Lords Sitting of 25 November 1987

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

The Lord Bishop of Chester
Michael Alfred, Lord Bishop of Chester—Was (in the usual manner) introduced between the Lord Bishop of Rochester and the Lord Bishop of Carlisle.

Disabled Persons' Home Equipment: Report
2.43 p.m.
The Lord Bishop of Rochester: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 when the report of the investigation into the supply and use of home equipment issued to disabled people is to be made public and whether it will contain the views of the voluntary agencies.
The Parliamentary Under-Secretary of State, Department of Health and Social Security. (Lord Skelmersdale): My Lords, voluntary agencies with an interest will have an opportunity of commenting on the report if and when it is published. Although it is concerned with the role of the statutory authorities, welcome advice was received from some voluntary agencies and is reflected in its findings. A decision on publication will be taken as soon as possible.
The Lord Bishop of Rochester: My Lords, I am grateful to the Minister for his reply, although I am bound to say that it does not reflect much progress since I asked a Written Question eight months ago. As the Government have repeatedly expressed their commitment to statutory and voluntary agencies working together, does not the noble Lord feel that this would be a good opportunity for such collaboration to take place before any decisions are made?
Lord Skelmersdale: My Lords, it is not normal practice to consult voluntary organisations generally on reports produced under the National Health Service scrutiny programme. In this case however—and the right reverend Prelate will appreciate that it is a special case—the appropriate voluntary providers and contractors were approached.
Lord Ennals: My Lords, will the noble Lord be surprised that I am a little worried when he says "if and when it is published"? Is not this report in a sense long overdue? Are we not talking about a good deal
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of quite valuable equipment that is of considerable concern to the families of disabled and elderly people? Could the noble Lord not give a guarantee that the report on which he says there has been consultation with voluntary organisations will be published in order that we all may know its contents?
Lord Skelmersdale: My Lords, I am not in a position to give the guarantees that the noble Lord, Lord Ennals, asked for; but I would expect that in some form this report will indeed be published. We need to consider what, if any, advice to give authorities alongside the report. Until we have had our proper consideration, it is not appropriate for me to give the guarantees for which the noble Lord asked.

Nuclear Materials: Alleged Black Market
2.45 p.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the Channel 4 programme "Dispatches", of Friday 30th October at 20.15, in which the alleged existence of a black market in weapons-grade plutonium and enriched uranium was illustrated by reference to their alleged possession by Israel, Iran and Iraq, and whether they propose to take action to combat these dangers.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we are aware of the programme, but we have no evidence to support allegations in it of a black market in weapons grade plutonium or enriched uranium. We have full confidence in the present system of controls on such material. There is a long history of hoaxes in this field.
Lord Jenkins of Putney: My Lords, I am grateful to the noble Lord for that reply. Is he aware that his confidence may be misplaced? The information contained in the programme was of a factual nature and it seems likely that there is a large quantity of plutonium and enriched uranium floating around the world today, some of which comes from Sellafield or Dounreay. Is the Minister not aware that once a quantity of this material falls into the hands of Iran, Iraq or Israel, as has been asserted already to have taken place, the situation could be serious because it is only one stage from that to the hands of terrorists?
Lord Glenarthur: My Lords, I can assure the noble Lord that we are by no means complacent. Great efforts in collaboration with others are made to control the export of sensitive nuclear materials, and we keep a close eye on any attempts to circumvent those controls.
Lord Mayhew: My Lords, will the noble Lord give an assurance that no plutonium or enriched uranium of British manufacture is missing?
Lord Glenarthur: My Lords, I can give that assurance in so far as it is possible to account for anything other than the tiniest amounts of such material. British Nuclear Fuels Limited and the United Kingdom Atomic Energy Authority produce an annual balance sheet of material which is unaccounted for. The 1985–86 figures were published in November 1986, and they show no adverse trends and gave rise to no concern over either the safety or the security of United Kingdom Atomic Energy Authority and British Nuclear Fuels Limited plant.
Lord Irving of Dartford: My Lords, is the noble Lord aware that if the ownership of nuclear weapons goes much further, as it will if the programme was accurate, that will go a long way to invalidating the agreement which is about to be signed between Russia and America? Secondly, is the Minister aware that Admiral Turner—who has been a friend to this country and whom some remember as Commander of the Sixth Fleet and later Director of the CIA—said in the programme that during his time as director he was aware of the black market and that one of the inspectors of the atomic authority is also aware that what has been said by the authority is not correct? Will the noble Lord look into the matter more thoroughly?
Lord Glenarthur: My Lords, the International Atomic Agency reported in July that in 1986, as in previous years. the secretariat did not detect any anomaly over safeguarded nuclear material that caused it concern. Naturally, this area requires continual refinement in order to ensure that things cannot go wrong, but I firmly believe that the safeguards at present in train are adequate.
Lord Mayhew: My Lords, while the Minister's reply to my question was reassuring, can he say how much of such material of British manufacture is missing in total?
Lord Glenarthur: My Lords, included in the 1986–1987 figures there are two instances in which specific items of material could not be accounted for. At Sellafield one piece of a broken fuel pin was missing when its container was opened. A subsequent inquiry concluded that it had probably been included with active stainless steel waste. The inquiry could not believe that it was outside the shielded facility at the Sellafield site. In a shipment of high enriched uranium coupons (18 grammes per coupon) from Winfrith to Dounreay, it was found that one can contained 149 coupons instead of a listed 150. An inquiry concluded that the weight of the evidence indicated that the missing coupon had been loaded into another can and therefore no loss had occurred.
Lord Jenkins of Putney: My Lords, does the Minister agree that the amount of processing now going on and the amount of plutonium that is passing around the world as a result of reprocessing in this country and elsewhere means that the situation is sufficiently grave to merit very close examination? If these reports are true—and many of them seem to be very factual—the consequences will be very great, almost unbelievable.
Lord Glenarthur: My Lords, of course it is a serious matter. But, as I said, we believe that the safeguards that we have and at which we continually look are adequate.
Lord Mellish: My Lords, can the House have an assurance that there is no such black market in Putney?

Common Land: Legislation
2.50 p.m.
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they propose to honour the Conservative Party manifesto promise to safeguard common land on the basis of the Common Land Forum.
Lord Hesketh: My Lords, the Government have already announced their acceptance of the case for legislation based broadly on the report of the Common Land Forum, as published by the Countryside Commission in September 1986, and we intend to introduce legislation at a suitable opportunity when parliamentary time permits.
Baroness Nicol: My Lords, I am grateful to the Minister for that Answer. Can he be a little more helpful about the possible timetable? In view of the fact that this proposal appeared in the Government's election manifesto, one would expect that a little more attention could be given to introducing it. After all, we have waited 22 years for such legislation. Can the noble Lord say whether there is opposition from any quarter; if so, how real that opposition is; and what steps the Government are taking to deal with it?
Lord Hesketh: My Lords, I assume that the noble Baroness is referring to the views of the Moorland Association. Departmental officials have had two meetings with representatives of that association and the Countryside Commission. I hope that it will prove to be possible to modify the forum's recommendations in a way that will satisfy its requirements. We are seeking to find some arrangement that will provide for the maximum degree of public access to heather moorland commons which is consistent with the need for proper management of grouse moors and the requirements of nature conservation.
Lord Hunt: My Lords, is the Minister aware that during the two and a half years of the Common Land Forum's deliberations five whole commons were deregistered and hundreds of acres of grazing land were lost? To put it mildly, is it not likely that during the 15 months that have elapsed since the forum reported, further losses and depredations have occurred? Does not that add great urgency and importance to reaching a decision and taking action on that report?
Lord Hesketh: My Lords, I am aware of what the noble Lord, Lord Hunt, has just stated. I wonder

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whether he is suggesting that maybe there should be separate earlier legislation with regard to deregistration. The difficulty is that we are committed to the introduction of a comprehensive Bill. I do not think that it would be desirable to single out one particular item to be dealt with separately. Limited legislation of that kind would be unlikely to receive widespread support.
Lord Harmar-Nicholls: My Lords, will my noble friend draw the attention of his colleagues in the Government to this Question which shows that the Front Bench opposite as well as those on these Benches expect the Government to implement their election manifesto as quickly as possible, whether it concerns the safeguarding of common land, privatisation or the extension of educational opportunities in this country?
Lord Hesketh: Yes, my Lords.
Baroness Nicol: My Lords, I am sorry to come back on this matter but is the noble Lord aware that the views of the Moorland Association, or at least the views of moorland grouse shooting interests, were made clear to the forum and that the final result was brought forward in the light of those views? I understand that the Moorland Association has 120 members. In view of the very large number of members represented by the other bodies, could not more weight be given to their views?
Lord Hesketh: My Lords, the interests of the grouse are also the interests of birds of prey, for example, and it is a very real problem. The trouble is that the interests of human beings and hen harriers, for example, are often very different. The last time I saw a hen harrier, she was not at all pleased to see me.

Computer and Business Studies
2.55 p.m.
Lord Molloy: 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 can confirm that computer and business studies are being removed from (a) the state school syllabus; and (b) the syllabus for city technology colleges.
The Parliamentary Under-Secretary of State, Department of Education and Science (Baroness Hooper): My Lords, the Government do not intend that computer or business studies should be excluded from the curriculum either in maintained schools in England and Wales or in city technology colleges. Both subjects may be taught partly through the relevant foundation subjects of the national curriculum and as non-foundation subjects.
Lord Molloy: My Lords, I am grateful to the noble Baroness for that Answer which, on the face of it, seems to be reasonably satisfactory. However, can she state categorically that it is not the intention of the Government to split up the teaching of these subjects and make it part of the responsibility of those who teach
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mathematics to teach the programming, or of those who teach English to teach word processing? Will physics teachers be teaching electronics? In other words, does this mean that neither business studies nor computer studies will be a subject to be taught separately? I should like to have a quite definite answer to that question. Is it intended to split up those subjects and fragment them, or will they remain as two important subjects of study on their own as hitherto?
Baroness Hooper: My Lords, I can assure the noble Lord that those subjects will continue to be treated as cross-curricular themes and that initiatives such as the TVEI will continue to have scope to operate. What has happened so far is that of the two groups set up earlier this year, the science curriculum working group has been asked to cover the practical use and application of computers and information technology and the mathematics curriculum working group has been asked to have regard to this and the development of economic understanding. The remaining curriculum working groups when set up will be asked to take account of other relevant subjects and these cross-curricular themes.
Lord Molloy: My Lords, can the noble Baroness tell the House now whether that would in any way affect the future of those people who have devoted their lives to teaching computer studies alone? Are we to follow in the steps of the United States of America, which is top in computer studies? In the USA, computer studies constitute a subject taught by specialist computer teachers. Are we to continue along that line or not?
Baroness Hooper: My Lords, there will be sufficient flexibility in the plans for the national curriculum to allow for both.
Baroness Carnegy of Lour: My Lords. does my noble friend agree that, increasingly, computers are a tool by which pupils learn many subjects which will feature in the core curriculum and that computer studies as a discrete subject are for those who want to specialise in that subject? Is that correct?
Baroness Hooper: Yes, my Lords. The intention is that there will be a continuing use of computers to cover subjects throughout the curriculum but for those students and pupils who wish to make computer studies a specialist subject, there is also scope for that to happen both in normal schools and in the proposed city technology colleges.
Lord Molloy: My Lords, will the Minister accept that the purpose of the Question was not to find out what computers would be teaching, but to discover whether young people are to be taught how to construct and programme computers, so that they can then, later on, teach many other things?
Baroness Hooper: My Lords, I am sure that a subject called computer studies must include some instruction on the method of creating computers.
Baroness Seear: My Lords, did the noble Baroness say that economic understanding should be dealt with

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by the committee on mathematics? I can well understand that, to an econometrician, this might conceivably be appropriate. But economic understanding could possibly be better developed by people who do not come out of the mathematics faculties.
Baroness Hooper: My Lords, economic understanding is again a cross-curricular theme which will be dealt with by a number of working parties that have been set up. I referred to that as a specific one, where instructions have already been given on those lines.

Business
2.58 p.m.
Viscount Davidson: My Lords, after the end of the short debate on privatisation and before the short debate on alcohol abuse, my noble friend Lord Skelmersdale will, with the leave of the House, repeat a Statement that is to be made in another place on the Primary Health Care White Paper.
With the leave of the House, I should like, as usual, to say a word about the two short debates standing in the names of the noble Lord, Lord Ezra, and the noble Viscount, Lord Falkland. It is customary in short debates that the mover is allowed approximately 15 minutes, and that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debates. In the case of the short debate in the name of the noble Lord, Lord Ezra, this means that all other speeches should be limited to a maximum of 8 minutes and in that of the noble Viscount, Lord Falkland, to 12 minutes. If any noble Lord should speak at greater length, it would be at the expense of subsequent speakers in the debate.

Privatisation
2.59 p.m.
Lord Ezra Lord Ezra rose to call attention to the financial and economic aspects of Her Majesty's Government's privatisation programme and to the case for introducing effective competition, and to move for Papers.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I believe that in tackling the question of privatisation this afternoon we shall be discussing one of the major policies pursued by the Government, in the course of which a number of enterprises have already been privatised and a number more are due to be privatised. It therefore seems to me that this is the right time to be taking stock of the situation.
I am indebted to those noble Lords, all of whom have considerable knowledge of the subject, who wish to speak in this short debate. I particularly appreciate the fact that the noble Lord, Lord Young of Graffham, will be replying. I am also very pleased that the noble Lord, Lord Mason of Barnsley, should have chosen this debate for his maiden speech, because he is a person whom I have known for many years and particularly knew, of course, when he was Minister of Power in the late '60s.
In order to cover this ground about privatisation I think it is necessary, albeit briefly, to have a look at the history. It all started in 1945 with the Attlee Government when the major measures of nationalisation were taken. It has become popular since to criticise the so-called Morrisonian principle. It was Herbert Morrison who devised the ways in which these nationalised industries should be run. I personally can see nothing wrong with the Morrisonian principle. It was the way in which that principle was applied that went wrong.
The Morrisonian principle was very simple. It was based on the thesis that the basic services and industries of the country should be run under public control but by independent boards and that those independent boards should be left free to run the enterprises so long as they had regard to the public interest in all respects and that they broke even in their operations. I cannot think of a better way of putting it.
The trouble is that right from the start the thing went wrong. I speak with certain knowledge, because I was involved in one of these nationalised enterprises from 1947 right through to 1982, so I ran the whole gamut of all the political changes that we had in Britain in that period. And I can say that the very Attlee Government who thought up this major principle in fact prevented it from being properly applied, because in the coal industry—if I may cite that as an example—prices had been held during the war by what was called the gentlemen's agreement with the private coal producers and that gentlemen's agreement was imposed on the nationalised enterprise. The result was that when the energy situation changed in the 1950s, the coal industry of Britain, instead of having built up substantial reserves, had none.
That was one illustration of how it went wrong. But all governments, I am afraid, used the nationalised industries in this period, which lasted from 1945 to 1979—because that was when the present Government came to power—as a means of applying their policies. This was totally inconsistent, in my opinion, with those enterprises achieving commercial success and performing their duties according to statute.
So I have no doubt that changes had to be made. Indeed during this period such was the concern with this matter that three White Papers were issued—in 1961, 1967 and 1978—to try to correct these anomalies, but they did not do so. Some of these White Papers even introduced further anomalies which further complicated the situation. So I have no doubt at all that a different solution had to be found. The question we have to ask is whether the privatisation solution is the right one, and that is what I should now like to address myself to.
I have tried to work out what I believe are the Government's objectives in privatisation. I am sure the noble Lord, Lord Young of Graffham, will be able to correct me if I have left anything out. But having carefully read what has been said on this subject by government Ministers, I have come to the conclusion that there are four objectives. The first is the diminution of the public sector, which I can see from the noble Lord, Lord Young, is a correct one.

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The second is to bring about the impact of competition and market forces on these enterprises; that is two right out of four. The third is to provide additional financial resources for the Treasury, and the fourth is to widen share ownership. It appears that I have got three right out four according to the noble Lord, Lord Young.
A noble Lord: Four out of four.
Lord Ezra: The problem is that I have not been able to put those objectives in order of merit, because the Government have somewhat changed the emphasis as time has gone on, as I shall now try to show. If you take the privatisations which have so far occurred they fall into two categories. The first category is those enterprises which were in a competitive situation and remain in a competitive situation—such enterprises as Cable and Wireless, Amersham International, Britoil, Associated British Ports, Enterprise Oil, Jaguar, National Freight and National Bus.
These were all, it could be argued, in a reasonably competitive situation. Therefore it is not unreasonable that they should enter the private sector and compete freely without the intervention of government. Generally speaking, they have all done fairly well, but then most of them were doing pretty well anyway; otherwise they could not have been sold. They might have done just as well under public ownership. We do not know. But I think that there is a case in logic for saying, if they are in the competitive sector, let them be fully in it.
But it is the second category on which I should like to concentrate; that is, the category of virtual monopolies in the supply of public utility services. I believe that all of us in this House and elsewhere in the country are a bit concerned about this problem. We have had two public utilities so far privatised, telecommunications and gas, and we have two more which are likely to be privatised according to Government pronouncements, electricity and water. The problem that we have found in your Lordships' House during the course of the privatisation debates on telecommunications and gas is that we felt that the competition objective did not seem to have been met in the proposals which were put before us and finally passed through the processes of legislation, which is a matter of grave concern.
What we have been faced with is that, instead of having public monopolies, we have private monopolies. The Government have taken the view that a private monopoly is better than a public monopoly so long as it is effectively regulated. But I must say that on this side of the House we have grave concern about the proposals for regulation in the case of those two enterprises.
If we take the position in relation to competition, for example, so far as telecommunications is concerned the Director-General of Oftel had an objective to promote competition. When it came to gas, however, the Director-General of Ofgas merely had to enable competition and that clause was introduced into the Bill only as a result of an amendment. So I must say that I come to the conclusion that, of the four objectives which I
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identified, the competition objective seems to have gone into last place.
We are all aware of the problems that have arisen over telecommunications. The feeling, which is fairly general among the public, justly or unjustly, is that service has suffered in the interest of achieving good financial results. A lot of work will have to be done to correct that impression. In the case of the gas industry, whereas there is a quite substantial degree of regulation as regards the domestic market, there is none for the industrial market. The Office of Fair Trading is at present looking into that issue.
At the moment therefore there is concern about the way in which these public utilities have been put into the private sector. I wish to consider the two big candidates for privatisation in the future. They are water and electricity. The first thing that can be said about these two is that they are services and products which effect everybody in the country. Everybody has to use water; everybody uses electricity. So dimensionally they are much more important even than telephones—although no doubt we all use those—but certainly more important than gas, because not everybody uses gas.
This issue has to be treated with particular care. We have noted in the case of water that, whereas the Government started off by praising the integrated river system that has been developed in this country and proposing that the system should be privatised in its integrity, they have now changed their minds. They have now decided that the statutory powers of the water authorities should be given to a new authority and that they should retain simply the more industrial aspects of the business; namely, the supply of water and the treatment of sewage.
That change has created a strong opposition view within nine of the 10 water authorities. In other words, the management is not in support of what has been proposed. It is saying that the emphasis should be given to maintaining the integrity of the water supply system. Indeed I get the impression that it is saying that it would rather remain in the public sector and continue to operate the integral system than be privatised on the basis the Government are now proposing.
But there is a third problem. Even on the basis which the Government are now proposing very little competition will be introduced. Apparently the Government have not thought out ways in which by franchising, by subcontracting and by management contracts some element of competition could be introduced into the system. We seem to be falling into the worst of both worlds. We seem to be on the verge of giving up what is generally admitted to be a very successful integral water supply system and going into a system which even if it is split will have no element of competition in it. I think that this requires much further consideration before decisions are reached.
In the case of electricity exactly the same kind of argument applies, because we now have an integrated electricity system in which the grid, the generation and the distribution elements are totally integrated. That has led to our having one of the most secure and technically efficient systems in the world. There is no doubt about that. But the Government have said that

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they want to introduce competition on privatisation. I agree with that principle, but the way in which that will be done has raised many issues. Only in today's Financial Times Mr. John Baker of the CEGB wrote an article on the subject in which he pointed out, in effect, that if the Government were to go ahead with what apparently they intend the lights might go out. We have the problem of seeing how this will be worked out. How will these basic integrated utilities be privatised in such a way that competition can be introduced without jeopardising security of supply?
I conclude by saying that I think these issues are so important, so complex and have led to such differing views both within and outside the industries that before the Government proceed any further with either of them they should put together all the options in a consultative document and let us have a major national debate on the whole issue. I beg to move for Papers.
3.15 p.m.
Lord Thomas of Swynnerton: My Lords, all noble Lords, particularly those on this side of the House, will be most grateful to the noble Lord, Lord Ezra, for introducing this debate on what is after all one of the most important aspects of this Government's policy. The noble Lord began on an historical note and so shall I. Edmund Burke in his Thoughts On Scarcity in November 1795 remarked that:
"The moment that government appears at market all the principles of market are subverted".
That remark was not made by my noble friend Lord Harris of High Cross or indeed any member of what might be called the libertarian wing of the Conservative Party. It was made by one who is looked on by many as the prophet of the paternalist wing of the Conservative Party. It is a remark therefore which suggests that this country's tradition, unlike the tradition of our Latin and German neighbours on the Continent, was in the past one of free enterprise. That good advice by Edmund Burke obtained until the late 19th century.
Here again I dispute with the noble Lord, Lord Ezra, as to when the beginning of that history was. After all it was nearly 100 years ago that Sir William Harcourt speaking from the Liberal Benches in another place remarked:
"We are all Socialists now".
He was probably referring to one of those companies—telephones—which has only recently been denationalised.
All of us know how in the course of the late 19th and 20th centuries the idea of public ownership took hold of the imagination of many members of the political classes of this country. I do not refer only to members of the Labour Party but to the Liberal Party, high-minded civil servants and in some cases to members of the Conservative Party too. Looking back, given the apparent failure of capitalism in the 1920s and 1930s and the terrible shock which the First and Second World Wars gave to the civilised order throughout the civilised world, we perfectly understand how the experiment of nationalisation was introduced.
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I think, however, that many of us on all sides of the House—it is clear that the noble Lord, Lord Ezra, is among them—would now feel that that experiment of nationalisation had not solved all the problems that it was supposed to solve by the end of the 1970s. It had not solved, for example, the problems of dealing with labour relations in a very large workplace. It had not solved the question of how to raise money for public enterprises. It had not really even solved how to do its own accounting. Do I dream or have I read recently that before nationalisation British Telecom had only one accountant in the entire enterprise?
Nationalisation has not shown itself particularly responsive to public interest. I remember that I once asked a question in your Lordships' House about whether post could not be restored on Sundays. I was rather sharply sat upon by my noble friend who answered me, and I was told that it was not the Government's business to answer on behalf of the Post Office. But if not the Government, who was responsible? Your Lordships may guess that I became involved in an extremely long and abortive correspondence on that subject.
While this apparent failure was being counted we also saw the revival, as it seemed, of capitalism. In the 1960s and 1970s the products which really made people happy, such as food, clothing, holidays abroad and consumer durables, all seemed to be produced from the free sector. Far from seeing the end of capitalism in the 1920s and 1930s, it was evident that that was not going to happen.
Therefore, it is understandable that a government such as the one who are now in power and who are concerned with the freedom of the individual and with trying to increase responsibility should also be embarking on a course of privatisation. They have done so, as have many other governments throughout the world who have perhaps not embarked so fully on that course as yet and who are not specifically conservative governments. Such governments include social democrat and one or two Communist governments who have begun to re-explore the definition of the line between the interests of the state and the interests of the economy.
What must be and will be surprising to historians is that this Government were relatively slow in suggesting that a programme of privatisation could be embarked upon. It was not until 1984 that such a programme really began. Can the fact that it was only in 1984 that my noble friend Lord Young of Graffham joined the Government be significant? Perhaps it is not entirely that.
In conclusion, I wish to ask my noble friend several questions. First, the noble Lord, Lord Ezra, made, as all of your Lordships will probably agree, a very good point concerning the difficulty of dealing with a private monopoly. We all understand the background to the nationalisation of British Gas. However, now that that has been done the lesson of British Gas should be learnt and in future, even if it be conceded that there should be a monopoly, consideration should be given to the splitting-up of the company, perhaps into regional units. We are all aware that there is a great deal of latent competition in relations between the unions which is now too often diverted and wasted in sporting rivalry.

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Secondly, how long does my noble friend think that the so-called "golden share" which the Government continue to hold in nationalised industries will last? How long will the 15 per cent. maximum on an individual shareholding in a number of companies last? How long does he anticipate that the ban on foreign ownership, which has been mentioned and which is included in the Bill privatising some companies, will last? Does that provision not clash with the expectations which we all have for a revived European economy after 1992, when my noble friend Lord Cockfield has completed his work in creating a tariff-free and non-tariff-free union in Europe?
Thirdly, should not one of the privatised companies which we shall be seeing in the future consider the suggestion which was imaginatively made some years ago by Mr. Sam Brittan, whereby each adult member of the community should be able, upon application, to receive a share? There is a certain irony in the idea of a government putting up for sale the shares of a company which they had previously supposed belonged to them.
Although I have other interesting questions which I should like to put to my noble friend, I see that I have now spoken for eight minutes and I must sit down.
3.25 p.m.
Lord Mason of Barnsley: My Lords, I intervene in this debate to express my anxieties over privatisation and the pending privatisation measures for the electricity and coal industries. However, I must first say that I am very concerned at the dominant privatisation theme in the legislative programme of the Government. It has become a fetish and a mania; it is not all for the good of our people and the nation.
As your Lordships will surely know, it panders to one of the worst instincts of mankind—that of greed. It creates an atmosphere that is generating a get-rich-quick society. In the South and in the City we have a generation of quick-quid kids. In the provinces, privatisation is egging on those with a few pounds in the bank to invest, buy now and be rich tomorrow. Thousands of our people may be taken for a ride, urged on by every privatisation measure. Who knows how many old people are kidded on to invest their hard-earned savings by mass advertising? They have been sucked into that maelstrom of get-rich-quick activity and have recently seen their life savings threatened with the slump in share prices. It is not over yet.
I believe that those human matters are part of the financial and economic aspects of the Government's privatisation programme and should not be forgotten. I ask myself, "What of our young people? How are they being affected?". A survey recently carried out by McCann Erickson revealed that British teenagers:
"have short-term goals and many are practical and materialistic".
It went on to say:
"The overriding discovery was the feeling that money was the doorway to modern life".
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A similar survey was carried out in Europe. It revealed:
"that teenagers valued friendship and love above money. They also placed greater value on the welfare state than did young Britons who see wealth as the route to happiness".
In other words, the motivating force in life for many of our young people is materialism. What a reflection upon our society! The mania for privatisation is much to blame. That is the moral aspect of privatisation.
Now we have the Government pressing ahead with the privatisation of electricity and the possibility of carving the CEGB up into rival generating companies. They are now preparing the sale and, I fear, rigging the market with a massive price increase ready for the get-rich-quick privateers. They are allowing the CEGB the freedom to import more electricity from France and probably from Iceland in due course. They are doing that irrespective of the long-term threat to the security of our supplies. But, even worse, there is the encouragement to import more coal, all under the guise of competition. What I really fear is that that may well be the forerunner of privatisation of the coal industry.
My industry is the coal industry. I went underground at 14 years of age. I worked there for 14 years in a seam which was 1 ft. 10 inches high. Even the mice were bow-legged where I worked! I have served as a mineworkers' sponsored Member of Parliament for nearly 35 years and, as the noble Lord. Lord Ezra, mentioned, as Minister of Power in 1968–69. I have lived in Barnsley—a coalmining town—all my life. I have never left those from whence I came.
I have witnessed at first hand the severity of the recent run-down of the coal industry. What is disturbing is the recent ruthless drive to cut costs, become competitive and break even in a given time-scale, irrespective of the social and heartrending consequences in the coalfield. That creates tension in the pits, bitterness between management and men and wholesale unemployment with no real planning by the Government to offset the huge job losses.
I fear that this Administration does not have enough feeling for the misery, the heartbreak, the uncertainty and the hopelessness to be found in mining communities. They have no feeling for the widespread dereliction following in the wake of a rapid rundown of a major traditional basic industry. British Coal Enterprise is a laudable trier but it is only pinpricking the problem. That is why, from Barnsley, echoing all the problems of the British coalfields, the Coalfields Communities Campaign began. That campaign includes 77 local authorities which have banded together, representing 14 million people and expressing to Parliament and to Government their concerns and the fears and worries of the people they democratically represent.
In the Barnsley area, unemployment is 17.4 per cent. Male unemployment is 21.7 per cent. Those are distressing figures. Even now two more pits, Redbrook and Woolley, are threatened with closure and with the likelihood of another 1,300 job losses. There are no falling unemployment figures in Barnsley.

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There is no plan to combat or neutralise that frightening and demoralising trend. There are now 46 unemployed persons in the Barnsley area chasing every one vacancy. There is a constant uncertainty in the minds of miners and their families. They see no hope, no future, no planning for stability in their industries and in their communities. They cannot budget for the future. Morale is at a low ebb; and trade too is depressed.
Now we have hovering over us the threat of privatisation of the coal industry. To break it up, to sell it off to private speculators, is going back to the pre-vesting days of cut-throat competition with district against district, pit against pit and man against man. And that they all fear. What an atmosphere in which to live! For the satisfaction of privateers, our coal miners, our pit people and their families, will have to suffer yet again. I give notice that I shall fend off this threat; and I sincerely hope that I shall have some support from your Lordships' House having given due warning of the danger that I see before us.
3.32 p.m.
Lord Marsh: My Lords, it is a very real honour and a very considerable pleasure to have the opportunity of following the noble Lord, and to congratulate him upon his speech which was as robust as we would all have expected it to be. I think it is possible that not every word and every view which he expressed was shared totally by everyone in the Chamber. I believe I can take the liberty of saying on behalf of all noble Lords present that should be at any time decide to campaign for the presidency of the National Union of Mineworkers he will receive enthusiastic, unqualified all-party support. We look forward to hearing from the noble Lord in times to come.
Like many other noble Lords present, I have been at one time or another involved with most of the major nationalised industries. Like many others, I became convinced by bitter personal experience that the nationalisation programmes of the 1940s, 1950s—and I was still convinced as a late developer in the mid-1960s—did not in fact work to the national advantage, to the workers' advantage and certainly not to the consumers' advantage.
As the noble Lord, Lord Thomas of Swynnerton, said, there has been a growing recognition of this throughout the world. Even governments in Eastern Europe and the Chinese Communist Party are considering and discussing the possibilities of private as against the state ownership of industrial and commercial activities. Today total Pavlovian opposition to privatisation in principle is confined to the Opposition Front Bench together with some of the older members of the Albanian Communist Party.
We need to adapt the views of the past to be more in keeping with the situation and the conditions of today. There is no doubt that the introduction of a more competitive environment is one—and only one—of the important benefits of privatisation.
In a world-wide society which is very much concerned with the interests of the consumer, it is a
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dangerous mistake to believe that there are not areas where some forms of competition can be positively harmful to the interests of the consumer. Competition of itself can become as much of an ideology as nationalisation. There are areas where it can positively damage the interests of the consumer.
Twenty years ago—a common opening to many comments made in this Chamber—the government of which I was a member considered a proposal for a direct rail link from Victoria to Heathrow at a cost of £11 million. The problem was that at that time all the main airlines ran their own bus services. The rail link could not be viable as long as the company bus services ran in competition with it. There was an argument within the government between those of us who wanted the rail link because we said it was cheap and efficient and others who said that to interfere with the right of the private airlines to run buses on that route was against the interests of the consumer.
We took a decision and the project was abandoned. The opportunity for a cheap and efficient link with the country's biggest airport was lost and never again will we be able to afford something on that scale. The irony and the paradox was that once that policy had been accepted, in due course the bus services vanished as well and the consumer was left with the option of a £20 taxi fare and a rotten journey.
I give that as an example of a situation where one has to be careful about becoming too obsessed and too uncritical about competition for its own sake. I fear greatly that we could make a similar mistake with the privatisation of electricity.
I have no doubt that a better service can be provided if we inject a considerable degree of privatisation into the present electricity industry in this country. There are many areas where it cannot or will not provide a service comparable to that which can be obtained from high street shops or local craftsmen. There are many areas, some large and some smaller, where one can criticise the levels of efficiency which exist in that industry.
In the particular case which has already been raised of the CEGB, there are very real doubts. Those doubts arise not because of some campaign of the CEGB. I certainly have not spoken to anybody from that organisation. There is effective scope for competition within the CEGB; but when one reads in documents published by organisations like the Centre for Policy Studies (for whom I have a great respect) that the board should be fragmented into as many as 10 or even more different undertakings, I must confess that I am horrified by the suggestion.
Throughout the world the trend is towards more integrated systems precisely because of the complexity of the electricity industry. In this country the problems are even greater than they are in many others. In the United Kingdom we are faced within the next decade with the need to de-commission the eight old Magnox stations. We have the problem of coming to terms with the AGRs; we have the problem of developing a nuclear strategy. I am in favour of a nuclear strategy which follows the Chernobyl disaster.

