Lords Sitting of 19 December 1990

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

The Lord Bishop of Wakefield
David Michael, Lord Bishop of Wakefield—Was (in the usual manner) introduced between the Lord Bishop of London and the Lord Bishop of Guildford.

European Currency Proposals
2.43 p.m.
Lord Holme of Cheltenham Lord Holme of Cheltenham asked Her Majesty's Government:
Under what circumstances, if any, they would bring proposals to Parliament for a single European currency.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, at the intergovernmental conference on economic and monetary union the Government will be putting forward proposals for the establishment of a European monetary fund which will manage a new common currency, the hard ecu. Under those proposals, the hard ecu could ultimately evolve towards a single currency if it were the wish of governments and peoples that it should be used in preference to their own national currencies; but it is neither necessary nor desirable to take such a decision now.
Lord Holme of Cheltenham: My Lords, I thank the Minister for his Answer. Does he accept that behind the Government's welcome change of style in European matters, there is still an unresolved question of substance? Do the Government believe that the ultimate step-by-step unimposed adoption of a single currency for Europe is a desirable objective or do they believe that it is undesirable? Do the Minister and the Government accept that until the policy objective is clearly resolved, the uncertainty will be damaging for the City and for British industry?
Lord Henley: My Lords, no, I do not accept that. The Government have made their position clear. If it were the wish of peoples and governments that a hard ecu should evolve into a single currency, that should be allowed to happen. As my right honourable friend has made clear, it should be market-driven.
The Earl of Lauderdale: My Lords, is not such an airy-fairy scheme premature until all members of the Common Market obey the rules?
Lord Henley: My Lords, I would not describe the scheme put forward by my right honourable friend the Prime Minister when he was Chancellor of the Exchequer as airy-fairy. It is a valid scheme that we are putting forward to the EC for discussion at the intergovernmental conference.
Lord Barnett: My Lords, I agree with the reply given by the Minister to the noble Lord, Lord Holme. Will he clarify it a little further and make absolutely clear that in practice he is saying that he agrees with the objective of a single currency provided that it evolves from market forces?
Lord Henley: My Lords, I can only repeat what my right honourable friend the Prime Minister said. He made it plain that under the United Kingdom's proposals the hard ecu could ultimately evolve into a single currency if it were the wish of peoples and governments that it should be so used.
Lord Ezra: My Lords, in his Answer to my noble friend Lord Holme, the Minister said, "if it were the wish of governments and peoples." We can understand how governments come into this through the intergovernmental conference. But how are peoples to come into it?
Lord Henley: My Lords, that is obvious: by people using it.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that if what he said is as interpreted by the noble Lord, Lord Barnett, there would be a real risk of a different Conservative Party from the one that exists today?
Lord Henley: My Lords, I am not sure that I follow my noble friend's reasoning. All that I was trying to make clear was that we shall allow the hard ecu to evolve into a single currency if the market so dictates.
Lord Bruce of Donington: My Lords, will the Minister confirm that in giving consideration to the problem and, in particular, the latest effusion on the subject from the European Commission called One Market, One Money, which is some 355 pages long, he will also cause consideration to be given to the fine report published in 1977 by Sir Donald MacDougall on behalf of the Commission which showed that a considerable shift of resources would be required across the whole Community to achieve convergence? That report was successfully withheld by the European Commission from the European Parliament's consideration at the time.
Lord Henley: My Lords, I cannot comment upon the MacDougall Report which, as the noble Lord said, dates from some 12 years ago. I am sure that the other report to which the noble Lord referred which, I must confess, at 350 pages, or whatever it was, I have not read, will be taken into consideration.
Lord Campbell of Alloway: My Lords, may I ask my noble friend for clarification? Does it come to this: that the hard ecu can either be a means to an end or an end in itself, depending upon the will of the member states?
Lord Henley: My Lords, my noble friend is correct. The hard ecu could evolve into a single currency if it were so desired.
Baroness Robson of Kiddington: My Lords, the Minister replied to my noble friend Lord Ezra, who asked when people come into it. Does he agree that it is not possible for people to come in until the hard ecu becomes legal tender usable by ordinary individuals?
Lord Henley: My Lords, I am afraid that the noble Baroness is mistaken. There is no need for the hard ecu to be legal tender. People use a currency when they make contracts, but they do not have to use legal tender. Legal tender applies only to those contracts which have already been made.
Lord Stoddart of Swindon: My Lords, does the Minister agree that it is somewhat premature for people to be trying to push us into a single currency, bearing in mind that we have only just entered the ERM with what many people would consider to be unfortunate consequences for the Government? Are they not now caught in a position where, although they desperately wish to reduce interest rates, they cannot do so because they are constrained within the ERM? Is that not hurting industry and causing the recession to be deeper and longer than it need be?
Lord Henley: My Lords, that is another Question. If our proposals for the hard ecu are accepted it will be entirely up to the noble Lord to use it as he wishes.
Lord Peston: My Lords, the hard ecu scheme is so preposterous that it is flattering for it to be referred to as "airy-fairy".
The Earl of Lauderdale: My Lords, I referred not to the hard ecu but to the proposed single currency as airy-fairy.
Lord Peston: My Lords, has the noble Lord ever heard the expression "when the time is ripe"? Is the answer that we shall hear during the next few months while the Government are still in power that we shall have a single currency when the time is ripe? Is that the answer that the noble Lord is trying to give?
Lord Henley: My Lords, the Government will be in power for considerably longer than a few months. I have answered the noble Lord's question. He knows that perfectly well; it is that we have made proposals for a hard ecu which could ultimately evolve into a single currency.
Lord Williams of Elvel: My Lords, can the noble Lord focus his mind on the terms of the Question? Under what circumstances would the Government bring such proposals before Parliament? Does the noble Lord recall that the decision to join the exchange rate mechanism was not brought before Parliament and was not discussed by it? Is there any requirement for discussion of a single currency by Parliament? If so, what is it?
Lord Henley: My Lords, my understanding is that if there is agreement by all 12 nations it would need parliamentary approval.
The Earl of Halsbury: My Lords, can the noble Lord assure me that whatever the Vickers diamond pyramid hardness scale applied to the ecu, what circulates as coinage in this country will be known as the pound sterling?
Lord Henley: My Lords, I cannot answer that question. The hard ecu could evolve into a single currency if that were the wish of the people and the governments.

Northern Ireland: Status
2.52 p.m.
Lord Monson Lord Monson asked Her Majesty's Government:
Whether they can confirm that Northern Ireland is as British as Huntingdon.
The Paymaster General (Lord Belstead): My Lords, both Northern Ireland and Huntingdon are integral parts of the United Kingdom. In no event will Northern Ireland cease to be part of the United Kingdom without the consent of the majority of the people of Northern Ireland.
Lord Monson: My Lords, I am grateful to the noble Lord for that unexpectedly robust and effective affirmative reply. Does he agree that the previous Prime Minister declared in no uncertain terms that Ulster was as British as Finchley? However, that was before the Anglo-Irish Agreement was made, which may have changed matters considerably. Would the noble Lord care to comment on that? Would he further agree that the more equivocal and half-hearted politicians and other public figures on the mainland are about the maintenance of the union, the more the Provisional IRA and the INLA will be encouraged to step up their terror campaign in the belief that it requires only one more push to achieve a united Ireland?
Lord Belstead: My Lords, the noble Lord suggested that the Anglo-Irish Agreement may have changed things somewhat. Presumably he referred to his Question today. I believe it is important to bear in mind that the agreement is an international, binding document which confirms the current status of Northern Ireland. As I said, any change in status would need the support of the majority of the people living in Northern Ireland.
Lord Mason of Barnsley: My Lords, are the Minister and the noble Lord, Lord Monson, aware that the vast majority of people in Northern Ireland are British to their fingertips? What is more, I believe that they are more patriotic towards the flag, the country and the Queen than people in any other province in the United Kingdom. Their record in the past two wars proves that. Is the Minister further aware that in the present circumstances their endurance and Britishness must be admired?
Lord Belstead: My Lords, I am very glad this afternoon to have had the opportunity to put on record my admiration for all the people of Northern Ireland. As concerns the constitutional status of Northern Ireland I have nothing to add.
Lord Renton: My Lords, is my noble friend aware that no part of the kingdom is more British than Huntingdon? Its Member of Parliament would do much to make the people of the United Kingdom more united.
Lord Belstead: My Lords, so that there is no misunderstanding, perhaps I may say that Northern Ireland is part of the British Isles but not part of Great Britain. It is part of the United Kingdom of Great Britain and Northern Ireland.
Lord Glenamara: My Lords, is it not obvious from the Question that Huntingdon is probably as Irish as Northern Ireland?
Lord Belstead: My Lords, as my noble friend Lord Renton knows very well indeed, Huntingdon is a fine part of the world.
Lord Prys-Davies: My Lords, I wish to take advantage of this opportunity to welcome the noble Lord, Lord Belstead, to the Dispatch Box in his role as a senior Minister at the Northern Ireland Office. His charm, which is considerable when it is applied, together with his other qualities should help to de-freeze ancient attitudes in the Province. Perhaps I may also take the opportunity to say that we shall miss the noble Lord, Lord Skelmersdale, speaking from the Dispatch Box.
Will the Minister once again confirm that constitutionally Northern Ireland is not a part of Britain but is a separate part of the United Kingdom of Great Britain and Northern Ireland? Given that background, it is not easy to come up with a simplistic answer to the simplistic Question which has been asked.
Lord Belstead: My Lords, I am grateful to the noble Lord for his kind remarks about my noble friend Lord Skelmersdale and myself. I confirm that what he said is correct; the position is encapsulated in Section 1 of the 1973 Northern Ireland Constitution Act.

Refugees: Income Support
2.56 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
Whether they will state the reasons for their decision (HL Deb., 14th November 1990, col. WA11) not to allow refugees income support at 100 per cent. support levels.
Lord Henley: My Lords, asylum seekers are among the groups of people who are not entitled to income support under the normal rules but whose circumstances make it appropriate for them to receive some benefit. For them, as for other comparable groups, 90 per cent. of the personal allowance is paid, together with the full amounts for children and any appropriate premiums.
Earl Russell: My Lords, I am grateful to my noble kinsman for that reply. But, with respect, why is that the case? Why is it not the full rate? Perhaps he could enlighten me.
Lord Henley: My Lords, the Government have to make judgments about where to direct extra resources that become available for social security. We concluded that asylum seekers were not a priority group for further assistance. Perhaps it may help the noble Lord if I tell him that my right honourable friend the Home Secretary has concluded that in view of the rising number of asylum seekers—and the noble Earl knows very well that numbers are rising—there should be a review of all arrangements relating to asylum seekers. All relevant matters will be considered.
Lord Carter: My Lords, can the Minister tell the House what out of a total departmental budget of £60 billion is the saving to public funds resulting from the denial of full income support for refugees?
Lord Henley: My Lords, we are not talking about refugees but asylum seekers. Once refugees have been granted asylum they will be entitled to the full amount in income support. The figure that the noble Lord requests, based on the current estimate that about half the estimated 25,000 asylum seekers seek income support, is £1.7 million.
Baroness Ewart-Biggs: My Lords, will the noble Lord say a little more about the review he mentioned? Will it encompass the problem that asylum seekers find in obtaining housing?
Lord Henley: My Lords, as I said, in view of the rising numbers of such people my right honourable friend the Home Secretary asked that all these matters should be reviewed. That review will have a broad base. We are examining the United Kingdom's international obligations, actions overseas and arrangements for receiving asylum seekers in this country. That would cover the noble Baroness's point. The review will also cover the processes of deciding their claims.

Unemployment
3 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Which organisations they are consulting about unemployment.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, employment department Ministers meet a considerable number of organisations in the course of their work and discuss a wide range of labour market issues. In addition, the Secretary of State for Employment attends meetings of the National Economic Development Council.
Lord Dormand of Easington: My Lords, is the Minister aware that whoever the Government consult on unemployment, they will be told that the increases that have arisen in each of the past eight months will continue for many more months to come, and that eventually the figure will reach 2 million? Is the Minister further aware that the situation arises directly from the sheer incompetence of the Government in dealing with economic policy, and in particular in relying almost entirely on interest rates? On this occasion, will the Minister spare us the fairy tale that current inflation and unemployment arise from excessive wage claims, as the Government know full well that workers are responding to the inflation which has been brought about by the Government?
Viscount Ullswater: My Lords, unemployment is still nearly half the level that it was in July 1986. The United Kingdom still has one of the lowest unemployment rates in the European Community. The unemployment rate in the United Kingdom is lower than the European Community average.

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Employment is at an all time high, and the workforce in employment has risen for more than seven years. It has increased by over 3.7 million since March 1983. There are more than 27.3 million jobs in the United Kingdom at the present time. It is a factor of the Government's success in their monetary policy that inflation has now started to fall and it will continue to fall. That will bring great benefit to everybody in the next year.
Lord Mason of Barnsley: My Lords, was the Minister not informed during the course of his consultations that unemployment rose by 58,000 last month? That was the worst monthly rise since 1981. This year employment in manufacturing industry fell by 67,000 compared with 2,000 the year before. That heralds a deepening recession. Will the Minister therefore tell the House what steps the Government are taking to halt this cruel rise in unemployment and the erosion of our manufacturing base?
Viscount Ullswater: My Lords, as for the numbers employed in manufacturing industry, it may be of interest to the House to know that over the past four years there has been a drop of some 60,000. That is since 1986. However, in the last four years of the former Labour Government that figure dropped by some 600,000. Output under that Government also dropped, whereas under this Government it has risen by 18 per cent. over the past five years.
Lord Molloy: My Lords, the Minister stated that interest rates are falling and may fall faster. Does he really believe that the tens of thousands of families where the breadwinner is unemployed are interested in that statement? Is he aware that over the past year unemployment has risen very dramatically? It will be of no comfort to those who are on the dole to be told that the situation could be worse in France, Belgium or Germany. Does not the Minister agree that the Government should have consultations about unemployment with the Confederation of British Industry, the Trades Union Congress—despite the fact that those bodies are severe critics of the Government's policy—and representatives of the City of London, including the governor himself? Those people seem to know full well that unemployment is dangerous and that something should be done about it.
Viscount Ullswater: My Lords, the worst disease of all is inflation. It is the Government's firm commitment to bring the rate of inflation down. In doing so, it is necessary for interest rates to remain at their current level until inflation falls further. The noble Lord suggested that the Secretary of State or employment Ministers should meet with the TUC and the CBI. Those Ministers meet with those bodies in the forum of the National Economic Development Council meetings which I referred to in my original Answer. My right honourable friend said in another place on 11th December:
"If anyone has any specific proposals to put forward in relation to unemployment, I shall be happy to consider them".—[Official Report, Commons, 11/12/90; col. 802.]
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There is no question of any Minister hiding behind any format that will not allow him to consider unemployment.
The Viscount of Oxfuird: My Lords, will my noble friend tell the House what level of compensation has been forthcoming from redundancy payments to unemployed people either through the Government or through industry?
Viscount Ullswater: My Lords, that question is a little further away from the Question on the Order Paper than I can stray today.
Lord Callaghan of Cardiff: My Lords, will the Minister tell us why he used the year 1986 to illustrate his point?
Viscount Ullswater: My Lords, the selection of the indices was chosen in 1985 when the indices were based at 100.
Earl Russell: My Lords, will the Minister consider a small amendment to his second reply to the noble Lord, Lord Dormand? He gave figures for falls in unemployment since 1986. Will he consider amending his statement and refer to recorded unemployment?
Viscount Ullswater: My Lords, I do not remember giving figures for unemployment. I have given the figures for those who have lost their jobs in manufacturing industry. I said that over the past four years 60,000 people have lost their jobs in manufacturing industry.
Lord Stoddart of Swindon: My Lords, is the noble Viscount aware that certainly on this occasion unemployment is biting deeply in the South, and more particularly in the South-East, of the country? Will the Minister pay special attention to that matter as it seems that the recession, and perhaps the slump to come, will hurt everyone in this country as it has never hurt them before?
Viscount Ullswater: My Lords, I must agree with part of what the noble Lord has said. The Government certainly do not wish to see unemployment rise. Nothing that I have said has indicated that the Government are content with the situation as it is at the moment. The Department of Employment has developed a great many measures to cope with people who lose their jobs. That department has measures to help advise them how to obtain new jobs and to assist in many ways with the training and the re-training of those who become unemployed.
Lord Denham: My Lords, I hope noble Lords will realise that Question Time has lasted for 24 minutes. We should only have one further question from the Opposition Front Bench as we are straying far beyond the accepted principles of this House.
Baroness Turner of Camden: My Lords, I thank the Minister for some of the information that he has given in reply to the questions that have been asked. However, does he not agree that in a situation in which the Government have changed about 16 times the way in which they compute unemployment statistics, people are therefore a little suspicious of the statistics that have been mentioned? Does not the Minister also agree that in the South-East there is now

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considerable concern in the finance sector where a number of large financial institutions have announced sweeping redundancies—for example, at Lloyd's and, today, Citicorp? That is a very worrying development.
Viscount Ullswater: My Lords, I refute the proposition put forward by the noble Baroness about the statistics. The statistics are comparable. Those that I have given have been drawn up on a comparable basis. I agree that whereas there was a great shake-out of employment in the early 1980s in manufacturing industry, it would appear that there is about to be a shake-out of administrative posts—perhaps in the service industries—at this point in the decade.

Business
3.8 p.m.
Lout Denham: My Lords, with the leave of the House, I should like to say a word about the two short debates standing in the names of my noble friend Lord Montgomery of Alamein and the noble Lord, Lord Stallard. As the mover is allowed 15 minutes, and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of the short debate in the name of my noble friend Lord Montgomery of Alamein this means that all other speeches should be limited to a maximum of eight minutes, and that of the noble Lord, Lord Stallard, to nine minutes. If any noble Lord should speak at greater length, it would be at the expense of subsequent speakers in the debate.

Business of the House
The Lord Privy Seal (Lord Waddington): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, if the Consolidated Fund Bill is brought from the Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with to enable the Bill to be taken through all its stages tomorrow.—(Lord Waddington.)
On Question, Motion agreed to.

Planning and Compensation Bill [H.L.]
Viscount Astor: My Lords, on behalf of my noble friend Lady Blatch I beg to move the Motion standing in her name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Planning and Compensation Bill [H.L.] has been committed that they consider the Bill in the following order:

Clause 1,

Clause 27,

Clause 2,

Clause 28,

Clause 3,

Clause 4,

Clause 29,

Clause 5,

Clause 30,

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Clause 6,

Clause 31,

Clause 7,

Clause 32,

Clause 8,

Clause 33,

Clause 9,

Clause 34,

Clause 10,

Clause 35,

Clause 11,

Clause 36,

Clauses 12 to 14,

Clause 37,

Clause 15,

Clause 38,

Clauses 16 to 18,

Schedule 1,

Clause 19,

Clause 39,

Clause 20,

Clause 40,

Clause 21,

Schedule 2,

Clause 22,

Schedule 3,

Clause 23,

Schedule 4,

Clause 41,

Clauses 24 and 25,

Schedule 5,

Clause 42,

Clause 26,

Schedule 6,

Clause 43,

Schedule 7,

Clause 44,

Clause 51,

Clause 45,

Clause 50,

Clauses 46 and 47,

Clause 49,

Clause 48,

Schedule 8,

Clause 52,

Schedule 9,

Clause 53,

Schedule 10,

Clauses 54 and 55,

Schedule 11. —(Viscount Astor.)

On Question, Motion agreed to.

Latin America
3.10 p.m.
Viscount Montgomery of Alamein Viscount Montgomery of Alamein rose to call attention to the situation in Latin America; and to move for Papers.
The noble Viscount said: My Lords, it is now exactly 19 years less one month since we last had a debate on Latin America. That was in response to a Motion put down by the late Lord Cowley. The debate lasted three hours and 40 minutes and there

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were 14 speakers. Today we have 16 speakers who are allocated two and a half hours. That shows a considerable increase in productivity in your Lordships' House.
Unfortunately, despite some efforts on my part, there are no speakers today who spoke in the last debate. One noble Lord I encouraged to speak said that so much time had elapsed since my Motion first appeared on the Order Paper that what he intended to say had been overtaken by events. However, we have today a wide range of speakers who will cover a variety of aspects of this immense subject, which is of enormous interest.
I am very glad that we shall hear a maiden speech from my noble friend Lord Aldenham whose family is a fine example of British mercantile involvement with Latin America dating from the beginning of the last century.
I have spoken on this subject in the House many times. The last occasion was the foreign affairs debate on 13th November. Today I want to tackle different aspects of the problem. However, it would be right to start by giving some background.
We are discussing an immense continent comprising nearly 450 million people. Half of the population lives in two countries—Brazil and Mexico. Brazil is larger than continental USA and Argentina is the size of India, with only 5 per cent. of the population of that country. Latin America stretches from the US frontier to the edge of Antarctica. It contains some spectacular scenery and notable mountain ranges and its minerals, agriculture and human resources are of almost unquantifiable proportions. Two thirds of the world's surviving rain forest is in the Amazon basin, which is larger than Western Europe. The Amazon river contains 20 per cent. of all riverine fresh water in the world. Those are shattering statistics.
The rain forest is a matter of worldwide concern. It is very exciting that today the Latin Americans themselves are addressing the problem with great vigour. I am sure that we shall hear more on the subject from my noble friend Lord Chorley and the noble Lord, Lord Shackleton, who are both former presidents of the Royal Geographical Society. It is worth mentioning that the Royal Geographical Society has played an important part in developing that relationship and stimulating interest in the rain forest among Latin Americans, as have other British institutions, such as the Royal Botanic Gardens.
As I said, it is a continent of vast and extraordinary potential. Sadly, in the course of this century we have seen a decline in British interest in Latin America. Exports to Latin America from the UK amount to only 2 per cent. of our total exports. Our share of the market is now less than 2 per cent. Two-way trade between Latin America and the UK, at just over £2 billion, is less than our two-way trade with Denmark. That is extraordinary when one considers, in terms of developing countries, that it is a continent of highly
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entrepreneurial people. Stock markets have been in existence for many years, in some countries since the middle of the last century.
I like to think that a new-found confidence will result from the re-establishment of democracy. In many countries in Latin America there are now new young politicians who are making structural changes to their economies. They are leaving behind the rhetoric of nationalism, which is in decline, and considering the advent of new, open markets. They are vigorously attacking inflation. With more stable currencies we hope to see a new flow of much-needed investment capital.
The point about open markets is that they must be two-way. It is therefore with great sadness that we have seen the recent failure to reach full agreement in the GATT talks. There is a European dimension to the issue. The situation is not quite as apocalyptic as the press would have us believe, but it is a serious impediment. Agriculture is vital to the recovery of many Latin American countries and the diversification of their markets should not be impeded by protectionist tariff barriers in Europe and the USA. Most Latin American statesmen recognise the social problems which face European agricultural producers, but surely individual governments in Europe must solve the problem by other means than subsidising the price of agricultural produce. It happens that in this instance the UK and Latin America have much in common. The United Kingdom can be seen as an ally in Europe and as a gateway and bridge into the Community for Latin America.
This is a vast subject and we have limited time. But it would be wrong for me to leave the subject of Latin America without mentioning the work of Canning House, more formally known as the Hispanic and Luso Brazilian Council. This is a charitable institution which I have supported for many years in different capacities. It acts as the focal point for promoting knowledge of Latin American and the Iberian peninsula in this country. A very small and dedicated professional staff carries out an immensely important programme. Among other things the council has recently introduced an annual morning seminar for parliamentarians, focusing on current issues. The seminars will continue and I hope that we shall see new faces each year from both Houses at those events.
There is also the matter of language. Spanish is now the most internationally spoken language in the world after English. However, for some reason it is still relegated to an extra in the national curriculum. I do not know whether people appreciate that more than 10 per cent. of the population of the United States speak Spanish as their first language. It is a shattering thought that before the end of this decade there will be more people in the United States who speak Spanish than there are in Spain.
Canning House also focuses on the European dimension, since we believe that the decade of the 'nineties will see a major development in European-Latin American relations in which the United Kingdom has an important role to play. In that

