Lords Sitting of 26 November 1986

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Hereford.

Terrorist Demands: Policy
Lord Paget of Northampton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask whether it is still the policy of Her Majesty's Government to deny to kidnappers arid terrorists the hope of obtaining ransoms or the release of fellow terrorists sentenced by the courts or the use of media to advertise their policy; and if so whether they will state their attitude to the activities of the Archbishop of Canterbury, and of his personal representative Mr. Terry Waite.
The Minister of State, Home Office (The Earl of Caithness): My Lords, it remains the Government's policy to make no substantive concessions to demands made by terrorists. The most reverend Primate and his representative, Mr. Terry Waite, act independently of governments. We welcome what Mr. Waite has achieved in his missions to secure the release of hostages. Mr. Waite is well aware of the principles on which the Government's policy towards hostage cases is based.
Lord Paget of Northampton: My Lords, are Her Majesty's Government aware of what is going on concerning this matter or are they in the same position as the President of America? Nobody seems to be told what is happening on these occasions. Apparently we have the Archbishop's emissary going off, and coming back with a hostage whose release, we heard at that point, was secured; but apparently he seems to have been bought for a Guinness Book of Records price for hostages in what he appears to have cost. When do we come into the story?
The Earl of Caithness: My Lords, I can assure the noble Lord that we certainly know what we are doing. I have no doubt that Mr. Terry Waite knows what he is doing, but he acts totally independently from the Government, which is only right considering that he is the representative of the most reverend Primate.
The Lord Bishop of Hereford: My Lords, are Her Majesty's Government aware that the appeal for assistance to Mr. Waite to obtain the release of hostages from Beirut came to the Archbishop of Canterbury at the request of the churches in the Middle East and the Presbyterian Church of America? Further, is the noble Earl aware that appeals for help to the Archbishop of Canterbury are arranged through the extensive ecumenical and inter-faith network, of which the Anglican Church is a part?
The Earl of Caithness: My Lords, I am grateful to the right reverend Prelate, and indeed I welcome once again what Mr. Waite has managed to achieve. It is most notable that, acting totally independently of the Government, he has done this. Indeed, the success of his missions depends on that independence.
Lord Cledwyn of Penrhos: My Lords, is the noble Earl aware that we, or the great majority of us, on this side of the House admire the selfless, courageous, patient and modest way in which Mr. Terry Waite carries out these difficult tasks?
The Earl of Caithness: My Lords, I am most grateful to the noble Lord the Leader of the Opposition, and I fully concur with his sentiments.
Lord Paget of Northampton: My Lords, even if one concurs with all the encomiums of the Leader of the Opposition, I am bound to say that it astonishes me to hear that the Government approve of what he has done. He has gone around—
Noble Lords: Question!
Lord Paget of Northampton: My Lords, has he not gone around at the request of kidnappers and provided them with admirable publicity and a deal? Is not that the very thing that the Government do not want done with kidnappers?
The Earl of Caithness: My Lords, I believe that we all respect what Mr. Waite has achieved in difficult circumstances, and I believe also that he is to be congratulated on what he has done.

Firearms and Ammunition Amnesty
2.40 p.m.
Lord Allen of Abbeydale: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have any plans for an amnesty for firearms and ammunition.
The Earl of Caithness: My Lords, we are considering the matter closely in conjunction with the Association of Chief Police Officers.
Lord Allen of Abbeydale: My Lords, in thanking the noble Earl for that Answer I am tempted to congratulate the Government on the alacrity with which they have followed up the idea set out in this Question, but I suppose that it is conceivable that by coincidence they were already thinking about the possibility. Even if an amnesty were not to achieve the results of the last one held 18 years ago, when some 25,000 guns were handed in, is it not worthwhile doing anything which might result in some reduction of the number of guns lying around waiting to be burgled and added to a flourishing black market?
The Earl of Caithness: My Lords, it is for that reason, among others, that we are urgently considering the matter. But I am sure that the noble Lord will need no reminding from me that it is not only guns with which we are concerned, but ammunition. In 1968, in addition to the 25,000 or so firearms that the noble Lord mentioned, there were something like 795,162 rounds of ammunition surrendered.
Lord Mishcon: My Lords, while congratulating the Minister on the precise figures that he has given, including the one round of ammunition at the end—or the two rounds of ammunition at the end—may I ask him what are the main disadvantages that the Government see in granting this amnesty?
The Earl of Caithness: My Lords, one of the difficulties that we are looking at is that it has been the usual practice in the past to couple an amnesty with legislation, which was the case in 1961, 1965, and 1968.
Lord Harris of Greenwich: My Lords, may I ask the noble Earl when he expects to announce a decision on this matter? May I also ask him whether he recalls the statement made by his predecessor, that the Government were looking urgently into the question of tightening up the provisions relating to the custody of firearms in people's houses, and in creating a requirement that people who have a licence should look after their shotguns? May I also ask why, after many months of being told by Ministers that they are looking at this matter urgently, there has still been no action?
The Earl of Caithness: My Lords, with regard to shotguns, the police and shotgun users agree that the storage of these weapons is important in keeping them out of the hands of criminals. We are in touch with the British Shooting Sports Council about the introduction of a statutory safe-keeping requirement, but no decision has yet been reached.
Lord Harmar-Nicholls: My Lords, as far as revolvers are concerned, is not the main need to know where they are and who has them? At the moment the cost of a firearms certificate for a revolver kept for sentimental or other reasons has been set very high at £33 or more. Does it not discourage people who would otherwise apply for a licence, so that the officials would know where they are, to keep the certificate at that figure? Ought it not to be set at a reasonable level, which would encourage people to disclose their firearms and their ammunition?
The Earl of Caithness: My Lords, it can be argued whether or not the fee for the firearms certificate for Section 1 firearms is reasonable, and we believe that the present figure is.
Lord Harris of Greenwich: My Lords, may I ask the noble Earl a final question on this point? Is he aware that for many months the Home Office has been having discussions with shooting interests? Is he further aware that, despite those discussions, and despite the fact that they are now involved in a national crime prevention campaign, the Government
540
have taken no action at all? What will eventually impel the Government to take action on this matter, at a time when the criminal statistics for 1985 demonstrate a substantial increase in the number of cases where shotguns have been used in serious criminal offences?
The Earl of Caithness: My Lords, the noble Lord will, from his wide experience, know better than I the need to consult in these mtters. But notwithstanding the large increase which occurred last year, the offences recorded by the police in which firearms were reported to have been used still number less than 0.3 per cent. of the total number of all reckonable offences. That is still too high a percentage, and it is that we want to reduce.
Lord Swansea: My Lords, if Her Majesty's Government decide to introduce an amnesty will they, at the same time, advise the public that, as an alternative to surrendering such unregistered firearms to the police, they may also legally dispose of such items for their current value to a registered dealer?
The Earl of Caithness: My Lords, I take careful note of my noble friend's question and I shall pass it on to my right honourable friend the Home Secretary.

Energy Efficiency in Dwellings
2.45 p.m.
Baroness Stedman: My Lords, on behalf of my noble friend Lord Hanworth, I beg leave to ask the Question standing in his name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, having regard to the relatively large heat losses through the ground floors of better thermally insulated houses they will now specify minimum insulation requirements for such floors.
Baroness Hooper: My Lords, the present requirements for energy efficiency in dwellings are being reviewed. Our aim is to combine a higher standard with greater flexibility in the ways in which the requirements can be met. We hope to publish proposals next month in a consultation document.
Baroness Stedman: My Lords, I am grateful to the noble Baroness for the Answer she has given. I am sure that will go some way to satisfy my noble friend. But surely it is possible to introduce into building regulations the need for including requirements for the insulation of floors in new buildings? Is that one of the matters being taken into consideration?
Baroness Hooper: Yes, my Lords. The consultation document will contain proposals for the insulation of ground floors of dwellings.
Baroness David: My Lords, will the Government provide any incentive by way of grants or subsidies to help people who are building their houses, or those who already have houses without insulation, so that they can instal this very necessary item?
Baroness Hooper: My Lords, as I understand it, these regulations will affect new buildings only. The additional costs of construction of a range of measures to be discussed in the consultation document is estimated to be between £200 and £500 per house. Of this, £125 to £300 relates to floor insulation alone. This is a consultation document. What will eventually come out of it remains to be seen.
Lord Mellish: My Lords, will the noble Baroness take note of the fact that, while there is a lot to be said for floor heating, the big trouble is that the majority of people who would like that cannot afford it? What can she do about that?
Baroness Hooper: My Lords, the aim of the consultation document is to bring in greater flexibility which will introduce a higher overall standard so that builders can choose from a range of measures that will satisfy the regulations.
Lord Dean of Beswick: My Lords, does not the Minister agree that if we introduce this factor only into new construction the energy saving on our total housing stock will be very small indeed? Because finite resources of energy are running out at an alarming rate, will the Minister ask her appropriate colleagues in the Government to consider, as a matter of urgency, trying to introduce the application of these measures into our existing housing stock where a tremendous saving could be made?
Baroness Hooper: My Lords, only a couple of weeks ago, in the debate on this topic of heating, particularly for the elderly, I gave an undertaking to the House that the Government were keeping this matter under review and that they recognise that this is a matter of urgency, especially when considering the winter months.

Chernobyl Accident: Causes
2.49 p.m.
Lord Rodney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will comment on information from Soviet sources that the Chernobyl disaster was caused by human error rather than a technical failure.
Viscount Davidson: My Lords, the presentation given to the International Atomic Energy Agency by Soviet experts on the causes and consequences of the Chernobyl accident showed that the accident occurred because of a combination of design weaknesses in the reactor system and deliberate failures by staff to observe prescribed safety procedures in both the authorisation and the carrying out of a test on the turbine generators.
Lord Rodney: My Lords, I thank my noble friend for that Answer. Did he see a recent article in The Times which gave the impression that most of the Magnox
542
power stations were suffering from corrosion and were therefore unsafe? If he did so, would he care to comment on it?
Viscount Davidson: Yes, my Lords, I saw the article, which was factually inaccurate. The real situation is very far from the alarming picture portrayed. The corrosion problem affected only two standpipes out of 450 at Hinkley Point and the other seven Magnox stations were unaffected. This problem has been well documented in public and does not pose a safety threat. The Nuclear Installations Inspectorate agreed in April to the continued operation of the station.
Lord Renton: My Lords, is my noble friend aware that, but for a climatic piece of good fortune, we might have had a higher degree of radiation from Chernobyl over this country than we had, and that the same conditions may arise again, although we hope that they will not? Has the attention of local authorities been drawn to the need for much greater protection of the people against the possibility of radiation fall-out?
Viscount Davidson: My Lords, the answer to both questions put by my noble friend is yes.
Lord Jenkins of Putney: My Lords, is the noble Viscount aware that human error occurs all over the world and in all types of technology and that regard to it cannot be excluded from nuclear energy? That is one reason why nuclear energy is so much more dangerous and so much more alarming than other forms of energy and should be avoided as much as possible.
Viscount Davidson: My Lords, the precautions taken in the design and construction of nuclear installations and the very high safety standards applied in operating them make accidents that could affect the public very likely indeed—
Noble Lords: Likely?
Viscount Davidson: My Lords, I am sorry. I thought that I had said "unlikely". Perhaps I may now say "unlikely", and underline it. Even the one-in-a-million accident for which emergency plans are prepared would be unlikely to have a significant effect beyond two or three miles from the site. The Chernobyl disaster is not a measure of what an accident at a British nuclear installation would be and does not invalidate the safety systems in use in this country and elsewhere. Even the Russians have said that Chernobyl could not happen outside Russia.
Lord Taylor of Gryfe: My Lords, did I understand the Minister to say that the International Atomic Energy Authority had established that there were design weaknesses in the construction of the Chernobyl plant? Is he aware that this has since been confirmed by British nuclear scientists who have visited the Soviet Union on the matter? Can he tell the House what authority the International Atomic Energy Authority will have to impose proper safety regulations to prevent a recurrence of this disaster?
Viscount Davidson: My Lords, the International Atomic Energy Agency has the authority to tell all the countries that have put their signature to the energy agency to adopt the high standards of safety.
Lord Campbell of Croy: My Lords, have the Soviet Government provided any information about adaptations which would correct the faults in design that helped to cause the Chernobyl disaster in those reactors of the same type which are still in operation?
Viscount Davidson: Yes, my Lords. The Russians are putting design alterations into effect on all their other reactors of the Chernobyl type.
Lord Stoddart of Swindon: My Lords, in the light of the answers that the noble Viscount has given so far, does he rule out the possibility of a similar accident occurring in any British nuclear power station, present or future, by reason of human error?
Viscount Davidson: My Lords, it would be foolish of me to rule out anything at all; but so far as I know I do rule it out.
Lord Gray of Contin: My Lords, does my noble friend agree with me that the present record of the nuclear energy industry in this country is second to none in industrial control of accidents? Does he further agree that if the Chernobyl and similar reactors had, before they were allowed to be constructed to undergo the tests which are imposed on the nuclear industry in this country, there may never have been a Chernobyl accident?
Viscount Davidson: My Lords, I entirely agree with my noble friend. The United Kingdom has a very rigorous system of nuclear safety licensing. A continuous process of review and reassessment of nuclear reactors is part of the very high standards of safety applied in this country. The system design of UK reactors is tolerant to operator action and provides for the reactor to shut down under automatic control in the event of operator error.
Lord Mackie of Benshie: My Lords, is the Minister aware that, although the regulations in this country make for a greater degree of safety than elsewhere, an accident anywhere can affect this country, and has done? Does he agree therefore that the international agency should have powers of inspection and of specification?
Viscount Davidson: My Lords, we have a very good inspectorate here, the Nuclear Installations Inspectorate. Nothing can be done without its approval.
The Earl of Halsbury: My Lords, will the noble Viscount confirm that volcanic eruptions, earthquakes, typhoons, hurricanes and the arrival on this planet of outsize meteorites are not due to human error; that life on this planet is not altogether secure; and that we should stand up to life and its hazards like men and not frightened children?
Viscount Davidson: My Lords, I am most grateful to the noble Earl.

Business
2.58 p.m.
Viscount Long: My Lords, after the end of the short debate on the arts and before the short debate on academic medicine, my noble friend Lord Lucas of Chilworth, with the leave of the House, will repeat in the form of a Statement an Answer to a Private Notice Question in another place on the balance of payments.
I should like to say a word about the arrangements for this afternoon's two short debates standing in the names of the noble Lords, Lord Donoughue and Lord Prys-Davies. On the principle that the mover is allowed approximately 15 minutes and that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of the short debate in the name of the noble Lord, Lord Donoughue, this means that all other speeches should be limited to a maximum of 5 minutes. If any noble Lord should speak at greater length he would do so at the expense of subsequent speakers in the debate. In the case of the short debate in the name of the noble Lord, Lord Prys-Davies, the number of speakers is such that it is not necessary to propose a formal time limit, but I am sure that noble Lords will agree that it would conform with the spirit of these short debates if they would keep their speeches within the 15 minutes which apply to the mover of the Motion.
Lord Donaldson of Kingsbridge: My Lords, would it be in order to ask the noble Viscount a question about these arrangements? I have already met one ex-chairman of the Arts Council and one head of a museum who are removing their names from the list of speakers because of the number already down on it. Would it not be possible, when there is more than a certain number of entries on the list, to have a "first-come, first-served" arrangement, so as to have a limit of something like 15? I should like the House to consider that.
Viscount Long: My Lords, I am grateful for the remarks of the noble Lord, Lord Donaldson, but the arrangements and the Standing Orders of the House are such that we have two-and-a-half-hour debates, and we must therefore stick to that. If there are too many speakers, this unfortunately cuts down the time for each speaker. It is not my fault that there are too many speakers.
Lord Donaldson of Kingsbridge: My Lords, I had not thought that it was the fault of the noble Viscount.

Criminal Justice (Scotland) Bill [H.L.]
The Minister of State, Scottish Office (Lord Glenarthur): My Lords, I beg to introduce a Bill to make provision for Scotland as regards the recovery of the proceeds of drug trafficking; to make further provision as regards criminal justice in Scotland; and for connected purposes.
I beg to move that this Bill be now read a first time.
Moved, That the Bill be read a first time.—(Lord Glenarthur.)
On Question, Bill read a first time, and to be printed.

Statutory Instruments: Select Committee
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That a Select Committee of seven Lords be appointed to join with a Committee appointed by the Commons to consider—

(1) Every instrument which is laid before each House of Parliament and upon which proceedings may be or might have been taken in either House of Parliament, in pursuance of an Act of Parliament; being

(a) statutory instrument, or a draft of a statutory instrument;

(b) a scheme, or an amendment of a scheme, or draft thereof, requiring approval by statutory instrument;

(c) any other instrument (whether or not in draft), where the proceedings in pursuance of an Act of Parliament are proceedings by way of an affirmative resolution; or

(d) an order subject to special parliamentary procedure;

but excluding any Order in Council or draft Order in Council made or proposed to be made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974.

(2) Every general statutory instrument not within the foregoing classes, and not required to be laid before or to be subject to proceedings in the Commons only, but not including Measures under the Church of England Assembly (Powers) Act 1919 and instruments made under such Measures; with a view to determining whether the special attention of the House should be drawn to it on any of the following grounds—

(i) that it imposes a charge on the public revenues or contains provisions requiring payments to be made to the Exchequer or any government department or to any local or public authority in consideration of any licence or consent or of any services to be rendered, or prescribes the amount of any such charge or payments;

(ii) that it is made in pursuance of any enactment containing specific provisions excluding it from challenge in the courts, either at all times or after the expiration of a specific period;

(iii) that it purports to have retrospective effect where the parent statute confers no express authority so to provide;

(iv) that there appears to have been unjustifiable delay in the publication or in the laying of it before Parliament;

(v) that there appears to have been unjustifiable delay in sending a notification under the proviso to subsection (1) of Section 4 of the
546
Statutory Instruments Act 1946, where an Instrument has come into operation before it has been laid before Parliament;

(vi) that there appears to be a doubt whether it is infra vires or that it appears to make some unusual or unexpected use of the powers conferred by the statute under which it is made;

(vii) that for any special reasons its form or purport call for elucidation;

(viii) that its drafting appears to be defective; or

on any other ground which does not impinge on its merits or on the policy behind it, and to report their decision with the reasons thereof in any particular case.
That the Lords following, as proposed by the Committee of Selection, be named of the Committee:

Airedale, L.

Denington, B.

Arran, E.

Dilhorne, V.

Brooks of Tremorfa, L.

Shaughnessy, L.

Cullen of Ashbourne, L.

That two be the quorum of the Committee.
That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman.
That the Committee have power to appoint one or more Sub-Committees severally to join with any Sub-Committee or Sub-Committees appointed by the Committee appointed by the Commons: and to refer to such Sub-Committee or Sub-Committees any of the matters referred to the Committee.
That it be an instruction to the Committee that they do not consider any instrument which is directed by Act of Parliament to be laid before and to be subject to proceedings in the Commons only; and that the Committee do not join with the Committee appointed by the Commons in considering any such instrument.
That it be a further instruction to the Committee that, before reporting that the special attention of the House be drawn to any instrument, the Committee do afford to any Government department concerned therewith an opportunity of furnishing orally or in writing to them or to any Sub-Committee or the Committee such explanations as the department think fit.
That the Joint Committee have leave to report from time to time.
That the Committee do meet with the Committee appointed by the Commons on Tuesday 2nd December at a quarter past four o'clock.—(The Chairman of Committees.)
Lord Harmar-Nicholls: My Lords, there are seven noble Lords being nominated to serve on this Joint Committee. I presume that, if we are sending seven, the rest of the committee will be more than that. Is not a quorum of two rather small for a committee of that size? And if the two, if this quorum remains, come solely from the other place, would that be authoritative—or even if it were two out of seven noble Lords? At the minute, does it not appear to be slightly out of balance?
The Chairman of Committees: My Lords, this is a committee which has existed for a very long time. It is a Joint Committee with the other place, and there are seven Members from each House. The quorum is two. I cannot go any further than that.
Lord Harmar-Nicholls: It is too small, my Lords.
On Question, Motion agreed to; and it was ordered that a message be sent to the Commons to acquaint them therewith.

Procedure of the House: Select Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Select Committee on Procedure of the House be appointed and that as proposed by the Committee of Selection the Lords following, with the Chairman of Committees, be named of the Committee:

Airedale, L.

Ampthill, L.

Belstead, L.

Cathcart, E.

Cledwyn of Penrhos, L.

David, B.

Denham, L.

Diamond, L.

Hailsham of Saint Marylebone, L (L. Chancellor)

Hayter, L.

Hylton-Foster, B.

Irving of Dartford, L.

Mackay of Clashfern, L.

Mowbray and Stourton, L.

Nugent of Guildford, L.

Ponsonby of Shulbrede, L.

Renton, L.

Saltoun of Abernethy, Ly.

Seear, B.

Serota, B.

Shackleton, L.

Skelmersdale, L.

Stedman, B.

Strabolgi, L.

Tordoff, L.

Underhill, L.

Whitelaw, V. (L. President)

—(The Chairman of Committees.)

On Question, Motion agreed to.

The Arts: Government Support
3.1 p.m.
Lord Donoughue Lord Donoughue rose to call attention to the case for better government provision for the arts in the United Kingdom; and to move for Papers.
The noble Lord said: My Lords, this is an opportune time to discuss this subject, coming as it does so soon after the Government's disappointing decision on allocating funds to the arts. It is indeed satisfying to see such a large number of noble Lords scheduled to
548
speak, reflecting the importance of this subject. If I stick to the broad sweep of arguments, I know I can rely on the great expertise that lies within this House among individual noble Lords to cover the many particular issues which I shall not have time to deal with.
Inevitably much of our discussion and some of what I shall say concerns economic arguments and financial statistics. However, I should like to begin by asserting the fundamental cultural case for supporting the arts. Indeed, I feel it is indicative of the sad stranglehold of the new dogma—a kind of philistine materialism—on our society that it appears that everything has to be justified and quantified in precise monetary terms, as if Bach and Beethoven, Shakespeare and Seamus Heaney are appropriate to accountants' audits.
I know that in Britain we have always been described as a nation of shopkeepers, and more recently as a nation of estate agents; but that does not mean we have to be governed wholly on their prejudices. Fortunately, noble Lords do not, on my observation, run their private lives in this way, or we would be a miserable lot. I believe, and I know many others also believe, that the health of our cultural life and the high respect and priority we give to artistic endeavour are fundamental to the quality of life in our society. Your Lordships may feel that is an obvious, banal point, but apparently it needs restating when those who govern us allocate resources giving such a low priority to support for the arts.
As an economist, I feel no inhibition whatsoever in saying that if the price of achieving and sustaining a more flourishing artistic culture is a slight deterioration in the public sector borrowing requirement (say, from £7 billion to £7.1 billion), so be it. I believe I can forecast, with more confidence than I can forecast the PSBR, that most speakers this afternoon will take that civilised view. Indeed, I suspect that the Minister who is to reply is secretly one of these "angels", though I fear we shall hear the same dreary dirge that we heard from the Minister in the other place. It is quite striking how isolated the Government are on this issue. The Minister, I may say, is so isolated as to be virtually invisible.
The Government have apparently concluded, so we are told, that there are no votes in the arts. Maybe; I am not sure. That view may underestimate the many tens of thousands who work in the arts and the millions who participate in and enjoy the arts. What I am sure of is that there are few votes against the arts and that any government who have resources to spend, as the Chancellor boasted only a few days ago, should have art and the artistic community as one of their highest priorities for investment. The case for the arts stands as a test of priorities in a civilised society, and if we cannot get better provision in a pre-election year, when there appears to be largesse for everyone, we have to ask: when will it be the case?
If I may now briefly turn to expenditure, I should like to say that during the debate I hope we shall not spend the whole of this afternoon arguing about fractions of numbers and about whether the nominal increase for next year is 5.4 per cent., 3.4 per cent., 2 per cent. or minus 2.4 per cent.—all of which I have read in the press—or whether since 1979 the

549
marvellous real increase has been 7 per cent., as the Government argue, or there has been a terrible real decrease of X per cent. or Y per cent., as the National Campaign for the Arts argues in its excellent analysis.
However, I would comment, in that area of numbers, that it is unfair to include the provision for the British Museum extension at St. Pancras. That is a special case, rather like the Falklands in defence; and when the Government use the GDP deflator that is not perhaps the most appropriate indicator. Of course everybody uses the indicator most helpful to their case, but really the RPI—and the Peacock report four years ago said this—is more appropriate and shows a real decline of 3 per cent. since 1979. The earnings index, which is not inappropriate in view of the fact that in the arts something like three-quarters of the costs are for staffing, would indicate a decline of 20 per cent. in real expenditure.
However, the main point is not arguments about percentages. To me, it is that the absolute amount of public subsidy for the arts in this country is ludicrously small. It equals 0·003 per cent. of national expenditure. That is gross; and if you take the net figure after tax paybacks, it is probably more like 0·001 per cent. or zero.
A second point is that the amount of the proposed increase for next year, whatever we agree the percentage to be, is unforgivably small. I believe that it certainly indicates a real cut, because the rate of inflation next year—I state this with absolute confidence—will be at least 5 per cent. That is a common view in the City, where some go higher than that. So we have a real cut, and the absolute real cost is very small. On that point of the absolute real cost, if I may I should like to draw attention to the new Helm report from Oxford (not yet published but available to the department) which analyses the real cost to the Exchequer of the arts subsidy in this country. It is done on the most conservative assumptions, with academic rigour, estimating the returns to the Exchequer on investments in the arts.
There are three main categories of payback: VAT on ticket sales and on tourists; the unemployment offset (people who would have to receive unemployment benefit if they were not employed by arts subsidy); and the subsidy for education. The figure comes out at about £40 million, and that is a very conservative figure. It is calculated only on the areas receiving direct Arts Council grant. It excludes all those important spinoffs to the Treasury from related activities: television, radio, cinema, recording studios and so forth, and it omits all the multiplifier effects of the ancillary services such as restaurants, transport and printing, all of which are stimulated by arts activity. Taken together, they indicate that the actual net expenditure by the Treasury on the arts in this country is zero. Put another way, the return to the Treasury on arts investment is very high.
That is the basis of the economic case for greater public subsidy. In fact, our arts are now a booming growth industry of which we should be proud, and they are making significant contributions to our national economy. The facts and the arguments are fairly familiar to those within the arts and also probably familiar to those within this House, but I shall restate them.
550
The arts industry is a very significant employer, with directly some 200,000 and indirectly many tens of thousands more in ancillary services. Job creation in that area is very cheap at around £3,000 per head. But the arts industry is important by way of invisible earnings through tourists who are encouraged to come here. Some 30 per cent. of tourists say that our arts facilities are a major reason for their visiting Britain; and, also, there is the question of overseas royalties. The arts are also an essential component of our highly successful media industry, especially television and films; so the economic case is very strong.
There is also a social argument, which I support strongly, that the arts currently help to integrate our communities, especially in the inner cities. They have an important role in racial integration. Furthermore, they have a role, about which I know my noble friend Lord Murray agrees strongly, in helping the disabled.
Your Lordships should bear in mind the success of this industry. More people watch theatre, more people hear music and more people visit museums than watch football in this country. I do not myself think that that is, in itself, a good thing, because I love football, but it gives one an order of the priorities, with over 1 million people participating each year in drama. So maybe there are more votes in this than the chairman of the Conservative Party realises! That is the national and economic case for arts investment—the very good return.
I believe that the arts case, the case for doing it for the sake of the arts, is equally compelling. Artistic endeavours, especially in the performing arts, need up-front investment to get them off the gound—what my good friend Melvin Bragg has called the seedcorn. You have to be able to guarantee to pay to bring together the teams of highly skilled artistic professionals who are necessary. As an example, "Nicholas Nickleby" could only begin because they were able to guarantee the contracts to such a very large cast. So you need up-front money, you need public investment, to secure the highest quality in order to maintain drama from the Royal Shakespeare Company, opera at the Royal Opera Company and at the English National Opera, and concert music at the Barbican and on the South Bank. You need it to maintain the highest international standards—and it costs money.
It may mean an accounting loss. No country produces top quality artistic presentations at a commercial profit. It may at times mean financing failures, but that is a price we should be willing to pay. Anyway, it often means investing in a profit. The Royal Shakespeare Company, receiving about £4 million, certainly returns all of that to the Treasury in VAT, in income tax from those it employs, in royalties and so forth. But even at a loss it is a small price to pay for international quality.
I feel that that is also true of the Royal Opera Company, which is not currently a fashionable cause on some sides of this House, perhaps. I believe we get that very cheap at £7 million, however irritating at times its apparently élitist social views or its occasional extravagance. In fact, we get high quality opera at a price less than it costs in any other country, where the great opera companies of Vienna, of Venice and of

