology (which is of interest to some of us), assumed departmental responsibility for university matters, including the University Grants Committee, which of course had until then been the direct responsibility of the Lords Commissioners of the Treasury.
In the period leading up to these exciting times many discussions were held on the shape of things to come. Earlier today I saw the noble Lord, Lord Taylor (the first of the four noble Lords of that name who have recently joined your Lordships' House) and I hoped that he might perhaps have felt himself able to speak in this debate. He was chairman of the pre-Robbins Labour Party committee of inquiry into higher education. I was a member of that committee and I still regret that some of our proposals were not heeded. We were much concerned with the binary divide and with the consequential demarcation between students, mainly in the same age range, who could find themselves on one side or other of the line, sometimes by a very narrow margin, with wide variation in the kind of provision that they could then expect.
We were concerned about this situation because we felt that to a large exent this was decided upon grounds which were not educational but concerned in particular with local government organisation. We were thinking not only of the technical colleges, which became CATs or polytechnics, as the case may be, but also of the teacher training colleges, which became colleges of education, the colleges of art, music and other such establishments. Of course, we recognised the necessity for specialised academic provision at various appropriate levels, but we could see no reason why, as regards their residential, social and sports activities for example, students could not be just

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students, sharing such facilities as could be provided for them in the most convenient and economical way.
I think that that would have gone some distance at least to meet the situation in which more elaborate amenities were provided for the majority of university students, though I would by no means go all the way with the noble Lord, Lord Beloff. I am certainly not in accord with him on the difficulties with which students will be faced because of the forthcoming cuts in their support. Nevertheless, I believe that we could have provided an equally satisfactory and a more economical basis for the social and residential arrangements for the larger number of students that we were contemplating. In our committee proposals we suggested that if this notion of combined operations for students seemed too revolutionary, at least some experiments could be tried out. We had in mind Brighton and Coventry as two areas which could have lent themselves to such a pattern of a cité universitaire, each with a variety of existing or proposed institutions of higher education. The University of Sussex came into being before the Robbins Report appeared, and Coventry had Lanchester and an excellent teacher training college before the birth of the University of Warwick. But this ship never sailed.
The late Anthony Crosland, for whom many of us had a high regard in other respects, was simply not prepared to abandon the binary line. So we now have a number of frustrated polytechnics which want to be universities and which for the most part enjoy far less in the way of amenities than their more upmarket university brethren. The academic problems of collaboration between polytechnics and universities are real, not to mention the administrative problems. Nevertheless I have recently been very much interested to note the discussions that are now in train between the University of Keele and the Polytechnic of North Staffordshire, which are trying to devise some measure at least of sharing academic responsibilities and resources. It seems to me that, if we are going to advocate any major pattern of change, such possible relationships will have to be examined. At the present time there seems to be no mechanism for doing this, other than the kind of local initiative which is being taken in Staffordshire.
I shall not presume to dwell on the intra-university realignments which may come about in the next decade or two. All I can say is that I am involved in the merger between UWIST and University College, Cardiff. The noble and learned Lord, Lord Elwyn-Jones, is the revered president of that institution. We are both within the federal University of Wales. I think he would agree with me that it is a very wearing and exceedingly expensive exercise, though I believe it will be thoroughly justified in the longer term. But, as in the University of London on a much larger scale, it seems to me that this kind of exercise must be faced in various other situations if we are to establish a more satisfactory system for the future.
I am sure that various noble Lords will be interested in the description of the experience at the University of Buckingham and in the advocacy by the noble Lord, Lord Annan, of some of the practices, mostly I think on the other side of the Atlantic, with liberal arts colleges, two-year degrees and so forth. No doubt they
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have their place, but I hope that we shall not go too far down that road. My own view is that, given the choice, if we must have limited resources and make choices, we should concentrate much more on mature students, mid-career retraining and what used to be called "women returners" to fill any university places which become available following the demographic decline in the 18-year-olds which will soon be upon us.
It would be criminal not to make use of such facilities as we have. But in my view the mid-20s to mid-40s age range is in some ways a better investment than liberal arts or two-year degrees on the American pattern. I should like to see much greater attention being given to that problem. Partly because of my experience with residential adult education, I am aware that the motivation of the mature student can often be more valuable than to spend the equivalent resources on a youngster who can gain a great deal of experience in life before settling down. If he or she is not particularly academically inclined one can get far better results a bit later on. Again, I feel that there is a gap in the consideration being given. I am not speaking simply of technical up-dating, but of a much broader concept of education.
In my view none of the spate of Green Papers, Statements, Jarratt reports and other documents of recent months has sounded the note of confidence that one needs if one is to encourage major reforms of the kind advocated by the noble Lord, Lord Annan. The note of confidence is lacking. There is uncertainty, apprehension, hesitation and disappointment in the university world. I hope that we can have a response from Her Majesty's Government that will indicate that they recognise that. They cannot simply cut resources and threaten further cuts of 2 per cent. per annum. Some of us were told this morning by the most authoritative sources in a Select Committee upstairs about the deficiencies in equipment grants. That will simply not enable us to face our responsibility as a country or to maintain our position in relation to countries that are no greater than ourselves but are our vigorous competitors in world markets.
We should be grateful to the noble Lord, Lord Annan, for asking us to think much more fundamentally than we have been doing. That is a great service. But a great deal more thought is needed if we are to restore to the universities and to the other elements in higher education the confidence that is required to re-structure our higher education system which I think we all believe to be essential.
7.22 p.m.
Lord Mackie of Benshie: My Lords, as with the universities, I shall cut my speech according to the time allocated to me. My excuse for getting up to speak is not that I am an academic, I can assure my noble friend, but I held the ancient office of rector in one of the newer universities in Scotland, the University of Dundee. As most people will know, Scotland has a much longer record of wider education than England, which I understand for years had only two universities whose names I have forgotten! In Scotland we now have eight universities, and I think that they should remain as universities. They should be independent centres. They may have to go cap in hand to a UGC committee, but whenever one gets

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money one's cap is in one's hand, whether it is an endowment or anything else. He who pays the piper does rather call the tune.
In Scotland the eight universities deserve a great deal more understanding than they can possibly get from a United Kingdom UGC. It would only be right for the Secretary of State to continue to fund the central institutions, the engineering colleges, and so on, and to deal with them according to the needs of the day. But the eight universities should continue to be independent centres of excellence and evolve their own contracts. In other words, they should be as independent as a proper university should be. I think that that would benefit Scotland. That justifies a sub-committee of the UGC or really a separate UGC to understand the needs of Scotland, and it would perhaps adopt a more consistent attitude.
I became rector of Dundee in 1980. It then came under the 1981 cuts and had to cut 15 per cent. in three years. It was a savage experience. When I went on to the court I was impressed by the practicality of its approach. For instance, long before the cuts it had a committee which re-examined every post that became vacant. There was no automatic reappointment. It was streamlining the different faculties towards the centres of excellence that were evolving. I must say to the noble Lord, Lord Annan, that the university had no choice in the 15 per cent. cut. It simply had to find redundancies where it could, and having to cut that money made a nonsense of its previous policies. It had to let go people whom it wanted to keep, but there was no other way to make the necessary cuts.
My noble friend had a point when he said that what is needed is better management of the cuts. The four old Scottish universities have strong and famous medical schools, and their people are involved in clinical work, ward work and operations in the hospitals. About 30 per cent. of the care in hospital wards and theatres in Dundee is undertaken by university staff There is not enough understanding in the allocation of funds from the UGC to the university of the fact that it has to pay its clinical staff on terms set by an entirely different body, the NHS. There are many other such inconsistencies. A Scottish UGC would understand that rather better.
We have talked about the excellence of teaching and the necessity to reward on merit. It is difficult for a university to do that when salaries are set nationally and they can make no award for merit. I understand that in certain universities in Canada the dean of a faculty has a merit fund from which he can reward people who have done good work; I understand that it can also be used to discourage people who are not wanted. If a university is to develop as a university it must have independence, and that means being able to pay and reward people as it would like and finds necessary and not as a nationally negotiated agreement dictates.
I do not want to take up too much time. My main plea is for consistency. The universities have not had that. The Government must think about what they want them to do. They must give them a target and stick to it. When the 15 per cent. cut was made no mention was made of a 2 per cent. cut for four years thereafter. We cannot go on like that and expect the
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morale of the universities to remain reasonable. They must have a target and be able to go for it.
Dundee, as I may have mentioned previously, is an excellent example of a good new university. It has raised £4 million from industry for research under contract. That is a creditable amount to raise. But, again, the Government have to be consistent. If they expect universities to raise money, they must reform the tax system in order to encourage industry to cooperate. It is all very well to say that the Treasury will lose income. Of course that will happen. But normally funds that pass through the Government and go somewhere else lose something in the process. If a contribution is made by a company, it is not only tax that is given but also the remainder. If the Government are serious, it is necessary that they should reform the tax system so that companies give more freely.
I conclude by simply saying that the Government should be consistent. They should enable universities to act as universities. If that happens, institutions throughout Scotland, at any rate, will continue to do the country of Scotland and the country of Britain a great deal of good.
7.31 p.m.
The Earl of Perth: My Lords, the noble Lord, Lord Annan, may be right. There is a need for radical change. In the meantime, to use his words, there is the present discontent and equal misery throughout all the universities of the country. The noble Lord, Lord Beloff, said that it was a crisis. The noble Baroness, Lady White, used very much the same language. It is about this "in the meantime" period and what the Government must do before making any radical changes and grasping whatever nettle is necessary that I wish to speak.
I have spent nearly 15 years on the court of the University of St. Andrews. My time there is coming to an end. It might be some help if, on the theme of what the Government should do in the meantime, I recall my experience during that time. I joined the court at a time when we had just split from Dundee. The noble Lord, Lord Mackie of Benshie, will forgive me if I say that we should perhaps join together again. I may not be popular for saying that. The noble Lord, Lord Tedder, may go along with me. We have many Scottish speakers taking part in the debate, the noble Lord, Lord Tedder, and myself both from St. Andrews. Let me go back, however, to examine what the problems were that we faced at that time.
There was a lack of facilities, a lack of numbers and a shortage of housing for the students. We overcame those problems partly by appeals and partly by help from the University Grants Committee. For example, the committee recognised that we had no adequate library. But at that time morale was good. The students were relatively happy. They saw quite rightly that it was to their advantage and became members of the court. We even balanced our budget. But what has happened since them? First, we were told that we had to cut. That first cut was probably a reasonable request. We managed, by one means or another, to achieve what we were asked. There was undoubtedly a certain amount of fat in the administration. Without

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exception, however, all universities at the time said, "Please, have us make these cuts over five years and not over three". But the Government were adamant. The sequel was most unsatisfactory and indeed costly.
What happened? We had to have haphazard cuts, and voluntary redundancies. Academic posts were not filled. The sequel was something pretty lopsided. We could of course have had compulsory redundancies. But unless legislation is introduced to this effect—I know that the Secretary of State is considering it—this will mean a tremendous struggle. It is the last thing that the academics will accept. I believe they are wrong, but that is another story.
We got over the first hurdle of cuts, and life began again. We saw a better future. More important, we thought at that time that the Government would give us level funding over subsequent years. We had one or two new chairs. We took other initiatives. Above all, we had more collaboration with industry and a new stress was placed on science and technology, just as the Government wanted. Then, however, things changed. The Government's promise of level funding no longer persisted. We were asked to make further cuts.
This time, there were no obvious economies to make. We had to consider cutting out whole disciplines. We had to consider cutting out music and cutting out maritime archaeology for which we are specially qualified. We had to consider cutting the botanical gardens side of the university, and also the Crawford Arts Centre. The arts centre may sound a luxury in London or Edinburgh. In a place like St. Andrews, it is essential for the students. Linguistics had already gone. How were we to balance things? One solution for many universities was the encouragement of overseas students. And very welcome they are! But there is a limit to the number that one should have. There is the dilemma that many well-qualified United Kingdom students find there is no space for them. I must say, however, that the overseas students have saved us at St. Andrews from bankruptcy. It is as simple as that.
A new blow then fell. We were asked to plan for the late 1980s a 2 per cent. cut per annum. This was beyond all reasonable demands. And what after that? It was argued, I believe, on a statistical basis that as the baby boom declined there should be fewer students. Surely it should be just the other way round. There was a chance to have a higher percentage of students receiving education. What has been the sequel for Scotland? A body called STEAC—I must get its name right—which stands for the Scottish Tertiary Education Advisory Committee, has thought out the solution that Scotland should go it alone and that it should operate through the Scottish Office on the grounds that it might be a beneficent helper. Despite what the noble Lord, Lord Mackie of Benshie, says, I am confident that this would be totally wrong. I am a devolutionist. But this would be a disaster.
What would happen? At present we have 18 per cent. of the cake of the university grant. There are reasons for this—our system of education and the fact that we have many English students, who are most welcome. Our percentage in respect of other matters is under 11 per cent. Despite what the Government
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might undertake—the principals advocating this policy suggest that there should be a government undertaking that the cake would not be cut—the proposal is nevertheless politically most naive. No government can bind their successor. I am absolutely certain that if we went to the Scottish Office over the years we would find that our basis would be cut and the 18 could drop to the 11. That would be a disaster.
Lord Mackie of Benshie: My Lords, what I said was not that we should go to the Scottish Office. The Scottish Office was going to fund the central institutions. But I wanted a separate University Grants Committee for Scotland.
The Earl of Perth: My Lords, I am glad of that. I am sorry if I misunderstood. However, there is another reason for my strong belief that this is wrong. I think that all the universities are, if I may put it this way, in the same boat. We all have our contributions to make. We should all stand together and not try to divide, because to divide is fatal. I hope that this idea of devolution to the tune of the Scottish Office will be dropped. I am not at all averse to a sub-committee—or whatever form of University Grants Committee it may be—to help those who are concerned with the overall problem; but that is as far as it should go.
I look with sadness and dismay at what I find is the morale of the university at the present time. I beg the Government to stop, to look, to listen and to consider that until they grasp the nettle of change they must continue to help at the present level and must not keep on trying to have equal misery for one and all.
7.42 p.m.
Lord Hunter of Newington: My Lords, in 1982 there was an important event very relevant to tonight's debate. The advisory board of the research councils and the University Grants Committee set up a joint working party to survey for the very first time, I believe, the support of civil science by the Department of Education and Science through the UGC and the research councils focusing specifically on university scientific research. The report is of the greatest importance because it portrays the situation after the first round of university cuts and inevitably therefore cuts in research support, threatening the "well-founded" department provided by the UGC—so much the pride of successive governments—and creating the environment for specific staff and equipment grants from the research councils.
There is another dual support system of a somewhat different kind, to which reference was made by the noble Lord, Lord Mackie. That is the support by the grants committee and the Department of Education, on the one hand, and the Department of Health and Social Security, on the other, for medical education.
However, to return to the joint ABRC-UGC report, one thing that adds to its significance is that Sir Alec Merrison's successor, Sir David Phillips, as chairman of the ABRC, giving evidence to your Lordships' Select Committee on Science and Technology only a few weeks ago, made essentially the same points of importance that were made by the joint working party. The principal observation by the working party was that, because of public expenditure decisions, the capacity for universities to undertake basic research was being seriously impaired.

