Lords Sitting of 13 March 1989

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

Hearing Aid Services
Lord Molloy asked Lord Molloy asked Her Majesty's Government:
Whether following discussions with the Royal National Institute for the Deaf, they will initiate a review of hearing aid services.
Lord Henley: My Lords, we have been giving detailed consideration to the suggestions for changes to the arrangements for the provision of hearing aids which have recently been made by the Royal National Institute for the Deaf. A wide range of views has been expressed on the proposals, and we are now considering the best way forward.
Lord Molloy: My Lords, I thank the noble Lord for that reply. I paid my compliments to him last week on his having the courage to take on his present job. Is he aware that the RNID is very much concerned at the length of time that it takes to obtain a hearing aid? Is he also aware that it is a complicated procedure and that most people involved are the older members of our community who go to their doctor because they are hard of hearing? The doctor then arranges an appointment at the local hospital's ENT department where patients are examined, and a further appointment is made for them to go to the HAC. Is he further aware that that process can take up to 16 weeks, and in some instances has taken up to two years? Is there some way in which that time can bereduced?
Lord Henley: My Lords, we are concerned about the long waiting times for hearing aids in some districts. In that context suggestions for change which have been made by the RNID are welcome.
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We have been keeping in close touch with the RNID and there has been full discussion with its representatives and others with a close interest in the subject. The Government are giving full and careful consideration to the points raised by the Fair Hearing Campaign.
Lord Molloy: My Lords, would the Minister be prepared to ask his right honourable friend to consider whether it might be possible for the very good hearing aids which at present can be obtained only in the private sector to be made available on the NHS?
Lord Henley: My Lords, I shall certainly pass on that request to my right honourable friend. I believe that internal hearing aids can be made available on the National Health Service if the consultant thinks it necessary.
Lord Allen of Abbeydale: My Lords, is the noble Lord aware that in addition to delay many elderly people also have problems getting to remote and inaccessible hospitals? Can more be done in the way of providing local hearing aid centres, with a reference to hospital made only when that proves necessary?
Lord Henley: My Lords, that will certainly be taken into consideration when Her Majesty's Government consider which way to go forward with regard to improving the provision of hearing aids.
Lord Underhill: My Lords, I too should like to congratulate the Minister. Does he realise that there is also a question of replacement of hearing aid equipment, often at very difficult times and at weekends which, as I know from my own family's experience, can be a problem? Does he recognise that that problem ought also to be considered in the review?
Lord Henley: My Lords, that is certainly a matter which needs to be considered. I gather that hearing aids provided by the National Health Service are on loan, but obviously that does not solve the problem of getting a new hearing aid at a difficult time. I

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shall certainly draw the noble Lord's comments to the attention of my right honourable friend and they will be taken into consideration.

Human Rights in Turkey and Kenya
2.39 p.m.
Viscount Buckmaster Viscount Buckmaster asked Her Majesty's Government:
What action they have taken, and propose to take, to diminish the infringements of human rights in Turkey and Kenya.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, we urge the Turkish Government to maintain the improvements in human rights made since the return to civilian rule in 1983 and to respect and abide by the terms of the international human rights conventions to which Turkey is a party. We take suitable opportunities to discuss the maintenance of high standards of human rights with the Kenyan Government.
Viscount Buckmaster: My Lords, I thank the Minister for that reply. Is he aware that Amnesty International, whose views on these matters are generally accepted as excellent, is gravely concerned about conditions in the two countries? Is he aware that in regard to Kenya it is concerned in particular about starvation in prison, and in relation to Turkey—which was mentioned in a Guardian article on 8th March—there is grave concern about beatings and torture in prison?
Lord Trefgarne: My Lords, we certainly regard Amnesty International's accusations about Turkey as serious and disturbing. However we are encouraged by the Turkish Government who say that they are investigating Amnesty's recent list of those alleged to have died in police custody and have taken action against certain of the police personnel responsible. We were further encouraged by a Turkish Embassy press statement in November last year, to the effect that the Turkish Government are making a sincere effort to eradicate torture and to adhere to the European Convention on Human Rights. Kenya's record generally is very good and stands comparison with any worldwide. President Moi gave a public commitment to protection of human rights during the Prime Minister's visit to Nairobi in January last year.
Lord Cledwyn of Penrhos: My Lords, while we welcome the noble Lord's encouraging remarks about the negotiations which have taken place between Her Majesty's Government and the Turkish Government, is it nevertheless not the case that there are about 18,000 political prisoners in Turkish gaols and that many of those prisoners are subjected to widespread and systematic torture? Would he agree that the point is not one of eradicating that slowly, but of the Turkish Government taking the matter in hand and stopping it because they have the power and authority to do so? Against that background, what is the attitude of Her Majesty's Government
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towards the application of Turkey for membership of the European Community? Ought it not to be the case that not a single political prisoner should be tortured in Turkish gaols before there is any question of Turkey joining the European Community?
Lord Trefgarne: My Lords, I am bound to agree that the situation in Turkey is far from perfect. We think that the best way to seek to secure a correction of that situation is by continued representation at appropriate levels—frankly, from the Prime Minister downwards. That is what has happened in recent months. As recently as January this year, my right honourable friend the Prime Minister raised the matter with the Turkish Defence Minister who was then on a visit to London. My right honourable and learned friend the Foreign Secretary has also raised the matter on appropriate occasions, as has my right honourable friend the Minister of State at the Foreign Office. So there is no shortage of opportunities to raise the matter with our Turkish friends, and we hope and believe that they will take account of what we say to them and bring matters to an early, much improved situation.
Lord Cledwyn of Penrhos: My Lords, I am much obliged to the noble Lord. Does he agree, however, that it is dificult to contemplate Turkey's membership of the Community in the present circumstances?
Lord Trefgarne: My Lords, if the noble Lord will permit me to say so, I think that that is a separate matter. Nonetheless, I agree with him that, if Turkey is to join the European Community, it must adhere to European standards in this regard.
Lord Hooson: My Lords, will the Minister tell the House how many British nationals are long-term prisoners in Turkey; how long has the longest been there; and are they ever visited?
Lord Trefgarne: My Lords, I do not have the figures before me, but naturally I shall find them and write to the noble Lord.
Lord Elwyn-Jones: My Lords, has the United Nations sub-commission on human rights been notified about those allegations? What has flowed from its intervention if any?
Lord Trefgarne: My Lords, Amnesty International is not an organ of the United Nations so I cannot say whether it has taken the steps to which the noble and learned Lord refers, but we should certainly have no objection if it wanted to do so.
Viscount Buckmaster: My Lords, will the Minister assure us that our representatives in those countries make frequent and powerful protests to the governments concerned when violations of human rights come to their notice? Does he agree that in cases such as that of Ethiopia, which was raised in a recent Question, the most effective way of protesting is for our representatives abroad to join with their European colleagues and making joint protests to the government concerned?
Lord Trefgarne: My Lords, I certainly agree that that is sometimes the best way to proceed in this matter, but I believe that we must deal with such situations on a case by case basis and treat them in the way that we believe will best bring about an improvement. So on some occasions it is perhaps better to go down a different route from that suggested by the noble Viscount.

Inflation
2.45 p.m.
Lord Grimond Lord Grimond asked Her Majesty's Government:
Whether it is still their policy to abolish inflation.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, yes.
Lord Grimond: One might say that hope springs eternal in the Government's breast, my Lords. Do they recall the far off day when they announced that their success in stopping inflation would be the judge and jury of their economic policy? Are they also aware that since then, the pound has fallen to about half its value and that according to a poll today the majority of people in this country believe that the Government will never stop inflation? Do they agree that they at least need some new policies if they still intend to stop inflation?
Lord Brabazon of Tara: My Lords, I can only reaffirm that it remains our policy to stop inflation. As for new policies, I believe that, given time, the tight monetary and high interest rate policies currently being pursued will bear down on inflation.
Lord Jay: My Lords, have the Government's present anti-inflation policies achieved the results that they intended?
Lord Brabazon of Tara: My Lords, the policy of high interest rates obviously takes a little time to work through the system. It is hoped that such policies will effectively reduce the rate of inflation. Even outside forecasters all appear to think that inflation will fall during this year.
Lord Paget of Northampton: My Lords, is it not true that, on the rare occasions when we have not had inflation, the population has had falling prices and misery? Does the noble Lord agree that the only time we have been happy is when we have had a comfortable and reasonably high rate of inflation upon which depends the prosperity of our industries and the happiness of our people?
Lord Brabazon of Tara: My Lords, I am afraid that I cannot agree with the noble Lord at all. There may be the illusion with inflation that people are enjoying high salaries or wage rises, but when they work out what it does to savings and other such matters they see that it is very damaging.
Lord Bruce of Donington: My Lords,as regards these matters taking time, does the Minister agree that there is most certainly a precedent for the rate of inflation doubling within some six or seven months? Is he aware that the present Government inherited an inflation rate of 10.3 per cent. and that within eight months it rose to 22 per cent. and took three years to come down to the rate that they inherited? In view of that, does the Minister believe that the policy of high interest rates is the real answer to the problem?
Lord Brabazon of Tara: My Lords, the noble Lord compares the present position with that under the previous Government. I simply remind the House that the present rate of inflation in this country is less than half that enjoyed as an average under the Labour Government between 1974 and 1979. The noble Lord says that inflation rose during the first year or so of this Government's term of office but that rise followed the tax changes which increased VAT and reduced income tax. If he looks at the tax and prices index for that period rather than the RPI, he will see a different picture.
Lord Bruce of Donington: My Lords, is the noble Lord aware that in addition to the doubling of VAT the Government also ensured that interest rates rose from 12 per cent. to 17.5 per cent. and that extra surcharges were put on gas and elecricity?
Lord Brabazon of Tara: My Lords, I fully recognise that when the Government came to power in 1979 various radical measures had to be taken to halt the decline from which we had been suffering in the previous five years.
Lord Hailsham of Saint Marylebone: My Lords, taking a rather longer view, is it not the fact that since about 3000 BC the value of money has been slowly running down like a clock?
Lord Brabazon of Tara: My Lords, I am sure that my noble and learned friend is right. We should nevertheless like to achieve a situation where the value of money runs down the very minimum amount—if possible, not at all.

Ozone Layer Protection: UK Funding
2.51 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Whether they are satisfied that the United Kingdom's donation of £3 million towards the United Nations Environment Programme is large enough to indicate this country's concern in reducing damage to the ozone layer.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, the United Kingdom's increased payment of £3 million to the United Nations Environment Programme (UNEP) is expected to make us the second largest contributor, after the United States. This is a clear indication of the Government's concern not only to

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support international measures to protect the ozone layer but also of the recognition of the value of UNEP's work in other areas of growing concern, such as exports of toxic wastes and the threat of global warming.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that answer and for doubling the donation towards this problem. Now that the problem of the damage to the ozone layer is more clearly identified, does the Minister agree that this sum of money looks paltry compared with the size of the problem with which we are dealing? Will this funding be kept under constant review because of the apparent urgency of the situation which is now developing?
The Earl of Caithness: My Lords, although it was British scientists who discovered the depletion of ozone in the stratosphere, we cannot solve the problem single-handedly as a nation. It requires every single country in the world to participate.
Lord McIntosh of Haringey: My Lords, I understand that the very welcome increase in funding arose from a disagreement between the briefing of the Prime Minister and that of the Secretary of State for the Environment. If the briefing had informed the Prime Minister that the figure was £2 million, would the result have been a £4 million increase?
The Earl of Caithness: My Lords, the noble Lord is wrong. To increase the contribution to UNEP was of course agreed before the conference.
Lord John-Mackie: My Lords, has the Minister seen the report on research that the Forestry Commission has undertaken which indicates that a hectare of trees laps up 5 tonnes of CO2? Would not another 10 million acres of trees in this country be quite a contribution?
The Earl of Caithness: My Lords, that is why in particular broad-leaved trees are being planted on an increasing scale. However, again that is a world-wide problem.
Lord Cledwyn of Penrhos: My Lords, while everyone in the House welcomes the increase to which my noble friend and the noble Earl have agreed, why have the Government cut the grant to NERC so substantially—almost by half? Why over the past nine years has his own department cut its grant with regard to research into pollution from about £42 million to £28 million?
The Earl of Caithness: My Lords, with respect to the noble Lord the Leader of the Opposition, the Question is about funding to UNEP. I am very happy to take up with him the question of funding to NERC, which we have covered on numerous other occasions.
Lord Cledwyn of Penrhos: My Lords, why does the noble Earl not take it up now?
The Earl of Caithness: My Lords, because, with respect, it is wide of the Question on the Order Paper.
Lord Dean of Beswick: My Lords, in reply to my first supplementary question, the Minister referred to the international responsibility in this matter. Can the Minister tell us why the Government were not represented at the international conference that took place over the weekend to discuss this problem and other related subjects? Does it not appear that unless a certain Prime Minister is conducting the orchestra no tune will be played?
The Earl of Caithness: My Lords, the discussions that were held in The Hague at the weekend were very limited in nature because only about 20 countries attended and there were some objectionable parts in the declaration even after it was watered down and signed.
The conference that we held was a very positive conference requiring action immediately on the ozone layer; and that is the result.

Prevention of Terrorism (Temporary Provisions) Bill
2.55 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, I beg to move that this Bill be now read a third time.
It is not often that events demonstrate so vividly and tragically the need for a particular piece of legislation as is the case with this Bill
Since the beginning of this year 18 people have been killed in terrorist incidents in Northern Ireland and a great many more have been lucky to escape death or serious injury. The explosion at Tern Hill barracks last month and the finding of explosives and arms in London and Yorkshire have shown the continued determination of the Provisional IRA to pursue their deadly campaign in mainland Britain.
The terrible tragedy at Lockerbie showed us the potential for evil by other terrorist groups. Death and terror have been the backdrop to this Bill, and I do not believe that anyone in your Lordships' House forgets that for a minute.
Our society is put under severe pressure by the threat of terrorism. The Government—whatever government it is—have a right, indeed a duty, to seek to protect their citizens. The Prevention of Terrorism Bill is part, and an important part, of our defences against the remorseless attack by terrorists on civilised society.
I have not during our debates pretended that this Bill is the only answer to the menace of terrorism. Quite clearly it is not. But it is a vital part of our armoury to bring terrorists to justice and to try to prevent further outrages and needless deaths.
All your Lordships share an abhorrence of terrorism, but we have not always taken the same view of the measures which we believe to be necessary and justifiable to tackle the menace—and

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that is perfectly understandable. Exclusion is one such measure. The Government firmly believe that it is a regrettable necessity in order to prevent acts of terrorism. I recognise that there are sound grounds of principle for objecting to the exclusion power, but it is notable that among those who believe that it should be retained are those on different sides of the House who have had direct experience of the exercise of the power.
I do not believe that my noble friend Lord Colnbrook, the noble Lord, Lord Harris of Greenwich, or the noble Lord, Lord Mason, support exclusion merely to defend their own previous actions. They support exclusion because they have had first-hand experience of the value and the effectiveness of that power. I appreciate your Lordship's disappointment that during the passage of the Bill through the House it has not been possible for me to outline the Government's considered response to the judgment of the European Court of Human Rights in the Brogan case. I can assure your Lordships now, as I have done previously, that the work is in hand—and urgently. I can also say that we hope to be in a position to announce that response later in the spring—and I hope that because I can say that now, the noble Lord, Lord Harris of Greenwich—who is nodding his head in a peculiarly vigorous fashion—will acquit me of any deliberate prevarication when I deliberately did not give him an assurance on the previous stages of the Bill that it would be before the Summer Recess.
The measure of agreement on the provisions in the Bill which are designed to tackle terrorist finance has been gratifying, and I am particularly grateful to noble Lords for the understanding attitude which your Lordships have displayed, even over matters on which your Lordships have taken a different view.
The Bill has been generally welcomed inside and outside Parliament. It is understandable that those who will be affected should be concerned about the impact of the new provisions, particularly those with responsibilities in the financial world. I am grateful for the constructive way in which these problems have been approached during the passage of the Bill. The provisions come into force next week, and we are keen that they should be effective very quickly.
I do not wish to detain the House any longer than is necessary on this occasion. The Bill has been throughly considered. Particular attention has rightly been given to both those parts which are new and which give rise to concern for those affected by the new provisions and those parts which affect fundamental freedoms.
The debate has been enhanced by the contribution made by those of your Lordships who have direct experience of the problems of terrorism associated with Northern Ireland, either as previous members of government who have had responsibilities in Northern Ireland or as members of the community who have been most affected by terrorism.
The noble Lord, Lord Mishcon, does not, I think, fit neatly into either category, but I believe that we all have cause to be grateful for the generous understanding and ever-articulate way, given the necessarily compressed timetable, in which he has
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approached the Bill and its important but complex new provisions. His patience, as always, has been remarkable; so has his comprehension; and also his eloquence. The House is grateful and is the richer. I beg to move.
Moved, That the Bill be now read a third time.—(Earl Ferrers.)
Lord Mishcon: My Lords, at once I respond to the gracious remarks of the noble Earl. They are typical of him and of this House. Having said how grateful I am, I thank the noble Earl also for the courteous manner in which he has dealt with those in your Lordships' House who feel a great urge to work with the Government in the common fight against the bestialities of terrorism.
As the noble Earl rightly said, the only difference separating Her Majesty's Government from Her Majesty's Opposition in the House has been the criticism we have expressed through no other desire than seeking to persuade Government that they should not introduce measures which might be counter-productive. The noble Earl referred to exclusion orders, debated in your Lordships'House on the basis that it was not only Her Majesty's Opposition here which took a certain view. We were supported by the views of the noble Viscount, Lord Colville of Culross, who was asked by the Government on two occasions to examine all these matters. The noble Viscount came to the conclusion on two occasions that exclusion orders should be excluded from the Bill.
The House has taken a decision; it is right that it should. My only regret is that the opportunity has not been given to Parliament when it considers these matters once a year by statutory instrument to decide whether the provisions are affirmed for a further year. I moved a Motion before this House which was supported by the noble Lord, Lord Henderson, who is in his place, that there should be a separation of the statutory instruments so that one could decide upon exclusion orders year by year as a separate matter from the whole of the rest of the Bill and the question of renewal.
I welcome what the noble Earl said about the Brogan case. I tried unsuccessfully—a habit that I am accustomed to in your Lordships' House—to find a solution to the Brogan problem and so assist the Government to come to a speedy conclusion on an issue that is urgent. I was supported by the noble Lord, Lord Harris. The noble Lord was unable to support me on other matters but agreed about the need for an urgent decision. No one could ask for more than the assurance that the noble Earl has given—that a decision on the matter will be announced by Her Majesty's Government this spring. Our seasons are not all that certain. I hope that we shall all recognise when spring comes; that in this instance it will come early; and that the Government's decision will therefore be announced early.
Again, I thank the noble Earl for the courtesy he has shown to all parts of the House in the presentation of this important Bill. However much we may regret the necessity for a Bill of this kind, it is

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an important measure that has now reached Third Reading stage.
Lord Harris of Greenwich: My Lords, I warmly welcome what the noble Earl has said about the Brogan case. He has put at rest some of our anxieties. I agree with the noble Lord, Lord Mishcon, that the announcement that we are to have in the spring is a substantially better assurance than that which I sought from the noble Earl earlier in the proceedings on the Bill.
Secondly, like the noble Earl, I agree that this legislation is essential to deal with the major terrorist threat with which we are confronted; not only from the IRA but also Middle Eastern terrorism. I fear that the exclusion order powers may be necessary for some time yet, but I am sure also that the noble Earl will recognise the anxieties that are held on this issue on both sides of the House, as the noble Lord, Lord Mishcon, has indicated. For my own part I recognise that they are likely to remain with us for some time.
On the issue of terrorist finance,I believe this is a major improvement to our anti-terrorist arrangements. The police service has developed a considerable amount of expertise in this area as a result of the arrangements we have made for dealing with the assets of drug traffickers. Thereare, I accept, major problems involved and we all recognise the anxieties of the banks in this matter. Nevertheless, I believe that the powers that the Government have asked for are right and entirely justified. I wish the Bill well on its way.
Lord Dunleath: My Lords,I hope that I may be forgiven a brief intervention. I fully realise that the point I make should have been made during Second Reading, Committee or Report stages, but unfortunately I was briefed on it only at the end of last week. The matter I should like to put to the noble Earl is that perhaps it is unreasonable for a bank official to be held responsible for making a decision about whether a transaction is likely to be connected with terrorist activities. One can imagine the busy situation in a banking hall with queues of customers coming in to make transactions, withdrawals and lodgements. Is it fair to ask a bank official to have to carry that decision on his own shoulders? I apologise for intervening in this way.
Earl Ferrers: My Lords, I am grateful to your Lordships for the way in which the Bill has been welcomed. The noble Lord, Lord Mishcon, reiterated his quite fair apprehensions and concerns about exclusion orders. We respect those concerns. We wish that exclusion orders were not necessary, but we believe that they are. The House has taken the same view.
I am grateful to the noble Lord, Lord Harris, for the way in which he reacted to what I said about the Brogan judgment. It is difficult. It is a problem to which we are trying to find a solution. I am glad that he is prepared to accept what I said.
The noble Lord, Lord Dunleath, said that he was worried about bank officials having to take such
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responsibility while a great deal of work was being done and the bank was full of people. That is a perfectly natural feeling to express on behalf of any bank official. The Bill seeks to ensure that those who are responsible for finances at least report their belief that funds are going to terrorists. It is important that that fact should come to light.
Inevitably, more constraints will fall upon the banks. I accept that fact; I understand the reason for concern. However, if that constraint enables terrorist funds to be apprehended and denies access to funds that terrorists would otherwise have had, the power is justified. It is not the intention of the authorities deliberately to make life difficult for those who operate the banking system. It is intended to make it an offence for those who know where the funds are going to say, "I did not really know". That is too easy an answer to give.
The powers we are taking in the Bill are exceptional. They should be rigorously scrutinised, as they have been during the passage of the Bill. Parliament will not lose sight of these powers once the Bill becomes law. The need for renewal of the powers, at least annually, should ensure that they continue, and that they should be retained on the statute book, only for as long as they are necessary. The continued independent scrutiny of the operation of the powers will also assure Parliament and the public that the powers are being used responsibly and with due regard to the rights of the citizens. I commend the Bill to your Lordships
On Question, Bill read a third time, passed, and returned to the Commons with amendments.

