Lords Sitting of 15 January 1992

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

Channel Tunnel Traffic: Customs and Excise
Lord Astor of Heverasked Her Majesty's Government:
What role they envisage for HM Customs and Excise in the examination of Channel tunnel traffic either on-train or at terminals given the existence of a single European market.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, Customs' role in relation to traffic through the Channel tunnel will be the same as for other intra-European Community traffic following the completion of the single European market. It will remove all fiscal and Customs formalities at internal frontiers, permitting the freest movement of legitimate traffic, both passengers and freight. All that will remain will be essential anti-smuggling checks focused upon major dangers to society, such as drugs. Checks for that purpose will be highly selective, relying upon improved intelligence assessments and closer co-operation with businesses and with enforcement agencies overseas.
Lord Astor of Hever: My Lords, I thank the noble Minister for that helpful reply. Can I assume, therefore, that there will be no need for any form of Customs inspection either at Waterloo or the proposed stations at Ashford or King's Cross?
Lord Brabazon of Tara: My Lords, there will be a Customs presence at tunnel termini but that will be limited to anti-smuggling staff who will conduct spot checks of the type which I indicated in my original Answer. Those checks will be highly selective and targeted and of minimal inconvenience to the travelling public. They will not involve the introduction of a red and green channel system and all the traditional features of Customs control. However, with 62 per cent. of the total weight of drugs seized by Customs last year coming from or via other EC countries those checks will form a vital part of an integrated enforcement effort by Customs and police.
Lord Hailsham of Saint Marylebone: My Lords, can we assume that the Commissioners for Customs and Excise will appoint a responsible tom-cat to intercept intrusive rodents?
Lord Brabazon of Tara: My Lords, I shall certainly bear that suggestion in mind. I have a cat which might be suitable for the job.
Lord Thomson of Monifieth: My Lords, will the Minister explain how his answers are consistent with what I understand to be the Government's proposals for Ashford, which involve physical separation between the international station and the local station so that there will be no easy communication between the two?
Lord Brabazon of Tara: My Lords, I am not aware of the exact physical characteristics of the proposed station at Ashford. However, as I have said, the checks necessary will be minimal and should involve very little inconvenience to the travelling public.
Lord Harmar-Nicholls: My Lords, can my noble friend explain the difference between what he calls a spot check and the procedure now adopted at all ports, because I do not see any difference?
Lord Brabazon of Tara: My Lords, there will be no red and green channels. People will go through a reception hall and may or may not be picked out for inspection.
Lord Donoughue: My Lords, I am sure that the taxpayer will be intrigued to see whether the numbers of Customs and revenue officers decline after a period. Bearing in mind that UK citizens will be able to bring into the UK 60 litres of champagne, 90 litres of wine and a kilogram of rolling tobacco will the Minister confirm the estimates of the loss of revenue to the Treasury of about £½ billion a year? Will he tell us what steps the Government are taking to promote harmonisation of duties after that period and whether those potential losses were taken into account when considering the pre-election tax cuts?
Lord Brabazon of Tara: My Lords, I have to admire the noble Lord for his ingenuity in introducing a number of subjects which bear no relation to the Question on the Order Paper.
Lord Williams of Elvel: My Lords, would the noble Lord care to enlarge on his reply to the noble Lord, Lord Harmar-Nicholls? It seems to some of us to be very odd that there should be no red and green channels and yet apparently, according to the noble Lord, the procedure will be exactly that followed at the present red and green channels at the various entry points into the United Kingdom. How is that to be managed in a large entry hall through which people will come and go all over the place? What exactly is the Government's intention? How do they propose to conduct the spot checks? What will those spot checks be designed to achieve and who will be caught? Are the Government satisfied that they will be able to catch anybody who is smuggling the sort of material which the noble Lord has in mind?
Lord Brabazon of Tara: My Lords, the purpose of the spot checks is indeed to catch people carrying illegal materials. The purpose is not to charge duty. There will be no duty-payable goods which need to be caught up. The selective work will rely, as it does to some extent at present, on an advance assessment of risk using improved intelligence, trade co-operation

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giving access to commercial records through memoranda of understanding and co-operation across frontiers.
Lady Kinloss: My Lords, does the Minister agree that, if it is easier for people to smuggle dogs or cats into the country, that is likely to spread rabies?
Lord Brabazon of Tara: My Lords, it is not easy for people to smuggle in dogs or cats.
Lord Mackie of Benshie: My Lords, perhaps the Leader of the House will rule on the expression "the noble Minister". As I understand it, a Lord is automatically noble, but the nobility of a Minister is a matter of opinion.
The Lord Privy Seal (Lord Waddington): My Lords, I shall consider the matter carefully and perhaps return to deal with it at some considerable length tomorrow.

Severe Disability Premium: Appeals
The Countess of Marasked Her Majesty's Government:
Whether they can confirm that there are some 3,500 cases waiting hearing by the Independent Tribunal Service in Birmingham for claims for income support severe disability premium for the period from April 1988 to October 1989, and how many cases are waiting hearing in other regions.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, on 31st December 1991, 1,407 appeals involving the severe disability premium were awaiting hearing by the Independent Tribunal Service in Birmingham. Some of those cases may have received payment of arrears due for the period April 1988 to October 1989, but it is not possible to identify precisely how many. Nationally, some 16,758 such appeals were then waiting to be heard.
The Countess of Mar: My Lords, I thank the Minister for that reply. In view of the fact that we disagree on the number of cases—I gather that countrywide there are far more cases than the noble Lord says—and that there has been a commissioner decision which accepts that payments may be made for 12 months (in other words, back to October 1988), would it not be better if adjudication officers were allowed to arrange for payment directly to the clients and if appeals were placed just for that six-month period instead of for the whole block?
Lord Henley: My Lords, I suspect that we might be talking at cross purposes here. As I said, there is that number of cases in Birmingham and there are some 16,000 or 17,000 cases nationally awaiting consideration by the independent appeal tribunal. As the noble Countess suggests, there may be considerably more cases which are waiting on the decision to which the noble Countess referred as the "commissioner decision" and by which I suspect she means the Foster decision. That decision was made by the commissioner
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and was reversed on appeal by the Court of Appeal. The matter has now gone to this House and we are awaiting a decision as a result of the deliberations of this House. Obviously, no post-October 1989 payments can be made until a decision is made in that case. As regards any pre-October 1989 payments —those from April 1988 to October 1989—it is quite possible for those to be decided by the tribunal and paid by my department.
Baroness Hollis of Heigham: My Lords, will the Minister say, following the narrowing of eligibility for severe disability premium in October 1989, how many severely disabled adults lost their right to that benefit and what saving, net of any transitional arrangements, there has been to the DSS as a result?
Lord Henley: My Lords, in October 1989 we made certain changes to bring the eligibility for severe disability premium back to the criteria as set out in 1986. Those criteria were made clear by my noble friends Lord Whitelaw and Lady Trumpington in this House and by my right honourable friend Mr. Newton in another place. At the time they said that some 10,000 people would be entitled to severe disability premium. I am advised that at present some 62,000 people are entitled to and receive that premium.
Lord Ennals: My Lords, was the purpose of that change in eligibility to save the department's funds or has it meant that more money has been paid out to severely disabled people?
Lord Henley: My Lords, I can only repeat what I have said. The change in October 1989 was to bring the criteria for eligibility back to those set out in the Act, as explained when the Bill went through Parliament, and as understood by the noble Lord, Lord Ennals, at that time. I can quote the noble Lord's words on that occasion if he so wishes.
Lord Ennals: My Lords, I am sure that the House would not wish to be bored by my repeating my words, but perhaps the Minister will answer my question: was there a saving to the department's funds as a result of the change in eligibility?
Lord Henley: My Lords, obviously, if we had not made that change there would have been a dramatic growth in eligibility for severe disability premium in a manner that was not originally intended. We intended to bring the eligibility for the premium back to the criteria as laid out in the original enactment.
Baroness Hollis of Heigham: My Lords, perhaps I may trouble the Minister again. Following appeals through the courts, was not the interpretation of the previous criteria for eligibility widened in ways that were understood by the Law Lords to embody the spirit of that Act? As a result, did not the Government deliberately change the Act in October 1989 to reduce eligibility in ways that may perhaps have related to the original Act, but were certainly not consistent with Court of Appeal interpretations?
Lord Henley: My Lords, I am afraid that the noble Baroness is totally incorrect. The change in October

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1989 was made in anticipation of a decision made by the commissioners some time in May 1990. The only case that has gone to the House of Lords is that of Foster. We are still awaiting a decision on that case, but it has been to the Court of Appeal where the department won.

Marine Nature Reserves
2.48 p.m.
Baroness Nicolasked Her Majesty's Government:
What progress has been made in the establishment of marine nature reserves.
Earl Howe: My Lords, two sites at Lundy and Skomer Island have been designated. The appropriate successor bodies to the Nature Conservancy Council are continuing the necessary consultations with interested parties at Lock Sween and in the Menai Straits.
Baroness Nicol: My Lords, I am grateful to the noble Earl for his Answer. Does he recall that in 1981, when the Act came into force, seven sites were identified? As we have just heard, only two of those have been designated in the 10 years which have passed. Can we therefore take it that the Government are no longer behind that concept? Is it the case that they are now discussing marine consultation areas which in fact are purely voluntary and will have no statutory backing at all? Will that be the Government's preferred route from now on?
Earl Howe: My Lords, I understand the disappointment of the noble Baroness, but as has been said before from this Dispatch Box, in practice there is only one way to reach an arrangement that will work effectively; namely, to obtain a consensus among all interested parties at a particular site. Unfortunately, it is inevitable that it takes a good deal of time.
With regard to marine consultation areas, the Government will shortly be initiating a consultation exercise on an MCA scheme which aims to ensure full consultation between conservation agencies and all major sea users and regulators, including government departments, wherever proposals are made which could adversely affect designated marine sites of great conservation value. We regard that initiative as complementary to that of the marine nature reserves (MNRs).
Lord Renton: My Lords, is my noble friend aware that the continued pollution of our coastal waters by oil from ships, by sewage from the land and sometimes by industrial effluent makes it rather urgent that we should establish more marine reserves? Do the Government intend to try to push people into getting ahead with that?
Earl Howe: My Lords, the Government are committed to a review of the existing legislation and other matters relating to the marine environment. In this context the important EC habitats directive agreed last month will eventually lead to a network of special areas of conservation to be known as Natura
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2000, which will include marine sites as well as terrestrial sites. Each site will be of international importance for the conservation of rare or vulnerable flora and fauna and their habitats. The Government will consider the best way to meet their obligations under the directive. They intend to put their proposals before Parliament before the directive comes into force.
Lord Williams of Elvel: My Lords, does the noble Earl accept that responses from the Government Dispatch Box have been totally consistent, as have the questions from the Dispatch Box on this side of the House? Does he agree that the problem is how to achieve consensus? Does he further agree that unless the Government decide that there are some people who will never agree to marine nature reserves and therefore should be ruled out of court—in the sense of achieving a consensus—marine nature reserves will never be designated other than on a very long-term basis?
I refer the noble Earl to his response on the Menai Straits. Will he confirm that the difficulty lies with the yachtsmen in the Menai Straits? Will he also confirm that the difficulty in Skomer was with the Sub-Aqua Divers' Federation? Does he agree that in every case there is one interest which can hold up the designation of a marine nature reserve? Can he say what is happening with regard to the Menai Straits? Are the Government prepared to make sure that a consensus is not the only thing that matters and that what is important is the protection of our marine environment?
Earl Howe: My Lords, the Government are committed to establishing MNRs. I should not be prepared to use the word "never" in the context mentioned by the noble Lord. I wish the solution were as simple as waving a magic wand or the Secretary of State imposing a designation. However, the fact of the matter is that there are real complexities in taking account of the legitimate interests of those who use the sea for either their living or recreation. For that reason we feel that consensus is the only practical way forward.
With regard to the Menai Straits, progress is being made. Following the publication of the consultation paper in September 1988, the NCC for Wales, as it then was, received about 175 responses, the majority in support of the proposals, but 25 against them. Despite widespread support, there remains limited but determined opposition to the reserve mainly, as the noble Lord said, from the yachting fraternity. A revised version of the consultation document which takes account of some of the objections is in preparation, but it is unlikely that those objections will be withdrawn. Under those circumstances the Countryside Council for Wales (CCW) considers that some form of public inquiry will have to take place if the reserve is to proceed.
Lady Saltoun of Abernethy: My Lords, can the noble Earl tell the House the position regarding the

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proposed Loch Sween nature reserve where a number of local inhabitants objected on the grounds that their livelihoods would be endangered?
Earl Howe: My Lords, Loch Sween is a good example of the practical difficulties that have been encountered. As noble Lords will know, it was scheduled to be the first MNR in Scotland. But there have been widespread and deep concerns about the original proposals which were published in August 1990. Therefore, the way forward is through a continuing process of close liaison with all those who have an interest in the loch. To that end the south-west board of the Nature Conservancy Council for Scotland (NCCS) has appointed a member of staff dedicated solely to the task of dealing with issues of Loch Sween. He is to act as a focal point for future discussion with the local community over the proposed MNR. That process is bound to be a lengthy one, but the case illustrates well the difficulty of achieving a satisfactory MNR designation when there are differing views and fears that local life will be interfered with.

Lamb Exports to France
2.56 p.m.
Lord Boyd-Carpenterasked Her Majesty's Government:
Whether full compensation has now been paid to British exporters of lamb to France in respect of the damage caused to their product by attacks on that product in France; and whether these attacks have been repeated in recent months.
The Earl of Strathmore and Kinghorne: My Lords, of the nine claims for compensation submitted on behalf of British exporters since summer 1990, the French authorities have paid three and agreed to pay four others. The two outstanding claims are currently under consideration. There have been no reported incidents in France since 21st October 1991.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Does it indicate that the action taken by Her Majesty's Government has succeeded in checking that very unpleasant activity by a number of French farmers? Can we hope that it will not be repeated?
The Earl of Strathmore and Kinghorne: My Lords, I certainly hope to reassure my noble friend that such is the case. The French authorities have provided special protection to consignments travelling through France and the police have been brought in where necessary. As I said, there have been no further incidents since October.
Lord Bruce of Donington: My Lords, will the noble Earl confirm that the term "full compensation" as used in the Question comprises the full intervention price of the material plus interest to the farmers concerned? Or was it some compromise compensation that was agreed?
The Earl of Strathmore and Kinghorne: No, my Lords. So far as I understand, that is not paid. But the figure to which we referred in an earlier Question —I believe it was last November—was not conjectural.
Lord Harmar-Nicholls: My Lords, is there any evidence to show that the people who organise the damage to British exporters pay part of the compensation? Does he agree that, although the French Government may impose it as a matter of general taxation, that does not put an obstacle into the way of people who on more than one occasion damaged our exporting potential?
The Earl of Strathmore and Kinghorne: My Lords, I understand that 20 people have received suspended prison sentences and fines in the first cases on which judgments have been pronounced. Further judgments are still outstanding. The Government are encouraged by the willingness of the French authorities to press for prosecution.
Lord Mackie of Benshie: My Lords, can the noble Earl tell the House the value of that trade with France and how it compares with the trade in lamb to Germany? Does he agree that the German market is one which ought to be exploited? The Germans eat little lamb and are both rich and like their food. Does he feel that it would be a very useful market which at present is neglected?
The Earl of Strathmore and Kinghorne: My Lords, France is by far our biggest export market. In 1990 we exported 64,000 tonnes of meat and livestock—71 per cent. of our export trade. Exports to other member states comprised 24,000 tonnes, with only 2,300 tonnes going to third countries.
So far as concerns Germany, the Meat and Livestock Commission exhibits at European trade fairs, including Berlin Trade Week, at which British lamb would be exhibited and thus promoted.
Lord Molloy: My Lords, does the noble Earl agree that there are many aspects of grave importance in the question put by the noble Lord, Lord Boyd-Carpenter? Will he say what representations were made to the Government of France? What further representations will be made if all the British exporters who have suffered are not compensated properly? That is one of the many thrusts of the Question.
The Earl of Strathmore and Kinghorne: My Lords, I can only repeat what I said at this Dispatch Box last November; that is, that the French Government have given assurances on several occasions that compensation for losses arising as a direct result of incidents will be paid.
Lord Stoddart of Swindon: My Lords, will compensation extend to the drivers of the lorries? They are frightened, terrorised, and sometimes injured during attacks by French farmers. Will the noble Earl answer that?
The Earl of Strathmore and Kinghorne: My Lords, the noble Lord raises an interesting point. However,

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my understanding is that to date there have been no attacks on drivers. It is only the sheep in the lorries that have been attacked.
Lord Gallacher: My Lords, have Her Majesty's Government any contingency planning against the possibility of the resumption of those attacks? We on this side of the House deplore such attacks. Will the noble Earl say whether there is any element of selectivity in the attacks which have so far taken place? I have in mind the fact that the exports of lamb to France from the Republic of Ireland are on the increase. The noble Earl has already said that France is our most important market. The change in the sheepmeat regime now in force means that the United Kingdom will have considerably to increase its exports to France if the disadvantages inherent in the change are to be avoided. Is there any element of selectivity or is it simply that the Irish are better at marketing than we are?
The Earl of Strathmore and Kinghorne: My Lords, a system was introduced in October 1991 involving the Meat and Livestock Commission and the British Embassy in Paris to provide details to the French authorities of consignments bound for France in order that appropriate police protection could be afforded. That system was suspended in December following a sustained period of calm. However, it could easily be reintroduced.
On the noble Lord's other point, incidents have not been specifically directed at the United Kingdom. We are aware of three incidents involving Irish consignments of beef and lamb, two incidents involving Spanish consignments, and other incidents involving consignments from Belgium, the Netherlands, Hungary, Poland and Bulgaria. Last but not least, imports of Italian wine have also been subjected to French producer action.
Lord Stoddart of Swindon: My Lords, will the noble Earl reconsider his reply to my supplementary question? Lorry drivers had their lorries forcibly stopped. They were physically pulled out of their cabs and saw their cargoes being dragged from lorries and burned. That is terrorism. The drivers were terrorised. They must have been frightened out of their wits, and anxious. I appreciate that the noble Earl may not have been expecting this question from me, but will he reconsider his answer and perhaps write to me?
The Earl of Strathmore and Kinghorne: My Lords, I most certainly will write to the noble Lord. I repeat what I said earlier. So far as I understand the position, no driver has suffered physical injury. Certainly from what the noble Lord says, drivers have been terrified; I can understand that. But as far as I know that is as far as the matter goes.
Lord Boyd-Carpenter: My Lords, did my noble friend's reference to suspended prison sentences exclude the possibility that some people who committed these violent and intimidating offences have not been put in prison by the French authorities?
The Earl of Strathmore and Kinghorne: My Lords, I shall have to take advice on that point and write to my noble friend. As I understand it, there would be no reason why the guilty should not go to gaol.

Business
3.4 p.m.
Viscount Astor: My Lords, after the debate on the construction industry and before the debate on the Channel Tunnel and British Rail, my noble friend Lady Denton will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question on the Apex Trust.
With the leave of the House I should like to say a word about this afternoon's two debates standing in the names of the noble Lords, Lord Dean of Beswick, and Lord Clinton-Davis. As the mover is allowed 15 minutes, and as the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of the debate in the name of the noble Lord, Lord Dean of Beswick, the number of speakers is such that it is not necessary to impose any formal time limit. However, I am sure that noble Lords will agree that it would conform to the spirit of these short debates if they were to keep their speeches within the 15 minutes which applies to the mover of the Motion. In the case of the debate in the name of the noble Lord, Lord Clinton-Davis, it means that all other speeches should be limited to a maximum of eight minutes. If any noble Lord should speak at greater length he would do so at the expense of subsequent speakers in the debate.

The Construction Industry and Housing
3.5 p.m.
Lord Dean of Beswickrose to call attention to the state of the construction industry, with special reference to the housing situation; and to move for Papers.
The noble Lord said: My Lords, in moving the Motion I shall follow the subjects as they are outlined in the brief, but I shall not speak at length on the building industry itself. A number of noble Lords have put down their names to the Motion who may well discuss in further detail the problems of the building industry.
I begin by welcoming the noble Earl, Lord Howe, who sits at the Dispatch Box. He will sum up the debate. I wish him well in his endeavours. We are well used to the housing Minister changing in both your Lordships' House and in another place. Nevertheless, he has my best wishes—though for not too long a period!
The construction industry is by any standards one, if not the greatest, barometer of a nation's wealth and an indication of whether it is doing badly or well. No doubt other Members of your Lordships' House have been furnished, as I have, with a detailed brief from both the Building Employers' Confederation and

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UCATT, the major building trade union. They paint a bleak picture. For instance, the brief states at the beginning:
"Currently available indicators of future trends in construction activity suggest a worsening recession in the industry for some time to come. After falling sharply in 1991, output is expected to continue declining in 1992 despite the forecast upturn in the rest of the economy. As a result, the total number of job losses in the industry is anticipated to reach a quarter of a million before the end of 1992, and insolvencies will continue to rise. Investment in training, new capacity and research and development will be further cut back damaging the future efficiency and competitiveness of the industry".
That is the considered view of the Building Employers' Confederation. Could any industry be faced with a more disastrous situation at this time when we are on the eve of entering Europe with all that that means in its fullest sense?
In its summary the brief states:
"A two-year downturn in construction output is likely between 1990 and 1992; output is expected to fall by 14 per cent.
Orders for new construction work (published by DoE) continue to trend downwards, albeit at a slower pace than in 1990.
Survey evidence confirms bleak short-term prospects for the industry. This shows that contractors and material producers are still experiencing falling demand, and confidence about future workloads is low.
Falling profits and investment by construction firms will restrict the efficiency and competitiveness of the industry.
Insufficient investment in training will lead to an erosion of the skills base of the building and civil engineering industries leading to skill shortages and possible wage inflation when the recovery comes. The reduction in capacity of the material sector has adverse implications for the balance of trade when demand for building materials improves. Unemployment and insolvencies are likely to continue rising in 1992, with serious economic and political implications".
That is the considered view of the Building Employers' Confederation.
The two final paragraphs of the report are the most damning and deal with rising redundancies. The report states:
"DoE statistics show that unemployment (employees plus self-employed) in the construction industry has been falling continuously since July 1989. In the two years to July 1991 165,000 construction jobs have been lost. BEC estimate that there will be a further 80,000 job losses in the industry before the end of 1992".
That brings the total number of job losses to 250,000 or more.
Running parallel with the rising number of insolvencies are business failures. The report's final paragraph indicates that the latest statistics compiled by the Department of Trade and Industry show that in 1990 there were 4,793 insolvencies (bankruptcies plus liquidation) in the construction industry. That was a 41 per cent. increase on the level of 1989. That represents 16.5 per cent. of the total number of insolvencies in the economy in 1990. The sectoral breakdown of the number of insolvencies in the whole economy is not yet available for 1991. However, the BEC estimates that the level of insolvencies in the construction industry rose to more than 7,000.
That is the situation that exists in the building industry today. If we as a country allow it to continue we do so at our peril. The wealth of a sophisticated and advanced country such as ours is mirrored by
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what is happening in the building industry. At present its situation is poor and the Government should take the matter on board and take urgent action. I understand that Sir Clifford Chetwood, chairman of BEC, met the Prime Minister prior to Christmas in order to make a special plea. Unfortunately he was unsuccessful but was due to see the Prime Minister again. Can the Minister tell the House whether a further meeting has taken place and will he urge the Prime Minister and the Cabinet to listen to the pleas? They are based on a just case for getting people off the dole and preventing others from joining the queue because there is so much more fulfilling work to be done.
I turn to the second part of the Motion; that is the housing situation. Volumes have been spoken in this House not only by me but by other Members about the serious situation that now exists. Surprise, surprise —the situation is still deteriorating! I welcome the temporary measures that the Government implemented during the Christmas break to get a large number of homeless people off the streets. However, when the holiday period had finished those people were once again turned out onto the streets with little opportunity to find a worthy place to sleep. There is no doubt that homelessness is still on the increase wherever one looks, and that is tragic. Only yesterday when walking from Victoria Station to this House I saw homeless people in Victoria Street. I have never seen them there before. One lad in particular had such a permanent billet that he had his dog at his side and was eating breakfast. That is the situation that we now face.
What has brought that about? The problem began in 1979 and it has not happened by accident. During the final 12 months of the last Labour Government almost 80,000 council houses were built. When this Government took over in 1979 the person who was supposed to solve all the problems, Mr. Michael Heseltine, began a political exercise to diminish the role of local authorities. He denied them their traditional role of building houses at the bottom end of the rented sector. The cuts were severe. If the system which was inherited in 1979 of financing local authority house building had been continued, local authorities would have had over 500,000 additional houses at their disposal to let. However, there has been a diminishing number of houses to let because of the Government's deliberate policy of forcing local authorities to sell council houses, whether or not they wanted to do so. About 1.5 million houses have been sold, but I do not say that there would have been 1.5 million houses left to rent.
I have confirmed my experience in Manchester with former chairmen of housing now in this House and in the other place. It taught me that when we cleared 6,000 slum houses each year in Manchester during my term as chairman, half that programme—that is, 3,000 houses—was met by re-lets. There is no point in the Government putting forward their hardy explanation that such houses would have been occupied in any event. There is a considerable out-turn of people from council property into the housing market.

