Lords Sitting of 15 July 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.

Lord Weatherill
The Right Honourable Bruce Bernard Weatherill, having been created Baron Weatherill, of North East Croydon in the London Borough of Croydon, for life—Was, in his robes, introduced between the Baroness Hylton-Foster and the Lord Colnbrook.

Lord Wilson of Tillyorn
Sir David Clive Wilson, GCMG, having been created Baron Wilson of Tillyorn, of Finzean in the District of Kincardine and Deeside and of Fanling in Hong Kong, for life—Was, in his robes, introduced between the Lord MacLehose of Beoch and the Lord Richardson of Duntisbourne.
The Duke of Atholl—Took the Oath.

Design Council: Policy
3.1 p.m.
Viscount Caldecote Viscount Caldecote asked Her Majesty's Government:
What is their policy for the future development of the Design Council.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, the Design Council has played a major role in promoting the importance of design in improving our industrial performance. The Government will continue to place great emphasis on this vital area.
Viscount Caldecote: My Lords, I thank my noble friend for that Answer. In view of the importance which she obviously attaches to the work of the Design Council, can she confirm that the grant-in-aid to the Design Council for the next financial year will be at least as great as it has been during the current financial year?
Baroness Denton of Wakefield: My Lords, my noble friend recognises the importance which I attach to design. In return I praise the work that he did in establishing the Design Council and giving it the charisma which made an enormous difference in those years. Of course, any incoming Government and new Minister will seek to develop many aspects of policies and will continue to examine the work planned. The level of grant will be consistent with the council's corporate objective and its programme of work.
Lord Williams of Elvel: My Lords, cannot the noble Baroness give a straight answer to a straight question? Will the grant-in-aid next year at least remain the same?
Baroness Denton of Wakefield: My Lords, the straight answer, as I tried to indicate in the first part of my answer, is that until the policy and work are sorted out it is impossible to say either yes or no.
Lord Williams of Elvel: My Lords, in giving that perfectly straight answer, is the noble Baroness admitting that the grant could be cut?
Baroness Denton of Wakefield: My Lords, perhaps it will help the noble Lord if I explain that the constant policy of the Government is to ensure value for the money which they spend. As a new Minister I am analysing the whole of the expenditure in the design area. Noble Lords can be certain that we support enormously the aim of encouraging industry to take advantage of the great skills which design brings.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the Answer that she gave to the noble Lord opposite is the only possible and proper answer for a Minister? I was very glad to hear her give it.

Pregnant Women: Employment Rights
3.3 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
What plans they have to implement their manifesto commitment to amend the law relating to the employment rights of pregnant women, to give effect to the EC Directive on Pregnant Workers and to give the right to at least 14 weeks' maternity leave and protection against dismissal on grounds of pregnancy.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the Government will of course fulfil their manifesto commitment. The EC Pregnant Workers' Directive however has yet to be adopted.
Earl Russell: My Lords, I thank the noble Viscount for that reply. I believe that in general we are of one mind on this matter. Perhaps I may ask him more specifically whether he agrees that it is difficult to use the Sex Discrimination Act to prohibit dismissal on grounds of pregnancy because it is hard to find a comparable male condition? Would he therefore consider extending the Employment Protection (Consolidation) Act 1978 to provide protection against unfair dismissal on grounds of pregnancy during the first two years of employment?
Viscount Ullswater: My Lords, I think that the answer to the noble Earl's first question is "No". There are other occasions which would be equally applicable to men as to women. After all, we are talking about time off from work and there are other occasions which would apply equally to men as to women.
The answer to the noble Earl's second supplementary question is that the situation about the directive

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is as I told him. It is a question of waiting to see what happens to the directive before we take any steps towards its implementation or otherwise.
Baroness Turner of Camden: My Lords, is the Minister aware that last year the Government promised Sub-committee C of the Select Committee on the European Communities that they were willing to abandon the two-year qualifying period for pregnancy leave? When may we expect to see that assurance fulfilled?
Viscount Ullswater: My Lords, as the noble Baroness will know, we made a manifesto commitment to implement the EC directive. At the moment that directive has run aground, perhaps on the insistence of Italy, but we need to make progress on that before it is adopted and then we shall fulfil our manifesto commitment.
Baroness Turner of Camden: My Lords, perhaps I may come back on that. A definite promise was made to the Select Committee in November 1991. I am not at all certain that we need to wait for the directive before that assurance is fulfilled.
Viscount Ullswater: My Lords, I believe that the manifesto commitment commits the Government to what is said in that manifesto commitment. I do not think that there is any change in circumstances.
Lord Monson: My Lords, does not the noble Viscount agree that an employer should be neither better off nor worse off financially as a consequence of employing somebody of one sex rather than another? Therefore, if 14 weeks' paid maternity leave is to be brought into effect, should not the burden—and it is a burden—fall upon the state rather than upon the employer?
Viscount Ullswater: My Lords, we shall have to look very carefully at implementing the EC directive if it is adopted. At the moment we have comprehensive payment agreements and maternity allowances which are paid to pregnant women by the Department of Social Security, and those are very satisfactory.
Lord Rochester: My Lords, does not the noble Viscount agree that, irrespective of the fate of the European directive, it is up to the Government to implement their election manifesto commitment?
Viscount Ullswater: My Lords, while we have a live directive it is better to wait and see what happens to that rather than to anticipate it.
Lord Desai: My Lords, can the Minister tell the House how well this country compares to other members of the European Community in relation to pregnancy leave?
Viscount Ullswater: My Lords, overall the package of maternity rights in the United Kingdom is very substantial. Legislation provides for the longest period of maternity absence in the European Community and, unlike in many other member states,
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it gives the right to paid time off for ante-natal care. Also, unlike most member states the UK provides completely free medical care throughout childhood.
Lord Stoddart of Swindon: My Lords, is the noble Viscount aware that so far his replies smack of sleight-of-hand? Is he saying that the Government will implement these improvements only if the EC directive goes through? Is it not a fact that the Government may very well oppose the directive, which will not, therefore, go through because the Government have done just that?
Viscount Ullswater: My Lords, no, the Government are not opposed to the directive. The Government accept the common position that was agreed in December last year. When it comes to what action we will take during the course of our presidency, it is important that we should negotiate in order to see whether we can resolve the difficult situation in which we find ourselves at the moment.
Earl Russell: My Lords, does the noble Viscount agree that his answer, indicating that there are male conditions with which pregnancy could be compared, creates some problems? Does he agree that pregnancy is not an illness?
Viscount Ullswater: My Lords, I do not think that that was what I was trying to indicate. I was trying to indicate that pregnancy requires time off work. So do other conditions.

Homelessness: Cost
3.10 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What are the latest figures for people now living in bed and breakfast accommodation through homelessness, and what has been the annual financial cost for the last five years.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, on 31st March 1992 there were 12,423 homeless households temporarily accommodated in bed and breakfast hotels in England and Wales. The net cost to English and Welsh local authorities of providing bed and breakfast accommodation over the most recent five-year period,1985– 90, for which figures are available, was £34 million, £76 million, £104 million, £91 million and £74 million respectively.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for that very detailed reply. I am sure that he is aware of the recent report commissioned by the Association of London Authorities, which is Labour controlled, and by the London Boroughs Association, which is Conservative controlled, showing that the figure for London has now reached £200 million a year and that by 1995, at the present rate of deterioration, the figure will be £500 million. Is the noble Lord aware that £500 million could build 100,000 houses? Will he urge the Secretary of State to abandon his vendetta

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against local authorities and make sums available to build the low-cost housing which is so urgently required to deal with the situation?
Lord Strathclyde: My Lords, the noble Lord will be glad to know that the Government are not turning their back on social housing. Over the next three years more than £6 billion will be channelled to housing associations. This will provide more than 150,000 new homes for rent and low-cost purchase by 1995– 96.
The Lord Bishop of Worcester: My Lords, does the noble Lord agree that there is another cost which is hard to compute; namely, the cost to the nation of large numbers of children living possibly for the first five years of their lives in bed and breakfast accommodation? Does he not further agree that there are on the whole two reasons why people stay so long in bed and breakfast accommodation? The first is that alternative housing is not available; the second is that they cannot afford to rent. Will the noble Lord therefore give an assurance that local authorities will be able to keep more than 25 per cent. of the profits from selling council houses in order to build up their stocks? Secondly, will he give an assurance that the Government will reconsider the provisions of the Social Security Act 1986 under which families on income support constantly find themselves unable to pay the cost of renting—very often to the tune of £20 a week?
Lord Strathclyde: My Lords, the right reverend Prelate is correct to remind the House that there are costs involved in homelessness which in themselves are not easy to calculate, particularly the effect that it has on children. However, over the past 12 to 13 years there has been an increase of more than 2 million units in the housing stock, a far higher rate of increase than the growth of population. But pressure of demand continues to rise. That is caused by many factors: old people living longer; young people wanting to leave home earlier; and, unfortunately—and perhaps most important for the right reverend Prelate—a greater number of family breakdowns. That is the reason for extra homelessness. The Government are spending the money.
Baroness Jeger: My Lords, can the noble Lord say why we continue to refer to bed and breakfast accommodation? Is he not aware, as I am, having visited many of these places, that "breakfast" is a gas ring on the landing shared by several families? Those landlords are taking money from local authorities—from the taxpayer or the poll tax payer—because there is not sufficient decent, regular housing? Can he do something about such abuse of public money?
Lord Strathclyde: My Lords, the noble Baroness will be glad to know that local authorities are working more closely together than ever before so as to combat abuse by landlords of bed and breakfast accommodation and to make sure that proper cooking facilities are provided. I know that there has been bad practice in the past, but I hope that that is now behind us.
Lord Bellwin: My Lords, can the Minister say how many empty dwellings are currently in local authority ownership?
Lord Strathclyde: My Lords, on 1st April 1991 there were 83,100 empty council houses and flats in England of which about 24 per cent. had been empty for more than a year.
Lord Ross of Newport: My Lords, is it not a fact that more empty properties are owned by the Government than by local authorities? Having said that, is it not also true that despite the extra money now being provided to housing associations, which is certainly very welcome, the figures for bed and breakfast accommodation continue to rise? It seems daft to those of us who do not understand Treasury matters that we should be spending between £100 million, £200 million, or even £500 million on bed and breakfast accommodation when that money could go into bricks and mortar? A Conservative government once built
300,000 houses in a year. Can the present Government not try to do something similar again?
Lord Strathclyde: My Lords, government departments, like everyone else, are encouraged increasingly to make the best use of the properties they have, particularly if those properties are empty. The answer is not simply the building of new houses. It is encouraging the use of existing homes, which is why in the Budget we provided for lodgers to be taken in tax free. There have been a number of other initiatives over the course of the past few years; all go to help. We are open to other suggestions as well.
Earl Russell: My Lords, does the Minister agree that one practical way of reducing the cost of bed and breakfast accommodation would be to put victims of domestic violence in women's refuges rather than in bed and breakfast accommodation as they are both a cheaper and a more satisfactory alternative?
Lord Strathclyde: My Lords, essentially the noble Earl is right. But only 4 per cent. of priority-need acceptances are victims of domestic violence.
Lord Stallard: My Lords, perhaps I may refer back to the Minister's first Answer in which he mentioned a figure of 12,423 homeless households in bed and breakfast accommodation. That figure is a gross underestimate of the true figure. According to those who work in the field—Shelter and CHAR—the number of households in temporary accommodation is 60,000. That costs about £15,500 per household per year whereas the first year cost of building a new home to rent is £8,200. How does the noble Lord justify the lack of initiative in building more houses when the figures so obviously cry out for that result? Secondly, can the noble Lord say whether there has yet been a decision in the deadlock between the Department of the Environment and the Department of Social Security about the funding of 500 bed spaces which the housing associations agreed to undertake under the mental health initiative?
Lord Strathclyde: My Lords, the Answer that I gave originally was the correct answer to the Question

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that I was asked. If the noble Lord wishes to disagree I think that he should write to me. The noble Lord asked other questions which I think are beyond the scope of the Question on the Order Paper.
Baroness Faithful!: My Lords, why are the local authorities allowed to contravene fire regulations and housing regulations when approving such accommodation?
Lord Strathclyde: My Lords, increasingly local authorities make sure that the bed and breakfast accommodation they use for housing the homeless comes up to the highest possible standards both in terms of fire precautions and suitable cooking facilities.
Lord Stallard: My Lords, the noble Lord is mistaken when he says that my questions are beyond the scope of the original Question. He may not know the answers but my questions were within the scope of the original Question. I asked about the cost, and the original Question asked about the cost. If the Minister does not know the answer, he should say so. He should not try to dodge it.
Lord Strathclyde: My Lords, I always try very hard not to dodge questions, especially those from the noble Lord. I said that I had answered correctly the Question that I was asked. I made the provision that the figures I used were for the years that were the most recently available. If the noble Lord has unsubstantiated, unofficial figures, that is a matter for him.
Lord Cocks of Hartcliffe: My Lords, as the Minister has asked the House for suggestions, will the Government contemplate during the substantial Recess that we are facing a suggestion that I have made on several occasions; namely, that if the institutes of higher education would take more candidates who are based and lived locally it would release so many housing units for other people that the problem could be solved in a matter of two or three years?
Lord Strathclyde: My Lords, the noble Lord makes an interesting and useful point and one that I shall certainly consider in my department.
Lord Dean of Beswick: My Lords, in answer to my first supplementary question, the Minister gave detailed figures regarding the Government's building programme. I believe that he talked of upwards of 100,000 units that they were funding over a period of years. However, is he aware that a report issued this morning by Shelter supports the findings of other associations and organisations dealing with the sharp end of homelessness that the target to deal with the situation ought to be 100,000 units per year? On the basis of the figures quoted by the Minister, I think that the number of units involved is less than 50,000 a year. Therefore, we are obviously running backwards.
Lord Strathclyde: My Lords, in answer to an earlier question I explained that the reasons for homelessness
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are many and varied. We must look at the overall problem and not just find a solution in terms of building more houses.

South Africa
3.21 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
Whether they have taken any action to bring international pressure on South Africa to halt the killing of black Africans and to promote the search for a genuine non-racial, democratic constitution.
Baroness Trumpington: My Lords, Her Majesty's Government have provided practical help to the Goldstone Commission of Inquiry into Public Violence and Intimidation in South Africa with the secondment of three experts. We shall support international initiatives that have the backing of all parties to reduce violence. We are playing our full part in efforts to get constitutional negotiations back on track as soon as possible.
Lord Hatch of Lusby: My Lords, I thank the Minister for that Answer. However, is she aware that President de Klerk and his Ministers have publicly admitted that they have been financing the Inkatha Freedom Party, which has been seen to be mainly responsible for the violence in the townships? Is she further aware that President de Klerk and his Ministers through all the negotiations have shown that their major design is to preserve and safeguard white supremacy rather than have a true non-racial democracy? As the Security Council is meeting tonight, can the noble Baroness tell the House what attitude the British Government will take when the council is asked by the African organisations to send monitors to help the situation in their country?
Baroness Trumpington: My Lords, I am aware—and I am glad—that the Security Council is discussing South Africa today and that it will hear directly from the parties involved. We hope that the international community will give a strong signal that negotiations should resume as soon as possible. We also hope for unanimous support in the Security Council for resolutions that condemn violence from whatever quarter and call for the earliest possible resumption of talks.
To return to the earlier part of the question, President de Klerk has given a firm commitment that abuses by members of the security forces will be thoroughly investigated and that those suspected of illegal activities will be prosecuted. However, I cannot agree with the earlier part of the noble Lord's supplementary question.
Lord Ennals: My Lords, can the Minister say, first, whether the Government are satisfied that it is the intention of President de Klerk to introduce a constitution based on total equality between the races? Secondly, bearing in mind the great dangers involved and the debate taking place in the Security Council today, is it the view of Her Majesty's

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Government that there is an important role for the United Nations to play in trying to lead towards a peaceful settlement?
Baroness Trumpington: My Lords, we all have a role to play in trying to get the various parties together to speak with one voice in the hope that the new Africa will emerge as it was continuing to do until the recent appalling massacre that took place.
Lord Cledwyn of Penrhos: My Lords, I am much obliged to the noble Baroness for her comprehensive replies to these important questions. Can she say whether Her Majesty's Government favour the proposal to send a fact-finding mission to South Africa? Can she further say whether the Government are in fact making representations to the South African Government to ensure that the security forces there take a detached and neutral stance in the violence that is taking place?
Baroness Trumpington: My Lords, we recognise that there may be a role for international observers. But that is a matter for the South Africans to decide. We would consider responding positively within an appropriate international framework to any requests which came from all parties. We would expect the role of any such observers to be to strengthen existing structures established under the Peace Accord of September 1991.
Lord Monson: My Lords, does the Minister agree that it is somewhat curious to imply, as the original Question appears to, that all violent deaths of black people in South Africa are to be attributed to President de Klerk and the South African Government? Is it not the case, for example, that a very large number of members of the Zulu Inkatha movement, especially in Natal, have been murdered by members of the ANC who are well armed with AK47 rifles?
Baroness Trumpington: My Lords, let me make it absolutely clear that HMG are appalled by the recent escalation in violence, especially the loss of life in Boipatong. As I said before, we have noted President de Klerk's commitment to bring those responsible to justice. We hope that that will happen as soon as possible. The causes of violence are complex; it is not for us to assign blame or level allegations. It is important that all the political leaders urge restraint on their followers.
Lord St. John of Bletso: My Lords, does the Minister agree that much of the violence in South Africa can be attributed to the poverty problem? Surely one of the major problems is to meet the expectations of the emancipated. Further, is the Minister aware that South Africa is currently suffering its third consecutive year of negative economic growth? Under the circumstances, will she put pressure on the ANC, COSATU and South African Communist Party (SACP) alliance not to proceed with their strike action planned for between 3rd and 9th August which will clearly devastate the economy,
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cause an escalation of violence and deter foreign investment in South Africa which is desperately needed?
Baroness Trumpington: My Lords, with regard to the latter part of the noble Lord's question, I shall certainly pass on his remarks to my right honourable friend the Secretary of State. However, in regard to the first part, the new South Africa will survive only if economic growth returns. I agree that the economy is flat and that the population grows by nearly 3 per cent. As the EC and the G7 have pointed out, a necessary condition for growth is access to foreign capital. That is why Britain is among the leaders in giving aid which will help all black people.
The Lord Bishop of Worcester: My Lords, is the noble Baroness aware that those who went to the funeral of the Boipatong victims were very concerned at the alienation of the young black Africans in the townships from their more moderate leaders? Therefore, can she, first, give an assurance that Her Majesty's Government will actually affirm and help to encourage the status of the moderate leadership in such a way that its credibility remains and that it is able to preserve the townships from the more extreme element? Secondly, will the Government be able to press President de Klerk to make even more concessions? I have no doubt that the noble Baroness is aware that many people are grateful that he has withdrawn one of the more controversial military units. There is the further matter of bringing to justice those who are guilty. Will she give us an assurance that Her Majesty's Government will seek that justice?
Baroness Trumpington: My Lords, I think that I have already answered both questions. We are playing our full part in the efforts to get constitutional negotiations back on track as soon as possible. I said that President de Klerk's commitment is to bring to justice those responsible.
Lord Mackie of Benshie: My Lords, is the Minister aware that all efforts designed to bring agreement and peace to South Africa depend upon the South African Government putting their security forces under discipline and control? Their absence is obvious to anyone who reads the newspapers and watches the news.
Baroness Trumpington: My Lords, I think that I have already answered that question as well. I said that President de Klerk has given a firm commitment that abuses by members of the security forces will be investigated thoroughly and that those suspected of illegal activities will be prosecuted. If anyone has a fresh question, I should like to give a fresh answer.

Business
3.31 p.m.
Lord Hesketh: My Lords, with the leave of the House, I should like to say a word about the two debates standing in the names of the noble Lords, Lord Williams of Elvel and Lord Judd. As the mover is allowed 15 minutes and the Minister should rise to

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reply not less than 20 minutes before the scheduled end of the debate, in the case of the short debate in the name of the noble Lord, Lord Williams of Elvel, this means that all other speeches should be limited to a maximum of nine minutes and in that of the noble Lord, Lord Judd,10 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.
I take the opportunity once again to remind your Lordships that the digital timing devices in the Chamber indicate the moments that have passed rather than the moments to be anticipated; thus, nine minutes means that the 10th minute has been entered into.
This might also be a suitable occasion for me to draw to your Lordships' attention the fact that today was the last day upon which we shall have the great pleasure of Garter King of Arms introducing noble Lords to your Lordships' House. We are all, I am sure, deeply grateful to him for the occasions upon which he has led many Peers across the Rubicon that lies between the Moses Room and your Lordships' Chamber on entering your Lordships' House.
Noble Lords: Hear, hear!

Business of the House
Lord Hesketh: My Lords, in the name of my noble friend the Lord Privy Seal, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the order of Thursday last relating to the Motions in the names of the Lord Williams of Elvel and the Lord Judd set down for today be amended so that the debates on both Motions shall be limited to 2= hours.—(Lord Hesketh.)
On Question, Motion agreed to.

Industrial Policy
3.33 p.m.
Lord Williams of Elvel Lord Williams of Elvel rose to call attention to the case for an effective industrial policy in the light of sharpening competition within the European Community and throughout the world; and to move for Papers.
The noble Lord said: My Lords, perhaps I may say how much I look forward to hearing the maiden speeches of my noble friend Lord Howell and the noble Lord, Lord Chilver. I am sure that we shall benefit greatly from their wisdom and that our debate will be very much the richer for their contributions.
We have recently had a series of debates about the European Community and the general state of the United Kingdom economy. Indeed, we had two such debates only yesterday. The theme that I wish to introduce to your Lordships this afternoon is certainly related to those issues but in a somewhat different dimension. It is this: are we satisfied that British industry is in a position to confront the challenges that face it? If we are not so satisfied, what, if anything, should we be doing about it?
Let me first outline to your Lordships the nature of the competition that we shall face over the next few years. There is of course the completion of the European single market. That is not merely a matter of liberalisation of trade between the different members of the Community. In the way that it is developing—this should be openly recognised—it has become no less than the restructuring of the European manufacturing base in which only the best will survive. By the "best" I mean those who have plant and machinery up to the most modern standards—up-to-date information technology, modern management methods; and a clear strategy to develop good products targeted to clearly identified customers.
To be among the best is not necessarily to be big. Small and medium size firms can be among the best. They can compete; but they must have the characteristics that I have described to survive in the single European market. That is the challenge we face in the single market.
Then there is the challenge from the wider world to which my Motion draws attention. Even if—and this is something that we would deplore on this side of the House—there is in the end no agreement on the GATT Uruguay Round, there is no doubt that competition from countries that see their economic future in the development of an industrial base will during the 1990s be especially severe. The OECD recently published what I would describe as a look into the future through a crystal ball. It forecast that Europe and the United States would gradually lose economic power to the countries of the Pacific rim—not just Japan, but Korea, Malaysia, Singapore, Indonesia and last but by no manner of means least to China herself.
In the face of those two competitive challenges—from our Community partners and from the rest of the world—we have to ask ourselves, and I ask your Lordships, where we in the United Kingdom now stand. The answer is not, I am bound to say, encouraging. It is not just a question of general economic malaise, profound as I believe that to be. The worry is more specific. Most seriously, business investment is badly down, and manufacturing investment is faring even worse, but even that might not matter so much if the quality of investment can improve to make up for the deficiency in quantity. But again here I can only offer your Lordships a certain amount of discomfort.
About four years ago a number of companies recognised the competitive nature of the world of the 1990s for what it would be and made their plans accordingly. In the relatively easy credit conditions of those days they invested in plant modernisation, streamlined their marketing and embarked upon extensive programmes of research for new products. All, your Lordships might say, very sensible and very enlightened. There were other companies, on the other hand, which did not take such a view and decided not to invest in new plant or new information technology and which soldiered on with old-fashioned plant and a low-productivity labour force.
Let us consider the present circumstances of today. Let us consider Company A—one of the enlightened

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ones. It has already rationalised its labour force to the minimum but in this time of static or even falling demand for its products it is having to carry the now penal cost of the capital it has raised to invest in modern plant. Result: serious financial trouble. Let us consider, on the other hand, Company B—one of the less enlightened. It has money in the bank. It can manage without difficulty a fall in the demand for its products by the simple expedient of sacking part of its workforce. Result: survival.
Between those two companies, can anyone pretend that Company B is better equipped than Company A to face the competitive challenges that I have described? Of course not. Company B will go under, but if Company A has already gone under, where does that then leave us? That picture is a precise reflection of many sectors of our industrial economy today throughout the country.
All in all, I am bound to conclude that at best we are only able to limp into the single market and that we are substantially ill-equipped to compete with the emerging economies of the Far East. The truth of the matter is that we have relied so much on short-term financial judgments that in many sectors we no longer have any capacity in Britain at all. That is why our import bill is high and rising—even when the economy is at best flat and the consumer is reluctant to spend.
What should we be doing? It would be absurd to pretend that there is an easy, quick-fix answer to the question. But there is one thing that we should be doing, in my view immediately. The one area in which it is possible for a policy change to have tangible effect in the near term is in government support for the financing packages available for large long-term projects for exports. We have been losing out badly in world markets, not because of lack of skills or the price of the goods that we try to export, but because of uncompetitive support from ECGD. We must be prepared to match the advantages our competitors give their own exporters; and that is an immediate priority.
Beyond that, I recognise that the question that I asked can only be answered in the long term. It is easy to destroy an industry. We have seen that in the early 1980s and we are seeing it even now. But it takes a long and sometimes painful time to build a new industry which is fully competitive, with world-beating products and the right penetration in world markets. That is what we now need. To do it requires a determined and effective industrial policy from the Government. That is my main message this afternoon.
The construct of such a policy is well known to your Lordships. It would entail an enhanced role for the Department of Trade and Industry. The Treasury can no longer be allowed to dominate our industrial affairs. Not only that, the re-creation of our industrial base has to he set as the prime objective of government. Transport policy must be framed to that purpose. No policy for industry will ever be successful unless industry's products can be efficiently distributed to industry's major markets. Regional policy, too, must be geared to that ultimate imperative for the simple reason, again, that no industrial policy will ever
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be effective unless its results are properly distributed between the regions of England, and Scotland and Wales.
Sources of finance must not only be readily available but must be available to support companies on a long-term basis so that they do not succumb to the wavering fashions of the financial markets. Not only should the quantity of investment be raised, but the quality of investment is all-important. That means a commitment to a much higher level of civil research and development and also to a highly trained management and workforce, team work in the workplace and an education system that will provide the basic formation and motivation for young people to join in what should be an exciting future. Furthermore, and finally, this whole effort must be orchestrated in a forum which embraces the various interests involved: the government, the CBI, trade unions and consumer representatives.
Your Lordships might at this stage complain that I am doing nothing but recycling the policy that my party put before the electorate last April at the general election. I have to accept that criticism, but I do not believe that because we lost the election it is a wrong policy. I cannot disavow in July what I put forward in April. But—and here I come to the most important point—all the policy recommendations that I have put forward find an almost precise echo in a book entitled Where There's A Will, published in 1987 under the authorship of one Mr. Michael Heseltine. As the world undoubtedly knows, he is now the Cabinet Minister in charge of the Department of Trade and Industry. There are many quotations I could give your Lordships from the book in support of what I have said, but I do not wish to try your Lordships' patience overmuch. Just one will suffice. On page 101 he writes:
"The most serious industrial managers are now increasingly and articulately dismissive of a 'hands-off relationship between government and industry. They want, and should be offered, a new partnership between those whose working lives are spent in British industry and commerce and the political and administrative machine. They want more certainty and stability in decision-taking and they want a longer-term view—not an apologetic 'help me when I'm down' affair, but a proud and visible commitment to a jointly conceived set of measures for the creation of wealth".
I could not possibly have put it better myself. Admirable sentiments—and not only admirable but right. What has happened since the author of those sentiments has become, as he now chooses to call himself, President of the Board of Trade? The entire vision has been abandoned. NEDC, the symbol of the partnership between government and industry, has been abolished in a pre-emptive strike by the Treasury.
There will be no extra support for exports—the Treasury will not allow it; no English development agency to follow those in Scotland and Wales; no new competition policy and, above all, no new industrial strategy to sweep Westminster and Whitehall into the 21st century. All we have seen is a commitment to "one stop" shops and some rearranging of the furniture in Victoria Street.
The shame of it is that Mr. Heseltine's analysis and his prescriptions were broadly right. As I said in the debate on the Address, we would support the new

