Lords Sitting of 27 January 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 Guildford.
Baroness Delacourt-Smith of Alteryn—Took the Oath.

Education Support Grant: Allocations
Lord Gainford: 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 are their latest plans for the funding of education support grants.
The Parliamentary Under-Secretary of State, Department of Education and Science (Baroness Hooper): My Lords, the education support grant allocations for the 1988–89 programme were announced on 17th December last year. They total £115·5 million. My right honourable friend the Secretary of State for Wales will shortly announce allocations of £7·3 million for the programme in Wales. We are currently considering what activities should be included in the programme for the financial year 1989–90.
Lord Gainford: My Lords, I thank my noble friend the Minister for that interesting information. Can she say as to what degree Her Majesty's Government consider this scheme a complete success?
Baroness Hooper: My Lords, my noble friend alongside says 100 per cent. Most certainly the Government consider that the education support grant programme has been a success. There has been a great deal of valuable activity covering all age groups and many areas of the curriculum as well as aspects of local education authority management. All the local education authorities have received some ESG support over the three years of its existence, and for the 1988–89 round each category was overbid. In total, the bids for activities other than those which are essentially formula based amounted to 2·6 times the envisaged expenditure.
Lord Ritchie of Dundee: My Lords, one of the proposed pilot projects for the year 1986 was,
"to improve the use of the spoken word by pupils of compulsory school age."
May I ask the Minister what the take-up on the part of local authorities has been for this particular project since it seems to be one of the greatest importance and interest? She may not be able to let me know now, and if she cannot perhaps she would be kind enough to write to me.
Baroness Hooper: My Lords, I should certainly he happy to write to the noble Lord with the detail he requested. I can in general respond that there appears
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to have been an extremely successful result. Indeed, in terms of the GCSE examinations, where oral assessment is an essential part, this too is proving successful and is welcomed.
Lord Dormand of Easington: My Lords, would the Minister agree that there is a considerable problem so far as grant is concerned with the 16 to 19-year-old group? Many young people of that age are prevented from going on to further education because of lack of financial support. Is the noble Baroness further aware that the settlement made in December last year does nothing to improve the situation? Can it be reexamined?
Baroness Hooper: My Lords, I am not sure that I can agree with the noble Lord. Last week I visited two colleges of further education, both of which welcomed very much the influence and effect of the education support grant provision in their establishments. In fact, taking a particular example, over £28 million of expenditure on IT in non-advanced further education has been supported, and local education authorities have had the opportunity to bid for around £40,000 worth of equipment for each of their colleges.
Lord Cledwyn of Penrhos: My Lords, the noble Baroness said that the Secretary of State for Wales will shortly announce a grant of £7.3 million for Wales. In view of the fact that she has just announced it, what more will he say?
Baroness Hooper: My Lords, I understand that he will say the same thing, but no doubt in an inimitably Welsh way.
Lord Cledwyn of Penrhos: My Lords, is it true that he is going to say it in Welsh?
Baroness David: My Lords, how much money is going to be allotted to No. 11 on the schedule presented in December for the development, provision and appraisal of courses of initial training for school governors? Am I right in thinking that only £100,000 was allotted over the last two years, going to just 10 authorities? If the present Bill goes through, governors will need a great deal more training. Why should that be confined to so few authorities?
Baroness Hooper: My Lords, the details of the 1989–90 programme have yet to be finalised. Certainly, the training needs of school governors is an important issue in the light of the educational reforms and will be considered when the ESG programme is drawn up for the next period.

Human Rights in Kenya
2.42 p.m.
Lord Mulley: 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 representations are being made regarding human rights cases in Kenya.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, we make our views clear on these matters in our regular contacts with the government of Kenya.
Lord Mulley: My Lords, I have greatly admired the progress and achievement of Kenya since I visited it as a member of a parliamentary delegation at the time of Mau-Mau and again after independence. Does the noble Lord not agree that its reputation has been gravely tarnished by the allegations of serious violations of human rights? His right honourable friend the Prime Minister is inevitably extremely well briefed. Did she not make representations on these matters during her recent visit to Kenya, and can he tell us something about the results?
Lord Trefgarne: Yes, my Lords, I can. It is true, as the noble Lord said, that some anxiety has been expressed, not least by Amnesty International recently. My right honourable friend raised the matter when she was in Kenya and it was therefore particularly satisfying to have the very robust response to her representations which emerged from President Moi's speech at the banquet at the end of her visit. Perhaps I may let the noble Lord have the words that he used, which were most reassuring.
Lord Cledwyn of Penrhos: My Lords, what have been the results of that robust response? Can the Minister say what Her Majesty's Government's reactions are to the recent report of Amnesty International, which makes the most grave allegations? This a matter which saddens all of us in view of our high regard for Kenya and its government. Can he say whether anything has been done in relation to political prisoners since the Prime Minister was there?
Lord Trefgarne: My Lords, it is the case, as the noble Lord said, that Amnesty International issued a report last year saying that there were some problems in this area in Kenya. We have been making representations on that matter, including in particular those made by my right honourable friend. Perhaps I could let the noble Lord have the detail of some of the matters that have emerged and some of the very satisfactory responses we have observed in Kenya since the issue of the Amnesty International report, not least, as I said earlier, the response of President Moi on the occasion to which I referred.
The Lord Bishop of Manchester: My Lords, many of us will be glad to hear the Minister's response and to learn that representations have been made in private. Can he also give us some assurance that when government Ministers at any level go on official visits to countries where human rights are in question no impression will be given that everything in those countries is in order, but there should be a public indication to make people aware of the anxieties which have been caused by the policies of such governments?
Lord Trefgarne: My Lords, I am not without sympathy for the point that the right reverend Prelate makes, but I would, if I may, counsel a little caution.
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I recall on one occasion being asked to make such representations in a country I was visiting. I was told, yes, there was one political prisoner remaining in prison, waiting for a visa to enter the United Kingdom. Needless to say that slightly took the wind out of my sails. But the right reverend Prelate is right. It is necessary to make representations at the appropriate level but not in too scatter-gun a fashion, because in that way we lose the effect of what we can do in specific cases.
Lord Mulley: My Lords, I thank the Minister for his encouraging reply. I do not wish for him in any sense to have the wind taken out of his sails, which I should think is a rare occurrence. Can he not say now whether anything of substance has happened, in the sense that some people have been let out of gaol or put on trial? Can we assume that the threat to arrest any members of Amnesty International who should chance to arrive in Kenya is now withdrawn?
Lord Trefgarne: My Lords, on the noble Lord's last point, we have made our views known that any such action would not meet with our approval. I certainly have not heard of any such action having been taken. I am aware of at least one political prisoner who has been released recently and I hope that more will be in the future.
Lord Hatch of Lusby: My Lords, will the noble Lord assure the House that Her Majesty's Government arc completely behind the work of Amnesty International and will let this be known in any country where its representatives may be visiting?
Lord Trefgarne: My Lords, I certainly think that Amnesty International does a great deal of very useful and worthwhile work. But whether it would be of benefit to make the public representations to which the noble Lord is referring I am not quite so sure.

Crown Suppliers: Future
2.47 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have anything to add to their Answer given on 7th December 1987 (HL Debates, col. 3) on the future of the Crown Suppliers.
Lord Hesketh: My Lords, we hope to make an announcement about the future of the Crown Suppliers shortly.
Lord Dean of Beswick: My Lords, I am grateful to the noble Lord for that reply. If the financial return on capital of the Crown Suppliers is better than the Government call for, will that be a prime factor in deciding the future of this department? If it is not a main feature, ought it not to be?
Lord Hesketh: My Lords, it is the Government's policy to consider whether all aspects of government activity really need to be in the public sector or could be run more efficiently and economically by private enterprise. As the Crown Suppliers operates as a trading fund it is possible that it could be run appropriately in the private sector.
Lord Dean of Beswick: My Lords, as one of the answers to a Question I asked in the House in December showed that the return on capital was in excess of what even the Government required, does this not make it appear that the decision is being delayed so that the Government can produce some squalid excuse for selling off a department that is a benefit both to the Government and to the taxpayer generally?
Lord Hesketh: My Lords, we undertook to consider carefully representations made to us by staff representatives before coming to a decision. My honourable friend the Parliamentary Under-Secretary of State met staff and union representatives in December. The issues they raised have needed to be examined in depth, so that we can be sure that a decision will be reached which takes all the important factors into account.
Lord Hailsham of Saint Marylebone: My Lords, would it not be wiser to wait for this statement to be made, rather than try to bring forward a smear campaign now?
Lord Hesketh: My Lords, I am grateful to my noble and learned friend. I did say in my original Answer that the decision would be made shortly.
Lord Dean of Beswick: My Lords, I rather regret the remarks made by the noble and learned Lord, Lord Hailsham, about a smear campaign. I have been in your Lordships' House for four years and that is not a tactic to which I would stoop.
Lord Mackie of Benshie: My Lords, does the Minister mean that the House must wait for the Government to make up their mind—if they have a mind—before it tries to influence them?
Lord Hesketh: My Lords, the Government do have a mind.
Lord Molloy: My Lords, the question was when are they going to make up what they call a mind?

Child Abuse
2.51 p.m.
Baroness Elliot of Harwood: 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 new measures have been taken to tackle child abuse.
The Earl of Arran: My Lords, the Government place a high priority on child abuse matters and have taken the following measures: the publication of a White Paper entitled The Law on Child Care and Family Services; the proposals in the Criminal Justice Bill on children's evidence and sentencing of offenders; new arrangements for disclosure of criminal backgrounds of those seeking to work with children—a circular to the NHS will be issued next month and we are consulting the voluntary sector; the introduction of annual statistics on children on child protection registers; the establishment of a DHSS centrally-funded training initiative; the setting up of three working groups to provide practice advice to doctors, nurses and social workers; and the redrafting of Working Together which will be issued to social services departments, the NHS, the education service and the police. This will be issued following receipt of the Cleveland report.
Baroness Elliot of Harwood: My Lords, I thank the Minister very much for that admirable reply, but I should like to ask one supplementary question. As one who was instrumental in starting social work training in the 1930s, perhaps I may draw the attention of my noble friend to the report by Mr. Blom-Cooper on the death of the small girl, Kimberley Carlile, in which it was stated that most of the social workers in that case were trained. Is he satisfied that today social work training is adequate to deal with these very serious child abuse cases?
The Earl of Arran: My Lords, the Government are mindful of the need to effect improvements in the quality of child abuse social work training. I have already mentioned the DHSS-funded training initiative in child abuse. We are discussing with the Central Council for Education and Training in Social Work proposals for reforming social work training generally and ways of improving knowledge and competence in the particular area of child abuse.
Baroness Ewart-Biggs: My Lords, in view of all the measures that the Minister has listed to take care of child abuse, does he think that eventually it may become necessary to find parliamentary time for the passage of a child care Bill?
The Earl of Arran: My Lords, we made clear in the White Paper entitled The Law on Child Care and Family Services that we shall overhaul child care law as soon as parliamentary time is available. Our proposals will provide a clearer and fairer framework for the provision of services and for the protection of children at risk. As my right honourable friend the Minister for Health announced on 12th January, we shall need quickly to review our proposals for the protection of children at risk when the Cleveland report is published.
Lord Hailsham of Saint Marylebone: My Lords, has my noble friend in his possession any information as to when the Cleveland report is likely to be in the hands of the public?
The Earl of Arran: My Lords, the answer to my noble and learned friend is that we very much hope

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that we shall have the Cleveland report in the first half of this year.
Baroness Faithful!: My Lords, can my noble friend the Minister say whether one of the committees to which he has referred will set out to define what is child abuse in all its aspects—physical, emotional and social? Also, does he agree that in different parts of the country child abuse is thought of in different ways and that there needs to be clarification from the legal point of view, the social point of view and the medical point of view as to exactly what is child abuse?
The Earl of Arran: My Lords, we have no plans to set up such a working group. Child abuse is already defined in the draft DHSS guide Working Together. Further guidance will be issued when the Cleveland inquiry report, and when the reports of the Standing Medical Advisory Committee sub-committee on clinical diagnosis of sexual abuse and the two groups producing practice guidance for social workers, nurses and midwives have been received and considered.
Lord Winstanley: My Lords, I welcome the various steps which the noble Earl has announced to the House. Can he say whether efforts will be made, and urgently made, to ensure that local authorities' social services departments work much more closely with general practitioners?
The Earl of Arran: My Lords, of course that is in hand. We recognise that working closely with other government departments is important and a number of steps have been taken to facilitate this. One example is the setting up earlier this year of an interdepartmental group on child abuse which meets as required.
Lord Diamond: My Lord, as this is the last Question in Question Time, can the noble Earl inform me, or can the Leader of the House inform me, what would be a convenient opportunity to express the pleasure which I feel, and which I dare say is shared by all your Lordships, at the return of the noble Viscount, Lord Whitelaw, to your Lordships' Chamber?
The Earl of Arran: My Lords, what a splendid and wonderful final supplementary question!

Business
Lord Denham: My Lords, with the leave of the House I should like to say a word about the two short debates standing in the names of the noble Earl, Lord Perth, and the noble Lord, Lord Allen of Abbeydale. It is customary in short debates that the mover is allowed 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 debate in the name of the noble Earl, this means that all other speeches should be limited to a maximum of eight minutes and in that of the noble Lord to 11 minutes. I think it would be apposite to remind noble Lords
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who are speaking that, were they to allow the figures eight or 11 respectively to appear on the clock, their speeches would already be too long.

Scotland: Land and Sea Use
2.57 p.m
The Earl of Perth The Earl of Perth rose to call attention to land use and sea use in and around Scotland; and to move for Papers.
The noble Earl said: My Lords, in 1992—only four years away—Scotland's market with no trade barriers will be 350 million people. We, with Portugal and Greece, will be on the extremities of this vast market and perhaps the least well-off of all the nations. In degree this is cause and effect. How are we to overcome the handicap of distance?
Above all, our communication system, whether by land, sea or air—I think that the technical name is our infrastructure—must be absolutely first-class. And what do we find today? I ask your Lordships to take our North-South lines of communication and, first, our road links with England. The English M-roads stop at Newcastle and Carlisle. After that, all we find are the A-roads; the notorious A-road going up to Glasgow with only the last few miles converted to M-road, and the A1 and several smaller A-roads going up to Edinburgh. Is it right that the M-roads should stop before the borders with Scotland? Are the English still afraid of raids from Scotland? I wonder! I shall not go into further detail about the roads except to observe that almost all the roads in Scotland are A roads. It is true that we have a small M system from Edinburgh to Perth—very welcome it is too—and from Glasgow to Stirling. I also recognise that the Government have been trying hard in some respects to improve the road system further north. But I sense that there is no urgency in this endeavour; that one does the ordinary repairs and every so often a little bit more.
It is fair to say that our road system in Scotland is lamentable compared to that in England. We have only 7.4 per cent. of the M roads in the whole of Great Britain. It could be argued that our traffic flow does not warrant more. That comment, if I may say so, is a chicken and egg answer. Scotland is handicapped by great distances and must. I repeat must, have a superlative road system to compensate for that disability.
What about the railways? Here matters are even worse. British Rail, in order to save £500,000, is brutally cutting the west coast route—the London-Midland-Scottish—the pride of Scotland in the old days. Soon passengers, whether they be from Stranraer or from Dumfries, will have to stop at Carlisle and change trains. I know that British Rail must to some degree be commercial, but with Scotland that should not be the only criterion. Otherwise I can see that by the year 2000 there will be no west coast railway route. Therefore I ask the Government to look into this matter and to use their influence on British Rail, as they have, for example, on private interests in relation to the Channel Tunnel.
We in Scotland are nearly 500 miles away from the Channel Tunnel. It will not be of much value to us. We must rely on other means of transport, especially the sea. There are great deep harbour ports on the west coast and there are those on the east coast such as Aberdeen, Dundee, Leith or Grangemouth.
Some of your Lordships will recall that in 1970 there appeared a report by Sir James Lithgow and others which was commissioned by the Scottish Council for Development and Industry, a body that has done so well for us over many years. The report bore the title Oceanspan and it is something which should be reread. Its theme was that our deep sea anchorages on the west coast—Hunterston, Greenock and other Clyde ports—should be the reception area for raw materials brought by big ships from all over the world. Their conversion should take place in central Scotland and the resultant goods should be shipped from the eastern ports, as I have said—Leith, Grangemouth, Dundee and so forth. Your Lordships may remember that this idea was floated before we became members of the European Common Market, which is shortly to be without harriers. The Conservative Government said:
"We accept in principle the main idea behind Oceanspan."
But, sadly, little has happened since then. It is true that we have one or two good M roads in the centre of Scotland, but otherwise I think that Oceanspan has been pigeon-holed.
Let me illustrate what I have in mind. For example, let us take Hunterston and Ravenscraig. The future of Ravenscraig is assured for, say, five years. But what happens after that? Now is the time to look ahead at Hunterston and its deep-sea advantages; its ability to use cheap oil and coal from all over the world and to start great development works so that it can be pre-eminent in Europe for the conversion of metals under modern technology.
Even now it is almost too late to start this study. The area we are talking about is most beautiful. The planning and the amenities need to be carefully taken care of. We already have skilled labour nearby, but I ask that this matter should be looked at again, and looked at now.
I turn now to the eastern ports as opposed to those of the west. Peterhead, Montrose and even Perth are flourishing and are ready to serve incoming ships at all times of the night and day, all day Sundays, weekdays and holidays. That is why they have done so well. I should like to give some detail of what has been happening in Perth. The port is run by three and a half people: the harbour master, his deputy, a boy and a half-time secretary. However, I shall not go into that subject except to say that there the traffic has quintupled over the past 10 years. It is now over 250,000 tonnes and its markets are what you might expect—in the Low Countries, the Baltic countries, Finland, Poland and so forth. There is an example of enterprise. The support of the Tayside region has been valuable and more will be forthcoming.
But what of the other big eastern ports—the Dock "scheme ports" such as Aberdeen, Dundee and Leith? I sense that things are not going so well there, and yet they will have a great opportunity in the coming years. I hope that the Scottish Ports Authority and the Government will try to stir matters up.
I have one last point to make on Oceanspan. There is a concept which I think is mentioned on page 24. It says that a central Scotland ship canal might be looked at, especially with barges in mind. I ask the Government to re-examine that project. It may be expensive but with modern technology it should not he beyond the bounds of our abilities. When all our revenues—and I stress "our", Scottish revenues—from North Sea oil are drying up, it would perhaps provide a most valuable way to create other industry and generally to improve the country's well being. I could say that it would be Scotland's answer to the Channel Tunnel.
The noble Lord, Lord Young, recently announced that his department was the Department of Enterprise. that is splendid. But, even better, it has been announced that the Scottish Development Agency and the Highlands and Islands Development Board will be the main instruments for channelling funds into the various enterprises. I would make a plea that yet a third body be added, namely, the Scottish Tourist Board.
We in Scotland have certain great advantages: our scenery and our sporting facilities. I shall not go into them; we all know them, whether it is grouse, sailing or golf. Very often there are not adequate facilities for the visitor. What is needed is small local hotels, or not even hotels but boarding houses. I hope that that would also be open to support from the enterprise development board. I think one should remember that "many a mickle makes a muckle", although I am not very clear what a "muckle" is.
I shall leave forestry to others, recalling only that once all of Scotland was covered with trees. Then there is fishing, be it for salmon or trout, wild or farmed. That also will be covered by others. I welcome the fact that the noble Earl, Lord Mansfield, is to speak and I should like to say, "Well done, all those who have done so much for the quick development of salmon farming in Scotland so that it is now a very important industry."
I think that there is a revival of sea fishing, but I am puzzled that when you go to a place like Ullapool you find dozens of foreign factory ships waiting for the catch. I do not know whether there are any Scottish factory ships. Why not? Agriculture I shall leave to others; perhaps it could be the subject of another day's debate.
That brings me to my last point. In the old days we used to have regular debates on Scottish affairs in the House. Today I am only speaking thanks to my fellow Cross-Benchers giving me the time. In future I think that the Opposition and the Government should try and ensure that we have one or two debates a year on Scotland.
In the devolution debate the noble Lord, Lord Home, suggested a Scottish grand committee sitting in Edinburgh. I think that that would be splendid. I go further and suggest that others might participate: representatives of the various bodies in Scotland who would be in a position to make their views known and ensure that Scottish feelings would be known not only to the Secretary of State for Scotland but also to those in Whitehall. My Lords, I beg to move for Papers.
3.10 p.m.
Lord Stodart of Leaston: My Lords, I must first thank the noble Earl for giving us the opportunity of ranging over a very wide canvas. Perhaps it is not irrelevant for me to remark on the subject of the use of land and sea that one might sympathise with my noble friend. I see he is £1,400 out of pocket today as a result of a bull trying to use one of the islands for natural purposes but being drowned on the way across. Perhaps that is a rather cruel example of the use of land and sea.
The noble Earl opened his remarks in a rather condemnatory fashion on the subject of roads. I do not think I can agree that they are deplorable, I feel they are very good considering the density of traffic involved. They are excellent right up to the furthest corner of the Highlands. This does not mean that there is no room for improvement. I am quite certain that the A.74 is probably overloaded. However, I would not go along with the noble Earl in a blanket condemnation of the road system.
As regards rail, it is worth noting the enormous success of the extremely expensive luxury trips on the equivalent of what one might describe as the Orient Express. I understand that the train—going round Scotland—is fully booked. On the other hand, many of the ordinary services, carrying people from Edinburgh to London and back again, slip up occasionally and need a bit of sprucing up.
Although the debate is about land and sea, it may not be irrelevant to mention air. Direct flights into Scotland are improving in number. However, there is a need for more. The tourist industry in Scotland would gain considerably if people did not have to undertake what I regard as a perfectly horrifying exercise: flying into Heathrow and then from Heathrow up to Scotland.
The tourist industry seems really to have taken off. There are many superb examples of what small hotels should be. A large number of those in the Highlands—and this also applies to restaurants are as good as any in Europe. A tremendous amount of credit is due to the Scottish Tourist Board whose advertising this year in particular has been tremendously eye-catching. Perhaps noble Lords will understand why I say this; it may be that the success story of the tourist board has something to do with the modelling of its set-up on the Highlands and Islands Development Board's area tourist system under the responsibility of districts.
The noble Earl, Lord Perth, touched on fish farming. This is one of the great success stories, having started only about 25 years ago. Salmon has been the most notable success, and I would have thought there was now an enormous future for mussels and even for the farming of lobsters.
One cannot talk about land use in Scotland without mentioning farming and forestry because they are the basic industries. We are facing considerable changes. The last thing I propose to do today is to enter into the politics of farming. I know that the noble Earl, Lord Mansfield, is going to speak. I would merely say that the Crown estates have done a splendid job in Glenlivet—the best example in the country, I have always thought, of the
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integration of farming with forestry. I can remember in 1965 when I accompanied Mr. Edward Heath on a tour of Scotland. I told him that in the speech he was going to make he ought to pay a compliment to Glenlivet. He said, "Oh, but I really mustn't discriminate between one malt whisky and another." I said that it was nothing to do with malt whisky. It was the great farming-forestry integration. I see that the Crown estates are now going to try to encourage people into diversification in that area. I wish them great good fortune.
I believe that the diversification with which we are faced will be limited in scope. There will always be entrepreneurs in farming. I do not think there will be all that many of them and, if I were to give advice as to what farmers in Scotland ought to do, I should advise them not to indulge in sunflowers or evening primrose but to continue producing what we know we can produce really well; that is, quality beef and malting barley while keeping an eye on the market. Provided that too many people do not go in for growing oats which is my favourite and most profitable crop, I advise farmers to grow that crop too. I would simply add in conclusion that in order to do this, we beg that we should have fair competition. I shall not mention the green pound.
3.21 p.m.
Lord Hughes: My Lords, when the noble Earl, Lord Perth, indicated his intention to put forward a Motion on Scottish matters he indicated that, as it was coming from the Scottish Peers' Association—an all-party organisation—he thought it would be proper that they should endeavour to find something which would not be party political.
When I saw the terms of the Motion which he put forward I must admit that I was completely in the dark because it seemed at one time either to be exceedingly narrow or to be so wide as to make it difficult to keep political matters out of it.
In the noble Earl's opening remarks it seemed to me that he had opted for the latter. He has certainly made it possible for a very wide-ranging debate to take place. I shall not follow the noble Earl on the subject of roads and I shall not follow the noble Lord, Lord Stodart of Leaston, on the subject of air. The noble Lord widened the debate still further. He took it away from both the land and the sea and into the air but I think that he did so properly. However, the one thing which he did not do in relation to air was perhaps mention the complaint which I think almost all of us who use the Scottish air services have. Our complaint is that the fare is far too high. A fare of £144 return between Edinburgh or Glasgow and London is very much more than any equivalent fare in other parts of the world. The only benefit that I can receive is through having become a regular user of the British Midlands service. I pay the same fare but I receive a meal instead of the cup of tea and shortbread biscuit that I received from British Airways.
I wish to concentrate on two subjects which have been only lightly touched on, as I am quite certain that other noble Lords will want to go in other directions. I want to talk about forestry and fish farming. I have two reasons for doing so and the first

