Lords Sitting of 20 March 1986

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

Self-employed Persons: Unemployment Records
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how they propose to record the numbers of self-employed persons who are out of work.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, the monthly claimant count includes most previously self-employed people.
Baroness Nicol: My Lords, I am not quite sure that I fully understand the Answer which I have been given. My understanding was that self-employed people who are not in employment could not claim benefit. If this is not so, my whole Question is based on an incorrect premise. Will the Minister correct me before I go further?
Lord Young of Graffham: My Lords, I was trying to set a precedent for the shortness of an Answer! Self-employed people who claim supplementary benefit are included in the count. The only people who are not would be self-employed people who were not eligible for unemployment benefit, but, in the event that people do not have sufficient means, they would be included in the count. Indeed, the survey shows that some 30,000 previously self-employed people who were seeking work but were not claiming benefit were therefore excluded from the count, but, at the same time, that was offset by 50,000 others who said they were claimants but were not seeking work or who had some paid work during the week in reference.
Baroness Nicol: My Lords, I was simply clarifying the Minister's reply to my original Question. The Minister will recall no doubt that on 20th February when we last discussed these statistics he was very emphatic about the need to have accuracy in the figures, and he said that self-employed people from now on were to be counted in the interests of accuracy. Therefore I am not quite clear how he redresses the balance on this particular calculation. If self-employed people are now to be included in the numbers of those employed and are therefore to affect the percentage of employed, is he satisfied that the present system properly reflects those who are out of work, bearing in mind the fact that employers now expect so many tradesmen to become self-employed before they will take them on? I think the figure is being distorted.
Lord Young of Graffham: My Lords, I am grateful to the noble Baroness. The monthly claimant count is a count of all those who are claiming unemployment benefit or who, if unemployed and available for work, are claiming supplementary benefit. The employment statistics are the ones which we wish to ensure are correct. At the moment we only get those results either by the census, which is once in every three years, or by the labour force survey. I am looking to find ways of advancing the publication of the labour force survey so that we get a more up-to-date account of the number of employed people within the economy.
Lord Renton: My Lords, do those statistics sadly exclude briefless barristers?
Lord Young of Graffham: My Lords, I will inquire.
Lord Stoddart of Swindon: My Lords, but on the—
Noble Lords: No, no! The next Question has been called.
Lord Stoddart of Swindon: My Lords, that was a—
Noble Lords: Order!

National Freight Corporation: Workforce
3.5 p.m.
Lord Sandys: 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 effect transfer to the private sector has had on the workforce of the National Freight Corporation.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, the transfer of NFC to the private sector was by means of employee ownership, the effects of which have been beneficial at every level of the business, from commitment at the workplace to involvement in strategic decisions.
Lord Sandys: My Lords, I thank my noble friend for a very encouraging reply. Can he say whether it is the present intention that there will be a public flotation after 1987 or whether this is, as at present arranged, strictly an employee participation in the shareholding?
The Earl of Caithness: My Lords, whether the company goes on to the Stock Exchange is up to the company and not up to the Government, but I can confirm that my noble friend is right, because the consortium's articles of association prevent it from going public before 1987 at the earliest.
Lord Underhill: My Lords, although everyone will be appreciative of the progress made by the National Freight Corporation, does the noble Earl agree that these are the same workpeople who were working when they were part of the nationalised industry? Does this not prove that the National Freight Corporation was a profitable enterprise when under public

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ownership and that it would have remained a very useful combination for an integrated national transport system?
The Earl of Caithness: No, my Lords. I disagree with the noble Lord on a fundamental point. It is not necessarily the same workforce because the numbers have increased since NFC was privatised. Before that, the numbers were going down.

"Hospital Watch": Television Series
3.8 p.m.
Lord Auckland: 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 conclusions they have drawn from the BBC 1 television programme "Hospital Watch".
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, although Ministers never have time to watch television, I am told that this excellently made and interesting series of programmes gave a very good and true insight into the wonderful work being carried out in hospitals, not only in Portsmouth and the Wessex region but right across the country. It emphasised the dedication and skills of all the staff in the National Health Service who provide care and services to those of us who require treatment. The confidence that patients have in the National Health Service also came across strongly.
Lord Auckland: My Lords, I thank my noble friend the Minister for that helpful Answer. Will she not agree, whether she has seen the programme or not, that the BBC is to be congratulated on producing a programme with real nurses and real doctors taking part? Does she also agree that the programmes will be an enormous reassurance to those who have to enter hospital for an operation or for any other reason? Will she convey to her right honourable friend, when the next review body reports, the need for nursing sisters in particular to be remunerated more generously? Is she aware that in this programme there was a nursing sister who gave enormous reassurance to an old lady recovering from a corneal graft? Does not that, plus the very heavy pressure on the junior doctors, make the results of the next review body a most vital occasion?
Baroness Trumpington: My Lords, I hope that the programme will have helped to ease many of the anxieties that people have about needing treatment in hospital. I am sure that it will have reassured them about the care that they can expect. With regard to the pay of nursing sisters, as for all NHS and midwifery staff, it is determined following the recommendations of an independent review body. The Government have made it clear that we shall implement review body reports except where there are clear and compelling reasons for not doing so.
Lord Molloy: My Lords, is the noble Baroness aware that there is one small aggravation in the film which has grown enormously since, and which is causing grave concern not only to those who are sick but to the nurses themselves? Have we not now reached the appalling situation where, if a student nurse is successful in her examinations, becomes a state registered nurse or a state registered midwife and is living in what we call a nurses' home, she may get threatened with eviction? Does she not think that such practices ought to be looked at by her department?
Baroness Trumpington: My Lords, there has recently been a full debate in this House on nurses. There has been an equally full debate in another place. I would suggest to the noble Lord that I cannot go into such detailed information and perhaps he might turn to those two debates.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether she is aware that one night during the programme there was an appeal for nurses because the hospital had a red alert because so many nurses and patients had 'flu? Are nurses offered 'flu vaccine and, if so, do they take it up?
Baroness Trumpington: My Lords, in a totally different context, I have been informed that 'flu vaccination is quite useless.
Lord Ennals: My Lords, while I disagree with the last conclusion of the noble Baroness, and while I did not see the television programme to which the Question refers, I should like to ask whether the noble Baroness is aware that my own personal hospital watch last week was involved with the proposal to close Westminster Hospital. Will the noble Baroness assure her right honourable friend that any such move would be vigorously opposed in this House?
Baroness Trumpington: My Lords, that question of the noble Lord, Lord Ennals, is wide of the Question on the Order Paper.
Lord Cledwyn of Penrhos: My Lords, the noble Baroness has just made a very important statement about 'flu vaccine, which is widely advised by doctors. Is she now saying on behalf of Her Majesty's Government that the anti-'flu vaccine is ineffective?
Baroness Trumpington: No, my Lords. My statement came after having visited one of the government laboratories. They have for many years carried out experiments in a certain school, using 'flu vaccination. As your Lordships will be aware, the 'flu bug is of a different nature virtually every year, and therefore they informed me that vaccination against 'flu was a rather pointless operation.
Lord Marsh: My Lords, does the noble Baroness not agree that her answer was wide of the original Question?
Baroness Trumpington: With gratitude, my Lords.
Lord Paget of Northampton: My Lords, is the noble Baroness aware that the National Health Service has

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been giving me 'flu vaccine, in which, until I heard the noble Baroness, I had the utmost confidence?
Baroness Trumpington: My Lords, I assume that the noble Lord is of the kind whom 'flu bugs do not love.
Lord Winstanley: My Lords, while I am reassured to learn that Her Majesty's Government are listening to professional advice on 'flu vaccine—advice with which, I may say, I agree—may I express the hope that the Government will also listen to professional advice about the Pertussis vaccine?
Baroness Trumpington: My Lords, I feel sure that the Government will listen.
Lord Cledwyn of Penrhos: My Lords, is the noble Baroness aware that noble Lords and the House are aware that there are various strains of 'flu virus and that this fact is taken into account? Is she further aware that a newspaper today reports that her department is working on the vaccine for the coming winter? Will she make it clear to the House that she is not condemning the 'flu vaccine absolutely? Will she consider this matter again and come back to the House to make a full and clear statement to relieve public anxiety, which is bound to be awakened by what she has said today?
Baroness Trumpington: My Lords, of course I am not condemning any 'flu vaccine. Of course research is being done into 'flu vaccine; and I stand by what I was told. If I am informed afterwards and if I have in any way misled the House, I will most certainly make a statement.
Lord Ennals: My Lords, can we get a little more clarification on this, because it was a very important statement that was made? Is it not the policy of the noble Baroness's department at this stage to ensure that certain categories of people who might be more in danger, including nurses and doctors, have 'flu vaccine available for them? If that is the policy, surely it must be thought by her department to be of some value.
Baroness Trumpington: My Lords, that latter question, like the former question of the noble Lord, Lord Ennals, is wide of the original Question.
Lord Nugent of Guildford: My Lords, is my noble friend aware that the position is that the vaccine which is given every year is based on the virus which has attacked us the previous year—and usually two—but that this year particularly some new sub-type came into this country and we were vulnerable to it? I was one of the victims. Is my noble friend aware that normally the standard vaccine does give protection?
Baroness Trumpington: My Lords, I am sorry that I have started such a hare, but I merely report what I have heard on my travels, which I take to be informed information. I will gladly come back, or perhaps in answer to a Written Question give the information. If I have given incorrect information, your Lordships can be sure that I shall be told so.
Lord Auckland: My Lords, reverting to the original Question, may I ask my noble friend the Minister
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whether she has had any contact with the regional health authority of the Portsmouth area in regard to this programme? If not, will she encourage her right honourable friend to obtain a report as to the happenings which were revealed about those particular hospitals?
Baroness Trumpington: My Lords, I am told that the programme was very successful with regard to those particular hospitals. If for any reason the health authority wishes to approach either the BBC or the department, I feel sure it will.
Baroness Masham of Ilton: My Lords, will the Minister read The Times of today, where an article refers to a vaccine from Russia which may cover all strains of 'flu?
Baroness Trumpington: My Lords, if I have time, I will gladly do so.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that no one who heard all the exchange during the past few minutes would think for one minute that she had made an official government statement on the question of the vaccine?
Baroness Trumpington: My Lords, I hope I made it perfectly clear from the start that I was speaking as a result of a visit to a laboratory.
Lord Cledwyn of Penrhos: My Lords, is the noble Baroness aware that the House has a good deal of sympathy with her on this issue, but in view of the anxieties that have obviously been raised will she now give an undertaking to make a serious, considered statement to the House at the first available opportunity?
Baroness Trumpington: My Lords, if the usual channels wish me to do so—I believe that is the way I should answer—I will gladly do so.
Lord Kinnaird: My Lords, is it not a perfectly clear case of many a true word being spoken in jest?
Baroness Trumpington: No, my Lords, I was not speaking in jest.

North Sea Oil Revenue
3.18 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how far their economic strategy is dependent on North Sea oil.
Lord Young of Graffham: My Lords, the economy has taken the unprecedented collapse in the oil price in its stride—a tribute to its underlying strength and to seven years of sound and prudent financial and economic management.
Lord Dean of Beswick: My Lords, I am grateful for the Answer, but really, how can the Minister say that we have already adjusted to the decline in oil revenues when that has been taking place only over the past 25 weeks and there has been no cut in production as yet? Would the Minister like to say why the Chancellor has essayed a guess of 15 dollars a barrel—and it was only a guess—when the price of oil could go up to 20 dollars or, unfortunately, go down to 10 dollars a barrel? Will this not blow a hole in the Chancellor's calculations for the coming financial year?
Lord Young of Graffham: My Lords, when the Chancellor has to prepare a Budget he has to do that on the basis of certain assumptions about the levels of prices and other matters in the year to come. The past three months have been particularly difficult for the Chancellor and I think all your Lordships would wish to congratulate him on the skill and expertise he has shown in managing the economy in such a difficult time. The advice that the Chancellor has taken about the price of 15 dollars per barrel is his best assumption in the present circumstances. What will happen in the future is not known to anyone in your Lordships' House; nor even, I suspect, to Sheikh Yamani himself.
Lord Campbell of Croy: My Lords, does my noble friend agree that no British Government can count ahead upon any particular quantity of revenue from this source, as it is affected by both the world price of crude oil and the dollar exchange rate? But has not the Budget this week clearly demonstrated that government policies can be pursued, and indeed are being pursued, even when there is a large and unpredictable reduction in this revenue?
Lord Young of Graffham: My Lords, it demonstrates not only that government policies can be pursued and are being pursued but that they will be pursued in the face of future circumstances.
Viscount St. Davids: My Lords, does the noble Lord agree with the words used by the questioner who said that it was an unfortunate drop in prices? Is it not more true to say—and perhaps the noble Lord could advise us—that the drop in prices was of enormous advantage to this country, and indeed to the whole world?
Lord Young of Graffham: My Lords, I think that in the course of time circumstances will show us that that will be greatly to the advantage of Europe, and the United Kingdom is firmly part of Europe.
Lord Grimond: My Lords, may I ask the noble Lord the Minister whether he is aware that at least there should be congratulations for the Chancellor of the Exchequer on one point and that is on his strictures to the oil companies on their failure to reduce their prices in line with the reduction in the price of crude? Will the noble Lord assure us that it is the Government's view that lower oil prices actually give the economy great hope, can be a considerable boost to the economy and are not something to be deplored?
Lord Young of Graffham: My Lords, I agree with the second part of the noble Lord's question. As the months and years roll by, we shall see that the
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reduction in energy prices will constitute a great boost to our manufacturing industry and our export trade. The circumstances which the Chancellor of the Exchequer described when he gave evidence to your Lordships' Select Committee on Overseas Trade may well come about. So far as concerns the first part of the question the fact that two oil companies have decided to pass on the increase in costs may be confounded by other oil companies which might decide otherwise. In the end, the market will prevail.
Lord Williams of Elvel: My Lords, given the noble Lord's oft-repeated concern at the current rate of unemployment, which I shall accept as genuine (at least until I hear the answer to my question), and given that the Chancellor, after the fall in oil prices and by his own arithmetic has allocated £1 billion for tax cuts, does the noble Lord genuinely believe that the most effective use of those funds to reduce the unemployment level is to cut 1p off the basic rate of income tax?
Lord Young of Graffham: My Lords, that is another question; but to satisfy the noble Lord's curiosity about the shape of the Budget, may I merely say that the shape of the unemployment measures was all that I could have wished for.
Lord Barnett: My Lords, is the noble Lord aware that most people will accept that the Chancellor made a not unreasonable assumption of 15 dollars a barrel for 1986–87 and on the exchange rate that he had taken? On the other hand does he also accept that if it turns out that the Chancellor has been too pessimistic—which may well be the case—he will return to the House with a new Budget given that he has lost, on his assumption, £5.5 billion? Will the noble Lord on this occasion press his right honourable friend rather more than he did last time to ensure that he does something for the people for whom he has responsibility—namely, the unemployed—rather than for those on rather higher incomes?
Lord Young of Graffham: My Lords, I shall deal with the last part of that question, because it will be up to my right honourable friend to prepare his Budget in the normal way. I have no doubt at all that he will return to the other place in a year's time to deliver the next Budget, when everything will be going according to plan. I should like to break the linkage, which is shared by those opposite, that somehow unemployment and the expenditure of central government funds are inextricably linked. They are not. We have to look very closely at the quality of output and not the quantity of any input. I believe that the package we have and the improvements that we can make in our present expenditure on unemployment, which runs into many billions of pounds each year, will show that we can deal with unemployment. I know that it is a great temptation for your Lordships' House to deal with unemployment. It is the central issue of our day. This is the fifth Question in the past eight days, but the original Question was about oil.
Lord Tordoff: My Lords, do the Government accept that the reduction in oil prices should not be seen as a

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reason for reducing our efforts to save energy and introduce energy conservation measures both in industry and in the home in this country?
Lord Young of Graffham: My Lords, yes, I hope very much that those efforts will continue undiminished, because even with those price levels we will find that efforts to reduce energy consumption will pay for themselves in a very short time.
Lord Strabolgi: My Lords, arising out of the original Question and remembering that North Sea oil will last for only a few decades, may I ask the Government whether they have a systematic depletion policy which takes account of other energy sources, or is it all to be left in a spendthrift sort of way to market forces?
Lord Young of Graffham: My Lords, I do not think that market forces and being spendthrift can actually go together. It has seemed that the way governments have intervened in the past has resulted in policies more spendthrift than anything else.
Lord Molloy: My Lords, one of the things that follows from the reduction in oil prices—this may be a small matter but to millions of motorists it is important—is that there should be a reduction in the price of petrol at the pumps. The Chancellor has indicated that because of cheap oil he has added a few more pence to the price of petrol and that he was confident that the private companies which own the petrol stations would see that that was not passed on. It now appears that they have completely ignored the promise given by Britain's Chancellor of the Exchequer. Do the Government intend to do anything about it?
Lord Young of Graffham: My Lords, assuming that the price of oil does not change, I would invite the noble Lord to put down a Question in a few weeks' time to congratulate the Government on the then price of oil at the pumps.
Lord Molloy: My Lords, that was a very important question. Will the Minister make a big endeavour and really answer the question instead of dodging as usual?
Lord Dean of Beswick: My Lords, to get back to the price of oil, is the Minister not aware that due to the initiatives of the previous Labour Government, successive Conservative Governments have had the benefit of between £50 billion and £60 billion of financial assets from energy resources in the North Sea? Can he tell us what monument from the receipt of that money has been left us by this Government other than record unemployment and dole queues?
Lord Young of Graffham: My Lords, yes, gladly. In 1979, the net overseas investment of the United Kingdom was £12 billion. From the Chancellor's Statement, your Lordships' will realise that today it is £90 billion, the greatest amount of any industrial country in the world other than Japan. We are second. The dividends from those overseas investments will continue to flow long after the oil has run out.
Lord Rodney: My Lords, does my noble friend agree that the one thing the Budget has proved is that we are not an oil-dependent economy, as is contended so often by noble Lords opposite?
Lord Young of Graffham: My Lords, yes. I think that it will also show that we are entering a sixth successive year of growth, and it looks very much as if the seventh will also be in front of us.

Peterhead Harbours (South Bay Development) Order Confirmation Bill
3.28 p.m.
Viscount Davidson: My Lords, on behalf of my noble friend Lord Gray of Contin, I beg to move that the Bill be now considered on Report.
Moved, That the Bill be considered on Report.—(Viscount Davidson.)
Lord Kirkhill: My Lords, this Bill seeks to authorise the trustees of the harbours at Peterhead to construct extensive harbour works adjacent to their existing undertaking in the area commonly known as South Bay, Peterhead. Few private measures have evoked such bitterness in recent times, and the Bill should not pass the House unremarked. In essence, we have the trustees of the fishing harbour at Peterhead very properly seeking to improve their harbour to give greater protection to their harbour entrance and to provide for an expansion of port facilities.
Representations made to Parliamentary Commissioners sitting at Peterhead in May 1985 were to the effect that the trustees were seeking, first, to calm the waters of the inner harbour; secondly, to reduce the severe congestion which arises, particularly at weekends; thirdly, to provide for the expansion of the grain trade in the future; and, fourthly, to provide better facilities for fishing vessels.
These aims are eminently sensible and are worthy of the support of any prudent port manager, and indeed of Parliament itself. I should add that the commissioners, to whom I have referred, sat under the chairmanship of my noble friend Lord Hughes, who would have wished to be in his place today; but due to an inescapable prior commitment in the central area of Scotland, where he now lives, he is unable to be with us. However, he asked that I make his position clear to your Lordships' House.
Unfortunately, the scale of the proposed works went far beyond the stated aims and provided for an increase in commercial berthing capacity well in excess of 200 per cent. The plan deposited with the sheriff clerk at Peterhead in accordance with the terms of the Bill is capable of adaptation to accommodate ships of up to 24,000 tonnes deadweight. Clearly, this vast increase in total berthing capacity, and greatly enhanced ability to handle large vessels of a type never hitherto handled at Peterhead, placed the businesses of the other Scottish east coast ports very seriously at risk.
Not surprisingly, therefore, the ports of Aberdeen and Dundee and the Forth Ports Authority all objected, in company with the Transport and General

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Workers' Union, the Aberdeen Fishing Vessel Owners Association and the Aberdeen Stevedoring Company Limited. There were also petitions of objection from the North of Scotland Hydro-Electric Board, who operate a tanker terminal in the bay area, and from the Peterhead Bay Authority. Those objections were on the grounds of safety, having regard to the fact that the proposed works protrude into the bay harbour, and it was considered that they would put tanker traffic at risk. There were also, not surprisingly, strong complaints from the neighbouring residents, who still remain deeply concerned as to the effects upon their properties and upon their quality of life.
The Parliamentary Commissioners generally found in favour of the promoters, but effected some small modification by removal of the roll-on/roll-off facility and by placing some constraints upon the height of the development and upon blasting work with explosives necessitated by the need to remove rock in the course of dredging works. Consequently, the objectors petitioned Parliament. When the Bill was given its Second Reading on Monday, 16th December 1985, the great majority of speakers in the other place—representing all political parties, I might add—spoke strongly in favour of referral to a joint parliamentary committee of both Houses. Nevertheless, the Motion to refer the matter to a joint parliamentary committee of both Houses was defeated by a very narrow margin.
One of the objectors, Aberdeen Harbour Board, and acting on behalf of all the other objectors of Aberdeen, and with the encouragement and support of the Dundee Port Authority and the Forth Ports Authority, sought to meet with representatives of Peterhead Harbour Trustees to see whether one final attempt at compromise could achieve a solution mutually satisfactory to promoter and objector alike. It was in this somewhat difficult atmosphere that the chairman and the general manager of the Aberdeen Harbour Board finally met informally on two occasions with the chairman and the harbour master of the Peterhead Harbour Trustees. It has to be said that the two meetings which these parties held were conducted in a cordial and sincere atmosphere which had, as I understand it, been totally lacking from some previous discussions.
A new and completely modified construction plan was tabled by the representatives of Peterhead. This differs from the plan laid in accordance with the Bill before the sheriff clerk at Peterhead. The new plan provided for the major part of the works—the new south breakwater quay—to be constructed so as to provide a maximum depth of water of 8·5 metres. The plan also limited the dredged depth in works No. 1 shown in the order to 5·5 metres all over, instead of a part being dredged to a depth of 8·5 metres. The chairman and the harbour master at Peterhead categorically stated that they would be willing to enter into a written agreement not to handle offshore traffic—the principal cause of the concern at the other ports in the East of Scotland.
With the full approval of all the other objectors in Aberdeen and other ports to the south, the trustees were subsequently asked whether they could see their way to further limiting the depth and making other
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small modifications. No further concession was made, however, and the offer to enter into a legally-binding written agreement in regard to offshore traffic was not forthcoming. Indeed, such a legally-binding agreement in writing has been assiduously avoided.
I am advised that the chairman of the Peterhead Harbour Trustees has now sent to the Aberdeen Harbour Board a revised engineering drawing which shows that the depth of the principal new quay will be restricted to 8·5 metres, unlike the original plan. The chairman of the trustees has also given his word to Aberdeen Harbour Board that the trustees will not handle offshore traffic, and we must assume that this means that they will not only refrain from seeking such traffic but will positively decline any offers of such traffic. Similarly, he has given an assurance that, in accordance with the offer made earlier, dredging works No. 1 will be restricted to 5·5 metres. In some measure, this ameliorates the worries of the objectors and they have intimated that they are willing to accept that the word given by the chairman of the trustees will be honoured.
It has to be said that the enactment of this Bill will be contrary to the advice of the EC Court of Auditors, who are on record as stating that the ports of North-East Scotland are under-utilised and additional capacity in one port would be at the expense of all the others. Evidence before the commissioners confirmed that no new trade would be generated and there would be no net job gain for Scotland. On the contrary, evidence tabled on behalf of the promoters pointed to consequent job losses even as far afield as Inverness.
In my view, none of the objectors, and especially Aberdeen Harbour Board, would ever have stood in the way of an attempt to improve Peterhead Harbour for the benefit of the fishing industry, to reaccommodate their existing grain trade or indeed to improve the access to the harbours and give better weather protection. The bitterness of the past few months derives in part from the original engineering plan which has now apparently been superseded. Above all, it derives from the totally unjustifiable proposal, as I see it, to create a major new deepwater harbour within 30 miles of another major harbour which already has considerable surplus capacity. Even with the limitations upon which Aberdeen Harbour Board have now received recent assurances, the new facility would be physically capable of accommodating any ship which used Aberdeen or Dundee in 1985.
Furthermore, there can be little doubt that unfair competition will arise, since Peterhead currently depends upon casual labour who belong to no trade union and, unlike dockworkers in Aberdeen, Dundee and the Forth ports, are subject to no training scheme, have the benefit of no pension scheme and are not in regular employment.
At an estimated cost exceeding £13 million, substantial traffic must be generated to pay construction costs. The fishing industry contributes more than three-quarters of the ship dues and goods revenue of the Peterhead Harbour Trustees. It will, therefore, be the fishermen of Peterhead to whom the trustees will eventually be answerable if this grandiose development proves unviable, for it is they who will be paying.

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Time alone will tell whether Parliament has been wise in allowing this dubious measure to proceed. I hope that the worst fears of the objectors will not be fulfilled and that the danger of serious unemployment in ports to the south will not eventuate. But as the Bill now proceeds through your Lordships' House I have to express the hope that the trustees of the harbours of Peterhead will stand by their undertaking not to handle offshore traffic in the future. A failure of will by them in this regard would have the most serious repercussive effect upon the other ports of the east coast of Scotland.
Lord Campbell of Croy: My Lords, the noble Lord, Lord Kirkhill, started by saying that he agreed with the four aims, which he mentioned, which the trustees of Peterhead harbours have put forward as the reason for this confirmation Bill. Having just listened to what he has said, perhaps I may say that his objections appear to be, first, that the work proposed will be more extensive than is really necessary; and, secondly, that this will be at the expense of nearby ports, particularly Aberdeen. I understand entirely why the noble Lord has taken this line—among other things, he is a former distinguished Lord Provost of the City of Aberdeen—but I feel I must put briefly another point of view.
Peterhead has been, among the ports on the north-east coast, a very successful fishing port. The harbours there are meeting greater demand for providing berths for fishing boats but they are also experiencing a demand for the handling of grain and other bulk cargoes. At present, great congestion is being experienced in the harbours of Peterhead, particularly at times of the week when a lot of boats are there together.
The proposals in this confirmation Bill will, I understand, meet the demands of the success which Peterhead has been enjoying and will build upon it. In putting forward these proposals I believe that not only will the trustees be making sure that activity continues and is increased at Peterhead in accordance with the demand but that this will also have a good effect on the hinterland. Therefore I believe that the Bill ought to be supported.
3.45 p.m.
Lord Boothby: My Lords, as one who represented the burgh of Peterhead in another place for 34 years, who opened the present harbour which is rather too small, and who is the only surviving freeman of the burgh of Peterhead, I should just like to say that I warmly welcome this order. I think it is very necessary. I think that the promises and obligations made by the trustees of Peterhead harbour will be carried out.
It is to some extent a reflection of the expansion and growth of the inshore fishing industry not only of Scotland but of the whole of this country. I have spent over 60 years of my life in Parliament, and most of that time cursing successive governments to no particular avail although I think with good reason. It therefore gives me very great pleasure to say how warmly I support this Bill because it is in the result a reflection of the successful policy for inshore fishing generally, which the present Government have consistently pursued.
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The noble Lord, Lord Campbell of Croy, was perfectly right when he said that Peterhead deserves the success it now has, because of the services it has supplied. The two groups of people who have to be considered most in this matter are the fishermen and the public; and both want the expansion of Peterhead. The fishermen have proved for years now that they regard Peterhead as the best port of landing of the lot. The expansion of the industry as a whole and of the seafaring industry around the coast of Scotland is the justification for this order.
I therefore hope very much that the order will be given the welcome it deserves. I can assure your Lordships that I, who know them pretty well, am absolutely convinced that the trustees of the harbour of Peterhead will honour the obligations they have already given to Aberdeen.
Lord Ross of Marnock: My Lords, it is rather sad that we should have to have this debate because here we have a very deep controversy dividing a part of the North-East of Scotland—a tug-of-war between Aberdeen and Peterhead. I am beginning to think that the Government are in between them. I am very sorry for the Minister. He is neutral in this; he cannot say anything by convention. We are much freer on this side of the House.
I regret indeed that this is not a Public Bill; had it been, it would have gone on for quite a long time. The noble Lord, Lord Campbell of Croy, will remember that the last Bill we had on the extension of Peterhead was one that he raced through the House, but it was a Public Bill. I had the pleasure thereafter of opening the extension of the harbour. That was barely 10 years ago. It was an extension of the harbour of refuge. There are really two harbours in Aberdeen—the fishing harbour and the harbour of refuge. We now have this extension which is going to cost more than £13 million. That estimate was taken about two years ago and the cost is probably far higher now.
When one considers how much is going to be done and how much money is going to be spent, one can understand the concerns of other areas as to whether or not, in order to get a profit from that investment, they are going to extend their traffic, and that at a time when the EC already says that the underutilisation of the present facilities is about 50 per cent. We heard a Question today about the fall in oil prices and the effect that that might have. We heard how wonderfully we are doing without the profits and taxes from oil. If the price goes down and there is a laying-off in respect of the activities in the North Sea, which has been keeping both these ports and other ports in that area at a rate of prosperity greater than it has ever been, one can see the concern.
I read with very considerable care all that was said in another place just the other day. The Member of Parliament, Mr. McQuarrie, made great play of the fact—I am not quoting his words; I am not allowed to do that—that the facilities were intended primarily for the fishing industry. But the Minister, Mr. Ancram—or Lord Ancram, as he sometimes calls himself—who is neutral in this matter and merely explains it, had this to say:
"I understand that these facilities are intended primarily for commercial, that is, non-fishery, traffic".—[Official Report, Commons, 16/12/85; col. 87.]