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context I have two suggestions to make to Her Majesty's Government who, I believe, have a most important part to play in assisting the development of that new relationship.
There is a good deal of enthusiasm for Latin America among the small number of middle and senior management in UK companies involved in the region. However, a problem has existed for some time in focusing the attention of chairmen and chief executives, unless those companies are large or well-established in the area. New entrants into the market are quite rare. That may be because there is such pressure in the London market to achieve short-term results. I believe that Her Majesty's Government could give a lead in that connection.
Nearly 20 years ago, in 1972, a major conference took place at Lancaster House which followed a visit by a Cabinet Minister to Latin America. I suggest that that should be repeated in the middle of 1992, giving a lead time of about 17 months. Apart from being the year of the completion of the single European market, 1992 is the 500th anniversary of the encounter between the New World and the Old World dating from the voyage Cristóbal Colon across the Atlantic. It was an important encounter between two civilisations. A major conference organised by Her Majesty's Government in 1992 would seem appropriate.
My final suggestion concerns visits. During the 1960s and 1970s before which time Latin America was largely undemocratic, there were an enormous number of visits by royalty. But since the return to democracy these have become very rare. Although there are fairly frequent visits by Ministers of State and junior Ministers, Cabinet Ministers seldom travel to Latin America and no Prime Minister has ever been there. Meanwhile the King of Spain is in action a lot of the time and has visited almost every country in Latin America since the restoration of democracy. President Bush has just completed an important whistle stop tour at what must have been an extremely difficult time for him. I like to think that that may signal the start of a new initiative in Latin America by the United States since there has been no such thing since President Kennedy and the Alliance for Progress nearly 30 years ago. However, we should now do something from the United Kingdom.
In articles and speeches in various forums I have suggested frequently that the former Prime Minister should visit Latin America, but I fear that her heart was not in the project. We now have a new Prime Minister and a new opportunity to develop the special relationship. I believe that nothing could make more of an impact, and nothing could be more original or welcome, both in Latin America and in British industry and commerce, than for the new Prime Minister to visit Latin America, make an extensive tour and treat those countries seriously with a view to building a new relationship between Britain and Latin America. I hope that this will happen.
My Lords, I beg to move for Papers.
3.22 p.m.
Lord Shackleton: My Lords, I should like to congratulate the noble Viscount, Lord Montgomery. The whole House knows his total and devoted interest in South America. As president of Canning House for many years and having been involved with many other such institutions, there is no one better qualified to speak to your Lordships. Once again I find myself speaking first on that aspect, when I intended to make only a brief intervention on the Anglo-Argentine fisheries agreement. However, I must attempt to follow up some of the important points made by the noble Viscount.
I had been a Minister for one week when I was first sent to South America. I flew out to the inauguration of President Frei. That was a time of great hope in Chile before the disaster following the Allende presidency and the takeover of Pinochet. We hope to see Chile return fully to democracy now. I landed at Rio. I saw a lot of soldiers on the airfield and wondered what they were doing there. I thought that perhaps there was a review taking place. Suddenly the British Ambassador appeared and asked me, "Minister, are you ready to inspect the guard of honour?" I sat there in slacks and shirt. However, the very first guard of honour that I inspected as a Minister was from the Brazilian air force. I have a very soft feeling for the kindness that I received on that occasion.
Now is a time that we need to concentrate our interests much more strongly in South America. I shall not waste time speaking of the sad tragedies, the disasters and the awful affairs that took place in South American countries. I shall look at the more hopeful side. Now is a time of hope and of increasing economic liberalism. There is a movement towards democracy, although there are many areas in which there are shortcomings. No doubt noble Lords will speak on that situation.
I should like to refer to the development of economic liberalism which was described by the Venezuelan Foreign Minister, Reinaldo Figueredo Planchart, when he was at Chatham House in July. I am sure that the noble Viscount is well aware of that. That brings me to a country in which I declare an interest as an investor and a businessman; namely, Venezuela.
I regard Venezuela as a good example in South America of a country which becomes more and more understandable to the British. It is a working democracy and has been so for 30 years. There is much that one could say on the positive side in Venezuela, as indeed in other South American countries. Venezuela—it is notable with the ambassador here—is taking a lead on the environment. The environment comes up frequently. It is not just confined to a few European countries. Venezuela has introduced all kinds of regulations to strengthen environmental considerations. It has banned mining and cutting down forests in certain areas. Venezuela has taken a deep interest in the problems of the atmosphere and cutting down forests. It has set up a number of institutions. As in Brazil, I want to see further co-operation.

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The noble Viscount, Lord Montgomery, referred to the excellent co-operation on forestry that has taken place in Brazil. He mentioned particularly the work of the Royal Geographical Society. I shall not go into the details but leave that matter to the noble Lord, Lord Chorley, who is the immediate past president of that society. That is a most encouraging development. In a recent report mentioned today in The Times, a House of Commons Select Committee paid tribute to the president of Brazil in regard to the initiative that he shows about conservation in Brazilian forests where, as in Venezuela, there is great progress and great scientific interest.
As I said, I had intended to speak primarily about the Anglo-Argentine fisheries agreement. Noble Lords will be aware that I am very firm in my conviction that the Falkland Islands are British. But I welcome that agreement as an admirable example of co-operation and political wisdom on the Argentinian side. I should like to pay tribute to the Argentine negotiators for being responsible for a sensible and imaginative agreement. There is no time to describe it but the Falklands would obviously have liked to claim the 200 mile limit. The original security zone was set at 150 miles. There is a large area which is not protected by licence and where the fishing, of squid in particular, has almost drained that part of the ocean of biological resources.
There is now to be a joint commission to administer that area. It involves Argentina recognising the Falklands' interest and the Falklands recognising the Argentine interest. There is no suggestion that there is any danger to the Falklands' nationality. Both sides reserve their position. It is an agreement modelled, if I may say so, somewhat on the Antarctic Treaty. That is an example of which we ought to take note and express great satisfaction about. As a committed Falkland Islander I welcome it and hope that the Falklands will recognise that this is a step which will improve fishing and conservation and also contribute to Anglo-Argentine friendship.
3.29 p.m.
Lord Greenhill of Harrow: My Lords, I have long admired the noble Viscount's persistent campaign to make us realise the changes which are now taking place in Latin America. He is fully justified in his efforts. He is especially qualified to speak and by his personal efforts has certainly contributed to the renewal of more normal links with the Argentine, although the basic problem of the Falklands remains and could one day present difficult dilemmas.
I am glad that the noble Lord, Lord Shackleton, referred to the fishing agreement which has been reached. It is a very skilful agreement and one which diminishes the chances of such troubles arising. I am also very glad that the noble Lord, Lord Shackleton, referred to the activities of the Venezuelan ambassador in this country. Both he and his wife are graduates of both Oxford and Cambridge. He sets a good example in showing how we can make progress in our relations with Latin America.
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I find myself very much in agreement with what the noble Viscount, Lord Montgomery, says: I shall not need eight minutes to add to it. I sometimes find it hard to forget what I was once told by a former governor of the Bank of England. Although he is not in the House, I am glad that he is still with us. He stated some time ago that the British have lost more money in South America than they have ever made. Even if that were still true, I believe that it will not be valid by the end of the century provided we take advantage of the changes now taking place.
We have neglected opportunities in the past. However, our large investments were one of the financial casualties of World War Two. For a long time we were unable even to try to rebuild. Consequently, the continent fell very low in our international priority list. Very few of us remember immediately that Brazil joined the Allied Forces in World War Two. I remember standing in Naples harbour watching the Brazilian contingent disembark—I believe that that was in 1944. However, I can speak now only from my experience in the Foreign Office since 1946. For many years we had very few real specialists on Latin America in the office. If there were economies to be made in official establishments, as there always were, it was inevitably within the Latin American continent that they fell.
Curiously enough, in the days of Mr. Bevin an extravagant and elaborate new embassy was built in Rio, just in time to become a white elephant when the Brazilian capital moved hundreds of miles away to Brasilia. I do not think that the Treasury has ever forgotten that, especially as the building had to be sold at a low price. It now graces Rio as one of the finest buildings in the city.
However, generally speaking, it was always difficult to interest Ministers in South America. The late Lord Stewart of Fulham sensible as always, was, I believe, the first British Foreign Secretary to visit the continent on a comprehensive tour in 1966. As one would expect, at the time of the Falklands War the British embassy in Argentina was undermanned although the Franks Inquiry found that there had been little fault in its reporting.
I mention this past history only to ask the Minister to give an assurance that there is now a new attitude in the Foreign Office towards the Latin American continent; and that our staffs are adequate for both political and commercial purposes. There is now a Spanish-speaking Minister of State in the office and I expect him to give a new impetus in both areas.
The British Council, Canning House, to which the noble Viscount has referred, the British Overseas Trade Board and the BBC Overseas Service have important roles to play in supporting a new British effort in the continent. But it is up to British companies to take initiatives to expand their businesses. As the noble Viscount has pointed out, profound changes are taking place. He spoke of significant moves towards democratic government, although Central America still lags well behind. I expect the right reverend Prelate the Bishop of Manchester to refer to that later in the debate.

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As important as the growth of democratic government is the advancement of high technology industries in competition with the industrial activities of Europe and America. There is also a changing pattern of population—a large influx of Europeans and Japanese. It was news to me to be told that the largest Swedish city outside Scandinavia is in Latin America. The links with Europe, always strong, are becoming stronger. With the support of Spain and Portugal within the European Community, it is not surprising to learn that there is talk of trying to create a free trade area with the Community.
Similarly, President Bush has advocated a free trade area between Latin America and the United States; and a trade agreement with Mexico and the United States on the lines of the US/Canada trade treaty has been secured.
Another factor to be noted—one to which the noble Viscount, Lord Montgomery, referred—is the use of the Spanish language not only in the United States but world wide. Noble Lords will find, as I did comparatively recently, that many young people from the Caribbean area are learning the language and seeking opportunities to study in Venezuela and other Spanish-speaking countries. There were once significant British populations in a number of those countries. They formed an important commercial link with the UK.
One could go on pointing to important changes and developments. The lesson for us is to learn about them and to keep up to date with them. We need as many overseas markets as we can achieve. The Latin American continent could well be an important element in our future prosperity.
I greatly look forward to the maiden speech of the noble Lord, Lord Aldenham. I am sure that he will do justice to the importance of the debate.
3.37 p.m.
Lord Aldenham: My Lords, I should like to thank the noble Viscount, the Lord Montgomery, for his kind introduction and for asking me to speak in the debate. I have a personal interest. I was born in Santiago in Chile. In the past few months, I have learnt that my parents seriously thought of settling down there.
I shall confine my remarks to Chile—or to the west coast of the continent. I am proud to have Chilean nationality as well as British. Indeed, I nearly did my national service in that country but chose to go to university instead. However, I spent nine months in Chile when I was 18 and I saw a great deal of that country and its people.
Although I am not, and have never been, in business with South America, my family have been involved throughout the continent's independent history. My ancestor, Antony Gibbs, who founded the London house of Antony Gibbs and Sons, opened his first office in Lima two months after the declaration of independence. It first traded in Peruvian guano and later switched to Chilean nitrate. As a farmer, I am aware how important those new sources of fertiliser were in helping to raise agricultural yields in that
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country as the demands of expanding industrial cities rose. The exploitation and sale of these untapped resources brought much needed revenues to the Peruvian and Chilean governments. The profits helped the partners of Antony Gibbs to invest in Brunel and his Great Western Railway, to become model Victorian landlords, and to indulge their high church religions by restoring and building churches in Britain.
Chile, and its nitrate, became the focus of Antony Gibbs' trade. It leads me to one of Chile's most serious problems. It has been a one-product economy, first based on nitrate and then on copper. When artificial nitrate first appeared in the late 1920s, the economy slumped. In the same way, until recently, world copper prices have dominated the country's finances.
Most school children used to be able to recognise Chile on the map. It is the long thin country on the west coast of South America. The range of climate is extraordinary. There is barren desert in the north, but rich in nitrate, copper and other minerals, and with a sea rich in fish. There is a steadily increasing rainfall as one travels south, with odd variations caused by the north-south mountain ranges. As a result a great variety of foodstuffs can be grown ranging from the staples of wheat and maize; and beef, chicken and of course wine; to all kinds of fruit and great stretches of forestry. Chile's exports of fruit, vegetables wine, timber and timber products are growing fast. The tourist industry has great potential. There are fine sea beaches north of Valparaiso (although the sea is always cooled by an Antarctic current), skiing, fishing, marvellous countryside, excellent wine from pre-phylloxera vines, good food and a very exceptional, friendly welcome.
I had the good fortune to travel this lovely country from north to south, from Arica to Punta Arenas. I made the journey with agents of the family company. They took me round their districts where they bought and sold and bartered if necessary. They were not unlike the old pack pedlars, although they travelled in ancient pickup trucks. Business was a long affair of news and gossip ending with a glass or two of home-brew to seal the bargain. In this way I was able to see a way of life that probably had to vanish. It is a country of small-holdings eking out a living and large ranches which were not much more profitable. As I said, it was a poor country with one great source of foreign earnings—that is, copper—and therefore at the mercy of world prices. Lack of secure revenue led to a range of social problems which were so difficult to cure that they tended to be neglected by a series of traditionalist middle-class governments.
I too was in Chile at the time of the Frei Government, at a time of great hope. However, I come now to the tricky part in Chile's recent history. In 1970 Senor Allende became the West's first democratically-elected Marxist president with 40 per cent. of the vote. By 1973, he was dead. During his short period in office he tried to push through many reforms which he hoped would prove irreversible. In the long term they might have worked but in the short term they caused enormous disruption and total panic among the

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middle classes; the people who had been in management positions many of whom fled the country.
I do not believe that anyone can seek to justify methods and the excesses of the ensuing military government. Hundreds of bright, young and not-so-young people whom the country could ill-afford to lose also fled if they could. I was in Australia at the time and I met some of them there. I still recall the horror that I felt at the news of the coup. To me Chile was a bastion of democracy in the continent and the Chilean army was non-politicised. I could not believe that the stories were true. When further reports appeared about what was happening to Allende's supporters I thought that they had to be made up or at least exaggerated. Such things do not happen in Chile. To hear my semi-adopted country held up as one more model of totalitarianism, and pilloried for it, was more than painful. I felt like disowning it.
But after the first plebiscite in 1980 backed the Junta with 75 per cent. of the vote, the economy appeared to be on the mend. Now, in 1990, we have a new democratic government again. It is circumscribed, it is true, by several parting shots from General Pinochet. It has some terrible social and welfare problems as a legacy of 16 years when these were unheeded. The fact that Chile relies on imported oil for some 50 per cent. of its power requirements meant that inflation leapt from about 24 per cent. per annum to nearly 30 per cent. after the Gulf crisis began in August. But that level of inflation, itself partly caused by the outgoing government, is far lower than that of most of its neighbours which might be happy with that rate per month. Chile's trading base is now much wider, with copper representing only about half exports and new items of produce from agriculture, forestry and manufacture making up about one third. Foreign debts, with some external goodwill, appear to be controllable having been much reduced in the past seven years. Above all, the Government coalition, vulnerable though it is, enjoys the goodwill of the people who appreciate its good intentions.
Britain has long had a close relationship with many South American countries, and not least with Chile. Two of Chile's greatest heroes are Cochrane, one of my boyhood heroes, and Miller, his chief lieutenant. English is widely spoken, although one of my guides in the south, who I named Tommy Smith, spoke not a word of English. News of our royal family is as eagerly read there as it is here.
As the noble Viscount, Lord Montgomery, has pointed out, we have been looking for new markets in China and in Eastern Europe. These countries also present financial, practical and sometimes ethical problems to the investor. Chile is an old, well-known and welcoming area for trade and investment. I welcome the news that Her Majesty's Government are actively seeking to cement new relationships in this area. If a search for profitable business can also benefit
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a country which is seeking to re-establish its democratic roots, I believe that every effort is worth making.
I am most grateful for your Lordships' patience in allowing me to speak about a country of which I am very fond.
3.45 p.m.
Lord Rea: My Lords, it is my pleasure to congratulate the noble Lord, Lord Aldenham, on his maiden speech. I was delighted that he spoke about Chile. I have visited the country and appreciated the detailed and heartfelt description that he gave. It was delivered in a clear, non-controversial style and kept the House interested throughout. I hope that we shall hear more from him in the future.
I had intended to begin my speech by talking about Chile. In 1986 I travelled for two months through Latin America and visited nine countries. I started in Chile and headed north to Mexico. I travelled by bus, train, plane and jeep, staying with friends and in simple hotels. I was helped by Oxfam and the Catholic Institute for International Relations, both well-known non-governmental organisations. Earlier this year I was the guest of the International Planned Parenthood Federation as an observer at the second western hemisphere conference of parliamentarians on population and development. The conference was held in Quito in Ecuador. Subsequently I visited Guayaquil and then Mexico City.
During both journeys I visited health clinics and hospitals in rural villages and cities, including their slum or shanty town districts. I was deeply impressed by the friendliness and hospitality of the ordinary people. I was also impressed by their flair for colour and design, their music, the magnificent scenery, the remains of ancient civilisations and the beauty of the cities and cathedrals that were built by the Spanish in the colonial era. I came away deeply aware of the poverty of the people, particularly those of Indian origin. However, I was impressed by their strength and resilience, particularly of those tough bowler-hatted women. The design of their hats and skirts was based on an Andalucian model. A 17th century Spanish governor decreed that they should wear them because he believed that bare heads and legs were indecent. Those indigenous people have retained their dignity despite more than four centuries of economic and political oppression.
In recent years there has been welcome evidence that real, rather than surface, democracy has begun to emerge. However, the real power remains in the hands of large landlords whose holdings come from the large estates bestowed on immigrants from Spain and Portugal when their governments were encouraging emigration and settlement of the new colonies. Overtly or covertly the military backs the power of that landowning class.
Since the influence of Spain and Portugal receded a century and a half or so ago, the United States has taken on an increasingly dominant role, usually backing the military or landowning classes which have been in a governing position. American investment

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and finance has also become dominant. United States is the home of the "gringo". I am told that the reason for the word "gringo" is that American marines in various skirmishes in Latin America used to sing, "I'll sing you one-oh, green grow the rushes-oh!". The Spaniards understood the word "gringo" to sound like "green grow the rushes-oh". Because of its power the United States has become grudgingly admired but also fairly universally hated. The economic grip of the industrialised countries—which, though to a lesser extent than it used to, still includes us —has increased further since the debt crisis and the fall in commodity values over the past decade.
The debt burden of Latin American and the Caribbean was, according to the World Bank's tables, 474 billion dollars in 1989 against a GNP of 852 billion dollars. The debt amounts to half the total GNP. That debt has not decreased in recent years. Debt service costs are equivalent to 40 per cent. of export earnings. Obviously some countries are doing better than others and the region as a whole is holding its own better than Africa, but there it still carries a very onerous burden. It is not surprising that the invisible trade in cocaine is thriving, particularly in very poor countries like Bolivia.
Over the years political efforts seriously to challenge the economic dominance of the often very wealthy landowning minority and large foreign—especially North American—concerns have met with overt and covert measures to overthrow, as the noble Lord, Lord Aldenham, mentioned with regard to Chile, more liberal governments and to replace them with governments willing to preserve the status quo. Some of those have been, leaving aside Hitler's Germany, the most cruel and oppressive regimes we have seen this century. Some methods which they have used to gain or hold power have been spectacularly nasty. The United States has been involved in most of those counter-revolutionary activities and coups; for example, those in Guatemala, E1 Salvador, Chile and Nicaragua, to name only the best known. It is not for nothing that the CIA is represented as a skull in an SS style helmet in a well-known mural in the National Assembly in Quito.
The emerging democracies of Latin America are now held in the vice of the debt crisis. The restructuring of their economies, which has been insisted upon by the World Bank and the IMF, has made it virtually impossible to deliver the programmes of health, welfare and education which their populations ask for and need. That is why desperate and destructive guerrilla movements, such as the Sendero Luminoso—the Shining Path—in Peru, have had such an appeal, and why there are slogans everywhere such as the one I saw in Quito: "No paga la deuda externa!"—Don't pay the foreign debt." Democracy has an uphill struggle in the present economic climate and without better health and education the people of Latin America cannot advance and prosper.
As various noble Lords have said, there is a huge potential demand for goods from the industrial world, which includes the United Kingdom, which at present
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is held back because of the slowing of development caused by the need to service debt. The EC is becoming aware of its economic strength. We should take a leading part in assisting Latin America to "lift off" by offering generous aid for effective social and infrastructure programmes for those countries moving along the road to democracy. We are not so tainted with the suspicion in which Latin America holds the USA. There is a big opportunity waiting. However, simultaneously, we need to go much further down the constructive road to reducing debt, a road along which John Major took a small but useful step at the Commonwealth Finance Ministers' meeting in Port of Spain, Trinidad, last September.
3.55 p.m.
Lord Thomas of Swynnerton: My Lords, I too should like to thank my noble friend and kinsman Lord Montgomery of Alamein for introducing this debate which has already been both interesting and important.
I take issue with the overwhelmingly negative picture of Latin American relations with the United States given by the noble Lord who has just sat down. He mentioned a number of instances in which the United States is supposed to have obstructed Latin American countries on the path to democracy. However, if the United States was involved at all, it was merely assisting the process of democracy against regimes which he may find to be sympathetic but which happen to be on the Left.
The noble Lord instanced Chile, Nicaragua, E1 Salvador and Guatemala. There is no clear evidence that the United States was as a government involved in any coup d'état or attempted coup d'état in any of those countries, with the exception of its operations in Guatemala in 1954 and what happened—or did not happen in fact—in Nicaragua in the 1980s. The Nicaraguan Marxist regime was ultimately overthrown but I do not believe that it can be said that that was as a consequence of the CIA or the United States Government's operations. In some respects that seems to me to reflect the curious mixture of idealism and hopefulness which characterises so many on the Left in Western Europe in relation to Latin America.
A friend of mine, Carlos Ranhel, committed suicide because of his despair at not being able to put over his point of view. He wrote a book called From Noble Savage to Good Revolutionary which indicated that Latin America had always played a part in the imagination of Western Europe or the United States—an extension of Western Europe in those terms—which bore very little relation to reality. The noble savage was neither so noble nor as savage as Voltaire considered; and that played one part which was balanced by the image of a Latin American revolutionary in the 1960s—a saintly warrior fighting against purportedly evil regimes in the interests of Utopia. However, in many ways that was a fantasy deriving from ignorance.
Ignorance has certainly been an important element in the attitude of Western Europe and Britain towards Latin America. I believe that Jonathan Cape offered a