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These problems are massive and it really would be madness to seek to pass those issues over to a multitude of newly-formed companies. The financial needs are colossal to be able to cope adequately with these problems. The costs of insurance and the capital requirements are so massive that these are areas where only a centralised authority can cope.
There are plenty of areas within the CEGB where private enterprise can be introduced. As I said in my opening remarks, there are times when competition can be pursued to the point of absurdity. Given the implications of the financial cost, operating efficiency and the nuclear programme, I have no doubt that such a policy would result in one of those occasions where we would have in fact pursued the right policy to the level of absurdity within one area.
3.38 p.m.
Lord Grimond: My Lords, my noble friend Lord Ezra, who with his usual acumen very wisely chose this subject, must be delighted that already his own speech and the three which have followed have justified this debate even if nothing further were said at all. I add my congratulations to those which have already been expressed to the noble Lord, Lord Mason, on his splendidly uncontroversial speech. Long may we have that type of "uncontroversy", which, if I may say so, is something of which your Lordships' House is particularly in need.
So far as I am concerned, there are only three reasons for introducing privatisation: less Government control—which has to some extent been achieved; a more direct involvement of the workers in their industries—which has been very little achieved; and competition for the benefit of the consumer. Here I follow what was said by the noble Lord, Lord Marsh, that the essential person is the consumer and that is very often forgotten. To my mind, competition is his best defence but, alas, so far it would seem that the interests of the public sector borrowing requirement and, indeed, large profits for institutions and, in some cases, for boards, have been more important.
If competition is to be effective, it must be effective in the areas in which the ordinary consumer is interested. It is no good saying that there is much competition on the air routes between London and Japan. The people in the north of Scotland want competition in the north of Scotland. That is where competition may count and where it may be difficult to introduce. With regard to that, I am totally unconvinced by the view that bigger airlines are going to provide a better service to the consumer or user. Certainly, that has not happened in America and I do not believe it will happen here.
There are many areas in which we cannot have competition and many areas where we ought not to have it. There are certain services which should not be run for profit and certain services which should be run on behalf of the people as a whole and where competition may be quite inappropriate. If there are cases where we cannot have competition then in my view, which is an old-fashioned one, the best security for the the consumer is parliamentary control. I have no faith in regulatory bodies or consumer
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associations. They often become tame running dogs of the industries which they are supposed to control. However, a Minister has to defend what he is doing and, on occasion, he may be thrown out of the Cabinet or defeated at the polls, which is effective and very often the best control outside competition.
I also accept the view that the troubles are not wholly due to lack of competition. For example, I understand that the steel industry in this country has become extremely efficient, though it is still nationalised. Ownership and competition are, of course, two different matters. I believe that the noble Lord, Lord Bruce-Gardyne, who follows me, has suggested that part of the troubles of the private monopolies which we have created is not so much lack of competition as the attitude of those who run them. I agree with that.
I believe that, where competition can be exercised and is properly exercised, it is extremely important and has been much neglected, but there are areas, apart from the issue of whether it should or should not be exercised, where it cannot be exercised—for example, the railway and other networks, pipelines and so forth. Here I follow the suggestion of my noble friend—which I am not sure he made this afternoon but has certainly made before—that we might look at the proposition of retaining the network under public control and licensing out its use to various users who may be changed from time to time according to whether or not they give a good service. That would seem to be a very useful line of approach and one which has not been much explored.
The noble Lord, Lord Thomas of Swynnerton, also pointed out that there is something to be said, if we privatise companies, for breaking up regional or national groups. I agree that there are certain operations which should not be broken up, but there is a good case for allowing Scotland, for example, to run some of its main services. It seems to be big enough, can attract the capital and might develop a very useful comparison with colleagues south of the Border. Comparative competition is certainly worth something. I urge the Government in their future privatisations to look at that question, first retaining any networks, as they are to some extent doing, in public control. Secondly, the Government must consider treating Scotland, Wales and possibly the regions of England as separate entities.
Another point which has already been raised and which I wish to support is the suggestion that, if we want to achieve one of the main purposes of privatisation—to widen real control—we should consider not only temporary shareholding or small shareholding but far greater control in the public. We should look at giving out the shares more widely to the population. It was suggested that when oil was discovered in the North Sea, a share should be given to every family in this country. In principle that seems an eminently sensible suggestion and I do not know why it was rejected. However, I ask the Government to look at that.
As I have said already, it is quite apparent that these matters have received totally inadequate consideration. There are all sorts of both main and side issues which have been neglected in favour of

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looking at the short-term interests of the public sector borrowing requirement and the needs of the Treasury. This is a matter of far greater importance. I fully support my noble friend in asking the Government to look again at these matters and to look at them in the long term.
3.45 p.m.
Lord Bruce-Gardyne: My Lords, I should like to join with other noble Lords in warmly congratulating the noble Lord, Lord Mason. All of us who served with the noble Lord in another place were not surprised to hear such a splendid contribution to our debate this afternoon. It leads us to look forward with even keener anticipation to future occasions when he will be released to indulge in full controversy.
I should like to pick up the point the noble Lord made when he talked about the prospects of those who have been beguiled by the advertisements into buying shares in privatisation issues and who now face the loss of their life savings. The fact is that the shares, if the holders have hung on to them, are continuing to show—with the one exception of Britoil—an extremely handsome profit, notwithstanding the recent fall in the stock market. Therefore, I do not believe that they have too much to complain of, as yet at any rate.
I am sure that all noble Lords agree on congratulating the noble Lord, Lord Ezra, for introducing this topical subject. I was fascinated by his opening remarks about the desirability of the original Morrisonian concept. Listening to his highly experienced and historical perspective of how it all worked out, I could not help feeling that he made the Morrisonian concept sound a bit like Red Biddy—nothing wrong with the product, just the uses to which it had been put. I cannot help feeling that perhaps one followed from the other.
However, the noble Lord identified four arguments for privatisation and was generally felt to have scored four out of four. He also suggested that perhaps with time the competition concept had slipped back in the order of priorities. I am bound to say that I have some slight sympathy with what he said in that respect. I want to quote very briefly to your Lordships some remarks of my right honourable friend, the Minister for privatisation. He said that,
"activities such as electricity generation, the production and marketing of gas, coal production and sale, telecommunications … bus transport, sewerage treatment and disposal are in no sense natural monopolies".
I feel that I have been cheating, because that was my right honourable friend the Minister for privatisation in the autumn of 1983. Since then, we have seen some industries go into the private sector—here I am thinking particularly of telecommunications and the production and marketing of gas—under rules which perhaps have not gone very far to emphasise the absence of a national monopoly.
The noble Lord, Lord Ezra, and certainly other noble Lords have suggested that we have witnessed a tendency in some instances, notably gas and British Telecom, although not all—for example, the privatisation of the bus industry where genuine
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competition was introduced and achieved—not to break up monopolies because by maintaining them it maximises the revenue to the Treasury and enhances the prospects of a generalised sale to small shareholders.
That may have been a factor, but I cannot help thinking that there was not at least one other which was perhaps even more important, referred to by the noble Lord, Lord Grimond; namely, the influence of those who manage and operate these industries. It is clear that the main reason why British Telecom was put into the private sector, with only a somewhat marginal competitor to keep it on its toes, was the fond and, I think, deluded belief that it would achieve the co-operation or acquiescence of the British Telecom unions. That was similarly the case for British Gas. The real reason, I am sure, British Gas was privatised as a monoply was, frankly, that Whitehall was scared by the formidable presence of Sir Denis Rooke. I am afraid that Sir Denis himself had far too much to do with drafting the Bill which carried him into the private sector. I hope that we do not have a repetition of that situation with the electricity industry.
The noble Lord, Lord Marsh, expressed considerable reservations about the desirability, in all circumstances, of the enhancement of competition for consumer choice. I believe that the onus of proof is on those who believe that the consumer will be more satisfied by the perpetuation of a monopoly. The example the noble Lord cited of competition on the route to Heathrow was, I thought, surprising. He said that we are now condemned to travelling by taxi. That might be his lifestyle, but I must say that it is not invariably mine. I sometimes travel by Tube. It costs only £1.50, although it is not a very good service. I am sure that more competition—for example, the freeing of the taxi system—would not be unhelpful in that context.
In the case of electricity—to which inevitably, noble Lords have referred extensively—the key, surely, is going to be the relationship between the future electricity generating system and British Coal. As Mr. John Baker of the CEGB, pointed out in an article in the Financial Times this morning—referred to by the noble Lord, Lord Ezra—coal accounts for 50 per cent. of its costs. Of course, it must be true that unless the CEGB, or its successor bodies, is released from its incestuous relationship with the coal industry there will not be much prospect of genuine operation of consumer choice in that area.
I accept what the noble Lord, Lord Marsh, said about the complexity of achieving liberalisation and consumer choice in this area, but I honestly submit to my noble friend that the essence of the privatisation scheme is, and ought to be (as my right honourable friend who was then the Minister responsible for privatisation pointed out five years ago) the achievement of wider consumer choice. That does predicate the establishment of genuine competition. We do not want further legislation put before us, such as that for gas, which has been too much moulded and organised by those who run the industry.
3.45 p.m.
Lord Kirkhill: My Lords, in rising to thank the noble Lord, Lord Ezra, for introducing this debate I

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confine my remarks to matters pertaining to the electricity supply industry, with which I have been associated and about which I believe I know something of its scope and importance.
I start from the conviction—indeed, the proposition, given what has occurred in those industries privatised to date—that the possible privatisation of the electricity supply industry does not necessarily mean that we shall end up with a better or a more efficient industry. A recent study by the International Energy Agency concludes that there is no evidence to support the claim that private ownership always equals efficiency. Therefore, it follows that if the Government are determined to privatise electricity they cannot afford to get it wrong. That is self-evident. As the noble Lord, Lord Ezra, said, electricity affects every man, woman and child in the country. It is therefore clearly essential to put the customer first and to provide reliable and reasonably priced supplies of electricity which are competitive with other forms of energy.
In that regard I am pleased to note that the Secretary of State for Energy intends, so he says, to give high priority to customer service in framing his privatisation legislation. That is one area of the legislation which will be very closely examined as and when it comes before your Lordships' House. For example, there is much to commend a system of rebates to customers who suffer poor service. I consider that that is one aspect to which the Government should give serious consideration. Indeed, I understand that such a system already exists as a private scheme in the East Midlands area.
In my view, therefore, the electricity supply industry, if ultimately privatised, should be motivated by customer needs rather than methods of generation and the pursuit of technical excellence. I know that that view is not shared by everyone but, on balance, it is a view I wish to sustain. I recognise, as does everyone else, that the electricity distribution system is a natural monopoly, but the privatised retailing company or companies which result from the Government's reorganisation of the industry must be strong enough to strike hard bargains with competing generating companies and to deal effectively with rivals such as British Gas. In my view it is abundantly plain that generation is the only area where competition can be introduced into the industry.
Splitting up the CEGB is fraught with problems and that part of the present CEGB set-up which is at present giving the Government most concern is the national electricity grid. That ought to be a separately-owned organisation designed to encourage competition between rival generating companies and to ensure that the end users of electricity receive the cheapest possible supplies. In saying that, I part company with certain other noble Lords.
Of course, if privatisation is to go ahead the Government must draw up plans for a regulatory system for electricity, as they did for gas. I realise that the gas regulatory system has its critics, but if one studies the American experience one must reach the conclusion that the simpler the regulatory system, the
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fewer disadvantages are built into the system. I therefore believe that the regulatory system must be simple and that it must ensure that electricity and gas can compete on an equal footing.
In an industry which impinges on most aspects of our national life, planning for the future is a necessity. Interruptions for reorganisation of the industry for privatisation and subsequent acclimatisation to the new structure must not constrain the new plant construction programme of the industry as it seeks to ensure a continuous and reliable supply of electricity in the years which lie ahead.
Those are the general remarks that I wanted to make. However, in these closing moments I want to be rather more specific. For approximately four years I was chairman of the North of Scotland Hydro Electric Board. I fully realise that the hydro board remit is under the purlieu of the Secretary of State for Scotland. However, he, as it were, is caught in the slipstream of privatisation anyway, so I put to the Minister and his colleagues one or two thoughts to which I think they must give very serious consideration.
The hydro board was set up by the legendary Tom Johnston. Included in its charter was a social clause, the implication of which was to help to revitalise and regenerate the Highland areas of Scotland. The hydro board was sustained in this by his initial enthusiasm and by the continued support of my noble friend Lord Ross of Marnock and his successors.
The hydro board area covers approximately a quarter of Britain's land mass but, in terms of electricity supply, is responsible for about 2 per cent. of Britain's population. The hydro board today can claim that more than 99 per cent. of the people within its area of responsibility are supplied by electricity. In other words, the supply reaches the remote glens; the supply, in subterranean fashion, goes under the sea to some of the islands; the supply of diesel generation in some of these other islands is sustained. All of that is totally uneconomic. There can be no question of that. How therefore does it continue and how is the continued link-up sustained? It is sustained because in terms of unit cost, the general body of consumers in the hydro board area subsidise it. The area open for competition in such a situation seems to me at best to be doubtful, and I seriously suggest that the Government should give very careful consideration to that particular difficulty in the hydro board area.
4.3 p.m.
Lord Winstanley: My Lords, as my noble friend Lord Ezra made absolutely clear in his admirable opening speech, this is a matter of the utmost importance. However, I hope that my noble friend will not misunderstand me if I say that I think that sometimes we attach too much importance to the basic question underlying this issue: that is, the question of nationalisation or privatisation.
Politics seems to have been monopolised and preoccupied with the question of whether certain essential services should be within public or private hands. Not only from my work in your Lordships' House but in another place too, and indeed from being

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responsible for the running of a very major citizens' advice enterprise, I believe that what really matters to the customers who depend on these organisations for goods and services, or to the employees who depend on organisations for their livelihoods, is not who owns the shop but what sort of a deal it actually gives them in terms of accountability, sensitivity to their needs, and so on.
Unhappily, it seems that we have reached a situation where organisations upon which we depend for goods or services of one kind or another have become bigger and bigger. I like to see smaller enterprises; I think they can be made much more accountable, and they can be much more easily scrutinised. Nevertheless I accept that certainly so far as concerns the science-based industries, there really is no substitute for size. There have to be some very big organisations. However, I believe that in politics in this country we have never yet devised a satisfactory system of administering large-scale enterprises so as to make them competitive, sensitive to the needs of those who depend on them for goods and services, responsive to the needs of their employees and perhaps also responsive to the broader general needs of society.
The profit motive is not enough. I have nothing against profits, particularly if I am fortunate enough to have a share in them. However, I believe that what can be profitable in the short-term can sometimes be very damaging indeed in the long-term. Let me give a hypothetical example. If we move to the situation where water conservation and water supplies are privatised, and when most water supplies are metered so that people are paying in accordance with the amount of water used, there will then be a clear incentive to those who are selling water to encourage customers to consume more and more. That cannot be to the national good, although it could be to the good of the profit of the organisation. I do not believe that we are wise to see economic salvation at this time by persuading people to consume more and more of things of which we have less and less, and that most certainly applies to the field of energy. So I do not believe that the profit motive can be the only motive upon which the success of these organisations can be judged. In my honest view the one criterion—if not the only one—on which success really should be judged is that of customer satisfaction.
How do we judge that? I personally regret the disappearance of parliamentary scrutiny in many of these areas. I was much struck on another occasion some time ago by a speech of the noble Lord, Lord Beloff, in which he appeared to suggest that when we have exchanged what has been a public monopoly for an essential service and transferred it into a private monopoly, somehow we should devise a means of retaining some kind of parliamentary scrutiny. That is the kind of matter to which my noble friend Lord Grimond referred to a few moments ago. So I should like to see that; but how we are going to do it I do not know.
I am not suggesting for a moment the kind of absurd suggestion which the noble Lord, Lord Marsh, appeared to impute to some of us: that the day-to-day management of British Rail should be
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conducted by your Lordships' House. I am not saying that at all. I am saying that the retention of parliamentary scrutiny in a monopoly, whether it be in public or private ownership, is very important indeed. Of course I acknowledge that the satisfaction and morale of employees is very important.
The noble Lord who has made an admirable maiden speech will remember that we saw much of each other in another place. He will also remember that as Minister of Defence he visited one of Her Majesty's Royal Ordnance factories, of which I happened to be the medical officer at the time. He will know that that Royal Ordnance factory is not privatised. I have no idea whether it is more profitable or whether its output is better; but I do know that the morale among its employees is nothing like as high as when it was in national hands. Therefore the whole question of employee morale is also an important aspect. However, I believe that somehow customer satisfaction has to be the most important criterion.
I should like to make one practical suggestion, which I hope the noble Lord will consider. In due course I should like to see the appointment of an ombudsman charged with the supervision of non-governmental essential public services. I know that we have Oftel; I know that we have the Gas Consumer Council and the other bodies. However, I believe that an ombudsman with the powers to examine complaints in industry and to examine papers and discover why those complaints have not been dealt with, would be helpful. It would be helpful not only in monitoring consumer satisfaction (which I believe is the most important criterion) but it would also be a means of raising the standard of consumer satisfaction. So I hope that when he comes to reply the noble Lord the Secretary of State will consider that suggestion.
4.10 p.m.
The Earl of Lauderdale: My Lords, I sat for a mining constituency, and I should like to join in the plaudits to the noble Lord, Lord Mason, on his maiden speech. When he spoke about working a longwall 18 inches thick, I remembered how, when going down the pits in my constituency, I felt like the ham in a sandwich which was being squeezed. The resonance of a mining voice is welcome. Another aspect of the noble Lord, Lord Mason, is his patriotism. We all saluted his work as Secretary of State for Defence. We know him not only as a miner but as a patriot. He is very welcome here.
I should like to join with others and thank the noble Lord, Lord Ezra, for introducing this debate. I shall return to his conclusion, with which I greatly sympathise. I will focus on the electricity industry, but first I must throw a couple of bouquets to the Government, of course in the nicest possible way. I welcome my noble friend Lord Young who is to answer the debate. I remind him, because it may not yet have been brought to his attention, that this House has no Minister, let alone one of Cabinet rank, in the Department of Energy. That department's treatment of this House has at times been condescending, if not off-hand.

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Before the Secretary of State announced the last increase in electricity prices he wrote to all Conservative Members of Parliament, but he never bothered about us. I put down a dozen Questions to the Department of Energy for Written Answer after our debate in July. Noble Lords will probably agree with me that the replies were at best opaque. However, there is more joy in Heaven over one sinner who repents. So I hand another bouquet to the Secretary of State. He has now admitted to what we said in the House three and a half years ago: lights will be going out if by the end of the century we do not have an additional 13 gw of generating capacity. The Government have now recognised that need. How they will go about achieving it is another matter.
The Government have also admitted, although not quite so frankly, that the eight years during which no new generating stations were commissioned was a period of Conservative Government. I speak as a Conservative, and it is a matter which worries me all the time. However, I say, "Well done. Better late than never".
Will Her Majesty's Government still be in time on this matter? There is a 10-year lead time for building power stations. We have been promised six PWRs and four coal-fired power stations by the end of the century. But how can they be in place by then? We have been assured that privatisation will not interfere. But how will private enterprise, which is only to be in place the day after tomorrow, as it were, raise funding now for imaginary projects promoted by enterprises which will not be born for at least another year? What about the planning delays? I do not know the answers. But I hope there are some. I hope they are better than the ones we have hitherto received from the department.
Next, are the Government quite sure that four new coal-fired power stations can be in place by the end of the century? And if they are will they be free to buy their coal from wherever they wish? How many will be beside the seaside? What is the future for colliery-tied stations? Will, as the noble Lord, Lord Mason, indirectly suggested, privatisation affect British Coal?
The electricity supply industry, as is patent to anyone who reads the newspapers, is in a perfect tizzy at present. The Electricity Council, the CEGB and the area boards are all at one another. It is in that context that the Secretary of State summarised his national energy policy in The House magazine on 6th November:
"Economies grow best where markets operate … We want customers to be able to choose the energy they want".
What a policy statement! It is rather as if our national defence policy was couched in terms such as: "We want each part of Britain freely to choose how to defend itself". One can picture Trident for Kent and Chatham; Star Wars for Yorkshire and Fylingdales and Nuclear-free zones for Glasgow and Liverpool. The Secretary of State's words do not take us far, even as the germ of a philosophy. How does his philosophy, as it is set out, assure the provision of adequate power supplies? Competition does not assure it. When will the customer-first principle mean that Norwegian gas imports are acceptable from the Troll field? They have already been banned from Sleipner.
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Does his customer-first principle mean that there will be freedom to export gas? The Written Answer I had on that was not opaque; it was obscure. Is the spreading of share ownership the chief aim of privatisation? If so, I am in favour of it on that count alone. Or is it (this is much more important) designed to obtain the cheapest power for industry? If that is the case, will the Government stop kow-towing to the environmental lobby à la Layfield?
To get their Bill through this place, the Government will need a Minister here from the Department of Energy. They will need to produce answers much better than those we have had of late. So I take up a point made by the noble Lord, Lord Ezra, that in view of all the muddle and confusion that exists in the electricity supply industry, we should have a consultative document soon. I would put it a little differently. Could we please have a little glasnost—just a little like the Russians have?
4.17 p.m.
Lord Dean of Beswick: My Lords, I must first do something that I have not done before in your Lordships' House. I wish to apologise for the fact that unfortunately this is one occasion when I cannot stay for the reply. There is an important meeting that requires my presence.
I thank the noble Lord, Lord Ezra, for introducing this debate, which has concentrated mainly on the two subjects that will occupy a great deal of your Lordships' time in the not too distant future. I fully agree with the request made by the noble Lord, Lord Ezra, and the noble Earl, Lord Lauderdale. We should have a consultative document on the privatisation proposals so that we can look at them in depth to see what is best for the future of the industries that we are discussing. It is possible that we may arrive at an acceptable consensus by doing that.
I join other noble Lords in complimenting my noble friend and colleague from another place on his forceful maiden speech. I am of course talking about my noble friend Lord Mason of Barnsley. It was a speech of the high standard that we have come to expect from him. It was delivered with some fervour. One has to live in a mining community (I do not) to understand people's fears and what pit closures mean in terms of the run down of industry, the loss of jobs, and the destruction of the area's social fabric. My noble friend did a tremendous service for that area and for the industry in which he has spent most of his life by bringing those matters forcefully to your Lordships' attention. We look forward to hearing from him many times in the future.
I do not wish to say much about the proposals for electricity. I do not always agree with the noble Lord, Lord Marsh, but I think that he made the case far more eloquently and thoroughly than I could. He outlined the possible dangers to the industry of the Government's proposals. I can almost see the destruction of our power station development programme with all that means—a lack of overseas orders, and so forth. I agree with the noble Lord, Lord Marsh, on that point.
None of your Lordships have said much about water. It would not do us any harm to take a minute

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or two to look at that industry. Some of your Lordships will know that before the Recess I questioned the noble Lord, Lord Belstead, about the handing back of the water industry to the private sector. I challenged the fact. It was not a correct statement. They never belonged to the private sector anyway. That theme ran through the general election in some of the Government's press briefings. It is totally erroneous to say that the water boards, as they are at present formed, were taken from private people. They were not. They were owned in the main by the local authorities. I happened to be the leader of the Manchester City Council at the time when our water holdings were taken from us—I have to say without one penny in compensation. I stand to be corrected on the figure because it is a long time ago, but the holdings then were valued at over £280 million. The same thing happened to Liverpool, Birmingham and cities in Yorkshire; they were all taken over. A special Bill was passed, and they did not receive any compensation.
I tried to obtain from the Minister, by way of Written Answer, a figure of the notional value today of the water holdings that were taken over in the 1972 Act. He said that the information is not forthcoming. However, I have it on good authority that the figure is approximately £30 billion. Much of that would not have existed except for the initiative of local authorities in the past.
We shall have more time to discuss this issue when the Bill begins to emerge. Perhaps the Government will consider whether local authorities, if they wish, could put in bids to buy back at some form of reasonable discount, the facilities and holdings that were taken off them without compensation. If a totalitarian government were to behave in this way we should expect it of them; but we are supposed to be a democratic society. I can tell noble Lords that that action under the then Minister, Mr. Peter Walker, left a nasty taste in the mouths of many people in local government.
I should like to raise some points regarding a very recent announcement on privatisation, and on how not to do it. I refer to the Statement yesterday on BREL. Noble Lords who were present yesterday when the Statement was made will know that I quoted the Minister in a debate in another place last week who said that BREL had a future under British Rail. The quote is in yesterday's Hansard of your Lordships' House. Within a week he is making an announcement that they are going to flog it off. The workforce of BREL have not been at the top of the league in wages. They have never been a high-wage sector. They perform well. In the same reply in the debate in another place the Minister said that they had been 70 per cent. successful in their tendering.
I suggest to noble Lords that any organisation that is 70 per cent. successful in all its tenders has not done badly and would certainly survive, if my information is correct. But, no, my Lords! The Government have taken a totally unnecessary political approach to that system. We may well end up by losing a very important part of our manufacturing base in this country. Since 1982 our balance of payments in manufacturing goods has a deficit of over £7 billion
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and is getting worse, not better. This type of activity, in my opinion, subscribes to that situation.
I am almost at the end of my time limit. I put this plea to the noble Lord who is a caring Minister. How would he feel if he were in the workforce in the BREL workshops? They have persistently raised this question as to whether they were going to be sold off or fobbed off. I recall that the noble Lord, Lord Marsh, was himself a former chairman of British Rail. I believe that he would not have dealt with the workforce in such a cavalier and uncaring way. These 7,000 men—all that is left of a workforce of over 30,000—have done everything that is asked of them. They have behaved in a most reasonable way. They are now literally being flogged off in the industrial workplace to the highest bidder. That is the worst kind of privatisation, and one that we do not wish to see. Once again perhaps I may thank the noble Lord, Lord Ezra, for giving me the opportunity to put forward this issue.
4.26 p.m.
Lord Basnett: My Lords, the Motion of the noble Lord, Lord Ezra, is most timely because after almost a decade we can begin to see the effects of denationalisation. It is timely because the debate has begun with reference to the privatisation of electricity and water. The privatisation programme has been costly: a direct cost of £700 million; an estimated indirect cost of almost £3,000 million; and a loss of direct revenue. For these costs and losses we were given the prospect of cheaper products, better services and wider share ownership.
However, it has to be said that that has not been significantly realised in those industries providing a widespread and widely-needed public service—a point made by the noble Lord, Lord Ezra. British Telecom has been the subject of widespread complaints—a 116 per cent. rise, for instance, in complaints about bills. British Gas has weakened its consumer councils, and there are rumbles from industry about its pricing policy. In all the privatised industries only 4½ per cent. of the shares are owned by the employees, whereas in the gas industry 18 per cent. are owned by the Japanese. Some would argue—and we have heard those arguments today—that this is due to the failure to introduce effective competition. Others would argue—and I count myself among them—that the introduction of competition in naturally integrated monopolies where the public interest requires public regulation will not lead to lower prices or to better services.
Nowhere is that more true than electricity and water, where the Government struggle to reconcile what is irreconcilable. In electricity the national grid is the key to an integrated power system, an integrated system that is the best guarantee that the lights will stay on. Such a system ensures the lowest cost available power supplies are used at any one time. It ensures that substantial system savings come from the ability to plan well in advance. It ensures with its size and control a lower margin of power station capacity over demand.
It is not surprising that the Monopolies and Mergers Commission— which investigated the grid

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earlier in 1987—accepted without question the logic of the integrated system. The question must be raised: on this issue are the Government prepared to repudiate the professional advice of the CEGB, of the engineers in the national grid; and, by taking the national grid out of CEGB control, hazarding the reliability of supply of electricity to the British people? It would do more than that, however. With the loss of efficiency there would be a rise in prices. Prices are already set to rise and we know the reason for that. But there would be more to come. If we set up the grid as a separate generation, it is estimated that such a step could add several hundred million pounds annually in costs.
Yet another question needs to be asked. Have the Government entirely abandoned the principles they laid down in their own legislation in the Energy Act 1983, that private generation should not increase the cost of electricity to the consumer? But one fundamental question remains. Our energy supplies rely almost totally on fossil fuels, the supply of which is finite. With no foreseeable possibility of a significant increase in renewable energy sources, our concern for the future must lead us to conserve and balance the use of those supplies. Can competition do that?
A number of other questions arise. Are the Government seriously content to allow private generating companies following privatisation to buy as much coal as they like from international markets, irrespective of the consequences for the British coal industry? Why do the Government seem prepared to require private generators to construct and operate a minumum proportion of nuclear power stations while the Government are not prepared to require them to buy even a minimum proportion of British coal? Can the Government seriously believe that companies smaller than the size of the CEGB, given the high capital cost and long lead time, could provide us with the future nuclear component we need in our energy policy?
Competition will not supply us with an effective energy policy. I hope your Lordships will support the suggestion of the noble Lord, Lord Grimond, that the Government should think again and introduce a wider debate on this subject.
4.33 p.m.
Lord Harris of High Cross: My Lords, I join in congratulating the noble Lord, Lord Ezra, on what I regard as his boldness in bringing this Motion before us. After all, the fact that his formidable talents, devoted over a lifetime to the National Coal Board, did not produce a more fruitful outcome is, in my view, the most plain indictment of the failure of the Morrisonian model of nationalisation.
In readiness for the rather gloomy reflections of the noble Lord, Lord Basnett, I go back to my earliest Questions for Written Answer which I put down when I first came here as an innocent and happier recruit to your Lordships' House. In October 1980 I asked politely the amounts of taxpayers' money sunk into the nationalised industries since 1945. From the detailed Answer of the noble Lord, Lord Cockfield—those were the days—I can summarise the tally as
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follows. In the 20 years 1960 to 1980 more than £25,000 million was lavished in grants and in write-offs of capital and revenue deficits, in which the Coal Board was second only to British Steel. We must bear in mind the change in prices since 1978–79 and ponder that we are talking about something like £50,000 million at today's values.
It was the objective of the earlier pioneers of nationalisation to overthrow capitalist production for profit. How well they have succeeded. Was it their intention to enthrone losses as a way of life for a large part of British industry? We might blame the failure on the exploitation of monopoly power by the unequal forces of aggressive trade unionism and appeasing management. The symptoms, we recall, were over-manning, industrial unrest, weak incentives to efficiency, misdirection of capital and recurrent deficits. But in fairness I believe that we should dig deeper.
We find that the underlying sources of most mischief stems from the truism that public ownership unavoidably means political control. So-called public ownership in the so-called public interest was in my view always a fraudulent prospectus. It was never the public but the politicians who ruled the roost and still rule the roost in coal, steel, railways and electricity. I was not surprised that the recent arbitrary and in my view unjustified hoist in electricity prices was denounced by Labour spokesmen as being politically motivated. They should know. For years in power they and in their turn Conservative Ministers regularly played the party game in the same way. For years the investment programmes and pricing policies of the commanding heights of the British economy were the periodical playthings of Chancellors pursuing short-term electoral calculations rather than long-term economic objectives.
Elementary economic theory—as I hope the noble Lord, Lord Peston, will agree—offers strong arguments why public utilities should be vested in the control of government. But in the light of mature practical politics, I believe that there are still stronger arguments why the control of production should be put beyond the reach of politicians. Nationalisation was another example of putting the cat in charge of the cream jug but it turns out not to have been in the best interests even of the cat.
The worst error of nationalisation was therefore that it united economic monopoly in the same hands as political power. Friedman has long taught that where monopoly is inevitable the choice is between three evils: you can have private monopoly, public monopoly or regulation. We have tried public monopoly and found it sadly wanting. Now in British Telecom and most culpably in British Gas, the Government have fallen for a private national monopoly moderated by a severe regime of regulation. In Professor Carsberg they have found a remarkable regulator, who sees his job as simulating the pressures of a competitive market. If it will not damage the professor to say so, I know him and like him well and I have the highest regard for his qualities of both intellect and courage, which he will need. However, I do not think he would mind my saying that I have an even higher respect for the impersonal

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forces of a competitive market wherever it can be activated. The more competition we can mobilise, the more we can rely on general laws and the less on complex regulation which must test the power even of Professor Carsberg.
Thus I come from a different route to support the noble Lord, Lord Ezra, in his call for more competition in future acts of denationalisation. In electricity and water where competition in local distribution is ruled out, we must still endeavour to break up the monopoly of supply. I was disappointed that the noble Lord did not give a lead in calling for the denationalisation of coal, which was left to the noble Lord, Lord Bruce-Gardyne. The National Coal Board, after all, was always the most contrived and artificial of all monopolies, where competition could and still can bring the largest gains to consumers, employees, taxpayers and overburdened politicians.
That case was powerfully argued in a CPS paper by Professor Colin Robinson and Allen Sykes, a formidable academic and a long-experienced practical businessman. They have both now produced an even more remarkable paper which is entitled Current Choices. In this paper they discuss six options of which only two would offer the benefits of genuine competition in both generation and regional distribution. Their conclusion, with which I fully agree, is that all the monopoly expedients would be worse than leaving things exactly as they are, because if we left them exactly as they are at least it would leave open the competitive option for the future.
What I should like to say with some impudence from the Cross-Benches is that I, and I believe some others, expect rather more from the present Secretary of State than from his predecessor. But he has been served notice by many speakers that if he thinks of any repetition of monopoly-mongering on the model of British Gas he will not only bring his party's nationalisation programme into difficulty; he will bring it into final disrepute.
4.40 p.m.
Lord Peston: My Lords, I should like to join with others in congratulating the noble Lord, Lord Mason of Barnsley, on his maiden speech. Perhaps I may also echo the earlier remarks that I really look forward to the day when he makes a controversial contribution to your Lordships' House. Following my old friend Lord Harris, perhaps I may also say that I am sorry to hear that he has lost his innocence. I always thought it was his most endearing characteristic, and indeed what enabled him to be so effective in propagating his views. I must also tell him that I at least still believe in the correctness of elementary economic theory.
I should like to say a few words about, as it were, the history of all of this and disperse some of the mythology. Indeed, the noble Lord, Lord Dean, made one of the key relevant points. It simply is not the case either here or abroad that what happened was that efficient, viable private enterprises were taken into public ownership by doctrinaire socialists. We should not forget how many enterprises were
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taken into the public sector because of private sector failure. That is the true history. Sometimes that private sector failure placed our nation in peril, and that was why these enterprises were often thought of as more appropriately being in the public sector.
The noble Lord, Lord Dean, mentioned the importance of municipal enterprise. The reason we had so much municipal enterprise was that the relevant job was simply not done by the private sector, or not done properly. We should not forget the history of all of this when considering what is happening now. Nonetheless, I do not want to harp entirely on the past although I must say, following Lord Ezra's "four words" of what it was all about, that I have three points instead. What most strikes me is how well senior management in the privatised enterprises seem to have done for themselves. Perhaps I am wrong and I should assume that that was a purely chance effect, but I wonder.
They also pay considerable attention to their shareholders, and it seems to me that the great worry here is that consumers come last. I have to say—which is why I make the point of believing in elementary and old-fashioned economics—that I believe that the sole rationale for enterprise in any form whatever and the sole way in which to judge it is whether it produces at least cost goods and services that consumers want. That is the relevant criterion. Customers should not come last; they should always come first.
Although certain aspects of the privatisation programme can be discussed on their merits others just seem to me to be overwhelmingly doctrinaire. In particular I am most concerned about the sale of the remaining shares in British Petroleum—not about the debacle with the stock market crash. However, I wonder whether I am the only Member of your Lordships' House who really is worried about the fact that a significant part of British Petroleum is now in foreign hands, and allegedly in the hands of financial interests from Kuwait. There is a national interest aspect to this, even to those of us who would regard ourselves generally as internationalists in this country, and I should like to hear the Secretary of State's view on that.
Perhaps I may say a few words about the possible privatisation of electricity. It seems to me that there are only two solutions. Either we can find a way which is competitive both with respect to production and distribution, or the industry should stay in public hands. The idea of a private monopoly suitably regulated is worst of all.
I must tell noble Lords opposite that I have racked my brains to try to find a decentralised, competitive solution, partly for academic interest. I would genuinely like to be able to think it through because I think it is quite an interesting practical question. I have to confess that I cannot find a way of doing it without destroying all the advantages of optimising the grid system on which the efficient operation of electricity depends, as other noble Lords have said. Therefore, I look forward to hearing whether the Government have discovered, as opposed to the rest of us, some way through this problem.