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I understand that although in the owner-occupation market the prediction of 100,000 repossessions has not quite been topped, there have been more than 90,000 repossessions. The enormity of that disaster visited on such people has resulted in the loss of most of their life savings. Those people do not buy houses for luxury; they do so to have somewhere to live. A house is probably their only realisable asset and when it is lost it is lost for ever.
My party welcomed the Statement made by the Secretary of State in another place before Christmas. The Government announced that they would suspend the payment of stamp duty and that an arrangement would be made with the building societies to deal with the problem. As was reported in this morning's newspapers, the bonus of the stamp duty has been swallowed up by the increased insurance payments being demanded by building societies in respect of the purchase of the property. There is still no agreement between the building societies and others involved about where the money will come from and what should be done about the problem. As yet no one has benefited and no agreement has been reached. If the Government's proposed system works—and we hope that it does—it will be only a temporary stopgap. It is only a boil plaster on a major injury.
I believe that the Government must do something about the situation. More than £5 billion is held in the coffers. There is a moratorium on most of the money but local authorities are allowed to use some of it for a variety of purposes. We are asking for the unfreezing of the total amount. The explanation that such action will suddenly damage the economy is nonsense. People would be put back to work and they would find homes. I do not envisage any situation that the Government can defend by saying that they are unable to unfreeze the money because of the effect that will have on the economic situation.
We have a duty to house people at the bottom end of the market. Historically, that has been done by local authorities. Some did not do it particularly well but in the main it was done extremely well. My party has pledged that, if it wins the next election, the local authorities will be able to resume that role and that finance, which belongs to them, will be unlocked.
I commenced by speaking about the building industry. There is a building force available in both the private and public sectors which is waiting to perform. There is work to be done. It is calculated that at least £5 billion will be needed for work in educational establishments which are collapsing. If the Minister wishes to challenge what I say, I shall take him to some schools in Manchester and Leeds, where our kids are being educated, to show him what I am talking about.
We have a building force, finance available and an urgent need on a vast social scale for that building work to commence. In his reply I hope that the Minister will give an indication that he will plead that case as forcibly as he can with the Government as soon as possible. My Lords, I beg to move for Papers.
3.21 p.m.
Lord Davies: My Lords, first, I declare an interest, in that I own and run a construction and house building company in mid-Wales. My company, which employs around 40 people and provides regular work for around 30 sub-contractors, is typical of thousands of building firms spread across the country. They are long established and provide the backbone of the industry's training in their areas. They contain much of the industry's skilled workforce. They have built the schools and health centres, have developed small scale housing projects, have mended the churches and, particularly in Wales, the chapels, and have renovated old houses. Surveys of our schools, hospitals and housing stock all indicate that our skills and experience will be required well into the future if the nation's quality of life is to be maintained.
However, many of these companies are finding it extremely difficult to survive this recession. For most of us, the downturn started two and a half years ago. Now many of our private and company clients are going bust owing us substantial sums. Tender prices for local authority work are being forced down by the national contractors moving down the contract size scale and buying work to keep their staff going. Our assets are largely tied into our housing sites, which are barely moving. Many such long established companies have already disappeared. Most are surviving with support from their bankers which, with present interest rates, will not last indefinitely.
What do we see being done to get things moving? I well remember a year ago on one of my not very frequent visits to this House, being shocked to hear a Member of the Front Bench opposite telling us, in answer to a question on the economy, that the recession, if there was a recession, would be over by the middle of the year. I wondered what world he lived in. By the summer, we were being told that the recession would be over by the end of the year. Now we are being told that the recession has proved to be deeper than anyone expected. Who have the Government been talking to? Clearly they have not been talking to the lists of eminent economists who have signed letters to the quality press predicting dire consequences if nothing is done.
We are now told that the recession is over and we are on the up. What justification is there for such statements? If one talks to local bank managers and accountants and business people across all industries, the talk is of cash flow drying up, firms teetering on the edge of receivership and business people, who have put all they have into their companies, on the verge of bankruptcy.
Is this very surprising when interest rates, which were coming down with inflation, are now stuck, in real terms allowing for inflation, at an all-time high, and may have to go up again? We are told that rates must stay up to support the pound. But can the pound be at the correct level if interest rates have to be kept well above those of our competitors even when inflation is down to their levels? I do not know the answers to those questions, but I do know that if nothing is done we may be in for a further downturn which will be a disaster for our industry.

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Many business people, most of them traditional supporters of the Tory party, will lose all they have. They cannot be very pleased to see the former Prime Minister, under whose rule the seeds of our present troubles were sown, strutting the world. They wonder if her yes-men who are now in power have the strength to take real and difficult action to get things moving. After all, even the sheep that became a ram and said "no" is no longer on board.
I am grateful to the noble Lord, Lord Dean of Beswick, for initiating this debate. I am disappointed that more captains of our industry, several of whom sit on the Benches opposite, have not come forward to speak. Perhaps they have already discovered that their many warnings are being ignored. This situation is very serious, but not yet as serious as it was in the 1930s. I well remember one of the two splendid men who started my company after the war telling me that, when he started in the industry in the early thirties, there was one year when only one new house was built in the whole of Montgomeryshire and he had to walk the 150 miles to Oxford to find work. I ask the Government to take action now. Some of their excuses for inaction echo alarmingly what we read was being said in the 1930s.
3.25 p.m.
Lord Amwell: My Lords, I am grateful to the noble Lord, Lord Dean of Beswick, for introducing this debate on the state of one of the country's largest and most widespread industries—an industry which is currently in crisis.
The two noble Lords speaking before me have already covered the effect which the recession has had on general construction companies and, in the particular thrust of this debate, on the housing sector. I should like to expand the debate into another sector of the industry; namely, consulting engineering. Consulting engineers design the infrastructure which the contractors then build. Here I must declare an interest because I am with a consulting engineering firm engaged largely in public works.
In seeking details of the effect of the recession on the consulting sector, I have been provided with valuable information by the Association of Consulting Engineers. It tells me that the consulting sector employed some 42,000 staff worldwide in 1990, the great majority of whom were qualified engineers or technicians. The association's figures for 1991 are unfortunately not yet to hand, but it has been estimated elsewhere that at least 5,000 jobs have been lost in that sector in the past year; and all the evidence is that 1992 will be at least as difficult. That is a rate of loss of some 12 per cent. per annum. While in absolute terms it is small compared with the industry as a whole, it is a very serious matter for the sector and is a personal tragedy for the individuals involved. There are no golden handshakes in that sector.
However, that loss of jobs masks a more serious problem. The total fees earned by consultants on a real cost basis, discounting for inflation, rose steadily through the 1980s until 1987 but that has since fallen
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back until in 1990 income was back to 1985 levels. However, the per capita earnings of staff had fallen back to 1982 levels.
A simple analysis may suggest that firms simply failed to react fast enough or, to put it bluntly, to sack people fast enough and that therefore any fall in profitability was one of their own making. In fact the problem is more complex than that: first, highly qualified and expensively trained staff are a consultant's only asset. No firm wants to lay staff off the moment the water gets choppy. Secondly, the work that consultants were doing was not in fact falling off as fast as income. In part that is because clients' design requirements, particularly in the public sector, are becoming more complex for the same fee. Thirdly, and mainly, it is because firms have been caught in the spiral of Government-initiated fee competition to which has now been added the spiral of recession. Most firms saw and continue to see fee competition as undesirable, partly because profits would be harder to earn but mainly because they saw that quality would inevitably suffer. None of us is afraid of competition—we have been competing for years overseas. However, competition should be based on quality, not on price.
I am disappointed that the noble Lord, Lord Howie of Troon, is not in his place this afternoon. He has regaled us with the perils of fee competition on a number of occasions in this House and he has been rebuffed on each occasion most unsympathetically, I have felt, by Ministers. I cannot realistically, therefore, expect to win over the Government on this occasion. What I cannot understand is how the Government can remain apparently ignorant of the minutely small percentage that can be saved in design figures, and how long the infrastructure will be with us. Those small savings cannot possibly amount to more than 1 per cent. of the total cost of the infrastructure over its life; indeed, it would almost certainly be much smaller.
That is as nothing compared to the added cost of poor or defensive engineering design in the first instance if the fees are not available to do the job as thoroughly as it should be done, or increased maintenance costs stemming from that poor design in the longer term. With the present state of the market, those are the problems with which the nation will be faced. To paraphrase Ruskin, you never get anything for nothing.
The Government have hit on a new wheeze—fee competition with blindfolds. The Department of Transport is refusing to reveal the amount of the winning bids for road designs. What is it afraid of? It makes public the value of construction tenders; why not design fees? I suspect that it is possibly because the Government are afraid of being ridiculed should the low level of those bids be made public. They would be seen to be wholly inadequate to cover the briefs that were sent out. What hope does that give us for the future?
British construction consultants have always made a significant contribution to the country's invisible export earnings; some £480 million in 1990. Not only that, but they often paved the way for British

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contractors to be selected for the much more valuable construction contracts overseas. However, to a consultant whose margins are quite small in real terms, the cost of chasing overseas work is significant. Collapsing margins on the home front means less opportunity to seek work overseas. Add to that the fact that historically we were often dealing in many countries with third world nationals in positions of responsibility who had been trained in Britain and had a fondness for dealing with British companies. Through the Government's policies on overseas students all that has come to an end. Now they all go to America. That too does not bode well for the future.
How different all that is to Japan, where I understand that consultants are not awarded work on the home market on the basis of price, but in proportion to the amount of work that they have won overseas. Margins at home are generous. That enables them to bid with ever lower margins overseas and to beat us on price, though fortunately not always on quality. Far be it for me to suggest that the Japanese are more successful at managing these things than we are. But should present policies not be modified, the consulting sector in this country may be just that—in this country and nowhere else.
I have harped on somewhat about fee competition, but I feel that it is in large measure responsible for the current state of the consulting sector. Recessions have happened before, and in this industry we are well used to being treated as an economic regulator. I am sure that we could have coped more securely with this recession had we not already been cleared out by the effects of fee competition. Now we are seeing old, established and respected firms fail. At best there are enforced mergers coupled with rationalisations—further job losses—or at worst a takeover by an overseas, often American, company. Americans have a different work ethic, as we all know, based on "hire and fire". It may be that we will all have to follow suit. If that happens—and it is anathema to the expectations of this country—it will have the effect of driving away from consulting engineering the graduates of intellectual quality that we need in this country if an infrastructure fit for the 21st century is to continue to be built.
My final point is that engineering design precedes construction. If the predictions of further swingeing cuts in the design sector in 1992 are proven correct, then the upturn for the main contracting companies will be delayed into 1993 or 1994. That will be a serious matter for the industry.
3.34 p.m.
Lord Jay: My Lords, the present Government have got themselves into the housing and building muddle that we can all see because their economic policy flatly contradicts their housing policy. Their economic ERM policy demands high interest rates and their housing policy demands low interest rates; hence the confusion. That practical confusion springs in turn from the rather deeper confusion of mind of believing that by market forces alone we can house the whole
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population of a modern community in decent civilised conditions. In fact we cannot. Not even the United States has been able to do that.
The only countries that have properly housed their whole population are the Scandinavian countries. They have done so by major state intervention and by treating housing as a public service. By neglecting those basic facts the present Government have produced the results which we all see: an acute shortage of houses to rent; an almost total cessation of new building, particularly of houses to rent; record unemployment in the building industry, as we have just heard, and almost 150,000 homeless families—that is, around 1·25 million human beings without a home throughout the 24 hours in a day.
The public need, which is proved by every inquiry, is for a major increase in rented accommodation and a large expansion of such accommodation as a percentage of the total housing stock. The Government have heavily reduced both. It is perhaps worth reminding ourselves that during the period of the Labour Government of 1945 to 1951 1 million new houses were built in this country. A similar number were built between 1964 and 1970. How many new houses are the Government building under their present regime? People have also forgotten that the Government's housing Bill of two years ago was supposed to be the beginning of a large increase in private houses to rent. On 24th July I asked the Minister a Question on how many private dwellings to rent had been built in the first half of 1990–91. The Minister was not able to give me a figure and spoke about the repair of old houses. I suspect the figure is only a few thousand. Perhaps the Minister can give that figure to the House at the end of this debate; either for the first nine months of 1991 or for 1991 as a whole.
The worst blunder of all has sprung from the Government's extraordinary and irrational prejudice against the local authorities, which shows itself in all their policies and which has reduced new building of council houses to almost zero. We are now building the smallest number of houses of the type that we need the most; that is to say, council houses to rent. If the motive of the Government's right-to-buy campaign for existing council houses was really their sympathy with tenants they would have made it a condition that any council flat or house sold to sitting tenants, if resold, should be sold back to the council and, further, something like market value would have been charged.
In my opinion, that would have been and still is the right policy for the sale of council houses. It would have enabled those sitting tenants who genuinely wanted to buy their homes to do so and the stock of low-cost rented houses would have been maintained. When those tenants no longer wanted them they would have returned the stock. There was no need to cut down the total stock of council houses to rent in order to give the right to buy to tenants who really wanted it. Indeed, the fact that the Government did not impose such conditions suggests to many people that the Government's real motive—or the Tory

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Party's real motive —was not concern for the tenants but a determination to cut down the stock of low rent council houses.
In any case, that fact, together with the Government's indefensible refusal to allow local authorities to use their own capital receipts for building new houses, encourages those cynics who believe that the other main motive of Ministers was the belief that owner-occupiers always vote Tory. I believe that is now probably very far from the truth for, as we know, thousands of owner-occupiers are having their homes repossessed. I wonder whether noble Lords realise what that can mean. A family living in a rented council house—their family home in which they had absolute lifelong security of tenure if the rent was paid—having been induced or bribed, if you like, by the Government with the taxpayers' money, bought their house with a mortgage loan. Now, because that family cannot pay the mortgage interest, let alone the repair bills, they are evicted from the home which they had previously regarded as theirs and in which they were absolutely secure for life.
We should be told today whether the Government's rescue repossession plan, announced just before Christmas, is really working. Can we have the figures to show what has happened since then? My noble friend cast some doubt on whether anything has actually happened. The truth is that the several million council homes to rent built in the 25 years after the last war were the best homes in which many of those people had ever lived. The only thing seriously wrong with council houses and flats, in my opinion, was that not enough money was ever available for proper maintenance and a proper caretaker service to look after them. I say that not from guesswork but from experience of many hundreds of individual cases in my previous constituency.
The Tory Party's attempts to discredit council houses looks unpleasantly like another example of what appears to be becoming its strategy of starving the public services of money and then saying that they are so inefficient that they should be abandoned. What is now needed is a major re-expansion of council new building over the coming years with adequate funding not merely for construction but for maintenance thereafter. Of course we need private building as well and also housing association building. We need private and housing association building in addition to, and not instead of, building by local councils. It is also certainly desirable—I believe that it is part of the Government's plan—that building societies and perhaps the Housing Corporation should also rent as well as sell dwellings. Again, that should be in addition to the building work of the local authorities and not instead of it.
Therefore, what is urgent now is to build far more houses for rent. The way to do that, in addition to other measures, is to release 100 per cent. of the capital receipts of local authorities so that they can build as many new dwellings as they can. That will give us at least some of the acutely needed homes to rent. It will give some help, or at least hope, to the homeless. Such a provision would employ an increasing number of the
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quarter of a million people now unemployed in the building industry and whom the Government, in effect, are at present paying to do nothing. The Government's opposition to releasing these capital receipts to local authorities is really indefensible. It is due to blind prejudice. As I said, those receipts should be released so that houses can be built. That is what must be done. If this Government do not do that, it will be done by the next Government.
3.44 p.m.
Lord Ennals: My Lords, my noble friend Lord Dean of Beswick has chosen a subject of tremendous importance economically in terms of the health of the nation; in terms of the balance of payments; in terms of levels of employment, and also in terms of the social welfare of our people, many of whom are so desperately needing permanent accommodation. I am grateful to my noble friend and to those who have already spoken.
I agree with the noble Lord, Lord Davies. It is really extraordinary that not a single Member of the Conservative Benches, whether he is a captain of industry or someone who supposedly cares about the welfare of people and their housing, has put down his name to speak in this debate. One can only assume that that means that the Members of the Conservative Benches simply do not give a damn about the issue that we are discussing today.
I wish to concentrate on housing problems. Over Christmas many of us were very conscious of the appalling circumstances of the growing army of single homeless people in Britain. Thanks to the volunteers of Crisis at Christmas and Shelter, who gave so generously of their time and money over Christmas, it was possible to provide shelter, warmth, good food and friendship to those for whom Christmas would have been totally without joy. We are not only talking about the single homeless who were able to be accommodated. In addition to those single homeless the figures show that a record 60,000 homeless people spent Christmas in bed and breakfast hotels, mobile homes, council hostels and other forms of temporary housing. What way is this for a civilised country to behave when people have to spend Christmas in this manner?
I have deep recollections of this issue because in the early 1970s, when I was working directly with organisations dealing with single homeless people and founded and became the first chairman of the Campaign for the Homeless and Rootless, I had great respect for the voluntary organisations which co-operated in meeting some of these profoundly important social problems.
We are dealing not only with a housing problem, but for many we are dealing with the consequences of long-term unemployment and of mental ill health. I do not know how many times, speaking from the Front Bench, I have drawn attention to the very high proportion of single homeless people in hostels and sleeping rough who are in fact people suffering from mental illness with psychiatric disorders of one kind or another. It is a constant reminder of the inadequacy of our community care provisions and of the inadequacy

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of funds to provide community care for people who should be in decent accommodation but who live rough on the streets.
We know that funds which should have been made available for community care have been channelled into subsidising poll tax payers who have suffered so much from the monumental acts of folly of this Government in introducing a form of taxation which they themselves have recognised was quite inadequate and socially unjust. They are now trying to bring in another tax.
I believe that the figures for single homeless people are a disgrace to a caring society. There appear to be no official Government figures, but Shelter estimates that between 2,000 and 3,000 people are sleeping rough on the streets of London. They have had a few days' respite, but they are back again without a place to sleep. There are up to 5,000 other persons sleeping rough elsewhere in the country. Shelter has also estimated that 156,000 young people have become homeless in recent years. Centrepoint estimates that there are 50,000 young homeless people in central London between the ages of 16 and 19.
One looks at those large figures and one sees that behind them lies a great deal of social deprivation. For example, black people form a disproportionately high proportion of homeless people, according to the figures from local authorities. Single parent families are eight times more likely to be homeless than other households. A number of households have been accepted as homeless because, as I said, of mental illness. We have not just the single homeless, but whole households as well. Figures show that these increased by 75 per cent. in 1990 alone, and the figures for 1991 seem likely to show a continuing upward trend. I should have thought that these were social problems which would deeply concern a caring government who would have been coming forward with proposals today. Perhaps the Minister will do that on his own, without anyone to support him. If he does we look forward to what he has to say.
All these effects on deprived families and, individuals are part of the appalling shambles in the Government's housing policy, as my noble friend Lord Jay emphasised in a very able exposition. The Government have taken steps to make it almost impossible for houses to be built by local authorities for rent. It is quite extraordinary that they have taken action to ensure that there is virtually no business at the moment in building houses to rent for people who need them. We have a growing dependence on temporary solutions which seem to be typical of this non-interventionist Government. They are masters of patching up, but not of producing a programme for proper repairs and a proper policy for the future.
Look at what has happened to the temporary bed and breakfast situation. For those accommodated in bed and breakfast hotels it is utterly soul-destroying. Many of them are required to be out during the bulk of the day; they are not able to live as decent families and they are often in accommodation which is grossly overcrowded and often quite inadequate for proper family life. At the moment I do not particularly mind if people own or rent a property. Of course, owning is
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preferable because it gives security of tenure. But people are entitled to have accommodation in which they can live a proper family life.
To create a situation where bed and breakfast is the chosen solution is financially wasteful and socially unacceptable. Figures show that it is far more expensive for the public purse to spend money on bed and breakfast accommodation as opposed to building houses for rent, which will be ongoing and help to provide a permanent solution. Yet the use of bed and breakfast accommodation over the past 12 months has increased dramatically. Here we have figures: the number of people in bed and breakfast accommodation in 1991 has shown an increase in the North of England of 91 per cent. In the West Midlands the figure is 71 per cent.; in the East Midlands, 43 per cent.; in East Anglia, 38 per cent.; and in the South-West, 17 per cent. That is an appalling situation. More and more people are being forced into accommodation which must be socially very undesirable. It is the final proof of the bankruptcy of Government economic policies.
As has already been said by my colleagues, we now have record levels of repossession. Can your Lordships appreciate the misery and the pain of being forced out of one's accommodation? It happened to me personally just a few years ago. For reasons that I do not need to explain I was forced to sell my flat where I had lived for many years, where I had been very happy, and to move into quite different and much less desirable accommodation. At least I had somewhere to go. Those whose houses have been repossessed now do not know what the future holds for them. The effect on us was horrific—and for them it must be much worse. Now it is affecting tens of thousands of families throughout the country.
From June 1990 to June 1991 a record 63,940 families had their homes repossessed and were homeless. By the end of the year, as has already been said by my noble friend, that figure had increased to 80,000 and it may now be more than that. That is an absolute calamity for the families concerned.
What is the Government's solution? My noble friend on the Front Bench casts some doubt on whether the Government's solution of stamp duty was effective. We do not need to rely only on his words. The suspension of stamp duty was an ineffective measure which could lead to a housing market disaster late this year. As an electioneering stunt it was absolutely disgraceful. These are the words of John Wriglesworth, a housing specialist at the City brokers, Phillips and Drew, not of a Labour spokesman put up to make a party comment. Mr. Wriglesworth is quoted in the Independent as saying that,
"house prices fell 1 per cent. last month [November] on the Halifax index, which had no effect in reviving the market, so a 1 per cent. stamp duty saving was likely to be equally ineffective".
He went on to say that the eight-month suspension was the,
"cheapest election ploy I have ever seen".
That was not only the opinion of a Phillips and Drew spokesman. Harry Hill, the joint managing director of the Hambro Countrywide Estate Agencies also took a very critical view. He said:

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"It is a clear sign that the Government—having effectively killed the housing market—are trying to make a sincere effort to regenerate it".
Perhaps that was the intent and we shall have to see what is the result of that.
Looking at the last problem which has already been touched upon by my noble friend, the most fundamental question is: What are the Government going to do about the utterly depressed state of the construction industry? The failure to meet demand —demand for affordable housing as well as for other social purposes such as school building and other types of construction—is higher now than it has ever been. To meet housing needs the construction industry will need to build another 50,000 to 60,000 social homes each year for the rest of the decade. At the same time, the demand for repair and maintenance work and large-scale civil engineering work is likely to increase. Most of this work will be highly skilled and with training so badly hit and construction firms diversifying their interests domestic demand will not easily be met.
As I hinted earlier the widening trade deficit in building products is a very serious situation for the economy of our country. Because of lost capacity caused by the recession of the early 1980s, by 1989 Britain was running a £3 billion trade deficit in building products. What are the Government going to do about that to try to reverse that trend? If we look at our competition in Europe, Britain is alone among the major European economies in having a decline in construction output. We are in an extraordinarily serious situation, but apparently the Government have no long-term programme to put before us. Certainly they have not done so now and, as I said, clearly those in your Lordships' House who take the Conservative Whip seem to be unconcerned about the problems we are debating today. I find that utterly deplorable.
3.58 p.m.
Lord Mellish: My Lords, it is with sorrow rather than anger that I rise to speak in this debate. I happen to be one of those people who for most of my life has taken an interest in the construction industry. In 1964 I was made a junior Minister of Housing, so I became involved in the construction industry then. Later on I became the Minister of Public Buildings and Works and again I became very much involved. I have always watched that industry and recognised that it is a peculiar industry in the sense that about 50 per cent. are cowboys. They are not at all reputable. I completely ignore them. I am talking now of the reputable decent firms who comprise the building and construction industry as I know it.
I am delighted that the Leader of the House is present. It is ominous—and I do not ask for any comment from him—that in this very important debate concerning the construction industry, which is one of the great assets of our nation, that not one Conservative has put down his name to speak. Why is that? Is it because they are not interested, or is it because they are so ashamed of what is going on in the industry that they just do not want to get involved? I
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call the attention of the Leader of the House to the fact that not one of his supporters has put down a voluntary—
Lord Waddington: My Lords, I do not think that I really need to make this point. However, it has been drawn to my attention that not so very long ago there was an equally important debate on the motor industry and not a single member of the Labour Party put down his name to speak. It is not a good point.
Lord Mellish: My Lords, with great respect, I do not defend that either. I do not necessarily defend members of the Labour Party, whether they are speaking officially or not. I am saying that as regards a debate on construction, which is one of the most important parts of British industry, not one single Conservative has put down his name to speak. I find that incredible. So be it.
I have a special regard for the industry. On virtually the first day I became a member of your Lordships' House I joined the building and construction group. I quickly found that it was not a viable group. It was not powerful enough. We had no right to ask Ministers to come and talk to us. I am glad to say—and here I pay tribute to the Conservative Party—that the Conservative Chief Whip readily agreed to the group becoming a viable all-party group and welcomed it. The Leader of the House may be interested to know that in the past three or four months we have held one meeting. We have a Minister coming to the next meeting, which is very important because he will state government policy.
I recognise the Government's difficulties. Unlike many in the House I do not come here with a great prejudice that everything was perfect before and everything is black now. I do not accept that. It is nonsense. From listening to my noble friend Lord Ennals one would believe that there was no such thing as a homeless family in 1979. Where was he?
Lord Ennals: My Lords, I shall tell my noble friend where I was. I was in Parliament. The number of homeless families has risen dramatically. My noble friend must recognise that. He was a Minister at the time.
Lord Mellish: My Lords, of course I recognise that the number of homeless families has risen dramatically. I shall go on to talk about the construction industry and the plight that it is now in. But what I am saying to my noble friend—let it be quite clear what I am saying—is that he talks as if this were a sudden occurrence and that there were never homeless families before. Homeless families have always been with us and I do not deny that something special has to be done for them.
The construction industry now faces a two-year downturn in construction output. This year and next year output is expected to fall by 14 per cent. By the way, those are not my figures: they come from the employers' associations, which are determined that their point of view shall be understood. They are friends not of mine; they are friends of the party opposite. These figures cannot be disputed by any government. Orders for new construction work

