Lords Sitting of 3 February 1988

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.
Viscount Weir—Sat first in Parliament after the death of his father.

Bank of England Note Issue
Lord Stodart of Leaston: 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 plans are being made to issue a new £5 note.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, the Bank of England is constantly reviewing its note issue in the light of developments in security printing and in note handling. A modified version of the £5 note, with a 1mm wide embedded thread, was first issued in July 1987. Any further changes will, as usual be preceded by adequate notice to all parties.
Lord Stodart of Leaston: My Lords, I thank my noble friend for that Answer, but does he agree that there has been in past years a tendency to reduce the size of bank notes? Is he aware that there is some anxiety, which has already been expressed in Scotland, that a reduction in the size of the £5 note might coincide with the Scottish £1 note, the size of which is extremely popular north of the Border? Can my noble friend persuade the Governor of the Bank of England to take note of this? As a token of the increased prosperity of the nation does he not consider that it would be an admirable move for us to return to those £5 and £10 white notes of blessed memory?
Lord Young of Graffham: My Lords, I hope that my noble friend will understand when I say that I am more concerned that the value of a £5 note should not be reduced rather than its actual size. Not long ago I returned from the United States of America where I noticed that all hank notes were of the same size. That does not seem to have harmed that country over the past decades. However, I shall pass on my noble friend's comments to the Governor of the Bank of England.
Lord Bruce of Donington: My Lords, while giving general consideration to all the currency in domestic circulation, will the noble Lord bear in mind the experiences of our American cousins, which indicate that they much prefer to carry wads of notes than pockets full of metal? Will he therefore consider favourably the reintroduction of notes of a denomination lower than £5?
Lord Young of Graffham: My Lords, I believe that the £1 coin has now received wide acceptance within the country and that it would perhaps not be too sensible to go back to producing £1 notes. The existing £5 note has a life of some nine months. It seems to me that if we were to return to the £1 note the cost would begin to outweigh any benefit.
Baroness Robson of Kiddington: My Lords, will the Secretary of State please tell me whether the Government are considering and studying the production of the kind of paper money which is now being produced in Australia? It is not exactly paper but rather a kind of plastic money.
Lord Young of Graffham: My Lords, I cannot tell your Lordships whether we have been studying the kind of notes produced in Australia, but we have been paying considerable attention to what other countries have been doing. Holland has been experimenting with plastic coated notes. There may well be something in the notion that changing the quality of the paper might prolong the life of the notes a little. However, the present feeling is that such a cost would be disproportionate to the benefits obtained.
Lord Moyne: My Lords, does not the noble Lord agree that in paying a taxi driver by modern lamplight it is often difficult to distinguish between the colours of a £5 note and a £10 note? Would it not therefore be better to have different sized notes?
Lord Young of Graffham: My Lords, the last time I saw a £10 note it was a different size.
Lord Parry: My Lords, does the Minister accept that in the experience of many of us a £5 note lasts five minutes?
Lord Young of Graffham: My Lords, it is not for me to comment on the noble Lord's spending habits.
Lord Ferrier: My Lords, is my noble friend aware that the £1 coin is not very common currency in Scotland, where people prefer the £1 note?
Lord Young of Graffham: My Lords, I have long been aware that Scotland is indeed a different land.
The Earl of Halsbury: My Lords, does the noble Lord agree that the endeavour to match a static coinage to a dynamic currency is a quagmire in which much scar tissue will be generated, because whatever one does is wrong?
Lord Young of Graffham: My Lords, I can certainly tell the noble Earl that that is a quagmire into which I shall not descend.

Tank Accident, Berlin, 1983
2.40 p.m.
The Earl of Kimberley: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what the situation is with regard to compensation for the horrific injuries sustained by Major J. T. D. McCarthy-Morrogh and Lance-Corporal Johnston (J), Royal Irish Rangers, in the accident in Berlin on the night of May 16th 1983, bearing in mind that the French tank crew were found negligent by the judge.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, as my noble friend knows, there has been some welcome progress in this case recently. We greatly look forward to an early and satisfactory settlement.
The Earl of Kimberley: My Lords, I thank my noble friend very much for that Answer, which is much more satisfactory than it might have been a fortnight ago. Would it be possible for him to elaborate just a little more?
Lord Trefgarne: My Lords, I believe my noble friend is aware of the progress to which I referred. There has been a development with regard to the Appeal Court in France, which has indicated that liability does indeed lie with the French personnel involved. That being so, I can only hope now for a satisfactory outcome, as I said in the original Answer.
Lord Irving of Dartford: My Lords, is the noble Lord aware that we are very grateful to the noble Earl for bringing the details of this horrendous case to the attention of the House and that we share his concern about the long delay? Is he also aware that the whole House would wish to see a satisfactory settlement to what has been a very sad and very long-lasting case?
Lord Trefgarne: My Lords, I entirely agree that it has been a long and sad case. That is why it has attracted so much ministerial attention. Indeed, it was rather more than two years ago that my right honourable friend the then Minister of Foreign Affairs and I called the French ambassador to discuss the matter. Since then, it has been taken forward with ministerial support.
The Earl of Cork and Orrery: My Lords, can my noble friend report on any explanations given by the French authorities concerning the intolerable delay?
Lord Trefgarne: My Lords, the delay to which my noble friend refers has been the result of the workings of the French legal system. Our own legal system is sometimes not above criticism as regards the time which is taken to reach conclusions. Therefore, I am not sure that it would be entirely appropriate for me to criticise another country's legal system.

Hole-in-Heart Operations: Statistics
2.45 p.m.
Lord Campbell of Croy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many hole-in-heart operations were carried out in the United Kingdom during the year 1960, and how many were carried out in the last year for which figures are available.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, I regret that information is not available centrally in precisely the form requested. Statistics on the number of open congenital heart operations (which include hole in the heart operations) have been collected for the United Kingdom by the Society of Cardiac Surgeons for the years 1977 to 1985. The total number of open congenital operations was 2,105 in 1977 of which 275 were on babies under one year old. In 1985 the total was 2,044 of which 469 involved patients less than one year old.
Lord Campbell of Croy: My Lords, I thank my noble friend for that reply indicating that only recent records are available. Advances in surgery and technology in such fields (which in this case require specially trained nurses) were not known in the early days of the National Health Service. Should there not be some restructuring of the service other than financial restructuring?
Lord Skelmersdale: Yes, my Lords. I agree with my noble friend. So far as concerns the structure of the health service, we now have nine supra-regional centres for cardiac operations which are funded directly by the department. That means that we are able to put money directly where the care is needed.
Lord Mellish: My Lords, will the Minister agree that the NHS is a victim of its own success? Should there not indeed be a restructuring of the health service of today, not necessarily in terms of money and manpower but rather in terms of a whole new outlook, particularly with regard to regional authorities?
Lord Skelmersdale: My Lords, in my position one can hardly fail to be aware that there is a great deal of discussion going on in this country at the moment as to the future organisation and funding of the NHS. An internal ministerial review is being conducted. Any opinions which your Lordships express will be most gratefully received.
Lord Hailsham of Saint Marylebone: My Lords, reverting to the original Answer given by my noble friend, has he any information relating to the success rate in the two age groups to which he referred in terms of survival for more than 12 months?
Lord Skelmersdale: My Lords, I regret that I do not have that information. If it is possible to obtain it, I shall write to my noble and learned friend.
Lord Molloy: My Lords, will the Minister agree that something must be done speedily to stop the situation where British babies die while they are in the queue waiting for hole in the heart operations? We read in our newspapers about this with a feeling of poignancy and sadness. That would not have occurred many years ago because of the efficiency of the NHS. The subject causes great concern not only to the parents of the children involved but also to many people all over the country. They read that in the country which created the National Health Service, babies are dying for the want of hole in the heart operations. The babies have to wait for such a long time in the queue for hole in the heart operations.
Lord Skelmersdale: My Lords, it has already been pointed out to the House this afternoon that we are conducting specialist operations on babies which could not have been conducted at all many years ago. As regards babies who have the operation or who are in the queue, as the noble Lord puts it, we have no evidence that delays are causing deaths.
Lord Ennals: My Lords, can the Minister confirm that the breakthrough in that life-saving surgery came in about 1964, and that, if carried out in time, that remarkable operation seems to have a success rate of between 90 and 95 per cent.? Can he also confirm that there is now evidence that resource considerations are causing some delays which are disturbing to those involved in that form of cardiac surgery?
Lord Skelmersdale: My Lords, so far as concerns the first part of the noble Lord's supplementary question, I can do no better than to send him a copy of the letter which I shall, if possible, be sending to my noble and learned friend Lord Hailsham. Regarding the second part of his question, I accept—as I have on several occasions in your Lordships' House—that there is a lack of intensive care paediatric nurses in particular. The Government are seeking to deal with that matter in various ways.
Lord Molloy: My Lords, is the Minister aware that the answer he gave me earlier will be totally unacceptable to the British Medical Association and to the specialist surgeons who claim that the delays have gravely threatened the lives of children waiting for hole in the heart operations? Is he prepared to accept the views of the British Medical Association and the specialist surgeons? Will he see if the situation can be improved?
Lord Skelmersdale: My Lords, of course we all want the situation to be improved; but I do not think that that is the point. To pick an obvious recent example, in the case of David Barber, the coroner said that David died of natural causes and that a lack of nursing staff or the delay in his operation were not factors in his death.
Lord Campbell of Croy: My Lords, with reference to the first supplementary question of the noble Lord, Lord Molloy, perhaps I may ask this question. Does my noble friend agree regarding waiting lists that there were no waiting lists for these operations some years ago because these operations had not been invented? As regards hip operations (which was the subject of Monday's questions) sufferers simply had to go on suffering. We all expect everybody to be able to have such operations under the National Health Service; but that was not the position 30 years ago.
Lord Skelmersdale: My Lords, my noble friend is absolutely right and underlines the point that I tried to explain to the House in my first answer to the noble Lord, Lord Molloy.
The Countess of Mar: My Lords, may I ask the noble Lord this question? In view of the fact that for some considerable time it has been known that there would be a shortage of paediatric intensive care nurses, did the noble Lord receive early last year any submissions from regional health authorities to increase funding so that nurses could be trained for that purpose?
Lord Skelmersdale: My Lords, not to my knowledge; but I am aware that in the West Midlands Regional Health Authority there is a new course for paediatric nurses which is expected to start in the very near future.

Disabled People: Benefit Rates
2.52 p.m.
Lord Carter: 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 announce details of the scheme to help people disabled after April 1988 who, in the absence of a scheme, will receive lower rates of benefit than those disabled before April 1988.
Lord Skelmersdale: My Lords, as the Government have consistently made clear, they are determined that this very small group of people who will become severely disabled after 11th April 1988 will not be disadvantaged as a result of the social security reforms. Work is continuing, with the help of the voluntary sector, on an interim scheme to assist them to live independently. Details will be announced at the earliest opportunity.
Lord Carter: My Lords, I thank the Minister for that reply. Does he not agree that the figure of 250 people that he has quoted previously at the Dispatch Box excludes the people who have to go to hospital, lose their transitional protection and effectively then become newly disabled at the lower rate and the disabled person whose partner leaves or dies so effectively becoming newly disabled and receiving the benefit at the lower rate? The number at risk of having their benefits reduced after April 1988 is

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therefore much greater and more than the 250 that he has quoted. Does the Minister also not agree that a number of voluntary organisations approached about the interim scheme have expressed some grave reservations about its operation?
Lord Skelmersdale: My Lords, the noble Lord has raised two very different points. I can confirm that if there is a break in the benefit of longer than eight weeks, a new benefit rate will pertain. However, if it is shorter than that, the old benefit rate will be reinstated.
As to the figure, it derives from a sample of supplementary benefit cases taken in February 1986 and represents the number of people of all ages receiving domestic assistance additions of more than £20 a week. However, for this group the sample is very small, and the figure simply indicates we are talking of hundreds rather than thousands. I should also like to make the point that this figure will be cumulative from 11th April onwards.
Baroness Jeger: My Lords, instead of passing legislation to disadvantage such disabled people and then setting up a voluntary scheme to try to put things right, would it not be simpler to amend the Social Security Bill which goes into Committee next week? There might be helpfulness in all parts of the House if this could be put right on a statutory basis and not by setting up some separate ad hoc organisation.
Lord Skelmersdale: My Lords, clearly, there is need for a long-term solution. I would not disagree with the noble Baroness on that. We are determined to get a long-term solution, but this cannot be achieved until we have the results of the OPCS study on the nature and scale of severe disability and can couple it with Sir Roy Griffiths's report on his overview of care in the community. What we need now, of course, is a temporary scheme. I do not know when or whether your Lordships will pass the Social Security Bill, but I suspect that it will not happen speedily enough. Having said that, why do we not introduce legislation on this point? We have been advised that we have the existing powers and therefore that we do not need to do so.
Lord Peston: My Lords, may I ask the Minister to clarify his Answer? Is he saying that it is the view of Her Majesty's Government that it is not their intention that those disabled after April 1988 will lose compared with those disabled before then, and that they will guarantee one way or another that no disadvantage will result? Does he mean that it is purely a matter or technique and that if one technique fails, the Government will find another one? Is that how we are to understand the Minister's remarks?
Lord Skelmersdale: My Lords, that is absolutely right.
Lord Banks: My Lords, will the Government consider the possibility of adding a supplement to attendance allowance for the very severely disabled unable to live alone?
Lord Skelmersdale: My Lords, that has been considered in the past and rejected. There are already two premia for disabled persons and since one of the main aims of the new scheme is simplification, I do not think that adding another premium would be helpful.
Lord Carter: My Lords, does the Minister not agree that when he answered my supplementary question, by implication he admitted a larger number than 250 who stand to lose benefit in the categories that I mentioned? Does he also not agree that the department was told in April 1985, when the White Paper on social security was first produced, that this problem would arise? The risk starts on 11th April, which is only two months away. The Government are still talking about an interim scheme and are still in discussion with voluntary organisations which, as I said, have expressed very grave reservations on that scheme and have declined to take any part in its administration.
Lord Skelmersdale: My Lords, so far as I am aware the disability organisations have not declined to take part in this scheme. As regards reactions to the White Paper, it was a little previous, I suggest, to react to the document when details of the scheme were not contained in it.
The Countess of Mar: My Lords, when, according to the Government's estimate, so few people are affected, will the noble Lord explain why the Government have sought to neglect the very people who need our help most?
Lord Skelmersdale: My Lords, if we were seeking to neglect them we should not be endeavouring with great urgency to find a scheme to help them. I must point out that these people do not yet exist. We are talking about those newly disabled after 11th April.

Business
Lord Denham: My Lords, after the end of the short debate on the World Summit of Ministers of Health on AIDS and before the short debate on the case for more rapid progress towards the completion of the internal market of the EC by 1992, my noble friend Lord Caithness will, with the leave of the House, repeat a Statement that is to be made in another place on the Crown Suppliers.
With the leave of the House, I should like to say a word about the two short debates which stand in the names of the noble Lords, Lord Kilmarnock and Lord Ezra. 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 debate. In the case of the short debate in the name of the noble Lord, Lord Kilmarnock, this means that all other speeches should be limited to a maximum of 12 minutes and in that of the noble Lord, Lord Ezra, to eight minutes. If any noble Lord were to speak at greater length, it would be at the expense of subsequent speakers in that debate.

Public Utility Transfers and Water Charges Bill
Brought from the Commons; read a first time, and to be printed.

AIDS: World Health Summit
2.59 p.m.
Lord Kilmarnock Lord Kilmarnock rose to call attention to the World Summit of Ministers of Health on AIDS and to the current situation in the United Kingdom with particular reference to Cmnd. 297, Problems Associated with AIDS; and to move for Papers.
The noble Lord said: My Lords, AIDS has penetrated into so many corners of our national life that inevitably in the time allowed for a short debate I shall have to omit some topics which I hope that other noble Lords will take up. Among them are some that are close to my heart, such as basic research; haemophiliacs and whether the Government's grant to them will be enough; and the London Lighthouse. I cannot let this occasion pass without paying my personal tribute to Ian McKellen, who, after a seven-week run of his one-man show "Acting Shakespeare", has contributed single-handed almost £½ million to the completion of that project. That is a fantastic achievement, as I am sure all your Lordships will agree. I am certain too that we are all looking forward with great expectation to the maiden speech of the right reverend Prelate.
Your Lordships will be aware of the International Conference of Ministers of Health on Aids Prevention which took place recently in London, jointly sponsored by the World Health Organisation and the British Government. The final statement declared that AIDS poses a global threat to humanity and that urgent action is needed by governments and people all over the world to prevent its spread. It warned, significantly, that public health would be undermined if discrimination against and stigmatisation of people with AIDS was not avoided, a point to which I shall return.
During the conference some of us in your Lordships' House, together with some Members of another place, had the opportunity to meet the Health Ministers, or their representatives, of France, Canada, Uganda and the Bahamas, all countries with a higher rate of AIDS cases per head of the population than ourselves. All those countries expressed considerable respect for the British handling of the disease to date. But there were some reservations and those sprang in part from their detection of a certain loss of impetus in our campaign, particularly on television.
This coincides with a slightly uneasy feeling I have had that we have not quite recovered the sense of urgency about AIDS which we had before the general election. This may be something to do with a new Secretary of State getting into his stride. I think Mr. Fowler gave real leadership on dealing with AIDS and I have no doubt that his successor will follow suit in due course. But the message from our foreign friends, which I endorse, is that what we have done
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we have done well but we have not yet done enough and certainly cannot afford even the briefest flirtation with complacency.
One feature of virtually all other countries' approach to AIDS is that they have a national coordinating committee. I suggested such a body in an article in The Times a little over a year ago but it did not find favour. The French call theirs a Committee of Reflection. Its job is to advise the leading Minister. Its members include scientists, specialists in ethics, education, communication and leisure, and also representatives from industry, insurance companies and the Churches. Perhaps it is not surprising that the French should want to have a national plan. That is the way they do things and by nature we are suspicious of grand national plans. But if one is fighting a war, as we are, it is sensible to have a strategy.
The Select Committee on Social Services of another place has recommended such a body, but this suggestion was rejected by the Government in their response on the grounds that the present arrangements are working adequately. I am not sure that that is wise and I think it smacks a little of complacency. I am not reflecting adversely on the AIDS unit of the DHSS, which does an excellent job with a tiny staff, or on the Chief Medical Officer, who deserves our gratitude for his cool head, wise advice and constant vigilance. What I am saying is that we need a strategic body, which we do not have.
Before the election there was a Cabinet Committee headed by the noble Viscount, Lord Whitelaw, but this was an extremely shadowy body to the general public and its very existence was sometimes denied. I see from the press that it is now to be headed by Mr. Moore, who seems the obvious choice. But would it not be better if we had something that was more out in the open with known and named members and a defined role? I believe that public confidence would be much increased in this way and I shall be interested in the noble Lord's comments on the proposal.
All the countries represented at the international conference were agreed that education and counselling are at present far the most powerful weapons we have against AIDS. But information, however efficiently disseminated, is not enough. Professor Alain Pompidou, the French national coordinator, warned that being informed does not mean knowing, that being aware does not mean taking steps and that deciding does not necessarily mean doing.
I turn again to Cmnd. 297, Problems Associated With AIDS, which is also mentioned in my Motion. As it is a response to the Third Report of the Social Services Committee of the House of Commons of the last Session of Parliament, it will no doubt be debated in detail in the other place. I just want to refer to one or two of its paragraphs.
In the part devoted to education and prevention, there are a number of references to the Health Education Authority. I have not the time to discuss the authority's remit in any detail, but can the noble Lord say how far it extends into schools? The Government appear to be committed to providing educational material on AIDS and sexual behaviour

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for young people through collaboration between the Department of Education and Science and the Health Education Authority. But paragraph 3.35 tells us:
"Under the provisions of the Education (No. 2) Act 1986 it is now the responsibility of individual governing bodies in England and Wales to decide whether and, if so, how sex education is provided in schools. The Government trusts that, in determining their policy in this area, governors will take note of the Committee's recommendations".
I seriously doubt whether this very mild exhortation is sufficient. If we also take into account the tight curricular framework proposed in the Education Reform Bill, it seems to me that anything like the French video campaign to all secondary schools might well be impossible under English law. Can the noble Lord offer me any encouragement here? If not, I shall certainly feel obliged to raise the matter again when the Education Reform Bill comes before the House.
It is impossible to speak about education without referring to counselling. You can produce all the material in the world—written, visual or audiovisual—but it is useless if awareness campaigns are not backed up by trained personnel in advice centres, information outlets and so on. In Britain we have only just begun to wake up to the need for trained counsellors. Without the voluntary sector we would virtually have none at all. We are a long way behind comparable countries in this respect.
In paragraph 4.2 of the Government's response to the House of Commons report, we read that the Government:
"has funded regional workshops for senior community nurses and has awarded 13 AIDS fellowships worth £3,000 each".
This is peanuts compared with the French initiative under which more than 20 programmes are in operation with almost 2,000 trainees, consisting of paramedics, other health workers and social workers. Incidentally we learn from M. Pompidou that France has 150,000 social workers, a figure that will, I think, bring envy to the otherwise blameless heart of the noble Baroness, Lady Faithfull. A sizeable contingent of them is participating in the training programmes I have indicated. Can the noble Lord say anything on the training of British social workers in the field of AIDS?
Apart from lack of funds, I still suspect that a threat to AIDS counselling lurks in the heart of Clause 28 of the Local Government Bill. I raised this point yesterday in the debate on clause stand part. The noble Earl, Lord Caithness, gave some rather generalised assurances in his reply which I want to study further. So this is something I shall probably want to pursue at the next stage of that Bill.
I turn to the scale of the threat. Approximately 75,000 people have AIDS at present and that number is expected to double to 150,000 this year world-wide. By the year 2000, it is suggested in a recent book, there could be a cumulative total of 25 million cases world-wide. On another projection the peak will be reached in 1998, with 65,000 sick from AIDS in the United Kingdom and another 48,000 dying. But even if we are chary of catastrophic predictions, current
1080
totals, if projected forward only two or three years, are quite sufficiently alarming.
Canada, with less than half our population, had 1,334 cases at the end of September 1987 and expects this to rise to 7,000 by 1991. France, with a population almost equal to ours, had 3,073 recorded cases by the end of last year, a number which will inevitably double this year. Our numbers are lower. At the end of last year, there was a cumulative total in the United Kingdom of 1,227 cases of whom 697 had died. But this was a 2·4-fold increase on the previous year's end.
If this rate of increase were maintained we might, according to the Office of Health Economics, expect about 5,500 deaths in 1990. This in turn would imply that there would be some 5,000 live patients requiring treatment in our hospitals. I am not citing those admittedly imprecise figures simply as a scaremonger. The point of them is that even the projections at the very lowest end of the scale will place vastly increased strains on our already overstrained National Health Service.
This brings me to a very important area in the report of the Select Committee dealing with medical manpower. Time and again in their evidence leading figures in the hospital world, including Mr. Miller, senior clinical psychologist at Middlesex Hospital, Dr. Antony Pinching, senior lecturer in clinical immunology at St. Mary's, and Professor Adler, head of the Department of Genito-Urinary Medicine at the Middlesex, drew attention to manpower constraints, due basically to financial constraints, which are not only pushing existing staff to the point of burn-out but making the recruitment of new staff impossible. Even the present case load could not be handled at all if academic clincial doctors were not devoting a far higher proportion of their time to patient care than is consistent with their research responsibilities.
In view of these eloquent appeals, which your Lordships will find in paragraphs 117 to 123 of the Select Committee's report, the committee said in its recommendation 52:
"We believe that, with large numbers of people developing an illness which requires intensive levels of care and a high level of expertise for its proper management and which affects a sector of the population who would not otherwise have placed any demands on the health services, additional manpower provision is urgently needed in both training and consultant grades in traditional specialties and in the specifically relevant specialties of clinical immunology and infectious diseases".
The Government's reply to this is one of the weakest in their whole response. In paragraph 4.28 they say that they take the point about the additional workload, but at consultant level the responsibility for this lies with regional health authorities and with the Royal colleges. The joint planning advisory committee will then ensure that there are enough training posts to balance consultant vacancies. No indication is given whatsoever of how any of this expansion is to be paid for. This is a totally inadequate response to the telling points made by Dr. Pinching and his colleagues. I must ask the Government to look at this again.
Thus, I come to the central question of the funding of hospital services. One of the most important of the

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Select Committee's recommendations is paragraph 94, which reads:
"If the current estimates of the likely spread of the disease are in any way accurate, then the demand on resources will increase substantially and rapidly. In our view the rising demand must be met from new resources and not by diverting resources from other parts of the health and social services".
The Government's reply at paragraph 4.35 is again inadequate in my view. After coming out against separate resource allocations for AIDS, they say:
"Nor is it realistic to assume that AIDS-related services or research can, or should be given absolute priority over all other health and Government spending; nor protected from the pressures and constraints that other health and personal social services experience. In short, there can be no blank cheque".
But it is not a question of a blank cheque. The Social Services Committee specifically said so. It is a question of meeting particular pressures at particular points in the service.
Perhaps I can best illustrate the problem if I refer to a debate before London University students in which I participated with Mr. Tony Newton. I was arguing that there should be a centrally earmarked AIDS fund to which health authorities should be able to make bids to meet additional costs imposed by AIDS, by-passing the normal lengthy process from central government to region then to district. Mr. Newton argued that it was wrong to treat AIDS in a different category from other diseases. We did not after all have separate AIDS hospitals and frequently AIDS patients are treated in the same wards as patients with other diseases. He argued that AIDS should be handled within the mainstream of the NHS; therefore funding should flow through the normal channels with occasional top-ups for emergencies.
I have great respect for Mr. Newton. I regard him as an able and committed Minister. I have sympathy with his argument that AIDS should not be marginalised and relegated to a ghetto-type service. That is morally correct. The difficulty is that this tends to mask the underfunding that leads to the terrific pressure on medical manpower that Dr. Pinching and others have referred to. Also it adds to the genuine fears of trade-off and backlash as other areas become threatened by the necessity of funding clinical research and care of AIDS out of the same general budget.
I now believe that the best course is for the normal channels to be used, as Mr. Newton suggests, but for the Government to recognise more readily the additional pressures. They will point to the £58·6 million that they have pledged for 1988–89, over which the noble Lord, Lord Skelmersdale, and I got into a tangle on Wednesday, 16th December, and which he will no doubt unravel today. But this is well short of the £80 million or so which the Office of Health Economics has calculated as being the likely real additional cost. The Social Services Committee recommends that injections of money should be made at specific points, each request being judged on its own merits and if justified given the funding it requires. Therefore I hope that there will be some flexibility. I frankly think that the only way ahead is fully to fund additional AIDS costs where they can reasonably be substantiated by health authorities. I hope that the Government will come round to this view.
I come finally to the ethical questions which underlie our attitude to AIDS and will ultimately dictate our response. I believe that the Government deserve to be commended on the way in which they have so far avoided scapegoating. They have treated the disease first and foremost as a huge public health hazard requiring the collaboration of all sectors of the community. They have funded and do fund homosexual organisations as frontline troops in the battle, and I hope they will continue to do so. There is obviously a moral dimension. But immorality attaches less to one group or another than to those of any group who continue to behave in ways that threaten others. After all, the virus pre-existed any particular act of sexual intercourse. Sex is a principal means of transmission; it is not the cause.
In what Professor Clayton of Canada called a plague mentality, there is an obvious but regrettable tendency to seek scapegoats among certain social or ethnic groups. The danger of focusing disapproval on particular groups is that it distracts attention from the real risk of spread among the "normal" population. There is quite a volume of evidence to suggest that the heterosexual community is not putting its house in order as fast as the homosexuals.
In the United Kingdom only 322 out of 7,557 antibody positive persons reported to the end of September last year could be attributed exclusively to heterosexual contact. But this was an 80 per cent. increase on the count taken only six months earlier, so the composition of future AIDS case loads is likely to reflect a slow but nonetheless steady expansion into the heterosexual population. Professor Clayton told us that in his view those who had least progressed from awareness to action were multiple sexually active heterosexual males and females. This goes to show that one cannot simply put a ring fence or a cordon sanitaire round a supposedly "normal" morally and physically healthy population. In this sense we are all willy-nilly very much members one of another.
In her speech to the international conference the Princess Royal was perfectly right to draw attention to the dreadful scourge unleashed on haemophiliacs and to the awful tragedy of children born to AIDS-infected mothers. But with respect to Her Royal Highness, there is virtually no evidence in this country of "revenge sex", and the Social Services Committee's report refers specifically to that in paragraph 172. It would indeed be an "own goal" if we drove AIDS sufferers or sero-positive people into such desperate action against their fellow creatures.
Dr. Okware, the eloquent and expert delegate to the conference from Uganda, said something memorable that I noted down:
"If you mishandle AIDS patients they can be more dangerous than the virus itself."
We are fortunate in having far greater preventive, clinical and financial resources than Uganda. With a much larger population we have only half the number of cases. But I am convinced that we shall waste these advantages if we allow the current climate of intolerance to spread into the field of AIDS. Our Government have so far resisted any such tendency. I hope they will stand firm. I beg to move for Papers.
3.17 p.m.
Lord Quinton: My Lords, for anyone like myself at a very remote distance from the professional frontline on this subject, there is a more than usual danger that one will be saying things that are already totally out of date. It is for this reason, as part of my gratitude to the noble Lord, Lord Kilmarnock, for introducing the subject, that I welcomed the emphasis in the early part of his remarks on the need for both a continuous flow of up-to-date information about what is going on—in view of the horrific statistical gradients that the dotted lines of prediction place before us and which to some extent in Africa seem to be being realised—and his recommendation of some central body to be a pool of information. After all, this problem has only been clearly identified for less than a decade, even if the virus was already present in people for some considerable time before that.
One very depressing belief that has altered with the passage of time concerns the incubation period. It seems constantly to turn out to be longer and longer. People can carry the HI virus around in themselves for years and years before contracting, or showing symptoms of, the disease. The average incubation period goes up year by year as the history of close observation of the disease prolongs itself.
There is, however, a kind of compensating consideration. Here again I put forward a reasonably well established truth that itself may be questionable, although I think it is fair to say that all the evidence at present seems to support it. This is that the disease is rather hard to catch. It requires that some bodily secretion of an infected person enters a lesion in the skin surface of the receiver of the infection. The two most familiar ways in which this has occurred are in a certain form of homosexual activity and by intravenous drug use. These define the two main groups who are at risk as a result, one might say, of positive actions of their own. There remain over and above them sufferers who are haemophiliacs, or other receivers of transfusions where the blood involved is infected, and the children of AIDS-infected mothers.
This fact about the difficulty of contraction of the disease is an important one in a social problem which has manifested itself in a conspicuous and rather repulsive way in the United States, where the parents of children in schools have resisted the presence of children with AIDS. Various forms of offensive, violent and aggressive pressure have been exerted on the parents of such children, who are normally haemophiliacs or the receivers of transfusion.
I suggested earlier that it seemed to be reasonably clear that, as a physical transaction, AIDS is quite hard to contract. It is important that that information should be widely spread—that is in so far as it is well founded, and at the moment all the evidence we have suggests that it is—in order to prevent some kind of ugly mob behaviour against those sufferers from AIDS who make the most obvious and immediate appeal to human sympathy: the children who have acquired it by blood transfusion or by inheritance.
I believe that information should be spread in an authoritative way with such caution as there must
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always be in matters of this kind. Parents should be told that there is no evidence that ordinary social presence with an AIDS sufferer constitutes any danger. It has been suggested by some people that there are perhaps two classes of child where a measure of sequestration must be appropriate. The first group includes those who are given to violent behaviour so that they are likely to collide in a skin-splitting way with other children. Secondly, there are children with limited control of their own bodily movements. However, they will constitute a minimal fraction of the involved population although this is one of the dangers.
I believe that the problem relates to the point made by the noble Lord, Lord Kilmarnock, in quoting from the Minister in Uganda who said that AIDS patients, if wrongly treated, can turn out to be more dangerous than the disease itself. A society can be gravely torn and upset within by unthinking mob reaction to what is described as a plague, applying to it ideas derived from bubonic plague which are totally inappropriate.
The need for the central body is to act in a responsible way; to co-ordinate existing information from the experience of this country and others; and to provide the kind of authority that cannot be aspired to in the terrific confusion of witness in newspaper articles and television programmes. They are no doubt written with the best possible intentions but in them authoritative knowledge has been very considerably diluted.
I should like to disagree with the noble Lord in his comments about heterosexuals. I do not know whether the 300 or 400 cases out of the 7,000 to which he alluded include any intravenous drug users or any sufferers from venereal disease. There is good evidence that certain features of some of the symptoms of venereal disease constitute the kind of lesion though which the virus can enter the system of the recipient. It would be a significant fact if a disproportionate number of the 350-plus cases he mentioned as regards the population as a whole were cases also of venereal disease. Normal, straightforward human interactions do not seem to involve the transfer. Quite a large number of female prostitutes appear to have contracted the disease, but, in the developed world, they do not appear greatly to pass it on to their male clients.
It is argued by many people that if one looks at the statistics in Africa one finds that there is not the extraordinary disproportion between the numbers of males and females infected by the disease. In Africa there is a rough equality between the sexes in the proportion of infection. I think that there are good explanations for that: possibly three main ones, although two are fairly closely connected. First, most of the blood used in transfusions in Africa is not screened, for the obvious reason of the poverty of the medical services. Much of the disease is communicated through ordinary transfusion where in a developed, well-off society, steps can be taken to throw away any blood likely to carry the infection. Secondly, needle use in Africa is equally insanitary. The same old needle is used again and again. If just once in its history it enters into the secretions of an infected person that needle can pass the infection on