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What I shall certainly say is two things. I do not believe that the electricity supply industry has failed the nation. It might be able to do better, but the notion that we are privatising it because it has demonstrably failed the nation is absurd. I think there is a real danger, however, that a doctrinaire, privatised and botched competitive alternative would fail the nation and, to use that curious expression, the lights would go out. That is a worrying matter.
I said I would not harp on the past but what happened with British Gas was disastrous, because one could have found ways to decentralise British Gas to some degree and it would have been an experiment worth pursuing. It is a great pity that we did not have that experiment in order to learn from it. I also have to say that the position of British Telecom seems to me to be pathetic at the present time. We ought to look more carefully at whether we can introduce some degree of competition into British Telecom in those kinds of services, albeit at this late date.
More generally on competition—and I certainly believe that where possible competition is the best form of protection for the consumer—the Secretary of State is in a difficult position. In particular he is in a difficult position because one of the bodies most of us hoped might be of help to him in competition policy, the Monopolies and Mergers Commission, seems to have simply lost interest in competition. As an economist, perhaps I may say that their report on British Caledonian and British Airways was simply absurd.
I pity the poor Secretary of State—as I gather he has no choice in the matter, given their recommendations—having to go ahead with a report which has no foundation in economic theory and precious little empirical evidence to support it. I throw that in en passant because my main concern is the future of competition policy and whether the Secretary of State ought to be thinking—and perhaps he will when the Liesner Committee reports—of alternative structures for promoting competition in this country.
There is not much more I want to say. I am somewhat sympathetic to Lord Ezra's view that we ought to think again and explore the matter further and have a consultative paper. I suppose that if the consultative paper were to consist of an argued, thought-through policy document by the Government, I should welcome it, but if it is simply to say a lot of anodyne remarks such as "We are going ahead", then I certainly shall not.
I conclude by saying that I believe in this area, even though there seemed to be some immediate gains on the government side from what they were doing, that we are storing up problems for the future. I for one certainly expect to sit in this House one day and hear Ministers from that side explaining to us why, in order to save them, they are having to take certain enterprises back into public ownership.
4.48 p.m.
Lord Diamond: My Lords, it was a great pleasure for me to listen to the excellent maiden speech from an old colleague, not least because he brings to this
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House a complete integrity of character coupled with, I should have thought, a unique combined experience in the highest political offices of the land and, as he has pointed out, in the lowest strata of the mines in which he was confined.
My noble friend Lord Ezra dealt, as far as he was able to in the time available, with the question of competition. There are other planks in the Government's programme and I want to deal first with that of the spread of share ownership. We have heard a lot about these 9 million additional shareholders, and I want, with your Lordships' patience, to share with you an examination of what this really amounts to.
There has certainly been a large addition to the number of shareholders. In terms of shareholdings, the proportion of shares held by individuals—which was the purpose expressed in the Government's programme of widespread share ownership—has made no impact whatever. I should like to justify that statement. Last year the number of shares held by individuals in all companies was 24 per cent. The number of shares held in privatised companies was similar and falling, because the longer the shares had been held and the longer the period since privatisation, the more shares were being sold. Individual shareholders in British Gas, for example, account for 28 per cent. of the shares issued; in British Telecom it is 23 per cent.; in British Airways, 14 per cent. That is the extent of the greatly proclaimed credit sought by the Government for having spread share ownership widely among individuals. It does not exist.
The reason is simple to see. First, the shares were spread extremely thinly when they were issued. Your Lordships will remember that the British Airports Authority allotted 100 shares to each of over 2 million applicants. Secondly, the method used by the Government attracted speculators galore; people who wanted to come in and go out quickly. By September of this year, on average over half the original shareholders in all privatised companies had sold out. That is in spite of the great inducements to hold on by way of bonus shares, discounts and so on.
Naturally, the earlier the privatisation took place, the greater the number of shareholders who had sold out. Therefore, when one examines the share registers of Amersham, for example, which was privatised in 1982, 90 per cent. of the original shareholders have sold out. Where have the shares gone? As we all know, they have gone to the institutions as before.
The Government may say, "What about employee shareholdings? Were they not a great success as regards privatisation?". Noble Lords can judge for themselves. Employee shares were offered on extremely attractive terms and any employee would have been extremely foolish not to buy them. In fact, 1½ million shareholders did just that. The best response was in British Telecom where no less than 85 per cent. of the employees bought employee shares at the advantageous terms. What happened next? For the first time in its history there was a strike at British Telecom. That is hardly the best argument to demonstrate that issuing shares to employees improves industrial relations in the way that is pretended.

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It has become increasingly evident that the Government have only one overriding purpose. It was mentioned by my noble friend, and the noble Lord, Lord Young, shrugged his shoulders. It is to continue the £5 billion a year flow of receipts from the sale of the nation's assets in order to reduce taxation. It is that which is propelling the Government forward, no matter how difficult the market or how impossible the achievement of competition—which they now claim to be their prime objective although they did not at the time of the privatisation of the gas industry.
I should like to make my position absolutely clear. There is nothing wrong with selling assets in order to invest in other assets or to pay off the nation's debts. However, this Government are determined to carry on with this once-and-for-all sale of assets—assets which they hold in trust for future generations—and to misappropriate the proceeds by reducing the burdens of present taxpayers. The Minister shook his head, but I should like to ask him what advice he would have given as a practising solicitor to any trustee who came along and said, "I am proposing to sell the capital for the benefit of the present life tenants because it would be convenient for them, they rather like it and they rather like me doing it". He would tell them that it was a plain misappropriation and was not on. This is on all fours with that situation.
I ask your Lordships to bear in mind what is happening across the Channel in France. At the moment they have a similar-sized privatisation programme. They have used the whole of the capital receipts for capital payments. They have repaid government debts with part of the receipts and the rest has been further invested in the remaining public sector. In France the final outcome is that the value of the nation's net assets has been wholly maintained. In the UK the nation's assets have been permanently reduced. We know that it is neither prudent nor proper to use capital receipts in this way. I am bound to ask this question: when will the consciences of government supporters in both Houses compel the Government to halt this rake's progress?
4.53 p.m.
Lord Bruce of Donington: My Lords, I should like to congratulate my noble friend Lord Mason of Barnsley on his frank, sincere and forthright contribution to this debate. In modern times it is good that moral values are occasionally brought into the consideration of our affairs. I enjoyed his speech enormously.
I agree with the noble Lord, Lord Diamond, that one of the main objectives of the Government in their privatisation programme has been to provide money out of capital from assets realised at a fraction of their real value. Had that been done by local councillors it would probably have attracted the attention of the district auditor and resulted in their suspension from office. On a national scale, the privatisation proposals have been a complete scandal and the noble Lord knows that.
The cash received has been applied not in relief of taxation generally but in relief of direct taxation,
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which carries with it obvious connotations. However, the main reason for the privatisation programme is simple. Expressed in economic terms, it is the further massive transfer of economic power back into the hands of capital. That is quite clearly the motive for it.
In introducing their original privatisation programmes, the Government were careful enough to list a number of motives which they tried out with varying degrees of success. First of all they privatised because they wanted to free the industries concerned from government interference. They abandoned that excuse when it was pointed out to them that in order to achieve that end all they had to do was to stop interfering. They then said that the real motive was to achieve increased efficiency within those particular industries. They abandoned that argument also when it was pointed out—and the figures are available—that the remaining nationalised industries, with the exception of coal and British Rail, to which special considerations apply, were also operating quite profitably, thank you. Indeed, it is noteworthy, as my noble friend Lord Peston pointed out, that the Government have been careful to privatise only those industries which were already making a profit at the time.
The third motive that was put forward was that in general ideological terms it was desirable to have people's capitalism more efficiently established. The noble Lord, Lord Diamond, dealt very effectively with that argument. Of course power has not returned to the people. According to the chairman of the Stock Exchange, from whom I received a letter this morning, the total number of shareholders now is roughly 9 million. The noble Lord, Lord Diamond, also pointed out that fact. The great bulk of the capital shareholdings are not in the hands of individual shareholders. Indeed, as the Minister knows perfectly well, in respect of all the industries that have so far been privatised—excluding for the moment BP, to which special considerations apply and to which I shall not refer over-much, being merciful to the Minister, who would probably prefer to forget it—the total number of individual applications for shares was 9,532,281. According to the latest data available, there remain 5,531,097 today. Over 4 million of the original individuals who made application for shares in those new industries have disposed of them. As everybody knows, they made a quick buck out of selling at the premium at which the shares were subsequently quoted.
The argument about the people's capitalism certainly cannot apply. If further illustration is necessary one has only to refer to the recent TSB meeting, which 480 shareholders attended in order to express their views. Unfortunately, those views were ignored and the chairman produced 10 times as many proxy votes out of his pocket. So much for shareholder democracy at company meetings!
No, the real purpose of privatisation is to pass back and reinforce the power of capital in this country. Indeed that is quite logical, because of course capital is now the power in this country, with the Government acting purely as its agent. The more quickly conditions are established for the operation of market forces—which is the avowed object of the

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Government—the better will capital like it, regardless of the consequences, regardless of the social effect of the operation of market forces and regardless of the complete absence of priorities in terms of national interest, the environment or anything else.
This afternoon I was a little surprised to observe that after the length of time that has elapsed since the privatisation of some industries, there has not been very much praise for their performance in regard to the customer, who was supposed to be the principal beneficiary. I should have thought that the House would have heard loud, gushing testimonials today about how well these now private monopolies and privatised companies have been serving the public interest. We have not heard a word about that. No doubt when the Minister rises to speak, from his sheaf of papers he will provide us with his customary optimistic estimate of consumer reaction as perceived by him.
It will not wash. Privatisation has served that one ideological purpose only and the time is not far distant—particularly in view of the events of 19th October on the London Stock Exchange—when the people will realise that they are already committed by the Government not only to a casino-like Stock Exchange and futures market but also that the fate of British industry is in the hands of forces that the Government themselves cannot and do not wish to control.
5.6 p.m.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, I also should like to join in congratulating the noble Lord, Lord Ezra, and say how grateful I am to him for initiating this debate today. It is perhaps a great opportunity to put right some of the misconceptions that appear fairly prevalent in your Lordships' House this afternoon, first about the Government's policy; and, secondly, about the record in the nationalised industry sector over the past 30 or more years, and certainly about the aims of nationalisation.
All of us, whichever side of the House we sit on, look to find ways in which we can govern the country and help its economy in a way that will produce a fairer society which distributes its benefits to all its members. In order to do that we must have a more prosperous society; and surely, above all else, that should have been realised over the past three or four decades. Looking at the long history of the experiment of nationalisation, we realise that although it may have produced many things, it did not produce a good economic record in those industries, whatever may be said now.
I freely confess that the noble Lord, Lord Ezra, receives three marks out of four for his account of the objectives of privatisation of the nationalised industries; but it did not produce money for the Treasury. A little later on in winding up this debate I hope to deal with that topic. However, there is one essential difference between those industries then and now which I should like to point out and which could perhaps serve as an answer to many of your Lordships' remarks this afternoon. The difference
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between the old nationalised industry sector and the present private monopolies, albeit they are monopolies, is that today it is worthwhile complaining. Today people complain about British Telecom and have mounted a large campaign. I can assure all noble Lords that each and every director of British Telecom is fully aware that the service is not perfect. But who complained in 1980? No one. No one complained because there was no one to listen. Should we remember those good old days when we had a choice between two telephones—a Trimphone or nothing? Consider the choice that one has today. Look at the services available.
Let us remember the time when there were 4,000 privileged people in the country who could have a car telephone because the monopoly was held by BritishTelecom and no one else. Today there is over 90 per cent. coverage of the country and 220,000 people share the benefits of having cellular telephones from Racal or Cellnet. Some estimates say that there will be half a million by 1990. All that was denied to the people of the country because a nationalised industry held the monopoly.
One has to look not only at the conduct of the industries themselves but in the realm of what else came from privatisation. Incidentally, at least 5,000 new jobs have been created by that one small matter.
I should also like to say, speaking generally, that I have heard a great deal of criticism this afternoon about our plans for privatising the electricity industry. Those plans have yet to be formulated. Consultations have yet to take place. We have to consider what will be best for the economic future of our country and our citizens. It there is one constant it is surely resistant to change and if there is one truth, one that we should try to live with, it is that we should look with our eyes open at what is being proposed, when it is being proposed, and then to see if it will actually work and therefore be worth doing.
If I may make a minor prophecy, it is that when our plans do come forward they will come forward conscious of the need for us to ensure that we will have a supply of electricity available well into the 21st century and that we shall be conscious of the need for competition to ensure that this supply will be competitive for the whole of British industry and commerce.
I should like to say to the noble Lord, Lord Ezra, that he should also look at this matter in some detail. I hope that the noble Lord will then take the opportunity of raising the matter at that time, as indeed when we come on to matters dealing with other industries.
I am also grateful to my noble friend Lord Thomas of Swynnerton. Alas! he pays me too much credit because it was nothing to do with my arrival in the Government in 1984 that the privatisation programme did not date from there. However, I can take some credit for an earlier period. My first job, when I was special adviser to the then Secretary of State for Industry, was privatisation. Indeed, Cable and Wireless, British Aerospace and Amersham International are all companies which have flourished since they have gone into the private sector.

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I think that not many of us in this House can recall that when Cable and Wireless were actually privatised the total market value of the company—a company whose market share was shrinking—was some £460 million. It was nearly 10 times that amount only a few weeks ago. It is now a company which is girdling the world with electronic highway, with an unrivalled international reputation that has been transformed during this decade, and that transformation, I believe, owes a great deal to the fact that it is now in the vigorous competitive world of the private sector. That can be said for every single company that has gone into the private sector. Surely, we should compare the past three to four decades of comparative failure in the public sector and our experience, so far, of almost uninterrupted success as soon as the companies have been privatised.
The noble Lord has set me some difficult questions which I am not sure I can answer regarding whether we would be better to have had a regional network for some of the companies that have previously been privatised. I can say this: I doubt if the accounting structures were there at that time which would have enabled that to have happened. The golden shares were clearly set out in the prospectus of the company; and as for changing the 15 per cent., or the percentage of that, that was also set out in the prospectus. I can see little reason at the present time—although I am always open to argument and reason—as to why it should be changed.
I should like to join with all in your Lordships' House in welcoming the noble Lord, Lord Mason of Barnsley. He will bring great lustre to this House, and I look forward to debating with him on many future occasions. There is little I can say to him about his contribution today save to say this. Coal will continue to be a major contributor to the base-load supply of electricity for our foreseeable future. Nevertheless, it will be for industry to demonstrate that it can supply coal reliably and competitively.
Perhaps I may pay tribute to British Coal for its half-year results which show a steadily increasing productivity and efficiency. There has been an increase of 45 per cent. in productivity and a drop of 23 per cent. in colliery operating costs; I hope that it will continue.
As regards the main theme of the noble Lord, I should like to say only this. There was much that the noble Lord found bad where I found cause for hope for the future; and much in which he found good where I, alas, could not share his views. There will no doubt be other occasions on which we can debate these matters.
I am grateful to the noble Lord, Lord Marsh, who was not only a distinguished chairman of one of our nationalised industries, but was almost the first man to persuade me to think of entering the public sector some seven or eight years before I actually did. However, I should like to point out to the noble Lord—who I am sure needs no lessons from me in competition—that if the link between the airport and the railway station had been so worthwhile, but was not put there because there were buses, perhaps the
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noble Lord should consider that if those buses finally vanished, it might well be because there was no actual demand for that particular service. If we had put the railway there, we would have found ourselves with yet another white elephant, which has so often come about because mere Ministers have made decisions which should have been left to other economic forces. I hope that this House can see that as time goes by, Ministers will be asked less and less often to make such decisions—and it is hoped that we shall then see that the market will actually work.
I should like to say to the noble Lord, Lord Grimond, that of course part of our actual involvement, part of our espousal of the privatisation programme, is to establish better worker-involvement. We have tried many ways of getting better worker-involvement. Indeed, there was an experiment in the late 'seventies when trade unions, or workers, came on the boards; but that did not seem to work. Today we have a very large proportion of employees who are actually owners of shares in their company. Therefore, if that does not provide a sense of ownership—and all the evidence from speaking to those who do, is that it does—I do not see what will. If parliamentary control would be the best—and I am the last person to go against parliamentary control—control of a nationalised industry, then I suspect we should have seen a better economic record over those decades. But it was quite the contrary. What parliamentary control actually did was not to ensure better management of the nationalised industries, but to ensure time after time that what should have been basic commercial decisions were actually made for political motives.
I am grateful to my noble friend, Lord Bruce-Gardyne. His achievement of wider consumer choice is not of course the first priority in privatisation; but it is however a very important one. It is also one that I have no doubt he will remind me of when the particular plans come through for electricity and, as time goes by, there are other objectives. It is part of the general improvement of an economic well-being in the country.
That brings me to the remarks of the noble Lord, Lord Kirkhill. He said that—and he was quoting—private ownership does not always equal efficiency. I would of course agree with the noble Lord that it does not. But the corollary is not true, either. In fact I could say: does public ownership ever achieve efficiency? because, as yet, there is still no proof that anything in the public ownership is more efficient than it would have been outside it. From all the evidence we have had—and we have heard much this afternoon; and I should like to go on all the evidence—efficiency is not improved in the public ownership. That is for reasons which have already been put forward.
However, where I should like to join the noble Lord is on the subject of rebates to customers for poor services. This I believe is a very good idea. However, I would ask the noble Lord; what actually happens if rebates are given by nationalised industry? The state pays. On the other hand, when rebates are given by private companies then the shareholders have to pay and the pressure, once again, falls upon the directors. That is when you see

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rebates of that sort beginning to have effect. One of the other great difficulties we had with the nationalised industry sector was to avoid being bankrupt again, in any sense at all; the balance between management and employees was not there. That was another example.
I am grateful to the noble Lord, Lord Winstanley, who said that no one has devised a system to make large organisations responsive to the needs of customers. I hope very much that what is beginning to be exhibited in the case of British Telecom is pressure at long last being put upon those who are in the seats of power within those organisations that they should be responsive to the needs of customers. British Telecom is a mammoth organisation with nearly a quarter of a million people. I do not believe that this is in any way worse than an ombudsman. I am not sure what an ombudsman would actually achieve, although it is an interesting suggestion that I shall take away with me and think about. However we must I think apply pressure to those who run those companies that they must pay attention to the needs of shareholders.
I am very grateful to my noble friend Lord Lauderdale for his comments. He is of course absolutely right in pointing out that there has been a delay of eight years in the construction of new power stations. I sometimes ask myself why is it that to my knowledge we are the only Government in the entire world that has invested in one and the same person in that he should he the Minister for sport and the Minister for planning. Sometimes I ask myself: is it because the British middle-class fought for town planning inquiries? Is that how we spent our time? I must say that the reason we have a delay of eight years in the construction of new power stations is simply because of the vagaries of our planning system. If we could find a way through that, we might have a more efficient industry. But it is part of our democratic tradition and no one on this side of the House is insisting that we should do away with it. However we should realise that many of these decisions are made not by central government but by local government and through the planning system itself.
The Earl of Lauderdale: My Lords, I am grateful for what my noble friend said. But how will he deal with these planning difficulties, if we are to get 13 new GW by the year 2000, six new PWRs, and four new coal-fired stations if they remain?
Lord Young of Graf ham: My Lords, through perseverance and hard work. Hopefully, the public will begin to realise that many of the problems which have been undertaken and looked at in respect of the first PWR inquiry will not have to be repeated every single time at every single inquiry. There is no other way and we have to do two things: first, provide planning permissions in order to get these built; and, secondly, make sure that finance is available. One of the reasons we are looking at the electricity supply industry going into the private sector is in order that more methods of finance should be available. The noble Lord, Lord Dean of Beswick—
Lord Bruce of Donington: My Lords, I am most grateful to the noble Lord for giving way. He is well within his time. Can he say whether prior, and a good time prior, to the formulation of plans for the electricity power industry to which he has referred, the Government will issue a discussion White Paper before the legislation itself is formulated, so that there can be a full discussion not only in this House but generally by the public about the nature and extent of the plans that the Government propose.
Lord Young of Graffham: My Lords, a discussion paper is, of course, green and a White Paper is normally not that. Let us get the consultations with the electricity supply industry out of the way; then the Government will come forward with their plans. I have little doubt that they will be the subject of a debate or two in your Lordships' House, because this matter has certainly incurred a great deal of interest this afternoon and no doubt will continue to do so. I think I can do no more than say that we are, first, going through a period of consultation. I think we should get through that before we promise even more.
I am grateful to the noble Lord, Lord Basnett, whose figures on the cost of privatisation I found a little curious. They did not compare with the cost with which I am familiar. So many nationalised industries are contributing more in taxes on profits than they used to contribute before privatisation in dividends to the Treasury. That is because company after company that has come into the private sector is doing better than it used to.
I have also heard a great deal about British Telecom. I think that many of your Lordships, who are aware of the dissatisfaction of the public at large, at times forget that today British Telecom is still investing some £6 million each and every day of the year in new equipment and is bringing on stream two new exchanges a day. The basket of prices has dropped some 13 per cent. in real terms since privatisation. A waiting list of a quarter of a million people has disappeared. Of course we are not satisfied with the telephone system that we have today. But would we not have been better perhaps to have privatised British Telecom 15 years earlier? We might then all be very satisfied with the service.
I am grateful to the noble Lord, Lord Harris of High Cross, who drew attention to public ownership in the private interest being a faulty prospectus. That is a prospectus about which I would certainly agree with him. He happily used good words about what I thought was a very interesting paper from the Centre for Policy Studies on electricity privatisation. But I am very well aware that he will be watching closely what the Government do about their electricity privatisation and that he will be ensuring that we keep competition elements very much to the fore.
The noble Lord, Lord Peston, said that he had a great belief in old-fashioned economics and then proceeded to confound that belief in almost everything he said afterwards. The noble Lord must be a patient man, because he may have to wait some time to hear us stand up and say that we are about to take back into ownership some of the industries that we have privatised. I suspect he will have to wait as

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long for that as he will have to wait to see the lights go out, which is another emotive phrase that many of your Lordships have used this afternoon about the future prospects of the electricity industry in the private sector.
Again the noble Lord, Lord Diamond, gave some figures which I found difficult to follow. During the period when the noble Lord had some responsibility for the nation's affairs, the individual shareholder was rapidly following the path of the dodo. We were seeing the decline of shareholders until they became nothing but a fond memory. However many we have lost, let us see how many we have today—three times as many as we had a few years ago. The noble Lord said that people are getting out. He was quite right. In the case of British Telecom, 222,539 employees were holders of shares at the time of privatisation. More than a year later in the 1986 accounts, the number had gone to 221,906—nearly 600 down. That shows us something, does it not? There are over 220,000 people who continue to be shareholders. Of course the numbers have gone down.
May I just make one other point? which is very important indeed? The noble Lord said that we require the money and the noble Lord, Lord Bruce of Donington, made the same point. If you see the PSBR that this Government have as a percentage of our GDP, it is not only declining with the proceeds of privatisation but, more importantly, it has declined each year excluding the privatisation proceeds. If we needed the privatisation proceeds for that, which is a pre-eminent aim, we would have acted accordingly.
The noble Lord compared us to France. A few days ago we announced that unemployment was 9.8 per cent. and going down. If you look at the unemployment in France, you draw another conclusion. Alas, I should like to congratulate the noble Lord, Lord Bruce of Donington, who gave us a marvellous vintage speech, the sort of speech that we heard to our cost in the '40s and '50s. He made one point with which I agree, that the customer is the one who will determine. The customer is the one who will be satisfied as a result of our programme.
Lord Ezra: My Lords, I should Like to thank all noble Lords who have participated in this debate. I think they have shown remarkable skill in concentrating so much wisdom and experience in such a limited time. In particular, I feel that what was said about the prospective privatisation will be very carefully heeded by government. These are going to be very difficult issues and I am glad that the noble Lord, Lord Young of Graffham, has made it clear that we shall have many further opportunities for debate on these subjects. With that, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Primary Health Care
5.28 p.m.
Lord Skelmersdale: My Lords, with the leave of the House, I will now repeat a Statement that has been made in another place by my honourable friend the
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Minister for Health on primary health care services. The Statement was as follows:
"With permission, I will make a Statement about the Government's plans for improving the primary health care services. These plans are set out in the White Paper entitled Promoting Better Health which has been published today. Copies are available from the Vote Office.
"The primary care services—those provided outside hospitals by family doctors, dentists, pharmacists, opticians, community nurses and others—account for nine-tenths of all patient contacts with the National Health Service. They cost over £5,000 million a year.
"In 1986 the Government set out their proposals for improving primary care. These attracted over 2,000 written comments and were the subject of public consultation meetings chaired by Ministers in different parts of the country. We are grateful to all those who commented and to the Social Services Committee of this House for its constructive report published earlier this year. The White Paper includes a detailed response to that report.
"The consultations showed a wide measure of support for the government proposals, in particular for placing the promotion of better health at the centre of the stage. The White Paper shows clearly the amount of preventable disease in this country and it contains many proposals for tackling this problem. These include: the setting of targets for family doctors to achieve higher levels of vaccination, immunisation and cervical cytology screening; more health promotion sessions in general practice; a greater role in health education for pharmacists; regular health checks for particular groups, such as the under-fives and elderly people; a new contract for dentists which will encourage prevention; an extension of the primary care team to include chiropodists, physiotherapists and others; action to see that the skills of community nurses are better used, in connection with which we are issuing today a circular to English health authorities advising on the steps to be taken following the Cumberlege Report on Community Nursing. To achieve these aims we shall be making general practitioners' contracts more sensitive to actual performance and will look to family practitioner committees to monitor more vigorously the contracts they have with family doctors.
"The White Paper also emphasises the needs of the consumer of primary care services. In particular it sets out ways of giving people much more information with which to choose their practitioner and of making it easier for people to change doctor. It also provides improvements in complaints procedures.
"The various measures the White Paper sets out—which include also compulsory retirement for the older doctors and dentists and more effective improvement of primary care premises—will affect all parts of the country. We expect them to bring particular benefits to inner cities and other deprived areas. In addition, the White Paper sets out the Government's intentions for improvements

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specific to such areas; for example, by paying particular attention to their dental, pharmaceutical and community nursing services.
"All primary care professionals have a part to play in the improvements we seek, and the White Paper describes our intentions for each part of the service. The Government have already made provision for a large increase in expenditure on the family practitioner services and are prepared to invest substantially more on top of this. In many cases the actual amount will depend on the outcome of the negotiations that will now take place with each of the practitioner professions. The White Paper makes clear our intention to proceed quickly with the introduction of blood glucose testing strips for diabetics.
"Expenditure on family practitioner services has already risen by £1.5 billion or 43 per cent. in real terms since 1978/79. This is reflected, for example, in the increase of nearly 4,000 to over 30,000 in the number of general practitioners and a consequent fall from over 2,200 to less than 2,000 in the average number of patients on each doctor's list. To achieve the strategic development set out in the White Paper will mean giving still greater priority to the services as a whole, and we have therefore thought it right also to look carefully at priorities within them.
"We have concluded that it is reasonable to secure some additional resources for development by asking those who can afford it to pay for sight tests and to meet somewhat more of the overall cost of dental care through a system of proportional charges extending also to examination costs, for which at present no charge is made. The proportional charge system will be simpler and will relate patient charges more directly to the costs of the particular treatment. It will benefit regular attenders who look after their teeth, some of whom will have no increase or may even pay a little less. Current exemptions from dental charges will of course continue for children, adults on low income, expectant and nursing mothers and certain other groups. National Health Service sight tests will remain free for children, those on low income, the blind and partially sighted and other specified categories.
"Existing plans already provide for additional expenditure by 1990–91 of some £570 million in real terms. This will be further increased by the substantial extra resources that the Government will make available to finance the improvements I have described today. Towards the additional expenditure as a whole, the extra payments which people will make towards dental care and sight testing will contribute some £170 million by 1990–91.
"The necessary legislative provisions, together with other measures in the health field, are contained in a Bill which will also be published today. The proposals in the White Paper and the Bill will generally apply throughout the United Kingdom, but my right honourable friends the Secretaries of State for Scotland, Wales and Northern Ireland will be considering the ways in
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which certain of our proposals will require to be adapted to the particular circumstances of these countries.
"Our proposals will enable people to make more informed choices of practitioner, will give them access to higher quality services and above all will place the greatest emphasis on preventing illness and promoting positive good health. I believe it is a strategy which will be widely welcomed and supported".
That concludes the Statement.
Lord Ennals: My Lords, I thank the Minister for repeating the Statement made in another place. Will he accept that it is not possible to divorce primary health care from the general state of the National Health Service? Will the Minister also accept that the underfunding of the service and the consequent intolerably long waiting lists and waiting times which are now at a record level greatly affect the burden imposed by waiting patients on general practitioners and other members of the health care team? Is the Minister also aware that the inadequacy of community care provisions for the elderly, the disabled, the mentally handicapped and the mentally sick also imposes burdens on the family practitioner teams which can be very costly indeed?
Before I come to a series of concerns and criticisms of the Statement and the White Paper I wish to say that there are some aspects which I welcome. I welcome the greater emphasis on disease prevention and health education by doctors. I welcome the decision to make blood glucose testing strips for diabetics available on prescription. That matter has been raised in your Lordships' House before. I welcome the provision for earlier retirement for some GPs who are still serving at a very great age.
I also welcome the greater role envisaged for pharmacists in health education as set out in the Nuffield Report. We shall certainly need to consider and then debate the important proposals in the White Paper but I say straightaway that I am totally opposed to the ending of free eye tests. They have been a feature of the service since its commencement. I am sure that all my noble friends feel the same way.
Last year almost 12 million people had their eyes tested. The 30 million people who wear glasses require regular eye tests. If people are to be deterred by what may well be a £10 charge, how many cases of glaucoma or cancer may not be discovered and dealt with? In such cases people would be referred to the hospital eye service, which is at present under very great pressure.
Will the Minister also accept that I am no less opposed to the ending of free dental tests? I deeply regret the proposed action to discourage patients from regular visits to both dentists and opticians. Why were these two proposals not mentioned in the consultative document? Who during the course of consultation proposed that that action should be taken? Was it the dentists or the opticians, for example?
The Statement refers to the important new monitoring tasks of family practitioner committees. In which case why in the past has the budget of family

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practitioner committees been cut to the tune of 600 staff posts? How will they fulfil the new tasks now imposed upon them with their depleted staff?
The Statement refers to capitation fees for GPs. We shall want to examine that more closely, because one asks whether this measure, with increased opportunity for patients to change their doctors—I must say I welcome that—will lead to longer patient lists for some general practitioners? Is not this the time to bring together more formally the family practitioners and the district health authorities, as was recommended in the careful report by the Select Committee, instead of talk about further co-operation and so on? Is anything said in the White Paper as regards the deputising services for GPs, about which there is considerable concern? Finally, the White Paper seems to put forward a very unsatisfactory response to the Select Committee's recommendation on the implementation of Section 7 of the Disabled Persons (Services, Consultation and Representation) Act 1986.
From this side of the House we shall look forward to the opportunity of debating this very important White Paper.
Lord Winstanley: My Lords, we on these Benches also wish to thank the noble Lord for repeating this important Statement. Perhaps we may also say how very glad we are to see the White Paper at long last. I think we have been waiting for it longer than whoever it was waited for Godot.
I hope that the Minister will accept that the uncertainty of waiting for the White Paper has been very damaging. It has halted long-term planning and has perhaps had a paralysing effect on those who provide primary care service. We are aware that part of the delay was caused by the unfortunate illness of the Secretary of State. We hope that he is soon restored to full health, not only for his own sake but also so that he can assist in tying up some of the loose threads which are hanging from the White Paper.
Like the noble Lord, Lord Ennals, we subscribe entirely to the final paragraph of the Statement, which summarises the broad aims. We are entirely at one with the Government on those aims. However, we may have certain differences on the means whereby the aims are to be achieved. In particular, I echo what the noble Lord has said concerning the provision of blood sugar testing strips for diabetic patients. That is something for which noble Lords on these Benches have been asking for many years.
As regards charges, the Statement and the White Paper are quite specific about a charge for eye tests. They are a bit more ambiguous concerning dental examination charges. The words are,
"a system of proportional charges extending also to examination costs, for which at present no charge is made".
Does that mean that dental examinations will not be free? We know that eye tests will not be free. Therefore, presumably dental examinations will not be free.
We have never greatly relished the high charges for dental treatment or for spectacles. However, we have greatly supported a system enabling people to
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discover without charge whether they require either. It is a retrograde step to go back on that provision. However, I notice the provision will only affect, in the words of the Statement, "those who can afford it". Who those people will be, I am not entirely sure.
It seems from much of the Statement that there is to be a move, so far as the remuneration of general practitioners is concerned, towards a system of item of service payments. Perhaps the noble Lord will remember that those first came into being many years ago when Kenneth Robinson was the Minister for Health under what was called the new contract.
There were certain advantages to item of service payments. I am bound to say that a special item of service payment to a general practitioner for doing something which every general practitioner ought to do in any case seems to me to be a bit different. However, in general we have no objection to that system.
Perhaps the noble Lord can tell me, if we are moving more to item of service payments, whether we are phasing out any others. I know, and agree, that elderly general practitioners are to be compulsorily retired. Some of them whom I know are 95 years of age and are still alleged to be working. How much work they actually do, I do not know; I know that they draw the pay for it. It is proper that they should retire. However, there is no mention in the Statement of any intention to phase out seniority payments. I benefited from seniority payments to general practitioners, but it does not seem wholly logical that a general practitioner should get extra pay merely by getting older. Perhaps the noble Lord can tell us whether seniority payments will be phased out.
We await the Bill and we await the obvious opportunities to explore the many matters which are uncertain in further debate on other occasions.
5.45 p.m.
Lord Skelmersdale: My Lords, I am grateful to the noble Lords, Lord Ennals and Lord Winstanley, for their reception of the Statement. The White Paper which it introduces is a long and complicated one which sets the Government's practical and comprehensive programme for primary health care for many years to come. In passing, let me say that the review process started by the Green Paper 18 months ago was the first such review of that type of care for 40 years.
The noble Lord, Lord Ennals, is quite right in saying that we are looking at one specific part of our health service and that the parts cannot be divorced. Nonetheless, I think it is true to say that different parts of the service need different remedies in order to make each part perform effectively.
The White Paper does not set out hard and fast rules. It describes what the Government want to achieve over a period of time. Discussions will need to be conducted, particularly with doctors and dentists, on matters which are not likely to be swiftly resolved. However, some things are quicker to be resolved and, as the Statement says, they are the subject of a Bill which was introduced in another place today.

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Not surprisingly, both noble Lords zeroed in on charges for dental inspection and the removal of free sight testing. The Government's aim of targeting resources where they will be most effective is well known. As I have said, children and those on low incomes will not be affected in any way. The noble Lord, Lord Ennals, may be interested to know that 30 per cent. of sight tests will continue to be free under the system which we have in this country for children and those on low incomes.
There is no evidence that any lasting effect will occur in dental and optical health as a result. Dental charges already exist and it is fairly unusual for an adult to have a dental inspection without incurring such charges if he or she is liable. It is also reasonable for the more expensive treatments to attract the highest charges. At the moment they do not and that must be wrong. Those changes are all fully justified and will enable us significantly to increase the resources available for promoting good health, preventing disease, raising standards and making the primary care services more responsive to the consumer.
I think that noble Lords should not lose sight of the fact that £5 billion is spent every year on primary care services. Since 1979 expenditure has risen by 43 per cent. in real terms. Perhaps more importantly for the immediate future it is expected to rise by a further 11 per cent. in real terms over the next three years.
On top of that, the Government are prepared to invest substantial extra resources. Obviously a proportion of those resources will arise from the £170 million which the introduction of the two charges on which noble Lords have commented will raise. There is no reason to believe that patients will be deterred by having to pay a small charge. I think that those charges will probably be less than £10 in the case of sight tests given every three years and something of the order of £3 at today's prices for a dental inspection.
The noble Lord, Lord Ennals, asked why we were increasing capitation fees. Currently 47 per cent. of a doctor's income comes from capitation fees. We intend to increase that to 50 per cent. Increasing that proportion is one method of increasing competition among doctors and encouraging them to provide services which are more responsive to patient needs. Our intention is that the payment of capitation fees, for which a basic core of health provision is expected, will be complemented by incentive payments designed to encourage the provisions of services targeted at specific health care objectives. Those are all matters which will have to be settled in the discussions with doctors to which I have referred.
The noble Lord, Lord Ennals, asked whether family practitioner committees could cope with their new responsibilities and whether they would have the necessary resources. We now have a strong team of FPC chairman and members possessing the necessary qualities of leadership for that expanding role. We shall increase the funds made available to them to enable them to carry out these new functions efficiently and effectively.
On the question whether family practitioner committees should come under district health
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authorities, as I have said, the role of the FPCs is to be strengthened under these new arrangements. The Government have no plans to bring them under other health authorities. I think it might be a mistake because we have already agreed that different sectors of health care in this country need different remedies. I also believe they need different overseeing agencies.
The noble Lord also asked about deputising services. We are keeping a close eye on their effectiveness and the amount of use that doctors make of them. I am particularly concerned in this and if the noble Lord or any other noble Lord has worries about any part of the country I shall be very glad to look into them.
The noble Lord, Lord Winstanley, spoke about dental charges. I am advised that 45 per cent. of dental examinations will remain free. As I have said, we expect the rest to attract a small charge of about £3.
Lastly, the noble Lord asked about seniority payments. This is one of the matters we shall be discussing with representatives of the professions. I have no doubt that the noble Lord will advise us that there are some other allowances whose usefulness is questionable. Clearly, seniority payments are a candidate for review.
It was St. Paul, I think, who copied Confucius by saying:
"Give me a child until he is seven and he will be mine for life".
As regards dental and optical care this is a very valuable point to bear in mind, because the testing of children will remain free.
Lord Boyd-Carpenter: My Lords, in the light of the indignation of the noble Lord, Lord Ennals, about dental and optical charges, can the noble Lord remind your Lordships under what government and at what time charges under the health service were first introduced for teeth and spectacles?
Lord Ennals: Not for inspection at all, my Lords.
Lord Skelmersdale: My Lords, I am afraid not. I think charges for teeth were introduced by the government of which the noble Lord, Lord Ennals, was a staunch supporter.
Lord Ennals: My Lords, but not for testing.
Lord Kilmarnock: My Lords, we obviously have a great deal to digest in this White Paper so this is not an appropriate moment to ask a lot of questions. However, there are a couple which I should like to put to the noble Lord and the first is this. Will the setting of targets for family doctors to achieve higher levels of vaccination, immunisation and cervical cytology screening lead the Government to look again at the no-fault compensation idea? Is this not particularly relevant in relation to vaccination and immunisation if there is an intention that a larger section of the populace should receive these services?

