Lords Sitting of 24 March 1988

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

Royal Assent
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Multilateral Investment Guarantee Agency Act,

Local Government Act,

British Railways (London) Act.

Gibraltar Airport
3.1 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether, in order to facilitate the decisions to be taken by the Government and people of Gibraltar on the proposal to share the use of Gibraltar airport with Spain, they will produce and make available a document setting out in detail the provisions of the sharing agreement contemplated, together with the arrangements under which, if accepted, it would operate.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, the joint declaration of 2nd December establishes the political basis for practical co-operation between Britain and Spain over the use of Gibraltar airport. If the arrangements are accepted by the people of Gibraltar there will be further consultations at central government and local levels on their implementation, but no sharing agreement is planned.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that Answer. Is he aware that the people and Government of Gibraltar have to make, for them, an important and difficult decision? It is particularly difficult for them to come to a sensible conclusion without knowing much more of the detail of what is proposed. Is my noble friend aware that it would simply not be good enough to ask them to accept and then fill in the gaps?
Lord Glenarthur: My Lords, it is certainly not the case that the views of the Gibraltarians are being ignored. I understand the anxieties of the Gibraltarians, but the joint declaration gives as much as can reasonably be expected of it, considering the fact that the purpose of the committee for which the declaration provides is to co-ordinate the activities of the existing and the new terminals on detailed matters such as passenger and baggage handling.
Lord Cledwyn of Penrhos: My Lords, as a general election is being held in Gibraltar today I am sure the House wishes the people of Gibraltar an enjoyable day and a successful government. Will the Minister confirm that the new House of Assembly which will be elected as a result of the election will be required to ratify the Brussels agreement? Presumably Her Majesty's Government will wish that to be done as soon as possible. Can the Minister further confirm that his right honourable and learned friend the Foreign and Commonwealth Secretary will be seeking an early meeting with the new Chief Minister?
Lord Glenarthur: My Lords, I am sure that a meeting will take place sooner rather than later. I cannot say when it will be, but I can tell the noble Lord that the first step is for the agreement within Gibraltar to be made firm. That will depend on the election.
Lord Kilmarnock: My Lords, the Question asked by the noble Lord, Lord Boyd-Carpenter, is perfectly reasonable, but will the Minister confirm that it is the policy of the Government to make Gibraltar as self-supporting as possible, and that joint use of the airport will be conducive to that? Secondly—this is an important point—if the people of Gibraltar do not agree, through the election, to the arrangements for sharing the airport can the noble Lord say what effect that will have on the bilateral agreement of 2nd December between the British and Spanish governments whereby, I understand, Spain was induced to join the European air fares package?
Lord Glenarthur: My Lords, the noble Lord is certainly quite right that this agreement represents a good deal for Gibraltar. It offers the prospect of air links with the rest of Europe. It will attract more visitors and help tourism and financial services. To that extent it will be a major boost to the economy. There are also the parallel agreements on the reduction of delays at the frontier and resumption of the Gibraltar—Algeciras ferry service, which form part of the total package.
Lord Bottomley: My Lords, whatever happens in the election today, both parties agree that this suggested arrangement for the airport is unsuitable for the people of Gibraltar. Whoever is elected as Gibraltar's Prime Minister today, will the noble Lord ask the Foreign Secretary to consider seeing the Prime Minister in London and once more going over the matter before a final decision is taken?
Lord Glenarthur: My Lords, I think we must await the result of the election in Gibraltar but, as I said, I am sure that whoever wins my right honourable and learned friend will see him before long.
Lord Kilmarnock: My Lords, the Minister did not answer my second supplementary question. What will happen if the people of Gibraltar reject the agreement? What effect will that have on the European air fares agreement? Will the effect be to unravel the agreement?
Lord Glenarthur: My Lords, to some extent that is a hypothetical question, but there are major benefits for the United Kingdom and the EC. The EC aviation liberalisation package would be blocked. It would make cheaper air fares more difficult to achieve. Its passage will secure increased commercial opportunities for British airlines.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that if, as his replies appear to suggest, the details of the arrangement are not to be disclosed until the people of Gibraltar have reached a decision, he is putting that decision at very great risk and making it much more likely that the people of Gibraltar will reject the agreement?
Lord Glenarthur: My Lords, I did not intend to give that impression. There are regular contacts between the Governor's office and the Gibraltar Government, the press and the public; for example, through the Chamber of Commerce, airline companies, and so on. Indeed, a written commentary explaining the provisions of the declaration is also available for anyone who is interested, so I do not think that there is a lack of information.

FAO: UK Contribution
3.7 p.m.
Lord Walston Lord Walston asked Her Majesty's Government:
When they intend to pay to the Food and Agriculture Organisation the amount due on 1st January 1988.
Lord Glenarthur: My Lords, we shall pay our contribution for 1988 no later than 31st December.
Lord Walston: My Lords, my understanding is—and the noble Lord will correct me if I am wrong—that the payment was due on 1st January. Shortage of cash can cause very serious difficulties to the FAO or indeed any other organisation. Can the noble Lord inform the House whether it is the normal practice, not only of this country but of all other members of the FAO, to pay their dues roughly speaking a year in arrears? If so, what effect does that have on the finances of the organisation?
Lord Glenarthur: My Lords, as I said, we shall meet our obligation in full and we shall not fall into arrears. I can tell the noble Lord that it has been the practice in the past for us to pay 25 per cent. of our contribution in the first quarter, 25 per cent. in the second quarter and the balance in the third quarter. That is also the practice of other governments.
I can also tell the noble Lord that it is not the case that our action could provoke any financial crisis. The director-general said that, on the basis of existing reserves and forecast contributions, the organisation does not expect to experience cash flow problems until October, even if meanwhile the United States pays nothing.
Lord Tordoff: My Lords, will the Minister speak to his right honourable friend the Chancellor of the
290
Exchequer to see whether I could arrange to pay my income tax on a similar basis?
Lord Glenarthur: My Lords, that is something which the noble Lord should take up himself.
Baroness Ewart-Biggs: My Lords, does not the Minister agree that the work of the FAO in the promotion of agriculture in the developing countries and in the fight against famine is vitally important? Therefore, can the Minister say whether he has some criticism of the structure of the FAO and that that is the reason the Government are getting behind with their payment? If so, will the Government try to put this right within the structure of the FAO rather than withholding vital payments?
Lord Glenarthur: My Lords, I willingly agree with the noble Baroness. The FAO does some excellent work in global famine information and food standards. We believe that the FAO fails to identify its priorities, and its programmes are not all focused on the priority needs of each individual country. There is no reason to believe that anything damaging would be caused towards famine relief because of the way in which the money is paid. The reason is that the FAO at present does not need our money. We have taken the money into account in deciding what can be afforded for other programmes this year. There will not be the damage that the noble Baroness fears.
Lord Mayhew: My Lords, if the reason was not dissatisfaction with the FAO, what is the reason for changing what was previously a perfectly civilised means of payment? Are we here in line with the EC governments?
Lord Glenarthur: My Lords, we are in line with nearly every country concerned. Perhaps I may refer the noble Lord to Section 5.5 of the FOA's financial regulations. He will see that that section makes it perfectly plain that while contributions and advances shall be due and payable in full within 30 days of the receipt of the communication, the regulations also say:
"As of 1st January of the following calendar year the unpaid balance of such contributions and advances shall be considered to be one year in arrears".
Baroness Ewart-Biggs: My Lords, did the Minister imply that he was going to channel funds through bilateral assistance rather than through the FAO?
Lord Glenarthur: My Lords, I did not seek to imply that. I hope I indicated that the way in which the money is paid is not going to damage the famine work which the noble Baroness mentioned. Emergency and relief food aid is provided by the UN world food programme, by the EC and by bilateral aid donors and not directly by the FAO.
Lord Mackie of Benshie: My Lords, in an earlier answer the noble Lord made or implied some criticism of the programmes. Perhaps he will give us some idea of what the criticisms are.
Lord Glenarthur: My Lords, I believe I gave some criticisms just now. I add that it is technical expertise which is often not used effectively because of bureaucracy and bad management. In the past information on the organisation's finances has not been fully shared with member states. The director general has been re-elected for a further period of time, and there is every hope that the deficiencies which have been identified will be improved.
Lord Oram: My Lords, will the Government resist pressure either from the Heritage Foundation or elsewhere, to deprive the United Nations specialised agencies of their rightful funds?
Lord Glenarthur: My Lords, there are others who do not pay their full share, and it may be that they have not done so for some time. I hope that I have indicated that we support the work of the FAO, and that is what the Question is about.
Lord Walston: My Lords, if I understood the noble Lord correctly, we are in arrears with our contributions which should have been paid within 30 days of 1st January. Furthermore, we are more in arrears than normal. We have normally adopted the practice of paying 25 per cent. every quarter. This year we have not done so. Perhaps I may ask the noble Lord if he would consider it reasonable as a member of a club—as I am sure he is—to be in arrears to that extent with his membership fees. Would he not be ashamed of himself? Is he not equally ashamed of being a member of a government who are in arrears with their due contribution?
Lord Glenarthur: My Lords, so far as I am aware, the practice to pay it in the way I have described has been the case for many years, including the period in office of other parties. If the noble Lord reads Section 5.5 of the FAO's financial regulations, he will see that, while contributions and advances normally shall be due and payable in full within 30 days, the regulations are quite clear because they also say:
"As of 1st January of the following calendar year the unpaid balance of such contributions and advances shall be considered to be one year in arrears.".
I believe that sets out the position perfectly clearly.

NHS Nurses: Recruitment and Retention
3.15 p.m.
Baroness Young Baroness Young asked Her Majesty's Government:
How many nurses leave the profession each year, and what steps are taken to encourage those who wish to return to do so.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, the most common estimate for qualified staff leaving the National Health Service is 10 per cent. This means for the United Kingdom some 30,000 a year. Health authorities have been asked to mount back to nursing campaigns including refresher training and to provide more flexible working arrangements for those with family
292
commitments. Nationally, a Department of Health and Social Security and a National Health Service working party on equal opportunities for women will shortly make recommendations on managing the career break.
Baroness Young: My Lords, I thank my noble friend for that reply. In view of the importance to the National Health Service of the recruitment and retention of nurses, can he say whether this is a matter which is being looked at by the internal inquiry which is currently being conducted into the National Health Service? Can the Minister tell us the position regarding Project 2000?
Lord Skelmersdale: My Lords, I cannot tell my noble friend whether this matter will be looked at by the review. It has been looked at by the Project 2000 team. The Government expect to respond to that by Easter.
Baroness Seear: My Lords, may I ask the Minister what financial assistance is being given to women who want to take the back to nursing training programme? Is the Minister aware that I was informed not long ago of one woman who had taken it and who had to pay all her own expenses? Surely this is no way in which to encourage people into a very under-staffed profession.
Lord Skelmersdale: My Lords, it will vary in different parts of the country. The back to nursing campaigns are conducted up and down the country by the district health authorities. It is up to them to use such means, whether financial or otherwise, to encourage back to nursing campaigns.
Lord Ennals: My Lords, will the Minister accept the estimate of the Royal College of Nursing that there are now about 200,000 registered nurses who are in a sense the target for the back to nursing campaign? Will the Minister also accept that there are some very severe recruitment problems due to poor pay and stressful working conditions? There is also a drop-out rate of about 6,000 a year of nurses in training. Can the Minister confirm those facts?
Lord Skelmersdale: My Lords, no, not entirely. I observe that the United Kingdom Central Council and the Royal College of Nursing have made the estimate of 200,000. I am afraid that the Government's figures differ substantially. Our figures are some 90,000. Whichever figure is correct, this does not mean that these nurses are all lost to the profession for all time. They are mainly having a career break. This is where the point made by the noble Baroness comes in so strongly. They are caring for relatives or there are no suitable posts in the area and they are not prepared to re-train.
Lord Kilmarnock: My Lords, is it not the case that the London authorities alone are spending £40 million a year buying-in agency nurses? Is that not a very strong case for increasing the attractions for nurses in the National Health Service? Is it not further the case that the Project 2000 referred to by the noble Baroness is being studied by the noble

293
Lord's department at the moment? Will the department make a written reply?
Lord Skelmersdale: My Lords, I regretfully confirm that the number of agency nurses working in the health service at September 1987 was about 6,000; that is in whole-time equivalents. That is an increase of 15 per cent. over 1986. About 85 per cent. of these nurses are in the Greater London area. From asking questions around the special health authority hospitals, I know that there are occasions when agency nurses may be cheaper than full-time NHS-employed staff.
Lord Mellish: My Lords, is the Minister aware that young girls coming into the profession and training as nurses are being bombarded with propaganda from abroad, particularly from America? They are being told that when they qualify as SRNs they can earn far more money in America than they are likely to get in England. They are offered every possible inducement. What are the Government doing about that situation; can anything be done to counter it?
Lord Skelmersdale: My Lords, it is not the Government's philosophy to direct trained people in any particular direction even when, as in this case, they provide the training themselves. What matters is the quality of life. The recent reduction in the tax rates, thanks to my right honourable friend's Budget, means that it will be easier to keep those nurses in this country.
Baroness Cox: My Lords, is my noble friend aware that last year there was a successful recruitment campaign for more than 1,000 British nurses to go to the United States and 500 to go to Australia? Many of them were qualified specialist nurses. Will sympathetic consideration be given to recognising in terms of salary structures specialist qualifications and also regional shortages in order to encourage nurses to stay in service and in this country?
Lord Skelmersdale: My Lords, my noble friend is quite right, and this is another strand of the Government's policy. This is why we have asked the nurses and midwives' pay review body to do exactly that, with special emphasis on regional variations where there are regional shortages.
Lord Winstanley: My Lords, does the noble Lord recollect that in a recent discussion on this subject on a Question asked by the noble Baroness, Lady Cox, he gave some very encouraging information about the provision of affordable living accommodation for nurses? As I am always anxious to afford Ministers an opportunity to give good news, can he tell us anything else about developments on that front?
Lord Skelmersdale: Not at the moment, my Lords, but I can confirm that in areas such as Greater London high costs for living acommodation can make recruitment and retention especially difficult. We have therefore welcomed the announcement by the Nationwide and Anglia Building Society of a
294
scheme to provide low-cost 100 per cent. mortgages to help National Health Service staff cope with high housing costs in London. We hope to seek agreement to extend this scheme once it gets fully off the ground.
Lord Wallace of Coslany: My Lords, does the noble Lord remember that yesterday I mentioned the drain of nurses to the private sector and overseas? I proposed once again that a levy should be imposed to recover costs, which might help to give the nurses in the health service a better deal on pay and conditions.
Lord Skelmersdale: Yes, my Lords, I recall the noble Lord saying that and I recall specifically not answering him. However, it is important that we look at the level of nurses across the whole hospital and community sector, private and public. I am not sure that a levy would be the right way to go about this, but I know that my right honourable friend the Secretary of State for Social Services has recently suggested that the private sector itself should enter into discussions for nurse training.
Baroness Robson of Kiddington: My Lords, does the noble Lord agree that, as mentioned by the noble Lord, Lord Ennals, the number of student nurses leaving the profession due to excessive pressure because wards are not fully staffed is perhaps one of the most worrying aspects of the problem? Looking to the future, we shall not have a sufficient number of nurses and therefore we should concentrate on properly staffing the wards in which the students work.
Lord Skelmersdale: My Lords, I agree with the noble Baroness, but I would point out that at the moment in England there are 23,700 leavers, who are more than replaced by 7,100 nurses returning to nursing, together with 22,650 from the schools of nursing. That is a total of 29,750.
Lord Ennals: My Lords, is the noble Lord not concerned about the information he gave the House about a trend towards agency nurses? Whether or not they are cheaper—and I was surprised by what he said—does he not agree that it is far better for a hospital to be staffed by full-time regular employees than by people who may be in for a week or two according to what their programme is? Does that not show the importance of being able to attract by good pay and conditions new nurses into the health service?
Lord Skelmersdale: My Lords, the noble Lord misunderstood what I said. I said that I was concerned about the trend but I pointed out that there are occasions when agency nurses can be cheaper.
Lord Sefton of Garston: My Lords, arising from the question asked by the noble Lord, Lord Mellish, does the Minister accept that the Chancellor was right to give incentives in the form of tax cuts to the higher paid in order to keep them in this country? If he accepts that as right, can we not do the same for the nurses, or is this another example of the double standards of the Government?
Lord Skelmersdale: My Lords, I regret to say that the amounts of tax reductions for the higher paid have very little to do with nurses. What does have to do with nurses in terms of the Budget reductions is that the average female nurse will now have nearly an extra £3 in her pocket every week.
Lord Kilmarnock: My Lords, can the noble Lord give us chapter and verse for his rather—
Noble Lords: Next Question!
The Lord Privy Seal (Lord Belstead): My Lords, if the noble Lord will forgive me, it is the House itself which has agreed through the Procedure Committee that we ought to get through Questions in 20 minutes. We shall not do so today because we have another Question to come, but I think that the moment has come to go on to the next Question.

Litter Clearance in Hyde Park
3.26 p.m.
Lady Saltoun of Abernethy Lady Saltoun of Abernethy asked Her Majesty's Government:
What is the average annual cost of cleaning up litter left in Hyde Park by marchers and demonstrators.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, there is no cost to the Exchequer for clearing up litter after marches and demonstations. Before permission is given to hold such events the organisers must undertake to clear up afterwards. If they fail to do so, the department carries out the work and recovers the costs from the organisers.
Lady Saltoun of Abernethy: My Lords, I thank the noble Earl for that reply. Can he say how much it cost to clear up after the NUPE march on Saturday 5th March?
The Earl of Caithness: Yes, my Lords, I can tell the House that the TUC was sent a bill yesterday for £615·54.
Lord McIntosh of Haringey: My Lords, the Minister has been able to give the House the cost to the organisations concerned of the British democratic right of assembly. Will he now tell the House how much it cost to put down litter for his right honourable friend the Prime Minister to pick up yesterday?
The Earl of Caithness: My Lords, the litter that my right honourable friend picked up yesterday had already been put down by members of the public. I am sure that the whole House would condemn that.
Lord Grimond: My Lords, is the Minister saying that the litter which was especially put down for the Prime Minister was in fact put down by the public? It was widely reported that it was carried into the park in a public cart. Can we be given an assurance that it has been taken away?
The Earl of Caithness: My Lords, it was a day's collection from the park itself.

Regional Development Grants (Termination) Bill
3.28 p.m.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, I beg to move that the Bill be now read a second time.
The subject of the Bill is the closure of the regional development grants scheme which was introduced under the Industrial Development Act 1982, as substituted by the Co-operative Development Agency and Industrial Development Act 1984. The transitional arrangements for running down the earlier RDG scheme are not affected by the Bill.
The Bill has two main clauses. Clause 1 removes the power to make grants for projects unless applications are received on or before 31st March 1988. Clause 2 places restrictions on the availability of grants for projects in respect of which applications for approval are received after 12th January 1988 except where applications are in respect of projects started on or before that date.
I explained the background to this and other changes in the policies of the DTI when I made a Statement to the House on 12th January about the White Paper then published—DTI the department for Enterprise. I offered some further elaboration in the debate in your Lordships' House on 19th February. On that occasion I drew attention to our two goals—to set the framework within which industry competes both at home and abroad and to encourage individuals to develop their enterprise and their skills in business. That is the context in which our decision to end regional development grant was taken.
Our aim is to ensure that all parts of Great Britain are able to strengthen and improve their economic performance, and create lasting jobs. The fact that we have a policy for the whole of Great Britain does not mean, however, that we overlook the special problems of particular areas. It means a strong and effective regional policy. It means a policy which seeks to tackle underlying weaknesses in the performance and development of firms, especially in the assisted areas.
It is the Government's belief that support for business consultancy to strengthen the management performance of smaller firms has a particular role to play. That is why the grant towards these services will be two-thirds of the total cost in those areas compared to half the total cost elsewhere. We are also introducing two new investment and innovation grants for very small firms in development areas as from 1st April next. And regional selective assistance will continue to be available throughout the assisted areas. This will provide the effective help which firms need, when they need it, to succeed in today's economic conditions.
We believe, in particular, that these incentives are the right ones to help prepare firms for the European developments. It is now that firms need that type of

297
help to sharpen up their competitiveness for the completion of the single European market in 1992, let alone the Channel Tunnel, which is scheduled to open the following year, in May 1993. Those changes will open up the European market to British firms but they will also open up the British market to European companies.
Firms will be operating in a new environment of a single market of some 320 million people—nearly as many as the United States and Japan combined. There will be significant new opportunities—but also significant new challenges—for which British business needs to plan ahead and prepare for now. I believe that we have got off to an excellent start.
I am pleased to report that applications for consultancies are coming in at the rate of 70 a day, and we have had some 47,000 inquiries on our freephone number. Many firms have welcomed the effort to improve management performance by encouraging greater use of outside consultancy in tackling day-to-day problems. The DTI regional offices are reporting a very positive reaction from potential client companies.
I also said that we were keeping the long-standing and successful programme of regional selective assistance. We acknowledge the merits of a selective scheme of assistance, and we believe that RSA must continue. There have been many misunderstandings about the way RSA operates. It does not operate by picking winners. Applications are tested objectively against published criteria, which include whether assistance is necessary for the project to go ahead in the assisted areas on the basis proposed, and also that the project should contribute to both the regional and the national economy.
We draw heavily on private sector experience to help us to assess applications for RSA but it is for the company itself to decide in the market place whether to go ahead with the project. Moreover, the private sector must put up most of the money for a project. The role of government is merely to provide the additional incentive which makes the difference between going ahead or not, so that more projects take place and ultimately more jobs are created in the assisted areas.
The Government are not changing the essential criteria for RSA. Firms which were previously eligible to apply for RDG will be able to apply for RSA. However, we cannot guarantee that all of those firms will be successful because RSA is selective, while RDG was not. It is inevitable that some projects will not meet the criteria for RSA, criteria which are published and which include an assessment of whether the project would go ahead without assistance.
Some critics have suggested that the acid test of our commitment to regional policy is the level of expenditure we are providing for regional aid schemes. I do not accept that this is a mere question of volume, without looking at the quality of our schemes, and whether they are really what the customer—the company itself—actually needs. As a nation we often fall into the trap of ignoring the importance of quality.
298
However, having said that, I must emphasise that we are not cutting expenditure, and the fact that we are keeping RSA underlines this. We plan to increase expenditure allocated to specific schemes of aid to the assisted areas. For example, if one looks at our expenditure on regional aid—that is to say, on regional selectives assistance, regional development grant and the two new investment and innovation grant schemes for very small firms in the development areas—one will see that some £900 million in total is planned over the next three years, compared with some £700 million in total planned in the 1987 White Paper which extrapolates some expenditure into 1990–91.
The changes we are making must also be set against the background of a steadily improving economy. The UK economy is on a sustained upturn. It has had nearly seven successive years of steady growth, at an average annual rate of 3 per cent., and has grown faster, since 1980, than all other major European Community countries.
Our strong growth record is not just a phenomenon of the South-East. That is clear from the way unemployment is falling everywhere. Furthermore, since it started falling 19 months ago the rate has fallen fastest in the West Midlands, the North-West, the North and Wales.
It is generally expected that the United Kingdom will remain in the top two of the world growth league this year as well. Whichever way you look at it, the evidence is that growth is here to stay. Manufacturing productivity has grown faster than all other major industrial countries since 1980. Since 1981, after decades of relative decline, the UK has stabilised its volume share of world trade. Industry is now returning to the level of profitability it needs to compete and profitability is back to levels not seen since the early 1970s. Industry now has confidence in the future. This confidence is shown in investment plans. Business investment in the fourth quarter of 1987 was 12 per cent. up on a year earlier. The DTI investment intentions survey shows that companies expect 8 per cent. growth this year, and a further increase next year. Finally—and I believe most importantly—inflation, the major threat to sustained growth, is low and stable.
Those are the conditions against which we have judged it both timely and right to refocus the means by which further achievement can be encouraged, particularly in the more disadvantaged areas. I believe that keeping RDG would, quite simply, be a misdirection of resources, in many cases to little or no effect. An automatic scheme by its very nature always carries the risk that grants are bound to be paid to companies which would have proceeded with their projects in any event. That risk is bound to increase in any period of rising investment.
We do not believe that a scheme of near automatic grants, given towards projects without prior assessment being made of either need or viability, is any longer a cost effective and sensible way to help the regions. Such a scheme is also wrong for the firm which is looking to improve its competitive edge, not for continued reliance on automatic state handouts which are more likely to blunt its initiative.