551
Munich spend twice as much. The alternative to providing this money is to cease to be in the international league, to cease to have performers of an international calibre and to slip into the second division—and I do not think we should do that. So we need investment for quality.
We also need investment for the regions, where there has been something of a renaissance. We need that, but not at the expense of London. I support what the Arts Council has done for the regions, but they should not be seen as in conflict with London. There are different criteria. London must maintain national and international standards. Each requires proper provision.
I may say also that we need investment to encourage innovation and new frontiers in the arts, which are rarely commercially viable. Conversely, the price of restraining support to the arts is playing safe. I feel that the orchestral world is a prime example of that. London is privileged to have five fine orchestras—and I must declare an interest, being chairman of the executive of the greatest of those, the London Symphony Orchestra. One notes that the grants to those orchestras have been reduced by 8 per cent. in real terms since 1979. Those orchestras, I have observed, survive on low pay, on excessive work and on endless recording sessions, which are detrimental to their artistic quality. One result is programmes that have become too conservative and too safe. They dare not risk programmes at the frontiers of the public's familiarity. For example, there is now much too little modern music, especially modern British music, played.
I add on the National Theatre, that my own personal complaint about that institution is not the extravagances of its excessive cast lists or the over-elaborate productions, irritating though they are and impolitic as they are if they provide ammunition to the philistines, but the safe conventionality and parochialism of its programmes. Only public investment properly used makes possible artistic risk.
We are not discussing a terrible, immediate crisis in the arts, and I think that those from the artistic world who speak in that way do no service. It is exaggeration and is counter-productive. We are discussing a steady attrition, with small, real cuts in a ludicrously low absolute total. But it is not a gloom and doom story. The arts are absolutely booming with success; but that great success has been encouraged and stimulated by public and government financial help, in which many noble Members of this House have played a honourable part—Lord Wilson, Jenny Lee, the Earl of Stockton, Viscount Eccles and Lord Goodman. From all sides they have made possible this great renaissance, as has the Arts Council. I know that that is a controversial subject, and I hear ideas floated for its abolition. On that I am agnostic. But it is proven, it has a good record and some of its sins—such as its recent too close association with government—are subject to repentance and can be changed with people. So, altogether, we have produced an absolute success story, and the tragedy now is that momentum is being taken out of it. The declared plateau of the Government is actually a downward sloping plateau, and the consequences can be seen everywhere.
552
Time passes and many wish to speak, so I shall leave to others the mention of various other problems such as the metropolitan counties, the Cork Report and the sad case of copyright, on which the Government have disappointed. My conclusions are, I hope, clear: that both the cultural and economic arguments for higher support are overwhelming. Our real net Exchequer support is probably zero, and, at most, the equivalent of a few few metres of concrete in the Falklands runway. It is clear that the return on greater investment would be high. Greater public investment is absolutely essential, and I think it is a scandal that the Government are not providing it. I beg to move for Papers.
3.20 p.m.
Lord Boyd-Carpenter: My Lords, it is conventional to congratulate the noble Lord who introduces a subject, and I am particularly happy to do that since, as a former Minister for the Arts—a post which I held conjointly with that of Chief Secretary to the Treasury some years ago—I have followed the subject with great interest over the years.
However, I must say to the noble Lord that apart from the plainly party political slant of his speech, which I think was very noticeable to your Lordships, it seems to me a pity that we should be debating a subject of this importance in a short debate. It must have been quite obvious to all concerned that this is a subject upon which many of your Lordships speak with great authority and knowledge and upon which they would therefore wish to speak. To have this subject for a short debate seems, in the light of what we have seen, to have been a mistake. This subject merits a longer time and a more ample opportunity for debate.
The noble Lord, Lord Donoughue, made a speech very similar to that which, year in and year out, has been made in respect of public provision for the arts. It is almost an annual wailing session. Yet the curious aspect is that he himself admitted that under this regime the arts have progressed and developed. They play a major and increasing part in our country's affairs and its cultural life. This is true despite the fact that we have been told every year that government provision is inadequate. Therefore in this year when government provision is up 10 per cent. in real terms on what it was when this Government came into power in 1979, I think one takes some of these wailings with the traditional pinch of salt. It is quite obvious that the policy of all governments (which has been reasonable and expanding but, in financial terms, modest support for the arts) has paid off and has worked.
I am bound to say that I was rather startled by the noble Lord's suggestion that the real cost of government provision for the arts was zero. Even for a noble Lord who in Who's Who lists his recreations as politics and economics, that was really a rather startling observation. The provision that the Government make for the arts is a substantial and growing one. The noble Lord himself acknowledged its effect when he referred to the progress which the arts have made under that regime.
However, your Lordships may have noticed that the noble Lord confined himself absolutely to government

553
finance. He did not spare a moment to reflect on the flourishing state of the arts in the United States, where support by private individuals and companies is very widespread and widely effective. This kind of support is being very strongly encouraged by the present Government under their current schemes. Indeed, there is a remarkable growth in the government sponsorship scheme and there is a growth resulting from tax concessions which have been made in respect of charitable gifts. The Government's policy has been to encourage private and individual support for the arts, in addition to the substantial provision made from public funds.
I suggest to your Lordships that that should be welcomed, not merely from the point of view that we have a larger total provision for the arts as a result of it but also because the wider spread of patronage and support means that we are not so dependent on even such a sensible and wise body as the Arts Council. We are able to enlist differing opinions in an area in which there is no monopoly on wisdom or knowledge. Perhaps I may quickly refer to the generosity of the Sainsbury family and of John Paul Getty junior, both of whom have given very substantial support to the arts in this country.
It is quite wrong to suggest that there is a monopoly of concern for the arts on the other side of the House. We are just as concerned as noble Lords opposite, but I think we have a wider and more sensible view as to how they should best be supported.
3.24 p.m.
Lord Ritchie of Dundee: My Lords, your Lordships would have been treated to an impassioned harangue from me, but when I heard I had only five minutes in which to speak I did a drastic surgical operation on my speech. That may mean that what is left may have a slightly amputated appearance. However, I should like to try to make six points. If I have made only five by the time the clock says that I have spoken for five minutes, I shall stop.
I think it is essential to bear in mind that in talking about the arts we are not merely talking about the theatre, literature, music and the visual arts as leisure amusements. We are also talking about the industries which are dependent on those activities and closely connected with them. I refer to such things as broadcasting, publishing, fashion, arthitecture, advertising, tourism, interior decorating, industrial design, clothing and furniture. All those are dependent on the arts to an extent. By a further extension, many retail shops and restaurants in places such as Stratford and the West End of London are also dependent. Those industries with their enormous economic importance cannot flourish if the skills on which they are based are not nurtured.
My second point is that we should like to see an end to the system of annual grant funding. That system encourages poor housekeeping because if a company shows a profit it is likely to have its grant reduced the following year. Indeed, many grants are given as guarantees against loss and if there is no loss there will be no grant. There have been cases where a subsidised theatre with a success on its hands has been deterred from exploiting that success lest the ensuing profits
554
should be an embarrassment on the balance sheet. For the sake of stability, security and the opportunity for forward planning, companies need the assurance of a steady income.
What is the alternative? We on these Benches feel that the various activities related to the arts should be in the hands of a central body which should handle, say, broadcasting, film, the development of information technology and such things as intellectual property rights, as well as funding the organisations which are presently clients of the Arts Council. We feel that a voice is needed in the Cabinet, backed by a new department of state, which could compete with more clout than the arts are able to at present for a fair deal from the Treasury. We should therefore be in favour of a ministry of arts, communications and heritage. This ministry could take responsibility for many concerns relating to our culture, some of which I have mentioned. It should also take over the role of the Arts Council as a funding organisation, though the Arts Council, with the immense expertise of its specialist panels, should continue to exist in an advisory capacity.
We should also like to see much more decentralisation and thus a strengthening of the role of regional associations. These organisations have done excellent work over the past two decades. They are in touch with grass-roots opinion, aware of local needs and quick to respond to promising ideas. It is suggested that they should be funded by the ministry on a per capita basis. We propose funding by a system of endowment trusts to be funded on a joint venture basis, partly by substantial one-off grants from the ministry through the regional arts associations, partly by local authorities and partly from tax deductible grants from corporate and individual donors. The funds would have to be of sufficient size to yield interest which would replace all or a substantial part of the present annual grant funding currently received from the Arts Council. Community arts trusts could also be established on the same principle to serve a particular interest or locality.
Perhaps I may say a word about balance between central and regional interests. Centres of excellence are fine. I may be slightly out of accord with the noble Lord, Lord Donoughue, because to my mind taking theatre, song or dance to remoter regions, to schools, to people in need and to hospitals and prisons is even finer. I shall not bore the House at any length, but I remember a performance in a nissen hut in the north of Syria during the war. I remember going in half-way through and finding a gathering of rough soldiers, like myself, spellbound by a performance of Patrick Hamilton's "Gaslight".
To my mind, when magic like that can be performed at such an unfavourable time and in a remote region, that is true theatre. That must play an important part in any scheme. That is why I say let us think our way out to the highways and byways; let us reach out to the regions; and perhaps we may see a revival of this true theatrical experience.
3.31 p.m.
Lord Charteris of Amisfield: My Lords, as a trustee of the British Museum, and as chairman of the National Heritage Memorial Fund, I am well aware

555
that the purchase grants available to museums and galleries make it difficult for them to operate successfully in the face of modern prices. As a trustee of the museum, I know that the great part of the purchase grant is spent before half the year is up; and as chairman of the National Heritage Memorial Fund, I know only too well how museums come to us for assistance where important heritage property is involved.
I must say, however, that the Government have been extremely generous and provident where the National Heritage Memorial Fund is concerned. Hitherto we have been given adequate funds to fulfil the task we were given by Parliament. That is demonstrated when I say that so far only on very rare occasions have we had to refuse assistance for any project because of lack of funds. We have also hitherto always had enough money to act swiftly in the defence of the heritage.
We were able to do that in the case of Fyvie Castle, and I know that some of your Lordships have seen the exhibition of its treasures now at Agnew's. In August 1982 the heritage world, particularly that part of it north of Tweed, was shaken to its foundations by the news that Fyvie Castle and its treasures were about to be put on sale. An emergency meeting was held in the offices of the National Trust for Scotland, and it was agreed that the sale would be postponed for six months. This happy result was achieved because the National Heritage Memorial Fund had adequate funds at its disposal to make immediate negotiations practicable.
Those negotiations succeeded. Fyvie Castle and its treasures are now secure for the nation for perpetuity in the safe hands of the National Trust for Scotland. To achieve that happy ending, the National Heritage Memorial Fund had to cough up £3 million. I believe it was jolly good value for money. Three million pounds is an interesting figure for two reasons. The first is that it is the sum which the fund has been given each year as its annual core grant; and the second is that it is £½ million less than was paid by an American lady in 1984 for just one of the Chatsworth drawings—a drawing by Raphael no larger than a good sized pocket handkerchief!
Three million pounds per year is very little in relation to the demands which have so far been made on the fund. Our expenditure has been averaged out at about £12½ million per year, and a recent report by Coopers and Lybrand, commissioned jointly by the Department of the Environment, the Office of Arts and Libraries and the fund, forecasts that if the fund is to fulfil its remit that kind of annual expenditure is likely to be incurred.
What has happened, of course, is that each year Her Majesty's Government, like a knight in shining armour, have come to the rescue of the maiden in distress with extra money. I take this opportunity of saying that in so far as the National Heritage Memorial Fund is concerned, they have in my opinion treated us quite splendidly. My gratitude is unbounded and undiminished by the consideration that not knowing how much you are going to get until you get it at the eleventh hour and not knowing either what
556
demands are going to be made, frankly, makes budgeting more a matter of creative art than an exact science! Never mind, we have survived, and because of the Government's good sense, as well as Fyvie Castle, Canons Ashby, Belton, Calke Abbey, the Hill House Helensburgh, Kedleston, Nostell Priory, Thirlestane and their contents all have a secure future and a great deal else besides.
I need hardly say that I hope to see the knight trotting over the horizon some time next March. If he does not, and if the £3 million is to be all we get, I assure your Lordships that we shall do our best with it and what we have mossed up. I should be less than honest, however, if I did not say that if it is to be just £3 million we shall be lucky if we get away without trouble, by which I mean the loss to the heritage of land, buildings and objects which we all wish to preserve.
We reckon that with a grant of only £3 million we shall have just short of £10 million to commit on new projects between now and April 1988. However, I must tell your Lordships that this computation is based on an important consideration. As trustees of a memorial fund, we consider that it would not be proper for us to spend or commit all our resources without the absolute assurance that they would be restored. We were given £12·4 million in 1980, and we believe that we should retain at least £12 million, which, if you take inflation into consideration, is a good deal less than we started with. I remain fully confident that the Government will, as the Australians would say, see us right.
3.37 p.m.
Lord Murray of Epping Forest: My Lords, I am doubly indebted to my noble friend Lord Donoughue, first, for initiating this debate and, secondly, for referring in his introduction to the special needs of the disabled in relation to the arts.
I have the honour, and, as the noble Baroness, Lady Lane-Fox, is a member, I also have the pleasure, of serving on the Carnegie Council, which was established by the Carnegie UK Trust to give effect to the report by Sir Richard Attenborough and others on arts and the disabled. I hope that in the fullness of time there may be a more extended opportunity for your Lordships to consider activities in this field. Meanwhile, I intervene briefly today because it seems to me that improving the contribution of disabled people to artistic activities, and also improving the contribution that the arts can make to the well-being and the quality of life of the disabled, should be a natural part of any discussion of the arts.
We are not talking of some fringe group. We are talking of perhaps up to one-tenth of the population. The Attenborough Report, to which I have referred, emphasised that:
"Whether the arts are pursued primarily for their entertainment value or at a deeper level—and apart from their use specifically for therapeutic purposes—their importance can be even greater for people whose outlets are restricted by physical, mental or sensory impairment, than for other members of the community".
That report illustrated the ways in which disabled people are already involved across the whole spectrum of artistic activity.

557
There are those who pursue literary and other activities which are not directly affected by their particular disablement but others are engaged in arts activities from which, on a superficial view, they might seem to he precluded: for example, actors who are confined to wheelchairs; painters or photographers who are totally blind; and musical performers who are profoundly deaf. By involvement in the arts, and sometimes indeed by developing their own art forms out of their own view and their own experience of life, people with very severe disablements have come to see themselves as comparable with ordinary, fully able people in living their lives and have come to recognise that they have their own contribution to make. I feel cautiously optimistic about progress being made in that field.
First of all, public consciousness of and public concern for disability have been growing in general terms. The right of the disabled to have access to artistic activities, and beyond that to participate in the arts, is more widely, though as yet not nearly widely enough, accepted. Secondly, there has been a major shift in thinking about the arts, and about the need to promote arts within the community. Many professionals are developing a more creative relationship with amateurs, children and students, and, in addition, as my noble friend mentioned, we are developing ways to foster indigenous folk and ethnic minority art forms.
All this is leading to a deeper understanding of the role of the arts in society, and hence of the need to extend public and private provision. The Carnegie Council, of which I am a member, is seeking to impress that not only on government departments but on local authorities, arts councils and indeed private funding organisations. In the public domain we are seeking to emphasise in particular the need for adequate funding in order to secure physical access by the disabled to buildings and events, and for more funds for education and training of the disabled, both young and old, with artistic talent.
I hope, if your Lordships agree, we shall in due time have the opportunity to consider this subject rather more fully, arid to consider at greater length what needs to be done in those and other respects. Meanwhile, I am indebted to my noble friend for the opportunity of reminding your Lordships—if any indeed should need it—of the importance of giving a measure of priority to the needs of disabled people when considering provision in the widest sense for the arts.
3.42 p.m.
Lord Wolfson: My Lords, I am not directly involved in the arts world, but as trustee of a charitable foundation I have had many associations with a wide variety of projects over the years. I know what a very important contribution the broad range of arts makes to our country's standing in the world, and I have considerable respect for those I have met who are engaged in this creative work.
The magnificent heritage which has been passed down to us comes from centuries of artistic genius and the good taste exercised by generations of private collectors. The superb national collection derives from the vision of individual collectors, a recent notable
558
example being that of Sir William Burrell, whose splendid art collection is now displayed in its own setting in Glasgow. This has no doubt been one of the factors leading to the EC naming that city European City of Culture 1990.
Millions of our own people as well as overseas visitors, who, alas, do not come for the climate, derive special pleasure and enlightenment from visiting our museums, galleries, churches and historic buildings. The performing arts and music likewise have a similar appeal. The arts are not only good for our minds and aesthetic senses, as the noble Lord, Lord Donoughue, has pointed out; they make an important contribution to the prosperity of the country. It is in this overall context that the Government have put forward their comprehensive proposals for 1987–88. Their programme adds up to a significent amount: £339 million in direct support, including a novel pilot marketing plan, active encouragement in the Chancellor's Budget for more business participation and sponsorship, with similar encouragement to private individuals, and as the noble Lord, Lord Boyd-Carpenter, has pointed out, there has been given an outstanding lead by the Sainsbury family, John Paul Getty and others.
All these measures testify to the importance attached by the Government and private donors to the maintenance and improvement of the arts. It is a comprehensive and well thought out programme, which I welcome. I feel strongly, however, as many of your Lordships do, that a reasoned case can be made for an increase in further capital investment, costed and financed in a responsible manner. It is clearly desirable also to invest in the great variety of talent that this country is fortunate enough to possess and which it needs to retain.
So how might this be achieved? It would be helpful if the arts budget was set out showing capital investment separately from revenue expenditure. I know it has not been Treasury practice to do so in the past, although it is standard commercial procedure. The Government should give serious thought to this method of accountancy. Were the capital investment programme, particularly in the case of the new British Library, to be amortized over an appropriate period, then the funds would clearly go much further. The present system inevitably penalises long-term projects. Using recognised conservative, not creative, methods of accountancy for capital programmes and establishing a capital fund to encourage private partnerships in matching grants could make a very worthwhile addition to the resources currently available.
Other resources might become available for capital formation from the sale of peripheral assets, from capital receipts arising from other transactions, or by any other acceptable method of raising capital from private sources. We all realise that funds are limited, and there are many priorities; but for selective cases in the arts, I submit, as many of your Lordships do, that a relatively modest increase in investment would produce a good return for the country, both in terms of culture and economic benefit.
As a final observation, I should like to see a larger allocation for selective projects in provincial cities and in development areas. There could be a strong

559
possibility of EC grants for such purposes. The spin-off effects of such projects should be very worthwhile and would have a multiplier effect in value by encouraging local initiative, attracting visitors and tourists to other parts of the country where they do not go at present, and helping to provide new employment where it is most needed.
I recently visited Wigan Pier where, as part of a cultural and commercial complex, there is a museum recording the town's social and industrial history. This is a most imaginative venture undertaken by the local authority. It cost £3 million to build and was opened 18 months ago. I understand it has attracted some half a million paying visitors in that time. Substantial environmental improvement has been achieved in the immediate vicinity, and plans have been drawn up with a hotel group to add to the facilities available for the volume of visitors now attracted to the area. It is an interesting example of what can be done, and is one of a growing number of such projects, and more should be encouraged. The proposed Tate Gallery of the North will be a companion to the Maritime Museum in Liverpool. It is another imaginative initiative being undertaken. The much improved national road system and better standards of food and accommodation make this an opportune time for further expansion of this nature.
The old adage, "Where there's a will there's a way", may well help to stimulate the mind. The Government have shown they have the will by laying the groundwork for a more dynamic partnership in the future between themselves and responsible local authorities, on the one hand, and business, private individuals and trusts, on the other. The latter support is not necessarily confined to this country. The recent exhibition in Washington of art treasures from British stately homes is an indicator of great overseas interest.
If I may sum up, the broad range of arts which makes up the national heritage is one of this country's greatest assets, as well as a personal joy to millions of visitors from both home and overseas. These activities deserve the strongest support for both aesthetic and practical reasons. I feel confident that the Government will keep the overall level of investment under sympathetic review, for they have shown a positive approach to the important issues involved.
3.49 p.m.
Lord Hutchinson of Lullington: My Lords, perhaps the Minister will be able to reply to some of the facts to which I wish to refer in this race of a debate. This year the government grant to the Arts Council is £26 million less than its scrupulously costed budget requires. Last year it was £15 million short. Sir William Rees-Mogg describes this year's grant as another blow to the arts. Adopting the Australian vernacular of the moment, no weasel words or economy with the truth, no Civil Service figures or percentages, can hide those straight facts.
When this Government came to power they cut by £1 million the money already voted to the arts. From that wholly inadequate base line, year after year they have continued to proclaim small annual percentage
560
increases, and no doubt will do so again today. It is the base line figure which flaws the whole of the Government's so-called arts policy.
Does the Minister remember the Government's Priestley and Rayner scrutinies into some of the important clients of the council? Each found the financial control of those enterprises wholly adequate, but in each case found that the funding was wholly inadequate for the job which they were asked to do. It was inadequate by a figure of 20 per cent., thus confirming independently the reiterated view of the Arts Council that all its clients were under-funded to the same extent. Does the Minister remember the Select Committee of the House of Commons on funding the arts which found that the arts were gravely and irresponsibly under-funded? Does he also remember the Peacock Report, to which the noble Lord who opened the debate has already referred?
This year's grant has been greeted with dismay by chairmen of enterprises all across the country. The Minister for the Arts derides these people as members of the arts lobby, who, he says, distort the figures and who put forward views of gloom and pessimism. Who are these people? They are the men and women of distinction, for the most part, in the world outside the arts, in business and in commerce, who mostly give their services free because they believe that the arts rank equally with freedom and justice in importance to the quality of life. They know the priceless asset which we have in this country in the artists, designers and craftsmen, who, if only they were financed properly, would bring back one-hundredfold in cash and kudos the investment made in them.
The message of arts funding must be that the level of funding of the arts must be one which makes entrepreneurial sense. That is the message, surely, that the Minister should take on board. Continual squeezing and cutting embedded in uncomprehending Civil Service control is, I suggest, slowly and remorselessly lowering the quality of the arts.
The noble Lord, Lord Donoughue, referred to the situation of the orchestras in this country. Standards are falling throughout the arts, and frustration is driving people out of the industry, but all that the Government can say in reply is, "Go to the wealthy corporations to hail you out". In other words, the arts are a charity, not a necessity; something to be paid for by tax-allowable advertising when profits happen to be sufficiently high. The real subsidy for the arts today is the subsidy of the artists taking part in them who are working day in and day out for a return which is indefensibly low.
In the debate on the gracious Speech not one Minister mentioned the arts. No Minister ever does. The noble Lord, Lord Young, spoke of the achievements of this Government since 1979; six years, he said, of sustained growth. They are prepared, he said, to increase spending projects if the rate of return is good. Their strategy is, he added, to develop the skills and the abilities of all our people. Perhaps the time has come for the noble Lord, Lord Belstead, to introduce the Secretary of State for Employment to the Minister for the Arts.
3.54 p.m.
The Earl of Bessborough: My Lords, in the absence of the noble Lord, Lord Miles, who I was hoping to listen to in this debate, perhaps I should rise now. I must say at the outset that I generally agree very much with Her Majesty's Government's overall arts policy and in particular their increased funding; and I congratulate them on the 5·5 per cent. increase in next year's arts budget.
However, I should like to say a few words about the theatre, especially in the absence of the noble Lord, Lord Miles. Theatres have a product which they can sell every evening and they can, if they organise themselves, gain commercial sponsorship for their work. However, I feel that the Government may have to some extent forgotten about those organisations which provide the back-up, the very infrastructure, of the arts, and which do not necessarily have a product in which they can interest commercial sponsors, and yet the very being of the arts depends upon their existence.
One organisation that comes to mind is the British Theatre Association (the BTA) in which I declare an interest—not financial—as its president. This organisation has one of the most extensive theatre libraries in the world. In my travels I have accepted compliments on its work from all round the globe and from, among many others, Harvard University, which has an enormous theatre collection of its own. The British Library, which is to receive £51 million in grant aid next year, uses the BTA's catalogue of plays as a definitive source. The same British Theatre Association provides information, research and training facilities to everyone involved in the theatre, from the village amateur group to the university drama department, from the national theatre and television companies to children in London who wish to use their Saturday mornings to explore drama. On one point I must say that I agree with the noble Lord, Lord Donoughue, and that is in his very interesting introduction to this debate—there are votes in the arts.
The British Theatre Association's training department and its magazine Drama are run on a commercial basis and are self-financing, but it cannot fund the large theatre library housed by the association. Indeed, I think that Her Majesty's Government have admitted, by the extent of the grant aid they are giving to the British Library, that they do not expect a library to appeal to commercial sponsors.
Years of under-funding of the BTA have this year forced that organisation to sell its freehold premises in Fitzroy Square and move to rented accommodation in Regent's College, Regent's Park. The sale has afforded the BTA perhaps three more years of life; but what happens then? After the £25,000 it receives from its membership subscriptions and the £40,000 or so it receives from certain modest grants, its projected shortfall for next year will be some £95,000. The BTA has set up a fund-raising committee to look into opportunities for commercial sponsors; indeed, it launched a sponsors shopping list for its move which raised £21,000.
I must say that certain commercial companies have commented that it should be the Government's role to fund its activities and, therefore, have not taken up the remit. If the BTA could receive a capital sum
562
amounting, say, to only 1 per cent. or 2 per cent. of the grant aid to the British Library next year, it might live on its income for many years.
I know that the business sponsorship incentive scheme has been successful up to a point. Again, I congratulate the Government on that but commercial businesses wish to be associated with high profile activities and by its very nature a library is a low profile operation.
I believe in commercial sponsorship. Indeed, the Chichester Festival Theatre of which I am president, survives wholly on that type of income and I was most gratified to note that my right honourable friend Mr. Richard Luce, Minister for the Arts, paid a special tribute in another place to Chichester. It was a tribute which I hope that my noble friend Lord Belstead will be able to endorse. However, I feel that some money must be given to this country's—if not the world's—most accessible and valuable theatre archive; namely, the BTA's library.
4 p.m.
Lord Bonham-Carter: My Lords, it is a great pleasure to follow the noble Earl, Lord Bessborough, in this debate, but I hope that he will forgive me if I do not discuss libraries, of which I am singularly ignorant. I agree with almost every word spoken by my noble friend Lord Hutchinson in his measured attack on the Government's policy toward the arts, which fills me with incomprehension.
The noble Lord, Lord Boyd-Carpenter, commented on the fact that the noble Lord, Lord Donoughue, concentrated on Government provision for the arts and not on the provision which has been made by industry and private individuals. This seems to me to be hardly surprising since it is the Government's provision for the arts which we are discussing in this debate today. Secondly, the noble Lord, Lord Boyd-Carpenter, said that he believed that there has been a real increase in Government grants to the arts under the present Government. I must say that all I can advise him to do is to speak to Sir William Rees-Mogg, who is a well known Conservative and an economist who can add and subtract; even he finds this claim insupportable. Alternatively, if the noble Lord goes to one of the companies which is having its activities truncated as a result of the policies of the present Government, I think he will find that argument difficult to sustain.
I should like to address myself briefly to the history of music in this country as an example, in my view, of the way in which support from the Government can be essential to the survival of the arts. It seems to me to demonstrate the role that Government can play in creating assets—one that is intrinsically valuable, such as art, and one that has economic benefits, which are almost quantifiable in terms of its audience. One revolution that has occurred in the last 50 years is that this country has become one of the most musical countries in the world. Having ceased to be the capital of an empire, London has become the capital of music. More music is played in London every day and evening than in any other capital city of the world.
At the risk of simplifying history I suggest that there are three factors which have contributed to this