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continue to fall. Falling profits and investment by construction firms will restrict their efficiency. There is also inefficient investment in training. Fancy that! Firms have cut back on investment in training. That will lead to an erosion of the skills base in the building and civil engineering industry. Furthermore, a reduction in the materials sector has adverse implications for the balance of trade when demand for building materials improves.
I have gone into the whole question of training because that matter concerns me very much. I find that the number of apprentices in the six months to January was 2,710. That represents a fall of 37 per cent. on a year ago. The registration of bricklayers under training fell by 44 per cent.; the registration of carpenters by 39 per cent.; the registration of painters by 50 per cent. These figures come from the Construction Industry Training Board itself. We have cut back on the number of trainees. The overall reduction is 10 per cent. What in heaven's name are the Government doing? Why are they doing this? I have heard the arguments about the fight against inflation. I understand that point and I also know that there is a world recession and that the recession is not confined to this country. Having said that, is it not clear in their thick skulls that the construction industry is one of the basic industries of our nation? If it is doing badly, the whole nation is doing badly. If it is doing fairly well—I do not expect it to reach 1983 levels again—and if it has a more viable future than the document from which I have quoted shows, it means a bright future for Britain. Do not the Government understand that? What will they do to help?
Perhaps I may refer to local government. It will be known in this House that I am not a local government man. I know its faults and its heartaches and I know that it has made many mistakes. However, the trouble with the Government is that they compare everything with what Lambeth and Southwark do. That has nothing to do with the argument. Lambeth and Southwark are way out. They are different. The vast majority of councils in this country today are decent and respectable and are entitled to be helped. They should not be ignored and treated like rubbish.
I supported right from the start the policy of allowing people to buy their council flats. I always agreed with that. I am all for home ownership. Why should I own my house but deny that right to other people? Of course one encourages councils so to do. However, having encouraged them to do it the Government then imposed strictures on the capital which councils received. I have figures from the employers which show that an estimated £6.6 billion is in the kitty. That money is held by local authorities but they are not allowed to spend it. Have you ever heard such a thing? The sales this year alone will bring the total accumulated receipts to around £10 billion. I understand that if the Government were immediately to release £10 billion onto the market it would have an inflationary effect. I understand and recognise that. But there is no reason why they should not control
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that release and why the vast majority of decent and honest local authorities should not be helped and assisted.
I am told that the proportion of capital receipts available to local authorities from the sale of council houses is controlled at the rate of 25 per cent. The employers are asking for that proportion to be raised to 40 per cent. Why should it not be so? That would still leave the Government with control of 60 per cent. Some respect must be paid to those councils who receive that money. I recognise that some do not need it as much as others. However, the inner London boroughs need it badly. Why in heaven's name do we not allow local authorities to increase their expenditure? By doing so we would give the building industry a chance to flourish.
Against that background I ask the Minister to treat this debate seriously. His brief must be lousy. I feel sorry for civil servants who provide Ministers with their notes. However, what the Government are trying to do is almost indefensible. I know why they are trying to do it. However, with an industry of this size and importance, it is indefensible. I ask the Minister to ignore his civil servants. I ask him to make a speech of his own, to talk with some humanity, to talk as if he had some feeling about this issue and to talk as if he really means what he says. Let us hear from him.
4.9 p.m.
Lord Blease: My Lords, I join other noble Lords in complimenting my noble friend Lord Dean of Beswick on initiating this important and timely debate. I share the concern of other speakers about the ominous decline of the construction industry throughout the United Kingdom and the pervasive crisis with regard to the availability of affordable housing in England, Wales, Scotland and Northern Ireland. Noble Lords will not be surprised if I direct my remarks mainly to the general situation of the construction industry and housing in Northern Ireland. I must mention that I fully realise—and I am sure that noble Lords appreciate this—that there are crucial community elements in Northern Ireland which contribute additional difficulties to the construction industry and the problems of housing in the Province.
In Northern Ireland we have the wilful, criminal and cruel action of the terrorists and the paramilitaries: the bombing and destruction of homes, hospitals, schools, shops, places of work and businesses, buildings for recreation and culture and the public and private means of transport and communications. That causes widespread havoc and impedes developments which make for employment, prosperity and human happiness throughout the Province.
That mayhem makes untoward demands on public and private finance, as well as on our major capital resources. The peaceable Northern Ireland citizens have to endure unnecessary, purposeless physical and mental strain and human suffering. I am glad to say that because of the spiritual resilience of the general public, together with the resolve of the professional civil engineers, the skilled artisans and the committed workers in the Northern Ireland construction industry —and, I may add, with the purposeful help of the past

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and the present Northern Ireland Office Ministers—the battered fabric of Northern Ireland's infrastructure has, in the spirit of the mythical phoenix, continued to rise from the ashes with new life and determination. At the same time, Northern Ireland is an integral part of the United Kingdom. On parliamentary issues it cannot be isolated from the overall outcome of policies and decisions of government. It is to those fiscal and economic policies which affect the construction industry and affordable housing accommodation that I wish to address my remarks.
The four matters that I wish to put to the Minister are as follows. First, the relative decline in the Northern Ireland construction industry; secondly, the relevant health and safety factors in the industry—that is, those relevant to this debate so far as concerns fair competition and other matters—thirdly, the need for affordable housing and the care of the homeless; and fourthly, suitable urgent measures to deal with the growing number of mortgage repossessions.
The relative recession in the construction industry as between Great Britain and Northern Ireland is portrayed in the Northern Ireland official employment data for December 1991. In the United Kingdom, employment in the construction sector for June 1981 was 1,122,000. In June 1991, the number had fallen to 981,000—that is a loss of some 147,000 jobs, or a 13 per cent. reduction in the construction labour force in 10 years. During the same period in Northern Ireland the figures were 28,300 for 1981 and 22,920 for 1991. That represents a loss of jobs over the 10-year period of 5,380—some 19 per cent. added to the chronic unemployment figure in the Province. The construction sector production output during the same 10-year period showed, in Great Britain, a 36 per cent. increase, while in Northern Ireland we had a 46 per cent. increase. Those figures are taken from official data. Therefore, notwithstanding the community problems that I mentioned earlier, those figures indicate that the Northern Ireland construction industry is competitive and efficient.
A further indication of the serious decline in the construction industry is the relatively high number of building contractors and construction companies which have closed, reduced their operational work or which have, sadly, been declared bankrupt. Perhaps a few extracts from the 1989–90 biennial report of the Health and Safety Division of the Department of Economic Development will show how the recession is affecting working standards and practices in the construction industry and also its overall competitiveness. The report says:
"During the past two years there has been a significant change both in the level of activity and the nature of the projects undertaken in the construction industry. There was a marked decrease in house building, particularly in the private sector where most developers now operate on a 'build when sold' policy. With the exception of Belfast where commercial development has blossomed there has been a decline elsewhere.
"Increasing competition for major contracts has enabled clients to impose very tight building schedules with heavy penalty clauses for delay in completion. This additional pressure on the contractor can lead to short cuts being taken, often at the expense of safety … The ever increasing use of
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labour only and self-employed sub-contractors, together with the modern trend towards management contracting, means that there is often uncertainty as to who and to what extent they have responsibility for the maintenance of safety standards on site".
I concur with what has already been said by the noble Lord, Lord Mellish, as regards the number of cowboy operators who are in the industry and how they bring the whole construction industry into disrepute. Indeed, they sometimes fleece considerably those people who are employed and those people who contract with them.
I continue now to quote from the report:
"Cut throat competition frequently means that savings are made at the price of safety. This will continue until contracts are awarded on factors other than price alone".
I believe that that has already been stated in the debate. The report continues:
"As has been stated many times in the past, the only certain way for the foreseeable future of maintaining reasonable health and safety standards within the construction industry is through a programme of regular inspection coupled with appropriate enforcement action … Most safety problems occurring on construction sites can be attributed to the failings of management … The Inspectorate views the promotion of health and safety within the construction industry as an important and integral part of its work".
I should like to put to the Minister that, while we may have many opportunities during the coming year to discuss health and safety matters, it is important in this connection that the recession should not in any way inhibit the increased employment of factory inspectors and the carrying out of site examinations. Indeed, I shall go further than that: I call for the compulsory registration of all building sites, with reference to a particular period and a particular number of employees; for example, 10 employees on a site for one week could be compulsorily registered.
I turn now to the need for affordable housing and the problems of the increase in homelessness. I know that this has been dealt with at some length during the debate, but I should like to put forward the picture of what is occurring in Northern Ireland. If the opportunity of this debate had been taken, I am sure that other regions of the country—for example, Scotland, Wales and other parts of England—could have dealt with what is happening in their areas.
There are currently about 23,000 people on the waiting list for housing accommodation in Northern Ireland. Some 10,000 of them are in urgent need. Yet the Northern Ireland Housing Executive has had to cut its building programme for the next three years by 600 homes. The Simon Community is the main voluntary organisation in Northern Ireland endeavouring to cope with the tidal wave of homelessness. Last year, the organisation had over 30,000 requests from people for somewhere to live —that is, just for a roof over their heads. I want to make the qualification that 30,000 requests does not mean that there are 30,000 homeless people. It means that over the years many people have come knocking at the door to find some place to lay their heads for the night. They include many young people and many elderly people in distress.
However we look at it, homelessness is a growing social problem which is not being tackled in a satisfactory parliamentary, social or civilised manner.

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As we have already heard, mortgage repossessions in 1991 reached alarming proportions. In Great Britain, I understand that the figure for 1990 was 44,000. That figure has now reached some 100,000. One leading housing consultant body has said that it may rise to about 150,000 in 1992. Belfast Housing Aid, one of the voluntary organisations in Northern Ireland, has been carrying out advisory and representative work on the soul-destroying issue of home repossessions. It believes that the 1991 figure for Northern Ireland will be in excess of 3,000. What an awful outlook for life that is for any part of the United Kingdom, and I am especially interested in the Province.
Will the Minister use his good offices—I join with others in this respect—to urge the Government to take urgent new steps to establish suitable rescue schemes for people subject to mortgage repossessions. It is something that should not wait until after a general election. There is an urgent need now when we think what repossession means to families and to the social life of the whole of the United Kingdom.
I have no pecuniary interest in the Northern Ireland Housing Executive; but since its inception in 1971, I have had a close link with many of its activities and could perhaps be said to be one of its founding members. It was set up by the Government and makes representations to them. Since 1971, it has made a significant contribution to the improved welfare of individuals, homes and the Province's wider economy. During the past 20 years, the executive has expended an estimated £3 billion on a broad spectrum of development programmes which have brought material, social, physical and economic benefits to Northern Ireland society as a whole. It has, for instance, been estimated that for every £1 million spent by the executive, 60 jobs are sustained in the local construction industry. It is an important facet in the building of homes.
This year (1992) will witness the publication of the fifth Northern Ireland House Condition Survey undertaken since 1974. In that year, 19 per cent. of all Northern Ireland's dwelling accommodation was deemed to be unfit, according to public health legislation. While the latest survey in 1987 showed that that figure had been reduced to 8.4 per cent., the executive hopes that the current survey will reflect further improvement. It is a demonstration that public house building can do a job in the interests of the community provided the facilities exist and the policies are right.
In the 21 years since 1971, the Housing Executive has completed over 72,000 new homes. An exercise on that scale alone has resulted in a dramatically improved quality of life for countless individuals and families. Moreover, an improved residential environment can have a corresponding and positive effect upon personal health. It can reduce crime, lead to enhanced educational attainment and help to safeguard the quality of the general environment. It can also contribute to good neighbourliness and understanding. It can help the lives of many of our children. The reverse leads to a downward spiral of values in our society.
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In recent years, the Housing Executive has slipped down the priority ranking in the allocations made in the Northern Ireland budget as security, health and education have commanded more and more resources. It can be argued that the slippage in status has gone too far.
I see that I have exceeded my 15 minutes. Perhaps I may crave the indulgence of the House and speak for a few more minutes to round off what I have to say —I believe that there is sufficient time and that I shall not be denying anyone time to speak. Not only will the Housing Executive be unable to offer homes to those who need them, there is a risk that under the present arrangements its existing stock and some in the private sector could be allowed to decay. In such an eventuality, the remedial work necessary in future will be much more expensive than if the properties were properly maintained.
A document has been circulated by the Union of Construction, Allied Trades and Technicians. It is entitled, Kick Start —How To Get Construction Going Again. Its campaign has my full support and that of many of my colleagues on this side of the House. It is campaigning for a cut in interest rates, increased investment in training, local authority house building programmes, transport infrastructure and the repair of school buildings.
This is the first time that I have had the opportunity to address the House when the new Minister is to reply. I have tried not to spring on him anything about Northern Ireland because I know that that is outside his general remit. I shall be pleased to hear whatever reply he can offer me.
4.28 p.m.
Lord Bruce of Donington: My Lords, I believe it will be generally agreed on all sides of the House that there are three basic essentials to human life: food, clothing and shelter. Within the concept of a civilised society, shelter means rather more than a cardboard box on the Embankment and some kind of temporary bed-and-breakfast accommodation. It means a dwelling; it means a home; it means a place where families can have their individual privacy, sometimes even from one another, and where a child can do its homework without interrupting the normal family routine; it means a place to which one can ask one's friends for entertainment; it means a place where one can, in hopeful tranquility—in a "rock" age—look occasionally at television without interruption; it means, in fact, the provision of those amenities which most Members of the House, on all sides, have come to take for granted as a matter of course: a place where there can be some deep sense of that personal serenity which always lies at the root of human happiness. That is why the House should be most grateful to my noble friend Lord Dean of Beswick for having raised the situation in the construction industry with reference to housing.
Perhaps I ought to warn the noble Earl that sooner or later he will—and, if he cannot, the Government will—have to address the principal problem that is raised in this debate. It will be no good him producing a presentation of selective figures relating to the aid

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given to housing associations in 1991 compared with 1990. It will be no good him producing figures to show how much matters have improved from 1985 to 1988. He will have to answer the main charge which was put succinctly by my noble friend Lord Jay.
Here we have a situation where on the one hand the need for houses—in which I include flats or dwellings—is clamant but on the other we see the idleness of people, capital and material which can satisfy that need. The noble Lord, Lord Jay, asked why, despite all the economic miracles which were going to do away with this kind of problem and which presumably have occurred in the past 10 years, the operation of the free market in the field of housing and generally in construction has failed to solve the problem. So, when the noble Earl comes to reply, unless he addresses the principal and vital question and tells us what the Government will do about it, his reply to the debate will be nothing more than a mere technical manoeuvre.
Let us deal first with the need. It has been referred to by other noble Lords in the course of the debate and reference has been made to the 150,000 homeless. Incidentally, we should like to have the government figure for homelessness at the end of June 1991 compared with that for 1990, if the noble Earl can provide it. We have heard mention of the homeless, of the families herded together in one room, often with primitive facilities for toilets, privacy and everything else in the bed-and-breakfast accommodation.
However, there are further factors which have been produced by the Building Employers Confederation, which is not a typically Marxist organisation, as I am sure the noble Lord the Leader of the House will agree. What do the figures reveal? They reveal that, of the total of 19 million houses in the United Kingdom—and I shall quote figures to the nearest thousand, although I have figures here which are accurate to the last digit—over half a million still lack the normal amenities which civilised society has come to regard as essential. Over I million houses, in round figures, were unfit for human habitation and a further 1 million were in a serious condition or what is described as in serious disrepair.
The confederation said that £24 billion would have to be spent sooner or later—not all at once—to bring the housing or dwelling stock back up to a reasonable, civilised standard. We wish to know why this has not been done. It is difficult to obtain figures. If we phone the Department of Employment we cannot obtain them nor can we obtain them from other ministries. The figure for the unemployed at the moment agreed between the Building Employers Confederation and the trade unions is 185,000, as near as they can make it. As my noble friend said, that is due to increase to 250,000 by the middle of 1993 unless something is done. In 1991 there were 7,000 bankruptcies in the building and construction industry.
Why has nothing been done at governmental level in order to ensure that the facilities available for building houses are used? Why have the Government done nothing? Unless they answer that question, they will forfeit the respect of the British population. As of
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now, the record of the Government on housing over the past 10 years is the most disgraceful in Europe. The Government will have to answer that question. They may say that they have no money to do anything. No money? On certain matters they can provide all the money they wish because questions of principle are involved. I shall never forget the right honourable gentleman, the Member of Parliament for Henley, providing billions of pounds in expenditure for the rehabilitation of the Falklands. He said, "That is a question of principle, the money has to be found". However, when it came to other environmental matters, including health and housing, of course the money could not be found, because we were short of resources.
That will not wash any more. As my noble friend said—and this was reinforced by the noble Lord, Lord Mellish—£6 billion is in the hands of local authorities. They are not allowed to spend it or are only allowed to spend it in dribs and drabs. Not all local authorities share those resources equally. Some do not have much in their capital accounts. However, is there any reason why local authorities should not be allowed to borrow in respect of capital expenditure? The Government do it all the time. There is no reason why local authorities should not be allowed to do the same. The noble Earl may reply, as advised by his economic advisers, that this would be inflationary. He has no need, coming from his party, to talk about inflation. What the Government hope for is a rise in housing prices, which will be inflationary because it will provide extra collateral for credit which the banks will be only too glad to provide.
The inflationary argument simply will not wash. The public sector borrowing requirement may, as some City commentators have already put it, rise to a figure of £22 billion next year. This will not matter as long as the capital investment is there to cover the deficit. The noble Earl or his Government should know this just as well as anyone else.
If we refer to capital expenditure by other countries, we find that Britain is well down the league. The Government's share of fixed capital formation as a percentage of gross domestic product in the United Kingdom runs at 2.3 per cent. In Germany it is 2.5 per cent., in France it is 3.4 per cent. and in Italy it is 3.5 per cent. No economist—even at the London School of Economics—can produce figures which will convince me, the House, the City or intelligent people anywhere, that an increase in the public sector borrowing requirement sufficient to allow local authorities to borrow to build houses, to reduce unemployment and to reduce human misery will be inflationary.
Let us not underestimate the misery that is being caused by the catalogue of needs to which I have referred, the necessary repairs and the houses which are unfit for human habitation. It is no good for the Government to try to ride away from that on a set of disconnected and probably entirely irrelevant figures.
I should not wish to conclude the few remarks which I have ventured to address to your Lordships without being constructive and without telling the Government what in my view should be done. That

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goes for this present Government as well as for the government which I hope will succeed it. Something has to be done now and can be done now. It can be done as soon as the Prime Minister gives priority to this greatest of all human needs—the provision of proper housing. The Government can have a meeting tomorrow and decide to release the funds to allow local authorities to start immediately to repair their housing stock and to lay plans for new housing. They can authorise local authorities tomorrow to start borrowing on capital account in order to invest in new housing.
It is not often understood that the housing industry is not a manufacturing industry but is essentially an assembly operation. It does not need any lengthy tooling up. Although it is desirable to have long-term investment, in an emergency the housing industry does not need to lay down funds for the manufacture of vast plants and to acquire vast tracts of land and build factories. It is essentially an assembly operation which can go into action tomorrow.
In any good local authority there will already be plans for the houses it wants to build and the places in which they should be built. Local authorities have even abolished the old bills of quantities which used to be the subject of so much manoeuvring on tendering and so costly to repair and which took so long to reply to. In modern housing most local authorities not only have the plans of the houses themselves, they have detailed drawings and specifications right down to bending schedules and schedules of finishes, with the minimum of what used euphemistically to be called PC items. That is all ready.
The authorities know where to put the work out to tender. The tenders are not difficult to reply to and can be replied to within weeks. If land has to be prepared, all that is necessary on virgin land is to sink boreholes to make sure that the builders do not encounter running sands when the foundations are put in, because running sands can be hell to deal with if one is building houses on any scale. That can be done the following week. There is plenty of hardcore for foundations; there is plenty of cement in the country; there are plenty of bricks, even though it may take some time to hot up the kilns; there is plenty of bitumen for damp courses; there are plenty of breeze blocks for internal walls; and there is plenty of timber, but if timber is not available it can be obtained from the Soviet Union. Builders can obtain all the electrical wiring they want. All of that can be done within weeks and a start can be made on making an impact on the housing situation. Above all, that will give a kick start to the economy.
That can be done now. It can be done tomorrow if there is a sense of urgency. It can begin to make an impact on the economy within a matter of months. It might even begin to make an impact on the economy before the last possible date for the election of 9th July next, if I may hang out the electoral bait to the noble Lord. The Government should act on the matter now. It can be done now and either they should get on with it or they should get out.
4.45 p.m.
Lord Ezra: My Lords, like other noble Lords who have spoken, I should like to express appreciation to the noble Lord, Lord Dean of Beswick, for having introduced the debate today, in which he spoke from his great experience of the construction and housing industry.
Rarely in the recent past have we tackled a subject of greater economic and social importance. It impinges on the economy and it impinges on the way people live. In dealing with the issue this afternoon noble Lords have touched on many aspects of this wide-ranging problem. In introducing the subject, the noble Lord, Lord Dean, reminded the House of the most recent pronouncements and estimates of the Building Employers Confederation, which unfortunately considers that the present recession in the construction industry will last throughout this year and cannot see any signs of it coming to an end at an earlier date.
My noble friend Lord Davies spoke from his personal experience of the building industry to support that view. The problems of the consulting engineers, an important branch of the industry, were dealt with by the noble Lord, Lord Amwell, from his personal experience. The noble Lord, Lord Jay, with his great economic expertise, made the case that we cannot depend on market forces alone to deal with the housing sector and that this is an area in which there has to be a substantial degree of intervention in order to put matters right.
The noble Lord, Lord Ennals, with his experience of the social aspect of the problem, dealt particularly and most graphically with homelessness and the need for more community care resources. The noble Lord, Lord Mellish, with his usual practical approach and his experience of government office in housing and public building, made the particularly important point concerning the erosion of skills with the cut-back in training. We have found repeatedly that in the ebbs and flows of the construction industry in periods of recession cut-backs have affected training and that when the recovery has set in we have been short of the essential skills. How we can overcome that problem I do not know; we have not succeeded so far.
The noble Lord, Lord Blease, spoke particularly about the problems in Northern Ireland. The noble Lord, Lord Bruce of Donington, who has just sat down, spoke about the need to restore to a proper state of repair the many homes which at present are in serious disrepair. That is an aspect on which I should like to dwell.
The issue needs to be put in perspective. The fact is that over the past decade the Government's housing policy has concentrated on the objective of encouraging home ownership. That policy has helped to swell home ownership in Britain, which had already grown rapidly since the war, from 4.3 million owner-occupiers in 1950 to no fewer than 15 million in 1990. During that period, national average house prices have also risen from £5,000 for an average house in 1970 to £65,000 in 1990. The years of house price inflation and wider owner-occupation have placed some £700 billion of housing equity in the