299
I know that there is particular concern about inward investors, who are looking at a number of countries to judge which might be the best site for a new development. Of course competition for international investment is fierce. And this country has to be in a position to compete with its neighbours. I believe that we can compete well, even without RDGs.
The financial incentive of selective assistance is I believe a more than adequate attraction, in line with what many other countries are now offering as they too move to a more selective type of assistance. But selective assistance is unlikely to be the most important factor in decisions of inward investors. The UK has inherent advantages and the availability of selective assistance is often not even necessary for inward investors to make up their minds about locating in our country.
Besides our strong economy, we have one of the lowest corporate taxation rates in the industrialised world, low production costs, positive industrial relations, excellent access to Europe, worldwide trading links, modern international communication links, and not least, the English language. No other country can offer such a powerful mix. That is overwhelmingly the verdict of inward investors. Four out of five companies recently surveyed said that their performance in Britain has been in line with, or better than, expectations. Three out of four investors said that their experience in Britain has been so positive that they are currently planning further investments.
I was in Japan last week. Sanyo announced that it was adding two further factories to the one it already has in this country. The company told me that it came because of the state of our economy and its experience in this country. That is far more important than any grant.
In addressing the main purpose of the Bill, as set out in Clause 1, I have deliberately sought to cover a broad range of related issues which are relevant to the enterprise culture that we are seeking to foster. Let me conclude with a brief review of the transitional arrangements set out in the other substantive clause of the Bill—Clause 2. Clearly it is important to ensure that the transition from the present policy framework to the new one is achieved on fair and equitable terms which do not undermine the legitimate expectations of companies. Clause 2 of the Bill is designed to that end. As I said, its purpose is to set out the restrictions which will apply on payment of grant to projects which were the subject of applications for approval received after 12th January 1988 and on or before 31st March 1988; and which commenced after 12th January 1988.
Let me emphasise that the restrictions do not apply to any other projects. Projects started on or before 12th January (provided an application is submitted by 31st March) and applications received on or before 12th January will be completely unaffected by the closure arrangements. The restrictions which Clause 2 goes on to specify represent, I believe, a very fair and reasonable arrangement, in terms both of the likely effect on firms, and the perfectly legitimate need—the decision having been made to terminate
300
the scheme—to ensure that the scheme does not run on into the future in an open-ended way. The restrictions apply from 13th January; that is, from the day following the date of announcement of closure, and that seems right and reasonable. Otherwise firms would have the opportunity, which I fear that they would undoubtedly take, to put in large applications in the full knowledge of impending closure. There is a two-year time limit for counting jobs and assets for grant. There must be a limit, for reasons of efficiency and budgetary control, to the financial claims which a closed scheme can make into the future.
However, we have taken a careful look at the position of present RDG projects. Some 90 per cent. of projects are completed within two years, so we can confidently say that the majority of projects will not he affected by the time limit. This clause is therefore a necessary and reasonable adjunct to the provision in Clause 1 for the scheme to be closed.
To conclude, the Bill is part of the wide-ranging enterprise strategy which we outlined in the White Paper. The initiatives set out in the White Paper are, as I have said before, about widening the scope for self help; the emphasis is on people, management and, above all, the private sector. This emphasis is particularly important and relevant in the assisted areas. Economic and social disparities still remain between those areas and other parts of the country. It is in those areas that there is a need to give special encouragement away from the old heavy industrial economy, towards a modern economy based on self-generating local growth. That is why we remain committed to an effective regional policy; but we must ensure that our resources are well spent. I do not believe that a near automatic scheme will be cost-effective.
The new focus on management development will, I believe, be effective together with selective assistance where it is required for projects to go ahead. That is what we are offering, and what we believe British business in the regions needs to be competitive. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Young of Grallham.)
3.46 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Lord, Lord Young, for introducing the Bill which, although short (two clauses) is of great importance. The Secretary of State made a wide-ranging speech some of which, I hope he will forgive me for saying, I have heard before. Your Lordships will also have heard it before. I suspect however that the Bill, although short, is not wholly innocuous. It marks the end of a bipartisan policy, which has existed for many years, between governments of both parties, and which we on these Benches believe has had a good measure of success.
There are three questions on the Bill that I invite your Lordships to consider. First, how committed are the Government in reality—I know what the noble Lord said—to regional policy? Secondly, are the criticisms that have been levelled at the regional development grant scheme valid? Thirdly, what advantages and disadvantages flow from the

301
abolition of RDGs and the transition to a discretionary scheme of regional selective assistance?
Your Lordships may be surprised that I put the first question at all in the light of what the Secretary of State said; because there is a substantial section on regional policy in the DTI White Paper, and various ministerial statements, including the statement from the noble Lord today, express enthusiasm for regional policy. Nevertheless, I believe that there is some room for doubt. After all, philosophically —if I may speak like that for a moment—the whole notion of creating advantages for one region of the country over another by any form of subvention, be it grant or assistance, runs counter to what I believed to be the present Government's philosophy; that is, that market forces should have their play. Regional policy is, has been and will be designed to do exactly the opposite; to use public funds to correct market distortion; to buck the market—if I may use an expression that has recently gained a certain topicality.
We on these Benches are glad to see that the Government proclaim that they are still committed to a regional policy; that some degree of good sense survives. But we have to demonstrate that regional policy has been successful in the past and to argue our view that, in order to be successful in the future, it should continue to get maximum emphasis from the Government.
To demonstrate that let me take as an example one part of the United Kingdom, Wales. Let me take two yardsticks: net population movement and relative unemployment rates. Between the wars, when there was no such thing as regional policy, Wales lost an average of 25,000 people a year through net outward population migration. This outward drift continued after the war but at a lower rate as the regional policy started to bite. Between 1951 and 1961 the total net outward migration was 35,000, which was an average of 3,000 per year. Between 1961 and 1971 it was down to 10,000, an average of under 1,000 a year. From 1971 to 1981, Wales experienced a large net inward migration of 71,000 people—some 6,000 a year on average. Since 1979 and the weakening of regional policies, that inward flow has stopped. Between 1981 and 1986 there was little net movement either way.
It would obviously be absurd to relate this change in population movement uniquely to regional policy, but it must be right that when a regional economy is in relative health more people will stay there and fewer will look elsewhere for work. That must be good for balanced national growth. It is regional policy that serves to correct the relative disparities between different areas of the United Kingdom.
Let us now look at relative unemployment rates. In the 1950s the unemployment rate in Wales was double the national average. Today, the Welsh rate is some 25 to 30 per cent. above the national average. In absolute terms of course the Welsh rate is still extremely high, but policy aimed at narrowing the differential between Wales and the rest of Britain has been reasonably successful at a time when employment in the basic industries, which provided the great base for the Welsh economy, has been
302
dramatically decimated. What is true of Wales—that regional policy has been effective—is also true of the rest of Britain. Indeed no fewer than three different reports on regional incentives commissioned by the Department of Trade and Industry have said that regional policy has made, in the words of one of them, "a real and substantial achievement". So we must hope that this Bill does not mark the Government's final retreat. We must hope that our suspicions are unfounded. But suspicions I am afraid there are.
We note, as a senior Conservative in another place noted, that the DTI objectives only use the expression "take account of the differing circumstances in the regions"; not, "do something about" those differing circumstances. We note that when the RDG scheme was changed in 1984 we were told that the major disadvantages—what we might call in the jargon the Sullom Voe phenomenon—had been removed and that no further changes were needed.
Finally, we note, making what we can of the maze of figures that the Government have issued and which I personally find extremely difficult to understand, making allowance for the transitional arrangements of what are known as RDGI and RDG2, which will still require outlays in 1990–1991, that there is I am afraid a deep suspicion that what we are actually seeing when we compare the new arrangements directly and cleanly with the old arrangements, is a steady decline in real terms which will take effect in the next decade unless there is a change in direction.
If regional policy as a whole has been a success, it also appears that the regional development grant scheme has been a success. Each of the three government-commissioned reports that I have mentioned praised the RDG scheme. It is valued by industry, or at least it was valued by industry in December 1983, unless the Government's own White Paper of that date is to be disbelieved. That White Paper says:
"Industry attaches considerable importance to a grant scheme which incorporates standard rates of grant, is predictable in its application and which by virtue of its predictability, can be taken into account at all stages of making investment decisions".
Thus ran the Government White Paper of December 1983.
I do not know what has made industry change its mind. I do not know what has made the Government change their mind. It seems from what the noble Lord said that the Government's argument is that unemployment has fallen faster in the assisted regions than it has in the rest of the United Kingdom or Great Britain. Apart from that being a reason for keeping a successful scheme in operation, this argument falls when we look again at the relativities. The true test is surely the percentage reduction in the unemployment rate itself. On this test, the assisted regions have done worse than areas like the South-East and South-West, East Anglia and others. What that really means is that unemployment generally is falling, but that the differential between the assisted areas and the non-assisted areas, the buoyant areas in the South, is actually widening.
I turn now to my third question. Nothing is set in stone. I t may be that regional development grants are

303
out of date or that somebody has changed their mind. There may be good arguments for greater selectivity, although I must say that we have yet to hear them. It is difficult to quarrel with the conclusion of a group of Scottish economists, again in a report commissioned by the DTI which said:
"Our evidence shows that a mixture of automatic and selective assistance, taken together, provides a powerful package".
The disadvantages of moving to a scheme consisting wholly of selective assistance are evident. Since nothing is automatic, as the noble Lord said, companies cannot build anything into their investment calculations. First, they have to decide whether to embark on the project at all, then apply for assistance. No other procedure in terms of company finances makes sense. They then have to provide reams of information to government officials, including detailed trading forecasts and so on. Next they have to convince those officials that their project is a viable one, yet at the same time they have to convince the officials that they need assistance. That seems a pretty odd proposition. Finally, if they do receive assistance, they will find that instead of being able to account for it as a capital grant and applying it straight to the balance sheet, they are required to pass it through to the profit and loss account and, if they are in profit, to pay tax on it at 35 per cent. I remind noble Lords that if the project is not projected to be profitable they will not get the assistance.
There is also the problem of the capacity of what I would call the bureaucratic machine. Perhaps I may again refer to Wales as an example. In 1986 the number of RSA offers in Wales was 137. In the same year, 1,180 projects were approved for RDG. Let us assume, if the Bill is enacted, that some applicants will drop out, since they do not need the money. Let us assume that other applicants will drop out because they regard the procedure as being too tedious and time-consuming. Let us be generous and say that together those two factors might eliminate 300 to 400 applicants. There would still remain about 1,000 applicants a year to a system which is at present dealing only with 137.
The Explanatory Memorandum to the Bill says that staff requirements will decline. I imagine—and perhaps the noble Lord will confirm this when he comes to speak again—that there will be a corresponding increase and more than a one-for-one increase in other parts of the DTI and elsewhere, because I simply do not see how the machine can cope with a transfer of that nature from RDG approvals to RSA applications. Equally, the new investment grant and innovation grant schemes will also be discretionary. That will further add to the load.
Finally, there is the problem that the noble Lord touched on, that of picking winners. Whatever the noble Lord may say, any discretionary scheme involves the exercise of discretion. I thought that the Government were wholly contemptuous of the practice of allowing civil servants to indulge in picking winners. Yet inevitably with a discretionary scheme, we do seem to come back to that, unless the RSA scheme is made virtually automatic.
304
That is the first requirement that we would ask of this Bill or of an accompanying statement of government policy. The criteria for RSA should be clear and comprehensible so that companies will understand that they will receive the same degree of security which they had under the RDG scheme. Secondly, the assistance under the RSA scheme must be capable of being treated as a capital grant rather than as a subvention to the trading account. Lastly, the Government must state firmly and without equivocation that, after making adjustments for the RDG2 run-off and any clawback through the RSA tax effect—if our second point is not accepted—the regional spend will not decline in real terms. I am not talking about the regional budget but the regional spend.
There is a tendency in some quarters to think of regional assistance as some kind of charity—an aspect of the dependency culture about which there has been so much ill-judged comment. That is quite wrong. There is a saying in Wales that Cardiff is because the Rhondda was. Equally, London and the South-East are because the older industrial regions were. But regional policy is not just paying off old debts. It is redressing the effect of market forces so that the old industrial regions can once again thrive—I think that the noble Lord would agree with me here—not just as branch economies but as economies in their own right. That is not charity; that is plain common sense.
4.2 p.m.
Baroness Seear: My Lords, we recognise that in the application of the old regional development grants there has inevitably been a certain amount, and perhaps a considerable amount, of waste in that money has gone to organisations that would have gone ahead in any case and in some cases it has certainly not been used as well, as wisely and as productively as it might have been. We are certainly ready to consider changes in the scheme.
However, the substitution of selective assistance for the standard development grants raises a large number of questions. The Secretary of State has already touched on some of them and some have been raised in one form or another by the noble Lord, Lord Williams of Elvel.
The first matter I wish to raise is inward investment. There can be no doubt—I am sure that this is common among us all—that in this country we want the maximum amount of inward investment. However, I am not so sure that that principle is common to us all when we hear the cries of alarm that go up if any bit of British industry is being purchased by foreign money, which otherwise seems to be greatly welcomed. But that is as it may be. In general we surely want to encourage foreign investment. Only in the last week we have seen that, if it is to come here, foreign investment requires stable and reliable conditions.
There can be no doubt that the certainty that regional development grants gave to foreign investors was a very real encouragement. I am sure that if one asked such organisations as the Scottish Development Agency, which works very hard to get

305
foreign investment, they would say that the fact that they were able to offer foreign investors the certainty that those grants would be available was of substantial importance.
The Secretary of State said that other conditions in Britain were so good and so attractive that he was finding that firms overseas were still willing to come here. It would perhaps be rather unkind to ask the Ford Motor Company whether that was the case. But, he that as it may, all those advantages were there and still are there but in the past there was the added advantage of the certainty of the grant. Foreign investors will no longer have that certainty so surely the attractiveness must in any case be somewhat reduced. I should like the noble Lord to say in rather more detail how he expects to continue to attract foreign investment particularly to those areas where we need new plants, without the very substantial inducement which existed in the past.
When it comes to the selective grants perhaps I have not studied this matter carefully enough and the answer is already there. Does this mean that we shall be able to deal with an issue which has concerned many of us for a long time—the fact that the regions are not necessarily the best form of defining the need for grant? There are very severe black spots in good regions, just as there are white spots in very bad regions. I am not sure whether "severe" is the correct adjective there; perhaps I should have said deep black spots. Does the new selective process mean that some of those very bad spots in the South-East (in Kent, for example) will be able to receive the kind of assistance which would not previously have been available? Will this new system be a freer and more flexible way of administering the grants that are available?
As regards the selection of people who are to receive grants, the noble Lord said that what was required of them was clearly laid down. Seeing is believing and "clearly laid down" as regards documents issued by government departments is not a common description of what is put out. It may be that this is the exception to the rule, but I wonder whether all the people who will be interested in the scheme will find the requirements as clear as the Secretary of State has suggested. As he would agree, and as I think the noble Lord, Lord Williams of Elvel, was implying, the mere business of applying for a grant can be very costly and time consuming.
The kind of people who will need grants and who ultimately will qualify for them are people who obviously have no time or money to waste. Unless it is very plain what a company's chances are of getting the money, it should be discouraged from applying and not encouraged. Will the Minister make it quite clear to us how plain the facts will be made to people as regards whether they stand a reasonable chance of getting the assistance? I think that there will be a great deal of wasteful, time-consuming and in the end very bureaucratic work being done to no good purpose unless the suitability of applicants is made very clear indeed.
The Secretary of State said both on this occasion and when he talked to us about this matter before
306
that a great deal of help was going to come in the form of consultants. I have nothing against consultants. Many of my best friends are consultants and all that. But I am sure that we all agree that there are consultants and consultants, to put it mildly.
I am sure that the Secretary of State will say that the entrepreneur himself will select the consultant and he must be the best judge. I very greatly wonder whether that will be so. By what criteria are these consultants to be recognised? I understand that the Government will pay three-quarters of the cost of the consultants. That will add up to a very considerable amount of money. What standards are being applied? Who will make the judgments about whether the consultants are worth the money? How will we be able to check up on the effect of their work, because as I understand it a great deal of the effort, and therefore money, will be put in via these consultants?
Could we know a little more about where these people will come from? There is no standard qualification for them. In whose judgment will they be suitable?
When the noble Lord discussed this matter before I raised with him the fact that, among the categories of consultants who were going to be recruited and whose payments were going to be supported, there was no category which dealt with the whole area of human resources and with the selection and, above all, the training of people. I should be very surprised indeed if the Secretary of State did not agree with me that, in the establishment and the development of these companies, adequate training of the staff whom they will use is of the very highest importance. That is the area which is I suggest on the traditions of small companies in this country the most likely to be ignored. When I raised that matter in January, the Secretary of State was replying. He accepted that the list of consultants and the categories which he had given us did not exist. Has he given more thought to that matter? If so, what does he propose to do about it?
The Minister knows better than anyone how inadequate training in this country has been. The companies to which we are referring are of the kind that do not give a thought to training, to put it bluntly. They are not likely to do so unless somebody puts the idea into their heads fairly forcibly. Perhaps the Minister will tell the House what he is going to do about that.
Finally, I should like to say that, although we accept that aid of this kind has value and is necessary, we on these Benches believe that what is needed is a far more devolved approach to regional improvement. If there was a great deal more control over regional development in the regions themselves and if the people who had control in the regions on a devolved system were able to judge what was needed and had the resources to put into what they saw as being necessary, at the end of the day that would be a better way of using the money.
That was borne out when we, in conjunction with Shirley Williams, were looking over a period of time at the development which had gone on throughout the country in job creation and new employment opportunities. We found again and again that some

307
sort of regional authority, with funds which could be directed by it, would have been an extremely valuable way of giving the maximum effect to the efforts of different people in different parts of the country. They would have been greatly helped by a strong regional agency with funds of its own.
4.12 p.m.
Lord Sefton of Garston: My Lords, I do not often speak in Second Reading debates. There is not much point in doing so. No vote is taken at the end of the debate. I know that the Government want to state the principles on which the Bill is founded, and from that point of view it may be useful. However, I like to participate in debates in which at the end of the day those who speak can take a position. We cannot do that today because of convention and various other matters.
We have just heard a speech by the Minister which consisted, if my estimate is right, largely of telling us how good the economy of this country is. He pointed out the growth of the economy, the fall in unemployment and how well we are striving to achieve a new enterprise culture which will cure all our problems. However, all that is nothing to do with the Bill.
The Bill is flawed and the speech made by the Minister was flawed. He did not concentrate on the subject matter of the Bill, which fundamentally says that the steps that have been taken up to now to assist development areas are not good enough and that we shall have a different kind of assistance. When we remove the diatribe and get down to the basic facts, the Bill says that the old grant did not work, it did not have any success and it was wasteful. Therefore, we shall now have a selective grant. By the very nature of the selective grant, it will mean—regardless of what the Government say about the amount of money for which they are budgeting—that there will be fewer grants in assisted areas. Previously grants were automatic; now they will depend on selection.
Let us examine whether the grants which we have had up to now have worked. The Ford Motor Company of Great Britain knew that it had to build another factory. It knew that it had to get into the big-car-making league. It wanted to go as close to Dagenham as possible. However, the government of the day said: "No, we do not think that you should. You should not concentrate there. After all, Great Britain, compared to other places, is a small island and we think that you should go somewhere else—to Liverpool". Ford did just that, on the basis of an automatic development grant which enabled it to set up the Ford plant at Halewood. That was actually an extension of the production line at Dagenham. That was a good arrangement. The same happened with Vauxhall.
I believe that those two schemes would not qualify for a grant under the selective assistance rule. It is evident that both Ford and Vauxhall at that time had the necessary cash to make such an investment. They would not have qualified. The net effect on Merseyside would have been that there was no cushion to fall back on when other industries in that area folded up.
308
In 1940 when Harold Wilson, as he then was, was at the Department of Trade, we sent a delegation to London. We did not ask for development grants. We asked for a fair share of the resources of the nation. We pointed out that we should prefer not to be listed as a development area. However, we believed that we were entitled to a fair share of what was going and that we should be allowed to develop on the basis of the resources which were being diverted from the South.
I make no apologies for the fact that since 1945 and before that time voices in Liverpool raised the prospect of a drift to the South, which has continued ever since. When we are told of the growth in the nation and the fall in unemployment, I suggest to the Minister that he should go to Lime Street at five o'clock on a Monday morning and tell that to the young people who are having to travel on the "Tebbitt Express" from Liverpool to London in order to work.
The Minister in the White Paper says that he does not believe in forcing people to go where they do not want to go. I agree with that. However, the policy of this Government is forcing people to go where they do not want to go and most of them are the unemployed of Liverpool. The Minister should not talk to them about the fall in unemployment.
What is happening is that there is growth in certain areas in the United Kingdom. The Bill is supposed to deal with the termination of aid to special areas. Let us concentrate on that. If the Government believe that the scheme should be changed, that they are going to be spending as much money and that regional aid is about moving jobs from one place to another, why do we not have a proposal to do that somewhere in the Bill? There is no such proposal. All the Bill says is that there will be selective rather than automatic grants. That is not good enough.
I challenge the Minister to say in effect that more people will be assisted to set up in such areas than are assisted under the present scheme. He knows that there will not be. He is nodding his head, and I suppose that means he knows that there will not be.
Lord Young of Graffham: There will be.
Lord Sefton of Garston: The Minister thinks that there will be. That is quite simple. How long will it take? I hope that the Minister will be in the same post in 12 months' time because I shall ask him what increase there has been in grants to the Merseyside development area. I know what the answer will be—if I receive an answer.
In the debate on this subject the Minister also said that there were a number of valid and important points to which he would give consideration. I went through the Hansard record of the debate and listed some of them. We were to persuade people to move north. That was surely a valid point because the overcrowding in the south is now leading to rows between Mrs. Thatcher and the Chancellor, in which the noble Lord himself seems to be getting involved. So it must be a valid point. But where in this Bill is there any move to persuade—not force—people to go north? Nowhere.

309
The question of regional pay differences was raised by the noble Lord, Lord Simon. The Minister responded and said that he would deal with the question. I do not see anywhere, either in his speech or in the record of that debate when he replied, that he dealt with the question of regional pay differences. What does he mean by regional pay differences? Does he mean that regional pay should differ in order to persuade people to fill posts in the areas where those posts are needed? Or does he mean that there should be regional pay differences in areas in the United Kingdom which are recognised by most responsible people to be in an uncivilised state? If the overcrowding and the distasteful things in life occurred in London and the South East we should pay people more to live there: is that what he means by regional pay differences? If it is not perhaps he would take the time to explain to us what he means by regional pay differences. What does he understand by regional pay differences? A branch economy?
Nobody in their right senses, who understands industry today, and particularly multi-national interests, really believes that anyone would set up a head office or even a major manufacturing exercise in Liverpool. If they look at the map they will realise that Liverpool is not the place. It is neither in the centre of a market nor is it in the centre of growth. We have seen figures showing that unemployment in the North West is falling, but where in the North West? If they went to the North West in all probability they would site those activities in and around Manchester and Leeds, which are the centre of the market and of the distributive network.
As Professor Ridley said (I do not mean the other Ridley, I mean Professor Ridley of Liverpool University), commenting on the plight of Liverpool as distinct from the plight of Manchester, geographically Liverpool has been stranded. If Liverpool was not there no one would invent it. In 1945 we pointed out to the Government of the day, and later we pointed out the same thing to Mr. Heath when he was Prime Minister, that what happens in boom and slump is that we go into a boom and the South and the affluent areas benefit but when the cutback comes—as it will surely come in the next 12 or 18 months—the less affluent areas are the ones to suffer. They go still further back into recession. If one looks at the developments in the United Kingdom as a whole on the basis of regional figures, one sees that that has been the pattern since 1945 and it will continue unless we do something about it.
So we are not going to have any improvement unless the Government could set up a main sector that would generate jobs in itself. It is an amazing fact that when the Government have in their hands the distribution of 620,000 Civil Service jobs, most of which could be centred anywhere in the United Kingdom, they never even mention it. However, we are told that the Department of Trade and Industry even had the courage and foresight to set up regional offices—consisting of about 10 men in each.
Lord Young of Graffham: Nonsense!
Lord Sefton of Garston: My Lords, perhaps he will give us the figures and tell us how many people will be in those wonderful offices that will recreate the economy in the regions, and where they will be sited. I very much doubt whether we shall get the answer. I have asked the question before and the Minister has had plenty of time to reply.
I shall not deal with the question of the uncertainty of the grant position. That also was raised in the debate. But I should like to hear what the Minister has to say about what I think was a most valid and important point raised, not by me, but by other Members of this Chamber in the debate. If those are not the valid and important points which the Minister said that he would consider, let me ask him: will he tell us today, because he should know now, what were the valid and important points that were to receive his very serious consideration? I use his own words. Tell us, today. I shall be interested to hear what they were.
I do not believe that the Government are serious about the question of regional assistance. I believe that Members of the Government have come to the conclusion that they can afford to write it out; that they can afford to forget it. They can produce glossy brochures which purport to tell us nothing about the fundamental problem, just as they produce glossy figures about the number of people employed. They jiggle the figures about, put some more people in training and before you know where you are Ministers can stand up and say to both Houses of Parliament that they are solving the unemployment problem. Nothing could be further from the truth. I believe that the Government want to bury the regional problem. But it will not go away.
I have said before in this House, and I say again, that if we do not remove the obstacles to decent progress in the South East of England, the private sector will get fed up with competing for buildings, secretaries and administrative assistance and move. I ask is it likely that any finance house, or the people who adminster the so-called capital centre of Europe—London—would move north? Of course they would not.
There is a very great possibility (as is already being mooted by estate agents just outside the other end of the Channel Tunnel) that when the Channel Tunnel is built the move will be in that direction. It may well be that the capital centre of Europe will be a damn sight nearer Paris than it is to London. That is a very real threat. No, the Minister says it is not a threat. He does not believe that it would happen. Will anyone deny that already the private sector is suffering problems of congestion in the South East? So we are not pleading only for Merseyside and Northern Ireland—and the Minister should go and talk to them about unemployment—I am pleading that the whole of the United Kingdom should be considered as a whole in regard to regional problems—not assistance. We should look at the problems in the South East and how they can be rectified. I believe that by proper planning on the part of central government there is a very real prospect that regional problems will be solved. The Government should not just talk about giving assistance to development areas.