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Lord Rothschild, in his report in 1971, listed the questions which one cannot answer about government research and development. Those were questions such as: what research and development are we doing that we should not be doing; or, is there an adequate machinery at the centre critically to evaluate the overall research and development programme; or, is the balance between pure and applied research about right? Your Lordships' Committee on Science and Technology has made, in successive reports, substantial progress in the examination of research and development. Their greatest achievement is perhaps persuading the Government to publish an annual report on government-funded research and development. There are, however, difficulties in taking this too far and Lord Rothschild's questions posed as above are unanswered and likely to remain so.
The reason I have referred to Lord Rothschild's view about research and development is that the same can be said about universities. There are some things which one cannot assess or answer. The conduct of research council funding and grants depends on peer review and it must be recognised that it has limitations. One cannot achieve a cost-effective situation because of some uncertainties which are important and continuing. Sir Alec Merrison's joint committee was also impressed by the dual support system which they would like to see continued, as does Sir David Phillips. It caters for the nurturing of new talent, for the emerging of innovative work, and additional support for promising new lines.
The advisory board for the research councils then and now has this view, as has the UGC. I believe that the Secretary of State has made substantial efforts to respond in a difficult financial situation. The universities therefore feed the research councils with new ideas and proposals. Cutting this university basic research may have the disastrous effect that these ideas and proposals of quality will not be reaching the research councils, leading to a very significant slackening of their effort. A vital part of this system is that there should be a little slack in UGC funding, allowing the modest support of the unexpected which has not been budgeted for. It is this slack which is disappearing but it is this slack which is also anathema to cost accountants and, I believe, the Treasury. Without it, universities may be severely crippled. Availability of research funds to respond to these innovations is just as vital.
How can all this be handled for the benefit of British research? Almost certainly not by committees in the first instance because it depends upon trained people with hunches and crazy ideas. All committees tend to be conservative, reluctant to face the unknown. The collaboration of all five research councils on biotechnology wanting to do the same thing is not a management decision. It is the decision of trained scientists with similar goals.
The joint committee's concept of a properly supported research area is funds for the recruitment of "new blood" posts, and, secondly, the provision of basic equipment. New blood posts, an idea of the Science Research Council, has been accepted by the UGC and the universities. It is simple but brilliant and workable. But linked to this is accommodation and
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resources. One striking point about this country is that so many research institutes are isolated and there is a sharp contrast between that and the MRC policy of putting research units beside universities. This has not been followed. As developments and trends change, accommodation could be redistributed or reallocated. Could it not be a government decision now that all new accommodation for government research institutes should be located at or near universities? How many could be moved now? This is the complementary move to the development of science parks with industry. The isolated nature of Ministry of Defence research institutes comes to mind. But this is perhaps something to consider in preparing these centres for the 21st century.
Against this background one must examine the proposals about research contained in the Government's Green Paper The Development of Higher Education into the 1990s. Paragraph 5.3 states:
"The Government's aim is that the contribution of the higher education system to the nation's research effort should continue at about the present scale".
To university staff this means personnel, equipment and accommodation at the present scale, but from a study of the related paragraphs it is perfectly clear that to the Government this means money. Let me take only one example—equipment. Successive reports, including that of our own Select Committee, have made it abundantly clear that equipment costs are escalating and, therefore, in order to continue with the same scale of research, future costs will be substantially greater than they are at the present time. Therefore, paragraph 5.3 really means substantial cuts.
There is no disagreement with the statement in paragraph 5.4 that there is no evidence that all academic staff must engage in research; I think that is agreed. The same applies to paragraph 5.5, that the UGC should be more selective in its allocation or research support. But the Government and the UGC have to be consistent in this matter. That the UGC is more selective on anything more than a temporary basis means a departure from the "block grant" principle, and it looks very strange when considered along with paragraph 5.7, which states:
"Universities will still have discretion over the funds at their disposal."
What does all this mean? I hope that the Minister will be able to enlighten us.
In these circumstances, it is difficult to see how the original remit of the UGC can continue to be discharged and how they can maintain the autonomy of the universities, which is their job. The "well-funded" department provided by the UGC for other sources of funds than research council funds, is to my mind a new invention of the writer, or writers, of the Green Paper. I hope that the Minister will be able to clarify this point. If this were to be so, the UGC element on basic contributions towards research funds would have to be very substantially increased, particularly in the engineering departments.
Paragraph 5.7 states:
"greater concentration and selectivity may mean that some departments or even whole Universities will lose research funding from the UGC."

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This is so serious a proposal that I feel it should be fully examined. What about the block grant and autonomy? The University Grants Committee under present circumstances could not remove all research from universities, and the statement is, in fact, contradicted by a later part of paragraph 5.7 which makes it clear that the block grant principle holds and the grants committee's job is to protect the autonomy of the university. What seems to be proposed is a fundamental alteration of the UGC's role and it proposes the introduction of intensive peer review. This idea has been linked in the minds of some to "upgrading" the grants committee and handing over to its sub-committees decision-making powers, like the research councils do to their boards. If these things happen, the grants committee will be removed from its present role, and in the minds of many this is a recipe for chaos.
7.53 p.m.
Lord Tedder: My Lords, it is perhaps cheek of me to speak when your Lordships' House has such a galaxy of former vice-chancellors and distinguished academics, many of whom have spoken today. However, just as the general staff are behind the front line and see a different picture from the soldiers in the front line, so the vice-chancellors see the overall picture, but this is different from the picture seen by academics who are still working in the laboratories and lecturing in the lecture theatres.
It is only North Sea oil which keeps our head above water, and what is the relevance of that? Although there is controversy over how soon it will run out, it is a diminishing resource and eventually the oilfields of the Gulf States will also run out. Long before then Britain will be without any major resource except its trained people. We should therefore be doing all we can to increase our scientific manpower.
At present proportionally fewer British students go to university than in our competitor countries, the United States, Japan or Germany. Worse still, on current figures so-called "level funding" means that by the end of the decade most university chemistry departments will be without money for consumables. Taking figures for my own department, for the 1984–85 session the chemistry department of the University of St. Andrews received a pay-roll of £567,000 and a class grant (for spending on chemicals and other consumables) of £62,000, giving a total of £629,000 for chemistry in one year.
If we take the Government's figures, the grant will be supplemented by 2 per cent. per annum, but against that the salaries are likely to increase at a rate of at least 5 per cent. a year. On these figures, for the session 1985–86 the salaries would have increased to £641,600, while the money available to the class grant—the chemicals, etc.—would have decreased to £46,000. If we continue these calculations until the end of the quinquennium, 1988–89, we find that there is insufficient money to pay the salaries even if there is no expenditure at all on chemicals. In other words, if inflation continues to rise at 3 per cent. above the so-called inflation index until the end of the decade, we either have no chemicals in the chemical laboratories or we have to save on pay-roll expenditure. This
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implies pay increases of less than 2 per cent. per annum or all vacancies to be frozen. How you get either of those past the unions is beyond me!
We have been encouraged by the Government to take in more students from overseas who will pay full cost fees. Accordingly, my university has increased its overseas fee income from £800,000 in the session 1983–84 to £1,500,000 in the present session, 1985–86. This cannot go on indefinitely. Too many overseas students would change the character of St. Andrews. Furthermore, it would be intolerable if we had to reduce the number of well-qualified Scottish students so that we could take in more indifferently qualified foreign students. Let me repeat that because it is so important. It would be intolerable if we have to reduce the number of very well-qualified British students so that it would be possible to take in more indifferently qualified foreign students.
I have not mentioned the equipment grant, but taking the DES's own model, the equipment grant is running at about 20 per cent. below what is considered necessary to provide a base for research and innovation. The other source of income to the universities comes from the research councils. Chemistry comes under the Science and Engineering Research Council. In 1983–84 the chemistry committee of that council received 586 applications which, if funded, would have represented £26,800,000. These were considered by the chemistry committee. Fifty-five per cent. were graded Alpha, which means of a quality that should be supported, and 19 per cent. were graded Beta, which means that if there is money left over they would be worthy of support. The actual awards were 34 per cent. of demand by number or 24 per cent. by value—I hope that is clear. That is what was actually funded. These figures are very similar to the SERC's total expenditure. The demand for Alpha satisfied last year was 74 per cent. by number, or 48 per cent. by value. The overall demand satisfied was 26 per cent. by value. Thus, not only are the funds available to the UGC being cut so that universities cannot meet their teaching commitments or provide a base for research, but similarly the actual research funding is being squeezed so that the research performance of British universities is being seriously curtailed.
The universities have done their best to mitigate the problems caused by the original cuts. We understood that having coped with these we were to have true level funding. We have not had that. My Lords, there is much more that I could say, but I expect that your Lordships have had enough of this from us tonight, so I shall end here. However, I hope that those of your Lordships who are not on the university side will have some idea of what we are up against.
8.1 p.m.
Lord Wilberforce: My Lords, at this late hour in the evening and after the fine and authoritative speeches we have heard in the previous stages of this debate, my own contribution must necessarily be a modest one. I have, it is true, some connection with one of those older universities whose names escaped the memory of the noble Lord, Lord Mackie of Benshie, for the time being, but for the purposes of this debate I would rather put forward a point of view—perhaps the point

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of view—of a smaller, newer university which may be typical of many others.
For quite a number of years I have been Chancellor of the University of Hull. This is a small institution of under 5,000 students which has perhaps particular problems which relate closely to the present, or contemplated, constitution of the UGC. For the purposes of this debate I think I have to assume that for some time we are going to live with something like the UGC. I cannot place myself in the empyrean realms which were placed before us by the noble Lord, Lord Annan. I must assume something like it, and try to see where changes might possibly be made which would help us.
I start from the point taken by the noble Lord, Lord Flowers, which I found sympathetic, that the UGC is weak in management. He gave the numbers three out of 20, and of course that is arithmetically correct. But I agreed with him entirely when he said that the management ability of the UGC does not really compare with that which exists in many of the universities themselves.
Certainly our own council—and I know this to be true of many others, and certainly true of the University of Dundee—includes a number of very practical, very experienced men of affairs (businessmen, scientists, local government administrators, and so on) and the council has taken on board in a most efficient and wholehearted way the Jarratt report and introduced changes. The noble Lord, Lord Annan, says that universities cannot reform themselves. Well, in my experience they can and do take radical steps in the way of restructuring departments, reorganising schools, discarding disciplines and discarding courses. One can argue about what is reform and what is less, but certainly extensive changes are made.
As regards the UGC, in relation to smaller and more distant universities there are certain necessary and unavoidable distortions and difficulties. I am not in any way criticising the present body which consists of a number of highly intelligent, hard-working people who are given a totally impossible job. In the first place they cannot, and do not, visit these universities with any great frequency. They have no idea in many cases what really happens on the ground. That is an inherent, inbuilt distortion.
Then there are at least two great difficulties with which they are faced when they apply, as they have to apply, statistics, or answers to questionnaires, or demographic considerations to universities as a whole. Let me mention two of them. The first is what is called in the jargon the "diseconomics of small scale". We all know that when one increases one's output one hopes to get economies. Equally, when one is faced with reduction from a small base, one gets what are called diseconomics of scale. You cannot make reductions in proportion to the size from which you started.
The Government recognise this symptom in relation to education generally. In their Command Paper 7841 they refer to "inescapable diseconomies of the smaller scale". But this principle does not seem to have received recognition in relation to the universities and polytechnics. Surely it should. To any body, I
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would say, under 5,000 this particular factor is one of potent effect.
Then a second point of a similar kind. When one is trying to assess a reasonable expenditure in relation to an institution, that is not related and cannot be related in a linear manner to the size of the institution. In every case—and everybody recognises this, including the UGC itself—there are, as well as, say, numbers of students, all sorts of special factors, and there is room in the questionnaires for the special factors to be listed.
But what escapes notice is that these special factors have different relative weight when one comes down the scale of size. The noble Earl, Lord Perth, who is not in his place, referred to this in relation to his University of St. Andrews. What may not be a special factor of any great importance for a large institution with a large grant may be a decisive one for a smaller unit with a smaller grant. In other words, one has to recognise the relativity of special factors in relation to different sizes of bodies.
Then, finally, I should like to refer to one other factor of great importance which ought to be taken into account in relation to universities generally. The noble Lord, Lord Beloff, referred to two things which universities ought to do: the pursuit of excellence in research, and the training of youth. I suggest that in many cases there is a third factor of great importance, and that is this: many of the universities—and it is particularly true of civic universities such as Hull—make a significant contribution to their locality, not merely as an employer of labour, although that is quite significant, but as a centre and a source of social and cultural standards. This is particularly—but not exclusively—true of programmes of adult and continuing education, which a writer in The Times recently said was probably the most vital area in which education can develop at the present time. I was glad that the noble Baroness, Lady White, also referred to this point.
For example, for its size and income the University of Hull has the largest programme in adult and continuing education in the country. I cannot answer for Scotland. Maybe they can trump us there. Anyway, that is the fact in England. It is the sole provider of this service in a large section of east England, from Whitby down to Lincoln. That is an area of high unemployment. We believe that we have a role in training and retraining a workforce fit to compete in what one may call the knowledge world.
Is there not a case then for a social factor to be added into the usual equations? Can we not enlist the support of the Secretary of State for Employment—who, we know, is so sensitive to social considerations and who is doing so much through the MSC to advance them—to get beyond the statistics and the graphs? Where have the statistics and graphs led us? They have led us to terrible reductions in our capacity. They have led us to a reduction in our student numbers of 1,000 (a loss of 20 per cent.), and to a current programme—under the 2 per cent. with which we are threatened on top of all previous losses—with a loss of 109 academic and related staff. I shall not pile on the agony because the noble Earl behind me has already drawn attention to it, and it has been reinforced by the noble Lord who has just spoken.