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dictum and good advice to any would be publisher just starting his business career: in your first year never publish a book about Latin America but always publish a life of Nelson. Perhaps that is still a typical characteristic of our attitude towards Latin America in the 20th century.
In other centuries it was very different, particularly in relation to Britain but also in relation to other European countries. Britain was the dominant power in Latin America between the beginning of the 18th century and the beginning of this century. Many of your Lordships will recall that for a time Argentina was regarded as the sixth dominion; and Latin American place names understandably play a part in the British literary and artistic imagination. One can think of such names as Portobelo and Nombre de Dios. That point is very clearly made. Every English novelist in this century of any quality, from Conrad to Huxley, from Graham Greene to the author of Under the Volcano, went to Mexico and was inspired by a visit to that country.
On a more mundane level though a level which Members of your Lordships' House will perhaps recall more vividly, the British founded navies and insurance companies and built railways, public utilities and businesses throughout Latin America. The seated figure of the first Lord Cowdray at the Port of Veracruz—which he built—is in some ways symbolic of that association, as are the numerous plaques in remote squares of long forgotten provincial capitals which we see when we travel in Latin America. They commemorate the role played by British citizens in the independence of Latin America at the beginning of the last century. The fact that many of those volunteers for liberty were Irish is perhaps a reflection of the mismanagement of our affairs rather than anything else. Nevertheless, one will find such plaques everywhere, from Caracas to Argentina.
It was not simply one-way traffic. Lord Curzon in your Lordships' House in 1919 said that victory had been brought to Europe on waves of oil. He was referring to the oil brought from Mexico by Lord Cowdray. Nor is it just a matter of big issues. Anyone with a twinge of historical sense will be recalling next week that the principal items making up his Christmas dinner are basically Latin American products. I refer to the turkey, the potato and the tomato; and if he is lucky he may smoke a cigar and eat chocolates. If he is very grand perhaps he will be able to help himself from something which we call Georgian silver but which was basically Mexican silver. If he is fortunate enough to dine in a panelled room the odds are that it will be Nicaraguan mahogany by which he will be surrounded.
The contributions of Latin America to Britain and Western Europe have not been entirely positive. The ancestors of any hereditary peers may have had their lives foreshortened by the great Latin American contribution to Western European diseases, namely syphilis. Many may say that that is a fair revenge for
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Western Europe's contribution to Latin America of measles, influenza and through the slave trade of malaria and yellow fever.
What relevance has all that to the present situation? It is always difficult to relate historical experience to contemporary practicalities. I believe that those who trade with Latin America are helped by the knowledge of our historical past and by being reminded of the colossal role which British traders—capitalists and investors—played in the past, not to speak of the volunteers for liberty to which I referred.
It is also important to be reminded that Latin America in every sense except the purely racial is a department of European culture. Latin America is hardly a part of Europe, though I confess I once heard the great French historian Braudel claiming that Brazil was essentially a Mediterranean country. Nevertheless, it plainly is a part of Christendom —a word we once used as a synonym for the West. That is how we should place Latin America, rather than as a part of the third world which has no institutions and no connection with Western culture.
I recall that during the Falklands war I said with some reluctance to a banking friend of mine, "Whatever you may think about this conflict, it is the first war won by the West since 1945". His reply was, "It is a great pity that it was also against the West". In some ways that illustrates the position of Latin America in our society. I feel that in the future Latin America will play a very positive part in what the present US Secretary of State spoke of as evolving a new world order. That is a slightly ominous phrase but I like to think of it in the most positive sense.
As my noble friend and kinsman pointed out, most Latin American countries are now democracies; most subscribe to the principles of the free market. Many have given good examples in that respect, in particular President Salinas of Mexico, who visited London and made a speech in this House earlier this year. Most Latin American countries have been remarkably persistent and good members of the United Nations. I suspect that they will play a considerable part in the future. We must not forget that both Mexico and Argentina—to take countries at the extreme ends of the Latin America geographical spectrum—are sending contributions to the Gulf.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, I hesitate to interrupt my noble friend in his very stimulating and interesting speech but perhaps he could consider the time.
Lord Thomas of Swynnerton: My Lords, I do so and sit down.
4.7 p.m.
Lord Walston: My Lords, first I offer my brief but sincere thanks to the noble Viscount, Lord Montgomery, for giving us the opportunity to have a debate on this enormously important part of the world, and for introducing the debate in such a brief, concise and stimulating manner. On a purely personal note, I should like to congratulate the noble Lord, Lord Aldenham. I was an old friend of his father and

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we discussed the Caribbean and Latin America on many occasions. The noble Lord made an admirable speech which gave a lovely picture of a lovely country. I wish we could have heard more, and I hope that we shall do so.
I shall confine my remarks to an area which, not surprisingly, has been entirely neglected in this debate. I refer to one of the outposts of Latin America; namely, Cuba. It is an extraordinary and potentially important country. I had the pleasure of visiting it on several occasions. The last time was with the noble Lord, Lord Selsdon. We could tell many stories about it; but that would take too long and may not be very helpful.
As we all know, since the Castro revolution Cuba has been an outcast in the whole of the Latin American scene. It should not be an outcast. I shall not go into the pros and cons of the policy of the United States towards Cuba. However, it is worth remembering that in the pre-Castro days Cuba was ruled in the final instance—the last of a longish line—by a man called Batista. He allowed and encouraged the most appalling social injustices, cruelties, inequalities and corruptions. Whatever else Castro may have done or failed to do, he removed those injustices. He created a country where, admittedly, there are political prisoners—I do not condone that for a moment—and only a modified form of democracy, which I should like to see greatly extended, but a country where a lot of potential has been developed.
A far greater social equality has been introduced and education has been increased enormously. The number of people going on to higher education and universities has gone up by leaps and bounds. The countryside has been developed with better housing, schooling, roads and transport. At the same time, Cuba now has a health service and a medical profession which is the envy of many far more developed countries in the world and certainly the envy of many countries in Latin America. Therefore, there are many pluses in addition to the aspects we are more inclined to hear about.
There is a point worth remembering. Your Lordships may have seen in the newspapers recently the efforts that are being made to improve and preserve the environment, particularly the historic buildings in Havana and elsewhere. The country is not entirely materialistic or one of these pseudo-communist countries which prove the failure of that type of economy.
As I said, I shall not seek to balance out the pros and cons, but I remind your Lordships that Cuba is a country of about 10 million people—a not insignificant country that has great resources. It has an educated and healthy population. It has a good internal communications system. Cuba has resources in the form of fertile land with a potentially important sugar production, tobacco production, and so on. It has attempted to diversify and to some extent has succeeded. It has minerals and a certain amount of industry. In other words, one can say that Cuba is poised on the brink of an economic take-off. However,
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it cannot take off while it is isolated, above all, by the United States and to a large extent by its other, on the whole, poorer neighbours.
Until recently, Cuba has subsisted on the charity of the Soviet Union, for obvious reasons. It has been feared by the United States for exactly the same reasons, and that is why we have had such episodes as the missile crisis, the Bay of Pigs, and so on. That is all history. The cold war is now coming to an end. The influence of the Soviet Union, in so far as it had any influence in Latin America, has disappeared. The threat to the United States is no longer there, so surely the time has come for the past to be forgotten and Cuba given the help that it needs—and, my goodness, it needs a lot of help particularly with its sugar industry.
I remind your Lordships that sugar is the kingpin of the Cuban economy. It is one of those peculiar commodities which does not entirely depend on a free market. Not more than 15 per cent. of the world's sugar production is sold on the free market. The other 80 per cent. to 85 per cent. is the subject of preferential treatments, the common agricultural policy, import allowances and various other arrangements of that nature. Now that assistance from the Soviet Union is fast disappearing the plight of Cuba, if left to itself, will be little short of disastrous. The effect on that part of the world can only be bad on what one can almost call a poverty-stricken slum—not that it is that yet, but it will become so unless the West takes some steps to replace the enormous assistance that has been given by the Soviet Union.
I urge Her Majesty's Government to take such initiative as they can in bringing Cuba into the comity of Latin American nations, of their own volition and through the Economic Community; certainly through Spain and, to a lesser extent, France. There will be no lack of allies. Above all, the Government must use such influence as they have on the United States to draw a line under the events of the past 30 years and to look on Cuba as being potentially an extremely important area both for the economy of Latin America and for trade with this country.
4.15 p.m.
Lord Selsdon: My Lords, I thank my noble friend for introducing this debate but I wonder why it is necessary. With such a vast continent and all its resources, why do we need to draw attention to it? Possibly it has something to do with history, and we have had a history lesson today. One must ask: why did we have such a close and developed trading relationship in the past and why not today?
Before the start of the debate my noble friend Lord Orr-Ewing passed me a note which I hope my noble friend will treat as a compliment if I repeat it now. He said that I should remind the House that in the 1920s it was said:
"Antony Gibbs made their dibs, from the turds of foreign birds".
I take that as a text because in those days we went abroad to buy. We did not go to sell. We went to countries that had natural resources that could help

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our industrial revolution, to develop and expand our own trade and to add value. However, as the world demand for products shifted so countries like Chile, which had one or two products, faded away and countries that had failed to industrialise or develop lost their appeal to the buyers. Those buyers were from many great families and they took great risks. They made contributions to many of the countries of the world, but they fell away and the sellers came along.
I was always told of the philosophy that if you wished to sell a product you never tried to sell but always bought; that you should never let anyone know whether you were a buyer or a seller because there was a big difference between bid and offer. If you wanted to know whether you should buy or sell you should offer your most prized possession for sale and if everybody wanted to buy it, you sold. If nobody wanted to buy it, you bought.
The prices of commodities and products throughout the world today are at an historic low. We assume that they are so low because they are no longer desirable; or perhaps they have had their day and no added value can be created. I know not the reason, but when the sellers came and endeavoured to sell products that the buyers did not want those of us in the banking world were not far behind because trade and finance are linked. We came along, encouraged by governments of all political creeds, colours and religions, and we offered money to people to buy products that they did not really need. They did not know what to do with them. Vast white elephant projects emerged. Perhaps again historically, if you consider Latin America, the buying came first and with it came what today are considered white elephant projects but in those days were the great industrial infrastructures that were set up for the benefit of the countries concerned.
Following this wave of what I deem to be irresponsible and misguided lending, based more upon a lack of knowledge than any foolish attempt or ill will, we created this vast mountain of debt, to which the noble Lord opposite referred. It is a debt of which 40 per cent. is unlikely to be repaid. At the same time, in the developed financial markets of the world we did something that historically was perhaps equally unforgiveable. We floated currencies all in one go. The initial attempt was to float for a short period of time to stabilise one country against another. Gradually that floating caused problems and differentials in exchange rates. It created debts in the wrong place and, with them, interest rates rose to combat inflation.
The purity of trade fell away, because all trade historically comes first, before finance. However, even before that comes politics and if there is not an adequate political environment in which to trade, traders will not trade—neither buyers nor sellers. Over time in Latin America we have seen such political shifts that there have been fears and nervousness throughout industry and all aspects of commerce. That nervousness has led gradually to a complete and utter lack of knowledge among the managers of
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industry who seldom visit the countries. Indeed, that applies to Ministers in Her Majesty's Government. I hang on to the coat tails of the noble Lord, Lord Walston, from time to time regarding countries about which he is knowledgeable. He is the only Minister who has visited Cuba. Even then the Foreign Office said that he must go in a private capacity.
I have been there on many occasions. I find it a strange and interesting country with almost two faces. One face shows the barriers and shutters up against the United States and on the other they are down. It is said that it is impossible to get there. However, I have one privilege in life in that I believe I hold the world record for the journey from London to Havana and back to London. I was telephoned and asked to go to lunch. I took Concorde to Miami and quite happily flew from Miami and over Valadesa and back the next day.
The noble Lord, Lord Walston, and I warned the Cuban Government that if they spent all their time in Moscow's pocket in due course countries and attitudes would change and Cuba would remain isolated as perhaps it is today. Hence there is an opportunity for this country to increase its trade there. Before we can move much further there is a need for closer ministerial relationships and understanding with all countries. Only when the political climate is perfectly right will industry follow. Industrialists—or the private sector, as we call it these days—pay far more attention to politics than politicians believe. It is vital to know that there is a stable relationship between these countries and all the countries of Latin America with which we wish to trade.
It is equally vital that we sort out somehow at government and international level the question of indebtedness. To a third world country it is practically impossible to sell anything meaningful these days without some form of finance and an acceptable schedule for repayment. Too many countries of the world have had the unpleasant experience of being unable to pay their mess bills and then being called to some smart club known as the Paris Club where they are kept waiting by officials for weeks or months before trying to reschedule the debts. That is a very unpleasant experience for any country and particularly for its Ministers.
When my noble friend replies today can he let us know the view of the Foreign Office and Ministers at the moment? To some extent we have a Minister for Latin America. Will he be visiting Latin America shortly and will the Government be making a greater effort? I hope so.
4.22 p.m.
Lord Molloy: My Lords, I offer my sincere congratulations to the noble Lord, Lord Aldenham, for a maiden speech which was almost unique in that he could speak for two countries with deep and genuine feeling. He therefore made his maiden speech attractive and informative. It was worth coming to the House today to listen to the noble Lord going back over the history of his family and of his own personal feelings. He created some kind of link between our

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island, Chile and other Latin American states. I also wish to express my appreciation of the Inter-Parliamentary Union, British branch, for the work it has done in assisting us and for the work that it does generally in helping us to keep international contacts throughout the world, particularly in Latin America.
I join the noble Viscount, Lord Montgomery of Alamein, in expressing appreciation of Canning House. It has made a remarkable contribution to most countries of Latin America on behalf of our country. It has helped and encouraged the establishment of good trade relations which has always been preferred to aid. If Canning House can carry on its efforts, that will be to the advantage of both Latin America and this country.
Our association with the states of Latin America leaves a great deal to be desired. The noble Viscount, Lord Montgomery of Alamein, seeks and gives examples of change and of the way in which to improve our relations with Latin America. He is the only person I know who can use his status as a president of our association and combine that with all the urgency of a Chief Whip when a matter is on the agenda concerning our group and any part of Latin America. He deserves our special praise because he keeps us all on our toes. He also ensures that we are directed to the places where we can get proper information.
As I understand it, in a month or two, President Aylwin will be taking over in Chile. That country is striving to remove a distasteful past, and it is succeeding. The 1989 reforms of the former military constitution are being changed, but there is still a great deal to do. I hope that our country will help Chile in its endeavours to create a just and fair country and to establish its own form of democracy which is acceptable to all others.
These days we cannot mention Brazil without thinking of the great problems of the rain forests. The future of this planet could depend on that country. Therefore I should like this country to have more to do with Brazil. At the moment Brazil is still suffering from a degree of lawlessness. There has been an awful report From Amnesty International. However, Brazil is sincerely struggling to improve its democracy and social reform programme; but it has problems. We can help Brazil by understanding its problems. For example, we can help that country to try to get rid of its drugs problem. Britain is in a special position to do something about all those problems. Brazil is the largest state in South America with a population of 141 million most of whom I understand to be Roman Catholic. It is following the democratic path which began in 1946, and that democracy is still developing. As I understand it, the collapse of the Cruzad plan in 1987 was succeeded by the 1988 constitution and social reform programme, and that shows encouraging headway.
To turn to Argentina, I hope that after the Falklands episode the diplomatic ice is thawing. As I have said on previous occasions, travel restrictions have been removed. I understand that Mr. Hurd, our Foreign Secretary, has had useful discussions
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regarding the South Atlantic fisheries. There has also been the Madrid agreement. I also wish to compliment Mr. Tristan Garret Jones on his recent visit to Argentina. He spoke a great deal of good sense on behalf of this country for the encouragement of Argentina.
I wonder whether the House would consider sending me, my right honourable friend the Leader of the Opposition and the Chairman of Committees, to Patagonia because we have something in common which I believe will be of great advantage to that part of Argentina. If that did not enhance the reputation of England, Scotland and Ireland, it would certainly allow Wales once more to make a very valuable civil contact. People have left my own little country and have gone to Latin America and they are particularly admired and respected.
In Nicaragua there is a serious challenge to peace and democracy even after 10 years of civil war. International help through lending agencies can combat poverty and inflation, and avert disaster. When the Minister replies, I hope that he will refer to this matter because there is a serious situation in that country. From my own researches, I am of the opinion that the mass of ordinary people would enjoy and would know how to use the form of democracy that we enjoy if only they could have some help.
In El Salvador, President Cristiani is under siege. He has done reasonably well. Cuts in the army have been urged. In my judgment, the aid package from the United States should be renewed. One has in mind the awful international condemnation concerning the death squads and the slaying of innocents. However, it does not help to shut one's eyes to these matters and to withdraw totally. That is the wrong thing to do. The British, Americans and others of the great democracies should try to get involved in E1 Salvador in order to show that country that it is going the wrong way. If we are prepared to do that and give practical economic and moral assistance, that would make a large contribution.
Guatemala faces charges of sham electoral processes. All these matters are worth pointing out because if there is a sincere desire to see a better relationship between the Latin American countries and our own, first and foremost we should acknowledge that there are certain things that we do not like; but, nothwithstanding those factors, we wish to work, help and trade with them. The present violation of basic human rights in Guatemala should be challenged by us. We should allow parliamentary delegations to go there to stress that point. We are particularly good at that kind of function.
In Peru I understand that President Alberto Fujimori is a member of the Japanese ethnic Christian minority. It is amazing that in this so-called Latin America, where all kinds of terrible things are going on, someone with that background can become president. I am quite sure that if the noble Lord, Lord Aldenham, had been there he would have been a president by now—and easily the most popular one of all time. Peru has to bear an enormous burden of

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foreign debt; and of course we realise that is plaguing it. Perhaps the Minister can examine some endeavours or initiatives which would help Peru in trading.
In conclusion, I should like to say a word about Latin America. I owe most of my knowledge about Latin America to the endeavours of the noble Viscount, Lord Montgomery of Alamein, and I am very proud of being able to assist him because he is so worthy of being assisted. He is certainly a very good chief whip and a very good leader; but the fact that he is always successful is reflected in the number of times I have to get up on my feet to assist him—or should I say to help him?
Latin America needs the support of Europe and the United States of America. Through the United Nations and other international organisations I hope that we shall be able to become involved in the desiderata in order to build a civilised and healthy Latin America which we all want. The way has been indicated by the noble Viscount, Lord Montgomery, and all we have to do is to back him up and ask the Ministers to do likewise. I am sure that would be good not only for Latin America but also good for Great Britain.
4.31 p.m.
Baroness Gardner of Parkes: My Lords, I too am a great admirer of the noble Viscount, Lord Montgomery, and I am grateful to him not only for introducing this debate but also for the excellent advice he gave me when I was setting out for South America this year. I suppose that my interest in Latin America stems from being an Antipodean myself. It is also related to the fact that my father, as a young Member of Parliament in the New South Wales Government at the time when the Brazilians withdrew from Australia, was asked if he would take on the job of honorary vice-consul for Brazil. That happened in 1920 and time wandered on, and he still retained that office until the day he died in 1949. It was many years after that before the Brazilians reappointed someone to a new diplomatic position in South Australia.
My interest has been doubled by the fact that this year I have taken on the United Kingdom chairmanship of a children's charity concerned with fostering children, which is called Plan International. We do a great deal of work in South America and I was able to combine my attendance at the inter-parliamentary conference in Uruguay with a visit to see work in the field in Ecuador.
Ecuador is a fascinating country because you can stand with your feet on either side of the equator and see right above you snow-capped mountains. It is hard to believe that there can be such a contrast, with the snow there right on the equator. I visited two projects. One was in Canai, which was in the hills, and the other was in Guasmo, a slum area, which was mentioned by the noble Lord, Lord Rea. The Canai project was very much a rural one, in very mountainous country. People there were shown how to grow various vegetables. Indeed, they asked us what they should do with broccoli after they had grown it. They had grown
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it very well indeed but they did not know quite how they should treat it. They were also having lessons in producing more interesting food for the population so that they could have better nutrition.
I was intrigued to see the hat-making and to learn that most of the hats we call panama hats in this country are made in Ecuador. Of course a lot are also made in Mexico. We saw people weaving with incredibly nimble fingers the most complicated and fine hats, starting with 24 strands and gradually adding in more and more. They explained to us that for their raw materials they have to pay 20 US cents and that it takes them five days to get the hat to the point at which they can pass it on to the next person, who finishes the brim. For five days' work they receive 80 cents, and when you think of the prices people throughout the Western world pay for those hats you realise that there are a lot of other people making money along the way.
Guasmo was a complete revelation to me. This had been a swamp area and people had squatted there and colonised it: it was an area that was almost completely uninhabitable, one would have thought. Our organisation had been able to put in hard core, so that instead of walking through mud you were able to walk along a road, but the houses still had to be built on stilts in most cases. I have called them houses, but really they were just shacks.
However, it was fascinating to see that in the small bamboo shacks of three rooms people had given up one room to create homes for help and to make child clinics available for mothers and babies. It rather puts our National Health Service to shame, but they had a 95 per cent. successful immunisation programme of the children in that terrible area. There was no running water: people had to buy water which was brought in on tanker trucks. It took one-quarter of the family income just to buy enough water.
I had a meeting with the vice-president who explained that the World Bank was prepared to give them the money to run a pipeline. I hope that will be done. But when we went away people told me that prospects were really very limited. There are such enormous vested interests in the water supply that we may never really see the pipes there.
My trip through South America coincided with the time when the Minister, Tristan Garel-Jones, who has been referred to, was making a visit. I should like to place on record the great credit that he received as the first Spanish-speaking Minister ever to have represented this country in that part of the world. It made such a difference that he was able to communicate directly with people. I would remind your Lordships that in this House we now have Spanish-speaking classes. I found that even the little I had learned was of enormous benefit to me.
I went also to Peru, but just as a tourist. There I was amazed to learn that before the new government took over—and I have great hopes of them—inflation during the previous year had reached 14,000 per cent. We simply cannot contemplate inflation of that dimension. One friend I met told me that she had gone