311
The development areas have never wanted to hold out the begging bowl. They just want "fair do's". People do not want to have a levy imposed on business or to pay through their income tax in order to fund the extra expenditure on civil servants living in London, some of whom are now receiving almost £2,000 a year to compensate them for being in the capital.
I have mentioned before and I make no apologies for saying again that all the administrative offices dealing with unemployment, except for those standing in direct relation to Ministers in Parliament, should be sited close to the source of the unemployment problems. It should not be a case of just moving 6,000 civil servants out of a total of 600,000. The Government have been boasting about devolving administration since 1979. I see that the Minister is shaking his head. I do not know whether that means that he does not believe me. That information came in a reply to me from his department only a fortnight ago. The figure was 6,000. The previous Government had agreed to send 3,500 civil servants to the North West in order to relieve its problems, but within a few months this Government had scrapped the idea.
What a difference that would have made to the city centre of Liverpool. Instead of the developers having difficulty in finding occupiers for a building, the building would immediately have been full, which would have generated another 3,000 jobs at least. It would have cured some of the problems there. It would have had no effect at all on the South East. There has never been any problem about growth in the South East. There has never been a real unemployment problem in the South East. The unemployment problems are in the regions.
I think that this is a bad Bill. It is a Bill which is flawed. I sincerely hope that at the Committee stage an amendment will be moved and the Government will respond to it by indicating what else they intend to do to assist in solving the problems of the regions other than simply talking about selectivity grants. I challenge the Minister—and I shall repeat my challenge later. If selectivity grants are introduced in preference to automatic grants, in 18 months' time we shall finish up with fewer applications, less movement to the regions and fewer successes. Regardless of what the Minister says, still more will be spent from government funds on assistance to the South East of this country than is spent on the rest of the country in the areas that most need such assistance.
4.32 p.m.
Lord Taylor of Gryfe: My Lords, there is a certain finality about the title of this Bill: Regional Development Grants (Termination) Bill. As the noble Lord, Lord Williams of Elvel, said, it signals the end of an agreed policy in using investment grants as an instrument of economic policy and regional development.
I speak from the Social Democratic Benches but I want to assure the noble Lord, Lord Williams, and my noble friend Lady Seear that I share some of the concerns that they have expressed. As a party we are
312
not indifferent to the problems of the region. Like a good consensus politician I should, first, like to establish common ground. Despite what has recently been said, I accept that the Minister is concerned about solving the imbalances in our society. The disagreement with him comes on the methods taken to achieve that end. However, I am sure he accepts that, so long as there are large areas of our country that have substantial unemployment with people feeling a deep resentment and believing that they are neglected, there will be very serious political implications in the expression of that resentment.
In my part of the world in Scotland the fate of the Conservative Party is indicative of the kind of resentment that is felt because the people there believe that in the past the Government have neglected them. In itself the growth of Scottish nationalism is a very dangerous reflection of that feeling. It is politically undesirable and economically wasteful. The high prices of land and houses in the South East and the under-utilised infrastructure in the North and the less favoured areas represent an imbalance and are a wasteful economic phenomenon.
Let us agree that we have common ground in believing that in any regional policy we are seeking to stimulate investment, create jobs and redress the regional imbalance. There is no need to argue about those common aims. However, we have to decide whether the instrument that is now proposed is likely to achieve those objectives.
As the Minister invited us to do, perhaps we may talk a little not only about the content of the Bill but also about the general strategy in regional policy. What influences investment decisions? My own experience of attracting inward investment to the UK leads me to believe that the regional incentives that existed—that is, automatic regional grant—were an important factor in any decisions that were made. I had the pleasure of being seconded to the previous Conservative Government and travelled throughout Europe with the Secretary of State for Scotland. We visited companies and businesses and we talked to banks about inward investment in Europe. At the head of the list of priorities was the recognition that at least they could claim certain automatic grant as basic.
There were other items and one of the important factors that influenced decisions was labour relations. It is a great sadness to me as a Scot to have witnessed the events at Dundee over the past weeks. That has been extremely damaging to the prospects of regional development in that area of high unemployment. I am delighted to see the noble Lord, Lord Williams, nodding assent to that view. I hope that the damage can be repaired at an early date. Just to show that I am even-handed, I say to the Minister that stability of exchange rates is also sometimes a factor in influencing decisions.
Certainly continuity of policy is important. That worries me just a little because when people make decisions about investment they look for some continuity in policy. Let me reflect for a moment that three and a half years ago in November 1984 a new policy was enunciated in this House by the Government. It was said that we were moving to a

313
situation where an attempt was being made to create a single objective, which was to reduce regional disparities in opportunities for employment on a stable and long-term basis.
That was in 1984. So much for a long-term basis. However, that new policy was proposed and accepted by this House.
We must ask why there has been such a dramatic change. Have the regional development grants failed? I do not think that they have, but one has no right to discard them until evidence is produced that the new selective system will be more effective.
The DTI has many reports on this subject because the question of regional policy is regularly reviewed by it. I have a report beside me which goes back a long while. Between 1960 and 1981, it was estimated that 784,000 new jobs were created as a result of positive regional policy. Of these, 600,000 continued to be in existence after 1981. That may be regarded as a long time ago, but the last annual report of the DTI in February 1987 dealing with regional development grants said:
"The scheme is an important factor in investment decisions".
If the Minister's department takes that view, it would be interesting to speculate why he has now changed his opinion in that regard. It is true that we are all suffering from the Sullom Voe syndrome. Sir John Harvey-Jones, the former chairman of ICI, said that many of our investment decisions were made, and we would have made them anyway, without regional assistance. But one has no right to generalise on the basis of these two exceptional cases in order to withdraw the entire system of regional development grants. The scheme which is now operating and which is about to be scrapped takes care of such cases as Sullom Voe and ICI.
I commend the Minister to read a speech made by a distinguished colleague of his who fairly recently occupied his important office. He said:
"I am not persuaded of the benefits of the proposal to drop the Regional Development Grant".
That was said by a responsible former Minister fairly recently. He then went on to argue, as has been argued this afternoon in this House, on the uncertainty of the selective principle.
Let me visualise for a moment the financial director of a major company who comes to his board and says, "We ought to do this". The question is asked by the board, "Do we get a regional grant? We are going into an assisted area. What form of government assistance do we receive?" The answer is, "Yes. I shall negotiate that with the DTI. I shall need to prove my case. I shall need to prove that my proposal is likely to be viable and to conform to standards of modern technology, design and so on on the various criteria that are laid down".
The board may say. "This will take some time". With the increase in the number of cases that will now be processed, it will certainly take some time and may easily frustrate an investment decision. Someone in the boardroom may say, "Let us go to Southern Ireland. We can expedite things much more quickly dealing with that authority's much simpler procedures with automatic grants". Alternatively he
314
may say, "Let us go to some other European country that still retains the automatic grant". Companies will not wait. The Ford Motor Company became tired after five months of frustration before it ultimately had to make its very critical but very unfortunate decisions. Who will process these decisions? Has the Minister the staff? Will there be an increase in bureacracy? Is there not a danger of frustration of investment decisions which may easily be injurious to his objectives?
The noble Baroness, Lady Seear, made reference to the use of consultants. When the Minister made his original Statement about the Department for Enterprise and the increased use of consultants, I looked at the list of public companies quoted on the Stock Exchange to see whether there were any consultancy companies. There are not. They are all private partnerships in private companies, but this is a bonanza for the consultancy business.
The thought is not original. This was done by the Scottish Office only a few years ago. I recall a very interesting decision in which the Scottish Office said that it would pick up the tab on consultancy fees in order to encourage business and to make it more efficient in Scotland. I had a friend who had a very successful business in the West of Scotland in an assisted area. He said to a well-known firm of consultants, "All right, if you can improve my efficiency, that is fine. You come and help me". It said, "Yes, we can improve your profits". He asked, "How will I do that?". The consultant said, "You will get much lower labour costs in your kind of industry in Southern Ireland". He was promptly recommended to move to Southern Ireland. He has since sold his business very profitably—all based on the advice of a consultant, with the tab picked up by the Scottish Office.
There are good, bad and indifferent consultants. I find very often that if one commissions a consultant who does it for nothing, or very little, one is not inclined to take his advice. If one gets a McKinsey fee one reads it thoroughly and takes it very seriously. We have to watch what we are doing in this connection. The consultancy device in this Bill provides for not only two-thirds for the assisted areas but 50 per cent. for the unassisted areas—that is for companies in the prosperous South-East of England—of the consultancy bill to be paid under this scheme.
The ICFC has a delightful scheme which I commend to the Minister. It has consultants in the organisation. It says to the companies in which it is interested, "Use our consultancy services", and then it submits the bill. It says that if companies have not recovered in increased profits and efficiency the amount of the bill within six months, then the bill will be cancelled. I wish that a similar discipline were applied to the consultancy business in general. I commend this example of the ICFC to the Minister.
I shall not argue about the reduction in costs. The Minister has said that there will be no less money spent. However, in estimating the cost over the next two years there is an overlap of the present scheme plus the new scheme. We are in fact talking about the amount of government money that will be spent on

315
original aid two years from now. That is when the crunch will come, that is when the overlap ceases. I am not persuaded that the amount of money that will be spent on regional aid in these circumstances will be more—indeed, it will be substantially less—than the 1986–87 figure.
I have a certain admiration for the Minister's enthusiasm and confidence. I wish that I shared his confidence. We are making a very dramatic change in the direction of regional policy. It is a considerable gamble. I am sorry that I cannot share his enthusiasm or confidence, but I wish him well.
4.49 p.m.
Lord Young of Graffham: My Lords, I am very grateful to the noble Lord, Lord Williams of Elvel, for those comments, for his contribution to our debate and for his not inconsiderable history of the economic development of the Principality. However, his memory, alas, is failing him, because I recall that there was a very effective regional policy in the valleys before the war. If he looks at Treorchy, at many of the industrial estates that were built and indeed at the origins of the Welsh Development Agency and at the development of the agencies themselves, he will see they all came out of a regional policy that worked in the 1930s. It was aided by many people who came to this country during the 1930s bringing their skills with them. That indeed made a considerable contribution to the economy of South Wales.
Incidentally, I willingly accept that in some decades after the war there was a considerable movement of population into the Principality, not always out of it. The North-South divide was almost a North-West movement. The noble Lord did not take fully into account the enormous changes that occurred during that decade in which employment in many of the old traditional industries failed and disappeared. The policy of my department as set out is clearly that we should take account of the circumstances in the regions, not necessarily that we should do anything about the regions because we believe that the private sector is best fitted to do things to help themselves.
Running throughout all the contributions to the debate has been a misunderstanding. My department is not moving from a policy of automatic grants to one of selective grants. The regional selective assistance has been in place since the early 1970s and it will continue in just the same way as before. That does not represent any change in policy. What we have done, of course, is no longer to continue with an automatic system of grants which has been shown time after time not to aid regional policy.
The study to which the noble Lord, Lord Williams, referred, the Moore, Rhodes and Tyler study, found that during the period 1960–1981 (which was the period that the noble Lord boasted about) each new job created cost £40,000. That is a very considerable cost indeed for job creation. It not only does not represent good value for money—value for money is the theme that runs throughout this afternoon's discussion—it does not take into account the displacement of jobs elsewhere. I am concerned, as
316
should be all in your Lordships' House, about the creation of jobs not only in the regions but a net increase in the economy as a whole. The principle of regional selective assistance takes into account national as well as local benefit in any project.
The most recent report on RDG, the report by Peeler in early 1986, found that nearly 40 per cent. of firms said that not getting development grants would have had no impact on jobs. It is not just John Harvey-Jones, who appeared on a television programme on the night of the original announcement, saying that the existence of RDG had had no effect on his planning for many years. Captain after captain of industry said that to me in the months before. They would take it if it were available, but in itself it did not make the difference. It was something that was quickly forgotten. They were more concerned about many other matters.
This afternoon considerable criticism—concern perhaps more than criticism—has been expressed about the amount of bureaucracy involved. The existing procedures for selective assistance are well tried. We are streamlining them for smaller applications. Indeed, it is small firms who need the help most and there are now simplified procedures for applications for assistance under £25,000. We do not impose upon civil servants the obligation of picking winners. I would have thought that the principle of selective assistance would commend itself to the noble Lord, Lord Taylor of Gryfe. Many projects would not have gone ahead without that assistance. The selection we leave to panels of industrialists throughout the land. They often have to apply difficult subjective tests when trying to decide whether or not, with the absence of that procedure, the project would go ahead.
Much has been said about the automatic nature of the scheme and how much assurance that would give overseas investment. That automatic nature is rapidly ceasing to find favour elsewhere. The Federal Republic of Germany has recently abolished its own automatic investment allowance scheme. Changes are happening in France, because all across Europe we are finding that in inward investment automatic grants are not enough.
I referred earlier this afternoon to my visit to Japan last week. There I spoke to many of the Japanese companies who have investments in this country. Going round the country during the rest of the year I speak to many inward investment companies about their experiences here. Since I came to my present department —it happened even in my last department—I am always asked what would make companies decide to come to the United Kingdom. I recall vividly in 1982, when I first visited Japan, being told time after time that the climate was not right in the United Kingdom—by that they meant industrial relations—and that it was absolutely necessary, if they were to go anywhere, that they should go to where they would be assured of a sensible approach by a workforce that was willing to become part of their firm. It was not the availability or lack of availability of grant that deterred Ford. Ford had all the grants it wanted. It was just that it did not have the right climate in which to see the way ahead. That

317
is by far the most single important factor in a good regional or good industrial policy for the nation.
The noble Baroness, Lady Seear, talked about the encouragement of foreign investment. I should like to join in that encouragement, but it depends on how the economy as a whole goes. The noble Baroness criticised—I have heard it before from other places this afternoon—our enterprise initiative and the use of consultants. May I say one or two things to make the situation quite clear and to reassure the noble Lord, Lord Taylor of Gryfe. This is not a general consultancy scheme. It is a series of specific schemes which are in areas of admitted weakness in British industry. They are in design, in marketing, in quality control and in production systems. The consultants we take arc those which, in the design field, are on a panel approved by the Design Council and only on that; in the case of marketing they are on a panel approved by the Institute of Marketing and only there; and the Production Engineering Research Association is responsible for quality and manufacturing systems. We keep a close eye on the output of these consultants and should some prove not to be up to the mark then we shall ensure that they are no longer on the list. This situation is monitored, and we shall continue to monitor all the way through to ensure there is value for money in the output of their work.
The noble Lord, Lord Taylor of Gryfe, was slightly dismissive of the fact that unless people paid for their consultants they would not value them. I agree totally. That is why we insist with all consultancies between five and 15 days that we shall pay either one half in the rest of the country of two-thirds in assisted development areas. That still means a considerable investment by many companies in the assisted areas because often the consultancies are for more than a period of 15 days and we do not pay the balance. I assure the noble Lord that the companies will consider closely the value for money they are receiving. If they are dissatisfied with the work of any consultants we shall be the first to hear about it.
Baroness Seear: My Lords, as the noble Lord apparently seems to have disposed of me, will he answer my question about the complete absence of consultants in human resources, particularly on the training side?
Lord Young of Graffham: My Lords, I wish to reassure the noble Baroness that I doubt whether I shall ever be able to dispose of her in the way that she has mentioned! I was coming back to her question. I believe that at the moment there are sufficient consultants to provide the services at the level we are now looking for. I believe that we shall see a movement of individual consultancies from the South to the regions because that is where the demand will begin to occur, a possible expansion in the number of consultancies and in the number of consultants as demand for, say, marketing consultants causes people with those skills and abilities to leave other companies and to set up or join consultancies where they can offer their services more
318
widely. That is a function of the market. I hope that by this time next year we shall be able to report clear evidence of that. I assure the noble Baroness that as yet there is no evidence of any shortage of those skills. In that limited sense I am sure that the market will work in order to ensure that there are sufficient skills.
I fear that I have not answered the point raised by the noble Baroness as regards training, but that is another matter with which the training commission is continually concerned. Skill shortages are appearing up and down the land, in the regions as well as in the South. It is a matter which we must continue to pursue and I believe that evidence now shows that companies are taking training much more seriously. However, I should like to see clearer evidence—
Baroness Seear: My Lords, will the Minister answer a terribly important point? Companies will carry out a great deal of in-service training and I am sure that he wishes that to be so. However, they will need help if they are to carry out training on the job.
Lord Young of Graffham: My Lords, I accept the point, although it is some way from the topic of the Bill and the function about which we are talking. Nevertheless, the work of bodies such as the training commission is an important and integral part of regional policy. We are not talking about whether the Government have a regional policy; they have a regional policy. We are not talking about whether they spend money in the regions; we are proposing to spend more money. We are talking about an effective regional policy and the best way of spending that money. I believe that we shall achieve that through the changes originally announced in the White Paper entitled DTI—the Department for Enterprise.
The noble Lord, Lord Sefton of Garston, was slightly dismissive about the good state of the economy. I believe that to be fundamental to the question of whether people will come—
Lord Sefton of Garston: My Lords, I did not say that at all. I said that the growth to which the noble Lord referred was in certain places and that there was a lack of growth in other places.
Lord Young of Graffham: My Lords, I hate to disagree with the noble Lord but I am afraid that he is incorrect. I shall return to that matter but I should like to point out that he was also incorrect in his figures in relation to civil servants. As I told him on the last occasion on which we discussed this matter, my department has many civil servants outside London; over 6,000. The total number in my department is 12,500, over half of which are outside the Greater London area. As regards the insolvency service, we shall move out a further 1,000 who are at present in inner London. In my last department over 90 per cent. of the civil servants were outside London. There is no question of all the 600,000 civil servants being in London and the South-East. Many of them must be here but I suspect that a large majority work in the regions.
If one looks at the way in which the economy has developed over the past few years, one sees new

319
businesses moving in and growing in the North-East, the North-West, Wales and Scotland. We must not give automatic grants but we must give help which will assist in the creation and growth of the economy and in creating more jobs.
The noble Lord asked whether this time next year we shall see an increase in grants. I doubt that very much because we are moving away from giving grants. I hope that we shall see a considerable increase in jobs, businesses and prosperity in the regions arising from the change in direction which my department has taken.
Lord Williams of Elvel: My Lords, will the noble Lord answer my question about regional selective assistance; the assistance scheme going through the profit and loss account, whereas the RDT is a capital grant? Is it possible to make the assistance scheme a capital grant?
Lord Young of Graham: My Lords, part of the process of deciding whether regional selective assistance will be granted is consideration of the fact that grants go to companies where they will make a difference as to whether or not the project will go ahead. (This also relates to another question which referred to grants being given only to those companies which have funds.) In such finely balanced circumstances the fact that the money comes in in terms of income should not automatically go towards raising questions of tax. Regional selective assistance has always been on the income side of the balance sheet and I think that to change that at this stage would be a retrograde step. I hope that it will be effective and targeted in areas and to companies which will be helped the most. So far it has proved to be a far more effective instrument of regional policy than automatic grants. I believe that maintaining the situation will provide the best method of continuity and will ensure that it continues to grow.
The noble Lord, Lord Taylor of Gryfe, asked why we are making the change, because surely continuity of policy was important. It is important, but to continue with a policy which appears no longer to work is not a good strategy. As this decade has gone by we have seen a considerable change in the regions. Perhaps the noble Lord will note what has happened in Silicon Glen. He should consider the number of companies that have moved to Scotland and the enormous increase in business in Scotland. He will appreciate that, in terms of those unemployed. Scotland spends far more per head of the population than the rest of the United Kingdom. Perhaps he will accept that Scotland has grown not because of the failure of regional policy; it is to the credit of the Scottish Development Agency that Scotland continues to grow and I believe that these policies will help it to grow even faster. The fate of my party in Scotland is another matter entirely and I suspect that it will be totally unconnected with regional policy.
If the noble Lord honestly believes that the existence of a regional grant will make a difference to a company deciding to leave Scotland—forget Scotland and let us say England—to leave England and go to Ireland, he is not the shrewd man of affairs
320
which I have long considered him to be. He knows full well that companies invest for sound economic reasons for the future and not because of the temporary stimulus of a grant.
I vividly recall a visit to Belfast and in one morning visiting six closed factories, each of 1 million square feet. They all had closed as a result of past regional policies. Our present regional policy will work by moving towards selective assistance and by helping companies to grow. That will set a firm foundation for the growth of the economies, for the growth of the regions and for the most desirable of all objectives—an end of regional policy when the regions become indistinguishable from the rest of the country.
Lord Sefton of Garston: My Lords, this is the first opportunity that the Minister has had to give the results of his consideration of the valid and important points—to use his words—that were raised in the debate on the White Paper. Would he now care to do so? Did the Minister not hear my question?
Lord Young of Graffham: My Lords, I should be happy to write to the noble Lord on points which have not been covered and which are a long way from the Bill. He is continually asking that we should transfer government departments to the regions. On the last occasion I reminded the noble Lord that I was responsible for moving the head offices of the Manpower Services Commission from London to Sheffield, which I believe can still be considered to be a region. In Bootle, in the North-West, a considerable number of people are in employment. I believe that the Department of Employment has more than 90 per cent. of its civil servants employed around the country, and that is true of most civil servants. However, I shall be happy to write to the noble Lord giving a full breakdown of the figures.
I believe that, as we have heard this afternoon, we are setting a firm foundation for the future.
Lord Sefton of Garston: My Lords, before the Minister sits down, it would be wrong for me to ask him to accept personal responsibility. I asked what the Government's attitude was. Fifty-two per cent of all civil servants are still employed in London and the South-East. What do the Government intend to do about that?
Lord Young of Graffham: My Lords, I believe that it is a matter of congratulation that 48 per cent. of civil servants are not in the South-East. However, London happens to be the centre of government I remember that on the last occasion I said that I should be quite happy if this House were to move to the North-West, but some things are impossible to move.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Hampstead Radio Station Bill [H.L.]
5.10 p.m.
Baroness Phillips: My Lords, I beg to move, That the Bill be now read a second time.

