Lords Sitting of 4 March 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 Sheffield.
Lord Lucas Lord Lucas— Sat first in Parliament after the death of his mother.

Mental Health Act: Training for Practitioners
Lord mottistone Lord mottistone asked her majesty's government:
whether they are satisfied that psychiatrists, general practitioners and social workers are receiving adequate training in the provisions of the Mental Health Act 1983.
Baroness Denton of Wakefield: My Lords, the Government are satisfied that the training needs of psychiatrists, general practitioners and social workers having responsibilities under the Mental Health Act 1983 are being adequately met. We shall continue to seek such further improvements as experience suggests are necessary.
Lord Mottistone: My Lords, is my noble friend fully satisfied that the psychiatrists and particularly the GPs receive adequate instruction on the 1983 Act, in particular on the recently amended code of practice?
Baroness Denton of Wakefield: My Lords, the training of those groups is carried out under their professional bodies. We have every reason to believe that they are fully briefed on the Act, on the code and on the circular amending it.
Lord Ennals: My Lords, what makes the Minister feel so confident? Has she seen the comment of the Mental Health Act Commission that it:
"remains extremely concerned about the apparent lack of knowledge amongst doctors and other health professionals about the consent to treatment provisions in the Mental Health Act"?
What training do general practitioners and psychiatrists receive on that part of the Act?
Baroness Denton of Wakefield: My Lords, it is part of an extremely extensive programme in which doctors are expected to have had three years' post registration experience and at least six months' full-time psychiatric experience. Forty per cent. of trainees in general practice have had six months' experience as a senior house officer, which means that they must be well aware of the Act.
I remind the noble Lord that in support of my noble friend Lady Hooper he drew attention to further assistance and said that since the adoption of the code of practice:
"I am informed that officers of MIND have travelled up and down the country advising social workers, doctors and nurses on the terms of the code".
We are grateful for that.
Lord Thurlow: My Lords, is the noble Baroness aware of the recent Audit Commission report published about a fortnight ago which is totally at variance with which she has just told the House? The commission judges that there is a widespread lack of understanding on the part of staff at all levels, including GPs and others in the district health authority, of what are the Government's excellent objectives. The commission predicts chaos in April 1993 unless urgent additional steps are taken to train staff and in particular to select and train effective care managers.
Baroness Denton of Wakefield: My Lords, I reply to the noble Lord by quoting from the Audit Commission report which states:
"The process is only now starting and it is not yet possible to describe the full implications. At present it is easier to outline the problems than the solutions".
However, the Audit Commission's press release stated:
"considerable guidance has already been provided by the Government on the implementation of the Act".
Lord Winstanley: My Lords, am I right in believing that the National Schizophrenia Fellowship has sent to the department details of a whole number of cases in which patients have been let down and have suffered as a result of a lack of knowledge of the Mental Health Act 1983 either by general practitioners or by social workers?
Although it is not easy to reach GPs, particularly elderly ones, surely we can give adequate training to social workers, especially those who have to deal with the mentally ill, to make sure that they are fully aware of all the provisions of that very important Act. It is obvious that many are not now adequately trained.
Baroness Denton of Wakefield: My Lords, the department has reason to be very grateful for the constant help which it receives from the fellowship which has drawn points and cases to its attention. That has been of great assistance. The Government are aware of the need to train social workers. In 1992–93, £29 million will be spent on training local authority social workers. In the past three years the total amount of spending has risen by almost 100 per cent.
Baroness Faithfull: My Lords, I refer to the statement made by the noble Lord, Lord Winstanley, about the assessment of social workers who have pursued the 60-day course laid down for the training of social workers who are to be mental health officers and psychiatric social workers administering the Mental Health Act. Is it not true that in 1986 the 60-day course was started and that the Council for Education and Training in Social Work wished the social workers to be assessed as being satisfactory to carry out the work, but that NALGO—the trade union concérned—stood in the way of that arrangement? Is my noble friend aware that NALGO opposed it and that the Minister of the day supported NALGO? If the social workers are not assessed, can my noble friend say how we are to know that they are the best people to carry out that work?
Baroness Denton of Wakefield: My Lords, the Council for Education and Training in Social Work approves the programme and monitors the standards of the courses for approved social workers and, as they are called in Scotland, mental health officers. It is for the local authorities to satisfy themselves that social workers have reached a satisfactory standard before approval. I am sure that noble Lords will be pleased to know that the council is currently reviewing the regulations for the training of social workers who seek approval.
Lord Ennals: My Lords, I am most grateful to the Minister for quoting my very wise words. I ask her to read them again. She will discover that I was talking about the training of social workers. At that date the Mental Health Act Commission had not made its report which explicitly relates to psychiatrists and general practitioners. I hope that the noble Baroness will address her mind to that part of my original question.
Baroness Denton of Wakefield: My Lords, all training schemes in psychiatry are assessed with a view to accreditation by the Royal College of Psychiatrists subject to accreditation being withdrawn if the exacting criteria are not met. Higher professional training includes clinical experience in this area and knowledge of the Mental Health Act. I hope that explanation reassures the noble Lord.
Lord Elton: My Lords, is my noble friend aware that the Government's prompt reaction to the debate on the Motion tabled by my noble friend Lord Mottistone on 16th January, by issuing an amendment to the code of practice, is extremely welcome; as is the massive increase of expenditure on training to which my noble friend Lady Denton of Wakefield has referred?
Baroness Denton of Wakefield: My Lords, I am delighted to welcome my noble friend's comments which are again evidence of the close co-operation of everyone concerned in this area.
Lord Carter: My Lords, is the Minister aware that the Mental Health Foundation estimates that 6 million people—10 per cent. of the population—suffer from mental illness and that all but 60,000 of them are living in the community? Is the Minister also aware that it is estimated that 3.7 million people are deemed to be seriously at risk? Therefore, does the noble Baroness agree that it is vitally important that GPs, social workers and health professionals are fully conversant with the Mental Health Act and particularly with the procedures as regards hospital admission?
Baroness Denton of Wakefield: My Lords, the noble Lord, Lord Carter, draws attention to matters of serious concern which are also recognised by the Department of Health. It was announced in February that a national task force is to he established to further the development of locally-based mental health services. It will be concerned with questions of "how" and not "whether".
Lady Kinloss: My Lords, in view of the advances in the treatment of psychiatric patients, what arrangements are the Government making to ensure that general practitioners and social workers are aware of the latest developments, particularly as their work loads may already be very heavy?
Baroness Denton of Wakefield: My Lords, I am delighted to assure the noble Lady that full arrangements have been made not only by the Government but by the practitioners' own professional establishments.

DES Staff: Teaching Experience
2.48 p.m.
Baroness David Baroness David asked Her Majesty's Government:
How many civil servants of Principal rank and above in the Department of Education and Science have had experience of teaching in schools.
The Minister of State, Department of the Environment (Baroness Blatch): My Lords, to provide this information would involve scrutinising the personal records of about 280 members of staff. This would not be a productive use of civil servants' time.
Baroness David: My Lords, I am very amused though dissatisfied to get the same Answer that received about four years ago when I asked this Question. I should have thought that someone would have learnt to count by now. I cannot believe that it is not possible, with modern methods of treating records, to find out the rather important answer to the question. Why is there this obstinacy and secrecy in the DES?
Baroness Blatch: My Lords, it is neither obstinacy nor secrecy, but out of respect for the confidentiality of the personal records of people recruited into the Civil Service. There is a policy of using generalists in the Civil Service who bring to bear on the work a great deal of variety and experience. It is absolutely essential that they have access to professional advice. In the Department of Education that comes from very many people, including Her Majesty's Inspectorate itself, the National Curriculum Council, the School Examinations and Assessment Council, and many other bodies who can provide very good, sound and expert professional advice.
Lord Irvine of Lairg: My Lords—
Lord Renton: My Lords, is my noble friend aware that if we were to abandon the principle of enlightened, dedicated and well-educated amateurism in the Civil Service and insist on specialised experience, it would be impossible to man the Civil Service at all?
Baroness Blatch: My Lords, I am grateful to my noble friend. I think the suggestion behind this question is that administrators in the Civil Service should all be teachers. But should people in MAFF all be farmers? Should all in the Department of Transport have a direct professional involvement with the service? We have a very good Civil Service that

837
serves us well. The important aspect is that when they are involved in policy-making they have access to good, sound, professional advice.
Lord Irvine of Lairg: My Lords, perhaps I may—
Lord Allen of Abbeydale: My Lords, I too find the implications of this Question rather disquieting. Does the Minister agree, for example, that the fact that Home Office officials have not served as police officers, or sat on the Bench, should not rule them out of advising on police policy or criminal justice?
Baroness Blatch: My Lords, I agree with the noble Lord. It is important that education is not simply about teaching in the classroom. There are many other aspects of education to which it will be necessary to get a much wider range of experience to be brought to bear.
Lord Irvine of Lairg: My Lords, at the third attempt, since all that is being sought is a statistic, what has personal confidential information got to do with it?
Baroness Blatch: My Lords, apart from it being personal and confidential information I said that it would not be the most productive use of civil servants' time. I have to ask noble Lords opposite, to what purpose is the information required? Is it because they believe that civil servants in the Department of Education and Science can only, and should only, have teaching experience?
Lord Mackay of Ardbrecknish: My Lords, does my noble friend agree that it is a silly idea that the administrative Civil Service should come from a teaching background, when the professionals who advise the administrative Civil Service all come from a teaching background? Perhaps the Minister will go a little further with me on that and consider the possibility that those people who have been in the inspectorate for, say, five or six years would be better for a return to the classroom where they might then put their theories into practice?
Baroness Blatch: My Lords, my noble friend will forgive me if I side-step his final point, because that is another Question. However, my noble friend makes an important point. If we have teachers teaching, teachers advising, teachers inspecting, teachers administering, I believe that the teaching policy advice would be the poorer for it. It is the richer for having sound professional advice when it is appropriate, and to temper that with the general expertise of civil servants.
Lord Peston: My Lords, is the noble Baroness aware that one of the things I most like about her is that she always likes to ask questions of this side of the House? I only wish that standing orders enabled one to do that all the time! Is it the Government's view that what would be a very simple task is simply uninteresting? No one is saying that everybody who works at the Department of Education and Science should have some teaching experience. The Question leads on to whether any of the civil servants have such experience. Is the Minister saying that it would be
838
completely uninteresting if we were to discover that nobody in the department had any teaching experience at all? To answer her own question, I have to say that it would be interesting to know how many have had some experience.
Baroness Blatch: My Lords, I am making the distinction between what would be interesting and what would be good use of civil servants' time. I have said that the information is available but that it is in the personal records. It would require going into each and every personal record to gather that information. I can tell the noble Lord that some have teaching experience and some do not. I am asking: what purpose would it serve, other than to be very time consuming and to no productive end?
Lord Airedale: My Lords, despite what has been said, might it not be an improvement if the people who cannot make up their minds whether to call themselves "educationists" or "educationalists" decided to call themselves neither?
Baroness Blatch: My Lords, the question was entirely characteristic of the noble Lord, Lord Airedale. Again, I believe that that is a question for both "educationalists" and "educationists" to respond to.
Lord Glenamara: My Lords, has not the position changed under this Government? The Government have centralised the whole education system. An increasing number of schools are financed directly from the DES and the Government have quite unprecedented powers to interfere in every kind of educational institution from the universities downwards. Therefore, is not Parliament entitled to expect that a fairly large number of the people who are doing this job know what goes on in schools, with their experience there? The Secretary of State does not have a clue about what goes on in schools; but at least we can expect that some of the civil servants who serve him, and who are managing our schools now, do have that kind of experience.
Baroness Blatch: My Lords, the civil servants know a great deal about what goes on in our schools. However, I must say that I disagree so much with what the noble Lord said. This Government have done more than any other to devolve operational autonomy down to where it belongs; that is, to the schools.

British Film Industry
2.55 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What further proposals they have to assist the British film industry.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay): My Lords, at present I have no proposals to announce to add to the assistance which the film industry already receives, worth over £20 million a year.
Lord Dormand of Easington: My Lords, is the Minister aware of the concern that the promising initiative taken in No. 10 Downing Street some two years ago is now running into the sand? In particular, will he say when the DTI working party report is to be published? Is the Minister further aware that the industry is not looking to the Government for big injections of government money but for tax incentives, not least capital allowances? There is no doubt that such changes would bring in a great deal of investment, not only from this country but from the United States. Will the Government look at this as a matter of urgency, especially as last year only 13 feature films were made in this country and so far this year only one is in production?
Lord Reay: My Lords, the noble Lord raises a number of points. The Government give considerable support to the film industry and have assisted the industry in a number of ways since the seminar to which he referred. Last year, for example, we set up the British Film Commission, the aim of which is to attract overseas film production to this country. We also set up the European co-production fund to stimulate the joint production of films with European partners. Some people think that that is the direction in which the film industry might go.
As regards the working party, it is in the process of finalising its report. I hope to receive it within the next few weeks.
Lord Mason of Barnsley: My Lords, is the Minister aware that the British film industry really is in the doldrums now? Is it not sad to note that no films are being made at Elstree and that no feature films are being made at Pinewood and none is on stock? It is obvious that help is required. First, I ask the Minister what more can the Government do to encourage more British investment in the British film industry? Secondly, can they do more to back the British Film Commission in its endeavours to revive the British film industry? Is it being properly financed?
Lord Reay: My Lords, as far as concerns the tax measures to which both noble Lords have referred, that is a matter which must be for my right honourable friend the Chancellor of the Exchequer. I can say nothing about that now, except that he has received representations from the industry. The demise of the British film industry, which both noble Lords have tried to highlight, is greatly exaggerated. Figures published recently by the trade magazine Screen International have indicated that the number of films made in this country, or by British film companies abroad, was 51 last year compared with 39 two years earlier. That suggests that the state of the film industry is not as bad as has been painted and that there are signs that it has been improving recently.
Lord Cockfield: My Lords, does my noble friend agree that tax incentives are government money or, to be more exact, the money of other unfortunate taxpayers?
Lord Reay: My Lords, my noble friend is right. We do not think that taxpayers' money should be spent on
840
encouraging the making of films which nobody wants to see. We do not believe in wholesale subsidies for the film industry or any other industry.
Baroness Birk: My Lords, the Minister said a few minutes earlier that the film industry was certainly not in as bad straits as my noble friends have pointed out. Then immediately, in answer to a question from his noble friend, he jumps in with both feet and makes a general statement about making films that nobody wants to see. That is the sort of discouragement from which the film industry is suffering. Does the Minister understand that that is what concerns us? Does he also agree, and will he confirm, that in the European Community our film-making rivals have managed to overcome many of the problems of finance and investment with government-backed investment and also the fiscal incentives to which my noble friends have drawn attention?
Lord Reay: My Lords, so far as concerns general policy, I believe that subsidies generally are a disincentive to paying attention to the demands of the market and are an encouragement for the making of films which no one wants to see. We have a talented and capable film industry which should be able to attract investors' money to make films which it has persuaded investors people will want to see.
Lord Harmar-Nicholls: My Lords, my noble friend said that 51 British films had been made either at home or abroad. How many have been made in this country? That is what questioners would like to know. Studios have been closed and those are the base of the industry.
Lord Reay: My Lords, I do not think that the figures are available. Certainly I do not have figures exclusively for films made in this country. There are different definitions for British films. Indeed many producers today would not want films to be excluded from the list of British films because they had been made abroad. I remember that "The Third Man", a British film of which I thought very highly, was certainly made principally, if not wholly, abroad. The noble Baroness, Lady Birk, referred earlier to foreign countries' aid to the film industry. Non-English speaking countries are in a different situation from English speaking countries. Their film markets are much smaller than the English speaking market and people want to see films made in their own language. I therefore think that there is less justification and less public support for subsidies in this country than in non-English speaking countries.
Lord Jenkins of Putney: My Lords, is the noble Lord not aware that no one is talking about subsidy for films that no one wants to see? Is it not the case that, if finance cannot be found in this country, films will be made abroad and the money, prestige and so forth for films which are essentially British will then go abroad? I have in mind the films that Sir Richard Attenborough has had to make abroad which could not be made in this country because the money was not here.
Lord Reay: My Lords, a considerable number of films are made in this country. There are plenty of opportunities for more films to be made in this country and I have no doubt that that will continue to happen.

Blue Arrow Prosecution: Cost to Public Funds
3.2 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What was the cost to public funds of the prosecution of four persons connected with Blue Arrow; and whether expenditure of this order is, in their view, in the public interest.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the cost to public funds of criminal proceedings arising out of the Blue Arrow flotation is £2,870,118.61. This includes the costs of the Serious Fraud Office, court time and also some provision for the costs of acquitted defendants. The final costs are not yet known.
It is not possible to separate out the proportion of those costs of four defendants alone.
Where investigation reveals criminal misconduct such that in the opinion of the prosecuting authority the circumstances, including the costs involved in the prosecution, are such that public interest requires the institution of proceedings, it would be wrong to refrain from prosecuting solely on the grounds of costs.
Lord Boyd-Carpenter: My Lords, I thank my noble and learned friend for that Answer. Does it include a suggestion on his part, which I think it does, that it would be right to secure reductions in the costs of court proceedings so that proceedings of this kind can be instituted without imposing a very heavy burden indeed on the taxpayer?
The Lord Chancellor: My Lords, certainly I would welcome any effective steps that could be taken to reduce the cost to the taxpayer of such proceedings.
Lord Grimond: My Lords, arising from the course of the recent trials, will the noble and learned Lord confirm that the defence of stress or premature senility is now available in all criminal trials and is not confined simply to these very lengthy trials for fraud?
The Lord Chancellor: My Lords, I doubt whether either of those is a defence in any case.
Lord Irvine of Lairg: My Lords, is it not a fact that, since the Serious Fraud Office became operational with all-party support in 1988, it has brought 63 cases to trial involving 137 defendants, 94 of whom have been convicted? Is that not on any view a reasonable success rate for the Serious Fraud Office in these serious City fraud cases which must, in the public interest, be prosecuted?
The Lord Chancellor: My Lords, as sometimes happens with figures, there is a possibility of a number
842
of different figures. But I think we are probably agreed that the success of the Serious Fraud Office in its prosecutions has well justified it being set up. I of course would be the last to judge the propriety of prosecution by the success rate of the prosecutor. The job of the prosecutor is to prepare a case and present it fairly. Therefore that must be taken into account. But I believe that with that safeguard, as it were, the figures that the noble Lord gave, which are not very different from the figures I have, justify the conclusion that he stated at the end of his question.
Lord Mishcon: My Lords, is it not a question of procedures which lead possibly at times to excessive costs? Is the noble and learned Lord aware of the concluding remarks of Mr. Justice McKinnon in the case that was cited by the noble Lord, Lord Boyd-Carpenter? He said:
"What is beyond all doubt is that all involved in this case have had to endure what no one in our country should be called upon to cope with. That includes defendants, their families, the jury and me".
Taken together with the letter which the lady foreman in the Guinness No. 2 trial wrote to the Financial Times, are not our procedures which lead to these heavy costs in question, not the justice of a prosecution being brought? In these circumstances, and because of the urgency of the matter, can the noble and learned Lord tell us when the Royal Commission is likely to report?
The Lord Chancellor: My Lords, of course I am aware of the words of Mr. Justice McKinnon at the conclusion of the case cited by my noble friend Lord Boyd-Carpenter. It is fair to say that it is easier to see the problem than to diagnose a satisfactory solution to it. So far as concerns the Royal Commission report, the time suggested when it was set up was of the order of two years. I have no reason to suppose that it will not report within the original timespan.

Business
The Earl of Strathmore and Kinghorne: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Belstead will, with the leave of the House, repeat a Statement that is to be made in another place on Prisons Management (Northern Ireland).
With the leave of the House, I should like to say a word about the length of speeches in today's debate standing in the name of the noble Lord, Lord Peston, to which your Lordships have agreed to apply a five-hour time limit. On the principle that the mover is allowed 20 minutes and that the Minister should rise to reply not less than 25 minutes before the scheduled end of the debate, all other speeches should not exceed 10 minutes. If any noble Lord should speak at greater length he would be doing so at the expense of other speakers in the debate.

The Economy
3.8 p.m.
Lord Peston Lord Peston rose to call attention to the state of the economy and its social consequences; and to move for Papers.
The noble Lord said: My Lords, it gives me great pleasure to welcome our maiden speaker, the noble Lord, Lord Rodgers of Quarry Bank. I shall refrain from reflecting on how unpredictable is the course of human events which sees him sitting where he is. I shall merely emphasise how much I and all noble Lords are looking forward to hearing what he has to say.
My speech is organised as follows. I shall set out briefly the present state of the economy. I shall then pose and answer the question: how did we get into the present mess? Finally, noble Lords will wish to hear any suggestions I have to make on how we can solve our problems. Many of the relevant topics will be covered by my noble friends. In particular, the rather difficult question of the public sector borrowing requirement will be covered by my noble friend Lord Donoughue at the end of the debate, although I may find a moment or two to make one or two remarks on that myself.
I shall concentrate on our economic predicament: on what caused it, what remedies are available and how long they will take to work. Before doing so, however, I must emphasise a point of principle. We are not interested in the workings of the economy for its own sake. Our concern is and must always be for the welfare of the people and how that is affected by economic performance, including financial performance. By "the people" I mean the whole community and not some favoured fraction of it. I shall have much to say on this Government's failings in the economic sphere. But the greatest objection to their policies is how little of what prosperity we have achieved has accrued to the poorest people in our society.
In that connection, it is all very well for Mr. Lamont, the Chancellor of the Exchequer, to argue that the rise in unemployment is a price worth paying for a fall in inflation —a proposition which, incidentally, the Prime Minister does not seem to have felt able to repudiate. But those who bear the costs —those who bear the unemployment—are not those who receive the benefit; they have lost their jobs, many of them permanently and many others for long periods. What have they been given in return? They have been given a tougher regime on social security benefits and there has been a failure fully to index link child benefit and pensions which are not index linked to earnings. But, worse still, they have also been offered the insult that they are the cause of their own troubles and the further insult that they are the cause of ours.
Perhaps I may put the following proposition to your Lordships. Let us consider a party that offered the following: "If you elect us to power we shall achieve these things: inflation will be our top priority and we shall do anything needed to control it. We shall
844
therefore produce an average inflation rate of 7.5 per cent. per annum. We shall produce an economic miracle. Our gross domestic product will grow at an annual rate of 2.1 per cent. per annum"—that is, gross domestic product per person employed at 1.7 per cent. per annum; in other words, an economic miracle corresponding precisely to the previous decade of their period in power. "Unemployment will treble and on a sustainable basis will be some 50 per cent. above the level we inherit".
"Despite experimenting and manipulating the figures, we shall always keep unemployment above the level that we inherit. The balance of payments on current account through our years of office, despite the bonus of North Sea oil, will deteriorate. At its worst, the deficit will equal 4 per cent. of gross domestic produce. The external value of sterling will fall by 15 per cent.—i.e., we shall devalue sterling by 15 per cent. We will raise total tax and social security revenue relative to national income but make sure that more of the burden will fall on poorer people. The chief gainers will be the relatively rich".
"More generally, and with respect to income and wealth, we shall widen inequality. Although we are against taxation and public expenditure and favour prudent finance, we shall eventually worsen the public finances so that the public sector borrowing requirement comes to exceed 3 per cent. of gross domestic product, rising towards 5 per cent. We will then finally, as part of our manifesto, create at least two recessions in which output actually falls. One of these will be the deepest and the other may turn out to be the longest of modern times".
Would any party go to the country on such a platform? More to the point, would it expect to be elected? But the latter is a summary of the economic record of this Government—a government who have the cheek to attack the Labour Party for the damage which it might do to the economy. We have no need to retaliate in kind; we can let the Conservative record speak for itself.
I have said that I wish to discuss policy, but I shall do so with some trepidation. All I know is what is in the public domain. I have a suspicion that matters are actually worse than they seem to be and that the Treasury knows a good deal more than it is letting on. In a few weeks I, and, more importantly, my right honourable friends, will be confronted with the worst case scenario. It has always been my view that economic policy must be based on considering what is the worst thing that may happen and not on the motto "Things are looking up", which is the approach of the Prime Minister and his Chancellor of the Exchequer.
In that connection I must say, first, that it is impossible to emphasise too much the weakness of a balance of payments on current account. The figure just announced for last month of a current account deficit of £794 million is simply too bad to be true. But, even if next month's figures turn out to be somewhat better, we are still confronted with a serious deficit in the depths of a recession. That means once again that we are constrained by the balance of payments. Above all, it means that a consumer-led

845
recovery will be foolhardy. It also means—and I regret to say this because it will affect the new government —that no recovery can be very rapid.
Secondly, the unemployment figures continue to deteriorate. It is hard to believe it, but it is now clear that unemployment is likely to rise to 3 million this year on the present method of measuring. If we examine the record of this Government's anti-inflation policy, what it has actually turned out to be is nothing more than the 19th century view that if you create enough unemployment you will deal with the inflation problem. The position that they leave us with —that is, with about 7 per cent. of the labour force being unemployed—is where inflation starts to get out of control. That has happened despite all their alleged reforms of the labour market. The headline inflation rate is down. But it is down from the level that the Government pushed it up to. It is far from zero. The core rate of inflation—or, if one prefers it, the underlying rate of inflation—is in the general area of 5 per cent. per annum.
Thirdly, the manufacturing base was seriously eroded, as noble Lords have pointed out, between 1979 and 1987. It has improved since that time, but in 1991 manufacturing output fell again. The Government's one signal success, on which I would always congratulate them, has been the improvement in manufacturing productivity. There can be no doubt that there has been an improvement. But it is still nothing like sufficient to solve the trade problem and has not turned out to be an engine of economic growth of the kind that one might have wanted.
Fourthly, while looking at the balance of payments constraint and the state of the economy, perhaps I may quote a statement from the Financial Times, which despite its pink paper is not usually sympathetic to my party. It says:
"The likely medium-term combination of a tight monetary policy with a deterioration in the structural fiscal position"—
that is the Government's policy—
"is frightening".
I hope that noble Lords will note the word "frightening". It continues:
"It looks especially risky for a country with a substantial current account deficit in the midst of a deep recession, above all if the tax cuts were largely aimed at boosting consumption".
More generally on policy, we have the old cliché—whether we are talking about Sir Alan Walters, Professor Minford or many others—that with friends like that the Government do not need any enemies. Mr. Lamont must be encouraged in his labours at this time to be told that they are opposed to tax cuts and increased borrowing and that they refer to laxity in public expenditure and favour leaving the exchange rate mechanism. Who is it who talks about the Government commanding,
"more and more of people's savings in order to pursue the hare-brained ideas of Heseltine and the social soporifics of Patten and his 'compassionate Conservatism"?
It is certainly not me; I am too kind and gentle. Those remarks belong to that loyal Tory supporter, Sir Alan Walters.
My heart goes out to Mr. Patten. Underneath the electoral posturing which inevitably accompanies
846
being chairman of the Tory Party is an intelligent and concerned person. He ought to know that no amount of ranting and raving will satisfy those in the mad militant wing of his party. He would be better off not trying to pacify them at all.
How have we got to where we are? I think that the main policy mistakes are the following. The Government eased monetary policy excessively after the stock market crash of 1987. That was a mistake, but I do not blame them for it. I must tell noble Lords that I would have made the same mistake.
Noble Lords: Hear, hear!
Lord Peston: My Lords, I think that "hear, hear"s are a little premature.
Following that mistake, the Government saw too slowly that a slump was not in the offing. Therefore, monetary policy stayed relatively easy when that was not what was needed. But the biggest error took place in the period between 1985 and 1988. In those years output grew respectively by 3.9 per cent., 3.7 per cent., 4.4 per cent. and 4.1 per cent. per annum. The Government, and notably the Prime Minister and the Chancellor of the Exchequer of the day, convinced themselves that there had been an economic miracle and that the sustainable growth rate of the UK economy was 4 per cent. per annum; in other words, they made the biggest mistake that a government can ever make—they believed their own rhetoric.
There had been no miracle. All that had happened was that the economy had got back on to the right track with its historical growth path of 2.5 per cent. per annum. To go faster than that meant balance of payments problems and inflation getting out of control. That, too, was recognised rather late in the day, with the obvious result that restrictive measures, both monetary and fiscal, were introduced with too much delay and also in an over-reactive fashion. The effect has been the recession, or the slump—call it what one will—of 1990 and 1991. There has been no doubt that the recession was government-induced. There is also no doubt that it has lasted as long as it has because of the Government's over-optimism in three respects which we heard in your Lordships' House throughout last year. The first is their over-optimism about the recovery in consumer spending and the fall in the propensity to save despite the debt overhang. The second is their over-optimism about the recovery in business spending despite the worsening markets and high interest rates. Finally comes their over-optimism about the expansion of world trade. Essentially the Government failed to see what was happening.
Perhaps I may quote again from the Financial Times, which stated:
"The unexpectedly sharp rise in the trade deficit has simply added to the air of general economic malaise that currently engulfs the UK economy. It may have strengthened Mr. Major's misplaced claim that the world economy is to blame for the absence of recovery".
However, it then rightly states:
"But few are fooled".
The cause of the absence of recovery is the Government's failure to act.

847
I am sure that noble Lords are by now finding my catalogue of government errors rather tedious, so I shall turn instead to the principles of policy. The first matter about which I hope to persuade noble Lords is a technical one. I certainly do not see that it has anything to do with party politics.
When we look at the Budget we must get into the habit of distinguishing current expenditure from capital expenditure and, in so far as we are concerned with balance, we must start with the concept of balance when paying for current expenditure. Equally, however, it makes perfectly good sense for a government to borrow for long-term capital expenditure. The principles that apply to governments are no different from those that apply to firms.
Let us take a first example. If we build a hospital this year, we use resources this year and in that sense it is obvious that it is paid for this year, but I know of no valid argument that says that this year's taxpayers must pay for the whole of that hospital which will be available to the taxpayers of the next 50 years. It makes perfectly good sense to borrow for capital investment, bearing in mind that eventually one will have to tax to repay that capital, but that is another matter. That is why we must distinguish the current from the capital side of the account.
Secondly, just as a business should not be afraid to borrow in the right circumstances, nor should the Government. Perhaps your Lordships will notice that I said "in the right circumstances." That means—and Keynesian economists, of which I am one, often forget this—that one spends in a recession but also that one does not spend in a boom. Unfortunately, some of my colleagues seem to think that one should spend all the time. But that is not my view.
Having mentioned investment, I should say that what is mostly needed is an encouragement for both the private sector and the public sector to invest. There may be consequential increases in consumption, but there should be no—what is the ghastly expression?—"kickstart" coming from consumption. We want the start to be the result of investment.
I hope that it is not controversial to say that I believe that we must keep sterling within the exchange rate mechanism at its present parity. I, for one, favour moving as soon as possible to the narrow bands. I regard that as the best anti-inflationary policy that we have because, to the extent that that is credible, the rate of interest can come down. However, noble Lords should accept—this is again a technical point—that in a free international capital market world forces will always dominate what happens to the rate of interest. The monetarists are wrong to think that leaving the ERM and allowing the pound to float will cause the rate of interest to fall. If anything, because of the exchange rate, it will cause the rate of interest to rise. In my view, floating the pound is simply an invitation to governments to solve their problems by inflation.
The size of the public sector borrowing requirement —that deficit—and the size of the external deficit, both of which are left by the outgoing administration, mean that the incoming administration's immediate priority must be to bring the national finances under control.
848
The Conservative Government are spending money as if it will become obsolete in the near future. Indeed, on their policies it may well become obsolete in the near future. We still hear about tax cuts but, given the dangerous outlook, we must be extremely careful about further promises on public expenditure.
In my judgment, however, once the nation's finances are controlled by my right honourable friend Mr. John Smith, who is a prudent Scotsman as well as a lawyer and therefore has the advantage of not being an economist, there will be strong possibilities that economic growth will enable us to meet desirable commitments on health and education. Our view is that we should spend the money once we have it—not what the Government are doing, which is to spend it before they have it.
One problem for the Government is that they have now run out of alibis. They blamed us for their inheritance and then proceeded to make things worse. They now blame their good friend, Mr. Lawson, for excessive expansion, although they were happy to accept his claims about an economic miracle at the time that he made them. They blame the rest of the world for going into recession just when we were counting on the rest of the world to have a boom to get us out of our slump. They blame consumers for saving, which is a curious turnround from this Government who supposedly favour financial prudence and deplore profligacy. They even seem to be insinuating that the present Opposition are somehow to blame when it will be only a couple of months until they really can blame us because we will be in charge. I suppose that noble Lords opposite and their friends in the other place are trying to get in practice for their period in opposition in the near future. But at the moment all this is extremely worrying.
The basis of rational action is to face reality and to accept responsibility. The Prime Minister and the Chancellor of the Exchequer seem unable to do that. However, while they retain their jobs they have responsibilities to analyse the present position and to choose policies that do not make things worse. The Prime Minister claims to have laid the foundations for further advance but I for one think that that is nonsensical and that a consumer boom would be deadly dangerous.
In conclusion, the Government now consist of tired men who cannot find remedies to cure the ills that they have created. The time has come for them to step aside for a rest cure and let us take over to put things right. I beg to move for Papers.
3.27 p.m.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, I am pleased to see that the Motion put down by the noble Lord, Lord Peston, acknowledges the crucial link between economic performance and social welfare. The record of this Government on social issues is one of real progress in increasing provision to those who most need it. This progress has been based on a fundamental improvement in the UK's underlying economic performance.

849
It is the underlying strength of an economy that generates the prosperity which makes a high level of social provision possible. Wanting to help is simply not enough. It is also necessary to generate the prosperity that makes it possible to help. It is this fundamental truth that noble Lords opposite all too often fail to understand.
It is easy to forget just what a state the British economy was in when we came to power in 1979. The runaway inflation of 1975 had led on to the humiliation of going cap in hand to the International Monetary Fund, normally the preserve of third world countries. Along with the IMF bail-out came imposed economic discipline and, for a brief period, even single digit inflation. This, however, was soon swept away by the wage explosion that accompanied the winter of discontent, and by May 1979 inflation was back over 10 per cent. and rising.
Our poor inflation performance in the 1970s had its counterpart in slow growth. As in the sixties, the UK economy grew more slowly over the period than that of any other G7 or EC country over the decade of the seventies. In 1979 a Conservative Government were elected with a clear mandate to defeat the inflation that had so damaged our economy.
There were many in 1981 who argued that we should relax monetary policy. Notable among them were the 364 economists, including the noble Lord, Lord Peston, who wrote to The Times warning of never ending recession at just the time when we now know that a strong and sustained recovery had already begun.
The reward for holding firm against those calls was low inflation, which fell to below 5 per cent. by the start of 1983. And, just as high inflation in the '70s was accompanied by low growth, so lower inflation in the '80s was accompanied by higher growth than was enjoyed by our competitors. Indeed from 1981 we had eight consecutive years of growth averaging over 3 per cent. per year.
More important than our growth rate at the height of the cycle, however, was the improvement in our performance over the decade as a whole. In the period from 1980 to 1990 our economy grew faster than those of any other major EC country apart from Spain.
That improved performance was aided by a transformation in productivity growth. In both the '60s and the '70s manufacturing productivity grew more slowly in this country than in any other of the G7 industrialised nations. Over the 1980s it grew faster than in any of these countries. I am glad that the noble Lord, Lord Peston, acknowledged that fact.
That rapid improvement in productivity contributed to much healthier company profits. Higher profits led in turn to a huge increase in business investment, which rose by more in the three years to 1989 than in any similar period since the war. Higher investment contributes to better productivity growth in the future, so setting off a virtuous circle, and the extent of the improvement in our investment record is demonstrated by the fact that, even during the recession, business investment as a proportion of GDP has remained higher than it was at any point under the Labour Government. Higher productivity
850
and investment have helped us to arrest the long-term decline in our share of the world trade in manufactures, which is likely to have risen for the third successive year in 1991, after stabilising during the 1980s, following decades of decline.
In 1987 stock markets around the world experienced their worst crash since the Wall Street crash that heralded the great depression of the 1930s. There was no post-war precedent from which to gauge what effect this would have on modern economies. Our response, as in other countries, was to allow some easing of monetary policy to offset the feared repercussions. This happened at a time, as I have said, when the economy had been growing strongly for several years.
With hindsight, it is clear that the effect of the stock market crash was less than we feared, demand pressures were stronger than we realised, and we loosened monetary policy too much in response. As a result, some of our hard-won progress in eliminating inflation from our economy was lost. That episode demonstrated that the struggle against inflation is never finally won. Constant vigilance is needed.
In retrospect, there was one signal that should have warned us that we were heading off course. For the first time since our coming to power, the Opposition supported our monetary policy. Indeed even when we had recognised our mistake the Opposition continued to urge yet more easing of policy.
I would not deny that the relative position of the UK has fallen back a little as we have started this decade by going into an economic downturn earlier than other European countries. I would remind noble Lords that the UK did exactly the same at the beginning of the 1980s. But we emerged from recession earlier than most other countries and then grew more rapidly than most over the decade as a whole. I have every confidence that under the continued stewardship of this Government we shall do the same in the 1990s.
After a difficult period, we now have in place the conditions for a return to sustainable growth. Not only the Government but virtually every independent forecaster expects the economy to recover this year. The preconditions for such success are already there for everyone to see. We have cut inflation by well over half since the autumn of 1990. Our rate is now below the EC average and virtually the same as Germany's. We have cut interest rates eight times since October 1990, by a total of 4½ per cent. And our commitment to keeping inflation low as been reinforced by joining the exchange rate mechanism.
Earnings growth is lower than for 25 years and yet —because of low inflation—real earnings continue to rise. And there were fewer days lost to industrial action last year than in any year since records began a century ago. For decades high inflation and poor industrial relations were seen as main symptoms of the so-called "British Disease". The 1980s will be seen as the years during which that disease was cured.
We have laid the ground for a return to sustainable growth, and the benefits of that growth will be felt by all sections of the community as they have been over the past decade. As a result of the policies pursued by

851
this Government over the past 13 years, living standards have risen markedly. For example, for a married man on average earnings, with two children, real take-home pay has risen by 35 per cent. since 1979. The average real net incomes of pensioners rose by 34 per cent. between 1979 and 1988.
The solid foundation of prosperity that we have laid has also enabled us to maintain and improve the social programmes which are important to all sectors of society. In the health service, for example, total spending has grown by over 40 per cent. since 1979 and 30 per cent. more in-patients and day patients are being treated annually.
Spending on education is an investment in the long-term future of the economy. Between 1979–80 and 1989–90 expenditure per pupil in English schools rose by no less than 40 per cent. in real terms. Another area of real concern is homelessness. Here too we have been able to make extra resources available.
That degree of activity, in the face of the current economic climate, is possible only because of the overall discipline within which government spending is carried out.
The subject for debate today is of course wide-ranging, and I do not wish to take up more of your Lordships' time than I need. But it would be wrong for me to sit down without mentioning unemployment. I do not deny that the recent increases in unemployment are disappointing. They reflect the fact that recovery from the recession is being affected by world economic circumstances. Rising unemployment is not unique to the United Kingdom. Unemployment has risen in recent months in most EC countries and is higher today than it was a year ago in every EFTA country and in every G7 country. It should also be remembered that the United Kingdom has a higher proportion of people in work than any other EC country except Denmark. The latest figures show that the total workforce in employment is still 575,000 larger than it was in 1979. To help cope with the tragic effects of unemployment on individuals, we are expanding the help available through the employment and training programmes. Nearly 1 million places will be available in 1992–93, which is an increase of 100,000 on this year. That amounts to more help than has ever before been provided to unemployed people.
The state of the economy has inescapable social consequences for good or ill. But the prudent management of this Government has enabled us in better times to make the investments which now shield the major social programmes from the ravages which they suffered during the uncontrolled inflation of the 1970s.
3.38 p.m.
Lord Jenkins of Hillhead: My Lords, we thank the Minister for his gallant reply. I am not sure that it bore much relationship to the facts, but we congratulate him on being steady under fire from economic facts. One of Adlai Stevenson's better and more remembered remarks was:
852
"I offer my opponents a bargain. If they will stop telling lies about me, I will stop telling the truth about them".
I offer the Government a bargain. If they will stop going on with the nonsense about the miracle of the 1980s, I shall not pretend that the present deep recession is due exclusively to the Government's mismanagement. Considerable world factors are of course involved, but they are by no means exclusively the factor, because the British recession, as the Minister admitted, came earlier, has gone deeper and may well last longer, on present indications, than in the countries of most of our competitors.
That is essentially the case because, first, the miracle was always spurious; and, secondly, because of the gross mismanagement by successive Conservative Chancellors since 1988. If there was a miracle, the speed with which Mr. Lawson, Mr. Major himself during his year at the Treasury, and now Mr Lamont have dissipated it is remarkable. Although the mismanagement has been prodigious, I do not believe that it has had quite the full consequences because I do not believe that the miracle was ever there.
I believe that for the following reasons. Many people have admitted that there were five major faults in the British economy at the beginning of the 1980s —deep-seated, long-standing faults for which everyone bears a share of the responsibility. Over the decade of the 1980s three of them have remained more or less the same, uncured but not particularly exacerbated. However, two have become markedly worse over the period. The three which have remained more or less the same are, first, a long-term deficiency of investment; secondly, a poorly educated and inadequately trained workforce by international standards; and, thirdly, an inflationary tendency well above the average for the Western world.
The last point requires a gloss of explanation. In the 1970s probably most of us, at any rate in our hearts, would have put the main blame for the tendency on excessive trade union power and aggressiveness. That power and aggressiveness have been cured in the 1980s. In my view, that is one of the relatively few achievements of this Government. However, in its effect it has had more of a socio-industrial result than an economic result for it has failed to make a significant impact on the high inflationary tendency which was thought to be its most damaging and obvious result.
On the other hand, the two faults which have become markedly worse have been, first, the inadequacy of our manufacturing base, with its clear effects upon the balance of payments. There is inadequate export capacity and any pick-up in the economy goes disproportionately into imports. This deficiency was made much worse by the since uncorrected effects on manufacturing industry of the deep slump of 1980 and 1981.
The second of the faults which have become worse is the bad British disease of short-termism, with the pattern of ownership making industrial companies subject, to an incomparably greater extent than in Japan or Germany, to the urge of investment fund managers to out-perform each other on a year-on-year basis. Immediate profit thus becomes more important