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for a meal one evening and the price was 10 US dollars. She went the following evening for the same meal. When she arrived the price was still 10 dollars but by the time she had finished eating it had gone up to 25 dollars.
Peru has about 400,000 tourists a year: that is only 1,000 a day in a country which so many people would love to visit. However, we have all heard the stories about personal safety, although we ourselves had no such problems. When I was about to set off I said to the noble Viscount, Lord Montgomery, that I believed it was rather dangerous and he said, "It wouldn't stop me." That was good enough for me. I went on that basis and we had no trouble at all. In London, we have 20 million tourists a year: 50 times as many as Peru has. Really, Peru desperately needs the income that more tourists could bring to them.
All the people in the Andean area are industrious; they are interested and keen to learn. They are willing; they are never idle. As they are walking between their farms and where they sell their goods, which is often a long way, they are weaving or knitting. You also see them carrying enormous gas cylinders. We have to appreciate the work and the willingness of these people, but stable government is the most essential thing. Democracy is of course the answer for them. They also need a stable currency. The noble Lord, Lord Selsdon, mentioned stable relationships between countries. These will come when we have a stable relationship and a stable situation in the country itself.
I would never underestimate the value of co-operation between the developed and developing countries. The ODA has been very good in funding projects done by our organisation overseas. People in this country who give voluntarily, through the Government or through overseas development agencies, should appreciate that their money is put to very good use: not a penny is wasted. I look forward to greater co-operation between the developed and the developing countries.
4.40 p.m.
Lord Chorley: My Lords, I must begin by apologising to the House because I have not been able to listen to most of the debate today. Unfortunately, I was detained on other business in a Select Committee. In particular, I regret not having been present to hear the speech of the noble Viscount, Lord Montgomery. I believe that all of us would agree that no one knows Latin America better than he or has such a wide experience of the area. However, I shall read the report of his speech, and indeed of all the others, with great interest.
For my part I cannot claim to have any real knowledge of Latin America, and certainly nothing like that of the noble Viscount. I suspect as a nation that we do not have the same sort of knowledge about the area as we have about Africa, Asia and indeed the old and new Commonwealth. We also enjoy a warm relationship with the United States. Yet historically in the 19th century we had extraordinarily close contacts in the area. We had huge investments there, such as the railways. Moreover, Argentina was thought to
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have better prospects than the USA. It seems surprising today that that should have been so, but it was indeed the case.
Latin America is a huge continent, as I am sure has already been said. It has a great history and civilisation. The first time I visited the area—and this, I suppose, shows my historical ignorance—I was surprised to note that it was colonised a hundred years before North America. Historically it has close ties with continental Europe. However, for the most part it has remained a developing economy, if one can generalise about such a vast continent. It is also true that it has some major pockets of fully industrialised industry.
In short, Latin America is clearly a continent of great importance. It is a continent with a huge richness of natural resources—both exploitable resources and what one might call environmental resources. Therefore Latin America —and this may already have been said during the debate—will be a major player in how we manage our planet in striving to arrive at the right balance between exploitation for economic progress on the one hand—that is, in the narrow sense—and conservation on the other and in striving to arrive at what we now call sustainable development. That is no easy task for a continent with rather low standards of living.
I turn now to my main theme. In no case is this development more important or more acute than in the case of the tropical rain forests. We should remind ourselves that two-thirds of the world's remaining rain forests lie in Latin America and one-third of the total lie in Brazil. We all know of the threat to the rain forests. The destruction is not just from misguided attempts to convert the forests into cattle pastures, often solely for fiscal advantage; it also comes from large-scale logging for Western markets, from huge hydro-electric power schemes, from large-scale mining enterprises and from road building.
The damage caused to the area by such schemes is not just the loss of trees. There is also the loss of bio-diversity. I believe that it is true to say that Amazonia is probably the richest area biologically in the world. It is an area which may be of considerable importance to the economic development of natural pharmaceutical products. There is little doubt too that destruction of these forests on a wide scale may have incalculable—I use that word in the strictest sense—effects on the micro-climates of the area; that is, the local climate. It is well known that slash and burn destruction for cattle ranching and so on adds to the problem of greenhouse gases and global warming.
All that is well known and well documented. However, what is less certain is the rate at which destruction is taking place. The figures which are published vary hugely. That is partly because it is no easy thing to measure. Indeed, there are problems of definition and of sheer measurement. It is interesting to note that these problems were fully discussed and explained at a recent meeting of the Royal Geographical Society by a senior Brazilian scientist, Dr. Barboza. His best estimate is that to date about 6 to 7 per cent. of the forest has been destroyed. That

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figure is in fact lower than most people expected. But, nevertheless, we should remember that the catchment of the River Amazon, where the main forest is situated, is as large as Western Europe. It is a huge area, which I have flown over. I am sure that anyone else who has done so will agree with me on that point. Indeed, you fly for hours and see nothing but green trees.
The Brazilians have been very sensitive to Western criticism. I believe that that is quite understandable. No poor country likes to be told what to do about managing its affairs by a rich country, partly for the benefit of that rich country. I suggest that we in the West have hardly been very tactful in the matter. However, I believe that attitudes are changing. Britain has been important in bringing about this change. As a past president of the Royal Geographical Society, I should like to point out that the society, through its Maraca Scientific Project of 1987–88—incidentally, the noble Viscount, Lord Montgomery, was chairman of the committee which oversaw the project—has been an important factor in improving relations.
Leaving aside the important scientific work carried out by both British and Brazilian scientists, the Maraca project engendered a really good trust between the two sides. No political statements were made. The first project conference took place in Manaus on the Amazon and everyone spoke Portuguese. The scientific agenda was worked out with our Brazilian colleagues, and so on. All in all it was a skilled piece of scientific and cultural diplomacy, if that is the right phrase, by the leader, Dr. John Hemming. Moreover, it led the way to a fruitful visit by the then Minister for the ODA, Mr. Chris Patten, and that in turn led to an intergovernmental accord. I believe that no other country has reached a similar agreement with Brazil. Therefore, I very much welcome the initiatives of the ODA and the work which it is beginning to carry out in Brazil.
As I am sure has been mentioned, Brazil now has a young and energetic president who told us at the RGS last year that he was determined to stop forest clearances in Amazonia. He has appointed an equally determined, energetic, very "green" and rather remarkable environment minister. Only last week we heard that the murderers of that great rain forest folk hero, Chico Mendes, had been convicted.
Those are all encouraging signs. Moreover, there are other similar changes of attitude in other Amazonian countries. For example, Colombia has a good conservation record. In February I visited Venezuela and had a meeting with the president. I was most impressed by the lively and real interest which he took in environmental matters in his country. He struck me as being very well informed and, indeed, he has a good track record. Incidentally, the Venezuelans have in London as their ambassador a man who has a great reputation in environmental matters and who is a true friend of the United Kingdom.
I must now bring my remarks to a close as I see that my time limit of eight minutes has almost expired.
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However, I do so on a hopeful note—something which I suggest would not have been possible two or three years ago.
4.48 p.m.
The Earl of Radnor: My Lords, I am probably very badly equipped to talk about Latin America, which is the subject of the debate. It is an enormous continent which has tremendous variety, enormous potential and very real riches. Therefore, I shall concentrate upon one country about which I know a little—the Argentine. However, before I do so I should very much like to congratulate my noble friend Lord Montgomery on bringing the matter before us today, albeit in a debate of only two-and-a-half hours. He has done much to bring that continent to our notice, which must at times have been hard work for him.
Picking up odd remarks which have been made during the debate, it seems quite unusual that Ministers, even junior Ministers, do not visit Latin America. I shall reinforce the remarks made by one noble Lord. I should like to know whether anyone will be going to any of these countries in order to make contact. I do not see how anything can move forward happily if people in the two continents do not have contact with one another. That leads to inertia.
I shall outline my interest in the Argentine. I worked there for two years as a young man in the days of Peron, which were not perhaps the happiest for that country. We were having meat talks and trying to get trade going between the two countries on the basis of exchanging goods from this country for meat, of which in those days we were short. It was not a happy negotiation. Since then, to put it crudely, things have gone from bad to worse, culminating in the unfortunate, but mercifully over, war.
I built a house in the Argentine. My wife carries an Argentine passport as well as an English one. I married into a considerable Argentine family. I have many friends there, and many Argentine friends here as well. Now that things are going so much better between our two countries and we have welcomed Senor Cámpora the Argentine ambassador and sent our man to Buenos Aires, it is most important that we build as firmly as possible upon all the positive achievements and try to put behind us—not forget, because it is impossible to do that—the Falklands war.
The noble Lord, Lord Shackleton, said that he was a Falklander. I would not say that of myself. I believe sincerely in the self-determination of people. Trade is always the best option and it should be developed with the Argentine after the happy new beginning. The fisheries agreement between the Argentine and this country is beginning to be seen to be working well. I understand that the agreement was an original one. It had a great deal to do, as has already been said, with the careful negotiation that was carried on by both sides when people did not take immovable positions. Everyone on both sides should be congratulated on that achievement.
I dare not mention the Antarctic in front of the noble Lord, Lord Shackleton, but I gather that there is also considerable agreement in that area. No one

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has mentioned that at the moment the Argentine and ourselves are allies in that there are two Argentine battleships in the Gulf with ours and those of other nations.
I cannot say that we should forget the debts—I am afraid that in the end some of them will have to be forgotten if anything is to happen—but if there is to be trade there must be a proper milieu in which it can take place. That brings me to what I believe is one of the most important points—the failure so far of the GATT round. If the world divides into blocs, with protectionist barriers around Europe and America, including South America, the Cairns Group, of which the Argentine is a member, it will be even harder for the whole of South America and ourselves. I speak as a farmer in this country who will probably suffer considerably if the subsidies that we have enjoyed through the CAP disappear. The whole world will suffer a great deal more if the talks, which I believe are to be held again on 15th January, are unsuccessful.
I ask my noble friend the Minister to reassure the House that every effort will once again be made to keep the Uruguay round going because it is of the greatest importance not just to South America, this country and Europe but to the whole world. Will he tell us whether there is any possibility of our taking a less firm view of the CAP, which seems to be one of the two stumbling blocks?
I have just about come to the end of my time. I have managed to make one or two points. I have one to make to the noble Lord, Lord Molloy. He does not seem to realise—there is no reason why he should—that my house is in one of the Welsh enclaves that he described. He did not mention that the Welsh eisteddfod was won by a 16 year-old Argentine girl who came from Trelew.
4.56 p.m.
The Viscount of Falkland: My Lords, I have no direct knowledge of, or contact with, Latin America although the islands, which your Lordships know well, bear the name of a remote forebear. I have however many friends in Latin America, and thanks to my friend—if I may call him that—the noble Viscount, Lord Montgomery of Alamein, I have learned a good deal over the past few years. I thank him for giving us another opportunity to discuss the whole subject of Latin America and to learn so much from the contributions of your Lordships.
In 1973 I was returning from a business trip to New York. Being of a chatty disposition, I spoke at some length to the person occupying the seat next to me. We had a most interesting talk: he turned out to be the Nicaraguan ambassador to Rome. He described his country and of what it consisted. He said that his greatest worry was the great divisions between those who held most of the wealth—several families—and how the transition to a peaceful new order would be achieved. We know the sad happenings of that country. It has unhappily been the pattern in large parts of Latin America.
I congratulate the noble Lord, Lord Aldenham, on an excellent maiden speech. It was most moving to
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hear his description of the effect on him, his family and friends of the terrible disaster that occurred in Chile when that country was torn asunder by the political polarities that existed. We are encouraged when the noble Viscount, Lord Montgomery, tells us that the rhetoric of nationalism has decreased markedly. There has been political improvement overall in many Latin American countries. Economies are by and large better managed; but many countries are still burdened by the enormous debts with which they were shackled when so much money was available from the Middle East through private banks. The money was misdirected. Such large amounts were loaned in such an ill-judged way in many cases that countries are still carrying the debt. I shall be interested to hear whether the Minister refers to the Government's attitude towards the reduction of debt liabilities in Latin America and how we can influence some of the commercial banks in that area.
The party which I represent has a particular interest in the environment of Latin America. We are all interested in it; we know the important part that Latin America and particularly Brazil play in the future of the environment not only there but throughout the world. Great efforts are being made but even more could be done by countries in Latin America to stop the decline in the quality of their environment.
I am sure that the Minister who will reply to the debate will have views on how we in the industrialised world can encourage and reward countries for their efforts. That is important. It is no good expecting people to make sacrifices in countries with problems of large populations and great poverty. They must receive a return for the efforts they make.
There is great concern about drugs and drug abuse. It is simplistic to take the view, perhaps encouraged by the media, that Latin America, together with certain parts of South East Asia, is irresponsible in the way it produces the basic products for many of the narcotics which cause disaster in the world today. It is true that in Latin America, in the countries of the high Andes—Peru and Bolivia—where the coca leaf is grown, it has played an important part in the agricultural economies of those countries. That crop has been developed and encouraged and has given a means of living to the poor people who grow it. However it is then taken out of the country and processed, particularly in Colombia.
The major profits from this awful business, governed largely by criminal organisations, go to the middle man and the criminal organisations but not to the peasants who are the growers. The coca leaf has always played a part in the life of the peasant in caring for his health. It has been chewed and mixed with lime. This has had a satisfactory effect in resisting cold, hunger and the effects of high altitude. It has played an important part in the religious life of the countries of the high Andes.
It is a tragedy that in our developed world the need for mood-changing drugs has reached a level where there is such a market that people are exploited. They get very little out of it; the crime organisations reap most of the benefit. In this country, very little cocaine

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is used compared with other drugs. Perhaps that has to do with the geographical location of the United States which has more of a cocaine problem. We have other problems. I do not wish to upset noble Lords, but this is mainly due to the National Health Service making so many drugs available to people. It has created an addiction which goes way beyond that found among people who take heroin, cocaine and other drugs. However, amphetamines are becoming a worrying problem. We are net exporters of amphetamines which are easily made even in council blocks.
It would be simplistic to suggest that we could alter the supply of drugs in Latin America by eliminating the fields where the plants are grown. It is a matter of dealing with the demand. If we destroy a field of coca plants, it will merely be planted again: the demand still exists. The demand can only be countered by treating those who are unhappy enough already to be sufferers and by educating young people in our society to make sure that they understand the dangers of taking drugs.
I thank noble Lords for listening to a hurried speech. I agree that the situation is more optimistic than it was, and I hope that the Government will be able to give an encouraging reply to the excellent debate.
5.5 p.m.
Baroness Ewart-Biggs: My Lords, the noble Viscount, Lord Montgomery, gave a comprehensive and vivid background to the debate. I am sure that he will be happy with the varied contributions made. Noble Lords have covered an enormous number of aspects of the subject. I wish particularly to mention the speech of the noble Lord, Lord Aldenham, because I was moved by the account he gave of a country that is clearly close to his heart and his description of the struggle the Chilean president is making to support democratic practices. He may be sure that we all join in hoping for his success.
The debate has also given us an opportunity to welcome many developments in Latin America over recent years. We have mentioned that many countries now follow the path of democracy. We have also spoken of the re-establishment of diplomatic relations between the United Kingdom and Argentina, a source of great pleasure and relief to us. I believe that the renewal of relations between our two countries has particular importance for the development of British relations with Latin America.
First, I wish to follow the noble Viscount, Lord Falkland, and say a word about the external debt problem of Latin America and its effect on the lives of the poorer people in the continent, particularly the children. My noble friend Lord Rea gave horrific figures of the external indebtedness of Latin America. It is true that Latin America paid out over 200 billion dollars in interest and repayments between 1982 and 1989. Nonetheless, in 1989 it owed 426 billion dollars to the rich nations. In effect, this means that every child born in Latin America today is in debt to the tune of 60,000 dollars. That is a sobering thought. We
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know that indebtedness has retarded economic growth there. The burden of debt diverts export revenues to meet repayments, reduces imports and deprives countries of foreign investment.
I wish to ask the Minister about the recently introduced statutory instrument with which the Government have tried to alleviate the situation. The statutory instrument ensures that the provision of up to 50 per cent. of total loans to developing countries will be treated as bad debts. As such, they entitle banks to tax relief. The question I wish to put to the Minister is whether this is happening. There is concern that banks write down the debt in their accounts and claim tax relief but in practice they still demand the full amount of the original debt from the developing country. I should be grateful for information on that. We on this side of the House believe that it is essential to ensure that tax relief to banks is conditional on the introduction of debt relief packages to alleviate indebtedness of third world countries. Perhaps the Minister will say whether he agrees with that.
The reason I wished to say a word about the effect on children is that today UNICEF launched its State of The World's Children Report. It is made quite clear that the economic crisis has had serious effects on children, but nevertheless the work of UNICEF has increased and progressed in Latin America because the governments of those countries are supportive of work for children. The health and education services have of course been drastically affected by the economic crisis. This has led to a great mushrooming growth of shanty towns. It has also led to increases in child mortality and malnutrition. There is little doubt that the so-called street children are at the very bottom of this social net. They present a very great problem in Latin America. It is thought that in 11 of the countries in the region there are as many as 7 to 8 million children living entirely on the streets. That situation has not resulted from a lack of devotion on the part of the children's families but has resulted simply from poverty. There is no way those children can stay at home and so they take to the streets.
UNICEF has received a great deal of support from Latin American countries. Some 71 leaders attended the World Summit for Children. Mexico was one of the six countries that called for the summit. As many as 19 of the Latin American countries have ratified the UN Convention on the Rights of the Child. The Minister knows that I eagerly anticipate Her Majesty's Government ratifying the convention also.
The work that UNICEF and many other organisations are trying to do to help these countries in their child survival strategies cannot succeed without the support of wealthier countries. The noble Baroness, Lady Gardner, made that point very clear. She spoke from her observation of Plan International. These initiatives will come to nothing unless they have the support I have spoken of.
My noble friend Lord Molloy and the noble Lord, Lord Chorley, have spoken of the terrible effects that the debt problems have on the environment. I do not believe that there is much that I can add to that. However, I was interested in the comments made by

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the noble Lord, Lord Chorley, on the efforts made by the Brazilian Government to save the Amazonian rain forest. I hope the Minister will tell the House whether there are any debt for forest conservation agreements or any code of practice for timber importing companies.
Finally, I wish to touch on a subject which has been mentioned by my noble friends Lord Rea and Lord Molloy, which is the growing concern that Amnesty International has regarding human rights abuses in Latin America. E1 Salvador was named by Amnesty International as one of the three countries with the worst records of military connected human rights abuses in 1989. I hope the Minister can tell me what progress has been made in bringing to trial those responsible for the murders of the six Jesuit priests in E1 Salvador and whether Scotland Yard has published its findings on that.
Amnesty International is also worried about the disappearances in Peru, the death squads in Colombia, the disappearance of children in Argentina and also the death squads that target homeless children in Brazil and Guatemala. I agree with my noble friend Lord Molloy that it is right to face up to these worrying statistics in Latin America. However, at the same time we applaud all that is being done to try to bring about the rule of law and democratic practices there.
I end by saying that foreign debt casts its shadow over the lives of millions of people in Latin America. Political democracy and many vital social reforms are threatened by the economic crisis that results from the debt. International agreements such as the Convention on the Rights of the Child will be worthless while social, health and education programmes are so drastically cut. It must be the duty of wealthy nations to find a solution to the debt problems of Latin American countries. Without such a solution, there is a very hard road ahead for those countries.
5.14 p.m.
The Earl of Caithness: My Lords, I am grateful to my noble friend Lord Montgomery for his initiative in enabling us to debate Latin America today. It shows again the strength of his commitment to the region and reminds us of the depth of his knowledge and experience. In him Latin America has a devoted and influential friend, as so many of your Lordships have said.
In recent years the political face of Latin America has changed beyond recognition. Authoritarian regimes have given way to democratically elected governments throughout the hemisphere, with the notable exception of Cuba. I shall say a little more about Cuba in a few moments. Hand in hand with this advance of democracy came an increasingly widespread adoption of realistic economic policies aimed at encouraging enterprise and investment and at breaking down protectionist obstacles to progress. Many Pressing economic and social problems remain to be resolved. There are still serious concerns about
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human rights abuses in some countries. As the noble Lord, Lord Rea, said, the burden of debt still lies heavily on many Latin American countries.
The noble Viscount, Lord Falkland, and the noble Baroness, Lady Ewart-Biggs, asked for some detail about the Government's attitude to debt. We must remember that Latin America's debt problems are different from those of Africa, for example, because Latin America's debt is largely owed to banks rather than to official creditors. We welcome the increasing willingness of banks to negotiate debt reductions with debtor countries. We support the agreement reached last year that the IMF and the World Bank should provide some of their lending directly in support of voluntarily negotiated debt reduction deals. Mexico was the first country to reach an agreement with its banks under these arrangements. I know that my noble friend Lord Selsdon is aware that debt reduction deals have now been agreed or are under negotiation for almost all Latin American countries. We welcome that. With the spread of good government, there seem much better prospects than for many years past of a serious, determined effort to consolidate pluralist democratic politics and achieve soundly based economic growth.
The policy of the British Government is to do all we can to encourage these trends and to strengthen our links with Latin America. Those links are extensive and varied, as my noble friend Lord Thomas of Swynnerton told your Lordships. My noble friend Lord Aldenham, in what I considered to be an excellent maiden speech—I too wish to congratulate him on it—told the House of his family's special connections with Chile. Like my noble friend, we particularly welcome the restoration of democratic government in Chile. We look forward to President Aylwin's planned visit next spring.
1990 has also seen the restoration of diplomatic relations with Argentina for the first time since 1982 on the basis of accords reached between the British and Argentine Governments in Madrid. Also in Madrid we have just reached agreement with the Government of Argentina on a co-operative approach to fisheries conservation in the South Atlantic. I am particularly grateful for the support of the noble Lord, Lord Shackleton, whose knowledge of this area is so respected.
Many noble lords will be aware that the Argentine Foreign Minister, Dr. Cavallo, visited London last week for talks with the Foreign and Commonwealth Secretary. The fact that this was their third meeting since April is ample evidence of the strength of will on both sides to consolidate our new relationship on sound foundations. We applaud President Menem's desire that Argentina should play a more active role internationally. Like my noble friend Lord Radnor, we have warmly welcomed Argentina's decision to send naval forces to help enforce the UN embargo against Iraq in the Gulf.
In Central America the peace process we have firmly supported made great strides with President Chamorro's clear victory in the elections in Nicaragua and the subsequent demobilisation of the Contras.