321
Although I have been in the House for 24 years I still fall into the trap of believing that a Bill that looks simple is simple when it is anything but simple.
I am president of the health and safety officers and I was approached by the fire officers who asked whether I would move a Bill in your Lordships' House—and who better than the fire officers to fight for us in difficult situations? I therefore assumed that the Bill was simple. I am beginning to think that I must have been simple. I went to meet the officers and asked how many clauses this Private Members' Bill had—was it two? I was told that it had 20 clauses. That should have alerted me. I then found that a Bill that seemed simple, straightforward and acceptable by everybody was in fact very complicated. That was highlighted by a Clerk of the Table who said, "You're a brave lady to move the Bill". I am not a brave lady; I am one who wishes to put forward a simple proposition in the hope that your Lordships will accept it.
I did not realise even then that all the inhabitants of Hampstead would be alerted to it, including the Opposition Chief Whip, who lives there. I shall be described as the enemy of the people. I can only say to your Lordships that I come to the House with this simple proposition of a Private Members' Bill.
The London fire brigade covers the whole of the Greater London area. It has 100 fire stations, with some 250 fire engines and specialist vehicles available on immediate call, which any one of us might need at any time. The current establishment is in excess of 7,000 firefighters. It is essential, as is self-evident, that the fire engines should be able to reach the scene of a fire in the shortest time possible. The fire brigade considers it essential that there should be efficient radio communications between mobilising controls and fire engines to meet the strict requirements of the Home Office as to the time between the call and the arrival of the fire appliances.
We know that if those who serve us—the police, ambulances and the fire service—do not come at the time they are called, they are under criticism. The mobilising controls must be able to communicate with the fire engines as soon as they have left the station. It is also important that communications should be available to request further assistance, including specialist equipment and other emergency services. That much is beyond dispute.
It would not be helpful in the debate to appeal to the emotions. It is tempting, but not what I am trying to do. I am endeavouring to put forward the factual evidence. It is important to bear in mind the facts about availability of fire fighters and fire fighting equipment. That is the background of the proposals in the Bill.
To achieve communications between the mobilising controls and the fire engines it is necessary to have radio stations which must have radio access to every part of London. The fire brigade has four radio stations. One is in Hampstead in the grounds of Queen Mary's Hospital. For several reasons the existing mast at Queen Mary's Hospital is no longer adequate to meet the needs of the brigade. I shall give
322
some of the reasons, but I beg noble Lords not to press me to give others. I am here as an innocent abroad dealing with facts that have been given me by people on the spot. Major technical changes imposed by international agreement require a frequency change. A recent report has given rise to concern about the continued stability of the mast. The temporary planning permission for the mast has expired and an application for full planning permission has been rejected on appeal. The fourth reason we all know: the lease has expired.
There is at present a radio mast some 46 metres high on the Whitestone triangle site on Hampstead Heath. The mast has several users. One is the London ambulance service. The Department of the Environment in a circular states that the Secretary of State attaches considerable importance to keeping to a minimum the number of radio and telecommunications masts and sites. The circular continues:
"Sharing of masts where practicable will help to achieve this".
This is probably only a statement of the obvious but will clearly be agreed by your Lordships.
The proposal in the Bill would authorise the construction of a new mast on the Triangle site. This would be 52 metres high; that is, 6 metres higher than the present one. The extra height is needed to accommodate both the London ambulance service and the fire brigade on the same mast as well as leaving room for other important users. Because it is important that London ambulance service—and we are speaking not of people making frivolous telephone calls but of a vital service—communications should not be interrupted, the Bill provides for the construction of a temporary radio mast, to which existing users can be transferred. When they have been satisfactorily rehoused, the Bill provides that the extra mast can be pulled down and a permanent radio tower erected.
The Bill is essential because without it the erection of the mast would be unlawful under the provisions of the Hampstead Heath Acts. I understand that there are three petitions against the Bill, apart from the people who write the Hampstead and Highgate Express. One is the London Residuary Body, which is responsible for Hampstead Heath. The three petitioners have raised some interesting points. Because there are petitions against the Bill, it will be referred to a Select Committee. The Select Committee will be able to test the case for the Bill and the case for the petitioners by assessing the evidence. The evidence is likely to include a wide range of technical data.
One asks oneself whether it is more important to have access to vital services or to worry about the effect of a mast overlooking Hampstead residents. The fire service is asking that the Bill be now read a second time so that it can be put to the proof of the Bill in Committee.
Moved, That the Bill be now read a second time—(Baroness Phillips.)
5.18 p.m.
Lord Jay: My Lords, I rise to give my reasons for having placed the instruction that stands in my name

323
on the Order Paper. I fully agree with the noble Baroness, Lady Phillips, that the Bill is not as simple as it looks at first sight. I am asking your Lordships today to ensure that the needs of the London fire service, the civil defence service and the ambulance service are met without damage by encroachment on Hampstead Heath, which we all agree is a unique stretch of country fully open to the public and which has been enjoyed by hundreds of thousands of people for generations past.
No one wishes to curtail the facilities genuinely needed by the fire and civil defence authorities. The opponents of the Bill contend that they can be met without encroachment on the Heath as proposed in the Bill. Because of the damage threatened, the Bill is opposed by the London Residuary Body, which is the owner of the Heath and responsible for its preservation and which presented a Petition to your Lordships' House, as my noble friend said, by the Heath and Old Hampstead Society (which has protected the Heath since 1871), by the Hampstead Conservation Area Advisory Committee and last but not least by the Corporation of the City of London. The corporation describes the Bill as a very significant intrusion into the Heath at one of its highest and most sensitive points.
As I believe my noble friend explained, the Bill proposes the compulsory purchase by the fire authority of two parts of the Heath now owned by the London Residuary Body. These two sites are not some minor fringes of the Heath but are both situated at the summit of the ridge, 400 feet above sea level, bordering on the Whitestone Pond, and commanding some of the finest views in North London towards the Hertfordshire countryside in the north and to south London itself. At that point it is proposed to erect a 150 foot high radio tower combined with various other complex pieces of apparatus which I shall not try to describe.
The first site, known as the Shrubbery or Triangle site in these documents, is now planted with flowering shrubs surrounded by a light fence and includes the present simple and specially designed radio mast. This site is owned by the London Residuary Body and forms a background of bushes and trees to the whole of the Whitestone Pond summit. The existing radio mast is already owned by the fire authority and other bodies that use it. It is on this Shrubbery site that the authority wants to build the new, much more ambitious 150 foot high tower and associated buildings.
The second site, known as the open site, is even more crucial from the point of view of free access to the public. It is virgin heathland on the brow of the ridge between Whitestone Pond and Judges Walk. It dominates this part of the Heath and commands an unbroken view to the north-west. It is incidentally the precise spot at which John Constable painted some of his most famous pictures. The Bill proposes that this open site should be used for building operations and a temporary radio mast with associated temporary buildings. This is a particularly precious part of the Heath and the proposed encroachment on this site, even temporarily, is in my view unnecessary and indefensible.
324
These proposals must be seen in the light of the history of the conservation of Hampstead Heath. The 1871 Hampstead Heath Act which followed a 32-year parliamentary struggle to save the Heath from encroachment contained the following words:
"The board"—that is, the Metropolitan Board of Works as it was then, later the LCC, the GLC and presently the London Residuary Body—
"shall for ever keep the Heath uninclosed and unbuilt on"—
except for any existing buildings—
"and shall by all lawful means prevent, resist and abate all encroachments and attempted encroachments on the Heath, and protect the Heath, and preserve it as an open space, and resist all proceedings tending to the inclosure or appropriation for any purpose of any part thereof".
They do seem to have been able to draft Bills in those days in a way that ordinary people could understand, but that is incidental.
Apart from temporary wartime gun emplacements, that promise has been faithfully kept for 115 years to the enormous benefit of the London public. Only once so far as I know has even an attempt at serious encroachment been made. That was by the first Lord Leverhulme in the early 1920s who proposed a small exchange of land. It was firmly resisted as a matter of principle by everyone concerned, because it alienated quite a small part of Hampstead Heath from public access. In the event it was Lord Leverhulme himself who died rather than that part of the Heath. Since 1871 the Heath has always grown and never been diminished.
It is the view of the London Residuary Body and of most who know the facts closely that a practical compromise can be worked out on this issue, which would meet the legitimate needs of the fire service and of the other services concerned without the compulsory purchase of these parts of the Heath. It is to that aspect that I hope the Select Committee on the Bill will turn its mind.
Unfortunately the fire authority seems to have made no approach for really serious negotiations with the London Residuary Body before the Bill was presented, which might perhaps have made all this debate unnecessary. The case for these drastic proposals has simply not been made out. Indeed, it is not even clear that the present mast is inadequate for the essential public service involved. Even if that were proved and it was certain that the radio apparatus had to be modernised, it is still not clear that that could not be done without major disturbance or encroachment on the Heath. For example, only 30 or 50 yards from the mast, and not on the Heath proper, is the so-called Queen Mary nursing home site, which itself includes a radio mast which is already owned and used by the fire authority. The possible use of that mast as part of a solution should be pursued.
There is one other part of the Bill, however, which arouses special anxiety in Hampstead, Highgate and the surrounding area. Clause 18, on what it calls the "shared facilities", would authorise the fire authority to permit the shared use of the new mast and the temporary mast:
"by other persons on such terms and conditions, including terms as to payment, as may be agreed".

325
That does not seem to have been explained. Does it mean that the fire authority is proposing its use, not just for public services, but that these drastic encroachments should be made so that more revenue may be earned, perhaps from private profit-making interests using the mast? It is not at all clear that that is not the case, and that is the suspicion which has been aroused. That too should be thoroughly investigated.
In order that these possibilities can be dispassionately examined it is no doubt best that the Bill should be sent to the appropriate committee rather than opposed on Second Reading. However, in the outcome I am sure that this House will show itself no less public-spirited than did the Parliament of 1871. For one thing, any breach of the principle of preservation of the Heath would be, many people think, a most dangerous precedent both for the rest of the Heath and other open spaces.
The piece of virgin heathland threatened by this Bill and the view from it are the precise subjects of one of John Constable's very finest paintings, of which I have a copy here if any noble Lord wishes to see it. I am sure that your Lordships would not wish to turn John Constable's favourite viewpoint into a builder's yard.
5.30 p.m.
The Principal Deputy Chairman of Committees (Baroness Serota): My Lords, it may be helpful if I were to speak at this stage on behalf of the Chairman of Committees so as to set before your Lordships such advice as I can offer on what course of action the House might wish to take on this Bill and the Instruction in the name of the noble Lord, Lord Jay.
It is not for me to comment on the merits of the Bill, but I hope that your Lordships will agree that it should be given a Second Reading today. I realise that some strong feelings have already been expressed as to the principle of the Bill. There may well be more to come as the debate proceeds. I do not deny that there may well be an occasion when the principle of a Bill is so objectionable that the proper course would be to reject it at Second Reading. However, I must remind your Lordships, as the noble Lord, Lord Aberdare, the Lord Chairman of Committees, has done on so many previous occasions, that giving a Second Reading to a Private Bill does not, as in the case of a public Bill, imply approval of its purposes. It does allow the Bill to be considered by a Select Committee.
I suggest that is the appropriate place for a full investigation of the merits of this particular Bill and the petitions against it to take place. If the Bill returns to the House for a Third Reading after the Committee has considered it, that would be the most appropriate opportunity for your Lordships to decide whether or not the Bill should proceed. As the noble Baroness, Lady Phillips, indicated, three petitions have been lodged against this Bill. These raise a wide number of issues, and in examining them the Select Committee will be able to consider both sides of the question as to whether or not the Bill should proceed.
326
In this connection, I recommend your Lordships to accept the Instruction on the Order Paper in the name of the noble Lord, Lord Jay. I have no comments on the merits of the Instruction; but it is procedurally correct and an appropriate Instruction to give to the Select Committee. To sum up, my advice to the House is that the Bill should be given a Second Reading now and should be referred to a Select Committee. Because there is an Instruction to the Committee, the practice is that the Select Committee will in due course make a special report to the House setting out all the facts which then can be fully considered by your Lordships at Third Reading.
5.32 p.m.
Lord Cottesloe: My Lords, I am glad for two reasons that the noble Lord, Lord Jay, has moved this Instruction. I should like to support it. I lived in Hampstead for 40 years and for most of the time within a few yards of the Whitestone Pond so I know the location well. In the first place, it seems to me a totally unnecessary Bill. As the noble Lord, Lord Jay, has told the House, it proposes to set upon the top of Hampstead Hill in a conspicuous position what is described as a massive radio tower. What is the purpose? The purpose is for communication with the fire service and other services in an emergency. Those are the purposes for which the Greater London Council set up the existing mast. It has served the purposes required for several years without criticism. Why cannot the existing mast continue those services?
It is said that the wavelength is being changed. I am no expert in these matters. My understanding is that the change is to a microwave. I am advised that there is no reason why the necessary microwave antennae cannot be affixed to the existing mast. Incidentally, the design of the existing mast—a slender and not ungraceful structure—was the result of a competition, whereas the proposed tower would be a massive and not (I am informed) aesthetically pleasing affair. It seems to me to be a totally unnecessary Bill. It is also a highly undesirable Bill and not only on aesthetic grounds. It is undesirable on grounds which are much more serious. For the purposes of this new radio tower it is proposed to deprive the public of two areas of the Heath, admittedly very small, but they are in a conspicuous position and command unrivalled views to the North and North-West. As the noble Lord, Lord Jay, has said they were views so much enjoyed by the artist John Constable that he painted them 10 or 12 times with varying effects of light and cloud. Those paintings are very beautiful.
If this Bill is approved, public access to the viewpoints from which those paintings were made (and which have been open to the public for more than a century as part of Hampstead Heath), will no longer be a part of the Heath and will no longer be available to the public. The proposal is not merely unnecessary but it is vandalism of a public amenity secured for the public in perpetuity by an Act of Parliament of 1871. I hope that the House will accept the Instruction of the noble Lord, Lord Jay, and that the Committee will recommend the rejection of the Bill. It will be for the Committee to decide after having considered every aspect of it.
5.36 p.m.
Baroness Stedman: My Lords, I rise to support the noble Baroness, Lady Phillips, in her moving of the Second Reading. For "an innocent abroad" I think she showed a pretty commanding understanding of what the Bill was about. I welcome the Instruction proposed by the noble Lord, Lord Jay, though I hope that it might prove to be superfluous. I should have thought that the issues he raised are ones which one would expect a Select Committee of your Lordships' House to have in mind and to take into account.
No one likes pylons or masts, but in our modern day and age they are a necessary adjunct to the technological services which we all have to use. I class myself as a conservationist and one who is concerned with environmental protection. I hope that I am also a realist. As a former senior fire service officer responsible for communications, I have a concern about the best and proper use of our emergency services. I have been on site to see what this was all about. As the noble Baroness has said, the present tower is 46 metres high and it serves the ambulance service, the Heath Ranger, the Amber Network and flood control. That tower needs to be taken down and a new one some 52 metres high is proposed to go onto that site. The fire authority has undertaken to pay for these services to be transferred to the temporary site while the proposed new tower is being built. The existing mast for the ambulance and other services will not be moved until all those services are satisfied that the reception afforded by the new temporary mast is satisfactory. Eventually, all these services will be able to operate from the one mast to be erected by the fire authority. There will be room for some other services if they come along. I am assured that this is not a money-raising, fund-raising effort to put up a tall mast in Hampstead in order to raise extra money.
The fire authority is concerned about the safety of its present mast in the grounds of Queen Mary's Hospital. The period for planning permission for that mast has ended; and the fire authority's lease is expiring. All these proposals have been brought about because the World Administration Radio Conference made an international agreement that new frequencies should come into use on 1st January 1990. It is not only the fire authority in London which is concerned about these changes of wavelengths. Most of the local radio stations, both the BBC and independent, have also been affected by this change of frequency. The Home Office regulations on this subject cannot be complied with on the existing fire authority mast.
Camden Council is the local authority involved in the area and it has directed the fire authority to the site which is now proposed in the Bill. This morning I had a letter from the chief executive of the council. It said:
"Camden has been consistent since the abolition of the GLC in resisting proposals which would result in the loss of Heath land and to this end the Council believes that the Bill could only be supported if an equivalent area of land were to be acquired as a replacement. Camden has discussed with the LFCDA"—
the London Fire and Civil Defence Authority—
"various potential sites for such replacement land.
328
Camden has also been consistent in seeking to achieve a rationalisation in the number of masts in the Hampstead area but has accepted that a common services mast (which combines the requirements of all users) could be located at Whitestone Pond subject to a high standard of design. On this basis, this Council gave planning permission to a mast of high quality design in 1986".
The letter goes on to say that the present proposals fall short of this design quality. I shall return to that later.
The letter continues:
"The Council is also totally opposed to the siting of a replacement common services mast on land in the grounds of Queen Mary's maternity home as this would protrude unacceptably into Hampstead Village and would be detrimental to the character of the area. This view is also shared by the DoE, local residents and the Royal Fine Art Commission.
For the above reasons, the Council does not object to the Bill, per se, but believes that agreement should be reached to ensure that conditions relating to (a) satisfactory design, and (b) replacement land, are included in the Bill".
Under the Bill the general development order will confer planning permission and will enable the authority to acquire the land. As the noble Baroness illustrated, the proposed mast will give total cover over three-quarters of Greater London, and the rest of London is already covered by the satellites at Hillingdon, Shooters Hill and at Gravelly Hill. But the most important very high risk, high density areas of central London will be covered by a mast sited where it is proposed to put the mast at Hampstead. On the Hampstead site when work is completed, there will be need for only one mast, shared by all the services, rather than several masts as at present.
I understand that there are three petitioners against the Bill. I am sure that their views will be heard with interest and will be given full and proper consideration before the Select Committee reports back to your Lordships. The health authority is naturally concerned about its obligation to provide speedy and efficient radio communication throughout Greater London. As I said earlier, the fire authority has to be satisfied that both the temporary mast and the new one meet the requirements of the London Ambulance Service. The fire authority will meet all the costs, including landscaping the Triangle site which is now sparsely planted with very ordinary shrubs. When I first came to the House I was the director of a landscape contracting company. I was not as impressed as the noble Lord, Lord Jay, appears to be by the planting of the Triangle site, which I saw on Monday of this week.
The London Residuary Body is rightly petitioning to safeguard the position of the eventual owner of Hampstead Heath. Sections 12 and 13 of the Hampstead Heath Act 1871 make it necessary for this Bill to be promoted. Although in paragraph 22 of its petition the London Residuary Body tries to justify the erection of the present mast, I have to say that, in the light of the wording of Section 12 of the 1871 Act, the promoters are not convinced that the existing mast is lawfully there. No doubt this is one of the points which the Select Committee will have to consider.
The third petitioner, Hampstead Heath Ltd., is the developer concerned with demolition and rebuilding on the site of Hawthorne House. In order to enable demolition and development to continue while the

329
fire authority works are also going on, the fire authority proposes to acquire a temporary site (and the powers to close part of the road adjacent to Hawthorne House) for dumper trucks, materials and so on for fire authority works, and to provide access for materials and equipment for the Hawthorne House redevelopment.
The proposed Triangle site is very limited and the acquisition of the materials and equipment site should make it easier for the construction on both sites to be carried out more expeditiously. When the work is completed the site will be landscaped entirely at the fire authority's expense to meet the wishes of Camden Council. In my view the restoration work would be a vast improvement on the present rough area of land and would enable proper provision to be made for a bridle path and real public enjoyment.
I am satisfied that the fire authority will be able to work closely with Camden Council, both in respect of the restoration work and of the design of the mast. This Bill will give only outline planning permission, and before planning consent is granted all those concerned will have an opportunity for consultation and agreement on the design of the mast, on the landscaping of the site and on the reinstatement of the materials and equipment site.
I said at the beginning of the debate that I am a conservationist at heart. This is not a party political matter and I speak personally today. I accept that there will be concern while the work is in progress, but I also believe that at times one has to weigh the ideals of conservation against the public need. I believe that life and property in London must take priority and that the emergency services must have the best possible support and equipment to do their job.
5.47 p.m.
Lord Birkett: My Lords, I rise most warmly to support the Instruction to be moved by the noble Lord, Lord Jay. To be truthful, I came here this afternoon hoping that your Lordships would be persuaded not to give this Bill a Second Reading. However, the reasonableness and extreme clarity of the advice given by the noble Baroness, Lady Serota, has quite cured me of that impetuosity. Nevertheless, I find the Bill extremely troubling.
I sympathise with the problems of the noble Baroness, Lady Phillips, in presenting the Bill. Like all noble Lords, I am sure, I sympathise with the need for the London Fire Brigade to have an adequate communication system. Everyone in your Lordships' House recognises the importance of that. With only two years to go, I also understand the problems about wavelengths. I expect that it is the shortness of time between now and the introduction of the new wavelengths that is causing the London Fire Brigade to seek desperately for whatever solution it can find in that time.
I am not persuaded that the combination of the present site at Whitestone Pond and the hospital site is beyond providing a solution to this problem. I suspect—and I hope that it is not an unworthy suspicion—that the collaboration and the co
330
operation between the London Fire and Civil Defence Authority and the London Residuary Body has not been as complete or as enthusiastic as it should have been. At this moment it is absolutely vital that those two parties get together to sort the matter out. They are, above all, the two which can.
The British Isles have one of the most varied and marvellous countrysides and sets of landscape anywhere in the world. Though we may be happy in our good fortune in that respect, I put it to your Lordships that we are not entitled to congratulate ourselves upon it. All that we might be allowed to congratulate ourselves on is our treatment of that inherited landscape. I am not sure that we have a very good case to congratulate ourselves in that regard especially as regards London.
I hesitate to disagree with the noble Lord, Lord Cottesloe, about the present mast, especially as he has been looking at it for a long time and I have not been living in the area. However, I do not find it as grateful or elegant as he does; I find it, even now, rather an unlovely sight. Nevertheless, I am convinced that the new one will be much worse. It will be six metres higher; the noble Baroness, Lady Phillips, mentioned it being six metres higher as though six metres on top of 42 was a small matter. So there will be a considerable difference in height. It will be fatter and it will also be covered in all those antennae and dishes that the telecommunications industry of the world have decided that we should have on almost all new installations. So it seems to me that the new mast must be considered as an eyesore. Therefore, to propose the compulsory purchase of a piece of public open space in order to erect such an eyesore is, I think, quite beyond the pale.
The noble Lord, Lord Jay, spoke of the precedent involved and the danger that such a precedent might cause. We must all be aware that development is a danger and has constantly been so to our most favoured landscapes. I am not speaking solely of private development for profit. It is not merely the greedy and unacceptable face of the developer with which I am concerned, but developments of all types.
Any development carried out at the expense of one of the glories of our landscape cannot be allowed. Surely Hampstead Heath is one such glory. Furthermore, it is one of the glories of the London landscape. London is under more pressure than anywhere else in the country in terms of sheer space. There is not just the price of the land but the sheer demand for it and the number of people who would like to develop areas of London in one way or another.
I suppose that once upon a time I should have had to declare an interest, but now I merely declare a piece of history. Up until 1986 I was a director of the department of GLC which ran Hampstead Heath, plus 5,000 other acres of London open space. Indeed, I am happy to say that the London Residuary Board's staff who now run that department are, by and large, my old devoted staff and it is generally agreed that they are not making a bad job of it.
Because of the historical context I know just how vital open space is to London. Everyone thinks of open space as merely a place for relaxation, where the

331
landscape is attractive, where the spirit can relax and where relaxation can take place in its proper sense. However, Hampstead Heath is much more than that; it is unique. It has a wildness about it that no other park has. Indeed it has a variety of attractions. Perhaps I am wrong to call it a park; it is a heath, and something quite special to London. I have always thought that open space meant more than just a place with recreational possibilities. I think that open space, especially in a crowded city, stands as a symbol and a reminder of the greater and wilder landscapes that roll all around us. That is something that we should not damage. Therefore I urge your Lordships to support the noble Lord, Lord Jay, in his Instruction and I hope that the Committee, when taking note of it, will look at it with a fairly glittering eye.
5.55 p.m.
Baroness Birk: My Lords, like everyone who has spoken thus far on this Bill, I naturally accept that proper radio communication for London's fire service is absolutely essential. However, I think we all appreciate that that factor is not in doubt. Indeed my noble friend Lady Phillips, who quite rightly said that this could be a very emotional matter, did not rely on emotion when she made her proposal.
However, the question is where the mast should be located and what form it should take. Any extension to make the London fire service more efficient and enable its work to be done more expeditiously is to be welcomed. Since 1871 both the sites that would be adversely affected on Hampstead Heath, which have been referred to in detail by the noble Lord, Lord Jay, have enjoyed the protection of the Hampstead Heath Act which forbids development there.
I could not help feeling from the remarks made by my noble friend Lady Phillips that she was under the impression that the Heath was really rather the prerogative of a small or large group of Hampstead residents. That, however, is not true. The Heath, as has been pointed out by the noble Lords, Lord Cottesloe and Lord Birkett, is a London landmark and its facilities are enjoyed not only by people who live in the city but also by those who live outside London. It is as national—almost international if you like—as Battersea Park, with all the festivals and activities that are held there.
Therefore, when we are talking about the Heath I think it only fair that we should not rely on an argument that pressure is being brought by people who live, or who have lived, in Hampstead, or, that there is a nostalgic or possessive feeling from a small group of houseowners. It is something which is important to London and even to the whole country.
One of the matters that worries me, which was also referred to by the noble Lord, Lord Jay, is the undesirable precedent which would be set by the Bill. I believe its enactment would serve as a signal to others that circumvention of the 1871 Act, by means of a private Bill, might again be worth attempting. The noble Baroness, Lady Stedman, said that as well as being a conservationist she is also a realist—I shall come back to that point later. However, having
332
worked closely with her in days gone by in the environment, I should have thought that she would also be rather worried about a precedent that would be set—especially in the climate in which we live today — as regards development and environmental matters.
My noble friend Lady Phillips referred to the planning policy guidance which is contained in a brochure entitled Telecommunications. She quoted from one paragraph which deals with the sharing of facilities. However, at the end of paragraph 5 there is another sentence which I think we should remember. It reads:
"However, the Government is also fully committed to preserving the national heritage, and the growth of telecommunications does not mean that the appearance of buildings, towns and the countryside can be allowed to suffer serious damage. The policies described in this guidance attempt to balance these requirements".
The Triangle site—I think we all know where it is now, as it has been well and carefully explained to us—has under Section 17 of the 1871 Act enjoyed particular protection as an enclosed and planted ornamental shrubbery. I shall not cross swords with the noble Baroness, Lady Stedman, as to whether the landscaping is as good as it should be. I am quite sure that she would do an excellent job with it if it were to be given to her. However, there is a legal obligation to retain it as a shrubbery.
The so-called temporary site is at present virginal heathland which will be subject to disfigurement and further upheaval for at least two years. A great deal of that, as I understand it, will be permanent; it will not be possible to put it right again. I think that I should ask about the donkeys, although I am not sure whether they are still there. What will happen to them?
However, my main concern is that the case has not yet been sufficiently made out and we should be grateful if the Select Committee will investigate this.
The noble Baroness, Lady Stedman, said that she did not think that it was necessary to have a Select Committee. She then proceeded to develop a number of points which all cried out for examination by a Select Committee.
Baroness Stedman: My Lords, would the noble Baroness give way? I said that I thought that the Instruction was superfluous because these were the kind of matters at which a Select Committee would look.
Baroness Birk: I beg the noble Baroness's pardon. That is right, but the same point applies. The Instruction is necessary or the Bill would be sent on without any comments about what took place on Second Reading in this House.
As we know, the authority already has a radio station mast. The authority and its predecessors have used it for radio communication for many years. I do not know who is right or who is wrong, because I do not understand the technical matters involved, but evidently the LRB believes that the present radio mast is sufficient to accommodate the changes required. That is something that the Select Committee should look into, especially bearing in mind the Instruction that I hope it will have before it.