Elected Authorities (Northern Ireland) Bill
3.12 p.m.
Read a third time.
Clause 6 [Breach of terms of declaration]:
The Chairman of Committees (Lord Aberdare): My Lords, if Amendment No. 1 is agreed to I cannot call Amendment No. 2.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 1:
Page 3, line 13, leave out ("(that is to say, violence for political ends)").
The noble Lord said: My Lords, I should like to speak to Amendments Nos. 1 and 3. In moving the amendment we on these Benches do not seek any narrow political advantage. Your Lordships will see that the amendment has cross-party support. In particular, it is supported by two Members of your Lordships'House who live in Northern Ireland. It seeks to delete the definition of "terrorism" which is contained in the Bill. The House will know that the word "terrorism" is defined in the Bill as meaning the use of "violence for political ends".
All noble Lords who spoke in the Second Reading debate were critical of the definition. It has been argued that it is too restrictive and also that it is too wide. It has equally been argued that it is too rigid. The amendment was discussed at the Report stage but the matter was not pressed to a Division.
Considerable anxieties about the definition remain. I do not live in Northern Ireland, but I understand that the anxiety exists in the minds of those who do. No doubt we shall hear about that from the noble Viscount, Lord Brookeborough, and my noble friends, Lord Blease and Lord Fitt. There is considerable anxiety about the definition. The amendment is supported by noble Lords who live in Northern Ireland and have extensive experience of politics in that country. The object of the amendment is to ask your Lordships to remove the definition from Clause 6 and Schedule 2.
As a result of the difficulties with the definition there exists a strong conviction that the concept of terrorism by itself is superior to the definition contained in the Bill. Given the religious and possibly racial considerations, as well as political considerations which prevail in Northern Ireland, it is not clear why only violence in support of political ends is deemed to amount to terrorism for the purpose of the Bill. Why should the expression of support for violence for religious or racial ends not fall foul of the Bill
Even if one accepts that the Government are right in confining the meaning of the term to "violence for political ends", the meaning of "political ends" in the context of the Bill is by no means clear. We anticipate that councillors and lawyers will argue over what is meant by the term "political ends". Therefore, there exists a fertile ground for disagreement and dispute.
The object of the amendment is to leave out the definition. If your Lordships were to support the amendment, the practical effect would be to leave it to the court to decide, according to the evidence and the circumstances, whether an expression in support of violence shouldbe deemed to be support for terrorism. Instead of the Bill containing the definition which will be troublesome and will lead to argument and dispute, the amendment will leave it to the court to decide what is terrorism. We have a convinction that the judges of the High Court will recognise support for terrorism whenever it appears before them. I beg to move.
Viscount Brookeborough: My Lords, the amendment is also tabled in my name and I thank the noble Lord, Lord Prys-Davies, for his remarks about the deletion of the phrase "violence for political ends".
It is quite clear to everyone in Northern Ireland what is terrorism. We need no qualification of it, and I am quite sure that neither do the courts. The moment we introduce some form of qualifying statement we shall leave room for argument. There must be no argument and no way out for those who support terrorism. They must have no way of saying that what they did was not for political ends and, therefore, was not terrorism. Terrorism is quite clear to us in Northern Ireland and I am quite sure that it is clear to everyone in your Lordships' House. Therefore I support this amendment.
Lord Fitt: My Lords, as the noble Viscount has just said, anyone who has lived in Northern Ireland,
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particularly in the past 20 years, can be in no doubt as to what is an act of terrorism.
Let us go through them as we have read about them over the past 20 years in the press, and particularly in the Northern Irish press, because many acts of terrorism are committed in Northern Ireland which do not appear in the media or the press in England, Scotland or Wales. Acts of terrorism include murder, intimidation, the wrecking of homes, knee-capping-taking a person in a back alley in Northern Ireland and shooting at his knees or arms—and intimidation of witnesses who may otherwise be forced to give evidence in court. Those acts of terrorism immediately spring to mind. Other acts of terrorism take place which could be very hard to prove. Let us take an example of an injured person, victim of a knee-capping, who is found in a back alleyway with the blood coming from the recently inflicted wounds. Is that an act of terrorism? I believe that it is, without any qualification. In my estimation and to my knowledge, the perpetrators or that crime will be members of one or other of the paramilitary groups, particularly the IRA or some of the Loyalist organisations. I and everybody else in Northern Ireland would define that as an act of terrorism.
If a petrol bomb is thrown into the sitting-room or front room of a little house in the ghettos in Northern Ireland, that could easily be recognised as an act of terrorism without the qualifying words "for political ends". When someone is arrested running away from the scene, having set a house on fire with a petrol bomb, do you say to him, "Were you doing that for political ends? "Whether or not he admits that he was doing it for political ends, he has created terror in that home and possibly has committed an act of terror which has led to a loss of life. Therefore, there is no need for those qualifying words. The police, the army and ordinary citizens in Northern Ireland—anyone involved in the security situation as it has existed in Northern Ireland for the past 20 years—are all too well aware of what is an act of terrorism.
Perhaps I may take the subject of intimidation. If a note is put through a person's door, an envelope is sent with a bullet in it or a telephone call is made to an individual warning him that if he does not do such and such he will either be killed or maimed, the organisation does not have to be specified in the letter or telephone call. However, those are easily recognised as acts of terrorism. Is the person at the other end of the telephone supposed to say "Are you doing this for political ends?" or "Are you threatening me when you are putting this letter through my letter box for political ends?" There is no confusion whatever in the minds of the people in Northern Ireland.
I often wonder who the draftsmen are when they draft a Bill such as this. Have they any experience of Northern Ireland? I find it hard to believe any civil servant or draftsman from Northern Ireland would put his reputation on the line in demanding the inclusion of those words. Any civil servant or anyone else with a Northern Ireland background would know that the words are totally unnecessary.
In the legislation which has passed through the House in the past few weeks—and there will be more

15
today and in the following days—the Government have refused to include words and we on this side of the House have had to object; for example, the non-inclusion of the Attorney-General in another Bill. They have refused to add those words. In this Bill they have added quite unnecessary words. I hope that the Government will see the logic of those who have tabled this amendment. We do not believe that the words are necessary. We believe that terrorism is readily and easily identifiable—all too easily identifiable by those who live in Northern Ireland and have had to live with it for so long.
Lord Harris of Greenwich: My Lords, I very much hope that the Government will accept this amendment. I find it difficult to see on what basis they can resist it. If we look at Clause 5 we see that there is a new statutory obligation imposed on candidates for a district council or for the Assembly to make a statutory declaration. Clause 6, the clause we are now debating, deals with what happens if there is a breach by any district councillor or member of the Assembly in the terms of that declaration.
As the noble Lord, Lord Prys-Davies, said, what on earth is the point in adding the words:
"that is to say, violence for political ends"?
We are constantly told by Ministers when we deal with other Bills, sometimes justifiably, that matters should be left to the courts. Why are we not prepared to leave this matter to the courts? I do not believe that there will be any difficulty for a court to determine what is an act of terrorism connected with the affairs of Northern Ireland. I believe that by adding the words which appear in the Bill at present the Government have, for some reason that I do not understand, decided to limit the application of this clause in a way which I believe is inconsistent with their approach to the rest of the Bill. Therefore, I hope that the noble Lord, Lord Lyell, will be able to tell us that, having heard what has been said in this debate and on previous occasions, the Government are prepared to accept this amendment.
Lord Monson: My Lords, as the noble Lord, Lord Prys-Davies indicated, many of us of all political parties and none—because this is not a party political matter—still feel it essential to rectify the wholly unsatisfactory definition of terrorism currently in this Bill.
As has been said at earlier stages, for the Government to insert into a statute the superfluous definition of a word which needs no definition risks including matters which should be excluded and excluding matters which should be included. Indeed,it appears that the Government have now come round to this view because no less a person than the noble Lord, Lord Lyell, stated on Report:
"All of us know perfectly well what terrorism is. We think that there is a case for leaving the word undefined.—[Official Report, 6/3/89; col. 1347.]
There it is in black and white. Only the technical defect of not having extended the deletion logically to Clause 6 drew the criticism of the noble Lord, Lord Lyell. Therefore, one infers that had we done
16
that, he would have had no objection to that series of amendments.
However, it may be for the convenience of the House if I speak briefly on Amendments Nos. 2, 4 and 6 in my name and in that of other noble Lords which are alternatives to this one. On Report the noble Lord, Lord Lyell, gave a guarantee, or to be precise a near guarantee, that in practice the courts would be extremely unlikely to treat approbation of a trivial or minor act of violence as constituting support for terrorism. I believe that with some reluctance and reservations, we can accept this. However, this still leaves us with the exclusion of something which it is absolutely vital should be included; namely, intimidation, as the noble Lord, Lord Fitt, and the noble Viscount, Lord Brookeborough,have pointed out.
Every noble Lord who lives in Northern Ireland and who therefore can be presumed to know the situation as it exists on the ground (in particular the noble Lord, Lord Fitt) has pointed out that intimidation—that is, the threat of violence—is just as great a threat taken in its totality, as is actual violence. I would guess that for every 1,000 people murdered by the IRA there are perhaps 100,000 people who are intimidated to keep them quiet or to persuade them to turn their heads away. If one extended that to the United Kingdom as a whole I would guess that as many as 1 million people might be intimidated for every 1,000 murdered.
Therefore, it is essential that if there is to be a definition it will be useless unless intimidation—in other words, the threat of violence, whether physical violence to the person or to property—is included in the definition.
I am certain that the best course would be to leave out any definition, as is proposed by the noble Lord, Lord Prys-Davies, and others because any definition chosen is likely to be over-precise. I repeat that, in effect, the noble Lord, Lord Lyell, himself acknowledged that on Report. If, for any reason the Government and the House are unable to support Amendments Nos. 1, 3 and 5 and a second best amendment has to be carried, I very much hope that Amendments Nos. 2, 4 and 6 can be considered.
3.30 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, I am grateful to the noble Lord, Lord Prys-Davies, for opening the debate on this subject. Was I right in thinking that the noble Lord was also speaking to Amendment No. 5? He mentioned Amendments Nos. 1 and 3.
Lord Prys-Davies: My Lords, I was.
Lord Lyell: My Lords, speaking to Amendment No. 5 as well will be convenient to your Lordships. The noble Lord, Lord Monson, spoke to Amendments Nos. 2, 4 and 6.
The noble Lord, Lord Prys-Davies, again mentioned that he saw three difficulties in the Bill He said that difficulties had arisen, first, because the definition in Clause 6 is too wide; secondly, that it

17
might be too narrow; and, thirdly, that it is inflexible and too rigid. As has been pointed out, the odd numbered amendments—that is, Amendments Nos. 1, 3 and 5—delete the definition as it stands in Clause 6 and the accompanying schedule.
In view of all that has been said at Second Reading, in Committee, and on Report, perhaps I may risk repeating what has been said because we have been over this ground fairly thoroughly. Your Lordships have expressed views on what the Bill is about and what it is doing but we have included the definition in the Bill because it seemed to us, after nearly four years of consultation, that to do so would be of assistance both to the courts and to the candidates. These minor difficulties have been expressed in the House today, specifically by the noble Lord, Lord Harris, and the noble Lord, Lord Prys-Davies.
We believe that the courts might have been surprised to find that the word had not been defined in the Bill, given that we have already discussed and found definitions included in both the Prevention of Terrorism Act 1984 and the Northern Ireland (Emergency Provisions) Act 1978. We are firmly of the view that if no definition is provided the candidates would be left without any idea as to what does and does not constitute a breach of the declaration set out in Clause 6.
The fundamental objection to Amendments Nos. 1, 3 and 5, which remove the definition entirely, is that they do not address the first two concerns which the noble Lord has already expressed as being common ground; first, that the definition is too wide and, secondly, that it might be a little narrow.
The noble Lords, Lord Prys-Davies and Lord Harris, expressed the hope that if the word "terrorism" is left undefined in the Bill the courts will find a definition which would meet the objectives. Our view is that that would not be the outcome. If the word "terrorism" is left undefined the courts might well, in deciding the meaning in regard to this measure, have regard to dictionaries, let alone definitions in other legislation such as the Prevention of Terrorism Act and the emergency provisions Act, although the courts may well be wary of importing definitions from one statute to another. That is one of the reasons why we have defined the word "terrorism" in this Bill.
I take three examples of definitions given in dictionaries. Collins defines "terrorism" as:
"the systematic use of violence and intimidation".
The Shorter Oxford Dictionary states:
"The practice of using terror-inspiring methods of securing political ends".
In the valuable dictionary of Longman's the definition is:
"the use of violence to obtain political demands".
All those definitions differ slightly from the definition in the Bill but none is far away from the definitions that are set out in the Bill. It seems to us that leaving the courts to construct a definition of "terrorism" as it affects a breach of the declaration of councillors and their conduct as councillors is by no means guaranteed to produce the effect which all those who have spoken in support of the amendment
18
particularly want. We believe that left to themselves the courts would produce a definition which is hardly different from the definition in the Bill.
Of course, there will be marginal cases, no matter how "terrorism" is defined. The scope of definition is limited by the use of the word "violence". The Concise Oxford Dictionary, yet a fourth useful source, defines "violence" as:
"the quality of being violent",
and the adjective "violent" as,
"marked by great physical force".
I emphasise in that last definition the word "great" because violence is, by definition, extreme.
We expect that the courts will take that fully into account in deciding what constitutes terrorism. We are not, as stressed by the noble Lord, Lord Fitt, and others, speaking about minor or technical assault but about the threat and the use of substantial amounts of physical force.
I have to say that I cannot agree that the definition should be deleted from the Bill, as suggested by Amendments Nos. 1, 3 and 5, because we believe that to do so would certainly not serve the purpose that the noble Lord and others are seeking, let alone the purpose of the Bill.
Lord Prys-Davies: My Lords, I am grateful to the noble Lords who have spoken in support of this amendment. I express disappointment, but no surprise, that the Minister has been unable to meet the concerns which have been voiced. I am grateful to the noble Lord, Lord Monson, for reminding your Lordships of the Minister's statement at the Report stage when he said:
"All of us know perfectly well what terrorism is. We think that there is a case for leaving the word undefined"—[Official Report, 6/3/89; col. 1347.]
So there was common ground between ourselves and the noble Lord, Lord Lyell, at the Report stage. If the words that he then expressed reflected considered thought, we anticipated that possibly the Government might see their way clear to accept this amendment.
The Minister referred to three definitions of the term "terrorism" in three different dictionaries. The first definition was "the systematic use of violence". That is not far removed from our definition. At least there is no reference in that definition to "terrorism for political ends" or "terrorism to meet political demands". Here is ground for dispute and argument. We believe that the Minister was right when he told the House at the Report stage that all of us know perfectly well what terrorism is; we believe that the courts know perfectly well what terrorism is.
The Minister sought to defend the definition claiming that it has worked well in the context of the 1984 and 1978 legislation. In our view there is no direct relationship between this Bill, which deals with an aspect of electoral law, and the earlier legislation. Moreover, I am not aware that the definition in the earlier legislation has been tested. We believe that in the context of this Bill it may well be tested. There will be argument about whether or not this statement is in support of political ends. It will be argued that it was in support of political

19
demands. That ties in with a number of points powerfully made by the noble Lord, Lord Fitt.
By insisting that the term "terrorism" be defined as "support for political ends", the Government are inviting argument and dispute about what is and what is not a political end. As I said earlier, we on these Benches are not seeking any narrow political advantage. As far as I know, this particular amendment was not moved in another place. This amendment has cross-Party support and the support of Peers who live in Northern Ireland and know something about the Province. In fact they know a great deal about it. I invite your Lordships to delete the definition from this Bill.
3.43 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 82; Not-Contents, 114.

DIVISION NO. 1

CONTENTS

Addington, L.

Kinloss, Ly.

Amherst, E.

Leatherland, L.

Attlee, E.

Llewelyn-Davies of Hastoe, B.

Auckland, L.

Birk, B.

Lockwood, B.

Blease, L.

Lovell-Davis, L.

Bonham-Carter, L.

McIntosh of Haringey, L.

Boston of Faversham, L.

McNair, L.

Bottomley, L.

Mason of Barnsley, L.

Briginshaw, L.

Mishcon, L.

Brookeborough, V.

Molloy, L.

Bruce of Donington, L.

Monson, L.

Carmichael of Kelvingrove, L.

Mulley, L.

Murray of Epping Forest, L.

Cledwyn of Penrhos, L.

Nicol, B.

Davies of Penrhys, L.

Peston, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L. [Teller.]

Dormand of Easington, L.

Dunleath, L.

Porritt, L.

Ellenborough, L.

Prys-Davies, L.

Elwyn-Jones, L.

Rochester, L.

Ennals, L.

Romney, E.

Ewart-Biggs, B.

Sainsbury, L.

Falkland, V. [Teller.]

Saltoun of Abernethy, Ly.

Fitt, L.

Seear, B.

Gallacher, L.

Seebohm, L.

Galpern, L.

Serota, B.

Gladwyn, L.

Shackleton, L.

Graham of Edmonton, L.

Shannon, E.

Grey, E.

Stallard, L.

Halsbury, E.

Stedman, B.

Harris of Greenwich, L.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stoddart of Swindon, L.

Hayter, L.

Strabolgi, L.

Hill-Norton, L.

Taylor of Blackburn, L.

Hirshfield, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L.

Todd, L.

Hylton-Foster, B.

Tordoff, L.