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to any others who use it. It is a fact about Africa that the success of inoculation in banishing some diseases has had a disastrous social effect in that it has created a profession of totally unqualified injection-givers. They inject goodness knows what and practise as medical auxiliaries of some kind. Patients who are not drug users have been seen in African clinics pitted with needle marks from the receipt of this highly informal and, as it now turns out, exceedingly dangerous form of treatment. Thirdly, there is a great deal of venereal disease in Africa.
I have not raised those points in order to demolish the thesis put forward by the noble Lord opposite that we should not suppose that a ring can be drawn around some infectable minority of the community while the rest of us can look over the wall quite happily. I think it suggests that we do not have to suppose the likelihood of some universal involvement in this disease. There is time to do something. It is important to spread information and educate because there is no cure. That situation is somewhat exacerbated by the fact that there is no such thing as spontaneous remission in the disease; it seems that everyone who contracts it dies. Another melancholy fact is that the proportion of those who carry the virus and then contract the disease seems to be constantly increasing. That ties up with what I said earlier about the length of the incubation period. I do not want to reinstate the argument which the noble Lord was opposing.
On the other hand, it is desirable to emphasise that certain clearly identifiable behaviours enormously enhance the risk of the disease because that will allow steps to be taken to prevent its spread at the point where it has most intensely congregated and has become congested at the present time. One must also balance my comments about the relative likelihood of the risk of the relative groups against what I urged to be an important and well-founded belief that there is little danger in ordinary social transaction of people contracting the disease from those who have it. There is no need to introduce leprosaria or the horrors of sequestration for people with the disease. They are people who are found to be HIV positive and at considerable statistical risk of ultimately contracting the disease.
The danger of which I am conscious is that of a cruel and unsympathetic reaction to all those who have the disease. That would be greatly enhanced by the belief that the disease could be easily transmitted from one person to another and that all the infected are Typhoid Marys. I believe that it is important to resist that danger, and part of the resistance is the fact that it appears to be hard to contract the disease by relatively moderate heterosexual activity—that is to say, by not having resort to prostitutes who have many other contacts which may involve infected people. This means that the disease is not therefore likely to sweep through the entire population. We must, however, be aware of the fact that the disease is so awful, and has such an indestructible hold on people when they contract it, that we have to do everything possible to contain it. On the other hand, we do not want to stop it at the cost of cruel treatment of those who have already contracted it.
3.30 p.m.
The Lord Bishop of Worcester: My Lords, all Members of the House will understand that one could have wished to make one's maiden speech on a subject less doleful than this, especially when required to be uncontroversial. One dreams of a maiden speech in which one propounds pleasantries on the development of English campanology in northern Italy. One can be fairly sure that only a few Members of the House would become contentious on that issue. But no; there is this very important debate, and we are grateful to the noble Lord, Lord Kilmarnock, for bringing it before us.
One difficulty about this subject is the length of time of incubation which is always liable to catch us off our guard so that we become complacent. I believe we should be grateful that the international conference was hosted in this country and that Her Majesty's Government are foremost among nations in the way they have tried to respond to the crisis. For that we should be grateful, though of course there is much more to be done.
I want to limit my remarks to offering your Lordships information about what the Churches are trying to do in responding to the crisis and to say something on the other part of this issue; namely, how lifestyles could be changed in order to prevent the spread of this disease.
First, let me say that the Churches are determined to have a high profile in caring, arousing public awareness and promoting education in this field and in combating those demons of ignorance, prejudice and fear which are such terrible enemies in the matter of AIDS. I can say that the Church of England Board for Social Responsibility was consulted by, and gave evidence to, the Social Services Committee of the other place. It promoted, with a very carefully assembled report, one of the more responsible debates in the General Synod, and it has published guidelines for pastoral care of which 20,000 copies have been sold. The Churches are particularly able to help because of their ubiquity. In all parts of society, there are Christian communities and congregations on the ground which can be aware of the disease when it comes their way and which can care not only for the victims but also for their families and friends.
Furthermore, the 43 dioceses of this country have programmes of education such as the one in the diocese of Gloucester, organised with the local social services and health authority, which seeks to be ready to respond to need where it arises. I received only last week a considerable paper for the Industrial Mission Association entitled AIDS in the Workplace so that industrial chaplains may be informed, educated and prepared for that eventuality at work.
Hospital chaplains are receiving, as part of their in-service training, education and preparation for the care of AIDS victims and their families. I have heard a most moving address on this subject indicating the ways in which those who have the disease desperately need to be affirmed as people, desperately need not to be rejected and shunned, even to the point of being held and having their hands shaken so that they are not treated as lepers. The YWCA has recently published guidelines showing that in their hostels

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people who have the virus will not be refused entry and people who know them will be informed and educated as to how to make friends with them.
I have been able to question those who represent the mainstream Churches. I find that they are determined to be a sign and symbol in our land of compassion and not condemnation and judgment. We believe that this comes before propounding any of the moral principles which might be right in looking at the way in which we can improve our lifestyle. Where people are ill, they must receive care; that is the principle on which we work.
Incidentally, I hope that the international conference will help us in England to keep matters in perspective, bearing in mind that countries with a gross national product sometimes of less than one-twentieth of a multinational company like ICI are going to find their health services under enormous strain. It will be second only to the problem of famine in the third world to meet the needs of the health services where the country is terribly poor. This will not be forgotten, I hope, when we are quite rightly spending multi-millions in this country on our own efforts to combat the disease.
Furthermore, the Churches are determined to support efforts to promote the right kind of debate. I have in my own house people concerned with the hospice movement. The whole question was argued and discussed as to whether hospices are places where people should go if they have AIDS or how they can be cared for in their home and continue a normal life for as long as possible. As I have said, we want to prevent scapegoating. A minority of people who are gifted and good to know should not become the object of persecution in our land. What happens to them now might happen to another minority tomorrow. We must be on our guard.
Equally, we can say to them, "If we are to protect you or defend you, we ask you to curb your proselytising and promotional activities which, if they were in the heterosexual field, would be equally unacceptable". This is not only because they will do their own case a great deal of harm but because young people who do not yet have their sexual orientations balanced or decided may have it balanced or decided for them under pressure from proselytisers.
I want to look at the question of life styles. It is not enough merely to talk about safe sex. It is not enough to have a condom campaign. Surely, after the last 25 years of enormous and rapid social change, we have come to the point where we need to look carefully at the place of sexuality in our lives and in all our relationships. In that, I believe, the Churches must say their piece. However, we cannot imagine that the Churches any longer have any social control and that merely to inveigh from the pulpit will cause people to alter their life styles.
A society which has been reared on the maxim, "It does not matter what you believe as long as you believe it does not matter" is not overnight going to be able to exercise a self-denying ordinance in these matters. A massive and corporate counselling and consultation process is required in which I hope the
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Church, with its traditional belief and teaching about monogamous marriage, celibacy before and faithfulness within marriage, will say its piece. The Church is no use to society which does not state its case.
However, we are in a very different world from the world in which many of your Lordships were brought up. We should be ready to listen to those who in every other way are highly moral but who do not buy our Christian sexual morality. In listening, we shall together be able to discover ways in which relationships between friends, between man and wife and between parents and children can be built up, improved and stabilised in such a way that we shall forefend the spread of this disease by the changing of our life style.
3.41 p.m.
Lord Bonham-Carter: My Lords, it is a very great pleasure for me today to have the opportunity to follow the right reverend Prelate and to be able to congratulate him on a most notable maiden speech. It was a speech which not only told us of the constructive work which the Church is performing in the very important area we are discussing today, but it was a speech which was uttered with great sincerity and conviction and it leads me and, I am sure, many other noble Lords, to look forward greatly to more speeches from him.
I join with other noble Lords in congratulating the Government on the vigour with which their campaign for informing the public of the dangers of AIDS has been conducted. It has been radical, bold and doubtless to some shocking—as it should be. However, promoting a campaign against AIDS is one thing; taking action to prevent the spread of AIDS is another. The action programme which they have to undertake needs to be equally open, equally radical and equally bold.
That having been said, together with my noble friend Lord Kilmarnock I should like to emphasise that the position in this country could well be worse. The dangers which we face are in fact to be witnessed not in England but in the east of Scotland and, above all, in Edinburgh. The McClelland Report states:
"The east of Scotland faces a problem which is at present unique in the United Kingdom but which threatens the rest of the country".
That was written in 1986. As far as I can discover it is still true in 1988. Perhaps I may indicate with some figures why I have come to this conclusion.
In England less than 10 per cent. of injecting drug misusers are infected with the virus. In Scotland more than 50 per cent. of IDMs are infected. This alarming figure compares with New York or, to take another example, with Milan where 70 per cent. of IDMs are sero-positive. The difference between the United Kingdom, excluding Edinburgh, and, for example, Italy is that in Italy 64 per cent. of those with AIDS are injecting drug misusers and about 21 per cent. are homosexuals. In England the figures are almost exactly the reverse. Of those infected, 80 per cent. are homosexuals and 20 per cent. are IDMs. In this situation we have an opportunity in this country because there is substantial evidence that the education of homosexuals in practising safe sex

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produces positive results but to change the behaviour of injecting drug misusers is extremely difficult. That must be our target because it is among IDMs that infection can increase most rapidly.
Edinburgh is useful as an example because we can ask why it has happened there and why it has not happened elsewhere. The McClelland Report provides some answers of a tentative variety. First, in Edinburgh the police discouraged the sale of syringes and needles and confiscated syringes and needles from individuals on whom they found them. Hence drug misusers, drug dependents, resorted to what are called "shooting galleries"—that is, single rooms where people share needles. That is the classic way in which the infection is propagated.
Secondly, the medical profession in that part of the world was in general rather opposed to maintenance prescribing. Thirdly, there was low expenditure on the provision of services dealing with drug dependents and, consequently, individual drug users either never made contact with agencies or severed contact with those that existed. As far as I can discover, the present position in Edinburgh is not much better than it was then. The recommendations of the McClelland Report were not carried out with the vigour that they deserved.
I will be told in response to that rather severe judgment that Edinburgh has set up three AIDS units. However, AIDS units deal with people who are already infected. They are necessary and they are desirable, but what we must concentrate upon, and our first priority, must be prevention. It is a campaign to prevent the spread of AIDS which is the most important priority in society.
One facile answer sometimes given to those who advocate or who are arguing about prevention, is mandatory testing. I am glad to say that both the Select Committee and the Government in their response rejected mandatory testing, first, on technical grounds, in that it cannot be relied upon to identify all those at risk and, secondly, on the broader ground that mandatory testing has such,
"profound, ethical and legal consequences as to rule it out".
In addition to those two compelling reasons, I would add that it is the wrong strategy.
The problem that we face and the strategy that we have to pursue is one that will allow us to identify those who are at risk. Having identified them we must obtain their co-operation. We can probably best do that by providing them with the advice, help, support and assistance they require. Having identified them, secured their co-operation and provided them with advice, we have the most difficult task of all, to which the right reverend Prelate referred, of changing their behaviour. That is a difficult task to achieve at any time and in any area. It means continuing the programme of public education on which the Government have embarked, not least in the schools.
I draw your Lordships' attention to the report of the Select Committee on this matter, which is not irrelevant to the debate we had yesterday. Recommendation 43 reads:
"Whatever policy governing bodies adopt towards sex education, we recommend that DES issue forceful guidance to schools on the risk of AIDS associated with drug abuse and on necessary immediate amendments to education about drug abuse".
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In fact we have to pursue almost exactly the opposite policy to that followed in Edinburgh. We must engage the co-operation of the police with the social services. We must co-ordinate the activities of the medical profession with other measures and we must consider, as the Government are considering, the wider distribution of free needles, as is done in Amsterdam. I shall be interested to know whether the Minister, in his reply, can give your Lordships information about this. It may be that it is too early to give the results of the experiments which the Government are conducting.
There is one particular danger to which I should like to draw attention, and that danger is in prisons. We know that in prisons drugs are prevalent; we know that homosexuality is practised; and therefore it is a dangerous area. On the other hand, it provides another opportunity in that we have a genuinely captive population who we can take the opportunity to educate, to counsel and to teach how to avoid the dangers and the practices which lead to AIDS. The opportunity is an obvious one; and the danger of failure to take that opportunity is that the prisons will become a breeding ground for AIDS.
Once again, I should like to quote your Lordships Recommendation 41 of the. Select Committee:
"If the Departments responsible for the prisons of this country have grasped the full implications that AIDS and HIV will have for the prison system, they have yet to show it. They must develop a much more responsive and responsible attitude if they are to meet this problem".
I hope that is rapidly happening.
I would not only draw that recommendation to the attention of this House, but to a further recommendation which they make: that we might have to consider the prescription of methadone to drug users in prisons. I should also like to draw the attention of your Lordships to one of the conclusions of the World Health Organisation which was published in their report:
"Careful consideration should be given to making condoms available in prisons in the interests of the reduction of the spread of this disease".
Finally, I should like to ask the Minister when the report of the Advisory Committee on Drugs Abuse called AIDS and Drug Abuse (which I believe has been with the Minister for some weeks now) will be published? It is potentially an exceedingly important report, and it is a pity that it was not available to us in time for this debate.
3.52 p.m.
Lord Auckland: My Lords, your Lordships will be grateful to the noble Lord, Lord Kilmarnock, for enabling us to discuss a problem which is depressing but which is of much urgency.
As the first of your Lordships to speak from these Benches, I should like to congratulate the right reverend Prelate the Bishop of Worcester on an outstandingly sensitive maiden speech. The Lords Spiritual and the Church as a whole have a very vital role to play in this particular matter because the relatives and dependants of those who die from this dreadful disease need sympathy and condolence. In a maiden speech of great distinction the right reverend Prelate has revealed how the Church can help.

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Some months ago there was a picture in some of the newspapers of my right honourable friend Mr. Norman Fowler, who was then the Secretary of State for Health. In the course of a visit to San Francisco (where AIDS is alleged to have originated) Mr. Fowler was seen holding hands with a young man who was terminally ill with the condition. Anyone who saw that picture would have felt a shudder down his or her spine—whatever views one might have about AIDS and about those who contract it. I mention this because I believe that any Health Minister—and this applied to the noble Lord, Lord Ennals, during his distinguished career in office—visiting San Francisco would probably have done the same thing. More than anything else, I believe that picture made those who were unaware of AIDS and who saw the picture very much aware of the horrific implications of the condition.
The really sad aspect of all this is that the symptoms of AIDS—pneumonia, lung congestion leading to dementia—are, at least in the first two conditions, curable in themselves. It is a very sad situation that at the end of the 20th century, or nearing the end of it, with medical research making such huge progress, there is, as yet, no cure for AIDS.
I believe the real solution here lies in medical research. The work of the Medical Research Council has already been most distinguished. We must all hope and pray that they will come forward with a solution. I was not present at the international conference; but on the day of the conference I went to a luncheon given by my long-standing friend, the Ambassador of the Republic of Finland. It was a lunch given for Mrs. Pesola who was their Health Minister. The lunch took place at the Ambassador's residence.
Although there was not time during the course of the luncheon (which was attended by about 40 people) to discuss the specific problem of AIDS, it was quite apparent that she, a young person, was very visibly moved by what she had heard during the conference. Those who have visited Finland and other Scandinavian countries, will know of the enormous contributions that they have made to medicine as a whole. I have visited several hospitals in Finland, and I know what they are contributing towards medical research in various spheres. I am quite sure that AIDS is included in that research. I believe that the international conference, with more than 100 Ministers in attendance from all over the world, will do more to make one aware of this problem than almost anything else.
The main aspect of the problem is in research. Schools have a large role to play. Sex education, given properly in the course of biology classes (which I believe are handled far more sensitively and sensibly than in the days when many of my noble friends and others were of that age) is most important. Regarding the Government, I believe that there is a very big problem. The Government have been assailed for their own contribution. But we all know, looking at the health service generally—and there are many taking part in this debate who have had far more clinical experience of health matters than I—of the
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enormous pressures upon the National Health Service.
This is not in any way a party matter. One looks at the dreadful cancers now, and the amount of money which we all want to be spent on overcoming that disease. However, when we are looking at the finances of central government in relation to AIDS, we have to be a little more temperate. AIDS is not—as it was when it was first adumbrated—entirely caused by homosexual activity. In this country it was not until 1981 that we became aware of this illness. In 1981 everyone asked: "What on earth is AIDS?" The symptoms were there before; namely, pneumonia congestion of the lungs, brain disease, and so on.
We have now moved on seven years, and I should like to conclude by saying this. We can only hope and pray that a cure will come. The pharmaceutical companies are often criticized—and at times rightly—on a number of matters. But I believe they are playing their part. Medical research is also playing its part.
I return to that picture of Mr. Fowler in San Francisco. It would be no bad thing if that picture was circulated around the whole country even now; not because it was Mr. Fowler, but because it was the Secretary of State for Health who was visiting a country from where this tragedy emanated. I conclude by saying that I hope the Government will do all they can in relation to the whole problem—not only concerning AIDS but with other conditions—in the matter of medical research.
4.1 p.m.
Baroness Masham of Ilton: My Lords, I also add my thanks to the noble Lord, Lord Kilmarnock, and my congratulations to the right reverend Prelate. On Thursday, 14th July 1983, three noble Baronesses in your Lordships' House asked the Government pressing questions on the AIDS virus. They were the noble Baronesses, Lady Dudley, Lady Gardner of Parkes and myself. The noble Lord, Lord Glenarthur, answering for the Government, said:
"Although there is no conclusive evidence that AIDS is transmitted by blood or blood products, the Department is considering the publication of a leaflet indicating the circumstances in which blood donations should be avoided."
Since 1983 we have seen the alarming spread of this terrible affliction which is causing so much human devastation and fear throughout the world. Last week 148 states plus the Vatican, declared:
"AIDS is a global problem that poses a serious threat to humanity."
I was worried about AIDS in 1983. I am even more worried about it now. I quote from the Sunday Times:
"While heterosexual men who don't inject drugs, and others who avoid high risk acts, are likely to remain more or less safe from AIDS, women will not be so lucky.".
As the conference heard, although AIDS is not easily spread from females to males, the unprejudiced behaviour of the virus is already revealing a huge incidence of male bisexuality causing some women to be infected by their men.
In Edinburgh it is said that they are no longer talking about a wild bunch of drug addicts: it is ordinary young people. AIDS has spread so much

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into the community that people do not know who has it. A young person I know aged 22 was infatuated with a young man from abroad. I suggested that she took care because of the risk of AIDS. Her reply was: "How can you say a friend of mine might have AIDS?". My reply was: "If you don't know much about him, whoever he is, you just don't know.".
There are many people who seem to want to shut out the thought of the risk of AIDS. The Government have done a great deal to try to advertise the problems. It is sometimes not until a close friend is affected that a person will take notice. The Government have put a great deal of extra money into the AIDS dilemma. But on reading Cmnd. 297 "Problems Associated with AIDS", I feel they are not making a positive enough approach over testing. The problem is far too serious to duck the issue of testing.
Recommendation 2 states:
"We are unable to recommend the general use of anonymised screening at this stage."
I see little use of that sort of screening at any stage. If we want to prevent AIDS, I think the Government will have to make screening much more readily available. One Minister said to me: "What do we do when we find people positive'?" They should be carefully counselled and the greatest persuasion used so that they do not sleep around and spread the virus. If they are injecting drug users, they should stop sharing needles.
Many people who visit certain countries now have to be tested; and that is the policy of several countries. I have not heard of anyone who has refused. If it is the policy that hospital patients when admitted have a routine test along with the other usual blood tests, it would not single out any one group. Perhaps recruits to the armed forces should be tested when they have their entrance medical. Also, social testing should be made more available. Perhaps people could pay for the cost of the test for their own peace of mind or that of their partners. Should the tests prove positive, then counselling should be freely available. The report says that there should be more trained educators, and I totally agree with that. When news is bad, people should always be supported.
I totally agree with Recommendation No. 31 which says:
"We conclude that the wisest approach is to advocate celibacy before marriage and fidelity within it as the ideal, but to accept that people may find this hard to achieve."
The sad situation is that so many young people come from divorced parents, and that many of them seem frightened these days to get married. Two weeks ago I visited the Mildmay Mission Hospital in Hackney. This is a small independent Christian hospital which was started when cholera was a serious problem in London. It has just created a hospice for AIDS patients and has a day ward. Great thought and care is going into this, and patients will he looked after with understanding and dignity.
One of the most interesting parts is a conservatory. Therefore, dying patients can be among living plants. Before this hospice was opened several people telephoned trying to make self-referrals. They knew that they had AIDS, but they had not been to a doctor. Many people in London—and, I am sure, in
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many big cities throughout the country—do not have a general practitioner. Out in the community at large, there are most likely many sero-positive people who are known to no one.
I am chairman of Phoenix House. That is an organisation running several houses, and re-entrance houses, dealing with drug rehabilitation. There are main houses in London, Sheffield, North Shields and the Wirral. If funds allow, we hope there will be a house on the south coast and one in Glasgow. Drug takers are generally alienated and therefore difficult to reach with a preventive educational campaign. As a consequence, it is unlikely that the majority of drug takers will present themselves at clinics for sexually transmitted diseases for assessment, counselling and testing unless they are encouraged by the drug treatment agencies. That implies that the numbers of sero-positive drug users is much higher than is known from test results.
Statistics indicate that injecting drug abusers are the fastest growing group of people who have been tested as sero-positive. Sero-positive drug abusers are more likely to develop AIDS and have a worse prognosis than other groups because the effect of drugs further suppresses their immune systems.
For some time there has been heightened concern at drug treatment agencies by the rapid increase of late-in sero-positives among clients who are seeking help. To give your Lordships an example of test take-up, of 106 residents counselled in the northern region, 94 per cent. elected to have the test. Seven were found to be positive. In London it is now 12 per cent. in Phoenix House. Blood testing should always be preceded by a discussion of the advantages of having the test. Whether the test is chosen or not, it is always an opportunity to provide health education in order to try to initiate a change in life style.
A positive result is "bad news", and it needs careful handling. Last Friday there was a television programme, following the world summit of ministers, about AIDS. A picture was shown of a large, grim building in the Bronx where poor people went, many of whom were dying of AIDS. The television crew had not been allowed to film inside. It was easy to imagine what it was like. It sent shivers down my spine. We must avoid that kind of degradation at all costs. A few weeks ago at lunch I sat next to an American from Houston. He told me that a hospital for AIDS patients had had to close down because of the lack of funds. The expense of caring for AIDS patients can be very high. We must go all out for prevention whenever possible.
Phoenix House proposes to develop a 35-bed special project for their AIDS and ARC (AIDS-related complex) clients who need supported accommodation to provide a home for those rendered homeless because of ARC and AIDS. The development is also to provide accommodation for people living in conditions which are unsuitable and who have ARC and AIDS. Support will also be provided for these people who are unable to cope, and Phoenix House sees this provision as urgent. It is a new venture, and it will need new resources.
Up and down the country there are new problems emerging. In two of the health districts, a problem

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has presented itself. Drug addicts who are sero-positive, and have been treated in their home district, have gone for further treatment in another district. They have been given methadone which they are selling on the street of their home district. The doctors from the second district will not communicate with the first district. There is frustration. This is just an example of the need for people at all levels to communicate. Too much confidentiality due to AIDS might be made use of by the drug addict who wants to satisfy his craving for drugs.
At a recent meeting of the all-party Drug Misuse Committee we were told that drug taking was still on the increase. Drug treatment agencies need support. The drug addict with AIDS is far less of a risk if he or she is being cared for by people who understand the problems. All voluntary agencies have the task of raising funds. That takes time and energy. I hope the Government will help to keep up morale and keep up the funds. I certainly have found some remarkably dedicated and motivated people working in this difficult field.
4.14 p.m.
Lord Kennet: My Lords, I believe the whole House will join me in congratulating my noble friend Lord Kilmarnock on the unfailingly well informed, constructive and good-humoured way in which he brings this dreadful subject to the attention of the House year by year.
I emphasise to the Government the amount that can be learned as we find out what it is best to do in the present predicament from the experience of other countries. I mention in particular the work being done by the School of Development Studies at the University of East Anglia which is investigating how African countries will be able to cope with the reduction in food production in future years due to the deaths of a large number of able-bodied men. It is projecting that far ahead; and that is wise. I hope that if it needs further money to carry on with its work it will receive it. I hope also that all other agencies will be looking bravely, and pessimistically, that far ahead.
I wish to make one other general point. I expect most of your Lordships have read the report of the House of Commons committee and the Government's response to it, the Office of Health Economics report, the British Medical Association's report, and so forth. It is interesting that none of them—not even the Government's response—makes any reference to the private sector of our medical structure in this country. It is obvious to everybody that this is a matter for the health service. That is taken for granted, so much so that the alternative does not even figure in discourse and conjecture. We may learn something from that fact; especially the Government. There may be a danger of chipping holes in what some people may think of as an ideological yacht or something, which is actually going to be the lifeboat for the whole of mankind. I mean our public health service.
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The noble Lord, Lord Quinton emphasised the possibility that the virus did not travel through unbroken skin, unbroken membranes. I am not sure how up to date that view is. In any case, I should like to draw your Lordships' attention to the spread of the virus among heterosexuals. I cannot refer to a heterosexual community or a homosexual community, because I do not think there is such a thing in either case. They are just people. But the virus is spreading among heterosexual people.
We are often told in the press that only 4 per cent. of AIDS sufferers in this country are heterosexual. We have that figure in our minds. It is not the right figure. The right figure is that only something over half of the HIV positive people in this country have received the virus by sexual transmission. So, although heterosexuals constitute only 4 or 5 per cent. of all cases, they account for about 9 per cent. of sexually transmitted cases. That figure puts a different view upon the matter. I do not know whether other people feel this way; but I do. Four per cent. is an almost negligible minority but if it increases to one in 10, then one has something that one can no longer "peer over the wall at", to use the vivid phrase of the noble Lord, Lord Quinton.
In the main I want to speak about testing and various other matters in the House of Commons committee report, which I did not fully understand the morality of. I dare say other people did not understand either. I believe that the area of anonymised testing, or even what I should like to call responsible testing—that is when one tells people the result and where one knows whose blood one is testing—is likely to be one of growing confusion and concern as the condition spreads. It has been quoted with approval by some people, including the House of Commons committee, that it is bad ethics and bad science to carry out anonymised testing for HIV on certain categories of people who have their blood tested for some other reason. I do not understand why it is either bad science or bad ethics.
I was surprised to see the opinion attributed to the Chief Medical Officer of the Department of Health and Social Security that the mass of results, which would be available to medical science if general anonymised testing were adopted, would be so great as to be useless. I cannot understand that statement. I thought that when doing statistics the more one received the more certain one could be of whatever conclusion one was debating. But there may have been a misattribution of that opinion.
Perhaps the noble Lord, Lord Hunter, who will be speaking next, will be able to tell the House whether anonymised testing is routinely done for other conditions—I take measles as an example—to form some opinion about its incidence without bothering about who has or who has not got the disease individually. If such testing is carried out, why would it be less ethically desirable to do so in the case of HIV than in the case of any other disease? I do not see that point. I may have it wrong. That may not be the case. Would the noble Lord like to tell us now whether it is. I can see that he does not wish to do so.
I shall turn now to what I think may turn out in time to be the solution to all these matters, although

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a great deal of opinion must develop before changes can be made. It is what I would call responsible testing, in the sense of identifiable tests the results of which can be communicated to the sufferer to enable the sufferer to behave responsibly. I was struck by something that the head of the French programme, Professor Alain Pompidou, said, which was quoted by my noble friend. I should like to rewrite the observation to make it even clearer in English.
"To he informed is not to know; to know is not to understand; to understand is not to decide; and to decide is not to act".
The purpose of all public bodies, government, Parliament and all good people, is to encourage and to enable action to be taken by some people. At the moment, people who wonder about having an AIDS test or who have one offered to them for some other reason, are counselled before they take it. I understand that it is common for the counsellor to say: "You do realise, don't you, that if you take this test and it turns out positive, you may have difficulty in obtaining life insurance cover. You may even have difficulty with a mortgage." I have heard of that. That constitutes negative counselling. The people who give such advice are putting a life and death matter in second place to an economic matter. That practice is questionable; it is one that should be thought about and inquired into.
On the same subject, recommendation 88 of the House of Commons committee states:
"There are no grounds for disclosing a patient's antibody status, without their consent, except to safeguard another from infection".
How should that recommendation be interpreted? Does it include the patient's spouse or regular sexual partner? The context in which the committee considered that point was that of unborn children. That is not the whole issue by any means. If society could move gradually towards the, perhaps, more painful and more risky course of what the noble Baroness, Lady Masham, called better communication, it would have the effect of reducing or slowing down the increase of the incidence of the condition.
People, including AIDS patients, must always be given the chance to do right. Some present practices do not give them a fair chance to do right. Full cost-benefit analysis with full projections of future alternative scenarios is bound to show that the amount of money which will have to be spent on the disease is likely to be colossal. Any underspend beneath what later turns out to be the right level will be paid for tenfold in human suffering and economic setbacks. I say "tenfold". I could just as well say a hundredfold. The doubling time for the incidence of the condition has increased to 13 months or so in this country, but the doubling time for heterosexuals obtaining HIV-positive results is eight months. On an eight-months' doubling period, it is not long before we are talking about a one-hundredfold increase.
I say to the Government that if they are in doubt they should spend, spend and spend again now. And all the governments of the world, if they are in any doubt as to where the money should come from, might try to come to their senses about the arms race.
4.25 p.m.
Lord Hunter of Newington: My Lords, for a moment I should like to stand back a little from our
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immediate problem, consider the old public health and then say something about the new public health, public-responsibility and AIDS. It is appropriate to do so now, because it is about 10 years ago almost to the day when the last case of smallpox in the world occurred in Birmingham. It was a laboratory infection. There has been no further case, so the old public health scored well.
Last week the report of Sir Donald Acheson, the Chief Medical Officer, on the New Public Health was published. It is a document well worthy of study. When we think of the old public health in the old days, we think of housing, nutrition, tuberculosis and immunisation against infectious diseases. Tuberculosis was a tough problem. It required preventive measures—screening and specific therapy—to eliminate it. Apart from preventive inoculations, the individual contribution to the old public health was modest. With regard to inoculations, it was variable. For example, we have never managed to achieve the 90 per cent. inoculation rate required to prevent measles epidemics. Other countries have. In that respect we have not been the best in the world.
In contrast to the old, the new public health depends heavily on the individual for success. It often involves his or her lifestyle. Smoking, for example, promotes heart disease and cancer of the lungs. The approach has been twofold—propaganda and reducing the tar and nicotine content of cigarettes, which we recommeded when I was chairman of the Scientific Committee on Smoking and Health in the 1970s. Heart disease and the importance of diet and exercise are part of the new picture. But behind today's problem what is the individual's responsibility for his health?
Then we come to AIDS, the subject of the debate. There is no protection and no morning-after pill. There is no serological evidence of infection for four weeks or even up to four months. To those who would ask, "What is the fuss? After all there have only been 1,200 or so deaths so far", we must point to the experience in the United States and tell them that if no further infection took place, the burden of cases would go on increasing in this country for six or seven years.
In the United States, where to begin with a somewhat relaxed view was taken, AIDS is already the commonest cause of death in young women. It is as well to remember that the increase in the number of cases does not necessarily mean failure because of the long delay that I have mentioned.
There is no doubt that homosexuals here and in the United States have drastically altered their behaviour. As a result, there has been a dramatic drop in the number of people attending venereal disease clinics. As the noble Lord, Lord Bonham-Carter, and others have said, the same improvement has unfortunately not been recorded among drug users. They continue to be a danger to themselves and to their friends and relations. Under present circumstances, the new public health depends upon personal behaviour for improvement. There is no early diagnosis and no treatment. We are back to individual responsibility to protect the family and future generations.