563
remarkable situation. The first was Sir Henry Wood's "Proms", which were taken up by the BBC, made into and remain today by far the largest musical festival in the world. The second factor was the launching of the Third Programme, when Sir William Haley was director general of the BBC, which brought music into the houses of millions of people to whom it had never previously been available. The third factor was the product of the genius of Keynes who invented CEMA, which subsequently became the Arts Council. Whatever anyone may say about it, the Arts Council has been the main driving force and engine that has allowed the arts to grow, reach and sustain their present condition of excellence. In my view, each of those three elements has contributed profoundly and fundamentally to the musical revolution to which I referred, and each of them involved government investment in the arts. That is how it happened.
I am afraid that it is not without significance that neither of the institutions which contributed so signally to that achievement—namely, the BBC and the Arts Council—appear to stand in very high esteem in the eyes of the present Government. Yet both of them support activities in which this country excels and in which it is acknowledged universally to excel. I had always thought that the Conservative Party believed in excellence, whatever else it did not believe in. Supporting the arts is not "throwing money at a problem"; in fact it is following a very old military maxim which I hope that we shall follow in the future, and that is to support success.
4.5 p.m.
Baroness Carnegy of Lour: My Lords, I go along with the noble Lord, Lord Donoughue, and agree with him that indeed there are votes in the arts, but I strongly question whether his view and the view which has been expressed by other noble Lords on the Benches opposite—that the way forward is bigger and bigger funding by the Government—is the right way in the modern world. Indeed, the argument sounds to me like an argument from the 1960s and '70s, and not one from the 1980s and '90s.
The splendid thing, which is also the problem, is that in this country there is a vast, growing demand for the arts. In fact, the demand is totally insatiable. Enthusiasm is kindled by television, school music, community centre art and drama groups, visits to stately homes and travel abroad. Tourists come here to enjoy the arts. Above all, I believe that the arts are attractive because they help to raise our sights; they help us to share in what is first-rate and to enjoy high standards, when so often we have to put up with low standards and the second rate. In any case, the fact is that people want more and more of the arts at a price they can afford.
I believe that the problem that this presents has been put in a nutshell by the situation of an arts body that I know well; namely, the Scottish National Orchestra. The balance of that orchestra's funding means that at the present time it is heavily dependent on public money. This year it expects to raise 32 per cent. of its income from box office receipts; it receives 4 per cent. of its income from industrial and other sponsorship;
564
62 per cent. of its income will come from what might be called "political money" (54 per cent. from the Scottish Arts Council and 8 per cent. from local government), and it expects to be short of 2 per cent.
We have a Government who are strongly commited to the arts, and, as my noble friend Lord Boyd-Carpenter has pointed out, the total arts budget has increased in real terms by 10 per cent. since 1979. The Scottish Arts council grant has also increased in real terms by 8 per cent. Despite this, the Scottish National Orchestra anticipates a deficit this year of £55,000. The reason for this is quite simple: although the Arts Council grant will increase by 3½ per cent., the Scottish National Orchestra's expenditure, for various unavoidable reasons, is going up by 6 per cent.
The constant difficulty is that whatever politicians decide in general about grant aid, and however great they make that grant aid, it does not necessarily coincide with the needs of a particular part of the arts world. If the politicians decided to put in far more money this year, who is to say that among all the competing and changing demands on that increased budget the £55,000 needed by the SNO would come its way in any case?
Besides this, the scene is changing in other ways. As taxation comes down, firms and individuals are left with more of the money that they have earned and they have more scope for doing something themselves to support the arts. That is having its effect. In the first two years, the Government's business sponsorship scheme attracted £10·7 million into the arts. It is expected that business will contribute some £25 million to the arts this year.
The Scottish National Orchestra must reduce its 62 per cent. dependence on the uncertainties of political money and seek to increase the 4 per cent. that it now enjoys of more secure sponsorship from business, trusts and individuals. That is the message for the arts world in general. Business, trusts and individuals must consider whether the money that they are not now paying in tax might enable them to respond by increasing their direct support for the arts.
The arts are far too important nowadays to be left to the mercy of politicians and to the vagaries of decision-making by any one group. The arts need public funding, but they also need a variety of sources of preferably long-term funding. The Government have begun to create the fiscal framework and the atmosphere to encourage that. I hope that they will move forward in developing a strategy in which it can flourish even better.
4.11 p.m.
Lord Jenkins of Putney: My Lords, the noble Baroness will forgive me if I do not follow her along that Scottish path. However, I make this general comment on what she said. I think that noble Lords with experience of the matter on the other side of the House will agree with me, that one must take a little care about becoming over-dependent on the search for private support. There is a retraction from that in the United States of America. My American friends tell me that organisations were becoming primarily fund-seeking in nature and that the quality of their theatrical output has declined because they were

565
spending all their time and energy in trying to raise funds from private sources. Private money is notoriously fickle. It cannot be relied upon. One may say that government funding cannot be relied upon, but it is less uncertain than private money. However, that is not to deprecate it.
I think that all concerned with private support for the arts will agree that it should be regarded as an additional resource and not as a replacement for public funding. That is the view taken by the Association for Business Sponsorship of the Arts. I am sure that it is the right view. It is an organisation for which I have much admiration.
My noble friend did us a service by introducing this debate. I am sure that he will agree with what has been said on the other side of the House, that it is a pity that we are not having a full-scale debate. I hope that we shall have a full-scale debate. I think my noble friend will agree that it would be a good idea if we had a full-scale debate organised by the Front Benches. It could perhaps take place in the new year. There is a great deal which cannot be said within the confines that we have set ourselves this afternoon.
Much has been published about arts funding. Your Lordships may have read the recent Cork Report. I must confess that I have not fully read it. I have looked through it. I think that on the whole it is a good report. It confines itself to the theatre. It draws attention to the fact that we in this country, although we are doing better than we did in direct support of the arts, fail to give our artistic endeavour the infrastructure which it sorely needs and which in other countries it has.
The noble Earl, Lord Bessborough, has drawn attention to the needs of the British Theatre Association. I agree with him entirely about that. It is an excellent organisation which could do with a little more official money. I do not call it political money; I much prefer to call it official money or, as Chancellors of the Exchequer always say when talking about it, taxpayers' money. They say that when they want to reduce the amount; when they want to increase it, they say that it is government money. I had better not be diverted onto that subject or I shall overrun my time.
We are short of infrastructure. In the report, Sir Kenneth Cork and his committee recommend to the Arts Council that the Theatres Trust should be encouraged. I must declare an interest in that. I was until recently its director. I still have an interest in it. It is necessary to protect theatre buildings. They are extremely vulnerable. The Theatres Trust exists for that purpose. It is a small organisation which needs a little more help. With a little extra help the trust can ensure that theatres remain theatres. There is strong pressure upon theatres all the time to stop them being theatres and to allow the space to be occupied more profitably.
Any space can be occupied more profitably than as a theatre for a couple of hours a night. There is enormous pressure upon those spaces. The Government are looking into changing the use classes order. It is my sincere hope that when they come to amend that order they will do nothing to decrease protection for theatres.
When we consider theatre funding, we are inclined to ignore the structures through which that funding is
566
made. When we consider arts funding generally, we tend to talk in rather general terms about money coming from various sources without discussing how it arrives and to what extent it comes directly from the Minister; to what extent it is siphoned through the Arts Council; to what extent it goes through regional arts associations; and to what extent it comes from local authorities. It is high time we studied that matter because institutions tend to become fossilised. They are established for a special purpose. That purpose is changed but the organisation remains the same.
Your Lordships know how difficult it is to improve our own House. The same applies to the Arts Council, which has a great deal in common with the House of Lords. It regards itself as entirely perfect and incapable of being changed. The instrument of patronage needs changing from time to time. The Arts Council is currently in need of change. The differences that exist in arts organisations, the development of entertainment and its relationship with the arts all need looking at.
There is a document of which I have seen the draft, which discusses all these matters. It is a draft Labour Party policy document. It ranges rather beyond the arts into entertainment and broadcasting. It will be published shortly. I hope that it will be widely read. I hope that it will come out in the form of a Green Paper rather than as a White Paper, so that we can discuss it and that everyone involved can talk about it. We can then make up our minds what needs to be done, because until we make some changes in the structure we shall always find ourselves complaining about the lack of money, without asking ourselves why that lack of money exists.
4.17 p.m.
Lord Raglan: My Lords, I do not have the time to argue with the noble Baroness, Lady Carnegy, but I should point out that Scotland receives more per capita than the English regions. I do not know why. My party would expand funding through the regional associations in England so that after five years the Government would be disbursing twice as much money as they do now.
Difficult judgments must be made when disbursing money for the arts. There is no divine right whereby anyone calling himself or herself an artist should be subsidised. There is no point in artists producing without at least one eye on public appreciation, or there will be more complaints that the more subsidised the arts, the more boring they become. That may be why it is often said that there are no votes in the arts. People say behind their hands what they are diffident of saying straight out. There are few votes in heaps of bricks or concerts from which people stay away. There are no votes in the view, for which in any case there is little historical evidence, that what the public admires in the long term it at first rejects.
The Government have not done nothing for the arts. They have encouraged private giving and made business sponsorship more fashionable. It is a good thing if their policy is to nudge the avant garde more towards pleasing the public and towards being more commercially minded. But it amounts to only half a policy.

567
I am not referring to the fact that, however far one goes along that road, there will always be many deserving causes that need subsidy. The Government, I believe, recognise that. I am talking about their very deliberate restrictiveness. While no Government will push money at the arts with both hands, it is wrong to chuck it about, as this Government are doing, like a man with no arms. To encourage the arts, there needs to be more money spent but spent judiciously. The ACGB has tried to reach this Government by pointing out that a large part of what they give, they get back in taxes and other benefits. But even that has not changed their minds. During a debate in March last year, the noble Earl, Lord Gowrie, told us why they are not relenting. In an intervention, he declared that increasing government arts funding would send a signal to some sections of the community that the professional middle classes were looking after their own. There we have it! It is a matter of principle with the Government.
I know what the noble Earl meant. If you are in charge of public money, you do not dish it out to your friends. In this case, however, it is a worthy sentiment misplaced. It is rather like saying that this Government should have no roads programme in case the noble Lord, Lord McAlpine, makes a profit from it. I hope that he does, even if he sends none of it to the SDP. I look at the issue quite differently. It is a fact that most things in our civilisation which have improved the quality of life have been started by the wealthy. Education, health care, pioneering charities of all kinds, motor cars, central heating—you name it—almost certainly the wealthier section of society has begun it. Even representative democracy was until recently the preserve of the propertied classes.
Wealthy people have more independence, time to think where to spend their money and opportunities of wider horizons, one of which is appreciating the arts. I should like more people to have that opportunity. I say that not because I believe it is good for them. Perish that way of thinking! I say it because others, not so well off, will thereby be able to broaden their minds. "Accessibility" is the word, for Government as well as artists. Let us spread more of it around and allow another dimension to enter the lives of many more people.
4.22 p.m.
Lady Saltoun of Abernethy: My Lords, like the noble Baroness, Lady Carnegy of Lour, I came here this afternoon to make a special plea for increased funding for the Scottish National Orchestra, which, as your Lordships well know, enjoys a worldwide reputation for excellence. Indeed, it is one of the brightest stars in the Scottish artistic firmament. The noble Lord, Lord Polwarth, who was its chairman for five years, would, I know, like to have been here to do that himself. Unfortunately, he was unable to come South. I am most grateful to the noble Baroness for saying quite a lot of what I was going to say. That gives me time to say a little more.
Before doing so, I hope that the noble Baroness will forgive me and that we shall still be on speaking terms if I say that the figure of a deficit of 2 per cent.—that
568
is, £55,000—mentioned by her is, I understand from the chairman, the expected deficit for the year 1987–88, and that this year the expected deficit is 1 per cent. That is a sum in excess of £20,000. By the end of 1988 the cumulative deficit will be £75,000 plus.
I should like to say a word about local authority funding of the orchestra. Prior to the reorganisation of local government in Scotland in the 1970s, local authority funding represented 33 per cent. of the SNO's income. Now, as we have heard from the noble Baroness, it is down to 8 per cent., and it is certainly not expected to increase. Some authorities are generous and some less so. It has to be remembered that for reasons of adequate premises and likely size of audience, the SNO performs mainly in the big cities—Glasgow, Edinburgh, Aberdeen, Dundee, etc.—with limited forays outside that circuit apart from engagements abroad. It is not perhaps surprising that district authorities in whose patches the orchestra is never likely to be able to perform are not always overenthusiastic about funding its upkeep, particularly where money is short and the number of potential patrons rather limited.
I recognise that the £600,000 added in the past two years to the Scottish Arts Council grant was a great help. But it has had to be shared with the opera, the ballet, the chamber orchestra and the baroque ensemble. It has, frankly, not been enough. The orchestra is doing all that it can to increase its income from box office receipts and sponsorship. But there comes a time when the law of diminished returns starts to apply.
An orchestra is labour intensive, very labour intensive. One cannot just sack a few violins and the odd trombone and make ends meet. It is not like the theatre, where one can cut costs in hard times by producing plays with smaller casts or by economising on the scenery. Moreover, the SNO's musicians are notoriously badly paid compared to some, both here and abroad, and particularly abroad. It is therefore in constant danger of losing players to other orchestras and of being unable to recruit new ones. The SNO is really in rather a desperate situation. In any case, living from hand to mouth from year to year is most unsatisfactory and demoralising since it precludes forward planning, which is most important. I implore the Government to make some permanent arrangement to rescue this superb orchestra from its present plight.
4.27 p.m.
Viscount Mersey: My Lords, the Arts Council has now been in existence for 40 years. I am wondering whether we can still see the wood for the trees. I am wondering whether we still know the nature of the beast that is called art, though perhaps beauty would be a better name in the circumstances.
I should like to start by saying what art is not. It is not an advertising medium—for instance, Rothmans sponsorship of a concert. It is not an instrument of foreign policy—for instance, a tour abroad by a ballet company. And it is not a competitive sport—for instance, the young musician of the year. Art may cause all these things to happen. But what art actually is is that which distinguishes us from animals. Both men

569
and animals need to eat, drink and sleep, but only man needs to create and has to create. Children have to draw pictures and sing songs. It is their instinct. As evidence, a man who discovers fossils or old bones may not be certain whether they are animal or human. Then he discovers cave paintings above them and he is certain that he has discovered a human settlement.
It follows that whatever the nature of our society, art will happen. It happened by slave labour; hence the Pyramids and the Sphinx. It happened by the sale of passports to paradise; hence St. Peter's, Rome. It happened by court patronage; hence, Haydn's symphonies. It happened because of a mad king; hence Wagner's operas. It is because we now feel that courts and mad kings cannot pay for the arts that we decided in this country that the state or taxpayer must be the agent that allows the arts to happen. If there were no state funding of the arts, they would happen in some other way. It is important to bear in mind this central point while looking at the amount of state funding and going on to suggest that there are indeed other ways to let the arts happen and that a period of private sponsorship may even be returning.
According to the Arts Council's own table, the grant in 1956 was just under £4 million. In 1986, it is £56 million. I should explain that these are constant prices, using the 1978–79 retail price index as a baseline. In other words, everything is expressed in 1979 pounds. That represents, over 30 years, a fourteen-fold increase in funding. That is wonderful, but surely too it is unparalleled. What policeman today has 14 times the purchasing power that he had in 1956? He might have twice, or even three times, the purchasing power, but surely not 14 times. The same applies to nurses, teachers, pensioners, and indeed soliders, sailors and airmen.
The Government have been proud of their 3 per cent. annual increase in defence spending; and so they should be, for defence of the realm is the first duty of any government. But that is 3 per cent. a year, and in the Arts Council table I find figures of 7·8 per cent., 9·2 per cent., 10·5 per cent., 21·4 per cent., 12·3 per cent., 21·3 per cent., 22·8 per cent., 12·8 per cent., 16·4 per cent., 40·5 per cent. and 23·5 per cent. The result is that we have reached a great height of expense: £56 million in 1979 pounds, which is £136 million in 1986 pounds. This Government rightly regard that height as the edge of a plateau. They have levelled off expenditure. I should only turn that plateau into an even higher mountain by raising money from other sources. Partnership is, I believe, a government wish and it is also what the Arts Council itself wishes. It has a booklet called Partnership. The money should be raised in partnership within industry and private patrons.
Please, my Lords, consider the arts funding in America. I have fully taken aboard the remarks made by the noble Lord, Lord Jenkins of Putney, but the fact is that it is £¼ billion from the state, £1 billion from industry and £8 billion from private patrons. Here, the Arts Council is proud of the £20 million already given by industry; and that figure is fast rising. There are the patrons. Some have already been mentioned by my noble friends Lord Boyd-Carpenter and Lord Wolfson. There is Getty, who funded the new Barry rooms in the National Gallery. There is Clore, funding
570
the new extension at the Tate. There is Sainsbury, backing the new west wing of the National Gallery. An entire workforce has sponsored what I would describe as the greatest piece of sculpture in Europe: Richard Rodgers' Lloyd's building in the City of London paid for by the members of Lloyd's.
To sum up, art is a part of human nature and will always happen somehow. For 40 years the taxpayer has been the instrument of its happening. That should continue at roughly the same level. But let us have more funding; and we are getting more from industry and from the patrons of the arts. Let us have partnership.
4.34 p.m.
Lord Gibson: My Lords, short debates are good for self-discipline but there is not much time for perspective. As a former chairman of the Arts Council for five years and of the National Trust for nine, I should have liked to pay tribute to this Government and to previous governments for what they have done through public funding in both those fields, the arts and our heritage, and I should like to elaborate on that. However, since there are only a few minutes one has to concentrate on one's brickbats rather than one's bouquets.
I should like to speak for a few moments about the Royal Opera House, of which I am a board member and currently chairman of its finance committee. I do so against the background, according to Arts Council reckoning, of a grant below inflation. I am perplexed by the difference between what the Government say about this and what the Arts Council says. I can only say that we get our money directly from the Arts Council and are very much concerned with its view.
Three years ago the then Arts Minister appointed a distinguished public official, Mr. Clive Priestley, to investigate the Royal Opera House in view of conflicting claims about underfunding on the one hand and extravagance on the other. He cleared it of extravagance, declared its funding inadequate in relation to its output and to the nation-wide activities expected of it and made recommendations, since implemented by the company, though sadly not after the first year by the Government. I hope that this will not be taken as what the noble Lord, Lord Boyd-Carpenter, would call wailing. It is in fact a matter of accountancy; accountants are given to wailing. But I spent my life in a public company in which we have been very concerned about these matters, and this is the way it strikes me.
Had the Royal Opera House been level funded—which is what the Government say it is aiming for, and at the moment I certainly ask for no more—had its grant been indexed to the RPI over the three years since Mr. Priestley reported, it would have received £1·30 million extra. If indexed to the earnings index—which is more relevant to an opera house—it would have received £3 million extra. It would now be in the black. As it is, I cannot at the moment see how the Arts Council, unless it robs the regions—which heaven forbid!—can give to the opera house out of the grant which it is to receive from the Government enough to enter the next year with the prospect of solvency. That is a matter of fact. Of course the opera

571
house could do less. It could truncate its activities. But if one wants an international opera house, a ballet house, and Sadler's Wells Royal Ballet, there is a certain minimum cost and it would be irresponsible of the directors to enter next year on present prospects trading on that basis.
None of us, I am sure, wants to see the demise of a great national institution like the opera house. I do not know how many votes there are in the arts, but I know that the pleasure and benefit which the opera house, along with other national companies and the arts generally, bring to vast numbers of people—and in the case of the opera house by no means only in London or to the rich—are very great. Perhaps it would not be so much underestimated, as I think it is, if the house's wider activities were better noted in the press. These are activities such as performances in its travelling tent; its promenade performances, financed by the Midland Bank; its children's matinees; its Hamlyn Week, financed by Mr. Paul Hamlyn to ensure that at least in one week in the year the house can be full of people who never normally go; its educational work, probably the best anywhere and now being copied with our help by the Metropolitan Opera House in New York; its performances in the regions—166 of them last season; its triumphant tours abroad. There is no time to tell your Lordships where it has been but it has been all over the world and it is one of the finest ambassadors that Britain has ever had.
I think of all this and remember what the situation was 40 years ago when I was a young man. One could not have contemplated then that Great Britain would ever have one of the top five or six opera houses in the world, and all this for half the subsidy received by the other great houses of the world, and for giving twice as many performances as they do. Lately, it is true, the house has been under attack from a number of critics. Artistic success tends to go in cycles. The only thing that does not go in cycles is criticism. That has been going on as long as I can remember. It went on in exactly the same way even in what is now looked back upon as the golden age of Sir Georg Solti, and a golden age it was. But the fact is that in the last two years there have been at least six new opera productions of first class quality, and in the same period I can think of at least eight really top class revivals, with a similar number from the ballet. I am constantly astonished at what the house achieves on such a wide canvas for the subsidy it receives and so are all the foreigners who come here, whether to perform or to listen.
National assets of this kind must be kept in being and I simply do not believe that the Prime Minister, who cares for these matters, will want such a flagship to founder. She believes in self-help. The opera house raises some £2 million each year from the private sector, and it has raised £9 million for the first stage of its development scheme. It has shown exemplary self-help. It hopes to raise much more to complete that scheme when planning permission has been obtained.
I should have liked to say something about the regional companies but my time is up. I spent five years trying to help them. I know that many of them are in the same difficulties as the opera house. I can only say that these are facts. One can truncate these
572
activities but one cannot give them less if one still wants to maintain them.
4.39 p.m.
Lord Butterworth: My Lords, I should like to say something briefly about the performing arts, but I must declare an interest. For some years I have been a member of the council and of the finance committee of the Royal Shakespeare Company. As with the Royal Opera House, we, too, were investigated by Mr. Clive Priestley—an investigation which resulted in the judgment that we had been inadequately funded. We were given an increased grant, with the similar experience that the grant has not kept pace with inflation.
I have also had the opportunity of seeing the performing arts, because in the University of Warwick we created an arts centre which I have been told is the biggest outside the Barbican. I should like to support today the main strategy of the Government. I think that the strategy and the balance are right. Of course patronage is vital, and a strong state core in that patronage is important. But it should also be a partnership—a partnership including private benefactors and industry through sponsorship.
Against that background I should like to make three points this evening. First—and I agree with what the noble Lord, Lord Bonham-Carter, said—we must support success. How do you decide in the performing arts what music, what drama, what dance you are going to support? You cannot leave it to a committee. You cannot leave it to an official in his office. There is only one test and that is the box office. Are people prepared to pay in order to see the performance? The test of the box office is vital. There is nothing more exciting than a full theatre or a full cinema, nothing more depressing than a cinema or theatre which has few patrons.
There is of course in patronage the important problem of encouraging new productions, new artists and new writers. It semed to me that the Cork Report had an excellent recommendation which is worthy of support. To raise money for the wider theatre of tomorrow it recommends a levy of 1 per cent. on the BBC licence fee and a similar levy on the independent television companies in recognition of the benefit which television receives from the live theatre. All the training for television is done in the live theatre, and indeed a considerable amount of dislocation to the live theatre is caused by the operation of television.
If the box office is to be the test, we still have to think a little more deeply about the kind of shows that are to be supported. Here I find myself in some disagreement with the noble Lord, Lord Donoughue. We have to remember that almost everyone today has a television, and therefore people are accustomed to see in their own homes first-class performances be it in music, dance, drama or opera. It is therefore no good putting on in the provinces performances which are mediocre, or local, or provincial. The public will stay at home.
Again the Cork Committee was right in recommending that so far as drama is concerned a limited number of companies, probably six in the first place, should be recognised as national companies in the regions. There is no doubt that the provinces need

573
more artistic activity of all kinds, but the public will stay at home and watch first-class performances on the box if what we produce in the live theatre in the Provinces is not first-class.
My final point is about the balance between London and the provinces; about the desperate political problem of the two nations, the North and the South. One recognises the necessity for an artistic emphasis in London, and especially the concentration of museums and libraries in London, but the political problems of the Midlands and the North are now so great that nothing less than a revolution in our thinking is needed not merely in the arts but in other fields as well, but we must start with the arts today.
Although I know that I shall not get universal support, I am bound to draw your Lordships' attention to the fact that many artists wonder why there should be two major opera companies in London operating within a few hundred yards of each other. The Royal Shakespeare Company is unique in that it operates in the provinces in Stratford and Newcastle-upon-Tyne as well as in London. I should like to emphasise that there is something much more important than the arts itself. We have to have a revolution, in our view, to redress the whole balance between the Midlands and the North, on the one hand, and the south-east corner.
4.46 p.m.
Lord Davies: My Lords, perhaps I may first declare an interest in that I have the privilege of being chairman of Welsh National Opera, a company which is the principal provider of opera in Wales and in Liverpool, Birmingham, Bristol. Southampton and Oxford, and receives the fifth largest of the Arts Council grants. During the past 10 years the development of opera outside London has been one of the major successes of the Arts Council policy and I pay tribute to the noble Lord, Lord Gibson, for the support of this cause during his chairmanship.
Total audience numbers have increased over that period by 20 per cent., and the average price paid for each ticket has increased in real terms by 16 per cent. The standard of performance achieved by the regional opera companies has developed to the extent that many productions compare favourably with those anywhere in Europe. I mention in that respect that this certainly applies to "The Trojans", recently produced in Leeds by Opera North, and the Welsh National Opera's Otello, described by a distinguished German critic as the opera event of the decade, and also the Ring Cycle, which is completing its present tour in Bristol during the next two weeks.
This development has been carefully and boldly brought about by the Arts Council in close cooperation with the opera companies and the local authorities. The latter have played a crucial part by putting very considerable resources into the major renovation of their large theatres, a process which is still continuing and which has, in some cases, involved substantial support from private enterprise.
In Southampton a major scheme is currently in progress, and in Swansea the farsighted city council are currently rebuilding much of their Grand Theatre. Sadly, Cardiff still desperately needs a
574
modern, large theatre, and the only theatre in North Wales large enough for full-scale opera, the Astra in Llandudno, is to be closed, according to its present owners.
The opera companies have been bold both in the development of new production styles and in the broadening of the repertory of operas that the public are prepared to accept. Who, 12 years ago, would have thought it possible that two-and-a-half thousand people would pack the Empire Theatre in Liverpool to see a Janacek opera? Not all the new productions have pleased all the traditionalists, but they have generated an excitement that has brought in new audiences to opera, and also generated an enthusiasm within the companies which has enabled them to retain players, singers and staff at much lower salary levels than available elsewhere; which, in turn, has enabled them to achieve such excellence. Innovative marketing and a successful search for commercial sponsorship have also played an important role in this success.
However, the policies followed by the Government and the Arts Council during the past three years have not only halted this splendid development but are threatening the very existence of the regional companies. Arts Council total grant has remained static in real terms. The council has skimmed off money for its development fund, and spread the remaining funds between its existing clients at less than the rate of inflation. For part-time or ad hoc companies the effective reduction in output is approximately proportional to the reduction in grant. But the effect on the output of fully staffed permanent companies, which in regional opera means Scottish Opera, Opera North and Welsh National Opera, is devastating. Welsh National Opera is equipped to give, and has given, 130 performances of full-scale opera in a year. This year the number has had to be cut to just under 100. If the present policy continues, the result next year will be very much worse.
In 1985, the Arts Council recognised the problem and set up its own internal opera study group. This group produced an excellent, clearly argued report. It identified the success of regional opera, and the devastating effect that a continuing squeeze on grant would have on touring weeks in England. The figures showed that Welsh National Opera's touring in England would decline from 16 weeks in 1984–85 to four-and-a-half weeks in 1988–89 and that the total number of English touring weeks by all companies would be halved for the same period. The study group also identified the great disparity, even at 1985 levels, between opera provision in London and in the regions. Some 54 per cent. of the total United Kingdom grant to opera is spent in London. London has 250 opera performances a year; Birmingham has 20. Put another way, there are 37 performances per million inhabitants in London; four per million in the West Midlands.
The Opera Study Group also reached clear recommendations for action to avert a disaster in regional opera provision. It identified a need for further funds in 1985 of £550,000, plus grant increases thereafter following the rate of inflation for regional opera provision to be maintained at the 1984–85 level—a modest sum for what would be achieved.