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hands of 15 million homeowners. All that wealth has begun to have a major effect on our readiness to spend and to borrow, making us enthusiastic purchasers in times of boom and cautious spenders in times of recession, thus exacerbating the economic cycles.
However, there is another side to this issue. The sale of council houses has generated some 43 per cent. of all privatisation receipts and much of that revenue has been lost to housing investment. The Government have held on to the proceeds and used capital receipts from housing to finance government expenditure allocations in local authorities. As the noble Lords, Lord Dean and Lord Mellish, and others, have said, surely the time has now come, in the light of the continued depressed state of the economy, to release progressively some of the £6 billion to £10 billion worth of capital receipts built up from right-to-buy sales since the early 1980s. It would be necessary to ensure that that increased expenditure was kept under control, and in my opinion an adequate proportion of it should be devoted to repairs and maintenance of the housing stock and to the renovation of sub-standard houses.
The urbanisation that expanded dramatically during the 19th century and has continued ever since has provided a major capital asset for the nation in the form of houses. Although many of those early dwellings have proved to be unsatisfactory and have required demolition, a number have remained in use, and a significant proportion of the housing stock at present is old. Over half of the existing dwellings were built before the Second World War, and some 29 per cent. of those before 1918. It follows that a continuous programme of investment to repair, maintain and improve housing is required if the nation is to be adequately housed. The National Home Improvement Council, an organisation in which I must declare an interest as its president, has spent the past 16 years seeking to persuade successive governments of that need. Even though the NHIC has been successful in encouraging governments to adopt a number of new initiatives, those initiatives have not made the expected impact on improving housing because governments have not maintained an adequate financial resource for that purpose even when public expenditure might well have attracted large amounts of private expenditure too.
One of the most important requirements from the Government is an effective home improvement grant policy. A new grant system was introduced in the 1989 Local Government and Housing Act. That was welcomed at the time with high hopes as it provided for grant aid related to real repair costs; it defined a fitness standard below which housing would be eligible for grant aid; and it targeted help to families in most need. Unfortunately, the parameters set for the means test which defines those in most need are extremely restrictive and the financial resources available to local authorities have not encouraged the up-take of grant aid for substandard housing. The Minister for Housing is at present in consultation on how those problems can be dealt with. I know that
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there is a large measure of agreement among organisations which have responded to that consultation exercise.
Urgent action and investment is needed to improve the 2.5 million dwellings, to which the noble Lord, Lord Bruce of Donington, referred, identified as being in a poor condition. The backlog of disrepair in England alone is estimated to be in excess of £50 billion based on the survey carried out in 1986. When the results of the 1991 survey are eventually published, the backlog could be even greater. Currently, the spending on renovation grants is at its lowest level for several years, despite the new grant scheme, and local authority investment is running at about £500 million a year against the current repair backlog in council housing of no less than £22 billion.
In those circumstances, the Minister should implement the revised home improvement grant scheme as soon as possible, and the Government should make adequate resources available to enable local authorities to direct grants to improve housing. Indeed, in the current economic recession the Government could make unlimited resources available to meet all eligible grant applications. Now that only housing and families that comply with the means test requirements can obtain grants, there is no fear of that investment going through the roof or indeed falling into the wrong hands. That was the criticism made in 1982–84 when the Government last agreed to unlimited grant applications. There was an element of justification in that criticism, but under the new scheme that could not happen.
These measures, sensibly applied, would go a long way to assisting the housing construction industry whose workload is forecast to be running at some £2 billion below 1988 levels in 1991–92, and job losses in the industry are likely to be in the region of 100,000 this year. As other noble Lords have said, reinvestment would create jobs, be non-inflationary, help to tackle the homelessness crisis, ease the pressure on new house prices, and begin to tackle the backlog of housing disrepair. There would also be cost savings in unemployment benefit, reduction of the cost of bed-and-breakfast accommodation, to which many noble Lords referred, and more taxes would be generated from the building manufacturing industry. Never has there been a better time to make a concerted attack on stopping the rot in the nation's housing stock. There is a good supply of skilled workers, and builders' merchants and manufacturers have their yards stocked full of building materials. Thus, the manpower resources and the material resources are there. The NHIC, the Institute of Housing and many other organisations have made a well-researched and soundly argued case to the Government to stimulate the economy through improving the housing stock. That should be one of the principal measures introduced to counteract the continuing recession.
4.58 p.m.
Earl Howe: My Lords, I too should like to thank the noble Lord, Lord Dean of Beswick, for introducing this debate and for his kind opening remarks. It is a subject on which he speaks with personal knowledge and a deep commitment.
I have listened to the points made by noble Lords with much interest, just as throughout the course of this recession members of the Government have always been ready to listen sympathetically to construction leaders to ensure that we fully appreciate the industry's problems. Department of the Environment Ministers have met industry representatives on several occasions and my right honourable friend the Prime Minister met the three leaders of the Construction Industry Employers Council last autumn. The Government can be relied upon to continue to listen and to do all they can for the industry within the necessary economic constraints.
It has been suggested by many noble Lords today that the Government could do more to help the industry. Proposals have been made for programmes of contra-cyclical expenditure, but that kind of interference in the market on behalf of one sector of industry does not recommend itself. Having said that, I hope that noble Lords opposite will take comfort from the remarks that follow. Government capital expenditure on construction is already considerable —at least £19 billion in the current financial year. In addition, government investment in non-housing construction is at an all-time high and is spread across a wide range of areas in the country. Through City Challenge we shall spend £400 million over the next four years to generate private investment in the inner cities. Central government support in the form of credit approvals for local authority capital expenditure and grants on education rose 12 per cent. in 1991–92 to £506 million. In addition, central government will itself spend £635 million on school and higher education building this year, making a total of £1.14 billion. Capital spending on hospitals is at an all-time high. Gross capital expenditure in England rose 12 per cent. in real terms in 1990–91 and a further increase is expected in the current year. The Government have also provided substantial increases in spending on national roads. Expenditure on national roads this year is around 50 per cent. higher in real terms than it was in 1988–89.
I accept that the private housing market has declined since the boom times of three years ago. A slow upturn in house building starts is not evident but any recovery will be slow due to the large unsold housing stock. The recently announced temporary relief from house stamp duty—which is a reality—should provide a boost to the market, while the mortgage relief package will help to prevent the market being flooded with repossessed homes as well as assisting those with mortgage arrears.
The noble Lords, Lord Jay and Lord Blease, among others, asked whether the mortgage rescue schemes announced just before Christmas were working. They asked whether we had any figures. The Council of Mortgage Lenders now expects that the total amount pledged by lenders for mortgages into
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rent schemes will be at least £1 billion. Lenders and housing associations need to settle the detailed arrangements for those schemes but they are pursuing them as a matter of urgency. The schemes should be coming on stream by the end of February.
The noble Lords, Lord Dean and Lord Jay, as well as other noble Lords, laid particular stress on the need for affordable rented accommodation. We recognise that there are shortages of social housing in some parts of the country, especially for those people who cannot afford to buy and cannot find private rented accommodation. We therefore plan to increase the output of social housing substantially over the next few years; but that need not mean more council housing.
As a first step, we want to reduce the local authority monopoly of rented housing and provide more choice for tenants. We have therefore been encouraging authorities to move away from their traditional role as direct providers and to adopt an enabling role in housing. Although they retain important statutory duties—for example, housing families in priority need under the homelessness legislation —we have been asking authorities to concentrate on assessing the needs of their areas and using housing and planning powers to stimulate activity by housing associations and the private sector to meet those needs. Local authorities' main responsibilities now lie with the renovation of their existing stock, on which, to answer the noble Lord, Lord Ezra, they will spend over £1.5 billion a year.
As local authorities concentrate on their strategic role, housing associations have become the main providers of new low cost housing for rent and sale. Let me explain what the Government have done. We have increased public resources available to the Housing Corporation for new development by housing associations to £1.8 billion next year, rising to over £2 billion a year thereafter. We have reformed associations' grant arrangements to enable them to attract private investment to supplement public resources. So they can build more houses than would otherwise have been possible. Together with associations' increased efficiency and the recent falls in land and construction prices, these measures will enable Housing Corporation sponsored output to reach 43,400 next year—almost 25 per cent. more than previous forecasts. It will rise further to over 50,000 a year in the following two years. Over half of those homes will directly benefit homeless families and more than three-quarters of them will be for rent.
We are frequently asked to allow authorities to spend a greater proportion of their receipts on both the provision of new housing and the maintenance of existing housing. That was a point raised by the noble Lords, Lord Jay and Lord Mellish, and other noble Lords. As has been said many times by my noble friend Lady Blatch from this Dispatch Box, relaxing the rules on receipts would have perverse distributional effects. The incidence of capital receipts, especially those from right-to-buy sales, bears no relation to housing need: it is greatest in the relatively well-off shire districts and lowest in the inner cities. Allowing authorities to spend more of their receipts would mean

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giving relatively more spending power to those authorities that need it least, and taking it away from those in greatest need.
Of course, not all rented housing need be subsidised or publicly owned, as the noble Lord, Lord Jay, emphasised. We are keen to revive the private rented sector, which has a particularly important role to play in providing housing for young, single and mobile people. Private landlords have been battling for years against statutory low rents which gave them little return on their investment. Not surprisingly, many withdrew from the market. We deregulated rents of new lettings from January 1989 and enabled landlords to let on fixed term tenancies at market rents. That is helping to create a more positive attitude among existing and potential landlords and is encouraging them to bring more and better accommodation on to the market. The availability of housing benefit, generally up to market rent levels, means that poorer tenants can consider private renting as well as social renting.
However, some 600,000 private dwellings remain vacant—over 4 per cent. of the housing stock. Many are in the areas where demand is at its highest. Many are empty for good reasons. But many are ready to be occupied and they could be used to house the kind of families referred to by the noble Lord, Lord Ennals; that is to say, families who are in real need. Landlords and tenants just need to have confidence that they will both get a fair deal. We have recently taken two initiatives to bring back into use some of that property and so help to relieve housing shortages.
First, we have set up a pilot scheme whereby housing associations will let and manage private property for a fee and rehouse the tenants if the owner needs possession. So far, five associations in London and the South East are involved. Secondly, we have a new scheme operative from 1992 to bring back into use flats over shops, very many of which are empty. Under this scheme, we have set aside £25 million over three years for local authorities to pay grants for minimum works to make such flats fit for letting. That is expected to bring 2,000 flats back on to the market.
The noble Lords, Lord Ennals and Lord Mellish, laid great stress on the problem of homelessness. I echo many of their sentiments. Reducing family homelessness underlies all our housing policies. However, building new houses is not the only answer, as I have just tried to explain. We must also ensure that the nation's existing housing stock is used to best effect. As a further example of that, we are encouraging local authorities to improve the management of their stock and reduce the period between re-lets instead of resorting to bed and breakfast accommodation. If all authorities achieved an average re-letting target of six weeks in London and three weeks elsewhere, the effect would be equivalent to 17,000 extra lettings in England compared with 13,350 families in bed and breakfast accommodation.
The noble Lords, Lord Mellish and Lord Ezra, mentioned training and the Government's commitment to it. The Government are as committed as ever
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to training. The reduction in the number of trainees is largely because of the difficulty in finding placements in firms. I fully understand why that is happening when firms are in financial difficulty, but in the the end it is shortsighted. That is why the Government welcomed the CITB's special funding package last year when it drew £6.5 million from its reserves to provide additional financial support for firms taking trainees. Training is vitally important and will be ever more so as new skills are needed for the industry.
Lord Mellish: My Lords, perhaps the noble Lord will allow me to interrupt. I am much obliged for what he said about training. The Construction Industry Training Board is a body that is well known to the Minister and his department. If what he said is true, can he explain to the House why, after all this time, there still has to be an inquiry into the way it conducts its business? All that does is hold up its work.
Earl Howe: My Lords, I am not quite sure of the point that the noble Lord, Lord Mellish, makes. I do not believe that there has been an inquiry as such, but it is necessary—
Lord Dean of Beswick: My Lords, perhaps I can help on this matter. The original CITB was recast about two years ago and reformed on a different basis. The noble Lord, Lord Mellish, asks why it is coming under review again so soon.
Earl Howe: My Lords, perhaps the noble Lord will allow me to drop him a line on that point. The announcement to which I referred was one in which the noble Lord, Lord Dean, was involved just before Christmas. It was welcomed on all sides of the House. We do well to look at the CITB's budget every time that its affairs come before the House. It gives us a good opportunity to review the training situation in the construction industry.
In what I have said I am not pretending—how could I?—that the Government's policies will have the effect of ironing out the peaks and troughs. Activity in the industry will always be cyclical. It is inextricably linked with the state of the national economy, as has been said by a number of noble Lords. While the economy boomed in the 1980s, the UK construction industry enjoyed a period of unprecedented growth. Output rose steadily every year from 1981 to 1990, from £25.1 billion in 1981 to £35 billion in 1990; both those figures are at constant prices. That is 10 years of continued growth, despite increasing difficulties. New orders rose every year from 1981 to 1989.
When times became harder, the harsher economic climate hit the construction industry earlier than many others; and just because past growth had been so high, the downturn when it came felt that much worse. But to keep things in proportion, I should point out that even now the rate of activity is one-third higher than it was in the 1980 recession.
Several noble Lords referred to the prospects for recovery. The recovery in the construction market was expected to start in the housing sector and a slow upward trend in housing starts is now established. The latest figures show that although private sector housing orders fell back in the third quarter of the

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current financial year, housing association investment is keeping public sector output up. It is still too soon to talk about established trends but those are hopeful signs.
There will always be some variations between the prosperity of different sectors of the economy over time. But what we are striving to do is to create the long-term economic climate in which construction and other industries can flourish. Inflation in November was down to 4.3 per cent., which was below the EC average for the first time in five years. Interest rates have been substantially reduced since we joined the ERM. Those factors assist home owners and tenants as much as they do industry. There were some helpful fiscal measures in the last Budget designed to assist industry over the recession.
Some enlightened industry leaders not only accept the variations in the economic cycle but have developed management that is flexible enough to allow their companies to flourish in most conditions. They realised the boom would not last for ever and planned accordingly; borrowing only modestly and not over specialising in any one specific type of work.
The noble Lord, Lord Amwell, referred to the overseas markets. The advent of the single European market which, in terms of construction output will represent about £300 billion, will further increase the options for adventurous companies. In the longer term, Eastern Europe will provide additional opportunities. Next week my honourable friend the Minister for Housing and Planning will be leading a group of a dozen top British contractors, property developers and consultants on a trade mission to Bonn and Berlin. That arose from a visit to London last summer by the German Federal Minister for Urban Development who told us that her Government would welcome the participation of British firms in the massive infrastructure and urban renewal programme needed for East Germany.
My honourable friend's department has also been organising the forthcoming British Construction Day in Erfurt, one of the regional capitals of former East Germany, in which over 40 different British construction companies will be taking part. My honourable friend also plans to lead a party of building materials' producers to Sweden in a couple of months time if sufficient interest is shown by the industry —and of course we hope that it will be.
In the time left perhaps I may cover a number of points that I have not already addressed, raised by noble Lords during the debate. The noble Lord, Lord Dean of Beswick, said that local authorities are forced to sell their housing stock. I do not believe that he really meant to say that because that is very different from saying that tenants have a right to buy, which is the way one should put it.
Lord Dean of Beswick: My Lords, what is the end result if the local authority does not wish to sell to a tenant? There is no difference.
Earl Howe: My Lords, tenants have the right to buy. They are not being forced to buy. They can exercise that right if they wish. Local authorities are not forced to sell to them.
Lord Dean of Beswick: My Lords, I am sorry but the Minister must get this clear. He said—I heard him quite clearly—that local authorities are not forced to sell if the tenant wishes to exercise the right to buy. The noble Earl does not understand the legislation. If the tenant wishes to buy the council house in which he lives the local authority is forced to sell. There is no doubt about that. There are no two interpretations of that situation. Incidentally, the Secretary of State who brought about much of that legislation sits on the Government Benches. If I am wrong he will tell me.
Earl Howe: My Lords, I am glad to have that clarification from the noble Lord, Lord Dean.
It is worth pointing out that 1.4 million families in England have exercised the right to buy. That is testimony in itself to the popularity and sense of the Government's policies.
The noble Lord, Lord Bruce, asked whether I could provide comparative figures for homeless people between June 1990 and June 1991. I have figures that I hope will be helpful, though they are not quite the figures for which he asked. Local authorities accepted responsibility to secure permanent accommodation for 36,800 households in the September quarter of 1991, compared with 36,100 households in the June quarter of last year and 36,100 households in the September quarter of 1990. In the year to September 1991, local authorities accepted 144,300 households as homeless. However, it must be remembered that those figures relate to the numbers of households actually found accommodation by local authorities. They are not people without a home.
The noble Lord, Lord Blease, spoke of the health and safety record declining as a result of the recession. The Health and Safety Executive continues to monitor the industry with its customary diligence. It is not possible for it to see all the sites but those most at risk are targeted. In 1991, 40,000 sites were visited out of a total of 400,000 active sites in progress. I am pleased to note that there has been a recent and significant decline in the number of fatal accidents.
The noble Lord, Lord Ennals, asked what the Government will do about the trade deficit in building materials. It is the Government's view that the industry itself must face up to its own challenges and problems and must not shy away from the innovation that is needed. Some firms are seizing export opportunities even now. There are trade missions to promote British products. Much of the deficit, however, is due to timber imports which unfortunately are largely unavoidable.
The noble Lord, Lord Jay, asked me how many houses are built privately for rent. I am sorry to say that those figures are not available. Private housing completions for both sale and rent in 1990 amounted to 130,000 units. The figures for last year are not yet available.
The noble Lord, Lord Ennals, suggested that other EC states are not similarly affected by the recession in the construction industry. I should like to put the record straight. Output is declining throughout the EC without exception.
The noble Lord, Lord Amwell, asked whether quality was in some sense the victim of the

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requirements for fee competition and compulsory competitive tendering. The Government fully accept that quality will need to be taken into account more explicitly in considerations of tenders for professional services. As I am sure the noble Lord well knows, there are provisions in the Local Government Bill currently before Parliament which will allow the introduction of modified tendering procedures to enable local authorities to consider tenders against a quality threshold.
If I have missed any important points from the debate I shall be pleased to write to noble Lords afterwards.
The Government are fully aware that these are hard times for many in the construction industry, but the medium to long term prospects are bright. I am confident that when the recovery comes the industry will play its full role in the national economy. But I must stress that it is now, while times are still hard, that the industry must begin preparing for the future, otherwise it will simply be too late. I hope that I have made clear to your Lordships that the Government are doing what they can to assist the industry in its present difficulties; but at the same time it is for the construction industry's leaders to continue to do all they can to make and seize their own opportunities.
5.20 p.m.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for his reply. However, it indicates the enormity of the gap between the Government and everyone who has spoken in the debate. The Minister has reiterated part of the policy that is responsible for the present situation: the removal from local authorities of their historical role of building council houses.
A few weeks ago the noble Baroness, Lady Blatch, told me that the most ambitious building programme that the voluntary sector could provide was that of building 48,000 houses per year in two years' time. That is less than half the total number of houses that housing organisations say must be built annually in order to have any impact on the present disastrous situation. Will the Minister convey to the Secretary of State the request for 100,000 houses to be built each year? Will the Secretary of State untie the garrotte from around the throats of local authorities and let them build the remaining 52,000 houses per year that are required in the interests of everyone else?
The Minister also listed the Government's expenditure this year on the building industry. However, one of the saddest aspects is the fact that once again the local authorities are victimised. The Minister spoke about increased amounts being spent. I assumed that he was speaking about announcements made in the Autumn Statement. However, the Housing Magazine dated 20th December states:
"Overall allocations to local authorities have been cut from £1.86 billion this year to £1.82 billion next year".
A cut of £40 million has been made in the amount given to local authorities, even though they have the awful job of trying to provide houses for homeless and displaced people as a result of Government legislation.
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The statement that the Government have done so well as regards spending so much money on building by health and education authorities will not wash. I have tabled two Questions to be answered next week which will deal with the issue. As regards spending on the health sector building programme, the amount spent per person in opted-out trust hospitals is five times greater than that spent on people in hospitals still managed by health authorities. As regards the education sector building programme, the Government provide five times as much money for every child in an opted-out school as compared with those in schools in the public sector. I hate to tell the Minister that on that count the Government must be accused of partisan treatment against people in the public sector.
I initiated the debate with two aims in mind. First, to unlock an increased allocation of money from the capital receipts that are held in abeyance. Secondly, to have that money made available to local authorities which would then activate the building industry mainly in the private sector but in some cases in their own building departments. There is no evidence to show that the Government's reliance on the voluntary sector, albeit welcome, would ever provide the solution that we require.
I thank all Members of your Lordships' House who have taken part in the debate. It was worthwhile but, unfortunately, the Government still refuse to recognise their mistakes. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

The Apex Trust
5.24 p.m.
Baroness Denton of Wakefield: My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer to a Private Notice Question which is being asked in another place on the Apex Trust. The Statement reads as follows:
"The Apex Trust was established 27 years ago to assist with the employment and rehabilitation of offenders. It is one of a number of organisations working in that field and it has made a valuable contribution.
"Apex has been involved with the employment and training programmes of the Department of Employment for many years. It participated in employment training since the launch of that programme in 1988. It has also received core funding from the Home Office. In April 1990 the first Training and Enterprise Councils were established. In 1990–91 51 TECs were set up. The remainder were established in the current year, 1991–92. TECs took over the task from the department of contracting with providers locally for training.
"In the spring of 1990 the department recontracted with employment training providers with some adjustments in volumes and unit price. In doing so we of course gave the providers the necessary contractual notice. When all the TECs

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had been established my department ceased to have training contracts with Apex. All TECs have available to them working capital loans to meet initial costs and to enable them to advance funds to providers where they have thought this appropriate. The position of Apex was no different in these respects from that of any other training provider.
"In March 1991, the department agreed to make available up to £500,000 to assist Apex in adjusting to the new contractual levels of employment training. So far Apex has been paid, under that arrangement, £250,000 at the end of March 1991 and a further £100,000 at the beginning of October. Meanwhile, Apex has concluded contracts with a number of TECs and has generated revenue from these contracts.
"The department made a duplicate payment to Apex in mid-April 1991. It is difficult to know how this payment could have added to Apex's financial difficulties; the effect of it has been to provide Apex with an interest-free loan. Apex has been told that the department would be willing to phase the recovery of that sum over a substantial period of time.
"In the autumn of 1991 Apex was again in touch with the department and the Home Office, as a result of its continuing financial difficulties. The department has been helpful to Apex in a number of ways, as the noble Baroness, Lady Seear, has recognised, but I am sure that the House will accept that it would be quite wrong to make payments of taxpayers' money to an organisation on the brink of liquidation.
"I understand that the Apex Trust has announced that it plans to call in receivers at the end of the week. Today the Department's officials have been instructed to get in touch with each of the Training and Enterprise Councils which have contracts with Apex to make it clear that they are expected to ensure that all Apex trainees continue their training with other providers".
My Lords, that concludes the Statement.
5.28 p.m.
Baroness Turner of Camden: My Lords, I thank the noble Baroness for repeating that Answer. She will be aware that Members on this side of the House view it with some concern. The reason for that lies to some extent in the figures that are available this week for unemployment. Between November 1990 and November 1991 unemployment increased by 750,000. I understand that in London 60 people are chasing each vacancy. Bearing in mind that situation in the labour market it will be appreciated that some people are at a disadvantage. Included among them must be people who have been in prison and people from ethnic minorities.
Until relatively recently I was involved with the organisation Fullemploy. That organisation faced much the same kind of difficulties as Apex has faced. Fullemploy has had to cease operation. That is a great pity because it did an extremely good job for large numbers of people from ethnic minorities many of
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whom were women. I used to visit its centres. I was impressed by the way in which people were trying very hard to acquire the sort of skills which would provide them with some sort of ability to obtain a job in an increasingly difficult market.
I turn now to the rehabilitation of offenders. If we are a civilised society we believe not only in punishment of offenders but also in rehabilitation. It seems to me that as regards Apex, there is a special case to be made. Are we really saying that as regards ex-offenders, we shall not make a special effort to ensure that they have the necessary skills training? If so, it seems to me that we are being extremely shortsighted because we are then opening the way to a situation in which people are not rehabilitated. They leave prison and after a while, because there is no rehabilitation, they are again involved in criminal activities. And so the cycle begins again. Some years ago when I visited Holloway Prison I was told by staff that they saw a number of women regularly. There was a sort of cycle because there was no adequate rehabilitation.
Apex has had a reputation for doing a very good job in that area. I shall listen with great interest to what the noble Baroness, Lady Seear, says. It is deplorable that, as a civilised country, we cannot provide the resources from public funds to enable offenders to receive rehabilitation and some form of training. I view the Statement with great anxiety.
Baroness Seear: My Lords, I speak not only as a representative of these Benches but also, as I am sure noble Lords will know, as chairman for the moment of Apex. First, I congratulate the noble Baroness, Lady Denton, on her promotion to the Front Bench. Probably she would have wished that her first appearance had been on a rather more cheerful subject. I sympathise with her about that and I know that it is not her fault.
The whole story of Apex is complex. I do not intend to take your Lordships' House through the entire history. However, because it is complex it is not surprising that the Statement reflects certain inaccuracies about which your Lordships' House should be informed. I do not for a moment suggest that they are deliberate inaccuracies. I repeat that it is a complex story and I am not surprised that it has become a bit snarled up—and I use non-parliamentary language.
As regards the £250,000, that is a dramatic sounding figure. It is particularly dramatic when one receives a letter on 3rd January this year stating that the Department of Employment has paid that twice by mistake and wants it returned at our earliest convenience. I do not know what would be the earliest convenience of any Member of your Lordships' House in finding £250,000. However, that is in passing. The money has attracted attention; it has distracted attention from what are the basic issues.
The Statement refers to changes which have taken place. Apex operated training programmes satisfactorily with the MSC for a number of years. At that time there were no financial problems. I wish to stress that because the point was made this morning that there had been financial irregularities. That is an extremely serious allegation and I refute it. If your