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The second point is this. I was pleased to hear about the intention to expand the role of pharmacists in health education. I see in the White Paper that there are some additional allowances for them for certain activities. Would the noble Lord agree that perhaps one of the greatest ways in which the role of the pharmacy could be expanded would be if there were some allowance towards the improvement of the pharmacist's premises as well as the doctor's premises. There is a great deal of difficulty for the pharmacist in providing counselling and matters of a slightly sensitive nature in the present premises in which he operates. Will the Government look into that?
Lord Skelmersdale: My Lords, on the second point, pharmacists are to a great extent self-employed and to a great extent also they own their own premises. Therefore, they are quite different from doctors in that respect.
Lord Kilmarnock: My Lords, some doctors own their own premises and are also self-employed.
Lord Skelmersdale: My Lords, yes, but they are custom-built for a rather different kind of operation. They are not what you might call shop-bound as opposed to being people-bound like community health centres.
As regards no-fault compensation, I said in answer to an Unstarred Question in your Lordships' House the other day that the Government would continue to keep this matter under review, but they certainly would not consider it with any seriousness until after my noble and learned friend the Lord Chancellor had completed the judicial review which he is conducting at the moment.
Lord Somers: My Lords, the Statement is very good so far as it goes but it does not deal with what I feel is one of the crying evils of the health service today: that is, the appalling time which so many people have to wait in order to get a bed in a hospital. Can the noble Lord tell me if there is any plan in the mind of the Government about either enlarging the present hospitals or possibly building new ones? I understand, too, that part of the difficulty is due to the lack of nurses. Have the Government any plans for possibly recruiting more nursing staff?
Lord Skelmersdale: My Lords, regarding waiting lists, or more importantly waiting times, I most certainly agree with the noble Lord. We have had discussions in the House over recent weeks on the subject of the Government's waiting list fund, where special moneys have been given to health authorities which have shown that they can use funds wisely in order to reduce their waiting lists. In the Autumn Statement the other day my right honourable friend the Chancellor of the Exchequer announced that the second year's money would be increased from £25 million to £30 million for the next financial year.
As regards the lack of nurses, I think this is rather wide of the Statement. If the noble Lord will allow me, I will take him aside at some convenient moment and explain the plans of the Government to him.
Lord Peston: My Lords, at a rough glance there is a lot of very good sense in the White Paper, but the remarks made about sight testing are absolutely outrageous. Indeed, seeing them placed in the context of raising resources, they are even more outrageous. Perhaps I may ask the noble Lord to remember that there is a perfectly good way of having the better-off provide more resources for the health service and it is called income tax. To introduce user charges here is not justified in any way whatsoever, and it seems to me to be a most doubtful thing.
I should like to ask the Minister whether expert opinion in this field supports his view that no damage to the nation's eyesight is likely to follow from the introduction of these measures. I look around your Lordships' House and it seems to me that the majority of people wear spectacles, and therefore I worry even more.
That was a rather controversial question for the Minister, but one which is less controversial is this. As regards the medicines Bill and the reforms in pharmacy and where those reforms require primary legislation, are the Government open to persuasion and will they be willing to accept amendment of the Bill, when it reaches us, in order to allow certain important developments to take place, notably in pharmacy?
Lord Skelmersdale: My Lords, I am a member of a Government who do not actually believe that income tax ought to exist at all. It was of course a temporary tax put on I believe, by the Duke of Wellington.
Lord Boyd-Carpenter: My Lords, it was Pitt first of all.
Lord Skelmersdale: My Lords, I am advised by my noble friend that it was Prime Minister Pitt, so it is even longer ago. This temporary arrangement has gone on for far too long. I believe that if one wants to raise taxes one can do it by other means, such as value added tax. I do not think on this particular aspect of health care taxes that would be the appropriate way to do it. The Government have decided that people should pay for services where they are able to do so.
So far as pharmacies are concerned, we are not discussing the Bill this afternoon and it will come before your Lordships' House for full examination—whether dental or otherwise—in due course. Of course, if the noble Lord would like to put down an amendment to that Bill, I will consider it in the normal way.
The question does allow me to answer a point made by the noble Lord, Lord Kilmarnock—who I notice has gone. We propose to provide funds to improve the standard of services and premises in inner city areas so far as pharmacies are concerned.
Lord Colwyn: My Lords, as a dental surgeon perhaps I may say that generally I welcome the Statement made this afternoon. However, I am disappointed to see that yet again the Government intend to look to the general ophthalmic and dental services to generate additional resources for the important developments in the primary care field.

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Yet again, it is the dental services which are going to be nobbled in this way. In real terms charges have doubled since 1979 and it seems that dentistry will again be used to subsidise other aspects of the health service.
The present charging system is very difficult. We welcome a change in that system and the proportional charge which is talked about. However, there is no mention of a ceiling to the proposed charges. At present, there is a ceiling of £115 and we shall be very upset if that is increased in any way.
Finally, we shall also be very concerned if the proposed changes in the Health and Medicines Act remove the present statutory responsibility for the health authorities and change it to a discretionary power on their behalf. We shall be very concerned if that changes because we feel that that will be a retrograde step in the overall improvement in children's dental health.
Lord Skelmersdale: My Lords, I am grateful for the first half of my noble friend's remarks. I am not quite sure that I am as grateful for the second half. The provision of dental services has led to considerable improvements in dental health in recent years. For example, in 1983 more than half of all five year-olds had no dental decay at all, compared with under a third 10 years earlier. Improvements have been felt by all age groups, and the Government therefore believe it is right to shift the emphasis from treatment to health promotion. The Government welcome the health authorities' current flouridation initiatives and will continue to promote dental awareness and regular attendence at the dentist.
I do not believe it is fair to say "yet again". As I have already explained, the Government have already announced that they will make available over half a billion pounds extra in real terms over the next three years for the primary health care services. What we are talking about in this White Paper is money over and above that.

Alcohol Abuse
6.3 p.m.
The Viscount of Falkland The Viscount of Falkland rose to call attention to increasing alcohol abuse of all kinds in British society, and to the case for a thorough examination of the national and cultural attitudes connected with it, and to move for Papers.
The noble Viscount said: My Lords, I beg leave to move the Motion standing in my name on the Order Paper. I believe that we may claim credit in your Lordships' House for drawing and focusing attention on the abuse of drugs in this country, and in particular the harder type of drugs which are not considered socially acceptable. The efforts that have been made throughout society to prevent the manufacture, distribution and use of those drugs are extremely laudable and those efforts are preventing a good deal of misery, degradation and indeed, loss of human life.
However, we still have the best known and most available drug of all in our society, where the effects
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mount daily. This is a very timely debate this afternoon because there have been several reports on this subject recently. I am glad that we shall have speaking in the debate this evening the noble Baroness, Lady Masham of Ilton, whose report on young people and alcohol came out yesterday—and a very startling report that was too, and one which received very proper coverage in the press today. I think the noble Baroness will have some very interesting things to say to us later on.
The way the Motion is phrased may seem odd to some noble Lords, but I believe that the situation has become very grave as regards this drug. I repeat, it is a drug. A lot of people in the country do not realise that alcohol is a drug, a psychoactive drug which has very similar effects to many drugs which are not acceptable in our society. Very few people realise the actual dangers which follow the abuse of alcohol.
Not everybody abuses alcohol. It has a central cultural role in our society and many people use it sensibly. They give the right example to their children on how to use it. They use it in all the normal ways: they drink at their children's christenings, they drink at marriage ceremonies, some even drink at funerals or after them. We toast our monarch, we drink when colleagues leave their employment, we drink to relax, we drink to make ourselves feel more confident. From time to time we drink to make ourselves—those of us who are male, I stress—feel more masculine. That is something we shall return to later.
The danger of alcohol is that it is lawful and institutionalised in our society, which makes it difficult for many people to accept the full danger of the drug. As prosperity increases—which I hope will continue, though there may be signs of a check in that area—it is quite clear that, as people become more affluent and their disposable income increases, more alcohol is consumed. One fact which is irrefutable is that the greater the amount of alcohol consumed, the higher the level of alcohol abuse.
When I mention alcohol abuse, I mean not just the old rather narrow view of unfortunate people who develop an addiction and who are generally known as alcoholics, though that is a very difficult term to define. I mean of course those who abuse drink by becoming intoxicated. In fact, it is one of the more remarkable facts about our society as opposed to some of the others that maybe we are not as high as some of our neighbouring European countries in the league table, if I may put it that way, of addiction. We are somewhere down the list.
So far as intoxication and its immediate effects are concerned, and increasingly among the young, we are seeing a most incredible tally of damage, destruction, unlawful behaviour, misery to families and so on. It is upon this intoxication aspect that I suspect many noble Lords will touch tonight, because it receives a lot of publicity, for example, in relation to football violence and crime levels. Indeed, my noble friend Lord Harris of Greenwich, who had great experience of this, was telling me before I came into the Chamber that 50 per cent. of murders are alcohol related. Most crimes which involve assault and battery, particularly at certain times of day, are alcohol related. The list is endless.
Perhaps I may add a point which I think has been very curiously neglected in our press: the level of child abuse which people deplore, is, where proved, often connected with alcohol abuse of one form or another. Alcohol is a very strong factor in the abuse of children, whether it involves violence or sex, or a combination of both.
It is a curious thing which I have discovered in my researches into this whole matter that human beings seem universally attracted towards psychoactive and mood-changing drugs of some kind. There is hardly a group in human existence which does not, or has not at some time, found something which is used and becomes institutionalised, accepted and lawful; whereas other things become unlawful. For a period in the 17th century in Russia smoking was punishable by death. I believe that for a period in Turkey if a pipe smoker was discovered he had his nose pierced with a pipe and was paraded through the community on a donkey. Those punishments seem extremely drastic to us.
A friend told me recently that he was talking to some businessmen from the Yemen where, being Muslims, they do not drink alcohol. They have exactly the same reaction to a drug which they chew called khat. They react exactly the same to that drug as we do to alcohol. They say, "I really must give up khat at lunch-time because I fall asleep after lunch if I chew it." It does not matter what drug is concerned, it has the same effect on the brain and on the nervous system
In this country—and I hope other noble Lords will take up this point—it behoves us to face the situation head on. We do not want to fudge the issue—to use a current term. The fact is that alcohol is being consumed in greater and greater quantities. It is cheaper, in real terms, than it ever was. It is a curious fact that tax on alcohol has risen at nowhere near the rate of inflation. Effectively, someone buying a drink out of his disposable income today is much more able to afford it than he was 30 years ago.
We also have this worrying shift to the use of alcohol as a mood-changing drug for the young. Young people have much greater incomes at their disposal. They use their incomes in exactly the same way as previously in our society, but perhaps with less control and less example. Therefore, I urge your Lordships—and I urge the new inter-departmental Cabinet Committee which has been formed, the Wakeham Committee, which I welcome—to take on board all those aspects. I urge the committee, as I am sure it will in the course of its deliberations, to take evidence from all members of our society—from policemen, teachers, nurses and from anyone who can throw light on the problem. Psychiatrists should also be consulted. There is an excellent report, recently published, from the Institute of Psychiatrists. Evidence should be obtained from the armed forces and from anyone who can throw light on all aspects of alcohol consumption and abuse.
The harmful effects of alcohol abuse can be split into three categories. The social category is as long as one's arm. Marriage break-up is often associated with drink abuse. There is also child abuse. A recent
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survey shows that in hospitals, for example, a high percentage of people admitted into casualty and accident wards are under the influence of drink. There are assaults on nurses. I regret that I did not ask one of the noble Baronesses who was a nurse, or has had nursing experience, to speak in the debate because the abuse and the attacks which nurses face in the course of their daily or nightly duties from people under the influence of drink are horrifying. The list is endless, but I need not go through it because I am sure other noble Lords will draw attention to the various examples.
The physical aspects of alcohol abuse are easy to observe. I do not suppose that there are many noble Lords who have not had contact, directly or indirectly, with someone who has suffered from the effects of alcohol abuse. The most obvious effect, of course, is damage to the liver. Everyone talks about the risk to the liver from alcohol abuse. That organ is immediately affected and I am glad that I asked a noble Lord who is a member of the medical profession to speak tonight. I shall be interested to hear his observations on that aspect.
There is, of course, risk to every organ and system in the human body. Women are particularly at risk. They are drinking increasingly as public houses become more attractive and because they have more time available to them. There again, I hope noble Lords will speak about that aspect. Because of their size, their body weight and the disposition of their organs they are vulnerable to concentrations of alcohol much more quickly than are men.
Heart disease can arise. The heart muscle is affected by alcohol, not to mention the brain, the memory, and so on. In addition, and very important to most people—I hope still to your Lordships—there is the question of sexual activity and virility in men. That is very much affected by alcohol abuse and, of course, further social problems follow. I shall not bore your Lordships with more examples from the list—it is endless. Everyone realises that the problem must be faced.
For those who are not moved by the examples I have given of the physical and social effects I put the matter in economic terms, which may appeal to others. The cost of alcohol abuse throughout the country is astonishing. On the latest count the bill for industry alone is £1·5 billion. That figure comes from the Centre of Health and Economics at the University of York—an institution from which the Government draw their statistics. That figure covers absenteeism, accidents at work, people who have to end their working life prematurely, and so on. The cost to the National Health Service must be nearly £100 million, and is probably more. The trouble is that many incidents are probably not reported, but I am sure that the figure is not less than that.
Traffic accidents are another scandal in our society and, again, I suggest that we have not faced that aspect head on. We complicate the problem with all kinds of arguments. We delay action and the tally becomes greater and greater. Christmas is approaching and I suggest to your Lordships that the accident rate will again be a horrifying figure. There is also the cost of criminal investigations into crimes related to alcohol.
Having given your Lordships this catalogue of misery I wind up my speech by saying that I believe that this is an urgent matter which must be dealt with properly. I was interviewed on a London radio station today. I was asked—and I was glad the question was put to me—whether I drank. I said that I did and that I drank normally. It is a significant that many people who now drink normally, who live normal lives and who do not abuse drink but drink in a way that is socially acceptable, are interested and concerned about alcohol abuse. We no longer want it to be the preserve of abolitionists, helpful though they are in their contribution to the state of alcohol abuse in the country. It is important that people who are normal drinkers should take up the cause and help to push forward a new approach, a new view and a new realism as regards alcohol, to children, the unwary, the uneducated and the vulnerable. My Lords, I beg to move for Papers.
6.19 p.m.
Lord Campbell of Croy: My Lords, I applaud the decision to have a debate on this subject this evening. I am sure I speak for all who heard the noble Viscount in thanking him for having made this possible. He spoke cogently on the subject and I support his views entirely. My contribution will, I hope, be to add some comments to two or three of the elements of the subject in pursuing what the noble Viscount said in general. I propose to do this under two headings. The misuse of alcohol arises because of circumstances and requirements which are different for each. My first heading is drink and driving, and my second is drinking to excess and drunkenness.
Under the first, the situation surely calls for the solution that no alcohol should be drunk at all when one is likely to be driving a motor vehicle. I do accept that a single glass of wine, particularly if of the dimensions complained of from time to time by my noble friend Lord Chelwood, would not do harm and would of course be within the limit under present legislation. However, surely the best solution is to drink non-alcoholic potions when about to drive a car.
This brings me to random tests, which are in the news again. This has been a subject which has been discussed for almost as long as the breathaliser has been incorporated in legislation. I remember in particular when I was in the other place a Bill being before Parliament. This was the 1966 Transport Bill, which contained provisions for random tests. There was then a general election and the Bill was lost; but when the Bill returned those provisions had been removed. Of course not many people noticed that, and those who had been against it were not going to complain. Clearly there had been difficulties for the government of the day, and I am sure many of those difficulties still exist.
Perhaps the best illustration of the kind of question which arose then is this: what do I advise my wife and daughter if driving on her own, when one or two persons try to stop her car at night in an unfrequented area? They appear to look like police but not convincingly so. In almost every other situation one's advice would be, do not stop. That was the kind of
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problem which arose and I think made it too difficult for the Government to continue with their proposals in 1966. However, for my part, I support the Government in further attempts to overcome such difficulties and to discourage drinking and driving.
My second heading is drinking to excess, drunkenness and alcoholism. These are damaging to health and the cause of social ills of various kinds of which the noble Viscount gave us some particulars.
I understand that a report has just been presented to the Home Office concerning young people under 18. Presumably it is as a result of investigation in England and Wales and not Scotland, as it is for the Home Office. That has happened in just the last day or so, and no doubt the noble Baroness, Lady Masham, will say more on this when she comes to speak, because I understand she chaired the committee. We shall no doubt hear the Government's proposals in due course, I hope soon, although there are important matters raised in the report.
In another place a licensing Bill has been introduced by the Government to extend licensing hours in England and Wales. There have been references to the reform carried out in Scotland 10 years ago. Because I was the Secretary of State for Scotland who initiated that reform in 1971, appointed Dr. Clayson and his committee and then received his report and started the action which led to the 1976 Bill, I might be able to help your Lordships with a few words on this subject.
I must say at the outset that there was a different situation in Scotland from England and Wales, and any close comparisons would not be valid. Nonetheless, I believe that the results of the changes in Scotland after 10 years' experience are worth looking at. Some misleading mythology may also be created unless the facts are recorded.
First, in 1971 my main concern when setting up the committee and then dealing with its recommendations was to avoid any increase in drunkenness. Before the reform, closing time in Scotland was early and there was an incentive to drink against the clock during the restricted hours. The Clayson Committee shared my view that relaxation of the hours would help to make drinking more civilised and relaxed and an accompaniment to social gatherings; in particular that men would take their womenfolk to pubs. In many parts of Scotland this had been unheard of—the pubs were drab drinking dens to which only men went.
We have the benefit of a survey by the Office of Population, Censuses and Surveys, the OPCS, on the first eight years of the reform in Scotland. The main findings are, first, on consumption, that men are now drinking about the same amount as they did before. That women are drinking about 35 per cent. more but that they are still drinking over three times less than men. The effect in relation to women, the 35 per cent. increase, may be surprising to those meeting it for the first time. However, it was not surprising to me and to those others concerned with the Clayson Committee's recommendations. It was part of the new sociable drinking which we hoped would evolve that more women would be included and they would therefore be drinking more.

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Consumption was of course spread over more time. I am glad therefore that the OPCS was able to report that drunkenness had decreased, and the records since 1976 confirm that. There was a change in prosecution procedures in Scotland in about 1980, so that it is not possible to make precise comparisons, but nonetheless the figures are very reassuring. Those of us whose homes are in Scotland have been able to observe during the 10 years that there has been an improvement. Three-quarters of those interviewed by the OPCS during its survey said that they considered that the new licensing hours were an improvement on the old ones.
There have been suggestions that health in Scotland has suffered. However, here a detailed study by the specialist alcohol unit at Edinburgh University concluded that the effect of the change in licensing law had been neutral. That was reported at the end of 1985 and a summary was published in the British Medical Journal in January 1986.
Should alcohol be sold or drunk at all? I have given my views on driving. At other times in daily life I believe this is a matter of choice and, like the noble Viscount, that it should be in sensible quantities. I do understand those who drink no alcohol on principle, although I do not share their attitude, in the same way that I understand vegetarians. However, there are other stimulants. When on a visit to Salt Lake City I was made very much aware that some, if not all, Mormons do not drink coffee or tea because they are stimulants too.
When I was in the other place and speaking on the exports and industrial health of the distilling industry I invariably reported the general advice which I have received from the medical profession that for a normal person whisky is an excellent beverage, taken of course in moderation. There were probably more distilleries in my constituency where my home is in Northern Scotland than in any other constituency. Paradoxically my own surgical and medical troubles of the last 42 years have meant that I cannot myself drink whisky.
I hope that the Government and everyone else in a position to exert influence will give very high priority to reducing and eliminating the misuse of alcohol.
6.30 p.m.
Lord Dormand of Easington: My Lords, the first debate I heard when I came to your Lordships' House three weeks ago was on the procedures of the House. One matter that soon became clear was that shorter speeches would not only be welcome but would add to the efficiency of your Lordships' House. For the past six years it has been my privilege to be chairman of the Parliamentary Labour Party. During that period, one of my continuing tasks was to encourage shorter speeches at meetings of the Parliamentary Labour Party. Bearing in mind those experiences, I hope that the brevity, at least of my first contribution to your Lordships' deliberations, will be welcome.
I congratulate the noble Viscount, Lord Falkland, on calling attention to what must surely be one of the most serious problems of our society today. In the short time that I intend to take, I shall deal with only
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one aspect of alcohol abuse, that of drink driving. I am glad that the noble Lord, Lord Campbell, dealt with that matter because I feel that it cannot be referred to too often. There is no doubt that there is increasing public concern about the effects of drinking and driving and a feeling that the present law is inadequate. Of course, as soon as anyone suggests, as I intend to do, that there should be a change in or a tightening up of the law, there will be protests, understandably, about further restrictions to civil liberties and human freedom.
We cannot support the retention or the extension of freedom for some people in our society if the interests of others are damaged by it. I said "damaged". In the context of drink driving, we can use the word in its literal, physical sense. Last year, 1,100 people died as a result of drinking and driving. That rate has continued so far this year. We can say with some certainty that during our debates in your Lordships' House today, four more people will be killed as a result of drink driving. Last year there were 47,000 casualties, 50 per cent. of whom had not been drinking or driving. Again, in 1986, 61,000 drivers were given roadside breath tests after a personal injury accident and no fewer than 12,000 failed the test. Those figures are the official Department of Transport statistics.
In this country deaths arising from drinking and driving are three times greater than deaths from murder, drugs and acts of terrorism. I have mentioned drugs. I shall repeat something that the noble Viscount said. I find it difficult to understand why the Government should devote so much time, energy and resources to the drugs problem, policies with which I entirely agree and fully support, while at the same time paying less attention to the much more widespread problem of alcohol abuse. Alcohol kills 10 times as many teenagers as does heroin. A few moments ago I gave some horrifying statistics about deaths and injuries caused by drink driving. I could give more.
The real horror of those figures can only be appreciated in personal terms. We must think of our wives, our husbands, our sons, our daughters and our grandchildren being killed or perhaps confined to a wheelchair for the rest of their lives. Of course we all say to ourselves, "Yes, it is terrible, but it will not happen to us". I have not the slightest doubt that the relatives of those 1,100 people killed every year said exactly that before they lost their loved ones. I think too of those people when I hear that stupid but chilling phrase, "I drive better when I have had a drink or two".
One in three of the drivers killed on our roads had excess alcohol in their blood. In the face of the frightening and overwhelming evidence, some of which I have given, I find it deeply worrying that the Government are not doing more to combat the problem of drink driving. I know that Ministers point to their publicity campaigns. I do not object to that, but by themselves they have been largely ineffective. Within the past few days I have seen an estimate that next month the drinks industry will spend £20 million encouraging us to drink more over Christmas. The total budget of the Department of Transport on safer drinking for a full year is £2·5 million. Those figures

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speak for themselves. Something much more fundamental must be done if the number of deaths and injuries is to be reduced. It should take the form of a change in the law. The scale of the slaughter—I have to use that word—is now so great that random breath-testing must be introduced.
The Minister will no doubt tell me that legislation to deal with this matter already exists. He will say that Section 159 of the Road Traffic Act 1972 authorises a constable in uniform to stop any vehicle, and that Sections 6 and 7 of that Act reinforce the position. Those sections deal with the testing of breath, blood and urine. That of course is the position. With the sheer scale of drink-related deaths and injuries on our roads, I fail to see how anyone can say that the present law is a sufficient deterrent. Random breath-testing can of course take various forms. I do not intend to go into them in detail, but I wish to emphasise one point. Drivers must be made aware that there is a considerable certainty of being tested. That will be the greatest possible deterrent against over-limit drinking.
The evidence in some countries is abundantly clear. It is that an easily seen and specialy marked police presence at the roadside will reduce drink driving. I emphasise that it is necessary for drivers to know that such units are there for random testing. That is the crucial aspect of the matter. As a matter of urgency the Government should look at what is happening in other countries which have random breath tests. They should study what is happening in Australia, Finland, New Zealand and the United States of America. Ministers could not fail to be impressed by what they see.
Ministers should listen to the British Medical Association, the Guild of Advanced Motorists, the Parliamentary Council on Road Safety, the Road Traffic Committee of the Magistrates' Association and many other organisations, which I could name, that have studied and support random testing.
I know that the Minister in another place who has special responsibility for this matter constantly says that the main aim must be to change the public attitude towards this evil. I greatly admire the efforts he is making on this issue. I do not for a moment deny the importance of changing public perception, but the evidence is that random testing will do more to bring about that change than any other measure.
Shakespeare, as always, had a comment. In Henry V one of his characters says:
"I would give all my fame for a pot of ale and safety".
I doubt whether the word "safety" meant road safety, but in the context of this debate it is true, and a statement which we would all do well to ponder.
6.40 p.m.
The Lord Bishop of Gloucester: My Lords, I am sure that all Members of this House would wish me to begin with a word of congratulation to the noble Lord, Lord Dormand, on the maiden speech we have just heard with such interest. His long experience of the processes of Parliament and passionate concern for society came through unmistakably and must be
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the herald of good things to come. I venture to hope that he will not be too obsessed with brevity in future speeches.
I welcome the debate and thank the noble Viscount, Lord Falkland, for introducing it. It comes at an appropriate moment. There are signs that the nation in general and the churches in particular are becoming increasingly aware of the misunderstandings and dangers associated with this drug. I am sure that the churches warmly welcome the recent creation of the interdepartmental group of Ministers and civil servants.
The charity, Alcohol Concern, is currently calling for a 12-year campaign for safe drinking between now and the year 2,000, with achievable objectives such as a ten-fold increase in the expenditure on alcohol education, and a reduction in the permitted level of alcohol in the blood for drivers to at most 50 milligrams. Such objectives must surely have wide support.
The Roman Catholic Church and the Methodist Church have both published this year reports of their own working parties on the problem of alcohol abuse. The Church of England Board for Social Responsibility will produce a similar statement next month. There is undoubtedly a rising tide of concern and anxiety in many quarters, but near the heart of the problem are the largely unexpressed assumptions that we make about alcohol, both corporately and as individuals. They are assumptions which are often affected by misunderstanding.
For example, many believe that the problems connected with alcohol are confined to a small minority of heavy drinkers. That is not so. The fact is that a much larger number of what I suppose most of us would call moderate drinkers are seriously at risk themselves and may well be putting many others in the community at risk as well. We have to take account of the fact that the overall consumption of alcohol in our country doubled between 1950 and 1980. That cannot be ascribed to just a few people drinking to excess. The tide that is rising is not merely a tide of concern. It is alcohol itself which is gently pervading the common life of our society like a rising tide.
I believe that the most reverend Primate the Archbishop of York caught the reality of what is happening in some sentences he wrote in August of this year in a message to his own diocese. I beg leave to quote from the message. He wrote as follows:
"The vast majority of the population use mood-changing substances of one kind or another for a whole variety of purposes—to wake them up, to slow them down, to relieve anxiety, to act as a social lubricant, for kicks, pleasure, a means of escape or because the substance, whatever it is, has made escape impossible. Some substances like tea and coffee are virtually harmless in normal quantities … some drugs come with the sign of medical approval yet can create dependency every bit as damaging as the much more dreaded … illegal drug. But paradoxically the real killers are substances which still carry a high degree of public acceptability—tobacco and alcohol. Alcohol is as old as civilisation and its use has been hedged around by … many social conventions. In many contexts it can be used responsibly and enjoyably. But in contexts where social conventions are changing or breaking down, or where the inducements towards excess are strong, the results can be devastating.
We live in such a context today. Social habits have changed. A drinks cabinet in the living room, drinks before meals, drinks during meals, drinks after meals, a little stiffener between meals and an

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evening out at the pub are widely familiar and accepted parts of our social scene. And yet those whose instinctive reaction in a crisis is to gulp down something strong are likely to be the first to react in horror if their children are caught taking 'drugs' … I am not saying that alcohol is worse than other drugs, or more dangerous, only that there is a lot more of it around. Its excessive use is one of the major factors in crime, domestic misery, accidents and premature death".
There is clearly a religious dimension. Christians believe that alcohol is a part of the natural creation and is not therefore in itself evil. The Bible itself is ambivalent. The prophets rail at drunkenness but the psalmist can praise the wine that maketh glad the heart of man. But as with so much else in God's creation, it is within the exercise of our freedom to use it either creatively or destructively, either to enhance that enjoyment of life which is God's will for his creatures or to debase ourselves and endanger others. It is a matter of freedom, and the freedom is ours. In the end surely the way forward must be through education and not through restrictive legislation, though that will certainly have a part to play.
Everyone ought to know the basic facts about alcohol. One unit is the amount the normal body will process in an hour. We ought to know how many units there are in our pints of bitter, our glass of wine or our double whisky. Would it not help if this information always appeared on bottles and cans sold in shops and supermarkets? When we offer drinks to others can we increasingly remember to offer an attractive alternative to alcohol as a rule of our domestic and family living? There are at present too few firms in business who supply non-alcoholic wines and other drinks. But if demand increases, no doubt the trade will increase with it. Might we not come to expect an alternative to be offered to us without having to ask for something non-alcoholic when we are guests, or on the menu when we go out for a meal?
I regret to say that the churches themselves are not always guiltless in this matter. It is sometimes possible after a confirmation service or before a flower festival to be offered wine and cheese and nothing else—and here is a Bishop who intends to put that right in his own diocese at least!
It is not impossible for social trends, even deeply entrenched ones, to be reversed. We have seen it with smoking. We are seeing it with our habits of eating. A more disciplined and responsible attitude to alcohol is within our reach. I hope that the net result of this debate will be to encourage and strengthen those good people in our society who are working towards that very end.
6.49 p.m.
Baroness Masham of Ilton: My Lords, I also congratulate the noble Lord, Lord Dormand of Easington, on his excellent maiden speech. Yesterday at the Standing Conference on Crime Prevention I introduced the report of the working group on young people, alcohol and crime. The debate of the noble Viscount today is most fortuitous as I can now recommend this report to your Lordships. I thank the noble Viscount for this opportunity.
Over the years I have witnessed at first hand some of the horrendous results of alcohol abuse. I married
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into a family where one member was an alcoholic. She was intelligent and attractive and had both medical and experienced voluntary help by experts on the treatment of alcoholism. Nevertheless she died a tragic death due to her problem. Alcohol can be a greater problem to the female sex.
When I was working with a friend we became involved with a man whose personality and brain had been so damaged by alcohol abuse that he had no control over his actions. On one occasion he approached us with a carving knife. The sharp end of abuse can be very sharp indeed.
On another occasion a drunk man entered my car and it was only due to an eight-year old child in the back that I managed, with some difficulty, to get him out. This year I met a casualty of a brutal, heinous attack. Rob, a man in his thirties, was taking his dog for its evening walk in Worthing when he was set upon by two young men at closing time. They beat him up, breaking his neck. The two girls with the attackers were so horrified that they reported the men to the police. Rob remains paralysed today from the neck downwards. But for his fortitude and the wonderful treatment at Stoke Mandeville Hospital spinal unit he most likely would be dead. The two attackers have been sentenced to seven years and 15 years in prison.
Only a few weeks ago our son went to the help of a security guard in Piccadilly when four drunk Americans were beating him up. Our son, also doing security work, was thrown down some stairs, sustained a head wound, a suspected fractured skull and a wrenched shoulder. There is a growing number of such casualties flooding into our overpressed hospitals. I am sure that many Members of your Lordships' House could tell tragic tales due to the abuse of alcohol. As a country can we afford to sit back and do nothing about it? On the whole Britain is a law-abiding country, but now when alcohol takes over violence and disorder take control.
The committee on young people and alcohol recommends that the law needs tightening up. The aim of crime prevention is to deal with problems before they reach the stage of criminality. Throughout the country there is increasing concern about under-age drinking. The younger the children start drinking, the more dangerous it is to their health. By the time they reach the late teens and early twenties they are drinking at a serious level, which is shown by the peak reached at 18 by the rate of "guilty" findings or cautions for drunkenness per 100,000 population. This is shown in our report.
Earlier this year the Home Secretary asked me to chair the working group on young people and alcohol. Our group consisted of a brewer, a member of the retailers' association, a psychiatrist and a member of the Health Education Authority, a director of social services from Wales, a chief probation officer, a head teacher, a chaplain from youth custody, a youth adviser, a member of the Salvation Army, a chief-superintendent of police, a solicitor and clerk to the justices, a member representing ethnic groups, a paediatrician from Wales and our civil servants from the Home Office who were most helpful and diligent.