575
The study group recommended that three courses of action be investigated: first, more funds from the Government; secondly, a transfer of moneys from London to the regions; and, thirdly and least satisfactory to the group, a curtailment of the ad hoc companies—that is, Glyndebourne Touring Opera, Kent Opera, and Opera 80—so that the permanent companies can operate at maximum efficiency. To date, this report lies on the table at the Arts Council. Can the Minister say whether there is any sign that this report will be implemented?
If no action is taken, regional opera activity will decline to the extent that there will be little point in the major companies continuing to exist. I am not crying wolf or being alarmist, because I really am in a position to know about this matter. A success story of international significance will have been frittered away. The attempt to provide people outside London with artistic excellence will have been abandoned.
4.52 p.m.
Lord Birkett: My Lords, although I congratulate the noble Lord, Lord Donoughue, on introducing this debate, I must say that I agree with many noble Lords this afternoon who have suggested that the arts deserve more than a short debate. Frankly, two and a half hours are not enough. The arts deserve better than a series of headlines or paragraphs, which is mostly what they have received in spite of the achievement of several witty and well-argued speeches within the limit of five minutes.
For example, the new report by Sir Kenneth Cork, which was called for by the Arts Council and recently published, was mentioned by one of your Lordships. That alone had dozens of exceedingly important recommendations to make. Its recommendations add up to a total bill of some £14 million and it even goes into a long section on how that £14 million might be raised. That alone, I should have thought, was worth a debate in your Lordships' House, perhaps on the theatre alone.
One other question that arises is the one point that I shall content myself with making this afternoon, because it is the one aspect of post-abolition arts funding. One must remember that it is in the shadow of the abolition of the GLC and the metropolitan counties that a great deal of this afternoon's financial argument has taken place.
Your Lordships will recall that during the dramatic debates that preceded abolition, a great number of people on both sides of the House predicted gloom and despair for the arts as a result of it. I candidly remember being a leading Jeremiah myself. I have to confess that in looking round the arts scene there are no spectacular deaths or collapses. Before we all become too relieved about that, however, I remind the House that in 1986 there are still trees dying from the drought of 1976. Therefore we should be very careful before we assume that all is well.
The one hole which has appeared is not perhaps something that could have been predicted, but it was inevitable. It is the lack of any serious capital fund for the arts in London. There was a time a couple of years ago when the Arts Council had a fund called Housing
576
for the Arts, which is an exact description for it. At the same time two years ago the GLC decided that it would put up a fund of some £2 million, and call it Housing the Arts, especially to stand hand in hand with the Arts Council and declare itself wanting to help the whole policy of capital funding for the arts.
The Arts Council's Housing for the Arts fund disappeared, as the Arts Council candidly found that it did not have enough to do serious capital work. At the same time the GLC disappeared and suddenly from what looked to be a promising prospect a couple of years ago for capital funding for the arts there was nothing at all—absolute zero. In London alone—and the parallels within the regions must be considerable—the Almeida Theatre was for a long time supported and renewed to its present state of near magnificence with the help of local authority funds.
When I think of the prospect of a national jazz centre in London for the whole country; when I think of the repairs and refurbishments necessary at Sadler's Wells, which was one of the prime emphases in John Drummond's report on a dance house for London; and, above all, when I think of the Round House, perched now on the point of conversion but suddenly deprived of capital funds—that concerns me mostly because I am vice-chairman of it, I must confess—when I think of all those projects I do not believe one can look to the local authorities and say, "You must make it up". We can look to local authorities to keep the roof of the local repertory theatre in decent repair, but we cannot expect more of small local authorities where very large organisations of national importance reside.
I realise that the Minister will not be able to give a large and comprehensive answer on capital funding this afternoon, but I beg him to do two things in that direction. One is to listen very carefully, as I am sure he will—it is almost a cheeky suggestion of mine—to what the noble Earl, Lord Bessborough, said about the British Theatre Library. It is of tremendous importance, as indeed is the infrastructure of the theatre. Secondly, I ask himto consider what can be done in the future to make a capital fund for the arts in London. The arts cannot live by bread alone, just as human beings cannot, and they certainly cannot live without bricks and mortar.
4.57 p.m.
Baroness Birk: My Lords, seldom if ever have so many speakers spoken in a mini-debate in this House. The breadth of concern which flows from the smallest organisations to the largest, from London to the regions, from theatre, opera, music, dance, films and video, from the visual arts to museums and galleries which we have heard from all sides of the House today is obviously a reaction to next year's budget which was announced at a most propitious time for this debate. Also since 1979 the Government have broken what was an all-Party consensus which ensured an increase in the Arts Council's budget in real terms every year. Like my noble friend Lord Donoughue, who made an excellent speech in introducing his Motion, I do not propose to go into percentages. There was an annual increase, and the arts budget of last Labour Government, in which I had the honour to be a

577
Minister, went up even at times of most extreme economic difficulty. But in 1979 this stopped.
In order to achieve standstill this year for next year the Arts Council would have needed £2 million more. But to recover to the 1979 position it will require an extra £5½, million, which the noble Viscount, Lord Mersey, did not seem quite to appreciate. The arts world has responded magnificently to this dismal situation. It has cut expenditure where it can, increased box office revenues and raised sponsorship; but, alas! some bodies which are of great value have fallen by the wayside.
Many noble Lords have spoken about sponsorship; but when we are talking about sponsorship there is a rub. I am a governor of the British Film Institute. We have spent seven years doing exactly what the Government wanted us to do and we have raised an enormous amount of money. I believe that we lead in the whole league, having raised more than the so-called "Big Four". This has been achieved mainly through the skill and work of our director. We were among the lucky people who got some money from Paul Getty for a new building for offices, but the assurances needed were that the rent that we otherwise would have had to pay would be used for film production, the care of the archives and for all the artistic objectives for which we exist.
But what has happened? The increases that we have got will not cover the wage increases that will have to be paid because they are put at much less than the amount of inflation. Therefore, we feel very strongly—and this applies not only to us but to other bodies, as well—that money that has been given in good faith by generous donors, whether large or small, and which has been given for the artistic side of the work, is having to be used for the nuts and bolts. We think that these people must feel betrayed because of this.
The museums and galleries also have suffered enormously in this respect, which means that they can acquire fewer objects. The situation becomes a completely rundown affair, which juggling with the figures does not alter. I agree entirely with all noble Lords who have said that sponsorship should be the topping up and not the core seed of the amount for the arts. The Government have to take the place of the patrons who supported art in the past and who were quite prepared to take on unknown painters, musicians and composers whose works today are of enormous value and have tremendous historic reputation. Without this, how are we going to be able to finance the workshops, the ethnic groups, the women's theatre, the children's theatre, the local authorities who last year made a marvellous partnership with the Arts Council?
The noble Lord, Lord Birkett, was absolutely right when he said how difficult it would be for these local authorities to repeat the performance, particularly as many of them are rate-capped. It is true that the arts is an expanding industry. As has been pointed out many times, it brings money, prestige and employment; and for that reason alone—but not just for that reason—one would think that any government would want to cherish it. If a number of people are out of work in, say, the motor industry there, is, quite rightly, an outcry, but unfortunately unemployment in the arts industry seems to be taken for granted.
578
To those noble Lords who have said—and my noble friend Lord Donoughue, mentioned this—that the Government think there are no votes in the arts, I would say that any government who takes that view are likely to be found rather foolish. They would take such a view at their peril because the activities in the arts are increasing all the time, the demand is enormous and the need for education (which we have not really been able to touch upon) is also very great. I am the President of the Association of Arts Institutions. Of the number of applicants to enter our courses, courses which go from fine arts, graphics and fashion to design, over 50 per cent. have to be turned down, not because of lack of merit—that would account for only a small number—but because the number of places is being cut all the time.
One of the results of that is that in the area of design, which is part of the arts complex in this country, we are falling miles behind our competitors abroad and therefore our manufacturing industries are suffering as well. Therefore, there is even more reason for our investing in the arts. On the other side of things, the side about which I feel very passionately, I feel that the Government have a responsibility to the people to open the doors to the broad base of the arts, to enhance the quality of life, to educate our eyes, our ears, our hands and to bring enjoyment and also to bring fun.
To provide art for the country, with its increasing demand for it, with its increasing wish to participate, with the greater spread (about which we have heard this evening) right across the country and into Scotland and Wales, certainly mean more investment, more Government money, in the arts. Until that happens, we shall be the bottom of the league in Western Euroope and really a disgrace to any civilised community.
5.5 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the Motion moved by the noble Lord, Lord Donoughue, this afternoon has been valuable in calling attention to a wide range of issues which noble Lords have been able to raise despite the time limit, and, although it would not be the unvarnished truth to say that I agreed with everything which the noble Lord and the noble Baroness, Lady Birk, have said in their speeches, I welcome the opportunity which this debate provides to repeat the Government's commitment to the arts. I should like, first of all, to join with my noble friend Lord Boyd-Carpenter in saying that I am a bit perplexed that, whereas the noble Lord, Lord Donoughue, in his opening speech, said that in his view the arts are absolutely booming with success at the present time, yet both he and his noble friend Lady Birk criticised the Government for the support they are giving.
If one uses the gross domestic product deflator as the principle for one's calculations—something which is used by all government departments—then I may say to the House that the announcement last week by my right honourable friend the Minister for the Arts of the budget for next year of £339 million means an increase of £17 million in cash terms over the year that we are in and a cash increase of some 5½ per cent. I may also say that since 1979 central government expenditure on

579
the arts has increased by over 13 per cent. in real terms, and I emphasise that this excludes entirely the additional provision that has been made to deal with the funding of the arts following the abolition of the GLC and the metropolitan authorities.
I would therefore say that I believe that we have more than honoured our manifesto commitment to maintain central government funding for the arts in real terms. Like my noble friend Lady Carnegy, if the noble Lord will forgive me for saying so, although I very much enjoyed Lord Donoughue's speech I found his criticism of government provision really to be somewhat out of date. I had much more sympathy with the noble Lord when later in his speech he said that he felt there were broader responsibilities which fall on both government and all of us who are interested in the arts.
In particular, I would say to your Lordships that I believe very much that the Government have a much broader role than simply producing £340 million of the taxpayers' money for the arts. Our task must surely be to create the framework and the conditions under which the arts of this country flourish, and in pursuing this strategy we have taken a series of initiatives which open up new opportunities.
In his speech my noble friend Lord Bessborough drew attention to the Chichester Festival Theatre, with which I know my noble friend has been connected for some time. I would certainly endorse the tribute by my right honourable friend the Minister for the Arts to the remarkable self-help exemplified by the Chichester Festival Theatre; and I should like to thank my noble friend and my noble friend Lord Boyd-Carpenter for going on to refer to business sponsorship of the arts, which has increased so dramatically in recent years. From a starting point of half a million pounds in 1976, business sponsorship has risen to over £20 million today.
My noble friend Lord Butterworth will be interested to know that over 70 per cent. of the business incentive scheme awards go to arts bodies outside greater London. My right honourable friend is maintaining the budget for the scheme at £1·75 million for the coming year, a scheme which now is attracting £10½ million of new money and involving 350 new businesses.
My right honourable friend also announced last week the Arts Marketing Scheme, referred to as a novel, pilot marketing plan by my noble friend Lord Wolfson in his speech, which will be launched shortly to help arts and heritage bodies improve the effectiveness of their marketing and their success in reaching a wider public.
I was grateful to my noble friends Lord Butterworth and Lord Wolfson for saying particularly that the support of private patrons is very important. As we all know, recently there have been the most enormously generous gifts from major patrons, ranging from £1 million to £50 million for the benefit of such great institutions as the National Gallery, the British Film Institute (mentioned by the noble Baroness, Lady Birk), the Tate Gallery, the Royal Opera House, the National Art Collections Fund and the British Library.
580
And, of course, in addition to gifts of cash there are gifts in kind.
My noble friend Lord Boyd-Carpenter drew attention to the Government's taxation policies, which have done a great deal to encourage this private giving. In particular we have improved the incentives and tax reliefs for charitable giving, particularly through the covenanting system. I very much agree with my noble friends Lady Carnegy and Lord Mersey—and I enjoyed his speech very much indeed—that growth in arts provision is surely a matter of plural funding, and the Chancellor's initiatives are designed to encourage just that.
In addition to the Government's commitment to do their best to keep up the level of governmental support and to create conditions in which the arts can develop and flourish, there is of course a third and very important aspect of our policy; namely, to safeguard Britain's heritage. In 1980 the Government created the National Heritage Memorial Fund under the distinguished chairmanship of the noble Lord, Lord Charteris. May I say that we value the fund highly. It has proved a valuable husbander of its resources and a wise spender on heritage items. The noble Lord, in his very amusing speech, was good enough to confirm the value of government help in saving a variety of very important houses and buildings. The noble Lord mentioned in particular the report on longer-term funding of the fund, and at the present time this is under consideration.
I do not think anything should be said from this Front Bench without a mention of museums and galleries. Since 1979 funding from the arts budget for the national museums and galleries has increased by 15 per cent. in real terms. The change to grant-in-aid status for the national museums and galleries with benefit from the present year will enable them to obtain full benefit from any additional income and support that they can generate. Also, government funds have been assisting the expansion of national museums and galleries; for example, the major development of the Imperial War Museum—to which, of course, the museum itself is contributing £2·5 million. Then there is outside London, where so much emphasis has been laid by many of your Lordships. For example, on Merseyside, Liverpool's Albert Dock is housing two major projects: the Tate in the North project, which the noble Lord knows so well, where a warehouse is being converted with Government, local authority and private money to house a major new gallery of modern art; and the Merseyside Maritime Museum, where a lively and attractive new facility for visitors will be fully opened next year.
The bulk of expenditure on libraries, as your Lordships know, is undertaken by local authorities, supported by the rate support grant. Here, again, I have to say that on the basis I have taken it is a story of real-terms growth of 9 per cent. since 1979 to 1980; and next year the local authorities' provision for current expenditure on libraries and museum services represents an increase of 14 per cent. on this year's plans.
May I finally, in my own prepared words, come to the performing arts and, of course, the position of the Arts Council. Most of your Lordships have mentioned

581
these matters. Next year the Arts Council will receive £138·4 million. This represents a basic provision of almost £114 million, a continuation of the special provision of £600,000 for Scotland following local government reorganisation there, and an increase in post-abolition funding of £3 million over the planning figure for each of the next two years given to the Council last January. Therefore, post-abolition funding will he £24 million and £23 million next year and the year after.
The increase in basic grant is about 3·5 per cent. over the figure for the current year. The increase in abolition funding is picking up three-quarters of the so-called taper previously announced. But in saying that, let us remember that local authorities have been relieved of the very substantial precepts on them previously levied by the GLC and the metropolitan counties. I really do think it is entirely reasonable that they should be expected to make a slightly higher contribution next year. Last year the local authorities contributed £14 million against the central government's £25 million to make up the abolition gap. In the event, the gap was covered in full and all major arts bodies in abolition areas have continued their work.
My reply to the noble Lord, Lord Hutchinson of Lullington, is made with great respect, because the noble Lord has great experience. I suggest it would be as well to see what the Arts Council makes of the distribution of its grant before individual companies cry "Wolf!". Your Lordships will remember last year the great anxiety about the future of Sadler's Wells, the two theatres on Tyneside, the Empire Theatre at Liverpool and the Philharmonic Hall there. All seem to have survived successfully, and I was grateful to the noble Lord, Lord Birkett, despite the warning he gave, for making this particular point.
If I may, I should like to respond to some of the individual points made by your Lordships during the debate. The noble Lord, Lord Ritchie, referred to the need for a central ministry. I am afraid that we do not accept the case for a large interventionist central ministry for culture, communications and heritage. We are seeking to encourage local and regional development and individual initiatives. In this way we feel we are encouraging success, and we believe that the Arts Council is doing so also.
Incidentally, I was very glad that the noble Lord, Lord Bonham-Carter, paid tribute to the Arts Council in terms of music. The four London orchestras which are supported by the Arts Council are giving more concerts than ever before. And, of course, the Arts Council, through the South Bank Board, has taken over the concert halls from the GLC and is devising and presenting imaginative programmes.
The noble Lord, Lord Murray of Epping Forest, made an exceedingly interesting speech, if I may say so, which I am sure appealed to all of us wherever we sit in this House. He welcomed the Carnegie Report on arts and the disabled. My right honourable friend has also welcomed it and has drawn it to the attention of arts bodies. I am glad to say that many of them, including the Arts Council, the Crafts Council and, indeed, the British Film Institute, have already drawn up policy statements based on the report.
582
The noble Lord, Lord Charteris, in addition to what I have already mentioned, spoke about the purchase grants in connection with national museums and galleries. I will face the point that we looked at the purchase grants. My right honourable friend the former Minister looked at the purchase grants and decided a couple or so years ago that what was needed was better conservation and display, together with better maintenance of buildings. I believe that was right, and that it is in the long-term interests of the institutions if more resources are available. Of course we should want to raise purchase grants, but they are only part of the picture of acquisitions which I know the noble Lord would have mentioned had he had the time.
There is also the benefit of acceptances in lieu of tax, allowing now up to a further £10 million in a year to be spent on works of art. And, of course, there is the valuable work of the National Heritage Memorial Fund, which the noble Lord chairs. My noble friend Lord Bessborough made a particular plea for the British Theatre Association. I should like to say to my noble friend and to the noble Lord, Lord Birkett, that government officials are discussing with the association as to whether a survey could be carried out of ways in which the functions of the British Theatre Association library could be secured in the longer term. Your Lordships will not be surprised if I say that it is not the responsibility of my right honourable friend to support specialist libraries; but I hope that both noble Lords will feel that I have listened carefully to what they said. There is some response, and we do take seriously the possibilities of what has been a very interesting organisation.
Talking of the theatre, I cannot resist saying in passing that I have had some briefing for this debate from the Society of West End Theatres who have gathered figures which I was surprised showed such a splendid result, knowing that in the past there have been problems about filling theatre seats. The information I have is that last year 10¾, million people attended West End theatres, and up to the first week of September this year nearly 7 million people have attended. It is dangerous to extrapolate, but the indications are that the total for this year will be little short of last year's despite the fact that there were fewer tourists in London. What is further encouraging is that audiences are getting younger and that more people appear to be coming to the theatre from outside London.
I was grateful to my noble friend Lord Wolfson for his speech. He took the Government to task for not producing the public expenditure figures dividing off capital spending from recurrent expenditure for the arts. I understand that this is, in fact, done in the public expenditure White Paper. Of course, I admit to my noble friend that Government expenditure is shown in cash terms. Resources have to be found from taxpayers in the year in which they fall. We cannot disguise that, and that is why we act in that way.
I should like quickly to say to my noble friend Lady Carnegy and to the noble Lady, Lady Saltoun, that the Arts Council's grant for next year has been increased by 3½ per cent. In that figure, as I have said, is a special provision of £600,000 in this year's Arts Council's budget; again, for the support of the Scottish national

583
companies. This is an additional provision, one over and above what goes to the Scottish Arts Council. That extra £600,000 is, of course, a sum of money of which the beneficiaries can certainly include the Scottish National Orchestra; and, as I say, that special provision of an extra £600,000 is being continued. However, at the end of the day it is for the Arts Council to decide what is the appropriate share to distribute to the Scottish Arts Council.
The noble Lord, Lord Raglan, spoke of his desire to spread the benefits of the arts more widely, as indeed did my noble friend Lord Butterworth. I think it is fair to say that this is happening. There is a tremendous increase in the funding by the Arts Council of regional arts associations. This means not only that art is exhibited in the regions as much as in London, but that small bodies which involve people as participants, not just as spectators, receive a larger share of the whole.
The noble Lord, Lord Jenkins, mentioned the matter of the Theatres Trust and its income. Of course, the trust now has more fundings this year. It inherited the freeholds of the Garrick and the Lyric theatres from the GLC and this has provided a new source of income.
The noble Lord, Lord Gibson, raised the matter—but very briefly, I know—of the position of the Royal Opera House. The noble Lord would not wish me to go into this in detail now, even if I could, except to say that this great institution, the biggest recipient, of course, of any grant at all, had the plea made for it by Mr. Priestley that its grants should be index-linked. That has not proved possible. On the other hand, there are, as the noble Lord very well knows, economies which Mr. Priestley recommended and these have not yet worked through the system. Once again, I have listened very carefully indeed to the speech which the noble Lord made.
Lord Gibson: My Lords, I would only say that economies have been made.
Lord Belstead: Yes indeed, my Lords. But, as I understand it, they have not worked through the system in the benefits that they have produced.
The noble Lord, Lord Davies, was perfectly accurate in his reference to the arts opera report made to the Arts Council. The council are still considering it but have made no proposals, so far as I know, about wider touring. Opera touring is, of course, very expensive, although the noble Lord gave us a splendid recitation of the success of many of the touring companies.
Finally, in response to the noble Baroness, Lady Birk, I will draw the attention of my right honourable friend to what the noble Baroness has said about the funding of the British Film Institute. But the noble Baroness, will, I think, accept from me that there is a real terms increase on the basis that I have been using in figures of 1·2 per cent. of funding for the British Film Institute. I am sure that the noble Baroness and I would like to see more, but the noble Baroness reminded us of the wonderful way in which the institute has managed also to attract private funding;
584
and think that the institute will continue to go from strength to strength.
That is the end of my time. I would simply add two more sentences. I believe that in the arts we need to rely on a variety of funding. I believe that Government policies are creating a climate in which this can continue to happen.
5.25 p.m.
Lord Donoughue: My Lords, I will not detain the House much longer with particular responses, especially having had the privilege of an allocation of 15 minutes at the beginning and having overrun by two minutes. I apologise for that and hope that your Lordships will forgive me as something of a newcomer—a sort of novice hurdler in this kind of race.
I would make two points briefly. One is on the point of private sponsorships mentioned by the noble Lord, Lord Boyd-Carpenter. I believe that it is a delusion to think that private sponsorship can ever replace public funding in this country. Corporate sponsorship in America is still only 6 per cent. Private sponsorship is much more, but they have a totally different regime of tax incentives from ours.
To the noble Lord, Lord Butterworth, I think I understood what he meant when he talked about the only criterion being the test of the box office. But I would say to him—and I am sure he agrees—that that is a pernicious doctrine if too rigidly applied. Virtually all pornography would pass that test and most of the great artists, composers and the writers of this and previous ages would not have passed it for all, or much, of their lives.
In general, I should like to welcome the excellent contributions from such a large number of noble Lords. I think that they have brought a range of experience and a depth of knowledge that has contributed to a quite superb debate. I am personally reassured because I believe a large majority expressed support for greater provision for the arts, and those who disagreed with me did so courteously, especially the Minister who is so charming and disarming. But they, in their disagreement, have helped me to learn much, and for that I should like to thank them.
I do not believe, as the noble Lord, Lord Boyd-Carpenter, said, that my speech was partisan. It was certainly not meant to be that. It was partisan for the arts and I am partisan, and would be against any government that neglected the arts.
Most speakers had much more to say than there was time to present. I should like to conclude by supporting the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Birkett, in their suggestion that we have proper time in future for a full discussion of this important subject. I thank your Lordships very much.
Motion for Papers, by leave, withdrawn.