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Lordships look at the relationships between Apex and the MSC, it can be seen that, financially they were entirely satisfactory.
When the employment training scheme came into force we contracted with the department to run a number of centres using employment training money. That went satisfactorily until the time at which the department decided, unilaterally, to change the terms of the contract. As the noble Baroness said, there was a 28 day clause in the contract and that clause was invoked so that, strictly speaking, the department was within its legal rights. However, your Lordships' House will understand that when 30 projects are being run up and down the country for which it is necessary to hire premises and staff, arrange equipment and deal with the 101 matters which must be dealt with when running establishments of that kind, 28 days' notice, with a much lower rate of pay imposed afterwards, is a very difficult adjustment to make. Undoubtedly, Apex lost a considerable amount of money as a result.
I have said before and I wish to repeat that all the way through the Department of Employment has tried to be as helpful as it can, presumably not because the department is fond of us—is a department ever fond of anybody?—but because it recognises that the work is extremely valuable. It offered to pay up to £500,000 for shutting down costs, which are considerable, as your Lordships will know. That was the arrangement.
We then moved on to TECs. We had to negotiate with the TECs, which is quite expensive. However, we negotiated contracts with eight TECs. What has not been said in the Statement and what is extremely important is that we ran into considerable difficulties because the TECs are very late payers. We were being paid nine weeks in arrears. We have to pay rents up front and salaries on the 20th day of each month. When one is talking about one third of a million pounds being delayed in payment, one runs into financial problems as we did. That was not because of inefficiency or incompetence but because the TECs were paying late.
The Statement says that working capital loans were made available. I have raised this point in the House before. I have been told, and it has not been denied, that the loans were to facilitate improvements in cash flow problems. Of the eight TECs with which we were dealing, two used the money for that purpose. I do not know what the other six TECs did with their money but I assume that they put it into the bank and drew money on it which is what I should have done in their position. However, we did not receive that money. So our cash flow problem was not eased by the taxpayers' money—and we are all concerned with taxpayers' money—which the Government made available for that purpose. That got us into difficulties.
So great were those difficulties—and this was a shock to businessmen in your Lordships' House—that we were reduced to factoring our invoices in order to pay our bills. That meant that we lost on the money when we received it ultimately. There was no other way because of the delay. That created the impression that we were about to become insolvent. Because there
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was doubt about our solvency the Home Office said —and I understand this because it is obviously correct —that public money provided by government departments should not be paid to organisations which may be insolvent.
I have explained the reasons for our potential insolvency in the middle of last year. The Home Office had always paid us core money and because of the doubts about our solvency, it has not paid any core money for the past six months. The fact that that has not been paid at all has made the insolvency a great deal more likely to take place than would have been the case if that line had not been taken. That has been the real cause of the problem.
The question of the £250,000 is a different matter. That is in dispute between us and I shall not go into details unless your Lordships wish me to. It is a long and complicated story. It is not the main issue. However, because the department says that we owe it money, all other government payments to us—money owed to us, as is admitted—is frozen, so that no money is coming in. That is the reason we are saying that must go into liquidation. We would be trading illegally because no money is coming in. That is the way the situation arose.
I want to make only one other point. I can see the ex-Whip thinking that it is high time I sat down. I may be misinterpreting his body language, and if so I apologise. I could make many points, but I shall not. However, I want to make one point very strongly indeed. The Statement said that other people can take on this work; that there are plenty of other people doing it. That is not true. We are the specialists in the training and placing of ex-offenders. NACRO does some of it, but it does many other things too. NACRO claims to be, rightly and successfully, a campaigning organisation. We are not. It may surprise your Lordships' House to know that I have always stopped our people campaigning. I say, "Your job is to train and to place. Do not get muddled up with anything else". We believe that that is the only way to be successful.
The idea that those people who would otherwise be trained by us will be satisfactorily trained elsewhere is a myth. Many in the training business are commercial trainers and no commercial trainer in his right mind will take on ex-offenders. They are about the worst commercial proposition one can envisage. They need a special organisation to look after their requirements. Training is a skilled business. Around 25 per cent. of the people who come to us are suffering from severe innumeracy and illiteracy. They often also suffer from a serious lack of confidence and belief in themselves. It takes longer and a different approach to put ex-offenders back into the market place. It also needs good relations with employers, which we have built up over the years. It needs good relations with prison governors and staff, which we have also built up over the years. If Apex is disbanded all that expertise will be thrown away. The Government should not fool themselves into thinking that commercial trainers will take it up. They will not.
That is my main point, though there are many other points I could make. We have done everything we

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were asked to do. The Government speak of a partnership between the statutory, the private and the voluntary sectors. We are the voluntary sector. The private sector behaved magnificently. We had the greatest help from British Telecom, British Gas, Nat West and others. Where we have been let down in the partnership is in the public sector. It is a short-sighted view if one is considering the long-term benefit of UK Limited.
I believe that it costs £310 at least to keep someone in prison, and I may be out of date. What chance is there for someone with a record who does not obtain a job? If one does not possess skills, the chances of employment in this country, even if one's record is white as the driven snow, are extremely poor. If, on top of that, one has a criminal record, one would be well advised to settle for a life of crime.
A probation officer this morning said, and nobody denies it, that if one gets an offender into work he is three times less likely to go back into gaol. I say to the Government, "If you want to empty your gaols—and you say you do—and that is the point of the Criminal Justice Bill; if you want to keep people out of prison, get them into work. And to do that you need specialist agencies."
Noble Lords: Hear, hear!
Baroness Denton of Wakefield: My Lords, I thank the noble Baronesses, Lady Turner of Camden and Lady Seear, for expressing the anxiety that everyone feels on the subject of the training of ex-offenders. I thank the noble Baroness, Lady Seear, for her kind remarks in noting my promotion. However, the Statement could not be a more serious subject on which to make my debut and my concern could not be greater. As evidence of that I would point out that in a previous role with the Black Country Development Corporation I authorised money for training ex-offenders.
However, in this instance there are certain matters which I must clear up. There is no question of a suggestion of financial irregularities.
Baroness Seear: My Lords, perhaps I may interrupt the noble Lady. The remark was made at a press conference this morning by a supporter of the Government. I deeply resent it.
Baroness Denton of Wakefield: My Lords, I apologise. I shall certainly look into the matter and write to the noble Baroness.
I understand that money for services from Apex has not been frozen. The Government have already made considerable sums available to Apex. The Department of Employment and the Home Office represent most of the trust's funding. Regard must be had to the fact that the overall financial position of Apex is weak, as it accepts. That has implications for the way we deal with requests for further help. The proper stewardship of public money requires everyone to tread carefully.
The duplicate payment of £250,000 is not in dispute. I confirm that the department offered to discuss a phased repayment of it. Answers to issues raised were dealt with by the department; loans were given for up front funding. However, it is not the
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department's policy to direct centrally to the TECs, which were created to look after local employment needs. The loan was made; other payments were given for closure costs, appreciating the differences that were involved.
5.47 p.m.
Lord Wyatt of Weeford: My Lords, listening to the noble Baroness, Lady Seear, on the wireless this morning I was most impressed. I was equally impressed by what she said this afternoon. There is no doubt that Apex is an admirable organisation which has built up a wealth of specialist expertise. The job must be done by somebody. If Apex is allowed to collapse more money will be spent than otherwise on recruiting other teams from other sources to do exactly what Apex was doing. Those teams will have to go through a learning curve. What is the sense of cheeseparing on this specific matter? No money will be saved and probably more money will be spent than otherwise.
Baroness Denton of Wakefield: My Lords, I thank the noble Lord for his remarks. The Government have been as helpful as they can in offering phased repayment of the overpayment. However, they cannot pay more money to a body that is already indebted to them.
Lord Prior: My Lords, perhaps I may first congratulate my noble friend on her appointment to the Front Bench. I am certain, as the noble Baroness, Lady Seear, pointed out, that this is not an occasion on which she would have liked to have made her maiden appearance from the Front Bench.
A number of us on the Back Benches regard what has happened as a retrograde step. I could see it coming. It has been coming for some while. I suspect that the reason it has been coming is that it is not a priority for the Department of Employment to spend money in this way; but it is an absolute priority for the Home Office. The problem is that the Home Office does not possess the money and always thought the Department of Employment had it. That is what has happened. It is one of those silly muddles where the Treasury gets in the middle and nothing happens.
I cannot believe that it is the will of the Government, of the Opposition, of this House or of the House of Commons that in seeking to help and train ex-prisoners, we should deny the resources to the private sector and to an organisation which has worked well for a number of years. It has been caught between two departments. Also there is always a certain view within the Civil Service that private organisations are a bit of a nuisance and that it is better if everything is done so that there is accountability to the Permanent Secretary in a different way. On this occasion all these factors are contributing to what is a terrible mistake. I beg my noble friend and the Leader of the House, who is in his place, to have this matter looked at again. If we cannot look after ex-offenders and train them properly, as the noble Lord, Lord Wyatt, has pointed out, we shall have to pay a terrible price in pounds, shillings and

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pence let alone in the social life of this country. I ask my noble friend Lady Denton to look at this matter again.
Baroness Denton of Wakefield: My Lords, I assure my noble friend Lord Prior that I shall take his anxieties and those of the House expressed today to my right honourable friend the Secretary of State. I shall make those anxieties clearly understood. I wish to point out that Apex's contract with the department in 1990–91 was worth £3.3 million and that there is a concern for the training of ex-offenders. There are experimental pilot programmes within TECs for training people still in custody. The period of custodial sentence counts as unemployment for the purposes of eligibility. Therefore, in effect, ex-offenders are given priority.
Lord Ennals: My Lords, clearly in no sense is this a party political issue. Happily, concern has been expressed from all sides of the House. I agree with the point made by the noble Lords, Lord Prior and Lord Wyatt. We are fortunate in having for the first time on the Front Bench in this role a Minister who understands something about the problem. She may have been given not only the sad opportunity of making a disappointing Statement, but an opportunity now to do something very positive and constructive.
I first came into contact with Apex over 20 years ago when I was working as a director of MIND. Some ex-offenders are people who have had psychiatric problems early in their lives. As I have said, I had close contact with Apex about 20 years ago. I greatly admired the work that it did. It acquired a skill and an expertise both as regards the needs of ex-offenders and also an understanding of the firms that would take them on. It has done an invaluable job.
In congratulating the noble Baroness for being on the Front Bench, I wish to say to the noble Baroness, Lady Seear, that the community owes her a great debt of gratitude because she has stepped in at a time of crisis for that organisation. I do not look upon it just as a crisis for the organisation but as one for society in facing this problem. If this organisation goes out of existence, the Minister has been unable to say what will happen. I honestly believe that the Home Office and the Department of Employment have a responsibility to ensure that there is a specialised agency which is able to cope with trying to find opportunities for ex-offenders.
There could not be a worse time in our economic situation for people to get jobs when what they have to offer has a horrible black mark put against it although they may be people of the highest quality. I hope that the Minister will go a little further than she has already done. She cannot make a commitment. I hope that it will not be just officials who enter into discussions. It is perfectly clear that the department recognises that Apex is a fine organisation, and that what it is doing has to go on being done. I say in the hearing of the Leader of the House that I hope that Ministers will take on themselves a responsibility to find a way through this problem. I refer to the old
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rules that money cannot be paid; but I do not know the details. However, I am certain that an answer can be found if there is the will to do so. I plead with the Leader of the House and the Minister.
Baroness Denton of Wakefield: My Lords, I thank the noble Lord, Lord Ennals, for his kind remarks. It is the courtesy of the House which makes my task a little easier. I agree with the noble Lord wholeheartedly that any organisation which has the benefit of the noble Baroness, Lady Seear, as chairman is fortunate.
The Government are deeply committed to helping and training those with special needs including ex-offenders. TECs are contractually obliged to make such provision available and to ensure that there is this benefit. As I have said, officials will be in touch with each council. I am sure that after our debate and that in the other place, that there will be no doubt that the matter will be watched with great concern.
Lord Harris of Greenwich: My Lords, is the noble Baroness aware that the cost which she mentioned is trivial compared with the cost of crime in this country? Is she further aware that the Statement she has made today, if it leads to the death of Apex, will almost inevitably lead to still more people being sucked into the prison population? How can that make sense at a time of rapidly rising crime in this country? It is astonishing that the Government have permitted this situation to arise at a time when ex-offenders are finding it increasingly difficult to secure employment because of the overall current unemployment situation.
Perhaps I may give an individual example. Is the Minister aware that one of the critical issues faced by the Parole Board in determining whether someone should be released from prison on parole licence is whether they are going to secure employment? Is she further aware that what she has said today will make it almost certain that more people will be denied parole because they will not have employment opportunities when they leave prison? How can that be right at a time when the prison population is rising monthly?
Lord Donaldson of Kingsbridge: My Lords, before the noble Lord sits down perhaps I may add—
Noble Lords: Order!
Lord Boyd-Carpenter: My Lords, I believe it is now the turn of this side of the House.
Baroness Denton of Wakefield: My Lords, I thank the noble Lord, Lord Harris, for drawing attention to matters of such great importance. The issue today is the fact that the Apex Trust has announced that it will probably go into liquidation at the end of the week. Therefore, it is impossible to put further taxpayers' money at risk in that situation.
Lord Boyd-Carpenter: My Lords, will my noble friend at least accept congratulations and the hope that in the course of what I am sure will be a long and distinguished ministerial career, she will never have a more difficult Statement to make than the one with which she has opened that career? Does she appreciate

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(as I am sure my noble friend the Leader of the House does) that the House will be very unhappy to leave the matter here?
It will be unreasonable to expect the Minister to indicate what is going to happen at this stage. However, the House would value an assurance, perhaps from the Leader of the House, that within a reasonable time we shall have a further Statement as to what the Government's intentions are. Simply to leave the matter here will cause great unhappiness on both sides of the House and with intelligent public opinion outside. People will be greatly reassured if we can be told that the Government are working hard and rapidly on preparing the steps to take in this situation, and that your Lordships' House will be informed of these at an early date.
Lord Waddington: My Lords, I believe that matter is for me. I can tell your Lordships that it was repeating in the form of a Statement the reply to a Private Notice Question in another place. I shall have to read what was said in another place. I shall certainly discuss this matter with my right honourable friend.

Channel Tunnel and Network SouthEast
6 p.m.
Lord Clinton-Davisrose to call attention to the problems relating to British Rail in connection with the Channel tunnel and the difficulties being experienced in Network SouthEast; and to move for Papers.
The noble Lord said: My Lords, today's debate takes place at a time when the problems of British Rail in relation to the Channel tunnel and Network SouthEast are reaching crescendo proportions. The Government, in this regard at least, are in a state of utter disarray. They are a Government distracted from the real issues by the irrelevant dogma of privatisation and deeply divided about the route that they themselves wish to pursue over that phantasmagoria. They are a Government incapable of determining a set of realistic priorities crucial to the achievement of a coherent, co-ordinated transport policy. That is an indictment that only this day has been made out by the Institution of Civil Engineers.
They are a Government proffering a litany of statistics in substitution for policy, which bear little or no relation to the daily experiences of the travelling public; a Government engaged in a sterile and I believe a legally flawed argument with the European Commission over the critically important issue of the implementation of the environmental impact assessment directive, which is very important to the issue we are discussing, and which has been on the Government's side accompanied by a plethora of contradictory statements: that they were caught by surprise —that they were not caught by surprise; that there were no negotiations by the Commission—and of course, yes, negotiations had taken place; statements from the Prime Minister in Harare and the Secretary of State here which, I have to say, are far
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from the truth. These are not faults which can be cured by a Minister like Mr. Freeman offering boxes of chocolates to his secretaries.
The Government have, in relation to their preferred choice for the Channel tunnel route, dithered and misled British Rail. That has led to vast waste and damage: damage to Britain's ability to compete effectively in the European Community, post-1992; damage to the reasonable aspirations of all regions in the United Kingdom that they, and not the South East alone, would enjoy the benefits of the Channel tunnel; damage to the prospect that the best public value for money invested would result, and damage to all those in Kent and South-East London who have suffered blight and those, in particular, whose homes were purchased by British Rail—something like 1,000 were involved—at lower costs than might have been expected as a result of the Department of Transport giving a nod and a wink to British Rail that their preferred choice coincided with government policy. What is all that going to cost to put right?
The announcement made by the Secretary of State at the Conservative Party conference—not, mark you, to Parliament which was sitting just a few days later —was greeted with unconfined joy by the delegates to that conference; joy which had rather less to do with the newly-discovered environmental arguments which were put into the Secretary of State's mouth by his colleague, Mr. Heseltine, than the belief that help at last was to be at hand for vulnerable Conservative seats. It would be to stretch the imagination to breaking point to think that the same generosity of spirit would have been extended if those seats had been held by the Labour or Liberal Democratic parties.
It is worth putting on record that, with a somewhat greater appreciation of the facts, about a year ago the Labour Party had convincingly argued the case for the route which was eventually chosen. Meanwhile, valuable time has been lost. It is only about 18 months before the Channel tunnel is due to open, and Britain is ill-prepared for that critically important event. The Government cannot escape from culpability by placing the responsibility for the chaos which has ensued wholly on the shoulders of British Rail. British Rail was instructed by the Government to increase environmental protection and to engage in house purchases, and then to bring in a private sector partner in relation to the route that they were exploring. That took a year. There was no evidence of the availability of a private sector partner. In consequence, it was determined that it would be preferable for British Rail to develop the route alone. But of course this Prime Minister was for turning; and the announcement was made in October that the route to King's Cross would go via Stratford instead of British Rail's preferred choice.
Having expended so much time and effort, major questions arise, some of which were posed to the Minister in this House—and which have not been answered—when he repeated the Statement here. I ask him again. To what extent will NSE traffic be able to use the line? Will the route, at least to Stratford, be I able to accommodate international freight trains? In

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this respect, I want to ask the Minister whether he is satisfied with the measure of co-operation promised from British Rail vis-à-vis his department and Ove Arup? What is being done to ensure that all interested organisations are being enabled effectively to involve themselves in the discussions about freight and Network SouthEast traffic? Here I refer to freight operators, Eurotunnel, user's groups, employee organisations, and so on. Is it satisfactory that this should be done simply through a merchant bank?
I turn from that to the timing. The Secretary of State in another place asserted that British Rail had told him that the rail link was not required until the year 2005. That is categorically denied by British Rail. So who gave the Minister that information? Who is right? Our view is that delay of this order is wholly unacceptable. This route is required not just to save 30 minutes on the journey from Paris to London. It is vital in terms of relieving serious congestion in the South East; to enable international and domestic trains to operate efficiently and punctually. The rolling stock which is required is, we gather, a year late. There is no guarantee that it will be ready for service in June 1993.
What a contrast between the approach to high speed trains in this country and that exhibited by SNCF, with government support, in France. Their trains will be travelling at 300 kilometres per hour on the Calais-Lille-Paris route. In the United Kingdom, the maximum speed likely is to be 90 miles per hour —indeed, reduced to 60 miles per hour on the gradient through the North Downs, so that even outdated Network SouthEast rolling stock will be able to move faster.
So far as concerns international freight services, I should like to ask the Minister this question. Is he satisfied with the planning of timetables, which are crucial to the needs of future customers? How many of the special locomotives required will be ready for June 1993? Will it be only eight or 10 of the 39 ordered? I think the House will want to know what is the position from the Minister. How many special freight wagons suitable for running through the tunnel and on continental railways have been ordered? Is it right that the average speed for freight trains will be 27 miles per hour—and between Wakefield and Cologne 19 miles per hour? Just compare that with an average speed for road freight on the Continent of 42 miles per hour.
What will be done about the substantial environmental problems for residents arising from the fact that, because of capacity problems during the day, the majority of freight trains will have to travel by night? What plans have the Government made for introducing insulation schemes or for compensation to be offered? For example, do the Government have any plans for freight destined for the Midlands, South Wales and the North to by-pass London entirely? What has the Minister to say about the whole question of environmental impact assessment and compliance with the directive in that respect? The French are building a new link in order to provide for faster travel by international trains, to make for extra capacity for international and domestic trains and to remove
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freight from environmentally sensitive areas. These are vital matters which the Minister cannot ignore. The House is entitled to answers. So far there has been silence.
I want to say something about Ashford international station. There is a compelling need to construct this station along the lines of the positive scheme put forward by Ashford Borough Council. Its scheme would be integral with the existing station in order to make for easy interchange. The scheme could be built by June 1993, with the minimum of disruption to existing services. The scheme could accept 14 international trains per day. It could be built in stages and within the finance authorised. Ashford Borough Council is entitled to a proper answer to those points.
To add insult to injury, we now hear that the new commuter 465 trains designed for Network SouthEast for London are too big to go through the tunnel. What will be the cost to put that right? Is it a case of the wrong kind of trains, or the wrong kind of tunnel?
Is East Sussex County Council right when it asserts, first, that insufficient priority has been given to ensure that Network SouthEast can meet the needs of passengers to and from the south coast who wish to use the Channel tunnel; and, secondly, that electrification of the Hastings to Ashford line is vitally important? East Sussex County Council is entitled to answers to those two significant matters.
The Government have colluded quite disgracefully with British Rail in one of the grandest transport botches ever committed. I recommend that the Minister studies carefully the plans revealed by Labour and the ideas for the future presented only yesterday. The Minister laughs at that. He is never prepared to listen to the point of view of other people. The Government always think they are right and the country is paying a heavy price for that.
What Mr. Prescott put forward yesterday is constructive and it is intended to be so. He has set out the Opposition's case in a letter to the chairman of British Rail. But that is not our view alone. It was the view of the House of Commons Select Committee Report, which urged the Government to apply an integrated transport strategy—the Minister will say that he does not understand what that means, although everyone else does—and to provide a strategic approach at national level supported by adequate public investment and stimulated by private investment. As a result of the sheer incompetence of the Government, events are leaving Britain behind in being able to play its full role in the European highspeed network envisaged by the European Commission, supported in principle at least by the member states, and also in matching the major investment programmes of France, Germany, Holland and Belgium. Why are this Government yet again out of step?
My Lords, I beg to move for Papers.
6.15 p.m.
Lord Geddes: My Lords, for the second time in 12 months we are indeed grateful to the noble Lord, Lord Clinton-Davis, for raising the subject of British Rail and in particular Network SouthEast. His Motion is

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really in two parts. I shall try as briefly as possible to address each separately. Although the Channel tunnel will certainly affect part of Network SouthEast, it will not affect all of it; on the other hand, it will affect other regions.
I begin, as I did on 6th March last year, by declaring an interest in that I am an independent director on the British Rail (Southern) Board, which itself is a purely advisory body acting as a link between BR, on the one hand, and its customers and the local authorities in that region on the other. First, I shall refer to the Channel tunnel itself. For the start of services through the Channel tunnel next year, BR is committed to spending £1.7 billion on infrastructure (track, signalling, electrical power supply and maintenance depots) on terminals (specifically on Waterloo international station and nine intermodal freight depots throughout Great Britain) and on rolling stock (including passenger trains, electric locomotives and freight wagons). That £1.7 billion was protected in the Autumn 1991 Statement.
As for rolling stock, the Trans Manche super trains for the direct London-Paris/Brussels were ordered at the end of 1989. At this stage, the manufacturing consortium, headed by GEC-Alsthom, cannot guarantee delivery of the trains with sufficient time for testing before the scheduled opening of the tunnel in June 1993. Such testing being essential, the service will be operated at the earliest possible date consistent with ensuring that it will operate safely and reliably.
All rolling stock running through the tunnel will have to conform to the safety requirements and standards of Eurotunnel and the Inter-Governmental Safety Commission, and existing passenger rolling stock—British or French—will not be able to use the tunnel. This requirement and the technical complexity which I have already mentioned means that the delivery of other specialised rolling stock will probably be delayed until 1995.
On the more positive side, total route modernisation for Network SouthEast is effective—Thameslink, the Great Northern and West Anglia services are consistently performing well. South of the river, the Wessex electric trains and class 158 and sprinter trains from Brighton and Portsmouth to Bristol and Cardiff have become popular and indeed have increased business on the routes they serve. The same, it is to be hoped, will be true of the class 159 units being built for the Waterloo-Exeter service. All is not gloom on Network SouthEast. Over the past five years income has risen by 47 per cent., three new railways have opened, 11 lines have been electrified, 14 new stations have opened and 1,068 new coaches have been introduced, reducing the average age of the fleet from 24 to 19 years. There is still a long way to go, but at least that is progress in the right direction.
Regarding investment in Network SouthEast, which itself is up 70 per cent. over the past five years, BR envisages £900 million being available from the public service obligation grant over the three years commencing April 1992. Of this, £600 million is already accounted for by committed schemes and the remaining £300 million will principally have to cover essential infrastructure and safety renewals. No
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money will be available for the Kent coast networkers or for new trains on the Southend line. Nor can the next tranche —188 cosches—of the 465s proceed, despite authorisation by my right honourable friend the Secretary of State for Transport. The money required—some £150 million—is, and I quote, "not available". Previous tenders have expired and, therefore, the whole process of inviting new tenders has had, again, to get underway. In that respect, although he did not specifically mention it, I agree with the noble Lord, Lord Clinton-Davis: what a waste of public money!
Over the four-year period of 1985–88, government support for British Rail averaged only 0.2 per cent. of GDP as opposed to a Western European average of 0.7 per cent. Indeed, in the following year that 0.2 per cent. figure dropped to 0.12 per cent., while the average remained at 0.7 per cent. At the other end of the scale, we have Luxembourg—which your Lordships may say is not a huge railway network—with a figure of 2.9 per cent. of GDP being invested in rail. There are many other statistics which prove the same point. The Western European average is somewhere around two-and-a-half to three-and-a-half times greater than that of the UK and, again, Luxembourg is at the top of the league with a figure of somewhere around 10 times to 15 times greater than that of the United Kingdom.
The problem for BR—and this applies particularly to Network SouthEast—is that effectively since 1948 it has been and continues to be, again in relative terms, starved of funds. As the Sunday Times put it three days ago, BR's trains travel 50 per cent. more kilometres per employee than the West European average but with only 17 per cent. of the average subsidy.
The Government are concerned with the control of inflation through sound money and tightly constrained public expenditure. But under current conventions, the external finance of nationalised industries scores against the public sector borrowing requirement. The control of their external finance limit (EFL), as presently designed, does not discriminate between the discipline of current expenditure and the needs of strategic investment. That lack of discrimination sacrifices investment in future growth and therefore destroys the seed corn for future public sector revenue for the sake of the near term current cash account.
The recently announced leasing of 700 container-carrying freight wagons is welcomed as a move in the right direction, but it will still fall within the EFL. If the application of a private sector approach to leasing is allowed, leasing charges will continue to be a cost to the industry as now, but no imputed capitalisation would score against the EFL. In cash terms, that change would be completely neutral: an industry's cash outgoings are what they are. Increased costs of leasing can be offset by the normal use of tax breaks. Capital payments are avoided, earnings generated by investment are maximised and cash flows improved. Public sector value for money discipline could be maintained under the administrative machinery which already exists by separating cash and investment