853
than long-term market share. The deleterious effects are greatly increased by the Government's policy of encouraging corporate raiding and by their complete indifference to the vulnerability of even the companies closest to the heart of our national interest to takeover bids.
So that is the score—three diseases uncured, two made worse. The result is the present unenviable position: a massive balance of payments deficit at the bottom of the worst slump or recession since the 1930s. The Prime Minister, who seems to have been miraculously converted, almost in the past 24 hours, to the virtues of anti-cyclical Keynesian economics, should bear in mind what a menacing position this is. The normal pattern is to be in surplus or, at the very worst, in balance at the bottom of a recession and to be ready, therefore, to rise up from the trough to dissipate the surplus. To have the present deficit before the upswing even begins is frankly catastrophic —and with North Sea Oil as well!—plus a public sector borrowing deficit of £25 billion before any stimulus which the Chancellor, looking desperately unsteady as the last man in on a bumping pitch with a blinding light, may decide to apply in the Budget.
It really is a case both of, "If I wanted to get to Ballylicky, I wouldn't start from here", and of improvidence on a gigantic scale. As I pointed out previously in your Lordships' House, the great improvident Chancellors of the post-war period have been Conservatives to a man. I see the noble Lord, Lord Thorneycroft, sitting in the Chamber. He was not one, but he was the exception. They were Maudling, Barber and Lawson and now probably Lamont. It really is a formidable roll call.
How do the Government react to this? They react, first, by screeching at their opponents, almost as though they were southern state American TV crooked evangelists denouncing sin. They screech at them, "You're improvident, you're improvident". Secondly, they react by the spectre of Mr. Lamont trying to make up his mind not what the economy needs but whether the electorate will respond to an income tax bribe or whether it means what it says when it asks for better services instead. If he is not taken seriously as Chancellor, Mr. Lamont has only himself to blame for adopting that posture.
There is a case, which I accept a little cautiously, for increasing borrowing even from the present high levels for investment in the future. But there is no case at all for doing it for an income tax cut, which will certainly be taken back, either directly or indirectly, after the election.
To hold the balance, in my view the case against the Opposition is not they are improvident now but that they have become so anxious to appear cautious and respectable that they have become like rabbits caught in the headlights of a car, losing all room for initiative. I would be more worried that Mr. Smith in office, if he gets to No. 11 Downing Street, may turn out to be more like—
A noble Lord: Mr. Jenkins!
Lord Jenkins of Hillhead: —Philip Snowden than Hugh Dalton. Mr. Major made a remarkable
854
statement overnight, in which he said that there had been only handfuls—I was not sure whether he meant one handful or two, five or 10—of years with a budgetary surplus since the days of Henry VII, which I thought was pitching it a bit strong. As a progenitor of one of that handful, I nonetheless recommend Mr. Smith to have a bit more of a song in his heart. At least it would be difficult to sound worse than the chirpings of Micawberism—which is all we hear at present from the Government—of economic failure. Their only sign of morale is their passionate desire to cling to office.
Lord Peston: My Lords, we were told that the noble Lord the Leader of the House wished to make a Statement now.
The Lord Privy Seal (Lord Waddington): My Lords, we have discussed the matter through the usual channels and I understand that it was not convenient for the noble Lord, Lord Prys-Davies, to respond for the Opposition at this juncture. Therefore, in order to accommodate him I have arranged through the usual channels—and I hope this is acceptable to other parties in the House—that the Statement should be taken after the speech by my noble friend Lord Boyd-Carpenter.
3.50 p.m.
Baroness Hollis of Heigham: My Lords, 50 years ago HMSO printed a report for which people were queuing in the streets. That was the Beveridge Report. Beveridge and the British people wanted to slay five dragons; those of want, disease, squalor, idleness and ignorance. Nye Bevan sought to slay the dragon of disease and Rab Butler's 1944 Education Act sought to slay the giant of ignorance. A strong local government was to tackle the squalor of dereliction, homelessness and the need for town and country planning. All parties were determined to eradicate the idleness of unemployment.
To tackle want Beveridge devised a new social security system based on insurance and national assistance. Many of your Lordships were associated with those great changes. Yet since 1979 health care has been sent into the market-place, and so, increasingly, has education. Local government has been devastated. On the old calculations unemployment is now running close to 4 million. The number in poverty has more than doubled since 1979. According to the European Commission's definition of poverty —not mine —of 50 per cent. of average income, 4.9 million people were in poverty in 1979. That figure is now nearly 12 million or, to put it another way, one in four of the households in the EC defined by the EC as poor live in Britain. That is a higher figure than in any other member state. Who are those people? About a quarter of those in poverty are unemployed and another quarter are in low paid or part-time work. A further quarter are pensioners and most of the rest are single-parent families or the disabled.
The number of unemployed people has tripled under this Government. Young people cannot enter the labour market and older men cannot re-enter it. The low paid and part-time workers often comprise women, disabled people and black people. Precisely

855
because they are in marginal jobs, they go in and out of the peripheral labour markets between bouts of unemployment. They never get out of poverty. In consequence, there is now a wider gap between the top 20 per cent. of those in work and the bottom 20 per cent. That gap is not only wider than it was in Beveridge's time 50 years ago, but it is also wider than it was in Charles Booth's time 100 years ago. Are we comfortable with that position?
A further group of very poor people comprises pensioners. Two-thirds of them are women, for poverty is a women's issue. Pensions now stand at 16 per cent. of average male earnings. That is a quarter less in relative terms than in 1979.
The final group dependent on benefits comprises single-parent families, the disabled, and the 16 to 18 year-olds who lost their benefits in 1988 on the grounds that they should go home: back home where they may have been abused or in care. That latter group is in many ways the most horrifying of all. They are now at risk of everything we dread for our own children. They are at risk from hunger and sleeping rough and from petty crime, drugs, prostitution and suicide attempts. If we dread such a fate for our own children, we should not tolerate it for anyone else's.
The number in poverty in 1979 was 5 million and now that figure is nearly 12 million, one-fifth of our population. Why is that? Sometimes people become poor through fate. They may be in the wrong place at the wrong time, have the wrong skills or have the wrong gender or race. Their poverty is rarely due to lack of personal skills. Such poverty is not God ordained. The crux of my argument is that it has been largely Government constructed.
Since 1979 we have seen a cynical, callous paring of benefits that has driven down the income of our poorest people. What have the Government done? They have scrapped some benefits, halved others, frozen yet others and tied the rest to the RPI. They have scrapped some benefits. They have scrapped industrial injury benefits for nine out of 10 of those eligible for them. The earnings related supplement has been scrapped and, above all, benefits for 16 to 18 year-olds have been scrapped.
The Government have halved other benefits. Mortgage interest payments were halved in 1988 for the first 16 weeks of claiming benefit. The definition of what was full-time work has been reduced from 30 hours to 24 hours. In April it will be reduced still further to 16 hours. At that point people lose income support and passported benefits such as help with their mortgages. Child benefit was frozen, housing benefit cut.
Alongside the 30 adjustments to unemployment figures that have occurred we have seen some 15 cuts in unemployment benefit. As a result, it is now worth only 80 per cent. of what it was worth in 1979 to a couple with two children. As the Government have chosen since 1980 to tie benefits to RPI rather than earnings, that has meant that old age pensioners have lost something like £28 per couple. That cut in pension was paid for by a cut worth 5p in income tax. The real average income of the population has increased by 35
856
per cent.; the bottom 10 per cent. of the population —after taking into account housing costs—has seen no improvement at all.
Social security expenditure has grown but almost entirely because of the number of claimants and above all the number of unemployed. Indeed the most recent academic research has shown that a family on income support with two children where the adults do not smoke or drink and use electricity or paraffin heating, who pay off no debts and whose sole recreation is going for a walk or watching the TV, and who live confined lives on a drab diet wearing dreary clothes, now receive income support that meets just 64 per cent. of what Government departments themselves say is essential to meet basic daily needs.
Of course those people can always apply to the social fund, can they not? That is true, but 75 per cent. of the applications to the social fund are refused either because families have not been on income support long enough or because the money has run out, or because they are too poor to repay the loans. One should make sure that if one's cooker, job or marriage expires, it does so in May or June when there is still a chance of money in the budget. So cruelly ill-conceived has the social fund been, that yesterday the Social Security Advisory Committee called for its fundamental reform as it is too much of a lottery. It drives people into debt.
The independent Institute of Policy Studies showed last week that 2.5 million families are in debt. That is a higher figure than at any time since the 1930s. Those are mainly families with young children, on low pay or desperately low benefits. The Institute says those families are unable to meet their basic needs. They face multiple debts of housing costs, poll tax, water rates, fuel charges, court fines and HP costs. Every time they borrow to pay off those debts, they displace those debts and go further down into poverty from which they cannot recover.
It is worth reminding ourselves that 44 per cent. of those in prison for less than six months are there because they cannot pay their debts. The institute says that these people are not feckless, just very poor. I would argue that the Government have helped to make them so. There have been choices. Those of us on £40,000 a year have received tax cuts worth some £77 a week. That represents virtually the entire pension for a couple. Those of us on £70,000 a year have received tax cuts worth £700 a week. We have seen rebates worth £6 billion given for private pensions. Real choices have been made. The Government have chosen to encourage the rich to work harder by cutting their taxes and the poor to work harder by cutting their benefits.
The Government have increased insecurity and called it enterprise. The Government have increased inequality and called it initiative. The Government have chosen punitive means testing but have called that targeting. We see around us the waste of people, of opportunity and of our common wealth. We have seen the re-emergence of Beveridge's dragons of stress, distress and destitution. Things can be different. There are pathways out of poverty. Those pathways are training, investment, a minimum wage and decent

857
pensions and benefits. There are pathways and we must take them if we are to call ourselves a civilised society. As Beveridge said:
"want, squalor, disease, ignorance are common enemies of us all—not enemies with which we may individually make a separate peace, escaping oneself to personal prosperity, while leaving our fellows in their clutches. That is the meaning of social conscience—that one should refuse to make a separate peace with social evil".
3.59 p.m.
Lord Joseph: My Lords, the present situation is deeply poignant for the people of this country, particularly for those whose lives have been, I hope only for the moment, transformed for the worse. It is also poignant on a lesser scale for the Ministers concerned who had hoped that their efforts during the early 1980s had by the mid-1980s set this country on an increasingly internationally competitive course with benefits to come for employment and prosperity and, through social benefits, for those for whom the noble Baroness, Lady Hollis, has just spoken. If there were more time I should have liked to take up some of the points which she made because in my view she overstated the case, but I want to concentrate on the central issue of the Government's handling of the economy which has led to our present recession and higher unemployment.
We can surely all agree that with hindsight what turned into an unsustainable boom was not recognised officially and by the bulk of the members of most parties in sufficient time. There were people, even economists, who recognised early what was likely to turn into a boom which might be dangerous. I mention Tim Congdon and Nick Budgen in another place—I am still not quite sure how to refer to colleagues in the other House—who both proclaimed as early as 1985 that the acceleration of house prices and land prices boded ill for the future. However, as far as one can tell the officials and Ministers concerned were comforted by the falling rate of inflation, which had dropped to about 3½ per cent. in 1985, and the rising demand for jobs, unemployment having peaked in 1985 or 1986. The situation looked extremely healthy for our international competitiveness in comparison with what had been the case. I shall not upset the noble Lord, Lord Jenkins, by talking of miracles, but the improvement in productivity surprised and pleased everyone in this House. It is true that the reduction in trade union power was the principal cause, but it produced benign results for this country's prospects for prosperity and full employment.
The question we have to ask ourselves is why the officials and Ministers concerned, who were all deeply dedicated to keeping inflation on a downward trend, did not recognise the dangers. He or she would be foolish who judged that it is easy to decide what is the reality. I regret that the middle term financial strategy, which, ironically, had been invented by Mr. Nigel Lawson and Sir Geoffrey Howe, was jettisoned early in the mid-1980s and that we ignored the danger signals of what was then M3. I recognise some of the arguments—that we had deregulated and it was difficult to use the figures as a valid guide. However,
858
the fact is that an unsustainable boom was not recognised in time. Her Majesty's Opposition did not help. They were arguing for lower interest rates when, belatedly, the Government decided to raise interest rates in 1987–8.
On top of that misjudgment came what, to my mind, was the second parallel and interrelated mistake of rushing into the exchange rate mechanism. I am not a classicist and I had to look up the encyclopaedia to make sure of my reference, but there is a horrifying story from mythology of the past of the shirt of Nessus. The shirt was given by Nessus, a ferryman, to the mistress of Hercules with the advice that if ever Hercules' love should wane the shirt should be given to him, and it was so medicated that it would revive the love of Hercules for that particular maiden. In fact it had been poisoned. Hercules was persuaded to put it on. In due course he tried to take it off—and I invite noble Lords to consult the encyclopaedia if they wish to know the rest of the nauseating story. The ERM was predicted to become the shirt of Nessus if we joined it because domestic conditions requiring a lowering of interest rates might he precluded by the ERM rules. That is precisely the shirt which the Government have put on.
Ironically, it was also the shirt which Her Majesty's Opposition put on. The very Opposition which clamoured for lower interest rates just when the Government had nerved themselves to raise them—and they needed to be raised—is now precluded from asking for lower interest rates because the ERM prevents the Government from doing so. That is an honourable posture but it does not serve the interests of this country well when Her Majesty's Opposition support a government policy which, in my view, has been mistaken; namely, joining the exchange rate mechanism.
Because of that prohibition on lowering interest rates in order to avoid falling from our allotted place in the ERM, the Government are struggling to find some alternative0 remedy to provide a tonic to revitalise the economy which only a fall in interest rates could achieve. They have to turn their hand to the alternatives. Should they lower taxes and encourage investment? It is for the Opposition, as well as my noble friends on this side of the House, to have some sympathy for the Government which both sides have encouraged to wear the shirt of Nessus which has prevented them taking the obvious course.
We have to take comfort from what has happened. We have to take comfort from the dramatic and now sustained rise in unit productivity. That bodes well for international competitiveness in the future. However, I take issue with the noble Lord, Lord Jenkins. We can agree that standards of education and of training need improvement. The Government have creditably embarked on what are, at least to some extent, unpopular steps to improving both of those. It will take time to achieve that. However, I cannot agree with the noble Lord that, in judging the Government's performance, we must look at the quantity of investment alone. There has been plenty of investment in the past. Alas, it was the quality of that investment,

859
the productivity to which it was put, and the markets which it sought to serve which were often mistaken. We must judge the quality as well as the quantity.
In the meantime let us see the poignancy of the present situation, which is made worse because the alternative remedies are reduced by the exchange rate mechanism handcuffs which the Government have put on themselves. Let us at least rejoice in the improved productivity and some of the other underlying improvements which are observable. For my part—and I hope that the House will not think it a King Charles's head—I hope that we shall appreciate the importance of the entrepreneurial function. We do not seem to have that in as much abundance as we should like. However, be the businesses created small or medium sized or whether they lead by heroic entrepreneurship to large industries and businesses, let us recognise that we shall not prosper and we shall not have anything like full employment unless, by British means or by means of overseas investment in Britain, we have a much larger volume of highly respected entrepreneurship than we have now.
4.9 p.m.
Lord Rodgers of Quarry Bank: My Lords, the unpredictability to which the noble Lord, Lord Peston, referred in his kind opening remarks brings me to this House in the twilight of a Parliament. I find that it is a somewhat awkward experience, because it has drawbacks and surprises—but perhaps that is an excuse to make a maiden speech at a rather indecently early stage so that I shall not be left hanging and waiting for a new dawn after the election has taken place.
The other surprise to me is that I was led to believe that the House was marked by a robust independence of party which occasionally spilled over into consensus, but it seems to me that there has not been a great deal of seeking after consensus this afternoon. I hope that it will provide an excuse if I occasionally stray from the anodyne into the mildly controversial. Perhaps I can say to the noble Lord, Lord Brabazon, that, if I do so, I hope that he will regard my remarks as of a general nature—shall we call them generic? —in that they would be addressed to any other government at any other time in comparable circumstances.
I was elected to another place almost exactly 30 years ago. I remember the frequent debates that we had on the economy at that time. This country had enjoyed a long period of prosperity after the great reforms and inevitable austerity of the immediate post-war period. But, as we learned, that prosperity concealed a historic decline and by the early 1960s the party was over. Indeed, there was a debate in this House on 18th April 1962 to call attention to the economic situation. In other words, the terms of the Motion were not very different from the terms of the Motion that is before the House today. Lord Alexander of Hillsborough, for the Opposition, mentioned:
"stagnation in production and repeated crises in exports and balance of payments". [Official Report, 18/4/62; col. 843.]
860
Lord Mills, Minister without portfolio, referred to inflationary pressures and the noble Lord, Lord Shackleton, said that the budget which had just been announced, was no stimulus to invention, exports, output or consumption.
Everything changes but everything remains the same. The terms of the debate may be different but the problems with which we seek to deal are very much those which confronted this country and this House 30 years ago.
For the past four years, and perhaps a little longer, I have had some responsibility as director general of the Royal Institute of British Architects. That has brought me very closely into touch with the fortunes of the construction industry. Only seven weeks ago your Lordships had a debate about the construction industry and housing. What was said then—and my own personal experience as director general of the RIBA—is germane to our debate today.
With the leave of the House, I shall say a few words about the economic situation, looked at not from the position more generally of the construction industry but specifically from the viewpoint of a profession. That profession is one in which many architects are struggling for survival. By nature an architect's profession is responsive and flexible. The profession is well accustomed to dealing with recessions and finding a way through them. But this recession, taking its length and depth together, is worse than any that anyone can remember.
The profession will admit, as I know this House and noble Lords opposite admit, that the peak of the boom was too high. But I believe that the onset of the recession was plain much sooner than the Government were ready to concede. From January 1989 in every quarter of the year the RIBA's own figures showed that architectural workloads were in decline. Indeed, since 1989 commissions have fallen by 50 per cent. At present underemployment in the profession is almost one-third. Figures lately made available by the Association of Consultant Architects show that 31.5 per cent. of all architects and technical staff have been made redundant during the past two years. Some of the largest, best known and most successful practices have fared worst.
Today I lunched with people from a successful and distinguished West End practice. I talked to them about this debate and the issues as seen by them. They said that three years ago there were 425 people employed by their firm and today there are only 150 people. The message they gave to me and which I pass on to this House is that what is impossible for them to cope with is a wild see-saw in the economy. They ask for stability. They would much prefer to avoid the very good times if they could only avoid the circumstances with which we are faced today.
It often seems that we order our affairs in a strange way. By common consent we need more schools, more homes and greatly improved infrastructures. There is an immense job to be done of maintenance and repair. The construction industry, and architects with it, have too little work to do. There is an identified need and an available means but we cannot put the two

861
together. I believe that we must in the future find a solution that is far more permanent than any that we have found in the past 30 years.
It would be pleasant if I could argue that there are some advantages in the situation and that somehow the construction industry and the profession will come out leaner and more successful. I see no evidence that that is the case. With their present difficulties architects cannot spend money on training. They cannot buy new technology. Of all the students at present in training, one in three is unable to obtain practical experience. I find it difficult to believe that, when this recession is over, it will be possible to point either to that profession or to any of the professions in the construction industry—or to the industry itself —and say that some advantage has resulted from this very unhappy period. To highly trained professionals, with seven years' full-time training behind them, unemployment comes as a profound shock. I hear every day that many architects are selling their homes; many have lost their lifetime's savings; and many can scarcely afford the subscription to their professional body. There is real hardship and no good can come out of it.
I should like to thank noble Lords for their very friendly welcome in the Corridors and Lobbies and I am grateful for their tolerance of my rough remarks today.
4.18 p.m.
Baroness Hilton of Eggardon: My Lords, it is an honour to follow so distinguished a parliamentarian as the noble Lord, Lord Rodgers of Quarry Bank. I congratulate him on an excellent and powerful maiden speech. It is clear that we have much to look forward to in his future speeches in this House.
The subject that I wish to address in relation to the economy is the consequences of crime in our society. Of all the social consequences that may be produced by a mismanaged economy, an increase in the levels of crime causes not only great distress to victims but captures the attention of the media. Over the past few weeks we have seen banner headlines about the doubling of recorded crime since 1979. In that year the figure for recorded crime in the United Kingdom stood at about 2.5 million. In 1990 the figure was over 4.5 million and for last year it is likely to be over 5 million—a 20 per cent. leap in one year. Moreover, behind those headline figures there is the dark figure of unreported, unrecorded crime, which may be four or five times as high.
I believe that many of the Government's ideological and economic policies have been directly responsible for the disintegration of society and social controls, with a consequent rise in crime. Society needs a sense of structure and moral continuity if it is to exercise influence over young people, who are mainly responsible for crime.
The causes of crime are multifactorial. A career in crime, like any other career, is not the outcome of a single factor. The influence of family, friends and teachers as well as job opportunities and living conditions are all relevant. Certain conditions of despair, truancy, bleak job prospects and criminal
862
associates will, however increase the probability of some boys and young men, and more rarely girls, becoming criminals.
The peak age of criminal offending is 15. It is at that crucial point of transition from school to work—of adolescent rebellion against authority—that government policies have been most destructive, removing the support of social security benefits from 16 and 17 year-olds, and offering them in return neither job prospects nor adequate training. It is no wonder that London looks like a third world city with its young beggars and vagrants.
Relatively more criminals come from broken homes-26 per cent. of adult prisoners have been in care—or from families which have moved around. The vain pursuit of employment can only have increased that disruption. Unified families, integrated with the local community, are less likely to produce criminal children, but economic pressures —unemployment, high levels of debt due to the 1980s credit boom—may trip some over the edge into disintegration and crime.
I am amused to see that the Home Secretary has lately become a convert to the idea that crime has a social basis. No doubt he will now be getting his task force to make further explorations along the wilder shores of criminology where it will discover Durkheim and may even find something called "society"! In 1895 Durkheim suggested that,
"fiercely rising commercial competition … broke … through traditional rules and restraints … Society put before people the one goal of getting rich, but many, especially in the poorer classes, could sec no hope of arriving there if they stuck to the rules for doing it legally".
If the only goals presented to people are materialistic then those are the ones that will be pursued by fair means or foul.
Over the past 13 years the Government have suggested that material wealth is the only goal worth pursuing and that all human endeavour must he measured in monetary terms. The pursuit of value for money in the police service has thus, for example, devalued human qualities and the role of the police officer in the community because its worth cannot be calculated in pounds or ecus. The focus instead has been on performance indicators such as response times, clear-up rates and devolved budgeting.
This Government have propounded the most materialistic ideology that we have seen this century and have underpinned it with 18th century notions of magic market forces for which Government need take no responsibility and on the curious idea that wealth is subject to the force of gravity. They have also mounted a sustained vendetta against local government, destroying the essential foundation for secure and positive local communities. A government that have, on the one hand, centralised power and, on the other, rejected strategic planning has been ill-placed to counter long-term and deep-seated problems. Even they have not pursued all of Adam Smith's ideas. In this squeamish age the idea that too high a level of unemployment can be reduced by heightened levels of child mortality has been too much even for them.
Most crime is petty and squalid with both victims and perpetrators living in deprived areas on

863
featureless housing estates where many families are on social security or below the poverty line. That has not been assisted by the present system of government grants to local authorities which places Westminster eighth, Liverpool 30th and North Tyneside (where last year's riots took place) 150th. The increasing centralisation of power in this country has left local authorities with less and less power to build decent housing or provide the services to the community which would prevent crime and increase social integration and local autonomy.
On 20th February a leader in The Times quoted Home Office research which indicated that,
"in years when the average personal spending rises little or even falls, property crime grows relatively fast".
Over 90 per cent. of crime is property crime. A quarter of that is motor vehicle crime; that is, mostly stealing car radios and other portable property from cars, rather than stealing cars. In view of the current state of the economy it is not surprising that property crime has risen by leaps and bounds.
I also believe that it is no coincidence that the 1981 riots on the streets of our major cities coincided with the previous recession, nor that we had serious disturbances in Cardiff, Oxford and North Tyneside last year. I do not look forward to the coming summer with much optimism.
To redress the existing damage to our society will not be easy. We need to pursue policies that are integrative rather than divisive. We need to reduce the gap between rich and poor. We need to develop a different value system which emphasises human rather than materialistic values. Education should be seen as an end in itself, not merely as a route to a non-existent job. Policing should be community based, not merely reactive. Surveys of people living on bleak housing estates have shown endlessly that people are concerned about hooliganism, vandalism and car parking, not about serious crimes. Yet most police resources have been directed to specialist squads dealing with serious crimes, drugs, robbery and so on. We live in an increasingly overcrowded and impoverished planet. We have, I believe, very little time left in which to develop a society in this country which will be sufficiently integrated, mature and resilient to withstand the difficulties of the years ahead.
4.25 p.m.
Lord Boyd-Carpenter: My Lords, it is a temptation to follow the noble Baroness in her disquisition on the causes of crime. However, owing to the strict time limit under which one operates I prefer to come straight back to the main central issue of the debate, which is the state of our economy, the responsibility of the Government for some of its difficulties and the remedies which could properly be effected.
Before I do so, I wish to add my tribute to the noble Lord who has just made his maiden speech. He made it with a confidence that for a moment made one almost forget that it was a maiden speech. I hope indeed that we shall hear him frequently in future. I have no doubt that we shall have that felicity.
864
The noble Lord, Lord Peston, opened the debate with a tirade—I think that that is the correct word—against the Government, alleging that virtually all the economic difficulties which the country is encountering were the direct and inevitable result of government policies which would have been avoided had the noble Lord, Lord Peston, been in charge of our affairs. But of course he neglected entirely to look at some of the more agreeable and cheering aspects of what is, in truth and fact, a very mixed situation. I am sorry that the noble Lord is not in his place. For example, he wholly ignored the fact that countries such as Japan, which have complete freedom as to where to invest and to make investments in industry, are investing and continue to invest in this country. Objective, sensible people seeking to invest profitably and to build up successful businesses would not invest predominantly in a country whose condition was anything like that which the noble Lord, Lord Peston, described. It is one of the reassuring factors of the present situation that objective investors are investing in this country. It obviously indicates the view that in the not necessarily long term, but in the reasonably short term, this country is in for an economic recovery in the profits of which those countries hope to participate. That is a very reassuring factor to which we should pay attention.
Another important factor—it has been mentioned briefly once or twice—is the way in which we are now virtually free from strikes. That is the direct result of the series of measures affecting trade union law and industrial relations for which the Government have been responsible. Year after year improvements have been made in our labour relations law and the result can now be seen in the great freedom from serious industrial disputes which we now enjoy. The fact that the trade unions now operate in an infinitely more sensible way than they did some years ago is again one of the cheering factors.
We are, of course, dealing with the consequences of a world-wide recession. There is no avoiding some of those consequences, particularly their effect on our export market. But the picture that the noble Lord, Lord Peston, sought to draw of this country in that situation was completely unreal. He did not refer to the most important aspect of Government policy; that is, their recent success in the battle with inflation. Indeed, if I understood him correctly, he went so far as to suggest that inflation did not matter to the poor. He said that the poorest section of the population would not suffer from it.
That was a most extraordinary observation. The noble Lord has only to contemplate what is happening in other countries which suffer from inflation. The Commonwealth of Russian States is one example and Germany some years ago is another. If one has inflation, with the value of money diminishing weekly, the poorest—that is, those with the least money —will be brought up against its effects most sharply and most immediately. To argue that policies which combat inflation are not designed or intended to have the effect of helping the poorest section of the population shows an utterly unrealistic approach to the problems of our economy. In fact, the

865
Government have been most successful in dealing with inflation. Our rate is now below the European average and it is extremely cheery to see that.
The noble Lord made another extraordinary observation. He said that if the Government had stated at the beginning of their career that they offered a 7.5 per cent. rate of inflation they would not have been elected. That is an interesting figure because it is exactly half the rate of inflation which subsisted throughout the Labour Government of 1974–79; the average rate was 15 per cent. Again, the noble Lord, in his anxiety to damage the Government in every possible way, seemed to be departing from reality.
I am extremely sorry that the noble Lord is not in the Chamber. I hope that he will read my observations. Although it may be an exercise of wild optimism I hope that they will have an effect upon him. I do not believe that a speech such as he delivered to your Lordships' House is particularly helpful in a debate of this kind. It is a debate on the second most important public problem with which we must cope. The first most important is the preservation of peace. Beyond that, the proper management of the economy is the most important of subjects.
As your Lordships may know, I was involved in the subject from time to time, having two tours of duty at the Treasury. I know that it is most difficult to judge various factors against each other and get one's priorities right. That is a most difficult aspect of the matter. The Government, rightly, have given priority to coping with inflation. Inflation produces misery all round, not only to the very poor but to almost everyone. It is damaging to the efficiency of the economy and to the morale of those engaged in industry and commerce. It is gratifying to note that the firm and courageous measures that the Government have taken have been extremely effective. We should express our gratitude for them.
The recovery is on the way. Of course, its timing is a matter of uncertainty and doubt. The fact that it is on the way is supported by most of the organisations which are in direct touch with industry and commerce. The recovery is coming as the result of the courageous handling by this Government of the policies to which I have referred. I am quite sure that they will bring us through the present difficulties. As the world recession recedes and as world trade builds up again, so this country will continue to play a leading part in that recovery. It will be possible to say, as in the moving words of the poem:
"The threats of pain and ruin to despise
To scatter plenty o'er a smiling land
And read their story in a nation's eyes".

Prison Management, Northern Ireland
4.35 p.m.
The Paymaster General (Lord Belstead): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement is as follows:
"Mr. Speaker, with permission, I should like to make a Statement on Lord Colville's report on the
866
management of paramilitary prisoners in Belfast prison. Before dealing with the substance of his report, which is published today, I should like to express my thanks to my noble friend Lord Colville for the thoroughness and speed with which he carried out a very difficult task.
"The House will recall the tragic events which gave rise to his review. On 24th November last a device exploded in the dining hall in C wing in Belfast prison. One prisoner was killed outright, another mortally wounded and several others less seriously injured. The efforts of staff in rendering first aid immediately after the explosion were in the highest traditions of the Northern Ireland prison service and earned the thanks of the relatives of the prisoners who died. On 26th November the Provisional IRA admitted responsibility for the outrage.
"Three inquiries were established: a murder investigation by the Royal Ulster Constabulary, which continues; an internal and necessarily confidential review of security procedures in the prison by a senior official of the prison service—most of its recommendations have been implemented and decisions on the others will be made shortly; the third strand was Lord Colville's inquiry into the operational policy for the management of prisoners of opposing factions in Belfast prison.
"The central conclusion of his report is strongly against further segregation within the prison system. It also recommends that in Belfast prison numbers in A wing, the only wing at present housing exclusively paramilitary prisoners, should be reduced; that out of concern for visitors' safety those prisoners should have separate visiting arrangements; and that time on remand in custody awaiting trial should be reduced, his preferred method being that the powers in Section 8 of the 1991 Emergency Provisions Act should be used.
"Mr. Speaker, I accept the report. I shall comment on each of the recommendations in turn.
"First, the question of segregation. Lord Colville brings out very clearly the increased risks posed to security by segregation. He says (and I quote): 'All the lessons from history suggest that segregation facilitates escapes, and escapes will give freedom to paramilitary fanatics of both factions who will kill and maim outside prison'. On security grounds I am satisfied that Lord Colville's recommendation is right.
"Moreover, I am also satisfied that segregation would make it more difficult to offer constructive regimes for inmates, as it already has at the Maze. It would constrain the flexible and effective use of the available accommodation. And the opportunity which segregation would provide the paramilitaries to reinforce their cohesiveness within the prison would have an adverse effect on the morale and self-esteem of staff.
"I turn now to the reduction of numbers in A wing. There are obvious advantages in keeping untried prisoners together in a more central location. I am pleased to tell the House that the governor can implement this recommendation

867
within the next few weeks, when the necessary construction work will have been completed, without the need to move those prisoners out of Belfast prison.
"The recommendation on separate visits is not free from difficulty. But Lord Colville believes that the change is justified in the interests of the safety of visitors and I have concluded that it should for that reason be accepted.
"The case for cutting down remand times has always been strong. Lord Colville concludes that it is now unanswerable and I accept that conclusion. Delays in these cases are, of course, inextricably linked to the terrorist situation, which gravely complicates the investigation of crime and the criminal process as a whole. But it is not acceptable that people should remain for long periods without a trial. Together with my ministerial colleagues, I am urgently considering how the very real problems which exist might best be resolved so that these unacceptable delays can be overcome.
"Mr. Speaker, segregation remains a key objective of the paramilitaries. In resisting campaigns by both factions, prison governors and their staff have implemented the policy of successive Administrations. There now have been three major reports by respected and independent figures which say segregation is wrong. Lord Gardiner, in his report published in January 1975 on measures to deal with terrorism, recommended that special category status—segregation writ large —should be ended and that the influence of the terrorist leaders must be reduced. Her Majesty's Chief Inspector of Prisons, Sir James Hennessy, in his 1984 report into the Maze escape of the previous year was in no doubt about the increased threat to security posed by segregation. Lord Colville having taken evidence from a wide range of people has come to the same conclusion. My predecessors accepted the recommendations of Gardiner and Hennessy and I in turn have concluded that I should accept the recommendations of Lord Colville. I do not believe that it would be acceptable to this House for the clear stand which has been taken over the years against segregation to be set aside as a result of paramilitary violence and in the face of unequivocal advice from three such distinguished sources and the powerful arguments that they have deployed.
"Mr. Speaker, the bomb explosion in C wing in Belfast was an act of terrorism no different from the murder of workmen at Teebane or the killing of people who happened to be in a betting shop at the wrong time. None of those events will deflect the Government from what they believe to be in the best interests of the people of Northern Ireland." My Lords, that concludes my right honourable friend's Statement.
4.42 p.m.
Lord Prys-Davies: My Lords, I thank the Minister for repeating the Statement which the Secretary of State made in another place. Moreover, on these
868
Benches we wish to be associated with the tributes which have been so deservedly paid by the Secretary of State to the noble Viscount, Lord Colville, who conducted the inquiry with his customary thoroughness, fairness and speed.
It seems to me that once again the people of Northern Ireland are immensely indebted to the noble Viscount, Lord Colville. This report is another distinguished contribution.
As is pointed out in the Statement, the inquiry—which was the third one to be set up in Northern Ireland—was set up after the act of terrorism in Crumlin Road gaol on 24th November last. We are pleased to note from the Statement that the internal report of the review of security procedures has been completed. Of course, that is a confidential report but it is reassuring to know that the recommendations are being implemented. We trust that the RUC is also making progress with the murder investigation, because it was a murder. In fact, two murders were committed in the gaol as a result of that act of terrorism.
The inquiry by the noble Viscount, Lord Colville, made four recommendations, which are referred to in the Statement. We are pleased that they have been promptly accepted by the Government. As the Statement makes clear, the issue of segregation of prisoners at Crumlin Road gaol has been a critical issue for years. We are gratified and grateful that the Government have accepted that recommendation. We fully support the Government's stand against segregation which, after all, is one of the key objectives of the paramilitary organisations which seek to dominate the prison.
On that particular recommendation, I have not had time to study the report but the Statement tells us that the central conclusion of the report is strongly against further segregation within the prison system. Does that mean that for some time the present degree of segregation will continue?
The second recommendation of the noble Viscount, Lord Colville, is that the number of prisoners in A wing should be reduced. I am relying on my memory but I believe there were about 100 prisoners in A wing on that date in November last year. We understand from the Statement that building works are in hand which will make it possible to bring about the necessary reduction. We are pleased to note from the Statement that those works are likely to be completed within a few weeks.
We fully agree that time on remand in custody awaiting trial should be reduced. That is a difficult issue involving many interests. Is the Minister able to throw any further light on how the Government hope to be able to achieve that desirable objective?
The final recommendation is that there should be separate arrangements for visits. Again, in principle one agrees with that but presumably it will take a little time to organise.
The situation in Crumlin Road gaol has been volatile for years. Therefore, from these Benches we join with the Minister in paying tribute to the members of the prison service who are employed in that particular prison. Between June and September of

869
last year 40 prison officers were injured in that prison. The homes of some prison officers were also attacked. Therefore, we owe the prison officers in Northern Ireland a great debt of gratitude. I wonder whether the Minister knows how the prison officers are responding to the recommendations. I spoke to a member of the prison service just before coming into the Chamber and I understand that they are fully supportive of the Statement.
We fully support the Statement and its recommendations because they are in the best interests of Northern Ireland.
Lord Holme of Cheltenham: My Lords, from these Benches I give an unequivocal welcome both to the report of the noble Viscount, Lord Colville, and to the Government's very constructive reaction to his recommendations. The House, Parliament as a whole and the Government are extremely well served by the invariably judicious and thoughtful recommendations of the noble Viscount, Lord Colville. Once again, that is the case on this occasion.
The issue at the centre of the report is segregation of prisoners. The report states:
"There is no middle ground between the fundamentally opposing attitudes".
I am certain that the attitude which the Government have taken—recommended by the noble Viscount, Lord Colville, and which we on these Benches support—is right. We cannot be seen to allow the terrorists and the paramilitaries a say in how prisons are run. We cannot let the terrorist culture pervade other prisoners who, because of segregated community loyalties, would be infected by the germ of terrorism. We cannot let that happen. We cannot let them decide how prisons should be run. I am quite certain that the Government and the noble Viscount, Lord Colville, have come to the right conclusion.
As regards time on remand, the noble Viscount, Lord Colville, is right to draw our attention to the fact that a terrifying period of one and a half to two years is the average time which prisoners spend on remand. I should like to ask the Government what they believe should be done about that. I understand that the noble Viscount, Lord Colville, has recommended that the average should be reduced from one and a half to two years to half of that time—something like nine months. Even nine months is a long time to be on remand without trial.
However, in bringing down that average—and perhaps the Minister will tell us whether he accepts the specific recommendation on that—what will be done in particular about the 11 prisoners who have been on remand for more than two years? Within the generally hopeful response given by the Government of bringing down the time, what is to be done about the 11 specific prisoners?
As regards separate visits I too welcome the conclusions drawn. They seem humane and sensible, although I understand the difficulty. I welcome the fact that the Government feel able to accept them. The noble Viscount, Lord Colville, says how tough the conditions are in Crumlin Road prison. What are the Government's plans for spending the £20 million
870
which have been allocated for the improvement of the gaol? I hope that it can be done urgently. They are very grim conditions.
There is one final question that I wish to ask. Do the Government have any comment on the noble Viscount's understated but nevertheless quite clear dismay, shown in paragraph 2.5 of his report, that the Loyalists were locked up after the incident without any apparent help or consultation in what must have been a situation of great fear and concern to them? It certainly cannot be thought to be conducive to good conditions and attitudes in the prison. With the exception of those reservations and questions, from these Benches I very much welcome both the report and the Government's reaction to it.
Lord Belstead: My Lords, I am grateful to both the noble Lords, Lord Prys-Davies and Lord Holme of Cheltenham, for their reception of this report. In particular I thank both noble Lords for stating their parties' support for the stand against segregation which is in the report and which has been accepted unequivocally. The other three recommendations have also been accepted. The recommendation on segregation has been accepted unequivocally by my right honourable friend. It is enough for me simply to rejoin that this is the third of three distinguished reports by independent observers and investigators on the Northern Ireland scene. In the words of the noble Lord, Lord Holme, it is entirely wrong for the prisons to be run by any faction of those who are in them. I am grateful to both noble Lords for their unequivocal support on this extremely important point.
The noble Lord, Lord Prys-Davies, asked me about the meaning of the words in the Statement as regards the recommendation that there should be no further segregation. He wonders whether that means that segregation at this particular prison is something which exists and which is not going to be attended to. It does not mean that and I say that unequivocally. The situation in Belfast prison is that, following representations which were made in 1990 by certain public representatives, the governor introduced new unlocking arrangements to reduce the possibility of confrontation between the factions in the prison. These arrangements involve staff making an assumption about which faction will accept the offer of exercise or evening association so that it is possible to that extent for that particular faction to be taking exercise or evening association without the other faction being there.
The Government feel that these are sensible and pragmatic arrangements which fall far short of segregation on the wings, which is exactly what the paramilitaries are after. I say quite bluntly that there is still segregation at the Maze prison. I make the point that that prison is an establishment which has been having a declining prison population. Anyway, it is the policy of the prison service always to encourage occupants of the Maze prison to move to Maghaberry prison in order to conclude their sentences. As both noble Lords will know that is an integrated prison.
The noble Lord asked me perfectly fairly how we were going to move prisoners, as the recommendation says in the report and which my right honourable