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Is this kind of reduction what people really want? Is there not a case for two things? First, there is a case for a more flexible conception of state support and the way in which state support is administered; and, secondly—I quite accept this—a questioning of the almost total dependence of universities on state funds; in other words more private support in the United States style with the taxation consequences and so on. Obviously, I cannot pursue that point this evening but I am glad that it has the authoritative support of the noble Lord, Lord Annan, and other speakers. That is surely a second factor which we have to add to the future, which is now looking rather gloomy.
8.10 p.m.
Viscount Hanworth: My Lords, the noble Lord, Lord Annan, will remember that some 15 years ago after his Reith lecture I initiated a debate on whether university education was fulfilling the long-term needs of the nation as a whole. I spoke again on this issue on 31st March 1976. I do not believe that on the first occasion we were in complete agreement, but, having listened to what he said tonight, I think we are probably very nearly so.
Today the Motion is concerned with funding the universities and polytechnics. But right funding must surely depend on how the objectives of higher education are achieved. Much has changed since I criticised the universities, but even in 1976 they still seemed to believe that whatever they taught and however badly they taught it, because it was taught in a university it was self-justifying. Looking back, I still believe that I was right in thinking that the Robbins Report was a disaster. It had the polytechnics rushing to become universities with the spawning of arts and social science courses, often unsatisfactory in their concept and execution.
Inevitably when a government has to make cuts education must take its share with other areas whose claim to available funds is certainly seen by their protagonists as equally important. It is perhaps worth reminding ourselves that however much one may deplore the selling off of state assets—the family silver as we call it on these Benches—this Government would have had to make more drastic cuts if they were to keep to their policy of balancing the budget and holding inflation under control. Faced with the problem of cuts in education, which of course may have very unfortunate long-term effects, the obvious course is to concentrate on those disciplines, engineering and others, of direct relevance to industry which earns our country its wealth.
My own party has several reservations on the Government's Green Paper. A very important one is the shortage of students at A-level in mathematics and sciences who could fill any increase of places in universities if they were provided. I do not intend to speak about the other criticisms, some of which I do not entirely support.
I believe that some universities are still living in their ivory towers and are failing to meet today's requirements. Within reason we should preserve the aim of training future academics and research workers and, in so far as we are able, of doing some pure research. Nevertheless, let us remember that the vast majority of university students are third or lower second class
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material. For these people down-to-earth, efficient teaching is all-important. It seems to me very strange that whereas it takes three years to train elementary schoolteachers, some university lecturers presume to teach students without even occasional study periods to improve their techniques. Even more serious in my view is that some lecturers in arts and social science courses come straight from university without any experience in the outside world.
At one time, and I am sure it is still true today, university was a temporary haven for those with adequate A-levels who wished to postpone having to meet the harsher realities of the outside world. Sandwich courses have everything to commend them and the university of Surrey has pioneered such courses for all disciplines, even for music.
Only by experience gained in this way can students make the best of their university studies. I should think that partially-repayable grants have much to be said for them in this respect. Surely the idea adopted by some universities of giving students a combination of more than one discipline is right. I do not think, except that for future academics, the old idea of a three year course on economics was sensible. Such a course today should be combined with management studies for most students.
I should like to talk about university education from two other somewhat related angles. I think people believe that just as important as acquiring information is teaching the student to think and training him to have the logical approach. This in a previous generation was why classics was the preferred discipline. In those days even to have challenged this view would have been almost unthinkable. I really think that we might look back to that because surely we may have been wrong to some degree but not completely wrong in that assumption. In outside life judgment and common sense is what matters. I should be surprised if a student discussing in a paper, for example, different economic views and stating that some of them were misguided, giving good reasons, would do very well in that exam. But that is what should be the approach to a thinking student.
My second point is that, alas!, education as a whole has not made people more reasonable in a political sense. Even with highly educated people we still have the unfortunate fact that the more closely an issue is balanced, the more unreasonable do the protagonists on either side become. Yet it should be possible to correct this to some extent by higher education, given under some suitable academic title. In essence, the first step would be to lay all relevant factors on the table, as we usually do in this House on a Second Reading debate. Then, and only then, should the factors be weighed by bringing in experience and emotion. But it is essential to know the reasons for these weightings. I suggest starting students with some issues from history which now have little emotional impact and leading on gradually to present-day emotional topics. Unfortunately, the all-too-frequent approach is almost the reverse; people decide first what they think and then selectively look round for evidence to support their views.
I now return to funding. In this time of national difficulty it surely must not depend on historic precedents and "Buggins's turn". Invidious though it

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may be, those concerned must have the courage to give the money to those universities which are fulfilling our needs. I know just a little about my local university, the University of Surrey. I have reason to believe that it is, to a major degree, producing what is now wanted. Some others are still adhering to the old shibboleths and are not. But when it comes to funding from the UGC, the progressives have to bear the same cuts as the reactionaries. Only by selective action will the aims of good, modern, higher education and technical college education be achieved because there is still a strongly established tradition against necessary change.
8.20 p.m.
Lord McIntosh of Haringey: My Lords, when he ceased to be Minister of Health, Mr. Enoch Powell wrote a very wise little book called Medicine and Politics, a book which has been very much neglected and under-rated, partly, I think, because librarians and booksellers do not know whether to file it under "Medicine" or under "Politics". But the lesson that Mr. Powell drew from his experience as Minister of Health was that Ministers ought not to spend too much time in a certain department for fear of becoming institutionalised, and, above all, that those who come professionally from the discipline which the department has to control on the whole make poorer Ministers than those who do not. In other words, that doctors should not be Ministers of Health, that teachers or university professors ought not to be Ministers of Education and, I suppose, although this has not been too much of a problem in this country, generals ought not to be Ministers of Defence.
I suspect that this lies behind a lot of Lord Annan's thinking and, if that is the case, then I agree with him. If war is too important a matter to be left to generals, then there is certainly a case (and the noble Lord has made it effectively) that higher education—and I use "higher education" in the OECD sense to cover universities and polytechnics and, indeed, the voluntary sector to which the right reverend Prelate has referred—is too important a matter to be left entirely to those who work in it.
There has been this evening in this debate which was so ably opened by the noble Lord, Lord Annan, and in which there have been so many well informed and authoritative speeches, a tendency to criticise the Robbins Committee for its effect on higher education in the 20-odd years since Robbins reported. I am not sure that that criticism is fully justified. Robbins said:
"There is no risk that within the next 20 years"—
that is, up until now—
"the growth in the proportion of young people with the qualifications and aptitudes suitable for entry to higher education will be restrained by a shortage of potential ability".
That was a view which was not all that widely shared when the Robbins Committee took that view. Mr. Kingsley Amis, among others, took a very different view, and I do not think that any Member of this House could deny that that view has been borne out 100 per cent. The need for increased higher education, the willingness of more students to come forward for higher education, the continuing abilities of those students who do come forward for higher education,
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cannot be doubted. We are still barely beginning to scratch the surface of the ultimate demand for higher education from those who have been underrepresented in it in the past. We still have under-representation of students of working class parents; we still have under-representation of women in our universities and in higher education and, above all, we have barely started to scratch the surface of the latent demand for higher education from mature students, from those who have been so conspicuously successfully benefiting from the Open University. In looking at that situation, I say from this Dispatch Box that no solution of the sort proposed by the noble Lord, Lord Annan, is rejected in advance. I share with the noble Lord, Lord Beloff, a sympathy for the radical analysis of the problems of higher education rather than the more conservative analysis.
I listened very carefully to what Lord Annan was saying and I confess to having doubts about a number of his individual solutions. For example, he talked about the possibility of having centres of excellence and higher pay within those centres of excellence. I thought that the noble Lord, Lord Flowers, made a very effective point against that when he said that excellence in higher education is a dynamic and not a static matter and that the quality of research in a particular institution may vary from decade to decade. If you were to institutionalise centres of excellence, you might well find yourself fossilising the locations in which first-class work is done rather than finding opportunities for it to be done in newer institutions.
The noble Lord, Lord Annan, spoke about the need for liberal-studies colleges, both arts and science, and the need for two-year polytechnic courses. Of course, Anthony Crosland envisaged exactly that kind of thing when he was setting up the polytechnics. It was the idea that polytechnics would provide a possibility for movement, for example, from HND courses to CNAA degree courses, on the one hand, and, on the other hand, from full-time HND courses if that were more appropriate, to part-time HNC courses. What has been unfortunate is that the polytechnics themselves have become fossilised in a sort of crypto-university mould and that they have sought to emulate the universities rather than to develop the skills that they might have had, in Crosland's mind, of forming the basis of more comprehensive higher education.
A number of noble Lords, including my noble friend Lady White, have referred to the difficulties of breaking the mould as between polytechnics and universities. I am conscious that there have been experiments in this area not only in Wales but, for example, in Ulster where the new University of Ulster at Coleraine has merged with Ulster Polytechnic; but the result has been almost entirely a university rather than a polytechnic and certainly not an effectively new institution.
The noble Lord, Lord Annan, referred to the extravagance of our staff-student ratios and compared those with other countries. I think that it should be borne in mind that the countries which have poorer staff-student ratios, first of all, may not necessarily benefit from it but, secondly, that they have these staff-student ratios in an atmosphere of very much more open access and, therefore, a higher level of drop-out at the end of the first or second year. It is

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possible to be much more miserly about staff-student ratios in the first year if you know that you are going to have a sort out after that time. Therefore, I am not sure that his analogy is really valid.
As far as the issue of funding for research is concerned, a number of noble Lords spoke on that point. I do not think that there is any disagreement about it. Whether the alternative funding to that from the UGC is to come from the private sector, as Lord Beloff would wish, or whether it is to come from the research councils, as has been described by Lord Hunter; or whether it is to come—too much so in my view, as is the case with scientific funding at the moment—from the defence and military sector: from wherever research funding is to come, there can be no dispute (I would suggest) that the wider the variety of sources, the greater the strength of the funded institutions and the greater the possibility that first-class research will be funded at the expense of others.
The noble Lord, Lord Annan, referred to the inflexibility of our student grant system, as if somehow we were being extravagant about student grants. I would remind him that, in effect, student grants in real terms have gone down dramatically over recent years. It is a tribute to students' restraint that their enormous demonstration last week was carried out peacefully. It is a criticism of our sense of priorities that the newspapers and the television paid hardly any attention to it. One could be forgiven for drawing the conclusion that they only pay attention if there is actually going to be disruption and riot rather than an effective peaceful demonstration of the kind that we had.
But there have been dramatic changes in student grants, to the disadvantage of students, which have not in fact been recognised. And when the noble Lord, Lord Annan, refers to having a narrower range of subjects, I wonder whether he really wants to go away from the concept which I have always understood to be essential to that of universities—that universities are a lot of people learning different subjects, studying different subjects and doing research in different subjects together. I am sure that we would not wish to give that up, any more than we have had to in recent years; and certainly not as much as I am sure that we are going to have to in years to come, with the continuing decline in university funding.
With all respect to the noble Lord, Lord Annan, I do not think the suggestions he is making are absolutely fundamental to the problem. I do not think that the innovations, however welcome they may be at the University of Buckingham—and, much more important in my view, at the Open University—are really at the heart of the problem that the noble Lord is describing.
We do have a problem of the management of universities. It is not just a matter of the people who are doing the management or even a matter purely of the funding, although of course management, at a time of cuts, as a number of speakers have pointed out, is extraordinarily more difficult than management in an expanding economy or even management in a steady state. I suggest the problem is one of our society not setting adequately objectives for higher education, saying what role higher education should play in our
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society, deciding who should set the objectives and how they should be set. The way in which I suggest that we should be thinking about those objectives is higher education as an investment in our society—and by that I do not simply mean an investment in terms of the potential in the job market: I mean investment in our society in the widest sense, in our culture as well as our economy.
My Lords, I recognise the time, but I believe there is still a moment or two to spare before the Minister has to respond. If we recognise the definition of the role of the universities more clearly than we do, then we can effectively demand of the universities that they think again about access, qualifications for entry, credit transfer, the flexibility of their structure and about the entitlement to higher education throughout life.
Finally, I think it must be said that the Government's Green Paper on Higher Education into the 1990s fulfils none of those criteria. It does not set adequate targets for universities; it does not do anything other than cause the continuous misery, which a number of your Lordships have described, in particular universities because it is not attempting to say what should happen in higher education. It is descriptive rather than anything else. Robert Graves in his poem, Non Cogent Astra, said:
"Prediction is no alternative to forethought".
I believe the Government's Green Paper is a prediction rather than a providing of forethought, and I believe that the noble Lord, Lord Annan, deserves some effective responses from the Government at the end of this debate.
8.34 p.m.
The Earl of Swinton: My Lords, I am grateful to the noble Lord, Lord Annan, for giving us a further opportunity to debate higher education matters. I am also grateful to the noble Lord for recognising that our system of higher education has to learn to operate on less generous levels of provision than it would like and that this will require change. But I am not sure that the noble Lord has given enough credit for the change that has taken place or that is being pursued.
A number of specific questions have been raised by the noble Lord and I should like now to try to deal briefly with them before coming to the core of my own remarks. Also, of course, I shall try in the course of my remarks to respond to points raised by other speakers. However, my time is fairly rationed and if I miss out any points that have been made I will of course read Hansard and write to the noble Lords concerned.
First, I do not think that the terms of reference of the committee of the noble Lord, Lord Croham, extend to the kind of wholesale reshaping of our higher education systems that the noble Lord went on to advocate. But I am sure that the noble Lord, Lord Croham, will have noted the underlying concerns of the noble Lord, Lord Annan, that there should be adequate machinery to secure the implementation of desirable change. I do not intend to deal in detail with the cornucopia of suggestions tumbled out by the noble Lord, many of which are referred to in the Government's Green Paper on higher education. For example, my right honourable friend has considerable sympathy with the idea that the pay arrangements in

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higher education should perhaps reflect to a greater extent the differential supply of, and demand for, academic expertise.
I was delighted to hear from my noble friend Lord Beloff that the experiment he had carried on in the University of Buckingham in degrees in two years had been successful. The Government are keen to test the feasibility of two-year degree courses, and they have invited the advisory bodies to consider with the universities and the CNAA the mounting of a limited experiment. The proposition is that a two-year honours degree might become a prestigious route for the most able students. But that is a far cry from a general change to a two-year degree. The case for that has not been made, and the Government have no plans to pursue it.
The Green Paper also encourages fund raising by institutions and has confirmed that increases in income from outside sources will not lead to reductions in government funding for universities. I very much agree with my noble friend Lord Beloff and indeed with the noble and learned Lord, Lord Wilberforce, in what they said about the importance of financial independence of universities. The Green Paper explicitly recognises that greater financial independence could bring greater flexibility.
The general thesis of the noble Lord, Lord Annan, is that whatever the efficiency of the administration of the various aspects of higher education, the universities in particular are, as he said in a debate in your Lordships' House last December, appallingly mismanaged in academic matters because the central agencies, the Secretary of State and the University Grants Committee are able to exercise influence only by applying financial sanctions to the otherwise uncontrolled and uncontrollable activities of a collection of independent workers' co-operatives, which always shy away from bold decisions and seek to protect their own narrow interests. He implies both that bold decisions are necessary and that they can be taken only by some strong central force, be it the Secretary of State for higher education as a whole, the University Grants Committee for the universities or the vice-chancellor, principal or director for the individual institution.
I have a good deal of sympathy with that impatience and I know that my right honourable friend has too; but as well as a-case for change there is also a case for conservation. Nearly everything that is excellent in our institutions of higher education at present is there because of the initiative of institutions or individuals within those institutions. Merely to centralise power does not guarantee change and certainly does not guarantee desirable change. The centralisation of power tends both to gather momentum for itself and to stifle drive and initiative at the periphery.
What we have to seek to achieve, therefore, is a balanced diffusion of power and responsibility, a system of checks and balances in which leadership is exercised by persuasion and consent and not externally imposed by an autocracy. In such a system change may come more slowly but it may stand a better chance of being right and also of being accepted by those whom it affects.
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Change is necessary, but the achievement of desirable change depends not so much on changes in structures at the centre as on the quality of leadership within institutions and a determination to make full use of the opportunities to exercise that leadership. In drawing attention, rightly, to the reluctance of the universities to contemplate change, the noble Lord looked back over a period of nearly 20 years and to matters of concern which in various ways have been on the agenda for much of that period, including most of the 13 points of Mrs. Williams. I make them 13 but the noble Lord said there were 14 points and I certainly would not argue about one of Mrs. Williams's points.
At the same time it is important to acknowledge just how much change there has been and how much is currently in train or in prospect, not just in universities but in higher education generally. Widening the focus from the universities there has been a massive change in the public sector of higher education. I am grateful to the right reverend Prelate the Bishop of Ripon for reminding us of the voluntary sector and that it has a part to play. The Green Paper confirms the status and character of the voluntary colleges. Bringing them within the scope of the national advisory body, as has now been achieved, will help to provide the wider planning and advisory framework for which the right reverend Prelate was asking.
In the United Kingdom as a whole, the public sector has grown by about 70,000 since 1979—a growth of over 30 per cent.—to provide about half our higher education and 40 per cent. of our degree work. That growth has contributed to an expansion of the scientific and technological subjects and has been achieved by gains in efficiency and cost effectiveness.
Since 1979, unit costs have fallen by about 18 per cent. Despite the noble Lord's crack about arty-technics, less than 20 per cent. of polytechnic enrolments are in subjects that are not scientific, technological or otherwise vocational. All of that has been achieved partly as a result of the initiative and commitment of individuals and institutions to the provision of opportunities of higher education, and partly as a result of the establishment in England and Wales of national planning arrangements for England in the National Advisory Body for Public Sector Higher Education, and in Wales for the parallel Wales advisory body. Those bodies, which bring together the local and central government partners to the enterprise of public sector higher education now provide for the first time a focus for the integrated planning of the local authority and the grant-aided sectors of higher education.
The creation of such planning and advisory arrangements for the public sector also create for the first time the possibility of more co-ordinated planning as between the universities and the public sector. Neither sector should plan in isolation and the various advisory bodies are now able to consider together both the general strategic questions, such as the expected recruitment of students, and the more detailed questions of the planning of provision in particular subject areas.
I was delighted to hear the noble Baroness, Lady White, mention one of those mergers. She was