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The noble Lord, Lord Kennet, sought my opinion about testing for AIDS. There is a great deal of conflict about this at the moment. However, I would guarantee that if a therapy was available tomorrow everyone would want it. The nation would desire to have it in order to be cleared of this evil. However, until that therapy is available the conflict will continue.
We in this country are concerned about the National Health Service in relation to the needs of the aged and the new technology. Many of us believe that it has been sorely neglected over the last 10 years. We are now faced with a new aspect, that of overwhelming demands from a section of the population that otherwise makes hardly any demands. This has to be built into the strategy. We have heard a great many statistics this afternoon. I am sure that the Minister will be telling us about them. However, I ask him this question. Could the strategy consume all the new new money for NHS development over the next decade? That is the question to which we should like a reply.
In the new public health issue in relation to AIDS we are back to public responsibility and individual, personal responsibility. In this country we have the public health laboratory service and the Medical Research Council, with its outstanding record in basic research and with no fewer than 28 projects on research, which ensure that we are playing our full part to try to advance knowledge and to discover a cure for the disease. I would encourage the Medical Research Council to continue to work in the Gambia where a new and particularly nasty virus related to the better known one has appeared.
Another ray of sunshine and perhaps hope is this. I understand that there was a remarkable atmosphere at the final session of the AIDS Summit to which many speakers have referred. The people of the world are coming together. They are uniting to defeat this threat. They will in the end defeat it, and perhaps through that there will be a greater understanding of one another across the world.
4.32 p.m.
Lord Winstanley: My Lords, over recent years your Lordships' House has debated this subject on many occasions. I am sure I am right in saying that every one of those debates has shown a degree of understanding of a very difficult problem, a grasp of complex figures and facts that one would not find in any other forum anywhere. That is to be expected in your Lordships' House, where we show a degree of understanding and an awareness of issues which is not common elsewhere.
Of all those debates, I have no doubt that this is the best. From every speaker we have heard we have seen a grasp and understanding of the problem, although different aspects have been emphasised by different noble Lords. However, each and every one has contributed to what has been an admirable debate. In that context I most certainly include the right reverend Prelate the Bishop of Worcester, with his admirable maiden speech. Having said that they have all been excellent speeches, I have not yet heard the Minister. However, I am absolutely certain that by
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the time I have heard him I shall not wish to depart from that judgment on the nature of the debate.
Therefore our thanks are due to my noble friend Lord Kilmarnock for initiating this debate. We should also thank my noble friend Lord Kilmarnock for his initiative and enterprise in setting up the all-party group on AIDS from both Houses of Parliament and for chairing it. That has enabled noble Lords and Members of another place to have regular meetings with experts in this field and to keep themselves fully informed. These all-party groups on different subjects do invaluable work. The noble Baroness, Lady Masham, has mentioned the all-party committee on drug addiction. That also has enabled many of us to hear speeches on this subject. Those organisations do a great deal to improve the level and standard of understanding in your Lordships' House.
In winding up a short debate which is time-limited, one cannot possibly elaborate on all the points which have already been made, I shall merely try at this late stage to fill one or two gaps which have arisen. However, in general terms I concur with what has been said. My noble friend Lord Kilmarnock initially said that the Government have made a splendid start. I have no hesitation in saying that the Government deserve all possible congratulations for starting the initial campaign. I also congratulate the chief medical officer of the Department of Health, Sir Donald Acheson, for his understanding and extremely mature attitude to a very difficult subject.
I believe that the Government's initial campaign has brought about a public awareness of this situation very rapidly in a way which could not altogether have been foreseen. Our congratulations are due to the Government for that. The noble Lord, Lord Kilmarnock, implied that in discussions with our European friends, the Ministers from other countries who were present at the conference, there was some feeling that we had perhaps gone off the boil in this country and had begun to become a little complacent. I do not agree with that verdict for a moment. I accept that we appear to have stopped for a while. But it was wise to do so because there were extremely difficult decisions to take.
We have reached an area in which we have a tightrope to walk in deciding to what lengths to go. Do we frighten people unnecessarily? Do we reassure them inadvisedly; or what do we do? It is very important that the Government think extremely carefully about the next steps that they take in their publicity campaign. One must agree with Mr. Tony Newton, who said at the international conference—and I entirely agree with him—that here we have a disease for which we have no available protective vaccine. Nor do we have any therapeutic substance. We have one which delays the progress of the disease, but we do not have a cure. Therefore we must rely wholly on prevention. The Minister for Health was entirely right in saying that, and therefore the Government must think about it.
In the first debate on this subject, I asked a number of questions. We needed to know the nature of the organism. We know that in great detail; we know a great deal about it. We needed to know the mode of spread of the organism. We now know that. We

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needed to know with some kind of precision the incubation period. We do not know that with any precision and I doubt whether we shall ever know it with any precision. What we know is that it is an extremely long period, and that adds to some of the difficulties.
The noble Lord, Lord Quinton, referred to this. We also know that this is a very difficult disease to catch. When the Minister replies he may say that there are many cases of one spouse of a married couple who has contracted full-blown AIDS. The couple have continued to live together and to cohabit in the fullest sense of that word, and yet the other, uninfected, spouse has remained uninfected. The Minister will confirm that. It shows it is not a very easy disease to catch. That is a useful message to give to the general public since it allays anxieties and perhaps stops panic. But of course there is a danger that if one says that too often people will say, "What are we bothered about?"
When this matter first came to public consciousness, there was this general view: "What is this AIDS?" It was described as a disease that kills homosexuals and intravenous drug addicts. People said, "That's all right, isn't it?" That was an extremely dangerous judgment and an unwise one. We have rapidly learnt that a disease is a disease, and once an infectious disease is present in a community all that community is at risk and all that community must regard itself as at risk. We have progressed, and we now understand the position. We have now to take very difficult decisions. We have to advise people who are at risk and who are not.
Frequently the word "carrier" is used. The BMA sent me guidance today. I wish that it had sent it earlier; the morning of the debate is a little late. It refers to the AIDS foundation which has been set up. It is admirable. It is charged with the duty of providing ethical guidelines to medical practitioners involved in treating patients carrying the AIDS virus. What does "carrying" mean? The term "carrier" in medical science is a quite specific and exact term. Usually it is applied to a person who carries a pathogenic organism but does not manifest the pathology that that organism can cause. We had carriers of diphtheria and typhoid fever.
What is the present situation in relation to AIDS? We know that a person with full-blown AIDS is infectious. But do we know that everybody who has a positive antibody reaction is necessarily a carrier? I do not know. I hope that when the noble Lord replies he can give us a more accurate definition of a carrier. Are we to assume that all those people who have positive antibody reactions on a blood test are carriers? I do not know. We need to know that.
I am glad that my noble friend Lord Kennet raised the difficult question of blood tests. It was commented on by the noble Lord, Lord Hunter of Newington, who is an expert in the field. His advice should be listened to carefully. I rather share the views implied by my noble friend Lord Kennet that if one is taking a blood test one wants to know what, if anything, is wrong with the blood that one is testing.
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Were Ito become a pathologist—I am not likely to now, it is getting a little late in the day for me to do that—and take a sample of blood from a patient to examine it for one purpose or another, I do not think that it would necessarily be my duty to explain to the patient, "All I am going to do is to work out the haemoglobin percentage, count the red cells and count the white cells". If I take a blood sample I think that I have a duty to look at it overall and find what if anything is the matter with it, including whether antibodies are present. I hope that eventually when blood samples are taken we may move to a situation in which that information is obtained. Beyond that, we have the problem of what is to be done with the information. That of course is a delicate problem, as Lord Hunter of Newington implied. It needs a great deal more consideration.
There is another difficulty in regard to the future course. I remember an admirably conducted campaign during the war—a very expensive one—with regard to the increase in venereal disease, both gonorrhea and syphilis. Working as a doctor in Her Majesty's Forces and among the civilian population at that time I had more difficulty dealing with young patients who thought they had contracted venereal disease than with people who had in fact contracted it. I saw many suicides take place of people who had become obsessed with the idea that, through some kind of misbehaviour, they had contracted venereal disease when they had not done so. We have to face the problem when we walk along this tightrope: how do we advise people to modify their lifestyles without at the same time making them think that they have contracted a disease that they may not have contracted?
We should also remember this. Doctors throughout the country are dealing with patients who even at this late stage of the twentieth century continue to suffer from early Victorian teaching about sex. It has left a legacy in terms of psychoneurotic disease of one kind or another which is prevalent in certain sections of the population. It is clear that we have to tell people that promiscuous behaviour, whether homosexual or heterosexual, renders them liable to contract infections. That is perfectly proper information to give people. It must be given in such a way that it does not bring back the kind of fears of sex that were engendered by the Victorian campaigns or other campaigns in days past.
I wish to put one or two specific points to the Minister. One that should be in his mind, as he dealt with it in the last Question today, is the matter of benefits. As the Minister knows, certain benefits are available long term for the chronically disabled, particularly those who have been chronically disabled for a continuous period of six months. The Haemophilia Society is extremely worried about this, and it should know because some of its members have contracted AIDS in tragic circumstances. However, once AIDS has developed, it does not necessarily exist continuously for six months; it tends to be up and down in short periods.
As the Haemophilia Society has pointed out, it is both a fatal and a very expensive condition to have. It is very costly to live with AIDS. The Haemophilia

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Society hopes—and rightly so—that the Government will be prepared to regard the diagnosis of AIDS as ipso facto proof of the existence of a condition for a continuing period rather than having to monitor it and say, "This person has been continuously ill for six months". Perhaps the Minister could answer that.
I was interested that my noble friend Lord Bonham-Carter raised the question of prisons. This is an important subject. A specific question was raised at the all-party mental health committee in both Houses: what would be the Government's attitude and how would they assess their degree of liability were a prisoner in the custody of the Home Office prison service in one of Her Majesty's prisons to contract AIDS as a result of homosexual rape? What would be the legal liability in that case? I do not say that it has happened, but I say that it is likely to happen. I say nothing about the practice of homosexuality in prisons, but I say that prisoners must be protected from homosexual rape. I should like to have the Minister's reply about the legal liability if such a case arose.
In general terms, as part of the information that we want on a continuing basis from the Government, we should like some information about how we are doing. An excellent campaign has greatly increased public awareness of the disease. As some noble Lords have said, it has probably modified the behaviour of certain groups already. I hope that the Government will give us figures at regular intervals so that we can know precisely how we are going on in relation to certain special risk groups and in relation to the population as a whole. We shall then have a proper opportunity to assess and monitor progress on the disease and to monitor the effects of the money being spent—and rightly so—by Her Majesty's Government.
4.46 p.m.
Lord Ennals: My Lords, I am sure that I express the view of all noble Lords in offering thanks to the noble Lord, Lord Kilmarnock, for introducing what has been a very thoughtful debate. Part of that thoughtful debate was an outstanding maiden speech by the right reverend Prelate the Bishop of Worcester. We should not have had that if the noble Lord, Lord Kilmarnock, had not introduced the debate on this important subject.
I express appreciation also to Her Majesty's Government for facilitating last week's World Health Organisation conference in London. I spoke to several of the Ministers, not only those who attended the all-party meeting. They clearly found it a very valuable conference. I welcome the decision taken by the conference to share information not just during the conference but subsequently, to develop a total strategy and to have a year of communication and co-operation about AIDS. I thought that it was useful at that conference to be able to see Britain's problems in a world context. As several noble Lords have said, we now know so much more about the disease than we did a few years ago.
Evidence to the conference showed that 5 million or even 10 million people world-wide are already
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infected with the AIDS virus. While I agree that we do not know to what extent they are or are not carriers, that is potentially the situation. In his opening speech to the conference, Dr. Jonathan Mann, director of the WHO special programme on AIDS, said that while AIDS had stolen a march upon us there had been a rapid global response with an unprecedented move to prevent and control the disease. I have no doubt that the WHO conference in Britain will have stimulated that process.
The epidemic has different patterns in different parts of the world. The first pattern occurred in Western Europe, North America, Australia, New Zealand and some parts of South America. In those areas most AIDS infections have occurred among men. Sexual transmission in those countries is predominantly homosexual. Over 50 per cent. of homosexual men in some urban areas are HIV infected. While heterosexual transmission is increasing in those areas, it currently accounts for a much smaller proportion of sexually acquired HIV infections than homosexual transmission.
The second pattern of transmission occurs in Africa and the Caribbean. In those areas sexual transmission is predominately heterosexual, so that the ratio of males to females suffering from the disease is approximately equal. It is a totally different pattern from that in our own country. In some urban areas, one-quarter of the 20 to 40 age group is infected with the disease, and up to 90 per cent. of prostitutes.
In the United Kingdom there has been an unprecedented move to understand and absorb the educational material put out by the Government and by voluntary organisations to stop or discourage the spread of the disease. It is too early to assess the effect on personal conduct. I agree with the noble Lord, Lord Winstanley. I would not now say to the Government, "Please start it all over again". There is a great awareness on the part of the public and we have to pause to think again, so I am not critical of the Government on that score.
The Office of Health Economics has recently published an important study on HIV and AIDS in the United Kingdom, to which reference was made on a previous occasion. That is a very disturbing study. It shows that mortality from AIDS is still steadily increasing. Nearly 60 per cent. of all deaths from AIDS recorded in the United Kingdom so far occurred in 1987 alone. Furthermore, during last year more than one death from the disease was recorded every day. If the latest annual rate of increase in AIDS deaths is maintained, 5,500 deaths from the disease may be anticipated during 1990.
As several noble Lords have said during the course of this debate, the make-up of AIDS case loads seems likely to change over time. Homosexual or bisexual males currently account for about 85 per cent. of AIDS cases in the United Kingdom, but they contribute less than half of the known HIV infections, and future cases of AIDS could therefore increasingly come from other high-risk groups. In particular, as the noble Lord, Lord Bonham-Carter, said, more cases can be expected from intravenous drug abusers. In turn, this development will mean

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growing numbers of AIDS cases among women as well as a shift in the geographical distribution of the disease. Of the current total of known HIV infections among intravenous drug abusers, about one-third involved women, and two-thirds of the total have been reported from Scotland, as was said by the noble Lord, Lord Bonham-Carter.
I think it is appropriate for your Lordships to pay tribute to all those professionals who have been involved in the treatment and care of this very difficult and disturbing disease. We should pay tribute not only to the professions but to the voluntary organisations such as the Terrence Higgins Trust, the Care Trust, CRUSAID, and especially to the hospice movement, whose task is going to grow greater as the years go by, as well as to all those who are involved in counselling and social work; and also in that connection to the Church, as was quite rightly pointed out by the right reverend Prelate.
I should also like to pay my tribute to the Association of London Authorities, which has shown the way in which London local authorities can work together with housing, social services and environmental health services to create a pattern of service at local authority level.
A good friend of mine over many years, Dr. Patrick Dixon, has just published what I believe to be an outstanding book, The Truth about AIDS, which some noble Lords may already have seen. If I may quote a few paragraphs, he said:
"Gay people have felt totally ostracised and rejected by society. Beaten up in alleyways, labelled as perverts and victims of relentless low-grade discrimination, they have often felt misfits. Rejected by family and former close friends, many have found tremendous security and self-acceptance among those who have been through an identical experience. The feeling of togetherness is very strong. At least they can be themselves without fear of rejection".
He refers later to the false "gay plague" label which has been stuck to them.
This is an extremely important question to tackle because if we are going to pay tribute to those who have helped in dealing with this disease we must also pay tribute to the homosexual community, who, if evidence is right, as it seems to be from figures that have been published, have made a very significant change in their own lifestyle in a way which for them must be a considerable sacrifice. That must be said because these are people who are to be sympathised with in the sense of their own sexuality and especially in the light of the fears which they must all have at this time.
This almost inevitably brings me to Clause 28 of the Local Government Bill, which has been debated but which will again arise at a further stage in the process of that Bill. I share the views of those who expressed great concern about the divisive effect of the clause. I am glad that the noble Lord, Lord Skelmersdale, will be replying to the debate today. I do not want to put him in a difficult position and I am not asking him to comment, but it is true that little more than 12 months ago he recognised that the words in Clause 28 and those in the Bill of the noble Earl, Lord Halsbury, which was then before the House, were capable of harmful misinterpretation and were moreover unnecessary. I hope that the Minister, who voted as he properly did yesterday, will
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consider the effect that this clause could have—I do not say will have—upon a community whose cooperation we desperately need in fighting this sad disease of AIDS.
This is not a party view. I am not trying to score party points. In fact, some of my noble friends may disagree with me, but the point that I am making is the view of the Royal College of Nursing. Some of your Lordships may have seen the comments on our debates on Clause 28 by the Royal College of Nursing, although it put it in the context of the debate on the prevention of AIDS. It said:
"The Royal College of Nursing is fully committed to the programme of health education to prevent the spread of HIV and has been actively involved in this area of the problem since 1984. One of the prime functions of a nurse is to be a health educator, and many health education AIDS adviser posts are held by nurses".
It was the college which gave one interesting statistic about the changes in the behaviour of male homosexuals. It drew attention to figures from the San Francisco health department and reported that in 1982, 21 per cent. of male homosexuals became infected with HIV. "Stop AIDS" a specially targeted educational campaign, saw this figure fall to 2 per cent; that is, from 21 per cent. in 1983; and to 0.8 per cent. in 1986. That must be the result of a substantial change in behaviour.
Lord Kennet: My Lords, would the noble Lord care to comment on the rather more grim interpretation of that figure; namely, that the yearly new cases are dropping so dramatically because there are so few left to get it?
Lord Ennals: My Lords, I have no doubt that that has had its effect, and that if that is so these percentages would not have been the same. However, I do not think one can argue that that totally explains the remarkable fall in percentages.
To pursue the point that I was making, the Royal College of Nursing went on to say that the Health Education Authority will need to ensure that all sections of society will be reached by future educational interventions. Voluntary agencies dedicated to education about AIDS and supporting people with AIDS have performed a useful and worthwhile role, but the RCN is concerned that their future activities may well he daunted or, indeed, curtailed by Clause 28 of the Local Government Bill now before your Lordships' House.
In my concluding remarks I contend that in considering the issues before your Lordships' House today we cannot totally dissociate ourselves from the issues that we debated yesterday. Since there are other processes through which the Bill will go, there is time for this House and the Government, and indeed the Minister himself—his influnce in this matter is considerable—to think again. I want the Minister to convey to his right honourable friend the Secretary of State for Social Services the view expressed by some of your Lordships that resource considerations must not stand in the way of whatever action the Government need to take to deal with what Her Royal Highness Princess Anne calls the AIDS pandemic.

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The noble Lord, Lord Kilmarnock, said that the response to the Social Services Committee in the context of resources was inadequate. I thought that that was taking it a little-too far, but it would be a tragedy if in facing up to an absolutely unique disease a lack of resources were in any way to stand in the way of taking steps that need to be taken.
Finally, I want the Minister to ensure that the considered views of the British Medical Association—as the noble Lord, Lord Winstanley, said, they have suddenly been brought to our attention, if we did not see them two years ago—on health education, prevention of the spread of infection, research, antibody testing, medical and dental treatment, the importance of avoiding the need to import blood products and strategic planning within the National Health Service are all carefully considered.
I believe, as I said at the beginning, that this has been a thoughtful debate, and I hope that the results of that thoughtfulness will lead to further reflection by the Government, who have come in for very little criticism in the course of this debate.
5.3 p.m.
Lord Skelmersdale: My Lords, on behalf of the Government I should like to congratulate the noble Lord, Lord Kilmarnock, for initiating this debate. Not only is the subject of AIDS an immensely important one, as borne out by the speeches of noble Lords, but the debate is also timely coming as it does only a few days after the world summit of Ministers of Health on programmes for AIDS prevention. The noble Lord has drawn particular attention to this historic summit, and I shall return to it later in my remarks. But first I would like to turn to the other aspect of the Motion before us which is the Government's response to the report on AIDS of the Social Services Committee in another place.
I must emphasise straightaway that the Government greatly appreciate the work that the Select Committee put into its report. The committee has addressed a wide range of questions and has brought to bear a valuable and constructive focus on the major issues to which AIDS gives rise.
In our response we have made abundantly clear how seriously we take the problem of' AIDS. As yet there have been relatively few cases in this country—1,227 had been reported by the end of 1987—but that number looks set to rise inexorably over the coming years. That was a point made by several noble Lords. Indeed the number has so far been more than doubling every year since 1981 when the first case was seen here. We must also remember that for every case of AIDS there may be two or three cases of other HIV-related illness which puts further demands on NHS resources. To meet this growing challenge we have devised a comprehensive strategy. This is set out in some detail in the report, and in the time available in this debate I can attempt to do no more than briefly outline the main elements of the strategy.
First, there is public education which plays the central part in our efforts to prevent the spread of the disease. A sum of £20 million was committed to the
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national public education campaign in November 1986. The Health Education Authority, which assumed responsibility for the campaign last October, is now well advanced in its work on planning the next stages. The national campaign is complemented locally by work carried out by individual health authorities and NHS staff to reinforce the education messages.
Secondly, a great deal of research is being carried out into the medical, biological, economic, social and service aspects of AIDS. I am most grateful to my noble friend Lord Auckland for the comments he made on government action in relation to research. A particularly notable example is the Medical Research Council's directed programme of research on vaccines and anti-viral drugs for which we are giving it £14·5 million over the next three years. This money is on top of the £3 million for the general AIDS research it supports. My department has also recently agreed to provide a further £700,000 so that the council can develop its epidemiological research on AIDS.
Thirdly, a number of measures are being taken in the field of infection control and surveillance. We are continuing to take all the steps necessary to make blood and blood products as safe as is humanly possible. As the noble Lord, Lord Ennals, will remember, the new Blood Products Laboratory opened last April and this should enable us to be totally self-sufficient in blood products by next year. We have put in place a confidential, voluntary reporting system to monitor the spread of infection and we are currently considering the recommendations of an expert group on how we can further improve surveillance. The effectiveness of the existing reporting system will be strengthened by the duties placed on health authorities under the AIDS (Control) Act 1987. Under this Act authorities have to produce annual reports on their estimates of cases and the measures they are taking. The first such reports are due by the end of July.
Fourthly, we are developing health and other services for people with HIV infection and AIDS. Over £58 million is being made available to health authorities in the coming financial year to meet the growing need for care and treatment services. And we have set out in the response to the Select Committee the policy aims that health authorities should work to achieve in providing these services.
I agree with the noble Lord who said that as far as possible people with AIDS should be assisted to live in their own homes, making use of hospital only when it is really necessary. One of our central aims to achieve this is to ensure that an effective partnership is established between statutory and voluntary bodies.
The voluntary sector has a most important part to play in the overall response to AIDS. To provide further support for voluntary bodies, we have just announced a grant of £500,000 to the National AIDS Trust for distribution to the voluntary sector and an additional capital grant of £750,000 to London Lighthouse.
I turn now to answering specific points that have been raised. I would agree with the noble Lord, Lord

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Winstanley, that the action taken by government, which I have outlined, does not indicate a government who have gone off the boil.
The noble Lord, Lord Kilmarnock, asked about a national co-ordinating committee. In the Government's response to the Select Committee, we agreed on the need for a long-term strategically planned response to AIDS. However, we pointed out that extensive co-ordination arrangements already exist at ministerial level and also between the Government and the statutory agencies and voluntary bodies. I should like to consider the noble Lord's suggestion that the ministerial committee at a very senior level does not have the reaction with, and to, the public that perhaps it might. However, I also bear in mind that perhaps that is a role better given to the Health Education Authority.
Nonetheless, we inevitably need, as the noble Lord, Lord Winstanley, pointed out, information on how we are doing. I draw the attention of the House again to the AIDS (Control) Act which would give that information. We shall have to see from the first reports in July how that is working.
Neither HIV infection nor AIDS are notifiable diseases in the United Kingdom. We have established a national system of voluntary confidential reporting systems which work well. A statutory system could be counter-productive, as some people may be discouraged from coming forward for medical help.
I agree with my noble friend Lord Quinton and I can confirm to the noble Lord, Lord Winstanley, that HIV is not highly infectious. It is not transmitted through normal social contact. However, there are practical difficulties which we have to face. Like the noble Lord, Lord Ennals, I am not sure whether to congratulate the noble Lord, Lord Kilmarnock, in attracting the right reverend Prelate the Bishop of Worcester to this subject or the right reverend Prelate for being attracted. In any event, we were all delighted by, and grateful for, the maiden speech of the right reverend Prelate and we hope to hear from him again, soon and often.
The United Kingdom Government consider that voluntary bodies, including, as the right reverend Prelate pointed out, the Churches, have a key role to play in complementing the work of statutory agencies. The United Kingdom voluntary bodies are making a valuable contribution in this country and elsewhere. The Government are providing substantial and increasing support for voluntary sector activities.
The voluntary sector activity is particularly important for those who need counselling and training. The Social Services Committee made six recommendations about the two linked subjects. We must distinguish between the need for personal counselling and support for people with HIV infections and AIDS, and the more general need for NHS staff and social workers to give accurate health education information about AIDS. We have already put in hand a number of counselling training initiatives. The three centrally funded courses referred to in Paragraph 4.11 have been attended by 2,000 health, social and voluntary workers.
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The Government's reply in Paragraph 4.15 makes clear that we are considering seriously the future planning and funding of courses of counsellors and in particular the need for support of carers. We look to the relevant professional bodies to ensure that proper basic training in AIDS exists and to recommend to their members, such as doctors, nurses and social workers, that they should be receptive to such training.
The right reverend Prelate, together with several other noble Lords, mentioned hospices. I welcome the helpful comments which have been made regarding the response of the hospice movement to the AIDS problem. There is a debate going on within the movement and we have been greatly encouraged by the sympathetic attitude which has been shown. The Government believe that it is vital for health authorities to work closely with the voluntary sector hospices in planning the appropriate response to the need for terminal care of people with AIDS.
Turning to the Mildmay Mission, I can say to the noble Baroness, Lady Masham, that the Government approved a capital grant of £150,000 in May of last year towards the cost of converting a ward in Mildmay Mission hospital to provide hospice care for people with AIDS. We have now received a further request for financial assistance in converting another ward for the same purpose. We hope to respond shortly to the request.
I welcome the emphasis placed by my noble friend Lord Auckland on treating AIDS patients no differently than other patients are treated. Within the terminally ill sector whose care is provided for by the hospice movement, that is exactly what is happening. I am also grateful for the references he made to the action of my right honourable friend the Secretary of State for Employment in shaking the hand of an AIDS patient in San Francisco. Moving a little way ahead of my theme of the moment, the London Declaration of the World Summit of Ministers of Health on AIDS stated that the stigmatisation of people with AIDS must be avoided. Anything that we can do to achieve that must be praised.
That leads me to consider the education of schoolchildren regarding AIDS. The noble Lord, Lord Kilmarnock, raised an important point about such education. The Government consider that schools and the education service generally have a clear role to play in ensuring that young people are fully and accurately informed about AIDS. A video and resource package about AIDS entitled "Your Choice for Life" is being distributed to all secondary schools in England and Wales and to education authorities in Scotland. We anticipate that that will be very widely used as part of the schools' overall programme of health and sex education.
I part company with the noble Lord, Lord Kilmarnock, on his suggestion that AIDS is too serious a subject to be left to the decisions of school governors. I do not believe that any school governor worth his salt would vote against AIDS education. I wish to point out that school governors are, in their own turn, elected.
Comment was made in passing to my attitude to Clause 28 of the Local Government Bill, on which

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your Lordships have been dividing fairly regularly in the last two days. The noble Lord, Lord Ennals, sought to tweak my tail. I point out to him that the clause stand part debate was a different matter from that on the Halsbury Bill. I shall say no more than that.
Lord Graham of Edmonton: It was amended.
Lord Skelmersdale: It was amended by a Government amendment. Irrespective of the argument about whether local authorities are suitable bodies to carry out health education—I am well aware that discussion on that matter is going on up and down the country—I gently suggest to the noble Lords, Lord Ennals and Lord Kilmarnock, that they take another look at Clause 28(2) of the Bill which says, firmly, clearly and shortly, that:
"Nothing in subsection (1) above shall be taken to prohibit the doing of anything for the purpose of treating or preventing the spread of disease".
That would of course include AIDS.
The noble Lords, Lord Winstanley and Lord Bonham-Carter, raised the matter of prisons and AIDS resulting from homosexual or drug activity in them. I have noted the first point and particularly the point made concerning the possibility of homosexual rape. I shall ensure that that matter is brought to the urgent attention of my right honourable friend the Home Secretary.
I agree with the noble Lord, Lord Bonham-Carter, concerning the great importance of drug misuse practices in the spread of infection. Indeed, I should put that near the top of the list in terms of likelihood of transmission of the disease. Both the reports which the noble Lord mentioned have been received recently and are being considered. They are the first report from independent researchers on the pilot syringe exchange schemes and the first report from the working party of the Advisory Council on the Misuse of Drugs on measures needed to inhibit the spread of infection in drug misusers. Where we go from there, I am not quite sure. I shall keep the noble Lord informed on the dissemination of the reports.
Even before the reports were received, the Government funded a major expansion of drug misuse services. The aim has been to establish a multi-disciplinary community-based service involving primary health care teams and generic youth and social workers, as well as specialist facilities. A high proportion of central funding has gone to the voluntary sector, which provides a range of advice and counselling services, together with longer-term rehabilitation facilities. Fifteen pilot syringe exchange schemes have been established. It is with those that one of the reports which I have mentioned deals.
The noble Baroness, Lady Masham, mentioned Phoenix House in connection with drug misusers and the particular problems faced by people with HIV infections or AIDS who are injecting drugs. The working party of the Advisory Council is now looking at that issue, perhaps with a view to making a second report. We know of and welcome the interest of Phoenix House in the field. We shall be
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looking for advice to the working group on the role that drug rehabilitation can play and how we can ensure that adequate funds are made available.
The noble Baroness devoted the major part of her speech to the question of screening, which I would accept is one of the most important issues arising from AIDS. However, I must say to her and to the House that the Government have no intention of emulating those countries which have introduced compulsory screening for immigrants or other groups. Quite apart from the grave problems of principle that would arise, our expert advice indicates that it would be of little value in controlling the spread of AIDS. Instead of compulsory screening we have established an effective system whereby anyone who wishes can voluntarily be tested and tested with complete confidentiality. In our view, that approach is likely to prove far more effective as well as being less socially disruptive. As the noble Baroness pointed out, it is essential that such testing is accompanied by counselling.
The noble Lord, Lord Kennet, asked why anonymised testing was bad science and bad ethics. I can tell him that an expert group under Dr. Smith of the Public Health Laboratory Services has been considering surveillance of the AIDS epidemic and we have recently received its report, and are now studying it. The group discussed the scientific pros and cons of anonymised testing for HIV antibodies and it would be inappropriate for me to comment now on its conclusions. I confirm that anonymised screening is indeed undertaken for other surveillance, for example for influenza strains, but, as was pointed out a few months ago in legal advice to the British Medical Association, testing for AIDS has such consequences that it cannot be considered like other routine tests.
Lord Kennet: My Lords, perhaps I may ask the noble Lord a question on that point. Are we to take it that, in the view of the Government and their advisers, the desirability of widespread routine screening for a disease is in inverse proportion to its gravity—that is to say, the more serious the disease the less we need to know about it by widespread screening?
Lord Skelmersdale: My Lords, no, I do not think that one can draw that conclusion from what I have said. However, I shall look again at what I have said and perhaps I may write to the noble Lord.
The noble Lord, Lord Hunter, continued the theme of testing and therapy. I share the hope expressed by him that there will soon be an effective therapy and eventually a cure. As the noble Lord said, the Medical Research Council is supporting excellent research work and we all hope that it will produce results shortly. As he remarked, when there is a cure everyone will come forward for testing; but that is not the present position. Therefore we must ensure that, in the absence of a cure, people are not discouraged from asking for advice, counselling and testing, where appropriate, by the fear that they will suffer discrimination or be made scapegoats as a result of those tests.