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president if he put into effect those prescriptions that he had written in his books. The fact that when in office he has been roundly defeated by the Treasury says more about the Treasury and the Treasury-dominated Government than about the DTI.
However, the matter is more serious than a simple battle for turf between two government departments. The DTI's defeat is a symbol of our industrial and economic decline. As we move into the competitive world of the future, that decline will become more and more apparent and the Government—this Government—will have no one to blame but themselves. I beg to move for Papers.
3.48 p.m.
Lord Joseph: My Lords, I share with the noble Lord, Lord Williams, the welcome and the attention with which the House will listen to my noble friend Lord Chilver and the noble Lord, Lord Howell. I also share with him a deep concern about the competitiveness of this country's business activities. However, I hope to persuade your Lordships that the spokesman for the party opposite will have to accept some attitudes far more difficult or at least unfamiliar to his party than he indicated in his speech this afternoon. I say in no perverse spirit that I hope very much that the party opposite will add to the recommendations that it has just made through its spokesman some of the matters that have been more controversial in party political terms than he ventured on this afternoon.
The noble Lord touched, quite understandably, on the level of investment. I was glad he recognised that it is quality as well as quantity that counts. He touched, understandably, on finance. He failed to recognise that our problems stem from misjudgments in the middle of the 1980s which, in a previous debate a week ago, I acknowledged were the responsibility of the Government. However, I added that the party opposite aided and abetted the Government in advocating that interest rates should be lower than they then were when with hindsight we can see they should have been much higher. Those misjudgments led to the recession and the high interest rates which the country now endures.
The noble Lord also spoke of research and development. He failed to repeat his party's acceptance of a training programme as an indispensable component of success. I regard training and improved education as important. However, I recommend to your Lordships a Hobart paper published only this week entitled Training Too Much? which was produced by the Institute of Economic Affairs. From what I have read that paper is thoroughly worth reading.
As for expanded education, I yield to no one in thinking that we have treated scandalously the non-academic children and adolescents of this country. However, I tremble a little for future entrepreneurship if we expand higher education with its present propensity to be slightly hostile to business as a whole and slightly hostile to enterprise.
I should like to take this opportunity to deal with yearnings which may exist in this House and in
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another place, and on both sides of both Houses, to adopt the more apparently successful interventionist policy of Japan. My right honourable friend Mr. Heseltine needs no one to defend him. He is perfectly able to defend himself. For those noble Lords who yearn, albeit furtively, for a little touch of MITI in this country, I recommend they read a book, which I have just read, by Chalmers Johnson published by the Stanford University Press entitled MITI—The Japanese Miracle.
MITI and the present skill of the Japanese government, in co-operation with Japanese business, have not emerged immediately but rather after decades of painful and harrowing trial and error. It is a delicate operation of co-operation between interventionist government and business. It succeeds stages when the Japanese Government sought to solve their economic imperatives by way of cartelizing Japanese business. That failed and led to another stage in which the Japanese Government adopted wholesale policies of intervention. That stage failed relatively speaking and it has been succeeded by the present co-operation between Japanese business and the Japanese Government, including MITI.
Noble Lords must accept that we are witnessing in Japan a successful example of a developmental state. It is not a welfare state, as some noble Lords welcome in this country. It is not a state dedicated to equality or to justice, let alone social justice. It is not a regulating state. It is a bureaucratic state. I believe there would have to occur in this country a veritable metamorphosis for us to follow the Japanese example. What are we to do in this country? For various reasons, some of them very understandable, too much of our talent flows into professional and social services, advertising and non-business activities. That factor is partly due to the impression given that manufacturing and business only too recently were pervaded by Luddism. That situation is partly due also to the conditions of pay and responsibility which management offers in business. That is for management to alter.
Today we must speak of something which the party opposite may find itself less willing to advocate than the noble Lord who has just spoken. In this country there has to be—I speak of things that are hard to achieve—a much greater recognition of the dependence of jobs and prosperity and of social benefits on competitive business. Even now I do not believe that dependence is widely understood.
When I was Secretary of State for Education and Science I visited the sixth forms of many schools. I used to ask the teachers to leave and I then spoke alone to the pupils. I asked them what lay ahead for them. They almost always answered that there were only two modes of life ahead for them, either employment or unemployment. I used to point out gently that there were two other modes of life for a business career; there was self-employment and one day perhaps employer-ment. That concept seemed unfamiliar to them. I do not believe those in the senior common room understood that there were four such modes.

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We depend desperately upon scientists and engineers but they still flinch from vulgar ideas of profit. I was the Minister responsible for trying to persuade a brilliant, world famous laboratory in one of our great universities to move into the market place with some of its products. A special sealed chamber had to be designed in which the scientists could work and not suffer any contamination from profits. We designed something called Celltech which I am glad to say is now taking off. It would not do any harm to the objectives that I and the whole House want if profit, made in competition and subject to the rule of law, were more widely accepted, including by our scientists and engineers. We desperately need more entrepreneurs in this country.
How will Her Majesty's loyal Opposition respond to a particular criterion? I yearn for that criterion although I have no reason to believe that it will happen. Let us suppose that one day the Government suggest a reduction in the burden of capital gains tax. The immediate instant reaction of the Labour Party will be to state that as a result of that lessening of the burden of capital gains tax the wealthy will become wealthier. Some competitors of ours have a quite different capital gains tax structure that penalises short-term gains but exempts long-term gains. That is probably the kind of policy we need in this country. But until the Labour Party accepts that, there will be nothing like full employment and there will be insufficient entrepreneurship; and until we get rid of this incubus of capital gains as it is now, I do not accept the protestations of the noble Lord as meeting the needs of the country.
I agree with him that there is no quick fix coming. The structure of business matters, the corporate nature of Europe and the protectionist nature of Europe are matters we must consider. We are being, through Europe, wicked to the third world and to Eastern Europe in keeping out their products. Were there more time in this debate I would speak for longer on that matter. I accept the same objective as the noble Lord, but I do not believe he has bitten into the real needs of this country.
3.58 p.m
Lord Ezra: My Lords, the noble Lord, Lord Williams of Elvel, in introducing this debate drew attention to the fact that this is not the first time in recent days we have discussed the economy. I participated in a debate introduced by the noble Lord, Lord Dean of Beswick, last week on the subject, and yesterday during the debate on the Finance Bill the economy was widely touched on. Nonetheless the difficult economic situation in which we find ourselves thoroughly justifies the frequency with which we discuss this subject.
There are many aspects to the problem of our industrial situation. I wish to discuss particularly our balance of payments. Britain's visible exports amount to no less than 19 per cent. of GDP. In addition there are substantial invisible exports consisting of financial and consultancy services, tourism, shipping and earnings from overseas investments. Thus, exports of goods and services are big business for this country
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and the CBI estimates that the UK exports 40 per cent. more per capita than Japan. That is a remarkable achievement.
However, the trouble is that exports cannot be considered in isolation. For the past five years more goods have been imported than have been exported. That is particularly true of visible trade. The last year in which a positive trade balance was achieved in the UK was 1985. That was the year in which the Select Committee on Overseas Trade, so ably led by the noble Lord, Lord Aldington, and with which the noble Lord, Lord Stoddart, and I were involved, reported to the House. It foresaw that unless current policies were changed a progressive deterioration in Britain's trade balance would set in.
The committee estimated that that might amount to a deficit of some £10 billion by 1989. At the time that was considered to be wildly pessimistic. In the event it proved to be far too optimistic as the deficit in that year exceeded £20 billion. Subsequently deficits have fallen to £15 billion in 1990 and £5 billion in 1991. However, in 1992, based on figures published so far this year by the Government statistical service, the deficit could rise again to perhaps as much as £10 billion. In the case of visible trade, excluding oil and erratic items, the deficit in 1991 was £13.5 billion and for the first five months of this year unfortunately it is running at a rate noticeably above that.
That situation arises during a continuing period of recession, but it has been evident during the post-war period that as the economy picks up so the balance of payments deteriorates further. Therefore, if the economy begins to pick up either towards the end of this year, as the Government hope, or during the course of next year, as some of us feel is the earliest likely date, on past form we could expect that fortunate occurrence of a recovery to be accompanied by a widening of the balance of payments gap, which is already wide enough.
There can be only one explanation for that situation. That is the inadequacy of our industrial capacity. While there has been noticeable improvement in productivity in a number of sectors of British industry, that has not made up for the underlying lack of capacity. One therefore returns to the question of investment, which has already been mentioned in today's debate by the noble Lord, Lord Williams, and the noble Lord, Lord Joseph. Unfortunately investment in manufacturing industry in particular has been declining at a substantial rate. According to CBI statistics it fell by 15 per cent. in 1991 compared with 1990 and further falls are forecast this year. It is therefore vital to create the conditions under which industry will start to invest again.
That is an issue which has been widely ventilated. If, for reasons which the Government have repeatedly drawn to our attention, it is not possible for this country unilaterally to reduce interest rates, then we must look at other measures, particularly fiscal measures. Fiscal measures which have been mentioned repeatedly in debates on this subject have been an increase in investment allowances and putting more

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money into essential infrastructure to create the right conditions for industry, particularly transport, training and education and research.
It could well be argued that to spend public money in those directions would add to the already high public sector borrowing requirement. That is perfectly true, but if we do not stimulate the economy in some way the PSBR will go up anyway in financing increasing unemployment. Surely it would be better to spend more on the PSBR to finance productive investment which could stem unemployment than simply have to go on financing an ever-increased level of unemployment.
I should like to draw particular attention to the stimulus of exports. The noble Lord, Lord Williams, mentioned the need for financial packages for export projects to be on the same basis and same scale as those of our major competitors. I should like to refer specifically to export services. I have found that the amount spent on export promotion services in Britain is less than is the case with many of our major competitors. In 1990– 91 some £31 million was spent on those services. That was £6 million less than the previous year, and indeed the amount spent on those services in recent years has declined progressively in real terms.
The British Overseas Trade Board's latest annual report indicates that that fall in expenditure is attributable in part to a decline in the take-up of certain export services. That is a serious matter because the quality of the services offered by the BOTB is, in my opinion, generally high. Therefore it means either that insufficient effort has been made to promote the available services or that the charges made for them are too high. Some of the services offered, such as those relating to overseas trade fairs and outward missions, have limiting conditions attached to them. At a time when it is vital to stimulate exports it seems questionable whether restrictions of that sort should be imposed. I therefore feel that a wide-ranging review of export services is called for.
To conclude, we have been going through a prolonged period of declining employment and investment in industry. It is essential that those trends be reversed. When the economy ran too fast in 1989 the Government began applying the brakes. Now that the economy is running well below the speed limit it is time for a touch of the accelerator.
4.6 p.m.
Lord Howell: My Lords, first of all I should like to express my personal appreciation of the very warm and kindly reception I have had from all sides of this House. It is 37 years since I made my maiden speech in the other place. I shall therefore hope to enjoy more than my fair share of the traditional tolerance of this place in this speech and in future months as I can assure your Lordships that I shall attempt to rid myself of the old Adam as soon as possible.
I am well aware that maiden speeches should not cross the conventions of the House and should be reasonably brief. I assure your Lordships that in my time I have refereed far too many highly contentious
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and emotional football matches not to wish to enforce the rules, however distinguished the players. I hope that at the end of this speech the goal posts will still be in the same position as they were when I stood up.
Interestingly enough my first maiden speech was also on this subject of industrial growth and harmony, which is a matter of the highest priority for this country. During the whole of my public life I have been sustained by the great city of Birmingham, which of course is suffering badly at the moment but which has been at the heart of the industrial life of this country. I am therefore grateful to my noble friend Lord Williams for calling attention to these matters today. As far as possible I shall avoid controversy by allowing the facts to speak for themselves, which is more usual in this place than in the place from whence I came.
The facts could not be more devastating than at present. Your Lordships are familiar with them, and some of them have just been recited by the noble Lord, Lord Ezra, and by my noble friend. Therefore, I shall not go into them in detail except to say that we know that GDP has fallen for six consecutive quarters and is 3.6 per cent. down over 1990– 91; fixed investments are down; the current account deficit must be the cause of the greatest concern to us all; 30,722 businesses collapsed in the first six months of this year; and unemployment is officially put at 2.7 million but most of us believe that it is much higher. In the West Midlands alone in 1991 manufacturing employment fell by 9.1 per cent. and output declined by 8.5 per cent. Business failures in the West Midlands are up 40 per cent. in the first six months of this year to 2,020. These are catastrophic figures.
I think the question to be asked in this debate, which the noble Lord addressed is, what is the purpose of all this. How are we to rescue ourselves from it? How can so much of our industrial heartland ever again compete and export when it is being laid so low by the recession? I talk to a great many businessmen in the CBI, chambers of commerce and the Engineering Employers' Federation, and I talk to trade unions and others. All of them regard the argument over the correct level of interest rates as purely academic as far as their businesses are concerned. My great fear is that we are not only destroying the industrial base of the country; we are destroying its social fabric.
I was brought up to believe in the Protestant work ethic. I know that for millions of youngsters, including myself and, I suspect, many of your Lordships, the discipline of the workplace was one of the most important things in their lives. If millions of people do not know and never will know the discipline of the workplace, what social effects do we expect that to have in the world outside? That is very much part and parcel of the need for an industrial policy. For example, what on earth can we say about the recent finding of the career service that in 1991 only one in 10 school-leavers had a job to go to—a 50 per cent. reduction in the position three years earlier. If we look at the dramatic drop in business opportunities for graduates and people coming out of technical colleges the situation is equally startling.

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I believe that industrial policy in this country has been sacrificed on the altar of fiscal rectitude and we desperately need to have a new industrial strategy. I base my comments on the advice I have received from my business colleagues in the West Midlands. We need to have a policy which will create a new partnership between manufacturing industry, the banks—which have a lot to answer for—and the Government. We need long-term investment, with tax incentives for technology and research and development. We also need regional development agencies and improved capital allowances. Can we not end the ludicrous policy of stopping local authorities spending their capital receipts on building houses in order to help the building industry get going again?
The West Midlands also needs an air link from Birmingham to the United States on which we have been pressing the Government for a long time. We need help with the MetroLine to link the Black Country with Birmingham's International Convention Centre, the National Exhibition Centre and the National Indoor Arena. It is a story that beggars belief. It is a £100 million project. A two-year appraisal (the most thorough ever undertaken) was made by the Department of Transport. It gave it the green light. The Government announced a £21.5 million grant for the tender process alone. That encouraged the private sector to put forward schemes and spend hundreds of thousands of pounds on its own feasibility studies. Incidentally, although the £1.5 million help had been announced at the Conservative Party Conference last October, immediately after the election when business houses had tendered and spent hundreds of thousands of pounds, the Government announced that they were not going on with it and there was no money for this extremely vital regional railway link. One result of that is that Birmingham and the West Midlands have lost a £10 million grant from European funds which they desperately need.
Another matter of vital importance given the geographical location of that part of the country is the Channel Tunnel. It is another incredible story. A £9 billion investment was jointly announced by the two Prime Ministers. The French have gone ahead and built a magnificent high-speed link. Where are we seven years after the announcement? We still do not know the route. First, we were told there was no need for a rail link. In 1988 British Rail was producing four alternative high-speed routes. We then had the Trafalgar House involvement, which collapsed. Five months later the south London route which had been chosen was dumped. We then had the east London route. I am not surprised that the recent brilliant "Face the Facts" radio programme commented:
"Kent probably has the worst railway system in the country onto which we are seeking to impose the most sophisticated new system yet devised".
To coin a phrase, this is no way to run a railroad. Our European partners must find the whole story incredible. We need to have urgent decisions taken about the west coast route for high-speed trains and the siting of an international freight terminal in the West Midlands, which is so vital to our export trade.
I express the view that we need both an industrial strategy and a long-term European strategy. On the
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latter point I ask the question: how are we to educate our children unless in the primary schools we start to get them to speak a second language'? We ought to help our businessmen. It was announced this week that 55 per cent. of those asked did not believe that 1993 affected them at all.
I conclude by asking the Government to establish strategy committees—I looked up the terms of reference and find we do not have them—to consider economic, industrial, commercial and long-term European policy. I trust that this debate will aid the Government in coming to those conclusions.
4.17 p.m.
Lord Benson: My Lords, on behalf of the whole House I congratulate the noble Lord, Lord Howell, for his contribution. He comes with a very wide experience in many fields and his speeches will help our deliberations. It may not be generally known to the House, but apart from an abiding interest in cricket his special interests comprise manufacturing industry, health, environment, arts, local government, immigration and international and national sport. We may have the pleasure of hearing from him on a great many different topics.
I start with two assertions which I do not think will be disputed. First, our manufacturing base has been shrinking for years. It is now at such a low ebb that it cannot sustain our economy satisfactorily. Secondly, although there have been improvements in recent years the average standard of productivity in manufacturing is below that of our competitors. Between 1970 and 1987 our world share of engineering goods fell by 37 per cent. I add to those two modest assertions a reminder of the decision which your Lordships took only last year to support the report of the Select Committee on Science and Technology which contained the following statement:
"In the past manufacturing industry has suffered from a perceived neglect by government and from government's indifference to the decline of our manufacturing base. This must now change".
In the face of those facts it is incomprehensible that any government would not wish to formulate a clear, firm industrial policy which would cause the country to change direction in the manufacturing field. I go further and say that there is no difficulty in defining the material and substance of what should be included in an industrial policy. I made some tentative suggestions for the consideration of the House in the debate on 13th May this year, reported at cols.382 and 383 of Hansard. I will not weary the House by repeating them. So far as I could detect from the debate that followed, there was no dispute on those issues.
As an illustration of the decline in our manufacturing base, let me take two simple examples. Before, during and after the last war we had a strong, virile machine tool industry that was strong in exports. What is left is virile but a shadow of its former self. In 1970 production stood at 1,400 million; in 1990 it was 750 million; in 1991 the figure dropped a further 20 per cent.
I take another example. Before, during and after the last war we had a good motor cycle industry. It

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collapsed in 1970 for reasons which need not be detailed. There has recently been a proposal to resuscitate the industry. However, in the intervening 20 years personnel have been lost along with exports and the skills which enabled us to compete with the Japanese who imported motor cycles in large quantities. In fact we handed the motor cycle industry over to the Japanese holus-bolus. Those are merely two examples of many that can be found in industry through the most trivial investigation.
It may be suggested that the decline is due to lower quality engineering personnel than our competitors, shortage of capital, or a workforce that could not adapt to modern technologies. I believe those suggestions to be nonsense. What we have lacked are leadership, thrust, determination and enterprise—all things which would keep us at the top of the league tables and not rootling along at the bottom.
Looking back on the history of industry in this country, we notice that in the past 50 years when any government have proposed measures affecting industry, the immediate reaction of the opposition parties has been to say in strident terms not only that they disagree but that they will repeal all the relevant legislation and reverse the policies. The effect on industry has been disastrous. The indecision, doubt and lack of knowledge as to what will happen have prevented investment.
Perhaps I may give a simple example to drive home the point. At the end of the last war, steel comprised, directly or indirectly, no less than 50 per cent. of our total exports. Then the Government decided to nationalise the industry. The succeeding government decided to denationalise the industry. A later government decided to renationalise, and a succeeding government decided again to denationalise. There were four complete turnarounds. We ought to be ashamed to see our great industries become political playthings.
The lessons to be learnt are that an industrial policy must be long term; it serves no purpose over the short life of one Parliament. It must also be sufficiently free of dogma and doctrine to be generally acceptable. Lastly, whatever opposition is in existence must exercise much greater restraint than has hitherto been the case.
It is the view, I believe, of many people in this country that we should not have an industrial policy because it might lead to interference in management by government, to direction of labour in some form or another, and to restrictions, impediments and whatever may stop the development of industry. I believe that such views are wholly misguided. I regard the situation merely as it is on the football field. The 11 players represent industry, striving with every sinew to defeat the opposition. But sitting on stools on the sidelines are the manager and the trainer. If the manager and the trainer went on to the football field, they would make themselves look ridiculous. If the players sought to manage themselves, the team would be relegated at the end of the season. Both have to
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work to a common policy to improve without interfering with each other in the way that is suspected by so many.
An industrial policy would help to enlarge our manufacturing base, which is crucial to this country. It would increase our exports, reduce interest rates, strengthen the pound and bring our adverse balance of payments more into line. Those plums are ready to be picked. They should not be left to rot on the ground. If the Government want to take us out of the recession in which we are now wallowing, they can do no greater service than to stimulate everyone by a firm, strong industrial policy on the lines which have been explained today.
4.26 p.m.
Lord Chilver: My Lords, perhaps I may first thank noble Lords for their very kind welcome this afternoon and for giving me the opportunity to contribute to this very important debate. Over recent years I have become increasingly involved in international business. That has inevitably focused my mind on competition in international trade. In international business one stands or falls by the success of one's competitive activities and that has led me to hold strong views on international trade and competition. However, I am conscious this afternoon that the custom of your Lordships' House requires me to be uncontroversial. Although recent interpretations of that word have shown flexibility, I certainly intend to contribute to illumining the basis of this important debate rather than indulge in further controversy.
Unquestionably competition is increasing around the world at a great pace. It is worth putting that in context. The world's largest exporters are Germany, now in the lead, and the United States. Those are the two greatest exporters. Each of them exports 11 per cent. of all world exports. Japan accounts for 8 per cent. of world exports and the United Kingdom accounts for 5 per cent. That is a very substantial performance. Exports today are at record levels. The European Community, in terms of exports as a whole to the world beyond, accounts now for 15 per cent. of world exports. That is perhaps the most significant feature of the interchange of trade across the world that we need to consider in this country in relation to our national policies of industrial development.
Productivity around the world presents an interesting picture. It may come as a surprise to many people in this country that the average rate of productivity in Japan is lower than it is in Britain. But that masks the fact that the productivity of Japanese industry in areas which contribute to their external export performance is very high indeed. There is a lesson to be learnt; namely, that productivity must be pushed to extreme limits in areas where international competition takes place.
The greater part of international trade is conducted by international companies, which play a key role. They compete in different competitive climates around the world. They work in markets which vary considerably. Those companies are independent bodies. They may be incorporated and based in one country but their activities bring economic worth

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throughout the world. At the other end of the spectrum, small companies have severe problems with the increasing competition in international trade. They have limited access to knowledge of industrial development and markets and can meet severe problems of funding.
International exchange is one of the most powerful forces in world development. In general we must keep in mind the features which enable those forces of development to continue to operate on the world scene. We must consider areas through which we can encourage the exchange of trade. There are many barriers to what is called free exchange of trade. I use that contradiction deliberately because our concepts of free trade in Britain are very different from those that are experienced in other corners of the earth. It is important that in their study of the problem our Government address the effect of disparities—the impairments to international trade—which so many western companies meet on the world scene. The playing field is complex, with different rules and goal posts in different positions.
International trade is best conducted when fiscal, financial and social environments are stable. That factor will dominate the way in which international trade develops in the future. We have already referred to the importance of investment in the longer term. It is important and requires action not only by Government but by companies themselves. In the diverse funding situations which occur in the world, it is difficult to find areas in which suitable long-term funding can he established to develop long-term projects. In the evolution of the European Community it is not impossible that companies, as we know them today, may become more broadly based in the European Community, and funded in somewhat different ways which will enable the deployment of resources for the longer term.
In Britain we have to exploit the knowledge of industrial development available to us throughout the world. Our science and technology in Britain is very strong. We have to ensure that we not only deploy the knowledge of our working industry but also the knowledge generated elsewhere. We ourselves generate a small fraction of the world's new science. It is important that we develop means of accessing world knowledge which we can exploit in our own industrial development.
Finally, many of the discussions on the balance of trade problem focus either on imports or exports and do not fully consider the importance of the appropriate balance of trade which we as a country wish to aim for. We see powerful exports as one feature of an extremely strong economic policy. However, if encouragement of those exports has not led to competition with imports then the balance is wrong. That can cause serious problems. We in this country should now address more generally the type of balance that we wish for in the longer term. We should not necessarily pursue exports for their own sake. Indeed, one could criticise the policy of the pursuit of exports over the past 25 years or more. One could argue that that pursuit of exports created overseas markets, but because of the industrial plant
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and capital investment required to produce those exports we were unable to meet the needs of our own domestic markets.
In conclusion, we shall face increasing competition in the years ahead. It is important that we discuss the issue more widely and seek wider understanding of the problems that it generates.
4.35 p.m.
Lord Dean of Beswick: My Lords, it gives me great pleasure to follow two maiden speeches of high quality. I join the noble Lord, Lord Benson, in congratulating my long-standing and noble friend Lord Howell on an interesting debate on the area that he represented so well over a number of years. He has first-hand knowledge of the area and the problems that beset it. I also congratulate the noble Lord, Lord Chilver, on his maiden speech. That too was of high quality. He has a wide spread of interests in the industrial and commercial world which befit him well to make contributions to debates in this House. We shall benefit from those contributions. I note that in his earlier years he was a railway engineer. The noble Lord and I have a tenuous link. In my younger days I too was a railway engineer. However, I manufactured locomotives. We congratulate the noble Lords on their high quality speeches and look forward to hearing more from them in future.
I shall not speak at length about what should be done by the Government to achieve the aims printed on the Order Paper. When I spoke last week in the debate on the loss of jobs in manufacturing, I referred to export credit guarantees. I believe that in this country they are insufficient. My noble friend on the Front Bench Lord Williams referred to them in detail. I did not receive a reply. However, I believe that people in this country are not batting on a level playing field through the assistance that they receive on expensive and long-term contracts.
I refer to some points made by the noble Lord, Lord Joseph. Although we sat on different sides in another place, nevertheless I have always had the greatest respect for him when he made political speeches and statements as a man of the highest integrity. However, he has placed some of the blame on the Labour Opposition as though they had some responsibility for what the Government did in the 1980s, which has placed the country in its present difficult situation. I was in the gallery in another place on the day that the the Budget was announced by Mr. Nigel Lawson, now the noble Lord, Lord Lawson. It was such a marvellous Budget that the Conservative Party rose as one waving their Order Papers. The cheers did not last long because the Budget was an appalling blunder. I do not believe that it is right to say that the Labour Party played any part in that whatever. It is the duty of the Opposition to oppose; and that is what they did. But an appalling mistake was made and nine or 10 of the members of the Cabinet which created that situation have recently been ennobled in your Lordships' House. Those people are responsible for what took place.
The noble Lord, Lord Joseph, spoke also at some length about Japan. Some 12 years ago I went to