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The group, representing so many interests, worked extremely well together and we soon discovered what an immense problem under-age drinking has become, how confusing the present law is and how difficult it is to implement. We found that, apart from some splendid initiatives such as Bentley's Night Club at Stockton-on-Tees and Sunderland, the Pop-Inn at Manchester, the Parrot and Palm Club at Worthing and West One at Welwyn Garden City—these are disco-type clubs for young people and they are alcohol-free—there are not enough attractive youth facilities to draw young people away from the alcohol/pub culture. Some pubs are now taking a responsible attitude by providing family rooms where non-alcoholic drinks are available. We were encouraged at the increase in non-alcoholic wines and beers and hope that these will become easier to obtain from the small retailer.
I have written to both Houses of Parliament suggesting that they provide a choice of nonalcoholic wine. They already have beer. Many young people visit your Lordships' House. Sainsburys has brought out a booklet on responsible drinking. If this attitude is spread around the country there is hope, but if society's attitude is to turn a blind eye to underage drinking, I am sure that the increase in various crimes will penetrate down the age groups, as shown by the revealing recent "Panorama" programme.
Young people watch television and go to the cinema a great deal. The other day my general practitioner went to the cinema and an advertisment was shown about the dangers of heroin. The very next advertisement was an alluring one promoting some type of alcohol. Many of the advertisements are group-watched and aimed at young people, even though there is a law stating that advertisements for alcohol should not show people under the age of 25. Because of the scale of the problem our group concluded that television and cinema advertising of all alcoholic drinks should be banned.
We were alarmed that the recently-published Government proposals for a national curriculum failed to acknowledge the central importance of health and social education programmes in schools. We urge the Government to ensure that health education is given proper prominence in the national curriculum. We recommend that the DHSS should give urgent consideration to the appointment of serving teachers from the primary and secondary sectors to the Health Education Authority. We hope that the Government will consider a health warning on alcoholic drinks such as that carried by cigarettes. Education is a long process. Attitudes will not change overnight.
Our report has 50 recommendations but time does not allow me to go through them all. Any of your Lordships who are interested can obtain a copy from the Printed Paper Office or the Home Office and I have had copies placed in the Library. To make the law readily understood and reasonably consistent we recommend that the purchase or consumption of alcoholic drinks in all parts of licensed premises, registered clubs, wine warehouses, hotels and restaurants by those under 18 be made illegal. We hope that the consumption of alcohol in public places
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by people under 18 will also be made illegal. In the city of Coventry there has already been an application for bylaws to make this possible and the Home Secretary is looking into it.
We recommend that the sales of alcoholic liquor be made by or effectively supervised by people aged at least 18. Where alcohol is sold or supplied to or for under-aged persons the onus should be placed upon the licensee to prove to a court that all responsible steps had been taken to prevent the offence. We recommend various codes of practice and training for magistrates and that a standard code of licensing practice be established for the guidance of licensing justices and licensees. More training is a theme which runs through the report for all people in positions of responsibility involved with alcohol. The Home Secretary has told us that the report will now be considered by the committee of the right honourable John Wakeham in another place. I hope that many of the recommendations will be acted upon. We owe that to our young people and to their future. Alcohol has become a problem in all sections of society. There are tragedies within the homes of some ethnic groups who need counselling and support from people who understand the culture.
There are serious problems from public schools to inner-city housing estates. To tackle these problems we need concerted efforts by local communities, both statutory and voluntary groups working together. I hope that your Lordships will do something about encouraging responsible drinking so that we have a safer and more stable society to live in.
7 p.m.
Lord Whaddon: My Lords, excessive drinking is a curse on the addict and his family and a grave burden on the whole of our society. There has been a great deal of debate on just how many deaths and injuries are caused by excessive drinking. The Scottish whisky distillers organisation has questioned the estimates of the general practitioners. The general practitioners consider that 40,000 of our people a year go to an early grave because of alcohol addiction. The distillers disagreed with this, but then they would, would they not?
My own feeling is that the doctors are likely to have the better of the argument. But whether that figure is exact or whether it is not certainly tens of thousands of our countrymen go to an early grave each year through road accidents, by suicide, by murder, by fire, by cirrhosis of the liver, all of which show a close correlation with the amount of drinking.
In addition it is generally recognised that there are 750,000 people in the country with a serious drink problem. It occurred to me that 750,000 drunks means 750,000 familes who suffer from a bad drinking problem, which means that 2 million-plus of our people are constantly living under the shadow of the bottle. When a man or woman is a constant drinker the family life is also ruined.
What about the economic cost? We spend a lot of time in this House and in another place considering how we may cut down the loss to industry from strikes, and rightly so. And yet alcohol causes five times the loss of industrial production as do all the

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strikes put together. Yet where is our priority? How much priority do we give to discussing this in Parliament?
There is one special aspect which horrified me the other day when I learned of it to which I should like to draw your Lordships' attention, and that is some work recently carried out by Professor Kaufman of Edinburgh University. We have had some dreadful examples given tonight of the effects of overindulgence in alcohol by adults and by young people, but Professor Kaufman has carried the work to an earlier stage.
He points out that it has been known for a long time that women who drink heavily during pregnancy are liable to cause foetal alcohol syndrome in newly-born children—low weight, and mental retardation. But Professor Kaufman has studied even earlier developments and found that the conceptus—the newly fertilised egg cell—and even the egg cell before fertilisation suffer serious damage from alcohol drunk by the pregnant woman or even the woman before she becomes pregnant. The damage is quite horrifying, because there is a distinct link between the amount of alcohol and damage to the cromosome numbers in the egg and in the conceptus. This, as your Lordships will be aware, leads to the most dreadful, crippling syndrome in the newly-born child. It is a dreadful burden on the child and on the family.
The lesson is clear. The conceptuses which are so damaged are in most cases automatically aborted; but quite a number come through to become crippled children. What can we do about it? There is no cure, only prevention. Women must realise that throughout their fertile years they must cut down on their drinking if they want to safeguard their families—and cut down even before they have conceived.
The media have a great part to play in the fight against excess drinking. The people of our country are bombarded with the most subtle advertisements. There is great pressure from the advertising industry, and there is great pressure on them from social quarters as well. It is expected in so many social circles that you should drink to show that you are a man; to show that you are sophisticated. We have to learn to counter that, and countering that attitude can only come by an attack from several points at once. The Government have their part to play; but simply passing a law against drinking is never likely to cure the problem. America showed us that during Prohibition. But the Government must nevertheless have a part to play. The media have in my opinion a crucial role which nobody else can replace.
I remember what must be 40 years ago seeing a film which has been in my mind ever since; "The Lost Weekend". It was a most dramatic film which hit the headlines in its time. It showed as it is the effect on a man and his family when he is in the grip of alcoholism. But where are the playwrights or the scriptwriters now? Where do we see on television the equivalent of "The Lost Weekend"?
Week after week "Coronation Street" shows the Rovers Return as a wonderful rendezvous for all the
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family. Many pubs are like that, but do not let us overdo it. When will "Coronation Street" show another pub with its filthy toilets, its filthy glasses, and its drunken people brawling and vomiting all over the place? Such pubs exist, and the media have a duty to show the other side of the coin.
We all have our part to play. Every leader of society, whether it be an employer, trade union leader, officers in the Army, police officers or teachers must set an example to those whom they lead. Employers must make it clear that they do not give priority in promotions to people who turn up at office parties and knock back more than anybody else; that if somebody turns up and drinks soft drinks they are as good as anybody else. It takes the real man to say no to alcohol.
We all have our part to play, and I should like to wind up my remarks by paying tribute to my noble friend Lord Falkland. In raising this topic this afternoon he has greatly contributed to the campaign that we should all be waging. The Government cannot get off the hook. They have to form a legal framework within which other pressures may be applied.
The prices for alcohol have been allowed to drift downwards in real terms and inevitably consumption goes up. We have seen this not only in the United Kingdom but in all countries in the world. It is imperative that the Government realise their responsibility to maintain and increase the prices. They should also consider carefully the law on advertisements. The noble Baroness, Lady Masham of Ilton, spoke of the dangers of advertising to the young. Yet, what do we see in last month's Drinks Retailer? In one column there is reference to an advertising campaign by one of the biggest distillers in the country. It is a new and expensive advertising campaign specifically aimed at the young. The article states that it is hoping to attract more younger drinkers by spreading the word about its well-established reputation as a brand of quality.
In another part of the magazine there appears a quotation from one of the main brewers which states that it has pierced the youth market and has aimed single-mindedly at 18 to 24 year-olds. Advertisements such as those are carving away the lives of our youngsters. The Government have their part to play in suppressing that kind of advertising activity because no-one else can do it.
The law on drinking and driving has been mentioned several times. I wholeheartedly support the need to reduce the 80 mg. level to 50 mg., as a start, and to introduce random breath testing. That is the only way in which we shall get a grip on the drunken driver. Health warnings should be printed on every bottle of alcohol, as with cigarettes; it is every bit as dangerous. Children should be instructed in the dangers of alcohol and tobacco as part of the compulsory school curriculum. This framework of legislation is necessary if the other social pressures, of which we are all aware, are to be applied to the vulnerable young people who will otherwise be the future victims.
I should like to congratulate my noble friend Lord Falkland. This afternoon he has helped the House in pointing out the hell that lies behind the statistics.
7.12 p.m.
Viscount Montgomery of Alamein: My Lords, like the noble Lord, Lord Whaddon, and other noble Lords, I congratulate the noble Viscount, Lord Falkland, on bringing the subject forward for discussion this afternoon.
All noble Lords who have spoken have mentioned the problem of alcohol abuse. It is a serious problem which needs studying. We know little about alcoholism. We need to know more about whether it is an illness, part psychological or part physical. Those subjects definitely require increased study.
In this debate most noble Lords have mentioned the different serious aspects of alcohol and its evils. I find that I shall be in a minority once again—as I frequently am in this House—by saying something about the benefits of alcohol and why it is perhaps not such an evil in many circumstances as has been made out. I believe that it is important to stress the other side of the coin.
I welcome this debate for another reason. Two weeks ago the Licensing Reform Bill had its Second Reading in another place. The Bill will come before this House in the New Year and it will have my wholehearted support. On Second Reading in another place the debate appeared to become confused by the subject of the misuse of alcohol and by the temperance bodies and other abolitionists. I think that our debate this evening will clear away some of the undergrowth and confusion and enable us to discuss the health aspect. Therefore, when we discuss reform after Christmas we can stick to the facts. I presume that it is for that reason that tonight we have a health Minister answering the debate and not a Home Office Minister, which will be the case after Christmas.
I should like to deal with alcohol in general. In this country 94 per cent. of men and 89 per cent. of women drink. It is part of the social fabric of our country, but I do not think that we are a drunken nation. My statistics and research reveal that according to the tables, the UK comes ninth in the consumption of beer, which is the most popular drink, it is 18th in the consumption of wine and it is 19th in the consumption of spirits. Within countries in a comparable economic position we stand near the bottom of the league in consumption. That is an important aspect.
In his interesting speech the right reverend Prelate took the increase in consumption from the base point in 1950. It is worth pointing out that the consumption figure for alcohol in the United Kingdom in 1950 was the lowest for 250 years. Therefore, if one takes that base point one will have some peculiar incremental statistics. Secondly, the right reverend Prelate quite rightly mentioned Christian philosophy. Noble Lords should be reminded that Christ's first miracle in Canaan of Galilee was to turn water into wine.
Turning to the medical aspect, there are deaths from alcohol-related disease, which is a terrible thing. I am informed that the incidence of cirrhosis of the liver is declining relative to the population. That has been so in Scotland since 1979 and I find it particularly interesting. I wonder whether there is any correlation between that and the reforms which
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were introduced in Scotland by my noble friend Lord Campbell of Croy. I believe that matter to be worthy of further study and thought.
There is good evidence, with which most medical practitioners will agree, that moderate alcohol intake is beneficial. It has much to do with preventing cardiac arrest; so there are benefits to be gained by moderate and sensible drinking, quite apart from the fact that it forms a vital part of our social fabric.
I do not believe that alcoholism is caused by public houses, hotels, restaurants and other leisure establishments. Nor do I believe that it is caused by the availability of alcohol in retail outlets where drink is available at more reasonable prices than in leisure establishments such as public houses. I am not sure that there is a direct correlation between availability and consumption. In many countries in Western Europe and elsewhere where regulations are far more strict, consumption is much higher and the problems are much greater. For example, in two countries of an advanced economy, Sweden and Finland, drink is more expensive, more highly taxed and less freely available and there is a greater incidence of drunkenness.
It is important to remove some of the myths in considering the problem. Several noble Lords mentioned the fact that when the United States of America indulged in total prohibition the results were catastrophic and the misery profound.
Another important myth which should be removed concerns advertising, which several noble Lords mentioned. I believe that, by and large, advertising by the drinks manufacturers is extremely responsible. Very strict standards of control are employed by the advertising industry. Advertising is not directed to increasing consumption; it is directed to increasing the brand share of a particular product. There is no evidence that any alcohol advertising is directed towards increasing basic consumption and that is also an important aspect which should be clarified.
I believe that controls on the supply of alcohol will not reduce consumption but will have quite the reverse effect. I also believe that people with alcohol-related diseases tend to be rather reclusive, do not go to public houses and are anti-social. Certainly from my experience, and from people in my family who I know to have had this problem, alcoholics and others who are considered to be alcoholics—if that is the right word to use and it is the word in common parlance—seem to be rather reclusive and anti-social. That is not to say that we do not need to know a great deal more about it.
Several noble Lords have mentioned the interesting fact that drugs, tobacco and problems associated with their use attract enormous budgets for research. Alcohol has always seemed to be something of an orphan. Problems have been ignored where they exist and there has been very little unbiased research into the causes of alcoholism. Like the noble Viscount, I should like to encourage the Government to provide more funds for research to be undertaken. I hope that the Minister will be able to say something more on that subject. However, we must not confuse necessary research into aspects of disease caused by alcohol and its abuse with the

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questions of where, when and how alcohol should be made available to the great mass of the British public. Alcohol is part of our national life and it brings considerable benefits.
7.20 p.m.
Lord Rea: My Lords, I, too, should also like to congratulate the noble Viscount, particularly on his remarkable sense of timing. The report of the noble Baroness's working party was published today and she has given us a very good, if brief, resume of its most important findings. Moreover the consensus statement of all the medical and surgical colleges of the United Kingdom was released on 8th November. That statement made 14 clear recommendations on reducing the damage caused by alcohol.
In the past two years important reports have been published by the Royal Colleges of Physicians, Psychiatrists and General Practitioners, together with reports from the British Psychological Society, the faculty of Community Medicine and the World Health Organisation. Anticipating the criticism of their new Bill to permit longer opening hours, the Government have set up the Wakeham Ministerial Group to look at the whole problem. I very much hope that that important group will take into account the views that have been put forward in this debate as well as the weighty evidence in the reports that I have mentioned.
From time to time royal colleges have a way of producing reports which urge governments to act. In 1726 the Royal College of Physicians submitted a petition to Parliament drawing attention to:
"the fatal effect of the frequent use of several sorts of distilled spirituous liquors upon great numbers of both sexes, rendering them diseased, not fit for business, poor, a burden to themselves and neighbours, and too often the cause of weak, feeble and distempered children".
I must say that that statement arose from the fact that at that time gin was being hawked around London at one penny a pint. The purpose of the petition from the Royal College was to try to persuade the Government to put a tax on gin and encourage people to drink beer, which was then less likely to be contaminated with sewage than was the water supply. Although the words were different in 1726 from the words of the royal colleges today, the message is the same: beware of strong drink and use it moderately.
I have to declare a fourfold personal interest in alcohol, one interest being positive and three negative. I admit to enjoying drinking alcohol and I think that I imbibe—I hope that is the right word—rather more than the allowed 21 units per week, which is equivalent to three bottles of wine. Sensible drinking is not only pleasurable in itself but enhances friendly communication between people.
A few years ago in the United States a study was undertaken on the effect of introducing beer, cheese and crackers on six afternoons a week at the Cushing Hospital for Old People in Boston. That study showed that the introduction of what was called "the cocktail hour" greatly reduced incontinence, greatly increased active mobility and completely abolished the need for sedation among the old people. It may have had those results because more staff joined the
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patients for their beer and cheese and thus increased personal contact with them.
Alcohol can be a most useful social facilitator, or perhaps I should say lubricant. I agree with the noble Viscount, Lord. Montgomery, that there is evidence of a beneficial effect of light to moderate consumption of alcohol on the prevalence of arterio sclerosis and coronary heart disease. However, if one drinks more than a certain amount above the permitted or suggested levels, one starts running into trouble.
My negative experiences of alcohol are very powerful. My family has suffered severely through excesses of alcohol—and I admit to them being my blood relatives and not relatives by marriage, as mentioned by the noble Baroness. One relative has died from cirrhosis of the liver, having previously made a suicide attempt by threatening to jump off Westminster Bridge. Another relative killed himself at the second attempt, after he had lost a prestigious and well-paid job as a result of excessive drinking and his consequent unreliability. The health of two other members of my family suffered severely from alcohol dependency, although they eventually died from other causes.
I belong to a profession that has a high incidence of mortality from cirrhosis of the liver caused through heavy drinking. The mortality rate for doctors is exceeded by that for only a few other trades; examples are those who are engaged in the drinks and catering trade, those who go to sea and journalists or people in the advertising trade. I do not mention the health of Members of Parliament because they are too few in number actually to be classified by the Office of Population Censuses and Surveys. The stress of looking after the severely sick or of witnessing death has often been held to be the cause of the heavy drinking habits of doctors, although the reasons are probably more complicated and may be due to the tradition of heavy drinking which starts in medical school. Nowadays the heavy drinking that exists among some junior hospital doctors can, I think, be laid at the door of the long hours which they work in inadequately staffed wards.
My main negative experience with alcohol comes in my daily practice. Every day I see the results of excessive drinking. Even so, a number of heavy drinkers are not aware that they are in danger and do not come to the doctor until they suffer a complication, when it may be difficult and sometimes impossible to reverse the damage. There is thus a real need for doctors to obtain a "drinking history" from every patient who comes to them for whatever reason. Today people are more ready to give that information and the techniques for obtaining it are described very well in the report of the Royal College of General Practitioners which I have mentioned and which is entitled Alcohol, A Balanced View.
However, many patients do come asking for help with their drinking problem and there is a great deal that GPs can do, especially in conjunction with counselling, rehabilitation services and detoxification facilities. All those services are in need of expansion and better funding and I must say that I think it would be money very well spent, because of the

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enormous costs that excessive drinking of alcohol imposes on society.
I suggest that the importance of alcohol consumption as a health problem should be given much greater emphasis in both undergraduate and postgraduate medical training. The report from the Royal College of General Practitioners which I have mentioned gives great weight to promoting education of the profession and to health education more widely of the public in general. As many speakers have already pointed out, as a nation we are woefully ignorant about the damage that is done by alcohol to our physical health. If time permitted I could spell out an uncomfortable list of serious diseases caused by heavy drinking. However, I will spare your Lordships, and the highly skilled, hard working Hansard writers, whose Latin and Greek may well be a little rusty. The Office of Health Economics, as has already been mentioned, has estimated that 2 per cent. of the adult population—over 700,000 people—are problem drinkers who are already in deep psychological, social or physical trouble. Another 3 million—that is, 8 per cent., of the adult population—are drinking more than the recommended safe levels.
The social cost to industry, the National Health Service and the law and order services—if I may call them that—has been estimated at £1·6 billion in 1983 and now it is much more likely to be over £2 billion. This figure is considered to be an underestimate. Much of the damage to family life is almost impossible to assess in financial terms. There is a great need for more research—and here again I agree with the noble Viscount, Lord Montgomery—into the extent and nature of the effects of alcohol.
One survey found that 25 per cent. of all male hospital in-patients had alcohol-related problems. This implies an enormous cost. Another 32 per cent. of casualty attenders had excessive levels of alcohol in their blood.
It must be said that our main health problems today are all connected with unhealthy lifestyles. Cigarette smoking tops the list as the greatest of the merchants of death, accounting as it does for around 100,000 deaths annually. Alcohol, while it causes fewer deaths directly—only about 4,000 mentioned on death certificates—does cause more social havoc and contributes to many other illnesses not directly or obviously due to alcoholism itself. These deaths, as has already been mentioned, have been estimated by one body of the medical profession as amounting to 40,000. In fact, there is so much leeway in the estimates that it backs up my other request for further research: we do need to know much more about the effects of this drug.
Individuals themselves need help to change their lifestyles. Here I would disagree with the right reverend Prelate. Education, alone, is not enough: incentives, both sticks and carrots, are needed as well. As regards alcohol, I feel that the best combined stick and carrot that the Government have at their disposal is the excise duty. In other countries—and here I must disagree with the noble Lord—putting up the price has caused a reduction in consumption. In this country there is a fluctuation which shows that there is an effect when prices are put up. This applies
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to all levels of drinking: heavy drinkers and light drinkers.
I suggest that a price increase would be a carrot because money that is not spent on drink can well be spent elsewhere. It will be a stick if the price of alcoholic drinks rises more than the real rise in earnings. Such an increase would have to be several percentage points above the retail price index. As has been pointed out, the hours of work needed to earn the cost of a bottle of whisky now, are only about half what they were before the war. But if this is done I would emphasise that the price of cigarettes should also rise correspondingly, otherwise one evil will simply tend to supplant another.
I should have liked to say something about drinking and driving, but my noble friend Lord Dormand of Easington, in his very cogent maiden speech, has argued the case so well that I need say nothing more except that I thoroughly agree with all his remarks.
I would commend to your Lordships this excellent consensus report from the royal colleges, and I am sure that the Minister has already seen it. The report makes 12 recommendations, of which the tax increase that I have mentioned is one. I hope that the Government will respond positively to this document and likewise to all the other suggestions of noble Lords this evening.
7.35 p.m.
The Marquess of Headfort: My Lords, I am grateful to the noble Viscount, Lord Falkland, for putting down the subject of alcohol abuse this afternoon. I also view with alarm the increasing amount of alcohol abuse that we see everywhere in the British Isles today and in particular with young people.
To my mind it is no wonder that many more young people are tending to drink heavily when their sight is bombarded by frequent advertisements on television, in magazines, in newspapers and on advertising hoardings. These advertisements all tend to tell the same story: that to enjoy life all that is necessary is to drink some spirit or other, wine or beer.
I would ask the noble Lords in this House what then can be done? Obviously better education in schools by showing films on the disease of alcoholism—because that is what it is—may help to inculcate some caution in those who have the opportunity to see such films. However, nearly all of us in this House know of a friend or associate, possibly even a member of our own family, who suffers from alcoholism to a greater or lesser degree. How can we help these unfortunate people? We know from the medical profession that the ultimate end of the chronic alcoholic is almost invariably either insanity or death.
However, there is one strong ray of hope for the hundreds of thousands, maybe millions, who suffer from drink problems. This is the fellowship of Alcoholics Anonymous. This fellowship was founded in the mid-1930s in the United States of America by two professional men, one of whom was a doctor. Both these men suffered severely from continuing

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bouts of alcoholism. From those early days the fellowship of Alcoholics Anonymous has grown immensely, spreading to nearly every country in the Western world.
All that it is necessary for the chronic alcoholic is to telephone the nearest Alcoholics Anonymous centre—the addresses of which are in the Yellow Pages, the telephone book or can be obtained through directory inquiries—and simply ask for help. AA members, who may only a few years or months previously have been in the same situation as the person in trouble, will come around to where the sufferer is and explain to him or her about the fellowship of Alcoholics Anonymous. They will arrange for him or her to attend a meeting and subsequently other meetings where they can meet other members who have cured themselves from and got over their drink problems through the practice of what I suppose is really group therapy. However, it is not only group therapy; there is also a schedule of 12 steps contained in a book which you are supposed to read, understand, do and then ultimately discuss.
Eventually the desire to drink leaves them. It is definitely a policy of abstinence and it is not a question of teaching you to drink normally. Many people who go to Alcoholics Anonymous say, "I am beginning because I am going to be taught to drink properly, not get tight, and cause embarrassment". That is not the point; it is to teach you abstinence.
I have discussed this matter with many people in the medical profession and those who have experience of attending Alcoholics Anonymous meetings—either because they needed it themselves or because they wanted to give a lecture and pass on their medical knowledge to the members—say that in their opinion it is the only thing which really works properly in regard to this problem.
The members of Alcoholics Anonymous will also take the new person and guide him or her if that should be necessary, to enter a hospital or nursing home in order to be dried out under medical supervision, because there are problems when somebody has been drinking very heavily if he is taken off it all at once.
I should like to conclude by adding my congratulations on his maiden speech to the noble Lord, Lord Dormand of Easington.
7.40 p.m.
Lord Ennals: My Lords, I first congratulate the noble Viscount, Lord Falkland, on introducing this debate and linking it with the day on which the report of the noble Baroness, Lady Masham, came out, so close to the time when a Bill is to be debated in another place. It was extremely well timed. I want also to express my very sincere thanks and congratulations to my noble friend Lord Dormand of Easington, who gave an outstandingly good and very moving maiden speech. He always used to be fed up with my speaking in another place, but I shall look forward to his speaking here.
The noble Viscount, Lord Montgomery, mentioned in his opening remarks that he thought he would find himself in something of a minority. I think
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that is true and I am rather happy that he is in a small minority in the circumstances, because concern has been expressed in all parts of the House about alcohol abuse. I emphasise that we are not talking about moderate, sensible drinking. Many of us have admitted that we are moderate, sensible drinkers; I am one. But we are talking about those whose drinking habits are not moderate and are often dangerous.
I want to sum up the facts as I see them. The facts are not as the Scotch Whisky Association—I was going to say Whisky Galore—sees them or as the noble Viscount, Lord Montgomery, does. I see them as follows. Roughly 3 million people, or about 8 per cent. of the population, are heavy drinkers. Even more, 25 per cent. of men and 8 per cent. of women, drink more than the recommended safe levels, thus increasing the incidence of heart disease, excessively high blood pressure, breathlessness and other medical conditions. The medical evidence is absolutely overwhelming. I am glad that reference has been made to the consensus statement signed, so far as I can see, by all the medical colleges, as well as by organisations like Action on Alcohol Abuse, Alcohol Concern, the Faculty of Community Medicine etc. It was a remarkable statement and I shall touch upon its recommendations later.
The Royal College of Physicians in a different report puts deaths due to excessive alcohol at about 35,000 a year. The Royal College of General Practitioners in its calculations suggested that in addition to 80 per cent. of deaths from chronic liver disease, alcohol accounts for 40 per cent. of deaths from injury and poisoning, 12 per cent. of deaths from digestive diseases, 11 per cent. from respiratory diseases and 12 per cent. from heart disease. These are very high figures, which no one can simply ignore.
If one looks at another field, police and Home Office evidence has established that alcohol is a factor in, they suggest, 45 per cent. of violent crimes, 50 per cent. of all murders and 20 per cent. of child abuse cases. The figures also show that 78 per cent. of assaults, 67 per cent. of incidents of domestic violence and even 44 per cent. of cases of theft are connected with alcohol. That is Home Office evidence.
The Department of Transport concludes that one-quarter of all road deaths are alcohol linked in some way or another, as are one-third of domestic accidents, 40 per cent. of fires, 20 per cent. of drowning fatalities and two-thirds of attempted suicides. All those are linked with excessive alcohol.
We also have massive work loss. This is not just a class factor. You can see it across the whole spectrum of people who extend their lunch break to more than an hour, drink as much as they can during that short period and in the afternoon are too sleepy to concentrate effectively. They cause more accidents, they are more inefficient in their work, they are slow and they are clumsy. That applies whether they are at management level or on the work floor.
I wondered what was meant by the Home Secretary when he was talking to the Licensed Victuallers Association in October last year. He said:
"The essence of it is that the dead afternoon makes no sense in British society in 1986".

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He went on to explain why he was going to introduce a Bill. But we do not have a dead afternoon; we have a drinking afternoon, which leads to more deaths later and a great deal of tiredness and inefficiency. I do not understand why the Government have chosen this time to introduce the measure that they have.
The costs to the health service are well over the £100 million mark, which must be of great concern to the Minister at a time when the health service needs all the cash it can get, quite apart from the social costs in terms of cruelty in the home, broken marriages, damaged children, rape and child sexual abuse. The Centre for Health Economics at the University of York put the quantifiable cost of drink abuse at nearly £2,000 million last year. That is across the whole spectrum of transport, health and social affairs.
The Government know all this, because most of the facts come from government sources. They also agree that something must be done. In fact they have set up a committee of representatives of government departments to look at the problem. The noble Baroness, Lady Masham, and her committee have looked at what I think is the most serious problem of all, which is young people. Sixteen year-old boys are now at greater risk than middle-aged men. That is a new factor which we have to take into consideration.
A recent study by Exeter University found that 11 per cent. of 14 year-olds interviewed in a random survey had consumed the equivalent of 10 pints of beer the previous week. This is a very frightening thought when one is talking of children of 14. A recent survey on BBC "Panorama" showed that half the weekly income of youngsters aged 15 to 17 was spent on under-age drinking. I have not read the noble Baroness's report, as I have not had an opportunity to do so, but I am sure that those facts were available to her and that they led her to the conclusions that were reached.
Mr. Norman Fowler, when Secretary of State for Social Services in February 1978, said:
"A change in public opinion surrounding alcohol should be a high priority for us. Because it is so widely and pleasurably used, the general public is largely ignorant of the cost of alcohol misuse in our society and the levels of consumption which may cause harm. I believe that a change in attitudes to alcohol must be our first priority".
As the Minister knows, I do not normally go around praising Ministers to excess. I merely say that that former Secretary of State was talking real sense and I believe that there has to be a change in attitudes. This was strongly argued by the right reverend Prelate the Bishop of Gloucester.
So what are the Government doing in the face of all this frightening evidence? First, the Chancellor of the Exchequer made his contribution by reducing the real cost of drink by failing even to increase the tax in line with inflation. I thought that that was a very extraordinary decision to take. Of course it was popular with a small number of people. I suppose it was popular with all drinkers, because it meant that they were actually drinking at lower cost than before. It is one way of gaining popularity, but I do not think it was a very sensible or a very socially minded decision to take.
In the past 30 years alcohol consumption in the United Kingdom has almost doubled and the relative
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price has halved. Approximately £43 million is spent every day on alcohol, more than on personal clothing, on house repairs or on motor cars. The real price of whisky and wine has dropped dramatically over the years, though the price of beer—due more to the acquisitiveness of the brewers than to the Chancellor of the Exchequer—has stayed closer to the retail price index.
All right, the Chancellor has made some contribution to this problem but law enforcement is slipping. Prosecutions for under-age drinking have fallen dramatically in a most disturbing way, as if the law did not exist. In fact the under-18 rule is openly flouted without any action that one can see being taken. The Government must concentrate their attention on that.
Now apart from establishing an interdepartmental committee the Government propose to extend the licensing hours. That is quite contrary to the recommendations of the Masham Report and to the evidence available, which I have quoted. I find that almost unbelievable.
Let us look at the simplest recommendations from the consensus taken by the Royal College of Psychiatrists. One can see that it recommended, first, raising the price of alcohol, although it did not say by how much; secondly, the immediate introduction of random breath testing; thirdly, no further extension of licensing hours and proper enforcement of existing licensing laws; and, fourthly, closer surveillance of alcohol advertising. Each one of those proposals has been argued by noble Lords during the course of the debate. I hope that we shall hear from the Minister a very clear exposition of what the Government intend to do about what I think is a very serious problem. Alcohol Concern has called that problem a national disaster.
Let us consider this problem from the aspect of a Bill that is in another place. All the evidence shows that the longer the licensing hours the more alcohol is consumed. That is the evidence that has come from other countries. In spite of what the noble Lord, Lord Campbell of Croy, has suggested, it seems to be the evidence from Scotland.
Lord Campbell of Croy: My Lords, as I pointed out, the survey by the OPCS of the first eight years after the reform was carried out in Scotland indicated that there had not been increased consumption among men and that there had been a small increase in consumption among women. But on the whole there had been an improvement. I pointed out that the situation in Scotland was different, but I wish to make quite clear that what has happened in Scotland has been an improvement. That should not be challenged.
Lord Ennals: My Lords, I do challenge that because the figures that have been suggested show an increase of 13 per cent. I accept that that includes women as well as men but it shows that there has been a 13 per cent. increase in alcohol consumption in Scotland. I know that the noble Lord said that he expected that women would drink more. I do not look forward to that prospect or consider it a great success. It may be that women are also smoking more and are doing more damage to themselves.
Lord Campbell of Croy: My Lords, the noble Lord really should have listened to my speech. I said that that situation was to be expected in Scotland where women used not to be taken into pubs. The drinking that took place was thoroughly unsociable and in a number of places the men were there simply to try to get drunk before closing time. Therefore it was to be expected that more women should now be drinking. Of course I am not suggesting that there is a direct comparison with England and Wales, but the noble Lord should not try to change history as regards Scotland.
Lord Ennals: My Lords, I am not trying to change history. I am simply saying that the facts show that there was a 13 per cent. increase in drinking during the eight years that I mentioned. That figure was mentioned by the OPCS.
Is there public pressure for longer drinking hours? I do not think that there is. Poll findings suggest that that is not so. They have consistently shown that around 60 per cent. of the population want to keep pub opening hours as they are. The findings show that barely a third of the population support longer licensing hours. Those figures have been revealed to a slightly varying degree by Gallup and Marplan.
There are of course advocates of extending drinking hours. Alcoholics and heavy drinkers find it nicer to be able to continue drinking in the afternoon rather than be turned out of the pubs and have to sit around waiting before being able to go back again in the early evening. I do not know what was discovered by the noble Baroness, but school-age drinkers who are attracted by the prospect of a drink in a pub after school want to see the hours changed.
Lastly and most importantly, the brewers themselves quite obviously are the advocates of the case. I would not link the brewers with any contributions that they may make to party funds, but there are some who would do that. I think that the brewers should be told that it is not the Government's task to ease their job of selling more drink. That is what the brewers want to do and any argument that the purpose of advertising is not to sell more drink is one that I find absolutely spurious.
I want to know what the Government are going to do about that. I also want to know what they intend to do about the proposed sponsorship that I read about two days ago of the Football Association Cup by Courage. It is absolutely appalling that a major sporting event should be sponsored by a major drink producer. That is so blatant as to be disgusting. I hope that the Government will have a very substantial case to make for the policies that they wish to pursue. I hope that when the Bill comes to the House we shall be able to argue it line by line. Although the noble Viscount, Lord Montgomery of Alamein, will support it, I can assure him that I shall not.
7.56 p.m.
Lord Skelmersdale: My Lords, the House will be unusually grateful to the noble Viscount, Lord Falkland, for giving us the opportunity to debate a topic of concern on which there is quite rightly increasing public debate. From what we have heard
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today it is quite clear that alcohol misuse is a complex subject of multiple dimensions. It is a subject about which many of your Lordships are clearly concerned and one on which many differing views are held about what action needs to be taken.
I was particularly struck by the maiden views, if I may put it that way, of the noble Lord, Lord Dormand of Easington. I hope that we shall hear from him both soon and often. Clearly the right reverend Prelate has rather softer views on the use of the law and I am sure that noble Lords will have drawn their own conclusions from that.
Many years ago the lecturer who gave me a grounding in economics used to tell me to define my terms. Alcohol misuse comes in various forms and results in harm ranging from personal, social and criminal damage at one end of the spectrum to cirrhosis of the liver and ultimately death at the other. The House will have noted that in relation to Europe this country has one of the lowest per capita incidence of death from liver cirrhosis. Indeed the noble Viscount himself noted that particular point.
It is also noticeable that in Sweden, despite tough methods designed to control alcohol consumption which have been operating for many years, the figure is three times as high as it is here. Experience from Sweden and elsewhere does not lead me to suppose that swingeing government measures in the form of tax, which have been called for by many noble Lords tonight, are the answer. Nevertheless I shall of course refer the comments of the House and particularly those of the noble Lord, Lord Rea, to my right honourable friend the Chancellor of the Exchequer.
I am afraid that I must disagree with my noble friend Lord Montgomery on the cirrhosis figures. In England and Wales they have in fact gone up, not down, from 1,944 in 1974 to 2,750 in 1986. However, just looking at how things are going from the incidence of cirrhosis of the liver is not what this debate has in the main been about. As we know, long before an individual has become physically dependent on alcohol the consequences of persistent overconsumption will have given rise to a variety of problems for the drinker himself, his family, his friends and, even worse, total strangers to say nothing of the effect on the general economy through loss of productive work. That point has been made by one noble Lord.
Let me take those consequences in order. The drinker, male or female, will start with a social drink. That may continue for several years. In that period, which may start in childhood with overindulgent or uncaring parents, there will be an occasional bout of recklessness resulting in at best a hangover from which the individual can hopefully learn how much his body can cope with. Childhood drinking is the particularly worrying aspect of the OPCS report which was mentioned by my noble friend Lord Campbell of Croy. That study found that by the age of 13 most adolescents had had their first alcoholic drink. Weekly drinking rises steadily with age. At the age of 13, for example, 29 per cent. of boys and 11 per cent. of girls have taken alcohol at some stage in their lives. By the time they get to the age of 17, the figures are 61 per cent. and 54 per cent. respectively. The noble Lord, Lord Ennals, may be interested to know