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supported by the noble Lord, Lord McIntosh of Haringey. For the universities, there has not perhaps been the same degree of highly visible change. But re-examination and change has been taking place, and what has been achieved should not be taken for granted. The universities have had to cope with a continuous diminution of resources in conditions of considerable uncertainty. They are currently being asked simultaneously to engage in the most detailed planning exercise on which the UGC has embarked for many years, and to review and overhaul their management and administration at all levels in response to the Jarratt report and to the concerns expressed by the UGC and others.
There has been a considerable Scottish element in the debate. The noble Earl, Lord Perth, the noble Lord, Lord Mackie of Benshie, and the noble Lord, Lord Tedder have spoken. I forget which of the three it was who mentioned the report of the Scottish Tertiary Education Advisory Council. I think that it was the noble Earl. It is interesting that in Scotland the recent report from the Scottish Tertiary Education Advisory Council has come up with a recommendation for an overarching planning and funding body to co-ordinate provision of higher education in Scotland across the university and non-university sectors.
Higher education in Scotland, indeed the education system as a whole, is different in many respects from that in England and Wales. I do not wish to comment on the recommendation which is at present subject to consultations, beyond acknowledging that it raises a number of complicated issues, because the Scottish universities—although, as the noble Lords have informed us this evening, they are very Scottish—are part of the United Kingdom university system. The Government are studying the report and the STEAC's recommendations carefully. To help in that, my right honourable friend the Secretary of State for Scotland published a report in December last upon which comments have been invited. The consultations will continue until Easter to allow those with an interest to express their views. I strongly suggest that those noble Lords who have shown such an interest in this matter do not hesitate to send their views to my right honourable friend the Secretary of State for Scotland. No decisions will be taken until those views have been received and considered.
The noble Lord, Lord Hunter of Newington, was very concerned about various aspects of research. The Government's funding of science overall has not been ungenerous. The science budget's 6 per cent. growth in real terms over the past few years reflects the seriousness of the Government's commitment to protect science. At the same time, the Government acknowledge that measures of average inflation do not fully reflect all the cost increases affecting research. Notably, they do not reflect increases in the cost of scientific equipment and materials which, as science and technology advance, tend to become more sophisticated, and hence in many cases more expensive.
It is not sensible to suggest that the funds made available to research can go on increasing in real terms year after year. The limit has to be set by reference to
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national prosperity and what we as a nation can afford. Other countries in the developing world are similarly having to come to terms with that problem.
The noble Lord talked about the need for slack in the funding of research to allow for the unpredictable, and of course we recognise that science is unpredictable. That is why the Government support basic research across the whole range of scientific endeavour; but increased concentration of resources on centres of excellence should improve the access for the generality of scientists to expensive facilities and equipment which are increasingly needed.
It is simply no longer affordable to have fully equipped research laboratories in all fields in all universities up and down the land. Concentration is essential to avoid the available resources being too thinly spread. There is no threat to university autonomy here. However, autonomy does not mean a blank cheque. It has always been for the Government to decide what the country can afford.
The noble Lord also argued for closer links between research councils, other establishments and universities. The desirability of closer collaboration is recognised by the research councils. The Morris report identified the medical research council units, which are invariably located in universities, as particularly successful models that other research councils should adopt. However, it cannot seriously be suggested that existing research councils and other establishments should be physically relocated to put them in closer proximity to universities. That is simply not an economic proposition. There are, however, a number of ways in which the councils can improve the link between their establishments and the universities; for example, by exchanges of personnel and collaborative research projects. I am glad to say that those are being actively pursued.
I do not for a moment want to pretend that all is for the best in the best of all possible worlds. Not all universities are as efficient as they might be in all levels of management and administration. By no means all the relevant messages of management and of accountability have yet been absorbed and accepted by those concerned with the management of the heart of the academic enterprise. But much has been achieved, and an enormous amount of activity is still in progress. The Government are hopeful that yet more can be achieved in ways that will maintain and develop quality and liberate, not stifle, initiative.
In their dealings with higher education, the Government have to recognise that, as Burton Clark has put it, higher education is bottom heavy. I end with a quotation from him:
"Authoritativeness properly resides far down the line. Along the lower operational levels, it is radically fragmented and diffused, located in dozens, even hundreds of groups and even in the activities of particular individuals. … In the diversity of the system lies its constant attraction and promise. Governance then becomes a word for how we attempt collectively to cope with that diversity: to steer, just a little, the many ways, most of them unplanned, by which the system elaborates itself, thereby exhibiting flexibility in settings of growing uncertainty."
Lord Annan: At this late hour, with a Second Reading before us, I only wish to thank most sincerely

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those noble Lords who have taken part in the debate, and to thank the noble Earl for his patience and to assure him that by now my desire for Papers has totally evaporated. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Museums and Galleries (Prohibition of Admission Charges) Bill [H.L.]
8.49 p.m.
Lord Jenkins of Putney: My Lords, I beg to move that the Bill be now read a second time. May I say, in moving the Second Reading of this Bill, that I very much regret its necessity. In 1974, as Minister for the Arts, it was my privilege to abolish the admission charges which then prevailed. When Mr. St. John-Stevas welcomed my statement in the other House on 22nd March 1974, he asked me whether it was my intention to introduce legislation to prevent the re-imposition of such charges, indicating in doing so that he thought that it would be very undesirable indeed that such charges should be re-introduced. I said that legislation was unnecessary, but events have shown that I was wrong.
The experience of a year or more of charging at that time had proved such a disaster that it seemed inconceivable that any Government would step back into the mire from which we had just emerged. There was general rejoicing and the official Conservative position then was that there was no intention of repeating an experiment which had proved so unpopular and which had not even paid for itself. The problem was then, and will be now, that if you fix charges low you do not even recover the cost of manning the turnstiles, whereas if you fix them higher you turn away precisely those people you are there to serve, and you halve your admissions.
The Times of 30th March 1974 reported, "Museums rejoice as charges end." They said that there had been a huge drop in attendances and they quoted Mr. Frederick Dunning, the curator of the Geological Museum then, as saying that everyone was glad. They expected in that museum an immediate recovery in attendances which had collapsed to a fraction of normal. All the national collections reported similarly and there were balloons flying at flag staffs and huge signs of "Free" outside the Tate, the National Gallery and so on.
This time it has been denied from that Dispatch Box that the Government's changes in museum and funding methods were in preparation for the return of charging, but The Times once again saw through that. On 11th February last it announced the changes under the heading "Backing for museum charges", and its piece began:
"Financial incentives have been announced to encourage national museums and galleries to charge entry fees."
When the decison was taken to permit charging in 1971–72, the fee was fixed at 10p with 5p for children, and as a result of that a number of improvements were to be made in most of the buildings housing the
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national collections. In that end, in some cases the money collected did not even cover the cost of manning the turnstiles, and it certainly did not pay the costs of improving the buildings.
But the idea of charging, even at so modest a level, was by no means universally popular even in the Conservative Party. Members who are in this House today on the Government side spoke out against them then, and no one was more vociferous in his objections than Mr. Jeffrey Archer, then in another place, who is now vice-chairman of the Conservative Party. Mr. Archer said, among other things, at col. 331 on 18th October 1972:
"… the frightening question is, what comes after museum charges? Are we to have library charges next? I would oppose the Government on that as well … it must not be allowed." [Official Report, Commons.]
But, of course, it was allowed. There were not enough men and women who saw principle in the light that I see it to follow Mr. Archer. Perhaps we shall do better this time. We shall see.
Speaking in this House at that time my noble friend Lord Strabolgi said:
"I hope that this whole disgraceful policy will be changed by the next Labour Government",
and of course it was. My noble friend helped me to do it, and I found there was a great deal in what Lord Robbins said in opposing the Bill to charge admission in 1971. He was, I think, chairman of the National Gallery at the time. He said at col. 853 of the Official Report of 22nd November:
"I greatly regret what we are being compelled to do—that of course, is the plain fact of the matter".
And it was the plain fact of the matter. The notional freedom of the trustees to do as they wished was as illusory then, as Lord Robbins made clear, as it will prove now. Lord Robbins also said:
"… three-quarters of the pictures in the National Gallery have been given to and not bought by the nation … I would stick my neck out and say that most of them, from J. W. M. Turner downwards, hoped that all at large would be free to enjoy the riches that they were leaving behind them". [Col. 854.]
The same goes for many of the other national collections.
I suspect that behind the scenes discussions are taking place with the trustees today, in spite of the Government's protestations to the contrary. But what discussions have taken place with the trustees on this matter? What about the staffs of the museums and galleries? No discussions have taken place with them, yet they spend their lives in these great institutions. They are, almost to a man and a woman, against charging. Are they to have no say in the matter?
I have here 5,000 signatures, most of them collected by the staff of the V & A, against the so-called voluntary admission charge which has been exacted there. The petition reads:
"We the undersigned deplore the introduction of a voluntary admission charge to the Victoria and Albert Museum and request the trustees to explore other ways to make up the shortfall in running costs imposed by the Government's restrictions on public spending".
There are other ways and, if we are allowed to go into Committee, I have no doubt we will be able to discuss them then.

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Turning to my Bill, it is a simple four clause affair with two main clauses. Clause 2 prohibits charging for admission to any museum or gallery of which the expenses are wholly or mainly met out of moneys provided by Parliament. This also prohibits voluntary contributions on entry. It does not, of course, prevent any other voluntary contributions. I think it is important to note that. Similarly, the other main clause makes it clear that admission may be charged to any special exhibition within the museum or gallery.
A few years ago, one of the Sunday papers had the idea of asking some people to write a piece saying which great painting they most admired and why they would like to possess it. I found no difficulty in announcing my love for Manet's Water Lilies which is in the National Gallery—a wonderful painting. You can go in on a dull cold day and warm yourself body and soul in its hazy sunshine. You can even lose your fear of death in it. The difficulty arose when I said that I did not want to move the painting as I already owned it and wanted it to stay on the walls of the National Gallery where it would be well looked after. The Sunday Times did not follow this at all. It was not possession as they saw it and so I lost my £50, or whatever it was, for the article. However, when the charges were abolished we all gained the Manet, and much besides, which belongs to me and to everyone else—and no one must be charged money to see it.
I was interested to follow the end of the previous debate on universities. I do not quite go along with George Bernard Shaw, who said that he never ceased to thank God that his mind was never crippled by a university education. My university, as I left school at an unconscionable early age, was the Enfield Public Library, the British Museum, and the National Gallery. Later I discovered the V & A, the other Kensington museums, and the Tate. I wandered around London day after day, going from one to another, amazed and astounded at the richness that was mine and at my endless discovery. I found the world and all that was in it. I began to grasp the extraordinary achievements of the species to which I belong: its history, its glory, and its terrible failures. I obtained a perspective on the universe, and I could have acquired that in no other way.
Such cannot be obtained by a formal visit; that is only the start. Are the children of the future to be deprived of that wealth? My Lords, surely not. So I beg your Lordships to give my Bill a Second Reading.
Moved, That the Bill be now read a second time.—(Lord Jenkins of Putney).
9.2 p.m.
Lord Harmar-Nicholls Lord Harmar-Nicholls rose to move, as an amendment standing in my name on the Order Paper that we consider giving this Bill a Second Reading in insert ("this day six months").
The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Order Paper, that we consider giving this Bill a Second Reading in six months' time. That, as your Lordships will know, is the well-mannered way of telling the noble Lord, Lord Jenkins, that we do not want his Bill in its present form. That is what I want to say in very clear terms.
In my view, the noble Lord's Bill, which is far-reaching in the effect that it would have on the powers of trustees of museums and on the Exchequer, is so fundamental that it is not a proper subject to consider, in the terms in which it is set out, under the Private Bill procedure. It is possible to do so but it is not altogether in conformity with the general convention of what is dealt with under the Private Bill procedure.
In addition to the Bill being at variance with any convention usually associated with a Private Bill, it is a Bill that must be examined seriously because it is both destructive and extreme in its intent. All of us, whatever our views on this particular Bill, are proud of our museums and art galleries. They are a national possession of great value. We enjoy sharing the pleasure of visiting them and learning from them with all the visitors to our shores. There is no different view on that point. We are proud of our museums and galleries, they are valuable, and certainly we want to see that they continue in existence—with perhaps ever-growing power.
Initially, and for many years, we all took great pride, I am sure, in the fact that even though we were allocating the nation's money to replenishing and generally maintaining those museums and galleries, we could permit visitors admission to them free of charge. It was a matter of some pride also that we were almost alone among the nations of the world in doing so. I do not imagine that any other nation—socialist, capitalist, or whatever one likes to call their general thinking—had ever done the same. That other nations did not follow our line in that respect was, I have no doubt, for very good reasons.
From a personal point of view, I have to say that I can think of few things that give more self-satisfaction than giving something worthwhile to one's family and neighbours. However, when circumstances change nothing is more stupid than to carry on blindly doing so when such a course may well undermine both the value and existence of that special something that one wants to give. I believe that we have now reached that point in respect of our museums and galleries.
So far as concerns the arts, no one can deny that over recent years circumstances have changed; the circumstances that enabled us to imagine that we could go on acquiring valuable possessions, maintain them, and replenish them depending only on grants from the nation's Exchequer. The reason for that change can be summed up in seven words: inflation, improved living standards, increased running costs.
The figures to confirm that change and the cost of it are there to be seen. When I first entered Parliament in 1950, the Exchequer grant to the arts was £1¾ million. In 1970, it had increased to £18½ million. This year, in 1986, it will increase to £273 million.
Lord Donaldson of Kingsbridge: My Lords, will the noble Lord allow me to ask whether we may have those amounts in real figures? We all know that there has been inflation of something like 30 times. If one wants to give figures, they would be much easier understood if they were made roughly comparable.
Lord Harmar-Nicholls: My Lords, the figures that I am giving the House are figures that have been