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Japan on an all-party parliamentary visit. We questioned the Japanese industrialists and business people, but there was no hint that they were hindered, or not helped, by their government in the same way that our people are. For example, one of their shipyards was in danger of closing down. There was a surfeit of the mammoth tankers which they were building and they were mothballing them. They were on the last project building a huge oil-drilling rig weighing about a quarter of a million tonnes. I asked what would happen to the shipyard when the project was finished; whether it would be closed down and the workers made redundant as they would be in Great Britain. I was told that that would not happen because the social consequences would be too hard to bear. I was told that there would be an accommodation, although I was not told what that accommodation would be.
At that time, under the last Labour Government, a package was put together by the noble Lord, Lord Varley, who was at that time at the Department of Industry, to tender for a large power station in the Middle East. I believe that our bid was about £130 million and we were beaten by the Japanese by £30 million to £40 million. Anybody who knows heavy engineering will know that a disproportionate part of the cost is accounted for by materials because there are such huge quantities involved. For example, one must buy steel on the world market; there is no cheap market. Those of us who were involved in that tender believed that in some way the Japanese Government had helped to fund that successful bid by the Japanese engineering industry. Therefore, we should be rather careful when saying that we should follow the Japanese.
The term Luddism was used. I worked in engineering from the age of 15 to the age of 40. I was a highly skilled engineer. I do not remember being bombarded with high salaries. Every penny that I received I had to fight for from the boss, and I earned my money. The sad fact in this country is that some of the most skilled men in engineering—toolmakers and so on—are among the worst paid. Last week I received a report from the AEEU which shows the progressive decline in our manufacturing base. Another report will be published, which is embargoed until tomorrow, which shows that that situation is continuing.
I now wish to speak about the North West. From June 1979 to June 1992 there has been an increase of 320,000 in the number of unemployed people. In the manufacturing sector, which is the most important, there has been a total reduction in jobs of 363,000. The Government cannot hide behind those figures by saying that that is because there has been a reclassification of jobs. Those jobs are hard-nosed manufacturing jobs in the workshops. Vickers shipyard will lose 1,000 jobs, BICC will lose 220 jobs, and GEC Turbines will lose 500 jobs. I could go on. That situation is not improving.
Finally, I wish to refer to a report recently published headed:
"15 years of initiatives have failed to halt inner city decline".
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It is a report by the independent Policy Studies Institute. It lists 50 of the worst areas,13 of which are in the North West. Conditions are worsening in most of the facets mentioned in the report which include education, unemployment, housing and poverty. The article states:
"One of the biggest statistical leaps was in Manchester, where homelessness rose from 0.9 for each 1,000 households in the second half of 1983 to 13.8 per 1,000 in the second half of 1991".
That is an astronomical increase by any standards.
Your Lordships may think that my remarks are somewhat wide of the Motion on the Order Paper. However, I believe that those matters are all inter-related. Where I was born and bred and spent my life was, along with Birmingham, the biggest industrial centre in Europe and it is now a desert. That is not because of high wages or because it has been strike ridden. The people who are still there ask only that they should be given the chance to get to work again. I believe that the Government should do more than sit back and wait for the tide to turn, which it may never do.
4.45 p.m.
Lord Wade of Chorlton: My Lords, first, I congratulate our two maiden speakers. I have never before met the noble Lord, Lord Howell, but I am delighted to see him in this House. Also, I was delighted to hear the first maiden speech of my noble friend Lord Chilver. I trust that that quality will be maintained and that we shall hear from him many times in the future.
I agree with the noble Lord, Lord Williams, when he identifies competition as an enormously serious aspect for manufacturing in this country and for the country as a whole because what is detrimental to our manufacturing industries, or industry at any level, is against the interests of everybody in this country.
I agree with the noble Lord that we need to consider seriously what government's role may be in dealing with the extra competition which will come not just from Europe but from the rest of the world. We are moving into an era in which industry should gear itself up to operate at a much more competitive level. The noble Lord, Lord Williams, did not refer to the GATT negotiations which are extremely important and to which we must adjust.
What is the role of government in these matters? I disagree wholeheartedly with those noble Lords who suggest that government industrial policy should decide where investment is made, what kind of industry is developed and how various sectors of our industry are stimulated. Any suggestion that that is what we mean by government involvement would be detrimental, as it has been every time that it has been tried. The only way in which we can be competitive with the rest of the world is by allowing industry itself to adjust to changing economic circumstances and to do all it needs to do to adjust. Surely that is the role of government: that they do not put in the way of industry anything which prevents it from taking up the most competitive position.
It is in that sphere that the Government can take a much more positive approach. By and large

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governments are much better at stopping things than they are at making things happen. Their structure makes it easy for them to prevent things happening because they can always find supporters for that. It is much more difficult for governments to be positive. The most positive policy of a government in those circumstances is to decide that the growth of industry is the greatest priority of the country. They should not do anything to prevent the growth of industrial development.
I shall now tell your Lordships of three areas of government policy where the Government are unwilling to say "Yes" and thereby stopping investment. There is a major development in Manchester. The project will employ some 25,000 people. An inquiry has been taking place for three years. All that is needed is the Secretary of State to say,"Do it." In the past he has been enormously capable of saying,"Don't do it." We are all aware of such instances. On this occasion he should give the go ahead. We have been waiting for three years.
There is another development in Somerset. An international company has selected a site for a major leisure development. It has now waited well over two years for the result of an inquiry. It wishes to invest £80 million. The company has been offered a site in Germany which can be made available immediately but it would rather invest in the UK. All it takes is for the Secretary of State to say yes. If that was done, the £80 million would be invested immediately, a large number of jobs would be created and everybody in the country would benefit.
Government policy should be first to make economic growth their priority so that whenever they are confronted with an issue, they have to decide whether it is right for the economy. If it is, they should agree to it. There needs to be much greater understanding in government. I agree with the Prime Minister's stance on maintaining our present exchange rate levels and our present levels of interest. However, while accepting that that is the right approach, one must accept also that if those rates cannot move up and down, other matters must reflect the pressures that are created.
The pressures will be in terms of employment and of businesses going through greater cycles than in the past when the money aspect could fluctuate. The Government must appreciate that their attitude to financing themselves has to alter. We must take a greater grip on government expenditure and on decisions about those we employ and what we pay people. I applaud the Prime Minister's stance on the wage constraints affecting civil servants. I should have liked to have seen similar disciplines employed in the other place.
If we are to push the country into becoming more competitive everybody must respond by being hard working, by taking every opportunity to produce growth, and by cutting expenditure to the minimum. And the Government—by far the biggest employer—must pursue the same disciplines that they are forcing every other business to employ.
I agree with noble Lords—I do not need figures; we can all quote figures—in regard to the numbers of
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people we meet who are experiencing severe difficulties. It is a tragedy to see not only companies that started in the boom times of the mid-1980s, but also those which have been profitable and successful for 30 or 40 years, having to wind up and unable to use their skills.
As the noble Lord, Lord Benson, said, I feel that it is leadership which must make clear the priorities in everything we do. How many times in the past two or three months have we heard pleas for the Government to send money abroad to support this or that cause, or to protect this or that? We must accept that all the sacrifices are not possible until we create the wealth needed to do it. We can only do that through business and industry and by exporting our products. That is one of the most important aspects of the role that government can play.
The noble Lord, Lord Dean, referred to the North West. Extra growth will come from new technology and the ability to transfer technology from one company to another; the stimulation of further technology growth between this country and other countries in Europe and more particularly, the ability to offer and market our services to the growth areas such as the Pacific rim nations and the Far East.
Within the North West we have the North West Regional Technology Centre which was set up under the auspices of government in 1986. It is now running independently and playing an enormously important role. Only two weeks ago I attended a seminar called "Technologies for Tomorrow". It attempted to bring together those entrepreneurs looking to invest in technology and those people with the necessary skills. It was enormously impressive. There was a whole range of new technology waiting to burst upon the market place. Lack of funds and a lack of confidence that having got the right product we would be able to market it was the barrier. However, once people met, the enthusiasm of the entrepreneur on the one hand and the person developing the new technology on the other produced extremely interesting developments. I hope that the Government will see the importance of those kinds of organisations. Although they give support, there are many other areas where they can do So.
This is an important debate. We live on the wealth that we create. If we do not continue to create it and make it our top priority to do so, as many noble Lords have rightly said, so that we achieve a situation in which everyone is working for the common aim, we shall all suffer. Our future will be jeopardised and what was mentioned by the noble Lord will come to pass.
4.55 p.m.
Lord McNair: My Lords, I must first declare an interest in the debate. I am directly concerned with a manufacturing enterprise, albeit a small one. It is a trade which has remained unchanged for generations—that of producing handmade wooden tent pegs. I am the craftsman, the foreman, the production controller, the salesman and the accounts department. One might say that gives me a "worm's eye" view of the economy and of industrial activity. Indeed, it was

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while I was splitting timber and shaping it into tent pegs that I listened to a programme on Radio 4 about the growing industrial performance, the growing integration and co-operation and the growing economic self-confidence of nations in the South East Asian part of the planet.
People in such countries work extremely hard and are immensely innovative. Those economies are all in different stages of industrial development. Discussion abounds about whether the Japanese system of close co-operation between government, banks and manufacturers or the South Korean system of dynastic family enterprises should be the model for the future. I suspect that the answer is probably both, each in its own cultural context. I feel strongly that it is the cultural context that is more important than anything else in determining the strength and vitality of a nation's economy.
I fear that the cultural context in which manufacturing industry flourishes or founders in the UK is rather unhealthy. There is still great prejudice against trade and engineering in those social groups which sociologists place at the beginning of the alphabet. It is a petty and elitist attitude which only serves to reinforce the prejudices of those by whom education is regarded as a difficult pathway to unlikely success. The "them and us" attitudes of all social groups do not appear to me to be diminishing. All those unproductive attitudes are a luxury we can ill afford. We are indulging our prejudices at the expense of our industrial growth. In that respect, we are playing the fiddle while Rome burns all around.
An argument could be made for moving towards what one might call the "Asian ant-heap" type of economy where social security provisions are minimal or non-existent and wages are low, resulting in rapid growth in currently successful or government encouraged sectors. I suspect that that is what many in the present Government would like, even if they dare not say so.
In my view that is not the answer. We need basic and technical education which both provide the mental and practical tools to do the job and also empower the individual in such a manner that he or she has the emotional maturity and self-reliance to create a secure and worthwhile future. Educational programmes which achieve that are readily available. They provide the self-confidence and self-respect which are a necessary prerequisite for young people to want, to absorb and to benefit from a sound and intellectually stimulating educational experience. I am thinking particularly of two programmes offered by the highly regarded educational research and development NGO called TACADE. Skills for Adolescents and Skills for the Primary School Child are increasingly seen as making a vital contribution to effective education. Such an education results in greater self-reliance and diminution of the dependence on state benefits.
I was particularly struck by an observation made earlier by the noble Lord, Lord Joseph. There are, of course, four possible ways in which one can participate in the economic life of the country. As far
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as I am aware, we do not have any educational programme that explains to young people how business works in a practical way. An introduction to economics such as I endured on an economics 0-level course, which concentrated on abstract supply and demand graphs, is enough to turn anyone off the whole subject. I wonder whether such an input could be added to the national curriculum.
Additionally, we need to move much faster and more determinedly to catch up not only with the German tradition of excellence in technical education but also with the new developments in that direction in France. We somehow almost expect the Germans to be better at that than we are. Perhaps the fact that France is working hard to create a society of technically competent citizens may spur us to more vigorous action in that direction.
The situation may in fact be more serious than that and require drastic and far-reaching, not to mention far-sighted, policy initiatives. I mentioned earlier that the South East Asian economies reflect various stages of economic development. By that I mean that neighbouring nations consist of highly developed economies close by those which are less developed, which provide a pool of cheap labour. We seem apathetically accustomed to the penetration of our economy by those of Japan and South Korea.
An example of what international trade can be about was provided by the way in which the Japanese television industry came to dominate the Sri Lankan television market. The Japanese Government offered to build them a television station. Meanwhile, all the representatives from the consumer electrical companies went round to every little shop and store they could find. The result, naturally, is that it is very difficult to buy a television in Sri Lanka which is not made in Japan or which is not made by a Japanese company.
That is the kind of partnership between government and industry which would make such a difference to our companies' efforts to export. Even our own entrepreneurs have products like that manufactured in the Far East. I believe I am right in saying that that is how Amstrad operates its computer business.
We saw yesterday that manufacturing output has again fallen. Our balance of payments deficit is increasing at an alarming rate. Could it be that the single market has come too late for us and that we are experiencing the early stages of the structural meltdown of a post-imperial and post-industrial economy? I sincerely hope not. I urge the Government both to confront that possibility and to adopt such policies as would ensure that that does not happen.
Lastly, I endorse the remarks made by my noble friend Lord Ezra about the need to look at the total picture of spending and saving in the economy. There is little point in achieving zero inflation if it brings with it zero spending and a negative growth in manufacturing output while the trade deficit increases. It is sales, and the prospect of sales, which induce entrepreneurs to invest more and produce more. There are no absolutes in economics. When we had raging

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inflation the cry went up "Why don't people save more?" Now we appear to have become a nation of squirrels.
Surely it makes sense to look at the overall tidal flow of savings and investment. I understand that National Savings is doing very well. I urge the Government to use that resource to stimulate growth by developing our grossly inadequate infrastructure both in a physical and personal sense.
5.3 p.m.
Lord Monkswell: My Lords, I thank my noble friend Lord Williams of Elvel for introducing this very important debate. I had thought of speaking about the immediate problems facing manufacturing industry in the United Kingdom as we know them today. But the contributions of my noble friends Lord Howell and Lord Dean of Beswick have effectively forestalled that. I have no need to explain to your Lordships the problems faced by manufacturing industry and the opportunities which those problems present to the economy of this country.
It is interesting to note that virtually throughout the debate the emphasis has been on the importance of manufacturing industry. I thought that it might be interesting to take an historical perspective. It is interesting to recall that in the early 1980s the Conservative government said in effect that manufacturing industry and the problems that it faced did not matter because the service industries would take its place and provide the wealth of the country.
I have prepared a list of service industries, but it is not exhaustive. When one speaks in terms of religion, law, medicine and education—prostitution is something of a grey area or a part of the black economy, if I may put it like that—and of soldiering, finance and engineering in the knowledge-based sense rather than in the manufacturing-based sense, they are all elements of service industries. But the Government's encouragement of their development in the 1980s was pretty limited. I say that in the sense that religion, for example, is not really one of the strong points of this country nowadays. We have a rather anachronistic legal system which does not translate well to other countries throughout the world. As regards medicine, we do not train enough doctors in this country to satisfy the needs of our own National Health Service. When considering education, one has only to think about what has happened to it over the past five or six years under the Conservative Government to realise that they were never very much in favour of promoting education. They have done everything they can to denigrate, castigate and do what damage they can to it.
It is interesting that this country spends so much on the armed forces and equipment for them. Soldiering is something which is capable of being exported. One needs only to think in terms of the Gulf War to realise that we have effectively exported that expertise. The Government have not done much to support engineering. Salford University has a very effective centre of learning in the engineering sphere. Far from being supported by the Government, it has had a
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massive cut in income caused by the Government and the centre has been told to go out and find the money for itself.
Finance is another matter. The finance industry, through taxes foregone and the laxity of controls, has effectively been given every support and encouragement to grow and prosper under this Government. But to what benefit? At the same time as it has been encouraged through low taxation and lax regimes to grow and prosper, it has not been for the benefit of this country, but for those people with money. That situation has existed right through the term of the Conservative government. Effectively, support for manufacturing industry has been whittled away and where it has existed it has been hampered by high exchange and interest rates and a lack of investment incentives. Manufacturing industry has been attacked in just about every way that it could be attacked by this Government.
In my opening remarks I said that I would introduce an historical perspective. I was thinking in terms of my school history lessons and the Scots education I received. The history that one learns in Scottish schools tends to be Scottish history. I remember being taught that when the economies of Scotland and England were brought together in the 16th century, quite a large number of what one can describe as men at arms had to go overseas and become mercenaries. It is an interesting historical analogy. I hope we are not, but I fear we are, in the same kind of situation now in the sense that as our economy is merged with the economies of Europe, we know that we have a large number of men at arms. What is going to become of them? Are they going to be retrained to take part in productive manufacturing endeavour, which has to be the most important activity that this overcrowded isle indulges in, or are they going to be used effectively as mercenaries overseas, killing other people and getting killed themselves? I hope that we shall not see that.
There are two actions the Government can take. One is to reduce the money that they gather in taxation and currently spend on the defence establishment generically—on the armed forces and on defence manufacturing. The other is to take back some of the taxes foregone on money earned by the financial industries. They should invest the money that accrues through that increased taxation and through reducing the expenditure on the armaments business and the armed forces. If that money was invested and channelled into support for this country's manufacturing industries, we could—I hope—start to build a better, more decent and more socially just country and, in doing so, contribute to a better and more socially just world.
5.11 p.m.
Lord Sefton of Garston: My Lords, the last time that I debated this subject in this Chamber was on a Motion moved by the noble Lord, Lord Wade of Chorlton, drawing attention to the situation in the North West. I gave an example of what has happened in a two-mile area of Merseyside. Fifty years ago a tremendous amount of industry was located within

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that tight area but today nothing remains. That is the place from which I take my title. Because I drew such a tremendous picture of the decline of an area I was accused on several occasions in that debate of being pessimistic. Well, I have not detected much optimism in today's debate. I did not even detect any optimism in regard to the nation's industry and commerce from the noble Lord, Lord Joseph, who, as we all know, is a protagonist of the free enterprise system.
When the noble Lord, Lord Wade, says that he thinks that the Government's industrial policy should not have anything at all to do with the siting of industry, I should like him to consider the situation on Merseyside as a whole. We have lost many major industries. The two industries that are left on Merseyside are all that remains of a massive industrial complex. One belongs to Vauxhall Motors and the other to Ford. Both those firms came to Merseyside because of government policy which was supported by both parties. In fact, they came to Merseyside because of the consensus and the realisation that, because of Liverpool's geographical position, there was no other reason for its existence and a reason had to be found. We persuaded Vauxhall and Ford to come to Liverpool—incidentally, we also persuaded Leyland Motors, but I shall talk about that later—and those firms now provide the only basis for industrial employment today on Merseyside. I ask the noble Lord, Lord Wade, to consider that point.
The noble Lord, Lord Benson, referred to what happened during a 50-year period and to all the faults of the steel industry. However, the problems of the steel industry and of this country do not go back only 50 years: they go back much further than that. I ask the House to consider some of the mistakes that were made by successive governments after the last war. To some extent, did they not depend upon memories of what had happened before the war?
There is no doubt at all that during the inter-war years when free enterprise had its unrivalled reign it could do anything it liked. It ruined the railways. It ruined the coal industry to such an extent that in 1940 when this country was fighting for its very existence the private coal owners closed some pits. It ruined the steel industry because it could not meet the demands of the nation. The story went on and on. In the end it created such massive unemployment that men like Winston Churchill and others were saying that never again must this country use the weapon of unemployment to solve its economic problems. That was said to be the consensus—and we all agreed.
Things were not too bad after the First World War ended. Churchill also said that recriminations about the past should be used in order to enforce effective action in the present. All I ask is that we remember that and act by it.
The present Government's message to the nation is that private enterprise is a wonderful thing and that if it is given its head and allowed to pull itself up by the bootstraps, it will do so to such an extent that the nation will be better off. I assume that the word "nation" means the community, although, having heard the views of a person who has only recently been
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ennobled and become a Member of this House, I sometimes doubt that. However, presuming that "nation" means "community", the Government say that private enterprise, in the pursuit of profit, would make us all better off. But, if it has shown nothing else, today's debate has shown that an awful lot of people today do not believe that that has happened. They believe that we are facing a crisis of monumental importance over our world trade.
Over the past 12 years private enterprise has received the clear message from the Government: "Go ahead. Exploit". They have said to people,"You go ahead and be an entrepreneur and while you are making your profits, bring work to the people". But the real position at the moment is that we have 3.5 million people unemployed. Is that what the Government were referring to?
Having made recriminations about the past and looked at what happened during the inter-war years, perhaps I may now give the House some other examples. If one goes even further back, one could say that the years before the Boer War were just as bad for the working classes of this land. It is an amazing thing that the events of the Boer War, then of the First and Second World Wars, were the only times when the working classes of this country could look forward to some employment. That is a commentary on the operations of the nation. That is the history of this nation.
Let me bring our history right up to date. It is time that the Government started to look at what happened in the past and tried to learn some lessons from it. They should not make guesses or the dogmatic assumption that because they believe in a certain political philosophy it will bring solutions. It will not. Read the book—it is all there. The Government should consider what happened during those periods. We are now reaching a stage where the cold war is ending and when the resulting unemployment will get worse and worse. We really need to do something. If we leave it to private enterprise, private enterprise will operate as it always has—in the pursuit of immediate profit.
I should like to give your Lordships three examples which I raised with the noble Baroness, Lady Denton, not very long ago. The 125 aircraft, which is being manufactured at Broughton just outside Chester, is a big employer of labour. If it goes down that will have a serious effect on that area. The company which owns the 125 aircraft production has said that it does not have the money to invest in a new model. It is making money, but it needs £500 million to launch a new model if it is to be successful. It does not have that money so it is looking for buyers for the manufacturing capability of the 125 aircraft.
Rolls-Royce and Vickers are also in trouble. They do not think that they have the money to invest long-term in, for example, the new model that Rolls-Royce needs if it is to compete in the world market. Those companies are in trouble and are today looking for customers. It is probable that any customers will be either Japanese or German.
There are other examples, but I have reached the end of my time. I wish to conclude on another point.