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that Scottish adolescents drink much less frequently. I am not saying that those figures prove anything.
The majority of young drinkers drink moderately. Older adolescents and particularly boys drink more, which is not surprising. A quarter of all 14 year-olds and 40 per cent. of all 16 year-olds in England and Wales say that they drink in pubs. As a member of the Government and as an individual, I find that an absolutely scandalous statistic, and I am sure the noble Lord, Lord Ennals, does, together with every other Member of this House. What they are doing is breaking the law. That cannot be right. The problem—as with drink-driving, to which I shall turn in a moment—is to identify the law-breakers. That problem is something which we shall have to consider. However, there can be no excuse.
The reason for drinking, which I think was put forward by the noble Viscount, Lord Falkland, is that alcohol is a legal drug and, taken in moderation, it does little harm. It may even do good in that it induces a mild euphoria and relieves stress. That is socially acceptable and the Government do not believe that it would be right to crack down on the sale or consumption of alcohol per se. However, we believe that social acceptability is the key to dealing with the problem. It must be made unacceptable for the stage of mild euphoria to be translated into a stage of total euphoria where imbibers are no longer responsible for their actions.
If we look, as several noble Lords have done, to tobacco as a parallel, education there has made smokers well aware of the bad social image of the habit. I believe that we should aim to make total euphoria or drunkenness as socially unacceptable as smoking has become. The macho image of downing as many pints in as little time as possible must go.
What I am saying in my longwinded way is that the Government's primary policy is education. The noble Lord, Lord Whaddon, is right in saying that. The noble Lord, Lord Ennals, called it "changing attitudes" but what is in a word? Last year the Health Education Authority and the national voluntary body, Alcohol Concern, spent some £1 million of DHSS funds on alcohol education and services. Other government departments have been improving the teaching of sensible drinking in our schools and tackling drunken driving. I should like to record my support for the hard-hitting campaign of my right honourable friend the Minister of Transport which is aimed at keeping drunk drivers off our roads, for which I think he has been quite unreasonably criticised in some quarters.
Lord Ennals: Not by me!
Lord Skelmersdale: My Lords, indeed. My noble friend Lord Campbell of Croy, the noble Lord, Lord Dormand, and others spoke eloquently on the subject of random breath-testing. That has been a matter of considerable controversy for over 20 years. The noble Lord, Lord Dormand, does not inhibit me from saying that the police may use their general powers under Section 159 of the Road Traffic Act 1972 to stop vehicles at random in order to decide whether there are grounds for requiring a breath test under Section 7 of the Act where there are reasonable
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grounds to suspect that the motorist has alcohol in his body, that he has committed a moving traffic offence or that he has been involved in an accident. The law as enacted permits random stopping but not random testing. The Association of Chief Police Officers has stated that it sees no need for wider powers.
The House may be interested to know that in 1986 the police carried out more than 300,000 breath tests of which 28 per cent. were positive. It may also have escaped your Lordships' notice that last week leave was given in another place for the introduction of a Bill to bring in random breath-testing under the Ten Minutes Rule. In particular, the noble Lord, Lord Dormand, will know more than I do about the likely prognosis for the Bill. I understand that it is rare but not impossible for such Bills to get on the statute book. I can only say that when and if it arrives in this House we shall subject it to our customary scrutiny.
At present the Government have no plans either to amend the present blood alcohol level for drunk driving or to increase the recommended period of banning which is imposed on convicted drink-drivers. I do not know whether we are going to have our annual transport Bill this year; I rather suspect that we shall. If noble Lords feel sufficiently strongly, no doubt we can debate that matter in the context of the Bill.
Home Office studies on how alcohol underlies crime have included that of the excellent working party chaired by the noble Baroness, Lady Masham, to which the Government are most grateful. Our debate has been much enlightened by the noble Baroness's contribution today. However, she will not expect me to respond blow by blow to her working party report at this moment. That will clearly involve a certain amount of consideration.
Perhaps I may make one comment concerning the speech of the noble Baroness. In my view, it was most unfortunate that she coupled her plea for non-alcoholic wine in the House with the visits which young people make to the House. Non-alcoholic wine for youngsters can easily start them on the slippery slope that we all know so well. That is a matter upon which I for one feel extremely strongly.
All the Government action to which I have referred now has a single focus in the new ministerial group on alcohol misuse. Since advertising is a factor which might influence groups which are at risk, such as young people, I imagine that it may well be considered by the ministerial group on alcohol misuse. In particular, the noble Baroness will have noticed that my right honourable friend the Lord Privy Seal has taken children as his first priority.
Baroness Masham of Ilton: My Lords, does the Minister agree that young people like to follow adults? We are not going to stop adults drinking wine. Would it not be advisable to let children understand that non-alcoholic wine is safe and quite likeable when they learn to drink it?
Lord Skelmersdale: My Lords, likeability is a matter of personal taste. I shall not get into that argument at this moment. Perhaps I may mention

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that I am a notorious chocolate eater. However, I have been able to educate my children not to touch it. Bits of Easter eggs are still littered around the larder at my home on Christmas Day. That says a lot for the state of my children's teeth. However, I do not want to go into that at the moment either.
Targets and messages are important and they can be co-ordinated and action directed more positively through the ministerial group. I believe that all those measures will reassure those who have expressed worries about the effects of the Government's proposals to relax opening hours in England and Wales. Far from being a source of harm, that removal of unnecessary restrictions seems to me to be a positive step to encourage more leisurely drinking and to do away with the "last orders" rush. My noble friend Lord Campbell of Croy mentioned the experience of Scotland. That is evidenced again in the OPCS survey. I totally agree with my noble friend's conclusions.
Apart from government many others have been playing their part in tackling misuse. I was particularly grateful for the speech of the noble Marquess, Lord Headfort, on the rationale and the way of dealing with the problems of alcoholics which Alcoholics Anonymous has developed over a considerable period of time. The Government, the Houses of Parliament generally and much more importantly the alcoholics themselves are and will be eternally grateful.
The drinks industry has put a lot of time and money into research and education. I particularly welcome its latest national campaign to reduce under-age drinking and drunken driving. The right reverend Prelate the Bishop of Gloucester reminded us that the Church has given care and support for many years to those whose lives have been damaged by alcohol. Employers and trades unions have shown how important is the work place in tackling alcohol problems.
Last but by no means least the medical profession in this country has made sure that we have expert advice on how we can safely use alcohol. During the last year the medical royal colleges have revised their safe drinking limit to lower levels, which is a significant change and of which all of us should take careful note. When noble Lords ask for more research, I find it difficult to understand what research they are talking about. It seems to me that this subject is already very well covered.
The report of the royal colleges is part of the health education which we were talking about earlier in the debate on the Statement on primary health care. I agree with the noble Lord, Lord Rea, that the subject of alcohol should figure more strongly in medical training outside and not inside the medical student. I actually blame rugger for the latter, but let that pass.
All these efforts to educate are starting to bring about signs of change in the habits of at least some people. One of the more encouraging things in this respect was for me to go out to lunch recently with a multi-million pound company making, among other things, medical equipment. I am currently responsible for the procurement and export of such products. Although I was offered alcoholic beverages
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before the meal, there was a vast array of soft drinks on offer. The point of this story is that no wine, either alcoholic or non-alcoholic, was offered with the lunch itself. Only water was served and even more importantly no comment was made. Your Lordships may well have similar tales to recount, but this is far from always being the case. We need to create a social climate where non-alcoholic beverages are always set out side-by-side with alcoholic drinks. In passing I congratulate our refreshment committee on stocking non-alcoholic beer in two—why only two?—of our three main refreshment points.
The strategy to educate has raised public concern about two particular areas, the wine drinking habits of our young people and the unacceptable loss of life and injury on our roads caused by the drunken driver. I am sure that the House will welcome the decision of the ministerial group on alcohol misuse to consider as a first priority the question of young people and alcohol.
I have been asked various questions especially by the noble Lord, Lord Whaddon, who I think was the only noble Lord to ask me direct questions. I will answer them. The noble Lord spoke about a suggestion for having alcoholic-strength labelling and health warnings on bottles of alcohol. The European Community has decided that all pre-packaged alcoholic drinks should be required to show on their labels the alcoholic strength quoted as alcoholic percentage by volume. The Ministry of Agriculture, Fisheries and Food has decided to extend this requirement to cover dispensed drinks provided through outlets such as hotels, restaurants and public houses. These are expected to come into force in 1989.
As regards health warnings generally, the noble Lord suggested that they should appear on all containers of alcoholic drinks in line with warnings on cigarette packets. The Government are not convinced by this on the grounds that it is the misuse of alcohol which does the harm. However, I shall take on board the suggestion that warnings could be phrased in such a way that it is the misuse to which attention is drawn.
Several noble Lords have talked about alcohol and the advertising thereof in the media. I do not know how many know of a recent Department of Health and Social Security conference on the prevention of alcohol misuse. It took place on 20th February. One of the six main topics under discussion was the role which the media could play in influencing public opinion. The conference was attended by representatives of the voluntary sector, professional bodies, government departments, industry and both the advertising sector as an industry and the media itself.
I am happy to advise the House that the media representatives reached a concensus that they had a very important role to play in educating the public on the subject of alcohol. I do not know how many noble Lords occasionally watch the soap opera "East Enders". It is extremely good in the educational respect in that non-alcoholic beverages are frequently seen to be drunk on the screen by the actors.
Furthermore, during that conference it was agreed that journalists and broadcasters needed to change their attitude to drinking before they could influence

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others. The effective aim of the media should be to make inebriation as unacceptable as smoking has become.
As regards advertising, in the non-spoken media this is regulated by the alcohol chapter of the Advertising Standards Authority's code of practice. This chapter, which is voluntary, is drawn up by the drinks industry itself and is administered by the authority. Any complaints which noble Lords or any members of the public might have should be directed to it.
The department which I have the honour to serve was consulted when the code was reviewed and it naturally welcomes the revised procedures which came into operation at the beginning of 1980 as a significant improvement over previous procedures. I have not noticed myself a slipping of standards but after the comments made in the debate this evening I shall certainly look very much more closely at the matter and try to get an historical base from which to judge.
The drinks industry in this country has demonstrated a responsible attitude towards alcohol misuse and it has supported research and prevention initiatives. We are particularly pleased to see its latest national initiatives aimed at preventing under-age drinking and drink-driving, which are the two areas where the law has a part to play.
Finally, it is far from easy to tackle the abuse of a substance which is legal and which is solidly entrenched in our national and cultural attitudes. Alcohol is not a substance like heroin or cocaine where a clear message can be given about the harm in using it. No such message is appropriate to the use of alcohol, only to its misuse, which is a point I have already made.
This is a complex issue which it is difficult to address in a clear and unequivocal manner. Yet we must address it, fostering and informing debate at all levels of our society to bring about sensible and balanced opinions. I am sure that our debate here today has provided a valuable contribution to the overall national discussion and a constructive input to public awareness. On behalf of the Government, I am grateful to the noble Viscount, Lord Falkland.
The Viscount of Falkland: My Lords, we have had a useful, interesting and productive debate and it only remains for me to thank all noble Lords who have taken part. I should like to congratulate in particular the noble Lord, Lord Dormand of Easington. I think we are extremely lucky to have had in this debate today such an eloquent and experienced speaker making, well within the bounds of convention, so forceful a point. I hope the Government will take on board the need to tighten up the law as regards drinking and driving. The right reverend Prelate the Bishop of Gloucester made reference to the need for education, and I believe that that is something with which we all agree. Many noble Lords were kind enough to say that my timing was extremely good. My noble friend Lady Stedman, sitting at my side when one of those remarks was made, muttered to me: "Everybody has to get lucky at some time". I think that was probably the right attitude.
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As an arbiter in the disagreements about the Scottish figures, I think we can interpret the Scottish figures in several ways. It does seem that abuse in terms of intoxication and its disastrous effects in law-breaking and so on at a time which one associates with end-of-session drinking has definitely subsided in Scotland. However, the figures for cirrhosis of the liver in Scotland have increased more than in England, and drinking among women has also increased. Some of the figures may appear a little untrustworthy because certain offences which were formerly the subject of prosecutions by the police are no longer brought in that form. Therefore, some police statistics are perhaps not entirely reliable.
I end on that note of peacemaking and thank all noble Lords for their excellent contributions to this debate. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Land Registration Bill [H.L.]
8.22 p.m.
Lord Templeman: My Lords, I beg to move that the Bill be now read a second time. Nine hundred years ago land in England was registered in the Domesday Book. At that time there was no coyness about the ownership of land. For the next few hundred years there was no secrecy about the ownership of land. When a purchaser bought a piece of land, he was taken on to the land in the presence of witnesses and the vendor handed him a twig by way of a symbol and said to him, rather charmingly: "Enter this land and God give you joy". Copyhold land was conveyed by surrender and admittance carried out in open court before the Lord of the Manor or his steward.
Then, I am sorry to say, the lawyers got to work and invented secret written conveyances. The object of that was not to hide the ownership of land from one's neighbours, but to hide it from the king, who thereby was disabled of recovering the feudal dues and taxes which otherwise he could have recovered under the old-fashioned method of conveyancing.
Once land became transferable by secret documents, then we had to build up the whole of the paraphernalia of proving title. It is not possible to assume that because man is living in a house he is therefore the owner. When one wants to buy from him, under unregistered conveyancing, he will produce a whole mass of documents, some of them 50 years old, to prove his title. Title was traced through each document, each death, each will until finally—staggering at the end—a skilful solicitor could advise the purchaser that there was a good title.
That was expensive and cumbersome and in 1862 the Land Registry Act was passed. The object of the Act, as expressed in the preamble, was:
"To give certainty to the title to real estate and to facilitate the proof thereof and also to render dealings with land more simple and economic".
The system is simply that the Land Registry has a register on which is entered the owner of a particular piece of land. On it is also registered any mortgage which is executed and any restrictive covenants which

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affect the land. If one wants to know whether the vendor really owns the land, one simply goes along to the register and looks. All the old conveyancing documents can he thrown away or sent off to the archives.
In 1862 the registration of land in its simplified form was voluntary, and, as by that time unregistered land was conveyed secretly, in order to encourage volunteers to come along and register their land, Section 15 of the Act provided that the register should only be opened to inspection by the registered owner or under an order of the court.
Land registration became compulsory in 1925 under the Land Registration Act, but the work of registering the titles was immense and was interrupted by the war. Even now the registration of titles has only reached about 70 or 80 per cent. though I am glad to say that it is planned that complete registration will be finished by about the end of the century. The Land Registry is the government department which keeps all these records. When it has a record it issues a certificate of title which describes the land, indicates its boundaries and gives the names and addresses of the owners.
As registration of title has become the rule rather than the exception, secrecy, whose justification lay in the fact that unregistered conveyancing was necessarily secret, has become out of date. The secrecy which was imposed by Section 112 of the Land Registration Act 1925 has led to a number of serious difficulties. The worst example of that is the absent landlord who manages his property through agents and conceals his identity. The tenant may wish to serve a notice on his landlord to carry out repairs and the local authority may wish to serve a notice on the landlord to fulfil his statutory obligations. Under the Land Registration Act 1925, no tenant or local authority is entitled to inspect the register to find out who owns the land. There have been statutory inroads into this, but it is the worst example of secrecy, as is usual, becoming a cloak for fraud and malpractice.
There are other difficulties. I heard only today of counsel advising an owner of land who is having a dispute with his neighbour about boundaries. There was a great deal of correspondence and argument and the neighbour flatly refused to disclose his title deeds. The result is that the argument will continue until someone issues a writ and the matter is then clarified. However, if there was no secrecy, one could go along to the Land Registry and see the boundaries of title and the name of the owner.
There are other difficulties. For example, one owner has a party wall and finds that it harbours dry rot. He cannot do much about it without the knowledge of his neighbour. The neighbouring owner has let the property and the tenant is awkward. There is then real difficulty in discovering the exact position with regard to the property next door. The tenant of a flat may wish to know, not only who owns his property, because that may have come about as a result of leases and sub-leases, but who owns the block of flats and who is responsible for, for example, repairs to the roof.
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There are other people who are interested in ownership. People may wish to know if there is a right of way and who is the owner responsible for it. The problem has been apparent for a number of years. The Law Commission was asked to investigate the matter, which it did with its usual thoroughness. It sent out 50,000 copies of a pamphlet asking, "What do you think about opening the register?" I am bound to say that the majority of people never bothered to reply—they could not care whether or not the register was opened. However, the great preponderance of opinion among those who did reply was in favour of the register being opened.
The Law Commission also made inquiries abroad. It found, and I quote from its report, that:
"in almost every other country in the world registers of title or of land are fully open to public inspection. Lawyers in these countries find it hard to understand why we retain a private register in this country since the advantages of an open one are to them so obvious".
In this country it is possible to go to Somerset House and collect a copy of the will of any deceased testator and find out that he has left his second best bed to his wife and cut off his eldest son with a shilling; it is possible to inspect the register of the ownership of shares in public companies; but it is not possible to inspect the register of titles to land. For my part, I fail to understand how anyone can be ashamed of the knowledge that he owns a piece of land, large or small.
In its Report No. 148, dated 27th February 1985, the Law Commission, having made all these thorough investigations, recommended that the Land Registry should be open to public inspection and annexed to its report the draft Bill which, subject to slight modifications, is the Bill now before the House.
A suggestion has been made—I believe the noble Lord, Lord Coleraine, is to repeat it—that it might he possible partially to open the register; that is, to open it to certain classes of people. That raises practical objections; first, there is the difficulty of defining who should be allowed to inspect the register and who should not, and, secondly, there is difficulty for the registrar and his officials. When someone asks politely to inspect the title to find out who owns, say, 156 Acacia Avenue, the Land Registry official would have to say, "You must prove to us that you fall into one of the categories of person entitled to inspect." The Law Commission came to the conclusion that there was no reason why the registry should not be generally opened so that the registrar would have no difficulties.
The Bill has been welcomed by my noble and learned friend Lord Hailsham of Saint Marylebone, by my noble and learned friend on the Appellate Committee, and particularly by my noble and learned friend Lord Brightman, who has experience in conveyancing and trusts of over 50 years. The House will await with interest the views of the Lord Chancellor, but I remind him and the House that in Scotland a deeds register has been open to public inspection since the 17th century. As usual, it appears that Scottish law is about 250 years ahead of English law and, again as usual, we are now making strenuous efforts to catch up.

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The opposition to the opening of the register is largely based on the view that to open it would be an invasion of privacy. That, in itself, may be due to some misapprehension. Although, as I have said, the register gives details of conveyancing, ownership and mortgage, it does not show the price paid for a property or the amount raised on mortgage. It would be embarrassing for a vendor who purchased at £50,000 to have a potential purchaser jibbing at a price of £70,000 because he found that the property had been bought cheaply. One can understand that no owner of property wishes it to be known that he has mortgaged it to the hilt. However, there is no great stigma in having it known that one has mortgaged a property. It is perfectly simple to do and everybody does it, partly to get the benefit of the generous tax allowance and partly because very few people can put up £150,000 in pound notes for a three-bedroomed house. Therefore, to reveal the fact that a house has been mortgaged is not, to my mind, an invasion of the privacy of an owner.
The ownership of land can no longer be confidential. Ownership of land brings obligations as well as rights. Many people apart from the owner are interested in land. The state is interested. The Forestry Commission is interested. Everyone concerned with town planning is interested. Neighbours are interested. Tenants are interested. Even a trespasser might be interested. One cannot isolate a piece of land in the middle of England and, for no good reason, simply cloak its ownership and say that no one should be entitled to know the name of the man who owns it.
With that introduction, I now deal briefly with the Bill. Clause 1 abolishes the restrictions on inspection of the register and enables any person to inspect and make copies of entries on the register. Your Lordships will observe that the right is made conditional on payment of a fee. That fee will be fixed by the Land Registry. That has two consequences. First, payment of a fee will prevent any frivolous inspection. In practice, if a person has to pay in order to search for each title only those people who have a genuine interest in ascertaining the name of the owner will, bother to search the register. Secondly, the imposition of a fee—and I am sure this will appeal to Her Majesty's Government—will mean that no additional cost will fall on the taxpayer. The registrar will naturally assess a fee which will cover the cost of opening and showing the register and giving copies to inquirers.
Subsection (2) and Clause 3 are consequential and get rid of some minor amendments to Section 112 of the Land Registration Act which already exist.
I should mention that Clause 3(2) as at present drafted provides that the Bill,
"shall come into force at the end of the period of one month beginning with the day on which it is passed."
With 40 years' experience of conveyancing I know how much work there is in the Land Registry. I am full of admiration for the registrar, who has dragged conveyancing from the 19th into the 20th century. The registry is now, with great foresight, embarked on a programme of computerisation which will take conveyancing into the 21st century. With
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computerisation, it will eventually be possible for any solicitor, with, of course, the consent of the Land Registry and payment of a fee, to ascertain the details of ownership and any restrictive covenants on a property merely by asking the right questions of the computer.
At the moment, as I understand it, the registrar fears that if the Bill comes into force immediately there will be extra cost and difficulty for his department. If the Bill finds acceptance among your Lordships, I suggest that the proper way to deal with that problem is to provide for the Act to come into force on a day to be fixed by the Lord Chancellor, or whoever is the most appropriate Minister. I hope that the Act will be brought into force within the next year or two, when the registrar has managed to solve his administrative difficulties and is satisfied that he can operate its provisions without undue difficulty. Subject to that change, which I shall ask leave to introduce in Committee, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Templeman.)
8.38 p.m.
Lord Coleraine: My Lords, I am pleased to give a very firm welcome to the Bill and to the concept of an open register making information regarding land ownership available to those who want it.
When I first read the Law Commission's report I had no firm feelings one way or the other about this matter except, perhaps, a feeling that here was yet another incursion into our privacy. However, if I had not been persuaded by the arguments of the report I would certainly have been persuaded by the presentation of the argument by the noble and learned Lord, Lord Templeman.
As the noble and learned Lord said, I have one issue to raise. Should the opening of the register enable everyone to inspect everything to be found there? Should the opening of the register be total or only partial? In its report the Law Commission firmly recommends total and unrestricted opening. The reason given by the Law Commission—and this will be my principal concern this evening—is that the Treasury would not permit the additional expense required if the opening of the register were to be partial. This is said to be the case even though the Land Registry is well able from its fee income to fund partial opening over and over again. I have myself again no very fixed or firm opinion on this question of partial opening. Nevertheless, I am far from convinced by the reasons given by the Law Commission and I think it is a pity that they have to assume the immutability of government public expenditure policy and that they did not express any clear opinion as to whether partial opening might be desirable in principle.
The arguments which justify the ending of secrecy about the ownership of land do not as clearly justify public access to other information which may be kept on the register. For example, in the report the National Consumer Council are quoted in paragraph 17 as being against the closed register. They stridently comment.
"The denial of public access to the Land Registry is a symptom of the obsession with unnecessary secrecy which pervades British society".

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Nevertheless, what the National Consumer Council appear to be concerned with is simply secrecy about the ownership of land as a general principle. They recognise that,
"the citizen has a strong interest in being able to conduct his family life in private".
They continue:
"This does not extend to secrecy over the ownership of land".
I think that that testimony leaves wide open the question whether there has to be total or only partial opening of the register
As an example of the sort of information that might be excluded from a general right of access, the Law Commission instance the charge over the matrimonial home which, in England and Wales at least, is given by statute to a spouse who otherwise has no formal estate or interest in the matrimonial home. The charge may be protected by registration on the charges register of the other spouse's registered title to the land. This is provided for by Sections 1 and 2 of the Matrimonial Homes Act 1983.
This matrimonial charge will normally be registered when the spouse without the legal estate starts to feel anxious about the marriage. That spouse, for good reason or bad, may not tell the other spouse about the registration. The Land Registry does not do so. The Land Registry's reason for not notifying the other spouse is in case by so doing they exacerbate a painful situation. By the same token, the difficulty seen by those who oppose a totally open register is that the spouses may still be living together and the first the other spouse may learn about the charge is when that spouse opens the morning papers or reads a letter from a candid friend.
What the Law Commission have to say about partial opening is in paragraph 17 of their report. It is that partial opening,
"would appear impracticable, as involving unacceptable administration and resource implications for HM Land Registry".
The responses which were given to the Government Conveyancing Committee (the Farrand Committee) by the Chief Land Registrar, when questioned as to the disadvantages of an open register are clear. In paragraph 4.47 of the Farrand Committee's second report in 1985 on the general question whether an open Land Registry would be feasible the chief Land Registrar responded in terms which suggested that it would. He nevertheless had this important caveat to add:
"Additional fees for searches would be of no particular help to the Registry in the event of the work proving to be higher than envisaged. It cannot be emphasised too strongly either in this context or generally that the Registry's difficulties at the present time do not centre on the question of the level of finance available but on the fact that its manpower resources are strictly limited by the Government's policy to restrict civil service numbers".
In paragraph 4.48 the Chief Land Registrar's response made it clear that this aspect of the Government's policy would definitely inhibit any partial opening of the register.
I believe that the position may have changed for the worse in this respect since 1985 and that today the Government's policy might inhibit even a total opening of the register. I understand that any change
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at all in the right of access to information held by the Land Registry would have resource implications considerably greater than were contemplated by the Chief Land Registrar when he responded to the Farrand Committee.
A timely report from the National Audit Office entitled "Review of the Operations of HM Land Registry" and presented under the National Audit Act in July this year throws some light on the way the dead hand of the Treasury lies on the Land Registry. If I may quote from the overall conclusions of the report:
"The Land Registry exists to provide a service to users, and since it is, in effect, a statutory monopoly it is important that its activities should be conducted in an efficient manner at minimum cost to the public. As the report shows, the Registry has been successful in achieving target standards of service in terms of quality of work, and containing error rates, and has made successful efforts up to 1982–83 to raise efficiency, but largely because of the massive growth in its commitments and the limitations on staff numbers there have been areas of its activities where its efforts have since been frustrated, and where further efficiency improvements have been harder to secure, although some have been achieved in 1986–87. The productivity has been constrained by the increasing servicing of the accumulated backlog of casework and this too gives ground for concern, particularly if the position continues to deteriorate. At the same time as it faces these operational difficulties the Registry gathers substantial financial surpluses. If it was allowed to recruit additional staff and/or to reduce fees this would contribute substantially to the efficiency of land registration".
I can say something as to the deterioration in the position. According to the Chief Land Registrar's annual reports, the time taken for completion of the first registration of a new title was 48 working days as at 1st April 1985, 73 working days as at 1st April 1986, 110 working days as at 1st April 1987. My information is that this situation is continuing to deteriorate into this year.
I can say something also about the surplus which the Land Registry has had unwillingly to accumulate. According to the National Audit Office Report, the approved surplus amounted to £84 million in March 1986. In the following year ending 31st March 1987 on a turnover of £124 million the registration of title department of the Land Registry had a surplus of £25 million. These are all fees paid by people who want to buy and sell land, and are generally considered to be part of the cost of conveyancing.
This milking of the public (for that is what we are considering) is not less than a public scandal, coming as it does in conjunction with the deteriorating service provided by the Land Registry.
The National Audit Office Report (in paragraph 2.10) had this to say about the financial arrangements affecting the Land Registry:
"Treasury recognises that demand led self-financing bodies such as Land Registry may be more sensibly funded and resourced outside the present system of financial controls. The Registry for its part considers that a change in funding arrangements which will ensure an effective registration service is a matter of priority. This is currently being examined by the Treasury and the Registry."
I took the discussions referred to there as a hopeful sign that the Land Registry might be hived off, either as a public corporation or into the hands of private agencies, so that this rapidly growing service industry, now employing over 7,000, could play its part as an effective component of the market zeconomy.

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My expectations must, however, be looked at in the cold light of the written reply given in yesterday's Hansard by my noble and learned friend the Lord Chancellor to a Question which I had put down for Written Answer.
I had asked whether the Land Registry was inhibited by government financial controls and whether proposals were under consideration which would enable market forces to determine the services provided to the public. My noble and learned friend's reply fell into two parts. First,
"The Treasury has recently approved a significant increase in the expenditure and manpower to be made available to enable HM Land Registry to meet its growing commitments".
Secondly,
"Furthermore, discussions are being held with a view to ensuring that manpower resources can be adjusted more readily to reflect the level of activity prevailing from time to time in the conveyancing and mortgage markets".—[Official Report, 23/11/87; col. 530.]
I should be grateful for both replies. Unfortunately, I take the view that the processes described amount to little more than tinkering with a bad system to enable the Land Registry to get and keep its head above water by the provision of a tightly controlled minimal service.
The services of the Land Registry are generally described as demand-led. That is a happy and perhaps soporific phrase promoting a sense of euphoria and well-being. But I do not think that "demand-led" in this context is a phrase full of good meaning. It does not mean that the Land Registry will be any more likely tomorrow than today to be able to provide its users with what they want. All it means is that the need for the present services provided by the Land Registry fluctuates with the activity of the conveyancing and mortgage markets. The most one can say is that the Government at last recognise that the Land Registry must be allowed to use the resources it already has to carry out its statutory functions. That is no big deal.
My noble and learned friend's Answer does not go nearly far enough. It does not lead me to think that the radical discussions referred to by the National Audit Office are getting on very well or are likely to reach fruition.
A new deal is needed. We need a Land Registry liberated from the Treasury and responsive to its users' needs. It is the users who should have the last word as to how Land Registry surpluses are to be applied, whether in further windfalls to the Consolidated Fund, in the provision or more and better services or in the reduction of fees. Any consideration of the Bill has, because of its resource implications, to take in the present and future financing of the Land Registry.
I apologise to the noble and learned Lord and to the House for taking up time to press this one point. I hope that when my noble and learned friend responds to the debate he will find it possible to explain how feasible the provision of an open register is, having regard to Treasury control of the Land Registry and to the other extraneous financial considerations.
8.53 p.m.
Lord Silkin of Dulwich: My Lords, as long ago as 1857 it was reported that repeated but unsuccessful efforts had been made to establish public registration, something which had been constantly recommended by the ablest lawyers and statesmen. However, five years later the noble and learned Lord the Lord Chancellor, Lord Westbury, expressed the view that the objective had been defeated by the pedantic and narrow-minded interpretation of the judges. Those were his less severe criticisms of contemporary lawyers.
The clearly expressed intention of the legislature to restore publicity to land dealing was thus frustrated to the benefit of those who profited from secrecy. That frustration has continued to this very day, despite the greater liberality of judicial views. The adjectives used by Lord Westbury are, I hope, less justified today.
The consequence is that England and Wales are out of accord not only with almost every other country but even with Scotland and Ireland. The result is that only the proprietor and those authorised by him can inspect the documents contained in the register except where the court orders otherwise for a specific purpose or where some other narrowly defined exception exists.
The only serious objection in principle to the opening of the register is that it involves some invasion of privacy. Important as is the public interest in favour of the legitimate protection of privacy, it is not an overriding consideration. There has been a growing tendency towards openness in analogous areas such as planning applications, wills, births, deaths and marriages, fair rents, company shareholdings and many others. In other countries privacy related to landholding has not been regarded as a paramount consideration and that has not had disastrous consequences.
There is a good case for widespread openness in regard to land holding. It is strong where a person has an interest in the land, such as a tenant, or in nearby land, but it is more general than that. The ownership of land carries important social responsibilities. It is a matter of legitimate public concern, not least to ensure desirable development and to prevent the undesirable.
In practice, the existence of an open register would simplify house transfer and so reduce its cost. The Bill does not enable an inquirer to find out the amount of a mortgage or the amount paid since 1977 to purchase land. Those restrictions are understandable, but it is perhaps open to question whether it is necessary for the price paid to remain secret after some specified time, such as 15 years. The noble and learned Lord and the registry might care to give some thought to that point.
The noble Lord, Lord Coleraine, in the course of careful argument, referred to two matters. The first related to fees and the financial standing of the register. I have always understood—when I held the office of Attorney-General I followed this rule—that where fees are charged to the public for a service, they should not be used as a form of taxation. I always advised in that sense. If the facts given to us by the noble Lord are accurate, it would seem that the rule

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has not been followed in this case. There may of course be statutory provisions which justify that course. We shall want to know more about it. To the extent that the saving of money from fees for services given has contributed to the worsening of those services, that is something about which we should know more. I am grateful to the noble Lord for drawing attention to the point.
On the possibility of partial disclosure, that no doubt is a matter that we shall examine closely in Committee. My question is, why? What is the justification in modern times for partial disclosure as distinct from complete disclosure? It seems to me that there must be an overriding rule to cut out of the disclosure some part of what is contained—as no doubt there is in the case on the price of recent purchases and matters of that kind—to justify the provision in the legislation in that form. We shall be able to examine that matter in due course. I do not think it in any way impinges upon the concept of the Bill as a whole.
For the reasons I have given, we fully support the Bill. We are grateful to the noble and learned Lord, Lord Templeman, for accepting the burden of promoting it, as indeed we are to the Law Commission for its very well argued report.
9 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I should like to begin by congratulating my noble and learned friend Lord Templeman on his initiative in bringing this Bill before the House and on his usual very persuasive advocacy in commending it to your Lordships. I should also like to express gratitude to the Law Commission for the valuable report which has given birth to this Bill. It carefully marshalled the arguments for and against an open register and firmly concluded that the balance of advantage lay with openness.
I am also grateful to the noble and learned Lord, Lord Silkin of Dulwich, for his support for the Bill and to my noble friend Lord Coleraine for his support, at least to the extent of supporting partial opening of the register. I hope that he will see that partial support might with advantage be turned into complete support for the principal provisions of the Bill. For my part, as a Scot, I am gratified that my noble and learned friend Lord Templeman should indicate so plainly that the course of history in Scotland is now being followed in England and Wales.
The Law Commission concluded that there would be significant advantages in an open register from the point of conveyancing simplification. Since the main purpose of registration of title is to make the transfer of land easier and less hazardous, that must be a very weighty consideration in favour of openness. The Law Commission also drew attention to the assistance which an open register would afford in identifying the ownership of land for other purposes such as preservation and development. At a time when we are so much concerned with our environment and the problems of homelessness and inner city decay this too must be a weighty
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consideration. I am in no doubt that the Law Commission reached the right conclusions and that the principle of openness should prevail.
It may help if I attempt to set the Bill in a slightly wider context. It is a regrettable fact that the Land Registry is currently labouring under very great difficulties and that there are unacceptable delays in registration. These are a matter of great concern not only to the chief land registrar but also to myself. In the last financial year there was an extraordinary and quite unpredictable increase in activity in the conveyancing and mortgage market producing a rise of some 25 per cent. in the register's intake. A further increase of some 9 per cent. has occurred during the first half of the present financial year.
It should be emphasised that the present delays do not result from inefficiency, there having been a 3 per cent. improvement in the productivity of the land registrar's department last year. Great efforts are being made to remedy this situation. Substantial increases in staff numbers have been authorised, over 900 for the present financial year. These additional staff are being recruited and trained. New offices are being opened so that work can be moved from overburdened offices. Moreover, new practices and procedures are being introduced, including the implementation last autumn of a fully computerised system at the Plymouth District Land Registry. My noble and learned friend Lord Templeman has referred to this. The system is being introduced at Gloucester over the next few months and later in 1988 at Swansea. It is proposed to introduce it successively into the remaining offices over the next five or six years.
Unfortunately none of these steps will produce immediate or dramatic reductions in the delays that are being experienced. Meanwhile the registry is doing what it can to minimise the adverse effect on solicitors and their clients by concentrating their resources on time-sensitive applications relating to the provision of office copies and certificates of official search, the speedy processing of which is of the highest importance if conveyancing transactions are to proceed smoothly.
At the same time the programme for extending the areas of compulsory registration to cover the whole of England and Wales has continued, and additional staff has been made available specifically for this purpose. It has been a very long haul, as my noble and learned friend said, but I think we are now at last within sight of the goal. At present some 87 per cent. of the population of England and Wales live in areas of compulsory registration. Over the next few months the figure will rise to almost 90 per cent. and plans are well advanced to increase it to nearly 94 per cent. in the coming financial year. All being well the programme will be completed by 1990.
There is further cause for optimism. The Law Commission is now engaged in the final stages of its work on land registration. Its first report on land registration was published in 1983 and led to the Land Registration Act of 1986. The second report published in 1985 has given rise to the present Bill. The third report dealing with overriding interests, rectification, indemnity and minor interests was published earlier this year but without a draft Bill. This was because the commission was already