333
The authority does not appear to have made a detailed survey of the availability of other sites around North London which would be less sensitive than the Triangle site or the proposed temporary site. That is important, because then one could argue, if the evidence supports it, that there is a need for extra facilities for the fire service. The question then arises as to why the facilities should be placed at these especially sensitive environmental sites instead of somewhere where they would do less visual harm.
The point about height is important. The noble Lord, Lord Birkett, was right about that matter. As it is on a high ridge, the mast is extremely visible from beyond Hampstead. It is not seen only by people standing on the Heath. We have talked about sharing facilities. My noble friend Lady Phillips referred to that matter and quoted from the planning policy guidance. I do not understand why the authority has not pursued the possibility of sharing the existing mast, which is set on the Triangle site, with the residuary body to which it belongs.
The mast has many users. There is evidence that it could accommodate the authority's current and likely needs. If it cannot, that is something which should be argued before the Select Committee. I understand that the authority has investigated the possibility of sharing the mast with other users. Clause 18 refers to the arrangements for sharing and how payment should be worked out.
I see nothing against an authority trying to find revenue or to recover the costs of its exercises and work, but I question whether it is right for Parliament to legislate to allow a public body to use an especially sensitive site, against which there are many objections, as a money-making venture when the environmental costs are devastatingly high. If the mast were to be somewhere else, the authority could make out a good case for a larger mast and for letting out extra capacity to other users. Here, where the environmental considerations are so great, it is highly questionable whether it should ask to have this extra capacity to be used for profit-making purposes.
Whatever view is taken of the Bill's provisions, one matter is certain: the mast must have an adverse environmental impact. This may be the point on which the noble Baroness, Lady Stedman, said that she is being a realist while also being a conservationist. The proposed mast will substantially mar the public's visual enjoyment of this part of the Heath. The ornamental shrubbery would cease to exist. The existing building is well concealed, but it would not be possible to conceal the new building because it will be so much larger. As I pointed out, the proposed work would leave the temporary site completely spoilt.
Like the noble Lord, Lord Birkett, I cannot help wondering why many of these matters have not been cleared in advance through genuine consultations between the authority and the LRB. There may then have been no need for the Bill.
I cannot help my mind going back to our debates on the abolition of the GLC. I believe that the subject of the Heath came up late one night. The noble Lord, Lord Cottesloe, argued on behalf of Hampstead Heath. It was not a party matter; it was a question of
334
one's views about open spaces and conservation. Incidentally, we still do not know who will take over the care and charge of the Heath. Perhaps we shall hear more about that in the not too distant future.
The problem has arisen because there is no longer a body responsible for London. If there had been, however hard it may have been, the problem of the fire authority and the demands of the Heath would have been worked out internally by that body, whether it was the GLC or another body. This is one of the problems with which we are left.
The planning side does not concern us. It is premature to talk about it. As the noble Baroness, Lady Stedman, pointed out, there is outline planning permission only. The conditions laid down in the letter, which I imagine we have all received, provide that an equivalent area of land must be acquired as a replacement. One cannot merely say, "O.K. This is fine". I do not have the slightest idea where, when or how the land would be found. Is it suggested that parts of people's gardens around the Heath should be taken? Any other land within the Heath already belongs to the Heath. That is something about which the Committee will surely wish to inquire.
There is a question about the design. The current proposal falls far short of the required design quality. I am worried about design generally, and in particular, about the design of some of the buildings which are now put up. People may not like the design of the present mast. However, it has the advantage of being slender and fairly elegant. It is probably no more beautiful than any other mast. It is important to have the best design possible; that is also something which should be looked into.
Apart from the specific points that I and other noble Lords have raised, a principle is at stake. The protection of the Heath was embodied in the Hampstead Heath Act 1871 when development pressures were far less than they are today. That foresight is something from which we can all benefit.
It is for this reason that I feel that all noble Lords will support Lord Jay's Instruction to the Select Committee to whom the Bill will surely be committed. Now that development pressures are so much greater and open spaces are so often at risk, let us face the fact that we have seen this happen in other fields; we live in a very greedy society where development profit-making very often comes out on top. It is our duty and responsibility to make sure that we preserve and look after the existing open spaces. They may sound a lot in acreage, but there are not so many spaces available for a heavily populated country. Therefore we should jealously guard what our predecessors obtained for what they saw as posterity. We, too, should be doing the same.
6.10 p.m.
The Earl of Arran: My Lords, I think that it would be helpful at this stage if I were to give the House a brief summary of the Government's attitude to this Bill, the main features of which have been so admirably and lucidly outlined by the noble Baronesses, Lady Phillips and Lady Stedman. In particular I should pay tribute to the noble Lord,

335
Lord Cottesloe, for his immensely long and affectionate association with the Heath.
First, I should declare that the Government have a fairly substantial interest in the Bill. This is because, among his many functions, my right honourable friend the Home Secretary, through the Home Office Directorate of Telecommunications, is responsible for supplying and maintaining the radio equipment used by the London fire brigade. As the noble Baroness, Lady Phillips, has said, the essential purpose of this Bill is to provide the brigade with a system of radio communications which will enable it to continue to deploy its fire-fighting equipment effectively. It is for that reason that the London Fire and Civil Defence Authority has brought this Bill before your Lordships' House.
For many years the London fire brigade has relied for most of its radio communications on the radio station situated on a site which it has held under a temporary lease at Queen Mary's Hospital, Hampstead. The station was built on the Hampstead Ridge because it is only from there that broadcasts can reach out over 80 per cent. of Greater London. The existing structure is insufficient to support the aerials which will be required when the brigade moves over to the new frequencies required by the World Administrative Radio Conference. The WARC decisions demand that any mobile radio services which currently occupy the frequency band 87–108 megahertz—that is the band which is shown as VHF on the radio sets we have at home and in our cars—must vacate that band so that it can used by the BBC and other broadcasting services. The fire brigades and the police are some of the users of mobile services who have been given until 31st December 1989 to move over to new frequency bands. The fire brigades will require new equipment to operate on these bands and in many instances new masts will be required to support the heavier aerials, a point which was raised by my noble friend Lord Cottesloe.
When the need to replace the mast at Queen Mary's Hospital first became apparent about eight years ago, it was felt that the best solution would be for the brigade to combine forces with the London Ambulance Service in the construction of a new station on the triangle site. This would have had the aesthetic advantage of reducing the number of masts on the Heath. The ambulance service did not wish to co-operate and the fire brigade therefore had no alternative but to apply for planning permission to redevelop its existing site. This was refused both by the local planning authority and on appeal to the Secretary of State.
The planning authority, which in this case is the London Borough of Camden, said, however, that it would consider sympathetically a proposal to redevelop the triangle site on a shared basis. The ambulance service was not happy with this proposal because—as the petition of the South-West Thames Regional Health Authority states—it fears that there are technical considerations which prevent the satisfactory shared use of a single tower.
336
That is a technical matter which I think is more suitable for the Opposed Bill Committee, but I am advised that modern technology can construct a radio station where the requirements of the fire brigade, the ambulance service and the other public service users of the triangle site can all be satisfactorily met. Indeed, elsewhere in England and Wales there are a number of radio stations which are shared perfectly satisfactorily by the police, fire and ambulance services.
If the Bill is not allowed the fire brigade will be forced to make alternative arrangements. Because no other site in north London provides the same broadcasting coverage, this will require the construction of at least three radio stations broadly similar to the one proposed by this Bill. Inevitably the acquisition of the sites, obtaining planning permission and building the stations will take some time. It will mean that when the brigade goes over to the new equipment—as it is bound to by 31st December 1989—it will be necessary to make contingency arrangements using a series of temporary masts. Although Home Office engineers will do all they can to maintain the quality of the service, inevitably it will suffer during the construction of the new permanent station or stations.
Those then are what I might describe as the pragmatic considerations which have brought this Bill before your Lordships' House. I turn now to the profound concerns which have been expressed this evening by the noble Lord, Lord Jay, and other noble Lords and which also reflect the fears expressed in the petition of the London Residuary Body. The first of these is that the leasing of the land required for the construction of the temporary radio station will create a precedent which might encourage others to use the Private Bill procedures to acquire parts of Hampstead Heath. Secondly the new radio station will be more obtrustive than the present one. I also accept that my noble friend Lord Elton, then Minister of State for the Environment, gave an undertaking to the House on 14th May 1985 that Hampstead Heath would continue to be managed as an entity, and that the Bill would appear to contradict his statement. However, that was in the context of concerns which had been expressed by several noble Lords, particularly the noble Lord, Lord Cottesloe, that the Heath might be divided up among several local authorities; for example, the three London boroughs whose boundaries are straddled by the Heath.
The London Residuary Body will shortly be putting recommendations to my right honourable friend the Secretary of State for the Environment on the future ownership and management of the Heath. Whichever body acquires these responsibilities will, however, still be bound by Section 13 of the Hampstead Heath Act 1871 and will be prohibited from disposing of any part of the Heath unless authorised to do so by an Act of Parliament, as in the case of the triangle site.
These are very important considerations and it is right that they should be fully considered. The Government have no difficulty in supporting the

337
Instruction that the Select Committee should have particular regard to these issues. In passing I would, however, mention that if the Bill is allowed, it will reduce the number of radio masts on the Heath by one, and possibly three if other radio stations agree to join the project. On the encroachment on the Heath, I think it is important to emphasise that this will be of comparatively short and temporary duration, and the site will be restored for public use as soon as the new radio station is fully operational.
The petitions of the South-West Thames Regional Health Authority and the London Residuary Body raise a number of technical issues which I am sure your Lordships would agree are more suitable for the Opposed Bill Committee. If your Lordships agree to give this Bill a Second Reading, the Home Office will prepare a technical memorandum which will be annexed to the report of my right honourable friend the Home Secretary.
In conclusion, the Government believe that the promoters have a good case for building a new radio station on Hampstead Heath. But we fully recognise the environmental concerns which have been expressed by the petitioners and by noble Lords this evening. It is for your Lordships to decide whether the needs of the fire brigade outweigh the environmental considerations. I hope, therefore, that your Lordships will agree to commit the Bill to a Select Committee so that the promoters can be put to the proof of the Bill.
6.20 p.m.
Baroness Phillips: My Lords, I should like to thank all noble Lords who have taken part in the debate, particularly my noble friend Lady Stedman. I would not attempt to answer the technical points that the Minister mentioned. Equally, I hope and I feel certain that the House would not deprive a Select Committee of the opportunity to pass the Bill. The technical points can be worked out.
In the end this matter comes down to a conflict between the conservationists and the interests of the citizens. I am the chairman of an amenity trust in my own borough. We fought to have certain amenities on Wormwood Scrubs. They were very simple amenities. That area is not very beautiful, but ill may say so even to the noble Lord, Lord Cottesloe, Hampstead Heath is not particularly beautiful. It is open and vast and I have walked on it many times, but it is not particularly beautiful. Wormwood Scrubs is not particularly beautiful but it is open and vast, and it is one of the lungs of the Londoner.
The conservationists were very worried that we would destroy the wildlife on Wormwood Scrubs. I never actually discovered what that wildlife was. I do not think that it could have been foxes because foxes want cover and there is no cover on an open space. If it was rats I was not too bothered. I can only say that the activities of the objectors deprived children of a natural wild park which was in the minds of the people who had set up the scheme.
The fire authority would not bother to go through all this if it was not essential. One of your Lordships suggested something about money-raising activities.
338
There is certainly no suggestion of that. This is a suggestion that the services, whether they be the fire services, the ambulance services, the police services or the civil defence service, should be able to use this facility.
Like many other people I have a very ugly telegraph pole outside my house. I do not like looking at it but it affords the opportunity for people to have telephones. If one lives in a city, there will always be the conflict between the needs of the citizen and what is beautiful, elegant and acceptable to the eye. I noted that the noble Lord, Lord Birkett, said that masts were an eyesore. I think that one could find worse eyesores than masts in this city. Personally, I think that the Lloyd's building in the City of London is an eyesore, and that does not provide a service to anybody.
Most of us are a little hypocritical about these matters. We are all in favour of homes for the homeless, the mentally handicapped and children, but we do not want them situated next to us. We want them put in the next borough or the next town but not on our heath or on our space. I hope that the Select Committee will bear in mind that this provision is not an attempt to destroy the beauty of London but simply an attempt to provide a vital service. I beg to move.
On Question, Bill read a second time, and committed to a Select Committee.
6.23 p.m.
Lord Jay Lord Jay rose to move, That it be an Instruction to the Committee to whom the Bill is committed that they should have particular regard (a) to the need in the public interest to protect Hampstead Heath from encroachments and to preserve its character and natural aspect; and (b) to the effect of a precedent being set by a Private Act overriding the protection afforded to the Heath by the Hampstead Heath Act 1871.
The noble Lord said: My Lords, I beg to move the Instruction standing in my name on the Order Paper.
Moved accordingly, and, on Question, Motion agreed to.

Financial Services Act 1986 (Extension of Scope of Act and Meaning of Collective Investment Scheme) Order 1988
6.24 p.m.
Lord Beaverbrook Lord Beaverbrook rose to move, That the order laid before the House on 15th March be approved. [20th Report from the Joint Committee].
The noble Lord said: My Lords, the order that we are debating extends in certain respects the definition in the Financial Services Act of investment business. A separate order was laid on 25th February, subject to negative resolution procedure, restricting the scope of the definition. The order makes three changes. First, it brings palladium and platinum options into the definition of investments. It was always intended that should a market develop in such options they should be brought within the Act's

339
provisions. This will also facilitate their marketing in other jurisdictions, where reliance is placed on whether or not investments are regulated in their country of origin. Secondly, the order narrows the application of paragraph 19 of Schedule 1 where the customer is an individual or where the investment concerned is a unit in a collective investment scheme, in a long-term insurance policy, or in rights to or interests in an investment of one of those kinds.
Finally, the order amends the reference in the Act to a collective investment scheme to ensure that arrangements which are essentially collective investment schemes rather than deposits fall to be regulated under the Financial Services Act rather than the Banking Act. I beg to move.
Moved, That the order laid before the House on 15th March be approved. [20th Report from the Joint Committee.]—(Lord Beaverbrook.)
Lord Peston: My Lords, I shall detain the House for only a few moments on this matter. I have two topics to raise. One concerns Article 2 of the order. We welcome the article with respect to options on palladium and platinum especially as my noble friend Lord Williams of Elvel was particularly keen to see platinum introduced. Should other markets develop for options in other precious metals, will the Minister say whether the Government have it in mind to amend this order or introduce another order to deal with that matter?
Quite separate from that, perhaps I may ask a question about deposit-based pension schemes. This matter has been drawn to my attention by the Association of British Insurers. The query that I raise is whether such schemes which are offered by banks and building societies will be subject to less stringent requirements under the Social Security Act 1986. Essentially these deposit-based schemes appear at least to the investor to be similar to all other such schemes. The question arises whether it would not be in the investor's interests for all personal pensions to be defined as investments and to be subject to a similar regime. I simply ask the Minister whether he will explain the basis of the Government's view—why they feel that it is unnecessary at the moment to bring such deposit-based personal pensions within the scope of Schedule 1 of the Financial Services Act.
Lord Beaverbrook: My Lords, I am grateful to the noble Lord, Lord Peston. In respect of options in other metals that may become popular as investment instruments, yes, we would indeed introduce another order if this were necessary.
On the noble Lord's second point, the short answer to his question is that deposits are not investments under the terms of the Financial Services Act. But it might be helpful if I explained some of the background to this matter. The Social Security Act 1986 provided that appropriate personal pensions under that Act could take one of three forms: insurance products, authorised unit trusts or arrangements based on deposits with banks or building societies.
340
Insurance-based products would be regulated under the Insurance Companies Act 1982 and under the Financial Services Act. Unit trust products would be regulated under the Financial Services Act. The banks and the building societies running deposit-based schemes would be regulated under the Banking Act 1987 and the Building Societies Act 1986.
The main question is whether and to what extent additional measures are required on the marketing of these deposit-based products. We wish to ensure that there are broadly equivalent investor protection arrangements for deposit-based and other personal pensions bearing in mind their different characteristics and different legal frameworks.
The Secretary of State for Social Services has already made regulations under the Social Security Act 1986 on disclosure of information and on cooling off periods. He intends to make an early announcement as regards controls on advertising. There will also be compensation arrangements for deposit-based personal pensions. Given that, we see no need to bring deposit-based personal pensions within the scope of the Financial Services Act. I hope that that covers the points raised by the noble Lord. I beg to move.
On Question, Motion agreed to.

Wages (Northern Ireland) Order 1988
6.29 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move, That the draft order laid before the House on 10th December be approved.
The noble Lord said: My Lords, the draft order contains provisions analogous to those enacted in Great Britain in Parts I, II, and IV of the Wages Act 1986. Provisions analogous to Part 111 which deals with changes in the redundancy rebate scheme are already in operation in Northern Ireland following the enactment of the Redundancy Rebates (Northern Ireland) Order 1986. The central purpose of the present order, like the Wages Act, is to reduce burdens on business and to help to promote employment, especially for young people. It sweeps away legislation and controls that were designed to deal with yesterday's social attitudes and yesterday's problems, such as the Victorian tommy shop and the Edwardian sweat shop. However, it also gives rights to workers to ensure that they receive the wages due to them and will help to break down outmoded barriers of status and conditions between manual and non-manual workers. A further benefit is that to some extent, it will reduce opportunities for crime.
Northern Ireland has its own separate legislative and administrative framework for the regulation of wages. But in general it has followed Great Britain law in this transferred area. Presently the legislation falls into two parts: namely, the Truck Acts (Northern Ireland) 1831–1940 and the Wages Councils (Northern Ireland) Order 1982.
The main body of truck legislation dates back to the last century and therefore applied throughout the United Kingdom. Where more recent enactments affecting truck provisions were made, there was