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The noble Lord, Lord Molloy, will recall that in April we announced our decision to create a modest aid budget for Nicaragua. We pledged a further £600,000 at the Rome donors' conference on 6th and 7th June to help meet the country's most urgent needs. The main channel for UK aid will, however, remain our contributions to the Community. I know that the noble Lord welcomes our efforts.
We also welcome the negotiations under UN auspices between the Government of E1 Salvador and the FMLN guerrillas. Despite the setback of the FMLN's recently renewed offensive, we wish the negotiations success and the people of E1 Salvador lasting respite from the tragic conflict which has afflicted that unfortunate country for so long.
Similarly, we hope that negotiations between the URNG and the National Reconciliation Commission in Guatemala will lead to a peaceful resolution of the civil conflict there. We welcome the establishment of representative, democratic government in Panama following US intervention there.
The noble Baroness, Lady Ewart-Biggs, and my noble friend Lady Gardner of Parkes raised the question of children. Perhaps this is the opportune moment to say a few words on that subject, particularly in relation to Guatemala. We hope that the new president elected in January will produce a fresh initiative in the struggle to uphold basic human rights not only for children but also for others in that area.
The past year has famously been one of democratic revolution in Eastern Europe. Less dramatic but in its own way just as significant has been the process of democratic confirmation and renewal in large parts of Latin America. I am sure that many noble Lords will wish to join me in repeating the Government's congratulations to President Collor of Brazil, President Gaviria of Colombia, President Calderon of Costa Rica, President Callejas of Honduras and President Fujimori of Peru on their election victories and smooth assumption of office from their predecessors according to established constitutional processes.
We were delighted to welcome the then President-elect Collor to London earlier this year and look forward to strengthening this country's already good relations with Brazil. The noble Lord, Lord Chorley, spoke with great knowledge of that lovely country. I agree with him that we cannot dictate solutions to others. That is why we are working closely with the Brazilian authorities to help preserve the global environment through conservation of the Amazon rain forest.
I am grateful for what my noble friend said about my right honourable friend Mr. Patten. My right honourable friend Mrs. Chalker has followed up his good work in her visit to that country in October this year. We salute the courage of President Gaviria and the Colombian people in carrying through the elections and upholding the democratic process in the face of murderous attempts at intimidation by the
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drug cartels. We shall continue to do all we can to help the Colombian Government in their attempts to curb narco-traffic. We are delighted to welcome ex-President Barco to London as a most distinguished ambassador to the Court of St. James.
The year 1990 has also seen significant progress towards regional co-operation and integration within Latin America. In the southern cone, Uruguay and Paraguay are reportedly exploring the scope for free trade with their much larger neighbours, whose plans for the Argentine-Brazil free trade zone are already under way. The Rio Group has recently been enlarged by the admission of Chile, Ecuador, Bolivia and Paraguay so that it now embraces all the Latin countries of South America plus Mexico. We wish Mexico and the US success in their negotiations for a free trade agreement.
I turn now to Cuba, which was mentioned in particular by the noble Lord, Lord Walston. It is sad that in a world which is increasingly turning to democracy and personal freedom Castro has set his face firmly against any change. I do not seek to deny Cuban achievements in the fields of health and education, but even those are at risk following 30 years of communist rule which have left the country in a state of penury. I hope that the Cuban Government will take the advice of my noble friend Lord Selsdon and come to recognise the way the world tide is flowing and decide to move with it.
The strongest British contribution to the economic well-being of Latin America has traditionally been through private investment. Consolidation of good government in the region can only reinforce that trend. Accurate figures of investment are difficult to produce, but we probably have a net £10 billion invested in the region. We are the second largest foreign investor in several countries, including Mexico, where we warmly welcomed President Salinas's sponsorship of a major inward British investment mission this summer.
The other engine of economic growth is of course trade. We much regret that recent multilateral efforts further to liberalise international trade have not yet borne fruit. However, I can reassure my noble friends Lord Montgomery and Lord Radnor that we shall continue to work for a successful outcome to the GATT round. We are confident that the European single market will provide wider and better opportunities for international trade, from which Latin America will also be a beneficiary.
British exports to Latin America in the first 10 months of this year were £995 million, a 21 per cent. increase on the previous year. Our imports from the region for the same period were £1.43 billion, almost the same as in the previous year. The British Government's most direct contribution to economic development in Latin America is through our own modest but well focused bilateral aid programme, which we expect will increase in the coming years.
We also make a substantial contribution to the large and growing economic co-operation programmes of the European Community, which has a well

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established political dialogue and economic co-operation programme with Central America which we are resolved to build on. Community programmes are also being concluded and expanded with several South American countries, and the UK is glad to play its full part in the establishment of a new political dialogue between the Community and its member states and the member states of the newly-expanded Rio Group. The two sides are to meet at ministerial level for the first time in Rome tomorrow, 20th December.
Hand in hand with that programme are our diplomatic missions abroad. The noble Lord, Lord Greenhill of Harrow, asked particularly about staffing. We are constantly adjusting deployments worldwide in response to changing demands. There is no doubt of our continuing commitment to Latin America. Following the re-opening of our embassy in Buenos Aires there are embassies or high commissions with UK-based resident staff in Mexico and in every independent country in Central and South America except Surinam.
My noble friend Lord Montgomery suggested that it would be a good idea to hold a conference on Latin America in 1992. I note that imaginative suggestion and will ensure that it is considered carefully by my right honourable friend and honourable friends. My noble friend said that it would be a good idea for it to coincide with the 500th anniversary of the encounter between the old world and the new world. We now know that contact was made much earlier than 1492. Indeed, I am proud that my ancestor Prince Henry Sinclair visited the new world in 1398, but he was certainly not the first to do so.
My noble friend Lord Selsdon asked about forthcoming ministerial visits. He is right to say, as did other noble Lords, that unless visits are made to those countries it is very difficult to pursue the good bilateral relationships that we all want. I recall that Lord Grey, when he was Foreign Secretary for 11 years earlier this century, made only two overseas visits. That is in marked contrast to what Ministers do now. I can assure the House that my honourable friend the Minister of State will be revisiting the region in the coming months. He visited Argentina and Chile in October. My right honourable friend Mrs. Chalker visited Brazil, also in October. I was particularly grateful for the remarks of my noble friend Lady Gardner of Parkes about my right honourable friend's ability to speak the language and his contribution through his personal connection.
All of those dynamic developments—national, intra-regional and inter-regional—have been complemented by the US Enterprise for the Americas Initiative and Partnership for Democracy and Development in Central America, launched last month in Washington, both of which we have welcomed as further practical evidence of the support of the international community for the efforts of Latin Americans to build a secure and prosperous future. Much groundwork has recently been laid and I am sure I hat noble Lords will join me in wishing all
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success to the democratic governments and people of Latin America as they embark on the arduous tasks which remain.
5.30 p.m.
Viscount Montgomery of Alamein: My Lords, many noble Lords have been kind enough to make remarks about my efforts and I am indeed grateful to them. But the debt is entirely the other way round. I am grateful to all noble Lords who have spoken in this debate. As my noble friend Lord Caithness pointed out, it has been a wide-ranging and varied debate covering almost every conceivable aspect of Latin American affairs. That is very welcome. Like other noble Lords, I enjoyed in particular the maiden speech of my noble friend Lord Aldenham. As has been said, it was thoughtful and sensitive. It is gratifying to feel that, even though we may have to wait 19 years for another debate on this subject—I hope that we shall not—at least he will be here (he is young enough) to carry on the good work when I and others might have gone elsewhere.
I welcome very much the remarks made by my noble friend Lord Caithness. I spoke on this subject last month and welcomed his conversion to the Latin American cause. I can see that that seed is bearing good fruit very rapidly. I hope that we shall hear frequently from him on this topic. I am glad that he likes the idea of a major conference to take place in 1992. There is now good reason to have yet a further conference—continuing the 1492 theme, although he questioned the veracity of the date—in 1998, which will be the 600th anniversary of his ancestor's excursion to that continent. Thus we can have two bites of the cherry. I hope that I shall still he around when he is present at that conference.
Diplomatic relations are vital. We have heard today about the restoration of diplomatic relations with Argentina. That was long overdue and extremely welcome. I should like to join other noble Lords in congratulating the Government on the brilliance of the recent fisheries agreement, which represents a great diplomatic achievement of considerable skill.
I am glad to hear that Latin America plays an important part in Foreign Office thoughts, although the noble Lord, Lord Greenhill, said that Latin America tended to be at the bottom of the heap when economies are made. Going round Latin America, as I frequently do, I find that staff is continually being cut down. I feel that at this time of great opportunity we do not need fewer diplomats; we need more of them, particularly in the commercial areas. It is all too easy to have commercial support in North America and elsewhere where things are relatively simple. But in Latin America, where matters are complicated, we need to have strong commercial support. I hope that it will continue.
We have had a wide-ranging debate. Every aspect of this matter has been considered. I hope that it will not be too long before we can return to it. Much food for thought lies in the Official Report and I shall look forward to reading it and participating in debate with

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noble Lords on these subjects on other occasions. I thank everyone who has taken part. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Homelessness in Britain
5.32 p.m.
Lord Stallard Lord Stallard rose to call attention to the report Homelessness in Britain by John Greve and Elizabeth Currie; and to move for Papers.
The noble Lord said: My Lords, before I begin my remarks to open this debate, I should first like to welcome the right reverend Prelate the Bishop of Bristol, whose name appears for the first time on our list of speakers. I am particularly pleased that he has chosen to make his maiden speech on this subject. I certainly look forward with interest to his contribution.
This debate takes place fortuitously as Parliament rises for the Christmas Recess. Given the publicity that the subject matter has had in recent months in particular, the timing could hardly have been more apposite. Shelter puts it more pointedly in the introduction to a publication by Kate Miller issued today called Wasting Money, Wasting Lives. It states:
"It is a damning indictment of Britain's housing policy that this year more than 43,000 families will spend Christmas in temporary housing. Worse still, much of it will be seedy and degrading bed & breakfast hotels, run-down council hostels, decaying caravans".
Homelessness in Britain, which is the subject of our debate, is the result of a thorough and comprehensive examination of homelessness as a whole commissioned by the Joseph Rowntree Memorial Trust. It was carried out by two eminent researchers in the field of homelessness, Professor John Greve of York University, who is well known for his contributions on housing and homelessness over the past 30 years, and Dr. Elizabeth Currie, another leading researcher who is particularly interested in single people and homelessness, the interaction between homelessness and health and the problems of high risk groups, especially young people.
The report was published in March of this year and I tabled my request for a debate on it almost on the day that it was published. The report is a little dated. Nonetheless the problem continues and perhaps we can update it as we go along. The report emphasises that the acute problems of homelessness are not confined to London alone nor even to the south east of England. Homelessness has become a national problem. Two-thirds of the registered homeless live outside the capital. Indeed, for the past 25 years homelessness has been growing faster outside London than in it. That point is highlighted in the foreword to the report by the two joint chairmen of the All Party Parliamentary Group on Homelessness, Llin Golding, MP, and Sir George Young, MP.
I quote from that foreword:
"The numbers of households accepted as homeless rose again in 1989 to record levels. At the same time, homelessness
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can no longer be regarded as a phenomenon of Greater London alone; throughout the southern half of England, few places are now escaping the pressures caused by shortages of homes affordable to those on lower incomes. And the problem is reaching out into all parts of the United Kingdom … We will be making the fullest use of this highly readable Report and we commend it to the attention of all those policy-makers and practitioners who share our interest".
That is signed by Llin Golding, MP, and Sir George Young, MP. I need not say any more on that point.
This debate is short for a subject of such massive proportions. That inhibits the scope but I shall try to outline some of the main areas considered. Other noble Lords will perhaps make other points. It is necessary to use some statistics to explain the situation. I make no apology for that, given that they all relate to the states of misery, squalor, mental illness, deprivation and hopelessness endured by thousands of our fellow citizens, old, young, women, men and children, every day of the year and not just at Christmas. Every statistic is a tale of misfortune and hardship. This affects us all.
From the Institute of Housing we know that 1.5 million adults and 1.5 million children have been registered as homeless in the past 10 years. In the past year, 125,000 families were registered as homeless and a further 1.3 million were on council waiting lists. Greve and Currie noted that homelessness had doubled since Margaret Thatcher came to power in 1979. They warned that homelessness would be a growing problem in the 1990s. As I said a moment ago, it is now a national problem with national causes. They argued that one of the main causes has been under-investment in house building and the operation of the policy of the right to buy for council tenants. Both those factors contributed to the problems. Where housing was available, it was often far too expensive. They estimated that up to 3 million new homes would be needed to house the likely growth in the number of households.
The report supports those arguments at length. I cannot go into the details too deeply but in an analysis of the capital expenditure in Britain it says that:
"Statistics for public expenditure alone show a much sharper drop—from a level which was already relatively low. As a percentage of GDP, expenditure was reduced from 4.1 % in 1976–77 to 1.6% in 1988–89. Of foremost priority is an increase in the share of national income allocated to the construction of new housing and the maintenance and improvement of the existing stock".
We know too from other sources that there are still almost 0.5 million houses in this country lacking basic amenities such as inside loos and so on. Another 900,000 houses are totally unfit for habitation. The AMC reported in 1988 that there were 2,400,000 houses in a poor state of repair. It refers to urgent repairs which would cost more than £1,000 to the external fabric at 1988 prices. A total of £86.5 billion would be needed to repair and improve housing to meet urgent needs. I do not refer to achieving fantastic standards but simply meeting needs at 1988 prices.
The report continues:
"By comparison, all other measures simply deal with the fringes of main problems or seek to render emergency assistance to the many thousands who become homeless each year. If Britain's spending on new building had been at the

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same level as that of West Germany during the 1980s—as a percentage of GDP—we would have built over 600,000 additional houses".
In a report on the housing situation published last month Shelter stated:
"The number of homes for rent built by local housing authorities has fallen substantially over the last ten years —from 67,377 homes completed in 1980 to just 12,851 homes completed in 1989. Housing association building for rent has declined from 13,154 homes in 1980 to 8,873 homes in 1989. Local housing authorities' new building programmes are to fall even further in the next few years, while housing associations are currently facing financial restraints on the number of homes they can start this year".
I heard on the radio only yesterday that the nearby borough of Southwark is coming to the end of its house-building programme. It is completing the last 55 flats which are likely to be built in the foreseeable future. That is the problem with which we are faced.
All those factors put the Government's initiatives into perspective. The homelessness initiatives that have been announced are to be welcomed so far as they go. However, the use of expensive, poor-quality bed and breakfast hotels has increased. The Department of the Environment issued figures in September 1990. They show that by June 1990 12,170 households were forced to live in costly bed and breakfast hotels compared with 11,720 in the same period last year. The figure is therefore increasing annually.
The same statistics from the DoE also indicate that the number of homeless people forced to live in temporary accommodation increased in 1989–90 by 27 per cert. from 33,750 to 43,040, and is still growing. The total cost has been estimated at about £245 million. I am grateful to Shelter for publishing a small table of the relative costs of permanent and temporary housing. The first year revenue costs of housing a homeless family in a bed and breakfast hotel were £15,440. For a privately-leased home the cost was £10,452. For a newly-built council home, the cost was £8,200. How does one explain the discrepancy between those figures to people who are desperately seeking permanent accommodation when they know that they are feeding—some are genuine but many are shady—characters who have jumped into the bed and breakfast queue and are making a killing at our expense. For £8,200—half the price of bed and breakfast accommodation—a new council home could be built. Explain that to the homeless, my Lords, because I cannot. It does not bear explanation.
As the Greve Report rightly states, we are dealing with the fringes of the problem. We are seeking to deal with emergency assistance to the many thousands who become homeless each year. The Government are reacting to public pressure in an election year in trying to be seen to deal with the problem. Less is being spent on there initiatives than has been cut as a result of other housing legislation. The Government are dealing, with the symptoms, not the causes. The situation is similar to that of a fellow who puts a jug under the leak in the roof. When the leak becomes bigger, he changes the jug for a basin. When the leak becomes still bigger he changes the basin for a bath. When he has no receptacle large enough he has to
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mend the hole in the roof. It would have been cheaper to have done that in the beginning. It is the same with the government initiatives. Those initiatives are wasting money on jugs under the leaking roof instead of mending the roof which is the cause of the problem. Until that leak is mended, we shall not solve the problem—and we shall not do so until after the next election.
The report refers to the sale of council houses as a contributory factor. It recommends modifying the general provisions for the sale of council houses under the right to buy policy. I agree with it. This would not necessarily entail terminating the policy but would ensure a closer scrutiny of the advantages and disadvantages to a community of the proposed sale. There are advantages and disadvantages to he considered. However, that is not done at present. We say, "Yes, keep the right to buy, but homes sold should be replaced by enough homes to rent".
The report makes a number of other recommendations such as bringing empty council houses back into use with the minimum feasible delay and streamlining allocation procedures. I could not agree more. That is long overdue. I should like to go further and include private voids as well as council voids. While I do not make excuses for any council of whatever complexion, I also know that the Government are the worst offender when it comes to leaving properties empty. I understand that the total of empty public and private properties is 600,000 units which could be used if the goodwill, money and political will were there.
The report also suggested last March that the Government should immediately launch a programme to help single homeless people. Its aim should be to increase the supply of direct access accommodation and to provide second stage accommodation for those sleeping rough.
To his credit, Sir George Young in his first few weeks has announced some measures along the lines that I have suggested. Of course any proposals to help those people must be supported; it would be churlish to do otherwise. However, it should be noted that a survey in 1986 showed that following the closures or refurbishment of large hostels, in particular in London, there were 4,931 access beds compared with 9,751 which had existed in 1981. Therefore we are replacing only some of the beds that existed nine or 10 years ago. At the same time homelessness has increased dramatically.
I am a masochist when it comes to anything to do with housing or homelessness. I do not take lightly an article in today's Daily Mail which suggests that we ought to consider the problem relating to digs as well as hostels. When I first came to London 50 years ago it was not difficult to obtain digs. Now those digs have been tarted up and painted, and have become very respectable self-contained flats on sale for £100,000, £120,000 or £150,000. But the rooms are no longer accessible for the homeless population. The Daily Mail suggests that it might be wise to offer an incentive to people who are prepared to take in lodgers by giving them tax relief. Charging those people tax stops them from taking in lodgers. They have to fill in the

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forms relating to tax and so on. At the end of the day they feel that it is too much trouble; they might just as well not do so. We lose thousands of potential digs. The Daily Mail is to be commended for its timing.
After the next election we shall introduce a housing programme which is outlined in detail in our document, Opening Doors. It will include a number of measures dealing with the causes of homelessness. We recognise that the scourge of homelessness cannot be banished without increasing the supply of affordable rented accommodation. While we wait for permanent homes, we shall ensure that emergency measures are taken to improve the condition of people placed in poor temporary accommodation or who are sleeping rough. I commend that document to all who are interested in the most serious domestic social problem facing us all: that of homelessness.
I have attempted briefly to introduce this excellent and farsighted report. I look forward to the debate that is to follow. I beg to move for Papers.
5.50 p.m.
The Lord Bishop of Bristol: My Lords, I ask the indulgence of the House on the occasion of my first address to your Lordships. I thank the noble Lord, Lord Stallard, for allowing me the opportunity of noting the report.
The first chapter points out that homelessness belongs to the nation as a whole and is not concentrated only in London and the North East. I wish to share with your Lordships the experience of being a bishop in the city of Bristol and experiences which are part of my daily life and that of many people within the city. The population of Bristol is 400,000. Of that number, 16,000 people live in unfit accommodation but at least they have somewhere to live. According to the last count, 1,250 people live in bed and breakfast accommodation, and we know of the effect that has on family life, especially on children. Two thousand two hundred people live with relatives and friends because they cannot find accommodation. Often homelessness is caused by people no longer being willing to have others live within their homes. There are 12,300 people on the council waiting list. I know that 4,300 of those want transfers, but 8,000 people want first-time accommodation. Those are the facts.
Because people are concerned, many of the voluntary agencies give an immense amount of time and resources to help to alleviate the distress caused by homelessness. I wish to pay tribute not only to the Church Army but also to the Salvation Army hostels. For many years they have done what the whole community has been unable to do. However, there are two smaller organisations. One is called the Julian Trust and it is run by ordinary people. Each night it provides 33 beds and more than 100 meals. That is not Monday to Friday but every day of the year. There is also the soup run. In the main it is run by students from the University of Bristol and the polytechnic and also by young people from youth clubs throughout the city. Last Wednesday evening they provided soup and
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blankets for 98 people who were living in the open air. If your Lordships can remember the temperature that night you will know the effects of living rough at this time of the year. I wish to commend those people for their care but I am sure that your Lordships realise that that is only the first aid and does not deal with the real problems.
Statistics tend to pass us by and therefore I wish to focus the issue on one organisation; it is the Bristol Cyrenians, who run a day centre in the middle of the city. They have considerable problems in finding sufficient funds to keep the centre going. However, people are generous and it does a good job. In 1989, 2,500 different people went through its hands. I wish to divide them up into groups so that your Lordships may see the kind of complex problems that homelessness presents at this time of year.
Of those 2,500 people, 750 are under the age of 26 years. Homelessness is a situation which affects the young, and increasingly so. One of the major concerns about youth homelessness is the cycle. They cannot obtain employment because they do not have an address. They cannot obtain medical care because they cannot get on a doctor's list. A small group of people within Bristol has tried to put together a package providing accommodation alongside skilled training. The scheme is only small but it tries to stop the cycle of unemployment and homelessness. It may well be one of the ways in which we as a society need to address the problem.
One thousand people—that is, 40 per cent. of the 2,500 people who go through the Bristol Cyrenian day centre—suffer from mental health problems. That is a growing problem. One of the difficulties in removing people from the large, long-stay institutions is that they are now part of our homeless group. Together with the Cyrenians a local housing association has put together a pilot project called high care. It is a scheme for 15 homeless men and women with long-term serious mental health problems. That means providing 24-hour care. A whole range of similar projects will be required. Homelessness becomes an issue which you cannot solve for yourself, not only if you are young and unemployed but also if you happen to be suffering from mental health problems.
Of those 2,500 people, 720 have been homeless for more than five years. It is not sufficient to provide such people with accommodation. They need to relearn the skills of running a home and living within the normal pattern of society. That requires accommodation in which there is warden control and a great deal of help with counselling to help people to gain or regain those social skills.
What of emergency accommodation? It is normally full and it is normally for males. However, approximately 530 women are among those 2,500 people. Apart from a tiny project in St. Paul's in the centre of Bristol there is no provision for homeless women. Therefore, not only if you are young and unemployed, not only if you have a mental health problem, but also if you are a woman homelessness is an issue that you cannot solve for yourself.