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I raised those examples in the House and I asked the Government what they intended to do to ensure that those companies did not go into foreign hands. The noble Baroness, Lady Denton, replied on that occasion. I respect the noble Baroness very much indeed and I do not blame her personally as she was given a brief. She had to read it. In reply to my question she stated:
"My Lords, the Government take the view that in general it is the company itself which is best placed to decide on changes in ownership or control".—[Official Report,19/5/92; col.549.]
If that does not mean that the ownership of some of our major industries—three major industries which are producing very well, with no complaints about profitability—will he left in the hands of private shareholders, I have never heard anything.
I have another quotation from the noble Baroness. I said in a supplementary question:
"My Lords, can I take it that the answer from the noble Baroness is that the Government intend to do nothing at all to prevent these firms going into foreign ownership?"
The resounding battle-cry from the Government Benches was:
"The resource which allows our industry to continue and for new models to be developed will be focused on with fierce concentration".—[Official Report,19/5/92; col.550.]
I say this to the Government. They can focus on it as fiercely as they will but words will not change the nature of private enterprise. If it sees a quick profit in selling to overseas buyers with the result that Rolls-Royce cars end up being manufactured in Germany, it will do it, and no amount of fierce concentration by the Government will make it do anything else.
5.22 p.m.
Lord Lucas of Chilworth: My Lords, the noble Lord, Lord Sefton of Garston, will allow me not to follow him down that particular road. On this last full working day of the summer term the noble Lord, Lord Williams, is to be congratulated on putting before us the subject of this debate. It will focus our minds during the Recess and no doubt we can come back to it later. I am grateful to him for that. The noble Lord will appreciate that in a timed debate it is not always possible to debate right across the Chamber. However, if noble Lords will forgive me, I should like to pick up one or two points that have already been made.
The noble Lord, Lord Benson, in using examples of the collapse of British industry, cited the motorcycle industry. He will recall very well that the motorcycle industry collapsed largely as a result of predatory pricing by the Japanese. I am happy to say that the motor industry did not allow that to happen. The arrangements voluntarily entered into between the Society of Motor Manufacturers and Traders and JAMA, the Japanese equivalent, allowed Japanese imports. Therefore, when that voluntary agreement was entered into it was not necessary for the Japanese to adopt a predatory pricing policy, so we have had a reasonable and fair pricing competition on those products.
That agreement expires at the end of this year and there is another informal arrangement between the
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European equivalent of the SM MT and JAMA. I very much hope that the Government do not interfere in any way in that kind of arrangement, which was the point made by my noble friend Lord Wade of Chorlton. If they do, the kind of arrangements that have been made between labour—the unions—and the two principal motor manufacturing companies in this country—Ford and Vauxhall—are likely to be affected, with the result that neither Ford nor General Motors will be able to go ahead with their plans, which include huge investments.
The noble Lord, Lord Ezra, with whom I agree so frequently, mentioned trade. It is on that issue that I wish to speak today. I am glad that the President of the Board of Trade has resuscitated that position. I am not completely sure why he has done it. One could make a number of guesses. However, it brings into sharp focus the importance of trade. At the end of the day trade is what it is about. If nothing is manufactured there cannot be any traders. Successful traders will demand a product. If the President of the Board of Trade has that in his mind, I am happy. What I would suggest, however, is that the Board of Trade is revamped. It has been working at arm's length from government but under government. It cannot go on in that way.
The noble Lord, Lord Ezra, mentioned the decline in support for export trade and reminded us that, according to the last report, it fell to £31 million. The noble Lord is right in that a number of the services which are offered are far too highly priced and discourage the smaller trader. But I think there is something more fundamental here. From my experience in the department—admittedly some years ago—it never felt entirely happy that those in the Foreign and Commonwealth Office were the right kind of people to encourage, foster and seek out business in foreign parts. That is not to deny that there are some splendid commercial counsellors in our overseas posts—indeed, ambassadors and high commissioners—who work hard. But the very nature of their discipline prohibits them from being traders.
In the vernacular—your Lordships will forgive me if I use this terminology—they cannot cut a deal. They are not trained to. But a trader can and he knows how to do it. He knows the streets that he has to walk down to cut that deal. I should like to see some of the money the Foreign and Commonwealth Office spends on trade through those overseas posts spread to some of our chambers of trade and commerce in those countries. I believe that they can ferret out this business. They would have far better intelligence and would be able to go to a supplier instead of using the arm's length device that a government servant has to use.
If in January 1993 mainland Europe becomes part of the single market I presume therefore that it will no longer be accepted as an export market. A lot of money is wasted by government in supporting trade in what will be a home market. The best of the people can manage very well indeed. It is where the culture of trade is foreign—for example, in the Pacific basin or in

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the Arab states—that one needs the support of professionals. I should like to see a shift of emphasis there.
A number of noble Lords have mentioned transport. If transport is the end of a production line I urge the President of the Board of Trade to use his influence in the Department of Transport to stop it shilly-shallying over road and rail developments and to pursue the completion of that production line. For example, in North Kent, Kent County Council has shilly-shallied for about five years over the approach road to the docks. The dock carries 200,000 traffic movements a year, essentially of exports. Manston Airport is stultified by a lack of facilities to get there. We could use those; but, no, the process is delayed by a lethargic county council that has its eyes on the great glamour of the Channel Tunnel. We have to use other assets to get our exports into the market place where the traders can do the business.
5.30 p.m.
Lord Jay: My Lords, I agree wholeheartedly with my noble friend Lord Williams—and, indeed, with both maiden speakers whom I warmly congratulate—that unless the British Government give at least the same active support to British industry and British exporters as other firms receive from their governments, British firms will inevitably be put at a disadvantage. A level playing field sounds fine. But it is not much use if some of the players are more level than others. At present, while our own Government have mutilated the ECGD, and, incidentally, abolished the NEDC, the French Government have given huge state aid to Renault and are now paying thinly disguised state aid to Air France.
In order to prevent the House getting a slightly distorted picture arising from all the propaganda about 1993 and the single market, I think it is worth looking briefly at the other side. Despite the arduous labours of the noble Lord, Lord Cockfield, over the 1993 programme, such efforts, contrary to his intentions, have had the effect of scaring quite a number of the great multinational companies into a rush for cover and the forming of mergers, joint enterprises and various other types of arrangement among themselves.
I shall give your Lordships a few examples. In the car industry, Renault and Volvo have arranged a swap of shares and executives together with the formation of joint subsidiaries which I do not think are intended to ensure competition between them. Of course, Volvo also has an alliance with a Japanese car producer in the Netherlands. However, we can also look elsewhere. In the food industry, Nestle, already the world's largest food combine, is seeking to take over Perrier which is the leading French mineral water group; indeed, it is France's largest food company.
In the various branches of the electricity industry, a whole series of link-ups and joint ventures—"joint ventures" now being fashionable and sounding more respectable than mergers—have been formed involving our own GEC. In fact, after acquiring Plessey and Ferranti, GEC now has joint ventures with Siemens of
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Germany, General Electric of the United States and the Compagnie Générale d'Electricité de France. In addition, it has arrangements with Thomson CSF of France for joint development in defence electronics.
I am not criticising GEC for defending itself; I am merely pointing out that the single market that we are supposed to be entering will, to some extent, be a managed market; that is, managed by the multinationals rushing for cover against the threat of extreme competition. Indeed, in the electricity industry it looks as if the single market may almost become a single producer in some parts of the system.
In the meantime, Fiat has established a close tie-up by means of a swap of minority stakes with, again, the Compagnie Générale d'Electricité de France—a combination which the Financial Times described as an alliance between Europe's third largest car producer and Europe's largest supplier of telecommunications and railway equipment. In the absence of the noble Baroness, Lady Thatcher, perhaps I may mention our old friend the helicopter industry which at one time inspired such political passions. Aerospatiale of France and Deutsche Aerospatial of Germany have merged their helicopter interests in a new company called Eurocopter. Presumably, there will be no more competition there. I could continue and mention British Steel and even BP which have been forming alliances of that kind. Indeed, the airlines are also hankering after mergers; for example, Air France with Sabena of Belgium and British Airways with USAIR. Of course, what I have briefly mentioned only shows the tip of the iceberg.
No doubt the gallant Sir Leon Brittan, who really has an industrial policy, will be battling to stem the tide. I doubt that he will succeed. The House will remember that, in the case of Renault, the previous French Prime Minister went behind the back of the luckless Sir Leon and straight to M. Delors and, as a result, Sir Leon was outvoted in the Commission. Frankly, control of all such matters is not very easy.
Of course, legislation can legally prevent mergers. But you cannot so easily veto or, indeed, interfere with joint ventures which are, as I said, the current fashion. You can ban written restrictive agreements; but you cannot force firms to compete if they do not wish to—if two firms in a duopoly simply refrain from competing, I do not think that governments or legislation can interfere. Nor can you blame individual firms for defending themselves in that way in the present deflationary state of the world, particularly when, incidentally, we have all passed company legislation compelling them primarily to act in the interests of their shareholders. It is the natural inevitable rift of' a privatised market economy, as indeed Adam Smith once pointed out in a very famous quotation.
The public should not be deluded into thinking some great transformation into perfect competition will suddenly be revealed on January Ist 1993. Indeed, on balance, and owing to the headlong rush for cover by so many of the multinational firms—both big and small—the 1993 campaign may, in the end, actually turn out to have diminished rather than increased competition in Europe and elsewhere.

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Therefore, I believe that the public will not really notice any great difference. With present policies, things will go on much as they did before; that is, a steady decline in UK competitiveness which is much more due to excessively high interest rates and the hopelessly uneconomic exchange rate. That will have more effect on the British economy in the next few years than all the propaganda that we have had about the single market.
5.38 p.m.
Baroness Denton of Wakefield: My Lords, once again I have to thank the noble Lord, Lord Williams, for allowing us to listen to a most interesting debate. We are grateful for the opportunity. I should like to say what a particular pleasure it has been for me to be in the Chamber to hear the maiden speeches of my noble friend Lord Chilver and the noble Lord, Lord Howell. The noble Lord and I share an affection for the West Midlands, so I was particularly pleased with his speech. I also had the pleasure of serving on three interim advisory committees chaired by my noble friend. I was delighted to be here today. I should like to express my thanks to both my noble friend and the noble Lord for being custom-abiding speakers.
The Motion before the House which calls attention to the case for industrial policy is couched in terms with which I suspect very few of us would disagree. However, what we do disagree about are the precise elements of an effective industrial policy. I must say that it is the first time that I have heard from the Benches opposite the admission that their industrial policy came from my right honourable friend's book. I was surprised to hear the noble Lord criticise the president for recognising that the world is changing constantly and he has moved on.
It is certainly the Government's intention to help British industry to win in international markets, and with such intense competition in those markets, particularly at a time of worldwide recession, it is all the more important that government and industry work together in partnership to help industry gain that necessary competitive edge. We are doing this by establishing the economic conditions in which industry can flourish, and we are building up a clear and useful dialogue between government and industry. Our view is that that is the best way to help British industry compete.
What UK firms need most of all, as my noble friend Lord Wade pointed out, is the defeat of inflation. That is the cornerstone of our economic policy. Entrenched inflation destroys industry's competitiveness and leads to lost output, lost jobs and lost savings. Lower inflation enables businesses to plan and invest with confidence.
We have made substantial progress. The latest figures show inflation to be down to below 4 per cent. from a peak of nearly 11 per cent. in 1990. That means that it has been below the EC average since August last year and has been below the German headline rate since February. No one should doubt our resolve on inflation. Our record speaks for itself. Under this Government inflation averaged 7.6 per cent. compared with 15.5 per cent. under the previous Labour
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Government. But there is still some way to go before we can consistently match the 2 per cent. inflation level of Japan, and there is no room for complacency about pay rises. In the first quarter of this year manufacturing earnings were 9 per cent. higher than a year earlier. We must exercise further pay restraint if we are to increase our competitive edge. In particular, I very much hope that those at the top of industry will send the right signals to the rest of the workforce by restraining their own pay rises. Last night's vote in another place does not help the noble Lord's case.
Our success in bringing down inflation and our resolve to reduce it still further have enabled us to reduce interest rates from 15 per cent. (when we joined the ERM) to 10 per cent. now, thereby cutting industry's costs by £7 billion a year. Membership of the ERM has not only reinforced our commitment to bring down inflation but has also provided the exchange rate stability which businesses want. I believe the noble Lord said that that was a Treasury decision. Departments do not work in isolation. We will deal with the economic scene in partnership.
I know that many businesses would like to see interest rates fall further still. But they should understand that the best way to guarantee that is to maintain downward pressure on inflation.
Prudent management of the economy will also mean firm control over public spending. That includes restraining the growth of the European Community budget.
A key area for action will be our continued promotion of enterprise. Our record is strong. Our taxation policies have reduced corporation tax to the lowest rate of both the EC and the G7. Our top rate of personal income tax is now among the lowest in the world. Trade union reforms have improved our industrial relations to a state which was almost inconceivable 15 years ago. Last year the days lost through strikes were at the lowest level since records began. Our privatisation programme is now being emulated the world over. Transferring state businesses into private ownership increases business efficiency, whether through competition or in other ways. It allows employees to take a direct stake in their companies, and it gives everyone a chance to own a real share in the nation's assets.
Our competition policy has ensured that market forces encourage British businesses to satisfy their customers and raise their quality. Our deregulation initiative has succeeded in cutting red tape for business so that it can focus its energy, although there is still some way to go. My colleagues are studying that. The way to improve the productive capacity of our economy is not to try to increase the role of government but to curtail it; not to add to bureaucracy but to reduce it wherever possible.
We have paid especial attention to small firms. It is my privilege to be Minister with responsibility for small firms. The loan guarantee scheme for small firms has provided nearly 31,000 loans since its inception. Small businesses are a vital part of our economy: firms with fewer than 20 employees provide more than a third of all private sector jobs. There are over 400,000 more small firms in Britain today than there were 11

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years ago. Manufacturing output is now over a fifth higher than in 1981. The Government agree with the noble Lord, Lord Howell, that education is vital for industrial competitiveness. That is why we have done so much to raise standards through the national curriculum and other reforms.
Another key part, as many noble Lords have pointed out, which government can play in industrial competitiveness is in international trade. We shall continue to strive for truly open markets worldwide, just as our policies at home are designed to produce vigorous and healthy competition in the domestic market. In Europe our aim must be to sharpen competition, to pull down the barriers to trade and to remove unnecessary regulation. We must impress upon our partners that greater competition is the best way forward. It will both enhance the process of wealth creation and strengthen European industry's ability to compete in world markets.
On the wider international scene, I agree wholeheartedly with the noble Lord, Lord Williams, that we have to do all that we can to ensure a successful completion of the Uruguay Round of the GATT negotiations. I hope he agrees that that is a policy that my right honourable friend the Prime Minister is visibly pursuing.
We shall continue, via our export promotion policies, to assist UK companies to succeed in overseas markets. Export volumes are at record levels and the UK's volume share of world trade in manufactures, which fell under Labour, stabilised during the 1980s and has risen over the past three years. Exported goods account for more than 18 per cent. of our GDP. The noble Lord, Lord Ezra, questioned that fact, but we must look at both ends of the problem. I see nothing but pleasure in that figure. And those figures disguise some even more impressive achievements in particular sectors. Between 1981 and 1991 chemicals exports grew by over 70 per cent. and pharmaceuticals exports by almost 80 per cent. We should remember those industries more often. We are now a net exporter of televisions and we expect to be a net exporter of cars by the mid-1990s. We shall continue to help industry to build on that clear capability to win in world markets to show that the British workforce can match any other.
We shall also aim to continue to attract investment from abroad. By 1990 the UK accounted for over 40 per cent. of Japanese inward investment in the EC. In 1991 we attracted 10 times more inward investment than Germany, four times more than Italy and twice as much as France. That shows the success of our efforts to maintain an economic climate which will be attractive to investors.
I have spoken at some length on the importance of establishing the right economic conditions for industry. The other key element is to develop a clear and effective dialogue with industry. That must rest upon a solid relationship with every sector of industry and a real understanding of their needs and anxieties. Our restructuring is not just furniture moving. The restructuring at the DTI is aimed at increasing that understanding. Decisions must be based upon clear
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communications between government and industry. Having opened up that communication, the DTI has it at the top of its agenda to help British companies to compete and win in world markets.
Let me expand upon the reorganisation of my department which was announced some 10 days ago. There are three main elements: our industrial competitiveness will receive particular attention from a new division set up for the purpose; we shall look closely at how the UK compares with its international competitors; and we shall make it our priority to ensure that government policies do not stand in the way of our industry's performance. The Government must and will shape their policies and spending plans with full knowledge and recognition of the needs of industry.
The second element of the reorganisation is the adoption of a sectoral approach to industry. Existing areas of sectoral expertise within the department will be brought to the fore and any key sectors which are not at present fully represented will be covered by new divisions. We shall look to be at the beginning of business cycles, not at the end, and we shall look to be working in partnership.
The sectoral divisions, both new and existing, will have an explicit role to sponsor their industries, not in an uncritical way but as a basis for an informed dialogue and a constructive partnership. We are also looking at the possibility of setting up local first-stop shops as a first point of contact for businesses to stop time being wasted on re-inventing the wheel. I hope my noble friend Lord Joseph will be pleased to know that we shall include in those areas signposting to services available, to academic opportunity which will help industry, to design opportunity and to financial opportunity. It is important that we fund small companies.
In his list of what matters in industry, the noble Lord, Lord Williams, omitted people. People are absolutely vital. They are the essence of our future and our "Invest in People" programme concentrates on that. We are not aiming to be the lowest cost producer. We are aiming to be globally competitive. I am pleased to reassure my noble friend Lord Joseph that customised training will play an enormous part in our forward plans. That of course will allow small firms to work with some of the children about whose future he was concerned.
Both my noble friend Lord Joseph and the noble Lord, Lord McNair, raised the question of the status of industry, and particularly in regard to young people vis-à-vis the professions. I would say that industry does not yet honour its graduates or let its young people through nearly as much as it will need to. I hope that my noble friend will be pleased with the continuing strength of the teaching companies scheme which the DTI operates and which enhances technology transfer, gives graduates business training and improves industry and academic links.
We have heard much comment on the export credits guarantee scheme. Project exports remain healthy and the business is well on a par with previous years. I personally was pleased to hear a report from one of the successful Hong Kong submissions that our

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support was as competitive as that of any other country and—even better news—they did not need it in order to do the contract. ECGD announced in April 1992 premium rate reductions in over 50 markets.
The noble Lord, Lord Ezra, mentioned export services. He pointed out that there were limitations to the help we offer to companies on trade missions. That is so; after three trade missions help is withdrawn. We believe that if after three trade missions to one country contacts have not been made or agents appointed, we may do better helping in some other country. In fact, it is five missions to Japan and I admit that even that will take a little time. However, it gives people the chance to start moving. We wish to put as many people into the export markets as we can.
I hope that it is not out of order to disagree with a maiden speaker, but my view of the West Midlands is more optimistic than that of the noble Lord, Lord Howell. There is a changing shape to industry and economic activity there. The convention centre is second to none in this country. The financial services centre being built in Birmingham can hold its own throughout the world. We cannot expect industry always to be the same shape. I hope that the noble Lord will allow me to introduce him to a midwife at some point. He talked about the deaths of companies. We should also look at the births. It is estimated that in 1991,460,000 new companies were formed. But I must agree with the noble Lord that it is important that banks show more understanding of the agenda of business and in particular of small businesses.
The noble Lord, Lord Benson, said that there had been losses in manufacturing industry. I would point out that even in the machine tool industry some companies in this country are incredibly successful. They benefit from the same economic policies as others. Again. I mention the UK chemical industry as a prime wealth-creating sector on which almost every other manufacturing industry is dependent. Its trade balance was positive all the way through the 1980s and was almost £3 billion in 1991. Between 1981 and 1990 its R&D grew in real terms by almost 90 per cent. Perhaps we could take that as a firm indication of one of the reasons for its success.
My noble friend Lord Chilver pointed out that no one is immune from global competition—certainly not small firms. We aim to be well aware of the internal competitiveness they need to match. The noble Lord, Lord Dean, seemed to indicate that to be ennobled one always had to be right. I hope that he did not really mean it, otherwise my stay here would be short. I point out that unemployment in inner-city areas outside London declined between 1983 and 1991 and we can look forward to the announcement of new city challenges tomorrow.
My noble friend Lord Wade shared concern that dictatorship from the centre is not the way to encourage enterprise. I hope that he will be reassured to learn that the Department of the Environment's latest policy guidance on planning says that development is to be allowed unless it would cause demonstrable harm. The intention to allow people to grow is there.
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I can tell the noble Lord, Lord McNair, that the Engineering Council has an absolutely splendid neighbourhood engineering scheme under which it sends young people from industry to share the opportunities with younger people. It works very well.
I am sorry that the noble Lord, Lord Monkswell, did not recognise that the defence industry is at the forefront of manufacturing and that the skills and technology it learns allow our engineering skills to be developed. It contributes greatly.
I am sure that the noble Lord, Lord Sefton, who was kind enough to suggest that I understood industry, would not expect me simply to read an official answer to him. I do not agree that one can criticise a company for recognising an out-of-date model and strategically planning to find the funds to build the next one, or for looking at how models can be continued in global markets where one has to have numbers to cover research and development.
The North West has many growing companies. Several of the best pharmaceutical companies are represented there. It has the glass industry and it even has one of the best television producing companies in the world. We have to look at where the future lies, and those companies all employ people.
I have tried to answer as many points as I can in the limited time. The Government are well aware of the need to maintain and improve upon our industry's competitiveness at home and abroad. Of course we believe in manufacturing industry and of course we believe in training. We believe in innovation and in the British workforce. We also believe in winning. To allow our companies to do that we are establishing the best possible economic climate.
Lord Williams of Elvel: My Lords, I am most grateful to all noble Lords who have taken part in this debate which has been interesting and useful. I should like to spend another 10 minutes or so answering some of the points that have been made but it is not the convention in this House to do so and nor do I have the time. I wish I had the opportunity to move for Papers, but that again is not the convention of the House. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Sea Fish (Conservation) Bill
Brought from the Commons; read a first time, and to be printed.

Southern Africa: Famine
6.1 p.m.
Lord Judd Lord Judd rose to call attention to the impending famine in southern Africa; and to move for Papers.
The noble Lord said: My Lords, southern Africa is enduring the worst drought in living memory. For millions the coming year will be the harshest they have ever suffered. Crops are devastated and no fewer than 18 million men, women and children face the very real prospect of starvation.
We are understandably mesmerised by the cruel events in Yugoslavia and by the danger of contagious

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anarchy in much of Eastern Europe and the former Soviet Union. It was therefore essential that at its recent meeting the Group of Seven decided to make further assistance available for the Commonwealth of Independent States and that the European Community should vote its 120 million ecu for Yugoslavia. However, more, much more, is needed.
But people too are at risk—some 18 million—in southern Africa. The struggle for democracy is as real there as in the CIS and Yugoslavia. There are few parts of the world in which British and European interests and involvement, not to speak of moral responsibility, are greater. It is therefore disturbing to learn that, as aid is being mobilised for the former communist world, non-governmental organisations are being told both by the British Government and by the European Community that the money allocated for Africa has virtually run out.
The relationship between ethnic politics and hunger is as real in southern Africa as in Yugoslavia and the former Soviet empire. The grotesque racially based social inequalities in the Republic of South Africa mean that the burden of hunger falls heavily upon the black community. Failure to reach political settlement will perpetuate that position and perpetuation makes political settlement more difficult.
But it is not only within South Africa that the political dimension applies. The drought is no respecter of frontiers. The 10 developing black African countries which comprise the SADCC region adjacent to South Africa are badly stricken. What is more, they depend upon South Africa for much of the logistics of relief. There is a crying need for them and South Africa to work together. A settlement in South Africa will make that possible. Delay will prolong the obstacles. It is high time the British Government and the European Community follow the example of the Security Council today and put the disturbing setbacks to negotiations in South Africa at the top of their agenda alongside East European preoccupations. It was without doubt the combination of internal dynamics and external pressure which brought about the South African negotiations in the first place. A serious external assessment of what has gone wrong and of what action is now appropriate is long overdue.
From South African sources I learn that between 7th April and 21st June no fewer than 40 vessels unloaded more than 1 million metric tonnes of grain in South African ports. Last week some 10 vessels were unloading. During the same period in June, I am told,187 trains left South Africa for Zimbabwe with more than 240,000 tonnes of food. Some 16 trains went to Zambia with more than 20,000 tonnes of food; 23 went to Malawi with more than 31,000 tonnes; 8 to Botswana with more than 11,000 tonnes; two to Swaziland with more than 3,000 tonnes and 14 to Lesotho with more than 15,000 tonnes. Imagine the potential consequences for those countries if the setback in South Africa were to deteriorate much further with large scale prolonged disruption to ports
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and transport. It is abundantly clear that the political and humanitarian issues of the whole of southern Africa are deeply interlinked.
The dimensions of the drought are appalling. Even Zimbabwe and South Africa, the traditional bread baskets of the region, are importing millions of tonnes of food. South Africa will need 5 million tonnes of maize and 1 million tonnes of wheat this year. Zimbabwe, which is normally a net exporter of grain, will need 1.7 million tonnes in 1992– 93. Indeed, South Africa and the rest of the southern Africa region combined will need over 11 million tonnes of food between now and April 1993.
In early June the United Nations and the SADCC countries made a co-ordinated appeal in Geneva. They stressed that 10 countries were at risk of starvation and that 2.6 million square miles of land were stricken by drought. They called for 685 million dollars for 1.6 million tonnes of urgently needed emergency relief food,150 million dollars for emergency non-food aid such as water, health services and agriculture, and 21 million dollars for regional logistics and co-ordination. They also called for 2.5 million tonnes of programme food aid which they emphasised is essential if sufficient food is to remain in the markets. The background to their call is that malnutrition is increasing; surface water supplies are precariously low; boreholes are drying up, with grim consequences for schools and clinics; draught oxen, essential for ploughing and future crops, are dying and once mighty rivers such as the Zambezi, the Limpopo and the Orange have all but dried up. The social fabric of the SADCC countries has been gravely damaged and, overall, cereal production has fallen to 6 million tonnes—that is, about half the normal production.
I understand that the international response to the United Nations and SADCC appeal has been seriously inadequate with only two-thirds of the total target so far met. It is particularly disturbing that the pledges for emergency food aid for the most vulnerable people are less than half that requested. Furthermore, it seems that almost none of the food aid pledged at Geneva in June has yet arrived in Africa. Recently the director of Oxfam, Dr. David Bryer, and his colleague, Justin Forsyth, a specialist in African affairs, travelled to the region with Simon Hughes, a Liberal Democrat Member in the other place. Underlying the United Nations and SADCC appeal, they reported that in parts of Zambia people have resorted to eating wild fruits and roots. The traditional economic coping mechanisms such as selling crafts to markets have broken down. The reserves of food have been eaten. Water tables have dropped and malnutrition and a lack of clean water have meant that health is deteriorating fast. Men are deserting their villages in search of work in urban areas, leaving women-led households to take responsibility for coping with the drought.
In Zimbabwe some 40 per cent. of the population who are dependent on subsistence farming have lost most of their income. Countrywide, some 5 million people are estimated to be affected by drought. A special feeding programme is already being provided by the government for 1.5 million children. The whole