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engaged on a complete overhaul and consolidation of the Land Registration Acts 1925 to 1986 which will incorporate the changes proposed in the latest report and also pick up the open register proposals. The land registration legislation passed in 1925 has after this lapse of time merited a thorough re-examination and the final results of the Law Commission's work are eagerly awaited.
I hope that I have given your Lordships sufficient indication that in spite of the present difficulties the next few years will be important in the history of land registration in England and Wales. I am convinced that an open register has an important part to play in all this. It would be a significant step towards the full realisation of the computerisation programme, it would link in with the completion of the extension programme and it would harmonise with a new, modern legislative framework for land registration.
I was grateful to my noble and learned friend Lord Templeman for indicating his intention to put down an amendment providing for commencement on an appointed day, because the question of timing is indeed important. The opening of the register will certainly make considerable demands on the Land Registry's resources, in particular in the early stages. It is vital that the registry should be fully prepared. If the effect of opening the register were to make the current delays in registration still worse, it would be counterproductive. Moreover implementation of the Law Commission's proposals would require the making of new rules and this is bound to take some time.
The Government have been considering all these aspects in the period since the publication of the Law Commission's report. Although the principle of an open register presents many attractions, particularly in respect of simplifying conveyancing and improving land use, it was felt that this was a decision which should not be rushed. By bringing forward this Bill my noble and learned friend has provided the opportunity for a full discussion of the issues, for which I am grateful.
I now turn briefly to the speech of my noble friend Lord Coleraine. He suggested that the arguments in favour of a partial opening of the register have been precluded by resource considerations. It would be fairer to say that a partial opening, which would involve great administrative inconvenience, might hardly be worth the trouble and expense, no matter what the registry's funding arrangements were.
It is sometimes suggested, for example, that the charges register should be excluded from public access. But the Law Commission pointed out that this would exclude not only references to mortgages but also to vital information relating to leases, restrictive covenants and to other deeds of that kind. It should perhaps be remembered that with unregistered land the land charges register is open to inspection. It should also be remembered that the charges register, although it contains particulars of mortgages, does not record the amount, nor does it follow from the Law Commission's report that copy leases and charges held at the registry should automatically be made available for inspection.
As he mentioned, my noble friend Lord Coleraine has recently asked me a Question for Written Answer
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on the subject of the registry's funding arrangements. The answer which I gave on Monday was:
"The Treasury has recently approved a significant increase in the expenditure and manpower…discussions [are continuing] with a view to ensuring that manpower resources can be adjusted more readily to reflect the level of activity prevailing from time to time in the conveyancing and mortgage markets".—[Official Report, 23/11/87; col. 530.]
I hope that this provides my noble friend with some encouragement.
Perhaps I should also take this opportunity of saying—since the matter was alluded to by my noble friend in his Question and has been the subject of some ill-informed speculation—that the Government have no plans for privatising the Land Registry. I believe that the present arrangements, with the flexibility that has been introduced, give the Land Registry an appropriate financial framework in which to provide a proper service to the public.
To return to my main theme, I entirely applaud the Bill proposed by my noble and learned friend Lord Templeman. I trust that, as he mentioned the considerations of timing, which weigh with me, the Bill as considered by your Lordships eventually in Committee will have a safe passage. I agree with my noble and learned friend in commending the Bill to the House.
9.12 p.m.
Lord Templeman: My Lords, I am grateful for the weighty and unanimous support accorded to the Bill. I know that the Law Commission will be gratified that its very long and careful investigations and report have found favour so far with your Lordships. I am particularly grateful for the support of my noble and learned friend the Lord Chancellor, speaking for the Administration, and my noble and learned friend Lord Silkin of Dulwich, speaking for the Labour Party. I hope that the weight of that support will speed the Bill not only through this House but also through another place.
The debate has given an opportunity for questions to be asked and for the searchlight to illuminate the work of the Land Registry and its relationship with the Treasury. I am sure that my noble and learned friend on the Woolsack will not mind the questions being asked, for it is right and proper that we should consider all aspects of the Land Registry and its relationship with the Treasury. Although that debate came in rather on a side-wind I make no complaint and I am sure that noble Lords will have been edified by the discussion that has taken place.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Overseas Students: Policy
9.13 p.m.
Lord Hunter of Newington Lord Hunter of Newington rose to ask Her Majesty's Government what is their response to the publication by the Overseas Students Trust of The Next Steps—Overseas Student Policy into the 90s.
The noble Lord said: My Lords, first, I express my thanks to the Government for finding time to make

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it possible for me to put the Question standing on the Order Paper. In 1979 the Department of Education and Science, searching for ways to meet its share of public expenditure, took steps to save £100 million by requiring students from outside Europe to pay full costs. The money was DES money and part of the education budget. Was the Foreign and Commonwealth Office consulted? Did the Cabinet approve of this? Or was the decision an entirely departmental one?
Quite suddenly, as a consequence, the whole issue became of major importance. By 1983 the campaign against the cuts attracted the interest and support of the noble Lord, Lord Pym, when he was Foreign Secretary. He proposed what came to be called the "Pym package". It was additional expenditure of £46 million over three years, but I suspect that the new interdepartmental liaison committees which came about were even more important for the future.
The committee that prepared this report has been considering the situation and it is in the educational aspects that the most significant reappraisal has taken place. The events of 1979 led to a dramatic drop in students from overseas which coincided with a general reduction in university funding. This paradoxically increased the importance of sources other than UGC grants, including student fees.
Though the numbers and income have improved the concern remains that a new group of students is coming—those who can pay. There was a sharp difference between the attitudes of the Department of Trade and Industry to the matter and the Foreign and Commonwealth Office. The latter co-operated, the DTI did not, even with students directly concerned with industry in their own programmes.
We must give some consideration to the financial aspects of this matter. It is pure fantasy, as some academics argue, that institutes of higher education have a prerogative to admit an unlimited number of students and then impose on government the duty to pay for the number so admitted without differentiation between home and overseas students. It is true that institutions would like to treat all students in the same way as far as fees are concerned, but their power to do so is circumscribed by financial dependence on governments which in practice allocate grants on the basis that the universities will charge differential fees.
This is the practice in the Commonwealth, but the United Kingdom is the only country in the Commonwealth which charges full-cost fees to overseas students and then ameliorates the effect by making awards to special categories of them. Australia has not gone quite so far. They have quotas for overseas students by institution and by course and they impose charges, which fall short of the full costs, upon those within the quota.
There are two main objections to a policy of full-cost fees as a means of limiting educational exchange. First, it discriminates against private students who, although academically good, cannot pay the full costs and fail to get an award. The system in fact does not produce the best mix for educational purposes. The second objection is based on the erroneous
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assumption that students are nothing more than consumers of an educational product.
There is another area where Britain has gone further than any other Commonwealth country. By 1982 Britain completed the withdrawal from universities of that part of the grant previously attributed to overseas students. To make things more difficult the grant for home students is now being steadily cut. A deplorable inconsistency in the United Kingdom's policy is the rejection of quotas as a means of regulating the flow of overseas students, but using quotas for controlling the number of home students.
The attitude of sending countries both within and outwith the Commonwealth is important. They naturally critically examine the relevance of some courses for overseas students and the predominantly one-way movement of students to the major receiving countries. Most accept as inevitable some measure of differentiation in fees and charges between home and overseas students. Indeed many practise differentiation themselves. But they are strongly opposed to full-cost fees which they regard as exploiting the students and damaging to their own development plans and prospects.
Without question they regard education as the key to their development, and to that end they are spending a huge proportion of their budgets on all phases of education. Many of them have now reached the point where the expansion of primary and secondary schools is producing candidates for tertiary education at a rate which is beyond their ability to accommodate in the shortterm, even though they are also devoting a large proportion of their resources to the expansion of the tertiary sector.
Therefore, their need for places in overseas universities is both urgent and extensive, and they regard the introduction of full-cost fees by Britain, and the rapid increase of fees in other Commonwealth countries, as untimely and ill-judged. They consider it unfair that preference is given to European Community students, and in the circumstances overseas countries within and without the Commonwealth feel that they have no option but to seek value for money elsewhere. They are finding that in India, the United States, the Soviet bloc countries and substantially in Japan. That is not to mention Belgium, France and West Germany, which are members of the European Community.
What is the current government policy on these matters? Basically, it is that, first, Britain welcomes overseas students for a variety of reasons. Secondly, in general their education should not be subsidised by the British taxpayer. Thirdly, carefully targeted support should be made available to selected students in accordance with national priorities.
The main conclusions of this report on overseas students suggests that there have been two major developments since the "Pym package" in 1983. The first is the appreciation that overseas students are a £1 billion industry. They state that there is a strong case for the DTI to fund related schemes to help British exports. This is the major proposal of the committee. There is also, they argue, a good case for the Department of Employment helping to fund the

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British Council. Other noble Lords will discuss that matter in more detail.
The second major development has taken place in British institutions of higher education. The cash benefit which the payers of full-cost fees provide is of great importance to impecunious institutions. But they also recognise the academic and research contributions to their institutions that good-quality overseas visitors make.
The authors of this report hold the view that the main weakness of Britain's present position on overseas students is that she abandoned general subsidy with very little re-analysis or re-development of existing targeted schemes. The result is a lop-sided system, heavily weighted towards programmes that neglect all trade and educational targets. The proposals in this import report are designed to correct these deficiencies. For example, one important proposal is to expand the British Council Education Counselling Service. That would cost £2 million.
In the last decade the reception and treatment of overseas students has improved but there is still room for further improvement. Success in this field means so much for the future; their future and ours.
In fact, the departmental system had begun to fail, and a new flexible government response was required involving several departments which had its beginnings in the inter-departmental liaison committees. As the Manpower Services Commission has shown in the industrial field, education and research is no longer the province of one government department.
9.24 p.m.
Lord Elibank: My Lords, I should like to thank the noble Lord, Lord Hunter of Newington, for introducing a debate on what I conceive to be a very important subject. I believe that its importance is not widely recognised by the British public, who probably see it as a rather marginal issue and not nearly as exciting as the discussion on theories and policies on education which fill the media today.
As this excellent report makes clear, the support of overseas students has wide ramifications for our policies, not only in education but in culture, diplomacy and economics. It is of the greatest importance that we give the right measure of support to them. As the noble Lord, Lord Hunter, has made clear, in the modern debate the starting point is 1979 when there was a dramatic change in government policy resulting in a drop in students from approximately 88,000 in 1979 to 56,000 in 1984; a drop of 36 per cent.
That also coincided of course with a change in policy and an attempt by the Government, which I fully support, to target their support for selected students in line with what are conceived to be our national objectives. In most third world countries that is not insuperably difficult, because for the most part there exists in those countries an elite (if that is the right word), certainly a select group of young people who, by reason of parentage, wealth or access to secondary education are destined to be their
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natural leaders. It is to them that we look for an appreciation of our educational system and our national objectives and to them that we target such support as we can offer.
I find it helpful to consider the impact of that change of policy on countries, for the most part in Latin America, with which I am familiar, having lived and worked there. One of those countries is Venezuela, and it has two outstanding characteristics. First of all it has a large supply of indigenous crude oil and is one of the wealthiest states per capita in South America. Secondly—and this is unparalleled in recent times—it has a record of democratic stability in that government and opposition have changed at the right constitutional time with the minimum of turbulence for nearly the past 40 years. I should have thought that Venezuela was just the kind of country in which it would be wise to invest government funds in the selection of suitable students to attend our educational establishments.
In fact when one looks at the figures produced by the trust one sees that the number of students from Venezuela dropped from 775 in 1979 to a mere 109 in 1984. Looking at the Argentine, which is another country with which I am familiar, one sees that we have a long tradition of trade and of cultural exchange with that country which has arisen partly because there is a large Anglo-Argentine population in the Argentine to whom English is, if not the first language, the equal first language and who have long looked to Britain for cultural and trade links. There has also been the unhappy experience of the Falklands war. One might have hoped that one of the ways of ameliorating the difficult relations between Britain and the Argentine would have been an ample introduction of overseas students from that country to the United Kingdom. In fact the numbers have fallen from 99 in 1979 to 18 in 1984.
Lastly, there is Brazil, which I suppose for us is beyond all question the most important and most powerful country in Latin America; again the numbers drop from 540 in 1979 to 370 in 1984. It appears from the text of this study that only 1.5 per cent. of overseas students come from Latin America compared with nearly 50 per cent. from Asia. I respectfully submit that that is an unhappy balance between the respective continents.
When considering policies of this kind I think it is helpful to note what our commercial and political rivals are doing, which is a point touched upon by the noble Lord, Lord Hunter. Appendix D of the report contains a table which sets out the figures for other countries, figures which I think were assembled by UNESCO. Those figures show that in 1984 the United States had approximately 342,000 students, France had 133,000, West Germany had 72,000 and the United Kingdom had 48,000. There are differences in wealth and prosperity between Britain and some of the countries that I have cited, but it seems to me to be some measure of criticism of us that the French think it worth while to take in nearly three times as many and the West Germans nearly twice as many students as we do.
The last point that I should like to make, and again this was touched on by the noble Lord, Lord Hunter,

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and it also appears in Appendix C of this report, concerns the net foreign exchange earnings which we receive by way of students coming to this country.
The report assesses the gains from those in the public and private sector together with their expenses necessary for living accommodation, and also auxiliary expenses which they spend on pleasure, or indeed on their families. With a generous measure of rounding up this comes to a figure of £1 billion. This is a very notable figure by almost any standards. One is led to the conclusion that the modest investment by the Government, or the taxpayer, will be repaid ten-fold by the moneys that these students, and their families, will bring into this country. Therefore, if
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viewed in that light—if for no other reason—it is plain good business.
I suggest to your Lordships that if you consider the national objectives—cultural, political and educational, which are again set out in this report—a pound of the taxpayers' money spent on overseas students can hardly be bettered under any other heading of governmental expenditure. Indeed, it is the best possible investment of our money, viewed long term and viewed against broad national objectives. If this is so, I suggest that the very modest and cautious proposals contained in this report of an increase in government spending of £25 million is quite inadequate.
9.32 p.m.
Lord Peston: My Lords, I should like to speak briefly, concentrating on one or two educational and economic aspects in the report. First, I should like to say that I think it was right of the Government originally to question the support we gave to overseas students. Indeed, I see this as part of a general view of scrutiny of public expenditure. My view is that those of us who tend to favour public expenditure have a greater obligation to scrutinise its use, as opposed to those who think that it is money thrown away. Therefore, I do not object to the Government looking at this matter, as they did, and asking questions about it.
I think that what one does object to is what the Government then did, in particular the extreme way in which they acted at that time. If I may quote the relevant paragraph in this excellent report:
"Britain is not the only country to have revised her policy, nor is she alone in moving from general subsidy towards more targeted support which may serve the receiving country's interests more directly and at less expense. Where Britain is unique is in the precipitate, brusque way in which the full-cost fees decision was taken".
It goes on to say that the result has been damaging to British interests. That seems to me to be entirely right. Indeed, perhaps I may say that one of the matters that worried me at the time was the wrong signal we were sending to the rest of the world. In a sense what we were saying was that we were such a failure as a country that we could not afford to welcome the foreign students at less than full cost fees; I hope that is not a signal that we shall continue to send.
As I have already said, the objection is not to the scrutiny or to asking questions; it is to what has been done. However, I think that bygones ought to be bygones. The basis of the report is to ask to where we can move forward and in what ways. I have to support the noble Lords, Lord Hunter and Lord Elibank, in emphasising, first, the enormous educational advantages we receive from overseas students. I see these in two ways. First of all, those of us in teaching universities or who have been students at universities have simply gained in terms of educational experience from the presence of students from other lands.
Speaking personally, when I went as a young man to the London School of Economics I am pretty sure that I had never met a foreign person in my life—or at least not many. I certainly had the typical young Left-winger's view of America—namely, I was very strongly anti-American. At the LSE I then for the first time in my life actually met some Americans. There were quite a lot of them and it turned out that they were genuine human beings, which had never occurred to me before. I was not to know then that I would end up in your Lordships' House.
But I cannot believe that the transformation of my view of Americans was altogether a bad thing. I then—which is true of any of us—became an overseas student and did my graduate work in the United States. I am quite certain that, even though my views may differ from those of the present American
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Administration, they would think that not only I and many others of us who went to the States gained but they had gained as well.
Let me add in connection with that that one must not mistake the nature of the game. The argument which I remember at the time was that people were saying that all these foreign students come to us but they go away and do not love us. They do not say thank you. But that is not the whole point. The point is that they may understand us better. In other words, we might at least hate each other on a more informed basis. Therefore I certainly hope that, in so far as there is a foreign policy aspect to this matter—and I dare not trespass into that area—it is not based on "Do they love us? If not, we do not want them".
The other question that one is always asked about this subject is: why are we so right in connection with our attitude to foreign students when everyone else has a different view? If having overseas students is such a bad thing, why does the Soviet bloc try to coax as many as it can get? Why do the Americans try to get as many as they can get? Do we not feel that Britain has a contribution both to the world and to herself by welcoming such people in?
I turn briefly to the economic side, but let me add that although the silver report produces a very powerful economic argument, I would not base policy on the economic side. In other words, even if it is demonstrable that we gain economically, I would still want to argue overwhelmingly that having overseas students benefits this country in the broader educational and cultural sense. But it seems to me that there are obvious economic gains which have already been made. It must be immensely to our advantage if more people in the world use English and regard English as a usable language. That must help exports. Indeed, more generally, I find it hard to believe that the long-run export potential of this country is not increased by having overseas students, who will, we hope, assuming that our education system is as good as we believe it is, rise to positions of power and importance.
In connection with that let me read a second extract from a most excellent letter in today's copy of The Times from the president of the Royal College of Physicians of Edinburgh. He wrote—and I hope your Lordships will bear with me if I give the full quotation—
"A recent visit to five countries in Asia in order to promote postgraduate exchange in medicine caused me despair and embarrassment at being British. Time and again I was asked: why is Britain turning away from those for whom it has provided educational opportunities for so long? My particular concern is the punitive fees which the University Grants Committee (on Government instruction) has recommended for postgraduate courses in medicine for the last six years: for 1987–88 it is 'not less than £8,960'.
Many may not realise that Britain used to be the key country for postgraduate training in medicine, not only because of its traditionally high standards in medicine but also because we offered—and continue to—crucially important training in clinical skills as distinct from technology: in other words, how to be a good doctor".
The point I would make is partly that we have an obligation to carry on with that work; but, secondly, that the likely demand for medical equipment and similar things which we produce in this country must be beneficial.

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I turn lastly to one practical suggestion in particular in the report that I hope we would all support. The report mentions ORSAS and recommends that there should be what it calls a "son of ORSAS". It refers to a scheme which would take the form of:
"DES block grants to individual institutions channelled via the UGC and the NAB".
The Overseas Students Trust was not to know that within the next few weeks the UGC and the NAB will be abolished but other institutions will take their place. The report states:
"These block grants would be used by the institution to make awards of variable amounts (the minimum they judged necessary to attract the desired student) to students of all types, other than research postgraduates".
That seems to me to be an extremely good idea. The decentralising of that kind of system to the level of the institution seems to me to be admirable. My only additional comment to that, which I think the noble Lord, Lord Elibank, also mentioned, is that it seems to be somewhat too parsimonious. We should like to see a rather larger sum.
I say more generally that we need overseas students in any case because we need their money. A large number of our departments, including to some extent my own, are financed from the income that we earn from overseas students. However, I object to the limitations on what we can do. In a sense the other objection to full cost fees is that they are almost certainly not optimum. We shall probably end up with fewer students and less money than if we were free to choose the fees on a more finely tuned basis.
In sum I hope that on the basis of this report the Government will announce that they are at least willing to rethink their policies on these matters, to move to a more positive stance and to show much more subtlety in their approach to overseas students.
9.42 p.m.
Lord Bonham-Carter: My Lords, like the noble Lord, Lord Elibank, I should like to thank the noble Lord, Lord Hunter of Newington, for introducing this debate tonight. It is a highly necessary debate although it seems to me rather sad that we should have to have it. One of the troubles with this debate is that all the arguments in favour of behaving more generously towards overseas students seem to be self-evident. Therefore to repeat them seems to be redundant. These arguments are admirably set forth in the excellent report by the Overseas Students Trust. We should thank that trust. It deserves our unqualified congratulations.
I, like the noble Lord, Lord Peston, will rest my argument to some extent on what academics call in a somewhat patronising fashion anecdotal evidence. By that they mean evidence gained from one's own experience. That seems to me to be on the whole rather good evidence. I was an undergraduate at Balliol and a Harkness Fellow at the University of Chicago. For some years I was a governor of the LSE. Therefore I have some personal anecdotal experience of how much overseas students bring to academic institutions by their very presence. I also realise how profoundly influential it is at a relatively
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young age to spend some time working in a foreign university where the conventions are different, where the expectations are different and where one is a total stranger.
I was at the University of Chicago in 1947 at a time when the United States was finally trying to make up its mind as to what its role would be in the post-war world. To live in Chicago in that time, which then had the largest Polish population of any city in the world and which was still pretty isolationist, was to learn how remote Europe was from the United States of America. The United Kingdom was a far-away country of which they knew very little. Indeed, when one told them—after they discovered that one was English and not from Massachusetts or Florida—that one was going back, they looked at one with astonishment and some alarm that one was to return to that extraordinary place from which one had so luckily escaped. To travel over that huge country and experience both its variety and uniformity, as well as the whole educational experience, could only leave an imprint on one's mind, attitude and understanding of the world which can hardly be assessed in value.
The number of overseas undergraduates at Balliol—Seretse Khama was one at that time—and at the LSE were an essential component not only of the academic but of the social life of those admirable institutes of higher education. That personal experience was and is reinforced by considering the impact which Rhodes Scholars have had on the life of the United States, and not least on its political life. I rang up Rhodes House and oddly enough they have done no elementary research or follow-up on that subject.
However, the impact has obviously been considerable. For example, in 1947 when the whole posture of the United States in the world was being considered, one of the leading advocates of an interventionist role was, or was soon to be, chairman of the Senate Foreign Relations Committee. That was Senator Fulbright, after whom, appropriately enough, the Fulbright Scholarships are named. Dean Rusk was subsequently Secretary of State. Carl Albert, who was subsequently the Speaker of the House of Representatives, was also a Rhodes Scholar. There are today in the Senate five former Rhodes Scholars. General Rogers, until recently the head of NATO, was also a Rhodes Scholar. I suspect that if we looked at the German Rhodes Scholars we would find that their records in the last war were interesting. Von Trott, for example, was a Rhodes Scholar.
The impact of those Rhodes Scholars on American political life is something which we should not neglect. I admire the high-minded way in which the noble Lord, Lord Peston, says that he does not think that political influence should matter. However, I think it matters a bit. The debate which we are having tonight is closely related to a debate which we have not had but which I hope we shall have shortly on cultural diplomacy. Student diplomacy and cultural diplomacy are very much alike. In fact, they are part of the same thing. They are a powerful way of increasing international understanding and

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extending British influence. It is therefore not surprising to me that the noble Lord, Lord Pym, when he was in the Foreign and Commonwealth Office, produced the "Pym package".
As the noble Lord, Lord Hunter, indicated, it is extraordinary that the Department of Trade and Industry should have taken such a myopic and insular view of the importance of overseas students. I very much hope that the Minister will pass on to the department the adverse comments of the House on its past behaviour and encourage it to do better in the future.
If overseas students contribute to our universities and to our influence, as has been said, they also bring immediate short-term economic benefits, and in the long run I cannot believe that trade does not follow education. Certainly in my experience—which has been to some extent in the world of books, and particularly educational books which are in themselves influential—they reinforce trade links which can be established.
It strikes me that in 1979 the Government, in their rather doctrinaire way, instinctively shied away from encouraging overseas students in the same way that they shied away from assisting the arts and in the same way as they did not much like the idea of cultural diplomacy. Their reaction was to leave it to the market. We know that the market does not work in these areas. If there is an overseas students policy based entirely on market considerations there will be hardly any students from the developing world yet that is the area where it is most important that we should contribute.
I take some comfort from the fact that the recent announcement on the funding of the arts was such that we may believe that the Government are learning from experience. I can only hope that they will. As the noble Lord, Lord Peston, said, if they do not learn from our experience, they may perhaps learn from the example of our co-member countries in the European Community; namely, France and Germany. Japan also plans to have 100,000 students by the end of this century.
Finally, I should like to revert to the developing world. The number of students from the developing world has dropped by 30,000 since 1979 and from the Commonwealth by 18,000. It seems to me, as I have already said, that education is almost the most effective form of aid which we can offer those countries. How can they pull themselves up from where they are without educational skills which the developed world alone can provide? It seems to me a mean-spirited and short-sighted policy to cut down on this investment. It is also, I may add, one of the strongest bonds which cements the Commonwealth.
I share the sentiments expressed by the three noble Lords who have already spoken. I hope that the Government will look once more at their policy towards overseas students. If they cannot revert to something like the previous position, which is roughly speaking the position which the French and Germans now hold, then at least they can build on
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the Pym package and on the constructive and very modest lines recommended in this admirable report.
9.53 p.m.
Lord Seebohm: My Lords, I think that this is a very appropriate day on which to ask the Government the questions we are asking tonight. The report has not been out very long and I have read it with great interest. I believe that it is a very valuable document indeed. I was very relieved when I reached the last page to find that the financial requests and suggestions it makes are very modest. It is not an extravagant recommendation at all.
I entirely agree with what the noble Lord, Lord Peston, said that in 1979 it was time to review our policy for overseas students and what we were spending. The way in which it was done was disastrous. It caused an enormous amount of ill-feeling, which still exists and which I think was a very great tragedy.
I have reason to know about this because in 1979 I was chairman of London House for overseas students. For those who do not know what that is I shall briefly explain. It is a college-type residential establishment for overseas postgraduate students. It was originally started in the 1930s for Commonwealth students. It has rather changed its character over the years, as it had to. As far as possible it has tried to have a balance of various races. Its original charter included America as well as the Commonwealth. Since then we have included a certain number of people from the Common Market and we always have about 20 per cent. of British students. I think the mix is extremely good and extremely important. It has quite an amazing effect on the postgraduates who pass through it. All the countries that I have visited have formed their own associations of old boys and girls of London House who return regularly—many as very important people, professors and so on—if they want to brush up on a particular subject in their discipline.
In 1979 after the cut, the change in patterns at London House was quite dramatic. First, it was perfectly clear that the quality of people dropped considerably. To begin with it was only the rich who seemed to come, and most of the high-tech people from medicine and engineering, which is one of the strengths of that place, disappeared. They all seemed to flood to America. As to some places where we kept up the proportion, for example, Malaysia, it was not the Malaysians who came but the rich Chinese traders. The whole pattern seemed to change. We are never short of people because our waiting list at London House is enormous but there is no doubt that there was a change in the quality and type of people, which from my point of view was very sad.
Since that time things have improved. We are now receiving a few people from places like Malaysia, Hong King and India, who faded out for a time. However, we are still receiving many more applications from the richer countries, in particular, America, but not, unfortunately, from New Zealand or Australia, whose people used to come. The effect of losing those high-technology people does not need

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any underlining. That has already been stressed by other speakers, who referred in particular to the subject of the long-term financial advantages which this country will receive.
There is some good news. There are more students coming and returning to Britain. However, there is still some way to go before we reach the sort of numbers that we had before. Whether or not that is important, I am not sure. There has been an increase of about 13 per cent. in the last year or two compared with the 38 per cent. drop which took place in the year or two after 1979.
An important new development is the system of marketing overseas which is being carried out mainly through the British Council. This seems to be a very good development indeed. The British Council's effort is called the British Counselling Service Overseas. That provides a very positive image to other countries of education in Britain, and this service should be greatly expanded. It started in only three countries and now extends to six, which include Hong Kong, Singapore, Malaysia; there are plans to go to Brunei, Japan and Korea. This scheme is presently funded mainly by the universities and the polytechnics to the extent of about £500,000 per year. I hope that the Government will top this up when necessary because I believe that it should be spread into far more countries than the six that I have mentioned. Many other countries are competing with us very strongly in this sphere and most of the money comes from their governments.
The other side of the coin, which I think is extremely important, is that when these better students leave, they return home with a correct and favourable impression of Great Britain and its education system.
There is quite a lot being done in Great Britain, in particular by such bodies as the Overseas Trust, the Victoria League, London House and other voluntary bodies. However, I was extremely interested to see that recently there was a launch on, I believe, 17th of this month by the Hospitality for Overseas Students, HOST, which has been primed with about £50,000 a year for three years by the British Government, £10,000 a year from the Victoria League and £10,000 a year from the British Council. This is to provide hospitality, presumably to start over the coming season, for overseas students. I understand that already applications for about 2,500 students have been received and a great "number already placed. This is a very exciting development from the point of view of improving the opinion that these people will obtain of the United Kingdom. I am quite certain that, until now, far too many fell through the net.
The Victoria League started this scheme and it is encouraging that Sir Anthony Kershaw is to chair it. Mrs. Barnet who was the organiser of the Victoria League has agreed to take over the organisation of this co-ordinating body. It is a matter of interest that both the past chairman and present chairman of the Victoria League are in the Chamber tonight. That is the important point that I make—the way in which we treat students when they are here and the trouble
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we must take to see that they receive the right impression of this country and go back with the feeling that it is not such a bad place after all.
My final comment is that it might be a good idea, now that this hosting is going to be so important, to have a TV programme. I am sure that people will be very interested and that the response will be enormous. That is all I need say.
10.1 p.m.
The Earl of Limerick: My Lords, it is good that the Question put by the noble Lord, Lord Hunter, has given us the opportunity already this evening to hear five extremely well constructed speeches on this important topic. I greatly enjoyed listening to them and cannot disagree with a single word said.
Inevitably I shall be making some of the same points but I shall try to introduce a new slant. For this evening's purpose I assume that history started in 1979 with the full cost fees announcement. The shock waves went round the world, not on the principle but on the suddenness and the magnitude of the adjustment made. Of all decisions made at that time, somewhat in haste, I suppose that is the one that my noble friends now most regret: witness, first, the moderation of the subsequent increases and, secondly, the Pym package of 1983.
However, damage had certainly been done. On my subsequent visits to India, Thailand, Malaysia and Hong Kong the message was the same. It was one of sadness and, "How could you do this to us? How could you hazard the business and cultural links which we have both enjoyed?". I draw again on anecdotes, in regard to which I am much in agreement with the noble Lord, Lord Bonham-Carter. In the course of a seminar in Bombay in 1981 I was approached by a delightful Indian, who introduced himself as the president of the India-Cambridge Association. He was a man' who clearly wore a Union Jack next to his skin. He said that he had very few members joining his association just at a time when our political and business relations and the sentimental climate was more favourable than it had been since 1947 for getting closer.
The point he made was that his younger colleagues, presidents of the India-Harvard Association and the India-Yale Association, had plenty of members joining them. He found that sad. It was summarised in the words of the conclusion in the silver book:
"One approach"—
that is, the national approach—
"[general subsidy] was abandoned before the alternative [selective, targeted support] had been analysed, prepared and put in place".
Overseas students may or may not be a good thing per se. I would argue strongly, as others have done, that they are. They broaden our culture; they bring us to an understanding of problems faced overseas which are often much greater than our own; they encourage our own young people to travel. I too was an overseas student in the United States, in my case at secondary school level. I consider the cultural advantage that I now enjoy in being able to explain to my children what is happening on Channel 4 when they are playing this strange game of American

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football, to say nothing of basketball, baseball and ice hockey, to be real, if intangible.
It is however easy to recite instances from direct experience where the existence of a caucus of British-trained students is of direct benefit to the economy. For this, I believe we have to thank not only the educational establishments, the professors and the friends of those students, but also the landladies in Manchester and Cardiff, the pier attendants at Brighton, and others who go to make up the whole image of our country.
Again anecdotally, the best and incidentally the cleanest brotherhood—I almost said mafia—that I know is that of the Old Centralians, the engineers trained at Imperial College, London University. Whenever one Old Centralian wants something done he always knows another Old Centralian who is available to do it for him. This is a very natural way in which friends turn to friends, and they would not go outside that brotherhood unless they could not find what they wanted inside it.
I think that it is easy to miss two points in this regard. One is that the overseas students often come to us from countries where trained people are few, and their familiarity with our language, our standards and so on is therefore going to be unusually important. Secondly, they come from countries where responsibility is achieved at an early age. To put that in commercial terms, you are liable to get a quicker payoff for your educational investment.
The thrust of all the speeches has been that overseas education is in the motherhood category. It is a Good Thing. However, there is still a case for support, direct or indirect, from public funds. Here, one has to get rather commerical and to establish that to a significant degree trade does indeed follow the mortar board. Last night I was at the Middle Temple watching fascinated from the gallery as my son was one of 120 people being called to the Bar. Those boys and girls, many girls, came from almost any country you could think of. Their influence when they return home is going to be considerable.
It has been established in the silver book, and indeed in other studies, that we really are talking about a £1 billion industry. It does not need much addition to be confident of that figure. It generates a very measurable contribution to the balance of payments through direct spending and employment.
It has already been stated that in 1985 there were 56,000 overseas students in the publicly-financed sector of British further education. The point that has not been made is that this is about 10 per cent. of the total student population. Three-fifths of those were in universities, the remainder in polytechnics and colleges of further education. It is interesting to note what they were studying. Forty two per cent. were studying science and engineering and many of the remainder were following business and management courses. Those are subjects which clearly are directly relevant to our commerical relations. Apart from those 56,000 in the publicly-financed sector there were at the same date of counting in 1985 284,000 in private colleges. The great majority of those—more
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than 90 per cent.—were enrolled in one of the several hundred English language colleges. That again is a way to take advantage of one of our great national assets.
I shall turn to a somewhat different aspect—the commerical value to specific institutions. I should declare an interest as chairman of the governing body of the City of London Polytechnic. We, in common with most other advanced tertiary educational establishments, face some horrendous budgetary problems as we try to keep our courses going. We look at the prospects of attracting more overseas or specified students (those who do not come from the EC). For the current academic year, the standard fee for a full-time specified student is just over £4,000. Where is the downside? If we have more students, will that drive out our home students? At the margin possibly because of the way our institutions are funded.
Given that we are all struggling, there is some arithmetic which says, "Suppose that you are £2 million short of your budget, all you need to do is to attract 500 full-fee paying students at £4,000 a nod". That is beguiling, but it is deceptive. First, we must have regard to the institutes' educational policy and the priority that they must give to scarce resources. Secondly, such a policy will normally build up over the three-year currency of the courses. Thirdly, there must be an ability to offer attractive courses, and, fourthly and often the most critical point, especially with inner city institutions, there is great difficulty in providing suitable student accommodation.
There are then the marketing costs of the exercise. Marketing is done partly by direct promotion, partly by collective promotion (the good work of the educational counselling service of the British Council has been mentioned) and partly by a £75,000 grant from the Foreign and Commonwealth Office to the British Council to enhance its general information service.
Our market share is not impressive and it has been falling. About 1 million students study outside their own countries. Of them, we now have about 5.5 per cent. The numbers fell by 36 per cent. post-1979. What does that add up to? First, there is a need for a policy which must embrace the interests of the departments involved, notably the DTI, the DES, the Department of the Environment, the Foreign and Commonwealth Office and, one almost forgets but never should, the Treasury. Secondly, there is a need for funds to back the emergent strategy. Against the background of the £1 billion of direct benefit, and the unquantified but undoubtedly large stimulus to British exports, Martin Kenyon and his colleagues from the Overseas Students Trust begin to look like Warren Hastings—astonished at their own moderation. Their proposals in the silver book are costed at £25 million, of which the idea of a DTI trade-related scheme, which is of interest to me (awards to overseas students to help British exports), would cost a mere £10 million. In commercial terms, that might be seen as a cost-effective investment.
Britain's reputation in education stands high. We should be able to take the pick of the overseas students. Imagine in 10 years' time there might be a dozen or so economic Ministers, more than a handful