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I realise that other points require a response but I observe that I am running very rapidly out of time. Therefore I shall write to noble Lords who have raised those points.
I was especially glad that in his Motion today the noble Lord drew attention to the summit, at which I was privileged to be present, since I consider that it marks a historic step forward in the global fight against AIDS. As the House is aware, the summit was jointly organised by the World Health Organisation and the Government, and we were extremely indebted to Her Royal Highness, the Princess Royal, who graciously consented to open the proceedings. It brought together an unprecedented number of Health Ministers from all over the world. Almost 150 countries were represented, over 74 per cent. at ministerial level, together with major international agencies, voluntary bodies and distinguished individuals. I believe that it was a unique gathering.
Not only did the summit establish a general consensus on the urgent need for co-operative international action on AIDS, but it demonstrated a universal commitment to take that action; and a recognition of the crucial role of public education. The London declaration adopted at the summit makes several important statements about what preventive programmes should contain and the principles that should underpin them. Copies of this important declaration have been placed in the Library. In view of the time I shall not read out the declaration as I had intended.
In my speech I have set out a substantial record of action and achievement, both nationally and internationally. But I do not wish to give the impression that we are in any way complacent. Far from it. As the London declaration states, AIDS poses a serious threat to humanity and urgent action is necessary to defeat the disease. We do not have the luxury of time to spare. That is why we must and we shall redouble our efforts to contain its spread and ultimately to eliminate it altogether. In the concluding words of the declaration:
"We can and will begin now to slow the spread of HIV infection."
That is why I congratulate the noble Lord, Lord Kilmarnock, on this most timely, important and interesting debate.
5.26 p.m.
Lord Kilmarnock: My Lords, fortunately, I have two minutes left in which to thank speakers, on my own Benches and on all sides of the House who have participated in what I believe has been an extremely constructive and varied debate. Practically all the main topics associated with AIDS have been touched upon.
I simply say to the noble Lord, Lord Quinton, that I was not trying to draw any false conclusions from the figure of 322 cases contracted through heterosexual contact that I mentioned. They had been separated out from intravenous drug users, but obviously one cannot tell whether or not they were suffering from venereal disease.
It was interesting that the topic of anonymised blood testing came up in the debate. It was mentioned by a number of speakers, including the noble Lords,
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Lord Hunter, Lord Kennet and Lord Winstanley, and I think that it offers legitimate ground for debate. There are two points of view and I think that we must take this debate further. One can simply say that some interesting points have been made today.
I shall read what the noble Lord, Lord Skelmersdale, has said on the question of education. I was very glad to hear the importance that he attached to it. I think that there is a legitimate question to be asked about the Education Reform Bill. We may have to write something into it to ensure that there is room for AIDS education to take place. He chided me for doubting the wisdom of elected governors. I accept the rebuke, but there must be time for it to happen if they are to choose that it should. The noble Lord did not have time to reply to my point relating to the pressure on medical manpower, which I thought was an important aspect of my speech. I hope very much that when he writes to us on one or two of the other topics he will include that one. With those few words, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

The Crown Suppliers
5.28 p.m.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, with the leave of the House, I shall now repeat a Statement which has been made in another place by my honourable friend the Parliamentary Under-Secretary of State about the future of the Crown Suppliers. The Statement is as follows:
"The Crown Suppliers is a self-financing business within the Department of the Environment. It sells furniture and other equipment and services to the public sector. It has operated as a government trading fund since 1976 and under the title of The Crown Suppliers since 1984.
"As direct suppliers to government departments, the Crown Suppliers has achieved considerable success in the design and procurement of its own-brand furniture, the procurement and supply of a wide range of equipment and the provision of fuel and transport. I have, however, considered the role and status of the Crown Suppliers in the light of the untying of departments from the compulsory use of purchasing agencies.
"I have had the benefit of two recent reports by consultants, and have discussed a summary of those reports with staff representatives. It is clear that the Crown Suppliers must reduce their overheads substantially to reflect new working practices and purchasing policies in government departments.
"Many of the activities of the Crown Suppliers are, however, of a commercial nature, and there is little doubt that they could be carried out more efficiently in the private sector. The question therefore is whether the Crown Suppliers should be given full freedom to compete in both public and

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private sectors, which would entail transfer to the private sector.
"I am convinced that privatisation provides the brightest future for the Crown Suppliers, as well as a continued source of competitive supplies for the public sector. It will also allow the Crown Suppliers to have access to a wider market. It is the Government's view that the private sector should be invited to bid for those of the Crown Suppliers' businesses which can be undertaken on a normal commercial basis. Some activities will have to remain in the public sector for security and other reasons.
"The Government intend therefore to seek further advice from a financial institution on the best method of effecting the sale of the Crown Suppliers. The business available for sale will include the provision of furniture, furnishings and other equipment on an untied basis for the public sector and the transport hire business. In evaluating offers received, I shall pay particular attention to proposals for the involvement of the staff in the success of the enterprise.
"I also intend to bring forward legislation to effect the transfer at any early opportunity".
My Lords, that concludes the Statement.
Lord Graham of Edmonton: My Lords, I should like first of all to thank the Minister for repeating the Statement made in another place. I should also like to advise the House that my noble friend Lord McIntosh is not dealing with the matter as in his professional consultancy business he acts for the Crown Suppliers.
The Statement is very disappointing. Even in his new manifestation, the noble Earl will be aware that noble Lords on this side of the House have for many months sought to find the answers to questions concerning the future of the Crown supply service. Perhaps I may remind the Minister of one or two of the statements he has made.
In the fourth paragraph of the Statement he said that he has had the benefit of two recent reports by consultants. He must know that in the past three years the Government have commissioned four reviews to look into the operation of the Crown Suppliers. There was the Turton Report of 1985 and the Central Unit of Purchasing Review of 1986. They acknowledged that privatisation of the Crown Suppliers, though feasible, would not be in the public interest. The Minister and his colleagues then commissioned further reports. Was it not a case of seeking a second opinion, then a third opinion, and in this case a fourth opinion, until finally they had the opinion they wanted?
Where is the public interest aspect in these matters? The Minister must be aware that the earlier reports said that the public interest ought to be taken more fully into account. Even if privatisation was on, it was not on in the public interest. The Minister told us in the Statement that he had discussed these matters with staff representatives. Is it not a fact that the Crown Suppliers employs 1,486 non-industrial staff? Can he tell us what assurances he has given the staff,
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particularly those who are employed in sheltered workshops and those who are the employees of small organisations? What care or concern have the Minister and his colleagues taken to ensure that not only those who can look after themselves but the very many who cannot will be taken care of?
Will the Minister also confirm that the CBI has applauded the Crown Suppliers for its priority sourcing scheme, guaranteeing business and encouraging investment in plant and machinery throughout the country in designated development areas? Can he also confirm that under the present aegis the successful Crown Suppliers not only makes a profit but exceeds the targets that are set? Will he confirm that British Telecom, British Gas, British Rail and most recently British Aerospace all choose to use the Crown Suppliers because they judge it to offer best value in terms of cost, quality and reliability of service? Does not the privatisation of the Crown Suppliers amount to nothing more than its abolition? Is it not a case of political dogma replacing a successful public enterprise?
Why does the Minister say in one of his statements that there is little doubt that these activities can be carried out more efficiently in the private sector? Is not the Government's policy that if it is inefficient it can best be done privately and if it is efficient it can be done more efficiently privately? That is a kick in the face and an insult and is resented deeply by those who carry on the Crown service.
The Statement has done nothing to prove that a public service can be profitable, innovative and successful. This service has been cannibalised and flogged off to the highest bidder, with the friends of the Government making money out of the sacrifice of the public interest. The Statement is a cynical betrayal of the employees, the taxpayer and, above all, the public interest. The Minister should feel ashamed to bring this Statement to the House. He should even now keep the Crown Suppliers in the public sector.
Lord Diamond: My Lords, we agree entirely with what has been said from the Opposition Front Bench to the extent that we welcome the Statement repeated by the noble Earl. I should also like to say that we welcome the arrangements made through the usual channels which permit this discussion to be taken at a very convenient moment. I hope that this will be a useful precedent for the future.
The House knows the stance of noble Lords on these Benches on privatisation. In this instance it is obviously a borderline case where certain activities are of a purely commercial nature and others are certainly not. The Minister has said nothing in the Statement to persuade, as he has the responsibility to persuade, those who have doubts about the issue that this is the right way of dealing with it. If you want to change from a public corporation to a private corporation it is the duty of those who put forward the change to justify it. There is nothing in the Statement which goes anywhere near doing that. All there is is the usual assertion that, whatever is before the Government, it can be carried out more efficiently in the private sector. That is an assertion. It is not a persuasive, logical argument. At all events we hope

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that when the legislation comes before the House the Government will be far better prepared to justify this move.
In the meantime, perhaps I may ask the Minister one or two questions. I too am very concerned about the two recent reports. Have they been published or are they going to be published, because they seem to go against the general tenor of what we previously understood was the best opinion with regard to a transfer of this kind? Secondly, what is the view of the Crown Suppliers? Has it been consulted? In particular, have the staff and employees been consulted? What is their view? Are they completely, totally and fully protected in any proposed transfer as to their terms of service and pension rights? The House knows that a transfer of this kind always produces difficult problems of reliability concerning future pension rights and there is nothing in the Statement about this.
Have the management employees been consulted about a possible management takeover? Is that what is meant in the Statement by,
"particular attention … to proposals for the involvement of the staff in the success of the enterprise"?
Finally, can we be told more about the application in this case of the Government's philosophy of divide and damage towards which they are leaning more and more when it comes to the privatisation of businesses which are best run as one complete entity and which are now being divided purely because certain parts of them can be sold in the market? The part that cannot and should not be sold is the part dealing with security, military supply and so on. Can the Minister say a little more about that aspect and how it is to he protected?
The Earl of Caithness: My Lords, I am pleased that both noble Lords were able to welcome the Statement as such but not necessarily all its contents.
The noble Lord, Lord Graham of Edmonton, reminded the House that four reviews have taken place. They looked at various different aspects of the Crown Suppliers. They were not all concerned with privatisation, or the feasibility of privatisation, as he knows full well. As I said in the Statement, the summaries of the last two reports have been put in the Library. We believe that the activities of a commercial nature can be provided more efficiently in the private sector. That is entirely logical. That is what quite a lot of the Local Government Bill is all about and in which the noble Lord has taken a very active part. If it is right for local authorities, so it is right for central government.
Moreover some change to the Crown Suppliers is absolutely inevitable. What neither noble Lord seems to have grasped is that since April 1987 government departments have been untied and they are free to shop around for their suppliers. That is correct. It locates the buying decision with the source of funds. But that has affected the Crown Supplier's performance. Direct sales to departments in 1987 were 6 per cent. lower than in 1986. That is only a nine-month period, so the Crown Suppliers would have to reduce overheads, sharpen its competitive edge and widen its spread of markets to survive. The
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Government believe that its best chance of increasing sales in new markets lies within the greater freedom of operating in the private sector.
Any of your Lordships who have read the summary of the Dewi Jones report will realise what an emotional upheaval it would be for the Crown Suppliers if it remained in the public sector. For that reason we believe that privatisation is the best solution. The noble Lord, Lord Graham of Edmonton, did not mention anything to do with the staff. The noble Lord, Lord Diamond, did. Surely we must consider the future of the staff—
Lord Graham of Edmonton: My Lords, when he reads Hansard will the Minister reflect that I challenged him directly on the statement that consultation with the staff had taken place? I asked him what the reactions of the staff had been.
The Earl of Caithness: My Lords, the noble Lord talked about consultation with the staff. I shall come on to consultation with the staff, but we are concerned with the future of the staff. Where one has a declining market where departments are going out to look at suppliers other than the Crown Suppliers and the Crown Suppliers is facing a narrowing market, surely the right approach is to encourage the Crown Suppliers, which has about 8 per cent. of the global market, to go into the private sector, to compete and to get a wider market. That is the right way for the future of the staff.
Of course we have consulted the staff. There was a delay in that unfortunately one of the main negotiators on the trade union side was ill for a large part of the latter end of last year when the negotiations were due to take place. But my honourable friend the Minister concerned met the staff in December last year.
The noble Lord, Lord Graham, asked about sheltered workshops. To a large extent firms will have to compete on merit for the Crown Suppliers' business as they do now. The Government's purchasing policy, which assists sheltered workshops, small firms and firms in designated areas, now applies to all departments carrying out their own buying following the untying provisions. These conditions may be made by Government as a requirement for supply to the Government whether a company is in the private or the public sector.
Lord Graham of Edmonton: My Lords, but will the Minister—
The Earl of Caithness: My Lords, let me just deal with all the other points. I think that is right.
The noble Lord, Lord Diamond, raised the very important matter of pensions. Pensions and redundancy provisions would have to be comparable under the Transfer of Undertakings (Protection of Employment) Regulations. The exact nature of those arrangements will, as he rightly knows, require careful and detailed consideration.
Yes, we do not rule out the possibility of a management buy-out. The noble Lord interpreted the words in the Statement correctly. We have not divided and damaged. We have given the Crown Suppliers the opportunity to prosper.
5.45 p.m.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that despite the gloomy observations of the noble Lord, Lord Graham of Edmonton, all experience of other activities which have been privatised supports the assertion in the Statement that the functions of this body can be more efficiently performed in the private sector? Can he confirm that the necessary legislation will be introduced during the current session?
The Earl of Caithness: My Lords, my noble friend is absolutely right on his first point, and that is a major reason for the Government to proceed on this route. However, I cannot give him a firm answer at the moment on the date of the legislation but we hope that it will be in the fairly near future.
Lord Jenkin of Roding: My Lords, as the former Secreary of State for the Environment who established the Crown Suppliers as a separate entity in the Property Services Agency, let me say how very much I welcome the Statement that has been made today about the privatisation. Is my noble friend aware that at the time the Crown Suppliers was set up we envisaged the privatisation of that organisation? Though it has taken a year or two to come to fruition, it will be very welcome, not least by many of the senior managers in the organisation who have looked forward to it as being the way in which they could get the Treasury off their backs. I hope that my noble friend will be able to accelerate the legislation as swiftly as possible.
The Earl of Caithness: My Lords, I am grateful to my noble friend, who has considerably more experience of these matters than I have. I hope that your Lordships took on board his relevant comments about what the managers of the Crown Suppliers want.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister for providing the opportunity to raise one or two matters. Will he explain why in the terms of reference of the last two reports consideration of the public interest aspect was not included? He will be aware that the public interest was the strongest prevailing criterion for the advice given to the Minister in the first two reports. Will he explain why it was deliberately excluded from the last two reports? In my view the public interest is very important.
Will the Minister also say more about the TUPE '81 pension transfer arrangements? The House will recall that when the ordnance factories and the dockyards were privatised the trade unions concerned were apprehensive about the impact of their transfer from one employer to another. I am not flying kites or setting hares loose here, but can the Minister tell me that the Government will consider carefully the experience gained of previous privatisations?
He also spoke rather glibly about those who presently work in sheltered workshops and who, are the recipients of employment from government
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agencies. The Minister professed that they would be looked after. Is he seriously saying that he intends that those who are less able to look after themselves and many others—I referred to them in my previous question—in disabled and sheltered workshops will be looked after very carefully indeed? The Minister could help them by giving assurances that in any contract clauses will be included to ensure that.
Will the Minister finally explain why he has deprived the ratepayer and the taxpayer of the measuring rod which the Crown Suppliers gives? When taxpayers have considered value for money from private sources, at least they have had up to now in their control a government supply agency and a purchasing agency. It has been a measuring rod and a monitor. That will disappear. Can the Minister tell us how he will ensure satisfaction from the new arrangement if that disappears?
The Earl of Caithness: My Lords, pensions are always a sensitive and difficult area that deserves great consideration. That will be given. Concerning sheltered workshops I can only repeat that the conditions that may be made by any government as a requirement for supplying to them can be introduced in the public or the private sector, but we realise what an important part this is for small firms and sheltered workshops. We take our commitment to them very seriously. Of course I cannot give guarantees, and I am sure that the noble Lord will realise that.
The noble Lord, Lord Graham of Edmonton, went on to deal with what might be called quality and standards. There are appropriate British standards for various requirements such as fire retardancy, and it is a matter for the departments to make specifications when buying. The Crown Suppliers is not the only department in government interested in developing safer materials. In that regard I should like to mention the DHSS supplies technical division, the DTI consumer affairs division and the Home Office where in my previous position I had a good deal to do with the fire service. Therefore there is a range of in-house departmental bodies which are capable of performing all the functions about which the noble Lord is concerned.

EC Internal Market
5.50 p.m.
Lord Ezra Lord Ezra rose to call attention to the case for more rapid progress towards the completion of the internal market of the EC by 1992; and to move for Papers.
The noble Lord said: My Lords, in moving the Motion standing in my name in the Order Paper, I should like to say how delighted I am to see that the noble Lord, Lord Rees, has chosen this as the occasion on which to make his maiden speech. I dealt with him on many occasions in the past during his activities as a Member in another place and as a Minister. I have unfailingly pleasant memories of those occasions.
I have tabled the Motion because I believe it to be timely that we in this House should be considering

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what potentially could be one of the most important developments in Europe in the years ahead. The completion of the internal market in 1992 could offer this country and other members of the European Community an unrivalled opportunity to expand their economies, improve the social well-being of their inhabitants and compete effectively with the other strong industrial groups throughout the world. At the same time there have been reports of delays in the procedures for approving the various measures needed to bring this integrated market into operation by the due date. I think that it would be helpful if we looked at that and in particular heard the views of the noble Lord, Lord Beaverbrook, about that aspect when he replies for the Government.
It might be asked, as members of the European Community why are we now having to concern ourselves with the completion of the internal market. After all, that was one of the main objectives of the Community when it was first set up by the original six signatories to the Treaty of Rome in 1957. It was a factor which motivated us as a country to join in 1973. I believe that that happened for the simple reason that, although the tariff barriers were removed expeditiously in the movement of goods within the Community, very soon a complex of non-tariff barriers was erected. They were barriers which related to differing standards, health and safety regulations, frontier delays and so on. There was a whole plethora of impediments against achieving the objectives of the Community. So it is that we are now taking the necessary steps to deal with that.
The other day I was reminded by Mr. John Drew, the Head of the UK office of the Commission, of a wise saying by Jean Monnet, the architect of the European Community. He said, if I may quote the French:
"L'Europe se fait par des petits pas".
The English translation reads, Europe is created in small steps. Indeed he was right and we cannot be rushed into these matters. The fact that it has taken us three decades to face up to the realities of the integrated market may not be a subject for concern so long as we now get on with it.
I should like to remind the House that this year is the centenary of the birth of Jean Monnet. I had an opportunity to meet him when I was a member of the UK Delegation to the High Authority of the Coal and Steel Community in Luxembourg, during the early 1950s. As far as Britain was concerned, he always took the view that we should take some time to make up our minds about membership but that once we had made up our minds we should take it seriously. We now have an opportunity so to do.
The plans that have been made for the completion of the internal market are extensive and meticulous. As your Lordships will recall, it began in 1985 when the Commission was asked to draw up a plan for its completion. The plan was presented in what was known as the White Paper, which was pepared in a most comprehensive way. The noble Lord, Lord Cockfield, as Vice-President of the Commission, played a large part in that. The objective is to make sure that in all the necessary details actions are taken to introduce the free movement of goods, persons,
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services and capital within the European Community. The subsequent passing of the Single European Act, which was ratified in 1986 and 1987 by the various member countries, should facilitate this process.
Turning to the present position, the Commission has tabled two-thirds (which is approximately 200) of the various actions which need to be taken to make this integrated market a reality. It considers that by the end of this year it will have introduced virtually the totality of the actions that need to be taken. On the other hand, the approval of these actions by the Council of Ministers has been somewhat slower, as one might reasonably expect. I should like to ask the noble Lord, Lord Beaverbrook, whether he considers that the speed at which the Council of Ministers is now approving the various actions is in line with the objective of completing this whole endeavour by 1992. The impression I have received is that during the British Presidency in 1986 a good deal of progress was made but that subsequently progress has not been quite so fast.
I think that it is desirable to turn next to the broad objectives which the Commission has set itself for achievement during the course of this year. As I understand it from an important speech made by the noble Lord, Lord Cockfield, at a gathering of ELEC, of which the noble Lord, Lord Rippon, is chairman, he was not so much concerned at the number of measures which were agreed at any one time as with broad groupings of objectives. He set out four objectives which it was hoped would be achieved by the end of 1988. The first was in connection with standards.
Standards have been a real problem within the Community. The differing standards have acted as an obstacle to the free movement of goods. The attempt to bring about a total harmonisation of standards has been extremely difficult. The Commission has introduced what I believe to be a big move forward: it is the concept of mutual recognition of standards. That is that when a standard is agreed in a member country it should be accepted throughout the Community, it being agreed that the basis on which it is done will be a reasonable basis.
At the same time, one naturally hopes that some of the standards that we have established here will be accepted generally. I speak with some knowledge of this subject because I was president of the British Standards Institution. For example, there is a BS5750, which is the national standard laid down for quality management systems, and that has been a big breakthrough in Britain achieving a much improved approach to quality. We may be able to have that accepted generally. We must hope that this question of mutual standards will be adopted by the end of this year.
Secondly, the Commission is aiming for the opening up of public procurement. Obviously that cuts both ways. We would hope that our capital goods manufacturers in particular will win many more markets abroad but obviously it opens up the markets here. I have sufficient knowledge from my experience in one sector of industry in Britain to feel that we can stand up to that competition successfully

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and we ought to press for this opening up. Indeed, the noble Lord, Lord Beaverbrook, was kind enough to write to me the other day as a result of a supplementary question I put recently and he assured me that the Government are keen to secure this opening up of public procurement.
Thirdly, there is the question of professional qualifications. So far there has been a real impediment to people possessing professional qualifications in the UK, for example, accountants, doctors or whoever it might be, practising in the other countries. Again the Commission's proposal is that there should be mutual recognition and I believe that that would be a very big step forward.
The fourth point that the Commission wants to see introduced in this period is common directives on banking, on which details have recently been published, and the liberalisation of financial services, which of course is a matter of great interest to this country because of our expertise in that sector. Those are the four broad objectives which, as I understand it, the Commission would like to see introduced during the course of this year, and no doubt we shall hear later whether that is possible.
Next I should like to turn to the problems which we understand from reports in the press have been encountered by the British Government in their negotiations. These seem to cover two issues. First, there are certain aspects of the freedom of movement of individuals which appear to have raised difficulties, and it would be useful for us to hear about those. Secondly (and this has achieved much more public notice), there is the question of what is known as fiscal approximation. There are new phrases which emerge from time to time and this is one of them: fiscal approximation. It deals with the vexed question of VAT and, as I understand it, this could be a negotiable proposition. The lines are not drawn hard and fast but it would be useful to know where Her Majesty's Government stand in this matter.
Finally, I should like to turn to the awareness of British industry regarding this big opportunity. For the moment I regret to say that, as far as I can tell, it is fairly low. A comparison was made with French industry by the President of the CBI recently and he put the awareness of British enterprise at something like 5 per cent. compared with about 80 per cent. in France. I know that the noble Lord, Lord Young of Graffham, is leading a vigorous campaign to increase awareness. There is to be a meeting in London in April followed by regional meetings to bring this about. That perhaps is the most important issue of all.
What is the point in removing all these barriers if we are unable to take advantage of the resultant situation? Therefore, we have no time to lose and we must make it clear to industry that it must recognise that 1992 is something that exists on the calendar and there are only a limited number of years before we can prepare ourselves for taking advantage of this great open market—320 million people and £1,600 billion of combined GNP—which is opening up on our doorstep.
If we can combine pressing forward with the removal of the barriers and the awareness of British industry of the opportunities which this would present, this could be very much to our' ultimate advantage and to the ultimate advantage of Western Europe as a whole. The fact is that in spite of the existence of the EC for many years, a great deal of the technological advance in the world has occurred in other countries. It has occurred in other countries because they have combined their efforts, as in the United States, Japan and the various countries in the Pacific Basin. We now have an opportunity to combine our efforts effectively with our European partners. It is an opportunity we must seize. I hope that it is an opportunity in which Britain will lead the way. I beg to move for Papers.
6.5 p.m.
Lord Rees: My Lords, I hope I may begin by thanking the noble Lord, Lord Ezra, for his very kind references to myself. I also congratulate him not only for a singularly lucid, powerful and comprehensive speech but also for his impeccable sense of timing in introducing this debate in a week when Herr Pohl of the Bundesbank has issued, or perhaps reissued, a pressing invitation to this country to become a full member of the EMS, when our own governor of the Bank of England has stressed the need for convergence in banking regulations and when my noble friend Lord Young of Graffham has indicated his support for emphasis on the internal market during the German presidency of the EC.
I hope that the House will be indulgent to this my first intervention in its debates, particularly since it will inevitably cover ground that has been well tilled before. In particular, perhaps I may express my admiration for the work of the Select Committee and in particular for its 14th Report of the Session of 1984–85.
The deadline of 1992 approaches. Its realism has been doubted but certainly the work and enthusiasm of M. Delors and my noble friend Lord Cockfield must command recognition. Of course, progress has been made, and the United Kingdom Government have made a notable contribution in this field. Indeed, I hope I may recall that I played some modest part, when Minister for Trade, in the early internal market councils. It may be that we did not have a comprehensive agenda of 300 proposals, but at least we reinstated this critical question on the agenda of the Community. As the noble Lord has reminded the House, there are a wide range of matters to be addressed. Of the proposals of my noble friend Lord Cockfield more than half have been achieved, but I want tonight to concentrate on one sensitive area which promises exceptional difficulties: the field of fiscal harmonisation.
Every country is naturally jealous of its autonomy in this field. There are particular sensitivities, historical, social and economic. If we take the case of the UK in the field of VAT, its basic rate of 15 per cent. is comfortably in the middle of the European Community range. Our particular difficulties derive from the narrowness of the scope of our tax and from the zero rate. To extend VAT to, for example, food, children's clothes or even books must occasion keen