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one is historical. When I first landed at the Scottish Office in 1970, having spent all my life in towns, my colleagues decided that the most appropriate thing for me to handle was agriculture and fisheries. I was not terribly enthusiastic about that but I lived to he pleased about it because, in the two years when those matters were my responsibility, I learnt an awful lot about things that I should not otherwise have known. During that time I was very much involved both in the promotion of forestry and in attempting to encourage the promotion of fish farming.
On both those matters I obtained the backing of my noble friend who, immediately on coming into office, recognised that there were opportunities for further employment in parts of Scotland where, to put it mildly, the opportunities were not as good as they might be. His biggest contribution of course was the one which has already been referred to: the creation of the Highlands and Islands Development Board.
I remember that in the beginning the then Conservative Leader in Scotland, the late Michael Noble, characterised the Highlands and Islands Development Board as a Marxist imposition on Scotland. Everyone has since realised that it was a very good development. But forestry and fishing were outwith the fields in which the Highlands and Islands Development Board operated and where it has operated so successfully.
Forestry has done very well in Scotland in the intervening years, despite the obstacles put in its way by the Treasury. I say that with some respect as a former Lord Chancellor is sitting in the Chamber today. However, I remember that there was a debate on forestry in your Lordships' House which was initiated by the father of the noble Earl, Lord Dundee. He of course was a noted practitioner of forestry himself. The spokesman for the Government, of which the noble Earl, Lord Dundee, was a supporter, shot him down on the basis that we could get all the timber we wanted very much cheaper from the northern hemisphere than by growing it ourselves and that all past experience showed that prices would not increase by more than 2 or 3 per cent. a year. A month after the debate the Russians increased the price of timber by 95 per cent. So much for timber and forestry.
Fish farming was almost unheard of in 1970 because the obstacles were so great. I am very glad to see from a document from the National Farmers' Union of Scotland the extent to which fish farming has grown. I venture to suggest that there is still a long way to go. The union points out that:
"Since 1970 … over 370 new businesses have been established. Around 1,700 new jobs have been created directly in the industry."
The Highlands and Islands Development Board believes that in the spin-off from that fish farming another 1,200 jobs in processing and other areas have already been generated. I hope that much more can be done in that direction.
I find myself in the invidious position of having to agree with the Secretary of State for Scotland, the right honourable Malcolm Rifkind, who a fortnight ago gave the go-ahead for 5,000 acres of forestry to be planted in what is called the Flow country.
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Perhaps a noble Lord who speaks later could tell me what that is. The Secretary of State for Scotland this week gave the go-ahead for fish farming in Loch Ness although some people think that that may frighten Nessie.
3.28 p.m.
Lord Taylor of Gryfe: My Lords, I should like to thank the noble Earl, Lord Perth, for having introduced this debate. He will forgive me if I do not share his lack of enthusiasm for the Channel Tunnel. The debate gives me the opportunity to talk on my favourite subject which is forestry in Scotland.
I should like to follow the noble Lord, Lord Hughes, in praising the endeavours of the Forestry Commission. I should like to draw the attention of the House to the changed pattern of forestry in Scotland. In 1980 24,000 acres were planted in Scotland. Of that the commission planted 15·8 acres and the private sector 8·6 acres. In 1987 the figure was 5,000 acres for the Forestry Commission and 19,000 acres for the private sector.
I am not against private investment in forestry and I hope that it will be encouraged, but it does represent a considerable diminution of the place and status of the Forestry Commission in the development of this important industry. I should like some assurance from the Minister that that trend will not continue and the role of the commission will not be reduced. It is a good neighbour in the countryside. It does research for the forestry industry and makes that available to the private sector. It administers grants to the private sector. It has opened up the country—that is important to the tourist industry—with facilities for recreation. Last year, 25 million day visitors visisted the estates of the Forestry Commission. That in itself would justify continued support for the commission.
Turning to forestry in general, it is not well recognised that it is now responsible for employing 11,200 people in Scotland. That is a not inconsiderable number in a small country. I refer to the commission, the private sector and also to the wood processing industry, which has been built on the basis of early planting. I am sure that the Minister will be encouraged to observe that as a result of the much-criticised early planting of the Forestry Commission and the private sector, a Finnish company decided last year to build a new plant in Irvine, an area of high unemployment. That company plans to invest £100 million in downstream activity. The Dalcross plant in Inverness is another example of downstream activity, which is only possible because of the present harvesting from early planting. Therefore, forestry can, and I hope will continue to, make a substantial contribution to the employment situation.
Perhaps I may say a word about forestry's public relations. Forestry is currently getting a bad name from two sources. First there are the environmentalists, most of them based in the South-East of England, who read the glossy Sunday magazines with their pretty pictures. (There are not many copies of the Sunday Times and the Telegraph sold in Loch Aber.) People in the South of England have apparently a great feeling for the wilderness areas of Scotland and very little feeling for the people

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who work there. I have always thought that the saddest sight in those areas is the closed-down school and the deserted croft. Forestry makes a contribution to a living countryside.
The critics of forestry are not confined to people living in the South-East. I noticed recently that a Conservative MP said that he did not want his constituency planted up with a series of lavatory brushes. Anyone who walks through the woods, as I do regularly, and witnesses the Sitka spruce in wintertime will realise that it is a special feature of the winter scene. I hope that we can free forestry from those ignorant prejudices and give it its proper place in the Scottish economy.
The management of the Forestry Commission is broken up into conservancies. They are called conservancies because the people who work there are concerned about conservation. That is why they work in the countryside. They are not manufacturing a dull product. Talk to people who work in the countryside. They love the countryside and they are not in the business of desecrating it.
I should like to pay a tribute to the Secretary of State for Scotland for his wise and balanced decision in connection with planting in the Flow country. The Flow country is not the best place to plant trees. The much criticised investment companies in that area may find great difficulty in attracting the Terry Wogans and the Steve Davises to planting on a 1 per cent. return when farmland is likely to become available shortly which is better land for planting and which may yield 5 per cent. Therefore, I am not sure that the opening of that area will necessarily mean substantially more planting.
Criticism of the Forestry Commission comes not only from environmentalists but also from those who criticise the tax advantages which are given to rich people for planting trees. Who else is going to plant on a 1 per cent. or 2 per cent. return? Perhaps such critics would prefer that Terry Wogan took his money and bought US government bonds or villas in Spain. The mere fact that there are tax advantaages makes it possible to attract capital to an industry which would not otherwise attract it. One gets a higher and safer return by buying government stock than from investing in forestry. We should be careful not to bow to the prejudiced view that by giving tax incentives we are making a gesture for social justice, when in fact it restricts the development of a useful industry in Scotland.
Finally, I noticed recently that CoSLA advocated planning for forestry. CoSLA has enough on its plate in carrying out its obligations, which are substantially in urban areas. To introduce planning controls into forestry would mean substantial delays. There is perfectly good protection in the consultative committees that exist on a regional basis. We should not necessarily impose further planning strictures. I commend to the House further support for that useful and important industry.
3.37 p.m.
Lord Goold: My Lords, I also welcome this wide-ranging debate which has been introduced by the noble Earl. I should like to concentrate on the use of
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surface land, which is clearly no longer needed to the same extent as in the past to grow food. On such land there is a need for diversification. Like the noble Lord, Lord Taylor of Gryfe, I am a supporter of forestry. It is an increasingly important industry. With a predicted shortage of timber world-wide by the end of this century, it is an industry which needs to be expanded. The Government recently announced incentives to encourage farm forestry. That has been well received by the National Farmers' Union in Scotland. In addition to the smaller woodland areas, there is a great need for more large-scale forestry. The perceived need in the United Kingdom is for 30,000 hectares a year of forestry planting.
It is imperative to safeguard the environment and the important tourist industry in some places by preventing planting and in others, where possible, by mixed planting of conifers and deciduous trees. However, in areas which are not of such high scenic and tourist importance, we must not let environmental demands outweigh commercial ones. Some people are opposed to conifers. But the fact is that those are the trees which are in commercial demand. For example, in Scotland Caledonian Paper is at present constructing a new plant at Irvine employing 450 people, with a further 500 employed in related forestry and haulage. That factory needs Sitka spruce; no other will do. Similarly, Highland Forest Products in Inverness makes an alternative to plywood. It employs around 100 people. That factory requires pine; no other will do.
As I have said, we must safeguard the environment but we must guard against too many unnecessary safeguards, which would destroy the economic viability of commercial enterprises and destroy much needed jobs in Scotland. In that matter I agree completely with the noble Lord, Lord Taylor.
So far as surplus agricultural land is concerned, we should also consider the possibility of improving the quality of our new housing by making more land available. In that connection I declare an interest as a director of a Scottish housebuilding company. Because of the shortage and consequent high cost of development land, plots on which houses are built are getting smaller and smaller.
I believe that there are areas where surplus agricultural land could be used for pleasant housing developments without in any way destroying the beauty of the countryside. Similarly, if a person wants to build a house in the country, with five or 10 acres as a paddock, would this really destroy the ambience of the countryside? I suggest not and I believe that, had our present planning restrictions existed a century and more ago, many of the most beautiful castles and manor houses in Scotland would not have been built. I hope that a more enlightened look will be taken at planning applications in future. While green belt is of course important, it need not be maintained everywhere with quite the same vigour and intensity as in the past.
A paper produced recently by the Department of Agriculture and Fisheries states that approximately 20 per cent. of land in Scotland is surplus to agricultural requirements. If that land is not to revert

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to marsh, heather and bracken, it has to be used sensibly and planning authorities have to be less negative than many are at present. With a shortage of forestry products and housing, good sense would seem to indicate that one surplus should help to satisfy another shortage.
Fish farming has been mentioned by other noble Lords. This is a very important new industry in Scotland, over 1,000 people being employed directly on cage sites, many in remote and very vulnerable communities which have little other employment. It is estimated that up to 3,000 people in the Highlands and islands are directly and indirectly employed in fish farming and that is an ever-increasing figure.
However, there is a need also to recognise other interests—for example, yachting, tourism, fishing, and environmental interests. I believe that with proper guidance all of them can live together without conflict. Certainly aquaculture is very important and must be encouraged. The Crown Estate Commissioners must act as sensible landlords, as I know they will under the chairmanship of the noble Earl, Lord Mansfield. I welcome their recent document laying down some guidelines for siting fish farms in the sea.
I mentioned the need to recognise the interests of yachtsmen and tourists. In Scotland, where some of the finest sailing exists, this is particularly important. It is essential to preserve safe passage to anchorages, particularly at night. I know that the Royal Yachting Association of Scotland is consulted by the Crown Estate Commissioners in connection with the granting of leases for fish farms in coastal waters, but safe passage is a major problem. In 1977, 27 applications for leases were referred to the association; in 1987 there were 253 referrals. These are nearly always for sheltered waters which were previously a haven for sailors.
The economy of the islands of Scotland is also of great importance. I am delighted that this Government's agricultural development programme for the islands will give a much needed boost to the whole economy.
The Scottish islands off the west coast, with their unrivalled scenery, are an area of great potential for tourist development, but one of the difficulties is the cost of sea transport for goods, cars and people. Perhaps I should again declare an interest as a frequent user of the ferry between the mainland and the island of Arran. The ferry services are almost exclusively in the hands of the nationalised monopoly carrier, Caledonian MacBrayne, who receive a substantial subsidy from public funds for their operations.
The Government have recently provided the means to purchase several new vessels and provide harbour facilities for roll-on/roll-off operation. Because of all that modernisation there is a need to ensure that maximum use is made of the facilities by an efficient, business-like operation. I suggest that the time might now be appropriate to consider some cooperation with the private sector on these routes, either by licence or by other method of tender. I believe that this would lead to lower costs, which would help to encourage more tourists to explore this
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remote part of the British Isles; it would benefit small industry on the islands; and there would be a resultant increase in employment. I hope that it will be considered by the Government.
A lot is happening in the land and sea areas of Scotland. There is a lot of exciting potential which is being encouraged by the actions of this Government. Much more can still be achieved.
3.45 p.m.
Lord Grimond: My Lords, it is always a great advantage when speaking in Parliament to be able to follow up the remarks of the previous speaker. That I shall do on the subject of fish farming. However, before doing so I should like to echo the cry of anguish from the noble Lord, Lord Hughes, about the cost of flying to the north of Scotland. I hope very much that the further amalgamation of the airlines will not lead to even greater increases in fares.
I should like to talk about fish farming and in particular the position of the Crown Commissioners. I am in a very happy position to do that because the chairman of the Crown Commissioners, the noble Earl, Lord Mansfield, is here with us and the proposer of this excellent Motion, the noble Earl, Lord Perth, was a commissioner, although I do not think that he is any longer. There may be other commissioners present.
In case there is anyone present who is so ignorant as not to know what the Crown Commissioners are or what they do, I shall explain very briefly—subject to correction by the noble Earl. They have inherited the management of Crown lands and they hand over the profits—the consolidated fund. Apart from the salaries that they receive—which may be large; I do not know—they are not in any way engaged in private profit. Under their statutes the Crown Commissioners are under an obligation to maximise profits on behalf of the Crown. They own a considerable amount of property—houses in London and land in Wales and in Scotland. In particular they own the bed of the sea. In Orkney and Shetland this is from the low tide mark, and in the rest of the country, except I believe for the Duchy of Cornwall, they own it from high tide mark out to the national limit.
I am bound to say that the Crown Commissioners are a rather tough lot. In Shetland and Orkney they have been known to arouse some opposition. I had a long and fairly amicable negotiation with my friend Sir Malcolm Trustram Eve before he would forgo a claim to high tide mark in Orkney and Shetland. Of course it is well known to everybody that under udal law the land down to low tide mark belongs to the proprietors in Orkney and Shetland.
I should like to make one general point about the commissioners. I understand that under their statute they are bound to make the most profit that they can, not on behalf of themselves but on behalf of the Treasury ultimately. There is a question as to what principles they apply. I am informed—and again I may be corrected—that as far as concerns fish farming they will probably impose a rent or levy of some 1.25 per cent. on turnover, If that is so it is a fairly large amount, bearing in mind that fish farmers cannot use much of the bed of the sea. I should like

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to know whether that is the rate being applied to the Channel Tunnel, because if it is the proceeds will be very large. I understand that they have made an arrangement with the Government over the Channel Tunnel. Ultimately it is in the public interest to know what the Channel Tunnel is being charged and I do not think that it is a matter which can be hidden under plea of a commercial negotiation. Some of the activities of the Crown Commissioners are a matter of general public concern.
As I said, the Crown Commissioners charge a rate or levy on the use of the sea-bed and other facilities by fish farmers. As I understand it, in the case of the mainland of Scotland there is no planning authority which can with legal sanction deal with the problem of the control of fish farms. Negotiations take place but I believe that there is no legal sanction for any body to be in charge of planning. The Crown Commissioners have stepped in and have tried to reconcile the various interests. They hear representations and no doubt they do a very good job. However, as I say, they probably do so without any statutory authority in the last resort, and I understand that it takes a very considerable time.
Around Orkney and Shetland the matter is dealt with under the Orkney and Shetland Acts. It seems to me that there the matter is handled much more satisfactorily. For instance, in Sheltand, the Shetland Island Council—I think under Sections 11 and 13 of the Shetland County Council Act 1974—exercises control. I understand that it gets on rather well with the Crown Commissioners and there is no great problem at the moment. However, inherent in the position of the Crown Commissioners is a conflict of interest. They are, so to speak, the landlords of the seabed. No one would dream of placing the whole planning procedure of housing or land in the hands of the owners. However well intentioned they may be, there is an inevitable danger and likelihood of a conflict of interests. Furthermore, apart from the very important present industry, about which noble Lords have previously spoken, experiments in fish farming and other forms of fishing are taking place. Here, too, it is not apparent to me that it is desirable that the owners of the seabed shall be in a position to control the planning.
I need not mention again what has been said by the noble Lord, Lord Goold, about moorings and passage at sea. Lately near my home at Orkney there was a conflict between a man who wished to raise the jetty or breakwater which joins the island up to the mainland and a local oyster farm. There is a difficulty there. I hope that the Government will give some thought to it and will give statutory powers to somebody to adjudicate between the various claimants to the seabed.
There has been very considerable anxiety, in particular in Norway, about the dumping of atomic waste at sea. I do not quite know whether the Crown Commissioners are involved in that but presumably they own the Stormy Bank—one of the places mentioned—and therefore would come into the situation. I should be grateful if the Government will tell us who is the ultimate authority for deciding where on the seabed atomic waste may be buried.
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There are many interesting subjects that could be gone into in this debate. That is the one to which I wish to draw the attention of your Lordships.
3.52 p.m.
Baroness Elliot of Harwood: My Lords, I should like to add my thanks to the noble Earl for inaugurating this debate today. I agree with him that from time to time it would be an excellent idea if we could have debates on the development of Scotland, not so much because it is Scotland alone, but because Scotland plays a very important part in the United Kingdom and in the European world. I think it is most important that we should be able to discuss a variety of matters because we still have a tremendous influence outside the bounds of our own country. That is still of very great importance.
Scottish people have always been interested in European and foreign affairs, and I believe that we should continue to be so. We have made many contributions to the government of the United Kingdom by very distinguished Scots people. I hope that it will continue as it has in the past. I have not disagreed with any of the remarks made by noble Lords. That shows that we have a general feeling in Scotland that we wish to do the best we can for everybody in the country.
Noble Lords will know that my main interests are in the hill country and wildlife country, in what in the agricultural world are technically called the less favoured areas. I have always believed them to be the most favoured areas because I like them best, but that is the technical term. In some of those areas we are developing agriculture. Some of the produce is not over supplied. That is a very rare thing to say of many agricultural areas today when everyone is suffering from overproduction. However, in the less favoured areas, whether in the Borders the Highlands, or the West Country, sheep are not overproduced. It is an agricultural fact that I hope will continue. There seems to be no reason why it should be cut down in any way.
I was very glad when the Government, in discussions over the CAP in the EC, stood firm against the idea of cutting down on the support for the sheep industry today. I also agree that there is no reason why a certain amount of land should not go over to trees. Living as I do in the middle of the biggest forest area, it is a little difficult to talk about more trees, but, if one takes a general view, trees and grazing land can be combined. On the whole I think the Government are right to encourage it.
Then there is the question of diversification. This can be very varied. In suitable areas it means different uses not only of land but also of buildings, and it means encouraging tourism and handicrafts. I should like to mention one village in my area called Newcastleton, where a new industry of making rugs on a small scale has been started by enterprising people. This enterprise has meant that many people in the village are learning to make hook rugs and are selling them all over the United Kingdom. It is only a small matter but it shows that there are people ready to start new industries of different kinds. Diversification must still maintain agriculture as the

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central role in the rural areas. To allow agriculture to become redundant would be a disaster. That is most important.
The National Union of Farmers in Scotland has made this point to me. If diversification includes restoring or changing use of farm buildings—which is something that happens—those farm buildings should remain at the same rateable value. It would be of very little use to the farmer trying to vary his production if he found himself faced with enormous rate increases when he was trying to diversify and use the buildings for something else. Otherwise they might simply go to rack and ruin.
In this debate we have talked about the sea and sea fishing, which is at the moment fairly prosperous, and the new industry of fish farming, which has been mentioned by the noble Lords, Lord Hughes and Lord Goold. That industry is very important indeed because it is growing all the time. Someone has already mentioned that there are 370 new fish farm businesses that have started up and are bringing in 1,700 new jobs. The Highlands and Islands Development Board has encouraged this very successfully. This industry finds employment all the year round and in particular for young people. As the fish farming develops and increases more transport and other services are required for that industry. I believe that there are now at least 25 plants throughout Scotland that pack and process the produce of fish farming. The Highlands and Islands Development Board estimates that there are 1,200 jobs in that section in addition to those which are related directly to the production.
I believe that, with the encouragement that the Government give to Scottish industry and with encouragement to try to introduce new schemes, we can play an important part in the development of the United Kingdom both here in this country and abroad. I commend this debate and encourage the Government to do everything they can to increase the enterprise and the production going on in Scotland today.
3.59 p.m.
Lord Ferrier: My Lords, it is clear that the wide-ranging nature of the Motion by the noble Earl is well worth considering. When I heard him speak I was reminded of a Hindu lawyer who once said to me, "If you want to be vague, be very vague". Indeed it enables the span of considerations to be so wide that it is difficult to decide what to say when, like myself, people are interested in many aspects of Scotland's anxieties.
I believe I am right in saying that fish farming really started when this House persuaded the Government to adopt a proper rating system. The rates were so high that they could not be compared with rates for ordinary farmers. We asked why so much had to be charged for fish farming, but this was 25 or so years ago.
So many subjects have been touched upon that it is difficult to decide what to say. Forestry was referred to both by the noble Baroness and the noble Lord, Lord Taylor of Gryfe. I am guided in my comments by the memory of a kinsman of mine who
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was concerned about the cost of roads in Argyll. The place is now closed off, but he told me that he had calculated that the cost of maintaining and reconstructing the road between Argyll forest and the factory would be more than the value of all the timber. Let us remember that.
My mind goes straight from that to the Irvine proposal, mentioned by the noble Lord, Lord Taylor of Gryfe. It is very important, but, goodness me, the timber for it has to come a long distance. We must remember that the cost of the roads, their maintenance and reconstruction is a charge on the people rather than on the factories. That is a fact which we must remember clearly.
While talking of Irvine—I live near Ayr—I am reminded about transport. British Rail is awfully proud of its performance in Scotland. I cannot understand why, because it is rotten. How is it that one cannot catch a through train from Ayr to Edinburgh? You have to change. You may have to change trains or change platforms; sometimes, you have to change stations. The rails are there but the will is not. My view is that it is not the fault of the railway board in Scotland, but the fault overall of British Rail who is so fussed about its blooming tunnel that it is spending thousands of pounds on this harebrained scheme. The money would he far better spent on the nitty gritty of transport in Scotland.
Why does the train from Stranraer to Euston not stop at Prestwick? Can you believe it? We are told that British Rail is to build a Prestwick airport station, but when? The line has been electrified to Glasgow, but British Rail has not improved the service on the railway which is so important to Scotland. There are miles of potential developments. I am thinking particularly of the Waverley line. That should never have been closed. It was parsimony that did it. But who is to pay for the transport of all the timber from the forests? Will it travel by road? If so, the cost of replacing the road is about the same as the value of the timber. Why cannot the railway be reconstructed? Why cannot a more modern approach be made to the problem?
The railway system needs thorough overhaul. The design of vehicles needs revision. The sleepers are insanitary because they are not properly constructed. For example, there are only two lavatories in a coach containing 30 bunks. They are both at one end of the corridor. How the devil does one travel from A to B down a rocking corridor at 90 miles an hour in the middle of the night? No wonder everybody says "To hell with it. I'll fly". Some serious thinking ought to be given to transport in Scotland.
I am picking and choosing out of my notes subjects which mean a lot to me. As I said, fish farming was given a boost by this House. We have heard much about forestry and we should work on that and develop it; but I believe there must be a transport supremo who will judge what the right system of transport is for carrying the timber.
I believe it is necessary to redevelop the railway system. I hope that can be done. That is my chief contribution to the position as I see it in the light of the debate. There is much more. The noble Earl mentioned that sea transport might easily be