Balance of Payments
5.28 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, it might be for the convenience

585
of your Lordships if, with permission, I repeat in the form of a Statement the reply given in another place by my honourable friend the Minister for Corporate Affairs in respect of the invisibles trade estimates for October published yesterday. The Statement is as follows:
"Statistics of invisible trade are compiled by the Central Statistical Office mainly from quarterly and annual surveys of businesses and individuals engaged in invisible trade transactions. This information becomes available much less frequently than the corresponding information for visible trade. Estimates of the invisible balance for the third quarter of 1986 and the month of October were calculated by the statisticians of the Central Statistical Office on the basis of the latest information available to them."
My Lords, that concludes the Statement.
5.30 p.m.
Lord Williams of Elvel: My Lords, we are most grateful to the noble Lord the Minister for repeating in the form of a Statement the reply given by his right honourable friend in another place. The Private Notice Question which gave rise to the Statement comes at a convenient time. I hope the noble Lord will recognise this. It is convenient because the balance of invisibles has suddenly shot up in the estimate to £900 million in October. I hope the noble Lord will accept that we mean no criticism of the statisticians in the Central Statistical Office if we ask certain questions on the Statement which the noble Lord has just made.
My first question is this. Why, in the view of the noble Lord, is the City so sceptical about the estimate of invisibles which has just been published? The Financial Times has reported that the City greeted this estimate with widespread scepticism. My second question is this. Could the noble Lord tell us, since we are dealing with estimates, what is the estimated effect of the recent devaluation of sterling, and what is the estimated real growth in what is referred to in the Financial Times article, to which I have just referred, as
"the detected buoyancy in all sectors of invisible trade"?
This second question refers to what I believe is a necessity to re-establish the integrity of Government statistics so that the financial markets may receive proper signals, and not signals that are immediately discounted. Is it not time that the methodology for calculating these invisible earnings is published fully and frankly so that we can all examine the statistical base and how it is compiled?
In the DTI notice we have a welter of statistics about visible trade; we have one line on the invisible balance. I do not have to remind the noble Lord the Minister that if this were a private prospectus this figure would be subject to audit and examination by an outside firm. It is not for me to suggest that Government statistics, and particularly those compiled by the Central Statistical Office, are in any way false. However, I believe it is time that the integrity of the statistics should be established and the methodology fully published. I hope that the noble Lord will be able to reply to that.
Lord Ezra: My Lords, I too am glad that we have the opportunity of discussing the most recently published current accounts results for the month of October. It is most desirable that we should improve our balance under any heading, whether it be visibles, invisibles or anything else. Nevertheless, the changes indicated in the figures for the month of October raise one or two questions. I should therefore like to follow on the questions already posed by the noble Lord, Lord Williams of Elvel.
My first question is this. Having looked carefully at the press notice issued by the DTI, I sec in a footnote that invisibles for July to September are estimates based on partial information, and are subject to revision when the balance of payments estimates for the third quarter of 1986 are published on 4th December. If more accurate figures will be available on 4th December, why should further estimated figures be introduced in a document dated 25th November? Would it not have been better to give us figures based on a more accurate quarterly survey (to which the noble Lord, Lord Lucas of Chilworth, has referred) on 4th December?
Secondly, it is an unfortunate fact that, although invisibles are evidently contributing very much more, there is a further deterioration in our non-oil visible trade and the figures contained in this latest published document show that for ten months of this year the deficit on non-oil visibles amounts to 1 1viji7 billion, compared with just over £10 billion for the whole of last year. This deterioration in our non-oil visibles is continuing all the time and is bound to cause concern. I hope that the noble Lord will comment on this aspect of the figures which have just been published as well as on the invisibles, bearing in mind that at the same time the contribution from oil is less than half what it was last year.
Lord Lucas of Chilworth: My Lords, I am grateful to the noble Lord, Lord Williams, and to the noble Lord, Lord Ezra, for their reception of the Statement I have just made. As regards the first question of the noble Lord, Lord Williams, concerning the scepticism of the City as reported in the newspapers, on occasions such as these I prefer not to comment upon what newspapers report as being the view of certain bodies. I frankly do not believe that the City is sceptical about the figures.
As regards the effect on devaluation, perhaps I may say that the prospects for exports are good. This view is endorsed by the CBI. There are two reasons for the improvement in the prospects. One reason is a general expectation among forecasters that world trade will increase next year, and certainly one effect of the fall in sterling this year is that United Kingdom exports will be even more competitive than they are already. Imports are high although there are some signs that the rise is levelling out. One of the effects of the fall in sterling is that goods produced in the United Kingdom will be more price competitive and imported goods will be less so. There is then an opportunity for industry and individuals to take advantage of that situation.
As regards the integrity of statistics, I think it is well known to noble Lords how these figures are prepared. The methodology is published fully and frankly in an

587
annual publication, the Pink Book, concerning the balance of payments.
In answer to the first question of the noble Lord, Lord Ezra, in which he drew attention to the footnote in the press notice, the monthly figures are an estimate or projection. Invisibles for July to September are estimates based on partial information subject to revision when the balance of payments estimates for the third quarter of 1986 are published on 4th December. I think he would find it rather odd if the Government did not take advantage of figures produced by statisticians, whether they are estimates or otherwise. Both the noble Lord and the House will recognise that where invisibles are concerned, much of the information is based on annual surveys. It takes something like 12 to 18 months for the full effect of those surveys to be brought home. As soon as such information becomes relevant, it is added to the figures, unless the change is a minor one. In one month in the last quarter invisible earnings on paper were down to £600 million, but the figure revealed was £653 million. We felt that that was not a significant amount to alter the figure for one month, so we therefore used a quarter.
The noble Lord drew attention to the press notice which set out, as it always does, the balances on visible trade. I think the noble Lord will forgive me, particularly since there is another debate to take place, if I restrict my responses this afternoon to the matter in front of us concerning invisibles. The noble Lord knows very well that if he cares to table a Question on the deficit, or indeed on any matter concerning trade in manufactured goods, I shall be delighted to answer him.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that those of us who have worked in the relevant departments of government have the highest regard for the integrity and efficiency of the statisticians who produce the large number of statistics required by government, and have learned to have very great confidence in them? On a lighter note, has my noble friend also noted how dejected the noble Lord, Lord Williams of Elvel, always looks when there is good news?
Lord Lucas of Chilworth: My Lords, I am grateful to my noble friend Lord Boyd-Carpenter. I should like to echo most sincerely his complimentary remarks about the statisticians at the Central Statistical Office. They deal professionally with a multitude of information that comes to them from a variety of sources; and they are quite outside the influence of Ministers, certainly of those in the Department of Trade. This was evidenced in the figures produced by the Central Statistical Office in August, which were less than happy, as I think my noble friend will agree.
With regard to my noble friend's second question, I have always maintained that in a changing relationship across the world in terms of trade, manufactured and invisible, we have to take advantage where we can of our skills. Indeed, the City does just that, and has an exceptionally good record of earnings, which have made a significant contribution to the economy and to the wellbeing of our country.
Lord Diamond: My Lords, it may be a little unfortunate for the noble Lord, but does he recollect the speech I recently made praising the work of and again accruing from the financial services and services generally? He will recognise that I have every sympathy with that aspect of our economy. Is he further aware that I share the views of the noble Lord, Lord Boyd-Carpenter, about the excellent service provided by the Central Statistical Office to departments and, indeed, to Royal Commissions when they have need for continual contact, as did one of which I had the privilege to be chairman?
On that basis, perhaps I may ask the noble Lord two questions. It is of course the case that the Government will have gone into these figures very carefully and will know the causes of any unusual movements. They will have inquired into them. Will the noble Lord therefore explain to us why in this one month there has been an increase of enormous proportions on the net balance of invisibles—speaking offhand, something like £2½ million over £6½ million; about 35 per cent. in one month—whereas those of us who have some slight experience of it always had the feeling that these invisibles went on from month to month in a fairly regular way? It was unusual, for example, for Lloyd's to write a policy that was ten times as big as it had written before, thereby achieving some kind of balance which would help the invisibles in a most extraordinary way. It is not as though we are suddenly exporting aeroplanes or importing diamonds, which can throw the visible figures out of kilter. It is quite against normal expectations.
My second question is related to that principle of normal expectations. Can the noble Lord refresh our memory as to the last occasion or occasions when, in mid-stream as it were, the figures for invisibles were altered to this extent in this way?
Lord Lucas of Chilworth: My Lords, I am grateful to the noble Lord, Lord Diamond. I recollect a number of speeches he has made in which he gave due credit to the financial services, which, as I have said, make a significant contribution to our wellbeing. Again, on behalf of the statisticians in the central office, I am glad to accept his remarks.
The noble Lord asked whether the Government will go into the figures. Let me make it quite clear. The Government will of course read the figures and draw what conclusions they can. It is not a question of the Government going into the preparation of the figures. My noble friend Lord Boyd-Carpenter made that point quite clear. There were no significant differences in October; for example, there was not a large purchase of valuable metals or the sale of an extraordinary number of aeroplanes. The difference in the figures—the noble Lord is referring to the previous publication, where we had set down an estimated figure on the invisible balance of £600 million—is due, as I suggested in earlier responses, to the availability of more up-to-date information. This has suggested that those estimated balances were unrealistically low at £600 million, and there has been a revision upwards to £800 million.
The figures are the result of large flows both inward and outward. The balance therefore has to be subject to fairly large revisions when that occurs. I have to tell

589
the noble Lord that I cannot refresh his memory or indeed my own by telling him when there was (and I use his words) such a "significant revision in the figures".
Lord Harris of Greenwich: My Lords, is the noble Lord aware that some of us find it mildly surprising that the noble Lord, Lord Boyd-Carpenter, regards the continued deterioration in the British balance of payments as good news in some way or another? Perhaps I may ask the noble Lord one specific question. While the Government are not responsible for what appears in the newspapers, does he agree that the series of statements in the serious financial press this morning indicating widespread disbelief in what has been presented as this remarkable improvement in our invisible earnings in this month makes it even more necessary for the Government to have given a far more detailed explanation yesterday of why there was this massive apparent change in our fortunes? Although the Government are not responsible for what appears in newspapers, is he aware that many people who have to take a view on sterling read these newspapers, and that therefore the negative speculation that has appeared in the press over the past 24 hours could be seriously damaging to the interests of this country? Could that not have been avoided if the noble Lord's own department had been more careful about the way in which the figures were announced yesterday?
Lord Lucas of Chilworth: My Lords, the noble Lord, Lord Harris, is quite unfair when he says that the department should have taken a good deal more care in the release of the figures yesterday. Your Lordships will know that some years ago there was great argument about Governments releasing figures on days which particularly suited their political convenience—when, for example, there was a by-election. It was agreed that the Government would set down at the beginning of each year the dates upon which the quarterly figures would be released. So there is no question of my department having, as it were, control of the date and time of release of the figures. An undertaking had been given—an undertaking to which my department kept.
I do not answer for the press. I should very much have preferred the City to have had an opportunity to study the detail in the notices which will be issued by the Central Statistical Office on 4th December. This will give confirmation of the third quarter, and, by virtue of that, the first and second quarter's figures. I believe the City will then be in a very much better position to assess the situation.
There are those abroad—and I do not mean outside this country—who will seize upon anything that reflects credit on various parts of our economy, those who work in industry, the invisibles, and trade and commerce, and seek to put the worst complexion on it. There is no doubt at all, as I said earlier, that the invisibles balance, which has been revised upwards, reflects the continued worth of that sector of our economy, and all credit should go to those who are engaged in that sector.
Lord Boyd-Carpenter: My Lords, can my noble friend explain why the noble Lord, Lord Harris of
590
Greenwich, does not regard a very substantial improvement in the balance of payments as good news?
Lord Lucas of Chilworth: My Lords, it is not for me to give explanations as to why the noble Lord, Lord Harris, should present his argument in that way. I do not want to be difficult with your Lordships—perhaps it is not for me to say—but I feel I cannot help your Lordships further in explaining and giving an answer to the specific Question which was put down in another House. I really wonder whether I can help your Lordships further this afternoon.
Lord Williams of Elvel: My Lords, perhaps I may ask the noble Lord whether he would be kind enough to help me a little further with my first question—how much the increased estimate is due to the devaluation of the pound sterling relative to other currencies, and how much it is due to the buoyancy in invisible earnings.
Secondly, I stress to the noble Lord the importance of the methodology. It was pointed out by the noble Lord, Lord Ezra, and rightly, that invisibles are taking up the balance, as it were, as our visible trade goes into serious imbalance. It is therefore all the more important that outside commentators should be able to see exactly how these figures are arrived at, and on what basis.
Thirdly, perhaps I may reply to the noble Lord, Lord Boyd-Carpenter, and remind him that we are dealing with estimates and not with facts. I had to remind the noble Lord the other evening that I like dealing only in facts.
Lord Lucas of Chilworth: My Lords, since the noble Lord opposite prefers to deal in facts, and since he invites me to make comments and give figures on a series of estimates that are before your Lordships, I think I shall resist the temptation.
Lord Ezra: My Lords, I think we are all still interested in knowing at the earliest date the reason for this apparently happy development of moving up from £650 million surplus in June to the figure of £900 million in October. Am I right in assuming that when further information is available on 4th December a detailed background to this situation will be revealed?
Lord Lucas of Chilworth: My Lords, the quarterly figures normally released contain very much more information than is provided in the monthly figures. I am quite sure that the noble Lord will then be satisfied.

Academic Medicine and the NHS
5.53 p.m.
Lord Prys-Davies Lord Prys-Davies rose to call attention to the state of academic medicine and its effect on the National Health Service; and to move for Papers.
The noble Lord said: My Lords, I rise this evening to draw attention to a matter of great concern for the future of medicine in our country and the future of the National Health Service. That future lies to a considerable extent in the hands of the teachers of

591
medicine. The medical schools and the teaching hospitals associated with them are vital to the National Health Service. If our society wants to maintain and improve service to patients, our medical schools must be able to produce the number and quality of doctors that the service requires, to promote postgraduate education, and to enable them to work in an environment which will allow outstanding doctors to pursue their teaching and research so as to extend the frontiers of medical knowledge.
It is no accident that the teaching hospitals have been centres of excellence within the NHS since its founding and indeed for generations prior thereto. They have been dynamic institutions, leading their cities and their regions in medicine, setting high standards of patient care and building up academic departments which have acquired prestige both at home and abroad. I think we can properly regard our medical schools as national assets.
It must therefore be a matter of grave concern that eminent men and members of distinguished institutions, who know what they are talking about and who do not express themselves in exaggerated terms, are now expressing publicly alarm and apprehension at the difficulties which have confronted the medical schools in the United Kingdom for the past six or seven years and which will continue to plague them unless government policies are reversed.
To illustrate the nature and extent of the concern let me give your Lordships a few examples. Mr. Maurice Shock, the chairman of the prestigious Committee of Vice-Chancellors and Principals, reviewing the state of medical education in the United Kingdom, warned in June last that,
"everything built up since the war is in danger of being dismantled unheedingly".
None of his predecessors has been moved to utter such a warning.
The British Medical Association felt itself compelled last summer to convene two seminars to consider the magnitude of the crisis in academic medicine. We are grateful to the BMA for the lead that it has taken. Sir Christopher Booth, the distinguished director of the Clinical Research Centre and this year's president of the BMA, in his presidential address last June drew attention to the crisis facing clinical research in an era of research which had never been so challenging and the benefits so rewarding.
The National Association of Health Authorities, in its 1986 review of university funding and the NHS, found that the threat of further revenue cuts:
"hangs heavily over the medical schools and the teaching hospitals".
It called for concerted action by the two departments concerned, the Department of Education and Science and the Department of Health and Social Security.
The General Medical Council last May warned that if standards of medical education are further endangered the degrees granted by some medical schools may no longer be eligible for registration under the Medical Act. Never before, to my knowledge, has the GMC been moved to utter such a warning. Each of the examples which I have given is, I believe, a cause for grave concern. Taken together with other examples
592
which I could have given they demonstrate that academic medicine in the United Kingdom is under very considerable pressure. I believe they tell us that something is radically wrong. The real problem is money and possibly also the Government's attitude towards scientific inquiry.
There are three main financial features at the root of the difficulties. First, from 1981 to 1986 there has been a total real decline of about 20 per cent. in UGC funding for the medical schools. On top of that, unless government policies are reversed there will be a further reduction in the real value of the UGC fund of 4 per cent. per annum over the next five years. Secondly, there has been a reduction in the resources reaching the teaching hospitals from their local NHS authorities. The NHS district authority has been under pressure to live within its cash limits and has found it necessary to close or partially close wards, to close or partially close theatres, permanently or temporarily, and also to bring about staff reductions in a way that affects the teaching hospitals. Even enlightened authorities, knowing full well that the NHS depends to a considerable extent on the contribution from the medical schools and their teaching hospitals, have had to reduce their financial commitments to their teaching hospitals.
There is a third feature. I refer to the treatment given to academic clinical staff. The question of salary and conditions of service for clinical academic staff will be discussed in detail later in the debate by the noble Lord, Lord Hunter of Newington, who is the acknowledged expert in your Lordships' House on this complicated subject. But as a layman I should like to make one point. It appears to me that clinical academic staff, notwithstanding their enormous contribution to the NHS—and I take this opportunity of paying great tribute to the small band of teachers of medicine, who have very little political power—have fulfilled their duties magnificently. But they are at a disadvantage in terms of remuneration in relation to their colleagues in the NHS.
For example, NHS staff can earn additional money by domiciliary visits or by private practice. That difference has been accentuated by the Secretary of State's decision to allow NHS staff the opportunity of increasing, within certain limits, their private practice income. However, I stress that dedicated, highly talented people will stay within the academic environment even if they are at a financial disadvantage, provided they have sufficient facilities to pursue their teaching and their research. But there is evidence of frustration that such facilities are growing fewer.
I now return to the main theme. Some medical schools have weathered the problems and the difficulties of the past five years more successfully than others. They have done so by increasing their income from new sources, such as from charitable bodies which are associated with the more popular sectors of medical research, or from commercial exploitation of their own inventions. However, all the medical schools in the land have been driven to make economies. Even those schools which have been more successful than others in adjusting to the reduction in funding from the UGC by attracting alternative financial support have serious doubts about their continued ability to

593
expand the fund-raising base ad infinitum. All the medical schools view the future with concern.
As about 70 per cent. of medical school expenditure is on staffing there have been inescapable staff losses over the past five years. This has occurred across all disciplines. None has escaped. Since 1980 there has been a loss of 434 medical academic posts, 175 technical posts and 43 secretarial and clerical posts in clinical academic departments in Great Britain. I am advised that those figures are equivalent to the loss of one complete medical school. Furthermore, in order to save money, posts have been downgraded, Chairs have been lost and the filling of vacancies has been delayed.
Equally worrying is the fact that at least 11 senior clinical posts are vacant due to the lack of suitable applicants. I suggest that those vacancies are an indication of ebbing confidence in the future of academic medicine. I have been reminded by Sir John Butterfield, the Master of Downing College, Cambridge, that, while the pressures within the medical schools have been increasing, there has been no compensating reduction in the responsibilities that senior staff in our medical schools shoulder in the NHS, from the top to the bottom. At present they assist the DHSS at every level, from that of the chief medical officer and the chief scientist to the regional and the district committees. They make a major contribution to management of the NHS which is largely unrecognised.
Nor has there been any compensating reduction in the teaching commitment and in the intake of medical students. Indeed, the number of medical students is determined as a matter of central policy by the Government; and that number has not been reduced. We should be interested to learn whether the Government intend to maintain the 1986 level of student intake.
The point should also be made that a medical school cannot remove a subject or a discipline from the curriculum because medicine has to be taught to meet the strict requirements of the General Medical Council; and I have already referred to the concern of the GMC that some of the medical schools may be in difficulty in meeting standards.
Therefore, we arrive at this worrying situation. The quantity of teaching has remained constant but its quality is under pressure. Given the job losses to which I have referred, the inevitable increase in work load on the remaining staff, the inevitable worsening of the staff-student ratio and the increasing time and energy devoted by clinical academic staff to finding external financial resources to meet the shortfall, it is not unfair to ask for how long the quality of teaching can be maintained.
For their part the Government are quite relaxed. Indeed, it is disturbing that they should be so relaxed. Last February they concluded that the effects of the cuts up to April 1984 were no more than—and this is the Government's word—marginal. They announced that the UGC cuts had had little effect upon patient services because only 5 per cent. of hospital patient care is provided by clinical academic staff.
That may be so nationally, but it is a deceptive figure. In the districts which the teaching hospitals
594
serve the 5 per cent. figure on which the Government rely does not even approximate to the true position. In the health districts served by teaching hospitals the percentage of hospital patient care provided by clinical academic staff is more than 10 per cent., more than 20 per cent., or more than 30 per cent., and for some specific disorders it may be 100 per cent.
I have already referred to evidence which points to difficulties in recruiting clinical academic staff, which must be a subject of concern, especially when I remind your Lordships that there may be difficulties in paying them salaries equivalent to their NHS colleagues from hard pressed university funds. But in addition there is also evidence that academic medicine in the United Kingdom is beginning to lose outstanding teachers because of the problems within the medical schools, the inadequate research facilities and the deficits in the National Health Service. In combination these factors create pressures which regrettably drive overseas some highly talented men, pioneers and research workers. This is the subject of an article called "The Brain Drain" published in this month's BMA News Review.
One such person who has left the United Kingdom is Professor Leslie Blumgart, the former director of surgery at the Royal Postgraduate Medical School at Hammersmith Hospital, which is the biggest academic surgical unit in the country. A few months ago Professor Blumgart gave up his post at Hammersmith to take up an appointment at the University of Berne. His departure has been described as a major loss to students and to NHS patients. When I asked Professor Blumgart why he had opted out of academic medicine in the United Kingdom, he replied in writing, and I shall quote a few sentences from his letter:
"In short, I decided to leave the UK because of continued frustration in being denied the opportunity to develop my interests and my Department. The tedious and repetitive cuts had in my opinion reduced my Department to a non-viable academic level. The recent tendencies to cut support have led to a considerable lack of morale. I personally would never have left the UK had I felt that I could continue to develop in an academic sense".
No government can with safety disregard the words of Professor Leslie Blumgart.
Our medical schools are now beginning to experience at one and the same time difficulties in recruiting clinical academic staff and the loss of some talented teachers and researchers. Surely herein lies firm evidence that there is something radically wrong with government policies toward academic medicine. It can be argued that initially government policies may have facilitated rationalisation where that was necessary, but today those policies are threatening to destroy academic medicine as we know it.
Since the Autumn Statement announced by the Chancellor, with its commitment to higher public expenditure during the next two years, the Government no longer have an excuse for continuing the squeeze on resources to be made available to the medical schools and the teaching hospitals. But I am advised that it is feared that the additional funds that will be available to the medical schools for their clinical work as a result of the Autumn Statement will he very small indeed, and that they will nowhere meet the concerns which I am sure will be expressed this evening in your Lordships' House.
As I draw to my conclusion I ask very briefly four questions. I have given the Minister warning of these questions because we are anxious to have the Government's considered reply to them. First, will the Government stop the reduction in the UGC funding available to the medical schools? Secondly, will they ensure that special arrangements are made for the maintenance of teaching hospitals, bearing in mind their prime role in teaching future generations of doctors? Thirdly, will the Government provide new money for research in unpopular areas of development such as mental illness and for the application of clinical genetics? Fourthly, will they ensure that additional funding is incorporated in the UGC recurrent grant to take account of the higher base line for salary increases?
We are not asking impossible tasks of the Government. They are not impossible tasks. If the Government are unable to respond constructively, the decade of the 1980s will surely turn out for medical education and the NHS to be a decade of parsimony, frustration and a denial of the spirit of science.
6.17 p.m.
Lord Kilmarnock: My Lords, by mutual agreement with my noble friend Lord Hooson and with the leave of your Lordships, I shall speak now and the noble Lord, Lord Hooson, will speak in my place on the list of speakers. I am sure that we are all very grateful to the noble Lord, Lord Prys-Davies, for introducing this important topic for debate. He has given us an admirable exposition of the current situation and all the facts are available in the very useful briefs which have been issued by the BMA, the National Association of Health Authorities and the Committee of Vice-Chancellors and Principals, so I shall not go into them in any detail.
I think it is important at the outset to be clear that we are not talking about some abstruse or remote discipline, and the only minor quarrel that I have with the noble Lord's Motion is the phrase "academic medicine" which may give that impression. I should have preferred to see the term "medical schools" in the Motion because it is the actual places in the front line about which we are really talking. In doing so, we should never forget that those who are passing through them now will still be practising in the year 2025, and that in today's fast moving world they need to be equipped for a lifetime of continuing renewal and self-education. That will not happen where resources are inadequate and morale is low, nor will the breakthroughs in vaccines and cures that we all want to see.
In the past, the high morale, traditions and quality of care in our teaching hospitals have earned them a reputation second to none in the world but, more importantly, these high standards have provided the NHS with the doctors it needs at a very reasonable cost compared with other countries, to say nothing of innovations in health care through clinical research. This has been achieved through the hitherto fruitful partnership between the universities and the NHS, based on a dual support mechanism funded partly by the UGC and partly by the DHSS.
596
Clinical academics and NHS doctors share teaching, patient care and management tasks. They are not always in the same proportion; for example, London, with its eight medical schools producing one-third of the country's doctors, receives considerably more funding from the NHS than from the UGC. In other places, the precise balance is different.
The system therefore rests on a subtle and complex symbiosis. That is expressed in the so-called knock-for-knock arrangement—a gentleman's agreement—whereby neither side charges the other for shared and often inseparable costs. Within that framework, university consultants perform clinical functions while NHS doctors teach students. As I have indicated, they do the bulk of the teaching in London.
That informal partnership, a fine example of British pragmatism, has come under increasing strain in recent years, as the noble Lord said, and is now in danger of falling apart. The reason, as he told us, is the squeeze on academic medicine which goes back to 1973, although it was not until 1981 that the system began to suffer from serious, financial malnutrition. The swingeing cuts in higher education have naturally affected the university side more than the NHS side of the partnership.
In general, across the board, there has been a 15 per cent. decline in clinical academic staff, and 17 per cent. if medical and dental staff are taken together. Dentists have a special problem because the clinical academic dental service is relatively much larger than the general medical equivalent and consequently does an even higher proportion of NHS work, as the noble Baroness is well aware.
I see the noble Lord, Lord Colwyn, sitting here. I hope that he will participate in the debate and perhaps speak in the gap. Then, at the same time, there has been a reduction of some 20 per cent. in the available scientific support, through the reduction in technical numbers, which is not helpful in a hi-tech area requiring plenty of laboratory hack-up.
The Government may say that it is unfortunate that we have had to lose a few boffins but the NHS is still ticking over nicely. That is not the case, particularly in the newly developed specialties where much of the clinical service is performed by academics. The noble Lord drew attention to the global figure which has been given of 5 per cent. That is entirely misleading; for example, in paediatrics. 25 per cent. of all neonatal consultants, 20 per cent. of children's cancer consultants, 40 per cent. of all children's endocrine consultants and 25 per cent. of all children's respiratory consultants are university employees. I believe that comparable proportions apply in pathology. The academic input is therefore crucial to the maintenance and further development of those services.
It is true that some academic clinical posts have been taken over and refinanced by the NHS, but the number of such posts is only four out of the 90 losses over the past two academic years, according to the tables provided by the BMA. Furthermore, although the NHS may have suffered proportionately less than the university sector, the effects of the resource allocation working party have definitely been to move money away from the London teaching hospitals. It may be thought that a shifting of resources from the