Ilchester, E.

Turner of Camden, B.

Jay, L.

Underhill, L.

Jeger, B.

Wallace of Coslany, L.

Jenkins of Hillhead, L.

Williams of Elvel, L.

John-Mackie, L.

NOT-CONTENTS

Airey of Abingdon, B.

Allerton, L.

Aldington, L.

Ampthill, L.

Alexander of Tunis, E.

Arran, E.

Alexander of Weedon, L.

Barber, L.

20

Belhaven and Stenton, L.

Lyell, L.

Beloff, L.

McAlpine of Moffat, L.

Belstead, L.

McFadzean, L.

Bessborough, E.

Mackay of Clashfern, L.

Birdwood, L.

Macleod of Borve, B.

Borthwick, L.

Mancroft, L.

Boyd-Carpenter, L.

Manton, L.

Brabazon of Tara, L.

Marley, L.

Bruce-Gardyne, L.

Merrivale, L.

Butterworth, L.

Morris, L.

Caccia, L.

Mostyn, L.

Caithness, E.

Mowbray and Stourton, L.

Campbell of Alloway, L.

Munster, E.

Campbell of Croy, L.

Nelson, E.

Carnegy of Lour, B.

Newall, L.

Carnock, L.

Norfolk, D.

Cockfield, L.

Norrie, L.

Coleraine, L.

Nugent of Guildford, L.

Colnbrook, L.

Onslow, E.

Colwyn, L.

Orkney, E.

Constantine of Stanmore, L.

Orr-Ewing, L.

Cottesloe, L.

Oxfuird, V.

Cross, V.

Peyton of Yeovil, L.

Cullen of Ashbourne, L.

Platt of Writtle, B.

Davidson, V. [Teller.]

Portland, D.

De Freyne, L.

Quinton, L.

Denham, L. [Teller.]

Rankeillour, L.

Derwent, L.

Reay, L.

Dilhorne, V.

Redesdale, L.

Dudley, B.

Rodney, L.

Dundee, E.

St. Davids, V.

Effingham, E.

St. John of Fawsley, L.

Elibank, L.

Sanderson of Bowden, L.

Ely, M.

Selkirk, E.

Ferrers, E.

Skelmersdale, L.

Fraser of Kilmorack, L.

Slim, V.

Gibson-Watt, L.

Strathclyde, L.

Grimthorpe, L.

Strathcona and Mount Royal, L.

Hailsham of Saint Marylebone, L.

Strathspey, L.

Hemphill, L.

Swansea, L.

Henley, L.

Swinton. E.

Hesketh, L.

Terrington, L.

Hives, L.

Teviot, L.

Home of the Hirsel, L.

Thomas of Gwydir, L.

Hooper, B.

Thomas of Swynnerton, L.

Jessel, L.

Thorneycroft, L.

Johnston of Rockport, L.

Thurlow, L.

Kaberry of Adel, L.

Trafford, L.

Kimball, L.

Trefgarne, L.

Kinnaird, L.

Trumpington, B.

Lauderdale, E.

Vaux of Harrowden, L.

Long, V.

Wolfson, L.

Lovat, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.52 p.m.
Lord Monson Lord Monson moved Amendment No. 2:
Page 3, line 13, after ("violence") insert ("or threats of violence").
The noble Lord said: My Lords, I made the case for this amendment as a second best alternative to Amendment No. 1 when speaking to Amendment No. 1, so I shall not go through the arguments again. I was delighted to hear from the noble Lord, Lord Lyell, that he evidently agrees with me, whether he realises it or not. When replying to Amendment No. 1 he said—and I am certain that I copied down his words correctly—that we are talking about the threat or use of physical force.
That is excellent. That is what those of us who support Amendments Nos. 2, 4 and 6 are talking about too.
But unless the word "threat" is included in the definition, the Government's most commendable objectives will not be achieved. Whichever dictionary one chooses—the noble Lord quoted from a number of them—none is so foolish as to equate actual violence with the threat of violence. The case for these amendments as a second best alternative to the odd-numbered amendments is incontrovertible. I beg to move.
Lord Fitt: My Lords, I hope that the Minister and other noble Lords will accept the fact that these amendments are not being moved in a frivolous manner. Terrorism in Northern Ireland is a deadly serious matter. I have associated myself with the amendments with the intention of improving the legislation and of making life more difficult for terrorists. During the passage of the Bill through another place the impression seemed to be given that it was aimed deliberately at Sinn Fein to the total exclusion of other paramilitary organisations. Unfortunately, there are several paramilitary organisations, and they are all engaged in the same practices, of murder, maiming, threatening and intimidation.
I see the Bill as a way of lessening the influence of people who are either actively engaged in or actively support terrorist organisations. The amendments were tabled last week with the intention of adding the words,
"or threats of violence".
When I associated myself with the amendments last Thursday or Friday I had no idea that I would receive a certain telephone call today. At 2.25 this afternoon I had a telephone call in the House from a person in Belfast. He is a Londoner married to a Belfast girl and they live in East Belfast. Last week people wearing masks came to his house and threatened that if he did not leave Northern Ireland his life would be at stake. That is a threat of violence. That threat of violence could be ignored by the person to whom it was directed only at his own peril. That is the reality. It is not necessary to conduct an academic search through a dictionary to find out what is meant by a threat of violence.
We in Northern Ireland know only too well what it means. As the telephone call was at 2.25 I did not have much time to speak with the person. I told him to write down the details of his case. He said that he had complained to the police and that they would be able to confirm what he was telling me. I told him to write out the details for me and that I would see what I could do. He is now in London and is trying to find housing having been intimidated out of Belfast. To prove my bona fides in this matter, as soon as I receive that letter I shall take a copy of it and send it to the noble Lord who is to reply to the debate. That is where my bona fides stand in the case.
The threat of violence can be one of the more important aspects of violence in Northern Ireland. The person who phoned me came from the Loyalist section of the community. Violence and threats of violence can be directed against people in that community as well. We have been told throughout the proceedings on the Bill that this is not a criminal
22
matter. That is why we have refused to implicate the Attorney-General. We have been told that all the aspects of the Bill will be taken within a civil context. One has only to think of libel actions. It is far more difficult to prove matters in a civil action than in a criminal case. That is why the inclusion of the words,
"or threats of violence"
would immeasurably strengthen the Bill. My intention in supporting the amendment today is to make life more difficult for the terrorists who have caused so much tragedy in Northern Ireland over the past 20 years.
Lord Prys-Davies: My Lords, I should like to support the amendment. Given the Government's response to earlier amendments moved at Report Stage, we fear that, notwithstanding the powerful pleas of the noble Lords, Lord Fitt and Lord Blease, and the noble Viscount, Lord Brookeborough, they are underestimating the risk and danger of intimidation in Northern Ireland. This amendment, so ably moved by the noble Lord, Lord Monson, would extend the definitionof terrorism so as to include not merely violence for political ends but the threat of violence for political ends. It is often said that mental cruelty is as wounding as physical cruelty. It is the evidence of the noble Lords, Lord Fitt and Lord Blease, and the noble Viscount, Lord Brookeborough, that threats of violence can be as intimidating as violence itself.
When discussing the previous amendment the noble Lord, Lord Lyell, did not deal with the case advanced by my noble friend Lord Fitt, that the definition should include,
"or threats of violence".
I very much hope that he will see his way clear to accepting this sensible and reasonable amendment. We believe that it would strengthen the Bill considerably.
4 p.m.
Lord Lyell: My Lords, I think it is the wish of the House that we should deal with the three even-numbered amendments. Perhaps I may spell out what the Bill aims to tackle because some of the discussion on the two amendments with which we have been dealing this afternoon has ranged fairly wide, as did discussion on amendments at earlier stages of the Bill. We should remind ourselves that even at this stage the Bill aims to tackle the problems of expressions of support—no more, no less—by councillors for proscribed organisations and terrorism. All of that is a problem. However, I do not see that there is any evidence that there is a problem in Northern Ireland with councillors. They are not the people to whom we should be addressing our thoughts and our remarks; we should be addressing them solely to councillors who express support for intimidation generally.
I can certainly think of many cases where councillors have been reported as expressing support for a proscribed organisation or approval for a particular act or acts of terrorism. Quite apart from the fact that all such comments are utterly deplorable, they can themselves be intimidatory;

23
they can be of that nature. However, I have never seen any expression of support for, or approval of, intimidation in general —and that was the main thrust of the argument put forward by the noble Lord, Lord Fitt. Indeed, he mentioned that he had received a telephone call only today in this connection. I shall be interested to hear further about that; doubtless he will be in touch with me on the matter.
However, I should like to raise one particular issue with the noble Lord, Lord Fitt. We are discussing this afternoon the behaviour of councillors, and if the person who telephoned the noble Lord was a councillor, then we shall certainly take that fact on board. The behaviour of councillors is our main concern this afternoon, as indeed it was during the earlier stages of the proceedings on the Bill.
If there were to be such a thing as an expression of support for intimidation, then we are firmly of the belief that that would be caught by the provisions of the Bill. Most forms of intimidation for "political ends" rest on the threat of actual violence, just as the noble Lord, Lord Fitt, spelt out. Indeed, intimidation depends on violence; but intimidation works only if the threat is credible.
Do noble Lords really think, especially those who have experience of local government of the council chamber, let alone councillors in Northern Ireland—indeed, the noble Lord, Lord Fitt, will be able to give us his thoughts on the matter and will consider it further in any event—that any councillor would say, "I believe that intimidating people is a good thing, but of course I would not approve of using violence to back up that intimidatory threat."? We think that that situation is highly unlikely.
If a councillor were to make such a remark no one would believe him, because any person who advocates the use of force in any way for "political ends" breaches his declaration. That is what we are discussing by means of this amendment; that is what we are dealing with in this particular clause. For those two strong reasons I remain to be satisfied with the arguments and the points put forward by noble Lords who have spoken in support of the amendments. Indeed, I am not convinced that they are sufficient to justify the inclusion of those words in the Bill.
It certainly is not clear to us that the amendments to omit the definition would achieve what the noble Lords, Lord Prys-Davies, Lord Monson, Lord Blease and Lord Fitt desire. We think that Amendments Nos. 2, 4 and 6—the even amendments, if I may so call them—which seek to modify the declaration are unnecessary. We believe that they will cause more difficulty in what is a fairly simple arena; namely, the behaviour of councillors. We must concentrate our thoughts on that aspect all the time. It is for those three reasons that I am afraid I cannot commend Amendments Nos. 2, 4 and 6 to your Lordships.
Lord Monson: My Lords, in supporting this amendment so powerfully the noble Lord, Lord Fitt, pointed out that none of the all-party amendments are in the slightest degree frivolous; indeed, they are
24
not. A great many generally constructive non-party amendments have been moved during the various stages of the proceedings on the Bill and every one of them has been rejected by the Government. In consequence, I am afraid that many people who know Northern Ireland far better than I are convinced that the Bill is no more than public relations window dressing. If that is the case, then a great many people in both Houses have been wasting their time. Moreover, any frivolity there may be will not be a characteristic of the supporters of this and the other amendments.
The noble Lord, Lord Lyell, said that he has never come across support for intimidation as such; yet other noble Lords who live in Northern Ireland have. Amendments such as those which I propose by way of Amendments Nos. 2, 4 and 6 can do no possible harm; indeed, they can only strengthen the Bill. I see no reason at all for their rejection. I am afraid to say that the Minister is hair splitting and I must, therefore, insist upon the amendment.
4.5 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 109.

DIVISION NO. 2

CONTENTS

Addington, L.

John-Mackie, L.

Airey of Abingdon, B.

Leatherland, L.

Amherst, E.

Lloyd of Kilgerran, L.

Attlee, E.

Lockwood, B.

Birk, B.

Longford, E.

Blease, L.

Lovell-Davis, L.

Bonham-Carter, L.

McIntosh of Haringey, L.

Boston of Faversham, L.

McNair, L.

Briginshaw, L.

Mason of Barnsley, L.

Brookeborough, V.

Mishcon, L.

Bruce of Donington, L.

Molloy, L.

Buckmaster, V.

Monson, L. [Teller.]

Carmichael of Kelvingrove, L.

Mulley, L.

Murray of Epping Forest, L.

Cledwyn of Penrhos, L.

Nicol, B.

Davies of Penrhys, L.

Peston, L.

De Freyne, L.

Ponsonby of Shulbrede, L.

Dean of Beswick, L.

Porritt, L.

Dormand of Easington, L.

Prys-Davies, L.

Dunleath, L.

Rochester, L.

Ellenborough, L.

Romney, E.

Elwyn-Jones, L.

Sainsbury, L.

Ennals, L.

Saltoun of Abernethy, Ly.

Ewart-Biggs, B.

Seear, B.

Falkender, B.

Seebohm, L.

Falkland, V.

Serota, B.

Fitt, L.

Shackleton, L.

Gallacher, L.

Stallard, L.

Galpern, L.

Stedman, B.

Gladwyn, L.

Stewart of Fulham, L.

Graham of Edmonton, L. [Teller.]

Stoddart of Swindon, L.

Strabolgi, L.

Grey, E.

Taylor of Blackburn, L.

Halsbury, E.

Taylor of Mansfield, L.

Hanworth, V.

Todd, L.

Harris of Greenwich, L.

Tordoff, L.

Hatch of Lusby, L.

Turner of Camden, B.

Hirsfield, L.

Underhill, L.

Hylton-Foster, B.

Wallace of Coslany, L.

Ilchester, E.

White, B.

Jay, L.

Wigoder, L.

Jeger, B.

Williams of Elvel, L.

Jenkins of Hillhead, L

25

NOT-CONTENTS

Alexander of Weedon, L.

Lyell, L.

Allenby of Megiddo, V.

McAlpine of Moffat, L.

Allerton, L.

McAlpine of West Green, L.

Annan, L.

McFadzean, L.

Arran, E.

Mackay of Clashfern, L.

Barber, L.

Macleod of Borve, B.

Belhaven and Stenton, L.

Mancroft, L.

Beloff, L.

Manton, L.

Belstead, L.

Marley, L.

Bessborough, E.

Maude of Stratford-upon-Avon, L.

Birdwood, L.

Borthwick, L.

Merrivale, L.

Boyd-Carpenter, L.

Morris, L.

Brabazon of Tara, L.

Mostyn, L.

Butterworth, L.

Mowbray and Stourton, L.

Caccia, L.

Munster, E.

Caithness, E.

Nelson, E.

Campbell of Alloway, L.

Newall, L.

Campbell of Croy, L.

Norfolk, D.

Carnegy of Lour, B.

Norrie, L.

Carnock, L.

Nugent of Guildford, L.

Carr of Hadley, L.

Onslow, E.

Chelwood, L.

Oppenheim-Barnes, B.

Cockfield, L.

Orkney, E.

Colnbrook, L.

Orr-Ewing, L.

Colwyn, L.

Oxfuird, V.

Constantine of Stanmore, L.

Peyton of Yeovil, L.

Cottesloe, L.

Platt of Writtle, B.

Croft, L.

Portland, D.

Cross, V.

Quinton, L.

Cullen of Ashbourne, L.

Rankeillour, L.

Davidson, V. [Teller.]

Redesdale, L.

Denham, L.

Rodney, L.

Derwent, L.

St. Davids, V.

Dilhorne, V.

Sanderson of Bowden, L.

Dundee, E.

Selkirk, E.

Eden of Winton, L.

Sempill, Ly.

Effingham, E.

Shannon, E.

Elibank, L.

Skelmersdale, L.

Ferrers, E.

Slim, V.

Fraser of Kilmorack, L.

Strathclyde, L.

Gibson-Watt, L.

Strathspey, L.

Gridley, L.

Swansea, L.

Hemphill, L.

Swinton, E.

Henley, L.

Teviot, L.

Hesketh, L.

Thomas of Gwydir, L.

Hives, L.

Thomas of Swynnerton, L.

Hooper, B.

Thorneycroft, L.

Jessel, L.

Trafford, L.

Johnston of Rockport, L.

Trefgarne, L.

Kaberry of Adel, L.

Trumpington, B.

Kimball, L.

Vaux of Harrowden, L.

Kinnaird, L.

Wolfson, L.

Lauderdale, E.

Wynford, L.

Long, V. [Teller.]

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendments Nos. 3 to 6 not moved.]
4.14 p.m.
Lord Lyell: My Lords, I beg to move that the Bill do now pass.
I pay tribute to those of your Lordships who have attended throughout the afternoons and some long evenings during the earlier stages of the Bill and this afternoon. We have had a series of excellent debates and a number of points have been made. While it has not always been possible for the Government to reach agreement with the noble Lords, Lord Prys-Davies, Lord Harris of Greenwich, Lord Fitt, Lord Blease and Lord Monson, and my noble friend Lord Brookeborough, the Bill has been given full and careful consideration by your Lordships.
26
The people of Northern Ireland, above all those who by various means follow the deliberations in your Lordships' House, will be grateful for the full and careful consideration that the Bill has received in principle and in detail. First, I am grateful for your Lordships' endorsement of the provisions in the Bill which amend the district council franchise. That is provided for in Clauses 1 and 2 and Schedule 1. Those changes have often been eclipsed by the more controversial declaration against terrorism. They are of vital importance to the people who will be enfranchised at the district council elections on 17th May this year.
The electoral register, which was published on 15th February this year, reveals that 11,000 such persons are enfranchised. That is an increase of about 500 over the number to which I referred on Second Reading.
Secondly, I am pleased to record your Lordships' endorsement of the law on disqualification following a criminal conviction, as provided in Clause 9. Both those changes will make the law much more equitable as between those sentenced to long and short prison terms.
The heart of the Bill, and the focus of our debates throughout all stages of the Bill, has been the declaration against terrorism. The Government's decision to propose that declaration was not taken lightly or frivolously. It followed long and careful consideration with all who are closely involved with local government in Northern Ireland. That consultation began in the autumn of 1985. Four options came to light following a series of discussions. We set them out in a consultation paper which we published in October 1987.
One option was to proscribe Sinn Fein and other similar organisations. That option remains under review. A second option was to require an oath of allegiance; and that we rejected. The two other options—the declaration and the changes to the law on council disqualification—have been incorporated into the Bill.
In the light of the consultation we came to the conclusion that the law should require a declaration against terrorism from candidates for council or Assembly office. The principal underlying the declaration has rightly met with your Lordships' unanimous approval. There is no doubt that open support for acts of terrorism or organisations concerned in promoting terrorism is incompatible with participation in the democratic process, councils and the Assembly. The declaration has the general support of your Lordships' House. Thanks to the lengthy consultation that we held throughout the Province with those most closely concerned with local councils in Northern Ireland, the proposals have their approval. Enforcement can never be completely free from difficulty. As has been said, the issue is not an easy one; but we believe that the Bill gets matters right.
Finally, I wish to remind your Lordships of the objectives of the declaration. They are not to prevent anyone from standing for election, nor are they to prevent all expressions of support for or approval of terrorism in all circumstances by all persons. No.