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developed, if one was not worrying about the tunnel, to Leith, Copenhagen, Hull, Zeebrugge and so on. I believe serious attention should be given to the problem in the light of what the noble Earl has tried to persuade us. We must take an overall view of what Scotland needs and carry it out.
4.7 p.m.
Lady Saltoun of Abernethy: My Lords, the noble Earl, Lord Perth, has spoken about the infrastructure, the necessity for better roads and improvements to harbours, all of which I heartily endorse. I should like to follow him a little further down that path and speak about roads. It was good news to hear that the notoriously dangerous A.74 is to be upgraded to a motorway in the near future, and not before time. But that is not nearly enough.
The A.9 from Inverness to Perth should at the very least be a dual carriageway all the way and preferably a motorway, as should the Aberdeen to Perth road and the A.1 from Edinburgh to Newcastle. The A.9 from Wick to Inverness, the roads from Inverness to Aberdeen, from Fort William to Glasgow and the A.68 from Edinburgh to Newcastle should at least be dual carriageway all the way. The A.93 from Perth to Braemar and Aberdeen is not even a trunk road, at least I do not think it is. From Aberdeen to the Cairnwell, where the ski centre is, it is a good road thanks to Grampian Regional Council. But as soon as one goes over the top into Tayside it becomes one of the worst roads in Scotland. Every time I drive over it, it is worse than I remember and I cannot believe it. Yet it is the only road from the south to the ski centre, and is very busy too in the tourist season, carrying huge buses to and from Royal Deeside, which is one of Scotland's biggest tourist attractions. What happens when two of those buses meet I know not. I only hope that I am not there. Soon there will be a very nasty accident. I do not know whether it should be redesignated a trunk road or whether Tayside Regional Council might be given some special grant to improve it, but something needs to be done.
Apart from anything else, the Channel Tunnel, which the noble Lord. Lord Ferrier, so deplored, will not do Scotland much good unless she has better roads over which to get her goods to it or to the railheads, now so few and far between, which lead to it.
The noble Lords, Lord Taylor of Gryfe, Lord Hughes and Lord Goold have put very strongly the case for forestry and its expansion in Scotland. I am most grateful to them because that has saved me a lot of time. The Forestry Commission's functions as forestry authority are central to the private sector. I hope that if the Government are still toying with any idea of privatising the commission, which I believe they once were, they will abandon it forthwith.
I join with other noble Lords in applauding the decision of the Secretary of State announced on Monday to authorise the planting of some 2,300 hectares of trees in the flow country in Caithness. It is a very welcome decision. I hope that it will be the forerunner of more courageous decisions in the face of those who would like the flow country to remain
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a dreary, unproductive bog. Plenty of it always will remain so, for there are conditions under which no tree will grow.
I have one or two small suggestions to make regarding areas where I think there is a ready market for products which could be grown in Scotland. One is cashmere. I understand that there is a world shortage of cashmere. Kashmir goats can be bred and reared successfully in Scotland. There could be a real opportunity there. Although they are not the very best milking goats, the production of goats' milk cheeses could be a profitable sideline.
There is, I understand, a world shortage of honey. I know that Scotland cannot rely on having enough sunshine every year to make honey production reliable as a sole source of income; yet I know of a man who started about 10 years ago with a few hives and who now owns a large and thriving business. He produces mustard, marmalade and chutneys as well. Any honey producer would be wise to have a second string to his bow.
Finally, I wonder whether rather more of Scotland's vegetable requirements could not he home-grown. The demand for fresh vegetables and unusual vegetables has increased quite dramatically in recent years. And that demand is being met very largely by imports. Only last week I found salsify in my local supermarket; I had never dreamed that I would ever find it there. It had come from Belgium. I used to grow it perfectly easily in the garden. That is just one example. I think it might be possible to grow quite a variety of vegetables, fruit and herbs, which are at present imported or just not available.
My message is: come into the kitchen, farmer, find out what the cook wants and see if it is possible for you to grow it.
4.14 p.m.
The Earl of Selkirk: My Lords, the noble Earl, Lord Perth, was absolutely right in putting primary emphasis on transport. Access has been the problem of Scotland from the very earliest times. Some noble Lords may have heard of General Wade who is said to have made the first road in the Highlands. I do not know whether it was a cause or not, but certainly a transformation of the economy followed the making of that road, for good or bad reasons.
One must not underestimate the tremendous transformation that has taken place in Scotland since the days when we had what were called the heavy industries. Scottish coal was being sent by ships all over the world and half the ships in the world were made on the Clyde. They used to say of Coatbridge that it was the vulcan of Great Britain. It must have been very unpleasant; I believe the sun was invisible at all times of the year. That is how industry was in the early days.
It came to an end after the First World War. Since then we have been trying to develop light industry. The basis on which that industry developed was trading estates. I ask the noble Lord—I do not suppose he will answer—how many trading estates there are in Scotland today. They can be immensely important. I believe that in the next 20 years we are going to find a lot of people trying to get away from

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the overcrowding in London which is becoming intolerable. Trading estates, with proper areas for parking cars and other facilities, will attract people.
I had the honour before the war of taking the chairman of Rolls-Royce around Scotland where he was planning some development. I did my best to sell Coatbridge, Airdrie, Motherwell and Hamilton. But he came straight back to Hillingdon estate just south of Glasgow. I do not blame him; it was probably the right place. These industries are of tremendous importance for the future.
I find myself tremendously opposed to what the noble Lord, Lord Stodart, said about the roads. If one thinks about it for a moment, we have had motorways for just on 30 years. You can go to Exeter, Bristol, Cardiff, Liverpool, Leeds and York on motorways. But can you go to Edinburgh? Can you go to Glasgow? The noble Lady said that the A.741 is a dangerous road. I suppose it is. I would say that the road to Edinburgh is a good country road with a few cows and one thing and another. It is quite a pleasant road to travel along. However, it is totally out of touch with the modern motor car. It is time something was done.
Three important developments have taken place since the war. I will not talk about oil, except to say that the industry has had the decency to pipe supplies. That has been done extremely well. The standard of amenities with which the oil piping has been carried out has been of a very high order as far as I can see.
The second development is tourism. There of course is the whole question of transport and access. I am going to say this quite bluntly. We have been let down by British Airways. I think British Airways has done much less than its share in making it clear that Scotland is available, particularly from North America. We have no British Airways aeroplanes flying from Scotland to the American continent. That is absurd. It is true that there is an American company coming in at the present time, but British Airways has not done its share.
Indeed, I think that British Airways has been unduly influenced by the travel agencies in London. I know more than one person who has been told that the only way to get from Scotland to North America is through London. That is untrue, but if it were true it would be quite wrong. Many people in Scotland are in close contact with all parts of that continent, and with Canada particularly. Almost half the population of Scotland have letters from time to time from Canada and are very anxious to go there. One never knows how to bring pressure on airways but I hope that some pressure can be brought to bear.
I was going to say something about fish farming but I do not think that I will. The noble Earl has been telling us all about it. We have had a number of figures, some of which I disagree with.
I have a very interesting paper here from the Crown estate. There are questions some of which were asked by the noble Lord, Lord Grimond, about what exactly is happening. Here the Crown estate has made a tremendous development, on which I offer it warmest congratulations; but is it really the right body to do this? Do we have a sufficiently broad outlook on this?
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There is the question of disease. There are various places such as Aberdeen, Stirling and so on where this subject is dealt with. There is the story that some of the rainbow trout were brought in from Denmark with a disease and nobody seems to care about it. These are important factors.
It is an interesting proposition to make money out of the bottom of the sea. I do not know anybody who has done it before. It is quite an achievement and I think everyone wants to support such efforts. What do you do about it? Will there be a licence on tonnage? Should it be registered in the Register of Seisins? Is it indefinite? Is it transferable, or is it purely personal? These are factors which should be brought out quite clearly. This is a new and tremendous development.
I shall stop now because I should like to give the noble Earl, Lord Mansfield, as much time as possible. But I am sure that nothing is more important than improving access for Scotland.
4.20 p.m.
Viscount Thurso: My Lords, I share the gratitude of other speakers in the debate for the fact that the noble Earl, Lord Perth, has opened the debate so wide: to almost anything which occurs in the sea, under the sea, on the sea, on the land, in the land or under the land. I do not propose to follow him everywhere; I propose to confine myself to the area of Scotland north of the Highlands line. The noble Lord, Lord Grimond, and I are probably the only two noble Lords who live there. I should like to point out to the House how fragile is the economy in that area.
I submit to your Lordships that the primary purpose of land use is for the communities which live on that land. The primary purpose should not be to supply a month's holiday to people in the far corners of the land; it should be to keep the communities alive in the areas where they have existed. That purpose is difficult to achieve. I should like to share with noble Lords some statistics about the district of Caithness. As a result of the census taken the year before I was born, in 1921, there were returned 940 fishermen; 310 coopers; 447 fish curers; 255 water transport workers; 781 associated trades such as ropemakers, netmakers, sailmakers, boilermakers, shipwrights, basketmakers, and so on. For the fishing industry therefore there was a total of 2,733 fully employed persons. That leaves out of account the girls who came in to cure the herring, and the people who came in during the height of the herring season and boosted the population of Wick from a figure of approximately 7,000 to over 10,000. At the same time there were employed in agriculture 4,271 farm workers and 212 people in associated trades such as seedsmen, blacksmiths, wheelwrights, and so on. There were therefore 4,483 people employed in agriculture and the combined total was 7,216.
The 1981 census showed that the combined number of people employed in fishing and agriculture had dropped to 1,040. That is the kind of decline that these areas have faced in their basic industries. Were it not for the fact that we have in our midst the Dounreay atomic research establishment, we should

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literally be a desert. If it were to be decided not to follow the road of atomic energy as a source of electricity, and that were to be removed, we should be decimated. It would be like an implosion or a supernova. We should shrink into a black hole and the population would fly outwards like a lot of neutrinos.
We face this very real threat the whole time. I beg your Lordships, particularly those on the Government Benches, to remember the fragile economy of the Highlands. It is not a simple success story; it is a constant struggle to find new industries to replace old. In that context we look, for instance, at forestry. The best that can be said for forestry in our part of the world is that by coming into the area it has provided jobs to replace those that have disappeared over the past few years. However, it has not created an enormous surge of employment in what is known as the flow country. For the sake of the noble Lord, Lord Hughes, I should like to say that the flow country is an emotive term that has been invented by journalists over the past three or four years. A "flow" is a certain kind of bog with dubh lochs in it. The flow country refers to the whole area, whether or not it contains flows, in which flows are to be found. Therefore, in the so-called flow country—so-called by journalists—one will find flows but also areas which do not have flows. One will find areas that are agricultural and others that are suitable for forestry, and so forth.
While sharing with my noble friend Lord Taylor of Gryfe the pleasure that at least some sense has been brought into the forestry argument, I should like to endorse his remarks about the importance of the Forestry Commission. The Forestry Commission has carried out some of the best and most sensitive forestry developments in the whole area. It now has approximately 5,000 hectares of land which it bought and paid for but which it is not being allowed to develop. It is a piece of land about which I know a great deal. It is approximately 500 hectares in extent which the commission bought from me and my sons and which it has fenced, roaded and all but developed to the point of ploughing and planting. That has been held up for no particularly good reason. Are we seriously to force the commission to demolish and to reinstate £50,000 worth of infrastructure on that land? I suggest not—it would be crazy. When the land was taken over and development began the site was not of special scientific interest. Therefore I cannot see why the Forestry Commission is being treated worse than private forestry. I plead with the Government to look at that matter.
Finally, I should like to comment on the iniquitous effect of the high cost of petrol on the whole Highlands area. It has a harmful effect on every industry: on the tourist industry, agriculture and even on the cost of goods to the housewife. It is a sick joke that the most expensive petrol one can buy is to he found just outside the boundary fence around the Sullom Voe oil terminal. Apart from being harmful to the area, it is unfair that an area which produces and handles so much oil should be forced to buy the final product at an extraordinarily inflated price. It is
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about time that there was a national price for petrol so that everyone, wherever he may be, pays the same price. If that were done it would have little effect on the oil companies but an enormous effect on tourism, forestry, agriculture, fishing and on the people living in the Highlands of Scotland.
4.28 p.m.
Viscount Massereene and Ferrard: My Lords, I owe the noble Earl, Lord Perth, profuse apologies because I arrived just after he sat down. That was not completely my fault; I am pro-British Rail but I was let down on this occasion. I apologise to the noble Earl. As I deserve a penalty for not hearing his opening speech, I shall be brief.
The fashion this afternoon appears to be fish farms. For about 12 years I have had a salmon fish hatchery on my estate in the west of Scotland on Mull. The attraction of fish hatcheries is that one cannot have them everywhere. One can have fish farms anywhere in the sea provided that the wave height is not above approximately two and a half to three feet. We supply the smelts to fish farms when they are about 20 months old and about 10 inches.
A fish farm has started on Mull hut I cannot have any cages in my own sea loch because of the wave height; I am on the west coast. I have had correspondence with my noble friend Lord Mansfield and I have spoken with him, about fish farming. When fish farming first became popular the Crown Commissioners, with great respect. appeared to go a hit mad. They presumably took a map of the Western Highlands and appeared to grant fish farm licences to anyone all over the sea lochs without first ascertaining whether the lochs were suitable, who owned the foreshore, and so on.
If you have a fish hatchery what you are terrified of in particular is disease. You must have exactly the right water at the right temperature. It is convenient to have it near the sea because, as your Lordships know, when the smelts go to sea in their wild state they hang about in the estuaries so that they become acclimatised to the salt water. Of course, if you threw them straight into the sea cages the shock would be too great. Therefore, a fish hatchery should be fairly near the sea.
The other matter is acidity. There is more acidity now and it has to be watched extremely carefully. I do not want to cross swords with the foresters—I have been planting trees all my life and am pro-trees—but if one has a lot of sitka spruce on the river then there is increased acidity. That is a question of fact. I have seen it proved.Therefore. it is understandable why one has to be very careful if one has a fish hatchery.
The other matter which has rather surprised and horrified me is that I read in The Times or the Telegraph about three or four days ago that some very eminent scientists believe that there is a danger in the future of people catching the flu virus through over fish farming. I do not think we need worry about that for quite a few years but it is rather a horrifying thought. Apparently it is due to the food that the salmon in the cages are fed on. However, it is a very technical subject and I am not a biologist so I will leave it alone.

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However, apart from that, if there are a great number of fish cages in the sea, eventually there is bound to be pollution and if there is pollution there will he disease. I am sure that the Crown Commissioners fully realsise that and I understand that they have cut down on the granting of licences for sea cages.
Before I end I should just like to say a few words about forestry. I have nothing against sitka spruce provided they are planted in the right places and regard is given to the flow country in Caithness; I have been to Caithness and I have seen it. Some of it can of course be planted with sitka spruce but it will grow very slowly as the soil is extremely poor. You can also plant lodgepole pine, pines contorta. However, on the question of employment—and of course I am all for employment—if you are going to destroy a really important area of the environment I do not believe that employment should interfere with that too much. Planting trees involves fencing and planting, which of course creates employment, but once the trees are growing it does not create a great deal of employment.
I should just like to say to my noble friend Lord Goold that I do not know whether he knows the West Highlands but he can rest assured that certainly in Mull there are hundreds and thousands of tourists and the whole island is flooded with them for six months of the year. I do not think the island can take any more. I agree with what he said about MacBrayne's. It has always had a monoply and it is time that that was intruded on.
4.37 p.m.
The Earl of Mansfield: My Lords, I should like to congratulate the noble Earl, Lord Perth, on giving us the opportunity of discussing a number of matters both of fascination and import. If I have a criticism of this Motion it is that it is so widely aimed that it could have encompassed a number of interesting and important Scottish matters. I should love to have worn my Scottish hat and talked about a transport policy for Scotland; I should love to have talked about an integrated land-use policy, which does not exist and never has existed in Scotland, and I should love to have talked about the regeneration of industry with the right amount of encouragement, but I shall not.
I declare my interest as the First Crown Estate Commissioner, while acknowledging my distinguished predecessor, the noble Earl. A considerable amount of ignorance exists as to the Crown estates; what they consist of, how they are managed and who does the management. To some extent that has been explained by the noble Lord, Lord Grimond.
In 1760 George III found himself strapped for cash and he came to an arrangement with the House of Commons by which he was relieved of his duties to pay for the Navy. The trusteeship, for want of a better word, of the Crown lands was vested in the House of Commons and he was given pocket money in the shape of the Civil List, which Her Majesty the Queen still enjoys today. That was not a bad bargain for the taxpayer because we paid over a bottom line
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profit to the consolidated fund last year of £30 million and the Queen received £5½ million for herself. However, that is by the way.
After many vicissitudes over the centuries, the modern statute which deals with the composition, duties and powers of the Crown Estate Commissioners is in the Crown Estate Act 1961. I quote from Clause 1(3), which states:
"It shall he the general duty of the Commissioners, while maintaining the Crown Estate as an estate in land … to maintain and enhance its value and the return obtained from it, but with due regard to the requirements of good management".
I say that particularly for the benefit of the noble Lord, Lord Grimond, and others in the islands. He said that we were regarded as a tough lot.
I was previously in a ministerial career dealing with Highlanders and crofters from Barra to the north of the Shetlands, and anybody who has done that will know that one cannot do it with kid gloves and at the same time have any form of success in whatever one is trying to achieve. Nevertheless, I maintain that our tenants, in areas from Taunton to Wick on the mainland, with large chunks of London in between, recognise the fairness with which they are dealt. While they appreciate that we are not a charity, as indeed we are not, they recognise that they are treated fairly and with much consideration for their position and not least their difficulties. That is certainly applied in the case of fish farming.
As I have said, the vast bulk of the Crown estate is in land, mostly tenanted agricultural land consisting of many hundreds of thousands of acres, and also large portions of London including such places as Regent Street, St. James's and other areas. But an altogether different part of the estate lies round the shores of the United Kingdom; it lies in the sea-bed within the territorial waters, which your Lordships will know were recently extended from three to 12 miles. It is the ownership of such waters which gives the Crown estate rights over every marine-based fish farm and the duty in effect of regulating the development of the industry.
I shall resist the temptation to discuss matters of udal law with the noble Lord, Lord Grimond. He slipped it in quite quickly, but there is a legal dispute as between the Shetlanders and the Crown Estate Commissioners, and I say nothing about this slightly tricky subject.
As many noble Lords have said, the fish farm industry scarcely existed 15 or 20 years ago. Ten years ago the industry was just starting but production really became measurable in 1980 when it was 1,000 tonnes. By 1986 it had risen to 10,000 tonnes. Last year, in 1987, there were 16,000 tonnes, and it is likely to be 25,000 tonnes this year. The figures are likely to rise to over 50,000 tonnes by the early 1990s. So your Lordships can appreciate the tremendous rise in production which there has been over this period. There has also been a rise in the production of shellfish and there are expanding markets for mussels, scallops and oysters. One noble Lord tempted us by talking about lobster farming, but I regret to say that scientifically at the moment it seems impossible to raise the brute from being very small to table-size.

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Salmon farming alone is approaching an annual production value of £100 million and it employs directly somewhere in the region of 1,500 people. When one considers that this activity occurs mainly in remote coastal areas, the beneficial economic effect on otherwise fragile landward areas can be estimated. Then there are the spin-off or the downstream activities such as fish processing and marketing, which employ several thousand people as well. So this activity, which has arisen only in the last 10 years, has provided great opportunities for employment in Scotland and, much more importantly, great opportunities for young people to find gainful employment to enable them to marry, settle down and raise their families in those parts from which they themselves hail. I think that that is as important as it could be.
This economic explosion has come about as a result of a very large investment in money terms on the part of some large companies. It is right to say that the state has played its part. The Highlands and Islands Development Board has poured over £20 million into the industry, and the Scottish Development Agency has also played its part, particularly over fish processing. The Government have also had a role through the activities of the Department of Agriculture, the marine laboratory and various other government agencies.
Where then have we got to? For the first seven years the Crown Estate Commissioners, who are the landlords, took the view that the industry should assert itself and see whether it was profitable, and the commissioners took no rent other than a peppercorn rent. That seven years came to an end at the end of the year before last. There is now a graduated scale of rents which in effect amounts to a turnover imposition of about 1.25 per cent. There are various reliefs for new entrants to the profession, for fish farmers in the isles and for fish farmers who produce less than 75 tonnes a year. Above all, that price is pegged to the Billingsgate price of fish. I should like any other farmer or landlord to consider whether they know of any other instance where tenants' rents are pegged to the price of the product which they produce. So I would suggest to your Lordships that that is a reasonably fair way of doing it.
There is the other side of the coin, and several noble Lords have touched on it. You cannot have these fish farms without having the cages which upset people. Some of them believe, rightly or wrongly, genuinely or not, that they interfere with the scenic beauty of the loch in which they are placed. You cannot have a fish farm without there being a risk of pollution and disease; and you cannot have a fish farm without considerable activity, as these cages are serviced.
Considerable thought has to be given as to where they should be sited and in what quantity. The noble Viscount, Lord Massereene and Ferrard, said he thought that the commissioners had been rather generous with the granting of licences in the early days. Perhaps they were. So little was known about the industry scientifically that it was perhaps a question then of accepting the people who came along and giving them a lease.
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That has now all changed. There is a great deal of scientific work going on at various government establishments and also at the University of Stirling. The Crown Estate Commissioners, who are now obtaining a rent from their farms, are contributing to this research to the tune of £100,000 a year, and last year we introduced a consultation procedure which means that any body or any organisation that wishes to institute a fish farm has to consult no fewer than 30 organisations and individuals from local landowners to the local authority. That is then considered by the commissioners before they will give a licence.
I should like to have debated the legalities of this with my noble friend Lord Selkirk but I fear that time has run out. I can continue by correspondence if he would like, but I assure him that in all we are doing we are within the law and we have the best advice.
I should like to have talked about the estate of Glenlivet, to which my noble friend Lord Stodart referred, where we are making an exciting series of innovations which I hope will provide alternative sources of income for very hard-pressed farmers, but again time does not permit. What I would say is that the Crown Estate Commissioners are very mindful of their responsibilities, and I hope that your Lordships will see that, particularly in relation to fish farming, the industry, which is now a big one, is looked after carefully and with every regard for the public good.
4.50 p.m.
Lord Mackie of Benshie: My Lords, if the Crown Estate Commissioners do as well out of rents as they do out of the time allotted, they will make a good profit. I do not think they would be doing quite as well if they still had to pay for the Navy, so perhaps they have not done as well as they think. But I must say that they appear to be playing the traditional role of the landlord, if I may say so to the noble Earl, letting something ripen off before you proceed to tar it. One-and-a-quarter per cent. on 50,000 tonnes of fish would appear to me to be a reasonable rent to get, and I hope and trust that they will use it to encourage the industry through the stiff times which are bound to come with the expansion of production.
I should like first of all, as everyone else has done, and rightly so, to congratulate the noble Earl, Lord Perth, on allowing us all to talk about exactly what we wished, which is very good for the width of debate. In Scotland we have more land. sea and air per person than anywhere else in the United Kingdom and we have to make the most of it. As has been said by my noble friend and others, people are the most important thing in our countryside, particularly in the Highlands. Without the people it does not matter how attractive the scenery looks. The Highlands are also for the immense numbers in urban communities.
Tourism is one of the main planks in the development of our land. The old plea must be made to the Minister—for whom I have high regard, if flattery will get me anywhere—to release the Scottish Tourist Board, in common with the Highlands Board, to advertise on its own. Specialised advertising to come to Scotland is important. It has

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been wrong to keep it for years in the hands of the British Tourist Board, good enough job though it does. I would plead with him to use his common sense—of which he has an abundant quantity—to reverse this rather ridiculous scene that we have been putting up with for a long time.
Tourism is one of the biggest sources of money and income, seasonal though it may be, that we can hope for in Scotland, and we should direct more attention to Europe. We are enormously popular with a lot of people in Germany and in other countries, but particularly in Germany. More of our attention should be devoted to Europe, at least as much as we devote to North America, where they are no longer as rich as we used to think they were. That is one aspect of our land, sea and air that we can still develop a great deal further.
As the noble Lord, Lord Stodart, said agriculture must remain one of the main planks of the economy of Scotland, and it has to be integrated with forestry. The Government and the Minister might turn their attention to stopping this extraordinary obsession with privatisation. It appears to me like the story of the recruit who was being advised by an old sweat when he joined the Army: if something moves, salute it; if something is still, whitewash it. It appears to be the motto of this Government to privatise anything and then sell it, and it really does not apply.
We have the case of the private forestry companies. There is nothing wrong with Terry Wogan, who seems to be quoted the whole time, investing his money in forestry. It may be a good thing. But it is totally remote. It is done by another company in order to make money for it. The motivation is not to grow trees for profit. People are perfectly prepared in many cases to accept the 1 per cent. for the tax advantages, inheritance taxes and other advantages that they get. That is not a good motivation for forestry. It is not a good motivation for integration.
The Government of course are losing money because of it. They are not receiving the taxes which they might well spend on restoring the Forestry Commission to its position of being the main planter. Its directions as to planning and to the mixing of pine with larch, and the way it has done it recently, have been excellent, and it should be released from the restrictions under which it is at present because of the policy of the Government.
The noble Lord, Lord Goold, made a good point when he said that a lot more people could live in the country and contribute to it if we would give more planning permissions. I do not think that we should relax any of the planning restrictions. In other words, people should certainly not be allowed to despoil the countryside, but good buildings and good houses could be built in the Highlands and in other parts of the countryside to the great enjoyment of the people and to the benefit of the countryside itself. The Government have made certain motions in this direction, and they should make a great deal more. That in itself would help our country.
When we come to agriculture again the noble Lord, Lord Stodart of Leaston, said a true thing, and that is that we should develop what is good in our present product. Certainly we can grow good malting
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barley, but we can also grow excellent sheep. The noble Baroness, Lady Elliot, if I may say so, has mentioned the subject before (and quite rightly too) but we should market lamb far better. The Danes changed the breakfast habits of this country in past years, and we could sell a lot of good lamb into Germany if we set about marketing it there.
The people who eat the most lamb are the French at the present time, but there are immensely prosperous areas where we could persuade them to buy more sheep and better sheep. They could be better marketed, and we could avoid the undoubted overproduction that we may well run into. I shall not take up any more time. It is an enormous subject. I trust that the Government will look at it with great good sense—which I would find unusual, but I live in hope.
5.57 p.m.
Lord Carmichael of Kelvingrove: My Lords, I think we all give due thanks to the noble Earl, Lord Perth, for raising this subject. As the noble Lord, Lord Mackie of Benshie, has just said, it gave us the opportunity to speak as we wished. Listening to the debate it was interesting how it came down to one or two subjects. Perhaps I should confess that I was not sure what the noble Earl would like me to discuss when I read the Order Paper, and I had a word with him. I knew that he was concerned about certain things, but I felt that the debate may have gone rather wider.
I looked up one or two facts about Scotland. It is not a line I am going to take now other than to introduce it briefly in the hope that at some time we can have a debate on the fundamental point of Scottish land ownership. When one looks at the statistics carefully you find that Scotland has the most concentrated pattern of private ownership in Europe. Seventy-five per cent. of all privately-owned land in Scotland is held in estates of 1,000 acres or more, and something like one-third of the land in Scotland is held in estates of 20,000 acres or more. In many ways that is the kind of debate I thought we would be having today. However, there is something about this place that makes it rather more difficult to get involved in these problems.
I reflected on the fact that of all those who have spoken only the noble Lord, Lord Taylor of Gryfe, and my noble friend Lord Hughes are not fairly substantial landowners. I am certainly Scottish enough. In the 25 years that I have been coming up and down to London I have spent only half a dozen weekends here and three of them were when Scotland was playing England at Wembley. We won two of those games. I go back to Scotland every weekend.
Virtually every noble Lord mentioned the question of transport. The noble Earl, Lord Perth, who opened the debate, made a number of points. Compared with many of my colleagues, I have always had a peculiar attitude to transport in Scotland, perhaps because I was a junior transport Minister and had an interest in the subject. I went into it fairly fully. It was self-defence in a way against my colleagues from Scotland because I was in a United Kingdom ministry. If in Scotland we had adopted the