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The noble Lord, Lord Stallard, drew our attention to the problems that we must face during the next 10 years. There is wide disagreement about the number of new homes or units that we shall require before the year 2000. Usually the figures show that about 100,000 accommodation units will be required each year for the next 10 years to deal with the growing requirements of our society. We are nowhere near reaching that figure. We shall require partnership and imagination in order to deal with the growing problem which s on our doorstep.
In Bristol a group of elected representatives from the local authority, local businessmen and voluntary bodies have addressed themselves to that problem. A new project is to begin in the new year. We have imported from Sweden four homes which are moveable. They look permanent but they are moveable. They come with kitchens and bathrooms and a very efficient energy input requirement. The intention is that these buildings should be erected on land w rich is not now being developed but which may well be developed during the next five or six years. We are trying to find a way of removing the problem of the cost of land so that we can have affordable housing. We are told that the units have a life expectancy of 100 years and may be moved from one site to another. That not a complete solution but it is imaginative and is intended to break the cycle of providing affordable rented housing. I hope that it will work. At least there are people who are willing to try new ways of dealing with the crisis.
We pride ourselves on being a country that cares. We pride ourselves on having a biblical tradition. Part of the Old Testament tells us that it is the responsibility of the king, the state, to care for the orphan, the widow and the stranger. There are people on the margin of our society. It is the responsibility of the state to ensure that those who are homeless are at least given the opportunity of having the basic requirement of shelter. This is not merely an economic issue; it is a moral issue that we all face. Somehow we need to find a way in which a partnership can be arranged.
I should like to conclude with a quotation from an American, Reinhold Niebuhr, whose subtle theological insights have informed many a clergyman of the Church of England during the past 50 years. He said:
"who is better able to understand the true character of a civilisation than those who suffer from its limitations".
I hope that we are not asked to live with the judgment of those who have no homes this night, for their judgment will be serious indeed.
6 p.m.
Baroness Faithfull: My Lords, it is my privilege to follow the right reverend Prelate the Bishop of Bristol and to congratulate him on his maiden speech, which has greatly impressed us. He has lived in such places as Sunderland, Wolverhampton, South Shields, Salisbury and now in Bristol. He has told us of the projects of the Cyrenians and High Care. We are particularly impressed by the temporary houses from Sweden. He must have encountered a wide range of homelessness, but in his history I see that he has been
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interested in the cinema and stained glass church windows. When I was working among the homeless I found that if they were cold and miserable and had nowhere to go, they went to the cinema. I wonder whether the right reverend Prelate spent time in the cinema with his homeless families. I suspect that he learnt much from them there as well as in all the places in which he lived. We are privileged to have heard him today.
Important as this debate is, I shall try to be brief. As we all know, the attendants of this House, who serve us so well, have their Christmas dinner this evening. First, perhaps I may say how grieved we all are at the untimely death of Lord Seebohm. Among many other social matters, housing and the needs of the homeless were problems about which he was greatly concerned. I know that he had intended to speak in the debate this evening. We mourn the loss of a great social reformer, an outstanding banker and a happy and contented family man—altogether a delightful person.
My noble friend Lady Blatch wrote to me on 23rd October stating that the housing association movement is playing and will continue to play a good and important role in the provision of affordable social rented accommodation. She quoted figures. I heartily agree and support the housing association movement, but I question Her Majesty's Government figures. We are told that through the Housing Corporation Her Majesty's Government are to provide 40,000 dwellings. However, due to demographic changes, the immediate need is for 100,000 dwellings. Therefore, there is a shortfall of 60,000 units of accommodation. That is not only in London and the South but in other parts of the country. Furthermore, if the housing associations are to be expected to undertake that work, they must have more resources, expand their organisation and take on more staff.
I know that local authority housing departments are not looked upon with favour by Her Majesty's Government. We know that some local authorities have been inept and inefficient. However, I suggest that that is a minority. I ask the Minister to look again at this matter so that local authorities as well as housing associations in partnership with each other can provide low cost affordable rented accommodation.
I must point out that the national health and community legislation, which is not yet implemented, will deal with patients discharged from mental hospitals, many of whom are homeless on our streets. Children and young persons in care and in penal institutions are the responsibility of the local authorities. Thirty-three per cent. of such people have no homes to go to. Therefore it seems to me that the local authorities should be used in concert with the housing associations to solve the problem of homelessness.
Other factors must be considered if we are to deal with homelessness and perhaps I may mention a few of them. One is mobility of labour. There cannot be mobility of labour if there is no low cost rented accommodation to which people can move. As the right reverend Prelate said, there are young couples

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who cannot get married or, if they do get married, live in appalling conditions. Therefore, I suggest also—I believe that other noble Lords will refer to this —that the health and education of our children living in bed and breakfast accommodation are adversely affected, as has been shown by the two reports just published.
Finally, we congratulate Sir George Young, who has recently been appointed housing Minister, on his swift action as evidenced by his Statement yesterday. The provision of hostels for the homeless is to be commended. However, I suggest that that is a short-term measure and, as the right reverend Prelate said, we must produce long-term affordable social rented accommodation. It may be that the length of tenancy should be limited to five years in order that tenants can move on to enable others to move in. However, people who are homeless, many of whom I know and have talked to, do not want temporary accommodation; they want a home, however simple. They want to live in the community and I know that the community is prepared to support them. Unless within a very short time we provide that low cost affordable rented accommodation, we shall not achieve a stable society. Only through the provision of such accommodation will we provide more stability in this country of ours.
6.7 p.m.
Lord Pitt of Hampstead: My Lords, I join in thanking my noble friend Lord Stallard for giving us the opportunity to debate this important subject. I join too in congratulating the right reverend Prelate the Bishop of Bristol on a very thoughtful, helpful maiden speech delivered with feeling. I hope that we shall hear more from him on social issues.
I join also with the noble Baroness in saying how sad I am to hear of the death of Lord Seebohm. Whenever we debate social matters, we shall remember him; he took a very active part in our discussions. His voice was always loud and clear on such issues, and without doubt we should have heard from him today. However, I am sure that he will be with us in spirit.
One of the forgotten aspects of homelessness is the cost of health care. Last week, in the programme "This Week", Thames Television reported on a recent survey of children admitted to hospital in Tower Hamlets. The survey showed that at least 40 per cent. of the children were in hospital with complaints which could be related to their housing conditions. The connection between damp housing and chest illness is well known, but even I am shocked at the current scale of the problem.
Shelter and other organisations over the past five years have alerted the community to the health effects on families living in squalid bed and breakfast accommodation. Children living in cheap hotels suffer from a range of infectious diseases. For example, gastro-enteritis has been virtually eliminated in well-housed affluent families. However, it is endemic among those who are badly housed. Other studies have shown that children's development has been
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impaired. What is more, the effects of unsuitable environments will not be reversed even if the families are eventually suitably housed. That is very worrying.
We broke the link between poverty and bad housing for the majority of families in the 1950s and 1960s. But in the 1980s we re-established that link with a vengeance. In 1979 there were 57,200 people accepted as homeless. In 1990 the number is 150,000. In 1978 the number of houses built in the public sector —for local authorities, new towns and housing associations—was 112,865; in 1989 the number was 21,535. In 1979–80 government spending on housing was £10.3 billion; in 1989–90 it was £3.4 billion. There lies the difference. It is not an exaggeration to say that by the mid-1970s we could have looked forward to a time when all our citizens had a place to call home. We squandered that opportunity. Now we are paying a very high price in both human and money terms.
Paying for temporary accommodation, as was pointed out by my noble friend Lord Stallard, is money wasted. If we add to that the cost of keeping children in hospital and the longer term health costs the bill is even greater. Health problems also affect the single homeless. The explanation is obvious. If one sleeps outside in all weathers one's health will be affected. But some effects are not so obvious. I recently heard of a case of a young man who had been sleeping rough. When he eventually found a hostel place he refused to take off his shoes. He was embarrassed to do so. When the staff eventually persuaded him, he was seen to have what can only be described as a case of "trench foot". His feet were almost rotting.
Young people mainly wear sports shoes which are neither warm nor waterproof. Their feet get wet, but they do not take off their shoes if they are sleeping rough. The case I described is probably an extreme. But I am sure that there are many less serious cases similarly affected.
I welcome the recent announcement of the action that the Government intend to take to help the single homeless in London. But that is only a small visible part of the problem. Each town and city has extreme housing shortages. Young people sleep rough all over the country. The problems will not be solved except by a substantial new housing programme and changes in the benefit system.
I hope that when the Minister replies she will be able to tell us that local authorities can use their housing and land receipts to build new houses and repair the houses that are dilapidated. I also hope that the noble Baroness will tell us that future housing investment programmes will be at a level that indicates that the Government recognise the seriousness of the housing crisis, of which the level of homelessness is merely a symptom, and that they will do everything in their power to correct it.
6.15 p.m.
The Lord Bishop of Manchester: My Lords, we are all deeply grateful to the noble Lord, Lord Stallard, for giving us the opportunity to debate this important report and especially at this significant time of the year. We are approaching Christmas, when we think

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of there being no room at the inn. It is the coldest time of the year and it strikes our consciences even more when vie think of our fellow men and women and the conditions they must endure.
I should also like to add my congratulations to my colleague, the right reverend Prelate the Bishop of Bristol on his contribution this afternoon. I particularly thank him for the way in which he put the emphasis on the moral challenge coming from the Judaeo-Christian tradition of the need to care for the homeless. It may be thought a little excessive to have three Bishops speaking in a short debate. I assure my right reverend friend that that is not because we did not trust him to say all that was necessary from these Benches. He has done that. I normally hear him discoursing to the House of Bishops on questions relating to the training of men and women for the ordained ministry. It is a great relief to hear him speak on something else. Three Bishops speaking in the debate perhaps emphasises the importance that we all give to this vital question of homelessness which has now reached crisis proportions in our country.
It is very good to see that the report was produced and brought to our attention by an all-party parliamentary group on homelessness. It is also encouraging to see the parties working together, and we note that the introduction of the report was signed by two Members of the other House on opposite sides of the political spectrum. Many of us are conscious of the fact that we are sometimes too confrontational in British politics today. It was suggested that we may get on a little better if we change the ordering of the Chamber. Many noble Lords would say, "Heaven forbid!" Instead of finding constant confrontation across and between the Benches we could sit more like the European Parliament, in a circle. We could then look at some issues across the political parties. But I am not so naive as to suppose that we can escape from the party political conflict over much of our life. However, we come across some problems which are so critical that they tend to transcend the party political debate. Surely that is something of what we experienced during wartime. Is not the need for an attack on homelessness in Britain similar to the kind of challenge that we faced in the past in times of war?
Homelessness of crisis proportions, as it is today, needs the thought, hard work and perhaps one might say the prayers of all of us in our community from every side—not only from politicians, central and local, but from industry, commerce, voluntary organisations, the Churches and so on.
One of the matters the report highlights is the breakdown of relationships which contributes to homelessness; for example, the dissolution of marriage or other partnerships, or young people unable to live with their parents. That is second only to the breakdown of sharing relationships, according to the Church, which are illustrated in the report. Work in the field of personal relationships is of great importance in tackling the problems of homelessness. I confess that as far as the Churches are concerned we recognise our responsibility in that field; we also recognise our weaknesses and our inadequacies. We
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are attempting to give more time, with very limited resources, to issues such as family life, marriage and education. Most diocese now have FLAME parishes —family life and marriage education—in which we are endeavouring to work in the field of personal relationships. It is the breakdown of relationships which often produces these tragic results.
Conversely, nothing puts greater strain on partnerships or on marriages than problems of housing. Many years ago that was brought home forcefully to the British public in that powerful television documentary "Cathy come Home". The tragedy is that so little progress seems to have been made since the days of that programme, when we felt that it had alerted our consciences and that we would get on top of it.
However, as the report makes clear, homelessness is not just a question of irresponsible behaviour. Governments have a responsibility in the whole field. What I should like to say in the brief time at my disposal is that in regard to the partnership, or what should be a partnership, between central government and local authorities, the tension between them in recent years has been disastrous for aspects of the life of our country. That is highlighted in the housing sphere. In that respect, I was glad to hear the words of the noble Baroness, Lady Faithfull. There are hopes that the atmosphere is beginning to change. I hope that what is said in the House this afternoon will encourage that change.
The tragedy of conflict between central and local authorities has arisen specifically in the large metropolitan areas. Local authorities have been expected to do many things in the field of social policy, but they have often been starved of resources and under constant criticism and lack of trust. I believe that it is true that some very good people have been lost from local authority government because of the, atmosphere that has built up around it in recent years.
I hope your Lordships will not think that I am suggesting that all the blame for this unfortunate situation has been on one side politically. Reference has already been made, for example, to the fact that the management of local authority housing stock has not always been as good as it should have been. Just the same, there are aspects which come into the realm of mythology, as the report makes clear, about the management of local authority housing. The report points to the Audit Commision's view that management improvements by local authorities would make only a relatively modest contribution in dealing with the problem of homelessness. The point that we often hear about the number of local authority houses which remain unoccupied for too long is partly because of a complex situation in which the lack of resources for urgent and immediate repairs is a major factor.
I believe, therefore, that we need this new relationship, this genuine partnership between central government and local authorities. Leaders of commerce and industry in my part of the world have

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often boasted that they get along better with Left-wing dominated local authorities than they do with central government. Is that true? If so, it must be put right.
The report shows that the crisis in housing and homelessness cannot be tackled except by a full and careful partnership in every sphere, and we must surely come to that. We have to push these matters right to the top of the political agenda. Although the problems of homelessness and poverty are complex, nevertheless central government policy initiatives have a vital role to play. We also need more houses—it is as crude as that. We need more local authority housing. It cannot be left entirely to the private sector; nor can it all be left to housing associations, valuable though their efforts are.
In this country we accept the right of everybody to have enough food to keep them from starving, though even in that respect arrangements sometimes break down. However, in recent years we have not been successful in making sure that everyone has a roof over his or her head. I hope that this afternoon a message will go from this House, from all political persuasions, that this is a moral challenge that we can no longer evade.
6.24 p.m.
Lord Murray of Epping Forest: My Lords, three features stand out in the scene of homelessness as it has developed over recent years, particularly the last decade. The first is the appalling increase in the total number of homeless people, to which reference has already been made. The second is the increase in the number of people right at the bottom of this miserable pile—those who are sleeping rough.
In a recent survey on the homeless covering the past 10 years the Whitechapel Methodist Mission in the heartland of the East End concluded that 10 years ago one-quarter of its guests slept rough, half were in hostels and one-quarter in bed-sits. Now, half its guests are sleeping rough, only one-fifth are in hostels and one-fifth in bed-sits. The third feature is the even bigger rate of increase in the number of young homeless people to whom the right reverend Prelate the Bishop of Bristol referred in a most welcome and compassionate speech. At next week's Open Christmas in the Old Kent Road I expect to find nearly one-quarter of the people to be under the age of 25. That is a vast increase on the figures for last year and for two or three years ago. Forty per cent. will be suffering from mental disturbance.
Young people are becoming homeless at an earlier age. Between 1983 and 1988 the proportion of people attending the Soho Project who were under the age of 18 rose from 25 per cent. to nearly 90 per cent. Teenagers receive a very low priority in terms of support—very much less than young children. A higher proportion of young people are leaving home earlier. That is fine. That is a healthy development provided they have somewhere to go when they are in trouble or need help; but for thousands leaving home means homelessness, absolute and complete.
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One hundred and fifty thousand young persons between the ages of 16 and 19 experience homelessness each year—for a few days or even months. As has been said already, only one-third of them are in London. Homelessness among young people is not just a big city phenomenon. It is not a London phenomenon but a national phenomenon. Some of these young people come from troubled families and some from residential care. One-third of homeless young people come from residential care, although between 1 per cent. and 2 per cent. of children and young people are in residential care. Many leave care by the age of 16 or so. They are in bed-sits, are lonely and cannot cope very well. However, they are a great deal luckier than the rest, who receive no assistance in finding accommodation.
Local authorities are unable to help even vulnerable young people who have no parents and no support. As has been shown by a recent study by the National Children's Home, that applies to young people and even young girls, who are open to sexual exploitation. The reason is simple. Local authorities are under enormous and increasing pressure from homeless families. In my area—an opulent area of Epping Forest in Essex—in recent months there has been a threefold increase in the number of homeless families seeking help. As the number of homeless teenagers has risen, the amount of available housing has gone down. Consequently, the homeless are trapped on the streets and open to robbery, assault and harassment, particularly girls and ethnic groups. Their plight is compounded by poverty.
I very much welcome the statement yesterday by the housing Minister that he will give sympathetic consideration to the case for benefit changes. That case is very strong indeed. The current system is based on three assumptions. First, that 16 to 17 year-olds should be at home with their mums and dads. That is fine and splendid; of course they should. They should be and must be encouraged. However, 80,000 young people leave local authority care each year. They have no mum or dad to go back to. As has already been said, there are many others who dare not go back home because they would not be welcome.
The second assumption is that homeless young people have the knowledge and confidence to make claims; but many of them are unaware of what support is available or how to go about getting it. Many of them see the system as hostile to them. The third assumption is that young people do not need as much to live on as older people.
It is easy to say that they should find work, and that is fine and splendid. They should be encouraged to do so. However, when jobs are scarce one does not stand much chance if one has no qualifications, experience, references or fixed address. It is small wonder that some young people turn to begging, some to petty crime and others to prostitution. The right reverend Prelate the Bishop of Bristol rightly drew our attention and paid tribute to the work of voluntary organisations for seeking to provide assistance to teenagers. Full marks should be given to the churches

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and voluntary organisations which provide projects for the homeless, advice centres for independent living, training and so on.
The problem is that many of the voluntary organisations are facing a fall in voluntary giving. The so-called and much vaunted trickle-down phenomenon is not working. The organisations are also facing cuts in local authority funding, apart from the impact of the community charge. The Minister's new proposals are welcome. However, as has been said al ready (and I echo the comments), we need a much more radical and fundamental approach involving support, finance and housing for young people.
First, young people need help when they are thinking of leaving home. Often the very best advice they can receive is not to do it. They should be given advice on what has happened to other people from their area who have left home. It may involve family conciliation. If there is no alternative, young people need advice about what independent living means, whether it concerns budgeting or washing socks. They also need continuing support to help settle them into the community.
Secondly, they need enough money to enable them to live independently, and preferably that means a job. If not, then it means improved benefits. I repeat that a 17 or 18 year-old has costs which are no less than those of a 25 year-old. The distinction should be abolished. They may also need assistance to help to pay deposits or for an advance on rent and furniture.
Thirdly, young people should have the right to be housed when they are genuinely homeless. That means giving young people the right to register on local authority housing lists when they genuinely have no other option. For example, there may be no possibility of returning to a caring home. As many previous speakers have rightly said, in its turn that means providing more accommodation at affordable rents, whether by bringing in empty properties, refurbishing or new building. We are all indebted to the noble Lord, Lord Stallard, for giving us the opportunity for this debate. As has been said so often, there is only one way of solving the problem of homelessness and that is by rutting roofs over people's heads.
6.34 p m.
Viscount Brentford: My Lords, I too would like to thank the noble Lord, Lord Stallard, for introducing this debate so forcefully today and particularly for his choice of timing. As the right reverend Prelate the Bishop of Manchester pointed out, we are just a few days before the commemoration of the birth of the Son of God in a stable. For the first period of His life thereafter He was homeless in Egypt. The only compensation I can offer Him is that His family would have qualified as a priority family for bed and breakfast accommodation under our current regulations.
There is another reason why the timing is so apt. There are changes happening virtually every day and seen either in notices from the Government or the activities of voluntary agencies. It seems that every
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two days during the past week I have had to change some of the points I was contemplating making in the course of this debate. I also wish to add my congratulations to the right reverend Prelate the Bishop of Bristol for his very interesting and admirable maiden speech. I found it very helpful to have a picture of what was going on in one specific locality put so clearly before us and in such a memorable way.
As the right reverend Prelates have said, this is a moral issue. With three right reverend Prelates speaking in this debate, that illustrates the point. I very much welcome the fact that there are three Prelates taking part in the debate. It is very good for us to hear the representatives of the Church of England speaking on this issue. With my own diocesan bishop to follow me in a few moments, I shall say what has been in my mind during my preparation for the debate. We from the Judaeo-Christian background are commanded to act justly, to love mercy as well as to walk humbly with our God. I believe that the subject of homelessness is one on which we in Parliament can be judged. Therefore it is very important that we look at justice and mercy. I believe that is what noble Lords on both sides of the House are doing in this debate, and I welcome it.
I wish to make one comment, which has not been made as yet, to ease the position of my noble friend the Minister when she comes to speak. This is not just a national issue: homelessness is an international issue. There has been much in the newspapers about the problems in Europe. I had tea here on Monday with someone who is resident in Canada. He said to me that there are 100,000 homeless teenagers throughout Canada who are sleeping rough and that most of them are suffering from the effects of drugs or alcohol.
This is an international problem. We are quite rightly concentrating on the national issue here which we can do something about. We are not in a position to do anything about Canada or Europe, but we are in a position to do something about the problem in London and the United Kingdom generally. It is very good that we have this opportunity to do so, particularly at this time of year.
There are so many points that one could draw out from this excellent report Homelessness in Britain. I wish to comment on a few of them which have been mentioned less by other people. There is one very interesting fact on page 20 which I have seen highlighted elsewhere, though I do not think that sufficient attention is being paid to it. The number of new households is increasing three times faster than the population. That obviously means that there is a decreasing average number in the size of households. I regret the fact that we have far more of the nuclear family living on its own in contrast to the extended family. Ideally, I believe that many nuclear families would benefit enormously from having a grandmother, aunt or uncle or similar person living with them.
There is a great richness in what I call the three G family. Having experienced it myself. I believe that while there are problems concerning relationships

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there is great richness in it. I bemoan the passing of the extended family. It is not just the nuclear family. As we hear so often in this House, we now have the one parent family and also far more individuals wishing to live on their own. This is a major social factor which is causing this problem of homelessness, because we need more homes than we did before for the same number of people. I believe that more help is needed both in regard to government policy in keeping families together and in the whole issue of divorce, which I am sure will come before the House afresh in the not too distant future.
We need action not only by the Government but also by the Churches and the voluntary sectors. The right reverend Prelate the Bishop of Manchester, together with the right reverend Prelate the Bishop of Bristol, talked about the work of the voluntary sectors. The Churches and the voluntary sectors need to keep on expanding the help which is afforded to families in order to keep them together. As has already been said, one cause of homelessness—I have mentioned this before in your Lordships' House—is the fact that teenagers get kicked out of the family home, all too often by a stepfather or the man living with the mother, who will not tolerate them. The more the Churches can do to help families to stay together the better it will be for this factor and many others.
Secondly, I should like to turn to page 24 of the report, which refers to the need for debt counselling and domestic financial management. These things are highly relevant to homelessness, because debt problems often cause homelessness. So often those without a home are suffering financial problems. I should like to see much more work being done about community banks and credit unions. Where a group of people can be brought together, all of them perhaps with financial problems, and where they can give mutual support, encouragement and help, there is scope for real progress in helping them. Groups of people could perhaps get together in a locality and really help each other, especially in regard to debt problems. There are banks in various parts of the world which are flourishing because they lend only to one category of person; that is, those who are highly impoverished. They work together with community support and community groups. I should like to see this form of credit union practised much more widely in this country and I should like to see more research done on that.
Next, I should like to refer to the need for cheap accommodation and I would ask my noble friend the Minister to note what was said by the noble Lord, Lord Pitt, about the need to meet the problem of decaying houses. If there are 600,000 houses that are empty, whether they are local authority or privately owned, could not my noble friend the Minister say that the accumulated funds of local authorities arising from the sale of local authority houses may be used to put back into operation these decaying houses, of which there are so many? It seems to me criminal that
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there are so many houses which cannot be used because of disrepair when there are so many people who are homeless.
Lastly, I should like to mention the need for hostel accommodation and to welcome the provision for local charities to provide hostels and beds, as has just been announced. I hope that my noble friend the Minister will be able to say that a great deal more will be done than she indicated in her Written Answer yesterday.
6.44 p.m.
Baroness Fisher of Rednal: My Lords, I am pleased to be taking part in the debate so ably introduced by my noble friend Lord Stallard. I was interested to hear the observations of the right reverend Prelate the Bishop of Manchester, in talking about "Cathy Come Home". At the time of that programme I was chairman of the Birmingham housing committee. I did not think I would ever live to see the same problem occurring perhaps 30 years later.
No doubt some people will always be homeless for a variety of reasons, but we have to ensure that policies do not force them to become homeless or to stay homeless. In this context we should look at the effect of the Government's policies. When government policies are pursued, little thought is given to their impact on other policies which another government department might be operating. If the Government cut social benefit for young people and abolish wages councils which used to protect wage rates for young people under 18, should we be surprised that young people are penniless and on the streets?
As my noble friend Lord Murray said, is there not something wrong with child care facilities in the country if we have young people leaving care and being thrown out on their own: no father, no mother, no brother, no sister, no aunt, no uncle, nobody to keep a watchful eye on them? If people are forced to live in bad housing, as the noble Viscount has just mentioned, ought we to wonder that marriages break down? Obviously that will happen. There is nothing worse for destroying a marriage than to live in bad housing conditions.
If we look further at government policies, the right reverend Prelate the Bishop of Bristol mentioned how poverty arises from unemployment. It is also a cause of homelessness. The Government do not have a very good record on employment issues. We went through one traumatic recession at the beginning of this Government; we are now entering a second recession, with unemployment figures creeping up again. Government policies are obviously a factor if we accept that unemployment causes poverty.
Then there is the Government's policy on the closure of mental hospitals. The Government may have thought that if they closed down mental hospitals people would be cured as soon as they went out of the gates. The National Schizophrenia Fellowship speaks not only of the danger to members of the fellowship but also of the anguish and despair they suffer when left on the streets. Instead of putting the problem on to the local authority or relying on the poor