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That is the difficulty. I do not believe that they are going to spend upwards of £13 million to make the harbour safer for the fishing industry. I wish that there had been much more come and go between Aberdeen and Peterhead in that respect.
Lord Boothby: There will never be that, my Lords.
Lord Ross of Marnock: Now, now, my Lords, we have heard plenty from the noble Lord, Lord Boothby, in the past, and we all know of the glories of Peterhead. Some of us have a soft spot for Aberdeen as well, despite what happened to its football team last night.
The Government may well be neutral but I believe it is true to say that the trustees at Peterhead asked the Government for some money. They asked the Government for some £12 million and did not get it. I wonder where all the money is to come from. Will it come from the Scottish Office or from the Ministry of Transport? If non-fishery harbours are supplied with cash by anyone, it is from that source. It does not look as though the EC is going to come across with the money if it thinks that there is already over-provision in that area. It is regrettable that those two areas and harbours which are so close and which have been so friendly over the years should be fighting over that matter.
I may explain to your Lordships who do not realise this that there was a heated argument in another place and there was very much a cross-party Division in the House. The Government's majority was only 18. Still, the matter has already been decided and we must accept it.
As I have said, I am sorry for the Minister because the convention is that the Secretary of State treats the recommendations from the Parliamentary Commissioners seriously and respectfully. Only in very exceptional circumstances does he set them aside. He has decided—rightly, I believe—that there are no exceptional circumstances in this case.
Although the Secretary of State is not to be regarded as expressing a view on the merits, because he incorporates the report in a Bill it means that the Government must be silent. I wonder whether they will be silent again when they are asked for money in respect of this matter, because then they will not be able to remain neutral.
Viscount Davidson: My Lords, as the noble Lord, Lord Ross of Marnock, said, the Government's attitude towards this Bill is one of total neutrality. I had not intended to intervene in this debate but I should just say to your Lordships that, as all the proper procedures have been observed, it is the Government's duty to accept the recommendations of the Parliamentary Commissioners and to submit to Parliament a confirmation order that has been the subject of an inquiry. That is what your Lordships are doing today.
On Question, Bill considered on Report.

Appropriation (Northern Ireland) Order 1986
3.53 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move, That the draft order laid before the House on 19th February be approved.
The noble Lord said: My Lords, I beg to move that the Appropriation (Northern Ireland) Order 1986 that was laid before this House on 19th February be approved. Your Lordships will be pleased to learn that the order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974.
The draft order appropriates the sum of £72·7 million for the 1985–86 Spring Supplementary Estimates. Your Lordships will find the detailed allocations of that amount by both Class and Vote in Part I of the schedule to the draft order. That sum is in addition to some £3,056 million which has already been approved by your Lordships for the 1985–86 financial year. A simple addition will show that that brings the total Estimates provision for 1985–86 to £3,129 million.
Part II of the schedule gives exact details of the issues for which the Vote on Account for the next financial year of £1,365 million is required. That provision is necessary to enable services to continue until the 1986–87 Main Estimates are considered by your Lordships later in the year in the traditional way. Full details of all the provisions sought in the draft order can be found in two volumes, copies of which have been placed in the Printed Paper Office. Those are entitled the Spring Supplementary Estimates and Statement of Sums Required on Account.
As is usual on an occasion such as this, I shall say a few words about the general economic position in Northern Ireland. The trend for both total industrial production and manufacturing outputs remains upward; output for those sectors in the first three quarters of 1985 was up by around 2 per cent. When compared with the same period of 1984. However, that is still some 9 per cent. below the level obtaining in 1979 in the case of manufacturing.
On the employment front, in the year to September 1985, which is the latest period for which information is available, total employees in employment in Northern Ireland fell by 1,490, as against falls of 2,100 and 5,850 in the two previous 12-month periods. There is evidence that the numbers of self-employed may be rising. For the period 1981–84 the increase in self-employment is estimated at 7 per cent.
Unemployment remains the main economic problem in the Province and the statistics go to prove that. In January 1986, the rate of unemployment was 21·6 per cent. compared with 13·9 per cent. in Great Britain and 19·5 per cent. in the North of England, which is the worst affected region after Northern Ireland. The Government will continue to do their best to relieve that problem through the job creation efforts of the IDB, LEDU and the various training and retraining schemes. The events in Ulster on the day of the loyalist strike, which, regrettably, were televised throughout the world, will not have helped the efforts being made by our industrial development agencies to attract inward investment, as your Lordships will appreciate.
In my remarks on the Estimates before the House this afternoon, I shall be using the term "token estimate", as is traditional. In fact, of the 22 Votes that require supplementation, nine are token estimates for £1,000. The purpose of a token estimate is to bring important changes within a Vote to your Lordships' attention where, in strict accounting terms, additional funds are not required.
The first of those token estimates appears in Class 1, Vote 1. In that Vote, an increase of some £200,000 is sought for the payment of student awards at Loughry, Greenmount and Enniskillen agricultural colleges, thus bringing them into line with other student support arrangements in Northern Ireland. However, additional expenditure has been more than offset by receipts from board and lodging charges in student halls of residence at those colleges. An additional sum of £600,000 is sought for scientific equipment to test meat for residues, including hormonal content, and for research into the potential of using irradiation for the preservation of food. Finally, within that Vote we have found it necessary to increase provision under the milk outgoers scheme by some £900,000 to meet the cost of compensation to those producers who have given up production.
In the light of the supplementary provision that is being sought on milk, I shall comment briefly on the quota situation. I know that this matter will interest the noble Lord, Lord Dunleath, and others who are interested in the agricultural scene in Northern Ireland. The additional amount of money brings the total provision for payments to milk outgoers to £1.3 million and represents the purchase of some 32 million litres of Northern Ireland quota that has been reallocated. In addition, a further 2.5 million litres has been made available through transfer of direct sales quota. Regrettably, that represents only about half of the Northern Ireland tribunal determinations in respect of exceptional hardship claims and allows some limited provision for small producers. However, the resolution of the quota shortfall difficulties in Northern Ireland is not, as your Lordships will be aware, a simple matter. Nevertheless, I am able to stress that there is presently a new EC outgoers scheme under consideration in Brussels and this may go some way towards solving the problems.
In moving to Vote 3 it will be seen that some £300,000 in aid from the European Community under the urban renewal regulation is being appropriated in aid in respect of expenditure on drainage infrastructure projects in the Belfast urban area.
Class 2, Votes 1 and 2, relate to the activities of the Industrial Development Board. In Vote 1, headed Industrial Support and Regeneration, an extra £518,000 is sought, £450,000 of which is to meet additional expenditure on factory building and estate development. The balance is to cover increased administration costs. In Vote 2, General Support to Industry, £20.6 million is required to meet claims for grant assistance arising from the IDB's activities in recent years in promoting and maintaining employment in Northern Ireland. Your Lordships may wish to note that in 1984–85 alone the IDB entered into agreements to provide selective financial assistance totalling some £133 million. The additional
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requirement in the current year is partly to meet that commitment.
In Class 2, Vote 3, Miscellaneous Support Services, an additional provision of £26 million is sought. This is made up of £1 million for the Local Enterprise Development Unit, £4 million for Harland and Wolff and £20.6 million for capital investment grants. The substantial increase for investment grants stemmed from changes to this scheme announced in March 1985. These included a reduction in the overall rate of grant from 30 per cent. to 20 per cent. with effect from 1st May 1985. Therefore, there has been some acceleration of investment by industry to take advantage of the higher rates of grants under the former scheme and also to benefit from the higher capital tax allowances which are being phased out, as your Lordships will be aware.
Class 2, Vote 5, covers expenditure by the Department of Economic Development on services such as youth training and employment. On the training side, an additional £1.82 million is required for the youth training programme and £1.48 million for the training on employer premises scheme. Your Lordships will be pleased to note that this year almost 16,000 young people benefited from the YTP compared to 14,000 in 1984–85. While we are still considering employment services, I should add that the action for community employment scheme, better known as ACE, provides temporary employment for the long-term unemployed. This very worthwhile service requires an increase of £1.75 million. However, by the end of this financial year the number of employees is expected to increase from 3,050 to some 4,400. The figure should exceed 5,000 by June 1986.
In Class 4, Vote 1, Roads Services, a net additional provision of £ 1.6 million is being sought for operation and maintenance of roads, street lighting and public liability claims. This additional expenditure is partly offset by additional receipts from sales of surplus land and the recoupment of VAT and EC receipts under the urban renewal regulation.
Moving on to Class 5, Vote 1, under the heading Housing Services, the net increase of some £6.1 million is attributable largely to a technical adjustment relating to changes in the pattern of government recoupment of the Housing Executive's expenditure on house renovation grants and to an increase in the number of grant applications.
Token provision of £1,000, which I referred to earlier, is sought in Class 6, Votes 1 and 2, headed Water and Sewerage Services and Improvement of the Environment, respectively. In Vote 1 an additional £1.6 million for operational and administration costs is offset by savings in computer costs and additional receipts, mainly from metered and other water charges. In Vote 2 your Lordships will be aware that major conservation legislation bringing Northern Ireland into step with the rest of the United Kingdom came into operation during the current financial year. This, together with the acceptance by the Government of the main thrust of the recommendations of the Balfour Report, A New Look at the Northern Ireland Countryside, has meant the commitment of an additional £0.7 million. The offset in this Vote is mainly from European Community receipts, again

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under the urban renewal regulation, leaving a token provision of £1,000.
I turn now to education. Supplementary Estimates are being sought in Class 8, Votes 2, 3 and 4. In Vote 2, Higher and Further Education, an extra £2.5 million is sought mainly for redundancy and compensation payments made to staff who were prematurely retired under university restructuring arrangements; some additional expenditure on computers and the cost of the 1985 pay award to further education lecturers. Under Vote 3, Miscellaneous Services and Administration, a token vote of £1,000 is sought to bring to your Lordships' attention the expenditure of £0.7 million on the installation and running costs of computer equipment and, on the income side, some £1.2 million from VAT refunds and EC receipts.
Vote 4, Education and Library Boards, is the final education item. Of the total £900,000 sought some £550,000 is required for increased capital expenditure on essential minor works in schools, including a number of health and safety schemes. The balance of £350,000 is a net figure resulting from a rephasing of estimated receipts from the European Social Fund, some of which are not now expected until 1986–87.
Class 9 covers health and personal social services and, in Vote 1, I should like to draw your Lordships' attention to a new Mental Health Commission which is provided for in subhead C7. The commission, which will begin formal work later this year, will be an independent body established under the draft Mental Health (Northern Ireland) Order 1986 which your Lordships will remember we were discussing earlier this week. The commission will safeguard the rights of patients in mental hospitals. The provision in the current financial year is to meet essential advance expenditure.
The other changes in Vote 1 cover increased expenditure of some £3.5 million, £1.1 million of which is to assist with the transitional costs of opening the new Belfast City Hospital. As your Lordships may know, the first in-patients were admitted to the new hospital early in January this year and the transition from old and (we have to call them) exhausted buildings to this splendid new hospital is now gathering momentum. Other significant increases are proposed in capital expenditure to take account of essential health and safety work and in grants to voluntary bodies.
In Class 10, Vote 2, Non-Contributory Benefits, a token estimate brings to your Lordships' attention increases amounting to almost £3.5 million which are, again, offset by savings and increased receipts. In Vote 4 an additional sum of about £3 million is sought for administration and miscellaneous services, covering salaries, wages and charges for agency services.
I briefly also draw your Lordships' attention to amendments to the ambits of Votes 2 and 4 and consequential changes to Section G and A of the respective Votes. These changes clarify the relationship between the Department of Health and Social Services and the Northern Ireland Housing Executive in the payment of housing benefit. They were made following criticism by the Comptroller and
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Auditor General in his report on the 1984–85 Appropriation Accounts.
In Class 11, Vote 3, Other Public and Common Services, some £4.1 million is sought mainly to finance the on-going reorganisation of the efficiency services and the related costs of the computer hardware.
I am glad to say that I now have the word "finally" in my brief. In Class 12, Vote 1, under the heading Office and General Accommodation Services, an increased provision of some £2 million is required mainly to meet additional costs in the new works and maintenance subheads arising from the repair of bomb damage to government premises in Belfast.
I have gone galloping through this Spring Supplementary Estimate and your Lordships have been remarkably patient. I have brought out the points which seemed to us to be of greatest importance and worthy of your Lordships' attention. I trust that I have covered the main items and the main threads in this draft order, and I promise that I shall listen attentively and deal expeditiously with any questions and queries which your Lordships may raise. I commend the draft order to your Lordships.
Moved, That the draft order laid before the House on 19th February be approved.—(Lord Lyell.)
4.10 p.m.
Lord Prys-Davies: My Lords, we on these Benches thank the noble Lord, Lord Lyell, for having taken the House through the Votes and the divisions which are particularised in the draft order which is before the House and for having singled out the items which the Government consider to be of particular importance. However, the noble Lord the Minister acknowledged that in Northern Ireland unemployment has continued to rise. Would the Minister confirm whether or not there is also an emigration problem in the Province or whether we can forget about that? We have been told that unemployment is at its highest level and as usual the Province has a much higher rate of unemployment than is suffered in any other part of the United Kingdom; moreover, sadly 40 per cent. of the unemployed are under the age of 25. I think that this kind of evidence shows clearly that the employment policies of the past seven years have not broken down the core of the unemployment difficulty. It remains the biggest single problem and the central one which faces the Province.
The debate on the Motion for approval of the draft order must be seen in this context and in the light of the contribution that the proposed expenditure can make to the creation of jobs. We on this side of the House are therefore very glad to give our full support to the proposed additional expenditure by the independent development board, the local enterprise development unit and the training and re-training schemes, in order to enable them in combination to press on with their industrial development policies and to produce jobs.
This order brings out how vital it is that the policy of attracting foreign capital and investment should not be put at risk. I understand that there are some grounds for believing that the IDB has found it more difficult during the past 12 months to attract foreign investment, and perhaps the Minister can confirm

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whether or not that is the case. I also assume from what he said that there may be firm evidence (though it is early days) that the destructive events of 3rd March and the threats of more days of protest to come have either produced or are likely to produce repercussions on inward investment. Perhaps the Minister can confirm this. It seems to me that everyone who cares about the future of Northern Ireland has a heavy responsibility not to damage the image of the Province around the world.
Whether the jobs which are available are being fairly distributed between Catholics and Protestants is quite another matter. I was not entirely surprised to read a worrying report from the recently established Fair Employment Trust, pressing home its attack on the Fair Employment Agency and its failure to correct employment inequality in the Province. I am not sure whether I am doing justice to the report of the trust, but surely it is a trenchant criticism of the agency. I should be interested to learn from the Minister whether the Government regard it as fair criticism. Do they accept that the existing religious inequality in employment is a matter of pressing concern in Northern Ireland? In particular, in the light of this report will the Minister assure the House that the agency is not subject to undue constraints on its resources? And, if the resources are there, how can the agency adopt a more vigorous role in bringing about religious equality in the place of work?
There is no question of a lack of vigour or failure of will at the Northern Ireland Equal Opportunities Commission, which is concerned with sexual inequality in the place of work. Of course this is another area of importance to the Department of Economic Development. The department will know that the commission is pressing for more funds to enable it to discharge its statutory functions effectively and to cope with an increasing workload. The commission tells me that a small additional increase of no more than about £10,000—we are talking about that kind of money—would make a world of difference to the commission. It is to be hoped that this modest additional expenditure can be found somehow or other. The Northern Ireland Office obviously covers a wide range of activities in health, education, housing, agriculture and environment as well as industry, and the Minister has highlighted the achievements which have been secured, which we do not seek to deny.
The Minister has also referred to the increased allocations for the various Votes, but the point that I and other noble Lords are making is that they fall far short of what is needed if services to people are not to be curtailed. The health boards, the education boards and the housing executive are still faced with major problems. As I understand it, every board and the housing executive will have to effect savings, and they will have to curtail services in order to live within their budgets during the next financial year. One has only to read the Northern Ireland newspapers and the bleak warnings in their letters columns to know that there is a lot of anxiety about the provision and the standard of services, and that there is a growing belief that the shortage of funds is biting deep. One reads of action committees bringing together local citizens to defend their services.
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All this has been highlighted in the debate on this draft order in another place, and in the time that is available to me I do not propose to go over the same ground. We on these Benches are bound to accept that one of the prime concerns of any department of state must be to ensure the cost-effective use of public funds, and it is right that every undertaking or board should constantly review and examine its pattern of expenditure and policy assumptions. But it must also be accepted that in seeking to achieve savings a board may sometimes get the arithmetic wrong. It may demand savings, when none should be demanded, or indeed a unit may be asked to bear an unduly heavy share of the burden.
That brings me to the savings which are required of the physiotherapy department of the Royal Victoria Hospital, which is a major teaching hospital with specialities which serve the entire Province. I should like to dwell for a minute or two on the difficulties facing this department. The Minister of Health for Northern Ireland believes that there is too little control of the budget in this particular hospital. He seems to base his belief on comparisons with expenditure in hospitals in Great Britain. I am not sure that that is a fair comparison because we are not necessarily comparing like with like. But if the department wishes to make that kind of comparison, then it ought to be with the teaching hospitals on the mainland and taking into consideration the multi-million pound endowment funds which are available to some of the teaching hospitals on the mainland. That has a bearing on your pattern of expenditure.
About six months ago, as part of the drive for economies, the Eastern Health Board required the physiotherapy department of the Royal Victoria to produce savings of £65,000 in the financial year 1985–86. So in a full year the savings could amount to about £80,000 to £100,000. In order to secure this target of £65,000, the board placed an embargo last summer on the filling of vacant posts. Eleven posts have not been filled and in the result the staffing of the physiotherapy department has been reduced by about 25 to 30 per cent. That is the problem.
Those working at the hospital who have a feel for the situation have made it clear to the hospital administrator that the savings required are totally unacceptable. That is the considered judgment of at least seven consultants at the hospital, including a consultant surgeon, consultant physicians, and, very importantly, a consultant physician in geriatric medicine. Those eminent men consider the decision to be shortsighted because the rehabilitation of patients and their discharge to the community to live an independent life will be delayed. Indeed, some of the consultants claim that it may no longer be safe to admit patients to some wards if they are denied access to adequate physiotherapy facilities.
We know that the Department of Health has received many critical letters about the decision since last August, but to no avail. The Minister has adopted the line that he will not interfere with a decision of the board, although the board is his agent. In the replies which have emanated from his office over the months, copies of which I have seen, the Minister does not even bother to question how his agent has arrived at the target of £65,000. He appears to assume that the target

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is correct. But, my Lords, is it? And what is the position if that target is wrong?
So we should be grateful if the noble Lord, Lord Lyell, will speak to his colleague and persuade both his colleague and the department to question critically the validity of the target of £65,000 in the light of the following three specific considerations. First, physiotherapy, compared with the other units at the hospital is being asked to shoulder an unduly heavy proportion of the cutbacks. I understand that the planned physiotherapy staff cuts are of the order of 25 to 30 per cent. while the reduction expected of other units at the hospital are no more than 5 per cent. If my information is correct, that comparison suggests in itself that something may be amiss.
Secondly, it is thought that the decision pays inadequate attention to its adverse effects on the service to patients, even though at least seven consultants at the hospital have testified that the effects on standards are not acceptable to them. In the Department of Health, surely the testimony of the seven consultants is worthy of note. Thirdly, the decision fails to recognise that an effective department of physiotherapy in an acute hospital is essential for the working of a dynamic geriatric and rehabilitative service, which in turn will have a significant spin-off for the community health service.
It would make nonsense of planning and policy statements if the action taken in this one department in order to save £65,000 in the short term weakens the long-term strategy of the Minister of Health, a strategy which we believe to be correct and which is to prevent or reduce long-term dependency wherever possible. So here we have an instance where a short-term policy appears to be in conflict with a sound long-term policy.
I should like to move on to one other subject. The debate takes place against the background of the Hillsborough agreement. In Northern Ireland, one requires not only political co-operation and security co-operation between two sovereign states but economic co-operation as well. Indeed, this is promised in Article 10(a) of the agreement. Is the Minister able to give an indication to the House whether consideration is now being given to joint initiatives to assist the economic and social development of the Province, and in particular the border counties, the border areas? I understand from EC literature that the border area has been hard-hit by international recession. The EC seems to acknowledge that almost by definition it is in need of cross-frontier co-operation and joint development programmes, and indeed in the past the EC has considered that the problem is worthy of special investment. Is the department giving consideration to joint co-operation between the two sovereign states to improve economic and social development in the frontier area?
I have also read that some knowledgeable people in Strabane and Dungannon believe that the competition between the two main promotional bodies north and south of the border might be working to the detriment of this particular area. Indeed, a leading trade unionist in Northern Ireland has called for the integration of the IDB and the IDA. Is this too sweeping a suggestion? Even if it is, is the department examining
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the case for evolving reciprocal arrangements between the IDB in the North and the IDA in the South, which could lead to mutually satisfactory developments?
Britain and France have co-operated to make Concorde. Is there any valid reason why Britain and the Republic cannot co-operate in the shipyards of Belfast? Or is the room for manoeuvre still too limited? I believe that the fact that one can ask these questions in March 1986 suggests that we are able to think afresh, and that is due to the political initiative of last year. I have taken up more than my allotted time. With those few remarks, and one or two caveats, we approve the order.
4.30 p.m.
Lord Hampton: My Lords, I, too, should like to thank the noble Lord the Minister for introducing the order. There was a significant debate on Monday on the Local Government (Temporary Provisions) (Northern Ireland) Order which I was unfortunately not able to attend. I hope that it will be in order therefore for me now to make a few general comments on the critical situation that the Province faces before moving on to some questions more immediately linked to the present order. Of the 15 Unionist MPs in the other place, only one, I believe—an honourable exception, I feel—Mr. Enoch Powell, attended to take part in a debate there last week on this order. It is good, however, that there are speakers from Northern Ireland here today. I shall, of course, pay careful attention to what is said.
I was shocked, in the literal sense, to read in an article in the Sunday Times of 9th March by Michael Jones and Chris Ryder the following:
"The Reverend Martin Smyth, the Belfast South MP and contender for the Official Unionist leadership said on 22nd February 'Today is the 100th day of Dublin rule over Ulster"'.
The article went on:
"To those who have not actually read the modest and cautious Hillsborough text or taken on board the Irish Government's treaty commitment that the status of the Province can be changed only with the consent of the Ulster people, it makes a powerful rallying cry".
I find it depressing that a man of intelligence and integrity—I do not believe that Mr. Smyth deliberately sets out to deceive—can so totally misrepresent the position. What, I would ask him, does he think that we are doing here in this Chamber this afternoon? I should like at this stage to recall the response to the Statement by the Secretary of State, repeated in your Lordships' House on 4th March, about the day of disruption in the Province the previous day. At col. 104, the noble Lord, Lord Maude of Stratford-upon-Avon, said:
"My Lords, may I as one who has for long supported the Unionist cause ask my noble friend whether the Government can do anything to convey to the leaders of the Unionists in Northern Ireland that they are rapidly losing all the goodwill which over many years has been built up on this side of the water?".
The noble Lord, Lord Lyell, was rather guarded in his reply. Can he now tell the House whether this message has been brought home to the Unionist leaders with maximum force? For the Unionists, I submit, seem bent on a tragic course, and their actions, paradoxically, seem more likely to damage the union that they so determinedly espouse than all the activities of the IRA over the past 16 years.

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Secondly, have the Government been able to make any progress in convincing the Unionists that the Hillsborough agreement is much more modest and cautious than they seem to think? I read in yesterday's Irish Times that Dr. Paisley and Mr. Molyneaux have been invited to talks with the Prime Minister but that they insist that the Anglo-Irish agreement must be torn up before they accept. Is the noble Lord, Lord Lyell, in a position to give the House any further information on developments here?
I come now to some questions more immediately linked to the order that we are considering. Under Class II, paragraph 3, on page 7, we read,
"For expenditure by the Department of Economic Development on the Local Enterprise Development Unit"—
that is, LEDU—
"aircraft and shipbuilding industries, energy efficiency",
and so on, the sum of £35 million. I wish to ask, at this stage, two questions relating to matters on which the noble Lord, Lord Prys-Davies, has already touched. Is it not true that the valuable work done by LEDU to ease the unemployment situation by helping small businesses will be seriously threatened by a widespread policy of disruption? Secondly, is it not true that Harland and Wolff is hoping to win the order for an auxiliary oiler replenishment vessel for the Ministry of Defence in open competition, and that this order also would be seriously threatened by any resort to stoppage of work? I understand, however, that excellent industrial relations have been maintained there over the past 10 years. We must trust that good sense will prevail.
Under Class VI, paragraph 2, we read of grants towards environmental services. This brings me close to the subject of tourism that I wish to raise. Would the Minister agree that visits from outsiders to the Province are sadly all too few and that tourism, which could be a valuable boost to the Province's economy, is already at a low ebb and would be completely knocked out if disruption went ahead? At a time when it is particularly vital to maintain close contact between the Province and the mainland this would seem particularly tragic. Can the Government do anything to help here?
Under Class XI, paragraph 1, on page 9, we see, for the expenditure of the Northern Ireland Assembly, the sum of £1,452,000. I believe, sadly, that the Assembly is no longer sitting. Can the Minister kindly inform the House whether this figure will be adjusted? Will he also remind us whether those elected as Members who choose not to take their seats are still entitled to claim payment?
We read that it may be necessary to send more troops to Ulster. I would only say that I support what my noble friend Lord Donaldson said on Monday—that the present form of direct rule is not an altogether satisfactory form of government. We must continue to look forward to an agreed form of devolved government when the people who live in the Province and who know the problems first hand can run their own affairs. In the meantime, we must continue as at present. We, on these Benches, support the order.
4.36 p.m.
Lord Fitt: My Lords, let me at the outset reinforce the remarks of the noble Lord, Lord Hampton, when he draws attention to the incongrous situation in which only one, or at the most, two representatives from Northern Ireland took part in the debate on this order in another place. As your Lordships will know, the order makes provision for the financing of almost every facet of life in Northern Ireland—jobs, homes and all the social services that are necessary in a modern state. Yet those elected to represent their constituents were unavailable. I understand why they were not there. I realise the very real depth of feeling that exists within the Unionist community against what they see as a betrayal by the signing of the Anglo-Irish agreement.
I notice, the longer I continue to live in Britain, the totally different atmosphere that prevails here in this island and the reality that exists for the people who have to live in Northern Ireland. It hinges on this great word "perceived". People on this side of the channel see the agreement as a step forward to bring about better relations between the Republic of Ireland, the two communities and the people in this island. In Northern Ireland, it is not perceived in that way. That may be wrong. It may be silly. The agreement may be totally misunderstood. Lies may be told; untruths may be told. But the vast majority of the people in Northern Ireland feel that it is an encroachment on the government of that country as they have known it hitherto.
Your Lordships will have heard in this House, and particularly in another place, that the Unionist Members are misleading their followers and that they are telling them untruths about what is contained and what is not contained in the Anglo-Irish agreement. But the Unionist Members are not the only people giving expression to those sentiments. For example, the Belfast Telegraph is by no stretch of the imagination an extremist newpaper, yet daily in its editorial columns the leader writers express great reservations as to whether the Anglo-Irish agreement will do what it was intended to do and bring about reconciliation.
It has to be conceded that since 15th November there has been very little sign of any reconciliation taking place in Northern Ireland. I think that this will be an on-going situation into the summer months. In Northern Ireland the summer months can be a very dangerous time when all the marches and demonstrations take place by both sides. I have seen them on all too many occasions. Both sides try to assert their supremacy and superiority over what they regard as the other "tribe". It is a potentially very dangerous situation. All the people of Northern Ireland would do well to sit back and take stock of the position they are in, and how much that position could deteriorate by unwise words or acts by leaders of the two communities.
In relation to this order there are only three items to which I should like to draw the attention of the House. First, I am not living in Northern Ireland but I have a telephone here in London. Hundreds of representations have been made to me recently about the massive cutbacks in the budget of the Northern Ireland housing executive. From that budget £44