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criteria used in England for deciding whether a road should be a dual carriageway, a three-lane road or a motorway, there would have been only one fairly short stretch of three-lane carriageway in Scotland; and that, if I remember correctly, was the road from Glasgow to the airport at Abbotsinch. As nearly all of us are Scots we should combine together and get rid of some of our problems.
I have no doubt that many of our roads need to be improved, but by and large they are uncongested, as English people tell me when they come up to Scotland. The traffic is not nearly so dense. That does not mean that we should not be looking at the A.74–M.74 with a view to upgrading it. However, when a road is upgraded to motorway standard another road must be provided for those people who cannot use the motorway—the cyclists, local people on short journeys and so on. It is an expensive business.
I think a great deal could be done with the M.74 by having junctions and flyovers instead of the crossroads we have at the moment. I agree with those noble Lords who spoke about the Stranraer road. That needs to be upgraded particularly because of the heavy traffic that uses the land route to the ferry to Ireland. However, if I were in charge of the Scottish budget I do not think that I would spend a great deal more on roads. There are other ways that I would spend the money.
Several noble Lords referred to the air fare to London. British Airways has now been privatised and with competition the fares should come crashing down. That is the theory at least. We all look forward to that day. On the question of direct links to Scotland, I want direct links as well but we have to make up our minds. We have to decide between Prestwick, Glasgow and Edinburgh. I remember as a very young boy—and I have been trying to discover whether I was dreaming—the suggestion in the 1930s that a new airport should be built in Shotts. It was going to be flooded because no one thought that an aeroplane could travel across the sea. There were going to be sea planes. That opportunity has gone. We have to accept that we must decide between Prestwick, Glasgow and Edinburgh. Prestwick now has more than 4 million passengers a year and so we must think seriously about extending the Glasgow runway.
There has been a great deal of discussion about the Scottish economy and especially the economy north of the central belt. We all empathise with the problems of the area. There was slight confusion between the noble Viscount, Lord Thurso, who thought that we were overdoing the emphasis on tourism—and I sympathise with his view that we sometimes think it will solve all the problems—and the noble Lord, Lord Mackie of Benshie, who thought that we should encourage it even more. There probably is a line down the middle.
This confusion illustrated the fact that we had an idea and then for a period the whole salvation of Scotland was thought to lie with tourism. Today the idea is fish farming. I would not decry it, and I know the importance of it, but are we not putting too much
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emphasis on the idea? Many noble Lords have pointed to the importance of fish farming. I had a great deal of sympathy with the noble Lady, Lady Saltoun, who apologetically—I do not know why—raised a number of small points. She referred to cashmere, growing her own vegetables, honey and so on. It was slightly refreshing to hear her when the other matters being discussed were fish farming and so on.
It has been an interesting debate, which should be read with some care. I have one minor suggestion which I ask the Minister to take back to his friends in government and in particular the Chancellor of the Exchequer. We could create a certain amount of social mobility in Scotland by getting rid of the tolls on the bridges. That is a small point in a debate of this kind. Perhaps I should say that I believed originally that tolls on bridges were necessary. If the Scottish roads programme was distorted at one point it was because a great deal of money was spent on building bridges, some of which are now socially highly desirable but would not have been high on the list of priorities.
The total indebtedness of the Erskine bridge, which I use frequently, is about £80 million. The total income from the bridge is £1·4 million. The charges are growing every year. Such a move would be of great advantage because 4·6 million people crossed the bridge in 1986–87. I never saw them doing it and most people I know see very few people on the Erskine bridge. It is a small point but it would be of great help psychologically if we could get rid of the tolls. I should like to thank everyone who has taken part in the debate and in particular the noble Earl for initiating it.
5.8 p.m.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, I should like first of all to join other noble Lords in thanking the noble Earl, Lord Perth, for initiating a wideranging and constructive debate. I am perhaps the only person who cannot choose what I am going to speak about. I have to try to pick up the points that have been made during this valuable debate. I would say to my noble friend Lady Elliot and to the noble Earl, Lord Perth, that a Scottish debate is a good thing to have in this House and that from the wideranging subject matter we on the Government Front Bench have learnt a great deal about what concerns noble Lords.
Perhaps I may begin by referring to Oceanspan, which was mentioned by the noble Earl, Lord Perth. I read the speech he made in this House on 16th July 1970 and was most interested that he should return to the subject today. Incidentally, I noted that he praised the work of the Scottish Council for Development and Industry in attracting industry to come to Scotland and called it "bringing back the haggis". I think that it is an appropriate phrase to be used this week in this debate.
The Oceanspan concept was, of course, prompted in the early 1970s by the Scottish Council advocating the development of major port facilities on the Clyde, using the deep water at Hunterston. I fear that it never caught on with shipping lines, port authorities

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or other developers, nor did a similar idea floated in 1986 to exploit the opportunities presented by the Channel Tunnel, called Euro Westport. That was a similar development using the Clyde for trans-shipment to and from Continental destinations.
A feasibility study by the Clyde Port Authority was assisted by the Government last year, and the main conclusions were that the reductions in steaming time would not be enough to reduce the number of ships required by the major shipping lines to serve the Atlantic groups, based on the typical weekly service now operated. But even if a vessel could be saved, increased land transport costs would still far outweigh the savings resulting from the saving on vessels—about £6 million savings against £140 million additional costs. And there would be no significant savings in total transit times, and therefore no speedier delivery compared with other European "hub" ports.
It was a very thorough study and I should like to assure the noble Earl that this was gone into very carefully last year, hut. in the face of such evidence, the Government could not support, much less undertake, what seemed to be a development for which there would in the present circumstances be little or no demand.
A lot of the discussion this afternoon has turned on the question of transport, and I am not greatly surprised. However, I am a little surprised at what might be considered to be the less than fair comments of the noble Earl, Lord Perth, and my noble friend Lord Selkirk about what this Government have done in regard to roads. Since May 1979, the Government have spent almost £690 million in new construction and improvement of motorways and trunk roads in Scotland; 3,130 kilometres of trunk road, including motorways, have been built in Scotland in that period.
Trunk roads are the strategic national through-routes. The need for them is determined by a number of factors, including the requirements of national planning and industry. Here I come to the point made by the noble Lord, Lord Carmichael. With his experience in another place of this matter, I am very grateful for what he said. The considerations in deciding on these roads are common to both England and Scotland. There is no difference in the criteria used in Scotland and England to determine the standard of trunk road required; that is, single or dual carriageway, or motorway, and also quality of the road surface.
Moreover, it may interest the noble Earl to know that for every thousand of the population, Scotland has almost three times the length of trunk roads as England. Of course roads and distances are extremely important for Scotland and expenditure on trunk roads in Scotland is substantial. That is borne out by the large number of by-passes and improvements completed in the last eight years.
During the period, 88 major schemes, each costing over £1 million, have been opened to traffic. At present over 100 major schemes are in various stages of contruction or planning, costing a total of over £700 million. This includes the uprating of the A.74 route to motorway standard, which represents 60
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miles at a cost which is estimated to be well over £200 million. Obviously, I will relay the message of the noble Lord, Lord Carmichael, about tolls to my right honourable friend the Chancellor of the Exchequer. Of course, matters of that sort are very much in his domain and not in mine, but I take note of what the noble Lord said. I believe that, from the figures which I have given, it is clear that the Government treat the improvement of road communication within Scotland extremely seriously and will continue to encourage such improvements and carry them through.
I should like to speak about one other matter in regard to roads. The noble Lady, Lady Saltoun, mentioned the A.73 Perth to Glenshee road and, with my responsibilities for tourism—
Lady Saltoun of Abernethy: The A.93.
Lord Sanderson of Bowden: My Lords, I am so sorry. I know the problems of that road and she put her finger on the problem of the Tayside region in that connection.
I should now like to refer to rail travel in Scotland. I know that many of your Lordships have varying views on the advisability of constructing a Channel tunnel. The noble Lord, Lord Ferrier, has made that very clear to me but I have to say that I disagree with him. Also, my noble friend Lord Stodart mentioned rail travel. I have to say that Scotrail has embarked on an investment programme for Sprinters, a major part of which was announced last weeek, costing £17 million. I hope that by general pressure from members of the public we are going to achieve a much more efficient rail service in Scotland. I feel that the remarks of many of your Lordships were very apposite.
The noble Earl mentioned ports, and there is no question that the Government have any plan to change the operation of the National Dock Labour Scheme. But I have to say to noble Lords that the increase in business in the ports of Scotland as a proportion of the British traffic in ports has gone from 10 per cent. in 1965 to 28 per cent. in 1986. The ports operate in competition with each other with the minimum of government regulation. Any spare capacity is mainly the result of market forces, together with the effect of changes in ship design, ship technology and patterns of trade.
I will give your Lordships some figures. There has been new investment in the port of Aberdeen of £8 million, in Ayr of £2 million, in Dundee of £3 million and in the Forth ports of £9 million. All these are scheme ports. Investment has also taken place, and is taking place, in non-scheme ports such as Peterhead and in the Cromarty Firth area. There have been other developments quite apart from the extremely valuable business attributed to the fishing industry. Mention was made of the fishing industry—not the fish farming industry—and I have to assure noble Lords that the sea fishing industry is in good heart.
To ensure that the ports will continue to prosper, the Government have taken various initiatives such as the reform of the administration of marine pilotage so that ports will assume control. They have

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also invited the industry, without any commitment on future legislation, to consider what advantages there might be in the introduction of equity capital to those ports which are not already owned by companies. They are pressing through the European Commission for greater transparency in the accounts of the European ports, in order that the extent of state and municipal subsidy can be revealed.
Many noble Lords mentioned the tourist industry, and I was very pleased that that happened. I was particularly gratified by the remarks of my noble friend Lord Stodart of Leaston, who considered that the tourist industry in Scotland, particularly the Scottish Tourist Board, was doing a good job. Your Lordships will like to know that a committee has been set up under my chairmanship to co-ordinate all the groups involved in tourism in Scotland—the Highlands and Islands Development Board, the Scottish Development Agency, the Scottish Tourist Board and the British Tourist Authority. The point was well made by the noble Lord, Lord Mackie of Benshie, about selling Scotland, particularly abroad. I take that very much to heart. I hope that, with the investment of over £20 million of taxpayers' money in tourism in Scotland in the coming year, we shall be able to ensure not only that last year's excellent figures are maintained, but that they will be increased.
Remarks were made on the subject of air fares from London to Edinburgh and Glasgow. I cannot comment very much on that at the moment, although I also feel that £144, as it now is—and about to go up, I believe—is a very steep fare to pay.
In connection with tourism, we are looking at the on-costs that have to be paid by visitors from foreign countries in taking them from London to Edinburgh or Glasgow. This is going ahead at the moment and we will make representations to the air companies.
I should not like to enter into any discussion on the Prestwick issue with the noble Lord, Lord Carmichael, at this stage. He knows, as I do, that in 1989 there will be a review, but what he said is very much noted. So far as direct flights into Scotland are concerned, Wardair and Air Canada from Canada, and North-West Orient from the United States, are very good carriers and I am sure that British Airways takes note of their competition.
I shall now talk about forestry. I was gratified by the remarks of noble Lords and the noble Lady, Lady Saltoun, about what the Government have done about forestry and conservation problems in Caithness and Sutherland. I hesitate to use the words "Flow Country", but I am assured by the Highland Regional Council Working Group that it will define what the words "Flow Country" mean when its report comes out. I am looking forward to reading it.
A parliamentary Answer which was given last Monday, 25th January, in another place provided the framework within which the Government believe an appropriate balance between the needs of conservation and other land uses, especially forestry in Caithness and Sutherland, can be achieved. I agree with the noble Viscount, Lord Thurso about the fragile economy in Caithness and Sutherland and in
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other areas in the Highlands and Islands. The Government recognise that much of Caithness and Sutherland is of national and international importance for conservation. The appropriate areas will need to be safeguarded, including the most important bog systems and bird habitats, and expecially what has come to be known as the real "flows".
Having been in Inverness on Monday, I am gratified to know that there is now a consensus among the Highland Regional Council, the Highlands and Islands Development Board, the Crofters Commission and the chairman of the Nature Conservancy Council that the way the Government have acted in relation to the balance between forestry and conservation in the area will prove to be correct. But of course we await the final report from the Highland Regional Council Working Group. I should like to thank it publicly for the work that it has done. Not many words are said in praise of local government. The Government are truly grateful for the work that the working group has done.
As to whether it is viable to plant trees in Caithness and Sutherland, I am sure the noble Viscount, Lord Thurso, is better qualified than I on the subject. However, from what I hear, I am sure that the charge that forestry is unviable in Caithness and Sutherland per se is not valid. The productivity of forest crops in the area compares favourably with most other upland sites in Britain. Many sites in the area are capable of producing a real rate of return on investment close to the Forestry Commission's target of 3 per cent. Forestry makes a considerable contribution to the local economy, and that is why the results of the Government's deliberations, published on Monday, came out as they did.
I should also like to say to the noble Viscount that the Forestry Commission has received applications, which I know will be coming forward to Ministers. But, as your Lordships know, the Nature Conservancy Council would not discuss the various applications at RACs until government policy as to what was to happen in the area was announced. There has been a hold-up, but I hope that we shall soon be receiving applications from the Forestry Commission, as well as from private forestry through the Forestry Commission. I hope noble Lords understand what I mean. We shall move forward with the applications as they come in. Does that answer the noble Viscount's question?
Viscount Thurso: My Lords, I think that the Minister has mixed me up with the noble Lord, Lord Taylor of Gryfe, on the question of viability. I did not touch upon that point.
Lord Sanderson of Bowden: My Lords, I believe that the noble Viscount mentioned Forestry Commission applications in his area. I think that those applications will be coming forward soon.
As regards the general point on forestry and the Government's attitude to it, I can assure the noble Lord, Lord Taylor of Gryfe, that forestry is a major industry in Scotland, where the bulk of new planting takes place. The Government are conscious of their target of 33,000 hectares a year. I understand the

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views expressed by some noble Lords about taxation, but that is a matter which can be considered by the Chancellor of the Exchequer.
I hope that the farm woodlands scheme will prove attractive to farmers in certain parts of the country. I anticipate that more planting than hitherto will take place on land of better quality. However, new planting will also continue to take place in the upland areas.
I move on now to agriculture. I shall again mention what the noble Viscount, Lord Thurso, said about the fragile nature of some parts of the country. I draw your Lordships' attention to the plan of the Highlands and Islands Development Board for the North-West Sutherland area, where in an ADP-type operation it will spend £100,000 on a development programme for that area to start on the 1st June this year. That proves to your Lordships that the Government take seriously the fragile areas. We shall include in that programme help for fish farming, fish processing and tourism, as well as the agriculture of the area. The Government are trying very hard to identify the fragile areas, and of course the islands have been covered by the ADP scheme.
My noble friend Lady Elliot asked about the rating position with regard to farm buildings. I have to say that if a change is made to a rateable use, rates would become payable. That is not unfair, since it would be unreasonable if, simply because an enterprise was located on a farm, it was exempt from rates whereas a comparable enterprise which was not on a farm and with which it might be in competition had to pay rates. In so far as they remain, rates are rightly related to use rather than to location.
My noble friend Lord Goold mentioned the matter of surplus agricultural land. I have to say to him that it is a complex subject and I should like to write to him about it.
I move quickly to the subject offish farming, which has been admirably covered by many noble Lords, especially my noble friend Lord Mansfield. The Government recognise the value offish farming. The figures which have been given by my noble friend Lord Mansfield tie in with what the Government believe to be the case.
As regards the immediate future, the signs are that the industry will have the capacity further to increase production. I wish the industry well. With my responsibility for fisheries I understand the problems that exist with disease and so forth. However, it is an industry which can do much for the fragile areas. I should like to say to the noble Lord, Lord Grimond, that I think it is the answer to many problems, especially in regard to the Islands of Shetland. The record of the Shetland islanders and the small businessmen who started fish farming from nothing in 1983 and who are expected to finish with a turnover of £12 million this year, is a remarkable achievement. They ought to be congratulated.
The Earl of Perth: My Lords, I should like to thank all those who took part in this splendid debate. I beg to move that the papers go back to wherever may be appropriate. My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Charities: Supervision
5.28 p.m.
Lord Allen of Abbeydale Lord Allen of Abbeydale rose to call attention to the report of Sir Philip Woodfield and his team on the supervision of charities; and to move for Papers.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper.
I should like to begin by thanking those who put down their names to speak in this debate. I had hoped to be able to welcome the noble Earl, Lord Ferrers, in his new capacity in a debate which happily has no party political controversy. But, no doubt, he will join us shortly.
This is also the occasion to note the appointment of Mr. Robin Guthrie as Chief Charity Commissioner and also to pay tribute to what Mr. Denis Peach has achieved during his period of office. The Times, in discussing Mr. Guthrie's appointment, referred to his predecessors as "grey civil servants". Anyone who knows Mr. Peach is aware that this description of him at any rate could hardly be less appropriate.
We have had debates on this topic in the past in which some of us have ventured to suggest that the Government were not doing quite as much as they should. This time, things are different. In a debate here on 28th January last year the noble Earl, Lord Caithness, announced the setting up of a scrutiny team headed by Sir Philip Woodfield. Here we are a year later with not only the report of that scrutiny but also with an announcement by the Home Secretary last week in another place of the decisions taken on that report. If only that could happen more often.
The Home Secretary's Statement welcomed the conclusions of the scrutiny team, and they did a remarkable job. The Statement explained that some of the recommendations governing the procedures and internal management of the commission were already being put into effect, and a press statement added that a top management team or top management board had been established and that adjustments of staff had increased the numbers available for investigation work. However, more than half the 46 Woodfield recommendations involve legislation and further examination of some of them, such as the future of the doctrine of cy-près, could add to that number. So it was good that the Statement went on to say that it was hoped to legislate later in the life of this Parliament.
I know that the Home Secretary is well aware that when we get to a Bill it is likely to cover a rather wider field than that traversed by Woodfield. Perhaps I may take this opportunity of saying that as legislation is clearly some way off, the Government might wish to consider issuing a White Paper, in due course, giving the possible matters to be covered by any forthcoming Bill. But—as the noble Earl, Lord Ferrers, knows, there is always a "but"—welcome though the Home Secretary's announcement is, it leaves quite a large number of questions unanswered. For example, to pick out just a few points on what can be achieved without legislation, is it intended to appoint two non-executive part-time commissioners? Has a project manager been appointed? Can a graded

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system for the submission of accounts be introduced under existing powers? Is the Charity Commission busily re-writing its leaflets in terms which we can all understand? Is anything being done about the register of charities which is still uncomputerised, still cluttered up, and to put it mildly is still incomplete and out of date?
In addition to problems of equipment—and these problems involve considerable sums of money—what is contemplated about staff? Over a 10-year period, the number of charities has gone up by about a quarter, whereas the size of the commission's staff has gone down by nearly a tenth. The Woodfield Report suggests that the full implementation of the proposals in it would not involve more staff; but I think that this assumes the abolition of the official custodian, a difficult issue on which I shall be touching shortly.
The trouble is that clearly we are some way away from legislation and I cannot quite see how the Charity Commissioners can do what is now expected of them in the interim period without some strengthening, in particular, of the managerial grades. This is a very important issue on which I hope the noble Earl Lord Ferrers, will be able to enlighten us. Perhaps in doing so, he could tell us whether it has been possible to devote adequate resources to enable the Charity Commission to work with the Inland Revenue, now that the Inland Revenue is authorised to disclose information to the commission, if it smells the possibility of fraud.
Turning now for a moment to the recommendations involving legislation, a good many are not very controversial, in particular those intended to give the commission more effective powers of control and those dealing with malpractices. However, it will be necessary to watch that increased controls do not degenerate into excessive detailed meddling from the centre. But some of the recommendations are not so straightforward, and I should like to pick out just three. The first is the proposal to repeal the provisions requiring charities to obtain the commission's consent before acquiring or disposing of land. Regrettably, dealing in real property is especially liable to mismanagement or breach of trust, and certainly in the past this requirement to go to the commission has saved charities large sums of money and has avoided some inadvertent breaches of the law.
It may be right to depend more on the competence of trustees, if this means that staff can be diverted to even more pressing needs. But I think we should want to see just what safeguards were proposed and what steps would be taken to guide charity trustees, not all of whom are particularly well qualified to deal in real estate.
The second point is the one that I have just touched on earlier and it is rather more difficult. The Woodfield Report proposes in its opening passages that the official custodian for charities should be abolished, although the more detailed discussion later in the report seems to me to resile somewhat from this absolute conclusion. The official custodian,
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whose services are computerised, has hitherto been available as a "corporation sole" (whatever that might mean) to hold charities' real property and Stock Exchange investments and to obtain payment of their dividends gross. I have had more letters about the suggested withdrawal of this facility (and the official custodian is already refusing to take on new customers) than on any other topic. It is an exceedingly complicated matter, and I think I must content myself with expressing the hope that a service of some kind could be retained for at any rate the smaller charities. I imagine that is a hope which the Inland Revenue might share, given the avalanche of claims for repayment of tax which could otherwise engulf them.
The third point is the recommendation that there should be a charge for the first registration of a charity and for any residual services for property transactions and the work of the official custodian. There is certainly a case for the last two; but I confess that I feel pretty dubious about the first. The sums raised would on any practical basis be quite inconsiderable, and given the traditional objections to hypothecation, the commission would be unlikely to be allowed to keep the money for themselves. It is a solution to raising funds which is rather less attractive than it might appear at first sight.
There are one or two Woodfield recommendations about which I feel something falling rather short of enthusiasm. I am not completely persuaded, for example, by the objections to setting up some kind of suitors' fund to enable test cases to be taken to the courts on the analogy, as I recall, of the race and sex discrimination legislation. There has been a remarkable paucity of decisions by the courts in recent years about the objects which may be legitimately pursued by charities, although I am bound to add the comment that the one case that I am aware of which is before the courts seems to have been there for a very long time and seems likely to remain there for a long time to come.
There are one or two gaps to be thought about as well such as the restrictions on TV advertising by charities. It would also be interesting to know what the Government's thinking is about tightening up controls in Scotland where the writ of the Charity Commission does not run. But my real difficulty is that it is not possible to do justice to so complicated and wide-ranging a topic in 15 minutes.
But that the topic is important is undeniable. Some 4,000 new charities register each year. Charitable trustees handle other people's money to the tune of £10 billion a year and more. They hold assets calculated at some £2·5 billion and they receive a similar figure each year from central and local government by way of grants, fees and fiscal privileges. Therefore it is not surprising that there are those who use fraudulent means to get after some of that money. Although the scale of misdoing is easily exaggerated, the public is entitled to believe that there are safeguards against misuse both in fund-raising and in actually running charities. There is, I fear, a pretty widespread ignorance of how limited at present are the powers and resources of those in authority.
All of us who welcome increased giving, and appreciate the fiscal concessions which this Government have made to this end, are equally anxious that the money raised for charity should be properly used for its proper purpose. We welcome the shift from advisory to supervisory action which the Woodfield package of reforms involves.
I end as I began by welcoming what the Government have done so far and by expressing the hope that this evening and as the weeks go by we shall see some of the fine print which will indicate just how the Government propose to implement the welcome which they have given to the Woodfield recommendations in general terms. If I may say so, they will not be lacking in questions asking how they are getting on. My Lords, I beg to move for Papers.
5.43 p.m.
Lord Wolfson: My Lords, I am grateful to the noble Lord, Lord Allen of Abbeydale, for initiating this very useful debate and for giving us the benefit of his expert views to which I have listened carefully.
As this is a short debate I should like to speak briefly as one who has been engaged in the work of charitable trusts and related activities for many years. As a result of that experience I welcome the proposals contained in the well-reasoned and comprehensive report of Sir Philip Woodfield and his colleagues. Their recommendations strike the right balance—a skilful blend of tightening up where it is needed while maintaining flexibility with minimum bureaucratic cost so that trustees can operate in accordance with the wishes of the donors.
A vital role of private charities is to act as a catalyst by investing in people, in new ideas and in facilities. Perhaps the best known example of that was the modest grant made by the Rockefeller Foundation in the late 1930s which enabled Professors Florey and Chain successfully to complete their work on penicillin. Thus it is important to maintain both effective safeguards for donors and freedom for trustees and others to back innovative research work. This I believe the report has implicitly recognised.
There are current features which need attention in order to improve the performance of the charitable sector. In paragraph 2 of the summary, the report refers to some of the matters in question. It contrasts areas of strength and weakness and further on indicates the wide differentials that exist in administrative and overhead costs. The report also states that the Charity Commission's records are not computerised and recommends that they should be. That is a clear priority.
As a result of having an updated computer data bank the Charity Commission could then publish its own guidelines to charitable organisations advising them of average and best cost performance, cash flow and other relevant financial information.
The proposed management board and projects manager should monitor the outcome in terms of subsequent performance. They might also consider recommending cost-sharing between charitable bodies in appropriate cases where similar projects are involved. Paragraph 36 of the report refers to the
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possibility of the commission making staff exchanges with charitable organisations. That again is a useful suggestion.
There is also a need for recipients to have a more businesslike approach in obtaining better values for purchases of supplies, services, buildings and equipment. As has been mentioned on previous occasions, I should like to see a stronger measure of central buying, instituted on commercial lines, to ensure that that happens. I have had a number of experiences of meaningful savings having been secured as a result of such negotiations. In all cases, of course, specifications have to be laid down so that quality standards are maintained. Clearly cost savings on one project can help to make up a financial shortfall in others.
Charitable work as defined in law requires the essential combination of a good heart allied to a good head and integrity of purpose. Thus it is clearly incumbent upon fund raisers and trustees to operate efficiently and economically to ensure that the funds donated are employed for the purposes intended and to use their best endeavours to see that they are. Public bodies also have the same duty for they are the major providers of funds to the whole area designated in law as charitable. Both the interests of the recipient bodies and of the taxpayer need to be respected.
Pluralistic sources of finance are more helpful than sole reliance on the state, vitally important as is its contribution. Indeed, academic, cultural and medical independence as well as relief work must benefit from having an alternative or partnership approach to funding requirements.
The private charity sector, which the report states has an annual turnover of over £10 billion which represents some 2·5 per cent. of GNP, will continue to grow. All governments have encouraged that process and this Government in particular. In order to sustain the growing momentum of a well conducted charitable sector it is fundamental to stamp out malpractices by strengthening the requisite ground rules to give donors the maximum confidence.
The report's recommendations would reinforce the present law as would the publication by the Charity Commission of carefully drawn guidelines for administrative and overhead cost control together with a wider dissemination of relevant information. Central buying methods in the areas I have indicated would enable better values to be achieved to the benefit of all concerned.
Taken together these factors would raise standards all round. In the current national debate on funding and its application well-organised individual charities have an important role to play in helping to provide the additional resources for the many urgent purposes we all wish to see carried out. I am therefore confident that the Government and all sides of your Lordships' House will continue to give sympathetic support to their endeavours.
5.50 p.m.
Lord Houghton of Sowerby: My Lords, it is very pleasant on this occasion to have a few nice things to