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community care money which is allocated, why could not the National Health Service use part of its funds for small hostel-type accommodation for patients who need constant treatment in and out of mental hospitals for almost the whole of their lives? The problem is placed on the backs of local authorities. Alternatively, mental patients are left to be dealt with in the prisons. A report just sent to the Home Office shows that one-fifth of sentenced prisoners are in acute need of psychiatric treatment and have already received treatment in mental hospitals. Obviously, closing mental hospitals has caused a problem of homelessness.
Will regard to the Housing Corporation, I was rather disappointed when the noble Baroness, Lady Faithfull, said that she accepted the good work that was being done but asked the Minister to answer some of the questions that were being raised. I feel rather like the noble Baroness about the Housing Corporation. Let us recognise that it is an agency for the Government: purely and simply, an agency. It is a way of giving the Housing Corporation more money than is given to local authorities, because the Government do not really like council properties. When I was chairman of a housing committee they were called municipal properties; now that they are up for sale, they are called town houses. They are the same properties; that is, those which were supposed not to be good enough.
When figures from the Housing Corporation are produced, can the Minister say whether they feature new homes and new properties being built, or do they relate only to existing properties? I shall give your Lordships an example. If the noble Baroness, Lady Denington, was here, she would be able to enlighten us on the matter. The GLC retirement homes which were built at the seaside were taken over, but they were not new properties. Are the figures which apply to the takeover of local authority properties, or any other properties, really a credit to the Government? I say that because there are no new properties.
Local authorities are also called upon to pay debt on their housing capital. What a difference privatisation made to the water authorities! In most cases, the DoE was prepared to write off all the debts to the Treasury—a total of £4.4 billion. The Government are now saying to local authorities, "Put your rents up so that you pay off the debt for local authority housing."
Noble Lords have said that the problem is not one which concerns London alone. I come from Birmingham. I am fully aware of the problems in that city. Only last week I took part in a sleep-out in aid of St. Basil's, one of the largest hostels catering for thousands of people every year and well known to the department. The hostel's problem is not only that of raising capital. It is also one of raising revenue to keep itself going. It is rather sad when people like myself have to take part in a sleep-out in order to try to raise funds. To be perfectly candid, I believe that I was the oldest person taking part.
However, if we look at the figures for Birmingham, it will be seen that in the first year of this Government
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8,700 families were homeless. Today there are three times that number in Birmingham. That is a threefold increase in 10 years. Birmingham is in a peculiar position. It has many hostels to which it can send people. Moreover, we have always had hostels to accommodate women who have been subjected to violence. We have many voluntary organisations, such as the Salvation Army.
At present there is no one in bed and breakfast accommodation in Birmingham. But the city is not praised for that fact. Indeed, it received no homeless score at all last year. It may interest noble Lords to know that not one authority in the West Midlands conurbation received a homeless score, except Solihull. I shall leave the matter there. Quite obviously all the other areas in the Black Country and Birmingham have one political party. However, I do not think that the fact that some areas received such a score was a political matter. I do not know what their homeless figures are, but they are not comparable to those of Birmingham and other areas.
I turn now to the housing investment programme. That entails permission to borrow money. Birmingham has already received its figures for next year. The council put in a bid to the Government to borrow £67 million. The Government said that it could only borrow £62 million—that is, £5 million less than requested. Moreover, it suffered a decrease of £5 million the year before.
I support everything that other speakers have said. To my mind there will be no solution to the housing crisis unless the Government accept the fact that local authorities must be enabled to make their full contribution. If the Government do not want local authorities to do this, then there are co-operative housing associations, other housing associations and the private sector. People need housing and that paramount need is not being met at present. It is not being provided at affordable rents.
In conclusion I shall quote words used by the Prime Minister only a fortnight ago when speaking about need. He said:
"For a genuinely compassionate society … some people do need a special helping hand to help them enjoy a full life of choice and independence".
In order to fulfil that ideal, I say to the Prime Minister that we must recognise the fact that a good home is necessary for everyone who needs one.
6.55 p.m.
The Lord Bishop of Chichester: My Lords, my two colleagues from these Benches have spoken very eloquently about the general considerations and the moral issues involved in this question. At this late stage of the debate I do not propose to go over the same ground. I should like to speak especially about what I have observed in Sussex; that is, the problem along the south coast. As has already been said, the problem is not confined to London or to the big cities. Indeed, it exists all along the south coast.
In Brighton, for example, in August of this year the council had to accept 60 new families as homeless. That is a far higher number than has ever occurred

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before. We have a redundant church in Brighton which is used by the Brighton Housing Trust as a day centre for the homeless. At present over 150 people a day use that centre. That is an increase of 30 per cent. over last year. Those are indications of the extent to which this is a rapidly growing problem.
The Housing Act 1988 led to an increase in the number of private lettings available in Brighton, but the rents are too high. For example, you can pay £100 a week for a one-bedroomed flat, but to that must be added the deposit and rent in advance. That means that no one can start to look for a flat without £400 in his pocket. That rules out a very large section of the homeless.
Other speakers have referred to the increasing number of young people who have not been able to find employment and who are therefore not able to secure housing. That is a big problem along the south coast. The effect of the vicious circle of not being able to gain employment because you do not have a base, or not being able to get a base because you have no employment and finally not being able to obtain housing benefit drives young people to move on from town to town. That is an enormous problem. It seems to me that it is high time that there was a real reconsideration of the regulations which govern the availability of housing grants to those under the age of 26 years.
It is good to see that more support is now being given to housing associations. They are finding it much easier to obtain grants than was the case a few years ago. The associations are one of the bodies to which it seems, in the absence of other provision, we must look more and more for low cost housing. However, I do not exclude what other speakers have said about the importance of local authority housing being provided to a far greater extent. Nevertheless, there is a difficulty which these associations have to face. I refer to the rule that grants must be spent within the year in which they are made. For example, in the financial year from 1st April 1990 to March 1991 our diocesan housing association was asked to provide a 12-bedded hostel for single homeless people under the age of 26 years in Hastings. That is being undertaken with the YMCA providing the day-to-day management. But to put such a development on paper, to get it approved by the local authority and the Department' of the Environment, to secure safe and secure funding for at least five years ahead and to carry out the conversion of an existing building all takes longer than one financial year. That hostel, upon which work started in April this year, will probably be opened in June 1991—well outside the year for which the grant was made. The project has fortunately been underwritten by the Hastings local authority.
This is a problem which shows that there is a need for greater flexibility. Obviously public money must be accounted for and carefully controlled. It suggests that the time allocated for the provision of good quality long-term housing for people in need should
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be extended so as to allow the bodies skilled in undertaking such developments to do the job properly.
I turn to West Sussex. Reports which I have received from the seven district councils confirm what Professor Greve says on page 7 of his report about the South East, especially his point that homelessness is a rural as well as an urban problem. If anything, rural areas are suffering more than urban areas from the disappearance of council housing for rent. As has been said, there is a problem in providing support and housing for the mentally ill—those who are leaving psychiatric homes. It is clear that that is adding to the housing problem, but it is also adding—this is not always realised—to the burdens placed upon the police, who are responsible for dealing with those people when they find them wandering in the streets. It is an extra burden being placed on an already overstretched and undermanned force. As the police come in for a great deal of criticism nowadays, I should like to say that I am most impressed by the number of policemen I come across who spend their time doing social work of one kind or another.
All the authorities and organisations that I have consulted agree that the homelessness problem has also been exacerbated by high interest rates. Worthing District Council is approached by people who are about to become homeless through mortgage default at the rate of between one and four families a week as against one family in three months a year or two ago.
Housing associations do their best to help in those circumstances. I have tried to mention some of the difficulties that they face, but I shall add one more point in relation to which the Department of the Environment might be able to help: housing associations can often convert existing buildings, including redundant churches. In Brighton we have a large 1930s brick-built church whose conversion into low-cost flats is nearing completion. We have been able to do that only after a long-running battle with three or four of the amenity societies. It was a battle in which we were strongly supported by the local authority and in the end, I am thankful to say, by the Secretary of State. In the face of the crisis that is revealed in the report I hope that the amenity societies will consider social needs much more carefully than they sometimes appear to do, and that in relation to the conversion of any listed building the two sections of the Department of the Environment (that concerned with the heritage and that concerned with housing) will work together so that proper and adequate consideration is given to social needs.
When I was an undergraduate, I spent part of my vacations in an unemployment hostel in Tredegar in South Wales. I have never forgotten the appalling conditions under which so many people were living and the state of mind that those conditions induced. It is a terrible comment upon our society that 50 years later we should still be facing the same problem. We must remember that homelessness is a symptom of many other ills in society. We need to think hard

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about what those ills are, what policies have produced those symptoms and what are the moral, spiritual, and economic factors behind them all.
7.5 p.m.
The Earl of Longford: My Lords, I hope that I shall not be misunderstood if I say that it is a long time since we have heard three such notable speeches from the episcopal Bench, including the powerful oration of the right reverend Prelate the Bishop of Bristol, who made one of the most effective maiden speeches that I can remember for a long time. The last time that we had a big debate on a social issue (education) there were no speeches from the Bishops Bench, and I made some adverse comment. That has been put right. I cannot claim any credit of course, but it worked. It has all turned out happily.
I make a point of taking part in any debate initiated by my noble friend Lord Stallard. There is only one problem. He covers the subject so comprehensively that I feel inclined to say, "Ditto", and abandon my speech, especially when other effective speeches from the right reverend Prelate, the noble Baroness, Lady Faithfull and others follow. I usually—perhaps too often—refer to the New Horizon Youth Centre for the homeless which I helped to found many years ago and which is now going strongly. Some of the young people from there have sent me their thoughts. I shall not communicate them at length, but I shall read a quotation from one of the homeless:
"It seems ridiculous that the question of homelessness comes to public attention only seasonally. From March to November you hear very little about the plight of us, the homeless population. We do not go away ever. We would love to leave the streets behind, but there simply are neither the opportunities nor sufficient services to help us. The problem is here the year round and will be unless some positive steps are taken".
That quotation has the advantage of coming fresh from the homeless.
I shall speak for only a few minutes because, apart from the ground having been so well covered already, an important event is to take place not 100 miles from here in which we all take a sympathetic and admiring interest. We are anxious to hear the Minister. This is one of the hardest tasks upon which she has embarked in her career. We know that she is not just a sincere person; she is a skilful debater. I have not given her notice of this point, but the whole debate is notice of it. Can she think of any possible defence of the Government's housing record? If she can dredge up one, she is not merely a skilful debater; she is a mad genius.
Homelessness is worsening. I shall not cover that ground again. We are all agreed about that, and yet the Government tell us that the economy has been —lately talk about a miracle has been played down a little—successful for the past 10 years. I do not doubt that the average income today in this country is higher than at has ever been. That is so in every Western country. It would be amazing if the Government managed to prevent that happening in view of the advance of science. But how does the Minister reconcile the fact that although this country is richer than ever homelessness is worse than ever? How can
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she square those facts? The obvious answer is that it is due to the Government's policy. It is too much to expect that she will throw away her brief and say, "Well, I suppose, on reflection, it has all been a tremendous failure, but we shall do better. We have a new caring Prime Minister and a new Minister".
We all agree that Sir George Young is a fine man. An expert, a fine young fellow from Centrepoint has been called in. I hope that the right reverend Prelate the Bishop of Manchester, who pleads for a non-party approach, will not condemn me. I ask for a temporary dispensation on this. Sir George Young and the Government, and even the noble Baroness, have a problem. We can all agree that the Sunday Telegraph is a leading Conservative newspaper, thoroughly orthodox and sound. No one can say there is any revolutionary flavour to it. Perhaps I may call the attention of the noble Baroness to something unpleasant. I gather she does not wish to hear it but I must draw attention to the leading article in the Sunday Telegraph, the great Conservative organ. These are not my words, the newspaper states:
"Mr. Major plays to the gallery. There is something distasteful about the new Prime Minister's tactic of currying favour with the media and public opinion by posing as more compassionate and caring than his predecessor … [He] was the loyalest Thatcherite of all".
Perhaps we may put aside the Sunday Telegraph, repudiate it and repudiate Thatcherism. That is what I ask the noble Baroness to do. Until Thatcherism is repudiated there will be plenty of homeless, more and more of them. It is unfair to place all the burden on the noble Baroness, but she has been so successful that to give her a little extra difficulty seems harmless enough.
7.11 p.m.
Baroness Hollis of Heigham: My Lords, Shelter reminds us that it is not difficult to become homeless. Almost everyone moves house at some point in their lives: when leaving home, losing a rented flat or starting a family and needing somewhere larger. However, homeless people are those who have nowhere to move to. They have become homeless because family and friends can no longer put them up. They remain homeless because there is not enough decent, permanent, affordable rented housing. They are mostly families, as has been said, and outside London. The homeless also include the young, the disabled, the poorer, the jobless, the vulnerable, the institutionalised and the handicapped. When the local authority has to fail them, they have nowhere else to go. Some want and need family homes; others sleep rough, wanting and needing other kinds of support; still others belong to the ranks of the hidden homeless in substandard and squalid accommodation.
The DoE recently published its revised 70-page draft code of guidance to local authorities on homelessness. It is a decent, humane, civilised and compassionate document. It asks local authorities to provide a sensitive and speedy service; it encourages them to have a more generous reading of what it means to be both homeless and vulnerable, in its words, to take,
"a wide and flexible view".

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Migrants, immigrants, mortgage defaulters, former inmates of institutions, the institutionalised, the homeless—the circular presumes in their favour. It is enlightened and humane about what it is to be homeless. It says that local authorities should offer self-contained accommodation with adaptations for the disabled. It should be close to friends and relatives, have a minimum quality and give some security of tenure. We all say yes to that, but when we look up the philosophy of the code and see it measured against the reality of the Government's housing policies, we see the gap in housing today.
The code insists that local authorities retain a statutory responsibility for homelessness even when they have sold or transferred all their stock. It asks them, for example, to prevent homelessness occurring by preventing rent or mortgage arrears arising. Yet the code recognises that the source of those arrears is very often the repayment of social fund loans, payment of the community charge or water rates or in future maintenance payments. All of those will top slice desperately low income support wages.
Secondly, it says that local authorities should use their own housing to house the homeless. We say yes to that too, except that, as many people have said, local authorities now have 20 per cent. fewer houses to let than 10 years ago. Local authorities are now building each year not enough houses even to meet the emerging need of homeless families for one month. That is the situation we face.
What else does the circular suggest to local authorities? It suggests that they should meet the philosophy of the code —a decent one, as I emphasised—by looking to other local authorities which have spare houses. Apart from women suffering from domestic violence, I have to say that that objective is fantasy. It suggests also that local authorities should turn to housing associations, but, as we have heard, those offering general housing have for the most part closed their lists. Many others offer specialised housing for the elderly or for young, single people. In any case, their finances have been undermined by the lack of capital finance in recent years.
Then the draft government circular examines the possibility of the private sector meeting the needs of the homeless. It suggests the further use of private renting, of shortholds, but it recognises that they push the problem of homelessness to the other side of winter, into springtime.
The circular looks at private leasing: 17,000 private leases have come into the market, 13,000 of them in London, I suspect 15,000 in Docklands. That is a welcome initiative but one which is currently undermined by the Government's policies if they insist that financing be part of local authority overall spending limits and if they do not allow housing benefit fully to meet the cost.
Central government also suggest that local authorities should turn to temporary accommodation —bed and breakfast accommodation. The DoE said
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in 1989 that over half of all temporary housing is below the minimum acceptable standards. The Audit Commission said that it offered the lowest standards at the highest cost. One sees half a dozen families sharing a lavatory, and sharing gastroenteritis.
The circular suggests two more options for homeless families. First, the local authorities should help them to become owner-occupiers at the very time when one homeless family in 10 is homeless precisely because it cannot pay the mortgage. Finally—and here one detects the draft circular moving into a note of despair—it suggests that mobile homes, caravans and prefabs may offer good, permanent accommodation.
If one works through the 70 pages of this new draft central government circular to local authorities, it is transparently obvious that those who drafted it realised that the Government's sensible and civilised policies towards the homeless have been made impossible by their grudging, punitive policies towards local authority homes. Therefore all it can offer, I fear, is a litany of dead-end policies. Why? —because, as virtually every speaker in your Lordships' House tonight has insisted, only houses can house the homeless. We see around us the failure to invest in housing for a decade. At the moment investment in local authority and social housing is about one-third in real terms what it was a decade ago. The witnesses to that are in bed and breakfast accommodation or on our streets and I know on our consciences.
Others have mentioned that there is a new team in another place in addition to the noble Baroness, Lady Blatch. We know that she cares about homelessness. We welcome the new initiatives by the new Secretary of State and his team, even though so far they do not represent new money. We recognise that the Department of the Environment and the housing department pick up the responsibility for new and worthy initiatives that have been pioneered by other government departments. Do the Minister and her team believe in the philosophy of their own draft circular to local government, which is that they allow local government to have the resources—the cascade finance, if one wishes to call it that—of their own capital receipts? I hope the Minister can give us an undertaking that new finance will be made available. If not, homeless families will become the problem families of the next generation.
7.20 p.m.
Lord Winstanley: My Lords, as the noble Earl, Lord Longford, who has now left the Chamber, reminded us, there is a compelling reason why it is desirable to make short speeches this evening. If I do not consume the whole of my allotted time of nine minutes, I hope that will not be taken as a sign that I somehow underestimate the importance of this vital subject. No subject could be more important than this one. I believe that our present housing situation is endangering the nation's health and is contributing to the breakdown of law and order and the escalation of vandalism and crime. It is deepening the gulf between rich and poor and is condemning millions of citizens

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to live in conditions which should not be tolerated in a developed, industrial nation. The subject is as important as that. I, like other noble Lords, am most grateful to the noble Lord, Lord Stallard, for giving us an opportunity to debate this subject at such an opportune moment.
Strictly speaking, we should direct our remarks to the excellent report named in the Motion on the Order Paper. I hope the authors, John Greve and Elizabeth Currie, will forgive me if, like other noble Lords and in view of the opportune nature of this occasion, I say a few words about the subject in general. Many reports are written on this subject, as homelessness has been with us for years. A report has been published by SHAC on the so-called new homeless. That report underlines the fact that homelessness has now become a problem for the young. It now affects a different age group from those affected in the past. A report has also hen published by Shelter. As I have said, this subject has been with us for years. It is now almost exactly four years since I had the privilege of introducing a debate on this topic in this Chamber. A number of noble Lords who are speaking tonight took part in that debate.
We get reports on homelessness but no action. However, I am beginning to think that perhaps at long last we shall achieve some action on this matter. I see that the noble Earl, Lord Longford, has returned to the Chamber. I am sometimes suspected of being rather naive in occasionally accepting the good faith of Ministers when they tell the House of their intentions. Perhaps I am being naive again when I say that I feel a little optimistic at the moment as we now have a Prime Minister who, whatever else he may have done—he played cricket—spent nine years working extremely hard for a housing association in a deprived area. That means he understands homelessness and what it entails. The fact that we have a Prime Minister with that kind of background is a cause for hope.
I have worked extremely closely with the Secretary of State for the Environment, Mr. Heseltine, in his efforts in Merseyside. He has a deep understanding of the nature of inner city problems. I believe he has some of the solutions to the housing problem. I accept what Mr. Heseltine has said about his intention to reverse some of the less desirable steps taken by the previous Minister responsible for housing, Mr. Michael Spicer, particularly with regard to the Housing Corporation and leasing arrangements. I accept those statements in good faith. I also accept what Sir George Young has said. I accept him as a person who is wholly committed to doing something about the housing problem. I believe he really understands it. Now Sir George Young is in a position to do something about housing, I am prepared to believe that he will do what he has said he will do.
The Earl of Longford: My Lords, am I not right in saying that no new money will be made available?
Lord Winstanley: My Lords, the noble Earl must reserve questions of that kind for those who can answer them. I hope that new money will be made available. However, it is possible—this has been suggested by other speakers—that the money factor
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merely deals with the symptoms rather than the underlying disease. Perhaps new money will be available. I am merely saying that it is very welcome that someone is tackling the business of people sleeping out at night in our cities. I hope that something comes of that. I shall return to that matter in a moment.
I should have said a little more about the speeches that have been made this evening. I cannot comment on them all, but I must say how nice it was to hear three Bishops speaking with one voice. I wish to say a few words about the truly excellent maiden speech of the right reverend Prelate the Bishop of Bristol, particularly as he comes from Bristol. I acknowledge that that city has taught us many lessons on this matter. The right reverend Prelate referred to the health aspects of this problem. He referred to the number of people in bed and breakfast accommodation in Bristol. That is not a very high number. The right reverend Prelate may know that an article appeared in Health Trends only last week. I believe that magazine is published by the Department of Health. The article stated that a general practice in Bristol had taken steps to ensure that homeless people were registered on a general practitioner's list. I understand that a higher percentage of the homeless are on a general practitioner's list in Bristol than in any other city in Britain.
I realise, however, that other doctors have tried to make similar provision for the homeless. In his London general practice the son of the late Lord Stone —Lord Stone sat in your Lordships' House—has tried to help the homeless. I hope that the Minister will take note of such people as Dr. Stone and will ensure that those examples are followed all over the country. The health aspect of this problem is of immense importance.
I have said that I accept that there is a clear intention to tackle the symptoms of this problem. That is fine, but what are the Government going to do about the underlying disease? The underlying disease is a somewhat different matter. At the moment the real need is for houses and flats to rent. To provide such accommodation we need a rent structure which aims to cover costs with the help of a much fairer distribution than we now have of the total financial support for housing costs. I refer to statutory subsidies and benefits. Our absurd system of housing benefits is in an appalling muddle and it needs to be sorted out.
However, there are many other things that need to be done. There is the constant problem of what happens to the capital assets of housing authorities that have sold council houses. I accept what Sir George Young has said. He has said that in many cases capital sums have been accumulated in areas which do not have the most desperate need of new houses. However, the fact remains that all that money has gone into the public purse. It has not just disappeared. It must come out of the public purse, by whatever route, and be used for building the houses for rent which we now need. I do not know how that is to be achieved, but I hope that it will be achieved before very long.