871
friend has accepted, from A wing to other parts of the prison. The Statement which I have repeated says that not only can we accept that, but we can do it without actually having to move prisoners out of and back into the prison. We will move out some sentenced prisoners and reallocate some accommodation within the prison. We plan that the present A wing population will be divided between A and B wings and some physical construction work will be required. However, I very much hope that new arrangements will be in place literally within the next few weeks.
The noble Lord also asked me how prison officers have reacted to the main recommendation against segregation. Very helpfully, the noble Lord said that from personal contact his understanding was that prison officers would be very positive. I add to what the noble Lord said by saying that, as always, prison staff will implement ministerial policy. In case that sounds rather complacent, I add that it has always been the line which has been taken by the Prison Officers' Association and the Governors' Association. I am confident that, whatever the challenges involved, the prison officers in Belfast prison will do exactly that.
The noble Lord, Lord Holme of Cheltenham, asked what the Government were doing as regards waiting times on remand. I admit to the noble Lord that that is the most difficult of the recommendations. My right honourable friend is determined to do everything possible to reduce the length of time which some prisoners in Northern Ireland have to wait on remand before trial. Figures are deployed in the report. An official working group on delays in the criminal justice system has been re-established to report to Ministers. It will seek to identify practical and effective ways of reducing remand waiting times and to consider the implications of introducing statutory time limits for scheduled cases under Section 8 of the Northern Ireland (Emergency Provisions) Act 1991, which is the specific recommendation that my noble friend Lord Colville makes.
The noble Lord asked me about the 11 prisoners who have been on remand for more than two years. I know that every effort will be made to see that their cases are brought forward. Without going through a long list of things which were done, it is right to say that a number of administrative measures have been introduced over the past few years to help reduce waiting times. They included a review of the organisations' staffing levels at the DPP's office, at the relevant sections of the RUC and at the forensic science laboratory; the establishment of a fast stream to identify and take forward cases which can be brought to trial relatively quickly. There was also an increase in the strength both of the judiciary and also of the numbers of Queen's Counsel at the Northern Ireland Bar. I very much hope that, with these administrative arrangements being in place, we shall be able to see those cases brought to court in the near future.
The noble Lord quite rightly said that my noble friend's report says that the regime in Belfast prison is tough and asked what the Government are going to do
872
about that. To a large extent the answer lies in the hands of the prisoners themselves. The present regime in C wing shows what can be done when prisoners co-operate together and with the management of the prison. Many of the restrictions on the paramilitary type prisoner, such as tightly controlled movements, were introduced following representations and have resulted in a number of improvements. In addition, as the noble Lord probably knows, we have plans, which we have stated publicly on many occasions, to refurbish the prison as soon as we possibly can. We have already begun making financial arrangements for that plan.
The noble Lord said that the report indicates that prisoners were locked up after this terrible explosion. Yes, that is true, in a situation which was terrible for all concerned, both staff and prisoners. However, action has been taken in the prison. For instance, psychologists have been appointed and put into place very quickly. A very great deal was done by the supportive services including the chaplaincy. In concluding what I am saying to the noble Lord, Lord Holme, I remind him that at the beginning of the Statement there was a tribute to staff which I believe was well deserved.
5 p.m.
Lord Blease: My Lords, my remarks will be very brief. I have one question to put to the Minister, but first I should like to thank him for repeating the Statement and join with my noble friend Lord Prys-Davies, the noble Lord, Lord Holme, and the Minister in acknowledging the debt of gratitude we owe to the noble Viscount, Lord Colville. I am sure that all peaceful citizens in Northern Ireland who have been living in anxiety and fear also join with their thanks. I am certain that all those involved with the prison services, including the prison officers, the probation board, voluntary workers in the prisons and also prisoners and their families will welcome this timely report.
The point I wish to make to the Minister concerns the administrative arrangements he mentioned. I am pleased to hear the recommendation that remand time should be reduced. Will the Minister consider publishing information about this report to the public as well as to those at official level? I am especially concerned about welfare groups associated with prisoners, such as bona fide welfare groups from Churches and other such organisations. The sooner they are aware of the recommendations and are able to communicate them to prisoners' families and to prisoners themselves, the sooner the heat and the tension that has arisen will be relieved. It will be useful to consider not only the administrative arrangements that are to be made in the legal sense but also the promotion of the information and how it is to be achieved outside.
Lord Belstead: My Lords, I thank the noble Lord, Lord Blease, whose knowledge of Northern Ireland affairs, and specifically of these affairs, is very extensive. The report will be on sale tomorrow in Her Majesty's Stationery Office bookshops and there will

873
inevitably be publicity on TV and radio. But the real answer to the question of the noble Lord, Lord Blease, is that one of the matters in which the prison service in Northern Ireland can take pride is the relationships which the service has with the splendid voluntary organisations who do so much for the prison service, not least in transport matters and also in running visitors' centres outside the prisons. I have no doubt at all that the prison service will be talking with voluntary groups as well about the contents of this report.

The Economy
Debate resumed.
5.3 p.m.
Lord Jenkins of Putney: My Lords, we return to the Motion, so well moved by my noble friend Lord Peston, to call attention to the state of the economy and its social consequences.
After 13 unlucky years of Tory rule we find ourselves in the longest recession this country has endured since the 1930s. That is perhaps an aspect of the state of the economy, but it is also an aspect which has grave social consequences of all kinds; and the Government expect to get re-elected! If they are re-elected it will be a case of never in the history of British politics have so many been conned by so few.
Sir John Harvey-Jones said in the Observer last Sunday that we have declining production, falling GDP, diminishing re-investment in productive capacity, increasing unemployment, falling property prices, a record rate of house repossessions, near record rates of bankruptcy, and increasing bad debt provision by the banks. What do the Government call this scene of disaster over which they have presided? They call it ideal conditions for recovery.
They admit that the light at the end of the tunnel which Tory Chancellors used to see—indeed, the present Chancellor caught a glimpse of it earlier in his incumbency —has temporarily disappeared; but the Chancellor desperately hopes that it will not be long in coming back. It is just round the corner, he imagines. No doubt it will miraculously reappear if Mr. Major is sent back to Downing Street, they plead.
The noble Lord, Lord Brabazon, who spoke on behalf of the Government, put a brave face on the sad condition. He did rather better than some of his colleagues I have witnessed in another place Ministers who looked to me rather like a bunch of con-men who had lost their confidence. The Government say that it is not their fault that we are in this mess. They say that we have got ourselves into it by over-consumption. Now they say, with even less conviction, that we can only get out of the mess by resuming our bad old habits and over-consuming still more.
Who is going to swallow that prescription? Will the banks begin lending recklessly again? Is the increasing consumption to he met by increasing home production or will it be met by further increasing imports? As my noble friend Lord Peston pointed out, we cannot even achieve a trade balance now. The Government's medicine will surely kill the patient.
874
The Japanese and German economic performance is not based on "hands-off" government and low taxation; it is based on government intervention and government support, and on very low defence expenditure. But that is anathema to our ideologically-driven Government and to their supporters who mismanage and misdirect much of our declining industrial base. It would be interesting to see whether, as I suspect is the case, that like our incompetent Government our business directors are also mainly the product of our so-called public schools. That is another handicap which they do not suffer in Japan and Germany.
The Institute of Directors is the equivalent of the old Trotskyite fringe in the Labour Party. Unfortunately for the Government, their Trots are still influential. While that remains the case, as Sir John Harvey-Jones has pointed out, it is not easy for I British business to establish the sort of relationship with civil servants which has been a factor in finding common goals in competing countries. Fortunately, compared with the Institute of Directors, the more important CBI is relatively sane.
The truth is that over the past 13 years, taken as a whole, we have been losing ground. The outdated doctrines which still underpin—or perhaps the word should be undermine—the Government are a main cause of the trouble. It is time for a change. No sudden cure is possible, but it is possible to arrest and reverse the 13-year decline. For that we need a new government, and Labour is ready to take over. For 13 years the electorate has been conned into returning a Tory majority. If the voters fall for the con yet again, the consequence would be irretrievable disaster.
5.10 p.m.
Lord Selsdon: My Lords, by background and inclination and in spirit I am an islander. I take as a theme for my intervention today one of those sayings I remember as a child when things were bad and one felt depressed—"Pray for the undertaker's wind", that soft offshore breeze that carried away all the bad thoughts and bad smells and left clean air in which to sleep and think.
In taking as a theme the word "undertaker", I remembered that somewhere "undertaker" was looked upon once with enthusiasm and pride. It was replaced, as the noble Lord, Lord Joseph, reminded us, with the word "entrepreneur". But an undertaker was someone who initiated or took part in a business enterprise. The Oxford English Dictionary today puts after that definition the word "rare". Indeed there was a period when the undertaker was extremely rare. But a new wind blew with this party when it came to government and created what we called the spirit of enterprise which has been attacked today. It encouraged people to go out, to start on their own with pride, to borrow money with pride, and build businesses. That spirit led to a change of attitude in this country which, whatever our political beliefs may have been, we had to welcome.
Someone will ask, "What went wrong?" We have heard analyses today of a number of factors. I shall touch on a few briefly. What went wrong involved not

875
just domestic issues or international issues but a failure to recognise what was being said at the coalface. I am not a bright economist but I have often thought, when governments have done things that I have felt were wrong, "Why did they do it?" I believe there is a long lead time when information which is the truth about an economic situation makes its way through the corridors of Whitehall to the thinking minds of the Treasury.
The first sign to me was when we had moved into Europe and should have joined the ERM, which I supported. The noble Lord, Lord Joseph, did not. The mistake was that we joined it too late. That has been said before. We joined it after the crisis had come and we were forced to raise interest rates. As a result, we ended up going in at too high a rate. The second sign was the over-reaction in relation to Black Monday and the crash of the Stock Exchange. That was a fairly shallow reaction but it was, as noble Lords on all sides of the House have said, predictable. They would perhaps have reacted in the same way. The stock markets have a habit of predicting recessions way in advance of things. We were probably in for recession in any event, but that it hit us earlier and harder is obvious. Indeed when I last spoke on economic matters I referred to a really great depression which I believed we were in and would possibly remain in for some time.
I do not have a solution but I believe that in part of this debate we have a right to make suggestions to government. I shall do so on a couple of fronts. I begin on the home front. The depression at home is in part real and in part psychological. I shall direct my remarks, if I may, to the Liberal Democrat Benches because one of the factors that causes greater depression is fear of loss of wealth and the feeling that recovery will never take place. We are, within Europe and within the G7, the greatest home-owning democracy. The fear that houses may be repossessed or that the value of our houses may fall is a very depressing factor indeed. The initiative taken by the Government—perhaps encouraged by noble Lords on those Benches—of removing stamp duty temporarily should be extended so that stamp duty is removed altogether for first-time buyers. That would help to stimulate the market. One does not look for help for the top end, but for those who are marrying and starting out there has to be a starter move because we will not change the attitude—the good attitude—of wishing to own homes.
The second area lies in this strange question of mortgage relief. I am one who opposes the whole concept of distorted mortgage relief. However, if there is no support for homes at this time we may have this continual feeling of depression as wealth is tied up in houses.
The third area on the home front that should be considered —I do not follow any socialist policies on this—is spending on infrastructure. There always needs to be spending on infrastructure. The time to spend money on infrastructure, if one has to, is when it is cheaper to do so than ever before. At the moment the water authorities, which have been privatised quite
876
successfully, have recognised that they can complete their infrastructure more quickly, more efficiently and at a lower cost today than they could in a boom period. I suggest that the Government might at this time consider advancing their own infrastructure programme. They may find that they can do it far more cheaply today than if they defer it over a longer period.
I shall now move into international themes. We think that the depression applies only to us. I thought that we were way behind other countries but I have just been to Germany, France and Switzerland. I have also met Norwegians and others. I must tell the House that in many cases their state of depression is greater than ours although from different bases. At one time Switzerland had negative rates of interest. The rates are now 7 per cent. or more. Such countries are not used to it. Germany also has its problems. France may come out of depression more quickly but the North Sea area of Norway and the whole of Scandinavia have suffered serious problems. It is not a domestic issue. We must ask ourselves how we can recover, because in a way it will be an international recovery that leads us out of depression.
The Labour Party says "invest", but one only invests if one sees an opportunity to trade. Some say that my party believes that the recovery should he consumer led. All recoveries should be genuinely trade led. At the moment, with around 90 per cent. of the world virtually cut off from the G7 group because of currency problems, we have created by accident a narrower and narrower market. If we trade only with G7 countries we are incestuous and cannot create growth.
I suggest that the Government might look again at increasing the resources made available for the financing of trade and extending such concepts as the know-how agreement. They should not withdraw in these areas, as has happened before, because manufactures cannot be sold to countries with soft currencies unless there is some form of support. Bilateral trade is the way to encourage growth.
The Government have made an important point on which I support them. Our inflation has come down to a level which is below the average of the G7 countries and of the EC. That is commendable. But if part of the policy is the use of interest rates, and if our rate of inflation is below the average of the EC and the G7 countries, why are our interest rates 2.5 per cent. above the average of those countries? How can the United States, which had interest rates of 10 per cent., drop them down to 3 per cent. or 4 per cent. and not suffer? In fact the dollar is relatively stable.
I believe that a way could be found, perhaps in discussion with other members of the ERM, of moving towards a substantial reduction in interest rates. I do not believe that our own interest rates should ever be allowed to rise above twice the prevailing rate of inflation. At 10.25 per cent. they are too high. Perhaps the past has strapped us into an undesirable strait-jacket. Be that as it may, the point should be considered.
We shall not move out of this depression quickly and that may not be a bad thing. I have been taught

877
by my son, who is a pupil of the noble Lord, Lord Desai, that when one has depression, ultimately the level of activity falls to a minimum. There is a minimum level because of government spending even though there may be postponement of decision. Then the shrewd and wise man or wise virgin invests not for tomorrow but for the day after the day after tomorrow —for the future. Production has been cut back and we have an efficient industry. There are prospects of a good recovery for us in competition with others.
At the end of my allotted time I return to the theme of the undertaker. I ask myself why that noble person, the man who went out to help people to do things, is replaced by what in French one calls a croque morte. When examining this I came to the conclusion that there were people around who wanted to deal with the dead bodies of good people. They used to go and bite the toe of the body to see whether it was alive or dead, as may have happened with noble Lords opposite today. They would say as they bit it, "Croque madame" or "croque monsieur". One is a toasted ham and cheese sandwich and the other a toasted cheese and ham sandwich. I would not accuse noble Lords opposite of being "old croques", but their policies certainly are.
5.20 p.m.
Lord John-Mackie: My Lords, I think that I have seen the day when I could get up and make a 10 minute speech as good as that of the noble Lord who has just sat down without a note of any description. Perhaps noble Lords will excuse me if, at my age, I use what might be termed "copious notes". I should like, first and foremost, to congratulate my old friend the noble Lord, Lord Rodgers, on his excellent maiden speech and on the fact that he concentrated, and put across a very good point, on the construction industry. En the House of Commons we used to sit on the same Benches; but he has moved around since that time. However, I notice that he is sitting at the end of the Chamber and that he has not far to go to move across if he wishes to do so some day.
I propose also to speak about the economics of my own industry. But I should like first to point out what I suppose are the social consequences mentioned in the title of the Motion in some industries, as illustrated by the headlines of the Observer which I read about three weeks ago in the business section. I was amazed at the eight headlines that I read. I have the newspaper here with me should any noble Lord doubt my word. I have put them together in order. The first one said, "Virgin Atlantic dips to £3 million loss". The second one was, "Ramsden lost £57m on the horses". The third one said, "Bank resists rate cut as redundancies mount". The fourth one referred to "Fraud: Nightmare on Elm Street". I do not know where Elm Street is, but that was the headline. The fifth read, "Mafia linked to $800bn share scam". Again, I am not too familiar with the word "scam". The sixth stated, "Axe poised over NatWest". The seventh read, "Levitt faces £56m fraud charges". The eighth said, "Mayhew acquittal threatens Guinness II". Then, in the corner of the newspaper, there was a nice little piece about one of my friends, Mr. Peter Walker, who has collected
878
something like £400,000 to leave Maxwell's empire. I do not know what the pensioners are saying about that detail, but I thought it was worth mentioning.
If one adds to that list what is happening at Lloyd's and at Maxwell's—and of course I do not want to embarrass noble Lords opposite on the headline which appeared in the Independent today, but I think that it is one of the social consequences which will have to be investigated so far as I can see—one wonders what is going on in those businesses, and what the directors do which allows such things to happen. I do not understand it. I am glad to say that my noble friend Lord Dean of Beswick, who is not present today, has tabled a Question for Tuesday of next week on the matter. I look forward to hearing the Government's reply.
I turn now to agriculture. Farming, forestry and horticulture use the land in this country and the three together form our largest industry. Farming and horticulture together are a very good second. We employ directly 650,000 people and produce up to 75 per cent. of our temperate foods. Turnover is £12.5 billion, and of course the processing and distribution of that turnover creates many jobs in other industries. That is something that we are inclined to forget. Over the past few years, farming has also been spending about £8,000 million on inputs, services and capital goods, which create industries to produce them. Those industries find it of great value to have home business. They can also export, particularly as regards tractors and much of the agricultural machinery that we produce in this country.
I do not wish to bore your Lordships with too many figures, but I should like to give the House some idea of the increases in productivity. From 1950 to 1989 the rise in wheat was from two-and-three-quarter tonnes per hectare to seven tonnes per hectare. I must give the plant breeders, for whom I have great respect, considerable kudos for that. They have done a tremendous job in giving us plants to enable us to do such things.
Production of milk rose from 2,500 litres per cow to 4,750 litres per cow. That is nearly double. That has been achieved by a tremendous improvement in the nutrition and the management of the dairy cow. Increases in labour productivity, taking 1978 at 100, rose to just touching 160 in 1989. The whole country's economy on the same basis rose to just under 130. That is roughly the picture up to the beginning of 1990, except that a trade balance in food in 1980 of £2.8 billion in our favour has gone to a £12.8 billion deficit in 1990—that is exactly 2.3 per cent. of gross national product.
That cannot be allowed to continue. Over the past 20 years, but particularly in the past 10, agriculture has lost 122,000 workers—that is, 31 per cent. At the same time, the number of farmers has dropped from 230,000 to 178,000. That is a fall of 52,000—over 20 per cent. Bankruptcies are about 200 per year. That figure does not include the enormous number giving up voluntarily. All told, the farmers leaving the industry amount to about 50 per week. That is not surprising when the drop in profits is just touching 50 per cent.

879
What is the effect of all that? There are two main ones: the physical and environmental change in the countryside; and the loss to the economy of a fully productive agriculture. Apart from anything else, farmers have taken 400,000 acres out of production by taking set-aside grants. That means a loss of about £80 million to £100 million worth of production, plus the cost of the grants.
The average size of farms in the UK is about 180 acres. If the present trend continues—and I discussed the matter with my noble friend Lord Carter who is not present in the Chamber today—it will have a tremendous effect. They will get bigger and bigger with more emphasis on cropping and less on stock. It is stock that we require in this country to produce milk, beef, and so on. We need a balanced agriculture. We shall not achieve that if the present trend continues. The working population will decrease and there could be a complete change in the countryside as we know it. We do not want that to happen.
I could say more. I have not touched on forestry. It is too big a subject to deal with in 10 minutes; nor have I mentioned GATT or the common agricultural policy. The delay in coming to some decision between the two is most frustrating. Farming is a long-term business. A bicycle can be produced in a few days, but it takes nine months to produce a calf, and you need a year's warning to produce a crop of wheat.
British agriculture is capable of producing nearly 100 per cent. of the food that the nation requires. If that was done, it would mean a boost to the economy of more than £1.5 billion. Agriculture will need some help and encouragement if it is to do that—and, my goodness! that is sorely needed. I believe that the noble Lord, Lord Selsdon, will agree with me on that. We need that help; but, above all, we need the promise of long-term planning. The uncertainty that has been created is having a very bad effect on the farming community. I like to think that whichever party forms the next Government. it will recognise that point and will ensure that agriculture is given its proper place in the economy.
5.30 p.m.
Lord Cobbold: My Lords, first, perhaps I may add my congratulations to those that have already been paid to my noble friend Lord Rodgers on his excellent maiden speech. I welcome him to his rightful place on these Benches. As many noble Lords have acknowledged, the recession is not unique to Britain and our recovery from it necessarily depends upon developments in other major economies, as well as here. However, we cannot blame our neighbours for the fact that the recession here is worse than elsewhere.
The blame for that must lie closer to home. To be charitable—as several noble Lords have been—we seem as a nation to suffer from an addiction to boom-bust economic management. But the Government cannot escape the blame for their inaction in early 1988, and especially for their Budget at that time which fuelled the credit blaze and the
880
house price bonanza. Action came too late, by which time the damage was done and the path for our current difficulties was set.
We now have a situation where all parties profess to believe that the boom-bust cycle must not be allowed to repeat itself. All are committed to ever closer convergence with our Community partners and, above all, to the exchange rate mechanism. It is important to remember that our membership of the exchange rate mechanism is one very important difference between our situation now and our situation in the previous recession.
There are several other important difficulties, all of which have some alarming implications. I shall touch on three. First, the extent of consumer indebtedness is quite unprecedented. As was highlighted by the noble Baroness, Lady Hollis, personal debt in relation to personal disposable income is running at no less than double the level of the previous peak nearly 20 years ago in 1973. As a corollary, personal discretionary saving collapsed during the second half of the 1980s and began to recover only in 1990 as the recession started to bite. It is still at levels well below those pertaining in the last recession. That suggests that consumers, faced with an unprecedented level of debt, with a depressed housing market and with unsure employment, may require a prolonged period in which to build up their savings again. Consumer expenditure may thus remain sluggish for some time to come.
The second rather alarming difference between this and previous recessions is the rapidly rising public sector deficit. There was a continuous swing from deficit to surplus during the 1980s but at the end of that decade the combination of the slump and the Government's discretionary spending increases had caused a dramatic reversal. My noble friend Lord Jenkins has already referred to the worrying increase in debt. A public sector borrowing requirement of £30 billion is widely expected for next year. If in the event consumers prove more cautious than expected and Treasury growth forecasts are not achieved, that figure could be pushed still higher to levels that have not been seen since the crisis years of 1975 and 1976 when Denis Healey turned back from Heathrow and the International Monetary Fund stalked the corridors of Whitehall.
The third major difference—and perhaps the most worrying—is the weakness in the balance of payments, to which several noble Lords have already referred. A dash for growth foundering in the face of a balance of payments deficit is a familiar story in this country. However, in previous recessions we have actually run a balance of payments surplus, with the deficit arising only as we emerged from the recession. This time we have a deficit of about 1 per cent. of gross national product at the trough of a very deep recession.
The significance of those three factors is that we are on very thin ice. We face serious consequences if we succumb to over-stimulating the economy in a vain effort to buy votes. Our chances of maintaining our ERM commitment would evaporate—the noble Lord, Lord Joseph, and probably several other noble Lords would welcome that—but it would mean a return to

881
high interest rates, to currency depreciation and to renewed inflation. No, the patient needs careful aftercare if he is to return to normal health and be fit enough to play alongside our Community partners.
There is one hopeful sign—perhaps I do not fully agree with my noble friend Lord Jenkins on this. There are some encouraging signs that pay increases may at last be responding more flexibly to economic conditions than in the past. Percentage pay increases have recently been falling rapidly and it is vitally important that that trend continues. The only hope of achieving the prize of non-inflationary growth lies in reducing our inflationary expectations and our pay increases to 3 per cent. or less and keeping them there. That is the advantage to be gained from our commitment to the exchange rate mechanism, and we must not shrink from it.
The economy may now be past the trough of the recession, but it needs an extended period of convalescence. I hope that the Chancellor will not be blinded by perceived electoral advantage into taking measures that will start the boom-bust cycle all over again. That would be very damaging to this country and decidedly ungracious to his successor.
5.36 p.m.
Lord Hatch of Lusby: My Lords, I am pleased to be sandwiched to speak between the noble Lord, Lord Selsdon, who has already spoken, and the noble Lord, Lord Boardman, because they were two of my colleagues on the Aldington Committee on overseas trade in 1985 when we, as a cross-party committee, forecast precisely what would happen and why. We said that, unless manufacturing and overseas trade were supported by the Government following the decline in oil revenues, what has happened would happen. I do not intend to go into the details of that because we have debated it several times, but our conclusions are still worth reading as an analysis of the present situation. The Government disregarded our conclusions then and the results have been as we forecast.
When the noble Lord, Lord Henley, replies to the debate, I think that we are entitled to hear a statement of Conservative socio-economic philosophy and the policy on which the Conservative Party bases that. I think that we are entitled to that because we are bound to be in some confusion. In 1980–81 in the first recession under this Conservative Government, we were told that it was wrong to increase the public sector borrowing requirement because that would be inflationary. We were told that we must restrict our money supply and that it was wrong to budget for a deficit. We were told that government spending would only increase inflation, that financial deregulation would set the markets free, that trade unions must be hit hard in order to bring them to heel, that manufacturing industry had to be devastated—the Government called it a "shake-out" —and that there had to be a massive increase in unemployment.
Then in the latter part of the 1980s we saw the Government expanding credit, increasing the money supply, cutting taxes, shadowing the mark and
882
encouraging bank lending—with the normal consequence of high inflation followed by high interest rates. Which of those is the Government's policy? Or, as we are now told in this second Conservative recession, which has lasted from 1990 to the present day or even some time into the undisclosed future, is it the case that the one feature that is common to both is that unemployment must rise? Indeed, unemployment has risen by over 1 million in the past 12 months. This time, however, we are told that it is right for the Government to borrow to pay for tax cuts; for the Government to increase tremendously the PSBR, and that there should be a massive increase in the money supply. Which of those policies is now being followed by the Government? Which belongs to Conservative socio-economic philosophy and the policies derived from it? We have a right—I hope that the Minister will fulfil the obligation—to be told clearly what is the Conservative Party's philosophy and what are the policies upon which it is based.
Within all the various trends of Conservative Party policy there has been one constant theme: provided that people become richer, that benefit will trickle down to all the other stages of our society. The trickle-down theory was the rationale for cutting the top rate of income tax. Has that worked? Will the Government tell us whether it has worked? I shall supply them with some hints. From 1979 to 1989—taking the annual real income of an average household —the income increase from £10,560 to £13,084 (at 1989 prices) is £2,523 per year; but the income of the poorest 20 per cent. of households fell from £3,442 to £3,282, which is a decrease of £160 a year. We should not let the Government tell us that all sections of society have benefited from their economic policies. They have not. The poorest have become poorer in absolute terms. The poorest households are today suffering from a lower household income than in 1979. Those are the Government's own figures. However, the richest 20 per cent. of households have increased their average income from £20,138 to £28,124, an increase of £7,986—just about twice the average income of the poorest households.
On other figures, the poorest 20 per cent. have lost 4.6 per cent. over that 10-year period, whereas the richest have increased their income by 39.7 per cent. I challenge the Minister to deny those figures which are taken from government sources. In this country the poor have become poorer, but we live in a global society. It is right in the debate also to ask what have been the social effects of economic policy on rich and poor in the world as a whole.
It is hardly necessary for me to repeat that over the past 10 years, especially in the poorer parts of Africa, there has been an absolute decline in standards of living. They have declined to the mortality of starvation. What has our country been doing during that period? I say this again in reference to the Aldington report. The committee went into this matter in great detail. We were given evidence by manufacturers in this country about the impact British aid has on their trade with the developing countries. Between 1979 and 1980 our exports to developing countries fell from 27 per cent. to 18.5 per

883
cent., a decline of 8.5 per cent.; our imports declined from 20.8 per cent. to 14.5 per cent., a decline of 6.3 per cent.; and our share of world trade with developing countries also declined, but I do not have time to give the figures.
That means in effect that we have been diverting our trade from the developing countries—the half of the world where the market is closed—to our developed competitor countries. I shall give one example that I have given before: in 1985, British Leyland closed down the Bathgate factory which made vehicles. Why? It was because it had been tooled up to make vehicles for Nigeria, but the oil price collapse in Nigeria meant that they could buy no more than 2,500 vehicles, although the factory had been tooled up to produce 10,000 vehicles. The Bathgate factory was closed; British workers were put out of work; and the Nigerians did not have the vehicles to transport food around the country. That is the direct connection between our economic and social standards and those of the developing world.
As we know, during their period in office the Conservative Government have reduced aid to the developing world from 0.53 per cent. of GNP (as it was when we left office) to 0.27 per cent. The committee was told time after time that aid and trade go together. Aid assists British trade. We now see that not only has that aid been reduced; there has been a change in the direction of resources. More resources are coming from the developing world into this country and the rest of the developed world today than are leaving the developed world for the developing countries. The Government's economic policy has caused deepening class polarisation at home and has contributed to the widening gap between rich and poor in our global village.
5.47 p.m.
Lord Boardman: My Lords, I am happy to be reminded by the noble Lord, Lord Hatch of Lusby, of the Select Committee upon which he, my noble friend Lord Selsdon, and I were privileged to serve. I think that he will agree that many of the complaints made in the Select Committee report about manufacturing industry have since been remedied.
Lord Hatch of Lusby: My Lords—
Lord Boardman: My Lords, I shall not give way, if the noble Lord will forgive me. We are debating the state of the economy and its social consequences. I shall take the state of the economy first. I concede straight away that there has been the most protracted recession since 1945. It has not been the deepest by a long way. We have had six quarters of recession; that is, if we ignore the sectional point about the oil. I am sure that we are now coming out of the recession. All the signs are that we are coming out of it in the first quarter of this year. It was most severe in the first two quarters of last year. It steadied, and almost levelled out, in the last two quarters of last year. All the signs are now that we are on that improving trend.
There were reasons for the recession, and they have been referred to during the debate. Obviously some
884
mistakes in the economic management were made. Reference has been made to the drop in interest rates after the October 1987 crash. With hindsight we now see that that was wrong. Noble Lords opposite rightly do not take advantage of that fact because they thought, as I thought, that it was the right course to take at that time.
What is more important is the world recession. We are not an isolated country that can operate regardless of what is happening in the world as a whole. There has been, and is, a massive recession in countries that are of considerable importance to us: the United States of America, Canada, Australia, New Zealand, much of Europe, and the like. The noble Lord, Lord Jenkins of Putney, held out Germany as an object lesson to us—a model that we should follow. If we look at what is happening to Germany now, we find that it has inflation comparable with ours at the moment, but its inflation is increasing while ours is coming down.
In Germany, increases in wage demands are in excess of 10 per cent. against our increase of 4.1 per cent. Money supply is rising at a rate which is unheard of in Germany, interest rates are comparable with ours and unemployment is rising. The model state of Germany, held up as an example to us, is, I believe, going through a worse period than we are, as we come out of it. Many countries are in a worse economic position than Germany—countries which have been and are important to our economy. We cannot steer clear of the world recession and believe that we are isolated and can operate without regard to it.
I very much welcome the clear and encouraging signs that we are coming out of the recession. Perhaps I may quote one or two facts. I said that our pay settlements are now 4.1 per cent. and that has enabled our unit costs to equal the lowest in Europe. At the same time, because of the productivity increases forecast by the CBI of over 6 per cent., average earnings have been able to increase to about 3 per cent. above inflation, with no increase in unit costs.
As regards destocking, for a period of two years at all levels of industry there has been destocking. That is coming to an end and stocks are building up again. That may have an adverse impact in the short term on our balance of payments, but it will regenerate the recovery for which we are all waiting.
Exports are holding up very well indeed, being about 8 per cent. up on last year. Here I disagree with my noble friend Lord Joseph. I have always followed his views with care and admiration, but I do not share his anxiety about the ERM. I believe that it was right to join and that, despite those who feel we went in at the wrong rate, the way in which our exports are holding up shows that we went in at the right rate.
Company debts have been reduced by £8 billion during 1991. We know that interest rates have come down eight times. A further fact of which we must take account is that the savings ratio has been building up to an exceptionally high figure in the country—11.2 per cent. I believe that during the coming 12 months we shall see it reduced to a more normal level, about 10 per cent., which will release purchasing power into the economy. That will help our recovery.