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debate and I am certain that your Lordships will wish to contribute to that debate. Powerful voices in the course of the last election and thereafter have indicated the position that the Government are likely to take up. Having had some hand in the 1984 Finance Bill, I know the sensitivities aroused by even a modest extension of VAT to take-away foods. I have debated keenly the impact of such a measure on the economy of Chinese take-away restaurants and the meaning of ambient temperatures in relation to food. I have felt the power of the publishing lobby in relation to any extension of VAT to books, magazines and newspapers of whatever merit. I have felt the scourge of the family lobby when any question of an extension to children's clothes has been mooted.
The conclusions which I offer the House are that, whatever the political sensitivities, the case for a wider base for our indirect taxation, particularly VAT, is structurally and economically sound. If the VAT and Excise duties were harmonised round a European norm, the Chancellor of the Exchequer would be likely to be slightly in credit. Under our parliamentary system special interest lobbies are enabled not only to be highly articulate but to mobilise, if momentarily, an often disproportionate amount of support.
The only possibility of advance in this field which I can see depends, therefore, on the construction of a package. A piecemeal advance will, I believe on past experience, be defeated piecemeal. I commend to the House the example of Senator Packwood's package of fiscal reform in the United States some two years ago. A well-balanced package can often balance gains and losses over the whole of our society. The social security system and, in particular for example, child benefits, could be invoked to cushion some of the consequences.
The administrative advantages of a single rate may have to be sacrificed and in more sensitive areas a lower rate or rates constructed. I believe that if the internal market is completed we are particularly well equipped as a country to take advantage of the opportunities offered, particularly, as the noble Lord, Lord Ezra, reminded us, in the field of financial services—specifically banking and insurance. I believe that these prizes are worth a greater measure of flexibility in the field of fiscal harmonisation than has yet been shown.
I conclude with a reference of no particular originality to another relevant factor in this field—full United Kingdom membership of the EMS. Since 1979 we have encountered practically every combination and permutation of fiscal and currency circumstance. We have had a pound weak against the United States dollar; we have had a pound strong against the United States dollar; we have had a pound weak against the deutschmark; we have a pound strengthening against the deutschmark.
The official answer—I admit to having given it myself several times from the Dispatch Box—that we will join the exchange rate mechanism at the appropriate time is, I believe, no longer a credible statement of government policy. I believe that present circumstances are not unfavourable to our
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responding to Herr PÖhl's invitation and joining the exchange rate mechanism.
Our economic base and our national self-confidence have immeasurably increased over that of a decade ago. I hope the Government will play a yet more central role in the affairs of the Community; not just in matters such as the budget of the common agricultural policy, critical though they may be, but positively in the advancement of the goals of the European Community and a move towards the free movement of goods, capital and labour which must contribute, I believe, to the political and economic health of this country.
6.14 p.m.
Lord Jay: My Lords, though I do not wholly agree with the noble Lord, Lord Rees, in all that he said this evening, I congratulate him all the more warmly because in another place I often enjoyed his financial expertise and, indeed, agility of mind. I hope they bloom merrily here too.
The noble Lord, Lord Ezra, has today painted a somewhat rosy picture of the proposed common internal market of the EC. However, though he spoke of facing realities he did not, if I may say so, face some of the less rosy realities in this prospect. Of course there are some special cases—the insurance and banking service is one he mentioned—where the present EC rules have certainly discriminated against Britain and ought to be amended. However, there is danger in believing that that is true also of manufactured goods generally where the picture to date and the prospect is much less rosy.
The noble Lord, Lord Ezra, spoke of this great market—was it 200 million, 300 million or 1,600 million people?—but we heard all those expressions many years ago and we were promised that if we joined this wonderful market our trade balance would greatly benefit. For a moment tonight we should look at what has actually happened in hard facts rather than ringed with those rosy hopes.
The hard facts are that as far as concerns manufacturing trade the removal of tariffs from our manufactured imports from the Continental EC simultaneously with the raising of food prices has pushed what was previously a small surplus in UK visible trade with the EC to such an extent that, despite invisible earnings on our balance of payments as a whole of about £7 million, last year the UK was in overall balance of payments deficit of nearly £3 billion.
The White Paper published by Mr. Heath's Government in July 1971, using very similar language to that used by the noble Lord, Lord Ezra, this afternoon, said that that Government were confident—"confident" was the word used—that if we entered the EC the effect on our trade balance would be positive and substantial. Those are the words used in paragraph 45 of the White Paper, Cmnd. 4715, and meant, if they meant anything, a large visible trade surplus.
Those of us at that time who believed that the removal of tariffs on manufactured imports and the forcing up of labour costs at the same time by artificially raising food prices must cause a deficit

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modestly estimated then that the future visible deficit would be about £250 million or perhaps £300 million. At current prices and current sterling that would be about £1.5 billion today compared with the small surplus that previously existed up to 1970. However, the actual UK deficit in manufactured goods with the rest of the EC in 1987 was £11 billion, so I am afraid that those of us who made those estimates must apologise for having been insufficiently pessimistic. It is that £11 billion deficit, partly offset by a surplus in trade with the rest of the world, which is now dragging our whole balance of payments steadily into deficit.
The course of this debacle has been that between 1973 and 1976 we removed tariffs and raised labour costs at the same time. We might with less damage have done one or the other but not, I regret, both. EC food prices which the UK consumer has to pay are now, at the wholesale level, 100 per cent., 200 per cent. or at times 300 per cent. above world prices for grain, dairy products and meat. This raises our retail food prices by about 25 per cent. above what they would otherwise be and increases the cost of living by a not negligible amount. That forces up the level of money incomes and industrial costs throughout the whole of our economy.
The most striking and revealing effect has been that on the British car industry. United Kingdom car output—and people sometimes forget this—was rising until 1972, with a record of 1.9 million vehicles in that year, so you cannot blame everything that has happened since that time on the alleged inefficiency of the industry; that did not start in 1972. However, from that year output fell year by year to under I million by 1984, when it was about half that figure. Imports rose from 15 per cent. of our market to about 58 per cent. Those are the cold facts of the story in the car industry.
From now on our oil earnings, which at the peak a few years ago eased our balance of payments by between £10 billion and £20 billion a year, will steadily fall. We now have to meet an overall visible deficit of £10 billion which is entirely due to our visible trade with the EC. Before we embrace those rosy hopes too easily, perhaps we should ask ourselves: what is going to cover this gap as the oil earnings decline? A more open internal EC market, on all the evidence so far, is likely to widen that gap rather than close it. We are told that invisible earnings will come to our rescue, but our invisible earnings are only running at approximately £7 million a year which is not even enough to cover the EC visible deficit.
Only the other day the Secretary of State for Trade and Industry boasted about our £130 billion or £140 billion of overseas investment, and said that that improvement would help. However, the income from that is apparently only £4 billion to £5 billion a year. I should be most grateful if the Minister who is to reply to the debate could say whether that is correct.
The only escape from this dilemma is to rid ourselves of the crippling burden which the common agricultural policy is now increasingly imposing on our living standards and labour costs. In my view it
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is a common external market that we need just as much as a common internal one. Otherwise we shall be faced with an almost insurmountable payments problem in the years ahead. Therefore, in conclusion I say that the only remedy would be either to deflate and raise our unemployment levels or to lower the exchange rate. I suggest that whatever .happens the most immediate, practical moral is that we should keep in our own hands such control as we still have over the sterling exchange rate.
6.23 p.m.
Lord Broadbridge: My Lords, to the idealist the European Economic Community is a most plausible concept as, indeed, is communism. But the reality of life is that someone would always want to be in charge to exercise control and to shape events for their particular interest.
The main difference between most nation states is how the people who are in charge came to be in charge. To generalise, it ranges from democracy to the machine gun. But, once in place, the fact is that they have it in common that they vigorously support causes—in generality, again—ranging from a perception of the professed good of their people to a totally selfish perception of their own good.
In advance of its formation, my main problem in contemplating the proposed European Community was that each nation state that joined would selfishly seek for its own perceived good and, without much qualm, abandon the concept of the unified community of principles and actions. In broad terms, my concern seems to have been borne out. For instance, the area which has generated most heat in recent years is the common agricultural policy. I truly believe that the French have repeatedly torpedoed many other countries' best efforts in support of advancing its peasant farming industry. However, the CAP is merely a detail, albeit a rather large one. If it is not accepted that the essence and purpose of forming a community was to effect a frontierless block of nations to counter the USA and the Far East, then I do not see any purpose in forming it in the first place; nor is there any benefit to be gained from an organisation that costs a mint of money to run.
But perhaps, to be realistic, one has also to be cynical. Undoubtedly there were votes to be gained by joining. A seductive prospectus can easily be put together showing how the enlarged market, thus created, can benefit, for example, our farmers, manufacturing industry, the professions and many others. So the story runs that your benevolent country's government is going to gain all these advantages for you by taking this great step forward. As with many idealistic proposals, it is only when confronted with the nitty-gritty of what he has taken on board that the patient begins to choke and say, "Oh well, striving for unity is all very well but this particular idea is ridiculous and goes against the basic traditions of a thousand years of history". That seems to be, in some measure, where we have arrived at now.

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A major article entitled "A Europe Without Seams" in the Independent last Monday began:
"The European Commission Vice-President, Lord Cockfield, stands accused of plotting to destroy the British way of life. He is, according to Labour and some Conservative MPs a bureaucratic ogre who wishes to impose VAT on children's shoes. He is the dangerous visionary who plans to throw open Britain's frontiers to terrorists, rabid dogs, drug smugglers and foam-filled sofas".
But, after three decades of its existence, all he is trying to do is achieve a frontierless Community by 1992. Perhaps his sin is putting a date on it. It is indeed far easier, and lucratively employs far more people, to travel hopefully than to arrive. For example, tomorrow I could give up smoking or drinking or lose weight. But to actually put a date on it and do it is often disagreeable. It is far easier to strive towards the light at the end of the tunnel than to arrive there. Simply by striving in Community affairs, those anxious for a change are pleased while the conservative traditionalists—and here I mean conservative with a small "c"—are not upset.
I am something of a believer in the biblical precept,
"that which thou do, do quickly".
Lock Cockfield exemplified that precept. He was appointed in 1985 and in June of that year published a White Paper, already referred to by the noble Lord, Lord Ezra, listing 300 steps to what he called a "seamless" Community by the end of 1992, not simply diminishing internal barriers but removing them entirely. That action would stimulate trade and sharpen competition. A common policy of indirect taxation would be required to remove the need for tax checks at frontiers. There would need to be closer co-operation between security services, and common approaches to immigration, terrorism and drugs trafficking.
In truth, by his energy, Lord Cockfield has merely put teeth into what was surely implied by the Treaty of Rome and last year's Single European Act. The rather academic point has been raised that the Act was strongly politically binding but not perhaps legally enforceable. But, surely, having come all this way—the Community, as I have already said, is in its third decade—we should get on and do it quickly. I say "quickly" because affairs that drag on rapidly lose authority and commitment.
In Italy, France and Germany, procedure to a single market is seen as inevitable and irreversible. During its presidency of the EC Council of Ministers in 1986, this country was able to force the pace of innovation more than any other country had managed to date. Lord Cockfield is quoted in the aforementioned Independent newspaper article as saying that his critics claim that it is idealism for a Community totally without internal frontiers that is taking matters too far and forming a sticking point. He says that his opponents claim that 90 per cent. of the economic benefits of a single European market can be achieved by a concerted effort to simplify frontier controls and deal with hidden trade barriers and that to abolish frontiers completely will require a disproportionate amount of political energy and risk. He states that if you maintain the frontiers you perpetuate the unnecessary burden on business of delays and bureaucratic checks.
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I believe that most important of all is the psychological aspect. Abolition of the "frontier mentality" would persuade industry to operate on a European basis; it is an argument accepted by many UK industrialists. It has helped to generate great enthusiasm on the Continent where surveys last year showed a big majority awareness of the proposals among businesses, while in the United Kingdom similar surveys showed widespread ignorance. However, I understand that the Government have plans, mentioned in greater detail earlier, for a business information campaign this spring on the opportunities provided by the unified market.
VAT and excise duties have been put forward as a stumbling block. But the principle of exemptions for countries in particular difficulty has been built into the plan. I should like to ask the Minister whether they are a major impediment. As we have already heard, member governments are already falling well behind the timetable laid out in 1985. That is surely the reason for the debate opened by the noble Lord, Lord Ezra, in which he called on us to move more rapidly.
The end of this year will be the halfway mark from 1985 to implementation by the end of 1992. This country has joined the Community, not only joined, but confirmed that decision in a referendum. Having gone that far, I believe that we should put all our efforts into trying for a unified market to make the Community work. EC overheads are enormous. Let us try to reap the benefits.
I have already quoted from the Bible,
"that which thou do, do quickly".
Although a thoroughly multi-racial society now, let us all follow that excellent biblical precept.
6.32 p.m.
Baroness Elles: My Lords, I should like to thank the noble Lord, Lord Ezra, for putting his pertinent question to the Minister. I hope that we shall hear an equally pertinent reply. I should also like to express my warm thanks to the noble Lord, Lord Young of Graffham, who is not here but who has made a great many statements about the formation of an internal market and has begun a campaign to raise awareness of this matter among this country's business community.
Some figures for awareness in other countries have been given. A figure that was quoted in a newspaper today brings the argument closer to home. It stated that 87 per cent. of French companies were already including within their forward planning the position as it is hoped to be by the end of 1992. That is surely a graphic warning for us, if nothing else is. Although I could not follow the opening sentences of the noble Lord, Lord Broadbridge, I entirely agreed with him when he said, effectively, "Hurry up and get on with it"
Those of us who have to deal with some of the problems that arise from the fact that we do not have an internal market should draw attention to them. First, the noble Lord, Lord Ezra, was right: the Single European Act is a legally binding treaty. The one policy to which all member states agreed when they

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signed that Act was the formation of the internal market. Of course, as a lawyer I turned to the end of the book, where it says that the date of 31st December 1992 does not legally bind anyone. That was to be expected. Nevertheless, it was an objective which member states agreed to aim for.
The noble Lord, Lord Ezra, asked the Government to take all possible steps, when opinion from the Parliament and draft proposals from the Commission come to the Council, to ensure that the British Government take the lead in seeing that the proposals are adopted as quickly as possible.
I welcomed the speech made by my noble friend Lord Rees. It was enchanting to hear him recant the words he so often used from the Treasury Box in another place and to know that this noble House can effect such a rapid transformation as regards what for many of us is an essential policy for the good of the United Kingdom's economy; that is, joining the European monetary system. It is a great joy to know that we shall no longer hear such words from my noble friend.
It is worth thinking for a few minutes about VAT. It has caused a great deal of confusion and alarm. I shall put just two or three points to your Lordships' House. First, immense difficulties and hold-ups are caused by different rates of VAT when business people are trading with other countries. My noble friend Lord Bethell and myself, and I am sure other MEPs, continually receive complaints from businessmen about the difficulties they have when grasping this nettle. That is to say nothing of complaints from people who travel to the Continent with the tools of their trade or equipment. They are held up at Calais or on the Belgian frontier. They ring up and say, "For goodness sake, help me because my Toshiba computer has been confiscated by the Customs and I have had to pay a fine." That is because the VAT base and rate are different. I could quote many cases. I am sure other Members of your Lordships' House who are interested in such work could also do so.
Thirdly, this country's drink trade suffers from different rates of excise. Drinks form a large part of our exports. Companies are put at a major disadvantage in many EC countries because of the lower rates of excise on some types of alcohol due to the way alcoholic strength is calculated.
For all those reasons, it would be beneficial to have a reasonable approach. The rates need not be identical. That was never the proposal put forward by the noble Lord, Lord Cockfield. There should be a rate band with a variation of 5 per cent.
Some leading articles have appeared recently which have confirmed what my noble friend Lord Rees has said—that there could be a broad package which includes widening the VAT base. At the moment, I think we have the lowest base in the Community. It is about 40 per cent. It is suggested that we should take on board a lower rate. At the moment 15 per cent. VAT is paid on pet food, which makes up 6 per cent. of all grocery purchases. If the rate where brought down to 4 per cent. it would make an enormous difference to the small purchaser who
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goes to an ordinary store. The price of drink would also come down. As my noble friend said, one would have to take into account at the same time those people on family credit (or whatever the new form of supplementary benefit is) or old age pension so that people at that income level could be compensated, possibly by lower income tax thresholds and other income tax packages. That would make sense, because we should be able to spend what we have in our pockets.
I understand from a recent study by the Institute of Fiscal Studies that the benefit of exemption or zero rating goes to 63 per cent. of the population which has above average incomes. It would make sense to some extent to put a low rate of VAT, possibly 3 per cent. or 4 per cent. on food and widen the VAT base. That would of course bring down VAT on those elements of food on which we are already paying 15 per cent. Those proposals would have to be studied. They would need what I would call a multi-departmental study. The DHSS, the DTI and the Treasury would look together at models which would specify the various criteria to be met so as to make the idea sensible.
It always amazes me when I come back from Calais to see the thousands of British people at Dover who cross cheerfully from Dover to Calais to buy French food in French shops, on all of which of course there is VAT of at least 5·5 per cent. Regrettably, I never see people coming from France to England to buy food which does not bear VAT. One must wonder what justification there is for not putting VAT on food. If it were to happen, and if there were any change in the weekly expenditure of those people on supplementary benefit, old age pension or child benefit, it would be essential that these benefits should all be raised in line with what would be the calculated increase in the price of food caused by VAT.
The noble Lord, Lord Ezra, raised the question of recognition of diplomas and professions. I should like to put in a plea on behalf of students. We in this country are suffering very greatly from skill shortages, as are other countries. Yet we have the opportunity to send our students abroad to take part in training courses in high technology which would be immensely valuable to them. However, until the universities and polytechnics recognise that six months in a college abroad can be counted into the time that students have spent on their course it will remain impossible to say to a student, "Go and spend six months in France. Learn French. You will have an opportunity to learn this or that subject". They subtract that six-month period from the total spent at the polytechnic. It is absolutley essential that this should be considered as quickly as possible. Perhaps we could then revert back to the Middle Ages, when this nonsense did not exist. Such a change would be of great benefit to the student population in this country as well as to those who wish to come to this country to take up vacant places in polytechnics. We have vacant places in polytechnics, yet the same problem applies to them.
Finally, perhaps I may refer to points raised by the noble Lord, Lord Jay, on manufactured goods. Fifty per cent. of all our exports go to the EC. If we did not

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have the European Community as a place to which to sell our exports we should be very much worse off than we are. Regrettably one has to remember the period 1974–79, when taxes and increases in prices had an effect on our industries and manufacturing goods.
In conclusion I should very much like to support the Motion put to the Government and to recognise that fiscal, technical and other barriers to trade have been enormously costly to this country. The sooner they are removed the better.
6.42 p.m.
Lord Parry: My Lords, I thank the noble Lord, Lord Ezra, and congratulate my noble countryman, Lord Rees, on his splendid maiden speech. I would have paid a glowing tribute to the noble Baroness, Lady Elles, on her determination in Europe if she had not taken two minutes of my time.
I rise as prejudiced a witness as is the noble Baroness. At the time of Britain's entry into the Common Market I was a dedicated, even fierce, opponent of our entry both at that time and on those terms. I have seen no reason in the last few years to change my mind substantially. My reason at that time—and it was a major one—was that when one goes into a system that is incompletely organised one probably has an extended opportunity to contribute to that body, but the way out is very difficult indeed. My fellow countryman, Aneurin Bevan, made a whimsical and typical response to the argument that going into a wider market of 320 million people would necessarily solve the difficulties of the British economy when he said that one does not tame the forces in the jungle by planting more trees.
The Common Market was then, and is today, a chaos of competing national interests. We cannot gainsay the fact that we ourselves—for example, in our recent debate on the fishing industry quotas—represent our own interests when we come to argue about what position we should take within Europe. Even when I was opposing entry I was schooled in doing so by the fact that I grew up in a western extremity of these small islands. The imbalances that occur within a small nation such as Great Britain, and within the nations that make up the United Kingdom, taught me that unemployment in those circumstances becomes endemic in a system that leaves the extremities exposed to the better concentrated interests of the communities that naturally attract development. In that sense I could not see that we as a nation were going to improve our chances in the immediate five-year period simply by going into a Common Market in which our influence was already eroded by the fact that we had been late in entering.
It would be quite wrong for anyone to assume that there is a consensus in Britain at this hour to our remaining a member of the Common Market. There is not. If many British people could see a way out and could have leadership to lead them out, they would follow that leadership. Many of them are not convinced that there have been great advantages to Britain in our membership.
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There are disadvantages in our membership. I shall give one or two examples. However, before I do so, in order that I shall not be accused of going overboard on this issue—which I am inclined to do—let me read out what advantages there have been, for example, for Wales. I speak often about Wales and make no apology for doing so.
On 27th March 1987 in another place Dr. Marek, a political friend of mine, asked the then Secretary of State for Wales, another friend of mine, Mr. Nicholas Edwards, now the noble Lord, Lord Crickhowell, what financial advantages accrued to Wales from membership. The then Mr. Edwards answered—and I repeat it now—that the European Regional Development Fund quota had begun in 1975 with a £6.2 million allocation to Wales, which had risen by 1986 to a £59.5 million, and to a total of £387 million. If I were to take the European Regional Development Fund non quota, the amount had risen by that year to £19.1 million in total. The European Coal and Steel Community—in which my good friend, the noble Lord, Lord Ezra, the generator of this debate, had such a large part to play—up until 1985 had made a contribution of £405 million. The figures were not available for the two subsequent years.
I shall not go into all those sections; time does not allow. However, it is a very subtantial financial contribution to changing the nature of the British economy and one which compensates for some of the imbalances that I outlined at the beginning. But at what cost? As my noble friend Lord Jay has said today, and for 30 years, against that contribution has to be offset the very high tariff per head of the British population—the population per head of Wales, Scotland, England and Northern Ireland—for membership.
Having given those figures let me return to my own script, as it were. In the advantages that I have listed—and I do this very carefully—one great advantage to accrue to Wales has been this European investment to make up for the deficiencies in the old coal-based heavy industrial economy that was so clearly and historically running down. There has been an additional advantage. In that regard I must pay tribute to successive Secretaries of State and to at least two political parties in office. There has been a determined attempt to woo inward investment into Wales from sources outside Europe. The notable success of the Welsh economy in attracting the Japanese is a very important matter.
On the disadvantages, my noble friend Lord Broadbridge mentioned the common agricultural policy and the damage done to indigenous agriculture by our mandatory funding of less efficient foreign farmers and by the regressive and nationalistic attitudes, again of the French.
This very day the national newspaper of Wales, Papur Genedlaethol Cymru (the Western Mail), said this:
"Welsh farmers' leaders hailed last night a victory in the long-running Anglo-French sheep war".
I shall not read the whole article.
"British farmers had complained it was an artificial tax aimed solely at limiting their exports to France"—

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the national interest.
"The NFU, together with the meat trade, took this to the European Court and we are delighted we have been proved right",
said Mr. Maurice Trumper.
"It will help the export of mutton-ewe meat to the Continent. It's good news for the abattoirs and good news for the farmers",
and of course it is also good news for Wales.
"There have been obstacles put in the way of exporting our sheep meat and we produce more than we can eat, so anything that eases the problem of selling it would be welcomed".
In West Wales, as in the whole of Britain, the quotas imposed on milk farmers have forced some of the best of them from their land. Land values have halved; units and herds built up over generations have come under the hammer and once-wealthy farmers have been bankrupted. There is the retraction of the industrial base, the degradation of communities based on coal, the decline of deep-sea and middle distance fishing. None of this has been more than peripherally improved by our membership of the Common Market.
The noble Baroness, Lady Elles, said that the French do not come to Britain. That is quite wrong. A major part of the economy of tourism is based on the fact that from time to time when the pound is in the right kind of balance with other currencies a great deal of money is spent in this country by people coming from Europe.
I sit down after eight minutes with an hour and a half left to expound.
6.50 p.m.
Lord Bethell: I should like to join with other noble Lords who congratulated the noble Lord, Lord Ezra, on introducing the debate at a timely moment when the Government and Members of your Lordships' House are right to concentrate on the whole question of the internal market and particularly on the issue of fiscal approximation tabled by the Commission in August last year which has been the subject of so much misrepresentation in the media in recent weeks. I congratulate my noble friend Lord Rees also on a most charming maiden speech, in particular the way in which he described in modest and engaging terms his path along the road to Damascus on the vexed question of the exchange rate of the European monetary system, Like my noble friend Lady Elles, I welcome him to those who have taken the more European line on this point.
It is disappointing to find noble Lords opposite in essence making the same speeches as I remember hearing or reading in 1972, or indeed in some cases last year when we were debating the Single European Act, making our flesh creep with all kinds of dire prognostications of what will happen if the horrible foreigner is allowed to come within our shores and sell his goods and peddle his wicked ways. Do we really find that Britain has suffered the invasion predicted by noble Lords opposite and some of their friends in 1972? I look forward to the speech by the noble Lord, Lord Williams of Elvel, who I trust will take the far more reasonable line approved in recent months by the Leader of the Labour Party, which is totally at variance with that apparently supported by some of his noble friends.
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The noble Lord, Lord Ezra, was right to point out the heavy burden that we bear through not properly moving forward towards a true common market. We decided 15 years ago to join this organisation. Surely we must once and for all decide that we are going to make the best of it and make it work 100 per cent. in the interests of the British people. It is not enough every time some little step is taken—even a petit pas, as M. Monnet said—to come up with the same objections that were adduced 10 or 15 years ago. The decision has been made. I wish that Members of your Lordships' House would accept it and co-operate in a positive way towards making the whole thing work better rather than complaining that it does not work as well as it should.
I think we must bear in mind the cost of non-Europe; the cost of all the Customs barriers, the paperwork, the 38 documents that a truck driver has to fill in before he is allowed to proceed across a frontier, the hours, sometimes the days, that the driver and his goods are kept waiting at frontiers adds billions of pounds on to the burden borne by the British consumer. It is estimated by the group that represents consumers, the Kangaroo Group, that barriers of this nature add 8p in the pound to the cost of goods imported into this country.
However, as the noble Lord, Lord Ezra, pointed out, what really counts is the bigger market that will be created once these measures are passed and the progress that British manufacturers will be able to make in the production of steel, aircraft, computers and space programmes. In these areas it is impossible for a country of our medium size to work without a big market and without the help in research and development that we would have if we had a true co-operation with the other 11 countries, not to mention insurance, banking, mortgages and other areas where Britain is supreme and where even the noble Lord, Lord Jay, agreed there would be some advantages.
I invite my noble friend Lord Beaverbrook to clarify as much as he can certain points on the Cockfield White Paper. I know that it is early days and that the paper has been tabled for only six months. Sometimes proposals from the Commission take years in gestation both in the European Parliament and in the Council working party. It would be very helpful to some of us to have an indication at this stage of government thinking on the proposals put forward by my noble friend Lord Cockfield. It is a pity that he is not allowed to attend to explain himself, but those are the rules.
A proposal that food, children's clothes, fuel, electricity, gas and books should be subject to value added tax, whereas excise duties on alcohol, cigarettes and mineral oils should be done away with or replaced by the standard value added tax rate, cannot be presented to the British people with any great ease. There is of course the fact that the Government in their election manifesto pledged that in this Parliament value added tax would not be imposed on food, children's clothes or fuel. Does my noble friend feel able to confirm that that pledge still stands and that in this Parliament at least those items will not bear value added tax at any rate whatsoever? This would be a welcome reassurance if he feels able to give it.