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controls: nationalised industries have both an EFL and an investment ceiling. It would require a change of policy to end the use of EFLs as both cash and macro-economic controls. That could in principle be implemented at once.
Longer term, a broader commercial approach would open up the possibility of using the normal instruments available for using cash and spreading risk; such as joint ventures, trusts and delayed payment, as well as open market borrowing without Treasury guarantee. It really is remarkable—I almost used the word "ludicrous"—that SNCF should be permitted to borrow in the London market whereas British Rail cannot do so. It is normally argued that Treasury guarantees enable an industry to borrow more cheaply, so reducing the cost to the Exchequer of financing its investment.
However, to be consistent—and I am conscious of the time —such a test must also include all the other costs to the Exchequer; for example, the commercial and economic "disbenefits" of deferring or cancelling a scheme (the Heathrow Express railway is a case in point) because of a lack of Exchequer finance. More experience demonstrates that improving the service delivered to the level required by the Citizen's Charter leads directly to improved revenue with consequential benefits to the PSO.
I urgently ask my noble friend to draw the attention of his right honourable friend the Secretary of State for Transport to the matter and to ask him to look again at the whole financing of British Rail.
6.25 p.m.
Viscount Sidmouth: My Lords, I, too, feel that this debate is very timely. It is appropriate that it should take place at this time when the opening of the Channel tunnel is still about 18 months away. I should also like to make it clear that I am not concerned with the politics of this project which I certainly feel has bedevilled it from the start. On that aspect I would only say that, so far as concerns the direct rail link, I believe that I was the first Member of this House to point out that the scheme would never get off the ground satisfactorily without that link being in place.
I speak entirely as a one-time practising railwayman. I am most concerned about what will happen from 1993 onwards, given the situation that is inevitable as of now. The point is that the tunnel is a railway tunnel. That means that the availability and readiness of the railway infrastructure is of vital concern both to Eurotunnel and to British Rail. There is very widespread concern about what appears to be the rather laid-back attitude of BR. Indeed, there was some doubt about how long it thought it could keep going without the direct link. BR has certainly been saying from the start that it would be able to go to 1998—I believe that that was the date generally accepted. In my view, that is optimistic.
Unless British Rail makes better use of the remaining 18 months before the tunnel opens, there may be a humiliating debacle on the British side which would recall on a greater scale that of the advanced passenger train of unhappy memory. That fear is
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probably greatest among those who have been able to observe, as the job progresses, the great disparity between the railway facilities which will be available from day one at Calais as opposed to Folkestone.
From the start, British Rail's estimates of potential rail traffic, both passenger and freight, have been much lower than those of SNCF and Eurotunnel. I believe that in reality the project will probably prove to be one which should be measured not only by the share that it can be expected to attract of existing cross-Channel traffic, but also by the new traffic which will be generated by the facility itself—in fact, like the TGV has done in France. We know of course now that the direct rail link to London will not even have been started by the time the tunnel opens. It is much to be hoped that the problems of privatisation will not be permitted to distract the management from putting on a creditable show at the British end when the opening takes place.
By 1993 the substantial sums being spent on improving the two existing routes between London and Folkestone should have increased their comfort and capacity and—it is to be hoped—improved their reliability. But, from an operating point of view, it must be said that this part of Network SouthEast is already one of the most intensively used railway systems in the world. On to the existing suburban and commuter traffic will have to be superimposed a whole new timetable of relatively fast passenger trains—these are difficult to fit into a slower-moving network —and freight trains. But, if the problems are resolved, it is to be hoped that these will mostly run at night. No doubt those responsible for producing the working timetable will find sufficient paths on paper to accommodate all that traffic. But when mishaps occur, as they inevitably do even in the best regulated system, I have grave doubts that there will be sufficient reserve capacity to make a quick recovery.
The working of an intensive system such as that of Network SouthEast is complicated and delicately poised, even when everything runs strictly to schedule. To keep trains running to time, numerous interlocking rosters have to be adhered to—those for running staff, trains sets and locomotives. Even a minor mishap can lead quickly to delays and train cancellations. The experience of existing Network SouthEast commuters confirms that point. Cancellations are not always due to operating conditions (something on the track), but to staff shortages—the rosters to which I referred—and so forth. Most importantly, recovery, when things go off course, depends upon the availability, skill, initiative and motivation of staff of all grades. I shall not dilate on that point but I do not believe that British Rail can lay claim to achieving that.
The reports of delays, about which we have again heard, in the manufacture of passenger rolling stock, and other technical problems with the signalling and so on, are disturbing. Such snags are inevitable with any radical new design, and it is greatly to be deplored that the orders were not put into operation earlier and with greater urgency. As it is, I fear that when the stock is eventually delivered it will be brought hastily

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into service, untested, against a deadline, and without the problems having been identified and eliminated. That is what happened with the APT.
I turn to the prospects of freight traffic which many hope will help to rehabilitate BR as a freight carrier. Much needs to be done before 1993. Although the Channel tunnel traffic represents a great opportunity for BR, it will not come to it without effort. On the contrary, it will have to be fought for and won back from road, to which it has been lost over many years.
The transit times envisaged—overnight to Paris and Brussels; Stuttgart by the afternoon of day two; Birmingham to Vienna in 35 hours—will be competitive with road. Combined with a realistic rating policy, BR should win a worthwhile amount of that long-haul traffic. Again, numerous modifications to the infrastructure must be in place in time—the ability to convey nine foot containers is a vital point, and one about which I hope the Minister will reassure us—including freight depots for assembling train-load traffic. They are an essential feature of BR's plan for the assembling of trains, an aspect which seems to be moving slowly, as I understand it.
I hope that when he replies the Minister will have better news on those and other points which will be raised by other speakers.
6.33 p.m.
Lord Shackleton: My Lords, I shall make only a brief intervention as the arguments were fully deployed by my noble friend Lord Clinton-Davis. There was a slight suggestion from the noble Viscount, Lord Sidmouth, that politics should not come into this. If ever there were an issue that involved politics, in the widest way, it is this one. I hope that the project will not be damaged by it. I do not believe that I have heard anything to suggest that it will be.
It would be proper for me to declare an interest because nearly 20 years ago I was chairman of RTZ Development Enterprises which acted as the project manager for the Channel tunnel. At that time it was our view that the Channel tunnel should be built, but that it should be funded entirely on the public side. We did not believe that the money could be raised by private enterprise. It has been shown that it can, but I am not sure whether the Government's decision to start privatising BR is a helpful move at this time. I hope that the Government will think clearly and almost conduct an exercise about what would happen if we injected more public money into the project and relied less upon raising it on the market.
It is right that we should congratulate those who have worked so long on this project. Eurotunnel and its chairmen (Alastair Morton and André Bénard) are to be congratulated on the work that they have done, as should one or two of the chairmen who have been members of the House. The noble Lord, Lord Pennock, played his part at one time. A great deal of work is being done by Eurotunnel and BR, although there is some reason to doubt that BR's morale is tuned up at the moment to facing the challenge.
Some of the nonsenses with which BR has to put up, and some of the nonsenses it has created itself, have been damaging. One of the most extraordinary
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proposals is that of the frontier control people that no non-international train should stop at an international platform; such a platform must be for international trains only. I do not understand the reason for that. There is a suggestion that it is an anti-smuggling safeguard. I may have the wrong information, but I have been told that is the case and I should be interested to know the answer.
The Government need to improve communication with outside bodies. It is unsatisfactory at the moment and great concern has been expressed about it vis à vis BR. The debate is a useful one to have at this time. I hope that some of the difficult questions which have been asked will be answered. Clearer information is necessary. I hope that the Government will react to the questions asked by my noble friend and other noble Lords.
6.37 p.m.
Lord Cochrane of Cults: My Lords, I am grateful to the noble Lord, Lord Clinton-Davis, for introducing the subject. I am especially grateful to my noble friend Lord Geddes for giving us his insider's view of Southern Region, armed as he was with a wealth of statistics, facts and valuable experiences.
At the moment, BR has an identity problem. It is constantly portrayed in the media as blundering about and messing things up by its own incompetence—virtually a dinosaur capable of eating its own tail without noticing. Every time something goes wrong on BR—from time to time things go wrong in any business—the worse construction is put on it. We hear about the wrong kind of snow. I have to admit that when I read that in the newspapers I thought that if I were sitting in the hot seat I would be telephoning the Swiss railways about that problem. It turns out that the Swiss railways had a nasty attack of it themselves.
Similarly, there is the problem of leaves on the rails. The leaves clearly drop from the trees. The BR chairman has received a considerable amount of flak in his postbag from conservationists who protest when the habitat along the track is destroyed to reduce the number of leaves falling from the trees. A similar problem arises in Holland. They have a more drastic remedy: they spray the trees with a weed killer which I believe is a derivative of the dreaded Agent Orange. It kills the trees completely and presumably the people then forage for firewood.
Again, we have trains lost on track circuits. That is portrayed as a uniquely British problem. It is not. It happens on various railways in Europe and further afield, including the one which is often held up to us as the epitome of efficiency—SNCF. It, too, loses trains.
The noble Lord, Lord Clinton-Davis, spoke about the 465 trains not fitting. I am happy to say that this is not a surprise to British Rail and I do not suppose it was improved by the evening newspaper, the Standard, stating that an embarrassed British Rail spokesman said this and that. Was he really embarrassed? Did he have a red face? Was he stuttering or sweating or did the reporter make it up? I believe the latter. It was known from the original investment project that track realignment was

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required in these terms. It is a common experience —and those of us who use the Drain will have noticed that we are getting new trains—that a certain amount of tunnel reshaping has had to be carried out to accommodate new vehicles. It is an inevitable consequence, when a longer vehicle is used within an existing tunnel on curved track.
There again, there was a story in the papers deliberately placed to discredit British Rail, and the inference which is drawn from the fundamentals is wholly untrue. I hope that notice will be taken in appropriate quarters of how these stories get about.
Another point about the media is their total insularity. All these problems "only happen in Britain"—only a railway as incompetent as British Rail could possibly allow these things to happen. However, terrible things happen abroad. On French railways, for example, one reads of bandits prowling along the night trains or gassing, robbing and tying people up. We have none of that in Britain.
Let me point out in passing that people say that everything is wrong with British Rail. I hope that I am not unique in being positive when I say that whatever else happens on British Rail, the roof of the carriage never leaks in wet weather.
I shall not speak about the tunnel because it has been dealt with in considerable detail and with much more knowledge than I possess. However, I am concerned that the project put forward is too little and too late. It could be billed as "By the department that brought to you the M.25", which is now notorious for the under-provision of capacity and having to be altered at fearful expense.
I suspect that the experts, with the Treasury mandarins breathing down their necks, forgot the bridge and by-pass effect. I well remember that when the Forth Road Bridge was opened it was said that it would never pay its debts, even if it were filled with traffic from end to end, night and day. On the contrary, it is near to paying off its debts, although they are much larger than when it was originally envisaged. That concerns me.
There is a major short cut in the transport system of Europe and it looks very much as though the connections into the rail network on this side of the Channel will be entirely inadequate. That will soon be proved.
A great deal has been said by my noble friend Lord Geddes about the malign effects of the Treasury and Treasury rules. I noticed that on 1st July my noble friend the Minister remarked that:
"Many people in the Department of Transport spend all their working time consulting British Rail".—[Official Report, 1/7/91; col. 769.]
I believe that they could spend less time on these problems and let those who know about them and are responsible get on with them. In civil service terms, there is no decision easier to defend than the one we have not made.
I see that the Ryrie rules and effects have been mentioned, I thought that they had been shot dead. They do not make sense on any analysis of public sector finance and are merely a device to ensure that
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the Treasury maintains its traditional superiority over everything it can see. The rules have had a dire result on the operations of British Rail.
Yesterday I went on the London, Tilbury and Southend railway. A friend remarked, "I do hope you manage to come back". The trip was uneventful and cheap. The ride was bumpy, the equipment outdated and it was clear that the railway had been starved of cash. One can only say that it is manifestly wrong when signalling which was installed in 1935 at Fenchurch Street, with a 30-year design life, is only now being replaced, after howls of well-merited rage from the country and the passengers using that line. Work has not yet started, but at least it will. In 1935 I was nine years old.
British Rail should be given commercial freedom and allowed to get on with matters. Commercial freedom gives a great sense of purpose to an organisation. There is nothing worse than having people breathing down one's neck in a commercial organisation and interfering. It means that so much management time is taken up that it cannot be used productively in furthering the purpose of the business. We have the National Freight Corporation and British Airways as shining examples of the effects of freedom from government control. I urge that any system of privatisation should start by making British Rail into a plc, even if it means that initially the Government hold 100 per cent. of the shares. British Rail is doing its best under extremely difficult circumstances, with many of the difficulties not of its own making. We should do our best to support it in its efforts for the future.
6.45 p.m.
Baroness Mallalieu: My Lords, I speak in this debate as a mere passenger. The hours of the House fortunately mean that most of your Lordships are spared the experience of regular journeys into London on Network SouthEast from areas such as Kent and Essex. But those of us who have the misfortune on occasions to make such journeys at the rush hour can tell the House that conditions for travellers on those routes are in reality a public scandal. Trains are cancelled without warning, for reasons which range from the non-appearance of the guard to leaves on the line—mentioned by the noble Lord, Lord Cochrane —breakdowns, or with no reason at all being given.
To get a seat on a train from some stations is an event which makes it a red letter day. From other stations it is simply unheard of. Trains come to a standstill, often for lengthy periods, on a journey for reasons which are never explained. During these unscheduled stops it is not possible to admire the scenery. In the event that the windows are clean enough to look through—which is unusual —the breath from the press of total strangers, against whom one is intimately wedged in a standing position, raises the temperature and humidity to a level which mists up the windows and lowers the oxygen to a point where one marvels that human life can be sustained. In any case, anyone who fainted could not fall to the ground. For that travellers pay more than commuters in any other European capital.

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Travel on Network SouthEast is expensive, sordid, depressing and dehumanising, and for most people there is no alternative. The graffiti artist who has decorated the wall which faces London-bound commuters coming from the south west says it all with his greeting, "Good morning—Lemmings"! That state of affairs should never have been allowed to develop.
Network South East passengers have been sadly let down by the Government. Passengers do not care about the ideology of running a railway or about who owns it. What they do care about is that they should receive a good service. I repeat that they have been let down.
It has been suggested by some that the Government's policy has been deliberately to starve the railways of investment and to run them down in order to make them ripe for future privatisation. However, I doubt that. If it were so, it would be unique among the policies of the present Government in being wholly successful.
The causes lie in the lack of adequate funding for narrow ideological reasons, the insistence upon profit rather than service to passengers, inadequate and inefficient deployment of the available resources, a lack of vision, foresight or proper co-ordinated forward planning and plain ineptitude on the part of those who conduct the Government's transport policy.
Passengers want, and are entitled to receive, trains which leave and arrive on time. That means proper maintenance, proper back-up for breakdowns, proper provision for bad weather and adequate staff to cover absence. They are entitled to trains which run when passengers need to use them and which are co-ordinated with other forms of transport. They are surely entitled to a place to sit; which means enough trains, especially at rush hour, and more carriages and longer platforms, if necessary, to accommodate them. Passengers are entitled to information, to be told the truth swiftly so that alternative arrangements can be made or messages sent. They are entitled to reasonable comfort, with heating in cold weather which is turned off at the height of summer, and some degree of cleanliness.
Passengers are entitled to safety for themselves and their belongings, on trains, in stations and in station car parks. That means adequate staff and surveillance, especially at night. Where I live there is now no station car park where a car can be left with confidence that it will not have been broken into by the morning. Yet last week railway car park charges rose by 28 per cent. —six times the rate of inflation. Passengers are entitled to ask for all that and to expect it, and at a fair price. Yet the noble Lord, Lord Cochrane, suggested that we should be grateful because the trains do not leak and there are no bandits.
Those are not unreasonable requirements. What is more, European passengers have them. In the past year I have had the good fortune to travel by rail in Switzerland and in Italy. I had forgotten how pleasant and efficient rail travel could be on clean, modern
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rolling stock which runs on time. The railway even went so far as to provide a play coach for children on a long journey.
This Government's solution to overcrowding seems to have been to try to drive people off the trains by making them uncomfortable and by overpricing the service. The result is that the roads in this capital are now so overcrowded that London traffic moves at the same speed as the horse and cart 100 years ago; this after 12 years of Conservative transport policies. It is not even economic sense.
By denying adequate funding to the railway system the cost to industry of road congestion may be as much as £15 billion a year. The mismanagement continues in ways which the noble Lord, Lord Clinton-Davis, described to the House in his opening speech. The much vaunted Network 465 trains, the first of which has been delivered for testing, have been found to be not too long but too wide to go through the tunnels on the routes for which they were ordered.
Transport in the South East is crucial to the economic regeneration of Britain. The single market and the opening of the Channel tunnel in 1993 mean that the Channel tunnel could take a substantial proportion of the United Kingdom's European trade. To do so it desperately needs good rail connections in this country, not just with London. While the Continent enjoys an expanding network of efficient, high speed trains we are being left behind with a transport system which is rapidly becoming incapable of linking fully with that of Europe, to the detriment of our passengers, our industry and our future.
Unless we have a government in the next few months which is committed to a new railway revolution aimed at providing Britain with a high speed railway network co-ordinated with that of Europe—a government which takes a view of investment not over five years to the next election but over 25 to the next generation—the railways of this country (after all, we invented the railway) which in the past have been our pride will, like Network SouthEast, be our shame.
6.53 p.m.
Lord Crook: My Lords, like the noble Baroness, Lady Mallalieu, I am a customer of Network SouthEast. I live in Folkestone and travel by rail on the days when I come to the House. Fortunately the times of day at which the House sits makes it much easier to travel than it is for the commuter who does a normal day's work. Therefore I do not suffer from any of the problems of claustrophobic trains which the noble Baroness described so vividly.
Perhaps those of us who travel on the line from Folkestone are luckier than those in northern Kent who are affected more by those problems than those using other parts of the system. However, we also have our complaints. The railway is abominably shabby. A great many foreigners get on trains at Folkestone and I feel ashamed that we have to show them dirty trains. There was some excuse last year when there was no cleaning water available in the South East because of low rainfall. There is plenty of water now but the outsides of the trains are still as filthy as ever.

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The quality of the passengers also seems to leave much to be desired. Even when travelling in a first-class compartment one sees people throwing things on the floor. I am sure that they would not do that in their own homes; why do they have to do it on a train? I cannot understand that.
We have been promised that there will be improvements to the railways in order to carry traffic and freight from the Channel tunnel to London and beyond. Undoubtedly, work is going on. One can see evidence of it in new tracks, new power equipment, and so on. Like my noble friend Lord Sidmouth and the noble Lord, Lord Cochrane, I cannot see that we shall find a great improvement in the service.
It is one of the miracles of life that the complicated network in the south-east of London ever works at all. I find it baffling that anyone could have produced such a layout. It was the result of competitive free enterprise and the whole thing got completely out of hand and then had to be rationalised into what was then the Southern Railway. The result is that there is far too much traffic and far too many interconnections between competing services, and a delay on one affects many different routes using the same system. It must be a nightmare to operate.
When all is said and done, we shall have our improved railway which will carry trains from the Channel tunnel. They will not be the French TGVs. The illusion seems to have been created that the TGV will run through the tunnel and carry on to London. That will not happen. Immediately beyond the Cheriton end of the Channel tunnel terminus is the Saltwood tunnel. If one tried to run a TGV train through that, it would get stuck. British Rail's tunnels and bridges are far too small to accommodate continental railway trains.
What do we have instead, my Lords? Instead of having a system of the train à grande vitesse we shall have British Rail's answer, the petit train à moyenne vitesse—small, pseudo-TGVs which will run between various points in the UK and into Europe. What worries me about that is the question of how long the Europeans will tolerate our cluttering their railways with special mini-trains to suit the idiosyncrasies of our railways while we appear to make little effort to improve the situation.
When services begin to pass through the Channel tunnel the citizens of Kent, and in particular the eastern part of Kent, will not be impressed in the slightest. If I, living in Folkestone, want to go by train to Paris, I shall have to go to Waterloo first, which is a journey of l½ hours, in order to get on a train to go all the way back and carry on through the tunnel. It is to be hoped that, for the benefit of rail travellers in Kent, it will be possible to go to Folkestone Central Station and take a bus service which will take them through the tunnel in order to pick up the railway in Calais. That is the only way to do it.
The proposal for Ashford international station has vanished. Heaven knows whether it will ever be built. There is no suggestion of any railway station in the
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Channel tunnel terminal area. Everything has to run from London, as my noble friend Lord Sidmouth pointed out.
It is said that that is what Customs and Excise require. I wonder whether that is realistic. Most railway services within Europe cross borders without any fuss and bother. I frequently drive my car around Europe. The rule for going through Customs is that you do not stop to annoy the Customs man. In this country, Customs are rightly praised for the amount of drugs that they intercept at the Channel ports. We all approve of that, but I should like to know how much of it is found in private cars or on foot passengers. I must admit that even in the United Kingdom the Channel ports' control of those cars and passengers appears to be a little perfunctory. If you go through the green channel, you are never challenged.
Presumably it is not only British Customs which has success in intercepting drugs. I presume that the other authorities in the Common Market also have their successes in intercepting those horrible commodities. How do they succeed without a Maginot line to defend? Perhaps we might learn from them and find that we do not need to have that rigid port of entry approach as regards getting on the railway which will do nothing more than hold up everyone and cause a great deal of frustration and expense in maintaining the system.
The high-speed rail link should be only the precursor to a connection for freight and passengers with the North of England. It does not belong to London. It is not about London at all. There are too many railway lines that end in London. You have to get out, cross London and pick up another train. We must see high-speed rail links going way up north, including to Scotland. Why should the high-speed link go into London? It would not be a bad idea to make it go round London for a change and then carry it on up to the North. There is always a call for private enterprise to invest in projects. Let British Rail provide the railway to the east of London through Stratford and carrying on up north. If London just happens to want to be involved in the high-speed link to the Continent, let London provide the finance for the little bit between the centre of London and Stratford. Perhaps that might bring a little more cash into the system and allow more of the high-speed link to go further north.
There must be some thought about the matter. It is said that in this country we do not have any long-term thoughts on railways. I believe that we do.
7.3 p.m.
Lord Howie of Troon: My Lords, I was extremely impressed by the opening speech of my noble friend Lord Clinton-Davis on the Front Bench. He said nearly all that needs to be said in the debate and I agree with him almost entirely. I dissent from him on only one small matter; namely, that I believe that the chosen eastern route for the fast rail link is a mistake.
Noble Lords will recall that in his Statement on 14th October last the Secretary of State for Transport said at col. 24 of Commons Hansard that British Rail had been asked to study the various alternative routes

