Lords Sitting of 29 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 Worcester.

Algeciras-Gibralter Ferry Service: Ban
Lord Boyd-Carpenterasked Her Majesty's Government:
Whether the Spanish Government have now accepted that their ban on the renewal of the ferry service between Algeciras and Gibraltar is contrary to their obligations as a member of the European Community.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, no. We believe that the Spanish ban in preventing the renewal of the ferry service runs counter to the spirit of the new Europe that we are trying to create, but is not in breach of Spain's legal obligations in the Community.
Lord Boyd-Carpenter: My Lords, in the light of that Answer, can my noble friend say what line the Government are proposing to take? Are they simply going to acquiesce in Spanish defiance of the spirit of the Community, or will they take some action to bring it home to the Spanish Government that they cannot get away with this kind of thing?
The Earl of Caithness: My Lords, we continue to press the Spanish on this matter. As my noble friend will know from previous Questions, in their minds they have linked it to the question of the airport which we do not believe is correct. In our annual meetings with the Spanish—the next one is due to be held in Spain at a date as yet not agreed—we shall continue to press on this matter.
Lord Cledwyn of Penrhos: My Lords, we have had a number of exchanges in the House on this subject without any apparent change in the Spanish attitude. Can the noble Earl say whether there is any prospect that the Spanish will sign the draft external frontier convention, which is necessary and is part of their duty? Can he say whether there has been yielding in the Spanish position on this matter over the past two years?
The Earl of Caithness: My Lords, I cannot answer the noble Lord's first question. With regard to his second question, there has been no give in the Spanish position on this matter.

EC Finances: Administration
2.38 p.m.
Lord Benson asked Her Majesty's Government:
In the light of the deficiencies in the administration of the finances of the European
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Community, which were exposed in the report of the Court of Auditors for the financial year 1990 and in a long series of reports of prior years, when they expect the administration of the finances of the European Community to be conducted in a satisfactory manner and how this is going to be achieved.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, the Court of Auditors, in its annual and ad hoc reports, rightly highlights deficiencies in the administration of the Community's finances, The court's observations concentrate on areas that need review, playing a vital role in strengthening Community procedures. In some cases the court's observations require the preparation of long-term improvements, but more often the Commission undertakes immediate steps to modify its procedures or strengthen regulations.
Lord Benson: My Lords, I am grateful for that Answer, although it does not really answer the Question. Is the noble Lord aware that by chance the answer was given in the correspondence columns of The Times this morning? It indicates that what is needed is wholesale reorganisation of the administration of the Commission and a staff of greater competence and quality.
Lord Brabazon of Tara: My Lords, I have of course noted the correspondence to which the noble Lord refers. However, the Question which he asked concentrates on the actions of the Court of Auditors. I believe that the Court of Auditors plays a most useful role in the affairs of the Community and has a considerable influence on what goes on. And so it should.
Lord Cockfield: My Lords, does my noble friend agree that most of the trouble has nothing whatever to do with the Commission? It is malfeasance on the part of the member states themselves.
Lord Brabazon of Tara: My Lords, I can only answer today on the action taken on the various reports of the Court of Auditors. For example, the Community now has a 45-point action programme on fraud against the budget which covers areas, particularly in agriculture, identified in various reports of the court. I can assure the House—I hope that I can assure the House properly—that full note is taken of the reports of the court and that action is taken where necessary.
Lord Bruce of Donington: My Lords, in supporting the observations of the noble Lords, Lord Benson and Lord Cockfield, may I ask the Government when they will take the initiative in seeking a complete and thorough review of the Community's financial regulations with a view to giving the Court of Auditors far greater powers in relation to the conduct of recalcitrant member states? Will the Government consult the Comptroller and Auditor General and obtain his views on the staff available to the Court of Auditors since at the moment that staff is grossly inadequate for the tasks entrusted to it?
Lord Brabazon of Tara: My Lords, I have on fairly recent occasions set out for the noble Lord, Lord Bruce of Donington, the various improvements made through the Maastricht agreement to the financial management and accountability of the Community. For example, the European Court of Auditors is to be given enhanced status as an official Community institution. It is to be required to provide the Council and the European Parliament with a statement of assurance on the reliability of the Community's accounts and on the legality and regularity of underlying transactions. Those steps and the others taken at Maastricht are steps very much in the right direction.
The noble Lord suggests that the Court of Auditors has inadequate resources to fulfil its role. I do not believe that there is evidence to support that assertion. The Community draft budget for 1992 provides 36 million ecu for the ECA, but I agree that it will be important to keep the effectiveness of the court under review.
Lord Harmar-Nicholls: My Lords, does my noble friend accept that this Question, and the first Question on the Order Paper, and the supplementary questions and answers to both, confirm quite clearly the lack of affinity between the member states? Would it not be stupid to make any more commitments so long as that situation is the truth of the matter?
Lord Brabazon of Tara: My Lords, I think that my noble friend goes somewhat wide of the Question on the Order Paper.
Lord Peston: My Lords, without disagreeing with the view that we should perhaps raise the status of the Court of Auditors and give it more resources, is it not the case that, even if its status was as high as it conceivably could be and it was given an infinite amount of resources, its task in dealing with fraud remains an impossible one so long as the common agricultural policy continues? As I have said before, is not the CAP simply a mechanism for fraud and a problem that no one will ever be able to solve? Surely, what is required is a change of policy.
Lord Brabazon of Tara: My Lords, I believe that the status of the Court of Auditors is very clear: its role is essential in the management of the European Community budget. It is an essential part of the process. I do not disagree entirely with the remarks made by the noble Lord about the common agricultural policy; but I would not go so far as him and say that it is a fraudster's charter. It is not quite as bad as that.
Baroness Robson of Kiddington: My Lords, can the Minister say whether it is true that when the Court of Auditors makes recommendations the Council of Ministers has adopted the principle of explaining why, with reasons, it does not conform with the recommendations? That was one of the recommendations in the report of your Lordships' Select Committee.
Lord Brabazon of Tara: My Lords, both the Council and the European Parliament consider the
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court's findings and the Commission's responses very carefully. In granting its discharge to the budget, the European Parliament, acting on a recommendation from the Council, indicates what further action it believes to be necessary.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that not everyone will agree with him when he says that the common agricultural policy is not a fraudster's charter? Indeed, most people believe that it is a fraudster's charter. Therefore, would not the best way of dealing with the matter be to repatriate agriculture to the individual nation states, rather than the Commission embarking upon an enormous Domesday exercise using planes and helicopters, at a cost of about £70 million, to spy on every farmer, sheep and cow in the EC?
Lord Brabazon of Tara: My Lords, although that question is a little wide of the one on the Order Paper, I should point out that the Government have already made clear their view on that proposal.

Heathrow Airport: Car Park Security
2.45 p.m.
Lord Holme of Cheltenhamasked Her Majesty's Government:
In view of the high costs of parking at Heathrow airport, what obligation is there on the British Airports Authority and the parking contractors to provide security for vehicles parked.
Lord Brabazon of Tara: My Lords, as with public car parks generally, this is a commercial matter of the contract between the operator and the user of the car park and not something in which the Government have a locus.
Lord Holme of Cheltenham: My Lords, I thank the Minister for that Answer. Perhaps I should, at the outset, declare not so much a personal interest but more a personal loss in that I had my car broken into in the short-term car park at London Airport. Unhappily, that is not an unfamiliar event these days. However, certain facts came to my notice during the course of that incident. For example, is the Minister aware, first that the cost of parking for the ordinary traveller in the short-term car park is £3 an hour; secondly, that in the fine print of the contract the contractors disclaim all responsibility; and, thirdly, that there is no regular security control carried out in the airport?
Bearing in mind the Citizen's Charter, does the Minister agree that the latter represents rather poor service and value for money on the part of the British Airports Authority and its contractors? Perhaps the authority should forfeit its charter marks. Alternatively, should it perhaps receive a charter stripe?
Lord Brabazon of Tara: My Lords, I can tell the noble Lord that I understand that BAA has recently made considerable improvements to the parking arrangements at Heathrow Airport. For example, the price of parking is not as high as the noble Lord

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quoted; indeed, BAA recently introduced a new short-stay parking price in the central car parks which amounts to 75 pence per half-hour. The authority has also introduced new business parking arrangements which are slightly cheaper. Moreover, the authority has framed the new contracts with its agents in such a way as to give them an incentive to minimise the occurrence of crime. All those improvements have recently taken place.
Lord Carmichael of Kelvingrove: My Lords, I understand from the British Airports Authority that it insists that the car-parking agents take steps to ensure safety and that there are patrols of the car parks. Perhaps the Minister could comment on that aspect? I am informed that the actual number of thefts which occur, compared to those which take place in the streets, is very low. Moreover, I also understand that the Air Transport Users Committee is quite happy with the new reduced cost. Can the Minister say whether the compensation scheme which operates for drivers leaving their cars in the car park compares reasonably well with the arrangements which apply to local authority car parks that are operated by agents?
Lord Brabazon of Tara: My Lords, I certainly agree with the first part of the noble Lord's remarks. I understand that BAA has recently taken steps to improve the arrangements, including, for example, the introduction of closed-circuit television. The figures as regards crime in Heathrow Airport's car parks are not at all bad in comparison with the figures for elsewhere in the country. However, it is not really a question for me; it is a question for BAA.
Lord Stoddart of Swindon: My Lords, I am sorry to bother the Minister, but did I hear him aright? Did he say that the charge for the short-term car park was 75 pence per half hour? Is my arithmetic correct when I deduce that to be £36 a day? Is that not an inordinate and expensive charge?
Lord Brabazon of Tara: My Lords, it is not for me to say what is an expensive or an inordinate charge. All I would say is that there has been a reduction in the cost of the short-term car park for short-term parking. If the noble Lord wishes to park his car for longer, I suggest that he parks it at one of the other car parks which are more suited for longer-term parking, and cheaper as a result.
Lord Marsh: My Lords, will the Minister answer my question, although it may be a matter for the Leader of the House? It arises out of interest and bewilderment. If the Minister is not responsible for the Question, how does it manage to appear on the Order Paper?
Lord Brabazon of Tara: My Lords, I cannot answer that question. I too was surprised. I raised the issue and was told that it was in order.
Lord Harmar-Nicholls: My Lords, it is not my noble friend's fault, but to say something costs 75 pence a half hour is the same as saying that an article costs 19s 11¾d. By the time one has got out of one's car
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and walked to the end of the car park the half an hour has gone; so one is committed to something infinitely more than the minimum even before one starts.
Lord Brabazon of Tara: My Lords, again, it is not a question for me. The minimum charge used to be £2.10 for rather longer than half an hour. There are many people who would just like to meet someone at the airport and would use only the half hour. For those people the short-term car park is useful.
Lord Molloy: My Lords, does the Minister agree that we put down Questions in the House not merely for ourselves but sometimes in the interests of the entire country? In this instance, the Question is in the interests of the thousands of motorists who use that car park.
Lord Brabazon of Tara: My Lords, I am pleased to know that the entire country is hanging on the words that I am uttering from this Dispatch Box today.
Lord Holme of Cheltenham: My Lords, perhaps I may briefly assist the Minister and the noble Lord, Lord Stoddart: the price goes up after the first hour or so to £3 an hour; so it is even more expensive than the noble Lord, Lord Stoddart, thought. Travellers experience difficulties in meeting the shortest period. If the Minister believes that the matter is not one for government but is one for private industry, and is not within the Government's remit, could not the Government do more to inspire competition in parking at London Airport so that there is a choice of locations, prices and levels of service for the traveller?
Lord Brabazon of Tara: My Lords, that is exactly what BAA has done. In the medium-term, not the short-term, car parks it has introduced competition between at least two operators, and the prices there are more competitive than have so far been quoted this afternoon. The Government have a role in so far as the MMC investigated the car parking charges at Heathrow during the quinquennial review of BAA's prices at Heathrow. The MMC found those prices to be reasonable.

Torture Equipment: Export Controls
2.53 p.m.
Lord Hatch of Lusbyasked Her Majesty's Government:
Whether they will prohibit the export of all instruments of torture and mechanical restraint.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay): My Lords, the Government have received a report on this matter from Amnesty International and will respond to it after a careful study of its contents. The Government deplore the use of any equipment knowingly exported for the use of torture and other such violations of human rights. The Government already control the export of leg irons, shackles and gangchains, and recently reconfirmed that no licences would be issued for the export of those items.
Lord Hatch of Lusby: My Lords, I thank the Minister for that reply and welcome its tone. Is he aware that while the Question I put down has general import it is based upon one issue which causes some anxiety? A friend of mine, Orton Chirwa, who is well known in many parts of the House and who was a servant of Nyasaland and then Attorney-General in Tanzania, was kidnapped 10 years ago. According to the Amnesty International report, which the Minister has quoted, he was kept in prison for two days and two nights handcuffed and leg-ironed in a compulsory squatting position. According to Amnesty International, those leg irons came from Britain. That is why I asked the Question. I should be glad to receive a response from the Minister.
Lord Reay: My Lords, the Amnesty International report came up with three allegations linking British firms with the overseas practice of torture. One of them concerned the manufacture and export of leg irons in 1983 by a Birmingham firm. That led in 1984 to the Government banning the export of leg irons; and last October my right honourable friend the Minister for Trade announced that he was banning the export of a certain type of large handcuff which could also be used as a leg iron. We have not been asked to add other items to the list of controlled exports.
Lord Molloy: My Lords, if it is true that instruments of torture are being made here, should not the Government consider whether their manufacture should be prohibited?
Lord Reay: My Lords, as I have demonstrated, where we have been asked to put items on the list, that has been done. We have not been asked to put on the list additional items to which special considerations should apply. Most forms of torture will be carried out by instruments whose primary purpose is entirely innocuous, even if they are imported from this country, which may well not be the case. We could only be certain that we were not contributing to torture overseas if we stopped virtually all our exports.
The Earl of Halsbury: My Lords, when suffering from lower back pain, I sometimes employ a means of mechanical constraint called a corset, which, if maladjusted, can easily become an instrument of torture. Will the Minister tell us how one could draft a statutory instrument so as to define the permissibility or impermissibility of something for export according to how it is adjusted by its future user?
Lord Reay: My Lords, I do not think that we will consider adding corsets to the list.
Lord Ennals: My Lords, bearing in mind that there is evidence of increasing torture in a number of countries, not just the cases referred to by my noble friend, and bearing in mind the work that Amnesty International has done, not merely in bringing it to the attention of Her Majesty's Government but in securing apparent support for the convention against torture, does the Minister accept that if the Government decided to take tough action against
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instruments that are clearly designed for torture—not for supporting parts of the body—it would receive a warm welcome?
Lord Reay: My Lords, we have taken such action. That is exactly what we have done. Amnesty International gives three instances; in themselves they provide a rather narrow foundation upon which to make broad allegations. We are considering the report, and we shall reply to it in due course.
Lord Bruce of Donington: My Lords, will the Minister give an assurance what whatever measures of control are finally deemed necessary, they will be more effective than the measures of control in operation at the time that gun barrels were exported to Iraq from this country?
Lord Reay: My Lords, the noble Lord raises matters that go wider than the Question on the Order Paper.
Lord Williams of Elvel: My Lords, while welcoming what I hope is the Government's disgust at this trade, will the Minister tell the House what procedures under the Export of Goods (Control) Order 1989 people have to go through to obtain a licence? No one seems clear about that point. Secondly, will he confirm or deny that instruments designed for execution, as opposed to torture, fall outside the order?
Lord Reay: My Lords, apart from the one case instanced in the Amnesty International report, we have no evidence that there has been any manufacture or export of items designed for execution. With regard to the list of countries to which special considerations apply, a list was published in December of destinations for which export licences are subject to special considerations. That is designed to give a guide to industry. There are currently 34 countries on the list.
Lord Campbell of Alloway: My Lords, will my noble friend bear in mind the perhaps crucial distinction between instruments designed to torture and instruments that can be used for torture? After all, a pen knife, a cigarette end and a car magneto can be used for torture. But instruments designed to torture surely come within the prohibited category. I am not talking about the noble Earl's corset!
Lord Reay: My Lords, in all cases where it has been brought to our attention that items specifically designed for torture were being exported, we have taken action. In other cases where items are exported which could be used for torture but are not primarily designed for it, it is difficult to see what the Government can do.
Baroness Ewart-Biggs: My Lords, can the Minister say when the Government will have completed their study of the Amnesty International report? I am sure that the findings will be of great interest to the House.
Lord Reay: My Lords, the report has been presented to us within the past three weeks. It is a little early to say when we shall complete our consideration of it.
Lord Willams of Elvel: My Lords, may I Press the noble Lord on the Supplementaries that I asked? First, what are the procedures under the Export of Goods (Control) Order 1989 for obtaining a licence for something that is apparently an instrument of torture? Secondly, are instruments designed specifically for execution outside the Government's remit under the Export of Goods (Control) Order 1989?
Lord Reay: My Lords, I have answered the noble Lord's second question and I thought that I had dealt with the first. The procedures are well known to exporting firms which should have no difficulty in following them.
Lord Hatch of Lusby: My Lords, while the noble Lord is considering the report, will he give attention to what appears to be a loophole in the banning of exports? I understand that last year in Miami leg irons were displayed at an exhibition under the name of Hiatt Thompson, the distributor for the Birmingham firm, Hiatt. It appears that because the United States has no ban, companies may display these wares in the United States and other countries although the ban applies to them in this country.
Lord Reay: My Lords, I am not sure that we are in a position to control what happens within other jurisdictions. I can only repeat that the export of such items is banned in this country.

Business
The Earl of Strathmore and Kinghorne: My Lords, with the leave of the House I should like to say a word about the two debates standing in the names of my noble friend Lord St. Davids and the noble Lord, Lord Judd. As the mover is allowed 15 minutes and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of the short debate in the name of my noble friend Lord. St. Davids this means that all other speeches should be limited to a maximum of 10 minutes and in that of the noble Lord, Lord Judd, eight minutes. If any noble Lord were to speak at greater length he would be doing so at the expense of subsequent speakers in that debate.

The Welsh Economy
3.3 p.m.
Viscount St. Davidsrose to call attention to the economy in Wales; and to move for Papers.
The noble Viscount said: My Lords, I beg leave to move the Motion standing in my name on the Order Paper.
Today's debate on the economy of Wales comes at a time when the economy, both within Wales and nationally, faces a great many challenges. I believe, therefore, that the timing of this debate provides an ideal opportunity to assess the measures which have so
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effectively revolutionised the economy of Wales and the radical changes that have been wrought at the very heart of that economy over the past decade.
At the hub of all well developed and well balanced economies must be a competitive and flourishing range of production industries which is able to provide the basic requirements for everyday life. Much has been done in Wales to ensure the growth and success of our indigenous industries, though in recent years production, and particularly manufacturing, have occupied an ever-decreasing though still important place in our economy.
Competition from abroad, especially from Japan and South-East Asia, has continued to place great emphasis on both the competitiveness and efficiency of our larger industries. It has forced us to look closely at the very fabric of the Welsh economy and the way in which in the past it has been structured and to remove the frailties which had once been so prevalent.
In Wales, this has meant the rundown of the steel and coal industries on which much of the economy was over-dependent. This process of streamlining major industries is of course continuing in a bid to make them more competitive on the international stage. But it is in Wales that the brunt of these measures has been felt most and where they have been most effectively absorbed.
During the early part of the last decade both the steel and coal industries went through a considerable period of rationalisation. In 1978 Welsh steel making employed 57,000 people. By 1981 this had fallen to 27,000 and it is around 18,000 today. Similarly, the numbers employed in the coal industry have fallen from 30,000 to around 2,500 today.
We should not, however, kid ourselves into believing that this rationalisation is a recent innovation. Far from it. At its peak in 1920, the coal industry employed over 290,000 people. This process of rationalisation began in earnest in the early part of the last decade but was long overdue and very much needed.
Cutbacks of this scale to industries which were the very heart and tradition of Wales could have been debilitating had it not been for the inherent strength which exists in the Welsh spirit. The Welsh economy, aided by strong and effective measures to enhance the employment opportunities of its workforce, has continued to flourish and diversify despite these cutbacks.
In place of an economy once overwhelmed by the colliery face and steel plants, we now have a well balanced economy, far better equipped to respond to the recessionary pressures which are at present dogging the national and world economies. Steel making and mining of course still have a role in the Welsh economy. More than that, they have a unique place in the history and traditions of the communities of Wales. This will always be so, but there is little room for sentiment. We should surely not be looking forward to economic recovery so optimistically if our economy and industrial base were shackled quite so firmly to history and tradition as hitherto.
There are many reasons why the policies of the past decade have been successful. Not least among these is

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the sterling work which has been carried out by the Welsh Development Agency. The main aims of that agency are to further the economic development of Wales, enhance its international competitiveness and improve the environment. The agency pursues these objectives through a wide range of activities, including the provision of modern industrial property, the promotion of inward investment and new technology, business advice and venture capital, land reclamation and environmental improvement and, increasingly, urban renewal and the economic development of rural communities.
Since 1979, the WDA has invested over £1 billion at today's prices in its activities. It has used these resources well. For example, the agency's property programme has ensured that over the past six years the amount of factory floor space rented to Welsh firms has provided the space for 36,000 jobs.
During the past five years, the agency has also raised over £80 million from the sale of its factories to individual tenants and private sector investors, reinvesting the proceeds of these sales in the Welsh economy. Increasingly, the agency's financial resources and management efforts are being directed to its role as a facilitator: to stimulate private sector investment and enterprise. To give an example, the programme known as Welsh Property Venture was launched in 1989 actively to market opportunities for joint ventures between the WDA and the private sector. More than half a million square feet of factory and office space has been secured in the first year of operation, enough to house jobs for over 1,600 people; and for every £1 the agency has invested in this way it now succeeds in generating more than £4 of private sector investment.
In addition to greater prosperity, economic progress also results in a better quality of life, which in itself will help to attract new investment. There is therefore a parallel need to enhance the environment and remove the legacy of dereliction associated with the old traditional industries. The agency has a key role to play here and has a first-class record.
Since 1979 the agency has invested some £220 million at today's prices in reclaiming derelict land. Over 9,500 acres of such land have been brought back into productive use in one of the largest and most sustained programmes of its kind in Europe. When the scheme and its existing programme are complete, some 20,000 acres of poisoned, derelict or damaged land will have been cleared and turned over to productive use to the benefit of the communities involved and Wales as a whole. Reclaiming land, particularly in the Welsh valleys, is a major asset and constitutes a marvellous opportunity for development.
Last year alone business projects worth £175 million were located on land reclaimed by the agency. At current rates of progress the agency is on target to eliminate all the remaining major industrial dereliction by the end of the 1990s. That is a major achievement for Wales. It is important to build on such success. Your Lordships will recall that a Bill was recently approved by this House which has the effect
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of raising the WDA's financial limit, thus providing the agency with the headroom it needs to pursue its tasks in the coming year.
The Secretary of State for Wales has been able to secure increased provision next year and to increase the WDA's gross spending power in 1992–93 to nearly £167 million. That is nearly £7 million more than the current year and is the highest sum ever both in cash and in real terms. That will allow the agency to continue to play a vital role in the revitalisation of the Welsh economy. Welsh Development International, an arm of the WDA, has been instrumental in ensuring that Wales continues to be considered as an ideal location for some of the world's major companies. Wales is now firmly on the business map.
Wales is known as the European base of Sony's TV operations in Europe, of much of Ford's engine manufacture and of Bosch's alternator business. The list could go on. The presence of such major world companies in Wales, and their evident success, give a tremendous boost to the credibility of Welsh companies when they seek to do business abroad. Wales has established an enviable record in attracting international and UK based companies to invest in the Principality. The recent decision by Sony—one of the world's most discerning companies—to carry out a £150 million expansion of its plant in South Wales represented a marvellous voice of confidence. Sony was, however, only one of the many companies to announce inward investment last year. In all, the Principality recorded its highest ever inward investment figures—183 projects from overseas and UK based companies promising over 17,000 new and safeguarded jobs. There are presently over 350 foreign owned companies that are committed to Wales. Currently those firms provide employment for around 65,000 people.
The Government are determined to maintain that momentum. I know the Secretary of State for Wales places great emphasis on the need to continue to attract those high levels of inward investment. I am sure that the shrewd marketing skills available within Wales will ensure that that fine record is maintained.
Inward investment also provides considerable benefits for indigenous industry, providing new business for component and service suppliers. New management techniques have also been introduced to the Welsh industrial scene, particularly by the 40 or so Japanese companies that have set up operations in Wales. It has one of the highest regional concentrations of such companies in Europe. As a consequence Wales has an efficient, quality conscious and wide-ranging industrial base which is able to compete effectively at the highest of international levels.
In recognising the vital importance of securing inward investment projects, it is all too easy to forget the valuable efforts of indigenous industries. The development of our own companies is something we continually strive to foster, both by offering grant assistance as an inducement to expand existing businesses and by providing the necessary economic climate and framework to enable individuals to start up on their own.

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Wales, aided by government policies, has maintained a strong tradition of encouraging small businesses. Indeed there are now over 67,000 more small firms in Wales than was the case in 1981. That represents an increase of some 59 per cent. The contribution that those small, widely diversified and enterprising firms have made to the successful regeneration of the Welsh economy has been invaluable.
As we begin to pull out of the period of recession, Wales continues its success in encouraging home grown companies to expand. The reason for this is quite clear. We have the skills and the infrastructure but, above all, we have a committed workforce. All those factors help to keep Wales in the vanguard when it comes to choosing a location for new and expanding businesses. In 1991 nearly 130 industrial projects, supported by the Welsh Office through regional selective assistance, were announced. They involve investment by companies of a massive £473 million. They promise over 7,100 new jobs and they also safeguard the jobs of 1,300 people already employed. Regional selective assistance of £60 million has been offered to help safeguard those job opportunities.
All of this is great news for the Welsh economy. What is particularly heartening is the extremely diverse nature of the companies involved. They represent the future and show the growing divergence of the Welsh economy. Never again will prosperity be threatened by over-reliance on a few uncompetitive industries.
One of the vital strengths of the Welsh economy and one of the keys to future prosperity lies in having a highly skilled workforce that is ready to make and take opportunities for enterprise and innovation. To achieve this both employers and employees must be committed to continuing training throughout working life.
I know that the Secretary of State for Wales was particularly pleased when, last September, the Prime Minister announced that responsibility for training in Wales would be added to his responsibilities for education and economic development. This becomes effective from April this year and presents an opportunity further to integrate co-operation across the field of training, education and enterprise. Our workforce is the most valuable of resources and we must ensure that all are able to achieve their full potential.
The restructuring of the Welsh economy, the sterling work of the Welsh Development Agency, our success in attracting foreign investment and the development of TECs are just some of the very positive steps taken which have brought Wales into the 1990s in a very competitive position. In 1989 output per employee in manufacturing in Wales was £29,478 compared to the UK figure of £27,279. Since 1985 manufacturing output has increased by 31 per cent. in Wales compared to 13 per cent. for the UK as a whole and total output in production and construction in the third quarter of 1991 was at a level 20.5 per cent. higher than in 1985 compared to an increase in the UK of only 8 per cent.
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Of course we do not rely entirely on the manufacturing industry in Wales. There are many more aspects to the Welsh economy to which in the short time available I have not been able to give the weight they deserve. We now have in place an economy which offers the workforce both opportunity and choice—two elements sadly lacking in past years—and which can sustain itself and respond to today's and tomorrow's challenges.
An example of this new found choice comes from the financial services initiative launched in 1988. It is geared to attract inward investment and further diversify the choice for employment within the Welsh economy. Employment in this sector has increased by some 20 per cent. in recent years. It is to be hoped that the information technology initiative which was launched last year will be equally successful in raising the profile of Wales to companies in this field and further strengthen representation of this fast growing sector.
The Welsh economy has made enormous strides in the development of a dynamic and diverse economic base. The fundamental changes which have been made in a comparatively short space of time are a credit to all those involved. Wales has reaped the benefits of the enormous amount of hard work which has been done in the way in which it has weathered the recession.
The results of that commitment are clearly visible. During the recession our industries in Wales have proved themselves to have the greater staying power which comes from efficiency, up-to-date equipment and a highly skilled workforce. Wales continues to be affected less severely than the UK as a whole and the gap between the UK and Welsh unemployment rates was reduced from 0.9 percentage points to 0.4 percentage points since March 1990. That is all the more remarkable when one considers that the gap in unemployment rates was 2.8 per cent. as recently as July 1985.
I firmly believe that we can now look forward with optimism to an upturn in the economy and to greater success and prosperity ahead. I beg to move for Papers.
3.20 p.m.
Lord Parry: My Lords, one of the great pleasures of this House is that occasionally one is afforded the opportunity to congratulate a comparatively new arrival to the House on his contribution. In this case, as someone who was born and brought up in Pembrokeshire and has lived there for 65 years, it is a particular pleasure to welcome the noble Viscount, Lord St. Davids—whose father was known to us all and whose grandfather used to be known at one time as "that damned old radical, Wilfred Philips"—in the generous terms of this House. However, he will not expect me to follow him entirely in the case he made although, curiously, I can underwrite some of the positive aspects.
A determined effort has been made under successive governments to re-establish the economy of Wales, despite the fact that its basic economy was virtually destroyed by the changing circumstances in which it operated. The noble Viscount referred to the