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million have been cut away. That means that 1,000 fewer houses will be built, many more thousands of houses will not be repaired, and many more hundreds—if not indeed thousands—of houses will not be rehabilitated. Northern Ireland still has a waiting list of nearly 25,000 people who are living in deplorable conditions. It means that they will have to continue to live in these conditions until the Government reassert their policies, or discover new ones, and take into account the very real hardship that has been caused by this massive cutback.
In yesterday's Official Report, in answer to a Question by my noble friend Lord Blease regarding the Government's policy in relation to the provision of nursery schools, the noble Lord in his reply said that it was the Government's policy that nursery schools should be made available for the whole population. That was the Government's intention. In fact in this order there is a cutback. In an area where it is very necessary that expenditure should not be cut back 3,000 places are being cut from two nursery schools. These two schools are desegregated schools. If the Ministry were looking for any schools to close—and I would not concede that they should close any—they should have been much more sensitive than they have in this case.
The reason I rose to my feet this afternoon is to reinforce what has already been said and to make a further personal plea on behalf of Harland and Wolff, the Belfast shipyard. Many people throughout these past few weeks have referred to the sad events of 3rd March when industrial disruption took place in the city of Belfast. That had not happened in the Belfast shipyard since 1974. It is 12 years since a day's industrial production was lost. That was lost because of another appendage of the Sunningdale agreement—in other words, the Council of Ireland. I suggest that other shipyards in the United Kingdom which are in competition with Harland and Wolff do not have the enviable record that we have in that shipyard.
Harland and Wolff have produced both Royal Navy and merchant ships for this nation. I have had the pleasure to sail in some of them throughout my years as a merchant seaman. I do not think that there can be any question about the ability of the workforce in Harland and Wolff to take on this project. Indeed, Harland and Wolff would not be the sole beneficiary if its consortium were to be successful because 30 per cent. of the consortium's activity would be based in Belfast, 35 per cent. in Glasgow, and 20 per cent. in other parts of England. It would therefore bring work and employment to a spread-out workforce throughout the United Kingdom.
The dangerous thing about what is happening and what people are saying is this. Some people are saying that because Harland and Wolff went on political strike—like many of the other industries—on the 3rd, the Ministry of Defence may take the attitude, "You are not going to get this order because you engaged in industrial disruption against the Government's declared policy of support for the Anglo-Irish Agreement".
I should not like to attempt to blackmail the Government. However, Harland and Wolff, I believe,
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is entitled to receive this order. Let me put on record—as most of your Lordships and I hope most of the elected representatives in another place will know—the unremitting activities on behalf of Harland and Wolff by its managing director, Mr. John Parker, and his public relations officer, Dr. Maria Moloney. They have spent night after night, and day after day, trying to make people on this side of the water, both in this House and another place, aware of the great potential. They are not trying to sell a pig in a poke. They are not trying to over-sell Harland and Wolff. They are quite aware of the abilities of their work force. If Harland and Wolff are successful in getting this order—as I sincerely hope they are—I believe that every man jack who is employed in the Belfast shipyard should express his thanks to the present managing director.
I therefore ask the noble Lord to take into account the linchpin that Harland and Wolff has always proved to be in industry in Northern Ireland, and in particular its relationship with the city of Belfast. I ask the noble Lord to do everything he can to ensure that the shipyard is given the order, on ability, and that no attempt would be made to blackmail the workforce of Harland and Wolff by saying that they were not to engage in industrial disruption or they may not get the order. In fact, if orders were to be given on that premise there would be a lot of shipyards—particularly Harland and Wolff s main competitor—who would not be in a very favourable position.
In replying to these three questions, I hope that the noble Lord will be able to give some kind of satisfactory answer, with particular regard to housing, the provision of nursery schools, and the AOR delivery to Harland and Wolff.
4.48 p.m.
Viscount Brookeborough: My Lords, I should first like to welcome this order and to thank my noble friend for the way he has introduced it. I should like to say how much I support the noble Lord, Lord Fitt, in his remarks about the general situation in Northern Ireland. It is to that effect that I should like to attribute my remarks.
In politics 24 hours is a long time, and in the time of Northern Ireland politics at the moment it is a very long time. I therefore think that it is absolutely right and proper that the situation in Northern Ireland should be debated in this House at this time because it may be some time again before we have an opportunity of looking in a calm way at what is a very difficult situation. Following the approval by this House and by the Government of the Anglo-Irish accord, the Government appealed to Unionists to delay their judgment because on looking at it in the cold light of many the day, Unionists would eventually see the advantage of this accord.
I am reporting to you the results of those reflections. They are my own as well as those of all the people to whom I have talked. As the noble Lord, Lord Fitt, has said, almost every citizen of Ulster believes that their status has been changed by the accord. Some are delighted with the change. They see it as the eventual end of the United Kingdom and of the Union. However, all the people to whom I have spoken, who

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believe in the Union—both Protestants and Catholics; and there are many Catholics who believe in the advantage of the link with the United Kingdom—feel shocked, shattered and betrayed, as do I. There is total unanimity among business people, professional men, farmers and workers—people who have never taken part in politics feel the same. If the CBI and the various organisations appealed for people to take no action on that day of action, it should not be taken that they approve of this accord. They do not, and privately they have made their recommendations to my right honourable friend the Secretary of State implying exactly what I have said.
It is impossible for me to describe the deep hostility that is felt. This is not due to bad or dishonest leadership on the part of the elected representatives; it is total gut reaction. I deplore many of the actions taken by some of the elected representatives. I especially deplore the insulting and extreme language which has been used. But no one should doubt the depth of feeling.
However, it is four months since the accord was signed; and what a condemnation of the Government there has been, because in those four months, in spite of enormous efforts, they have so far failed to convince the good people of Ulster that their original judgment was wrong. Day by day all who I meet are more than ever convinced that the accord is bad for Ulster.
Perhaps I may remind this House that in the days of the debates on devolution for Scotland and Wales the Conservative Party led the way to establish consent within those devolution Bills. Indeed, in Article 1(a) of this accord the two governments affirm that any change in the status of Northern Ireland would come about only with the consent of the majority. In 15 out of the 17 Northern Irish constituencies where an election was held in January, 420,000 people voted "No". If the Government cannot see that as a failure to reach a consensus, we should have a referendum.
In Ulster there is a widespread view that the accord is the result of two things: 14 years of murder and violence by the IRA, and many years of abstention and obstruction by the SDLP. Without those we should not have this accord. To me it is quite ironic that in English eyes the SDLP, who have spent many years in abstention, are the bright-eyed boys, the favourites; and the Unionists, who have soldiered on supporting the Government and the forces of law and order through all these difficult years, are the baddies. The ideas behind the accord were, first, to establish a reconciliation, a reconciliation what would allow the SDLP to get back into government within Northern Ireland. That good man, the Archbishop of Armagh, Dr. Robin Eames, has said that his finding is that reconciliation is far more difficult than it was, and I agree with him.
The agreement was an attempt to appease the minority and in fact has totally alienated the majority. The SDLP now have no incentive to participate in government in Northern Ireland. They have a 50 per cent. input into the conference, backed by the Dublin secretariat. They have no reason to move; they have got what they wanted.
The next part of the agreement was the intention to improve security. In fact, it must have made security
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far worse, because it must now be realised that the extra burden placed on the Royal Ulster Constabulary is immense and will be seen to be more unbearable as the summer season progresses. We have always been told that policing is possible only with the consent of the population, and we should not forget that 98 per cent. of the Royal Ulster Constabulary or the police come from the Protestant community which feels so betrayed. The fact that the number of Roman Catholics within the police is so low is not because anyone wants it that way; it is because the IRA has been incredibly accurate in their ability to murder gallant members of the Royal Ulster Constabulary who happen to have been Roman Catholics. Secondly—and this should not be forgotten—it has been due to the attitude of the SDLP and the Irish Government in their failure to support the Royal Ulster Constabulary and encourage the participation of the members of that community in the force. Something must be done politically before the lack of consent damages that magnificent force. There are powerful elements in the SDLP itself who look with considerable glee at the prospect of damaging the Royal Ulster Constabulary.
While I do not believe that it was the Government's intention to inflame Unionist opinion with the stationing of Dublin civil servants in Hollywood and the holding of the conference meetings at Stormont, the fact must be faced that it is inflaming Unionist opinion. At the last meeting (and I do not know how many noble Lords saw this on television) the castle was surrounded by police, and the policing cost £300,000.
A Member of the lower House said of the violence which was going on at Wapping that to print newspapers behind razor wire was unacceptable in a democracy. To me, to confer from behind those same sort of fences with rows of the Royal Ulster Constabulary must be more unacceptable. Is there not some room here for someone to do a little manoeuvring?
I appeal to noble Lords to understand that the Unionists have a case. A foreign power claiming sovereignty over part of British territory has been ceded power without the consent of or without the consultation of the majority of Northern Ireland. It is worth speculating what the position would have been if the minority had disapproved of this accord and not the Unionists. I do not believe that it would have been approved. It is a question of "minority rules".
I know—and it has been said here today—that Ulster lost all sympathy over the rupture of the Downing Street talks and the disastrous strike. However, if the newspaper reports are correct that the Prime Minister has asked to see the Unionist leaders, there is a ray of light. I beg the Government that, having misjudged the reaction of the Unionists—and my right honourable friend the Prime Minister said that they had misjudged the reaction—they must do all that they can to help the Unionists back to the table. They must be magnanimous.
I also appeal to the Ulster Unionist Party to find a formula which leads back to Downing Street. To fail to talk will lead to bloodshed and independence.
4.59 p.m.
Lord Dunleath: My Lords, I should like to thank the noble Lord on the Government Front Bench for his letter once again kindly inviting us to give him notice of any points that we might want to raise. I regret that, since I replied to the noble Lord, some water has flowed under the bridge and the points that I shall raise may not be entirely consistent with what I had anticipated when I wrote to him.
First, I turn to Part I, Class VI, Vote 2, which concerns grant aid to historic monuments and in particular listed buildings which are used for ecclesiastical purposes. I was one of those who put a certain amount of pressure on Her Majesty's Government to get them to expedite legislation to enable listed church buildings to be grant-aided. Eventually I welcomed the fact (and said so in the Northern Ireland Assembly) that this grant-aid was approved, even though we were unanimous in our view that the total sum of £150,000 per annum was inadequate for the task. But we welcomed it just the same.
Now it has become apparent that whereas grant-aid may be given towards restoration work required by the Department of the Environment, the amount of that grant aid may be more than offset by the amount of VAT charged. To quote an example, there is an appeal at present for the restoration of Down Cathedral, Downpatrick. This current year, if we are lucky, we may be given £25,000 in grant-aid, the maximum amount available to any one building used for ecclesiastical purposes, but we are going to have to pay out £30,000 in VAT. It is a question of "The Lord hath given, the Lord hath taken away"—and of course I do not refer personally to the noble Lord on the Front Bench.
It has since been put to me, and I had not thought this before, that it might save public money if, instead of grant-aid from the Department of the Environment, VAT were to be zero-rated, which would save administration and would mean that the saving in VAT would be proportional to the amount of money being spent on the restoration of that historic building. I should be grateful if the noble Lord would give some thought to that.
Turning to Class VIII, Vote 3, the Department of Education, I am aware that regional museums are not high on the list of priorities. But, if I may, I should like to make a brief plea for Carrickfergus. The borough council there were given to understand some years ago that there might be grant-aid available for a regional museum, but this has now been deferred indefinitely. The same is the case in other parts of the Province. But in the case of Carrickfergus it leaves the combined Cavalry Museum in an awkward position because they have been requested by the Department of the Environment to vacate the keep of Carrickfergus Castle, and, having hoped to be able to move into the new regional museum, they are left more or less between two stools. I would ask the noble Lord to be good enough to keep his eye on this. If it is not possible to grant-aid a regional museum in the near future, would he at least use his good offices so that the combined Cavalry Museum can remain in the keep of Carrickfergus Castle?
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Also in the same class, the Department of Education, Belfast Education and Library Board are cutting, I think, £100,000—about 25 per cent. —from the budget of the Belfast School of Music, which is leaving this institute in a difficult position. Similarly, the South-Eastern Education and Library Board were going to cut £75,000 from the budget of Ballynahinch Music Centre, though I understand since that this has been reduced to £50,000. I shall not go into the detail of this, except to say that I am sure that your Lordships who read the papers, watch television, and listen to the radio will mostly hear bad news about Northern Ireland. I like to try to take the opportunity whenever I can to say that that is not all the news. There is good news as well.
One of the bits of good news is the renaissance which has taken place since the war in the field of music. Quite apart from the well-known names such as James Galway, the flautist; Heather Harper, the singer; for that matter Desmond Hunter, our organ man; George Chambers, our New Orleans jazz man—a socialist in whom there is no guile—there are lots of musicians who have made it to the international scene as singers or members of well-known orchestras.
Music is a common field in which people from all social strata and denominational strata can come together. Those of us who make music in however amateurish a way know the sense of fellowship which exists when you get together with other people whom you probably did not know before, and with whom you may not have anything else in common, or when you get together and sing in a choir, however badly, or play in an instrumental ensemble, however badly. I would ask the noble Lord to have a look to see whether the education and library boards could be so funded as to avoid what I understand would be swingeing and damaging cuts to the two musical institutes to which I have referred.
May I turn quickly to Part II, Class IV, Votes 1 and 2. Again, I would venture to mention the rail service and the Department of the Environment. I have raised this matter before. The cross-Lagan rail link, I genuinely think, would be a good investment. It would make more viable the existing track mileage of Northern Ireland Railways. As the noble Lord will be aware, Northern Ireland Railways has recently invested in new trains for the Lame line, and I suggest that there would be much greater patronage of those new trains if the Larne line were directly linked to Central Station and the line to Bangor. I sincerely hope that when—I do not say "if"—it is possible to fund this rail link, the bridge will be made strong enough to be able to carry a certain 440 compound No. 85 called Merlin, which I hope will be having occasion to cross that way.
Part II, Class XI, Vote 1, refers to the Northern Ireland Assembly. I have in the past been presumptuous enough to say a few words about the Assembly every time a vote comes up relative to it, because I am the only Member of your Lordships' House privileged to be able to give a first-hand report on it. I am sorry to have to say on this occasion that the Assembly is no longer doing the work that it was appointed to do in the 1982 Act. Since late November it has not been scrutinising legislation; the committees

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have not been sitting and doing the work they are supposed to do and reporting to Ministers.
In fact, the Assembly has been used as a platform for the two Unionist parties to voice their discontent with the Anglo-Irish agreement. My party, the Alliance Party of Northern Ireland, felt that they could not, in all conscience, participate in this irregularity. Therefore, there is no alternative other than to face up to the fact that at the moment the Assembly is a waste of money. There is a sum voted here for it, and that money at the moment is not being properly spent. However, I respectfully ask that the Secretary of State should perhaps hold his hand for a little while, perhaps withdraw staff who were previously servicing the committees because there is nothing for them to do at the moment, but delay prorogation if possible.
I follow that with another suggestion which may perhaps be surprising to some of your Lordships. In fact, it is consistent with what I said in November just after the signing of the Anglo-Irish agreement. I said then that I should like to see the agreement work, but I doubted at that time that it was workable. I am afraid that I still have that doubt now. But consistent with my desire and the desire of my party to see something work, because we applaud and salute the objectives of the agreement, I ask the noble Lord to convey to Her Majesty's Government—and he will not enjoy doing this—the suggestion that they should in fact put the inter-governmental conference on ice for four months to allow consultations and talks to take place with the leaders of political parties and their representatives in Northern Ireland.
I realise that if Her Majesty's Government were to do this, they would be accused of weakness. They would be accused of being bullied by the day of action; of giving in to rhetoric and sabre rattling, and so on. But it takes a strong man, or for that matter, a fearless lady, to be brave enough to stand up to the risk of being accused of weakness, because in any dispute you have to be seen to be more than reasonable. Many is the industrial dispute that has lost public sympathy because one side has not been seen to be reasonable. Her Majesty's Government, to those with eyes to see and ears to hear, would be seen to be strong if they were to do that.
After all, what difference would it make if the governmental conference were suspended for four months? Let us for the moment look at the list which we received the other day of the topics to be discussed: tourism, industrial relations, industrial design, motor vehicle administration and road safety. You do not need Maryfield and an inter-governmental conference to discuss that sort of thing. Such matters have been discussed for years between the governments, north and south. It is not going to make the slightest difference to what goes on in any way. The main thing is cross-border security co-operation; and the two heads of police, the chief constable and the commissioner, have already got together. In the time-scale of the whole thing, four months is not going to make much difference. And I deliberately say "four" months. Noble Lords who have a diary on them will realise why I say "four" rather than "three". But otherwise we are faced with the situation of an irresistible force up against an immovable object, and that can lead to nothing but confrontation.
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If there is no outcome over the four months that I suggest, Her Majesty's Government can then say that every opportunity has been given for devolved government and for the politicians of Northern Ireland to work out their own destiny; and yet that has been turned down. Then, with every strength, justification and evidence of reasonableness behind them, they can say, "All right. We have done our best. It is direct rule for the foreseeable future and commissioners to run the councils which decline to do their work".
But, parallel with that, I think that three things are needed to convince the majority; and I still hope and believe it is most necessary to try to convince the majority which the noble Viscount, Lord Brookeborough, represents and speaks for. First, the South of Ireland must deliver. We have not seen reciprocal action either from the Republic of Ireland or from the SDLP yet. The SDLP has not come into the Assembly; the South of Ireland has done nothing about Article 2 of its constitution. I am not so worried about Article 3 because it is completely incomprehensible. But Article 2 certainly should be reviewed, as, indeed, its 1967 commission recommended that it should be, but it has done nothing about it.
Secondly, there is security. We have seen no substantial signs of improved security since the agreement was signed in November. If that were to happen, that would be very convincing to the majority. Thirdly, if the inter-governmental conference has to proceed, please let us have it more public; let us have the agenda made clear in advance and the minutes of proceedings made public in the same way as in the European Parliament which impinges much more on our sovereignty than does the Anglo-Irish agreement. but at least in the European Parliament the public have a right to know exactly what is going on and not just what the communiqué says afterwards.
I am a member of the Alliance Party whose objective is to build and not destroy, but I am not speaking for my party at the moment; I am speaking personally. I am sorry to have had to say what I have said, but I genuinely think that this is the only way forward. We cannot allow the situation to trail along indefinitely.
5.15 p.m.
Lord Moyola: My Lords, I am grateful to the noble Lord the Minister for what he said in introducing the appropriation order. I am afraid that I am not going to cover the wide field that he covered, because the only thing in my mind at the moment and the only thing that is taking priority as far as I am concerned is trying to resolve the extremely unpleasant political situation that exists in Northern Ireland today as a result of the Anglo-Irish agreement. I am not here to excuse or to condone in any way the events of March 3rd. I was abroad at that time so that what I know about it is only second-hand, but, at the same time, I know enough to know that it was an utterly deplorable day and probably did more harm to Northern Ireland than any other day in the course of my lifetime.
But I think it was a predictable outcome after the way in which the Anglo-Irish agreement came about and in view of its contents, bearing in mind that it came about without any Northern Ireland voice

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having a say in the matter at all. I say again that I am not here to condone what happened but I should certainly like to support the noble Lord, Lord Fitt, and the noble Viscount, Lord Brookeborough, in what they said about the feelings of the Unionist population. They feel completely affronted, very offended, and offended because they believe that those who have been upholding them for so many years against IRA efforts to push them into a foreign country have suddenly allowed that country to have a voice in their affairs. There is a feeling of absolute incredulity and disbelief; of being let down. It is not too strong to say that there is a feeling of betrayal that this should have happened. The crying need now is for something to redress that situation and to try to give support to the moderate opinion which still exists and which wants to see this matter dealt with in a democratic, reasonable and sensible way.
There are lots of people in Northern Ireland who are saying at the moment: "Why can't the British Government abrogate the agreement?". Those of us who live in reality know perfectly well that a sovereign Parliament is entitled to make what agreements it likes without asking anyone and that once they are made they are not normally abrogated without some extraordinarily good reason. To my mind, the idea of passive resistance, or any kind of resistance, with that object in view is complete, total and utter folly.
That is why I was so glad to see in the papers today that there are talks at least in the offing between the Unionist Party and the Prime Minister. I hope, if it is possible that the noble Lord when he replies may be able to tell us a little more about the prospect of this. Talking is what is needed. Talking is needed urgently, talking is what the moderate people of Northern Ireland want and talking is what the business people in Northern Ireland want so that they can at least keep intact such employment as still exists in the Province. I can only say that I hope that these talks will take place quickly, without any preconditions, and that, as a result of them, the agreement can be improved so that, while I doubt that it will ever be wholly acceptable, at least it can be made more palatable.
I think it should be borne in mind when entering into the talks that a lot of people have got themselves into positions which they cannot get out of at the moment without drastic loss of face. Great efforts to try to resolve this particular difficulty must be made on both sides. I say "both sides" because I honestly suspect that Her Majesty's Government had no realisation at all of what a storm this agreement was going to create.
I still believe that the worst feature of the agreement is the fact that there are no Northern Ireland voices or representations in the conference. In my view, this is what has been lacking all through and very little, if any, notice has been taken of the advice coming out of Northern Ireland. I am sure that the right and proper thing now is for there to be representatives of both communities at least sitting in on the conference and preferably taking part in its discussions. It must be quite plain now that secrecy has bred all this wild extremism. I am quite certain that the more secrecy there is the more extremism there is bound to be; and if things are to be cooled down, like the noble
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Viscount, Lord Brookeborough, I feel very strongly that it would be much better if the conference were held anywhere but in Northern Ireland.
I believe, too, that the secretariat in the building at Holywood is nothing but a focal point for disorder and ought to be removed. The same applies to holding the conference in Northern Ireland. It is possible that Her Majesty's Government may feel that to move the conference elsewhere would be some sort of a climbdown, but I am bound to say that I think it might well be worth it simply to obtain a measure of peace and to take the heat off the Royal Ulster Constabulary, who are at the moment a sort of "pig in the middle" between both sides of the community.
If I may digress at this point, like the noble Viscount, Lord Brookeborough—I will not labour this point because he has covered it very adequately—I feel that as a result of the agreement the Royal Ulster Constabulary are no longer policing with the consent of the Unionist population. I will not labour that point but I would say we all know that to do proper police work the consent of the population is absolutely vital.
Like the noble Lord, Lord Dunleath, I should like to mention the question of security, which was so much stressed in the Anglo-Irish agreement. I should like to ask the noble Lord whether there is any information he can give us—and of course I respect the fact that he may have a lot of secret information which he cannot give us—to show whether security on the southern side of the border has improved. My information is that there is really no change and, perhaps being wise after the event, it is obvious that there is not going to be any change, because certainly we in the North know, as I am sure many of your Lordships' know, that there is a massive law and order problem in Dublin in regard to drugs and mugging. Therefore most of the southern Irish police are very heavily committed in that field and so cannot be deployed effectively along the border.
I shall make one further point about the agreement itself, if I may. As I understand it, the aim of the agreement is to try to establish a devolved government in Northern Ireland which is acceptable to everyone. That is an aim with which no one could possibly disagree; but I certainly think, and I believe many others would agree, that the method of trying to arrive at it is probably self-defeating. The agreement makes plain that once a form of devolved government is established and various departments have been, so to speak, delegated to it, the matters delegated cease to be subjects for discussion in the Anglo-Irish conference. Put very simply, the difficulty here is that members of the minority may well think (and quite justifiably) that the Dublin Government are far better equipped to represent their views than would be their elected representatives in a devolved government. If I am right in this thinking, then it seems to me that there will be no devolved government and one of the prime aims of the agreement will have been defeated.
These are simply a few suggestions to try to deal with a very difficult situation. All I know is that if it is not dealt with urgently and the present impasse is not resolved, we are on the road to a major disaster. I can only say that it seems to me that this is a time for magnanimity rather than defiance on the part of Her Majesty's Government, and I hope that my noble friend will be able to indicate when he replies that this

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is the view they are taking. I would just add that I hope the talking will be given top priority and that no effort will be spared to bring that about.
5.26 p.m.
Lord Hylton: My Lords, I start by paying tribute to the powerful and responsible speech made earlier today by the noble Viscount, Lord Brookeborough. I should like also to agree with the noble Lord, Lord Moyola, in what he said about the importance of having a Northern Ireland voice in the conference of Ministers. I do not think I would go so far as my noble friend Lord Dunleath, when he talked about putting the agreement on ice for a period, but I should like to underline the importance of what the noble Viscount, Lord Brookeborough, was saying about the symbolic importance of the Maryfield office.
The general situation in Northern Ireland was well debated on 17th March, when your Lordships considered the Local Government (Temporary Provisions) (Northern Ireland) Order. I hope very much that the Hansard report of that debate will be widely studied in Northern Ireland. I will not go over that ground again except to say that I believe there is an urgent duty upon we English people to seek to understand the Unionist mentality. We need to enter into the shock and the shattered outlook which was described by the noble Viscount, Lord Brookeborough. We in England need to realise that many in Northern Ireland have been brought up, as the expression goes, to "look to your border"—in a similar way as so many white South Africans have been brought up in the tradition of the laager.
But while one can make that point, I have also to make the parallel point that it is equally the duty upon Unionists to understand British traditions—traditions based on notions of fair play, cricket, and the Queensberry Rules. Unionists have to recognise that the British public will not tolerate relationships of dominance and subservience within the United Kingdom. It is well known that there are two traditions and two cultures in Northern Ireland. Each is entitled to equal respect and equal opportunities, so long as each obeys the law and keeps the peace. People in Britain will not, I suggest, put up with the dominance of one tradition over the other any more than the rest of the world today would accept a continuation of British colonial rule in Africa. It is in this context that the recent speech of Mr. Frank Miller, the general secretary of the Official Unionist Party, was made, in which he mentioned that a better alternative agreement is so greatly to be welcomed.
Many of your Lordships call yourselves Unionists, or have Unionist sympathies, and I beg of you to use your influence with the Apprentice Boys organisation to prevent violence in the town of Portadown on Easter Monday. Some marches may be traditional, but they are no longer acceptable if they infuriate local inhabitants. In a democratic society, respect for one's neighbours' feelings is essential. Provocation is completely out.
I come now to the nuts and bolts of today's order. I have given notice to the noble Lord the Minister of a number of points that I wish to raise. The matter of grants to Citizens' Advice Bureaux, community associations and voluntary organisations has already
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been raised. It was explained in considerable detail by Mr. Stuart Bell, speaking from the Opposition Front Bench in another place. That will be found in Hansard of 11th March at cols. 683–4. The situation is also well covered by two parliamentary Questions for Written Answer put down by the noble Lord, Lord Melchett, on 11th March. I entirely appreciate that the noble Lord, Lord Lyell, probably cannot tell us much today on that subject. As he rightly pointed out on Monday, Belfast City Council will meet on 27th March. I am sure that we all hope that it will take the steps necessary to protect common and community services which are as vital to ordinary people in Unionist areas as to everyone else elsewhere. As we still have 11 days in hand, I shall assume that contingency plans are well advanced.
I turn briefly to education. I submit that Lagan College and the three new integrated schools which opened in Belfast last September have established beyond all possible doubt the strong parental demand that exists for integrated schooling. I think that the "Dunleath Act", if I may call it so, which my noble friend piloted through Parliament some time ago envisaged that existing schools would from time to time opt for integrated status. Experience now seems to show that that is unlikely to happen. The demand is for new integrated schools with new governing bodies—new wine skins for new wine—although it may well be that some of those new schools will be able to use existing school premises.
I therefore plead with the Government to reduce to the minimum the probationary period during which new schools have to pay all their capital costs, as well as 100 per cent. of the teaching costs. As each new integrated school is saving the Government money, could it not be conceded that at least the tuition costs should be met from public funds from the very start?
As to prisons, I very much welcome the news that the new prison in Maghaberry has opened and has already absorbed all the women prisoners from Armagh. I should like to ask the noble Lord when the first wing for men will open on that new site and what effect that will have on the existing overcrowding in the Crumlin Road prison?
The noble Lord may be aware that I have a certain fondness for the city of Derry and its walls and, indeed, a remote family connection with the Bishops Gate. That rather splendid monument, which I can well believe to be a listed structure, at the moment is crowned with a very unsightly army post made of concrete blocks. Surely with modern, sophisticated electronic and other means of surveillance that post could be removed. To do so would give access to the whole circuit of the walls to visitors and tourists whom we all wish to encourage. The Government, I think, missed the opportunity to remove the post in advance of the international gathering of the clan Doherty. I hope that they will soon remedy that omission.
In conclusion, it would be helpful and enlightening if the noble Lord could say something about recent progress in Northern Ireland towards a two-year youth training scheme for people aged between 16 and 18. Will he also say what the prospects are for a two-year period for the ACE (action for community employment) scheme? At present, the one-year scheme means that people have to be laid off by

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voluntary organisations at the very moment when they are beginning to become really useful.
5.35 p.m.
Lord Lyell: My Lords, I, the Government and, I am sure, your Lordships will be immensely grateful for the very high level of debate and the concentration that there has been on wide aspects of the order that we have before us this evening and for the wide-ranging subjects which were covered by two of my noble friends, my noble friends Lord Moyola and Lord Brookeborough. He has once again caught me out. I am afraid that this afternoon I am not wearing one of my proudest possessions. My County Fermanagh tie is packed ready to go with me on various journeys. I assure him that my love affair with the county of Fermanagh is undying and as strong as ever.
The replies to my opening comments were led by the noble lord, Lord Prys-Davies. We were grateful for his forthright support and his party's support for the promotion of Northern Ireland's economic well-being. The noble Lord began by asking me what I thought was a fairly simple question, but he and your Lordships will be aware that one must be careful and try to get the details right. He asked me about the effects of immigration in connection with unemployment levels in Northern Ireland. I am advised that Northern Ireland has experienced what we classify as net out migration—he may make of that what he wishes—since before 1871. I hazard the hypothesis that 1871 is a statistical benchmark. There has been out migration since 1871, although its level has, for obvious reasons, varied.
The 1970s were a period of relatively high migration outwith the Province. We have some evidence that that has dropped to very low levels at present. One potentially more serious problem is that many of the best qualified students from the Province do not necessarily return after studies at universities in Great Britain and, thanks to Northern Ireland's immensely high standard of education, at universities and institutes throughout the world. From my visits to various institutes, I have found a gratifyingly high rate of return of students who have had experience and training throughout the world. They have taken their qualities and spread the fame of Northern Ireland throughout the world.
The noble Lord, Lord Prys-Davies, asked me about the Fair Employment Agency and the criticism of that agency from the Fair Employment Trust. I understand that the Fair Employment Trust has written to my right honourable friend the Secretary of State on that matter and that he will reply shortly. But I stress that the Government fully support the work of the Fair Employment Agency which seeks to achieve equality of opportunity and eradicate discrimination in employment in Northern Ireland.
The noble Lord also raised the matter of the Equal Opportunities Commission and its request for a modest increase in funding. Once again, my right honourable friend the Secretary of State for Northern Ireland is corresponding with the chairman of the Equal Opportunities Commission, and I hope that once we have a definite result from this correspondence we shall be able to let the noble Lord know. But the point is being taken on board.
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The noble Lord, Lord Prys-Davies, raised the matter of the day of action and the image of Northern Ireland that it gave throughout the world. This point was put strongly by my noble friend Lord Brookeborough. We understand that there has been considerable negative feedback—which means that there has been a bad impression—from the overseas promotion officers of the IDB all over the world, and their own very praiseworthy and strong efforts to promote inward investment have become more difficult as a result of the so-called day of action. As I stressed before, the events of that day received widespread adverse publicity and the effects will become fully known in the immediate and near future.
The noble Lord, Lord Prys-Davies, raised the question of physiotherapy—something which has concerned me personally—in connection with the Royal Victoria Hospital. All of my limbs have been great beneficiaries of physiotherapists, following various efforts of mine on the ski slopes. So I speak with heartfelt gratitude to the noble Lord for raising this point. The closure of the out-patient service at the Royal Victoria Hospital is temporary. Some posts will be filled as an interim measure and the hospital's medical executive committee is to set up a small subcommittee to draw up plans for the physiotherapy services. This is a local management issue and I hope the noble Lord will accept that it will be dealt with at unit level. I take the noble Lord's point about the various comparisons. He mentioned the sum of £65,000. He and the noble Lord, Lord Dunleath, will know that the figure of 65,000 is graven on my heart. I thought, at first, that he was referring to the tonnage of the milk quota. I cannot answer the other three points raised by the noble Lord this afternoon, but I will see that he receives a swift and efficacious reply to them.
The noble Lord mentioned development in border areas. The Government are fully committed to alleviating social and economic problems throughout Northern Ireland. The machinery that we have developed for dealing with public expenditure priorities is designed to ensure that the very substantial level of expenditure in the Province, which on a per capita basis is about 30 per cent. higher than anywhere else in the United Kingdom, is allocated in a way that ensures that taxpayers' money is spent in areas of greatest need. To the extent that it makes economic sense to co-operate with the Republic in any particular project, we shall do in the future, as we have done in the past.
The noble Lord mentioned our initiatives on unemployment. The entire thrust of the Government's economic policy for Northern Ireland is dictated by the need to tackle this problem. We have always said that there is no simple or easy solution and our strategy is many-faced and comprehensive. There are three main elements. They are, first, to strengthen and diversify so far as we can the industrial base through assistance for new investment and expansion and maintenance of existing firms in Northern Ireland; secondly, to equip the workforce with the skills which are needed in modern industry; and, thirdly, to give useful work and training opportunities to everybody in Northern Ireland.