597
Thames regions would benefit other parts of the country, for example, Sheffield; but again we cannot win, because the regions have tended to shift RAWP money out of the big cities, where the teaching hospitals are, so that provincial teaching hospitals have also suffered and thus medical schools find themselves in a double hind, if I may put it that way.
The UGC has clearly done its best to fund its side of the equation, but it faces one insuperable difficulty, which is that medical academic stipends increase faster than non-clinical academic salaries. That is because an additional stipend is paid to bring the academics approximately into line with their shoulder-to-shoulder NHS colleagues with whom they work a 46-week year and with whom they share management and clinical responsibilities. That additional burden on the university grants system is wished on the UGC by awards made by the Doctors and Dentists Pay Tribunal over which the UGC has no influence. In some years, it is true, the Treasury has met the difference, but it has never varied the base line, so the problem constantly reappears.
It is proper that comparability should be the aim. We cannot have widely differing pay structures for people working shoulder to shoulder in the same team. But if that requirement of equity is to be met within the UGC's funds, it means that it will be able to fund only a diminishing number of academic posts. That is the current situation, as I understand it.
I should like to put my first question to the Government. Within the university system, medical schools arc clearly unique because of the NHS interface. Is there not therefore a case for earmarked funding for the medical school component of the UGC's total grant to take account of those special circumstances? Alternatively, and perhaps going further, may we not have an entirely new system whereby the SIFT money for teaching hospitals from the NHS and the additional stipends, merit and distinction awards and units of medical time and so forth are rolled together into one budget and taken right out of the UGC mainstream? That would have the advantage of simplicity in that all those additional payments could be consolidated into one monthly salary cheque, thus avoiding multiple paymasters and reducing the unnecessary frictions which bedevil the relationship between clinical and non-clinical salaries.
This may be the appropriate place to suggest that something needs to be done, not just about funding but about the liaison between the DES/UGC on the one hand, and the DHSS on the other. My understanding is that the DES medical desk is manned by one half-time post and that the DHSS has one observer on the UGC's medical sub-committee. That may have been adequate in palmier days, but has the time not come for a high powered joint board to ensure the maximum effectiveness of all teaching hospital moneys, from whatever source, and to operate a simple, common payroll? Something like that would obviously be necessary if a new funding system were to be accepted. Does the noble Baroness agree that that would provide a superior supervising body?
I follow that query with a warning. The noble Lord, Lord Prys-Davies, has given us a number of warnings.
598
Here is another. Although medical academic stipends attract extra payment for extra duties, there are still financial disincentives to a career in this field. There is continuing uncertainty about true parity with NHS colleagues. There are poorer fringe benefits compared to the NHS such as removal expenses, and night on-call payments, which may provide one-third of a young doctor's salary, are not available to all research doctors, particularly if they are funded by the Medical Research Council or by research charities. In those circumstances, many of the best graduates now go into general practice rather than face uncertainty over their rewards and the research opportunities open to them.
I am delighted that general practice has improved its standards and status within the NHS, but we are talking about the brightest graduates of the medical schools, whose talents can be of enormous importance to research and development, who put up projects worthy of support by the MRC, who provide the Government's Chief Medical Officer and our representatives on the World Health Organisation. They are people of the highest calibre. They are the people who are being positively discouraged from that career and on whom, if they opt for it, there is an increasing temptation to take on private practice. The long-standing principle that university employees in medicine do not pursue private practice for personal gain is already beginning to be eroded. In many parts of the world, as I am sure the noble Baroness will be aware, senior staff are absent from medical schools and teaching hospitals from lunchtime onwards. That is bad for teaching and appalling for research. Do the Government want to see that become the norm in the United Kingdom?
That brings me to research. One of the most important functions of the medical academic is to carry out research. In a squeeze which is the first of his functions to be sacrificed? We cannot cut back on teaching because a statutory duty is placed on the GMC to ensure an adequate supply of teachers, as the noble Lord, Lord Prys-Davies, pointed out. There is no scope for cuts there, except perhaps in quality. Duty to the patient is sacrosanct. Neither of those duties can be postponed, so inevitably research is either deferred or not undertaken.
What sort of research is this? Why is it important? It is important because much of it leads to applications at the sharp end of medicine. It includes the incidence and cause of disease, diagnostics, prevention and epidemiological studies. Financial openings in private practice do not follow national needs or research possibilities. For example, there is little private work in immunology, infectious diseases, neonatal care or nutrition, all of which offer major research opportunities to meet national needs. There is plenty of private practice in hip replacement, hernia surgery, coronary artery disease and so on, but it is wasteful for a talented clinical investigator to spend time in many of the areas that are most financially rewarding in private practice.
Then there is the pharmaceutical industry. This is an area of economic activity in which Britain can still compete internationally, for example, Wellcome's recent penetration of Japan and its development of the antibody test for AIDS. A strong pharmaceutical industry ultimately depends upon strong medical

599
schools. At present the recruitment of clinical academics into the industry is good. But this is reflecting the shake-out of staff in the medical schools who cannot progress in the face of current cuts. It is likely that the present poor recruitment into clinical academic departments—there are now only half as many applicants per post compared to the equivalent NHS posts—will in future starve the pharmaceutical industry in its recruitment of able clinical advisers. More generally, there will not be an atmosphere of innovation and change in health care in the United Kingdom. No academic departments, no new developments!
I conclude by summarising my queries and suggestions. Do the Government accept that the contribution made by clinical academics to the NHS is an essential one? Do they understand and will they take on board the particular problem of academic dentists? Do they agree with me and with the noble Lord, Lord Prys-Davies, that it would be a disaster if the most promising clinical investigators drift off into private practice or are forced into moonlighting to make ends meet? Do they attach importance to clinical research? Are they alarmed by the actual decline of its effectiveness, as analysed in the UGC's letter of May this year? Do they accept that there is a link between the performance of the pharmaceutical industry and the health of academic medicine? If the answer to all, or most of, those questions is yes—I hardly see how it can be otherwise—can we have a commitment this evening that the disproportionately damaging squeeze on academic medicine will be halted and reversed? Will the noble Baroness bring to the attention of her colleagues the suggestion that there should be a new liaison body to canalise this money as fairly and effectively as possible? My Lords, I look forward with eagerness to the noble Baroness's reply.
6.33 p.m.
The Lord Bishop of Hereford: My Lords, unlike the noble Lord, Lord Kilmarnock, I am glad that the word "academic" has been included in the debate. Your Lordships will realise that the debate on the relationship between academic university clinical departments and their National Health Service colleagues is yet another reflection of a curious national characteristic. It would seem that we always underestimate the value of academic expertise, scientific inquiry and research carried on in our universities and other institutions. We have an inbred suspicion that in academic research we are not getting value for money. It always seems that we are giving our support and making available our financial resources to what is seen to be of benefit to our society in the short term and giving only lip service to the importance of those engaged in work and research that will be of benefit in the long term. Where financial resources are limited, it is the former rather than the latter that receive the lion's share of the resources available.
The growth of academic university clinical departments is typical of the way in which similar developments in other fields have taken place in our universities since the war. At the inception of the National Health Service, there were very few truly
600
academic departments within our teaching hospitals. Where professors were appointed, they were generally senior physicians or surgeons and the title was purely an honorary one. It was not until the 1950s that the universities set up departments in medicine and surgery modelled on the American pattern. These units rapidly became centres of excellence leading the way in the clinical treatment of such conditions as cardiovascular research and others that have already been mentioned.
As is always the case, there was, I believe, a friendly rivalry between the NHS clinical and the academic clinical staff. But the overriding attitude has always been one of mutual respect for those engaged in clinical work and those engaged in research. Although initially academic staff had been trained within the NHS, over the years, I understand, it has become possible for academic staff members to progress through the university system. But in most places training in medicine or surgery has been shared between the two. Most lecturers have spent a long time in the NHS before joining the university and many of the teaching hospital NHS consultant appointments come from those who have worked as juniors on the academic side. All in all, there is a large amount of cross-flow and cross-fertilisation between the academic and the clinical sides. One is complementary to the other, and if one suffers both in the end must suffer.
The foundation of other academic departments in the 1960s and the 1970s, particularly in psychiatry and in health care of the elderly, led to the raising of standards practised in the areas where the Chairs had been made. It is always a point of interest that where an academic Chair has been created for a particular discipline, it has attracted to that area those who wanted to specialise in that discipline. This has brought about a greatly increased standard of medical care to that area.
There are, however, problems arising from the dual system of funding. University departments are funded from the University Grants Committee. But quite a large proportion of their income comes from the National Health Service health authority in appreciation of the clinical academic work undertaken in universities. Both the University Grants Committee and the NHS health authority have, however, different rules. Inevitably, this causes friction.
It is at this point that I become more personal. In my dealings with medical students and academic staff, I find that this is the area in which there is most frustration and cause for concern. For many years, the sub-consultant staff level of university staff did not receive extra duty payments or extra units of medical time added to their salary. They were disadvantaged by many thousands of pounds. It is only comparatively recently that this has been corrected. But the inbuilt frustration, when one group within a profession feels at a disadvantage compared to another group, is always disturbing. Apart from the frustration this leads also to feelings of inadequacy and to a lowering of morale.
For instance, as already stated, the successful candidate for an academic appointment does not receive any significant removal expenses. This may

601
seem to us a trivial point. But his National Health Service counterpart does receive expenses. Those who are at consultant level as senior lecturers in academic departments are at a considerable disadvantage compared to their NHS colleagues. They receive no payment for domiciliary consultation. Nor do they receive a mileage allowance for such visits. There is also confusion about the granting and financing of service leave. All of us, I believe, know that in-service training for all professions is nowadays essential.
By far the most financially disadvantageous part of being an academic senior lecturer consultant is his inability to retain fees from private practice. Most academic departments do not bar their consultants from undertaking private practice. But they expect to receive, if not all, at least the greater part of such fees for department funds. In all disciplines, but particularly surgery, this is a considerable financial disincentive to anyone taking up a senior lectureship at consultant level. What, however, has caused anxiety and great distress among all sections of clinical and academic staff has been the reluctance of the University Grants Committee to implement pay awards for clinical staff at the same time as this has taken place for their NHS colleagues. This has been especially felt during the past year.
In conclusion, clinical academic staff form an important part of our health care team. They are responsible for much of the clinical work, most of the research work and most of the teaching. It is unfair and, I believe, felt to be unfair that they should suffer financially. This financial disincentive has made recruitment of good-calibre candidates for the consultant ranks in academic staff difficult to achieve. In addition, such financial disincentive encourages, as we have already heard, many of our best potential candidates to seek appointments overseas, which in the long term will greatly impoverish the standard of medical and scientific research and academic excellence that has been built up over the years since the war.
6.40 p.m.
Lord Richardson: My Lords, as a doctor, I think I can claim to be particularly grateful to the noble Lord, Lord Prys-Davies, for putting down this Motion and particularly for the clear way in which he has asked questions. Already your Lordships have made clear the invaluable and essential services to medicine as a whole that are given by the academic staff of hospitals. Already I think it is possible to make a statement about the questions implied in the Motion. What is the state of academic medicine? It is near to desperation and the morale barometer is falling to hurricane levels. The effect on the NHS is a very present and increasing threat to efficiency and a certain threat in the future to standards. The reasons for that have already been clearly stressed: the threat to teaching and to research.
The noble Lord, Lord Flowers, the Vice-Chancellor of London University, deeply regrets that he is unable to be with your Lordships tonight. He has to fulfil his vice-chancellor duties at the university on an occasion that has been determined as to its date months ago. However, he has asked me if I would put to your Lordships the points that he himself would wish to
602
make, and I have therefore been briefed by London University. But that does not mean that what I have to say applies only to London University. It applies to university hospitals and universities throughout the country.
About a year ago, London University found it necessary to write to the chairman of the education committee of the General Medical Council to say that the university considered the time had come when the attention of the Government should be drawn to the fact that, unless the process of apparently endless attrition in funding was halted, it would not be possible to maintain acceptable standards in medical education in this country. Coming from the university responsible for teaching over a quarter of our medical and dental students and embracing the largest and most comprehensive collection of medical academic institutions in this country, that was indeed a serious warning. That warning referred to finance. That point has already been clearly made.
However, there is another factor of great importance. It is the lack of co-ordination between the DES with the UGC, on the one hand, and, on the other, the DHSS and the NHS. The first has as its essential interest, and rightly, the concentration of resources on places of excellence and with persons who can achieve that excellence. However, the DHSS has a different objective, with which we can all have the greatest sympathy. It is concerned with dispersal of available funds on an egalitarian principle. That was shown most explicitly 10 years ago when the Resource Allocation Working Party made its report. That has been the cornerstone of the funding by the DHSS ever since.
RAWP—which is short for that mouthful regarding resource allocation—has as its principle the proper and fair distribution of resources throughout the country. I wish to make it quite clear that the noble Lord, Lord Flowers, and I are in no way against the principle; far from it. We are in favour of it. But it has now been carried to an extent that is extremely damaging. The RAWP principle has been introduced by the regions and applied sub-regionally. That is particularly damaging to academic medicine. It is right that NHS resources should be taken as near as possible to the patient, but the academic resources—with the large, complicated and expensive institution in which they have to be based—cannot be moved around to follow the resources. It is with the sub-regional RAWP deprivations of the medical schools where the great anxiety lies and the difficulties develop. It is essential that the university hospitals should be protected, and that has already been fully stressed.
The imbalance of the weighting against academic medicine will lead to the loss of new knowledge and poor training of doctors. The benefits from RAWP were designed to help the patient. But the results of sub-regional RAWP may well be serious curtailments of services to patients. The NHS staff are reduced in number and, as the numbers go down, the academic staff have to step in to look after the patients beyond the 60 per cent. of their time that is the average given by academic staff to NHS clinical work. The academic element therefore is squeezed on two sides. It is squeezed because the UGC can give it only a reduced amount of money. It is also squeezed because the NHS

603
has to reduce its funding of staff and thus the academics have to take on clinical duties. Naturally what goes are teaching and research, the life blood of medicine.
That is already happening. The University of London and the Health Planning Consortium in 1979 to 1981 achieved a coherent plan for restructuring medical education in London and the health care delivery of it. Many of those plans are already being frustrated and others are in jeopardy. One example, the Bloomsbury Health Authority was specially formed in 1982 by taking bits off other authorities so that there could be a unified medical university education programme comprising the Middlesex Hospital and three post-graduate institutions, with University College Hospital. That is due to come to its final fruition next year.
However, the authority has already lost 332 beds since 1982, and has had a total manpower cut of 17 per cent., equivalent to 1,500 staff, between March 1983 and November 1985. That has already happened, but, furthermore, between 1984 and 1993 at least 86 consultants and 117 junior doctors will be lost. In a desperate attempt to balance the books, this newly formed authority, created to support and maximise that complex of hospitals, has lost 160 beds, equivalent to eight or nine wards. This sort of thing is happening not only in that region; it is happening throughout the whole of the London area and doubtless elsewhere in this country.
In August of this year St. Thomas's and Guy's Hospitals had to stop all cold, non-emergency admissions for a month, an incredible thought to anybody with my medical background. However, the Chancellor of the Exchequer in his Autumn Statement said that the four Thames regions would receive £30 million more to compensate for some of the RAWP effects, thus recognising the special difficulties created.
Can the noble Baroness assure us that those sums will, if not entirely, at any rate in large part, go to where RAWP has fallen most heavily, namely, on the centres of academic medicine? The delivery of academic medicine and its management are extremely complicated. It is no straight, simple matter. There are eight different types of organisation involved. The universities, the UGC, the DES, the NHS and the regulating councils, such as the GMC and the Dental Council, and the research organisations are all bodies which affect profoundly the influence and value of academic medicine. Surely a mechanism should be arranged by which their efforts can be properly coordinated and maximised.
The difficulties do not relate solely to academic medicine. There is trouble in the other direction, towards the NHS. For example, St. Bartholomew's Hospital has already lost six senior lecturer posts and one lecturer post. How about that for stimulating the morale of the skilled people produced in one of our great medical centres?
What we need is co-ordination as well as financial support. If those two requirements are fully recognised by the Government, it may be possible in a period that is not too oppressively long to re-establish what was for
604
years in existence, the magnificence of the teaching hospitals of this country.
6.56 p.m.
Lord Hunter of Newington: My Lords, first may I add my congratulations to those expressed to the noble Lord, Lord Prys-Davies, for a quite magnificent introduction to this debate. I should like briefly to consider how long it took to create what is in danger of being destroyed. As has been said, at the end of World War II research in medicine had suffered substantially in this country because of the stresses and commitments of the war situation. The consequences were that we were substantially behind the United States in many respects.
What happened was that almost at the same time as the National Health Service was established the University Grants Committee earmarked money over a quinquennium for the first development of university academic, clinical departments. These departments are often "embedded" in the hospital, creating a unique opportunity for research and development, not only by the academic staff but through providing research facilities for the hospital clinical staff.
In today's jargon of definitions these departments are largely concerned with strategic research and not with basic research—although of course inevitably involved to some degree with research and development, R and D—and applying new knowledge to the medical situation. Their work is supported, as has been said, by the University Grants Committee and the National Health Service, and funds are available for specific programmes from the Medical Research Council as well as private foundations. In fact, they have a range of funds available to them which are not available to other disciplines.
A great deal had to be achieved during the first 20 years of this development to make the new situation possible and work well. By agreement, for example, the consultant full-time academic clinical staff were paid the same salaries as the hospital staff, and consultants became eligible for distinction awards paid entirely by the National Health Service. In the development of the new teaching hospitals, where the departments were "embedded", the question of capital costs had to be decided between two spending departments. This was done by the Pater formula. The UGC issued guidelines to universities about the sharing of recurrent costs, and the Department of Health gave guidelines, or instructions, to the health authorities.
After much discussion about two contracts it was agreed that there would be one contract for academic staff and one contract for hospital staff, though both taught students, undergraduate and post-graduate, and both did clinical work. As has been said, this was under the "knock-for-knock" principle. But of course there is a considerable grey area where each is doing similar work. Attempts at a division of costs—one of the wisest decisions I know—were abandoned. Obviously heating in the patient area is required 24 hours a day, whereas heating in the university department is required perhaps for 10 hours a day. Equipment might come from UGC funds or health

605
authority funds. So at any one time a National Health Service consultant might be doing research work with equipment and facilties provided by the UGC, and on another occasion academic staff might be doing research work with equipment and facilties provided by the NHS.
This complicated situation developed over about 20 years, and then there was this glorious honeymoon period, if I may call it that, that we had in the 1970s, when it began to show more than promise; it showed results. What was created were departments vital to the future of British universities and medicine and vital to the future of the National Health Service. I was privileged to be the chairman of the committee concerned with academic clinical salaries from 1976 to 1981. There were no difficulties. Very often we were invited and given hospitality by the British Medical Association, but there were no difficulties during that period.
However, in 1981 the universities began to find it difficult to create the "well-founded" department with equipment and staff. This has been referred to. The Medical Research Council found it more difficult to meet all the first-class research proposals it received. It complained bitterly to the AVRC about this. The National Health Service, as we all know, was soon in difficulties as well.
During 1980–81 the deans agreed to approach the universities to preserve medical posts because of the contractual obligations and responsibilities which the universities felt towards the NHS, but at the end of the first year this, too, had to be abandoned. University non-medical staff, particularly in science and engineering, began to realise that there were substantial resources available to medical research which were not available to other disciplines. As I have mentioned, in addition to the Medical Research Council there were substantial funds for medical research—several hundred million pounds a year—available from the wealthy foundations.
In the last few years the UGC has become increasingly concerned with the effectiveness of the dual support system, and obviously they and the health departments are becoming increasingly concerned about the "knock-for-knock" principle. They have been unable to reach agreement about clinical salaries. Both realise that these difficulties will continue to grow as the level of government funding declines. One wonders sometimes, almost in desperation, whether the whole system should be dismantled and medical staff have two contracts.
In September 1984 the University Grants Committee gave the Secretary of State its advice on future developments in a document entitled The Strategy for Higher Education into the 1990s. It declared the UGC's intention to develop a more systematic and selective approach to allocating funds for research. This was university-wide, of course, but it applied to the medical faculty. The UGC strategy has been endorsed by the Government, and it is to be given effect in the allocation of recurrent grants up to 1990. The University Grants Committee now says that it will be considering resources separately under the headings of teaching, research and resources for special factors. It says that this is not the same as allocating one sum
606
of money for teaching and another sum for research. But what does it mean? In fact, I believe that the non-payment of NHS clinical salaries to academic staff is only the tip of the iceberg as regards the difficulties, which will multiply unless something is done about this situation.
What one must ask the Minister is: How does this complicated new University Grants Committee's untried system fit in with the already complicated agreements between the Department of Education and Science and the Department of Health and Social Security about the funding of clinical departments! These arrangements were arrived at in the days of plenty. Can they be continued when we are not financially so well off? The complexity of this makes the mind boggle. One wonders, even in desperation, whether the report of the Croham Committee, which is looking at the future function and role of the University Grants Committee, will be able to contribute to this situation.
I think it would be almost impossible to examine this problem in detail and to allocate costs between the universities and the health authorities. I must confess one wonders whether in this grey area, which to the financial expert looks rather lax, there is not a great temptation to the new health service managers to get into it. I am sad to say that there is some evidence that they are doing so.
It is absolutely essential that if a new system is to be introduced because of shortage of resources that system must be understood and accepted by those who wish to make their careers in academic medicine. If this matter is not clarified there will be two consequences: one is that the good people will go to work somewhere else, and the other is that the National Health Service, on which all the people of this country depend, will falter and become less efficient in the future.
7.7 p.m.
Lord Congleton: My Lords, it is a pleasure to follow the two immensely distinguished medical Peers who have spoken this evening. I should like to commence by offering my thanks to the noble Lord, Lord Prys-Davies, for bring this matter forward. If I may, without seeming patronising or indeed impertinent, I congratulate him on the way he presented this debate.
It must be surprising to some of your Lordships that I should be standing here daring to offer a contribution on a matter with which I have had no connection at all. I am not a professional medical person, I am not qualified, I am not an academic nor am I a member of a health authority. Your Lordships may think it an impertinence that, with such credentials, or lack of them, I should stand here this evening to participate in this debate. However, I am assured by my family and those around me that I am frequently given to bouts of hypochondria, and I have had the benefit of the patient care which is available in the area in which I live, which falls within the Wessex Regional Health Authority's domain in the south of England.
Further than that, for the past three years my time has been greatly occupied in support of the medical faculty of the University of Southampton, trying to bring in resources to support the programmes of

607
research that they undertake there. It seems to me that Southampton's case is peculiarly suitable to use as a model for the difficulties that have been described in this debate so far. Southampton University's medical faculty—we call it Wessex Medical School—came into being as a result of a joint application from the then Wessex Regional Hospital Board and the university itself to the Royal Commission on Medical Education. From its early beginnings it has always placed great importance on the regional aspect of its work in the three functions that it performs: teaching, research and patient care. There is this regional aspect in all that it does. That is thought to be important, and it is peculiar. There is no other regional health authority or medical school in that situation.
My work with the faculty as a layman has brought me closely into contact with the leaders of the faculty, the leaders of the university and the leaders of health authority. These are distinguished and dedicated people, not given to outbursts of hysteria. They are despondent; probably they are more than that. They are not despairing, but they are very despondent at the turn of events that is occurring with regard to academic medicine and the National Health Service.
I understand, even as a layman, that operationally academic medicine and the National Health Service arc inextricably bound together. The operation of the National Health Service is totally dependent on the supply of doctors from medical schools. Indeed, for the vast majority of young doctors the National Health Service is the only potential employer. The greater part of medical research is done by academic members of medical schools and teaching hospitals. I find it bizarre (and I think that other noble Lords who have spoken this evening have hinted that they, too, think it bizarre) that the funding for these two totally distinct agencies—the medical schools and the National Health Service—should come from different directions.
The extent and quality of the service given to the National Health Service by academic medicine apparently depends on factors largely out of the control of the National health Service. I want to go into that a little. It has already been mentioned by more than one noble Lord this evening. As I say, it is so bizarre that it is worthy of another mention.
The clinical academic medical people receive their salaries through the medium of the University Grants Committee's allocation to the university. My understanding is that, in certain universities, the block grant from the UGC is the subject of a debate in the senate. It is outside the control of the National Health Service, anyhow. When the UGC grant is diminished, as it has been (and this is fact) then there is an effect on the clinicians. It must be so. It will affect their work as teachers. It will affect their work as researchers and it will affect their work in the hospital when they are doing their patient care side of their tripartite existence.
Over all those things, the National Health Service apparently has no say at all. There are other difficulties in reverse, as it were. I ask the noble Baroness to please consider this matter. We have heard about the disparity of the funding and the difficulties that arise.
608
Whether it is necessary to take the whole thing under the wing of one authority, I do not know. It could be so. It is not for me to suggest solutions here this evening. But a solution is needed somewhere and it will be for those who are closely involved and who really understand the problems, in concert with the Government, to come forward with solutions to these difficulties.
There have been reductions in the staffing in the medical teaching institutions. We know that; it is a fact. I think the noble Lord, Lord Prys-Davies, referred to it. Twenty per cent. in five years, I think, was the figure mentioned; and it continues.
This is giving rise to grave disquiet among the leaders of our medical teaching institutions and to the teaching hospitals and the regional health authorities. I have here a list of the reductions in staffing that have been made this year—agreed savings for 1986–87 in the Faculty of Medicine in Southampton. It is late and I shall not read it all to your Lordships. What I shall do, if I may, is quote from the concluding paragraph of the report, which supports the figures themselves. Presumably it is written by the dean.
It reads:
"It is clear that the measures now being taken will damage the ability of this relatively new Medical School to fulfil its role in training future doctors and nurses, undertaking research and providing an essential clinical service. Similar reductions for a further three years would make it impossible for the Faculty to meet its commitments. This would significantly reduce the clinical service to the public … severely limit important clinical research; and risk the loss of [official] approval for the medical and nursing training courses".
It concludes:
"Such an outcome is unthinkable".
These are serious words, grave words, about what is clearly a very serious situation.
I now turn very briefly to the situation with regard to clinical research, which really has been my main preoccupation in that, not being a medical person, I have been trying to find funds to support Southampton in its curious situation. When the National Health Service was set up, as I understand it a deal was struck between the state (that is, the National Health Service) on the one hand and the older medical teaching establishments whereby they were enabled to hang on to their reserves of wealth which quite properly and wisely they had husbanded over the years and in some cases centuries. There were endowments, and they were entitled to hang on to those to support the programmes of research that were carried on within their department.
Southampton Medical School was set up post-NHS, I think, in the late 1960s, and the first intake of undergraduates arrived in 1971. There were no endowments. It was quite simple: there were no endowments. The work that I and colleagues have been engaged on for the past three years—indeed, it has been going on for longer than that: for nearly 10 years now—is stimulating, exasperating, and every now and then rewarding. These research workers are dedicated, distinguished, splendid people in every way. We have to support them. I recognise the value of having a medical teaching institution in the area in which I live because I know (I see it around me) that the bringing forward of a medical school in