27
The Bill and the declaration which we have been discussing at length aim to provide responsible councillors and electors with recourse against expressions by elected councillors which will cause offence and disrupt local government.
The Bill is drawn up to achieve that objective and no other. It is the theme that has been woven into all my remarks throughout the passage of the Bill, from 9th February until today. If the declaration and what we believe are the powerful measures in the Bill serve to make councillors moderate the language which they use, then we believe that it will have achieved something to further the cause of peace and stability in Northern Ireland.
We feel that the declaration against terrorism will be important for the future stability of the district councils. I hope that your Lordships will feel able to approve the Bill that we have gone through with such difficulty, in the expectation that whatever the reservations which exist in the House, it will make a constructive contribution to political life in Northern Ireland. I beg to move.
Moved, That the Bill do now pass.—(Lord Lyell.)
4.21 p.m.
Lord Prys-Davies: My Lords, for the reasons which the noble Lord, Lord Lyell, has given, we on these Benches gladly support the central objective of the Bill. Councillors who intentionally or wilfully express their support for terrorism should be stripped of elected office. We fully support that principle.
However, as those noble Lords who were present in the House during the Report stage and are here today will know, a number of aspects of the Bill are worrying. We fear that there are substantial flaws in it and that in the end it may not work as well as is hoped for by the Government. We fear that the declaration against terrorism which has been built into a central position in the Bill may yet turn out to be empty rhetoric. Therefore we very much regret that we have been unable to improve it during its passage through your Lordships' House.
How successful the Bill will be remains to be seen. If time shows that it is workable, we on these Benches will gladly and readily acknowledge that we were mistaken in our judgment. Meanwhile, notwithstanding our reservations, we hope that the Bill will make a contribution to the wellbeing of the Province.
Lord Fitt: My Lords, in any interventions that I have made in relation to the Bill it has been my intention to strengthen its provisions. However, it is with a good deal of regret that I say that the Bill is leaving the House grievously flawed because of Clause 7. Your Lordships will recall that during the debate on that clause, Members on this side of the House and indeed some noble Lords from the Cross-Benches and on the Government side attempted to include the name of the Attorney-General as one of those persons who could initiate proceedings against anyone who had breached the declaration. The Government fiercely resisted the
28
inclusion of the Attorney-General's name, both in this House and in another place. When the vote in this house eventually came, we were only beaten by 15 votes. I think that was a very sad vote for the people who wish to see the Bill made effective in Northern Ireland.
I have listened to the Minister over the past few days and have thought about what he said. He suggested in the House today that the Bill was originally thought of in the autumn of 1985. That was a crucial year and a crucial part of the year. It was in the autumn of 1985 that the Anglo-Irish Agreement was promulgated. On reading the debates that took place in both Houses, it became clear to me that at least one of the political parties in Northern Ireland—and it was not the Unionist Party, it was the SDLP—was making strenuous objections to the inclusion of the Attorney-General. If it was making those objections, it must have had the support of the Irish Government because by that time and since then we have had discussions between two Governments. Being Irish and knowing the sentiments that prevail in Ireland, I for one have absolutely no doubt in my mind that representations were made by both the SDLP and the Irish Government objecting to the inclusion of the Attorney-General's name in Clause 7.
If that is true—and I honestly believe that it is—it will do great harm to the Anglo-Irish Agreement, the Unionist community in Northern Ireland and the people who want to see effective steps being taken against terrorism. I only wish that we had had an extra 15 people in your Lordship's House when the vote was taken on Clause 7 because it was quite obvious that support was not restricted to one political party. The Cross-Benches and Conservative supporters on the other side of the House, particularly those from Northern Ireland who live with the consequences of terrorism, believed that it was necessary to include the name of the Attorney-General. If, as I suspect, it was taken out at the behest of one political party in Northern Ireland and the Irish Government, during the discussions at Maryfield, through the Anglo-Irish Secretariat, I believe that will be injurious to the whole process of bringing an effective end to terrorism in Northern Ireland
Lord Harris of Greenwich: My Lords, we have had a useful experience in regard to this series of debates. For the first time for a very long period indeed we have had the opportunity of discussing in detail a Northern Ireland Bill rather than just a succession of orders. I very much regret that in that situation the Government were as determined as they were to ensure that not a sigle amendment was accepted, despite the strong all-party support for a series of proposals which would, in our judgment, have made this a more effective piece of legislation.
Certainly the Bill has a sensible objective: to deter elected members of district councils or the Assembly from making statements in support either of terrorist organisations or acts of terrorism. That is supported by all men of reason and good will, wherever they may sit. The central question is: will the Bill ever work? I am bound to say that rather like the noble

29
Lord, Lord Prys-Davies, who spoke a few moments ago, I am sceptical as to whether it will work. On one occasion we had the opportunity to make it more likely that the Bill would work. That was when an amendment was proposed to add the Attorney-General to the list of people who could make an application to the courts. This was supported by all the Northern Ireland Peers in the House.
On the first occasion during the debate in Committee, there was very strong support for the proposal. Following the debate, we had a meeting with the noble Lord, Lord Lyell, and his colleague, Mr. Needham. I was hopeful at the end of that meeting that we might be able to agree to some form of compromise, but for various reasons that proved impossible. Despite that, I very much hope that this Bill will prove to be as successful as the Government think it will be. However, I regret the Government's persistent refusal to accept the views of Peers from Northern Ireland who have spoken from all parts of the House, on a matter of this kind. Their knowledge and experience is, with respect, greater than that of Ministers in the Northern Ireland Office. I hope that the Bill will work. It will be a very damaging business indeed if it proves to be ineffectual; that would be a major victory for the terrorist organisations in Northern Ireland.
4.31 p.m.
Lord Blease: My Lords, I hope that it is not presumptuous of me to rise, as a citizen of Northern Ireland, to thank noble Lords from all sides of the House who have taken an active interest in this Bill. Together with other noble Lords, I have tried to amend and approve the proposed measures, with a view to making the legislation practical and realistic in order to achieve the political objectives that the Government proclaim that the Bill is intended to have.
As other noble Lords have said, we are utterly disappointed. We have been anxious to ensure that this Bill does not leave Northern Ireland local government and the community in Northern Ireland in a worse situation than at present.
We have reached the final parliamentary stages of this Bill. The reasoned arguments of noble Lords from all sides of the House have failed to shift the Government from what is considered to be seriously flawed legislation, not only by Members of this House but by Members in another place and by many in Northern Ireland, despite the consultations that the Minister has spoken about. People may have been using doublespeak and saying one thing to the Government, while the Government have been trying to lead them along a slippery path. Members who reside in Northern Ireland have been getting different reactions; otherwise we should not be operating as we have been here today.
It is inevitable that the intractable nature of Northern Ireland issues does not make for easy or academic parliamentary debate. There is little or no political kudos to be obtained from directly challenging the real political issues and the evils of terrorism in either part of the Westminster Parliament. However, I am pleased to say that the
30
Northern Ireland problems have been debated in this House without any attempt to score party political or personal debating points.
In parliamentary constitutional terms, and in terms of unnecessary human suffering, we cannot ignore the fact that any efforts to resolve the Northern Ireland political issues are manifestly complex and dangerous. Irrespective of whatever measures are put forward from time to time, there can be no doubt in anyone's mind that we are treading very dangerous ground. I am concerned that we have been treading very dangerous ground in this local government election Bill.
However, I and, I am sure, other noble Lords wish the Government well in the implementation of the intentions of this Bill. We will do all that we can to make the measures succeed in the interests of local government democracy and the wellbeing of the community in Northern Ireland. I should be pleased if I could come back in 12 months' time and acknowledge that I was wrong and that the Government were right with regard to this Bill.
Viscount Brookeborough: My Lords, I should like to say that I support the intentions of this Bill, as I am sure does everyone in your Lordships' House. However, should this Bill fail, I hope that the next time when a measure such as this is raised, a little more consideration can be given to the views of those of us who live in Northern Ireland. Clearly, the Government, will find it fairly easy to defeat amendments on a Division, by virtue of the party system and the numbers going through the Division lobbies. However, many noble Lords who go through the Division lobbies do not fully understand what happens in Northern Ireland. Sadly, the situation is not as it is in the rest of the United Kingdom. When the Northern Ireland Peers are unanimous in not trying to defeat the Government but in trying to improve legislation to help the fight against terrorism, I think that the Government should sit down and consider their views at some length.
Finally, I should like to say that I support the Bill and sincerely hope that it does the job which it is intended that it should do.
4.36 p.m.
Lord Lyell: My Lords, I should like to thank all noble Lords who have spoken on this matter for their good wishes and support for the intentions of this Bill and for the close attention that they have given to the Bill.
I should like to return to one or two theme subjects that have been with us since Second Reading, continuing until this afternoon. The noble Lord, Lord Prys-Davies, quite rightly pointed out that we were not able to agree on every point. The noble Lord has used his Celtic tongue throughout the passage of this Bill, as on every occasion when we discuss Northern Ireland affairs. We are particularly grateful for the lucidity with which he has produced his views and for his hope that the Bill will achieve its intentions.
The noble Lord, Lord Fitt, mentioned the autumn of 1985. That was the season when the Government

31
started taking consultations on the behaviour of councillors and the declaration in the Bill. I believe that for all of your Lordships who lived in Northern Ireland, the autumn of 1985 was famous for one other reason. The noble Lord, Lord Fitt, nods, but it is not necessarily what he was thinking of. It was quite the worst weather in the 20th century and, as the Minister responsible for agriculture, I spent most of my time looking at flattened crops and flooded potato farms and the like. Therefore I, too, can remember the autumn of 1985, for all sorts of reasons.
However, I think that the noble Lord, Lord Fitt, is giving us the benefit of his considerable imagination if he believes that this Bill has anything to do with the Anglo-Irish Agreement which was signed in November 1985. We believe that this Bill and the measures that we are attempting to achieve stand firmly on their own merits. We take considerable pride in the depth of consultation that has taken place continually over three and a half years. We have brought out our consultation paper. We believe that that consultation paper has provided a firm basis for the Bill. I thank the noble Lord, Lord Harris, for the way in which he spoke and presented his amendments and for his good wishes for the Bill.
The noble Lord, Lord Blease, pointed out quite rightly that we are treading on dangerous ground. I am sure that the noble Lord and other Members of your Lordships' House who have read the Official Report of the Assembly and are aware of what used to go on there will know that that too could often be dangerous ground. Much of what was said there makes your Lordships' House appear comparatively mild.
I was glad that my noble friend Lord Brookeborough supported the intention behind the Bill. I hope that my noble friend will accept that the intention, as I have stressed, is to ensure that there is a declaration to be signed by those who wish to stand for office in either the Assembly or a local council. When they stand for office or are elected they will know that they have signed a declaration and that if they breach that declaration they will be removed from the council or the Assembly. That is what is behind the declaration that we have discussed.
I hope that my noble friend and everyone in Northern Ireland will accept that that is the main objective of this Bill. I ask my noble friend to accept that we have consulted widely—even in County Fermanagh. We have taken views and advice from all round Northern Ireland.
I should like to thank everyone who has spoken throughout the stages of the Bill for their good wishes for the measure, which we believe will go no small way to ensuring that one or two major blots on democracy in Northern Ireland will be removed. For example, we believe that the declaration is very important. We have enfranchised over 11,000 people who would otherwise not be eligible to vote and who, as a result of the Bill before your Lordships this afternoon, will be able to vote in the local elections on 17th May. I commend the Bill to the House.
On Question, Bill passed.

Compliance with Public Procurement Directives: ECC Report
4.42 p.m.
Lord Oliver of Aylmerton Lord Oliver of Aylmerton rose to move, That this House takes note of the Report of the European Communities Committee on Compliance with Public Procurement Directives (12th Report, 1987–88, HL Paper 72).
The noble and learned Lord said: My Lords, in introducing to your Lordships the Report of the European Communities Committee on Compliance with Public Procurement Directives I should like to begin by thanking the Members of Sub-Committee E and in particular its then chairman, my noble and learned friend Lord Goff of Chieveley, and the witnesses who gave evidence on which the report is based.
It may be helpful if I say a word or two about the background to the report, its importance and the purpose of the directive which is the subject matter of the report. Noble Lords will be aware that since 1971 there have been a number of directives of the European Commission regulating the procedures for tendering for and awarding public authority contracts for supplies of goods and works. That is an existing system. I stress that point because some of the evidence given to Sub-Committee E before the report was produced seemed to indicate that there was at least a hint that some of the provisions of the public procurement directives are not entirely related to the realities of public authority contracting. I emphasise that that was not a matter which the Sub-Committee was required to look into, and the report is directed solely to the compliance directive.
The importance of the subject needs no stressing. Public authority contracting accounts for something of the order of 15 per cent. of gross domestic product across the Community, which amounts to approximately £260 billion. It is an area which is becoming more important because the present directives do not relate to contracting for water, energy, electricity and telecommunications projects. Directives are coming out which will include those areas within the scope of the public procurement directives. It is therefore an area of increasing importance.
The evidence before us established that there was a fairly widespread failure to comply with the rules of the directives. The object of the present directive, which is the subject matter of the report, was to secure compliance in two ways: first, by requiring member states to introduce measures into their national laws which would provide a framework for enforcement nationally; and, secondly, by conferring policing powers on the Commission. Procedures at present are somewhat inadequate and there is an inadequate audit procedure which is operated by the Commission.
The areas of concern which were identified by the Committee were four-fold. First, there was a requirement in the directive as originally drawn that measures should be introduced to enable either courts or administrative tribunals to set aside contracts which were concluded in defiance of

33
Community rules. That is obviously a matter of considerable importance because it is very undesirable that contracts should be set aside against possibly quite innocent contracting parties. I am glad to say that, I believe as a result of the report, the requirement has now been amended. It has now been made clear in the directive as it presently stands that it does not require interference with existing contracts.
The second matter which caused us some concern was the provision for the Commission to intervene in national proceedings on its own motion. We thought that that was undesirable and that the Commission should not intervene except on the invitation of the national court or by leave of the national court. The directive has now been amended—again, I think that that may be as a result of the report—to indicate, in somewhat delphic terms, that there will be no compulsory intervention by the Commission without the leave of a national court.
Thirdly, we were very concerned by the provision which was inserted—and to some extent still stands in the directive in its present form—that the Commission should have a right of its own motion to suspend procedures for tendering. There were a number of objections to that proposal. First and foremost, no clear grounds were specified on which the Commission was to exercise that power. More fundamentally, we did not think—and we adhere to that view to this day—that there was any authority in the treaty base which was suggested—namely Article 100A—for that very extensive power. That objection has been voiced very firmly in the report. In paragraph 66 the proposal is categorised as being inappropriate and highly undesirable.
I understand that those objections have been sought to be met by specifying certain grounds upon which the Commission can intervene. However, the objection on the grounds of vires remains. I believe that that view accords with the view of Her Majesty's Government. Certainly it is the view of the Committee that no proper basis is suggested for such an extensive power.
Fourthly, we were concerned about the remedies which were proposed. Originally there was a suggestion that the national courts ought to provide for damages for loss of opportunity. That was a matter which we discussed at some length. We were not unanimous on the issue. The proposed directive has now been amended so that there is no longer a requirement for damages for loss of opportunity to be awarded. There are obvious difficulties about that. I know that the noble Lord, Lord Broxbourne, entertains some views on the matter which he would have wanted to put forward in this debate had he not unfortunately been indisposed. But we came to the conclusion finally that to include a provision for damages for loss of opportunity would open so many doors to litigation that it was undesirable to have such a power. Clearly, it would involve weighing the most difficult considerations to decide whether the unsuccessful tenderer would have won the contract. It would probably involve the revelation of costings both by him and possibly the successsful tenderer. We concluded ultimately that any damages should
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be restricted merely to the costs thrown away in tendering.
Finally, I should perhaps draw attention to the questions that are raised by the report and the directive. First, should the Commission have power to suspend and, if so, what is its treaty base? Secondly, is the power to intervene in domestic proceedings sufficiently circumscribed in the direction as it is now drawn? Thirdly, member states are required to provide administrative or judicial remedies; should the United Kingdom provide remedies administratively or through the courts? The committee's view in paragraph 61 was that the courts were the appropriate arm through which enforcement proceedings should be conducted. Fourthly, should there be criminal or quasi-criminal penalties by way of fines as an alternative?
The committee thought not. Fifthly, should damages include loss of profits? Again, the committee thought not. I should record that the latest view of the CBI is that damages should in any event be merely a back up for an effective audit procedure. However, we were told that the Commission was considering the introduction of automatic and regular audit inspections. If damages are to be provided, there being ex hypothesi no subsisting contractual nexus between a tenderer and the public authority, it will involve the necessity for primary legislation.
I understand that the discussions of the Commission's drafting council are only now beginning so these questions remain very much unanswered. I hope that the committee's report will be of assistance to Her Majesty's Government in such discussions, as no doubt will be views expressed by noble Lords in this debate. I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on Compliance with Public Procurement Directives (12th Report, 1987–88, HL Paper 72).—(Lord Oliver of Aylmerton.)
4.52 p.m.
Viscount Dilhorne: My Lords, it is a considerable honour for a young barrister—although perhaps not so young in years—to follow the distinguished maiden speech of the noble and learned Lord, Lord Oliver of Aylmerton, on a subject that is far from straightforward and is, indeed, complex. His maiden speech has perhaps been a little shy in making its appearance and I hope that it will not be long before we have great pleasure in hearing his contributions to future debates in this House.
Sadly, as we know, the late Lord Silkin of Dulwich cannot be with us today; but he made a valuable contribution to the sub-committee's deliberations. Perhaps I could add to what the noble and learned Lord said about the noble Lord, Lord Broxbourne. It is regrettable that he cannot be with us today. He made a witty and informal contribution to the sub-committee's deliberations, particularly with apposite Latin quotations. The noble and learned Lord, Lord Oliver, also referred to the noble and learned Lord, Lord Goff of Chieveley, under whose chairmanship the report that we are debating today was produced.