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"with the aim of maximising the benefits to international passengers and commuters, concentrating on the options for the route from the North downs to Waterloo and King's Cross".
We should note the phrase "maximising the benefits" to both international passengers and commuters. That was British Rail's remit and on the strength of that remit BR established its preferred route.
The route that was chosen—the modified Ove Arup route—precisely fails to meet the conditions that the Secretary of State originally laid down. First, it will be much more expensive and that will result in higher fares which will scarcely maximise the benefits. Secondly, it will be much less advantageous for commuters from Kent because it starts in the wrong part of Kent and ends in the wrong part of London. Indeed, it hardly improves the commuter situation at all, so it also fails in that respect. Thirdly—we must remember that the Minister mentioned both Waterloo and King's Cross—trains for Waterloo from the Continent will be obliged to leave the high-speed link somewhere in the vicinity of the Medway and come in at a much slower speed. As a consequence, it will take longer to travel from Paris to Waterloo than it will take to travel from Paris to King's Cross, assuming that the Stratford-King's Cross link is ever built. A question mark must hang over that.
I believe that there were two reasons for that choice. The first was to put off the line for as long as possible. In his October Statement the Secretary of State said that, in order to bring the Ove Arup line up to the standard of the BR preferred route, there would have to be another delay of nine months resulting from feasibility studies and further design studies. One could probably swallow nine months quite well, but at a meeting in this building just before Christmas—a meeting arranged by my noble friend Lord Taylor of Blackburn —Sir Robert Reid said that it would probably take 18 months, so the start date for the Channel link recedes further every time we think about it.
The other reason—it is not a new one—for choosing the eastern route was to give some credence to the new London-on-Thames which the Environment Secretary appears to want. I do not think that he should want it. I do not think that he should propose extensive developments on the east side of London. Developing the South East is a planning mistake. I see that my noble friend Lord Sefton of Garston agrees with me; at any rate, he shakes his head up and down. I am glad to see that he is here because I knew that he would agree with me. If this country needs any more extensive development of the kind that the Environment Secretary wants, it should not be in East London: it should be in the Midlands or even further north, possibly in Merseyside or even further north than that. East London is the wrong place. In so far as the international route is intended to help Mr. Heseltine's grandiose scheme, it is a grave error. The Government are mistaken here and should think again.
Before I turn to the last of my remarks, perhaps I may interpose a brief comment regarding the remarks of my noble friend Lady Mallalieu. We all have horror stories about railways, but I do not intend to go into
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them just now. She was a little unkind to the noble Lord, Lord Cochrane of Cults, on the matter of the new rolling stock. She said that the train is too wide, but we are really talking about the width of an envelope which is a geometric matter relating to what happens to a point at the corner of a train as it goes round a curve. It is a matter about which engineers often worry and are often wrong. On the whole, the noble Lord, Lord Cochrane, is nearer the truth than my noble friend on this occasion, but that is a minor matter.
Turning to privatisation, I do not believe that there is a case to be made for privatisation, with the exception of one point, which is a serious one: that the Government cannot be trusted on transport matters. Nothing in their record suggests that the Government should continue to have any responsibility at all for transport matters and especially railway matters. I do not regard that as an argument in favour of privatisation, but it tempts me a little.
I want to mention one aspect of privatisation. It has been suggested that there should be a track authority which would lease its track to a body of private operators. That notion goes right back to the beginning of the railways. That was how it was done when the Stockton and Darlington railway was built in 1825. Going even further back, that is how it was done when the Kilmarnock and Troon railway was built in 1812. But in 1830, by the time the Manchester and Liverpool line was built, it was realised that the way to run the railways was as it is done now.
I have run out of time, but before I sit down I want to say that what is needed is some kind of strategy for transport. I endorse the proposal made by my noble friend Lord Clinton-Davis last October when he asked for a transport commission. I disagreed with him then because I had misunderstood his proposal. He has since explained it to me and I believe that he is absolutely right. We need some kind of commission which will organise transport so that we think of the totality—rail, road, canals and air transport—and try to knock it into some kind of sense.
7.11 p.m.
Lord Mountevans: My Lords, I declare both an interest and my gratitude to the noble Lord, Lord Clinton-Davis, for giving us the opportunity to have this debate. As I listened to the debate unfold, I sometimes wondered whether I patronised the same railway or indeed the same Network SouthEast as those discussed by noble Lords on both sides of the House.
I find the task that Network SouthEast faces and its way of coping with it not unimpressive. Eight thousand trains a day is the same number of trains as the CAA has aircraft flying throughout the length and breadth of the United Kingdom. Just under 500,000 passengers are brought into the London termini in the morning peak. Ninety per cent. of trains reach the government-set punctuality target. I am lucky; I live on a route which has recently had investment. The trains are clean, and we should remind ourselves that more often than not when a train is filthy it is not

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British Rail's fault but the great British public's fault that it is filthy. British Rail cannot afford to employ people to scrub-up trains.
My trains are comfortable. As I said, investment has been made. On my route we have had two generations of investment in not much more than 25 years. Not only have we had the new trains, but there has been track upgrading and resignalling and thus higher speeds. There are shorter journey times. It is a more attractive railway and there is greater traffic. That is what we all love to see and should like to see it throughout the network.
But I realise that there are problems on the network. The noble Baroness, Lady Mallalieu, left the House in no doubt about that point, drawing on her own experience, as I have done on mine. But I wonder whether increased capital investment is the solution to peak hour travel in particular. We are told that trains are always packed, but in fact network's peak is about 20 hours in a seven-day week; it is 148 hours off-peak. The load factor, or the amount of the network product that is taken up, is only some 33 per cent. So 67 per cent. of its product—which, after all, is perishable since once a train seat has been run from London to Kent it has gone—is not taken up.
How can we address that problem? My own feeling is that the fares mechanism is not the answer. I have thought hard about that matter. In response to the monopolies commission's promptings, British Rail thought to bring back the old, pre-war, early morning workman's return, which was a deeply discounted season ticket. But that would not change the habits of the Medway travelling public. We know that happened elsewhere. For example, not so many years ago the Swedes went down the route of halving the fares. They assumed that revenue would more than double; but it did not work out like that. It was very fashionable to hope that it would do so in this country.
In terms of investment for the network to solve its problems, first of all staff training is needed. We must pay tribute to what is said in Future Rail on staff training, and the intention to achieve quality. We also need total route modernisation. That is the only way forward. The London-Tilbury and Southend route needs complete modernisation. It is not just the signalling and the track; rolling stock is also needed.
If I were to be allowed a small piece of investment, which I believe would be relatively cost-effective and inexpensive, I would suggest that British Rail and particularly Network spend more on informing us of what is going wrong—communications equipment. There are many occasions when one's train is late because of circumstances which are within British Rail's control: signal failure, traction failure and staff sickness, which is partially within British Rail's control. However, in my recent experience of my own route I have become aware of a number of incidents which were totally outside British Rail's control: the real ale fan who overconsumed and fell out of a train, when the police closed the railway for three hours; the gas leak at a major level crossing at Southampton, and an electric train cannot run past a gas leak; three suicides; people who crash through barriers at level
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crossings. Those are matters which are outside British Rail's control. However, it seems to me essential that Network should tell us not only what has happened —because there is a degree of sympathy for British Rail when it is faced with such problems—but also what the effects will be on our planned journeys.
I also hope for two other things in terms of sorting out the problems of Network and indeed British Rail. I welcome the Government's three-year commitment to investment but the 10-year span looked for in Future Rail would be even more attractive. I fear that the 25 year span quoted by the noble Baroness, Lady Mallalieu, is too great. I would settle for 10 years at the outset and perhaps she would join me in that.
Secondly, one must come back to less interference. There was a period last year of only two weeks when Sir Bob Reid found first that he had obtained increased subsidy and EFL which meant good news and increased investment, and then that his favourite route to the Channel tunnel was vetoed. Also vetoed were his fare increases, which he believed—having looked at the market pricing—the market would stand. That is not the way ahead toward a satisfactory railway. Management must be allowed to manage.
I turn briefly to the Channel tunnel. I share the general enthusiasm for it. I am aware that there are people who will never go near it. I have friends—even one in this House—who will not ride on the Underground. I hope that the investment that British Rail already has in train will enable it to cope until the capacity runs out in 1999, always assuming that the capacity does run out. None of us at this time can be totally certain whether Eurotunnel will simply redistribute existing traffic or genuinely create traffic. If it creates traffic, as has been said by many people on all sides of the House, time becomes of the essence. The route must be approved as quickly as possible. The planning inquiry powers must be lined up as quickly as possible. Last but not least, the funding must be lined up.
That is my real anxiety, because if the private sector was reluctant or unable to fund British Rail's original proposal, I wonder how keen it will be to fund a less-attractive proposal which will be very much more expensive.
7.19 p.m.
Lord Thomson of Monifieth: My Lords, like every noble Lord who has spoken, I join in expressing thanks to the noble Lord, Lord Clinton-Davis, for having initiated this timely debate. Three months have passed since the Government, after leading British Rail, the Kent commuters and the country up the cul-de-sac of a South-East London route, finally plumped for the Ove Arup route through the East Thames corridor. While a decision, however delayed, was welcome, as has been made clear in this debate a large number of uncertainties remain. For my money, the best comment on the present situation remains that of the Conservative leader of the Kent County Council, Mr. Tony Hart. He said, "It's a complete shambles, and as to who is in charge of it nobody quite knows". It is to be hoped that this debate may clear up some of the confusion.

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A central question that has been raised is the Government's attitude towards a freight policy in relation to the Channel tunnel and the railway links. With the increase in road traffic already strangling Kent—and it will inexorably continue to increase as the years pass—it seems absurd to plan a major new railway without allowing for freight. However, the Government discarded the only plan—that of the Rail Europe Consortium—which included a clear freight commitment. Its advocates feel rather bitterly that its proposal was never fully and fairly investigated. It also feels, and I hope that it is right, that it still has a contribution to make to the final decisions on the new route.
The Ove Arup plan was a passenger-only proposal. I believe that the House would like to know whether it could now be adapted for freight. That would require shallower gradients, and more gentle curves and would include perhaps sections of four tracks or loops. All those factors would alter its impact on the environment and on the number of homes affected. It might even mean deviations on the Ove Arup route. Those whose homes might face blight have a right to know as clearly and as quickly as possible where they stand.
The noble Lord, Lord Shackleton, referred briefly to the strange story of Ashford international station. It was originally seen as a central element of the opening of the tunnel in June 1993. Eighteen months away no start has been made. In December the Department of Transport finally authorised £18 million against a rather grandiose British Rail project costing over £180 million.
As has been said during the debate, both Eurotunnel and Ashford Borough Council have proposed practical interim schemes which could be ready for June 1993. They involve a temporary international platform linked to the local station at Ashford and within walking distance of the existing platforms. However, apparently British Rail and the Government want something completely separate—a bus journey away with an international platform at which not only will no local trains be allowed to stop and no local passengers get on, but no local train will be allowed to pass that international platform. Apparently, that is in case some great drug drama might be enacted by someone throwing a sack of drugs on to a passing local train. We all consider the importance of dealing adequately with the control of drugs, but is that not getting the matter out of perspective? On the Continent, as one noble Lord mentioned, they do not insulate their international rail platforms in that way. It seems that having eliminated the Channel by digging a tunnel underneath it, a new frontier will be created in the heart of the little Kent market town of Ashford—and that is in 1992 when all the internal frontiers of the European Community are supposed to be crumbling and coming down.
It is all rather sad and frustrating. The Channel tunnel and a new national railway infrastructure associated with it should be the best news for British regions since the railway revolution in the early part of the 19th century. It is one of those rare occasions when the interests of the congested South East coincide with
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those of Scotland, the North of England, the North West and the remainder of the United Kingdom. However, to achieve that requires the right mix of private and public funding. That is one of the arts of modern government—and the present administration is not very good at it. They order such matters better in France and in most other continental countries.
The noble Lord, Lord Geddes, gave some interesting statistics on the contrast between the underpinning from public funding that exists in continental countries compared with this country. I was glad that the noble Lord, Lord Cochrane of Cults, seemed to appoint himself the president of a society for the prevention of cruelty to British Rail. In a lighthearted way he carried me with him.
Eurotunnel has proposed a Department of Transport team led by a Minister to bring together the various interests on which success depends. It seems an almost ideal role for the present Secretary of State for the Environment. It seems a sensible and constructive suggestion. It would answer the Kent County Council's question with which I began as to where the responsibility really lies and who takes the decisions. The Channel tunnel will be completed in 7½ years. That is a very considerable achievement of private enterprises in all the circumstances, as the noble Lord, Lord Shackleton, said. But it would be a tragedy—and an unnecessary tragedy—if we were now to continue to follow the Government's present timetable and to take from 1988 to 2005—no fewer than 17 years—to provide the high speed rail link which is an essential part of making the most of the historic development of the Channel tunnel.
7.27 p.m.
Lord Underhill: My Lords, this has been an interesting debate. The Opposition are always prepared to discuss transport matters, first, because —as Mr. John Prescott emphasised at a press conference yesterday—we have a first class policy on all aspects of transport; and, secondly, because transport is so vital to the nation. It is vital for the economic well being of the country, because of the congested state not only of the South East but also of other parts of the country and because of the great increase in car ownership that will take place by the end of the decade. Those problems require adequate consideration.
I was pleased that my noble friend Lady Mallalieu drew attention to the fact that Network SouthEast does not deal only with counties south of London. It covers parts of the railway lines north of London including my county of Essex. The noble Lord, Lord Cochrane, referred to the position of the London, Tilbury and Southend Line. Sir Bob Reid, British Rail chairman, was reported in yesterday's Guardian as saying,
"London, Tilbury, Southend has signalling installed in 1934 with a 30-year life"—
it is now approaching its 60-year life—
"the rolling stock is close to 40 years old. It is not surprising it does not perform".
From what noble Lords have said there is obviously strong criticism of aspects of the operations of

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Network SouthEast. We can sympathise with Network SouthEast because it has been underfunded for years. I shall return to that issue before I conclude.
Network SouthEast has certain problems but I know that it has plans for development. Eighteen months ago I attended a presentation by Network SouthEast of the developments that it intended to undertake. Many have not been carried through because of lack of adequate funding. The Crossrail Bill was deposited in Parliament at the end of November. I hope that it achieves a speedy and efficient passage through another place and in your Lordships' House. It will be of great benefit to have that crossrail link from Buckingham and Reading through to Brentwood.
The noble Lord, Lord Geddes, referred to the success of the Thameslink route. Can the Minister say why on 6th December, in reply to a Question asked by Mrs. Joan Ruddock in the other place, Mr. Roger Freeman said that the scheme had some attractive features but that the Government had concluded that the Bill was premature? Mrs. Ruddock had asked when the Bill would be deposited for further expansion of the Thameslink route.
The Government have made clear time and again that users will have to meet the cost of developments. However, the Government have set Network SouthEast a target to phase out the public service operation by March 1993. In view of the underfunding that exists at present that will be a complete tragedy for people living in the South East, in particular the vast number of commuters who rely on Network SouthEast in order to travel to work in central London.
In addition there is the threatened phasing out of the PSO. Fares have been increased and, as was said by my noble friend Lady Mallalieu, car parking charges have also gone up. I recognise that throwing money at a problem does not solve it. One must use money effectively. Sir Bob Reid said in a lecture that if one wants a modern, reliable railway one must be prepared to spend money on it. He said that he did not wish to be drawn on the question of privatisation. I shall make no comments about privatisation until we see the Government's plans. They cannot make up their mind and therefore we cannot be expected to do so in this debate. Sir Bob warned that inadequate investment posed a threat both to safety and to the quality of the services. He said that a reliable and modern rail network would require an investment programme of £1 billion per year during the current decade. That could easily be achieved if the Government realised what must be done.
Reference has been made to the confusion about the Channel tunnel. I recall that when two years ago Mr. John Prescott urged the Government to hold a thorough inquiry into the development of the Channel tunnel and the rail link he was scoffed at. The tragedy is that today we are in such a mess. We have moved from one thing to another. There is also the lack of public investment in the rail link. Such an inquiry would have been extremely valuable.
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On 14th October last year the noble Lord, Lord Brabazon, said that,
"we continue to be prepared to consider subsidy for any non-user benefits such as the relief of road congestion arising from the use of the Channel Tunnel rail link by commuter services".—[Official Report, 14/10/91; col. 962.]
I should be grateful if the Minister will elaborate on that statement and give examples of what the Government regard as being non-user benefits. Surely, the relief of congestion and dealing adequately with environmental problems will fall under non-user benefits.
Kent County Council has taken a bold line throughout on what the Channel tunnel should provide for the nation. It has said that there is a need to concentrate on managing the ever-widening gap between the time when the tunnel opens and when the rail link begins to operate. I do not believe that anyone can deny that statement. I live close to Stratford but I shall not argue about whether we need a Stratford route. The fact is that a decision has now been taken and we must have a firm plan and get on with the job. The points made by Kent County Council are most important.
In a previous debate on transport my noble friend Lord Taylor of Gryfe emphasised that 73 per cent. of the passengers who will come into the UK after 1993 will go to destinations beyond London. It would be a tragedy if the privatisation of British Rail led to cutting out a number of routes, in particular those north of Glasgow. We must ensure that the benefits of the Channel tunnel reach all regions and we must maximise the environmental benefits. Unless that is done we shall add to economic congestion in the South East to such an extent that life will become completely unbearable. We must ensure that the benefits of the Channel tunnel affect not only the commuters but will be spread throughout the country.
Reference has been made to Ashford. I recall speaking in this House on the British Rail (No. 3) Bill. I recall the special report published by your Lordships' Select Committee on the Bill. It was emphasised that there would be an international station at Ashford. That influenced many noble Lords in the remarks that they made. On 4th July Mr. Roger Freeman emphasised that the Government would honour their commitments. On 24th July the noble Lord, Lord Brabazon, said that the Government remained committed to the provision of that station. On 14th October the noble Lord, Lord Brabazon, observed that the Ashford station would not be affected by the Statement made by the Secretary of State on the Channel tunnel rail link.
On 3rd December, in a Written Answer, the Secretary of State made it clear that the external finance would be reduced and the expectation of an excellent international station at Ashford would not be realised. Some £18 million had been allocated for an international station. On 19th December, in a Written Answer, Mr. Roger Freeman made clear that British Rail had been asked to examine the feasibility of his idea for a cheaper option to the international station. It was asked to submit new proposals.
We now have those proposals for a cheaper station at Ashford. I suppose that one might agree with the

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Kent County Council, the East Sussex County Council and Eurotunnel that they accept the proposals as a stop-gap measure. However, the Government must decide quickly whether they will honour their commitment to have at least a stop-gap international station at Ashford. As the noble Lord, Lord Thomson, made clear, the statement that there will be a short distance between the stop-gap international station and the Network SouthEast station is pure nonsense. They must be close to each other. People must not be expected to take a bus ride from one to the other.
Reference has been made to freight. I know that most freight will still be carried by road. However, there will be a great benefit to this country if the amount of freight carried quickly through the tunnel from this country to Europe can be increased.
We have figures of the number of lorry loads saved as a result of the conveyance by rail of many of the construction items for the tunnel. I believe that a firm policy is required as regards freight. A firm policy is required also from the Government on the provision of additional finance bearing in mind—and I agree with noble Lords opposite—that British Rail should have more freedom to go into the open market to raise the required loans. That must be done if we want further investment. Unless we have further investments, the developments which we need for British Rail to take part in the Channel tunnel link will not be possible.
7.42 p.m.
Lord Brabazon of Tara: My Lords, like the noble Lord, Lord Underhill, I am on behalf of the Government happy to discuss the Government's transport policies. Therefore, I am grateful to the noble Lord, Lord Clinton-Davis, for having tabled this Motion for debate this afternoon. I should have preferred this to be the three hour debate and I wish that I had more time for my winding up speech because I fear that, while I shall try to answer all the points raised, because of the short time available I may have to write to several of your Lordships.
I should like to make three general points in response to the issues raised in the debate. First, as regards the Channel tunnel, the title of the debate refers to the problems for British Rail caused by the Channel tunnel. I believe that one should be more positive than that. The tunnel is a huge new opportunity for British Rail, for road hauliers and for businesses throughout the country. British Rail is taking up the challenge of providing capacity to exploit those opportunities while at the same time meeting the needs of its existing passengers. A massive investment programme is in hand to that end.
British Rail is planning to spend over £1.7 billion on rolling stock and infrastructure for Channel tunnel services. That is almost three times that put into the recently completed electrification of the East Coast line.
The £1.7 billion includes infrastructure such as the new international terminal at Waterloo which, with its spectacular roof, will form an impressive gateway to the United Kingdom. Construction is proceeding to
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time and on budget. BR's investments also include a major programme of route works between London and the Channel tunnel. That is well under way. Lines are being upgraded and resignalled and power supplies strengthened. That will improve running speeds, reliability and flexibility for both international and domestic services thereby ensuring that existing NSE services are not disadvantaged.
I should remind noble Lords that BR gave an assurance to Parliament during the passage of the Channel Tunnel Bill that existing services would not be curtailed. It stands by that assurance. In fact it believes that the works in hand will positively benefit Network SouthEast commuters. I am pleased to say that those infrastructure works are also proceeding to time and budget.
Many noble Lords, and in particular the noble Lord, Lord Clinton-Davis, referred to rolling stock. Thirty one intercapital trains are on order and the railways are pressing the manufacturers for the earliest possible delivery date. Noble Lords will be as disappointed as I am that there will be a delay of a few months before the start of the services. However, I stress that that is the result of technical difficulties encountered by the manufacturers and is not the result of delay by the railways or, indeed, by the Government.
British Rail and its partners—the French and Belgian railways—are pressing the manufacturers for the earliest possible delivery date. My right honourable friend the Secretary of State has also impressed that upon GEC-Alsthom. The trains will be fully tested before going into service and there is no question of the testing time being compressed. I believe that the noble Viscount, Lord Sidmouth, referred to that point.
I can tell the noble Lord, Lord Crook, that the intercapital trains being purchased by BR and its partners will cope with all the rail networks used. They will be slightly narrower than the TGVs in France with a contoured side to cope with the UK gauge. However, those trains are not unique simply because of the UK gauge but also because of the differing power supplies in the three countries and because of the stringent safety requirements of the Channel tunnel.
In addition, seven trains are on order to provide through services from beyond London. They should be able to start service in early 1995. In the meantime, some InterCity services will run to Waterloo to provide an easy connection with international services. Negotiations with the continental railways on an order for night trains are progressing and BR still plans to commence those services in 1994.
British Rail has also ordered 37 freight locomotives and we expect to receive submissions for investment approval for the necessary wagons shortly. I can tell the noble Lord, Lord Clinton-Davis, that BR plans to run freight services from the opening of the Channel tunnel. It expects to have sufficient class 92 freight locomotives to start running as soon as it opens. Conventional wagons which can already be used for tunnel services are available and the railways have been refining their proposals for freight to identify the