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situation is likely to be made still more acute by the arrival of an additional 350,000 refugees from Mozambique searching for food and water.
In many communal areas between half and two-thirds of the cattle have died. Those surviving are frequently too thin to be marketed. Seed has been eaten and tools have been sold. Dams are averaging only 19 per cent. of capacity and there is a real prospect that the Kariba Dam itself may close by February 1993 if the next rainy season proves to be a failure.
In both Zambia and Zimbabwe other, non-drought, factors are aggravating the situation for the poorest people most at risk. The structural adjustment programmes agreed with the World Bank and the IMF have led in the short term to price increases for basic foodstuffs, rising unemployment and cuts in basic services. Heavy debts are draining vital resources and driving the governments of both countries towards a choice between meeting their repayment obligations or feeding their people.
The drought is also having a significant impact on financial resources and foreign exchange reserves. Both Zambia and Zimbabwe have been forced to import substantial amounts of food at tremendous cost to their balance of payments and foreign exchange reserves. In addition, Zimbabwe has lost its foreign exchange earnings from its usually significant agricultural exports.
In Mozambique the nightmare is made worse by the continuing warfare. There is a pressing need, which I hope is being taken seriously, to feed the troops guarding food convoys if they are to do their job properly. It has been depressing to witness the gap between the peace rhetoric of Renamo and the reality of its activities on the ground. We desperately hope that the Minister may have news of progress on that front.
In Malawi the latest estimate is that there are 6.2 million people in need,2 million more than estimated in the joint SADCC/UN appeal in June. Namibia has experienced a 71 per cent. fall in cereal production, down from 114,000 tonnes to 33,000 tonnes. Cattle deaths there are widespread.
As recommended by the Bryer, Forsyth and Hughes mission report, I hope that the Minister, who has already responded with at least some additional British aid, will promise tonight to call for rapid international action on five points. The first point is pledges. The international community must provide the necessary funds to meet the minimum needs spelt out in the joint SADCC/UN June appeal. It is very worrying that pledges for emergency or target food aid for the most vulnerable in Zimbabwe and Zambia are so low.
The second point concerns deliveries. As things stand, very little of the food pledged in Geneva is likely to arrive in the region before September. Pledges must be turned fast into shipments. Supplies from large donors such as the European Community are needed by the end of August. Shipments should be properly co-ordinated to take account of port capacity and priority needs. Co-ordination by all concerned is also important at national level to identify the
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communities most at risk and ensure that the required assistance reaches them, overcoming the problem of the "last mile", as it is known to aid workers in the field.
The third point is recovery. Agricultural recovery is as much a priority as relief if next year's food needs are to be met. Seeds, tools, tractors, oxen, water harvesting and food reserves are all vital to stimulate food security. Structural adjustment programmes must take proper account of that.
The fourth point is the structural adjustment programmes themselves. As the poor struggle to survive more targeted aid is urgently needed to cushion the adverse effects of SAPs.
The fifth point is debt. Debt could be the final straw that breaks the camel's back. The Paris Club is to meet on 23rd July to review Zambia's debt. Zambia is likely to be offered only a limited Trinidad Terms debt relief package—a 50 per cent. rather than a 66 per cent. write-off. But surely Zambia, a country which is fulfilling all the international political and economic conditions and struggling to reconstruct democracy, should be given maximum relief, the full Trinidad Terms. Surely the IMF and World Bank should reschedule Zambia's multilateral debt as a first step towards debt cancellation. Now that Zimbabwe has been given access to World Bank IDA funds for the least developed countries Zimbabwe, too, should surely enjoy full debt relief.
In 1984 the BBC and Michael Buerk shocked the United Kingdom with their powerful pictures of death by starvation in the Horn. Everybody said it must never happen again. The public response was magnificent. Record sums were rapidly raised. It could very well be about to happen again in southern Africa, but there is still time to prevent it if, and only if, the governments of the world move decisively and fast. When we reassemble in October it will probably be too late.
The United Kingdom holds the presidency of the European Community. It therefore has an ideal opportunity to lead and to get the act together, to use the Minister's own words. As a first step I suggest that the Minister should immediately convene an emergency meeting of the European Community Council of Development Ministers to review the situation and to speed the action. I know that the whole House will cheer the noble Baroness if she takes the humanitarian lead and uses it relentlessly. I beg to move for Papers.
6.15 p.m.
Lord Beaumont of Whitley: My Lords, when I heard, with gratitude, that the noble Lord, Lord Judd, was to instigate this debate I got in touch as soon as I could with the various church societies which work in that part of the world. I was fortunate enough almost immediately to get in touch with Bishop Donald Arden, who was at one time Archbishop of Central Africa and who is at present commissary for the dioceses of Malawi and Mozambique. He returned from Malawi two days ago and has very kindly let me have his report so that I may relay some of it to your Lordships today. Therefore, I hope that your

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Lordships will forgive me if I overstep the usual conventions about reading because I wish the House to know what the Archbishop said, which is considerably more pertinent than anything I could have said myself.
He says that this is the worst drought in living memory and its results are calamitous. One does not yet see frank starvation though there are plenty of examples of people eating every other day. People cross the border into Mozambique in order to re-enter a few days later as refugees to get the tiny rations which the UN supplies of maize meal, pulses and cooking oil. But there are no stocks of food in the villages and eight months to go before the next harvest. That must be seen against the background that in normal times half the children under five show marked stunting from malnutrition and there is a death rate among under-fives of 253 per thousand.
As noble Lords have already heard, even promises of grain fall far short of requirements. No one can see how it will be transported into Malawi with all the main routes closed as a result of the Mozambique war and all surrounding countries competing for such transport as is available.
Malawi's normal export-import routes are closed (for example, at Beira) or have a capacity of one train a fortnight travelling at 10 miles an hour—as at Nacala. The alternative routes—by road from Lusaka and thence by rail to Durban or Port Elizabeth, running the gauntlet through Mozambique to Harare and thence to Beira or Durban, or 800 miles by road to Lusaka and thence to South Africa by rail—are estimated to take up to 47 per cent. of the export earnings of that country. Added to that is the horrific effect on firewood and food reserves of supporting a million official refugees and an unknown but larger number of unofficial refugees.
The Paris sanctions are a consideration. I do not believe that anyone would oppose the idea of the Paris sanctions, least of all noble Lords on these Benches. Political change is essential and with no active political parties for 30 years, no free press and no opportunities for public debate there is a crying need for democratic reform. But the sanctions are having a devastating effect on the lifeline of the poorest of the poor, the non-wage-earning rural population. Their only income is the produce of their lands which this year has been practically nothing. There is a need for positive action to see that the very poor do not bear the brunt of those sanctions. One way of doing it is by seeing that aid is not cancelled but redirected through the NGOs that directly serve the poorest of the poor. That will usually mean church agencies, since it is only they who have a wide network of health centres and schools in rural areas.
Apart from stopping starvation, there is an urgent need to support the health services. The Church Hospitals Association of Malawi provides more than one-third of the health services of that country, and at the moment it looks as if it will get only 50 per cent. of its basic needs from the government. Education in secondary and primary schools, particularly in the rural areas of Malawi, is desperately in need of
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resources. In rural areas the pupil/teacher ratio is between 68 and 90 and the number of children per classroom ranges from 98 to 167.
The Bishop asks me to say that the steps he believes to be within the power of the United Kingdom and EC Governments, are, first, to make available to churches and other NGOs directly involved in providing basic services to the rural poor the resources needed to prevent the total breakdown of health and education in the next three to six months. As a minimum, that should be equal to the amount of aid which has been withheld because of civil rights deficiencies. The poorest of the poor should not have to suffer as a result of a campaign which, after all, is undertaken on their behalf. There should be a fresh examination of the resources available for health, education, agriculture and women's development in countries like Malawi. It is too easy to blame the deficiences on mismanagement. Factors totally outside the control of the government—terms of trade, debt climate and the war in Mozambique—also have their effects.
Every available ounce of political and diplomatic power should be used to bring an end to the war in Mozambique. The Foreign and Commonwealth Office should be congratulated on joining the Rome talks as an observer. It should not turn a blind eye to foreign aid to Renamo which is still arriving from sources in South Africa. Whether they are individuals or the third force of army and police referred to by Nelson Mandela is very difficult to say. If humanly possible efforts should be made to open the rail corridors from Malawi to Beira and Nacala to enable famine supplies to be imported. The same applies to roads in Mozambique, regarding which I believe Her Majesty's Government have already made representations to Renamo to avert deaths from starvation.
The latest reports seem to show that Renamo members are murdering people in ambushes up to the present time and there is no undertaking from Renamo that it will halt its attacks on vehicles carrying humanitarian assistance.
I repeat the Bishop's closing words that if humanly possible efforts should be made to open the rail corridors from Malawi to Beira and Nacala to enable famine supplies to be imported, and the same applies to roads in Mozambique.
It is tremendously important that we are seen to do the best we can to help this area of Africa and stop the deaths which will take place over the next eight months if aid does not reach the stricken lands and we do not manage to transport the food to where it is needed. I thank the noble Lord, Lord Judd, for having initiated the debate and hope that Her Majesty's Government will be able to redouble their already good efforts in this area. It is tremendously important for the future of the whole of Africa.
6.25 p.m.
Baroness Hilton of Eggardon: My Lords, I too am grateful to my noble friend Lord Judd for introducing the debate. I do not have the specialist and detailed knowledge of the crisis facing South Africa possessed by other noble Lords who are involved in the debate. However, from the sidelines I have been wondering

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why there is so little public awareness of the impending catastrophe. Public awareness is important because it is only through the mobilisation of public opinion that the politicians and governments of the developed world will be moved to action with sufficient generosity to avert disaster. I have wondered why our attention is focused on the appalling situation in Yugoslavia to the exclusion of almost everything else. It is likely that in Yugoslavia 10,000 have so far died and there are one million refugees. Clearly, that is a dreadful situation. But the drought and famine in southern Africa may kill 18 million people which is an order of comparison far beyond anything we have seen so far in the Balkans. That may occur in the next few months and is already affecting the lives of 40 million Africans.
No doubt there are many explanations for our lack of attention: I propose to concentrate upon three. First, it is a slow crisis without the excitement of daily gun battles and the fast-moving scene in Croatia and Bosnia. Therefore, it does not produce the daily headlines beloved by the media attention is inevitably fickle and feeds on crises and vivid images. No doubt the television crews and reporters currently in Yugoslavia will lose interest as the civil war continues and move to southern Africa as the images of death by starvation become increasingly horrific. By then it will be too late to provide the necessary food aid. So far only 50 per cent. of what is needed has been promised.
Secondly, to people in this country Africa does not have the familiarity of Yugoslavia where many of us have spent holidays in the now shattered cities of Zagreb, Sarajevo and Dubrovnik. Nowadays, it would seem extraordinary if anyone referred to Yugoslavia (as Neville Chamberlain referred to Czechoslovakia) as a far away country of which we knew nothing. But that is how many people still think of Africa. I suspect there is also a strong element of racism. It is easier for us to identify with the problems of white Europeans in Yugoslavia than those of black Africans. However, we belong to one world, and it is in many ways the crippling debts owed to the western world by developing countries which in some cases outstrip their gross domestic product that make it impossible for them to buy the food they need.
The third reason for the lack of public interest is that the scale of the crisis is too enormous to be grasped. Perhaps that is why the public interest has not yet been engaged by this particular crisis. I have been seeking some means of making the scale of the crisis more concrete to the ordinary citizen on the street. The 18 million people at risk of dying from starvation are equal to two and a half times the population of London or one-third of the population of the British Isles. I have finally settled on a figure which may have more impact. Fifty years after the event we are still affected by the horrors of the Holocaust in which six million Jews died in Nazi concentration camps. If we allow the catastrophe in southern Africa to happen, three times that number will die in the famine. No doubt that will reverberate
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for many times 50 years ahead. It is essential, as my noble friend Lord Judd said, that the developed world responds forthwith to the crisis in southern Africa.
6.30 p.m.
Lord John-Mackie: My Lords, like other noble Lords I am grateful to my noble friend Lord Judd for introducing a debate on two countries in Africa which have suffered such terrible drought. In my opinion, it will affect them for more than one year. Of that I am pretty sure. I should like to widen the discussion beyond just those two countries. I am obliged to Oxfam for a very good brief on the situation as observed by the head of Oxfam and Mr. Simon Hughes, a Member of another place, when they were out there.
Some of the stories that they have told are tragic. There was one in particular about a woman with 12 children and an unemployed husband. All their cattle had died and she was left sitting watching her 12 children daily become thinner. To have so many children raises the issue of population control, which is a subject in itself. I shall not go into that matter other than to say how important it is that something should be done.
The report notes that the lives of about 18 million people are threatened by starvation. That point was emphasised by my noble friend and the last two speakers. The information I have from Christian Aid indicates that the figure is more likely to be 40 million. It could be greatly increased by those in an equally hungry Mozambique. So we are talking about very large numbers of people who are likely to starve in the coming year unless something is done.
That brings me to the world food situation. Accurate figures are difficult to obtain, but there is little doubt that well over 1,000 million people are starving to death in the world today. Estimates from reliable sources say that a figure of between 600 million and 700 million people die yearly of starvation, a very big proportion of whom are young children.
At lunch time today I was speaking to my wife about this debate. We have two grandchildren aged 4 and 6 who stay on our farm. The thought came to me of how it would be to watch those two children—who are well fed, well clothed, and I nearly said, well behaved, but I might need to amend that—starve to death. It simply cannot be imagined. But it is happening all over the world and something has to be done.
There are two problems. One is to get as much food as possible to the starving millions; the second is to teach them how to develop their own food production. It is extraordinary that they do not appreciate the situation. My noble friend said that they were eating their reserves of food and, even worse, many of them were eating the seed for the next year. Those are both big, long term problems.
Early in 1982, the noble Lord, Lord Renton, made a speech in this House about the issue. How right he has been proved. But the problem has grown worse over the past 10 years and still not enough has been done. What is to be done? First, the food that is

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available must be got to the people. I do not think that there is enough food available to do the whole job but we must do what we can.
There are difficulties. I was recently speaking to an Oxfam official who has been distributing food to villages in various parts of the world. He said that there are quite a lot of difficulties—indeed, there is no question of that—but that those difficulties could be overcome. However, there has to be the will to overcome them. He believes that that will is not there. Too many excuses are made. One excuse is that putting food into those countries destroys the local market for food; another is that the water supplies are so bad that it is a waste to send surplus dried milk.
There are answers to both those excuses. So far as water is concerned, let us send out more water purifiers. This country makes a lot of them. As for destroying the local markets, we should give the money to governments and tell them that they must spend it to subsidise farmers and to ensure that they are not made worse off by food coming into the country. Those difficulties can easily be solved.
As regards producing more food, at the behest of the EC this country was asked to take 1,500,000 acres of land out of food production. That is in addition to the 500 thousand that have already been taken out in the past two years in set-aside. At the same time our imbalance in temperate foods is something like £3,000 million a year. We should produce that ourselves and spend the savings in food for the needy countries. I cannot emphasise that point too much.
One thinks of the shiploads of food from New Zealand, Australia and other countries proceeding up the eastern seaboard of starving Africa with food for Europe, including Britain. Surely an arrangement could be made to deliver that food to the ports of the starving countries—it could include the two countries in southern Africa about which we are speaking—from Mozambique to Abyssinia. For that matter, before leaving the Mediterranean, some could be delivered to Algeria. That may seem difficult to arrange. The point is that we must have the will to arrange it.
A strong point made by David Bryer and Simon Hughes was that there is a need for co-ordination between governments and all the parties concerned to achieve the objectives that we all wish in this tragic situation. It is emphasised that we have the presidency of the EC for six months and we should use all the influence that that gives us to produce a co-ordinated scheme to help not only Zambia and Zimbabwe, but all the areas of hungry people. There was a very good letter published in yesterday's Independent signed by the heads of various charities—one of them a church charity—emphasising that point. I hope that the Government will pay attention to it.
6.38 p.m.
Lord St. John of Bletso: My Lords, I am grateful to the noble Lord, Lord Judd, for introducing this debate today on the impending and in many cases existing famine in southern Africa. The whole issue of the consequences of famine in Africa was raised last year
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by the noble Lord, Lord Donaldson of Kingsbridge, when he addressed the problems existing in the developing countries. Two underlying themes came out of that debate: first, the need for effective distribution of food aid and measures to provide international assistance in farming methods in Africa; secondly, the disastrous effects of conflict in many of the famine stricken countries.
I wish to elaborate on both those themes in the context of today's debate. As noble Lords are aware, Africa is the poorest continent, with an estimated population of 400 million people living in poverty. As the noble Lord, Lord Judd, mentioned, in the 10 countries of southern Africa an estimated 18 million people are threatened with starvation as a result of the drought, which is said to be the worst ever. Not only has it destroyed many farms, it has also resulted in many of the great rivers—the Limpopo, the Zambezi and the Orange—beginning to dry up. There have been dramatic reductions in the production of maize, grain, sorghum and sunflower seed during the current year.
For much of southern Africa maize is the staple diet. In South Africa the maize crop is down 67 per cent. to 2.4 million tonnes. In 1990–91 the domestic consumption of maize in South Africa was 6.7 million tonnes. Namibia's maize crop is down 71 per cent.; and Botswana has lost almost its entire crop. Zimbabwe, which used to be a major exporter of maize and sugar products, has seen almost its entire harvest collapse. Already food queues and hoarding has started in Zimbabwe and Zambia. As noble Lords may be aware, Mozambique—which for many years has been ravaged by civil war—has the highest level of human suffering through starvation in the world. Mozambique will reap only one-third of its food harvest this year and more than 3 million of its population of 15 million will need food aid. Almost half of that total amount has already been promised. Even though the international community has pledged vast amounts of food aid, there is frequently a long time lag before the food is delivered. That point has already been made.
The drought and impending famine has placed an important test on regional co-operation in southern Africa. With its sophisticated infrastructure of ports and road and railway networks, several southern African countries are to a large degree dependent on South Africa for rail transport for the maize and other products that they import.
The noble Lord, Lord Judd, mentioned the amounts of maize to be distributed in southern Africa. It has been estimated that a train 1,500 miles long would be needed to bring in all the maize that is required by South Africa and its neighbours. Of the 11 million tonnes of grain, some bought and some supplied by the United Nations world food programme, South Africa's railway network SPOORNET is transporting 8.5 million tonnes. It is the biggest transportation exercise in food and relief in the world. Even the Ethiopian drought relief effort involved only 2 million tonnes of food.
It is worth noting that South Africa, despite being excluded from the SADCC regional conference on the

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drought in Lusaka in April this year, and the Pledging Conference organised by the SADCC and the United Nations in Geneva in June this year, has nevertheless taken the initiative in fostering a regional approach to the problem. Together with Botswana, Malawi, Zambia, Zimbabwe, the world food programme, and the SADCC, South Africa has established the Strategic Group for the Southern Corridor for the purposes of distributing food supplies. At any particular time about 20 ships from Argentina and the United States are on their way to South Africa to unload grain. The grain that is not distributed from South Africa is offloaded at Walvis Bay in Namibia, Dar es Salaam in Tanzania, and Beira, Nacala and Maputo in Mozambique.
That vast transport operation obviously has its political side. Although Zimbabwe has had a firm policy in the past of no ministerial contact with Pretoria, because of the seriousness of the food situation a Zimbabwe Minister recently visited South Africa to discuss transport arrangements. The whole exercise highlights the ridiculousness of Zimbabwe's stand on sanctions against South Africa. Despite the deadlock in South Africa at CODESA II, and the tragic recent incident at Boipatong, together with the continuing violence, surely now should be a time for a concerted effort by all parties in South Africa to resolve the log jam, and for an international mediation group to be established to endeavour to break the deadlock between the various parties in South Africa. Will the Minister consider that option? I believe that an international delegation to South Africa would have an immensely persuasive influence.
A major theme on the issue of the impending famine is the relationship between conflict and poverty. I make brief mention of the stalemate situation in South Africa. Since half of my 10 minutes is up, I wish purely to touch on the issue of violence. There is no denying the fact that the security forces in South Africa have been indirectly partly to blame for many of the deaths in the townships. But it would be totally wrong to put all the blame on the Government for not controlling the security forces. There are clearly elements from both the extreme right and the extreme left which have sought to derail the democratisation process in South Africa. Pressure should be exerted on all parties to meet to discuss ways of strengthening the existing peace structures that were established in the national peace accord last year and thereby to encourage the need to return to negotiations as soon as possible.
South Africa is currently suffering its third consecutive year of negative economic growth. Mass action, in particular the general strike threatened by the alliance of the ANC, the South African Communist Party and COSATU between 3rd and 9th August, can only have a devastating effect on any chances of resolving the deadlock. Not only will it be totally destructive in its effects on the economy, but, with intimidation in the townships, in particular of workers wishing to ignore the boycott, violence will worsen and finally will detract foreigners from investing in South Africa. That foreign investment is desperately needed not just in South Africa but in the
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whole region. Will the Minister prevail on the alliance of the ANC, COSATU and the South African Communist Party the futility of that threatened action?
Clearly, the Government are and will continue to be under pressure to provide as much food as possible. However, I also believe that it is vital that aid is focused not just on food aid but on assisting the economies of southern Africa with education programmes, such as co-ordinated agricultural research programmes, health assistance—the point was made by the noble Lord, Lord Beaumont—both in the treatment of famine stricken peoples and in the improvement and treatment of water supplies.
Voluntary organisations such as Oxfam, Christian Aid, Save the Children Fund and others are to be much thanked for the fantastic work that they have done in the distribution of food aid not only in southern Africa but throughout Africa. The Minister is to be congratulated on her policy of granting and coupling food aid with good governance. The Minister is conscious of the severity of the drought and impending famine in southern Africa. I look forward to hearing more about Her Majesty's Government's policy for assisting the region.
6.48 p.m.
Lord Hatch of Lusby: My Lords, the most graphic illustration of the depth of the famine and drought in southern Africa came from the news that the bushmen community, for the first time in history, is appealing for food aid. It is a community which for thousands of years has been independent. It has obtained the needs of its families from fruits and from hunting and gathering. It is now reduced to appealing for food aid because the berries, vegetables, nuts and vegetation have been wiped out by the drought.
We have had an ample supply of figures. My noble friend Lord Judd began with a set of figures which would be shocking in any era of history but is particularly so in our modern times. All I would say is that, according to the United Nations,130 million people are already affected and 18 million people face starvation in that region.
Again, to bring that up against the international realities of today, the governments of Zimbabwe and Zambia are both faced with the desperate choice that they either renege on their debt payments and are cut off from credit or they allow their people to starve. They either put the money into food for their starving people or they pay it in debt repayments according to the structural adjustment policies as laid down by the IMF and the World Bank.
That is an effect of nature. The drought has not come from any human activity, with some exceptions which I shall mention in a few moments. However, a question is raised and it is a question of which I gave prior notice to the Minister who is to reply to the debate. Has there not been an opportunity to predict that famine and to prepare for it coming? I wonder whether the Minister has read the words of the noted Columbia University geologist Mark Cane who suggests that the drought could have been predicted if enough work had been done on seasonal climate

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forecasting. The question I wish to ask the Minister is this. In view of the fact that seasonal climate forecasting is done excellently by our meteorological office and at the climate research unit, is the ODA helping to finance that work? I believe that it did so in north Africa some time ago and I believe also that that finance has either come to an end or has been drastically cut. From the point of view of information, I should like to know what the ODA's policy is towards that crucial aspect of climatology which can save so many lives and can provide a basis for forecasting and predicting. That makes it possible to take action before such tragedies as we see today have come into effect.
The second aspect of famine with which I wish to deal is the impact of wars. We have already heard of the disasters in Mozambique brought about very largely by South African policy and forces. Millions of refugees are now moving into Malawi, Zambia, Zimbabwe and Tanzania, away from both the drought and the violence of Mozambique.
What some of us have been saying for decades now is that that kind of tragedy is inevitable under the system of apartheid. Those who have had the opportunity of travelling across the mountains of Transkei, Ciskei, Bophuthatswana and other reserves in southern Africa can see, and have seen over the years, the scarring on the hills, the soil erosion, the land of more and more people taken away and given to the whites, and pushing those people into the reserves until they are overstocked. The people cannot keep their families alive and so, again, there is the rush to the towns and the reserves are left with only old people and women to husband them. That is a direct effect of apartheid.
The revolt against apartheid is not just political; if anything, it is based most deeply on the love of the land and on the anger which comes from the removal of people from the land according to their racial origins. I should say to the noble Lord, Lord St. John of Bletso, that that continues. He calls for the ANC and COSATU to withdraw their tactics of strikes, but how is it that he is making no demands of the white minority government? They have shown themselves to be both brutal and determined to maintain white supremacy. The political deadlock has not come about just through intransigence; it has come about essentially because the de Klerk Government have been insisting on maintaining white supremacy through their constitutional proposals and through their refusal to compromise over those proposals.
The South African government and Mr. de Klerk himself have openly and publicly admitted—and I heard them so do—that they have been funding Inkatha and its trade unions. It is estimated that of the 7,000 deaths which have occurred in the past two years, well over half have been caused by Inkatha attacks. Anybody who wants to substantiate that should go along to Gray's Inn this week and listen to the international hearings organised by the United Nations and the British anti-apartheid movement.
The mad dogs of war have been let loose in South Africa. We have a responsibility. The Government,
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unwisely I believe, removed sanctions far too early before it was clear that irreversible measures of reform had been undertaken. If that is allowed to continue, the whole of southern Africa will collapse into chaos. I suggest to the Minister that she should tell the House this evening what action the British Government will take this evening in New York at the United Nations Security Council meeting when the ANC call for international intervention and mediation and the South African Government are saying we should keep out of their country.
I suggest that along with the United Nations, our position in the Commonwealth and in the EC gives us special responsibility and special opportunities to bring our pressure and international pressure to bear on those who are destroying southern Africa. We should show that when we speak to President de Klerk we speak with the backing of the international community in telling him that, if he wants to be accepted as a member of the international community, he must withdraw from the violence that is taking place and either control his security forces or else allow a new government to do so.
7 p.m.
Lord Monkswell: My Lords, we owe a duty of gratitude to the noble Lord, Lord Judd, for introducing the debate this afternoon. It is a subject of great importance. It disturbs me that we seem only to be hearing contributions from one side of the House, apart from the right reverend Prelate the Bishop of Worcester. I hope that the Members of the Government are all busily beavering away writing cheques to Oxfam to help the situation, but I suspect that they are not.
Be that as it may, it is inevitable when we discuss a topic relating to southern Africa that the political difficulties that beset the region inevitably come to the fore. I do not want to go down that road. I want to discuss a different aspect of the subject, except for making one aside to the noble Lord, Lord St. John of Bletso, who railed against the ANC for calling what is effectively a general strike in South Africa to put pressure on the De Klerk government to attend the negotiating table in a better frame of mind.
I understand that there may be some economic dislocation. But that is surely far better than having a situation where the negotiators of the ANC—Nelson Mandela and his team—are effectively divorced from the mass of the people of South Africa. We must recognise that there are not simply two parties to the dispute; namely, Nelson Mandela and De Klerk. Both have constituencies consisting of millions of people who need to be taken with them. When one is engaged in negotiations one must sometimes put on a show of force, a demonstration of solidarity, if for no other reason than to assure one's own supporters that one is going in the right direction.
Lord St. John of Bletso: My Lords, I thank the noble Lord for giving way. Is the noble Lord aware that in the threatened mass action of a strike the ANC youth league stated categorically that it intends to make the townships ungovernable?
Lord Monkswell: My Lords, young people are always taken with making extreme statements. While I appreciate that in the context of South Africa one must be extremely concerned about those statements, the impetuousness of youth needs to be recognised as well as the need for the leaders and the led to be together.
I do not want to spend too much time on that aspect. Our debate concerns the power of nature. I hope that we all agree that the tragedy unfolding in southern Africa is not being caused by the ethnic divisions, the economic unemployment and the political scene in that part of the world. It is being caused by an act of nature. Effectively, a natural disaster is taking place. We are talking in terms of 18 million people who are liable to die. We can compare that with the scale of death—I agree that it has been horrific—over the past few years caused by ethnic conflicts and the various political instabilities and crises in that part of the world.
Eighteen million is an enormous number of people. As my noble friend Lady Hilton said, it is three times the number of people who died in the concentration camps in the second world war. The impact that that would have if it came to be, not simply in Africa but around the world, would be immense. I suggest that the rich peoples of the world, the peoples of Europe, North America and Japan, would be held significantly responsible for those deaths. It is within our power, through our economic might, our wealth, to do something about them. That is what our task should be over the next weeks and months.
A number of speakers said that time was running out. There is only another half day of this Session of Parliament before we go away for a long Recess. We must have action from this Government not only as a government of a rich nation needing to make a financial contribution for all of us in the United Kingdom, but also, as a country holding the presidency of the Council of Europe, our Government have a position of influence and responsibility. That should be used over the next few months. Our membership of the Security Council in the United Nations is a privileged and responsible position. Some may argue that it is a relic of 40 years ago. But we should use that position also to ensure that not only our own country, not only the European Community, but also that the other rich nations of the world make their contributions as well.
We have seen this impending tragedy unfolding over the past few months, this awesome power of nature affecting now and liable to affect even more significantly in the future our fellow human beings and we must take action. We must take action through the Government. We must take action because of the wealth that we own. As a statistic, the per capita income of the peoples of southern Africa is less than 500 dollars a year. The per capita income of the rich nations—Europe, North America and Japan—is in the order of 15,000 dollars a year. Those statistics are stark. It is the difference between the poorest and the richest peoples of the world. We have a responsibility as a rich people, a rich community, to take the necessary action to prevent the disaster happening.
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I make a plea that we do not rely on the charity of individuals. We are a rich community. The European Community is a rich Community. As a society, as people acting together, we must make that contribution. The only way we can do that is through government contributions. Governments must levy the taxes on the citizens of their countries to raise the money and to spend it in a way that will save many millions of people in southern Africa from dying. I make the plea for our Government to take action as soon as possible.
7.10 p.m.
The Lord Bishop of Worcester: My Lords, I must begin by apologising for arriving late for this debate. It was unavoidable but I felt it was important that one from the Bishop's Bench should contribute to the debate, for which we are all deeply grateful to the noble Lord, Lord Judd.
It is difficult to follow so powerful a speech as that made by the noble Lord, Lord Monkswell. I can concur with almost everything that he said. In passing, perhaps I may repeat what was perhaps implied this afternoon at Question Time, that I believe that Nelson Mandela is in fact a moderate; that he said before he went to the United Nations that as far as he was concerned the ANC had left behind warfare and violence in favour of persuasion and negotiation. It is essential that we give him affirmation so that he may lead his people and not leave the townships to the mercies of the extremists and the mindless who have no real understanding of the future and the statesmanship which is needed in southern Africa. So I greatly hope that we can still, as a government, keep in touch with the moderate leaders so that the situation does not degenerate into total chaos.
I know that every Member of this House agrees that there is a human tragedy of vast and almost apocalyptic proportions about to take place in southern Africa. It is difficult to take in the figures. They have been given by most of the speakers and I do not wish to repeat statistics. I believe that it is a similar situation to the kind which we might have faced if there had been a major nuclear exchange between the nations. It affects both black and white and urban and rural people. All of us must have heard from friends in the cities of southern Africa—Bulawayo, for example, where sanitation has almost come to a halt and from people in Zimbabwe—who have said that we are one step away from the tragedy of Ethiopia.
This is a tragedy so immense that it must command from us an equal, generous and unprecedented response. I believe that there is a sense in which we either survive together in the present-day world or we do not survive at all. The destabilisation of the continent of Africa through abject poverty which will bring the breakdown of government, will obviously affect us all. If they go deeper and deeper into poverty the more sophisticated economies will follow them. That much we noted when we had a debate in this House on the successful completion of the GATT round.
I say again that I believe that the time is here for an unprecedented response on the part of government as