341
corresponding Northern Ireland legislation. The Wages Councils (Northern Ireland) Order 1982 was similar to the Great Britain Wages Act 1979. Consequently until the 1986 Great Britain legislation there were no significant differences between Great Britain and Northern Ireland as regards legislative provisions in the wages field.
However, although there were no legislative differences, the growth of wages councils in Northern Ireland was quite different and, if I may say so, somewhat more forward-thinking. Thus we have only nine wages councils covering some 7 per cent. of our workforce as opposed to the 11 per cent. coverage of the 26 Great Britain wages councils prior to the Wages Act 1986.
It is important that in following the 1986 Act we should do so in an informed manner. Separate consultations were held in respect of truck and wages councils legislation. The consultations produced no local peculiarities warranting special consideration. However, it is fair to say that the trade union movement was opposed to the proposals set out in the consultative documents. After giving careful consideration to the views expressed, the Government considered that parity in the field of wages regulation should be preserved.
The draft order at Parts II and III covers two areas which I propose to deal with separately. Before doing so, I should point out that Part I of the order contains technical provisions relating to title and interpretation. Part II of the order deals with controls on the payment of wages. It sweeps away a host of ancient and obsolete laws, based on the Truck Acts, governing the way in which wages are paid.
The word "truck", which is used to mean a system of barter, indicates the archaic nature of the present legislation. Perhaps the noble Lord, Lord Graham, is more expert in the field than I. However, I believe that truck legislation dates back to 1465. That was before the era of King Henry VII, who looks down upon our deliberations in the Prince's Chamber. I wondered whether that was indeed Tudor legislation of 1485. However, I was assured that the date was 1465, which was clearly in the reign of Edward IV. The existing legislation which we are repealing this evening dates back to the 1831 Act which was passed two years prior to the Factories Act 1833 which forbade children under nine years of age being employed to work in factories.
That was the social and economic background to the enactment of the Truck Act 1831 which provides for the payment of wages to manual workers to be in coin of the realm. It was intended to prevent the practice, then prevalent, of workers having to accept payment in kind—that is in the goods manufactured by their employers or in tokens which could only he used in their employers' shops, the so-called tommy shops.
The order, especially in Part II, sweeps away the provision whereby manual workers—and I emphasise only manual workers—can insist on being paid in cash because it acts as an impediment to the spread of cashless pay and perpetuates outmoded differences of status between manual and other
342
workers. More and more our survival as a manufacturing nation is linked to the use of modern highly sophisticated machinery. We can no longer say to manufacturers and potential foreign investors that it is all right to use modern equipment on the shop floor but that the wages of the workers using such machinery must still be put into individual wage packets in cash.
By repealing these archaic laws we are recognising the move to cashless pay. Indeed, we no longer pay the unemployed in cash. An unemployed person now receives his benefit by Giro cheque and many modern employers use other non-cash methods of payment such as electronic credit transfer. However, I should point out that while the order will facilitate the move to cashless pay it does not take away any existing contractual rights to payment in cash. It does not force any employer to change to a non-cash payment system if he does not want to.
The other thing that will be achieved is greater security. The opportunity for wages snatches will be greatly reduced, as will the attendant risks of violence to those in charge of the money; for example, between a bank and an employer's premises. The Act of 1831 did not forbid deductions from wages by way of fines for misconduct and bad workmanship and the Truck Act 1896, which is the other main truck Act, was passed to bring order into the operation of deductions. However, employers found that the fining system was ineffectual, that it was always the same worker who was fined for being late and that the concept of fining workers until they do better had no effect in the production of better work and higher standards. Also social conditions improved and by 1921 the change was so marked that the chief inspector in Great Britain was able to say in his annual report that truck no longer persisted as a system of management. Indeed only one or two complaints per year regarding the truck system are now received in Northern Ireland and no prosecutions have been taken in recent years.
The Act of 1896 is of no little complexity and the report of the truck committee which was presented to Parliament in 1908 stated, at paragraph 3:
"It is well known that the provisions of the statutes have given rise to great difficulties of interpretation"—
perhaps they were not alone in that—
"and that judges of great authority have taken different views as to their meaning".
So far as concerns many of us, things have therefore not changed greatly.
The order also sweeps away the outdated provisions of the 1896 Act and introduces an important new and modern set of rights for all workers, be they manual or non-manual, in respect of deductions from pay. Thus it will make unlawful any deduction from pay not provided for in statute, in the contract of employment or by written agreement. The order also provides extra protection for workers in retail employment in that deductions related to stock shortages or cash deficiencies will be limited to 10 per cent. of wages. This will apply to supermarket till operators, petrol station forecourt attendants and similar workers. These new rights are enforceable by way of complaint to an industrial tribunal.
I have tried to explain to your Lordships about Part II of the order. Part III of the order effects reforms to the wages council system and here although Northern Ireland legislation is the same as that in Great Britain the system has grown up in a somewhat different way so that Northern Ireland has only nine wages councils compared to 216 in Great Britain. In tracing the growth of the Northern Ireland system, I start with the Trade Boards Act of 1909, following which separate boards, subsequently termed wages councils, were established for Ireland. Then with the enactment of the Government of Ireland Act 1920 the legislation applied to and was enforced from Northern Ireland. However, as new Great Britain legislation in this field was introduced, it was paralleled by similar Northern Ireland legislation.
The reforms, and particularly those set out in Part III of the order, are aimed at simplifying the requirements that wages councils impose on industry. The order therefore restricts wages councils to the setting of a single minimum basic hourly rate and a single minimum rate for overtime together with a limit on the deductions which may be made for accommodation. Your Lordships will appreciate that that is the kind of situation in which one would find young hotel workers and others who might need to be accommodated on the employer's premises or nearby. These simplified orders will do away with needless red tape and somewhat heavy and archaic legislation.
Also, young persons under 21 will be taken out of the scope of the councils altogether. This will help young persons to get their feet on the employment ladder, by allowing employers to offer jobs at rates which they can afford and which young people are willing to accept without wages councils requiring higher rates of pay.
The order will also make it easier to review, and if need be, to change the scope of, or abolish existing councils. This will provide more flexibility and enable the system to adapt more readily to changes in the industries affected. However, no powers are being taken which would enable new councils to be formed.
I hope that my preliminary tour through the order will help your Lordships. In conclusion, perhaps I may reiterate that the order introduces much needed change and is fully consistent with, and an important step in, the Government's policy of deregulation which seeks to remove unnecessary government-imposed regulations and restrictions. However, it will not only improve industrial efficiency and help to promote employment but will give rights to workers to ensure that they receive the wages due to them.
The order benefits all workers directly by giving them new rights in relation to deductions from pay and it benefits them indirectly by its contribution to an efficient labour market, the attainment of which will enable us to compete better in international markets and produce real sustainable, productive jobs.
Few pieces of legislation—certainly relating to Northern Ireland—can claim such a wide removal of the accumulation of different sorts of controls
344
dealing with problems which go back as far as we are aware to 1831—I shall not go back over the centuries. The order, like the Great Britain Act, is one of the most radical acts of deregulation in the field of wage payment ever undertaken. It replaces 11 entire Acts and one Order-in-Council with just one piece of legislation. The order is an important part of the Government's strategy to ease burdens on employers, improve employment prospects especially for young workers and to tackle today's problems, not those of the 1830s, 1900 and perhaps 1896.
With that, and with gratitude for the close study of the order that I have seen in your Lordships' House. I beg to move.
Moved, That the draft order laid before the House on 10th December be approved.—(Lord Lyell.)
6.45 p.m.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister for the care he has taken in preparing for the debate and for giving the House a very fair resumé of the history of this matter. The Minister will acknowledge that this is in effect a Second Reading of the Wages (Northern Ireland) Bill; in other words, there are being visited on Northern Ireland in this order precisely the same provisions as were contained in the Wages Bill which went through this House at Second Reading on 6th June 1986.
I should like to begin by repeating what I said in that debate on 6th June:
"this is a mean and repugnant Bill. It is shoddy and shabby. It is worthy of this Government. It is an attack on the living standards of the poorest in this community and those who presently have to suffer from low wages-.—[Official Report, 6/6186: cot 1223.]
It is my assertion that all that the Government have done in the fullness of time is to visit all of those meannesses on the people in Northern Ireland who will be affected by this legislation.
We are not just talking about Northern Ireland as a region or as a part of the United Kingdom. We are talking about an area which already suffers from the lowest wages in Great Britain, has the highest cost of living in Great Britain, and where they pay more for food, coal and electricity than in any other part of the country.
With no offence intended to the Minister on a personal level—as I think he will understand—it is the height of hypocrisy to say that the purpose of this order is to promote employment, especially for young people. I should like the Minister, because he, or his advisers who also advise another place have had many years of experience, to come up with some facts. He needs to tell this House, and more importantly he needs to tell the people of Northern Ireland, why they are to suffer under this order. There will be statistics and measuring rods. We do not want the generalisations of which the Northern Ireland Committee of the Irish Congress of Trade Unions complained. When they examined the consultation documentation they told the Minister, and they told me, that the document is:
"heavily laden with cliches such as unnecessary obstacles to the creation of more jobs; 'pricing young people into jobs',

345
'administration burdens on employers'; 'the rigidities of the order inhibits employers in the development of sensible wage structures'.".
The night is young and we have all the time in the world for the Minister to produce the facts and the figures. He has not produced any, he has regurgitated the generalised premises and theses upon which he and his colleagues have argued—if that is not a question of semantics—the case they want to make.
With regard to the consultation process, the Minister will be aware that the trade unions, on behalf of their members in Northern Ireland, do not accept that there has been proper, full and meaningful consultation in these matters. Of the people who are affected by the wages council nexus and changes, it should be noted that 62 per cent. of the wages council workers are women. When considering the impact of this legislation on women I think that the House ought to have before it the views of the Equal Opportunities Commission for Northern Ireland. Its views are quite clear. The Commission says that:
"Women's paid employment in Northern Ireland is concentrated in certain sectors, such as the clothing and textile industries. These are industries in which Wages Councils represent the main form of wage determination. In some Wages Council industries, workforces are almost exclusively female—for example, in shirt-making women comprise 93·6% of employees.".
The Equal Opportunities Commission for Northern Ireland is in favour of simplification. Many of the things that the Minister said this legislation was designed to do are unexceptionable; that is to say, they are acceptable.
One must consider the damage that will be done to what is already an underclass in our society. Those whose rates of pay are governed by wages councils are inevitably living at the lowest end of the wages nexus. Wages councils offer a minimum degree of protection. Will the Minister tell the House what has happened to the wages inspectorate? I should like him to give us some facts and figures. I was given some facts and figures two years ago and I can tell him what has been happening to the wages council inspectors.
I see that the Minister in effect is saying, "Come on. Show us your muscle. Tell us what it is". In 1986 the Government announced that there would be a reduction of 85 in the number of wages council inspectors who enforce the law. Are the Minister and his colleagues so sanguine that there is a willingness on the part of employers to comply with wages council orders and pay levels? They were happy enough in 1986 to reduce the number of inspectors by 85.
What is the position in Northern Ireland? The Minister must know. I want to know, and should like him to tell the House, what has happened in the past five years, say, about the number of inspectors who investigate the situation in Northern Ireland? I can tell the Minister what happened two years ago when I was dealing with this matter. Mr. Terry Sullivan of the Union of Shop Distributive and Allied Workers —I must declare an interest since I have a connection with that union—told me:
"It is our opinion that not only will the Wages Bill do nothing whatsoever for the employment prospects of young people but, in addition, the proposals will actually lead to them suffering massive wage cuts".
346
Mr. Sullivan of USDAW told me at that time that:
"Last year Wages Council Inspectors found substantial underpayment of rates that have the force of law. In the retail nonfood sector underpayments were revealed at 858 of the 1,254 establishments visited".
Through his advisers, will the Minister tell the House tonight the history of the situation in Northern Ireland? In other words, will he tell us what has been happening there, including how many inspectors there are, whether the number is the same and whether they found a detrimental situation.
Two years ago I was able to tell the House that we were talking in terms of millions of pounds which ought to have been paid to people who were already on very low wages. They were adults who may very well have been on wages of £80 for a 40-hour week. So far as wage rates are concerned, retailing and distribution are not the best paid of trades.
Let us consider the effects on young people. In relation to adult pay, the pay of young people has already suffered a blow. Taking the adult rate at 21 years and over as 100 per cent., in 1979 the 18–20 year-olds received 61 per cent. of the adult rate; in 1984 that was down to 55 per cent. For women, in 1979 the 18–20 year-olds received 74.6 per cent. of the adult rate; in 1984 they received 67.9 per cent. So there had already been a reduction.
I should like the Minister to confirm whether or not he supports his colleague Mr. Viggers who, when introducing this order in another place, said:
"Clearly, however, if young people under the age of 21 are restricted to a minimum requiring them to be paid the same as adults, removing that restriction and enabling them to be employed at lower rates can only improve their job prospects".— [Official Report, Commons, 7/3/88; col. 129.]
Will the Ministers show us the evidence upon which that assertion is founded? It is the same assertion as was made by advisers to the Minister two years ago. Will he give us the evidence upon which it is said that the less you pay young people, more of them will find work? Will he produce such evidence in respect of Northern Ireland.
Is the Minister happy and concerned about what will happen to the 37,000 people in Northern Ireland who will be affected by the removal of the protections, minimal and flimsy as they are, which hitherto under the wages council orders they have enjoyed? The Minister has an opportunity this evening to give us that evidence.
As regards the wage rates which are the lot of young workers at present, we are talking in terms of people who are enjoying (if that is the right word) £40 or £45 a week. The Minister tells us that that wage level can be removed. When I made some inquiries about this matter, I found that the CBI and the Institute of Personnel Managment did not share the Government's views. The CBI said:
"there was little enthusiasm among our members for the suggestion that all young workers should be excluded from coverage by wages councils".
Why does the Minister ignore the views of the CBI? The Institute of Personnel Management said:
"Many respondents argued against removing young workers from the purview of the machinery, stating that they doubted if they would be able to recruit at rates lower than those now in force".

347
The Minister is under an obligation to tell us why he is making worse the wretched lot of young workers who may have found a job and who currently are having to settle for very low rates of pay. Why is he making their position even worse by removing the protection from them?
The Minister knows that the Northern Ireland trade unions object to this order in respect of Part II. They are opposed to the repeal of the Truck Acts for two reasons. First, they consider that the payment of wages by cheque or credit transfer should not be imposed an all employees by statute law; this is a matter to be negotiated between the parties, bearing in mind that banking facilities are not so readily available in all parts of Northern Ireland as they are on the mainland. In his reply will the Minister tell us whether he is satisfied that banking facilities are as prevalent, readily accessible and available as they are in Northern Ireland? One must also bear in mind that the trade unions feel that most employees prefer to be paid by cash. That is not the only argument, but it needs to be borne in mind.
Another objection to the order is because the consultation paper smacks far too much of relying upon the work of the Department of Employment in Britain and is not sufficiently related to the conditions in Northern Ireland.
I think that the Government have a hit of a cheek to dress up what is substantially an attack upon the young people of Northern Ireland-6,000 young people who are already in some difficulty, whether with or without a job. It is their living standards that will be affected. The order will have the effect of cutting their living standards. It has nothing to do with creating jobs.
I very much hope that the Minister will be able to say something to encourage those whom I seek to represent in Northern Ireland, who are already living under difficult conditions. I hope that the Government can show that they are serious about providing jobs with good wages and conditions for them. More importantly, I shall not be satisfied with arguments but with facts and statistics. Unless I receive them, I shall come back time and again.
7 p.m.
Lord Harris of Greenwich: My Lords, I agree with what the noble Lord, Lord Graham of Edmonton, said about the position of 21-year olds. I noted that the Minister indicated that he believed, as a result of the passage of the issue that we are discussing, that there would be an improvement in the employment prospects of young people. I wonder whether he is serious about that. What is the evidence upon which he bases it? I have heard no evidence to justify such a sweeping assertion. I look forward very much to hearing the noble Lord make a serious effort to meet the anxieties which have been expressed on this issue.
Having said that, I do not share the views of the noble Lord, Lord Graham, to which he referred in the latter part of his speech. Like the Minister, I believe that there is considerable advantage in favour of moving to cashless pay. As he said, it is right to do that in the special circumstances of Northern Ireland
348
where it is clearly desirable, so far as it can be done, to remove the risk of robberies of large sums of cash. On that issue I have no difficulty with the Government's proposals.
I am not an enthusiast of the Truck Acts on either side of the Irish Channel. No doubt they fulfilled a useful role at one stage in our history, but I can see no case for them being perpetuated. However, I should be interested to hear, if the noble Lord, Lord Lyell, were able to tell us, when the last prosecution took place in Northern Ireland for a breach of the Act.
Perhaps I may deal with one point of detail on Crown employment which is referred to in paragraph 11(3). I understand that this provision does not apply to service with regard to members of the armed forces. What is the reason for the exclusion of any association established under the 198G Reserve Forces Act? Perhaps the noble Lord can deal with that question.
Lord Lyell: My Lords we are very grateful to have two fresh faces entering into the cauldron of Northern Ireland politics. As the noble Lord, Lord Graham, was kind enough to point out, the night is fairly young, but thoughts on that subject are not always well received by my noble friends who surround me.
Lord Graham of Edmonton: My Lords, where are they?
Lord Lyell: My Lords, I referred to "my noble friends". I was waiting for the noble Lord, Lord Graham, in a moment of athleticism with one bound to cross the Floor. It would be most interesting. However, he may have noticed from the columns of the Official Report in another place that my honourable friend had about seven minutes to answer a number of questions. I hope that I shall be able to assist the noble Lord. He has asked for a number of facts and figures. I hope that I shall be able to help him in that area.
The noble Lord suggested that there would be suffering under this order. I wonder whether he is correct in that suggestion. By removing these 11 ancient Acts going back to 1831 and 1836, does he suggest that the tommy shop and the sweatshop are alive and well in Northern Ireland with regard to the young people under the age of 21? The noble Lord, Lord Harris, also raised this point, as did the noble Lord, Lord Graham. I think that the noble Lord would agree that Northern Ireland has moved on a great deal from that situation. I believe that work conditions in Northern Ireland are in many respects ahead of those in other parts of the United Kingdom and are in line for the broad majority of the work people.
On querying the facts and figures, the noble Lord first asked how many workers would be affected. About 220,000 manual workers are at present in employment in Northern Ireland. This comprises about 45 per cent. of the employed workforce of Northern Ireland. The noble Lord asked about the work of the wages inspectors in Northern Ireland. The last complete year for which we have figures

349
available for the work of wages inspectors was 1986. The inspectorate carried out 1,960 visits around Northern Ireland. In the course of these visits they undertook 1,300 full inspections. They dealt with nearly 300 complaints in Northern Ireland. About 150 employees—that is about 0·5 per cent. of all employees—within the scope of wages councils were found in 1986 to be underpaid. The average underpayment was about £190 per employee; that is, 0·5 per cent. of the employees covered by the wages council legislation were found to be underpaid. The inspectors were clearly able to take action to rectify that aspect.
The noble Lord made an excellent point, —I admired him for it—when referred to the legislation as a mean attack on people who arc at present covered by wages councils legislation in Northern Ireland. The protection of these work people should be concerned with their employment prospects and, above all, the jobs that they require.
Lord Graham of Edmonton: My Lords, perhaps I may—
Lord Lyell: My Lords, I shall finish this point. Perhaps the noble Lord would be patient; I listened quietly to his excellent contribution. Perhaps he would accept my contribution on this paragraph, whatever he believes I deserve in style marks or technical merit.
The protection of people covered on the wages council legislation should be concerned with employment prospects—the jobs that they require. The legislation that we have before us tonight should be considered in the light of its likely effect on jobs. If the noble Lord and his noble friends are concerned about the position of jobs, they may wish to consider their position on this issue. The order before us tonight is repealing legislation which is unintentionally restricting job opportunities. If the noble Lord had a point perhaps I may take it briefly.
Lord Graham of Edmonton: My Lords, I am most grateful. Do I understand that, under the wages councils legislation 0·5 per cent. of the people were affected? The Minister mentioned the figure of 200,000. We are therefore talking about 1,000 workers, for whom it was found that they were underpaid by, I think he said on average, £190. We are talking of 1,000 workers who were deprived of their rights under the wages councils orders.
Lord Lyell: My Lords, perhaps I may abbreviate what the noble Lord is saying. I think that he is in danger of making a somewhat lengthy comment on the paragraph. The figure I have is 153; that is 0·4 per cent. of all employees falling within the scope of a wages council in 1986 were found to be underpaid by an average of £190 per employee.
Lord Graham of Edmonton: My Lords, perhaps I may—
Lord Lyell: My Lords, the noble Lord has interrupted once. Doubtless he will wish to do so many more times. If he wishes to check my
350
mathematics I shall go back to where I found the first figure that I gave him.
Lord Graham of Edmonton: My Lords, perhaps I may —
Lord Lyell: My Lords, no. We must have order. The noble Lord perhaps finds it amusing. Maybe I do, too.
We estimate that there are 220,000 manual workers in Northern Ireland. If I gave the noble Lord the impression that all of these were under the wages councils, I am sorry. There are 220,000 manual workers, not those under wages councils. Thus there are 153 workers, that means 0·4 per cent. who are underpaid. I have a note that only 37,000 workers are in the wages council industries and 220,000 in Truck Act coverage, not wages councils. I hope that his mathematics and mine might match up on that.
The noble Lord also had an interesting query about the Northern Ireland Congress of Trade Unions. It was said that the document was riddled with cliches about figures. I am afraid we do not have any separate studies on these aspects in Northern Ireland. I could give the noble Lord a bibliography of sundry gentlemen—I presume that they are gentlemen—who have given NISR discussion papers, Manpower Research Group discussion papers and so on, but I am afraid that we do not have any separate studies, so I cannot help him. If we are able to obtain any information I shall write briefly and I hope it will not be an undue weight of paper weighing down the noble Lord.
The noble Lord also had the thought that all the 37,000 workers under the wages councils in these industries would lose protection. Only about 7,400 of that number who are under 21 will be removed from the legislation by the order.
The noble Lord asked about the number of wages inspectors. I am advised that the number has remained unchanged at two for the past few years. Certainly the justification for a reduction in the number of wages inspectors in Great Britain rested essentially on two propositions which were clearly stated by my right honourable and honourable colleagues at the time of the passage of the Wages Act through your Lordships' House and another place. There were two measures. The simpler wages order meant that checking the pay of workers would be a good deal quicker and, secondly, the removal of the complicated provisions from the wages orders would lead to an improvement in the level of compliance. The Wages Inspectorate's statistics for 1987 show that what the Government said in 1986 turned out to be correct.
The noble Lord asked me about the view of the Equal Opportunities Commission in Northern Ireland. I go out of my way to refute any suggestion that the Equal Opportunities Commission's view is that women make up a large proportion of the workers whose cases we are discussing this evening, and that the proposed reforms in the order would indirectly discriminate against women. If the protection under the wages council legislation should currently favour women in preference to men, any

351
reduction of this imbalance would not be discrimination. But there is separate legislation with which we are not dealing this evening, fortunately on sex discrimination. That might wait for another evening. Wages councils apply to any lady workers over the age of 21.
Another subject raised was banking hours. This too affects many of us in Northern Ireland. Banking hours and banking facilities are very similar and as efficient as those on this side of the water. The banking hours are becoming increasingly diversified, depending upon which bank or financial institution one keep one's savings with, but the basic opening hours are 30 hours each week. There is also lunchtime and Saturday morning opening, so the actual opening hours can range upwards to 37½ hours and sometimes to 40 hours a week. The basic opening hours in the main clearing banks are 23½ hours per week. As an experiment late last year the banks opened at a limited number of main city centre branches at lunchtime. These branches are open for an additional five hours a week. This experiment will be continued and extended to other branches, but I am unable to say which or what the coverage will be over the Province in future.
The Trustee Savings Bank in Northern Ireland is already open for 32 hours per week. The noble Lord will also be aware that wages may be, and in an increasing number of cases are, paid into building societies. These have branches in all high streets in Northern Ireland as well as in Great Britain, so the noble Lord will accept that workers who are paid other than in the coin of the realm are able to obtain cash for their needs and are able to regulate their financial affairs at a time that suits them.
There was a further query. I was asked why we went against the Institute of Directors, the Institute of Personnel Managers and the CBI. Certainly we listened to all the views expressed, but on this occasion our consideration was that the wages councils tended to set the wage for young persons too high in relation to adults, although in some cases they also put the age at which someone moves on to the adult rate too low. This has also happened in many industries not covered by the wages councils' legislation as a result of national wage bargaining and bargains struck by some, but not all, trade unions. The effect of this practice has been—we have found this in our studies—to make it more difficult for some youngsters to obtain jobs than would otherwise have been the case.
I was taken to task about the comment of my honourable friend in his remarks in another place, at col. 129. I stand by what he said. It also hangs on the last thought that I had in trying to answer the noble Lord. No, the whole thrust of this legislation, apart from Parts II and III which I have already explained, is that, as I hope, it will help to place young people into work, but it is the employers who provide the job opportunities. I shall not go on to suggest that the younger person is not always able to produce the standard of work which may require a little experience. Many of us in your Lordships' House know how that can follow on.
352
I hope that I have answered the bulk of the queries raised by the noble Lord. I am sure he will accept that I have made an attempt to do so. I shall read carefully his remarks to see whether I am able to give him more facts and figures. He said he wanted facts and figures. I regret that in my mathematics my 153 did not match up to his 1,000. I hope that I have corrected that matter. The base figure was 37,000, 0.4 per cent. was in the region of 153 and there are 220,000 manual workers.
The noble Lord, Lord Harris of Greenwich, asked me about the date of the last prosecution under the Truck Acts. I am afraid I am unable to tell him the date or the court before which this case appeared. I shall find out and will write to him. I hope that we may have an opportunity on another evening, or perhaps in another forum, to discuss the relevance of that interesting law case.
The noble Lord queried Article 11(3) in relation to Crown employment. That paragraph states that Part II of the order does not apply to service as a member of the naval, military or air forces of the Crown, but does apply to employment by associations established for Part VI of the Reserve Forces Act 1980. That provision does not cover service with the reserve or auxiliary forces; namely, the Royal Naval Reserve, the Royal Marine Reserve, the Territorial Army, the Army Reserve, the Air Force Reserve or the Royal Auxiliary Air Force. However, it covers employment by associations established for the purposes of organisation and administration of her Majesty's military and air forces and their reserves. Therefore one is at one remove from being in the reserves.
The duties of the associations include the provision and maintenance of buildings, campsites, airfields and aerodromes for the Territorial Army, the Royal Auxiliary Air Force, the organisation of and recruitment for those reserve forces, and the liaison in connection with employers who will be working in those particular fields.
I hope that that will satisfy the noble Lord, Lord Graham. I believe that he referred to col. 1233 of Hansard, but when I looked I found the wise words of his noble friend Lord Wedderburn. However, I looked back and found the words of the noble Lord, Lord Graham, at column 1223. The noble Lord will find that the figure of 93.6 per cent. was reiterated by his honourable friend in another place, the honourable Member for Kingston-upon-Hull.
I hope that my comments go a long way towards explaining the order before the House this evening. We hope that it will be of considerable assistance to employers and of no little assistance to employees in Northern Ireland.
On Question, Motion agreed to.