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say. This is the third short debate on charities in which I have spoken. We are much more forward today than we were this time last year. We must be grateful indeed, not only to the Minister who inspired the appointment of Sir Philip Woodfield to conduct his investigation, but also to Sir Philip and his team for the speedy job and excellent work which they have done. It was a pity that he was given such a tight timetable. Something like 13 weeks for such a job seems to me to be a very good day's work for anyone to get through. However, we reap the benefit of that because the report before us is extremely valuable as a basis for this evening's debate.
The noble Lord, Lord Allen of Abbeydale, is far too modest to claim that it was probably his diligence on those occasions that has speeded up the work that the Government set on foot. I am sure that that diligence has encouraged the Government to bring forward the investigation and the report which is before us.
It is a good idea to leave aside for the time being the complex question of what a charity is. Had any committee in the last 12 months become involved in that question, it would still be doing its work. I think that in politics, charities and other contentious matters, such questions are best left aside until administration is more efficient and much more effective, and until the Charity Commission is in better shape to discharge the tasks not only which it has in hand already but also those which will lie ahead.
The Charity Commission has been long neglected. It is a great shame that, through lack of staff and resources, it has become so ineffective in many of the duties which it could have undertaken. The noble Lord, Lord Allen, has pointed out that the work of the commission has increased, and the number of staff has gone down; the result is that a great deal of its work has been neglected.
We should all distinguish between the two main groups of charities—the collecting societies and the charitable trusts. I believe that the Government should now embark on some form of communication to all charities, and especially to the collecting societies, and tell them what the Woodfield report is recommending, indicating the matters that the Government have under consideration, and giving them encouragement to do their own work in making their administration, accounting and efficiency more satisfactory. We want the charities to do as much as they can to make themselves fit for their jobs and prepared for greater responsibilities when they come.
As regards the next group of questions, those lie in the hands of the Charity Commission and without primary legislation they could embark upon those if only they had the resources to do so. I hope that it will be indicated what the Charity Commissioners are being prepared to undertake in the period between now and legislation.
As regards legislation itself, surely the vague reference to the length of this Parliament— "sometime in this Parliament"—is not good enough. Now that we have got going, let us, for goodness' sake, get on. As the noble Lord, Lord Allen, has
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pointed out, there are not many contentious questions on administrative powers, scrutiny and the rest of it. To a large extent the questions involve administration and the degree of control and supervision to be undertaken over a wide field of activities. I hope that the Government can be encouraged to get on more quickly than they suggest. I hope that the Minister, whom we welcome to the Front Bench, will be able to give us better news about the prospect of earlier legislation.
The keynote of all collecting societies should be accountability. I want to see that more than anything else. They should be accountable to their members if they are member societies, to their subscribers and supporters in any case, and to the public. They are collecting public money and they are spending public money in their noble causes. Plainly there is a wide public interest in all that they are doing.
In addition, we shall need a much more powerful commission than some of us envisaged to carry out the supervisory and regulatory functions that I think should be entrusted to it. We want something very close to the Building Societies Commission, which will have oversight over diverse activities of numerous bodies, all engaged in similar tasks but having a common obligation to the public interest and public affairs.
The noble Lord, Lord Allen, referred to appeals being made by broadcasts on television. There is mention in the report of the nature of fund-raising appeals. I am deeply concerned at the prospect that charities may go into the advertising slots of television. I invite noble Lords, if they are able to get a copy, to look at the report written by Diana Leat in December 1986 for the Central Appeals Advisory Committee. That report was produced under the auspices of the Joseph Rowntree Memorial Trust with which Mr. Guthrie, who is to be the new chief charity commissioner, has been associated.
If charities want to become whiter than white, they must steer clear of the subtleties and techniques of detergent advertising. They must realise what dangerous people ad-men are. We must realise that when politicians consult them, they must have something that nobody else has. We see that something on television, and not only in advertising. I should like to ask a few pertinent questions on that matter. How are we to be sure that the pictures we see are authentic or are we to have studio models of deprivation, child abuse, neglect and poverty? Are they to be portrayed in television advertising? Will they be real?
Indeed, in the Leat Report, it is said that one of the most successful broadcast appeals for public money for charitable purposes was one which allegedly was not true. That is an important aspect of the future opportunity and future danger. There is a special danger in the emotional presentation of children. There have been more appeals this Christmas than I can remember and there is a multiplication of organisations looking after children. It is time that there was some regulation regarding appeals made on television and it should be undertaken by the television authorities themselves.
While all these matters are being surveyed and gone over in longer debates than those which we have

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had so far, I believe that we ought to have a closed season on further fiscal concessions to charities and on further inducements to public generosity subsidised by public money.
In the meantime we ought not to have any extension of the role of the voluntary effort in the field of statutory social services and other services which are provided by government. This division between what should be a state service and what should be left to voluntary service is a difficult line to draw. Years ago I had the job of trying to draw that line while in the Harold Wilson government. It is not an easy one. Are the charities pathfinders or are they the salvage squad? Are children's homes in the charitable field merely branches of the social services which have to provide for children in care? There are all kinds of duplication of effort and no straight line between them.
I think that we should leave charities with the benefits that they presently enjoy—they are very substantial—and not confer more upon them until the public can be better satisfied that the field of charitable work is in better order than it is now.
Finally, I should like to say a word about charitable trusts. I listened with great interest to the noble Lord, Lord Wolfson. I think that charitable trusts have an obligation to be accountable in some large measure. There is far too much secrecy about what some charitable trusts are doing. Although it may not be public money, it is in the public interest to know. I am short of time now and I must leave that point.
All in all, we are very grateful for the work that has gone into this matter so far. We hope that at the end of the debate the Minister can give encouraging news about the Government's determination to get on with the job, which is long overdue, and on which so much work has been carried out in the past 12 months as a start.
6.2 p.m.
Lord Grimond: My Lords, I congratulate the noble Lord, Lord Allen of Abbeydale, not only on another excellent speech on this subject but also on having actually achieved something. Perhaps this should not surprise us as he is a very formidable operator in the public sector. However, I congratulate him on his success so far.
It seems to me that before setting out to reform anything, one should have clearly in mind the mischief that one is trying to end and the questions that need asking. To me, one of the best features of this report is that it concentrates the mind on these matters and pinpoints certain things which need doing in the field of charities.
The salient conclusion to my min d on reading this report is that there is very great success in the charitable field and not all that much to complain about when one thinks of other fields. Of course, if a commission were set up to look into heaven it would certainly report that it had some grave defects. It would probably make suggestions that possibly another half dozen archangels and even a small distribution of gold crowns would improve matters. Given the state of the world, I think that the charities
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and the Charity Commission come out of this inquiry pretty well, especially when, as we know, the Charity Commission has had its staff reduced.
I was particularly interested in the passages in this report which deal with Scotland because, as the noble Lord, Lord Allen, has already said, Scotland has no Charity Commission. I was looking forward to seeing a comparison of the English and Scottish experience and rather expected to find that things were not at all good in Scotland. This report mentions certain aspects of the Scottish scene which in the view of the inquiry need attention. But in Scotland too there does not seem to be any widespread criticism of the present situation, nor indeed is there as much to be done as one might expect.
Unlike previous speakers, I have some slight sympathy with the Government. First of all, there are innumerable things on which one might spend money and some of them seem to need money at the present moment more than does the reform of the Charity Commission. Secondly, to my mind one of the great ills of the present time is the outpouring of legislation. I think that whenever a Bill is introduced the Government and Parliament should ask themselves very seriously whether it is really necessary. A good deal of the recommendations of the report can be, and some have been, effected without legislation. I am all in favour of that. I do not deny that legislation may be necessary, but I suggest to the Government that when they introduce it they should not go into too much detail and should not try to cover too much ground because some of the Bills that we have received lately have been practically unmanageable.
The most important points that need attention in this field are first, the register and adequate facilities and staff to examine the accounts of charities; secondly, the amount spent on administration; and thirdly, the question of fund raising. I repeat what has been said innumerable times, that this is very big business and it is all too likely that fraud will creep in. There are dangers both in administration and fund raising. Therefore, I must reiterate that the public have a complete right to know what goes on in charities in order to forestall any possibility that they may be used for evil purposes.
To those who wonder why charities, voluntary donation of money and so forth, should be subject to public examination in this way, I say that not only do they benefit from large tax remissions but they are used for the Government to some extent to channel funds into worthy causes. The voluntary societies are not entirely voluntary in that sense and if people do not like it they do not need to set up a charity.
I reiterate that I spent many years as a director of the Joseph Rowntree Social Service Trust, which, unlike the Rowntree Memorial Trust and the Rowntree Charitable Trust, is not a charity, but it does—or hopes it does—pursue and fund certain valuable experiments and interests. The original assistance to parliamentarians, and so forth, was paid by that trust and could not have been paid for by a charity. We pay our taxes and are outside the Charity Commission; and so long as we remain within our articles of association, we can do what we like. That is a perfectly good way of putting money into good

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causes if you do not like the supervision of charities. However, in the charitable field it is perfectly reasonable, and indeed necessary, that the administration should be good and should be seen to be good.
Obviously, some of the greatest successes of the charitable field have been those accomplished by the great charities—the Nuffield Foundation, the Wellcome Trust, the Wolfson Foundation, and so forth. There is a certain temptation to think that the small and peculiar charities which proliferate over the country are out of date and must be inefficient and unnecessary. I protest against that view. When I was a director of the Manchester Guardian, which has no shareholders and therefore distributes no profits, year after year we distributed to charities small sums of money—very small sums of money in some cases. The charities were mainly local ones in Manchester and Lancashire. I remember saying, "Isn't this an awful waste of time? What's the good of going through all this palaver of giving very small sums to very obscure charities?" However, on looking into the matter, I found that some of those charities did a great deal of good at very little expense. There were quite a number of people who depended on them. They considered them part of their life; not only did they get some money from them, but they were interested in them; they knew all the other beneficiaries, and so on. I should be very sorry to see those kinds of small charities either too much bureaucratised or even amalgamated.
The great controversy at the back of all this inquiry is something into which the committee could not look; that is the question of what is a charity and what is the difference between a charity and a lobby. On the whole, I think that the committee was very wise not to go into that question, and I rather agree with those who have said that this is not the moment to do it. But if it is not going to be done now, we must expect the cotroversy to continue. It will depend a great deal upon the success of the improved efficiency which will result from the Woodfield Report as to how far that controversy goes.
I hope very much that the speaker who follows me, the noble Baroness, Lady Faithfull, will return to some of the suggestions that she has made on this subject before. I am not altogether clear about some of the proposals with regard to the Charity Commission. I am not clear what the exact advantage a project manager is. "Projects" have become the small change of all discussion. What is a project manager? I am not sure what it means. However, I very much liked her suggestion in a previous debate about what parliamentarians might do.
I welcome the report. I trust that if legislation follows, it will not be too detailed and will stick to the main purposes of the report. Once again, I congratulate the noble Lord, Lord Allen of Abbeydale.
6.1 p.m.
Baroness Faithfull: My Lords, I also pay tribute to the noble Lord, Lord Allen of Abbeydale, for initiating this debate, and who better, as a former
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head of the Home Office. For all of us concerned in the realm of charities in this country, I suggest that this is a momentous debate. We had the Nathan Report in 1952, the House of Commons Report in 1975 and the Goodman Report in 1976. Little action was taken as a result of these reports. Now at last we have positive action in the form of the report of Sir Philip Woodfield and his team commissioned by the Home Secretary and the Chancellor of the Exchequer.
We congratulate Her Majesty's Government on taking action; all those in the country who have worked for change will be grateful. Many others will also be grateful. Perhaps I may mention the retiring chief commissioner, Mr. Denis Peach, who has given imaginative and positive service during his time at the Charity Commission. We wish him well.
There are up and down the country those who have called for reform and who have done good work. Perhaps I may mention two names: Mr. Harry Kidd, the director of the Legislation Monitoring Service of Charities, who produced this extraordinarily good book, Malpractice in Fundraising for Charity; and Sir Charles Kimber, the charities review organiser in 1980 in Oxfordshire, to whom I am particularly indebted for the help he gave me with the Parochial Charities Bill.
My particular interests lie in the following recommendations. Recommendation 2 states:
"The Home Office and the Charity Commission should review and clarify the division of responsibilities between them: the direct accountability of the Chief Commissioner to the Home Secretary should be preserved".
Recommendation 3 states:
"Two additional part time commissioners should be appointed by March 1988".
I suggest that the present Home Secretary, Mr. Douglas Hurd. is unique in that, unlike any of his predecessors, over many years he has taken an interest and taken action.
In previous debates in your Lordships' House I recommended an advisory council or board consisting of a Member of the House of Commons, a Member of the House of Lords and a member representing charities. I still ask myself whether this would not be a sensible move to support future Home Secretaries, who may not be as interested, able and imaginative as our present Home Secretary. Such an advisory board could consist of people to whom the public could appeal.
I appreciate that in paragraph 27 of the Woodfield Report it is stated:
"The traditional device of an independent Advisory Council would not be a sufficient answer to these requirements"—
that were cited in earlier paragraphs. Instead of an advisory board the report recommends the appointment of two additional part-time commissioners. The noble Lord, Lord Allen, made reference to these.
Recommendation 3 might well meet my point. But perhaps I may ask the Minister when he comes to reply to clarify the role of the two part-time commissioners. For instance, what would be their job description? Would they be available to the public? Would they work under the chief commissioner?

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What would be their relationship with the Home Secretary? From what sector of the population would these part-time commissioners be drawn?
Recommendations 4, 5 and 6 concern the management and organisation of the Charity Commission and these are greatly welcomed. I have to say to the noble Lord, Lord Grimond, that I approve of the recommendations in the Woodfield Report on the question of management and the appointment and setting up of a top management board. I also approve the career structure for staff by secondments to other departments and to other charitable organisations. Here we extend a welcome to the newly appointed commissioner who comes from the Rowntree Trust, Mr. Robin Guthrie. It is encouraging to see that,
"greater use of information technology"
is recommended. There are now over a quarter of a million charities in the United Kingdom, with an annual turnover of well in excess of £10 million.
At a luncheon given in honour of Mr. Denis Peach by the Home Secretary at which I was present today, one of the members suggested that we might scrap the register altogether to save having to put it on computer and that everyone should re-register and it would go straight on to the computer. I only heard about that at lunch today and I have not had time to think it over, but it appears to me quite sound.
As one who has presented to your Lordships' House the Parochial Charities Bill, which, together with the Small Charities Bill, was considered by a Select Committee under the chairmanship of the noble and learned Lord, Lord Brightman, I am bound to point to Recommendation 30. The Charity Commission issued an excellent report on the Charities Act 1985 but it states that:
"The response has been modest".
The work that I did on this Bill leads me to support Recommendation 29, that,
"The Commission should as soon as practicable establish a local…liaison section to promote and assist future local review work".
As in past reviews of local charities, this work could be devolved to a local voluntary organisation from the local authority.
I have two last points. The first concerns trustees. The Charity Commission has had neither the staff nor time to stretch out to help, assist and confer with trustees. I draw your Lordships' attention to the Centre for Voluntary Organisation and Management at the London School of Economics, where there are courses both for the management of voluntary organisations and training and help given to trustees to assist them with knowledge of how to be trustees and how to run a voluntary organisation.
Finally we raise the burning question. These recommendations cannot be carried out without further resources. Will those resources be available? Many of us were deeply distressed and hurt by the report of the National Audit Office. All the work that has been done by Sir Philip Woodfield and his team, and the inspiration which has been given to the work by the retiring Charity Commissioner, by the report, and by the Home Secretary, will come to nought unless there are resources.
6.19 p.m.
The Earl of Longford: My Lords, it is a privilege to speak between the noble Baronesses, Lady Faithfull and Lady Lane-Fox. They both embody the charitable impulse at its best: a warm heart supported by a great deal of expert knowledge. I hope that my noble and revered friend Lord Houghton will forgive me if I say that I was a little worried by one of the propositions that he appeared to be advancing. As he said the same thing last time, I suppose that I have probably understood him correctly.
I understand that the noble Lord, Lord Houghton, fears that there is a danger of too much money going to charity. I take precisely the opposite view, I am afraid. In this country, in which we are told that we are getting richer every minute, I think there is a danger of not enough money going to charity. As I shall not use up my time, perhaps I may be permitted a personal reminiscence. In 1950 I made my first speech as a Minister of some kind in the Labour Government of that period in reply to a debate initiated by Lord Samuel on voluntary action. Mr. Herbert Morrison, the then Deputy Prime Minister, took particular trouble to make sure that I made a very strong statement indicating that the Labour Party, although a party connected with collectivism, was heart and soul behind the movement for voluntary action. I am sure that when my noble friend Lord Mishcon replies on behalf of the party, he will say the same thing as strongly and no doubt more skilfully.
I shall not dwell on the subject. I remember that the philosopher Kant—I spell that for the benefit of our friends who have to take all this down—was accused of starting from both ends of the road at once and never meeting himself in the middle. I have three propositions to unfold briefly. The first is straightforward and the other two might need some balancing out.
The first proposition is simply to support most strongly all the arguments that the noble Lord, Lord Allen, with all his expertise, brought forward for strengthening the work of the Charity Commission, for giving it more resources to enable it to do the work much better. I shall not dwell on that as it has already been touched on and will be mentioned again by other speakers.
The other two propositions need careful juxtaposition. On the one hand we want to remedy abuses and on the other hand we do not want interference with charities. The noble Lord, Lord Grimond, will perhaps for the first time approve of me if I say that I have myself started three small charities in my time. That is what he begged us all to set about doing. The last thing we should have benefited from, either then or later, would have been interference from bureaucrats coming round and sniffing about to see what we were up to.
In my opinion the Charity Commissioners have been extremely wise. Everybody has to put in a report and if there is any cause for anxiety the matter is considered more fully. But the last thing that the charities would want would be increased interference by a central body, whether that be the commissioners, the courts, the Government or

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anybody else. I am sure that anybody who has presided over a great charity—such as the noble Lord, Lord Wolfson, or the noble Lord, Lord Allen, who has done the same for MENCAP and with whose predecessor I was associated in past years—would be the last to want people inspecting them more closely. It would be absolutely fatal and in fact impossible. I hope we shall not hear any more of that.
That brings one to the question of the guidelines that ought to be laid down for charities by the commissioners. Here I have changed my views since our last debate only a year ago. Now I believe that it is not possible to lay down more precise guidelines. I do not say that it never will be, but I do not believe that we should benefit from more precise guidelines. To take but one issue; it is clear enough but it will always give trouble. I am quoting from a Home Office document issued recently:
"It is well established that charities may campaign in furtherance of their objects. The RSPCA Act 1932, for example, conferred specific power on the RSPCA to conduct 'persuasive educational and parliamentary operations' and to make representations to Parliament and a Government department".
That campaigning, which is a crucial issue here, is settled in the right way for the moment and I hope that it will never be disturbed. The question then arises as to what is political and will be ruled out. That is a difficult issue which I do not have time to go into now. However I quote something written by the then chairman of the Charity Commissioners to my friend Mr. Peter Thompson, the dynamic founder of the Matthew Trust—a gentleman who has done more in my estimation for mental health than any layman. The letter from the then chairman acknowledged the difficulty, indeed the impossibility, of defining the word "political" with any precision. For myself I am now for once, and perhaps for once only, in favour of the status quo.
I shall raise one more issue, turning to the other side of this, that concerns abuse. I gave notice of this to the noble Earl, Lord Ferrers, and it refers to something I said on the last occasion, when I asked a question about the foreign organisations which set up charities in the United Kingdom and then take the money out of the country. I dealt with that matter in greater detail last time. I hope that the noble Earl will be able to say whether that abuse has been corrected.
I shall not detain the House further. I have risen partly because of my long-term involvement with charities and also because of my desire to win the good esteem of the noble Lord, Lord Grimond, by boasting of the small charities that I started, but most of all to say how strongly I support all that the noble Lord, Lord Allen, is doing and will continue to do.
6.27 p.m.
Baroness Lane-Fox: My Lords, the noble Lord, Lord Allen of Abbeydale, should be congratulated not only on once again leading out the home team, as it were, which has become almost an annual fixture, but also on his determination to improve the role of the Charity Commissioners, something that was so well reflected in his speech.
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It is very much in the category of high finance. The recent scrutiny was greatly needed to look through the whole of the Charity Commissioners' work. The Woodfield report contrives to cover all the points that have given many of us concern. My main worry about it has been that the commission has been working with outdated equipment. It was an obvious recruit for computerisation and also for sophisticated filing methods. No doubt this view of mine was coloured by my own visit to the commission some years ago. I went on behalf of a charity which wanted certain information from the commissioners. I found a very old-fashioned system operating. Nobody could do more than provide me with a heap of dusty old files to open up and search. It took me several days. I am delighted to read of a brighter prospect for anyone sent there on a similar quest in the future.
The kind of information that the commissioners have to provide can be of great use. I was very disappointed to read that the report does not favour making a scale of charges here. This is the only point at which I do not agree with the report. At Part 11 paragraph 118 it recommends against such a scale of charges. I believe that someone should pay if something is of value to them. This is a valuable opportunity that should not be missed. It is very satisfactory to read the Home Secretary's reply in another place on 21st January. He gave a warm welcome to this report. He said that an extensive reform of the system was needed and declared that the majority of recommendations were already being put into effect. He hoped that those others that require legislation would be dealt with later in this Parliament. My goodness, that has come a long way.
I have read the views of the National Council for Voluntary Organisations and the Council of Charitable Support. In general they both give the report their very full approval. The NCVO is anxious that the proposed registration fee of £25 is likely to discourage new charities. My own view is that there should be a fee of perhaps not more than £10. Having been through the business of registering on several occasions, I believe that the larger sum could be a discouragement but that the smaller one would encourage the charity at least to keep the rules. I believe that there are others of your Lordships who would like to raise the bid to £50 but I fear this would drive more charities underground where already there are, I am told, 100,000 unregistered.
In particular I am delighted with the suggestion that it is intended to make submission of annual accounts obligatory, with failure to do so punished by removal from the register. As an adviser on disablement grants to a charitable trust, I know that new appellants make much of their registration with the Charity Commission. As things are, that state does not indicate any extra grace; but, if Woodfield's recommendations here are adopted, it will.
From my two connections with the Commission I stress the urgency and importance of adopting the recommendations in this report. Increased resources of course will be needed to make it work, and that has already been referred to by other noble Lords today. It is not only important that there is a due measure of supervision, but also that the public knows about this. Fortunately there has not been any big charity