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well as individuals. I can assure your Lordships that the Churches have alerted their members to the need. But I agree with the noble Baroness that there have been so many other things in the headlines of the news that the tragedy of southern Africa may have gone less noticed than it should have done. We need first aid, but we also need a long-term strategy.
Perhaps at this point it would be fair for me to say that the Christian Council of Mozambique, for example, has organised an airlift to the remoter areas. The Zimbabwe Christian Care Council is running a supplementary feeding programme in primary schools. Children are being both fed and educated. A headmaster went on record as saying,"Children who had stopped coming to school because they were too weak have started again", with the provision of food. Christian Aid in southern Africa is also raising at the moment £500,000. It has reached that target for southern Africa alone. The Catholic Bishops Conference raised a "Crisis in Africa" fund, which I am glad to say reached £1 million yesterday.
I do not recount these things with any sense of complacency. I continue to make the point, however, that has been made by the noble Lord, Lord Beaumont. The Churches of any denomination are singularly well placed to make distribution of food to local people. They have the people on the ground who know those who are in need and where the landless poor and the stricken farms are to be found. I know that I hardly need urge government to make use of us in the relief programmes which must be mounted. It is a matter of saying to government: "Give us the provisions and we'll help finish the job".
It is vital at this moment of summer pause and summer vacation, as noble Lords have already pointed out, to persuade the international community to make a new round of pledges. The first round was none too successful. Not only was it too small but it was too long delayed. There should be a new round of pledges. I hope that Britain, as holder of the European presidency, will take the lead in such an initiative. We have done in the past. We in this nation have a reputation for caring for dispossessed people. Let us live up to that reputation.
Furthermore, as other noble Lords have urged, it will be necessary to release more Treasury funds to enable the Overseas Development Administration to meet unforeseeable needs generated by the drought. In the long term it will be abject poverty which will be the enemy of those administrative, economic and governmental reforms which are so necessary in some of the poorest countries in southern Africa. Perhaps I may again give a statistic: people in some of the poorest countries in southern Africa are 120 times poorer than a British citizen. Many people would love to have the food that every evening we put down for our cats and dogs.
The Prime Minister of this country is to be praised for his consistent return to the need for debt release, because that would set free the resources needed for development. As noble Lords will no doubt know, Africa's development deficit will amount to 35 billion dollars over the decade of the 1990s. If action is not
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taken, the present cycle of deepening poverty will surely bring in its train war, epidemics and the breakdown of government as night follows day. Furthermore, I am told that investment during the 1980s in sub-Saharan Africa has, like the landscape, dried up.
Perhaps I may speak extremely briefly about a lesser-known United Nations organisation, the International Fund for Agricultural Development. It helps small farmers to grow more food. But in spite of it being rather a success story, I believe that Her Majesty's Government are no longer going to contribute to it. I would like some reassurance on that from the Minister when winding up. Seven million pounds were put into the organisation at the beginning. Although other nations in the northern hemisphere are supporting the international fund for agricultural development, we in Britain have refused to continue to do so. This body has organised 26 projects in 20 countries. It has enabled farmers in Burkina Faso to rehabilitate 5,000 hectares of degraded land and to increase staple cereals by 40 per cent.
Let us not waste time arguing as to who should pay the share. Can we not return to the position of being a supporter of this lesser-known United Nations outfit? The famine in southern Africa and in the Horn of Africa is becoming, as we have already said, massive and tragic. There are few things which are more terrifying than drought. I pray that, if the experience teaches us that the time has come to transfer some of the multimillions we have spent in developing weapons of destruction in past decades to resources for both short-term and long-term needs in such an impoverished world, then we may have learnt an important lesson. I repeat: we either survive together or we do not survive at all.
7.19 p.m.
Lord Bottomley: My Lords, I too join in the tribute that has been paid to my noble friend Lord Judd who has great knowledge of the subject that he introduced and who speaks from great experience. He has done more for the developing world than most people. I am also delighted to follow the right reverend Prelate the Bishop of Worcester who spoke with feeling and understanding.
It was my privilege to be a member of the United Kingdom delegation to the United Nations in October 1946. The leader of that delegation was Ernest Bevin. It was my responsibility to watch the British interests in the developing world. I was a member of the trusteeship committee and some of my fellow-members included Foster Dulles of the United States, Gromyko of the Soviet Union and Field Marshal Smuts. At the end of the session Field Marshal Smuts said to me,"I am very glad that young members of the Labour Party are taking an interest in southern Africa, but you do not understand the problem unless you see it first hand". He said that he would send a letter to Prime Minister Attlee suggesting that I visit South Africa.
In due course the Prime Minister said to me,"Field Marshal Smuts is going to send you an invitation to

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visit South Africa and you can accept". Again in due course I met the Field Marshal in London and he asked me whether I would bring my wife with me. I said that I could not do so because I could not afford it and the Government would not pay for that. He said,"The South African Government will have her as a guest". My private secretary on that visit was Lord Hunt, who eventually became Permanent Secretary to the Cabinet.
There has been some comment today that the Commonwealth has no relevance to today's problems and that it is more of a liability to Britain than an asset. The links may be mainly sentimental, but the fact is that over 40 countries, most of them of considerable importance, still wish to preserve this multiracial association. In 1980 Willy Brandt, who was the first Socialist Chancellor of the Federal Republic of Germany, produced the Brandt Report. He called it an assault on poverty and hunger, a programme for survival. Seventy thousand copies of the report were sold. The present father of the House of Commons, Sir Edward Heath, was associated with that report. I wonder whether the Government might consider asking him to get together a team of Commonwealth statesmen and women to produce an up-to-date Brandt Report.
During the past 60 years conditions of life have altered more than in the past 2,000 years. Television, radio, computers, electronics and automation have changed our life-style. We live longer. Our most acute problems today are mass hunger and disease. They are not new, but they are intolerable because they could be solved by our modern knowledge and technology.
A friend of mine who recently returned from Zambia said that Lusaka was surrounded by immense squatter camps, populated by those who had come to seek refuge from the drought-ridden countryside. There is violent crime there caused by out-of-work guerrillas. Malawi, which is a land-locked country, has one of the largest refugee populations in Africa. The competition between the local population and the refugees over food resources could cause untold trouble. In Zimbabwe, hundreds of thousands of families are experiencing severe food shortages. The drought has hit different groups, small-scale farmers being among the most severely hurt. Lesotho, Swaziland, Mozambique and many other southern African countries are similarly affected.
In the coming year many millions of people in southern Africa will be threatened with starvation. They have had one of the worst droughts in living memory, destroying huge amounts of crops. It is estimated that to meet this devastation 11 million tonnes of food will be needed between now and April 1993.
Rural communities are stretched more than they have been ever before. They will face a bleak future if action is not taken to help with agricultural recovery. Oxen, seeds, tools and tractors are urgently needed to ensure that crops are planted in September. If we fail to cure mass hunger and disease we shall be condemned by history.
7.27 p.m.
Lord Rea: My Lords, from the many speeches that noble Lords have made the tremendous extent of the impending disaster which is about to hit southern Africa is now clear. I should like in my speech to discuss briefly some of the underlying reasons behind the recurrent severe droughts and famine conditions which have been affecting both the Northern and Southern Savannah regions of Africa. First, however, I wish to ask the noble Baroness, Lady Chalker, about measures which Her Majesty's Government might be able to take in the present emergency to assist in getting help out to populations at the village or remote settlement level—"the final mile"—where the need is most severe, especially among women and children. Roads are bad and distances great, especially in Zambia and Mozambique. The atrocious surfaces are punishing to vehicles and according to Oxfam local transport companies are unwilling to use their vehicles because of the possibility of breakdown and the lack of spare parts. If development was at a higher level and the roads and infrastructure in general were better—as they are in parts of Zimbabwe and South Africa—getting supplies out to the periphery would be easier. It must be part of future development aid to help to improve that situation.
As many noble Lords have pointed out, the need is to get the food, seeds and tools out to where they are needed as soon as possible—and certainly by September—to be ready for the next planting season. I remind the noble Baroness of the significant part that was played during an earlier drought and famine in Ethiopia by Hercules transport aircraft. Their part in moving grain and other supplies through war-torn and difficult terrain will not be forgotten either by the NGO teams who were working there or by the local population. A similar exercise for southern Africa might well be appropriate. The Hercules transports might even take with them mobile workshops and suitable spare parts so as to keep a fleet of local trucks in operation as well. There would be considerable training potential for the military personnel involved in mounting such an exercise.
One of the justifications for maintaining an army or an airforce in peacetime should be their ability to intervene and assist in civil disasters. A mobile task force could be assembled to work very effectively in the situation in southern Africa. Ideally this should be under UN auspices, but because of the urgency of the situation and our long association with southern Africa it would be entirely appropriate for the United Kingdom to offer bilateral emergency assistance of this kind. Such a task force to southern Africa, rather than to the south Atlantic, would be something we could be proud of.
The Republic of South Africa is very much affected by the drought. It should have sufficient resources, or should be in a position to buy them, to avert serious consequences within South Africa, but that is no guarantee that it will do so. For example, will it get adequate help out to African people, especially in more remote settlements? Does the noble Baroness have any information on how the South African Government intend to tackle the problem within their

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own borders to help their people, particularly their black people? Has South Africa offered any assistance to its more severely affected neighbours?
In the five minutes left to me I should like to put forward some thoughts as to why these problems affecting the sub-tropical and savannah zones of Africa seem to keep recurring. Droughts of course are not new in these ecologically rather delicately balanced areas where rainfall, often heavy, is concentrated into one third of the year to be followed by long and often very hot dry periods. Southern Africa is more fortunate than mid-Africa and the Horn of Africa because it is narrower and the sea is nearer. Moisture enters the atmosphere nearer the centre of the continent. But both in the south and the north the effects of a drought are much worse now than they used to be for several reasons.
As my noble friend Lord Hatch pointed out, the land is more intensely cultivated and is often over-grazed, leaving less in reserve. Water tables are lower and fall more quickly and there is less natural vegetation for populations to fall back on. To quote a report from Christian Aid regarding Zimbabwe:
"Up until two years ago Zimbabwe had built up large stocks of maize which could have covered the shortfall caused by drought. But in order to increase foreign exchange earnings the government sold some of the surplus, and encouraged farmers to increase production of cash crops like cotton and tobacco. The remainder was used to cover shortfalls in the harvest during the poor rains of recent years"—
my noble friend spoke of warning signs—
"So when this year's drought struck, the country was left without any reserves".
In Mozambique the situation, like Ethiopia in the mid-1980s, has been made far worse, as other noble Lords have pointed out, by the continuing conflict which has severely disrupted agriculture. The Christian Aid report states:
"Taking trucks through Mozambique, where the civil war disrupts normal life, is very difficult".
To return to the cause of the droughts, we have to consider whether man and his activities are contributing to their increasing frequency. Even if we leave aside the possible effect of global warming it is highly likely that intensive agriculture and forest or scrub clearance contribute to the problem. Indigenous plants are well adapted to long dry spells; they have deep roots and can draw water from deep down. At the same time they contribute to atmospheric moisture by transpiration through their leaves and by covering the ground in the dry season to prevent some of the heat of the sun being reflected back into the atmosphere. Unchecked, this extra heat decreases the relative humidity in the atmosphere so that cloud formation and precipitation of moisture as rain is reduced.
This has lessons for agricultural practice. For example, the level of the water table could be improved by building many small dams—the right reverend Prelate the Bishop of Worcester mentioned what has happened in Burkina Faso—to prevent run off and erosion, and atmospheric moisture could be increased by planting suitable tree cover between and around crops and restricting forest clearance.
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There is an urgent need for assistance to small and medium farmers if Zimbabwe and Zambia are to continue in their role as the bread basket of southern Africa. One important step here—I fully echo what was said by the right reverend Prelate—should be to augment the funding of the International Fund for Agricultural Development. The reason put forward for our not contributing to the fund is that other countries are not contributing their share and so we are withholding our share. I can understand that if a small contribution is spread around the whole world it might be dissipated. This again might be a reason for Britain going alone and instituting its own agricultural projects in southern Africa to follow up this drought. Britain could well support an assistance and development policy to help small farmers. But even before this, as several noble Lords have pointed out, the reduction of debt, both official debt through the Trinidad mechanism and commercial debt through pressure on the banks, must be considered as a top priority.
To sum up, I suggest that Her Majesty's Government have within their power the ability greatly to alleviate the immediate crisis but also to make a major impact in the long term. If they were to do so both now and later they would earn the gratitude of many millions of people in South Africa and throughout the world.
7.37 p.m.
Lord Pitt of Hampstead: My Lords, I thank my noble friend Lord Judd for introducing this debate. I am lucky in that I am the last Back Bench speaker and most of the detailed arguments have already been put. I want therefore to make a summary. There is a drought in southern Africa. We should be asking ourselves why there is a drought in southern Africa. Could it have been foreseen, and if so, why was it not foreseen? If it could not have been foreseen, why could it not have been foreseen? There is evidence to suggest that it could have been foreseen and that action could therefore have been taken to—I would not say prevent—at least reduce the worst consequences. That is my first point.
One needs to ask another question. Assuming that there was no way of forecasting the drought and that nothing could have been done to prevent the drought, why has the drought had such devastating effects? That is a question we need to answer. Unless we answer that question we will not be able to deal with further developments in this way. Let us face it: we do have droughts and they have consequences. But there are areas where preparation is made and the consequences are not so serious. Therefore one needs to ask why in an area like southern Africa the drought has had such serious effects.
My noble friend mentioned the political activities in the area which have played a part. I want to build on that because I believe that the direct activity of the South African Government to destabilise its neighbours is one of the factors in the situation that we are now facing. I believe that I am right to say that. For example, if I just instance Mozambique, there is no question about it: the activities of the South African

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Government through Renamo have been largely responsible for that country being flat on its back, because that is where it is. Therefore, we have to look at that as a political side. If I am right and that political side is important, then the British Government must ask themselves what they must do about it.
Over the years the Government have tried to defend what is happening in South Africa in one way or another and to be a sort of friend to that country. The stage has now been reached where, if the Government are to be a friend to South Africa, they must be a candid friend. I say that because there is a real danger at this moment of South Africa going backwards rather than forwards. If it does so, much of what we are talking about is small fry compared to what will in fact happen. Therefore, it is necessary to try to ensure that there is agreement in South Africa and that, instead of splitting up in the way that it is doing, the country is able to unite and to unite not only within itself but also with its neighbours so that the area which is fertile and which has many good resources becomes an area of which the world can be proud.
Frankly, the latter requires international action. It is no use all of us sitting on the sidelines and just hoping that things will not get worse. We are in a position—indeed, I believe that the Security Council is actually discussing South Africa today—where the international community can say,"We want to examine the situation here and see what can be done in order to enable this particular country to become a true democracy," and so fulfil its full potential. We must also encourage the neighbouring territories to play their part because the area is one of great potential which, if fully developed, can not only feed and clothe itself but can also help many of the areas further north.
Therefore, I hope that one of the consequences of our looking at this disaster is that we will seriously consider political action which will prevent a recurrence. At the same time—the point has been mentioned many times—we must consider the economic causes; indeed, the matter of debt has been much mentioned. But it is not just the debt; it is the whole way in which those territories have had to use their resources not to feed or develop themselves but in order to meet the demands of other people. We need to ask ourselves: is it really right that we should go on taking that particular attitude to those territories? Is it really right that we should go on taking from those countries all that we can get while failing to help them develop?
The truth is that if we were to put back into those countries what we have taken from them—not all of it, but enough of it—the consequential development would enable both them and us to prosper. Therefore, we need to be looking at those issues in this way. Over the years we have adopted a selfish attitude; namely, one of what is in our best interests rather than what would help the community as a whole. We have always done so. We have always ended up with gainers and serious losers. It is the consequence of always doing that rather than the other round that leads us into problems.
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In my rambling way, I hope that I have brought to the House a realisation of the wider aspect of the problem. It is not only in southern Africa that we have droughts about which we ought to have been warned and about which we ought to have done something but have not; it has happened elsewhere and will happen again. What we really need is a new philosophy, a new approach or a realisation that we can help and that, by helping, we can also benefit. I hope that the Minister will feel able to accept what I have said.
7.47 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, perhaps I may first thank the noble Lord, Lord Judd, for tabling the Motion for debate this evening. It is absolutely right that we should debate the drought and the impending famine in southern Africa. I am very pleased that the House has had that chance. Despite the increasingly sad but welcome media reports which are now appearing with increasing frequency, as the noble Baroness, Lady Hilton of Eggardon, said, the severity of the crisis is not yet as widely appreciated as it should be.
As the noble Lord, Lord Judd, knows, I saw the new Director General of Oxfam together with our colleague Simon Hughes from another place immediately upon their return from southern Africa. I have today received a further report from the Save the Children Fund on what is happening. The work that is being done by the British NGOs, side by side with local Churches to which the right reverend Prelate referred, is first class. But they cannot do it all themselves. We know that, and that is why we are giving them as much backing as possible.
I agree with the noble Lord, Lord Judd, that insufficient priority is being given in some countries to the forwarding of grain and the commitment of money to appeals. But I can tell him that right from the outset, Britain has ensured that we put our efforts right up front so that people knew what was in the pipeline. We have not ceased to do that. We have also sought to use every piece of scientific evidence possible to guide us in meeting the needs of those people.
Most noble Lords have painted, rightly, a stark picture of the situation in southern Africa. The debate has, however, ranged far wider than the impending famine in southern Africa. Before I concentrate on that topic I want to try quickly to put into context two other issues: first, the comments that the noble Lord, Lord Judd, made about the attention which the former Soviet Union and central and eastern Europe, especially the former Yugoslav Republic, and the tragedies of Bosnia Herzegovina, are attracting at the moment. Yes, I know, because I too am working for Africa, how infuriating it is not to be able to get into the headlines with this desperate famine. Other measures also need to be tackled. As the noble Lord made that comment I looked up into the Gallery to see how many members of the press were there. My heart sank once again. We must hope that the combined efforts of the appeals from the United Nations, the NGOs, and what we say in this House and another

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place, will alert the public to just how bad is the situation. It is as tragic, in numbers, as anything we shall ever see. We hope that we shall never see anything like it anywhere else in the world.
The second issue with which I must deal before turn to the debate on the famine relates to political matters in South Africa—a subject to which the noble Lords, Lord St John of Bletso, Lord Monkswell, Lord Hatch of Lusby and others referred. I am glad that today in New York the Security Council is discussing South Africa. It is at the moment hearing directly from most of the parties directly involved with South Africa. I hope that as a result of that debate the international community will send a strong signal that negotiations among all the parties in South Africa must resume as soon as possible, and that the violence must end.
When in New York last week I ensured that every effort was made to bring people together on that issue. Since I returned from a further discussion in Washington we have done everything that we can to ensure that we build upon the work that is already being done to stop the violence and to build up local peace committees. The House may be interested to hear that in that respect it is a British expert (Dr. Waddington of Reading University) and two British police officers who were sent at our expense to Judge Goldstone's inquiry into Boipatong some two weeks ago. We believe that we can help further in South Africa, if all parties wish us to do so. That is why I have said on many platforms in the past two weeks that Britain is ready to respond positively to any proposal within the international framework that has the backing of all the parties in South Africa, whether it come from the EC, the Commonwealth or the United Nations. As friends of peace and of progress and a non-racial democracy in South Africa, we must do all that we can to assist.
As I told the European Parliamentary Development Committee in Brussels this morning, I greatly hope that the European Ministers' troika will be able to visit South Africa as soon as will be helpful to bring about further steps to end violence and enhance negotiations. I hope your Lordships will forgive me for having departed from the text of the debate, but South Africa has been mentioned so often that I felt it right to respond.
In terms of the drought and the impending famine, we have never seen anything so severe as that now faced by southern Africa. For a region which, taken as a whole, is more or less self-sufficient in the production of food grains, that is disastrous. Food production has been at less than half the normal level, and up to 18 million people are at serious risk. I say to the noble Lord, Lord John-Mackie, that that figure of 18 million people at risk comes from the United Nations and the southern African Development Co-ordination Conference. They are not our figures. They are internationally accepted.
The food imports needed are, as the noble Lord, Lord Judd, said, in excess of 11 million tonnes. That is already placing an enormous strain on the region's fragile economies and on its transport infrastructure
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and distribution systems—a subject to which I shall return in a moment. I can assure the noble Lord, Lord Pitt, that Britain has not sat on the sidelines. We have been active from the earliest moment, as I shall describe shortly. There is a further problem, and that is the drastic shortage of water. It has led to the widespread slaughter of livestock and the loss of already threatened wildlife resources. The water shortage has further resulted in an increased incidence of diarrhoeal and infectious diseases, to the loss of industrial production and even threatens the viability of major cities such as Bulawyo. I hope that those outside the House will realise from those remarks just how seriously we view the drought in southern Africa.
The noble Lords, Lord Hatch and Lord Pitt of Hampstead, talked about having been able to foresee the drought. Your Lordships may wish to know that my own Natural Resources Institute at Chatham has already done great and good work in studying how, through remote sensing technology, one can foresee as much as possible. But I am told that we cannot foresee more than six months or so ahead. As regards the current drought, the valuable work that was done by the United States Aid Administration and the World Food Programme drew our attention to the scale of the problem in the early part of the year. That is how I came to respond with the first £10 million in the first 10 days of March this year.
We are using all the technology we have. We shall be working further with the World Meteorological Organisation to extend the monitoring that is already going on which alerted us this year to the situation. However much monitoring there is, and however much warning there is, I am afraid that we shall never be able to avoid the full effects of a drought such as we now face. The threats it poses for 18 million people go much wider. That is why the international community must act with all speed and determination to counter them.
As I said, this country did not wait for any second warning. Britain has, throughout the disaster, taken a leading role in trying to cajole others to make efforts similar to ours. Not only were we the first to respond, since March I have approved a total of £48 million of bilateral commitments of aid to southern Africa. This has taken the form of food aid, balance of payments support to help ease the financial burden of additional food imports, technical assistance for various aspects of drought management and support for the activities of British and local voluntary agencies.
The European Community, too, has responded to the crisis. At the Council of Development Ministers on 4th May we approved a special food aid programme which is making available an additional 800,000 tonnes of food aid this year. Over 370,000 tonnes of this will go to the countries of southern Africa and Britain will be contributing more than £11 million towards the cost. So, in total Britain's contribution to date this year to southern Africa to help alleviate the effects of the drought is nearly £60 million.
The response of the other bilateral donors has been positive. But it was not early enough in a number of cases. I am grateful to my officials around the world for following the lead I gave some months ago that we