885
For the 91 per cent. of the population who are in work, the economy is pretty good. There has been an increase in their spending power of about £40 a week, if we take account of the reduction in interest rates and the increase in earnings. I see from the Financial Times today that, according to a survey published yesterday, the average British household is 20 per cent. richer in real terms than it was 10 years ago. I accept that, as the noble Lord, Lord Hatch of Lusby, would say, dealing with averages is misleading. Many people have a reduced standard of living and do not share in the degree of prosperity. However, the general buoyancy of the economy has not been reflected by the Benches opposite.
The consequences of the recession have been extremely painful for those who are unemployed. I know that the increase in unemployment concerns all sides of the House. The Government are putting more and more resources into employment services with improvement in training, but the figure for the unemployed will diminish only as the recovery takes place. There is a lag in the figure, as we all know.
Of course, there have been too many business closures. There is always a cycle of such closures and we should not forget that there are now 3 million companies in the country whereas 10 years ago there were only 2 million. Neither should we forget what is being done in taxation. Corporation tax was 52 per cent. and it is down to 33 per cent.
Another sector which has suffered is housing and I am sure we all have great sympathy for the problems of those whose homes are repossessed. There again, government support for mortgage interest, rescue schemes for lenders, the suspension of stamp duty and the like are aimed at alleviating that difficulty.
I believe that we are coming out of the recession. We need world growth in order to obtain the full benefits from our economy. If we run through what has been provided and is available to British industry, it should put us in a good position. First, inflation is at a rate below that of the whole Community. We have the lowest taxation level for industry in the industrialised world. Our industrial relations are unequalled. I believe my noble friend said that for 100 years there had not been a record of industrial peace to equal what happened in 1991.
Export volumes are at record levels. We export a higher proportion of our GDP than Japan. However, listening to the Benches opposite, I feel they are clearly out of touch with the real figures and what is happening in the world or in our economy. If we look at inward investment, people are investing more in this country than anywhere else in the Community; 40 per cent. of OECD overseas investment comes into the United Kingdom. We have three times the investment of France and six times that of Germany, and that is something of which we should be proud. It shows that there is confidence in the strength of our economy which has not been echoed by the Benches opposite.
The Financial Times carried out a survey of the top companies in Europe; 181 of the 500 were British, 63 French and 63 German. We have what I believe is a proud record. We have problems; we are all sorry about the consequences of the recession and
886
everything possible should be done to alleviate them. We have a sound and healthy economy. The only thing that would spoil it is if the Benches opposite were to become the Government.
5.56 p.m.
Lord Houghton of Sowerby: My Lords, I extend my warm congratulations to the noble Lord, Lord Rodgers of Quarry Bank, not only on his maiden speech but on becoming a Member of your Lordships' House. He brings all the qualities which fit him to make a notable contribution to those things that your Lordships' House does best. I am sure that he will add to the quality of our debates in times to come.
In looking at the problem of the economy, I have wondered whether it is worthwhile giving a glance to others who may be in the same boat. I find that it is a pretty big boat, containing many countries and millions of people. We talk about our economy—probably it suits us politically to do so—in terms of the mistakes and fumblings of government. But forces have been at work which transcend anything that governments could do to keep economies in balance, where there is a free society open to those forces. The biggest was the monstrous tribute imposed on the world of oil usage by the monopoly power of the OPEC countries. That lies at the root of many of our problems today. It let loose on the world's money markets a great deal of the spare resources which had been demanded and yielded by economies of countries all over the world. They were used to finance many non-viable enterprises.
However, let us look at the present default on borrowing. Banks are going, countries are going, individuals are going. That suggests that we have all become too laden with debt. It seems to me that debt is justifiable if one borrows money which will yield an added value and which will enable one to service and repay the debt. If we observe that condition when we borrow, far less borrowing would be undertaken. At least that situation would represent the reality of the use of money and of borrowed money. We must attribute a good deal of our difficulties to easy borrowing. That is also the case on the domestic front. There is scarcely a household in Britain which, over the past few years, has not taken advantage of loans, hire purchase and other so-called easy means of acquiring goods or services. As I have said, if people default on those loans, that would have serious effects upon morale and upon the economy.
Let us look abroad for a minute or two and look at Canada. Let us put the European countries aside for a moment and consider kindred spirits who follow Western traditions and our form of representative government. Canada is usually a follower of the Gladstonian tradition of peace, retrenchment and reform. In its recent adjustment to economic difficulties it has decided, among other measures, to bring home 8,000 troops from Europe. That move of course startles NATO considerably. We also have troops in Europe. The future of NATO concerns us all, but we cannot continue to maintain multiple

887
defence expenditure when there is no obvious purpose to defend and when there is no obvious person to attack.
Canada has also decided to assail, to some extent, some of its social benefits. Canada's benefits have been the highest benefits in the world. The benefits are non-contributory and non-taxable social benefits. However, Canada is now continually chipping away at family allowances which have been at a high level for the past 47 years.
In Australia a measure has been introduced which is known as Keating's kick start. That constitutes a package of measures which have been introduced in the past week. Behind that introduction lies an astute political purpose. Mr. Keating has introduced immediate measures that are of great importance to many households in Australia. He has accompanied those measures with firm promises of what he will do to reduce the incidence of direct taxation, if only he is re-elected in 13 months' time. He will then embark upon a four-year plan of economic recovery in Australia.
Mr. Keating has some bright ideas as regards his package of measures. He has offered a cash bonus to all families. He has said he believes it will benefit the economy if families with children spend more. The cash bonus will also help families from a social point of view. A one-off cash bonus is to be paid to every family in Australia. In addition, those who receive the family allowance supplement—that is our form of social security—will receive additional permanent increases in their benefits. Those are to be given on top of the cash bonus. That is quite a novel idea. Mr. Keating is also lifting some product taxes. We have a product tax on motor cars. There is at present no general interference in Australia with the level of taxation, although interest rates there were reduced last November and are now lower than our interest rates. However, until last November the interest rates in Australia were much higher than ours.
The steps I have just described are dramatic steps. It also appears that a Labour Prime Minister in Australia is in a better position to persuade the Australian trade unions to knuckle down on their pay increases than our politicians here. The Australian Prime Minister says he has obtained agreement from the Australian trade union movement not to press for pay increases that are higher than the kind of average pay increases that are being awarded in countries that are Australia's competitors. That is an orderly affair. Out of the measures introduced in Australia will come immediate benefits to a large number of people. Some pensioners and unemployed people will also benefit from social improvements.
Australia will borrow but it will borrow for capital expenditure. Australia, of course, has plenty of room for capital expenditure and that expenditure can be visibly employed in Australia. Those measures taken together, and a few other interesting details, constitute a new approach.
I should not be a bit surprised if Prime Minister Major does not do something now and leave something else to be done in the next Parliament. He
888
will not get a Finance Bill through that contains a lot of complicated detail. He will want to get a Finance Bill through before Parliament is dissolved. However, he will want the country to know that he proposes to do other things if he is re-elected. He will want the country to know that another Finance Bill will be introduced later in the year to implement the other measures he proposes to take. I cannot tell the Prime Minister anything about political skill and strategy. The measures I have just outlined are the kind of measures politicians take. Such a strategy may well be the best way to introduce measures of considerable importance. My time is up. I hope it has been interesting to your Lordships to hear what is happening in countries outside the United Kingdom. We should stop looking quite so closely and for such long periods at our own navel. There is a bigger world outside and other countries have problems too. On the whole we are a lucky people.
6.7 p.m.
Lord McCarthy: My Lords, I wish to follow the noble Lord, Lord Houghton, in repeating the congratulations he gave to the noble Lord, Lord Rodgers. I wish the noble Lord, Lord Rodgers, was in his place at present. His maiden speech was revealing. I knew that things were bad in Portland Place but I did not know they were that bad. It seems there is a higher rate of unemployment among architects than there is among estate agents. There is a significantly higher rate of unemployment among the latter groups than there is among plumbers. That just goes to show how far and wide this recession has spread.
I also wish to thank the noble Lord, Lord Peston, for introducing this Motion on the state of the economy and its social consequences. It is natural that many of us on this side of the House, particularly the noble Baronesses, Lady Hollis and Lady Hilton, should focus on the social side of the equation. I suppose it is not remarkable that no one on the other side of the House has followed the noble Baronesses on that subject. Indeed almost everyone on the other side has said they do not intend to comment on that subject. It is difficult to follow the noble Baronesses as virtually everything they said is incontestable.
It is also natural that many noble Lords on our side of the House—for example the noble Lords, Lord Hatch and Lord Peston—have focused on the unemployment side of the equation. It is, after all, the level of unemployment which is the most immediately evident consequence of the Government's economic policies. The House knows too well that we have the highest rate of unemployment of any country in Europe but two. We have the highest rate of unemployment of any country in the OECD but three. We have the highest rate of increase of unemployment of any country in the OECD and that position has persisted for some months.
Our rate of unemployment—whether one measures it on the old count or the new—is on average more than twice the rate of unemployment when the Government came to office. Therefore we on this side of the House are bound to focus in this debate on the

889
level of unemployment. To me it is remarkable that so far noble Lords on the other side of the House have not addressed themselves to that problem.
If I understood him correctly, the noble Lord, Lord Boyd-Carpenter, said that we should think about inflation and trade union power and what the Government had done about those things rather than think about the level of unemployment. He said—and we have heard this before—that "recovery is on the way". Rather as the early Christians said that the second coming was on the way, the recovery is said to be on the way. When will it arrive and where are the signs that it is on the way?
The noble Lord, Lord Selsdon, made something of the fact that there are many other countries more depressed than we are. He mentioned Switzerland. If he looks at most of the indices of economic growth such as inflation and growth he will see that there is no reason why the Swiss should be more depressed than us. The only reason he gave was that we are more used to being depressed. That is not very convincing.
The noble Lord, Lord Joseph, and the noble Lord, Lord Brabazon of Tara, seemed to say, in so far as they addressed the problem at all, that the central difficulty was that at some time in the past the Government had taken the advice of the Labour Party and that was disastrous. On two occasions they agreed with the Labour Party—in relation to interest rates in 1986 and somewhat later in relation to the ERM. I can think of hundreds of occasions when they did not take the advice of the Labour Party. If they had taken the advice of the Labour Party rather more systematically they might be in a better position.
The fascinating point is that there is another argument in defence of the Government's policies which has been made by spokesmen in another place. I should like to ask whether the Government are still putting forward that argument. For example, the Secretary of State for Employment is still putting forward that argument, so it is somewhat surprising that we have not heard it today. That argument is that the situation is bad and unemployment is dreadful, but the situation would have been so much worse if the Government had not introduced eight employment Bills and made cuts in social services and if they had not opposed what the European Community want them to do in connection with the Social Charter. The argument runs that not only would the situation have been much worse if they had not done those things, but it would be even worse if there was a Labour Government and all that the Tory Party had done in those respects was reversed.
It is true, as noble Lords who have been in this House for any length of time will know, that government spokesmen on the other side argued that they had to abolish rights in relation to unfair dismissal for workers who have been in a job for less than two years because that would have a positive effect on employment. They argued that they had to remove protection for women and young workers in respect of night work because that would affect employment. They said that they would abolish the wages councils because it would help the growth of employment. They now oppose the working time
890
directive of the European Commission and the atypical workers directives because, they say, otherwise the level of employment in this country would be significantly worse than at the moment.
The Government are right to link all those things. The argument that we cannot afford employment protection is exactly the same whatever form of employment protection one talks about. If the Government were consistent they would he arguing that the employer knows best in all respects. Therefore, they should go before the electorate and argue for the repeal of the Health and Safety at Work Act and the abolition of all forms of industrial injuries legislation and not just nine out of 10, as the noble Baroness said. That is the logic of their position—that employment protection of any kind restricts the level of employment and therefore one must vote for them because one will not have any employment protection.
A number of arguments can be advanced about that assertion. Essentially, once one moves away from the a priori argument and considers the evidence relating to the argument that employment protection reduces jobs. There are two methods used to settle such arguments—simulations by econometricians based on assumptions concerning the relationship between labour costs and labour demand and empirical investigations of what happens when one changes the level of employment protection.
The central point about the first of those—simulations—is that the Government's simulations, for reasons which are not entirely clear, are invariably, and especially when made by the Secretary of State for Employment, far in excess of the figures produced by anyone else. The best example is the recent study carried out by Mr. Bazen for the Institute of Personnel Management. He averaged out the major forecasting models and produced an estimate of the direct and indirect effect of the Labour Party's proposals for minimum wages on employment of some 96,000 jobs. The Treasury estimate referred to frequently by the Secretary of State claims the figure to be 750,000 jobs. Mr. Nicholls, in a Parliamentary Answer, suggested 1.4 million jobs, and Mr. Howard, in a report in The Times on 25th June, said that the figure would be up to 2 million jobs. Therefore, in the case of Mr. Howard one has to divide by a factor of 20. There is no real explanation as to why the Government exaggerate all other estimates.
Moreover, if one looks not at simulations but at the empirical evidence, one finds a considerable volume of evidence to show that when employment protection is extended, whether protection against unfair dismissal, wages councils or something else, there is no observable effect. In so far as there is any effect at all it is just as likely to improve employment as to reduce it.
Therefore, I conclude that the Government cannot say that the only justification for their policy in relation to unemployment is that it would have been worse if they had not taken the action they did because there would not have been a government destroying employment protection.

891
The noble Lord, Lord Boyd-Carpenter, said that recovery is on the way. Yes, my Lords, but not until after the election.
6.17 p.m.
Lord Wade of Chorlton: My Lords, as I listened to the debate I was reminded of a piece which I used to quote at one time. I have jotted it down and if I have remembered it correctly it goes as follows: "If a man runs after money he is money mad; if he keeps it he is a capitalist; if he spends it he is a playboy; if he does not get it he is a ne'er-do-well; if he does not try to get it he lacks ambition; if he gets it without working for it he is a parasite; and if he accumulates it after a lifetime of hard work he is a fool who never got anything out of life".
Noble Lords may have heard that before but I was reminded of it because how one addresses the problem depends on one's point of view. Noble Lords opposite have tried to show that this country is in financial difficulties. The reality is just the opposite.
The noble Lord who has just spoken mentioned unemployment. By 1991 we were employing more people in this country than we have ever employed in the whole of our history. We are now employing more people than we employed 10 years ago. The opportunities for more people to be employed has grown enormously with the range of jobs now offered.
The noble Baroness, Lady Hollis, painted a picture of a country which is far from the reality in the area in which she lives. Cambridge has expanded and invested—as has Peterborough—at a level which is unprecedented. The growth of investment, job opportunities and exports from those areas are now at levels which were never dreamt of 10 years ago. It is true, as many noble Lords have said, that over the past two or three years there has been no growth, but growth in the middle 1980s was unprecedented and a couple of years ago was very high indeed and there was need for a slight adjustment.
As the noble Lord, Lord Houghton, rightly said, in the world economy in which we have to operate and in which growth was running at 4 per cent. only a couple of years ago, there has been nil growth, excluding EC countries, over the past 12 months. That is likely to continue for the next 12 months. We have to operate within that economy. But that does not mean that we do not have to look forward to see how we can ensure that the economy of Britain is competitive with the rest of Europe, that we take full advantage of our opportunities and that we continue to grow.
I agree with the noble Lords opposite who have shown concern for those who are not able to obtain employment. Although there are more people employed than ever we expected, there are still many who cannot find work. What concerns me most is that many major companies which are shedding jobs to maintain their efficiency are getting rid of people of very high calibre who have enormous ability to provide wealth and opportunities for the country. I believe that we must address ourselves to that area.
892
The noble Lord, Lord Peston, said that he agreed with our entry into Europe and the need for a stable European currency. I agree entirely with him. I believe that if our export companies are to develop their opportunities in the world, it is absolutely essential for Europe to have a stable economic and financial system. Without that they cannot take the long-term investment decisions that are necessary.
I believe that it was the noble Lord, Lord Jenkins, who mentioned the wrong attitude of short-termism. Short-termism is created because companies do not have the long-term confidence in financial structures to be able to take a long-term investment view. In my opinion that is essential. As we move into Europe, we shall have a tighter structure of finance, exchange rates, interest rates and currencies generally. As they become more fixed, companies will have to become more flexible in other areas. One of the inevitable consequences will be flexibility in employment.
There is already a great move in that direction. Companies which traditionally have sustained a level of employment necessary for their peaks of production are now maintaining employment for the troughs of production and bringing people in and out to cope with the difference. If that change comes about and there are many very able people who do not have long-term opportunities within existing businesses, there will be only one way forward. We must encourage much more investment to utilise their skills. I think that every speaker so far has agreed with me.
On the other hand, automatically we seem to put obstacles in the way of the very investment that we want to achieve. I have heard in this House many noble Lords utter their concern about the levels of growth of investment. Yet to solve the social problems to which many speakers have referred we have to create in our society the wealth to deal with those problems. In the North West, from which I come, there are new hospitals, new schools and new opportunities which are unprecedented. During the boom periods in the middle 1980s we were able through development and investment to generate the money which made those things possible. Once we take our eye off that ball and stop saying that growth, investment and an increase in our economic base should take place every year, very rapidly the picture changes.
The noble Lord, Lord Joseph, frequently refers to the entrepreneur. The entrepreneur is the very person who is prepared to take personal risks. It is not easy to sit around the kitchen table and decide to put one's house at risk by moving into a business which, if it works, will bring wealth and opportunity for the family but which might go down the tubes. I have made such a decision on a number of occasions. Some enterprises have gone down the tubes but, thank God, not all of them.
However, if there are no people to do that or if entrepreneurs are not confident that the full weight and enthusiasm of the nation is behind them, either those people will go somewhere else or they will not undertake the business at all and generation of wealth does not take place. I believe that we have the answer to the problems with which the noble Lords opposite

893
are quite rightly concerned. We have many skills that we do not use. We have to compete in the greater world to which the noble Lord, Lord Houghton, referred. As a nation we must make economic growth our prime priority. We must put all our efforts into it. We must not put up barriers of planning which prevent people from taking action. We must not cut back on the construction of roads and economic developments just because there might be some little birds which might be affected. We must take the overall view as a nation to generate growth. By doing that we shall create the wealth which will make it possible to solve those problems. We shall then be able to improve the environment rather than use it as an argument to prevent growth.
I believe that that is the way ahead. If we take that view, the opportunities for the nation will be staggering. Having undergone the sacrifices entailed in moving into Europe we can now use that market-place and go on from there into the world. We can develop and continue to grow in employment and investment at an unprecedented rate and during the 1990s have that level of growth which we had in the mid-1980s.
6.26 p.m.
Lord Jay: My Lords, in congratulating the noble Lord, Lord Rodgers, on his speech, I compliment him in particular on not having told us that economic recovery was just around the corner, as did the noble Lord, Lord Boardman, more or less. Unfortunately for the noble Lord, throughout last year the Chancellor of the Exchequer told us repeatedly that recovery was just beginning. On 19th March 1991 he said that there were good reasons to expect that the recovery would begin around the middle of the year. On 29th April, which is nearly a year ago, he said that recovery was around the corner. On 9th October, even more oddly he said that the green shoots of spring were appearing once again.
Meanwhile, those who believed that joining the ERM at the end of 1990 at a grossly overvalued rate would mean intense deflation, took a rather different view. I am not being wise after the event. On 16th February last year I said in this House that with a fixed ERM rate interest rates would stay high, factories and industries would close and unemployment would reach 2.5 million by the end of 1991.
What in fact happened over that period? We now know that in 1991 total national output fell by 2.5 per cent. Since early 1990 the fall has been as great as 3.7 per cent., which is a disastrous result. The only puzzle is that so many people are surprised by that fiasco. It was quite inevitable, in the already weak state of our economy, that fixing a 20 per cent. overvalued exchange rate would produce a collapse. We are now suffering not just from a world recession which has been mysteriously visited upon us by Providence, but from a recession which has been aggravated by man-made inflation caused by the uneconomic exchange rate and the Government's resulting policies. An overvalued exchange rate means high interest rates, flagging investment and flagging exports —exports flagged only last month—and therefore
894
falling output, rising unemployment and, in this case, a balance of payments deficit, all at the same time. We are suffering from all that.
Having failed to understand the effects of their policies, the Government now say that the situation has nothing to do with them. But, strangely enough, as noble Lords will remember, the Prime Minister, when Chancellor of the Exchequer said: "If it isn't hurting, it isn't working". That implies surely that he intended it to hurt. Indeed, the present Chancellor of the Exchequer said that high unemployment was a price well worth paying. That surely implies that he intended it to occur.
The Government state that others are suffering as well as ourselves. Certainly France and Italy have 10 per cent. unemployment. That is very much the same as ours. However, that is largely because their currencies are also fixed by the ERM against the deutschmark. In fact the ERM is forcing high unemployment on all its members other than Germany. The economist, Mr. Christopher Dow, who spent some years at both the Bank of England and the Treasury, an impressive record, states:
"The nailing of currencies to the DM is now crucifying the policy of Germany's neighbours Italy and France as well as the UK".
All 20th century experience—and experience is really a better guide than ideology—proves the importance of the exchange rate for a country like the UK which exports and imports about 30 per cent. of its GNP and proves the damaging effect of overvaluation. In 1925 a 10 per cent. overvaluation of the pound led to six years of unemployment. After realignment in 1931, the UK economy enjoyed five years of steady advance in real GDP. Manufacturing output increased 50 per cent. in those years. That is a solemn thought. The move to a competitive rate in 1949, we can now see, gave the UK uninterrupted growth and very low unemployment throughout the 1950s and very few rises in prices. Indeed, it brought the whole dollar and sterling worlds into better balance.
Similarly the gross overvaluation which this Government permitted in 1980 was one main cause of the intense depression and unemployment of 1980–81. We can now see that one real main cause of the 1988–89 recovery in production was the fall in sterling against the deutschmark in 1985–86, a year or so before. Indeed, it is not often remembered that Germany itself had the sense to devalue with us in 1949 and has very cleverly maintained its rate at an undervalued level ever since.
I give one illustration. A glaring example of the effects of the exchange rate on us is our vital coal industry which government policy at present is so seriously undermining. We are told that British coal cannot compete with imports. But if the sterling rate were at a competitive level, the British industry at the moment could compete even with a heavily subsidised Germany industry and with our own nuclear power industry. It is absurd to condemn an industry because the rate of exchange makes it uneconomic.
As a result of the present exchange rate, the UK economy is now running, at the very least, at about 10 per cent. below productive capacity. That means that

895
we are throwing away about £60 billion or £65 billion worth of GDP every year—and, incidentally, £25 billion or £30 billion worth of government revenue. We have let that happen through our policies. We then argue about £1 billion or £2 billion more or less in the budget.
Some people seem to have forgotten that deflations are cumulative. Every time 1,000 people are thrown out of work, their purchasing power is reduced, their spending is reduced and another group loses its jobs in turn. The decline does not necessarily stop by the hand of politics. The great depression in 1933 did not stop until the United States Government took very drastic action. It is worth remembering that 19th century British cyclical depressions did not end until the bank rate came down to 2 per cent., and sometimes even below 2 per cent.
It is nonsense to say that if the exchange rate were set free interest rates would still have to stay at their present levels. If that is the problem the solution is to reduce interest rates and to let the exchange rate find its own economic level. By depriving us of the interest rate weapon, the fixing of the present uncompetitive rate was really an act of unilateral disarmament by this country. As long as those rates are maintained I believe that we are condemned to having 3 million unemployed and a balance of payments deficit at the same time. Whatever government are in power, the change to a competitive rate will have to be made. I believe that the longer that that is delayed the greater damage will be done meanwhile.
6.37 p.m.
Lord Rea: My Lords, one effect of this Government's economic policies has been to widen the gap between the income of the richest and poorest sections of the community, and unemployment has been allowed to reach higher levels than at any time for 60 years. My noble friend Lady Hollis has graphically described the situation, I believe very movingly.
It is true that absolute poverty has been mainly avoided through the operation of the social security system. But relative poverty and unemployment, as I hope to indicate, have detectable and important effects on health. Nine years ago I based my maiden speech on the Black Report on inequalities in health, published in 1980 but largely ignored by the Government. In fact it was issued only in limited numbers in a typescript version because it made uncomfortable reading for the Government. However, the Pelican edition was extremely well received and was widely praised for its scholarship and recommendations, almost none of which was accepted by the Government.
Professor Black's working group wrote the report because it had been asked in 1977 to consider the wide and apparently increasing gap in health between the different social classes in Britain, a problem which had much concerned my noble friend Lord Ennals while he was Minister for Health. In 1987, an update of that report entitled The Health Divide —Inequalities in Health in the 1980s, another work of high quality,
896
commissioned and published by the Health Education Council, also found some difficulty in reaching the light of day, or the light of the reading lamp, due to official disapproval. The story is interesting, but I have only 10 minutes in which to speak. That report and a number of more recent studies show that although the overall health of the people of this country is gradually improving, the gap between the best and the worst off is increasing in health as well as in wealth.
It is therefore disappointing that the Green Paper The Health of the Nation failed to face squarely that inequalities in our society were a basic reason for our indifferent showing in international comparisons of health statistics. The fact that the Green Paper was published at all is to be welcomed. But I am sorry that the White Paper based on The Health of the Nation will not be published before the election. I can only assume that many of the hundreds of submissions of evidence may have proved difficult for the Government to swallow and a rejection of a large part of that evidence might have proved politically damaging in the run up to an election.
As an illustration of how inequalities pull our health down as a nation, it is worth considering that basic health statistic the infant mortality rate—the number of babies that die before one year for every 1,000 that are born. Our current figure is just under nine per 1,000. In fact, it is a remarkably low rate historically speaking. The figure was over 20 when I qualified some 38 years ago. However, it is equalled by many other developed countries which have come up from behind. Some are now overtaking us—for example, Ireland, Spain, France, Italy and Germany, which used to have very poor health statistics.
A long way ahead of us, with infant mortality rates of only five or six per 1,000, are Japan, Sweden, Finland and Iceland. Even Hong Kong and Singapore do much better than the United Kingdom. The country with the highest gross national product, the United States, has worse statistics than the United Kingdom but it also has the greatest social inequalities in the developed world.
The infant mortality rates of the different socio-economic groups in the UK show that the professional groups have a rate which is the equal of Japan and the advanced Scandinavian countries. However, our average rate is pulled down by the much higher rate of the more disadvantaged socio-economic groups. Their rate is about twice as high as that of the professional group in Social Class 1. The statistics for almost all other health measures, including life expectancy, show a similar variation among the social classes.
The parallel between health and the income distribution within developed countries was examined in detail in a recent paper published in the British Medical Journal and written by Dr. R. G. Wilkinson of the Trafford Centre for Medical Research at the University of Sussex. The centre was named after the late Lord Trafford who, all noble Lords will agree, is greatly missed on all sides of the House. Dr. Wilkinson concluded:
"If Britain were to adopt an income distribution more like the most egalitarian European countries … about two years might be added to the population's life expectancy".

897
He further stated:
"The contrasting experiences of Britain and Japan illustrate the possible effects of income distribution on health. In 1970 income distribution and life expectancy were similar in the two countries. Since then they have diverged; Japan now has the highest life expectancy in the world … [but also] … the most egalitarian income distribution of any country on record. In Britain, on the other hand, income distribution has widened since the mid 1980s".
I must explain that an increase in life expectancy is not simply a question of adding a couple of years to the life of already senile people. It is associated with less chronic disease and disability throughout life and a longer active life.
As my noble friend Lady Hilton described, there is in many cities a growing under class of dissatisfied unemployed young people. Even if they take a training course, and are thus taken off the unemployment register, often they do not obtain jobs afterwards. Some members of that group escape boredom by drifting into dependency on drugs, alcohol and/or crime—crime which is often committed in order to finance an expensive drug habit. The desperate sub-culture of drug users becomes an absorbing way of life, much more exciting than sitting around while on the dole. It is estimated that there may be 50,000 opiate abusers in the United Kingdom. Nearly all are unemployed or on income support, but they each need upwards of £25,000 per annum to finance their habit. One estimate of the money spent per annum on illegal drugs is £1.5 billion.
Even if that is an exaggeration, it is clear that the cost of drug abuse is one of the central reasons for the rise in property crime described by my noble friend. This Government's attempts to deal with the drug problem, like their attempts to stop crime, are proving woefully ineffective. There is a heavy emphasis on stopping the supply rather than on reducing the demand. Radically new approaches to drug addiction and other offences, including better treatment and rehabilitation, are required. But that can be only partly effective while a sizeable proportion of our younger citizens are made to feel that they are unwanted and have been cast aside.
Instead there should be a major government initiative—"a new deal", to follow my noble friend Lord Jay—which would be appropriate. Our Tennessee Valley Authority should start building the houses that we need, as the noble Lord, Lord Rodgers, convincingly argued in his maiden speech. There should be modernisation or repair of our infrastructure which would help to make our goods competitive as the world recession lifts.
Like my noble friend Lord Peston, I believe that the bogey of inflation is not such an evil monster as that of unemployment. I am confident that as a good Keynesian he will be able, with his right honourable colleague Mr. John Smith, to find a means to avoid both evils.
6.45 p.m.
Lord Judd: My Lords, the evidence of the failure of economic and political policy as presented in this House leaves absolutely no room for complacency. We have heard of the dissipation of oil wealth, declining industrial production, a stagnating GDP, an
898
appalling balance of payments, under-capitalised industry, diminishing reinvestment (down 15 per cent. last year), growing unemployment with all that means in wasted, despairing, broken human lives and families, falling property prices, repossessions at a record level, bankruptcies and bad debts accumulating and, as my noble friend Lady Hilton powerfully reminded us, a crime rate that is soaring.
Even more telling is the fact that we encounter daily the strains on public services; health, education and the care of the elderly and infirm. As was emphasised by my noble friend Lady Hollis, perhaps most distressing of all is the fact that we are moved, or ought to be, by the growing number of homeless people, young and old, sleeping in cardboard boxes, pedestrian subways and under bridges in almost all our larger cities. Some are sleeping almost on the doorstep of this House. That is not a reassuring prospect.
My noble friends Lord Hatch and Lord Houghton have reminded us of the wider world. Of course we are locked into that wider world strategically, economically and morally. As we contemplate our own difficulties it is perhaps as well to remember that in that world a small child dies from poverty every 2.4 seconds of every day; one in five people live on less than £175 a year; 1.5 billion people are still deprived of any health care whatever; 1.75 billion people still have no access to safe water; and 3 billion still live without adequate sanitation. Average life expectancy is 12 years less in the South than in the North. The South's maternal mortality rate is still 12 times higher than that in the North.
If all that were not challenging enough the size of the problem has been accentuated by the new needs which have become evident in the former Soviet Union and in eastern Europe. But despite the valiant efforts of the Minister for Overseas Development, whose personal sincerity and commitment are beyond question, the Government are proportionately providing 12 per cent. less of our national wealth for the battle against world poverty than they were in 1979.
Overshadowing those grim realities at home and overseas is the potentially terminal global environmental crisis. We have a damaged ozone layer, global warming, rising seas and climatic change coupled with accelerating depletion of the world's non-renewable resources. As we come up to the special United Nations Conference on the Environment and Development in Rio, Maurice Strong, the secretary of that conference, has estimated that the price of dealing with the world's environmental problems is in the region of £350 billion per year. Of that, one-fifth will need to be transferred from the North to the South.
But it is a mistake to imagine that the bulk of the environmental problems arise in the poor world. It is the insatiable consumption of resources and the reckless pollution of the planet by the industrialised world, including the United Kingdom, which relates directly to the depletion of the ozone layer and to the global warming. It is the North which is responsible for 80 per cent. of global fossil fuel use. It is we in the

899
North who consume 40 times or more per head of environmentally exploitative goods than do the poor in the third world.
In the face of those immense challenges at home and across the world, it would be wanton irresponsibility for governments or oppositions to indulge in opportunist election tax cut drives, endeavouring to secure votes at the expense of our children and their children.
We know that education and training matter as the way to ensure that our children fulfil their potential and as an indispensable investment in our future. We know that health services matter to ensure a decent life for our parents, children, friends and family and as an indispensable investment in a dynamic and effective community. We know that good public transport must make sense on our crowded island. We know that adequately financed environmental and overseas development policies are essential for a peaceful secure world—indeed, for the survival of humanity itself.
Ideological preoccupations, purist monetarism and unbridled market economics will not provide the answers. We need a reassertion of value-based common sense and pragmatism. We need to be rid of the greed, selfishness and short-termism among too many of those in leadership positions in finance and commerce. Those have eaten away at the foundations of civilised values. We need to rediscover strength in our belonging, in our commitment to community and to society and in our social responsibilities. The private, the public, the voluntary, the employer, the trade union and governmental sectors need to come together in a positive shared responsibility to strategic long-term and economic policy, especially for priorities in investment.
To assist in ensuring a viable world community—an absolute priority for an internationally dependent nation like ours—it is clear that we must address the following issues at international level without delay: tariff and non-tariff barriers which trap the South in poverty by hampering its production of exports; ensuring access for the South to the markets of the North. We need to address the problem of dumping subsidised agricultural surpluses by the North at low production costs on world markets causing havoc to third world agricultural economies. We must tackle the need for assistance to third world countries in upgrading production, improved marketing, infra-structural development and diversification. We must look to protection and stimulation of third world agricultural production within the framework of GATT to promote food self-sufficiency in third world countries.
We must look also to the revamping of GATT and of the United Nations Conference on Trade and Development and to their possible merger to ensure an international agency, sensitive to third world global needs, geared to protection of the environment, to ensure improved technology transfers to the third world and to ensure accountability of transnational companies.
We must also give priority to far-reaching
900
extension of debt relief, building on the welcome Trinidad terms. We must look to structural adjustment and debt relief policies designed expressly to enhance sustainable national-level food security and to encouraging popular participation in environmental rehabilitation and protection rather than programmes focused only on a short-term national economic growth rationale.
We must look also at population policy developed in the context of effective primary health and functional literacy programmes. Against all that, we must give urgent priority to less wasteful consumption and pollution by the North.
I believe that when history is written of the age in which we live, the past decade will be put down as an age of quantitative preoccupations. I believe that we are learning that the salvation of humanity cannot be founded on a quantitative preoccupation. We must reassert the qualitative dimensions in society. We are learning that social priorities and values are as essential to successful economic management as is the economic technocracy itself.
6.55 p.m.
Lord Marlesford: My Lords, I suppose that this is probably the closest we get in this House to a censure debate on the Government. We heard a highly provocative and political speech by the noble Lord, Lord Peston. I make no complaint about that. I welcome it and indeed I enjoyed it. However, I hope that in return I shall be allowed to be a little bit political.
The main difference between being in government and being in opposition is that in government, you must make choices which are often hard choices. In opposition it is possible to have the enjoyable but somewhat dangerous occupation of riding several horses at once. It does not matter a great deal to the country if you fall off. However, as we get closer to an election, it is not unreasonable to expect an opposition to have chosen one horse or another. In many areas, the Opposition have not yet done that. Those noble Lords who heard Mr. Gerald Kaufman this morning on the "Today" programme trying to explain to Mr. Brian Redhead whether or not a Labour government would buy a fourth Trident submarine will know exactly what I mean.
For many years the Tory Party too tried to ride two horses at once. They tried to control inflation while having full employment. They tried to share power with the unions and the CBI while trying to run the country. They tried to keep huge chunks of loss-making industry in the public sector while controlling public expenditure. They had taxation rates of over 90 per cent. while hoping that entrepreneurs would not leave the country. In other words, for a long time the Tory Party ran what I—and perhaps others—would describe as a socialist consensus.
I suppose that the light started to dawn after the defeat of the Conservatives in 1974. The person most responsible for removing the scales from our eyes was my noble friend Lord Joseph. The turning point was when he said to the Tory Party:

901
"Beware of the middle ground. It is like the will-o'-the wisp, constantly moving to the left".
Those lessons were learned by the Tories but I am sure that they have not yet been learned by the Labour Party.
The main job of any government is to put the country into a position of comparative advantage. That includes making our industry more competitive. But that is not all. I shall review some of the ways in which, over the past 13 years, the Conservative Party has improved our comparative advantage. In doing that I shall pause to contrast what has been achieved with what, as far as it can be perceived a Labour government would do.
First, I deal with inflation and unemployment. The Government have said, "Let inflation be the judge and jury". That seems a reasonable test. Except for the Korean war, we did not reach double digit inflation until Mr. Heath's Government. Indeed, in my view, Britain's inflationary problems were initiated by Mr. Heath's government. Of course inflation got totally out of control during the Labour government which followed. There was high inflation for the first three years of Mrs. Thatcher's government: in 1979, it was 17 per cent.; in 1980, 15 per cent.; and in 1981, 12 per cent.
There were three main causes of that: first, was two years of public sector pay comparability under the Clegg formula. That was a terrible mistake; secondly, the increase in VAT which was a price well worth paying, to coin a phrase; and, thirdly, the pressures from the petro-pound. However, since then, except for 1990, inflation has been low and over the coming months I believe that there will be a further fall.
The Labour Party does not often refer to inflation and is somewhat ambivalent about it. If it does only half the things it wishes to do—in particular, large increases in public borrowing—that will probably bring about double digit inflation quite quickly. It is not always very easy to know exactly what the Labour Party would do. However, fortunately we have an excellent text to help us. It is a very good book which I recommend to your Lordships. I have brought a copy with me. It is called Choose Freedom. It is written not by Mr. Kinnock, whose memoirs I believe are still in the first draft, but by Mr. Roy Hattersley, Labour's deputy leader. Therefore it is a book of authority. It is carefully thought out and combines both philosophy and policy.
If we had any doubts as to the thoroughness with which this book has been researched, we can see in the preface that especial help and acknowledgment is made to the noble Lords, Lord Peston and Lord Williams of Elvel. The crucial philosophical difference in it is that Mr. Hattersley rejects equality of opportunity, saying:
"The equal start and open road are not enough".
He wants equality of opportunity to be replaced by "equality of outcome". He writes:
"Changing the organisation of society—to produce the most equal outcome—is what is meant by 'equality of outcome'".
Mr. Hattersley then goes on to deal with the crucial issue of taxation. Since the Tories came to power they have reduced the top rate of tax from 98 per cent. to
902
40 per cent. and the standard rate from 33 per cent. to 25 per cent. I make a special tribute to Nigel Lawson because he took the most courageous decisions on tax. At the moment the Labour Party is in an awful muddle over tax. I believe that Mr. John Smith was genuinely surprised at the political uproar which greeted his "moderate" 59 per cent. marginal top tax rate. It is of course moderate in comparison with 98 per cent., but I fear that the electorate do not see 59 per cent. as moderate in comparison with the present top level of 40 per cent.
Mr. Kinnock may well be confused by all this, but Mr. Hattersley will be there to remind him where his duty lies. He writes:
"A socialist government committed to real equality will clearly embark on a massive programme of redistribution, confident it is more likely to improve overall economic performance than to depress it and certain that it will produce a more efficient rather than a less efficient use of resources".
Lord Jay: Quite right.
Lord Marlesford: I am so glad that the views of the deputy leader are so loyally followed by the noble Lord, Lord Jay. Who can seriously doubt that the privatisation of such industries as British Airways, British Telecom and of electricity distribution has been a success. I declare an interest but claim no credit— I am a director of Eastern Electricity. But wait; Mr. Hattersley again has a view:
"Public ownership, in the form of state corporations centrally owned, planned and administered, is essential for the public utilities".
Surely, noble Lords opposite realise by now that a privately-owned company can go to world capital markets without adding to the PSBR; that it is far easier for government to regulate, in the interests of the consumer, the employees and the environment, a company which they do not also own.
Finally, perhaps I may express my own deep concern for the effects of the recession on jobs, houses and small businesses. I blame to a considerable extent the banks for their contribution. In short, they have lent money when they should not have done and they are now looking as though they are not able to lend money when they should do so. I believe that it was the noble Lord, Lord Houghton, who made a similar point. One of the most immoral slogans that I have ever read came from a credit card company which said that their card "takes the waiting out of wanting". That is very bad advice.
In this country there has been a tradition for borrowers, particularly individuals and small business people, to assume that the banks, in making a loan, assess the credit-worthiness of the borrower. They believe that if a bank will lend, then it is prudent to borrow. The trouble is that the bankers have been looking at underlying assets instead of the borrowers' cash-flow capability for servicing and repaying the loans. Thus they have lent money against the security of absurdly high property prices. Now I fear that the banks are looking at their own ratios and calling in loans at just the time when they should be extending them. I am worried that we may in fact be faced with a liquidity crisis at a time when recovery is coming. That is why I believe that the Chancellor must do his bit next week to counteract that risk.