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number and type of new wagons needed. BR is expected to request approval shortly to invest in intermodal and automotive wagons.
I stress to noble Lords that all rolling stock is being purchased jointly by the three partner railways. As my noble friend Lord Geddes said, all nine freight terminals have been identified and work to prepare them for tunnel traffic is now under way.
A number of noble Lords—notably the noble Lord, Lord Shackleton—suggested that domestic trains could not stop at international stations. That is not true. North of London through trains will stop at existing domestic platforms. However, there is a security issue to ensure that international passengers pass through the necessary controls and that uncleared passengers do not board the trains. Methods of clearance are still being considered with British Rail—a point raised by the noble Lord, Lord Thomson.
I believe that the noble Lord, Lord Crook, was being rather unfair about the operations of Her Majesty's Customs and Excise. Negotiations are continuing to ensure that controls are efficient and not intrusive, as I outlined at Question Time today. They will be much easier than we are used to following the completion of the internal market.
Looking to the longer term, both British Rail and the Government recognise that additional track and terminal capacity will ultimately be needed. Having weighed all the considerations the Government have selected King's Cross as the second terminal and have announced their preference for the easterly route via Stratford for the new link.
I say to the noble Lord, Lord Clinton-Davis, that the Government are not divided on that issue. I do not know where he got that idea from. It is certainly not true. Indeed, that route is supported by most people and certainly, as the noble Lord pointed out, it is supported by the Labour Party; though I note not by the noble Lord, Lord Howie of Troon, who has on a previous occasion expressed his preference for the former southern route originally proposed by British Rail. Some months further work will be needed before public consultations can be held and the route safeguarded. It will then be for the private sector to take forward the project.
Some anxiety has been expressed by noble Lords today about the progress of that link. We must be clear that the new line is not essential for British Rail to offer fast, attractive and competitive international passenger services. It would be difficult to justify the billions of pounds which the new line will cost and the impact on Kent and London simply on the basis of a half hour time saving. The new line is needed only when the capacity of the existing network becomes fully utilised. That should not be until we are into the first decade of the next century. I believe that it is to the credit of the Government and British Rail that planning of the new line was started sufficiently early to allow proper time to develop the best possible route and still have the line ready when it is needed.
I am well aware that noble Lords would like to know quickly where the rail link will run. However, it
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is worth remembering that the new line will be used for perhaps 100 years or more and it is therefore worth spending a little time now, perhaps a few months, deciding precisely where it should go and what form it should take to ensure that the best possible solution is found. So far the preferred route corridor, based on Ove Arup's proposals, has been identified. British Rail, in close consultation with the Government, is undertaking detailed engineering design work to refine the route. The parameters for that work are currently being defined and will include such issues as whether the new line should take freight. That was a point raised by a number of noble Lords.
I can say briefly to the noble Lord, Lord Underhill, that congestion relief is a non-user benefit. Quantification and identification developments for subsidy are not possible until further studies are completed. However, I would point out to the noble Lord that both Crossrail and the Jubilee Line extension are only going ahead because the Government are prepared to subsidise projects with road decongestion and regeneration benefits. I believe that proves our point on that.
However, I cannot agree with the noble Lord, Lord Howie, that the new line will not benefit commuters. The Channel tunnel rail link will carry express commuter services which will not only produce substantial time savings of up to 30 minutes but will offer much more choice of destination in London. East Kent, the Medway towns and possibly Essex will benefit. The optimum provision of stations and connections with the existing network is an important part of the current studies to refine the route. The noble Lord, Lord Clinton-Davis, asked specifically what benefits would arise to commuters.
A number of noble Lords mentioned Ashford international passenger station. The Government regret that the station design put forward by British Rail could not be afforded. It would have cost £140 million in 1989 prices. To put that in perspective, the cost is similar to that for Waterloo international passenger station but with only a fraction of the passenger demand. We still want to see a station provided but stripped of the more expensive and complex engineering. British Rail is looking at the possibilities. Apart from a cost advantage a simpler station should take less time to build and ought to be ready sooner.
With regard to the comments of the noble Lord, Lord Clinton-Davis, on the European Commission's complaint about the environmental assessment of King's Cross and the rail link, we have given the Commission what we believe to be sound responses to the points raised and therefore we await the response of the Commission to that matter.
I turn to Network SouthEast. I do not seek to deny that there are difficulties in some parts of Network SouthEast. That is self-evident. I have every sympathy for those commuters who have to suffer unreliable and unpunctual services. It is not acceptable that many should regularly arrive at work late and fatigued after an uncomfortable journey of the type so graphically described by the noble Baroness, Lady Mallalieu. There are problems on some lines. But the problems

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do not extend across the whole network. As my noble friends Lord Geddes and Lord Mountevans pointed out, many lines offer a good service and as a result we hear very little about them. They offer a good service because they have had the investment they need.
Network SouthEast is in the middle of a massive re-equipment as trains built in the early 1960s come to the end of their useful lives. It has been investing at a high level for some time. Over the last financial year NSE alone has spent about £1 million a day on modernising and re-equipping its services. The Government's approach throughout has been supportive and flexible. BR has recently been hit hard by falling demand and the slackness in the property market. In response we took the exceptional step in June last year of increasing BR's external finance limit by £400 million in-year. That has helped it to maintain services and continue with investment programmes despite falling revenues. Then, in last November's Autumn Statement, BR's external finance limit for the coming year was increased by nearly £1 billion to a total of £2 billion.
The record of achievement over the past five years is impressive. Over 1,000 new vehicles have been introduced. Three new lines have been opened: Thameslink, the Stansted Airport Link and the Oxford-Bicester Link. Fourteen new stations have been opened and over 100 reconstructed.
A key element in the investment strategy is "total route modernisation", as mentioned by my noble friend Lord Mountevans. That involved renewing trains and infrastructure at the same time to gain the maximum benefit from both. Four lines—Chiltern, Thames, Kent Link and the Waterloo and City line —are currently undergoing total route modernisation. Until recently the Chiltern line had one of the worst services in Network SouthEast. It now has state of the art signalling and modernised stations, including the splendidly refurbished Marylebone station. Networker turbo diesel trains are being delivered to provide a more reliable, more comfortable and faster service. The total cost will be over £75 million. Although the full fleet of trains has not yet entered service, performance on the line has already shown a significant improvement.
The total route modernisation of the Kent Link lines is a much bigger project costing over £600 million. Nearly 500 new electric Networker vehicles are on order. The first have recently been delivered and will enter service in May. Those will replace old and unreliable slam-door trains which are nearing the end of their useful life. In addition, platforms are being lengthened to allow longer trains to be run to reduce overcrowding and cater for growth.
Many other projects could be mentioned. Most spectacular from a visual point of view is perhaps the extensive refurbishment of Liverpool Street station which was recently re-opened by Her Majesty the Queen. Besides the impressive renovation of the architecture, the station has been re-modelled into a unified structure. Platforms have been extended and the approaches to the station re-signalled. The net
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result is to improve reliability and increase flexibility. In particular, it should no longer be necessary for trains to wait outside the station.
A number of noble Lords mentioned the London, Tilbury and Southend line. My noble friend Lord Cochrane travelled on it, as he said, only yesterday. The Government are fully aware that the service has not been up to the standard passengers have a right to expect and at times has reached unacceptable levels. That is why we agreed in November that BR should go ahead with the £50 million project to re-signal the London, Tilbury and Southend line. British Rail regard the replacement of the signalling system as the key to improving reliability of services on this line. Work has already begun on the specification for the design of the scheme and contracts should be placed by the middle of this year, with the system in operation by late 1995.
The noble Baroness, Lady Mallalieu, made some trenchant comments about travel on Network SouthEast. I can assure the House that the Government are determined to make public services like British Rail more responsive to the needs of the public and more accountable for the performance that they deliver. My right honourable friend the Prime Minister set out a number of initiatives to achieve that in The Citizen's Charter White Paper. The Government are convinced that privatisation is the best way to achieve efficient and responsive rail services. Exposing the railways to the disciplines of the private sector will be by far the most effective way of making sure that passengers get a better deal. The Government intend to issue a White Paper setting out their proposals for the privatisation of BR and Ministers will be making a Statement about that shortly. I note in that context the suggestion from my noble friend Lord Cochrane of forming a plc as a first step in that direction.
My noble friend Lord Mountevans urged better staff training and better information. I acknowledge to my noble friend that those two matters are of great importance and greater emphasis should be given to them. My noble friends Lord Geddes and Lord Cochrane mentioned the possibility of leasing by British Rail. I am afraid that I do not have time to go into the detailed pros and cons of that argument. Perhaps I may write to my noble friends on that matter.
With regard to the question of Networker trains being too big for tunnels, the noble Lord, Lord Clinton-Davis, was unfair to British Rail, or perhaps he was attempting to be unfair to the Government, on that matter. My noble friend Lord Cochrane aptly described the fact that it was well known that the work would have to be done and it was planned from the beginning of the project that the work would be necessary for the introduction of the new trains.
I am running out of time. I know I must give the noble Lord, Lord Clinton-Davis, a few moments to wind up. I hope that I have demonstrated that a great deal has been and is being done. I should like to underline the Government's commitment to Britain's railways, to Network SouthEast and to the Channel tunnel services in particular. Both have a vital

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contribution to make to the nation's economic health. Both require massive investment and both are getting it. I hope that your Lordships will join with me in welcoming the excellent progress that British Rail are making on the infrastructural work for the Channel tunnel services, which will bring benefit not only to domestic passengers but to international ones as well.
8 p.m.
Lord Clinton-Davis: My Lords, time permits me only to thank all those noble Lords who have participated in this debate. They have spoken with great expertise whether as people who have been involved in the railways, or concerned about the railways as passengers. I believe that the House has benefited enormously from this debate. I sympathise with the noble Lord, Lord Brabazon, who has made a valiant effort to reply to the debate within the limitations of time imposed on him although I suspect that he would have needed the whole of the two hours to satisfy the House.
I believe that the key—
The Chairman of Committees (Lord Aberdare): My Lords, the time allotted for this debate has now elapsed. Does the noble Lord wish to withdraw his Motion?
Lord Clinton-Davis: My Lords, I hope that I have time. In that event, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Hearing Aids
8.1 p.m.
Lord Cullen of Ashbournerose to ask Her Majesty's Government whether they will take steps to improve the availability of choice and service for adults who are hard of hearing and can be assisted by the use of hearing aids.
The noble Lord said: My Lords, in asking Her Majesty's Government the Question standing in my name on the Order Paper, the only interest I have to declare is that I am one of those 3.9 million adults who find it necessary to use a hearing aid. Therefore, my remarks are addressed to the needs of that group of people rather than to the really deaf or those people who have ear conditions which can be remedied by surgical operation.
At the moment someone who is hard of hearing has two quite separate and distinct routes available to him or her. The first option is the NHS route. First you go to see your GP who refers you to an ENT specialist, and from there you are referred to the audiology department of an NHS hospital. I understand that around 80 per cent. of people who are hard of hearing tread this somewhat lengthy and inconvenient route with its attendant travel and waiting list delays which may vary from weeks to years. At the end, however, they obtain an NHS hearing aid from a somewhat
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limited range, all of which are either body-worn aids or of the behind-the-ear type. Exceptions are so few as to be irrelevant.
Each year the NHS supplies approximately 350,000 new hearing aids of this type, all supplied completely free of charge to the patient. The alternative is to obtain a hearing aid privately, supplied by a registered hearing aid dispenser. That route is much more convenient since you can either go to a high street branch or have the dispenser make a domiciliary visit. By taking the private route you have access to an unlimited range of all the latest hearing aid technology. It can be seen and tested instantly and the aid supplied after a delay of no more than a few weeks. Approximately 65,000 hearing aids are supplied by the private sector each year at an average cost to the client of £450 paid for in full by the purchaser. The private hearing aid sector represents just under 20 per cent. of the total hearing aid market.
It seems to me that the present set-up whereby 80 per cent. of a limited range of NHS hearing aids are supplied at no cost to the patient, whereas 20 per cent. of a much wider range of hearing aids are supplied privately at full cost, does not appear to be the most efficient use of limited resources; nor does it, I believe, offer the majority of people the best available service. That should not be seen as an attack on the staff working within the NHS. Many of them do an excellent job. The effectiveness of the system within which they operate must be challenged.
On the point of service, it is important to appreciate that hearing aids are delicate and intricate instruments and require service from time to time. They also need batteries. So the convenience and service aspect for the consumer is very important. Another matter which concerns me is the waste involved in the present arrangements. I understand that as many as one-in-five NHS hearing aids can end up being put in a drawer and not used. Further, of those who end up buying an aid privately, about one-in-three previously had an NHS hearing aid. All that must involve some considerable waste of resources, and I wonder whether the Government have given any consideration to the possibility of undertaking a survey to look into the extent of any such wastage.
However, there is also the wider question of whether it is wasteful of hospital resources to be fitting hearing aids to people with a condition requiring no medical or surgical treatment. As I understand it, only about one-in-140 of NHS patients fitted with a hearing aid have any recognisable condition which could justify the attention of an ENT surgeon. The vast majority of these patients could perfectly well be fitted with hearing aids without any need to attend hospital.
The NHS Management Executive published a paper in February last year entitled Integrating Primary and Secondary Health Care. In paragraph 23 that paper provided most welcome recognition that ophthalmic services offer great scope for developing an integrated approach and pointed to the fact that high street optometrists already play a major part in detecting diseases such as diabetes and glaucoma and in referring patients through their GP to hospital. As

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my noble friend is aware, I have been interested in optics for a number of years so I particularly welcome the way in which the NHS Management Executive appears to have recognised that there may well be scope for farming out to ophthalmic opticians in the high street much of the managing and monitoring of eye conditions which has previously been done within the hospital eye service. Strangely. however, the paper makes no reference to the NHS supply of hearing aids which I would suggest is a service which could be transferred and largely delegated to the private sector.
That brings me to three questions which I hope that my noble friend will be able to answer when she comes to reply. First, what is the true overall cost annually of the NHS hearing aid service, including not merely the actual appliance costs, but also the overhead costs including an element for the use of hospital premises and the time of NHS staff? I asked this Question some time ago for a Written Answer. I was told that the cost was not known. I am hoping this evening that perhaps my noble friend will be able to give an estimate of the costs. It has been suggested to me that it is something like £100 per hearing aid unit, but that may be wide of the mark.
Secondly, I should like to inquire what the position will be as regards the supply of hearing aids in Europe. What will happen after 1992? I hope that people will not find it necessary to go to France for their hearing aids, rather like the gentlemen from Kent who went to France for a cataract operation in order to beat his local hospital waiting list. Thirdly,—and I believe that this is the key question—if one takes an overall view of the hearing aid market, why should all public funding be channelled exclusively to the NHS hospital supply?
I believe that there is an analogy to be drawn here with the spectacle voucher scheme, which the Government introduced in 1986. Between 1951 and 1986, everyone was entitled to NHS spectacles. As with hearing aids, the NHS range was very limited. But unlike the NHS hearing aid, the patient obtaining NHS spectacles had to make a patient's contribution towards the frame and lenses at a price fixed by the Government.
NHS spectacle dispensing resulted in a total distortion of the optical market and severely restricted patient choice. Nowadays however NHS-eligible groups are entitled to a voucher which helps with their spectacle purchase. As from 1st April 1991 the most commonly prescribed spectacle voucher, band A, provides the patient with £19.30 which he can put towards the price of his spectacles, and he can choose from the full range of what would previously have been regarded as "private" spectacles. That system has worked well, and I should like to urge the Government to give serious consideration to the implementation of a voucher system for the hard of hearing. As with the spectacle voucher scheme the hearing aid voucher should cover the cost of the supply and service of the basic product. Both sources of supply would offer the full range of what are now NHS-type hearing aids and private hearing aids.
A voucher scheme for hearing aids could have much to offer. First, it could save the NHS money by
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reducing waste. Secondly, it would reduce pressure on the NHS hospital service and reduce waiting lists. Thirdly, it would enable state funds allocated to the NHS to be targeted on primary health care and assisting those who can be helped by the particular attention of ENT specialists and audiology departments of hospitals. Fourthly, it would remove a major distortion in the hearing aid market. Fifthly, it would offer the person who is hard of hearing—the consumer —much wider choice and access to the best hearing aid technology, whether they chose to go to the hospital department of audiology or preferred the service and convenience obtainable in the private sector. Above all, speed of availability would lessen the chance of the hard of hearing becoming isolated from society for two years or more, often at a time when they can ill-afford to lose their hearing for such a significant proportion of the remainder of their lives. Isolation also becomes a habit hard to break when the hearing aid is eventually fitted.
In conclusion, so far as concerns the role of the Government in relation to the hearing aid industry, there appears also to be a division of responsibility which no doubt reflects the sharp division which exists between NHS and private hearing aids. I am referring to the fact that the private sector of the hearing aid industry is regulated by the Hearing Aid Council for which the Department of Trade and Industry has overall responsibility. On the other hand, the Department of Health has responsibility for the bulk of hearing aid supply made through the NHS hospital service.
I seriously question whether this present rigid division between NHS and private supply is helpful to those in need. Would it not be more sensible and rational for the entire supply of hearing aids to he brought within the responsibility of one department; namely, the Department of Health? I hope that the Government will give some careful future consideration to that possibility and ask that department to examine ways of achieving a better integrated service that would be more cost-effective for the Government and more convenient for the consumer.
8.14 p.m.
Lord Desai: My Lords, I am sure we are all grateful to the noble Lord, Lord Cullen of Ashbourne, for raising the important problem of those who are hard of hearing. Given the age structure of the population and the fact that we shall have a large proportion of the elderly in our population in the future, this issue will become more, rather than less, important.
The noble Lord has made a number of interesting suggestions about how to tackle the problems in this area. I should like to respond to a few of them. Clearly, in the NHS sector the problems have to do with waiting times—both before a patient can see an ENT surgeon and afterwards when waiting for the hearing aid to be supplied. These delays—which are some 16 weeks before a patient can see an ENT surgeon and about eight weeks before a hearing aid can be supplied—are clearly too long. We should like

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to know whether there has been any recent decrease in these waiting times, and how can we speed up this process?
The NHS has an advantage in that the service is available free of charge. Not only are hearing aids available free of charge, but they can be repaired and renewed. What one might call the after-sales service is much more efficiently and cheaply done within the NHS.
Before taking up the suggestion of the noble Lord, Lord Cullen, about letting the high street hearing aid dispenser play a major role, one should like to know how the after-sales service problems will be tackled for those NHS patients who will not be taking advantage of supplementing with their own money their hearing aid needs. That is clearly an important problem. This is a matter of judgment rather than any certainty. If there is to be a guarantee that an NHS voucher will be paid for anyone obtaining a hearing aid, will that lead to a general increase in prices all round because a floor is established? I should especially like to be quite sure that there will be no undue pressure on patients whose intention it is to have an NHS hearing aid, and that there would be no overt or covert sales pressure to go the private route. People get embarrassed and might end up spending more money than they had intended. Of course, they are free to spend more money, but I should like to know that they will not be embarrassed into spending.
Currently, if they do not want to spend more money, they wait and they pay the price in terms of time. I should like to know that if they do not pay the price in terms of time, that we can avoid the possibility that they will have to pay too much money.
Having said those things, the suggestion made by the noble Lord that the high street private sector hearing aid dispenser be given a major role, is a welcome one. Clearly an ENT surgeon should be much too busy to look at every person who needs a hearing aid. He or she should have better things to do. That will be one saving.
I am not sufficiently sure that this requires the creation of an intermediate category of specialist who can be licensed and trusted to give the service that currently the ENT surgeon gives. I am not at all medically literate. I should like to know whether this would require a special class of intermediate medically-qualified people to do this. If so, who will license them? Where will they be trained and how many people do we need? I see that analogy of the optometrist is a good one; but I should like to know whether there is a possibility of people who are not full scale ENT surgeons carrying out these tasks. Perhaps the audiologists will perform these functions, and they can be trained quickly. The problem is how to give the 80 per cent. of consumers who resort to the NHS a better service with shorter waiting times. In addition, if we move to these other arrangements the NHS may save on resources. It would be helpful to know how much would be saved. If resources were saved one might be able to give a better deal to the person who wants a NHS hearing aid.
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This is not a matter on which there is any great party political divide. I certainly do not pretend to have any great expertise in this area.
8.20 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, I am most grateful to my noble friend for drawing the attention of the House to the problems of people who are hard of hearing. My noble friend is not unique in the House in having the problem to which he referred. I feel that there is considerable sympathy for what he has to say.
Hearing loss is a hidden disability which often goes unrecognised and is poorly understood by those who are fortunate enough to enjoy good hearing. We appreciate how important it is for people who are hard of hearing to be able to obtain a hearing aid that meets their individual needs. That is why the range of NHS hearing aids is under continual review. We are taking steps to improve the service and reduce waiting times for consultations and fittings where those are unacceptably long. Far from moving in the direction of changing what my noble friend called a rigid separation between the National Health Service and the private sector, as in all areas of NHS provision our aim is to ensure that the National Health Service is the best possible service available. Perhaps I may say a little about what we are doing to ensure that.
We know that some people may be deterred from seeking help through the NHS because they are daunted by the traditional referral chain, to which my noble friend referred, of GP, ear, nose and throat consultant, and hearing aid centre. That process can sometimes involve long delays, a point to which the noble Lord, Lord Desai, referred and over which the Royal National Institute for the Deaf led a vigorous campaign for change.
As a result of that campaign, we set up 12 pilot projects at a variety of centres throughout England to compare the advantages of using a direct referral procedure with the traditional referral via the ENT department. There are, of course, built-in safeguards to ensure that patients are not placed at increased clinical risk. Those projects are being independently evaluated by a team of researchers from the University of Manchester who will look at the costs and benefits of the different referral systems as well as at the level of satisfaction of patients and staff, the clinical safety factors and what the effect is on waiting times. A final report is expected in the spring and we hope to learn useful lessons. I trust that the noble Lord, Lord Desai, is willing to accept that we are dealing with the problem to which he referred and that we hope to come forward with a useful response.
In addition to piloting an accelerated referral system we have recommended that health authorities should consider locating all or part of their hearing aid services in community settings to make them more accessible to people, some of whom may live a long distance from the hospital.
We are also working in a variety of other areas. A shortage of technicians can affect some of the problems that have been referred to. We have

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addressed the problem of delays in two ways. First, we are, through the pilot projects, encouraging health authorities to harness the resources and expertise available in the private sector by entering into contracts with private dispensers to provide NHS hearing tests and fit NHS hearing aids. That may go a little way to breaking down the rigid separation to which my noble friend referred. Secondly, we are actively seeking to improve the recruitment of audiology technicians. As a result of a review in 1988 of the terms and conditions of service of NHS audiology technicians, we have introduced improvements in both their salary and career structure. We are also working on training and qualifications. We are working towards the introduction of an improved training package leading to a national vocational qualification. It is clear that structured training and a nationally recognised, portable qualification can be powerful factors in drawing people into a profession.
My noble friend referred on a number of occasions to the private sector. He will appreciate that it is the Hearing Aid Council rather than the Department of Trade and Industry that regulates the private hearing aid sector. The department appoints the council's chairman and members. The members are drawn equally from the trade, representatives of consumers and people with medical or technical knowledge. The council has an independent chairman. It is the council which sets the training requirements and examinations for private hearing aid dispensers. I have already referred to a common interest in this respect with the NHS. However, the council also operates a code of practice which covers the sales and advertising needs of private dispensers. Clearly, this is not a matter for the Department of Health or the NHS but should remain the responsibility of the Department of Trade and Industry through the Hearing Aid Council.
As to the question of overall cost, as we have said before it is not possible to identify the service costs which are part of the wider hospital service though we can of course quantify the cost of the aids themselves.
Having dealt with the way we are promoting improvements in the service, to some extent at least, I should like to say something about the choice and availability of hearing aids.
Lord Cullen of Ashbourne: My Lords, did I understand my noble friend to say that she can give an idea of the cost of the hearing aid? Did I hear her correctly?
Baroness Hooper: No, my Lords, I am afraid that my noble friend did not hear me correctly. I said that it is not possible to identify the service costs and therefore the unit costs in the way that my noble friend requested. If it is helpful, perhaps I may undertake to look at the point and perhaps reply to him in writing if I have more information.
I should now like to move on to the question of choice and availability of hearing aids, which was referred to by my noble friend and the noble Lord, Lord Desai. The standard range of hearing aids supplied through the National Health Service has been considerably extended in recent years and meets the clinical needs of the great majority of patients. The
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range includes three types of post-aural or behind-the-ear hearing aids, each having different power and amplification levels. Each type is represented by several different models, usually from different manufacturers, which gives a choice of peripheral facilities. Moreover, as manufacturers update their products, older models are withdrawn and new ones introduced. That is the way in which the NHS standard range is kept up to date.
Patients can obtain replacement and support services for standard range hearing aids anywhere in the country. In the few cases where a hearing aid standard range does not meet a patient's clinical needs, health authorities are able to supply any other suitable hearing aid under National Health Service arrangements. Nevertheless, we clearly want to encourage National Health Service clinics to make wider use of existing powers to supply aids outside the standard range because, like my noble friend, we wish to avoid any possible suggestion or perception that there is wastage as regards the aids which are available.
My noble friend also made specific reference to the question of vouchers and the possibility of introducing a system for hearing aids similar to that which exists for spectacles. I know that is something in which the private hearing aid sector has been interested for some time. Indeed, those concerned have raised the matter with my honourable friend the Parliamentary Under-Secretary of State for Health in the other place.
As to the issue of vouchers, we have considered this very carefully and listened with interest to the proposals put to us by representatives of the private sector. While there may be some superficial similarities between the supply of hearing aids and spectacles, they entail very different clinical, technological, administrative and financial considerations. There are also major differences in the way that the private optical and hearing aid sectors organise and deliver their services.
Those considerations confirm our belief that the National Health Service should continue to provide a comprehensive hearing aid service that is available to all on equal terms. We also wish to see a flourishing and well-regulated private sector so that people can exercise their right to choose. However, it is a fundamental principle that patients who choose private treatment as an alternative or in addition to a service which the NHS provides free of charge must expect to pay the whole cost of the private treatment. We see no grounds for making an exception in the case of services for hearing impaired people by subsidising the cost of private treatment whether through a voucher system or by any other means.
My noble friend also asked about the situation in Europe in the future. I believe that he probably had in mind the period after 1992. Of course, the single market legislation affects only manufacturers' or suppliers' ability to sell their wares in member states; in other words, by the removal of technical barriers to trade. It does not bear upon service delivery systems. So far as I am aware, the medical device directives currently proposed by the European Commission will

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result in harmonisation of essential minimum requirements for hearing aids and other medical devices in support of the single market.
I have described a number of ways in which the Government have demonstrated their commitment to maintaining and improving the quality and choice of services for people who are hard of hearing. In so doing, I hope that we shall provide considerable assistance for the private sector so that it, too, continues to improve its services for the benefit of its customers. I hope that I have answered most, if not all,
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of the points raised by my noble friend and the noble Lord, Lord Desai. However, if I find that there are any points of detail to which I have not responded, I shall be happy to write to the noble Lords.

London Underground Bill
Reported from the Select Committee with amendments and recommitted to an Unopposed Bill Committee.
House adjourned at twenty-four minutes before nine o'clock.