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past 10 years. I should like to go further back, to the basic piece of research under the general leadership of the current Leader of the Opposition, my noble friend Lord Cledwyn, which made the Wales Tourist Board, the Welsh Development Agency and the Mid Wales board possible, and resulted in a piece of literature entitled Wales—The Way Ahead. If we were to go back to that point and examine the changes that have since taken place we would set the very positive steps which have been taken in the context of the difficulties which beset the area.
The dismantling of the heavy industrial base carried out under various leaderships at considerable pain, even if historically inevitable, was not accompanied by the planning which I consider necessary. If one realises that a basic prop of a nation's economy is being removed it is essential to make positive plans for the long term. Ad hoc-ery—reacting to something which has occurred—is only a short-term solution.
It is true that positive attempts have been made, but we should look at the basis of the problem. I congratulate the noble Viscount on having secured the debate at so difficult a time. In preparation for the debate I searched through earlier documents and up-to-date newspaper reports. I found that the figures which have been researched suggest that because of the dismantling of the coal and steel industries the areas in which mining and steel production took place have suffered a greater loss in earnings than any other area. One might think that that speaks for itself. In fact, John Rigg, who is the director of the regional futures unit of the Henley Centre has produced some relevant figures. Having studied 322 travel-to-work areas throughout Britain he found that the four Welsh travel-to-work areas came bottom of the league in disposable incomes. That is the case now and that situation has existed for some time. Therefore, in terms of the capacity of the people to spend and therefore to help to refuel the economy, which is so vital at this time, Wales is worse placed than any other area in the United Kingdom.
The 1991 figures show that on average in Aberdare disposable income is £105 a week per head; in Merthyr and Rhymney it is £105.60 per week per head; in Pontypridd and the Rhondda it is £106 a week per head; and in Bridgend it is £106.30 a week per head. That compares with £123 a week per head in Cardiff, £122 per head in Aberystwyth and £121 per head in Wrexham. At the top of the league of Britain's travel-to-work areas are Guildford and Aldershot in England, with averages of £168 a week per head. Therefore, despite the progress made under two sets of governments and several Secretaries of State, in Wales today the people are more impoverished in terms of disposable income than those in any other part of Great Britain.
The House will know, because I have said so often enough, that I have the pleasure to be the chairman of the Wales Tourist Board. I believe that I accepted a mandate from two Secretaries of State for Wales—one of whom, the noble Lord, Lord Crickhowell, is present today—to help to promote the tourist trade in
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order to assist the future expansion of the economy in Wales. I have worked as best I know in that capacity in order to achieve that objective. Therefore, this afternoon I should like to speak about the tourism industry.
The tourism industry is firmly related to and embedded in the agricultural industry. I know that my noble friends Lord Morris of Castle Morris and Lord Prys-Davies, and others, will speak about agriculture but I should like to make this point in the context of what I have already said. The hard times on the farms in Wales have been reflected in the local newspapers during this past week. A very graphic set of figures was published in the WALES on Sunday newspaper showing that the net farm income for dairy farming in Wales has fallen by 21 per cent. Net farm income on hill and upland livestock farms has fallen by 25.5 per cent. and the net farm income in dairy and livestock has fallen by 19.9 per cent.
There should be no doubt in this House that the agricultural industry in Wales is perturbed about its potential to contribute to the earning capacity of Wales, and therefore to the earning capacity of Great Britain, as we "come out of the recession". And when will that be? We have received several forecasts each suggesting that it would be in six months' time but we are still in recession. The general expectation, at least across the Atlantic, is that it will continue for at least another year with the economies of the West moving along the bottom rather than rising. Therefore, let us consider what the leaders in Wales are saying now about the contribution of agriculture to that improvement.
In his New Year message Trevor Davies, the chairman of the NFU in Wales, said:
"Undoubtedly of major concern is the impact that the CAP (MacSharry) changes will bring".
I shall not talk about those proposals although others may well do so. He went on to say:
"The current proposals are an improvement but, make no mistake, they will hit right at the heart of Welsh agriculture which depends so heavily upon the livestock sector and yet is comprised of true family farms. There will be limited compensation, but Welsh agriculture will not benefit from the lower feeding stuff prices that are centred to the MacSharry proposals".
Wales will again be handicapped.
I turn immediately to someone with whom my friends opposite—and I call them that in my defence of Wales—might find some more fellow feeling: Anthony Bosanquet, the chairman of the Country Landowners' Association Welsh committee. In his New Year's message he said that two contrasting examples will affect agriculture in Wales:
"Interest rates have fallen significantly over the past year, which must be good news for those with high borrowings".
I am not a dismal Jimmy. I am not only giving the good news, I am giving the other side of the picture. But there is still at the time of writing no settlement in either the GATT or the CAP reform discussions.
He adds, with some optimism on the one hand and realism on the other:
"There are, however, encouraging signs that the government is beginning to realise that the countryside of Wales can only be properly managed and cared for by farmers"—
he adds "and landowners"—

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"and that market forces alone will not allow them to survive to do so.
The reason that the Welsh Development Agency and the other agencies are in being is that they also temper the natural forces of the market with planned policy.
I am rapidly running out of time and I cannot go into detail, but in addition the leader of the Welsh farmers' union—Mr. Parry, who is no relation of mine so I do not have to apologise—said that,
"the grinding unrelenting struggle to survive would continue to permeate all sectors of the industry".
Tourism is worth over £1.5 billion for the economy of Wales and, ultimately, for the economy of Great Britain. It is estimated that it supports 95,000 jobs. When analysed and built into the economic factors its effect is quite astonishing.
I have with me a copy of the Western Telegraph published today. It is the newspaper of West Wales. Whatever the difficulties and constraints that I have mentioned, this edition of the Western Telegraph is the saddest that I have known in my history. The closure of Brawdy air base and the closure of Trecwn mining depot have added to some of those problems.
3.31 p.m.
Lord Chalfont: My Lords, I am sure that the whole House is grateful to the noble Viscount for initiating the debate. It is appropriate for reasons additional to those which he and the noble Lord, Lord Parry, have put forward. At a time when there is a great tendency towards centralisation in our lives, especially in the context of the European Community, it is right that we should underline the importance of what I might call cultural nationalism: the importance of small countries cherishing their language, customs, national traditions and even their national prosperity. In the somewhat Anglo-centric kingdom in which we live, not much attention is lavished on what is sometimes called the Celtic fringe, where much of what is richest and best in our cultural heritage was born and still survives.
Wales is especially rich in history and tradition. It is a country which has nurtured such men as Caradog—in fact he was not a Welshman but was born outside Wales, spoke the Brythonic language and became one of the great Welsh heroes—Taliesin, Owain Glyndwr, Llwewllyn ap Gruffydd and even, I suppose, although it may offend some people, the Red Bandits of Mawddwy. People who can look back on such a history can scarcely be without a sense of national pride. More recently, we can look upon such people as Robert Graves and R.S. Thomas, not to mention Gareth Edwards and Barry John, if I may mention them in this context.
It would be impossible for a country like ours to be without a sense of history. The late Gwynfor Evans in his wonderful book Aros Mae—translated into English as Land of my Fathers—quoted from a Frenchman, Jacques Chevalier, as follows:
"Wales was the only nation in Europe in the tenth and eleventh centuries which had a national literature apart from an imperial one in Latin. The people of Wales were the most civilised and intelligent of the age".
That is, of course, still so.
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I should like to say a few words on the subject on which the noble Lord, Lord Parry, embarked, because we are talking about the economy. I want to speak of the tourist industry, to which the noble Lord has given such distinguished and invaluable service. As he said, the tourist industry provides employment for about 100,000 people representing 9 per cent. of all the employment in the Principality of Wales, a much higher share of total employment than anywhere else in the United Kingdom. There were 8.5 million tourist trips from the rest of the United Kingdom to Wales in 1990 and 680,000 visitors came from overseas. As the noble Lord said, that represents altogether an expenditure of well over £1 billion on tourism.
For a Welshman at any rate, that is not surprising. By anybody's standards, Wales is scenically one of the most beautiful places on earth. Whether one is in the Gower peninsula in the south, the Brecon Beacons, the gently undulating country of Gwent on the west bank of the River Wye where I was born, or further north in the Mawddach estuary which runs from Dolgellau to Barmouth with Cadair Idris to the south and the hills of Meirionydd to the north, one finds some of the most beautiful scenery in the world. Further north, one comes to Snowdon and the Lleyn peninsula, the great sweep of Cardigan Bay and the great castle of Harlech, which has played such an enormous part in the history of our country. I should not forget, lest I incur the wrath of the noble Lord, Lord Hooson, the Vale of Llangollen, one of the most smiling and beautiful valleys in Wales or any other country where for many years I was president of the international eisteddfod—a role that is now filled by the noble Lord with greater distinction than I could ever bring to it.
Yet, despite all that incredible and unique physical beauty, the tourist industry in Wales, flourishing as it is, is a relatively recent phenomenon. Its growth and success have been mainly due to the efforts of the Wales Tourist Board, with which I have had much to do in my years as president in Llangollen. I have learned to admire enormously the impact that it has made on the tourist industry in Wales. Until comparatively recently I suppose it was possible to say —indeed many Englishmen and other foreigners did so—that Wales was gastronomically a desert. Apparently, in Wales, all that they ever ate was lamb, laver bread and toasted cheese. That was not entirely true. Perhaps, in parenthesis, I might say that toasted cheese came to be called by the English "Welsh rabbit" because they believed that the Welsh were too poor to eat rabbit and therefore ate toasted cheese instead. Perhaps I may also warn Englishmen against the terrible mistake of calling it "Welsh rarebit", an appalling Essex-type aberration which has passed into the English language. If it is anything, it is "Welsh rabbit" and is in fact toasted cheese.
Today, Wales is liberally endowed with country house hotels, inns and farmhouses where the standard of food, comfort and croeso (welcome) is as high as anywhere in the smaller countries of the world. More recently, there have been even greater improvements. In June 1988, the Wales Tourist Board initiated its five-year plan, part of which inaugurated an annual

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inspection of all types of accommodation in Wales to ensure that they were up to standard. The Wales Tourist Board is now assisted by having the ability, as Scotland has, to offer grant aid for capital improvements.
However, there were—I say "were" because only recently has the situation changed—two great difficulties. One was an inadequate budget to promote Welsh tourism. The other was the fact that the Wales Tourist Board was forbidden to market Wales overseas because it was alleged to be in some kind of competition with the British Tourist Authority. I am glad to say that the Government have moved on both those issues in recent months and have announced a £2.5 million increase in planning expenditure. They have said also that they will support a Private Member's Bill in the House of Commons to give the Wales Tourist Board overseas marketing powers.
There are still some problems. However, I am sure that the Wales Tourist Board, together with the Welsh Office, the Welsh Development Agency, local authorities and private enterprise will solve them. The future of the Welsh economy lies in partnership and all those bodies operating together and in harmony. Already, considerable efforts are being made. For example, Newport Borough Council—one of two local authorities in the United Kingdom named by the Audit Commission as being in the forefront of effective economic development strategy—is a model for the type of thing that can be done to promote the economy and development of Wales as a whole. I do not refer solely to the tourist industry.
I would not be as gloomy as the noble Lord, Lord Parry, about the economy of Wales. The Welsh Office is to be congratulated on the role that it has played, together with the other elements in Wales that I have named as being important. I encourage the Government to continue in that vein. Perhaps I may remind the noble Baroness, Lady Trumpington, that the Welsh are a remarkable, unique and unpredictable people. I remind her of the time when the England rugby team, in preparation for the coming season, decided that it would have 15 cardboard cut-outs of rugby players in scarlet Welsh jerseys and white shorts set up on the pitch at Twickenham to prepare them for the game ahead. After their first practice, someone asked the English coach, "How did it go?" He said, "Not very well. Wales won by 14 points to six." A country that is capable of that is capable of almost anything.
3.42 p.m.
Lord Crickhowell: My Lords, I congratulate my noble friend Lord St. Davids upon initiating the debate. If I do not exactly thank him, it is because I have taken part in too many debates on the Welsh economy to want to add to the total.
When I took over in 1979 as Secretary of State for Wales, Wales was in a state of deep depression. That was as much psychological as it was economic or social. There was widespread pessimism and that self-defeating lack of confidence revealed itself in the begging bowl approach that was based on the
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expectation that the Government or the English taxpayer had a duty to come to the rescue. All that was the not surprising consequence of the fact that for the greater part of the century, the old industries on which Wales had depended had been in decline. That formidable basic handicap was magnified by the same industrial inefficiency and union attitudes as then bedevilled the British economy as a whole. The great steelworks at Llanwern and Port Talbot were grossly overmanned and uncompetitive.
The most striking feature of the Welsh scene today is not the diversity and growing strength of the economic base, remarkable though that is, so much as the transformation in attitude and the pride and confidence now evident in Wales. The Welsh workforce now looks the world in the face and says that it can compete with the very best—indigenous just as much as foreign. Llanwern and Port Talbot are now among the most competitive steel plants anywhere. The continued volume of overseas investment is evidence of the reputation that Wales has established in Japan, the United States and Europe.
I believe that I am entitled to say that an important factor has been the firm and consistent policies pursued by this Government and its three Secretaries of State. During my first few years, the going was very rough, but for most of my time in office I, like Mr. Peter Walker, was able to boast that Wales with 5 per cent. of the population was attracting a quite disproportionate share of inward investment into the United Kingdom. It was a great satisfaction to me to see unemployment falling sharply before I left.
The firm foundations which we laid in those difficult years in the early 1980s were built on and developed with energy and flair by Peter Walker, who did so much to expand the first Valleys Initiative and to encourage the widening of economic activity. Now, under David Hunt's leadership, the investment has continued to take place and even during a period of world recession—my noble friend Lord St. Davids reminded us of this—the inward investment performance in 1991 was particularly remarkable. Almost equally remarkable has been the contribution throughout all those years, under three Secretaries of State, of Sir Wyn Roberts.
Unemployment is certainly still too high but the rise has been much less severe than in the last recession despite the rapid closure of coal mines. The figure was 121,600 in January compared with 170,000 in January 1986. The number of long-term unemployed is less than half that figure.
The nature of the fundamental change in the past dozen years is perhaps not sufficiently understood. I have spoken of the change of attitude. However, there is now a quite different economy. While steel remains important, coal has virtually gone and there is now a widely diversified manufacturing base which includes over 300 overseas controlled companies. As important, there has been a reversal of the drain of professional and financial firms out of Wales about which I spoke with concern in a speech to the Cardiff Business Club a few years ago.

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Of course some serious problems remain with us. The noble Lord, Lord Parry, spoke of the difficulties confronting agriculture and, understandably too, the consequences of the closure of military establishments as a result of the remarkable changes in the world affect my former constituency and his home area of Pembrokeshire.
The transformation of the Welsh economy has been underpinned by a transformation and vast improvement in the infrastructure and by equally significant improvements to the environment. The opening of the Conwy Tunnel in the autumn put us on the final lap towards the completion of the A.55 dual carriageway that links North Wales with the industrial heart of Britain. Similarly, the last gap in the M.4 is being filled near Swansea, and the second Severn crossing will in about five years provide the transport security that the South Wales economy requires.
Noble Lords from outside Wales may not fully appreciate another feature of that South Wales economy, or the scale of another crucial transformation that has occurred in recent years. Cardiff is hardly recognisable as the city it was two decades ago. For long blessed with an exceptionally beautiful civic centre it now presents a thriving and successful face in its shopping centre, its extensive redevelopment programme, culturally in theatre, music and the arts, and the vast reconstruction taking place in the old dock and steelworks areas of south Cardiff. I do not overlook equally striking improvements that have been taking place in Swansea and Newport, but Cardiff has a particular significance for the wider economy. The capital city, with a population of about 300,000, is linked to the valley communities, with a population of perhaps 1.5 million, by a network of trains, and now roads, which have vastly improved access. All that means that there is an integrated economic area in which communities are no longer isolated and wholly dependent on local firms or the local pit. That is why the regeneration of South Cardiff and Cardiff Bay is almost as significant for the valleys as it is for the city itself.
I referred earlier in a single sentence to the improvement of both the infrastructure and the environment. It is appropriate that they should go together. The improvement in the environment reflects the economic improvement and it is a crucial instrument in its achievement. The environmental change is visible; for instance, in the success of the derelict land programme, since the events at Aberfan, in improvements in the housing stock in places such as the Rhondda Valley and, perhaps most strikingly, in Ebbw Vale, where the National Garden Festival will open in May.
All that, the removal of urban industrial squalor and the excellence and adaptability of the labour force are the reasons why Wales is proving to be such an attractive location for overseas investors. The Welsh economy is doing well because Wales is becoming an increasingly attractive place to live, work and play, not only for those of us fortunate to live in its beautiful countryside.
I was once criticised by the Daily Mirror for saying that if you want to attract industry to an area one of
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the first things you must do is to build a golf course. I shall say that again—but it is not only golf courses that are necessary. My predecessor was absolutely right in providing the funds to help to build the St. David's Hall, one of the best concert halls in the country. I believe that, for artistic and economic reasons, I was right to find the funds to build the major extension now under way at the National Museum of Wales. The local authorities which are doing so are right to provide new homes for music and large-scale theatre in North Wales. I hope that in due course we shall have the opera house which Welsh National Opera and other companies deserve. That is as important for the economy as it is for those who love opera.
The arts are important in themselves, but if we seek to create economic health we must also create a cultural and social environment that is attractive. I believe that the 1980s and 1990s will be seen as a period of historic change when the long agony of depression and decline ended and when Wales, with an increasingly strong and diverse economy, entered a new period of prosperity and cultural richness. Dare I be so optimistic as to suggest that from time to time it might also hope to enjoy success on the rugby field?
3.52 p.m.
Lord Gibson-Watt: My Lords, we are grateful to my noble friend Lord St. Davids not only for initiating the debate but for his excellent speech and the many statistics that he gave. Anyone who has spent most of his life in Wales will be aware of the economic change that has been referred to. It has happened in many countries—nothing stands still.
Before the war the Welsh coal industry was huge and one cannot believe that now not a single colliery is open in the Rhondda Valley. There have been traumatic changes in employment in the steel and coal industries. Successive governments have attempted to tackle the problems and to make the changes as easy as possible for the Welsh people. We must not underestimate their task.
I remember well my noble friend Lord Thomas of Gwydir, who I see in his place, attracting a great deal of industry to Wales, as other Secretaries of State have done. I remember opening one of the first Japanese factories on his behalf when I served under him at the Welsh Office.
It is invidious to argue which of the various Secretaries of State has done best in the various fields that we are discussing. I pay tribute to the three incumbents since 1979 for attracting industry to Wales, for their various initiatives and for their strong support of the Welsh Development Agency and the Rural Development Board. I must not forget the Cardiff Bay development which my noble friend Lord Crickhowell initiated and which his two successors have pursued. While waiting for my train this morning on Newport station I saw a hoarding which read, "Cardiff Bay Development. It will produce 30,000 jobs". All such developments take a long time but those figures could be important to the people of South Wales.

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In one of the recent debates in the Welsh Grand Committee on 11 th December the Secretary of State referred to an additional £29 million spent on the rural initiative and to a total extra spending for 1992 of more than £½ billion. The figures speak for themselves.
One of the important bodies is the Holyhead Joint Venture Board, with a budget of £5.6 million. That is a good example of the co-ordination that exists in Wales among the WDA, Gwynedd county council, the Ynys Moôn borough council, the Holyhead town council, the Sealink Stena line (which has unfortunately announced many job losses) and the Holyhead Opportunities Trust. That is typical of the co-ordination that exists between central and local government.
Not all the small firms supported by the WDA and RDB have survived. In a world recession an economic problem in the United States or Japan acts like a pebble dropped into a pool; the ripples spread everywhere, even to the smaller struggling firm in Wales. In areas with little industry the loss of one firm considerably increases the rate of unemployment. The RDB and WDA exist to help solve those problems.
I wish to underline the problems of the Welsh farmers. As chairman of the Council of the Rural Welsh Agricultural Society I am acutely aware of what is happening. The continuing decline in the agricultural workforce and the amalgamation of small firms are sad facts. For most of us who live on the land the future is at best pretty obscure. At present the cattle and sheep sectors are supported by grants under the CAP. The result of the GATT negotiations are bound to affect what happens to farmers all over Britain and Europe. This morning's newspapers make it clear that there is a great deal more to come from that direction.
I say to the Government that somehow or other farmers must be kept on the land. One may ask why farmers are different to any other industrial workers. They are no more important but they carry out a specific job over and above looking after their sheep and cattle. Many people come to take holidays in Wales under the aegis of the tourist board. They come to a fine countryside. If there were no sheep and cattle the land would revert to scrub and gorse and broom. If that happened decades of good husbandry would be lost; we should depend on other countries for our meat and the countryside which is so much enjoyed would become a wilderness.
No one is more aware of that than the Secretary of State, the Minister of Agriculture and my noble friend Lady Trumpington, who has been so assiduous in her visits to and interest in Wales. I make no apology for underlining the importance of family farming to all Ministers concerned, whether it applies to Wales or areas this side of Offa's Dike.
I wish to refer to one matter which is perhaps more contentious than other matters dealt with this afternoon. It could in itself in the long term affect the Welsh economy if it ever came about; that is, the idea of a Welsh assembly. I understand that that policy is supported by Plaid Cymru and by the Liberal Democrats. It would be expensive to run and could be
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a source of friction for the Welsh Office. It could well damage the present economic set-up. Only 12 years ago in a referendum the Welsh people turned down an assembly by three-and-two-thirds to one. In my view they would do so today because the same arguments still apply.
Whatever the result of the arguments on local government reform—and there will be many such arguments in the future—it will be far less damaging to the Welsh economy than an assembly would be. As regards local government reform, I hope that Ministers have not overlooked the expense and disruption that that causes. We had all that in 1972.
4.1 p.m.
Lord Morris of Castle Morris: My Lords, first, I thank the noble Viscount, Lord St. Davids for giving us the opportunity to discuss this subject. I begin by congratulating Her Majesty's Government on the unquestionable success, over a number of years, of their inward investment policy in Wales. Without venturing into the contentious territory of which Secretary of State can claim credit for which achievement, perhaps I may say that each of them has contributed to a remarkable regeneration of industry in Wales. However, we need a decision on the proposed oil and gas terminal at the Point of Ayr. I hope that the Government appreciate the urgency of that matter and that the noble Baroness, Lady Trumpington, will be able to bring us good news.
However, it is an inevitable consequence of geography that the majority of that new prosperity is concentrated in two places; namely, North East Wales and the so called "M.4 corridor". Between those two areas there is very little new industry. Indeed, there is very little industry. Between Clwyd and Carmarthen we grow a great deal of grass and, as I hope to show, herbage brings headaches. The economy of rural Wales—Gwynedd, Dyfed, Powys and parts of Clwyd —is overwhelmingly agricultural and particularly dependent on sheep, beef and milk so that flexibility is difficult and diversification is almost impossible.
In those areas there are immediate fears and problems. Restrictions on sales into intervention of beef create difficulties for livestock farmers particularly in Wales because diversification is so difficult. The tourist market for jolly farmhouse holidays is almost saturated and not many golf courses can be built on Plynlimon or in the Great Bog of Tregaron. Welsh dairy farmers are equally apprehensive. The milk quota system, troublesome though it is, has not been vastly unfair to the Welsh farmer but he cannot expand in any way and he has difficulties in selling his quota. Even if he succeeds, what does he do with his land?
Welsh dairy farmers have a great interest in the future of the Milk Marketing Board and the sooner that matter is resolved the better. Some seem ready to welcome the voluntary co-operative society for England and Wales; others, especially those with small herds, are conscious of the protection afforded by the statutory body and suspect that they may be forced into that new voluntary society which will soon be controlled by, and serve the interests of, the very

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large producers, very few of whom live in or care about Wales. I hope that the noble Baroness will be able to clarify the position as regards the Milk Marketing Board when she replies.
However, the most quantifiable, remarkable, measurable suffering in Welsh agriculture must be that of the hill and upland sheep farmers. Not only has the market price of lamb been inordinately low for the past two years and more but the farmers are now faced with the abolition of the variable premium system and are forced to recalculate on the basis of a limited number of breeding ewes. According to the recent Farm Business Survey the average income of Welsh hill and upland less favoured area livestock farmers in the year ending February 1991 was £7,561, or £144 per week; that is £4 per week higher than the Child Poverty Action Group's definition of poverty. The picture would be far worse without the large rise in support payments. To those farmers in the hill areas, one thing seems certain: next year will be better than the year after.
The future looks grim unless something is done. Peter Midmore of the agricultural economics department at the University College of Wales, Aberystwyth, reporting on the prospect for farmers in Dyfed in the next 10 years, said:
"Reduced market returns will force many farmers off the land unless they can diversify their businesses or find off-farm work. The scope for the former is limited, and, in the context of general decline in agricultural output, fewer jobs in industries allied to, or dependent upon agriculture, will be available. Without policies to minimise these effects, 11,000 jobs and income worth £31 million in the rural economy will be lost".
I hope that the noble Baroness will be able to give us news of such policies, although she will find the sheep farmers of the Cambrian mountains hard to convince.
Poverty and depression in agriculture is a chronic problem in Wales. The sudden, spectacular and acute damage to the economy in West Wales has been caused by the recent defence cuts. I have been privileged to discuss them with the chief executive of the Preseli/Pembrokeshire District Council. If we accept in every case the lowest estimate for unemployment figures, the closure of RNAD Milford Haven, RNAD Trecwn and the downgrading of RAF Brawdy mean that losses of 735 jobs will have been announced in the past nine months in the defence industry alone. Add to that the consequential loss to the local economy, variously estimated as anything from £20 million to £30 million, and the devastating impact on local education services, where more than 250 children of service personnel at RAF Brawdy alone are in local schools, and your Lordships can begin to see the price of the peace dividend to the people of Pembrokeshire.
The Government have responded by announcing the setting up of a task force with £2.2 million—£1 million of which will come from the Welsh Development Agency—to alleviate local distress. It would be helpful if the noble Baroness could tell the House how much of that is new money. For example, is the £1 million from the WDA free money or is it money already committed through existing rural initiatives? Will the task force members be working full time or are they people already in government
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employment seconded to that project for a limited period as part of their other work? For a long time Pembrokeshire has been heavily dependent on the defence industry. Those cuts imposed disproportionate distress. I assure your Lordships that in West Wales the remembrance of them is grievous unto us, the burden of them is intolerable.
As in agriculture, diversification is virtually impossible. The trained workforce cannot be redeployed into tourism, fishing or the ferry terminal. Job vacancies simply do not exist. Of course, we welcome the recent announcement by the Secretary of State for Defence of the 600 new jobs at RAF St. Athan. That is good news for South Glamorgan but cold comfort in Fishguard—120 miles away. The unemployed at Trecwn will find it impossible to commute to St. Athan, even if they were all prepared to "get on their bikes". We must know what plans the Government have for the rapid retraining of those who will soon find themselves without employment.
The weakness of the infrastructure in rural Wales contributes to so many of its problems. When we debated the Welsh economy in your Lordships' House last year, I drew attention to shortcomings in rail services, road conditions and bus services. Research at St. David's University College, Lampeter, has demonstrated that deregulation has not improved bus services one iota. More recent research there, under Professor Paul Cloke, on the implications of information technology for North Dyfed has highlighted the importance of infrastructure in rural Wales. Cloke says that,
"public and private agencies in North Dyfed must foster a degree of technological advance in the local economy. This process of 'fostering' must be deliberate and selective, because modern technology will not develop 'naturally' in a 'remote' rural area like north Dyfed".
We still await the provision of a decent road between Carmarthen and Aberystwyth. Year after year the Dyfed County Council, the WDA and the DBRW call for it. Year after year the Welsh Office refuses it for lack of money. Soon they will be able to pray in aid the lack of demand fallacy—demand will dwindle because everyone will have given up hope and gone home.
If rural Wales is not to rot there must be opportunities for diversification in agriculture, the defence industry and in the provision of infrastructure. It is the responsibility of government to create those opportunities. The workforce, as we have all said, is ready and eager for change. As St. Paul put it, "there are diversities of gifts". There must also be diversities of opportunity.
4.10 p.m.
Lord Jenkin of Roding: My Lords, this has been a good and positive debate and we are all indebted to my noble friend Lord St. Davids for giving us the opportunity to discuss the economic position in Wales. I should perhaps ask the indulgence of the House for I am the first speaker who does not actually have his home in Wales. However, I bear a Welsh name which has been traced back several centuries to North Wales, where it is said that my family lost a battle and had to get out quick.