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scandal to date, but it is high time to take steps to prevent any such possibility. These funds, like taxes, come from the public; but, unlike taxation, this money is voluntarily given and as such deserves most careful handling. For these reasons I applaud the Home Secretary for going as far as he has.
Finally, perhaps I may ask my noble friend whether the Home Secretary's statement implies that funds will be made available to carry out the recommended changes.
6.33 p.m.
Lord Denning: My Lords, I too welcome Sir Philip Woodfield's report and many of the recommendations. I congratulate him on the speed with which he has done it.
One can only concentrate on one or two features which appear in this scrutiny. I should like to concentrate on the need for keeping a full and accurate register of charities. Section 4 of the 1960 Act said that every charity, subject to limited exceptions, is to be registered with the Charity Commissioners and that it is the duty of the trustees to register it. That duty has not been enforced because there is no sanction for it. The noble Baroness, Lady Lane-Fox, said that there were 100,000 charities which are not registered when they ought to be. Indeed the report says that many charities required by law to register do not bother to do so. There is no sanction for failure to register.
I should like to tell your Lordships about the importance of registering charities. Once a charity is registered, the charity itself, when it issues appeals, puts with its name a registered charity number. That is a guarantee to the public of which note is taken. Indeed in paragraph 38 of this scrutiny it says:
"The most widely known fact about the Charity Commission is probably that it keeps a register and issues registration numbers to charities. The natural assumption is made that having a registration number shows that the charity is reliable, well run and worthy of support."
I also add that it is accountable to those in authority for its running. If there is any mishandling of the charity, it can be called to account and investigated. That is the importance of a registration. It is a guarantee to the public that it is a well-run charity.
The other equally important point is that a registered charity has enormous tax concessions and taxpayers get relief on their subscriptions to charity. In regard to this the scrutiny says at paragraph 45:
"… the public is entitled to have access to basic information showing which are the bodies receiving the large fiscal benefits which the state gives to charities."
It states that tax concessions amount to £550 million and rate relief to £120 million. So there is the important benefit of tax concessions, the other important factor being registration. That is the effect of registration: on the one hand there is a guarantee to the public that it is well run, and on the other hand it is afforded tax concessions.
Those being the consequences of registration, is it not important that there should be compulsory registration and a sanction? As I said, in the 1960 Act it was compulsory on every charity to register but no sanction was imposed for not doing so.
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I should like to suggest a few sanctions which should be considered. If the charity is not registered, let it receive no tax concessions at all. Furthermore, if it is an unregistered charity, do not let it make an appeal for funds because it does not have the guarantee of the country behind it.
I should like to deal with appeals for funds. We know what fund-raisers do. When they make an appeal for funds should they not say how much they are getting out of it? Paragraph 127 of the scrutiny says:
"The excessive level of remuneration retained by some commercial FRPs. It appears to be lawful for an FRP to enter into a contract with a charity under which he is entitled to retain 80 or 90 per cent, of the receipts".
So the fund-raiser, when he puts this great appeal for funds for this charity or the other, does not say "80 or 90 per cent, is going to me and only 10 per cent, is going to you".
That recommendation surely ought to be in force. If an appeal is made for funds, first it should be stated that it is a registered charity and, secondly, it should be stated on the leaflet or the box how much the fund-raiser is getting out of it. Surely that is a good recommendation.
These are recommendations which would put charities on a proper footing; they should all be registered and properly run. If they are not registered no tax concessions should be given at all and they should be made absolutely accountable. That requires new legislation. That is the main point I would mention.
I also mention schemes and advice. The scrutiny says that these are often heavily loaded with legal phrases, that it is slow, and that the doctrine of cy-près has not been carried as far as it should be. I hope that under the guidance of Sir Robin Guthrie we may change all that. With more resources the Charity Commission can be quick, active and liberal in all these matters. I noticed that in accordance with the terms of reference given to the scrutiny report, it is to assume that the definition of "charity" for charitable purposes is to remain unchanged, and that is probably right.
It would take a long time to define charity but I should like to outline the trouble in which we find ourselves. Noble Lords will remember the case of the Unification Church and that the Daily Mail was said to have libelled the moonies. However, they justified it. The jury stated that charitable status should be investigated. It is being investigated. The Charity Commissioners thought that the charity was for the advancement of religion and the case is being taken through the courts. It has not yet gone far and it will take some years, but it is hoped that the House of Lords will give guidance on what is a charitable status.
Many organisations do not trouble to register as charities. We know of the fortunes that have been made, for example, by the Church of Scientology. It has not registered as a charity. If it had, it might be accountable. Registration as a charity with the Charity Commissioners should be enforced; the statute of 1960 should be enforced by proper machinery.

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I have outlined a few of the points which I noted in the scrutiny report. I should like to say that I welcome the report and the many recommendations which it makes.
6.42 p.m.
Lord Parry: My Lords, it is always a joy to follow the noble and learned Lord, Lord Denning, to hear him expound upon cases and to know that he is slightly older than I. I rise to speak in the debate because, as one ages, it is easy to concentrate one' s mind on the disagreeable. There is a great deal of change and all change hurts someone, even when it is change from good to better. The great and enduring help that one receives from society at the present time is the recognition of the definition of charity, which is perhaps even older than that which we are discussing this evening: charity being love.
In all the difficulties in present society at home and abroad there is evidence of a great deal of love and enduring and that people respond to charitable appeals. When it is properly presented to them that there is a need for their gifts, those gifts are forthcoming. They come from those who are very rich and from those who are very poor. They are co-ordinated through charities which are well organised and through charities which are perhaps less efficient.
After many years in the field, I take the view that many of the difficulties and tragedies which occur in the personal lives of those who fall foul of what they first attempted to achieve occur more from accident than design. Therefore the emphasis is thrown back on the need to structure the charitable services in a way which will help all those who wish to give service in those charities, rather than that we should set out to punish those people who we know originally intended to serve their own interests rather than those of the charities.
I have worked happily within the Spastics Society for a number of years. During that time I have been grateful for the help and advice of Mary Holland, who is now with MENCAP, and of Michael Brophy, who is now with the Council for Charitable Support. They are present in the House tonight, as are many other professionals in the field.
I should like to dissent gently from the words of the noble Lord, Lord Houghton of Sowerby. I believe that there is a great necessity to harness the good feeling and enduring optimism which is present in society through the new media in the most efficient way possible. Not for one second do I disagree with the noble Lord that there is a possibility of prostituting that if the wrong people give the wrong messages in the wrong way. However, the important aspect of the White Paper is that we are being allowed to focus our minds on problems that have occurred, some accidentally and some purposefully, and that we are providing some solutions to those problems.
I thank my noble friend Lord Allen of Abbeydale for giving the House the opportunity of debating this subject. It is a great discipline on the House to see the noble Lord, Lord Wolfson, and to hear him contributing to the debate as one who has probably
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done more for charitable purposes in one afternoon than the rest of us have been able to do in a lifetime.
I should like to ask two specific questions and to take the House back to the opening speech of my noble friend Lord Allen of Abbeydale. When the Minister comes to reply, will he tell the House more about the position of the project officer, outlined in the first suggestion, who will be reporting directly to the chief commissioner? Will he say who, what, why and how and comment on the nature of the appointment?
I should like to take the House quickly to two further items concerning the official custodian for charities, items 38 and 39. It has been pointed out to me that the official custodian for charities acts in a voluntary capacity; as I understand it, he is not a paid official. He works economically, he is in a position of great trust and is responsible for advising about investments in this field. I am told that the operation costs approximately £1 million, and that must be set against a charitable investment in the region of £600 million. If people are prepared to work in a voluntary capacity at such a high level, and if such talent can be tapped for what seems to be a reasonable percentage of the total investment, I should like to know whether it is necessary to change the appointment and introduce a bureaucratic structure which might cost more.
In the debate we are making only a beginning, but I believe that there are a number of recommendations upon which there is already agreement. One could probably run a pencil down the list of recommendations and isolate approximately 30 upon which there is already total agreement. As has already been said—and it is also the view of the charity organisation that has been advising me—there are other recommendations that we might wish to go through with a fine-tooth comb. One would need to look at the details and implications of the proposals. However, we are surely in a position where the Minister can say to his right honourable friend the Home Secretary, "It looks to me as though we have total agreement on two-thirds". It would be a pity if the implementation of the agreed portions of the report were held up while we argue over matters about which we are already agreed.
I warmly welcome all the items upon which there is so much agreement and I shall help to question the items upon which there are matters yet to be raised. I respectfully recommend to the Minister that in his report to the Home Secretary he draws attention to the fact that there is a great deal of agreement on the major portion of the recommendations.
6.49 p.m.
Baroness Macleod of Borve: My Lords, I should also like to congratulate the noble Lord, Lord Allen of Abbeydale, on bringing this matter back to your Lordships' House one year later and on having accomplished so much during that time. I am not surprised that he has done so. I should also like to congratulate Sir Philip Woodfield and his committee on what is not only a very helpful but also a very succinct report. I believe that we have all had much pleasure in reading what the report has to say.

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I am also pleased to read that the Home Secretary, on behalf of the Government, has accepted the report and that he hopes to bring a Bill before Parliament during its present life. As we all know who have anything to do with this sphere, this is what my noble friend Lord Young would have called a growth industry. How thankful and grateful we are for that. It is an increasingly promising field, but unfortunately also an increasing field for sharp practices, as has been spoken about before. But no wonder in this growth industry the Chancellor of the Exchequer is encouraging more voluntary giving to charity by introducing the payroll system. After all, we are told that the country and he also, raised £10 billion. That is big money, even to the Chancellor.
The report is vitally important at this time because there is a ground swell of trusts, companies and individuals who are willing and ready to help all sorts of people and all sorts of organisations that are in low finances or people who are themselves in trouble. All these organisations and people are increasingly anxious to know that their contributions are well spent. There are 250,000 registered charities. I think it is beyond the hounds of charity commissioners and their staff to look after so many charities. Therefore, they must have up-to-date machinery and equipment, and, in view of the Government realising £10 billion, it seems that the Chancellor of the Exchequer should give money for more staff.
This report has many recommendations which can and must in my view be implemented. We know that charitable status can be acquired as a legal right, regardless, as we are told, of whether the organisation is well or incompetently run and even if the organisation fails to make the statutory return of accounts. That seems extraordinary. We are also told that the Charity Commission has no power to refuse charitable status to an organisation with objects entitling it to that status, even when it has reservations over whether the organisation is one which ought in the public interest to receive the legal and financial benefits of charitable status. That seems to need much tightening. Otherwise, we may have, and perhaps are having, a large number of different charities all geared to helping the same cause. To my certain knowledge that is happening.
Like other noble Lords, I believe that overseeing the accounts is one of the most pressing of all the recommendations made. It is vitally important, for example, that the amount paid on administration is low and is seen by the public to be as low as possible. I welcome the accounts being received by local authorities. Very often it is local people who are giving their money to local charities as well as to big national charities. I warmly welcome the recommendation that members of the public should be able to see, for a small fee, the charity's results.
Charitable status, and all that surrounds it, is invaluable to every new charity. However, the register of charities must be kept up. In my experience—which is quite lengthy and covers many charities—I find that charitable giving and charitable help from the people of this country are sometimes almost overwhelming. I happen to be connected with a charity that at Christmas-time looks after people whom nobody knows because they are single and
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homeless. We run the charity to look after them. We call it an open Christmas and about 700 people are helped each Christmas.
I do not think I am betraying any confidences if I tell the House that up to three weeks ago—and I did not have time to ask for today's figure—the people in our country who wanted to help the single homeless in London, who have no roof, nowhere to go and no food at Christmas-time, have so far this year raised £605,479. Now that is charity, because it is looking after people they never see who are single and homeless. They might perhaps go round under the arches of Charing Cross, but normally those people are looked after by other agencies. Therefore, the remainder of the money we raise will go to help the agencies that normally look after people who are without homes during the rest of the year.
We employ only two people and our administrative and publicity costs are less than 10 per cent. The rest is done entirely by voluntary effort. Last year 996 people offered to give up some of their time at Christmas to help us look after people who have no homes and no food. That is charity. I hope that it never changes; I am sure it will not.
6.58 p.m.
Lord Mishcon: My Lords, in this interesting and very useful debate your Lordships have not been economical with truth but have been economical with time, and I observe that I, the Minister, and the noble Lord, Lord Allen of Abbeydale, have been allowed rather more time than was announced by the Chief Whip. It would not be charitable if I for one took advantage of that, and I do not intend to do so.
I share the joy that my noble friend Lord Houghton of Sowerby announced at the beginning of his speech when he said that he could commence with a note of approval and appreciation. I should like to join with others of your Lordships in paying tribute, first of all, to the noble Lord, Lord Allen of Abbeydale, for initiating this debate. He is a great initiator of debates which are useful to the nation and we are very grateful to him. Secondly, I too join in the tributes from these Benches to Sir Philip Woodfield and his colleagues for this very worthwhile and workmanlike report. I do not know whether your Lordships have looked at paragraph 4 of Part 2, which is to be found at page 8. Your Lordships will see—and I think it is proper to pay tribute to it—that the total estimated cost of this report was £31,000. It was well worth the money, if I may say so; it is a very economical report.
Tribute should also be paid, as has been done, to Mr. Peach, a great Chief Commissioner whose work will always be appreciated. I know that his successor would be the first one to pay that tribute to him as well. We wish Mr. Guthrie every success.
I was asked by my noble friend Lord Longford to reiterate the resounding words of Lord Morrison—I think he was Mr. Herbert Morrison when he spoke those words to my noble friend—in order to make it perfectly clear that from these Benches we welcome the great charitable efforts that are made to relieve hardship in our land and to promote science and education and all the other things that are charitable

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objects. From these Benches I once more say, not with the force that a Morrison could have used on behalf of my party but nevertheless with as much emphasis as I can command, that of course we appreciate charity, we encourage it, and there is no difference between us on this Front Bench and those on any other Front bench, I imagine in this House.
It has rightly been said that we are dealing with a very important national matter when we deal with charity. It may be said that charity represents the big heart of our nation—and what a big heart it is, as the noble Baroness, Lady Macleod, said. But it also represents big business. One has to be rather careful in that connection that there is proper administration, that there are proper controls, without in any way using the bureaucratic heavy hand which obviously would be neither appreciated nor needed. There must be a balance, since, as has been mentioned in the debate, there are about 250,000 charities, with a gross annual turnover of over £10 billion.
The report deals mainly with the requirements which are needed to improve the Commission's management and the information available to it. Upon those objectives there must be complete agreement. I believe that, by and large, this report makes very sensible recommendations.
It is important that the commission has powers to deal adequately with fundraising malpractices. Your Lordships must have looked with approval at paragraphs 41 to 45, as did the noble and learned Lord, Lord Denning, who rightly mentioned some of the iniquities that occur with some of the professional fund-raisers. I emphasise the word "some" because many of them, by hard work and endeavour and with complete integrity, are responsible for raising large sums for very worthwhile objects, but as always there is a minority of whom we have to be a little careful.
In particular, I was very pleased to see paragraph 41 on page 6, which the noble and learned Lord did not mention, I am sure because he was limited as to the time available for his speech. Paragraph 41 is very interesting and very useful. The recommendation is:
"It should be an offence for a fundraising practitioner to deduct his remuneration (however calculated) from donations received before paying them to the charity unless he can prove that his intention to do so was made clear to every donor; if such an offence is committed it should be open to the court, in addition to imposing penalties, to determine that the sums deducted be paid to such charity as the court may determine."
That is a very good and useful recommendation. One hopes to see it in legislation soon, and that will have to be primary legislation, of course.
Inevitably the question of definition of charity has been raised in this debate. It was said that it was a good thing that Sir Philip and his colleagues had not tried to tackle the problem or we should not have had the report to debate even now. In fairness to Sir Philip, however, I must point out that the terms of reference expressly prevented this admirable working party from considering the matter at all. Indeed, the terms of reference start with the words:
"On the assumption that there is to be no change in the law relating to the definition of charitable status".
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Having said that, it is absolutely unavoidable in discussing charity in a debate to consider whether or not we need a different definition of charity from the latest one, which dates back to 1891 and is nearly a hundred years old. It is the definition by Lord Macnaghten, who devised four categories of charity.
The Goodman Committee sat a few years ago, I think in 1976. It studied this matter very carefully. As I remember it, there was only one dissension from its main recommendation that by and large this reliance upon the four classifications of Lord Macnaghten, defined from time to time by our courts to keep up with the social mores of the day, worked out pretty well. The committee, however, suggested that there should be guidelines which from time to time the court would lay down and the Charity Commissioners would publicise, as to how to keep up with the varying social factors that, clearly, would evolve.
I should like to see those guidelines kept up to date not just from time to time in statements that would be made on behalf of the Charity Commissioners, to ensure, possibly by debates in Parliament and elsewhere, that we were keeping abreast of the times in that definition which owes its origin to Lord Macnaghten and, many centuries ago, to Good Queen Bess.
Lastly, I turn to the question of what queries should be put to the Minister at the conclusion of this debate. I do not intend to copy those who have already put questions to him because that would be a waste of your Lordships' time. I do, however, want to ask a few questions which may be slight variations on those queries, or additions to them. I do not think that any of them will come as a surprise to the noble Earl. If they do, I shall well understand (since I have not had an opportunity to give him notice of them) if he decides to reflect upon them, if he can pay them that compliment.
First, what is the Government's reaction to the idea that there should be a charge of £25 on first registration of a charity, this not to be retrospective? The calculation that has been made is that this new step would be very much setting a precedent which, it may be felt, other people less kindly than the Minister of State, or less generous than the present Chancellor of the Exchequer, might want to increase upon to an unsatisfactory extent in years to come. Therefore it is an important precedent that we are discussing. What is the Government's present reaction, bearing in mind that all that it would yield on the calculations I have seen would be about £100,000 a year? I suppose that it would mean that a cashier's department would be needed; it would mean accounts being sent out; it would mean quite a bit of administration. Is the whole exercise worth while for £100,000 a year and would it not be wrong to think in terms of charging anything more?
The official custodian was mentioned, as was the recommendation that his offices certainly be no longer encouraged and at some future date possibly be terminated. It has not been mentioned yet, but my information is that there are some 38,000 separate trusts in which at the moment he is the nominee stockholder. In good faith—I am told this by a worthy organisation, which I think is obviously

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reliable—many trusts were put to him in perpetuity. Bearing in mind the traumas through which the Stock Market has been in recent months, is this the appropriate occasion to remove investment advice of this nature from many charities which may badly want to depend upon it? What would be the alternative except for those charities to go elsewhere for investment advice? That might be a costly proposition, and the advice, if I may be allowed to say so, might not always be as reliable as that which many charities have received from the official custodian?
Lord Allen of Abbeydale: My Lords, I do not wish to interrupt the noble Lord, but I wonder whether he is quite right in suggesting that the official custodian offers investment advice. He manages the workload but I do not think that the trustees can turn to him for advice, if I am correctly informed.
Lord Mishcon: My Lords, the noble Lord, Lord Allen, may well he right and I may be wrong. If I am wrong about that I apologise, but the information I had was that there is a free service given by way of investment advice from time to time by the official custodian. If that information is wrong I am sure that the Minister will tell me so, and my present ashen colour will turn to pink.
Lastly may I ask the noble Earl a question, only so that there is no misunderstanding? I believe it may be true that the Government have not yet made up their mind fully, but the Home Secretary has recently said that the Government support most of the recommendations in the Woodfield Report. Can the noble Earl tell us what recommendations they do not approve of, so that we may be able to consider the Government's position in a little more detail?
Having asked that, I reiterate from these Benches my appreciation of all the work that went into the report. I congratulate the Government, the Home Secretary, and the noble Earl upon the work that is being done by his department in setting up this working party and in ensuring that it carried out very useful duties which we all appreciate.
7.15 p.m.
Earl Ferrers: My Lords, I should like to add my thanks to the noble Lord, Lord Allen of Abbeydale, for having given us the opportunity today to debate this matter. I should say at the outset that the Government have looked forward to this and have looked forward to the opportunity of hearing your Lordships' views, because the report of Sir Philip Woodfield and his team is a document of the first importance for the future of charitable endeavour in this country. Knowing your Lordships' deep concern for charities, it is appropriate that it should be debated for the first time in this House.
The noble Lord, Lord Parry, said that your Lordships are in favour of three-quarters of all that has been said. Listening to this debate today has been an enlightening experience for me personally, and not least for the fact that it was opened by the noble Lord, Lord Allen of Abbeydale, who was of course Permanent Secretary of the department of which I
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have the privilege of being an ornament. It is something of a fine tutorial to hear from him.
One of the privileges of being a Minister is that one never ceases to learn. I must confess that before I started in this particular office some two weeks ago I was not too familiar with charities. Like faith and hope, I always thought that charity was one of the three great virtues, and of course charities swim along in the slipstream, although they are not quite the same as charity. I am grateful for the benefit of the wide experience and expertise which your Lordships have brought forward this evening to the debate. I listened carefully to it all.
It is of course not possible over charitable matters to settle all questions quickly. In any field of social endeavour as soon as one set of questions gets resolved, others come to the top. Rather like the pistons of an engine, once one goes down, something else appears at the top. There are always problems to be dealt with. Your Lordships have given a great deal of pleasure to me by the welcome that you have given to the fact that my right honourable friend the Home Secretary announced last week that the Government strictly and warmly welcome Sir Philip Woodfield's report, and that we hope to put forward legislation to implement his recommendations later in the life of this Parliament.
The noble Lord, Lord Houghton of Sowerby, asked when will that be; and I shall tell him that it will he later in the life of this Parliament, and he will understand what I mean by that. I can assure the noble Lord, Lord Grimond, that when that happens the Bill will be as short and as manageable as possible, and I hope as he would like.
Our welcome to the report underlines once again the Government's support for the charitable sector. We are committed to its continuing growth and health. Voluntary service to the community, the selfless giving of time and energy for the benefit of others, has always been a prominent feature of our national life and a precious vein in our national characteristic.
The noble Lord, Lord Grimond, referred to all those who benefit from charitable works, and so did the noble Earl, Lord Longford. My noble friend Lady Macleod gave us those remarkable figures with regard to Crisis at Christmas. It is true that these charitable works involve an enormous amount of people, both the donors and the benefactors. We take very seriously indeed our task as custodian of this heritage. That is not simply a matter of sentiment. Our support is a great deal more than that.
The charitable sector is now larger and more diverse than ever before. There are now estimated to be more than a quarter of a million charities in the United Kingdom with an annual turnover of £12,000 million. My figures are higher than those that have been mentioned. That is about 4 per cent. of our gross national product. The sector is now very significant indeed. It is larger than the motor industry, the chemical industry and the coal industry. There are some who say (possibly cynically) that altruism is splendid but that it is even better when it is tax deductible. That is a slightly cynical attitude.

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The noble Lord, Lord Houghton, said that we have to be careful and strict where public money is involved. It is perfectly true that much money goes to charity as a result of, and even because of, the tax system. That is an important feature of charitable giving in this country. The basic philosophy is to encourage the latent and wholly virtuous desire to give a proportion of one's income to charity. When that is done the person who gives may do so out of his income before it is taxed. Therefore the money given is the donor's money. It so happens that the route by which some of it comes is via the taxation system. Because of that, it is important that we should take great care that it is properly and correctly looked after.
I should like to join other noble Lords who have congratulated Sir Philip and his team on the speed with which the review was carried out and on his clear and well judged report. The sympathetic understanding and judgment which he and his team brought to bear has been reflected this evening in your Lordships' House. As my right honourable friend the Home Secretary has said, it is a view which we unequivocally share. We accept Sir Philip's recommendations and when the opportunity arises we shall introduce legislation to help put them into effect.
Much has already been done to implement those recommendations which do not require legislation, notably to improve the existing management of the commission. The commission has appointed a project manager, a point about which the noble Lord, Lord Allen, asked. The top management of the commission has been reorganised by the chief commissioner into a board which will better enable the commission to identify and respond to further needs. When the new chief commissioner has taken up office we shall appoint the recommended two additional part-time commissioners. The commission's five charities divisions have been reorganised. This has released additional staff for investigation work. So has a small reduction in consents work (such as the selling of land) which the chief commissioner has achieved in line with Recommendation 37 of the report. At the same time, real progress has been made towards establishing adequate management and financial information systems. I should like to congratulate the chief commissioner on his swift and very positive response to the report. I can reassure the noble Lord, Lord Allen, that the Charity Commission has already set in hand a review of its leaflets.
Perhaps I may indicate a little more fully the Government's response to the broad implications of the report and touch on one or two particular areas, some of which have been mentioned and others of which have not. First, we accept the central premise of the report that while the system may be in need of extensive reform, the fundamentals of the present framework for supervising charities are still sound. The essential element in that framework is the Charity Commission. Lest anyone should harbour any doubts about our intentions, I should say straight away that we envisage that the commission will continue to play the vital and central role in a
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reformed system. I have no doubt that it will pay attention to the interesting suggestions which my noble friend Lord Wolfson advocated, with his large knowledge of this area.
The commission has from time to time been criticised. That is inevitable. Seen in the round, however, there can be few with any knowledge of the charitable world who would not say that its contribution to the sound development of charities, has, over the years, been of enormous value. We wish to see that contribution maintained and enhanced for the future. Quite apart from the unrivalled knowledge, expertise and long experience which the commission is able to bring to bear on the affairs of individual charities, its exercise of legal powers (which are concurrent, let us remember, with those of the High Court), saves both time and the high legal costs which charities would otherwise incur.
But the law under which the commission operates must keep pace with modern developments. It is now nearly 30 years since the last major legislation on charities. Over the years the number and variety of charities has steadily increased and the opportunities for abuse have multiplied. The noble Lord, Lord Houghton, said that he wanted to see control. I agree that the need now is to give the commission powers which are more appropriate to present-day conditions which will enable it to act more effectively in order to ensure that charitable funds are protected against abuse. The changes Sir Philip recommended in his report are,
"directed towards fostering a greater realisation of the responsibilities of trustees, reducing correspondingly the responsibilities of the Commission but increasing the scale of their activities in respect of malpractice and of efficiency, and improving the quality and quantity of information needed for these purposes".
What the report proposes and what the Government endorse is not a radical recasting of the commission's basic functions—those of registration, of scheme-making, investigation and advice—but a greater emphasis on monitoring and investigating abuse, and a shift of resources away from activities with lower priority. To do this effectively the commission will need to be given new powers and to be relieved of some of its present duties.
We believe that this must be right. In saying that, I would not want to give the impression that we believe that abuse is everywhere to be found or that the charitable world is riddled with inefficiency and malpractice. It is not. We believe that the vast majority of charities are competently and honestly run.
The Earl of Longford: My Lords, will the Minister be able to say a word about money raised and then transferred abroad?
Earl Ferrers: My Lords, the noble Earl asks about abuses which occur when charitable funds go abroad. He may be aware that the Government took action against this in the Finance Act 1986. A certain amount of work has been done. It is too early at present to assess whether more needs to be done. We shall bear those points in mind when we are considering legislation for that part of the Woodfield Report which deals with abuse.