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must persuade other countries to do as we have been doing. I was at least glad to be present in Geneva at the drought appeal conference where 600 million US dollars were pledged. However, I was very sad to find that I was the only European Minister present; there were few from other parts of the world. As has already been said, the amount pledged fell short of the 854 million dollars appeal target.
I am glad to tell the House that since that date there have been significant commitments from a number of major donors, including the United States of America and Japan. Others, including Holland and Canada, have announced substantial extra funding since the conference, and indeed we have made other announcements since then. But resources are still needed and we shall take every opportunity in the various international fora to urge others to join us in responding to the need.
I must mention the speed with which the machinery of co-operation has been put in place within the region. A ministerial meeting of the southern African development co-ordination conference in April established a regional task force to oversee the response to the crisis in liaison with national emergency co-ordinators and the relevant UN agencies. Six corridor groups have been established to supervise the importation of food through the main regional ports and associated road and rail systems. A logistics advisory centre has been established in Harare, with the close involvement of the World Food Programme. Together, they will help smooth the flow of food imports and ensure that the best use is made of available transport capacity.
I pay tribute to the Minister of Transport from Zimbabwe who helped to break a deadlock which we faced at one time, with the importation of food through South Africa, mainly because I am afraid one or two countries did not want to receive the food through South Africa. When there is a guerrilla warfare going on in Mozambique one has to use whichever ports are available. But more of that later.
I must say that I am heartened now that the co-operation has transcended political differences. The South African Government have also played a key role in this logistical exercise and that should not be forgotten. The port and railway authorities in South Africa, in close concert with their counterparts in neighbouring countries, have responded to the challenge of coping with more than four times the normal level of food imports.
I wish to say a word to those who I know were worried that old wagons were being used from South African railways to take the food up to the landlocked countries. This was sensible, because the wagons could remain as storage places in those countries when there was no other warehousing available for the food which might otherwise have been in a worse state when it reached the people in the far off villages. So there was a good reason for using the old South African stock.
Throughout the debate we have heard a number of comments about structural adjustment affecting our ability to help people through this drought period. The noble Lord, Lord Hatch of Lusby, commented
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that it was food or paying your debts. Others made less extreme comments. Perhaps I may make it clear to the House that the implications of the drought for economic reform in the region have been a key subject in discussions over the past few months and last week in my discussions with the World Bank and the IMF. I am convinced of the willingness of the World Bank and the IMF, if they find there is a problem, to deal with it promptly and flexibly. Both institutions are making substantial extra resources available for the countries worst affected by the drought.
It is important that the progress we have so far made under economic reform programmes should not be reversed. That is one of the reasons why we have increased the level of our balance of payments support for the reform effort in Zambia and Zimbabwe, so that they should not be knocked off course and they can at the same time help those badly affected by the drought.
There is no conflict between structural adjustment and food security. Indeed, more realistic producer prices and improved arrangements for agricultural marketing should be helpful in this respect. But the experience of the drought has caused us to ask the fund to make more explicit its consideration of the food security issues when it is designing further stages of structural adjustment. We have not faced this situation before. We learn that if we can be flexible—whether it be through the bank, the fund or bilateral donors—the people in these countries will end up the better.
Many noble Lords, particularly the right reverend Prelate the Lord Bishop of Worcester, referred to the debt situation. The noble Lord, Lord Judd, paid tribute to my right honourable friend the Prime Minister. As the House knows, Britain has taken a leading role in debt reduction in recognition of the burden which accumulated debt represents for many developing countries. The Trinidad Terms are not, as we had proposed, a two-thirds reduction in the debt, with the balance being repaid over 25 years, but 50 per cent. of the payments falling due over an initial agreed period, usually three to four years, and the balance rescheduled over 25 years.
The British Government have already recognised the particular problems in Zambia. As an immediate measure of support for the new government we have rescheduled all the debt service payments falling due this year—a sum of about £4 million. Next week, in the Paris Club meeting,. we shall give our strong support to the application of the Trinidad Terms to the remainder of Zambia's official debt.
Zimbabwe is in a slightly different position in that it does not have the same debt repayments to be made, but we are taking what steps we can to help.
There were several comments in the debate about the Community's commitment to the whole process of alleviating the effects of the drought. Not only did we give approval on 4th May to a substantial programme of additional food aid, but we have been emphasising to the Commission throughout that the timely delivery of the food aid is equally important. Nearly half the Community's total food aid programme for this year has been shipped or was about to leave the docks by

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the end of June. Therefore, there is a great deal which is already getting there. Some of the food aid that we gave went rather earlier.
We know that there is a need to help arrange the delivery in-country and that is why Britain is supplying computer know-how to the SADCC secretariat which, with the World Food Programme, has set up the logistics advisory centre in Harare. It is being run by a Briton who has much experience from his time in Ethiopia of assisting in the onward delivery. That worried a number of your Lordships.
The drought is not confined to the front line states. The noble Lords, Lord Hatch of Lusby, Lord Rea, and Lord St. John of Bletso asked me about the drought in South Africa. South Africa is badly affected by the drought. The cereal production will be around 30 per cent. of the normal level. That means that exporting to the rest of the region is simply not on. The country itself will need 5.5 million tonnes of imported cereals this year.
The South African Government have allocated 440 million rand—approximately £88 million—for the nutritional development programme. However, that may not be enough and more may need to be added. One of the main ways in which South Africa has been helping its neighbours has been in the logistics of delivering the aid. Certainly they have waived demurrage fees at docks for transport which we were providing for landlocked countries. They have brought out of cobwebs old railway wagons. South Africa has offered much help in the logistics of delivering the aid.
The right reverend Prelate the Bishop of Worcester wished to make a particular point but did not have the time to do so. If we could bring more people, be they in the Churches or in the population at large, to comprehend the reality of this situation, we would perform a great service. The noble Baroness, Lady Hilton, referred to that.
The noble Lord, Lord Beaumont of Whitley, talked about the immense amount of work that is being done by the Churches in Malawi and Mozambique. However, it is not just a case of the Churches helping in the affected countries. The Churches in the developed nations need to play an increasing role in this respect. Both the right reverend Prelate and I wish to draw the attention of the nation to the role that the Churches in the developed nations can play in this respect. There is an awful lot of talk but not an awful lot of "do". I believe our own Churches can do even better in this matter.
The noble Lord, Lord Beaumont of Whitley, asked me about Malawi. He gave the House some heartrending facts that had been sent to him by the Archbishop of Malawi and Mozambique. I would say to the noble Lord and all other Members of the House that we are in no way stopping humanitarian aid, even where we have decided that because governments are not following a path of good government and not respecting human rights we should cease further programme aid. Malawi is a case in point, but the prevailing situation in that country has not stood in the way of our providing humanitarian and food aid.
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I hope we shall never stop providing that aid. That is why we have been working alongside the non-governmental organisations who can deliver where there is no government-to-government aid programme.
It is right that we should pay tribute to the role of the NGOs. The noble Lord, Lord Rea, mentioned the difficulties that sometimes occur when food aid reaches the last leg of its journey to the villages. That is one area where NGOs have an outstanding record. I have so far approved a total of £3.5 million for the provision of technical and transport assistance and support to help NGOs in their task. We are working through our High Commissions and embassies in southern Africa to ensure we are in contact with those on the ground. However, if any NGOs feel there is more to be done I hope they will make contact with me.
At my main meeting with the British NGOs working in southern Africa I stressed to the staff of those bodies that they must let me know if they encounter any kind of difficulties in making deliveries. I am following up that matter on a regular weekly basis and I shall hold a further meeting with the NGOs before my visit to six countries in the southern African region in September.
The noble Lord, Lord St. John of Bletso, and others, referred to transport. The House should know that we have been giving support for the rehabilitation and development of ports and inland transport routes for some considerable time. Over £17 million has been given for the development of Maputo Port in Mozambique and more than £5 million has been given for the repair of Tanga port in Tanzania. Our assistance for inland transport includes more than £30 million for the rehabilitation of the Limpopo and Nacala railways in Mozambique and £14 million for the northern transport corridor linking southern Malawi with the port of Dar es Salaam. If good transport infrastructure is vital in a time of drought it is no less so for the economic development of the region in the longer term. While I cannot discuss the longer term tonight, I expect our involvement in this sector to remain substantial as it is so greatly needed.
The noble Lord, Lord John-Mackie, referred to using food surpluses in drought affected countries. I must caution your Lordships somewhat on this matter. I know the noble Lord, Lord Judd, will support my following remarks. We find that some of the products which we may have in surplus in European countries are simply unsuitable for food aid purposes. We will use food aid from intervention stocks where we can, but it is much better to use food aid funds to purchase food locally where it is available within the same region, or even in other developing regions, because that encourages the regional trade these countries need and it helps to ensure that the food supplied is in line with local preferences. It also avoids distortion in local markets.
The right reverend Prelate the Bishop of Worcester asked me about IFAD and the question of a second special programme for Africa. We have considered this matter many times. When we agreed the first £7 million in 1986 it was on the understanding that that

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was a one-off exercise. It is perfectly true to say that a number of other donors did not even contribute at that stage. Therefore, the programme did not have quite the same role as the aid we are discussing although it was quite successful in its own way. Given that some of the other donors would not contribute again, and given that we believe IFAD's work in Africa should be funded on the same basis as its work elsewhere, we believe we can use the money more efficiently not through a special programme but by adding to other programmes that are being implemented. This is a difficult issue and I shall not go into it further, but I assure your Lordships that it does not mean we shall be spending any less. It means, I hope, that we shall he spending more effectively.
An enormous amount of rehabilitation and recovery will be needed in the years ahead in those countries affected by drought and famine. We are not waiting to do that until we are through this crisis. We are already planning for the years ahead. Comments have been made about the provision of seeds, but we must also consider the provision of livestock. Much of the livestock in those countries has been slaughtered as it could not be fed due to the shortage of grain. Therefore, it will be a major task to replace that livestock. I have already considered that matter.
Tonight I had hoped to say that agreement had been reached to establish peaceful land corridors that we could use to deliver food in Mozambique. Discussions are continuing in Rome and they will continue into the night. I am hopeful that we shall reach some agreement because until there is peace in Mozambique there is no hope of feeding not only the people of Mozambique but also the people of the landlocked countries such as Malawi, Zimbabwe, and even Zambia, to the extent that is needed. Above all, peace is needed in Mozambique. We shall continue working, as we have done over a long period, to achieve that peace.
Southern Africa is facing its greatest hardship this century. We will do everything in our power to make sure that we help the countries of southern Africa through this crisis. We shall also ensure that we take the necessary action to help prevent such a crisis occurring in the future. We must ensure that we develop an ability to deal with these crises more effectively in the years ahead.
Lord Hatch of Lusby: My Lords, as we have a few minutes to spare I hope the Minister will clarify what she had to say about seasonal climate forecasting. Does her department support and help to finance that forecasting because, if the geologist I referred to is correct in his forecast, the preparation for the drought could have started six months earlier? Can she tell the House, and if she cannot do so now will she write to me to let me know, what is the position of her department on seasonal forecasting?
Baroness Chalker of Wallasey: My Lords, we are already helping in the way the noble Lord described. I shall write to him in some detail. I find that some of what he said in his contribution does not accord with the information which has been given to me by
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well-experienced scientific officials. I believe that we have done much, irrespective of whether or not we had had earlier warning.
8.20 p.m.
Lord Judd: My Lords, I am sure that everyone who has participated in the debate will want to thank the Minister for the characteristically constructive and conscientious way in which she replied to the points that have been made. I believe that two features have always marked her work in this sphere. One is that she listens and the other is that she cares. It is particularly to be noted that she made a special effort to return from her international responsibilities to be with us this evening. We appreciate that.
I should also like to thank those who participated, because it has been a deeply concerned debate. In thanking them I should like to say that I am glad that the Minister referred to the NGOs, because I believe that we heard the NGOs very clearly, both directly and indirectly, in this debate. We are grateful to them for their insight and professionalism. I support what the Minister said. It is also important to remember that those who work very bravely and consistently with those organisations and the countless thousands of British citizens who support them with record sums in the midst of recession do not do so in place of a national commitment but as a spur to a national commitment. Therefore, the very success of that work is a reason why we look unashamedly to the Government to do more. We support the Minister in all the battles which we know she has on that score.
I am glad that in the debate she mentioned frankly the political dimensions of South Africa as well as the development issues, because the debate has brought out very clearly the interrelationship of the two. In thanking her for her response I believe that we would all say that she will have powerful support from all parts of this House, and certainly from this side of the House, if she takes as an absolute priority now the immense humanitarian urgency of the situation in southern Africa, leaves no stone unturned to get the EC collectively mobilised as well as the international community, and does not mince her words in arguments with colleagues in this Government about the resources that are needed to do all that is necessary.
I conclude with this thought. As has been said, we live in a media age. This country has had it if we as political practitioners succumb to the ghoulish priorities of the media. News is so often where the cameras are, and the cameras too frequently are where the dying occurs. I believe that all those working in the media, and all news editors, have to ask themselves why it is, if they want a place in civilisation, they cannot put equal emphasis on preventing the crisis before it occurs as distinct from covering the death and disaster once we have failed to act in time. As the right reverend Prelate said, we stand or fall together. I believe that if we do not respond to what we know is happening in southern Africa we undermine the moral fabric of our own society. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Civil Rights (Disabled Persons) Bill [H.L.]
8.23 p.m.
Report received.
Clause 6 [Provision of goods and services to qualified person with a disability]:
Lord Monson Lord Monson moved Amendment No.1:
Page 5, line 17, leave out from ("hotel") to end of line 18.
The noble Lord said: My Lords, as I explained to the noble Baroness, Lady Lockwood, earlier today, I was unfortunately unavoidably absent during both the Second Reading and Committee stage of the Bill. Therefore, I hope that my intervention at this relatively late stage will not be interpreted as being discourteous to those who take a great interest in the Bill. It is certainly not intended to be.
I have strong misgivings about the Bill as a whole. Not only is it yet another example of coercive liberalism, as I term it, but if passed it would have the added disadvantage of importing extreme subjectivity into our law. That is no doubt why this Conservative Government, which is by no means averse to coercion in other fields, are so decidedly lukewarm about the Bill. How on earth are any two people going to be able to agree on "undue hardship" or on what would "unduly prejudice the operation" of a business? The lawyers would have a field day, or a series of field days. However, that is perhaps a matter best discussed at greater length at Third Reading.
In the amendments which I have tabled tonight I want to concentrate on a few aspects of the Bill which seem to me to be especially worrying. They involve personal relationships at potentially very close quarters which might lead to confrontation. It may be convenient if I speak to Amendments Nos.1 and 2 together since they are fairly closely related. In practice they concern mainly the mentally as opposed to the physically disabled.
Your Lordships will be aware of the sort of eccentric one finds all too often on a London bus who alternately mumbles incomprehensibly and then shouts obscenities, usually at the top of his or her voice—more often it seems to be a female—while the other passengers in the bus sit rigid with embarrassment, staring straight ahead to avoid eye contact with the person concerned.
Then there are the more severely disabled people such as one finds at a day center which has opened recently near to our home in London. Some 60 or 65 per cent. of the people are perfectly harmless and innocuous. The remaining 35 or 40 per cent. cannot be so described. They are mainly young people whose problems are attributable to drink or drugs, or so I deduce. They are often extremely aggressive. They walk the streets shouting and glaring at people. I have seen one of them urinating in the street at 11 o'clock in the morning. I am told by shopkeepers that some have urinated in shop doorways, and that others smash windows. I accept that whether or not it is their own consumption of drink or drugs which has brought them to that condition they cannot help it.
Nevertheless, it is an inescapable fact that they do not make life particularly pleasant for other people in the district.
Most of us present tonight can afford to spend holidays in a hotel. Hotels are probably able to cope with such people in the event they should want to use hotels. Most hotels nowadays have private facilities, meals can be served in rooms, and so on. However, boarding houses are very different. Boarding houses have shared bathrooms, and total strangers are obliged to sit next to one another at close quarters at the same table. Do not people, mainly of modest income, who have saved for a quiet holiday, have rights too? It may not happen often, but if they have to be confined at close quarters with people who are aggressive, unpredictable or doubly incontinent, would it not ruin their holiday?
There is also the question of entertainment, which is covered by Amendment No.2. No one would want for a moment to deprive disturbed people of their pleasures. In the days when I used to take my sons to the pantomime many years ago I remember that there were often considerable numbers of educationally retarded people in the audience whose uninhibited pleasure and shouts of appreciation positively added to the occasion and to the pleasure of everybody else, both in the audience and on the stage. The same would presumably apply to the circus, for example.
However, when one is at a non-musical stage play with moments of great dramatic tension, or at a concert featuring a string quartet or a solo pianist, cellist or violinist, very different considerations apply—hence the need for Amendment No.2. It is no good saying that these people are not very likely to go to such events. One cannot frame statute law on the supposition that something will not happen very often. If it happens at all I contend that it is something that has to be dealt with.
Clause 7 does not help to mitigate the situation since it covers only technical and financial considerations. The same applies to Clause 9 since it provides only for the possibility of temporary exemptions not exceeding five years, not permanent ones. This is not something where temporary exemptions would help very much for obvious reasons. What would help would be the importation into Part III of the concept of reasonableness to enable providers of facilities and services without contravening the law to exclude on reasonable grounds not people en bloc but those who look as if they are going to mar the enjoyment of much greater numbers of other people. If that were to be agreed to, perhaps on Third Reading, Amendments Nos.1 and 2 would be unnecessary. For the moment, I beg to move Amendment No.1.
8.30 p.m.
Baroness Lockwood: My Lords, I am very sorry that the noble Lord, Lord Monson, has thought fit to propose amendments to the Bill tonight particularly in view of the terms he has used in relation to the first two. I know that the House will accept his apology for the fact that he was not able to be involved earlier for understandable reasons. Nevertheless, I should like him to note that the Bill has had all-party support in

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this House. It came to us having been initiated in another place, again with all-party support. It has arisen from long discussions with groups of people, some disabled and others concerned to assist the disabled. It seems to me that the two amendments to which he has spoken and the others that he will seek to move take much of the heart out of the Bill in relation to the provision of goods, facilities and services. That would cause great dismay among many disabled people who have been campaigning for legislation to give them the same rights as those enjoyed by people without disabilities.
There exist two pieces of legislation, the Sex Discrimination Act and the Race Relations Act, which have not caused any difficulty. I know that we are now talking about a completely different group of people who have in the past, as clearly indicated at Second Reading, suffered great hardship through discrimination because they have been denied access to certain places. The framework of Clause 6(2) is such that it is intended to provide facilities for access to these places, but it has to be read in conjunction with Clause 7 which makes clear that the modifications and changes necessary to provide such access should be reasonable. In this connection I think the courts would be well able to interpret what was meant by "reasonableness".
The noble Lord, Lord Monson, mentioned the difference between a boarding house or similar establishment and an hotel. I would suggest to him that the problem he has outlined needs to be dealt with by different means; that is, assistance to the young people whose habits he described. If he were to press his amendment it would exclude not only such people but all people with disabilities; it would have a much wider effect than he suggested. I do not think it would deal with the problem he has in mind, because boarding houses and any such organisations often accept applications for accommodation not knowing the kinds of persons they are dealing with. All of us in all kinds of contexts have had examples where perhaps we would rather have sat next to somebody other than the person we were sitting next to. The amendments to which the noble Lord, Lord Monson, has spoken remove the dignity from disabled persons which the Bill is designed to help restore.
Lord Renton: My Lords, this is the first time I have addressed your Lordships on this Bill, which I consider to be overdue. As to the case put forward by the noble Lord, Lord Monson, I would say that subsections (1) and (2) taken on their own would be totally unworkable. But, as the noble Baroness, Lady Lockwood, said, they have to be regarded in the light of Clause 6(3) and the test of reasonableness as applied by Clause 7. With that qualification in mind, I think it would be wrong for us to strike out the words "boarding house or other similar establishment" in subsection (2) (c) and the words "entertainment, recreation" in subsection (2) (g).
I know from the experience of having a severely handicapped daughter that although she cannot speak and entertain other people much, unless they know her very well, entertainment and recreation add a new
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dimension to her sad life. To strike out "entertainment, recreation" would be very unfortunate. I sincerely hope that the noble Lord, Lord Monson, for whose initiative I so often have high regard, will not press the two amendments.
Lord Rix: My Lords, I find the logic governing the amendments moved by the noble Lord, Lord Monson, extremely interesting. I am surprised that they do not go even further to exclude other groups from accommodation, entertainment, clubs, and so on. How about those over 65 with incipient or actual disabilities of age? I fear that might exclude many of your Lordships' House, including myself. What about overweight people who take up too much room in theatre seats or ruin a landlady's mattress in many a boarding house? I am sure that the noble Lord was testing your Lordships' collective sense of humour. I cannot believe that these amendments were moved without the noble Lord's tongue being firmly rammed in his cheek; otherwise, they should he rejected with the contempt that they deserve.
Lord Auckland: My Lords, as the noble Baroness, Lady Lockwood, said, this is an all-party amendment. With his considerable legal experience, my noble friend Lord Renton put his finger on the point. I happen to have family in the hotel and catering industry. There are old establishments which are difficult to adapt for disabled people, whether those people are physically disabled or mentally disabled. However, I should point out that it is now compulsory to have fire doors in hotels. I am not sure of the position in boarding houses.
Adapting such places for the disabled is not as difficult as it seems. In cases where architecturally it is very difficult to make allowances for the disabled, subsection (3) gives some leeway to local authorities or others who are responsible for adapting those places.
Nowadays more and more people are becoming disabled because they are living longer. It seems to me that the amendment would bar not only many young disabled but also elderly disabled. After all, as I mentioned at Second Reading, some of those people may have become disabled through war injuries received while serving their country. Are those people to be excluded? The amendments of the noble Lord, Lord Monson, seem to me at any rate to have that effect.
There are difficulties and not every establishment can immediately provide such facilities. I hope that the House will not accept these amendments, even at this late hour. Whatever deficiencies the Bill may have, I believe that Clause 6 in the main is a very practical clause.
Lord Rochester: My Lords, after what has been said by a number of speakers, there is no need for me to add much from these Benches. In his opening remarks the noble Lord, Lord Monson, said that he had considerable misgivings about the Bill as a whole. I am sure he will acknowledge that, as the Bill received a Second Reading, the principle that there should be a curb to discrimination against disabled people was accepted by the House.

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Clauses 6 and 7 have been carefully framed. In my view they take adequate account of the reservations to which the noble Lord gave expression. Indeed, I thought that in his very last remarks he hinted that that might be the case. However that may be, I share the view expressed by several noble Lords that it is important that if at all possible the Bill should go forward with the support of all parties and of the Cross Benches.
In those circumstances, I hope that the noble Lord, Lord Monson, will feel able to withdraw these amendments.
Baroness Darcy (de Knayth): My Lords, when I saw the amendments of my noble friend Lord Monson I thought that they had been formulated on the grounds of cost and not of feelings about how disabled people might behave. Able-bodied people have the right to enjoy themselves unmolested. If someone with a disability was being objectionable he would probably be asked to leave the premises. He would be treated in exactly the same way as someone without a disability because this anti-discrimination is simply on the grounds of a person's disability.
As the noble Baroness, Lady Lockwood, said, the amendments go to the heart of the Bill. Entertainment and recreation are just as important to people with disabilities as to others. Sport in particular is probably even more beneficial to someone who has a disability and who is less mobile.
Does my noble friend Lord Monson recognise that people with disabilities have equal rights? Of course the provision would be subject to the clauses on reasonableness anyway. I hope that he will think about this matter again during the Recess if he decides to withdraw his amendments.
Lady Kinloss: My Lords, I apologise that I have been unable to take part in this debate until now. I am puzzled by the amendments of my noble friend Lord Monson. Surely Clause 6(3) deals with many of his worries. As the noble Baroness, Lady Lockwood, said, Clause 7(1) would certainly help him. I cannot understand his worries.
8.45 p.m.
Lord Carter: My Lords, in speaking to this Bill I shall follow the usual convention on a Private Member's Bill. I should explain that I speak on my own behalf. If a Labour Government had been returned at the last election, we should have introduced a Bill very similar to the one in front of us.
I was struck by a phrase of the noble Lord, Lord Monson, who referred to the Bill as an example of "coercive liberalism". I am not sure whether he is aware of a Bill introduced in America which goes much wider than this Bill; namely, the Disabilities Act, which was introduced by the Bush Administration. The Bush Administration has been accused of many things but I am sure that coercive liberalism is not one of them.
The noble Lord described the symptoms of mental illness and then described people as eccentric. He moved on to speak of delinquents and people suffering
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from problems with drink and drugs. I did agree with one comment of the noble Lord. He said that there are some people with whom one would not wish to be confined at close quarters. He is quite right about that.
The noble Lord also said that one should exclude people who look as if they are going to mar the enjoyment of others. Who decides about that? Who decides that they look as if they are going to mar the enjoyment of others? He also used the phrase "educationally retarded" which I think went out of style a long time ago. He reveals an inability to distinguish between the mentally ill and the mentally handicapped.
To put everything together, I shall restrict myself to saying that if these amendments are accepted, they will be less than helpful. I hope that the noble Lord has taken the feeling of the House and will now agree to withdraw them.
Viscount Goschen: My Lords, when this Bill was considered in this House at Second Reading and during Committee, my noble friend Lord Henley made clear the Government's position. That position has not changed.
The Government have considerable sympathy with the thinking behind this Bill. We recognise that discrimination does still exist, although there is no doubt that considerable progress has been made over the past few years to improve the quality of life of disabled people across the whole spectrum of the activities of everyday life. But we are fully aware that there is still some way to go before disabled people are able to participate fully in an integrated society. The Government continue to take appropriate action to eliminate discrimination on the grounds of disability, including taking legislative action where appropriate.
The Government neither support nor oppose these amendments. We shall of course continue to listen carefully to any points put forward here today.
Lord Monson: My Lords, if this discussion has shown anything, it has demonstrated how extremely subjective is the concept of rights. Many noble Lords take it as axiomatic that the state should not only prevent people from doing harm to others, which is right and proper, but also force them positively to do good. The concept of rights is indeed subjective, and I say so advisedly, because one could theoretically apply the principle to elderly people and people who are below average height and so on and so forth. That has not yet been done and so far as I am aware will not be done.
I say in parenthesis to the noble Lord, Lord Rix, that over the past 16 years or more I have consistently opposed all such legislation, whether it involved religion, sex, height, weight or whatever. I certainly would not dream of singling out disabled people to be treated any differently. I shall keep to my phrase "coercive liberalism". However, the fact that President Bush, heavily influenced by the wave of political correctness sweeping the United States, has supported such a Bill does not prove much. The fact that there is all-party support for the Bill does not mean that it should be automatically rubber-stamped and immune from criticism whether or not such criticism is