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I am a frequent visitor to Wales and in various roles have taken a close interest in the Welsh economy, not least in the process of inward investment. As a number of noble Lords have already said, Wales has a remarkable record in that regard. It is a story that needs to go on being told, because of what it represents in terms of the rest of the world's confidence in Wales. The noble Lords, Lord Parry and Lord Morris of Castle Morris, are entitled to draw attention to some of the drawbacks affecting the economy in Wales and some of the areas of difficulty. However, my noble friend Lord Crickhowell put his finger on the point when he said that there has been a major transformation of morale in Wales. I believe that to be correct.
Lord Parry: My Lords, perhaps the noble Lord will give way for a moment; I realise the time constraints. Nothing from this side of the House denied what he says and in fact we specifically underlined it.
Lord Jenkin of Roding: My Lords, indeed. I was about to say that the noble Lord, Lord Morris of Castle Morris, started his speech with words which we could all endorse. However, it is worth looking a little deeper. There have been criticisms about screwdriver operations and suchlike, which it is right to answer. I have had connections with Japan over the past few years and shall say something about that.
We start from the proposition that the United Kingdom, unlike some of our Continental neighbours, has always extended an open welcome to inward investment. It brings jobs, technology, new systems of management, investment and exports and can often save imports. Wales has certainly benefited from that. My noble friend Lord St. Davids gave a number of figures. It is worth putting on record that since April 1983 up to October last year over 800 overseas projects were secured for Wales, bringing £4 billion capital investment and around 90,000 jobs created or secured in the Principality. By any standards that is a remarkable achievement.
Some of the existing employment by overseas companies has been the result of acquisition. But much of it has been new activity, businesses and factories. My noble friends Lord Crickhowell and Lord St. Davids pointed to the astonishing success of the process last year with 183 projects and 17,000 jobs either safeguarded or created. Today there are some 300 foreign owned companies in Wales. Wales has rather less than 5 per cent. of the population of the United Kingdom. It has secured between 20 per cent. and 25 per cent. of the total inward overseas investment. That is a remarkable tribute to the Welsh Office and to Welsh Development International, which played such a major part in it.
The biggest single group are the United States and Canadian companies, of which there are over 130; a similar number comes from Europe including big ones like Bosch, which has been referred to. Another is UP News, the big paper mill at Shotton, which has been a major shot in the arm for that part of Wales. There are now around 40 Japanese companies and it is about that I wish to say a few words.
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Wales has the highest concentration of Japanese firms in Europe. But one is entitled to ask two questions. Why, and what is the effect? "Why" is well established. I was pleased to read in the Liverpool Daily Post last year an article by the managing director of Sharp UK, which is located at Wrexham. He said, talking of his Wrexham factory:
"The workforce now stands at 1,150 and we are convinced that their willingness and adaptability is a major factor in the company's success".
He continued further down, which was music to all Welshmen:
"I can strongly recommend North Wales to any industrialist contemplating new opportunities".
That is the first point. It is the people who have attracted the investment. Secondly, to the Japanese, English is their second language in schools and many of the younger Japanese speak it extremely well. Perhaps the biggest intangible—I echo the noble Lord, Lord Chalfont —is the welcome which the people of Wales give to overseas investors, not just to the tourists but to those who settle there. There are also the more tangible benefits of access to the European market, various systems of grants that are available and, as my noble friends pointed out, excellent transport links to the ports and airports. Perhaps I can make one point to my noble friend on the Front Bench. I hope that the Government will support those who are putting forward the Severn-side airport near Newport as a major international airport. The plans are now being brought forward, finance is being sought and it has considerable potential to relieve some of the pressure on Heathrow.
The Government have also made great efforts to bridge the cultural divide between the indigenous population and the Japanese. The Welsh Office has given significant support to Japanese studies in Welsh schools. My right honourable friend Peter Walker was successful in securing a significant part of what has been called the "Parker" money for foreign studies by increasing the resources for Cardiff University. The recent Japan Festival had a lively, active and innovative committee in Wales. It brought Japanese culture to a large number of Welsh people which was much welcomed. All that creates a climate which makes Wales, for the Japanese companies seeking a European location, an attractive country in which to locate.
What about the charge of screwdriver jobs? I should like to quote what the former chief executive of the Welsh Development Agency said in a conference last year. He said:
"I think this is unfair. It is, I believe, almost inevitable that when one establishes a manufacturing presence in a distant continent you are going to start with fairly mundane assembly and work up, as confidence gains, to more sophisticated activities. This is exactly what is happening—perhaps not as quickly as we would like. Sony have been established at Bridgend for some 17 years and have gone from very plain assembly through manufacture of increasingly sophisticated components and now in a small way to the development of research".
He went on to quote the example of Race Electronics,
"which is a smallish components producer based in South Wales. They first broke into selling to the Japanese through selling circuit boards to Matsushita and Sharp. Now they

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have been able to make a link with the major trading company C. Itoh and are developing the business of selling components back to Japan".
Could there possibly be a better commendation than that?
I am indebted to Dr. Max Munday of the Japanese Management Research Unit, Cardiff Business School. His research has thrown much light on the impact on supplier firms of the arrival of the Japanese companies. Time does not allow me to mention more than a couple. One can take the case of Otford EPS in Newbridge. It is a large expanded polystyrene packaging company and began to sell to the Japanese companies. It was eventually able to build a new factory at Crumlyn near Newport, supplying Sony with high quality plastics mouldings using a novel process. It is now not only supplying Sony, but Hitachi at Hirwaun. Radon Controls was also a small company in Caerphilly with the number of employees in single figures. Following a management change it embarked on a project to supply remote control units for TV sets to Sony. That small company discovered a very steep learning curve in order to be able to supply the Japanese companies, with their "just-in-time philosophy" and wanting everything bang on time. Some of the comments that were made by the managing director bear repetition, particularly when he said:
"The system is geared up, and eventually you get used to being in the 400 mph lane, and you get used to contingencies".
These developments have been of enormous benefit to Wales and are continuing to be so. The Welsh people deserve every possible congratulation on the way in which they have made the most of these economic opportunities. They are immensely valuable and they have brought hope and confidence.
4.20 p.m.
Lord Thomas of Gwydir: My Lords, my noble friend Lord Jenkin is absolutely right. This has been a very positive debate. We are grateful to my noble friend Lord St. Davids for having not only initiated it but also for the admirable speech that he made. I am also delighted to see the noble Lord, Lord Cledwyn of Penrhos, here. It is very good of him to attend because he is summing up for the Opposition in the two debates that follow. I am delighted to see him. I am reminded that it is just over 40 years since he and I became Members of Parliament. We had adjoining constituencies. The noble Lord, Lord Cledwyn, did slightly better than I did. I had a majority of 583 votes and, if I remember rightly, he had a majority of 595.
Subsequently, both of us became Secretaries of State for Wales. I wish to pay tribute to the part that he played during that time. My noble friend Lord Gibson-Watt was right: it is invidious to try to select different Secretaries of State for the efforts that they put in. The noble Lord, Lord Parry, mentioned how each government had made a determined effort to try to come to terms with the problems and difficulties in Wales.
I know that the noble Lord, Lord Cledwyn, will agree that since we became Members of Parliament 40 years ago, an enormous and welcome transformation has taken place in Wales. A great deal of praise can be
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given to many people for the way in which that transformation has been effected. Sometimes change has been slower than it should have been; at other times progress was affected by the question of resources. Nevertheless, there was a determination on everybody's part, not only Ministers but also Members of Parliament for Wales, that something had to be done.
The picture given by my noble friend Lord St. Davids is a very true one. It has been a remarkable story. It is important in Wales that the Government should be active. Some people believe that one should diminish government activity. However, in Wales it is absolutely essential, in the restructuring of the economy, for the Government to play their full part. That is precisely what has been happening for some time. My noble friend Lord St. Davids mentioned the agencies of government and in particular the Welsh Development Agency. That agency was brought into being by a Labour Government. At that time one had a certain degree of concern as to whether it was what was needed.
The Secretaries of State who followed, such as my noble friend Lord Crickhowell and his two successors, made full use of that agency and of all the other associated agencies. They have played an enormous part in the great transformation and restructuring that has taken place in the Welsh economy. I know that we are all very proud of that. The major contribution which governments have made over the years is in roads and communications. When the noble Lord, Lord Cledwyn, and I first became Members of Parliament, North Wales was practically cut off from England. One could travel only down a narrow road, almost a lane, with traffic being held up all the time. There was a suspension bridge over the Conwy which only took single-line traffic. There was one road bridge to Anglesey. Now one sees the tremendous transformation brought about by the A.55. A wonderful expressway runs through North Wales. There is a new tunnel under the Conwy. It is an excellent road running all the way from Chester to Bangor which will be of enormous importance to North Wales.
When the noble Lord and I first became Members of Parliament there was no motorway in South Wales and no bridge over the Severn. Now we are to have two bridges. The M.4 motorway has been of enormous importance to South Wales. Those of us here who have been Secretary of State for Wales had a part to play in the creation of that road. What happens of course is that one does all the hard work, eventually decides where the motorway is to go, meets all the deputations for and against, and then, about five years to 10 years later, a successor opens up the motorway that one first thought of. But that is how it is in government. In a similar manner, when I became Secretary of State, I inherited the derelict land unit which was started by the noble Lord, Lord Cledwyn. That unit has now been improved. My noble friend Lord St. Davids was speaking about derelict land clearance. Enormous activity has taken place over the past few years which has transformed so many parts of Wales and its economy.

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I have spoken for seven minutes. I wish to follow up something which my noble friend Lord Gibson-Watt said. I have enormous respect for the Welsh Office and for the office of Secretary of State for Wales. Their contribution to Wales is of enormous importance. The Welsh Office is different from any other department. Those who work there are closely in touch with people in Wales. The Secretary of State holds very many responsibilities. He is approachable. It is very important that one should appreciate what an effective institution that office is. The Secretary of State is the legitimate executive authority for government policy in Wales. When he goes abroad he is thought of in those terms. He speaks with authority for Wales. That office has brought enormous benefits over the past few years.
What concerns me is that the policies of the Opposition parties are likely to diminish that authority. I believe that may well be to the detriment of the economy of Wales. I am talking about the proposed constitutional changes. Each of the Opposition parties is proposing an elected Welsh assembly. The Liberal Democrats and Plaid Cymru propose an assembly which is tenable because it would have tax-raising powers and a measure of legislative and executive independence from Westminster. However, what concerns me is the Labour Party policy. The only information I can find is from a document called The Future of Local Government in Wales. I am delighted therefore that the noble Lord, Lords Prys-Davies, is to wind up the debate. The House would appreciate an explanation of what is intended. The Labour Party is the biggest political party in Wales. What does its policy mean?
I am sorry; I see that my 10 minutes is up. All I can ask is: is the Labour Party suggesting that there should be an executive talking shop unable to raise a penny in revenue and under the financial bondage of the Welsh Secretary? Or is it suggested that Wales should be relegated to being just a region of England? Is that what is intended? It is a recipe for conflict, for deadlock and for economic disaster. I know that the House would appreciate the noble Lord, Lord Prys-Davies, explaining exactly what is intended.
4.32 p.m.
Lord Stanley of Alderley: My Lords, my noble friend's Motion this afternoon has made me try to think about the problems confronting Wales. As all noble Lords know, thinking is a dangerous form of pastime. Rather like marriage, it should not be undertaken lightly or unadvisedly, which of course is exactly what I intend to avoid this afternoon because I plan to concentrate my remarks on the problems facing North Wales, and in particular agriculture and Holyhead. I think that all noble Lords know that they pose possibly the most intractable problems in the Principality.
Over the years, governments—and I must go back further than any other noble Lord—and particularly the Liberal governments in the last century, have done a lot for Wales. The Labour ones, under the influence of my neighbour the noble Lord, Lord Cledwyn,
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contributed a great deal of encouragement to Wales too. In the last century the Liberal Party brought the railway and the ferry to Holyhead. The Labour Government brought industry to Anglesey—Anglesey Aluminium being an example. Recently, as has been mentioned by my noble friends, the Government have vastly improved the infrastructure with the A.55 and the two bridges crossing the Menai Strait. I agree with my noble friend Lord Thomas that all governments have done their bit. Being a farmer, of course I have to say that I hate having to admit that.
However, despite all this, the area remains economically depressed. Holyhead and Amlwch are in a desperate state. Morale is sadly low, which, as my noble friend Lord Jenkin said, does not help matters. I ask myself, why is this so? So far as Holyhead is concerned it is not helped by a stagnant Irish economy affecting the port, aided and abetted, I am sorry to say, by restrictive union practices on the boats. It is not helped by being at the end of the line and with too many tiers of government. I am delighted to hear of my right honourable friend's suggestion that the county council should be abolished and an advisory, as opposed to an elected, council for Wales set up. As a North Walian, I have to say that, if there was an elected council, heaven help North Wales because it would be entirely dominated by those people in South Wales.
The more change and tiers of government the worse for places such as Holyhead which are far from the centre. Help is needed for Holyhead, and the Government are certainly giving that. My former company commander, the noble Lord, Lord Gibson-Watt, pointed out what they are doing there. But I am sorry that the report on the town commissioned by the Welsh Development Agency never saw the light of day. I know that bits of it were controversial, but surely that is the whole point of having such reports. I wish my noble friend would try to find where it is, dig it out of the cupboard and have it published.
What must be said of Holyhead is that although it may be short of entrepreneurs it has a really good workforce—ask the people who employ them—provided they are properly led and are not burdened by well-meaning but misguided bureaucrats turning down every suggestion, as it seems to me. Riskily, I mention the last proposal, which was for a marina and which, I am sorry to say, I believe was turned down by the NRA.
A word about agriculture, which in the area has been and still is the major industry, as the noble Lord, Lord Morris of Castle Morris, pointed out. It is in deep depression, but, again, this is a world-wide problem. I believe all the Government can do to help is to provide firm direction. The two most important decisions that farmers need today are, first, as has been mentioned by other noble Lords, resolution of the GATT talks, and quickly; secondly, resolution of the idiotic—I repeat, totally idiotic—MacSharry proposals.
Whatever decisions come out of those talks, there is a need for better direction in agricultural marketing. We have the quantity and the quality in Wales, but we

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market our livestock in particular archaically, mainly through 19th century-style live auctions. We need strong, disciplined co-operatives led not by incompetent farmer directors such as myself but by properly rewarded professionals. If I may say so, my son's grain co-operative in Oxfordshire offers an example of employing professionals that should be copied in Wales.
I come to the conclusion that it is up to us who live in this difficult but, to me and to most people, beautiful area to solve our own economic problems. The first thing we have to decide is whether we really want to. We all say that we do, but do we want to pay the price? Do we really want to push half our workforce off the land? I look at my noble friend Lord Gibson-Watt; do we really want to become more closely involved and integrated with outsiders, be they from Chester or Tokyo, and let them run our businesses? Do we really want less government and less local government and more commercially-led direction? Do we really want more jobs and development if they affect our culture and our countryside?
These are hard decisions to take. They could, and in fact they will, affect the Welsh culture and language. I believe that there is a compromise way forward, but both sides—the materialists and the culturists, if I may call them that —will have to sacrifice some of their sacred cows. With sadness I believe that the bias should be in favour of materialism. I suspect that the noble Lord, Lord Chalfont, would be biased the other way, but if we do not take that view we shall continue to lose our young and progressive sons and daughters and the area will degenerate into a disruptive peasant economy.
4.40 p.m.
Lord Colwyn: My Lords, there should be an advantage in speaking towards the end of a debate, in that one has an opportunity to comment on much of what has been said. It has proved a disadvantage to me this afternoon because, despite having, and being proud of having, a Welsh name, I have to admit to possessing a very limited knowledge of Welsh affairs. Most of the points that I wish to make have already been covered in a far more eloquent manner than I could achieve. If I repeat some points, I hope that my noble friend the Minister will regard them as particularly important.
In fact, in speaking on the economy in Wales, I am distinctly nervous, which I think must stem from a distant recollection of trips to Wales, as a second row forward with Cheltenham Rugby Club in the late 1960s and early 1970s. Those were the days when Cheltenham had a first-class fixture list, and I remember long journeys by bus into the Welsh valleys to play against such teams as Ebbw Vale, Pontypridd, Aberavon, Maesteg and Bridgend—the list was impressive and very intimidating.
It was the practice in those days to prefix the names of the players in the programme according to their status—an "i" for international and a "c" for county. Despite making a couple of appearances for Gloucestershire in some of their minor county
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matches, my name was invariably prefixed by a small coronet. It did not take me long to realise that it was fair game and attracted a certain kudos to be able to lay out an English Peer and I spent many Saturday afternoons lying on the grass being revived with the famous sponge and cold water. I think that being in place to catch a drop-out with eight massive Welsh forwards bearing down on me is still one of the most frightening experiences that I have ever had to endure. However, I am going to resist the temptation to speak about Welsh rugby and instead make a few brief comments on the subject of the debate.
The severe decline in the traditional heavy industries in the 1970s and early 1980s—coal, steel and textiles—hit North Wales particularly hard. The recession of the early 1980s affected the area more than most—to the extent that there is now only one coalmine in the region. Over the past decade a wide range of modern industries have given the economy a much broader base. The average annual inflow of new investment has been around £500 million in recent years and this total is likely to be exceeded in 1991–92. The highly favourable impact of this investment on confidence and the shallowness of the recession probably accounts for much of the recent improvement in performance. As my noble friend Lord Jenkin said, this has been particularly evident by the strong Japanese investment in north-east Wales. Sharp, Brother and Tsuda are all now operating successfully and Toyota's engine plant is currently being built on Deeside. Since 1985, engineering output has increased by more than 40 per cent. compared with less than 25 per cent. in the United Kingdom. Within engineering, output in electrical engineering has increased by nearly 65 per cent. in Wales, but by only 30 per cent. nationally. This, combined with the greater importance of manufacturing in Wales, bodes well for a less painful recovery from recession than once experienced in Wales.
Perhaps I may now stress a point made by my noble friend Lord Thomas. Success in attracting new investment has been dependent on the location and the improved road links, particularly the M.56/A.55 Expressway. The A.55 is now virtually complete to Bangor and the Conwy tunnel was opened very recently. This new road is being promoted by the Secretary of State for Wales as the "Road to Opportunity" and it is hoped that this will encourage investment in western Clwyd and Gwynedd.
This investment in roads is unfortunately not matched by rail investment. Improved rolling stock was introduced recently, but for some reason the frequency of service from Euston to Holyhead was reduced. I think I am correct in saying that all North Wales local authorities take the view that the line should be electrified to provide high speed links from Holyhead—and the Irish Republic—to the Channel tunnel if opportunities for European trade are not to be missed. I hope that my noble friend the Minister will be able to say something on this point.
I am grateful to Bill Breeze, Chief Executive and Town Clerk in Colwyn Bay, who has told me that tourism is still an important part of the economy in resorts such as Rhyl, Colwyn Bay and Llandudno,

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which continue to market fiercely in an increasingly competitive field. In Colwyn Bay particularly, tourism is being supported by increased efforts and some success in developing the resort for commercial purposes.
Wales is fortunate to have its own specialist economic promotion agency—the Welsh Development Agency—which has succeeded in attracting much overseas investment as well as investing its own money in new programmes. The Welsh Tourist Board has also been useful, but has much smaller funds available. The local authorities, especially Clwyd County Council, have led the way with very active promotion and marketing campaigns.
I should like to thank my noble friend Lord St. Davids for giving me an opportunity to renew contact with the area of Wales with which I am associated by name. I have enjoyed the speeches of all those who have taken part in the debate. I look forward to hearing from the Front Bench speakers and shall detain your Lordships no longer.
4.47 p.m.
Lord Hooson: My Lords, the first thing I should do is congratulate the noble Lord, Lord Colwyn, on his fine intact shape. Considering that he played in the second row not only against Ebbw Vale but also against Pontypool, it is a remarkable achievement. I should also like to congratulate the noble Viscount, Lord St. Davids, on initiating this debate and on his eloquent speech. It was perhaps a panegyric on the activities of the Secretary of State and his agencies at the present time. Did I perhaps sense a whiff of a general election in the air? I wonder.
In the short time available to me, I want to make a few comments on certain aspects of the Welsh economy. I do not share the completely optimistic view expressed from the Benches opposite. There has been a remarkable transformation of the Welsh economy from a home resources based economy of coal, steel, slate, shipping, and so on, to the very much more mixed economy that we have today. Noble Lords have traced the transformation over the past 45 years. No doubt many people and institutions have contributed to that transformation. Nevertheless, Wales today has an extremely vulnerable economy. Every one of us is aware of that. The noble Lord, Lord Chalfont, in perhaps the most poetic contribution to our debate, rightly reminded us that Wales is a home to a unique culture and has a special and distinctive way of looking at social life. The noble Lord, Lord Stanley of Alderley, said that he had made a choice in his mind of which, as it were, priority to select in an agricultural context. We must remember that in whatever way the economy is, or is not developed, it affects the social and culture life of Wales. That is why we want a healthy economy in the first place—in order to safeguard that social and cultural life.
I wish to make a general observation. Last night, in the news on both radio and television, I heard the various suggestions being made about President Bush's State of the Union address. It was said that he was cutting down greatly on armaments in order to
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channel some of the money available into other investment in the American economy. It is right for us to reflect that the countries which have spent most on armaments—Russia, the United States and the United Kingdom—have suffered economically as a result. The two most successful economies in the world—those of Japan and West Germany—did not spent that kind of money on armaments. It is surely not too much to ask as a peace dividend that our Government, whatever their political complexion, should spend a good deal of the money saved on defence expenditure on developing our economy generally.
Whatever the reasons for spending money on armaments—and it is perfectly understandable that we should do so; we spend it for our own security because it is a necessity, not a pleasure, and has to be done—it seems to me that there is no end product, or bonus; it is simply for self-protection. If any society can afford to do that, it can certainly afford to spend equivalent money, so to speak, to improve the general economy and the social and cultural life of the country.
Having said that, I should like to pose three questions. First, what is the Government's long-term overall economic policy for Wales? There has been a great deal of self-congratulation on the inward flow of investment into Wales. I believe it has been stated that there are 300 foreign-owned companies in Wales at present. They make a remarkably good contribution to the Welsh economy, but it is a very vulnerable one. Companies do not invest in Wales for the sake of Wales; they do so for their own sake. We must understand that. It naturally imposes a certain vulnerability. While I would encourage such investment in all possible ways—and I congratulate the successive Secretaries of State who have brought it about—it is no substitute for an overall economic policy for the development of Wales.
I happen to be a non-executive director of one of the few companies in this country which has developed in Japan. However, we were not allowed simply to develop in that country. The Japanese insisted on having a 50 per cent. equity in the company in Japan. I do not blame them for that. Such things have to be put in a proper perspective. What is greatly lacking in Wales is the promotion of indigenous companies and indigenous industry. There is a lack of business training and, indeed, a lack of ordinary technical training.
I believe it was the noble Viscount, Lord St. Davids, who pointed out that the Secretary of State will be taking over responsibility for training in Wales from April. There was an article in yesterday's edition of the Western Mail, on page 12, which referred to a leaked report from the Department of Employment dealing with complaints from Japanese employers in Wales about the lack of skills, especially as regards their developments in South Wales. It appears that the report was to be published or made available in July, but it has obviously been leaked. If those complaints are correct, surely it is for the Secretary of State who will now take over responsibility for training to ensure that the Welsh workforce, and especially the young people, are trained up to the required standard.

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I should like to hear a statement from the Government on the matter. The Motion before the House calls for Papers. One paper that we could well do with would be one setting out the Government's long-term overall economic policy for Wales and stating whether Welsh agencies would be used to provide much more equity capital for developments in Wales. I entirely agree with some of the remarks made by the noble Lord, Lord Stanley of Alderley. We could have done with much more forward looking leadership in the agricultural industry among farmers' co-operatives on the marketing side. A good deal of government leadership and support could be provided for the purpose.
Secondly, what is the programme for the next decade for communications in Wales? I live in mid-Wales. The rail communications in that part of Wales are absolutely awful. I have travelled from mid-Wales to London for the past 30 years virtually every week-end. It is less predictable now that one will arrive on time than it ever was. The reliability of the service is awful. Towards the end of last year I travelled with an English businessman, although I did not know then that he was a businessman. He was in the same compartment as myself and was returning to London. He complained bitterly to the ticket collector and said that he would never go to Newtown in mid-Wales again—where he had thought of opening a factory—because of the dreadful railway communications.
The road communications are still pretty bad in some places; for example, the Aberystwyth to Shrewsbury road. The north-south Wales road is still a very difficult road. It is certainly much better than it was 40 years ago; but so it should be. However, it is still a pretty poor road for what it is supposed to achieve—good communication between north and south Wales.
Air communications are also poor. The Laura Ashley company undoubtedly moved its headquarters from Wales to Maidenhead because of the difficulty of communications. Indeed, it is difficult to run an international company from a location in mid-Wales. That will continue to be so unless there is a great improvement in communications, especially air communications.
Thirdly, what is the Government's reaction to the agricultural problem of Wales. Agriculture is the staple of Welsh rural life and is in a very difficult situation. I think that the Government should make a much greater effort to secure co-operation with Mr. MacSharry, the Agriculture Commissioner for the EC, to ensure that we have more flexibility nationally in dealing with the agricultural problem in Wales. We must endeavour to co-operate more with him rather than simply attacking him and the Commission on everything.
I fail to understand what is the Government's agricultural policy. They are always attacking Mr. MacSharry's proposals. But, what are the Government's proposals? How would they deal with the problem? I believe that there is much to be said for a 10-year plan for Welsh agriculture, and perhaps for the United Kingdom. However, at present, I am
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talking in the Welsh context. I think that there should be an individual management plan for every farm, bearing in mind both the environment and productivity. In that way, we could bring some certainty for the future into Welsh agriculture.
In summary, I should like to add one final point. Everyone has congratulated the Welsh Office, as indeed I do. A great transformation took place in Wales when Cardiff was made its capital; when a Secretary of State was appointed—and many people objected to that appointment. We also had the development of the Welsh Office and of Cardiff as an administrative, commercial and cultural centre in Wales. I think that those developments were of the greatest possible benefit. I should like to see that transformation matched in the future by an elected assembly to which the Secretary of State would be responsible.
4.57 p.m.
Lord Prys-Davies: My Lords, I should also like to begin by thanking the noble Viscount, Lord St. Davids, for introducing this important debate. I am sure that his was a well-designed speech to which the Government will often turn for comfort. But, on the other hand, I venture to express the hope that they will take careful note of the concerns that have been expressed by noble Lords, including those expressed by the noble Lords, Lord Gibson-Watt and Lord Hooson. I also hope that the Government will take note of the characteristically fair and balanced assessment of the noble Lord, Lord Thomas of Gwydir. I am sure that those speakers are indicating the road along which we should travel.
The Welsh economy has undergone profound changes since 1979, which has been the experience of most of the communities in Western Europe. The coal industry in Wales has virtually disappeared and we have seen the substantial growth of the service industries. Moreover, with the guidance and full support of the WDA, in alliance with the Welsh Office and the Welsh local authorities, inward investment from beyond the United Kingdom has made a positive contribution in north-east Wales and along the spine of the M.4 in south-east Wales. I believe that the noble Lord, Lord Hooson, was absolutely right to express a few words of caution. One reason why foreign companies have invested in Wales is that, on the whole, it has also been a low wage economy.
However, Wales is not, as yet, sweeping to prosperity along the M.4 motorway. Alongside the advances, we must open our eyes to the fact that there are blemishes. According to the Department of Employment, overall unemployment is 82 per cent. higher than it was 13 years ago and the number of employees in employment has fallen by 6.8 per cent. Those are the facts and they are worth repeating. According to the accountants Peat Marwick, 4,112 businesses in Wales went into receivership last year. It is its judgment that we shall see the same number of receiverships in 1992. About 2,000 people went bankrupt last year—an increase of 92 per cent.

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We have heard of the need to encourage indigenous industry, but receiverships, liquidations and bankruptcies always sadden me. They sadden me because they signify so much destruction, loss of family assets, the loss of a good employer-employee relationship and often the loss of an organisation which has been a part of the social structure of a local community. When government policies, by design or misjudgment, lead to a record number of receiverships, liquidations and bankruptcies that is damaging to the community itself. There has even been a slight decline in the GDP per head relative to the UK average. In our view, no government can be content with such a record after 13 years of untrammelled power.
Although South Wales was built on a vast bed of coal, I am not altogether sorry that South Wales is no longer the prisoner of that industry. It was a hazardous and dangerous industry for miners and their families; on the other hand, I am full of admiration for the institutions and the way of life which that industry created for itself in South Wales. It is therefore worrying—I shall be fair—that successive governments, notwithstanding the benefits of the forces of technology and science, have as yet failed to provide the jobs required to replace those lost in the wake of colliery closures. The noble Lord, Lord Crickhowell, referred to the Welsh Valleys initiative. It was an excessively trumpeted initiative, and it is the general impression in the Valleys—I live near the Valleys—that it was no more than a repackaged version of many existing schemes.
Unemployment in the Valleys remains entrenched. On 15th January, Dr. Winkler of the Economic Policy and Research Unit of Mid-Glamorgan County Council, addressing a conference at Aberdare, concluded that the present high levels of unemployment will continue and that only a new initiative could change that sombre assessment. That leads me to ask the Minister whether the Secretary of State is considering issuing new guidelines to the WDA as to how it should best tackle the long term underlying problems, as was suggested by my noble friend Lord Cledwyn on the Second Reading of the Welsh Development Agency Bill. May I also ask the Minister whether the Secretary of State intends to ask British Coal Enterprise Ltd. (a subsidiary of British Coal) to reconsider the scope and conditions of eligibility of its initiatives in South Wales, because notwithstanding the sombre conclusions that I have recently read in Planet, to which my noble friend Lady White drew my attention, I am reluctant to accept that British Coal Enterprise Ltd. is promoting a lost cause?
We accept that Cardiff in the 1980s created flourishing service industries, including financial services, for itself; but, nevertheless, its manufacturing and construction industries have been savaged. Service industries do not provide employment for redundant factory workers, construction workers and dockers, although they may help their children. Three of the Cardiff parliamentary constituencies are at the top of the unemployment list of the Welsh constituencies. Unemployment in Cardiff is roughly the same as the rate for the Rhondda, Merthyr and
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Cynon Valleys and Gwynedd. That is not to say that the position in the Valleys has improved. It means, significantly, that Cardiff has now reached the unemployment levels characteristic of the Valleys and Gwynedd.
I accept that South Wales and rugby are not the whole of Wales. Many of the speakers who have taken part in the debate have drawn attention to the critical difficulties facing the rural communities of Wales. I agree with much of what was said by the noble Lords, Lord Gibson-Watt, Lord Stanley of Alderley and Lord Hooson, as well as by my noble friends.
It is widely predicted that agriculture will shrink significantly between now and the end of the decade. The Council for the Protection of Rural Wales published in 1990 a report on the changing rural scene prepared by a working group chaired by Professor Michael Haines. That report contained 15 to 20 proposals. They seemed to point in the direction in which solutions might be found. I hope that we shall hear from the Minister that the Welsh Office will respond favourably to the report without much further delay. Will the Minister also assure the House that it is not the Government's intention that the Development Board for Rural Wales should eventually become just an agency of the WDA?
In many parts of rural Wales the economy is threadbare. Against that background, the effects of the closure of a single major source of employment in the local community can be dramatic and devastating. The House has been reminded this afternoon—not that it needed reminding—that the trauma is being felt today in Dyfed with the impending closure of the naval ammunition stores at Trecwn. One is conscious that similar trauma can arise in other situations in Wales where a rural community depends upon a single source of employment. One case that immediately comes to mind is the nuclear generating station at Trawsfynydd in Gwynedd. Others may think of similar circumstances. Hence my question: has the Welsh Office set up a task force to undertake the preliminary work necessary to prepare for such an event where such an event is predictable?
I now wish to touch briefly on an issue which is of common concern to Welsh people, whether they live in rural, industrial or urban Wales. It is worrying that about a third of the unemployed in Wales are aged between 18 and 25 years. I am confident that noble Lords will agree that most of those young people should have access to further education and training. Quite apart from the requirements of modern industry —there are skill shortages in Wales—I believe that young people have a moral right to be well educated, well trained and skilled so that they too have access to wider economic and social opportunities. So I welcome the setting up of the seven locally based TECs, but we must consider how they can be brought into closer partnership with the WDA, the local authorities and the higher education institutions. That was a matter touched upon by my noble friend Lord Cledwyn when the point arose during the Second Reading of the Welsh Development Agency Bill. The question remains valid.