903
I would like to make some suggestions. I know that it is probably too late because the Chancellor has probably made his decisions, but someone somewhere might hear them. He should reintroduce, on a temporary basis, probably for two years, 100 per cent. capital allowances which were, unwisely in my view, reduced to 25 per cent. by Mr. Lawson. I would extend these allowances from merely plant and machinery to buildings as well. I would also extend, again on a temporary basis, VAT zero rating to expenditure on improvements to both commercial and domestic premises. There might be some difficulties of definition and thus some leakage, but it would, again to coin a phrase, be a price well worth paying.
I have a few words to say about the ERM. Of course there is a conflict in using interest rates to maintain parity in Britain at a time when it would be useful to cut rates to stimulate demand. That was a problem for three decades when we were tied to the Bretton Woods agreement. That is the main reason why Mrs. Thatcher was so reluctant to join the ERM. But we do not now have a realistic option of coming out; therefore my view is that the sooner we can move to a single currency, the better.
7.5 p.m.
Lord Desai: My Lords, I was going to speak about all kinds of noble things; social, ecological and so forth, but the speech of the noble Lord, Lord Marlesford, with whom I am normally twinned by the normal channels, is too tempting to let go. He said that inflation should be the judge and jury. Therefore, I shall talk about the inflation record of this Government.
This Government have twice doubled the rate of inflation. They have caused recession twice; one the deepest and the other the longest recession. They have doubled the rate of VAT. When noble Lords opposite talk about taxation, they never talk about overall taxation, which has gone up; they speak only about direct, personal income tax. We have to remember that the burden of taxation in this country has not gone down. The average level of unemployment has trebled between the 1970s and the 1980s. Despite that, the inflation record of the Government over 13 years is so abysmal that even now they have to go on saying "Wait a little longer and we will do better".
Perhaps I may remind noble Lords that when the Labour Party left office the inflation rate was 10 per cent., though it had been slightly lower before. Mrs. Thatcher soon made it 20 per cent. It is also very interesting to note that noble Lords opposite quote annual rates of inflation when talking about their record and the quarterly rate of inflation when talking about ours. The four quarter rate of inflation—that is to say, inflation in one quarter over the previous quarters—was 20 per cent soon after Mrs. Thatcher took office.
The problem was not the petro-pound as the noble Lord, Lord Marlesford, said. In any case an overvalued pound should cause deflation and not inflation. Despite the petro-pound we had one of the highest rates of inflation in OECD countries. We shall
904
forgive that. That inflation was brought down to 3.5 per cent. at a horrendous cost in terms of unemployment. What happened then was entirely predictable. While congratulating my noble friend Lord Peston in raising this topic, I must berate him a little for being too kind to Mr. Nigel Lawson. The problems that we have were not caused by Black Monday and what followed, but by electionitis which often hits Tory Chancellors rather severely. It hit Mr. Maudling and Mr. Barber rather severely, but we shall not talk about them. It also mildly hit Sir Geoffrey Howe, but we shall not talk about that election.
In the Autumn of 1986, the Chancellor, openly abandoned monetarism, in a speech at the Mansion House no less. The Financial Times had a headline,
"Monetarism is dead—official".
A £4.5 billion addition to the PSBR was inaugurated by Nigel Lawson for the simple reason of winning the next election. Keynesiansm had been rediscovered. It had been taken out of the cupboard and harnessed to the needs of the Government. Any faint parallels with the current election are, of course, entirely accidental. Every time an election comes about the Conservatives discover the virtues of Keynesiansm and the entirely sound logic of borrowing money. After the election fiscal prudence rules the roost. But the great thing about Nigel Lawson, the unassailable Chancellor and the hero of the Conservative Party conferences of 1987 and 1988, was that he did not stop after the election. He not only gave tax cuts in 1987, but also in 1988. That is an innovation in political democracy. We have had bribed electorates before an election, but to do so after an election is an entirely new development. Therefore, it is not so much that interest rates were cut in the wake of Black Monday that mattered. The seeds of the current crisis were sown in the Autumn of 1986. They were further fuelled in the Budget of 1987 and fuelled still further in the Budget of 1988, where the most horrendous bribe of double mortgages was given.
Let us remember another great Conservative story, which also happens every 20 years or so. It is the great belief that somehow the British economy is badly off because of restrictive practices; that we need freedom. The noble Lord, Lord Barber, when he was Chancellor, decided, with the help of my colleague and friend, the noble Lord, Lord Griffiths, that the City was too bound down by restrictions. He decided that competition and credit controls were needed. Two years later the Bank of England had to have a lifeboat for the number of secondary mortgage companies which had profligately given credit. That was done by a fiscally responsible, financially prudent government. It happened again in 1986 and 1987. We were told that deregulation—the big bang—was the order of the day; that it was virtuous to have de-regulation. It is immoral, it is greed, but we shall not go into that. Freedom was the great thing. We were told that if we did not have de-regulation in the financial services industry we would be very backward compared with other countries. De-regulation was openly adopted by this Government. Now Mr. Lawson tells us, five years later, "Oh! I didn't quite realise that while I was Chancellor £150 billion worth of credit was released in

905
one year by equity withdrawal from the housing market". It was well known. At the time people said we should not have done it. The National Institute's Economic Review, a Keynesian journal, stated in March 1988—noble Lords can check it—that a reflationary budget for 1988 would be ill-advised. A Keynesian review had advised, "Do not inflate now". What happened? The economy was further fuelled.
Lord Joseph: My Lords, I am grateful to the noble Lord for giving way. I cannot resist a slight recurrence of the House of Commons practice of intervening occasionally. How does the noble Lord reconcile his blame of the then Tory Government for a £4 billion relaxation on tax grounds with his legitimate worry about the huge, much larger, much more immense effect of £150 billion, he says—I think wrongly, by a factor of two—increase in credit? Surely it was the credit release that influenced the later inflation. I am amazed that the noble Lord ignores the lags that always follow the cause of inflation, before inflation arrives, when he so frivolously blames Mrs. Thatcher's Government for the fourth quarter level of price rises, which was a consequence of the inheritance from a Labour Government.
Lord Desai: My Lords, I thank the noble Lord for that. I would have liked to make similar remarks about the inflation rate of 1975, which is frequently mentioned by noble Lords opposite. They have talked about the lags and about OPEC. But fair is fair and this is politics. It is not just the £4 billion worth of tax cuts, plus the double mortgage scheme. We all have the knowledge that the housing market is a major distortion. Of course, all the great belief in market stops when it comes to housing market distortion. Despite knowing all that, the prudent Chancellor acted the way that he did. That is what invited inflation. Do not tell me that Finland is depressed. The knowledge of geography on the Benches opposite has gone up immensely lately. Inflation has been found in every country. All the problems of this country were created here by Conservative Chancellors who irresponsibly abandoned any financial discipline and caused the current crisis. This is a debt deflation crisis. Debts were encouraged by Chancellors of the party opposite. They have landed this country with a severe depression from which I fear it will take a long time to emerge. Unfortunately, it will be my party which once again will have to cure the country's ills, but I look forward very much to the challenge.
7.17 p.m.
Lord Pitt of Hampstead: My Lords, I am very pleased to be following my noble friend Lord Desai. In fact, I had intended to use my few minutes to talk about the housing situation, not in terms of homelessness but the actual economic consequences of housing policy. I should like also to congratulate and thank the noble Lord, Lord Rodgers of Quarry Bank, on his maiden speech. The two speeches have given a good introduction to my speech.
There is a growing awareness of the impact of our housing system on the British economy. I am sure that the noble Lord, Lord Joseph, will recognise that.
906
Housing is the tail that wags the economic dog. The housing market led us into recession and it is my view that it will keep us in recession. That is not an incidental feature of our crazy drive into owner-occupation. It is the inevitable outcome of a housing policy which has put the dogma of ownership above a commitment to house all our citizens. That is the real problem. We have become a nation of price speculators. We now invest in housing and not in savings that can he used for productive investment. The present savings ratio has fallen from 9.7 per cent. in 1985 to 6.8 per cent. in 1991. Our savings ratio is very low in relation to our European neighbours who have continued to invest in areas of wealth creation. That phenomenon goes a long way to explain our balance of payments deficits. As noble Lords know, these deficits are getting larger and larger at a time when our trade should be in surplus.
Primarily as a result of de-regulation—that was mentioned by my noble friend who has since left the Chamber—we borrowed to buy housing. But we did not stop there. We borrowed against our increased housing wealth. Our houses were worth much more so we borrowed much more and then we spent. That is a basic fact.
In a report by the Joseph Rowntree Foundation it was estimated that in 1988 we borrowed and spent £16.4 billion in equity withdrawal from housing. That contrasts with less than £1 billion a decade earlier. That is why the Chancellor has had to keep interest rates high. He had to control borrowing and spending. For the past eight years our nominal short term interest rates have been continuously higher than those of France, Germany, the United States and Japan.
The price is being paid in terms of the erosion of investment in our manufacturing base, on which recovery depends. We are now paying a high price for this in terms of housing policy. In 1991 there were 75,000 repossessions and I am told that the figure is set to rise again this year despite the Government's attempt to paper over the cracks with their mortgage rescue packages. However, there are other side effects of our housing policy. Labour mobility is restricted. High rents and high construction costs as a result of speculation in land also feed through into wage inflation. My noble friend Lord Desai was right on that point.
How bad these effects of our housing policy will be depends entirely on the stage we are at in the economic cycle. What we have in the housing industry are booms and busts as in the economy as a whole. The housing industry at the moment is going through a period of bust. The destabilising effects of our housing system on the whole economy have been compounded by the reductions in public sector house building. At the start of the 1980s the public sector accounted for 40 per cent. of house building. By 1990, the share had fallen to 10 per cent. Public sector house building allowed building companies to plan effectively for a cost-effective output. However, at the present time the building industry needs a crystal ball to predict what it will be able to sell and at what price. We need that steady market of house building through the public

907
sector. But now we have the uncertain market and an inability to respond quickly. If the current uncertainty continues there is no way in which companies can equip themselves to respond to the need. What is more, the boom and bust cycle encourages short-term fluctuations in a market that needs stability.
The collapse of the private building programmes, the bankruptcies and the unemployment of the past year are the inevitable consequences of this housing system. It can only be avoided by insulating housing investment from the economic cycle. We must give serious thought to doing that. That would produce more stability in the industry and better value for money. If we wish to have a sensible economic policy the reform of housing finance must be a key factor.
With the gloss temporarily off the house ownership mania we have a short period in which, by careful planning and adopting the right policy, we may be able to change course. I hope that we shall do that. I have often spoken in your Lordships' House about the consequences of homelessness. The more I have learnt about housing and housing finance—I have learnt a good deal over the past 12 years—the more convinced I have become that getting housing policy right is not only socially just but economically essential.
My time is up and I shall not delay the House much longer. We can and should have a stimulus by providing new houses. A report of the Institute of Housing recently suggested that every £1 million invested in new houses or renovations creates 50 new jobs. It went on to say that if 100,000 new jobs can be created overall, something over £750 million would be gained by the Exchequer. I hope that everyone who is concerned about our economic situation will think about that.
7.26 p.m.
Lord Kagan: My Lords, perhaps a big contribution could be made to the well-being of the economy if it could be taken out of the political arena. I do not think that it is within the ability of any single party fundamentally to solve the problems. Since the last war every government, when faced with having to adopt painful, difficult or unpopular measures, have had to decide whether to do what is economically right, which looked like political suicide, or what is politically right, and then hope for the best on the other side. This weakness does not apply to Germany or Japan. That is one of the fundamental differences in their performance.
Dictatorship has been discredited, as we have seen in the East, but democracy has not yet quite proved its competence to deal with its problems. Our debate should be not so much about "Who has done it?" but "What is to be done?". The diagnosis, whether we are in good circumstances and everything is lovely or whether we are in a trough, is not so difficult. Forty years ago, just after the war, we were the number four industrial power. Now we are number 26, just above Greece and below Spain. We have gas, we have oil, we have coal and we have unrivalled know-how. We have a wonderful banking system in the City. The Germans
908
have no gas, no oil and no coal. The same is true of the Japanese. Their surpluses are bigger than our deficits. Do we need any more analysis in that regard?
After the war we were in the front row of the industrial arena. Now we are in the stalls—not, it is to be hoped, stalled—but where are we heading? An important component in the economy is labour. Ford in Britain manufactures 11 cars per man year. Rover manufactures eight cars per man year. Nissan—and this is the difference between Japanese management and British management—manufactures 26 cars per man year; and in the new Derbyshire plant of Toyota it is planned to produce 52 cars per man year. Yet the Nissan managing director is on record as saying that, having introduced its methods (which have been accepted by the carefully recruited people), the company finds that the British labour force is every bit as good and even better than the Japanese labour force in the core factories in Japan.
Therefore, is the decline that we are suffering inevitable or is it self-inflicted; and, finally, is it reversible? Let us look at the other component involved, which is capital. German banks invest while our banks lend. The difference in that involvement is that German industry and German managers can plan long term, while here we have to plan in the short term, depending on the City's opinion almost every morning. Yet we have some of the best know-how and innovation of any industrial nation. But, unfortunately, it is being exploited by the Americans, partly by the Germans and by the Japanese.
In Germany money is invested, money is made and wealth created in production. But here it is more a matter of buying and selling shares; in other words, paper transactions. If noble Lords will permit me, I shall briefly recall a joke. Two crofters were lamenting their financial problems in the pub. The publican revealed that he made 50p profit on every pounds-worth of Whisky. Suddenly Jock said to Mac, "I have the answer. We will go home and find the deed to the croft. We will pledge it and buy two big cases of whisky and take them home. I'll sell you a tot and you can sell me a tot and by the time we have finished we will have made a fortune". That is how the British economy works so far as concerns wealth creation.
In my opinion, the situation is as serious as the war, despite the fact that there is no gore and no blood. It needs the same approach and the same support that the War Cabinet received. For all our sakes, I hope that some day we shall get an economic Churchill and a wise, co-operating, economic Attlee.
7.34 p.m.
Lord Ezra: My Lords, as other noble Lords have said, my noble friend Lord Rodgers of Quarry Bank made an impressive and practised speech during the course of the debate. He raised many important issues, some of which I should like to return to. The purpose of the debate, introduced with his usual vigour by the noble Lord, Lord Peston, has been,
"to call attention to the state of the economy and its social consequences".
The time has come to try to draw some conclusions. Unfortunately, there is little doubt about the state of

909
the economy. As many noble Lords have said on both sides of the House, Britain is now going through the longest running recession since the war. Output has fallen, investment has fallen and the trade balance has worsened. As the noble Lord, Lord Joseph, accepted in his carefully considered speech, the recession in Britain started before other countries began experiencing economic difficulties and was not identified soon enough. Now that other countries are also in recession, the situation in Britain has been exacerbated. As the noble Lord, Lord Boyd-Carpenter, reminded us, it is perfectly true that inflation has been brought down and there has been some reduction in interest rates. But the impact of those measures has not been near enough to offset the recession.
The social consequences of the parlous state of the economy are clear. There has been high and rising unemployment. There is a high level of personal indebtedness, leading to much human suffering and anguish. That point was made by the noble Baroness, Lady Hollis, and by my noble friend Lord Cobbold. There is a high and continuing level of repossessions, leading to an increase in the already unacceptable number of people without proper homes. The noble Lord, Lord Boardman, referred to that fact.
All political parties are committed to bringing the recession to an end and to alleviating the social problems which it has created. The question is how to do that effectively and in such a way as to avoid leading to a further recession in due course. Trade cycles of some sort are no doubt inevitable. But Britain has suffered from a series of deeper recessions than other developed countries in recent years—an issue referred to by my noble friend Lord Rodgers. That has undoubtedly weakened the economic and social fabric of the country. The noble Baroness, Lady Hilton, specifically mentioned the latter.
One way of trying to end the recession is to take measures to stimulate consumer spending. It is argued that such measures would in turn stimulate production and thus work through the economy. But, in my opinion, that reasoning is fallacious, despite the Australian example quoted by the noble Lord, Lord Houghton, in his, as usual, stimulating speech. The recently published trade figures for January have shown that even in a period of deep and continuing recession imports remain at a high level, while exports have unfortunately diminished. That point was specifically referred to by my noble friend Lord Jenkins of Hillhead and by other speakers. It is, therefore, clear that much import substitution is still continuing. A resurgence of consumer demand would almost certainly have the effect of increasing the import bill and worsening the current account balance. Thus, before a major stimulus is given to consumption, there should be a stimulus to investment in industry and the supporting infrastructure.
Possibly the major economic problem besetting Britain is the inadequacy of industrial capacity. The problem has been masked to some degree in recent years by increases in productivity. Increased productivity is obviously welcome. The gap between British and German productivity, for example, has been substantially reduced. But a recent survey has shown
910
that the main remaining differences in industrial policy between the two countries is the consistently greater level of investment in people, in research and in plant in Germany than in Britain. Increasing productivity on a diminishing base will not provide the answer to Britain's economic problem.
Thus measures to increase industrial capacity have become a priority. The noble Lord, Lord Wade, emphasised the need to encourage industrial investment. Now is the time for a whole range of measures to be taken. They include increasing capital allowance, as proposed by the noble Lord, Lord Marlesford, cutting the uniform business rate and, above all, providing special help to small businesses that have suffered worst in the recession. There should also be a further stimulus to training, and research and development. There is a risk that in periods of recession business expenditure on these items is cut back. The Industrial Society, in a recently published report, has provided evidence that substantial retrenchment on training is already taking place. That view was confirmed by my noble friend Lord Rodgers in regard to the architectural profession. There is also evidence of a cutback in R&D. These trends must be reversed urgently.
Measures to stimulate industrial activity should be accompanied by measures in the infrastructure. Some attention is already being paid to that. In particular, in view of the dire straits of the construction industry, to which many noble Lords have referred, it is urgent that more of the accumulated capital receipts from council house sales should be released. That is not only economically but also socially desirable. A proportion of these resources should be devoted to improving the declining standard of much of the existing housing stock. Transport is another area requiring urgent attention. While measures have been taken to increase investment in public transport, everybody agrees that much more needs to be done. In particular, the railways should be made free to borrow from private sources in order to top up what is made available to them from public sources.
The country is not only facing a major political choice in the forthcoming election. It is also facing a choice in economic and social policies which can determine prospects for many years to come. The vital issue is to ensure that we come out of the present recession in a way which is sustainable and does not contain within it the seeds of the next recession.
7.42 p.m.
Lord Donoughue: My Lords, I see that we are underruning on our time and I am happy to use some of that time to congratulate the noble Lord, Lord Rodgers, on his powerful maiden speech. I worked with him in politics over 30 years ago and am aware of his skills and of the robustness that he has demonstrated today. He reported that one in three architecture students have no professional prospects; they have qualifications without employment. The same bleak future faces so many of our children.
We are discussing a most curious as well as a painful recession or slump—because it really is a slump and we might as well call a spade a spade. It is

911
curious because for long after the statistics showed that it had arrived, with growing unemployment, bankruptcies and housing repossessions, the Prime Minister denied its existence. Then when he finally admitted its presence as Chancellor in November 1990 he announced its immediate departure. He categorically forecast that it would be the briefest and shallowest downturn on record, that it would end in the first half of 1991 and that the economy would then rebound at a miraculous annual rate of 4.3 per cent. Remember that? Well, how wrong can you be? The slump is sadly still with us and is getting worse according to the latest industrial trends survey from the Confederation of British Industry.
As has been said, the economy has been in decline now for six quarters. It is the worst decline since the war. The fall in output last year was the steepest since 1931. The Treasury has helpfully briefed the press saying that it should not exaggerate and that in some ways this recession is not as steep as the Thatcher recession of the early 1980s. That is some comfort! There is still time—because this recession is lengthening and deepening and there is no statistical evidence for the Government's present optimism. Already the below-average growth rate that we have had since 1979 is estimated to have cost the nation £50 billion in lost additional resources, as my noble friend Lord Jay argued.
The Government have recently tried to put the blame on the world recession. I am afraid that that will not stand up to scrutiny. The recession started earliest in Britain because of the policy failures of up to six years ago when the Government deregulated the building societies in 1986. I stress that that was before the Stock Market crash. Monetary numbers were already going wrong that early. The Government then tracked the deutschmark at the wrong time and then slashed direct taxes around the time of the 1987 election, as my noble friend Lord Desai demonstrated so wittily. Thus the Government unleashed a consumer credit and housing boom, the damaging consequences of which still hurt millions of unemployed people, mortgagees, bankrupts and those dispossessed of their homes, to whom my noble friend Lord Pitt referred.
That was economic mismanagement, home-grown, British-made. It was made in No. 11 Downing Street when—let us not forget—the present Prime Minister was resident there. Certainly the world recession has made it more difficult to recover now, but the causes lie in British economic mismanagement. The recession is worst in Britain. That is especially the case in relation to unemployment, as my noble friend Lord McCarthy so incontestably proved. Eight of the 10 regions in Europe with the fastest rising unemployment are in Britain, led by the South East, the South West and East Anglia.
So what is the future outlook? How are the Government proposing to get out of this box? City forecasts are for growth of only 1 per cent. in 1992–93 and the Government have left themselves with few policy options to end the slump. Consumer spending is flat, constrained by personal debt. Corporate
912
spending is flat, constrained by company debt. The banks are in no position to encourage lending, and interest rates—probably the best way to launch a recovery—are constrained by a weak sterling in the exchange rate mechanism. The ammunition for public spending was expended last autumn. There is no honest scope for cutting taxes with a public sector borrowing requirement that is rocketing towards £25 billion next year.
So what is proposed? Apparently what is proposed is tax cuts, financed by ever-more borrowing and a higher PSBR. As my noble friend Lord Peston stated, there is of course a case for running a public deficit at the depths of a recession. We on this side have always supported that, often under criticism from the puritans of the Chicago school. But that depends on two things: the timing and the purpose.
On the timing, if the economy is about to recover, as the Government naturally claim, this is the wrong time. It should have happened earlier. If, however, this is the right time—in the depths of the recession when we need that boost—the Government have been misleading us when they have claimed that recovery is just around the corner.
But the purpose is the most important factor and, I believe, represents the largest political difference between the two sides of the House. It is obviously sensible to run a reasonable deficit in a recession for purposes of capital investment, for the social infrastructure, to encourage individual investment and for welfare to help the victims of the recession. But borrowing simply to finance direct tax cuts ahead of an election is, at best, deeply cynical, as several Conservative Members of Parliament and City commentators have honestly and courageously stated, even using the word "fraud" in one case, which I am sure that we on this side would never use. Such tax cuts would not help those most in need of help in the slump—the unemployed and the homeless. It is worth pointing out that direct tax cuts are not even the most efficient way to kick-start the economy since some of the benefits would be saved, not spent, especially by the better-off, who would be the greatest beneficiaries.
The Government's somersault over the PSBR is breathtaking, especially in the light of past Conservative criticism of Labour's borrowing proposals, often described as immoral. It is only three years since John Major, then Chancellor, said:
"In future years, our strategy will be based on a zero public sector borrowing requirement".
His Chancellor now faces a PSBR of £25 billion, and is considering tax cuts to make it worse. Mr. Major added the next day in March 1988 that,
"it is unwise economically, and wrong socially"—
for Governments—
"to spend more than they are prepared to raise honestly in taxation".
In the Daily Telegraph on 21st February this year, just days ago, he suggests that a PSBR of £30 billion—5 per cent. of national income—is OK. What a somersault as the election approaches.
Big tax cuts now against a background of a PSBR deficit of £25 billion mean that we will have to pay for them later. Will the Government once again, if they win the election, massively increase VAT as after the

913
1979 election or make slashing cuts in public services and social benefits? With the City forecasting gilt issues of £30 billion next year, tax cuts would ensure years more of high interest rates.
Our conclusion must be that now the glitter and hype of the economic miracle have peeled away—as the noble Lord, Lord Jenkins of Hillhead, so bitingly described it—we see a discouraging picture and a dismal inheritance for any new government. Productivity has improved. Inflation has improved, and that is good; but there is no long-term security in the present lower inflation. Once the economy revives, with our diminished manufacturing capacity inflation will revive. I enjoyed, as usual, the reference made by the noble Lord, Lord Marlesford, to the trade-offs between inflation and unemployment. I enjoyed it partly because he admitted, almost brazenly, that the Government began in 1979, whereas the Minister's figures almost always begin in 1981. However, on not riding two horses at the same time, I should tell the noble Lord that one of my previous employers in Downing Street always used to say, "If you cannot ride two horses at the same time, you shouldn't be in the circus".
But what a price to pay for reducing inflation—with a crippled economy and all the social damage that has resulted, as was explained in several distinguished speeches which have left me nothing to say on that point. My noble friend Lady Hollis made a comprehensive sweep of the social landscape; my noble friend Lady Hilton was authoritative on law and order; my noble friend Lord John-Mackie was equally authoritative on agriculture; my noble friend Lord Rea spoke about increasing inequalities; and the interesting link with the developing world was powerfully put by my noble friends Lord Judd and Lord Hatch.
Consequently, the social and economic problems in our society remain uncured and in many ways worse. Long-term structural unemployment is worse; our manufacturing base is diminished; investment is too low; our transport infrastructure is collapsing; and, above all, our education system, upon which the country's future depends, is demoralised and deprived of adequate resources.
Next week's Budget, if the Government can agree upon it, will most likely be irrelevant to those economic and social fundamentals. Any tax cuts threaten to be as ephemeral and as rash as a shot of heroin in the arm of the electorate, with the Government hoping that the euphoric delusion and escape from reality will last until the election is over. Well, as Mr. Major himself has said, future generations will be left to pick up the bill. The Government are divided, dithering and uncertain. They are uncertain about what to do in the Budget and even about when to face the electorate. But there is no uncertainty about where the responsibility lies for our sad economic and social problems: it lies with the Government, and we are certain about the electorate's imminent decision. It is time for a change.
7.55 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, I was most interested to hear that the noble Lord, Lord Donoughue, wants to return to the circus. I wonder whether it is as a tightrope walker, a juggler or perhaps even one of the clowns. I join all other noble Lords in congratulating the noble Lord, Lord Rodgers, on his maiden speech. I admire his ability to choose a subject as uncontroversial as the state of the economy when as director general of the RIBA he could have spoken on much more controversial matters such as the current state of architecture and the standards of modern architects. I admire his discretion.
The debate has covered many subjects. I am sure that noble Lords will understand if I say at the outset that I cannot respond to most of the points. I do not believe that anyone will expect me to deal at great length with matters relating to agriculture, important though they are in the context of the entire economy. Similarly, I do not intend to cover OPEC, Canada, Australia, overseas aid, environmental problems or even drug abuse, as mentioned by the noble Lord, Lord Rea. I should, however, like to remind the noble Lord that drug abuse is not merely a question related to levels of income; it exists at all income levels. To try to attribute the problem to low standards of living is going a bit too far.
Lord Rea: My Lords, that was not the point about drug abuse that I was making. It was to show that it has the most severe economic effects and affects crime. The people who are the main drug abusers in this country are the unemployed and the disadvantaged.
Lord Henley: My Lords, I accept that. All I am saying is that it is not a subject into which I can go in any great detail on an occasion such as this. It is a problem in all sections of society. There was considerable speculation by the noble Lord, Lord Donoughue, and others about the Government's plans. They will be announced in the forthcoming Budget. Noble Lords will understand that those are not matters upon which it would be right for me to respond. Noble Lords will have to wait until my right honourable friend makes his Budget Statement next week. Even the noble Lord, Lord Hatch, will accept that he could not expect a statement on those matters from me.
The noble Lord, Lord McCarthy, was somewhat surprised that there had been no mention of the various social consequences to which the Motion refers. I intend to concentrate more on that topic. My noble friend Lord Brabazon dealt largely with the Government's economic policy. Perhaps noble Lords will bear with me, but I intend to concentrate upon social aspects.
The noble Baroness, Lady Hollis, made a passionate speech about the income levels of many of the less well off in society. She was of course wrong on a number of key points. For example, it is not true that the poorest 10 per cent. of the population have seen no

915
improvement in their incomes. I shall quote from a report on low incomes by the Social Services Select Committee in another place:
"Real disposable incomes grew by more than 30 per cent. between 1979 and 1988, with increases in real incomes being seen at all levels of income scale".
The noble Lord, Lord Hatch, claimed that the incomes of the poorest 20 per cent. had fallen over that period. I refute that. If the noble Lord looks at the households below average income figures that the Government have produced, he will find that every decile has seen increases in real disposable income.
Baroness Hollis of Heigham: My Lords, I am grateful to the Minister for giving way. Had he completed the quotation from the report of the Select Committee on Social Security chaired by Frank Field in another place, he would have told the House that the increase, after housing costs, to the lowest 10 per cent. was under 2 per cent. compared with an average of 35 per cent. As a result of a recalculation of the Government's figures which misled the other place, I am sure unintentionally, at an earlier stage, it was clear that there had been no increase in real wealth for the bottom 10 per cent.
Lord Henley: My Lords, that is simply not the case. For every group, for every quintile or decile there has been an increase in real disposable income. The noble Baroness and the noble Lord, Lord Peston, went on to complain about cuts in benefit. This is at a time when we have seen growth in social security expenditure of 40 per cent. over the past 11 years. They mentioned cuts allegedly in the income of pensioners at a time when we have seen the income of pensioners grow by over a third in real terms, since 1979. We have seen the average real income of pensioners grow by 3 per cent. per year.
I shall not give way to the noble Baroness. We have seen the incomes of pensioners grow on average by 3 per cent. a year over the past 10 or 12 years. Under the last Labour Government, it grew by 3 per cent. in the entire period of Labour Government, that is 0.6 per cent. per year. We have seen it grow by more than that in every year.
The noble Baroness says, "because of SERPS". The income of pensioners from savings under the last Labour Government fell. The income of pensioners from savings under this Government more than doubled. The same is true of the income of pensioners from occupational pensions. I could go on. At the same time, we have seen that the less well off pensioner has not lost out. We have seen increases above the rate of inflation in rates of income support premiums paid to pensioners.
I do not accept that there has been a failure of the wealth of the nation to trickle down. I do not accept that, as the noble Baroness argued, we have seen a growth in the number of those in poverty. I totally reject the noble Baroness's computation of poverty. Neither this Government nor any previous government have acknowledged her or any other definition of poverty.
To argue that the gap between the top 20 per cent. and the bottom 20 per cent. is greater than it was 100
916
years ago is living in cloud-cuckoo-land. To compare the bottom 20 per cent. in the income scale today with the bottom 20, 30, 40, 50 or even 60 or 70 per cent. of the population 100 years ago is simply not on. We are not comparing like with like. As I said before, we have seen the income of every section of the community grow.
To take one example of growth in social security expenditure, we have seen expenditure on the long-term sick and disabled grow by of the order of 100 to 140 per cent. In today's prices it has gone from £5 billion in 1979 to an expenditure of around £12 billion today. No doubt the noble Baroness and others will argue that the levels have not gone up, there are just more recipients. I quite accept the argument that there are more recipients of benefits for the long-term sick and disabled. But even the noble Baroness would not argue that it was a Tory Government who made those people disabled. What we have done is seen more benefits for the disabled reach more people.
Lord Hatch of Lusby: My Lords, perhaps I may intervene as the noble Lord mentioned me. Will he read the Government's family expenditure survey reports of 1988 and 1989, look at the figures and see whether my figures were correct? If they were, perhaps he will make an apology; and, if they were wrong, will he refute them?
Lord Henley: My Lords, I imagined that the noble Lord based his figures on the survey figures. However, I must caution him about the possibly incautious use of statistics. The fact that the figures use money values confirms that they are not taken from the households below average income series of statistics from which I quoted. That is the agreed, sound basis on which the Government measure income changes over time. This series, recognised by the Institute of Fiscal Studies and the Select Committee on Social Security, is used because it is not prey to the errors which can arise if a single comparison between different individual years' figures is made. An allowance has to be made, for example, for changes in the composition of households over time and the HBAI series showed that the poorest 10 per cent. of households saw real increases in incomes between 1979 and 1987. The social security Select Committee's own figures confirm this trend for the years from 1979 to 1988. I am afraid that I cannot take the noble Lord beyond those figures because the figures end in 1988.
The noble Baroness, Lady Hilton, seemed to argue that it was poverty or relative deprivation that caused crime. She particularly blamed the riots in North Tyneside on low incomes and poverty. I have to say that I do not accept that argument. I can see that the theory that a growth in unemployment is accompanied by people helping themselves or feeling released from the constraints of normal society may seem to make sense. However, it is not borne out by careful analysis. It is also—and this is a much repeated truism for which I make no apology—an insult to the majority of the unemployed and less well off to say that the mere state they are in will drive them to crime. To argue that the state of the economy pushes people into—
Baroness Hilton of Eggardon: My Lords, I said clearly that the causes of crime were multi-factorial and in no way did I traduce the majority of people who are unemployed. I argued carefully that it was a variety of factors, one of which might be the atmosphere of materialism created by the Government. It was not just unemployment by any means that created crime.
Lord Henley: My Lords, this is a time-limited debate and I do not intend to take any more interventions. I noted what the noble Baroness said. I intend to speak for 25 minutes and I shall sit down at the end of that time to allow the noble Lord, Lord Peston, to wind up.
I accept, as the noble Baroness does, that there is no single cause of crime. There are many factors which may increase the likelihood of someone choosing to offend, including behaviour and values of parents. It is the existence of aggravating factors that makes it possible to pursue various kinds of preventive measures. But this does not mean that they are excuses for lawlessness or hooliganism. Low incomes or unemployment do not cause crime, and we should be wary of offering up justifications for those who are only too ready to enlist them in the denial of their own responsibility and culpability.
In passing, I also wish to say to the noble Baroness that I reject her allegations that changes to the benefit regime for 16 to 17 year-olds encouraged crime. We offer three options: school, training or work. What we do not offer is the option to go on to benefit with the certain exceptions that exist for those in the vulnerable groups. We do not offer the option to go on to benefit at an early age and for people to absorb themselves into a culture of benefit dependency. It is that option that noble Lords and noble Baronesses opposite have recommended. It is that option that I suggest is far more likely to lead to a life of crime.
Turning briefly to some of the health issues that have been raised, perhaps I may say in passing that the noble Lord, Lord Peston, made the point that he would like to distinguish between the Government's spending on capital and income. I ought to say a little about capital expenditure in the health service. Over the past 12 or 13 years we have seen over 500 major hospital building schemes started or completed. Under the last Labour Government, capital spending in the National Health Service fell by 29 per cent.
The noble Lord, Lord Rea, complains about the growing gap in health provision. I would like to make one or two brief comments.
Lord Rea: Not health provision, health.
Lord Henley: My Lords, the noble Lord spoke purely about health rather than health provision. I should like to make two points purely about health. First, the noble Lord said that by certain changes in lifestyle, we could see an increase in life expectancy of two years. May I tell him that during the last years of Conservative Government we have seen a growth in life expectancy of exactly that—two years, since 1979? That is a considerable increase.
918
I think the noble Lord then went on to allege that the least well off, that is those on income support, were probably unable to afford an adequate diet and that dietary aspects were one of the most important parts of health. That argument again does not hold. I would accept that an adequate diet is important to health, but there is no evidence that one cannot maintain an adequate diet on income support levels. There is no evidence that massive increases in benefit levels would merely lead to better expenditure on food.
Lord Rea: My Lords, I did not mention diet once.
Lord Henley: My Lords, the noble Lord also made a rather interesting comparison between the United Kingdom and Japan showing the effect of relative deprivation on health in contrast to the effects of the overall level of prosperity. I suspect there must be something missing from this story. One cannot suggest that we could improve the health of the least well off simply by reducing the incomes of the better off. As the noble Lord himself will know, we prefer rather less occult methods of pursuing greater prosperity and efficiency in health provision.
The noble Lord, Lord McCarthy, attacked this Government—on various occasions we had argued quite rightly in favour of certain proposals—on the grounds that our proposals might have had deleterious effects on employment and levels of unemployment. I stick by that. I accept that the current level of unemployment is regrettable. But one should also stress two things: we have the second highest level of employment within the European Community. I believe my noble friend Lord Wade said that. To then move on to the Opposition's rather ludicrous and absurd policy of bringing in a national minimum wage would do massive damage to the economy. Up to 2 million jobs could be destroyed by the second stage—
Noble Lords: Order!
Lord McCarthy: My Lords, I believe the Minister is actually going to give way. Will the Minister not answer my point that this figure of 2 million is 24 times the reasonable estimate of everyone else? Why do the Government keep making these figures up?
Lord Henley: My Lords, I have not the first idea who everybody else is. I see that the noble Baroness, Lady Hollis, points to the noble Lord, Lord McCarthy. Therefore I take it the noble Lord is who is meant by everybody else. I take her point. Up to 2 million jobs could be destroyed by the second stage of the minimum wage if pay differentials were fully restored. Most studies of employment effect agreed there would be considerable job losses. I would include among those studies even a study by the Fabian Society—the noble Lord might know a little about that society—entitled Making a Minimum Wage Work which concedes that up to 880,000 job losses have been estimated.
I shall now say a few words about the ERM. That has caused some anxiety to both my noble friend Lord Joseph and to the noble Lord, Lord Jay. We joined the ERM in October 1990 when we judged the time was

919
right. Some claim that we joined at too high a rate. In fact we joined at around the long run average. Since then, our inflation rate has fallen to below the EC average and within a whisker of Germany's. Interest rate reductions have been made possible by a steadfast commitment to maintaining sterling within its ERM bands. Far from stimulating the domestic economy, devaluation might make interest rate rises necessary as the markets encountered doubt again about our anti-inflation commitment. The Government will do nothing to undermine our ERM position or our anti-inflation stance.
In conclusion, I hope I may pull together just three strands of what has been said today. First, we are in a position to weather the social effects of the current economic position only because this Government have laid firm foundations by controlling public expenditure and maintaining downward pressure on inflation—my noble friend Lord Boyd-Carpenter underlined that policy was important—and by improving the efficiency and effectiveness of public sector services during a period of sustained economic growth. These foundations lie both in the public sector and in the increased capacity of individuals to take responsibility for providing for their own futures.
The second point is that despite the implication conveyed to some degree in the Motion of this debate, we are not as a government being compelled by the economy to forgo investment in future, nor are we unable to make provision for those who are affected by the recession. Thirdly, it is most important to recognise that we have put in place the necessary conditions not only for economic recovery but also for continuing flexibility and dynamism in the economy in years to come.
The last year has been a trying one for many families and businesses. Unemployment and business failure cause difficulties whenever they occur, but they are perhaps even harder to weather when the economy in general is sluggish. No one would seek to deny that the problems associated with recession are serious. But the problems which attend runaway inflation are more serious still and the disproportionate costs which inflation imposes on the less well off should be universally acknowledged. Obviously they are not acknowledged by the noble Lord, Lord Rea, and others.
It has been clear for some time that recovery has been delayed for longer than was hoped at the time of the Autumn Statement. But it is equally clear that conditions for recovery are in place, as my noble friend Lord Boardman said. Low inflation and lower interest rates; rising real earnings and improving financial positions among the personal and corporate sectors all create the basis for a renewal of consumer confidence and a subsequent upturn in demand.
The Government and the majority of independent forecasters expect growth to become established in the course of 1992. Because it will be grounded in low inflation, that growth will be sustainable. This is good news for everyone, for growth on those terms is the only reliable foundation for properly considered social provision. Growth alone might furnish funds in any
920
given year; but unless it is sustained beyond that, the programmes it finances are doomed to be both short term and short termist—the bad British disease identified by the noble Lord, Lord Jenkins.
We may differ to some degree about the ways and means to ensure a healthy economy and a healthy society, but I feel we can agree, in the final analysis, that it is the confidence of the individual human being and his commitment to and enthusiastic investment in the future which sustain these goals in the long term. I believe we have done much to ensure that those necessary conditions will continue to flourish.
8.17 p.m.
Lord Peston: My Lords, it remains for me to thank all noble Lords who have taken part in this debate. I must of course congratulate the noble Lord, Lord Rodgers of Quarry Bank, on his excellent maiden speech. However, I found all the speeches most interesting. Indeed I am tempted by the quite fascinating contribution of the noble Lord, Lord Henley, to start the debate all over again but I hasten to add that I shall refrain from doing so. I sincerely believe there are many sides to these economic and social questions and little is known for certain. Therefore we may agree to differ, but honourably so. My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

British Waterways Bill [H.L.]
8.19 p.m.
Proceedings after Third Reading.
In the Preamble:
Lord Cornwallis Lord Cornwallis moved Amendment No. A1:
Page 1, line 7, after ("where") insert ("it would not be reasonably practicable for ").
The noble Lord said: My Lords, with the leave of the House I should like to make one or two opening remarks in respect of the 19 amendments which are down in my name. In order to save the time of the House it may be helpful if I say that to the best of my knowledge and belief all of the amendments are agreed amendments. Therefore I hope that the House will not consider it discourteous if I introduce them with the minimum of preamble, with the exception of Amendment No. 19L which needs considerable explanation.
In moving Amendment No. A1, I should like to speak also to Amendments Nos. A2, 5A, 5F and 5L. At present the Bill turns entirely on the convenience of the British Waterways Board. The purpose of the amendments is to strengthen the conditions under which the board can enter on to land for the purpose of carrying out maintenance works to canals. It puts the onus on the board to prove that it is not practicable for the works to be carried out in any other way. I believe that the noble Earl is willing to accept the amendments. I beg to move.
The Deputy Speaker (Lord Boston of Faversham): My Lords, in view of the fact that the noble Lord has spoken also to Amendment No. 5F, although I shall

921
call that amendment in due course when we come to it, perhaps I should point out at this stage that if Amendment No. 5F is agreed to I cannot call Amendment No. 5G.
Lord McIntosh of Haringey: My Lords, I am not sure under what rules we are working in this consideration of the Bill because I have not before encountered consideration after Third Reading. I was going to say that it would be enormously helpful if we had a copy of the grouping of amendments but we now have one. I am most grateful.
Earl Jellicoe: My Lords, I rise to confirm what the noble Lord, Lord Cornwallis, said. As the sponsor of the Bill, I confirm that the group of amendments is acceptable.
Lord Burton: My Lords, I should like to add my congratulations to the noble Lord. I know that he has struggled hard for a long time to achieve these improvements to the Bill. They represent a marked improvement. I should also like to thank my noble friend Lord Jellicoe for accepting the amendment.
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. A2:
Page 1, line 8, leave out ("cannot conveniently") and insert ("to").
On Question, amendment agreed to.
Clause 2 [Interpretation]
[Amendments Nos. 1 and 2 had been withdrawn from the Marshalled List.]
The Deputy Speaker: My Lords, if Amendment No. 3 is agreed to I cannot call Amendment No. 3A.
Lord Burton Lord Burton moved Amendment No. 3:
Page 2 line 40, leave out from ("1961") to end of line 41.
The noble Lord said: My Lords, in moving Amendment No. 3, it may be for the convenience of the House if I speak also to Amendments Nos. 3A, 4, 5, 5B, 5E, 5H, 6 to 11, 12, 20, 20A, 21 and 21A.
As recently as Monday the agreement of the British Waterways Board was finally secured to the exclusion of the four big lochs on the Caledonian Canal. As they represent more than half of the operational waterways in Scotland the position regarding my amendments—which I have had down for some time—has changed markedly. The situation is very much improved. For having secured that alteration I am very much indebted to my noble friends Lord Gray of Contin and Lord Elton. I should also like to give a special mention to Mr. Forbes Rennie, a lawyer from the Highland Regional Council. All have expressed their gratitude to my noble friend Lord Jellicoe, without whom it would have been very difficult to make this progress.
I should also like particularly to thank Mr. Rennie, who has consistently pleaded the case of the Highland Regional Council and the people of the North in a forceful and eloquent manner since he came on the scene on 9th January this year. I know that my noble friend Lord Gray, who has another appointment and is unable to be present tonight, would like me to add his thanks to Mr. Rennie and to my noble friend Lord Jellicoe.
I should like to add one more and very deserving thank you to Mr. Keith, the Clerk who deals with Private Bills in this House. He has achieved the impossible. He has worked very long hours on the Bill, often at short notice. He has shown great courtesy and efficiency. I am sure that other noble Lords are also indebted to him.
I am sorry that the groupings list did not reach the Front Bench on the other side of the House. It was produced at the last minute, with the help of Mr. Keith and my noble friend Lord Jellicoe. We should have tried to provide noble Lords opposite with a copy earlier.
By securing the removal of Loch Lochy, Loch Oich, Loch Ness and Loch Dochfour from the Bill a large number of problems have been solved. However, that has rather pulled my feet from under me so far as regards the removal from the Bill of the rest of Scotland, where I fear this nasty little Bill will create problems and probably litigation. The progress made by the inclusion of Amendment No. 21A is, however, a major step forward. Perhaps, on reflection, the British Waterways Board will realise that it would be well advised to revert to the first draft of the Bill which it produced in November 1990 in which Scotland was not included.
In going through the Bill noble Lords may have noticed how many times the various legal bodies —lands tribunals, magistrates, sheriffs, sheriffs principal, High Courts, county courts and so on—are mentioned. So far as I can see the Bill may well involve a great deal of litigation. That is one of the reasons why I should be very happy to see Scotland removed from the Bill. Even if it applies to England we would be well advised not to have the measure in Scotland.
Mr. Coyne, the British Waterways Board manager for Scotland, at a very well attended meeting at Spean Bridge this winter, said that the Bill would have very little effect in Scotland. Now, with over half the Scottish waterways removed, why not remove the rest? That would mean that a number of further drafting amendments would be required, even after what we do tonight, to remove Scotland from the Bill—and probably avoid much ambiguity and litigation as well. That, with any luck, should be achieved with little or no loss to the British Waterways Board.
The British Waterways Board has based its case for retaining Scotland in the Bill on the argument that Scotland would be deprived of the safety provisions in the Bill. However, I wonder whether the British Waterways Board is the responsible body for operating the safety provisions. There is already a Health and Safety Executive for that purpose. Over the 170 years of the operation of the canal I cannot find any instance which would have been prevented by the provisions of the Bill. Indeed, if the British Waterways Board is to be given licensing powers for boats and jetties and an accident occurs in relation to something which has been licensed by the board, would the board accept liability for that accident?
I would go further and say that the British Waterways Board is not a satisfactory body to operate safety precautions. I shall give one instance. There is a public right of access over Loch Laggan. There used