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justified. I suspect that there are many people in this Chamber and in another place who tacitly support the Government's lukewarm feelings towards the Bill but are reluctant to say so openly for fear of being branded as hard hearted.
The most interesting contribution was from my noble friend Lady Darcy (de Knayth). If her interpretation were right, and people who behave badly, whether or not intentionally, could be asked to leave premises under the Bill as drafted, my amendments would be totally unnecessary. However, my interpretation does not accord with hers. I have read the clauses several times. They do not seem to indicate that interpretation. Clause 6(3) states:
"This section does not apply where compliance … would be impracticable or unsafe".
Safety does not come into my amendment. Nor does "impracticable". When one refers to "impracticable", one means physical measures such as widening doors and so on. That is my interpretation. If the supporters of the Bill will assure me otherwise, I shall be delighted and gladly beg leave to withdraw the amendment.
Clause 7 refers to the test of reasonableness. However, it does not refer to "reasonableness" in isolation but,
"reasonableness of any modification to rules, policies or practices".
That is an ambiguous phrase. I should be much happier if the provision were redrafted to ensure that the pattern that my noble friend Lady Darcy (de Knayth) suggests will be permissible is beyond doubt.
My amendments were somewhat probing and broad brush. I prefer that the concept of "reasonableness" is made clear beyond doubt in Clause 6 and in Part III. It is not clear at present. However, if those with drafting expertise assure me that it is clear and that my noble friend Lady Darcy (de Knayth) is right in her interpretation, then no one will be more pleased than I shall be. I do not intend to press the amendments. I never did. I have put the amendments forward with the aim of discussing the issue. It would be helpful if those who sponsor the Bill will investigate further the wording of Clauses 6 and 7 to ensure that the meaning imputed to them by my noble friend Lady Darcy (de Knayth) is correct. If so, that will be splendid. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No.2 not moved.]
Lord Monson Lord Monson moved Amendment No.3:
Page 5, line 27, leave out from ("associations") to end of line.
The noble Lord said: My Lords, I feel much more strongly about Amendment No.3. Clubs have never been my scene, as they say, but I have always understood that a club is a club, for which applicants for membership can be accepted or rejected for the most quixotic of reasons which have nothing to do with fairness, balance or any other virtuous considerations since they are essentially private places. That has been the normally accepted attitude throughout the western world for decades, if not for centuries, except in the latterly politically correct United States. In 1976 a passionate opposition within the Conservative Party involved both Back Benchers
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and Front Benchers. It was led by Mr. William Whitelaw (as he then was) and Mr. Patrick Mayhew QC (as he then was) against the Labour Government, who included clubs in their Race Relations Bill. One still waits for the Conservative Party to live up to the principles expressed so passionately in 1976 by repealing that section.
Clubs are not included in either the Sex Discrimination Act or the Northern Ireland religious discrimination legislation. The Bill ought to follow that pattern.
Associations are a different matter because one often needs to join an association for professional purposes. Associations are not private organisations in that sense. But clubs are different. They arc private. If people choose of their own free will to be virtuous and to admit anyone, that is splendid. But in essence clubs are an extension of one's home and people are under no legal obligation to be virtuous about whom they admit into their home. I beg to move.
Baroness Lockwood: My Lords, does the noble Lord realise how limited the provision is? Many people would like to see it go much further. The provision before us is somewhat different from those within the Sex Discrimination Act and the Race Relations Act. Nevertheless, the operative wording is the same.
I again draw the noble Lord's attention to Clause 6(2) which states:
"This section applies to the provision … of goods, facilities and services to the public or any section of the public".
Those words are also in the Sex Discrimination Act and in the Race Relations Act. They have been the subject of court cases. Indeed, there was similar wording in the 1976 Race Relations Act; and a House of Lords case in 1973 ruled that private clubs which had membership rules that they enforced would not be covered by the Act. Therefore clubs which operate a formal selection procedure to control their membership can claim that they are private and therefore outside the scope of the legislation. That might cover a number of points to which the noble Lord has referred.
Clubs which are included are those which automatically accept into membership people of certain categories such as those with certain qualifications or interests or anyone working in a particular company or area. Such clubs cannot claim to be private and are therefore included within the terms of the clause. I hope that the noble Lord will have second thoughts on the amendment.
9 p.m.
Lord Renton: My Lords, subsection (2) (j) in itself looks terribly wide in its application. Indeed, if one looks at in its most absurd expression, for example, the word "club" includes the Athenaeum, which is a club for the intellectual elite. I cannot imagine anybody with a learning difficulty being elected to the Athenaeum. If we were to leave that phrase in paragraph (j) as it is, it would be an absurd provision to have in a Bill.
However, we do not leave it as it is because subsection (3) has in the second line the word

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"impracticable", which covers the application of what has gone before. Therefore, I believe that the fears expressed by the noble Lord, Lord Monson, are not justified.
Lord Monson: My Lords, I am grateful to the noble Lord for his intervention but I still contend that the word "impracticable" is somewhat too subjective.
I am rather more heartened by what the noble Baroness, Lady Lockwood, said. If I understood her correctly, she implied that the wording in this clause is comparable to that in sex discrimination legislation, which covers only clubs which are generally open to everybody and is not comparable to that in race relations legislation, which goes further.
Baroness Lockwood: My Lords, both Acts are similar in scope.
Lord Monson: My Lords, I am afraid that they are not because there has been a recent case in North London where clubs have been told that they must elect certain people, whether or not they want to. That does not apply as regards sex discrimination legislation because there has been the recent case of the Garrick Club, which attracted a great deal of publicity. I accept that clubs which are more in the nature of associations but which call themselves clubs should be included in the Bill, if we are to accept the general premises of the Bill. With the assurance given by the noble Baroness that this follows the Sex Discrimination Act, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 [Enforcement of Part II]:
Baroness Lockwood Baroness Lockwood moved Amendment No.4:
Page 6, line 33, leave out ("an order") and insert ("a recommendation").
The noble Baroness said: My Lords, in moving Amendment No.4, I shall speak also to Amendments Nos.5 and 6.
In Committee I put forward a number of amendments to place disabled people who were discriminated against in the field of employment on the grounds of their disability on a similar basis to those who were discriminated against on the grounds of race or sex, in the sense that the latter two categories can pursue their cases through industrial tribunals. However, my amendment went somewhat further than the provisions of the sex discrimination legislation and the race relations legislation, as I indicated at cols.846 and 847 of Hansard on 1st July.
The amendments were in line with suggestions by the Equal Opportunities Commission for amending the Sex Discrimination Act. They would have simplified procedures and strengthened the position of tribunals vis-à-vis county courts. In my view, they were and still are desirable amendments. However, the noble Lord, Lord Campbell of Alloway, whose experience both in the operation and in the drafting of law is much greater than mine, intervened in the debate and suggested that the amendments were objectionable on the grounds that they would have
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consequential effects on other statutes, and in particular on the statute conferring jurisdiction on industrial tribunals.
In subsequent discussion with the noble Lord, it emerged that a Private Member's Bill such as this would not be the proper mechanism to bring about such far-reaching changes. Therefore, these amendments are much more limited and would bring the provisions of the Bill back into line with the provisions of the Sex Discrimination Act and the Race Relations Act, in that employment cases would appear before industrial tribunals but the procedures for those cases would be just the same as they are at present.
This amendment may not go as far as some, including myself, may wish. However, it ensures that the industrial tribunals will be the appropriate means for dealing with discrimination in the field of employment for those who have been discriminated against on the grounds of disability. I hope that there may be other channels which can ultimately bring about the effect of my original amendment. However, this evening, I beg to move Amendment No.4.
Lord Renton: My Lords, at first sight, to insert in the Bill the word "recommendation" instead of "order" looks as though we shall enact something which is not enforceable. However, as I understand it, the noble Baroness has covered that point by subsection (6), which alters subsection (3) as it stands at present in the Bill and deals specifically with the problem of failure to comply with the recommendation. That provides a means of enforcement.
Therefore, although I was rather hesitant about this group of amendments, I concede that there would not be the problem which occurred to me at first sight.
Baroness Lockwood: My Lords, I am glad to hear the comments of the noble Lord, Lord Renton, on this matter. Perhaps he and I might discuss the situation to see whether we can bring about the elements of the amendment by other means. I hope that the House will accept the amendment as it is tabled. I beg to move.
On Question, amendment agreed to.
Baroness Lockwood Baroness Lockwood moved Amendment No.5:
Page 6, line 34, leave out ("and necessary").
On Question, amendment agreed to.
Baroness Lockwood Baroness Lockwood moved Amendment No.6:
Page 6. line 38, leave out subsection (3) and insert:
("(3) If without reasonable justification the respondent to a complaint fails to comply with a recommendation made by an industrial tribunal under subsection (2) (c), then, if they think it just and equitable to do so—

(a) the tribunal may increase the amount of compensation required to be paid to the complainant in respect of the complaint by an order made under subsection (2) (b), or

(b) if an order under subsection (2) (b) could have been made but was not, the tribunal may make such an order.").

The noble Baroness said: My Lords, I have already spoken to Amendment No.6. I beg to move.
On Question, amendment agreed to.
Lord Monson Lord Monson moved Amendment No.7:
Page 7, line 8, leave out subsection (3)
The noble Lord said: My Lords, most of us over the age of 45 or 50 were brought up in an era where teasing, taunting and name calling were rife among young people of school age. If we had all been given financial compensation every time our feelings had been hurt, we would all be multi-millionaires.
The provision introduces an undesirable transatlantic litigious atmosphere into our affairs. Having said that, I recognise that comparable legislation containing identical provisions is already on the statute book. I therefore do not believe it is appropriate to press the amendment tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

PDSA: Recruitment Policies
9.10 p.m.
Lord Molloy Lord Molloy rose to ask Her Majesty's Government whether they will investigate the current recruitment policies of the People's Dispensary for Sick Animals.
The noble Lord said: My Lords, my Question is mainly concerned with the People's Dispensary for Sick Animals, which is a registered charity. I must declare that I am involved with the all-party Blood Group; I am an associate member of the British Veterinary Association; I am a member of the International League for the Protection of Horses, which is run so ably by Colonel George McStephen, OBE.
I must remind the House that the PDSA was founded in 1917 by Maria Dickin for the treatment of sick and injured animals of the poor. It has done remarkable work. The caravan dispensaries worked wonders. Since then it has done remarkably well in helping poor people. I must say also that I am involved with the RSPCA and the RSPB. I am involved in fundraising for the People's Dispensary for Sick Animals in Swansea, helped by the noble Lord, Lord Swansea. We succeeded in collecting sufficient money for the PDSA to create in Orchard Street in Swansea a big blue shop front which became extremely well known. Unfortunately it was bombed to bits during the war and recently a new one was created.
I must say also that my debate relating to the threat to Edinburgh University Veterinary School, contributed to by the noble Baroness, Lady Robson, the noble Lord, Lord Kimball, my noble friend Lord Cledwyn and wound up by the noble Lord, Lord Henley, did a great deal to save the vet school, which was important also to the PDSA.
Those of us interested in animal welfare were disturbed to learn that the People's Dispensary for Sick Animals had serious financial problems. We decided to apply for membership. Cheques were included with our applications and the applications submitted to the Director General, who wrote a most courteous letter to me pointing out what we needed to do to become a member. I followed the instructions, as did many others. We waited for some time and then all
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received a letter saying—I ask the House to listen carefully—that the PDSA no longer accepts applications for membership. Yet it is up to its eyes in debt!
We found that quite remarkable. Many applicants were spurred on by the fact that the PDSA was short of funds and had done magnificent work. We felt that we should give an example by sending our cheques and applying for ordinary membership. I was one, as a Peer of the realm. There was Mr. Tom Maclnnes, the former PDSA chief vet for Scotland; there was Mr. Walter Beswick, a former president of the BVA and Professor James Armour, Dean of the University of Glasgow Veterinary School.
We were all rejected. I was informed it was because of our association with the British Veterinary Association, which had done so much for the PDSA and often featured it in the BVA journal. We found it somewhat distressing and decided to examine a number of matters. Incidentally, everyone who made application but me was a Scot. I hope that there is no racial issue involved in the PDSA refusal. The Scots will soon get rid of it if there is.
Mr. Tom Maclnnes was a senior PDSA vet and the senior organiser for Scotland for the PDSA. He was also a PDSA pioneer group guild organiser for 40 years in the service of the organisation. He was senior to all the people who now sit on the present council.
I understand that he was nominated by Sir John Banham and Mr. John Butterfill, MP. When the council examined this nomination it must have meant that Sir John Banham and Mr. Butterfill did not stick by their word and did not support Mr. Tom MacInnes. Since then he has received a letter from Rear Admiral Sir John Garnier, KCVO, CBE, who is the private Secretary to the Patron. The Admiral said:
"The [Patron] was saddened to hear of your disappoint-ment that your application for Membership of the PDSA was not accepted, and also of your disenchantment with the present financial policy of the Society. The [Patron] has been aware from letters she has received of the difficulty that the recent restrictions in treatment might have meant",
for the PDSA. It is hoped that there will be new thoughts about his acceptance.
We hoped that the fund for the PDSA was going to be increased by the launch of a balloon race in Trafalgar Square. Mr. John Bower, the president of the British Veterinary Association, on that day made an emergency call to me at this House asking if I. would help them because no one from the PDSA had come. None of their council members attended except for Mr. J. S. Hough, the director of public relations. It was a very difficult situation. I went there with my PA and Mr. John Bower. With a great deal of hard work we managed to get the balloon off the ground and the enterprise was a success.
I have also received correspondence from very distinguished people such as Mr. D. L. Haxby, CBE, MRCVS. In a letter to me he states:
"I have made extensive inquiries about this matter and it does appear that there is a form of membership of the PDSA which is limited by an inside form of self-perpetuation of the members and constitution of the management committee. It almost appears to be a secret society".

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That is a letter from a very well-known and distinguished vet about which we felt some concern. Therefore, we decided that we had to do something about the matter.
There was a recent speech to the British Veterinary Association by the chairman of the PDSA, Mr. Francis Butters. It is on the record of the British Veterinary magazine. Mr. Francis Butters outlines the precarious financial situation of the PDSA. A vast number of poor people were prevented from receiving help. Because the financial situation is so bad help can only be given to those who are really poverty-stricken.
We could not understand why a number of distinguished people sent cheques to the PDSA, having been encouraged to do so, but were rejected. The director general had outlined what was to be done. He said that membership could be obtained by sending only one shilling. We submitted very much more than a shilling. Noble Lords can therefore imagine how angry we were when we had letters saying that no more people were to be allowed to join the PDSA.
From investigations which we made, it was discovered that the real crime was that we were all, somehow or other, associated with a vet or the British Veterinary Association. Therefore we were ineligible. Among the ineligibles was included Miss Cherida Hopper of Bristol University Veterinary School. She is in charge of the school's feline centre, which is a clinic dealing with research into the FIV infection. Another ineligible person was the noble Lord, Lord Soulsby of Swaffham Prior, who is one of the United Kingdom's most distinguished vets and a man very much honoured in this House. Others were Mrs. Judy McArthur-Clark, president of the Royal College of Veterinary Surgeons, and Mr. J. H. Baird, who is the chief executive member of the association itself.
Perhaps noble Lords will listen to this: there are 24 Members of Parliament, one Cabinet Minister, seven noble Lords, four MEPs, a Shadow Cabinet Minister, my noble friend Lord Cledwyn, the Leader of Her Majesty's Opposition and, possibly, the noble and learned Lord the Lord Chancellor, none of whom can apply for membership of the PDSA because they or a son or daughter are honorary members of the British Veterinary Association. We believe that this situation needs to be examined.
Since we made these investigations some other matters have come to light. For example, we have been informed that the finances and the accountancy arrangements are in a pretty serious situation. The society has 50 vet centres,70 retail shops and 14 appeals offices. These cost a great deal of money to run. The late director of the PDSA finance—he is not dead, but he simply packed in the job because he could not stomach it any more—was deeply concerned at the accounting and reporting system. It was in very poor order. There was a turnover of £18 million and net assets of £43 million. The criticisms of the director of finance were rejected by the council, so he resigned. What had he done? What was he about to expose, we wonder. We hope that the Government will take it up.
The only guide to a collective organisation is the collective conscience—in this case of the PDSA's council. The only shield to the PDSA's memory is its rectitude and sincerity of honest behaviour. I have to say—and I am sad to have to say it—that my last words have to be in this context. These vital desiderata of decency are absent at the governing levels of the PDSA. A full inquiry is required to restore them and so recreate the dignity and honour of a most notable organisation which has somehow or other gone right off the rails and is behaving in a manner which is not merely authoritarian but in no way acceptable to any democratic society.
9.20 p.m.
Lord Morris of Castle Morris: My Lords, those of us who had the duty and privilege of serving on the Committee of your Lordships' House which considered the Charities Bill last year recall very well that there are hundreds of thousands of registered charities in the United Kingdom and that the overwhelming majority of them are totally unknown to the person on the Clapham omnibus.
The People's Dispensary for Sick Animals, however, is not one of those. Despite the modest words of its chairman at the British Veterinary Association Congress last September when he said,
"We're not glamorous, we're not on TV, nobody wants our autographs—except sometimes on cheques",
people have heard of the PDSA, and its large-scale and widespread activities are legitimately matters of public interest and concern. We are all, I am sure, grateful to my noble friend Lord Molloy for bringing them before your Lordships' House this evening and for raising, in his characteristic and inimitable way, questions of importance which are of deep concern to him.
I stress that the PDSA is a well-known and respected public charitable institution in this country. As my noble friend has pointed out, this is possibly due to its almost fairy tale origins in the work of Maria Dickin, a daughter of the manse born in 1870, who during a selfless career as a social worker in London's East End founded the dispensary in 1917 out of her burning compassion for the ill-treated animals mostly donkeys, ponies and horses at that time—for whom no one else seemed ready to care. In her book The Cry of the Animal published in 1941 she wrote:
"The suffering and misery of these poor uncared-for creatures in our overcrowded areas, was a revelation to me. I had no idea it existed and it made me indescribably sad".
Clearly, there was an urgent need for action to remedy a situation of Dickensian or almost Chekovian severity and, equally obviously, that treatment had to be free. It was from those dramatic, emotional beginnings in a 13-foot square cellar in Whitechapel, rooted in true charity and unselfish idealism, that the PDSA began its life and its problems.
It is no surprise then to find that the PDSA grew and flourished and maintained, so far as it possibly could, its ideal of a free service—free at the point of use, if I may use that phrase—for the animals of those who genuinely could not afford to pay the normal

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veterinary fees. Let us hope tonight that the Government will be able to say with conviction,"The PDSA is safe with us".
There are now no fewer than 50 veterinary centres located in areas of high population density, together with Pet Aid Services which operate in a further 64 communities. In 1990 the PDSA carried out 1.4 million treatments at a cost to the society of over £13 million. At present the average donation is 77p and the average cost of a single treatment is £8.05. Its original commitment to providing a free service has had to be mitigated because in these difficult financial conditions in which we live the PDSA receives no state aid whatsoever and is entirely reliant on its capital funds, its donations, endowments and bequests.
This places the society in a most delicate and difficult position among charities, and one which requires the most careful, responsible and skilful financial management, including an almost prophetic requirement to forecast accurately the movement of its income year by year, and balance this against its constant requirements for skilled—and expensive—veterinary staff, drugs, suitable premises and purchases of modern equipment. The PDSA is a very large employer of veterinary surgeons and ancillary staff, and salaries and costs under this budget head are notoriously difficult to predict with accuracy but utterly essential to pay at the end of every month. Prudent financial management is thus of the very essence in the total management role. My noble friend is quite right to draw our attention to the PDSA's finances.
I have looked, albeit briefly, at the latest available set of accounts, although naturally a statement of accounts is no more than a snapshot of the state of financial affairs, and one would need to compare one year with another and analyse trends and flows more closely than I have been able to do if one were to be able to feel fully confident about any institution's financial health. Nevertheless, the society appears to have very substantial reserves, of the order of some £20 million, and it is against this that the drop in income from donations and bequests over the past two years should be seen.
With that having been said, however, last year's deficit of some £1 million is serious, and it will behove the society to look to it with immediate concern. I understand that steps have already been taken, including the tightening up of the almoning rules, to remedy this state of affairs; but the society must be aware that many of us, including the Charity Commissioners, will be watching most carefully to see that the very compassionate and charitable rules under which it operates do not (in these harsh times when market forces rule and strict accountability is in force) bring its finances into an undesirable state. It may rest assured that my noble friend Lord Molloy will be watching its financial performance with hawk-eyed vigilance, and it will do well to take heed of the criticisms he has made.
If the society operates under very demanding financial conditions, it must also be said that it seems to have unusual and perhaps curious by-laws concerning membership, and these, too, have caused
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my noble friend some concern. As I understand it, the People's Dispensary for Sick Animals Act 1949 lays down in Section 16(1) that:
"The Council shall have power from time to time to make, alter and revoke by-laws with respect to the management of the Society".
The resulting by-laws contain six clauses on "Members" which lay down, inter alia, that,
"No person shall he admitted a member of the Society unless he is first approved by the Council and the Council shall have full discretion as to the admission of any person to membership".
That comes from PDSA by-laws, No.3.
This and other clauses on the constitution of the society's council seem to arrogate considerable power and authority to the council, but all its powers are derived directly from the 1949 Act, and, although some might think that the council may have acted ungenerously in considering recent requests for membership, it would be difficult to sustain a charge that it had acted illegally or even improperly. It may be, however, that it would be well advised to take a look at the legislation which governs it, especially the by-laws, with a view perhaps to revising some of its requirements in a more liberal and inclusive direction.
That might be felt to he a conciliatory gesture, though in fairness it has to be said that by the time of the last meeting of the council, on 14th May, there had been no complaints registered against rejection by those who had recently applied for membership. Among that group were, I believe, a number of most eminent practitioners of veterinary science, and it might seem that they were eminently desirable as members of the PDSA. But the society seems to have felt—and the case is at least arguable—that, as one of Britain's's largest employers of veterinary practitioners, it should not itself be governed by vets. The arm's length, or in this case, I suppose, one could say, paw's length principle, might seem, in the circumstances, not inappropriate.
Lord Molloy: My Lords, I am sorry but I must interrupt my noble friend for one moment. We must note the fact that there is a very great difference. If anyone joins the society he will be an ordinary member. Only the council can make him a member of the ruling body; that is, the council itself. On that basis, those concerned have stopped any soul in Great Britain from being a member of the organisation, despite the fact that it is up to its eyes in debt—or, at least, it appears to be.
Lord Morris of Castle Morris: My Lords, of course the society is in charge of its own rules of membership. However one may feel about that, I should imagine that it is impossible to make any particular difference without legislation. But it may be that my noble friend has legislation in mind.
The PDSA, like many other charities in these uncharitable times, is obviously going through a difficult period. It may be that there are stormy waters ahead of it even yet and it would do well to pull down its sou'wester and see to it that all the hatches are battened down. I support entirely the insistence of my noble friend Lord Molloy that this charity, like all charities, must uphold the highest standards of public

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probity and conduct and we must all be grateful for his vigilance in inquiring whether or not the noble ideals of the PDSA's founder are being upheld today. I await with great interest what the noble Baroness who is to reply has to say. Of course, it is entirely a matter for Her Majesty's Government what action, if any, they decide to take. I am sure that my noble friend will receive her remarks, as I hope he will take my own, with his customary courtesy and charity.
9.32 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, the noble Lord, Lord Molloy, has raised an interesting issue tonight. I am glad to take part in the debate. As the noble Lord reminded us—as, indeed, did the noble Lord, Lord Morris of Castle Morris—charities, both large and small, play a vital part in the life of our nation. It is perhaps often easy to forget that many of the major services which we take for granted today, whether they be of health, education or social welfare, were built on foundations laid down over many years by concerned individuals who gave of their time and resources, not because they were required to do so, but, voluntarily, for the good of their communities. Charities now engage in an enormous range of activities; they affect all our lives. Some have few funds with which to operate, others are substantial multi-million pound international corporations.
The charitable sector is growing—and growing fast. That is a tribute to the good will of the individuals involved and to the generosity of the general public who give so unstintingly. The Government believe that, if the sector is to continue to grow and play its full role, charities must be well managed and seen to be so, their trustees fully accountable and concerned to apply the highest standards of stewardship.
With those aims in mind, a complex legal framework has been built up over many years to ensure that money donated for charitable purposes is used wisely, honestly and well. The Charity Commissioners play a key role for it is they who are charged with the task of supervising and monitoring charitable activities and with investigating abuse—a fact recognised in the new the very new—charities legislation. The Charities Act 1992 was designed in part specifically to give the Charity Commissioners sharper tools—and more of them—with which to supervise and investigate charities, to identify abuse at an early stage, and to remedy it quickly and effectively wherever found.
The noble Lord, Lord Molloy, has told us of his concern at some of the PDSA's internal practices and has asked if the Government will intervene and investigate his complaints. I have to tell him that it is not open to me to take such action. My right honourable friend the Home Secretary does have general responsibility for the reform of charity law and, indeed, for the overall efficiency of the Charity Commissioners; but he has no powers to intervene in
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the day-to-day conduct of a particular charity's affairs nor, indeed, in the day-to-day administration of the Charity Commission.
It is, as I have said, for the Charity Commissioners to investigate the conduct and administration of individual charities. But it is for the commissioners to decide whether they will exercise their powers in any particular case.
I understand, of course, the noble Lord's anxieties and that he feels that something must be done. I shall ensure, therefore, that the commissioners are made aware of all that he said this evening. I urge him, however, if he has any other information which he thinks would be useful to the commissioners when they look at the points he has raised, to lay it before them as soon as possible.
As to whether the commissioners can act in the situation which the noble Lord describes is of course for them to decide. However, perhaps I should explain that the trustees of all charities are bound by the terms of their governing instrument (their trusts) and by the general law. Provided that they keep within the law and the terms of their trusts the commissioners cannot properly intervene in matters which fall to the discretion of the trustees.
Not all charities have a membership in the well-understood sense. Where they do, the admission of individuals to the membership and the powers and rights, if any, of members once admitted, the provisions for the conduct of meetings and so forth are always governed by the terms of the charity's trusts.
Where the trustees of a charity are given absolute discretion as to who may be admitted as a member, then obviously it is for them to exercise that discretion as they see fit. But neither my right honourable friend the Home Secretary nor the Charity Commissioners have power to intervene in the trustees' lawful execution of their discretion.

Tribunals and Inquiries Bill [H.L.]
Returned from the Commons agreed to.
River Humber (Upper Pyewipe Outfall) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.

Human Fertilisation and Embryology (Disclosure of Information) Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-four minutes before ten o'clock.