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of very successful entrepreneurs, and in 20 years' time perhaps a couple of well-disposed prime ministers or presidents, who had been students here.
The third point is this. Let us not always run to a government. We need more self-help organised by the educational institutions themselves. The education counselling service has had some success. Surely there is room for extending that to other countries. I was delighted to hear from the noble Lord, Lord Seebohm, that this is already in train. The British Council, with its experience and existing overseas network, is well equipped for this. However, given its funding problems it seems certain that some pump-priming will be needed as indeed is recommended in the OST report.
Competition in this trade is fierce. We are not the only English-speaking country, although we invented the subject, and we are certainly not the only one whose education system is internationally well regarded. While our student numbers were falling, numbers in other countries were growing rather rapidly. Many of those countries remain more active than we do in attracting overseas students. Their motives may vary but their policy is in good part predicated on the prospect of substantial foreign exchange earnings for their countries.
Finally, let us reflect on what other countries are doing. Australia has set up a number of trade missions in South-East Asia to explore the potential for marketing higher education as an export. Japan has decided to increase its overseas student population tenfold. Even then it would be only 100,000 by the end of the century. The United States has much the largest number of overseas students—340,000, over a third of the total. It is therefore by far the largest host country. The United States has 360 government-funded centres abroad to counsel prospective students, compared with the three (perhaps it is now more) education counselling service offices which are run by the British Council.
There is therefore much to do. There is much benefit to be gained by the country in following the well thought out recommendations of the OST. These are ridiculously cheap in relation to the medium-term benefits. Other countries perceive these advantages more clearly it seems than we do. Let us waste no more time in pursuing and overtaking them.
10.18 p.m.
Lord Thurlow: My Lords, this is a good moment to discuss this subject. It is a time of opportunity. We can now look back with the perspective of eight years. We have a pretty good idea of the situation now. The accent of the debate this evening, like the accent of this very constructive document before us, is positive. I therefore do not think that it is a time for wringing of hands. However, as the noble Lord, Lord Elibank, looked at the position in the South American territories, with which he is familiar, I have looked with interest and a measure of concern at the trend in the countries of which I have had direct experience.
I served for three or more years in each of six Commonweath countries. In the case of one of them the number of students went down by half between
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1979 and 1984; in the case of New Zealand it fell by a third; in the case of Nigeria by two-fifths; in the cases of India and Canada by 14 per cent. In the case of Australia, which I do not know so well, it fell by half, and in the case of the last territory that I had the honour to govern it went down by one-third. These are disquieting figures. I assure your Lordships that they represent a reality of lost opportunities for the future.
However tonight let us be positive. In being positive we have this splendid set of recommendations. I should like to endorse what the noble Earl, Lord Limerick, said about the debt that we owe to the Overseas Students Trust. It is a quite extraordinary testimony to the effectiveness of a non-governmental organisation set up by private funds, and, in effect, doing a great deal of the work of the Government for them. In 25 years of total commitment the trust has amassed a tremendous experience. Its recommendations, as the press has said, are short on sensation but long on common sense. That report is moderate. It is a balanced report, nothing extreme, thoroughly researched after exhaustive discussion with all interested parties.
I for my part warmly endorse all the trust's recommendations. I should like to pinpoint three of them. The first, not a very colourful subject, is the question of statistics. It is rather a scandal that in this discussion we cannot command statistics that bring us nearer to the present than 1984. That is not good enough. The Department of Education and Science has a strong statistical department. Can the department take this statistical function under its wing and devote resources and expertise to seeing that we have an up-to-date statement of the figures within, let us say, a year?
My second point also is not a very glamorous one. It concerns the machinery in Whitehall for helping Ministers to evolve a coherent policy, synoptic and capable of dealing with change. I rather doubt whether the interdepartmental group set up some years ago and the very useful round table meetings that take place with non-governmental organisations are up to what is required to help Ministers to identify the initiatives that have to be taken as distinct from reactions to current events.
The third point that I want to mention is the central one that the noble Earl, Lord Limerick, spoke about and which concerns the biggest chunk of resources that are asked for—that is to say, the issue of trade-related targets. Like most of your Lordships I have in the past been disappointed by what has been described as the stone-deaf posture of the Department of Trade and Industry in relation to the whole subject of possible payoff from investment in education. I am sure it is short-sighted, and here is an opportunity for the department to reconsider its attitude.
From my own experience I know that when those who have become familiar with this country in various educational ways mature into positions of prominence in their own countries they constitute an enormous potential asset for ourselves, and I know that I am speaking to the converted in addressing the noble Lord who will answer for the Government.

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It is impossible to quantify the results, but they are mainly indirect and intangible. Contacts are a necessary and indispensable part of international relations, and this is one of the means by which we can form the contacts that we require. I hope that the noble Lord the Secretary of State for Trade and Industry will take a personal interest in the recommendations of the Overseas Students Trust in relation to his own Vote.
Perhaps I may illustrate the value of contacts by a pregnant figure. Of the heads of state in the world in 1984 more than a third had studied in countries other than their own, and more had done so in this country rather than any other. Twenty-four countries had leaders educated in the United Kingdom. There is certainly no more valuable way of securing contracts or resisting unfair or corrupt competition than by being able to deal with a head of state. In conclusion, I should like to repeat my general support for the recommendations of the Overseas Students Trust, which are calculated to promote the interests of this country.
10.29 p.m.
Lord Hatch of Lusby: My Lords, I apologise to the House for not putting my name on the list. This was due solely to the fact that I did not know until today that I would be available this evening. However, I believe that a brief intervention from my personal experience may be of value to this debate.
The first overseas student whom I knew in this country was Jomo Kenyatta when he was at the University of London. The second was Seretse Khama, who has already been mentioned by the noble Lord, Lord Bonham-Carter. Then followed during the 1950s Julius Nyerere, who used to come to a seminar of mine at Edinburgh University, and Tom Mboya, who was brought to this country by the voluntary efforts of Arthur Creech Jones of the Workers' Travel Association. They were followed by Lee Kuan Yew and by Mwai Kibaki, now the Vice-President of Kenya. This was a tremendous contribution from the educational establishments of this country to the leadership of the world.
However, it was more than that. As my noble friend Lord Peston has pointed out, it brought to this country a great wealth of diverse cultures that were of immense value to us and to the professors and lecturers. In my academic experience, there has never been as exciting a time as in the first five or six years after the war, when so many ex-servicemen and women from the colonies were in our universities. In this House today we have an example of the value of overseas students to our culture and society in my noble friend Lord Pitt.
I should like to extract from my list two particular examples. Under the present scheme, Julius Nyerere, who did not go to school before the age of 11, would not have been able to come to a university in this country, and neither would Tom Mboya, because neither could have afforded to do so. I had sad experiences five years ago when I held a chair at the University of Zambia when, time after time, I recommended valuable students to universities in this country only to find that they went elsewhere simply
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because of the cost. They were offered better opportunities and it would not cost them so much to go to universities in other parts of the world.
I welcome the report but I believe that it is too modest. The investment that it suggests could be greatly increased and would be extremely cost-effective.
I should like to put two points to the Minister. The first relates to the reference in the report—though not extensive enough—to the importance of the character of the courses offered to overseas students. I should like to see a great deal more emphasis on matters such as development and opportunities for overseas students to come to this country to learn all the phases of development. I should put the greatest emphasis on agricultural development.
Secondly, it is of immense importance that this country should recognise that, in a situation such as that of South Africa, one thing we can do is to train those who will be in a position to give leadership and administration, and who will take part in the development of that society when it becomes a black majority society.
Ten years ago I was asked to review the Centre of Southern African Studies at the University of York. I proposed to them then, in the middle of the Rhodesian war, that one of the things they ought to be doing was to take students from Rhodesia—whether in exile or in Rhodesia—and train them for the jobs they would have to do when majority rule came into operation. That is still the position as regards South Africa.
I should like to remind the Minister that some months ago the Leader of the House assured me that at the last-but-one Commonwealth Conference Britain had pledged herself to make available funds for special training for South African students. I asked him later on if that would apply to the kind of work that is being done in York, Cambridge, Oxford and other universities and he assured me that it would. I hope that tonight the Minister will be able to say that, in addition to what is covered in this report, there will be government money, as was promised at the Commonwealth conference, for greater training for those who will have to bear the brunt of building the new South African society of the future.
10.35 p.m.
Baroness Seear: My Lords, I think that every speaker this evening has been somewhat anecdotal and has drawn on personal experience. I fear that I shall be no exception. In each of the 30 years that I taught at the London School of Economics I had in my group overseas students who undoubtedly made a very great contribution and who also had a very great effect on me. I can say that from all the aspects that we have discussed tonight—economic, political, social and educational—there is a tremendous value in having overseas students in this country.
In the short term, a number of them spend a great deal of money in this country—the sum of £1 billion has been mentioned. I once had a Kuwaiti student who brought with him his wife, two children, a nanny, a cook, a chauffeur and a car. What he

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disbursed in this country must have paid my salary for at least three years, if not more. There were others of the kind. I doubt whether Kuwait could run to many students like that at the moment, but it did happen and could happen again.
When the London School of Economics had to raise the money to build its magnificent new library, the late Lord Robbins—Lionel Robbins—went round the world twice visiting innumerable groups of old LSE alumni, who poured out money in order that the library could be erected. It would have been extremely difficult to get that library built but for that support, which came completely voluntarily and freely with no quid pro quo. Many other examples could be given, but the economic argument has been covered thoroughly in the debate this evening.
On the political side, I find myself almost entirely in agreement with the noble Lord, Lord Hatch, which is not perhaps my most usual experience. Surely there is nothing more useful that we can do at the moment than to further the education and training of people in South Africa. The time will come when black South Africans will have to play a far greater part in the political and economic government of that country and it is vital that they should receive now the education which will enable them to do it.
After all, it is to the great credit of this country that before we withdrew from our colonies we did our utmost to see that people there were trained to take over adequately. It has not been as adequate in some cases as we would have wished, but the effort was made and opportunities still exist.
We shall never fully resolve the argument about sanctions, but surely we can be absolutely in agreement—and this point has been made several times and been generally agreed—that more money spent on education and the opportunity to offer education in this country to South Africans are most effective ways politically to contribute.
When it comes to the other developing countries, again there is a very considerable job to be done. Of course, as the noble Lord, Lord Hatch, has pointed out, a great many of their students will not be able to come here if they have to pay fees of the kind that are being asked at the present time.
Perhaps I may mention one group of students from the developing countries who have not been referred to this evening; namely, women. It is extremely dangerous to educate the men of a country and not educate the women. Innumerable problems flow from doing that, as anybody who has been to any of those countries will know. If the men are educated well ahead and in quite a different way—and I am not making a feminist point; it is on a far broader basis—you educate your men away from the standards of culture and understanding of their women. Yet, with the sort of fees that we are charging, what chance is there that families, of the kind that we are talking about in countries as impoverished as the developing countries, could begin to think of paying this kind of money for the education of their daughters?
In this admirable report I cannot find—although I may have overlooked it—any reference to the number of women among the students coming from
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overseas countries. This is an extremely important point. It is a figure which, if it could be obtained, we would all like to have because there is an issue here of the highest importance. There is, also, as other speakers have said—but it comes home very strongly indeed if you teach students of mixed racial groups—the tremendous value not only to our own students but to other people in this country.
We know that we still have a big problem of race relations in this country, but this is partly because so many people have never had personal face-to-face relationships with people of a different culture or colour. It is when you get to know people on a personal basis, as students get to know one another—taking them to their own homes; beginning to know and like them as people and picking up friendships—that you break down these ridiculous stereotypes. However, perhaps these stereotypes are not quite so ridiculous, because if you have never had the opportunity to know people of a different culture you naturally develop in that direction and that stays with you until the opportunity of personal experience presents itself.
As the noble Lord, Lord Peston, said, he even came to like Americans, despite his built-in prejudices, when he had the opportunity—or was forced against his will—to meet them face to face. Surely, it can have nothing but a good effect on our own race relations problems if our students meet students from other countries and students of other colours and cultures and get to like them, as inevitably and invariably happens when we have a mixed group of students. I shall not say any more about that simply because so much has already been said.
This is a most excellent report, but there are just one or two points I should like to put to the Government, which I do not think are highlighted in it. First, although we recognise that it is improbable that the Government will return to the pre-1979 position, I wonder whether they would consider specially and separately the possibility of doing more for people who are coming for postgraduate courses of one kind or another, whether they be short courses or much longer, and more demanding, higher postgraduate courses. I ask this because I believe that there is a particular value in concentrating on postgraduate courses in a number of cases.
As many developing countries have reached the stage when they can have their own universities, there is a case for suggesting that in many instances it is a good thing for people to do their undergraduate work in the colleges and universities in their own countries but that subsequently they should go overseas to do their postgraduate work. They are therefore not separated from their own country at the undergraduate stage. Furthermore, it is unlikely that those countries will be able to develop the degree of specialisation that is required for really good postgraduate work. If we cannot go the whole way and offer wider opportunities at both the undergraduate and the graduate levels, could not the Government look again at the costs, or charges, to people who are doing postgraduate work?—which, by definition, means that they are getting a selective group of students who are ultimately the most likely to take leadership positions in their own countries.

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On a rather different note, but one which I think is of considerable importance, I should like to ask the Government to look again at what seems to me to be an extraordinary economy that I understand they are making. I am told that when the Government are calculating the amount of money that a university is to have for furnishings, equipment and perhaps most important of all for libraries, the allocation is based on the number of students. But the Government, in estimating the number of students, exclude overseas students. If it is true—and I have it on good authority—that they exclude from this calculation (I hope that the Minister is listening) overseas students, who are paying something like £4,000 to £8,000 a year, it seems to me meanness beyond belief. It could not cost much to do the calculation based on accurate figures.
Only last night I met a woman overseas postgraduate student who has all the costs of being in London to do postgraduate studies. She said that when she goes to her head of department to ask for some additional equipment or additional information that she needs, she is told, "Sorry, but we have used up our money for this year. We cannot get it for you until next year". This is a cheeseparing and miserable way of doing things. She was quite good-tempered about it. I must say that I would not have been. She added that she might have to stay on for an additional year in order to finish her Ph.D., because, although she had paid considerable fees to do this study, she could not get what was required as the budget was exhausted when she asked for it. I hope that the noble Lord will look into those points.
10.46 p.m.
Baroness Ewart-Biggs: My Lords, I think the fact that so many people wished to speak in this debate, and also that nobody withdrew, shows how very much appreciated it is by the House. As many noble Lords have said, the intention of the report of the Overseas Students Trust is to bring more coherence to Britain's policy on overseas students, and I think the report has been praised by all those who have spoken so far.
What is good, as the noble Lord, Lord Bonham-Carter, said—which has been proved by other speakers—is that we all start from the same premise; namely, that overseas students are a good thing and that to have a comprehensive policy concerning them is of the greatest importance. But it is clear from the recommendations in the report that the trust does not feel that present government policy entirely reflects that priority, and it suggests some financial implications which would amount to £25 million, as well as the sources for raising that funding. All noble Lords have pointed to the modesty of those financial suggestions and I hope that the Minister will take note of that.
Many speakers have stressed the harm done not so much by the change in the policy of fee-paying in 1979 but by the brusque manner in which it was carried out. My noble friend Lord Hatch made a very cogent point when he suggested that students should receive training in perhaps agricultural development
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or desertification, and I quite agree with him, as I agree with the noble Baroness, Lady Seear, who drew attention to the fact that women in developing countries, who play a vital role in those countries, seem to be deprived of the opportunity of education in this country.
My noble friend Lord Peston emphasised the enormous educational advantge which we and our students gain from overseas students. This was borne out by the Director General of the British Council when he said:
"It is obvious that the academic health of institutions and departments depends on international scholarly interchange … There is … value, both academic and social, to British students from the presence among them of Commonwealth and foreign students. They help to impart that international dimension that all higher education should always have".
He added:
"There is no more distressing sight than a clever but insular person. And the British score quite well at the game of international stereotypes. Only personal contact can provide some immunisation against this disease".
I think that what he said had a certain value.
I wish very briefly to comment on three aspects of overseas student policies. I shall start with government funding policies. It is indeed these policies which significantly influence the pattern of access of overseas students to United Kingdom higher education. But it is here that it would appear that the Government have departed from their original intention, for in 1985 the Foreign Office Minister then in charge of overseas students said:
"We have a moral obligation to help the Third World countries and much of the debate over overseas students policy over the past fifteen or so years, both inside and outside of Government, has centred on how best to meet the demand for education and training from the developing countries without at the same time allowing a flood of students from the richer part of the world".
Yet unfortunately government action on funding does not appear to have matched the stated policy on access, for between 1979 and 1984 there was as much as a 25 per cent. cut in the number of students coming from the poorest 50 countries of the world and a cut of 40 per cent. from all of the developing countries. On the other hand the proportion of total overseas students in the UK who came from all the OECD member countries has increased from 18.4 per cent. to 24.9 per cent. It would therefore seem that a part of the savings from the implementation of full cost fees should perhaps be put back to try to ameliorate some of the damage which has been done. The noble Lord, Lord Hunter of Newington, made that point very clearly.
I wish also to say something about recruitment. Prospective students want and need four things. They need appropriate courses, adequate support systems, adequate funding and appropriate accommodation. After all, they are consumers and they see what they are coming for as a package which has value for money.
But if institutions are going to attract suitably qualified overseas students they must not only meet those needs but tell prospective students about them. It is thought that UK institutions in general are not good at either. They live largely in ignorance of increasing international competition. Again this point has been made by previous speakers.

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Indeed the chairman of the executive committee of UKCOSA made the following remark:
"Marketing skills for the recruitment of overseas students have developed swiftly since institutions became the victims of central government's cuts, but there has not been much rethinking of the responsibilities consequent upon a successful recruitment drive".
He said that the priority was more to get the students in than to look after them, which came rather a long way afterwards. I think that universities and colleges must upgrade recruitment and support services if they are to succeed in maintaining and perhaps expanding their share of the world market in overseas students.
I wanted also to mention support services for overseas students. Here we do have a very distinct worry. The Overseas Students Trust concluded in its report that:
"the presence of overseas students at British institutions will only be mutually profitable in an educational sense if the students themselves are reasonably happy and well integrated into the total life and work of the institution".
The noble Lord, Lord Seebohm, has given some important examples of work that is going on, notably that of HOST. I was very glad to hear of that, but what are the other most obvious pastoral needs of students? What should be done to avoid students getting into financial difficulties? That seems to be a very important point. One must accept that some overseas students will always need access to emergency funds. Perhaps a national fund administered by the DHSS or a non-governmental organisation is a possibility. On the other hand, it is always preferable to prevent financial difficulties arising in the first place. One way of doing that would be to provide guaranteed levels for the duration of each course rather than setting fee levels on an annual basis. That would remove one reason for financial difficulty.
My last point is a matter which has been left out of the report by the Overseas Students Trust. It is the problem of accommodation. It is as if the writers of the report did not recognise that there is a real problem for many students, particularly in such areas as the South-East, Oxford, Cambridge and Aberdeen. However, although the report does not include any research on accommodation, fortunately some research has been done by the London Conference on Overseas Students—of which I am now the chairman and which was previously chaired by my noble friend Lord Murray—which set up a working party last year on accommodation problems faced by overseas students in London. That revealed that provision of accommodation for students with families—who were often research students—was the most pressing current problem. Along with that, there were high rents and shortage of accommodation for single students in the large cities of the South-East.
European Community students fare best because they qualify for housing benefit in the same way our students do. But I understand that sometimes they do not receive it for about nine months and it may be too late for them to benefit from it. When one looks at the price of accommodation in London and other cities, it is quite horrifying. Prices range from—40 for a
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single room to £;80 for a one-bedroom flat and £120 for a two-bedroom flat. All the people to whom I have spoken who are concerned with accommodation for students have said exactly the same thing. I have spoken to King's College student services and to the National Union of Students and they point out that this is a very real problem.
The report last year by the London Conference on Overseas Students made some valuable suggestions. I shall not list them now because it is rather late. However, if consideration is given to further research on the matter, the report could be used as a basis for that work.
The last question that I wish to put to the Minister is one of which I have given him notice and which is again outside the report of the Overseas Students Trust. It concerns the policy towards the liability of overseas students for the poll tax. I understand from a letter from the Department of the Environment which was sent to me that overseas students will be required to pay 20 per cent. of whatever the full community charge in their area will be. I should like to know if that is correct and also what the policy will be concerning the dependants of such students. Will student wives be required to pay the poll tax? That will have an important effect on overseas students who come here, in that they will not only be paying for their fees and a high price for their accommodation but they will also be paying the poll tax. That may affect their feelings on the matter.
Finally, as regards English language establishments in Britain, it is estimated that as many as 400,000 foreigners come to Britain each year to learn English or to continue English studies undertaken in their home countries. The level of services provided by the English language teaching establishments is very different. The British Council currently recognises and inspects some 200 English language schools, of which 185 are members of the Association for Recognised English Language Teaching Establishments in Britain.
As I say, that imposes some control. Outside of that there are about 200 English language schools which are not members of that organisation. Although many of them do an excellent job, it is sad that a large number do not. It would be very good to think that there might be a system of inspection which would be run by the British Council and which would cover all the English language schools. It has been said already that our greatest national resource is our language.
We are most grateful for this report and for the opportunity of debating it. Let me just quote two lines from one of its conclusions:
"there is still much to be done if overseas students are to get adequate value from their time here and return home with a friendly and understanding attitude towards this country. If we fail in this then indeed much of the money will have been wasted".
I think that is a very important point to make.
11.1 p.m.
Lord Glenarthur: My Lords, the Question of the noble Lord, Lord Hunter of Newington, has touched on a subject of great importance. I am glad to be able to give a general description of the Government's stance. I must stress at the outset, as the noble

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Baroness, Lady Ewart-Biggs, would wish me to do, that of course we welcome overseas students to this country. We do so for several reasons. First, we are making friends and influencing people for the future. Secondly, we wish students to return home with an informed and clearer understanding of Britain and British aims and attitudes as the noble Lord, Lord Seebohm, suggested. Thirdly, the experience that students gain here can help them to contribute more to their own countries on their return as well as benefiting them individually. They can also contribute new ideas, attitudes and experience to the academic and social contacts they make here.
There are other more tangible advantages such as those to which the noble Lord, Lord Peston, and my noble friend Lord Limerick referred. Large sums of money have been mentioned; some people have estimated that the figure is as high as £1 billion a year. That may be a slight exaggeration, but certainly the amount of money which is generated is considerable. Institutions are helped through fees.
The noble Lord, Lord Thurlow, made a point about statistics. Statistics are available up to 1986–87. Provisional figures are available in the spring of each year for the previous academic year. The final figures are available by December. Apparently we have to wait for the universities to send in the returns, and that is the reason for the delay.
A number of figures have been referred to this evening. There were in 1986 over 56,500 overseas students in public higher education institutions in this country. They came from 157 countries, including Eastern Europe, the developing world, the Commonwealth and our Western European friends and allies. Eighteen thousand received some kind of financial assistance from the Government during the course of the year. That is hardly a bad record by any standards. In 1980, we decided that an indiscriminate fee subsidy for all foreign students costing over £100 million a year was not a burden we could reasonably place on the British taxpayer. Instead, we now have a number of targeted scholarship schemes, costing about £90 million a year, under which the overseas students are selected for education and training in the United Kingdom. We are convinced that this is a more efficient and cost-effective system, benefiting both the taxpayer and the student. Of course plenty more students come who do not need a subsidy from us. It is certainly true, as the noble Lord, Lord Hunter of Newington, and my noble friend Lord Elibank suggested, that there was an initial dip in overseas student figures following the 1980 increase in fees. However, the numbers are more or less back at the original level and indeed are still rising.
The noble Lord, Lord Peston, referred to a letter in The Times about clinical university fees being too high. I understand the concern which lies behind that, but I remind him that universities are free to set their own fees but usually observe guidelines set annually by the University Grants Committee. Similarly, polytechnics and colleges are guided by the Council of Local Education Authorities.
The noble Baroness, Lady Seear, also referred to the question of postgraduate students in a rather different way. The vast majority of students under the
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aid programmes are postgraduate or at least are on post-experience in the provisional training courses. Those are the majority of government funded students—5,500 new awards each year. All students on the Commonwealth Scholarship and Fellowship Plan are postgraduates; that is 900 awards each year.
The noble Lord, Lord Hunter, suggested that the United Kingdom charges full cost fees and then ameliorates that. That is so, but it is entirely what targeting aims to do. The aim is to support those who are politically and commercially valuable to Britain and those potentially able to play an important role in the social and academic development of their own country. British policy is to help developing Commonwealth countries develop their own universities, to which £20 million was devoted last year under the aid programme, and to focus on the most economically useful students for selective help here.
As for the noble Lord's criticism of bias towards European Community students, suggesting that in some way they get a better deal, I think it is a fact that that is part of the United Kingdom's commitment as a member of the European Community. It is also on the basis of a reciprocal benefit; for example, UK students can study at no charge or pay a subsidy fee only in other European countries. The answer in a nutshell is that it is all wrapped up with EC policy, which affects us all.
My noble friend Lord Elibank made comparisons between ourselves, the French and Germans. It may well be that countries such as France allow access to foreign students on the basis of a blanket subsidy. We must look at the quality of the education offered. It is open to question whether foreign students in France benefit from the kind of focused support through tutorial help, special language coaching, hospitality and other support services which is available in Britain. In any case, our policy is to help those students who will, as I have said, play a key part in the future of their countries. I suggest it is more important to focus what is required rather than to scatter it about more widely.
The noble Lord, Lord Bonham-Carter, seemed to suggest that we do nothing for American students, or at least that we should do more. I remind him that we provide £750,000 per year for Marshall scholars and £26,000 a year for the Fulbright scholarship, which comes from the Department of Education and Science, and there is more.
As to the point that my noble friend Lord Limerick made about Australia, Japan and the United States marketing harder than the United Kingdom for overseas students, as far as Australia is concerned that is so, but there are quotas and full cost fees are charged, concentrating recruitment on Far Eastern students, as I understand it. So far as Japan is concerned, its figures have increased ten-fold but the base figure was very small. So far as the United States is concerned, that is an infinitely larger country with far more colleges and universities than we have and therefore many more places. The proportion of overseas students to home students in the United States is in fact lower than ours, though I understand that the numerical totals are higher.

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We have heard tonight some eloquent words in support of the OST's report and recommendation for a total increase in funding by the Government of £25 million on behalf of overseas students. As my right honourable and learned friend the Foreign Secretary said in another place on 19th February this year, this OST report, to which we gave a general welcome, has to be considered by the interdepartmental group of officials on overseas student matters and by the round table meeting on overseas student affairs. Your Lordships will not be surprised to learn, therefore, that I cannot anticipate these deliberations and our response.
The IDG has studied the report in detail but the round table meeting was unfortunately postponed because of the general election and will not now be held until 16th December. My honourable friend the Under-Secretary of State for Education will chair the meeting and our formal response will be issued in the light of discussions at that meeting. I should emphasise that many of the report's recommendations were already in the process of being carried out when the report was published. Others had been made and rejected earlier and others are under consideration. Despite any encouragement I might have been given this evening, I hope your Lordships will understand that it would not be right for me to go further than that today.
A number of noble Lords were concerned that the DTI should do more in the way of trade-related schemes. The Department of Trade and Industry fully recognises the financial and commercial value of overseas students being trained in the United Kingdom. With that in mind, all companies winning contracts for which offers of aid and trade provision have been made are invited to fund a certain number of postgraduate places for overseas students. The DTI is also planning, through regional seminars, for greater interaction between companies and overseas students. Furthermore, the Foreign and Commonwealth Office's scholarships and awards scheme has several scholarships running which are jointly funded on a tripartite basis with industry and academic institutions. This year some 60 to 70 students will be here under such arrangemend is with 10 British companies and organisations and another nine are due to come into operation in the academic year 1988–89 for a further 30 to 40 students. More are under discussion. I can say that British industry is showing an admirable interest and we are more than ready to cope with further arrangements of that kind.
Lord Bonham-Carter: My Lords, can the Minister say how much money the DTI, not industry, is paying out from its budget?
Lord Glenarthur: My Lords, I cannot give the noble Lord that figure but I shall endeavour to ascertain what it is and advise him accordingly.
My noble friend Lord Elibank and the noble Lord, Lord Seebohm, referred to the promotion of British education abroad through the British Council and to its educational counselling service, which is now operating in three countries, advising intending students on courses and institutions. It is planning to
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expand into other countries. Virtually all British universities and polytechnics subscribe to this service. It is expected to be self-financing by 1989. We also have the educational promotion service, started last month, to perform the same function for colleges. We hope that it will expand successfully. Again, it is to be self-financing after three years.
The remit of the British Council is to promote cultural education and technical co-operation between Britain and other countries. Therefore, it is a legitimate call on council resources, which it recognises. The Government have provided pump-priming contributions. However, the British Council repeatedly assures us that services of the educational counselling service are intended to be self-funding.
My noble friend Lord Elibank suggested that we need to put more funds into Venezuela and the Argentine to help students from those countries. That may be the sort of contribution that companies such as Shell and others—perhaps it is better not to mention names—are able to help with on a jointly-funded basis with the FCO scholarship money. That may be a practical way to help. In fact, the fall in the numbers of students from South America cannot simply be attributed to the Government's policy on fees or on overseas students generally. There are other important factors, largely in the area of economic performance of some of the countries concerned, wrapped up with oil prices, and so on. Perhaps that is something which my noble friend could consider.
As to welfare, which I accept is an important point, it is clearly in the interests of all overseas students that they enjoy and benefit from their time in this country. Various independent research reports have made it clear that while finance is not a great concern to the students, welfare most certainly is. To that extent, I very much agree with the noble Baroness, Lady Ewart-Biggs, my noble friend Lord Limerick, and the noble Lord, Lord Seebohm.
The reports have shown that some overseas students complain of loneliness, isolation and even racism. It would be pointless and counter-productive to encourage them to come here and allow them to leave with less than happy memories. So I was grateful to the noble Lord, Lord Seebohm, for his comments about HOST. HOST will co-ordinate the attempts of independent bodies throughout Britain to arrange outings, home stays, Christmas celebrations, etc., for students, particularly during the holidays. They have received over 2,000 requests from all over the country for family accommodation hospitality this Christmas and are finding families with whom to match these. Many of the students are post-graduates and are not young, many are married and have left their families at home while they have come here to learn.
The noble Lord, Lord Hatch, cited examples of past leaders who were educated here. Who knows, there may well be many future great leaders being educated here at the moment. However, by carefully selecting promising people and fully funding them, We are very likely to hit the target. The Commonwealth Scholarship and Fellowship Plan is such an elite scheme for the most distinguished of

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scholars. Britain still provides half the awards offered globally; that is over 900 awards currently at a cost of over £9 million.
Both the noble Lord and the noble Baroness, Lady Seear, referred to the importance of training South Africans. In addition to the Nassau Fellowships and the fellowships offered for a number of years under the technical co-operation programme of the Overseas Development Administration, Britain has this year given 80 scholarships to bright young South Africans to come and study here as undergraduates. A further 80 are now being selected by the Educational Opportunities Committee in South Africa to arrive here in April 1988, and more groups will come in subsequent years. These groups are given special courses and special arrangements that take account of their difficult background. The noble Baroness, Lady Seear, referred to the question of women. I, too, noticed that the OST report appeared to ignore the question of women entirely. The Government are very conscious of the need to attract more women to study here. This is a priority under the aid programme. At the Commonwealth Education Ministers' Conference in Nairobi held in July this year my noble friend Lady Hooper, who represented Great Britain, was responsible for inserting a passage in the communique referring to the need for member-countries to nominate more women as Commonwealth scholars.
The noble Baroness asked me a particular point about library funds being based on the number of students, but excluding overseas students. I am afraid that I cannot give the noble Baroness an answer to that tonight; but I shall certainly find out and write to her.
The noble Baroness, Lady Ewart-Biggs, referred to the community charge. My right honourable friend the Secretary of State for the Environment has made it clear that full-time students in England and Wales will be liable to pay only 20 per cent. of the community charge. That follows the decision taken during the passage of the Abolition of Domestic Rates, etc. (Scotland) Bill—a Bill somewhat engraved upon my heart—that full-time students in Scotland will only be liable for payment of a similar percentage. I think that the noble Baroness might have to wait and see the fine print of the Bill when it finally emerges. I am afraid I cannot give her more information than that this evening. A number of other suggestions have been made which I shall study, and about which I shall, if necessary, correspond with your Lordships.
Few of us would dispute the fact that British education remains among the best in the world. Moreover, a British education is comparatively inexpensive when seen in the context of its quality. It is, however, concentrated, and this means that courses are not normally designed to allow students to earn during term time. The shorter vocational and training courses we offer are of similarly high reputation and similar intensity. If they are to benefit fully, students must concentrate on their studies. This goes as much for overseas students, of course, as for their home-grown counterparts. I have described the ways in which we are trying to make their lifestyle as
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congenial as possible. But, it is also up to colleges, polytechnics and universities to play their part in sustaining the welfare of overseas students.
The noble Lord, Lord Peston, seemed to imply that the number of overseas students should rise in the interests of the institutions which receive their fees. It is up to the institutions to decide what percentage of their student body they want to be from overseas. There is a point beyond which too much strain might be put on the educational and social facilities provided. Institutions must have a responsible recruitment policy and must provide suitable welfare and other facilities. Only in that way shall we ensure that the large investment we have made in bringing overseas students to this country and allowing them to enjoy the benefits of our educational system is fully realised.

Corn Exchange Bill [H.L.]
Reported from the Unopposed Bill Committee with amendments.
Associated British Ports Bill
Returned from the Commons with the amendments agreed to.

Income and Corporation Taxes Bill [H.L.]
Reported from the Joint Committee with amendments, and recommitted to a Committee of the Whole House.
House adjourned at twenty-two minutes past eleven o'clock.