923
to be safety netting alongside the walkway. When the locks were repainted in 1985 the netting was removed and has never been replaced. A man who was walking over the locks one stormy night slipped, went under the railing and was very nearly drowned. To my mind it was totally irresponsible not to replace the netting (if they had to remove it at all) after they had repainted the locks. I shall give the noble Lord another instance. British Waterways Board's lock lifting barge was sunk not once but twice in recent years through the inefficiency of that board. I understand that the last salvage operation cost over £17,000. There are other instances, one of which is leaking canal banks.
Also there are now a number of power boats riding around, sometimes with skiers behind them. I have seen them riding the bow wave of pleasure boats on the canal. It appears that no action has been taken to stop that practice. That is a far more dangerous practice than those for which safety precautions feature in the Bill.
The 1804 Act which set up the canal gave rights to the landowners to erect wharves and use pleasure boats. Why should the current British Waterways Board seek to remove those rights when it only has rights of navigation? Written into the terms setting up the canal, British Waterways Board has the right to remove anything which blocks the navigation. I cannot see why an attempt is being made now to introduce further action.
Perhaps I may now move on and deal with another issue. British Waterways Board has no fishing rights whatsoever in the Caledonian Canal as those rights were specifically reserved by the 1804 Act which established the canal. The Act stated that the rights of landowners to the fishery were preserved. At a meeting on 9th January it was pointed out to Mr. Duffy, the solicitor and secretary to the British Waterways Board, and to Mr. Coyne, the regional manager for Scotland, that the fishing in the Caledonian canal was nothing to do with them and that the salmon fisheries were managed by fishery boards. That apparently was news to the canal managers, who had never heard of fishery boards. The Ness District Fishery Board took up the matter with Group Captain Proudlock, who is the secretary of the Association of Scottish District Salmon Fishery Boards. In reply to the Secretary, in a letter of 30th January, Mr. Coyne stated:
"The Bill is designed to limit unexercised rights of salmon fishing ‖ This is an issue in parts of England".
It is not a problem in Scotland. The only problem that is likely to arise is if the Bill is passed and gives rights to the British Waterways Board to meddle in fishing matters which currently are nothing to do with it. The British Waterways Board not only has no fishing rights in the canal but is specifically instructed not to interfere with migratory fish. It only received power to construct a navigation and to maintain the tributaries of the waterway. That is an instruction with which I am afraid it has singularly failed to comply. Those tributaries have not been touched, though the pitching has collapsed, for some time.
The British Waterways Board is specifically instructed not to interfere with migratory fish, yet it
924
constantly drops the level in the River Oich and the River Ness by diverting water down the canal. Again that is in contravention of the regulations. One really does not want to have more regulations in Scotland. It is clear that the Bill was designed for England. Other problems may occur and some clauses in the Bill may remove adjacent proprietors' rights and interfere with the work of the fishery boards.
The Royal Yachting Association has expressed a wish to see the Crinan as well as the Caledonian Canal removed from the Bill. I believe that everybody else in Scotland would be happy with that. The British Waterways Board would certainly improve its tarnished image were it to make the magnanimous gesture of removing from its scope the whole of Scotland. That will have to wait for the passage of the Bill in another place. I do not feel that this is the moment to divide your Lordships' House on this issue. I put down those points largely as markers for further discussion. I should like to thank my noble friend for accepting the amendments, which he did after considerable pressure. I beg to move.
8.30 p.m.
Lord Brightman: My Lords, I do not think that it is for me, as the former chairman of the Select Committee, to take any side at all on the debate at this particular point. However, I should like to express a little mild regret that the objection to the inclusion of Scotland was not raised in the form of a petition against the Bill. That would have been the proper course. The committee would then have heard evidence on the subject and reported its conclusions to your Lordships.
The disadvantage of the question being raised now is that your Lordships are being asked to decide an extremely important matter without having any evidence whatever on it. The whole point of the Select Committee procedure in the case of a Private Bill is that evidence is taken by the committee and is available to noble Lords. By taking the point now and not by way of a petition, the mover of the amendment deprives your Lordships of evidence which they ought to have had.
I have heard it said that the Bill was not adequately publicised in Scotland. In fact there were notices in the Glasgow Herald of November 1990, the Scotsman of December 1990 and the Edinburgh Gazette of November 1990. Copies of the Bill were deposited in the Scottish Office in London in December 1990.
The Earl of Balfour: My Lords, I should like to raise one or two points. I feel that it is the duty of this House to pass the Bill. Before we go any further, I should like to ask my noble friend Lord Burton when he replies to the amendment not to to press it because Amendment No. 3A in the name of my noble friend Lord Jellicoe, who I understand is one of the promoters of the Bill, is probably the more important of the two amendments.
In this group of amendments I should particularly like to speak to Amendment No. 12 which refers to Clause 11 and Amendment No. 21 which refers to Clause 37. I must point out that I think that the British

925
Waterways Acts of 1971 (Chapter XVIII) and 1983 (Chapter II)do not extend to Scotland. Therefore, Clause 11 which deals with houseboat certificates with its Schedule 1, Clause 12 (certificates and licences) with Schedule 2, Clause 13 (amendment to Section 13 of the 1971 Act), subsection (2) of Clause 20 (penalties and enforcements), Clause 31 (amendment to Section 12 of the 1983 Act) and Clause 32 notices could apply to Scotland. But as a matter of fact I do not think that they could he enforced in Scotland.
I only learned about this Bill very recently but I feel that the promoters need carefully to bear in mind that point. When the Bill goes to another place a number of amendments will need to be introduced to make the Bill rather more satisfactory.
Lord Elton: My Lords, perhaps my noble friend will forgive me for interrupting him—I wish no impertinence—but if I correctly understand my noble friend Lord Burton, he will not press the amendments and the alternatives proposed by my noble friend Lord Jellicoe are likely to get into the Bill. In that case, the points that my noble friend now makes are somewhat academic and could perhaps be left to a more appropriate stage of the Bill.
The Earl of Balfour: My Lords, I have only a few more remarks anyway. I want to be as brief as possible. The only other point raised by my noble friend Lord Burton which I think is worth mentioning and which has been of concern to me for a number of years is the remainder of the old Forth and Clyde Canal which goes through a district in Glasgow called Bowling. It is always a tragedy to me that every year two or three children, and a number of animals, drown in that canal. The locks are falling to pieces; the sides are collapsing. It is a disgrace. I realise that it would cost a vast fortune to improve them. However, that is one of the tragedies that exists. It is worth taking a few moments to mention the position in your Lordships' House.
Earl Jellicoe: My Lords, I speak to the amendments moved by my noble friend Lord Burton and those standing in my name on the Marshalled list. I speak also to two important amendments, Amendments Nos. 20A and 21A which stand jointly in the name of my noble friend Lord Gray and myself. Perhaps I may crave the indulgence of the House. I may speak a little longer on this amendment than on any other amendment, because there are important matters that I wish to put before your Lordships.
The first is a general point. Although the highlands and lowland waterways are remote from the main canal network in Britain, they are nonetheless a vital part of British Waterways' whole canal system. The lovely Caledonian and Crinan canals—the two highland waterways—are particularly important. None of us seeks to argue with that. They represent vital short cuts for vessels that otherwise would have to make long detours; around the northern parts of Scotland in the case of the Caledonian canal and around the Mull of Kintyre in the case of the Crinan canal.
926
The board attaches great importance to those waterways. It also attaches great importance to the criticisms that have been voiced by two of my noble friends. However, it regards those waterways, as in the case of the two lowland canals, as an integral part of the nation's waterway system. That also applies to the lowland canals. The further powers which British Waterways seeks in the Bill are thus entirely relevant to Scotland and are just as important north of the Border as they will be in England and Wales. The need for the maintenance of the canals in water is the same throughout the country. Emergencies can equally arise on the man-made section of the highland canals as they can on the lowland canals and on waterways elsewhere in the United Kingdom. The powers of entry that the board seeks by the Bill are thus vital in the interests of securing the safety of those on and alongside the canals in Scotland. I believe —1 have a small house in Scotland—that Scottish safety is just as important as English or Welsh safety.
My noble friend Lord Burton referred to the special characteristics of the four natural lochs on the Caledonian Canal: Loch Lochy, Loch Oich, Loch Ness, and Loch Dochfour, which I understand lies below my noble friend's house. Thanks to his generosity and hospitality—I appreciate what he said about myself—discussions took place there recently between representatives of the board and of the Highland Regional Council under the auspices of the Caledonian Canal Action Group comprising those with local interests, including my noble friend Lord Burton.
Echoing a little what the noble and learned Lord, Lord Brightman, said, I believe that it is an awful pity that those concerns and anxieties which have been expressed by my noble friends and others about the inclusion of Scotland and the Scottish canals in the Bill were not presented in time so that they could have been carefully considered by a very experienced Select Committee under the experienced noble and learned Lord, Lord Brightman. However, that is all in the past.
Recently a great deal of discussion and consultation has taken place between the interested parties. My noble friends Lord Burton, Lord Gray, Lord Elton and Lord Kinnoull have played a significant part in that, as have the Highland Regional Council and the British Waterways Board. The British Waterways Board remains firmly of the view, as I do, that the canalised sections of the Caledonian Canal and other Scottish canals should remain within the provisions of the Bill for the reasons on which I have already touched; namely, that it would be wrong if the safety considerations which underlie the Bill were not to apply to the Scottish canals as they do to the Welsh and English canals.
However, the Caledonian canal is very special indeed, sui generis, in that a large part of it—as my noble friend Lord Burton said, the largest part—flows through four large areas of open water; namely, the four lochs. That special characteristic of the Caledonian canal is duly recognised, I hope, in Amendments Nos. 20A and 21A to Clause 37 which stand in the joint names of my noble friend Lord Gray

927
of Contin and myself. Those amendments accordingly disapply the provisions of the Bill from the four lochs to which I have referred. The amendments flow from the board's recognition, following the intense consultations of which I have spoken and which included the Scottish Office, that those natural areas of water and the uses to which they have customarily been put place them in a special category.
So much for the two major amendments which take out the four lochs from the provisions. Trespassing again, I fear, on your Lordships' indulgence perhaps I may mention the five technical amendments we are discussing. They are Amendments Nos. 3A, 5, 5B, 5E and 5H. In addition to correcting an error in a reference to sections of the Land Compensation (Scotland) Act 1963, they draw on Scottish law for appropriate definitions for the purposes of the application of Part II of the Bill for Scotland.
A typical example of the technical amendment which was found necessary is that a definition of "road" for the purposes of Scottish law is needed because the English word "highway" is unknown in Scottish legislation. It is curious that in England a road is a highway. I believe that the Scots are quite right to call a spade a spade and a road a road. That is what we propose to do in the Bill by these amendments, among others.
I listened carefully to what my noble friend Lord Balfour said on the legal point. He had given me some notice of it beforehand. Not being a lawyer I speak very much to correction. I agree that the British Waterways Act 1971 as originally passed did not apply to Scotland. However, subsequently Part III dealing with houseboats, and much of Part IV which contains special provision applicable to pleasureboats and houseboats, was applied to Scotland by Section 9(4) of the British Waterways Act 1975. That is the position as I understand it but I stand to be corrected by the experts. It would have been nice if the Select Committee of the noble and learned Lord, Lord Brightman, could have looked into such matters. However, that is by the way.
I turn to salmon fishing. The provision does not apply to the four lochs because they are excluded. When the Bill goes to another place the question of salmon rights could well receive further attention. That at least is my feeling.
I am glad that after intensive consultation those concerned reached agreement on the exclusion of the four big lochs from the Bill. I believe that the canalised portions of the Scottish canal system should remain firmly within the provisions of the Bill, as my amendments would allow. I hope that my noble friend will not press his amendments and that your Lordships will agree to my amendments, which represent fairly considerable concessions.
Lord Burton: My Lords, I congratulate the noble and learned Lord, Lord Brightman, on the hard work that he undertook in the committee. I express gratitude to him as far as it went. A number of points have now been raised which should have been dealt
928
with by his committee. I am afraid that the matters did not come to the surface as regards Scotland until November last year.
The Edinburgh Gazette is rather dry reading and I am afraid that it may have been missed. I cannot speak for the Scottish Office but I know that the Highland region received from the British Waterways Board only a draft of Part II of the Bill. Its representatives told me that they replied to the British Waterways Board but received no response. Again, that is a matter in the past.
The amendment will not be pressed because it is consequential to Amendment No. 21. My noble friend Lord Balfour was correct in some of the points that he raised about the Bill not applying to Scotland. As usual, he has looked into the Bill's details most carefully. Clearly that matter will have to be looked at in the future, although not tonight. In moving the amendment I mentioned that further drafting amendments are necessary before the Bill is satisfactory in Scotland. It may well be that those matters can be added. Indeed, the Scottish Office has some amendments that it wishes to table. I know that they have been lodged with the British Waterways Board and it is a pity that they have not been put forward this evening. My noble friend Lord Balfour was also correct about the safety of the Forth and Clyde canal. Indeed, his arguments added strength to mine; that perhaps the British Waterways Board is not the best body to look after safety on those canals.
I wish to thank my noble friend Lord Jellicoe. I was pleased that he said that the Scots are right to call a spade a spade. I am not sure of all the legal technicalities but I believe that these points needed tidying up. I understand that if it had not been for the lawyer for the the Highlands region drawing attention to some of the points, the Bill would not have applied to Scotland because the wrong phraseology is used. I am pleased to hear that he believes that the fishing rights should receive further attention in the other place. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Jellicoe Earl Jellicoe moved Amendment No. 3A:
Page 2, line 41, leave out ("3(2) to (9) and 5") and insert ("9 (2) to (5) and 11").
On Question, amendment agreed to.
[Amendment No. 4 not moved.]
Earl Jellicoe Earl Jellicoe moved Amendment No. 5:
Page 3, leave out lines 9 to 13 and insert
(""owner" means—

(a) in relation to any land in England or Wales, a person (other than a mortgagee not in possession) who, whether in his own right or as trustee for any other person, is entitled to receive the rack-rent of the land or, where the land is not let at a rack-rent, would be entitled if it were so let; and

(b) in relation to any land in Scotland, the person (other than a hereditable creditor not in possession) for the time being entitled to receive, or who would, if the same were let, be entitled to receive, the rents of the land, and includes a trustee, factor, tutor or curator; and").

On Question, amendment agreed to.
Clause 4 [Entry on to land in cases of emergency]:
Lord Cornwallis Lord Cornwallis moved Amendment No. 5A:
Page 3, line 40, leave out ("the operations cannot conveniently") and insert ("it would not be reasonably practicable for the operations to").
On Question, amendment agreed to.
Earl Jellicoe Earl Jellicoe moved Amendment No. 5B:
Page 3, line 41, after ("highway") insert ("or, in Scotland, a road").
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 5C:
Page 3, line 48, leave out ("completion of those operations") and insert ("entry on that land").
The noble Lord said: My Lords, in moving the amendment, I shall speak also to Amendments Nos. 5D, 5J and 5K. Amendment No. 5C brings forward the time lapse after which the board must notify the owner and occupier that it has entered the owner's or occupier's land for the purpose of carrying out emergency operations. There could be occasions when emergency operations are of considerable duration. Therefore, it seems right that there should be a relatively short time limit within which the owner and occupier must be notified.
Amendment No. 5D provides that notice must be given to the occupier of his right to claim payment for any inconvenience caused by the entry on to the land. That right is separate from any claim that the occupier may have in respect of any damage caused or other reasons there may be for compensation. If Amendment No. 5D is agreed to Amendment No. 5K is consequential and brings the Bill into line.
Amendment No. 5J provides for a form of counter notice, to be included with the notice sent to the owner and occupier, of the intention to enter the land for the purpose of carrying out maintenance work other than in an emergency. The inclusion of a form of counter notice with the original documentation will simplify and expedite the whole process to the benefit of both parties. It provides for a standard form of the counter notice which can be given under subsection 4(a) of Clause 5 of the Bill should crop readiness, soil conditions and so forth make access objectionable at the time of notice of entry. I beg to move.
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 5D:
Page 4, line 3, after ("of) insert ("the occupier to claim payment for such entry and the right of").
The noble Lord said: My Lords, I beg to move.
Lord Thomas of Gwydir: My Lords, in order that there is no doubt, should not the amendment make clear the fact that the words should be inserted after the second "of"? The word "of" is used twice.
Earl Jellicoe: My Lords, in principle the amendments to which the noble Lord has referred are perfectly acceptable. However, I am inclined to agree with my noble friend Lord Thomas about the word "of".
Lord Cornwallis: My Lords, I have no objection to the change of wording, if that is agreeable to your Lordships.
On Question, amendment agreed to.
9 p.m.
Earl Jellicoe Earl Jellicoe moved Amendment No. 5E:
Page 4, line 4, at end insert
("(3) In this and the following section "road" means any public or private road within the meaning of the Roads (Scotland) Act 1984.").
On Question, amendment agreed to.
Clause 5 [Notice of entry, etc.]:
The Deputy Speaker: My Lords, as I have indicated, if Amendment No. 5F is agreed to, I cannot call Amendment No. 5G.
Lord Cornwallis Lord Cornwallis moved Amendment No. 5F:
Page 4, line 8, leave out ("the relevant operations cannot conveniently") and insert ("it would not he reasonably practicable for the operations to").
On Question, amendment agreed to.
Earl Jellicoe Earl Jellicoe moved Amendment No. 5H:
Page 4, line 9, after ("highway") insert ("or, in Scotland, a road").
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 5J:
Page 4, line 30, after("notice") insert ("including a form of counter-notice for use by the recipient pursuant to the following provisions of this section)").
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 5K:
Page 4, line 31, after ("claim") insert("payment for such entry together with").
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 5L:
Page 4, line 32, leave out ("the relevant operations cannot conveniently") and insert ("it would not he reasonably practicable for the operations to").
On Question, amendment agreed to.
The Deputy Speaker: My Lords, if either Amendment No. 5M or Amendment No. 5N is agreed to, I cannot call Amendment No. 5P.
Lord Cornwallis Lord Cornwallis moved Amendment No. 5M:
Page 5, line 1, leave out ("the relevant operations mentioned in the notice could conveniently") and insert ("it would be reasonably practicable for the operations mentioned in the notice to").
The noble Lord said: My Lords, Amendment No. 5M is similar to Amendments Nos. A1 and A2 and Amendments Nos. 5A, 5F and 5L except that it refers specifically to matters relating to notice. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 5N to 11 not moved.]
Clause 8 [Further provisions as to entry]:
Lord Cornwallis Lord Cornwallis moved Amendment No. 11A:
Page 6, line 36, at end insert
("(5) The Board when they have entered any land pursuant to this Part shall commence the relevant operations for the purposes of which entry was made as soon as is reasonably practicable and shall complete them with all reasonable dispatch.
(6) Nothing in this Part shall authorise the Board to enter any land for the purposes of in connection with the development of any land, being land not forming part of any

931
inland waterway or of any works such as are mentioned in paragraph (b) of the definition of relevant operations in section 3 of this Act.").
The noble Lord said: My Lords, Amendment No. 11A is to ensure that once the board has gained entry onto the land it carries out its works with efficiency and speed. It further provides that those powers of entry are clearly for maintenance purposes only and cannot be used in respect of development projects, leisure activities or other works not connected with the maintenance of the waterways.
Amendment No. 11B, which is grouped with this amendment, spells out the method of assessment to be used in agreeing payments for entry onto the land and any compensation which may also become payable. It provides also that a dispute about payment or compensation shall not prevent the board from carrying out its work while the negotiations in regard to any payments are unresolved. I beg to move.
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 11B:
After clause 8, insert the following new clause:
("Payment for entry
(1) The Board shall pay to the occupier of any land upon which entry is made in accordance with this Part a sum in respect of such entry which shall be assessed in accordance with subsections (2) and (3) below.
(2) The sum payable under subsection (1) above shall be such sum as would have been paid if the occupier had entered into an agreement with the Board granting to them rights to enter the land for such period and for such purposes as entry has been made in accordance with this Part and (where entry is made pursuant to a notice of entry)
on such conditions as are specified in any counter-notice and accepted by the Board or imposed by a court on any appeal against a counter-notice.
(3) Part II of the Land Compensation Act 1961, so far as material, shall apply to the assessment of the sum payable under subsection (1) above as though the rights deemed by subsection (2) above to be granted to the Board had been acquired by them compulsorily and in assessing that sum regard shall be had to the degree of inconvenience caused to the occupier by the entry.
(4) Nothing in this section shall require the Board to defer or suspend entry on land or the carrying out of relevant operations while any dispute as to the sum payable under subsection (I) above is determined.
(5) The rights of any person to a payment under subsection (1) above shall be without prejudice to the rights of that or any other person to recover compensation under section 9 (Compensation) of this Act.").
On Question, amendment agreed to.
Lord McNair Lord McNair moved Amendment No. 11C:
After Clause 8, insert the following new clause:
("Waterborne maintenance.
For the purposes of discharging their duty under section 105 of the Act of 1968 (maintenance of the Board's waterways), the Board shall make such provision for the maintenance of water borne equipment and other facilities as is necessary to carry out all waterway maintenance works from the waterways themselves except where it is not safe or reasonable practicable to do so.").
The noble Lord said: My Lords, I know that a lot of hard bargaining has taken place and that the noble Earl, Lord Jellicoe, the noble Lord, Lord Elton, and the noble Earl, Lord Kinnoull, have all worked extremely hard in the role of honest brokers to achieve
932
agreement on several issues. I apologise to the noble Earl, Lord Jellicoe, for alarming him at the lack of warning which I gave him about my amendments. That arises from my lack of experience of your Lordships' House and the continuing discussions which I was having with the board's solicitor.
On the question of waterborne maintenance, everyone whom I know and everyone to whom I have spoken who knows the canals well because their working lives are spent on and by the canals is of the same opinion; namely, that for a variety of reasons, none of them romantic or sentimental, it is vital that British Waterways does not abandon waterborne maintenance.
To tell the truth, little enough routine maintenance of any description is carried out on many sections of the canal system. Due to a combination of inadequate dredging and failure to set about repairing defects in locks in a logical way there is frequently unnecessary water loss. Therefore, boats tend to run aground and find it difficult to moor with both ends close to the side of the canal. That is contrary to what canals are all about. There should be enough water in a canal to enable a boat to pass along it.
We see that inadequate water maintenance and management in many regions. I do not have time to enumerate or describe in detail the many accounts of canal users who have spoken to me. However, they know what they are talking about and there are many complaints on this aspect. It is clear from my own observations that many parts of the canal are simply not accessible from land because the topography makes it impossible. What will happen? Will British Waterways not dredge those sections? If a canal presents such difficulties, will the entire stretch of canal not have to be travelled by dredging boats in any event? The fact that boats travel slowly on canals does not mean that a great deal of time is wasted in maintaining them from the water.
It is common knowledge among those who work the canal boats that there is a value in dredging boats passing along the canal because quite often, when the canal boat users ring up British Waterways and say that the canal needs dredging because there is not enough water, British Waterways simply chooses not to believe them. Therefore, the action of the dredging boat going along the canal has a diagnostic value because it actually profiles the canal to some extent. Obviously, if the canal badly needs dredging the boat will come to grief.
It has always been the custom with canals to plan ahead with the maintenance programme for the next year or the year after. In this way routine maintenance tasks can be planned well ahead. Canals do not silt up very fast so one can tell what the next series of tasks will be. These tasks are mainly dredging and bank protection and such defects can usually be easily spotted. One can manage it so that the boats do a series of tasks along a defined stretch of waterway in one season so that they are not dodging between different waterways. That system is quite efficient.
Of course there will be emergencies and other occasions when maintenance from land is necessary. That is provided for elsewhere in the Bill. But in most

933
cases it is cheaper, easier and simpler to maintain the canals from the water. British Waterways seems to forget that it is running a transport system. The waterway itself is a track which is the one that should be used unless it is impossible to do so. When the distinguished canal author and former member of the British Waterways Board, Mr. Charles Hadfield, was asked what he thought of the idea of land-based maintenance, he was appalled. He asked: "How do you maintain a bridge in the middle of a field with no road to it or a canal in a town centre with buildings crowding alongside or the inside of a tunnel and no room to deploy plant?" He said that the cheapest and most efficient way has always been to maintain the canal from the water. The use of the waterway for maintenance is also an encouragement to British Waterways to keep the canals open. The whole system depends on moving boats. I beg to move.
Lord Elton: My Lords, I do not suppose that the noble Lord intends to press this amendment. I hope that something of the kind is regarded with a friendly eye in another place. There may be those who do not have great confidence in some canal users and those who may not have absolute confidence in the management of the canals by the board. Nothing could inspire more confidence than the sight of the board itself being a principal user of the canals.
Lord McIntosh of Haringey: My Lords, I preface any remarks with the usual disclaimer that anything I say from this Dispatch Box represents a personal view as it is not our practice to express a party view on a Private Bill. Nevertheless, I want to express my strong support for this amendment. When the matter was considered at Second Reading last year I indicated my four major areas of concern: first, residential boats; secondly, environmental obligations; thirdly, access; and, fourthly, disposals, with its implications both for the integrity of the waterways and for the continued public obligations of the British Waterways Board.
I believe that this amendment raises in a very acute form the issue of the integrity of the waterways, that of the network and in particular the integrity of the residual waterways which were the subject of an instruction to the Committee by my noble friend Lady White. It is a matter of record—certainly it has been represented as such in representations to the Committee—that there is a different standard for the minimum dredged depth of a canal according to whether the dredging is by land or by water. I understand that the minimum dredged depth for a water dredged canal is 1,220 millimetres, but for land-based dredging it is only 1,050 millimetres. That is a very considerable difference. It affects the continued viability of the residuary part of the waterway network and therefore affects the whole of the integrity of the network. The amendment of the noble Lord, Lord McNair, seeks to put extra but reasonable obligations on the British Waterways Board to pursue water-based dredging and therefore a greater depth wherever possible. I hope very much that the promoters of the Bill will find it possible to accept this amendment.
Lord Burton: My Lords, I also support this amendment. It strengthens the amendment put forward by the noble Lord, Lord Cornwallis. I hope that it will not be necessary for the noble Lord, Lord McNair, to press the matter as I hope that my noble friend Lord Jellicoe will accept the amendment because I believe it is a very good one. The British Waterways Board scrapped its lock-lifting barge fairly recently. The board used to use it on the Caledonian canal and had been doing so for 170 years. The board now tries to carry out repairs to any lock gate, which can weigh up to 25 tonnes, by land-based cranes. Not surprisingly, a crane of that size is liable to do considerable damage in approaching the locks. It really ought to be done from the water, as has been done over the past 170 years. There is no reason why that should not continue and there is no reason why the British Waterways Board should damage neighbouring property when it is quite unnecessary.
Lord Howie of Troon: My Lords, when we discussed this Bill at Second Reading, which I recall with some surprise is almost a year ago, I asked the same questions which the noble Lord, Lord McNair, has now raised. I wondered why it was necessary for the Bill to require great powers to carry out the maintenance from the land side when in fact the traditional and sensible way of dealing with canal maintenance is from the water. I asked whether it was possible that, here and there, the British Waterways Board required to carry out the maintenance repairs from the land side because its maintenance over the years had been inadequate and the waterways were insufficient for carrying out maintenance work of the ordinary kind from the water. Nobody ever answered that question but I dare say it was considered. No doubt it was a slightly unfair question.
I strongly support the noble Lord, Lord McNair, although I hope he will not press the matter tonight. However, when this Bill goes to the other place they should make it part of their consideration that maintenance should be carried out from the water whenever possible and should only be carried out from the land when it is unduly difficult for it to be carried out in the old-fashioned and well-tried way, from the water. I support the amendment.
Lord Brightman: My Lords, I feel it necessary to offer your Lordships a word of caution about this amendment, because I feel some doubt as to whether it is really appropriate. The expressed purpose of the amendment as it is worded is not to compel the board to carry out maintenance work from the water instead of from the bank. That subject is already covered by Clauses 4 and 5 of the Bill as amended. Under those clauses the board cannot go on to other people's land to carry out maintenance of a waterway unless it would not be reasonably practicable to carry out the work from the water. The board is bound, if practicable, to work from the water or from the towpath if it owns the towpath.
Amendment No. 11C, as it is worded, seeks to require the board to maintain its waterborne maintenance equipment and facilities in good repair. The amendment provides that:

935
"the Board shall make such provision for the maintenance of … equipment and … facilities as is necessary",
and so on.
The clause is directed solely to the maintenance of equipment and of facilities. It seems to me a little out of place to require the board to keep its equipment and other facilities in repair. In any event, the amendment does not spell out what equipment or facilities the board is bound to possess.
I can see endless possibilities of dispute with the amendment as it is worded. What is the equipment which ought to be owned by a canal undertaker? The real answer is that the board has a statutory duty to maintain commercial and cruising waterways. It must inevitably perform that duty from the waterway itself, or its own land, unless it has the right to go on to other people's land under Clauses 5 or 6. How it performs that duty and what equipment is needed should, in my respectful opinion, be left to the board to decide.
Lord Harvington: My Lords, having listened to the speeches which have been made on this amendment your Lordships would be wise to adopt the suggestion of the noble and learned Lord, Lord Brightman, and drop this amendment for tonight. The promoters of the Bill will have heard enough from the discussions which have taken place tonight regarding the wishes of your Lordships. As there are some difficulties to which the noble and learned Lord, Lord Brightman, has very correctly and helpfully drawn our attention, it would be wiser to leave the matter for the moment and to let further discussions continue. It can then be dealt with properly in another place.
Viscount Astor: My Lords, perhaps I may intervene and repeat the usual statement of the Government's general neutrality towards Private Bills. It must be for the House to determine whether the promoters of the Bill are justified in resisting the amendment.
That said, the Government's general view of such matters is that the board must be free to decide how it is to carry out its statutory responsibility to maintain navigation on its waterways. There may well be cases where waterborne maintenance is the most efficient and effective way of fulfilling that duty. But there may well also be others where maintenance from operations on land is more practicable and suitable arrangements can be made with local land owners. We feel that the board ought to be free to decide how to carry out its statutory responsibility.
Earl Jellicoe: My Lords, I wish only to echo the cautionary words of the last three speakers. At the same time I should like to thank the noble Lord, Lord McNair, for his introductory remarks which I greatly appreciated.
This has been a useful amendment. I only wish that this question had been raised earlier and could have had the detailed scrutiny which the Select Committee of the noble and learned Lord, Lord Brightman, could have given it. It has been good that this question has been aired and ventilated. I add my voice to those who have urged that the noble Lord should withdraw his
936
amendment. This is certainly something which could be looked at and should be looked at in more detail in another place.
Lord McNair: My Lords, I am most grateful to all noble Lords who have spoken in support of this amendment. I am also grateful to all those who have added words of caution. I am particularly grateful to the noble and learned Lord, Lord Brightman, for his careful analysis of where we may have gone wrong in wording the amendment.
I should like the noble and learned Lord to come back on one question. He seemed to assume that the requirement on the board was that it should do the maintenance itself. As I understand the wording, "make such provision" means that they could ensure that a contractor or whatever could carry out this work. Does he agree with me that this possibility exists within the wording of the amendment as it stands?
Lord Brightman: My Lords, before the noble Lord sits down, perhaps I may say that I had read "themselves" as applicable to waterways and not to the board. The point did occur to me that it was ambiguous as to which it was intended to relate to. I thought it related to waterways but perhaps I was wrong. That again is a matter of wording which could be cleared up at a later time.
Lord McNair: My Lords, I am most grateful for that further elucidation. The point of the amendment is to reinforce what we have achieved in Clauses 4 and 5 with the requirement that the board should use waterborne maintenance wherever reasonably practicable. This is not something that will disappear. It is something about which a lot of the users feel strongly from the point of view that the more waterborne maintenance that is done, the better the maintenance will be done and the more usable the waterways will remain. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Compensation]:
Lord Cornwallis Lord Cornwallis moved Amendment No. 11D:
Page 6, line 46, leave out subsection (2).
The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment No. 11E. They bring the matter of settling disputes into line after the inclusion of the payment in the provision for payment for entry and clarify the method by which this shall be carried out. I beg to move.
Lord Burton: My Lords, I should like to ask a question on this amendment. I am afraid that I have not had an opportunity of taking legal advice. What is the tribunal to which the noble Lord refers in his amendment? I wonder whether this again is a piece of English phraseology as opposed to Scottish phraseology.
Lord Cornwallis: My Lords, it is the Lands Tribunal.
Lord Burton: My Lords, in Scotland it is the Lands Tribunal for Scotland, so there is a slight variation. It would mean another amendment.

937
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 11E:
After Clause 9, insert the following new clause:
("Disputes as to payments etc.)
Any dispute as to a person's entitlement to—

(a) a payment under section (Payment for entry) of this Act; or

(b) compensation in pursuance of section 9 (Compensation of this Act or as to the amount of the payment or compensation

shall be determined by the tribunal, and the specified provisions (which relate to the conduct of certain proceedings before the tribunal and costs) shall with necessary modifications apply in relation to the determination by the tribunal of such a dispute.").
On Question, amendment agreed to.
Clause 11 [General terms of houseboat certificates]:
[Amendment No. 12 not moved.]
Clause 16 [Prohibition or control of mooring]:
Earl Jellicoe Earl Jellicoe moved Amendment No. 12A:
Page 11, line 35, at end insert
("(3) The Board shall not exercise the powers of this section to prohibit or regulate mooring other than so far as may be reasonably necessary for the purposes of—

(a) securing safety; or

(b) preventing congestion; or

(c) ensuring that vessels do not remain at short stay moorings after the expiry of the period for which they are permitted to be there.").

The noble Earl said: My Lords, the amendment is proposed in order to satisfy concerns that the powers to be conferred by the Clause could in theory be used to put down what I might call the equivalent of the double yellow lines on roads along the Grand Union Canal between London and Birmingham, for example, or elsewhere. That is not the intention of the clause and that would be made clear by the amendment to Clause 16. It is designed to enable the board to regulate mooring at places where it causes navigational hazards or creates problems of congestion where moorings should be rationed on a time-limited basis.
Hogging moorings and depriving others of the pleasure of short stops at popular visitor sites is resented, and justly so, by the majority of boaters. In contrast, casual mooring in and out of the way of beauty spots will be completely unaffected by the amendment. I beg to move.
Lord McIntosh of Haringey: My Lords, again speaking personally I think that the noble Earl is moving a considerable way towards meeting the objections which have been raised to the Bill by residential boat owners. Indeed, as he indicated in his speech on Second Reading, the board is conscious of those concerns. I am not qualified to judge whether the amendments which have now been tabled meet all of them. But I suggest to your Lordships that in order to expedite business we might agree among ourselves that these matters, which are essentially local matters, could well he dealt with by another place where constituency representatives have a particular interest which they are fully able and entitled to express.
On Question, amendment agreed to.
Clause 18 [Provisions as to private moorings]:
Earl Jellicoe Earl Jellicoe moved Amendment No. 12B:
Page 12, line 14, after ("mooring)") insert ("and conditions attached to a consent granted under section 19 (Control of moorings, etc.)").
The noble Earl said: My Lords, the pedigree of these three amendments—namely, Amendments Nos. 12B, 12C and 12D—is as follows. They were proposed to the board by representatives of several of the board's user groups, bodies such as the Royal Yachting Association, the Inland Waterways Association, the British Marine Industries Federation and the Association of Pleasure Craft Operators on Inland Waterways.
The amendments are designed to extend the protection given in the clause to the owners of private moorings who may otherwise be affected by their regulation—again in the interests of navigational safety. I understand that with the amendments incorporated in it—that is, if they are adopted—the clause would be agreeable, at least in principle, to those user groups to which I referred. I beg to move.
Lord Greenway: My Lords, I have not intervened thus far during the Bill's passage through your Lordships' House due to being unavoidably absent on previous occasions. However, I should like to express my gratitude to the noble Earl for bringing forward the amendments which to a great extent meet some of the concerns of the boating interests that he mentioned. I believe that there may be one or two points which are not quite understood. But I am sure that further discussion can take care of them and that they can perhaps be cleared up in another place.
On Question, amendment agreed to.
Earl Jellicoe Earl Jellicoe moved Amendment No. 12C:
Page 12, line 15, leave out from ("but") to the end of line 18 and insert ("in exercising the said powers the Board shall have due regard to the desirability of refraining from interference with private rights and established mooring practices and shall not prevent the mooring of any vessel which could lawfully have been moored but for the exercise of such powers.").
On Question, amendment agreed to.
9.30 p.m.
Earl Jellicoe Earl Jellicoe moved Amendment No. 12D:
Page 12, line 20, at end insert
("(3) In this section "private rights of mooring" include any rights conferred by the Board or enjoyed as an incident of an interest in land.").
On Question, amendment agreed to.
Clause 21 [General environmental and recreational duties]:
Lord McNair Lord McNair moved Amendment No. 12E:
Page 13, line 37, after ("functions") insert
("and, in particular, their primary function of maintaining waterways for navigational use by the public").
The noble Lord said: My Lords, apart from the question of Scotland, this topic has taken the most bargaining and discussion. I table the amendment now simply to reinforce the concern that is felt about the question of equal primacy for navigation and conservation. In assessing the relative importance of

939
conservation and navigation, we must remember that the ecological balance of the canal and adjoining land arises from an artificial creation, dating back only about 200 years, and that ecological balance arises from the fact that the canal system was created for navigation. If we give conservation, to which I personally give a very high priority, equal primacy with navigation and if navigation loses out in some measure to conservation, the maintenance schedule of the canal will go by default. The canal will dry out and the artificial but important ecological balance of the canal system will be destroyed.
What I seek to do in this amendment is to ensure both the future of navigation and the future of the present ecology of the canal system. If navigation goes, the ecology will also. I beg to move.
Lord Brightman: My Lords, I feel that I have a duty to speak against this amendment because it is incorrect to describe the board's primary function as,
"maintaining waterways for navigational use by the public".
That is so in the case of a commercial waterway but not for a cruising waterway or for a remainder waterway. Under Section 104 of the Transport Act 1968, cruising waterways are,
"to be principally available for cruising, fishing and other recreational purposes".
Under Section 107, a remainder waterway is either to be retained, developed, eliminated or disposed of. So one cannot say that the primary function of the board is to maintain all "waterways for navigational use". Therefore, one cannot accurately refer to the navigational use of waterways as the primary function of the board. As I read the statutes, that is correct only in the case of commercial waterways. There will be exactly the same arguments to be made when we reach Amendment No. 17.
Lord McIntosh of Haringey: My Lords, speaking again in a personal capacity, I am glad that I waited to speak until the noble and learned Lord, Lord Brightman, had intervened. He is of course correct about the wording of the amendment. However, I remind the House that Clause 21, to which this is an amendment, is about the general and environmental duties of the British Waterways Board. The noble and learned Lord has again brought out the concern that I expressed on Second Reading, which has not been adequately answered either in Committee or in these debates, about the environmental inadequacies of the Transport Act 1968. As I said then, I am a great admirer of the 1968 Act, but although it was not behind its time then in environmental terms, it is behind the environmental concerns that are properly expressed in 1992.
What is sad is that inadequate effort has been made in your Lordships' House to bring the Transport Act 1968 up to date as regards waterways in environmental terms. The amendment is necessary to draw attention to that fact. I agree with the noble and learned Lord that it is not adequate for its purpose, but it is important that we should signal now to another place that the environmental duties, as
940
expressed in Clause 21, are not adequate and that they should be applied to the cruising and the remainder waterways as firmly as to the navigational waterways.
Lord Greenway: My Lords, I add my support to what I believe to be behind the thrust of the amendment, although, as my noble and learned friend has pointed out, it is fundamentally flawed. I believe, as the noble Lord, Lord McIntosh, said, that this is a matter best left to another place.
The Earl of Balfour: My Lords, I support what the noble Lord, Lord McIntosh, said. The flow of water from tributaries is also an important matter. I am thinking again of Scotland and the flow of streams into the waterways, fish ladders and such things. I am glad that the noble and learned Lord, Lord Brightman, spoke against the amendment. He was right to have done so. There is something in the words "maintaining waterways". Small streams which run into the main canals, things such as a fish ladder which may lead from them, small streams which permit fish to get up to the spawning grounds and waters which are alongside the edge of a waterway deserve to be protected carefully. That is a point that might be taken up when the Bill goes to another place.
Baroness White: My Lords, I fully understand the objection raised by the noble and learned Lord to the wording of the amendment when it includes the word "primary" because one can argue about whether the function is the primary one. I should have thought that it was, but one can see that the legal mind does not move that way. Nevertheless, there is something of importance in the general thrust of the amendment. I have seen the grouping of the amendments only since we started the discussion, and I do not understand why the amendments to Clause 21 are not grouped together so that we can discuss the whole issue.
I do not know whether the noble Lord, Lord Burton, has any intention of moving Amendment No. 15. I cannot imagine why he ever put it down, but no doubt all will be revealed in due course. The suggestion that the circumstances embodied in Clause 21 should be deleted is difficult to understand. I do not want to pursue the matter because we clearly cannot accept the amendment as it stands.
I had hoped to say something about Clause 21(2) (d) and to express my gratitude to our Select Committee for including a recommendation in response, partly at least, to the Instruction that I was able to introduce in the House for its deliberations; namely, that it should be part of the duty of the British Waterways Board to protect for future use as cruising waterways or as areas appropriate for other public recreational use the remainder waterways which may have some potential for such use. I am extremely grateful to the Select Committee for having accepted that view. I hope that the British Waterways Board has taken full note of it. We all know that a number of canals in the country are not at present in full use because they have not been fully restored; they have certain areas which prevent the through passage of