609
Southampton has raised the standard of patient care, of health care, in the area. There is no doubt about that.
I know the value of having an institution there. I shall benefit, perhaps. I shall be better looked after and everybody around me will be better looked after. That is good news. The research situation with no endowments is particularly difficult. A noble Lord referred to the great grant-giving institutions with their great wealth that is available. Lead me to it! We find that there is intense competition for research grants. Applications are pouring in to the grant-giving foundations and trusts, to commerce and to industrial concerns all the time. I suppose I should not use the two words "savage" and "charity" in the same sentence. Let me say that the competition for these things is intense. It borders on savage at times and there is this difficulty in getting the money coming in.
When the noble Baroness replies, perhaps she can take away with her the thought of the generosity that Southampton Medical School has received at the hands of the Channel Islands. The states of Jersey and Guernsey, in recognition of what they see as a debt they owe to the general hospital in Southampton, two years ago made gifts totalling a quarter of a million pounds purely for research purposes. This was over and above any reciprocal arrangement there may be with the NHS over here and their own arrangement in the Channel Islands. We are deeply grateful to them.
Could the Government perhaps follow suit in some way? It is not all about money but it is mostly about money. Many of us have touched on the questions of reorganisation and the difficulties of funding, having one department involved with the University Grants Committee and another department involved with the NHS, and so on. That is reorganisation and it does not really mean money in the sense that I think we all know that other things mean money. I shall go on supporting the medical faculty in Southampton, not for purely selfish purposes. They are splendid people, and they deserve to be encouraged, enthused and kept going in every possible way.
It is very difficult for enthusiasm, vigour and dedication to flourish in an unfavourable environment, is it not? What happens? Sometimes it withers. The stronger spirits, I suspect, say "Enough is enough" and they take away their dedication, their enthusiasm and their great skills and they set up shop somewhere else. We must see to it that there is not a prolonged brain drain—I think that is the expression—and we really must try to keep these people in this country.
Lord Annan: My Lords, before the noble Lord sits down, would he agree that the essential difference between a medical school such as Southampton, in the provinces, and the London medical schools is that the medical school in Southampton is gravely hampered by the cuts which have been imposed by the University Grants Committee but that a medical school in London is hampered not only by those cuts but also by the process of the resources allocation working party, which made recommendations (carried out by the Government) to transfer funds from London to the provinces? Therefore in London the medical schools get a double cut: they are RAWP-ed by one hand of
610
the Government and raped by the other hand of the Government.
Lord Congleton: My Lords, I cannot answer the noble Lord's question. I know only what goes on in Southampton and it would be quite wrong and indeed stupid for me to comment on what goes on elsewhere. I am sorry, but I cannot help him.
7.21 p.m.
Lord Hooson: My Lords, like the noble Lord, Lord Congleton, I have no academic or medical qualification justifying my taking part in this debate and, unlike him, I have no close connection with a university teaching hospital or a university with such a hospital attached to it. However, I do not think I need any such justification to take part in this debate. The noble Lord, Lord Prys-Davies, is not only to be congratulated on drawing the attention of the House to this very important matter but also, through this debate, alerting the public—as it were, the potential patients of the national Health Service—who are eventually going to suffer from the crisis that is obviously affecting the medical schools at the present time.
The crisis is put starkly in the briefing notes which emanated from the Committee of Vice-Chancellors and Principals:
"In the 1950s and 1960s the university lectureship was keenly sought after as a stepping stone to the most desirable senior positions in British medicine. This is no longer so: now there are 'fewer than half the candidates for the average lectureship or senior lectureship in university medicine, compared with the corresponding Health Service post'.".
It seems to me that that puts forward not only the symptom but the effect of the crisis in university medicine at the moment. Of course the loss of attraction of academic medical life (because that is what it amounts to) carries for every sensible person an eventual cost which the whole country will pay. That is why it is so important to analyse why this is happening. First, there has been the redistribution of real resources, whereby money that normally would have gone to university teaching hospitals has been transferred to district hospitals by the National Health Service itself.
Reference has been made to the gradual breakdown of the flexible "knock for knock" arrangements as financial stringency has obliged the National Health Service authorities to look more to their own. Then, of course, within the universities we have had the cutting down of university grants—and again I quote from the notes of the vice-chancellors' committee—
"By the end of the decade universities will have experienced a real decline in their income of 20 per cent. since 1980—and more likely to be around 30 per cent. In these circumstances it is not possible for universities to go on giving their medical schools special protection.".
I have no doubt they seek to do that, just as they seek to do it in the University of Southampton. We do not have to enter into the debate as to whether the provincial teaching hospitals or the London teaching hospitals are suffering the most. They are all suffering. Surely we are not here to decide where the loss falls heaviest, but to decide on what is to be done about the crisis.

611
If I may move to a second reason, and a very important reason, it is the Government's own attitude. They have given the impression—and I think it correctly represents their attitude—that they only back applied research as against pure research. The profit motive—that alleged means by which even people in medical research are said to be able to earn their own living—has become dominant. And there is a price to pay for all this. There has been an increasing lack of basic and original research, in which our country had formerly been pre-eminent. There is an increasing tendency, I am told, no doubt under Government strictures and constraints, to concentrate on proven and accepted fields of research. But we are in danger of being left behind as pioneers in medical research, for which this country had a very great reputation. In the ultimate—and this is the important thing which has to be spelt out for the public at large, the eventual patients of the National Health Service—the National Health Service doctor depends on the high academic discipline of the teaching hospitals.
There has been a general failure to recognise that without the highest output always coming from our teaching hospitals, the National Health Service would rapidly deteriorate. Innovation is surely constantly necessary in the field of research, and the contribution made by medical research percolates down to the National Health Service as a whole. I have no doubt whatever that if you are in an area where there is a teaching hospital the benefits of that hospital percolate down very quickly to the surrounding area. I would not have thought there could be any doubt at all about that.
The trend can be seen in the greater difficulty now of recruiting staff to teaching posts. The quotation with which I began my speech referred to fairly senior posts, but of course there is also a gradual decline because there is less pay and the rewards of prestige and the opportunities for research are less attractive and so they do not make up for the lack of pay.
One of the consequences of under-funding of university hospitals, it seems to me, is that they have to look around for means of earning money. They run courses for students and doctors from developing countries in order to benefit from the fees that are paid. No doubt there is much to be said for that, but again we pay for it in different ways. Medical staff have to spend time teaching and they are left with less time for research, because they are persuaded by the constraints to look for means of earning money, as very many other disciplines in the universities are doing at present. And of course we pay for this. There is perhaps a gradual lowering of academic standards.
Then there is the Government policy towards the payment of fees by overseas students, which has also led to considerable changes. I was given figures recently which showed that many of the brightest medical students from Malaysia, who a decade ago would have come to this country, now go to Australia and the United States for their training; whereas the United Kingdom used to be the most important centre of training for them. This tendency, I believe, is reflected in other Commonwealth countries. I think the eventual result for this country is fairly obvious for all to see.
612
In order to appreciate the changes which have taken place in medicine, it is quite significant to look at the plight of the pre-clinical teachers. I am told that these days they rarely have a medical degree because their rate of pay is gauged not by reference to the pay levels of NHS consultants or anything like that, but by the pay levels of academic teachers generally, such as the teachers of history, English and so on. The result is that it is increasingly difficult to recruit qualified medicos for this work.
All in all, it is quite obvious to a layman like myself that there is a real crisis building up within the teaching hospitals, and if it is not resolved quickly and properly it could have a devastating effect long-term, not only on the National Health Service but on medical standards generally in this country. I have two simple layman's questions to put to the Minister who will be replying. First, does she accept that there is a crisis? Secondly, what do the Government intend to do about it?
7.30 p.m.
Lord Pitt of Hampstead: My Lords, I, too, must congratulate and thank my noble friend Lord Prys-Davies, for introducing this debate, and also for the way in which he introduced it. For my part, I want to concentrate on the role of the clinical academic staff and the important contributions they make to the universities and the NHS. I must first explain that when I talk about clinical academic staff, I actually mean medical staff, although, of course, the term refers to dentists as well. But I shall say something about the dentists later on.
In 1968, the National Board for Prices and Incomes established the principle that,
"since university and NHS jobs are interchangeable, it follows that the salaries of medically qualified university clinical teachers must he linked to, and move simultaneously with, the salaries of full-time hospital doctors and dentists".
In this debate we are not just talking about the salaries of clinical academic staff, but, as this quote illustrates, the recognition of the interchangeability of the work of doctors who are in the NHS and those who are within university departments.
The role of these university doctors is often misunderstood, though not by the speakers who have spoken so far tonight. Clinical academic staff are employed by the universities and not the National Health Service. They are employed to teach undergraduate medical students in their clinical years and to undertake research. Nineteen universities have medical schools, 13 of which also have dental schools. However, unlike their non-clinical university academic colleagues, university doctors also have, at no cost to the NHS, a continuing commitment to provide National Health Service clinical care.
As we have heard from my noble friend Lord Prys-Davies, there has been a reduction in the number of clinical teachers, but as the whole of the curriculum has to be taught to the students to meet the General Medical Council's requirements, we are all concerned that the standard of teaching may deteriorate since the staff-to-student ratio has decreased alarmingly. The number of medical student entrants to universities is set by the Department of Health and Social Security

613
and remains constant until changed by the department. Therefore, we have the same number of students being taught by fewer staff. Students, as we have been told before by my noble friend Lord Prys-Davies, need to be motivated for a lifetime of continuing self-education fit for practising medicine well into the next century. It follows, therefore, that those who teach them must be among the most able in the profession. If they are not, the outlook for the standards of medical education and for future medical care must be bleak.
The principle that clinical teaching must go hand in hand with the assumption of clinical responsibility has led to a close relationship between medical teaching and the NHS. In addition to carrying out treatment necessary for training students, clinical teachers with their specialised training and experience provide treatment for patients and consultant services quite outside their teaching responsibilities, and perform administrative duties in connection with the running of the hospital as well as the school. As a consequence, whole-time university staff play a major role in running hospitals as part of the National Health Service, and it must be emphasised that these services continue throughout the university vacations. In fact, clinical academic staff are contracted to work 60 per cent. of their time in treating patients, not in hospitals countrywide, but in the teaching districts which serve the large teaching hospitals. So any statement as to the percentage of service given by those must be based on those districts.
The Government estimate that clinical staff provide 5 per cent. of hospital care, but this varies from one area to the other, and from one subject to the other. In some districts and some specialties, it can be as much as 40 per cent. The National Association of Health Authorities estimate that in areas with teaching hospitals and in special health authorities the average percentage is more likely to be 25 to 30 per cent. For example, neuro-surgery and pathology services at the London Hospital in Whitechapel are carried out solely by academics, and all the units at Hammersmith Hospital are headed by either university or Medical Research Council staff. This shows the extent of the contribution they make to the National Health Service. It follows, therefore, that any reduction in numbers of clinical staff can cause major problems in the delivery of patient care.
NHS doctors do substantial amounts of undergraduate teaching under the "knock for knock" system, which we have spoken of earlier in the debate, but as we have heard this "knock for knock" system is now under threat. There is evidence that both the universities and the NHS, in their separate ways, are beginning to look at it and to look from their side of it. There is a danger that what has worked very well, as the noble Lord, Lord Hunter, pointed out, over these years, might now be under serious threat.
I want to move to another area. I have referred to the fact that one of the important roles of clinical academic staff is to undertake research; they do it like all university teachers undertake research. The University Grants Committee provides the funds for the research base—that is, the cost of overheads and well-founded laboratories—whereas the Medical
614
Research Council will provide grants for projects and, in some university departments, research staff and entire units.
Less money is forthcoming from both these sources, because not only are the universities having their grants reduced, but the MRC is also having its grant reduced. The researchers are having to spend more time looking towards the voluntary organisations for funding. Of course, they do not all have the help of people like the noble Lord, Lord Congleton. Many of them have to do it themselves. This may well be right for projects involving diseases which attract publicity, such as cancer and heart disease, but in areas such as mental illness and in what is commonly known as long-term basic research there is not the same interest. Because of reductions in the number of clinical academic staff over the years, those remaining have to spend more of their time in teaching and in providing NHS services. Inevitably it is research that will suffer.
All this serves to make entry into clinical academic medicine less attractive to doctors. Medical graduates are increasingly turning away from teaching hospital medicine to non-teaching medicine, either in hospital or in general practice. We must recognise what that means. It means that the seed corn is being lost, and it will have an effect on future generations.
Unlike many other university teachers, clinical academic staff have a 24-hour commitment to their patients. They have to be available for emergencies and for night and weekend cover. Many doctors feel they may just as well work for the NHS on a full-time basis, which is in any case better paid.
I am sure that your Lordships appreciate that clinical academic staff have an important role in the education of our future doctors, as well as their continuing contribution to the National Health Service. They train the new doctors; they carry out research; at the same time they treat patients under the National Health Service. However, in all three fields they are at present adversely affected. The University Grants Committee is pressed for funds, and therefore reduces its grants. The Medical Research Council is also pressed for funds, and it also has similar difficulties in making the appropriate grants for research.
We then have the closing of wards, and it seems that no one realises that when wards are closed it affects not only medical treatment for the less urgent cases but also affects medical teaching. There are fewer patients available for students to be taught on, and they are affected in that way as well. The final straw is the difficulty such staff experience in obtaining salary increases which they are awarded along with NHS staff and which universities have difficulty in paying because of the failure of the Government to provide funds. The prospect of an increasing gulf between National Health Service salaries and academic salaries is not an encouragement to enter the academic side of the profession.
Perhaps I may quote from an article in The Lancet of May 1986. This article was mentioned by one of the other speakers in this debate, but I should like to quote again from it. it says:
"The most able young clinicians will not go into academic medicine if broad comparability of remuneration is not maintained with their NHS counterparts".

615
We already have evidence regarding this matter. In the 1950s and 1960s university lectureships were keenly sought after as a stepping stone to the most desirable senior positions in British medicine. This is no longer so. There are now fewer than half the candidates for the average lectureship or senior lectureship in university medicine compared with corresponding National Health Service positions.
Perhaps I may say a few words about general practice in medical schools. In this field Edinburgh University was in the van, as it so often is. The first department of general practice was established in Edinburgh University in 1957. Now most medical schools have at least one general practitioner appointed to a university post with responsibility for teaching the discipline and undertaking research. Here, too, we find financial difficulties. Some university departments in general practice have sole responsibility for running an NHS practice. Other departments have linked practices in that academic clinical staff undertake clinical work in NHS practices principally staffed by service general practitioners. Funding has always been a problem as there has been no precedent for the financing of general practice departments within universities.
Departments of general practice are funded through the UGC or charitable trusts, or by local arrangements with family practitioner committees to maximise levels of reimbursement for patient care. The NHS contributes a service investment for teaching to cover the additional cost of teaching medical students in clinical academic departments based in teaching hospitals. However, there is no equivalent NHS support system available for undergraduate general practice teaching. I gather that negotiations have been going on for six years to get that particular question settled. It seems that it will be done only if there is some initiative on the part of the Minister. I hope that when the Minister replies she will tell me that her right honourable friend is taking this point on board.
At the beginning of my speech I pointed out that the term "clinical academic staff" refers to dentists as well as to medical staff. Although many of the considerations for medicine apply equally to dentistry, there are important differences. Many of these differences centre on the fact that there is no equivalent of the district general hospital and there is no dental hospital which does not have associated with it a dental school. Consequently the clinical academic service is relatively much larger than the medical equivalent when compared to the dental and medical hospital services respectively.
In other words, there are relatively more medical academics per patient than in the case of medical schools. The NHS therefore relies more heavily on clinical academic staff in dentistry than it does in medicine. The reason is that there is much less support for dental schools than for medical schools, and that academic dentistry provides clinical services not available elsewhere in the National Health Service. There is a high teaching load on dental clinical academics, especially those supervising undergraduates. When they qualify, dentists must have done things under supervision, and that means that the
616
dental academic has to supervise students far more than is the case with medical students.
It will therefore be seen that there is a stress in academic medicine that applies equally to academic dentistry. This stress is largely the result of Government policy. I am not suggesting that it is a deliberate consequence which the Government intended: it is a consequence of the fact that the Government have not given proper thought to the policy. What I hope we shall get as a result of this debate is a more serious consideration of these issues in the framing of policy. For example, the Government are at this moment looking at RAWP. In doing so I hope they will take into account not only the conditions of the population in various areas, which is one of the factors we have always asked them to take into account, but also the importance to medical teaching of sufficient patients being available for the students to be taught on and a sufficient allocation of resources to the medical schools so that basic research can be carried out.
I shall be listening with great interest to the reply from the Minister, and in particular to her replies to the various questions that have been put to her by the noble Lords, Lord Prys-Davies, Lord Richardson and others.
7.51 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, to listen to the noble Lord, Lord Prys-Davies, and indeed to other noble Lords, one might be tempted to think that all around us is doom and gloom. Not so, my Lords. Indeed to pick up the challenge of the noble Lord, Lord Hooson, I do not accept that the situation is one of crisis. What the debate has demonstrated is the importance, among other things, of maintaining and enhancing the partnership between academic medicine and the National Health Service.
As noble Lords have said, the medical schools are training the men and women who will take our health service into the next century, adapting to rapid advances in medical science and to changing approaches towards patient care. But more than that, clinical academics make an important contribution to services to patients in our teaching districts; and our medical schools have played an essential part in bringing about and carrying through advances in medical science and treatment methods. Before I go on, along with the right reverend Prelate the Bishop of Hereford and other noble Lords, I should like to pay tribute to those men and women involved in academic medicine and to say how much the Government value their contribution to the future well-being of this country.
Turning to the NHS side of the partnership, this also plays its part. Many NHS consultants and staff in teaching districts play an important role in teaching and supervising students. Moreover, my right honourable friend the Secretary of State for Social Services carries out to the full the obligation placed on him by Section 51 of the National Health Service Act 1977 to provide the clinical facilities required by medical schools for teaching and research. The right

617
reverend Prelate the Bishop of Hereford referred to the strains in the knock-for-knock arrangements, and he mentioned this partnership. It is unique to higher education and brings enormous benefit to patient services and to education. The Government are committed to its maintenance.
The noble Lords, Lord Hunter, Lord Hooson and Lord Pitt, asked how complex UGC grants policy can be fitted in with complex NHS funding policies, and the noble Lord, Lord Hunter, and other noble Lords referred to the Croham Committee. I welcome the acceptance of the noble Lord, Lord Hunter, that the knock-for-knock arrangements for funding cannot sensibly be disbanded. But given the two sources of funding, NHS and UGC, there is a clear need for coordination at all levels. The DHSS, the DES and the UGC are developing closer contacts in this field and the health departments have assessors on the UGC medical sub-committee. The Government will of course give careful consideration to the findings of the Croham Committee, which is examining the future role and funding of the UGC.
Much has been said during the debate about the financial problems being faced by the medical schools. I am well aware from meetings I have had as far apart as Manchester, Gloucester and Southampton that a great deal of worry is being felt by doctors, the General Medical Council, the National Association of Health Authorities and others as a result of constraints on university funding. The noble Lord, Lord Congleton, is far too modest. I have had the great good fortune to see some of the fruits of his work during my visit to Southampton and I gladly endorse his remarks about the generosity of the Channel Islands.
As your Lordships will be aware, my right honourable friend the Secretary of State for Education and Science has now agreed with the University Grants Committee and the Committee of Vice-Chancellors and Principals on a major programme of work towards greater efficiency and effectiveness in the university sector. On this basis the noble Lords, Lord Prys-Davies and Lord Richardson, will wish to note that my right honourable friend announced on 6th November an increase in cash terms of £95 million (or 7·2 per cent.) in recurrent grant to the universities for the financial year 1987–88 compared with 1986–87. For later years, future grant levels will depend on the progress made on this programme.
The medical schools can expect to benefit from this substantial extra money, but they will equally be expected to contribute their share to the continuing search for greater efficiency and effectiveness. My right honourable friend the Secretary of State for Education and Science asked the UGC to give careful consideration to the level of funding it provides for medical education and the guidance it gives to universities in the light of the concern that has been expressed.
In answer to a point raised by the noble Lord, Lord Hunter, the UGC's new system for allocating funds to universities which the noble Lord mentioned is a laudable attempt to distribute the large amounts of public money concerned in a more rational and systematic way. That can be only to the benefit of the university system as a whole and to the medical schools within it.
618
The noble Lord, Lord Prys-Davies, was good enough to give me advance notice of some of the points which he was going to raise in this debate. I am most grateful to him. I have dealt with the first. Turning to his second point—the need for special arrangements to maintain teaching hospitals—the Government recognise that those districts which sustain teaching and associated hospitals incur extra costs in providing clinical facilities in support of medical education. To ensure that those are met without jeopardising services to patients, regions receive a special allowance, the service increment for teaching, known as SIFT. This allowance, which is calculated on a per student basis, has been continually uprated during the lifetime of this Government in line with inflation. For the financial year 1986–87, the Government have earmarked £274 million for that purpose. In addition, there are arrangements for giving considerable central support—up to 35 per cent. of the total cost—to new hospital developments associated with medical schools.
As noble Lords will be aware, the Government are committed to a policy of equal access to patient services across the country. That means that some regions and some districts, including some teaching districts, formerly with above average provision have had cuts in the rate of growth of resources. It was in order to ease such regions and districts over the resulting difficulties that my right honourable friend the Secretary of State for Social Services announced on 6th November a special fund of £30 million available over the next two years. Again, in reply to the noble Lord, Lord Richardson, this fund over the next two years will go to those regional authorities with less than national average growth in health service expenditure. Teaching hospitals, like other services, should benefit from this and it should help reduce the incidence of the very problems to which the noble Lord, Lord Prys-Davies, referred; namely, bed and ward closures.
Before turning to the third point of the noble Lord, Lord Prys-Davies, about research, I fear I must disagree with the right reverend Prelate the Bishop of Hereford, who I think implied that the Government only paid lip service to research. My right honourable friend the Secretary of State for Education and Science announced on 6th November an extra £24 million for the science budget, from which the Medical Research Council may benefit. Earlier reduction in MRC grants to medical schools have been partly offset by provision of extra science budget money for the council this year and next. As for the research areas mentioned by noble Lords, popularity does not influence the allocation of MRC funds. Quality of research proposals and scientific tractability are the determining factors.
One area where more research is being done is Alzehimet's disease. About a quarter of a million people suffer from this mental illness, which affects one person in 20 aged over 65 and as many as one person in four in their eighties. On the application of clinical genetics, the MRC is planning a new centre of molecular medicine at Oxford which will work in this very important area.
The noble Lords, Lord Prys-Davies, Lord Congleton and Lord Kilmarnock, asked whether the UGC will be given additional grant to pay for the

619
higher salaries of clinical academics. Presumably they had in mind the higher cost of applying to clinical academics the DDRB awards for NHS hospital doctors. The Government have accepted that clinical academics' pay should in principle be linked to NHS doctors' pay. The additional money being provided for universities next year will help to ease the general pressure.
More specifically, the Government have agreed to compensate the universities for the extra cost involved for the current year in compensating universities with medical schools for the difference between the clinical and non-clinical pay awards. My right honourable friend the Secretary of State for Education and Science met the Committee of Vice-Chancellors and Principals recently and explained the government position fully. In the light of that, the clinical academic staff salaries committee has now agreed to apply to clinical academics the DDRB settlement for the current year.
The delay this year, referred to by the right reverend Prelate the Bishop of Hereford, is not the fault of the Government. We made it clear that the universities would be compensated as soon as the non-clinical pay settlement was concluded and the cost of the difference could be calculated. The non-clinical settlement has still not been concluded.
Turning to other points raised by your Lordships, the noble Lord, Lord Prys-Davies, asked whether the Government intend to maintain the medical school students' intake. Decisions on the level of the medical school intake are taken in the light of regular reviews of future needs for medical manpower. The most recent review, that of the First Advisory Committee on Medical Manpower Planning, was published in March 1985. The decision was made at that time to maintain the previous level of intake.
A second advisory committee has been established under the auspices of the health departments. The medical profession and the interests of academic medicine are represented. The committee is expected to report to Ministers in about a year's time and we shall need to consider its conclusions before any decision on this matter is made.
The point raised by the noble Lord, Lord Kilmarnock, about DES-DHSS liaison is answered by my agreeing that close liaison between those two departments is essential when medical education depends for its funding on the combined policies of the DES on the universities and the DHSS on the NHS. Co-ordination machinery between the departments has always existed and is currently being strengthened.
Lord Kilmarnock: My Lords, may I ask the Minister whether she will pass on my suggestion that academic funds and SIFT funds should be canalised through a new co-ordinating committee? I have thrown that in perhaps rather late in the day, but I wonder whether she would bring it to the attention of her right honourable friend.
Baroness Trumpington: My Lords, I certainly shall bring that suggestion to the attention of my right honourable friend.
620
To continue, co-ordinating machinery between the departments has always existed and is currently being strengthened, and the health departments also have direct contact with the UGC through assessorship of its medical sub-committee. The point about earmarking UGC funds—although I shall still bring the main point to the attention of my right honourable friend—is that the Government are encouraging universities to be more efficient in the management of their affairs. This would not be helped by a policy that would greatly reduce their financial flexibility. Medical schools account for between one-fifth and one-third of departmental expenditure by their parent universities. As I said earlier, my right honourable friend the Secretary of State for Education and Science has asked the UGC to give careful consideration to the level of funding provided for medical education.
In the course of this debate the noble Lord, Lord Prys-Davies, expressed concern about the effect of the reduction in clinical academic staff on services to patients. I should like to put that in true perspective, if I may. There has certainly been an overall decline in recent years in the number of clinical academic staff wholly funded by the universities. I acknowledge that the effects of this are particularly grave for the medical schools because of the high turnover of staff, the need to cover a full curriculum and the requirements of patient care. Evidence of problems with recruitment are also a cause for concern.
Alongside this, however, I must point out that there has been a considerable increase in clinical academic staff funded from other sources. Between 1981 and 1985 the total number of full-time academic staff in the university medical schools increased by 2.5 per cent. Within that period the total number of full-time clinical academic staff increased by 7.5 per cent. We must therefore keep the reports of staff reductions in perspective.
Moreover, expenditure on hospital and community health services has risen since 1978–79 by 21 per cent. in real terms. Figures such as these reflect the extent of this Government's commitment to the health service. They show that any reduction in the numbers of university-funded clinical academic staff have not prevented a significant overall increase in the level of provision of NHS services.
In my travels I have had the rewarding experience of seeing incredible new techniques and discoveries. I have met brilliant men involved in teaching others. As I have said, I am well aware of their concerns. We welcome the responsible way in which representatives of the professions, of the health authorities and of the universities have sought to draw attention to their anxieties. We do listen and we have taken careful note of the GMC's warnings about standards. I repeat that there is no crisis, but the situation does mean that co-operation and good management are vital ingredients which will ensure that high levels of patient care and academic medicine are maintained and enhanced. We have a world-wide reputation for the finest doctors and the finest patient care. We are dedicated to upholding those standards of excellence.
Earl Jellicoe: My Lords, before my noble friend finally resumes her seat after a very able and