Apartheid
7.23 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby rose to ask Her Majesty's Government what action they are taking to dissuade the South African Government from silencing all opposition to their policy of apartheid.
The noble Lord said: My Lords, if there were a need to justify this debate it was provided to me today when I had lunch with a number of British businessmen who are trading and investing in South Africa. Without exception I was told that the events of the past two weeks have totally changed their attitude towards the business situation in this country and their hopes and efforts in South Africa.
It is approximately 18 months since your Lordships' House fully debated South Africa. I should like to begin by posing, and answering, the question which is often put in such debates: are the events in South Africa our business? Many noble Lords will remember that that question was asked when Hitler was persecuting the Jews and overrunning Europe; when Mussolini was tyrannising the people of Italy and Ethiopia; and when the Japanese were invading Manchuria and China. In each case the atrocities were committed with the assistance of Western finance and business.
Since 1960 we have seen in South Africa the atrocities of Sharpeville, Soweto, Langa and many others. They have been committed also with the assistance of Western resources to South African white regimes. It is not surprising that people such as Bishop Tutu and Doctor Boesak are suggesting that there exists some hyprocrisy in the West. It is that if white children were being detained, imprisoned and tortured there would be a different response from the people and the governments of Western Europe.
When the House last debated this issue it was in the context of the report of the Eminent Persons Group. It was when the Foreign Minister had just returned from a humiliating experience in South Africa; it was just before the mini Commonwealth Summit in August, 1986; it was a month before the meeting of the EC; and it was two months before the United States Congress passed its anti-apartheid law.
I should like to remind the House of the conditions under which the Eminent Persons Group was set up. The British representative was a Member of this House, the noble Lord, Lord Barber. The group was set up at the Nassau Commonwealth Conference under the following conditions. After the Eminent Persons Group had reported, the Heads of Government or their representatives would meet to review the situation. If in their opinion adequate progress had not been made within that period they agreed to consider the adoption of further measures. The Eminent Persons Group found that those conditions had not been fulfilled. Indeed, the report of the group—which still is worth while reading in order to gain an understanding of the situation in South Africa—said categorically that reforms were not taking place in South Africa. It stated:
"We have examined the South African Government's programme of reform and have been forced to conclude that at present there is no genuine intention on the part of the South African Government to dismantle Apartheid".
The group went on to warn the country and the world of the consequences that could be expected unless serious action was taken to prevent the South African Government from pursuing their policies. It did so in these words:
"That question In front of heads of government is in our view clear. It is not whether such measures will compel change"—
354
the "measures" being economic sanctions"—
"it is already the case that their absence, and Pretoria's belief that they need not be feared, defers change. Is the Commonwealth to stand by and allow the cycle of violence to spiral or will it take concerted action of an effective kind? Such action may offer the last opportunity to avert what will be the worst bloodbath since the second world war".
What was the response of the British Government to that warning? What has the British Government done since? At that time the Minister of State at the Foreign and Commonwealth Office, the noble Baroness, Lady Young, responded to the debate by saying that the British Government were basing their hopes on dialogue and persuasion. What has happened as a result of the policy that has been followed by the British Government since that report was published? So far as I can see, the main action that has been taken—in fact the only specific action that has been taken by the Government since the publication of the report—is that the Security Council vetoed the motion for mandatory sanctions to be imposed on South Africa.
What has been the consequence of that absence of action of two years ago in South Africa? It has been a continuation, a strengthening and a deepening of the state of emergency. It has been a widening of censorship. It has been an increase in detentions, including hundreds of children—children as young as nine years old. It has been the arrest of bishops and other clergymen. The military are still in the townships, and the Eminent Persons Group report showed what danger would lie ahead unless the military were removed from the townships. The military budget has been increased this year by over 20 per cent. Literally hundreds of people over the 18 months have died. The neighbours of South Africa have been bombed by the South African Air Force.
The South African Government have refused to make any move towards meeting the United Nations resolution of 10 years ago, Resolution 435, which demands the independence of Namibia. At this very moment South African forces are in Angola in what is no less than an international invasion of a nation state. Over the past two weeks we find that the South African Government have taken large steps in the further oppression of their people—the banning of 18 anti-apartheid organisations, including significantly greater restrictions on the trade union movement, and the threats made to clergymen like Bishop Tutu and Dr. Boesak.
When we last debated the issue in 1985–86 her Majesty's Government had two alternatives policies that they could pursue. One was diplomacy and persuasion, which had been the policy of British Governments for 80 years and resulted only in a continual reduction in the rights of non-Europeans in South Africa, and increasing state terrorism against them; the other was positive action as demanded by the rest of the Commonwealth, the majority of members of the EC, the United Nations and not least the majority members of the United States Congress.
The hopes held out by Her Majesty's Government that their policy would result in a liberalisation in South Africa are very well expressed in a book just published by a white English speaking South African. In the book entitled "White Boy Running", Christopher Hope, the author, spoke of liberal hopes.

355
I particularly hope that the noble Lord, Lord St. John of Bletso, will note this because he and I have debated many times the issue of the position of white liberals in white South Africa. I believe that this sums up the views expressed by Christopher Hope through his personal experience:
"The star of white liberal opposition must have exploded many light years ago and yet the news is only now filtering through".
This record shows the total failure of the policy adopted by Her Majesty's Government. In that failure Her Majesty's Government must share responsibility for the consequences that I have outlined. I do not doubt that the vast majority of members of the Government and of the Conservative Party are opposed to apartheid. That is not enough. As I have said in the House on other occasions, apartheid is only the latest section of the policy of white supremacy that has dominated South Africa for 100 years. It is not enough to say. "We are against apartheid". If the Prime Minister is sincere and honest, either she will admit that she is supporting President Botha and the continuation of white supremacy, despite her professed hatred of apartheid, or she will recognise that the rest of the world is right, that she is wrong and that action, not words, is now necessary if the continent of Africa is to be saved from total disaster.
We have talked about sanctions before. I hope that no speaker in the debate will go back to the old argument that sanctions are counter-productive or impossible. I have always advocated in this House and elsewhere that sanctions must he specific and aimed at a target that can be reached. I have always suggested that the sanctions we advocate are not punitive sanctions, nor are they total sanctions; they are sanctions aimed at reducing the power of the South African white regime to torture, to maim and to kill the opponents of that regime and at the same time to persuade those whites—and they exist—who do not believe that the future of South Africa can ever be peaceful so long as white supremacy remains a first principle that their self-interest lies in negotiations with the genuine representatives of the whites.
A whole variety of sanctions has been proposed by Africans themselves. Bishop Tutu wants us to withdraw our ambassador. There have been suggestions that we should ban flights. There have been suggestions that sanctions should be placed on mineral production, the coal, diamonds and gold of South Africa. I have said before in the House that, if the IMF and the United States were to start selling gold, that in itself would be something against the South African regime, because a reduction in the price of gold would strike directly at the revenues that the South African Government use to pursue their military objectives.
We have always to be firm in giving our full support to those who are our allies in South Africa: they are the front line states who will suffer most from sanctions and who have always admitted that fact. I hope that no one will argue tonight that apartheid will be destroyed by increasing the prosperity of the South African Government. It has been during those periods of maximum prosperity that the worst features of apartheid have been imposed. It has been during the weak periods—as it was two years ago
356
during the financial crisis in South Africa when it appeared that the economy was dependent on Western finance and South Africa was worried about its future—that the few cosmetic reforms have been attempted.
We are standing now at a crossroads so far as the future of the whole African continent, and perhaps far wider, is concerned. Unless we show ourselves to be firm supporters of those who are aiming at full democracy in South Africa, irrespective of colour, they will see that there is no peaceful opportunity to secure their human rights. It has always been a constitutional principle that when people are prevented from securing their rights by constitutional means they have to turn to violence.
For 40 years the African National Congress forswore violence and attempted non-violent resistance. This week we have seen in South Africa that the Africans are so angry that, even after the banning of the 18 organisations, they were able to conduct a nationwide general strike.
Those are the issues today. We need to know where our Government stand on these issues. We cannot be content with the old, tired excuses for not taking any action and for going on talking irrespective of the increase in state terror in that country. We have a right to know from the Government, after the experience that we have all seen and all endured during the past two years since they forswore sanctions, what is their attitude today to a new and graver situation than we have ever faced before in regard to the future of South Africa.
7.42 p.m.
The Lord Bishop of Manchester: My Lords, I am grateful to the noble Lord, Lord Hatch, for tabling this Question and I look forward with some anxiety to the reply from the Minister. I think it is true that ritual condemnations of apartheid are no longer enough in this very grave and serious situation that faces South Africa, the world and our own country.
Your Lordships will be aware that the Archbishop of Canterbury has sent his personal envoy, the Bishop of Lichfield, to South Africa to meet Archbishop Desmond Tutu and other Church leaders there. Part of the reason is a gesture of solidarity which has been put on the form of a message to President Botha: "You touch one of our bishops and you touch all of us". It is also a sign that the British Churches feel, through their leadership, that much more is required from us in this country and particularly from our Government than anything we have yet seen as a response to what is happening in that tortured country.
The statement of the 18 bishops from South Africa—it is noticeable that the Bishop of Namibia, Bishop James Kauluma, was included—said that they would not be deterred by threats or accusations from obeying God, who in the last resort has a higher claim on their allegiance than any kings, princes or presidents. That is something of a classic statement of the limitations of Church obedience to the state—we should obey God rather than man. It is noticeable that the action for which Church leaders were arrested—including Archbishop Tutu, although only

357
temporarily—was simply to try to present a petition to the Parliament and to the President.
It is this clamping down on all legitimate forms of opposition which is so deeply disturbing and highly dangerous in that situation. As we approach the events of Holy Week and Easter, I think that Dr. Alan Boesak's words, powerfully delivered in the style of the late Martin Luther King, will have struck a chord in many parts when he stood in the pulpit during the great service which was held when outside meetings had been banned and said, "You can put a ban on our organisations but Jesus Christ is Lord. You can even put us in prison but Jesus Christ is Lord". Therefore, we are faced with a situation in South Africa which is of increasing gravity.
It is noticeable too that during the events leading up to the imminent execution of the Sharpeville Six, which has mercifully been stayed, President Botha asserted that he was not able to intervene in the legal processes. At the same time we have the news at the moment that he has stopped the trial of six white and black soldiers over the death of a Namibian citizen on the ground apparently that South African defence forces engaged in the enforcement of law and order and defence are not liable to prosecution if they have a genuine conviction that they are carrying out their duties.
We must express thanks to the Prime Minister for her strong statement over the Sharpeville Six. Many of us were very grateful for that. The case is by no means finished but it is at the moment suspended.
I believe that the Government must face the situation that Britain and the Government are seen by many parts of the world as friends of South Africa. That may seem very unfair, because the Government have frequently made strong statements about the iniquities of apartheid. However, we are reminded of the statement of one of the great civil rights leaders in the United States: "We will not listen to what you say, but we will watch carefully what you do". It is what we actually do that counts in the South African situation.
Over the years in this country the leadership of the British Churches has moved steadily into the position of calling for disinvestment and for selective targeted sanctions on South Africa as the last means open to us of bringing some effective pressure to bear. The noble Lord, Lord Hatch, said something about what this means in terms of the advice of the Eminent Persons Group, and that is advice which has never been properly followed through.
I should like to say a few words about black support for sanctions, because this is a question which is often raised. I have seen it queried in a letter in the press even today. The argument goes that there are many blacks in South Africa who would not support sanctions. I have little doubt that up to a point that is true, but the most genuine voices of black leadership now come from the leadership of the Churches who are able to express themselves; from people like Archbishop Tutu and Dr. Alan Boesak. I believe that they are speaking for the great bulk of their people in calling on Britain and other nations to act more effectively.
358
As to whether sanctions would be effective, no one can really answer that until sanctions have been tried. Previous arguments about the ineffectiveness of sanctions in the case of Rhodesia, as it then was, do not carry complete conviction because they were never followed through as they should have been. I believe that in co-operation with the international community this country has an opportunity to play a part in trying to bring that kind of pressure to bear on the present South African leadership.
It has also been argued that the results of the recent white elections, showing a distinct swing to the right, indicate that increasing pressure on South Africa would be ineffective. To my mind the argument cuts right the other way. President Botha and the present leadership are under great pressure from the Right wing. The pressure must surely be increased in all other directions and particularly from outside the country to show that the rest of the world simply will not put up with such policies and a clamping down of all legitimate and peaceful opposition.
I had the opportunity of meeting last year Mr. Oliver Tambo the President of the African National Congress. I remember him saying to the leaders of the British Churches: "Please tell us what we should do. We have tried for many, many years to pursue peaceful means of resistance. This was completely and utterly ineffective. We were forced to take up arms. We are concerned to keep our struggle within decent limits as much as we possibly can." We were able to represent to him the deep desire of many people in this country for a peaceful solution and our reluctance in any way to support violence. If it had to be violence our desire was that it should be limited to military targets. We had to see the desperately difficult situation in which the African National Congress has been placed over the years. I hope the Minister will be able to respond positively to this Question tabled by the noble Lord, Lord Hatch, and to give us some encouragement in believing that the British Government are going to produce more effective action.
7.51 p.m.
Lord Stewart of Fulham: My Lords, I believe it is some 30 years since the Government of South Africa fell into the hands of a group of people who put into practice the policy of apartheid. Since then a number of things have happened. There have been what were called reforms in apartheid; shifts of policy this way and that. But one fact has remained true throughout. The situation is that three-quarters of the population of South Africa have been denied any kind of political rights. They have no votes; they cannot legally engage in organised political activity. Not only is that the case now but the South African Government make it clear that this is to be a permanent condition. They are not saying, as imperial powers have sometimes said, "We cannot give you votes because you are not yet ready to exercise political power". In effect they are saying: "Because you are of a particular race, you are permanently debarred from any legal participation in the government of your country".
What happened? Political parties were formed and the African National Congress came more and more

359
to the front of the stage. A number of prominent black citizens of South Africa were put in prison. We were told that they were imprisoned and would go on being imprisoned until they renounced the use of violence. What does that mean? It means that first you say to three-quarters of your subjects, "You have no prospect of getting political power peaceably, and if you try to get it in the other way that shows you are addicts of violence and cannot expect any support or sympathy from the government".
From the first proclamation of apartheid one moves to the denial of political rights and the denial of legal, political activity. Most recently, since these actions have resulted in criticism in the press and elsewhere, we have the banning of free speech and a free press. The process goes on all the time. The South African Government are meeting a rising tide of resentment and they are trying to deal with it by the process of constantly trying to pile up sandbags against the flood. The flood will not be contained in that manner.
The demographic situation is such that the three-quarters of the population I have mentioned will gradually shift and the proportion of people denied political rights will become steadily a larger proportion of the whole population. There is no sign of their being discouraged by the actions of the South African Government from resistance, from protest, and from adopting measures that the South African Government call "illegal". This is the situation that the world as a whole has to face and Britain in particular. I say Britain in particular partly because we have connections with South Africa going back a long way. We have very considerable trade with South Africa. More particularly, it is because the British Government have taken up a policy towards the South African situation which is the object of much criticism throughout the world. As I understand it, the Government's policy is that you ought not to apply sanctions because they will be counter-productive but if you remain in an easy relationship with the South African Government you will be able to exercise powers of persuasion to deal with the growing menace of the situation. I agree with the view on sanctions put forward by my noble friend Lord Hatch of Lusby.
For the moment, I wish to shift the argument onto the Government's own ground. As I understand it, they are saying "We do not believe in sanctions for reasons we have often stated. We believe that instead we should engage in a policy of persuasion and influence." What is being asked in this Question is what kind of persuasion; what kind of influence are you exercising and what harvest do the Government expect to reap from this? That is the situation in which we are placed. That is the problem that the Government will continually have to answer. So far there has been no sign that the policy they have adopted—namely, the rejection of sanctions and a policy of trying to exercise peaceful persuasion—is getting them anywhere at all.
There is one other argument that I should deal with. When we raise the question of the injustices of apartheid and the duty of the British Government to do something about it, we are sometimes told that
360
this is very hypocritical because there are many other tyrannies and cruelties in the world so why concentrate particularly on injustice to South African blacks? It is quite true that the planet is disfigured by tyrannies and acts of injustice of many kinds and in many places. If we were asked which is the most cruel and the most wicked, it would indeed be a hard question to answer. There is one practical question that we can answer. That is the question of which of them at the moment is the most dangerous to us and to mankind as a whole? I think it is clear from the situation in South Africa, and radiating out from that into the African continent as a whole, that this is the one where the danger of doing nothing is the most serious. The situation has been getting worse and it will go on doing so.
When I consider the South African question, I am sometimes reminded of the terrible words used by Abraham Lincoln at his second inauguration when the civil war in America was drawing to its end. He said:
"It may be the Almighty's will that this struggle should continue until every drop of blood drawn by the lash is paid for by one drawn by the sword and that all the wealth created by the bondmans's 250 years' of unrequited toil is destroyed."
Similar considerations may apply in Africa if we allow matters to go on as they are at the present time. We shall face ever-increasing destruction and slaughter. It is this problem which is on the Government's doorstep. It is not to be driven away by the kind of rather flippant attitude towards it which the Prime Minister sometimes adopts when she suggests that those of us who believe in sanctions are both stupid and immoral. Even if she were right about that, it would not free her and her Government from the obligation of finding something else that might be effective to deal with a situation that grows, gets steadily worse and is fraught with menace for us, for Africa and for the world.
8 p.m.
Lord Greenhill of Harrow: My Lords, for a very few minutes I should like to take advantage of this debate to raise the question of the withdrawal of Miss Zola Budd from the British team in the world cross-country championship in New Zealand. The noble Lord, Lord Hatch, encouraged me to do so and I assume that he agrees that there is some connection with his Question this evening. I recognise that it is a very trivial matter compared with the sombre events and pictures that have been so eloquently put forward by the three previous speakers. I believe it is wrong that the noble Lord, Lord Hatch, should trigger a debate on this very grave question by, so to speak, a surprise Unstarred Question at this time of the day and at this stage of Parliament.
The situation justifies a debate with a full House so that we can draw on the knowledge and experience of noble Lords who are absent tonight. That does not mean that the wise words of the right reverend Prelate and the noble Lords, Lord Stewart of Fulham and Lord Hatch of Lusby, are wasted. But it is the proper use of this House to discuss these matters when there is a full assembly of its Members.
I return to Miss Budd. Before speaking tonight I was in touch with the office of the Minister for Sport. A very courteous official quickly denied that the

361
matter of Miss Budd was anything to do with him. In the best tradition of Pontius Pilate, he washed his hands of the whole business. That was a disappointing response because most people consider that Miss Budd has suffered an injustice and that this country has suffered an injustice.
Many people in different walks of life have chosen British nationality for the undisguised purpose of their own advancement. These people, from all walks of life—from the arts, the theatre, music, the professions, medicine and so on—have contributed to the good reputation of this country, and we welcome them here. However, they are not criticised for visiting the country of their birth and seeing their families there; for the most part the countries of their birth are ones in which human rights are held in contempt and in which cruelties, which compare with some of the cruelties in South Africa, are perpetrated. I have seen with my own eyes the contempt with which black people are treated.
I understand that no firm evidence has been produced of objectionable behaviour by Miss Budd when she was recently in South Africa. Indeed there is a strong possibility of mistaken identity. Identity is often mistaken accidentally, and not infrequently deliberately. It is sad to reflect—perhaps it is significant—that some of the sharpest competitors in the event in which she specialises come from countries such as Ethiopia, which have the most appalling record of human rights. I raise this matter now not because anything can be done but in the hope that the Minister may be able to consider the position in good time for the approaching Olympics in Korea. Disputes of this kind serve only to raise emotions and make even more difficult the longed for elimination of apartheid.
8.4 p.m.
Lord Pitt of Hampstead: My Lords, I agree with the previous speaker in one respect. It would have been better to have had a full debate with a full House. I am nevertheless grateful to my noble friend for asking his Unstarred Question.
The issue of South Africa is serious and daily becomes more serious. South Africa has legislated for segregation and has legislated to prevent the majority of the people influencing the decisions that are made about the country. It did so for years and that majority did not rebel. They had petitions, they protested but they did not rebel vigorously. It was not until the Government went further and started to act atrociously towards them that they started to respond. I refer to Sharpeville in 1960 when the security forces shot 60 people just like that.
Over the years that government have steadily gone down that road and the position has become worse each time. That has convinced people in many parts of the world that action must be taken against South Africa. The consensus has been that, as South Africa relies greatly on foreign investments, economic sanctions are the best means of dealing with the situation. However, others—and his is where the British Government are conspicuous—have held that sanctions would not work, would probably cause
362
more harm than good, and that other methods must be used. British businessmen and the businessmen of many Western countries have attempted to deal with the matter by trying to build a black middle class, by trying to get more blacks into managerial positions and positions of prominence, and by helping in education and training to equip them to play a proper role.
This question is important and I want a proper answer. If one follows that road it is necessary that those workers should be able to organise in trade unions which are allowed to function properly. I grew up in the Caribbean. In any society where the bulk of the people do not have the vote they tend to express their politics through their organisations. When they have trade unions they tend to express themselves through those unions.
I have come along this circuitous route because a most serious development has been the detention and imprisonment of trade union leaders, even though the trade unions are not banned. Once it is impossible for working people to express themselves through their organisations—a point made by the right reverend Prelate—and once the Church leaders are prevented from expressing their worry and anxiety and from trying to explain to people how Church people are feeling, there is an impasse which cannot be dealt with except by violence. There is no history of that type of situation being solved in any other way than by violence. Therefore if one does nothing to unravel such a situation, one is accepting that there will be a blood bath in the area. Moreover, it is not merely the Government's action in relation to the workers or to those who are protesting within their boundaries. We have a government in South Africa who, in the last few years, have been waging war against their neighbours under the pretext that they are preventing illegal organisations that are stationed in those countries from affecting them. That is the excuse that has been made.
My noble friend mentioned the war in Angola. However, what is more sorrowful is what is happening in Mozambique. There the South African Government are sponsoring a resistance organisation which is deliberately undermining the economy of that country; the consequence of those activities has meant starvation for many people living there.
Her Majesty's Government have this picture and are aware of all the factors that I have mentioned. However, until now they have said that sanctions will not work and will do more harm than good. Those of us who have studied what some businessmen are doing, as I just mentioned, and who know about some of the work that the British Government do by way of scholarships and so on, realise that they probably feel that that is the way in which they can best help the situation, in addition to keeping an open door and thus being able to talk to the South African Government.
Surely the recent developments suggest that that approach cannot work. We must find a way to dissuade the South African Government from following their present course. That is why the Question put by my noble friend is so important and I am most grateful to him for putting it. I hope that

363
when he replies the Minister will tell us what the Government see as their role at present. Furthermore, can he tell us what they think they can do to try to dissuade the South African Government from travelling down their present road? Unless the Government have an answer to that question, in effect they have no answer at all to the problem.
8.13 p.m.
Lord St. John of Bletso: My Lords, as one who has spent most of his life in South Africa I join the noble Lord in expressing my grave concern at the retrogressive and repressive measures announced by the South African Government in restricting passive and active opponents to their policies.
I believe that President Botha is in a way in a stalemate position in that he is being pressurised by the far Right and the far Left. Moreover, I believe that there are now three categories of South African nationalists. First, there are the 1,000 Year Reich nationalists, the Afrikaans Weerstand Beweging, those who believe that the status quo will continue for the rest of time. Secondly, there are the Aprés nous le déluge nationalists, those who believe that it is all right for their lifetime, Jack, and who do not really mind about their children's lifetime. Thirdly, and more importantly, there are the liberal nationalists.
On previous occasions I have given credit to the reforms that have so far taken place in South Africa. There is no denying that more reforms have taken place over the last six years than in previous years. However, I contend that those recent repressive measures—this is expounded by what the noble Lord, Lord Hatch, had to say after his lunch today—have done untold damage to the confidence which the international community may have had in the sincerity of the reform programme. The knee-jerk reaction has been to maintain the status quo with the forces at their disposal. The Government's achievements in their reform programme have in my view been severely stunted. I shall expound later on how I see the reform programe developing from here. In order for any negotiating process in South Africa to succeed there must be two pre-conditions: first, the eradication of all discriminatory legislation; and, secondly, the unbanning of all political groupings.
The reforms that President Botha has to date implemented have not materially changed the everyday lives of the bulk of the South African population, both black and white. Last year the President's Council recommended the scrapping of the Group Areas Act and the advent of "grey areas". The abolition of that Act would indeed promote integrated housing and education measures. However, what is desperately needed in order to build bridges between the opposing parties is a climate of trust. Indeed, it is that element of trust that I wish to expound upon later.
The South African Government are currently moving the National Council Bill, whose objectives are:
"For participation of all South African citizens in the planning and preparation of a new constitutional dispensation. The granting to Black South Africans of a voice in the process of government in the interim period and the furtherance of sound relations among, and the human dignity, rights and freedoms of all South African citizens; for
364
the achievement of the said purposes to establish a National Council, to provide for the constitutional function and functioning of the Council and to provide for incidental matters".
If the policy is to succeed it has to be agreed by all groupings, including the ANC, the UDF and others. I do not believe that it will succeed because it has not been addressed to all South Africans.
Central to the white nationalist party's manifesto is concern for the protection of minority rights. I was a lawyer in South Africa for several years and one principle which I always upheld was that South Africa was based on a rule of law with an independent judiciary. While I am not suggesting that that principle has been abandoned, there is a growing danger that respect for the rule of law has been lost. As much as I should have liked to expand on the implications of the Sharpeville Six trial, as well as the recent challenges to the Church, I feel I should curtail the length of my speech.
Many people may argue that the declaration of the state of emergency several years ago has succeeded in quelling much of the unrest in the townships; I certainly would agree that it has done so. However, the South African Government must not see that situation as a normal and continuing state of affairs.
I shall now address myself to the question posed by the noble Lord, Lord Hatch of Lusby: what action are Her Majesty's Government taking to dissuade the South African Government from silencing all opposition to their policy of apartheid? Many noble Lords have called for mandatory economic sanctions.
Does the noble Lord, and those other noble Lords who have spoken, honestly believe that economic sanctions can bring the South African Government to their knees? If so, I would support limited economic sanctions. My noble friend Lord Greenhill raised the issue of sporting sanctions and Zola Budd. Sporting sanctions have brought about integrated sport in South Africa. They have worked; but many South Africans will argue that now that they have integrated sport—and one cannot argue against that—the Gleneagles agreement will only be repealed when there is a change of government.
I have lived long enough in South Africa to understand the mentality, workings and determination of the South African Government. I am afraid that sanctions, as applied at the moment, are counter-productive. They have merely put people into long-term unemployment. The current unemployment level is 3 million. The blacks have invariably been affected by those measures. The measures have also led to a hardening of political attitudes. The recent by-elections and the swing to the far Right are evidence of that. One must however stress that the recent by-elections took place in Conservative strongholds.
South Africa lives on relatively few categories of exports. Gold, diamonds, platinum and coal are the most important. Coal sanctions have waned in importance in recent years, ironically because of an oversupply in the coal industry. I contend that if economic sanctions are to work they must be imposed universally. It is well known that for every sanction imposed there are two sanction-busters