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The noble Lord also asked about the IDB and its opinions on attracting inward investment over the last year or so. I am advised that in the calendar year 1985 the IDB managed to promote approximately 4,000 new jobs in Northern Ireland. Those included some 1,900 new jobs in companies with a parentage outside Northern Ireland. The IDB managed to secure those new job promotions in spite of the very difficult economic background in Great Britain and western Europe. On the inward investment side, competition for internationally mobile investment continues to intensify and we have to fight very hard. But we believe that the IDB has all the tools it needs to represent Northern Ireland to the best of its ability. We believe it is doing a fine job and we undertake to see that the IDB will receive all our support in that objective.
The noble Lord raised the question of constraints on resources for the Fair Employment Agency. The budget for the agency in 1985–86 shows an increase of 63 per cent. in real terms since its inception in 1976. I am able to tell the noble Lord that additional resources will be provided in 1986–87, as soon as agreement has been reached with the agency on the recommendations arising from its recent review of the staffing structure.
The noble Lord referred to the general constraints on public expenditure. I am not able to accept the thrust of what the noble Lord said, which was that all social services in Northern Ireland are suffering expenditure cuts. I shall give two examples. First, expenditure on health services in the six years 1979–80 to 1985–86 has grown in cash terms by 82 per cent., which is 13 per cent. when measured against the general rate of inflation. Secondly, we shall be spending more in real terms on housing in 1986–87 than in any of the years 1980–84 inclusive. I hope that that covers most of the points raised by the noble Lord, Lord Prys-Davies.
The noble Lord, Lord Hampton, was kind enough to warn me that he would be asking one or two questions about tourism. The tourist industry in Northern Ireland has, I am afraid, undoubtedly suffered from the poor image of the Province over the past 16 years, but the industry has proved to be exceptionally resilient and it has maintained a tremendous level of activity. But we have not yet returned to the level of the peak years of tourism in the late 1960s. In those days, over 1 million tourists were recorded per annum, but, with the exception of 1981 which proved particularly difficult for the tourist industry in Northern Ireland, the numbers have strongly increased since the mid-1970s. In 1985, we recorded 912,000 visitors to the Province who spent just under £90 million. The Northern Ireland Tourist Board will continue, strongly and vigorously, to promote the Province as a tourist destination with the aim of ensuring that tourism continues to increase and to bring economic benefits to the Province.
The noble Lord, Lord Hampton, and others of your Lordships, including the noble Lord, Lord Fitt—who alas, told me that he had to leave the Chamber for the very good reason that his wife is unwell; and I hope that she soon recovers—referred to Harland and Wolff, and expressed the hope that it will be successful
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in its bid for the auxiliary oiler and replenishment ships for the Ministry of Defence. Your Lordships will be aware that the decision on the placing of this order is a matter for my right honourable friend the Secretary of State for Defence. I hope that a decision on the order will be taken shortly. We are all very grateful indeed, and I am sure Harland and Wolff will be grateful too, for the kind and generous tributes paid by the noble Lord, Lord Fitt, to the capabilities of the yard which are known world wide, and also for the tribute to its chairman and to the managing director and his assistants.
The noble Lord, Lord Hampton, had one other query on LEDU. Since its inception in 1971 LEDU has promoted more than 20,000 jobs, including 4,000 in the last financial year. This is the highest number of jobs promoted in Northern Ireland in any single year since 1971. It maintains the performance of recent years in which a succession of record job promotions has been achieved by the agency. We regard this as a marvellous achievement which has been attained in the face of a very difficult economic background. I am sure all of us would hope that the future performance of LEDU will not be affected by the recent day of action. It is much too soon to say, as I expressed in an earlier reply, whether this day of action will have affected LEDU in any way, but we shall have to wait and we may have to see.
The noble Lord, Lord Dunleath, raised a number of points, some of which I shall be able to help him with; others not. I noted with interest the noble Lord's query on VAT. I am afraid that I am not able to give him an answer this afternoon. He will accept that it is a very complicated matter, but I shall certainly bring his comments to the attention of Her Majesty's Customs and Excise, and I hope that, expeditiously, either that department or I as one arm of the Government will be in touch with the noble Lord.
The noble Lord raised the question of the railways and the cross-harbour bridge. He and other noble Lords who go to Northern Ireland will be aware that a firm of consultants was appointed in the middle of 1985 to review Belfast's strategy of transport. This review is being carried out as part of the statutory development plan for the Belfast urban area for 1986 to 2001. A major element of that review will be the reappraisal of the investment proposal included in the present strategy—the new cross-harbour rail and road bridges downstream of the three main central Belfast bridges over the Lagan. I am given to understand that the review is proceeding on schedule with a report which is expected towards the end of this year, 1986. I hope that ere long we shall have some better news for the noble Lord.
The noble Lord raised the question of the Carrickfergus Museum. He will be aware that there is a Question down on the Order Paper to be answered orally. I think it is still there and will be answered later. He will know that the castle is maintained by the Department of the Environment as one of our most important historic monuments. There is a need for urgent restorative works in the portion of premises currently used by the museum, but the provision of local museum facilities is a matter in the first instance for the Carrickfergus District Council, and it need not necessarily be dependent on the availability of central government funds.
Lord Dunleath: It is, my Lords.
Lord Lyell: I said "need not necessarily", my Lords. Perhaps we can leave it there. I am sure that if the noble Lord wants to take part in the deliberations that might be carried on at a later date in your Lordships' House he may elicit a little further information.
Finally, the noble Lord referred to the funding of the Belfast School of Music and also the one at Ballynahinch. I would agree that Ulster musicians have made and continue to make a very significant contribution to the music scene internationally. Perhaps I may study the noble Lord's comments on this question and write to him in due course. I am sure that he will accept that and we would be very grateful.
My noble friends Lord Brookeborough and Lord Moyola raised the central core theme to Northern Ireland politics at the moment. I refer to the agreement and the developments since 15th November. Perhaps I may say to all noble Lords, and especially to my noble friends, that the Government have made it very clear that they will not be deterred from implementing the Anglo-Irish agreement. We believe that the agreement provides the best hope of ending the estrangement of nationalists from the public institutions of Northern Ireland. We also hope that it will enhance cross-border co-operation against terrorism. But it offers hope to Unionists as well as to Nationalists. It reinforces the constitutional guarantee that the status of Northern Ireland as part of the United Kingdom cannot change unless the majority of the people in Northern Ireland so wish.
The Government are well aware, and nobody could fail to be aware, of the strength of feeling against aspects of the agreement in parts of the community. The people of Northern Ireland—I stress this and I am sure that my noble friend Lord Moyola will take it on board—can themselves, through their political leaders, reduce the scope of the activities of the conference by devising arrangements for a devolved administration. Matters which were devolved to an adminstration would no longer be for discussion in the inter-governmental conference. I believe that that is a very important point in the agreement.
We, and I am sure the huge majority of the people in Northern Ireland, really want to find a way out of this present impasse. I assure your Lordships that that objective can be achieved only through constructive dialogue. That is why I am so grateful for the thoughts and the comments of my noble friend Lord Moyola. I hope that the Unionist leaders will be able to take up the offer of discussion on the suggestions which were made at the meeting with my right honourable friend the Prime Minister on 25th February.
Perhaps I may remind your Lordships of what those suggestions were. The Prime Minister said then that she would welcome talks with the leaders of the Democratic Unionist Party and the Ulster Unionist Party about new arrangements for enabling Unionists to make their views known to the Government on affairs in Northern Ireland. My right honourable friend further went on to offer consultation with the Unionists on the future of the Northern Ireland Assembly and on the arrangements for handling Northern Ireland business in your Lordships' House
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and in another place. Further, my right honourable friend the Prime Minister agreed to consider positively a suggestion for a round-table conference to discuss devolution. That offer remains on the table. I am sure that my noble friend Lord Brookeborough will accept that; I hope that will be accepted in Northern Ireland. The Government believe that the way forward for the whole of Northern Ireland is through political dialogue and certainly not through violence, disruption and what, regrettably, too many of us saw on 3rd March. We were grateful for the points raised by my noble friends Lord Brookeborough and Lord Moyola.
The noble Lord, Lord Hylton, raised a number of points. He started with a reference to the position since 15th November. He all but took me back 15 years when my first speeches in your Lordships' House were on what I called the British position in Northern Ireland; but if the noble Lord wishes to go back and look in the Official Report for those days it might be interesting to see what I said then beside what I say now. I do not think they are vastly apart.
The noble Lord raised the question of integrated education. I hope he will accept that the position of the Government is quite clear on this matter. We shall support integrated education where there is clear local demand for it. He will accept that it could be counterproductive if that demand were to be generated at the central rather than at the local level. For that reason, we shall give general encouragement and support for the establishment of integrated schools, but we shall not be able to consider them for grant aid until they have proved their potential viability.
The noble Lord raised two points concerning Maghaberry prison and on the army's blockhouse on Derry's walls. I am not able to give the noble Lord a good reply this afternoon. I will write to him on those points, and I will take into account also the other point that he raised concerning the first wing of Maghaberry and the men in connection with Crumlin Road. I am not sure that I can write to the noble Lord about the clan Doherty. Doubtless the reunion in the maiden city will be one of the events that will come to my notice next summer or perhaps in the early spring.
The noble Lord mentioned also the two-year youth training programme. The Northern Ireland programme has always offered two years' training since it was introduced in 1982. However, in line with the rest of the United Kingdom, Northern Ireland has guaranteed a YTP place to 16 year-olds who would otherwise have been unemployed. Since 1982, there always has been an offer of two years' training.
As far as the two-year ACE scheme is concerned, the noble Lord will be aware that its object is to provide temporary employment for the long-term unemployed. He will bear in mind the large numbers of people in that category in Northern Ireland who number in the region of 60,000. We consider that an extension of the period of ACE beyond one year would reduce the numbers of those who could benefit from that provision.
Finally, the noble Lord asked about the facilities that are provided by voluntary and community organisations in Belfast. I cross my fingers and I pray that some solution will be found. I stress again that which I said earlier this week: there is to be a meeting of the Belfast City Council on 27th March to consider

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that point. We must hope that some acceptable solution and reassurance will be found. We cannot give the reassurance sought by the noble Lord this afternoon, but we consider it regrettable that the actions taken by the Belfast City Council have created those problems and the fears that have been so eloquently expressed by the noble Lord. I repeat, we are unable to give any reassurance but I hope that we may see some developments after the meeting on 27th March.
I am conscious that I have tried to answer as many questions as I can. I shall take up any points that I have missed and will write to those of your Lordships to whom I have promised to write. With that, I commend the order that is before the House.
On Question, Motion agreed to.

Human Rights and Fundamental Freedoms Bill [H.L.]
6.2 p.m.
Lord Broxbourne: My Lords, I beg to move that the House do resolve itself into Committee on this Bill.
Moved, That the House do resolve itself into Committee.—(Lord Broxbourne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AIREDALE in the Chair.]
Clause 1 [Short title and interpretation]:
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No. 1:
Page 1, line 20, at end insert—
(" "infringement" means an act which by virtue of proceedings under the Convention has been held by the Court of Human Rights established thereunder to be an infringement of any of the fundamental rights and freedoms and "infringe" shall be construed accordingly;").
The noble and learned Lord said: I wish to begin by making two points absolutely clear. First, although I speak from this Dispatch Box, this amendment is put down in a personal and not in a representative capacity. Secondly, although the noble Lord, Lord Broxbourne, and others, might take the view, on reading the amendment, that it is a purely wrecking amendment—indeed, it would be if effect were given to it—such is not my intention. My intention is to enable some discussion to take place about other possible ways of giving effect to the desire of the noble Lord, which I strongly share, that there should be some way of enabling the citizen to raise within this country breaches of the convention.
The noble Lord's method is by giving the citizen the right of action in the courts or in tribunals, as I understand his third schedule. However, there are other ways, and it may be that those other ways will be thought to be both better and more acceptable to opinion generally.
By way of preparation for what I am about to say, I remind the Committee of the discussion paper that was published nearly 10 years ago on this very subject, and of the foreword that was written by the then Home Secretary, Mr. Roy Jenkins, in which he stated:
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"There has recently been growing public debate about the adequacy of existing safeguards for fundamental human rights and freedoms. The Government welcomes and shares the interest expressed in this important question. Last year we set up a working group, representing the various Departments concerned, to study the implications of any new legislation on the subject. Their report provides a useful summary and analysis of the issues raised by any attempt to frame general legislation for the protection of human rights—issues not only regarding the scope and extent of the rights to be protected, but also affecting the functions and relationship of parliament and the courts. As a means of illustrating these general issues in more concrete form, the working group examined in some detail the likely consequences of incorporating the European Convention on Human Rights into our domestic law, but their report makes it clear"—
and these words I emphasise—
"that there are other possible approaches which should also be considered".
One of the possible approaches was to enable complaint to be made to a commission for human rights. That was a view that I personally welcomed because something over 15 years ago, as a private Member of another place, I myself introduced the Protection of Human Rights Bill, the purpose of which was to give that very remedy; to enable the citizen to make complaint to a commission for human rights that would operate very much in the way that the Parliamentary Commissioner and, since he was established, other commissioners in other bodies, have operated—so that Parliament, although not obliged to follow the findings and recommendations of such a commission or commissioner would, in the normal way, do so.
That Bill was never discussed in this House because, unhappily, after my own opening speech and half a speech by my right honourable friend Mr. Peter Archer, in support of it, the House was counted out. I always like to think that that was because there was so little opposition to the Bill that the vast majority of Members did not consider it worthwhile to attend. I do not believe that the noble Lord, Lord Broxbourne, was present on that occasion. If he had been, we should have benefited not only from his words of wisdom but also from the number one, which would have enabled the debate to continue—because it was only by one that we did not secure an adequate number.
At any rate, it is not my purpose to resume that debate 15 years later in your Lordships' House. I mention it partly in the hope of thereby establishing my own bona fides in relation to this subject, if that be necessary, because I have for a very long time felt that we should improve our methods of making remedies available in cases of breaches of human rights. It is totally unsatisfactory that a British citizen, or one indemnified by what may be done in breach of our obligations under the convention in this country, should be unable to raise the matter here unless it is covered by legislation and should be compelled to wash the dirty linen in Strasbourg. That is the effect of the present situation.
The noble Lord's Bill seeks to remedy the matter, as I said, by giving a right to remedy in the United Kingdom courts. I think the noble Lord will probably agree that there are difficulties about that method. In principle the major difficulty about that method is that the convention was certainly not drafted by the founding fathers, having in mind that it would be introduced lock, stock and barrel into the English

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common law system—our statutory system—and that it would be subjected to the methods of interpretation of statutes which are used in this country. Indeed, had that been the intention, no doubt steps would have been taken by successive governments to accomplish that at a very much earlier date than now. Because the difficulties of doing that were realised, that has never been done.
One can perhaps illustrate the difficulty by reference to some of the articles, and particularly the exceptions to some of the rules which the convention lays down. A very large part of the convention is already part of United Kingdom law as a result of statutes which deal specifically with the subjects concerned; for example, equality between the sexes, race relations, and so on. Our own statutes deal with those matters. But there are a great many exceptions to certain fundamental rights which the convention allows. One can take as an example Article 9 which relates to the right to freedom of thought, conscience and religion, and Article 10 on the right to freedom of expression. Article 11 refers to the right of freedom of peaceful assembly and association with others. All are very much part of the same general concept. One finds the exceptions include that they are subject to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or the protection of the rights and freedoms of others.
I do not for one moment suggest that our judiciary is incapable of deciding what is in the best interests of society and in the interests of those various headings, wide as some of them are, particularly the term "morals". What I suggest is that it has not been the tradition of our courts to do so, that many of these matters are very much questions of political judgment and that our courts have traditionally eschewed making political judgments, certainly based on extremely wide-ranging and uncertain provisions.
My personal difficulty about the noble Lord's method of dealing with this matter is not so much that I take the view that the courts would be unable to find answers, but that in finding answers they would be entering into what is for them a new field, and as a result of that would be subjected to a great deal of criticism which I wish to avoid. Because of that criticism, particularly on delicate matters of judgment of this kind, the independence of the judiciary might well be eroded and certainly attacked. That is the main problem that I see about the proposals made by the noble Lord.
6.15 p.m.
There is a subsidiary problem which is perhaps technical but nevertheless has some importance. It is one to which I referred when I was privileged to give the Macdermot lecture at Queen's University many years ago. It is a peculiar situation and I stand to be corrected if my reading of the convention is wrong. My understanding is that if the noble Lord's Bill is enacted in the way that it is drafted—indeed, in any other way as I do not think this can be circumvented without an amendment to the treaty—then a citizen could place his complaint before the courts and appeal right to the House of Lords. If he is dissatisfied he could then petition the European Commission at Strasbourg. On
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the other hand, if the decision of the House of Lords went against the Government there would be no means by which the Government could take the matter to Strasbourg. That is a most odd situation. I gave it much thought at the time and I could see no way out of it other than an amendment of the treaty. It would certainly be a very unbalancing factor. However, that is very much a subsidiary point.
It is in the light of those difficulties that I hope the Committee will give some consideration to the fact that there are the alternatives to which Mr. Jenkins referred, and particularly the possibility to which I referred and sought to bring into effect in the Bill that I promoted in the Commons; that is, enabling a citizen to make his complaint to a human rights commission which would examine the matter with every possible thoroughness against the background of the convention and then make a recommendation and give a decision of its own, not having the force of law.
As I think I said earlier, I cannot recall an occasion when a complaint to the Parliamentary Commissioner, which the Parliamentary Commissioner has held to be well-founded, has not, in practice, given rise to compensation and perhaps to a change in the law, where that is necessary, on the part of the Government of the day. Therefore, although there would not be the force of law which the noble Lord's Bill provides for, in the judgment of the courts there would be something so very near it that there would be very little lost, so far as I can see.
I do not suggest that that is the only alternative. There are other options and the fact that there are ought not to be lost sight of during the Committee stage of the Bill. It is against that background that the effect of my amendment, if accepted, would be to enable the courts to deal only with matters which have already been adjudged by the European Court of Human Rights. I am not sure whether that ought anyhow to be inserted into the Bill of the noble Lord. He will have to think about that, because I am not sure whether the Bill as it stands requires effect to be given to those judgments. That is a matter for him to consider. However, it would not enable the citizen to make complaints to courts before that stage had been reached.
Having said that, I hope I have said enough to make clear that it is not my intention to wreck this Bill. I want to hear what Members of the Committee say about this matter, because it is a very important issue. Certainly it is my intention, when the debate on this amendment is concluded, to ask leave to withdraw my amendment.
Lord Campbell of Alloway: I share the view expressed by the noble and learned Lord, Lord Silkin, that there should be some means of providing a remedy in our courts. I also share his view that there should be some improvement in our methods and that we should avoid the laundry exercise at Strasbourg. I further agree with him that there are many alternatives.
The amendment itself does not propose a Parliamentary Commissioner, but suffice it to say that it has been mentioned as an alternative. It is certainly worthy of consideration. I agree with my noble and

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learned friend. In this difficult exercise I think one has to start on common ground and I agree that the introduction of the convention, lock, stock and barrel into our law, is simply not feasible, for the reasons given at Second Reading, and that much of the convention at any event is part of our law.
Though the noble and learned Lord says that this is a vehicle for alternatives, and it certainly has served that very useful purpose, if the amendment were to be accepted it leaves the Bill open to the main objections taken on Second Reading and to some of the objections to which the noble and learned Lord, Lord Silkin, referred. First of all, it would leave a Bill, with his amendment, with entrenchment by derogation from the sovereignty of Parliament. Secondly, it would still stand, with his amendment, as a form of new constitutional settlement dressed up as a sort of Bill of Rights. Also, if you accept the amendment into the Bill as it stands, it would still leave delay, confusion and want of predictability in our law as administered in courts and tribunals, which would clog the system and render it unworkable.
In fact, this amendment introduces these words into the definition clause, Clause 1(2), and this means no more and no less than that under Clause 3(1) there would be no remedy in our courts unless our courts decided that the European Court of Human Rights had already delivered a judgment which covered the issue in question. This would lead to lengthy and detailed submissions in our courts as to whether a previous decision of the European Court of Human Rights was or was not distinguishable, and that is not a satisfactory situation, as all the decisions of the Court of Human Rights are related to the facts of the case.
Indeed, if this amendment were accepted in anything like its present form, there would be few cases in which it would be totally plain that it has been held (those are the words of the amendment) that the act in question constituted an infringement. If we are to have any remedy at all in our courts, it should be available without artificial and academic rigidity. The jurisprudence of the court and the Commission ought to be interpreted by our courts as being applicable to the question at issue with the ultimate degree of flexibility, and above all the remedy should be available without the wholesale entrenchment provisions as proposed by this Bill, which, as I read it, the amendment in no way seeks to excise.
For those reasons, I oppose the amendment, though I am grateful to the noble and learned Lord for introducing a vehicle for the discussion of alternatives.
Lord Denning: I hope that Members of the Committee will not accept this amendment, which is contained simply in the definitition clause. I have looked for the place where the word "infringes" comes into the body of the Bill, and it comes into Clause 3(1):
"no person shall do any act … which infringes any of the fundamental rights"
If one puts in this definition then a decision must be obtained from the court at Strasbourg before one can start applying it at all. That is quite impracticable. It would take too long, and so far as I know there is no machinery for doing it in a hypothetical case. I hope that the Committee will not accept this amendment.
Lord Scarman: I also hope that the Committee will not accept this amendment, for the reasons which have been given very effectively by the two noble and learned Lords who have preceded me. It was entertaining to listen to the observations of the noble and learned Lord, Lord Silkin, in proposing this amendment. Very wisely, I think, he refrained from explaining the implications of the actual amendment for this Bill. He used the opportunity to enlighten us with what I thought were some very interesting observations about the possibility of a Parliamentary Commissioner for Human Rights and about other ways of enforcing the European Convention.
None of that helps us to understand whether this amendment can stand in this Bill; and it cannot. Indeed, there may possibly be the extraordinary result that, the court at Strasbourg having ruled that such-and-such is an infringement, someone—presumably the victim—who has fought his way to Strasbourg (and it takes a very long time to get there) in order to get that sort of ruling, is then supposed to come back here and begin proceedings in our courts, where he will have the happiness of telling our courts that they have to treat this matter as an infringement because Strasbourg has already done so. There is nothing in this Bill which is as revolutionary or as protracted as that. I think we have had an interesting discussion but I cannot see that this amendment can possibly assist toward a clearer or more coherent Bill
Viscount Davidson: Perhaps it will be helpful to the Committee if I intervene very briefly at this stage and say a few words about the Government's general attitude to this Bill.
As the Committee will know, the Government usually adopt a neutral position during the passage of Private Bills through the House. But as my noble friend Lord Glenarthur explained at Second Reading, the Government cannot support this particular measure. Therefore, I have to say to the Committee that though I may be making certain comments that I hope are helpful as to the value or otherwise of particular amendments, in no sense should this be construed as a change of mind on the part of the Government. The Government remain firm in their opposition to the aims of the Bill, as my noble friend Lord Glenarthur expressed so clearly at Second Reading. In passing, I should like to say that my noble friend very much regrets that he is unable to be present in the Committee tonight.
So far as this amendment goes, its effect would be that, as now, it would be for the court in Strasbourg first to decide whether an act had infringed the rights and freedoms guaranteed by the convention and only then could the matter be the subject of a decision of the United Kingdom courts. It is hard to see, under the terms of this amendment, any meaningful role for the United Kingdom courts, since they would apparently simply rubber-stamp the Strasbourg decision.
In practice, therefore, the amendment would appear to remove discretion from courts in the United Kingdom to interpret the provisions of the convention even though those provisions had been incorporated into United Kingdom statute law. This would be a curious result, and it is difficult to see what merits there would be in incorporating the convention in such circumstances.
6.30 p.m.
Lord Broxbourne: The noble and learned Lord, Lord Silkin, has moved his amendment with his customary clarity, cogency and charm. Having made that initial conciliatory and, I hope, agreeable and acceptable tribute, it will come as no surprise to the Committee, and certainly not to the noble and learned Lord, when I next say that unfortunately I cannot extend to the content of the amendment the approbation which I extend to the style of its presentation.
The main argument with which the noble and learned Lord appeared to seek to commend this amendment to the Committee was that after all it does not mean what it says. That is a novel argument and, though as we know, the noble and learned Lord has great and distinguished experience in his forensic capacity, I do not think he would ever really have opened a case in the courts by saying, "Of course, your Lordships will appreciate that the strength of my case lies in the fact that it is not what it seems to be."
This amendment, although it nestles coyly in the interpretation clause, nevertheless goes to the very heart of the matter, for reasons that have already appeared in the speeches of your Lordships. It does so, as the noble and learned Lord, Lord Denning, explained, because of its effect upon Clause 3(1) of the Bill, which prohibits acts which infringe any of the fundamental rights and freedoms. If the amendment were carried, it would mean that the remedy in the United Kingdom for infringement would be limited to cases where the act in question was subject to an express decision of the Court of Human Rights in Strasbourg. That is a very artificial concept and would undermine the purpose of the Bill, as explained in the Long Title, in giving British judges a role in the interpretation of the convention and its rights and freedoms. It would reduce our judges, in effect, to the position of registrars, simply dealing with the judgments already arrived at in Strasbourg.
It would also, as my noble friend Lord Campbell of Alloway pointed out, impose delays and complexities in what is designed to be a simplification procedure. One can well imagine the lengthy and semantic submissions of ingenious counsel in seeking to distinguish decisions in the Strasbourg courts from decisions in the instant case before the British courts.
The noble and learned Lord has not found much support in your Lordships' Committee for this amendment and indeed it must be contrasted with Amendment No. 7 in the name of the noble and learned Lord, Lord Denning, which would deny to the European Court any role at all, and which specifically states that British courts should not be bound by the interpretations of the European Court.
So I find myself, the promoter of this Bill, in a very comforting position, occupying the middle ground between these two extreme positions of the noble and learned Lords. Perhaps the noble and learned Lord, Lord Silkin, and the noble and learned Lord, Lord Denning, could come to some sort of arrangement. They might, for example, in the language of that other House of which Lord Silkin was for long so great an ornament, arrange a pair or perhaps, more appropriately to this legal concept, they might appoint an
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arbitrator, or conceivably what Continental lawyers know as an "aimable compositeur". I would, without fee, be willing to volunteer to act as such an arbitrator, but when I look at the Cross-Benches and see the wealth of talent there, I see others who would fill this role more acceptably: the noble and learned Lord, Lord Scarman, or the noble and learned Lord, Lord Templeman, whom it is so good to see here today.
But I hope it will not be necessary to have recourse to these matters. I hope and understand it to be the case that the noble and learned Lord will not press this amendment, though we have all, of course, listened with great interest, attention and respect to what he has to say. It has given us food for thought which will help us in the processes through the Committee.
I should not perhaps resume my seat without one very brief comment upon the—not strictly relevant, if I may respectfully say so, to the content of the amendment—contribution from my noble friend on the Front Bench. I should not like it to be thought because of my silence on such a matter that I accept the propriety of what he said. I am sorry that the Government should have jumped so quickly to a hostile position in regard to this Bill. Indeed, the enthusiasm of the Front Bench opposite, as I understand it, is also, in the classic phrase, restrained within the bounds of decorum. I take comfort from the fact that we have who have been in politics and in Parliament for some time realise that when you have a measure which does not commend itself to either Front Bench, it must have very considerable merit indeed. So perhaps my noble friend will be good enough to take that message back to his colleagues in whichever House they may serve.
We shall now await the decision of the noble and learned Lord whose speech we have so much enjoyed.
Lord Silkin of Dulwich: I am grateful to those noble Lords who have taken part in this discussion. To quite a large extent they have perfectly properly, and not unexpectedly, regarded this amendment as an Aunt Sally. I do not object to that at all because I think that putting forward the amendment has helped a great deal in finding what common ground there is. I was particularly gratified by the opening words of the speech of the noble Lord, Lord Campbell of Alloway, in which he set out very clearly the areas where he and I find ourselves in agreement. No doubt there will be other noble Lords who echo what he has said. I think it has probably also been of value in disclosing clearly at a very early stage the position of the Government through the remarks of the noble Viscount, so that future amendments will no doubt be viewed against the background of the policy which the Government have announced.
I should not like it to be thought from what the noble Lord, Lord Broxbourne, said that the Front Benches are ad idem in the sense that both have a clear and fixed policy. The Government evidently have. As far as the Opposition are concerned, I do not think that we have got much further, if at all, than the discussion paper to which I referred, which is now 10 years old. Since that time, we have lost office. I have been greatly helped by what has been said. I indicated in my opening remarks that it was not my intention to press the amendment but merely to open up discussion.