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The commission's new powers will complement the arrangements, to which the noble Lord, Lord Allen, referred, introduced by Section 33 of the Finance Act 1986, whereby the Revenue can pass information to the Charity Commissioners where it appears that a charity is applying its funds for purposes which are not charitable. The noble Lord asked whether these arrangements are working. I understand from the commission that they are working well. The commission is now considering 51 cases which have been referred to it by the Inland Revenue. A further 60 cases are in the pipeline. The commission's inquiries division is also investigating another 27 cases where it has involved the Revenue. Some of those cases involve large sums of money.
My noble friend Lady Faithfull referred to the two part-time commissioners and wondered what they were going to do. Their function will in essence be to act as non-executive directors bearing a full share of responsibility for key decisions of all kinds. They would naturally contribute to the advice given by the commissioners to the Home Secretary. One would hope that they would contribute to the spirit of openness that has imbued the commission under its chief commissioner, Mr. Peach. The next step is for us to hold discussions with the new Chief Charity Commissioner about the appointments and the job descriptions of those concerned.
The noble Lord, Lord Allen, asked about consents for land transactions. The report concluded that charity property could he adequately protected by statute, and that the requirement which is placed on trustees by Section 29 of the 1960 Act to seek the agreement of the commission before transferring property, should be repealed and replaced by provisions requiring trustees to follow statutory procedures before selling land. We agree with this recommendation and believe that this would provide a more economical and just as effective method of protecting charity property. The trick, of course, is to get the right statutory procedures for trustees to follow.
The Woodfield Report suggested that trustees should be compelled to act on the recommendation of professional advisers as to price, not to sell to one of their number, and that there should be other safeguards. Your Lordships may have other views on this, and if your Lordships have any I should be glad to know them so that we can take those into account.
The noble Baroness, Lady Lane-Fox, referred to charging by the commission. I know that there are many in the charitable world who believe that all the commission's services to charities should continue to be provided free. The report recommends that it would now be right to introduce modest charges for new registrations, for the services of the official custodian if he is retained and for residual work on consents to property transactions. It is obviously right that a retrospective registration fee would be inequitable, that there should be no charge for general advice and no annual fee for filing accounts. The Government believe that the report's recommendations are in line with present circumstances.
The noble Lord, Lord Mishcon, asked about the £25 registration fee and the noble Baroness, Lady
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Lane-Fox, said that this was too high. I can only say that the Government have as yet taken no decisions on the appropriate level of the fee, but we will take note of the views which have been expressed.
The noble and learned Lord, Lord Denning, urged the necessity for a register of charities. The commission readily admits that the present state of the register is highly unsatisfactory. It is far from complete and far from accurate. Many charities simply do not bother to submit their accounts. Trustees appear to disappear into limbo, so that the commission is unable to contact them, and this obviously is not right. Where their money is involved the public is entitled to up-to-date and accurate information. If the commission is to supervise effectively it needs the information which the register should provide.
We accept the report's recommendations for putting the register on a sound footing. The machinery must be modernised with the aid of computers, and the commission must be given new powers to enforce the regular submission of proper accounts. One would hope that the charities themselves would he willing to do their hit, but if necessary the commission must be able to hold them up to the mark.
As regards enforcement, which the noble and learned Lord raised, the Woodfield Report recommended that registration should be a condition of doing business with a charity. It came down against a financial penalty and the Government are inclined to think that this is right. So far as the register's completeness is concerned, 100,000 charities are from registration excepted by the 1960 Act.
The noble Lords, Lord Parry, Lord Allen and Lord Mishcon, all referred to the official custodian. The Woodfield Report was not concerned with the official custodian's function in relation to land which is only nominal. It did, though, seriously question the desirability and the cost-effectiveness of his investment services. The scrutiny team did not feel able to recommend the outright abolition of this side of the official custodian's work, because they could not foresee all the consequences. They confined themselves to recommending that outside consultants should be appointed to draw up a scheme and a programme for returning investments to trustees. The noble Lord, Lord Parry, was mistaken in considering that the official custodian works on a voluntary basis—he does not.
Many other speakers referred to the commission's resources. I would only say that the extent to which additional resources are required will depend upon the extent to which savings can be made. This turns upon the future of the official custodian and consents work, and on the computer strategy. These are being considered urgently. At this stage I would merely note that the Woodfield Report reached a provisional view that it might be possible to implement the package within existing resources. But we remain to be persuaded that no further gains in efficiency are possible.
I would have wished to speak about two other matters but time is against my doing so. I would

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merely confine my remarks to saying that this debate has been a most useful one. It marks almost to the day the retirement of the present chief commissioner, Mr. Peach. Under his distinguished leadership, the commission has emerged from the legal shadows with a new flexibility and a human face. To use the modern jargon he has made the Charity Commission "user friendly". I should also like to welcome the new incoming chief commissioner, Mr. Guthrie. I for one look forward to working with him during what will be an interesting period in the commission's history. I am grateful to your Lordships for the advice which has been given. We will take note of it all and I am grateful to the noble Lord, Lord Allen, for having introduced this debate.
Lord Allen of Abbeydale: My Lords, before the Minister sits down, I wonder whether he could say one word about Scotland?
Earl Ferrers: My Lords, I can indeed say one word about Scotland. I had intended to say it had I not been caught by the clock, and having attended yesterday's—
Lord Mishcon: My Lords, the noble Earl has until eight o'clock. Let me encourage the noble Earl. He has until eight o'clock. I am pointing that out in case he thought I was being greedy when I spoke.
Earl Ferrers: My Lords, having attended yesterday's Procedure Committee, which went on for approximately two hours about the length of speeches and about a suggestion that the clocks should change to different colours and that nobody must go over his allotted time, I had the figure of 20 minutes in mind and I realised that I was getting over the 20-minute limit.
Sir Philip Woodfield was concerned that the present arrangements in Scotland were not adequate and recommended that the Secretary of State for Scotland should consider which English and Welsh provisions should be extended to Scotland. My right honourable and learned friend the Secretary of State for Scotland wishes to consult charities and other interested bodies before taking decisions on improving the system of supervision of charities which operate in Scotland, and plans to issue a discussion paper shortly. I am motivated to go on for longer than I should but that is the fault of the noble Lord, Lord Mishcon.
The noble Lord, Lord Houghton of Sowerby, asked about television. The whole question of whether charities should be allowed to advertise on television is currently being considered by the Independent Broadcasting Authority. We do not yet know whether it will make any approach to my right honourable friend the Home Secretary to ask for a relaxation of the regulations.
7.38 p.m.
Lord Allen of Abbeydale: My Lords, I shall not use my allotted time but I should like to say that it has been a most interesting debate and I look forward to reading in Hansard the various points which have
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been made. I think that this is the third, as it were, annual debate we have had on this topic and I rather hope that the next debate might be on a government White Paper outlining possible legislation. I noticed that the noble Earl did not refer specifically to that point but no doubt it will be thought about; nor incidentally, on a much narrower point, did he say whether the Charity Commission would be able to keep any fees which might be charged under future legislation.
There have been some small differences of opinion as to just how far we should go. I noted in particular the rather uncharacteristic comment, if I may say so, of the noble Earl, Lord Longford, that he is in favour of the status quo. However, there has in general been a wide measure of agreement. What stands out from the debate, especially in the Government's reply, is that at long last things are on the move. I hope that the debate will help to keep up that momentum. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

British Rail and the Channel Tunnel
7.41 p.m.
Lord Mountevans Lord Mountevans rose to ask Her Majesty's Government whether they propose to give financial assistance to British Rail to enable it and the regions of the United Kingdom to realise to the full any benefits of the opening of the Channel Tunnel.
The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
With your Lordships' consent I shall briefly explore the benefits which I believe would stem from the opening of the Channel Tunnel. Those benefits have been quantified in terms of traffic forecasts and British Rail has announced plans reflecting those forecasts. My feeling is that under present BR thinking and the legislative framework governing that thinking some of the benefits may not be realised. My reservations stem from doubts about British Rail's access to two resources: finance and time.
Perhaps I might deal first with the time resource. One cannot build, or even rebuild, a railway overnight. The last major line built in Britain, the Selby Cut-Off in Yorkshire, was conceived in 1974, authorised in 1979 and completed in 1983. The Stansted Airport link (only four miles) was first considered in 1979 but only authorised in 1986. That work only started last October, with perhaps some five years to go before its completion. Similarly, the Snow Hill project—a matter of reinstating a railway of a little over a half a mile long—has taken some five years.
Conception, planning, consultation and legislation all take time. That makes me wonder whether the time-scale given to British Rail in Section 40 of the Channel Tunnel Act, together with the three-and-a-half years left between December 1989 and the tunnel's opening date, is adequate.
Both the passenger and freight implications of the Channel Tunnel will prove to be of benefit to the

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regions. On the passenger side ease of access is paramount for the business and the leisure traveller. Through passenger trains, as well as those involving a break of journey in the City, will both contribute to an increase in out-of-London travel, not least as the perceived sea barrier between this country and Europe will in European eyes have been replaced by a land link.
On the freight side I foresee simpler, cheaper and quicker transportation contributing to an increase in trade with Europe, as will eventually I hope the single European market. I also believe that these enhancements will lead to an increase in inward investment in manufacturing industry in this country. That is a field in which Britain is in European terms the market leader. All those factors should lead to an increase in manufacturing jobs and, given the location of much of our manufacturing industry, should bring benefit to the regions. The maximisation of those benefits is to a certain extent dependent upon British Rail's ability, quite literally, to deliver the goods.
When considering Channel Tunnel traffic we have a wealth of forecasts provided by the project's promoters, by British Rail and by other interests such as Transport 2000 and the British Tourist Authority. It seems to me that British Rail's forecasts are most relevant, as these are the ones on which it is basing its plan. Its low forecast is for just under 13·5 million passenger journeys using the tunnel and through rail in 1993, the opening year of the tunnel; of these 13 per cent. would board or alight at Ashford, 70 per cent. would use London stations and 17 per cent. would travel to or from points beyond London. These latter two groups amount to 11·6 million journeys between Ashford and London, a large figure even if it is based on a low forecast and one whose size grows when re-expressed in terms of an additional 21 to 25 passenger trains each way each day being grafted onto Network SouthEast. Furthermore, there is freight traffic. BR projects an additional 3·5 million tonnes of freight each way each year. I understand that that will lead to an additional 21 freight trains per day.
British Rail's plans are prepared against the background of these figures and of the legislative framework whereby Section 40 of the Channel Tunnel Act lays a duty upon BR to prepare proposals to increase the volume of passenger and freight traffic between the regions and Europe by through trains, and also the statement in Section 42 (the self-denying ordinance) that the Government may not make grants towards the capital cost of providing through services.
Mindful perhaps of what happened to the 1970s Channel Tunnel proposal, British Rail's face is set resolutely against a new railway through Kent to cater for this new traffic, which is in addition to existing domestic traffic. The environmental damage threatened by such a concept was one of the Labour Government's reasons for cancelling the earlier project. Hence British Rail's plans limit investment on new track, signalling and stations between London and the tunnel mouth to £192 million only. Even allowing for the need to make the project viable, because the Channel Tunnel operations of British
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Rail will be a sector outside the grant network, that sum is inadequate.
We shall have through trains, which will travel through France and Belgium at speeds up to 180 mph between Paris or Brussels and the French tunnel mouth and which will suddenly find themselves limited in Kent to only 100 mph where circumstances permit. Average journey speeds between Cheriton and London will range from 53 to 61 mph, which can hardly be called either impressive or commercial.
I mentioned the limitation on speed where circumstances permit. We are talking about routes which are already saturated at certain periods. Chris Green, the director of Network SouthEast, admitted as much in an otherwise positive briefing which he gave to me, to the noble Lord, Lord Underhill, and to others last autumn. The Monopolies and Mergers Commission, also last autumn, in its report on Network SouthEast drew attention to current service densities on the route which we are discussing tonight, to a decline in punctuality and to concern expressed by commuter groups in Kent about the impact of a Channel Tunnel upon their services and journeys. Network SouthEast gave a public commitment that those passengers—earlier I called them the domestic traffic—would not be disadvantaged by the traffic arising out of the tunnel.
I do not believe that an investment of £193 million is sufficient to fulfil that promise made by Network SouthEast. I recall days spent at Shorncliffe in the late 1950s when commuter traffic and boat train traffic, which was then at its peak, either stopped or crawled on, as line capacity permitted. The noble Lord, Lord Deedes, may well recall those days; if he does, he will I hope support my contention that that must not be allowed to happen again. He may also recall that when the line to Ashford and Folkestone was electrified in the early 1960s, every hour one could travel from Waterloo to Ashford in 50 minutes. Today, 27 years later, that time has increased to 57 minutes, which hardly fills me with confidence regarding what is to come.
In 1993 such regional benefits as we can look forward to in a British Rail context must take as their starting point the routes between the tunnel mouth and London. If British Rail fails here (as I fear it may) freight and passenger benefits will not materialise in London or in the regions. The Cheriton-London routes become the cornerstone of the infrastructure at this end of the Channel Tunnel and we must ensure that this infrastructure is funded so as to meet the needs of tunnel traffic and of domestic rail users.
If grant cannot be paid under Section 42 towards capital works for dealing with tunnel traffic, can investment be authorised which is to the demonstrable benefit of the domestic sector, thus fulfilling the network promise to the commuter associations? Alternatively, is the new line solution, if I may call it that, as dead as BR believes? If built it would alleviate the domestic problems noted by the Monopolies and Mergers Commission and could arguably fall outside the scope of Section 42. Would it fail on environmental considerations, as it did in the past, or would the very considerable environmental benefits of taking trucks off roads, as demonstrated by Transport 2000, be seen as an

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offset? Perhaps a radical solution like Costain's Neptune network would be the answer, with its realisation that it is not just a matter of getting people to London but also round London.
As I said in my opening remarks, time is not on our side. I am looking forward to hearing the views of other noble Lords, particularly the Government's views on Section 42 in relation to demonstrable benefits to the network commuters. This and the new line concept seem particularly important to me. One cannot fault Her Majesty's Government on the level of rail investment, some £3 billion, authorised since 1979, but one may hope that it will continue its enlightened policy in respect of such investment, particularly in the context of the investment needed to maximise the benefits which the Channel Tunnel offers to the regions.
7.50 p.m.
Lord Deedes: My Lords, I join this short debate in the hope that there may be a little fresh light thrown on the subject most pertinently raised by the noble Lord. Like him, I feel that the time-scale gives rise to some anxiety in relation to the Channel Tunnel and British Rail. It has long seemed to me, as one resident in the district, almost at the mouth of the tunnel, that those who put their hands to the Channel Tunnel are taking a certain amount for granted in respect of what British Rail, as it is now constituted, will be able to contribute to the grand design.
I have spent a great part of my working life travelling on the line in question, on this very heavily stretched line linking London and what will be the Channel Tunnel mouth. I have no cause for complaint about my experiences, but I have great cause for anxiety about the future. I feel that those who believe that as it stands this system could accommodate high-speed trains and thereby deal with at least another 12 to 15 million passengers a year, ought to think again. For one thing, it is clear—and the noble Lord will take the point I am about to make—that in addition to the problems he raises, the domestic commitment of this railway line is destined to increase quite sharply during the next few years. East Kent is designated as a growth centre, with the town of Ashford, which I know very well, as a focus for the additional growth. All this has been approved by the Kent County Council. It seems to me that with the Channel Tunnel traffic added to these domestic demands, we shall be in danger of putting, or trying to put, not one quart but two quarts into a pint pot.
I am aware, as is the noble Lord, that British Rail intends to spend a great deal of money on the system. Various figures have been mentioned, one of which is about £400 million. But very little of this money is related to the track down which these trains will have to travel. As I understand it, new trains and the accompanying stock will take about half British Rail's investment. New terminals at Waterloo and Ashford will take a great deal more. There is a relatively small sum at present envisaged for the track.
Without dwelling unduly on the difficulties which I am quite sure wiser heads than mine have already
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put their minds to, it is clear enough that for much of this stretch of track between London and the coast, fresh lines will have to be laid. If high-speed trains are to run between the capital and the coast, then they will have to run through fresh country in order to avoid the curves which characterise much of the track in question. As Mr. Richard Hope, editor of the Railways Gazette—a greater authority than many of us on this subject—has observed, unless an extra pair of tracks is built from the tunnel to the outskirts of London, either commuter or international services will have to be restricted in quantity.
It seems to me that three questions therefore arise. First, has all this been envisaged? I am sure the answer to that must be that it has been envisaged, in which case I think the moment has arrived when we might he told a little more. Secondly, what is now reckoned to be the likely demand on both land and finance for purposes of giving this line the appropriate scale required for the demands on it? Finally, and most pertinently, who is going to pay?
It is as well to bear in mind that British Rail is not altogether a free agent in this matter. It is not open to business propositions. I think I am right in saying that this particular region of British Rail has a commitment to the commuting population in respect of which it receives a subsidy of something like £200 million a year. All my inquiries suggest that there is a wide gap between the prospective performance of the French railway system and our own when this Channel Tunnel traffic starts to move. It seems to me in many respects unfortunate that on our side the Channel Tunnel railway service has to depend on a region which—how shall I put it?—has not been the front-runner among the different regions which serve this country. Indeed, it has been a poor relation of British Rail for many years and is already beset by internal timekeeping and other difficulties.
My instinct tells me that ultimately the Government will have to find a considerable sum in order to assist here. Of this, I think we should perhaps be told a little more. We all know that the tunnel is to be built with private capital, there is no argument on that score. But the extension of the motorway, the M.20, from Maidstone to Ashford now in hand in respect of the tunnel, is clearly a charge which will fall to the Government. If, as we may hope, the rail facility linked to the tunnel reduces the volume of road traffic, why is that not also a legitimate public charge?
In conclusion, these are not abstract questions for this reason: the main line is also the lifeline for upwards of half a million people who live in the county of Kent but whose work lies in the capital and who are already stretching the system to its present limits. Were too little done on the railway in anticipation of the tunnel, were the commuters' share of this line to be diminished, they would face a very serious situation indeed. Moreover, as I have already observed, there are to be more of them not fewer in the years ahead.
We are therefore committed to a new, modern and, I apprehend, expensive railway system linking London to the coast. On this, my Lords, I think and hope we should be told a little more at this point.
8 p.m.
Lord Ezra: My Lords, I feel that the noble Lord, Lord Mountevans, has been absolutely justified in raising at this relatively early stage after the construction of the Channel Tunnel has been committed the question of the rail link on the British side. Both he and the noble Lord, Lord Deedes, have very clearly set out the issues that are worrying a number of us. Indeed they are not new issues. They were seen at a very early stage.
I need only refer your Lordships to the Select Committee's report of your Lordships' House which on 6th May last drew attention in paragraph 13 to this problem. It stated:
"The key to spreading the benefits which could flow from the project will mostly lie in the hands of British Rail, at present totally dependent on Government for its resources. The restraints which the Government has accepted … could possibly inhibit the capacity of British Rail to invest in the infrastructure to exploit the potential".
On that I asked the noble Lord, Lord Brabazon of Tara, during the Third Reading of the Channel Tunnel Bill on 2nd July (at col. 367 of Hansard) what his views were as to what the Government might be doing about this. His answer was:
"The position is clear so far as concerns British Rail investment. If they put forward to the Government commercial proposals the Government will look at them in the way that they normally do so. If they are sound proposals permission will be given for them to go ahead".
That was the answer that I received at that time.
As time goes on the importance of the Channel Tunnel becomes greater because we are now committed as a nation fully to the integration of the European market, which is intended to be completed by 1992. Indeed the Department of Trade and Industry under the noble Lord, Lord Young of Graffham, will he promoting this concept throughout the country before very long to make sure that British industry responds to the challenge. That challenge in simple terms will be to open up a total market which in GNP terms will be worth £1,600 billion compared with our £350 billion and which in population terms will represent 320 million as compared with our 55 million.
In order to penetrate that market, which will then be much more open than it has ever been, we of course need to have the means to get there. We shall need the means to link our centres of industrial growth in the North and in the Midlands through to the Continent. So it is extremely providential and timely that we have agreed unanimously in Parliament to go ahead with the tunnel project.
Unfortunately the rail connections on the British side raise many issues. The noble Lord, Lord Mountevans, referred to the various estimates made of the potential increase in traffic, both passenger and freight. Even on the low estimates, which as he says, British Rail has put forward, these are very large increases indeed. That excludes of course the traffic which will go on the shuttle operated by Eurotunnel. The prospects of movement of traffic from the overloaded roads on to the railways are considerable if the kind of technical developments which were examined in the Transport 2000 report of July 1987 are followed.
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So there is considerable scope here for an increase in rapid, prompt movement of traffic between Britain and the Continent. What is disturbing to British eyes is the fact that this problem has already been seized so firmly by our Continental friends. As we all know, the TGV Nord project, jointly financed by the French and the Belgian railways, will cost nearly £2 billion compared with the £400 million which is being spent on the British side.
As we have heard, the speed of trains on the Continent will then reach up to 180 miles per hour. They will link up at that fast speed with Paris and Brussels and then beyond to the high speed networks fanning out throughout the Continent. The unfortunate thing is that even after the expenditure indicated by British Rail the speed of trains on the British side will barely, on average, for that relatively short journey exceed 60 miles an hour. That compares with 75 miles an hour through the tunnel itself. Not only is there that problem of speed—it might be said that for such a short journey speed does not matter so much—but there is also the question of reliability.
Along with other Members of your Lordships' House I paid a visit to Sangatte in the latter part of last year at the invitation of Eurotunnel and British Rail to see what preparations our French friends had made for the construction of the tunnel. It was indeed very impressive to see the vast shaft which had been prepared from which the work would then start to tunnel under the Channel. The worrying part of the whole visit was the delay on the British side. We were told before we left that British Rail was going to do everything it could to make sure that we got there on time. We were in fact half an hour late and we had to send an emergency message to the hovercraft to wait for us.
There was another half hour delay on the return. I do not think that one can blame British Rail for this. The rail connection between London and Dover is a very difficult one and the slightest problem that arises on that line leads to delay, however important the train might be regarded as being, as ours apparently was on that occasion. So it seems that the weak link in the whole enterprise is the railway network on the British side, particularly between London and the Channel mouth.
If we are going to try to put this right, as the noble Lord, Lord Mountevans, said, we really must move very fast. As we understand it, British Rail at the request of the Government is presently studying this question and it will apparently come forward with proposals for strengthening this link round about May or June of this year. I do not know what the status of its report will be, but I very much hope that, considering the vital importance of the questions with which it deals, we shall have the opportunity of seeing the report, of studying it and then of having another debate of a more informed nature on the whole subject.
There are, as the noble Lord, Lord Mountevans, also said, other ideas which are being put forward, for example the Costain project, which was very clearly referred to in the Daily Telegraph on 4th January. I am happy to refer to that in the presence of the noble Lord, Lord Deedes. That is a project for a separate