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We must remember that at the moment the Government face another problem connected with homelessness: increasing unemployment. I do not have all the figures for this matter. When the debate that I have referred to took place four years ago I obtained lots of figures from the Government by putting down Questions for Written Answer. Therefore I was able to provide government figures and the Minister who replied to the debate could not contradict them. I did not repeat that exercise on this occasion. I realised that all the figures would have increased and some of them are meaningless. Four years ago the number of people on council house waiting lists was 1,400,000. It is meaningless to state that the figure has or has not increased between then and now. The fact remains that when a waiting list becomes very long—this has been shown to be the case in the health service—people do not bother to register. Therefore it is meaningless to state the number of people on waiting lists.
However, I can say that there are considerable numbers of unemployed construction workers. I do not have the precise figure for unemployed construction workers at the moment, but it is a fact that house building is, on the whole, a labour intensive occupation, as are house repairs and renovation. The part solution to the unemployment problem is staring the Government in the face; it is a vigorous attack on the housing problem. I hope we can proceed from a short-term measure to a long-term measure which will achieve what is necessary; namely, provide accommodation at affordable rents. I do not mind who provides that accommodation so long as it is provided.
7.30 p.m.
Lord Dean of Beswick: My Lords, I have the privilege of replying to a very important debate on one of the worst social problems that face us today. First, I should like to thank my noble friend Lord Stallard for initiating the debate. That comes as no surprise to me, because I have had a long association with him through organisations dealing with the problem, such as CHAR.
Like other Members of your Lordships' House, I was saddened by the passing of Lord Seebohm. I did not know about that until it was mentioned in this debate. The debate gives me a feeling of dÉjà vu, because we have dealt with the subject annually. The first debate that highlighted what would happen if the Government did not change their policy was initiated by Lord Seebohm following the publication of the report of the Duke of Edinburgh's commission on housing in Great Britain. It was followed intermittently by a series of debates in which it was pointed out what would happen if the Government did not alter their policies. The Government did not listen.
I should like to congratulate the right reverend Prelate the Bishop of Bristol on a magnificent maiden speech. I shall not go into details about other cities because the case was put perfectly by the right reverend Prelate and what he said about Bristol applies to all the other major cities in the country. The
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sad fact is that the problem is now spreading much wider than the cities which most of us have come to associate with the problem of homelessness.
Mention has been made today of cures for the problem. However, we have to ask ourselves what brought us to this situation. I do not have the same optimistic view as the previous speaker of the actions of Mr. Heseltine now that he is back in the Department of the Environment. Nor do I share the optimism about the new Prime Minister now that the ice maiden has gone, in view of his replies yesterday to the Leader of the Opposition when Mr. Kinnock questioned him on the housing situation.
Let us have a look at where it all started, taking the London boroughs, which are the pressure points. In 1978–79 the London boroughs and the GLC combined received £1,785 million pounds of government money to help deal with their housing problems. By the time Mr. Heseltine left the Department of the Environment in 1983 that had been cut to £965 million. The latest figures, for 1988–89, show that the amount was cut further to £413 million. That is an enormous cut.
On a global basis, when Mr. Heseltine took control of the Department of the Environment last time, the aggregate national figure for local authority housing was £5.266 billion. It is now down to £1.127 billion. As Mr. Kinnock said yesterday (and he included other figures), the Government have cut £6 billion from public sector housing during their term of office.
Why do I say that I am not keen on the new Prime Minister's outlook on housing? The previous speaker referred to the fact that the new Prime Minister had connections with housing associations in the past. I understand that he was also chairman of the Lambeth local authority housing committee for a time. I also know that he was a defeated parliamentary candidate in the constituency of the noble Lord who has sponsored this debate, my noble friend Lord Stallard.
Let us see what the Prime Minister had to say yesterday. The Prime Minister was asked:
"Will the right hon. Gentleman confirm that the number of homes being built in Britain is at a lower level than at any time since the First World War?"
The Prime Minister answered:
"I confirm to the right hon. Gentleman that over the recent few years more people have moved into home ownership and we have had a higher quality and standard of housing than ever before".—[Official Report, Commons, 18/12/90; col. 151.]
Would he dare tell that to the increasing number of homeless people? The lack of compassion from a new Prime Minister, to whom we are looking for hope, is towering. I do not believe that housing policies will change at all.
The discussion continued. Mr. Kinnock asked:
"Will the Prime Minister then acknowledge, first, that during the time that he has been Chief Secretary to the Treasury, Chancellor of the Exchequer and now Prime Minister, the Government have made huge cuts in housing budgets?"
The Prime Minister replied:

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"In his list the right hon. Gentleman wholly overlooks the remarkable changes made to the voluntary housing movement, housing associations and action on homelessness".
We all know that the voluntary housing movement's building programme is declining. So where is the optimism there?
There have been suggestions about what ought to be done about the problem. One can only repeat the arguments that have been put in the past. I wish that the Government would ditch the policies of the last Prime Minister. That request comes not only from me; it also comes from some Members of your Lordships' House in her own party who have been involved in local government. It has been said that the Prime Minister who recently resigned has a pathological hatred of local authorities, and that view is shared by some of her own supporters.
It is no good the Minister, Sir George Young—for whom I have a great deal of respect—saying that the Government are still looking to the voluntary agencies and housing associations to solve the problem. In his maiden speech the right reverend Prelate talked about there being a need for 100,000 new properties for letting in the public sector a year, which means 1 billion new properties by the turn of the century. There is a government report in being which says that double that number is needed to deal with the problem and eliminate homelessness in that time. In the present situation there is no possibility of achieving that.
Various figures have been quoted tonight. I recall that last year or the year before figures were produced by a charitable organisation which deals with homeless people in London showing that 10,000 people were sleeping rough in London. It was predicted that unless the Government took serious and immediate action and pumped huge sums of money into a building programme for rentable housing 30,000 people would be sleeping in the streets of London by the turn of the century.
It would appear from what the Prime Minister said yesterday that the housing situation has improved. I recall that when I first became a Member of Parliament I used to stay near St. Pancras. I often used to come down the Strand, and I do not remember seeing anybody sleeping in a box at that time. When I was the chairman of housing in Manchester there was a population of over 600,000 people; I do not remember seeing anybody sleeping in a box in Piccadilly. The population of Manchester is now just over 400,000 and there are hundreds of people sleeping rough. The same can be said for every city.
The fact that resources have been cut is not the only cause of the problem. Other causes are the demographic changes, the fact that youngsters want to leave home earlier, broken marriages, and so on. However, the Government must take a heavy responsibility for the situation.
Why has the problem now developed a high profile? For two or three years I have been saying that the Government were getting away with it because we had mild winters. According to all the predictions we now face a severe winter. In my opinion, although the
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Government are taking action now, even that may he too late to prevent some of the carnage that will happen in London and our other big cities as a result of the Government's policies. Will they change them and let the local authorities resume their historic role of building houses for their own people to live in? I remind the House that 15 years ago more than 6 million families were living in local authority housing. Most of them were well housed and most of them were satisfied. It is about time that the Government threw away their political shackles and dealt with this social problem instead of running on political tramlines.
7.40 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch): My Lords, I should be one person in the Chamber who would not be forgiven, or perhaps would be misinterpreted, if I were to cut short my reply because there is to be a party for the staff in the House. I give my apologies to them, but I feel that this is an important debate. Perhaps I could also join with other noble Lords in offering sincere congratulations to the right reverend Prelate the Bishop of Bristol. His was an excellent speech, delivered with great sensitivity and skill. He has brought to this Chamber his enormous experience and detailed knowledge of Bristol and brought to our attention some of the imaginative things that are taking place there. We look forward to hearing more from him in the course of our deliberations.
Homelessness is an important subject, the causes of which are many and varied. As has been made clear throughout the debate, the solutions are indeed complex. However I want to start by referring to the announcement which was made yesterday by my honourable friend the Minister for Housing and Planning about accommodation for people sleeping rough on the streets. I am sure noble Lords will agree that it demonstrates the Government's determination to tackle the problem.
Before I address the detail, however, I want personally to pay tribute to Mr. Spicer. He was the predecessor of my honourable friend the Minister for Housing and laid much of the foundation for yesterday's package of measures. He secured the funding for it and in his absence I wish to recognise that in the course of this debate. The most serious aspect of homelessness and the most urgent is the problem of people sleeping rough on our streets, particularly in London. The Government have taken a number of steps to deal with this.
Perhaps I may make a passing comment to those who somehow or other believe that the problem is being neglected elsewhere. It has to be said that, yes, one-third of the problem is in London but it is concentrated in one place, whereas two-thirds of the problem is scattered throughout the country. If one has to target and determine a priority, at this moment the priority has to be those who are sleeping rough on the streets of London. There are now some 23,000 hostel places in London but they are almost all full. It is to the blockage in hostel places that our present initiative is directly targeted.

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There are estimated to be between 2,000 and 3,000 people sleeping on London's streets. The Government have allocated £96 million over three years to provide additional accommodation to deal with the problem. The resources will be used to pay for short-term direct access hostels and permanent accommodation for people in hostels to move on to. That was a point well put by many noble Lords. It is urgent to get roofs over heads. However, my noble friend Lady Faithfull reminded the House that one has to think long-term about the accommodation needs for those people.
The main points of my honourable friend's announcement yesterday were: 320 new hostel places in direct access schemes to be run by housing associations and voluntary groups, some of them still subject to local authority agreement, bringing the total of hostel places so far under this initiative to 460—and more will be announced after Christmas. These places will begin to become available over the next few weeks. Seven hundred places will be provided by housing associations in shared and self-contained flats and houses for people in hostels to move on to, becoming available in February and March. That adds up to a total of more than 1,100 additional bedspaces for people sleeping on the streets. These schemes will absorb most of this year's £15 million. The rest will be allocated to schemes that we shall announce after Christmas.
We are working with the specialist associations which will provide hostel accommodation to ensure that people sleeping in areas such as the Bullring at Waterloo, the Strand and Victoria use the hostels. The hostels will provide not only accommodation but counselling and advice as well. That was another point which was very well made in the course of this debate. Outreach workers will be dealing directly with the people on the streets.
My honourable friend also announced that Nick Hardwick, the director of Centrepoint at Soho, a voluntary body dealing with young homeless people, will be working with him on the initiative over the next six months. The intention is that the department and the voluntary groups together will develop strategies to deal with specific areas. St. Mungo's will focus on the Bullring, Church Housing on the Victoria area and we are discussing other areas with other associations.
We have a further £81 million allocated for the next two years, of which £60 million will be for capital expenditure and £21 million for running costs. The capital allocation will be spent largely on permanent accommodation for single homeless people. These resources will be allocated to housing associations in London through the Housing Corporation. They are separate from the Housing Corporation's main programme.
We are also working up a pilot scheme for a rent deposit fund to enable single homeless people to gain access to private rented housing. That was the point made by the right reverend Prelate. The fund will be administered by a voluntary agency on behalf of my department.
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Those new hostel places will begin to become available in the next few weeks. The housing associations and voluntary bodies concerned are working flat out to get them ready. We are concentrating for the moment on central London because that is where the problem of rough sleeping is at its worst. But my honourable friend has made clear that the programme could be extended to other areas if necessary. Indeed, what is happening in London does not preclude any imaginative scheme anywhere in the country where that is a particular problem. The immediate objective is to reach a position in which it is unnecessary for people to sleep on the streets of central London.
Noble Lords will be aware that the organisation Crisis will run its Open Christmas from 22nd to 29th December. Again I pay tribute to a number of noble Lords in this House who have an involvement, in particular the noble Lord, Lord Murray of Epping Forest, and my noble friend Lady Macleod of Borve, who is not present in the Chamber this evening. The accommodation will be provided for up to 800 homeless people at 6 Pages Walk, S.E.1. It is my understanding that in the course of a week as many as 1,800 people will in fact pass through the doors. I pay tribute not only to those noble Lords in this Chamber who work so closely with that organisation but to everybody who works for it. I hope that by next Christmas our initiative will mean that demands on them will be significantly reduced.
I should also mention the Department of Health initiative for mentally ill homeless people. The Parliamentary Secretary for Health announced plans on 12th July to offer accommodation and psychiatric care to mentally ill people sleeping rough on the streets of central London. The programme will include the funding of additional specialist short-term hostel places and new community-based psychiatric teams, with the provision of longer term accommodation through the Housing Corporation. We are confident that this initiative will make a significant contribution towards meeting the needs of central London's homeless mentally ill population. We also hope that the approach developed will prove a useful model for other parts of the country.
Perhaps I may just add a few words here. My memory does not give me specific recall on this matter, but I know that I personally was responsible for taking through the code of practice for discharging mentally ill patients into the community where the arrangements for those people have to be much more rigorously provided for than they have been in the past. Again my hope is that the system is being well scrutinised and that it will be effective.
The noble Lord, Lord Stallard, criticised considerably the housing policy of the Government. Most people want to own their own home and our policies have brought home ownership within the reach of more people than ever before. There is no overall housing shortage. However, we recognise that there is a need for additional subsidised housing in some areas for those who cannot afford to buy or who cannot afford private rented accommodation. That need not

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mean building more council houses. We have encouraged authorities to investigate alternative ways of increasing the provision of rented housing rather than themselves building. Those include the sponsorship of housing association schemes and promoting the expansion of the private rented sector through assistance to private landlords and developers.
The Government see housing associations replacing local authorities as the main providers of new subsidised housing. We have reformed housing association finance to allow the maximum use of private money to supplement public funds. Public funding for the Housing Corporation will increase from £1.1 billion this year to over £2 billion by 1993–94, providing for a sustained increase in output of subsidised housing for rent by housing associations.
The total housing public expenditure programme remains very large. Next year around £3 billion is likely to be available for local authority housing capital investment, of which over two-thirds will go on the repair and maintenance of the existing stock. Another £1.1 billion will go on subsidising local authority and housing association current expenditure. Together with the increased capital resources for housing associations, that represents a very substantial public investment in housing in addition to the £3.5 billion a year spent on housing benefit, and the £7 billion a year in tax relief to owner occupiers.
The first priority in addressing the problem of homelessness must be to try to prevent it. Again it is an important point which was emphasised by the noble Lord, Lord Murray of Epping Forest. Many people, both individuals and families, become homeless because they do not seek or receive suitable and timely advice to help them sort out their financial difficulties and explore further the employment opportunities and housing options available to them. In the past, housing advice has been provided on a somewhat haphazard ad hoc basis, variable both in quality and accessibility around the country.
In response to this need the Government have taken Positive action. The sum of £2 million is being made available to voluntary organisations this year, increasing to £4.5 million next year, specifically to provide special support and help to the homeless. Around half of this year's money will go to set up a national homeless advice network, run through citizen' advice bureaux, with expert support and training from Shelter and SHAC, the lead housing advice agencies. The remaining £1 million or so has been allocated to some 27 voluntary groups around the country, offering young homeless and rough sleepers practical help and assistance to find accommodation. Those include the excellent project —praised by the right reverend prelate the Bishop of Bristol—by the Bristol Cyrenians.
We expect that these projects will enable around 5,000 single homeless people to find temporary accommodation, and more than 1,500 to secure permanent housing; and the National Association of Citizens' Advice Bureaux (NACAB) forecast that, in a full year, the CABs will provide advice to over
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80,000 households who are homeless or threatened with homelessness. These resources are, of course, additional to the £11 million core funding given by the Government to NACAB and its Scottish counterpart in support of their general advice service. Many local authorities also operate advice services to people threatened with homelessness.
We hope that the emphasis we are giving to prevention means that, in future, fewer people will find themselves homeless without having first had the opportunity to explore other housing options available to them with the help of expert advice, and —dare I say it, since the noble Lord, Lord Murray made the point? —of being warned what electing to leave home can involve.
Good management in terms of making best use of occupied stock is also clearly vital. A disturbing finding emerging from recent research is that around two-thirds of local authorities (and 70 per cent. of housing associations) simply do not maintain records in a form which enable them to know how their stock is being occupied and thus what potential there may be for better management in that area, in particular to minimise under-occupation of stock. Clearly more could be done in that area.
The Audit Commission's 1989 report on homelessness pointed out that some hard-pressed authorities, even with the most efficient management of stock, required extra resources to help them meet their statutory homelessness duties. Professor Greve's report echoed that, calling upon the Government to release new money to authorities to improve their service to homeless people. That we have done.
The homelessness review recognised the need for extra targeted resources to assist in pressure areas. The sum of £300 million is being allocated this year and next to local authorities and housing associations in London and the South East. Our first priority has to be to reduce the use of bed and breakfast hotels for families. The additional funds will therefore go to schemes to provide additional permanent lettings for homeless people, thus reducing local authorities' dependence on temporary accommodation, particularly on bed and breakfast. Much of this money is directed at bringing empty local authority and housing association properties back into use.
The sum of £227 million has been apportioned to local authorities and £73 million to housing associations via the Housing Corporation; £148 million-worth of schemes have gone forward this year already. We expect around 7,500 new lettings to be created as a result of this year's programme and we shall be looking to local authorities and housing associations to deliver the maximum output possible next year with realistic and cost effective schemes.
The noble Lord, Lord Stallard, asked; why London? We accept that the pressures are in London. I have already explained why we have targeted London first. But my honourable friend has already announced that the factor for homelessness in grants to local authorities is to be given added weight and that that will be fed into the system in the coming year.

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The other main focus for the additional homelessness allocations will be cash incentive grants to encourage tenants to move into owner occupation. We gave local authorities power, under the Housing Act 1988, to pay grants to help their better off tenants to buy homes on the open market, thereby releasing vacancies for re-letting to the homeless and others in need. Registered housing associations can give similar grants to their tenants under the Housing Corporation's new tenants' incentive scheme, which was launched this summer. These schemes offer a very cost-effective way of securing vacancies, and further increasing the supply of rented accommodation for those in priority need.
So far this year, my right honourable friend has given approval for 95 local authority cash incentive schemes. If fully utilised these could create up to 2,500 vacancies for reletting. A similar number of housing association vacancies could be released this year under the tenants' incentive scheme.
Finally, I must mention the important question of the service that authorities provide on a day to day basis to the homeless. Much of the stress caused by homelessness can be relieved by sympathetic and efficient handling of applications by local authorities.
The right reverend Prelate spoke of the sluggishness in the system and about how long it can take to get such schemes off the ground. The DoE research has shown enormous variations in the interpretation of duties and treatment of applications. Therefore, following the homelessness review, my department undertook to revise the code of guidance on homelessness to try to establish guidelines for consistent and fair treatment. That we have done and are currently consulting the local authority associations on a draft revised code.
This has been a brief tour of the initiatives that we are taking to help relieve and reduce homelessness. My intention tonight has been to demonstrate that the Government are taking action to help all homeless people and that we indeed care.
I was challenged by the noble Earl, Lord Longford, who stated that if I could defend government policy I should be something of a mad genius. That is something that I have never been called before. However, there is no complacency on this side of the Chamber about these problems. I was attracted by the comment made by the right reverend Prelate the Bishop of Manchester: it is a problem that has affected all parties over many years and we need a consensus approach to the issue. What can be said in defence of the policy is that owner occupation runs now at 69 per cent. It has increased by 3.7 million since 1979. The condition of housing has improved substantially over those years. The number of houses classified as unfit has declined very substantially. The number of houses lacking basic amenities has also declined substantially.
The policy now is to direct what public money is spent at those most in need. The sum of £300 million has been allocated to local authorities for that purpose; and £96 million is being spent nationally by
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Government on direct intervention. We are deeply concerned about the increasing number of households accepted as homeless by local authorities and the number of families forced to live in temporary bed and breakfast accommodation. That is why in the areas where pressures are most severe we have responded positively by allocating £300 million to local authorities.
In addition we have recognised the importance of helping those at risk before they become homeless by funding the national homelessness advice service. For those who are homeless, and in particular young single people who despite such assistance eventually become homeless, we have greatly increased funding to those voluntary organisations working in the front line to help them find temporary and permanent accommodation.
I wish again to emphasise the package of measures announced yesterday, which represents positive and urgent action to speed up the system to serve the needs of people living on the streets of our city of London.
I have not referred to many other detailed points. However, one that arose time and again related to local authorities spending capital receipts. I must respond to that. There is a simplistic view that, somehow or other, if local authorities could spend their capital receipts these problems would be resolved. It is a matter of fact that where the receipts are greatest the needs are least. The problem is that the receipts are not where the needs are greatest. In order to achieve that, local authorities will spend 25 per cent. of their receipts, leaving three-quarters of the money allocated through the HIP allocations. Therefore, the Government can direct HIP allocations to the authorities in the greatest need. That will allow those authorities whose receipts are high and which have more disposable income to use their own moneys to fund their housing programmes. The important matter is targeting, and that is being done.
The right reverend Prelate the Bishop of Manchester undervalues the House of Lords in its ability, and the frequency with which it exercises it, to take an apolitical view of any issue. I believe that this issue is a candidate for an apolitical approach.
Our current initiatives are not and cannot be a panacea to solve once and for all the problem of homelessness. However, they represent a determined step in the right direction. The need to reduce and relieve homelessness underpins all our housing policies. We are deeply conscious of the misery and degradation that many people experience as a result of homelessness. Contrary to what our critics might say, we care. My aim this evening has been to show the extent to which expressions of care and concern are being matched by concrete action.
Lord Stallard: My Lords, in the few seconds left in the debate I wish to associate myself with the tributes paid to the late Lord Seebohm by the noble Baroness, Lady Faithfull. We were all stunned and shattered by his tragic death earlier this week. Ever since I have been a Member of this House, and particularly during

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the past few months, I have worked closely with him on another project. Only as recently as last Thursday we were making plans for a meeting today.
I thank all noble Lords who took part in the debate, particularly the right reverend Prelate the Bishop of Bristol. His maiden contribution was excellent. We thoroughly enjoyed it and look forward to hearing many more contributions in the same vein.
I should like to give in to the temptation to make an off-the-cuff response to everything that the noble Baroness said. I recommend only that she reads some of the Shelter publications. The recent publication, No New Homes, and today's publication, Waste Money Waste Lives, answer most of the points that she made.
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It is a sad fact that the initiatives have not worked as they were intended to. There is something wrong in that they are not being taken up by the people at whom they are aimed. The noble Baroness should look at that problem.
I shall return to the subject at the earliest possible moment after the Recess. I intend to maintain pressure for changes in the appropriate legislation until we rid this country of the scourge of homelessness and bad housing. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.
House adjourned at four minutes past eight o'clock.