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That discussion has taken place. I beg leave to withdraw the amendment.
Lord Harmar-Nicholls: Before the noble Lord in the Chair puts the withdrawal to the Committee we should, I believe, cheer up my noble friend a little. I should have thought at this early stage of the Committee proceedings that government neutrality does not necessarily mean government hostility to the Bill as a whole during its passage. At any rate, I hope that they will listen.
Viscount Davidson: To reply to my noble friend, I was reminding the Committee of what my noble friend Lord Glenarthur said on Second Reading.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Convention rights and freedoms to have force of law]:
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 2:
Page 2, line 13, leave out ("have the force of law in the United Kingdom") and insert ("be taken into account only in proceedings for judicial review and in any appellate proceedings arising therefrom and subject to the provisions of this Act.").
The noble Lord said: In moving the amendment, I wish, by leave of the Committee, to speak to Amendments Nos. 3 to 6 and 10 and 11 that also stand in my name, all of which are related and consequential. If my Amendment No. 2 was accepted on a Division, my noble friend Lord Broxbourne agrees, subject, of course, to the wish of the Committee, that Amendments Nos. 3 to 6 and 10 and 11 be moved formally. Per contra, if my Amendment No. 2 is negatived on a Division, I shall not move Amendments Nos. 3 to 6 and 10 and 11. Further, when we come to the Question, Whether Clause 2 shall stand part of the Bill—the very kernel of the Bill—I shall oppose it formally, without repeating anything that I have said in my speech on this amendment. If that is convenient to the Committee, it will save a great deal of time.
This is not at all an Aunt Sally. It is a vehicle for an alternative, yes, but an alternative that it proposes. At Second Reading, it was all too plain that the Bill was not acceptable to noble Lords on all sides of the House. Notwithstanding the intervention of my noble friend Lord Harmar-Nicholls—I do not see my noble friend in his place—it was made plain at that time what the attitude of the Government was. And it has been made perfectly plain what is the attitude of the Government today. It is, I would suggest to your Lordships, thoroughly laudable that we should all know where we stand.
I, for one, am grateful—I can only speak personally—to know the attitude of the Government, in particular when they are hostile. It is rather like having an indication from a judge who is against you. It is very helpful. You cannot deal with a situation if the judge does not indicate. I am therefore very grateful. I wish to have it recorded that I am grateful to my noble friend the Minister for having, so to speak, come clean on this issue, so that we know where we stand.
6.45 p.m.
It was not only the attitude of the Government but the attitude of your Lordships on all sides of the House on Second Reading that the Bill, as it stood, was not acceptable. The question is whether there should be some effective remedy in our courts. Although that was canvassed at Second Reading, it was not fully discussed. As to whether there should be an immediate, effective remedy in our courts, I am, on the ideological principle, 100 per cent. behind the noble and learned Lord, Lord Scarman, my noble friend Lord Broxbourne and also it appears, the noble and learned Lord, Lord Silkin, and, indeed, others who hold such a view. That there must be some remedy is common ground among all of us.
There was common ground at Second Reading. There is already some common ground today. But there is also this irreconcilable conflict as to the means of implementation. To digress for a moment, this is why it is so helpful that the Government have stated their view. The means of implementation proposed in the Bill are not acceptable to the Government. That does not mean that the alternatives, whatever they may be—I am speaking only to the amendment—will not be, and can never be, acceptable to the Government.
The set of amendments to which I am speaking proposes a limited remedy by extension and adaptation of the process of judicial review, our type of administrative court. I wish to make something plain in exchange for the Government's candour. If the amendment were accepted on a Division, any form of amendment introduced by the Government to produce a remedy in our courts on Report would assuredly be acceptable to me.
This is a difficult subject. I have done my own drafting without assistance. Obviously, there is scope for amendment and considerable scope for improvement. But the principle involved remains a remedy in our courts, our common ground. That is of great importance. It is of great importance to any government. There is no political bias whatever involved here. It is a question of orderly administration, consistent with avoidance of the horrors of wholesale entrenchment.
What is the justification for this? As your Lordships' Committee perhaps knows, since 1975 there have been a series of adverse rulings, 12 out of 14, against Her Majesty's Government. As a result, we have to carry inconsequential piecemeal amendments to our law. That is but one of the reasons for providing the remedy in the courts. It may be said by my noble friend the Minister that this is how we work and this is what happens when there are adverse decisions of the Court of Justice of the European Communities. But the two situations are wholly dissimilar.
A decision of the Court of Justice of the European Communities is based upon the concept of contravention of Community law that we have accepted by statute as having supranational effect. A decision of the European Court of Human Rights is based upon the absence of a remedy in our courts. It is a problem that arises under Article 50 of the convention—a convention that we have never accepted by statute as having supranational effect. In a

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sentence, as regards Community law, there is a remedy in the courts. As regards the convention, there is not. And there should be one.
These amendments ensure that the convention and its relevant jurisprudence shall be taken into account to provide this remedy in our courts without the wholesale incorporation by which the convention and its jurisprudence shall be made binding in our courts and tribunals throughout the land. The Select Committee found that there was no way in which this could be properly done: to make the convention binding by wholesale incorporation. One should defer to some degree to their findings upon that.
With regard to the method of implementation proposed—enlargement of the process of judicial review—in other countries a domestic remedy is available in their forms of administrative court. We have in strict parlance no administrative court, but some of the functions of administrative courts are discharged by judicial review. Since the end of the war the scope of the remedy of judicial review has been enlarged by a series of case law decisions and amendments to the rules of court. In its present form it is practically unrecognisable, because of its wide scope and enlargement, if one compares it with the old prerogative writ structure from which it evolved.
If we are to provide a remedy in the courts it would surely be appropriate to extend and adapt the scope of judicial review to meet this purpose. Amendments Nos. 2 and 3 to Clause 2, consequential Amendments Nos. 4 to 6 to Clause 3, Amendment No. 10 to Clause 8—the interim relief, and reference to Crown proceedings—are all intended and designed to adapt and extend the process of judicial review to provide this remedy. In this the judges are wholly competent and wholly to be trusted to discharge such functions. If it were the wish of Parliament that they should discharge such functions it cannot be imagined that they would be unwilling to do so.
It may take a little time to work out the machinery for implementation. In that, my amendment is consciously defective. The reason for that is that there would have to be full consultations, at all events with the Lord Chancellor and the noble and learned Lord, Lord Lane, the Lord Chief Justice, and no doubt many of the Law Lords. Consultation would be vital in order to get the machinery right; and draft amendments to the rules of the Supreme Court would have to be prepared. Amendment No. 3, in subsection (4), deals with that.
As proposed, these amendments would have to be laid before the Houses of Parliament for approval. It would be quite impracticable to give effect to these amendments until the appropriate rules of procedure had been approved after detailed consultation—hence the need for Amendment No. 11, the new clause after Clause 9. That is the structure. Those are the reasons in support of the amendment. As there is a stark, irreconcilable conflict between this set of amendments and the Bill as it stands, and as it appeared on Second Reading that there was opposition to the Bill on all sides of the House—
Lord Broxbourne: And support.
Lord Campbell of Alloway: No. Do you wish to intervene?
Lord McGregor of Durris: Before the noble Lord sits down.
Lord Campbell of Alloway: I have not. May 1 start this final speech again?
Lord Broxbourne: My noble friend courteously asked whether I wanted to intervene. All I wish to say is that no doubt there was opposition expressed on all sides to the Bill. There was also support expressed on all sides. Indeed, I think that it goes a little further than that, because there was support from the episcopal Bench; and I do not think that there was any opposition from that Bench.
Lord McGregor of Durris: It was also stated in terms from these Benches that the Alliance supports the Bill. There are no grounds for saying that opposition is shared by all parts of the Committee.
Lord Campbell of Alloway: Subject to correction, it is perfectly right that there was opposition, as I understood it, from all quarters. As I also understand it, there is no Whip on any party on this Bill. Everyone is speaking free of a Whip. I may be wrong; that is how I understand the position. My understanding of the situation was that there was opposition from all sides of the Chamber to this Bill. There was also support from certain quarters for this Bill.
If I had been given the chance to continue, I do not think that there would have been cause for complaint. In those circumstances, as at present advised, it would be appropriate, particularly in view of the intervention of the noble Lord from the Cross-Benches, to seek the opinion of the Committee on this amendment before we reach the Question as to whether Clause 2 shall stand part. I was seeking to be frank with the Committee and to say that, as at present advised, that was my intention because there is a division of opinion.
The question is whether we should have the benefits of some remedy by way of judicial review without the burdens of wholesale entrenchment, as certain Members of the Committee would wish. I beg to move.
Lord Denning: I have every sympathy with the amendment that is proposed by my noble friend Lord Campbell of Alloway. However, I am afraid it would wreck the Bill if it were carried. It goes completely against the principle which I gather was supported at Second Reading that the convention on fundamental rights and freedoms shall have the force of law in the United Kingdom. That is what all the supporters of human rights have said from the beginning: let us have something in our law to make human rights have the force of law. That is the fundamental object of this Bill.
Perhaps I may go back to the original words of the convention signed by us in 1950 or 1952. It said:
"The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section 1 of this Convention."

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Article 13 says:
"Everyone whose rights and freedoms as set forth in this Convention are violated shall have an effective remedy before"
our national courts. Those are the very words of the convention which the then Government signed. I am afraid that if this amendment is carried, there would be no effective remedy at all for any violation of any of the rights. One only has to look at the words; they are simply that the courts shall take it into account.
7 p.m.
I am afraid that from my point of view, having sat in the Court of Appeal (I am not sure whether my noble and learned friend Lord Scarman was with me) on many occasions we have said that we would look at the convention and take it into account when we come to our decision, but that we will not give it the force of law. This amendment is simply doing what we have said many times in the Court of Appeal: that the court takes it into account but does not give effect to it. Therefore, this amendment goes no further than the courts have done. We have always allowed remedy by judicial review for anything that went wrong. In a way the amendment does nothing more effective than we have already done, and it would really torpedo the case of the promoters of this Bill.
Lord Scarman: I have frequently sat on the left flank of my noble and learned friend Lord Denning in the Court of Appeal, and I have as frequently agreed with him as I have disagreed with him. On this occasion I agree completely. The amendment denies the primary purpose of the Bill for the reasons that my noble and learned friend has given, and I shall not go over them.
However, there is a further weakness in the amendment, a legal weakness, upon which my noble and learned friend touched and which I shall amplify a little. The clause as it stands is quite clear. The fundamental rights and freedoms set out in the schedule shall have the force of law in the United Kingdom. They become by law, rights and freedoms in the United Kingdom.
What happens in relation to the amendment of the noble Lord, Lord Campbell of Alloway? They become matters that can be taken into account in proceedings for judicial review. The European convention has been taken into account by the Court of Appeal and the House of Lords in proceedings for judicial review and otherwise for a very long time. In fact, what is happening is that these which were, by Clause 2, rights and freedoms having the force of law, become matters which may be taken into account; they are no longer legal rights protected by law, but matters which, in discretionary proceedings known as judicial review, can be taken into account by the judge if he thinks fit.
Not only is that a denial of the whole purpose of the Bill, but if this amendment is allowed to stand and the only proceedings in which the European convention rights and freedoms could be taken into account were discretionary ones I very much doubt whether it would ever be possible to persuade the court at Strasbourg or elsewhere that such a provision in itself provided an efficient remedy in the United Kingdom. Discretionary: no longer rights or freedoms, but matters to be taken into account. Of course matters can be taken into account and not given effect to. The
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whole point of a Bill of Rights is that the individual has certain rights and certain freedoms which the courts are bound to enforce if he proves a violation.
I am sorry to say that the whole of this amendment is misconceived. I say that because I fundamentally agree with the noble Lord, Lord Campbell of Alloway, when he moved this amendment and said that there must be some remedy in our courts. This was his preferred choice. I hope, not too discourteously, that I have indicated shortly, following my noble and learned friend Lord Denning, that this remedy, if it be the only remedy—and it is under the amendment—is not enough. It is not enough to meet the requirements of either Article 1 or Article 13 of the convention. It is not enough to give the citizen any rights. It merely gives him a legitimate expectation that, if he goes to a judge on application asking for leave to bring proceedings, he may get it. I say to the Committee that that is not good enough.
Lord Meston: Perhaps I may also respectfully urge noble Lords to reject this amendment. If the United Kingdom is to incorporate the convention, it should incorporate the relevant articles in full, and that as I understand it is what this Bill intends. In appropriate cases, with, if necessary, appropriate safeguards, the courts at all levels and in all types of proceedings should be able to have regard to and give effect to, the convention. The courts should be able to consider alleged breaches of the convention and provide remedies where deserved.
This amendment and the earlier one of the noble Lord, Lord Silkin, moved us from the theory to the practice of incorporation of this convention. In particular the noble and learned Lord, Lord Silkin, raised the serious question, as does this amendment, of how the provisions of this Bill would work in practice. As I read Clause 3 of the Bill—and I hope that the noble Lord, Lord Broxbourne, will correct me if I am wrong on this—it creates a form of statutory tort. The question is therefore where and how can that be litigated; should it be in some separate tribunal—as is now the case in race relations law and industrial relations law—perhaps with a collateral commission like the Commission for Racial Equality or even ACAS? If so, I suspect that the manpower implications in the Explanatory Memorandum to the Bill would need to be revised. Alternatively, as I read Schedule 3 to the Bill, can the convention be raised by and in ordinary litigation, with of course necessary safeguards to weed out unmeritorious cases? I suggest that it should be possible to raise the convention in any court or tribunal.
As several noble Lords have pointed out, in effect this amendment is a wrecking amendment because it seeks to emasculate the Bill. It would mean that any point touching on the convention could not be raised in ordinary first instance procedings, and further it would mean that in ordinary proceedings the convention would have to be disregarded. Under this amendment, there must be separate proceedings for judicial review, and in those separate proceedings it is only necessary, as the noble and learned Lord, Lord Denning, pointed out, to have regard to the convention.
The provision of a separate procedure for judicial review would obviously create duplication and delay,

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often at public expense, and it would be little better than the existing long-range, time-consuming litigation in the European tribunals. The procedure of judicial review, notwithstanding its enlargement in recent years, is at present primarily geared to questions of administrative law. It is usually concerned with how administrative decisions are reached, and not with the merits of the decisions themselves. The convention is much wider. It touches on criminal law and family law, and in such areas people should be entitled to raise the convention in ordinary litigation. Even an enlarged version of judical review is not enough. To accept this amendment would be to put the provisions of the convention on a procedural back-burner. I ask noble Lords not to accept the amendment.
Lord Templeman: I also oppose these amendments but for a slightly different reason. As I understand the noble Lord, Lord Campbell of Alloway, he is not trying to wreck the Bill. He agrees, as I understand it, that there should be some machinery in our law for enforcing the convention. What he now proposes is that it should be done by way of judicial review. Judicial review is carried out by two judges of the divisional court of the Queen's Bench Division. What this amendment says is that none of Her Majesty's judges shall have jurisdiction to hear the convention except two judges of the Queen's Bench Division, subject to an appeal to the Court of Appeal and then to the House of Lords.
That really is a curate's egg. Either none of the judges should be able to do anything about the convention and we should leave the law as it stands, or, if the convention becomes part of the law of this country, then, of course, all the judges may take cognisance of it. But to take out and to segregate the judges of the Queen's Bench Division exercising their judicial review function is neither one thing nor the other.
Lord Hylton: I hope that this amendment will not be accepted. At Second Reading I mentioned the special case of Northern Ireland, from which have come, incidentally, many of the appeals which have eventually gone to the European Court. Northern Ireland is a very divided society, and even more so than this country, but the one thing on which nearly all the political parties are agreed is the need for a Bill of rights. If this amendment were accepted, we should not have a Bill of rights.
Lord Broxbourne: Where such authoritative contributions have been made to this discussion by the noble and learned Lords, Lord Denning, Lord Scarman and Lord Templeman, all in agreement, all showing that this amendment is not acceptable, it is perhaps an act of supererogation for me to say anything further on the matter. I make a few observations only out of courtesy to the Committee and to my noble friend who moved the amendment.
As the noble and learned Lord, Lord Scarman, said, this is not a question of whether judicial review as such is a good thing. It is limited in its application, as the noble and learned Lord, Lord Templeman, has so clearly shown just now, but certainly the Bill is not intended to exclude its consideration in the processes of judicial review in those proceedings defined by
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Section 31 of the Supreme Court Act 1981. As the noble and learned Lord, Lord Templeman, said it should be comprehensive, and that is what it is sought to be made in this Bill.
What is not acceptable is that there should be a monopoly, an exclusive right, restricted to the judicial review procedure, and I should submit that the onus must be on those who so suggest, and a heavy onus it is. It is true that there is no express obligation on the contracting states to incorporate the convention into their domestic law, but the European Court of Human Rights has said that by doing so a state ensure that the intention of the convention is "faithfully reflected in its law". That, I should think, is a clear hint as to the propriety and desirability of such a course.
Other countries have taken the hint. They have incorporated the rights and freedoms of the convention into their national law by means suited to their own constitutional position and without the restriction of qualification such as is here proposed. The convention has now been incorporated by all the member states of the EC except ourselves, Ireland and Denmark. In Austria, Belgium, Cyprus, Germany, France, Greece, Italy, Luxembourg, The Netherlands and Switzerland the convention forms part of the internal domestic law. Indeed, in the Federal Republic of Germany the legislature approved it by statute which expressly gave the convention the status of federal law.
7.15 p.m.
There are many precedents for incorporation in the way suited to particular countries, and there seems to be no good reason why we should be the odd man out. Article 26 of the convention prescribes as a condition precedent to recourse to the commission that all domestic remedies have been exhausted. Does not this sensible provision suggest and require for its efficacy that all domestic remedies should be as clear and as comprehensive as possible?
That is what the Bill is designed to do, and that is what the amendment would prevent it from doing. Indeed, the amendment would exclude proceedings in the lower courts, all closely concerned with the lives of ordinary citizens, with the wrongs they suffer and the rights that should be theirs, are theirs internationally under the convention and would be theirs in our courts under the provisions of this Bill.
This is a wrecking amendment, as it has been described. Whether it is by intention or inadvertence does not really matter very much. After all people are presumed to intend the natural consequences of their acts, and the natural consequence of this, as the noble and learned Lord, Lord Denning, made so clear is to undermine the purpose of the Bill and erode its effect. I hope that my noble friend will, twixt the stirrup and the ground, follow the good example of the noble and learned Lord, Lord Silkin, and not press his amendment. If he does so, I hope that the Committee will reject it.
Lord Campbell of Alloway: I am grateful to all noble Lords who have spoken in this debate. Assuredly the object of this amendment is to reduce the incidence of this Bill so as to avoid the unwelcome consequences

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which require no repetition, while at the same time creating some remedy within the concept of Article 50—which, because there was no remedy in our courts, was the basis of the string of those adverse decisions—and to do that without wholesale incorporation into our law of the creation (as this Bill seeks to create) of some new Bill of rights; a new constitutional settlement to which I am utterly opposed.
The noble and learned Lord, Lord Scarman, says that my proposed amendment is not good enough. Of course, he would say it is not good enough because he supports a Bill which proposes wholesale entrenchment, and so there always will be the unbridgeable gulf between the noble and learned Lord and myself.
It is clear that the alternative proposed by me is no more acceptable to your Lordships than the alternative proposed by the noble and learned Lord, Lord Silkin. In a thin Committee at this time of night it would be quite improper to divide your Lordships' Committee. But when it comes to the Question, Whether Clause 2 shall stand part of the Bill, those who, like myself, are utterly opposed to a new Bill of rights entrenched in our law may take such course as appears appropriate. In those circumstances, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Clause 2 agreed to.
Clause 3 [Liability for breach of fundamental rights and freedoms]:
[Amendments Nos. 4, 5 and 6 not moved.]
Lord Denning Lord Denning moved Amendment No. 7:
Page 2, line 28, at end insert—
("(4) This section shall be construed as covering any violation of the Convention or the Protocol by the United Kingdom or by any person within the jurisdiction of the United Kingdom, and as giving a domestic remedy for any such violation.
(5) Henceforward no-one shall petition the Secretary-General of the Council of Europe alleging any such violation; nor shall the European Commission of Human Rights, nor the European Court of Human Rights, have any jurisdiction to consider or deal with any such alleged violation.
(6) The interpretation of the Convention, the Protocol, or the Reservation, as set out in Schedules 1 and 2 to this Act, shall be for the Courts of the United Kingdom to decide; and the Courts shall not be bound by any interpretation given by the European Commission or the European Court.").
The noble and learned Lord said: I hope that the Committee will find this one rather intriguing because I have deliberately accepted everything: that the convention shall have the force of law in the United Kingdom and any violation of it is actionable in our courts. We have fulfilled completely our treaty obligations in those respects which I read out, Article 1 and Article 13. So, if there is any violation of these rights, go to our courts and get the remedy! Before I speak further, I should like to draw a distinction between this Convention on Human Rights and the Community law under the Treaty of Rome which is enforced by the European Court at Luxembourg.
The Treaty of Rome specified many provisions such as equal rights for equal pay and equal pay for equal work and so on; and by our own statute, the European
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Communities Act 1972, that treaty and all its provisions were made part of our law and so were the directives and the regulations under it which have been issued by Brussels. All that is part of our law and, by judicial decisions, it is clearly established that that Treaty of Rome has priority or supremacy over our individual laws. Furthermore, any one in our courts can go to the national courts and get a remedy for it. That is because that Treaty of Rome in every detail has been made part of our law.
This will be made part of our law, but what is to be done about it? What I object to is this. The treaty-making power of the Crown is part of the prerogative of the Crown but it is not absolute. As recent cases have shown, it is limited. I would suggest that the treaty-making power of the Crown does not extend to limiting the sovereignty of Parliament or to limiting the sovereignty of our courts over our English law. The other provisions of this convention which the Government have signed do limit the sovereignty of Parliament, do limit the sovereighty of our courts because—and many times it has happened—after a case has been decided, the individual says: "Oh! I am going off to the European Court of Human Rights". And off he goes! Even in a case decided by the House of Lords, the Sunday Times case, they go off to the European Court of Human Rights. And the House of Lords' decision was reversed by 11 to 9. That was a decision of our court, the highest court in our land.
And then there was the case of the three railwaymen who refused to join a trade union. Under our legislation, by statute, they had no right to claim for unfair dismissal. They took their case, if you please, to the European Court of Human Rights and then they found that our statute, passed by a Labour Government, it may be, violated human rights. So, in effect, they overuled our statute and we had to make another statute. I could go on with case after case which we have had on different articles. There was the one a little while ago, a most interesting one, about the children and the schools and corporal punishment. Corporal punishment by a master was quite lawful under our laws as long as it was reasonable and the circumstances justified it; but, if you please, that state of our law was taken before the European Court of Human Rights and they said that it was unlawful if it was done without the parents' consent.
They relied on Article 2 of the protocol saying that the state must respect the rights of parents to ensure that such education and teaching was in conformity with their own religion and philosophical convictions. They extended that clause beyond question, so as to say that you could not beat a boy or cane a boy at school without the parents' consent. The English judge, Sir Vincent Evans, dissented. The court decided by six to one that it would be a violation of human rights to cane a boy without his parents' consent. The Committee may remember that the Government brought in a Bill to try to implement that decision of the European Court but your Lordships, I am glad to say, refused to do so.
There it is. I give those illustrations to show that at the moment a person can go from our courts or from Parliament—although it has to go through the Commission—straight to the Court of Human Rights, which can inquire into the matter to say whether our

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courts were right or our Parliament was right or whatever it may be; and can reverse our decision—not reverse it actually; but clearly the Government must implement those decisions afterwards.
This is my important point. If we incorporate this convention into our law, as this Bill will do, if we make any violation actionable in our courts, as this Bill will do, then there is no need whatever for anyone to chase off to the European Court of Human Rights or to the European Commission and say that they were wronged. It is an infringement of our sovereignty. Therefore, once we get this Bill of Rights, through and incorporated into the law, then I say for goodness' sake let us stop any further petitions to the European Court at Strasbourg. Let us do it on our own; let us not have those clauses which say it can be negatived—and that is No 4, which is there to negative any of our statutes or anything like that.
Let us not have our courts, as under Clause 6, bound by what they say at Strasbourg. In other words, once we get this Bill of Rights through and enforceable in our courts, let us have no more truck with the European Commission or the European Court as at Strasbourg. Let us manage our own affairs on our own. I beg to move.
Lord Silkin of Dulwich: I oppose this amendment very strongly and I do so for two reasons. The first is that I find it quite extraordinary that an amendment can be moved the purpose of which is to give effect to the Bill in making the convention part of the law of the United Kingdom while at the same time that same amendment is removing from the law of the United Kingdom a major part of that very convention. It is an inherent part of the convention to provide the remedies which are referred to in subsection (5) and to follow the procedures in subsection (6). One cannot possibly profess to be bringing the convention within our law while at the same time removing the remedies which it contains. That is the first point.
7.30 p.m.
The second point is a much more fundamental one. It is that, in my view at any rate, the major benefit to humanity achieved by the European convention—of which I think we were the originator, through Sir Winston Churchill, and to which we acceded and by which we have given the right of individual petition over many years through the agency of successive governments on both sides of this Chamber—is that it has enabled states to accept for the very first time in history that their own domestic law and the way they treat their own citizens should be subject to the general views of what is right throughout Europe as a whole. That was an immense leap forward. The noble and learned Lord, Lord Denning, wishes us now to take a leap back, and I for one would not accept it.
Lord Scarman: I have already reminded the Committee that I am accustomed to being on the left flank of the noble and learned Lord, Lord Denning, and the Committee has seen me in that position agreeing with him. The Committee will now see me in that position disagreeing with him, and disagreeing profoundly, for the reasons indicated by the noble and learned Lord, Lord Silkin.
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I wish just to develop those a little. There is no infringement of our sovereignty by any provision of this Bill other than perhaps Clause 4(2), about which we shall have a discussion later. There is no other infringement. Equally, there is nothing in this Bill which compels our courts, if the Bill is enacted, to accept as correct the decisions of the European Court of Human Rights in Strasbourg. There is no challenge in this Bill to the independence of our courts. I say it with great hesitation, but I have said something like it before in other contexts. The noble and learned Lord, Lord Denning, has not fully analysed the complex problem that arises when there is a treaty—and this European Convention would not be the only one—which is binding on the United Kingdom in international law and which has been incorporated for municipal law purposes into our domestic law.
Whatever is said in this Bill, the United Kingdom has ratified the European Convention. It is therefore under an international obligation—not of course enforceable in our courts—to secure all the rights and freedoms listed in the convention within the United Kingdom. If there is a difference of opinion arising between the European Court of Human Rights and, let us say, the House of Lords sitting in its judicial capacity, that does not mean that the House of Lords sitting in its judicial capacity has immediately to accept as correct a decision of the European Court of Human Rights. If the Government take the view that to persist with our municipal law as laid down by the House of Lords would involve them in a breach of their international obligations under the treaty, then their correct course is to introduce legislation overruling the House of Lords sitting judicially. That is the only way in which one could operate to make a decision of Strasbourg legally binding upon our courts.
Similarly, the convention gives to the United Kingdom, as a member state, the opportunity if it so wishes of giving its citizens a right of petition to the European Commision and giving the Commission jurisdiction to entertain that petition. The United Kingdom, to its great credit, has exercised that option and has done so ever since 1966. It did so again as recently as a few months ago when it renewed the right of petition for another five years. If this amendment became law, one would have the strange position of an Act of Parliament saying that no one shall petition the Secretary General of the Council of Europe alleging a violation—that would be the domestic law—the Government having already obliged themselves to allow such petitions. If the Government decided that that is what they should do and if they have done it, subsection (5) in this clause would itself implicate Her Majesty's Government in a breach of international obligations.
The same is true of subsection (6) of the amendment. This deals with the acceptance of the jurisdiction of the European Court of Human Rights to give the authoritative interpretation of the convention. Again, our Government have accepted, under Article 46, and have renewed their acceptance of the compulsory jurisdiction of the European Court of Human Rights. Again, what does that mean? It does not confer upon the European Court of Human Rights the power to give a decision which is immediately binding on our House of Lords, or indeed of any of our