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As for other items, will my noble friend let us know, if he can do so, that we are not in any way ready at this stage to accept the two bands put forward by the Commission? There may be something to be said for two bands, 4 to 9 per cent. in the lower level and 14 to 20 per cent. in the higher level, but this is surely only a suggestion. I hope that the Government will be able to indicate that they have not yet accepted it. We in the European Parliament certainly have not. Many of us believe that a band from zero to six would be more appropriate. Can he also clarify if possible the question of value added tax on travel, particularly in the light of an article in The Times of 30th January, which said:
"Eurotax may put 15 per cent. on airline fares".
My understanding is that there is no question of 15 per cent. being put on airline fares. I should be grateful for my noble friend's clarification.
In other respects I much agree with the sentiments expressed by the mover of the Motion. It will indeed help to bring about a true common market from which the people of this country will benefit tremendously.
6.59 p.m.
Lord Banks: My Lords, I think that it is generally agreed that my noble friend Lord Ezra has provided a most valuable service by raising this important matter tonight. In common with my noble friends on these Benches I look forward to the completion of the internal market by 1992 in the belief that it will bring benefits to the Community as a whole and to our own country, particularly in respect of financial services.
I often disagreed with the noble Lord, Lord Cockfield, when he was a Minister in this House. We had some friendly argument about social security, but I congratulate him most warmly on the initiative which he has taken in this matter and on the determination with which he is seeking to carry it through. Like my noble friend, I regret the delays in achieving our targets. I regret that we are behind target and I hope that the operation of the Single European Act will facilitate quicker action by the council.
However, it is widely recognised that the completion of the market, desirable as it is, will tend to accentuate the divergencies among the different member states and among the different regions within the Community. Therefore, I believe that a substantial increase in the structural funds to help correct those divergencies is essential.
The Select Committee of this House on the European Communities in its report on financing the Community, which was published last July, warned that the poorer member states may not consent to completion unless there is such a substantial increase in the structural funds. It went on to say:
"In view of the vital importance of the completion of the internal market for the Community and the benefits which will undoubtedly accrue to all member states, the Committee recommend that HM Government agree to such an increase in stuctural funds as will help to secure this objective".
It went on to say that an improvement was needed in the management of the funds and in their targeting.
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I understand that that is something which the Commission now has in hand.
The Commission has proposed that the structural funds should be doubled in size. I believe that the British Government consider that that is excessive. I am wondering whether the noble Lord who is to reply can give us any indication of the degree to which the Government would be prepared to support an increase in the structural funds. For example, would they agree to a 50 per cent. increase? Do the Government recognise the need? The disparities among the Community's regions are getting wider, not narrower. Twenty per cent. of the European Community's 320 million population have a gross domestic product per head of less than three-quarters of the Community's average. Gross domestic product per head is below average in well over half the European Community's regions.
The Commission has also proposed that grants from the European Regional Development Fund, which is one of the structural funds, one which takes 9 per cent. of the Community budget—a budget incidentally which is less than 1 per cent. of the gross domestic product of the Community—to areas of industrial decline should be reduced from 30 per cent. to 20 per cent. of the total and that grants to underdeveloped areas should be increased from 70 per cent. to 80 per cent. I understand that that principle has been approved by the European Parliament.
That would hit the United Kingdom unless total funds increase. William Dawkins, writing in the Financial Times last Thursday, pointed out that it was ironic that if the Commission's proposals are adopted the United Kingdom has a vested interest in an increase in structural funds; yet the United Kingdom Government are seeking to scale back the Commission's proposal to double those funds.
The purpose of my brief intervention in this debate is to emphasise to the House that the completion of the internal market, which most of us believe will be to the benefit of this country, makes an increase in structural funds essential in order to help remove disparities, to maintain the United Kingdom's share in the structural funds and to secure the full co-operation of the poorer countries for the completion of the internal market by 1992. I hope that the Government will recognise that.
7.6 p.m.
Earl Cowley: My Lords, I should like to join others in the House in congratulating the noble Lord, Lord Ezra, on bringing this important issue to the attention of the House and giving us an opportunity to debate it tonight. I should also like to congratulate my noble friend Lord Rees on an excellent, well-informed speech. We look forward to hearing many more in the future.
The long overdue realisation of a common EC internal market envisaged in the Treaty of Rome over 30 years ago is now in sight. At last EC citizens have reason for enthusiastic anticipation, tinged with regret and frustration that the process has taken so long. The bringing together of the world's largest trading bloc represents a momentous undertaking,

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an undertaking with a promise of attaining the economic power and efficiency to compete both within the EC and in the world's market on an equal footing with the United States and Japan.
On the basis of integration accomplished to date EC members already conduct 50 per cent. of their trade internally. To the extent that that proportion can be increased and market share gained in the rest of the world, a large proportion of the EC 16 million unemployed have the prospect of employment. As in all peaceful evolutionary but also revolutionary change, the politics of implementing economic and political integration in the culturally diverse and nationalistic mosaic of the EC slowed progress to a snail's pace prior to 1985. However, progress has quickened dramatically over the past two years under the leadership of Mr. Delors and the work of the noble Lord, Lord Cockfield.
The passage of the Single European Act in 1986 embodied the concept of majority voting, partially widening democracy from a national to a Community level, and permitting agreement where previously special interests had been able to prevail over consideration of wider Community benefit. The second major revolution has been the acceptance that the laws of any one member state, if properly constructed and constituted according to accepted principles of consumer protection, will be accepted by the Community as a whole. This avoids bickering on thousands of minor technical details and has permitted major initiatives which had previously been impossible.
Thirdly, the setting of the 1992 deadline finally to harmonise the internal market has established a definitive goal and permitted an organised approach to its attainment, with an appropriate sense of urgency which had previously been lacking. The urgency is fully justified. Until now American companies, with their large unified home market and greater capital resources, have been able to compete across the EC more advantageously than their European counterparts. By 1992 integration will in large measure help right the balance although there will still be a long way to go.
All these factors make valid the case of the noble Lord, Lord Ezra, for more rapid progress to completion of the internal market. In the event, the 1992 timetable has been jeopardised by delay in several respects. The first is the delay until last July in the member governments' ratification of the Single European Act and in the adoption of executive powers as provided for in the Act by the European Commission. As a result, the process is behind schedule.
Of the 300 directives required to implement the internal market, 80 had been adopted by the Council as at the end of 1987, and another 50 are expected to be adopted by the end of this year. This would leave about 170 directives to be published and enacted after 1988. Once enacted by the Council, they must be implemented by national governments. Included are many contentious issues outside the internal market, including the common agricultural policy and the budget. As a result, meeting the 1992 schedule, let
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alone speeding up the process, appears to be very difficult, however commendable.
Nevertheless the realisation that integration will in fact occur in the early 1990s has created considerable commercial momentum, either in anticipation of future directives or in reaction to those already adopted. In two areas of which I have some knowledge and experience—investment funds or unit trusts and insurance—European firms are developing and implementing business strategies designed to position themselves for the integrated market. Both are businesses in which Britain has considerable expertise and a competitive advantage and in which firms with the foresight, resources, mettle and initiative to take action early should benefit substantially from the larger, albeit more competitive, EC market.
Non-believers in my opinion will tend to suffer at best a loss of opportunity and at worst a loss of competitive position and relegation to diminishing local markets. In that connection, the noble Lord, Lord Ezra, mentioned the surprising lack of awareness. I found that awareness in Britain in both those industries. I wonder whether my noble friend Lord Beaverbrook could comment on anything that the Government might be able to do to increase awareness because competition will become extremely intense. However, we have the opportunity to take advantage of it if we are ready.
The currently fragmented EC investment fund market is scheduled to be harmonised in October 1989, based on the implementation of the collective investment for transferable securities or UCITS direction adopted in 1985. Simply, the directive provides that an investment fund registered under the laws of any EC jurisdiction which has previously adopted UCITS guidelines can be marketed in all EC member states subject only to local marketing laws. Britain, with the Finance Act 1985, was the first EC government to adopt UCITS legislation. The second will be Luxembourg which is scheduled to complete its legislative process this summer.
Luxembourg, with flexible and uncomplicated regulations, is likely to be the primary pan-European investment fund registration jurisdiction and is already benefiting from the influx of fund registrations directly related to harmonisation. There are approximately 150 UCITS funds either in registration or awaiting clearance in Luxembourg with the number expected to expand strongly after the Luxembourg law is adopted. These funds started to be registered early last year; for comparison, there are slightly over 1,000 unit trusts registered in this country.
The Department of Trade and Industry has said that Luxembourg funds will be eligible for sale in the UK as soon as the duchy adopts UCITS legislation and well before the 1989 date established for UCITS implementation throughout the EC. Other European governments have indicated that they will permit proper UCITS funds to be distributed in their countries as well.
I cite that history as an indication of the momentum towards unification. All that seems to be needed is the publication of a suitable directive and

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the required legislation. Then the commercial entities, or at least those with foresight, will be in a position to take advantage of that unification as rapidly as possible.
With regard to insurance, the harmonisation is on a long timetable. It has resulted in a number of acquisitions. In October, Compagnie Du Midi purchased Equity and Law and Allianz the largest German insurance company, has purchased Italy's third largest insurance company and a very large French company. Those acquisitions represent the wave of the future, not only in insurance but across the scope of commercial activity. The next 20 years will witness major mergers and acquisition activity as companies enter markets which they could not enter by more direct means.
In conclusion, I wish again to thank the noble Lord, Lord Ezra, for introducing this timely debate. The issues are large and it is incumbent on the Government to use their considerable influence to accomplish the internal market as rapidly as possible. We in Britain can only benefit.
7.15 p.m.
Lord Carter: My Lords, may I begin by joining other noble Lords in thanking the noble Lord, Lord Ezra, for putting down this Motion to enable a debate to take place on this extremely important topic. A number of noble Lords have referred to the common agricultural policy. I wish to deal very briefly with the agricultural implications of the proposals for a common internal market and then perhaps to spend a few moments on the wider lessons which might be learnt from the agricultural experience.
I must say a few words at the beginning regarding the complicated subject of the green pound and the monetary compensatory amounts. As your Lordships will know, at the heart of the common agricultural policy is the principle of common support prices. But if there were no mechanism to restrict the effects on prices of the day-to-day variations in national currencies, the upsets in the market would he considerable. Therefore, there is a complicated system of green currencies which are designed to even out those fluctuations. There are no fewer than five green pound rates from different sectors of the agricultural industry in this country.
The basis of the common agricultural policy is that intra-Community trade should take place without any barriers between farmers. But obviously, a farmer will be able to export from a country with a weak currency to a country with a stronger currency because the intervention prices in the second country will be higher. Therefore the system of the monetary compensatory amounts, which in effect is a tax paid at the border to even out fluctuations, has been set up. I am having to go extremely quickly over a very complicated subject because I have received a note from the Front Bench to speed up. The noble Lord, Lord Williams of Elvel, is shaking his head. I am sure that he understands the green pound and the MCAs much better than I do.
One of the major implications of all this is that MCAs can be applied only in a way which acts as a
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barrier to free trade. Therefore, the Community is committed to removing all MCAs in four years' time at the latest so as to comply with the Single European Act. if MCAs are abolished, this will have a substantial effect on agricultural and food prices in this country. If the pound is weak in 1992 compared with the currencies of the other member states, then agricultural products would flow into the member countries with the stronger currencies. Without the green pound adjustment to stop that, the inexorable conclusion is that we would have to join the EMS if the agricultural support system were to survive.
It is just not possible to abolish the green currencies and the MCA system unless the market rates of currencies are kept in a very closely controlled relationship, namely the EMS. I ask the Minister when he replies to comment on that and to say whether he agrees with it.
The other major area where there is concern in agriculture over the effect of the common internal market is the long-standing attempt by the Community to harmonise animal and plant health standards and procedures across the Community. The Single European Act would allow for decisions to be made by a qualified majority and with more influence in the hands of the European Parliament than is presently the case under Article 100 of the Treaty of Rome whereby everything has to be agreed unanimously.
The harmonisation of animal and plant health regulations should take place at the highest standard, I think we would all agree, in order to protect the United Kingdom's plant and animal health. Of course we have the enormous benefit of being an island in that respect. The harmonisation of plant health is, I believe, on schedule, but the timetable for animal health harmonisation has fallen behind. Will the Minister assure the House that the necessary derogations from the EC regulations will be applied for and allowed if animal and plant health in the UK is threatened by the imposition of the common internal market?
I turn to wider issues. Perhaps other industries can learn from the agricultural experience. Despite 30 years of trying to create a common internal market in agricultural goods, mentioned by the noble Lord, Lord Ezra, there has not been a common internal market and the CAP, with the whole of the paraphernalia of the green currencies and the MCAs, has been expressly designed to prevent this. The reason is simple. Every time the implementation of the CAP in a member country has affected the voters, be they farmers or consumers, that member country has made internal adjustments and cushioned the blow. What will happen here when the common internal market starts to hit certain industries, particulary if they are heavily represented in marginal constituencies? What happened in agriculture? Member countries adjusted the social security taxes for farmers and the way they collected VAT from farmers. There was the border overtime tax imposed in Italy to stop the import of foods and all the rest of the adjustments that were made to prevent the CAP from hitting the voter.
My conclusion is that just as membership of the EMS is essential if the system of agricultural support

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is to survive in Europe, so harmonisation of indirect taxes and social security taxes will be essential if the common internal market is to work. At the moment there is increasing interest in the idea of repatriation of agricultural policies to bring them back to member states as a way of solving the problems of the CAP. It would be the final irony if the problems of the CAP were finally dealt with by repatriating agricultural policies to member states while at the same time the common internal market in industrial goods and services was being born, no doubt to be repatriated in turn when it was found to be unworkable.
7.23 p.m.
The Earl of Stockton: My Lords, a number of noble Lords have raised the question of fiscal approximation and I must declare an interest. As a publisher of books, magazines and journals, I am one of that happy band who so far have enjoyed the approbation of my right honourable friend in another place, the Chancellor of the Exchequer, and who so far have escaped the imposition of VAT by Her Majesty's Customs and Excise. I hope that in replying to the debate my noble friend Lord Beaverbrook will be able to firm up the assurances he gave the book trade that there are no plans at the moment to bring books, magazines and newspapers within the net of VAT. Surely with a surplus estimated at between £5 billion and £11 billion, this is not the moment to change.
As many of your Lordships may know, I have the honour to assist the noble Baroness, Lady David, in organising the campaign to ensure that the completion of the internal market does not involve the imposition of a tax on knowledge, which would be the effect of levying VAT on the printed word.
It is perhaps solely on that one point that any words of praise I may have for the otherwise admirable maiden speech by my noble friend Lord Rees may have a hollow ring. During an earlier campaign against the possibility of VAT being imposed on published material, the noble Lord was Chief Secretary to the Treasury in another place. I take this opportunity of asking his forgiveness. I believe that my mobilisation of the energetic and prolix literary community produced such a wealth of correspondence that the Treasury word processors overheated. I hope that the noble Lord will accept my apology as a manifestation of my sincerest congratulations on his speech.
As a member of the Periodical Publishers Association, I have to say that in the case of some magazines I find the cultural argument for keeping books and magazines without the taxation ambit hard to support. The problem is that if we try to draw a line between the culturally desirable, the culturally acceptable and the culturally undesirable, we find ourselves in danger of treading into the minefield of censorship which we ventured into earlier in the week. Cultural desirability, like social acceptability and beauty, is, I suspect, in the eye of the beholder.
The same problem goes for educational content. For intellectual and professional persons such as noble Lords opposite, Ladybird books may not be
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very educational. For a mere tradesman such as myself, I have to say that I have learnt a great deal from them.
My concern is about tax approximation centred on the notion that it is a sine qua non for the completion of the internal market. Does not the United States of America have a single market within which each state is free to set its own sales tax and excise duties? Agreement on common standards and simplification or elimination of Customs paperwork would do far more to facilitate (not to mention speed up) the free movement of goods, services and people between Community members.
I remind your Lordships that while the European Commission has argued that a zero-rate of VAT disrupts competition between member states, it conveniently ignores the wide range of differing provisions inside the Community to support book, magazine and newspaper publishing by various systems of subsidy or tax relief. Subsidy implies choice. In the area of publication, choice is again dangerously close to censorship. I hope that my noble friend the Minister can see that while he might be happy to offer a subsidy for Yachting World or Fast Car, others might find putative rejection of such a similar subsidy for the Lancet or Nursing Times less felicitous, especially if such journals might at that time be taking one or more of his ministerial colleagues to task.
The answer to all those problems, as raised by the noble Lord, Lord Bethell, is within the Minister's grasp. All he and the Government have to do is amend the proposed lower band of VAT rates to include zero-rating. That way the British Government could maintain their proud tradition of refusing to tax knowledge, and still find themselves in harmony—or approximately so—with the Commission in Brussels.
Such a policy would commend itself also to the electorate, for as noble Lords on the Alliance Benches will certainly recall, the announcement of a proposal to put VAT on essentials was very badly received both by the rank and file of the two parties concerned and by the public at large. I therefore commend that course to the Minister.
The Earl of Buckinghamshire: My Lords, before making what will be a modest contribution to the debate, I have three tasks to perform. First, I should like to thank the noble Lord, Lord Ezra, for initiating this important debate, which will be well read in Europe and the United Kingdom. Secondly, I congratulate my noble friend Lord Rees on his maiden speech; it is a great relief when it is done and we bid him welcome. Thirdly, I must declare an interest. I am a director of a financial services company that is at the forefront of the expansion into Europe and intends to take full advantage of the liberalisation of the internal market.
As your Lordships may have guessed, I shall be concentrating in my speech on the third part of the 1992 package—the liberalisation of financial services within the Community. It is an initiative in which we in the United Kingdom can play a full and constructive part. I am not speaking of the

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controversial fiscal proposals which have come to public attention recently, but rather of the technical proposals which will enable our banks, stockbrokers and insurance industry to operate in a market of some 320 million people as easily as they do in the United Kingdom.
We in the United Kingdom have a considerable history of financial management. We have developed an expertise in international dealings which is the envy of many of our European counterparts. I have no doubt that we shall take full advantage of those large markets on our doorstep.
The negotiation and approval of the Single European Act gave a new impetus to the freeing of the internal markets in financial services. The Treaty of Rome has now been amended to strengthen its provision on the free movement of capital, which has been very important in that area. However, it is an important point that not all member states are as well placed as we in the UK to benefit from those moves. We must be aware that there are many structural and technical difficulties for some member states which make them more vulnerable and cautious about radical changes in those fields.
Developments such as the Second Banking Directive which was published last month and the Transferable Securities Directive, published in 1985, have been critical in providing the financial framework enabling goods, services and people to move freely throughout Europe, living, working and travelling without hindrance. However, it must be acknowledged that such a freeing-up of financial markets exposes the private investor to unknown risks. In parallel with the freeing of the market, we must ensure that adequate controls are built in to protect investors and investments alike. The Commission has recognised the importance of that and has pointed out that unrestricted capital movements, combined with the emancipation of financial services, will enable banks and savings institutions to offer their expertise and advertise their services to savers and depositors throughout the Community. However, it maintains that it is important that this takes place in a framework which allows a satisfactory level of protection—whatever that may mean—for both savers and depositors, provides for equal conditions of competition, and ensures the solvency and stability of banks and other institutions.
As we are all well aware, the UK Government have been very vigilant on this front, having spent much energy on the Financial Services Act to ensure that the self-regulatory bodies that have been established have rules for investor protection. This country is well placed to demand a high standard from the EC proposals in this field—many EC member states are far behind us and have some way to go—and our own institutions should not be placed at a competitive disadvantage compared with their European counterparts. This has particular relevance to the Commission's proposals for harmonised solvency margins and harmonised definitions of capital which are to be published shortly.
The freeing of the internal markets is not just another piece of legislation—I hesitate to say boring
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legislation. It is very important legislation that is coming out of Brussels and there are important implications to be grasped. Among many, there are three that I wish to bring to the attention of the House. First, I believe that, unlike the financial centres and institutions, there is a serious risk that UK manufacturers will be unprepared for 1992 compared with our Continental partners. We have heard this evening about the strategic work done in France particularly and in Germany in preparation for the relaxing of the internal market. If we speed up the whole initiative, do we run the danger of increasing the possible unpreparedness of our manufacturing industry? That, clearly, is a rhetorical question and maybe the answer is, "Too bad—they simply have to get on with it". It is a fact that 1992 will see the relaxation of the internal markets and if we are to survive we had better do our best to compete properly.
The second question that I should like to ask is whether we have thought through the full implications of freeing these internal markets? For instance, will the influence of the Bank of England over the regulation of our own national banks be diminished? Will we have 12 national regulatory authorities or one in Brussels? In relation to the point first raised by the noble Lord, Lord Rees, will membership of the EMS no longer be a choice for us—will it no longer be a question of joining when we think it appropriate but of having to join?
My third question is: will all member states—or particularly those which are unlikely to gain immediately from this freeing of the markets—allow their markets to be accessible to much stronger competition? If they do not, will the Community be given resources by the member states to enforce this legislation on the recalcitrant?
Finally—I have one minute left in which to speak, I believe—the freeing of these internal markets is not a simple matter. National and geographical issues have to be considered—a point which the noble Lord, Lord Banks, brought to our attention. It is not solely a matter for national governments. I suspect, for instance, that the Council of Ministers will have to take on board the full implications of the open frontier policy for immigration policies. I wonder if it has done so.
To my noble friends in the Government I say, "bonne chance" in what is a very difficult area. I hope they will adopt an appropriate speed in relaxing the controls on the internal markets and will balance our national interests with those of the Community.
7.34 p.m.
Baroness Seear: My Lords, in this debate, which has been so ably introduced by my noble friend Lord Ezra, all Members have spoken in favour of going ahead with the development of the internal market except those speakers from the Labour Benches, where the noble Lords, Lord Jay and Lord Parry, and to a much lesser extent the noble Lord, Lord Carter, declared themselves unreconstructed anti-Marketeers. They were quite straightforward and honest about it.

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I ask the noble Lord, Lord Jay, who says that the great difficulty is that our manufacturing industry will not be able to compete, why has he so little confidence in the ability of our manufacturing industry to hold its own with its European competitors? There were times when it might have been more difficult—for reasons not altogether unconnected, I think, with the policies pursued by the government which he supported—
Lord Williams of Elvel:—and you supported.
Baroness Seear: I beg pardon, my Lords—indeed not!
Lord Williams of Elvel: What about the Lib-Lab pact, my Lords?
Baroness Seear: My Lords, we did not support—I do not think that this is the moment to have an argument about the Lib-Lab Pact. I shall claim another minute for that interruption.
So far as I can see the noble Lord, Lord Jay, intends to retreat into a fortress economy in which there can be no future at all. If we were to pull out of the Common Market, where would we go? He has not told us. Perhaps the noble Lord, Lord Williams, will tell us.
Lord Jay: My Lords, what I actually said was that I thought we ought to remove the barriers to trade which were preventing us from importing foodstuffs from all the countries of the world best able to supply us.
Baroness Seear: My Lords, the noble Lord is indeed an optimist if he thinks that importing foodstuffs will deal with our entire trade problems. No doubt the noble Lord, Lord Williams, will be able to explain his position and reconcile it with the attitude now taken—in, I understand, a most welcome change of heart—by his honourable Leader.
The fact is that we made the decision to go in. On these Benches we always believed that that was the right decision. The trouble is that we have dragged our feet and been anything but wholehearted. The opportunities are plainly there. It is a market of 350 million people. If we remove the barriers—the transport barriers at the frontiers, for example—that will reduce our costs.
As a country—though not as a Government—we are putting a great deal of money into the Channel Tunnel. The whole point of the Channel Tunnel is that it takes us to these growing markets where we can develop our trade to very good effect. The opportunities are there and it is up to us to seize them by going ahead with the Common Market and having the single internal market which we have for so long supported in theory but done little to support in practice, partly because of continuing Gaullist attitudes (now beginning to change) on the government side of the House.
We must take advantage of all the opportunities that exist. We have to have the courage of our convictions and know that we are able to
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compete—and why not? Our productivity is going up although we have to recognise that it is still lower than that of most of our competitors. There will be real difficulties. Nobody pretends otherwise, but they are difficulties which we have to face and to overcome.
The question of VAT has been discussed by almost every speaker this evening. We have to negotiate the right kind of settlement. We are talking about approximations, not about the unification of those standards. Let us not lose sight of the object, which is to have genuine competition. What have to be removed are real obstacles to genuine competition. One can have genuine competition and still retain considerable variation, or at least a degree of variation, in many of those matters which cannot be completely unified.
I understand, and the noble Lord, Lord Bethell, referred to it today, that one proposal has been put forward to have VAT bands ranging from 0 to 6 per cent. Surely that is the way to approach it. We must find out what the variations are in order to make a package and get a settlement which allows for genuine competition without upsetting too greatly the practices and traditions of particular nation states.
The single nation state is no longer the important economic unit. We have moved into a global economy. One cannot run a successful economy today purely on the basis of a nation state. We must recognise that we have to collaborate outside the nation state and that narrow economic nationalism will lead us absolutely nowhere. There is a great deal of such collaboration in Asia. We have to go into this with complete confidence that we can make it work.
The noble Lord, Lord Cockfield, who is, after all, one of our number, has given a magnificent lead. I had the opportunity not long ago to listen to him speaking to the European League for Economic Cooperation. I am sure we would all agree that the noble Lord, Lord Cockfield, is not a man given to purple patches. He is not a romantic. He said:
"If you belong to a community, you have to accept that at the end of the day it is the community interest which must prevail. We are far from accepting this. We are not alone in this, but that is not the company we ought to be keeping. The leadership of the Community is passing into other hands".
Alas, we never really had it though we had the opportunity.
"There are many people in this country who will view that with indifference. I do not. I am sure you do not. Our history shows that we have both valour and vision. The time to exercise them is here and now".
So said the noble Lord, Lord Cockfield, and surely he was right.
7.42 p.m.
Lord Williams of Elvel: My Lords, the House will be most grateful to the noble Lord, Lord Ezra, for bringing forward his Motion at this particularly opportune moment. All your Lordships will agree that the internal market is an issue which between now and 1992 will pre-occupy us more and more. I am sure that noble Lords recognise that we shall return to this subject on many future occasions.

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I was also glad to welcome the maiden speech of the noble Lord, Lord Rees, a very distinguished Member of another place. If I may speak as a Welshman, I know that, although our joint origins are obscured in the mists of history, my noble friend Lord Parry will recognise that anybody in Wales who refers to Lord Rhys does so with considerable respect, though the spelling of the great Lord Rhys is rather different from that of the noble Lord, Lord Rees, from whom we have heard today.
There is one point arising from the debate on which your Lordships will all agree. We are members of the European Community and will remain so for the foreseeable future. It follows that it must be realistic to acknowledge—and I advance this, for what it is worth, as my personal view—that the integration of the United Kingdom economy with the other European economies will even by the end of this decade, let alone the middle of the next, have proceeded so far that economic withdrawal, leaving aside political relationships, would be the economic equivalent of shooting ourselves in the foot. We have to start from that principle. The community is there, warts and all. Indeed the warts are fairly plain for all to see.
British membership of the Community has brought few of the advantages widely predicted by its more extreme advocates. My noble friend Lord Jay was very pertinent on this point. The common agricultural policy is expensive, inefficient and unjust. My noble friend Lord Carter was quite right on that point. Community finances are at the point of collapse. Political leadership in the Community is reduced to quarrels about the minutiae of Community budgeting instead of dealing with the major issues of unemployment, North-South relations, technological and scientific co-operation, environmental protection or regional economic and social disparities.
However, it is not enough for me to point to the warts. We must consider whether it is possible to develop a strategic initiative that will give the required impetus to the Community, bearing in mind that any such initiative should not be judged by the reference to this or that ideology but by its likely impact in Europe on those who live, work, consume and invest their savings—in other words, the people throughout Europe who in their daily lives will either support the Community or reject it.
I am by no means certain that the strategic initiative of the internal market—for strategic initiative is what it is—will by itself satisfy that major criterion. I am under no illusion; and I want your Lordships to be under no illusion. The noble Lord, Lord Cockfield, is not engaged in a simple exercise of removing outdated restrictions or of promoting international co-operation. He is engaged in an effort to extend the so-called supply side measures of deregulation and labour market flexibility across the whole Community, the objective being to ensure that, in the words of his White Paper, Completing the Internal Market,
"the market is flexible, so that resources both of people and materials and of capital and investment, flow into areas of greatest economic activity".
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We all know what that means; at least those of your Lordships who in previous debates have commented at length on the North-South divide will know what it means. Without compensating action, wealth and economic activity will be even further concentrated into what is frequently called the golden triangle of Northern Italy, Western Germany, Eastern France and South-East England, and into what is called equally frequently by sociologists the coffin, a rectangular area whose four points are Milan, Lyons, Birmingham and Amsterdam. In other words, the programme of the noble Lord, Lord Cockfield, is Thatcherism with a European dimension.
It is time that we talked about compensating action. It is certainly true that the White Paper suggests,
"a full and imaginative use of the European Community structural funds".
The noble Lord, Lord Banks, and the noble Earl, Lord Buckinghamshire, referred to the problems to which I am going to address myself. The noble Lord, Lord Banks, in an impressive intervention, drew attention to the structural problems that will arise from the internal market if it is applied without any compensating action. But there is nothing in the timetable advertised by the noble Lord, Lord Cockfield, which activates this full and imaginative use of the structural funds. As the noble Lord, Lord Banks, pointed out, a recent proposal by the Commission to double the structural funds was blocked by Her Majesty's Government in the Council of Ministers.
At this point I have to turn to the Government and ask what is their real attitude. What is the substance of the argument between the noble Lords, Lord Young and Lord Cockfield, about which we hear so much? The internal market strategy is entirely based on the operation of free market forces. I understood that both noble Lords supported that principle. But the Opposition point out that such a strategy, and what it implies, restricts national policies for regional aid, restricts government support for disadvantaged areas, even when that is judged to be socially necessary, throws open public procurement, and there is no provision even hinted at in the White Paper either for European economic planning or for allowing the continuance of national programmes to alleviate hardship among the disadvantaged.
We do not believe that that is good enough. Let me recommend to the Government that they read, mark and inwardly digest a recent report from a group of experts headed by Dr. Padoa-Schioppa of the Bank of Italy. From its many conclusions I choose just one:
"it is essential to design and implement—at this early stage of the 1986–92 process—the complementary programme needed to set the evolution of the Community on a balanced course…greater Community involvement in stabilisation and redistribution policies is the indispensable complement of the ambitious project of completing the [European] Internal Market".
That hits the nail on the head.
Either there is a complementary programme which sets out the action necessary for the Community to intervene constructively in all the areas where the creation of the internal market will work to social and economic disadvantage where, in the past and now,

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national governments have striven to prevent hardship, exploitation and waste which result from the operation of unregulated markets, or there is not; and if not, is the answer then that we as the United Kingdom must preserve the right, in whatever manner may be appropriate and legal, to pursue those policies in the area over which the British Parliament has sovereign power? This inevitably means not rejecting the internal market but rejecting the restrictions on our ability to support our population and to implement our regional policies and the restrictions that the internal market programme implies.
None of what I am saying is essentially negative, although in all realism I have to accept that it is against the thrust of the Motion moved by the noble Lord. But there are positive elements which I wish to pursue. First, we in the Labour Party are hoping to join our fellow Socialists in preparing a manifesto on which we can campaign throughout the Community in the 1989 European elections. If we can all agree such a manifesto it will look forward to the kind of Europe that will exist in the 1990s, the opportunities of the internal market and its limitations and dangers if it is not subject to social control and geared to social objectives.
I have to remind your Lordships that the Socialist group is the largest group in the European Parliament. If we arrive at an agreed platform and we are returned on it, that will carry considerable weight. I remark in passing that the noble Lord, Lord Bethel], has returned to hear what I have to say, but unfortunately the noble Baroness, Lady Elles, had to leave and so I am unable to address myself to two Conservative Members of the European Parliament but only one. I hope the noble Lord will be satisfied with the response that I am giving him.
Secondly, we shall work for greater co-ordination and direction of macro-economic policies within the Community. That seems to be quite obvious. It makes no sense whatsoever for Europe to complain about the US balance of payments deficit or the Japanese balance of payments surplus unless we as Europe are prepared to do something as a Community to confront those problems seriously. Furthermore, I agree entirely with Mr. Edmund Dell when he wrote in a letter to the Independent published yesterday that:
"If economies are integrated in the absence of sufficient economic policy co-ordination, the result may well be a systematic deflationary bias".
These are the policies which I believe constitute the way to make the internal market a success. But they are policies for the long term. Who would believe that the Community as at present organised could run a successful programme of social and economic redistribution, or, even more, a programme of closer co-ordination of macro-economic policies? Some would say it could not even run a whelk stall.
It will certainly be a long haul, but because it is long it does not mean that it should not be attempted. In the meantime I have to tell your Lordships that we are not in sympathy with the move to speed up the programme. On the contrary, we might like to slow
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it down. But in any event, knowing how the Community works, it is a fair bet that it will slow down of its own accord.
7.56 p.m.
Lord Beaverbrook: My Lords, I should also like warmly to welcome the debate introduced today by the noble Lord, Lord Ezra, and also to congratulate my noble friend Lord Rees on an excellent maiden speech. He brings with him enormous experience of economic affairs and we hope to hear him on many future occasions.
Since we joined the European Community 15 years ago our pattern of trade has undergone a remarkable and startling transformation. At that time the 11 other countries which are now Community members took 34 per cent. of our exports. By 1982 that figure had risen to 44 per cent. Today one-half of our trade is with our Community partners. This is the point from which I should like to begin. No one can seriously doubt our economic as well as our political commitment to the future of Britain in Europe.
That is not to say that we are satisfied with the Community as we presently find it. But agriculture and future financing are not the only issues on which we must insist that realism prevails. We want the Common Market to mean precisely that: a market in which there are no barriers to trade. But that has not yet been achieved. The creation of a single market in Europe is an objective which goes back to the establishment of the Community some 30 years ago. We have made progress. Tariffs and quota restrictions have virtually been eliminated, but the free movement of goods is still impeded by technical barriers, and the growth of a free and competitive market for services is blocked by a range of national restrictions.
Unlocking this market—which we and other member states have pledged to do by the target date of 1992—is essential if we are to build the industrial capability which will enable Britain and Europe to compete successfully in the world of the 21st century. With the accession of Spain and Portugal, we now have a potential domestic market of some 320 million people, very nearly as many as the United States and Japan combined. That is why—in keeping with our realistic approach to the Community—we want to make and accelerate progress towards completion of the single market.
I have seldom heard British companies say that, so long as trade is fair, they are unable or unwilling to compete. The single market will present them with the opportunities and the challenges which they are seeking. But companies throughout the country must be given the chance to make the most of them.
I agree fully with the noble Lord, Lord Ezra, that we have to increase awareness of the changes which the single market will mean in every part of industry and commerce. I say to the noble Lord, Lord Jay, that I do not accept that British manufacturing industry will necessarily lose out.
American and Japanese success owes much to economies of scale, particularly in new technologies and access to a market of 320 million people is essential to our industry. That is the reason for the