621
persuasive answer, may I put one question to her? She referred to the increase—the very welcome increase—in funding that was recently announced for the research councils. I think it is £24 million. In so far as the Medical Research Council will be the beneficiary of that, as chairman of the council I am very grateful. It will be a small beneficiary.
However, does my noble friend agree that by far the larger amount of that increased funding—I think the figure is £80 million but I am open to correction—will go to cover the extra commitment of the Science and Education Research Council to take account of the increased money which it will have to make available to cover its subscription to international organisations such as CERN resulting from the fall in the exchange rate of the pound?
Baroness Trumpington: My Lords, I think I should prefer to write to my noble friend in answer to his question. I found what he had to say a little confusing. I would rather he did not repeat or try to clarify his question now. I shall write to him.
Earl Jellicoe: My Lords, I think I can assure my noble friend that my facts are correct.
8.13 p.m.
Lord Prys-Davies: My Lords, I thank your Lordships for the debate and I am most grateful to all noble Lords who have taken part in it. Their contributions and analyses have sometimes been based on immense knowledge and experience of the teaching hospitals. On other occasions they have been based on experience and understanding of the role of the medical schools in our community.
I hope and trust that the teachers of medicine will derive some comfort from the debate. It is at least evidence of a concern in your Lordships' House about their conditions and terms of service. I also agree with the noble Lord, Lord Hooson, that the debate will, it is to be hoped, alert members of the general public to the difficulties in which the medical schools find themselves and to the fact that the schools should not be taken for granted.
I regret that I did not find the Minister's replies reassuring. We shall read and study her speech with care. However, it is my impression that her response has not been satisfactory because there is no indication from the Government that they are prepared to direct new finances on the scale that is required to strengthen and revive academic medicine.
However, I am indeed grateful to your Lordships for your contributions to the debate, and I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

New Tobacco Products
8.15 p.m.
Lord Hunter of Newingtonrose to ask Her Majesty's Government whether they will introduce legislation to ban the manufacture or sale of new tobacco products.
622
The noble Lord said: My Lords, I rise to put the Question standing in my name on the Order Paper. It is now well known that the avoidance of smoking tobacco products would reduce the mortality from all cancers by about one-third; particularly the avoidance of cancers of the mouth, throat and lungs but also other cancers, too.
One question is whether it is possible to mitigate the worst effects of smoking by using tobacco other than cigarettes. Lifelong pipe and cigar smokers have mortality rates which are close to those of non-smokers; in fact, the worst effect seems to be on their companions who may well find the smoke offensive.
The modern cigarette—the result of over 20 years of collaboration between successive governments and the tobacco industry—is also less liable to produce some diseases. In these cigarettes there is less than half the tar and nicotine than in the cigarettes of 20 years ago. The proof that this policy has been effective in some respects is that there has been a reduction of cancer of the lung in men and women, despite little change in the total consumption of cigarettes. This government policy has resulted in a situation where the tar and nicotine levels of tobacco in cigarettes is controlled. Not coffee only are these cigarettes less damaging to health but I suspect that they are less addictive because of the reduction of tar and nicotine. The combination of this, together with the effective campaign of the Health Education Council, has transformed the situation in the United Kingdom. One good example is travelling in the Underground; a situation quite impossible 10 years ago. This programme must continue—the control of the contents of cigarettes and the campaign against smoking.
It is against that background that attempts have recently been made to introduce tobacco products which consist of finely cut moist tobacco (or snuff) in small sachets intended to be held between the cheek and the gum. This practice, which is well established in the United States—and has been for years—and certain Scandinavian countries, is known as "snuff-dipping".
There is firm evidence that the oral use of smokeless tobacco of this type is carcinogenic to humans. This view has been endorsed by a number of expert bodies including the International Agency for Research on Cancer and, in this country, the Government's Advisory Committee on Carcinogenicity. The evidence is strongest for cancer of the mouth; the tumours often arising where the tobacco has been placed in the mouth. The excess risk of cancer may be nearly fiftyfold among long-term snuff users and there is a high morbidity and mortality rate. Treatment very often involves mutilating surgery. Most important of all, there are indications that among the young sucking tobacco in this way may create a dependence on nicotine and thus lead to the dangerous habit of cigarette smoking and possibly drug taking.
The Government have done two things because of the health risk. The first is a voluntary agreement controlling how the product can be advertised, promoted and sold. This agreement will run until the end of 1987. The Government have also actively supported the Protection of Children (Tobacco) Act 1986 making it illegal for any tobacco product,

623
including Skoal Bandits, to be sold to children under 16 years of age.
One remarkable aspect of this story introducing, as the product does, a further risk from tobacco, is that the manufacturers are in receipt of a Government grant in respect of a factory set up in East Kilbride to manufacture the product. Apparently, the product automatically qualified for assistance under the Industrial Development Act 1982. Regional assistance totalling about £1 million could be paid out if the project is completed as planned.
We require to have some explanation from the Government about this matter. These products have been banned from sale in the Republic of Ireland, and other countries, notably Japan and New Zealand, are reported to be taking similar measures. In the United States legislation has been passed requiring smokeless tobacco products to carry health warnings. There must be great concern in this House about the opening up of a new market for tobacco products which is subsidised substantially by the Government. The whole of the marketing of this product has been slanted toward young people—and we know what happened in the United States, where there was the addition of flavourings and sweetness which led to the rapid spread of this habit among young people. The United States Surgeon General's report indicates that 16 per cent. of all males between the ages of 12 and 25 have used some form of oral tobacco. In this country the pharmacists have decided not to sell this product in their shops, and I am told that the Independent Broadcasting Authority will not advertise it.
I believe that this House should make its views on this matter very clear. The Government should have further discussions with the manufacturers, not to negotiate warnings but to prohibit the sale of oral tobacco products in this country. The burden of responsibility and guilt following on the permissive society is already great. Let us not add to it. My Lords, I now put the Question standing in my name on the Order Paper.
8.22 p.m.
Lord Pitt of Hampstead: My Lords, I am sure that we are all grateful to my noble friend Lord Hunter of Newington for asking this Question. I call him my noble friend, even though we do not take the same Whip, because we went through medical school together and qualified on the same day. It is very appropriate that we should be considering this Unstarred Question in this House tonight because the Government are drifting into a situation which will cause problems for the country. We have been trying to obtain a ban on the advertising of cigarettes and other tobacco products, which the Government have opposed. They have insisted that the voluntary agreement which entails gradually reducing the levels of tar and nicotine, having health warnings more prominently displayed, and so on, will suffice.
As your Lordships know, I do not agree with that position, but that is the situation at present. However, now the Government are allowing a new tobacco product—smokeless tobacco—to be manufactured and sold in this country and are actually subsidising its
624
manufacture. Allowing that we do not want to be too draconian in our dealings with present users and in view of the current situation in regard to cigarettes and other smoking tobacco, if we are to control this really dangerous drug we must not allow the market for it to expand further; and permitting smokeless tobacco in this way is doing just that.
The noble Lord, Lord Hunter, has already explained about Skoal Bandits and their dangerous consequences. Their attraction for children is also a point to be noted. Since we have been campaigning against cigarettes, it is being said to children that taking this sweet is not so harmful as smoking. It is not difficult to understand how easily they will accept such a suggestion that this form of tobacco is less harmful than cigarette smoking. However, not only is it more harmful in some immediate respects, such as causing cancer of the mouth, but because of the level of nicotine in this smokeless tobacco it is probably a way of leading them toward the other harmful drug of cigarettes. Therefore I hope that the Minister will take on board this request that the manufacture and sale of these new tobacco products should be banned.
When we talk about new tobacco products we are speaking about smokeless tobacco and in particular the new product that we now have in this country, which is called the Skoal Bandit. We are late off the mark in the sense that the Government have already given a grant and the product is already being manufactured, but the proper course for us to take now is to find a way of stopping its sale and of bringing manufacture to a halt. I hope that the Government will take this matter on board.
We are now in a new Session of Parliament. In the last Session, we passed a Bill which banned the sale of these products to children. We want to extend that measure to adults. I believe that that is what is required at this stage. There should not be an extension in this country of the use of such a dangerous substance as tobacco, in particular in a form which offers a temptation to children to start using the product. I hope that when the Minister replies she will be able to tell the House that the Government are aware of the difficulties and the worries felt by many of us, and that they will give serious consideration to banning the manufacture and sale of this product.
8.28 p.m.
Lord Winstanley: My Lords, I think that there was a time when the noble Lord, Lord Hunter, of Newington, had a professional duty, perhaps even a statutory duty, to advise government on matters such as this. At that time I sometimes regretted that the noble Lord's advice was not heeded as carefully as some of us thought it ought to be. It therefore follows that I very much hope that your Lordships will heed the advice of the noble Lord, Lord Hunter, on this occasion because I think it is very good advice indeed.
The noble Lord has focused rather narrowly on one particular product, and rightly so. I think that everything he said about that product is wholly right and I hope that the Government will follow the advice that he has given. However, I hope that the noble Lord will forgive me if I widen this discussion a little to look at implications within his Question which perhaps he

625
did not wholly intend; and I should also like to look at some of the principles underlying this discussion.
When I say "implications which perhaps he did not wholly intend", I look at his Question and see that it says: "legislation to ban the manufacture or sale of new tobacco products". The noble Lord has made clear that he was referring to one particular product, and I agree with him wholly about that; but the noble Lord also reminded us of the immense benefits which have arisen from the introduction of lower tar cigarettes.
At the time that they were first introduced and there was a concerted effort to reduce the tar content in cigarette products, I remember very well that ASH and certain other people who pursue smokers with Cromwellian zeal objected very strongly because they felt that it was bad to make smoking safer. If you once made smoking safer you were somehow rather obliquely encouraging people to continue to smoke. The noble Lord, Lord Hunter, welcomed that trend, just as he welcomed certain other products which may assist people not to do with tobacco the more dangerous things that many of them do.
When I mentioned the principles underlining the matter I was referring to one principle: that we are all convinced that we should do what we can to eliminate the use of tobacco. We should, however, temper our enthusiasm with a little moderation lest, again with our Cromwellian zeal, we defeat our own ends. There is no doubt about the danger of smoking to those who smoke. However, I am not as convinced by the evidence of the danger of what is called passive smoking to those who do not smoke. I think that much of the research has been demonstrated not to have been soundly based, and some has been shown to be bogus. Let us not pursue such red herrings. I accept that to non-smokers smoking is offensive and that, where possible, they should be protected from the nuisance—and it is a nuisance—of other people smoking.
We are thinking about three groups of people. The groups I have in mind are, first, those who have never smoked tobacco. We should be primarily concerned with those people. Secondly, there are those people who are already addicted. Smoking is an addiction to nicotine. The noble Lord, Lord Hunter, may argue with me about whether it is a physiological addiction, but I believe it is. I am prepared to argue that point with him on another occasion. I do not think that we need to do so now. There are still people who smoke and intend to go on smoking until, sooner or later, they die—later, as they hope. There is nothing we can do about those people; nor is it right that we should try to do anything about them.
Those are the three groups. Let me return to them. First, there are those who have never started. That is where the real hope lies. Bearing in mind that this is an addiction, if we could stop people smoking we should have done a great deal to solve some of the problems with which we are faced.
We have not been outstandingly successful in our efforts. A great deal of money has been spent on propaganda, but there is evidence that it has not got through to young people. About four years ago, I carried out some research on young people which I
626
have already reported to your Lordships' House. I found that only one in ten new entrants to universities smoked, or did at that time. My research showed that nine out of ten new entrants to shop floor jobs in industry were established smokers. That showed clearly that we were not getting through to certain groups. That is something we should try to do.
Let me turn for a moment to those who are addicted to smoking, but not to those who want to carry on and have decided that they are not going to listen. I say to people who have never experienced addiction that giving up is not as easy as some people think. Some of those people need assistance. I think that any assistance that can be given should be provided. There is a high relapse rate, as we have all found in our medical work helping people to stop smoking. One is never cured once addicted.
A noble Lord much respected in your Lordships' House, the late Lord Platt, a former professor of medicine at my university and a former president of the Royal College of Physicians, will be remembered as a passionate non-smoker. He had of course once been a smoker. By the time that he became professor of medicine at the University of Manchester he would not allow anyone on his wards whose pockets had ever been contaminated by any kind of smoking implement. He became a confirmed and proselytising non-smoker. Before his death his wife told me, "Robert wakes up every few weeks weeping inconsolably after a dreadful nightmare in which he has dreamt that he has been smoking". So deep does the guilt go! It is important to remember that it is a problem and that therefore people need help.
I remember an occasion when an effort was made to help some of those people by developing new smoking materials. One, NSM, was produced by ICI. Courtaulds manufactured another product. An enormous amount of money was spent. Some of those new preparations were found to be helpful. Doctor Charles Fletcher, a member of the Royal College of Physicians' committee on smoking, a passionate anti-smoker, stated publicly that he had found new smoking material helpful in assisting bronchitics in his hospital wards to stop smoking. The lobby opposed it because it was a new kind of smoking material.
Lord Stoddart of Swindon: My Lords, I am obliged to the noble Lord for giving way. That is a most interesting point. Is it not also a fact that the Chancellor taxed that new smoking material at the same rate as tobacco, and therefore discouraged people from using the new smoking material, thus injuring the health lobby?
Lord Winstanley: My Lords, the noble Lord is correct. There were other obstacles, because the Independent Broadcasting Authority would not allow the companies to advertise it, nor would anyone else allow them to advertise it as a means of stopping smoking. There were many obstacles. I was merely making the point that smokers who want to give up sometimes need help. Some have found snuff helpful. I do not think that the noble Lord, Lord Hunter, wants snuff banned.

627
Let us remember that we have in our community established snuff takers who have been led to believe that snuff is safe. I notice that evidence is coming forward which suggests that it is not safe. I remember a distinguished physician in your Lordships' House years ago saying that he knew of no danger or damage caused by snuff save for a little unpleasant discolouring of the nostrils. It would be wrong to introduce legislation to ban established snuff takers from taking snuff. We should bear in mind that some of these new tobacco products have occasionally helped people who are genuinely anxious to stop smoking.
A nicotine impregnated chewing gum called Nicorette came onto the market. It was helpful to some people, but it has largely disappeared because we were unable to prescribe it under the National Health Service. I knew a young Swedish doctor who had never smoked in her life and who had done some research on that preparation. She became addicted to Nicorette. She woke in the morning and reached for her handbag, groping for her piece of nicotine impregnated chewing gum before she could get going. That underlines the point that all these products are addictive.
I am merely underlining the general point made by the noble Lord, Lord Hunter. We have a new product which provides an attraction to young people who are not smokers but who may become smokers through using it. They are also exposed to danger merely by using a product which has been demonstrated beyond all doubt to have clear dangers and which should therefore be removed from sale and banned from being manufactured. I wholly agree with the noble Lord in that, but let us temper our enthusiasm with a little caution, and let us occasionally remember that those smokers who want to stop smoking would like some help. Some of that help sometimes comes in the form of other tobacco products such as snuff. I hope that I am right in assuming that the noble Lord, Lord Hunter, does not wish us to ban all such things and was referring to the item which he particularised in his speech.
8.39 p.m.
Lady Kinloss: My Lords, my noble friend Lord Hunter of Newington should be thanked for asking this most important Question this evening. My research has led me from Mr. Cove, the oral surgeon of York District Hospital, who was most helpful but who so far had not come across the product in York. He was interested and suggested that I contact Professor Hume of the dental school and hospital of the University of Leeds. They of course both knew about the Skoal Bandit and were concerned about its sale, particularly to young people.
Professor Hume told me of Professor Kenneth Stephen, who is professor of the department of oral medicine and pathology at the University of Glasgow Dental School. I should like also to thank Mrs. Hillhouse of ASH Scotland for her interest and help.
Professor Stephen attended in January this year the United States national institutes of health consensus development conference on health implications of smokeless tobacco use. Summing up its conclusions in
628
the British Dental Journal, he writes, among other things:
"The presence of lead in smokeless tobacco may pose a special risk for the developing foetus".
That is only one of many troubles that can be caused, most of them to the mouth. Professor Stephen was worried about the possible increase in the sale of Skoal Bandits. As the noble Lord, Lord Hunter, has already mentioned, there is a factory in East Kilbride manufacturing Skoal Bandits. It is the company of US Tobacco International Incorporated. I understand that the Government have given a grant to the factory. Can the Minister say whether they are going to give further financial help?
The possible attraction of these things to young children is that they are not obvious to people; there is no smoke from them; and they are not subject to Customs and Excise duty, which raises the price of ordinary tobacco products. This means that they are more within the pocket of children and young people. There is also the "macho" image of their use by sportsmen. With cigarettes, there is normally a break at night while people are sleeping. However, in the United States—I believe in California—children and young people are known to go to bed with as many as four of these tobacco bags, as they are sometimes called, in their mouths at once. This means that there is little or no break in the intake of nicotine.
Skoal Bandits must be banned here. At the moment, I understand, they are not selling very well. I should like to ask the Minister whether the Government will bring in immediate legislation to ban the sale, production and promotion of these products. Not only are they a possible cause of cancer of the mouth, but nicotine is also a powerful drug, and snuff dipping, as the practice is known, represents a form of drug dependence. Is the Minister aware that other forms of smokeless tobacco are manufactured in the United States and, I believe, elsewhere, but not yet here? Some arc called Skoal Cogenhagen or Skoal Longcut, and there is a new one, Skoal Straight. Can the Minister say that if there was a request to manufacture them here the Government would refuse to grant a licence?
Various universities and colleges in the United Kingdom have been approached by promoters of Skoal Bandits. At Strathclyde University, there is what is known as the freshers' fair at the beginning of the academic year, at which student bodies have stalls to tell new students of clubs and societies of interest in the university. US Tobacco made an approach with a request for such a stall. The students checked with the local health education project and subsequently refused permission. I believe that this kind of advertising is not now being promoted. In Fife, a parents' group begged retailers not to stock Skoal Bandits. Most complied with the request. The more pressure that is put by the public upon retailers not to stock them, the better.
I understand that in Hong Kong all new tobacco products are now banned. I am told that of all deaths from cancer in India, the oral form represents the largest proportion. This is thought to be due to tobacco chewing and betel nut chewing, as some of the betel nuts have powdered tobacco in them.

629
In the Second Reading debate on the Protection of Children (Tobacco) Bill on 2nd June 1986, the noble Baroness, Lady Hooper, replying for the Government, said at col. 692 of Hansard:
"As part of the discussions, the manufacturers have agreed to the inclusion of health warnings on their packs and advertising material".
Can the Minister say whether these warnings are now in use?
This is a very sad subject. I hope that the Government will do all they can to ban the sale of smokeless tobacco products immediately, even if legislation should be necessary.
8.44 p.m.
Lord Prys-Davies: My Lords, we are indebted to the noble Lord, Lord Hunter of Newington, for focusing attention on new tobacco products and what should be the state's response thereto. Usually, we have to continue to live with long established habits shared by millions of people even though those habits are known to be pregnant with risk to the health of the individual. But that is, of course, no reason why a country should allow or encourage the growth of new habits which will create conditions for addiction to grow ever wider and wider and which will handicap the generation of tomorrow. It is against that setting and with particular reference to this remarkable new product, Skoal Bandits, that the noble Lord, Lord Hunter, argues the case for government action to prohibit the manufacture and sale of new tobacco products.
The noble Lord has described this product, Skoal Bandits. "Bandit" is a name almost calculated to have a strong appeal to the young. We are told that it is a product that people suck as an alternative way of getting the stimulating effect of nicotine. With the great authority that he commands in these matters, the noble Lord has warned that the clinical evidence demonstrates that this particular tobacco product significantly increases the risk of cancer of the mouth and possibly premature death for many of its dependents.
We have been reminded that government departments of health in Great Britain have warned against the health risks involved. I would remind your Lordships of the common sense of the people of East Kilbride, where this product is manufactured in a factory set up with assistance from the public purse. Those people, too, have called for the Government to ban the production and promotion of this product.
I should like to dwell for a moment or two on this amazing experience in East Kilbride. I understand that 1 million of public money has been committed to the East Kilbride factory. Surely, the public purse should be seen to serve the public interest. In the light of the East Kilbride experience, do the Government contemplate drawing a line somewhere to stop the grant being paid in similar circumstances in the future? Will there be closer collaboration between the Tobacco Research Council, the Department of Trade and Industry and the Department of Health and Social Security before financial assistance is given for the manufacture of a new tobacco product?
630
I return now to the question that the noble Lord, Lord Hunter, has addressed to the Government. Should new tobacco products be banned in Great Britain? In the specific situation presented by Skoal Bandits, it appears that we are in a unique position. On the one hand, there is clear evidence that the product creates significant health risks. On the other hand, there is no social justification of which I am aware for its continued manufacture and sale. Unless the contract between the Scottish Development Agency and the manufacturing company contains special provisions, there is no apparent financial or economic justification for its continued manufacture and sale.
There is therefore a powerful case for banning the manufacture and sale of this product in the United Kingdom. Like the noble Lord, Lord Winstanley, I do not believe that we can proceed from this specific situation to assert generally that the Government must ban the manufacture and sale of all new tobacco products. However, in fairness to the noble Lord, Lord Hunter, it appeared to me that he was concentrating his fire on Skoal Bandits and not on all new tobacco products. The question of whether a particular tobacco product must be banned must depend on the nicotine content of the product and the health risk involved. The noble Lord, Lord Winstanley, was putting this point. Would we, for example, wish to ban the manufacture and sale of a new product if its nicotine content had been drastically reduced and the health risk correspondingly reduced? It seems to me that we cannot prejudge a product which has not as yet been produced.
However, it would be complacency on our part to ignore the health risk which may be carried within any tobacco product. I suggest that we should no longer treat a new tobacco product as if it were just another domestic product. I am advised that nicotine is a drug. Therefore should not nicotine, like any other drug, have to be judged by the Safety of Medicines Committee under the Medicines Act? Whether a new tobacco product should be banned would therefore be the responsibility of the Safety of Medicines Committee. I am wondering whether the Government would be prepared to consider such a development.
8.52 p.m.
Baroness Trumpington: My Lords, I want your Lordships to know that I have a bad cold.
I should like to say immediately that I listened to the speech of the noble Lord, Lord Hunter of Newington, with the very greatest interest, and I am very grateful to him for initiating this short debate. During their speeches many of your Lordships made reference to the well-documented evidence of the harmful effects of smoking on health, and expressed concern that the habit is responsible for so much preventable disease and premature death. I can assure noble Lords that the Government share this concern and that we remain fully committed to pointing out all the dangers involved and to discouraging the habit.
However, tobacco has been available for literally hundreds of years, and as cigarette smoking became an established part of life for many people before the health risks were known, or were widely acknowledged, it is unrealistic to expect to eliminate the habit

631
overnight. The noble Lord, Lord Winstanley, spoke about assistance to smokers to help them to stop. I should like to tell the noble Lord—he may already know—that the department gives an annual grant to the Maudsley Hospital to meet the costs of an experimental anti-smoking clinic. The project is being fully evaluated with a view to assessing whether their methods can be extended within the NHS.
This Government have made good progress in reducing smoking, and I think that has been recognised. The system of voluntary agreements restricting the advertising and promotion of tobacco products has contributed to a consistent decrease in smoking since the 1970s. The latest figures available show that 36 per cent. of men and 32 per cent. of women now smoke, compared with 52 per cent. of men and 41 per cent. of women in 1972. We are therefore making considerable strides without having to resort to wielding the big stick and taking legislative action with regard to advertising.
The Government are particularly concerned, of course, to deter children and young people from taking up smoking, and judging not only from the speeches to which we have listened this evening but to the voices of many people outside this Chamber, that concern is widely shared. Much of this debate has naturally centred on Skoal Bandits, a product which many people fear may be especially attractive to the young, possibly creating a dangerous dependence on nicotine and thus leading on to cigarettes. The noble Lord, Lord Hunter, mentioned that Skoal Bandits were banned in Japan. I would merely say that in Japan the trading company involved has voluntarily decided not to import Skoal Bandits as a result of public pressure; there is no legislative ban.
I appreciate the reasoning of those noble Lords who have argued that, as there is a known health risk associated with this new product, it should have been banned before it was launched on the UK market. However, I must point out to your Lordships that the truth of the matter is that the only thing new about Skoal Bandits is their form of presentation. Skoal Bandits—already graphically described by the noble Lord, Lord Hunter—are merely a new presentation of a form of tobacco that has been with us since the 16th century. The noble Lord, Lord Pitt, will appreciate that I am talking about snuff or chewing tobacco. When Skoal Bandits were introduced there were already a number of brands of chewing and plug tobaccos on sale in the UK, although they have not traditionally been widely used or promoted. What was different about this product was the forceful way in which the company intended to promote and advertise it. Accordingly, the Government were determined to safeguard young people and to counter any possible appeal this product might have for them. That is why we concentrated our efforts on restricting the marketing of the product.
What did we do? The Government ensured that sufficient controls were imposed to ensure that young people in particular were protected before the product was launched on to the UK market. We succeeded in negotiating a voluntary agreement with the manufacturers which placed considerable restrictions on the way in which the product could be advertised,
632
promoted and marketed. Your Lordships will recall that at the same time the Government offered full assistance to a Private Member's Bill introduced in another place, but I think brought forward in this House by the noble Lord, Lord Pitt, which sought to make it illegal for this type of product to be sold to young people. That Bill came into force last month as the Protection of Children (Tobacco) Act and it makes it illegal to sell any tobacco product to someone under the age of 16, irrespective of the person for whose use the product is intended.
Last month the Department of Health and Social Security issued a circular which draws attention to the changes in the law. Copies were issued to bodies responsible for the enforcement of the law and the education and social well-being of young people. A copy of the circular has been placed in the Library. Your Lordships may also be aware that the Independent Broadcasting Authority, following representations made to it, banned the advertising of Skoal Bandits on television and commercial radio.
The noble Lords, Lord Hunter and Lord Pitt, and the noble Lady, Lady Kinloss, will understand that the Government were placed in a very difficult position when US Tobacco made its application for a grant. The manufacture of tobacco products is a qualifying activity in terms of the Industry Act, and the Government could not withhold regional development grant without being open to challenge in the courts. In acting only against Skoal Bandits or any other firm manufacturing tobacco products, the Government might have been held to have exercised their powers improperly. Like any other company setting up in a development area, US Tobacco has had an entitlement under existing legislation to government financial assistance.
I have of course noted the remarks regarding immediate legislation to ban the Skoal Bandits made by various noble Lords and the noble Lady, Lady Kinloss, during the course of this short debate, and I shall ensure that my honourable and right honourable friends are made aware of them. I can assure your Lordships that the Government are not complacent about the availability of this particular product, or indeed about the whole smoking issue.
We shall continue to keep the situation under review and will take any additional steps in the interests of public health should that appear necessary. That applies both to Skoal Bandits and to any other new tobacco products which may appear on the market. The use of tobacco in any form is a matter of great concern to the Government, and we shall continue to discourage its use in whatever form. Our record in this country in reducing cigarette smoking stands comparison with that achieved anywhere in the world, and we believe that we can continue to build on the progress achieved so far.

John Ernest Rolfe and Florence Iveen Rolfe (Marriage Enabling) Bill [H.L.]
Bill reported from the Select Committee without amendment.
House adjourned at one minute past nine o'clock.