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courts. All it means is this. The United Kingdom Government have accepted that if the European Court of Human Rights construes one of these rights or freedoms in a certain way and that way is not met by our municipal law either because there is a statute against it or because there is a decision of the House of Lords against it, all that means is that in order to comply with their international obligations under the convention, the United Kingdom Government will take steps (of course by legislation) to correct our law.
Therefore in a sense this amendment is Don Quixote having a happy time—and one always does have a happy time when one goes out with that warrior, the noble and learned Lord, Lord Denning—tilting at a windmill that does not exist and tilting in such a way that by inadvertence we shall be putting our Government in breach of their international obligations. I say with the respect and affection that I have and always will have for the whole of my days for that magnificent entertaining advocate, the noble and learned Lord, Lord Denning, that his amendment is a bag of delightful and comic nonsense.
Lord Harmar-Nicholls: The noble and learned Lords, Lord Scarman and Lord Denning, can continue their debate on the technicalities of the law and the words that should be used, and may the best man win. I wanted to come in because I believe that the amendment is vital and good and should be accepted. This amendment is not a windmill, as the noble and learned Lord, Lord Scarman, suggested it was. It is much more important than the technicalities of the law and the argument about what words should be used. The minute that the people of this country think that the United Kingdom courts are not supreme as regards matters that happen within the United Kingdom, then I believe that we risk weakening ordinary people's acceptance of Parliament with all its statutes. I believe that there is a risk of that happening.
For five years, I sat as a Member of the European Parliament. While the Treaty of Rome has nothing to do with this amendment, it gave one closer contact to the general reaction of how law, applying to this country, but applied by a court outside this country's boundaries, was being accepted. There is a reaction. I found that the acceptance by ordinary people of a decision from a European court was unpalatable, particularly on matters such as those outlined by the noble and learned Lord, Lord Denning; matters which were very human and day-to-day in their application. The fact is that the final word on getting justice from a court which does not reside inside this country's boundaries is not accepted deep down. The more that the people become aware of that, the more it will show itself in a form, more fundamental, such as not accepting laws at all. I believe that the message this amendment would give would go a long way towards removing some of these feelings that are begining to show themselves.
I found that many people who were very "pro", for example, the Treaty of Rome and joining the Euroean Community now have many doubts, and their doubts have nothing whatever to do with the actual working of the European Commission, the Council of Ministers and the European Parliament. They feel that
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matters which are their personal concern are not being finally dealt with by their own courts and judges inside their own country.
I do not agree with the noble and learned Lord, Lord Silkin. I believe that it would be quite possible and desirable to accept the convention, but allow the interpretation arising from it to be in our judges' hands. For that reason, I do not look upon this amendment as tilting at absent windmills. I believe that it is very far-seeing and likely to call a halt to a trend that may eventually upset many of the wider decisions on international matters that the country has to make.
When my noble friend Lord Broxbourne intervened earlier, he gave the impression that he put the amendment of the noble and learned Lord, Lord Denning, on one extreme, the noble and learned Lord, Lord Scarman, on the other, and that he was coming in the middle. I hope that he will come down on the side of this amendment. I would not presume to enter into the technicalities, but I believe that the message that flows from the amendment is much more valuable and important than perhaps the comments that we have so far heard about it have led us to believe.
7.45 p.m.
Lord Broxbourne: When the merits of the amendment are put forward in such attractive speeches as those of the noble and learned Lord, Lord Denning, and my noble friend Lord Harmar-Nicholls, it is indeed difficult to withold one's acquiescence with what they say. I always like to agree with my noble friend Lord Harmar-Nicholls because I know the extent of his experience both in Westminster and in the European Parliament and the great contribution that he makes. He says that he would like the Committee to accept the amendment because he wants to give the interpretation of these matters to the British courts, but that is exactly what the Bill is doing.
The amendment of the noble and learned Lord, Lord Denning, goes further than that. It would exclude the right of petition and the jurisdiction of the court altogether. My noble friend Lord Harmar-Nicholls said that he would not go into the technicalities of these matters, but the word "technicalities" is perhaps not a very precise description. These are not technicalities; they are treaty commitments, binding in law and faith. The first part of the amendment, the new subsection (4) of Clause 3, appears to be declaratory. I have no objection to that. Subsection (5), which does away with the right of petition and the jurisdiction of the European Court, raises different and substantial questions.
If we had not, under Article 25 of the convention, made a declaration accepting and renewing the right of individual petition, there would be no impediment to the amendment, irrespective of whether it is desirable. I am sure that the noble and learned Lord will readily agree that we must take the matter rebus sic stantibus. It is only within the past few months that the Government have renewed this right of petition and, therefore as I understand it, we cannot lawfully do away with the right of petition within the specific period identified in Article 25. In this case it is five years.

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Meanwhile, we have undertaken under the terms of Article 25 not to hinder in any way the effective exercise of that right. I am sure that the noble and learned Lord will agree that the amendment would clearly be in breach of that provision and Article 46. I would ask the noble and learned Lord and the Committee whether it is not a better approach to rely upon the common sense of the citizens to prefer the simpler, quicker and cheaper remedy of access to the British courts, rather than the complex and cumbersome procedure of petition, and thereby allow the petition to Strasbourg to fall into natural desuetude without any violation of our treaty commitments. As the Committee knows, there are formidable and practical difficulties in petitioning Strasbourg.
Why should any sensible citizen embark on a course that is costly, complex and cumbersome when he has the quicker, cheaper and more effective remedy to hand at home, as he would have under this Bill? In the famous phrase of a very distinguished noble learned Lord, who is credibly understood in his personal capacity to be not unfavourable to this Bill, the citizen would indeed be honkers if he took that course.
I hope that the noble and learned Lord, despite the attractive support he has had from my noble friend Lord Harmar-Nicholls, will think on reflection that we can place reliance on the sense of the citizen to prefer the jurisdiction of our courts, as given by the Bill, without it being necessary to exclude, in breach of our commitment, rights to go to Strasbourg.
Lord Denning: I should like to make a few comments. First, it must be remembered that when the Government extended the time and allowed a petition to the European Court of Human Rights, it was not part of our law. What we are doing by this Bill is to make it part of our law and any violation could be enforced in our own courts. The Government have no power to take away our liberty or our sovereignty. It is the power of treaty which commits us to that. That is what they have done. But they did it at a time when there was no remedy in the English courts for many of the violations and when it was not part of our law.
What I am suggesting here is that once we make it part of our law, and once a person can get full redress in our courts for any violation of the Convention on Human Rights, there is no need whatever to retain this petition to the court, which, incidentally, has gone wrong several times, in the opinion of our English judge sitting there. There is no need whatever to preserve that executive step when the matter is considered by Parliament, and when we make the whole violation of rights subject to our own courts. So there it is. We have these differences of opinion between the lawyers. I do not know what to do about the amendment. May I have some help? Is it worthwhile having a Division?
Lord Harmar-Nicholls: Let it go on this occasion.
Lord Denning: I still press my amendment.
On Question, amendment negatived.
Clause 3 agreed to.
Clause 4 [Effect on enactments]:
Lord Lloyd of Hampstead Lord Lloyd of Hampstead moved Amendment No. 8:
Page 2, line 35, leave out subsection (2) and insert—
("(2) No provision of an Act passed after the passing of this Act shall be construed as authorising or requiring the doing of an act that infringes any of the fundamental rights and freedoms, or as conferring power to make any subordinate instrument authorising or requiring the doing of any such act, unless such a construction is unavoidable if effect is to be given to that provision and to the other provisions of the Act.").
The noble Lord said: In moving this amendment, I venture to draw your Lordships' attention to the fact that my noble friend Lord Allen of Abbeydale, whose name is also to this amendment, has asked me to say that, owing to a prior engagement which he could not possibly defer, he is unfortunately unable to be here himself this evening. But he wishes the Committee to know that he is strongly in favour of the amendment in question.
The other point that I venture to make, which is of a general character, is that a number of amendments that have been moved so far have been described as being in the nature of wrecking amendments. I indicated on the Second Reading of this Bill and on a number of previous occasions, that I object very strongly to the principle of this Bill, but I am not seeking in any way to rehearse all those arguments which were dealt with at length on Second Reading in relation to this amendment.
This amendment has the sole object of attempting to bring the Bill into line, as I venture to see it, with the correct constitutional position. My submission to your Lordships is that Clause 4(2) of this Bill is contrary to the constitutional position, and therefore it would be highly unsatisfactory if it were embodied into the Bill itself.
As the Committee has seen, Clause 4 purports to deal with two situations. First, there is the effect of this Bill on legislation already in existence. Then it directs its attention to its effect on enactments which are passed after the passing of this Bill. What it purports to do, as I see it, is to provide a rule of construction for the court in each of those cases. As regards previous legislation, that is to be treated as always subject to the fundamental rights in the Bill. If that earlier legislation is contrary to the fundamental rights in the Bill, then this Bill when it becomes an Act will override those contrary provisions.
As I said, I regard that provision as in itself undesirable, but I am not proposing to raise that point or the arguments in the context of this amendment. What I am concentrating on in this amendment is the purported effect of the Bill on subsequent legislation. What the Bill states is that a later Act is to be subject to the present Bill unless that subsequent Act expressly directs that the present Bill shall not apply.
What then is this Bill seeking to achieve? It seems to me that it is an attempt to entrench this so-called Bill of Rights. A subsequent Act is only to be overridden by an express provision to that effect. The court would thus be obliged to declare a subsequent Act of no effect in the absence of an express provision that the Bill was not to apply. I suggest to your Lordships that this just will not do, because it flies in the teeth of a well-established constitutional principle; that is, that one

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Parliament cannot by its own Act of Parliament bind a subsequent Parliament.
This follows from the basic principle of our unwritten constitution, which is enshrined in the doctrine of parliamentary sovereignty. That doctrine requires that any existing legislation, including such a Bill as the present one, must yield to subsequent legislation, and Clause 4(2) as now expressed is inconsistent with that doctrine. It is inconsistent because it proceeds on the assumption that, though the Bill of Rights cannot protect itself against being expressly overridden by a later Act, it is not to be overridden by implication.
What the framers of this Bill hope to achieve, as I understand it, is entrenchment in practice, because they have in effect created an unrealistic scenario. The scenario is based on the thought that no subsequent Parliament can be expected to declare expressly that its legislation is intended deliberately to contravene a provision embodying the terms of an international treaty to which the United Kingdom has acceded. The result of this will be to leave us in a highly confused constitutional situation which could only serve to place an English court in an unacceptable position and, at the same time, it would create great uncertainty in the minds of lawyers and litigants alike.
8 p.m.
The whole question of entrenchment and its limits under our constitution was fully explored by the Select Committee of your Lordships' House which reported in 1978. That committee, as your Lordships know, was not unanimous on the basic issue of the merits of a Bill of Rights. But it accepted unanimously the conclusion expressed by our then specialist adviser, who was no less a person than the very distinguished counsel to our Chairman of Committees, Mr. David Rippengal. His conclusions were set out in a detailed memorandum in the minutes of evidence attached to our report, which your Lordships will find on pages 1 to 10. The matter was also fully discussed on pages 22 to 30 of the report itself.
Perhaps I may quote from the actual report. It states:
"There is no way in which a Bill of Rights could protect itself from encroachment, whether experessed or implied, by later Acts".
On a note to page 22 it is stated that the specialist advisers's paper received general support from the Law Lords who gave evidence to the Committee and also from the noble and learned Lord, Lord Wilberforce, in a letter addressed to the committee. I can tell your Lordships that the noble and learned Lord, Lord Wilberforce, who was present at the beginning of the Committee stage, told me that unfortunately he was unable to stay, but he intimated to me and authorised me to tell the Committee that he still adhered to the opinion that he expressed in that letter to the Select Committee.
There is one further point of which I must endeavour to dispose. It has been suggested—indeed I think it was suggested on the Second Reading of this Bill—that in some way the European Communities Act 1972 provides support for the proposition that a Bill of Rights can effectively control a later Act.
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Reliance is placed, of course, on the crucial section in that Act, Section 2(4). This argument was again fully discussed and rejected in the report. The unanimous conclusion was reached that that Act provides no precedent for what is sought to be achieved by the sort of provision in the present Clause 4 of the Bill.
The matter is a somewhat complicated one. The Committee will not wish me to go into the details at this time. The gist of the matter is that even if it were ultimately held—it has not so far been held by our courts after the European Communities Act has been in existence for some 14 years—that the 1972 Act could and does produce the result of controlling future enactments of our own Parliament subsequent to the 1972 Act, this could be on only one basis: namely, that by our accession to the Treaty of Rome—and here I quote from the report—
"a structural change had been effected in our constitution, given that we had become part of an international community having its own legislative, executive and judicial organs".
The report adds:
"The same could not be said of a Bill falling within the committee's remit".
My amendment is aimed solely at bringing the present Bill into line with the established constitutional position. I indicated on Second Reading that I oppose the principles of this Bill but I am not restating them now. For that reason I have not sought in this amendment to interfere with or delete Clause 4(1) but only Clause 4(2). I understand from the Marshalled List that the noble and learned Lord, Lord Denning, is seeking to delete the whole of Clause 4.
Lord Scarman: The noble and learned Lord, Lord Denning, has had to leave. He has authorised me to say that he does not intend to move any of the subsequent matters on the Marshalled List. Now, unless somebody else moves, we are left with the noble Lord's amendment to Clause 4(2).
Lord Lloyd of Hampstead: I am very much obliged to the noble and learned Lord, who has saved me from making what is now an otiose observation. I do not need to refer further to that. I hope I have clarified the limited objective of my amendment. I beg to move.
Lord Scarman: I find myself in agreement with much that has been said by the noble Lord, Lord Lloyd of Hampstead, on his amendment. Perhaps I may say at once that I accept the basic principles of our constitution as described in the report of your Lordships' Select Committee on a Bill of Rights. The question therefore has to be whether Clause 4(2)—Clause 4(1) is quite unexceptionable—is an infringement of the principle of our constitution—the legislative sovereignty of Parliament—or whether it is merely an interpretive provision.
There is no doubt that Parliament can legislate giving directions to the courts as to the way in which they will exercise their function of interpreting statutes. As the noble and learned Lord the Lord Chancellor said in evidence to the Select Committee, a good illustration of that is the Interpretation Act itself. I would be prepared to argue—but the hour is late and I do not think the matter is of sufficient importance—that Clause 4(2) as it stands in the Bill is

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interpretation and not a breach of the constitution. However, I follow the points made by the noble Lord, Lord Lloyd of Hampstead. I happen to be perfectly content myself with subsection (2) which the noble Lord's amendment suggests should take its place. Therefore I say no more than that I leave this to the good sense of the Committee. The safe way forward undoubtedly is the way suggested in this amendment; the bold way forward is as suggested in the Bill. I prefer the bold way but I am prepared to be knocked on the head.
Lord Broxbourne: In the language of the courts, I respectfully adopt the argument of the noble and learned Lord, Lord Scarman. I too appreciate the purpose behind this amendment and sympathise with it—the preservation of the sovereignty of Parliament and the avoidance of entrenchment. As the noble Lord, Lord Lloyd of Hampstead, will know, I sought to make clear at Second Reading that this was the intention behind the drafting of this clause. I said:
"Subsequent legislation will be subject to the implication that nothing is required to be done which would infringe any fundamental rights and freedoms, unless the subsequent legislation expressly excludes this provision. Of course this is necessary to preserve our constitutional principle that Parliament cannot bind its successors, but the provision as drafted will guard against any inadvertent conflict with the rights and remedies prescribed in the Bill".—[Official Report, 10/12/85; col. 158.]
I yield to nobody in this Committee in my respect and affection for the principle of the sovereignty of Parliament. After all, I have been elected a Member of Parliament in many elections, and I had something to say on the question of the sovereignty of Parliament in our debates on what became the European Communities Act.
The noble Lord will appreciate that the sovereignty of Parliament has in fact been changed, for better or for worse, by our adherence to the European Community—not least because, by that act, we accepted the provisions of Article 189 of the Treaty of Rome, whereby the regulations of the Community take direct effect in this country. They take direct effect whatever the Parliament at Westminster may say. We are therefore in a somewhat different situation from that of 1972, although I do not for a moment seek to diminish the principle and its importance.
On balance—and like the noble and learned Lord Lord Scarman—I prefer the wording of the Bill as drafted to that of the amendment. I find the words in the amendment,
"unless such a construction is unavoidable"
to be difficult of interpretation. They would certainly impose a considerable burden on the judges and give very wide scope for judicial interpretation—which is, perhaps, a little ironic, because one of the main criticisms voiced of the Bill on Second Reading was that it would tend to increase the power of the judges.
While being very grateful to the noble Lord for the clarity and cogency with which he has expressed his views, I ask him not to press his amendment but to accept the wording of the Bill as it stands.
Lord Silkin of Dulwich: I agree with the arguments put forward by the noble Lord, Lord Lloyd of
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Hampstead, and would not intervene at this late hour but for one point that needs to be considered in any amendment of Clause 4(2) as it stands at present. Subsection (2) begins with the words:
"Any enactment made or passed"
and so on, and an enactment is defined as including,
"any Order in Council or instrument made under any enactment".
The proposed new subsection begins with the words,
"No provision of an Act passed".
It goes on to refer to that Act as possibly,
"conferring power to make any subordinate instrument",
but it does not apply directly, so far as I can see, to subordinate instruments themselves. I wonder therefore whether it would not be desirable, in view of what has been said by other Members of the Committee, to leave that point in abeyance; accept the principle of what has been said by the noble Lord and hope that between now and Report stage, an acceptable version can be agreed.
Lord Broxbourne: I certainly give an undertaking to study most closely what has been said by the noble and learned Lord. There is in the interpretation in Clause 1 the definition that enactment,
"includes any Order in Council or instrument made under any enactment".
Those are wide words and I would have thought that they were wide enough to cover the subordinate instruments to which the amendment expressly refers, without the necessity of incorporating the words in the amendment itself. Of course I shall look sympathetically, and I hope intelligently, so far as I am able, at what has been said. If we come to the conclusion by Report stage that the wording can be improved, I shall of course be very happy to put down an amendment at that stage.
Lord Lloyd of Hampstead: I should like to express thanks for the generous treatment that has been accorded to my amendment by the noble and learned Lord, Lord Scarman. The only comment I would venture on his suggestion that it might be treated as a mere clause of interpretation is that it seems to me, with all deference, to be inappropriate—not to use a stronger word—to have a rule of interpretation in a statute that appears to run counter to the established constitutional principle that an Act of Parliament by one Parliament shall not bind a successor Parliament. It therefore seems to me far more appropriate that the proposed change should be made.
8.15 p.m.
As regards the point raised by the noble and learned Lord, Lord Silkin, I venture to think that it was completely answered most helpfully by the noble Lord, Lord Broxbourne, when he pointed out that the definition appears to cover the difficulty envisaged by the noble Lord, Lord Silkin.
The noble Lord, Lord Broxbourne, has in effect invited me to withdraw the amendment on the basis that he will consider very carefully whether to insert a clause on the lines of the draft that we have put forward. I confess that I do not find that entirely satisfactory. If the noble Lord were to undertake to propose a clause on the lines I have suggested, with any

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adjustment of wording that might be found necessary after closer scrutiny of the wording of the clause, then I would be happy to withdraw Amendment No. 8. However, if the noble Lord does not feel that he can go that far, then I would like at least to hear whether the Committee is content or not content with the amendment that I have ventured to put before it.
Lord Broxbourne: I do not feel that I can go any further at this moment. I must say to the noble Lord that I am a little disappointed with his reaction to what I thought was a reasonable and perhaps even a generous offer on my part. I shall of course study the whole question. I shall study the noble Lord's speech and the possibilities. If it seems as a result, and after taking consultation where I can, that we can improve the Bill on the lines of the noble Lord's amendment, or indeed in any other way, then I will be very happy to put down an amendment to that effect.
I assure the noble Lord that I have no obstinate pride of draftsmanship or copyright in these matters. I am only anxious to get a good and workable enactment on the statute book. I hope that the noble Lord, with that assurance and explanation, will see fit to withdraw the amendment.
Lord Lloyd of Hampstead: I have no desire to weary your Lordships with a vote at this time of the evening—particularly after the very fair discussion that we have enjoyed on this particular amendment. I am prepared to withdraw the amendment now, but I reserve my right to reintroduce it on Report if the noble Lord, Lord Broxbourne, forms the view, after further consideration, that he is unable to reintroduce the amendment in a verbally-modified form, on that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 agreed to.
Clause 6 [Proof of Convention instruments, etc]:
Lord Campbell of Alloway Lord Campbell of Alloway had given notice of his intention to move Amendment No. 9:
Page 3, line 12, leave out ("Protocols") and insert ("Protocol as defined in section 1(2) of this Act").
Lord Broxbourne: My noble friend Lord Campbell of Alloway has had to leave the Committee, and so we are denied his assistance in what remains of this discussion. I am very grateful to him for the help that he had given hitherto. He asked me to say that he will not be moving this amendment. Indeed, he will not be moving any other amendment which stands in his name. On this amendment, Amendment No. 9, my noble friend has given me a short note as to the basis of it which I shall certainly study with care between now and Report. On his behalf, therefore, if I am in order in doing so, I confirm that this amendment is not moved.
[Amendment No. 9 not moved.]
Clause 6 agreed to.
Clause 7 agreed to.
[Amendment No. 10 not moved.]
Remaining clauses agreed to.
[Amendment No. 11 not moved.]
Schedules agreed to.
House resumed: Bill reported without amendment.

Museums and Galleries (Prohibition of Admission Charges) Bill [H.L.]
8.22 p.m.
Lord Jenkins of Putney: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Jenkins of Putney.)
Lord Simon of Glaisdale: My Lords, before the Question is put formally I venture to protest at the Bill coming into Committee at this late hour. It was half an hour ago that my noble and learned friend Lord Scarman remarked on the lateness of the hour. When the House debated the Second Reading, your Lordships were pressed to give the Bill a Second Reading so that it could be properly discussed in Committee. The Bill was given a Second Reading and now it is presented for discussion in Committee at this very late hour in a virtually empty Chamber. It is not too strong to say that it is treating your Lordships with less than proper respect and certainly treating the subject matter of this Bill with less than proper respect.
On Second Reading a number of speeches were made saying that the Bill expresses a matter of principle, of crucial principle, of fundamental principle, and yet your Lordships are now asked to discuss it at this late hour with a virtually empty Chamber. Obviously the noble Lord, Lord Jenkins, has no hope of carrying this Bill into law this Session, and so it will fall at the end of the Session. However, he would be less than human if he did not wish to say that it had been approved in principle by being given a Second Reading and, as he no doubt hopes, passed unamended through Committee.
I say again that that is no way to treat your Lordships and certainly no way to treat a matter of fundamental principle. Even if it is not a fundamental principle, it is of high importance to issues that your Lordships hold supremely valuable.
Lord Jenkins of Putney: My Lords, I am in the hands of your Lordships' House. If the view expressed by the noble and learned Lord, Lord Simon of Glaisdale, is widely held in the House, it would perhaps be more appropriate if I sought to bring the matter forward on another occasion. However, it seems to me to be essentially a matter for the House more than for me personally to decide. I merely say that if the House is persuaded by what the noble and learned Lord, Lord Simon, said, I would not seek to persuade your Lordships to go ahead at this time if it is the general wish to postpone the matter to another occasion.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the only difficulty is that the order has been agreed

1117
through the usual channels and the noble Lord, Lord Jenkins, therefore has this position on the Order Paper which, although late, has been facilitated to some extent by my noble friend Lord Massereene and Ferrard withdrawing his business.
If we do not proceed this evening, as it is a Private Member's Bill, and with an increasingly busy agenda on the Order Paper as the weeks go by, the noble Lord will be in increasing jeopardy in getting the Bill into a good position on the Order Paper on another day. I felt that I should point out that to the House as it is an argument for proceeding.
Lord Harmar-Nicholls: My Lords, I agree with every word said by the noble and learned Lord, Lord Simon of Glaisdale. It is a pity that a matter which is of supreme importance, as was said on Second Reading, should be dealt with at such a late hour, both on Second Reading and now. I believe a fuller House at Second Reading might have given a different view than the one we are saddled with now.
Having said that I agree that the protest from the noble and learned Lord, Lord Simon of Glaisdale, is justified and absolutely right, I feel that now we are here, and particularly in the knowledge that this is not a Bill which is likely to reach the statute book for all sorts of other reasons, those of us who are here can perhaps put our views on record.
I would not say, as the noble and learned, Lord, Lord Simon of Glaisdale, seemed to suggest, that there will not be a Division. In the event that the noble Lord does not accept at least one of my amendments, I hope to put it to the test in the Committee, small though the attendance may be. Having got so far I should have thought it better to proceed now that our protest has been put on record.
Lord Jenkins of Putney: My Lords, it seems to me that there is not absolute unanimity in the House in support of what was said by the noble and learned Lord, Lord Simon of Glaisdale. In all the circumstances, it seems to me that unless there is a widespread view that we should not proceed, on balance, and with due deference to what he said; perhaps we should proceed with the Committee stage of the Bill. I leave the matter in your Lordships' hands.
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
8.30 p.m.
Clause 1 [Repeal of 1972 c. 73]:
On Question, Whether Clause I shall stand part of the Bill?
Lord Harmar-Nicholls: I gave notice that I would oppose the Question, That Clause 1 stand part of the Bill. In order to avoid any confusion, I shall not push that to a vote because I feel that, having obtained a Second Reading, tiny though the attendance was when we gave the Bill a Second Reading, the convention should be adhered to of not interfering in Committee with Clause 1 when it is a fundamental part of the Bill.
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I still hope that, with the argument that I want to put to the Committee, the noble Lord, Lord Jenkins, may on consideration withdraw Clause 1, because it looks to me as though he was under the misapprehension when he included Clause 1 as part of this Bill that the Museum and Galleries Admission Charges Act 1972 should be repealed.
The main burden of this case all through Second Reading was that the noble Lord did not want charges to be levied on anyone going into museums and galleries. I understand that; it is a point of view which he is entitled to have. I do not agree with it, for the reasons which I gave on Second Reading. The Act of 1972 does not interfere with that at all. The 1972 Act gave no power to charge for entering galleries and museums. The object of the 1972 Act was to clear up an untidy situation under the law. It was felt—it was not even established as a fact—that because of the small print in various parts of the Act, four out of the 16 museums and galleries involved were slightly different from the other 12. Twelve of them were quite free of any obstacles to the trustees putting on a charge if they wished to. However, four of them—the British Museum, the British Museum's Natural History Museum, the National Museum of Antiquities of Scotland and the National Galleries of Scotland—for technical and detailed reasons which are not important for us to consider now, were in a slightly different category. So the 1972 Act had nothing whatever to do with what the noble Lord has in mind in trying to prevent charges being levied. It was merely a tidying up operation for a untidy law situation. Even now, if the Bill is left as it is, it gives no power actually to charge, which is the real burden of what the noble Lord had in mind when he presented this Bill.
If he had not appreciated the point which I have just put to him, I should think that the noble Lord would be quite entitled to say so, since it in no way affects the real message which his Bill wants to give, and would be prepared to withdraw Clause 1 and leave the tidying-up 1972 Act to do its job of removing what is a possible inconsistency and removing a possible quirk in the application of the law. There were 16 museums and galleries involved. Twelve of them do not come under the scope of the Act at all and for four of them, for detailed, rather obscure and not proved reasons, it was felt right to tidy matters up.
Lord Ross of Marnock: Does the noble Lord realise that we had a Bill last year that covered the National Galleries and the National Museum of Antiquities of Scotland, and the position is not as he now says?
Lord Harmar-Nicholls: If the noble Lord will read the debates when the 1972 Act was still a Bill and passing through the House, he will see that it was my noble friend Lord Eccles who placed it on the statute book as the Minister in charge. He will find that the whole burden of that Act was a tidying up of four establishments which did not come into the same category as the other 12.
I do not wish to waste time. I am merely saying, because I do not wish to put it to a vote, that the Motion in no way interferes with the fundamental purpose behind the present Bill, which has to do with charges. I shall come on to that issue when I move the