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line to be built with private sector money, as I understand it. It could cost something like £800 million and it could then be leased back to British Rail in order to ensure an effective connection between London and the tunnel mouth.
As the noble Lord, Lord Deedes, emphasised in particular, the problem that we shall have if we continue as is presently planned is that not only could we well have an inadequate international connection but the already heavily strained commuter traffic could suffer still more. We could end up with the worst of both worlds.
In addition to the movement of rail traffic between London and the tunnel mouth, we have to think about the movement from the North and the Midlands. One of the major objectives of the project is to link the whole country to the Continent both for passengers and freight. Here also discussions are taking place. But how soon will action be taken? Are we going to have the number of inland clearance depots that are needed? Are the various facilities for quickly dealing with freight in hand? What has been the response of industrialists who have been consulted on this issue? For example I was talking to an important official of the railways on this and he said that one thing that worried him to date was that the railways were not receiving many ideas from industry. I do not know how vigorously industry is being asked for its views, but sooner or later we might find that we have not done the things that we should have done to get this whole traffic moving.
We have here a very serious issue. It is right that it should receive an airing tonight. I very much hope that the report being prepared will be made available to us and that later in the year we shall be able to come back to the subject, perhaps in the knowledge that by then positive action has been decided upon by British Rail and the Government.
8.10 p.m.
Lord Dunleath: My Lords, I hope that the noble Lord will not consider me to be unduly opportunist if I utilise the occasion to make a few general remarks about rail transport as opposed to road transport. I am grateful to the noble Lord, Lord Mountevans, for having asked the Unstarred Question this evening. I think it raises important points.
With your Lordships' permission, perhaps I may say how much I welcome the fact that Her Majesty's Government in collaboration with the French Government decided to make the fixed link a rail link rather than a road link. I think that that raises some general points of transport policy for the future. If, as 1 hope, that decision means that there is going to be greater emphasis on rail transport for long distance haulage, that will be of considerable significance environmentally, socially and economically. I sincerely hope that that will be the case.
I have not driven on any of the motorways of Great Britain for 10 years and I sincerely hope that I shall not have to do so again. I do not enjoy it. One can endure with equanimity being overtaken by a member of the Royal Family in the fast lane. However, what scares the wits out of me is that if, due
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to visibility or road conditions, I feel it prudent to reduce my speed to perhaps 60 miles an hour, I have a 38-tonne lorry or 49-seater coach sitting on my tail, so close behind me that I know that if I were to brake sharply for any reason there is no way that the vehicle could pull up without going into my backside. I do not enjoy driving on motorways and I do most of my travel in England—what little I do—by British Rail InterCity, for which I have a very high regard, despite the many criticisms that are made.
Of course travel by British Rail is not as exciting as it used to be in the days of the King class and the Pacifics. However, I must concede that it is quiet with continuously welded rail, it is comfortable, it is clean and in most cases it is fast. For that reason I feel that not only for passengers but for freight as well it would be much more desirable environmentally to see more traffic on the railways and the already overstretched roads being relieved to a certain extent.
The demands of motor transport are very damaging environmentally. Much of our countryside has been spoilt by the demands of motor traffic and so have many of our towns and cities. The railways are there already. I am sure that in the 19th century there was an outcry about the environmental effects of railways. However, they do not in fact impinge on our lives to any adverse extent at the moment.
In New Zealand when I was there 15 years ago there was a regulation whereby any haulier had to have a special licence to take a heavy lorry on the road beyond a certain distance. In other words, the load could be taken to the nearest railway station, but unless the haulier had a special licence for carrying perishable goods he was not allowed to run the lorry throughout the road network of the country. The load had to go by rail. When I was in South Africa last year the roads were delightfully free of heavy traffic, yet there were enormous freight trains carrying a large majority of goods throughout the country.
Therefore I urge Her Majesty's Government to pursue that policy which they seem to have embraced and to encourage more freight and passengers to go by rail. I salute the Docklands Light Railway on which I travelled recently. It is a most civilised form of transport. I hope that that sort of development will continue to get more and more traffic, both freight and passenger, off the roads.
I also sincerely hope that any pressure that there may be on British Rail—I think there is pressure in certain areas—to be self-sufficient financially will not price passenger services out of the market. After all, motorways are a very expensive commodity. Even those which were built in the last few decades are already calling for considerable expenditure.
I thank the noble Lord for having asked his Question. I commend Her Majesty's Government respectfully for their commitment to rail traffic through the Channel Tunnel and I hope that they will pursue that policy in a concerted manner.
8.15 p.m.
Earl Attlee: My Lords, I have to declare two interests. First, in about four years' time I shall be in receipt of a very modest pension from British Rail. More importantly so far as the debate is concerned,

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I am chairman of a public relations and marketing company which has as one of its clients the largest container company in Europe, Tiphook International plc.
There have been various attacks on British Rail. Whenever I hear of such an attack, my hackles rise like one of Pavlov's dogs and I have to answer the attacks, since, for seven years, I was a public relations officer at Waterloo. Perhaps I may thank the noble Lord, Lord Mountevans, for raising the Question and then take him to task. He mentioned that speeds on the Continent are 180 miles per hour in France and Belgium but only 100 miles an hour in the United Kingdom. Looking at a map of France and at one of the United Kingdom, it is obvious that our railways twiddle all over the place. However, the French, in order to get speeds of 180 miles an hour. have had to build new tracks. To build such tracks in southern England would cost an absolute fortune.
The noble Lord, Lord Deedes, said that there was no capacity. I think he was speaking of London and the South-East. In fact, all the trains are coming up to London in the morning and it would therefore be possible to send freight trains from London down to the Channel ports.
The fact is that British Rail has the smallest subsidy of any railway in the world. The Southern Region also has the most highly utilised railways in the world. The train service between Working and London has been acclaimed as being the most highly successful and the finest railway system between any outside station and the capital. I went with the noble Lord, Lord Ezra, to visit Calais. As I understood it, the reason we were late was that the train was slowed down so that we could look out the window and take photographs of a minuscule hit of the tunnel workings.
I do not see how British Rail can do its job without government intervention; nor how it can find out of its own finances the rolling stock that it has to build and all the infrastructure unless it reduces services or puts up prices, which would be unacceptable. The fact remains that after all these years and two false starts at last we are to build the Channel Tunnel. I believe that when the tunnel is built it will have a dramatic impact on the whole country—the commercial world, the passenger-travelling world and everyone.
There are still people who are opposed to the Channel Tunnel, as far as I can see for three reasons. First, they are worried about rabies. I think that that fear has been shown to be of no consequence because one can build under the rail tunnel the biggest rabies trap in the world; no animal that went in would ever get out. The next reason is the worry about terrorists. To my knowledge there has never been a terrorist attack on the two tunnels under the Thames, the tunnel under the Mersey, any of the tunnels going through mountains in Europe, or indeed on any tunnel anywhere in the world.
The third reason is even more peculiar. People say that we are an island—we all know that—and if there is a link between the United Kingdom and Europe we shall no longer be an island and therefore the invading hordes will come pouring through the tunnel. That seems to me to be equally stupid.
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I believe that the Channel Tunnel will provide fast, uncomplicated and, above all, weatherproof travelling. No more will heavy goods vehicles travel down our main roads and motorways to reach the Channel ports and then, because there is fog, or very rough seas, sit in huge parks waiting for the weather to clear. With the Channel Tunnel it does not matter what the weather is like; in the tunnel the weather will be perfect.
It is freight traffic that will make or break the Channel Tunnel. I do not think that it matters how many millions of passengers travel through the tunnel from our side to the other. That will bring revenue to British Rail, but it is merely gilt on the gingerbread. I believe very sincerely that in the chunnel (I keep saying that but in my own mind I call it the "Chunnel" and I must not)—in the Channel Tunnel, it is freight that matters.
As far as regions are concerned, once we have a Channel Tunnel our goods for export can be loaded in the Midlands, in Scotland, or in Wales, and the next day they can be in the heartland of Europe, which is the largest export market open to us. For the first time we shall be able to compete with our Continental rivals purely and simply because we can get our goods to destinations such as Paris, Dusseldorf, Milan or Rome, as fast as our competitors from France or from Germany.
Having said what I have about the Channel Tunnel, I am amazed that I have not bought any shares in the project.
8.24 p.m.
Lord Underhill: My Lords, like other noble Lords who have spoken, I am grateful to the noble Lord, Lord Mountevans, for initiating this debate at this time. He dealt at some length with the position of Network SouthEast; I prefer to go a little wider in my remarks.
Unless there is any slip-up, the tunnel will he built and operating by 1993. Surely the task now is to secure for Britain's railways, for industry and the regions the full potential benefits of this great project. I echo what the noble Earl, Lord Attlee, said. Let us not overlook the fact that Britain gives the least financial assistance to its railway system of any country in Europe. That must not be overlooked when we talk about the question of further necessary investment in British Rail.
Reference has been made to the £400 million investment already approved for British Rail, which the noble Lord, Lord Deedes, has analysed. The noble Lord, Lord Ezra, stressed the fact that the French have recognised the possibilities and the potential and are investing heavily not only in rail but also in other associated developments. Together with other noble Lords, I participated in the visit which took a preliminary look at what has taken place.
The potential for rail passengers has been emphasised, and I need not dwell on it, nor on the significant time saving. However, surely it is critical to the operation of the passenger rail services that there should be the introduction of on-train Customs and passport controls. The Government made a clear commitment to that system, but there seems to be

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evidence of continuing resistance to the proposal from Customs and Excise. It would be helpful to hear from the Government about the progress of negotiations on this vital matter. There is not the slightest doubt—and the Government accepted this view during the debates on the Channel Tunnel Bill—that on-train Customs and passport controls are essential to deal with the huge increase in passenger traffic through the tunnel when it is completed.
What financial help do the Government envisage for the development of through passenger trains on electrified routes from South Wales, North Wales, the West of England and the East Midlands as far as Sheffield? Are there any plans? It seems to me that we need fast through passenger trains with Customs and passport controls on board as well as on trains from London itself.
Most noble Lords have stressed that the potential for rail freight is greater than that for passengers. Some of us may feel that freight is of higher importance. I am one of those who at the outset said that unless there was provision in the Channel Tunnel for fast through freight trains then my enthusiasm for the scheme would be less. Let us not overlook the fact that at present British Rail carries only 2 per cent. of our international freight traffic. In comparison, the French railways handle 20 per cent. and the Belgian railways about 50 per cent. That shows how far we have to catch up if we want to increase our international freight traffic by rail.
We have always said that a great opportunity exists for faster and cheaper rail freight services over longer distances—we used to say in excess of 200 or 250 miles. However, I noticed in the Financial Times of 21st January:
"Technical changes in the capacity and reliability of wagons mean that rail is once again quicker and cheaper for journeys of more than 175 miles"
If that is the general position accepted by experts, then the potential for the advance of rail freight is quite clear. This could also make a great contribution towards restoring the economic balance between the regions of the country. At the moment freight traffic can be forwarded from the customer's own sidings, from rail freight and freightliner terminals. There is not the slightest doubt in my mind that the Channel Tunnel will stimulate increased demand for rail freight transport.
Although British Rail has stated that Section 8 grants—that is for private sidings under the 1974 Act—have tended to fall off in recent years, it is likely that demand for existing terminals will be expanded and new terminals will be constructed using this Section 8 procedure. I understand that British Rail have had discussions with customers and local authorities about the provision of public terminals and the requirement for inland clearance depots at major centres. This would appear to me to be absolutely essential if we are to reap the benefits of increased freight traffic.
British Rail believes that investment by the local community in freight facilities for international traffic could help to attract new development. The noble Lord, Lord Ezra, referred to some discussions
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—which were not altogether happy—with certain potential customers. I understand that British Rail will be happy to discuss possibilities not only with potential customers but also with local authorities as regards the development of inland clearance depots at major centres, but surely more needs to be done to promote and liberalise arrangements for the Section 8 grants for private sidings. In the United Kingdom there are only 1,500 private sidings. In France there are 10,600. In West Germany there are 15,500. The Association of Private Wagon Owners, which represent operators carrying 80 per cent. of British Rail's non-bulk freight movements, regards the development of more private sidings as essential to reduce the cost of rail freight. I presume that these Section 8 grants will not be affected by Clause 42 of the Channel Tunnel Act. I hope that the Government will be doing all they can to increase the development of Section 8 grants.
I was interested in what the noble Lord, Lord Dunleath, said about road and rail. However, there are considerable possibilites of combined road-rail transport. Perhaps I may say a few words about it. The development of road-rail transhipment centres will be important if the full benefits of the Channel Tunnel are to be derived by regions outside the South East. As was explained by the noble Lord, Lord Mountevans, at the outset, Section 40 of the Channel Tunnel Act places an obligation upon British Rail to forward practical schemes relating to measures vital to increase the use of rail freight by manufacturers. This section of the Channel Tunnel Act refers in particular to the development of,
"collection and distribution centres for goods",
and also the development of Customs clearance centres. Those two points are laid down quite clearly in the plan which British Rail must produce by 31st December 1989. Detailed studies with local authorities and industry will be necessary if that is to be achieved. Some financial assistance may be required by the Government to carry through these studies. The Government must be willing to approve capital schemes of local authorities and provide the necessary resources if these parts of the plan in Section 40 of the Channel Tunnel Act are to be realised.
British Rail is considering other initiatives to increase flexibility to meet customer needs. I shall not go through these in detail, but they are very interesting. I make some reference to them. BR is considering various types of inter-modal vehicles. One is the mini-link, with small containers capable of easy transfer from rail wagons to road vehicles—in other words, we have the rail-road combination. The maxi-link vehicles are ordinary containers for transfer from rail wagons to road trailer. The trailers themselves would carry very simple equipment for this purpose. Then there is the piggyback—a low floor rail wagon capable of carrying a road trailer within the existing British Rail loading gauge. Then there are swap-body trailers with exchangeable road and rail wheels.
I understand that all these developments will be undertaken by private manufacturers but they are carrying out their discussions in conjunction with British Rail's research centre at Derby. This is a rail

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road combination which will benefit the environment and our system of freight transport. I am informed that a report by independent consultants has estimated that up to 10 million tonnes of freight might transfer from road to rail if some way could be found of carrying road trailers on British Rail tracks—a system which is used very extensively on the Continent. This would be the equivalent of 3,500 heavy goods vehicle movements a day. The environmental benefits of this are therefore absolutely clear.
British Rail and the Government have stated that the Channel Tunnel must be viable and that social cost benefit would not be appropriate in appraising these benefits. If necessary, would not financial aid for inter-modal vehicles be justified either on financial grounds or on grounds of the social cost benefit which will arise? Reference has been made to Transport 2000. I understand that it commissioned some research into the question of this type of inter-modal wagon. The research concluded that, if fully exploited, the use of such wagons would reduce heavy flows on the eastern half of the M.25 by between 10 per cent. and 24 per cent. It that survey is accurate, those of us who occasionally use the eastern half of the M.25 can envisage the environmental benefit that would follow. The potential benefits to the United Kingdom regions are substantial.
The Government, local authorities and industry must be considering what help is needed in various directions. One need is absolutely clear. I believe that all noble Lords who have spoken have treated this as absolutely essential. There must be a modern, up-to-date rail network if full advantage is to be taken, in particular of the potential benefits of freight traffic. I echo the plea that has been made. It is hoped that the provisions of Clause 42 of the Channel Tunnel Act—the reference to there being no grants for the provision of international railway services—are not to be interpreted as preventing investment in improving our rail infrastructure or developing the road-rail transport combinations to which I have referred. If that is the interpretation, then I must ask the Government to take another look at this question, because it will be a great tragedy if, having gone thorugh all the discussions, having eventually constructed the tunnel, we find in operating it that the real benefit to regions and to industry in the development of freight traffic has not been realised.
Lord Hylton: My Lords, before the noble Lord sits down, will he agree that the common internal market is supposed to be in place by 1992, one year before the tunnel comes into operation? May we not therefore hope that both passport and Customs control will have been abolished between England and France?
Lord Underhill: My Lords, I am certain that the noble Lord is raising a different matter altogether. By the time those discussions take place in the Council of Ministers we might have found that we need dozens of meetings if what has happened on other matters has still not been realised. We must wait to see what the Council of Transport Ministers has to say about it and whether Britain agrees.
8.40 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the noble Lord, Lord Mountevans, has with his usual clarity and enthusiasm placed before the House his views on the Channel Tunnel and the benefits it would bring both to British Rail in particular and to the country as a whole. The contributions of other noble Lords show that he has raised a matter which excites considerable interest in your Lordships' House. I should like to join others in congratulating the noble Lord on initiating this debate.
I welcome the noble Lord's support for the Eurotunnel scheme, and his refreshingly positive attitude in wanting to see that the benefits of this great project are fully realised. The Government share this desire and are keen to ensure that the opportunities which the tunnel will bring for the railways, for travellers, and for industry and commerce, will be spread throughout the country. and not just concentrated in the South-East of England.
The regions stand to benefit from the construction and operation of the Channel Tunnel in two main ways. First, through job creation: Eurotunnel has so far placed contracts worth over £150 million—the majority of them with companies in the Midlands, the North and Scotland. That pattern is likely to continue, as the suppliers of the materials and equipment needed for the tunnel are concentrated in those regions. In total, Eurotunnel expects to place £700 million-worth of orders, and the work created by those orders outside Kent during the construction period is likely to exceed 50,000 man-years.
Jobs are also likely to be created in those same regions by British Rail's orders for rolling stock, which will probably exceed £200 million. The second main way in which the tunnel will benefit the regions is in the opportunities which it will provide for British Rail, and it is this aspect of the tunnel to which the noble Lord, Lord Mountevans, has particularly drawn our attention. The tunnel will integrate this country into the European rail network. Not only will the tunnel enable British Rail and its Continental partners to operate direct passenger services from London and other UK cities to European destinations such as Paris and Brussels, but it will also provide the opportunity for long hauls for British Rail's freight business, which becomes increasingly competitive with road haulage at distances over 200 miles. Indeed, the noble Lord, Lord Underhill, referred to the new figure of 175 miles which was quoted recently.
If British Rail successfully grasps these opportunities—and I am confident that it will—rail passengers will benefit from the new international services, using trains of the very highest international standards of comfort and quality, and rail freight consignors will gain from the reduced transit times which the tunnel will allow, helping them to he more competitive in reaching their European markets. Customers in the Midlands, the North, Wales and Scotland stand to gain particularly, with savings of between 24 and 48 hours for freight traffic to Continental destinations.

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I agree with the noble Lord, Lord Dunleath, that the environment will also benefit from the likely switch from road to rail freight. BR expects a threefold increase in its international rail freight traffic when the tunnel opens, which it estimates will help to keep 1,500 lorries off UK roads every day. The noble Lord, Lord Underhill, quoted a figure somewhat higher than that which was suggested by another recent survey.
In order to enable it to take full advantage of these opportunities, British Rail is planning to invest several hundreds of millions of pounds in connection with its services through the tunnel. The Government have already approved in principle much of the expenditure proposed, and we remain willing to support any further proposals for worthwhile and soundly-based investment.
The noble Lord, Lord Ezra, claimed that British Rail's investment in Channel Tunnel services pales into insignificance compared with the expenditure proposed by its French counterpart, SNCF. The noble Lord claimed that the French are investing nearly £2 billion in track and other infrastructure improvements compared with only £400 million being spent by British Rail. I welcome this opportunity to explain that those figures do not really represent a valid comparison. The figure quoted for French investment not only includes Channel Tunnel-related expenditure, but also investment in connection with other international services (for example between Paris and Brussels) as well as French domestic rail services, which will benefit from the TGV-Nord network. The investment properly attributable to Channel Tunnel services is less than half the total French investment. When one considers that the distance between Paris and the French portal of the tunnel is over twice that between London and the UK portal, British Rail's proposed investment compares reasonably favourably with that proposed by SNCF.
It is because the Government recognise the importance of tunnel rail services for the regions that we incorporated in the Channel Tunnel Act what is now Section 40. This requires the board to publish a plan setting out its proposals for through services between the tunnel and different parts of the UK. As well as the proposed pattern of services, the plan will include any proposals for additional investment in facilities such as freight collection and distribution centres, and inland Customs clearance depots, which the board considers will be needed to support its international services. BR is required to publish its plan by 31st December 1989, and it intends to make good use of the intervening period by consulting as widely as possible with interested parties.
The noble Lord, Lord Underhill, raised the question of on-train Customs and immigration controls. I can confirm that it is British Rail's view that on-train controls are essential if through-passenger services are to be provided to and from destinations to the north of London. Section 12 of the Act—which your Lordships may recall was added to the Bill at Report stage in this House—requires on-train controls to be provided for those services if BR asks for them and provides acceptable facilities.
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Discussions are already in progress between BR and the frontier control authorities on the implementation of this requirement.
It would be unwise of me to comment on the question posed by the noble Lord, Lord Hylton, about whether the completion of the internal market in 1992 will make all this unnecessary. That is something which the Government will have to consider very carefully indeed at Foreign Secretary level.
The noble Lord, Lord Mountevans, and most noble Lords, also raised the question of the capacity of the existing network between London and the tunnel to take the additional traffic which will be created by the tunnel. BR is quite satisfied that capacity will be broadly adequate to cope with the additional traffic when the tunnel opens. Where there is a conflict, which may arise in the case of traffic wanting to leave London during the evening peak, BR has given repeated undertakings that domestic services will not be curtailed as a result, and that international passengers will be encouraged to travel at other times of day.
British Rail recognises however that, by some time in the 1990s, assuming that traffic through the tunnel grows as expected, there will be no capacity on existing routes through Kent for further growth in commuter traffic or for the progressive development of international services. It is currently engaged therefore in a detailed assessment of options for augmenting route, seating and terminal capacities. My honourable friend the Minister of State for Transport has asked the hoard to let him have the results of its assessment by 1st June this year. We shall have to see what the report recommends.
My noble friend Lord Deedes said that not much of the £400 million investment proposed was for improvements to the track. That is true at present; but the study could identify need for additional investment on track.
BR's study will consider a large number of options. A new high speed line is only one of many possible options, and it seems unlikely to emerge as the most cost-effective solution for the future. If, however, BR wishes to propose a new high-speed line, then its plans—including any environmental effects—would be the subject, in the first instance, of consultation with the relevant local authorities and other interested bodies, and ultimately if it were to proceed, would require British Rail to promote a private Act of Parliament, as is normal for development by the board. So the House would clearly have further opportunities to debate this issue if it arose.
I, along with other noble Lords, was interested to read the press reports that Costain's may be interested in financing a new high-speed rail network. These ideas have not so far been the subject of any discussions with the Government. Clearly we should he bound to consider carefully any proposal which Costain's—or anyone else—might wish to put to us.
Finally, I should like to address the point made in the noble Lord's Question about government financial assistance. The Government are certainly prepared to approve any proposals which are put to us by the British Railways Board for worthwhile

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investment in connection with the Channel Tunnel. As I said, however, and as the noble Lord, Lord Ezra, quoted to me from the Third Reading of the Bill, we cannot consider any direct financial assistance to the board. Section 42 of the Channel Tunnel Act precludes the payment of PSO or deficit grants to BR in respect of their international services. This provision was included in the Act in response to widespread concern that government funds might percolate through to Eurotunnel by way of subsidies to British Rail, which could, for example, have enabled BR to pay tolls to Eurotunnel at a level higher than they could justify commercially. Our approach is also consistent with the Government's general policy that long-distance travel—by whatever mode of transport—should not benefit from government subsidies.
The approach enshrined in Section 42 of the Channel Tunnel Act appeared to be generally accepted in both Houses during the Bill's passage through Parliament. It means that British Rail's investments in connection with the tunnel must be justified in accordance with its normal commercial criteria. While such developments may be eligible for Section 8 grants or support from European sources such as the European Regional Development Fund if they meet the normal criteria for assistance, there can be no question of any form of special government funding.
Lord Ezra: My Lords, may I ask the noble Lord on this subject whether similar constraints as to government funding have been applied on the French side?
Lord Brabazon of Tara: My Lords, I understand that they have from the point of view of any funds which might filter through to Eurotunnel.
Given the advantages which the tunnel will create for British Rail and which I referred to earlier, there is no reason why this constraint should prevent BR from taking full advantage of the opportunities which will become available to it.
My noble friend Lord Deedes asked why the Government were paying for improvements to the M.20 when they would not pay for rail improvements. The motorway was needed anyway. It
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would have been built even if there were no tunnel. Motorists pay for road-building through fuel tax and vehicle excise duty, and so this is not a subsidy.
In conclusion, this has been an interesting and stimulating debate, for which we are indebted to the noble Lord, Lord Mountevans. I have listened carefully to the views expressed by your Lordships today, and I have tried to deal with as many of the questions asked of me as I could. If there are any points for the Government's consideration which I have failed to cover, I undertake to write to the noble Lords concerned. I have no doubt that the British Railways Board will have followed this debate with interest, and I am sure it will be happy to deal with any outstanding railway matters which your Lordships have raised. British Rail is certainly gearing itself up to grasp the great opportunities that the Channel Tunnel will provide, and I know that it is looking forward to the challenge presented by this historic project.

Whitchurch Bridge Bill
Committed to an Unopposed Bill Committee.
Greater Manchester (Light Rapid Transit System) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.

Greater Manchester (Light Rapid Transit System) (No. 2) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
House adjourned at six minutes before nine o'clock.