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extracted from the Official Report. They are true figures.
If it is that one wants to separate the costs of the museums and galleries from the general costs of the arts that I have just set out, then they are as follows. In 1950, the grant to museums was £1 million. In 1970, it had increased to £8.8 million. In 1986, the grant has increased to £89 million. That shows an increase in costs that reflects changed circumstances. I submit that those figures themselves make it essential that any policy of free entrance that may have been right when things and costs were different cannot be right today.
The risk that we would get to the point where, unless we obtained extra replenishment of funds, the quality of our museums would fall was recognised on this side of the House as far back as 1972. At that time my noble friend Lord Eccles—who I am delighted to see here and even more delighted to know is to take part in the debate—was then Paymaster-General and put through an Act which removed any statutory impediment to charging at the trustees' discretion.
The Government never have recommended in statutory form that there should be a charge. What my noble friend did was to remove the statutory objections to the trustees and the directors of the museums—and who should know more about their needs and the risks than the people in charge, day by day?—being able to consider other ways of adding to any government grants in a way which would enable them to carry out their task of producing quality in their museums and galleries. I recommend to noble Lords who are interested in this subject that they read my noble friend's speech of 22nd November 1971, because he set out the general circumstances which anticipated the problems we are having to face today. It was the first step towards alleviating the problem while in no way interfering with the quality of the museums themselves.
When my noble friend produced his 1972 Act the suggested admission charge, if people followed it through, was 10p. If it had been accepted at that time it could well be that many of the problems we are facing today would have been mitigated. However, as the noble Lord, Lord Jenkins, said, within four months or so of the passing of that Act the Labour Government came to power and the noble Lord himself, as Minister for the Arts, removed the beginning of even a 10p charge for entering museums. I think that is very sad.
In this new Bill—and this is why I claim that it is an extreme Bill—the noble Lord wants to eradicate entirely the 1972 Act. What he wants to do now is to remove any powers that the trustees and the directors of museums and galleries have to even consider making a charge, whatever the circumstances. My noble friend's Bill merely removed the statutory objections if they thought that it would be justified. It left them free to run their shows and take everything into account. As regards the young Jenkins not having his university equivalent by going to museums I am quite certain that the trustees in charge of these great organisations will find it possible to bring in the kind of amendments that will allow people in that situation
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to take advantage of them. Experience has shown that ordinary users of the galleries are prepared to pay, as they have to do in every other country.
At this point I want to justify my comment that this Bill is destructive. What it does is set itself against the judgment of the experienced trustees who have the day-to-day contact and knowledge and whose only interest—it has nothing whatever to do with one's general view of the sort of society in which we live—is to maintain the quality of the establishments.
The need for such changes made possible by the 1972 Act, which this Bill would remove, was recognised by many organisations. The education, science and arts Select Committee approved it in 1982 and said that it was good. The trustees of the National Maritime Museum have inaugurated charges because they think it is necessary. The Victoria and Albert Museum trustees have come down on the side of applying the intentions behind the Bill. They have not put on a charge although they have tried to encourage visitors to make a voluntary contribution; but it is specifically set out in this Bill that not even a voluntary contribution can be made. The Natural History Museum in South Kensington, as we read in the newspaper only last week, said it has to choose between admission charges and staff redundancies.
If this Bill were accepted and became an Act, it would mean that in the absence of money from some other source we should have to face up to redundancies, and that is hardly in keeping with the outlook that any of us want at this time with unemployment as it is.
Charging has nothing to do with keeping people out. We want more money to be spent on the arts in general, and one way of obtaining that is to share the rising costs between the general body of the taxpayer and those who use the particular form of art which appeals to them. That is not new. It is done in all the subsidised theatres and opera houses; it is done at places of historic interest; in many museums and at ancient monuments. No one expects to go to the Coliseum to hear the English National Opera for nothing. No one expects to go to the Aldwych, which is supported by public funds, for nothing. People do not expect to go to the Festival Hall for free. No one expects to go round Hampton Court or the Tower of London for nothing. In all such instances it is accepted by the public and by the trustees that the costs should be shared between the taxpayer and the users. It is a partnership which is sensible, which is accepted internationally and which is most likely to enable us to achieve what we most want—properly stocked and replenished museums and art galleries.
In this Bill, which I find so objectionable, the noble Lord in subsection (2) twists the knife because he not only prevents trustees from considering admission charges, he says that they cannot encourage users, not even overseas visitors, to make a voluntary contribution. Which church is there in the land where they do not have a gift box if you look around the church?
Lord Jenkins of Putney: My Lords, if the noble Lord would give way I should like to correct him on a point of accuracy. It would be very kind indeed and I should

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be most grateful to him. I think it should be on record that there is no objection to voluntary contributions so long as they are not associated with entry to the museum or gallery.
Lord Harmar-Nicholls: My Lords, the noble Lord made that quite clear and his Bill makes it quite clear; but he would not allow the Victoria and Albert Museum to do what it is now doing, that is, not putting on an admission charge but asking people to contribute voluntarily if they wish to do so. This Bill would rule that out. I do not know of a church in the land where they do not do that. I do not know of any museum in the world where they do not want to do that. I am saying that we must not have a statute which does not allow that.
At the Victoria and Albert Museum, where I have naturally investigated, they tell me that, despite the picket lines that have been outside the building since last November, a half to a third of the people going to the V & A have made contributions, and that by and large overseas visitors have contributed about £2 per head. Your Lordships will see how sensible this is when you know that the V & A explain that 82 per cent. of the grant they receive goes in wages and salaries. I believe that to interfere with the means of obtaining extra money would be a retrograde step and a dangerous step, and that the proposal reflects an extremism which I should not have thought this House would want to encourage.
When charges were put on at Apsley House, the National Folk Museum, the Museum of Norwich and the National Trust properties, the attendance went up rather than down. The Government have tried to give a lead. We want to maintain our museums and galleries at the highest standard. For three years and perhaps beyond that we have undertaken to maintain the funding that now exists, but we recognise that extra money may well be needed by the museums over and above the contribution which we make and which we guarantee.
In order for the museums to obtain the extra money that may be needed, we encourage the setting up of shops and all the activities that are found at museums which may well bring a profit which will help their finances. We encourage them to do what the Victoria and Albert Museum is doing in asking for contributions. It would be retrograde once again to put on the statute book an obstacle to allowing people voluntarily to make a contribution. It would be dangerous and destructive to remove from the trustees the right to make a charge if they feel that it is in the interests of the museum to do so.
It is in order to retain that kind of freedom, which is universal, sensible and likely to produce the kind of results that we all want in terms of keeping our museums at the highest level, that I hope that your Lordships will follow me into the Lobby, if there is any need for it, to see to it that this rather extreme, destructive Bill does not obtain a Second Reading. I beg to move.
Moved, as an amendment to the Motion that the Bill be now read a second time, to leave out ("now") and at the end to insert ("this day six months").—(Lord Harmar-Nicholls.)
The Deputy Speaker (Baroness White): My Lords, the original Question was, That this Bill be now read a second time, since when an amendment has been moved to leave out the word "now" and at the end to insert, "this day six months". The Question that I now have to put, therefore, is that this amendment be agreed to.
9.20 p.m.
Lord Hutchinson of Lullington: My Lords, I say to the noble Lord opposite that I knew that the Government had been selling off the family silver, but I had not appreciated, and I do not feel that I can accept, that they have brought this country to such a pretty pass that they are now unable to afford to maintain our museums and national galleries. The noble Lord said that it was up until then that he, among the other inhabitants of this country, had pride in the fact that we could go to our museums and galleries without pain; but if that is the case, it is only since this Government came to power that that emergency has arisen.
I support this Bill which I find constructive and far from destructive. The noble Lord brings it forward, as he says—and I agree with him—as a matter of necessity; as an answer to this Government's approach to the arts, the unacceptable face of the market economy. The inspirational message sent out by the Minister for the Arts is that we get what we pay for; if I may say so, the age old prerogative of the harlot throughout history.
What a retreat we have seen in this past decade from the ideals that inspired the creation of our great museums and galleries. They were to become, and have become, centres of scholarship and discrimination, where the human heritage of man's infinitely varying imagination and skills is preserved in trust for the present and for future generations; freely accessible to the people, irrespective of wealth, status, education, age or nationality. They were works hitherto available only to the privileged few but now to be enjoyed by all for the enrichment of their lives. Cared for by dedicated and highly qualified professional staffs, and admired and envied across the world, the contents of those institutions, acquired by state purchase and private benefaction, have become the property of the nation, to be held on trust in the care of trustees, so held for the enjoyment and the education of the people, and that means all the people.
What do we now see? We see a government pursuing a policy which undermines and pressurises the trustees to betray their trust. It is a policy to commercialise the museums; to run them as businesses with the aim of generating income; above all, to market and profit by their products, as the noble Viscount, Lord Eccles, would say. The trustees are to be business men; tycoons who, with some notable exceptions, know nothing about scholarship and less about art. Their job is now to manage, as if those institutions were corporations, with the arrogance and the ruthlessness so necessary for success in the market place. The highly qualified directors and staff are apparently to be considered as mere employees; employees of the board, and a board not of trustees but a board of directors.

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The Government promised that they would never introduce entry charges after the fiasco of 1974. Instead, they have deliberately promoted a policy of cutting grants, with the message to generate income to fill the gap; in other words, to bring in entry charges. Each museum is picked off singly. Each is forced to act in its own self-interest without reference to the public good.
I ask your Lordships: do we want to erect barriers at the door to sections of the population in our museums? Do we want the squalid blackmail that is now being pursued in South Kensington? Do we want candle-lit dinners and social soirées among the Rembrandts where the well-heeled shareholders of the sponsors come to look at each other rather than to look at the works on the walls of the museum? Is it an extra pleasure to pay 50p to turn on the light in order to see the Rembrandt? Shall we charge next, as already mentioned by the noble Lord who introduced the debate, for libraries, public parks and gardens? It would, I suggest, be an abomination to charge a fee for each visit to our national museum of modern art, the Tate, where artists of all ages and many members of the public go repeatedly to study contemporary art, ever changing, ever different, week by week.
It would be more than an abomination, I suggest, to charge for the soon to be opened Turner-Clore Gallery that will house the Turner bequest, those paintings left by that great artist to the nation for the public. He would turn in his grave. Of course, arguments can be made for charging and arguments can be made against charging. In my view, the question is simply one of principle and nothing less.
Before I finish, I should like to address a question to the Minister. A very obscure and difficult to understand statement was made in this House on 10th February. It related to the measures that are to be taken to enable museums to keep the money that they generate and to carry over a certain amount of it from year to year. The words used in the statement are that, in order that the museums shall be allowed to keep this income, the Minister has found it necessary,
"to convert the method of financing from direct Vote provision to grant-in-aid".—[Official Report, 10/2/86; col. 92.]
I do not know what those words mean. There is, I know, a great deal of questioning in the museums as to what they mean. Hitherto the running costs of the national museums have been provided on the Vote and only the purchase grant by means of the grant-in-aid. I ask the Minister: does the change mean that now the whole of the museums' financial provision will be at the discretion of the Minister? If so, does it mean that the trustees can use all this money for any legitimate expense? I say, frankly, that I am suspicious that the new funding puts the museums to a far greater extent at the mercy of the Minister. I ask the Minister to allay that suspicion if he is able to do so when he winds up the debate.
Finally, I say to the Minister that the trustees must of course move with the times. They must present their treasures in a contemporary way. They must provide the public with the facilities that they need. And of course they must see that their catering and their shops work at a profit. They can use sponsorship as small icing on the cake. They can charge for special
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exhibitions. I would say, however, that if you persist in your aim of commercialising these great institutions you will lose for ever their disinterested services to the public and their standards of scholarship and discrimination which, I can assure the Minister, in this one area are still the envy of the world.
9.30 p.m.
The Earl of Perth: My Lords, in 1971, as the noble Lord, Lord Jenkins, recalled, the noble Viscount, Lord Eccles, introduced the Bill to authorise museum charges. I well remember that I supported him at that time and I need not rehearse again the reasons because in some degree they have been outlined by the noble Lord, Lord Harmar-Nicholls. I have in mind particularly such things as charges for the theatre, charges for National Trust, and so on. What I do remember was the attack—that is not perhaps quite the right word—of the noble Baroness, Lady Lee, on my support of the noble Viscount, Lord Eccles. That upset me because she was a very great Minister of the Arts. I was also attacked by Lord George-Brown. One can remember those things and yet one can hold one's position.
In my opinion, today's Bill tries to put the clock back. It is trying to stop all charges except for special exhibitions despite a very important change in the last 15 years. That change has been announced recently—namely, that what the museums and galleries can raise by their own endeavours will not be taken into account when making any block grant.
That to me is something of the greatest importance and I was rather distressed when I heard the noble Lord, Lord Hutchinson, being pretty unfair about ceremonies or functions which may take place in museums. After all, does he not want to have Friends of museums? Does he not want that support? It seems to me that he went too far. The noble Lord accepts certain things which the museums can do. There are shops—they were not allowed some time ago—there are sponsorships, but they may not have entrance charges. There is this all-important principle that each board of trustees is free to do what it wants: to make charges, as it thinks best. There need be no uniformity, and nothing compulsory.
Several of your Lordships have talked about the V & A. My wife and I happened to go there on Sunday. There was the lady with the sign saying "Voluntary contributions" and the list of the contributions which one might or might not make. I was very interested in the experience. I said, "Very well, I shall be happy to pay something." The lady looked at me—and it was quite clear that I was an old age pensioner—so when I suggested paying something more she said, "You do not have to. You really do not have to pay anything." All right, there is no objection. Of course, the sequel to that is that one probably willingly puts up some money. It is not the kind of voluntary contribution system that one has, for example, in the Metropolitan Museum in New York. As it is being operated at the present time it is a genuine and free chance to help pay for what one is going to enjoy. All the same, as I have said already, the trustees have absolute power to do as they see fit, to decide what they charge, who they