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next amendment. I believe that this one ought to be removed so that we do not again upset a clean situation which came about as a consequence of that 1972 Act.
Having opposed the acceptance of Clause 1 in order to make that point, it may well be that the noble Lord, Lord Jenkins of Putney, will indicate that before this Bill goes much further he is prepared to withdraw that particular clause.
Lord Jenkins of Putney: I cannot go quite as far as the noble Lord suggests but I am grateful to him for agreeing not to press this Motion further. I think there is a slight difference between us on the question of what actually was the effect of the 1972 Act. I think it was rather more substantial than he imagines.
On the other hand, I think it may be argued on reflection that Clause 2 in the Bill might have a similar effect to Clause 1. On this point at any rate and indeed following what the noble Lord has said, I think it would be a very good idea if I were to take advice between now and the later stage of the Bill. In the meantime I am grateful to the noble Lord for not pressing the matter tonight.
Lord Harmar-Nicholls: From my point of view I am most happy to accept the undertaking that the noble Lord will look at it and, if what I have said can be substantiated, he himself may possibly want to withdraw Clause 1.
Lord Simon of Glaisdale: I was present for the Second Reading of this Bill. I had attended for one and a half hours of the previous debate on the universities, with great advantage to myself. But unfortunately the very moment the noble Lord, Lord Jenkins, got up to speak I was called out of the Committee by a telephone message so I missed the whole of his opening speech, as well as the first half of the speech of the noble Lord, Lord Harmar-Nicholls. Under those circumstances I did not feel that it was right for me to intervene in the debate. However, I would have wished to say some things, if only in praise of the noble Viscount, Lord Eccles, and his Bill.
My own connection with and responsibility for the arts was many years ago—a generation ago—and then anomalously as a Treasury Minister, because at that time the museums and galleries were a Treasury responsibility. In fact that worked very much better than it ought to have done on any rational machinery of Government. I very much welcomed, though I was then out of the House, the appointment of the noble Viscount, who was such an outstanding Minister of the Arts. In fact, it was in my time at the Treasury that the great breakthrough came in the grants for funding the museums and galleries. I am sure that the noble Lord, Lord Hutchinson, will bear in mind that it was at that time that the momentous decision to increase the Tate Gallery grant was reached. That was by no means easy. The buying of modern art by the Tate Gallery trustees at that time did not command much popular enthusiasm or much parliamentary enthusiasm. Nevertheless, that was the time when the grant of £2,000 a year, which had to cover the British collection, the modern foreign collection and the modern British collection, was increased from £2,000
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to £40,000. To me that was a very great satisfaction. I well remember the delighted smile of Sir John Rothenstein when he heard that news.
Having said that, perhaps I may deal with the point made by the noble Lord, Lord Harmar-Nicholls, and considered by the noble Lord, Lord Jenkins. I am afraid I did not altogether agree with Lord Harmar-Nicholls, I do not think the noble Lord, Lord Jenkins, can be expected to withdraw Clause 1 at this stage. As I understand it, what the 1972 Act does is to remove a number of minor clogs on the museum trustees exercising their discretion to make entry charges.
If the amendment of the noble Lord, Lord Harmar-Nicholls, Amendment No. 1, is carried, that provision is still necessary. If Amendment No. 1 is not carried, then Clause 1 is not necessary. But no doubt the noble Lord, Lord Jenkins, will want to see what happens because he can always deal with the matter at the Report stage, as I understand it. So I do not think he can really be asked to withdraw the amendment at this stage.
The 1972 Act gives a discretion to trustees to take what course they think right in the interests of the museum of which they are trustees. It does not compel them to do anything, it is not coercive, as this Bill is. It seems to me that quite apart from the technicality, the Act ought to remain on the statute book, if only for the exiguous purpose of backing up Amendment No. 1 which I hope the noble Lord, Lord Harmar-Nicholls, will move and which I hope will be carried.
Clause 1 agreed to.
Clause 2: [Prohibition of admission charges]:
Lord Harmar-Nicholls Lord Harmar-Nicholls moved Amendment No. 1:
Page 1, line 11, at end insert ("without the approval of the Arts Council of Great Britain")
The noble Lord said: This is an amendment which I hope again the noble Lord, Lord Jenkins, may find it possible to accept. The real difference of view properly held on both sides, was that Members of the Committee who did not agree with charges wanted to make it statutory that nobody could charge for going into museums and galleries. They felt that it was detrimental to the proper use of those museums and galleries and they did not want what they considered to be an obstacle to their use by making a charge. Everybody seemed to accept that there was not enough money for the museums and galleries to be kept at the level that they wanted them to be kept at. We had to accept that the Government had made it quite clear that while they were prepared to maintain and indeed to some extent improve the level of their grant, it would be kept at a certain level. We all knew that in anticipation of inflation—however small it might be—with rising costs and new acquisitions which might be necessary in the future, it was quite clear that if we wanted to maintain the museums and galleries at the level which would be truly desirable to all of us, more money would have to be found.
The museums, with the authority of their trustees, have already tried to find alternative ways of getting that very desirable extra money. They run shops, they run restaurants, they sell certain items from the museum at some sort of profit. The profit is retained in

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order to be able to improve the general standing and excellence of the museums.
Some of them decided that it would be a good thing to charge entrance fees, as almost every other country in the world already does. It was felt that for the millions of people who use our museums, having paid the cost of getting there and all the expenses that are necessary before walking through the door, to pay the same sort of money in relation to what they will get when they go inside was not objectionable.
8.45 p.m.
Then we have the other point of view which I share that we ought to give to the trustees the power to use their own discretion as to whether or not they should charge for people to go into museums. It is really a Second Reading point all over again, but it is right to remind ourselves that we charge for the ancient monuments. When I was at the Ministry of Works, I was responsible for the ancient monuments for something like three-and-a-half years, and I remember the great trouble that we used to go to to make it more attractive, to justify the money we took from people who went through the turnstiles.
People pay to go to the Tower of London, the Labour Government itself, when it spent money on the Jewel Tower, doubled the entrance charge. There is nothing wrong with that.
So the general principle that you should, under certain circumstances, be prepared to charge in order to get the money to make the museums and galleries even better is a principle that has been generally accepted. I could not understand the absolutely adamant way in which the noble Lord, Lord Jenkins, and his supporters, although they had accepted this in all the other cases such as the ancient homes, the museums, Apsley House, the Tower of London, where we make the same sort of contribution to upkeep—as well as the Coliseum and the Festival Hall—pay to go in to all those places. Yet, for some reason, with these 16 museums and galleries, full of treasures of such value, they are not prepared to do the same. I could not understand that decision, but it was pursued, we put it to a vote in a very thin House and on this Bill it got its Second Reading.
I wanted to suggest, in support of my amendment, that if the Committee did not have confidence in the discretion of the trustees, if it felt those who were already charging or those who contemplated charging were people who ought not to be left with that power, then this Bill would take it away. I felt it might meet some of the reactions if we said, "Under this Bill we will not leave it only to the discretion of the trustees. We will not leave it that they make the ultimate decision alone. But before they can use the power to charge they would have to get the approval of the Arts Council of Great Britain. There would then be the situation that where governments of all complexions of the day had accepted charging since they already charged at the Monument, the Tower of London and all the other places, the trustees themselves who knew the day-to-day problems of their museums and galleries and knew what was wanted, would have agreed to it. In addition, you would have the extra
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safeguard that the Arts Council of Great Britain itself had to approye it before they could charge. Then I would have felt that with all those reasonable safeguards, knowing that this freedom to do that would not be abused, any reasonable person ought to want to accept this.
So my amendment on Clause 2, which is the powerhouse of the Bill, is that we leave Clause 2 as the noble Lord put it through its Second Reading, with the added words that they have the power to charge, if they think fit, providing the Arts Council of Great Britain supports them. I think it is a move in the direction for which the noble Lord, Lord Jenkins, was asking, a move in the direction of seeing that we are safeguarding this great heritage of ours. I believe that this amendment would not interfere with the fundamental principle behind the Bill and it ought to find support with your Lordships when we come to make a decision on it.
Lord Jenkins of Putney: The noble Lord, Lord Harmar-Nicholls, knows that just as I could be required reasonably to take another look at his opposition to Clause 1, it would not be proper for me to give a similar undertaking on this amendment. I shall explain why. The noble Lord indicates that he has this knowledge because he made what amounted to a Second Reading speech in support of the amendment. The noble Lord knows as well as I do that, in another place, he would have been pulled up long before he was able to complete the speech that he has just made. We are, of course, easier in this Chamber. I make no complaint about that.
The noble Lord would, I believe, agree that the amendment goes to the heart of the Bill. In my view, he would be entitled to seek to go to the heart of the Bill under his next amendment, which I trust the Committee will resist. But to adopt the approach that he has taken on this amendment seems to be a course of action that should not obtain the support of the Committee. Even those noble Lords who have some doubts about the Bill will take the view, I believe, that the noble Lord has gone the wrong way about it.
The noble Lord the Minister will say, I believe, that it would be improper in a Private Member's Bill to seek to put upon the Arts Council a power that the Arts Council would reject out of hand. It has no right to fulfil such a function. The money that goes to museums is not Arts Council money. As the noble Lord will be aware, money in support of museums does not travel through the Arts Council. It travels direct from the ministerial office. Therefore, the Arts Council has no standing in this matter.
If the noble Lord wishes to argue his case again, as he has shown he is capable of doing, the proper place to do so would be in support of his next amendment. I hope therefore, for all these reasons, that the noble Lord will allow the amendment now under discussion to fall. I can see that the noble Lord thought to himself that this was not a bad idea. I hope that, on reflection, he will conclude that it is not such a good idea after all and that he will not press the amendment.
Viscount Eccles: I hope I shall be forgiven if I speak only to the amendment—and in very few words. I oppose the amendment. It would be wrong to give the

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Arts Council the power that my noble friend wants it to have. The Arts Council is overburdened. It would be a good idea if the Arts Council was no longer to have responsibility for the great national companies and that these were financed directly by the Treasury, as they used to be. That would allow the Arts Council to pay proper attention to a vast number of artistic activities up and down the country. I do not wish to be rude. If, however, one compares the councillors of the Arts Council with the distinguished trustees of museums, it would clearly be ridiculous to give the Arts Council power to override the museum trustees.
Lord Belstead: I should like, if I may, to add my voice on behalf of the Government. The amendment is a reasonable attempt by my noble friend Lord Harmar-Nicholls to relieve museum trustees of the effects of this Bill. But it does not fulfil the important point of principle that trustees should be free to exercise their judgment in the discharge of their responsibilities. It is right that we should take to heart what my noble friend Lord Eccles has said about the distinguished people who form the bodies of trustees in our institutions.
This is an occasion when I feel that my noble friend Lord Harmar-Nicholls is being characteristically too reasonable. In endeavouring not to put down an amendment that would strike at the fundamental principle of the Bill—a measure that has after all received a Second Reading—he has moved an amendment that I cannot support. I do support, however, all that my noble friend said in moving the amendment.
Lord Harmar-Nicholls: The noble Lord, Lord Jenkins, is vice-chairman of the Theatre Trust which carries out precisely the function that I say the Arts Council could carry out. I do not have what is perhaps the slight prejudice that my noble friend Lord Eccles seemed to display against the Arts Council in his few words. The object of the Theatre Trust was to prevent planning authorities removing a theatre and turning it into something other than a theatre. It was seen as an extra bulwark against a theatre being flippantly changed into something else.
I believe that we should find some body—I can think of none more suitable than the Arts Council of Great Britain which provides some of the funds and whose membership includes those who have an under-standing of this sort of thing—to carry out the same function as the Theatre Trust, which resulted from a measure that I sponsored through the House and which now has the noble Lord as its vice-chairman.
We should have on the record from this Committee stage an attempt to find some way of removing the absolute embargo the Bill puts against the opportunity to charge if trustees so wish. The next amendment has nothing to do with charging. It is concerned with something quite different although the idea behind it is similar. I should therefore like to put the amendment to the test. If, at Report stage, in deference to the special knowledge of my noble friend Lord Eccles and taking into account the points made by the noble Lord, Lord Jenkins, we can find another body that is better than the Arts Council, the replacement could be
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made at that time. I should, however, like to put the amendment to the test, just as we did the Second Reading. I shall therefore insist on pressing the amendment.
8.57 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 3; Not-Contents, 19.

DIVISION NO. 1

CONTENTS

Harmar-Nicholls, L. [Teller.]

Rodney, L. [Teller.]

Sanderson of Bowden, L.

NOT-CONTENTS

Airedale, L.

Hutchinson of Lullington, L. [Teller]

Ardwick, L.

Birk, B.

Hylton-Foster, B.

Broadbridge, L.

Jenkins of Putney, L. [Teller.]

Bruce of Donington, L.

Kilbracken, L.

Craigavon, V.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

Ritchie of Dundee, L.

Ezra, L.

Ross of Marnock, L.

Hacking, L.

Underhill, L.

Hanworth, V.

Ypres, E.

The Chairman of Committees (Lord Aberdare): There have voted: Contents, 3; Not-Contents, 19. As it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 55 I declare the Question not decided, and, pursuant to the Standing Order, the House will now resume.
House resumed.

Competition Policy
9.6 p.m.
Lord Hacking Lord Hacking rose to ask Her Majesty's Government whether they will, as a matter of urgency, establish a fair and coherent competition policy to operate in the interests of the British economy and of British industries at home and abroad.
The noble Lord said: My Lords, with your Lordships' leave I shall pause, or take my early comments fairly slowly, because the noble Lord the Minister is not yet in your Lordships' House and he will be replying to the Question that I have tabled.
I stand before your Lordships to beg leave to ask the Question that stands in my name on the Order Paper. It may be of assistance to your Lordships if I remind you and the noble Lord the Minister of the terms of my Question. They are as follows:
"To ask Her Majesty's Government whether they will, as a matter of urgency, establish a fair and coherent competition policy to operate in the interests of the British economy and of British industries at home and abroad."
From the terms of that Question, your Lordships and the noble Lord the Minister may detect an element of criticism against government competition policy. Indeed noble Lords may think that there is a suggestion in the Question which I have tabled that the Government have no competition policy, whether it is either fair or coherent. However, before the noble

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Lord the Minister feels too wounded by the terms of my Question, let me start, I hope, with some sympathetic words towards the Government.
Probably no government's competition policy has been under such pressure as this Government's competition policy now is. It is under tremendous pressure because of a recent spate of colossal takeovers. I refer to the Allied-Lyons takeover and the threat of a takeover by Elders IXL, although it appears from a recent development in the market that that takeover may have gone away. I refer to the rival takeovers of the Imperial Group by United Biscuits on the one hand and the Hanson Trust on the other. I also refer to the rival bids for Distillers by Argyll on the one hand and by Guinness on the other—a takeover of a company whose assets are currently valued at no less a figure than £2·4 billion. There are also other takeovers which are putting this Government's competition policy under pressure. In each of these takeover battles the Government's merger policy is being tested to the full, and in each of them the Government have thought it necessary to intervene and to order referrals to the Monopolies and Mergers Commission.
The starting point of this debate is where the last and excellent debate of 22nd January of this year ended. This was the debate which was so well introduced by the noble Lord, Lord Gallacher. Regrettably, I was unable to participate in it because I was in the United States of America.
Without going through the arguments again, I should like to adopt much of what was said in that debate by the noble Lord, Lord Bruce-Gardyne, who is happily joining us this evening in this debate, the noble Lord, Lord Williams of Elvel, and the noble Lord, Lord Gallacher. I therefore adopt the expressions of concern over the arrival of the US-style leverage bids, otherwise called LOBs. It may be that colourful language will enter into our market-place, such as "poison pill", "shark repellant", or "golden parachute". However, with the structure of these debt-financed bids being based not on the bidder's balance sheet but upon its target's balance sheet, with the blatant motives in them of the stripping of assets, I believe that these forms of takeover should be treated by us with worry and concern.
I also share the concern expressed by the noble Lord, Lord Gallacher, over the interests of shareholders and workers in recent takeovers. I share too the concern over the basis upon which the Government exercise their decision whether or not to refer a takeover to the Monopolies and Mergers Commission.
Therefore, it may be helpful if I run briefly through the procedural mechanics for examining these takeovers. These are partly to be found in the Fair Trading Act 1973 and partly in established government procedural policies. It goes roughly like this. There is an announcement of a proposed merger. Sometimes it is in the form of a bid and sometimes it is in the form of a statement of intention to bid. There is of course the other circumstance when there is an existing merger or an existing perceived monoply which can also be investigated. However, I am taking
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it when there is an announcement of a proposed merger.
After that announcement, there is an investigation by the Office of Fair Trading; and following that investigation there is a confidential report which is submitted by the Director-General of Fair Trading to the Secretary of State. After that report has been submitted, the next event is the Government's decision on whether to refer the proposed merger to the Monopolies and Mergers Commission. If the Government decide to refer the proposed merger, they set out for the Monopolies and Mergers Commission the terms of the commission's reference.
Then there is a long pause. It is obligatory under the terms of the statute to include the time frame. The time frame in almost every proposed reference is one of six months. In other words, the Monopolies and Mergers Commission is asked to report within six months, although there is a further extension which is sometimes granted by the Secretary of State of another three months. That is why I refer to the long pause between the referral and the report by the Monopolies and Mergers Commission.
The next event therefore is the report some six or nine months later. When the Government have received that report—if it is an adverse decision by the Monopolies and Mergers Commission who report that the proposed merger is against the public interest—the Government have an independent decision of whether to accept or reject the report. If it is the other way round, if the Monopolies and Mergers Commission reports that the proposed merger is not against the public interest, curiously under the statute the Government have no decision to make and have no right to overrule the decision. This is a feature of our current competition statutory law which the noble Lord, Lord Bruce-Gardyne, criticised when he spoke in your Lordships' House on 22nd January.
I would also remind your Lordships of the tests upon whether a referral is made which are set out in Section 64 of the Fair Trading Act 1973. Those tests are whether there is a quarter share of the market or whether the assets to be taken over exceed the value of £30 million. There are also public interest tests which are applied by the Monopolies and Mergers Commission. These are set out in Section 84 of the Fair Trading Act 1973. I give one example:
"the desirability … of maintaining and promoting effective competition between persons supplying goods and services in the United Kingdom".
I am quoting from Section 84(1)(a) of the Fair Trading Act.
Out of this background I want to focus upon two serious problems which recent takeovers have painfully highlighted. First, the test of the market is a domestic test. Nowhere in the statute is this test set out in an international context. It is true that governments have frequently stated their regard for the international context. I quote, for example, the statement on mergers' policy by the then Secretary of State for Trade and Industry, Mr. Norman Tebbit. He wrote in these terms in a Written Answer to a Question put to him in the other place on 5th July 1984, at col. 213:
"In evaluating the competitive situation in individual cases I shall have regard to the international context: to the extent of competition

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in the home market from non-United Kingdom sources and to the competitive position of United Kingdom companies in overseas markets".
It is true also that the Government have repeated on a number of occasions their regard for the international context of the market share test. I refer, for example, to an admirable speech by the Minister, Mr. Michael Howard, on 29th October 1985. I refer to recent letters written to Mr. Bryan Gould and Mr. David Steel—which have been made public—by the Secretary of State for Trade and Industry. I can even refer to a Written Answer provided by Mr. Howard on the 17th of this month; in other words, only about three days ago.
The question is: how much are the Government taking into account the international context in the share of the market test? Your Lordships may recall that Sir Michael Edwardes wrote a letter to The Times on 19th February expressing considerable concern about the apparent failure of the Government to have sufficient regard for the international context of bids. I cite another example. Although 90 per cent. of the sales of the Distillers Company are abroad, the proposed merger, under the first Guinness bid, for the Distillers Company was referred to the Monopolies and Mergers Commission.
The second problem on which I wish to focus your Lordships' attention arises out of the current speed and force of movements in the market. As has been shown in recent takeovers, the market simply cannot wait for the Monopolies and Mergers Commission to report. Just look at what happened in the Imperial Group takeover! Just look at what happened in the Distillers takeover under the first offer of Guinness! Immediately those two proposed mergers were referred by the Government to the Monopolies and Mergers Commission the bids were withdrawn and large divestments were offered by each of those companies without any investigation as to the public interest and without any conclusions whether the proposed mergers were against the public interest. The problem is that a referral of one bid and not the other results in a one-sided intervention by the Government into the market.
The point was drawn to the attention of the Minister, Mr. Howard, and he made certain replies in an article reported in the Observer. I am unable to quote the exact replies of the Minister but, in substance, he questioned whether there should be concern over an "even-handed" approach. Of course, one understands the Minister when he is saying that when one proposed merger has been considered by the Office of Fair Trading and by the Government and a decision has been taken not to refer that proposed merger to the Monopolies and Mergers Commission, it would be wrong then to bring that first proposed merger under consideration again because a second bidder came on to the market.
Nonetheless, the statement by the Minister, in my submission to your Lordships, is a worrying statement. If the Government know that the consequence of a referral is to intervene in a one-sided manner into the market-place then, in my respectful submission, it is beholden on the Government to act fairly. We all know why it takes six months or even longer for the
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Monopolies and Mergers Commission to come to report, but that does not absolve the unfairness of a one-sided intervention into the market-place. Perhaps in the fullness of time other mechanics may come forward. Perhaps legislation could be passed for a temporary freeze on all bids while one bid is being considered by the Monopolies and Mergers Commission. But, until other mechanics come forward, I urge upon the Government, at this critical time when they are taking decisions on whether to refer the new bid for Distillers and the new bid for Imperial Group to the Monopolies and Mergers Commission, to take consummate care to act with fairness.
It is, after all, a wholly unsatisfactory result that referrals are now being used as part of the strategy of bidders to gain the prize in a takeover. This is not to criticise the companies who are legitimately using all rights available to then at law, but it is to recognise that the enthusiasm, for example, of the Argyll company to hold the Government to the earlier reference of the Distillers and Guinness merger to the Monopolies and Mergers Commission was part of their strategy to tie down the other bidder in the market-place. In general, it may be that at this present time, during this spate of takeovers—particularly those which have the characteristics of the US-style leverage bids—there should be more referrals to the Monopolies and Mergers Commission. But under present government policy there is unfairness if not clumsiness, and that is the reason why I have put down this Unstarred Question in your Lordship's House.
9.25 p.m.
Lord Ezra: My Lords, the Question that has been posed by the noble Lord, Lord Hacking, is particularly approprite at the present time, even though it was only in January that a similar Motion was debated. I believe that it is very appropriate for two reasons: first, because there is a massive amount of change going on in the commercial and industrial world; and, secondly, the Secretary of State for Trade and Industry has decided that there should be a full inquiry into competition policy. I think it right that in advance of that inquiry the views of this House should be made known clearly on the subject, just as I hope that when the inquiry has been completed we shall have a full opportunity for debating its conclusions or recommendations.
The noble Lord, Lord Hacking, concentrated in his remarks on the recent crop of major mergers, but I believe that this whole question of reviewing competition policy should go beyond that. The mergers undoubtedly are attracting public attention, but questions of competition are raised by the increasing tendency for privatisation to be transferring monopolies or quasi-monopolies into the private sector. The professions are being progressively liberalised, and that raises questions of competition of a sort which previously did not arise.
There is the impending regulation of the financial markets which in due course we shall be debating here; and that again touches on the question of competition. Also, as recently as 11th March, Sir Gordon Borrie, the Director General of Fair Trading, raised the question of the need for the revision of the Restrictive

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Trade Practices Act 1976. Therefore I very much hope that when this review by the Secretary of State and other Ministers is undertaken it will cover competition in a wide sense. I feel that the value of this debate will be to draw attention to some of the issues which we hope will be looked at.
Perhaps I may just comment on one or two of those aspects. The question of privatisation of monopolies or quasi-monopolies is something which creates very special problems. The solution which has been proposed in the Bills that we have so far debated, or will be debating, is the creation of new regulatory bodies. A number of your Lordships who participated in the debate on the Telecommunications Bill will recall that we spent some time debating the relationships between Oftel, on the one hand, and the existing body, the Office of Fair Trading, on the other, to decide who exactly was responsible for what. As more of these regulatory bodies are created for special purposes, more of these problems of the delimitation of responsibility are likely to arise.
The whole panoply of organisations dealing with the question of competition is already pretty complicated. It will become increasingly complicated as these new bodies are created Yet what we should be going for, if they are to be effective, is simplification rather than complication. I think there is a real task here to review the whole range of these bodies and see how they inter-relate.
When we come to the question of mergers, a number of very important issues were raised in the debate on 22nd January. The noble Lord, Lord Hacking, has referred to some of them. I should like to refer to one or two other points that were raised during the course of that debate. It was suggested, for example, by the noble Lord, Lord Williams of Elvel, that the way in which the merger policy was working at the moment tended to favour conglomerates being extended in their diverse operations rather than to encourage justified industrial concentration. I think that that is a really serious issue and I fully agree with what the noble Lord, Lord Hacking, said about the international dimension.
We are, after all, meant to be an integral part of the European Community market, and to look at a particular bit of the market, in respect of the impact that it could have as to one part of a firm's operation within just the United Kingdom, does not seem to me to be particularly relevant these days in the case of major industrial organisations. We should be gearing ourselves up to be fully competitive in the European and world context and not to look at matters merely in the United Kingdom context. That issue needs to be looked at again.
The role of the Monopolies and Mergers Commission when referrals take place was also mentioned by the noble Lord, Lord Hacking. It seems to be a weakness of the whole procedure that the inquiry takes so long. I believe that it takes so long because the Monopolies and Mergers Commission is probably not particularly geared up for the task. One point that should be looked at is whether it should continue to have the remit to carry out inquiries into nationalised industries.
As was said during the debate on 22nd January, I believe by the noble Lord, Lord Gallacher, the sort of
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inquiry which it carries out into the efficacy, or otherwise, of the nationalised industries could be carried out by any one of a large number of very efficiently organised consultants. The job could be put out to tender, and it could be done quite adequately by those people. The monopolies and mergers resources could be reserved for the special type of work which could not, of course, be put outside government organisations.
There is the question of what happens in the case of a bid when a referral is made about one of the parties involved and another bidder is left free to proceed. It seems wrong that that should be possible. If the inquiry by the Monopolies and Mergers Commission could be speeded up, it would not be unreasonable for the situation to be frozen while the inquiry took place so that at the end of the inquiry it would be clear what was the outcome of the referral.
The noble Lord, Lord Bruce-Gardyne, who will speak in a moment, also raised some very interesting issues about the onus of proof and whether the onus of proof as to the public implications of a bid should not be transferred to the bidder. I think that here, too, one might have a very careful inquiry.
Let me turn next and finally to the financial services which are presently being considered. The Financial Services Bill is going through its Committee stage in another place and will shortly be coming to your Lordships' House. We shall have a whole panoply of new regulatory bodies. I hope that they will be as simple as possible and clearly defined in their operation; but that remains to be debated. What is relevant to our discussion tonight is the relationship which that new grouping of regulatory bodies will have with the Office of Fair Trading. I believe that that is another aspect which needs to be gone into pretty thoroughly when the Secretary of State conducts his inquiry.
I hope that this inquiry—I fully support the intentions behind it—will roam wide over this field which has changed very considerably since the last inquiry was held in 1978. I hope that as result of it, we shall have a system which links together the various bodies which are in the process of being set up at the moment to deal with various aspects of competition, and that we will be provided with a system which is comprehensible, reasonably flexible and fair.
9.35 p.m.
Lord Sanderson of Bowden: My Lords, at the outset I feel bound to take issue with the inference in the Question asked by the noble Lord, Lord Hacking, that the Government's present policies and arrangements on takeovers are unfair or incoherent, except perhaps to say, as far as unfairness is concerned, that the timing problem raised by the noble Lord, Lord Ezra, just now, and by the noble Lord, Lord Hacking, deserves a lot of inquiry when the inquiry gets down to business.
It seems to me that the policies at the moment are neither unfair nor incoherent. The present policies were formulated by the then Secretary of State for Trade and Industry in July 1984 and reaffirmed by my noble friend Lord Lucas of Chilworth as recently as 10th March here in your Lordships' House. They seem perfectly fair, coherent and easy to understand by all parties concerned in a takeover bid or merger.