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I have taken up the time allotted to me. I shall not accept the invitation of the noble Lord, Lord Thomas of Gwydir, to explain the role and significance of a Welsh assembly. That deserves another debate.
5.9 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, I share your Lordships' gratitude to my noble friend Lord St. Davids for initiating an extremely timely and interesting debate. It has attracted contributions from, on the Conservative side, two past Secretaries of State and one former Minister of State for Wales; on the Opposition side, the noble Lord, Lord Prys-Davies, was a special adviser to the then Secretary of State for Wales and the noble Lord, Lord Hooson, is a former president of the Welsh Liberal Party. For good measure, we have listened to the noble Lord, Lord Parry, a past chairman of the Welsh Tourist Board, and the noble Lord, Lord Morris of Castle Morris, principal of St. David's University College. Among this galaxy of stars, my noble friend Lord Jenkin of Roding, the noble Lord, Lord Chalfont, from the Cross-Benches and my noble friends Lord Stanley of Alderley and Lord Colwyn have added their words of wisdom. If I do not have time to answer all their questions, at least I have given all their names. They have also asked questions which I shall endeavour to answer but perhaps I may make a few points of my own as I do so.
Incidentally, my noble friends Lord Gibson-Watt and Lord Thomas of Gwydir rightly drew attention to certain consequences of a Welsh assembly. The Government are clear that Wales would lose much more than it might gain, particularly through the likely consequential loss of a Cabinet Minister solely responsible for Wales.
A successful economy is dependent on infrastructure. My right honourable friend the Secretary of State for Wales and his predecessors have planned and are carrying out several vital road links and improvement schemes on a whole variety of roads. My noble friends Lord Thomas of Gwydir and Lord Crickhowell touched on this aspect in their powerful speeches. The noble Lord, Lord Hooson, made so many complaints about transport that I wonder why he has not moved, perhaps with Laura Ashley.
Since 1979 about £1.4 billion has been spent improving the motorway and trunk road network in Wales. Fifty-five of the 60 miles between Chester and Bangor are completed to dual carriageway standard. The £190 million Conwy crossing scheme was opened recently and the £99 million Pen-y-Clip scheme and £12 million Rhuallt Hill improvement are in progress. Only one scheme—the Aber improvement, costing £9 million at November 1989 prices—remains in the forward programme. Improvement of the whole of the A.55 is on course for completion within the next two to three years at a total cost of £620 million.
The Government's first priority remains the completion of the M.4 and the upgrading of the A.55. However, resources are also being devoted to selective improvements on other routes, including the important A.470 and A.483 north-south routes.
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The new motorway approach road to the second Severn crossing is planned to start early in 1993, subject to the completion of parliamentary procedures and to be completed for the opening of the bridge early in 1996. My noble friend Lord Jenkin of Roding asked me the latest position on the Severnside airport. The Government are aware of proposals to develop a new airport on Severnside and are monitoring the progress of developments.
The noble Lord, Lord Morris of Castle Morris, asked me what the current position was on the gas terminal at Point of Ayr and what the Government intend to do. The application regarding this matter has now been called in. The Government are currently considering the procedures to be adopted for the determination of this application. The Welsh Office is well aware of the problem and will deal with the matter as expeditiously as possible. A decision will he made as soon as possible.
I am pleased to remind your Lordships that the Programme for the Valleys has now been under way for three-and-a-half years. During that time the achievements of the programme have included the biggest land reclamation programme in Europe, with 1,551 acres reclaimed in the first three years and a target of a further 400 this year. Also carried out by the WDA has been a factory building programme which has seen 1.6 million square feet built in the first three years of the programme, with a target of a further 500,000 square feet in 1991–92. In addition to the original target of 7,000 homes to be included in developing and block repair schemes over the first three years of the programme, the target for a further 2,850 homes to be included in area renewal schemes during the following two years is expected to be achieved.
Forty-five health projects from 1989–90 have received central funding of £25.5 million. Just one of these was the post-graduate dental suite at the Prince Charles Hospital, Merthyr Tydfil, opened in November 1991. Road links also form an important part of the programme: the A.4060 Pentrebach-Dowlaid scheme to improve linkage between the A.470 and the A.465 will soon be completed.
When my right honourable friend the Secretary of State for Wales set out his objectives for the two-year extension of the programme in December 1990 he suggested a new theme for the Valleys: "Partnership with the People". It is right then that I should mention his special initiatives to encourage community involvement in social and economic regeneration. The five communities to benefit under the Community Revival Strategy initiative are making progress in implementing their own very local schemes for regeneration. The Valleys Live '92 festival, a celebration of the life and culture of the Valleys, will also involve local people in generating activities of their choosing. It is this partnership with the people which will mark the success of the Programme for the Valleys.
I was most grateful to the noble Lord, Lord Prys-Davies, for giving me advance warning of his question concerning the Programme for the Valleys. This has proved to be an excellent example of the

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effectiveness of a co-ordinated approach to facing the problems of urban and industrial dereliction. It has demonstrated how urban regeneration can be encouraged by a wide variety of measures in a particular defined area. As the Programme for the Valleys enters its final year, the Secretary of State for Wales will consider what lessons from the programme can be applied for the future.
I am delighted that European structural fund assistance is so widely available in Wales and share the eagerness of programme partners to see funds flowing to good quality projects. I hope that the excellent progress made so far will continue in the future.
In particular, I am delighted that the LEADER Programme for Rural Wales has been approved and pleased that the European Commission was so impressed with the standard of the Welsh bid that it is providing over 40 per cent. more funding than originally anticipated. This will be of great value in continuing the development of the area and in complementing the other EC and government programmes such as the Rural Initiative.
It would be surprising if I did not mention the key element of the rural economy, which of course is agriculture. It is a pity that I cannot spend longer discussing it. I presume that the noble Lord, Lord Hooson, was expressing his party's official line concerning the future of agriculture. If so, frankly my mind boggles and I am appalled at the lack of knowledge which he displayed. I should be delighted to explain to him why my right honourable friend the Minister with responsibility for agriculture cannot give this country's programme. It is only the Commission that can propose a programme.
We recognise that these are difficult days for farmers. As evidence of our continuing commitment we are investing about £150 million in the industry this year and have already announced that expenditure on domestic agriculture in Wales in 1992–93 is planned to rise by 14 per cent. The four agriculture Ministers jointly launched the publication Our Farming Future last November which outlined the changes that are required to enable the agriculture and food industries to make a continued contribution to the nation's economy and rural way of life.
I entirely agree with my noble friend Lord Stanley of Alderley on the importance of a successful, speedy conclusion to the GATT round, plus of course reform of the CAP. We all agree that reform is necessary but that reform must be fair. The Government have made it clear to Commissioner MacSharry that we do not regard his present proposals, especially for sheepmeat, as fair, and that is a message we shall continue to press home.
I agree with my noble friend Lord Gibson-Watt that it is important to continue to farm the land. However, the rural economy cannot look solely to agriculture to sustain it. Other enterprises must play a part. Some of these will be derived from agriculture through the development of on-farm diversification. Others will be derived through the generation of new employment opportunities off the farm. The Government's long-term policy objective is the
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creation of a self-supporting market economy. Substantial resources of around £1 million a day are devoted to rural areas in the Principality by the Government and the various agencies. The changing circumstances of the rural economy and the emergence of new institutions require a fresh approach.
In 1991–92 a £15 million increase in the provision for rural programmes, together with £5 million set aside for local authority capital projects, are likely to be of most benefit to the development of rural communities. Ministers undertook extensive consultations with local authorities, agencies and other representative bodies to seek their views on a way forward for rural Wales in the 1990s. They were heartened by the unanimity of support for the Rural Initiative.
As a result of these consultations the Secretary of State published on 9th December 1991 a document setting out his objectives for rural Wales. As a further stage of the Rural Initiative the Secretary of State also announced a fresh series of measures to strengthen and carry forward rural programmes across the economic, social and environmental fields.
The noble Lord, Lord Prys-Davies, was concerned at the reduction in employment since 1979. One of the most important planks of government policy is to stimulate enterprise and enable more people to create their own employment. If the noble Lord takes into account the increase in the number of self-employed people, he will find that the workforce in employment has increased since 1979.
The two reactors at Trawsfynydd were shut down by Nuclear Electric at the beginning of February last year to make adjustments to operate them at a lower coolant pressure. The reactors will not be permitted to return to power until the Nuclear Installations Inspectorate is completely satisfied with Nuclear Electric's safety case for a resumption of operation. As NII's eventual decision is still awaited, it would be premature to consider what measures are appropriate to deal with any possible closure. Ministers would not wish to prejudge the decision of the NII.
As regards issuing new guidelines to the WDA, departmental guidelines to non-departmental public bodies are regularly reviewed under the five-yearly cycle of financial management and policy reviews of individual bodies. Such a review of the WDA is currently under way. The Institute of Welsh Affairs is a totally independent body which sets its own objectives and programme of activities. There is no doubt that within a relatively short time it has gone a good way towards establishing its credibility. Its reports are usually of considerable value in stimulating informed discussion. I am sure this will be true of the Project Wales 2010 on which it is now working. The National Audit Unit's report on creating and safeguarding jobs in Wales is to be considered in another place by the Public Accounts Committee on Wednesday, 19th February. I do not wish to comment on the report in advance of that consideration.
My noble friends Lord Gibson-Watt and Lord Stanley of Alderley asked about the WDA sponsored

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report on Holyhead. I am aware of the report prepared by W.S. Atkins. That report has, however, been overtaken by events. It was used in drawing up proposals for publicising the joint venture agreement. That matter will be discussed at a meeting of the Joint Venture Board to be chaired by the Minister of State for Wales this coming Friday.
I welcomed the reference made by my noble friend Lord Crickhowell to the developments at Cardiff Bay. The most recent economic appraisal suggests that up to 25,000 new jobs could be created as a result of the developments. Private sector investment could reach a figure well over £1 billion.
On the matter of inward investment, I very much agree with the remarks made by my noble friends Lord Jenkin of Roding and Lord Crickhowell when they commented on the large investment by foreign companies in Wales. The noble Lord, Lord Morris of Castle Morris, mentioned the West Wales taskforce. The Secretary of State for Wales last week announced funding for that taskforce. Funds have been set aside for that area. They are not being switched from elsewhere. The director of the taskforce will be engaged full-time on that work. He has been engaged on other work until last week.
I regret that there are many points I have not answered. I greatly enjoyed the speech of the noble Lord, Lord Chalfont, in which he extolled the beauties of the Welsh countryside. However, the noble Lord did not refer to the Welsh cob stallions running out of the main ring of the Royal Agricultural Show after the judging. That was a superb sight. There is no doubt about the success of tourism in Wales. The noble Lord, Lord Parry, must take credit for a lot of the good work that has been done in that area.
I believe everyone is entitled to have one small dream. I have endeavoured to give an accurate picture of the Principality of Wales progressing and prospering at the end of this century and into the 21st century. As a keen but bad golfer I should like to see the Open Golf Championship played at least once every five years on an existing Welsh links course. Wales has a star in Ian Woosnam, and other stars will emerge. We should think of the benefits such a championship would confer on hotels, tourism and prestige if my dream became a reality. I hope it does. But turning away from my dream, I must add that through various means this Conservative Government have actively encouraged Wales to meet its future head on and with confidence.
Lord Hooson: My Lords, before the noble Baroness sits down, I must mention the fact that she was good enough to ask me why I did not move out of Wales in view of the transport difficulties there. I do not wish to do so simply because I am Welsh and I love to live in Wales. Therefore, in common with many other people who share those characteristics, I put up with those difficulties.
Viscount St. Davids: My Lords, when I took my seat in your Lordships' House in the summer a noble Lord from the Opposition Benches told me I could not consider myself to be a Welshman and a supporter of a Conservative government. I can assure your
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Lordships that noble Lord has not spoken in today's debate. The relative accord with which today's debate has been conducted in this House proves the total lack of veracity in his observation. Today's debate has been important. I thank all speakers for their contributions. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Prison Security Bill
Brought from the Commons; read a first time, and to be printed.

The United Nations: Challenges
5.29 p.m.
Lord Juddrose to call attention to the case for a review of the economic, social and political challenges facing the newly appointed Secretary-General of the United Nations; and to move for Papers.
The noble Lord said: My Lords, this, the first full month of the new Secretary-General's tenure, marks the first anniversary of the Gulf War which threw the importance of the United Nations into such sharp relief. It is UN investigators who discovered just how close Iraq then was to nuclear capability. Only three years ago, when the world was rocked by the Lockerbie disaster, it would have been hard to imagine the UN politically free enough by now to take its strong stand on international terrorism and censure Libya.
The year 1992 is to see the launching of the UN's unprecedented initiative on the environment and development. It is the first new year of Russia and the republics, heralding a major change in the make-up of the Security Council. In the case of Yugoslavia we all pray for an effective contribution by the UN. Less well known, but no less important, have been the recent significant UN initiatives in El Salvador and Cambodia.
I have been re-reading the report of the perceptive debate in this House in October 1985 which was made possible by the then Archbishop of Canterbury. The unquestioned relevance and resurgence of the United Nations in the 1990s bears testimony to the wisdom, sense of history and farsightedness of those who participated in that debate. Our debate tonight is especially timely because it comes just before the Prime Minister travels to New York to attend the Security Council summit which Britain has convened.
It is clear that the need for a sophisticated, well managed, responsive and streamlined system of international governance is more necessary than ever. Our world has changed almost beyond recognition in the decades since the UN's inception. It is more interdependent, more populous, more complex, more lethally armed, more environmentally vulnerable and more sharply divided between rich and poor. However, against that there is at last an exciting realisation that the UN must develop in response to those challenges.

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What has become especially evident is the massive increase in human vulnerability to disaster. That is primarily due to the lethal cocktail of conflict, poverty and rapid population growth in the poor world—something which can only get worse unless all the interlinked causes are addressed in an integrated manner. It is not convincing to attempt to tackle rapid population growth without also tackling the structurally uneven pattern of consumption and access to resources which is, after all, the North-South divide. Literacy and education levels, good health services, good survival prospects, parity for women and security are all factors which critically influence family size. Sadly, however, the naive notion still persists in some quarters that sanctimonious condom handouts from the West will of themselves solve the problem. Such ignorance is perhaps best corrected by a careful look at the social history of our own country over the last 100 years.
"Security" remains a much-used term but it no longer applies only to politico-military concerns. We now know that lasting peace requires the observance of human rights, the exercise of genuine self-determination within a democratic framework, consistent observance of the rules of national and international law, effective population policies and social justice with an economic stake for all. The imperatives of equity and justice become still more pressing as we face up to what could prove a terminal environmental crisis for the human species and as we face up to the squandering of finite resources and the absolute necessity of sustainable economic and social policies.
Even though we are daily reminded of our world's interdependence there is still an extraordinary Eurocentricity in the way we in Britain talk about war. It is too frequently said that we have preserved the peace since 1945. That is a mighty odd way to describe 135 often cruel wars which have ravaged communities since the Second World War, mostly in the third world. Conflict makes the poor poorer, as even a cursory glance at Africa's war-ravaged countries demonstrates. A particularly shocking fact is that it is ordinary civilians, usually peasant farming people, who are frequently the main targets in modern conflicts. During the Second World War, 52 per cent. of the recorded war-related deaths were civilians. Today, the UN estimates the percentage to be nearly 90.
Another appalling consequence of modern conflict is that of mass human displacement. There are 17 million refugees around the world and a further 24 million people displaced within the borders of their home countries without even the status of refugees. That must rank as one of humanity's biggest failures. An urgent, long overdue task for the new Secretary-General is to define clearly the locus of responsibility within the UN system for the internally displaced. It is totally unacceptable that while refugees fall within a UN agency mandate, the internally displaced do not. We should demand that the rights of the internally displaced are given equal priority.
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Another inescapable challenge for the world's political leadership is not only to build and share a common understanding about genuine security and how to enhance it, arguably with new perceptions of the role and responsibilities of the Security Council —pre-emptive rather than reactive, and building on Article 43—but more generally to see it through by modernising the way in which key international organisations operate and co-operate.
If we believe that sound economic performance at national level demands accountable democratic governance, then why should that not apply equally at international level? The major international economic institutions and groupings—the Bretton Woods institutions, GATT, the London and Paris clubs and the enormously powerful trans-national companies, are not internationally democratic institutions. In effect they answer only to their leading members, the rich man's club. It is a nonsense to see the rich world insensitively and dogmatically applying text-book market economy reforms to fragile economies and then to witness the UN desperately mopping up the human casualties. That form of politically expedient separation undermines the world's security. The international financial institutions, not least G7 and the IMF, must work in harmony with the strategies of the UN system and a reinvigorated Security Council if real and lasting progress is to be secured.
I suggest that what I have argued is today grimly illustrated in at least two interlocking regions of the world. Let us consider the highly volatile Commonwealth of Independent States. We have witnessed the crumbling of a nuclear empire. Now we have Russia and the republics facing every sort of crisis imaginable. I single out just one. Nuclear weapons abound, as do some 2,000 specialist scientists and more technicians with recent hands-on experience of designing nuclear weapons. Those people face a very insecure economic future at home. Next door is another powder keg, the Middle East, where oil riches combine with unbridled, undemocratic militarism. It is hardly necessary to spell out the possibly disastrous consequences.
The point is that the West is not even serving its own interests, let alone anyone else's, when its own protectionist trading policies potentially undermine the very economic future on which the Commonwealth of Independent States and world security will depend. Food aid and help with internal economic liberalisation alone are not enough to avert disaster in the longterm. Likewise, in the Middle East, history is unveiling contradictions of frightening proportions. Deliberately or by default, the big powers armed Iraq in full knowledge of the nature of the regime. They then went to war with Iraq and in order to do so had to bolster up some highly undemocratic and militarised regimes in the region. Once again, the arms trade to the same region is immense.
It is the same members of the rich man's club governing both the Security Council and G7, who control, or fail to control, what happens. Surely, the new drive for disarmament and arms control by the United States is an inescapable challenge to us all.

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This is not the time obstinately to insist on our own narrow national preoccupations. It is the time to throw all our weight into a concerted international drive which, if successful, will without doubt prove the greatest possible contribution to security for our children and their children. It is the time too, once and for all, to get the irresponsible arms trade under control.
However, let me make two things clear. First, real security will be undermined if the world's most powerful states use the United Nations simply as their fief. The UN will lose the credibility on which it must depend if it is to address these vast challenges. The essential principles of political justice and international co-operation will be shot to ribbons.
Secondly, and equally important, the corrupt, undemocratic dictators of this world must not expect to seek refuge behind a shield of national sovereignty. Those who abuse power and whose behaviour, to use the words of Terry Waite when he described his terrorist captors,
"falls well below the norms of civilised society",
should not expect protection under international law. To name just three cases in point: Iraq, Burma and the activities of Indonesia in East Timor currently deserve the searching spotlight of international censure.
There is a key weakness to our accustomed way of life. The United Nations is founded on the principle of the sovereignty of nation states. Yet that principle is proving increasingly inadequate. International human rights legislation, economic and political conditionality policies, the way in which the world's economy works with national borders dissolving and the growth of regional economic groupings, the unprecedented movement of people, goods, services and information, and the ripple effect of the "safe havens" initiative in Iraq which redefined the scope and potential of humanitarian action—all are evidence of a new de facto international reality.
As regards the immediate agenda, clearly the UN must enlarge its peacekeeping and arms control activities. Equally clearly, that will need more top-rate staff and resources. I cannot overstress the basic point that peacekeeping and peacemaking must be done thoroughly if they are to work. In many countries, the very peace which has recently been made is threatened because the detailed follow-through was inadequate. Take Ethiopia for example: an estimated 100,000 ex-combatants are still armed and at large. In a country of such poverty, a gun yields a living. The result is random banditry and terror instead of politically formalised conflict. Is that security? Had there been a thorough demobilisation process, with the supervised destruction of weapons and an orderly reintegration of soldiers into society, the long-suffering Ethiopian people could have had a lasting peace.
It is well known that the basic housekeeping cash is hard to raise, that some countries are badly in arrears and that others feel they are expected to give too much. We read dry articles about the pros and cons of voluntary and assessed contributions by governments and of the "ability to pay" principle. As a former director of Oxfam, I know only too well that so-called
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voluntary contributions by governments, on which vital agencies such as the High Commission for Refugees depend, are too often taken by governments as an opt-out clause. One result is that voluntary non-governmental agencies relying on the public's generosity often have to bail out official programmes at the expense of their work elsewhere. Another result is that vital, life-saving work is not done as thoroughly as the professional UN humanitarian staff would like.
Britain's contributions to the UN should surely be directed by a far-sighted, preventive approach. We should be investing in peace and the quality of life. We should contribute resources which would otherwise be burned up by expensive military, humanitarian and environmental rescue operations. The military costs of the Gulf War, added to the continuing humanitarian and environmental costs, dwarf the additional 500 million US dollars a year needed for UN peacekeeping.
Britain has a lot more than cash to offer. The Foreign Secretary's sustained and constructive work on international arms control and the Foreign Office's work on the recently agreed UN humanitarian response structure are good examples. Our place within G7, the Commonwealth, the European Community, NATO, CSCE, the Western European Union, the World Bank, IMF, GATT and the creditor clubs, as well as our seat on the Security Council, means that Britain is particularly well positioned to add quality as well as quantity to the UN's progressive development.
However, as I said, we cannot afford hypocrisy and double dealing. Our Government must work towards a United Nations which is enhanced, not emasculated and sidelined by the world's big powers and economic centres of gravity. The new Secretary-General must, above all, have the resources for building a United Nations which is equal to the challenges of today's world: the challenges of the former Soviet Union, the Middle East, Asia, Central America and the Horn, and of the huge needs ahead in building a strong, post-apartheid southern Africa.
My Lords, I beg to move for Papers.
5.45 p.m.
Baroness Park of Monmouth: My Lords, in reviewing the powers of the Secretary-General we have first to look at the UN. Sir Brian Urquhart, once the Under-Secretary-General at the UN who, with the noble Lord, Lord Gladwyn, played his part in founding the organisation over 45 years ago, said:
"For better or for worse, the UN is nothing like a government. It has no sovereignty or power of sovereign decision-making. It is an association of independent sovereign states which depends for its effectiveness on the capacity of its members to agree and to co-operate, and on the ingenuity and dedication with which the Secretariat interprets and carries out their wishes. The capacity of governments to agree and co-operate has proved to be quite limited".
Sir Brian Urquhart also said:
"The effort to build a brave new world in some cases degenerated into fixed and parochial bureaucracies, repeating year by year in excruciatingly tedious inter-governmental meetings, ideas which had become almost meaningless clichés".

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We have all seen examples of elephantine bureaucracy and the waste of money and resources which is endemic in some UN agencies.
At this moment, when the former Soviet Union and the whole Eastern bloc appear to wish to abandon confrontation with the West in favour of collaboration, we have a chance to begin again in the UN. The automatic adversarial confrontation between the two super-powers and the power games which accompanied it need no longer dominate the UN's proceedings. Yet the signs are that the world remains a very unstable place, where there will be local emergencies which may well call for a UN presence and UN action.
The UN is only as strong as its parts and thus it is quite vital to ensure that we in particular retain a capacity to provide well-trained, well-equipped forces of men and women who are available to back up the political decisions taken in and by the UN. I do not think only of major operations, such as the Gulf War. The back-up may take the form of a trained group, able to manage a disaster (as in Armenia or the Kurdish crisis on Iraq's borders) or the establishment of order after disorder (as in Cambodia and Yugoslavia) or simply to hold the ring as in Cyprus. A second bad winter of chaos and volatile public order in the former USSR might well call for a task force working with the Russians, Ukrainians and others to create a proper flow of goods.
I dare to hope, turning to the growing problems of Africa, that we and the former Soviet bloc could work together there also to provide a sophisticated temporary infrastructure of trained international—UN—servants to build up through on-the-ground training the kind of executive experience without which a country like Zaire, even under a different regime, cannot hope to implement the requirements of the IMF and the World Bank, even if they were appropriate to its needs.
But for those things to be possible, some things must change in the UN. The bureaucracy there, like the nomenklatura in the former Soviet Union, will not easily abandon some of its shibboleths, nor perhaps respond well to demands for greater efficiency. I believe that the quota system which sometimes brings about less than good appointments because it is the turn of, say, Haiti or Namibia, must be revised. It inevitably means that there will be more of us—more Australians, more Americans, more Europeans—since many of the other countries still need their more limited numbers of highly qualified people at home. So be it. The UN must choose the best, whoever they are.
Equally, we must not endanger the peace dividend by leaving the UN with no teeth. We must retain sufficient disposable force to back up whatever the UN as a whole decides to do. It is quite wrong that for years now the UN, in the refugee camps on the Thai-Cambodian border, should have had to tolerate the Khmer Rouge carrying out a reign of terror against the inmates and murdering those who tried to run free. It is quite wrong that the UN inspection team in Iraq should be imprisoned for days, earlier last year, and jostled and threatened now as they go about their
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work of monitoring the nuclear and chemical weapons of a UN member already in breach of international law and a threat to other members.
I believe, therefore, that there must be a total review of the principle of non-interference in the affairs of member states. We must not do it lightly but there must be occasions when it is the considered view of the Security Council that such action is necessary; given such situations in, for instance, Burma where observers should be given really adequate protection, and refugees at risk should be given effective protection, if the political will is there. However, that will not be enough unless there is a task force to implement that will.
Of course, we must be wary of short-term actions which turn into long-term commitments. Cyprus is an example and Yugoslavia could be another, but we should have the power to act as necessary. That has implications for our defence strategy and must be faced now rather than later.
I believe, too, that we should review the way in which our aid is channelled through UN agencies and require to be satisfied that it is being at least as well spent as direct aid would be. We have all had experience of such idiocies as the UN commission sent to Zambia just before independence which was, I seem to remember, composed of a Haitian, a Yemeni, and a Venezuelan with no experience of Africa, whose task was to advise on the economic strategy of the country. That required some knowledge of the African system of land tenure. A local anthropologist had to explain it through a series of stickmen drawings. I doubt whether their economic advice was much use.
In the past there has been thoroughly wasteful spending on badly conceived projects with very high administrative overheads and plenty of danger money, where the same money applied to modest local enterprises such as wells and generators in cooperation with local people would have involved a much better use of resources. We need to take a long, hard look at the agencies—a scrutiny from which some will, of course, emerge with honour. There have been some great men in the UN. Sir Brian Urquhart was one. Robert Gardiner, the head of the Economic Commission for Africa and, before that, the only effective and respected head of the UN operation in what was the Congo, was another. If there were more of them the UN could be a potent force for good.
We now have an opportunity to help the new Secretary-General to streamline the bureaucracy, use the resources better and review the powers of the UN and the support needed. Our problem will, of course, be priorities of resources. I well recognise that that is a problem.
There will still be many explosive issues to resolve. I refer to those of the Arab world, both the Palestinian problem and the growing militant fundamentalism. Dangerous movements to threaten world peace, such as the resurgence of Fascism in Europe, could easily spread to a disaffected former Soviet Union. There will also be major problems of reconstruction in many African countries, not least Zaire where I was witness to some of the worst ineffectiveness as well as some of the best intentions of the UN when I served there in

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the year before and the year after independence. I was in Stanleyville on the day that the Gizenga regime dragged all Europeans out of their houses at dawn to stand in the sun all day, beaten and harassed, for a "document check". That was the day that the UN, present in strength as a peacekeeping force, did not intervene or attempt to intercede but sent a routine telegram to headquarters saying, "Nothing to report".
We have come a long way from that day to the concentrated and concerted efforts of the Gulf War and the steady presence of the blue helmets in Cyprus and, I hope, in Cambodia. However, there is a long way to go and we are about to play with a large number of new members of the team. One of our most important objectives must be to integrate them well and, equally important, to keep the UN fully committed. The Americans, despite their long love-hate and sometimes hate-hate relationship with the UN, are essential to it.
I conclude, again with Sir Brian Urquhart's words:
"The effort continues. It must be intensified".
5.55 p.m.
Lord Greenhill of Harrow: My Lords, the debate is conveniently sandwiched between a rather good programme on television last night and a summit meeting of the Security Council next week from which we all hope to hear new ideas which reflect the new situation in the world.
When the United Nations' role is debated, it is always wise to have a visionary at hand. On an occasion such as this, we sadly miss Lord Caradon. However, the noble Lord, Lord Judd, is a more than adequate successor and of course in the noble Lord, Lord Gladwyn, we have in reserve one of the founding fathers.
At the successful conclusion of the Gulf War most or us felt that there was at last an opportunity to make the United Nations Organisation fulfil more adequately the role for which it was originally designed. At the time of Saddam's aggression the Security Council was fully effective and for the first time the permanent members acted in harmony. The opportunity still exists to make the organisation work. But it will have to be able and willing to accept new responsibilities and to meet new challenges which are extending daily to every corner of the world. There is no need to enumerate them. They stare us in the face from newspapers every morning.
The noble Lord, Lord Judd, has made proposals which have a wide emotional appeal and must be addressed. I find myself very much in agreement with what he said. It is tempting to think that only a giant overhaul of the organisation can match the present situation. Is that in fact possible? I am reminded of a conversation in the 1960s between the late Lord Stewart and Mr. Gromyko at which I was present. Lord Stewart had suggested that a reform of the organisation was desirable. Gromyko smiled wearily and replied, "If you knew how hard it was to reach agreement in 1945 you would not be making such a suggestion now".
Many of the original difficulties remain and others have multiplied with the widening membership. It is
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true that the confrontation between the great powers has subsided. But who can be sure that the problems will not return in many new and dangerous guises? We must make the best of the organisation that we have inherited from the past. No fundamental redesign is practical in the short term. However, it is perfectly possible for important parts to be subject to redesign. Such redesign is likely to be best done from the outside and not from within. Some noble Lords may remember the attempt of the late Sir Robert Jackson to work from within. He was thwarted at every turn by the United Nations establishment clinging to its positions. One way forward towards reform would be for the Secretary-General, with the encouragement of powerful members, to set up small groups of independent outsiders who would propose ways in which improvements could be made in certain areas of the organisation. The United Kingdom could offer experienced people such as Sir Anthony Parsons and the veteran Sir Brian Urquhart. For example, as a priority they could examine conflict resolution and peace-keeping problems in the light of recent events. The Economist last week had several other useful suggestions for reform.
Many noble Lords, as well as the noble Lord, Lord Judd, can, I am sure, think of other areas for scrutiny by such independent groups. Nor should the specialised agencies escape critical examination. Such independent groups could free the Secretary-General and his staff from current business. But the first and most important requirement is to put the organisation on a solid financial footing. Without adequate funding no secretary-general and no security council can play the role that we call upon them to fill.
The figures speak for themselves. In November of last year the organisation was owed 800 million dollars of unpaid subscriptions. United Nations' peace-keeping operations between 1948 and 1990 cost 4 billion dollars. But that is peanuts compared, for example, with the annual UK defence budget of £35 billion and worldwide expenditure on defence.
Countries will have to learn to pay more and to pay regularly. The UN has a strong and logical claim to a large share of the defence dividend arising from reduced military budgets. I hope that the Prime Minister will seek agreement on that at the summit Security Council this week.
This is a short debate but I wish to raise an important point which the Minister may wish to clarify. In my view we should give primacy to the United Nations Organisation in moving towards a safer world. Others should not be permitted to usurp its power. That means, for example, that the role of the CSCE of the Helsinki powers should be closely defined. As it is at present it is being built into a regional security council which could, for good or for evil, act as a local United Nations. Is that what the Government would like? We have the recent experience of Yugoslavia to guide us. It can be argued that an earlier involvement of the UN rather than of the European Community could have accelerated a settlement of that dispute. I hope that the Minister will have some observations to make on that matter.
6.1 p.m.
Lord Hatch of Lusby: My Lords, I have calculated that during the two-and-a-half hours of this debate some 3,750 children have died in some part of the world simply as a result of poverty. No one with any compassion or any concept of equity can rest content with that situation.
That situation, however, creates one even more desperately dangerous. I imagine we are all agreed that sustainable development must be promoted so that that death toll can be drastically reduced and eventually wiped out. How do we do that? There is the nub. How can sustainable development throughout the world be produced without at the same time risking a set of environmental disasters? It is no exaggeration to say that that is the major issue facing our generation in relation to the next 50 years.
We cannot expect developing countries to finance their development in an environmentally benign manner, in particular after the bad example that we have set them during the past 150 years. Furthermore, according to the latest recorded figures the developing world was paying in interest £34.3 billion whereas it was receiving in aid only £28.3 billion. In other words, the developing world was financing our standard of living.
It is obvious that in order to face that massive task we require above all international co-operation. The only institution that we have which can even glimpse the possibility of that co-operation is the United Nations. We are preparing for the United Nations summit conference on the environment in Rio next June. In preparation an inter-governmental negotiating committee has been set up and has met three times. At its second meeting in Nairobi last September I welcomed the initiative of the EC which called for specific commitments from industrialised countries to stabilise their CO2 emissions by the year 2000 in general at 1990 levels. Even that will be insufficient to stabilise greenhouse gases at a level which can be absorbed by the ecological state of the planet. At that conference the call came from the European Community.
British policy, I understand, still rests on conditionality. I hope that the Minister will address himself to that point. We are prepared to set targets only if everyone else does so too. Is that still the Government's position? If so it hardly gives a lead. At the same time we know that the United States is totally opposed to making commitments and setting targets, which appears to bring into question any value that the Rio conference may have.
I now wish to ask the Minister a question of which I have given him notice. Will he tell the House what was the state of play at the third meeting of the inter-governmental negotiating committee in Geneva last December? We can welcome the action and the initiative that were taken in setting up the global environment facility. I welcome the fact that the British Government have supported that facility. It is a three-year experiment. However, it is already suspect in many parts of the developing world because it has been grafted on to the World Bank, with its notorious
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reputation for so-called readjustment, which has distorted the economies of so many developing countries.
Within the United Nations there is obviously a desperate need for greater co-ordination between its various bodies. For example, surely it is essential that the United Nations development programme and environmental programme address themselves jointly to that task and work together. However, the United Nations' environmental programme is not even an implementing agency for the facility. It will not even be responsible for the distribution of the finances of that facility. A new approach and possibly a new institution is needed. Above all we need an approach that is answerable and in which there is the participation of the developing countries.
There is a danger—it is seen in particular in the United States and to some extent in this country—that the situation will be used as an excuse for us to continue, perhaps paying out to assist the developing countries to develop without risk to the environment. However, that is no excuse for us to continue to pollute the atmosphere. It is our task to reduce the wasteful use of energy in the developed world as an example and a lead to the developing world.
We need a stronger, more accountable and more co-ordinated United Nations effort if the task is ever to be approached with any seriousness. To those who have suggested that there should be a re-examination of the United Nations I, together with many of my colleagues who have worked within the United Nations framework, say that we can look at the work of Brian Urquhart and Erskine Childers. We can learn from that. I hope that, in learning from it, we shall devise a policy which will face with seriousness the grimmest of challenges to the international community.
6.10 p.m.
Lord Cocks of Hartcliffe: My Lords, I thank my noble friend Lord Judd for initiating this debate, which is, as has been pointed out, extremely timely.
Those of us who have spent our adult lives under the shadow of the coldwar probably did not think enough about what any post-cold war situation would be like. The intractable problem which we seemed to face was so great that we probably thought that, if the cold war ended, we should be entering elysian fields and a life of bliss thereafter. In fact, of course, we have only just begun to realise the existence of some of the problems now confronting the world. We shall solve those problems only through international action and an effective international United Nations presence.
I was interested in an article in the Daily Telegraph—I hope that my noble friends will forgive me for mentioning that publication—on 27th January describing a United Nations conference which was taking place in Dublin and which was concerned with the whole problem of water supply. One hundred and fifty-six countries and 24 United Nations agencies were taking part, trying to draw up a drinking water strategy for the world. It is ironic that in this developed country and a number of others, there is a great boom in the sale of bottled water. I am told that