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charge, whether they charge, whether there is no charge. The decision about the classes of people who might be charged is entirely up to them.
I have only one thing that I would urge on all trustees of all museums. It is that if they decide to charge they leave at least one day in the week as a free day for anybody to go in.
I am off tomorrow morning—I have delayed going to Italy for the university debate and this one—and when I go to Italy I shall go to museums and galleries. Without exception, I shall be charged. I do not mind; indeed, nobody minds. One can make certain arrangements for the locals of the town to have a pass so that they pay virtually nothing. All those kinds of things are possible, but the idea of ruling them out altogether I find misguided.
I do not think that there is any high principle involved in this. The noble Lord, Lord Hutchinson, spoke about a high principle. I just know that in Victorian days we were the richest country in the world and so could afford to let things continue to be free, but nowadays we are not in that happy position.
We all know that ahead of us lies more leisure, and this is a challenge to the museums and galleries to do better and to give better value, better facilities, better showing, better conservation—for example, air conditioning is an essential in picture galleries.
However, all this costs money and there is no doubt in my mind that, if the museums can raise a considerable sum for these necessities, which cannot be provided with the present shortage of money, visitors will benefit greatly. I think that this Bill is out of date; it is out of tune with the times. It is well-meaning, but it is not to the advantage of the public. Far from gaining, I believe that they would suffer. Therefore, I go along with the noble Lord, Lord Harmar-Nicholls, and support his amendment.
9.37 p.m.
Lord Harris of High Cross: My Lords, it is the first time that I have had the pleasure of following straight upon another Cross-Bencher, the noble Earl, Lord Perth, with whom I found myself in complete agreement. As I understand it, the facility that we have available for introducing Private Members' Bills can serve several quite distinct purposes: it may prove a launching pad for some great reform which the Government of the day have shrunk from tackling; it may tentatively draw attention to some major ill that ultimately calls for perhaps a different form of remedy; it may be a modest effort to tidy up some striking anomaly in the law that would draw wide support; or, less pretentiously, the Private Member's Bill has on occasions allowed a frustrated Back-Bencher to discharge an undelivered speech and to get some bees out of his bonnet. As an often frustrated Back-Bencher myself, I suspect that this Bill introduced by the noble Lord, Lord Jenkins of Putney, to proscribe museum charges and voluntary contributions falls into this last category. It is part of the charm of the noble Lord that he is never short of an undelivered speech and, like me, he has his share of bees in his bonnet.
First, I congratulate the noble Lord on getting this particular buzz out into the open, especially as I suspect that it will sting most of us less than it appears
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to have been stinging him. However, I find it difficult to share his engaging enthusiasm for this particular Bill. Its author seemed to claim that it was a positive, forward-looking measure to relieve our people of some great deprivation. Picking my words carefully to avoid the Standing Order on "asperity of speech", I would rather describe it as a narrow, negative, myopic expression of sentimental or doctrinaire prejudice. It is a prejudice apparently shared by the noble Lord, Lord Hutchinson, from, I seem to think, the Social Democrat Benches and the area of the Tate Gallery. It is a prejudice against the ordinary freedom of contract between willing buyers and willing sellers which is the hallmark of a free society.
As the noble Lord, Lord Harmar-Nicholls, said, this Bill seeks to overrule the judgment of trustees and governing bodies of museums or galleries that accept public money. More precisely, it provides that no museum or gallery may charge for admission if it is wholly or in part (whether directly or indirectly) dependent on moneys provided by Parliament. I suspect that if this Bill were to survive for a Committee stage we might have much innocent fun scrutinising some of these words in that part of the Bill.
What astonished me was that the noble Lord's ire was aroused not only by the imposition of admission charges, but under subsection (2) would strain the English language by decreeing that
"the making of a charge for admission includes an invitation to make a voluntary contribution on entry to the museum or gallery".
I suddenly wondered whether the noble Lord is perhaps secretly a better economist than he gives himself credit for. If we are not allowed even to volunteer a donation on entry, may I assume that he would leave us free to drop something in a box on the way out? Indeed, since the noble Lord's primary prohibition is against what the Bill plainly specifies as charges for admission, might he allow an invitation for a donation as people leave, when perhaps they have a better view of the value of what they have seen?
I personally objected in my local church when they introduced the practice of making the offering on the way into the service. As a market economist I have always thought that we should pass the plate around immediately after the preacher sits down, so that he might learn something from variations in the size of the collection.
Lord Jenkins of Putney: My Lords, may I assure the noble Lord that on this point, if on no other, we are entirely at one. I have no objection whatsoever to exit charges.
Lord Harris of High Cross: Well, my Lords, that is good news. I must say, quite seriously, that the everyday mechanism of payment for goods and services fulfils a number of perfectly useful purposes. It serves to remind us that resources are scarce. It teaches what economists call the concept of "opportunity costs", characterised by the late Lord Robbins as "the invincible truism" that you cannot have your cake and eat it. Payment is a test of demand and a measure of the satisfaction derived from indulging it. Without payment, I would argue, attendance figures mean very little indeed. Their accuracy cannot be vouched for, and anyway people may just have dropped into the museum to avoid the rain or to visit the restaurant.

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Is it not worth reminding visitors to the treasures of an art gallery that there are costs involved which merit some contribution? Do people fully value that which they get for nothing? Why should children be brought up to believe that going with a school party swimming, or to a country house, costs something, while visiting a local museum is not worth paying towards?
If more money can be raised from charges, galleries and museums can spend more on advertising and marketing—so much scorned by the noble Lord, Lord Hutchinson—to enlarge the tiny fraction of the community which still now visits such places. Why, anyway, should the cultured elite and those with special links with the museums expect the rest of the taxpayers to pay wholly in taxes for their special pleasures?
Why this doctrinaire obsession that ordinary folk should not be allowed the responsibility and dignity of parting with their own money towards anything which their self-elected betters think is good for them? As the
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noble Earl, Lord Perth, said, if we have charges there can be exemptions or reductions for children, for students, for pensioners, or better still, as in Italy, one day a week can be set aside when entry is free for all.
Alternatively, I commend to the noble Lord, Lord Jenkins, the notice outside the Art Institute of Chicago, which was so striking that when I last visited it in 1982 I wrote it down in my diary. It read then:
"Pay what you wish but you must pay something. Suggested entrance fee: adults 3 dollars, children, students and senior citizens 1.50 dollars."
Speaking for myself, having paid my three dollars, I for one saw that I received good value for my money by exploring all the wonderful offerings, including the best display of Impressionist paintings outside Washington. What is wrong with that, so long as children and pensioners can get in for 10 cents? The Bill is objectionable not least because it distrusts freedom of choice. I shall gladly go through the Lobby, without payment, to vote it down.
9.45 p.m.
Viscount Eccles: My Lords, the noble Lord, Lord Jenkins of Putney, thinks that the Bill will strike a blow for British culture. I think he is mistaken, because when museums were first established it was for the pleasure and instruction of a tiny, limited section of the population. The first director of the British Museum was told not to admit more than six visitors a day. From then on, decade after decade, the number of visitors increased and so did the expense of maintaining and adding to the collections. So also did many other forms of government expenditure: the health service, education, the police and local government. There never has been and there never will be enough revenue for all the well-founded claims to be met.
Faced with that situation in 1970, the Conservative Government decided to see whether the museums could help a little in meeting the costs of their maintenance. That was the main purpose of the Bill which I then introduced. But I had a second purpose. It is about that that I should like to say a word or two.
I had observed that in those museums which charged—Norwich is a good example and the Tower of London another—the relations between the curators and the general public were closer and much more friendly than in the museums which did not charge. Why was that? Because as the number of visitors grew and grew so did the needs for facilities which had little to do with the care of the collections. They needed more seats in the galleries, more informative labelling, more space where visitors could buy postcards or publications, more cloakrooms, somewhere to get a cup of tea; and there were many more questions to the expert staff.
The scholarly curator may be forgiven if he or she thinks that it is a misdirection of resources to spend so much time and money on the common or garden wants of a public who have paid nothing to come in. Also, as your Lordships know, if there are too many visitors in a gallery it is impossible seriously to study the objects. When I asked the late Lord and Lady Clark whether they would support my Bill to introduce museum charges, they thought for a moment and then said, "Yes, we will support you, but on one condition: children must be charged double".
One can realise how strong is this feeling that visitors are a nuisance only if one has been a trustee of various museums, as I have. But it is wonderfully diminished when a charge is made for entrance. I do not support the kind of blackmail voluntary charge which is made in the metropolitan museum in New York and which my noble friend Lord Perth has referred to; I think it is offensive. In my view, there should be a charge for everybody at the door, because such a charge establishes a clear reason for the staff to attend to the needs of the general public. It is an argument which grows in importance as the number of visitors increases.
Money remains a great problem for all museums. In the last 10 years, the price of important works of art has risen many times, far more than inflation in the retail price index. So also has the cost of repairing old buildings or building an extension on to an existing museum. How, then, can the museum budgets keep
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pace? Noble Lords will have their own views on the size of the acquisition grants which should be made out of public funds. Is a bust by Bernini more important than the new equipment which hospitals want so badly? Is it right to subsidise more students from overseas to our universities or to buy another drawing by Raphael?
The answers to these questions can never be agreed upon but the question will not go away. In fact, they are going to be more numerous and more difficult and, therefore, museums must look round for new sources of revenue. Charges will bring in only modest sums but it is a good thing that the Treasury says that they may keep them, although how exactly they will arrange that I do not know. But very much more than the fruits of charging is needed and the best way to find it is by tax relief on annual gifts, and I hope very much that the Chancellor of the Exchequer is going to make it possible for the public to share more in the financing of our museums and all other artistic activities.
Here and now, I want museum trustees to be free to charge or not to charge as they think best for their museum and for their visitors. Of course, I shall vote for the amendment of my noble friend Lord Harmar-Nicholls, unless, as I hope, the noble Lord, Lord Jenkins, will withdraw his Bill; because, when you come to look into it, it is not going to help the people whom he very rightly wants to help.
9.52 p.m.
Lord Hayter: My Lords, I am going temporarily to upset the noble Lord, Lord Jenkins of Putney, by quoting the Conservative Party political broadcast on television last week which included the words:
"Building for the future is the most important thing one can do today".
Of course, it is precisely because this charging at museums and art galleries is not going to build for the future, is going to try to stifle the children from the total environment of education, that I shall support the noble Lord, Lord Jenkins. It is really, when you have listened to the debate so far, a contrast between those to whom money is everything and those who feel that there are some things that money cannot buy.
For my own part, I disliked—and I may have misunderstood—the short laughs that followed Lord Jenkins when he talked about having been educated in his youth at the museums and the galleries, and that it was part of his, so to speak, university education. I was lucky enough to have a university education. But I, too, was educated in that same way. I wonder how many of your Lordships can remember going for the first time to the Natural History Museum and seeing that enlarged flea in its glass case side by side with the whale, the biggest animal in this world. It was a revelation to me and it is a revelation to all the children who go there.
If you try and stop them from going in, if you are going to put charges on every child and sometimes the parents cannot afford to pay them, who are you going to deprive? It may be the very scientists of the future that we need. Heaven knows, we have been talking

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about the dearth of scientists time after time in this House! For my part, I feel that it is a great mistake to have any charges at the art galleries or at the museums.
There has been a lot of talk this evening about what happens abroad, and of course it is true that there are these charges made abroad; but when you reflect on the matter of tourism in this country—the trains are late, hotels are too expensive and the streets are littered with paper—one of the reasons why people come here is because they know that the museums and art galleries are free. I feel that is the right attitude to take up.
In a nostalgic mood, I was thinking the other day of a singer some of your Lordships may remember, called Jack Smith. He was "the whispering baritone" and the first line of one of his songs was "The moon belongs to everyone". I will not sing it because I am sure that is against Standing Orders; but then, having sung of love and the stars above, he came out with the last line, which was the refrain and indeed the title of the song:
"The best things in life are free".
That would be my theme so far as this Bill is concerned.
I confess I should like to appeal to the noble Lord, Lord Harmar-Nicholls. Each of us on either side of the argument wants to get the right decision. I do not think it is perhaps the right time just now—it is fairly late in the evening in a comparatively thin House—to have a Division over the matter of the principle of this Bill. I would suggest that it would be far better to give this Bill a benign Second Reading, perhaps with a wink, and then to attack it as much as one likes in a Committee of the Whole House, particularly when it comes to the question of Clause 2 standing part. So I hope that the noble Lord will not press his amendment; but, if he does, I shall vote against it and for a Second Reading for Lord Jenkins' Bill.
9.57 p.m.
Lord Ritchie of Dundee: My Lords, I should like to echo the words of the noble Lord, Lord Hayter, in proposing that we should give the Bill a benign Second Reading. I think that it requires clarification and amendment, especially in connection with the matter of entry charges and exit charges, as the noble Lord, Lord Jenkins, himself said.
My first reaction, like perhaps others of your Lordships, on hearing of the proposed museum admission charges was one of distaste and indignation. I protested that the great museums and galleries have always been free and it is part of our civilized society that the splendours of western culture should be freely accessible. I remembered wandering freely into those great halls of treasures—those Aladdin's caves—when I was young and drinking in the hush and the timelessness of those places.
I was never a serious or earnest student but an idle browser—one who would go into the National Gallery for 20 minutes while waiting for a train, or who would perhaps arrange to meet someone there and incidentally look at one picture. That was the essential
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joy in the life of these places—a brief escape from the hurly-burly of the streets and the 20th century.
If one had to pay, one would be robbed of this. I know that view is the view taken by the overwhelming majority of the professional staffs of the museums and art galleries. In fact a big survey is being undertaken at the moment in which the opinions of all those professionally involved are being sought, and I understand we shall know much more about the facts and figures by the end of the summer.
However, with this debate coming up, I thought there was nothing like a little first-hand, up-to-the-minute experience; so, not having been there previously, I went along to the V & A this afternoon to see how their scheme was working out. I expected to be horrified and angered, but in the event I must say I was far from either. Here I would confirm what I think the noble Earl, Lord Perth, was saying; that the pressurising can be minimal. Two young women were sitting by what they admittedly called a cash desk. By them were notices inviting me to donate up to £2, or 50p if I were an aged pensioner. I asked them what their reaction would be if I offered them nothing. They said that that would be quite all right. I asked them then if, not being the wearer of a badge which I would be given if I paid, I would be approached by some aggressive sales promoter in the Indian gallery or somewhere. They said, "No; that might happen in New York, but it does not happen here."
It was true. I was not molested in any way. I felt quite guiltless and I managed to leave the Victoria and Albert Museum without paying a penny. I had a long talk with the press and public relations officer who was very persuasive. He told me a great many of the problems that the museum faces with which I shall not weary the House, as your Lordships no doubt have a good idea of them.
I came away with the feeling that I would rather that all the national museums and galleries were free, but that, if a parsimonious Government will not fund them adequately, if the choice were between maintaining and improving what is offered to the public, on the one hand, and, on the other, a continuing decline of standards and decay of premises, a museum or gallery cannot be deprived of resorting to inviting donations from visitors.
If that is done with sufficient tact and sensitivity, as it seemed to me was being done at the Victoria and Albert Museum, if contributions are linked to specific projects and if, perhaps, the contributions are invited when a visitor leaves rather than when he arrives, such a scheme may well be not entirely unacceptable. I am, therefore, happy to support the intentions behind the Bill, but I think that clarification about the voluntary contributions is required.
10.2 p.m.
Lord Annan: My Lords, I rise to say that I shall vote for the amendment on the grounds that having been a trustee of the British Museum for some 15 years and then trustee and chairman of the National Gallery, I cannot conceive that the trustees' freedom to do what they think best for the gallery or the museum of which