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I also had the honour of serving on Sub-Committee E under the chairmanship of the noble and learned Lord, Lord Goff. Those of us on the Sub-Committee who began the inquiry with a somewhat limited knowledge of the Community's rules on tendering by government departments, local authorities and public bodies, such as regional hospital boards, soon came to realise that those rules have great importance in the creation of the single European market. I learned a little after one hour spent talking to the European Business Institute. I talked at sufficient length to limit the amount of time that I was given to answer questions and for that I was greatly relieved.
The objective of the rules is very simple—to provide the exporter with the ability and initiative to tender for the provision of goods or works such as the construction of schools, hospitals and processing plants, and of municipal waste or public waterworks, with an assurance that his tender will be fairly considered and will be entitled to succeed if it is economically the most advantageous. Those are important words. I do not believe that that necessarily means that it must be the lowest tender. The Commission's ideas for policing those rules more effectively therefore called for careful and sympathetic consideration. The evidence given to us was that there was at present a limited amount of cross-border tendering by Community enterprises. There was considerable scope for increasing that to the general economic advantage of the developing single market.
However, those of us on the Committee with experience of public tendering—I do not include myself in this category, although I have learned a little about the matter—had considerable doubts about whether the Commission was setting about things in the right way in its proposals. There was considerable anxiety that one effect of the compliance directive, if it had been adopted in the form first proposed, would have been to invalidate contracts already concluded by public authorities. That would clearly have caused considerable confusion and potential damage to contractors who might already be under way with building works on the basis of a contract won without any irregularity on their part. I very much welcome the fact that the Commission clarified that point in its revised proposals so that it is clear that a violation of the procedural rules or even the rules against national discrimination cannot lead, at the instance of a disappointed contractor, to contracts already concluded being re-opened.
The Commission also proposed that it should be given in the compliance directive the power to suspend procurement proceedings for a period of up to three months. Our courts now have the power, by means of an injunction, to order a public authority to suspend tendering proceedings or to admit a new tenderer if there has been some clear illegality. But to give such a power to the European Commission seems to the Committee to be a startling proposition. Moreover, it did not seem to us that Article 100A of the Treaty of Rome gave adequate legal power for the Commission to be invested with that new and
36
draconian power. The evidence given to us was that the power would be potentially extremely disruptive. In many cases, tendering procedures may be intended to lead to some urgently needed works being undertaken or urgently needed supplies being obtained.
The noble Baroness, Lady Robson, whose experience of hospital procurement was most valuable to the Committee, stressed that many of the contracts for which hospital boards tendered would relate to medical equipment or building work which could not wait without serious detriment to patients while arguments proceeded between the Commission and the hospital authority as to the procedures that had been followed and whether there had been the necessary advertisement in the Official Journal.
The Committee welcomes the fact that the new proposals substantially limit the power of the Commission to suspend, but it still believes that the power should be excluded altogether from this directive.
The most important element of the compliance directive is the requirement that member states must ensure that a disappointed tenderer, or a tenderer unfairly excluded from the competition for a contract, has an effective remedy. It is believed that this will encourage him to go to court. It is inevitable that a disappointed contractor—even if he has proof of failure on the part of the procuring authority to comply with the rules ensuring fair competition among tenderers—will be reluctant to go to court. To use the expression that came up many times during this inquiry, he will not want to bite the hand that feeds him. He will often prefer to restrain himself in the hope of further favours from the procuring authority. The directive therefore envisages that he should be given an effective remedy under all the national laws of the Community countries—and by "effective remedy" is meant a right to damages.
The Committee agreed that this was right. In this country it might well require primary legislation. There is considerable uncertainty as to whether someone injured by a breach of Community rules has a direct right of action, with a right to damages, for loss that he may have suffered in consequence of a breach of Community rules.
We believe that, if tenderers are to police the Community rules through national courts instead of leaving it to the Commission to take up breaches with governments, they must be given a clear right to damages. The actual damages should be limited to the tender costs, as the noble and learned Lord, Lord Oliver of Aylmerton, has already said. These can be very large in the case of large-scale public contracts such as we talked of, and would have to be added to the legal costs actually incurred. We believe that to award damages for lost profits or lost opportunities would lead to much speculative litigation.
I have nothing more to say except that the matter to which I have just referred—as did the noble and learned Lord, Lord Oliver of Aylmerton—was dear to the heart of the noble Lord, Lord Broxborne. As

37
I have said, we are very sorry that he is unable to be with us today.
5.2 p.m.
Lord Williams of Elvel: My Lords, it is always a great pleasure for your Lordships to hear a maiden speech from a Law Lord. It is a particular pleasure that the noble and learned Lord, Lord Oliver of Aylmerton, has chosen his maiden appearance in your Lordships' House to introduce a report with which he is associated and for which his noble and learned friend Lord Goff of Chieveley, as chairman of the committee that produced it, was responsible.
We have looked carefully at the report of the Committee. We have looked carefully at the directive as redrafted. In our opinion this is one of the least happy draft directives that the Community has produced. Having said that, I shall go into one or two points of detail.
I note that the report in front of your Lordships was printed on 9th April 1988. It is now March 1989. I am sad that we have waited a year before debating what is an important document. I also note—and this is no doubt due to the usual procedure—that the directive in draft was considered by Sub-Committee E, which deals with law and institutions, rather than one of the commercial sub-committees. I have no bias against lawyers. I am sure that the noble and learned Lord, and indeed the noble Viscount, Lord Dilhorne, will accept that. However, we are dealing with a subject which accounts for between 10 and 20 per cent. of the gross domestic product of the European Economic Community. That is a substantial commercial interest. Therefore, if noble Lords will allow me, I wish to concentrate on one or two of the commercial points involved in the compliance directive. Some of the points have been brought up by the noble and learned Lord in his speech, and indeed by the noble Viscount who has just spoken.
First, it is perfectly clear that we need a proper enforcement of existing EC rules on public procurement. I do not believe that anybody in your Lordships' House doubts that. I do not suppose that anybody doubts that to date the mechanism of public procurement has been used to national advantage, and quite properly. It was always the case that public expenditure should be used to promote the national interest in promoting national industries. This has always been the case in the United Kingdom. It has been even more so with some of our Continental partners in the Community. Our worry is that the United Kingdom will adopt an open approach to public procurement but that some of our partners in the Community will be somewhat less open in their approach, and that we shall therefore be disadvantaged in terms of industrial, national interest.
Secondly, I am deeply suspicious of the mechanism of enforcement through administrative tribunals. I do not believe that this mechanism can be accommodated within our commercial legal system here. We shall therefore have to rely on our courts.
Thirdly, we have to try to arrive at a definition of the most economically advantageous tender, because herein lies the major problem. We are all in favour
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of somebody enforcing the doctrine that the most economically advantageous tender should be accepted. However, the difficulty is to define it.
Let me therefore start from the commercial reality of the way in which these systems operate. A purchasing authority in whatever country will first evaluate prospective tenderers. In my experience, no purchasing authority—and as a banker I have arranged financing for a number of major products for public procurement—simply publishes in some journal or another that there will be a tender procedure for a contract and expects everybody who is suitable to apply. The publishing authorities go through lists of prospective tenderers. They look at their technical capability. They look at their ability to provide spare parts. They look at their ability to stay in business over the period of the construction of the project. They look at their ability to speak the right languages, to get on with the right people and to know the right laws. As a result of this process, they will establish a list of companies who look like likely tenderers. Prequalification therefore occurs.
How does one get on this list? This is the first problem. How does a United Kingdom business get on the list of a French or German public procurement agency? The answer is by spending money and by investing in the business of persuading, say, the city of Bremen—which I notice was mentioned in the report—that such and such a UK firm is capable, has the right technical expertise, can provide the right product at the right price at the right time, and will remain in business. Such persuasion requires a very considerable investment. Therefore the idea of open tender—that simply by publishing in the Official Journals of the Community one can ensure that there is some equitable tendering arrangements—seems nothing less than nonsense.
The cost disadvantage to a UK firm that is trying to establish itself as a tenderer in Germany or France, and vice versa, can be quite severe. In the first place, there are the costs of setting up an office. There are the costs of making the appropriate arrangements to ensure that those who are listening to what is said understand it. Then there is the problem of overhead allocation. Those of us who have had any experience in accounting know that overhead allocation is an extremely difficult problem in tendering in deciding what proportion of general overheads should be put on to a particular tender. It is clear that the national company will have an advantage. If a company located in Birmingham has its major overheads in Birmingham and wishes to tender for a contract in Munich, its direct costs will be substantially higher than a Munich company and probably its allocation of overheads, accountants being what they are, will be higher.
Surprise, surprise; what generally happens is that, in spite of there being a rule that public procurement authorities should accept the most economically advantageous tender, the most economically advantageous tender turns out to be from a national company. It is extremely difficult to knock that argument down. That seems to be the central problem.

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I do not believe that the draft directive has addressed itself seriously to this problem. I have no comment to make on the legal base of the draft directive. The noble and learned Lord has commented on that and the committee has expressed an opinion. It seems sensible, but not being a lawyer or a constitutional expert, I have no comment.
The noble Viscount was quite clear on Commission intervention. I wholly support the idea that the Commission simply cannot barge in and override the decisions of national courts. The Commission should have a right to be heard. That is only fair, but to try to overturn any decision of the national courts, apart from the vires question which the noble and learned Lord mentioned, seems to me to be quite outrageous. I hope that the Government will not accept that.
On the suspension of contract award procedures, both the noble and learned Lord, Lord Oliver, and the noble Viscount, Lord Dilhorne, have said before me what I would have said: it makes nonsense of any contract that after a contract has been signed, with all the expenditure and perhaps a year of negotiation and tender, to have somebody walk in and simply overturn the whole procedure of granting the contract, with consequent loss. I am certain that that procedure would result in a relative reluctance on the part of companies to go in for contracts of that nature.
There is a great deal of confusion. The noble and learned Lord said that the draft directive had been redrafted from its original content. I am still very doubtful about the meaning of paragraph (2) of Article 1 of the draft directive, from which I quote:
"The measures provided for in paragraph 1"—
that is, what member states are required to do—
"shall authorise the competent administrative body or court to take at the earliest opportunity precautionary measures, including decisions to suspend the procedure for the award of the public contract concerned, or the implementation of the decision taken by the contracting authority".
I understand from what the noble and learned Lord has said that this relates to some mechanism before the signature to the contract. I find it very difficult to derive that meaning from the language in the draft directive that I picked up from the Printed Paper Office. No doubt the noble Lord, Lord Brabazon, will be able to enlighten us on that.
Reading through the committee report and the directive, and looking as a commercial animal at the problem, it seems to me that the CBI has got it right, much as I am reluctant to admit that. I support the system of compliance that the CBI has put forward in its evidence and in a subsequent briefing. It seems to me that the right way is to strengthen the audit procedure and to allow the Commission to audit as and when appropriate. Actions for damages should be available as a last resort and should be post the award of contract and limited to tendering costs. That would ensure that the public procurement agencies pay attention to the various directives.
What we have before us seems to me to be a poor draft directive. I hope that the Government will listen to what the noble and learned Lord, Lord
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Oliver, has said, read carefully what the committee has said and pay attention to what the Opposition Front Bench has said.
5.15 p.m.
Lord Brabazon of Tara: My Lords, first, I should like to join other noble Lords in congratulating the noble and learned Lord, Lord Oliver of Aylmerton, on a very good maiden speech and to say that the Government are grateful to him, to his noble and learned colleagues on the Law and Institutions Sub-Committee and to the European Communities Committee for bringing to the attention of the House the important questions raised by the European Commission's proposal. I join other noble Lords in acknowledging the work of its chairman, the noble and learned Lord, Lord Goff of Chieveley.
The committee has produced a most valuable report which has become required reading for anybody with an interest in the Commission's proposal. Our officials have drawn it to the attention of their colleagues from other member states who took part in a preliminary discussion in Brussels last June.
We are also grateful to the noble and learned Lord, Lord Oliver of Aylmerton, to my noble friend Lord Dilhorne and the noble Lord, Lord Williams of Elvel, for their comments today on the Commission's proposal as it now stands, following amendment by the Commission in the light of the opinion of the European Parliament.
Before going further, let me say that the Government are at one with the committee that a substantially higher level of compliance with the procurement directive is needed. Our supplier and contractors believe that, given the chance, they can stand up to the strongest competition. Compliance is the means to ensure that they get that chance. I take the point of the noble Lord, Lord Williams, about needing to persuade others to comply. This serves to reinforce the need for a properly drafted directive.
Just as strongly, we believe with the committee that member states must take responsibility for enforcing compliance by contracting authorities. I shall be giving one or two examples of how this position leads us to have difficulties with certain of the committee's ideas. The committee commented that greater opening of public procurement markets may be expected to occur naturally. We agree. Other changes now in hand will make taxpayers demand that government take advantage of value for money, wherever it may be found.
Set against this background, the procurement directives can be seen as providing a framework of rules to help the process along. Their purpose is to ensure that public purchasers do not practise discrimination on grounds of nationality among firms in different member states. The directives must, as far as possible, avoid interfering with the development of commercial practices in public purchasing, which this Government have done so much to foster. Measures to enforce compliance must be judged in the same way. They must not threaten the honest purchaser in ways that involve costly delays.

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The Government have welcomed this debate because of the opportunity it has given to discuss a valuable report. When it was presented to the House last year, we expected the Commission to submit an amended proposal as soon as the European Parliament had delivered its opinion.
The noble Lord, Lord Williams of Elvel, spoke of delays in holding the debate, but the Committee did not submit its amended proposal until December, and discussions began in the Council machinery only last week. As the noble Lord, Lord Williams of Elvel, said, there is still much in the proposal that gives great difficulty, but these are still early days.
Noble Lords have made a large number of thoughtful and interesting contributions today, and the Government will bear all of them in mind as discussions continue in Brussels.
The Commission's amended proposal differs little in principle from the original. There remains a requirement for member states to ensure that there is an effective administrative or judicial system under which suppliers or contractors can seek prescribed remedies when there is a breach of national or Community procurement rules. The remedies to be available are still to include the possibility of interim measures, including the suspension of an award procedure or implementation of a decision taken by the contracting authority; or an order for the removal of a discriminatory specification on pain of penalty payments; or the setting aside of decisions taken unlawfully and the award of damages to the injured undertakings. The Commission has maintained its proposal for member states to ensure that it can intervene in national proceedings. And it remains the Commission's intention that it should have the power to suspend contract award procedures in certain circumstances, although these are now defined.
Noble Lords will be aware that the proposal relates to compliance with the supplies and works directives. These affect central and local government. There are currently discussions in Brussels on applying rules on procurement to the so-called excluded sectors; that is water, energy, transport and telecommunications. The proposal we are discussing today does not apply to these sectors, and we should not assume that it will be appropriate to apply the same compliance provisions to them.
The Committee concluded that the availability of remedies for aggrieved tenderers has a role to play in improving compliance but does not offer a complete solution. The Government agree that member states and the Commission also have a role. The Committee concluded that the proposed directive should open up a possibility of policing by claims for damages for disappointed tenderers, but not in such a way as to disrupt the procurement process unnecessarily or to impede public services. Again, the Government agree particularly with the implication that action by tenderers disadvantaged by a breach of the directives, and others similarly disadvantaged, should normally take place after the contract in question has been awarded. The Government believe that the possibility of an action for damages will be an effective deterrent to
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contracting authorities which are tempted to disregard their obligations under the directives. We recognise that in many member states, including the United Kingdom, there are possibilities already for aggrieved suppliers to seek interim measures. We can accept the principle that such possibilities should be available throughout the Community but not that they should be extended to become unduly disruptive or open to abuse.
Suppliers and contractors in the UK have welcomed the Commission's attempt to ensure a level playing field. They see benefit for themselves in getting an assurance that their tenders will be properly considered in all member states. However, they are concerned about the risk of disruption to tender procedures, leading to costs and delays which would undermine the investment they have made in their tenders. They therefore believe, in general, that actions against contracting authorities should take place after an award is made. They make actions to remove discriminatory specifications a possible exception.
There is concern about the absence of any provision for compensation of innocent third parties, and a wish to see as much certainty as possible that contracts, once awarded, will not be disturbed.
I am aware that the CBI has called for a mixed system of compliance, including an audit system as well as damages. Such a system could undoubtedly strengthen compliance and deserves to be considered. Especially, I suggest, for the commercial undertakings which are covered by the Commission's separate proposals for procurement rules in the so-called "excluded" sectors. So far as the present proposal is concerned, much depends on whether member states are willing to go forward fairly rapidly on the basis of modifications to the Commission's suggestions.
I can report that in discussions last week in a council working group member states were at one in supporting the objective of the proposal. Many of them expressed concern about the role which was envisaged for the Commission. But the mood was constructive on all sides, and there seems a good prospect of coming to an agreement that the Commission can support.
Bearing in mind that the CBI is perhaps particularly concerned with the excluded sector, I can report that the Commission has confirmed that it will produce a separate proposal on compliance in those sectors. The Commission has also confirmed that the new proposal will differ in significant respects from that currently under discussion. This will enable it to recognise the commercial conditions in which the excluded sectors operate; in particular, the extent to which undertakings may be vulnerable to litigation.
As my noble friend Lord Dilhorne said, the committee rightly took the view that the directives should not have required member states to empower their courts to set aside existing contracts. I am advised that in certain circumstances courts in other member states may decide that it is necessary to do

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so as a first stage to recovering damages. In general, the Government do not believe that annulment of contracts is a necessary part of measures to ensure compliance. The results could be far-reaching and would affect not only the authority under challenge but innocent contractors and the public at large.
Therefore, I am glad that the Commission has said that it means to distinguish the setting aside of decisions from the effect on the contract concerned. The nature of such effects is to be left to the practice in individual member states. Even in the new text the wording does not appear to us to be as clear as it might be, but that can be tidied up in the course of discussion in council.
Today the noble and learned Lord, Lord Oliver, said that, as presently drafted, the proposals would not give the Commission the right to intervene in national proceedings without leave. With the greatest respect to the noble and learned Lord, I am not convinced that the present draft is any better than its predecessor in this respect. If that is so, what is proposed would represent a major departure from the existing rules in the United Kingdom. These provide only very limited possibilities for intervention by those not having a direct interest in the issues before the court, and then only at the invitation of the court.
We also believe that the proposal could upset the proper balance between the powers of the Commission and the European Court. It is not for the Commission to ensure the precedence of Community law in the day-to-day proceedings in the national courts. Furthermore, there is a clear provision in Article 177 of the Treaty for national courts to refer questions to the European Court for a preliminary ruling if the national court encounters difficulty with Community law.
We understand that other member states also have difficulty with the provision. The Government will continue to resist that aspect of the Commission's proposals, leaving the court to decide in a particular case whether it wished to hear the views of the Commission.
As the noble and learned Lord, Lord Oliver, mentioned, the committee agreed with witnesses that giving the Commission the power to suspend procedures being undertaken to award contracts would be disproportionate and highly undesirable. The committee stated that there was not an adequate legal base for this power and commented on the lack of real limits or safeguards to it.
The Commission has responded to criticism of the original proposal by limiting the circumstances in which it could use the power of suspension by providing that the suspension should be lifted automatically when the fault is put right and by undertaking to reconsider the suspension if it is requested to do so by the member state of the contracting authority.
The Government do not believe that these amendments enable us to put aside the doubts which the committee had. I know that the Institute of Purchasing and Supply has expressed dismay that the most recent version of the draft directive
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continues to include the power of suspension. However infrequently the power was used, it would hang like the sword of Damocles over the unsuspecting purchaser. Members states would not have an opportunity to comment on the Commission's intention prior to suspension and it would be left to the contracting authority, and to firms which may be injured by the Commission's decision to take the Commission to the European Court of Justice in an effort to overturn the decision. I am sure that other member states will have serious problems with this part of the proposal. Many of them may be prepared to recognise that urgent action is sometimes needed. The Commission has shown that it is possible to obtain that through interim measures of the European Court of Justice. It might also be possible to consider a procedure whereby the Commission would look to member states to take appropriate action in specific cases, failing which it would take that member state to the European Court under Article 169.
The noble and learned Lord, Lord Oliver, also mentioned damages. The committee, when it turned to damages, regarded the Local Government Act 1988 as providing an appropriate precedent. Section 18 of that Act limits damages for breach of statutory rules on tendering to expenditure reasonably incurred for the purpose of submitting tenders. The committee also concluded that making procuring authorities subject to a duty to tenderers to observe the Community rules and be liable in damages for breach of those rules was acceptable. It said that this need not prejudice the legal position in other contexts.
Originally, the Commission wanted damages to be available for the cost of unnecessary studies, foregone profits or lost opportunities. Such a provision appeared to us unacceptable, and the report stated it as the general view of the committee that it could lead to speculative and wasteful litigation. The amended proposal simply says that damages should be available to the injured undertaking. We believe that the measure of damages should be left to individual member states, and will look to clarify the text in this respect.
The Government share the committee's apparent concern that the drafting of the Commission's proposals is inconsistent with the requirement in Article 189 of the treaty that the directive shall leave to the national authorities the choice of form and methods for its implementation. We understand that Article 1of the amended proposal is intended to say that the member states can choose between making available administrative or (and not "and") judicial remedies. The committee has concluded that in the United Kingdom the tenderer should seek his remedy from the courts. The Government will give full weight to that conclusion in considering how any adopted directive is implemented.
On fines, the committee did not see difficulty in having penalty payments if a contracting authority fails to comply with an order by a court to remove discriminatory specifications. The Government agree, on the basis that this is a normal sanction in the UK if bodies which are not part of the Crown do not obey orders of a court.