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I can tell your Lordships that a few years ago I myself had to go before the Monopolies and Mergers Commission. I know only too well that the drill is understood, but it takes a long time and a lot of work is involved, which is very upsetting, particularly to smaller companies which have to go before the Monopolies and Mergers Commission. There are already adequate safeguards in place for most situations. There is a review in the first instance by the Office of Fair Trading, which reports its findings to the Secretary of State, who may then decide to refer the matter to the Monopolies and Mergers Commission.
However, we now live in the days of so-called mega-bids and we read of private detectives and dirty tricks; our newspapers are full of what can only be described as knocking-copy advertisements. None of these things, I hasten to add, is unlawful, but some may feel as I do that they are of doubtful ethics. So in these circumstances there are grounds for a review of the present policies and attitudes and, as I understand it, the review which is about to take place and which is promised for later this year will sort out a lot of the problems and should be debated by all interested parties.
But the main points that I should like to make are these. It seems to me that the Government's present policies on takeovers are fair and workable in most aspects, though there are perhaps some areas for relaxation and increased flexibility. The noble Lord, Lord Hacking, asked whether the present policy is fair, but is it not true to say that if, in the name of fairness, any or all bids for a company were referred as a matter of course, then it could become a standard defence for any target company? The target would simply find a suitable and amenable friend with a similar product base to make a false or friendly bid qualifying for referral, thus excluding the more serious bidder, perhaps to the detriment of the target company, its workforce, its shareholders and, in the final analysis, the national economy—which brings me to my next point.
Are takeovers beneficial to the nation and to the economy as a whole? If the answer is yes, I would ask your Lordships to consider the two most common kinds of takeover; that which is little more than a marriage of convenience and that which will revitalise or re-energise a complacent company which is merely drifting along.
The first example is this. In such a merger, neither partner seriously believes that it can improve the actual performance in any dramatic way. They are merely pooling resources with the hope of eventual world domination in their product; in other words, they are deliberately trying to create a monopoly. Their argument is that bigger is not only better but best. Monolithic monopolies will argue that like should join like without regard for the differences in quality, cost and market penetrations of their products.
We have a classic example in the shape of British Leyland. Here we had several profitable manufacturers of different types of vehicles which were amalgamated and, as we all know, have been struggling ever since. What of the marriage of Dunlop and Pirelli whose dreams of world domination in
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rubber-related products nearly brought them to their knees? It is only under the sound and considered management of BTR over the past year, an industrial management company not previously known for its expertise in rubber products, that Dunlop is now recovering and enjoying a new lease of life, which in places like Barnsley, where a factory which was just about closing is now doing extremely well, is very obvious.
Let us take the second example, the so-called hostile or contested takeover. In this instance, one company perceives that another company is under-performing and would do better with new and more vigorous management. It believes that with its own particular brand of knowledge and expertise it can revitalise both boardroom and line managers alike who through a complacent lack of motivation have become set in their ways and sluggish in their methods. The bidder believes that its expertise can maximise the target's assets and heighten performance for the benefit of employees, shareholders and local communities alike. There may be no product match but there are sound management principles which will ultimately benefit everyone, including the nation and the economy.
Perhaps I may summarise the position as I see it. I must concede that there may be some case for a review, and I think it is proper that the public interest policy should be carefully re-examined. The market framework rewards efficiency and makes incompetent management vulnerable. This serves everyone well. Such regulation as is necessary must be clear, fair and strong. It is important that information is made equally available to all shareholders. It is wrong that the Office of Fair Trading procedures can be steered round and loopholes sought out by sharp practitioners. It is essential that the role of the merchant banks in the takeovers of these mega-bids should be carefully examined.
We should also clarify those policies on mergers which do not compare favourably with other countries and contain many ambiguities which foreign investors may not understand and which may impede their much-needed investment in the future of this country. Industrial investment these days crosses most national boundaries at will. That is why we see a larger investment now by British companies in the United States of America than the other way round. I look forward to hearing the results of the review that is about to take place, which I believe is very essential for the future wellbeing of the competition policy of the Government.
9.43 p.m.
Lord Bruce-Gardyne: My Lords, I should like to join other noble Lords who have welcomed the debate which the noble Lord, Lord Hacking, has initiated this evening, for although we discussed these matters only a few short weeks ago, we live in fast-changing times and a fast-evolving climate. Like my noble friend Lord Sanderson, I think that the wording of the noble Lord's Question is a little astringent towards the Government. For precisely the reasons which my noble friend has advanced, I have doubts about the possible consequences of, as the noble Lord, Lord Hacking, suggested, putting contested bids on freeze. I am not as convinced as the noble Lord, Lord Hacking, seemed to be, and indeed the noble Lord, Lord Ezra, too, about

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the undesirability of referring bids under circumstances which appear to take little notice of the international environment.
It seems to me that the essential consideration for the MMC can quite legitimately be the impact on domestic competition. The MMC itself is of course empowered to approve a takeover. Indeed, it has frequently done so, notwithstanding the resultant large market share in the United Kingdom, precisely on the grounds of the international market place and the degree of international competition. I do not see that the existence of the international market place and international competition should be regarded, as the noble Lord, Lord Hacking, almost seemed to be suggesting, as a good and sufficient reason for waving a particular takeover proposition through.
I, like my noble friend Lord Sanderson, would not indict the Government's present policy on those matters on the grounds either of unfairness or of lack of coherence. I am less sure about that policy's appropriateness under present circumstances. I listened with great interest to the response of my noble friend Lord Brabazon to the previous debate, to which there have been several references made. I looked at it again in preparation for tonight's discussion. I must admit that my noble friend was conceivably slightly complacent. He put forward essentially three propositions in support of the Government's attitude to takeovers and mergers as it currently stands.
The first was that it had the advantage of stability and predictability, which the markets like. On the whole, I would be prepared to accept that argument, although one must always remember that there is only perfect tranquility in the grave. My noble friend pointed out also that there was a substantially smaller volume of takeovers currently, although we were occasionally staggered by the mega-bids that sometimes follow each other from day to day. He stated that there was a somewhat smaller volume of takeovers and acquisitions occurring now than in 1972. I am bound to recall that the sequel to that large rash of acquisitions was not entirely happy.
Thirdly, my noble friend pointed out that it was appropriate to assume under normal circumstances that the shareholders would know best. I would agree with that if it were the shareholders who were essentially taking the decisions. Nowadays, however, the decisions are essentially taken by investment managers, who are in loco parentis for the shareholders. Very small numbers of them determine the fate of massive bids, and I sometimes feel that they are open occasionally to somewhat dubious influences.
Here I turn to the role of the financial intermediaries, to which reference has already been made. I noticed that the other day Sir Gordon Borne wondered about the problems arising from what he termed the steady drip of encouragement and over-encouragement to borrow from so many quarters. He was referring to the competition for our custom from the building societies, banks, and now, even the "Pru" in consumer lending.
I sometimes wonder whether there is not a similar and possibly dangerous pressure building up in the corporate sector. Tonight there has been reference
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made to the whole business of leverage bids. We are reaching a condition where some of the merchant banks are almost appearing to play in the role of what are know as "ambulance chasers"' among the learned attorneys of the United States. Such people go to a possible punter in the bids scene and say: "We have a marvellous suggestion for you to take over Amalgamated International. If it is successful, we shall charge you only £1 million for our fees. If it is unsuccessful, we shall charge you only £½ million. In any case, with luck we will persuade United International to foot the bill". It seems to me we have the financial intermediaries playing the role of innovator and sponsor to an extent which must be open to question.
More fundamentally—and we discussed this issue to some extent on the earlier occasion in January—to my mind it is not primarily the question of whether Argyll makes a better suitor for Distillers than Guinness or whether Hanson makes a better suitor for Imperial than United Biscuits which should be worrying us. It is whether in any of these cases it is necessarily logical to assume that the sum will be greater than the separate parts. However much the management of the Imperial Group may protest, I do not think it has convinced anyone very much that it is keen to fly into the arms of United Biscuits out of a sense of mutual admiration so much as out of a sense of mutual fear. That is the climate in which, to my mind, increasingly corporate decision-making is being impelled to take place.
In his Budget Statement my right honourable friend the Chancellor suggested, I think, that one of the expectations of enchanced future employment should stem from the acquisition of a larger market share both at home and abroad by British businesses, encouraged by the considerable fall in the exchange rate against the deutschemark and the yen. I wish him well in that and I should like to hope for the best, but the fact is that the management of a corporate quoted company, with predators lurking round the door, is going to find it very hard to opt for a larger market share, whether at home or abroad, and the consequent potential employment increase that might follow therefrom, when the alternative of a larger margin is the one, and the only one, that is likely to keep the predator away. That is why I must say I still feel that we are perhaps too complacent in our attitude towards the great merger boom when one considers the impact that it is liable to have on corporate management motivation.
I made clear during our previous debate, and the noble Lord, Lord Ezra, was kind enough to refer to this, that I have for long felt that there is at least a case to be examined for switching the onus of proof in these situations from the Little Red Riding Hoods defending their independence to the wolves to defend their justification for making a meal. I still hold that view. I hope, at least, that the review which is proceeding in my noble friend's department will embrace that consideration and also, as other noble Lords have already suggested, the somewhat exotic role which the banking system and the financial intermediaries apparently play in the market-place today.
9.54 p.m.
Lord Bruce of Donington: My Lords, it would seem that I have read an almost totally different subject for

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debate from the text of this Motion than has so far been discussed in your Lordships' House. The Question reads:
"To ask Her Majesty's Government whether they will, as a matter of urgency, establish a fair and coherent competition policy to operate in the interests of the British economy and of British industries at home and abroad".
I have no doubt that the noble Lord, Lord Lucas of Chilworth, will be able to reply to the somewhat specialist contributions, if I may call them that, that have been made in your Lordships' House this evening. If I may say so they were highly skilled and informed contributions, but they dealt essentially with a very restricted part of the whole economic picture of this country.
Personally speaking, I should have preferred to discuss questions of takeovers and mergers and matters of that sort within the wider context of the Bill on financial services that will shortly come before your Lordships' House, or, in a more specialised sense as applied to a particular monopoly industry, when the gas privatisation Bill arrives in your Lordships' House for detailed consideration.
Therefore, with your Lordships' permission, I propose to range a good deal wider than the terms of the highly skilled speeches that have been made to your Lordships tonight, which dealt with matters affecting primarily the City: questions of who is the predator, which powerful interest will take over another more or less powerful interest, whether there is leverage finance which is solicited or otherwise, and whether, if it is leverage, it will lead to asset stripping in order to pay off the original loans from which the finance was derived. These are very important questions and the Government have undoubtedly devised certain rules in order to deal with them. I prefer not to go into details about any of these particular matters, which are highly specialised and which affect the City in particular and those with very powerful financial resources who, if I may say so, are somewhat remote from the ordinary people who form the great bulk of the population of the United Kingdom.
I therefore propose to touch on competition policy in a much wider context, where these matters simply represent the froth on top of the underlying trends with which I propose to deal. The Question asked the Government to enunciate a fair and coherent competition policy. Of course, there is no coherent competition policy at all. In broad general economic terms the policy of the Government is to leave everything to market forces and to allow firms to compete. That determines the whole level of the economy, including the prices at which people may buy, the level of employment, the extent to which our exports are acceptable abroad and the extent to which there is or is not a flood of imports.
What the Government have by way of competition policy is policy by declamation. I am quite sure that the noble Lord will confirm that the policy consists in having to be more competitive. That is really the entire essence of the Government's policy. Time after time we are told that the nation has to produce at prices that are competitive—particularly for its manufactured goods, as we all well know—in order that we can pay our way in the world.
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This is the ostensible policy—nothing more—uttered with ever-increasing emphasis by the Prime Minister in the substitute for any coherent industrial policy: "We have to be more competitive". Indeed, in elaboration of that, we had from the Chancellor of the Exchequer, in the course of his Budget speech, the fact that unit labour costs were continuing to rise and that the greed—he had the impertinence to use the word "greed"—of the wage-earner was lying at the base of not being able to tackle unemployment effectively—greed!, when greed is the main motive force behind these massive moves within the City by people who have thousands of millions at their disposal and want to have further aggrandisement and increase their power.
I want therefore this evening, if I may, to deal clinically with the whole question of competitiveness. As I see it, competitiveness is being able to supply goods and services at prices—I emphasise the word "prices"—which find a ready market, either at home or abroad. I take it that I will carry your Lordships with me in that simple proposition.
May I take your Lordships a little further? The price is essentially made up of cost and profit. There can be little argument about that. The cost is automatically reflected in unit labour costs; costs per article, costs per job, costs per batch—whatever it may be. Unit labour cost in itself is comprised of a number of items. There are the wages paid; the factory on-costs; the variable overheads and the fixed overheads. Included in the factory on-costs must be the amount of depreciation of the plant and machinery and, if it is prudent, replacement.
It is immediately clear, therefore, that when unit labour costs are referred to, the extent of the true wage content of unit labour costs is very much dependent on the machinery and plant for which labour is applied to produce the article. Perhaps I may say straight away (and your Lordships will agree with me) that if, for example, an employee is paid 100p to punch 100 holes in separate pieces of metal with a machine that will punch one hole at a time, then there is a cost of 1p. If, however, instead of being able to punch one hole that machine punches two, then the productivity goes up and the unit labour cost goes down and is in fact halved.
Therefore, when the Government refer, as they do, to the necessity to reduce unit labour costs in order that our goods may be priced more effectively, more competitively, they must admit (but they do not say) that the extent of investment in plant and machinery upon which labour is required to work for its wage is a very vital factor indeed in determining unit labour cost. Over the past seven years—seven years following upon the advent of this Government—investment in manufacturing industry is still 18 per cent. below what it was in 1979. Small wonder, then, that there is continued complaint about unit labour costs rising!
What is never said is that the reason for that lies not merely in the level of wages to which the Chancellor of the Exchequer is unscrupulous enough to give his continued attention and emphasis, for the sake of his admiring fellow Members of Parliament, but also that the level of British competitiveness is in part a reflection of the gross under-investment in British

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manufacturing industry that has occurred in the past seven years. Indeed, whatever figures the noble Lord, Lord Young of Graffham, may selectively produce covering a convenient two or three-year period since 1982 or since 1983, the fact is that wage levels as such in the United Kingdom are still below those in Germany, in Italy and in France. To blame the lack of competitiveness upon the wage levels of this country—the wages paid to the ordinary people in the little streets of Britain—is entirely unscrupulous and unworthy of people who carry out any intelligent research into the facts.
What is not realised is this. I come back to my original statement of price being a combination of cost and profit. I have already dealt with costs in terms of unit labour costs. What is not mentioned, although it is boasted about by the party opposite within a different context, is that profits have gone up by between 30 and 40 per cent. over the past three or four years. Things are extremely prosperous. And profits together with costs are the determinants of prices. It is wise, I believe, to clear up the point clinically, clearly and beyond any doubt so that we can avoid in future blaming the level of the wages of the ordinary individual in this country as the reason for British goods proving uncompetitive abroad.
There is another reason, too. It lies in the exchange rate. The Government now accept, although they do not formally admit it—save indirectly—that the forcing up of the exchange rate in this country to a point where the dollar in November 1980 stood at 2·45 dollars to the pound following the absurd rise in interest rates that took place in the previous year—the daftest step undertaken by any Chancellor of the Exchequer for about the past 100 years; a really idiotic effort combined with the abolition of exchange control—meant that competitiveness in terms of competitive price, expressed in overseas currencies, made exports virtually impossible save in extremely exclusive goods, in respect of quality, delivery and anything else.
Lord Bruce-Gardyne: My Lords, will the noble Lord give way?
Lord Bruce of Donington: My Lords, I shall give way in a moment. I wish to complete this point.
This was so much so that in the five or six years to the end of 1985 there were 106,590 bankruptcies and liquidations in the United Kingdom, 71,000 of those being companies. The current rate in January 1986 is still maintained at about a level of 21,000 bankruptcies and liquidations a year. These are all matters which have an impact on competitors. I shall now give way to the noble Lord.
Lord Bruce-Gardyne: My Lords, I wondered whether the noble Lord could explain to the House his references to exchange rate policy in 1979. Are we to understand that had exchange controls been retained it is the judgment of the noble Lord that the exchange rate would not have risen so far or as fast as it did? Are we also to understand that something like the 25 per cent. appreciation in the sterling/dollar exchange rate which occurred before May 1979 was attributable to
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the expectation of a rise in interest rates under the Government which took office in May 1979? I am not altogether clear about either of those two points.
Lord Bruce of Donington: My Lords, I am very pleased to answer the noble Lord. I think that the removal of exchange controls in itself was not such a valid factor. What I am concerned with—and what was clearly revealed in evidence before the Select Committee of your Lordships' House—is the very substantial rise of interest rates from 12 per cent. in May 1979 to around 17½ per cent. later on in that year which caused an influx of money into this country that had to be re-lent. The influx itself, together with the growing production of North Sea oil, helped to force up that rate of exchange to an unacceptable height. That very severely inhibited our competitiveness. Moreover, it had its side effects in the United Kingdom. From the point of view of the Chancellor of the Exchequer it was extremely advantageous because the rate of exchange encouraged imports into this country at a price with which it was virtually impossible for many manufacturing firms in the United Kingdom to compete. Hence there was the spate of bankruptcies and liquidations at that time.
If any noble Lord cares to argue against that, or against any of these propositions, he has only to refer to the Select Committee Report on Overseas Trade which was recently debated in your Lordships' House. It is there amply documented.
I raise the point simply on the basis of being competitive and having competitive prices abroad. I seek to lay once and for all the allegation that it is wage rates in this country which are responsible for British goods being uncompetitive in overseas markets. Indeed, it is somewhat obscene in many ways that those people in the City of London—the big cohorts who are busily giving themselves rises in salaries of 20 per cent. and 30 per cent.—have the audacity to refer to the extremely minor rise in real wages which has taken place in this country over these years. It is 17 per cent. in real terms since 1979 we were told, somewhat boastfully but in a different context, by the Financial Secretary speaking in another place last night.
Competitiveness is supposed to be a virtue. So long as everything is left to market forces and to competition and to price, this is the answer to the problem. The difficulty for the Government is that they cannot reconcile these policies as being universally applicable.
I shall put this one point to the noble Lord because I do not want to detain him or the House very much longer. If competition is such a virtue, why is it not applied in the agricultural sector? It is alleged that Government subsidy, help, and co-operation somehow corrupt any industry which they touch. The farming industry in the United Kingdom has received aid equivalent to £50 billion in 25 years. It is subsidised very largely at the expense of the consumer but to the extent of £1 billion by the Government themselves, and it has achieved increases in productivity of 67 per cent. in those years.
It seems that the Government are two-faced about this. If competition and the weakest go to the wall with the devil taking the hindmost is really the correct

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philosophy for Britain, if that is the way in which the whole of the economy may be salvaged, why is it not practised here? Why does agriculture not have the benefit of this wisdom? The answer is that the Government are two-faced about it.
So far as concerns the shire counties, from which the bulk of the Government's political support comes, it is quite in order to give massive aid through the common agricultural policy itself, which costs this country roughly £1 billion per annum anyway, while other areas are exposed to free competition. However, there is no free competition for agriculture. There is no question of over-production there; there is no question of the over-capacity which they talk about in the steel industry and in various other industries. All that happens is that everything it produces is sold into intervention at a price which is already fixed, whether or not there is any demand for it whatever. Therefore, in this respect the Government suffer from a political schizophrenia.
We require from the Government an intelligent and coherent policy; one that stands up to the needs of the country. If the Government can enunciate a constructive policy, if they can enunciate a consistent policy as regards agriculture, which employs 2 per cent. of the population, as against industry and the services which supply the remainder, the House and the nation will be greatly obliged. I wish the noble Lord luck in enunciating it.
10.17 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, luck I do not need! What I need in your Lordships' House when I am answering the noble Lord, Lord Bruce of Donington, is a reasonableness in attending to the facts that lie before us. I feel quite sure that the noble Lord opposite will give me that tonight.
I was a little sorry that the noble Lord, Lord Hacking, in his Question on 10th March drew particular attention to a number of specific issues in connection with mergers, which I answered in part at col. 397 of Hansard of that date. I am sorry to tell the noble Lord—and I mean this quite sincerely—that apart from some generalisation to which I shall refer a little later, I can add nothing to that which I said on that date.
Vigorous competition in the world market-place is by far the most effective means yet devised to ensure that prices are kept down, that businesses are run efficiently, that the advances of science and technology are incorporated in innovative products which are offered in the market-place, and that consumers, whether they be prime consumers or ultimate consumers, obtain the products that they want from as wide a choice as is available to them.
The underlying objective of competition policy is to contribute towards those goals by fostering vigorous competition wherever possible. In that, I agree totally with the noble Lord, Lord Bruce of Donington, because (and he will forgive me for saying so) I thought that that was the most honest part of his speech tonight. Very much later he went on to invite me to
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agree to the simple proposition that prices were the real element in competition within the context in which I am quite sure we are both speaking. No, not price alone, and he well knows it, because quality comes into it. I shall return to the noble Lord's point if I have time about unit costs, but quality and competition go hand and hand and price is not the only factor to be considered.
If I may borrow the words of the noble Lord, Lord Hacking, in his Question, I agree that we need:
"a fair and coherent competition policy to operate in the interests of the British economy and of British industries at home and abroad".
I think though that I should have preferred to say that the policy should operate in the interests of British industry and commerce at home and abroad and of British consumers. I return again to the point I have just made, that a consumer can well be the buyer of the raw product as well as the manufactured item. Where I part company with the noble Lord is in his suggestion—and of course some noble Lords this evening will not be surprised that I do part company here—that we need to establish such a policy. I do not claim that existing policy is perfect in every possible respect. I do not claim that it is not capable of further improvement. But I claim that we have a policy which is fair and coherent and which, on the whole, has served the economy well.
The noble Lord, Lord Bruce of Donington, widened the discussion quite considerably, and I am grateful to him for that, but I am certainly not going to enter into any discussion with him tonight about agricultural policy. What I would say is that while the noble Lord opposite has widened it a little extravagantly, the noble Lord, Lord Hacking, has been a little too narrow in his dealing with the Question he has put down. I believe that for a debate of this nature there has been too much talk of mergers policy. I understand the reason for that. There is no denying, as my noble friend Lord Brabazon of Tara said a couple of months ago, that we are experiencing a peak of merger activity.
I think though that it is worth reminding your Lordships that the current level of merger activity falls way short of the peak reached in the early 1970s, but of course mergers dominate the financial pages of the press other than, if I may say so this evening, the news which every newspaper carried on its front page today, that of the engagement of His Royal Highness and Miss Ferguson. This was, I am quite sure we would all agree, delightful. We wish both these young people much happiness in the future. When I saw this on my return from East Germany this morning, what a welcome relief it was from some of the headlines that have dominated our press in the last few weeks.
Having said that, let me return to the subject of our debate. Of course news of mergers dominates the press, and of course government decisions in relation to them also attract attention. But the question before us this evening is about competition policy as a whole; about the need for a coherent policy. This takes us far wide of the merger field. It takes us into unsung areas where nevertheless much valuable work is being done. I trust that the House will allow me for a few moments to range a little wide of the points of the noble Lord, Lord Hacking, because I need to demonstrate, having answered three Questions in your Lordships' House

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over the last three months, that we have that coherent policy which some noble Lords complain that we do not.
A key objective of competition policy as a whole is to prevent unwelcome distortions which can arise when a firm abuses a dominant position in a market. One way in which firms can acquire dominant market positions is by merger, and our mergers policy provides a way of dealing with this. I will return to that point shortly. But, equally important, we have powers to act against the monopolistic practices of companies already in a dominant position in the market and against the practices of companies who seek to reduce or to eliminate competition. In the normal course, it is the Director General of Fair Trading who initiates investigations into these questions under the provisions of the Fair Trading Act and the anticompetitive practice provisions of the Competition Act 1980.
There has been a steady stream of investigations under these powers. In some cases, the commission has found no detriments to the public interest. In others, the director general has identified ways in which firms have abused their positions and whether business has been affected as far as customers or consumers are concerned. In many cases, appropriate undertakings have been negotiated by the Office of Fair Trading and conscientiously put into effect by the companies which have been in discussion with him.
The other major plank of our competition policy is the restrictive trade practices legislation. It would be wrong of me at this late hour to go into full details. The essence of this legislation is the control of cartels; its particular targets are price fixing and market sharing agreements and other collusive arrangements. This has worked, particularly in the service sector agreements which have been embraced by the 1976 legislation. This has been done by a process of negotiation with the parties and has resulted in a modification of their attitudes. In this field, as in the field of monopolies and anti-competitive practices, there is a steady level of painstaking activity at the Office of Fair Trading which is, if I may say so, making a very worthwhile contribution to the maintenance of fair competition—and I underline the word "fair"—in the United Kingdom. Frankly, I pay tribute to the work which is done in this field by the Director General of Fair Trading and his staff.
The noble Lord, Lord Ezra, and my noble friend Lord Bruce-Gardyne, raised the point which I think was contained in the Director General of Fair Trading's speech a short while ago when he was describing some of the influences that had been brought to bear on him, some of the effects of his decisions and some of the ways in which the Office of Fair Trading might move. He has been in charge of the day-to-day implementation of the Act, and it is not surprising to me, anyway, that he should not give views as to how this might be improved. Let me say directly to the noble Lord, Lord Ezra, who I think really raised this particular point that, as Sir Gordon rightly says, the Government will be taking proper account of, and will give consideration to, the issues he raised.
I said that I would return to the point about mergers, which was essentially the noble Lord's main thrust in
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opening this debate this evening, which, as he said, is timely. I do not think that I should expand overly in detail about our general policy so far as mergers are concerned because I think that is well known. It was ably set out to your Lordships by my noble friend Lord Brabazon of Tara less than two months ago.
At its briefest, the policy is that references to the Monopolies and Mergers Commission are made primarily, though not exclusively, on competition grounds, and in assessing the situation in a particular case the Government take into account the international dimension. Again, the noble Lord, Lord Hacking, and the noble Lord, Lord Ezra, referred to what I might describe as an even-handedness of approach in these matters. Some of your Lordships may believe—and I recall debates in your Lordships' House earlier—that even-handedness requires that either both bids or neither must be referred in such cases. I naturally accept the case for even-handedness, if by that is meant that each case is considered in an impartial manner, taking into account all the relevant circumstances, including the existence of a competing bid where there is one.
In this sense, my right honourable friend the Secretary of State for Trade and Industry has certainly demonstrated an even-handedness of approach. But would it be right to take even-handedness to the extreme of suggesting that whenever there are competing bids they must either both be referred, or neither? In fact, we frequently have the situation where no two competing bids are the same: they invariably differ very widely in the range of public interest considerations to which they give rise. For example, one may have clear implications for the degree of competition in a significant part of the United Kingdom market, while the other may have no such implications but an alternative. It would be quite wrong to treat each in an identical manner because if that were done the treatment would be quite arbitrary and would lead to absurd results.
I want to touch very briefly on the international dimension. In assessing the competitive situation in a particular case, we take into account the extent of competition in the home market from United Kingdom sources as well as from non-United Kingdom sources. For example, in a market in which the competition from non-United Kingdom sources was particularly strong, we would take a less serious view than in other circumstances of a merger which increased the concentration of United Kingdom producers. Similarly, if there were a clear and undisputed case that a proposed merger would enhance the competitive position of United Kingdom companies in overseas markets, this would be a factor to be weighed in our consideration.
The matter is essentially one of judgment, of weighing a range of factors and reaching a balanced decision. This means inevitably that a decision in any particular case can be finely balanced and open to argument. What is not open to argument, I suggest, is that in all recent controversial cases where it has been relevant, the international dimension of competition has been carefully taken into account, along with all the other relevant circumstances, before a decision was reached.

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The noble Lord, Lord Hacking, raised in particular the leveraged takeover bid. I just want to say this to the noble Lord. He was kind enough to write to me, and I thank him for that. He knows that we do not agree. I think it would be important to tell him essentially why, on his main point, we do not agree. The Elders bid for Allied-Lyons was referred to the commission precisely because its method of financing raised potential public interest issues. My noble friend Lord Bruce-Gardyne mentioned that in his contribution. On the other hand, the financing of the Argyll bid for Distillers turned out on examination to be very much more conventional. My right honourable friend took the view that public interest issues were not raised in that case.
Let me give an assurance to the noble Lord that we are keenly aware of the issues that are raised by virtue of his Question and we shall, of course, take that aspect into account in our consideration. My noble friend Lord Sanderson, in what I must say was a speech that was helpful to me anyway, raised one or two interesting points. He spoke about what I translate as some of the dirty tricks that the City is perhaps up to, or put in a kinder way, some of the devices that the City is now using. As he knows, procedures are available under the law for illegal practices.
Merchant bankers' activities have been subject to recent changes by the Bank of England as well as the Stock Exchange. I do not wish to dodge the issue that the noble Lord, Lord Bruce of Donington, raised, but we shall have an opportunity to discuss those wider issues when the Financial Services Bill comes to your Lordships' House.
If your Lordships will allow me, I want to touch for two or three moments on a couple of the points that the noble Lord, Lord Bruce of Donington, made. I always like discussing matters with him. He asked in his speech whether we were going to allow the devil to take the hindmost. I find it odd that he should ask me that as he has picked up the devil and thrown him at me. I pick up the tail and throw it right back at him, because he talked to me about unit labour costs. How can he ask me that in a debate of this kind? I ask him: what about the print unions, which insist upon still being hired to do jobs which do not exist, and which will not allow natural competition and the evolution of technology to move forward to advance their members' careers and jobs and the betterment of the newspaper industry? He talks to me about unit labour costs! I shall certainly give way, but he should not think that I have finished with the matter because I will not allow him to get away with that tonight or any other night.
Lord Bruce of Donington: My Lords, I am most grateful for the noble Lord's vigour in replying to that
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point. With the permission of the House, may I point out to him that I was merely giving a technical analysis? That is all. What I want from the noble Lord, if he can be constrained to give it to me, is any dissent he may feel from the technical analysis that I gave, without for one moment discussing its implications for the printers or, indeed, anyone else.
Lord Lucas of Chilworth: My Lords, if the noble Lord would provide a technical analysis instead of making a political attack, I should be delighted to deal with it, because in the earlier part of his speech he spoke about the greed—I think that he spoke of the City and other issues—that was demonstrated and fortified by the speech of my right honourable friend the Chancellor of the Exchequer in another place last night. My noble friend opposite has worked extremely hard and we have been right through Hansard between the two of us, but there is no mention whatsoever of greed. So I ask the noble Lord not to tell me things like that in a debate of this kind.
I do not think that I can offer anything more in setting out the Government's policies. I suggest that the existing range of instruments available to regulate competition adds up to a coherent whole. I admit that the policy is not perfect. Indeed, my noble friend Lord Bruce-Gardyne asked me about the onus of proof. Yes, I take his point and certainly that is something which we ought to consider a little later. But our policy adds up to one of fairness.
I said earlier that the policy is not perhaps perfect and it is right that it should be subject to review. I have told the House on a number of occasions that my right honourable friend the Secretary of State intends to announce the terms of reference of a review of competition law and policy later this year. But I again say to your Lordships that the existing policy provides a sound basis for action in dealing with the many threats which can, and do, arise to the efficient operation of a competitive market, whether from restrictive agreements between firms, from abuse of existing monopoly positions or from proposed mergers which may create dominant positions. I believe I have demonstrated this evening that we have a policy and that it is a coherent policy. I admit that it has gaps and we hope to plug those gaps as a result of our review. I give that assurance.

Bournemouth-Swanage Motor Road and Ferry Bill [H.L.]
Committed to a Select Committee.
House adjourned at eighteen minutes before eleven o'clock.