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they are the trustees for the public should be curtailed in that way.
When I was chairman of the National Gallery, I remember hearing the director say that we were moving into an age when the level of the purchase grant would mean that we would never again be able to buy a major painting. I thought that, as the trustees had been told that important fact, they should have some discussions about the principle that we are discussing tonight.
On the main issue, I do not have to make any apology. The noble Viscount, Lord Eccles, will well remember that I opened the debate in this House opposing the museum charges which he imposed when he was Minister. All the arguments that I have heard from the noble Lord, Lord Hutchinson, tonight are arguments that I used on that occasion.
When the trustees debated this matter there was of course a great divergence of opinion. Some thought that we should under no circumstances give way on this matter of principle and if the trustees as a whole voted in favour of any kind of charge, they would resign as trustees. That was a perfectly honourable position to take. Other trustees said that their first duty, as they saw it, was to enable the gallery to remain a living institution which could purchase paintings even at the astronomical cost to which they had risen.
That matter having been initiated, among the points made was the natural one that we should perhaps try to discover whether we could raise funds to help us in our dilemma. That is how we left the matter. As your Lordships know, we were very fortunate because, quite apart from the fantastically generous gift which Sir John Sainsbury and his brothers made towards the cost of the new extension to the building, we received that princely gift of £50 million from Mr. Getty. Of course, I do not expect that every institution, gallery and museum which is funded from public funds can expect that kind of fantastic response, but it enabled the trustees, so to say, to put on one side the matter of the museum charges.
Nevertheless, there was the issue. The issue was: does this gallery become an institution which will add to its collections virtually only items of historical interest, but not those works of the finest quality with which the gallery has always been associated in its purchasing policy, or does one charge for admission in one way or another? Most people were rather against the voluntary principle and thought it was more honourable or honest to charge something in the neighbourhood of, at present prices, £2, but, as I say, no decision was taken in any way. I do not want anybody to think that the trustees came to any commitment on this matter.
Therefore, when I think about this problem again, it seems to me that we can say many things about it. We can say that we are being exceedingly parochial in regard to Europe. We are a member of the European Community. I cannot think of a country in the European Community which does not, in some way or other, charge for admission to its galleries and museums. Of course, the great ones like France and West Germany charge, and the charge is swingeing. In Italy, the charge is tremendous. But nobody should
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misunderstand this problem. If you charge, it does not mean that all your problems are solved.
I remember going to Italy in 1974 and finding that the museums were closed. I could not go into the gallery at Bologna, because they did not have the funds, despite the charges, for that gallery to operate. Of course, today Italy is in a very much better position economically and that is what is at the bottom of the whole problem that we are discussing—the actual economy of the country. If it flourishes, we do not need to change our present policy. If it does not, then the trustees have to think again. But I should be very sorry to see anything which curtailed the freedom of the trustees.
It may be that the noble Lord, Lord Hutchinson, and I take a slightly different view. I think that the noble Lord, Hutchinson, has a Wagnerian quality in his temperament. He would rather see "Gotterdammerung" and, as it were, everything going up in flames, rather than concede that that inviolable principle should be destroyed and impaired. I take a more pragmatic and dreary line, a rational line, where, if one is absolutely forced into this, we might have to make some accommodation. There are lots of ways in which you can help your students to go while at the same time having charges which force the tourists to come across with their money. You can have masses of different ways of imposing charges of one kind or another. On the principle, I remain entirely with the noble Lords, Lord Hutchinson and Lord Jenkins, and I am, in principle, opposed. But I should not like to see the freedom of the trustees fettered in this way.
10.9 p.m.
Lord Beaumont of Whitley: My Lords, I belong to the school that believes that this matter involves a principle, and a very important principle. I am not lured by the arguments that say that if one charges for admission then one can buy the priceless masterpieces that the museums and art galleries want. Our museums and art galleries are already crammed with priceless masterpieces. It may be that we will get the offer of some more, and it may be that we shall be able to encourage rich people to help us to buy them as they have done in the past, by the generous gifts that we have been told about.
It may be that this or a future Government will think of other ways of funding that most important matter—the arts. However, we should not be led astray into thinking that we ought to decide this matter of principle on merely the question of whether one charges for admission or buys new pictures because I do not believe that is a real choice.
It seems to me that the matter that is before us tonight is a test of a civilised society. If I am told that ours is the only society that holds to that test, then it will be the first time for a long time that I have found myself in the chauvinistic position of defending Britain as being out ahead of the rest of the world. If we are out ahead of the rest of the world on this particular matter, then we should stay out ahead and we should not necessarily pay attention to what they are doing in the EC—good European though I am.
Tonight's debate is absolutely vital. I want to mention an area that has hardly been touched upon when we have been talking about people like

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ourselves, about old-age pensioners, and about children. We have not been talking about that great underclass of society that exists now and may exist even more in the future. Probably at least 15 per cent. of our society are the kind of people who really cannot afford charges, and certainly could not afford charges if they went very often to museums. I know that they are not queuing to go into museums; but I shall come to that point in a moment.
Creativity is surely the most fundamental attribute of man. It is the divine gift. We are created in God's image and are made to share in God's creative power. A society that cuts its citizens off from creativity is to be condemned. It is to be condemned if it cuts them off from creativity because it makes them poor and creates an underclass. It is to be condemned if it cuts them off from creativity by denying them work. It is to be condemned if it cuts them off from creativity at all, if it begrudges the money that will allow them to enjoy their heritage.
It should not be a matter of estimating how many people who cannot afford to visit museums are being excluded; least of all—and I have made reference to the point—whether they want to visit them. I know that the unemployed in Liverpool are not queuing to get into the museums; but if only one unemployed person is excluded from our society, then that is one person too many. Even if there is none, the principle of exclusion is still wrong. If one is going to shut up one's riches from the poor, then of course it is better to have loopholes such as free days and special prices for the unemployed (and in fact, no one has mentioned that particular point) so that they can find some way in. But once the principle of free access is broken, it seems to me that our society is condemned by its own actions.
The principle is that the museums, the galleries and the libraries of society should be free to all. Once you have broken that principle, you are condemned as unjust, unloving and philistine. The true philistine is the man who thinks that art is his possession, that he can buy and sell it and that he can do what he wants with it; he can make it pay, he can possess it. We must not be philistines. We must make sure that the greatest riches that we possess are available to all, all the time. It actually will not cost us a great deal compared with the wealth of this country, but it would not matter very much if it did; it would still be right.
10.16 p.m.
Lord Donaldson of Kingsbridge: My Lords, I am sorry that the noble and learned Lord, Lord Simon, is not here to speak, because I usually agree with him. I do not know whether I should have done so tonight but I was hoping for his support in what I am about to say and I shall now have to get on without him.
It is not for me to sum up—there are three other speakers after me who will do so—but I must make one or two comments on the debate. To me the most extraordinary comment was made by the noble Viscount, Lord Eccles, who is an old friend and protagonist on this subject. He said that the staff tend not to attend to the needs of people unless there is a charge. I simply cannot understand that. It seems to me to be an absolutely meaningless statement, although he does not make meaningless statements.
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The facts are, as we were told by the noble Lord, Lord Jenkins, in his opening speech, that the staffs that have been consulted have been unanimously against museum charges. This cannot be because they do not want to attend. I find the whole thing too confusing for words. Perhaps we can discuss it later, but it seems to give a wrong impression of the attitude of the staffs of museums, from what I have heard and from what the noble Lord, Lord Jenkins, has heard; though I must say it was a great surprise to me that Mr. Archer agreed, and that was a pleasure.
I have to agree with the noble Earl, Lord Perth, that if this is to go wrong let us at least have one free day. I should like to have one paying day as a possible development. However, those possibilities do not arise if the Bill is passed, so we need not worry about that. I always enjoy the arguments of the noble Lord, Lord Harris, because they are consistent. Unfortunately he has gone, so I will not go on about it. However, I was only going to say that he accused my noble friend Lord Hutchinson of being sentimental. The answer is that of course he is sentimental. When the noble Lord, Lord Annan, speaks of him as Wagnerian he does not know what he is talking about.
This matter has to be seen from a sentimental point of view. We are sentimental about the fact that in this country we lend 600 million books—or 6,000 million; I cannot remember which—from our public libraries, free of charge without one penny paid. Of course, if you want to make some money then charge five bob a book. The numbers will come down to 200,000, or whatever it is, but you will get quite a lot of money. However, we are sentimental about this. We would rather not have the money than have that going on.
To me, exactly the same applies to the great museums and the great collections which, as has been said again and again, have often been collected by someone on a foreign tour, purchased cheap, brought home and sold because he married an American actress, or whatever. It does not matter how we got them, the fact is that we have them. They are part of our heritage and they should be available to everyone.
It is perfectly true to say that there is a culture gap in every class at every level. My racing friends from Eton never go to museums, galleries or concerts. Exactly the same applies to the racing men in the factories. It is a fact of life that we have found by the introduction of art into education over, I suppose, the past 15 years—it was hardly going on before that—that a lot of children begin to be interested. Of course, when they go round the museums and galleries they are dreadful. They are the most awful nuisance. They entirely spoil one's own enjoyment of the place. But they are getting something, and some of them come back. We think that they should not have to pay anything to come back.
The argument which I am putting is a very simple one. We on these Benches—and I think our point of view is shared by the Labour Benches, and very largely shared, though it is not always entirely evident, by the Conservative Benches—believe that the arts should be supported centrally and that they should be supported more generously than they are at the moment. We believe that there are two reasons why the arts should be supported. The first reason is that we think the ordinary person should be given the opportunity to

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appreciate the arts. If one is brought up with no education and by parents who do not read books, one does not have the opportunity to appreciate the arts; but if one is taken to museums and galleries by one's school, then the opportunity is there. The second reason why we want to support the arts is to nurture and develop local talent which, as we know very well, comes from all levels of society.
If one wants to stop children benefiting from this "evil" activity of going to picture galleries, what does one do? One charges for admission. If your Lordships were to say, "We have to stop all these children from going round picture galleries", then you would put charges on. That is the first thing one does if one wants to stop it. It is because we do not want to stop it that we are against charges. There is really nothing more to be said from our point of view—yet I want to say one or two things, because I have had only five minutes!
The first thing I want to say is that one of the speakers tonight—I forget which one—asked why there should not be free concerts. The answer is that the performing arts are entirely different from the static collections. The performing arts are things which are done by people who have to be paid to do them. I think that they should be subsidised as heavily as possible, but certainly they could never be free. No one who has thought twice about this matter—and I do not remember who it was who said it—would think that.
The only other point that I want to make—and I am rather disappointed that it has not been brought out in the strongest way tonight—concerns an argument which was put to me the other day, which is that people really only value things if they have to pay for them. I said to myself, "Is this true? Do those of us who are over 65 years of age value the tube less because we travel on it free? Do people in your Lordships' House value their telephone calls less because they are free? Do I value a bottle of wine that I get at a restaurant—which is far too expensive and entirely spoils the evening for me because I have to pay for it—more than a bottle of Chateau Petrus 47 or something which is offered to me by the noble Lord who has invited me? Does the fact that I have not had to pay for the wine—and never could—give it any added advantage? This lies behind the thinking of some noble Lords who have spoken, and quite honestly it is absolute rot.
I think that the real question here is this, that the only point in having museum charges is to enable the Government to give less money than they ought to give to museums. We know that the Government have financial problems. We think that a lot of them are of their own making, and we think that there are many ways round them, which we are not here tonight to discuss. In my opinion the only reason for imposing museum charges is because there is no other way to get the money to run one's property properly. I do not believe that this excuse is true and therefore I shall vote for the Bill.
10.24 p.m.
Baroness Birk: My Lords, having listened to all the speakers in this interesting debate, it is clear to me that we are not just discussing finance or even basically whether there should be voluntary contributions under a certain amount of pressure or charges, as the
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noble Viscount, Lord Eccles, would prefer. Behind the debate is the basic philosophic approach to our national life. We are no longer leaders in manufacturing industry. We have a great many problems which cover the whole of our economic life. We have abominably high unemployment. But we are unique in one aspect; that is, in our contribution to culture, not just within our national boundary but in the world. For that reason, what we are considering is the priority that we give to the various aspects of our society. That is at the bottom of it all.
The noble Viscount said that there will never be enough revenue. That is true under whichever Government are in power unless top priority is given to the arts; and we are here discussing the visual arts, the museums and galleries. If a Government do that, I believe that the main bulk of the money necessary will be forthcoming, but it needs to be properly managed. After all, in what is considered to be an emergency a sum of around £275 million can be found to build an airport in the Falklands. There is no reason to argue that other matters which may cost a similar amount are more or less important. The attitude to the arts has always been that they are a frill on the edge of our society rather than being central to our quality of life and the way that we live.
Strong arguments have been made for leaving the decision whether to charge with individual boards of trustees. Superficially that sounds convincing in a democratic society, where people should be able to say what they want and run their own patch in their own way. But it would be hard, if the trustees decided to impose charges, whether compulsory or pseudo-voluntary, to reverse the decision once apparent dependence is established. Other people fundamentally, as part of their philosophy, believe that one should pay. That has nothing to do with the financial needs of a particular museum or gallery; it is their view of life. I do not believe that that view fits in with what we want to see in our national heritage.
While I was waiting for the debate on my noble friend's Bill I was entertaining the head of the faculty of arts of a large polytechnic. We were discussing quite a different matter, but, when he saw that we were to debate this subject, he told me that he went to a secondary modern school and learned as a youngster everything that he knew from visiting the V & A, the National Gallery and the British Museum. He said that it is daunting to go into a grand-looking building; one is apprehensive. The charge is an even greater deterrent. Charges eliminate the casual approach; the great tradition that you can go in to browse for a short time and not feel that you have to get your money's worth, which in cultural and educational terms means that you are not getting true value.
As my friend the professor said, a life pattern had been built up for him. He is convinced that he would never have achieved his position today without that constant contact with and easy access to museums and galleries. Again as he pointed out, educated people can make their own judgment. They decide whether they want to pay to attend a concert or go to one of the performing arts. But for youngsters, who have the opportunity to go to a museum or gallery free, who enjoy it and who find they are visiting them more frequently, it is entirely different.