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some of that bottled water is tap water. However, the business has now become so lucrative that we have reached that stage of what some might call "civilisation". Something like one third of the world's population lacks decent water supplies and sanitation. The director of the WHO told the conference that cases of cholera have risen to an unprecedented level. Your Lordships will know that cholera is a water-borne disease.
The world is faced with mass starvation and the environmental hazards of carbon dioxide emissions, as my noble friend Lord Hatch has just pointed out. Yet a country like China has an enormous coal consumption approaching 1,000 billion tonnes per year and reserves which will run for another 800 to 1,000 years at that rate of consumption. Therefore, we are not in any position to deal with those problems unless we do so through an international agency. If we try to act as individual nations, we shall be told, "You have developed a decent standard of living by causing all that pollution but you are telling us that we cannot approach the same levels because of the dangers".
The importance of adequate living conditions and environmental protection is so great that the United Nations must give a lead in that sphere. In the past the United Nations has been dominated to some extent by the permanent members of the Security Council. However, that circle must be widened now so that everybody believes that the organisation provides a reasonable forum for solving their problems.
Since I came to your Lordships' House I have taken a particular interest in the continent of Africa. There, in some sense, is the encapsulation of the worldwide problems which we now face. Conflicts are breaking out. We now have the European Community and any fighting between member states is unthinkable. However, when one looks back at the history of Western Europe over the past few hundred years, conflicts have swept across the Low Countries. There has been the Great War and the last war. Therefore, it is not surprising that, elsewhere, difficulties break out as they do. I believe that the EC can now be a great force in helping the United Nations. I hope that when we are faced with a situation such as the Gulf there will be cohesion and unity among the EC partners in their approach.
We in Western Europe must also realise that we are rather more responsible for Africa than some other parts of the world not simply because of the initial depredations of the slave trade which wrought such havoc among the indigenous communities which had their ablest and fittest members shipped ruthlessly and in abominable conditions to the Americas. We take responsibility also because of the record of the colonial powers in Western Europe in carving up Africa in the last century, imposing artificial frontiers and laying the foundations for some of the problems which the continent now faces.
My sphere of interest has been the Horn of Africa and East Africa. I have tried to draw your Lordships' attention to the problems of countries like the Sudan, which is racked by civil war. Potentially it is one of the most prosperous countries of Africa. It has large areas which could be cultivated to produce crops. There is
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great commercial potential. Sudan has indigenous raw materials, minerals and fuel resources. However, progress is being impeded by the civil war and we must find ways to stretch out the hand of partnership to solve the country's problems.
The Sudan has been independent for some 36 years and 25 of those years have been racked by the civil war. The persecution of peoples in the south—Christians or animists—has been particularly severe. The people resisting that do not ask for an imposition of their own beliefs on the rest of the country. On the contrary, they believe that there should be a free and democratic non-secular society for the whole country. At present they are faced with the threat of the imposition of Sharia law. It is to that sort of situation that the world community must bend its attention.
I welcome my noble friend's debate. I hope that we can move towards international solutions to these problems. As my noble friend said, we must look carefully at the question of sovereignty and how far that can be used as an excuse to prevent questioning or intervention in some of the appalling practices which are going on. However, the United Nations now takes on a role which some of us had hoped for over the years but which we can now envisage as becoming a reality if it is supported by people of goodwill on all sides.
6.17 p.m.
Lord Beloff: My Lords, we must all have listened with attention and admiration to the masterly survey which the noble Lord, Lord Judd, gave us of the problems at present afflicting mankind and his conclusion that, in a better and more internationally conscious world, they could be solved.
I listened to that speech with particular pleasure because it was also an occasion for nostalgia. I remember exactly those speeches made in my youth by Robert Cecil, Gilbert Murray and Philip Noel-Baker, all of them proclaiming that if the League of Nations, as it was then, was given due authority the problems of the world would look less menacing.
I had hoped that the noble Lord would address himself, as some noble Lords have, to the more precise point of what the new Secretary General can hope to do about that. To prepare myself, I went this morning to see the Mantegna exhibition at the Royal Academy, which has a wall covered with the engravings of that favourite Renaissance theme—the Labours of Hercules. That seemed to me most appropriate to Mr. Boutros Boutros Ghali. We might identify the problems he raises differently. Which is the hydra? Which is Antaeus? However, fundamentally, he confronts a series of particular problems most of which have been alluded to. Surely his first task must be to see which of them to tackle first.
The difficulty is that the more one discusses the great world problems the more one realises that neither the will to solve them internationally nor the resources are freely given for that purpose. One must face the disagreeable thought that, so far from international consciousness being a rising factor, at the moment it is diminishing. Above all, there is less

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internationalism in the United States and that is part of the problem, which has been referred to, of the finances of the United Nations.
When the United Nations headquarters were placed in New York—I hope the noble Lord, Lord Gladwyn, agrees—one of the reasons for the choice was that it was thought that the presence of that institution in the United States would mean a greater devotion to it on the part of the American people and consequently of their government, than had been the unfortunate experience with the League of Nations set up in Europe. For a time, intermittently, that has been true. But it is clear that that devotion, even in the ordinary sense of prompt payment of subscriptions, is lacking. There is no pressure on the American administration to pay its bills. Therefore, when we look at any of these problems, we must ask what can be done with the resources available.
As was suggested by my noble friend Lady Park and the noble Lord, Lord Greenhill, we can try to tighten up the administration and to get away from the assumption that jobs in the United Nations should be dealt with, as in some societies, on the basis of quotas for everyone rather than of the search for merit and capacity. However, part of the effort must surely be in the regulation of the number of tasks that are undertaken; that is, cultivating a sense of priorities. An enormous effort has been made and we see, as the noble Lord, Lord Judd, reminded us, that it is insufficient to deal with one immediate menace—the prospect of Iraq retaining weapons of mass destruction.
Another immediate menace also referred to by the noble Lord, Lord Judd, is one of the many consequences that may arise from the break up of the Soviet empire: that is, the threat of the distribution around the world not only of nuclear weapons but also of nuclear scientists. I believe that to be a relatively manageable affair financially; that is to say, it could be done as was suggested to me by (since it was a private occasion) "an eminent European statesman", by assisting in the setting up in the Soviet Union of a research institution, paid for by Western funds, in those fields of science. That would give employment to people who yesterday were among the best paid in the country and today earn the lowest possible incomes, something which places a heavy temptation on them to respond to offers from abroad.
At the same time, it is becoming increasingly clear that, if the accidental explosion of the weapons in question is to be avoided, there will be a requirement for technical help from those scientists and their Western compeers in disposing of them with the minimum danger.
Those are at least two of the immediate priorities. A third is again one which raises all the questions of principle mentioned by the noble Lord, Lord Judd, and others—Yugoslavia. Is it really conceivable that we can now abandon, as has been suggested, the core of the United Nations charter; that is, nonintervention in internal affairs? Yugoslavia is the most conspicuous example; there are many others around the world. It increasingly looks as though the conflicts
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of the future and the wars to which reference has been made which make nonsense of the idea that we have enjoyed 40 or 50 years of peace are nearly all the product of tensions within rather than between states.
We shall not see many more Saddam Husseins conquering a small neighbouring country. What we fear, and rightly, is the external explosion of internal conflict. Under the United Nations charter we do not have the power to intervene: that has been one of the problems of peace-making and peace-keeping. Until we have that power, the best hope of a new Secretary-General is that he should look carefully at what can be done with the limited resources in manpower and money at his disposal rather than attempting, much as the idealists among us would like, to solve all the problems of the world.
6.26 p.m.
Lord Monkswell: My Lords, we all thank my noble friend Lord Judd for introducing the debate on the United Nations at a time when a new world order has been declared. I want to touch on that specific aspect. I feel that the United Nations as the harbinger of a new world order is faced with instability.
The United Nations represent an embryonic world government. I say "embryonic" because it is in the early stages. Perhaps I can describe it like this. It is at the same stage that this country's government was at in 1831–32; that is to say, it is 160 years behind the times. As an aside, it is interesting that over the past year or so we have seen the fracturing of the agreement of Yalta, a product of the last war. There may be historical parallels in the changes in the government of the United Kingdom in the early 19th Century following the, effectively, period of stability after the Napoleonic wars, when the victors of those wars held sway.
Why do I raise the matter? The United Nations is 160 years behind the times and is unfair in representing people. Around 160 years ago Members of the House of Commons represented various sizes of constituency. We have the example of Old Sarum, about which we all learned in our school history lessons. It returned a Member of Parliament with only a handful of constituents, whereas whole towns and cities like Plymouth were without representation. I am proud that one of my ancestors was one of the first Members of Parliament for Plymouth, returned in 1832.
For 160 years or so we have had a United Kingdom House of Commons comprised of MPs representing roughly equal numbers of people. That has given us unprecedented internal peace and prosperity. If we look at the make-up of the United Nations we can see that there are two problems with representation—democracy and effective government. The first is that the General Assembly represents people unfairly. Countries with populations of less than 1 million people have a seat on the General Assembly; other seats in the United Nations represent over 1,000 million people. We must seek a reform of the United Nations General Assembly in such a way that it represents people fairly.

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My constituencies of about 50 million people would, interestingly, give the United Kingdom a seat in the United Nations, as they would other interesting groupings such as the state of California which would have at least one seat. The specific number is not important, but the principle is that every member of the United Nations General Assembly—I believe that we will have to change the name slightly because it would not necessarily be the United Nations as such, but a world assembly—should, broadly speaking, represent the same number of people.
The other problem is the make-up of the Security Council, which is effectively the executive of the United Nations. To have a membership which is determined really by who won a war 47 years ago is surely an anachronism. The executive of this world assembly should be democratically representative of people in the same way as the General Assembly would be. So far I have spoken about fairness. That would be reason enough for the changes in the United Nations that I have suggested, including the idea that every human being has equal value and rights at the ballot box. That is a very powerful argument and one which everyone in the United Kingdom, Europe and North America, and virtually around the world, would agree with.
However, an assembly of the kind I am speaking about would have tremendous potential for building a much better world for all of us. We should learn not just from our own experience, but from that of Europe and North America. The development of equality of representation in this country over the past 160 years has enabled our forefathers and ourselves to devise a set of laws which are accepted by all. There is a fair taxation regime, the blip of the poll tax excepted. We have a society where people work together to provide a comparatively high level of public services. It also provides a ready market for private producers of goods and services to sell their wares.
Effectively, it is people working together for the common good. I have put in my notes the words "our green and pleasant land". I believe that the greening of our political establishment is something that we all welcome. Let us use our experience to help not only ourselves but our fellow citizens around the world to make the whole world a better place for all of us to live in.
6.32 p.m.
Lord Kennet: My Lords, the world we face now is bewildering. Lift a great weight, and what had been under it will heave and shudder. However, if we think of what has happened as a return to normal, we may find our way. In an abnormal half century, Europe and the world were divided into two petrified camps. It is normal that the world should be multiple, disordered, shifting, opaque. We should prefer it that way. Anything is better than the waste and rigidity of the cold war. It is the waste of those years that we must now recoup. And if to draw on the experience of 100 years ago rather than that of our own youth is the price, it is not a high one.
What we did not have a hundred years ago was the United Nations, and that is the key from now on. I
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shall speak first about the political aspect of Mr. Boutros Boutros Ghali's new job: first, about the embers. I was doubtful about our Government's instant offer to Mr. Yeltsin to take up the Soviet Security Council seat. But, given the slowness of the West to realise the full implications of the disaster in what used to be the Soviet Union, I expect the Government were right to do so. At least it provides the new grouping with a public, high-level channel of communication with the outer world.
But Mr. Yeltsin cannot stop the ex-Soviet armed forces selling off their equipment, or the nuclear weapon specialists emigrating and taking service elsewhere. They must be paid to do otherwise. The noble Lord, Lord Beloff, spoke wisely about that. Who will pay them? They should not all go to the United States: they should go to the International Atomic Energy Authority. And so indeed should the quite large number of American nuclear specialists who are also losing their jobs. The United States is now making no nuclear weapons. If the United States wants to admit more people from the ex-Soviet Union, let them admit those Jews who do not want to go to Israel where settling them is causing the world so much trouble.
Perhaps I may amplify a suggestion I made recently. The Security Council should now make it possible for the IAEA to carry out its long-standing task to the full everywhere in the world by giving it enough money to hire all the nuclear weapons people as inspectors and get them where they are needed at once for nuclear weapon destruction, for nuclear weapon prevention and perhaps for improving the safety of the world's nuclear power stations as part of their function of promoting civil nuclear power.
Where is the money to come from? Some of it of course will come from the United States, which is already prepared to find large sums for a programme of unilateral action to buy these people away from employment in Iran and so on. The rest has to come from UN members in general. The need is not difficult to understand; nor is it difficult to present to domestic opinion. This is true defence expenditure.
I turn now to problems which were always there but which were covered over by the late cold war. The new Secretary-General can do nothing without minimum agreement among his members, and that we must strive for. They must agree that whatever their differences in economic strength and internal organisation, they are, as members of the UN, equals. They have equal rights to pursue their own interests in the United Nations and an equal duty not to seek to try to put it to new and unjustified usage.
The new world order, about which Mr. Bush enthused before "America first" hit the election campaign, was to be a world of law, with the United Nations at its centre. That means that the world court of justice must also be at its centre. Security Council resolutions have come to be divided into two kinds—those that are to be obeyed on pain of military coercion by forces approved by the Security Council, and those that may or may not be obeyed, according

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to choice. Iraq is indeed being forced into observance of Security Council resolutions; Israel is left free to make its own choice.
State terrorism also comes in two kinds; that committed by the governments we like and that committed by governments we do not like. To say that is not to suggest that we should like the governments that we do not like, only that in a world of law it is for the international court to decide who is in the wrong, not for the individual members of the UN, nor for the Security Council.
Security Council resolutions are now being devised against Libya because of the Lockerbie crime. But as they point out in Libya and in Iran, there were no resolutions against the United States when that Security Council member shot down an Iranian civil airliner, on its announced route, with loss of equally innocent life. Back home, the naval officer who was guilty of that attack was actually decorated by President Reagan.
One could go on noting the bias which perceived power is able to bring to the advantage of one or another UN member: the United States attack on Panama, the mining of Nicaraguan harbours which the international court of justice declared unlawful—a judgment which that Security Council member had declared in advance it would ignore.
The United States has in fact been seeking, rather successfully, to turn the Security Council into instant legislator, judge, jury, policeman, gaoler and executioner. For a new world order that will not do. It may be legislator, policeman and executioner, but it may not be judge and jury.
Today, we see an attempt being made not only by the United States but also by our own Government to reinterpret the Montreal Convention of 1971 for the suppression of unlawful acts against the safety of civil aviation and to claim a right of extradition over the two suspects now in Libya. In international law, that right doe not exist. Mr. Douglas Hogg says that it ought to exist because Libya is a tyranny. Libya is indeed a tyranny, but that does not change international law and create the right.
There will always be tyrannies. We have to live with them under the law, as we have to live with others. Article 14 of the convention clearly states that its interpretation is not for individual governments; it is first for arbitration, and then, if that fails, for the international court of justice. Do the British Government intend to go to the international court about Lockerbie? If not, why not? Gadaffi now seems to be trying to return to the international community, and his recent attitude to the Lockerbie affair has not been incorrect.
If we want the United Nations system to work, if we want a more law-abiding world, it is essential not only that he and his like recognise the law and abide by it, but that we do too. I have tried to discover if the Government have stated that they will not allow American forces in Britain to be used against Libya without a full Security Council mandate, and I have not yet had an answer. Is another such situation brewing in Iraq? I have in mind the recent stories that
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Saudi Arabia invited the Americans to arm the Kurds at Saudi Arabian expense. That does not really carry conviction. What is the Government's opinion? In conclusion, this country ought to impart some precision to the windbag catchphrase, "A new world order". Let us refine it to, "World order under world law".
6.42 p.m.
Lord Desai: My Lords, my noble friend Lord Judd has already admirably summed up the many challenges that the new Secretary-General of the United Nations will face. Let me supplement his remarks by concentrating more on the economic challenges that face the United Nations. There are opportunities created by the fact that not only has the cold war ended but another significant development has taken place in the last 10 years, and that is the globalisation of the world economy.
Trade has grown at a tremendous pace in the world, as have financial transactions. Indeed one would calculate that if one were to put no more than a 1 per cent. tax on the world's imports or exports it would yield something in the region of £40 billion, five times as much as the budget of the current United Nations system as a whole. If one were to tax financial transactions, a one-hundredth of 1 per cent. tax would yield an equal amount of money. That much money is sloshing around the world now thanks to the growth of deregulated financial markets and freer trade. On the opposite side of this great gain is the trade in drugs and armaments and of course the global effects of any environmental disaster that we may have to face.
The globalisation of the world economy creates opportunities and it creates costs. Thus far the United Nations has been only reluctantly and in a piecemeal fashion taking an interest in regulating, or intervening in, or reforming the economic side of world affairs. We have the various agencies in NEDO, FAO, UNCTAD, UNDP and so on, but what we need at this juncture of the world's development is some sort of a unified view on what it would take to construct a system of global governance created with the co-operation of the many nation states of the United Nations—a system of global governance which will protect the world against the adverse effects of the rampant trade in drugs and armaments and the many effects not only of environmental pollution but the likely effects of the global spread of diseases such as AIDS or the effects of terrorism.
We have other worldwide problems such as famine. We need some sort of structure in the United Nations, some sort of reformed, expanded or rethought Security Council that would not only take upon itself the settlement of political quarrels and political problems but take a unified and co-ordinated view of the economic and environmental problems facing the world. Not so long ago the Prime Minister was suggesting that emergency relief should become a special concern of the United Nations Security Council. It is not only emergency relief but other questions that I have mentioned that need now to be put into a basket and made the responsibility of perhaps an expanded Security Council whose

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structure can be rethought. That should be the responsibility of the new Secretary-General, who arrives in his post at a crucial and important juncture.
If we could encourage the Secretary-General to think of the economics of global governance in an imaginative way, with expert advice from the many nations of the world which possess such expertise, then we would indeed have made a major contribution to perpetuating the United Nations as a strong and effective body.
6.46 p.m.
Lord Marlesford: My Lords, I was struck by something that the noble Lord, Lord Cocks, said about how we are going to view in retrospect the coming down of the Berlin wall. I wonder whether we shall see it as ushering in a period of great peace and prosperity or whether we shall see the world once again facing the uncertainties and dangers of the 1930s. The prime function of the United Nations is peace-keeping. This means that its main role is political rather than economic, social or environmental.
In many ways those issues are best left to separate bodies such as the GATT, the World Bank—which was referred to in rather an unfriendly way a few moments ago—or the IMF. The aspirations of world government to which the noble Lord, Lord Desai, has just referred are noble indeed, but I doubt whether even the latest potential arrival to your Lordships' House will see it in his lifetime.
I myself am a bit cynical about some of the United Nations agencies, or at any rate sceptical of them. Some years ago I had a certain amount to do with the FAO. While I had great esteem for the diligence, dedication and skill of the extension officers who worked in the field on the problems, a week at FAO headquarters in Rome drove me to the conclusion that many there are rather second-rate bureaucrats whose chief interest is in the duty frees.
That may be unkind, but what I want to do this evening for a few minutes is to focus on the United Nations' political role, and especially on the Security Council. I have no doubt that while the General Assembly is a talking shop—and it is none the worse for that— the heart of the United Nations is in fact the Security Council. Of course the most crucial component of the Security Council is the membership of five, with their power of veto. It is no accident that Britain is one of those five. After all, we were one of the five victors in a war against Fascism; a war that the old League of Nations had failed to prevent.
I suppose it had failed to prevent it for two reasons: first, the United States, which in those days was going through one of its isolationist phases—one hopes that it is not doing so again—was never a member of the league, and, secondly, the league had no teeth. It was to remedy that defect that the Security Council was created.
I realise that there are those who will increasingly question Britain's right to a permanent seat on the Security Council. We have just heard the noble Lord, Lord Monkswell, do so. The same question will probably be asked about France. People will say,
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"Why not far bigger countries such as India, Nigeria or Brazil, or far wealthier countries such as Japan or Germany; or why not a single seat for the European Community, with a veto in the hand of M. Delors or his successor?" The question answers itself. One cannot have them all so let us hold fast to the present admittedly arbitrary selection.
There is of course no way under the Charter of the United Nations in which Britain, France or any of the other five can be involuntarily removed. Under Article 23, our own permanent seat, with its veto, enables us to remain there for as long as we wish, for the United Nations constitution, rather like the Treaty of Rome, can be amended, under Article 108, only with the agreement of all the permanent members.
There are perhaps three conditions for the best use of the Security Council. The first is that the five permanent members should agree on more than they disagree. During the cold war that was not so. At that time the almost Pavlovian use of the veto by the Soviet Union meant that many opportunities for world peace-keeping were missed. Indeed, I believe—I recognise that some noble Lords on the other side of the House will not agree with me—that had the nuclear weapons of NATO and the Warsaw Pact not enforced a sterile peace through bitter confrontation—we all remember Mr. Kruschev taking off his shoe in the General Assembly—there could have been a really large-scale disaster.
Secondly, the existence of the veto means that the Security Council is taken seriously. It matters that the permanent members have to agree before the formidable sanctions of international law can be invoked. This imposes a real responsibility for the careful use of the veto so as to reflect rather than defy world opinion. Britain has little to reproach itself with over the years on the use of the veto.
Thirdly, it is crucial that the permanent representatives of the permanent members have great diplomatic skills. This means that there should be professional diplomats and not politicians in the job, something which America has only recently begun to learn. Britain has had some outstanding representatives who have served British and world interests very well. I would single out three. One has already been mentioned. I refer to the noble Lord, Lord Gladwyn. As a schoolboy my earliest recollection of the United Nations is Sir Gladwyn Jebb taking the odious Vyshinski, the tool of Stalin, to task. Another outstanding representative was Sir Anthony Parsons, whose skill obtained the Security Council mandate for us to liberate the Falklands from the Argentine invaders and, as a by-product, and much more important, to liberate the Argentine from an unpleasant military dictatorship. My third example would be Sir Crispin Tickell, who did so much behind the scenes to get the five permanent members to work rapidly together to get the United Nations into action in the Gulf. The Gulf War should be a model for how the UN can maintain peace.
The maintenance of peace has three components: making peace—UN diplomacy; keeping peace—the Blue Berets; enforcing peace—military action, when necessary, within international law against aggressors.

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I believe that in peace enforcement it is far better that the military operation is delegated by the UN to those countries that have the military capability rather than to have a rag-bag United Nations force. Britain has in this respect a considerable contribution to make. That will be one of the justifications for the maintenance of our Armed Forces at a high state of efficiency.
Our permanent seat on the Security Council, like our nuclear capability, gives Britain a disproportionate influence in the world. I am not ashamed of that. I wish to maximise my country's influence in world affairs because I believe that our historical, cultural, ethical and political traditions make it a benign influence.
6.55 p.m.
Lord Ennals: My Lords, I wish to follow the noble Lord, Lord Marlesford, in only one respect. When he said that he was perhaps a little unfair to some of those who have served in the United Nations I agreed with him. In many of the agencies, and in the United Nations itself, I have met some fine people. It is not fair to pick out one or two who may have been duff characters. One finds them in any situation.
I should like to start by congratulating my noble friend Lord Judd. I do not think he will mind if I am slightly personal. He had a great father who made an important contribution to the work of both the League of Nations Union and the United Nations Association. I was proud to have been appointed some 47 years ago to serve under him when my noble friend was a little boy. At that stage I doubt whether either of us thought that he would ever open a debate in your Lordships' House, let alone that I would have the opportunity of being one of the last speakers in that debate.
My noble friend has already made a great contribution to the United Nations through his work in government and through his work for Voluntary Service Overseas and Oxfam. I am sure that he will continue to do so in your Lordships' House. If we are going to look at others who have nobly served the United Nations over the years, perhaps I may pay tribute to my noble friend Lord Richard on the Front Bench. He was a remarkably able representative of Her Majesty's Government during the period of a Labour Government and I had the privilege then of working with him.
We are welcoming Dr. Boutros Boutros Ghali as the new Secretary-General of the United Nations. In doing so we should also pay tribute to Dr. Javier Perez de Cuellar who served the United Nations in a remarkable way during a difficult period of 10 years. I am sure that the House would want to send him a message of goodwill saying "You deserve the best, but come back, as Sir Brian Urquhart has come back, to give us some of your wisdom".
What a remarkable change has taken place in the United Nations since the time 10 years ago when Dr. Perez de Cuellar became Secretary-General. Like my noble friend Lord Judd, I looked up the debate in your Lordships' House in 1985 initiated by the then Archbishop of Canterbury. Except for my noble
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friend Lord Cledwyn I am the only other noble Lord present today who spoke in that debate. We heard remarkable speeches from the Archbishop, from the late Lord Caradon, from the noble Lord, Lord Home of the Hirsel, from the noble Baroness, Lady Elliot, and many others. I appreciate the point made by my noble friend when, quoting Conor Cruise O'Brien, he said, "Hardly anyone has much time for the UN". That was the case just seven years ago.
Reading through that debate many of us sounded as though we were thinking up excuses for the limited successes of the United Nations. What a difference there is today when we see Blue Berets being asked to deal with situations in El Salvador, the Argentine, Lebanon, Namibia, West Sahara, Cambodia and now in Yugoslavia.
I wish to follow up a point made by the noble Lord, Lord Beloff. With the likelihood of United Nations involvement in Yugoslavia, we may be seeing, as my noble friend Lord Judd said, the beginning of a breakdown of the mythical boundary between internal and international affairs. That has been a great block to the service that the United Nations might have been able to perform. I am glad to see that this blurring of the edges may give to the UN an opportunity to help to deal with situations in many parts of the world.
I also welcome the fact that the Prime Minister has taken advantage of Britain's presidency of the Security Council to attend and preside over a Security Council summit which is to take place in just a few days' time. Years ago, on behalf of UNA, I remember on many occasions seeking to persuade Prime Ministers and Foreign Secretaries to do just that. But the UN was not popular at that time. I believe that the fact that the Prime Minister has decided that it is a jolly good time to appear on the world stage, presiding at a meeting of the Security Council, shows how popular the United Nations has become.
I agree with the noble Lord, Lord Greenhill. It is important that some reference should be made to the funding problems at this particular Security Council meeting. We must judge countries by the way in which they fulfil their obligations to the UN. I say that in a number of other respects. The people of the world are not just influenced by speeches; they are influenced by actions. The speech that the Prime Minister will give at the Security Council will be of great importance. We shall hear what he has to say about global security, peace-keeping, the arms trade, the problem of the Kurds, the Middle East talks, Eastern Europe, the old Soviet Union and many other issues.
In reality, actions speak louder than words. Many of us will be watching government action on issues which are very relevant to the United Nations. Perhaps I may give your Lordships one or two examples. I refer, first, to the size of our aid programme. In 1979 the United Kingdom gave more of its GDP—0.52 per cent.—than any of the other G7 countries. However, the figure has now slipped to less than 0.3 per cent. and we are now in sixth place. That is not good enough.
Secondly, there is the Government's performance on green issues. My noble friend Lord Hatch of Lusby referred to the UNCED conference, and I shall return