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On the wider question of whether fines should be available for breach of Community rules, the committee concluded that such a provision as an alternative to damages would be inappropriate. The Government agree, while noting that UK suppliers would in many cases not find the availability of fines an effecive sanction against purchasing authorities in other member states which are part of government themselves.
The noble and learned Lord, Lord Oliver, mentioned audits. The Government share the committee's view that audit, or the threat of audit, could supplement but not replace the monitoring by disappointed tenderers that is central to the Commission's proposal. We believe that various forms of audit should be considered as ways of improving suppliers' confidence, deterring or detecting contracting authorities who persistently break the rules or as an alternative way of providing the transparency that the procurement rules seek to ensure. Although public purchasers elsewhere in the Community may not yet be as familiar with audit or quality assurance certification as our government departments are rapidly becoming, such techniques may be more familiar in the sectors at present excluded from the procurement directives. This point is therefore particularly relevant in that context. In fact, we understand that the Commission will consider audit as a possible part of the proposals it intends to make later this year for ensuring compliance with whatever measures are adopted on procurement in those sectors.
The noble Lord, Lord Williams of Elvel, made some perceptive comments about how purchasing is actually conducted. As he rightly said, many purchasers make use of qualified lists. Under the existing directive, purchasers need also to consider suppliers who ask to be invited to participate. I agree that more can be done to let new suppliers compete, and the Commission has included in its proposals for the excluded sectors a facility to ensure that it is possible for new firms to apply to go through the process of qualification.
This debate has been very useful and has enabled us to examine in some depth the proposal made by the Commission. The report of your Lordships' Select Committee has proved an excellent foundation for the report and we are all indebted to that committee. It has become clear that, even as amended by the Commission, the proposal causes us major difficulties. We have tended, quite naturally, to focus on those. However, it would be wrong to miss the common purpose which we share with the Commission and, I believe, with all our partners in the Community to ensure that there is better compliance with the procurement directives. I have every confidence that ways can be found to develop an instrument which could cut across the difficulties but still give us better compliance. Therefore, once again I thank the noble and learned Lord, Lord Oliver, for introducing this debate.
Lord Oliver of Aylmerton: My Lords, I shall not take up your Lordships' time with a summation. I desire to say only three things. First, I certainly do not take any offence that the Government do not
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share the view which I expressed, perhaps unwisely, that the amended draft does not entitle the Commission to intervene in domestic proceedings without leave. Of course, I pointed out that the revised article is expressed in what I described as somewhat Delphic terms and I should not quarrel with the proposition that it ought to be clarified.
Secondly, I am sure that the committee will be grateful for the assurance that the Government share its view of the undesirability of according to the Commission a power of direct intervention. Thirdly, I hope that what has been said will operate as an assurance to the noble Lord, Lord Williams of Elvel, that the delay in debating this matter was not due simply to the legal composition of the sub-committee and was not merely an example of the law's delay. It only remains for me to thank noble Lords who have taken part in what has been a very useful and constructive debate. I commend the Motion to the House.
On Question, Motion agreed to.

European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 1989
5.37 p.m.
Lord Lyell Lord Lyell rose to move, That the draft regulations laid before the House on 16th February be approved [10th Report from the Joint Committee].
The noble Lord said: The effect of these draft regulations before us is twofold. First, they increase the limit on the expenses of a candidate at a European Parliamentary election in Northern Ireland from £8,000 plus 3.5 pence per elector to a new limit of £10,000 plus 4.3 pence per elector. The second effect, as your Lordships will see in pargaraph 2(b), is to increase the deposit required from such a candidate from £750 to £1,000. Separate draft regulations making these changes for candidates in Great Britain have been laid before Parliament by my right honourable friend the Home Secretary.
The increase in the limit on expenses is in line with changes in the Retail Prices Index since they were last increased in 1984. The increase in the deposit is rather greater in percentage terms, but is actually less than would be required to restore the deposit to the equivalent of its value in 1979 which, as your Lordships will be aware, was the first year in which direct elections to the European Parliament took place. With that brief outline, I beg to move that the draft regulations be approved.
Moved, That the draft regulations laid before the House on 16th February be approved [10th Report from the Joint Committee].—(Lord Lyell.)
Lord Prys-Davies: My Lords, we support the regulations. I have compared them with the terms of the draft regulations in respect of the European elections to be held on mainland Britain and it seems to me that the terms are identical.
I understand that the specific provisions of these regulations are not contentious, but that is not to say that my noble friend Lord Fitt, who has a firm

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understanding of Northern Ireland politics, may not wish to address your Lordships on an aspect relating to the funding of European Parliamentary elections in Northern Ireland. However, addressing myself to the specific terms, which are identical to those for Great Britain, I support the regulations.
Lord Hampton: My Lords, we see nothing against these regulations, and we support them.
Lord Fitt: My Lords, normally such regulations would go through on the nod because there does not seem to be anything controversial in relation to political parties in the United Kingdom. However, I should like to ask the Minister to explain one or two points on which I think I have a little knowledge.
A European Member of Parliament is in a somewhat different position from that of a Member of the United Kingdom Parliament. Those who happen to be Members of the UK Parliament and the European Assembly—sometimes also referred to as a parliament—operate under different directives. One can never be sure which are the most important directives—those from Europe or those from the United Kingdom.
The Minister has set a limit on what can be spent by anyone contesting a European Parliament seat. However, those who are already elected and sitting as MEPs have formed themselves into groups—the Socialist group, the Conservative group, the Liberal group, and so on. I know that when elections are held there are slush funds, for want of a better phrase. Each of the candidates receives money from those slush funds to fight the election. Is there any way of checking how much money a candidate receives from a slush fund? Is there any way of checking whether a candidate has overspent in fighting the election because of the amount of money received from Europe?
There is an amalgamation of interests for certain candidates who are Members of Parliament and also MEPs. Anyone who has experience of the other place will know that sometimes accountancy for elections is liable to go a little astray when filling in expense accounts to the returning officer. If it were found that a candidate had overspent on the expenses allowable and that the money he had received did not come from this country but came from Europe, would the same action be taken against him as is laid down under our election laws? There are fixed penalties and certain measures can be taken against candidates who overspent.
I repeat to the Minister that there are slush funds in Europe for the purpose of Parliamentary elections.
The Earl of Longford: My Lords, can the noble Lord explain where these slush funds come from?
Lord Fitt: My Lords, I have just said that they come from the different groupings. There is a Conservative group, a Labour group and others, including a Right-wing group. I know that during elections money is paid into a central kitty and dispersed to the various regions.
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If that money is available from Europe, does it have to be accounted for to the returning officer? What will be the penalty for a candidate who overspends under this legislation now that it is brought into line with legislation covering elections to the United Kingdom Parliament? What penalties can be inflicted on a Member who is seen to have considerably overspent arising from the financial assistance received from Europe?
Lord Lyell: My Lords, I shall not do what is normally done on television for one particular contest that takes place in November. Therefore, I start by thanking the noble Lord, Lord Prys-Davies, for his comments on these regulations. I also thank the noble Lord forthe warning that his noble friend Lord Fitt—I understand that is the case as the noble Lord, Lord Fitt, is sitting behind him—was liable to say a few words. However, I shall come to the comments of the noble Lord, Lord Fitt, in a few moments.
I also thank the noble Lord, Lord Hampton, and welcome him back to the fold of those discussing Northern Ireland affairs.
The main thrust of the regulations is that the limit is raised to what we believe it should be in realistic terms. The noble Lord, Lord Fitt, rightly asked one or two questions about the funds spent by candidates. The noble Lord referred to these sums of money and I was astounded at his moderation. The terms used by the noble Lord were mild for some of the funds that are known by the noble Lord in Northern Ireland, let alone elsewhere.
The noble Lord asked about the provenance and where the candidates expenditure might come from. The noble Lord probably knows that better than myself. I have never stood for elected office but the noble Lord has stood with distinction in Northern Ireland for a number of fora. He will certainly be well aware of the chief electoral officer checking the money spent by candidates in parliamentary elections.
I have to tell the noble Lord that there is no way of checking where such amounts come from. There is a mechanism through the chief electoral officer and through the main legislation. The European Parliamentary Elections Act 1978 is the main legislation which we are mildly amending this evening. The noble Lord will find the mechanism in that legislation. A chief electoral officer can check how much each candidate spends as part of his electoral expenses in his campaign.
The regulations raise the amount which each candidate may spend to £58,000. In 1984 the permitted maximum according to the formula which was then in existence, and which we are raising this evening, for each candidate in Northern Ireland was £45,716.18. Your Lordships will be aware that Northern Ireland is one Euro-constituency. I was about to say super-constituency but that would result in drum-beating for Northern Ireland which we do not want this evening—at least in excess.
The expenditure by individual candidates, which was declared, ranged from £32,700 down to £43.76 for the candidate of the Ecology Party. The latter

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figure was 0.01 per cent. of the maximum. The £32,700 was spent, and approved through the normal regulations by the Chief Electoral Officer, by Mr. John Hume, the SDLP candidate. That amount was just under 72 per cent. of the permitted maximum for his electoral campaign.
I am afraid that there is no method of checking where the money comes from; but there is a mechanism which we believe works, and has worked, to verify that each candidate spends an amount which is under the figure worked out according to the formula I have briefly described this afternoon.
I understand that each candidate in the forthcoming election for the European Parliament may be able to spend up to £58,000. In 1984 the candidate who spent the most amount of money spent 71 per cent. and the other three candidates; namely, Mr. Morrison, Mr. Taylor, and Mr. Paisley, spent between £22,000 and £27,000. That will give the noble Lord, Lord Fitt, an indication of the amount that was spent and verified by the Chief Electoral Officer under the existing 1978 legislation. I am sorry that I cannot oblige the noble Lord with the actual provenance of the money. I shall not follow him in his fairly moderate description of where the money did come from.
Lord Prys-Davies: My Lords, arising out of the intervention made by the noble Lord, Lord Fitt, perhaps I may ask this question. Can the Minister tell the House whether there can be expenditure by a group of which the candidate is a member, in addition to the expenditure by the individual candidate? It seems that was part of the question that the noble Lord, Lord Fitt, was addressing to the Minister.
Lord Lyell: My Lords, I understand that the chief electoral officer is responsible for the expenditure by each candidate. I do not have the full details of the statutory legislation before me of the machinery whereby the chief electoral officer will check on how much has been spent. I believe that he is concerned to see that the candidates spend a certain sum of money. If the noble Lord, Lord Prys-Davies, is referring to hidden amounts, I am sure that the chief electoral officer would be there to query and inquire. However, he can only go so far in his inquiries.
I am advised that groups can spend but it is not counted against the candidate's expenses. I am sure that there will be separate mechanisms and auditing procedures for those sums of money. What we are referring to tonight is what the candidate may spend himself as part of his declared election expenses.
On Question, Motion agreed to.

Appropriation (Northern Ireland) Order 1989
5.53 p.m.
Lord Lyell Lord Lyell rose to move, That the draft order laid before the House on 28th February be approved.
The noble Lord said: My Lords, I beg to move. The order is being made under paragraph 1 of Schedule 1
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to the Northern Ireland Act 1974. Perhaps I may briefly go through what I normally do at this stage when discussing the appropriation order. Your Lordships will be aware that financially, the order has two purposes. The first is to authorise the further expenditure of £473 million in this financial year. If noble Lords were to examine the 1988–1989 Northern Ireland Spring Supplementary Estimates volume, which is available in the Printed Paper Office, at page 4 it will be seen that the sum of £473 million is referred to. This amount, when added to the £3,618 million previously approved by your Lordships, brings the total Estimates provision for Northern Ireland departmental services to some £4,091 million for this financial year.
The second purpose of the draft order is to authorise the vote-on-account of some £1,669 million for 1989–90. That is the next financial year starting in about three-and-a-half weeks' time. The second amount is necessary to enable services to continue until the 1989–90 main estimates are approved, subject to your Lordships' agreement, later this year. The details of the second amount can be found in the Statement of Sums Required on Account leaflet which has also been placed in the Printed Paper Office. As your Lordships are no doubt aware, the estimates for law and order and other Northern Ireland Office services are not covered by this order.
This draft order covers the entire range of services provided by Northern Ireland departments. I should like to mention one or two key features of the Northern Ireland economy. The Northern Ireland economy continues to show clear signs of improvement and revival. We are particularly pleased by the reduction in the numbers out of work in the Province. By January 1989 total unemployment on a seasonally-adjusted basis had fallen by nearly 16,000 since the peak in October 1986 and by nearly 7,000 on the numbers of exactly 12 months ago.
In the Province employment is rising. The number of employees in the manufacturing sector rose by 2,000 in the year to last September. In the same period the number of jobs in the service sector has gone up by 3,000. Your Lordships will be aware of recent successes, to which I shall refer later, as regards the Industrial Development Board which show that Northern Ireland is an attractive location for new investment.
The Government will continue to pursue economic and public expenditure policies in Northern Ireland to strengthen the Province's economy. These policies will ensure that the economic recovery is as broadly-basedas possible for the benefit of all areas and sections of the community.
Perhaps I may now take your Lordships briefly through the draft order. I shall pause at various pages and draw attention to what I believe are one or two of the more interesting and illuminating points. I shall start with my own department, the Department of Agriculture. Page 6 of the Estimates volume, Vote 1, provides for the Northern Ireland expenditure on United Kingdom-wide support schemes. Your Lordships will see that under subhead A7 at the bottom of page 6 provision of £600,000 is sought to

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meet the costs in Northern Ireland of the measures introduced to assist the egg industry. These short-term measures were introduced to restore stability to the industry following the sharp fall in demand for eggs as a result of the problems in Great Britain associated with salmonella enteritidis in eggs and egg products. Although no such infection was detected in any eggs produced in Northern Ireland, the industry is co-operating with the Department of Agriculture on further measures. Final decisions in relation to Northern Ireland will be taken in the light of developments in Great Brtiain.
Following the reopening in Northern Ireland of the national element for the agriculture improvement scheme, the order provides for additional expenditure of £4 million under subhead B7. Your Lordships will find that in the right-hand column of page 7. The scheme is mainly concerned with the provision of grants for effluent storage and disposal facilities. An extra £1.3 million in subhead C1, also on page 7, is provided this year for payments of compensatory allowances to farmers in the less favoured areas.
The Department of Agriculture's Vote 2, on pages 9 and 10, contains a number of adjustments to the funding of agricultural services. For example, subhead B5 on page 10 provides an extra £450,000 for the intensive livestock sector. A further £500,000 is also provided in the drainage programme under subhead C5. This last sum is to meet additional expenditure on the restoration of the flood defences at Strabane following the severe flooding in October 1987.
I now turn to the Department of Economic Development which has supplementary estimates for all of its five votes. These are detailed on pages 12 to 27. The most significant item in Vote 1 is an extra £15.8 million in subhead D1to meet the current level of expenditure on industrial development grants and loans under selective financial assistance agreements. This reflects the continuing success of the Industrial Development Board in promoting employment in manufacturing industry and tradeable services. As I am sure noble Lords will be aware, we have had a number of major successes on the job creation front. The major investments by Daewoo and Montupet will, for example, provide almost 1,600 new jobs. I remind the House that this increased expenditure is largely offset by an extra £14.6 million of receipts, mainly from the sale of factories and land in line with the privatisation policy of the Industrial Development Board.
The increases sought on the Department of Economic Development's Votes 4 and 5 are all less than £3 million. However, Vote 2 contains by far and away the biggest single increase in these Supplementary Estimates. This is the provision of £390 million for the recapitalisation of Short Brothers plc. This will be found on page 16 under subhead B1. The process was announced by my honourable friend the Parliamentary Under-Secretary of State in another place on 27th February this year.
Noble Lords may recall my honourable friend's previous statement on 21st July 1988, that the
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Government were ready to consider suitable proposals that might lead to the acquisition of Short Brothers by private sector interests. Subsequently, Kleinwort Benson were appointed as merchant banking advisers, and we have been moving towards our objective of privatisation. The Government have been pleased with the interest shown in Short Brothers by other potential purchasers. This interest confirms our view that Short Brothers is a company with many fine products and is held in high regard by other companies in the aerospace industry. We remain convinced that Short Brothers' best interests will be served by an early return to the private sector with the disciplines and opportunities which are available there.
Noble Lords will be aware that an information memorandum was issued to companies interested in acquiring Short Brothers. That was issued on 10th January this year. Detailed discussions are taking place with prospective buyers. Our intention is to achieve a sale as early as possible. Since the early 1980s Short Brothers has been funded largely by commercial borrowings and, because of the high development costs related to new products together with trading losses, a high level of borrowings has been built up. This in turn has placed a considerable interest burden on the company. The Government have always recognised the need to restructure Short Brothers' balance sheet before the company can be returned to the private sector. We have been considering how and when this should best be done. We have reached the view that there would be merit in taking steps now to enable the company to extinguish the bulk of its loan indebtedness to commercial banks.
Clearly, the best way of achieving this would be to inject grant into the company now to enable it to repay its bank borrowings. However, we have decided not to follow this course as it would undoubtedly be opposed by the European Commission, which would not wish to sanction a definitive capital reconstruction until final details of the disposal are known. For that reason we propose to replace the company's commercial debt by a convertible loan from the Government. This would be at National Loans Fund rates. It would replace all of the company's commercial debt save for loans from the European Investment Bank which themselves carry an interest rate well below that charged by the National Loans Fund. Our loan would be convertible. Our expectation is that it would not be repaid but would be converted, either in toto or, for the most part, into equity at the point of disposal of the company. This proposal would be subject to the agreement of the European Commission, and formal notification of our plan has already been made to it. We hope that it can reach a positive decision before the end of this financial year.
The aim of replacing commercial with Government debt is, first, to reassure the market about our intentions on capital reconstruction; and secondly, to simplify the company's portfolio of borrowings so that final recapitalisation can be effected at the appropriate point with minimum delay. The Government's third aim in replacing commercial debt is to secure a reduction in the interest burden

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currently borne by the company and consequently a corresponding reduction in the liabilities of the Government. There may be other payments to conclude the sale, but such matters will arise from detailed discussion with prospective buyers.
For that reason I seek approval at this stage for a payment of up to £390 million. The public expenditure consequences of this payment cannot be accommodated within the Northern Ireland public expenditure block and the necessary resources will be available from the reserve. I am sure that noble Lords will support the substantial provision proposed to replace existing commercial borrowing by Short Brothers. This is a positive indication of the Government's determination to give the company the best prospects for an early and successful privatisation.
Vote 1of the Department of the Environment covers roads, transport and ports. These votes are to be found on pages 29 to 34. There is a net additional provision of £10.9 million. On page 30, under subhead A4, £5.9 million is sought towards an extended programme of maintenance works on carriageways and footways. In subhead A2, £3.1 million is sought for roads, construction and improvement schemes. Also within Vote 1, provision has been made for a contribution of £100,000 to the East Midlands Air Crash Disaster Fund. This is shown on page 32 under "Civil Aviation Services". This £100,000 is part of the £250,000 donation announced by my right honourable friend the Secretary of State for Transport. I am sure that noble Lords will join me in welcoming this contribution towards the relief of suffering caused by that tragic disaster.
On pages 53 to 65 the Department of Education seeks an extra £9.3 million in Vote 1. As can be seen at subhead A1 on page 53, an extra £5.2 million grant is sought for education and library boards. Of this, £3.4 million is for mandatory student awards, schools for mentally handicapped children and library book stocks. The education boards will also receive a further £1.8 million for the maintenance of school buildings. Under subhead A2, an extra £5 million is to be provided for capital expenditure.
On page 60 we find the Department of Education's Vote 2. An additional £4.3 million is sought mainly for capital expenditure on, for example, the Northern Ireland universities. I am delighted that Belfast's Grand Opera House and the Downpatrick Arts Centre will also benefit.
Pages 67 to 79 cover health and personal social services. An extra £46 million is being sought in Vote 1. The figure is £45.834 million. Of this total, about £29.5 million will be allocated to health and social services boards, under subheading A1, mainly to meet the cost of the nurses' regrading and other review body pay settlements. The extra cash will help to maintain the high standard of health and personal social services which we enjoy in Northern Ireland. It will also enable further progress to be made in the transition from institutional to community care for those in long-stay accommodation.
In subhead A2 on page 67, your Lordships will see an increase of over £10 million in the capital
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programme. That will ensure that building projects are carried forward as planned; that essential medical equipment is replaced and that some of the most pressing maintenance jobs can be tackled. Perhaps I may also draw your Lordships' attention to the figure of £10.7 million at the foot of page 69. That is required for family practitioner services to meet higher estimates of demand and higher costs, especially in pharmaceutical services.
In the social security programme a total additional provision of £7.6 million is sought. Six hundred thousand pounds of that figure is required in Vote 3—on pages 75 and 76—to meet the increased costs of completing the social security reforms. Finally, an additional £7 million is required in Vote 4 to meet increased demand on the social security budget for income support, supplementary benefits, attendance allowance and transitional payments.
I should like to express my gratitude for the close attention and patience which your Lordships have shown while I have described what I find to be some of the more interesting details contained in the order before the House this evening. I shall certainly listen to every point raised by your Lordships, and I hope I shall be able to give some constructive and helpful answers thereto. However, as your Lordships know, if any points are missed I shall of course be glad to write to the noble Lords concerned in detailed and, I hope, succinct form. My Lords, I beg to move.
Moved, That the draft order laid before the House on 28th February be approved.—(Lord Lyell.)
6.12 p.m.
Lord Prys-Davies: My Lords, the House is grateful to the noble Lord, Lord Lyell, for his comprehensive introduction to the appropriation order and for placing each of the main Votes within the context of the Government's overall policies and expenditure plans for Northern Ireland.
As the Minister implied, the order involves the expenditure of very substantial public resources in Northern Ireland. As we have heard, the topics which it covers touch upon the interests, and affect the activities, of practically everyone in the Province. For those reasons it is a document of considerable public importance. Plainly it is a document which can only be assessed by the directly elected representatives of Northern Ireland meeting in their own Assembly in the Province, being directly answerable to the general public and having to face the spectrum of pressure groups which provide an impetus for getting policies changed or new ones accepted.
I fear that the best we can do in your Lordships' House is to raise a number of issues. Some of them are of general significance, questioning possibly a trend here or there, and some are of detail on a variety of matters which often appear to be unrelated. I shall now deal with just a few such issues.
Agriculture is the first Vote covered by the order and, indeed, the noble Lord, Lord Lyell, is the Minister for Agriculture in Northern Ireland. Agriculture remains the single most important industry in the Province, employing as it does over 43,000 people with another 18,000 people employed