941
boats. Even though it would not be impossible to improve them and clear the hindrances, often the resources are not available.
I do not wish to continue the discussion, but I believe we owe a debt to the noble Lord, Lord McNair, for having suggested that we should think in these terms, even though from the legal view the amendment is not entirely satisfactory.
Viscount Astor: My Lords, since Clause 21 has the full support of the Government, it may be convenient if I set out our views on Amendment No. 12E tabled by the noble Lord, Lord McNair.
Clause 21(1) (a) cannot override the existing statutory responsibility that the British Waterways Board has to maintain navigation. That is the most important point. In managing its estate, the British Waterways Board has to take into account a wide variety of canal users' wishes, not only boaters but also anglers, walkers, conservationists and many others. It is for the British Waterways Board to achieve a suitable balance between these interests at local level, bearing in mind the wide range of its statutory duties. It is important that these cannot override the existing responsibility to maintain navigation.
Clause 21 carries out a recommendation made by the Select Committee on the Environment in another place. It has been amended to follow a direction made by your Lordships' House on Second Reading and to meet concerns about the protection of towpaths. I believe that the House should accept the clause in this form and, for the reasons I have given, resist the amendment.
Lord McNair: My Lords, once again I am grateful to the noble and learned Lord, Lord Brightman, for bringing the searchlight of his legal experience to bear on the amendment. I shall not press it, but the point that I made has not been made elsewhere about the inter-relationship of the artificial but wonderful ecology of the canal system and navigation. It is something which I hope will be looked at again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 13:
Page 13, line 44, after ("architectural") insert ("engineering").
The noble Lord said: My Lords, this is perhaps the most modest amendment which could be made since it adds only one word to the Bill. Admittedly, in Amendment No. 14 I add the same word in another part of the Bill, so my desire is to increase it by only two words. It would be difficult to be more modest than that.
Modest though the two amendments may be, they are extremely important. The promoters have adopted the standard usage in a number of other public Bills that have passed through the House relating to the duties to take certain conservation measures. Clause 21(1) (b) states that the board should:
"have regard to the desirability of protecting and conserving buildings, sites and objects of archaeological, architectural or historic interest".
I ask that the word "engineering" be added so that the Bill refers to:
"buildings, sites and objects of archaeological, architectural, engineering or historic interest".
I say that because, if anything, the waterways system is an engineering system. There is no doubt that it has a certain amount of archaeological interest in the sense of industrial archaeology. It has a modest amount of architectural interest here and there. However, it has an overwhelming amount of engineering interest. The objects—I prefer the word "artefacts", but objects will do —that are to be preserved in the waterways system are more likely to be engineering objects than any other kind.
I do not wish to go into this argument in any detail as I ran over the ground on Second Reading some while ago. I shall merely draw your Lordships' attention to one example. In Bristol there is a swing bridge at the entrance to the docks. I suppose it is of historical interest in the sense that it is rather old. It might conceivably be of architectural interest in the sense that it is a structure. Aesthetically, however, it is an eyesore. It is a dreadful little bridge. It is, however, listed because the machinery by which the swing bridge is operated is thought to be important from the engineering point of view. It has been listed on the grounds of engineering interest although so far no one has been prepared to admit that.
If it is right to preserve a structure of that kind on the grounds of engineering interest, it is right to state that, at long last, on the face of legislation. As Ministers know, I have tried to persuade them to take that step on a number of public Bills over recent years. I am happy to think, rather than say, that the promoters of the Bill look upon my amendment with some kindness. If I am right, I congratulate them for they are breaking new ground. I sincerely hope that the noble Lord, Lord Burton, will be unsuccessful in removing Clause 21 from the Bill as I would hate to improve that clause in my modest way and then have the noble Lord delete it.
Lord Elton: My Lords, before the noble Lord sits down, I believe it would help the debate which may follow if he could kindly tell the House which kind of objects, of the objects he is speaking of, would be affected which are not already covered by the term "archaeology", because industrial archaeology covers machinery. I imagine his concern is already met in the Bill.
Lord Howie of Troon: My Lords, that is the whole core of my objection. The term "industrial archaeology" is used as a means of avoiding the word "engineering". The term "industrial archaeology" is not archaeology at all: it is engineering history. Engineering history has been called industrial archaeology because it is usually carried out by people from the other side of the great divide in our culture. The word "engineering" will not harm the Bill in any way. The term will make clear what is required of the Bill. It will improve our culture enormously. I am rather sad that the noble Lord interrupted me as he has made me speak at greater length than I had intended. I beg to move.
Lord Thomas of Gwydir: My Lords, I have a great deal of sympathy with the noble Lord's amendment. He moved it in his usual modest fashion. It is an important amendment but I am rather concerned about the matter to which my noble friend Lord Elton referred. I hope the noble Lord can help the House because we are, after all, inserting words in a Bill and it is important that there should be no confusion about what is meant.
I wonder what the word "engineering" means. I do not claim to be an expert on the subject but I understand that there is civil engineering—which involves buildings, bridges and roads—mechanical engineering, electrical engineering, chemical engineering, aeronautical engineering and even military engineering. Can the noble Lord help the House and relieve our confusion by telling us exactly what he means and how that would stand out in any way from what is presently contained in the Bill, namely that it is necessary for the board:
"to have regard to the desirability of protecting and conserving buildings, sites and objects of archaeological, architectural or historic interest".
In what way does he wish to add to that?
Lord McIntosh of Haringey: My Lords, The Concise Oxford Dictionary gives a clear definition of engineering which is wider than the particular branches of engineering to which the noble Lord, Lord Thomas, referred. It is the:
"application of science to the control and use of power, esp. by use of machines".
I should have thought that that was a perfectly adequate definition which supports my noble friend's amendment.
My noble friend is too modest. He has not reminded the House that he has ensured that the word "engineering" has already been inserted in other legislation, notably in the Environmental Protection Act. That is a very good precedent for including the word now.
Lord Harvington: My Lords, perhaps I may add that I think that the noble Lord also has in mind the Anderton lift, for example, in Cheshire, which is the first example of its kind on waterways. I believe that the lift is unserviceable at present but it ought to be retained as a monument because such lifts are very popular all over Europe, although they are great big modern things today. However, that was the original which gave them their birth.
Viscount Astor: My Lords, as the noble Lord, Lord McIntosh, said, this is not a new line on the part of the noble Lord, Lord Howie, who has tried to include the wording in various Bills. Perhaps I may add a word of caution. The unqualified use of the word "engineering" might also apply the duties to current British Waterways Board engineering plant, which might be an unreasonable restriction on its day-to-day operations. I agree with the point made by my noble friend Lord Elton.
Earl Jellicoe: My Lords, perhaps I may comment briefly. I have heard what my noble friend Lord Astor said. I should like to reflect upon the matter. Speaking for the British Waterways Board, I should be perfectly
944
happy for your Lordships to accept the amendment. However, the House may prefer to let it pass for the time being and let the other place consider the matter.
I have a bias. If I know any canal well it is the Kennet and Avon Canal and I know the marvellous early 19th century and late 18th century engineering of that canal. One of the earliest pump stations is very close to where I live. I should rather like to see such items given special protection.
Baroness White: My Lords, those of us who are familiar with the history of some of the canals will also support my noble friend. The Anderton lift is a very good example and there are others which one could bring to mind although I do not wish to delay the House. Architecture can be contemporary. Therefore one need not be worried about engineering on the grounds that it is contemporary while other items are not. My noble friend is entitled to suggest that we make this change. If the other place wishes to knock it out, that is up to them.
Lord Howie of Troon: My Lords, I was hoping for a smooth glide towards happiness and I am rather taken aback. The noble Lord, Lord Thomas, who was once for a short, happy period of his life, my Member of Parliament—although I did not vote for him, partly because I was a Member of this House at the time —raised questions which I did not take further because I had mentioned those matters at Second Reading some time ago. Some of the items that I had in mind which are engineering and nothing else—unless we accept the industrial/archaeological flummery—are the sorts of things mentioned here, such as sluice gates, lock gates or a tunnel. There is nothing architectural about them. They are wholly, totally and completely engineering. It is high time that we recognised the engineering dimension to such things, which is every bit as important as the architectural dimension.
Anything that is said about engineering being covered by history or archaeology is also true of architecture. Yet it is accepted that there is an architectural dimension which is slightly removed from history and archaeology. In exactly the same way there is an engineering dimension—not well understood in this House—which is removed from history and archaeology.
I am grateful for the comments which have been made, even those which did not wholly support me although they leant a little way in my direction. I am especially encouraged by the comments of the noble Earl, Lord Jellicoe.
On Question, amendment agreed to.
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 14:
Page 14, line 8, after ("architectural") insert ("engineering").
On Question, amendment agreed to.
Lord McNair Lord McNair moved Amendment No. 14A:
Page 14, line 20, after ("Board") insert ("other than any such facilities as are so available prior to the coming into force of this Act").
The noble Lord said: My Lords, this may seem to be a nit-picking amendment. Although later in the

945
debate I shall be very critical of some aspects of British Waterways Board's activities and operation, I realise that it feels that it is between a rock and a hard place —as our transatlantic cousins say—in a financial sense.
Having lived near a canal and having walked for pleasure many times along it, I should regard it as mean in the extreme were there to be a turnstile with a slot machine into which I had to put money before I could indulge in that small pleasure. I know that there is a continuing debate about how much and by what means British Waterways should charge for the use of the canal. In fact there are some very interesting proposals in the December 1991 edition of the Inland Waterways Association's magazine and I hope that the board studies them closely.
The purpose of the amendment is to signal a further aspect of the Bill which I hope will be looked at closely in another place. The canals are arteries which spread out from our big cities. Walkers should be encouraged to explore the canals. They might become boaters or anglers. If they are confronted with a money-in-the-slot turnstile when they venture on to the canal, I feel that it is unlikely that they will pursue those possibilities. I beg to move.
10 p.m.
Earl Jellicoe: My Lords, I understand the feelings of the noble Lord, Lord McNair. However, I believe that the amendment proposed may be a little restrictive. Perhaps I may give an example. As I understand it, British Waterways Board at present proposes to resurface at considerable expense a car park at Tring reservoir off the Grand Union canal in Northamptonshire. At present the car park is an awful mess. It is muddy, rusty and waterlogged. I am not certain how far that proposal has advanced. I use it as an example. However, if British Waterways Board has gone to considerable expense to resurface such a facility, for which it does not charge at present, it might be perfectly sensible for it to levy a small charge when the area has been improved. As worded, the amendment is a little restrictive, although I entirely agree with its aim. I suggest that the noble Lord should not press the amendment.
Lord McNair: My Lords, I am grateful to the noble Earl for being somewhat encouraging. Does that mean that when or if British Waterways Board repairs a towpath it could then charge people for walking along that towpath?
Earl Jellicoe: My Lords, I used the car park as an analogy. The argument would not apply to a towpath on which I would wish to see the greatest possible freedom of movement.
Lord McNair: My Lords, I am grateful for that. When the Bill reaches another place, could we have a provision which clarifies the situation?
Viscount Astor: My Lords, the noble Lord will be aware that subsection (4) states that,
"Nothing in this section shall require recreational facilities".
It specifically refers to "recreational facilities".
We believe that those who benefit from British Waterways Board's recreational facilities should contribute, if necessary, to the costs of such provision.
Lord McNair: My Lords, does that include people who walk on the towpath?
Viscount Astor: My Lords, I do not believe that a towpath is a recreational facility. It is totally different.
Lord McNair: My Lords, I consider myself to be indulging in recreation when I walk along the towpath.
Viscount Astor: My Lords, we might be indulging in recreation in speaking tonight. It does not make the House of Lords a recreational facility.
Lord McNair: My Lords, I do not believe that the British Waterways Board is considering charging for speaking in the House of Lords. However, we have pursued the point far enough. I should like further discussion on the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Burton Lord Burton had given notice of his intention to move Amendment No. 15:
Leave out Clause 21.
The noble Lord said: My Lords, to the relief of the noble Lord, Lord Howie, perhaps I may say that I shall not press the amendment. However, when we met on 27th January I gave a number of reasons why the clause required strengthening. I had hoped that, having had its attention drawn to the matter, the Department of the Environment might have put some teeth into the clause. It is absolutely vital that some teeth are put into it. At present there is nothing to enforce the British Waterways Board to carry out any of the excellent duties in the clause.
Perhaps I may give two reasons for such amendment. Eighty per cent. of all the boats using the Caledonian canal discharge crude sewage into the waterway. When one is fishing just below a lock on the river it is not nice to find crude sewage floating past. There are no facilities on the canal for emptying bilges. I have seen boats discharge on a number of occasions. I believe that it is against the law but what are people on boats expected to do if there are no facilities for emptying bilges?
The canal authorities have known about the position for a long time. There was a committee which met at Inverness with the canal authorities. The matter was impressed upon them then but nothing has been done. I believe that some teeth ought to be put into the Bill. However, unless any other noble Lord wishes to speak I shall not move the amendment.
[Amendment No. 15 not moved.]
Clause 23 [Provisions as to disposal of subsidiaries, etc.]:
Lord Elton Lord Elton moved Amendment No. 16:
Page 15, line 21, at end insert:
("(4A) In managing or developing any property acquired under subsection (2)(b) of this section it shall be the duty of the person acquiring it—

(i) to have regard to the considerations as to conservation set out in section 21(1)(a) of this Act; and

(ii) to fulfil the duties set out in subsections (1)(b) and (c) and subsections (2) and (3) of that section.

(4B) Any person acquiring property referred to in subsection (2)(b) of this section from a person subject to the provisions of that subsection shall be subject to those provisions.").
The noble Lord said: My Lords, if the noble and learned Lord, Lord Brightman, chides me for tabling the amendment at such a late stage I can only apologise for being guilty. At a late stage it was brought to my attention that there was a significant gap in the provisions of the Bill protecting the environment. When I beheld the number of those besieging the promoters with amendments at this stage, I felt that no harm could be done by introducing this amendment too.
Your Lordships have discussed Clause 21, and in particular subsection (1) (a) to which the noble Lord, Lord Howie of Troon, has elegantly and persuasively added a strengthening element. The elements in Clause 21(1) serve to impose upon the British Waterways Board a duty to protect various interests, all of them environmental, which would be extinguished were it to sell on any of its property. The purpose of the amendment which I ask your Lordships to add to the Bill is to apply those constraints to subsequent purchasers so that the environmental protection is not weakened by the sale of property to developers or to those who neglect the environmental interests. I beg to move.
Lord McNair Lord McNair had given notice of his intention to move, as an amendment to Amendment No. 16, Amendment No. 17:
At end insert
("(4C) Nothing in this section shall prejudicially affect the powers and obligations of the Board to their primary duties to maintenance and navigation persuant to section 105 of the Transport Act 1968.
The noble Lord said: My Lords, the amendment strengthens Amendment No. 16 in respect of the navigational aspects of the canal in question. Therefore, any sale of property or goods shall not have a detrimental affect on the canal as a waterway because the canals were built solely for the purpose of navigation. I believe that the wording of Amendment No. 16 has been modelled on the Water Act 1978. That Act deals only with waterways which are not constructed primarily for navigation. I do not intend to press the amendment but I wish to signal the anxiety of many people that navigation may suffer.
[Amendment No. 17 not moved.]
Lord Elton: My Lords, I have declared my sympathy for the object of keeping canals navigable.
948
The noble and learned Lord, Lord Brightman, has explained the inappropriateness of using what is in effect a descriptive passage to make a prescriptive statement about the duty of the authority in this case. I see that the noble Lord has again made the duty primary and, therefore, the amendment is probably defective in that respect. I should be content if my amendment were not amended if that is what my noble friend Lord Jellicoe wishes.
Earl Jellicoe: My Lords, I have discussed this matter with the British Waterways Board, which is content with my noble friend's amendment.
Lord McIntosh of Haringey: My Lords, I apologise for being absent during the debate. I welcome the amendment in the name of the noble Lord, Lord Elton, and my noble friend Lord Howie of Troon. I am not qualified to say whether it goes far enough to deal with all the possibilities of misuse of land after disposal. Again, I flag that as a matter which must be given careful consideration in another place. However, it is a step in the right direction on one of my major anxieties about the Bill when it was first introduced. I am delighted that the noble Earl is prepared to accept the amendment.
Viscount Astor: My Lords, if noble Lords accept the amendment, we shall ask the British Waterways Board to consider with us whether further amendments are required in another place because the amendment may have implications which should be given careful consideration; in particular, the extent of duties placed on private citizens, whether there would be a workable means of enforcement and whether the amendment will have the exact effect intended.
Lord Elton: My Lords, I am grateful to my noble friend on the Front Bench. In the time available I could not devise a means of enforcement.
The Deputy Speaker (Lord Skelmersdale): My Lords, before my noble friend continues, I should point out to the House that the noble Lord has not withdrawn the amendment to the amendment.
Lord McNair: My Lords, I did not move my amendment to Amendment No. 16.
Lord Elton: My Lords, although there is no means in the amendment of attracting powers of compulsion which the Government or the courts might have towards the British Waterways Board before the sale of a property for a lapse in observance of duties which the amendment imposes on a purchaser of the property, it is clear that it places a right at common law for those aggrieved by a failure to observe that duty; for example, neighbours or others with an interest. In any event, the fact that the requirements are on the face of the statute will make the position plain to planning authorities which must give permission to some of the activities which the amendments seek to discourage.
On Question, Amendment No. 16 agreed to.
Clause 25 [Extinguishment of certain rights]:
[Amendments Nos. 18 and 19 had been withdrawn from the Marshalled List.]
Lord Cornwallis Lord Cornwallis moved Amendment No. 19A:
Page 15, line 46, at beginning insert ("As from the day appointed by resolution of the Board in relation to any inland waterway ("the appointed day") but").
The noble Lord said: My Lords, in speaking to Amendment No. 19A I should like to speak also to Amendments Nos. 19B, 19C, 19J, 19K and 19L.
The main amendment in the group is Amendment No. 19L. It may be helpful at the outset to say what this amendment is not intended to do. It is not intended to prevent the British Waterways Board from acquiring and extinguishing those rights which may exist but which for one reason or another are not in current usage.
Clause 25(3) and (4) already protects the rights of those who have continued to exercise them on a regular basis. The problem of rights which people may have which have not been continuously used is that the British Waterways Board does not know who those people are and was apparently unwilling to find out. It is far easier to have a clause in a parliamentary Bill which sweeps them all away without the knowledge of most of the people concerned and without any compensational right of hearing.
The Country Landowners' Association, the Scottish Landowners' Federation, the National Farmers Union, the Royal Institution of Chartered Surveyors and others did not believe that that was acceptable. It cannot be right in principle for there to be expropriation of those rights without any notice whatever to the individuals concerned. Further, it cannot be right in principle for the expropriation of those rights without compensation. Standing Order 13, which applies to Private Bills, clearly states that promoters of a Bill have an obligation to serve notice on those whose rights are to be acquired.
We are not trying to prevent the board from achieving its purpose. We are asking it to take a little longer about it and to make sure that it does not unilaterally remove genuine existing rights without notice or the knowledge of the people concerned and that, where appropriate, compensation is paid. As I have already said, the amendment does not attack the principle of Clause 25, but merely ensures that the persons affected by it will be treated equitably. The registration process will be advertised by newspaper circulation in England, Wales and Scotland and by the service of notices on local authorities which include parish councils.
I must emphasise that the registration of a claimed right would not determine its validity. Registration ensures that the British Waterways Board will have certainty as to who claims what rights, and anyone who fails to register would have lost the opportunity to establish those rights. After registration the British Waterways Board would at any time be able to extinguish the rights registered where the board agrees that they are valid six months after the service of a notice. It would be obliged to compensate for the extinguishment of registered rights and any dispute on the amount of compensation will be determined by the Lands Tribunal.
There has been very considerable discussion on the vexed subject of the extinguishment of rights. I originally tabled an amendment that the board should
950
allow a period of three years during which those owners or occupiers could register a claim to retain a right which they believed to be theirs. Representations were made to me that three years was too long and that dealing with the whole area of the British Waterways Board could involve an unnecessary bureaucracy. The present amendment is therefore tabled, with the agreement of the British Waterways Board, to limit the period of registration to one year and the notice of extinguishment to a further period of six months. It is also proposed that the extinguishment should be dealt with canal by canal by individual notice of intent. That will enable better information of the board's intention and a better opportunity for various owners' and occupiers' organisations to alert their members to what is happening.
The registration of a claim does not signify that a right exists. That would be a matter for negotiation between the claimant and the board. It also provides for the payment of compensation by the board where an agreed right is to be extinguished. I believe that to be an admirable compromise worked out after long discussions between the parties concerned and I commend it to the House.
Before moving the amendment formally I would like to pay tribute to the long hours of discussion and negotiation in which the noble Earl, Lord Jellicoe, has participated and in particular to the part which he has played in bringing so many agreed amendments before your Lordships' House. I thank the noble Earl for his unfailing courtesy during these discussions. I hope we reach a situation in which we send an improved Bill to another place. I beg to move.
10.15 p.m.
Lord Brightman: My Lords, Clause 25 of the Bill was an area of intense discussion before the Select Committee. It might be helpful to your Lordships if I summarise very briefly the effect of that clause as it now stands and then say a brief word about the amendment which I support. The object of Clause 25 is to extinguish riparian rights which are thought to be obsolete but whose theoretical existence may hamper British Waterways in its management of the canal system. The clause affects only rights created by a local Act more than 90 years ago in favour of riparian owners.
Put shortly, three types of rights are involved: first, the right to construct works adjacent to an inland waterway, for example, roads, mooring places and bridges; secondly, the right to drain water into or extract it from a waterway; and, thirdly, fishing and boating rights. Such ancient rights are, however, preserved by the Bill in four cases. The first is works in existence when the new Act is passed; secondly, rights to drain or extract water exercised before the new Act is passed; thirdly, fishing rights beneficially vested in someone when the Act is passed as distinct from fishing rights outstanding in some long-forgotten personal representatives; and, fourthly, rights which were originally created in favour of named persons or specifically identified land. What the proposed amendment does is to create a fifth exception; namely, rights which would otherwise be extinguished but have

951
been duly registered. These rights, which may be registered, will mostly be rights originally created in favour of riparian landowners generally without specifically naming the landowner or designating the land. So riparian owners will be protected if, put briefly, the rights have been exercised, or were created in favour of named persons or land, or, in the case of fishing rights, are beneficially owned when the Act is passed, or are registered.
I should now like to speak briefly about Amendments Nos. 19D and 19H in the name of the noble Lord, Lord McNair. I see no virtue in excluding from the clause navigable cuts, wharves, quays and landing places. These will be saved from extinguishment if they are in existence or if the right was granted in favour of a named person or named land, or if registered. There are precedents with this type of extinguishment: the British Railways Act 1968, extinguishing rights in the site of abandoned railway lines and the commons Act extinguishing common rights if not registered. I suggest to your Lordships that it would be right to accept the amendments in the name of the noble Lord, Lord Cornwallis, but not, I respectfully suggest, the amendments in the name of the noble Lord, Lord McNair.
Lord Burton: My Lords, I should like briefly to say that I hope this amendment will be accepted; it is certainly an improvement. However, I have one anxiety; that to get rights registered the applicant could get involved in considerable expense. The British Waterways Board is likely to object to a registration if there is any doubt whatever. Merely to get one's right recorded, whether or not it is intended to use it at the present time, could involve one in substantial expenditure.
Earl Jellicoe: My Lords, I should like to make clear that the board has given a great deal of consideration to this issue since it was very carefully examined by the Select Committee headed by the noble and learned Lord. The board has authorised me to make absolutely clear that it accepts that compensation should be paid to those who can establish a proper entitlement to these rights in cases where the board may wish to extinguish them.
This amendment is on agreed lines and has been moved by the noble Lord, Lord Cornwallis. I am grateful for the terms in which he moved it with the full support of the board. The British Waterways Board has settled the procedure for the registration of rights by those who wish to claim or exercise them with the National Farmers Union and the Country Landowners' Association.
I understand that the period of one year which the procedure will allow for that purpose is considered by those concerned to be fair and reasonable. The board's ability to deal with those rights which it feels ought to be extinguished, on a canal by canal basis or otherwise, in tranches, will be to the advantage of all concerned. I am most grateful to the noble Lord, Lord Cornwallis, with the way in which he has pursued this matter with persistence but with great politeness.
Lord Brightman: My Lords, perhaps I may be permitted to correct, with great respect, a point made by the noble Lord, Lord Burton. Under subsection (14) on page 11 of the Bill your Lordships will see that registration,
"of a claim to exercise a right under a provision to which this section applies shall not be evidence that the claim has any validity; and nothing in subsections (6) to (13) above shall prevent the Board from challenging in any way whatsoever the validity of any such claim".
Therefore the board can let a supposed right go on to the register without any qualms whatever.
Lord Burton: My Lords, I am most grateful to the noble and learned Lord for that information.
Lord McIntosh of Haringey: My Lords, the implication of that is very worrying because the noble and learned Lord referred to the amendments in the name of the noble Lord, Lord McNair, which are not, as I understand it, grouped with these amendments but which have now been debated. The noble Lord, Lord McNair, is seeking to exclude certain types of waterside activity. It was suggested by the noble and learned Lord in his first intervention that he need not worry about doing that because they could be registered. What the noble and learned Lord is now telling the House is that registration does not mean very much because, although it has no power to prevent registration, the board has powers to contest the validity of the claim in any way. I do not see how the two fit together.
Lord Brightman: My Lords, I do not know whether I am confused or not, but I had understood that Amendments Nos. 19D to 19H had not yet been moved. The purpose of my rising on this particular point was that it seemed to me that there was no need to exclude from Clause 25 wharves, quays, landing places and navigable cuts because they can go on the register. If they are on the register, the claimant has the right to establish their validity. The effect of registration is not to confer validity but to give a right to claim validity. If one is not on the register, one does not have the right to claim validity. It is exactly comparable, as I understand it, with the position under the commons Act.
Lord Cornwallis: My Lords, I am very grateful to the noble and learned Lord for his intervention. The period of one year is believed to be perfectly adequate because it is felt that anyone who has not bothered to register within one year either does not have very much to register or will not do so in any case. I thank the noble and learned Lord for his help with this amendment. I commend it to the House.
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendments Nos. 19B and 19C:
Page 15, line 46, leave out ("(5)") and insert ("(14)").
Page 15, line 49, leave out ("any inland") and insert ("that").
On Question, amendments agreed to.
Lord McNair Lord McNair moved Amendment No. 19D:
Page 16, line 1, leave out ("tramroads or navigable cuts") and insert ("or tramroads").
The noble Lord said: My Lords, in moving this amendment, perhaps I may speak also to Amendments Nos. 19E to 19H and Amendment No. 19M. Before doing so, I think there is a wealth of possibilities, mostly for the legal profession, in the words that the noble and learned Lord used when he said that someone registering a right had the right to establish that right. I happen to know that British Waterways will challenge any right that it so chooses —I guess that it will he most of them—and that anyone registering a right will be confronted with a legal battle. The contest is not about whether the right remains but about compensation for the loss of the right. While some wealthy landowners might relish a little light legal skirmishing, it could be a very serious matter for some of the small businesses—the independent service providers—with which I have discussed this matter.
It may be helpful if at this stage I briefly review the history of the rights the board intends to extinguish. The original Acts for the construction of the canals gave owners of the land adjoining the new canal the right to construct wharves and mooring places, and so on, which could be used without payment to the canal company. That was to encourage the use of the canal and excluded tolls—or, in today's terms, licence fees —which the company could, and which the British Waterways Board now does, charge. I believe that all those rights are still alive and extant today. Many boatyards on these old sites are still using the rights which save them from paying British Waterways a great deal of money and makes their businesses, perhaps, a little more profitable—although many of those businesses are not particularly profitable—and their sites correspondingly more valuable.
The British Marine Industries Federation believes, but cannot be sure without going to court, that new marinas built today could also own those rights. British Waterways naturally says that they cannot and charges marinas a fee, which might be illegal. The strongest evidence is that the rights exist and are valuable. I think that that is borne out by the vigour with which British Waterways has tried to extinguish them. I want things to be left as they are, pending resolution of this issue. That is why I should like all references to boatyard type facilities removed from the Bill.
It was during a meeting yesterday that the board's solicitor, Mr. Duffy, stated that any rights that were registered would immediately be challenged. I find the board's attitude morally reprehensible and would greatly prefer to see Clause 25 deleted, at least until the legal situation has been properly tested.
I should point out that the concessions made by the board to date on the matter are, in the case of many small businesses which cannot afford further legal entanglements than many of them already have with British Waterways, largely illusory. However, I shall not press the matter to a Division. I beg to move.
10.30 p.m.
Lord McIntosh of Haringey: My Lords, if the noble Lord is, as I think he is, speaking to the clause generally, I believe that he has raised matters which
954
give rise to a great deal of anxiety. What he says about the stated intention of the British Waterways Board to oppose any applications of a certain type makes me repeat my worry at what the noble and learned Lord said when speaking to the previous group of amendments.
If all this means is the power to establish a claim and it implies no restriction whatever on the power of the board to oppose that claim or challenge its validity, then it could be an illusory power. It could be that those who feel that they have a claim would be deterred from making that claim because they fear that if they seek to pursue a claim the British Waterways Board, with its greater financial resources and legal representation, would be able to cause them very substantial costs.
I wonder whether we have, as yet, got to the bottom of the matter. I also wonder whether the very widespread power to extinguish ancient rights which is implied in the clause has been adequately examined. I read the committee's report with great care and great respect but did not find myself in agreement with the conclusion. I do not think that this is a matter that should go forward into legislation in this form.
Lord Greenway: My Lords, I am glad to support Amendments Nos. 19D and 19H which were moved by the noble Lord, Lord McNair. These are the preferred amendments of the boating authorities, but in view of what my noble and learned friend has said I think that those authorities would like to have another look at this question. Perhaps in discussions with the promoters we can see whether these amendments could be meshed in in some way with the ones tabled by my noble friend Lord Cornwallis to which we have just agreed. Another place could perhaps better deal with this matter.
Lord Howie of Troon: My Lords, I believe that the noble Lord, Lord McNair, spoke also to Amendment No. 19M as well as to those in this group. Amendment No. 19M goes rather further than the other amendments because it removes Clause 25 entirely and for that reason I support him. I say that for the following reasons. In drafting legislation it is customary to draw up a Bill with certain clear and defensible purposes and then to throw in a bombshell, which is normally described as "miscellaneous", although not in this case.
As I understand it, the main thrust of the Bill is to allow the British Waterways Board to enter land for the purposes of repair and maintenance. Those are the general, defensible and admirable powers that the board seeks. Although we have sought to end those powers on the perimeter, we have accepted the generality of the board's right to seek powers to do such things. However, in Clause 25 we find that, in addition to doing sensible things such as looking after the canal or the waterways and keeping them in decent maintenance and repair, rights that people have had conferred upon them by Parliament - by this House and by another place - are to be taken away. Sometimes people have had those rights for a long time - I dare say that some date back as far the first canal legislation in the 18th century. I do not see that

955
it is proper to utilise a Bill of this nature, which deals with maintenance and repair and other sensible things, to take away people's rights. In that respect, I support the noble Lord, Lord McNair, especially in Amendment No. 19M.
Lord Thomas of Gwydir: My Lords, the noble Lord, Lord Howie, talks with great emotion about the taking away of people's rights, and the noble Lord, Lord McIntosh, is concerned about the extinguishment of rights that belong to individuals, but he seems to have forgotten that we are talking about rights which have not been exercised for over 90 years and which were not created for the benefit of any specific land or person. When one bears that in mind, it may well be found that the emotion that has been expressed is not apposite to this amendment.
Lord Burton: My Lords, I wonder whether the noble and learned Lord, Lord Brightman, could elucidate a little further on this. I understood him to say that there would be no question of objecting to the registration and that the only time an objection would arise would be when one wanted to implement whatever it happened to be. Therefore, the British Waterways Board would not challenge an actual registration. I am not sure whether that is correct.
The other point raised was in relation to the extinguishment of ancient rights. Circumstances change. I understand that a marked change has arisen where a piece of land has become available for development. It is worth a substantial sum of money, but to reach it one has to cross a canal. To do that one would have to exercise a right to build a bridge. Until now no one has wanted to build a bridge. A worry exists but, on the other hand, the problem may be overcome with registration, provided that each and every registration is not challenged.
Lord Brightman: My Lords, I do not know whether I can help the noble Lord. Under subsection (10) on page 10 of the Marshalled List the board registers any claim to exercise a right. That is what goes on the register; but it goes onto the register on the basis that, if and when the person registering wishes to enforce that right, he will have to ascertain whether the board accepts it. The board may accept the right, in which case it can be exercised. The board is entitled to challenge the validity of the right. To avoid unnecessary litigation, I should have thought that it was right for the amendment to be in the form of registering the claim to the right because then everything is in the open. If the time comes for the right to be registered, then it can be agreed between the board and the claimant that the right is valid; or, alternatively, if the board thinks the claim is a bad one it is entitled to challenge it. That is the system. It is the system, so far as I can remember, which works under the commons legislation, and at the moment I see no objection to it.
Lord McIntosh of Haringey: My Lords, I think that the noble and learned Lord would wish the record to say, "when the time comes for the right to be exercised" rather than "for the right to be registered".
Lord Brightman: My Lords, the validity of the right can be tested when the right comes to be exercised. I expect that it can be settled earlier. I do not know, because there are no procedural regulations about it. But it is right to say that the validity of the right will fall to be decided, at latest, when it comes to be exercised.
Lord Elton: My Lords, we must come to a conclusion fairly soon. I wish only to add my penn'orth to the conversation and say, first, that the amendments which we know will be accepted are a considerable advance on the position in which we were earlier. That should be recognised with gratitude. I should like to say now—I forgot to say it in connection with my amendment—how grateful I am to my noble friend Lord Jellicoe for his conduct of this matter. I also thank my noble friend Lord Kinnoull for smoothing the way for a great many amendments.
One is supposed to declare an interest, and I have a vestigial interest, being lord of a manor along the edge of which a canal flows. It may be presumed that I may have some as yet unextinguished rights. I have no idea what they are. It seems to me that the safeguards are addressed largely to people in my position. I regard myself as satisfied with where we are now. I hope that the advances made will not be prejudiced by trying to achieve these amendments rather than those that will be accepted.
Lord Howie of Troon: My Lords, the noble Lord, Lord Thomas, accused me of emotion, which is most unusual. I think that he said that we were dealing with rights, some of which had not been exercised for 90 years. I did not see that in the Bill but he may well be right. Is he trying to tell us that the board will not extinguish any rights which have been used with the past 90 years? If he is not telling us that, there was little point in what he said.
Lord Thomas of Gwydir: My Lords, I am certainly not trying to tell the House that. I am saying that the board has negotiated with interested people over the past few weeks and has reached an accommodation on registration. Rights will be extinguished if they have not been exercised for over 90 years, as I mentioned earlier, and if they were—
Lord Elton: My Lords, if my noble friend will forgive me, it is late at night and we are not at Committee stage, we are in proceedings after Third Reading. It is customary that each of us should speak only once. I always enjoy listening to the noble Lord, but perhaps he may feel he has done enough.
Lord Thomas of Gwydir: My Lords, I was directly asked what my views were.
Lord Howie of Troon: It was my fault!
Lord Thomas of Gwydir: In that case, I shall not reply except to say that the rights are not extinguished; the right to register is there because of the negotiations which have taken place.
10.45 p.m.
Earl Jellicoe: My Lords, I have not yet spoken on this series of amendments, so perhaps I may make three points briefly. First, I wish to associate myself with what my noble friend Lord Elton said. A considerable advance has been made since the matter was considered in the Select Committee. We owe that in large part to the noble Lord, Lord Cornwallis.
Secondly, I was concerned to hear what was said about the attitude of the board. I believe it has been misstated. Yes, the board will have the right to challenge a right when it has been registered, but there is no question of automatic challenge. It would wish to investigate it but there is no question of automatically challenging each and every right that has been registered. I speak with the authority of the board on that.
Thirdly, I feel strongly that we are in deep legal water here. Accepting that advance has been made, that does not mean that the matter could not be looked at further in another place. I believe that that could well be the right course to pursue.
Lord McNair: My Lords, I shall not detain the House much longer; we have already been speaking on the amendments for 18 minutes. I have to say, however, that the noble Earl has unwittingly illustrated one of the major problems which has been apparent since before the Bill appeared. It is the problem that independent service providers have had in their dealings with the British Waterways Board. The board is quite able and likely to say one thing to the noble Earl and another face to face with its customers. That may seem contentious but it has been asserted to me by so many different people in so many different ways that I am sure it is true.
We are not talking here about people who happen to be lord of a manor and who suddenly pop up and say, "In 1800 I had a right to do this or that". The British Waterways Board is not bothered with those rights. What it is bothered with is people who have worked hard for 20 or 30 years to develop a modest business. Part of the value and profit of the business is based on the fact that they do not have to pay large sums to the board.
The board is in a difficult financial situation. It has been told, "Do whatever you can to reduce the government grant". This is one of the things it is doing or attempting to do to reduce its dependence on the Treasury. It wants to be able to charge people for the rights they now have. I shall not press the amendments, but I am glad that we have had this debate and that the comments I have just made are on the record. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 19E to 19H not moved.]
Lord Cornwallis Lord Cornwallis moved Amendment No. 19J:
Page 16, line 13, leave out ("any") and insert ("that").
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 19K:
Page 16, line 14, leave out ("on the date of the passing of this Act").
On Question, amendment agreed to.
Lord Cornwallis Lord Cornwallis moved Amendment No. 19L:
Page 16, line 42, at end insert
("(6) Nothing in subsection (2) above shall affect any right under any provision to which this section applies relating to an inland waterway in respect of which any resolution has been passed under subsection (1) above, if a claim with respect to that right has been registered under subsection (10) below on an application made in accordance with subsection (11) below within a period of one year beginning with the day appointed as the appointed day in relation to that waterway.
(7) The Board shall maintain at their principal place of business for the time being a register for the purposes of registering under subsection (10) below any claim to exercise a right such as is referred to in subsection (6) above, and that register shall be open to inspection by the public at all reasonable times.
(8) As soon as reasonably practicable after they pass any resolution under subsection (1) above the Board shall—

(a) publish the required notice in the London Gazette (if the waterway is situated in England or Wales) or in the Edinburgh Gazette (if the waterway is situated in Scotland) and, in addition, in at least one newspaper circulated in the area where the waterway is situated, and

(b) serve a copy of the required notice together with a copy of this section on every local authority in whose area any portion of the inland waterway specified in the resolution is situated

(9) In subsection (8) above—

(a) the required notice is a notice which—

(i) identifies the inland waterway specified in the resolution passed under subsection (2) above;

(ii) states that the Board is required by subsection (7) above to maintain a register of any claim in relation to that waterway in respect of which an application has been made in accordance with subsection (11) below;

(iii) names the place where the register can be inspected by the public at all reasonable times; and

(iv) sets out a concise summary of the provisions of this section; and

(b) "local authority" means, in England and Wales, the council of a county, district, London borough, parish or community and, in Scotland, a regional council, an islands council and a district council.