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awareness campaign which my noble friend the Secretary of State recently announced. I can tell my noble friend Lord Cowley that this will be followed by a sustained campaign throughout the country to reach companies both large and small in every sector and encourage them to consider the implications of the single market for their businesses. The developments which are already taking place in Europe will change the economic and commercial life in this country and in other member states. We need to ensure that we all fully understand and respond to them.
But how are we to achieve the target date of 1992? It can only be by hard work. There are so many aspects to the single market, all of which we need to address. The simplification of frontier formalities is one. I welcome, from 1st January this year, the introduction of the single administrative document which replaces with one form up to 70 different customs documents used by member states. I agree with the noble Lord, Lord Ezra, that progress has been slow so far with the Commission unable to keep to its original timetable.
However, there have recently been encouraging developments. The directive on simple pressure vessels has been adopted and agreement is near on toy safety. In addition, a number of other directives are under discussion and the Commission is expected to introduce yet more during 1988. We welcome that and will press for the momentum to be increased in order for the 1992 single market goal to be achieved.
Therefore, I do not accept that the Council of Ministers is significantly behind schedule. After all, member states have to negotiate directives. The Commission's progress reports concentrate on measures in the 1985 White Paper, but many other measures reducing barriers have also been agreed by the Council of Ministers. More than 100 measures have been agreed over the past 18 months alone, including 48 during the UK presidency in the second half of 1986. I believe that we are on target to achieve the 1992 date.
The noble Lord, Lord Broadbridge, raised the issue of the Commission package. I should like to thank the noble Lord for his acknowledgement that the UK has forced the pace and achieved more rapid progress in 1986 than ever before. I should like to assure him that there has been no lessening of commitment since then. As I have indicated, we are talking about literally hundreds of measures and neither we nor other member states can accept that these constitute a package which we must take or leave in its entirety.
Public purchasing is another aspect. Narrow national preferences not only penalise the consumer but make for inefficient producers and so help no one in the long run. We believe that European public procurement should be opened up to give better opportunities for suppliers to sell into other member states and to enable public authorities to get better value for money.
I have already mentioned different product standards which fragment the single market. I welcome the Community's new approach in this area which ought to speed up progress by concentrating
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on essential health and safety requirements and seeking mutual recognition on other matters. The testing and certification procedures in different member states are often as great an obstacle to trade. Making progress towards their mutual recognition—much remains to be done—is very much a priority for the UK.
The noble Lord, Lord Parry, pointed out that trade in agricultural and animal products is an important constituent part of the single market. I am confident that progress can be made to remove trade barriers without prejudice to the high health standards which we enjoy in this country. While dealing with agricultural matters, I should like to turn to a point raised by the noble Lord, Lord Carter. MCAs are an integral part of the current system of agricultural pricing in the Community and we should like to see them abolished in a phased way. However, a number of our partners would not be able to accept that easily. The single market will not be achieved while MCAs remain.
I agree with my noble friend Lord Rees that the long overdue liberalisation of the Community market in insurance and other financial services is another priority area. I am delighted that in December the Internal Market Council was able to reach agreement on the main aspects of the non-life insurance services directive. In many cases it will enable companies to sell insurance from one member state to another without the need to establish a local presence in the host market. Developments in new technology and systems of electronic transfer increase the opportunities for doing business in this way. It is important that national restrictions should not prevent companies from taking advantage of them.
Another subject which must be tackled is the right of professional people to practise their professions throughout the Community. For example, an accountant would need to spend a working lifetime in pursuit of the right qualifications if he wished to practise in all member states. A directive on professional qualifications is now under discussion in Brussels which will provide the right of establishment to most professions requiring three years' university-level training. Of course, there will always be some legitimate differences in the requirements of different member states and this suggests the need for an adaptation test on which the United Kingdom is insisting. However, there are greater areas of overlap than there are dissimilarities among the professions in Europe. It is inconsistent with the principles of a single market that professional people should need to duplicate their qualifications and submit themselves to a period of training in subjects which they have already mastered.
Many noble Lords have referred to the Commission's tax approximation proposals. I should like to emphasise the fact that there is no commitment to approximate VAT or excise duties as part of the single market programme. We have said that we will discuss the role of approximate tax measures in the completion of the single market but, in line with the Brussels European Council last year, we do not see it as a priority area. As did other member states, we have some fundamental difficulties with the present proposals but these cannot be

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adopted except by unanimity. We have made it clear that VAT will not be extended to food, gas, electricity, or young children's clothing or footwear. Equally, we have made it clear that we shall not accept proposals which restrict our right to apply VAT zero rates.
I should like to point out to my noble friend Lord Rees that although the Commission's package of proposals on indirect taxation would increase revenue overall, increases in the price of necessities such as food would be offset by a substantial reduction in the price of alcoholic drinks and cigarettes with potentially serious problems for health policy.
The noble Lord, Lord Broadbridge, suggested the possible use of derogations; for example, in relation to UK zero rates. The Government are likely to wish to consider that suggestion during the course of negotiations. However, many if not all member states face particular problems. If all serious difficulties gave rise to derogation the amount of harmonisation that actually emerged could be rather limited.
My noble friend Lord Bethell asked about the article which appeared in The Times concerning possible VAT on air fares. We understand that the Commission is preparing a draft directive which would end the exemption currently applied to intra-Community air fares. However, this proposal has not yet been put forward for discussion and we have not yet seen any text, so it is difficult to comment on exactly what the Commission has in mind. I can confirm that a proposal of this kind would require the unanimous agreement of the member states. We understand that the Commission is not proposing a 15 per cent. rate in this case but as we have not yet seen a text there is little more I can say in that regard. My noble friend Lord Bethell also commented on the proposal of the noble Lord, Lord Cockfield, that excise duties should be replaced by VAT. This is not true. What has been proposed is the harmonisation of excess duty rates. It is not a wholesale abolition and replacement by VAT standard rates.
Turning to the point made by my noble friend Lord Stockton, I can go no further than the assurance I gave in your Lordships' House about two weeks ago on extension of VAT to books. Changes in taxation are entirely a matter for my right honourable friend's Budget judgment. I also say to my noble friend Lord Stockton that he will not be surprised that his suggestion for a lower rate VAT band which starts at zero has been duly noted.
Turning to the matter of the White Paper as proposed by my noble friend Lord Cockfield, we make no apologies for seeking the best results for this country. But what is significant is the amount of common ground which we share with the Commission, although of course there are some differences of perception. Completing the single market will mean a large number of individual measures which member states will have to negotiate and decide. We cannot accept that there is a single Commission package which we will have to take or leave. Member states have never endorsed every measure in the Commission's White Paper—nor for
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that matter would the Commission claim that the White Paper is exhaustive. There is no prior commitment to adopt Commission proposals on their own terms. I agree with the noble Baroness, Lady Seear, that my noble friend Lord Cockfield has been able to add a great deal of impetus to the single market campaign, but that does not mean that we should be uncritical of some of the proposals.
Perhaps I should mention the European monetary system. I do not intend this evening to reiterate the argument that I have put to your Lordships and also my noble friend the Secretary of State. That is a well-known text. I think that all I can say is that our view has not changed.
Turning to the important point made by the noble Lord, Lord Banks, on structural funds, this question touches upon the future financing of the Community on which we want a general resolution. While we agree that there should be a greater concentration of structural funds on the poorer member states, budget discipline must be respected. We want to do more than make free trade in Europe a reality. We want to do it by a process of liberalisation which will allow market forces to work. Business flourishes in a competitive and open economy. This means creating a climate that stimulates enterprise, and ensuring that economic activity is not subjected to unnecessary and burdensome regulation.
Creating the single market involves adopting a substantial volume of new Community legislation. It is essential to do so in a way which avoids adding unnecessarily to the burden of regulation on business. The creation of a genuine common market must mean removing the barriers to business without creating new obstacles in their place. It means not imposing requirements for which there is no justification or which add excessively to business costs, constrain competitiveness, or inhibit the ability of firms to expand and employ more people. It also means avoiding measures which make European business less competitive in world markets.
The noble Lord, Lord Williams of Elvel, and the noble Lord, Lord Banks. raised the question of structural funds and compensation. We believe the completion of the single market will in itself be to the advantage of the entire Community. The key issue is the ability of British and European firms to compete in the wider world. That is why the completion of the single market can never be accompanied by a resort to external protectionism. Not only would it be contrary to our interests as a trading nation and our obligations under GATT, but it would undermine our very objectives for the Community. We need the single European market in order to expand our horizons, and in doing so we will ensure that our horizons go well beyond the Continent of Europe.
8.15 p.m
Lord Ezra: My Lords, we have had a vigorous and informed debate on a subject which, as the noble Lord, Lord Williams, said, we shall no doubt return to many times. I think it is right that as we are nearing the half-way stage of the preparations for the single market, we should have had this debate tonight. I am

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very pleased that we had our deliberations enhanced by the impressive maiden speech of the noble Lord, Lord Rees, and also by the presence of two MEPs, the noble Baroness, Lady Elles, and the noble Lord, Lord Bethell.
In conclusion, I was very heartened by the continuing commitment of the Government to achieve this single market by the due date and by the vigorous campaign which they will be waging throughout the country to increase the awareness of industry. With that, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Northern Ireland: Afforestation
8.16 p.m.
The Duke of Abercorn The Duke of Abercorn rose to ask Her Majesty's Government whether they intend to promote further afforestation in Northern Ireland.
The noble Duke said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I should like to declare an interest in regard to this debate as follows: first, as president of the Ulster Timbergrowers Association in Northern Ireland; secondly as non-executive director and shareholder of a softwood mill near Enniskillen in County Fermanagh; and, finally, as a wood owner in County Tyrone.
I am delighted that my noble friend Lord Brookeborough is making his maiden speech on this occasion and I know that the House looks forward to hearing from him. His father will long be remembered in this House as a man of great charm, personality and courage and always deeply concerned with the interests of the people of County Fermanagh. Indeed, the word courage is synonymous with Fermanagh because in recent months and in tragic circumstances the world has had a vivid insight into the courage, dignity and resilience with which those remarkable Fermanagh people have, like other Border areas, sustained almost two decades of violence.
In asking the Government to make a statement on their policies and objectives for the encouragement of further afforestation in Northern Ireland, perhaps a brief overview of the situation prevailing in the Community and, indeed, on a global basis might be appropriate. Within the Community, agricultural products such as cereals, dairy goods and meat remain over-supplied and therefore future expectations for price increases for these commodities must be limited, while throughout the Community there is an under-production of timber. Currently, the Community is approximately 50 per cent. self-sufficient in wood. Surely, in the context of the community, this situation indicates a misallocation of land and also demonstrates that there is no danger whatever of a timber mountain appearing even on the horizon.
On a global basis the situation is again interesting. World forestry is also out of balance due to an increasing world demand and contracting stock as
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more and more natural forests throughout the world become worked out and thus more reliance is placed on established plantations. Surely the time must now be opportune for the Government to examine both in depth and with urgency whether Northern Ireland, particularly in the hill areas west of the Bann, can take advantage of the situation which I have just outlined and also alleviate to an extent some of the inevitable future hardships which will arise in agriculture due to community overproduction problems by encouraging further afforestation.
At this stage I should like to emphasise my belief and trust that the farming industry, which is indeed the very backbone of the entire community in Northern Ireland, employing as it does some 43,000 people with another 18,000 employed in ancillary industries, will remain our most important industry. Again, clearly, the preservation of the life and character of the rural community is of the utmost importance. I believe that further afforestation in Northern Ireland will prove a positive, not negative, factor in maintaining this objective in rural areas.
Forestry is a national renewable resource and where forestry has expanded in other parts of the United Kingdom it is an increasingly important contributor to rural employment. Furthermore, Ireland, whether North or South, is the most suitable location for forestry in the entire temperate northern hemisphere, yet the country remains one of the least afforested in Western Europe. Depending on location, sitka spruce takes between 35 and 50 years to grow in Northern Ireland. The average growth period for similar species is about 50 years in Scotland, 80 years in Germany and 90 years in most parts of Scandinavia.
There is an unfortunate tendency in Northern Ireland to dwell on our economic problems and thus neglect our economic opportunities. Surely, therefore, these most favourable temperate conditions should be further developed—in fact, exploited—particularly on land classified as severely disadvantaged, in the Counties Tyrone, Fermanagh and Londonderry. However, the percentage of land area under afforestation in Northern Ireland is only 5·2 per cent., compared with 12 per cent. in Scotland and a Community average of 22 per cent.
Furthermore, in order to reduce public expenditure, the department has been slowing down its forestry programme in Northern Ireland, resulting in approximately 1,000 hectares per annum currently being either planted or re-established. The annual planting rate in 1970 was 1,893 hectares, while by 1985 it had been gradually reduced to 1,285 hectares. Again, the level of forestry employees has been drastically reduced, particularly in remote rural areas.
That is in direct contrast to the rest of the United Kingdom, where new planting is currently running at 24,000 hectares per annum. Here in Great Britain there is a significantly different and more realistic attitude by government towards forestry. As a result, both employment and investment in the developing, integrated British forestry industry will continue to grow in the period to the year 2000 as forest output expands and labour input rises.
Sadly, and wrongly, in Northern Ireland there will be a substantial decline in forest output around the year 2020, due to the present low level of planting. This situation is not only unacceptable but it is also ironic, since, according to the Department of Economic Development in its November 1987 Summary of the Review of the Timber Industry in Northern Ireland, paragraph 10:
"In the long term, world timber supply is expected to be severely constrained by the year 2000, and consideration needs to be given now to action to maximise planting either by the Forest Service or by encouraging private sector participation, e.g. by way of present trends towards afforestation as an alternative land use."
The afforestation situation in the Irish Republic is indeed vibrant, with the state planting approximately 9,000 hectares in 1987 while the private sector planted 2,700 hectares. That is a dramatic increase by the private sector from a virtual standard start of 498 hectares in 1982. Clearly a different and radical attitude towards Northern Ireland forestry is therefore urgently required by government.
In spite of its dedicated and professional work over many decades, particularly with the establishment of the most successful and innovative leisure parks providing all types of recreational pursuits for the community, the Forest Service has been inadequately directed and led by the Department of Agriculture, since in the context of agriculture it has always been regarded as a poor relation. Again, according to the Department of Economic Development review, there is a serious imbalance between the timber supply position and the wood processing capacity in Northern Ireland. The report states that production from Northern Ireland forests at the beginning of the group's work stood at around 115,000 cubic metres per annum against an estimated industry processing capacity of 260,000 cubic metres per annum, including capacity then in the process of installation. Perhaps my noble friend can inform the House exactly how and why that situation has occurred.
If the Government are determined to establish an integrated Northern Ireland forestry industry similar to that in Great Britain, but obviously on a much smaller and more modest scale, clarity of objective is essential. First, I believe it is essential that one government agency alone should be responsible for financial assistance to the Northern Ireland timber processing industry, thus avoiding further encouragement of over-processing capacity. Secondly, I suggest that the headquarters of the Forest Service, comprising approximately 60 personnel, should be located west of the Bann, either in Omagh or Enniskillen, since 75 per cent. of the Forest Service woodlands is located in Western Counties. Doubtless this House will recall that the Forestry Commission was relocated from Hampshire to Edinburgh for similar reasons.
I believe that if the Forest Service is removed from Dundonald House and given a free-standing status that will provide a new impetus and recognition of its importance, particularly to the severely disadvantaged areas of the Province. Again, the location of the Forest Service headquarters in the West would considerably increase consumer spending in that area, where there is no alternative
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form of employment. I trust that the facts and figures already provided in this debate demonstrate that the commercial arguments for further afforestation in Northern Ireland are both significant and compelling.
I should now like to discuss the practical argument, particularly the acquisition of further land for afforestation. Any afforestation programme is dependent on the availability of suitable land and consistent levels of investment. Again, I am only too aware that additional forestry should in no way conflict with our outstanding environment in Northern Ireland. Therefore, I put forward for the Government's consideration that the target for Northen Ireland afforestation should be double the present overall afforestation by the year 2010. The percentage of total land under afforestation would then be approximately 10 per cent. That would involve a modest planting rate of 3,000 hectares per annum overall.
In 1970 the then Stormont Government published a White Paper suggesting a target of 30,000 hectares of private forestry by the year 2000. There are only approximately 13,000 hectares of private forestry to date, so clearly the Government should provide the required stimulus to encourage further private investment in the remote rural areas of Northern Ireland, since I believe that the main thrust and drive for further afforestation should come from the private sector, as is the case in Great Britain. Moreover, I believe that the Government can and should provide this stimulus in two significant ways.
First, there should be privatisation of certain Forest Service woodlands. That will immediately alert the attention of pension funds and individuals to the opportunity of purchasing a forestry investment in Northern Ireland, since economic logic surely dictates that forestry investment should take place in areas where the returns are highest. Northern Ireland pension funds are indeed potential investors—the biggest pension fund, the Northern Ireland Local Government Officers' Superannuation Committee, has recently purchased 5,300 acres of afforestation in Great Britain. I understand that this pension fund is looking for further investment in afforestation.
This House is aware of the remarkable success of the Government's programme of privatisation. Likewise the privatisation of certain Forestry Commission woodlands in Great Britain has taken place successfully. The Department of Energy in the Irish Republic has also adopted this policy and thus generated a real awareness of forestry as an investment in that country. During 1988 it is proposed to sell off IR £3 million of state forestry in the Irish Republic. Therefore I remain amazed that the Minister, who supports the policies of this Government and their ideology, should be so reticent and reluctant to implement a similar scheme in Northern Ireland.
Moreover, why should this situation be accepted, since surely every avenue of attracting new inward investment to Northern Ireland should be actively encouraged and explored? Having served for five years on the Industrial Development Board of Northern Ireland, I am only too aware of the

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difficulties in attracting new investment to Northern Ireland. Again, in remote rural areas of Northern Ireland it is not feasible to attract alternative inward investment. Therefore I trust that the Minister will announce this evening that it is the intention of his department to embark upon a policy of limited privatisation of certain Forest Service woodlands and that the valuation will be based on the same methodology as that adopted by the Forestry Commission. In other words, the valuation must be realistic and must reflect market conditions.
In 1985 the Department of Agriculture commissioned a respected and well-known forestry consultancy firm to make a report on the possibilities of expanding forestry in Northern Ireland through additional private capital. This report resides in Dundonald House and matures slowly, but to date has not been published. Doubtless some innovative proposals were contained in it, and I trust that my noble friend will enlighten the House this evening on some of those proposals. I need hardly remind the Minister that Ulster people are also highly innovative and will respond rapidly to an investment opportunity like forestry which is indeed a credible and a secure venture.
Clearly an investment of such a long-term nature needs more incentive from government. To prove this viewpoint, the private sector in the Irish Republic responded with alacrity to the forestry grants available under EC Directive 1820, known generally as "the western package". I have no doubt therefore that the private sector in Northern Ireland would respond in a similar positive way if a similar package of incentives were to be introduced in Northern Ireland.
I understand that the current thinking of the Community remains sympathetic; namely, that forestry should be developed on a regional basis and regions need not necessarily be divided by national boundaries. I believe the Government would receive a sympathetic hearing in Brussels if they were to apply to the Community for financial assistance to encourage further afforestation in the western counties of Northern Ireland similar to that already available to the Irish Republic under Directive 1820. I should also mention that Northern Ireland has a very similar landowning pattern to the Irish Republic. Therefore I do not foresee a great problem of procuring further land for afforestation in the upland areas of Northern Ireland.
Economists from the University of Ulster confirm that the forestry uptake in the Irish Republic is not only dependent upon but also results from grant aid. Their estimation is that in the Irish Republic 10 per cent. in grant levels in real terms would generate an increase of about 11 per cent. in private afforestation over a five-year period. The farm woodland scheme is a welcome step in the right direction. However it is certainly modest in scale and will be of only marginal beneficial effect to the upland areas of Northern Ireland.
In conclusion I trust that my noble friend, in replying to this Question, will explain why in this industry Northern Ireland is lagging behind both the rest of the United Kingdom and the Irish Republic.
I trust that the Minister will also confirm the Government's awareness of Northern Ireland's climate advantages for further afforestation. I hope that my noble friend will announce a private sector initiative to pre-empt inevitable future pressure from the Community to diversify from farming into forestry, since afforestation offers the only large-scale land use alternative to agriculture.
8.38 p.m.
Lord Blease: My Lords, I welcome the opportunity to debate this Question about the future of afforestation in Northern Ireland as tabled by the noble Duke, the Duke of Abercorn. First, there is the importance of the subject along with the fact that the issues have been raised by the noble Duke, whose family has contributed much to our Ulster heritage and to nature conservation, especially through the work of the noble Duke's father, who was widely acknowledged as an expert of international standing on the subject of forestry.
Secondly, with other noble Lords, it gives me the opportunity formally and warmly to welcome the noble Viscount, Lord Brookeborough, to the House. As all noble Lords will, I shall listen with keen interest to his maiden speech. I know that the noble Lord is strongly committed. With youth on his side, I feel sure he has much good to contribute to the business of the House and to the future peace and prosperity of Northern Ireland. We all wish him well.
I have consulted with farming friends 'and trade union colleagues directly concerned with agriculture and the forestry service. I have also had discussions with qualified and professional people in Northern Ireland who have responsibilities for developments in forestry, conservation and agriculture. I have listened with keen interest to the constructive and challenging speech of the noble Duke. I agree with much of what he said and I believe that I can support—with a little qualification—the specific objectives which he proposes for afforestation in Northern Ireland.
The noble Duke has drawn attention to many matters—the acquisition of land and the management of forests and woodlands—that require careful and thorough examination. There is an adequacy of financial provisions and suitable investment capital. There are training and employment prospects for all grades of forestry personnel. Then there are the critical matters of conservation and of general community well-being. I am sure the noble Duke will agree that those are all vital elements which require carefully balanced decisions and legislation in support of any successful and realistic policies for afforestation.
State forestry has had a long and honoured tradition in Northern Ireland. That fact has been recorded in a recently published book, which is an excellent history, by a former Department of Agriculture for Northern Ireland chief officer, Mr. Cecil Kilpatrick. In its 78 years some 150,000 acres have been planted mostly in the western counties where upland and high rainfall make farming difficult. Forestry policy has been similar to that in Great Britain; that is, mainly the planting of spruce for maximum commercial return. Such policy has

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been profitable but that profit has also been combined with amenity. The Northern Ireland forestry service has placed great emphasis on public recreation in forest areas and has pioneered this concept within the United Kingdom. In setting up, with much success, forest parks and amenity areas, the forest service has also enjoyed good relations with voluntary statutory conservation bodies. By co-operating with the Royal Society for the Protection of Birds, the Ulster Trust for Nature Conservation and the Conservation Service, it has set up nature reserves and wildlife sanctuaries.
Conservationists are thus concerned that the integrity of the state forest service should be maintained in Northern Ireland and that resources should be made available for continued maintenance for public recreation as well as for commercial profit. Conservationists would not favour privatisation of the existing forestry held under the DANI forestry service.
The reasons for the strong community support for, and dependence upon, state forestry in Northern Ireland are founded on very practical grounds together with 78 years of experience. I repeat what the noble Duke has already mentioned. The Province is comprised of relatively small owner-occupied family farms with currently some 5 per cent. of the land under trees compared with 8 per cent. for Great Britain and some 23 per cent. for other EC countries. This small-scale land ownership means that extensive block planting of coniferous forests is not so prominent in Northern Ireland compared with the visual monotony of many uplands in Great Britain. The loss of variety in wildlife habitats is less of a problem in Northern Ireland.
However, farm amalgamation and the creation of larger holdings could make more extensive plantings possible. Should this happen, I hope that the Department of Agriculture for Northern Ireland will be mindful of mistakes made in Great Britain. The small scale of much of Northern Ireland's scenery requires sensitivity in forest planting if the quality of the landscape is to be maintained. That quality of landscape is one of Northern Ireland's most precious assets and part of its great heritage. It must not be bartered for a mirage of commercial immediacy.
The noble Duke has dealt with the number of hectares of forest in Northern Ireland and the fact that holdings include few privately owned estates. Only some 13,000 hectares are in private agricultural holdings; some of these estates are partly managed and provided with the necessary services by the Department of Agriculture Northern Ireland forestry service. Therefore in Northern Ireland few of them are engaged commercially in forestry. Notwithstanding government efforts and financial grants to encourage private woodlands and afforestation, comparatively little has been undertaken by private ownership over the past 50 years. Perhaps the noble Duke's proposals might create the necessary incentives for new private forestry developments. But I repeat that such developments must not be to the detriment of existing forest services.
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Perhaps forestry in the uplands could become increasingly important for farmers facing major changes in farm economy as a result of the European common agricultural policy. Upland forestry could be encouraged for such owners as part of a diverse economy in which traditional farm practices and stock rearing are combined with forestry, conservation and outdoor recreation. That consideration is especially important in the more scenic areas which have tourist potential and where developments require careful planning. I urge the Minister to do what he can to encourage closer co-operation in this respect between the Department of the Environment and the Department of Agriculture. I am sure that the Minister has heard what I have just said. But perhaps he can tell us whether there are any plans or proposals that could help and encourage those upland farmers to plant suitable trees and adopt new farming practices.
Deciduous planting is especially in need of encouragement. Ireland's native woodlands were wiped out centuries ago and there are no Royal forests that enjoy kingly protection. Estate woodlands are now decaying and the small farmers, who succeeded the large landowners, lack incentive to invest in deciduous woods.
I strongly believe that in the interests of conservation and landscape amenity, as well as long-term investment, deciduous planting needs more effective incentives. There is little response to the present planting grant scheme as few of our small farms find it sufficiently attractive. Does Northern Ireland need different approaches to the replacement of deciduous forests and the establishment of new ones? That issue raises important questions. However, I think the noble Duke made forceful points in this connection.
I mentioned earlier that I had discussed with trade union colleagues the matters concerning afforestation in Northern Ireland. I shall quote from a letter that I have from the Northern Ireland Public Service Alliance, which is the trade union that caters for all grades of professional and manual forestry employees. It says:
"we would wish to make the point that although we are opposed to privatisation of public sector services, including the State Forest Service, that does not mean we are opposed to the expansion of private forestry within the country. Indeed we would very much welcome the establishment of more forests within Northern Ireland through the development of both State and private forestry projects, but any expansion of the private sector must not be at the expense of the service currently owned and run by DANI"—
that is, the Department of Agriculture for Northern Ireland.
The letter continues to deal with matters concerning personnel and employment in the forest service and states:
"Since 1979 the Forest Service in Northern Ireland has been the subject of numerous reviews both by DANI and by DFP"—
Department of Finance and Personnel—
"through their Manpower and Management Resource Division. These reviews have included staff inspections, efficiency reviews and policy reviews and have resulted in drastic cuts in the numbers of professional, technical, administrative and industrial staff employed in the State Forest Service…at the end of the last decade the URIC"—
the Urban and Rural Investment Campaign—

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"scheme was wound up with disastrous results in terms of employment levels for people in this country. Within the Forest Service…somewhere in the region of 1,000 jobs were lost mainly amongst the industrial grades…since then … many more jobs involving administrative and other grades have been lost …within the last few months [we] received a further report of a staff inspection of the Forest Service …this has recommended even further cuts amongst our members … this is bound to affect the overall efficiency of the service which is…a most professional one and includes a unique research and development function not provided by anyone else",
in the Province.
Those quotations underscore the concern already expressed by the noble Duke. In the absence of a forestry commission for Northern Ireland, there could be much public support for the noble Duke's proposal for the establishment of a distinct executive-type forestry division within the Department of Agriculture for Northern Ireland. Although headquarters' staff for such a division may be better sited in the west, in my opinion Cookstown would be more central. The strengthening of the existing seven district field staff operational units is much more urgent and relevant if there is to be any economic change in forestry and woodland policies.
I should also see to the re-establishment of the urban and rural investment scheme, or a similar scheme, in which the forestry division would have a prominent part to play with rural councils and others in planning, drainage, replanting and the new planting of forestry areas.
I welcome the noble Duke's initiative. It calls for action, and that is important. We do not want another sheaf of plans put on shelves only to be brought down and reread. We hope that the Minister will give a favourable response to that call for action.
8.52 p.m.
Viscount Brookeborough: My Lords, I beg your Lordships' indulgence for those who speak for the first time in this House. I thank my noble friend the Duke of Abercorn for asking this Question and thereby giving me a chance to speak on a non-controversial subject. I am sure your Lordships realise that it is difficult for an Ulsterman to be non-controversial.
I live near Enniskillen in County Fermanagh— the lakeland of Northern Ireland. For those of your Lordships who do not know the area, it is, to say the least, a little damp. In fact, it has been said that in summer Lough Erne is in Fermanagh and in winter Fermanagh is in Lough Erne. As a result, three things grow especially well there—grass, sitka spruce and an abundance of fish. It is the westernmost county of the United Kingdom, of which it is a most important and beautiful part.
While many Fermanagh people have been to John O'Groats and Land's End, I fear that many of your Lordships may never have been to Fermanagh. I can assure your Lordships that you will he most welcome, provided that you bring your Barbours and wellington boots, or at this time of the year, even better, your waders. I believe—I learnt this only recently—that the Minister will agree that even chest waders would not have saved him from the ducking
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that he received in Fermanagh recently. Perhaps he will tell us more about that story.
There are two areas in the vast subject of forestry that I should like to mention. The first is the forecast of forestry expansion in Northern Ireland, and the second is the grants available to the private sector—the proposed farm woodland scheme and the forestry grant scheme, as it stands at present. The government target for expansion of forestry—the planting of ground not previously used for timber production—is 750 hectares a year. Of that, 600 hectares would be forest service plantations and 150 hectares would be private. The forest service is achieving its target at present, but in two years' time there will be insufficient funds to continue at a rate of more than 300 hectares a year. That is half the target.
The forest service has been planting from a pool of land acquired a few years ago, and that will be largely used by the end of 1990. Will the Minister assure the House that the situation will be remedied? More funds should be made available by the Government, and, if and when some of the smaller blocks of state-owned forest are rationalised, the funds generated could go towards acquiring new land for planting. Land prices are higher in Northern Ireland due to the small size of farms and the land pattern problems. However, it would take only an extra £250,000 a year from 1990 to put the forest service back on target.
Your Lordships may have noted the increase in private forestry in 1987, which was 254 hectares as compared to the previous three-year average of 69 hectares. However, those figures should be qualified. Of that, 75 per cent. was planted by a forestry investment company and therefore does not truly reflect the private sector; that is, areas planted by owner-occupiers. Therefore I welcome the experimental farm woodland scheme as an incentive to farmers.
I thank the Minister for securing a one-hectare minimum for Northern Irish farmers compared with the three-hectare minimum in the rest of the United Kingdom. That is due to the much smaller average size of farms in the Province. The points raised in my noble friend's opening speech justify the Province being given a large share of that scheme, especially in the less favoured areas. I note that within the three-year scheme and the 36,000 hectares to be planted, 3,000 hectares only are allocated to less favoured areas within the United Kingdom. That figure should be increased with Northern Ireland in mind.
In the future, no doubt an extension or various improvements to the scheme may be thought wise. However, one condition should be included at that stage. Anyone taking up the scheme should be legally committed to the marketing of mature timber at the end of the cycle, natural disasters such as gales permitting. I say that because I can see a large number of small isolated woodlands being uneconomical and difficult to work with large machinery.
There may also be many devious people who will see the scheme as a way of satisfying their short-term needs; for example, for firewood and fencing posts. Should that occur, insufficient funds may be generated at the end of the growth cycle to enable the