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to that subject if there is sufficient time. In terms of our performance at home, we are lagging behind many of our European partners. There is not much point in thinking that by making speeches on international platforms we can give a great lead and then not fulfil our obligations in the home situation. Indeed, we are again before the European Parliament for being in breech of our obligations.
Thirdly, I turn to the question of arms supplies. We talk a great deal about disarmament, but we seem to be grubbing around for arms sales. We have a recent example of that in the case of Indonesia, with its oppressive measures against East Timor. Fourthly, I turn to to the question of refugees. In my view, the Asylum Bill which is now before the House conflicts with the commitments made in the 1951 refugee convention. I should also add that our support for the right of self-determination in international law needs to be looked at again. I welcome the fact that the Prime Minister saw the Dalai Lama on his recent visit to London; but there is, as yet, no sign of Britain arguing the Tibetan case for self-determination with the Chinese.
I believe that enormous problems lie before the United Nations. The UNCED conference is perhaps the most important conference which will be held during the year. It will deal with issues of poverty, the environment, global warming and, by diversity, with the problems of debt, forestry and trade. All those issues are absolutely fundamental to the future of the world in which we live. Ultimately, however, the success of the United Nations depends upon the commitment of nations and that, in turn, depends upon the commitment of individuals. As we move towards the 50th anniversary of the United Nations, I hope that Peers on all sides of the House will use their influence and power to strengthen the United Nations and, in this country, the United Nations Association of which my noble friend Lord Richard has for some years been a very distinguished chairman.
7.4 p.m.
Lord Rea: My Lords, I shall be the fifth speaker this evening to mention the name of Sir Brian Urquhart, who probably knows more about the United Nations than any other noble Lord present in the Chamber. However, perhaps I should except the noble Lord, Lord Gladwyn, from that observation. Sir Brian was interviewed in the Observer last week. In that interview he compared the United Nations to his mother's refrigerator. He said that he and his brother gave the fridge to his mother, who until then had relied on bowls of water to keep things cold. After a while he asked his mother how she liked it. "It's useless", she said, "It doesn't work". He then found that it had not been plugged in.
As well as comparing the United Nations to a fridge, Sir Brian also compared it to a sheriff's posse,
"which gets together when the horse has already left the stable, to go charging off into the night to try to do something".
He feels that the United Nations should change its stance from being reactive to being preventive. Here I fully endorse the words of my noble friend Lord Judd, who emphasised the same need. I think that that also
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applies to the disasters to which my noble friend Lord Desai referred; in other words, there is a need to anticipate them.
Even now, as noble Lords are aware, there are long-standing Security Council resolutions which were passed in the 1960s and 1970s requiring nations that have illegally and forcibly occupied the territory of other nations to withdraw. I am thinking especially of Israel's occupation of the West Bank and the Indonesian occupation of East Timor. In both places the resident population is being flooded with settlers and human rights abuses are a constant occurrence. But we have to ask whether the Security Council, even now when there is no automatic veto, has the courage to act. As my noble friend has pointed out, there are powerful vested interests which are preventing the proper functioning of the Security Council.
But apart from peace-keeping, the United Nations has many other roles in a very imperfect world. It has many associated and specialised agencies, as other noble Lords pointed out. They could be playing a more effective role in decreasing poverty and assisting development than they are at present. Of course the best financed of them is the IMF and its associated World Bank. While they exist to help set up sustainable and profitable development which should assist developing countries and enable them to climb out of poverty, all too often, as my noble friend Lord Hatch said, the reverse is the effect as readjustment of economies results in decreased expenditure on education, health and food subsidies. The increased export of cash crops may require land that has formerly been used for food production, thus resulting in an increased need for food imports as we have seen in Africa.
Too often the exports which the IMF programmes encourage result in little or no gain, as debt service swallows up export earnings; for example, in the 1980s Latin America exported more than ever before and had a very favourable trade balance which should have led to increased wealth and economic prosperity. But it did not generate enough income to service even the foreign debt. In fact, as noble Lords may be aware, the debt increased during that decade.
I hope that Dr. Boutros Boutros Ghali—I shall refer to him as BBG and I think that he will be referred to in that way in the future just as was the case with JFK in the 1960s-will be able to take enough time off from peace-keeping to look seriously at all these issues. I refer especially to debt and the alleviation of poverty. Ways of dealing with debt must be devised so that debt service does not cancel out the ability of developing countries to buy non-military industrial and technical goods—I use the phrase "non-military" advisedly—from the factories of the North which need to sell them.
I hope that BBG will look seriously at the suggestions put forward by Susan George in her book entitled A Fate Worse than Debt. Her ideas were backed up by my noble friend Lord Judd in a Fabian Society article published a few months ago. Her idea is that developing countries should be required to pay external debts in local currency into a development fund, to be used inside the country concerned so as to

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develop local agriculture and industry for the benefit of its population. In that way politicians and others in those countries who squandered loans in the 1970s and 1980s, while building vast personal fortunes, would not be able to get clean away with it as they would if the debts were simply cancelled.
Last but not least, I hope that the new Secretary-General will not forget WHO, UNICEF and the United Nations Population Fund, all of which play a small but vital part in reducing infant and child malnutrition and mortality and encouraging a lower birthrate.
During the debate I briefly attended a reception in the Cholmondeley Room for the launch of the Little Foundation, which will fund research into the causes of cerebral palsy and brain damage in children. One of the main points at which it will look is the effect of nutrition on the mother while the child is in utero and the nutrition of the child in early childhood. It is now thought that the malnutrition affecting many mothers and children in the developing world is having a permanent effect on the ability of those children to develop their full intellectual potential. It is a vast problem. It is a human tragedy that many of the world's children will never be able to develop their full intellectual capacity.
Later this week the All-Party Parliamentary Group on Population and Development is hosting a conference, with government support, on "A European Agenda for Action on World Population" to be addressed by speakers from the UNPF and the IPPF which will underline the urgency of the problem.
From conflict control, through poverty control, to conception control, the new Secretary-General will have his work cut out. I hope that the Minister will be able to ensure that the United Kingdom gives him full diplomatic and, as other noble Lords have suggested, increasingly generous financial support to enable him to carry out his tasks.
7.12 p.m.
Lord Bonham-Carter: My Lords, I join other noble Lords in thanking the noble Lord, Lord Judd, for having given us an opportunity, no matter how brief, to discuss the huge, manifold and various problems that face the new Secretary-General in his new, daunting and important task. There has been, with the marginal exception of some scepticism on the part of the noble Lord, Lord Beloff, general agreement that after 45 years of confrontation between two nuclear super powers, the prospects today for international co-operation are probably brighter than they have been at any time during those past 45 years when my noble friend Lord Gladwyn laid the foundations of the United Nations.
The chief instrument for encouraging that co-operation and for enabling it to happen and flourish is the United Nations. I suppose that its ability to do that will depend, above all, on its leadership—the new Secretary-General—on the effectiveness of its organisation, and, perhaps more than anything else, on the support and political will of the international community. Some of your Lordships
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have ascribed the outbreak of the Second World War to the deficiencies of the League of Nations. It seems to me that most of those deficiencies can be ascribed to the lack of will of the great powers who had the responsibility to support it.
The absence of the United States was a misfortune. The lack of will displayed by successive leaders of this country at that time in the case of Abyssinia, the Rhineland and Czechoslovakia is something the noble Lord, Lord Marlesford, might care to remember. The United Nations' vast responsibilities are such that, as has also been widely agreed, if it is to carry out those responsibilities, it must be reformed. Although some have expressed scepticism as to the possibility of effective reform taking place, anyone who read the words of the much-quoted Sir Brian Urquhart would learn some of the steps which could be taken to improve its effectiveness.
For one thing, some of your Lordships have criticised the way appointments are made within the United Nations. There is one appointment—the way in which it is made could well be improved—which has nothing to do with the internal politics of the United Nations, but has a great deal to do with the great powers. That is the way in which the Secretary-General is appointed. Sir Brian, together with Erskine Childers, makes constructive proposals as to how that might be improved.
It is also suggested that the Secretary-General's relationships with the agencies, which have been criticised by some of your Lordships, could also be put on a stronger and direct footing, and that he should be provided with deputies, which he requires, and some kind of cabinet for consultation. Last but not least, there is no reason, it is suggested, why we should not look at the composition of the Security Council, much as it would horrify the noble Lord, Lord Marlesford, who takes an attitude towards it that some Conservatives took to rotten boroughs in 1832. It is my view that we need to look at the composition of the Security Council. We need to ask, incidentally, why the British Government so precipitately recognised Russia as a member of the Security Council the other day. I should like an explanation of that action. The Minister may be able to give us good reasons. It may have been prudent; it may have been for reasons about which we do not know. It seemed strange that such a country, which was hardly established and which was in an extremely unstable condition, should immediately be put on the Security Council and given the veto. I look forward to hearing the Minister's explanation.
We must ask ourselves whether the Security Council is strengthened by the absence of Japan. We must ask ourselves, if that is so, whether Germany is not in the same position. And, if the European Community is developing a common security and common foreign policy, we must ask ourselves whether it would not be better that it was represented on the Security Council rather than Britain, France or Germany. Those are questions which we should address.
A number of other issues have arisen during the debate, not least that of the proper financing of the operations of the United Nations, in particular of its

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peacekeeping operations in which the behaviour of the great powers, many of them members of the Security Council, is nothing short of disgraceful. One of the first tests of the new Secretary-General will be whether he forces the United States to pay up the subscription which it owes the United Nations' regular budget and its peacekeeping operations.
There is one topic I should like to raise which was mentioned by the noble Baroness, Lady Park, and the noble Lord, Lord Beloff, and that is our attitude towards interference in the internal affairs of other nations. We must ask ourselves whether we any longer believe that it is wrong to interfere in the internal affairs of so-called sovereign states. I should have thought that it is now widely accepted that respect for human rights and the way in which minorities are treated are matters of international concern. They were brought into the international arena, not necessarily for the first time, but publicly, at Helsinki in Basket 3. They are matters in which the Council of Europe interests itself daily and monthly. They are a condition of becoming a member of the European Community.
Thus, in all those ways, essentially internal matters have become matters in which we are prepared to interfere. But we have gone far beyond that; for example, in our attitude to Serbia and Croatia recently. Compare our attitude to those countries with our attitude in the case of the Nigerian civil war some years ago. It is also true that the treatment of minorities and respect for human rights have international implications. As has been said, we are debating the Asylum Bill next week which concerns refugees. It is clear that the refugee problem, which has escalated in the past few years, cannot be solved individually, country by country. It is an international problem with international implications in which, in my view, the United Nations must be involved.
If we believe that we should interfere in the internal affairs of other nations, we must decide what the rules of interference are. I believe that Europe is a good place in which to examine the problem—possibly through the CSCE, in conjunction with the United Nations—and to work out how, when and by what means, interference in the affairs of other nations is a legitimate and constructive role for the international community to play in the cause of better international relations.
7.21 p.m.
Lord Cledwyn of Penrhos: My Lords, we are all grateful to my noble friend Lord Judd for his powerful speech and for the Motion, which enables us to look at the United Nations and its prospects at a moment when it has reached a watershed in its short history. I join my noble friend Lord Ennals in paying a warm tribute to Senor Perez de Cuellar for his work during his tenure as Secretary-General. He served through a remarkable period in history which included the Gulf War. While it is too soon to make judgments about him, we can say he was a Secretary-General of integrity who was a patient, assiduous negotiator who never sought the limelight.
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The new Secretary-General, Dr. Boutros Boutros Ghali, is highly respected in his own country. He played a major role in achieving the Camp David agreement. He is well versed in international law and is an experienced administrator. I believe that Dr. Ghali must be given the opportunity to settle down and he must be supported by those who appointed him. We wish him well.
One of his major tasks will be, as the noble Lord, Lord Bonham-Carter, suggested, to propose much needed reforms of the United Nations organisation to meet the needs of the post-cold war era. It implies reforming his own secretariat, which is said by many to be too cumbersome. It means trying to make the General Assembly more effective. One senior member of the secretariat has said that there were too many agenda items, a large proportion of which are stupid, trivial and self-serving.
Then there is the question of the Security Council itself. Can it continue indefinitely with the Permanent Five in charge? Who are the largest contributors to the United Nations after the United States? I leave Russia out of the reckoning for the moment. They are Germany and Japan. One doubts that they can be excluded indefinitely from the council. These are matters for the future, although they will obviously have important implications for this country.
As the noble Lord, Lord Greenhill, reminded us, the Security Council meets next week in what could and should be an important meeting not least for the new Secretary-General. Sir Brian Urquhart, a senior member of the UN Secretariat for over 40 years, argued last week that a more reliable international system is needed. He said:
"If you are looking for a calmer world, you have to make the international system not so much reactive—as it has been up to now—as preventative of unnecessary and unexpected crises".
He makes a reasonable point and one which Dr. Boutros Boutros Ghali will note—namely, that the time has at last come to consider operating Article 43 of the United Nations Charter. This article provides that the United Nations can make armed forces and other assistance available to the Security Council for maintaining peace and security. I think this is a point with which the noble Baroness, Lady Park, would agree. It would give the Security Council the authority to deploy an international force quickly in a situation where the cycle of violence could not be broken except by firm intervention. It could save hundreds of thousands of lives in certain situations.
Sir Brian argues that the military staff committee of the United Nations is under-used, and that seems to me to make sense. But his main theme is that new initiatives are at last possible now that the cold war is over. In my opinion, no one is better qualified to give advice than Sir Brian Urquhart and his words should be heeded.
Another problem which has been mentioned by noble Lords during the debate is the shortage of money. We are told that there is a constant shortfall and, if the United Nations is to send peace-keeping forces to Yugoslavia and elsewhere, the money must be found to pay for them. Perhaps the noble Earl will inform us of the current financial position. My noble

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friend referred to the break up of the Soviet Union, which again will inevitably create new financial and political problems for the world.
To return to finance, the United Nations is virtually bankrupt and one of the main debtors at the moment is the United States of America, whose arrears were £344 million last November. This puzzles me, as a friend and supporter of the United States, because that country is the moving force behind the organisation. The United Nations depends upon the United States especially at the moment. Eighty-four other countries are so far behind in their contributions that the United Nations is currently owed 1.8 billion dollars. We are informed that Dr. Boutros Boutros Ghali has set himself the task of reforming the organisation in the next 60 days. That is ambitious and I hope he succeeds. The first action he might take is to summon the debtors to appear in a Welsh county court. That would create problems! He will certainly need the cash if the peace-keeping forces and other obligations are to be met.
My noble friend Lord Judd speaks with acknowledged authority on the problems of the third world and I know that the noble Earl will take note of what he has said. The end of the cold war, the Gulf War and the dismantling of the Soviet Union have completely changed the balance of influences in the United Nations. Third world countries exercised more influence when the Soviet Union and the West confronted each other in a power struggle in the United Nations. They sought support from both sides, they played one side against the other. It has been said that the non-aligned movement has had its day. I should like to ponder that for some time.
This scene needs careful analysis and I am sure that the noble Earl's department is carrying that out at present. Third world countries are very sensibly abandoning the shibboleths of Soviet socialism and seeking to put their houses in order. For doing this, they hope to receive more aid and new loans. The question is: will they? That is something upon which the noble Earl can perhaps enlighten the House this evening. But the urgent problems will not be resolved by well-meaning long-term reorganisation.
The United Nations needs to deal with starvation in the Horn of Africa, Albania and elsewhere. In the debate on arms sales in this House last June I quoted Mr. James Grant, the director of UNICEF. He stated:
"The Governments of the developing world as a whole now devote half of their total annual expenditure to the maintenance of the military and the servicing of debt … or more than 400 dollars a year for each family in the developing world".
That is indefensible. My noble friend Lord Judd dealt with it and these are some of the problems with which the new Secretary-General will have to grapple. But he can only do so if countries like our own support and sustain him.
Like my noble friend, while I recognise the significance of the political role of the United Nations, I believe that the infrastructure is of equal importance. Economic collapse, starvation and disease and the desperation of refugees—17 million of them, as my
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noble friend said in his speech—can all lead to civil unrest and to war. One distinguished reformer summed it up when he said:
"The strength of the United Nations lies in the areas where interdependence matters— Countries have to understand that there are some problems that cannot be resolved without a global mechanism".
That point was made by my noble friends Lord Cocks of Hartcliffe and Lord Hatch.
The new Secretary-General will need to look at this infrastructure whose activities span the world. He and his colleagues will need to satisfy themselves that the machinery is working and that the resources are adequate. I am, of course, talking about UNESCO, UNICEF, the World Health Organisation, the International Labour Office, FAO, UNHCR, all of which have been mentioned by noble Lords during the debate.
The noble Lord, Lord Marlesford, in his most interesting and thoughtful speech, expressed doubts about those agencies. They may have their flaws but they are of crucial importance nevertheless. Some flaws do not justify dismantling organisations which, in my view, are absolutely essential to humanity now and in the future.
We note, of course, that the World Bank and the International Monetary Fund do not come under the aegis of the United Nations although they are an essential part of the scene at this time. We wish the new Secretary-General, Dr. Boutros Boutros Ghali, every success in his crucial tasks. Britain has a good record as a supporter of the League of Nations and, since its founding, the United Nations. Let us do all we can to sustain the United Nations at this historic moment.
7.31 p.m.
The Earl of Caithness: My Lords, I, too, am grateful to the noble Lord, Lord Judd, for initiating this debate about the United Nations. I am grateful to all noble Lords who have taken part in this debate which comes two days before the high level meeting of the UN Security Council convened at the personal initiative of my right honourable friend the Prime Minister.
One of our aims in convening this meeting has been to reaffirm at the highest level our commitment to the United Nations and to the principles of its Charter. It has been gratifying to hear that commitment echoed throughout the House this evening. We hope that the meeting will help generate a debate and fresh thinking about the central role of the UN. It will, in short, help to initiate the kind of wide-ranging review called for in this evening's Motion and endorsed by many speakers in this debate.
It might be helpful if I refer in outline to the hopes we have of that occasion which will be the first meeting in the history of the council at the level of heads of state and government. We wish to see it mark the arrival of Dr. Boutros Boutros Ghali in his post of Secretary-General and assure him of the council's support. Further, we wish the council to reaffirm its commitment to the principle of collective security as embodied in the UN Charter. We also hope to stimulate discussion of new and better ways of

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preserving international peace and security. Finally, we hope the meeting will seek to build on the progress made in the control and reduction of armaments and on the non-proliferation of weapons of mass destruction. Those are just the kind of areas that noble Lords have referred to this evening. The noble Lord, Lord Bonham-Carter, stressed the importance of those areas.
We are confident that Dr. Boutros Boutros Ghali will fill his important post with distinction. We are glad to have had the chance to talk to him in his new capacity already when he visited London on 13th January. We look forward to continuing the close co-operation with him which characterised the relations between the five permanent members of the Security Council and his distinguished predecessor.
At this point I wish to join with the noble Lords, Lord Cledwyn of Penrhos and Lord Ennals, in thanking Senor Perez de Cuellar for the work he did when he was Secretary-General. As noble Lords have said, there are many problems facing the Secretary-General. Reform of the organisation as a whole will be one of his many responsibilities. If the Secretary-General is to succeed in this, he must have the necessary tools. He will have our support and I believe the support of the entire international community in taking steps to rationalise the sprawling structure of the UN Secretariat and in developing priorities. As my noble friends Lord Beloff and Lady Park of Monmouth have said, the UN needs to put its own house in order if it is to be fully effective. Dr Boutros Boutros Ghali has stated his commitment to secretariat reform. We wish him every success, but it was the noble Lord, Lord Greenhill of Harrow, who reminded us of the difficulties of such action. I noted the noble Lord's remarks.
The noble Lord, Lord Judd, mentioned a wide range of issues which cause all of us concern. He mentioned the nub of the problem, and this was referred to by many other speakers. None of the UN's work and no reform will be effective without the resources needed by the UN to perform its tasks. It is a regrettable fact that a great number of member states fail to pay their assessed contributions in full or on time. I am glad to say that the United Kingdom does not fall in that category. Our record of prompt and full payment is second to none. That applies as much to our share of the regular budget as to the costs of peace-keeping. It also applies to humanitarian relief and development assistance.
In the matter of voluntary contributions, here, too, we are proud of our record. One can always do more, but it is equally important that our funds are used effectively by the UN and its agencies. We as member states have a duty and responsibility to ensure the success of the UN. We take seriously the need to support its efforts by ensuring that it has the necessary resources to do the job. We look to other member states, and in particular those whose wealth gives no excuse for non-payment, to do the same.
The noble Lord, Lord Cledwyn of Penrhos, reminded us of the dismal state of financial affairs that exists throughout the UN system, including the main UN regular budget. The financial crisis, as it has come
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to be known, will be discussed at the forthcoming resumed session of the General Assembly. We shall take an active part in that to try to ensure that the outcome of the discussions results in a more workable financial situation for the UN.
I wish to comment on the peace-keeping role of the UN. That role is at the centre of the popular concept of what the UN does and what it should be doing. Indeed my noble friend Lord Marlesford said it was the raison d'être of the UN. The success and value of its peace-keeping operations have been widely acknowledged, not least by the award of the Nobel Peace Prize in 1988. The success of UN peace-keeping is proven by the huge increase in the number of operations since the end of the cold war. It is salutary to pause and think about that. Whereas only 13 operations were established in its first 40 years, since 1988, 10 new operations have begun. For the first time all five permanent members were asked to contribute to UNIKOM in 1991, thereby breaking an old taboo.
It is important to remember that UN peace-keeping is not a panacea for all ills. To keep a peace, there must be a peace to keep. The usefulness and success of UN peace-keepers depend heavily upon the willingness of parties to enter into dialogue and compromise. A viable cease-fire and full co-operation of the parties involved are necessary prerequisites for the deployment of any force. Nor is deployment the end of the story. We have no wish to see any UN peace-keeping operation become a permanent fixture. That is not a solution to a problem but the artificial extension of one. Alongside such operations we must also make every effort to bring the different parties together and help them work out a relationship that will ensure a lasting and unsupervised peace. That leads me naturally to comment upon a matter raised by the noble Lords, Lord Judd, Lord Cocks of Hartcliffe and Lord Bonham-Carter, and by my noble friend Lady Park of Monmouth which concerns Article 2.7 of the charter and the right of intervention.
Much attention is being given to the question of intervention, and in particular humanitarian intervention. It is difficult and probably undesirable to lay down rules concerning a right to intervene. Each case has its peculiar characteristics. The way Article 2.7 of the UN Charter is interpreted will continue to evolve. However, this is more likely to happen in the light of experience gained in tackling individual crises than by the formulation of a general right of intervention.
Many noble Lords tonight, including the noble Lord, Lord Judd, have focused on the development challenges facing the UN. I welcome that. I agree with the noble Lord that in an increasingly interdependent world, more and more issues facing developing countries need to be resolved within the framework of multilateral co-operation. I agree with the noble Lord, Lord Desai, that nowhere is this more critical than in the economic and social activities of the United Nations and its agencies.
The UN's development system, despite many of its successes, has considerable weaknesses. If we were starting from scratch today we should more than probably design the system differently so that it became a more coherent and co-ordinated vehicle for

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development assistance. Our starting point would be that the UN should focus primarily on economic and social issues that are global, urgent and vital—poverty alleviation, the environment and good government are just three obvious examples—and on issues which it has the resources and instruments to address.
In the agencies themselves we want to see more effective administration and governance, a better prioritisation of resources and stricter adherence to areas of specialisation and competence. I am sure that the noble Lord, Lord Rea, will agree that we want no overlap, no competition, but each agency doing what it does best. We are pressing for such reforms.
In no area has the UN faced greater challenges over the past year than in the delivery of emergency humanitarian relief. The catastrophe facing the Kurds was unfortunately only one of many. We thus greatly welcome the approval by the General Assembly on 18th December of a resolution to create the post of a senior UN disaster relief co-ordinator or "supremo" as part of a package to strengthen the UN's disaster relief systems. I was very surprised that none of your Lordships mentioned that in view of the debate we had not so long ago in which it was a common theme.
That post was originally an Anglo-German initiative arising from the clear lesson of the Iraqi crisis that the international community must be able to respond quickly and effectively to emergencies. Where better to start than with improving the UN's ability to co-ordinate both its own agencies and the international response.
But more than co-ordination, our proposal also envisaged a package including a standing committee on which all the representatives of humanitarian agencies should be represented to provide a central revolving fund of 50 million dollars. We were pleased that our proposals were welcomed by the NGOs and indeed that our full package was reflected in the UN resolution. It is important now to ensure that the Secretary-General receives the necessary funds to appoint someone to do the job.
We have already pledged 5 million dollars to the 50 million dollar revolving fund he will control. We were the first donor to make such a pledge. I am glad to note that some others have begun to follow suit and hope others will also soon follow. I know that the noble Lord, Lord Judd, has himself consistently called for such a co-ordinator.
The successful climax to our efforts only underlines—particularly to the noble Lord, Lord Ennals—what we are already doing in practical terms to support humanitarian aid through the UN and similar bodies such as the International Red Cross movement. In this financial year we have provided them with £61 million for humanitarian aid—some 44 per cent. of our total humanitarian aid of nearly £40 million. As long as the agencies continue to prove their effectiveness in delivering that aid, as we can expect with the co-ordinator's guidance, we shall continue to support them financially in their vital work. But we cannot do that alone. Other countries must also play their part.
I have mentioned that we see one purpose of the Security Council meeting in two days' time as
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reaffirming the UN's role in arms control and non-proliferation, another subject which was of great concern to the noble Lord, Lord Judd. Without arms control, international peace and security cannot be assured.
Britain actively supports the UN in its roles in that field. At this year's General Assembly, the highlight of the first committee's work was the adoption, by a massive majority, of a resolution tabled by the EC countries and Japan aimed at establishing a register of conventional arms transfers at the UN. That was a direct result of an initiative of my right honourable friend the Prime Minister and implemented one of the main conclusions of a UN study, chaired by a British expert, on promoting transparency in conventional arms transfers.
We attach the highest importance to an effective role for the UN in promoting respect for human rights. We shall be playing a full and active part in the work of the Commission on Human Rights, which begins its annual session this week. Our expectations, however, go far beyond the traditional functions of the commission. We look to the UN as a whole to set human rights, including the right to free and fair elections, at the centre of its aims and activities.
Environmental issues will be high on the UN's agenda this year. The 1992 UN Conference on the Environment and Development (UNCED) is to take place in Rio de Janeiro from 1st to 12th June. It is intended to address the complex relationship between environmental degradation and development and to draw up a comprehensive action programme for international activity into the next century. The UK is firmly committed to a successful UNCED and will be working to achieve that goal throughout the preparatory process.
The Geneva meeting mentioned by the noble Lord, Lord Hatch, is but one step on the road. I have nothing new to tell the noble Lord, but we took forward the commitment made by the Commonwealth heads of government in Harare and G7 leaders at the London summit to make a success of the final meeting in Rio de Janeiro.
The noble Lord, Lord Cocks of Hartcliffe, mentioned water supplies in the world. With the world's present population, that in itself is a problem, but when one considers the growth in population which the world faces it is even more of a problem. I sometimes think that we take for granted how lucky we are to have a potable water supply from our taps here. After travelling in the Far East it is a pleasure to return to what we take for granted here but those in the Far East do not take for granted.
The noble Lord, Lord Kennet, besides riding his usual hobby-horse of USA-bashing, mentioned Libya, and in particular the relevance of the Montreal Convention in relation to the Libyan bombing of Pan Am flight 103. We are studying with great care a letter we have just received from the Libyans. I am sure that the noble Lord will agree that it is important that we ensure that those responsible are brought to justice and that such tragedies do not happen again.
I should like to spend a little time dealing with a point raised by many noble Lords, including the noble

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Lord, Lord Cledwyn of Penrhos, concerning the reform of the Security Council. The Security Council is performing more effectively than it ever has. Reforming the council would inevitably mean making it bigger since there are a number of countries which would wish to press their case for joining if the opportunity arose. The result would be an expanded, and, in our view, more cumbersome and inefficient council, less able to meet the demands placed on it than the present arrangement. We have discussed just how many demands there are.
Moreover, reform of the council would entail reform of the charter itself, and that would be extraordinarily difficult. Many proposals have been made since 1945 to revise the charter but the only changes made have been those introduced in the early 1960s to give the newly independent countries of Africa and Asia more voting power. At that time four new non-permanent seats were created in the Security Council, increasing its membership from 11 to 15, and nine extra seats were created on the Economic and Social Council. The expansion of ECOSOC took, moreover, seven years to negotiate —an indication of how lengthy and divisive the question of reform can be.
Generally, the commitment of UN members to the principles of the charter as originally drafted has kept changes to a minimum. We believe that that is right. Under Article 109 of the charter a two-thirds majority of all United Nations members is required for charter amendment. Any alternation of the charter must also be ratified in accordance with the respective constitutional processes by two-thirds of the members of the United Nations, including all the permanent members of the Security Council. That is clearly very difficult. Our view, as stated by my right honourable friend the Prime Minister, is that reform of the charter is neither necessary nor desirable.
Also on the subject of the Security Council, the noble Lord, Lord Bonham-Carter, raised the question of Russia taking over the seat of the former USSR. Russia has been unanimously accepted by the members of the Security Council as the continuing state of the former Soviet Union. I am sure that the noble Lord will agree that to have done otherwise would have left a grave and irresponsible legal vacuum in terms of the Soviet Union's existing responsibilities. As Russia has taken over those responsibilities, as was mentioned earlier, I believe that we have done the right thing.
The noble Lord, Lord Cledwyn, raised the subject of aid to the former Soviet Union. Perhaps he will allow me to deal with the subject more fully next week in his very important debate on the issue.
The collapse of the cold war order has presented the United Nations with a host of unfamiliar challenges. But it has also given it the power to achieve results in dealing with them. The arrival of a new Secretary-General is a good moment to take stock and to look at ways in which the energies of the organisation can best be channelled in the future. We are determined not to let that moment slip. When the Members of the Security Council meet in New York in two days' time at the invitation of my right honourable friend the
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Prime Minister, they will have the chance to set a course for the council and the organisation as a whole for the coming years. The contributions to this evening's debate have furnished ample evidence why it is worth our every effort to give the organisation the support and commitment it needs.
7.50 p.m.
Lord Judd: My Lords, I should first like to thank all those who participated in the debate. It has been a very constructive and serious debate which has illustrated very well the wealth of talent and experience that exist in this House among people who have grappled with these problems from different angles over many years. I am sure we should all like to underline how good it has been, in the sense of continuity and the contribution that has been made over the years, to have had the noble Lord, Lord Gladwyn, present during the debate. It was sad that he was not able to participate in the discussion but his presence added importance and poignance to the occasion. It was good too to have my noble friend Lord Richard on these Benches for much of the debate. When I was a Minister of State at the Foreign Office I was able to see at close quarters the important and effective contribution that he made at a difficult time in the organisation's history.
I should also like to thank the noble Earl for the courteous, full and thoughtful way in which he responded to the debate. That augurs well for Britain's foreign policy. I should like to pick out one point which struck me as particularly significant. He dwelt on the issue of peace-keeping compared with conflict resolution. He was right to make that point. Obviously, the strength of the UN is measured in its effectiveness in peace-keeping; but that will never solve the underlying issues. There has to be a will and commitment to conflict resolution. I am sure that the previous Secretary-General worked very hard in that respect. We wish his successor well in all that lies before him. Indeed, I am glad that tonight we have sent that message of good will to Perez de Cuellar in that his has been a distinguished and effective contribution. It is a big pair of shoes for his successor to fill. We wish him well in taking up his post.
It came across more clearly than anything else in this debate—I found it very reassuring—that in this House there is a recognition that the first reality of existence is the knowledge that we live inseparably in an interdependent world. That is true strategically and environmentally and it is true on the issues of migration which preoccupy us at the moment. Therefore, the test of government—it is perhaps good to remember this as we come up to a general election —is not simply what they say that they will do within the geographical area which for historical reasons happens to be called the United Kingdom; the test is what they contribute to the viability and effectiveness of managing our interdependent—inseparably interdependent —world. The debate tonight has shown that there is a great deal of good will toward that objective as a priority in government.
I note that the Prime Minister is about to go to the United Nations. It has struck me in my political life

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that will is always central to results. If we want to get the Argentinians out of the Falklands, however extraordinary and daunting that task may seem, and if we are determined to do it, we do it. If we want to get the Iraqis out of Kuwait, however difficult, expensive and complicated it may be, if we establish the will and want to do it, we do it.
I should like to encourage the noble Lord, Lord Beloff, to cheer up. If there is the same degree of will brought to bear on this task about which there is so much agreement on the strategy, I am sure that we can bring about amazing results there too. Whatever our political differences, I am sure that we wish the Prime Minister well in his important mission to the UN.
I conclude by quoting one of the greatest international servants. He was controversial. Some may have approved of his approach and some may not. But there can be no doubt of his commitment to turning into effective government ideas about international co-operation. After all, he died in the front line in service to that cause. I quote Dag Hammarskjold:
"Never look down to test the ground before taking your next step: only he who keeps his eye fixed on the far horizon will find the right road. Life yields only to the conqueror. Never accept what can be gained by giving in. You will be living off stolen goods, and your muscles will atrophy".
I beg leave to withdraw the Motion for Papers. Motion for Papers, by leave, withdrawn.