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Charges would have to be extremely high to contribute in any meaningful way to the maintenance of a building like the V & A. It is known that since the introduction of charges there has been a reduction in numbers visiting the museum compared to the previous year. November's figures were down by over 20 per cent., December's by nearly 48 per cent., and January's by 38·7 per cent. So the situation does not sound very hopeful. We have heard more about foreign museums where one pays than about those like the Smithsonian in Washington, the National Gallery in Washington, the Scandinavian museums and many of the Berlin museums, where one does not. In recent days at home, the Natural History and the Geological Museums have been saying that they will have to impose charges if they are to be able to manage. Those museums are funded by the Department of Education and Science. The funding has been cut. The Medical Research Council and a great many scientific activities have suffered in the same way. They are having to charge, not because they are in the same grouping as the other museums but because of their scientific work and the problems that they have encountered following cuts by the Department of Education and Science.
The Bill may not be perfect. I do not believe that it is in every respect. I hope, however, that the noble Lord, Lord Harmar-Nicholls, will follow the usual practice in this House and allow the measure to have a Second Reading. The noble Lord can pull it to pieces in Committee. I am asking him, not appealing to him—because I am not sure that he finds me very appealing, and I shall therefore not use the word "appealing". I agree with the noble Lord, Lord Beaumont of Whitley, that late at night, on a serious subject, it is pulling a fast one—if I may use the expression—to try and knock the Bill straight out. Given the interest that has been aroused and the width of the subject that we are discussing, the noble Lord should at least allow it to have a Second Reading. That is all we are discussing tonight. We should not be considering the setting up of fresh barriers against people gaining knowledge and also a great deal of enjoyment, which has not been mentioned to the same extent.
There are ways, in addition to revenue from the Government, in which museums can help themselves. This is the only point on which I disagree with the noble Lord, Lord Hutchinson, who, in an excellent speech, expressed his dislike of sponsorship and also, so far as I could see, museums marketing themselves and making money in that way. I believe that there is scope for a great deal more to be done in this area. I tried as a Minister at the Department of the Environment, which was responsible for the housing of museums—the noble Lord, Lord Donaldson, was at that time the Minister for the Arts—to promote efforts in that direction. Even today, there are far more opportunities for this approach, and perhaps to have franchises for reproductions of wallpapers, and such things, from somewhere like the V & A. I believe that this can be done if there is the will to do it. We do not have to enter into the area of charges and pressured donations. If there is the will, and if we as a country—and in this House we find the right place to give a lead—show that we believe that the museums
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and galleries are a very important facet of our national life, the arts as a whole ought to receive far greater priority than they ever have until now.
10.35 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the noble Baroness, Lady Birk, with her characteristic kindness of heart, appealed to your Lordships to give this Bill a Second Reading on the grounds that it would give the noble Lord, Lord Jenkins, the opportunity to have this subject debated, not only on the Second Reading of this Bill but again in Committee and at the further stages of the Bill. As one who has been through two stages of the Museum of London Bill—on both occasions of which the noble Lord, Lord Jenkins, seized the opportunity to have a debate on museum charges, announced his intention that he was going to have another debate at Report stage of the Bill, had a discussion on the radio, as I understand it, this morning, and will no doubt be having yet a final discussion on the Third Reading of the Museum of London Bill—I do not think (although I applaud the kindness of heart of the noble Baroness) that it is one of the strongest of arguments.
This debate has attracted three former Ministers for the Arts and I must say that for somebody like me—who has I know a great deal to learn about this subject—it has been a very interesting evening. But, however one dresses it up, this is a Bill to curtail freedom. In our country Parliament has placed the management of our great national museums and galleries in the hands of boards of trustees. They can charge for admission to their institutions if they so choose. This Bill seeks to curtail the freedom of trustees by prohibiting charging for, or even requesting a donation for, admission to a museum or gallery. I must say that I join with my noble friend Lord Harmar-Nicholls in opposing that curtailment of the trustees' freedom. Indeed, we would wish in government to encourage trustees who seek to enhance or expand their facilities or their collections.
On 10th February, on behalf of my right honourable friend the Minister for the Arts, I announced in your Lordships' House a change which I believe is beneficial in the financial arrangements for the museums and galleries funded directly from the arts budget which the Government propose to introduce during the coming financial year. The noble Earl, Lord Perth, rightly said, if I may say so, that the object of the change announced on that day is to allow the nine major institutions which are funded in that way to enjoy the fruits of their labours rather than to see any extra money that they earn clawed back into the Exchequer.
The noble Lord, Lord Hutchinson of Lullington, asked me particularly about words which were in the reply to a Parliamentary Question by my right honourable friend in which Mr. Luce said that in order to effect these changes within existing conventions, it would be necessary to convert the method of financing from direct Vote provision to grant-in-aid. I assure the noble Lord that there is nothing sinister in those words at all, as I am sure the noble Lord knows better than I. The existing rules for direct Votes require receipts to be deducted and prohibit carry-over. It is

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for that reason—and that reason alone—if we are to make the beneficial change which my right honourable friend announced on that day, and I repeated in your Lordships' House, that it would be necessary to consider going from direct Vote to grant-in-aid.
Through doing this we genuinely want to encourage the nine national museums and galleries, as a first step at any rate, so that their revenue-producing efforts will supplement—but not, I emphasise, replace—the funding from central government. The Government remain committed to funding the basic activities of the national museums and galleries in line with our 1983 election manifesto commitment to keep up the level of support for the arts.
Indeed, perhaps I may say in passing that we have done better than that over the seven years of the present Government and the previous Conservative Government. Between 1979 and the present financial year, Exchequer funding of museum running costs from the arts budget has increased 16 per cent. in real terms, and of their building and maintenance work by 52 per cent. in real terms. Greater emphasis has been placed on better conservation of the collections and of the historic buildings which house them. Yet even this is not quite enough to satisfy the imaginative and innovative plans of museum trustees and directors who, understandably, wish to develop and improve their institutions in order to meet the increasing public demand for their services.
I was enormously interested to hear my noble friend Lord Eccles, who it was such a pleasure to hear speaking in your Lordships' House again this evening, making the interesting point that if museums and galleries are to be helpful and friendly to visitors, trustees will want to provide facilities which will make all the difference between a warm welcome and rather cold comfort.
The Government will certainly endeavour to keep up their good record. However, there is a limit to what can be afforded on top of that. That is why we are encouraging the trustees to find ways of financing growth and new developments over and above those provided by Government cored funding. Of course, they may do this by attracting business sponsorship, which may in turn attract an award under the Government's highly successful Business Sponsorship Incentive Scheme for the Arts; and I was grateful to the noble Baroness, Lady Birk, for mentioning sponsorship in approving terms. It is now making an enormous difference to money flowing into the arts. There can, of course, be private patronage, which was mentioned in the interesting speech of the noble Lord, Lord Annan; fund-raising from the general public; or commercial activity of various kinds.
One means of raising funds is to ask visitors for a donation on entry; and one form of commercial activity would be charging for admission to the museum. Both would be forbidden by this Bill. I believe it is wrong to restrict the trustees' choice. I believe that my noble friend Lord Harmar-Nicholls was absolutlely right in saying that the Government have no wish to impose admission charges, but we are convinced that they are an option which should be
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open to trustees in deciding what is best for their own particular institution.
Therefore, with respect to the noble Lord, Lord Jenkins; I believe that this Bill is wrong in principle: but I believe that it is also wrong in practice. After all, to deny the National Maritime Museum the income from admission charges to its main collection and to the old Royal Observatory at Greewich would be to deprive it of an important source of income—about £0·5 million a year. Similarly, the disappearance of income from the long-standing admission charges to places like Duxford Airfield, Apsley House, HMS "Belfast" and the Barbara Hepworth Museum would be sorely felt by the parent institutions.
Of course, the Bill would also outlaw requests for donations from visitors on entry. This is something which has been talked about this evening by your Lordships. The V & A scheme has been mentioned, but one which has not been mentioned is the Imperial War Museum scheme, where visitors are being asked for contributions towards the museum's share of the costs for an ambitious redevelopment scheme, the bulk of whose cost is being borne by the Government. This too would fall prey to the Bill.
I think that my noble friend Lord Harmar-Nicholls was absolutely justified in pressing the noble Lord, Lord Jenkins, about the prohibition which is to be found in this short Bill on voluntary contributions. How could it possibly be right actually to prevent visitors or other well-wishers from contributing to museums if they wanted to do so? The noble Lord will forgive me if I say that there is an element of killjoy in the attitude of this Bill and I can only assume that the noble Lord who is introducing it wishes to prevent museums from undertaking the new developments which such income can finance. I am genuinely at a loss to see how this would benefit anyone.
The noble Baroness, Lady Birk, made the point that museum attendances will fall if charges are introduced. With respect to the noble Baroness there is certainly some evidence that this happens in the short term, but by no means necessarily in the long term. I would point to the success of the National Maritime Museum at Greenwich, where charges were introduced in April 1984 and paying attendance during the nine months of 1985 was 11 per cent. up on the previous year. I think that that illustrates that the public are prepared to make a payment for the success of a museum in making itself attractive to visitors.
Baroness Birk: My Lords, I was not talking about charges. I was talking about the so-called voluntary contributions at the V & A. Attendances have gone down in the three months compared with the same three months last year. That is what I was comparing.
Lord Belstead: My Lords, I am saying to the noble Baroness that she needs to wait a little while and she may well find, although the case is slightly different, that the attendances will rise. Incidentally, the noble Lord, Lord Ritchie of Dundee (who is always very fair in the case he makes), although he was supporting the Bill of the noble Lord, Lord Jenkins, said fairly in his speech that he felt the way in which those voluntary contributions were being collected at the V & A was sensitive and sensible.

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The noble Lord, Lord Jenkins, will forgive me if I say that I found his opening speech had rather a Bourbon flavour about it, for it harked back a good deal and showed little recognition of the opportunities for raising money which the noble Lord, Lord Annan, so rightly pointed out to us towards the end of his speech. The decision on whether, and how, to charge should be left to trustees to take in the light of the circumstances of their own particular institutions. This discretion Lord Jenkins's Bill would wholly take away. It is for that reason, and for that reason only, that the Government cannot possibly support this Bill and would wish to support the amendment of my noble friend.
10.48 p.m.
Lord Jenkins of Putney: My Lords, your Lordships would not welcome my replying, or seeking to reply, at any length to the debate at this time of night. I shall content myself with thanking those noble Lords who have contributed, and even those who have not seen wholly eye to eye with the views that I expressed in moving the Bill.
I wish to make just a couple of points for information. In regard to the views of the staff, it would be wrong to give your Lordships the impression that I have gone round all the museums seeing what the staffs in every one of them think, but those I have discovered where charges are about to be imposed or have already been imposed are implacably opposed to the whole idea. One example is from the British Museum natural history branch:
"This branch supports the Bill … that the making of charges for admission to museums and galleries in Great Britain, funded wholly or mainly out of monies provided by Parliament, is prohibited and lends its support to campaigns being waged in other museums and galleries against the imposition of such charges."
The resolution goes on to that effect.
There is widespread opposition against this whole idea among the people who do the main bulk of the work in the museums, and they have the right idea about what museums are for. My noble friend is indicating to me that I should not expand on that point. I shall, however, quote again an authority who I think has put one of the points in a nutshell. I refer again to Mr. Jeffrey Archer, the vice-chairman of the Conservative Party. He said on 18th October, 1972 (at col. 331 of Hansard):
"We on this side of the House must fight again and again to hold back from this sort of charge, for one reason and one reason only: this is a civilised standard we have set, and the fact that other countries do not have it does not mean that we should become uncivilised as well."
Mr. Jeffrey Archer spoke better for the Conservative Party on that occasion than did the noble Lord whose implacable reasonableness is the only possible reason why I would not wish to pursue this Bill further.
I now come to my appeal to the noble Lord who is moving the amendment. I should like to ask him this. There are noble Lords about the House who, though in principle opposed to the idea of charging, feel that the Bill is defective in some degree, or needs altreration or change. Will the noble Lord deny them the opportunity of moving amendments to improve the Bill? Will the House deny itself its role of producing a Bill in a better form to the other House? Is this not our
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traditional role? Will not noble Lords at least say that this is something which we must do? Will they not join me in asking the noble Lord not to press his amendment, but, if he does press it, in saying that we must, in the interests of what is our function, defeat it?
10.51 p.m.
Lord Harmar-Nicholls: My Lords, I do not know how pleased the noble Lord's noble friends will be when he puts them in the same Lobby as Mr. Jeffrey Archer. I hope that they will feel at home. I hope they feel that they will do that on more than this one occasion; if they want to do their duty.
Of course we must put my amendment to the vote. The noble Baroness, Lady Birk, spoke as though it was my amendment that was changing the law. It is not my amendment that is changing the law. I want to retain the law that has been in operation since 1972. It has worked all right. It gave a freedom to the trustees to do certain things in the interests of their museums. Some of them have taken advantage of that by opening shops, others by putting on charges and others by imposing a voluntary donation. It is not my amendment that seeks to alter the law; and I do not think that a case has been made out for altering the law.
It is the noble Lord's Bill which wants to make it impossible for people to make a voluntary donation. I believe that the noble Lord, Lord Annan—as he so often does—in an examination of the Bill put in a nutshell the real issue. Do we, or do we not, want to remove the freedom from the trustees? The noble Lord, Lord Annan, said that the freedom of the trustees should be curtailed. The only thing that the Bill does it to curtail the freedom of the people who have the job of ensuring that these museums remain in existence at the high level of excellence to which we have always been used.
The noble Lord, Lord Donaldson, made a point which I accept. He said that arts should be supported sensibly. Nobody disagrees with that, and the arts will go on being supported sensibly. The Government have given an undertaking that the support at the high level that has been introduced this year will be maintained irrespective of what happens over the next three years and, very likely, beyond that.
We must face up to the fact that because of the excellent case made for wanting to preserve our museums and make them available—which I accept, and in my speech I tried to say that I have the same high principles for retaining this that the people who are not in agreement with my amendment have—and with things as they are and as we all know they are likely to develop, it needs a partnership between the central government support which the noble Lord, Lord Donaldson, wants, and the trustees having the freedom to use any methods that they think are in keeping with their possessions to enable them to exist in the future.
The noble Baroness said that I ought not to put my amendment to the vote. The very fact that I put down the amendment was a very clear indication that I thought it was important enough to be put to the vote irrespective of the arguments. The fact that I used the procedure of endeavouring to delay the Second Reading for six months was a very clear message in parliamentary language as to what we wanted.

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Otherwise, I would just have voted against the Bill; so the indications as to what I thought ought to be done were very clear from the time this amendment was put on the Order Paper.
I believe that the message that we received from the noble Lord, Lord Annan, ought to be reflected in our vote if we eventually go into the Lobbies. I repeat that I move the amendment standing in my name on the Order Paper.
10.57 p.m.
On Question, Whether the said amendment shall be agreed to?
Their Lordships divided: Contents, 23; Not-Contents, 34.

DIVISION NO. 1

CONTENTS

Annan, L.

Henley, L.

Belstead, L.

Hooper, B.

Brabazon of Tara, L.

Lindsey and Abingdon, E.

Brougham and Vaux, L.

Long, V.

Caithness, E.

Lucas of Chilworth, L.

Davidson, V.

Mottistone, L.

Denham, L.

Perth, E.

Eccles, V.

Simon of Glaisdale, L.

Gisborough, L.

Skelmersdale, L.

Harmar-Nicholls, L. [Teller.]

Swinton, E.

Harris of High Cross, L. [Teller.]

Whitelaw, V.

Windlesham, L.

NOT-CONTENTS

Airedale, L.

McNair, L.

Beaumont of Whitley, L.

Nicol, B.

Birk, B.

Pitt of Hampstead, L.

Brockway, L.

Ponsonby of Shulbrede, L.

Carmichael of Kelvingrove, L.

Rea, L.

Crawshaw of Aintree, L.

Ritchie of Dundee, L. [Teller.]

David, B.

Robson of Kiddington, B.

Donaldson of Kingsbridge, L.

Seear, B.

Elwyn-Jones, L.

Shackleton, L.

Fitt, L.

Silkin of Dulwich, L.

Graham of Edmonton, L.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stoddart of Swindon, L.

Hayter, L.

Taylor of Blackburn, L.

Hutchinson of Lullington, L.

Tordoff, L.

Irving of Dartford, L.

Underhill, L.

Jenkins of Putney, L. [Teller.]

Wells-Pestell, L.

Kennet, L.

Ypres, E.

Resolved in the negative, and amendment disagreed to accordingly.
On Question, Bill read a second time, and committed to Committee of the Whole House.

Greater Manchester (Light Rapid Transit System)(No. 2) Bill [H.L.]
Committed to an Unopposed Bill Committee.
House adjourned at five minutes past eleven o'clock.