(10) The Board shall, on an application made in accordance with subsection (II) below, register any claim to exercise a right such as is referred to in subsection (7) above.
(11) An application for registration under subsection (10) above of a claim to exercise such a right—

(a) may be made to the Board by any person claiming to be entitled to exercise the right; and

(b) shall specify the right to be registered and the name and address of the applicant;

and the provisions of section 17 of the Act of 1983 shall apply to any such application as they apply to any notice authorised to be served under the Act.
(12) The Board may at any time in the case of a right in respect of which a claim has been registered under subsection (10) above serve on the person who registered the claim or on any person whom they, after reasonable enquiry, know or believe to be his successor in title a written notice—

(a) stating that the right will be extinguished by virtue of this subsection on a date specified in the notice (being a date no earlier than six months after the date of the notice), and

(b) explaining the effect of subsection (13) below; and thereupon the right shall be extinguished on the date specified in the notice but the Board may only extinguish under this subsection a right which would, but for subsection (6) above, have been extinguished by virtue of subsection (2) above.

959
(13) Where a right is extinguished under subsection (12) above, the Board shall pay compensation to any person entitled to exercise the right if a claim in respect of that right has been duly registered under subsection (10) above (whether by him or by any predecessor in title); and, in default of agreement, the amount of any such compensation shall be determined by the tribunal.
(14) The registration under subsection (10) above of a claim to exercise a right under a provision to which this section applies shall not be evidence that the claim has any validity; and nothing in subsections (6) to (13) above shall prevent the Board from challenging in any way whatsoever the validity of any such claim.
(15) For the purposes of this section "inland waterway" includes a part of an inland waterway.").
On Question, amendment agreed to.
[Amendment No. 19M not moved.]
Clause 26 [Power to appropriate parts of docks]:
[Amendment No. 20 not moved.]
Clause 37 [Application to Scotland]:
Earl Jellicoe Earl Jellicoe moved Amendment No. 20A:
Page 18, line 44, at beginning insert ("(1) Subject to subsection (2) below,").
On Question, amendment agreed to.
[Amendment No. 21 not moved.]
Earl Jellicoe Earl Jellicoe moved Amendment No. 21A:
Page 18, line 44, at end insert
("(2) Nothing in this Act shall apply to Loch Lochy, Loch Oich, Loch Ness or Loch Dochfour, the boundaries of which are shown edged in red on the plan marked "The Scottish Lochs", of which five copies have been signed on behalf of the Board by Richard Jeremy Duffy, the Solicitor and Secretary to the Board, and on behalf of the Highland Regional Council by Ronald Harley Stevenson, the Chief Executive of the said Council, and deposited respectively in—

(a) the office of the Clerk of the Parliaments, House of Lords;

(b) the Private Bill Office of the House of Commons;

(c) the Department of the Environment;

(d) the principal office of the Board; and

(e) the office of the Chief Executive of the Highland Regional Council.").

On Question, amendment agreed to.
10.54 p.m.
Earl Jellicoe: My Lords, I beg to move, That the Bill do now pass.
The Bill has had a long and rather arduous journey through your Lordships' House. I must confess that that journey has been far longer and more arduous than I thought when in an unguarded moment I agreed to take the Bill on board. It had its Second Reading a year ago. The Select Committee sessions were long and intensive. There were over 600 pages of evidence and submissions. Following our rather bizarre Third Reading, there has been a great deal of intensive consultation leading to some important amendments being drawn up.
I shall not go over the ground traversed this evening at any length but I wish to comment on three areas. First, I wish to comment on the recognition—that was due in large part to the persuasive abilities of my noble friend Lord Burton —of the special position of the four locks along the Caledonian Canal. I believe the amendments on that matter are an important series of amendments and I wish once again to acknowledge
960
the contribution of all concerned. I acknowledge the contribution made by my noble friend Lord Gray of Contin, by the Highland Regional Council, which has put itself to a great deal of trouble and effort and, if I may say so sotto voce, by the British Waterways Board. All those parties have made a contribution to at least the partial solution of what I might term the Burton question.
Further, there is the important amendment which we have just been discussing on the extinguishment of rights. I do not think I need add to what has been said on that. Last but by no means least there have been the amendments concerned with entry. They bear the signature of the noble Lord, Lord Cornwallis.
On the question of entry I should like to make the following brief comments, and I do so with the authority of the, board. Except in emergencies the board will always try to negotiate rights of entry by private treaty before it exercises those powers for the purposes of undertaking repairs and maintenance on the waterways. I am glad to add that it has been agreed with the National Farmers Union and the Country Landowners' Association that a period of 28 days should be allowed for that purpose. Thereafter, if the parties have not agreed terms the formal procedures under the provisions of the Bill may then be followed. The board is determined —and I have heard the criticisms which have been made—to cultivate the best of possible terms with its neighbours and regards that arrangement as an example of the proper regulation between neighbours of their affairs.
For those reasons all the amendments of the noble Lord, Lord Cornwallis, to Part II of the Bill have the support of the board, which, in addition, has prepared a model code of practice for the exercise of its powers of entry on land. That code of practice addresses itself to the detail of what will happen in the exercise of those powers when conferred by Parliament so that farmers, landowners and others will know what to expect of the board and how their interests will be protected.
In conclusion, I should like to thank warmly the noble and learned Lord, Lord Brightman, all the members of his Select Committee and all those who have taken part in these debates and in our less public consultations. In that context, I have very much in mind my noble friends Lord Kinnoull and Lord Elton and the noble Baroness, Lady White. By the same token it would be wrong of me not to express my gratitude to all the many interested organisations, not least the BWB, which have played so constructive a part in our rather last minute but I believe useful and intensive process of consultation.
Moved, That the Bill do now pass.—(Earl Jellicoe.)
Lord Shackleton: My Lords, I do not think that I have ever before sat through such a lengthy and unusual discussion in your Lordships' House. On the whole it reflects credit on the House of Lords, although it is a matter to which I think the Chairman of Committees might pay some attention, particularly in relation to the failure to deal with some of the important issues at an earlier stage. That is why your Lordships can be pleased with the way we have dealt with the Bill.

961
Nonetheless there are a number of questions which have not been fully answered. Much depends on the way in which the British Waterways Board conducts its activities, particularly in relation to the amendments which have just been moved by the noble Lord, Lord McNair. I have studied the Bill closely to see whether it would be possible to lay an obligation on the British Waterways Board always to behave in an acceptable fashion. Indeed, the Government have said that nationalised industries should behave in the same way as a private citizen. However, I know of cases in which they have not.
I should like to refer to one example which has come to my attention, namely that of an individual who entered into negotiations with the British Waterways Board to acquire a property to develop as a boatyard. He happens to be a trained engineer and fully qualified to do so. He reached agreement with the board but he was gazumped. I wrote to the chairman of the British Waterways Board, who replied very courteously and made clear that it was his duty to obtain the maximum amount of money possible and therefore he could not refuse the opportunity of a better return. Indeed, he was willing to put the matter out to auction. I think that that is unacceptable. Furthermore, in Scotland it would not be legal because in Scotland an agreement which has been reached but which is not the subject of a contract may still be binding. In the case I mentioned there was no contract. Therefore the individual had all the expense. He raised the money for the purchase and is now being charged for undoing the work that he had already done. I can only say that I find that unacceptable behaviour.
I do not doubt that the British Waterways Board felt that it was its duty to do what it did and that it should not turn down the opportunity of getting good money. It may even have consulted the Government about it. But I believe that it is undesirable and I should have thought that most noble Lords, seeing gazumping in that way, would say if an individual had done it that he was not a gentleman.
There was an occasion when somebody offered me more money for a small bit of land, but I had already accepted an offer. It did not occur to me not to stand by my agreement. I am sure that that applies to all your Lordships. I believe that it is undesirable that the British Waterways Board can do so and get away with it.
It may be a matter of amending the law generally but it is relevant to some of the issues that we have been discussing quite recently, especially the points of the noble Lords, Lord Cornwallis and Lord McNair. I expect that the noble Earl, Lord Jellicoe, did not realise what he was taking on when he accepted this responsibility. I should like to congratulate him on steering it through. I believe that it is a matter to which some attention should be paid by the British Waterways Board.
Lord Lucas of Chilworth: My Lords, I return to the point at which I started in March last year, when I described the attitude of the British Waterways Board as somewhat cavalier. We come now to this stage of
962
the Bill—as the noble Lord, Lord Shackleton, said —in a most bizarre way, which I hope will not be repeated on other occasions.
I put the blame quite firmly not at the feet of our procedures but at the feet of the British Waterways Board. I have watched and taken part in a number of discussions since March last year. I have been very upset, to say the least, at the grudging manner in which officials of that board have dealt with the many objections and points put to them. There is little doubt that some of the objectors have come a little late into the game and, as I believe the noble and learned Lord, Lord Brightman, said earlier, it might have been better had some of the points been the subject of petition. Petitioners can petition without incurring the expense of counsel. They can just stand in front of the committee and make their points, to which the committee is bound to give full and proper consideration.
That does not mean to say that I do not have admiration for the noble and learned Lord's chairmanship and conduct of the committee, which has done a splendid job. The report, which is now increasingly being used as a vehicle to advise your Lordships, still leaves some matters undone. Over the past few days I have watched the British Waterways Board back down in the face of much opposition to its proposals from my noble friend Lord Gray of Contin, the noble Lord, Lord Cornwallis, and others. It is quite reprehensible that the board should wait until that time to give way and that we are here at this hour in a most extraordinary piece of procedure, the like of which I cannot remember in many years in your Lordships' House. I blame it upon the board.
I have one other small point to raise; namely, the question of appeals. At Second Reading, in presenting the Bill to your Lordships, my noble friend Lord Jellicoe drew attention to the question of a moratorium for five years in the case of resident houseboat owners. It is the subject of paragraphs 26 and 27 of the Select Committee's report. If your Lordships consider those paragraphs you will see that there had to be a good deal of weaselling at the end of which the board accepted that there should be some arbitration panel.
When my noble friend Lord Jellicoe wound up at Second Reading, he gave me an assurance in response to my comment in that debate about an appeals procedure. That assurance is in Hansard. It is late; I shall not quote it. I know that my noble friend will accept that it is in the report of his winding up speech in March last year. But nothing has been done by way of an appeals procedure. At the end of the moratorium there is nothing whatever. There is no provision for a residential houseboat owner to appeal. I believe that that denies the outwardness, the openness, of the board's actions. I am bitterly disappointed.
I agree with my noble friend Lord Jellicoe that thanks are due to many people. I wish to associate myself with those thanks. However, as to the generosity of the board, it is a thin gruel that it has produced for us to sup tonight.
Lord McIntosh of Haringey: My Lords, it would be impertinent of me—I have done no work on the Bill —to intervene again on the merits of any aspect of it. I am conscious that my intervention has been only at Second Reading and tonight, and that a great deal of work by the noble Earl, Lord Jellicoe, the committee and many other noble Lords, including notably the noble Lord, Lord McNair, has contributed to consideration of the Bill.
I rise on the Motion that the Bill do now pass, only to say that on this occasion we have stretched Private Bill procedure to the very limit of its validity. I question whether it is possible for a Bill with so many controversial matters to go through Private Bill procedure. It must lead us to think again and to reinforce the doubts that have already been expressed about Private Bill procedure in Parliament. I cannot believe that it is in the interests of Parliament that we should go through this amount of work and end up with a Bill that still requires substantial further consideration in another place.
Lord Harvington: My Lords, I must declare an interest in the matter. I am Vice President of the Inland Waterways Association. It is, I suppose, the largest group of people who use the inland waterways for recreation purposes. I have cruised them extensively, although at this time my boat is based in Europe.
I wish to congratulate, as others have done, the noble and learned Lord, Lord Brightman, and his committee on its work. It has been a Herculean task. The committee was most fortunate to have someone of the nature and temperament of the noble and learned Lord, Lord Brightman, in the chair. The whole waterways business has benefited much from his leadership and the committee's work.
The Inland Waterways Association was advised not to petition the House in the hope that the Bill would be changed to its satisfaction in this Chamber. The association is a leading organisation in this field. It was formed by the late Robert Aickman in 1946 to promote the retention, restoration and use of the inland waterways of England and Wales.
Members of your Lordships' House were sufficiently convinced of the undesirable nature of the Bill, as drafted, to meet representatives of British Waterways about it. They were convinced that users would suffer. They believed that if the British Waterways Board was not prepared to get the main outstanding issues right in this House, it did not deserve to achieve the Bill.
I am pleased to say that the board was prepared to move its stance on a number of issues. I congratulate those noble Lords who were involved and the representatives of British Waterways for the way forward that they have indicated. They have saved the rest of us a great deal of work today.
I must pay a heartfelt tribute to my noble friend Lord Jellicoe on behalf of all the people who use the waterways for pleasure. He has worked incredibly hard not only during the past few days but for weeks to achieve a reasonable situation. That has not been easy for him. We owe him a great debt of gratitude
964
and we shall always remember what he has done. My noble friend has brought us to a reasonable situation so that we can get on.
The association has always said that it agreed some parts of the Bill to be necessary in order for the board to manage its system properly, in particular the new power that it is seeking to give immediate access to waterside land in cases of emergency. The association fully understands the need for the power and supports the granting of the power to British Waterways. Nevertheless, the association is greatly concerned that the Bill does not give enough prominence to navigation, which is very much its business. In its view, the waterways in the board's care are fundamentally man-made features created for the purpose of navigation. Their beauty, wildlife, archaeological interest and recreational value are dependent on their management in a broadly traditional way, with navigation as an essential element. One should point out that this is the only form of transport whose use positively improves the track. The deep water maintenance boats of British Waterways, as was pointed out by the noble Lord, Lord McNair, do by their very use greatly improve the waterways. In fact, all movement of boats on waterways do positive good and not harm; that is, unless people are idiotic enough to drive them too fast. and I hope that if they do they will be dealt with accordingly.
In a number of areas the powers which would be conferred by the Bill are still excessive for their reasonable purposes and are sometimes inappropriate to the problem. They do not provide for consultation and appeal where such provisions are clearly necessary for the prevention of unreasonable interference with the liberty of the individual. The association, therefore, will be petitioning in another place to give elected representatives an opportunity to put these matters right.
There is widespread and deep anxiety among Inland Waterways Association members that, despite the real improvements in many aspects of their work in recent years, the board is currently excessively concerned with increasing revenue and reducing expenditure. That misdirection of effort is currently seen in reduced maintenance of remainder waterways —as your Lordships have heard, they are those which were so desecrated in the 1968 Act—in attempts to sell waterways under restoration, in excessive increases in some fees and charges, and in disproportionate use of time by middle management in seeking new and often inappropriate sources of revenue.
It is widely feared that the Bill in its present form will reinforce those undesirable trends. In particular, British Waterways has recently announced auctions of property in Humberside and in the South East.
The association is anxious that, despite protestations to the contrary from the board, parts of the waterway heritage have been sold off; for example, lock cottages and other historical waterway buildings. That process will continue unless steps are taken.
Owing to the pressure of time, it will obviously be more appropriate for those steps to be taken in

965
another place later this year in a new Parliament. Of course this Bill can carry over into a new Parliament because for this purpose dissolutions do not matter.
In addition, some buildings which are not of great interest are being sold for a quick monetary return at a time when the property market is heavily depressed. If the British Waterways Board is so starved of funds that it cannot keep those properties and obtain a continuing rent from them, it should at least wait until there is a chance of achieving a better market price. There are some indications that British Waterways may become more open. If that is so, that is to the good. I cannot emphasise too strongly that if it had consulted the Inland Waterways Association and other waterway interests before promoting the Bill, it would have had an opportunity to amend it to everyone's satisfaction before it was published, thus saving the taxpayer a great deal of money. Your Lordships will know well that it always pays to roll the pitch.
On the whole there have been good relations since the dissolution of the British Transport Commission. When the Minister of Transport, Mr. Ernest Marples, decided to create the British Waterways Board in 1962 the work was carried out by the Government and those of us who were trying to get things done throughout the late 1950s. It fell to the noble Baroness, Lady Castle, then Mrs. Barbara Castle, Minister of Transport, to put the arrangements in legislative order. An entirely new atmosphere came into being.
The British Waterways Board was created under its chairman, Sir John Horton, who had the task of taking over a thoroughly run-down organisation. Our confidence in him and his ability to raise the low morale at the time was thoroughly justified. Before he retired we saw the board much as we see it today. I should not like to think that, after such a long period of good, a substantial error may be made today. I speak with 30 years' experience of our inland waterways system.
I am sure that when the Bill reaches another place there will be those who make the final adjustments to put it right, as I am sure the board will do itself, given time to consider what I have said and, indeed, what others have said better than I could this evening.
As the House knows, I do not very often take up its time, but as this has always been my subject I felt it right to join in the debate this evening. I see that the Chief Opposition Whip does not altogether agree with me but I cannot help that.
We must remember that our waterways are a great national park which take up no room at all. They are a great asset to the country which people are enjoying in ever larger numbers. Those who know anything about canals will know that what was done in the 1960s has been of enormous benefit to the users of our system.
11.15 p.m.
Lord Brightman: My Lords, I promise to be brief. I thank your Lordships for the kind words spoken about the work of the committee.
966
As regards consolidation, there is an urgent need to consolidate the various Acts of Parliament which define the rights and duties of the British Waterways Board. As the committee said in its report, legislation concerning British Waterways has developed piecemeal over the past three decades resulting in a confusing web of provisions. There was a total of seven Acts of Parliament passed between 1954 and 1983 which govern the activities of the board, often in minute detail. Now there will be eight. That is not a satisfactory situation.
Waterway users are not people who have ready access to lawyers. There were 19 petitions against the Bill and not one of the petitioners who ultimately appeared before us was represented by a solicitor or counsel. If this Bill is to receive the approval of Parliament it should be on the clear understanding that the next Bill which comes, promoted by the British Waterways Board, will be consolidated to put together a multitude of enactments in some readable form.
As regards public relations, there is no doubt at all in my opinion that relations between the board and its customers, the river and canal users, are not universally good. That was clearly evident to the committee in the course of its hearings. I do not seek to attribute blame. What is needed is some central department to which waterway users can take their complaints if they cannot get satisfaction locally. There will be some need for finance but in my opinion it will be money well spent. That is dealt with in paragraph 54 of our report.
I wonder whether this saga should be looked at by those who are concerned with the business of this House. Is it right that your Lordships should be inflicted with some 47 possibly hostile amendments at this stage in the passage of the Bill? Ought not protestors to petition in the usual way so that your Lordships have the benefit of the Select Committee's opinion reached after evidence has been received and probed?
I should like to pay tribute to the great assistance given to the committee by the 14 petitioners who ultimately appeared before us. The hearings were a sterling effort on the part of the petitioners who in many cases took great trouble to back up their oral evidence with printed and illustrated texts. Although we did not always accept their representations, at least we were fully enabled to appreciate their points of view. I should also like to pay tribute to the assistance given to us by the committee's clerk who had the difficult, almost impossible, task of distilling a readable report out of a mass of detail. I believe that the Bill is as good as we can expect. I hope that it will have a fair wind in another place.
Baroness White: My Lords, in the circumstances I am not going to read out the speech that I have prepared. But there is one question which I wish to ask the Government Front Bench which arises from the remarks made by the noble and learned Lord, Lord Brightman, and my noble friend Lord McIntosh of Haringey. We have had great difficulty over the Bill processes in this particular example. As a House are we to have the opportunity to discuss the cognate Bill

967
which I believe has just completed its passage today in the other place? I believe it is the Transport and Works Bill. It purports to change the whole balance of a Private Member's Bill and the other ways of dealing with the kind of problem we have been discussing today. Is that Bill coming to this House and, if so, when?
Lord Elton: My Lords, I shall also be brief. I have played a very small part on this Bill. As I live many scores of miles from the manor that I mentioned earlier, my only interest is in the procedure which the noble and learned Lord and the noble Baroness have drawn to our attention. The fact is that the Bill came to Third Reading in a state which meant that there were sufficient of your Lordships who felt that it should not pass and put it in peril. The choice had then to be taken either magnanimously to try to put it right or petulantly to reject it. In the circumstances I believe that noble Lords were right to do as they did. With the noble and learned Lord and most other noble Lords, I believe that some means should be found of sweeping objections into committee and not allowing them to surface later. On this occasion the only comfort is that we are not the revising House and therefore the imperfections which are bound to result from this hasty procedure can be remedied.
Lord McNair: My Lords, I dealt in some detail with certain aspects of the Bill so I shall not go into those again. I begin by saying that my overall impression of the board's behaviour both during the passage of this Bill and in other respects is that it is not worthy of the custodian of such a large part of our national heritage. In his evidence to the Select Committee the board's chairman, Mr. David Ingman, made some significant remarks. He was,
"surprised by the potential that lies in the waterways".
Again, he said:
"and if I were to capture a sentence it would be to develop it into one of the most valuable environmental assets in the UK".
The word that startles me is "into". Surely the canal network is already a great environmental asset. In his next answer all is made very clear. One of his aims is to provide,
"an attractive setting for living and working".
In other words, a view of the canal, not a view from the canal. That is the crux of the matter.
I am sure that underlying the controversy and the bad relations which this Bill has caused and which existed before the Bill came into being is the clash of cultures between the board's top management, many of whom have been imported from industry, and those who own small businesses which provide services to those who own boats or want to hire them. Very few of these independent service providers have what many "proper business people" would consider a successful business. They probably have a small return on capital but an extremely satisfying lifestyle. That is what they want. The board's policy appears to downgrade the Inland Waterways Amenity Advisory Council and consult individual user groups, a
968
technique otherwise known as divide and rule, as practised by a certain Roman emperor whose name I cannot remember.
During one such consultation two representatives of the Association of Pleasure Craft Operators visited Mr. Ingman at British Waterways' Little Venice office. I am told that he said to them that he was glad of an opportunity to consult and that he would start by explaining what he meant by consultation, which was that he talked and they listened. He proceeded to lecture his hapless audience of two people for more than an hour with the aid of a flip chart. This arrogance is found in countless contacts which British Waterways Board has with service providers. I have pages and pages detailing appalling abuse of power. In one case British Waterways tried to prevent the owner of a boatyard from obtaining planning permission to extend the kitchen of a pub he owned on the same site unless the owner repaired the canal wall on the opposite side of the canal, which he did not own and which was nothing to do with him.
Several reports concern the commercial manager of the north west region. One in particular concerns a company called Wixall Marine. There was a meeting at which four people were present. They have all sworn affidavits about the fact that the meeting took place and about what was decided at the meeting, apparently amicably. British Waterways Board denied that the meeting ever took place. That is very strange.
The process of downgrading IWAAC is not entirely separated from the fact that the board has already removed from that body one of its most vociferous critics. This person was referred to by the chairman of the IWA in these terms:
"That they chose to prosecute"—
for a protest withholding of dues—
"someone whose love and respect for the waterways is legendary is hardly likely to endear British Waterways to its customers".
I feel that a new position must be created of an ombudsman for the waterways. I also feel that the Monopolies and Mergers Commission, which suggested in its last report on the waterways that another report should be prepared—the last one was 1988—should have another look. Perhaps it is also time for the Environment Select Committee of the House of Commons to do the same. What I would really like to see is a Royal Commission on the inland waterways. There is obviously great scope for improvement in British Waterways' maintenance activities and I feel sure that opening up these activities to competitive tendering would make the most of available resources.
On that there are two specific points which I should like to raise. First—this is based on information I received today—when comparing costs with outside contractors I understand that British Waterways chooses to ignore its own labour costs, thus making any quotations it receives from outside contractors appear uncompetitive. Secondly, I understand that British Waterways engaged someone specifically to develop its competitive tendering activities. However, I also believe that this person is no longer with British Waterways. I am not sure why, but I hope that it will move in that direction. It is quite apparent that many

969
unsavoury things are going on. We need to find out exactly what they are before the service providers and the board can proceed in a spirit of constructive co-operation, which is what everyone would want.
There is a further issue regarding maintenance which concerns the disposal of waste. This is a neutral point but it is a nettle which must be grasped in order for maintenance to be carried out properly. British Waterways recently sold its Bull's Bridge maintenance depot to Tesco and then found that it needed another one but had not allowed sufficient funds for its creation. That is very strange and lacking in foresight. The problem is that tipping licences are now required for tipping dredging spoil. Tipping a largely clay sludge on the towpath, as the board's solicitor suggested to me the other day as the solution, is unlikely to endear British Waterways to walkers, boaters or anglers.
That brings me to one final point. British Waterways states that it should be able to capitalise its assets. Does it always try to get the best price for a property? This point has been raised before in our debate but I should like to be sure that, for example, property is not disposed of at a discount to board employees or anything of that kind.
I should like to endorse most of the congratulations and thanks expressed by other speakers and to apologise to the noble Earl if my comments have upset him. I assure him that there was nothing personal there.
Lord Greenway: My Lords, I hesitate to intervene again but I shall do so only briefly. It is quite clear that a number of areas of concern still remain. I can only hope that these will be given due and careful consideration in another place. I should like to place on record my thanks to the noble Earl and to the board for the considerable movement they have made towards meeting the concerns of the boating authorities. As a result, the Bill has certainly been improved. Having said that, I am bound to say that the way in which the Bill has been handled—I bear no disrespect to the noble Earl in person—has to some extent, I fear, dented the trust previously placed in the board by the boating fraternity. That must be a matter for regret.
Lord Burton: My Lords, I should like to thank my noble friend Lord Jellicoe. I should also like to draw attention to the report of the House of Commons Environment Select Committee of July 1989 on the British Waterways Board. It stated:
"To proceed by agreement where sensitive local issues are involved is clearly the most desirable course and we recommend that the board should do so wherever possible".
I think that all those present must agree that that has not been complied with. The noble Lord, Lord McNair, referred to a meeting that it was alleged did not take place. I am pleased to say that the meeting we had in Spean Bridge which was widely attended was tape recorded. An allegation was thrown at us later on that a statement had not been made. We were able to produce the tape to show that it had been made.
There is enormous dissatisfaction with the management of the board. That has been unanimous from all those who have spoken tonight. The report of
970
the noble and learned Lord, Lord Brightman, made an interesting point about having a central body for public relations. We used to have a committee which met in Inverness. It was obviously a long way away from board headquarters. All the people interested —local authority members, the owners of fishing boats and so on—could attend. We found that this was most useful. The chairman came from London and he was able to take straight back to the British Waterways Board what the committee had recommended. However, this has now been done away with. I do not know why. Perhaps it was not to the liking of the board that we should have a roundabout method like that.
Finally, perhaps I may make one suggestion for a way forward out of a part of this dilemma. The Monopolies and Mergers Commission reported on the board in 1987 and recommended that another report should be published in five years' time. That time falls due this spring. I have asked my noble friend the Minister kindly to let me know whether it is the intention that the commission makes a further report. She has told me that it is the intention to have one this summer. It produced some very good recommendations in its last report. Therefore, if we can have a further report on the board that may produce a way forward on this occasion.
Viscount Astor: My Lords, a few points were raised to which I think I should respond. The noble Baroness, Lady White, asked me about various policies with regard to future Bills. I cannot answer that this evening. But I shall draw the point she made to the attention of my noble friend the Leader of the House.
The noble Lord, Lord McNair, mentioned the Inland Waterways Amenity Advisory Council. My right honourable friend the Secretary of State must take into account the general fitness for serving on public bodies of people appointed to the council. I believe—
Lord McNair: My Lords, I trust that the noble Viscount will allow me to intervene. I have had sight of a letter in which it is alleged that a member of the legal department, or whatever it is called, of the board has said that it was out to prosecute the person because—
Viscount Astor: My Lords, I must point out to the noble Lord that he is out of order; indeed, he has already spoken once. Perhaps I may finish my point. I believe that the person to whom he was referring was a director of a company which was convicted of failure to pay the British Waterways Board licence fees. The Government cannot condone deliberate failure to pay charges that are legally due.
Many noble Lords this evening have mentioned the customer relations with the British Waterways Board. The Government are anxious that there should be good relationships between the board and the users of waterways—not only boaters but anglers, walkers, canoeists, nature watchers and all others. That is in accordance with the principles of the Citizen's

971
Charter. We hope that there will be good relationships between everyone. In conclusion, I trust that the Bill will now be able to proceed to another place.
Lord McIntosh of Haringey: My Lords, I have no desire to delay the House. But before the Minister sits down will he comment on the specific point that the Private Bill procedure is being stretched to or even beyond its limit if such major issues of public policy are introduced in Private Bills? That is what I want the Government to respond to.
Viscount Astor: My Lords, I can only say, as I said earlier, that I shall bring the noble Lord's remarks to the attention of my noble friend the Leader of the House.
Earl Jellicoe: My Lords, I think that it may be agreeable if at this comparatively late hour I were to confine my concluding narration to the following few words: I commend the Bill to your Lordships.
On Question, Bill passed, and sent to the Commons.

Church of England (Miscellaneous Provisions) Measure
11.38 p.m.
The Lord Bishop of St. Albans The Lord Bishop of St. Albans rose to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Church of England (Miscellaneous Provisions) Measure, passed by the General Synod of the Church of England, be presented to Her Majesty for Royal Assent.
The right reverend Prelate said: My Lords, it is with some temerity at this hour that I beg to move this Motion. As its short title suggests, the Measure contains provisions on a wide range of matters which are subject to the ecclesiastical law of the Church of England. Most of them are not controversial or even particularly exciting but they will be extremely useful in their own fields. I do not want to detain your Lordships by attempting to deal with them all. However, I feel that I owe it to the House to mention just a few of them. The provisions deal with such things as parochial registers and records of importance to historians and genealogists. They deal with the rights and responsibilities of the rector or vicar of a parish to look after and care for the funerals of his own parishioners if requested, even if the cemetery or crematorium lies outside the parish boundaries. The intention behind two of the clauses is to save unnecessary paperwork and thus unnecessary expense.
Clause 6 helps the Church of England to forge closer links with churches abroad. I am sure that at a time when all the Churches are trying to move towards greater unity, your Lordships will be pleased to hear that a good deal of effort is going into the work of improving relations with other Christian Churches in Europe as well as in this country.
I must say something to your Lordships' House about three clauses - Clauses 14 to 16 - relating to the appointment of deacons to various posts, which gave rise to a certain amount of concern among some members of the Synod and to some members of the Ecclesiastical Committee. I begin, however, by stressing that, although these clauses are controversial, there is nothing in the Synod's constitution or standing orders to prevent them forming part of the Measure or to make it in any way improper to include them. In practice, of course, the word "deacon" means "woman deacon", but I shall return to that in a moment.
The background to the provisions lies in Section 10 of the Act of Uniformity 1662, which is one of only two sections of that Act that are still in force. It does not relate to the Book of Common Prayer, but provides, in effect, that the holders of certain types of office in the Church must have been ordained as priests.
The first of the three clauses is Clause 14, which provides that, in spite of anything in Section 10 of the 1662 Act, deacons may be appointed as rural deans. The clause says it is
"for the avoidance of doubt",
and that is precisely what its purpose is. Some ecclesiastical lawyers take the view that it is already lawful to appoint deacons to the posts of rural or urban or area dean—as it is often called these days —and that Section 10 of the 1662 Act contains nothing to prevent it. Some experienced deacons have, in fact, been appointed as rural deans on that basis. On the other hand, some lawyers take a different view, and because of that apparent ambiguity it seemed desirable to clarify the legal position.
The office of rural dean is a responsible one, but the rural dean's role is essentially pastoral, and does not involve supervision or oversight of priests in the rural deanery or carrying out essentially priestly functions. According to Canon Law, the rural dean's main task is to report various matters to the bishop, such as illness or distress among the clergy, and there seems no real reason why this should not be done by an experienced deacon. While in the vast majority of cases, the clergy of a deanery will continue to prefer a beneficed incumbent to fulfil that role, it is not unknown for them to ask for a retired priest to take on this responsibility, especially when they are all hard-pressed with their own parish work. Where there are few retired clergy, as in my own diocese, I am frequently asked—because I always consult their wishes before making an appointment—if they can nominate a woman deacon from among their number. My answer has to be, "I don't know". With the help of Clause 14, I shall be able to say "Yes, it is perfectly permissible, if that is your wish."
Next comes Clause 15, which makes it possible to appoint a deacon who has been ordained for at least six years as a residentiary canon of a cathedral. This, too, represents a change in the law and, of course, the position of a residentiary canon is a senior one, but mature and experienced deacons are already able to and do hold senior posts in their dioceses, for example as Director of Ordinands, as Director of Education or

973
as Director of Social Responsibility. However, posts of that kind are quite often linked to cathedral canonries, partly for financial reasons and partly because it is desirable that these senior people in the diocese should have a spiritual home in the life of the mother church of the diocese, and where that happens at present deacons are excluded from the posts in question, which means that the best available person cannot necessarily be appointed.
So Clause 15 would open the way to the appointment of deacons both to residentiary canonries and to diocesan posts linked with them, and it would also ensure that, where it is thought desirable to appoint a deacon but the cathedral's constitution and statutes mirror the existing law, the cathedral will not need to go through the lengthy process of having its constitution and statutes amended. Nevertheless, the clause makes clear that deacons who are residentiary canons will not be entitled or required to perform exclusively priestly functions, such as celebrating the Holy Communion, and for that reason there can be no question of there being more than an occasional residentiary canon of a particular cathedral staff being a deacon as then there would not be sufficient staff of the cathedral to fulfil the basic sacramental duties at that place of worship.
Finally, Clause 16 deals with non-residentiary canons. The office of a non-residentiary canon is primarily an honorary one, and is normally intended to give some recognition to a clergyman who has played a significant part in the life of the Church in the diocese, so that will allow deacons who have had an effective ministry there for some time to be considered suitable persons to appoint. Most ecclesiastical lawyers consider that the 1662 Act does nothing to prevent a deacon holding that office, and several deacons have in fact been appointed as non-residentiary canons of various cathedrals where the statutes appear to allow it. However, the object of the clause is to set at rest the few doubts about the legal position which have been expressed, and to ensure, as in the case of residentiary canons, that where a cathedral's constitution and statutes stipulate that the non-residentiary canons must be priests—as against clerks in holy orders, which would allow deacons—the cathedral will not need to go through the wearisome process of getting them altered. Once again, the clause makes it absolutely clear that non-residentiary canons who are deacons would not be entitled or required to perform exclusively priestly functions.
Although the position may change in the future, it is well known that at present most male deacons regard their office as something of a stepping-stone to the priesthood. Because of that, the real relevance of the three clauses I have outlined is to women deacons. Some members of the Ecclesiastical Committee were concerned that the clauses appeared to be an attempt to edge towards the ordination of women to the priesthood by the back door, but I should like to assure your Lordships that that is not the case. The offices covered by the three clauses do not in themselves involve carrying out exclusively priestly functions, and their supporters in the Synod included some people who were opposed to the ordination of
974
women to the priesthood, but who thought it important to allow mature and experienced women clergy to progress to posts of responsibility in the Church which they could properly hold as deacons, rather than being left to feel that the only way forward for them in their ministry was to be ordained as priests.
It may seem somewhat surprising to some of your Lordships that a deacon would be able to hold those responsible posts but could not he an ordinary vicar or rector. To that I would say that the office of rector or vicar of a parish is one of the most honourable and important in the Church, because it involves the care of the souls of the parishioners entrusted to him by the Bishop at his institution and is the cornerstone of the parochial system which is such an essential feature of the Church of England. The three posts which are the concern of this Measure do not involve the presidency of a Eucharistic community, and therefore do not infringe upon what are at present exclusively priestly and therefore, under the present law of the Church, exclusively male responsibilities.
In conclusion, this Measure was debated at length and in detail by the Synod, passed by substantial majorities in all three of the Synod's houses, and contains a large number of provisions which will be for the benefit of the Church of England and those whom the Church serves. I beg to move.
Moved, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Church of England (Miscellaneouds Provisions) Measure, passed by the General Synod of the Church of England, be presented to Her Majesty for Royal Assent—(The Lord Bishop of St. Albans.)
11.50 p.m.
Lord Beaumont of Whitley: My Lords, I hope that your Lordships will agree to this measure. The Ecclesiastical Committee looked at it carefully. A number of the doubts came from a confusion on the concept of orders—the orders of deacon, priest and bishop—with the idea of appointments. They are different matters; there are all kinds of historical hangovers about how they should be separated. For example, we have archdeacons who are primarily deacons because they are primarily people who are appointed to serve. It is valid and ecumenically correct that the Pope of Rome can be elected if he is only a deacon. He will have to pass through the orders of priesthood and bishop before he takes the throne; but a deacon is a single and highly respected order. To give deacons responsibilities is not in any way to pre-judge the whole question of the ordination of women. I think that the Ecclesiastical Committee appreciated that finally, wholeheartedly and unanimously.
Having said all that, I must close this Ash Wednesday by saying that I celebrated Communion at a church in Southwark this morning which was being looked after in the interregnum by a lady deacon, about 40 years old. She was the daughter of a bishop who has sat in your Lordships' House recently, and I think the granddaughter of another bishop who has also sat in your Lordships' House. I thought it was

975
remarkably silly that she had to import me from quite a long way to perform a function which she, who had all the responsibility for the parish, was not able to perform herself. However, that is irrelevant to the issue which does not concern that matter. I heartily commend the measure to your Lordships.
11.52 p.m.
Lord Graham of Edmonton: My Lords, those who follow these matters will find it strange that the measure is not being dealt with from these Benches by the noble Lord, Lord Williams of Elvel. As noble Lords will appreciate, he takes a keen interest in these affairs, and I am sorry that owing to a mix up between the Government Whips' Office and the Opposition Whips' Office on the timing of the matter, he is unable to be here this evening. He apologises, but it is through no fault of his that he is not with us. He asked me to say that he wishes the measure well and has no adverse comment to make about it.
I believe that the House is well served by the Ecclesiastical Committee which we know represents all sides of both Houses and guides us in our attitude towards the special relationship that we have with the Church of England. The House has been well served this evening by the care and lucidity of the right reverend Prelate, the Bishop of St. Albans. I listened and fully understood not only what he said but also the grounds upon which controversy could arise from what he said, despite the care that he took. I know that the Synod will be dealing with a subject of a major character in this matter later this year. There may be greater controversy as to what is in the mind of the Church of England and the Synod when the House is apprised of the matter.
Meanwhile, from these Benches, we appreciate very much the work done on behalf of all of us by the Ecclesiastical Committee, in particular by the Synod and its representatives here this evening. We wish the measure well.
The Lord Bishop of St. Albans: My Lords, there is little for me to add. I wish to express my thanks to the noble Lord, Lord Beaumont of Whitley, for the support he gave me today and for the work that he
976
and the members of the Ecclesiastical Committee carried out in scrutinising the measure in the way it should be properly scrutinised and eventually giving it their warm support.
I also thank the noble Lord, Lord Graham, for his kind words. I am glad to think that my speech was at least clear to some Members of the House. I also thank the noble Lord, Lord Graham, for the message he delivered from the noble Lord, Lord Williams of Elvel, which is much appreciated. I feel indebted to those Members of your Lordships' House who are present for their noble presence, as they have stayed up so late. If this is not a Lenten penance on Ash Wednesday, the first day of Lent, which deserves every kind of reward on earth and in Heaven, I do not know what is. It will be an act of kindness on the part of noble Lords to pass this Measure. I conclude, as I moved this Motion, by wishing your Lordships a very good Lent.
On Question, Motion agreed to.

River Humber (Upper Pyewipe Outfall) Bill [H.L.]
Queen's consent signified; Bill reported from the Unopposed Bill Committee without amendment.
Midland Metro Bill
Reported from the Unopposed Bill Committee with an amendment.
Midland Metro (No. 2) Bill
Reported from the Unopposed Bill Committee with amendments.
Taxation of Chargeable Gains Bill [H.L.]
Returned from the Commons agreed to.

Further and Higher Education Bill [H.L.]
Returned from the Commons agreed to with a privilege amendment; the amendment was considered and agreed to.
House adjourned at four minutes before midnight.