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farmer to replant. We should remember that by that time the annual income from the scheme will have ceased—after 20 years for soft woods, 30 years for mixed hard and soft woods of which 50 per cent. must be hard woods, and 40 years for 100 per cent. hard woods. That is an important condition as the scheme is intended, among other things, to produce a long-term increase in timber production.
I should like to mention the forestry grant scheme as it is at present. Will the Minister give further consideration to the private sector west of the River Bann and, in particular, Fermanagh? As already stated, we have a large amount of wet land. In addition, there are unproductive scrub areas with briars, gorse and birch trees.
That means that an expensive ground preparation programme is needed. I am talking about drainage and clearance before the establishment of a plantation. In such areas, extra funds, in addition to the normal grant must be made available to encourage the private sector. In this part of the country it is not only the trees which grow fast, as my noble friend the Duke of Abercorn said; the weeds grow just as fast. The weeding problem is immense. Weeding must be carried out far more often and more thoroughly than in other parts of the United Kingdom. Additional funding should be made available for that.
Conservation is an important factor, and the better management of these derelict areas can only help wildlife and the natural habitat in general. At this stage I should like to commend the forest service for its promotion of forestry in the private sector. It has not met with a great deal of success but it puts much effort into such promotion and it runs good lectures, exhibitions and roadshows at agricultural meetings.
In conclusion, I would point out the relevant figures that justify a new appraisal and additional funding of Northern Irish forestry. Overall 22 per cent. of the EC and 10 per cent. of Great Britain is afforested while in Northern Ireland the figure is only 5 per cent. The 1988 Republic of Ireland forecast for new plantations is rising to 10,000 hectares in the public sector and from 2,500 hectares last year in the private sector to 5,000 hectares this year. This is not just a target. These are realistic forecasts that will be achieved, considering what has been done in the previous few years. The figures for Northern Ireland are these. There are 600 hectares in the public sector. That figure will drop by half in two years' time if nothing is done. There is a very small increase in the private sector.
I hope that the Minister realises that action must be taken in the next 12 months to remedy this potentially disastrous situation for the Province's timber industry. I suggest to noble Lords that while investment in industry in Northern Ireland is often considered extremely high-risk, our unique problems in the Province should have little or no effect on the value of timber production in the future.
9.2 p.m.
Lord Dunleath: My Lords, I thank the noble Duke for having introduced this interesting and important
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topic. However, before moving to it, I hasten to congratulate most warmly the noble Viscount, Lord Brookeborough, on an outstanding maiden speech. I am sure that I speak for the entire House in so saying. The delivery of his speech did not surprise me. I was present at the memorial service following the tragic and untimely death of his father where he had to read the lesson amid all the emotion that was involved and in front of television cameras transmitting live, and he was rock steady. I should have been scared out of my wits; I should have lost my breath control. But no; he is made of sterner stuff than I am.
Nor was I surprised at the content of his speech or the careful preparation that had obviously been given to it. When his family sets its hand to anything, it does so thoroughly. I know that well because our families have had close links over many generations. Indeed, his grandfather was one of my godparents. He was my favourite godparent because every time we met he would tip me half a crown. That was in contrast to some of my other godparents who either took a cost effective view and gave me only a miserly shilling, or took a negative cash flow view and gave me nothing. I therefore had a high regard for the noble Viscount's grandfather.
His family has an outstanding record of public service, both civil and military. Even before the noble Viscount came to your Lordships' House this evening he had shown already that he has every intention of continuing that distinguished record of public service. We greatly welcome him here.
I welcome the Question raised by the noble Duke this evening. I salute him for the convincing case that he made. I beg leave to touch on one or two of the realities of the situation. They do not conflict with what the noble Duke said, but perhaps complement his remarks. After three centuries of decline, re-afforestation was resumed in a deliberate manner between the wars when the Ministry of Agriculture acquired areas, mostly of less favoured tracts of land at high altitudes. This was disadvantageous land where, for the most part, the Ministry planted conifers. This was commendable in that it gradually began to increase our capacity for timber production. It also put to use land that would otherwise have gone to waste.
After the war the Government began to offer incentives to private landowners to plant. This was also to be welcomed. However, in both the public and private sector, the policy advocated by the Government was to plant conifers and softwoods in order to provide as quick a crop as possible and to make the uptake of these offers to private owners as attractive as possible. Unfortunately, this resulted in large blankets of conifers—sitka spruce, Norway spruce, perhaps Japanese larch—often over some of our most scenic areas, which was detrimental to the appearance of the countryside and to the environment. Conifers are very suppressive both of flora and fauna. They also tend to encourage the presence of predators at the expense, for instance of song birds.
More recently, however, there has been a greater appreciation of the broadleaved varieties. We welcome the new incentives which are to be offered,

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I understand, with effect from next autumn, under the farm woodland scheme. If this is successful, it will enhance the environment and indeed the habitats for our natural wildlife. But even though these incentives are more generous and attractive than ever before, I cannot help asking how effective they will be. A price of £190 per hectare is offered for a broadleaved plantation over a period of 40 years. This is in addition to the standard forestry planting grant which is over £800—an instalment on planting and a further instalment on establishment. Once that has been paid out, that is it. Can one expect a farmer to make a living out of that when by comparison, if he is any good at all, he should be able to make more than £500 per hectare from milk and £250 to £300 from cereals on good arable land? Will it be attractive' That is the question I respectfully ask.
I refer next to the psychological barrier with regard to broadleaved planting. How many people will be attracted to the idea of establishing a crop that will not mature in their life-time and almost certainly not in the lifetime of their immediate successor? They will wonder about the market for timber in 100 years' time. On present indications it will probably be very good, possibly even better than it is now. But it is an uncertainty. What other crop can one think of where such a long-term commitment is involved? What other investment can one think of on the farm? Even if one invests in a costly, extensive range of buildings for, say, dairying, and then decides to go out of milk after 15 or 20 years, there is a reasonable chance that the buildings can be converted for some other purpose, even if at some expense. If one has established a stand of oak or beech, who will cut them down after 20 years if the outlook for timber is not so bright? The problem is that one is locked in. Planting hardwoods for amenity is certainly a most attractive proposition. As a crop, I do not disagree with it; I merely point out the reality of how many people would be attracted by the scheme. This is the case with our traditional varieties of hardwoods such as beech and oak, which are quoted in the farm woodlands scheme.
Gradually and steadily, I come to my point: have we been too conservatve in our view of the species that we plant? The noble Viscount pointed out how very much more quickly certain varieties grow in Northern Ireland than elsewhere. I wonder whether we have taken advantage of this to a sufficient extent.
In principle I am entirely in favour of planting indigenous trees. Let us consider agriculture. If we stuck to native livestock and were denied the use of Friesians, Charolais or Simmental, our dairy and cattle industry would not be in a very good way today. If we stuck to indigenous varieties of plants and were denied the rye grasses and cereals that come from elsewhere, our arable enterprises would not be in a very good way.
I venture to ask this: should we not be considering for commercial production varieties of trees that we know grow well in Northern Ireland and that beat the native species? Have the Minister and his department considered varieties such as Nothofagus Dombeyi, a beech indigenous to Chile and Argentina? In the encyclopaedia of plants and trees I read recently it said that Nothofagus grows to 30 feet in height. I
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know of one at home which is 75 to 80 feet in height with a girth of 9 feet 6 inches yet it is younger than I am. It was planted in about 1935 or 1936. What indigenous beech or oak could put on growth at that rate? This would produce a high density hardwood when mature, which it almost is now.
Similarly, I wonder whether his people in the forestry division of the Department of Agriculture have considered Eucalyptus globulus. Again, the encyclopaedia states its height as being 50 feet with a spread of 20 feet. The height of ours is 90 feet with a spread of 50 feet. I have planted examples of this which have made 40 feet in height in only 12 years. Surely this rate of growth that can be achieved in Northern Ireland is something of which we should take advantage. Whoever compiled the encyclopaedia was obviously writing in good faith and taking evidence from what he had seen in the South of England; but what is not realised, as the noble Duke and the noble Viscount said, is that we can grow trees much faster in Northern Ireland than they can in the South of England, even though we are further north.
I should like to suggest that some of these more exotic varieties should be considered. I speak with hesitation because the noble Duke knows much more about this than I do. He has a garden centre. I know, because I have been there, that amid the Grecian urns and plastic gnomes he has a wide selection of most interesting plants, many of which I am sure could be developed and grown on a commercial basis, although maybe he sells most of them for amenity purposes at the moment.
I should like to ask the noble Lord on the Front Bench whether he will tell us what his department's view is of selecting species for commercial production in order to make the farm woodlands scheme more attractive to owners of the arable land which I know it is the Government's desire to take out of agricultural production.
9.16 p.m.
Lord Prys-Davies: My Lords, I should like to begin by joining with the noble Lord, Lord Dunleath, in congratulating the noble Viscount, Lord Brookeborough, on his well reasoned and well researched maiden speech. By any standards it was an excellent speech. His late father was a regular contributor to the debates on Northern Ireland affairs in your Lordships' House. He brought to our debates a certain unionist perspective which must always be taken into account by the legislator. We knew that here was a man whose heart and soul was in Northern Ireland. We hope that the noble Viscount, Lord Brookeborough, will maintain his family's long tradition of service to the Province and that henceforth his rational voice will be often and regularly heard in your Lordships' House.
We are grateful to the noble Duke, the Duke of Abercorn, for addressing the Question before us to Her Majesty's Government and for giving the House the benefit of his wealth of knowledge of the subject. His speech too was well researched. It could achieve something worth while for many of the rural communities of Northern Ireland. That is why, with

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the agreement of my noble friend Lord John-Mackie, who is the Labour Party's spokesman in this House on agricultural matters, I wish to support the general argument advanced by the noble Duke for strengthening the role of afforestation in Northern Ireland.
The starting point must be the forestry target. The 1970 White Paper on Forestry in Northern Ireland laid down the target of 300,000 acres of state and privately owned forests by the end of the century. Can the Minister tell the House whether this target has been increased or lowered since 1970, or are we still talking about 300,000 acres by the end of the century? Can he also tell the House how that compares with the target set for Wales, Scotland and England in terms of the percentage of their land under afforestation? The noble Duke has indicated that there is a significant difference between Northern Ireland and Scotland and that in general Northern Ireland is dragging behind the rest of the UK. Perhaps the Minister can enlighten us about that.
The noble Duke has made a powerful case for a very substantial increase in the land area under afforestation. His case is based on three main arguments. The first is that the changes within agriculture require the transfer of land from dairying and livestock to afforestation. Secondly, the climate in Northern Ireland is excellent for growing forests, making it one of the most suitable places in Europe for that purpose. Thirdly, the Province is not self-sufficient in the domestic supply of timber, whereas, if I understand it correctly, it could be a timber exporter. Each argument is strong but if the three arguments are valid then taken together they seem to me to be almost irresistible.
I turn for a moment to the annual report of the Forest Service for 1986–1987. I was surprised to read in its second opening passage on page 1 that the rate of acquisition of land for afforestation
"over the last 5 years will not enable White Paper targets to be achieved".
If the targets cannot be achieved, that at least calls for an explanation and a remedy. Therefore we should like to know what the problems are, why the programme is slipping and what steps can be taken to remedy the position. I hope that the noble Lord, Lord Lyell, can enlighten us.
I must confess that that slippage raises another worry. If the Forest Service cannot maintain the build-up towards the existing target is it likely, as it is at present constituted and with the instruments at present available to it, to achieve the much more ambitious target which the noble Duke has in mind? As I understand it the target that he has in mind is double the existing target. One is left wondering whether it can be achieved without a radical initiative from the top of the department.
Another major theme running through the speech of the noble Duke is that the department should give more generous financial support to the private investor in forestry. I believe that that theme is also supported by the noble Viscount. Reference has been made to the grants—the Western Package as it is called—which are available in the disadvantaged
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parts of the Republic. I am told that the grants paid to private foresters in the Republic are much more favourable than those paid in Northern Ireland.
I am sure that there is much more to this point than the noble Duke wishing to keep up with the Joneses. But a number of questions arise and I should like to pick out one or two of them. First, are there any EC directives or regulations which govern the value of the financial grants which a member state can make available to private forestry and indeed also to public forestry? After listening to the remarks of the noble Duke it seems to me that there is none.
My second question has also been touched upon. It relates to the price of land to be acquired for afforestation. Can the noble Lord, Lord Lyell, tell the House how prices per acre for forestry land in Northern Ireland compare with prices in the Republic and in the rest of the UK? We appreciate that prices vary within each country. However, we want to know whether there is a substantial differential between similar sites in different countries of the United Kingdom.
I was also going to ask whether the Secretary of State has the power to pay a different level of grant to the private investor in Northern Ireland to that being paid in the rest of the United Kingdom or the power to have a substantially different policy from that in force in the rest of the United Kingdom. However, the noble Viscount has answered that question. Perhaps the Minister will be able to confirm that the Secretary of State has that power.
The noble Duke also raised the topic of the role of privatisation, which he favours and which is currently popular with the Government. However, it is a controversial theme. Some of us, including my noble friend Lord Blease and members of the trade union movement, are dubious about it. Perhaps, though, it will be of some consolation to the noble Duke that my noble friend Lord John-Mackie considers that privatisation could have a limited role to play on some sites, provided that the sums raised by privatisation could be retained by the Forest Service and used by it to improve and strengthen its programme of acquisition and planting. That condition is not likely to be attractive to the present Government. Therefore, the moneys available from the pension funds would not be paid to the Forest Service but would be paid over to a consolidated fund.
It emerges from the 1986–87 annual report that the total number of people employed by the Forest Service of the Department of Agriculture—that is, the public sector—is no more than 520, though that figure does not include those who are employed in the processing mills. Moreover, the number has been going down since 1983 and my noble friend Lord Blease anticipates that it will go down even further. I was surprised that the number was so low. Can the Minister tell the House the cost of job creation through forestry? How does that compare with the cost of job creation through tourism and light industry? I am afraid that the comparative cost must be very high indeed.
Given the difficulties which the IDB and LEDU are experiencing in attracting inward investment into

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rural communities—the noble Duke spoke on that matter with experience because he has been a member of the IDB—and given the surplus capacity of the processing mills in the timber industry—that matter was again referred to by the noble Duke—I am bound to conclude that the high cost of job creation through forestry is not a conclusive argument against further substantial afforestation.
Our concern on these Benches is for the well-being of the rural community. We seek a viable rural economy; we fear, as we approach the end of the century, the slow disintegration of many rural communities and particularly those west of the Bann. It would be helpful if the Minister could tell the House what priority the Government have given to preventing rural stagnation and depopulation 15 and 20 years hence. Can he tell us something about the Government's thoughts concerning the likely movement of labour from the countryside between now and the beginning of the next century? To what extent can forestry, tourism and light industry offer additional employment?
We think that there is a lot of good sense in the suggestion made by the noble Duke that the headquarters of the forest service should be relocated west of the Bann. Given that there is a need to move away from the traditional pattern of agriculture and that the climate in Northern Ireland is ideal for afforestation, is it not the case, as the noble Duke has argued, that afforestation offers an opportunity which the Government must grasp now if it is to bear fruit in the next century?
9.30 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, your Lordships' House is deeply indebted to my noble friend the Duke of Abercorn for this opportunity to examine what is happening in the forestry industry in Northern Ireland.
At the outset I shall take just a moment of your Lordships' time to follow those speakers who have offered congratulations to my noble friend Lord Brookeborough on the occasion of his maiden speech tonight. We have listened to an excellent maiden speech of very high quality. I should like to add my personal congratulations and to say how pleased we all are to have a recruit of such quality with us.
My noble friend the Duke of Abercorn and also the noble Lord, Lord Dunleath, referred to my noble friend's father who, as we all know, was never afraid to give his views on any subject, not just those relating to Northern Ireland. My noble friend's voice is always welcome, and I appreciate the opinions that he has expressed this evening. He will always be welcome whenever he can join us. Noble Lords know what a tremendous job he does in Fermanagh. Your Lordships will agree with me on the importance in this House of having a voice from Northern Ireland on all subjects and especially one from County Fermanagh, whose tie I am proudly wearing this evening.
As for my noble friend's views about my visits to that county, I hope that I can visit it much more often—and the wetter I get the happier I shall be. I
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note that thigh waders must be part of my equipment for visits to County Fermanagh, even in what is known as summer, although the summers of 1985 and 1986 did not merit that name.
Before turning to the specific points which noble Lords have raised in the debate on forestry this evening, perhaps I may take a moment to explain forest policy in the Province. The Government are committed to a forestry programme in the Province on the lines laid down in the 1970 White Paper on forestry to which several noble Lords have referred. I should like to comment on the main thrust of that paper since, though subject to periodic review and to substantially reduced objectives, the policy direction that it contains remains basically unchanged. The main objectives stated in that White Paper were to develop a total of 120,000 hectares of state and private forestry by the end of the century, and to encourage afforestation and tree planting by public and of course private agencies and individuals. Since there were 52,000 hectares—or, as we say in Scotland, thereby—in forestry in 1970 (there are now 71,000 hectares), the first of these targets implied new planting of 2,300 hectares per year of both public and private planting over the 30-year period. These targets were rapidly shown to be unattainable because of the main bugbear that affects forestry in Northern Ireland. I refer to the lack of land being offered to the industry and to the fact that in recent years we have aimed at buying what is available, which generally turns out to be smaller areas of better and therefore more expensive land.
These targets were reviewed in 1982 and revised downwards to 750 hectares per annum. This was split into 600 hectares of state planting and 150 hectares per annum of private planting. That decision went to amplify the lack of suitable land coming on to the market at realistic forestry prices, a point which I stressed earlier. There was also the relative failure of the private sector to develop, although there were a number of shining exceptions.
There is certainly a distinct difference between the rate at which trees are being privately planted in Northern Ireland and in the rest of the United Kingdom. When one compares the areas of grant aided private planting in Northern Ireland and in Great Britain in relation to the amount of available land, one sees that planting in Northern Ireland is pro rata only one-twelfth of that in Great Britain. In recent years only 88 hectares on average have been planted against 15,300 hectares in Great Britain. Eighty-eight hectares may not appear to be exactly one-twelfth but I am told that if one takes the land area of Great Britain and compares it with Northern Ireland these figures match up.
I should like to emphasise to my noble friend the Duke of Abercorn that when one considers that exactly the same fiscal arrangements apply and that we have similar planting grants with rates adjusted to favour the small planter, this contrast is particularly stark. I should stress that my department is making every effort to remove any outdated constraints on the planting programme. I am pleased to confirm that it no longer demands that the planting of land inside the original less favoured area must be cleared by the local county agricultural office. In Europe it is called

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the specially disadvantaged area. The noble Lord, Lord John-Mackie, is nodding. He has considerably more experience of these matters, as well as of Eurospeak, than I do. Any planting inside the original less favoured area used to have to be cleared by the local county agricultural office. That is no longer the case. We hope that that will be one less constraint on those who wish to plant. It is one less hurdle to cross.
The department itself through its forest service will be concentrating within the tight budget on having to plant better land in future. The future programme of forest service planting is especially important. This point was stressed by my noble friend in his opening speech. The pattern of land acquisition for forestry over the years and certainly over the past 18 years means that the tremendous bulge in new planting, both private and public, in the 1960s and 1970s will be harvested between 1990 and 2020. During that period the present capacity of the modern sawmilling industry in Northern Ireland could be fully supplied from our own production. Thereafter supplies would fall sharply because of the decline in new planting in the 1980s.
As the forest service is the main supplier of the Northern Ireland timber industry's requirements, and as, despite a great deal of effort, the private sector is not expanding as fast as all of of us would wish, we have to look in large measure to the state forest service to ensure the continuity of timber supplies in the years ahead, particularly to the indigenous sawmilling industry. We have made substantial efforts to see that the private sector starts on planting. Quite apart from the system of planting grants and the fiscal arrangements, the forest service regularly runs open days to bring forestry interests to the public notice. I was pleased that the noble Lord, Lord Blease, raised that point as did at least one other noble Lord.
Farmers and members of the public receive advice on forestry, and the forestry grant schemes are publicised at any agricultural events round the Province. I stress to your Lordships that these efforts have borne fruit in an increase in applications for planting schemes. I am also pleased that within the last couple of years private forestry interests in the Province have developed afforestation in investment operations with some success. But I have to add that the continuing relatively high price of land, together with the small pattern of land ownership in Northern Ireland, tends to discourage the private investor. The use of private investment companies would be the quickest way in which to establish large areas of private forest.
Your Lordships will agree that these companies would be unlikely to be attracted by the small farm size, since contiguous parcels of land come on to the market so rarely. But our efforts to encourage the private sector will continue and, given some reduction in agricultural land prices, I am sure that we shall see increases in private planting in the Province.
My noble friend the Duke of Abercorn—indeed, all your Lordships—touched on the proposed farm
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woodland scheme. We welcome all the interest that has been shown in the scheme and in our proposals within the Province. Changes were made to the scheme following consultation, and these have resulted in Northern Ireland being allocated a minimum planting area of one hectare compared to three hectares in the rest of the United Kingdom. It was kind of my noble friend Lord Brookeborough to pick that up in his maiden speech, which showed all the hard work and research that he had done. I congratulate him on that.
The small derogation we had in Northern Ireland recognises the pattern of land ownership in the Province and we hope that it will go a long way to increase the uptake in the scheme, although one hectare compared to three hectares for the same number of applications will result in a relatively small area being planted. But every extra hectare we can get will be welcome. I am confident that the farm woodlands scheme will be a success in the Province.
My noble friend the Duke of Abercorn in his opening remarks stressed the need to grow more timber. That pattern ran through all the remarks on the Question this evening. I have made it clear that we have not been able to keep up with the growth in timber production in Great Britain, especially in the private sector. The various planting schemes in Northern Ireland differ from those in the rest of the United Kingdom. They give additional flexibility to aid small plantings and we are able to give planting grants on coppice biomass, which is a very interesting new experiment being carried out within my own department. Forestry investment companies exist in Northern Ireland. They have had encouragement, advice and all the help they require from the forest service. But the fiscal arrangements are just the same and just as generous in Northern Ireland as they are in the rest of the United Kingdom.
I want to stress that simply selling public sector forestry to the private, sector at any price—this will interest the curiosity of the noble Lord, Lord Blease, though whether it will answer his questions I am not too sure—does not deal with the main thrust of the questions this evening: that is, the need to increase timber production. The forestry industry in Northern Ireland should be given credit where it is due. It is held in healthy respect by environmental interests. I was pleased that your Lordships mentioned the RSPB and all the other recreational activities that are so popular in the forests in Northern Ireland.
The main problem to which I must return is the slow development of private sector and to some extent public sector afforestation in Northern Ireland. The problem lies not in the efficiency or effectiveness of the forestry service or private sector companies but in the pattern of land ownership which is reflected in the price of land in Northern Ireland.
The noble Lord, Lord Prys-Davies, also asked about the European Community directive. My noble friend the Duke of Abercorn spoke about European Community Regulation 1820 dated 24th June 1980. The means by which the 1820 regulation was implemented was the Western Package in the Republic of Ireland. I believe that the treatment of

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this directive is a matter for the United Kingdom Government and I do not want to enter into the full treatment of that package in the Republic this evening.
In his remarks my noble friend the Duke of Abercorn raised the problem of rationalisation in the Northern Ireland forest service. The approach which is being adopted by the service is identical to that of the Forestry Commission. It is presently being implemented in two phases which are running concurrently. During 1988 the service will offer for sale unplanted land amounting to 220 hectares and 92 hectares of plantations in varying stages of silviculture. These sales may help further to assess the private sector investment potential of forestry in the Province. This is a first hesitant yet significant step. We shall have to see how the sales go before making further decisions. Noble Lords have suggested to me that similar attempted sales, and sales which have been completed in the Republic of Ireland last year, do not seem to have been terribly successful. Although the hectarage has increased, much of it has been on the private side. There are other factors which apply in the Republic but do not apply in Northern Ireland as far as we are concerned.
The noble Lord raised a query about forestry activity. The future development of forestry in Northern Ireland, both public and private, will largely be conditioned by movements in land prices, linked with policies in agriculture in both the Community and the United Kingdom. I am particularly hopeful that the Government's ALU RE proposals will increase private sector awareness of the opportunities which are presented by forestry, even in Northern Ireland. There are 53 nature reserves on state forestry land in Northern Ireland. That shows that the forest service, as well as receiving tremendous help for the private forestry sector, is taking the lead in playing a major role in conservation. Your Lordships have heard that the growth of activity holidays is being seized by the service as an opportunity to further assist and enrich the recreational value of forestry by the promotion of activities such as bird watching and photography.
The average farm size in Northern Ireland, which will have a great bearing on the success or otherwise of the farm woodland scheme, is only 24 hectares. The large hill farms, which go some way to promote the major forestry development in Scotland are not in the main present in Northern Ireland, although there may he one or two exceptions. Last night my noble friend stressed to me one or two interesting details in County Fermanagh. It is the pattern of land ownership and above all the relatively small size of the farms which will tend to be a limiting factor on how far and how fast we can go forward.
I shall try to cover some of the points made by noble Lords. However, if I do not cover them all, my colleagues will undertake to reply to the points which have been made by my noble friend the Duke of Abercorn and by others in writing. My noble friend was very much in favour of increased planting in the less favoured areas but he likened that to reducing agricultural surpluses. While 1 am sure that we should not ignore the less favoured areas for forestry, he will appreciate that the better the land we take out
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of agriculture the more we shall reduce the surpluses. That goes on to show that the environmental arguments will tend to favour planting trees in the lowlands, and that is reflected in the rates which the noble Lord, Lord Dunleath, mentioned. The emphasis under the new farm woodland scheme is on planting the better lowland areas, with the higher rates which are available for planting in those areas.
My noble friend also referred to the gap between supply and demand for timber as far as the timber industry was concerned. I believe that he went a good way to answering his own question. However, we have allowed timber processing capacity to run ahead of timber supply, though I think that that will be put right by increasing supplies in the 1990s and in the later part of this century. After the bulge in the timber supplies planted in the 1960s and 1970s is cut, there will be problems, but in the 1990s and in the next 12 to 15 years I believe that the gap between supply and demand will narrow.
My noble friend also asked about performance, comparing the Republic of Ireland with Northern Ireland. I believe that one reason for the slower progress may be that competition for land for agriculture seems stronger in Northern Ireland. Also there are the more widely developed co-operative agricultural arrangements in the Republic.
The noble Lord, Lord Blease, made a very helpful speech. Above all we welcome his support for the development which respected the existing Forest Service enterprises. Certainly I undertake to ensure that co-operation between the Department of the Environment and my own department continues at its present high level because I spend a great deal of my time in the forests and continually it is stressed to me the high priority that we give to conservation, matters like birds and above all the fauna, not just the flora, that exist in forestry areas. We place great emphasis on the farm woodland scheme, and certainly forestry grants will help in plantation, and not just in deciduous plantation.
The noble Lord also asked about co-operation. There are forest district conservation committees which meet to consider aspects of forest management and with particular reference to conservation. The qualified personnel draw up landscape plans which cover large areas of forest and these are certainly looked after in environmentally sensitive areas.
My noble friend Lord Brookeborough had one particular query regarding the farm woodland scheme. We certainly will be receiving our proper share of the United Kingdom's scheme. However, it will be up to all the landowners in the Province to justify our efforts in taking up the funds which are available. I believe that they will be taken up and we shall do everything we can to promote their uptake.
The noble Lord, Lord Dunleath, stressed the attractiveness of the farm woodland scheme. Certainly we would have expected him to have done his sums, but I think he will agree that the milk producer is able to gain £500 per hectare if he has any problems with his quota, or he might even be under quota. Therefore, he might be prepared to put a small portion of his land into trees which will be particularly fast growing on some of the better land,

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while he may be able to farm fewer and more productive cows. Indeed, far more than notes on forestry it is notes on quotas which still flow into my office like snow in the new year.
The noble Lord raised a number of interesting points concerning exotic species. I am afraid I did not take on board all the exotic names but I shall certainly read them in Hansard with interest, I am able to confirm that the Forest Service has planted test areas with the species mentioned but I have to say that it has been with varying degrees of success. However, I shall certainly ask all the officials of the forest service to make suitable arrangements to meet the noble Lord—I shall accompany them if I can—to discuss any ideas he has for planting some of the more exotic species. If the noble Lord is achieving the growth rates that he mentioned I should like to know a little more. That is an open invitation which I am sure the noble Lord will not hesitate to take up.
I was asked for an approximate value for land which could be called good quality planting land. I am given to understand that it varies between £1,000 and £1,200 per hectare. I do not have the relevant figures for Great Britain but I understand that those I have given are a little higher than they would be for Great Britain.
Both my noble friend Lord Brookeborough and the noble Lord, Lord Prys-Davies, raised a point of detail about the different levels of private planting grants payable by the Forestry Commission in Great Britain and Northern Ireland. The amounts are similar but they are marginally adjusted to cater for those in Northern Ireland who wish to plant fairly small areas. I alluded to this derogation as between one and three hectares for the farm woodlands scheme. For areas up to 50 hectares, forestry grants give the Northern Ireland planter of trees approximately a 10 per cent. to 20 per cent. advantage over his counterpart in Great Britain. For areas over 50 hectares the private planter in Northern Ireland would be at a disadvantage by some 5 per cent. and it could go as high as 10 per cent. We have had only three individual applications involving
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more than 50 hectares. Once again, I think this goes back to the average farm size I mentioned earlier.
My noble friend the Duke of Abercorn and the noble Lord, Lord Blease, referred to the possibility of moving the forest service headquarters out of Dundonald House to west of the Bann. I can stress to the House that of the forest service staff, which numbers in the region of 500 persons, 88 per cent. are already placed outside Belfast, near the areas where they work. Reference was made to the Forestry Commission and its headquarters in Edinburgh but those noble Lords who may refer to a map, let along drive in Scotland as 1 do, will agree that the headquarters staff in Edinburgh have much further to travel to visit their far-flung empire than do the Belfast staff. However, any efficiencies that we can make by moving staff nearer to their place of work will be certainly taken into account.
I have taken up enough of your Lordships' time and I am sorry if I have been unable to answer all the questions put to me. There are one, or possibly two, points that I may have missed and I certainly undertake to write to your Lordships on anything I have not dealt with. As far as possible I have made a quietly positive reply to the Question asked by my noble friend this evening on the forest service in Northern Ireland. I wish to stress to your Lordships that the Government are as committed to forestry in Northern Ireland as they are to forestry in the rest of the United Kingdom. There can be no special afforestation policy for the Province so far as the fiscal regime is concerned. Whatever we are able to do in afforestation as regards the forest service, as well as giving assistance to the private sector, must be funded from existing resources. When we are discussing these matters I shall continue to push the question of agricultural resources when considering the Northern Ireland budget. The forest service has a very high priority among those resources. The answer to the question from my noble friend the Duke of Abercorn is that Her Majesty's Government intend to promote further afforestation in Northern Ireland.
House adjourned at one minute past ten o'clock.