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in ancilliary industries. I do not know a great deal about agriculture, although I was born and bred in the countryside, but I have had the benefit of advice from my noble friend Lord Gallacher, who is the Opposition's chief agricultural spokesman in the House. In the light of discussions which I have had with him, I wish to raise but two issues with the Minister about his department.
Given the inevitable pressures from the European Community upon farmersto diversify their industry and raise more of their income from activities other than farming, how do the Government see the farming community of Northern Ireland responding to this major challenge, especially as there does not appear to be, under present conditions, the same potential for tourism, craft shops and riding schools as exists in Great Britain? Therefore, given the urgency and the importance of the challenge, perhaps the Minister can assure the House that the Government are introducing adequate measures to encourage the diversification that is required, or that they are at least preparing such measures.
Last week your Lordships' Select Committee on the European Communities published a damning indictment of Community government's failure to tackle the problem of fraud which involved the Community's agricultural policy. That fraud had already been identified by the EC Court of Auditors. I am wondering just how frank the Minister can be with the House on that issue. Can he tell us how active his department is in taking measures closely to supervise CAP subsidies in order to prevent fraud? Further, does his department have properly trained officials to check closely for fraud under the Community regulations which are, by any standard, complex? Indeed, that is why I asked whether the department has properly trained officials to undertake such work.
An important subject which straddles both the Department of Agriculture and the Department of Education is the provision of places for Northern Ireland students who wish to pursue veterinary studies. I should like to know just how concerned the two departments are about the implications for Northern Ireland of the UGC's report on the need for rationalisation of veterinary education. As your Lordships will recall, the report was discussed in this House on Thursday of last week.
So far as I can see, unless I missed the point, there is no specific reference to Northern Ireland in the UGC's report. Can the Minister tell the House whether his department is concerned about the impact of the report? Moreover, is his department worried about the position in Northern Ireland if the major recommendations of the report are accepted and implemented? I raise that issue because one or two people from Northern Ireland have written to me on the matter.
I now turn to the Vote of the Department of Economic Development. As the noble Lord, Lord Lyell, pointed out, the biggest supplementary item is the provision of £390 million for the recapitalisation of Short Brothers plc. That is a substantial sum of money and we are pleased to note that it is to be
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drawn from the reserves. Indeed, we support that item. However, it has been estimated that up to £1billion of public money will have to be put into Short's before a buyer will make an offer for the company. Can the Minister tell the House whether that estimate of £1 billion is somewhere near the mark?
We are concerned about Short Bothers. There are strong external forces bearing on the company which is—we must be clear about this—a very small company, compared with almost all of the European companies with which it is in competition. Nevertheless, Short's has strengths. If those strengths are to be used to greater effect in a privatised structure, an agreement with any buyer will have to be armed with strict conditions, carefully drawn up in a contract that can be monitored and enforced. In the light of experience, it will not be sufficient merely to rely upon assurances. I trust that the department will hear that message. I listened to the Minister but it is not clear to me what stage has been reached in the discussions involving another important Northern Ireland company. I refer to Harland and Wolff. The Minister was silent about that company which is also in financial straits. To the extent that its future, like the future of Short's, is dependent upon financial arrangements and state aid, which have to comply with EC regulations, have those arrangements been approved in outline by Brussels or is this a matter which still has to be negotiated?
We welcome the Minister's encouraging reports about the continuing success of the industrial development board. We fully support its increased allocation of resources which will enable it further to develop the economy of Northern Ireland and to promote employment in the face of turmoil and the consequent image problem.
I now turn to the education Vote. We welcome the increased expenditure on schools in Northern Ireland. There is a strong case for spending more money on the fabric of Northern Ireland schools. We are especially pleased to know that more money is to be spent on education for the mentally handicapped. I am sure that the House will be delighted with the allocation to Lagan College to enable it to complete the first phase of its new permanent accommodation. That school was started in 1981 with a roll of 28 pupils only. It has now risen to 550. I am sure that it is the wish of many of your Lordships, some of whom are not in the Chamber this evening, that I should thank the governors of Lagan College for the service which they have rendered and are rendering to Northern Ireland by promoting integrated education. Their task has not been easy. We know that there are powerful pressure groups standing in their way, but there is now evidence that their vision, commitment, courage and sense of purpose is beginning to bear fruit.
I regret that there is no separate Vote for expenditure on the Irish language. I have on a previous occasion pressed the case for such expenditure to be shown under a separate heading in the Estimates. Should not that expenditure be presented? I am sure that the Government can take credit for agreeing to set up a working party on the study and place of the

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Irish language in the curriculum of Northern Ireland schools. Can the Minister today, or by letter, tell us when that working party will be established?
Drawing upon my experience of education in Wales, I say that if the teaching of the Irish language is to be given an effective place in the Northern Ireland school curriculum it will be necessary for additional resources to be made available to the schools and possibly to the training colleges as well. It is important that expenditure on promoting the Irish language should henceforth be shown in a separate education sub-Vote. I hope that the department will hear that message.
I now move to the health Vote. Expenditure on health care in Northern Ireland is high. As the Minister said, there is continuous pressure for more spending on health care. It is not clear why the expenditure is so high compared with health expenditure in Wales, Scotland and parts of England. I wonder whether the department is undertaking any research into the morbidity pattern in Northern Ireland. I also wonder whether the department has its priorities and policies right or do we have to live with this high level of expenditure on the health Vote in the Province? We must also ask whether some policy areas—for example, health education in schools, housing and anti-poverty measures—warrant a special inter-departmental review to see whether policy changes are required. At another level, what steps is the department taking to ensure that the health boards are developing the necessary intelligence and management information systems to assist the hospitals to produce the best value for money? We shall be interested in receiving in due course—not necessarily tonight—the department's comments on those questions.
I have no other questions on the order for the Minister; but in any consideration of the order one cannot but deeply regret that, of the total expenditure within the Secretary of State's responsibility, 41.1 per cent. is spent on social security and law and order. I appreciate that we cannot comment on the latter point. I also note that under the latter Vote £64 million will be spent on improving and strengthening police accommodation in Northern Ireland. That again is a large sum of money. I regret that under current conditions we cannot argue a case against that expenditure. I accept that position. It is in the interests of Northern Ireland that a political solution should soon be found so that that type of defensive expenditure can be redirected towards building in Northern Ireland a far better society than the one we now have.
6.28 p.m.
Lord Hampton: I thank the Minister for introducing the order. I have listened to the noble Lord, Lord Prys-Davies, once again with interest. It seems to me almost incredible that it is nearly two years since I last spoke about Northern Ireland in your Lordships' House. I find this occasion partly happy and partly sad. I am happy to see friends and remember that business goes on as steadily as ever; it is sad to realise that no solution to many problems is close, and that the atrocities, the suffering and the
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terrorism go on. The noble Lord, Lord Prys-Davies, spoke about the vast expenditure that that involves.
Perhaps I may start with a few brief general comments. Dr. John Alderdice, leader of the Alliance Party of Northern Ireland, summed up the situation well in the recent education of Alliance News. The noble Lord, Lord Dunleath, knows all this better than I. Dr. Alderdice said:
"The terrifying series of sectarian murders which has claimed new victims over the past few days, emphasises again that the most important division in Northern Ireland is not between Unionists and Nationalists or Protestants or Catholics, but between the men of terror and violence who seek to destroy all human values, and those who want to build a democratic and stable society".
I believe that that was also in the Home Secretary's mind last week when he said that we must "extirpate" the IRA. My party seeks to support the Alliance Party as it works across the sectarian divide.
Two events concerning Northern Ireland, apart from the continuing atrocities, have depressed me in recent times. The first was the Elected Authorities (Northern Ireland) Bill which has just finished its final stages in this House. I am saddened that the Government seem at times to ignore the advice of all those who live in the Province, but as I was unable to be present earlier this afternoon, I must not say more here. I am saddened far more by the fact that the Bill is necessary and that terrorism, the arousal of extreme fear, still has such a powerful influence there.
Secondly, I shall briefly comment on the shootings in Gibraltar. I set aside the recent debate in this House on the TV programme, "Death on the Rock", except to say that I thought that the noble Lord, Lord Windlesham, defended his report withdignity and integrity. Nonetheless I find what seems to have happened highly disturbing. It is virtually certain that three known terrorists were bent on carrying out an atrocity that would have made that at the Enniskillen war memorial look like a picnic. The terrorists were shot, which is to be regretted, but in due course they are given a martyr's burial by hundreds of people who apparently saw no evil in what those two men and a women had planned to do. How biased can one get?
However, while emphasising the difficulties, I do not wish to appear totally despondent. I sense signs of hope with discussions across the sectarian divide, improvements in the employment situation, the progress of Lagan College and so on. That is encouraging. Somehow all those who want to build a democratic and stable society and who truly condemn the horrifying series of sectarian murders have to be united in a common cause. One must hope that in a war-weary nation, as it has been described, sanity based on courage will prevail sooner rather than later.
I feel somewhat out of touch but perhaps I may ask the Minister two questions. Both concern page 11 of the Appropriation (Northern Ireland) Order 1989. First, the sum granted on account is £147,000,
"for expenditure of the Northern Ireland Assembly".
What does that involve in the present circumstances? Secondly, when the sum of £160,000 is granted,

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"for expenditure by the Northern Ireland Parliamentary Commissioner for Administration and the Northern Ireland Commissioner for Complaints",
can the Minister explain briefly what is involved? In particular, what kinds of complaints are dealt with and about how many in a 12-month period?
6.33 p.m.
Lord Dunleath: My Lords, once again we are grateful to the Minister for having presented the draft appropriation order in the way that he has. It seems to have surfaced rather more quickly than usual on this occasion. I therefore regret that I was unable to give him advance notice of any of the points that I wished to raise. However, I have no qualms about raising them because I am sure that they will occasion him no difficulty.
Turning first to the Department of Agriculture, Votes 1 and 2, there is quite a lot of concern at the moment about unfit meat being marketed in Northern Ireland. I am not sure whether the noble Lord is aware of this but it seems that there are illegal knackeries which can process casualty animals and then put them onto the market. They can be sold as cheap meat, apparently, in back streets, or I think that they can be incorporated into products such as beefburgers or paté.
I must confess that to a certain extent I looked upon the reports about salmonella and listeria as being partly journalist mileage. But I took a different view when one of my closest colleagues went down with food poisoning about three weeks ago. He has been quite seriously ill in hospital ever since. I therefore think that the risk of unfit food products coming onto the market is something which Her Majesty's Government ought to think about very carefully. In my view the matter of illegal knackeries being able to distribute food is quite worrying.
Secondly, smuggling is a matter to which I have referred before. I am afraid that I return to the conclusion that if we could just get rid of monetary compensatory amounts, it would solve a great many problems. The last time I ventured to raise this, the noble Baroness, Lady Trumpington, said that we would achieve a common currency within the European Market as soon as the time was right. I should be quite interested to know when the time will be right. I should have thought that it could well be just about now. If the noble Lord can throw any light on that when he is winding up, I should be very grateful. It continues to be a problem. There is also a problem as regards animal health.
The third point under the section on the Department of Agriculture is that there is some anxiety in farming circles about the reduction in the special aid package for agriculture. That is the successor to the remoteness grant, as it was originally called. I am aware that it is common policy throughout the EC to reduce support for agriculture. But I am sure that the noble Lord will be aware that agriculture represents proportionately a much larger industry in Northern Ireland than in the rest of the United Kingdom and many other EC countries. That is something which cannot be brushed lightly aside.
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The fourth point under agriculture is that I should be interested to learn from the noble Lord how much progress has been made over encouragement for forestry among private landowners who are farmers and how much has been made over the set aside system.
Turning now to the Department of Economic Development, I agree that the IDB is doing a good job. Some you win, some you lose; that is the way it is. But our area of concern is, as suggested by the noble Lord, Lord Prys-Davies, that Harland and Wolff seem to present a major problem. Unlike other industries, that company does not seem to have been groomed for privatisation with its balance sheet being improved and its order book sustained. I am not close to the situation but we have heard reports of contracts which have been denied to Harland and Wolff. That seems a funny way to go about matters when one is trying to make a company look attractive for sale to the market. It contrasts to a certain extent with the situation in Short's.
Turning briefly to the Department of the Environment, I venture to return to waste disposal which I raised some time ago. I suggested to the noble Lord then that perhaps alternative means other than landfill might be considered; otherwise the entire country will become a thinly disguised rubbish dump.
Since I mentioned that matter, a committee from the other place consisting of honourable Members from all parties produced a report which indicated that Great Britain is sitting on a time bomb with regard to disposal of toxic waste. I readily acknowledge that in Northern Ireland, fortunately, we do not have the same problem of disposing of acute toxic waste. However, at the same time, pollution of water courses, of the atmosphere and of land is something that will increase if we continue with land-fill disposal of waste. I ask the noble Lord to look at this once again to see whether such waste could not be disposed of in a manner that would be less detrimental to the environment.
Turning to the Department of Education, we greatly welcome the support that has been given to the integrated colleges and particularly to Lagan College, which was the flagship of integrated education. I was proud to have been associated with that college in its early years. There is a question mark over Brownlow High School in Lurgan. I do not know whether the noble Lord has any information about this school, but there is a group of parents in North Armagh who are keen to see Brownlow being integrated. However, there is another point of view which does not favour integration. I hope that the help that Her Majesty's Government have already given to integrated education will be extended to Brownlow High School. We are certainly grateful for the assistance that has recently been approved.
Finally, I hesitate to say this, but there seem to be many inconsistencies in planning matters in Northern Ireland. Planning permission seems to be given for buildings that are quite inappropriate for their environment; and yet the planning office is unusually severe on anyone who wishes to use an existing building for an alternative purpose—for

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example, someone who may have a farm shed or a garage and then goes into the plumbing business and wishes to store pipes, valves and other equipment of that kind.
I say this with even more hesitancy because the person in question is a longstanding friend of mine: in the office of the ombudsman there seems to be something of a "Yes, Prime Minister", situation. I greatly admire the gentleman in question, but I wonder whether the complaints and problems that are being put to him are being over-filtered before they reach his desk. In saying that, I am not inferring any personal criticism of the gentleman in question. I wonder, however, whether the procedure is correct.
I am grateful for the consideration which Her Majesty's Government continue to give to matters of importance in the various Northern Ireland departments. I should like to thank the noble Lord for his presentation of the draft appropriation order.
6.43 p.m.
Lord Fitt: My Lords, at the outset I should like to congratulate my noble friend Lord Prys-Davies on the painstaking manner in which he has gone through this appropriation order. I notice that the noble Lord who will be replying to the debate is adequately supplied with civil servants to advise him on the issues which are liable to be raised. My noble friend does not have such assistance either in this House or outside it. For someone who does not represent a Northern Ireland constituency, he deserves credit for the effort that he has put into this matter. Indeed, he could not act with any greater diligence if he were to represent a marginal constituency somewhere in Northern Ireland—although I would not wish to inflict that upon him.
One cannot but be made aware of the gross futility that exists in Northern Ireland. It has already been referred to by the noble Lord who has spoken from the Liberal Benches. A terrible campaign of violence has been waged for 20 years. We are all aware of the increase in this violence over the past weeks. This time last week, two more young British soldiers were brutally murdered on the streets of Derry. Many other deaths and maimings have taken place. What have they been for? It is allegedly to bring about a United Ireland, to unite the Irish people, to bring about reconciliation between the unionists in the north and the nationalists in the south.
When one looks at this appropriation order for 1988–89, colossal sums are to be expended in Northern Ireland to carry out the appropriation for the various departments. It amounts to £5,000 million. That is quite a lot of money to be spent on 2.5 per cent. of the people of the United Kingdom. Without wishing to be blasphemous, I ask this question: where, in the name of God, would that money come from if there were a United Ireland and if the IRA were to be successful in coercing the north to join the Republic against its will—excluding all the bloodshed and pain that would be caused? How, in the name of God, could that country exist? Where would it get such sums as £5,000 million?
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I do not suppose that there is ever an occasion when the Opposition will say to the Government, "You have done extremely well and we have no criticism to make". That is not the duty of the Opposition. The Opposition will always find some means by which to criticise the Government. We have not resorted to such tactics because there is no political gain from unwarranted criticisms. My noble friend Lord Prys-Davies and other noble Lords have quite rightly drawn attention to the amount of money that needs to be spent on so-called security—in protecting RUC stations, and other expenditure—which could very well be used to create a better life for everyone in Northern Ireland.
Should anyone in Northern Ireland read or listen to what I have to say, I should like to ask them a direct question. Do they realise the vast amount of money that has been paid by the British taxpayer to cater for the everyday needs of people living in Northern Ireland, whether in Republican or Loyalist areas? If that link were to be broken by the activities of the IRA, I believe that it would prove to be an economic disaster not only for Northern Ireland but for the Republic. There would be an overspill of the calamity into this part of the United Kingdom. I say that as one who wishes to see the border abolished, if possible by consent, and certainly not by coercion.
I should like to see everyone in the island of Ireland living under an Irish government in peace, amity and concord. No matter that the IRA may consider itself to be acting in the interests of the people of Ireland, however many people it may have on its hit list which we have heard so much about over the past 48 hours, if it continues to pursue the policy it has been following for the past 20 years, I have no hesitation in saying that it will never win. It cannot win. All it can do is to continue to inflict grievous pain on the body politic of Northern Ireland.
There are only a few issues which I should like to draw to the attention of the Minister this evening. No longer being a Member of Parliament I am not as fully involved in the needs and concerns of the population in Northern Ireland as I was for many years. Therefore I have to depend on people writing to me and telephoning me to tell me of their concerns.
One of those concerns relates to the Mater Hospital. I believe that it is envisaged that the Mater Hospital is to lose its casualty department. That has caused great concern in the northern part of Belfast. I lived in the north of Belfast and I support Mr. CecilWalker, the present Member of Parliament for that area, when he says that there is great concern about the projected closure of that hospital. North Belfast has seen a great deal of violence throughout the past 20 years. On many occasions the existence of the casualty department at the Mater Hospital has undoubtedly saved lives. I wonder, therefore, whether there could not be a reallocation of the money given under that heading to ensure that the hospital is kept open.
I understand that there is a very long waiting list for treatment in the ophthalmic department at the Royal Victoria Hospital. Incidentally, that is one of