Hong Kong: Democracy After 1997
7.55 p.m.
Lord Wyatt of Weefordrose to ask Her Majesty's Government whether they are satisfied with the arrangements made for the maintenance of democratic freedom and the administration of justice in Hong Kong after 1997.
The noble Lord said: My Lords, there are several problems which must be resolved if we are to do our best to ensure democratic freedoms and the proper administration of justice in Hong Kong after July 1997. I shall start with the composition of the Court of Final Appeal which will replace the Privy Council.
No one disputes that the Chief Justice of the Court of Appeal shall be a Chinese citizen, permanently resident in the Hong Kong Special Administrative Region. But the Joint Declaration of 1984 provides that the Court of Final Appeal,
"may as required invite judges from other common law jurisdictions to sit on the Court of Final Appeal".
Those words are repeated in the Basic Law, which emerged from the Joint Declaration.
But now the Government have agreed to Beijing's demand that there can be only one overseas judge in the Court of Final Appeal. The Legislative Council in Hong Kong strongly believes—I agree with it—that that is utterly wrong. It is insistent that the number of overseas judges should be at the discretion of the Court of Final Appeal itself, as was always intended. LEGCO passed a resolution to that effect by an overwhelming majority of over three to one. The court might not want to co-opt any overseas judges or it might wish to co-opt more than one; but insisting on
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the power of discretion of the Court of Final Appeal is not a trivial issue. It is a vital safeguard against the court being packed by judges who might be inclined to a more Beijing interpretation of justice than to the British approach, which has rooted itself in Hong Kong.
Her Majesty's Government must press for that. It is not in conflict with either the Joint Declaration or the Basic Law. Giving the Court of Final Appeal greater flexibility would in fact be helpful to Beijing. It would increase Hong Kong's confidence in Beijing's fair mindedness, making its relations with the Hong Kong Special Administrative Region smoother from the start. So would an agreement about the number of the People's Liberation Army to be stationed in the middle of Hong Kong. Beijing has hinted that there may be only about 3,000 troops, though that might well be too many.
The nature of soldiers everywhere is to drink occasionally and then have rows with members of the local population. Are PLA soldiers to be above the law if they start a fracas? There is a fear of unhappy incidents which could lead Beijing to impose some kind of martial law. That point must be clarified to protect Hong Kong citizens and allay their fears. The fewer PLA troops that there are in the middle of Hong Kong, the better. They can always be sent for instantly in an emergency. It must be in Beijing's interests to keep good relations with the local population.
The naval base is in the middle of the business district of Hong Kong. There are many suitable places, such as Stonecutters Island, to which the naval base could be removed without any loss of efficiency but with a gain in Hong Kong confidence that Beijing will not apply a heavy hand.
My next point concerns the functioning of the democratic parliamentary process. The Legislative Council contains 60 members; 18 were appointed by the governor and 24 were indirectly elected by a tiny number of voters in sections allocated to various professions and occupations. For the first time last September 18 members were elected by universal suffrage of the whole population. The United Democrats, led by Mr. Martin Lee, swept the board. Seventeen of those democratically elected seats are now held by those of liberal persuasion. They are not of the liberal democratic kind represented in your Lordships' House, but are staunch believers in capitalism and low taxation; though like all parties in the United Kingdom they claim to be concerned with improving social services.
The governor refused to put Mr. Lee on the Executive Council. In Mr. Lee's view he and his supporters are the only truly democratic representatives and should have formed a majority of the Executive Council, which is the equivalent of the Cabinet in this country. Now OMELCO, which represents members of the Executive and Legislative Councils, wants more universal suffrage in the 1995 election. It requests that half the members should be directly elected and only half elected by the indirect election method. That would differ from the Basic Law, but not by much. Beijing has already agreed that, in 1999—the election after that to be held in 1995

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—24 should be directly elected by universal suffrage and that, in the year 2003, 30 should be elected by universal suffrage. Beijing accepts in the Basic Law that after 2003 there should be a continuing progress towards universal suffrage for all the Legislative Council seats.
Our Foreign Secretary has said that he will raise the matter in Beijing, but without much hope of success; and he has not yet raised it. The British Government are afraid that by pressing the issue of a more democratically elected Legislative Council its members in Hong Kong will dangerously antagonise Beijing. But their constituents want them to press the issue. That is what they were sent to LEGCO to do. The Foreign Office says, "No, we know much better what's good for you". The great majority of the people of Hong Kong says, "That is for us to decide. You are not our nannies. It's we, not you, who will have to deal with Beijing after 1997".
I believe that we should let the people of Hong Kong act as they think fit, and that the governor should make no attempt to block any amendment that they make to the existing electoral procedures. I do not accept that if LEGCO decides to speed up the democratic process already accepted by Beijing that Beijing in July 1997 would immediately reduce the number of directly-elected members to 24. It would be very poor public relations if they did so, and they are not such fools.
I now come to the growing resentment against the British Government and Britain. The people of Hong Kong feel that we are so preoccupied with electioneering that we are ignoring their affairs at a critical moment in Hong Kong. They are appalled at our extraordinary behaviour in announcing the imminent removal of the present governor without naming a replacement. Sir David Wilson is now seen as lacking the essential authority to deal with Beijing. His faithful and loyal services do not merit that shabby treatment.
One strongly held view in Hong Kong is that the last British governor should be Her Majesty's ceremonial representative while waiting to haul down the Union Jack when Beijing takes over the last jewel of the British Empire. Otherwise he should be confined to matters of defence and foreign affairs.
The real work of administration, according to that thinking, should be done by a deputy governor, a local Hong Kong Chinese resident. It is an idea with much to commend it. But whatever the power of the new governor it is essential that he be appointed now to end damaging uncertainty. In my view he should be a person with presence, courage and high political skills. He should not be either a past or present civil servant, however distinguished.
Even if there were a deputy governor, it is of great importance that the new governor's proven wisdom and sensible advice should be available to the Hong Kong administration. The choice should not be a party matter. I understand that there have been no consultations between the Government and the Opposition as to who should be chosen. If that is so, it is unforgivable on a non-partisan matter. There is no reason why the new governor should not be a
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member of the Labour Party. In some ways it would be desirable. I can think of one noble Lord in your Lordships' House who, through his experience and vigour, would be admirable. I can think, too, of a second Labour Member in another place who would do the job excellently. However, I shall not name either publicly for fear of spoiling their chances.
In Hong Kong itself I know of at least two with the required ability—one Chinese and one British. Their names, too, I shall not mention publicly. I believe that either would have strong support from the local community, whether or not connected with business. Unfortunately, at present I cannot think of anyone now or previously in the Government who would be suitable. Of course, there might be such a person but he should be acceptable to the Opposition should he emerge.
Delaying the choice because of our election is shameful and foolish. It is understandably seen in Hong Kong as a parting insult both to Hong Kong and Beijing. Beijing is showing its good faith and confidence in Hong Kong's future by huge investments from its banks in Hong Kong. It is also showing it by its warm welcome to Hong Kong entrepreneurs in Guangdong. Already the people of Hong Kong employ over 3 million people in that adjacent province. With far higher wages, those people are learning the delights of capitalism and enjoying what, to them, are novel displays of uninhibited discussion on Hong Kong television and radio.
Beijing has described its takeover of Hong Kong as two systems in one nation. I do not believe that the rulers of Beijing have the slightest intention of wrecking the Hong Kong system. China's finances would collapse without it. I have no doubt which of the two systems will dominate China's commerce and industry after 1997. Between now and 1997 it is up to us to create the atmosphere in which that can happen smoothly and fruitfully.
The Government are failing in their duty to business in Hong Kong, whether locally or foreign-owned. They are letting down the people of Hong Kong who are anxious to preserve the best of what they have learnt of the British way of life. They are giving Beijing the impression that we in this country are too busy watching the opinion polls to notice the urgency of attending to opinion in Hong Kong. I commiserate with the noble Earl for having to answer my Question so quickly after the second debate. However, I hope that he will urge upon his senior colleagues at the highest level that they should take a brief interlude from electioneering and attend to the appointment of a new Governor of Hong Kong. It really will not take them more than a couple of hours.
8.10 p.m.
Lord Willoughby de Broke: My Lords, I thank the noble Lord, Lord Wyatt, for giving us the opportunity to debate these urgent questions. It is difficult to follow him because he has covered the points so admirably and clearly. The questions that he has raised deal with democracy and the administration of

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justice. It is right to consider whether Her Majesty's Government are dealing fairly with the matters raised in the terms of the Joint Declaration.
The Joint Declaration enshrined the goals of autonomy and democracy for Hong Kong. That commitment was clearly spelt out in the debate on the Joint Declaration in another place in December 1984. My right honourable friend Mr. Richard Luce, then the Minister of State at the Foreign and Commonwealth Office, said:
"We all fully accept that we should build up a firmly-based, democratic administration in Hong Kong in the years between now and 1997".—[Official Report, Commons, 5/12/84; col. 470.]
There is a great deal of concern in Hong Kong that that firmly-based, democratic administration is not in place. There is at the moment a curious hybrid which could have come straight out of Alice in Wonderland. There is an elected opposition and a non-elected, chosen, appointed administration consisting of appointees of the governor and members of various sectional interests. Would it not seem odd if there were an elected government and an appointed opposition? Will my noble friend Lord Caithness tell us whether that is the right way forward for Hong Kong?
The noble Lord, Lord Wyatt, referred to the elections in September. However small the turnout, and the issue has been criticised, there is no gainsaying the fact that the United Democratic Party claims to be and is the only truly representative political party in Hong Kong. Yet, as the noble Lord pointed out, that has not been reflected in appointments made either to the Legislative Council or to the Executive Council. Ought some consideration be given to that at this stage? It is seen as an insult to the intelligence of the voters and to the democratic process itself.
Disillusionment with the niggardly progress to democracy has been compounded by the clumsy handling of the appointment of the successor to the present governor. That is seen as a slight to Hong Kong and to the present governor. The strong impression is that once again Britain has let Hong Kong down. Clearly that was not the intention but I am afraid that it has been the effect. The question of a successor to the present governor is of great—probably of prime—importance in Hong Kong. With only 5½ years remaining of our stewardship it is of key importance that a person who is credible here, in Hong Kong and in China should be appointed. Such a person should possess a great many attributes. He should be respected in Hong Kong, Westminster and China. He should have an understanding of the commercial realities that obtain in Hong Kong. He should be an effective leader and spokesman for Hong Kong.
That is quite a tall order but there is such a person. I do not share the diffidence of the noble Lord, Lord Wyatt, in naming that person. If your Lordships substitute "she" for "he" you may find the answer. I refer of course to the noble Baroness, Lady Dunn, who is at the same time politician, businesswoman and diplomat. Her appointment would be welcome in
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Hong Kong. It would give that territory something of the political confidence that it seeks in the years remaining until 1997.
I hope that the Government will address the issues that were raised so cogently by the noble Lord, Lord Wyatt. I look forward to hearing my noble friend's reply.
8.15 p.m.
Lord Ennals: My Lords, I too am grateful to the noble Lord, Lord Wyatt of Weeford, for facilitating the debate. I agree with much that he said, although not all, and with much that was said by the noble Lord, Lord Willoughby de Broke. I believe that Parliament, especially another place, has given inadequate attention to developments in Hong Kong during recent years. It has overlooked the significance of the five years between now and the time when responsibility is to be handed to Beijing.
I agree with the noble Lord, Lord Wyatt, that there has been a real failure on the part of the British Government to formulate an adequate strategy in the negotiations over Hong Kong. I believe that the Chinese have taken advantage of that. I have said on a number of occasions when talking about Tibet that the Government have been prepared never to be strong but always to be weak. I do not believe that is the best way to have satisfactory and effective negotiations with the Chinese.
On 22nd January I attended a business conference at the Queen Elizabeth II conference centre. The conference was brilliantly organised and magnificently attended by more than 600 people. I cannot adequately praise the people of Hong Kong for their energy and enthusiasm. Their economy and that of the 18 million people in South China within the economic zone that is now influenced by Hong Kong is surging ahead. One of their few complaints is that the deplorable economic management of affairs in the United Kingdom is something of a drag upon their rate of growth.
If Britain appears to forget about Hong Kong it is not surprising that Hong Kong appears to have little or no expectations of Britain. It is painful to see Britain becoming more and more isolated and irrelevant in Hong Kong and to see the situation in Hong Kong becoming more marginalised by British politicians.
However, the case against the British Government is not merely of neglect but of extraordinary insensitivity. That was sadly demonstrated by the handling of the governor, Sir David Wilson. He is a man of outstanding ability who will be warmly welcomed in this House, as was the noble Lord, Lord Maclehose. We look forward to hearing from him. In my view Sir David was publicly humiliated by the Prime Minister and the Foreign Secretary in the announcement that he would be retiring but that his successor would not be appointed until after the election. I do not argue that an appointment ought to be made before the election; I argue that no such statement should have been made about Sir David's

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retirement. He is a highly respected man. On 22nd January in the Legislative Council the honourable J. D. McGregor said:
"The lack of information is alarming and, frankly speaking, disgraceful and insulting to Sir David Wilson and the people of Hong Kong… Who on earth in the British Government decided to announce Sir David's retirement and not his successor? I believe that this was a real blunder and that it has seriously reduced Sir David's standing and credibility during his remaining months of office. It also suggests that the British Government is insensitive to the very delicate situation in Hong Kong where six million people ponder their future".
I agree with that.
As the noble Lord, Lord Wyatt, said, the elections in September 1991 were a watershed in Hong Kong. That was the date when—in the words of Mr. George Foulkes the Labour spokesman in another place—the first shafts of democracy lit up in the Territory. As has been said, the voters were allowed to elect 18 out of 66 candidates for the legislative council. The United Democratic Party, led by Martin Lee, won 12 of the 18 seats and five of the six remaining seats went to people with liberal tendencies. It was a stunning victory for those who really believe in democracy. Many of them were deeply disappointed that the appointments in no way recognised the will of the people of Hong Kong.
At the conference last week to which I have referred, a Mr. Stephen Cheong, who has been a LEGCO member since 1980, said:
"We in Hong Kong have the funniest situation in terms of politics: the government in power are not allowed, or see it as undesirable, to form their own party, while the largest party in the legislative assembly remain an opposition party. The present state of affairs is unimaginable in any western democratic countries".
He went on to say:
"If nothing is done to rectify this situation, then what we see today may well be the beginning of a period of anarchy in Hong Kong".
I hope that that is not true but the British Government have an obligation to recognise the strength of feeling which now exists in the Territory.
In the course of the next few weeks something must be done to rectify the situation. It is a pity that the Government did not introduce an element of democracy years ago. It would be absurd to assume, as the Government seem to, that agreements already reached with China are set in stone. After all, there are five years between now and 1997. There must be some flexibility. I welcome statements by Labour leaders that, if elected to power, they will begin early discussions on how to improve the democratic conditions in Hong Kong. Of course we want to see a free press, an independent judiciary and a democratic legislature. The political situations in Hong Kong and China are also not set in stone. In this country we are bound to have an election in the next few months. In China there must be changes as younger men are bound to succeed to prominent positions in the increasingly aged leadership of China. China is unlikely to avoid some of the winds of change which have blown from Europe, Africa and Latin America. It may be that the speed will not be so great but I do not believe that there will be no change in China in the course of the next five years.
Hong Kong itself may help to bring about the change. We have already seen the remarkable speed
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with which China's southern provinces have broken free from a command economy. In helping to create a climate which is free from the central control of Beijing, Hong Kong is helping to create a climate in which political differences with Beijing can be submerged. I believe that the taste of economic freedom is bound to create a taste for political freedom so far denied to the rest of China's population and, in a sense, to its colonial peoples.
Of course the Joint Declaration and the Basic Law remain the foundations on which Hong Kong's future must be built but the five remaining years of British rule must be years in which there is everything to play for. It is a period in which the old men calling the shots in Beijing and the has-beens in Westminster will be replaced by a more rational, accommodating and imaginative leadership. I have great confidence in the people of Hong Kong, in their judgment and ability to lead. Without mentioning any names, I agree that when one looks around for the next governor, we should look seriously at those who come from Hong Kong and who know and understand the nature of the people. I urge the Government, in the weeks before the election, to turn their minds away from electioneering and confront this fundamental problem which must be faced in Hong Kong. They must have a strategy to take us through the next five years.
8.24 p.m.
The Lord Bishop of Worcester: My Lords, I am grateful to the noble Lord, Lord Wyatt of Weeford, for initiating this debate. I must apologise to the House because, for unavoidable reasons, I may have to leave the Chamber after my speech. I hope to be back to hear the Minister's reply but I apologise to the noble Lords, Lord Derwent, Lord MacLehose and Lord Geddes, if I do not hear their speeches. I shall certainly read them in Hansard.
As a bishop I am in contact with Hong Kong through the Anglican communion network. There is an Anglican bishop in Hong Kong and through Church House I have been in contact with him. In 1984 and 1990 a delegation of the British Council of Churches was invited to Hong Kong. The message which was brought back was that we should alert people to Hong Kong's situation and needs.
Through my contacts I have found that the first thing which seems to be lacking is confidence in the British Government —with their great tradition of colonial experience and government—to see their responsibility for Hong Kong through to the moment at which it joins the mainland of China in 1997. That 60,000 people left Hong Kong in one year is an indication of that lack of confidence. The bishop tells me that the people of Hong Kong are conscious of the fact that the right of abode was taken away from them in 1962. They now have the status of British dependent territory citizens. They realise that in 1962, when their right of abode was taken away, the United Kingdom was concerned not to have large numbers of people entering the country because our services would inevitably break down. They understand that. However, the people of Hong Kong need effective citizenship. If they can be given that, and if there can

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be movement towards that between now and the time at which they join the mainland of China, there will be less desire to leave. Even so, they need an escape clause to prevent their becoming prisoners on their own island. That does not mean that they would use the clause. They would, however, have a sense that they were not trapped.
The other fear conveyed to me is one already mentioned by noble Lords; namely, that the pace of change has been deliberately slow out of a desire not to offend the Government of China. I should like to be reassured that that is not so. We should not be proud to think that we have slowed down the pace of change out of a desire not to displease mainland China. Indeed, Jan Morris, writing from Hong Kong, has said that the Chinese Government have made known their opposition to, for example, some of the suggestions which have been made in this House today.
There could be a restoration of confidence moving towards democracy and democratic institutions. Mr. Douglas Hurd and Sir Geoffrey Howe have said that that is desirable. It is possible that by 1997 a fully elected legislative assembly could be in place. As I said, that would prevent a flow of immigrants to Britain. There could be the appointment of a chief executive by a representative assembly.
An enforceable Bill of Rights is also needed. The present Bill of Rights lacks two very important elements. It lacks the right to self-determination and the right to elect political representatives. If there came to be a clash with a strong Chinese Government the Bill of Rights would not stand up.
I shall not repeat what has been said about the court of appeal. I am told that the Executive Council, after a long debate, rejected the composition of that court of appeal. If I were to say anything further about the appointment of a new Governor, it would be that there is a great desire among the politically aware in Hong Kong that consultation shall take place. Can we be assured of that?
I want to move on to the question of religious freedom. Recently, Graham Hutchings of the Daily Telegraph and Raymond Whitaker of the Independent drew attention to the fact that mainland China is cracking down on religion, largely because it sees that in Eastern Europe the Churches, to a large extent, were the midwives of the revolution—certainly in Poland, East Germany and possibly in Czechoslovakia—in a secret and hidden way in co-operation with others. It is determined that that shall not happen in China.
It is possible that those who worship or gather in groups outside the five official religions—Buddhism, Catholicism, Protestantism, Islam and Taoism—could be charged with counter-revolution and colluding with foreign states, for which the punishment is from 10 years up to life imprisonment. Recently, 32 Catholic bishops, priests and lay workers were arrested. In short, there is a new hardness towards religion. I ask my noble friend Lord Caithness, first, to reassure me that it is something of
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which the Government are aware and, secondly, that it is something upon which he will seek further information.
I offer the hope that there can be a rebuilding of confidence and trust in the British Government; that there can be the establishment of effective citizenship, which is more important to many people in Hong Kong than the restoration of right of abode, and that along with that will go movement and education towards democratic styles and institutions. It is not simply a matter of structures. It is also a matter of encouraging participation.
Finally, I raise an issue where the British Council of Churches' delegation found real fear and foreboding. It was mentioned by the Bishop of Hong Kong, Peter Kwong. It is that religious freedom could be eroded for fear that the Churches might be as effective in the East as they were in Eastern Europe in helping to roll back the Communist regime.
8.34 p.m.
Lord Derwent: My Lords, I thank the noble Lord, Lord Wyatt, not for tabling the Question, nor because I necessarily agree with everything that he said, but because I believe that the greatest protection the people of Hong Kong have is that their affairs should be kept constantly in the public eye.
The Question of the noble Lord is whether the Government,
"are satisfied with the arrangements made for the maintenance of democratic freedom and the administration of justice in Hong Kong after 1997".
I am sure that the Government's Answer to the question will be, "no". So far as I am aware, the Government have never claimed that the arrangements which emerged from the Joint Declaration and the Basic Law are wholly satisfactory. The more relevant question is whether the arrangements are as satisfactory as can be achieved at present. There are certainly anomalies to which reference has already been made. It is an anomaly that the largest party in LEGCO is in opposition. It is an anomaly that the Opposition is not an alternative government since it can never, under current arrangements, have a majority in the Legislative Council. There are, therefore, important respects in which democracy as we see it in Hong Kong today is deficient.
That is not to say that the degree of democracy already achieved is useless. An article in the Financial Times yesterday rightly pointed out that, since September's elections the legislature is now a body where virtually all aspects of the Government's legislative programme are vigorously debated and, in some cases, changed. I am sure that process will continue and develop further after the next round of elections. Perhaps we should therefore not be too dismissive of what has already been achieved.
I beg your Lordships not to job backwards and reflect too much on what might or might not have been included in the Joint Declaration or the Basic Law. We must face reality as it is today. The Joint Declaration exists; the Basic Law exists. The Chinese have said that they regard both documents as sacrosanct. The documents are clearly not perfect. How could they be since they represent a

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compromise? As in all compromises, the different provisions cannot be disentangled. If one side seeks to ignore or reinterpret one provision, then the other side will seek to ignore or reinterpret another. At this juncture that does not seem to be a useful way forward. Better to build on what we have.
In practice it means that neither the United Kingdom nor the People's Republic of China should at this stage of the proceedings do anything to rock the boat. By that I mean they should not seek to move unilaterally in a direction which they know in advance to be unacceptable to the other side.
If that sounds craven, let me invite noble Lords to consider what is actually happening on the ground in Hong Kong. In the weeks since agreement with China was reached over the airport, confidence has greatly improved. The stock market is at an all time high. Business is doing better—certainly much better than it is, for example, in this country. New investment is coming in, which means that there are jobs and prosperity for all. Why is that? It is not because the agreement is perfect but because the mere fact that an agreement exists between the two sides on a range of issues means that everyone knows, or thinks they know, where they stand and can plan accordingly. On the other hand, each time we are at public loggerheads with the Chinese tension rises, investment falls away, confidence drops and prosperity is at risk. If Hong Kong is not prospering in 1997 the Chinese will have no incentive to keep to the Joint Declaration.
The need to reach agreement with the Chinese does not mean that progress cannot be made towards a greater degree of democracy; towards improved arrangements in regard to the administration of justice or in other directions. What strikes all of us who have daily dealings with Hong Kong is the way in which the economies of Hong Kong and China are becoming not only interdependent—they always were—but that there is now in reality only one economy covering Hong Kong proper and the neighbouring provinces of China. The point has now been reached where it is impossible—I repeat, impossible—for China to damage the economy of Hong Kong without inflicting serious, perhaps disastrous, damage on the economy of China itself.
When one thinks about it, in the real world China has much more to gain from the continued prosperity of Hong Kong than we do. That being so, the right way forward is the one that the British Government are following. My right honourable friend the Foreign Secretary has promised that he will continue to press on the Chinese our views on the best way to achieve the continuing prosperity of Hong Kong. Even more important, he will be pressing the views of the Hong Kong people.
I do not wish to repeat what noble Lords have said, but I wish to digress by saying that I too regret that my right honourable friend will no longer be assisted in that task by Sir David Wilson. This was no time to change the Governor. Those in this country who have campaigned against him have little to be proud of.
There is no point in striking attitudes. We believe in democracy for democracy's sake. The Chinese Government do not. So slanging matches on that
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subject lead to a dead-end. That is the trouble with campaigns which merely have as their theme "more democracy must be good". Rather, let us use up our ammunition and our persuasive powers in getting the Chinese to move forward on specific issues—many of which have already been summarised by the noble Lord, Lord Wyatt of Weeford—not to win a political argument but in order to further the future well-being of the people of Hong Kong.
8.42 p.m.
Lord MacLehose of Beoch: My Lords, I too would like to thank the noble Lord, Lord Wyatt, for introducing this debate. Like many other noble Lords, he mentioned various things about the Governor. I claim to have a special knowledge about gubernatorial matters. The point was made that the Governor is now a kind of lame duck and that the Government have just about killed him off. He was here the other day and I have never seen any duck less lame. He was in exuberant form. It is delightful that he is going to be joining your Lordships in this House. He will make a great contribution.
There was strong criticism of the announcement that the Governor is going to retire without a successor being named. Think of all the fun that it has given to journalists playing this game! I noticed your Lordships joining in the game of suggesting who will succeed him. My retirement was announced four months before I retired. The name of my successor was announced one month before I retired. I did survive and so did Hong Kong. However, I say this to those who are to appoint him: they will be hard put to find somebody as good as the person they are allowing to go.
It was a great pleasure to follow the noble Lord, Lord Derwent. I agreed with everything he said, and particularly with his presentation of one's attitude to China in these circumstances. He referred to the importance of not harking back to past agreements; the importance of not proceeding in a confrontational manner, and the importance of seeing things to some extent from the Chinese point of view. I am thinking of the question of democracy as being something which is European and utterly un-Asian. These matters have to be dealt with with great care.
I would like not to follow the noble Lord in all the points he made. I wish to proceed somewhat differently. I begin by saying what I believe people in Hong Kong would like to see. They are well-known for their pragmatism. They understand the political realities of their own situation. With only five years more of British responsibility, I believe that what they want to see is a strong and efficient public service. That they have. I believe they wish to see a political structure which will give them, on the one hand, assurance of a continuation of their personal freedom and, on the other, one that does not provoke Chinese suspicion and consequent instability.
A great deal has been said about that this evening. I entirely agree that more work has to be done on this matter. The people of Hong Kong want to see a system of justice which is fair and impartial. That they certainly have and there is every prospect of it

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continuing. They want an economic environment in which they and their families can prosper. That again they assuredly have, and I shall return to it. I was very glad about the way in which the noble Lord, Lord Ennals, referred to developments in China.
There is a great deal of common ground in Hong Kong about what they want. Of course opinions inevitably differ on some matters, but the community is at one about the need to establish a sound relationship with China and to avoid measures which may generate instability through friction with China. I know what fun it is to confront China from the Benches of your Lordships' House. It is an entirely different matter to do so from Hong Kong and a good deal less wise.
Noble Lords have referred to the issues which are under debate at present; for instance, the progress of democracy and the composition of the Court of Final Appeal. In both those instances the choice seems to lie between an ideal solution, which will probably not be agreed with China and so would add to uncertainty about the future in 1997, or accepting something workable now in the knowledge that it will not be an issue when the difficult time of 1997 comes. I am advised that about these issues there is no consensus in Hong Kong. I believe that the choices are best left to the people in Hong Kong and to their Legislative and Executive Councils to decide. I do not believe that we would be doing the people of Hong Kong a service by encouraging any particular solution. Our overriding goal should simply be to ensure the smoothest transfer of sovereignty in 1997 and the smoothest possible lead-up to that date.
This debate has raised various criticisms of the British Government and of what is happening in Hong Kong which may raise doubts about Hong Kong's future. I do not share them. I also sensed an underlying new feeling of optimism in your Lordships' House which I am not sure that I have felt before. I entirely agree that there is a current moving very strongly in Hong Kong's favour. The place itself is booming. It is the centre of a huge area of economic growth in South China which includes 60 million to 100 million people. Economically, it is the fastest growing area of the world, with huge benefits to the people who live there.
Let us remember that this is the product of Chinese policy. It is the product of Den Xiaoping's open-door policy, which has been persisted in during these difficult past years in China. Hong Kong is a key element in it. It was significant that Den Xiaoping himself, who so very rarely appears in public, made a public appearance a few days ago and reaffirmed that policy. He did that in Chungshan on the borders of Hong Kong. That is something from which we can take a great deal of confidence.
This economic thrust from South China is in fact underpinning Hong Kong. In considering the number of details that I am sure will come to your Lordships about Hong Kong in the course of the next few years, let us take comfort from the fact that this force is there and is working very much in Hong Kong's favour.
8.50 p.m.
Lord Geddes: My Lords, I wholeheartedly endorse the comments made by, I think, all noble Lords who have spoken, and particularly the noble Lord, Lord MacLehose, with regard to Sir David Wilson. I can best sum up by saying that our gain in this House is going to be Hong Kong's loss. He has done a quite excellent job for Hong Kong in extremely difficult and increasingly difficult circumstances. I do not, however, intend to enter the lists of the guessing game as regards his successor.
Not for the first time, we are truly indebted to the noble Lord, Lord Wyatt of Weeford, for bringing Hong Kong to our attention. His Question refers both to "the maintenance of democratic freedom and the administration of justice in Hong Kong after 1997". All noble Lords who have spoken have addressed the former more general issue of democratic freedoms, and I should just like to make one comment in that context: that is with regard to passports, a subject that I have studied closely since the then British Nationality Bill over a decade ago.
In the Chinese memorandum of 19th December 1984, which was attached to the Joint Declaration of the same date, considerable comfort could, and hopefully still can be, drawn from what are now called marginal paragraphs 233 and 234 with regard to the Chinese recognition and tacit approval of British Dependent Territory citizens and their BDTC passports. However, the only reference to passports in the Basic Law is in Article 154, which refers to the government of the Hong Kong special administrative region issuing passports,
"of the Hong Kong SAR of the People's Republic of China to all Chinese citizens who hold permanent identity cards of the region, and travel documents of the Hong Kong SAR of the People's Republic of China to all other persons lawfully residing in the region".
While I do not see a conflict between the Joint Declaration of 1984 and the Basic Law of 1990, I should be grateful if my noble friend Lord Caithness could advise the House whether those marginal paragraphs 233 and 234 in the Joint Declaration are still valid, whether British national overseas citizens and therefore holders of the BN(0) passports will be similarly recognised by the People's Republic on and after 1st July 1997, and why the Basic Law made no reference to either BDTCs or BN(0)s and their passports.
I shall now restrict my comments to "the administration of justice in Hong Kong after 1997" and in particular to the Court of Final Appeal. There have been numerous suggestions in the press and elsewhere to the effect that Britain has yet again in some way "sold out" to the Chinese in the matter of the Court of Final Appeal. Without for the moment commenting on the merits of the agreement reached in September last year by the joint liaison group, I think it would be appropriate first to look at the printed published text.
Article 82 of the Basic Law states as follows, and the noble Lord, Lord Wyatt, has already mentioned this:
"The power of final adjudication of the Hong Kong special administrative region is vested in the Court of Final Appeal