365
around the corner who are only too pleased to make a quick buck. I advocate a Marshall Aid package to raise general standards of health, education and the other amenities of the country. One effective method of putting short, sharp pressure on the South African Government would be if every South African were to drop tools for three weeks. One might argue that they cannot afford to do that, but if they were to do so they could bring production almost to a standstill.
I would argue—this is disputed—that most black South Africans do not agree with the plea for economic sanctions. They want pressure to be put onto the South African Government. But will economic sanctions, as implemented at the moment, have any marked effect?
While I join in deploring the latest restrictive and repressive measures which the South African Government have taken against their opponents, let us urge Her Majesty's Government to act in concert with other members of the world community, in particular the OECD countries, in encouraging Pretoria to get on with its reform programme of which it has spoken for so many years. To achieve any long-lasting solution, the Government and the peoples must decide among themselves how South Africa will be governed. As much as I urge Her Majesty's Government, the rest of the Economic Community and the United Nations to place pressure on the South African Government to bring about change, it will have to be achieved through trust and negotiation.
8.24 p.m.
The Viscount of Falkland: My Lords, I should like to apologise for the late declaration of my intention to speak in the debate. I thank the noble Lord, Lord Hatch of Lusby, for giving me the opportunity to speak. Like the noble Lord, Lord Greenhill, I wish we had a larger attendance so that more well-informed and expert voices could be heard. I wish to address one question to the Minister. Is the British Goverment's policy towards South Africa today credible? The two main features of British policy in South Africa have been laudable, although they may have been criticised by those nations who wish for a greater commitment. The first feature of the policy is the wish to bring people around the table to move towards a negotiated settlement. My question on that is: is it now possible to reach a negotiated settlement when we can no longer have access to the people who previously could have sat around the table because of the banning of the United Democratic Front and the 16 organisations which have declared peaceable means as the way to bring about a settlement in South Africa? It seems to me and my colleagues on these Benches that that feature of British policy is no longer effective.
The second feature of British policy which, as I said, is praiseworthy relates to the measures to which they lent their name, carried out through the British Council for the promotion of education in South Africa, and the funding of the non-violent antiapartheid organisations which effectively no longer exist. Is not that second feature of British policy towards South Africa totally ineffective?
366
I follow the line taken by other noble Lords. What is the Government's present view and what are their intentions? It seems to me that they have only two options: they take more effective measures, or they do nothing. If they do nothing, they will lose further credibility with their friends. They will have the hostility of those countries which are totally committed, especially the third world countries. They feel that the British Government's policy is one of inertia; not one of hostility to black people, but that they hope things will disappear in the natural course of events. We on these Benches want to know what the Government intend to do. Every day that passes without a firm intention to act creates difficulties for us with our friends and those who are not so friendly towards us because of our position on South Africa.
I wish to ask a further question. West Germany has changed its position. It had previously taken a hawkish view of South Africa. I suggest that it was a more hawkish view than ours. By its recent abstention on the Security Council's draft resolution, which was an incredible turnaround for West Germany, it joins France, which continues to abstain on such occasions. We are therefore left in a conspicuous and damaging position. We stand alone in relation to our European partners. Would the Minister tell me how we are going to relate to our European partners in our approach to South Africa from now on? It seems to me that probably the most powerful and effective way in which we can put pressure on the South African regime is by taking more and more serious and effective action in Europe. But we are now getting out of step with our European partners and neighbours on this very difficult issue.
Perhaps I may leave noble Lords with those two questions which I should like to address to the Minister. If the Government are taking some time to make up their mind as to what positive action they can take, I hope that at least I may congratulate the Churches and warmly praise the initiative of the most reverend Primate the Archbishop of Canterbury in sending the Bishop of Lichfield on this visit. That at least shows in one section of our community a firm commitment and resolve to see things change in South Africa.
8.30 p.m.
Lord Cledwyn of Penrhos: My Lords, we are indebted to my noble friend Lord Hatch of Lusby for once again drawing our attention to the continuing crisis in South Africa. Here, as in other areas, there are limits to what we as a country can do to resolve the enormous problems which exist. Because of our long association we still feel a sense of responsibility and probably a sense of guilt for what occurs there.
My noble friend has said what action he thinks the Government should take. It is on the action which should properly be taken by the British Government that a sharp difference of opinion exists between the Government and the Opposition, all Opposition parties and many right reverend Prelates, including the right reverend Prelate the Bishop of Manchester. There appears to be no division on the attitudes towards apartheid, as many speakers have said. The Prime Minister, the Secretary of State for Foreign

367
and Commonwealth Affairs and other Ministers, including the noble Lord, Lord Glenarthur, have condemned apartheid time and time again in unequivocal terms. The Foreign Secretary repeated this condemnation in the debate on South Africa in another place on 29th February on a Motion in his name which ended by referring to:
"the aim of bringing the repugnant apartheid system to an end and establishing a non-racial, representative system of government."—[Official Report, Commons, 29/2/88; col. 674.]
Furthermore, the Foreign Secretary has also strongly criticised the recent repressive actions of the South African Government. It is these measures by that government and the inevitable response to them which has escalated the crisis to a new level of merciless government intolerance. We should remember that the National Party and even more extreme elements in South Africa have always argued that they preserve civilised values in southern Africa where they say they are menaced by ignorance, by anti-Christ and by communism. If Archbishop Tutu criticises them he is branded as a tool of communism and of the Soviet Union. He and other churchmen, black and white, of all denominations who publicly criticise the government's policies are excoriated, defamed and often thrown into gaol.
We should not be surprised, for many of us in all parts of the House have believed and said that the cycle of violence would continue and grow unless genuine practical steps were taken by the government to move towards the non-racial representative system of government advocated by Sir Geoffrey Howe in his speech last month. I recall our debate here on the report of the Eminent Persons Group which was referred to by my noble friend Lord Hatch. I recall the speech made then by the noble Lord, Lord Barber, who was a member of that group. If that report, which had widespread international support, had been received constructively by Mr. Botha, there might be a different story to tell today. But the group was snubbed by Mr. Botha and their report destroyed when his government made deliberate military incursions into the front line states. They dealt with the report as Attila the Hun might have received the Sermon on the Mount.
For such a government to pretend that they believe in an independent judiciary, in academic and press freedom and in other manifestations of a civilised society is a farce. They dealt the final blow to freedom of association on 24th February when they commanded the 17 opposition organisations to cease all activity. It was as a result of this that Archbishop Tutu and others set up the Committee for the Defence of Democracy which was again banned on 12th March.
What about the South African judiciary? They had and still have some respected judges who defended their independence and defended the separation of powers. The trial of the Sharpeville Six has put them very much to the test. My noble friend and other noble Lords have dealt with this case and I shall not go into detail tonight, save to say that the High Court judge who ordered a stay of execution pending an application for a new trial shows that there are men of integrity on the Bench in South Africa even today,
368
because this was a significant gesture of judicial independence. But more needs to be done to recreate confidence in the Bench. The next few weeks and months will be crucial.
Again, on the academic front, freedom is being progressively curbed. The universities are being told that there must be no politics on the campus or there will be no money for the universities. Press freedom, as we know, is a thing of the past and we now understand that the newspapers which have annoyed the government, despite the existing censorship, may be closed down. One of these is the Roman Catholic New Nation whose editor has been locked up over the last 12 months.
Finally, the emergency powers which were imposed in June 1986 seem now to have a permanent aspect. It is a depressing story from start to finish. It is depressing because we know that when governments try to hold back the tide of history, they end up in a far worse case than if they work hard to find just solutions. I am sure that noble Lords will agree with me that a solution seems very much further away today than it did as recently as when the Eminent Persons Group produced their report.
We are told that Mr. Botha must placate his Right-wing, but that will get South Africa nowhere. In its words and actions this Right-wing is as unpleasant and nasty a group as I have seen for a very long time. Is it not far more important that Mr. Botha should look towards the 25 million black South Africans who are excluded from Parliament? For repression sweeps away moderation. The moderate black leaders who would participate in democratic procedures will be weakened. Mr. Mbeki who was released from prison has been banned. Mr. Nelson Mandela who could have provided a bridge to a settlement is still in gaol. It is a monstrous misjudgment by the South African Government. If Kerensky is disposed of, then Lenin and Stalin may be lurking somewhere. Where will Mr. Botha and his people be then?
What should we do in these grim circumstances? We believe that the Government's weak reaction to the sanctions proposals is totally unacceptable. As the right reverend Prelate the Bishop of Manchester said, the ritual condemnation is not enough. The time is past. The Government recognise that a grave and dangerous crime is being committed against humanity and they proceed with great solemnity to bind the defendant over to keep the peace.
I regret to say that the position of the Government is also ambivalent. After all, the Prime Minister has accepted the principle of sanctions when she agreed to apply them to krugerrands at the Commonwealth summit at Nassau, and when the Government applied sanctions towards other countries with the support of my noble friends and of the other Opposition parties. It is a sad state of affairs, and the arguments that sanctions would be ineffective and that black Africans do not want them or that they would be harmed by them are not sustainable.
Black Africans want action which will bring apartheid to an end, and what they are ready to sacrifice is a matter for them, not for us. What indeed would the British people have said in 1938 if they had

369
been told, "Well, you must not be called upon to sacrifice. You should not be prepared to sacrifice"? What would we have said at that time and what would have been the consequences of that? We must try to understand the attitudes and the feelings of the black South Africans at this time.
The Prime Minister and her colleagues have from the start taken a determined stand against what we would call effective and meaningful sanctions. In the debate on 29th February to which I have referred, Sir Geoffrey Howe condemned the South African Government in the clearest and most unequivocal terms. He said:
"South Africa is not the only country where there is racial discrimination, but South Africa claims to be a part of Western society and to share Western democratic values. Yet, tragically, South Africa is the only country which has institutionalised racial discrimination at almost every level of society … Instead of moving forward, the South African Government now seems to be moving backwards".—[Official Report, Commons, 29/2/88; cols. 675–676.]
Here we are at one with the Foreign Secretary and we support every word he said. It is when we come to the action which we believe should be taken in response to these policies that we regrettably part company. The Foreign Secretary condemned violence and we can join him there too. But violence is the inevitable consequence of the policies and actions of the South African Government.
The Government say that sanctions would stiffen resistance and worsen the cycle of violence and repression, undermine the economy of South Africa and the economies of neighbouring front line states. I agree that these are arguments which must be weighed in the balance. But when black South African organisations like the ANC, neighbouring front line states, the Commonwealth and most of our EC partners call for sanctions as the only remaining action short of force which can influence the South African Government to change course, I believe the time is overdue for the Government to act decisively.
The established Church in this country has made its position plain and the Government should pay heed. The right reverend Prelate the Bishop of Manchester is an admirable advocate for his Church. The Bishop of Lichfield is now in South Africa on behalf of the most reverend Primate the Archbishop of Canterbury. He joined with 18 other bishops in declaring that;
"they would not be deterred, by threats and accusations, from obeying God who in the last resort has a higher claim to our allegiance than any kings, princes or Presidents".
That is the spirit which will ultimately prevail in South Africa.
8.43 p.m.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, the House will already be familiar with the Government's views on the complex and challenging problems facing South Africa and the South African region. But it can do no harm whatever to restate them again.
At the heart of all those problems lies the awful system of apartheid. Our position on that is quite clear. It is repugnant, it is a blatant abuse of human rights and it must go. To that extent it certainly is our business, to use the phrase of the noble Lord, Lord Hatch of Lusby.
370
Like the noble Lord, Lord St. John of Bletso, we too have acknowledged the reforms which the South African Government have made in the past. But while President Botha himself has acknowledged that apartheid is outmoded, the basic institutionalised structures of apartheid remain intact. The system continues to be based on fundamental racial discrimination.
As my right honourable friend the Prime Minister made clear in another place on 25th February, we utterly condemn the restrictions announced by the South African Government on 24th February against most of the leading extra-parliamentary political groups in South Africa and against certain leading political figures. The South African Government's new measures are a ban on legitimate peaceful political activity by many of those, both black and white, working by peaceful means for an end to apartheid. They are a further move towards silencing all those who speak out against apartheid.
We have sought hard to change the South African Government's mind. My right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs issued a Statement as soon as he heard the news. My right honourable friend the Minister of State at the Foreign Office summoned the South African Ambassador on 25th February. Our ambassador in Cape Town has made clear our views to the Government there.
We reject the South African Government's claim that these measures are necessary to:
"ensure the safety of the public".
They are measures of repression. Like the right reverend Prelate the Bishop of Manchester we are also profoundly concerned at subsequent actions of the South African Government against senior South African Church leaders, whose spiritual calling has led them to oppose apartheid.
We have recently witnessed yet another backward step. Only this week we learnt of the suspension of the leading Catholic newspaper, The New Nation. We deplore this action. The South African Government are removing basic freedoms from the majority of their fellow citizens, the freedoms of speech and expression.
All these measures are a recipe for despair among black South Africans. They are steps away from dialogue. The South African Government must realise that despair can only strengthen opposition to their policies. It will not lead to acquiescence—rather the risk is that it will breed violence. We urge the South African Government to think again, not only because their acts are unjust but because they threaten the future well-being of South Africa, and of all South Africans.
We wish to see apartheid ended by peaceful means. That was the theme of everyone who spoke in the debate. We are right to react with revulsion to apartheid and to wholly unacceptable acts by the South African Government. But, as the noble Lord, Lord St. John of Bletso, said, only South Africans themselves can find a solution to their country's problems. Change will not come until those in power in South Africa accept the need for it.

371
We are all frustrated when we look at what is happening there. Outsiders cannot impose solutions. But we are right to try to help the people of that country meet the challenge. What is needed above all is a genuine national dialogue between their Government and free and freely chosen leaders of the black community.
The most effective means so far identified of getting such a process started remains the "possible negotiating concept" of the Commonwealth Eminent Persons Group to which the noble Lords, Lord Hatch and Lord Cledwyn, referred. That concept is based on initial reciprocal and matching commitments by both sides. It calls for the unbanning of the ANC and other political parties. But we are now seeing intensification of proscription even of peaceful activity.
I can assure the noble Viscount, Lord Falkland, that we are doing what we can to dissuade the South African Government from silencing the opposition. We are urging them to come to the negotiating table. Our policy is one of pressure and persuasion. The restrictive measures that we have adopted are an integral part of that policy. That is why we have been scrupulous in implementing them. They are designed to bring home to the South African Government the need for change.
The measures now total 15. They include a rigorously enforced arms' embargo, a ban on oil exports to South Africa, a ban on military cooperation of all kinds, voluntary bans on new investment and the promotion of tourism and a ban on the import of South African iron and steel. These are substantial measures and they have indeed helped us emphasise to the South African Government our belief in the need for urgent changes. But restrictive measures do not in themselves constitute a viable policy. Their effects are limited. To impose more in present circumstances would not improve the prospects for political change.
The noble Lord, Lord Hatch of Lusby, very largely rests his case on his conclusion that sanctions are the cure-all for the South African problem. Others picked up that theme. Punitive economic sanctions, which many call for, are certainly not the answer. They would not promote peaceful change. They would be a catalyst for violence. They would stiffen those in the white community who oppose change. They would damage those whom we are trying to help—namely blacks. But the fact is that they simply would not work.
The noble Lord, Lord Cledwyn, suggested that my right honourable friend the Prime Minister had accepted the principle of sanctions. The Government have recognised the need for sending signals, such as the krugerrands issue, to the South African Government on the need for change. But we do not accept punitive sanctions which would hurt those we wish to help and which would prolong the conflict. We are outraged at the policies of the South African Government. But it is useless to adopt policies which would make matters still worse. Comprehensive mandatory sanctions are not the answer.
In answer to the noble Lords, Lord Hatch, Lord Stewart and Lord Pitt of Hampstead, perhaps I may
372
say that it is a fact that the South African Government have demonstrated their readiness to defy the rest of the world. That situation has come about in part as a result of previous sanctions. I agree with the noble Lord, Lord St. John, with all of his direct experience of that part of the world, when he says that sanctions would make South Africa's problems harder to solve. How could isolation of South Africa, economic warfare in the region, a declining economy, deepening misery for all races—in short, the consequences of punitive sanctions—possibly change minds among whites and promote the constituency which favours change? Sanctions would deepen the gulf dividing the races in South Africa. I give way to the right reverend Prelate.
The Lord Bishop of Manchester: My Lords, I am sorry to interrupt the Minister. However, it is difficult to follow the logic of the argument that certain measures adopted by Her Majesty's Government are said to have been sending signals to Pretoria and at the same time any further sanctions will he counterproductive. What makes one course productive and the other counterproductive? I do not follow that.
Lord Glenarthur: My Lords, I think that the question which the right reverend Prelate must answer when he promotes the idea of further sanctions is whether or not the sanctions will do what he wants them to do. All the experience we have gained from sanctions which have already been applied tells us that they have done the reverse. They have strengthened the resolve of certain elements in South Africa. They have demonstrated to the rest of the world that the South African Government are ready to defy the rest of the world. There is nothing to suggest that they would not continue to do that. They would defy any action which the Government may take, if we were to go down the road suggested by the right reverend Prelate.
Our approach must remain positive. Instead of punishing ordinary South Africans for the sins of a government in which they have no say, we shall continue with our major programme of direct assistance to the black community. We are taking a lead in helping to educate black South Africans to escape the difficult present and progress towards a more promising future. We are also among the leaders in our programmes of economic and security assistance to the neighbouring states, as the noble Lord, Lord Hatch, would have us do. We are working to reduce the economic and transport dependence of the region on South Africa. Our activity in that area is widely recognised and it is welcomed elsewhere in Africa.
The noble Lords, Lord Stewart and Lord Pitt, and the noble Viscount, Lord Falkland, asked the same question: what kind of persuasion would we have and what kind of harvest would it reap? I must say that there is no panacea and it will be a long haul. However, we shall keep working for progress in South Africa. Whatever the South African Government may do, there are many South Africans on all sides who are showing themselves receptive to new ideas. Now more than ever they need our

373
support. We have a role in building bridges, easing conflict and promoting dialogue. The important work of our embassy and our ambassador in South Africa is essential in that.
We shall keep up the pressure. We shall continue to condemn apartheid. We shall continue to condemn repression. We shall continue to condemn abuses of free speech and human rights. We shall continue to use our contacts with the South African Government to press on them the need for fundamental change. There is an important job to be done both by Ministers and officials in London and by our ambassador in South Africa.
The noble Viscount, Lord Falkland, asked about our role in Europe. We shall keep in close contact with our EC partners and with the Commonwealth. We shall continue to examine together how we can work for peaceful change. Above all, we shall continue to seek to persuade the white community in South Africa that change is in their own interests. I think that point was well made by the noble Lord, Lord St. John. We shall press for the release of Nelson Mandela and other political prisoners, and for an end to the ban on the ANC and other political parties in the context of a suspension of violence on all sides.
We shall continue to take every opportunity to make known our opposition to actions which infringe the sovereignty of neighbouring countries or further destabilise the region. We shall call for a peaceful settlement in Angola and Namibia through the withdrawal of all foreign forces in the region. I can assure the noble Lord, Lord Hatch, that we remain committed to Security Council Resolution No. 435, which we helped to draw up in conjunction with our partners in the western contact group. As evidence of our commitment, we voted for Resolution No. 601 on 30th October.
As regards the matter of SADF intervention in Angola, which the noble Lord, Lord Hatch, raised, South African intervention has played an important part in the fighting between FAPLA and UNITA. We have always condemned all cross-border incursions from whatever quarter. South Africa's actions constitute a flagrant violation of Angolan sovereignty.
Lord Hatch of Lusby: My Lords, I am grateful to the Minister for giving way. He has given a long list of condemnations and promises to continue those condemnations. Does he not realise that during the whole course of those condemnations by the British Government the situation in South Africa for the non-Europeans has become steadily worse? Does he disagree with the report by the Eminent Persons Group which says that the removal of the threat of sanctions in itself defers change in South Africa?
Lord Glenarthur: My Lords, I do not know how many times I must say it or whether I can say it in any different way. I have explained the policy of the Government on sanctions. We believe that they would be counterproductive. They would damage the very people whom the noble Lord is so keen to help.
374
I do not think that he will be doing them a favour if he pursues that particular line of argument.
I accept that there is a very strong body of opinion which suggests that sanctions of the type which the noble Lord has proposed would be effective. I respect that point of view. But I must say in all sincerity to the noble Lord that we do not believe that they would produce the results which we all want. That is why I set out and shall further set out the procedures which we believe arc most likely to bring about change.
The right reverend Prelate referred to the question of President Botha's decision to halt the trial of six soldiers for the murder of Shifidi. I can say that I have seen the reports. I understand that lawyers are pressing for the trial to be continued. It is certainly important that those responsible should be brought to justice.
The noble Lord, Lord Greenhill of Harrow, raised the matter of Zola Budd. I listened most carefully to the noble Lord and, as he requested, I shall consider the situation he described. I should like to consult my honourable friend the Minister for Sport and, if I may, I shall write to the noble Lord and place a copy in the Library.
As for the detention of trade unionists to which the noble Lord, Lord Pitt, referred, I say simply that we condemn all detentions without charge in South Africa and we condemn all such abuses of human rights. We have made our views on that matter perfectly plain to the South African Government.
Lord Pitt of Hampstead: My Lords, will the Minister allow me to intervene? What I really wanted to know was, since the banning of trade union leaders is an obstacle to the sort of progress that he has in mind, what solution the Government have for unlocking that door. That is the real question.
Lord Glenarthur: My Lords, we have not done the banning, nor are we responsible for the detentions. That is a matter for the South African Government. By condemning it in the way that we have we hope that a gradual understanding will dawn upon the minds of the South African Government that what they are doing is counter-productive.
Perhaps I may briefly refer to the question of the Sharpeville Six case, which was raised by the noble Lord, Lord Cledwyn. We shall continue to follow the case of the six closely and with concern.
The South African Government claim to uphold Western values. On 15th March South African radio said:
"The present South African state is committed to the values of the Western, Judaeo-Christian civilisation …".
I say to your Lordships and to the South African Government tonight that their recent actions—which we deplore—are contrary to those values they claim to espouse. Their actions are anti-democratic, anti-libertarian, and anti-human rights. It is no accident that the South African Government are at odds with most of the Churches. Opposition to apartheid will continue to be voiced inside and outside South Africa, until it is abolished.
Anyone in South Africa who continues to believe in white supremacy must be sure of this: apartheid

375
will be ended. It can be ended peacefully or by violence. We want to see peaceful change. We urge the South African Government and the white community as a whole to recognise and to accept that this can only be achieved if they are prepared to negotiate with genuine leaders of the black community. The alternative is conflict.
House adjourned at three minutes past nine o'clock.