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the best ophthalmic departments anywhere in the world. It is short of funds and there is a very long waiting list for cataract operations. Cataract complaints very often affect elderly people. I have seen them in my own family. They can be very distressing complaints as people begin to feel that they are losing their sight. I think that further financial assistance should be given to the Royal Victoria Hospital, or there should be a reallocation of existing funds, to enable that long queue for cataract operations to be diminished.
The Minister mentioned that Northern Ireland is not so very different from other parts of the United Kingdom when it comes to complaints about major issues. In that very same Royal Victoria Hospital, and indeed in the Mater Hospital, there are serious complaints about the nurses' regrading system. I know that that complaint affects every other region in the United Kingdom; it certainly affects Northern Ireland.
The question of education and Lagan College has already been referred to by the noble Lord, Lord Dunleath. I think that he and others deserve great credit for taking part in that pilot scheme to bring about integrated education in Northern Ireland. That does not mean that every other school, be they state schools or schools under the control of the Catholic Church, will be closed down, but it does mean that at least some tentative steps are being taken to bring about schools which will cater for integrated education.
The person who deserves credit most of all in that connection is Basil McIvor. He is now a judge in Northern Ireland, he was a member of the Executive in 1974, and is now doing everything he can to enhance integrated education in Northern Ireland. He deserves great credit.
The other issue which has been referred to by every speaker except the Minister is the Belfast shipyard. The Government's actions in an attempt to write off £360 million and the discussions which are taking place with the intention of finding a buyer to privatise Short and Harland will certainly not meet with the overwhelming enthusiasm of the workforce. However, when it comes to choosing between closure of Short and Harland and privatisation, I think that they will reluctantly settle for privatisation.
Harland and Wolff is different. It has been funded differently. It was funded with government money rather than with money from commercial banks, as in the case of Short and Harland. The Government have kept Harland and Wolff afloat. They could quite easily write off the debt appertaining to Harland and Wolff. I understand that final discussions—and I emphasise the word "final"—in relation to the possible privatisation of Harland and Wolff have taken place this afternoon. I hope that on the 9 o'clock news tonight we shall hear that a successful conclusion has been reached.
Engaged in those discussions are representatives of the Government, the DED in Northern Ireland, and Mr. Fred Olsen. Mr. Fred Olsen is a shipowner recognised world-wide with excellent credentials.
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Everyone who is engaged in the shipping industry throughout the world has nothing but the greatest respect for Mr. Olsen.
A project has been put forward by Mr. John Parker, the present managing director of Harland and Wolff. Mr. Fred Olsen is willing to undertake to put £12 million into the Belfast shipyard. He would also place an order for three ships, which would guarantee employment in the immediate future. He would be prepared to have those three ships built at 10 per cent. less than he could have them built in a shipyard in Korea. I believe that that is an indication of the bona fides of Mr. Olsen.
Mr. Olsen would have a minority shareholding—47.5 per cent. Mr John Parker and the other executives in Harland and Wolff are prepared to mortgage their homes and any other property they have. The workforce at Harland and Wolff are prepared to put their redundancy payments resulting from privatisation with the management funds. Together, they would hold the other 47.5 per cent. That represents 95 per cent. of the shares. The other 5 per cent. would be taken by Northern Ireland investors, people who live in Northern Ireland and have the capability to invest in Northern Ireland, and by banks and building societies who have already indicated that they would be prepared to take part.
I say to the Minister that I believe that to be a great indication of the involvement of the whole of the people in Northern Ireland and of a very reputable shipowner, Mr. Fred Olsen. As I say, he is one of the most reputable shipowners in the shipping industry.
That is the proposal that has been discussed today. In effect, it would mean that the Government would have to write off about £60 million, although the commercial banks would not be involved. The Government must be aware of the situation. I understand from some members of the delegation who met the Prime Minister recently to discuss Harland and Wolff that she showed some interest in allowing the company to continue as an industrial concern. As has been said on many occasions, Harland and Wolff is not only an east Belfast project; there is a spin-off from work in Belfast to all other areas of the six counties and to the mainland, because many of the parts involved in shipbuilding have to be imported from other areas of the United Kingdom into Northern Ireland. The project therefore keeps people in employment not only in east Belfast but in other parts of the United Kingdom. I believe that there is such sincerity and enthusiasm behind the offer that I have described that it should be given every support by the Government.
7 p.m.
Lord Lyell: My Lords, once again, the House owes a huge debt of gratitude to the noble Lord, Lord Prys-Davies, who has led the nice inquiry—I must not call it an inquisition—that he always leads when I present the appropriation order to the House. This evening he has maintained his high standard of inquiry and his keen desire to discover what lies behind many of the figures in the order—not simply the figures presented to the House that I find of

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interest. The tour of the appropriation order on which I conduct noble Lords on each occasion is something of a personal selection, but the selection of the noble Lord and of all noble Lords who have spoken in the debate indicates the tremendous interest not only in the economy of Northern Ireland but in the well-being of everyone who lives in the Province.
The noble Lord referred to agriculture and the support and good counsel of his noble friend Lord Gallacher to whom we always extend a welcome whenever he wishes to come to Northern Ireland to examine agricultural matters. I am sure that he will pass on our good wishes to his noble friend who is always a welcome visitor to Northern Ireland.
The noble Lord, Lord Prys-Davies, referred to a devolved assembly and the directly elected representatives of the people of Northern Ireland. I agree entirely with him that the matters that we have discussed this evening could best be considered by the elected representatives of the people of Northern Ireland in a devolved assembly. I hope that the recent encouraging signs will utimately develop in that direction. As the noble Lord will be aware, my right honourable friend the Secretary of State, with the assistance of my honourable friend the Under-Secretary of State, Dr. Mawhinney, is exploring the common ground that exists between the constitutional parties in the Province. I cannot say more about that matter this evening. We hope that those discussions will bear fruit either in the short-term or medium-term future.
On the question of agriculture, the noble Lord also inquired about farm diversification. It will be no surprise to the House to learn that my department—the Department of Agriculture—is anxious to encourage diversification, but noble Lords, especially the noble Lords, Lord Dunleath, Lord Fitt and Lord Blease, will be aware that the climate, topography and soil conditions combine to work against significant diversification away from what we in Northern Ireland call traditional enterprises. In addition—something that is unique to Northern Ireland—the small farm structure does not exactly encourage farmers to give up land for new and what are today largely experimental purposes. However, notwithstanding those points of difficulty, some diversification is already taking place. The farm diversification scheme, on behalf of the international fund, has been useful in promoting a number of interests, particularly in horse breeding exercises and, to a lesser extent, in small animal production—I refer to goats, rabbits and other similar small creatures.
We have also been encouraged by the interest shown in the farm woodland scheme and the woodland grant scheme which, as noble Lords will be aware, are United Kingdom schemes. However, we believe that they reflect some interest by Northern Ireland. Although the United Kingdom farm diversification scheme, which provides aid for on-farm, non-agricultural activities, has had only a limited impact in Northern Ireland, it has stimulated some development in tourist accommodation and recreation as well as education facilities.
Lord Dunleath: My Lords, I was interested in the Minister's comments and wondered whether there was a chink of light regarding the possibility of relaxing VAT on alternative enterprises, particularly horse breeding. Horses could be regarded as farm animals in the same way as cattle or sheep, thereby relieving the accommodation of taxation.
Lord Lyell: My Lords, my noble friend reminds me that this is a traditional week at a place which is only 120 or 130 kilometres west of where we are now seated and where there are notable arrivals from Northern Ireland as well as from the Republic. One of the more successful trainers, whom I salute, has had notable successes at that particular "festival", as I believe it is called.
The noble Lord raises a particularly interesting point about VAT and fiscal structure. I am almost sure—surer than most of the bookmakers—he will not win his bet this evening, but if I find any chink of light, as he puts it, I shall certainly write to him. He will know that so far none of our inquiries in that regard has met with success. But I shall not give up; I shall certainly write to the noble Lord on that point.
The noble Lord, Lord Prys-Davies, rightly raised the question of combating fraud, which seems very much to be the flavour of the week, the month and possibly the year in the media. Some of the criticism is well informed, although some is considerably ill-informed. I assure the House and especially the noble Lord that my department, as well as the Customs authority in the United Kingdom, work particularly closely with the Ministry of Agriculture and the Customs authority in the Irish Republic in operating systems of what we call end-use controls. We believe that those systems are effective, but they need to be ceaselessly updated.
Those systems are designed to combat illegal trading in various agricultural commodities. Noble Lords will have heard about those quadrupeds that cross the Border, but they constitute only a small part of the traffic that crosses the Border quite legally. The House will be aware that Northern Ireland is the only part of the United Kingdom with a land border adjoining another member state. We therefore have one or two problems in that area, but I assure the House that my officials are well trained in what is required to combat illegal trading. We work in close consultation with the Customs authorities and with our colleagues in the Republic.
The noble Lord, Lord Prys-Davies, asked about the Irish language. There is no intention on our part to make a specific Estimate provision in relation to the Irish language, just as there is no specific provision shown for any other subject in the school curriculum. However, we recognise the importance which many people in Northern Ireland attach to Irish language tuition and, above all, to the language itself. The proposals reflect this and mean that Irish will still be available in all schools which presently teach it or wish to do so in future. I hope that that brief outline will be of help to the noble Lord. If there is anything further that we can glean, I shall write to him.

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Integrated education was mentioned by the noble Lord, Lord Prys-Davies, and other noble Lords. Certainly it is a major element in the package of education reforms for Northern Ireland which were announced by my honourable friend the Minister responsible for education in October 1988. Our general approach on integrated education has been to encourage it where there is a local wish for it. I shall certainly take on board the point raised by the noble Lord, Lord Dunleath. I cannot answer him this evening; I shall have to scour the local newspapers. However, I shall write to him on that point.
We have proposed a significant range of new measures to support integrated education. We announced them as part of the reform package. We call them the five-star package: first, the provision for existing schools to opt for grant-maintained integrated status should they wish; secondly, the strengthening of legislation for controlled integrated schools; thirdly, financial assistance for newly-established integrated schools; and fourthly, priority for integrated school capital building projects. The fifth element of this star process is the introduction of a statutory responsibility on the Department of Education to encourage integrated education.
The noble Lord, Lord Prys-Davies, mentioned Short Brothers, as indeed did the noble Lord, Lord Fitt. This matter of course exercises your Lordships' minds and the minds of everyone in Northern Ireland as well as many others in the United Kingdom. The noble Lord, Lord Prys-Davies, referred to the cost of privatising Shorts. He mentioned a figure of approximately £1 billion. I am sorry that we cannot yet provide an estimate of the total cost of privatising the company to the Government. The figure that I gave earlier was what we think will be needed as we speak today. However, the Government are determined to do everything they can to ensure the successful transfer of the company to the private sector. We recognise that there are considerable financial implications in this. But of course the final sum will reflect on the discussions with the ultimate buyer. All these different discussions will reflect different aspects of the company. The figures will fluctuate. However, the final sum will reflect on what are very complicated and confidential commercial discussions.
The noble Lord spoke of the conditions attached to any putative sale. I appreciate his concern on this point. Of course we shall attach particular importance to the commitments that prospective purchasers are prepared to make in regard to the long-term future of the whole company and its employees.
The noble Lord, Lord Prys-Davies, referred to the provision of veterinary education. I am the Minister in charge of vets, and as we use more vets in Northern Ireland than any other area, we have particular regard for this. The report of the working group on veterinary education has reached my office. My officials are considering with me its implications. They relate to the future needs of Northern Ireland, for manpower in the veterinary area as well as training of future vets. If necessary we shall make
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our representations to the University Grants Committee or its successor in due course. I hope that I may have some news in the future for the noble Lord. However, I have none this evening and I doubt, even if I wrote to him, whether I could be of much more help. However, I assure him that this is a matter that exercises us greatly.
The noble Lords, Lord Prys-Davies and Lord Fitt, raised the question of Harland and Wolff. Dealing first with the shipyard, my honourable friend the Parliamentary Under-Secretary of State indicated that the Government are anxious to achieve an early and successful privatisation of the company. I do not have knowledge of the matter that the noble Lord, Lord Fitt, mentioned. Perhaps he has watched the media more recently than I have done. However, I assure him that we have been working very hard to find a structure for privatisation which will be right for the company as well as obtaining the approval of the European Commission. We have not yet obtained this approval since we have not necessarily had a proposal to put to the Commission. But we shall study these proposals in detail, and the matters mentioned by the noble Lord, Lord Fitt, to find purchasers for the company. We detect encouraging signs of progress. We hope that there will be an early conclusion to the discussions.
The noble Lord, Lord Prys-Davies, raised the matter of the high level of health expenditure in the Province. He used the "in" words of health with morbidity. Indeed, expenditure on health in the Province is 20 per cent. higher per head of population than in England and Wales. This reflects higher levels of morbidity in Northern Ireland. A broadly similar pattern prevails in Scotland where morbidity levels are also relatively high. However, I take the point of the noble Lord, that we have to obtain the maximum value for the money from the resources that are allocated to the health programme. He will know—and I reiterate it once again—that the Department of Health and Social Services, as well as the health boards, are making very great efforts to ensure that they obtain the maximum value for the money. Let us take one example: improving patient throughput in the acute hospital sector.
We were very grateful to see the noble Lord, Lord Hampton, back in the Chamber. He would not expect me to say a great deal about elected authorities after we had had a quite lengthy debate on it earlier today, let alone on the second question that he raised, on Gibraltar. However, perhaps I may write to the noble Lord, Lord Hampton, with the provision for the Estimates for the Northern Ireland Assembly as well as the Northern Ireland Parliamentary Commissioner for Administration and Complaints. The various items of expenditure under the Northern Ireland Assembly Vote would appear to be covering basically the costs of the small Assembly staff and residual payments to former members of the Assembly. However, I shall amplify this. The Parliamentary Commissioner, or the ombudsman as he is more generally known, publishes an annual report which will provide information on the number of complaints. We shall certainly ensure that the noble Lord, Lord Hampton, receives a copy as soon as possible.

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The noble Lord, Lord Dunleath, raised a fascinating question on unfit meat. This seems always to be raised before, or after, we have had a nice meal. He gave an example of a noble, honourable or right honourable friend who was struck down by food poisoning. Perhaps I may take details of that later. I hope that it was not caused in any way by unfitmeat. Quite rightly, the noble Lord referred to the dangers of unfit meat. Perhaps I may stress to him that the chief medical officer of the Department of Health in Great Britain recently issued general advice to the public about unfit meat and in particular some of the more unattractive aspects of listeria. The chief medical officer went on to give specific advice to pregnant women and to some patients who were vulnerable because of illness or treatment. Some of the advice given by the chief medical officer was to eat food piping hot. However, he referred to eating certain cheeses. I do not know whether these were the cause of the noble Lord's ailment, let alone that of his friend.
The noble Lord, Lord Dunleath, compared Shorts and Harland and Wolff. A different approach has been necessary in approaching the privatisation of these companies. They operate in completely different markets and have different financial requirements. I assure the noble Lords, Lord Dunleath and Lord Fitt, that the Government are prepared to consider the provision of substantial assistance to a prospective buyer provided that some structure for privatisation which is right for the company can be found. That is not necessarily a matter for us to discuss in your Lordships' House this evening. At the outset it is a matter for confidential and commercial discussion.
The noble Lord, Lord Dunleath, took us back briefly to the ombudsman and spoke about handling some of the case-load of the ombudsman. He paid a generous and fully justified tribute to him. I hope the noble Lord will accept that the Parliamentary Commissioner is totally independent of the Government. It would be inappropriate for me to comment on this matter, but the noble Lord's remarks will be drawn to the Parliamentary Commissioner's attention. The noble Lord also referred to the combined efforts of my department and the Department of Health and Social Services.
I have covered some of the more attractive aspects of cheese and piping hot food, but, as your Lordships will be aware, there is a continuing review in the United Kingdom. Any action taken in Northern Ireland will follow any remedial action that needs to be taken in Great Britain, but that will not prevent us from taking action as we are required to take it in the Northern Ireland context.
On MCAs and currency adjustments, the green pound and so on, I am afraid I cannot help the noble Lord this evening. The Government and the European Commission are committed to the abolition of MCAs by 1992, but the noble Lord will be aware of the varying interests of member states in achieving all this, and it may be difficult. I appreciate his concern about special aid for agriculture. It is voiced to me continually by virtually everybody in the agricultural community in
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Northern Ireland. There is to be a reduction in special aid for the coming year, but it is a matter of determining priorities, given the overall pressures on public expenditure in Northern Ireland, particularly in agriculture. It is frustrating for me to realise that we cannot do everything that we want to. However, £5 million for Northern Ireland's unique scheme represents additional resources at a time when farm incomes elsewhere in the United Kingdom, especially in my own area in Scotland, have been improving, albeit slowly.
The noble Lord raised the issue of set-aside. As he will know probably better than anyone in your Lordships' House, this has been of only limited interest to farmers in the Province. The farm woodlands scheme has been quite successful, and nearly 50 applications have been received for the planting of about 200 hectares, which for Northern Ireland is respectable.
The noble Lord, Lord Fitt, made one of his traditional questioning speeches. It was very touching that he referred to the fairly large sum of money that we are discussing. I am sure he will accept that, over all the years that he has been in another place and the noble Lord, Lord Dunleath, and I have been sitting in your Lordships' House, we have been discussing Northern Ireland affairs. This has gone on for some 15 or 16 years. The funds mentioned this evening are bipartisan. However. I note his comments on public expenditure.
The noble Lord was concerned about the Royal Victoria Hospital, especially the ophthalmic unit. We recognise the difficulties and the eastern health board, which is the responsible body trying to deal with these difficulties, established a task force to look at deficiencies as well as to make recommendations. The board has identified in its operational plan for 1989–90—that is, the coming financial year—a proposal for additional theatre sessions on the RVH site. This proposal will be considered in the context of the development of regional medical services for 1989–90, and £1.5 million has been set aside for this. My honourable friend Mr. Needham recently announced a sum of £1.35 million for the eastern board in this financial year, 1988–89, for the purchase of high-cost equipment associated with regional medical services, including ophthalmology. If any part of that is of major interest to the service, then I shall write to the noble Lord with such figures as I can identify from that.
The noble Lord also asked about the Mater Hospital. The complementary study of the royal group of hospitals, the Belfast City Hospital, and the Mater Hospital, resulted in a number of recommendations. One of these was that the Mater accident and emergency unit should close in the evenings. The time of the closure was to be decided locally. The noble Lord's local knowledge might have a considerable input into that. But I assure him that that recommendation is one of a number included in the eastern health and social health and service draft operational plan. This was issued for consultation in December last year. Together with the comments, the plan will be considered by the whole board on 27th April this year and after that the board will be discussing its conclusion with my

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honourable friend, as well as the Department of Health and Social Services, so perhaps there may be some news then.
The noble Lord rightly drew attention to the level of public expenditure in Northern Ireland. The £5.2 billion total for Northern Ireland excludes the special addition of £390 million that I referred to earlier when dealing with Short's. The whole of this overall figure is the deliberate consequence of matching resources and needs, with more resources being allocated to the Province and to other relatively disadvantaged areas than to the prosperous regions of the United Kingdom. The Government are continuing to target public expenditure resources in ways which will assist the Province to strengthen its economy through self-sustaining growth. We had two marvellous examples earlier this year of Daewoo and Montupet, with an additional 1,600 jobs, which
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shows that this continuing investment in the structure of the Province is beginning to pay off.
The points mentioned on this aspect by the noble Lord are understood by all who take a genuine interest in the economic and social well-being of the Province and are much appreciated. That just about covers everything that was raised in this debate by your Lordships on the order. If I have missed anything, I shall write to noble Lords. I thank your Lordships for your traditional patience and courtesy. I went through the order on points that I felt were important. But we are grateful, and I believe everyone in Northern Ireland will be grateful, for the attention that has been focused on these figures and the Estimates this evening.
On Question, Motion agreed to.
House adjourned at twenty-nine minutes past seven o'clock.