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in the region, which may as required invite judges from other common law jurisdictions to sit on the Court of Final Appeal".
Those are important words, and I shall come back to them in a minute.
The only reference in the Joint Declaration and the Basic Law to the number of judges connected with the Court of Final Appeal is with the tribunals set up to make recommendations regarding the removal of judges from that Court of Final Appeal, and indeed of the chief justice of the Court of Final Appeal. In both the Joint Declaration and the Basic Law such a tribunal is to consist of no fewer than three (or, in the case of considering the chief justice, five) local judges. Those numbers do not refer to the Court of Final Appeal itself.
My reading of the two relevant documents—that is, the Joint Declaration and the Basic Law, and it was on those two documents that the joint liaison group were working—is that, with the exception of the chief justice of the Court of Final Appeal and indeed the chief justice of the High Court of the Hong Kong SAR (both of whom, as the noble Lord, Lord Wyatt, has already advised us are required to "be Chinese citizens who are permanent residents of the region with no right of abode in any foreign country"), there neither is nor was any definitive statute with regard to the number of judges constituting the Court of Final Appeal nor to the nationality or domicile of those judges other than the chief justice himself.
We then turn to the agreement reached by the joint liaison group in September of last year; namely, that the Court of Final Appeal shall consist of five judges in any sitting made up of the chief justice of the Court of Final Appeal, three permanent Hong Kong judges —and an important wording in parenthesis here—who may be local or expatriate, and, depending on the needs of each particular case, one remaining judge to be drawn from a list of non-permanent Hong Kong judges or from a list of distinguished judges from other common law jurisdictions. Here we are getting the same phrase coming through again; other common law jurisdictions.
On 4th December last year the Legislative Council rejected by 34 to 11 the joint liaison group's agreement. I have read with the greatest of interest the speech of the Hon. Simon Ip Sik-on (the representative on LEGCO of Hong Kong's legal profession). As I well know, it is at the very least foolhardy for a layman such as myself to disagree with a lawyer, particularly one as eminent as Mr. Simon Ip. However, while I agree with much of his speech, I disagree on two specific and, I suggest, fundamental points.
First, he said:
"the agreement reached by the JLG … has altered the clear wording of those documents".
namely, the Joint Declaration and the Basic Law. As I read it, that agreement by the JLG in no way contravenes either the Joint Declaration or the Basic Law even if, as some of your Lordships and much of the press think, it may not entirely live up to the hopes and aspirations of some.
Secondly, Mr. Ip said that he considered that:
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"the composition of the Court of Final Appeal and the court's unrestricted power to invite overseas judges to sit on it [was] more important than setting up the court early".
He went on to say that it was:
"difficult to imagine a court structure that is consistent with the Basic Law that is less flexible than that we are faced with today".
My Lords, I wonder. The noble Lord, Lord MacLehose, if he did not refer to it, certainly inferred from this point that it was impossible to know what sort of Court of Final Appeal might be imposed in July 1997. What Hong Kong needs is stability, and it is running out of time. The smooth transition of the legal system is of paramount importance for the future of Hong Kong, and the vesting of the power of final adjudication in Hong Kong is the most significant aspect of this.
Hong Kong needs to have a Court of Final Appeal in place by 1993 so that it can have four years to establish its credentials and iron out any wrinkles before the territory reverts to China in July 1997. If this can be achieved, the aim of maintaining continuity within the legal system will be greatly assisted, and in addition its early establishment will bring further confidence and stability not only to the judicial system but also, and more widely, to Hong Kong as a whole.
On 6th December 1991, two days after the LEGCO debate, in the context of that three to one rejection of the agreement reached by the joint liaison group, the South China Morning Post commented as follows in its leading article. I unashamedly quote this paragraph in full because it is of considerable importance. It reads:
"There is, however, a way out of the impasse which Hong Kong can chart itself, without any constitutional change. Instead of trying more backdoor political manoeuvres, the Hong Kong Government can strengthen the territory's judiciary. Accepting that localisation of the judiciary has been a failure to date"—
that is a moot point—
"especially at High Court level, Hong Kong should invite the most eminent judges available from other Common Law jurisdictions"—
here is the same phrase coming through again—
"to serve on the bench for the next six years, preferably longer. Not only would Hong Kong's judicial system benefit from their presence, but they could strengthen the pool of talent from which Hong Kong could choose candidates to sit on a Court of Final Appeal. Overseas expertise would therefore be injected into the system, without an argument over how many judges from other countries should be invited to sit in the appeal court. Since it would be a domestic decision, it would be entirely within Hong Kong's right to make it, and does not require approval by either China or Britain".
In my experience—and here again I wholly endorse the remarks of the noble Lord, Lord MacLehose—Hong Kong is nothing if not an immensely practical place. The action proposed in the South China Morning Post leading article seems to me to be an eminently sensible way of addressing what is clearly a difficult and extremely important problem. Surely it is in the interests of all concerned—Hong Kong, China and the United Kingdom—to accept the agreement as worked out in the joint liaison group and now take action to strengthen Hong Kong's judiciary along the lines advocated in that leading article.
9.2 p.m.
Lord Bonham-Carter: My Lords, I join other noble Lords in thanking the noble Lord, Lord Wyatt, for asking this Unstarred Question. It is important that in your Lordships' House the issue of Hong Kong and its future should be raised at regular intervals. I find myself in broad agreement with the tenor of what the noble Lord, Lord Wyatt, said. I am sorry that he is mildly unhappy that Martin Lee and his colleagues have given themselves a liberal label, but that is their choice. Let me comfort the noble Lord. No one will ever affix that label to him in any of his political manifestations. I agree however, that the main issues we have to address are those of the Court of Final Appeal, which was discussed by the noble Lord, Lord Geddes, and to which I shall return, the pace of democratisation and its impact, and the appointment of the Governor who will succeed Sir David Wilson.
In our previous debate we discussed human rights in connection with the United Nations. That is highly relevant to this Unstarred Question. It is not surprising that the people of Hong Kong, looking across to the mainland, should be anxious that they will lose the rights and the freedom, guaranteed by their connection with this country, which they have enjoyed. The two main protections of those rights, to which we attach importance, are democracy and the establishment of an independent judiciary—the Court of Final Appeal. Hence, in this general question of the rights of citizens—it is relevant to what the right reverend Prelate said about freedom of religion—those two constitutional protections are very relevant. So also is the Bill of Rights to which the right reverend Prelate referred.
As other noble Lords have said, last September the first 18 members of the Legislative Council were elected and, as was acknowledged by the Foreign Secretary and the noble Earl, Lord Caithness, the elections were a great success. It is the view of many that if what was called the high degree of autonomy is to be assured, as specified in the Sino-British Declaration of 1984, the process of democratisation must not be slowed down. There are obvious pressures for it to be speeded up. But it should certainly not be slowed down. It should be continued on the lines proposed by the noble Lord, Lord Wyatt. Moreover, if it is the case, as the noble Lord, MacLehose, said, that these matters are best left to the people of Hong Kong to decide, how better can they decide them than through elected representatives? Or does he honestly believe that they can decide matters better through unelected representatives chosen by the administration? The answer is self-evident.
It has also been said that the most important thing is that Hong Kong should have stability. Stability is not intrinsically good. One can have bad stability as well as good stability. The governments in Central and Eastern Europe over the past 40 years were extremely stable, or appeared to be. However, one would hardly advocate them as intrinsically desirable.
The second protection against the abuse of power is the establishment of a truly independent judiciary. Hence the importance of the Court of Final Appeal, and the presence of common law judges outside their
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jurisdiction. There is also the agreement made by the joint liaison group—and I do not pretend that I could mediate between the interpretation of the noble Lord, Lord Geddes, and that of the Legislative Council—which aroused the anxiety of the council because it appeared to say that only one of those judges at each session should be a foreign judge. I do not think that we shall be able to decide tonight who is right. However, I must confess that I find it very odd that members of the Legislative Council should so overwhelmingly interpret the agreement in that way, despite the persuasion of the Government, the presence of the Government's legal officers and, presumably, having every wish not to be alarmed by what had happened, if they were completely wrong.
I should point out that the only document that I have read on the matter is fairly specific in saying that the group also agreed to limit foreign judges to one in each session. I do not know whether that is a false interpretation of the decision. If it is, many people must have been profoundly misled and the agreement reached by the joint liaison group must have been unduly and unnecessarily obscure. That could hardly be desirable in such circumstances.
One would like to know how the Government will react to the anxiety that the agreement has caused. That is what matters. Will they listen to the anxieties expressed by the Legislative Council? Alternatively, do they agree with Mr. Wang, vice president of the China News Agency whose comment, when asked if he would listen to the opinion of the Legislative Council, was:
"Listen to their opinions? We have already told them our opinions and stance so there is no need to listen".
We have been told that it is unwise to confront the Chinese. However, it is very difficult not to call that statement confrontational. It is a comment that justifies the anxieties of the people in Hong Kong and their need for reassurance. As the right reverend Prelate and other noble Lords have indicated, the Government need to instil confidence in the people of Hong Kong by reassuring them that their rights will not be completely abandoned.
Finally, the council—and this has been referred to by many speakers—attacked the British Government for delay in appointing a new Governor. I hope that the noble Earl will be able to reassure us on the matter. I believe that the noble Lord, Lord Maclehose, said that Sir David Wilson did not look like a lame duck. Well, I do not know what he looked like; but it is a fact that that is generally considered as a misfortune when it happens to politicians who find themselves in such a position. Indeed, it happens to American presidents. No one thinks that it is a desirable situation in which to find oneself. I say that because to make someone in office a lame duck must damage that person's authority, no matter what else is done.
Lord MacLehose of Beoch: My Lords, my point was that Sir David Wilson was standing up frightfully well in the situation.
Lord Bonham-Carter: My Lords, I accept totally the noble Lord's explanation. However, it means that the Government have more explaining to do. I say

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that because to put someone in a situation in which he has to stand up frightfully well is hardly the way a distinguished public service should operate. I wholly agree with the noble Lord, Lord Wyatt, that the treatment of Sir David Wilson was hardly desirable and that, if his governorship was not to be continued, his successor should have been announced. I hope, in the course of his response, that the noble Earl, Lord Caithness, will be able to provide us with an explanation as regards this unhappy affair.
In the course of the debate anxieties have been expressed which require to be answered. In the years to come, I hope that we shall regularly raise the question of Hong Kong and the importance of our obligations to that colony.
9.13 p.m.
Lord Cledwyn of Penrhos: My Lords, this has been an important and timely debate. We are grateful to the noble Lord, Lord Wyatt, for initiating it and for his opening speech. Although there are a number of critical issues to be resolved in Hong Kong, the noble Lord concentrated upon two of them in his Motion. Like other noble Lords, I shall therefore deal with those issues, although that does not mean that we are not mindful of the other problems which exist there.
The Motion refers, first, to democratic freedom. Noble Lords in excellent speeches effectively analysed that. I agree with the noble Lord, Lord MacLehose, on that. There are, as always, two schools of thought: those who want to proceed rapidly and those who favour cautious progress. Whichever camp we support, we must agree that the elections of 15th September last year were a significant step on the way to democracy. We take elections as a matter of course, but the Chinese Government in Beijing do not. They regard them as a threat to stability. We think of them as essential to stability. Those are points of view which will, I hope, be reconciled over the years. But I feel sure that many of the leaders in China will have thought deeply about developments in Eastern Europe and elsewhere in the world. I believe that their wish is for as amicable a transition as possible in 1997; and, further, that they will observe the letter of agreements that they have signed. They know perfectly well that that has a bearing on their standing in the world.
The September elections, to which all noble Lords have referred, were for 18 members out of the 60 who sit on the Legislative Council. Of those, 12 went to the United Democrats; three others to parties allied to the Democrats; and three to independents whose policies are close to those of the Democrats. I was not surprised by that result, nor by the fact that Mr. Martin Lee emerged as the leader of that group of radical critics. He is an able man of integrity and determination. He polled more votes than any other candidate, and that counts for something. Neither China, nor the Government of Hong Kong, need worry too much about Mr. Lee. They are fortunate to have a man of his calibre in political life. He reminds me a little of Mr. Lloyd George who started in much the same way and ended up as Prime Minister.
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What cannot be overlooked is that out of the 3.6 million people entitled to vote, only half registered, and out of those only 39 per cent. voted, which meant a turn-out of less than 20 per cent. of the eligible voters. This country must take some responsibility for that result because we did not encourage the march to democracy in Hong Kong during the long years of government there. Britain did many good things in Hong Kong, but we tended to be democrats at home and plutocrats abroad.
As my noble friend Lord Ennals said, we believe in the steady advance of democracy in Hong Kong. The Sino-British Joint Declaration of 1984 promised Hong Kong "a high degree of autonomy" and there is nothing here which implies that a local democracy should be excluded. China wishes to see a prosperous Hong Kong, which is very much in her interests, and that can best be achieved if there is an efficient local government authority. The Isle of Man may not be a precise model for Hong Kong but there are important lessons to be learnt there and also in the Channel Islands; and His Excellency, the Chinese Ambassador, whom we warmly welcome to this country, might be invited to visit those stable communities which enjoy a high degree of autonomy under the aegis of the British Government.
I think that a little more elasticity in negotiation might be helpful if we are to avoid some years of frustration and disappointment. With other noble Lords, I warmly congratulate Sir David Wilson upon the honour conferred upon him and, like all noble Lords, look forward to seeing him in this House where I know he will make an important contribution. He has had a difficult tenure of office but he has carried out his duties with dignity and common sense, which I know to be true.
Noble Lords have stressed the need to appoint the right successor and there is a good deal of talk about that. What we need is a person with courage, political experience and common sense who can gain the respect of the people of Hong Kong and the Chinese Government; in other words, we are looking for someone very much like Sir David Wilson, because that is what he achieved. Above all, such a man must be given clear guidelines to enable him to do his job properly. We cannot afford to have a loose cannon on the deck in Hong Kong at this time. Whoever he is, I wish him well.
The noble Lord's Motion refers, secondly, to the administration of justice in Hong Kong, and that subject is developing into a conflict of views as the noble Lord and others have described.
The Government, with China and the Hong Kong Government, have agreed on the structure of the Court of Appeal, but on 4th December LEGCO called for the court to be renegotiated. It said the structure compromised the court's independence. As the noble Lord said, the voting was 34 to 11, with 13 abstaining. That has opened a new chapter of suspicion between the Chinese and British Governments. It only goes to show how sensitive is the atmosphere.
As I understand it, the position is that the 1984 Declaration and the Basic Law both provide that Hong Kong's courts shall have,

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"independent judicial power. including that of final adjudication".
The argument involving the Joint Liaison Group hinges on how many judges from other common law jurisdictions shall sit on the court.
I have read the speeches on the matter made to LEGCO by the Attorney-General and the Secretary of Constitutional Affairs, and it seems that strenuous efforts will be made to resolve the problem. It appears, however, that the real vote will come in a few weeks when the Hong Kong Government present LEGCO with legislation to set up the court. The proposal in the leading article in a newspaper quoted by the noble Lord, Lord Geddes, also deserves careful consideration.
We shall be glad to hear what the noble Earl has to say about all this. It seems to me that the Hong Kong Administration must get together with the Executive Council and LEGCO to seek to agree on their joint objectives. If this is not done, there could be trouble ahead. The Chinese Government will have more respect for them if they are seen to be united, and the shape and success of the years following 1997 will depend on this. It will also depend on the integrity of the Government of China and their observation of the terms of the agreement and beyond that their tolerance of different traditions, as mentioned by the noble Lord, Lord Derwent.
I was much disturbed by the words of the right reverend Prelate the Bishop of Worcester when he said that the Beijing Government were beginning to harden their attitude to the Church. That would be unfortunate and damaging to our relations and the future of Hong Kong, as well as to the world view of the Chinese Government. We wish to co-operate with China and we hope that nothing will interfere with that objective.
9.21 p.m.
The Earl of Caithness: My Lords, I too am grateful to the noble Lord, Lord Wyatt of Weeford, for raising these important issues which are vital to the future of Hong Kong. I should also like to thank all your Lordships for taking part in this important discussion. I have listened to a wide range of views, as wide a range as I hear in Hong Kong. None of your Lordships will have failed to notice the speeches of those who know Hong Kong well. In particular, I commend the speech of great authority from the former Governor, the noble Lord, Lord MacLehose of Beoch, who spoke about the realism of the Hong Kong people and their links with China.
As I listened to the noble Lord, Lord Wyatt of Weeford, I felt that he was looking at the problem through the wrong end of a telescope. That is unusual for him and not the voice of reason that we have come to expect.
Your Lordships will know that the noble Lord, Lord Wyatt, originally tabled this Question for debate two weeks ago. As I wished to answer it but was due to be in Indo-China at the time, he kindly agreed to change the date. However, your Lordships lost out because although I am grateful to him your Lordships
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have suffered the loss of the noble Baroness, Lady Dunn, from the original list of speakers. She cannot be with us today, much though she wished it. Her input into the debate would have been most useful.
One of my abiding memories of my visits to Hong Kong is the persuasive arguments put forward for the necessity of good relations between China and Britain, as this would benefit Hong Kong in the period up to and through the transition in 1997. That was a particularly clear message I received from everyone I talked to, especially during my first visit in 1990. Over the past 18 months the Sino-British relationship has improved significantly from a low point and as the noble Lord, Lord Derwent, said in an excellent speech, this has led to significant benefits for Hong Kong. It has done so against the background of the commitment by both sides to implement the Sino-British Joint Declaration signed in 1984 and registered at the United Nations. This sets out the basis agreed between Britain and China for the preservation of Hong Kong's way of life for at least 50 years after sovereignty returns to China in 1997. The implementation of the Joint Declaration is the cornerstone of our policy to ensure the continuing success of Hong Kong.
Nineteen ninety-one was an important and eventful year for Hong Kong. During the first six months tough and protracted negotiations continued with China over Hong Kong's new airport. A good agreement in which the Hong Kong Government were fully involved was eventually reached, and the Prime Minister and the Chinese Premier signed the Memorandum of Understanding in Peking in September. The Hong Kong Government are now pressing ahead with this vital enterprise and tenders for the first main works project, the Lantau Fixed Crossing, will be awarded in the next few months.
On the political side, after elections to the district boards in March and municipal councils in May, the key event was the first direct elections to the Legislative Council (LEGCO) which took place on 15th September. A total of 54 candidates contested 18 seats in a lively and hard fought campaign. The turnout at almost 40 per cent. of registered voters was a record for Hong Kong, although lower than some had predicted. The United Democrats and other Liberals won 16 of the seats, with about 50 per cent. of the votes cast, giving them overall a vote of approximately 10 per cent. of the eligible electorate.
Contrary to the impression given by the noble Lord, Lord Wyatt, the aim of the 1991 election was not to elect a government for Hong Kong, or indeed a majority on EXCO. Both the noble Lord, Lord Ennals, and the noble Lord, Lord Wyatt, are not as well informed as they usually are. It is not a question of not inviting Martin Lee onto EXCO, but rather of Martin Lee indicating clearly that he cannot accept the conventions on confidentiality and corporate responsibility that go with being a member of EXCO. I know that the Hong Kong Government want—
Lord Wyatt of Weeford: My Lords, as I understand the matter, Martin Lee was quite prepared to accept the remit on secrecy. However, he was not prepared to

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accept the doctrine of collective responsibility, as he thought his party was rather stronger in LEGCO than the unelected governor's nominees.
The Earl of Caithness: My Lords, what one has to understand is there is no government party in Hong Kong. That decision was entirely for Martin Lee to make and he made it.
Lord Ennals: My Lords, I did not say anything about the Executive. I did not say anything about who should be elected or about whether or not Martin Lee should be nominated. I hope the noble Earl will withdraw the accusation he made that I am ill-informed on this matter.
The Earl of Caithness: My Lords, I am most happy to withdraw that accusation. I apologise to the noble Lord if I misunderstood his speech. I shall read his speech with great care when it is printed in the Official Report, as I normally do.
I know the Hong Kong Government want to work closely with all those in LEGCO, and I hope all those in LEGCO want to work closely with the Hong Kong Government. The election marked a significant step forward—as the noble Lord, Lord Cledwyn of Penrhos, remarked—in the development of democracy in Hong Kong. It implemented stage one of the process agreed by Britain, China and the Hong Kong Government. LEGCO now has almost one-third of its members elected by universal suffrage and, for the first time, a majority of the Council consists of elected rather than appointed members. We are well on the way to transforming LEGCO from a wholly appointed body in 1984 to a body after 1997 which, in the words of the Joint Declaration, will be "constituted by elections". That is the strategy, based on the Joint Declaration, that aims to ensure a smooth transition. That is the strategy the noble Lord, Lord Ennals, wants to tear asunder. I must ask the noble Lord what continuity he has proposed for the people of Hong Kong. He has proposed no such continuity.
I know that the noble Lord, Lord Wyatt, takes a personal interest in this important matter of democracy. Our aim is not only to establish in the territory before 1997 a system of government which includes a substantial element of elected democracy but also one that will endure and develop further after 1997. Present arrangements provide for steady progress towards the possibility of eventual full direct elections in line with the Basic Law. As a result of our earlier representations to the Chinese authorities, the Basic Law provides for a progressive increase in directly-elected seats from 20 in 1995, rising to 24 directly-elected seats in 1999 and 30 in 2003, with the option of full direct elections in 2007. In October last year the Hong Kong Government announced a comprehensive review of the electoral legislation and arrangements.
The aim of the review is to examine issues and problems that emerged from the experience of the 1991 elections. The review will be completed in 1992. We shall, in due course, be discussing with the Chinese the arrangements for the next LEGCO elections in 1995 and will continue to press the case for a faster
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rate of democratisation. The aim should be to agree alterations with China in advance on a subject such as this. This is the only way we can be sure that the Legislative Council elected in 1995 will be able to continue in office through 1997 to 1999. If we increased the number of directly-elected seats unilaterally, the Chinese would certainly regard the resulting LEGCO as incompatible with the Basic Law. In all likelihood they would not therefore allow it to continue after 1997.
Lord Ennals: My Lords, I shall have to ask the noble Earl to give way again. He accused me of having advocated the tearing up of agreements already reached. If he reads my speech carefully he will see that I made no such suggestion. He has just used the words "only changed by agreement". I agree with that absolutely. The noble Earl ought not to be making accusations which are not based on fact.
The Earl of Caithness: My Lords, I shall read the noble Lord's speech in the Official Report. I gained the impression that he did not like the present arrangement and that he was quite happy to tear up those arrangements without putting anything in their place which was not agreed with China. If I am wrong, I am delighted. The noble Lord may have made a slightly different speech from the one I understood him to have made. I certainly interpreted it differently.
The democratic freedoms referred to by the noble Lord, Lord Wyatt, go beyond the question of elections, important though that is. The Joint Declaration expressly provides for Hong Kong's present capitalist and democratic way of life, with all its human rights and freedoms, laws and legal system, to continue for at least 50 years after Hong Kong reverts to Chinese sovereignty. Like the noble Lord, Lord MacLehose of Beoch, I was pleased, incidentally, to see press reports over the weekend quoting Mr. Deng Xiaoping as saying that that guarantee will remain the same for 100 years.
There are many aspects to democratic freedom besides the freedom to vote: freedom of speech, freedom of religion, freedom from arbitrary arrest and imprisonment and freedom from mental or physical ill-treatment, to name just a few of the basic ones. Those have been a feature of life in Hong Kong in the past and under the one country, two system approach set out in the Joint Declaration will continue to be so.
In addition, with our support, the Hong Kong Government have introduced a Bill of Rights which became law on 8th June last year. It reinforces protection of the rights of individual citizens. It gives effect in local law to the International Covenant on Civil and Political Rights (ICCPR) as applied in Hong Kong and makes it justiciable in Hong Kong courts. To ensure consistency some local legislation will need to be amended to a limited degree. The Chinese have expressed reservations about the Bill but we have ensured that it is compatible with the Basic Law.
As so many of your Lordships have said, the judiciary has an important role to play in protecting those rights. The Joint Declaration provided that a Court of Final Appeal, to replace the jurisdiction for Hong Kong of the Privy Council after 1997, should be

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established in Hong Kong. It is a key element in providing for Hong Kong's continued judicial independence.
The court's establishment could of course have been left until 1997, with the present arrangements for appeals to the Privy Council continuing until then. However, it is the view of the Hong Kong Government, and one which we fully support, that there is considerable advantage in setting up the court before 1997 so that it can establish working practices and gain experience while Hong Kong is still under British administration. It is also crucial that the court is established in accordance with the Basic Law so that it can continue to function without any disruption through 1997.
The noble Lord, Lord Wyatt, appeared to argue that the agreement reached with the Chinese and Joint Liaison Group on the membership of the Court of Final Appeal contravenes the Basic Law and Joint Declaration. Let me make it absolutely clear that we do not accept that view. I am grateful to my noble friend Lord Geddes for his support.
After the most careful consideration we are satisfied that the agreement is consistent with both the Joint Declaration and the Basic Law. Indeed, if we were not we could not possibly have signed the agreement. We do not consider that the wording of the Joint Declaration or the Basic Law gives the court unfettered discretion to invite as many visiting judges as it wishes.
I am aware of the view that the phrase "as required" in paragraph 4 of Section 3 of Annex 1 of the Joint Declaration may be interpreted to mean as the Court of Final Appeal may itself think fit. We disagree. If that had been the intention of the drafters they could have said so. Rather, as the Attorney-General of Hong Kong has pointed out, the Joint Declaration and Basic Law state that the court may "as required" invite such judges. That is clearly intended as an objective test, as the Chinese language text makes clear, depending on the needs of each case.
Some critics have used the argument that Britain and China have stitched up a deal without consulting Hong Kong. They are obviously unaware of the true situation. The agreement reached on the Court of Final Appeal was made with the approval of the Hong Kong Government, their Executive Council and the Hong Kong judiciary.
The legal profession was consulted on the outline proposals for establishing the court in 1987 and in early 1988, before beginning negotiations with the Chinese Government. During the lengthy negotiation process the views of a wide range of people in Hong Kong, including the legal profession, were consulted. Some have argued that the Court of Final Appeal drawn mainly from the existing Court of Appeal in Hong Kong will not have the ability or international repute of the Privy Council.
Clearly a reputation takes time to acquire. That is another argument for the Court of Final Appeal's early establishment. There will be some cases where specific skills or expertise are required which are not available in Hong Kong. That is why provision is
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made for overseas judges to sit on the Court of Final Appeal. However, it should be noted that in 1990 the percentage of Hong Kong judgments overturned by the Privy Council was much lower than in the case of judgments passed in English courts. That is a good indication of the quality of Hong Kong's judiciary, in which we have full confidence, and there is no soundly based reason for others not to share it.
The noble Lord, Lord Bonham-Carter, will be interested to learn that the Government of Hong Kong are now preparing legislation to establish the Court of Final Appeal in accordance with the agreement reached with the Chinese. That will cover far more than just the membership issue. When it is ready members of the Legislative Council in Hong Kong (and Hong Kong people generally) will have an opportunity to consider the agreement reached with the Chinese in the round. I believe that they will find that it contains satisfactory assurances about the independence of the Hong Kong judiciary after 1997.
I accept that the agreement on the Court of Final Appeal is not ideal. No agreement that is the product of three years' negotiation ever will be. But I hope that members of LEGCO will concentrate on the essential point. So let me make it clear: the choice in practice lies between having a Court of Final Appeal established in Hong Kong well before 1997, on the lines agreed with the Chinese, or having no Court of Final Appeal in Hong Kong before 1997. To reject the legislation will effectively prevent the court's establishment before 1997. That would cause unnecessary uncertainty for Hong Kong's judicial system after 1997.
My noble friend Lord Geddes raised the question of nationality and some very technical points. I can assure him that paragraphs 233 and 234 of the Joint Declaration are still valid. Perhaps he will allow me to write to him on the other points that he raised.
All noble Lords who have spoken in this debate are at one in agreeing that the issues of democracy and the administration of justice are vital to Hong Kong's continued success. I am glad that the noble Lord has given us the opportunity to debate them today. They are part of the much larger task of managing change in Hong Kong so that its development—political, economic and social—can be sustained up to 1997 and beyond. The Joint Declaration is the essential framework for this.
The Hong Kong Government already have a high degree of autonomy in running their own affairs except in the fields of foreign affairs and defence. The Hong Kong Government play a full part in deciding policy on Hong Kong's relations with China, and Hong Kong Government representatives take part in the Sino-British Joint Liaison Group, whose task it is to prepare for the smooth transition in 1997. We maintain the closest contact with the Governor of Hong Kong, who was in London last week. 1, too, look forward to his joining us as a Member of this House; I know that we shall benefit from his great knowledge and experience of Hong Kong. I shall be in Hong Kong for the second time this year next month for an extended visit. Ministers also meet regularly

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with members of EXCO and LEGCO, making sure that the needs and views of Hong Kong people are fully understood.
In summary, the short answer to the Question of the noble Lord, Lord Wyatt, is: within the parameters in which we work, yes, and so are the Hong Kong Government.
Lord Wyatt of Weeford: My Lords, before he concludes, would the noble Earl care to reconsider the strange statement that there is no government party in LEGCO, in view of the fact that the Government appoint the largest single group of Members plus the Attorney-General, the Financial Secretary and the Chief Executive. To say that there is no government party is mad. Are they appointed to vote against the Government? Does the noble Earl expect them to vote against the Government? Of course he does not.
The Earl of Caithness: My Lords, the Chief Executive is part of the administration of Hong Kong. I fear that the noble Lord has not got his facts quite right on this occasion.
Moreover, the prospects are good, a fact which emerged loud and clear from the very successful conference organised by the Hong Kong Trade Development Council in London last week. We have entered into agreements with China that are binding and which all sides have reconfirmed their commitment to honour. With its buoyant economy, its dynamic people and its prime location at the centre of one of the fastest growing regions on earth, Hong Kong can look forward with confidence to the future.
House adjourned at twenty minutes before 10 o'clock.